Marketing Strategies for Invisible Services

Information Technology Consulting

Dissertation Submitted to the Padmashree Dr. D.Y. Patil University in partial fulfillment of the requirements for the award of the Degree of

MASTERS IN BUSINESS ADMINISTRATION

Submitted by: Amruta Shridhar Brid (Roll No.0801008)

Research Guide:

Ms. Gagandeep Nagra

Department of Business Management Padmashree Dr. D.Y. Patil University CBD Belapur, Navi Mumbai

December 2009

DECLARATION

I hereby declare that the dissertation Marketing Strategies for Invisible Services- Information Technology Consulting submitted for the MBA Degree at Padmashree Dr. D.Y. Patil Universitys Department of Business Management is my original work and the dissertation has not formed the basis for the award of any degree, associate ship, fellowship or any other similar titles.

Place: Mumbai Date: (Amruta Shridhar Brid) Signature of the Student

CERTIFICATE

This is to certify that the dissertation entitled Marketing Strategies for Invisible Services- Information Technology Consulting is the bona fide research work carried out by Ms. Amruta Shridhar Brid student of MBA, at Padmashree Dr. D.Y. Patil Universitys Department of Business

Management during the year 2008 -2010, in partial fulfillment of the requirements for the award of the Degree of Master in Business Management and that the dissertation has not formed the basis for the award previously of any degree, diploma, associateship, fellowship or any other similar title.

(Ms. Gagandeep Nagra)

(Dr. R. Gopal, Director, Department of Business Mgt, Padmashree Dr. D.Y. Patil University)

Place: Mumbai Date:

ACKNOWLEDGEMENTS

In the first place, I thank Mrs. Gagandeep Kaur Nagra, Lecturer, Department of Business Management, Padmashree Dr. D.Y. Patil University, Navi Mumbai for having given me her valuable guidance for the project. Without her help it would have been impossible for me to complete the project. I would also like to thank the various people from the IT consulting industry and Mrs. Dipti Patel, Sr. Consultant from PCS Technology Ltd who have provided me with a lot of information and in fact even sharing some of the confidential company documents and data many of which I have used in this report and without which this project could not have been completed. I would be failing in my duty if I do not acknowledge with a deep sense of gratitude the sacrifices made by my parents and thus have helped me in completing the project work successfully.

Place: Mumbai Date: Signature of the student.

Table of Contents

Chapter No
A B C 1 2 3 3.1 List of Tables List of Figures List of Abbreviations Executive Summary Objectives of Study Research Methodology

Title

Page No

1 4 6 7 9 10 14 14 16 17 19 20

Methods of obtaining Information

3.1.1 Quantitative Information 3.1.2 Operationalizing 3.2 Primary Data

3.2.1 Sampling 3.2.2 Validity 3.2.3 Reliability 3.3 4 5 5.1 Chosen Methodology Literature Review

Moving from Transaction Marketing to Relationship Marketing -The Concept of Relationship Marketing 28 Theory 29 32 34 35 35 Page No 36

3.1.1 Moving from Transaction Marketing to Relationship Marketing 5.1.2 Interactive Marketing 5.1.2.1 Buyer- Seller Relationship 5.1.2.2 Making Promises

Chapter No
5.1.2.3 Enabling Promises

Title

5.1.2.4 Keeping Promises 5.1.3 Dimensions of Relationship Marketing 5.1.3.1 Bonding 5.1.3.2 Empathy 5.1.3.3 Tangibility 5.1.3.4 Reciprocity 5.1.3.5 Trust 5.2 5.2.1 5.3 5.3.1 5.3.2 5.3.3 5.3.4 5.4 5.4.1 5.4.2 5.4.3 5.4.4 5.4.5 5.4.6 5.4.7 5.4.8 5.4.9 Creating Value Customer Loyalty Marketing Strategy Continuum The four Ps; still useful or old and limited? The importance of nurturing the resources The importance of feedback from clients Two communication is better than one way communication Concept of Relationship Marketing The Relationship Life cycle Creating interest & Relationship Keeping and Maintaining the Relationship Managing the Life Cycle Technical & functional Dimensions Quality, Commitment & Trust Making the Relationship Last A stable relationship still needs to be developed Critics and Conclusions of Relationship Marketing

36 37 37 37 38 38 38 39 39 41 42 46 47 48 50 53 54 55 56 58 59 60 61 62 Page No 63 64

Chapter No
5.5 5.5.1 Consultancy Services Outsourcing

Title

5.5.2 5.5.3 5.5.4 5.6 5.6.1

Scope Economies Information Technology Quality Management Information Technology Consulting Services Forces that shape IT Consulting Services

65 66 67 70 72 72 76 78 82 83 84 85 87 89 92 93 95 97 99 102 104 106

5.6.1.1 Drivers of IT Consulting Growth 5.6.1.2 Enablers of IT Consulting Competitive Change 5.7 5.7.1 5.7.2 5.7.3 5.7.4 5.8 5.8.1 5.8.2 5.8.3 5.8.4 5.8.5 5.8.6 5.9 5.10 5.10.1 Marketing Strategies for Consultancy Firms Indirect & Direct Marketing approach Group Communication Indirect Communication Hidden marketing Guerilla Marketing for Consultants Seven Effective steps for Guerilla Marketing Follow the 60/30/10 Guerilla Marketing Formula Guerilla Marketing = Fusion Marketing Sell Yourself First The web really matters a lot Conclusion Potential Clients always do no need help Discussion The State of Art

TABLE OF CONTENTS (Contd)

Chapter No
6 Analysis

Title

Page No
108

6.1 6.2 7 7.1 8 9 10 7.1 7.2

Marketing Activities and Marketing methods Primary data analysis Conclusion The Answers to Research Questions Recommendations Limitations of Study Reference Section Annexure Bibliography

110 111 137 137 143 145 147 148 155

A. List of Tables

Table No 3.6

Title
Page No

Six types of companies that provided IT consulting services Guerrilla marketing bears little resemblance to the traditional me-too marketing used by most consultants in six distinct ways Large firms- Active marketing Large firms- Interactive marketing Small firms- Active Marketing Small firms- Interactive Marketing

66

3.8 5.2.1 5.2.2 5.2.3 5.2.4

83 140 140 141 141

B. List of Figures

Fig No. 1 2 3 4 5 6 7 8 9 10 11 12

Title

Consultancy services provided by large and small firms Preference of working for large firms Preference of working for large firms Long term relationship maintenance of large firms Long term relationship maintenance of small firm Benefits of maintaining long term relationships for Large firms Benefits of maintaining long term relationships for Small firms Mode of maintaining Information Large firms Mode of maintaining Information Small firms Marketing Activities by Large and small-mid sized firm Frequency of marketing activity- Large firms Frequency of marketing activity- Small firms

C. List of Abbreviations

IT

Information Technology

ERP CIO CRM QM

Enterprise Resource Planning Chief Information Officer Customer Relationship Management Quality Management

- Chapter 1 Executive Summary

Marketing Strategies for Invisible ServicesInformation Technology Consultancy

-----------------------------------------------------------------------------------------------------------------

1. Executive Summary

The traditional marketing with its marketing mix have for long been the dominating marketing strategy, where focus have been on placing the product at the best place with the best possible price. When it comes to services, the possibilities are not the same; the firms must adapt new marketing methods in order to sell and market their services effectively.

If the services are invisible as well, the consultant must create a promise and the client must feel secure. Mutual relations then become important, and focus is instead put on the clients needs rather than the firms own interests.

The purpose of this thesis was to examine how Information technology (IT) consultants most effectively sell and market their services. Theories within the traditional and Relationship-based marketing were used in order to get a deeper insight in the subject. By way of introduction two consultants were interviewed to facilitate the construction of the questionnaire, which was later sent out to 10 different consultancy firms. The results were analyzed with the objectives of finding out which marketing methods that were most

often used and which factors affected the choice of method.

The state of the art within this subject is not very broad, and the thought was therefore to test the emerging theories and thereby support or oppose them. The results from the study showed to support the theories to a high extent. The conclusions are that the less product oriented the services are, the bigger effort is needed on relationship-based marketing. Those firms who only sell solution-based consulting tend to put much time on involving the client in the project process. These firms considered recommendations and references to be the most effective ways of reaching new clients and continue with existing ones. Traditional marketing activities were used to a much smaller extent, and were considered to be time-demanding and ineffective.

- Chapter 2 Objectives of Study

2.1. Objectives of Study

The main purpose of the thesis is to understand what affect the choice of marketing strategy among the IT consultancy firms. Further, the objective

is to find out which marketing methods are considered most effective by IT consultants.

The objectives of study are as follows:

When consultancy firms sell and market their services, which strategies do they consider as being the most effective in terms of finding new clients and getting new projects?

Is there a difference between how small & mid sized consultancy firms sell and market their services compared to big consultancy firms?

An underlying purpose is to get a better understanding of the Information technology consulting business, which will help to broaden the view of marketing strategies as well as to open up the mind for todays marketing principles.

- Chapter 3 Research Methodology

3. Research Methodology

This part seeks to describe the steps and methods that developed this thesis. It presents the process of obtaining information, collection of the empirical data,

and how the theories have been selected, along with the value of the study.

3.1 Methods of Obtaining Information

The information gathered for the empirical study partly comes from semistructured interviews. Fifteen consultancy firms took part in the interviews, five of them were small firms, 4 of them were medium sized firms and six were big ones. The interviewed people were consultants employed in the firm, i.e. they were not self-employed. The reason for this was that the answers should reflect the whole company. Self employed consultants who belong to virtual companies might not see themselves as belonging to the company to the same extent as consultants who actually are employed by the firm. After all, a mix of the two forms of companies could have made it more complicated and therefore I decided to only include those consultants who are employed by the firm. The six big firms are well known globally and were chosen for this reason. The small firms were found on the internet through eniro.se.

Emails and calls were used to get in touch with a consultant in each firm.

Since there are plenty of small consultancy firms it was not necessary to call them, instead emailing was enough to get interviews. However, for the big consultancy firms, it was necessary to call and push to get an interview, therefore emailing was not an alternative.

In all 30 (consultants & IT head handling consulting services) people from IT consulting industry were interviewed and the primary data in the form of questionnaire was obtained.

3.1.1 Quantitative Information

Quantitative information was collected through the questionnaire and the

results are gathered and presented quantitatively, but then analyzed qualitatively. The answers from the interviews are presented and analyzed in the same way. A combination of qualitative and quantitative information presents the results with a clear view (quantitatively) and an easy presentation (qualitatively).

3.1.2 Operationalizing

The

interview

questions

were

semi-structured

with

pre-decided

questions, and the respondents could answer freely. The questions focus on the firms values about marketing strategies and what they consider the most effective aspects when trying to reach potential clients. Questions 1-3 are introduction questions. Number 8-13 seek to discover if the consultant use transaction-based or relationship-based marketing strategies, as well as if it is an indirect or direct approach. Questions 4-7 consider

relationship-based marketing. The last question is considered to be a control question and should end the interview. The purpose of the questions was to get knowledge related to the theories through the questions. The

objective was to get a good base for developing the questionnaire. Appendix 2:1 shows the interview questions.

The aim of the questionnaires was to get deeper understanding on topic under consideration and to get as valid information as possible. Efforts were put in developing the questions in a way that risks of misunderstandings were excluded. The query was checked by a consultant and some other people before it was sent out. The respondents could only choose one answer for each question. The questions were constructed so the respondents had to choose the method used most often or the statement they agreed with the most.

The first two questions were asked mainly to understand whether the consulting firm is primarily involved in providing only advisory services or solutions or both. The third question was asked to understand the major players or companies that give competition to large, midsized and small consulting firms. The rest of the questions

concerned marketing. Most of them seek to discover if the respondents use mostly traditional marketing activities, i.e. active marketing activities, or relationship-based marketing i.e. interactive marketing methods. Active marketing activities have been chosen through the theories and are assumed to be connected to traditional transaction-based marketing. The same goes for interactive marketing methods, which are assumed to be connected to relationship-based marketing.

The question one contained both solution-based consulting and advisorybased consulting services as options, and the reason for this was to separate those who sell solution-based services from those who involved in just advisory services. Second question was to gain a better understanding on the major domains in the Information Technology consulting services like IT Governance, Compliances, IT Training audits etc. Question 3 was based on competitors in IT consulting industry. Question 4 examines if the consultants prefer to work with existing clients or new ones, and whom they actually

work with mostly. Another question that directly concern transactionbased and relationship-based marketing is question 6. This question is about what the consultants consider that strong relationships respectively new clients mostly generates. The question was a matrix in the query, and the respondents could choose between 8 alternatives. The four first answering alternatives are connected to strong relationship and the last ones to new clients. Question 5 is sort of a complement question to those questions that concern interactive marketing methods. It seeks to discover how the consultants keep and maintain a strong relation with their clients. Question 8 & 9 are based on the marketing efforts undertaken by the firm. Question 10 is about whether the consultants attend the network meetings arranged by others firms in the same line of business. Question 11 reflects the type of active

marketing methods the firms use to promote their services and the effectiveness of each of the chosen marketing method. Question 12 , 13 &14 are of personal nature asking the respondents whether they current marketing efforts are sufficient and what additional efforts the firm can take to market their services better.

The questionnaire contained 14 questions with 2 to 8 answering choices

each. An informal interview was conducted with 2 consultants which helped in making the questionnaire and provided a more deeper insight on the topic. The answers from the interviews help to construct the questionnaire, which would provide a deeper insight. The objective was to create a query that was easy to answer and not time demanding, by keeping the number of

questions down as much as possible. The questionnaire took approximately 10 minutes to answer.

