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1.0 CHANGING MARKETING ENVIRONMENT

1.1 Political and Legal Factor
Attitudes of political parties, political movements, as well as the stability of the political
environment of a particular country is what referred as political factors which is one of the big
market changer that has its own significant influence towards marketing environment. It consist
of both public and private stakeholders, laws, governments, and state that correlates together and
can simply be defined as a set of laws and regulations set by the government which businesses
has to follow indicated by the manifestation of government influence on tax policies, or
involvement of government in trading agreements. Political factors coexist with legal factors and
are entwined with each other. Legal factors represent those that have become the law and
regulations while political factors refer to approaches and attitudes. While legal factors must be
strictly complied, political factor on the other hand may only represent influences, restrictions, or
opportunities, but the factors of political is not mandatory. The set of laws and regulations can
be in the form of social policies, trade regulations, tax policies, regulations regarding entry mode,
and etcetera.
1.2 Economic Factor
The wide economy that consists of elements such as growth rate of economic,
unemployment and employment rates, cost of raw materials such as steel, energy, petrol, interest
rates, exchange rates, inflation rates, disposable income of buyers, credit accessibility, and
monetary policies represents the economy factor of changing market environment. These
elements may differ from one country to one country. An economy simply describes how a
country spends its money. Economic factor in terms of business is the circumstances and the
consequences of a particular countrys spending towards how business should be run in the effort
of maximizing profit as well as identifying opportunities and threats. One simple example is the
changes in gross domestic product (GDP) of a particular country. GDP is a measurement of how
much extra an economy has produced this year in comparison with the previous year. It is also
one of primary indicators used in gauging the health of a countrys economy. If the economy is
healthy, typically there will be lower unemployment rates and wage increases as businesses
demand labor to meet the growing economy which at the same time can increase consumers
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purchase power. Bad economy signifies lower profit for companies which in turns mean lower
stock prices.
1.3 Social Factor
Organization or business itself operates within a socio-cultural environment where they
are directly involved with the culture of the society itself and this is the social factor. Social
factor refer primarily on traits and characteristics of consumers. Social factor covers vast
elements of society that are correlated with market environment of a particular country. It covers
on elements of demographic and cultural changes within society such as changes in years people
live, changes in where people live, changes in how people educate themselves, changes in
power-distance, changes in individualism, changes in gender diversity, changes in uncertainty
avoidance, distribution of wealth, changes in lifestyle and trends, educational levels, and many
more.
1.4 Technological Factor
Technological factor refers to the rate of developments and new inventions as well as
changes in information and mobile technology. Tendency often occurs in technological
developments that focus on digital and internet related areas but technological development
also covers the effect of changes in other related areas such as manufacturing, distribution, and
logistics. Changes in technology have transformed the in which many business work such as
automation rise in workplace environment and the development of one of the greatest
technological revolution that has vastly changed the course of business throughout the globe; the
internet. Internet has opened up need for information processing in purchasing and data
management areas while at the same time constant improvement of telecommunications have
made it easier to do business transgressing the boundary of time and geography. Besides that,
technological factor can also be identified in the elements of such as new innovations and
discovery, pace of technological innovations and advances, pace of technological obsolescence,
new technological platform, and other elements that are technologically relevant.


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1.5 Environmental Factor
Environmental factor simply refers to any issues regarding the environment itself and
most commonly covers issues such as limited natural resources, waste disposal, and recycling
procedures. The increasing rate of scarcity of raw materials, doing business as an ethical and
sustainable company, pollutions, carbon footprint targets, and etcetera urges the criticality of
environmental factor as one of the game changing in regard of marketing environment. As the
same time, more and more consumers are demanding and trending into product that were only
sourced ethically and possibly sustainable sources.
