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Chapter1

INTRODUCTION
INTRODUCTION

Production and marketing of goods and services are the essence of economic life in any
society. All organisations perform these two basic functions to satisfy their commitments to
their stakeholders-the owners, the customers and the society, at large. They create a benefit that
economists call utility which is the want -satisfying power of a good or service. There are four
basic kinds of utility- form, time, place and ownership utility. Form utility is created when the
firm converts raw materials and component inputs into finished goods and services Although
marketing provides important inputs that specify consumer preference, the organisation’s
production function is responsible for the actual creation of form utility. Marketing function
creates time, place and ownership utilities. Time and place utility occur when consumers find
goods and services available when and where they want to purchase them. Online retailers with
24*7 format emphasize time utility. Vending machines focus on providing place utility for
people buying snacks and soft drinks. The transfer of title to goods or services at the time of
purchase creates ownership utility.

Marketing is the science of meeting the needs of a customer by providing valuable products to
customers by utilizing the expertise of the organisation, at same time, to achieve organisational
goals. According to The American Marketing Association:

‘Marketing is the activity, set of instructions, and processes for creating, communicating,
delivering and exchanging offerings that have value for customers, clients, partners, society at
large’.

With this definition, it is important to realise that the customer can be an individual user, a
company, or several people who contribute to the purchasing decision. The product can be a
hard good, a service, or even an idea – anything that would provide some value to the persons
who provides an exchange. An exchange is most often thought of as money but could also be
a donation of time or effort, or even a specific action. A producer is often a company but could
be an individual or non-profit organisation.

Classical marketing is often described in terms of the four “P’s”, which are:

Product – what goods or services are offered to customers.

Promotion – how the product communicates the value of its products.

Price – the value for the exchange between the customer and the producer.

Place – how the product is delivered to the customer.

A complete analysis of these categories is often called the Marketing Mix.

Marketing has both inbound and outbound activities. Inbound activities largely centre on
discovering the needs and wants of the potential customers. The collective group of all potential
customers is called a market. Categorizing these needs into groups is called segmentation.
Organizing markets into segments allows a producer to more logically decide how to best
provide value to that group of potential customers. The analysis of market segment needs;
analysis of existing sales and profitability; the descriptions, design and introduction of new
products; and the analysis of competitor offerings are also inbound activities that are important
but not often seen by the public.

Outbound activities include all aspects of informing the market that a product is available,
delivering that product, and encouraging the purchase decision. These activities include
advertising, promotion, supply chain, sales support, product training and customer support. To
the public, the most common interaction with marketing is where it touches the discipline of
sales in the form of advertising. This interaction leads to a common misconception that
marketing is only this aspect of promotion.
DEFINITIONS OF MARKETING:

 According to the American Marketing Association (AMA) Board of Directors,


Marketing is the activity, set of institutions and processes for creating, communicating,
delivering and exchanging offerings that have value for customers, clients, partners and
society at large.
 Dr. Philip Kotler defines marketing as “The science and art of exploring, creating and
delivering value to satisfy the needs of a target market at a profit. Marketing identifies
unfulfilled needs and desires. It defines, measures and quantifies the size of the
identified market and the profit potential. It pinpoints which segments the company is
capable of serving best and it designs and promotes the appropriate products and
services.”
 Marketing is the messages and or actions that cause messages and /or actions. Jay Baer
-President, Convince and Convert. Author with Amber Naslund of The Now
Revolution.
 Marketing is traditionally the means by which the organisation communicates to,
connects with, and engages its target audience to convey the value of and ultimately
sell its products and services. However, since the emergence of digital media, in
particular social media and technology innovations, it has increasingly become more
about companies building deeper, more meaningful and lasting relationships with the
people that they want to buy their products and services. The ever- increasingly
fragmented world of media complicates marketer’s ability connect and, at the same,
time presents incredible opportunity to forge new territory. Julie Barile – Vice President
of ecommerce, Fairway Market.

Importance of Marketing:

The most important task of a marketer is to get the right product at the right place with the right
price to the right person. Besides, it was also necessary to go back and find whether consumer
is getting optimum satisfaction, so that consumer remains loyal. These aspects made it
imperative for the marketers to conduct marketing research. The following points explain the
need for and importance of marketing research:
1.Identifying problem and opportunities in the market:

It helps in identifying new market opportunities for existing and new products. It provides
information on market share, nature of competition, customer satisfaction levels, sales
performances and channel of distribution. This helps the firms is solving problems.

2. Formulating market strategies:

Today, markets are no more local. They have become global. Manufactures find it difficult to
contact customers and control distribution channels. Competition is equally severe. The
consumer needs are difficult to predict. Market segmentation is a complicated task in such wide
markets. The marketing intelligence provided through marketing research not only helps in
framing but also in implementing the market strategies.