3.2. Primary Data

The primary data come from the questionnaire filled by the consultants

working in the consultancy firm,

selling advisory and solution-based

consulting services. Since some firms might have other IT specialist people working for the consulting vertical other than just IT respondents had to answer for the whole consultancy firm. consultant, the

4.2.1 Sampling

For the empirical study, the focus was put on getting as reliable and trustworthy information as possible. From theories about consultancy it could be understood that many consultants work and operate similarly. Therefore, I judged that 15 IT consultancy firms were enough to interview in order to construct the query, and thereby draw reliable conclusions about my research questions. 15 consultancy firms received the questionnaire with the purpose of getting responses from at least 30 respondents. The whole population of Information Technology consultants in and around

Mumbai is hard to calculate as there are many small consulting firms that operate on small scale basis. Also there is no general definition of what a IT consultant do. Secondly, my definition of a consultant, which is a person who offer solutions and advises for a few, are included within other

positions too in the consultancy business, for example organizational consultant, strategy consultant, business consultants etc. phone calls meetings and emails were the most effective methods that could be used

and in the end I believe that there was no other possible method that could have been more effective.

The time and effort spent on searching, calling and reminding respondent to answer took more than expected. Realizing the work with getting

respondents it would have taken very long time to reach many more respondents. When observing the answers gradually the conclusion was made that 20 or 30 respondents would not make a very big difference, therefore I judge that the 30 respondents included in the study are plenty enough to make a valid analysis on it. Inferences can be drawn

from the analysis made on it and thereby answer my research questions.

3.2.2 Validity

The degree to which the measurements measure what they are intended

to measure determines the validity of the empirical study.

The research questions are clear and easy formulated, and the objectives of the theories and the findings are to answer the research

questions. The theories were the base for the interview questions, and the answers from the interviews constructed the questionnaire. The research questions were developed from the theories; hence the

measurements were constructed with the same base as the research questions. This means, that the measurements are aimed to, in any aspect, develop the answers for the research questions. The construct of the measurements were well planned and organized, since much effort were put on avoiding misunderstandings and easy formulations. The

questions were tested by other people before they were used. Emphasize where also put on formulating the questionnaire in a way that excluded misunderstandings.

The theories used in the thesis seek to provide a clear understanding of marketing strategies in the service business. The intention was to collect enough information and knowledge in order to create hypothesises. This

hypothesises lead to the answers of the research questions. Over all, the construct of the measurements are developed so that the purpose of the thesis will be measured and responded.

In addition, there are a number of intermediate variables that might affect the answers. To limit the risk of this, the query contained certain control questions and the choice of respondents were chosen so that there would be a fairly even spread from small to big firms.

3.2.3 Reliability

The reliability is the extent to how precise the measurements measure what they intend to measure. All the answering alternatives in the query are considered to cover all possible answers. The questions concerning marketing in the query were constructed so that the consultant would easily be able to answer the questions. This means that the consultant did not have to have good knowledge and special insight in the marketing department within the firm. The questionnaire is constructed in a way that it should cover all

aspects that are important in order to understand the choice of marketing strategy. Another thing that enables the respondents to answer honestly is the fact that everyone is anonymous in the study. This provides trust-worthy answers which makes the study even more reliable. In addition, there is one question in the query that considers what type of services the sell. consultants

The construct of the questionnaire provides a good base for the study, and thereby a reliable outcome. The same study made in the subject would get the same results.

3.3. Chosen Methodology

When seeking to get enough respondents the focus was put on finding consultancy firms of different sizes from across the city. The first objective was to collect 30 answers. Therefore, 19 were from large sized consulting firms, 6 from mid-sized firms and 5 from small firms. A list was made in order to better organize the number of respondents. When searching for

the companies, several Internet sites were used. Two specific criterions needed to be filled; the number of employees must be more than one, and the firm must have some type of solution-based/IT consulting. Another thing that did not turned out as expected was the equal spread between the different firm sizes. 11 medium-small firms are included but and 19big sized firms are included. From the beginning the purpose of the thesis was to compare small and mid-sized firms with big ones.

- Chapter 4 Literature Review

4. Literature Review The main purpose of the thesis is to understand what affect the choice of

marketing strategy among the IT consultancy firms. Further, the objective is to find out which marketing methods are considered most effective by IT consultants.

1. Guerrilla Advertising by Jay Conrad Levinson and Charles Rubin, Mariner Books, ISBN 0395687187

This is an advertising book referred to understand the different methods of advertising so that I can understand how Levi s works out with its advertising in different segment.

By Jay Conrad Levinson and Charles Rubin, Mariner Books, ISBN 0395687187 - Jay Conrad Levinson is very well known for his "guerilla" strategies. He's been in the business since 1958, developing advertising campaigns for countless businesses. In Guerilla Advertising, Levinson reveals every element of a successful ad campaign - from targeting your audience to designing effective ads.

2. Book: Advertising And Promotion: An Integrated Marketing Communication Perspective by George and Michael belch

This book includes fast-changing field of advertising and promotion. While advertising is its primary focus, it is more than just an introductory advertising text because there is more to most organizations promotional programs than just advertising. It discusses the leading marketers and theirs agencies approach to advertising and promotion from Integrated Marketing Communication Perspective (IMC). Through this book I have got lot of knowledge on how companies are using integrated marketing

communications. It has helped me in understanding how advertisers must take ethical considerations into account when planning and implementing advertising and promotional programs.

Taking the help of these books it will be possible for me to carry out my project smoothly and also add new information and updates about the Brand to my project.

3. Philip Kotler- Principles of Management

This book was very crucial in the study as I found some of the examples were helpful as it said about the different methods the various brands used to target customers. A section in book told about how according to likings and preference of different people, the brand made changes in its business accordingly.

4. Naresh Malhotra- Marketing Research

This book was helpful to understand the needs of Marketing research and also had various brand examples and their research reports and articles which proved useful for my study. In a section of the book he spoke about how brands research before finally getting into a new segment to target more and more customers.

5. How to Conduct Surveys: A Step-By-Step Guide by Arlene G. Fink (4th Edition)

Arlene Fink (Ph.D.) is Professor of Medicine and Public Health at the University of California, Los Angeles and President of the Langley Research Institute. The above mentioned book gives you practical information based on experience on how to go about market survey properly. In this book the author has emphasized more on types of surveys conducted and their uses, the questions, scales, and appearance of the survey form, preparation of proper open- and closed-response questions, sampling techniques, survey design, analysis and presentation of the results, including a very helpful survey of graph types and their uses, it has helped me a lot in designing a proper questionnaire and deciding on the sample size.

6. Principles of marketing by Gary Amrstrong Principal of Marketing by Garry Armstrong provides a rich depth to the marketing managers critical decision making to achieve organisational mission with the limited resources that the organisation have. Marketing is not at all only as advertising and sells generation. But Marketing is a business function to identify consumers wants and needs, determining the target market and choice organisational strategy for the said target market.

Principal of Marketing tells us to design appropriate products, and programs for the target market those goals to creating consumers satisfaction and organisations Profitability by building value-laden relationship with valued customers.

Principal of Marketing defines Marketing as a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. The core concepts of marketing are needs, wants and demands; products and services; value, satisfaction and quality: exchange, transaction and relationships and markets. Wants are the form assumed by human needs when shaped by culture and individual personality.

7. Consultant's Calling: Bringing Who You Are to What You Do by Geoffrey M. Bellman

Find out what consulting is really like -- as a career and a way of life. Writing with wit and candor, author Geoffrey Bellman shows how to make the job rewarding, both financially and personally, as he examines the practical issues of managing time, clients, money and family life. This book shows you how to make consulting rewarding--both financially and personally. You'll learn about the practical issues of managing time, clients, money-as well as broader concerns, such as how to balance work with family life. The Consultant's Calling covers: The consultant as leader The work consultants do and how they do it The formula for a strong consultantclient partnership Making your way in the marketplace

8. Flawless Consulting by Peter Block Shows internal and external consultants how to deal effectively with clients, peers, and others with the help of illustrative examples, case studies, and exercises.

9. The Business of Consulting: The Basics and Beyond by Elaine Biech

The consulting profession has become one of the fastest-growing industries in the '90s, and observers expect that both the demand for such services and the avocation's undeniable allure will continue to draw people into the profession. However, management consultant Elaine Biech believes that most newcomers are completely unprepared for the operational realities they encounter. So after two decades of mastering the accounting, marketing, and managing skills necessary to succeed as a consultant, she has organized them into one helpful volume called The Business of Consulting: The Basics and Beyond. Biech considers all phases of a typical consulting business, from start-up and attracting new business to subcontracting and balancing personal and professional responsibilities.

10. Getting Started in Consulting by Alan Weiss Consulting is clearly one of todays most rapidly growing and changing fields, with total worldwide revenues expected to reach over $100 billion in the year 2001. With more companies outsourcing many functions and a growing population of professionals pursuing the dream of self-employment, there is a great demand for information on how to start a consulting practice.

This book provides focused, practical guidance on beginning a consulting business that teaches you how low overhead and a high degree of organization can translate into a six-figure incomein many cases, while working from a home office. Along with a wealth of helpful charts and tables, here is comprehensive coverage of essential areas such as:

How to finance a consulting practice Marketing consulting services to corporate clients Writing proposals that sell Legal requirements for consulting practices Fee setting, billing, bookkeeping, and more

Getting Started in Consulting will prove an invaluable resource to attaining their goals.

- Chapter 5 -

Moving from Transaction Marketing to Relationship Marketing The Concept of Relationship Marketing

5.1. THEORY

This part seeks to make a state-of-the-art statement about relevant theory and based on this choose a more precise research question. The chapter starts with theories within the service industry and is narrowed down to theories about the Information Technology consultancy business.

More than a decade ago, Buttle (1996, p. 1) came to the following conclusion when talking about the evolution of marketing: Marketing is no longer simply about developing, selling, and delivering products. It is progressively more concerned with the development and maintenance of mutually satisfying long-term relationships.

Indeed, managing relationships with customers and other interest groups has become the core of marketing. In the age of globalization competition is increasing. With product and service quality becoming a common standard in many industries and being no longer a major source of competitive advantage, organizations are especially adopting a Customer Relationship Marketing (CRM) approach as a means of differentiating themselves. CRM

is a strategic orientation assuming that the customer prefers to have an ongoing relationship with one single organization rather than changing organizations. Based on this assumption and on the fact that it is less expensive to retain satisfied customers than to attract new ones, marketers focus on building and keeping groups of profitable, loyal customers by moving them into long-term, mutually beneficial relationships

(Sandhusen,2008).

In recent years relationship marketing has also become a key topic in the sports sector. While the concept of managing relationships with customers is well established in the sporting goods industry, sporting organizations have just started to adopt the concept of relationship marketing. The fact that many sporting organizations are nowadays acting like commercial enterprises has strongly influenced the adoption of relationship marketing, above all on the professional level. The shift to relationship marketing requires fundamental changes in a sporting organizations structure, a powerful customer database, a newly oriented marketing focus that understands stakeholders needs and expectations and markets the idea of relationship marketing inside an organization.

The marketing concept within the service business can be described as a philosophy. The service firm should, as firms in any business, focus all their marketing activities on the clients needs and demands. Social restrictions like norms, laws and agreements must also be considered. This view is called the market view, which differs from the production view where the activities are geared toward technology and product processes, Grnroos (2007:264). It is not essential to sell what the market in general demand; professional service firms have recognized the effectiveness of selling what specific clients want. The broader the target gets, the thinner impact the company make. Intimacy is the key word when selling services, according to Ferguson (1996:19-20).

For service companies, two aspects are always stressed; to maintain long relationships and gain new clients. To maintain relationships, interpersonal skills are required and should constantly be developed, and in order to gain new clients it is important to focus on critical skills needed in the process, Ferguson (1996:49). Much research has shown that the focus of marketing for a long time was put on attaining clients rather than on retaining them. In addition, research has also shown that it cost more to find new clients than to

maintain existing ones. The cost can be up to nine times more, Ward & Dagger (2007:281); Duncan & Moriarty (1998:3). There is no universal marketing strategy that works for all, hence it is interesting to discover what factors affect the choice of marketing strategy. This chapter seeks to discover the differences between strategies and the reasons for the choice. In what situations and under which circumstances might one approach be better than another?

5.1.1. Moving from Transaction Marketing to Relationship Marketing

Relationship marketing is the process of creating, developing and enhancing relationship with customers and other stakeholders. Relationship marketing refers to the development, growth, maintenance of long- term, cost- effective exchange relationship with individual customers, suppliers, employees, and other partner for mutual benefit (Boone and Kurtz, 2007). Developing excellent service quality creates the opportunity to build an on going relationship with customers. The idea of relationship can apply to many industries. It is particularly important in services since there is often direct contact between service provider and customers. The quality of relationship that develops will often determine its length.

Every marketing transaction involves a relationship between the buyer and seller in a transaction-based situation, the relationship may be quite short in duration and narrow in scope. The customer-seller bonds developed in a relationship marketing situation, on the other hand, last longer and cover a much broader scope than those developed in transaction marketing. Customer contacts are more frequent, a company emphasis on customer service contributes to consumer satisfaction.(Armstrong and Kotler, 2007). When a company integrates customer service and quality with marketing, the result is a relationship marketing orientation. Relationship marketing creates a new level of interaction between buyers and sellers. Rather than focusing exclusively on attracting new customers, marketers have discovered that it pays to retain current customers.

Relationship marketing usually results in strong economic, technical and social ties among the stakeholders parties thereby reducing their transactions costs and increasing exchange efficiencies included in relationship marketing which are not only buyers / sellers exchanges but also business partnerships, strategic alliances, and cooperative marketing networks. The relationship typically involves seller- customer exchange, but it could involve any stakeholders relationship

5.1.2. Interactive Marketing

Interactive marketing refers to buyers- seller communications in which the consumer controls the amount and type of information received from a marketer. Interactive techniques have been used for more than a decade; point-of-sales brochures and coupon dispensers are a simple form of interactive advertising. Today, however, the term also includes two-way electronic communication using a variety of media such as the internet, CDROMS, and virtual reality kiosks (Boone and Kurtz, 2007).

Interactive marketing frees communication between marketers and their customers from the limits of the traditional, linear, one way message to passive customers using broadcast or print ads. Now customers come to companies for information, creating opportunities for one-to-one marketing.

For example, each customer who visits a Web site has a different experience, based on the pathway of links he or she chooses to follow. These electronic conversations establish innovative relationships between users and the technology, providing customized information based on users interests and levels of understanding. People gain access to chosen programs and services

via their personal computers and telephones, and they can purchase products not only from stores but also via television or the internet.

5.1.2.1. Buyer-Seller Relationship

Relationship marketing depend on the development of close ties between the buyer, whether an individual or company and seller. This tie considers as the core elements of the buyer-seller relationship; the three promises that form the basis of relationship marketing and the four dimensions of relationship marketing model (Boone & Kurtz, 2007, Gronroos, Ch. 1994).). Relationships Marketing is based on promises from organizations that go beyond obvious assurance that potential customer expect. Asset of promisesout side the organization, within the organization and between buyers and sellers interaction- determine whether a marketing encounter will be positive or negative buyer-seller relationship.

5.1.2.2. Making Promises Most firms make promises to potential customers through external marketing, directed towards customers, suppliers, and other parties outside the organization. The promises communicate what a customer can expect

from the firm's goods and service. The promises must be both realistic and consistent with one another. Any firm that makes unrealistic promises can lead to a disappointed customer who may not want to buy the good or service again, (Zeithmal, V. et al. 2006, Boone and Kurtz, 2007)

5.1.2.3. Enabling Promises A company can follow through on its promises to potential customers through external marketing only if it enables these promises through internal marketing. Internal marketing includes recruiting talented employees and providing them with tools, training, and motivation they need to do their job effectively (Boone and Kurtz, 2007)

5.1.2.4. Keeping Promises Every customer interaction with a business reaches the moment of truth when a good or service is provided to the customer. Buyer-seller relationship following external and internal marketing, defines the point at which a company keeps its promises (Zeithmal, V. et al. 2006)

5.1.3. Dimensions of Relationship Marketing

Clearly, making, enabling, and keeping promises are crucial parts of relationship marketing process, but developing relationships require more than promises. All relationships depend on the development of emotional links between the parties. There are four key dimensions of relationship marketing: bonding, empathy, reciprocity, trust and tangibility (Chris and Graham, 2007).

5.1.3. 1. Bonding

Two parties must bond together in order to develop a long- strong relationship. Stronger bonds increase each party's commitment to the relationship (Jobber and Fahy, 2006

5.1.3. 2. Empathy

The ability to see situations from the perspective of the other party- is another key emotional link in the development of relationships (Chris and Graham, 2007)

5.1.3. 3. Tangibility

The physical facilities, equipment and appearance of personnel (Lovelock and Wirtz, 2006)

5.1.3. 4. Reciprocity

Every long-term relationship includes some give-and-take between the parties; one make allowances and grants favors to the other in exchange for the same treatment when its owned need arises (Chris and Graham, 2007).

5.1.3. 5. Trust

Trust is ultimately the glue that holds a relationship together over the long haul. Trust reflects the extent of one party's confidence in another party's integrity. When parties follow through on commitments, they enhance trust and strengthen relationships. Stronger trust leads to more cooperation between parties in a relationship (Chris and Graham, 2007)

5.2. Creating Value

Marketing has progressed from a simplistic focus on "giving the customer what they want to a pan- company orientation in which the specific capabilities of the business are focused around creating and delivering customer value to the target market segment. A key role of marketing in this new framework is to determine what value proposition to create and deliver to which customer. (ZeithamlV. et al. 2006)

5.2.1. Customer Loyalty

The relationship marketing ladder of loyalty, most companies direct the greater part of their marketing activity at wining new customers. But while businesses need new customers, they must also ensure that they are directing enough of their marketing effort at existing customers. So we can describe relationship marketing as a ladder-hierarchy of loyalty (Christopher M. et al. 2002).

In 1994 Gummesson defined relationship marketing as a process, a chain of activities. It represents a holistic attitude to marketing and thus reflected the shift from transactional aspects of doing business with a customer to relational aspects. The development of these relational aspects indicates the importance attached to the duration of the relationship, i.e. the longer the relationship lasts, the more profitable it becomes. To manage a relationship successfully over time necessitates proficiency in terms of process management, i.e. organizing your company in an efficient manner so that the customer's needs and wants can be satisfied in an effective way over time. Thus process management should offer the possibility of moving a transactional customer up the loyalty ladder (Payne, A., et al, 1997) to become a repeat buyer i.e. a loyal customer. There is a plethora of tools to aid loyalty management. Reicheld, (1994), refers to measurement systems, customer targeting based on lifetime value, and defection analysis and value proposition renewal.

5.3. The Marketing Strategy Continuum

Grnroos (2007) presents a marketing strategy continuum containing two different strategies. Placing relationship-based marketing at the one end, it is reasonable to place transaction-based marketing at the other end. Transactionbased marketing means that the firm concentrates at one transaction at the time with any client, without trying to create a relationship with that client. The transaction-based strategy is the old traditional marketing strategy, while the relationship-based strategy is a more modern and new approach.

The relationship-based strategy is often referred to as the new paradigm in marketing. The question of whether relationship marketing actually is a new approach in marketing has been discussed by many researchers.

According to Zineldin and Philipson, the relationship-based approach is one of the oldest approaches in marketing, but one of the least understood. While transaction-based marketing focuses on the sale and finding new customers, relationship-based marketing seeks to create a relationship with existing clients from the start. However, the main objective and goal of any marketing approach is to create exchange; hence the two approaches have

many similarities. Some firms may use elements from both strategies, but one will probably be the dominating one.

Service providers have close contact with their clients on a daily bases, hence it is easy to believe that the relationship-based strategy is used much more than the transaction-based strategy within service firms, Grnroos (2007:286). However, this aspect will be viewed through several authors, as well as through different angles.

5.3.1. The four Ps; still useful or old and limited?

The marketing mix management paradigm has dominated marketing thought, research and practice since it was introduced almost 40 years ago. Today, this paradigm is beginning to lose its position. New approaches have been emerging in marketing research. The globalization of business and the evolving recognition of the importance of customer retention and market economies and of customer relationship economics, among other trends, reinforce the change in mainstream marketing.

Relationship building and management, referred to as relationship marketing, is one of the leading new approaches to marketing which eventually has entered the marketing literature. A paradigm shift is clearly under way. In services marketing, especially in Europe and Australia but to some extent also in North America, and in industrial marketing, especially in Europe, this paradigm shift has already taken place. Books published on services marketing and on industrial marketing as well as major research reports published are based on the relationship marketing paradigm. A major shift in the perception of the fundamentals of marketing is taking place. The shift is so dramatic that it can, no doubt, be described as a paradigm shift. Marketing researchers have been passionately convinced about the paradigmatic nature of marketing mix management and the Four P model. To challenge marketing mix management as the basic foundation for all marketing thinking has been as heretic as it was for Copernicus to proclaim that the earth moved.

A firm that becomes dominating on the market has of course a huge competitive advantage. Especially big firms having the capacity of handle it. To reach there the firm must chose a marketing strategy and implement it well. For a firm who chooses a transaction-based approach the most

effective way is to combine the strategy with the marketing mix. The marketing mix with its four Ps has been well used in transactions with products and services. This approach has been very successful, and still is. However, the four Ps were from the beginning introduced for goods and tangible products, hence it can seem too restrictive for services, according to Grnroos (2007:287-288).

Some authors state that the marketing mix still makes a huge impact on modern marketing strategies. General criticism against the theory is that it does not consider relationships or the people involved. When the theory was first introduced in the 1960s by Burden the purpose was to describe important elements of a marketing program . The final four Ps that McCarthy simplified from Burdens work presented the most essential aspects for marketers to be able to satisfy their customers better than their competitors. It was when sales-orientation shifted to marketing-orientation that the theory developed. With this in mind the authors suggest that the marketing mix is an important ground base for all marketing, even for relationship-based marketing. Duncan and Moriarty (1998:1) agree and propose that the marketing mix have been the instructional guideline for most marketing. Each of the four Ps consists of sub-activities which all are likely

to encourage and create relationships. Without consideration of the four Ps an organization cannot create and achieve a good relationship with a client.

Firms that choose the relationship-based approach must let the clients become co-producers in the service process. This involves maximizing the clients involvement as well as customizes offerings, and is called relational exchange. This is important in order to better fit the clients needs and demand, Hunt et al. (2006:76). These interactive marketing activities can be

described as the activities outside the marketing mix. It is the interactive marketing that will be the dominating focus in the relationship-based marketing process. Some variables in the marketing mix are important in the relationship-based strategy too, but to a much smaller extent and they are not useful to support the interactive activities, Grnroos (2007:287-288).

Duncan and Moriarty mean that all elements in the marketing mix, i.e. the four Ps, each send messages. However, the messages do not intend to be

persuasive, which implies that there is rather a one-way communication than a two-way. One-way communication is more common in transaction-based marketing, Duncan & Moriarty (1998:2).

5.3.2. The importance of nurturing the resources

Another important factor when seeking potential clients through strategic marketing strategies is the price issue. The only thing that keeps the client attached to the service provider in transaction-based marketing is the service itself, the image of the firm and the brand. As soon as another competitor offers the same type of service to a lower price it becomes dangerous for the firm, Grnroos (2007:288). The success of a firm and its possibilities to

maintain competitive advantage lies in the firms resources. The resources are tangible and intangible entities that will result in market place positions if the firm handles and develops them effectively, Hunt et al. (2006:76-78). This implies that in transaction-based marketing the price sensitivity is high. On the contrary, a firm that pursue a relationship-based marketing strategy can create more value for the client than the actual service alone, hence the price sensitivity is not as high with this strategy, Grnroos (2007:288). Relationship-based marketing involves creating the best value out of its resources; hence it is even more important to nurture the resources when using this strategy. The relationships become relational resources as soon as they affect the firms ability to effectively provide offers with greater value for some market segments, Hunt et al.

5.3.3 The importance of feedback from clients

For the continuing progress and development of a firm it is important to be aware of how clients and others perceive the firm on the market. The client satisfaction can most easily be monitored by looking at the market share and to ask ad hoc clients about their satisfaction. Using transaction-

based marketing, the client satisfaction can directly be monitored, Grnroos (2007:288-289). Traditional marketing often involves market research and

sale results to monitor the success of the firms marketing strategy.

If the firm uses a relationship-based marketing strategy, the client satisfaction can be observed through its client database. The observation is focused on personal reactions and opinions directly from the clients; however this feedback is not always truthful. Still, without a client database the firm can never get as complete information as needed about the clients, Grnroos (2007:288-289). Today, technology makes it easier for firms to monitor their success among clients. This is one of many aspects that separate relationshipbased marketing from traditional marketing, Duncan & Moriarty (1998:4).

5.3.4. Two-way communication is more effective than one-way

Many aspects differ depending on which strategy the firm is using. It is up to the firm to decide which one fits best, and which one is most effective. For service firms in general, it seems to be more effective to use a relationshipbased strategy, mainly because services are intangible offers. In addition, Ward and Dagger (2007:282) mean that in business where the client easily comes in contact with the service provider, relationships are more likely to develop, Grnroos (2007:33-35). One-way communication is not as effective as a two-way, hence communication and cooperation can help firms to focus their efforts on acquiring, retaining and grow relationships with their clients. According to Duncan and Moriarty, communication enables new marketing approaches to differ from the approaches emphasize two-way traditional ones. The new Duncan &

communications,

Moriarty (1998:1). This implies that a service firm must go beyond the traditional marketing approaches in order to become even more competitive on the market. However, the degree of relationship-based marketing depends on,

amongothers, the relevance for the client as well as for the type of services provided by the firm, Ward & Dagger (2007:282, 286).

The marketing strategy continuum shows how unclear and thin the lines between traditional transaction-based marketing and relationship-based marketing are. Many aspects are considered in both strategies. The main aspect that differ transaction-based marketing from relationship-based is that the relationship view use a two-way communication instead of a one-way. This strategy is also able to create value and experiences, along

side the services. It is an interesting approach; hence it seems necessary and important to go deeper into the relationship concept.

5.4. The Concept of Relationship Marketing Relationship marketing is a form of marketing developed from direct response marketing campaigns conducted in the 1970s and 1980s which emphasizes customer retention and satisfaction, rather than a dominant focus on point-of-sale transactions. Relationship marketing differs from other forms of marketing in that it recognizes the long term value to the firm of keeping customers, as opposed to direct or "Intrusion" marketing, which focuses upon acquisition of new clients by targeting majority demographics based upon prospective client lists. Relationship marketing refers to a long-term and mutually beneficial arrangement wherein both the buyer and seller focus on value enhancement with the goal of providing a more satisfying exchange. This approach attempts to transcend the simple purchase-exchange process with customer to make more meaningful and richer contact by providing a more holistic, personalized purchase, and use the consumption experience to create stronger ties.

Many researchers suggest that relationship marketing results in better service quality and lower costs. Firms creating long-term relationships with their clients find it easier to retain the clients as well as improve their profitability, than firms utilizing a transaction-based approach, Pelham (2006:178). The principles of relationship marketing are that successful business

relationships enhance client satisfaction and thereby develop the performance of the firm, Chumpitaz Caceres & Paparoidamis (2007:842). The importance must lie in obtaining a share of the client business rather than a share of the market, Ward & Dagger (2007: 281-282).

Today relationship-based operations can be spotted in almost every organisation. As Zineldin (2002:547) points out, management and methods for keeping clients. theory, and less

marketers need to reconstruct their

Relationships are very complex, both in practice and

understanding of it leads to fewer possibilities of influencing its development, Ward & Dagger (2007:281, 287). Firms must understand how relationships are created and what factors that can affect it. The practice of relationship marketing has been facilitated by several generations of customer relationship management software that allow tracking and analyzing of each customer's preferences, activities, tastes,

likes, dislikes, and complaints. For example, an automobile manufacturer maintaining a database of when and how repeat customers buy their products, the options they choose, the way they finance the purchase etc., is in a powerful position to develop one-to-one marketing offers and product benefits. In web applications, the consumer shopping profile is built as the person shops on the website. This information is then used to compute what can be his or her likely preferences in other categories. These predicted offerings can then be shown to the customer through cross-sell, email recommendation and other channels. Relationship marketing has also migrated back into direct mail, allowing marketers to take advantage of the technological capabilities of digital, toner-based printing presses to produce unique, personalized pieces for each recipient. Marketers can personalize documents by any information contained in their databases, including name, address, demographics, purchase history, and dozens (or even hundreds) of other variables. The result is a printed piece that (ideally) reflects the individual needs and preferences of each recipient, increasing the relevance of the piece and increasing the response rate.

3.4.1 The Relationship Lifecycle

Client relationships can be created and developed through a four stage marketing approach. It is the client relationship lifecycle that contains four phases, which together develop the client relationship. Each of the four levels in the relationship lifecycle implies a high level of cooperative efforts and an exchange of information, experiences and values. Zineldin, as many other researchers, compare the relationship with a marriage or romantic relation. Zineldin (2002) quote Levitt (1983) stating how good the marriage is depends on how well the relationship is managed. Through Kanter (1994) he states that relationships between firms, just like marriages between couples, begin, grow, and develop - or fail. What is different between a marriage and a business relationship is that a firm can have relationships with several potential partners at the same time. The relationships should be considered as a portfolio of relationships, since every relationship affects each other, Zineldin (2002:552). The four phases are the discovery phase, the development phase/basic relationship phase, the commitment phase, and the loyalty phase/ongoing strategic business relationship. Appendix 1:2 shows the lifecycle with its four phases that together develop a strong relationship.

5.4.2. Creating interest and a relationship

In the initial stage, the discovery phase, the partners are interested and attracted to each other. They identify their needs and want to initiate a strategic relationship arrangement, Zineldin (2002:552). The objective of marketing is to create interest in their services. Effective marketing

approaches are advertising, sales promotion and public relations, the so called traditional marketing functions. Traditional marketing activities include making promises to the clients, whose experiences are built upon expectations of the service provider. These promises must correspond to the clients needs, values and wishes. In addition, word-of-mouth communication that spread if the

communication starts here, and it is this

promises are fulfilled or not, Grnroos (2007:284). The critical aspects is whether the partners discover that the relationship is working effectively and successfully or if it does not answer their demands, which either lead to the next phase or the client leaving to competitors. In the second stage, the development phase, the interest from the clients and promises from the service provider should be turned into sale, Grnroos (2007:285). The client has already agreed to a solution, Zineldin (2002:553), and the focus lies in making the client accept the offers to make a purchasing

decision, Grnroos (2007:285). The goal is to create the relationship and discover whether the relationship will be mutually beneficial, Zineldin (2002:553). The traditional marketing activities are still useful, mostly in terms of sale, but interactive marketing activities become more useful at this stage. These activities start whenever the client gets in contact with the firms resources, Grnroos (2007:285). Because of the interactions the partners will gain more knowledge about each other and understand each others norms. If the outcome turns out good, the relationship will probably develop and they can move to the next stage, Zineldin (2002:553).

5.4.3. Keeping and maintaining the relationship

In the third stage of the life cycle, the commitment stage, the promises must be fulfilled and long-term client relationships should be achieved. The

traditional marketing approach have very little, if any, affect here. Instead it is the interactive marketing activities that are responsible for success or failure. The service firms objective is to make the client realize that the firm can satisfy their needs and that they can feel trust,

Grnroos (2007:285). The firm is willing to offer the client more and

facilitating services. There is a relational continuity between the partners, Zineldin (2002:554, Grnroos (2007:285).

The last stage, the loyalty phase, contains a strong and loyal relationship. The goal is to maintain and stabilize the relationship. The partners do not need to have as close contact as before, since expectations, involvements and strategies have been well managed in the earlier stages. This loyal client relationship helps the firm to identify them selves and build a network of clients as well as to continuously strengthen networks through interactions and communications. Client databases are useful tools for firms to keep a memory of every client and their needs, Zineldin (2002: 554-555). 5.4.4. Managing the lifecycle

The service provider must, at any stage of the life cycle, have a clear and strategic plan for dealing with the loyal client, in order to become competitive, Zineldin (2002:555). Many firms put a lot of emphasize on traditional marketing activities. Firms make promises to clients that are not generating the quality expected, Grnroos (2007:285). However, it is not enough to just introduce the client to its services; the firm

must show what value they can offer the client, Zineldin (2002:555). When clients are lost the firm must replace them with new clients. It always requires more effort and a bigger budget for traditional marketing activities; hence the focus should be put on keeping the clients and put effort and money on effective interactive activities. In addition, there are no traditional marketing activities that can ensure that the clients will stay with the firm, Grnroos (2007:285).

The model is a useful tool for firms to describe, manage, adjust and suggest marketing strategies. From a strategic marketing point of view, the lifecycle model helps to understand the behaviours of the partners at each stage, Zineldin (2002:552). Because relationships are complex and divers, they must follow the steps in the lifecycle. A relationship cannot just be

created without efforts to constantly refreshing and nurturing it. There are still some aspects that affect the clients perception of the firm, and it is important to understand them as well.

5.4.5. Technical and functional dimensions The relationship theory by Grnroos suggests that relationships include many more aspects than just the clients purchase from the supplier. Various aspects of service quality are far from the only aspects affecting the loyalty. Satisfaction is based on many dimensions, and quality is just one of them. The perception of the quality is often made through a comparison between what the customer consider the service should be and what the actual service provider offered, Chumpitaz Caceres & Paparoidamis (2007:837, 840841). Appendix 1:3 shows how the technical and functional dimensions create relationship quality which in turn results in loyalty.

The technical dimension in the model reflects the result of the service itself, while the functional aspect consider the way the service is provided. This includes, among others, attention and professionalism. The model provides an image between the two dimensions that influences the quality perception depending on if the customer considered the service to be good, bad or neutral. Therefore the model becomes dynamic in that sense, since the image perception changes over time. The model suggests that the client is not only interested in the outcome of the service process, but also in the process itself, Chumpitaz Caceres & Paparoidamis (2007:840-841).

5.4.6. Quality, commitment and trust Relationship quality is considered to increase as satisfaction, trust and commitment also increases. These dimensions have shown to have an impact and effect on the loyalty as a relationship outcome, Chumpitaz Caceres & Paparoidamis (2007:842-846). Research has also shown that the relationship itself increases client satisfaction and loyalty to the perception of quality, Ward & Dagger (2007:282). service firm, as a The commitment

arises when the buyer or the supplier consider the relationship them in between to be so important that efforts must be made to maintain it in the long term. However, there is a need for mutual benefits from the relationships; a relationship-based marketing strategy is only useful when the rewards overweight the costs, Hunt et al. (2006:77). The extent to which clients and service providers trust their channel partners affect the longterm orientation. In fact, trust is a very important indicator in relationship commitment, Chumpitaz Caceres & Paparoidamis (2007:842846). This is supported by the commitment-trust theory presented by Hunt et al. (2006) which argues that clients want relationship partners that they can trust, who share the same values and agrees with

them in certain aspects. For the client, they propose, trust is associated with

reliability, integrity and competence, Hunt et al. (2006:75). To maintain success in relational exchanges, trust and commitment are essential variables in influencing client loyalty, Chumpitaz Caceres &

Paparoidamis (2007:842-846). 5.4.7. Making the relationship last

It is suggested by many authors that the client satisfaction increases if the client uses the same service provider several times or if the service is provided over an extended period of time. In addition, the relationship strength would grow over time. Ward and Dagger (2007) made a research about these assumptions and found that it is true in highly

personal services, and where the client receive the service from the same provider several times and for long periods of time. In general, it is the duration, the frequency and the importance of the relationship that determines its strengths between the client and the

service provider. Therefore, the service provider must understand which dimension/s the client finds important in order to develop the right strengths of the relationship. However, it is not always easy for the service provider to know this. The service provider has no or very little control over the clients inherited

experiences and it is hard to

measure individual perspectives. Using a

relationship portfolio or a client database helps to keep direct knowledge of the clients satisfaction level, Hunt et al. (2006:76).

5.4.8. A stable relationship still needs to be developed

Using this model, research has shown that the functional quality dimension which include communication and delivery, and the technical quality dimension which involves the actual service provided, have a direct effect on relationship satisfaction. However, some researchers still argue that trust and commitment only reflect the level of commitment, without driving and developing it, Chumpitaz Caceres & Paparoidamis (2007:842-846, 854-855). These arguments are probably true in both ways. If a client feel trust for a firm and is committed to its services, it can depend on the fact that the firm has provided good services and showed the client consideration. However, more efforts are needed to keep the client in the long term. This is probably what some researchers and authors mean; that just trust and commitment do not develop the relationship; it just keeps it stable. Since the market is changing and value perceptions fluctuate, a stable relationship is not enough.

5.4.9. Critics and Conclusions of Relationship Marketing

The nature of marketing constantly changes. Traditional external marketing is of course still useful, however today the marketing process is much broader and more effort is expecting of the whole organization. To develop existing client relationships the importance lies in an ongoing exchange of services, and information, as well as social exchanges, Grnroos (2007:463). A relationship can never develop and strengthen if the stages that built it are week. Relationships demand ongoing efforts, from the beginning of stage one to as long as the relation is of mutual benefice. As Wilde (1996:20) stated, this impleis that without the traditional marketing from the first place there would be no client to keep and no relationship to maintain.

5.5. Consultancy Services

The expression consulting services defines services of an intellectual and advisory nature provided by consultants using their professional skills to study, design, and organize specific projects, advise clients, conduct training, and transfer knowledge.

A consulting firm sells time and adds value for clients by hiring out its only factor of production (professionals), thereby offering the client flexibility. Consulting firms guarantee to clients the skill of professionals as needed and as long as needed, as well as the supply of reserve professionals. The nature of this industry implies that the supply of services to a specific client is discontinuous and that situations of over- or under capacity are the most serious problem confronting consultants.

Outsourcing of experts, economies of scope, and advances in IT have been the three main drivers of consulting firms profitability in the past 30 years.

5.5.1. OUTSOURCING To reduce fixed personnel costs, outsourcing of technical and professional staff has been widely adopted, especially in countries with flexible labor legislation. Outsourcing is mainly used in advisory services of a technical or managerial nature where cohesiveness and team integration are less important for the quality of the services than for the study or design of a complex investment project. Although it reduces the firms fixed costs, the disadvantage of contracting outside experts is the potential to create a situation in which an organizations key staff predominantly comprises outside individuals possessing the required expertise but having no experience working as a team. To mitigate possible negative effects on quality, consulting firms increasingly adopt Quality Management (QM) procedures, and clients themselves have started asking consultants to

include these procedures in their projects.

5.5.2. SCOPE ECONOMIES

It is advantageous for a consultant to sell many different services to the same project or client because it allows the consultant to spread its fixed costs across a larger sales volume. For example, it is more efficient to have the same expert travel to a client and perform several services, that

is, to spread a larger sales volume across the fixed travel costs. It may also be convenient for the client to purchase all services from one consultant or, at least, to let one consultant be responsible for the project.

Scope economies and one-stop shop arguments have led to a polarization of the consulting services industry, with large,

multidisciplinary consulting outfits and extremely small, specialized firms occupying the same market segments. To achieve economies of scope, for

example, some accounting firms have developed into organizations of more than 50,000 employees and offer themselves as management consultants, lawyers, and IT experts. Similarly, engineering consulting firms specializing in infrastructure have expanded into the fields of environment and institution strengthening. Offering related services can create conflicts of

interest for a consultant of which the Borrower must be made aware .

5.5.3. INFORMATION TECHNOLOGY

Innovation in information technology (IT) over the past two decades has had a dramatic impact on the execution of consulting services. Clients have resorted to consultants for assistance in selecting and adopting

software, computers, IT, and telecommunication systems. Consequently, consultants have been at the forefront in maximizing the benefits of automation for their own organizations. For example, the time needed to prepare a technical drawing formerly required up to 100 hours, and, in many cases, has been reduced to not more than 10 to 20 hours. Moreover, direct costs of assignments, such as for transmission of files, text and drawings, and telecommunications, have fallen substantially, especially if executed wisely.

Today, consultants often have virtually no resources bound in physical capital, except for computers, software programs, and access to IT networks. Although large investments have been made in IT, the IT used by consulting firms can be regarded as available to all consultants. In spite of IT investments, thanks to scalability, physical capital has not become an entry or exit barrier for consultants as it has for manufacturing firms. 3.5.4.

5.5.4. QUALITY MANAGEMENT

Quality management (QM), or quality assurance, designates all planning, preparation, work, checking, and recording actions necessary to achieve the desired standard of service. These activities should not be considered additional or optional but an integral part of doing the job properly. QM is based largely on common sense and good business and management practices.

The requirements of an effective QM system are set out in, for example, the ISO 9000 standards, which define the technical and administrative procedures and systems that a well-run organization should employ to

provide a consistent standard of service and meet the Borrowers needs. Evidence that a satisfactory QM system is in place is given on the basis

of certification by an accredited independent body, which confirms that an organization has a QM system that conforms to all established standards and is appropriate for the services it provides.

QM is an effective tool to identify defects and errors as well as their origin and author.

QM is also an effective tool for mitigating the negative effects resulting from some consulting firms excessive hiring of technical and professional contract staff

The focus so far has been on the service business, and how to reach potential clients through different methods and considerations. Service firms like airports and hairdressers provide their customers with intangible offers but still visible things. Information Technology consultants do not have visible offers, since their knowledge and expertise in terms of advises and methods are their offerings. Perhaps there are even other aspects for IT consultancy firms to consider since they distinguish themselves from general service firms?

When purchasing a consultancy service it is rather the person than the individual service that is being bought, Arndt & Firman (1981:185). In general, it is difficult to sell and market professional service offerings. The clients feel insecure of what the firm delivers, and the firm may find it hard to know what it is the clients need and demand. Since the

firms offerings are not products that can be tested before hand, the firm must sell a promise, Alvesson (2004:101-102). For consultants it is

essential to be able to handle social relations, not only for reaching and keeping clients, but also in a symbolic sense. Many clients prefer to stick with firms they have experience of, hence the importance of nurturing

relationships, Alvesson (2004:100-101). The consultants job is to sell appropriate services to the clients in order to solve their problems. By providing the right solutions at the right moment value is being added to the consultant-client relationship, Pelham (2006:175). There are different methods to reach strong relationships, but a broad network is a good start. Surveys have shown that consultants reach and keep clients mostly through personal selling, and less through market activities used by the whole consultancy firm, Arndt & Firman (1981:185-189).

5.6. Information Technology Consulting Services

Information technology consulting (IT consulting, Computer consultancy, Computing consultancy, technology consulting or business and technology services) is a field that focuses on advising businesses on how best to use information technology to meet their business objectives. In addition to providing advice, IT consultancies often implement, deploy, and administer IT systems on businesses' behalf There is a relatively unclear line between management consulting and IT consulting. There are sometimes overlaps between the two fields, but IT consultants often have degrees in computer science, electronics, technology, or management information systems while management consultants often have degrees in accounting, economics, Industrial Engineering, finance, or a generalized MBA (Masters in Business Administration). According to the Institute for Partner Education & Development, IT consultants' revenues come predominantly from design and planning based consulting with a mixture of IT and Business Consulting.

5.6. We can identify six types of companies that provided IT consulting

services:

5.6.1. Forces that Shape IT Consulting: A Framework

3.6.1.1. Drivers of IT consulting growth

Underlying Business Context is a major driver of IT consulting growth. It is not surprising that the IT consulting industry grew during strong economic periods and contracted when economic conditions withered. The exceptional boom times of the late 1990s illustrated the role of economic strength. Another business context factor has been the adoption of outsourcing as a preferred business practice. When (or if) that pendulum swing goes out of favor, the IT consulting industry will face a severe challenge. The trend to more integrated and coordinated global competition over the past ten years acts as another example of the role of business context. Globalization of competition fueled the need for more efficient global supply chain capabilities, knowledge sharing and leveraging decision capabilities.

The degree of Competitive Pressure for Adoption of new IT initiatives creates IT consulting demand. This type of demand originates from customers, shareholders, regulators or others. Equities markets are becoming increasingly impatient with companies that do not return their cost of capital.

In industries like the automotive industry, key players emphasize initiatives to digitize the entire corporation to achieve structural changes and strategic benefits in supply chain performance, vehicle design and introduction, and customer service. If these kinds of conditions were the only ones that mattered, they would certainly drive IT consulting growth.

The Life Cycle of Adoption of an IT initiative or family of initiatives affects IT consulting growth. The role of IT consulting varies at different phases of the Stages Theory S-curves. During the early phases, IT consulting

develops new capabilities, takes risks and seeks early adopters striving to achieve longer-term benefits that accompany being first to market. expansion phase for IT consulting delivery comes after The the

concept has been proven and becomes a competitive imperative among players. At later stages in the life cycle of initiatives, IT consulting firms may contract, disappear or move on to other applications depending on their positions and capabilities. upgrading incorporate of the For example, the Network era required the legacy \ applications and integrated portfolio data to

batch-oriented time

real

messaging,

base

technologies. The industry embraced the ERP approach to accomplish these

upgrades in the form of large IT package implementations.

Now most

companies have accomplished these application portfolio upgrades, and are turning towards customer sensing and responding IT capabilities.

Many IT initiatives place a high Degree of Process/Culture/Behavioral Change on the adopting organization. Indeed, most observers point out that when it comes to challenges of IT innovation its the organization stupidor in vogue today: culture is the only thing.In other words, understanding and controlling the technology is just the tip of the iceberg. But, initiatives vary in the degree of the organizational challenges they pose. A transaction processing upgrade may present little behavioral

challenge to the organization. On the other hand, adopting a distributed ERP application in a global organization will surely require extensive redesign of planning and decision processes as well as resolving changes in management philosophy, approaches to empowerment and communication patterns.

The Change Management Capabilities of the adopting organizations are

the critical companion factors to the degree of change required. Companies and industries with little experience and capability in handling that require organizational and process changes will typically turn to outsiders for that help. The growth of business process improvement consulting emerged

partly because of the lack of capabilities to do this kind of thinking and work inside the companies.

IT initiatives differ in the Degree of IT Architecture/Infrastructure Change Required. The extent of these technology and process changes clearly

emerges when an IT paradigm shift occurs, such as the shifts from mainframe transaction to distributed processing and then to network centric operations. But, these challenges may also apply to a new application within one of these larger eras of IT development. For example, IT-based customer self-service systems are proving that not only can fully automated self-service be more efficient, but it can be better in the eyes of the customer. These kinds of new IT initiatives require the functional organization of marketing and sales to re-think many of their traditional assumptions about providing customer service. 5.6.1.2. Enablers of IT Consulting Competitive Change

The intensity and breadth, or extent of new

(IT) Initiatives influences Gaps in

opportunities for new IT consulting entries into the industry.

supply to meet demand for services associated with existing applications in a growth phase of adoption may motivate new IT consulting providers. For example, business process design got its start during the days of heavy demand for ERP. Other IT service providers start up around new

application areas. Informatics is a firm helping to pioneer applications in the biology and pharmaceutical worlds. Bioinformatics applications stimulate the creation of new IT capabilities that incorporate and leverage the new understanding of biological processes.

The extent of Structural Protection of Current Providers plays a significant role in either enabling or discouraging emergence of competitors. IBM

bundled IT consulting with their leases. It was only after IBM unbundled consulting services and open consulting industry really bloomed. standards were achieved that the IT Today, degrees of structural protection

can still occur for any number of reasons including favored access to proprietary technology, close integration with a legacy installed base or strategic partnerships that implicitly define a market and a position within it.

The recent antitrust law suit against Microsoft addresses further disclosures of ways to integrate software with Microsofts proprietary Windows Operating Interfaces). System(i.e., disclosing APIsApplication Programming

A third factor that enables structural change in IT consulting exists in what service providers do to give a competitive advantage to their clients. The Roles of Scale, Speed, Proprietary Knowledge and Cost can all be important. But it is the predominating mix of these that is significant. For

example, at a time in IT consulting history when scale and proprietary knowledge are critical, it is less likely that new competitors will emerge. This characterized the years that IBM held the lions share of the IT consulting

market.

At other times, speed of customization might be most important.

This condition invites newer and smaller service providers into the market. When cost is most significant, opportunities exist for IT consulting providers to achieve competitive cost levels with creative strategies, such as sourcing from or partnering with offshore service providers.

5.7. Marketing Strategies for Consultancy Firms

Ask any small business owner about their most challenging business task and at the top of that list will be "marketing" or "promoting their business." Whether you are a start-up or an established business, the question remains the same: "How do I attract more clients?"

Independent agents or consultants have an additional set of challenges--time, money and resources. As a one-person show, you don't have the luxury of relying on employees to assist you in your marketing efforts or spending thousands of dollars on advertising. To maximize your exposure, you have to be a little more unconventional and creative in your marketing methods. Read the tips below to help you attract more clients and get people talking about your products or services--all without breaking the bank.

First, decide which marketing methods will work best with your personality. If you are not a natural-born speaker, you might want to steer away from giving presentations and workshops. Conversely, if you love talking and

teaching others, you might want to start pods cast or teach a seminar. You will appear more authentic when you enjoy what you are doing. Prospects can easily recognize when someone is not comfortable or being fake. Therefore, assessing your natural talents and abilities beforehand will dramatically improve the effectiveness of your marketing campaign.

Second, build your list of email subscribers. Marketing is a numbers game: the more readers you have, the more people you can reach. If you are looking to increase your email list, start by offering an incentive for signing up for your e-newsletter such as a free e-book or special report. Also, consider creating a partnership with complimentary businesses. For example, an e-book consultant might collaborate with a marketing consultant, or a social media consultant might team up with a business coach. You can write an article for their ezine or offer a free giveaway on their teleseminar.

Third, write articles to strengthen your credibility. Your ability to sell services often comes down to your reputation. When you are credible, people view you as a leader and "authority figure" in your industry.

Demonstrate your expertise by writing informational articles for your local Chamber of Commerce newsletter, the website of a professional organization you belong to, or your community newspaper. You can also submit articles online to free article content directories.

Lastly, build a community to support your brand. The success of popular sites like Facebook, Twitter, MySpace and LinkedIn proves that people are looking to interact with others and share their opinions. Starting your own community will not only generate word-of-mouth referrals, but it will also create a platform for you to promote your services. Sites like Facebook and Ning.com allow you to create online communities, according to your topic of choice. For example, if you are a career transition consultant, launch a group for career changers or "moonlighters." You can also organize meetings in your local community through sites like Meetup.com.

Marketing your services does not mean you have to spend a fortune on expensive ads or elaborate advertising campaigns. The goal--regardless of your budget--is to work smarter and maximize the resources that are

available to you. With a little creativity, you can make a name for yourself and carve out your own niche in the marketplace.

A client often asks for help only when it is needed. A consultant seeks to provide help all the time. Consultancy firms, both big and small ones, use a combination of methods to reach potential clients. In general, it is the size of the consultancy firm that decides which methods are being used more frequently, but normally all the methods are used to some extent.

The marketing process includes both advertising and personal contact. The cheapest and easiest approach for a consultant to get projects is when the client turn to the consultant, Arndt & Firman (1981:196-198), or through recommendations and referrals. A good job leads to another, Lindberg (2000:125). For this to happen the consultant or the consultancy firm must be well known on the market, or at least in that specific client segment. The first step to get there is to develop a good marketing strategy, which will cost lots of money but in turn can generate profit in the long run.

5.7.1. Indirect and Direct Marketing Approach

There are two general types of marketing approaches consultants often use; indirect or direct marketing. The indirect marketing strategy focuses on making the firm more known on the market and strengthens their reputation. The direct marketing is focused to one or several specific clients and the approach should result in an inquiry or offering. Appendix 1:3 presents the different activities that are useful when using direct or indirect approach.

Turning to new clients through indirect marketing activities are much more expensive, however it can become a good income later. This is not always the case though. Many firms make the mistake of putting a lot of energy on attracting new customers but then they tend to put less emphasize on maintaining a strong and lasting relationship. This is what is called the second act by some researchers, i.e. the step a firm must take to keep their client once managed to get them. It is the brand that attracts a client, but it is the meaning of the brand and the clients experiences that will strengthen the bond with the firm.

5.7.2. Group communication

For a consultancy firm to increase their market share they can attract new clients, do more business with existing ones, or reduce client declines. The two latter ones both include direct marketing towards existing clients, Berry & Parasuraman (2001:132-133). Often all these three approaches are combined with each other, McLarty & Robinsson (1998:258-259).

The first approach, indirect communication, is also called group communication, Wilde (1996:18-19). It is used to strengthen the firms image through commercials and advertising directed toward a large group of clients. The goal of the firm is to make potential clients aware of their

firms quality and thereby remember the firm. Hopefully it will result in future business with the client. There are different ways the consultancy firm can use. The firm must have good contact with the media. Over all the indirect marketing approach should highlight the firm without turning to specific clients. However, the firm can control and choose their promotion and marketing so that it will interest a specific type of clients. The line between the indirect and direct marketing approach is not thick.

Shortly after the indirect approach the direct approach should start.

5.7.3. Individual communication

The second approach is direct communication or individual communication. This approach is the follow-up to indirect communication, and more specific clients are the target. The approach includes meetings or friendly lunches. The consultant presents its services and seeks to get projects. This can be both formal and informal; the importance lies in making a good relationship with the client. A consultancy firm can also use a more detailed direct communication approach. What this suggests is a full day seminar. The subject for the seminar is chosen before hand, and the participants pay a fee for the presentations, materials, lunch and hand outs. It can be an expensive approach for the firm to reach potential clients, however many consultancy firms see it as an investment, Wilde (1996:18-19). Shortly after the seminar the consultancy firm must do follow-ups for potential clients. However, giving away too much information at the seminar reduces the opportunity to contact the client afterwards, Ferguson (1996:21). Professional firms in general prefer the seminar approach because it is an opportunity for a firm to present their most essential issues for the

client and in the same time

demonstrate their knowledge and expertise.

These events also help the firm to develop their tools for better marketing, Ferguson (1996:22).

5.7.4. Hidden marketing

The third approach is called the opportunistic approach which is also a form of direct communication. The focus lies in being out there - at the right place and right time, Wilde (1996:18-19). Alvesson calls this type of marketing hidden marketing. The consultants keep their eyes open for new possibilities and try to convince their client that they need their services. Many firms also tries to get more projects during existing ones, by marketing them selves through existing clients. However, consultancy firms must be careful when they seek for possibilities. The clients can get irritated and thereby close the relationship, Alvesson (2004:103) To keep existing clients, more efforts are needed than just keeping a strong relationship. The consultancy firm must invest in sales management programs which include constant learning and developing. Training in terms

of improving listening skills, diagnostic skills, and problem solving skills, are

necessary to develop and maintain close partnerships, Pelham (2006:178). In addition, clients expect the firm to be up-to-date and use modern solutions. Clients are looking for services that make a significant difference to their business. Making a client feel special is a keystone to any strong relationship. The activities does not need to be complicated or expensive, it is enough to give the client that little extra they did not expect, Ferguson (1996:53). Overall, consultants gain advantage if they are aware of every affair that occurs in the business. When an opportunity comes the consultant should be the first one the client meet and thereby the first they turn to for help, Wilde (1996:18-19).

5.8. Guerilla Marketing for Consultants

These days, clients choose the best consultants, not the best-known ones. Todays clients seek talent, not firm names. The competition for new work is not between firms, but between people and their ideas. Consultants marketing efforts havent changed in response to this reality. In fact, their marketing hasnt changed much in decadesexcept to get slicker, flashier and more expensive. The competitive battle in consulting is no longer about vying for projects; its about competing for relationships with those who award those projects. Thats what Guerrilla Marketing for Consultants is about: how to win profitable work from a new, more discerning breed of consulting clients.

Guerrilla Marketing: Everything you do to promote your practice, from the moment you conceive of it to the point at which clients are doing business with you on a regular basis.

Marketing involves more than just trying to sell your services; it affects how you run your practice, bid on projects, perform for clients and build relationships. Simply put, marketing is everything you do. Your firms

name, its services, methods of serving clients, pricing plan, the location of your office, and how you promote your practice are all part of guerrilla marketing. And there is much more, including the clients you choose to work with, how you answer the telephone, even how you design your invoices, envelopes and proposals.

5.8. Guerrilla marketing bears little resemblance to the traditional metoo marketing used by most consultants in six distinct ways:

Traditional Marketing Central to the business Consultant-focused Invest money Show up and throw up Grow revenue One size fits all

Guerrilla Marketing Is the business Insight-based Invest time, effort and energy Listen and serve Grow profit One size fits none

Guerrilla Marketing Golden Rule: To be successful as a consultant, you must have something to say and someone who is willing to listen to you. 5.8.1. Seven Effective Steps for Guerrilla Marketing

Type the term consultant (or any variation) into your favorite search engine and look at the number of consultants within a clients immediate reach. Its enough to make any consultant feel like a small fish in a huge pond. The consultants challenge is to find the right client at the right time. You may get lucky and stumble onto a golden client opportunity. But thats the exception, not the rule.

Attracting the right clients precisely when they need your help requires a well-planned marketing strategy. Some consultants run their practices with no marketing plan at all, which is a sure-fire way back to a corporate job or to the unemployment line. You can find dozens of approaches for creating a marketing plan, but guerrillas keep it simple.

They start with a one-page plan that consists of seven sentences: Sentence one explains the purpose of your marketing

 Sentence two explains how you achieve that purpose by describing the substantive benefits you provide to clients Sentence three describes your target market(s) Sentence four describes your niche Sentence five outlines the marketing weapons you will use Sentence six reveals the identity of your business Sentence seven provides your marketing budget.

In side-by-side comparisons, consultants look pretty much the same to clients because consultants tend to mimic each others marketing identities. Differentiating your practice from the competitioneven slightlycan bring you more clients, higher fees, and lower cost of sales. Yet too often, consultants attempt to distinguish their practices in ways that have little or no influence on clients buying decisions. The result? Clients see consulting services as a commodity.

Distinguish your practice by avoiding the use of the so-called differentiators below. 1. Quality service

2. Best price 3. Methods, tools, and approaches 4. Service responsiveness 5. Consultants credentials 6. Importance of the client 7. Testimonials and references

One or more of these differentiators is included in 90% of consultants promotional material. Instead, let guerrilla marketing help you develop new, creative approaches for standing out in the crowd.

5.8.2. Follow the 60/30/10 Guerrilla Marketing Formula

Guerrilla marketing is about balance. Allocate your marketing budget to target three groups of clients using the 60/30/10 rule:

Current clients: This is the smallest of the three groups, but existing clients should generate the largest percentage of your profits. Plan to devote 60 percent of your marketing efforts here. Prospective clients: Your goal is to convert prospective clients into clients if they fit your targeted client profile and have problems that you can solve. Commit 30 percent of your marketing resources to win work from this group. The broader market: This includes everybody in the business world not represented in the first two groups. Invest 10 percent of your marketing resources in the broad market. Devoting resources to this group is less efficient, but the effort has the potential to generate important contacts and leads. The 60/30/10 percentages are rules of thumb, not gospel. Every consulting practice is different, so one needs to customize its marketing approach to fit ones objectives. 5.8.3. Guerrilla Marketing = Fusion Marketing

Guerrillas use an array of marketing weapons, working in unison, to get their messages through. They launch multiple marketing weapons simultaneously, and they track and respond to results.

For example, if you planned to do three client seminars but the first two bombed, cancel the third one or make adjustments to turn it around. Guerrillas wouldnt have everything riding on one seminar series. Instead, they have multiple marketing weapons in the works at the same time.

Patience is a virtue in marketing. You may not see results from your efforts for several months, but dont give up. When your tactics start to work, youll build momentum. Your targeted clients will begin to know you, and your telephone will ring. Create marketing tactics that support, reinforce, and cross-promote each other. Reference your articles prominently in your proposals, feature your Web site in your direct mailings, and publicize your survey results in your email signature line. Your goal is to imprint multiple, positive impressions of your practice in your clients minds. Clients equate success and competence with sustained presence, so blanket your target

market(s). For a cumulative effect, hit your markets simultaneously on many fronts. When clients repeatedly see your articles, read about your speeches, and see the results of your research, they will accept you as an expert and want to work with you.

5.8.4. Sell Yourself First

The role of a consultant is not unlike that of a surgeon. In buying your services, clients may feel they are putting the health of their businesses, their finances, and their careers in your hands. So your first job is to earn their confidence. You may have reams of relevant case studies and a blue-chip business card. But they wont make an iota of difference if the client doesnt believe that you will deliver what you promise. If the client doesnt trust you, your firm will be eliminated from the running.

Personal selling is not a grab bag of manipulative tricks to get clients to like you, but rather a strategy of engaging clients in a substantive discussion of the issues.

For guerrillas, personal selling is not selling at all, at least not in the traditional sense. Instead, its a give-and-take exchange with the client characterized by: Intense listening Insightful questioning Presentation of creative ideas.

If the client perceives that you understand the macro issues and nuances of the discussion, you will advance to the next step. If not, the clients will politely show you the door. Of course, have the stacks of case studies tucked away in your briefcase, just in case youre asked for them. They provide excellent backup. Remember, the key to selling yourself is to focus first on clients and their issues, not on yourself or your firm.

5.8.5. The Web Really Matters a Lot

When customers enter a new store, they notice little things. They quickly size up the stores layout, the quality of the merchandise, the attentiveness of the sales staff, and the overall feel of the place. They form quick impressions and decide whether to shop or move on.

Web site visitors, especially those new to your site, are like those shoppers. They make decisions about the credibility and value of your site, often before the home page finishes loading. If the site appears unprofessional, slow, or out-of-date, your visitors are likely to move on, leaving you with lost opportunities.

Before you release your site to the public, ask five of your clients to review it. Ask them to be brutally honest in their reviews and to answer these questions: 1. What is distinctive about the site? 2. Is the content valuable? 3. Does the site convey a clear understanding of what your practice does? 4. Is the sites content helpful in addressing clients issues?

5. Is it focused on clients needs? 6. Would you bookmark the site? 7. Would it encourage you to call?

Use the results of the Five-Client Test to create a site that does more than hawk your services. Give clients what they need. And keep in mind the advice of Steve Krug, author of Dont Make Me Think: you should not do things that force people to think unnecessarily when theyre using your site. You want clients to be thinking about how you can solve their problems, not how to navigate your site.

5.8.6. Conclusion

Guerrilla marketing is quite different from traditional marketing efforts. Guerrilla marketing means going after the conventional goals of profits, sales and growth but doing it by using unconventional means, such as expanding offerings during gloomy economic days to inspire customers to increase the size of each purchase. Instead of asking that you invest money, guerrilla marketing suggests you invest time, energy, imagination and knowledge instead. It puts profits, not sales, as the main yardstick. It urges that you grow geometrically by enlarging the size of each transaction, having more transactions per year with each customer, and tapping the enormous referral power of current customers. And, it does it through one of the most powerful marketing weapons around--the telephone.

The telephone is a remarkably effective follow-up weapon. Don't use the phone to follow up all your mailings to customers, but research has proved that it will always boost your sales and profits. Sure, telephone follow-up is a tough task. But it works. E-mail ranks up there with the telephone, possibly even out outranking it. It's inexpensive. It's fast. It lets you prove that you really care. It helps strengthen your relationship. Lean upon your website as well. Instead of

telling your whole story with other marketing, use that other marketing to direct people to your site. Then, use the site to give a lot of information and advance the sale to consummation. A key to online success is creating a brief and enticing e-mail that directs readers to a website that give enough information for a person to make an intelligent purchase decision.

Guerrilla marketing preaches fervent follow-up, cooperation instead of competition, "you" marketing rather than "me" marketing, dialogues instead of monologues, counting relationships instead of counting sales, and aiming at individuals instead of groups.

Guerrillas know they must seek profits from their current customers. They worship at the shrine of customer follow-up. They are world-class experts at getting their customers to expand the size of their purchases. Because the cost of selling to a brand-new customer is six times higher than selling to an existing customer, guerrilla marketers turn their gaze from strangers to friends. This reduces the cost of marketing while reinforcing the customer relationship.

When your customers are confronted with their daily blizzard of junk mail and unwanted e-mail, your mailing piece won't be scrapped with the others and your e-mail won't be instantly deleted. After all, these folks know you, identify with you, and trust you. So they'll be delighted to purchase--or at least check out--that new product or service you're offering. They'll always be inclined to buy from a company they've patronized.

Guerrillas are able to think of additional products and services that can establish new sources of profits to them. They're constantly on the alert for strategic alliances--fusing marketing efforts with others in order to market aggressively while reducing marketing investment.

5.9. Potential Clients do not always Need Help

It has been suggested by many researchers that the traditional marketing

approaches with advertising, commercials etc. are more expensive than keeping clients by maintaining the relationship. Turning to new clients requires more effort and money.

However, there are some firms that prefer the promiscuous approach which means that the firm constantly seeks new clients in order to develop and get more experience. The experiences will help the firm in future business. Some firms want many clients and seek to get more, but it is easier to focus their attention on existing ones. After all, it is the existing clients that generate profit and they are the firms most important asset, Alvesson (2004:103).

Consultants are often regarded as salespersons who always seek to sell their services. This can create irritation and suspicions among the clients. As mentioned before, relationships are created through several stages not just over a short period of time. According to Alvesson many consultants loose their clients because they try to force the relationship on the client. They make the mistake of thinking that the clients organization must be reconstructed, which is not always the case, Alvesson (2004: 105). The line between an

eager consultant and an irritating consultant is very thin. A client who considers a consultant to be irritating and hard will probably not stay with the firm and might as well spread bad word-of-mouth information. A consultant must always focus on the clients needs, not its own needs.

5.10. Discussion

Transaction-based marketing has long been the dominating marketing

strategy. The new paradigm-shift is to use relationship-based marketing, where the importance lies in developing a close relation with the client as well as including the client in the process. However, the relationship-based marketing approach is according to many researchers not new but has not been practiced as much before.

Today, there are many more service firms than before. Services partly need other marketing strategies and approaches to reach clients than general

tangible products need. Selling a service often means selling a promise, and in the same time the service provider must generate confidence and trust to the client. Hence, all selling must seem easier if the seller and the client have a strong relationship.

Before firms start to think about potential clients they need to understand how relationships are being created and developed, as well as what factors influence the maintenance and the strength of it. These their strategy and

considerations will help the firm to develop

understanding of the most effective ways to reach potential clients. However, the ways to get there can differ depending on what services the firm provides.

For IT consultancy firms the services include knowledge, expertise and experience. Information technology consultants sell intangible and invisible services. Therefore, they often sell themselves rather than the service. The consultants can use many different ways to market them selves and sell their services, but in general the approaches are either indirect or

direct towards the clients. Some firms consider new clients to be an important asset, while other strongly focuses on maintaining relationships with existing ones. It is suggested that factors like the size and the reputation of the firm, earlier experiences etc., decides which strategy fits best.

5.10.1 The State of the Art

The relationship marketing theories are now the dominating paradigm, since they are general accepted by many authors and researchers (Grnroos 2007, Zineldin 2002, Zineldin & Philipson 2007, Hunt et al. 2006, Ward & Dagger 2007, Pelham 2006, Chumpitaz Caceres &

Paparoidamis 2007).There are many empirical studies made on relationship-based marketing (Grnroos 2007, Zineldin 2002, Pelham 2006, Chumpitaz Caceres & Paparoidamis 2007, Ward & Dagger 2007), and therefore they are generally empirically validated. Little research was found specifically about marketing strategies for consultancy services, hence these cannot be considered generally accepted. This means, that they are

emerging theories, which have to be validated with new empirical studies.

The objective of the empirical research is to find out what type of methods small and mid-sized to big consultancy firms use to reach potential clients, and which ones seem more effective. The dominating and emerging theories suggest that relationship marketing is the dominating

strategy within the service business. Firms providing services in general, use a combination of approaches to sell and market their services.

Consultancy firms in particular are using either indirect or direct approaches,

which are similar to transaction-based and relationship-based marketing. Transaction-based marketing as well as indirect marketing approaches tend to include more active marketing activities, while relationship-based

marketing and direct approaches include more interactive marketing methods. Perhaps there is a difference in marketing strategy between small and mid-sized to big Information Technology consultancy firms?

- Chapter 6 Analysis

6. ANALYSIS

In this part the findings from the empirical data is analyzed and examined. The theories are used in comparison to the findings in order to validate the emerging theories.

The objectives are to discover the marketing approaches mostly used by the consultancy firms, and to understand what factors lies behind the choice of marketing strategy. Another objective is to discover how small firms

differ from big firms. In order to validate the emerging theories, some hypothesises have been developed through the theories. The analyses were made using pie charts. Both the number and percentage of respondents is presented in the tables.

5.1 Marketing Activities and Marketing Methods

From a quick overview of the theories one can assume that in most of todays business, and in particular in the service business, relationship-based marketing is dominating. There are many arguments for why this strategy is better than the old traditional marketing strategy, which have been used and worked well for the last decades. Yet, there are plenty of researchers stating that traditional marketing affect relationship-based marketing and that without traditional marketing there would be no client to continue the relationship with. However, the main focus in this study is not if todays consultancy firms use transaction-based or relationship-based marketing. The focus is to discover which marketing approaches are important. The

being used most often and what the firms consider

approaches are divided in traditional- and relationship marketing, hence the analysis uses these types to validate the answers, by looking at them from different angles and including several aspects.

5.2. Primary Data Analysis

Question 1: Consultants in the firm mostly provide Large Consulting firms surveyed were primarily involved in providing more of advisory services and less of solutions (14) or only advisory services (5). Figure 1: Consultancy services provided by large and small firms

0% 26%

Only Advisory Services Only Solutions

Large firms
0% More advisory Services & Less Solutions Less Advisory Services & more Soluitons

74%

Small consulting firms surveyed were involved in providing only advisory services (7), more advisory services and less of solutions (3) and more of solutions and less of advisory services (1).

9%

Only Advisory Services Only Solutions

Small firms 27%

64% 0% More advisory Services & Less Solutions Less Advisory Services & more Soluitons

Question 2:

Functional domains in Information Technology consulting services are as follows:

IT Governance, compliance , audits and Training Operation, Process and Technology Consulting Strategic & business Process Consulting IT security & Risk management Software solutions

Question 3:

Major players in Information Technology consulting Industry

Accenture PWC Deloitte Infosys KPMG L& T Infotech

Question 4: Client focus

With whom do the consulting firms prefer to and actually work with?

10 of big firms generally prefer new clients but work mostly with existing ones whereas the rest of the 9 firms work equally with new and existing clients. This helps us to understand the focus of large sized firms. They generally believe in maintaining long term relationship with existing clients by constants follow ups and giving them periodic updates on new services at the same time it also tries to attract new clients by better active and interactive marketing efforts. Figure 2: Preference of working for large firms

0% 0%

Prefer and work with existing clients Prefer existing but work with new clients 53% Prefer new but work with existing Clients Prefer & work with new clients

Large firms
47%

0%

Work equally with New and Existing clients

Small medium sized firms on the other hand work more often with existing clients although they prefer new clients (8) ,few of them work equally with new and existing clients (2) & others (1) prefer working only with existing clients. Thus the focus of small and medium sized firms is on existing clients and less on attracting new clients. These firms must therefore undertake more of active and interactive marketing methods which can help them to attract new clients. At the same time they must see to it that they do no neglect their existing clients as they can help in providing good solid base of clients, references and recommendations that can help them to acquire new client and projects.

Figure 3: Preference of working for large firms

9% 18% 0% 0%

Prefer and work with existing clients Prefer existing but work with new clients Prefer new but work with existing Clients Prefer & work with new clients

73% Work equally with New and Existing clients

Question 5 Steps undertaken to maintain long term relationships with clients

Big sized firms give gifts and tokens to their clients on special occasions. They also value additions to their clients through periodic updates briefing them about the new upcoming services, projects undertaken by the firm in past, new projects and their competencies. This helps the large sized firms to remain in constant touch with their existing clients and also helps in acquiring new projects or references from existing clients for the firms services. Figure 4: Long term relationship maintenance of large firms

0% 0% 0% 33%

Gifts & tokens on Special Occasions Value additions through periodic updates Networking seminars 67% No focus

Large firms

Others

Small- medium sized firms also takes efforts to maintain long term relationships with clients but they rely more on gifts and token for special occasions and less on value additions updates. Thus chance that these firms will continue to get new projects from their existing clients is less as their clients may not be aware about the new services and projects undertaken by the firm. But there are chances that the existing clients may provide these firms with recommendations and referrals for new projects with other firms Figure 5: Long term relationship maintenance of small firms

0% 0% 27% Small firms c 73% 0%

Gifts & tokens on Special Occasions Value additions through periodic updates Networking seminars No focus Others

Question 6 Key benefits of maintaining long term relationships with clients Large firms believe that long lasting relationship with clients help in increased loyalty and trust in existing clients (28%) and continuing/ future (11%) projects which helps in strengthening the relationships with existing clients. Also 8% of large firms also believe that maintaining long term relationships can lead to new knowledge and experience, Good reputation (22%) , broaden client base(8%) and references and recommendations (23%), which in turn helps to attract new clients and obtain new projects. Thus focus of most large firms in maintaining strong relationships with clients is that it can help them to get new projects and assignments. Figure 6: Benefits of maintaining long term relationships for Large firms

Loyalty & trust Continuing or future projects

23%

28%

Direct & Honest feedback from clients Fun projects Good reputation New Knowledge Broaden Client Base References/ Recommendations

Large firms
8% 8% 22% 11% 0% 0%

Small firms on the other hand maintain strong relationships with clients for increased loyalty and trust (30%), continuing/future projects (28%), good reputation (17%), new knowledge (3%) and 22% for references and recommendations. Thus aim of small firms in maintaining strong relationships with clients is to attract and retain existing clients than focusing on getting new clients. Figure 7: Benefits of maintaining long term relationships for Small firms

Loyalty & trust Continuing or future projects

22% 30% 0%
Direct & Honest feedback from clients Fun projects Good reputation New Knowledge

Small firms
3%

17% 0% 0% 28%

Broaden Client Base References/ Recommendations

Question 7 Mode of maintaining a client and project Information Database

The is general assumption that firms who are more relationship-oriented use a client database to a higher extent than those who use active marketing activities and more traditional approaches. The theories suggested that technology is what separate traditional marketing from relationship marketing. However, even those firms in this study who use active marketing activities are considered to be modern, and the assumption is not therefore that

these firms collect information in folders etc. to a higher extent than the firms who are more relationship-oriented and use interactive marketing methods. The assumption is that the majority of all respondents use a client database, but it seem more likely that firms who use interactive marketing methods collect all type of information instead of just information about the projects. The base for this assumption is that these firms want to know as much as possible about the clients, in order to better fulfill their needs on a friendlier basis.

Large firms-

66% of large firms maintain client information in data based system. At the same time they also maintain information of various projects undertaken by them in form of a data base. This helps them to maintain close contacts with clients and also helps them to use their experience and expertise of the past projects for their new assignments. Figure 8: Mode of maintaining Information Large firms

No information collected 0% 34% Project I'nformation in folders Client Information in folders Project information in data based system Client information in Data based system Others

Large firms
66%

Small firms-

72 % of small firms maintain client information in form of database. However only 21% of small firms maintain information of the projects undertaken by them unlike large firms where many of them along with maintaining a client database also maintain a project database. Also some of small firms (7%) still continue to use the traditional form of maintaining a client database in form of folders.

Figure 9: Mode of maintaining Information Small firms

No information collected 0% 7% 21% Project I'nformation in folders Client Information in folders Project information in data based system Client information in Data based system Others

Small firms

72%

Question 8 Marketing Activities undertaken by Large and small-mid sized firms Large and small- medium sized firms undertake some or the other kind of marketing activities like active or interactive marketing methods to promote and market their services. Figure 10: Marketing Activities by Large and small-mid sized firms Large firms:

0%

Large firms

YES NO

100%

Small- medium sized firms:

0%

Small firms

YES NO

100%

Question 9 Frequency of marketing activity

Most large firms undertake marketing activities only once in 2-3 years (42%) which is against what one expects. The main reason for this may be that most large firms here under consideration are recognized globally and so most clients want to work with such firms and so these firms need not undertake very extensive marketing activity. Also 21% of large firms undertake marketing activities once in a year and 37% of firms carry out marketing activities 2-3 times in a year. Figure 11: Frequency of marketing activity- Large firms

0% 0% 37% 42%

Once in 2-3 years

Once in a year 2-3 times in a year

More than 4 times in a year

21%

Nothing at all

Small firms on the other hand carry out marketing activities mostly once in a year(64%) or once in 2-3 years(18%) and only 18% of them carry out marketing activities more than 2-3 times in a year. Its very important for small firms to carry out either of types of marketing activities like active or interactive marketing methods to promote and market their services as there is rigorous competition now prevalent in this industry and so if these small & medium type firms want to sustain in this competitive market its important they use the marketing tool well to let the clients know about their services, value additions and capabilities.

Figure 12: Frequency of marketing activity- Small firms

0% 0% 18% 18% Once in 2-3 years Once in a year Small firms 2-3 times in a year More than 4 times in a year Nothing at all

64%

Question 10 Frequency of attending Network Meetings Most of large (63%) & small firms (82%) do not attend network meeting arranged by their peers in same line of business. Very few of large (37%) and small (18%) firms attend the network meeting once in a month. Although network meetings provide an excellent opportunity to meet peers in same line of business as well as clients most firms avoid such network meetings. There can be several reasons for doing so may because of lack of time or may be because the firms do no want to disclosure their service offering and projects with their peers.

0% More than once/ month Once/ month 1-5 times/ half year 0% None of above alternatives

37%

Large firms
63%

0%

18% 0%

More than once/ month Once/ month 1-5 times/ half year None of above alternatives

Small firms
82%

Question 11 Active V/S Interactive Marketing Methods

The purpose of using active marketing activities is to reach a large group of potential clients. The interactive marketing methods are more often used to keep existing clients or reach a more specific group of potential clients.

It is easy to assume that when using

active marketing activities the

consultants get most of their projects from new clients, since reaching new clients is one of the objectives with traditional marketing activities. The same suggestion goes for those who use interactive marketing methods that they should get most projects from existing clients by focusing on relationship-based marketing. Getting projects from recommendations and referrals can be reached from both strategies.

The desire for working with new clients might affect the choice of marketing approach. It has been shown that firms who use active marketing activities do not reach more new clients than the firms who use interactive marketing methods, as well as most of their projects do not come from new clients. However, if they prefer to do business with new clients it is reasonable to use active marketing activities in order to reach a broad target group.

There are still other aspects that can affect the reason for choosing one of the two marketing strategies. By examine these, the understanding for the choice of marketing approach may become clearer. Some firms might find it important to reach a certain amount of new clients each year, either

because they want to broaden their client base, develop their skills or for other reasons.

Some authors in the theories state that some firms prefer the promiscuous approach, which is a direct marketing approach used to reach new clients in order to better develop their skills and knowledge base. It cost more and

it takes more effort to reach new client, while it is easier to do business with existing clients.

The Most Common used Active Marketing Method: For the

large sized firms campaigns, brochures and promotional letters (75%), recruitment advertisements (8%) and posters and

advertisements (17%) constitute major type of active promotional tools.

0 %

1% 7

Nw a e e sp p rs/ ra io T d / V P ste & o rs a v rtise e ts de mn R cru e t A s e itm n d

8 %

Small-

7% 5

Cma n a p ig s, b ch re & ro u s p m tio a le rs ro o n l tte

medium sized firms however only use campaigns, brochures and promotional letters as the only type of active marketing techniques. This clearly shows that focus of small & medium sized firm is on satisfying and maintaining strong relationships with existing clients. While the large firms look to attracting new potential clients by effectively using more of active marketing techniques.

