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

Recruitment Markets Influence

Markets

Referral Markets

Internal Markets

Supplier / Alliance Markets Customer

Markets

The six markets framework

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 individual’s 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

Supplier Referral

Internal InfluenceRecruitment

Customers

New Existing

1

10

6 markets network diagram

Supplier Referral

Internal InfluenceRecruitment

Customers

New Existing

1

10

Existing

Proposed

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’