3. Determining consumer needs and wants:

Marketing has become customer-centric. However, large-scale production needs


intermediaries for mass distribution. Due to prevalence of multi channels of distribution, there
is an information gap. Marketing research helps in collecting information on consumers from
structured distribution research and helps in making marketing customer oriented.

4. For effective communication mix:

In an era of micro- rather than mass-marketing, communication plays a vital role. Marketing
research uses promotional research to study media mix, advertising effectiveness and
integrated communication tools. Research on such aspects will help in promoting effectively a
company’s product in the market.

5. Improving selling activities:

Marketing research is used to analyse and evaluate performances of a company within a market.
It also studies effectiveness of a sales force. It helps in identifying sales territories. Such
information helps the companies in identifying areas of shortcoming in sales. It also examines
alternative methods for distribution of goods.
6. For sales forecasting:

The most challenging task for any production manager is to keep optimum levels of inventory.
However, production is undertaken in anticipation of demand. Therefore, scientific forecast of
sales is required. Marketing research helps in sales forecasting by using market share method,
sales force estimate method and jury method. This can also help in fixing sales quotas and
marketing plans.

7. To revitalize brands:

Marketing research is used to study and find out the existing brand position. It finds out the
recall value of brands. It explores the possibilities of brand extension or prospects of changing
existing brand names. The main purpose of marketing is to create brand loyalty. Marketing
research helps in developing techniques to popularize and retain brand loyalty.

8. To facilitate smooth introduction of new products:

Marketing research helps in testing the new products in one or two markets on a small scale.
This helps in finding out consumer response to new product and develop a suitable marketing
mix. It reveals the problems of the customers regarding new products. Thus, it controls the risk
involved in introducing a new product.

9. Determine export potentials:

The development in transport and communication has helped in globalization and digitalization
of world trade. This has helped in boosting the growth of international markets. Marketing
research helps in conducting market survey for export. It. collects information on marketing
environment prevailing in a country. By collecting data on consumers from different countries,
it indicates export potentials.

10. Managerial decision-making:

Marketing research plays a vital role in the decision-making processes by supplying relevant,
up-to-date and accurate data to the decision-makers. Managers need up-to-date information to
access customer needs and wants, market situation, technological change and extent of
competition.

SCOPE OF MARKETING:

The scope of marketing deals with the question, ‘what is marketed?’ According to Kotler,
marketing people are involved with ten types of entities.

1. Goods:

Physical goods constitute the major part of a country’s production and marketing effort.
Companies market billions of food products, and millions of cars, refrigerators, television and
machines.

2. Services:

As economies advance, a large proportion of their activities is focused on the production of


services. Services include the work of airlines, hotels, car rental firms, beauticians, software
programmers, management consultants, and so on. Many market offerings consist of a mix of
goods and services. For example, a restaurant offers both goods and services.

3. Events:

Marketers promote events. Events can be trade shows, company anniversaries, entertainment
award shows, local festivals, health camps, and so on. For example, global sporting events such
as the Olympics or Common Wealth Games are promoted aggressively to both companies and
fans.
4. Experiences:

Marketers create experiences by offering a mix of both goods and services. A product is
promoted not only by communicating features but also by giving unique and interesting
experiences to customers. For example, Maruti Sx4 comes with Bluetooth technology to ensure
connectivity while driving, similarly residential townships offer landscaped gardens and
gaming zones.
5. Persons:
Due to a rise in testimonial advertising, celebrity marketing has become a business. All popular
personalities such as film stars, TV artists, and sportspersons have agents and personal
managers. They also tie up with PR agencies for better marketing of oneself.

6. Places:

Cities, states, regions, and countries compete to attract tourists. Today, states and countries are
also marketing places to factories, companies, new residents, real estate agents, banks and
business associations. Place marketers are largely real estate agents and builders. They are
using mega events and exhibitions to market places. The tourism ministry is also aggressively
promoting tourist spots locally and globally.

7. Properties:

Properties can be categorized as real properties or financial properties. Real property is the
ownership of real estates, whereas financial property relates to stocks and bonds. Properties are
bought and sold through marketing.

Marketing enhances the need of ownership and creates possession utility. With improving
income levels in the economy, people are seeking better ways of saving money. Financial and
real property marketing need to build trust and confidence at higher levels.
8. Organizations:
Organizations actively work to build image in the minds of their target public. The PR
department plays an active role in marketing an organization’s image. Marketers of the services
need to build the corporate image, as exchange of services does not result in the ownership of
anything. The organization’s goodwill promotes trust and reliability. The organization’s image
also helps the companies in the smooth introduction of new products.

9. Information:

Information can be produced and marketed as a product. Educational institutions,


encyclopaedia’s, non-fiction books, specialized magazines and newspapers market
information. The production, packaging, and distribution of information is a major industry.
Media revolution and increased literacy levels have widened the scope of information
marketing.

