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Improving customer relations through relationship marketing - How can Greenheart Plants improve its relationships with customers to create a competitive advantage?

Extracts from this essay...

Introduction

Title Improving customer relations through relationship marketing - How can Greenheart Plants improve its relationships with customers to create a competitive advantage? 1.0 Points of Departure In this section I will present the reasons for choosing the topic. An introduction to the garden nursery industry and the case company, finally the research problem, purpose and its limitations, followed by an outline of the thesis. 1.1 Areas of Interest In deciding a topic for my dissertation an important factor was that I would enjoy the subject, and be interested in it. After enjoying the level two "Services Marketing" module, specifically the 'Relationship Marketing' topic, I thought it would be a challenging area of subject, one I could succeed in and enjoy enough to dedicate my time to. Horticulture and more specifically the garden centre/nursery has been of importance to me because I have worked part-time, for five years in such a nursery. The concept of relationship marketing is beginning to be major aspect of many businesses; however I had noted that it had not really been introduced into horticulture. This sparked an idea of combining those areas for my thesis. I talked to the owners of the nursery and found that they wanted to introduce a marketing scheme and afterwards agreed to give me all the information needed to assist me in the project, in return for deciding on a relationship marketing strategy that would be successful for the nursery. 1.2 Introduction to the Garden Centre/Nursery Industry The garden centre is increasingly important to homeowners. The Horticultural Trades Association (HTA) valued the garden market at just over £3 billion in 2000 with consumer spending seeing an increase of £0.98 billion over the past six years (source: MINTEL). 2002 figures were predicted to be £4 billion. The rapid rise in popularity of television programmes, such as Ground Force, along with other increased media coverage has turned gardening into a fashionable past time encouraging comprehensive garden makeovers.

Middle

Porter in his book "Competitive Strategy: Techniques for Analyzing Industries and Competitors" in 1980. Porter's model says that corporate strategy should meet the opportunities and threats in the organisations external environment, especially competitive strategy. Porter has identified five competitive forces that shape every industry and every market. These include: Bargaining Power of Suppliers, Bargaining Power of Customers, Threat of New Entrants, Threat of Substitutes, Competitive Rivalry between Existing Players. The objective should be to modify competitive forces in a way that improves the position of the organisation. Based on the information derived management can decide how to exploit particular characteristics of their industry. There is a high threat from new entrants; increasingly companies are expanding to include garden plants and services into their portfolio. Gardening is an increasingly important industry as it becomes more popular with the general public as a hobby and fashion. There is also medium to high competitive rivalry due to the high number of firms in the market, therefore the main differential for consumers is price. Power of consumers therefore is also quite high, as ultimately they have the final say in what they purchase. Consumers look to price along with relative quality and decide which service to use accordingly. Finding a differential that makes it stand out from the competition in one way or more would make the service package of Greenheart much more attractive than their competitors. One such way of gaining this competitive is through knowledge about horticulture and business practices. Referral marketing is increasingly important; therefore continual high quality to bring about positive word of mouth is important, possible customers will be able to judge the quality of the service by simply looking at a past product. Continual high quality is therefore essential. Links with suppliers of both plants and equipment is relatively low importance as there are many suppliers offering a similar service, however supplies need to be enhanced to improve efficiencies and avoid high costs.

Conclusion

Other potential areas for sponsorship are schools, hospitals and other public services where positive PR can be gained for a small cost. 8.5 People The staff is the most important tool in introducing a relationship approach, if they are grumpy to customers or do not give useful information, customers may go elsewhere no matter how good the rest of the service is. Staff should have on-the-job training and an on going education about plants which are on sale in the nursery on their suitability in different garden sizes, soil types and climate etc. A book can be used as backup but to put across a good image staff should be knowledgeable. As well as this information it is essential that staff treats the customers with respect, and not treat them as if they are stupid for not knowing plant names. Providing information which helps customers will provide a competitive advantage for Greenheart Plants who will have customers who come back to the centre to get advice on what plants they want to buy. 8.6 Budget The following budget has been estimated on the relationship strategy proposed: 8.7 Constraints and Limitations As with all research my project should be interpreted with caution for the following reasons, I relied on individual informants from different companies which could mean I was not getting information in a true and fair view. The study is exploratory in nature: since the examined sample of firms is not statistically representative it would be hard to generalise my findings. Not all potential variables of relationship marketing have been considered which could lead to holes in my research Owing to time and financial restrictions not all competitors were visited and only a small number of Greenheart Plants customers were questioned. There may be unconscious interview bias throughout the report as in my time with Greenheart Plants I have become emotionally attached to them. WORD COUNT excluding figures, references and appendices = 9.

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