Final Relationship Marketing and E - Comm FILEminimizer

Interactive technologies and Relationship Marketing
Daksha Dixit - PG-11-072 Khushboo Kothari PG-11-086 Mihir Madia PG-11-090 Khushboo Nisar PG-11-096 Sumaiya Patel PG-11-099
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Marketing strategy It is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. What is transactional marketing? Transactional marketing is a business strategy that focuses on single, "point of sale" transactions. The emphasis is on maximizing the efficiency and volume of individual sales rather than developing a relationship with the buyer.
What is Relationship marketing? Relationship Marketing strategies (or one to one strategies ) are those that embrace the idea of treating each customer in an individualized way
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TRADITIONAL TRANSACTION MARKETING versus RELATIONSHIP MARKETING

TRANSACTION MARKETING One off exchanges, Brand Management Short term Focus Mass Communication Isolated Market Research Mass Market or Market Segment Market Share RELATIONSHIP MARKETING Ongoing Exchanges, Customer Management Long term Focus Personal Communication Ongoing Dialogue
Focus Time Perspective Primary
Customer Feedback Mechanism

Market Size
Markets -of -One

Mind Share (share of customer)
Criterion for Success
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Relationship marketing strategies are not new; several factor including increased fragmentation of market, more intense competition, a generally high level of product quality, more demanding customer etc to seek competitive advantage by focusing on the development of enduring relationship with customer. However information technologies in particular the Internet, have provided additional incentives for firms to adopt such strategies. It is important to recognize that network technology can not only be used to manage information, but also be used to manage relationship.
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THE RELATIONSHIP MARKETING PROCESS

Interactions Learning about customers 1. Knowledge Acquisition 2. Customer Differentiation Interactions Customization of Marketing Mix 1. 2. 3. 4. Product/ Services Communications Channels Price
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LEARNING ABOUT CUSTOMER

Knowledge Acquisition
The key to any successful relationship marketing progream is information. Some types of information gathering are less intrusive than others.
Eg: 1. MatchLogic, Inc 2. Stolichnaya Vodka website
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CUSTOMER DIFFERENTIATION
Different customers have different needs. Different customers add different level of value to a firm. Firms decide allocation of resources using value level. Firms focus their efforts on providing greatest amount of value to valuable customers.
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CUSTOMER DIFFERENTIATION
Future profits are derived from reduced: Acquisition Cost Revenue Growth Cost Savings Referrals Price Premiums
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WHY LOYAL CUSTOMERS ARE MORE PROFITABLE?
P R O F I T
Years Free Powerpoint Templates
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CUSTOMIZATION OF MARKETING MIX

Marketing Mix include: Products and Services Communications Channels Price
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PRODUCT AND SERVICES

1. Creating What Customers Want Mass Customization Eg. Personal Journal from Wall Street Journal, iGoogle Use of outsourcing technique.
Customers interact directly through interface.

Eg. Dell Computers, Cisco, Holiday Inn
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LEVI STRAUSS & CO.

Levis Stores have Original Spin kiosk.
It creates unique pair of custom fit jeans.

Precise measurements are given to sales associate and stored for future reference. Demand is transmitted to Levi factory and order is shipped within 10-15 days. Sanjay Choudhuri says The goal is not to sell a pair of jeans; its to build a relationship. The customer is starting to design
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2. Remembering What Customers Want Customers do not like to give same information again and again. Remembering information reduces transaction costs. Customers teach and Firms learn. Increases customer switching costs. Increases customer retention rates.
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3. Anticipating What Customers Want
Firms extrapolate customer needs based on previous purchasing, demographics, etc.

