Chapter 02

Topic: Classic Market

Relationship
 The classic dyad – the relationship between the
supplier and the customer
The relationship between the one who sells something,
the supplier, and the one who buys something, the
customer, forms the classic dyad of marketing, a two-
party relationship. It is the parent relationship of
marketing. Customer usually means external customer .
the notion of the internal customer has become widely
accepted and is defined as one of the nano relationships
(R25). The supplier can be represented by a
salesperson. In personal selling there is usually a
faceto-face relationship like in a store. It can also be a
relationship via telephone, letter, email, the internet or
other media. In individual market relationships a
customer interacts with a salesperson or another
employee of the selling organization.
 The classic triad – the drama of the customer–
supplier– competitor triangle
A cornerstone of the market economy is the presence of several
suppliers in each market. Competition arises, consisting of a triad
of players: the customer , the customer ’ s present supplier and
competing suppliers . The treatment of competition in this section
assumes an RM perspective; it is not an orthodox overview. There
is extensive literature on competition. 13 At the same time as the
interest for RM and collaboration is growing, the interest in
competition is growing. The well-established recommendation to
create a sustainable competitive advantage through product
differentiation, lowest cost or niche marketing is being
challenged, and so is market share as a driver of growth and profit.
 The classic network – distribution
 Physical distribution is the most obvious network in marketing; it
constitutes a classic network. The common designations today are
supply chain , channel management and logistics . In RM, a network
view is preferable to sequential and linear thinking that the words
chain and channel indicate. In line with RM and many-to-many
marketing I will therefore talk about supply networks . 28 These
distribution networks are numerous, complex and interwoven.
Sometimes they are efficient and fast, following the shortest route to
market. Sometimes they are slow, inefficient and replete with
detours and broken chains. As consumers we are surrounded by
them. We are unpaid workers in the distribution networks when we
shop for food, walk to the postbox with a letter or drive our car to
work.
Topic
Special Market Relationship (4R-6R)
 Special market relationships
R4: Relationships via full-time marketers (FTMs) and part-time
marketers (PTMs):
Those who work in the marketing and sales departments – the
FTMs – are professional relationship makers. All others, who
perform other main functions but yet influence customer relation-
ships directly or indirectly, are PTMs. There are also contributing
FTMs and PTMs outside the organization.
R5: the service encounter-interaction between the customer and the
service provider:
Production and delivery of services involve the customer in an
interactive relationship with the service provider, often referred to
as the moment of truth.

R6: The many- headed customer and the many-headed supplier:

Marketing to other organizations – industrial marketing or business
marketing – often means contacts between many individuals from
the supplier’s and the customer’s organization.
 Topic
(R07-R12)
 R7: The relationship to the customer’s customer
A condition for success is often the understanding of the
: customer’s customer; and what suppliers can do to help their
customers become successful.

 R8: The close versus the distant relationship:

In mass marketing, the closeness of the customer is lost and the
relationship becomes distant, based on surveys, statistics and
written reports.

 R9: The relationship to the dissatisfied customer:

The dissatisfied customer perceives a special type of
relationship, more intense than the normal situation, and often
badly managed by the provider. The way of handling a complaint
– the recovery – can determine the quality of the future
relationship.
 R10: The monopoly relationship: the customer or
suppliers as prisoners:
When competition is inhibited; the customer may be at the
mercy of the supplier – or the other way round. One of then
becomes the prisoner.
 R11:The customer as ‘member’:
In order to create a long-term sustaining relationship, it has
become increasingly common to enlist customers as members
of various loyalty programmers.

 R12: the electronic relationship:

Information technology – telecom, computers, TV – are
elements of all types of marketing today and they now form
new types of relationships.
Para social relationship: Relationships to mental images and symbols, for example, to
brand names and corporate identities
The non-commercial relationship: A non-commercial activity is an activity that does not,
in some sense, involve commerce, The main goal of non-commercial relationship is not
to sell a product or service but to raise awareness about an issue, collect funds for a
cause, or promote an idea .Examples include the fund raising campaign of an NGO, a
government-sponsored public health awareness campaign, and electoral ads of political
parties.
The green relationship: Environment and health issues.

