Question

Topic: Student Questions

Product Marketing Vs Relationship Marketing

Posted by Anonymous on 1/26/2009 at 11:38 AM ET 125 Points
my lecturer suggested there is a current shift from product marketing towards relationship marketing, what are the main differences? is relationship better?
To continue reading this question and the solution, sign up ... it's free!
SUBSCRIBE
Or, SIGN IN

RESPONSES

  • Posted by Peter (henna gaijin) on 1/26/2009 at 11:56 AM Accepted
    I would start by reading these two descriptions and understanding how they differ:
    https://en.wikipedia.org/wiki/Product_marketing
    https://en.wikipedia.org/wiki/Relationship_marketing

    In general, products have been shifting some from a mass market product (one product that everyone buys as is) towards products that are made specific for a customer. At a simple level, this means more options for customers. For example, you used to go to a dinner and get a coffee, and the only choices where sugar and/or milk. Now you go to Starbucks or Peets or similar and can choose where the beans are from, type of beans, etc.

    The rise of software programs called CRM (Customer Relationship Management) have helped relationship marketing grow.
  • Posted by wnelson on 1/26/2009 at 10:46 PM Accepted
    Just as sales has moved from extensive diatribe on features to building relationships with the customer, so has marketing moved from products to relationships with customers. This is the old philosophy that make a great product and it sells itself - or make a great product and the customers will come. It's not products (or services) that SELL and therefore we should market them - it is PEOPLE who buy. In ignoring this and focusing on the products, we miss out on creating long term customers and customers who are advocates and actually sell the products for us. We also miss out on key information on what customers want and without the relationship. Further, people like to buy but no one likes to be sold. Think of it like this: When was the last time you went into a store and asked the clerk to SELL you something? You would rather go in and have the clerk guide you only when you need it, but to back away and let you make the decision and make your purchase.

    From another perspective, given the internet today, customers have such a large range of options available to them. Many of the options are so very similar or have differences that are very confusing. Classical product marketing would build comparison tables between the options and spin features in a positive light. Each and every manufacturer would do this such that the marketing would be as indistinguishable as the product. The buyer's decision would be made on pure chance or mood. By injecting relationship marketing into the buying process, we can understand the customers' needs and present our product in a way that demonstrates we meet those needs. Or better yet, as we have dialog and build the relationship, we can discover new needs and incorporate new features and benefits into our products and services.

    I hope this helps.

    Wayde
  • Posted on 1/30/2009 at 8:59 AM Author
    Thank you so far. However, is this shift mainly seen in a B2B or in B2C contexts??
  • Posted by wnelson on 1/30/2009 at 9:27 AM Member
    Both. We're talking about human psychological change. The change is driven, to a large extent, by increased information and choices being available. Think of it this way: 50 years ago, you had two to three choices from which to select. Each choice had two or three main characteristics from which to choose. The characteristics were presented, you could evaluate them, and you'd make the choice. Three products, three characteristics - nine things to evaluate. A controllable situation. Having data was important and the consumer evaluated the data and converted that to information. That's from the consumer side. From the producer side, 50 years ago, the world wasn't as flat. Your market was your neighborhood or your town, or at the most, your country. People's needs were less diverse. You had only two or three competitors. The need to get things "just right" in order to sell wasn't was great. You could look out your window and observe needs and behaviors and be pretty close. In this situation, from both the consumer and producer perspective, Product Marketing worked fine.

    In today's world, there are hundreds of competitors in a diverse global marketplace selling products for which technology has brought about 10's to 100's of differentiating characteristics. From a consumer perspective, product marketing - where you rely on the product to "sell itself" doesn't work. Take 100's of characteristics per product times hundreds of products and you have 10's of thousands of combinations from which to choose. That's a lot of data. Again, with technology, we even can convert the data to information for the consumer, but even the information is a lot to evaluate. So the consumer needs an "information broker" to guide them through the information to a decision. Product marketing isn't enough. It takes relationship marketing. Relationship marketing first builds rapport and then trust with the consumer. Then the consumer trusts the marketer to guide them to a decision.

    From the producer side, more and more market segments are available because of the flat world global economy. You can no longer look out your window to understand needs. You have to get things "just right" because if you don't one of the other 100's of competitors will and you won't sell. It takes relationship marketing to seek the needs to a precise degree.

    This move is prevalent throughout both B2B and B2C because the same technology that is fueling it, the same level of choices and characteristics are in both sectors. And the same people are in both areas. In B2C, certainly, you see the "personal" aspect. However, in business, it's still people who are making decisions. And those people are also consumers. They bring with them their expectation for relationship market, whether they are working in a B2B company experiencing relationship marketing and bring it to their consumer life or experiencing it in their consumer life and bring it to work. In otherwords, you can't separate the two sectors because you have people who are in both.

    Wayde
  • Posted on 2/4/2009 at 9:43 PM Accepted
    Relationship marketing is pivotal to create camaraderie between the suppliers and buyers of the product or service. Relation Marketing is a process, where the organisation seeks to develop a continuous and long term relationship with the consumer, which could be resulted as mutually beneficial. The organisation tends to maintain and update the available information of individual consumers in order to design better product or service that would meet their requirements. Relationship marketing helps an organisation to increase their profitability, brand loyalty, product differentiation and gaining competitive advantage. Whereas for the consumers, it fulfils their wants and tend to get personalised attention from the organisations.

    Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services, organisations, and events to create and maintain relationships that will satisfy individual and organisational objectives.The definition emphasizes marketing as beyond the transactional point of view, and provides a distinctive view of marketing where relationship between buyer and seller is also an important factor. there is a shift in paradigm in Industrial and Service Marketing. The shift was from transaction-oriented ‘Marketing Mix’ view old exchanges to a relationship marketing view. Mobile phone operators in UK have clearly opted to create and maintain relationship with their existing contract customers. i.e. when the customers are about to finish the contract, they tend to offer latest phones, and the best possible deal depending on the usage of customers; in order to retain their existing customers. With the introduction of new products in every sector, product life cycle (PLC) has been reduced considerably with consumers tend to buy latest product that suits their needs e.g. Fashionable clothes have a PLC of 2-3 weeks. Due to globalization of the brands, there has been increase in availability of products, but also increase the number complaints from consumers. To overcome with those complaints, company’s provides 24*7 hours customer service that results in satisfaction of customers wants.


    It is essential for an organisation to identify the correct segments to target in order achieve maximum profit out of the product launched. Depending on disposable income, customer need differs, Circumstances of Customer change, for example they grow older, form families, change jobs or get promoted, change their buying patterns. It is prominent for an organisation to develop a long term relationship with their customers, and track down the changes. Customer Relationship should still remain the focus of all company’s activities.


    hope this helps

    thanks...

    Pankaj
BACK TO TOP

Post a Comment

Related Discussions

Community Info

Top 25 Experts
(Student Questions)