Key Words in Marketing - Coursework Example

Marketing Introduction relationship management is defined as an organization’s framework with the objective of creating long-term relationships and loyalty with potential as well as current consumers, through effective coordination of its various marketing, sales and post-marketing and after-sales services. After the industrial revolution, there was a subsequent industrialisation in majority of the nations across the globe. However, consumers and companies grew even more distant, as a result of the fast changing manufacturing techniques, employee-maintained channels of distribution and complex hierarchal systems within organisations. This brought a period of transactional marketing into prominence and relationships among consumers and marketers were majorly based on product delivery as well as receiving payments. Nevertheless, in the modern marketing environment, numerous factors have forced organisations to establish a closer and bonded relationship with their stakeholders. As a result, this relationship came to be formally known as customer relationship management. In the past few decades, CRM has undergone unique modernisation and critical scientific analysis. The current paper will illuminate various CRM concepts along with its history and position in the marketing field. It will also shed light on the factors behind the emergence, present components as well as contemporary usage of these concepts. Definition Since its conceptualisation, authors and researchers have been continuously trying to define CRM. Even so, it is difficult to put forth every aspect of CRM in one single definition. According to Das Gupta (2005), CRM is a framework of an organization, helping it to achieve high loyalty among customers and business process which are customer-oriented. It can also be described as a tool which aids integrating of various data and information collected about business transactions, customers, performances of numerous marketing efforts, new developments in various target markets and consumer reception of services and products. As per Feinberg and Kadam (2002), CRM can be defined as an approach of a firm, concerned about its marketing and commerce efforts, amalgamating its various business methods, technological advancements as well as other innovative strategies with customers at the centre. Parvatiyar and Sheth (2001) have stated CRM as an inclusive scheme, involving in activities such as, collaborating, obtaining and maintaining relationship with the consumers with the objective of generating high degree of loyalty and value for the brands and company. While the practice of CRM may include various approaches, in terms of theory, it has close resemblance with relationship marketing and both are used as substitutes on numerous occasions. However, there is a constricted viewpoint regarding CRM that marketing effort is implemented by using databases of various potential and current customers. It highlights the data recording characteristics of CRM and its concurrency with various promotion-related activities. Another viewpoint was provided by Vavra (1992), according to which CRM is the overall result of an organisation’s expedition for customer retention by taking aid of various marketing and communication strategies, which enable the firm to foster a favourable and positive relationship with its consumers. Thus, by summing up the concepts and theories by different authors and scholars, CRM can be described as an organisation’s framework with the objective of creating long-term loyalty, commitment and relationship with potential and current consumers through effective marketing coordination, post-marketing services and sales efforts. CRM’s position in Marketing CRM’s position in marketing is diverse and ranges from demand generation, customer and market research, advertising and position, sales as well as after sales relationship management. The implementation of CRM can also be seen in areas such as, measuring financial risks so that sales transactions can be pleasurable for both the organisation and its customers. For instance, it is known that individuals with great relationships with salesmen will more likely provide contacts which in turn can be easily changed into active customers. Apart from providing useful leads, such individuals are also responsible for providing continuous business to the organisation for a long period. On the contrary, individuals with a bitter or unpleasant relationship with their salesmen do not provide any contact. Also, there are high chances of these customers in discontinuing their business with the organisation. Thus, it can be easily understood that CRM plays an important role in analysing the likes and dislikes of customers as well as their present and predicted future demands. Another critical feature of CRM is collecting sales data of customers and sharing them with the sales force and other departments within the organisation such as, customer service, marketing and finance. This not only helps in better marketing coordination, sales as well as support services, but also eliminates