Relationship Marketing

STUDY
PLAY
Effective Alliances and Partnerships
- individual excellence
- importance (strategic significance)
- interdependence
- investment
- information (transparency)
- institutionalization (structure)
- integrity
Customer Definition
- individuals or households
- purchase goods and services generated within the economy
- "custom" meaning "habit"
- started with relationships (with shopkeepers because habit to go to one shop)
Keiretsu
close knit network of vendors that continuously learn, improve, and prosper along with their parent company
Supplier-partnering hierarchy (pyramid)
- conduct joint improvement activities (top)
- share info intensively but selectively
- develop suppliers technical capabilities
- supervise your suppliers
- turn supplier rivalry into opportunity
- understand how your suppliers work (bottom)
Marketing (old definition)
ongoing process of planning and executing the marketing mix (4p's) for products/services to create exchange between individuals and organization
4 P's (just in case)
product
price
place
promotion
factors leading to Marketing 3.0
- rapid and wrenching global changes (more in notes)
- as macroeconomic changes occur, consumer behavior changes
- companies focus has changed (from consumer-centricity to human-centricity)
marketing 3.0
- people are more than consumers (humans with hearts, minds, souls)
- looking not only for functional/emotional fulfillment, also for human fulfillment in prod and service
- lifts mktg arena of human aspirations, values, spirit
- companies differentiate themselves by their values
- what you stand for - what you believe in
forces that shape the business landscape to mktg 3.0
(basic forces - decrp. in study guide)
1) age of participation and collaborative mktg
2) age of globalization paradox and cultural mktg
3) rise of creative society (age of creative society and human spirit mktg)
evolution of marketing
(age of participation and collaborative mktg)
1st stage - transaction oriented - focused on making a sale
2nd stage - relationship oriented - keep a customer coming back to buy more
3rd stage - consumer participation - inviting customers to participate
the globalization paradox
1. globalization may open the economy but not the politics
2. calls for economic integration but does NOT create equal economies - hurts as many as it helps
3. creates a diverse not uniform culture - globalism vs. tribalism - we need someone/something to hold onto
Marketing (new definition)
AMA 2008
- activity, set institutions, and processes for creating, communicating delivering, and exchanging offerings that have value for consumers, clients, partners, and society at large
- puts cultural issues at the heart of the company's business model
_________ _________ is the future value proposition in marketing.
"supplying meaning"
Differentiation
-brands DNA that reflects true integrity of the brarnd
- solid proof that a brand is delivering what it promises
(identity, integrity, image)
Four domains of human experience
(list/briefly explain)
1) public sphere - move from place/activity to another (online and offline)
2) social sphere - where we interact with/relate to one another
3) tribal sphere - affiliate with groups to define or express our identity
4) psychological sphere - connect language with specific thoughts and feelings
role of marketers
- understand dual role of both marketer and consumer
- realign trust in the different communities
- "new consumer trust system" horizontal not vertical!
relationship building requires:
- willing participation
- reciprocity (balance of giving and getting)
relationship marketing requires:
(list and briefly explain)
- seeing marketing through customers eyes (empathy)
- regaining customer trust
- attain true intimacy
focus on consumer not company
consumer advocacy
- means companies are truly representing their customers best interests, essentially becoming advocates for them
(ex. would be willing to recommend competitor)
- key: companies must become trustworthy in eyes of consumer
elements of customer advocacy
(list some on test)
1) transparency
2) quality of products and services
3) product comparison (recommend competitor)
4) alignment of incentives
5) partnering - move towards consulting (help customer help themselves)
6) cooperative design - build your own, buy what you need
7) supply chain - all on chain must adopt advocacy
8) comprehensiveness - entire org. must adopt advocacy
5 tactics
(stop trying to delight your customers - list 3/5 prob)
1) dont resolve current issues - head off the next one
2) arm reps to deal with emotional side of issue
3) minimize channel switching by increase self service channel "stickiness"
4) use feedback from disgruntled customers to reduce customer effort
5) empower the front line to deliver low-effort experience
__________ are the new brand owners.
"consumers"
company mission must:
1) business as unusual - creating
2) story that moves people - spreading
3) consumer empowerment - realizing
In marketing 3.0 __________ is the new advertising.
"conversation"

