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Strategic Relationship Marketing Assignment
This Strategic relationship marketing assignment essay has been exploring the relationship marketing strategy strength, weakness ad implications. Even this essay will be undergoing two Austrlaian retail organizations Woolworth and Harvey Norman for understanding the relationship marketing strategy adopted by them within the market. It will be covering various aspects such as marketing commonality, infirm rivalry and competitive advantage of organization in the market.
Relationship Marketing Strength , Weakness and Implications
One of the expensive tasks that an organization undergoes is in relation to acquiring of new consumers towards the business operation. In order to earn the potential of consumer attention, making a convincing pitch and then facilitating sales can be a huge expense for the enterprise. Emmett C. Murphy and Mark A. Murphy states that in order to acquire a consumer, business need to incur five times the cost as much as retention of an existing consumer. This represents a serious dilemma among majority of the enterprise (Gummesson, 2011). It is that whether with a finite resources is it better for the business to attract larger consumer or to retain the ones the already have. In this regard it has been said that if there will be 2% increase in customer retention than it is going to reduce the cost by 10%. For the organization it will be difficult to survive in the market if they are able to constantly retain the customer base.
Majority of the organization separate these two functions and instruct various marketing departments of the business to work in these areas. Even newer consumer of the business are considered as transactional it is because in this case goal of the company is to make them purchase, while for the existing consumer there is a need for laying down various strategies (Palmatier.et.al., 2009). Further, in order to retain the existing consumer business makes use of relationship marketing strategies for continually attracting them for repeat purchase. But, business need to respect both types of consumer as goals of the business is turn every consumer for a repeat purchase.
In order to undertake this aspect business now a days has been undergoing relationship marketing for building appropriate relation with their consumer for making them purchase from the enterprise for a longer period of time. As per Hollensen, (2015) relationship marketing is all about business forming a long term relationship with the consumers. Business rather than trying for a one-time sale instead undergoes relationship marketing for fostering loyalty of their consumer in terms of exemplary products and services. Even this aspect is not only linked with a single product or offer. It is a process of refining the way organization undertakes their activities for maximizing value of the relationship for their customer. Relationship marketing is mainly concerned with the improvement of internal operations. Majority of the consumer leaves the business not because they don’t not like the product rather they are frustrated within the customer service (Christopher.et.al., 2013). Further, if organization is going to streamline their internal operations in order to satisfy their service needs of consumers. Then, under such circumstances customer will be happy in a case when they face problems in the product.
For understanding relationship marketing in practical applicability two of the Australian retail enterprise has been selected that are Woolworths and Harvey Norman. Woolworth’s supermarket is a retail organization carrying out sale of grocery store chain in Australia. The business is seen to be forming a duopoly in the Australian market that together accounts for 80% of Australian market. The Woolworths majorly specializes in selling of groceries that includes vegetables, fruit meat etc and even they have been seen to be selling magazines, DVDs and stationery items (Woolworths Limited, 2012). The Business presently has got 980 stores in Australia and 16 convenience stores. On the other hand, Harvey Norman is also a large Australian retail business. The organization has been dealing in the product such as computer, entertainment, electrical and bedding goods (About Harvey Norman stores,2015). Harvey Norman has got more than 230 stores in Australia and in other countries all together.
Both the enterprise has been undergoing relationship marketing strategy in their operational activities for retaining employees for a longer period of time within the business (Peck.et.al., 2013). With respect to Woolworths it has been seen that their customer are sharp, loyal and afraid for laying down their views if business stores are not able to meet the expectations of their customers. Business has always tried to work hard for building long term relationship with their consumers. Even they have been listening to them and have been consistent in providing appropriate services and products to their customers as per their needs and wants. It has been believed by Woolworth that there is a need for laying down consistent delivery against the brand value in terms of quality, integrity, value for money, sustainability, energy, service and value for money for gaining trust of consumers (Woolworths Holding Limited, 2008). For developing and sustaining loyal customer relationshipbusiness undergoes segmented and targeted direct communications. In order to undertake this aspect business has distributed world magazine to 160000 customers monthly for indicating them the products that are being offered in the stores in exciting and accessible format. Even it has been seen that direct mailing was one of the aspect that Woolworth carried out for their selected customer segments over the last year. Further, organization has implemented customer relationship management system in their functioning. It has allowed business with an ability to analyze data with respect to consumer in terms of their shopping habits and basket size (Halinen, 2012). Even business believes that value in relationship can be enhanced through development of loyalty, credibility and functions such as quality of product.