10. Idea:

Every market offering includes a basic idea. Products and services are used as platforms for
delivering some idea or benefit. Social marketers widely promote ideas. Maruti Udyog Limited
promoted safe driving habits, need to wear seat belts, need to prohibit children from sitting near
the driver’s seat, and so on.

OBJECTIVES OF MARKETING:

Some of the major objectives of marketing management are as follows: 1. Creation of Demand
2. Customer Satisfaction 3. Market Share 4. Generation of Profits 5. Creation of Goodwill and
Public Image.

The basic purpose of marketing management is to achieve the objectives of the business. A
business aims at earning reasonable profits by satisfying the needs of customers. The objectives
are as follows:
1. Creation of Demand:

The marketing management’s first objective is to create demand through various means. A
conscious attempt is made to find out the preferences and tastes of the consumers. Goods and
services are produced to satisfy the needs of the customers. Demand is also created by
informing the customers the utility of various goods and services.

2. Customer Satisfaction:

The marketing manager must study the demands of customers before offering them any goods
or services. Selling the goods or services is not that important as the satisfaction of the
customers’ needs. Modern marketing is customer- oriented. It begins and ends with the
customer.

3. Market Share:
Every business aims at increasing its market share, i.e., the ratio of its sales to the total sales
in the economy. For instance, both Pepsi and Coke compete with each other to increase their
market share. For this, they have adopted innovative advertising, innovative packaging, sales
promotion activities, etc.

4. Generation of Profits:

The marketing department is the only department which generates revenue for the business.
Sufficient profits must be earned as a result of sale of want-satisfying products. If the firm is
not earning profits, it will not be able to survive in the market. Moreover, profits are also needed
for the growth and diversification of the firm.

To build up the public image of a firm over a period is another objective of marketing. The
marketing department provides quality products to customers at reasonable prices and thus
creates its impact on the customers.
The marketing manager attempts to raise the goodwill of the business by initiating image-
building activities such a sales promotion, publicity and advertisement, high quality, reasonable
price, convenient distribution outlets, etc.

CUSTOMER RELATIONSHIP MANAGEMENT

Customer relationship management (CRM) is an approach to managing a


company's interaction with current and potential customers. It uses data analysis
about customers' history with a company and to improve business relationships with
customers, specifically focusing on customer retention and ultimately driving sales
growth.

One important aspect of the CRM approach is the systems of CRM that compile data
from a range of different communication channels,, including a company's website,
telephone, email, live chat, marketing materials, and more recently, social media.
Through the CRM approach and the systems used to facilitate it, businesses learn
more about their target audiences and how to best cater to their needs. However,
adopting the CRM approach may also occasionally lead to favouritism within an
audience of consumers, resulting in dissatisfaction among customers and defeating
the purpose of CRM.
What is Customer Relationship Management?

The art of managing the organization’s relationship with the customers and
prospective clients refer to customer relationship management.

Customer relationship management includes various strategies and techniques to


maintain healthy relationship with the organization’s existing as well as potential
customers. Organizations must ensure customers are satisfied with their products and
services for higher customer retention. Remember one satisfied customer brings ten
new customers with him where as one dissatisfied customer takes away ten
customers along with him.

The CRM is a new technique in marketing where the marketer tries to develop long
term relationship with the customers to develop them as life time customers. CRM
aims to make the customer climb up the ladder of loyalty.

The company first tries to determine who are likely prospects i.e. the people who
have a strong potential interest in the product and ability to pay for it. The company
hopes to convert many of its qualified prospect into first time customers and then to
convert those first time customers into repeat customers. Then the company tries to
convert these repeat customers into clients – they are those people who buy only
from the company in the relevant product categories. The next challenge for the
company is to convert these clients into advocates. Advocates are those clients who
praise the company and encourage others to buy from it.

The ultimate challenge is to convert these advocates into partners where the
customers and the clients work actively together to discover ways of getting mutual
benefit.

Thus in CRM the key performance figure is not just current market share but share
of life time value by converting customers into partners.
In CRM the company tries to identify that small percentage (20%) of key account
holders whose contribution to the company revenues is high (80%). So from this
point of view, CRM is also known as KEY ACCOUNT MANAGEMENT.
CHAPTER-2

OBJECTIVES OF THE STUDY


OBJECTIVES OF THE STUDY

• To study the Industrial Profile and Company Profile with respect to BMW.

• To find out different perceptions of the people towards BMW.

• To access the counter strategies of the competitors such as Mercedes, Audi,


as such.

• To study the role of Information Technology in CRM with respect to BMW.

• To study the current practices of CRM at BMW.

