Marketing Relationship Principles

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Table of Contents

Introduction
Strategic Marketing Principles
Cooperative spirit
Selectivity and Concentration
Principle of customer value
The principle of differential advantage
The principle of integration
Conclusion
References

Introduction

Marketing is primarily aimed at identifying and meeting customer preferences to and retain them (Coxhead Et al, 2005, p v). Consumer education has increased and they are more demanding than ever before. The changing business environment calls for a change in the methodology, perception and approach from marketing managers.

Continuous review of marketing strategies is therefore important for any organization that aims at surviving in the current competitive business world. The ultimate goal of strategic marketing is the improvement of profit margins of a firm. Firms identify market segments that are likely to increase profit in the future.

Strategic marketing plans therefore aim at creating marketing time frames and the mode of implementation to capitalize on the promising market segments. Besides improving a firm’s performance, strategic marketing also aims at increasing customer satisfaction by engaging one on one with consumers. Besides, other goals of strategic marketing include growing a firm’s market niche and improvement of innovation and penetration.

Sahaf too acknowledges that strategic marketing is dynamic and in that context, it is only better for marketing managers to master strategic marketing principles (p17). The principles will help in guiding them through their thought, actions and decision making.

Strategic Marketing Principles

These principles according to Sahaf include; the principle of cooperative spirit, the principle of selectivity and concentration, principle of customer value, principle of differential advantage and principle of integration (p 17). These principles will be used as the guidelines in critiquing the article. Strategic marketing principles help in development of customer relationship.

In the article, Relationship Marketing and Organizational Performance Indicators by Shaker, T. Ismail & Basem, Y. Alsadi, relationship marketing is given emphasis.

According to the article, the focus on strategic marketing should focus of forging closer relationships with the customers. Though good relationships with customers assure business of high returns, the article brings forth a feeling on overemphasis on the relationship.

If the principles that Sahaf has presented were to be adopted to represent universal strategic marketing techniques, then the article only represents one of them, that of recognizing customer value. But, because all marketing activities are geared towards attracting and retaining customers, one can argue that, that the above mentioned principles fit in the different relationship making techniques described by the article.

Cooperative spirit

In the global market place, meeting competitive challenges involves many strategies, relationship management being one of them (McDanie & Gitman, 2008, p 29). The old capitalist approach where business was only driven purely by profit motives is fast fading. Increased competition has forced many businesses to establish special relationships where they mutually benefit.

Relationship management according to McDaniel& Gitman involves enhancing interactions with customers and all other involved parties in order to develop a mutually benefiting relationship(2008, p 29).

This has to do with both business owners and customers embarking on joint relationship activities or relationships that will ensure mutual benefit. Managing customer retention which, deals with creating and keeping customers together with customer defection, calls for a cooperative spirit between the customers and marketers (Sahaf, n.d, p 17).

Among the key drivers that Ismail & Basem identify to be critical to building customer service relationships, is partnership and strategic alliances. They further acknowledge that mutually beneficial relationships between customers and businesses are necessary if a two way flow of value is to be realized.

Business partnerships, cooperative marketing networks and strategic alliances foster trust and partnerships that are beneficial to all parties involved. The view presented by the article on cooperative relationship in customer relationship management is very deep.

It’s possible that all the stake holders involved in any business, including owners, customers and shareholders can have a cooperative relationship, one that benefits all parties. However any relationship that may exists must be realistic. Customers are increasingly choosy and quality sensitive. A cooperative relationship may lead too close ties that may probably result in fixed profit margins.

This is because only a loyal clientele will be able to fully participate and sustain the relationship. Gitman and McDaniels acknowledge the fact that this cooperative relationship is only possible with customers who have stated with the company for a long time, bring new customers to the business, are less sensitive to price changes and take less of the company’s time (2008, p 29).

The article therefore also fails to acknowledge that fact that a discriminative feeling may emanate from the fact that not all clients may be treated equally in a cooperative marketing relationship, especially those that don’t value such cooperation.

Long staying clients may be blind to all price changes and unwavering loyalty may bring new customers while taking the company’s time but it’s also important to realize that it’s a painfully slow process to build such clientele to reach proportions that will produce high profits that will sustain the business.

Again, the position taken by the article seems to assume the pitfalls that cooperative spirits may run into. According to Sahaf, the partners may feel estranged because marketers are normally characterized as people who only address the objectives that benefit themselves.

Ismail & Basem too do acknowledge the importance of a good cooperative relationship with not only customers but suppliers. It is absolutely necessary and important that businesses maintain a good relationship with suppliers.

Quality goods that will ensure customer loyalty and retention of the loyal clientele cannot be achieved by the business alone. Good suppliers ensure high quality goods and the benefits will trickle down to the relationship that businesses have with their customers.

