marketing

1. What is customer relationship marketing?

Customer Relationship Marketing is a practice that encompasses all marketing activities directed toward establishing, developing, and maintaining successful customer relationships. The focus of relationship marketing is on developing long-term relationships and improving corporate performance through customer loyalty and customer retention

What is Relationship Marketing? Description

Relationship Marketing is an approach which emphasizes the continuing relationships that should exist between the organization and its customers. It emphasizes the importance of customer service and quality and of developing a series of transactions with consumers

2. Why this is important for an organization?

· Companies that want to realize a customer intimacy strategy.

· Companies that want to accomplish a customer friendly image.

The most important aspect of relationship marketing is the fact that people buy from people and companies they like and trust. As a result, building relationships with customers is extremely important in order to ensure continued sales, as well as attract new markets and customers.

3. Advantages of customer relationship?

CRM is an enterprise-wide strategy for presenting a single face, sometimes called a unified marketing message, to the customer. It responds to issues relating to sharing customer data and providing a seamless contact and fulfillment experience for the customer.

CRM front-end applications usually integrate with back end systems such as accounting and manufacturing for a true enterprise-wide cost reduction solution.

• Ensure top of mind positioning to bolster your corporate image
• Maintain identity and differentiation with key customers
• Promote new product and service offerings
• Sustain contacts with slow-adopting customers and prospects
• Boost referrals and leads
• Improve client relationships and retain existing customers for long-term profitable success

· Strong relations with clients offer a degree of protection against actions of competitors.

· Loyal customers can be more profitable. Winning new customers is expensive, satisfied customers may buy more, happy customers can bring additional customers, etc.

· Focus on providing value to customers.

· Emphasis on customer retention.

· The method is an integrated approach to marketing, service and quality. Therefore it provides a better basis for achieving Competitive Advantage.

· Studies in several industries show that the costs to keep an existing customer are just a fraction of the costs to acquire a new customer. So often it makes economic sense to pay more attention to existing customers.

· Long-term customers may initiate free word of mouth promotions and referrals.

· Long-term customers are less likely to switch to competitors. This makes it more difficult for competitors to enter the market.

· Happier customers may lead to happier employees.

Advantages of relation ship marketing

• The cost of acquisition occur only at the beginning of a relationship, so the longer the relationship, the lower the amortized cost.
• Account maintenance costs decline as a percentage of total costs (or as a percentage of revenue).
• Long-term customers tend to be less inclined to switch, and also tend to be less price sensitive. This can result in stable unit sales volume and increases in dollar-sales volume.
• Long-term customers may initiate free word of mouth promotions and referrals.
• Long-term customers are more likely to purchase ancillary products and high margin supplemental products.
• Customers that stay with you tend to be satisfied with the relationship and are less likely to switch to competitors, making it difficult for competitors to enter the market or gain market share.
• Regular customers tend to be less expensive to service because they are familiar with the process, require less "education", and are consistent in their order placement.

Increased customer retention and loyalty makes the employees' jobs easier and more satisfying. In turn, happy employees feed back into better customer satisfaction in a virtuous circle

Limitations of the Relationship Marketing model. Disadvantages

Relationship Marketing is less appropriate in the following circumstances:

· Relatively low value products or services.

· Consumer products.

· Generic commodities.

· Switching costs are low.

· Clients prefer a single transaction to relationships.

· No / low customer involvement in production.

4. Strategies of relationship marketing..how ur going 2 maintain a loyal customers?

Defining Customer Loyalty

Customer loyalty is the practice of finding, attracting, and retaining your customers who regularly purchase from you. Customer loyalty is not customer satisfaction. Customer satisfaction is the basic entry point of good business practices. Your small business should provide satisfaction to all your customers.

Loyalty cards and programs have their rewards and pitfalls. Rewarding customers for spending more dollars can create a vicious cycle of creating customers who want rewards and will look anywhere to obtain them. With loyalty cards and programs reaching a saturation point, how can a small business stand out?

Software, card programs, and loyalty schemes are the tools of customer loyalty programs but they aren't the essence of loyalty. To build loyalty, you must earn it. Look at these 8 ways to earn more customer loyalty for your small business:

Step-1

You will first need to identify the diverse audience with whom you wish to build a relationship. Then you will need to find out the answers to key questions:

• What does this audience know about Extension and/or your program?
• How does this audience feel about Extension and/or your program (positive or negative)?
• What needs does this audience have that your program can meet?

