Transaction-based Marketing Vs. Relationship Marketing


As marketing has entered the 21st Century, a significant change is taking place in the way companies interact with customers. The traditional view of marketing as a simple exchange process—a concept that might be termed transaction-based marketing—is being replaced by a different, longer-term approach.

Traditional marketing strategies focused on attracting consumers. The goal was to identify prospects, convert them to customers, and complete sales transactions. But today’s marketers realize that, although it remains important, attracting new customers is truly an intermediate step in the marketing process. Marketing efforts must focus on establishing and maintaining mutually beneficial relationships with existing customers. These efforts must expand to include suppliers and employees, as well.

The concept, called relationship marketing, refers to the development, growth, and maintenance of long-term, cost-effective exchange relationships with individual customers, suppliers, employees, and other partners for mutual benefits. It broaches the scope of external marketing relationships to include suppliers, customers, and referral sources. In relationship marketing, the term customer takes on a new meaning. Employees serve customers within an organization as well as outside it; individual employees and their departments are customers of and suppliers to one another. They must apply the same high standards of customer satisfaction to inter-departmental relationships as they do to external customer relationships. Relationship marketing recognizes the critical importance of internal marketing to the success of external marketing plans. Programs that improve customer service inside a company also raise productivity and staff morale, resulting in better customer relationships outside the firm.

Relationship marketing gives a company new opportunities to gain a competitive edge by moving customers up a loyalty hierarchy from new customers to regular purchasers, then to loyal supporters of the company and its goods and services, and finally to advocates who not only buy the  company’s products but recommend them to others. by converting indifferent customers into loyal ones, companies generate repeat sales. The cost of maintaining existing customers is far below the cost of finding new ones, and these loyal customers are profitable ones.

Effective relationship marketing relies heavily on information technologies such as computer databases that record customers’ tastes, price preferences, and lifestyles alongwith the increase of electronic communications. This technology helps companies become one-to-one marketers that gather customer-specific information and provide individually customized goods and services. The firms target their marketing programs to appropriate groups, rather than relying on mass-marketing campaigns. Companies who study their customers’ preferences and react accordingly gain distinct competitive advantages.

Firms in service industry, from retailers to hotels to airlines, are among the leaders in relationship marketing. Their staff members have many opportunities to meet customers personally and build loyalty and repeat business. Rewards for frequent buyers of a firm’s goods or services, such as hotel programs that reward frequent visitors with free room stays and other travel documents, are another form of relationship marketing.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Get them Pregnant!


When a company expresses genuine interest in your idea, product, or concept, start to get them a little bit pregnant. Collect—aggressively solicit—their opinions on the deal and allow these to shape your idea. “We were wondering such-and-such:” “Would it be better to emphasize this or that?”; We’d like to know your feelings on the following.”

It is better to solicit this kind of information in a letter, which requires more thought to answer. For the same reason it is also better to avoid questions that can be answered yes or no.

There is nothing easier than selling someone his or her “own” idea, which is what this becomes.

If you can get enough answers on the details, people will commit themselves to the larger deal long before they are actually aware of it.

Similarly, you should determine mutually agreeable objectives beforehand which can be precisely defined and clearly stated. Any proposal, concept, or idea which directly responds to those objectives is halfway to being sold.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Forward Contracts


Forward contracts are similar to futures contracts in that they are agreements to buy and sell an asset at a certain time in the future for a certain price. However, unlike futures contracts, they are not traded on an exchange. They are private agreements between two financial institutions or between a financial institution and one of its corporate clients.

 One of the parties to a forward contract assumes a long position and agrees to buy assets at a certain specified date for a certain price. The other party assumes a short position and agrees to sell the asset on the same date for the same price. Forward contracts do not have to conform to the standards of a particular exchange. The delivery date in the contract can be any date mutually convenient to the two parties. Usually, in forward contracts, a single delivery date is specified, whereas in futures contract, there is a range of possible delivery dates.

 Forward contracts are not marked to market daily like futures contracts. The two parties contract to settle up on the specified delivery date. Whereas most futures contracts are closed out prior to delivery, most forward contracts do lead to delivery of the physical asset or to final settlement in cash

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Just about Joint Ventures


Joint ventures (JV) are the waves of the future. There is hardly a Fortune 500 company, active overseas, that does not have at least one JV.

JV represents a higher risk alternative because it requires various levels of direct investment.  A JV involves sharing risks to accomplish mutual enterprise. JVs, incidentally, are the next most common form of entry once a firm moves beyond the exporting stage to a more regular overseas involvement.

JVs provide a mutually beneficial alternative to domestic and foreign businesses to join forces. For both parties, the ventures are a means to share both capital and risk and make use of each other’s technical strength.

JVs, however, are not an unmixed blessing. The major problem in managining joint ventures stems from one cause: there is more than one partner. With patience and flexibility on the part of both partners, JVs can be managed successfully. But one of the partners must play the key, dominant role to steer the business to success.

Widespread interest in JVs is related to:

  1. Seeking market opportunities.
  2. Dealing with rising economic nationalism.
  3. Preempting raw materials.
  4. Risk sharing.
  5. Developing an export base.
  6. Selling technology.

Even a JV with a well-qualified majority foreign partner may provide significant advantages, such as:

  1. Participation in income and growth.
  2. Low cash requirements.
  3. Preferred treatment for the venture.
  4. Easier access to a market and to market information.
  5. Less drain on a company’s managerial resources.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight