1. Sustaining Relationships
Building &
Sustaining Relationships
in Retailing
Chapter 2

2. Objectives Explain “Value” in Retailing
Describe Relationship Nurturing
Examine Relationship Building
Goods Retailers
Services Retailers
Discuss Impact of Technology on Retailing
Consider Interplay Between Ethical Performance and Relationships

3. Value Goals Customers Believe Good Value for Money
Customer Like Doing Business with Retailer
Channel Members Like Doing Business with Retailer

4. Value Chain Involves: Series of Activities and Processes
Manufacturer
Wholesaler
Retailer
Series of Activities and Processes
Provides a Given Level of Value for Consumers
Closely Related to:
Desire to Make Profit
Type of Strategy Pursued

5. Consumer Perception of Value
Benefits from Purchase
Cost VS Benefit
Varies by Shopper Type
Concerned with Outcome NOT Process

6. Value-Oriented Strategies
Expected Retail Strategy
Augmented Retail Strategy
Potential Retail Strategy

7. Value-Oriented Strategy Pitfalls
Planning Value with Only A Price Perspective
Providing Value-Enhancing Services Customers Don’t Want or Now Willing to Pay
Competing in the Wrong Value/Price Segment
Believing Augmented Elements Alone Create Value
Paying Lip Service to Customer Service

8. Customer Relationships
Customer Base
Core Customers

9. Customer Service
Expected
Augmented
Improvement
Employee Empowerment

10. Customer Service Strategy
Range
Level
Choice
Price
Measurement
Retention

11. Customer Service Classification
Cost of Offering Service
High
Low
Patronage Builders --
High-cost activities that are the
primary factors behind customer
loyalties
Patronage Solidifiers --
The “low-cost little things” that
increase loyalty.
High
Value of
Service
to Customer
Disappointers --
Expensive activities that do no
real good.
Basics --
Low-cost activities that are
“naturally expected.” They don’t
build patronage, but their
absence could reduce patronage.
Low

12. In House Credit Advantages Disadvantages Retailer Saves Fee
Customer Loyalty Encouraged
Disadvantages
Startup Costs
Slow Cash Flow
Administrative Costs
Customers without Card May Be Discouraged

13. Types of Credit Accounts
Revolving
Option
Open

14. Customer Satisfaction
Meet or Exceed Expectations
Dissatisfied Customers
Don’t Complain
Produces Little or No Results
Not Easy

15. Loyalty Program Commonalities
Useful Rewards
Appealing to Customers
Attainable
Honor Shopping Behavior
Unique to Participating Retailers
Personalized Communication
Consistent

16. Better Loyalty Programs
Rewards
Value-Added Benefits
Customer Recognition

17. Value Delivery System Each Channel Member Dependent
Every Value Delivery System Activity Must Be Enumerated
Customer Recognition
Small Retailers May Use Outside Suppliers
Good as its Weakest Link
Nature Related to Target Market Expectations
Costs & Functions Influenced by Each Party’s Role
Increasing Complexity
Nonstore Requires Different Delivery System
Channel Members are Adversarial

18. Effective Relationships
Consistency
Final Consumer Orientation
Common Positioning Goals
Activities Performed
Input Into Channel Decisions
Effective
Relationships
Proper Lead Time
Trust
Equitable Profit Distribution
Fairness
Marketing Support
Reliability
Coordination
Inventory Planning
Communications
Timeliness of Payments

19. Types of Services Retailing
Rented-Goods Services
Owned-Goods Services
Nongoods Services

20. Characteristics of Service Retailing
Intangibility
Perishability
Services
Retailing
Inseparability
Variability

21. Understanding the Customer
Service Quality Determinants
Tangibles
Credibility
Competence
Access
Reliability
Responsiveness
Courtesy
Communication
Understanding the Customer
Security

22. Technology and Realationships in Retailing
Roles Must Be Clear
Technology VS Humans
Consistent With Organization Objectives
Customers Expect Certain Advances

23. ATMs Instant Processing Smart Cards Electronic Banking
Retail Purchases
Smart Cards

24. The Evolving Bank Online Real-Time Banking Banking by Computer
Banking by Telephone
Bank Cost Savings
Customer Convenience
Automated Teller Machines
In-Store Banking
Traditional Branches

25. Technology & Interactions
P-O-S Scanning Equipment
Self-Scanning
Electronic Gift Card
Interactive Electronic Kiosks
Mass Customization

26. Articulate Acceptable Behavior Written Code of Ethics
Punish Poor Behavior
Top Managers Set Example

27. Social Responsibility
Best Interest of Society
Balance with Fair Level of Profitability

28. Consumerism
Right to be Informed
Right to Safety
Right to be Heard

29. What You Should Know “Value” in Retailing
How Relationships are Nurtured
How to Build Relationships
Goods Retailers
Services Retailers
Impact of Technology on Retailing
Understand the Interplay Between Ethical Performance and Relationships

30. Questions?
Questions?
Questions?
Questions?