RELATIONSHIP MARKETING

Presented by ----- GURU PRASAD PANDA

RAI BUSINESS SCHOOL
HYDERABAD

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 What is Relationship Marketing?
 Why Relationship Marketing?
 Are there any Benefits from RM?
 Are there any challenges?

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 INTRODUCTION
 It is a philosophy of doing business, a strategic
orientation, that focuses on keeping current
customers and improving relationships with
them. It does not necessarily emphasize
acquiring new customers.

 The focus is less on attraction, and more on

retention and enhancement of customer
relationships. 3
Stages in Relationship Marketing

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Underlying Logic of Customer
Retention
Customer
Customer
Satisfaction
Satisfaction

Quality
service

Customer
Customer Retention
Retention
&
& Increased
Increased
profits
profits

Employee
Loyalty

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 Need for Relationship Marketing
Transactional Marketing Relationship Marketing
1. Single sale recruitment 1. Retention of customer
2. Product Features 2. Product benefits &
systematic solution
3. Short term 3. Long term Relationship
4. Little importance to 4. Customer service taken as
Customer service most important element
5. Communicate to persuade 5. Communicate to make
sense & meaning
6. Goal is customer satisfaction 6. Goal is to delight the
customer
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FORMS OF BUYER SELLER
INTERACTION

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Benefits of Relationship Marketing
Customers:
1. Receipt of greater value

2. Confidence benefits:
trust , confidence in provider, reduced anxiety

3. Social benefits:
familiarity, social support, personal relationships

4. Special treatment benefits:

special deals, price breaks

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FIRMS:
1. Economic benefits:
increased revenues, reduced marketing and administrative costs
regular revenue stream

2. Customer behavior benefits:

strong word-of-mouth endorsements, customer voluntary performance
social benefits to other customers, mentors to other customers

3. Human resource management benefits:

easier jobs for employees, social benefits for employees
employee retention

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Benefits of Relationship Marketing

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Strategies for Building Relationships

Core Service Provision:

Service foundations built upon delivery of excellent service:
satisfaction, perceived service quality, perceived value

Quality in the core service

Segmentation and Targeting:
Focus and Competitive Advantage, Not worth the effort ,
Profitability Segments

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Difficulties faced by customers in switching
service providers

Switching Barriers:
 customer inertia
 switching costs:
 setup costs, search costs, learning costs, contractual
costs,
 Perceived risk

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 RELATIONSHIP CHALLENGES

Not all customers are good relationship

customers:
 Customer is not always right
 Wrong segment
 Not profitable in the long term
 Difficult customers

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Life Cycle of Satisfied customer

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 Conclusion

Relationship marketing is all about creating,

building and maintaining the relationships
with the customers for the long-term profits.

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THANK YOU
Relationship Marketing 16