The Concept of Relationship Marketing

The Concept of
Relationship
Marketing

Lesson 2.1

Principles of Marketing
Accountancy, Business, and Management

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Have you come across a suggestion box in a store? Or a
“rate our app” request on your mobile phone? What did
you do with it?

Marketing is not just
about targeting and
acquiring consumers; it is
about engaging and
building relationships
with them.

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How do
businesses
retain their
consumers?

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Quick Look

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Think of any product or service you have repeatedly purchased or used
before. Think about its quality, service, and why you have become a
repeat buyer. Then, think again if you have been able to voice any
concerns or feedback to them. Do you ever wonder why they ask you for
feedback or encourage you to share your experience with others?

“Share Your Experience”

Quick Look

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Since businesses rely on their customers to continue operating, their
ideas, thoughts, and concerns must always be considered. More and
more enterprises use digital technology and social media to reach out to
their customer base.

“Share Your Experience”

Quick Look

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For instance, a haircare company would encourage its customers to post
their selfies and share their experiences with their products and services.
To foster participation, the said company would offer discount codes for
people who will participate. For the consumer, giving a review, feedback,
or suggestion is easy and simple. But in turn, it actually creates a
community where people support, ask, and learn from each other.

“Share Your Experience”

Quick Look

1. Why do you think social media is used to gain feedback or reviews?

2. Why do you think companies encourage their customers to participate

in share your experience activities?

3. What do you think you would gain from such activities if you were the

consumer?

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Questions to Ponder

Learning Competency

Define "relationship marketing" (ABM_PM11-Ic-d-5).

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Learning Objectives

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In this lesson, you should be able to do the following:

● Discuss the definition, characteristics, and benefits of

relationship marketing.

● Demonstrate understanding of the relationship marketing

concept.

● Relate the relationship marketing concept with the marketing

mix.

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What makes customers repeat their
purchases and develop a deep
loyalty to a brand?

● Relationship marketing is building a long-term

relationship with the customers.

● It is to create, maintain, and strengthen connections to

give long-term value and measure its success through
providing long-term customer satisfaction.

Relationship Marketing

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● It is building a long-term relationship with the customers.

● It is to create, maintain, and strengthen connections to

give long-term value and measure its success through
providing long-term customer satisfaction.

● It is developed and implemented by every department.

Relationship with Customers and Stakeholders

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● It is when a salesperson

approaches a customer
to sell the product or
service.

● It is known as direct

marketing.

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Relationship with Customers and Stakeholders

● It happens when a

salesperson encourages
customers who bought
the product to contact
the company for any
concern or suggestions.

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Relationship with Customers and Stakeholders

● It is when a salesperson

contacts customers after
sales to ensure that the
customer is satisfied or
has encountered any
problems.

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Relationship with Customers and Stakeholders

● It is when the company

regularly contacts its
customers for feedback
to help improve
performance.

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Relationship with Customers and Stakeholders

● It is when the company

continuously interacts
with its customers to
improve overall
performance and
discover ways to deliver
better value.

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Relationship with Customers and Stakeholders

Relationship
marketing aims to
develop an important
asset called the
marketing network.

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Relationship with Customers and Stakeholders

A coffee shop employs the following marketing strategy to
build a strong marketing network with all stakeholders:

● serves delicious coffee that's locally sourced from different

small businesses operated by farmers

● strictly adheres to government policies and regulations
● maintains transparency and accountability in all its

financial and business dealings

Comfort and Connection

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● adds to the comfortable customer experience
● makes sure that the staff look well-rested and happy, and

talk respectfully with clients

● offers different rewards like a free reusable cup for a

customer's birthday

● gives discounts to customers who bring their containers to

discourage using disposable cups

Comfort and Connection

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Check Your Progress

Why is a marketing network considered an important
company asset?

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1

Answer area

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service and

support

trust and

commitment

benefits and

rewards

communication

Characteristics of

Relationship

Marketing

Characteristics of Relationship Marketing

customer retention

● establishing

communication channels
for customers to voice out
their concerns

● understanding the

customer’s needs

Communication

Characteristics of Relationship Marketing

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● delivering promises
● committed to obtaining the

customer’s trust

● transparent and accurate

in providing information

Trust and Commitment

Characteristics of Relationship Marketing

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● providing high-quality

service and support before
and after sales, or
whenever needed

Service and Support

Characteristics of Relationship Marketing

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● offering benefits and

rewards

● offering additional value to

the product or service
itself

● motivating customers to

keep coming back

Benefits and Rewards

Characteristics of Relationship Marketing

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● providing a unique

customer experience

● resulting from effective

communication, rewards
and benefits, trust and
commitment, and support
and service

Customer Retention

Characteristics of Relationship Marketing

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Marketing promotions and strategies are crucial in
establishing solid relationships with customers. Society could
suffer enormous consequences when marketing activities are
not properly planned and when shared information is
incorrect.