any loss of high-value customers, through duplicate, annoying or other uncoordinated efforts. These kinds of data are very helpful for organisation as they can forecast any fluctuations in the future demand. CRM also enables an organisation to deliver a commendable customer service quality through accurate focus on the requirements of every customer and provide customised solutions and special offers to them. This not only helps in building loyal customers, but is also greatly helpful in positive word of mouth advertising, which is a critical component for long-term brand building (Rouse, 2006). Surfacing of CRM As stated by Sheth and Parvatiyar (1995a), precursors of the contemporary CRM outdate the Industrial Revolution too, a time when personal deals took place between owners of cottage industry and consumers. Likewise, sculptors and craftsmen had also conventionally created personalised installations for individual customers. These personal dealings resulted in a consumer-company relationship, which was not scientifically studied and analysed at that time. Nonetheless, in these recent times, numerous motives have reignited the desire for organisations to form a much closer relationship with their consumers. Thus, this relationship has arrived with a formal name of Customer Relationship Management (CRM) and has undergone various scientific analysis as well as modernisation. Some of the attributes for this renewed attention in CRM includes simplification of the organisational hierarchy, as a result of computerisation of many processes and communication advancements, thereby enabling organisations to connect with customers from any part of the world. As different levels of hierarchy in the organisational structure got eliminated, the top level executives increasingly found themselves in close propinquity with customers and directly answerable for the organisation’s business conduct. Also, as technology has replaced manual labour, works requiring individuals with specialised knowledge and skills can now be conducted by anyone equipped with comprehensive and complex software. Other grounds for the CRM development includes emergence of service sector. Here the service provider is in direct contact with the customers (Crosby, Evans and Cowles, 1990). Firm’s mission to make a more efficient value chain resulted in closer cooperation between suppliers, companies and consumers (Frazier, Spekman, and O’Neal, 1988). Intense competition forces organisations to look beyond transactional and traditional marketing and focus on satisfaction and loyalty of customer (Reichheld, 1996). Global market has also forced firms to connect with customers on personal level in order to understand their unique values, cultures and requirements. CRM Components CRM comprises of three different components: stakeholders involvement, usage of technology and implementation of a special course of action. Stakeholders Involvement Effective CRM relies greatly on the involvement of all stakeholders of an organisation. This includes top level management, managers from different functions and departments, employees of the firm as well as end users. Since CRM‘s success cannot be directly evaluated and measured, prima facie it may seem like an additional expenditure and burden on the company. Thus, getting hold of the top level management’s belief and trust on the course is very vital. Similarly, managers will have to distinguish the importance and criticality of CRM as an organisational tool to share the vision of the top level management with the employees. Managers should also inspire confidence among their employees, advocating that altering their work procedure will pay over the extended run and teach the employees to have a people-oriented work approach. Engaging customers in CRM is also critical, since the whole concept is centred on them. It is, therefore, necessary to describe the importance of CRM to consumers, so that they can provide the organisation with derived data that can be evaluated to reward these people with outstanding products, relationship and services. Lastly, CRM also needs supplier integration in order to ensure that problems or needs of consumers are interpreted into quick solutions cordially, without any hiccup or delay (JISC CETIS, n.d.; The National B2B Centre Limited, n.d.). Use of technology Since a large segment of CRM encompasses evaluating, collecting, analysing, sharing and collating data among various employees of the organisation, technology can be considered as an integral component of CRM. The various technology choices include complex hardware networks, CRM software and cloud-based solutions online. Choosing an appropriate technology is dependent on various factors such as, company requirements, employee adaptability as well as financial constraints. Implementation of a particular action course As noted by Phinney (2001), the success of a corporation varies on its choice of action implemented. It is a process by which an organisation acquires customer, performs a business transaction as well as offer ancillary support. The after sales service differs noticeably from