SCM 301 Essay

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.

Previously, in literature, different production strategies for customer order fulfillment have been discussed. These strategies can be classified as Make-to-Stock (MTS), Make-to-Order (MTO), Assemble-to-Order (ATO) and Engineer to Order (ETO) [42, 43]. These strategies differ with respect to where stock is held in the system and where the production system is decoupled from customer order [44]. The adoption of these strategies depends on the customer’s willingness to wait as discussed by Mather in his P/D ratio, where he compares the production system’s response time (P) to the customers’ willingness to wait (D) [45]. Company’s decision to adopt any of these approaches is of great strategic importance [46] as it strongly affects the way a

It is our contention that RM is inherently an ethical activity, since enduring relationships cannot be built or sustained without a solid moral foundation. Before moving on, it is important to define and clarify our view of relationship marketing. As Kotler and Keller (2006), Gummesson (1999) and others have stated, RM has the aim of building mutually satisfying long-term relations with key parties – customers, suppliers, distributors – in order to earn and retain their businesses. Norberg (2001) listed 14 definitions of RM taken from the literature during the last 15 years. Most of the definitions indicate that there are separate phases of a relationship such as its foundation and maintenance. Furthermore, elements like trust, equity and involvement tend to foster this bond and contribute to long-term partner satisfaction. This paper is divided into four parts. First, we examine the historical roots of relationship marketing. The second section characterizes both the American and European views on RM. Third, we present a model of ethical relationship marketing and discuss its components. Within the model, the theory of virtue and several relevant virtues that we believe are essential for successful RM are examined. In the subsequent discussion, we lay the groundwork for those who might attempt to measure the presence of these characteristics in business and consumer partnerships that have been claimed to be successful. Finally, we draw implications for

The findings from the case studies indicate that the purchasing function is strongly determined by the policies of cooperation with suppliers, by the extent to which decision-making is centralized, by the choices made in other logistic functions and by external factors. Companies Beta and Delta seek to establish policies for relationships with suppliers which aim at obtaining economies of scale from the volume of goods purchased, responsiveness in the delivery of raw materials, storage of raw materials purchased, reductions in lead-times for orders and stability in the price and delivery of raw materials – this last item considered in relation to the quantity demanded by the companies. On the other hand, the lack of a policy for dealing with partnerships creates certain problems for companies Alpha and Gamma, such as low

This is one of the reasons why there has been a gradual shift towards a relationship-approach. Harker et al. (2006a) quoted the American Marketing Association, to have followed the same approach when it gave the definition of marketing as a business functions and a set of procedure to establish, communicate and provide value to its customers and to manage customers’ relationships in such a way that it is mutually beneficial to all stakeholders. It is now clear however, the shift towards a longer-lasting and more profitable marketing approach from a product-based marketing approach has a better chance of sustainability over longer periods as it is more business-orientated. Relationship Marketing Relationship marketing has been seen during the last decade of the 20th century, as the prevailing thought in developing a marketing scheme both in industrial marketing and consumer marketing (Tseng, 2007) in (Kibeh, 2013). The initial appearance of the phrase ‘relationship marketing’ in the marketing literature was in late 1970s and early 1980s through the research of Dwyer et all (1987) and Berry (1983ab) among

The purchaser purchasing procedure is a complex matter as many internal and external factors have an impact on the buying decisions of the consumer. Before a business can create promoting schemes, they should understand the factors which influence buyer behavior and how they settle purchase choices to fulfill their requirements and needs. Buyer behavior result from profound qualities and dispositions. Customer Relationship management is the strongest and the most effective methodology in keeping up and making associations with customers. It is also unadulterated business as well as ideal and strong individual behavior within people. Although this is about growing long term relationships with the customer, nowadays, it can be

One of the basic assumptions in relationship marketing is that long-term loyal customers are profitable .Customer relationship profitability is achieved through a chain that starts with perceived value that creates customer satisfaction that, in turn, strengthens the relationships so that it lasts longer and thus becomes more

