Strategic Marketing: Planning and Control, Third Edition

To examine a practical VMS example, consider Marks & Spencer. M&S
has remained at the forefront of British retailing for longer than most com-
mentators can remember. Although the mighty M&S has recently experi-
enced troubled times, its enduring appeal and acknowledged strengths
flows from its relationships with suppliers. Over decades, it has developed
innovative and mutually beneficial supplier partnerships. Close working
relationships enable the company to effectively manage the entire supply
chain. Indeed, supply chain management will prove increasingly vital as
M&S faces future challenges.

■ Relationship marketing

The concept of relationship marketing takes marketing back to basic prin-
ciples. It recognises the fundamental importance of sustaining customer
relationships in order to generate customer loyalty and repeat business.
Additionally, relationship marketing acknowledges a broader view of mar-
keting, and defines a number of ‘markets’ which must be addressed in order
to optimise customer relationships. Christopher et al. (1994) identify a six
‘market’ model relating to the organisations’ relationships (see Figure 11.2).
Undoubtedly, customer markets should be the primary focus of any
organisation. Previously, marketing has tended to focus on finding new
customer and winning new business. Modern marketing practice (rela-
tionship marketing) now recognises the importance of retaining cus-
tomers and generating repeat business. Relationship approaches aim to

Alliances and relationships 235

Raw materials

supplier Raw materials

supplier

Possible conflict

Manufacturer Manufacturer

Possible conflict

Retailer

Retailer

End customer End customer

Traditional channel

structure

VMS channel

structure

Co-operation

Co-operation

Figure 11.1

Traditional and VMS

marketing channels