CONTEMPORARY ISSUES OF MARKETING

(SEMINAR)

REPORT ON RELATIONSHIP
MARKETING

SUBMITTED BY –
Nitish Bhardwaj
RQ1809A33
10803225
BBA (HONS) 6th Semester

SUBMITTED TO –
Lr. Kuljit Minhas

1
 TABLE OF CONTENT

SR. Topic Content Pag

NO. e no.
1 Introduction Definition, need & facts 4
2 Objectives of Relationship Marketing Objectives,Procedure,Impact & 6
and Issues Applications,Approaches
3 Best practices of relationship Dell,Nescafe,Wal-Mart,Maruti 10
management Suzuki,Volkswagen,AIRTEL
4 CONCLUSION MERITS AND CONCLUSION 19
5 BIBILIOGRAPHY URL’s 20

RELATIONSHIP MARKETING

2
3
INTRODUCTION

What actually is the relationship marketing?

According to the greatest marketing guru of the modern times, Mr. Philip Kotler, “The aim of
Relationship Marketing is for building mutually satisfying long-term relations with key-parties
like the customers, suppliers, distributors in order to earn and retain their business.” Therefore
we can come to the notion that Relationship as well as mutual bonding for the benefit of both the
parties is known as the Relationship marketing which can be built between the Manufacturer
(Company) and Customers, between the Manufacturer (Company) and Suppliers & distributors
as well. As the marketing world has emerged over the years, every business now-a-days are
adopting new strategies to interact with its customers. But the way the companies interact with
their customers varies from company to company as per the situation.

In general definition we can define Relationship Marketing as a form of marketing which

moreover emphasizes on customer retention and satisfaction, rather than a dominant focus on
sales transactions.

Thus as a practice, Relationship Marketing differs from other forms of marketing in that it
recognizes the long term value of customer relationships and extends communication beyond
traditional advertising and sales promotional messages.

Need of Relationship Marketing

Today, it’s all about more. More consumer control, more channels, more media and more money
spent online.
• Businesses in many industries may lose up to 50% of their customers over a five year period.
• Studies have shown it’s 6 to 7 times more expensive to acquire a new customer than it is to
retain a current customer.
• As little as a 5% increase in customer retention can increase profits by 25 to 95%.

4
Some facts regarding Relationship Marketing

1 Now-a-days Customers are not loyal any more: Customers are getting a wide array of
choices to choose their options and make evaluative purchases. Direct purchases are in less
demand now-a-days and the internet marketing is taking their places. In the business
markets also, face-to-face transactions are getting replaced by emails and online ordering.

2. The Companies actually want to interact the customers doesn’t want: Consumers needs
to be turned into Customers. This reality needs to be understood by the companies as fast
as possible because the customers really don’t want the relationships; they will go to those
companies who will give them more value. In that case, it’s about the companies who need
to go near the customers and seek relationships with them in order to earn their interests
from heart and from their pockets.

3 Representing the brand in front of the customers: To control the information flow to and
from the company and to provide the name infront of the customers in such a way that, it always
will remain in their minds.

4 Customers are now-a-days expecting to be thanked after their sales: The modern
customers are becoming more and more demanding in nature and they don’t mind in spending
big amount while purchasing anything. But in return they also expect to be thanked by the
company after the first sale itself which is very critical in nature. Therefore the companies need
to thank their customers after the first sales and also after every sales to make them feel that they
are the “Special Ones”.

5 Companies don’t control the selling process, but the customer does: Now-a-days the
customers don’t bother about the price but they want the best benefit for their money, be it
functional or emotional.

6 Don’t make overcomplicated program, but try to build them innovatively: This means
“Don’t do different things but try to do things differently.” Simply don’t make complicated
promotional and other programs which will bounce over the heads of the customers, rather if
possible make them with innovativeness and advertise them on a regular basis so that the
customers will notice them and believe me, they might just go after it!

7 Experiment continuously: Don’t hesitate to experiment with new tricks of acquiring and
maintaining the customers in a profitable way. Because of the volatile nature of customers
in this fast changing world, there is need to develop and test new tricks and strategies on a
regular basis to earn more share of the profit pie.

5
OBJECTIVE & ISSUES OF THE STUDY : THE RELATIONSHIP
MARKETING

 With competitors just a mouse click away, marketers need to create strong relationships
with their customers in order to build loyalty and keep them coming back. With better
customer insight, both online and offline, marketers can develop relationship marketing
programs that are relevant to their visitors’ needs.
 The goal of relationship marketing is to increase customer loyalty. At the core of this
strategy is the concept of establishing a “learning” relationship with each customer.
Every interaction companies have with a customer is an opportunity to learn about their
individual motivations.