When buyers are fewer in number relative to the number of suppliers, there are higher in buyer concentration. In this situation, the buyers have a higher power over the supplier. The supplier’s sales revenue will highly dependent on these few number of buyers and they will cater to every demand of the customers. In contrast, if the number of buyers is higher relative to the number of suppliers, the power of buyers is smaller and they are highly dependent on the supplier. (Martin, 2014)

Transactional marketing is based upon the 4Ps: product, price, placement, and promotion. The focus is upon the 'point of sale' and maximizing the value from the transaction rather than upon the characteristics of the buyer. Through market research, the company creates a product that meets a consumer's projected unmet needs, at a price point desired by the likely consumer, positions or places the product in the market in a desirable fashion relative to competitors, and finally promotes it in an engaging fashion that makes it 'stand out.' "For example, ask why your target audience needs a particular feature. What if you drop your price by 5%? What if you offer more colors? Why sell through wholesalers rather than direct channels? What if you improve PR rather than rely on TV advertising?" (Manktelow & Carlson 2012).

Marketing today is very different to how it used to be. Effective marketing is all about understanding the external market and identifying that the customers are looking for something unique rather than what is already available. There are two approaches that an organisation can take when marketing a product to the consumer. These are transactional marketing and entrepreneurial or relationship marketing. Relationship marketing is a more modern approach to marketing today, as it is a way of gaining repeat sales and a close relationship to the customer. Relationship marketing is defined as an “attempts to involve an integrate customers, suppliers and other infrastructural partners into a firm’s developmental and marketing activities.” (Sehr 1994). When the producers communicate directly with their consumer individually they are more likely to develop a close relationship, which will hopefully result in frequent sales. (Sehr 1994) The producer’s main priority is on the needs and wants of the consumer and ensuring that they are given the most efficient service. There opinion is what matters to them creating a two-way system for a long-term sustainable performance. Transactional marketing, adopted by sim venture, is the other marketing strategy that can be taken by an organisation. This is a more old fashioned view of marketing and considered to be a one-way system. Limited contact is made between the

Relationship marketing “transcends the actual product or service to create stronger bonds with consumers and maximize brand resonance” (Strategic Brand Management, P. 182). This marketing strategy understands that customers are the key to success. They treated customers with utmost care. As I mentioned in my personal experience above, Apple created a sense of connection

Relationship marketing is marketing seen as relationships, networks and interaction. It is aimed at establishing long-term win-win relationships with customers. In approaching a potential customer,

Hanley, S., & Leahy, R. (2008). The Effectiveness of Relationship Marketing Strategies in Department Stores. lnternational Journal of Business and Management , 133-140.

Boeing, for example, at the end of the 1990s failed to achieve sufficient buffer capacity or inventory levels by pursuing a lean manufacturing strategy without considering the variability of demand in the aerospace industry (Naylor, Naim and Berry, 1999, p. 108 and p. 112). Airplanes fulfil most of the criteria for functional products as identified by Fisher, except long-term demand predictability (1997, p. 106). If, as in this example, end-user demand is subject to sudden, unpredictable variations, it is not sensible to implement lean manufacturing at the interface with the end-user (Naylor, Naim and Berry, 1999, p. 112). In general, the cost resulting from investments in responsiveness needs to be compared to the opportunity cost of lost sales resulting from stockouts (Thonemann, Behrenbeck, Küpper and Magnus, 2005, p. 18). These stockouts are most likely to occur with products that are subject to demand fluctuations. Responsive supply chains aim to avoid such stockouts and therefore prioritise the ability to react to changing customer requirements (Alicke, 2003, p. 145). Providing the right degree of responsiveness and having an efficient supply chain at the same time is a goal that is hard to achieve and that typically involves trade-off decisions by management, since increased responsiveness can be perceived to come at the expense of reduced

There is a difference between relationship selling and transaction selling. The book defines relationship marketing as, “The process by which a firm builds long-term relationships with customers for the purpose of creating mutual competitive advantages” (Stanton 9).