conversation is many to many (Reed's Law)
Corporate values
(mabes on final)
- permission to play
- aspirational values
- accidental values
- core values
what do good values stimulate with employees?
- collaboration - encourages employees to work together
- cultural changes - inspires employees
- creativity - opportunity to innovate
3 positive attributes for a company
- attracting and retaining talent
- back-office productivity and front office quality
- integrating and empowering differences
"We're not in the coffee business --- we're in the ________ business"
"experience"
Starbucks quote
service quality
a function of the gap between perceptions of the actual service experienced and what a consumer expected before receiving the service
employee satisfactions drives __________
"loyalty"
what do employees want?
"the ability and authority of service workers to achieve results for customers"
(to do their job)
job satisfaction
"service workers' perceptions of their ability to meet customer needs"
mature market - challenge to marketers
- little to no growth
- knowledgeable customers
- customers view products as commodities
two forces require companies to support transformation
- future growth
- differentiation
cause marketing proposal
(briefly explain)
stage 1 - assessing the fit
stage 2 - valuing the partnership
stage 3 - structuring the arrangement (put the pieces together)
stage 1 - assessing the fit
- avoid the negatives
- first order fit - monetary (fit vs. synergies)
- second order fit - strong strategic fit for both (ex. employee happiness leads to inc. profitability)
stage 2 - valuing the partnership
- net benefit for profit firm- inc. revenues, company employees and investors, general public
- net benefit for nonprofit firm- inc. fundraising and support (awareness and credibility), behavior change
stage 3 - structuring the arrangement
develop a relationship
implementing the framework:
1. consider other party
2. recognize that brand value changes with partner and use
3. don't get hung up on first order benefits
4. the agreement is only the start
5. there is a danger of too many relationships
cause marketing vs. corporate social responsibility (CSR)
CSR - corp demonstrates social responsibility throughout the practices and policies that guide their prod production and service delivery - which delivers value to their shareholders. Company can be socially responsible without contributing to charity

Cause marketing - leveraging a charitable brand to increase sales, support product positioning or differentiate from competitors
human moment
authentic psychological encounter that ONLY occurs when:
- both are physically present (share the same space)
- both are paying emotional and intellectual attention
Toxic worry
no basis in reality; immobilizes and leads to indecision or destructive behavior
top two predictors of well being as people age
- frequency of visits with friends
- frequency of attendance at meetings and organizations
______________ is the ultimate form of marketing to the mature market.
"creating transformation"
steps to socio-cultural transformation
1) identify socio-cultural challenges
2) select target constituents
3) offer transformational solution

hear -> create -> deliver
______________ is arguably humankind's biggest challenge.
"eradicating poverty"
why a pyramid to a diamond
people from the bottom should move up to have more purchasing power. That way the majority of people are at the middle level

corporations are key to generate economic development and make this happen - expand the market
(but need to work with nonprofits and gov't also)
3 enabling forces
(chpt 8 - creating emerging market entrepreneurs)
- increased access among the poor to information and communication technology infrastructure
- blend of excess supply, under consumption in mature markets, and hyper-competition at the top and middle of the pyramid
- gov't policy to discourage people from migrating to overcrowded urban areas
Social business enterprise (SBE)
- company that is making money while impacting the society in which it operates
- helps people improve their lives by providing affordable products and income-generating opportunities
What SBE must do to be successful
1) stretch disposable income - provide goods at a lower cost
2) expand disposable income - provide goods previously unavailable
3) increase disposable income - provide new jobs and markets
Hsieh attributes Zappos success to what three things
invested all their time, money, and resources in customer service, company culture, and employee training and development
Millennium development goals
(list on final)
1) eradicate extreme poverty and hunger
2) achieve universal primary education
3) promote gender equity and empower women
4) reduce child mortality
5) improve maternal health
6) combat HIV/AIDS, malaria, and other diseases
7) ensure environmental sustainability
8) develop global partnership for development
10 credos of marketing 3.0
(list some for it)
- love your customer - respect your competitor
- be sensitive to change...be ready to transform
- guard your name...be clear about who you are
- customers are diverse...go first to those who can benefit most from you
- always offer a good package at a fair price
- always make yourself available, spread good news
- get your customers...keep and grow them
- whatever your business...it is a services business
- always refine your business process in terms of quality, cost, and delivery
- gather relevant information, but use wisdom in making final decisions
One to One marketing means being _______ and ______ to ______ your behavior toward an individual customer based on what the consumer tells you and what else you know about that consumer.
"willing and able to change..."
key steps to one to one marketing
(increase in complexity and benefit for the company)
1) identify your customers - internal
2) differentiating among them - internal
3) interacting with them - external/action
4) customize your product or service - external/action
variance in customer base - steep vs. shallow
CRM works better with steep skew
Harrah's increased customer loyalty by:
1) using database marketing
2) delivering great service
customer service
(diamonds in the data mine)
- absolute focus on customer satisfaction (top down)
- tie employee rewards to customer satisfaction - speed and friendliness
- reward based on everyone's performance - independent of financial performance
- never meet budget at the expense of service
- if you aren't making your numbers, you do not cut back on staff. do the reverse!
- 5 people in line, call him day or night
Harrahs maintains competitive advantage by...
using people and technology
channel partner as collaborator: select the fit - must mirror...
purpose - overall key objective of partner
identity - character of partner
values - shared beliefs within partner org
Good partnerships create ________ relationships, not a ________ one.
horizontal, not a vertical one
marketing to low income communities
-multiple partners
-trust
-credibility
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