From Marketing Mix to Relationship Marketing

A paradigm shift in marketing within New Zealands Health and Safety Industrial distributor

Compiled by Shabreen Hakik, June 2012

Objectives
To Find out; The business and the characteristics of the industry the company is in Challenges to the traditional view of marketing Major trend and shift in marketing practice Types of Marketing in practice The importance of relationship marketing What value propositions does the business provide to its customers Business involvement in any relationship activities Main competitors in New Zealand

(known as WISNZ)
Blackwoods Protector Expresspak Packaging House & Medical Ltd

NZ Safety

APC Techsafe

Safety Source

Activities are centred in three key industrial market segments:

industrial packaging, food service and hygiene products, maintenance repair and operating consumables (MRO),

..distributed and supplied by

Industrial Safety
Definition: Industrial safety is primarily a management activity which is concerned with reducing, controlling and eliminating hazards from the industries or workplace. Key contents
Work Place Training Head protection Foot protection Apparel Hand protection Signage & Site safety Manual Handling Height Safety Environmental & Hazardous Respiratory protection Fire protection Medical Hygiene

1950s 1990s Traditional View of Marketing

$$

NZ Safety

Key Customers

4 Ps

Distribution Warehouse

Retail shops

Sales Reps

End Users

Supervisors

Others

Partnership agreement and interaction between NZ Safety and key customers was made at the cooperate level for the exchange of safety products for money.

Late 1900s

Paradigm shift: Customer base grew and the management started to think about how to hold on to existing customers. Business model is moving from a marketing mix focus to a relationship focus

Major Trend and Shift in Marketing practice

Customer Contacts
NZ Safety Sales Manager
Senior Manager

Supervisors

Ground level staff

Advantage: Opportunity to build relationship with more than one person in a firm. Chances are to capture more business based on more contacts and good relationship on day-to-day business Disadvantage: More people to build relationship with gets hard to evenly and equally pay attention to all at once. Lack of consistency. Hard to negotiate national contract agreement right across the business.

Model was redesigned to suit both business structure

Traditional Marketing Transaction based Short term focus Marketing mix Aim is to seek new customers Important of product benefits Quality is the concern of suppliers (production) Persuasive communication Relationship Marketing Focus on customer relations Long term focus Continuous customer contact (CRM) Importance of customer benefits High customer service Quality is the concern of all Regular communication

Types of Marketing in Practice

Sales Assistants Retail Development and promotional Manager Outsourced Telesales (CRM) Inbound/outbound customer services Account Managers (Call Cycle) Key Account Managers National contracts manager Website administrator BDMs Transaction Marketing

Retail shops

SMB (Small and Medium sized business)

Database Marketing

Large enterprises Regional based

Interactive Marketing

National Contracts

Network Marketing

Importance of Relationship marketing

Grows customer and employee loyalty The customers dont need to be persuaded and they become less sensitive to price overtime Their account is already set up They buy more and a broader range of products They are more predictable They cost less to service as they are familiar with the companys way of doing business They need less time from staff They can recommend by referral or word of mouth. They make it difficult for new firms to enter the market or increase their market share High performance and productive employees Creates competitive advantage

Value Proposition
Products meets HSE Act 1992 and AS/NZS standard and compliance. Quality and market leading brands. In house manufacturing Expertise wide range of product and knowledge with best safety options and solutions. Training offers range of training programmes to assist customers with their learning and development needs. Experience Over 50years of partnership with NZs industries and workplace safety requirements Accessibility & Convenience 24 NZ safety outlets throughout New Zealand, Account managers, toll free calls and online. National contract agreement customers cost reduction, offering rebates Services ; - Equipment testing laboratory OSH regulation - Online resource - Safeline free advisory services

Relationship Management activities

CRM Strategy and implementation salesforce.com Product training is provided by the product managers and supplier (AS/NZS standard) Ongoing coaching and feedbacks to up skill staff ( OS training manager, Intranet based ilearn programm) e Measure current performance at every level (PDP, KPIs, fit for future survey) Rewards and recognition Establishing effective service delivery processes

Relationship Management activities cont

Actively seeking customer feedback and complaints (online, shop and one-one) Engages the managers (Monthly meeting, end of the month report) Teamwork and collaboration establishment Annual conference involving supplier, sales, marketing and customer services staff External activities - Golf day, Field-day and safety show/ exposition Community projects - St Johns, Cancer society of NZ and Hihi bird recovery programme

Main competitors
Snell Packaging and Safety Focus Safety Safeworx Limited Armour Safety RSEA Safety Plus Safety in Action BOC NZ Limited Blackwood Protector safety Equipsafety Site safe

We now understand NZ safetys

business and industrial characteristics challenge to the traditional view of marketing major trend and shift in marketing practice type of Marketing in practice importance of relationship marketing value propositions to its customers involvement in relationship activities main competitors in the safety industry

Conclusion
This research on marketing practice has shown that industrial distributors practice a combination of transactional and relationship marketing amongst all the stakeholders. However, the driving force behind both the marketing structure, not only just for relationship marketing, is the innovation of information technology, eg. CRM, Microsoft outlook, internet etc.