RELATIONSHIP
MARKETING
PREPARED BY
DARSANA D
ROLL NO 5
MBA IB

 Relationship marketing has the aim to
building mutually satisfying long term
relationship with key parties in order to
earn and retain their business.
 Relationship marketing builds strong
economic, technical and social ties
among the parties
 -
KOTLER

 Relationship marketing is based on
interaction within networks of relationships
 Relationship marketing seen as relationship
networks and interactions
 -EVERT
GUMMESSON

RM VS TRANSACTIONAL MARKETING
 Relationship marketing uses methods to
develop long term relationship with customer
in order to retain and develop a healthy
relationship with their customer
 Transactional marketing is focusing all of its
marketing efforts on attracting customer for
one off sale

CUSTOMER RELATIONSHIP MARKETING
 CRM is the values and strategies of
relationship marketing with particular
emphasis on customer relationship turned
into practical application

CUSTOMER LIFETIME VALUE
 Losing an existing customer means losing
the entire revenue stream that customer
represents not just that single encounter or
sale

CUSTOMER LOYALITY AND SATISFACTION
 Highly satisfied customer are ;
 Less price sensitive
 More likely to talk favourably about product
 More likely to refer products to others
 Remain loyal for long

5 LEVELS OF RELATIONSHIP MARKETING
 Basic marketing
 Reactive marketing
 Accountable marketing
 Proactive marketing
 Partnership marketing

 Basic Marketing – The salesperson sells to
the final customers. This is also known as
direct sales.
 Reactive Marketing – The sales person
sells the product and encourages the
customer to call for any comments or
enquiries.

 Accountable Marketing – The sales person
calls the customers to ensure whether the
product is working as per satisfaction and if
there is any problem in the product.
Furthermore he also asks the customer for
any suggestions / feedback to improve the
service / product. Thus he is taking
responsibility for the sale.

 Proactive marketing – The company works
continuously with its large customers to help
improve performance. This is especially seen
in financial companies wherein the
movement in the financial market induces the
company to make changes regularly.
However at the same time, these financial
companies have to take care of their
customers as well. Thus they take regular
feedback from their large customers thereby
developing their products accordingly.

 Partnership Marketing – The company
works continuously with its large customers
to improve its performance.

10 CRITICAL PLAYERS IN RM
1. Supplier
2. Distributors
3. End users
4. Employees
5. Financial firms
6. Government
7. Media
8. Allies
9. Competitors
10. General public

RELATIONSHIP MARKETING AND THE 4PS
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.

Distribution (Place)
 RM favours more direct marketing to the
customer, thus reducing the role of
middlemen.
 RM favours offering alternatives to customers
to choose the way they want to order, pay
for, receive, install, and even repair the
product.

Communication (Promotion)
 RM favours more individual communication
and dialogue with customers.
 RM favours 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.

PROPERTIES OF RELATIONSHIP MARKETING
 Collaboration
 Commitment, Dependency
 Trust, risk and uncertainty
 Power
 Longevity
 Frequency, regularity and intensity
 Closeness and remoteness

 Formality, informality and openness
 Routinization
 Content
 Personal and social properties

WHY RM IS IMPORTANT ?
 It costs five times as much to attract a new
customer as it does to keep a current one
satisfied
 It is claimed that a 5% improvement in customer
retention can cause an increase in profitability
b/w 25% and 85% depending on the industry
 Like wise it is easier to deliver additional
products and services to an existing customer
than to a first time ―buyer‖

CONCLUSION
 Relationship marketing is the practice of
building long-term satisfying relations with
key parties—
customers, suppliers, distributors—in order
to retain their long-term preference and
business.

THANK YOU