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RELATIONSHIPMARKETING IN

RETAILING

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What is Relationship

Marketing? It refers to all marketing activities

directed towards establishing,

developing and maintaining successfulrelational exchanges.

Relationship marketing is attracting,maintaining and, in multi-serviceorganizations, enhancing customerrelationships.

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What is RelationshipMarketing?

Relationship marketing concernsattracting, developing, and

retaining customerrelationships.

Relationship Marketing is making abond with the customer andretaining the customer through it.

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What is Relationship

Marketing?

Relationship marketing refers to all

marketing activities directed towardestablishing, developing, and

maintaining successful relational

exchanges.

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The Fir!s PotentialMarketing Relationships

Buyer Partnerships

InternalPartnerships

Supplier Partnerships

  LateralPartnerships

Focal

Firm

Employees

BusinessUnits

GoodsSuppliers

ServicesSuppliers

Competitors

 NonprofitOrganizations

Government

UltimateCustomers

IntermediateCustomers

FunctionalDepartments

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Building Relationships

RelationshipAttit&#es

Relationships! E)onoi)

%ontent

Relationships! So)ial%ontent

Relationships! Reso&r)e

%ontent

Attit&#inal

O&t)oes

*eha(ioralO&t)oes

First, let’s look at thefundamental drivers ofrelationships, theeconomic, resource,

and social contents.

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conomic !ontent

 "he purel# economic costs and bene$ts ofparticipating in the relationships

xamples%  &ervice fees  Interest rates  !osts saved due to superior management

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Resource !ontent

Bene$ts gained that match'complement the needs or resourcesheld b# the partner.

xamples%  (rofessional competence  !omprehensive $nancial services  Business development assistance  !onvenience )time as a resource*   "angibles  Brand e+uit#

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&ocial !ontent

(s#chic bene$ts gained due to feelings of compatibilit# --similar values, goals, etc. -- that result in a feeling ofcomfort.

xamples%  Relationships with emplo#ees  it of $rms mission and actions with customers values  igh +ualit# communication programs

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Building Relationships

RelationshipAttit&#es

Relationship

s! E)onoi)%ontent

Relationships! So)ial%ontent

Relationships! Reso&r)e

%ontent

Attit&#inalO&t)oes

*eha(ioralO&t)oes

Next, let’s look at theultimate outcomes of

relationships, whichimpact rm’s business performance.

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/ttitudinal 0utcomes

!ustomer beliefs that result fromrelationship d#namics, these attitudes cango on to impact behaviors and the

development of even stronger attitudes.

xamples%  Brand e+uit#  Brand personalit#

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Behavioral 0utcomes

(artner behaviors and intended behaviors thatdirectl# or indirectl# impact the $rmsperformance.

xamples%  Retention  (ositive word of mouth  !omplaining  1illingness to tr# new'other services

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Building Relationships

RelationshipAttit&#es

Relationships! E)onoi)

%ontent

Relationships! So)ial%ontent

Relationships! Reso&r)e

%ontent

Attit&#inalO&t)oes

*eha(ioralO&t)oes

What’s missing?ntermediar!, relationshipattitudes. "hese attitudes

are built from the particularcontent of the relationship

and go on to impact criticaloutcomes#

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valuation of relationshipMarketing

Relationship marketing in retailing has emerged outof two ma3or considerations%

  /t macro level, the recognition that marketingin4uences a wide range of areas includingcustomers ,emplo#ees, suppl#, internal, referral,and 5in4uencer markets such as the government

and $nancial markets6

 /t the micro level, the recognition that the natureof interrelations with customers is changing. "heemphasis is on moving from a transaction focus to

a relationship focus.

'i,eren)e -et een

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'i,eren)e -et$eenTransa)tional . Relationship

Marketing "ransactional Marketing Relationship Marketing

ocus on single sale ocus on customerorientation

0rientation on product features 0rientation on productbene$ts

&hort time scale 2ong time scale

2ittle emphasis on customer igh emphasis oncustomer service service

2imited customer commitment igh customercommitment

Moderate customer contact igh customer contact

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Relationship arketingstrategies in retailing

Relationship marketing strategies could becombination of one or all the followingbene$ts%

(ersonalization

&pecial "reatment Bene$ts

!ommunication Bene$ts

Rewards

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  (ersonalization

  (ersonal exchanges between bu#ers and sellers areimportant in in4uencing the +ualit# of relationship.

  "he term personalization describes the social content of

the interaction between service emplo#ees and theircustomers.

  0ther indicators of personalization e8orts are emplo#eesattempts to get to know a customer as a person, their

e8orts to engage in friendl# conversation, and theirexhibition of personal warmth.

  (ersonalization leads to a positive impact in terms ofincreasing trust in the seller'store, customer satisfaction

with the relationship, and repeat purchase.

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Spe)ial Treatent*ene/t

 !onsumer focus 9 selectivit#, i.e., all consumersdont need to be served in the same wa#, is a ke#aspect of relationship marketing.

 "he retailers can distinguish between at leasttwo identi$able customer segments%

 2o#al customers

 :on-2o#al customers

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%o&ni)ation *ene/ts

 !ommunication is often considered as a necessar# condition for theexistence of relationship.

 8orts to sta# ;sta# in touch< with the customers have beenidenti$ed as a ke# determinants of relationship enhancement in

retailer-customer relationship.

 "he intents levels of bu#ers-seller communication%=.Increase the probabilit# of discovering behaviors that generaterewards>.nhance the prediction of behaviors of the other part# and clari$eseach others roles.?.2eads to easier discovering of similarities between parties@.ncourages feelings of trust, special status and closeness.

Aenerall# communication strategies as part of relationship

marketing e8orts refer to directed communication to the customersas against mass media communication, which doesnt a8ord

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Re at ons p ar et ng n t e

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Re at ons p ar et ng n t eorgani0e# (s1 &norgani0e#

retail se)tor

0rganized%

=.&tandardized &ervices

>.1ell trained &ails sta8s

?.!ourteous 9 igh 7ualit# /mbience

@.1ide Range of merchandise stocks

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norganized%

=.2imited reach

>.2ocation convenience

?.!ustomized services

@.(rocuring merchandise 9 delivering

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