BUSINESS MARKETING

Customer Relationship
BUSINESS MARKETING

Paano magkaroon
ng “suki”?
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Relational Marketing

Simpy selling a product to customers is not a good marketing.

The customer, which can be classified into different types are influenced by :
 external factors
 their personal needs and wants
 their decision to purchase the product or service

In marketing, there must always be customer satisfaction, no

buyer's remorse, and consitsent repeat purchases
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The concept of “suki” or

continuity marketing
reflects customer loyalty--
a reliable way of
evaluationg customer's
satifactio.
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Suki System in the Philippines

• In the Philippines there is a special business relationship referred to as
’suki’ in the Filipino language.

• According to Ronald (1991), ’in the commercial context, suki

relationships (market- exchange partnerships) may develop between two
people who agree to become regular customer and supplier. In the
marketplace, Filipinos will regularly buy from certain specific suppliers
who will give them, in return, reduced prices, good quality, and, often,
credit.’
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Suki System in the Philippines

• When a buyer and a vendor enter a suki arrangement, they become each
other’s suki and will refer to each other as suki.

• More vividly this means that additional value is created for the vendor, by
virtue of the suki arrangement, because of guaranteed sales; which are
especially important to vendors of perishable goods.

• Furthermore the vendorcan expect free word of mouth advertising by the

suki.
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Suki System in the Philippines

• The buyer can also expect to spend less time at the market because of a
diminished need to look for the best quality productat the most
competitive prices and can also expect special and personal treatment
from thesuki (having product put aside for the buyer or allowing the suki
to skip to the head of the line).
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Suki System in the Philippines

• At the heart of the suki system lies a Filipino social norm (or value) called
’utang na loob’ which can be translated as ’a debt of gratitude’ into
English or into ’the norm of reciprocity’ in psychological terms.

• The specificity of the suki concept to Philippine society,or thoughts on

how well it generalizes to other societies with different sets of norms
cannot be fully covered in the scope of this work.
BUSINESS MARKETING

Suki System in the Philippines

• However, since ’utang na loob’ is basically reciprocity, it is reasonable to

assume that the suki concept will generalize to any situation where the
norm of reciprocity is observed by the negotiating parties, in a manner
proportional to the pressure on the parties involved to conform to the
norm of reciprocity
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Techniques derived from the suki system

Dagdag

• Dagdag literally means to add, supplement or increase.

• The technique consists of actively asking for something extra in order to

’sweeten a deal’.

• Dagdag consists of the buyer actively asking for ’something on top’ to seal
a deal that hasbasically already been agreed to by both parties; instead of
being a concession or an apparent
• concession made by the seller to increase the likelihood of a purchase (as
is the case with the that’s-not-all technique).
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Techniques derived from the suki system

Sa susunod.

• When used as a negotiation technique sa susunod could take the form of

greater concessions made for the next deal by the party that promised sa
susunod; in return for greater concessions made on the current deal by the
party that agrees to have its needs met the next time around.

• This level of trust is built up between parties over the course of time and is
also influenced by the parties’ marketplace reputations and circumstances.
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Techniques derived from the suki system

Sa susunod.

• For example, if a long standing suki asks for monetary concessions

because baby food must be purchased, the concession is usually given
and reciprocated ’sa susunod’.

• Thus it can be argued that mutual trust between sukis allows the mere
promise of future business to outweigh both immediate monetary gains
and the risk of potential losses
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The suki concept as a negotiation template

• Since suki relationships are quite personal and entail a large amount of
trust, those factors should be increased in order to achieve sukiike
outcomes.

• To make relationships more personal, several rapport building techniques

such as mirroring or name and word repetition or even regular small talk
can be used tospeed up the development of a personal relationship
between negotiators.

• Building trusttakes more time but following words with actions and
demonstrating honesty and integrity are sure ways to speed things up.
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• Some Philippine companies today offer so called suki cards, which are
usually just generic customer loyalty cards, in order to capitalize on
Filipinos’ positive associations with the suki concept, to feign a more
personal and loyal relationship with their customers..
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Suki Marketing
Purchase

%Buying

%Repeat Purchase

%Trial

Time
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Suki Marketing

• As the trial goes up for a new product or service, a decent level of repeat
purchase of product or service can be expected.

• Even if the new trial goes down, the total number of consumers buying the
product can be expected to increase, since many of them have already
tried using the product or service in the past.

