Relationship Marketing,Play the right game!,1997 BA 7 billion market value Ryanair .7 billion2002 BA 1.5 billion (increased profit- reduced turnover and major cost-cutting. No dividend) Ryanair 3.5 billion (announced a 71% increase in profit)BA is focusing on efficiency improvements; Ryanair on growing the low cost model into Europe,The Strategic Pathway1,Market Choices,Market Definition Market Segmentation Market Attractiveness Market Position,MarketMission Competitive Diffrentiation,The Value Proposition,Marketing Assets and Brands,The Key Relationships,4Cs Customers Competitors Collaborators Co-Workers,1Piercy, N, (1997), Market-Led Strategic Change,Butterworth Heinemann, pp 146-147,Marketing Mix v Relationship Paradigms,Focus Individual sale v total sales over long term Marketing is about Doings things to Customers v Relationship Building Getting what you measure sales/market share/overall customer satisfaction v retention/ share of customer/individual customer satisfaction Internal Marketing and Matrix Working Limited v strategic importance,The Brand Loyalty Bucket,BRAND LOYALTY - RELATIONSHIP MARKETING,MARKETING MIX ACTIVITY,Relationship Marketing Defined,Marketing is to establish, maintain, and enhance relationships with customers, and other partners, at a profit, so that the objectives of the parties involved are met. This is achieved by a mutual exchange and the fulfilment of promises.Gronroos, C. (1990), Journal of Business Research,Mini Exercise,Choose a strong personal relationship (family, team, group, boyfriend or girlfriend) that you have and describe its features Do any brands come close? What does this tell you?,The 3 Core Components of Relationship Marketing,Customer Service,Customer Service level for segments based on market research into customers and competitors,Total Quality in:- Process (designing out failure points) People (manging gaps in service quality),Quality detrmined from customer perspective & based on market research,Marketing,Quality,Christopher, Payne & Ballantyne (1991), Relationship Marketing, Bringing Quality, Customer Service and Marketing Together.,The 3 Core Components of Relationship Marketing,Marketing,Quality,Relationship Marketing,Christopher, Payne & Ballantyne (1991), Relationship Marketing, Bringing Quality, Customer Service and Marketing Together.,Customer Service,Relationship Groups,Influencer Markets,Recruitment Markets,Supplier and Alliance Markets,Referal Markets,Internal Markets,Customer Markets,Christopher, Payne & Ballantyne (1991), Relationship Marketing, Bringing Quality, Customer Service and Marketing Together.,Business School new staff?,Opinion Leaders Fashion Magazines Technical Experts/Specifiers,Estate Agents-Banks Insurers - Builders/Repairers,Interim Management,Computer Games Cos.,Equity Managers,Network v Real Alliances,Note how this differs from Piercys model. Do you have a relationship with the competition?,Abbey National in the 90s.,Customers :- Do they Want a Relationship with you? If Yes, What sort?,Model of Relationship Marketing Variables,+,+,+,+,+,_,+,_,+,+,+,_,Relationship Commitment,Trust,Relationship Benefits,Shared Values,Communication,Opportunistic Behaviour,Relationship Termination Costs,Acquiescence,Propensity to Leave,Cooperation,Functional Conflict,Uncertainty,+,R.Morgan & S.Hunt (1994), The Commitment-Trust Theory of Marketing, Journal of Marketing, July, pp. 20-38.,The Relationship Ladder,PROSPECT,CUSTOMER,CLIENT,SUPPORTER,ADVOCATE,Traditional Marketing ( 4/7 Ps),Relationship Marketing,Relationship Segments,Types of Relationships Customers Want With Suppliers,Long Term,Short Term/ Transactional,Intimacy Wanted by Customers in Relationship,Close Relationship,Distant Relationship,III Loyal Buyers,II Relationship exploiters,IV Arms length Transaction Customers,I Relationship Seekers,TEN Relationship Marketing Activities,1. Use Service Gap Analysis 2. Use Lifetime Value of the Customer analysis. 3. Use Moments of Truth analysis. 4. Manage relationship problems to delight and re-establish relationships. Zero Defects? 5. Use customer service to make the relationship closer/more intimate build commitment & trust.,6. Develop Customer Contact Points eg:i)IT/database management (AmEx), ii)Frequent Buyer Programmes (e.g. B.A.s Airmiles; GM Mastercard)iii. Customer Clubs (e.g.Buitonis Pasta Club)iv.Network Alliances. 7. Use Differing marketing mixes for different relationship types. 8. Develop a relationship life cycle strategy.- Re-launch relationships when necessary. 9. Make employees first customers of the business - internal marketing. 10. Reward based on customer satisfaction/loyalty,RM Network Diagram,=+=+=+=+=+,=+=+=+=+=+,=+=+=+=+=+2 4 6 8 10,=+=+=+=+=+,=+=+=+=+=+,=+=+=+=+=+,=+=+=+=+=,Supplier & Alliance Markets,Recruitment Markets,Internal Markets,