The article does not however put enough emphasis on the impact of time on successful cooperative relationships. Strategic marketing has a lot to do with positioning a business based on time.

Therefore any cooperative relationship that businesses may have with stakeholders especially customers must put time into consideration. There must a time frame defining the time it will take to achieve any tangible cooperation and what returns the business expects within the time.

Selectivity and Concentration

Achieving cooperation by creating good service relationships is easy, but that is just the general part of it. Many marketing managers will admit that specificity is important for the success of any strategic marketing plan. Careful identification of the potential market segments that promise the highest returns and consistency in building relationships with them is critical in strategic marketing (DeBonis et al. p 58).

That is what the principle of selectivity and concentration seeks to entrench. It also helps managers in deciding the amount or resources to commit to such ventures (Sahaf, n.d, p 19).

The principle helps markers in strategy building by helping them in market segment selection and resource concentration in the segments (Sahaf, n.d, p 19). Selectivity and concentration normally gives rise to micro marketing where marketers tailor their offerings to individual customers. As a result the niche market of that particular business is expanded.

In the article under review, Ismail & Basem do identify key words that point to the general direction of the strategic marketing approach described. They include; relationship marketing; interactive marketing, value creation rather than value distribution, partnership and strategic alliances. Prominently missing from the key words is marketing specificity and concentration.

Customer relationships will only be created after the market segments have been identified and resources allocated to them. The article fails to highlight the importance that segmentation and specificity will have on strategic marketing principles. More emphasis is given to relationship building, ensuring stakeholder satisfaction, building a loyal customer base and developing an interactive relationship with the customers.

All the above is in order but, Ismail & Basem could have shown the picture by acknowledging the importance of market segment selection. Also important but not acknowledged is the role that resources play in such relationships. Because resources are limited, ensuring that they are channeled to the deserving market segments and with consistency will achieve the performance that an organization need.

Principle of customer value

After a business has identified the market segments that will improve profits in the long run, attracting and retention of customers becomes the main focus. As earlier said, the ever demanding consumers always look for value for their money. Ensuring that customers gain value for their money is a long-term strategy for marketing. Various ways provide an insight on what “value for money” means for customers.

According to customers, value is low price, whatever he or she wants in a product or service, quality for the money he/she pays and what a customer gets for what he/she pays (Zeithlam, 1988) as quoted in (Sahaf, n.d, p 20).

Therefore any cooperative relationship that may exists between them and other business stakeholders must pay attention to the above definitions of value by customers. In this case, the popular saying “customer is always right” holds.

Any business is guaranteed success after the introduction of a new product or service in the market, one which people are willing to pay for. Newness of a product fades with time and any sales especially repeat sales that a company hopes to make are more often than not based on the value addition the product has (DeBonis et al., 2002, p 77).

Value addition may be through addition of more features that will avail more options to the customer. DeBonis et al, further says that the value that the company offers must be better than what competitors are offering and it should always be the value promised (2002, p 77).

Ismail & Basem, in their article do acknowledge the importance of value creation as compared to value distribution as one of the major strategic marketing tactics. Value creation is exhaustively dealt with in terms of dimensions and axioms. Value creation in the article is taken to be one of the dimensions of relationship marketing.

Value creation is realized according to Ismail & Basem by going beyond the simple principle of satisfying what the customer wants. An all effort where the company capabilities are focused on creating value for the market segment defines value creation in this case.

Competition and self interest according to Ismail & Basem are the drivers of value creation. Through competition, marketers get high value offers from suppliers which in turn they offer the customer but for their self interest.

Again, the independence of choice that markers enjoy creates an effective system for value creation. The freedom of partners to choose their transactional partners ensures only the best partners stay in the business effectively providing a basis for markers to preserve their self interests and giving value to customers.

In other words, the selective relationship that businesses will have with their suppliers will indirectly aid in adding value to the goods and services that they offer. The result is value achievement and addition that helps in strategic marketing by the businesses.

In a nutshell, as businesses crank up efforts to build good relations with clients, it’s important too to ensure value of services offered or goods produced is kept high. Companies must be able to promise people what they can deliver and deliver them.

Though the article has detailed explanations on the importance of value, it does not give it the independent emphasis that it deserves. Value is given importance within the interactive marketing segment that usurps the importance of customer value as a principle of strategic marketing.

The principle of differential advantage

Differential advantage that a firm may enjoy is critical to the success of strategic marketing. All firms are in business to compete for the same clients that their competitors target. However, some firms enjoy more advantages like economies of scale, stronger financial footing or strong financial backing (Hulbert, 1985, p 209).