A Contest That Turned Deadly

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A beverage company started a promotion activity in the 1990s:

● printed 3-digit numbers underneath the bottle caps
● announced every week a winning combination

This marketing promotion enticed people to buy their products
for a chance to win a million pesos.

● half of the population participated
● monthly sales of the product from $10 million to $14

million

A Contest That Turned Deadly

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The company made a grave mistake: it announced a
supposedly non-winning combination one night

● thousands of people held winning bottle caps and

demanded their million pesos prize

● street demonstrations and deadly riots erupted
● resulted in serious harm to people and properties

A Contest That Turned Deadly

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Benefits and Importance of Relationship Marketing

● recognizes a customer's value; shows the business cares

and values its customers

● keeps a good relationship with stakeholders
● provides valuable product or service information

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Benefits and Importance of Relationship Marketing

Customer
experience and
feedback

Customers leaving great
reviews can lead to a boost
in the brand’s reputation.

Customer feedback

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Benefits and Importance of Relationship Marketing

Loyalty and word-of-
mouth

When customers are more
connected with a brand,
they associate with it.

Customer Loyalty

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Benefits and Importance of Relationship Marketing

Consistent
improvement and
enhanced value

Customers provide valuable
insight that helps in
improving the business
operation and improving
value.

Continuous improvement

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Check Your Progress

Why is relationship marketing important in businesses?

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2

Answer area

● Companies conduct marketing to keep their customers

content while maintaining a positive bottom line.

● The decisions related to the marketing mix ultimately

influence consumers to purchase a company's products or
avail of its services.

The 4Ps and Relationship Marketing

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The 4Ps and Relationship Marketing

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● Develop the right product

that addresses the needs of
the target market.

The 4Ps and Relationship Marketing

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● Utilize the right channels to

reach and be reached by
their target market.

The 4Ps and Relationship Marketing

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● Guide companies on how

they interact with
audiences, promote their
products, and build strong
customer relationships.

The 4Ps and Relationship Marketing

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● Set the right price and

measure customer reaction
to all possible pricing
options.

● Relationship marketing brings companies closer to their

customers and target markets, allowing them to make the
right decisions and strategies on the product, place,
promotion, and price.

The 4Ps and Relationship Marketing

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Check Your Progress

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How do relationship marketing elements influence the
marketing mix?
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Answer area

A big chain of supermarkets supports sari-sari stores and small
retail shops in the Philippines that hold a large customer base.
Offering a free membership program provides the company
valuable insight into what products sell well and what do not.

Which Side Its Bread is Buttered

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Arceo-Dumlao, Tina. “Puregold Knows Which Side Its Bread Is Buttered.” INQUIRER.net. Philippine Daily Inquirer, June

9, 2013. https://business.inquirer.net/125993/puregold-knows-which-side-its-bread-is-buttered, last accessed on

October 24, 2021.

The program has different activities like sessions on finance,
product presentation, and capital maximization. The company
also helps members understand customer behavior which
helps them gain an advantage over others. Aside from steep
discounts, they also have a rewards program where members
can convert points from purchases to e-money.

Which Side Its Bread is Buttered

46

Arceo-Dumlao, Tina. “Puregold Knows Which Side Its Bread Is Buttered.” INQUIRER.net. Philippine Daily Inquirer, June

9, 2013. https://business.inquirer.net/125993/puregold-knows-which-side-its-bread-is-buttered, last accessed on

October 24, 2021.

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Which Side Its Bread is Buttered

This strategy resulted in the company's growth. From a few
hundred members, the company created a massive number of
followers. They aim for their loyal customers to grow and be
successful too. They also intend to continuously build their
success on the stable foundation of their ever-strengthening
relationship.

Arceo-Dumlao, Tina. “Puregold Knows Which Side Its Bread Is Buttered.” INQUIRER.net. Philippine Daily Inquirer, June

9, 2013. https://business.inquirer.net/125993/puregold-knows-which-side-its-bread-is-buttered, last accessed on

October 24, 2021.