Step-2

If they know about Extension and your program, and have favorable feelings towards it, then you will have to keep maintaining a good relationship with your audience by keeping in touch with them through impersonal marketing techniques like mailings, flyers, etc.

If they know about Extension and/or your program, but have negative or indifferent feelings towards it, then you will need to change this negative image before you can build trust. This can begin to happen when you apply The six Ps technique of personal marketing, with special emphasis on promotion and price. (The six P's are covered in EDIS fact sheet FY757, "Personal Marketing: A Strategy for Marketing Programs to Diverse Audience").

If the audience does not know much about Extension and/or your program, then you must inform them. You can do this by applying The six P's technique of personal marketing

Step-3

Identify the assets that individuals or institutions in the diverse audience possess. Use the assets of these individuals and institutions to carry out your programs. Volunteers can have short or long-term assignments. These experiences help build program ownership and foster even more participation. (EDIS fact sheet FY760, "Maximizing the Assets of A Diverse Community" will deal specifically with how to identify the individual and/or institutional assets of diverse audiences.)

Step-4

Actively solicit the increased participation and involvement of community members, which will foster greater loyalty to the program

Step-5

Encourage greater support from community members. Loyal individuals are more likely to advocate for the program and/or donate resources to the program.

Each of these steps takes time and attention. Relationship marketing must be nurtured.

Conclusion

Relationship marketing is one of the most time-consuming, but most effective strategies for marketing Extension programs. Relationship marketing is a process, not a one-time event; clientele must understand that you are committed long-term and that they can depend on you to provide education.

To be effective, you must establish a relationship with the audience you are targeting by making a connection with them over time. In order to build a relationship, as with any other relationship in life, Extension needs to be constantly in touch with its audiences. By making a connection with diverse audiences, Extension can build strong community networks that promote the programs we market beyond the limited scope of small workshops and community meetings

Company Loyalty First: Customer loyalty is a 2-way street. How can you expect customer loyalty if you don't practice company loyalty? Are you loyal to your best customers or are you giving discounts and extra attention to new customers? Loyalty is about being fanatical with devotion to your best customers.

Employee Loyalty Second: Any customer loyalty program must factor in the front line of the business. It's the point of contact between customer and employee that sets the foundation of repeat business. "Hire for attitude, train for skill. Hire nice people. As a customer, I'm always amazed when small businesses put unfriendly, surly people in front of their customers. Loyalty is often the direct result of the relationships your employees build and maintain," says Ben McConnell of marketing consulting firm Wabash & Lake and co-author of "Creating Customer Evangelists."

Quench the Thirst: Consumers are thirsty for trust following corporate scandals and the general distrust of corporations. If your small business is not trustworthy, your odds of establishing customer loyalty are diminished

Establish good business ethics and practices.

Finding Loyalty: Any small business wishing to start a customer loyalty initiative needs first to identify important customers and understand their customer's behaviors. Use whatever tools, software, and data-mining techniques to locate your repeat, regular customers. Equally vital is to know your profit margins. Don't offer discounts until you know the impact on your bottom line.

Reward Customer Retention: The key metric to track in your customer loyalty program is customer retention. How many customers are defecting? How many clients are retained? Measuring customer retention is half the battle. Your staff must be rewarded for retention. Your small business doesn't have to be

like big corporations who talk retention but reward sales people for bringing in new customers only.

Use Customer-centric Language: It's easy to think you put the customer first. However, take a closer look at your marketing communications. How many times does your literature refer to "we" the company versus "you" the customer? Go back and speak from the customer's perspective.

Bolster Customer Communications: Part of customer loyalty and retention are maintaining regular contact with your most profitable customers. Communication to your best customers should take the form of showing your appreciation and providing new learning experiences to add value to your customer's life. Send special thank-you notes, surprise gifts, and regular communications such as newsletters to connect with them.

Use the Small Business Advantage: Small business will always have the advantage in connecting with customers and building a solid relationship. Your passion for helping customers with your products and services is difficult for large companies to replicate. As customer evangelist guru Ben McConnell states, "Small businesses thrive on outstanding customer loyalty. It's their currency of growth and their best differentiator. Without loyalty, small businesses are destined to compete on a playing field with larger competitors where they are outnumbered and outwitted."

Win the customer service game by putting customer loyalty to work in your small business. Just remember, it's more than cards and software. It's more about earning trust and relationship building.