Information technology has made Outsourcing to Customers possible. IT helps store customer preferences and analyze the entire customer base. It helps establish relationship among users and their needs. Eg: Amazon.com, Yahoo.com
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COMMUNICATIONS
1. Banner Advertisements Banners are directly linked to advertisers website Enables direct interaction with the customers Direct Advertisements Indirect Advertisements via Third Party Eg. DoubleClick
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COMMUNICATIONS
2. Email A form of Direct Marketing Direct emails to customers using database Low cost and High Customized messages Response rate only 30% Eg. Egghead.com
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COMMUNICATIONS
3. Experiential Marketing Nikes NikeTowns Land Rovers Land Rover Centres
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COMMUNICATIONS
4. Viral Marketing Technique of using internet to accelerate word-of-mouth Eg: Hotmail, Amazon.com
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CUSTOMIZING CHANNEL
In traditional markets, dual distribution systems are not uncommon; there are numerous examples of companies using more than one channel of distribution to sell to different groups of customer. However the process of managing multiple distribution system can be both tricky and risky. Interactive technology is posing new challenges in this regard. Eg: Norwest Mortgage American Airlines
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CUSTOMIZING PRICING
Personalized Pricing Price depending on the customer Customer has the complete control over the terms of sale Eg. Airlines, Priceline.com, eBay, Onsale
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CUSTOMIZING PRICING
Versioning Different prices for different versions of the product Create high end and low end versions to sell at different levels of willingness to pay
Many software companies price lower versions low and higher versions with additional features high Eg. Sony Xperia, Wolfram Research
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LEVELING THE FIELD

Companies have taken advantage of customer ignorance in the past resulting huge profits. Interactive technologies have made customers more aware of various versions, models and options available to them. Virtual databases analyze various options in seconds.
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SUMMARY : A LEARNING RELATIONSHIP

The relationship marketing process involves an interactive cycle pf knowledge acquisition, customer differentiation, and customization of the entire marketing mix. This process is sometimes referred to as a LEARNING RELATIONSHIP A Learning relationship between a customer and an enterprise gets smarter and smarter with each individual interaction, defining in ever more detail the customers own individual needs and tastes.
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E-Coms and Their Marketing Strategies
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Most e-commerce firms fail sooner than later...... But how do their strategies affect those failures?
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US department of defence developed internet technology in 1960. E commerce has been one of the fastest growing marketing innovations.
Increasing trend of the internet economy Double to 4.2 tn in 2016 from 2.3 tn currently. -BCG
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E-COMS AND DIFFERENT MARKETING STRATEGIES

Barnes & Noble (bricks and mortar)
Dell corporations for B2B and B2C
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3 STAGES OF E- COMMERCE
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BENEFITS OF E- COMMERCE
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BENEFITS TO CONSUMERS
Convenience Information Fewer hassles Wide product range Lower prises
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BENEFITS TO MARKETERS
Quick adjustment to market conditions Lower costs Relationship building Audience sizing
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GOALS AND EXPECTATION OF E- COMS

TARGET CUSTOMERS: Distinction among consumer, industrial and public sector. Study show that e coms concentrate predominantly on one sector.
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PRODUCT: Have rapid product development and tend to forgo the traditional multistep process. Discovering user needs and altering this gives:> flexibility > faster market feedback > e- tailing > service > e- marketing > e- communication Study the extent to which e coms engage in products or market types
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PRICING: One of the dynamic marketing tool enabling them to use real- time prises. e- coms have lower prises because of comparison shopping. Study seeks to recognize the different prising strategies used
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PROMOTION By use of mix of advertising , personal selling, sales promotion & public relation Promotion mix depend on target markets e-coms are likely to use adverting to capture awareness before going to persuade their customers. Study seeks 1. The extent to which e- coms use different promotion tools 2. To compare how B2C and B2B co. use these tools
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DISTRIBUTION Two types of distribution process > store distribution > non store distribution E-coms non store or electronic distribution eg. Dell and Casio
Study seeks to establish the extent to which e coms use net , in person, mail, parcel delivery firms to distribute their products
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E-COMS: THE STUDY & ITS FINDINGS
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Primary & secondary data of 151 companies were collected. Primary data: contacting marketing director of each company & a request for an interview. Secondary data: startup date, IPO date, number of employees, profit/loss & the nature of the business. Secondary data was gathered from the Web sites of the 151 e-coms.
Out of 151, 136 marketers were willing to interview. Interview data was recorded by specially trained interviewers on a pretested & refined 2-page questionnaire. They were asked about to provide information about the domestic & international marketing strategies of their companies, including their target markets & product, promotion & distribution decisions,as well as profit & loss information. Free Powerpoint Templates
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FINDINGS OF TABLE 1
E-commerce is a nascent,fragmented industry made up of many just hatched ecoms. In total, the 136 companies employ 82,321 employees, ranging from 8 employees to 12,100 employees. The employment contribution of e-coms is quiet small.
FINDINGS OF TABLE 2 (TARGET CUSTOMERS)

