1© IRWIN a Times Mirror Higher Education Group, Inc., company 1997

Relationship Marketing,

Information Technology,

and Forecasting

2© IRWIN a Times Mirror Higher Education Group, Inc., company 1997

Definition of relationship marketing

RELATIONSHIP MARKETING RELATIONSHIP MARKETING

is an organization’s effort to develop a

long-term, cost-effective link with

individual customers for mutual benefit.

3© IRWIN a Times Mirror Higher Education Group, Inc., company 1997

Relationship marketing builds on information technology and micromarketing to develop links

with individual customers

• Relationship Marketing Goal is to have the organizationdevelop a long-term, cost-effective individual relationshipwith customers.

• Database Marketing Goal is to provide the organization with continuously updated demographic, media and consumption information about households and individuals.

• Information technology Goal is to design and manage thecomputer and communications system of a firm to support its micromarketingand relationship marketing actions.

4© IRWIN a Times Mirror Higher Education Group, Inc., company 1997

Factors that makes relationship marketing

necessary

More demanding consumers• “Personalized” offerings• High quality and value• Good customer service• Reduced “loyalty”

More demanding consumers• “Personalized” offerings• High quality and value• Good customer service• Reduced “loyalty”

Excessive business costs• New product failure• Poor quality• Costly distribution• Misdirected promotional

efforts

Excessive business costs• New product failure• Poor quality• Costly distribution• Misdirected promotional

efforts

Marketing manager andinformation technology

Marketing manager andinformation technology

Note:Blue boxes show consumer and business factors that have made relationship marketing necessary, while green boxes show the data and data collection methods that have made relationship marketing possible.

5© IRWIN a Times Mirror Higher Education Group, Inc., company 1997

Customers

Relationships

Environmental Forces

Shareholders(owners)

The OrganizationSociety Society

Suppliers

Social RegulatoryTechnologicalEconomic Competitive

OtherOrganizations

Alliances

Partnerships

Ownership

An organization’s marketing department relates to many people, groups, and forces

HumanResources

Researchand

Development

InformationSystems

Manufacturing

Finance Marketing

Management

6© IRWIN a Times Mirror Higher Education Group, Inc., company 1997

Forecasting Approaches

Top-down forecast• Take aggregate• Subdivide into components

Top-down forecast• Take aggregate• Subdivide into components

Buildup forecast• Sum individual components• Derive at total forecast

Buildup forecast• Sum individual components• Derive at total forecast