• To find the market potential and market penetration of BMW products and
services offerings.
CHAPTER-3

COMPANY PROFILE
BMW

Bayerische Motoren Werke AG

Bayerische Motoren Werke

BMW headquarters in Munich

Type Aktiengesellschaft

Traded as FWB: BMW


DAX Component

Predecessor Rapp Motorenwerke


Bayerische Flugzeugwerke

Founded 7 March 1916; 102 years ago

Founder Karl Rapp

Headquarters Munich, Germany


Area served Worldwide

Key people Norbert Reithofer


(Chairman)
Harald Krüger
(CEO)

Products Luxury cars, motorcycles, engines

Production output 2,691,423 vehicles (2017)

Revenue €98.678 billion (2017)[1]

Operating income €10.655 billion (2017)[1]

Net income €8.706 billion (2017)[1]

Total assets €193.483 billion (2017)[1]

Total equity €54.548 billion (2017)[1]

Owner Stefan Quandt (29%)


Susanne Klatten (21%)
Public float (50%)

Number of employees 129,932 (2017)[1]

Divisions BMW i
BMW M

Subsidiaries List[show]

Website www.bmwgroup.com
www.bmw.com

BMW originally an initialism for Bayerische Motoren Werke in German, or Bavarian Motor
Works in English) is a German multinational company which currently produces
luxury automobiles and motorcycles, and also produced aircraft engines until 1945.
The company was founded in 1916 and has its headquarters in Munich, Bavaria. BMW
produces motor vehicles in Germany, Brazil, China, India, South Africa, the United Kingdom,
and the United States. In 2015, BMW was the world's twelfth largest producer of motor
vehicles, with 2,279,503 vehicles produced. The Quandt family are long-term shareholders of
the company, with the remaining shares owned by public float.

Automobiles are marketed under the brands BMW (with sub-brands BMW M for performance
models and BMW i for plug-in electric cars), Mini and Rolls-Royce. Motorcycles are
marketed under the brand BMW Motorrad.

The company has significant motorsport history, especially in touring cars, Formula 1, sports
cars and the Isle of Man TT.

HISTORY

BMW IIIa aircraft engine

BMW's origins can be traced back to three separate German companies: Rapp Motorenwerke,
Bayerische Flugzeugwerke and Automobilwerk Eisenach. The history of the name itself begins
with Rapp Motorenwerke, an aircraft engine manufacturer. In April 1917, following the
departure of the founder Karl Friedrich Rapp, the company was renamed Bayerische Motoren
Werke (BMW). BMW's first product was the BMW IIIa aircraft engine. The IIIa engine was
known for good fuel economy and high-altitude performance. The resulting orders for IIIa
engines from the German military caused rapid expansion for BMW.
After the end of World War I in 1918, BMW was forced to
cease aircraft-engine production by the terms of the Versailles Armistice Treaty. To maintain
in business, BMW produced farm equipment, household items and railway brakes. In 1922,
former major shareholder Camillo Castiglioni purchased the rights to the name BMW, which
led to the company descended from Rapp Motorenwerke being renamed Süddeutsche Bremse
AG (known today as Knorr-Bremse). Castiglioni was also an investor in another aircraft
company, called "Bayerische Flugzeugwerke, which her enamed BMW.
The disused factory of Bayerische Flugzeugwerke was re-
opened to produce engines for buses, trucks, farm equipment and pumps, under the brand name
BMW. BMW's corporate history considers the founding date of Bayerische Flugzeugwerke (7
March 1916) to be the birth of the company.

1923–1939: Motorcycle and car production

BMW model 3/15PS (BMW Dixi) from 1930

As the restrictions of the Armistice Treaty began to be lifted, BMW began production of
motorcycles in 1923, with the R32 model.

BMW's production of automobiles began in 1928, when the company purchased


the Automobilwerk Eisenach car company. Automobilwerk Eisenach's current model was
the Dixi 3/15, a licensed copy of the Austin 7 which had begun production in 1927. Following
the takeover, the Dixi 3/15 became the BMW 3/15, BMW's first production car.

In 1932, the BMW 3/20 became the first BMW automobile designed entirely by BMW. It was
powered by a four-cylinder engine, which BMW designed based on the Austin 7 engine.
BMW's first automotive straight-six engine was released in 1933, in the BMW 303.
Throughout the 1930s, BMW expanded its model range to include sedans, coupes, convertibles
and sports cars.

1939–1945: World War II

BMW 801 engine

With German rearmament in the 1930s, the company again began producing aircraft engines
for the Luftwaffe. The factory in Munich made ample use of forced labour: foreign civilians,
prisoners of war and inmates of the Dachau concentration camp. Among its successful World
War II engine designs were the BMW 132 and BMW 801 air-cooled radial engines, and the
pioneering BMW 003 axial-flow turbojet, which powered the tiny, 1944–1945–era jet-
powered "emergency fighter", the Heinkel He 162 Spatz. The BMW 003 jet engine was first
tested as a prime power plant in the first prototype of the Messerschmitt Me 262, the Me 262
V1, but in 1942 tests the BMW prototype engines failed on takeoff with only the
standby Junkers Jumo 210 nose-mounted piston engine powering it to a safe landing.