What is marketing orientation?

The marketing concept entails discovering and identifying the customers' unmet needs, and then satisfying them. The market orientation is based on this concept and is characterized by customer focus, a coordinated marketing effort, and long-term success. A customer focus involves a consistent and continuous effort to find out what customers need or want. A coordinated marketing effort means that information about the customer or marketplace is shared throughout the organization. Firms whose actions are customer-driven are better able to adapt to a dynamic marketplace, and they perform better in the long run.

Prior to the selling process, information about the market is collected in order to determine what the customer needs and the best way to satisfy those needs. This is the most prevalent philosophy found in the business world today.

the market orientation requires that information about the market (e.g., potential customers, trends, competitors) is collected prior to making decisions that involve the selling process (e.g., what to sell, where to sell, how much to charge, how to promote the product). The market orientation depends on a two-way relationship with customers where firms actively seek to discover unmet customer needs and then to satisfy them. This is the essence of the marketing concept: "making what is desired or wanted" rather than "selling what we make." The market orientation is characterized by the following:

1. customer focus
2. coordinated marketing effort
3. long-term success

A customer focus involves a consistent and continuous effort to find out what is needed or wanted by customers. To this end, a firm might collect information directly from individual customers, or it might track competitive, economic, social, political, or technological trends to anticipate future customer needs.

A coordinated marketing effort means that information about the customer or marketplace is shared throughout the organization. Other functional departments (e.g., research, finance, manufacturing) are partners in the effort to satisfy customer needs.

Finally, the marketing concept is associated with long-term success. Firms whose actions are customer-driven are better able to adapt to a dynamic marketplace, and they perform better in the long run. Perhaps the best way to understand why a customer orientation is associated with a longer time frame is to look at the opposite extreme. Consider the "shyster" snake oil salesman who tries to sell bottled water as a youth elixir in a traveling carnival. The salesman may be successful the first time he comes to town, but he won't be the next time. In other words, the marketing concept helps to maintain customer satisfaction, which leads to long-term success.

While the market orientation seems like an obvious, common-sense philosophy, it did not become dominant until relatively recently (late 1950s). Today it is practiced by virtually every large and medium-size company. In fact, there isn't a consumer good company I can think of that would introduce a new product nationally without first finding out whether there was a significant consumer need for it.

Now imagine a boy, Joel, age ten, who wants to sell lemonade. Before he starts, Joel goes to the adults in the neighborhood and asks them what type of lemonade they would like. He finds out that most of them do not like lemonade—they prefer iced tea, and only in the heat of the summer. He tells his parents about his discovery and enlists their support in helping him set up his iced tea stand in July and August. Joel's parents also help him get the taste of his iced tea just right, and his iced tea stand is a success. In the coming years, the neighbors remember Joel's good iced tea and reward him with lawn-mowing and baby-sitting jobs. Inspired by his early success, Joel becomes a millionaire, dates supermodels, self-actualizes, and now helps make the world a better place by teaching marketing.

Product Orientation

The original philosophy of exchange for businesses revolved around the product itself. Firms that adopt the product orientation focus upon the efficient production of their products with no input from customers. This is kind of a "if we build it, they will come" philosophy. An example of this would be the type of attitude exhibited by the owner of the general store in a small western U.S. town back in the early 1800s (e.g., Deadwood). Essentially, anything the Wells Fargo wagon could deliver was stocked and bought by the local citizenry eager for rare goods. Today, a similar product-oriented philosophy might be found at a high-technology firm that depends on engineering expertise to be innovative. For example, in the early 1990s, the personal computer industry basically followed a production orientation. Product improvements were based on manufacturing and engineering innovation and not on customer input, resulting in a philosophy of "if we build it faster with more storage, they will come."

The product-orientation philosophy was the norm up until the early 1900s and is best suited for situations in which demand exceeds supply. It is based on the idea that the product will sell itself. However, today, product advantages are fleeting and somewhat arbitrary. For example, competitors in the personal computer industry quickly match each other on processor speed and hard disk storage, and not everyone thinks a razor with the most blades is necessarily the best. Product orientation can be an extremely risky philosophy when there is no excess demand for the product .