The law-based relationship: Relationship based on legal contracts.

The connection of two individuals, or their situation with respect to
each other, who are associated, either by law, agreement, or kinship
in a social status or union for purposes of domestic life, such as
Parent and Child or Husband and Wife relationship civil law.

The criminal network: Criminal networks can be defined as sets of

actors that are connected by ties which in some way or other support
the commission of illegal acts. Criminal networks are highly
adaptive and fluid networks of individual participants. These
participants, and members have various skills and characteristics and
they loosely organize themselves around. ongoing criminal
enterprise. These individuals are recruited for specific tasks and
jobs.
Mega relationship

•
 Ri8: Personal and social networks
 Personal and social networks often determine business
networks. In some cultures even, business is solely conducted
between friends and friends-of-friends.

Mega marketing – seeking relationships with governments,

legislators, influence individuals and others to make operations
feasible
Topic
20R's to 23R's and Nano Relationship
* R20 : Alliances change the market mechanisms
* Alliances mean closer relationships and collaboration between
companies. Thus, competition is partly
* curbed, but collaboration is necessary to make the market economy
work.
* R21 : The knowledge relationship
* Knowledge can be the most strategic and critical resource and
‘knowledge acquisition ’ is often the
* rationale for alliances.
* R22 :Mega alliances change the basic conditions for marketing
* The EU and NAFTA (the North America Free Trade Agreement) are
examples of alliances above the single
* company and industry. They exist on government and supranational
levels.
* R23: The mass media relationship
* The media can be supportive or damaging to marketing and they are
particularly influential in forming
* public opinion. The relationship to media is crucial for the way they
will handle an issu
Nano relationships (R24–R30) are found below
the market relationships, that is, relationships
inside an organization (intraorganizational
relationships). All internal activities influence the
externally bound relationships. Examples of nano
relationships are the relationships between
internal customers , and between internal markets
that arise as a consequence of the increasing use
of independent profit centres, divisions and
business areas inside organizations. The boundary
between the externally and the internally directed
relationships is sometimes fuzzy; it is a matter of
emphasis. For example, the physical distribution
network (R3) is part of a logistics flow, concerning
internal as well as external customers.
 Topic
(R24-R30)

* Nano Relationships
R24. Market mechanisms are brought inside the company
R25. Internal customer relationships
R26. Quality providing a relationship between operations
management and marketing
R27. Internal marketing - relationships with the employee
market
R28. Two-dimensional matrix relationship
R29. Relationship to external providers of marketing services
R30. Owner and financier relationship
• :R24: Market mechanisms are brought inside the company
By introducing profit centers in an organization, a market inside the company is
created and internal as well as external relationships of a new kind emerge.
R25: Internal customer relationship:
The dependency between the different tiers and departments in a company is
seen as a process consisting of the relationships between internal customers and
internal suppliers.
• R26: Quality providing a relationship between operations
management and marketing:
The modern quality concept has built a bridge between design, manufacturing and
other technology- based activities and marketing. It considers the company’s
internal relationships as well as its relationships to the customers.
*R27: internal marketing: relationships with the
’employee market’:
Internal marketing can be seen as a part of relationship marketing as it gives indirect and necessary
support to the relationships with external customers.

*R28: The two-dimensional matrix relationship:

Organisational matrices are frequent in large corporations, and above all, they are found in the
relationships between product management and sales.

*R29: The relationship to external providers of marketing

services:
External providers reinforce the marketing function by supplying a series of services, such as those offered
by advertising agencies and market research institutes, but also in the area of sales and distribution.

*R30: The owner and financier relationship:

Owners and other financiers partly determine the conditions under which a marketing function can operate.
The relationship to them influences the marketing strategy