Stakeholder Relationships

The Six Markets Model

If companies are to compete successfully in domestic and global markets, they must engineer stronger bonds with their stakeholders, including customers, distributors, suppliers, employees, unions, governments and other critical players in the environment. - Philip Kotler

The six market relationship marketing framework

Is a tool for managing relationships with an extended set of stakeholders which contribute to creating value Proposes Customers are major stakeholder group Stakeholders may also be part of up to five other stakeholder groups / markets

Internal Markets

The six markets framework

Supplier / Alliance Markets

Customer Markets

Referral Markets

Recruitment Markets

Influence Markets

The customer market

Includes: Buyer
Direct customer of manufacturer (wholesaler)

Intermediary
Retailer

Consumer
End user, purchaser for own use

The customer market

Focus on long term relationships Build on value of long term customers Build relationships with end users as well as intermediaries Acquire and retain customers Enhanced customer service Tailored product

The referral market

Two main types: Customer referrals
Advocate (customer initiated) Customer base development (company initiated)

Non-customer referrals
General - professional, specification driven Reciprocal referrals Incentive based Staff referrals

The referral market

Under-exploited opportunity Advocacy result of Customer Delight Opportunity to save on promotional costs Identify referral sources and allocate resources to develop Monitor cost-benefit Long term pay-back periods

Supplier and alliance markets

Supplier markets: Upstream suppliers / vendors of goods and services Vertical supply relationship Alliance markets: Supply knowledge based competencies Outsourced activities within the value chain Horizontal alliance partnership

Supplier and alliance markets

Recognises alliances of several organisations within a value chain Requires high level of consultation:
Shared decision making Transparency of costs Shared risks and rewards

Influence markets
Financial and investor influence
Loyalty of investors

Environmental influence
Pressure groups

Competitor influence
Public perception of relationship with competitors

Political and regulatory influence

Political groups, departments, governments and individuals

Influence markets
Impact of public perceptions Power of the media to influence Recognise marketing value of managed influence groups relations Define objectives, marketing plan and monitoring system to measure results

The recruitment market

Comprises: All potential employees of organisation Own staff referral Third party access channels (recruitment)
Executive search agencies (head hunters) Recruitment agencies Recruitment advertising media

The recruitment market

Skilled staff is becoming scarce resource Future success dependent on recruiting best available staff High competition for best staff Vital to quality delivery and customer service Selection, training and continued motivation Reduce cost of replacing staff Especially important in service industries

The internal market

Efficient internal market exchange between all levels: CEO, Managers, Supervisors, Frontline staff Customer focus of roles according to level of customer contact: Contactors regular contact, marketing Modifiers handle incoming contact Influencers NPD, research etc with impact on value offer Isolateds support staff with little customer contact

The internal market

Importance of internal marketing and customer relationships Enthusiastic, motivated, empowered employees Engagement with organisational mission and customer focus Efficient internal communications Aid to recruiting, motivating, training and retaining best staff Develop job roles to meet individuals needs

Assessing performance in six markets

Identify key market segments & participants Research to identify expectations and requirements Review current and proposed level of emphasis Formulate relationship strategy for each market

Customers
New 10
6 markets network diagram

Existing

1 Supplier Referral

Recruitment

Internal

Influence

Customers
New 10 Existing

1 Supplier Referral

Existing Proposed

Recruitment

Internal

Influence

Summary
Successful relationship marketing requires informed and integrated approach to stakeholder markets Recognises diversity of key markets Applies to B2B, B2C and non-profit sectors Importance of developing relationships, partnerships and alliances Concept of network organisation