Transaction Marketing v/s Relationship Marketing

Sakshi Arora AMF-36 Shivani Gupta CMF- 08

Transactional Marketing

Transactional Marketing is also known as Traditional marketing. Transactional marketing mainly focuses on the single sale formula, pushing the sales through mass marketing and promotions of the product. Orientation on product features, rather planning for the longer run of the product in the market; it is based on the short time scale, with little or no emphasis on customer services. Employs pull technique, producing the product with quality as a primary concern, and satisfying the customers needs and wants without building any relationship with them. Transactional marketing focuses on maximizing the

 Transaction

marketing definitely won't work for every business model. However, it makes sense when you're selling something that isn't going to be popular for long.

For Example: Sales agent who

is being given commission for each sale he makes. The sales man tries to persuade the customer to buy the product by describing the benefits of the product, and sales the product and then never gets back to the customer. If you were selling themed merchandise for a new movie, you probably wouldn't need to develop relationships with your customers. It's not likely they will want to buy any more merchandise when the movie isn't new anymore.

ADVANTAGES
Fast jumps in income for little upfront investment Cost Savvy For example, certain transactional marketing campaigns cost nothing more than a phone call or sending a flier out in the mail. Since it's a relatively inexpensive effort, marketers can make their marketing dollars stretch farther with transactional marketing campaigns. Extra time in finding and acquiring customers in the short term, boosting sales.

DISADVANTAGES One and done concept Less recognition of brands Spend less time acquiring customer

Relationship Marketing

Intense rivalry led to shift from transactional marketing to 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

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

Organizational Benefits Cheaper to keep existing customers than to attract new customers Reduced cost 80:20 rule Not all customers have equal value Lifetime value of customers

Customer Advantages Overcome risk and ambiguity of complex services Confidence benefits

Emphasis on all 6 market domains(especially customer retention)

Relationship Marketing

Emphasis on customer market domain(especially customer acquisition)

Transaction Marketing

Functionally-Marketing

Cross FunctionallyMarketing

Transactional v/s Relationship Marketing

Marketing Strategy Continuum Time perspective Transactional Marketing Relationship Marketing Short term Focus i.e. single sale recruitment Marketing Mix Customers tend s to e more sensitive to price Quality of output(technical quality dimension) Long term focus i.e. retention to customer Interactive Marketing(supported by Marketing Mix activities) Less Sensitive

Dominating Marketing Function Price Elasticity

Dominating quality dimension

Quality of Interactions(Functional quality dimension)grows in importance & may become dominant Managing the customer base(Direct approach) Real-time customer feedback system Interface of substantial strategic importance Internal marketing of substantial strategic marketing

Measurement of customer satisfaction Customer Information System

Monitoring market share(Indirect approach) Ad hoc customer satisfaction surveys Interface of no or limited strategic importance Internal marketing of no or limited importance to success

Interdependency between marketing, operations and personal The role of Internal marketing

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