Relationship Marketing Digital Marketing Development Rm Theory Essay
- Length: 6 pages
- Sources: 5
- Subject: Business
- Type: Essay
- Paper: #87224500
Excerpt from Essay :
Relationship marketing Digital marketing >development RM theory >customer relationship management theory >Nature digital marketing >E-business/E- commerce > RM a result direct marketing 1) markerting
Relationship Marketing and Digital Marketing
Development of Relationship Marketing Theory
Relationship marketing is a form of marketing that focuses on customer retention and satisfaction, in comparison with other forms of marketing that focus on sales. This type of marketing is characterized by increased interest in the value that customer relationships can provide companies that cultivate long-term relationships with them through specialized communication strategies.
The development of relationship marketing is in accordance with technological developments. The expansion of online social networks provides great potential that can be exploited by companies that develop and implement relationship marketing strategies. The most frequently used strategies in relationship marketing are represented by inbound marketing efforts, public relations, social media, and others.
The need for relationship marketing is determined by markets characterized by numerous competitive products that address similar needs. In such situations, customers prefer to frequently purchase different brands. Customer loyalty is reduced in these cases. In order to improve customer retention, sellers focus on improving the purchasing process, by providing personalized customer experience. This helps them develop a relationship with customers and to be able to address them through other strategies than traditional marketing.
In addition to this, sellers are trying to use relationship marketing in order to improve customer satisfaction. In this case, sellers focus on developing relationship with existing customers rather than on investing in the effort to attract potential customers. The customer retention process is based on certain activities. The process is based on customer valuation that determines the value and category of each customer in order to determine where it is more profitable to invest.
The customer retention measurement activity is intended to determine the customer retention rate. In accordance with this rate, companies are able to compare and analyze certain products and customer segments. These activities allow companies to determine the strategies that can provide the most significant effects.
Most large companies address relationship marketing in their strategies. For example, Coca Cola, EBay, and Dell have developed marketing strategies that include relationship marketing techniques. They developed certain activities directed towards customers that are based on the characteristics of the local market and that focus on building a relationship with customers. This objective is reached through organizing different events, sponsoring sports or social events.
There are several models used by companies that address relationship marketing. Internal marketing is one of the most important models. It refers to developing relationships within the company with its employees, managers, and departments. This is intended to improve employee satisfaction, which leads to improved efficiency and productivity (Egan, 2008).
The six markets model is also used in relationship marketing strategies. The markets addressed by this model are represented by internal markets, supplier markets, recruitment markets, referral markets, influence markets, and customer markets. These markets required different strategies that the company must develop and implement.
Customer Relationship Management
Customer relationship management focuses on the customer. In other words, CRM is used in identifying customer segments, analyzing them in order to identify important characteristics, and using this information in order to improve their experience and relationship with the company. CRM is also used in identifying customers' needs and developing products and services able to satisfy these needs.
However, this requires organizational and strategic changes in the case of companies. This means that they should change their focus from the product to customers. In addition to this, the company must focus on providing products needed by customers, and not products that are in accordance with the company's traditional possibilities.
In order to develop successful CRM strategies, it is important to identify customers' needs. This can be achieved through questionnaires, research studies, and focus groups. There are significant differences between customers in different markets. Therefore, it is recommended to develop research programs in order to determine these different characteristics and address them with specialized strategies.
The development and implementation of CRM strategies is quite expensive. The cost of software and hardware required by CRM are significant. In addition to this, CRM specialists that develop plans for companies that require such strategies are expensive and their plans also require significant investments. There are also other costs associated with CRM strategies (Prasongsukarn, 2010).
There are several steps that must be followed in order to develop and implement successful CRM strategies. Therefore, it is important to establish the strategy design. Then, the company must analyze its business needs and information. The process is then evaluated in order to determine whether it can be successfully applied. The planning and analysis of CRM is achieved by selecting the software and technology. This is followed by the implementation and monitoring of the strategy.
Digital marketing is represented by promotion of products and services through digital advertising channels. These channels refer to television, radio, the Internet, mobile platforms, social media and others. The numerous customers that can be reached by developing digital marketing strategies have determined companies to address this type of marketing.
Therefore, companies can develop push and pull digital marketing strategies. The pull digital marketing strategies are represented by the user's intention to search for the product. In this case, contents are viewed on website or blogs. The costs associated with this type of advertising are reduced. However, in this case, it might be difficult for the customers to find the message developed by the company (Ryan & Jones, 2009).
The push digital marketing strategies refer to advertising through email or mobile text messages. In this case, it is the company that develops and sends marketing messages directed to users. This allows the company to benefit from better targeting and improved services. However, this involves higher costs and a smaller number of customers addressed through this strategy.
Given the high number of social network platforms on the Internet is increasing, it is important that companies use such channels and integrate them in their marketing strategy. However, this does not suffice in developing and implementing successful marketing strategies. Therefore, digital marketing must be combined with other types of marketing.
Electronic commerce is represented by buying and selling products and services through electronic systems, usually through the Internet. The process of globalization and the increased use of the Internet have determined the significant development of e-commerce. This activity is also influenced by technological developments that allow electronic money transfers, data processing, and others.
E-commerce has influenced business to business marketing. This situation determined increased price competition. In addition to this, e-commerce allows customers to analyze different companies, their products, and their prices. This information is used in the purchase decision. E-commerce has also influenced the educational system. This is because customers across the world can purchase online educational programs from other countries.
There are several advantages for customers that use online shopping. For example, they can easily compare prices, and reduce the time required for shopping. The disadvantages are represented by the fact that in certain cases the product received by the customer does not match its online presentation (Epstein, 2004).
Companies also have certain advantages from establishing online shops. In such cases, their costs are significantly reduced. They require different sales force in comparison with traditional shops, and online domains are less expensive than the rent paid in the case of traditional shops. However, e-commerce sellers must invest in certain technologies that allow them to ensure the security of online transactions, given the fact that certain customers do not trust this type of shopping. In addition to this, e-commerce requires different types of marketing strategies that are intended to increase the number of customers.
Relationship Marketing Changes
Relationship marketing is derived from direct marketing techniques. This means that there are several similarities between these forms of marketing. Direct marketing is represented by companies communicating with their customers through direct marketing techniques like print ads, fliers, catalogues, promotional letters, street advertising, and others.
The most important channels addressed by direct marketing are direct mail, telemarketing, email marketing, broadcasting, couponing, and others. Companies prefer to use direct marketing because the results of such strategies are easy to measure. In addition to this, the increased targeting in these cases lead to increased efficiency for these companies.
There are several changes in relationship marketing as a result of direct marketing. Its evolution is in accordance with the increased use of the Internet and with technological developments. Direct marketing focuses on attracting customers, while relationship marketing focuses on the satisfaction and retention of companies' customers. This situation determines different types of marketing strategies that these companies must develop and implement.
The distribution channels are also different in the case of relationship marketing. The most important channels in this case are represented by social network platforms on the Internet. Another important difference from direct marketing is that relationship marketing is based on the involvement of users. In other words, Internet users help spread the marketing message developed by the company (Varey, 2002).