44% - consumer sector 40% - provides products & services to other firms 6% - public sector Rest target different combinations. These findings suggests that different target markets may need different marketing strategies. B2C- advertising Free Powerpoint Templates B2B- personal selling
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FINDINGS OF TABLE 3
What e-coms do? 33%- provide various internet services 11%- e-tailers 10%- software providers 9%- build internet infrastructures 10%- offers a combination of the above 8%- e-marketers New products- building e-communities & Net infrastructure.
FINDINGS OF TABLE 4 (PRICING METHODS)

38%- cost plus pricing 29%- demand based pricing 26%- negotiate their prices 7%- use a combination of the above three methods
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FINDINGS OF TABLE 5 (PROMOTION TOOLS)

Half of the firms useadvertising About a quarter use sales representatives About 9% rely on public relations or sales promotion About 15% use combination of the above tools.
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FINDINGS OF TABLE 6 (METHODS OF DISTRIBUTION)

41%- through net 28%- postal services or FedEx 17%- deliver in person 14%- use combination of the above distribution channels
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Conclusions
Pricing products & services below present cost (but above the lower cost expected in the future as a result of the principle of economy of scale) in order to capture market share has created large & growing losses in almost all the firms studied. E-coms will likely use comparative advertising that contrasts their products with the competitions coupons & other price discounts to increase sales. E-coms interested in targeting more than one market should develop a different strategy for each one.
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Interactive technologies and Relationship Marketing

Free Powerpoint Templates

TRADITIONAL TRANSACTION MARKETING versus RELATIONSHIP MARKETING

Focus Time Perspective Primary

Customer Feedback Mechanism

Markets -of -One

Criterion for Success

Free Powerpoint Templates

Free Powerpoint Templates

THE RELATIONSHIP MARKETING PROCESS

Free Powerpoint Templates

LEARNING ABOUT CUSTOMER

Eg: 1. MatchLogic, Inc 2. Stolichnaya Vodka website

Free Powerpoint Templates

Free Powerpoint Templates

Free Powerpoint Templates

WHY LOYAL CUSTOMERS ARE MORE PROFITABLE?

Years Free Powerpoint Templates

CUSTOMIZATION OF MARKETING MIX

Free Powerpoint Templates

PRODUCT AND SERVICES

Customers interact directly through interface.

Free Powerpoint Templates

LEVI STRAUSS & CO.

It creates unique pair of custom fit jeans.

Free Powerpoint Templates

Free Powerpoint Templates

Free Powerpoint Templates

PRODUCT AND SERVICES

Free Powerpoint Templates

PRODUCT AND SERVICES

Firms extrapolate customer needs based on previous purchasing, demographics, etc.

Free Powerpoint Templates

Free Powerpoint Templates

Free Powerpoint Templates

Free Powerpoint Templates

Free Powerpoint Templates

Free Powerpoint Templates

Free Powerpoint Templates

Free Powerpoint Templates

Free Powerpoint Templates

LEVELING THE FIELD

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SUMMARY : A LEARNING RELATIONSHIP

Free Powerpoint Templates

E-Coms and Their Marketing Strategies

Free Powerpoint Templates

Free Powerpoint Templates

Free Powerpoint Templates

E-COMS AND DIFFERENT MARKETING STRATEGIES

Dell corporations for B2B and B2C

Free Powerpoint Templates

Free Powerpoint Templates

Free Powerpoint Templates

Free Powerpoint Templates

Free Powerpoint Templates

Free Powerpoint Templates

GOALS AND EXPECTATION OF E- COMS

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Free Powerpoint Templates

Free Powerpoint Templates

Free Powerpoint Templates