CRM IN B2B

MODULE 3

RELATIONSHIP MARKETING

Relationship marketing is a form of marketing that evolved from direct response marketing in the 1960s and emerged in the 1980s, in which emphasis is placed on building longer term relationships with customers rather than on individual transactions.

It involves understanding the customer's needs as they go through their life cycles.

It emphasizes providing a range of products or services to existing customers as they need them.

What is relationship marketing?

It is a philosophy of doing business, a strategic orientation, that focuses on keeping and improving relationships with current customers rather than on acquiring new customers. It is the use of the wide range of marketing, sales, communication, and customer care techniques and processes to identify your named individual customers, create a relationship between your company and these customers.

The goal of relationship marketing.

The primary goal of relationship marketing is to build and maintain a base of committed customers who are profitable for the organization

Development of relationship marketing

Relationship marketing originated in industrial and B2B markets where long-term contracts have been quite common for many years. Academics like Barbara Bund Jackson at Harvard re-examined these industrial marketing practices and applied them to marketing proper.

According to Leonard Berry, relationship marketing can be applied: when there are alternatives to choose from; when the customer makes the selection decision; and when there is an ongoing and periodic desire for the product or service.

The practice of relationship marketing has been greatly facilitated by several generations of customer relationship management software that allow tracking and analyzing of each customer's preferences, activities, tastes, likes, dislikes, and complaints. This is a powerful tool in any company's marketing strategy.

BUYER-SELLER INTERACTION

The most important part of buyer-seller relationship is the interaction between a representative of the buying organization (buyer) and a representative of the selling organization ( sales rep).

It is the basic building block.

BUYER-SELLER RELATIONSHIP

The 2 factors are:

CONTENT of information.

STYLE of information exchange,

Given by Dr.Jagdish n sheth.

Content includes product features, prices, services and individual needs of buyer and seller.

Style includes mannerisms and format used by buyer and seller in their communication.

The 3 styles of interactions are as follows:

TASK-ORIENTED

INTERACTION ORINTED (social and personal interaction)

SELF-ORINTED (pre-occupied with one’s self interest).

IDEAL TRANSACTION

INEFFICIENT TRANSACTION

INEFFICIENT TRANSACTION

NO TRANSACTION

Compatible style Incompatible style

Buyer – seller interaction------------ conceptual framework

The buyer-seller interaction is a dyadic (2 persons) interaction between and a seller.

Both the buyer and seller have personal needs and organizational needs to satisfy. These needs become the starting point of their interaction.

Transaction oriented buyer-seller interactions help in creating new customers.

TYPES OF RELATIONSHIPS

It is of 3 types:

Transactional exchanges/relationships.

Value-added exchanges.

Collaborative/partnering exchanges/relationship.

Every relationship is an exchange, which is the process of obtaining a desired product or service from someone by offering something in return.

TRANSACTIONAL RELATIONSHIP

Focuses on timely exchange of a basic product for a competitive price between the customer and the supplier.

Include one-time only exchanges with economy and necessity as the main motivational factors.

There is little interest by either the buyer or the seller to extend the relationships.

VALUE ADDED EXCHANGES

Between the transactional exchanges and collaborative exchanges are the value added exchanges.

Complete understanding of the present and future needs of the customer and meeting those needs better than competitors.

COLLABORATIVE/PARTNERING EXCHANGES

It is the relationship between the customer and the supplier.

The purpose of partnering is to lower the total costs or increase value in order to achieve mutual benefits.

The foundation of collaborative exchange is commitment and trust.