2.0 TRANSACIONAL MARKETING APPROACH
2.1 Definitions
Business Dictionary.Com defined transactional marketing approach as a marketing
strategy with the purpose of maximizing sales efficiency through increase of sales volume
instead of developing ongoing relationship with the customer. Transactional marketing
campaigns focus on the actual sales process for an item where the emphasis is put on making the
sale and may include sales techniques that will eventually alienate the customer and thus
breeding none relationship whatsoever. Also known as traditional marketing, transactional
marketing is a marketing strategy that focus on a single sale formula which seek to benefit
business through mass marketing and promotions approach which is based on small scale of time
as well as very little and sometimes no emphasis whatsoever towards customer services. The
main and single objective of a transactional marketing is to sale as many as possible within short
period time commonly through the mean of incentives, discounts, and buzz words.
A simple way to define transactional marketing is that a sale is a one-time event and to
benefit the most from a one-time event is to gauge as many sales as possible and preferably
within the shortest period of time possible. A simple example of transactional marketing
approach would be sales agent who is being given commission for any sales made. The salesman
will try to persuade the customer to buy the product by describing the benefits of the product but
after the customer bought the product, the salesman then never gets back to the customer.

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2.2 Weaknesses of Transactional Marketing Approach
Transactional marketing approach strategy always assumes that all segments of
customers are similar and all of them can be dealt with particular standardized manner of
approach. Each and every individual are unique and possess their own unique characteristic and
nature of behavior. Different characteristics and nature of behavior definitely require different
method to approach them appropriately and importantly effective and efficiently. Standardized
customer approach method is not a bad thing but it gets old really easy. Different individuals
possess different attitude and definitely different mindset. There are no one ultimate method to
capture and understands thoroughly the behavior of every individuals out there and this is where
the transactional marketing method is strictly at a disadvantage. Customers can be divided into
wide variety of segments such as age, gender, religions, classes, and so on and it took different
measures and methods to approach different segments of these customers. This is why
relationship marketing approaches has the upper hand because relationship marketing develops
relationship with customers that enable further and deeper understanding of the customers rather
than transactional marketing approach that solely focus on a single involvement and business
process of exchange between goods and money. As an example, a mobile company introduces a
new type of Smartphone that has the ability on par with that of a personal computer. This
information can be very attractive especially to working adults where they can replace their
heavy weighted personal computer into a smaller phone but doesnt lose the luxury of a personal
computer. If the same information were used to segments of consumers where computers are
rarely used, then the information would lose its impact and will render the product to be just as
same as conventional phones but with higher price.
Some individual can absorb huge amount of information and process the information to
understand the message that were delivered in the information. But some may need a lot longer
time to process information and cannot absorb large amount of information in a short period of
time. Transactional marketing approach strategy always assumes that consumers are passive
absorbers of marketing information as well as always assuming the same information will work
with all customers. Different individuals also have different beliefs. Some are open minded and
some may be restricted to absorb some type of information. Cultural barriers as well as religions
barriers can also be a factor that limits on how much or what type of information can be absorb
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and what not to. Advertisements of transactional marketing often are simple, short, and not very
informative in nature while some may be inappropriate in nature and such type of advertisements
usually were banned in some country and at the same time also considered acceptable in some
country. If marketers were to penetrate Malaysian market on undergarment businesses, they need
to carefully develop their promotional methods as Malaysia is one of the worlds Islamic State
and there are strict limitations on advertisements concerning nudity.
One major disadvantage of transactional marketing is the one-time event way of doing
business. Transactional marketing approach does not concerned in acquiring customers for long-
term relationship. Customer loyalty serves no role whatsoever in the book of transactional
marketing approach which clearly lose on repeat business as well as a loss of potential future
revenue for the business itself. This one-off marketing strategy leaves very little room for
business to engage in reputation-building process simply because customers of this type
marketing approach lacks any brand loyalty due to the non-relationship type of business
engagement with customers. This further causes the particular company to lose chances to obtain
positive reviews and good word of mouth that company can leverage in building a reputation.
