7.6 A PROCESS MODEL OF RELATIONSHIP MARKETING
7.6.2 Relational Parties: The selection of customer partners (or parties with
customer groups will be the focus of its relationship marketing efforts.
Subsequently, when the company has gained experience and achieved successful results, it can expand the scope of relationship marketing activities to include other customers in the program, or it can engage in additional programs.
Although the selection of partners is an important decision for firms to make in achieving their relationship marketing goals, not all companies have formalized processes of selecting customers. Some follow the intui- tive judgmental approach of senior managers in selecting customer part- ners; others partner with those customers who demand so. Yet other com- panies have formalized processes for selecting relational partners that involve extensive research and evaluation against particular criteria. The criteria for partner selection vary according to different companies’ goals and policies. These range from a single criterion, such as revenue potential of the customer, to multiple criteria that may include several variables, such as customer commitment, resourcefulness, and management values.
7.6.3 Relationship Marketing Programs: there are three types of relationship marketing programs: continuity marketing, one-to-one marketing, and partnering programs. These take different forms depending on whether they are meant for end consumers, distributor customers, or business-to- business customers.
Continuity marketing programs: Given the growing concern for retain- ing customers as well as the emerging knowledge about customer reten-
tion economics, many companies have developed continuity marketing programs that are aimed at both retaining customers and increasing their loyalty. For consumers in mass markets, these programs usually take the shape of membership and loyalty card programs in which consumers are often rewarded for their member and loyalty relationships with the marketers. These rewards may range from privileged services to points for upgrades, discounts, and cross-purchased items. For distributor customers, continuity marketing programs take the form of continuous replenishment programs ranging from Just-in-Time (JIT) inventory management programs to efficient consumer response initiatives that include electronic order processing and Material Requirements Planning (MRP). In business- to-business markets, these may be in the form of preferred customer programs or special sourcing arrangements, including single sourcing, dual sourcing, network sourcing, and JIT sourcing arrangements. The basic aim of continuity marketing programs is to retain customers and increase loyalty through long-term special services that have the potential to increase mutual value as the partners learn about each other.]
One-to-one marketing: The one-to-one or individual marketing approach is grounded in account-based marketing. Such programs are aimed at meeting and satisfying each customer's needs uniquely and individually.
What was once a concept prevalent only in business-to-business marketing is now implemented in mass-market and distributor-customer contexts? In the mass market, the dissemination of individualized information on
customers is now possible at low cost due to the rapid development in information technology and the availability of scalable data warehouses and data-mining products. By using on-line information and databases on individual customer interactions, marketers aim to fulfill the unique needs of each mass-market customer. Information on individual customers is utilized to develop frequency marketing, interactive marketing, and after marketing programs in order to develop relationships with high-yielding customers. For distributor customers, these individual marketing programs take the form of customer business development. For example, Procter &
Gamble has established a customer team to analyze and propose ways in which Wal-Mart's business could be developed. Thus, by bringing to bear its domain-specific knowledge from across many markets, Procter &
Gamble is able to offer expert advice and resources to help build the business of its distributor customer. Such a relationship requires cooperative action and an interest in mutual value creation. In the context of business-to-business markets, individual marketing has been in place for quite some time. In what are known as key account management programs, marketers appoint customer teams to husband company resources according to individual customer needs. Often such programs require extensive resource allocation and joint planning with customers.
Key account programs implemented for multi-location domestic customers usually take the form of national account management programs; for customers with global operations, these programs become
global account management programs.
Partnering programs: The third type of relationship marketing programs involves partnering relationships between customers and marketers to serve end-user needs. In the mass markets, two types of partnering programs are most common: co-branding and affinity partnering. In co- branding, two marketers combine their resources and skills to offer advanced products and services to mass-market customers. Affinity partnering programs are similar to co-branding except that the marketers do not create new brands; rather, they use endorsement strategies. Usually, affinity partnering programs try to take advantage of customer memberships in one group to cross-sell other products and services. In the case of distributor customers, partnering programs are implemented through logistics partnering and cooperative marketing efforts. In such partnerships, the marketer and the distributor customers cooperate and collaborate to manage inventory and supply logistics and sometimes to engage in joint marketing efforts. For business-to-business customers, partnering programs involving codesign, codevelopment, and comarketing activities are not uncommon today.