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Lecture 6
Empirical Marketing
| Question | Answer |
|---|---|
| What is customer relationship management? | The managerially relevant, organization wide, customer-focused application of RM, using IT to achieve performance objectives |
| What trends are increasing need for effectiveness of RM strategies? | - Shift to service economies - increase in use of marketing channels - increased global competition - ' me too' offerings and faster 'product' commoditization |
| What are the effects of RM on gratitude? | - Enhanced returns - Customer trust - Customer commitment |
| What is affective and calculative commitment? | Affective commitment: Want to remain member of supplier network because enjoy relationship with them Calculative commitment: To expensive to terminate relationship with supplier. |
| What are the 4 characteristics of relationship equity? | 1. Relational loyalty 2. Referrals or WOM 3. Empathetic behaviors 4. Cooperative behaviors does not directly affect financial performance) |
| What is relational loyalty? | The likelihood that the customer provides the seller benefits due to their relational attitudes and ties - customers perceive less risk dealing with trusted partners, minimizes cost - loyalty is very determinant of a firms success |
| What is referrals ? | - likelihood of a customer commenting positively about seller to others - relational bonds drive referrals - risk reputation by advocating a seller to another potential customer |
| What are empathetic behaviors? | Having a greater likelihood to be influenced by perceptions of the sellers - customers in strong relationship may attribute failures to external causes - Their sensitivity to the sellers difficulties may stop them from imposing price reduction process |
| What are cooperative behaviors? | - coordinated, complementary actions between partners to achieve a mutual goal - creates value beyond what each firm can do, increases customers flexibility and adaptiveness to requests - encourages parties to remain in their relationship |
| Describe relationship dynamics and lifecycle stage | -Exploratory: limited confidence + trust but willing to try relationship -Growth: if experience is positive, induces trust - Maturity: if continued, partners get benefits + greater interdependence -Decline: response to specific events/passive neglect |
| What is the process of building relationship equity? | 1. develop strong foundation that supports relationship building 2. implement RM loyalty programs targeted at specific customer groups, designed to generate specific relational outcomes across the firms customer portfolio |
| Describe what developing a strong foundation does | - Personnel that interact w customers are critical for strong relationships - Dedicate RM investments to training + motivating employees - more frequency + quality of communication w customers - don't do without a process for dealing with problems |
| Describe what implementing targeted RM and loyalty programs does | - Social RM: use social engagements to convey customers special status - Structural RM: provides investments customers may not make themselves - Financial RM: provide economic benefits inform of discounts, free shipping, extended payment return, |
| What are the examples of relationship activities? | -conflict -seller expertise -communication -relationship investments -similarities -relationship benefits -dependence on seller -interaction frequency -relationship duration |
| How are relationships maintained? | - negative event can overwhelm all positive events - long term RM success depends more on preventing the bad than promoting the good - companies sometime generate unfairness - when unfairness is noticed RM and loyalty needs to be revised |
| What are the 3 key elements in firms overall performance? | 1. RM reward elements 2. RM delivery 3. Customer portfolio |
| Describe measuring relationship equity | - measure effectiveness of RM efforts should be assessed regularly to support learning and refinement - clear definition of target -RM resulting in longer relationships is a good proxy for strength or equity -measuring commitment, trust, clv |
| Does relationship marketing build customer relational equity? | Relationship equity refers to the aggregation of relational assets and liabilities, that add to or subtract from the value provided by the firm's offering |
| Define the key relational elements | 1)Breadth: number of relational ties -more ties= more info= less risk with contact lost 2)Quality: trust, commitment, gratitude with customers -higher quality= higher value 3)Composition: diversity of ties - higher diversity = higher chance of impact |
| What is the multiple regression analysis? | Captures the statistical association between focal marketing outcome of interest and several marketing intervention that simultaneously may affect the focal outcome |
| How does multiple regression analysis work? | 1. Discerns if a particular marketing intervention influences outcome 2. Learn the sign of the relationship 3. Helps researchers compare the relative strength of multiple marketing interventions 4. Can control confounds |
| What is the effect of RM on relational equity? | - Only social + financial RM are significant - RM's have a positive impact - Financial RM is more effective that social RM - Important to control for location and number of employees |
| Describe discrete choice models | -Linear regression is a bad fit, use discrete choice model - continue=0 if relationship ends and 1= if it continues - assume latent variable z that is continuous and limtied value (sigma) - p(continue=1)=[(e^2)/(1+(e^2))] |
| What are other empirical approaches for relationship marketing? | - Customer response depends on whether AI/human agent delivers good or bad news - Customers respond better when dealing with AI - AI lack selfishness in case an offer favors agent - Lack benevolent intentions in case of an offer favors the customer |
Created by:
janasultan
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