The few Me 262 A-1b test examples built used the more developed version of the 003 jet,
recording an official top speed of 800 km/h (497 mph). The first-ever four-engine jet aircraft
ever flown were the sixth and eighth prototypes of the Arado Ar 234 jet reconnaissance-
bomber, which used BMW 003 jets for power. Through 1944 the 003's reliability improved,
making it a suitable power plant for air frame designs competing for
the Jägernotprogramm's light fighter production contract. which was won by the Heinkel He
162 Spatz design. The BMW 003 aviation turbojet was also under consideration as the basic
starting point for a pioneering turboshaft powerplant for German armored fighting vehicles in
1944–45, as the GT 101. Towards the end of the Third Reich, BMW developed some military
aircraft projects for the Luftwaffe, the BMW Strahlbomber, the BMW Schnellbomber and the
BMW Strahljäger, but none of them were built.

1945–1959: Post-war rebuilding

BMW Isetta with a front opening door

During World War II, many BMW production facilities had been heavily bombed. BMW's
facilities in East Germany were seized by the Soviet Union and the remaining facilities were
banned by the Allies from producing motorcycles or automobiles. During this ban, BMW used
basic secondhand and salvaged equipment to make pots and pans, later expanding to other
kitchen supplies and bicycles.

In 1947, BMW was granted permission to resume motorcycle production and its first post-war
motorcycle - the R24 - was released in 1948. BMW was still barred from producing
automobiles, however the Bristol Aeroplane Company (BAC) was producing cars in England
based on BMW's pre-war models, using plans that BAC had taken from BMW's German
offices.

Production of automobiles resumed in 1952, with the BMW 501 large sedan. Throughout the
1950s, BMW expanded their model range with sedans, coupes, convertibles and sports cars. In
1954, the BMW 502 was BMW's first to use a V8 engine. To provide an affordable model,
BMW began production of the Isetta micro-car (under licence from Iso) in 1955. Two years
later, the four-seat BMW 600 was based on a lengthened version of the Isetta design. In 1959,
the BMW 600 was replaced by the larger BMW 700 coupe/sedan.
1959–1968: Near bankruptcy and New Class

New Class sedan

By 1959, BMW was in debt and losing money. The Isetta was selling well but with small profit
margins. Their 501-based luxury sedans were not selling well enough to be profitable and were
becoming increasingly outdated. Their 503 coupé and 507 roadster were too expensive to be
profitable. Their 600, a four-seater based on the Isetta, was selling poorly. The motorcycle
market imploded in the mid-1950s with increasing affluence turning Germans away from
motorcycles and toward cars. BMW had sold their Allach plant to MAN in 1954. American
Motors and the Rootes Group had both tried to acquire BMW.

At BMW's annual general meeting on 9 December 1959, Dr. Hans Feith, chairman of
BMW's supervisory board, proposed a merger with Daimler-Benz. The dealers and small
shareholders opposed this suggestion and rallied around a counter-proposal by Dr. Friedrich
Mathern, which gained enough support to stop the merger. At that time, the Quandt Group, led
by half-brothers Herbert and Harald Quandt, had recently increased their holdings in BMW
and had become their largest shareholder. In 1960, the development program began for a new
range of models, called the "Neue Klasse" (New Class) project. The resulting New Class four-
door sedans, introduced in 1962, are credited for saving the company financially and
establishing BMW's identity as a producer of leading sports sedans.

In 1965, the New Class range was expanded with the 2000 C and 2000 CS luxury coupes. The
range was further expanded in 1966 with the iconic BMW 02 Series compact coupes.
BMW acquired the Hans Glas company based in Dingolfing, Germany, in 1966. Glas vehicles
were briefly badged as BMW until the company was fully absorbed. It was reputed that the
acquisition was mainly to gain access to Glas' development of the timing belt with an overhead
camshaft in automotive applications, although some saw Glas' Dingolfing plant as another
incentive. However, this factory was outmoded and BMW's biggest immediate gain was,
according to themselves, a stock of highly qualified engineers and other personnel.[25] The Glas
factories continued to build a limited number of their existing models, while adding the
manufacture of BMW front and rear axles until they could be closer incorporated into BMW.[26]

1968–1978: New Six, 3 Series, 5 Series, 7 Series

E9 3.0 CSL

In 1968, BMW began production of its first straight-six engine since World War II. This engine
coincided with the launch of the New Six large sedans (the predecessor to the 7 Series)
and New Six CS large coupes (the predecessor to the 6 Series).

The first 5 Series range of mid-size sedans were introduced in 1972, to replace the New Class
sedans. The 5 Series platform was also used for the 6 Series coupes, which were introduced in
1976. In 1975, the first model of the 3 Series range of compact sedans/coupes was introduced.
The 7 Series large sedans were introduced in 1978.