Another major disadvantage of transactional marketing approach is that this type of
marketing is specialized in quick sale of product which most commonly renders the company to
focus only on price. Customer services, quality of product, and products ability to compete in
the market play very little and sometimes no role whatsoever in transactional marketing, let
alone building a long-term reputation. This makes transactional marketers vulnerable to price
wars and when competitor lowers its price in an equivalent product, customer can immediately
switch preference to the competitor. Marketers may also face self-destructive price war in order
to keep the sales number up and consistent.

3.0 RELATIONSHIP MARKETING APPROACH
3.1 Definitions
In contrast with transactional marketing approach, relationship marketing provides
broader and longer-term goals that focus on long-lasting relationships developments with
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customers to secure sales within the present and future period. Relationship marketing emphasize
on building and maintaining long-term relationship with customer rather than focusing more on
attracting new customers every time.
Relationship marketing treats every sale as a time taking process not an unconnected
single event and uses event driven tactics of marketing which is highly focused on the
satisfaction of customers as well as retention of them for future benefits. It is simply a strategic
orientation that focuses on keeping current existing customers and improving their relationships
with them constant and consistently. Useful implementation of profitable exchange relies on how
well marketers can understand the needs and wants of consumer that focus on relationship as a
marketing strategy can provide beneficial aid. Customer satisfaction, retention, as well as
customer acquisition can be obtained through careful and efficient application of relationship
marketing. For relationship marketing to be most effective, it must infiltrate every level of
contact with a current or potential customer, from the sales staff to point-of-sale displays to
customer service representatives. Some relationship marketing strategies including branding,
customer service training, community and media relations, social media, newsletters, blogs,
referral programs and frequent buyer incentives. These marketing efforts are investments in the
promise of long-term sales.
Relationship marketing is seemingly more complex and complex to utilize rather
transactional marketing approach. Transactional strategy often treats each and every customer
the same with each other but for relationship marketing each and every customer is different and
to devise strategies of relationship marketing the marketers have to enlarge their perspective
towards customer into a larger and wider spectrum. The key of how relationship marketing can
outdo transactional marketing and being able to greatly successive in the market environment is
the word understand, which simply mean to be able to clearly understand the customers
completely. Such example can be seen with the popular smart phone developer, Samsung.
Samsung smart phones took up amazing market share across the globe due to their constant and
consistent effort to design products such that their existing customer base upgrading is
incrementally constant. Customers around the world loved Samsung S1, then S2, then S3, then
S4 which result in solid brand equity that the customer will hardly think of switching the brand.

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3.2 Core Values
The core values of relationship marketing is that one of its main advantage against
transactional marketing; the exceptional focus on customers rather than on the companys
products. Relationship marketing is a strategy for marketers to get closer to their customers and
further understands their wants and needs specifically. By understanding customers needs and
wants clearly, marketers can come up with products that can accurately match their specification
which at the same time can help marketers to build up reputation from time to time as well as
brand loyalty. High level of brand equity can greatly increase market share and high brand
loyalty binds customers for future sales of product as well as eliminating any future rivalry from
existing or new players with similar product. Instead of focusing on hunting new customers,
relationship marketing puts that effort into emphasizing customer retention and growth in a
constant and consistent basis within a long-term period of time.
Relationship marketing specializes in strategy that puts existing customer as first priority
and treats them with appropriate response accordingly to ensure their loyalties doesnt go to
other competitors. It prioritizes after-sale services to customers to send them the message that the
sale is not just an exchange of goods and money but also an establishment of a new relationship.
Providing customers with supports and services even after the sale has being closed can
effectively increase the customer perceived value (CPV) which stands for the difference between
the prospective customers evaluation of all benefits and all the costs of an offering and the
perceived alternatives. In other words, CPV simply represents how worthy does a product for
customer to buy. The benefit of buying the product is worthy of the money they paid for it.
