PRINCIPLES OF

MARKETING
Module 02 (Q3-Week 3-5): The Value of Customer Relations and Customer Service

Prepared by: Mr. Christian Faith C. Zebua

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Module 02 (Q3-Week 3-5): The Value of Customer Relations and Customer Service

I. LEARNING COMPETENCIES
1. Define “relationship marketing”.
2. Explain the value of customers.
3. Identify and describe “relationship development strategies”.
4. Illustrate successful customer service strategy in the Philippine business enterprise.

II. LESSON PRESENTATION

Relationship Marketing - is a strategy designed for customer loyalty, interaction, and long-term
engagement to be fostered. It focuses more on long-term customer retention than acquiring large
numbers of new and potentially single-transaction customers. It is designed to develop strong connections
with customers by providing them with information directly suited to their needs and interests by
promoting open communication.

Characteristics of Relationship Marketing:

1. It focuses on the long-term rather than the short-term.
2. It focuses on partners and customers rather than on the company’s products.
3. It puts more emphasis on customer retention and growth than on customer acquisition.
4. It relies on cross-functional teams rather than on departmental-level work.
5. It relies more on listening and learning than on talking.

Relationship marketing calls for new practices within the 4 Ps:

Product
▹More products are customized to the customers’ preferences.
▹New products are developed and designed cooperatively with suppliers and distributors.
Price
▹The company will set a price based on the relationship with the customer and the bundle of features and
services ordered by the customer.
▹In business-to-business marketing, there is more negotiation because products are often designed for
each customer.
Place
▹RM favors more direct marketing to the customer, thus reducing the role of middlemen.
▹RM favors offering alternatives to customers to choose the way they want to order, pay for, receive,
install, and even repair the product.
Promotion
▹RM favors more individual communication and dialogue with customers.
▹RM favors more integrated marketing communications to deliver the same promise and image to the
customer.
▹RM sets up extranets with large customers to facilitate information exchange, joint planning, ordering,
and payments.

Benefits of Relationship Marketing

In the business world, retaining customers has a lesser cost at least eight times compared to
acquiring new ones. Thus, this marketing capitalizes on the same fact and is beneficial to the company in
several ways.

1. Understanding Customer Characteristics

2. Delivery and Meeting Expectations
3. Repeat Business
4. Prevents Negative Transition
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5. Word-of-Mouth Marketing
6. Increasing Customer Base
7. Reduced Marketing Cost
8. Minimization of Customer Price Sensitivity
9. Identification with the Company
10. Product Market Expansion

Examples of Companies Using Relationship Marketing:

▹Ikea
▹Direct recruitment
▹American airlines
▹Dell
▹Vyvanse

Customer Value

Customer Value is the relationship between benefits and the costs including money, stress, and
time to sacrifice that is necessary to get those benefits. Or simply stated in a mathematical equation:

Benefits – Cost = Customer Value

In essence, customer value entails extraordinary delivery of four value-points or components

known also as SQIP:

Service - the intangible value offered to customers.

Quality - customer’s perception of how well a company’s products and services meet expectations.
Image - customers’ perception of the company or business they interact with.
Price - the price a company can command for its products and services that its customers are able and
willing to pay.

Three ways a company can establish customer value to its customer base:
1. Provide consumer with the best cost.
2. Provide the consumer with the best product.
3. Provide the consumer with the best service.

How to create customer value:

▹Understand what drives value for customers
▹Understand value proposition
▹Identify the customers and segments where the company can create more value relative to competitors
▹Create a win-win price
▹Focus investments on the most valuable customers

Importance of Customer Value

1. Designing and providing superior customer value are the keys to successful business strategy in the 21st
century.
2. Value reigns supreme in today’s marketplace and market-space.
3. Customers will not pay more than a product is worth and will reward excellence.
4. A customer-centric culture provides focus and direction for the organization, ensuring that exceptional
value will be offered to customers.
5. Designing and delivering superior customer value propels organizations to market leadership positions in
today’s highly competitive global markets – absolute advantage
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6. Providing outstanding customer value has become a mandate for management.
7. In choice-filled arenas, the balance of power has shifted from companies to valueseeking customers.
8. Managing customer value is even more critical to organizations in the new service and information-
based economy
9. Firms not providing adequate value to customers will struggle or disappear – customer value is a key
ingredient in building competitive advantage.
10. Today’s customers are quite smart and sophisticated and are looking for companies that:
a. Create maximum value for them based on their needs and wants, and
b. Demonstrate that they value their business.

