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MARKETING CHANNELS
Relationship Marketing
and
Customer Service
Berman Chapter 5
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Relationship Marketing
• 1. Introduction - a,b,c,d
• 2. Evaluating the Use of Relationship
Marketing
• 3. Developing a Customer Service Strategy
• 4. Implementing a Customer Service
Strategy
• 5. Customer Service Standards in Physical
Distribution
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1 a. Transactional Marketing
• transactional marketing
– multiple sources of supply– switches frequently among suppliers – buys largely on price basis
• focuses on exchanges in single transactions
– adversarial in nature4
1. a Transactional Marketing
• Three fundamental assumptions
– buyer plays off suppliers to gain price
concessions and ensure continuity of supply – buyer allocates an amount to suppliers to keep
them in line
– buyer assumes arms-length posture – buyer uses only short term contracts
• criticisms - too little attention to holding
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1. b Relationship Marketing
• basis -
– building and maintaining long term relationship between buyers and sellers
– based on trust and commitment
• elements - similar to personal relationships
– shared values, trust, mutual respect, mutual benefit, frequent communications, honest feedback, cooperation, flexibility,
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1. b Relationship Marketing
• emphasis
– keeping existing customers
– forming and maintaining strong long-term ties
• social (friendship)
• economic ( joint investment)
• technical ( joint product development)
• basis
– communications, consultancy, conflict
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1. c Levels of Relationship
Marketing
• One
– financial bond,
– customer marketing orientation,
– low degree of service customization, – low potential for sustained competitive
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1. c Levels of Relationship
Marketing
• Two
– social bond
– client marketing orientation
– medium degree of service customization
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1. c Levels of Relationship
Marketing
• Three
– structural bond
– client marketing orientation
– medium to high degree of service
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1. d Implications of
Relationship Marketing
– opportunity costs
• Distributor Decision Making
• Product Decision Making
• Pricing Decision Making
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2. Evaluating the use of
Relationship Marketing Strategy
• Advantages and Disadvantages
• When transactional and relationship
marketing are best used
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3. Customer Service Strategy
• A. Definition of Customer Service
– a customer-oriented corporate philosophy – integrated and managing all elements of the
customer interface
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3. Customer Service Strategy
a. development
• Components by stage
– pretransaction - internal operations
– transaction - physical appearance,order status, order accuracy
– posttransaction - startup, problem handling
• service gap
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3. Customer Service Strategy
b. Economics
• Three approaches
– loss in profits due to defecting customers
– impact of small changes in customer retention on sales and profits
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3. Customer Service Strategy
c. Models
• Porter’s Value Chain
– high reliability, ease of use, ease of repair – product adequacy determination
• SERVQUAL dimensions (Zeithaml)
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4. Customer Service Strategy
a. Implementation
• A. Total quality management and Customer
Service
– constant feedback – benchmarking
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4. Customer Service Strategy
b. Common principles
– have a written customer service policy – monitor customer service levels
– get employees close to the customer
– study customer service as defined by the customer
– empower the employee
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b. Common principles
– think in terms of lifetime income – think in terms of profit stream – utilize technology
– make customer service part of the career path – be concerned with
• customer retention
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5. Customer Service Standards
in Physical Distribution
• Characteristics
– ease of inquiry, order placement,order retention – timely, reliable order delivery and
communications
– accurate, complete, undamaged orders and error free paperwork
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• Characteristics (cont)
– availability – timeliness – quality
• reliability measure • service failures
• fraction of demand billed from stock
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6. Evaluating Suppliers
Multiple Customer Service
Standards
A. the linkage between quality measures
– product – sales
– installation – repair
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A. The Linkage Between Quality Measures -reliability 40%
product - easy to use 20%
30% - features/functions40% - knowledge 30%
sales - response 25% 30% - follow-up 10% Overall
Quality - delivery interval 30% installation - doesn’t break 25%
10% - installed when promised 10%
- no repeat troubles 30% repair - fixed fast 25%
15% - kept informed 10%
