relationship marketing

2. Definition
Relationship Marketing can be defined as the ongoing
process of identifying, establishing, maintaining, and
enhancing successful relationships with customers
and other stakeholders. so that the objectives of all
parties involved are met, and this is done by a mutual
giving and fulfillment of promises.

3. Major differences between Relationship &
transactional Marketing
Comparison Transactional Marketing Relationship Marketing
Focus
on recruitment of customers
for single sale
on customer retention
Orientation
oriented on product features Oriented on product benefits
and system solutions
Time Horizon has short time horizon long term horizon
Customer Focus has little customer focus has high customer focus
Information
Transactional Marketing
information is the content of
communication
Relationship Marketing
information is the product of
communication
Contact with customers
low contact with customers high contact with customers

4. Relationship Marketing and the 4 Ps
Product
• More products are customized to the customers’ preferences.
• New products are developed and designed cooperatively with suppliers and
distributors.
Price
• The company will set a price based on the relationship with the customer and the
bundle of features and services ordered by the customer.
• In business-to-business marketing, there is more negotiation because products are
often designed for each customer.

5. Relationship Marketing and the 4 Ps (Cont.)
Place
• RM favors more direct marketing to the customer, thus reducing the role of retailers
(middlemen).
• RM favors offering alternatives to customers to choose the way they want to order, pay for,
receive, install, and even repair the product.
Promotion
• RM favors more individual communication and dialogue with customers.
• RM favors more integrated marketing communications to deliver the same promise and
image to the customer.
• RM sets up extranets with large customers to facilitate information exchange, joint planning,
ordering, and payments.

6. Importance Of Relationship Marketing
The importance of RM stems from the role it performs to enhance organization-customer
relations. This role can be detailed as follows:
1- it helps in keeping a high level of customer retention through continuous, appropriate, and
timely communication by using specific tools such as the internet, phone calls, or sales
persons.
2- it focuses on improving the quality of the products/services provided to customers through
continuous creativity and innovation.
3- it acknowledges that keeping current customers satisfied is as much important as recruiting
new ones.
4- the activities of RM are more suitable to the highly competitive, dynamic and volatile
atmosphere of today`s business environment.
5- RM enhances communication with customers and leads to a better knowledge of their
needs and wants and consequently the achievement of a competitive advantage.

7. Purpose of Relationship Marketing
The overall purpose of relationship marketing is to enhance the
mutual value for the parties involved in the relationship. In order
to do that, organizations need to focus on:
1- attracting potential customers
2- Keeping Current Customers
3- Creating Customer Loyalty

8. Benefits of Relationship Marketing
We can find that both parties involved in the relationship (organization- customer) can
gain several benefits through the RM, an illustration of these benefits is following:
- RM Helps the organization Retain Long-Term Customers.
When you work on building relationships with your customers, and not just selling to
them, you begin to develop loyalty, which means they’re more likely to stick with your
brand for the long time.
- RM Increases the Likelihood of Referrals.
The more satisfied and loyal your customers are, the more likely they will be to refer
your brand to others. The best way to achieve this is through relationship marketing.

9. Benefits of Relationship Marketing (Cont.)
- RM Makes Price Changes Easier
A solid relationship can help make a price increase much smoother. That’s because when you’ve
worked hard to develop relationships with your customers, the resulting loyalty will make them
less likely to leave over a price change.
- RM Creates an Excellent Opportunity for Feedback
When you’ve got loyal customers in your corner, you’ve got an instant test market at the ready.
Whenever you need to try out a new product or propose a new service, your loyal customers will
be there to offer feedback. Want to know how you’re doing? Ask your long-term customers. Their
feedback can help you determine what your business’ greatest strengths are as well as identify
areas that need improvement.
-RM Will Give You a Competitive Advantage