Definition

transactional marketing

What is transactional marketing?

Transactional marketing is a business strategy that focuses on single, "point of sale" transactions. The emphasis is on maximizing the efficiency and volume of individual sales rather than developing a relationship with the buyer.

The transactional approach is based on the four traditional elements of marketing, sometimes referred to as the four P's:

  • Product -- Creating a product that meets consumer needs.
  • Pricing -- Establishing a product price that will be profitable while still attractive to consumers.
  • Placement -- Establishing an efficient distribution chain for the product.
  • Promotion -- Creating a visible profile for the product that makes it appealing to customers.

An alternative to the transactional model, relationship marketing, emphasizes customer retention and future interaction with the company. There are advantages and disadvantages to both approaches. According to customer relationship management (CRM) expert Michael Lowenstein, because transactional marketing does not value customer retention, it can lead to "passive, reactive and short-term customer relationships." However, traditional elements of marketing such as those listed above will always be crucial to success.

The main disadvantage of the relationship-based model is its relative expense. However, fostering ongoing interaction with buyers through customer relationship management (CRM) strategies typically improves return on investment (ROI) in the long run. Most organizations include components of both approaches in their strategy.

Learn More About IT:

> TheIDM.com proclaims that 'Transactional marketing is dead – long live relationship marketing?' (Free registration required.)

> Christina Pomoni writes about 'The transition from transactional marketing to relationship marketing.'

> Michael Lowenstein answers questions about customer loyalty.

This was last updated in April 2009
Posted by: Margaret Rouse

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