Marketing Principle #3 All Competitors React  Managing Relationship-based Sustainable Competitive Advantage Agenda

Marketing Strategy Chapter 7 (Relationships)
Marketing Principle #3
All Competitors React  Managing Relationship-based Sustainable Competitive Advantage

Agenda

• Introduction
• Relationship Marketing Strategy
• Building and Maintaining Relationships
• Targeting and Adapting Relationship Marketing Strategies
• Relationship Dynamics and Lifecycle Stages
• Managing Relationship-Based Sustainable Competitive Advantage
• Building Relationship Equity
• Measuring Relationship Equity
• Multiple Regression
• Takeaways

Relationship Marketing Basics

• This relationship marketing (RM) process—namely, identifying, developing, maintaining, and terminating relational exchanges to improve performance—can produce relationship equity
• This form of equity, in combination with brands and offerings, in turn can lead to a sustainable competitive advantage (SCA)
• Relationship marketing and branding strategies that focus on building equity often overlap
• Customer relationship management is the managerially relevant, organization-wide, customer-focused application of RM, using IT to achieve performance objectives

Relationship Equity Represent an Important Source of SCA

• Relational-based exchange was the norm since Homeric Greece
• Transactional (product) marketing emerged only with the increase in mass production and “middlemen”
• “a rebirth of marketing practices of the pre-industrial age”
• Early brands were all “family names”
• Impact of “relationship” spending on sales twice as high as impact of advertising
• Large part of our “cognitive and emotional function” evolved to handle relationship-based processing
• $12 billion spent annually on relationship management

(Albers, Mantrala, and Sridhar 2010; Palmatier 2008)