1[2][1]. introduction to crm
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CUSTOMERRELATIONSHIPMANAGEMENT
PGDM(CRM)2007-09 BATCH
Apeejay School of Management
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Relationship Marketing
Your most unhappy customers areyour greatest source of learning
Bill Gates
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What is
?
The true business of
every company is tomake customers,
keep customers, and
maximize customer
profitability
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Transaction & Relationship Marketing
Transaction RelationshipOne of exchanges
Focus
Ongoing exchanges
Brand Management CustomerManagement
Short time Focus TimePerspective
Long time Focus
Mass Communication PrimaryCommunication
Personal Communication
Isolate Marketresearch
Customerfeedback
Mechanism
Ongoing Dialogue
Mass Markets/ Market
Segments
Market Size Markets of One
Market Share CriterionofSuccess
Mind Share (Share ofCustomers)
Profitability ofTransaction Critical Metrics
Lifetime value ofCustomers
Brand Equity Customer Equity
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Directing Marketing
Business Paradigm and the Value Aspect
Developing Market-Driven Organization
and Strategies
Role of Market Research and Creation ofMarkets
Limitation of Convention Marketing
Definition Limitation of Marketing Mix (4Ps)
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towards Relationships
Fallacy of Competition Analysis
Focus on Value Equity
Managing Customer as an Asset Focus on Knowledge
Management and Experience
Impact of Electronic Channels Frozen Services
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ExchangePerspective
RelationshipPerspective
Value Distribution
Value Creation
Outcome
Process
Seth & Parvatiyar
The Paradigm Shift in
Marketing Orientation
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RELATIONSHIP
TECHNOLOGY
BUSINESS PROCESS
VALUE
VALUE
Value chain- process of
Customers
Seth & Parvatiyar
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Impact of Technology on
Modern Marketing
Seth & Parvatiyar
Increased
Competition
Relationship
Marketing
more Affordable
& Effective
NewTechnology
Development
GreaterDemand
for
Relationship
Marketing
Marketing
Evolution
IT Revolution
Changing
Customers
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Adopting Relationship Marketing
Advantages of Relationship Marketing Means to reduce costs and improve marketingeffectivenessManpowercost have been reduced by re-engineering,automation and downsizing.Financial restructuring and efficient have reducedfinancial costsTQM, JIT and FMS have reduced Operations costs
RESEARCHSHOWS THAT TODAY MANUFACTURINGCOSTS HAVE REDUCED FROM 55 TO 30 PERCENT ANDMANAGEMENT COSTS FROM 20 TO 55 PERCENT, BUTTHE MARKETING COSTS HAVE INCREASED FROM 20 TO55 PERCENT
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Adopting Relationship Marketing
Advantages of Relationship Marketing Means to reduce costs and improve marketing
effectiveness
THE PRACTICE OF RELATIONSHIP MARKETING HAS THEPOTENTIAL TO IMPROVE MARKETING PRODUCTIVITY
THROUGH IMPROVED MARKETING EFFECIENCIES ANDEFFECTIVENESS
THE BENEFITS COME THROUGH LOWER COST OFRETENTION AND INCREASED PROFITS DUE TO LOWERDEFECTION RATE.
IT TAKES FIVES TIMES MORE TO AQUIREA NEW
CUSTOMER THAN TO RETAIN AN EXISTING ONE.
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Adopting Relationship Marketing
Practicing Relationship Marketing Developing a core service around which to
build customerrelationships.
Customizing the relationship to individual
customer Augmenting the core service with extra
benefits
Pricing services to encourage customer
loyalty, and Marketing to employees so that they perform
well for customers.
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Basis of Building Relationship
TREATING CUSTOMERS DIFFERENTLY
INFORMATION BASED DECISIONS
CUSTOMER CENTRIC
FLEXIBILITY
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Forming a Relationship
Seth & Parvatiyar
SELLER/
PRODUCER
END BUYER/
USER
MUTUAL
TRUST
COMMITMENT
CONNECTIVELINKS
Information
Social
Process
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Defining Relationship
Mark
eting ConceptsMARKETING IS TO ESTABLISH,MAINTAIN, AND ENHANCERELATIONSHIP WITH CUSTOMERS
AND OTHER PARTNERS AT A PROFIT,SO THAT THE OBJECTIVES OFPARTIES INVOLVED ARE MET. THISIS ACHIEVED BY MUTUAL EXCHANGE
AND FULFILLMENT OF EXCHANGES
GRONROOS
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Defining Relationship
Mark
eting Concepts THE PROMISE CONCEPT
RELEVANCE OFTRUST
THE HOUSE OF
KNOWLEDGE INRELATIONSHIP MARKETING
PROCESS VIEW OF RELATIONSHIPMARKETING
COOPERATIVE VIEW OFRELATIONSHIP MARKETING
ROLE OF MARKETING ORIENTIATION
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The House of Knowledge in Relationship Marketing
Seth & Parvatiyar
Relationships Culture & Climate
INTERACTION
&
DIALOGUE
TRUST COMMITMENT
Knowledge
Knowledge Management
FirmStake-
holder
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Process View of Relationship Marketing
Relationship Mark
eting is system-oriented; but includes managerialaspects too.
Systems Approach suits to the basic
tenets of Marketing. It includes allrelevant actors, marketingenvironment and even the process ofmarketing.
Managerial Facets facilitate theactionable and normative elementsthat are required in such a theory
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Process View of Relationship Marketing
Basic tenets of Mark
eting1. The market behaviour
2. The market transaction as aunit of analysis
3. The marketing as a dynamicprocess ofrelationship betweenbuyers and sellers
4. The exogenous variables thatinfluence the market behaviour
Cont.
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Process View of Relationship Marketing
In thisrespect what is
requi
redis the raison d etreof
marketing, a perspective thatis common cause that no
stakeholder (consumer, seller,government, or social critic)can question. Indeed, that
perspective should really reflectwhat marketing is all about.
Seth (et.al)
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Process View of Relationship Marketing
Marketing is a process that includesseveral parties.
Objective of each party is to be met andis done by mutual exchange andfulfillment of promises (TRUST)
These parties form an interactive networkthat further interacts with customers andenvironmental actors.
Relationship Marketing is dynamic
because of its process nature.Gronroos
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Cooperative View of RelationshipMarketing
Relationship Marketing is concernedwith cooperative and collaborativerelationship between firm andcustomers.
Relationship is formed betweenFirm and one ormany of itscustomers , including
End Consumer Distributors orChannel Members
B2B Customers
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Cooperative View of RelationshipMarketing
Thus Relationship Marketing is
An ongoing process of engagingin cooperative and collaborative
activities, and programs withimmediate and end-user
customers in order to create orenhance mutual economic value
at a reduced cost.
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SERVICE COMPETITION
Relationship makes Customerless Price Sensitive
Monitoring CustomerSatisfaction
Customer Perceived Quality(Technical &Functional)
CustomerFeedback CustomerComplaint Tracking
(CCT)
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StrategicImportance of
INTRAORGANIZATIONAL COLLABORATION
Level of interdependence dependswhether the Organization has chosenTransaction Based Strategy or a
Relationship Based Strategy Transaction Strategy relates more to
Product and traditional Marketing mix
Customer Interface is an essential
component ofRelational Marketing Customer Interface involves a
broader scope for par-time marketersof other functional areas.
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Prerequisite
INTERNAL MARETING FOREXTERNAL MARKETING
PRODUCER
Internal External
Marketing Marketing
EMPLOYEE Interactive CUSTOMER
Marketing
CRM
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