MOTORCYCLES

The 2015 BMW R1200RT

BMW began production of motorcycle engines and then motorcycles after World War I. Its
motorcycle brand is now known as BMW Motorrad. Their first successful motorcycle after the
failed Helios and Flink, was the "R32" in 1923, though production originally began in
1921. This had a "boxer" twin engine, in which a cylinder projects into the air-flow from each
side of the machine. Apart from their single-cylinder models (basically to the same pattern), all
their motorcycles used this distinctive layout until the early 1980s. Many BMW's are still
produced in this layout, which is designated the R Series.

The entire BMW Motorcycle production has, since 1969, been located at the company's Berlin-
Spandau factory.

During the Second World War, BMW produced the BMW R75 motorcycle with
a sidecar attached. Having a unique design copied from the Zündapp KS750, its sidecar wheel
was also motor-driven. Combined with a lockable differential, this made the vehicle very
capable off-road, an equivalent in many ways to the Jeep.

In 1982, came the K Series, shaft drive but water-cooled and with either three or four cylinders
mounted in a straight line from front to back. Shortly after, BMW also started making the chain-
driven F and G series with single and parallel twin Rotax engines.

In the early 1990s, BMW updated the airhead Boxer engine which became known as
the oilhead. In 2002, the oilhead engine had two spark plugs per cylinder. In 2004 it added a
built-in balance shaft, an increased capacity to 1,170 cc and enhanced performance to 100 hp
(75 kW) for the R1200GS, compared to 85 hp (63 kW) of the previous R1150GS. More
powerful variants of the oilhead engines are available in the R1100S and R1200S, producing
98 and 122 hp (73 and 91 kW), respectively.

In 2004, BMW introduced the new K1200S Sports Bike which marked a departure for BMW.
It had an engine producing 167 hp (125 kW), derived from the company's work with the
Williams F1 team, and is lighter than previous K models. Innovations include electronically
adjustable front and rear suspension, and a Hossack-type front fork that BMW calls Duolever.

BMW introduced anti-lock brakes on production motorcycles starting in the late 1980s. The
generation of anti-lock brakes available on the 2006 and later BMW motorcycles pave the way
for the introduction of electronic stability control, or anti-skid technology later in the 2007
model year.
BMW has been an innovator in motorcycle suspension design, taking up telescopic front
suspension long before most other manufacturers. Then they switched to an Earles fork, front
suspension by swinging fork (1955 to 1969). Most modern BMWs are truly rear swingarm,
single sided at the back (compare with the regular swinging fork usually, and wrongly,
called swinging arm). Some BMWs started using yet another trademark front suspension
design, the Telelever, in the early 1990s. Like the Earles fork, the Telelever significantly
reduces dive under braking.

BMW Group, on 31 January 2013, announced that Pierer Industrie AG has bought Husqvarna
for an undisclosed amount, which will not be revealed by either party in the future. The
company is headed by Stephan Pierer (CEO of KTM). Pierer Industrie AG is 51% owner of
KTM and 100% owner of Husqvarna.

AUTOMOBILES

BMW i8 plug-in hybrid

The BMW i is a sub-brand of BMW founded in 2011 to design and manufacture plug-in
electric vehicles. The sub-brand initial plans called for the release of two vehicles; series
production of the BMW i3 all-electric car began in September 2013, and the market launch
took place in November 2013 with the first retail deliveries in Germany. The BMW
i8 sports plug-in hybrid car was launched in Germany in June 2014.

In 2014, BMW developed a prototype of street lights equipped with power sockets to charge
electric cars, called Light and Charge. Two of these charging facilities were installed at BMW's
headquarters in Munich. In 2015, BMW in cooperation with SCHERM Group has started
deploying electric trucks on European roads, making it the first company to ever do so. The
truck itself is manufactured by the Terberg Group, one of the world's largest independent
specialist vehicle suppliers.

Combined sales of the BMW i brand models reached the 50,000 unit milestone in January
2016. Two years after its introduction, the BMW i3 ranked as the world's third best selling all-
electric car in history. Global sales of the BMW i3 achieved the 50,000 unit milestone in July
2016.

In February 2016, BMW announced the introduction of the "iPerformance" model designation,
which will be given to all BMW plug-in hybridvehicles from July 2016. The aim is to provide
a visible indicator of the transfer of technology from BMW i to the BMW core brand. The new
designation will be used first on the plug-in hybrid variants of the latest BMW 7 Series. Global
sales of all BMW plug-in electrified models achieved the 100,000 unit milestone in early
November 2016, consisting of more than 60,000 BMW i3s, over 10,000 BMW i8s, and about
30,000 from combined sales of all BMW iPerformance plug-in hybrid models.

