RELATIONSHIP

MARKETING IN
RETAILING

What is Relationship
Marketing?

It refers to all marketing activities

directed
towards
establishing,
developing and maintaining successful
relational exchanges.

Relationship marketing is attracting,

maintaining
and,
in
multi-service
organizations,
enhancing
customer
relationships.

What is Relationship
Marketing?
Relationship marketing concerns
attracting, developing, and
retaining customer
relationships.
Relationship Marketing is making a
bond with the customer and
retaining the customer through it.

What is Relationship
Marketing?
Relationship marketing refers to all
marketing activities directed toward
establishing, developing, and
maintaining successful relational
exchanges.

The Firms Potential

Marketing Relationships
Supplier Partnerships
Goods
Suppliers

Services
Suppliers

Business
Units

Competitors

Focal
Firm

Employees

Nonprofit
Organizations

Functional
Departments

Internal
Partnerships

Lateral
Partnerships

Government

Intermediate
Customers

Ultimate
Customers

Buyer Partnerships

Understanding How Customer

Relationships Develop

Relationship
s Economic
Content

Relationship
s Resource
Content

Relationship
s Social
Content

Attitudinal
Outcomes

Relationship
Attitudes

Behavioral
Outcomes

Building Relationships

Relationship
s Economic
Content

Relationship
s Resource
Content

Relationship
s Social
Content

First, lets look at the

fundamental drivers of
relationships, the
economic, resource,
and social contents.

Attitudinal
Outcomes

Relationship
Attitudes

Behavioral
Outcomes

Economic Content

The purely economic costs and benefits of

participating in the relationships

Examples:

Service fees
Interest rates
Costs saved due to superior management

Resource Content

Benefits gained that match/complement the needs or resources

held by the partner.

Examples:

Professional competence
Comprehensive financial services
Business development assistance
Convenience (time as a resource)
Tangibles
Brand equity

Social Content

Psychic benefits gained due to feelings of compatibility -similar values, goals, etc. -- that result in a feeling of
comfort.

Examples:

Relationships with employees

Fit of firms mission and actions with customers values
High quality communication programs

Building Relationships

Relationship
s Economic
Content

Relationship
s Resource
Content

Relationship
s Social
Content

Next, lets look at the

ultimate outcomes of
relationships, which
impact firms business
performance.

Attitudinal
Outcomes

Relationship
Attitudes

Behavioral
Outcomes

Attitudinal Outcomes

Customer beliefs that result from

relationship dynamics, these attitudes can
go on to impact behaviors and the
development of even stronger attitudes.

Examples:

Brand equity
Brand personality

Behavioral Outcomes

Partner behaviors and intended behaviors that

directly or indirectly impact the firms
performance.

Examples:

Retention
Positive word of mouth
Complaining
Willingness to try new/other services

Building Relationships
Relationship
s Economic
Content

Relationship
s Resource
Content

Relationship
s Social
Content

Whats missing?
Intermediary, relationship
attitudes. These attitudes
are built from the particular
content of the relationship
and go on to impact critical
outcomes!

Attitudinal
Outcomes

Relationship
Attitudes

Behavioral
Outcomes

Indicators of effective
relationship marketing in
retailing
High level of trust
High level of commitment
Long time horizon (length of relation)
Open communication channels
Retailer having the customer interest at heart
A commitment to quality
An attempt by the retailer to favorably lock-in or retain the
customer

Evaluation of relationship
Marketing
Relationship marketing in retailing has emerged out
of two major considerations:
At macro level, the recognition that marketing
influences
a wide range of areas including
customers ,employees, supply, internal, referral,
and influencer markets such as the government
and financial markets;
At the micro level, the recognition that the nature
of interrelations with customers is changing. The
emphasis is on moving from a transaction focus to
a relationship focus.

Difference between
Transactional & Relationship
Marketing
Transactional Marketing
Focus on single sale
orientation
Orientation on product features
benefits
Short time scale
Little emphasis on customer
customer service
Limited customer commitment
commitment
Moderate customer contact

Relationship Marketing
Focus on customer
Orientation on product
Long time scale
High emphasis on
service
High customer
High customer contact

Relationship marketing
strategies in retailing
Relationship marketing strategies could be
combination of one or all the following
benefits:
Personalization
Special Treatment Benefits
Communication Benefits
Rewards

Personalization

Personal exchanges between buyers and sellers

important in influencing the quality of relationship.

are

The term personalization describes the social content of

the interaction between service employees and their
customers.
Other indicators of personalization efforts are employees
attempts to get to know a customer as a person, their
efforts to engage in friendly conversation, and their
exhibition of personal warmth.

Personalization leads to a positive impact in terms of

increasing trust in the seller/store, customer satisfaction
with the relationship, and repeat purchase.

Special Treatment
Benefit
Consumer focus & selectivity, i.e., all consumers
dont need to be served in the same way, is a key
aspect of relationship marketing.
The retailers can distinguish between at least
two identifiable customer segments:
Loyal customers
Non-Loyal customers

Communication Benefits
Communication is often considered as a necessary condition for the
existence of relationship.
Efforts to stay stay in touch with the customers have been
identified as a key determinants of relationship enhancement in
retailer-customer relationship.
The intents levels of buyers-seller communication:
1.Increase the probability of discovering behaviors that generate
rewards
2.Enhance the prediction of behaviors of the other party and clarifies
each others roles.
3.Leads to easier discovering of similarities between parties
4.Encourages feelings of trust, special status and closeness.
Generally communication strategies as part of relationship
marketing efforts refer to directed communication to the customers
as against mass media communication, which doesnt afford

Rewards
Providing customers with tangible rewards in often referred to
as level one relationship marketing.
Psychologists have long been interested in the role of
rewards in behavioral learning and modification
Frequent flyer programs, customer loyalty bonuses, free gifts,
personalized discount coupons, another point for benefit
clubs are examples of relationship efforts.
It is important to remember that rewarding efforts generally
dont lead to sustained competitive advantages given the
reality that price is the most easily imitated element of the
marketing mix.
Rewards should be designed to promote long term behavior
and discourage short term deal seeking behavior.

Relationship marketing in the

organized vs. unorganized
retail sector
Organized:
1.Standardized Services
2.Well trained Sails staffs
3.Courteous & High Quality Ambience
4.Wide Range of merchandise stocks

Unorganized:
1.Limited reach
2.Location convenience
3.Customized services
4.Procuring merchandise & delivering