 Gaining deep insight into visitor behavior at every stage of the visitor lifecycle is
essential to successful relationship marketing.Customer behavior should be represented
by a comprehensive analysis of all customer data, allowing deep insights into customer
preferences and motivations.
 Moving beyond transactions lets you monitor individual behavior accurately across any
time period and learn about customer preferences and motivations. Instead of reacting to
transactional data (which is a mirror to the past) you can proactively meet the needs of
the customers through relevant online and offline marketing programs and a personalized
online experience.

PROCESS : RELATIONSHIP MARKETING

6
HOW TO DEVELOP STRONG RELATIONSHIP WITH CUSTOMERS?

1: Understanding the Visitors Behind the Visits

Every interaction is an opportunity to understand more about the customers. Because customer
data is captured through a variety of channels, marketers often have a fragmented view of their
visitors. It’s essential to develop a comprehensive cross-channel view of customer behavior to
have a complete understanding of their interests and preferences. It is must recognize individual
customers at every contact point to learn about individual customer needs and motivations.
2: Segmenting Customers by Behavior: Segmenting the customer behavior through various
channels and ways-
• Grouping the customers by their needs.
• Discover how visitor’s impact the sales cycle.
• Identify visitors that are most likely to purchase.
• Create and customize the segments by assigning levels of visitor interest, or visitor
attractiveness .
• Compare segments and look for ways to increase the value of underperforming segments or
look to expand the most valuable segments.
3 Creating Specific Content to meet the Customers Needs through sending personalized email
to customers who have opted into communications & using the data gathered to customize
marketing message to individual customers, and use insight gained to take action to improve the
effectiveness and cost-efficiency of marketing efforts.
4: Measuring the Success: To measure the results of relationship marketing campaigns and
continually optimize the results of the programs. By measuring and learning from the customers
at every interaction, companies can continually provide a better experience every time the
customer returns, which creates a lasting competitive advantage.

7
Approaches of Relationship Marketing

1 Satisfaction

Relationship marketing relies upon the communication and acquisition of consumer requirements
solely from existing customers in a mutually beneficial exchange.With particular relevance to
customer satisfaction the relative price and quality of goods and services produced or sold
through a company alongside customer service generally determine the amount of sales relative
to that of competing companies.

2 Retention

A key principle of relationship marketing is the retention of customers through varying means
and practices to ensure repeated trade from preexisting customers by satisfying requirements
above those of competing companies through a mutually beneficial relationship. This technique
is now used as a means of counterbalancing new customers and opportunities with current and
existing customers as a means of maximizing profit.

Relationship marketers speak of the "relationship ladder of customer loyalty". It groups types of
customers according to their level of loyalty. The ladder's first rung consists of "prospects", that
is, people that have not purchased yet but are likely to in the future. This is followed by the
successive rungs of "customer", "client", "supporter", "advocate", and "partner". The relationship
marketer's objective is to "help" customers get as high up the ladder as possible. This usually
involves providing more personalized service and providing service quality that exceeds
expectations at each step.

8
The Results of Relationship Marketing

Build Brand Engagement

By using every transaction with a customer as an opportunity to gain insight, can create customer
lock-in by delivering the right experience and modifying the experience based on your
customer’s needs and motivations.
• Rewarding loyal customers. Identifying high-value visitors that forwarded a new product offer
to a friend and send a special discount offer as a thank you.
• Reengage inactive customers. Identifying loyalty program members that have not been to the
site recently. Send them a text message with a bonus points offer.

Increase Customer Loyalty

Once companies establish a learning relationship with your customers, companies become their
partner. Thus able to meet and exceed customer expectations by anticipating their needs. The
more complex customers’ needs become, the more they will appreciate the relationship
companies could establish with them—and the less likely they will be to go elsewhere.
• Improve customer service. Identify high value customers who used online support system and
indicated their issue was unresolved. Launch proactive customer service calls to help resolve the
problem.
• Increase up-sell and cross-sell opportunities. Tie offline information such as purchase history
and demographic data to online behavior to tailor up-sell and cross-sell promotions to include
product or services a customer is most likely to buy.

APPLICATION OF RELATIONSHIP MARKETING

Relationship marketing may be more suitable in the following circumstances or situations
(Product):

1. High value products and services

2. Industrial products
3. For those products in which switching cost is high because of high competition
4. Customers preferring a continuous relationship
5. There is involvement of customers in the production stage.

