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Sustaining Relationships
Building & Sustaining Relationships in Retailing Chapter 2
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Objectives Explain “Value” in Retailing
Describe Relationship Nurturing Examine Relationship Building Goods Retailers Services Retailers Discuss Impact of Technology on Retailing Consider Interplay Between Ethical Performance and Relationships
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Value Goals Customers Believe Good Value for Money
Customer Like Doing Business with Retailer Channel Members Like Doing Business with Retailer
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Value Chain Involves: Series of Activities and Processes
Manufacturer Wholesaler Retailer Series of Activities and Processes Provides a Given Level of Value for Consumers Closely Related to: Desire to Make Profit Type of Strategy Pursued
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Consumer Perception of Value
Benefits from Purchase Cost VS Benefit Varies by Shopper Type Concerned with Outcome NOT Process
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Value-Oriented Strategies
Expected Retail Strategy Augmented Retail Strategy Potential Retail Strategy
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Value-Oriented Strategy Pitfalls
Planning Value with Only A Price Perspective Providing Value-Enhancing Services Customers Don’t Want or Now Willing to Pay Competing in the Wrong Value/Price Segment Believing Augmented Elements Alone Create Value Paying Lip Service to Customer Service
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Customer Relationships
Customer Base Core Customers
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Customer Service Expected Augmented Improvement Employee Empowerment
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Customer Service Strategy
Range Level Choice Price Measurement Retention
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Customer Service Classification
Cost of Offering Service High Low Patronage Builders -- High-cost activities that are the primary factors behind customer loyalties Patronage Solidifiers -- The “low-cost little things” that increase loyalty. High Value of Service to Customer Disappointers -- Expensive activities that do no real good. Basics -- Low-cost activities that are “naturally expected.” They don’t build patronage, but their absence could reduce patronage. Low
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In House Credit Advantages Disadvantages Retailer Saves Fee
Customer Loyalty Encouraged Disadvantages Startup Costs Slow Cash Flow Administrative Costs Customers without Card May Be Discouraged
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Types of Credit Accounts
Revolving Option Open
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Customer Satisfaction
Meet or Exceed Expectations Dissatisfied Customers Don’t Complain Produces Little or No Results Not Easy
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Loyalty Program Commonalities
Useful Rewards Appealing to Customers Attainable Honor Shopping Behavior Unique to Participating Retailers Personalized Communication Consistent
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Better Loyalty Programs
Rewards Value-Added Benefits Customer Recognition
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Value Delivery System Each Channel Member Dependent
Every Value Delivery System Activity Must Be Enumerated Customer Recognition Small Retailers May Use Outside Suppliers Good as its Weakest Link Nature Related to Target Market Expectations Costs & Functions Influenced by Each Party’s Role Increasing Complexity Nonstore Requires Different Delivery System Channel Members are Adversarial
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Effective Relationships
Consistency Final Consumer Orientation Common Positioning Goals Activities Performed Input Into Channel Decisions Effective Relationships Proper Lead Time Trust Equitable Profit Distribution Fairness Marketing Support Reliability Coordination Inventory Planning Communications Timeliness of Payments
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Types of Services Retailing
Rented-Goods Services Owned-Goods Services Nongoods Services
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Characteristics of Service Retailing
Intangibility Perishability Services Retailing Inseparability Variability
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Understanding the Customer
Service Quality Determinants Tangibles Credibility Competence Access Reliability Responsiveness Courtesy Communication Understanding the Customer Security
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Technology and Realationships in Retailing
Roles Must Be Clear Technology VS Humans Consistent With Organization Objectives Customers Expect Certain Advances
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ATMs Instant Processing Smart Cards Electronic Banking
Retail Purchases Smart Cards
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The Evolving Bank Online Real-Time Banking Banking by Computer
Banking by Telephone Bank Cost Savings Customer Convenience Automated Teller Machines In-Store Banking Traditional Branches
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Technology & Interactions
P-O-S Scanning Equipment Self-Scanning Electronic Gift Card Interactive Electronic Kiosks Mass Customization
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Articulate Acceptable Behavior Written Code of Ethics
Punish Poor Behavior Top Managers Set Example
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Social Responsibility
Best Interest of Society Balance with Fair Level of Profitability
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Consumerism Right to be Informed Right to Safety Right to be Heard
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What You Should Know “Value” in Retailing
How Relationships are Nurtured How to Build Relationships Goods Retailers Services Retailers Impact of Technology on Retailing Understand the Interplay Between Ethical Performance and Relationships
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Questions? Questions? Questions? Questions?
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