Microeconomics of Customer Relationships

Customers often have substantial power to affect the competitive environment. This power can take the form of easy consumer access to several retail outlets to purchase the same or similar products or services (Pearlson & Saunders et al., 2009). L.L.Bean has, from the beginning, recognized that the customer has many options in spending. This recognition of the power the customer holds is reflected in

Through sustaining the customer relationships, leaders of the company have realized that “becoming nearer to the consumer” is vital for the progression.

'Traditional marketing in the business-to-business environment requires very different strategies from those campaigns directed towards the consumer market.' (ExtraVision, n.d., p. 1) 'Consumer competition can be a lot fiercer, with customer loyalty a constant battle.? (ExtraVision, n.d., p.1)

Thirdly, option is to strategically adjust the prices of their products because consumers are often very price sensitive. By doing so the company can either create more value that defines the quality and quantity of the product.

7) The significance of the shift from transaction-based marketing to relationship marketing is that firms realize that just attracting customers to buy their products is not quite as important as establishing and maintaining relationships with them so that they will turn into loyal repeat customers. Relationship building begins early in marketing. It starts with what customers want and need, and then developing high-quality products to meet those needs.

priority for us. When we fail to do so, it is not just letting our consumers down, but us a company

1 In Relationship era, business gets a different method which includes long time relation with their customers and how they buy that products by just knowing about their customer’s desires and needs. They interact with their customers and it takes a lot of time to know about each person personally. The companies who have long term customers, they don’t have to give discounts to make new customers because their regular customers help them by just referring that product or company. The companies get a lot of benefits from their existing customers as the relationships between the customers reduce their overall costs. During this era, business did not confine to one nation only but it grows beyond boundaries.

1. Economics – the efficient allocation of the scarce means of production toward the satisfaction of human needs and wants.

There are a diversity of aspects that can sway changes in supply and demand. These aspects include price increases or reductions. An instance is a nominal reduction in an asking rental price can result in a significant growth in necessity for houses. To a similar effect, an growth in the rental cost of two-roomed apartments consequentially resulted in a reduction in the demand of houses by a material measure. Providers were willing to supply more houses at higher costs and fewer ones at reduced rents.

It is imperative to satisfy customers and give them an amazing experience at the company. While it cost less to sell to existing customers and companies can increase profit by selling to the same customers; if customers are satisfied, there is more chance they will come back for more services or products. Satisfied customers are a free marketing for the company. However, it is the opposite if customers are dissatisfied. Dissatisfied customer will tell 8 to 10 people about his or her experience (O’Brien, A & Marakas, G. 2004). If by any reason, representatives see that the customer is not satisfy, they should act fast and fix the problem. Furthermore, there is more chance for sale representatives to sell to an existing customer that to a new customer. A good strategy for customer retention is to reward good customers. Companies can easily do

5. RELATIONSHIP MARKETING: In this competitive era, companies are always looking for ways to develop and maintain a long lasting relationship with customers, employees and even suppliers. Relationship marketing is two way traffic; it goes beyond just making ‘sales’ and companies are beginning to realize. Good relationship with customers is a strategic weapon for any company, this is because long term customers buy more, do referrals and give back valuable and truthful feedback. Keeping a customer requires an extra effort. According to the founder of Walmart: “There is only one boss, the customer, and he can fire

Consider a market transaction that you have undertaken as a consumer which was notable because it is particularly recent, large or unusual. Analyse this transaction from a micro-economic standpoint.

Purpose - In a seminal article, Webster argued in 1992 (Journal of Marketing, Vol. 56/October, pp. 1-17) that some changes in concept and practice have fundamentally reshaped the field of marketing. He claims that ‘customer relationships' are now the key strategic resource of a business. Strategic partnerships and networks are replacing simple market-based transactions. The purpose of this paper is to investigate this claim in the context of various relationships maintained by the adidas® group.

Broadly speaking organisational customers can be classified in commercial, institutional and governmental sector. (Oxford University Page)

Marketing is a crucial activity for the survival and success of a business. Businesses today have more marketing opportunities than ever (Bresciani & Eppler, 2010). In small businesses, marketing relies heavily on word of mouth recommendations for customer acquisition.Today’s economy, distinguished by relationships, technology, and networks, favors some of the characteristics of SMEs (Walsh & Lipinski, 2009).