Hunting for new customers isnt always a priority but is a requirement at all times. While doing
customer retention and growth, being able to acquire new customers is a big bonus. Honda as an
example in 2006 introduces online relationship marketing with the creation of a microsite
intended to find out more about its customer and at the same time accommodate potential
customers by providing assistance in choosing the right car for them according to their preferred
characteristics and affordability. This helps them to keep track of their customers, entertain
questions, and provide up to date news throughout the globe as well as being able to provide
assistance to not just the existing but also potential and new customers.
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Relationship marketing utilizes cross-functional teams rather than putting all the work to
a specific segment of company only. It nurtures value of cooperation among members
throughout the company and help to ease the burden and stress carried to get the job done. Doing
sales and after-sale event is a complex matter to deal for a single department let alone by a single
individual. Therefore, in relationship marketing the function of sales and after-sale event is
divided to different segments of the company. Automotive companies such as Honda utilizes
relationship marketing and by doing so, Honda establish different departments to ensure
smoothness of the whole processes. There are sales department that specializes in hunting new
customers, there are support department that provides after-sale services such as collecting
feedback, answering inquiries, providing information, and there are also research and
development department that feeds on the feedback collected from customers and doing research
on development of new designs that suit the wants and needs of customers.
Besides that, relationship marketing relies more on listening and learning than on talking.
While traditional marketing approach would rely on talking to inflict huge sales volume,
relationship marketing is all about listening and learning on the job. Marketers listen to what
customers really want and need for a particular product and learn along the road on how to
maximize their sales volume using what they had learnt directly from the customers themselves.
This way customer will feel appreciated as their concerns and suggestion are being taken into
consideration for future reference and improvement. Such an example can be seen in Honda as
stated earlier where Honda establish a platform for their customers to express their concerns,
complaints, problems, suggestions, and expectations directly to Honda. Every aspects of whether
they are in the forms of problems, concerns, and suggestions are very valuable information to
serve as future reference for future products.
3.3 Relationship Marketing and Competitive Advantage
Relationship marketing is a very good method to achieve not just competitive advantage
but also a sustainable competitive advantage. The key word is retention. Customer retention is
one of the main elements of how well can a company competes in the long run. Generally
customer retention is known as a repeat patronage of marketer or supplier by customers.
Retention comes with attractive package such as customers loyalty, and repeat purchasing
behavior. Loyalties and repeat behavior is a sign of trust and confidence which at the same time
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will build products equity and strengthen the companys position in the market as well as
increasing market share.
Customer retention will ensure that customer will not switch to other similar product as
they are loyal, confident, and the product of their choice is trustworthy. This can help minimize
competitors ability to increase market share. The company can retain their market share and at
the same time establish advantage in competitive market environment by having repeat buyers
from loyal customers they retained. This is what sustains a companys competitive advantage in
a stiff market environment. Samsung mobile is one of a leading mobile brand in the world and
also one of top-notch product in the mobile market. To stay competitive, Samsung establish
relationship with customers through many medium and platform across the globe and most
commonly on the internet. They retain their customers, collect feedbacks, nurturing loyalties and
sense of trust by providing first class after-sale services and undeniable quality of product. When
Samsung releases new product to the market, they know that there will always be a huge
demands for Samsung even in the stiff market of Smartphone because they keep track of their
customers and making sure that the customers receive the best for what they paid for. From the
S1, to the S2, to the S3, and then S4, all type of Smartphone received encouraging response from
customers and Samsung managed to hold and increase their market share throughout the globe
thanks to developing relationship with customers.
According to Bradmore (1997) to be able to succeed in the fierce competitive market
environment is for the business to get closer to the customers and what more to well understands
what it is that customer will buy instead of going highly focused on pushing products or services
that may not be of even a little value to customers. To attain competitive advantage, business
must crucially be able to determine what motivates customer to buy, under what circumstances
do people consume the product, whether they consume the product alone or with others, do they
buy products for themselves or for others, and so on. Unless business can really understands
what motivates and what will customer buy, the idea of attaining market share will stay as an
idea let alone the objective to achieve competitive advantage.


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