• The repeat purchase also assumes consistency in the marketing mix

elements.
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Suki Marketing

• For example, if a coupon with huge discount is used for trial, the repeat
purchase level may not have the same effect when the price goes uo to its
normal level.
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Relational marketing is not just about good marketing.

It will not work if the product or service is not
relevant to the consumers.
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Kodak sold some 85%of all

photo papers worldwide, and
then digital cameras took
over, then here comes mobile
devices with good qualify of
camera
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Digitalization of business has disrupted other businesses.

Airbnb is the biggest hotel company in

the world wihout owning a single
property
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Many tavel agencies have gone out of business because of

self-service , online booking of air tickets and hotels ,
bypassing middlemen
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Customer Satisfaction and Loyalty

What is the difference between

customer satisfaction and customer
loyalty? What is their relationshi?
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Customer Satisfaction and Loyalty

Customer satisfaction comes after trial of the product/

service, while customer loyalty comes after the repeat
purchase.

While customer satisfaction is a prerequisite for customer

loyalty, it is not guaranteed., as competition may also try to
offer value to the same customers.
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Customer Satisfaction and Loyalty Indicators

A good indicator of customer satisfaction, aside from repeat

purchase, is their willingness to buy again as well as to
recommend to others.

A good indicator for customer loyalty is the unwillingness to

switch brands when there is an out-of-stock situtaion, instead
of changing brands, loyal customers would rather changes
stores.
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Customer Satisfaction and Loyalty Indicators

Examples are infant formulas

and follow-on-milwith some
85% customer loyalty among
mothers in the Philippines
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Customer Service
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Customer Service: Treating Customers How They Expect

to be Treated

Customer service is the act of taking care of the

customer's needs by providing and delivering
professional, helpful, high quality service and assistance
before, during, and after the customer's requirements are
met.
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Customer Service: Treating Customers How They Expect

to be Treated

Customer service is meeting the needs and

desires of any customer.
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For example, Giordano, a HongKOng based retail chain stores in the

Philippines, found that 800% of their customers do not like to be serviced
by sales assistants in their store. They would rather shop alone.
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Companies have often used and abused the word “ customer service” as
their competitive advantage in order to attain lifetime customer
relationship.

They would give general statemets and say “ We give better service” or
“Service is our philosophy”, without really giving thourght about the
specifiv type of exceptional customer service they would be willing to
give.

Companies must not be too eager to give customer service when it may
not b needed or wanted.
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It is also imperative that a firm understands te costs associated with

satisfying needs and wants.

Otherwise, simply satisfying all customers' needs and wants without due
consideration to costs will result in losing operations
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Examples of Understanding Costs to Satisfy Needs and Wants

In the airline industry, tourists would always want

bigger legroom, meals, and more luggage
accommodation even if they don't always need
them. Not many of them however, would be
willing to pay a higher price associated with
upgraded features.

Cebu Pacific Air offers their passengers to pay

only for additional features they would need.
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Examples of Understanding Costs to Satisfy Needs and Wants

In the price sensitive fast food industry, we

see value meals being offered for P49.00 .
P99.00, etc. for many years despite rising
expenses.

Fast food companies have to either look for

new sources of supplies or negotitae with
existig suppliers to lower their acquisition
cost.
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Therefore,

With the given examples, it does not make sense to target 100% customer
satisfaction because a firm must take the cost of satisfying into consideration.

A 100% customer satisfaction rate that will result to the firm losing money is not
a sustainable idea.

Remember, marketing is the interface between the company and

its chosen market, and not about satisfying customers alone.
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A company must balance between the need for market shares and
their profit equation.

A firm can lose profit to gain market share in the short run,but it
risks an unknown profit potential in the future, especially in the
highly unpredictable environment we face today.
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Examples of balancing market shares and profit equations:

Amazon. com was unproftable at a time.

Then they used the online portal to
expand from selling books to toys to
consumer electronics. It has innivated
and expanded beyond targeting
consumers by allowing its platform to
be used by other businesses
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Examples of balancing market shares and profit equations:

Most phone manufacturers surround the

market with several phone models to gain
more market shares.; they do this at the
expense of profitability.

On the other hand, Apple's iphone has chosen

to focus on its few models with regular
upgrades and this has enabled them to
produce their products efficiently and more
profitably.
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Characteristics of Good Customer

Service
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Characteristics of Good Customer Service

Some characteristics of good customer service include:

• Promptness:

Promises for delivery of products must be on time.

