BERMAN05.PPT 43KB Jun 05 2011 09:30:17 PM

MARKETING CHANNELS
Relationship Marketing
and
Customer Service
Berman Chapter 5
Version 3.0
1

Relationship Marketing
• 1. Introduction - a,b,c,d
• 2. Evaluating the Use of Relationship
Marketing
• 3. Developing a Customer Service Strategy
• 4. Implementing a Customer Service
Strategy
• 5. Customer Service Standards in Physical
Distribution
• 6. Evaluating Customers on the basis of
Multiple Customer Service Standards
2


1 a. Transactional Marketing
• transactional marketing
– multiple sources of supply
– switches frequently among suppliers
– buys largely on price basis

• focuses on exchanges in single transactions
– adversarial in nature
– maximize short term profitability
– little trust or commitment
3

1. a Transactional Marketing
• Three fundamental assumptions
– buyer plays off suppliers to gain price
concessions and ensure continuity of supply
– buyer allocates an amount to suppliers to keep
them in line
– buyer assumes arms-length posture
– buyer uses only short term contracts


• criticisms - too little attention to holding
existing customer through superior customer
service and loyalty
4

1. b Relationship Marketing
• basis – building and maintaining long term relationship
between buyers and sellers
– based on trust and commitment

• elements - similar to personal relationships
– shared values, trust, mutual respect, mutual
benefit, frequent communications, honest
feedback, cooperation, flexibility,
understanding, relationship commitment
5

1. b Relationship Marketing
• emphasis

– keeping existing customers
– forming and maintaining strong long-term ties
• social (friendship)
• economic ( joint investment)
• technical ( joint product development)

• basis
– communications, consultancy, conflict
resolution, value added services, coordinated
responsibilities, long term relationships
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1. c Levels of Relationship
Marketing
• One






financial bond,
customer marketing orientation,
low degree of service customization,
low potential for sustained competitive
differentiation

7

1. c Levels of Relationship
Marketing
• Two





social bond
client marketing orientation
medium degree of service customization
medium potential for sustained competitive

differentiation

8

1. c Levels of Relationship
Marketing
• Three
– structural bond
– client marketing orientation
– medium to high degree of service
customization, high potential for sustained
competitive differentiation

9

1. d Implications of
Relationship Marketing
– opportunity costs







Distributor Decision Making
Product Decision Making
Pricing Decision Making
Promotion Decision Making

10

2. Evaluating the use of
Relationship Marketing Strategy
• Advantages and Disadvantages
• When transactional and relationship
marketing are best used
• lost-for-good customers
• always-a-share customers

11


3. Customer Service Strategy
• A. Definition of Customer Service
– a customer-oriented corporate philosophy
– integrated and managing all elements of the
customer interface
– to meet or exceed expectations of customer
service quality

12

3. Customer Service Strategy
a. development
• Components by stage
– pretransaction - internal operations
– transaction - physical appearance,order status,
order accuracy
– posttransaction - startup, problem handling







service gap
process related activities
outcome related activities
zone of tolerance

13

3. Customer Service Strategy
b. Economics
• Three approaches
– loss in profits due to defecting customers
– impact of small changes in customer retention
on sales and profits
– impact of changes in customer service is
determined on sales
14


3. Customer Service Strategy
c. Models
• Porter’s Value Chain
– high reliability, ease of use, ease of repair
– product adequacy determination

• SERVQUAL dimensions (Zeithaml)
– reliability, responsiveness, assurance
– empathy, tangibles

15

4. Customer Service Strategy
a. Implementation
• A. Total quality management and Customer
Service






constant feedback
benchmarking
use of multifunctional task forces
total employee involvement

16

4. Customer Service Strategy
b. Common principles





have a written customer service policy
monitor customer service levels
get employees close to the customer
study customer service as defined by the

customer
– empower the employee
– facilitate customer access to the company
– resolve complaints favorably for customers
17

b. Common principles






think in terms of lifetime income
think in terms of profit stream
utilize technology
make customer service part of the career path
be concerned with
• customer retention
• obtaining new customers

18

5. Customer Service Standards
in Physical Distribution
• Characteristics
– ease of inquiry, order placement,order retention
– timely, reliable order delivery and
communications
– accurate, complete, undamaged orders and error
free paperwork
– accurate, timely generation and transmission of
information to support planning, management
and execution of the above activities
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• Characteristics (cont)
– availability
– timeliness
– quality
• reliability measure
• service failures
• fraction of demand billed from stock

• minimum sum of the cost of inventory and
backorders
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6. Evaluating Suppliers
Multiple Customer Service
Standards
A. the linkage between quality measures






product
sales
installation
repair
billing
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A. The Linkage Between Quality Measures
-reliability 40%
product - easy to use 20%
30% - features/functions40%
sales
30%
Overall
Quality

- knowledge 30%
- response 25%
- follow-up 10%

- delivery interval 30%
installation - doesn’t break 25%
10%
- installed when
promised 10%
repair
15%

- no repeat troubles 30%
- fixed fast 25%
- kept informed 10%

billing
15%

- accuracy,no surprises 45%
- first call resolution 35%
- easy to understand 10%

22

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