1. three Core strategy PART Chapter 8: Relationship marketing
Chapter 9: Segmentation and positioning
Chapter 10: Competitive strategy
three
PART

2. Video Case: Acme Whistles (1)
How does a manufacturer of relatively low-tech products, such as whistles, compete effectively against numerous low-cost, copycat competitors?
Principles of Marketing 5e, © Pearson Education 2008

3. Video Case: Acme Whistles (1)
Principles of Marketing 5e, © Pearson Education 2008

4. Video Case: Acme Whistles (2)
How might the marketing mix vary for products developed for consumer and industrial customers?
How can the Internet help a small business reach global markets?
Principles of Marketing 5e, © Pearson Education 2008

5. Video Case: Acme Whistles (2)
Principles of Marketing 5e, © Pearson Education 2008

6. Relationship marketing
CHAPTER
eight
Relationship marketing

7. Previewing concepts (1)
Define customer value and discuss its importance in creating and measuring customer satisfaction
Discuss the concepts of value chains and value delivery systems and explain how companies go about producing and delivering customer value
Principles of Marketing 5e, © Pearson Education 2008

8. Previewing concepts (2)
Define quality and explain the role of total quality marketing in building profitable customer relationships
Explain the importance of retaining current customers as well as attracting new ones
Understand the role and operation of customer relationship management
Principles of Marketing 5e, © Pearson Education 2008

9. Prelude case: The most important part of a car is the distributor
Principles of Marketing 5e, © Pearson Education 2008

10. Satisfying customer needs
A customer-centred company is one that focuses on customer developments in designing its marketing strategies and on delivering superior value to its target customers.
Principles of Marketing 5e, © Pearson Education 2008

11. Figure 8.1 Customer delivered value
Principles of Marketing 5e, © Pearson Education 2008

12. Upon what does customer satisfaction depend?
Customer satisfaction depends upon the product’s performance relative to a buyer’s expectations.
Principles of Marketing 5e, © Pearson Education 2008

13. How do buyers form expectations?
Past buying experiences
Opinions of friends and associates
Marketer and competitor information and promises
Principles of Marketing 5e, © Pearson Education 2008

14. The role of customer delight
Customer delight creates an emotional affinity for a product or service beyond just a rational preference and this creates high customer loyalty
Principles of Marketing 5e, © Pearson Education 2008

15. Methods of tracking customer satisfaction
Complaint and suggestion systems
Customer satisfaction surveys
Ghost shopping
Lost customer analysis
Principles of Marketing 5e, © Pearson Education 2008

16. The value chain
The value chain is the main tool for identifying ways to create more customer value
It breaks a firm into nine value-creating activities to understand the behaviour of costs in the specific business and potential sources of competitive differentiation
Principles of Marketing 5e, © Pearson Education 2008

17. Figure 8.2 Generic value chain
Principles of Marketing 5e, © Pearson Education 2008

18. Core business processes
Product development process
Inventory management process
Order-to-payment process
Customer service process
Principles of Marketing 5e, © Pearson Education 2008

19. What is the customer value delivery system?
A customer value delivery system is a system made up of the value chains of the company and its suppliers, distributors, and ultimately customers, who work together to deliver value to customers.
Principles of Marketing 5e, © Pearson Education 2008

20. Figure 8.3 Relative quality boosts rate of return
Principles of Marketing 5e, © Pearson Education 2008

21. What is total quality management?
Total quality management refers to programmes designed to constantly improve the quality of products, services and marketing processes.
Principles of Marketing 5e, © Pearson Education 2008

22. Figure 8.4 The European Foundation for Quality Management’s model of business excellence
Principles of Marketing 5e, © Pearson Education 2008

23. How can we make customers more profitable?
Maximise customer lifetime value
Improve customer retention
By reducing customer defections by only 5%, companies can improve profits by anywhere from %
Principles of Marketing 5e, © Pearson Education 2008

24. What is relationship marketing?
Relationship marketing involves creating, maintaining and enhancing strong relationships with customers and other stakeholders.
Principles of Marketing 5e, © Pearson Education 2008

25. Relationship levels Basic Reactive Accountable Proactive Partnership
Principles of Marketing 5e, © Pearson Education 2008

26. Figure 8.5 Relationship levels as a function of profit margin and number of customers
Principles of Marketing 5e, © Pearson Education 2008

27. Customer value-building approaches
Financial benefits
Social benefits
Structural ties
Principles of Marketing 5e, © Pearson Education 2008

28. Steps in establishing a relationship-marketing programme
Identify the key customers meriting relationship management
Assign a skilled relationship manager to each key customer
Develop a clear job description for relationship managers
Have each relationship manager develop annual and long-range customer relationship plans
Appoint an overall manager to supervise the relationship managers
Principles of Marketing 5e, © Pearson Education 2008

29. Selective relationship management
Relating with more carefully selected customers
Relating for the long term
Relating directly
Principles of Marketing 5e, © Pearson Education 2008

30. What is customer relationship management?
Customer relationship management involves managing detailed information about individual customers and carefully manage customer touch points.
Principles of Marketing 5e, © Pearson Education 2008

31. Touch points Customer purchases Sales force contacts
Service and support calls
Website visits
Satisfaction surveys
Credit/payment interactions
Market research studies
Other contacts between customer and company
Principles of Marketing 5e, © Pearson Education 2008

32. Ping’s CRM initiative
Ping relies on a data warehouse with customer- specific data about every golf club it has manufactured for the past 15 years
Principles of Marketing 5e, © Pearson Education 2008

33. Figure 8.6 Comparing customer relationship revenues with relationship costs
Principles of Marketing 5e, © Pearson Education 2008

34. Figure 8.7 The 8 Cs competitive domain
Principles of Marketing 5e, © Pearson Education 2008

35. Discussing the concepts (1)
Describe a situation in which you became a ‘lost customer’. Did you drop the purchase because of poor product quality or both? What should the firm do to ‘recapture’ lost customers?
How might total quality be managed for the following products?
Packaged foods
Restaurant meal
Public utility
Family holiday
University education
Principles of Marketing 5e, © Pearson Education 2008

36. Discussing the concepts (2)
Recall a purchase experience in which the sales assistant or some other representative of an organisation went beyond the normal effort to produce the utmost in service quality. What impact did the noticeable effort have on the purchase outcome?
Principles of Marketing 5e, © Pearson Education 2008

37. Discussing the concepts (3)
How does the meaning of service quality differ between items bought online, through a call center or at a traditional retail store?
Principles of Marketing 5e, © Pearson Education 2008