Delays and cancellations of products should be avoided.

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Characteristics of Good Customer Service

Politeness:

• Politeness is almost a lost art.

• Saying 'hello,' 'good afternoon,' 'sir,' and 'thank you very much'
are a part of good customer service.

• For any business, using good manners is appropriate whether the

customer makes a purchase or not.
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Characteristics of Good Customer Service

• Professionalism:

All customers should be treated professionally, which means the

use of competence or skill expected of the professional.

Professionalism shows the customer they're cared for.

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Characteristics of Good Customer Service

• Personalization:

Using the customer's nameis very effective in producing loyalty.

Customers like the idea that whom they do business with knows
them on a personal level.
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Four Brand Benefits

1. Functional Benefit
2. Emotional Benefit
3. Social Benefit
4. Economic Benefit
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In order to establish long-term relationship with their customers,

firms must create value based on several benefits since customers'
needs are muti-faceted..

Contrary to popular belief, offering the lowest price may not

exactly be the correct route to attain loyal customers as there are 4
benefits customers look for.
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1. Functional Benefit

A good functional benefit offers a compelling reason to switch

preference.

This is done by understanding and contextualizing pain points of

consumers and creating feautures or attributes that remove those
pain points.
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Examples:

Omron launched and electronic blood

pressure monitor and has since sold millions
of units even if it's more expensive than the
stethoscope.

Omron targeted housewives and those with

medical conditions who want to be
empowered to know their blood pressure
reading without depending on doctors.
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Examples:

San Miguel beer has lemon and apple flavors

to attract those who do not like the bitter
taste of beer to attract new category users.
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2. Emotional Benefit

The emotonal benefit distinguishes a marketing company from a

mere trading company because of the effort to consider positive
feelings provided to the customer, and to create an emotional
connection with its customers
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Examples:

In comparing the same product brought as a

guft in two department stores, the one with
Rustan's gift wrapper imparts a meaning that
the gift recipient is important to the giver
because of its premium, association,
something that the other department stores
may not be able to communicate as well.
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Examples:

Adding fragrance to clothes make users

percceive clothes were whiter even when
they were not, hence, the manufacturing of a
detergent with added fragrance
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3. Social Benefit

The social benefit takes into a consideration how customers want to be

perceived by others when using a product or service
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Examples:

Consider different brands of vehicles that

can bring passengers from point A to
Point B; using a luxury car like BMW can
make the driver or passenger perceived to
be successful than those riding average
car brands
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Examples:

Holding a cup of Starbucks coffee offers

the consumers a sophisticated self-image
than holding a cup of low-cost coffee
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4. Economic Benefit

To the consumers, the right price is no more than the perceived

value, with the difference between customer value and customer
cost known as surplus.

The higher the total benefits, the higher the price can command.
The higher the surplus, the more compelling the price will be.

The exception is if the price is too low, it may create doubt for the
quality of the product.
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4. Economic Benefit

Total customer value includes not just product and service, but also
the brand image and personnel value; while total customer cost
includes not just the amount paid, but also the time and energy
spent.
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Examples:

Buffet meals offered by restaurant chains

now include cross-over features among
company-owned resturants located beside
each other.
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Examples:
Senior citizens may prefer smaller community-type malls like Waltermart and City
Malls for better convenience, as big-box stores (e.g hypermarket) and large malls entail
a lot of effort for them to exert before getting to buy what they really needed.
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Four Brand Benefits

Benefit Question
Functional Why should I buy your product or
service?
Emotional How will I feel when I wond and
use the product or service?
Social How will others perceive me when
I use your product or service?
Economic Why is your price offered the way
it is?
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Relationship Development
Strategies
1, Technology
2. Value Chain Excellence
3. Frontline Excellence
4. Account Segmentation
5. Co-opetition: Alliances Among Competition
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1. Technology

The Microsoft HoloLens headset can now be used to not just

differentiate and airline's service but to also create a unique
customer experience.

Air New Zealand launched the concept in May 2017, allowing

flight attendants to identify passengers via facial recognition,
detecting the passenger's mood, know their allergies, assess the
details of the destination and the time gap from their last beverage,
in order to customize their service to specific needs.
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2. Value Chain Excellence

Employees iin any company must realize that customer satisfaction

is the job of everybody, and that a chain is as strong as its weakest
link.

They must know what and how to b a solution provied for the
customers by meeting, if not exceeding the customer's expectations.
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2. Value Chain Excellence

However, having the willingness to serve customer, especially

internal ones, is the more difficult part.

Departmental processes often reveal their ugly heads when the

external customers start complaining about a lack of responsiveness
or unacceptable delays.
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Value chain management is a coordinating management process in

which all of the activities involved in delivering customer value
satisfaction are integrated such that customer satisfaction is
maximized and the objectives of the stakeholders involved (the
suppliers of
activities, processes, facilitating services, etc.) are optimized such
that no preferable solution may
be found.
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Customer Satsfaction Guide Matching Buyer and Seller Process

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In the above example, the roles of each

department in delivering service is clearly
linked, and any delay or failure to perform the
required task by one or more departments.
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Customer service can be expanded into three (3) parts to compromise a full-
cycle instead of limiting it to the usual complaint, inquiry, or claim:

1. Pre-transaction- marketing, distribution points, demand forecasting

2. Transaction-order processing, credit, billing, delivery, product, product

manual, installation.

3. Post-transaction-warranty, collection, inquiries, after sales service, parts,

availability
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2Is and 5Cs

There is a fundamental relationship between price and service--the higher the
price is paid, the higher levels of service are expected. If the company is
unable to fulfill these expectations, customer dissatisfaction would occur.

2Is : Ignoring & Ignorance (Bad Customer Service

5Cs : Choice Coordination, Commitment, Competencies, and
Communication
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3. Frontline Excellence

Happy and empowered employees make happy customers, so there is

a need to look into internal people, processes, policies, amd practices
while formulating plans for external customers.

Afterall, the internal customers will be the ones delivering the

service and executing the plan to external customers.
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3. Frontline Excellence

Service is an attitude. Ask:

“Are employees simply going through the motion of having a job

done or are they committed to satisfying the needs and wants of their
customers
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3. Frontline Excellence

Question: How do we have happy and caring employees?

Answer:
• Start from hiring the right peorple according to competencies and
behavior specified, then reward and recognize them abundantly.
• Empower them to decide, at least within defined authority level,
in order to resolve customers' dissatisfaction cases quickly and
promote customer retention,loyalty, and emotional connection
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3. Frontline Excellence
Example of frontline excellence in a service-oriented company

The human resource department of

companies like Bistro Group
(Italianni', TGIF, Fish & Co, etc) have
devised interesting ways to uncover
unpleasant skills of their staff, such as
asking job applicants while doing the
jump rope or hula-hoop.
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3.1 Underpromis-Overdeliver
If there is one common rule in marketing, selling, and customer sevice, it is
never to overpromise.

A hospital should not claim “Patient First”, if their practices are

inconsistent. A dimsum restaurant should not use the “World's Best
Dimsum” if their products leave much to be desired.

Never overpromise ! You might end up having nothing.

It is better to underpromise and overdeliver than overpromise and
undeliver.
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Let's examine further some of the signicant portions of customer

service
Pre-Transaction: Marketing & Sales

Firms must be structured in a way that is inconsistent with their

strategy. Structure (or organizational structure) must come after
strategy, and not the other way around.

The firm's policies must be marketing-oriented and not self-oriented

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Pre-Transaction: Marketing & Sales

For instance, the advertising budget can be formulated on the basis

of target awareness level to attain a market leadership position,
instead of the company's finance manager unilaterally allocating an
advertising budget without any basis.
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Pre-Transaction: Order Processing

The entry of an order must be accurate and prompt, considering the

firm's many internal needs for data gathering and analysis.

Product availability must always be assured,as there can be no

transaction without any product sold.

Quality of available products must also be assured. With accurate

projection of demand, production can be scheduled to optimize
inventory levels.
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Transaction: Order Processing

Distribution points can be arranged and maintained in a way that

responds to the customers' orders fast enough to meed deadlines.
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Transaction: Delivery

The now-famous “free delivery of food from fast food stalls and
restaurants' changing consumer-dining habits .

Questions such as “Are deliveries made on time?” and “Did the

product arrive in a satisfactory condition? must be monitored
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Example of Promising Delivery:

Pizza Hut pioneered the promise to give

the next pizza free if delivery within 30
minutes is not achieved from the time
the order was taken.

They called this their “Hate Late”

insightful campaign
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Transaction: Billing and Collection

A sale is not a salue until it's collected.

Are billings accurate and prompt?
Are collectors courteous?

Remember that customers are parting with their money and they
want to feel important having given business to firm