Customer Relationship Development Strategies

Customer Relationship - is a marketing approach that focuses on creating an ongoing and long-term
relationship with customers.

Benefits in developing and implementing customer relationship:

1. Consistent Customer Experience
2. Customer Feedback
3. Customer Profitability
4. Customer Advocate
5. Innovation

Strategies in Developing Customer Relationship

1. Make every customer interaction count.
2. Follow-through on commitments and claims about products or services.
3. Develop Employees.
4. Offer benefits and product value that responds to the customer’s desires.
5. Treat customers as individual who are respected and valued.
6. Listen to customer.
7. Build a strong brand identity.
8. Surround customers with valuable information by using emails, websites, content, social media, and
other methods of outreach but do not be invasive.
9. The business must have a website.
10. Reward loyal customers.
11. Nothing strengthens a bond more that appreciation.
12. Create a blog about the business where discuss is more casual and inviting.

Customer Service Strategy in the Philippine Business Enterprise

Customer Service - is the act of taking care of the customer’s needs by providing and delivering
professional, helpful, high quality service and assistance before, during, and after the customer’s
requirements are met.

Elements of the Customer Service Strategy

1. A vision for customer service
2. Assessing customer needs
3. Hiring for Service
4. Organizational goals for customer service
5. Customer Service Training
6. Employee Accountability
7. Rewarding Good Service
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The Suki System in the Philippines
Suki System is a system of patronage in which a customer regularly buys their merchandise from a
certain client.

Suki – a partner system of doing business in the Philippines, wherein a customer buys certain products
from a particular vendor, who in turn offers discounts and other perks for such exclusivity. Filipinos use the
word suki to refer to both buyers and sellers, indicating their equal roles and obligations in an eponymous
relationship.

III. SUMMARY OF LESSON

 Relationship Marketing is a strategy designed for customer loyalty, interaction, and long-term
engagement to be fostered.
 Customer Value is the relationship between benefits and the costs including money, stress, and time to
sacrifice that is necessary to get those benefits.
 Customer Relationship is a marketing approach that focuses on creating an ongoing and long-term
relationship with customers.
 Customer Service is the act of taking care of the customer’s needs by providing and delivering
professional, helpful, high quality service and assistance before, during, and after the customer’s
requirements are met.
 Suki System is a system of patronage in which a customer regularly buys their merchandise from a
certain client.

IV. ACTIVITY ENGAGEMENT

Your Suki
Direction: Take a selfie of you and your suki store or karinderya. Remember to maintain social distancing in
your selfie picture. Then fill in the requirements inside the table below. (40 pts.)

(Selfie Pic w/ Caption) (20 pts.)

Why do you patronize the store/karinderya? (10 Ask the tindera(o)/owner on how they maintain
pts.) good relationship with their clients/customers.
Write the details below. (10 pts.)

V. ENRICHMENT
Direction: Search for one local company/business that practices relationship management. Then
enumerate at least 5 ways on how they practice such. (10 pts.)
VI. EVALUATION

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Direction: Using the business/product/service you have thought of from the previous module, develop relationship
marketing practices within the 4 Ps of Marketing. Make 2 practices for each P. (40 pts.)
Ex.
Business: Ampalaya Ice Cream
Product
- I’ll have variations of ampalaya ice cream flavors: mango ampalaya, ube ampalaya, choco ampalaya,
mocha ampalaya.
- I’ll use Xylitol instead of sugar so my product will be healthier.

VII. RESOURCES
https://www.slideshare.net/JohemieLopezQuinones/principles-of-marketing-for-grade-12-students-chapter-2