1. Block 2 Section 5 Relationships with Customers Prepared By Hanady Ali Osman

2. Hanady A. Osman 2 Agenda Discussion of 4P’s, 4C’s as insufficient. Six markets model. Loyalty Ladder Internal customers Transaction vs. relationship marketing Benefits to companies of relationship marketing.

3. Hanady A. Osman 3 Transactional Marketing (Pg. 58 Binder) The concept of transactional marketing, views marketing as a series of one-off transactions. Models to adopt this approach: 1. Marketing Mix (4Ps) 2. Cs Model (4Cs) - Product - Customer needs and wants - Price - Cost - Promotion- Convenience - Place - Communication

4. Hanady A. Osman 4 Activity 5.1 Why may the transaction approach to marketing as presented by the 4Ps may not be adequate;

5. Hanady A. Osman 5 Activity 5.1 Some reasons why transaction approach to marketing as presented by the 4Ps may not be adequate; It is driven by the interests of the producer or supplier. It assumes the customer is passive. It is not driven by customer interests. It does not allow for transactions between customer and supplier. It implies that the power is with the supplier-that it is a seller’s market.

6. Hanady A. Osman 6 The six market model The six market model (Pg. 59 Binder) This is a different approach to marketing. It suggests that organizations operate in six markets. They should be aware of-and-seek to meet- the needs of each of these markets.

7. Hanady A. Osman 7 The six market The six market (Pg. 60 Binder) Organization Customer markets Supplier markets Internal markets Referral markets Influencer markets Recruitment markets

8. Hanady A. Osman 8 Increased emphasis on relationships within these markets Increased emphasis on relationships within these markets (p.61 & 62 Binder) Some changes in the external environments have placed greater emphasis on relationships within these markets since the 1980s: Surplus of goods and services. Dominance of services over goods Internationalization of trade Importance of Quality Expansion of information systems Consumer protection legislation Success of Japanese companies has “raised the bar” in terms of quality and customer focus

9. Hanady A. Osman 9 Increased emphasis on relationships within these markets Increased emphasis on relationships within these markets (Pg.63 Binder) Relationship marketing, therefore has emerges as a response to market and environmental pressures, but is not equally relevant to all organizations. Although relationships are important in all six markets, most discussion has focused on the relationship between; “organization and its customers.”

10. Hanady A. Osman 10 Supplier-customer relationship Supplier-customer relationship (Pg. 63 Binder) Relationship marketing is where suppliers view their relationships with Customers/users as long-term i.e. multiple interaction the objective is to establish, maintain and enhance the relationship so that the objectives of both parties are met. its objective is to move customers up the loyalty ladder from prospect to customer, and to advocate and partner.

11. Hanady A. Osman 11 The Loyalty Ladder The Loyalty Ladder (Pg. 63 Binder) Advocate Supporter Client Customer Prospect Customer Catching Emphasis on new customers Customer Keeping Emphasis on developing & enhancing relationships

12. Hanady A. Osman 12 Internal markets vs. Loyalty ladder Internal markets vs. Loyalty ladder (Pg. 64 Binder) To achieve progression in the loyalty ladder need to focus on their internal market activities as: All employees within an organization are both providers and users of internal services. Organizations that are successful in providing high levels of customer services achieve a common goal.

13. Hanady A. Osman 13 Customer Service in action (Pg. 65 Binder) How company’s lost contracts due to ill services

14. Hanady A. Osman 14 Customer Service in action (Pg. 66 Binder) Activity 5.2 Consider an organization with which you are familiar: Would you describe its relationship with customers or service users as characterized by transaction or a relationship approach? Who is responsible for developing and maintaining relationships with customers/users?

15. Hanady A. Osman 15 Benefits of relationship marketing Benefits of relationship marketing (Pg. 68-69 Binder) Benefits Customer’s Perspectives Supplier’s Perspectives

16. Hanady A. Osman 16 Consumer Benefits of relationship marketing Consumer Benefits of relationship marketing (Pg. 68 Binder) Consumers LIKE to reduce the choices available to them by engaging in a continuing loyalty relationship with suppliers. They do this in order to achieve greater efficiency in their purchasing decision making.

17. Hanady A. Osman 17 Suppliers Benefits of relationship marketing Suppliers Benefits of relationship marketing (Pg. 69 Binder) Marketing productivity is improved by reducing expenditure on advertising and promotion and by reducing the risk of price competition. The focus on customer service and satisfaction over time means that customers’ needs are better addressed, and marketing practices are therefore likely to become more effective. Customer focus helps treat customers as individuals which encounters proper data processing. Improving the company’s image my moving away from attracting new customers to nurturing existing ones

18. Hanady A. Osman 18 Relations for all? Relations for all? (Pg. 71 Binder) Transactional marketingRelationship marketing Focus on single featuresFocus on customer retention Orientation on product featuresOrientation on product benefits Short time-scaleLong-time scale Little emphasis on customer service High emphasis on customer service Limited customer commitmentHigh customer commitment Moderate customer contactHigh customer contact Quality is the concern of the production department Quality is the concern of all

19. Hanady A. Osman 19 Marketing strategy continuum (Pg 70/71 Binder) Relationship marketing may not be suitable for all organizations. The more the customer contact the more suitable relationship marketing can stand. Transactional Relationship Marketing Marketing Consumer packaged goods ConsumerdurablesIndustrialgoods Service