In general Relationship marketing is company focusing on existing customer base and building long lasting relationships with them and merely trying to attract new customers to organization. (To read more about introduction to relationship marketing click here .)
Going beyond the general application of relationship marketing companies currently apply relationship marketing principals to other areas of the business. Extended applications relationship marketing is explained below. This is also known as “Six Markets Model” of relationship marketing.
Customer Markets
This is where the final consumer of the product is identified and building long lasting relationships with them to achieve long term profitability rather than focusing on single transactions. Final customer has to be made satisfied with the market offering as they directly influence the sales level and profitability of the of the organization.
Referral Markets
Referral market is contained of people and institutions who refer the product of the organization to the customers. In other words it refers to ways in which the positive publicity is achieved. Referral market may include existing satisfied customer base of the firm who spread positive word of mouth or it could be paid people/institutions who refer the customers to the firm. Building effective and long lasting relationships with referral markets increase the market share and profit level of the organization by attracting new sales to the organization.
Supplier Markets
Relationship marketing is not only about building effective relationships with final consumer. It encourages firms to build effective long lasting relationships with suppliers in a form of partnership to serve final consumer better than competitors. In other words, building effective and long term relationships with suppliers provide the opportunity to obtain material at a cheaper rate and better quality which will help in delivering better value to the customer by providing quality goods at lower price. If the supplier fails to deliver goods on time/ fails to achieve quality target it will affect the value delivered to the final consumer. Therefore firms are adviced to build long lasting relationship with suppliers by building JIT productions systems, ERP systems and so on.
Recruitment Markets
This refers to entities and people who are engaged in recruiting human resources to the organization. To deliver better customer value than competitors firm need to have a better human resource pool and if the company fails to obtain better human resources from the market competitors will surely recruit resulting in poor quality goods/services produced by the firm. Therefore, to acquire the best human resources from recruitment market firm needs to build good relationships with HR agencies and prospective employees while maintaining a good public image for the company.
Influence Markets
Influence market refers to people/institutions who exercise influence over the purchase decisions of the customer. Influence markets may have positive or negative influence on the purchase so that company needs to encourage positive purchase influences while reducing negative purchase influences. If a consumer purchases a garment product as it is worn by a celebrity, the above mentioned celebrity acts as an influencer for the purchase.
Internal Markets
This is where the departments within the organizations serve each other while serving final consumer at the end. Every department becomes a internal customer for the other department they should serve the internal customers first to serve the external customers better. Inter departmental relationships has to be strengthened in order to deliver better customer value to external customers.
