Different Approaches to Marketing

Ahamed Aroos
PGDMgt, (PIM, UsJ)  MBA, PGDipM, MCIM, Chartered Marketer (UK),
MAMA, (USA), MSILM, Practicing Marketer, FCPM, (SL)

Chief Operating Officer

Rainco (Pvt) Limited
 Objectives
• Review traditional approaches to marketing

• Introduce relationship marketing and explore its

implications for service management (in particular)

• Introduce the service dominant logic (versus goods

dominant logic) and explore its implications for
service management
 What is marketing?
• Facilitating an exchange Customer
between two parties

Un
de
• A management process,

rst
MA din
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an organizational function,

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AND a philosophy

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Organisation
 How does it work in practice?
• You can’t understand and/or influence all of
the people all of the time

• Marketers need to ‘home in’ on the best/most

appropriate customers

• Traditionally, this has been done through the

target marketing process (STP)
 The target marketing process
Define
market

Segment
market
Product
Target a
segment
Price

Position
Promotion

Place
Criticisms of the transactional approach
• Studies on the profitability of retention

• Changes in technology (data storage and

processing of CRM)

• Changes in customer culture

• Works less well in service industry

 Services are different

• Intangible
• Inseparable
• Variable (heterogeneous)
• Perishable
 The target marketing process
Define Product
market
Price
Segment
market
Place
Target a
segment
Promotion

Position
People

Physical evidence

Process
The extended marketing mix
Define Product
market
Price
Segment
market
Place
Target a
segment
Promotion

Position
People

Physical evidence

Process
 The Three Additional Ps
People
All human actors who play a part in service delivery and influence a
buyer’s perceptions

Physical Evidence
The environment in which the service is delivered and where firm and
customer interact, plus any tangible components that facilitate
performance or communication of the service.

Process
The procedures, mechanisms, and flow of activities by which the
service is delivered
What is relationship marketing?
“…to identify and establish, maintain and enhance and,
when necessary, terminate relationships with customers
and other stakeholders, at a profit so that the objectives
of all parties are met; this is done by mutual exchange
and the fulfilment of promises.” (Grönroos, 1994)
 Transactional Marketing
Focus on single exchange
Short-term profit-maximization perspective
Marketing is the concern of the marketing
department
Focus on customer attraction
Adversarial relationships with suppliers
motivated by self-interest
Low/moderate customer contact
Quality is the concern of operations
Emphasis on product
Focus on customer
Relationship Marketing
Focus on continual stream of interactions
Long-term perspective (customer lifetime
value) to develop trust and loyalty
Marketing is the concern of everyone in the
organization
Focus on retention (but must attract too)
Collaborative relationships based on
mutual and reciprocal benefits.
High customer contact
Quality is the concern of all staff
Emphasis on service as well as core
product
Develop relationships with all stakeholders
 The Six Markets Model
(Christopher et al., 1991)
Internal Referral
markets markets

(Employee)
Customer Influence
Recruitment
markets markets
markets

Supplier
markets
 Service-Dominant Logic
(Vargo and Lusch, 2008)

• In traditional ‘goods-dominant logic’, value is

created by the firm, distributed in the market and
exchanged for money.

• From this perspective, the roles of ‘producer’

and ‘consumer’ are distinct, and value creation
is a series of activities performed by the firm.
 The Service-Dominant Logic in a nutshell
• Value is created from the integration of provider and
customer resources
• These resources are primarily operant resources (skills,
knowledge)
• Operant resources are the fundamental source of
competitive advantage
• Operant resources do not automatically confer value but
offer value potential
• Value potential is realised through a process of co-creation
 References
• Christopher, M., Payne, A., and Ballantyne, D. (1991) Relationship
Marketing. Oxford: Butterworth-Heinemann.
• Grönroos, C. (1994), From marketing mix to relationship marketing:
towards a paradigm shift in marketing. Management Decision. 32
(2), pp. 4-20.
• Reichheld, F. (1994) Loyalty and the renaissance of marketing.
Marketing Management. 2 (4), pp. 10-21.
• Vargo, S. and Lusch, R. (2008) Service-dominant logic: continuing
the evolution. Journal of the Academy of Marketing Science. 36 (1),
pp. 1-10.
Thank you…

Ahamed Aroos
PGDMgt, (PIM, UsJ)  MBA, PGDipM, MCIM, Chartered Marketer
(UK), MAMA, (USA), MSILM, Practicing Marketer, FCPM, (SL)

Chief Operating Officer

Rainco (Pvt) Limited