other businesses. Different firms perform similar activities in very different manners based on their formulated independent strategies. In brief, the various courses of actions pursued by these companies are unique. Since these action courses directly control success, it is vital for a firm to assess its active business process and formulate necessary alterations in order to accommodate CRM as well as create an exceptional framework. It should also consider the problems and needs of employees, since they would be the people adopting and adapting to the framework. Applications of CRM The primary purpose of CRM is to increase the competence of marketing efforts of a firm and create an elevated value degree for both the organisation and its customers by providing outstanding products, support and services. Thus, CRM has been used heavily in most of the aspect of marketing, specially, in development of relevant promotional and marketing strategies, wants of consumers as well as addressing needs in a better way. Creating a high degree of customer loyalty and satisfaction, lowering cost of acquiring new consumers and retaining existing loyal customers are other areas where CRM plays an influential role. Effective use of CRM also results in reduction of products delivery expenses as well as efficient stock management and order-handling. It is also used to generate a personal relationship with each customer and concentrate marketing work on consumers who are high-value in order to generate more business out of them. Other advantages include obtaining significant leads from satisfied customers that can be transformed into active consumer and collecting relevant data about them. This data is shared among departments and teams for a better coordinated marketing, support and sales as well as to eliminate probability of irritating and losing high value customers through duplicate or uncoordinated efforts. CRM is also implemented to better appreciate the demand-supply curve and predict future demand fluctuations beforehand. Lastly, CRM facilitates an organisation to improve consumer services by accessing important data of a customer from sales and marketing teams, focussing on personal consumer requirements, providing them with personalized solutions and offering special deals to high end consumers. Conclusion CRM as a concept is diverse and encompasses almost all marketing aspects. It is a means for creating and establishing personnel, one-to-one relationship with every consumer, which is completely opposite to a restrictive customer-company relation. This new strategic marketing concept helps in generating higher business revenues out of customers by pinpointing the ones, who are high value, along with better understanding of their needs and demands as well as offering quality and unprecedented personalised services. The ultimate reward of this process is customer loyalty, satisfaction as well as higher profits and revenues. It is a tool used for creating personal relationship with every consumer and getting higher business out of customers by recognising high-value consumers, understanding their needs in a better manner and offering unparalleled personalised service. Thus, even though the CRM success cannot be directly assessed and may appear like an extra burden on the firm, it is probably one of the most significant tools for every firm to gain sustainable competitive advantage over others. Reference List Crosby, L. A., Evans, K. R., and Cowles, D., 1990. Relationship Quality in Services Selling--An Interpersonal Influence Perspective. Journal of Marketing, 54, pp. 68-81. Das Gupta, S., 2005. CRM: beyond technology. Network Magazine: Technology Decisions for the Enterprise. [online] Available at: [Accessed 10 January 2014]. Feinberg, R. and Kadam, R., 2002. E-CRM Web service attributes as determinants of customer satisfaction with retail Web sites. International Journal of Service Industry Management, 13(5), pp.432 – 451. Frazier, G. L., Spekman, R. E., and O’Neal, C., 1988. Just-in-Time Exchange Systems and Industrial Marketing. Journal of Marketing, 52(4), pp. 52-67. JISC CETIS, No Date. What is CRM? [online] Available at: [Accessed 10 January 2014]. Parvatiyar, A. and Sheth, J. N., 2001. Conceptual Framework of Customer Relationship Management, in Customer Relationship Management—Emerging Concepts, Tools and Applications. New Delhi: Tata/McGraw-Hill. Phinney, S., 2001. The role of process in CRM. [online] Available at: [Accessed 10 January 2014]. Reichheld, F. F., 1996. The Loyalty Effect. Massachusetts: Harvard Business School Press. Rouse, M., 2006. CRM (customer relationship management). [online] Available at: [Accessed 10 January 2014]. Sheth, J. N. and Parvatiyar, A., 1995a. The Evolution of Relationship Marketing. International Business Review, 4 (4), pp. 397-418. The National B2B Centre Limited, No Date. Using People, Process and Technology to achieve a Successful CRM Implementation. [online] Available at: [Accessed 10 January 2014]. Vavra, T.G., 1992. Aftermarketing: How to keep customers for life through relationship marketing. Illinois: Business One Irwin. Read More