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Relationship Marketing Cs

Relationship Marketing Cs

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Published by irfeea

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Published by: irfeea on May 25, 2012
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Introduction:
As competition has increased, customers have become more demanding. As a result, Dell has to look harder at how they can better meet the expectations of their customers. This means getting to knowthem better, keeping them loyal, and ensuring customer satisfaction. In marketing terms this boils downto effective segmentation, product and brand development, direct marketing, marketingcommunications, and customer retention marketing.Taking such a wide view means that the boundaries of traditional marketing are
stretched. Shouldn‟t
the management of internal (i.e. employee relationships) fall under Human Resource Management?
Shouldn‟t the management of supply
-chain relationships fall under Operations Management? And
shouldn‟t the manag
ement of relationships with external parties.However, our findings indicate that within the six-market model constraints Dell is effective inrecognizing the importance of these relationships. Relationship marketing is all about building closemutually beneficial relationships. In this spirit elements of relationship marketing are even anchored inDell
‟s core business model, the Direct Model. The Direct Model draws its strength out of closeness tothe company‟s partners, impressively realized in its sup
plier and customer relationships, where thecompany reached thorough virtual integration of the value chains. Hence Dell can be regarded as aprime example as a company living Relationship Marketing.Relationship marketing and customer relationship management have emerged as specific priorities formarketing academics and managers only in the past few decades. The relatively recent explosion of research papers, popular business books, and customer relationship management initiatives in Westerncultures stems from a confluence of factors, including the transition to service-based economies;advances in communication, logistics, and computing technologies; increased global competition; andfaster product commodization.These trends have enhanced the s
alience of “relationship
-
 based loyalty” to sellers compared
with othermarketing-mix factors and increased desire on the part of customers
 
for many unique characteristics
found in “relationship
-
 based exchanges” (e.g.,
reduced perceived risk, higher trust, enhancedcooperation, and greater flexibility). Thus, in many situations, both sellers and customers are becomingmore interested in conducting business transactions embedded within relationships.
 
Recruitment Market
In terms of recruiting graduates Dell has since 1994 been identifying, recruiting and hiring newgraduates for full time and internship positions Dell website. This is done through establishing workingrelationships with colleges and universities in order to gain exposure to the most talented students foropportunities at Dell, and through Dell
‟s University Relations (UR) which is a long
-term recruitingstrategy. Dell states that the success of the UR program is dependent on the building of effectiverelationships with universities and students to promote and improve Dell
‟s image to attract the best
candidates to the company. In 1999 Michael Dell
stated that, „You have to hire based upon thecandidate‟s potential to grow and develop.‟ (
Dell 1999, p.109).An example of how Dell builds these relationships is through it various programs with universities andcolleges to find the best and brightest graduates. These are its Scholarship, and TargetedCollege/University Programs. For instance the Targeted College/University Programs is based on Dellestablishing relationships with universities who have a strong academic programs and the ability torecruit and retain their students. The advantages of having the information available to candidates onthe website and the system of using
the websites for the submitting of c.v.‟s is that
Dell can be moreefficient and effective in selecting the top candidates, and candidates have an idea of how Dell conductsitself in terms of the employer/employee relationship and the ethos of the organization. For instance,Dell clearly states the benefits that can be enjoyed by employees in terms of health plans, pensions andbonuses.
 
Referral Market
This section will deal with Dell and the Referral Market. According to the Cranfield School of 
Management organizations „need to consider both existing customers and intermediaries as sources of future business‟
(Relationship Marketing: Marketing Multiple Markets 2000).This is due to the fact
that satisfied customers will recommend and refer a company‟s product(s) to others, in effect becoming„advocates‟ for the organization. It is therefore important that an organization such as Dell cultivates
this market through excellent service delivery in order to retain satisfied customers, which willencourage them to refer Dell to other potential customers.
Moreover, the so called “Platinum Councils” are another means of maintaining a close customer 
relationship. Dell organizes semi-annual meetings for their biggest customers inviting executives andtechnicians to discuss latest developments in technology and giving them the chance to exchange viewsand experiences. Dell intents to build and maintain a good relationship with their customers. It alsobecomes clear, that the company regards some customers more relationship worthy than others, byanalyzing customer value and segmenting. The largest customers even constitute a segment-of-one.Consequently relationship-building measures concentrate on these groups. This philosophy becomes
obvious as Dell names its biggest customers “relationship customers” in
 
opposing “transactioncustomers”. Furthermore,
Dell passes on customer feedback directly to its suppliers, so they are able tobenefit and adjust, e.g., their outputs quickly. Dell also communicates to its suppliers shifts in thedemand of certain types of models, to allow the suppliers quick adoption to customer demand. (Dell1999, p.174, 175, 179). Michael Dell points out, that through these actions, the traditional bid-buy cycleis replaced by a mutually beneficial partnership (Dell 1999, p.180, 190).Indeed, the on-line, real-time sharing of information on orders and production throughout the entiresupply chain offers clear cost advantages as well as flexibility: despite the fact that inventory is low,both, Dell and the suppliers rarely miss out on sales opportunities because of inventory limitations.(Kraemer et al. 2000, p.8). However, even more important is, Dell
is able to have the industry‟s lowest
 inventory level, which means a lot in the IT-Business, where inventory depreciates rapidly. Accordingto (Mendelson and Pillai, 1998), product life cycles in the PC industry have shrunk from about 22months in 1988 to 6 months in 1997, and the price/performance of key components has continued todouble every 18 months or less.

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