As of November 2016, four BMW electrified models have been released, the BMW X5
xDrive40e iPerformance, BMW 225xe iPerformance Active Tourer, BMW 330e
iPerformance, and the BMW 740e iPerformance. The BMW 530e iPerformance is scheduled
to be released in Europe March 2017 as part of the upcoming seventh generation BMW 5
Series lineup. Global sales of all plug-in electrified models achieved the 100,000 unit milestone
in early November 2016, consisting of more than 60,000 i3s, over 10,000 i8s, and about 30,000
from combined sales of all BMW iPerformance plug-in hybrid models. Combined global sales
of BMW’s electrified models totaled more than 62,000 units in 2016, and 103,080 in 2017,
including MINI brand electrified vehicles. Cumulative global sales of BMW Group's
electrified vehicles passed the 250,000 unit milestone in April 2018.

Architecture
BMW's Munich headquarters represents the cylinder head of a 4-cylinder engine. It was
designed by Karl Schwanzer and was completed in 1972. The building has become a European
icon and was declared a protected historic building in 1999. The main tower consists of four
vertical cylinders standing next to and across from each other. Each cylinder is divided
horizontally in its center by a mold in the facade. Notably, these cylinders do not stand on the
ground; they are suspended on a central support tower.

BMW Museum is a futuristic cauldron-shaped building, which was also designed by Karl
Schwanzer and opened in 1972. The interior has a spiral theme and the roof is a 40-metre
diameter BMW logo.

BMW's exhibition space in Munich, BMW Welt, was designed by and opened in 2007. It
includes a showroom and lifting platforms where a customer's new car is theatrically unveiled
to the customer.

The BMW Central Building in Leipzig was designed by Zaha Hadid.

MAJOR WORKS

In November 2016, BMW recalled 136,000 2007–2012 model year U.S. cars for fuel pump
wiring problems possibly resulting in fuel leak and engine stalling or restarting issues.

In May 2017, ABC News reported on an investigation, in which they found dozens of instances
of parked BMW cars catching fire, including some parked in home garages.

In fall 2017, BMW recalled roughly a million cars and SUVs for fire risk. One recall was for
672,000 3 Series cars from model years 2006-11 with climate control system electronic
components at risk of overheating. The second recall was for 740,000 six-cylinder models
(328i, 525i), at risk of crankcase heating short-circuit; some Series 3 cars were subject to both
recalls.

In August 2018, BMW recalled 106,000 diesel vehicles in South Korea with a defective
exhaust gas recirculation module after some cars caught on fire, then expanded the recall to
324,000 more cars in Europe.
Environmental record

BMW is a charter member of the U.S. Environmental Protection Agency's


(EPA) National Environmental Achievement Track, which recognizes companies for their
environmental stewardship and performance. It is also a member of the South Carolina
Environmental Excellence Program.

Since 1999, BMW has been named the world's most sustainable automotive
company every year by the Dow Jones Sustainability Index. The BMW Group is one of three
automotive companies to be featured every year in the index. In 2001, the BMW Group
committed itself to the United Nations Environment Programme, the UN Global Compact and
the Cleaner Production Declaration. It was also the first company in the automotive industry to
appoint an environmental officer, in 1973. BMW is a member of the World Business Council
for Sustainable Development.

In 2012, BMW was the highest automotive company in the Carbon Disclosure Project's Global
500 list, with a score of 99 out of 100. The BMW Group was rated the most sustainable DAX
30 company by Sustainalytics in 2012.

To reduce vehicle emissions, BMW is improving the efficiency of existing fossil-fuel powered
models, while researching electric power, hybrid power and hydrogen for future models.

During the first quarter of 2018, BMW sold 26,858 Electrified Vehicles (EVs, PHEVs, &
Hybrids)

CAR-SHARING SERVICES

DriveNow is a joint-venture between BMW and Sixt that was launched in Munich in June
2011, and now operates in thirteen cities around Europe. As of December 2012 DriveNow
operates over 1,000 vehicles, which serve five cities worldwide and over 60,000 customers.

In the United States, BMW launched the ReachNow car-sharing service in Seattle in April
2016. ReachNow currently operates in Seattle, Portland and Brooklyn.
CHAPTER-4

THEROTICAL FRAMEWORK
Customer relationship management

Customer relationship management (CRM) is an approach to manage a company's


interaction with current and potential customers. It uses data analysis about customers' history
with a company to improve business relationships with customers, specifically focusing
on customer retention and ultimately driving sales growth.

One important aspect of the CRM approach is the systems of CRM that compile data from a
range of different communication channels, including a company's website, telephone, email,
live chat, marketing materials, and more recently, social media. Through the CRM approach
and the systems used to facilitate it, businesses learn more about their target audiences and how
to best cater to their needs.

SOFTWARE HISTORY

The concept of customer relationship management started in the early 1970s,


when customer satisfaction was evaluated using annual surveys or by front-line asking. At that
time, businesses had to rely on standalone mainframe systems to automate sales, but the extent
of technology allowed them to categorize customers in spreadsheets and lists. In 1982, Kate
and Robert Kestnbaum introduced the concept of Database marketing, namely applying
statistical methods to analyze and gather customer data. By 1986, Pat Sullivan and Mike
Muhney released a customer evaluation system called ACT! based on the principle of digital
rolodex, which offered a contact management service for the first time.

