Akash C.Mathapati

Relationship Marketing in Mass Markets

Akash C.Mathapati

Akash C.Mathapati

Conditions for Relationship Marketing Relationship develops between a customer &

an organization, when there are benefits to both

Customization Relationship in mass markets requires that the

market consist of different benefit segments that can be served

Other words, for relationship to develop, customization must be possible within the product category

Mass customization begins in service industry E.g., FedEx

Akash C.Mathapati

Customer Intimacy Relationship involve one or more exchanges over

time Key features of RM is its explicit recognition that

exchanges between organization & customer extend beyond strict economic boundaries

In mass markets, RM can facilitate customer intimacy by invoking emotions in a variety of contexts

Akash C.Mathapati

Two way interactions An exchange relationship between the

organization & the customer requires a two interaction

To practice RM in mass markets, managers must ask, can customers contact the organization ?

Many organizations keep the address & no. of customer on file to respond

Two way interactions can reduce the propensity of customer to switch to new suppliers

Akash C.Mathapati

Extended time intervals The relationship between an organization & a

customer occurs over a time interval that may encompass one or more exchange

Exchange relationship often extends beyond the time of the actual sale

Exchange involves psychological /social resources as well as economic resources, the duration of the relationship include the various stages of the selling process

In case of multiple exchanges, the relationship can include regular or intermittent transaction or continuous transaction

Akash C.Mathapati

The role of marketing variables Product variables that facilitate relationship Perceived quality:

The notion that customer satisfaction& perceived value depends on perceived quality

Delivery & high quality product can strengthen relationship with customers in mass markets

Warranties: Warranties, guarantees & return policies are signals that

create customer expectations about product performance as well as reduce perceived risk

Akash C.Mathapati

Warranties increase trust in the organization, improve the customers perceptions of the future value of the relationship

Warranties encourage 2 way interaction

Akash C.Mathapati

Pricing & Promotion Policies that Facilitates Relationship Usage Rewards:

These programs create incentive for customer to stay with same organization to collect the rewards

Rewards that directly support the products value proposition are better from a loyalty standpoint than are indirect rewards

Rewards that are relatively immediate are better than rewards that are delayed

Tailored Promotions: Marketers deploy tailored promotions using direct

mail, telemarketing & regional events

Akash C.Mathapati

These variables create perceived heterogeneity within the product category

Personalization & customization increase the customers perception of the future value of the relationship & increase perceived switching costs

Akash C.Mathapati

Distributional Variables that Facilitates Relationship Flexibility:

In product delivery & distribution is another critical marketing variable used by organization to strengthen relationship with customers

Flexibility leads to customization, which increases customer satisfaction and the perceived value of the relationship

E.g., travel agents, Hotels, L.L Bean

Akash C.Mathapati

People: In mass markets, products are frequently

delivered by service employees To be successful in stimulating relational behavior,

effective HR management is critical to ensure that service employees can create customer satisfaction, develop trust

Akash C.Mathapati

Communication Strategies that Facilitate Relationship Public Relations Forums Corporate partnerships and sponsorships