9
BEST PRACTICES OF RELATIONSHIP MARKETING

CUSTOMER MARKET

Michael Dell emphasizes the significant status of customers to the company’s business by stating
‘Finding ways to get close to your customers is critical to your success.’ In an Interview he
called this strategy “virtual integration with customers”. He affirms that DELL Computer Corp.
detaches the partnership function from the marketing department, making everybody in the
company responsible for fostering the relationship to its customers.
DELL organizes its business around three main customer segments: large corporate customers
also called relationship customers, home and small businesses (transaction customers) and the
public sector. Interestingly DELL uses relationship marketing terminology to characterize these
segments.

Hence the company approaches each segment differently and customized to the specific needs.
The world’s largest computer manufacturer mainly utilizes two communication channels, the
Internet and call centers.

DELL assigns sales and telephone service representatives to individual relationship customers,
whereas each sales representative is dedicated to only one customer. In 1999 30 DELL
employees worked to maintain Boeing’s 140.000 PCs.

“Premier Dell.com” is the procurement portal for large customers. The websites are customized
allowing all registered customers to communicate faster with DELL, to place orders online and
to request technical support 24 hours a day.

The so called “Platinum Councils” are another means of maintaining a close customer
relationship. DELL organizes semi-annual meetings for their biggest customers inviting
executives and technicians to discuss latest developments in technology and giving them the
chance to exchange views and experiences.

All above listed examples draw a good picture of the way DELL intents to build and maintain a
good relationship with their customers. It also becomes clear, that the company regards some
customers more relationship worthy than others, by analyzing customer value and segmenting.
The largest customers even constitute a segment-of-one. Consequently relationship-building
measures concentrate on these groups. This philosophy becomes obvious as DELL names its
biggest customers “relationship customers” in opposing “transaction customers”.

10
SUPPLIERS MARKET

DELL’s supplier relationships underwent an interesting development in the last 20 years. Early
in its history, the company had more than 140 different suppliers. Over time, maintaining these
many relationships proved to be too costly, and its complexity, decelerated time to market.
Therefore, DELL redesigned its computers in a way, that different models utilize as many of the
same components as possible. Today, DELL only has about 30 suppliers provide 75 % of their
material needs. This involves that these suppliers are global suppliers, following their customer
in new international production ventures, what literally means, that they build plants next to the
DELL plant.

In order to stay flexible, DELL’s maintains a dynamic supplier relationship network, that means
not all supplier relationships last a long time. Where technologies are stable, for example in
monitors, DELL maintains long-lasting relationships, e.g. with Sony, whereas in more volatile
segments, e.g. memory components, relationships can be short.
Furthermore, DELL passes on customer feedback directly to its suppliers, so they are able to
benefit and adjust, e.g., their outputs quickly. DELL also communicates to its suppliers shifts in
the demand of certain types of models, to allow the suppliers quick adoption to customer
demand.

11
Nescafe, the UK’s best-selling coffee brand, has appointed Eleven as its agency of record for
below-the-line work as it gears up for a major relationship marketing push.

Eleven, Carlson Marketing Group’s ideas generation agency, will support Nescafe Original and
Nescafe Gold Blend, the UK’s top two coffee brands, as well as Nescafe’s premium and
specialty coffee brands, with direct and digital marketing, sales promotions, road shows and
samplings.

While the Nestle-owned brand refused to give further details of its future strategy, the
appointment comes as it gears up for a loyalty push.

In April, Nescafe launched an interactive web site to build loyalty and target its communications
better. The online venture is being used to build a database of customer information, and future
strategy is expected to focus on e-mailing consumers information and offers.

Nestle also launched its first brand loyalty promotion to run across the whole range of Nescafe
coffee in March.

Other Relationship marketing efforts

In 2006, NESCAFE launched the new coffee machine system "Dolce Gusto" ("sweet taste"
in Italian). The system allows consumers to make various styles of coffees themselves
(Cappuccino, Latte Macchiato, Espresso, Lungo, etc.). Additionally, hot chocolate and cold
drinks can be prepared with the machine. The machines are now sold in more than 15 countries
worldwide.
Other marketing activity included Experiential Marketing/Relationship Marketing, which led
Nescafé to become the headline sponsor of Good Food show 2008 at Birmingham NEC as part
of their campaign to drive awareness of the increased Nescafé collection. 95% of consumers at
this popular event rated the Nescafé Collection stand the best at the show. Nescafé used
advanced 3D technology to engage their consumers, led by iD Experiential.
In the UK in August 2009, Nescafé unveiled a £43m ad campaign for Nescafé, focusing on the
purity of its coffee and featuring the strapline "Coffee at its brightest".