On the other hand, Harvey Norman consumers undertake greater individual personalized treatment from the company. In return business carries out planning so that they are able to develop long term and cost effective relationship with their each individual customers through relationship marketing. With respect to cost effectiveness business has been offering products to their customers on lower cost when compared with other retailers in the market (Why Harvey Norman has run out of steam, 2014). The implementation of customer relationship management system within the organization has helped business in analyzing the data of consumers in relation to the purchase of product carried out by them. This helps business to overlook the product that being purchased by the consumer a lot and regarding their various shopping habits. Even it has been identified that organization has carried out regular e-mails to the prospective customers in order to update them with appropriate details of the product and its prices available at their stores (Palmatier.et.al., 2008). This has helped Harvey Norman in building appropriate relationship with their customers.
In the market of retail industry it has been identified that Harvey Norman have came up with new strategies over the last year that also included overseas venture and a reluctant e-commerce strategy. It has been believed by them that there is a need for bring the consumer in line with consumer and for meeting the expectations’ of the shareholders (Ashley.et.al., 2011). On the other hand, Woolworth has always tried to be competitive in the retail industry of laying down a big rivalry for the Harvey Norman. Even it has been identified that business Dick Smith Unit is able to achieve enhanced profit in the session of consumer electronic division when compared with Harvey Norman it much on the higher side.
In relation to competitive advantage of Woolworth it can be said that business have been undergoing the aspect for winning the trust of their consumers and increasing their share by offering lower priced food products to their consumers. It will help in improving all aspects of customer in relation to shopping experience. Even it has been believed by the business that they always place their customers at the start while everything they do. Undergoing this strategy is going to help out business in maintaining lower price, laying down compelling offers and greater innovation. The main challenge that business needs to undergo is by keeping lower price and maintaining the overall experience of customer (Woolworths Holding Limited, 2008). Thus, Woolworth will not be beaten on their price and is going to provide better convenience, superior freshness and a more appealing range to their varied customers. Further, the main competitive advantage being laid down by the organization is that business needs to gain the trust of consumer and greater share in their shopping basket with a clear planning and capacity of investment. The key strategy that has been laid down by Woolworths for achieving competitive advantages in the market are offer, growth and efficiency. In case of offer business is going to improve core offer in order to ensure that consumer consider Woolworths first for their purchase. Then for growth business need to innovate in their functioning for meeting the needs of consumer (Lado.et.al., 2008). In terms of efficiency business is going to create further consumer value by organizing success and executing lean retail model.
Further, Harvey Norman has achieved their competitive advantage in the market by focusing on three key aspects that are their digital store, physical store and distribution channel. It has also been said by Gary wheelhouse the CDO of Harvey Norman that their Omni-channel strategy has come a long way for the enterprise, since it has been launched in their e-commerce website for the period of 2011. Even it could not be said that or suggested by anyone that Harvey Norman was one of the business who adopted online aspect on an earlier days. Rather, it would be said that it was one of the last competitive advantage strategy being adopted by the enterprise as said by Gary wheelhouse. The fact was that organization was requiring a website that gets connected with their 180 stores (Why Harvey Norman has run out of steam, 2014). While Harvey Norman started their operations using online channel the major aspect which they wanted to bring was retail option with the online channel. In such a manner that it enhances the ability of customer to interact with their salespeople using live chat. It has also been seen that one of the primary reason customers going to the stores is that to interact with people. This has been understood by the business that there is a need for lying down live chat that was something that is required to be done. For improving the experience of customer online business has laid down their major focus towards customer journey mapping. It involves use of wealth information from both consumer service and social media (Ashley.et.al., 2011). This was seen to be a case under which consumer of Harvey Norman will be undergoing click and collect option, in which they are going to buy their item through website but will be collecting it from the store.
From the essay it has been found that in order to acquire a consumer, business need to incur five times the cost as much as retention of an existing consumer. Even newer consumer of the business are considered as transactional it is because in this case goal of the company is to make them purchase, while for the existing consumer there is a need for laying down various strategies. Further, in order to retain the existing consumer business makes use of relationship marketing strategy for continually attracting them for repeat purchase. It has been identified that both Woolworth and Harvey Norman has been undergoing relationship marketing strategy in their operational activities for retaining employees for a longer period of time within the business. It has been believed by Woolworth that there is a need for laying down consistent delivery against the brand value in terms of quality, integrity, value for money, sustainability, energy, service and value for money for gaining trust of consumers. Even it has been seen that direct mailing was one of the aspect that Woolworth carried out for their selected customer segments over the last year. Even Harvey Norman consumers undertake greater individual personalized treatment from the company. In return business carries out planning so that they are able to develop long term and cost effective relationship with their each individual customers through relationship marketing.