0% 0% 0% Posters & adv ertisements Recruitment Ads Newspapers/ radio/ TV

100%

Campaigns, brochures & promotional letters

The Most Common used Interactive Marketing Method:

In case of large sized firms most commonly used interactive marketing tool is references and recommendations (36%), seminars (20%) and networking meetings only 8%. On the other hand for small sized firms references are used (48%) times, recommendations (43%) and seminars (9%). Thus both the groups concentrate more on references and recommendations which can help the in getting new projects with new and existing clients.

8% 36% 20% Network Meetings Seminars References Recommendations 36%

Large firms

0%

9% Network Meetings Seminars References 48% Recommendations

Small firms 43%

Effectiveness of each of the above active and interactive Marketing method. 6.2.1. Large firms- Active marketing Large firms found posters and recruitment ads to be effective but not a very effective method of marketing. While only 39% found campaigns to be very effective and 61% found it to be only effective

Effectiveness Very Effective

Posters 0%

Recruitment Ads 0%

Campaigns 39%

Effective

100%

100%

61%

6.2.2. Large firms- Interactive marketing Large firms found references to be 61% and Recommendations to be 72% very effective. They found seminars to be only 45% very effective and 55% effective and network meetings to be 100% effective but not very effective.

Effectiveness References Recommendations Very Effective 61% 72% Effective 39% 28% 6.2.3. Small firms- Active Marketing

Seminars Network Meetings 45% 0% 55% 100%

For those small firms who considered using campaigns as their active marketing tool found it 14% very effective and 86% effective

Effectiveness Very Effective Effective

Campaigns 14% 86%

6.2.4. Small firms- Interactive Marketing

Small- medium sized firms who considered using references found it to be 62% very effective ansd 38% effective, recommendations to be 44% very effective and 56% effective and seminars to be 100% effective but none of them found it to be very effective tool of interactive marketing.

Effectiveness Very Effective Effective Question 12

References 62% 38%

Recommendations 44% 56%

Seminars 0% 100%

Are the current marketing efforts undertaken by firm sufficient? Most of the large firms (84%) believe that the marketing activities undertaken by their firm is sufficient whereas only 16% of them feel that they should put in more efforts on marketing their services.

16%

YES NO

84%

45 % of small firms believe that the marketing activities undertaken by their firm is sufficient whereas 55% of them feel that they should put in more efforts on marketing their services.

45% 55%

YES NO

Question 13-

Are appropriate financial resources provided for the marketing activities?

57% of large firms believe that they are provided sufficient financial resources to market their services whereas 32% of them feel that they are only sometimes provided the resources and 11% feel that they are not provided the appropriate financial aid to help market their service better.

32% Large Firms 57% 11% YES NO Sometimes

55% of small- medium sized firms feel that they are only sometimes and 18% of them believe that they are not provided the appropriate financial resources to market their services. As these firms are small in nature their turnover and profits from projects are small. Also they have limited service offerings for their potential clients and so may not be handling too many projects because of financial and human resource constraints. This makes it difficult for top management to spend high amounts on marketing of their services which is actually very important taken into consideration that these

firms need to effective promote their services to become competent with the other big players in same industry.

27% YES 55% NO Sometimes 18%

Question 14

Steps that can be taken to improve client relationship

More closed follow-ups via calls and emails. More structured marketing team and marketing efforts. Maintaining proper client and project database. More networking meeting & seminars must be arranged as well as attended by the consultants.

 Understanding the client pain areas by closed interaction with clients. Providing clients more value additions through periodic updates. Having a proper feedback mechanism that can aid the clients to provide honest and true feedback for the services you consultants provide.

- Chapter 7 -

The Answers to the Research Questions Own Reflections

7. CONCLUSION

This last part compiles the findings from the analysis made on the basis of the theories and the quantitative data.

There are several things affecting the choice of marketing approach. When comparing those firms who use active marketing activities with those who

use interactive marketing methods, the purpose was to discover if active marketing activities are connected to the traditional transaction-based marketing, and if interactive marketing methods are connected to

relationship-based marketing. Through the analysis it got more and more clear that those firms who use interactive marketing methods are more relationship oriented than those who use active marketing activities.

The other purpose of the analysis was to discover which aspects that affect the choice of marketing approach. Consultancy services being invisible need more relation-oriented marketing approaches.

The findings show that most of the consultants use both interactive and active marketing methods simultaneously although they rely more on interactive marketing methods like references, recommendations, seminars and network meeting (Interactive Marketing methods) as compared too campaigns posters brochures and recruitment advertisements (Active Marketing methods). Most of the active marketing activities were consider effective but not very effective, were still considered necessary and used by the firms to market their services. On the contrary, all of the mentioned interactive marketing methods were considered very effective to a high

extent by the majority of all respondents. The methods that were considered most effective were recommendations and references. All these were not the methods mostly used; instead it was references and recommendations that were the two interactive marketing methods that the majority of the firms mostly used and considered it to be very effective method of marketing. In addition, most of the consultants new projects came from recommendations and referrals.

There were other aspects that were also taken into consideration. Most of larger firms put more effort on nurturing the relationship with the clients through different methods eg. Tokens, gifts and periodic value addition updates, to a higher extent than the small- medium sized firms who just give gifts and tokens to their clients on special occasions. When it comes to collecting information, all the firms use a client database; however, the firms who use active marketing activities tend to collect all types of information to a larger extent than the other firms. An answer to this might be that firms who are more relationship-oriented collect information all the

time through personal meetings and friendly discussions. In that way the consultants get the information needed in order to satisfy the client as well as it helps them in their future projects. The other firms do not have the same close relationship, and therefore they have to store and save all type of information so that they can find it easily when it is needed.

The second part of the research question is about the difference between small and big consultancy firms. As most of the large as well as small & medium sized firms use both interactive and active marketing methods to greater and/ or lesser effect. Also most big firms get most of their projects

equally from existing and new clients whereas s mall firm work either with existing clients or get new projects through recommendations and referrals. For small firms it seems more important that a strong relationship generates continuing projects than new projects, experiences and good reputation, which big firms consider is profitable. New clients, on the other end, are profitable for big firms in the sense that it leads to continuing projects, good reputation and experiences, while small firms see the possibilities it can generates. Both small and big firms prefer to work with existing clients, as well as both big and small firms consider recommendations and referrals as very effective interactive marketing methods.

There are many similarities between small and big firms. Both the firms use active and interactive marketing methods. Both of them believe in maintaining closed contacts with their clients mainly through distribution of gifts and token to their clients on special occasions. In addition, both small and large sized firms use a client database to collect information. However, the big firms collect more information about the projects than the small ones, and this is the result of friendlier approaches used by the small firms.

7.1. The Answers to the Research Questions The marketing strategies that the majority of the consultants consider most effective are recommendations and referrals. Both active and interactive marketing methods are used by consultants when selling and marketing their services. Although big and small- medium firms consider most of the interactive marketing methods to be very effective as compared to active marketing methods where only campaigns, brochures and promotional letters are only mostly used and found to be effective.

There is, to some extent, a difference between small and big consultancy firms. The main difference seem to be that big firms collect more information about their projects and clients in client databases, than small firms do. In addition, smaller firms seem to have a little tendency of being more relationship-oriented than bigger firms. Also most of the small and medium sized firms believe that the marketing efforts undertaken by the firm are insufficient and they need to put in more efforts on interactive as well as active marketing efforts as this can help them to attract new clients as well as have closed contacts with existing clients. These firms can increase their marketing efforts if they are provided with appropriate financial and other resources.

- Chapter 8 -

Recommendations

8. Recommendations

In case of Information Technology consulting services I would recommend the consultants that they should use a combination of both Active and Interactive marketing methods. The first task for any consultants is to make its existing and potential clients about the various services your firm offers for which it is necessary to use Active marketing methods like posters, brochures and campaigns. Later its important to maintain closed follow ups with clients through calls and mails. The consultants should also arrange as well as attend

the network meetings arranged by others as it provides them with an excellent opportunity to meet new clients as well as your peers in same line of business. They should understand the clients pain areas and provide a more customized solution to their problems. Also they should have a proper feedback mechanism to get honest and proper feedback from their clients so that they can use the feedback for their future projects. A more structured marketing effort by consultants can help them to market their services better and help them in maintaining long lasting relationship with clients.

- Chapter 9 Limitations of Study

9. Limitations of Study

Due to time constraints only 15 consulting firms in and across Mumbai could be surveyed

 Since most of consultants are at clients place for project work meeting them was little difficult so only 30 sample size was taken into consideration.

Most of data had to be obtained through a telephonic conversation so an in depth understanding on topic was not possible.

Since some of data was little confidential concerning the companies strategies that give them a competitive edge in market, the consultants did not reveal such data.

- Chapter 10 Reference Section

10.1. Annexure
1. Theory Chapter Appendix 1:1 The Marketing Strategy Continuum by C. Grnroos, 2007, p. 286

Appendix 1:2 Zineldins Relationship Lifecycle (ZRLC) by M. Zineldin, 2002, p. 550

Appendix 1:3 Activities within the indirect and direct marketing approaches by A Lundberg, 2000, p. 134-135 Indirect Marketing PR News Magazines Articles in trade press Direct Marketing Personal Selling Tele marketing Seminars

Radio, TV Advertising Conference Publicity, general or specific

Meeting Sales Letters Brochures Participation in fairs

1.4. Questionnaire IT CONSULTANCY SERVICES

Name of Consultant: __________________________________ Name of Company: _____________________________________ Designation: ___________________________

1. The consultants in the firm mostly provide

Only Advisory Services Only solutions

More Advisory Services and Less Solutions More Solutions and Less Advisory Services

2. What are the existing functional domains in your organization?

3. According to you, which 3 organizations, in same line of business, give you a direct competition?

1.______________________________ 2.______________________________
3. ________________________________

4. Whom do you actually work with Prefer and work mostly with existing clients Prefer existing clients but work mostly with new ones Prefer new clients but work mostly with existing ones Prefer and work mostly with new clients Work equally with existing & new clients 5. What steps do you take to maintain long term relationships with clients? Gifts / Tokens on special occasion Networking Seminars Value additions through periodic updates No focus except for being nice

Others _________________________________________

6. What are the key benefits you derive by maintaining long term relationship with clients? Loyalty and trust Continuing/ future project Direct and honest feedback from clients Fun projects and increased motivation Good reputation New knowledge / Experience Broaden client base References/ Recommendations

7. Do you maintain a client information database? No, we dont collect any information Collect information about projects in folders etc. Collect all sorts of information about clients in folders etc. Collect information about projects in a data-based system Collect all sorts of information about clients in a data-based system Other _____________________________________________________

8. Do you undertake any kind of marketing activities in your firm? YES NO

9. How often do you undertake new marketing activities? Once in 2-3 years 4 times or more Once in a year Dont do it at all 2 3 times in a year

10. How often do you attend the network meetings arranged by other peers or firms in same industry? Once per month 1 5 times per half year More than one time in a month None of the mentioned alternatives

11. What kind of marketing methods you use & rate their effectiveness Marketing Very Effective Activity Newspapers, radio or TV commercials Posters, advertisement Recruitment ads Campaigns Brochures and promotions letters Network meetings Seminars with potential clients References Recommendations Effective Less effective Not at all Effective

12. Do you think the current marketing efforts taken by your company are sufficient? YES NO

13. Are you provided the appropriate financial & other resources for the same? YES NO SOMETIMES

14. If given an opportunity what kind of steps you would take to improve upon your relationship with clients.

Telephone No:E-mail id:-

Thanks a lot for your time and patience

7.2. Bibliography

Berry L. L. & Parasuraman A., 1991, Marketing services: competing through quality, New York: Free Press, Cop.

Biswas S. & Twitchell D., 2002, Management consulting: a complete guide to the industry, New York: Wiley, Cop.

Chumpitaz Caceres R & Paparoidamis N. G., 2007, Service quality, relationship satisfaction, trust, commitment and business-to-business loyalty, European Journal of Marketing, vol. 41, no. 7/8, p. 836-867

Ferguson, C. J., 2001, Selling professional services: a practical approach Part 1, Management Decision, vol. 34, no. 3, p. 49-54

Ferguson, C. J., 2001, Selling professional services: a practical approach - Part 2, Management Decision, vol. 34, no. 4, p. 19-23

Grnroos C., 2007, Service Management and Marketing. Customer Management in Service Competition, West Sussex: John Wiley & Sons Ltd.

Hunt S. D., Arnett D. B. & Madhavaram S., 2006, The explanatory foundations of relationship marketing theory, Journal of Business & Industrial Marketing, vol. 21, no. 2, p. 72-87.

McLarty R. & Robinson T., 1998, The practice of consultancy and a

professional development strategy, Leadership & Organization Development Journal, vol. 19, no. 5, p. 256-263

Ward T. & Dagger T. S., 2007, The complexity of relationship marketing for service customers, Journal of Service Marketing, vol. 21, no. 4.

Wilde E., 1996, Marketing management consultancy, Work Study, vol. 45, no. 2, p. 18-21 Zinaldin M., 2002, Developing and managing a romantic business relationship: life cycle and strategies, Managerial Auditing Journal, vol. 17, no. 9, p. 546-558

http://en.wikipedia.org/wiki/Information_technology_consulting http://download.microsoft.com/download/7/e/1/7e128350-5ee0-4fafb9e2-79efa11ba718/ITAndManagementConsulting_Brochure_NA.pdf

http://www.hbs.edu/research/facpubs/workingpapers/papers2/0203/03069.pdf

http://www.thehackettgroup.com/solutions/docs/collateral/hckt_hyperion Information.pdf

 http://asifjmir.wordpress.com/2009/08/09/transaction-based-marketingvs-relationship-marketing/