12
Maruti created a land-mark in CRM by launching a website for the customers in the year 1998
by launching their websites.

Maruti is investing a lot of money and effort in building customer loyalty programmes…….

Maruti Auto Card - Auto Card brings the customer all the advantages of an international
credit card in addition to bringing the customer an opportunity of buying.
Maruti has aided customers by providing them the facility to bring their vehicle to a 'Maruti True
Value' outlet and exchange it for a new car, by paying the difference. They are offered loyalty
discounts in return. This helps them retain the customer.

Maruti Call Center Maruti has proper customer complain handling cell under the CRM dept.
The CIC will help MUL rapidly build an information pool of over 3 million Maruti owners as
well as that of its prospective.

The MOS ensures: Round-the-clock services in most of the cities -

A computerized call-monitoring system dispatches a mobile MOS van to the customer at the
earliest.All MOS vans are manged by qualified Maruti Authorised Dealers / MASS technicians
who are trained by Maruti in problem diagnosis .The customer are charged only Rs 100.

N2N: Maruti’s N2N Fleet Management Solutions for companies, takes care of the A-Z of
automobile problems.Services include end-to-end backups/solutions across the vehicle’s
life: Leasing, Maintenance,Convenience services and Remarketing.
Market Research Department- Their Market Research department remains on its toes to study the
changing consumer behaviour and market needs. Maruti enjoys 70%repeat buyers which further
bolsters their claim of being customer friendly.

Availability of easy finance-Maruti has also made the customer experience hassle free and
helped building customer satisfaction by developing different revenue streams in
the form of Maruti Insurance and Maruti Finanace.

Other advantage:which help in Maruti CRM

A Buying Experience Like No Other Maruti Suzuki has a sales network of 307 state-of -the-art
showrooms across 189 cities, with a workforce of over 6000 trained sales personnel to guide
MUL customers in finding the right car.

13
Quality Service Across 1036 Cities
In the J.D. Power CSI Study Maruti Suzuki scored the highest across all 7 parameters:
1.least problems experienced with vehicle serviced
2.highest service quality,
3. best in-service experience
4.best service delivery,
5.best service advisor experience,
6. most user-friendly service and
7.best service initiation experience

92% of Maruti Suzuki owners feel that work gets done right the first time during service. The
J.D. Power CSI study also reveals that 97% of Maruti Suzuki owners would probably
recommend the same make of vehicle, while 90% owners would probably repurchase the One
Stop Shop.At Maruti Suzuki, customers will find all car related needs met under one roof.
Whether it is easy finance,insurance, fleet management services, exchange-Maruti Suzuki is set
to provide a single-window solution for all car related needs.

The Low Cost Maintenance Advantage

The acquisition cost is unfortunately not the only cost customers face when buying a car. Not so
in the case of a Maruti Suzuki. It is in the economy segment that the affordability of spares is
most competitive, and it is here where Maruti Suzuki shines.

Lowest Cost of Ownership

The highest satisfaction ratings with regard to cost of ownership among all models are all Maruti
Suzuki vehicles: Zen, Wagon R, Esteem, Maruti 800, Alto and Omni.

CRM Through Social Relationship

In 1999 Launch of Maruti – Suzuki innovative traffic beat in Delhi and Chennai as social
initiatives.
Maruti Driving School-Available in all major cities.Lady trainer for lady customer.All these CRM
strategies have helped MUL maintain its existing customers and generate new ones.

14
Volkswagen Relationship Marketing: A New Age of Marketing Cars Online

Tribal DDB launches the brand new site for Volkswagen.co.uk, providing customers with the
most life-like experience of sitting in and walking round a new car without having to leave the
comfort of their own homes.

The launch of this site is the fruition of 18 months’ work by a dedicated full-time team of 50, and
is one of the biggest website projects currently being worked on in London.

Teams across creative, design, account management, technical and Flex have built this site from
scratch in response to demand from consumers and the increasing importance of the internet in
relation to how people now reach key buying decisions when searching for a car.

Tom Roberts, the Volkswagen site Account Director at Tribal, comments: “Buying a new car can
be a confusing process. Using clean white space and featuring the most progressive car
configurator currently available online, we built this site to be the most simple yet most
comprehensive, intuitive and engaging experience in this market.”

