Product and relationship marketing

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Breakdown

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Product marketing

At its simplest marketing concentrates on how to create and deliver a 'product' to a customer with the product being not just a physical good but also a service or an idea. In non profit organisations the customers can be beneficiaries, supporters, stakeholders or regulators.

Products

• Physical goods might be disability aids, fundraising T-shirts or campaigning ribbons.
• Services include advice, advocacy, training, etc.
• Ideas include pressure group or campaigning ideas such as reducing climate change, obesity or crime; but also fundraising products are essentially ideas   

Customers

• Beneficiaries go under a huge variety of names such as clients, patients, members, patrons, audience, older people, people with learning disabilities, etc.
• Supporters can be donors, sponsors, advocates, etc.
• Stakeholders are staff, representatives of beneficiaries, trustees, committee members, etc (people who have legitimacy and power).
• Regulators include the Charity Commission, local authorities, health authorities, Housing Corporation, etc.
  

Marketing tools

• segmentation and targeting
• marketing research
• other player analysis
• positioning
• marketing mix (8ps: product, price, promotion, place, physical evidence, people, processes and philosophy)

Putting the above into a framework we have four analytical tools of segmentation, marketing research, other player analysis and positioning. These all help to analyse the product in relation to the customers and help us design/refine the product and the marketing mix (the ingredients of the product as seen by the customer). This helps to reach a maximum number of customers and trigger them into action. This diagram helps to illustrate this process.

Relationship marketing

Relationship marketing is 'building relationships (mutual understandings) between your organisation and your customers through which the needs of your organisation and your customer, are met.' Relationship marketing is particularly useful in fundraising, lobbying and for membership organisations.

So what additional tools does relationship marketing offer us? There are four in particular which are bonds between you and your customer:

• financial bonding: for example, customers pay money to your organisation for services or fundraising products
• social bonding: for example, customers receive social opportunities from you which they enjoy
• structural bonds: for example, partner organisations or individuals have certain 'rights', for example, a place on the Board
• customisation: for example, creating a personalised product (good, service or idea) for individual customers to maximise the attractiveness of your organisation versus another.

Product and relationship marketing together

Advocates of relationship marketing used to fight with advocates of product marketing but we can use the tools of each to improve the effectiveness of our non profit organisations. In effect, relationship marketing gives us additional tools to ensure we achieve serial product marketing, that is, repeat purchasing.

Have your say

What was your experience with relationship and product marketing? Was using them in tandem more effective or less effective? 

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