Source: Google Images
Introduction
You can’t shake hands with a clenched fist. —Hon. M. K. Gandhi
Relationship Marketing (RM) is the most admired and thought provoking notion in the recent marketing literature. The most apt and pragmatic initiative has been taken about RM by many research scholars globally. It goes hand in hand with the theoretical foundational groundwork carried out by hardcore academicians and also the real-life practitioners. This foundation leads to the most vital contribution through the ethical as well as feasible aspect of relationship building.
There is a ruthless competition among domestic and global players to notch up the sales and grab the maximum market share. The sophisticated technology has made it possible to understand complex behaviour of individual customer. Today’s customer is not only choosy but he is also dictating the terms through the product purchase of reputed brand at competitive rates. The market is no more a hustle free terrain but is a battle because of the industrial rivalry. In this intense competition-each company desires to do the best with its organizational resources to accomplish strategic advantage.
According to Lee Iacocca, former CEO of Chrysler Corporation – “All business operations can be reduced to three words-‘people, product and profit’. People are the most important; without which you cannot do much with other two”. Similarly ‘customer, innovative quality and shareholder value’ are considered important in the same way.
Relationship building and Competition
The external (environmental) and internal (organizational) forces constantly impinge and reciprocate with each other and marketers understand the industry dynamics though it. Environmental and organizational scanning helps in the strategic decision making process. Relationship building is proved to be the most essential yet challenging phenomenon. Acquiring new customer costs much more than keeping old ones. In this era of Information explosion there is immense online data availability and countless product options available for customers. There are numerous competitive offerings which attract them while making a final purchase. The ways of behavior of customers are the indicators of their psyche.
According to marketing guru Peter Drucker “The purpose of business is to create and then retain the customer. Making money is necessity and not the purpose.” Relationship is always a central theme of cultured and meaningful living of mankind. Customer’s long-lasting relationship with the business had not been given prominence by management thinkers till eighties. Earlier research always was product oriented instead of customer preference oriented. Marketing theory was weaved around 4P’s and yet had a missing link. Customers were taken for granted by the marketers. The awareness about the products was in nascent stage.
The customer-centric strategies for firms
The role of relationship with customers was not taken seriously earlier. Dealers were exerting efforts to sell products for gain of maximum margin. It is a famous apothegm said by Ford that “You can purchase any color of car till its black”. This reveals the reluctant attitude of the earlier “business maven” i.e. those experts who “focused on things”. It was later replaced gradually by “connectors” i.e. those experts who “focused on customers”. There was a massive shift in the management through clearly identifying the changing equations of business through the retention of customers. That has paved the way as new effective strategy having one to one relationship with customers.
To understand customers well, following points must be pondered upon. One must probe why customers behave in certain way or why not. It must be studied what customers are conscious about and how they are perceived by others. Next, companies should find how they can cater customers in the best possible way. The marketers should know how to build relationship with them. They must probe how to achieve challenge of customer loyalty. It is seen how customers respond to different available products and services. In all the buyer behavior is studied deeply. Also it is seen why they switches brand. It is traced how company profitability objectives can be met with the customer satisfaction, retention and delight.
It should be tracked how the internet leads to serve them effectively. Further how efficient service shall be given to them. How they feel special through the experience of buying. Companies shall understand demographics of customers and help companies to serve in better way. Company should solicit feedback and study customer behavior before strategic decision making.
It is desirable that business of any industrial powerhouse is to create satisfied customers. The customer’s business is getting product with best possible value at the lowest possible price. It is said that business is like oil. Oil gets mixed with oil only. Thus both the players can have an acceptable offer for each other in the zone of agreement to fulfill their mutual requirement. Further they can reduce search-time, share the overall risk, and build better relationships and intact loyalty towards each other.
Relationship Marketing: White Goods Sector
In white goods sector, through the traditional channels, the product is not sold by company to the end customer directly. But the intermediaries (specially the dealers) play a crucial role in actual sales transaction. Firstly, when company sells goods to distributors it is known as primary sale. Secondly, when distributors sell goods to dealers it is known as secondary sales. Thirdly, when dealers sell goods to customers it is known as tertiary sales. Tertiary sale is important in generating more profitability. Firstly; the study focuses on the tertiary sales which fetch business to companies. Customer retention and loyalty are strengthened by the dealer who sells the goods. Further in this study it is seen that, how the company creates brand loyalty through after sales service. Company takes brand building efforts and dealers facilitate actual sale of the product. At various touch points- monetary as well as relational transaction with end customer are opportunities for company.
The good business culture and quick response by sales force generates synergy. Effective communication is an important way of educating customers. The communication channels are oral, written, electronic or nonverbal. Proper communication boosts revenue and generates brand loyalty. If the minimum is the noise, better would be the communication. ‘Practice what you preach’ is a best way to create a good culture. The good organizational culture is achieved by entrepreneur through retaining good employees, make them work effectively for the organization and set an example for others. Managing change can be through overcoming resistance, responding it and simplifying situations. The ‘stretching’ leads to obsessive commitment towards work and best exploitation of resources. In this process ‘high productivity with meager resources’ is attained.
Customer relationship and white goods companies
It is a practice of white goods companies for more than two decades that products are dumped to the dealers. Customers depend on dealer for facilitating service as well. Let it be presales, actual sales or post sales relationship. It is seen that dealers facilitates all these roles for the benefit of company. In turn the company gives them margin per product for the results they are producing. If dealer outperforms then company provides them incentives also. They also give them offers on quantity discount.
It is observed clearly that the pre-sales includes sales promotional strategies. Those strategies are carried out by companies for brand building. Also dealers are doing advertising for promoting the products and the building the dealer image. Through these activities it is found that customers get attracted towards company’s brand and creates an affinity and trust towards it. Also dealers play a crucial role of developing customer relationship by enhancing not only through financial exchange but also promoting company’s products and service. Thereby the dealer attains better rapport as well as strong personalized bond with the customer. The customers get delighted through overall service and hence get retained.
Summary:
It has been observed that the fabric of business equations is varying through achieving high performance & synergistic capabilities. Hence white goods companies are trying to withstand in the competition with innovative new product range and the creative human capital. Across the organization, employees are being fostered to develop organizational citizenship behavior through their unique contribution and competencies. New valuable insights on strategic moves make companies to work out better solutions on annoying real-life contingent problems. Factually, strategic formulation and its implementation is a challenging process. But taking correct and timely strategic decisions give better leverage. In such scenario- attracting, retaining and delighting customers can be at the heart of strategy.
PC: Google Images
©2019, Dr.Amit Medhekar. All rights reserved.