The highly sophisticated car configurator features 3D models of the Volkswagen range (which
the Tribal team spent a total of six months creating). Additionally, every option that visually
changes the appearance of each model has been included. As such, visitors can see first hand
how changing and including additional options will enhance the car of their choice.

In the near future, visitors to the site will also be able to book test drives, in real time,by directly
accessing retailers’ booking systems. They will be able to see which models are available at a
specific time and retailer, and reserve a time slot on line.

Volkswagen’s Relationship Marketing Manager, Marianne Nicholas, explains: “Our research

shows that people looking for a new car now do the majority of their research on the internet,
with visits to showrooms more than halved, down from five to two on average.

15
The Wal-Mart greeting was the original method used by the giant retailer to show customers that
they are appreciated. A greeter at the door thanks customers for coming in, assists with a
shopping cart, and provides a "goodbye thank you" upon departing the store. The friendly senior
citizen dressed in the blue vest conveys warmth and personality to every guest entering or exiting
a Wal-Mart store.
So why don't others adopt this simple marketing tactic?
Some do. Major retail stores also use greeters; many restaurants, hotels and other businesses do
the same. But most don't-because relationship marketing is not as simple as it seems. It takes a
type of commitment different than traditional marketing.
Relationship Marketing by wal-mart has 4 Key Components:
• It has to be personalized. Personalization can come in the form of a highly targeted
direct mail piece, a phone call or email. Obviously the handshake and a smile illustrated by
Wal-Mart greeters also work well in personalizing the relationship.
• It has to be targeted. Wal-Mart invests money in maintaining relationships with
existing customers. By targeting this group, Wal-Mart establishes long-term relationships
with their most loyal shoppers. Targeting customers through programs that reward loyalty
can result in big returns over the life of the customer.
• It has to be meaningful. Your marketing message has to connect in an emotional way
to establish a lasting relationship. If the Wal-Mart greeter did not look you in the eye while
saying "hello," the greeting would not have a lasting impact.
• It should be interactive. Many Wal-Mart greeters learn the names of frequent shoppers.
Walmart.com, a subsidiary of Wal-Mart Stores Inc., does a great job of asking for the
relationship online by providing special offers to those who supply their email address. It is
important to make relationship marketing interactive so you can hear feedback, determine
what is working and what is not.

16
The Company has made the systems as the Customer wants.

17
Relationship Marketing services by Airtel

 Retention plans
 Loyalty Plans
 100% bill accuracy guarantee.(Key driver)
 Offer of the day.
 World on finger tips

FEEDBACK

 Ensuring Feed Back from all in Airtel World.

 Ensuring Feedback on all calls from 121.
 Feedback survey done every week.
 Feedback from vendors.

18
CONCLUSION & SUGGESTION

Finally we can suggest that what the new-age marketer requires is the foresight and they
shouldn’t get caught by the marketing myopia and look beyond their usual ways to think out of
the box and innovate new tricks to cater the customers in a more profitable way which will make
the bond between the customers and the company stronger.

As customer perceptions continue to shift toward a more commoditized view of the world,
traditional marketing methods are quickly becoming obsolete. The market advantage is shifting
from companies with the ability to reach large numbers of customers through mass media to
those that have high levels of insight into individual customer’s behaviors and preferences.
Businesses that move beyond individual transactions and engage in learning relationships with
customers are seeing a lasting competitive advantage. Marketing Warehouse dramatically
simplifies this process, providing real-time visitor insight businesses need to build customer
loyalty and succeed in the new world of marketing.

The strengths that relationship marketing have on other marketing modes

1 Relationship marketing focuses on providing value to the customers.

2 It emphasis on customer retention
3 The method is an integrated approach to marketing,service and quality.Therefore it
provides a better basis for achieving competitive advantage.
4 Long term customers may initiate free word of mouth promotions and referrals.
5 Long term customers are less likely to switch to competitors.This makes it more difficult
for competitors to enter the market.
6 Happier customers may lead to happier employees.

19
BIBILIOGRAPHY

http://en.wikipedia.org/wiki/Relationship_marketing

http://www.12manage.com/methods_levitt_relationship_marketing.html

http://www.webtrends.com/upload/wp_relationshipmarketing.pdf

http://www.jagsheth.net/docs/Evolution%20of%20Relationship%20Marketing.pdf

http://print.rit.edu/pubs/02_04_sorce.pdf

http://www.leavingfingerprints.com/FHDortmund/archive/Dell%20%20best%20practice%20for
%20Relationship-Marketing.pdf?clsid=9a7fb2c3fadfe2eb6e62671771c26c31

20