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Customer Relationship Management-notes-unit IV

Customer Relationship Management-notes-unit IV

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Published by: fathimathabasum on Nov 15, 2009
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(As per Thiruvalluvar university Syllabus of II BBA)Department of BBAM.M.E.S women’s CollegeMelvisharam
Unit IV:
CRM process framework - Governance Process - Performance EvaluationProcess.----------------------------------------------------------------------------------------------
CRM Process Framework:
A four stage relationship marketing process was developed by Atul Parvathiyar andJagdish. N. Sheth . The model suggests that relationship marketing process comprises of Four sub processes:1)Formation Process2)Management and Governance process3)Performance Evaluation process4)Relationship Evolution or enhancement process.The generic model is shown in the figure.
Relationship Marketing Process Framework 
FormationManagement andGovernancePerformanceEvaluationEvolution1Evolution-Enhancement-Termination
I. Formation Process of Relationship Marketing:
The formation process of relationship marketing involves the decisions that must be maderegarding the initiation of relationship marketing activities for a firm with respect to aspecific group of customers or an individual customer with whom the customer wishes toengage in a cooperative and collaborative relationship. In the formation process, threeimportant decision areas relate to defining the purpose (
of engaging inrelationship marketing, selecting parties (
customer partners
) for relationship marketingand developing programs
(relation activity schemes)
for relationship marketingengagement.
II. Management and Governance Process:
Once a relationship marketing program is developed, the program as well as theindividual relationship within it must be managed and governed. For mass marketcustomers, the degree to which there is symmetry in the primary responsibility indeciding whether the customer or the program sponsoring company will be managing therelationship values with the size of the market. However, the programs directed atdistributors and business customers, the management of the relationship require theinvolvement of both the parties. The degree to which these governance responsibilitiesare shared or managed independently depends on the perception of norms of governance processes among rational partners given the nature of their marketing program and the purpose of engaging in the relationship. Not all relationships are managed alike.However, several researchers have suggested appropriate governance norms for differenthybrid relationships.Irrespective of whether relational partners undertake management and governanceresponsibilities independently or jointly, they must address several issues. These includedecisions regarding role specification, communication, common bonds, planning process, process alignment, employee motivation and monitoring procedures.
III. Performance Evaluation Process:
Companies need to undertake periodic assessment of the results of relationship marketingin order to evaluate whether or not programs are meeting expectations or whether or notthey are sustainable in the long run. Performance evaluation is also useful because itallows firms to take corrective areas of relationship governance regarding continuation,modification or termination of relationship marketing programs.
IV. Evolution Process of Relationship Marketing:
Individual relationships and relationship marketing programs are likely to undergochange as they mature. Some evolution paths may be planned, where as others willevolve naturally. In any case, the partners involved have to make several decisions aboutthe evolution of their relationship marketing programs .These include the decisionsregarding the continuation, termination, enhancement and modification of therelationship engagement. Several factors could affect any of these decisions. Amongthese factors, relationship performance and relationship satisfaction are likely to have thegreatest impact in the evolution of relationship marketing programs. When performanceis satisfactory, partners would be motivated to continue or enhance their relationship2
“CRM-Notes”marketing program. When performance does not meet expectations, partners mayconsider terminating or modifying their relationship. When companies can chart out their relationship, they can engage in relatively systematic relationship marketing programs.

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