Consider a child, Lisa, age eight, who wants to sell lemonade. Since she is meticulous in her schoolwork and is rewarded with straight A's, she knows making "the best lemonade" will be her ticket to success. To this end, Lisa steals her father's credit card and makes purchases on the Internet for the best lemons from Valencia, Spain, pure cane sugar from Hawaii, and a fifty-gallon lemonade cooler on eBay. She spends all night preparing her super lemonade and then sets it up on a table in her front yard on Saturday. No one stops to buy her lemonade even though she has made "the best lemonade in the world." Why? Because no one knows what is sitting on her table or what she is doing there. Totally demoralized, Lisa is doomed to live a life of drug addiction—or worse yet, pursue to a career in accounting.

Sales Orientation

As business environments became more competitive and production technologies more advanced, making enough became less of a problem and selling what was on hand took on more importance. The sales orientation philosophy is to sell (i.e., persuade people to buy) what is made. This became the dominant orientation with the advent of the Great Depression in the late 1920s and 1930s. This orientation gave birth to advertising and the traveling salesman as means of informing or persuading potential customers. Like the production orientation, the sales orientation is internally driven. However, sales orientation introduced the concept of communication—albeit one-way, to the customer. "Just sell the damn product" is a useful exaggeration of the sales orientation.

Today, the sales orientation exists in a variety of contexts. With rare exception, the lettuce grower in California's Salinas Valley simply grows the iceberg lettuce and then tries to sell it (and quickly because of its perishability). Or, consider the many small businesses that reflect an entrepreneurial interest. In both cases, business activity is the result of internal, personal impetus: "I am a lettuce farmer. Once I grow the lettuce, I need to sell it." "I need to make money and I make good sushi, so I'll open a restaurant and sell sushi."

Consider a child, Melvin, age nine, who wants to sell lemonade. He is outspoken about his excellent schoolwork, is rewarded with straight A's, and knows that making "the best case for your lemonade" is the ticket to success. Not only does he make lemonade using real lemons, Melvin advertises in the local paper and puts signs up at his stand that read "Real Lemonade 25 cents." But once again, no one buys the lemonade. Why?

Because it turns out that Melvin lives in Buffalo, New York, and is trying to sell his lemonade in February. Thwarted from his ambition, Melvin decides a meaningful life isn't possible and moves to Kansas.

2.why marketing orientation is important?

Extending the Marketing Orientation: Relationship Marketing

The relationship marketing concept emphasizes the creation and maintenance of long-term relationships with all participants (i.e., customers, suppliers, retailers) in the exchange process. This helps us apply marketing orientation's long-term and coordination characteristics to an alliance of participants who share decision-making responsibility. For example, a firm such as Dell Computer practices relationship marketing by soliciting new-product design opinions not only from customers, but also from suppliers.

Implicit in maintaining long-term relationships, especially with customers, is the need to surpass expectations through superior product or service performance. Therefore, relationship marketing values repeat purchases above one-time transactions. For example, a friend of mine once found herself at Harrods department store in London, facing the prospect of buying a memory card for her digital camera that was about twice as expensive as it would be in the United States. The salesperson suggested she buy a CD instead, at a minimal cost, and then used his computer to offload the pictures on her camera card to the CD, freeing up the desired space for more pictures. In essence, the salesperson sacrificed a one-time sale equivalent of about $50 and probably gained a lifelong fan and shopper of Harrods. In addition, Harrods gains invaluable word-of-mouth advertising when the story is related to friends and then on to others (like you, in this instance). This story illustrates a common-sense, yet powerful fact of consumer behavior that underlies relationship marketing—people like to buy from people/companies they like and trust!

This is especially true for expensive items (e.g., automobiles, jewelry) when service after the sale may be a consideration. That is why relationship marketing grew out of business-to-business (B2B) contexts, where service is often part of the purchase (e.g., United Airlines purchase of Boeing jets would require Boeing to agree to maintenance and perhaps customization services as part of the contract). However, even in routine consumer activities, we often choose an alternative based on who we like. In Paris, shoppers for daily groceries on Rue Cler patronize shops of those who have become friends of theirs. Or perhaps you might frequent the restaurant of an owner who has treated you warmly on previous occasions. As for myself, I don't know if my barber, Don, is the best or cheapest at cutting hair. All I know is that I like talking to him about the Tigers and Rams football teams, for which we share a passion. Relationship marketing at this level makes particular sense when there is not a large price difference among alternatives.

The Internet has been used as an efficient relationship marketing tool. Its interactive nature has allowed firms to build and maintain customers at a low cost. Companies use e-mail to provide fast customer service as well as discussion boards to build a sense of community.