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Introduction
The markets evolve and consumers tend to be more educated, involved & discerning:
Traditional concepts lose relevance & more customer-
Relationship Marketing:
one of the most prominent applications & tools for a relationship marketing approach
The origins
Price Differentiation:
when sales of identical goods/services are transacted at different prices from the same provider.
Price Differentiation & Relationship Marketing:
when price differentiation tactics, rates or ranges are combined or based on customers background history in terms of relationship, loyalty & sharing.
Principle:
a relationship-based company should not charge everyone with the same average price.
Relationship Pricing
Conditions & Traits:
Data: valid, adequate, precise, personalised Segmentation & Anticipation: attractiveness & potential Communication: customers should be educated, qualified & prepared to accept the differentiated offerings
i.e. Grecotel Hotel chain or Club Hotel Casino Loutraki differentiate their offerings based on the relationship of the customer:
Club Membership Gold & Silver Cards special-priced & exclusive offers
i.e. AthinoramaClub & Odeon CineFriends are programs that offer to their loyal members a wide range of both differentiated pricing offerings & other exclusive services.
Odeon Cinema Theatres Pricing Policy:
MEMBERS 8 one 4,5 ticket for every 3 screenings GUESTS 9
i.e. Olympiacos F.C. hybrid relationship pricing model for the teams seasonal tickets.
Olympiacos F.C. Pricing Policy for the Seasonal Tickets:
GATE 4,5,6,21 1,2,8,9,19,20 11,17 12,16 14,15 33 VIP Price for Renewals () 300 380 700 700 1000 2000 3500 Average Price for New () 320 400 700 850 1100 2500 3850
pure & discernible relationship pricing models. but demands a new, more dynamic, vivid & adjusting approach of relationship pricing:
RBP
continuous programming for creating optimal RBP offerings; a series of adjusting discounts based on customers tenure.
Components: 1. an integrated system for classifying customers based on background transaction & volume history. 2. a model to portray the link between the pricing & customers movement/migration across loyalty clusters. 3. a dynamic optimization process for managing all the possible transactions quickly & profitably.
software applications that facilitate & conventionalize on this approach. SunTec Business Solutions
Zafin Labs & Dell conjoint
The Case
The Greek Mobile Telecommunications Market:
Pricing: the main axis/basis upon which brands compete
Focus: brands are primarily focused on customer acquisition Trend: due to the economic recession the market growth rates
Vodafone Policy
Mobile Service Program
Unlimited 25 Unlimited 30 Unlimited 35 Unlimited 45 Unlimited 50 Unlimited 60 Unlimited 75 Unlimited 100 Unlimited 125 Unlimited 175
The discount applies for existing customers with minimum 1 year transaction record with the company who will renew their contract for 2 years. The discounts are fixed and do not change in the course based on further or greater loyalty or quantity customer performance. These are the maximum possible discount rates. The corresponding by Cosmote policy is exactly identical.
Critical Analysis
The opportunity:
This initiative can be described as the initial step towards a
more relationship-driven pricing policy. A real opportunity for evolution & integration has thusly aroused.
The facilitators:
Both companies possess & have access to adequate &
abundant data (past, present & potential behavior). Retention switch is now necessary, since the market shows low growth rates.
Integration
The O2 We call it Fair Deal example:
Blue
Silver
Gold
Platinum