They are though expected to compete on the same level which is hardly advantageous for the weak firms. In order to create value, Sahaf says that firms pursue a strategy of differentiation from that of their competitors (n.d, p 21). Uniqueness is among the top objectives that a differentia strategy pursues.

Positioning strategy involves choice of market and creation or identification of differential advantage (Thomas & Edgan, 1998, p 40). Thomas & Edgan further say that the differential advantage needs to be communicated clearly to the target market to prepare a unique position in their minds(, p 40).

It may be pursued through the quality of the goods or services produced, the mode package and delivery or in the promotion of the product. Ismail & Basem have not acknowledged the importance of competitive advantage and how it can be taken into account in the relationship building efforts. Normally the differential advantage can be applied after market segmentation has been dome.

The target market is presented by value added products, while the company make an effort to be as specialized as it can to stem competition from its competitors. As earlier said, the detailed relationship building initiatives argued by Ismail & Basem are built on shaky ground.

Shaky ground because market segmentation is not explicitly acknowledged nor is the concentration of resources on the segmentations themselves. Further the article fails to point out ways in which competitive advantage can be used by marketers to ensure customer loyalist is achieved and kept.

Emphasis too needs to be given to the factors to be considered by firms when pursuing strategic marketing approaches with competitive advantage in mind. Firms need to know that as they establish the interactive relationships advocated by the article, their positions are not obsolete.

There is failure therefore to acknowledge of the competing forces to which the firm seeking to build loyal clienteles is relative to. Also it is important to note that building good relationships with stakeholders is just one pillar in the pursuit of domination in the selected market segments.

Its therefore imperative to multiple sources of competitive advantage are sought to increase the chances of maintaining sustainability of the advantage. Sources of competitive advantage too need to be monitored because their change has to lead to change in the marketing strategy. That means the way relationships have to forged and carried out will change too.

The principle of integration

Integration marketing is critical to strategic marketing success (Capon, 2007, p 24). Capon further says that successful integration has two sides; the customer and the firm. The customer dimension demand close coordination of design and execution elements of the marketing plan concerning the offer made to the customers.

It is done with the wisdom that a carelessly coordinated campaign can easily turn away potential customers. On the firm’s dimension, the principle demands that the firm coordinates all its activities in the target market, a task that is normally difficult. T requires smooth collaboration between departments of a firm that is carrying out strategic marketing.

Different elements of strategic marketing need to work together to produce the desired results. The principle of integration therefore seeks to find out and/or to help in ensuring the compatibility of the elements of strategic marketing.

According to Sahaf, the rationale of including the element of integration is anchored in two assumptions (n.d, p 21). Integration helps marketers understand relationships between the different components of strategic marketing and to capitalize on the resources synergies and multiplier effects between marketing activities.

Ismail & Basem do explore numerous components that can help in strategic marketing. But the components are limited to good business relationship with stakeholders only. As earlier stated, the bigger picture of strategic marketing should have involved other principles as described above.

Even the in the tackled components in the article, there is little effort to show how integration among them will be achieved. Instead, they are dealt separately, though deeply with shallow explanation of how they should work together to achieve marketing targets.

Conclusion

The marketing relationship that Ismail & Basem describes in the article concentrates majorly on economic, social and technical ties of stakeholders. However it does not explore how the firms will go about acquiring the market segments. Again, it does not to a large extent address the principles of strategic marketing as identified but Sahaf. It is only fair if the article is described as only one sided and lacks the bigger picture look.

Emphasis is overly given to the personal and emotional connection that businesses should build with customers fro marketing to succeed. Most of the proposals given in the article on achieving client loyalty and cooperation are more theoretical than practical.

However its worth to note that Ismail & Basem have done a good job detailing every possible dimension of building good business relationship and using it for marketing especially to predetermined segments. A bigger picture view where they could have acknowledged the role of other strategic marketing principles could have completed it.

References

Capon N. (2007). Managing Marketing in the 21st Century. New York: Wessex Publishing

Coxhead H.B, Lashwood M, Patridge L, Reed P & Simms H. (2005). Strategic Marketing. Cambridge: Select Knowledge Limited.

.DeBonis N.J, Balinski W.E & Allen P. (2002). Value-based marketing for bottom-line success: 5 steps to creating customer Value. New York: McGraw-Hill.

Hulbert M.J (1985). Marketing: A Strategic Perspective. New York: Impact Publishing Company.

McDaniel C & Gitman J.L. (2008).The Future of Business: The Essentials. New York: Cengage Learning.

Thomas J.M& Egan C. (1998).The CIM handbook of strategic marketing. London: Butterworth-Heinemann.

Sahaf (n.d). Strategic Marketing: Making Decisions For Strategic Advantage. USA: Learning Pvt.Ltd.

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