Keep in Mind

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●Relationship marketing is about building lifelong customer
relationships. It values customer feedback leading to customer
loyalty and retention, and it has five levels: basic, reactive,
accountable, proactive, and partnership.

Keep in Mind

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●Relationship marketing is also used to develop a mutually beneficial
relationship with key constituents, namely the customers,
employees, marketing partners (suppliers, distributors, etc.), and
members of the financial community (investors, lenders, banks, etc.).
It leads to the development of an asset called the marketing
network.

Keep in Mind

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●Strong relationships with customers and stakeholders have five
characteristics: communication, trust and commitment, service and
support, benefits and rewards, and customer retention. If the
company has effectively applied the first four elements in its
relationship marketing plan, it will result in customer retention and
loyalty.

Keep in Mind

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Keep in Mind

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●Relationship marketing brings companies closer to their customers.
By giving importance to customer feedback and value, companies
can make the right mix of decisions and strategies on product, place,
promotion, and price.

Try This

Identification. Determine what is being described by the following items.

1. It is where the company continuously interacts with its

customers to improve overall performance and discover
ways to deliver better value.

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Try This

Identification. Determine what is being described by the following items.

2. It

is

the

ability

of

the

company

to

increase

return

customers and repeat buyers.

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Try This

Identification. Determine what is being described by the following items.

3.

It is building long-term relationships with its customers.

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Try This

Identification. Determine what is being described by the following items.

4. The different characteristics of relationship marketing are

________________,

trust

and

commitment,

service

and

support, benefits and rewards, and customer retention.

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Try This

Identification. Determine what is being described by the following items.

5. It

is

the

level

of

relationship

marketing

where

the

salesperson encourages them to contact for any concerns
or suggestions.

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Practice Your Skills

Read the situation and answer the following questions.

A customer has ordered a new phone through the company’s online
store. He has paid the item in full through online payment and chose
to have the product delivered to his home rather than to pick-up
from the physical store. A few days have passed, and he received his
complete order. After receipt, he checked if the phone and its
accessories were working fine, but the charger was malfunctioning.

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Practice Your Skills

1. If you were the customer, how would you reach out to the

company regarding the problem?

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Practice Your Skills

2. If you were the company and the customer had raised this

concern, how would you respond and resolve the issue?

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Challenge Yourself

Relationship marketing aims to build strong customer relationships.
Therefore, businesses want to make a lasting and positive customer
experience. What kind of customer experience would you like to offer to
these businesses if you are the owner?

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Challenge Yourself

1. Bakery

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Challenge Yourself

2. Clothing store

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Photo Credits

Slide no. 1: Network People Business by Mohamed_hassan is free to use under Pixabay license via Pixabay.

Slide no. 3: Suggestion Advice Business by Mohamed_hassan is free to use under Pixabay license via Pixabay; Rating

Phone Customer by Mohamed_hassan is free to use under Pixabay license via Pixabay.

Slide no. 4: Business Partner Handshake by Megan_Rexazin is free to use under Pixabay license via Pixabay.

Slide no. 5: Question Mark Balloon by geralt is free to use under Pixabay license via Pixabay.

Slide no. 25: Email Newsletter Marketing by ribkhan is free to use under Pixabay license via Pixabay.

Slide no. 26: Laptop Handshake Agreement by Mohamed_hassan is free to use under Pixabay license via Pixabay.

Slide no. 27: Call Customer Support by Mohamed_hassan is free to use under Pixabay license via Pixabay.

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Photo Credits

Slide no. 28: Sales Discounts Shopping by Flsoprani is free to use under Pixabay license via Pixabay.

Slide no. 29: Peer Review Icon by Mcmurryjulie is free to use under Pixabay license via Pixabay.

Slide no. 34: Feedback Survey Questionnaire by Mohamed_hassan is free to use under Pixabay license via Pixabay.

Slide no. 35: Customer Loyalty by Nick Youngson, is licensed under CC BY-SA 3.0 via picpedia.org.

Slide no. 36: Growth Progress Graph by Mediamodifier is free to use under Pixabay license via Pixabay.

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Main, Kelly. “Relationship Marketing: Definition, Cost & Examples.” Fit Small Business. Last modified August 20, 2019.

https://fitsmallbusiness.com/relationship-marketing

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