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Unformatted text preview: ethods of
payment that increase the likelihood of purchase are strategies used for this pricing objective.
KEY: CB&E Model Pricing OBJ: 12-4 TOP: AACSB MSC: BLOOMS Synthesis 9. Relationship marketing can be practiced at three levels, with each level adding a new kind of
bond with the customer. Name and describe each of these levels, using a legal service to illustrate
LEVEL 1: FINANCIAL BONDS. This level of relationship marketing is based mainly on pricing
incentives that encourage customers to continue doing business with a firm. A legal service could
offer discounts to long-term customers or to customers who use the service frequently or
LEVEL 2: SOCIAL BONDS. This level also uses pricing incentives but additionally seeks to
build social bonds with customers. This means staying in touch with clients, learning about their
needs, and designing the service to meet those needs. For example, the legal service could send
thank-you cards or call clients to see if they were satisfied and ask about other desired services.
LEVEL 3: STRUCTURAL BONDS. This level of relationship marketing uses financial and
social bonds but adds structural bonds. Structural bonds are developed by building value-added
services into the service that are not readily available from other firms. This might include
exclusive after-hours phone numbers for special clients; transportation services to and from legal
hearings or the legal offices; fax, computer, or express document services; or permanent office
space reserved for special clients’ use.
KEY: CB&E Model Strategy OBJ: 12-5 TOP: AACSB MSC: BLOOMS Synthesis 10. What is the difference between internal marketing and relationship marketing? Why are these
types of marketing important to service marketing?
INTERNAL MARKETING means treating employees as customers and developing systems and
benefits that satisfy their needs. A firm that engages in internal marketing practices activities such
as competing for talent, offering a vision, training employees, stressing teamwork, giving employees more freedom to make decisions, measuring and rewarding quality, and knowing
employees’ needs. The quality of a firm’s employees is an important part of service quality.
Employees who like their jobs and are happy with their company are more likely to deliver highquality service. Internal marketing provides a strong foundation for the external marketing of
RELATIONSHIP MARKETING is a means for attracting, developing, and retaining customer
relationships. Satisfied customers who are loyal will buy additional services from the firm and are
unlikely to switch to a competitor. Satisfied customers are also likely to engage in positive wordof-mouth communications, thereby bringing in new customers. Because many services involve a
process of continuous interaction between the service organization and the customer, relationship
marketing is a...
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- Fall '13