Financed bySupported byImplemented in cooperation with Financed bySupported byImplemented in cooperation with Customer Development and Management

Financed bySupported byImplemented in cooperation with Well developed relationships give business marketers a significant competitive advantage. Topics include: 1. Patterns of buyer-seller relationships 2. Factors that influence customer profitability 3. Strategies for designing effective customer relationships 4. Critical determinants of relationship marketing effectiveness. Customer Development and Management Topics

Financed bySupported byImplemented in cooperation with Relationship Marketing Relationship Marketing centers on successful exchanges with customers.

Financed bySupported byImplemented in cooperation with New era of business marketing is dependent upon managing relationships. Collaborative advantage is: Demonstrating special skills with “key” customers or Developing innovative strategies with alliance partners Advantages of Collaboration with our Customer

Financed bySupported byImplemented in cooperation with Continuum of buyer-seller relationships Transactional, Value-added & Collaborative exchanges Types of Relationships The Relationship Spectrum

Financed bySupported byImplemented in cooperation with Centers on timely exchange of basic products at highly competitive market prices These types of transactions are autonomous, meaning that there is little or no concern as to the needs of buyer or seller Example: A person comes into a store and buys a hammer. The buyer wants a hammer and the seller sells him one. That’s all there is to it! Transactional Exchange

Financed bySupported byImplemented in cooperation with The business market includes items like: Examples Packaging, Cleaning products or Commodity-type products or service activity where bidding is employed. Transactional exchanges employ an Arms- Length relationship. Transactional Exchanges

Financed bySupported byImplemented in cooperation with  Occurs when alternatives are few, market is dynamic, the purchase is complex and the price is high  Features close information, social, and operational linkages, as well as mutual commitments  Switching costs are extremely important to collaborative customers  Trust is the key and it exists when one party has complete confidence in their partner’s ability and integrity Collaborative Exchange

Financed bySupported byImplemented in cooperation with Value-Added Exchanges fall between Transactional and Collaborative Exchanges Value-Added Exchanges are those where the selling firms shifts from just attracting customers to keeping them by: 1. Adding additional services 2. Developing services that are customized to meet the buyer’s needs 3. Providing continuing incentives that promote repeat business Value-Added Exchanges

Financed bySupported byImplemented in cooperation with Elements of market interaction

Financed bySupported byImplemented in cooperation with Competition forces a war-like environment whereby competitors are always trying to lure customers from competitors. Since customer situations (i.e., requirements, expectations, people, preferences) change, there is always opportunity for customers to change from relationship to transactional to relationship with new suppliers. The Element of Competition

Financed bySupported byImplemented in cooperation with Market conditions force different types of relationships. Effects of Market Conditions The marketer needs to understand this aspect of business to determine which strategy to employ with various markets. What is the best strategy: transactional or collaborative?

Financed bySupported byImplemented in cooperation with Buyers and sellers craft various relationships in response to: a) Market conditions b) Characteristics of the purchase situation Spectrum of Buyer-Seller Relationships

Financed bySupported byImplemented in cooperation with A major consideration before changing from one supplier to another is the switching costs. A major consideration before changing from one supplier to another is the switching costs. Organizational buyers invest heavily in their relationships with suppliers. Organizational buyers invest heavily in their relationships with suppliers. Investments include: Investments include: 1. Money 2. People 3. Training Costs 4. Equipment 5. Procedures and processes Switching Costs

Financed bySupported byImplemented in cooperation with Buyers hesitate to switch because it can cause costly disruptions. Risk of making a wrong choice of less-established suppliers can be costly. From a marketing perspective, the prospect’s PROBLEM must exceed the BENEFITS that they are presently experiencing with their current supplier before they will consider switching. Switching Costs

Financed bySupported byImplemented in cooperation with Suppliers of routinely purchased products offer three sources of value: 1. Value creation through core offerings 2. Value creation within the sourcing process 3. Value creation at the customers level of operations Value Drivers in Collaborative Relationships

Financed bySupported byImplemented in cooperation with To develop ‘key supplier’ status, sellers need to:  Target the right customer.  Match with their purchasing situation.  Develop strategies that are appropriate for each type of buyer. Collaborative buyers seek long, strong and lasting relationships.  Buyers perceive significant risks with suppliers, so competence and commitment are vital when starting the relationship. Furthering Collaborative Relationships

Financed bySupported byImplemented in cooperation with