Transactional marketing
DESCRIPTION
Marketing focused on transactions with customers as opposed to ongoing relationships with customers.
Marketing focused on transactions with customers as opposed to ongoing relationships with customers.
KEY INSIGHTS
The emphasis of transactional marketing is on single transactions or individual exchange events. By being only concerned with each individual transaction independent of other transactions with a customer, the marketing approach is not concerned with the firm’s relationship with the customer. In business-to-business marketing, it is an approach to marketing that relies on selling to intermediaries in one-off transactions, where competition between those intermediaries creates higher value for the transaction marketer and improved choice for the end buyer. Compared to relationship marketing that relies on maintaining interdependence and partnering between value chain players, transaction marketing focuses on the independence of marketing actors. This allows freedom of choice to those marketing actors to choose transaction partners on the basis of self-interest when making their decisions (Sheth and Parvatiyar 1994).
The emphasis of transactional marketing is on single transactions or individual exchange events. By being only concerned with each individual transaction independent of other transactions with a customer, the marketing approach is not concerned with the firm’s relationship with the customer. In business-to-business marketing, it is an approach to marketing that relies on selling to intermediaries in one-off transactions, where competition between those intermediaries creates higher value for the transaction marketer and improved choice for the end buyer. Compared to relationship marketing that relies on maintaining interdependence and partnering between value chain players, transaction marketing focuses on the independence of marketing actors. This allows freedom of choice to those marketing actors to choose transaction partners on the basis of self-interest when making their decisions (Sheth and Parvatiyar 1994).
KEYWORDS Individual transactions
IMPLICATIONS
In business-to-business marketing, the transactional marketing approach allows for bargaining and bidding and resultant efficiencies in support of lower-cost purchases. The rationale behind using it is that competition and self-interest are the drivers of creating value. Relationships between marketing actors are kept at a distance. It is challenged by the emergence of relationship marketing, where it is based on creating higher quality and reducing transactional costs by sharing resources, hence improving marketing productivity (Sheth and Sisodia 1995). In consumer marketing, transaction marketing is also challenged by relationship marketing, where the view is that, in certain product markets, it can be more expensive to attract new customers than to keep existing customers.
In business-to-business marketing, the transactional marketing approach allows for bargaining and bidding and resultant efficiencies in support of lower-cost purchases. The rationale behind using it is that competition and self-interest are the drivers of creating value. Relationships between marketing actors are kept at a distance. It is challenged by the emergence of relationship marketing, where it is based on creating higher quality and reducing transactional costs by sharing resources, hence improving marketing productivity (Sheth and Sisodia 1995). In consumer marketing, transaction marketing is also challenged by relationship marketing, where the view is that, in certain product markets, it can be more expensive to attract new customers than to keep existing customers.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Webster, F. E., Jr. (1992). ‘The Changing Role of Marketing in the Corporation,’ Journal of Marketing, 56, October, 1–17.
Webster, F. E., Jr. (1992). ‘The Changing Role of Marketing in the Corporation,’ Journal of Marketing, 56, October, 1–17.
Business-to-Business Marketing
Cornette, Guy, and Pontier, Suzanne (2002). ‘Transactional Marketing versus Relationship Marketing: The US Automobile Market Evolution,’ International Journal of Automotive Technology and Management, 2(2), 177–189.
Cornette, Guy, and Pontier, Suzanne (2002). ‘Transactional Marketing versus Relationship Marketing: The US Automobile Market Evolution,’ International Journal of Automotive Technology and Management, 2(2), 177–189.
BIBLIOGRAPHY
Sheth, Jagdish N., and Parvatiyar, Atul (1994). Relationship Marketing: Theory, Methods and Applications, Atlanta: Center for Relationship Marketing.
Sheth, Jagdish N., and Parvatiyar, Atul (1994). Relationship Marketing: Theory, Methods and Applications, Atlanta: Center for Relationship Marketing.
Sheth, Jagdish N., and Sisodia, Rajendra S. (1995). ‘Feeling the Heat,’ Marketing Management, 4, Fall, 8–23.
trial see adoption process