The trend was followed by numerous developers trying to maximize leads'


potential, including Tom Siebel, who designed the first CRM product Siebel Systems in 1993.
Nevertheless, customer relationship management popularized in 1997, due to the work of
Siebel, Gartner, and IBM. Between 1997 and 2000, leading CRM products were enriched
with enterprise resource planning functions, and shipping and marketing capabilities.[5] Siebel
introduced the first mobile CRM app called Siebel Sales Handheld in 1999. The idea of a cloud-
hosted and moveable customer bases was soon adopted by other leading providers at the time,
including PeopleSoft, Oracle, and SAP.
The first open-source CRM system was developed by Sugar CRM in 2004. During this period,
CRM was rapidly migrating to cloud, as a result of which it became accessible to sole
entrepreneurs and small teams. This increase in accessibility generated a huge wave of price
reduction. Around 2009, developers began considering the options to profit from social media's
momentum, and designed tools to help companies become accessible on all users' favorite
networks. Many startups at the time benefited from this trend to provide exclusively social
CRM solutions, including Base and Nutshell. The same year, Gartner organized and held the
first Customer Relationship Management Summit, and summarized the features systems
should offer to be classified as CRM solutions. In 2013 and 2014, most of the popular CRM
products were linked to business intelligence systems and communication software to improve
corporate communication and end-users' experience. The leading trend is to replace
standardized CRM solutions with industry-specific ones, or to make them customizable enough
to meet the needs of every business.

In November 2016, Forrester released a report where it "identified the nine most significant
CRM suites from eight prominent vendors," among them companies such as Infor, Microsoft,
and NetSuite.

TYPES

Strategic

Strategic CRM is focused upon the development of a customer-centric business culture.

Operational

The primary goal of customer relationship management systems is to integrate


and automate sales, marketing, and customer support. Therefore, these systems typically have
a dashboard that gives an overall view of the three functions on a single customer view, a single
page for each customer that a company may have. The dashboard may provide client
information, past sales, previous marketing efforts, and more, summarizing all of the
relationships between the customer and the firm. Operational CRM is made up of 3 main
components: sales force automation, marketing automation, and service automation.
 Sales force automation works with all stages in the sales cycle, from initially entering
contact information to converting a prospective client into an actual client.[12] It
implements sales promotion analysis, automates the tracking of a client's account history
for repeated sales or future sales and coordinates sales, marketing, call centers, and retail
outlets. It prevents duplicate efforts between a salesperson and a customer and also
automatically tracks all contacts and follow-ups between both parties
 Marketing automation focuses on easing the overall marketing process to make it more
effective and efficient. CRM tools with marketing automation capabilities can automate
repeated tasks, for example, sending out automated marketing emails at certain times to
customers, or posting marketing information on social media. The goal with marketing
automation is to turn a sales lead into a full customer. CRM systems today also work
on customer engagement through social media.
 Service automation is the part of the CRM system that focuses on direct customer service
technology. Through service automation, customers are supported through multiple
channels such as phone, email, knowledge bases, ticketing portals, FAQs, and more.

Analytical

The role of analytical CRM systems is to analyze customer data collected through
multiple sources, and present it so that business managers can make more informed
decisions. Analytical CRM systems use techniques such as data mining, correlation, and
pattern recognition to analyze the customer data. These analytics help improve customer
service by finding small problems which can be solved, perhaps, by marketing to different parts
of a consumer audience differently. For example, through the analysis of a customer base's
buying behavior, a company might see that this customer base has not been buying a lot of
products recently. After scanning through this data, the company might think to market to this
subset of consumers differently, in order to best communicate how this company's products
might benefit this group specifically.

Collaborative

The third primary aim of CRM systems is to incorporate external stakeholders such as
suppliers, vendors, and distributors, and share customer information across groups/departments
and organisations. For example, feedback can be collected from technical support calls, which
could help provide direction for marketing products and services to that particular customer in
the future.

Customer data platform


A customer data platform (CDP) is a computer system used by marketing
departments that assembles data about individual people from various sources into one
database, with which other software systems can interact. As of February 2017 there were
about twenty companies selling such systems and revenue for them was around
US$300 million.

COMPONENTS

Components in the different types of CRM

The main components of CRM are building and managing customer relationships through
marketing, observing relationships as they mature through distinct phases, managing these
relationships at each stage and recognizing that the distribution of value of a relationship to the
firm is not homogenous. When building and managing customer relationships through
marketing, firms might benefit from using a variety of tools to help organizational design,
incentive schemes, customer structures, and more to optimize the reach of its marketing
campaigns. Through the acknowledgement of the distinct phases of CRM, businesses will be
able to benefit from seeing the interaction of multiple relationships as connected transactions.
The final factor of CRM highlights the importance of CRM through accounting for the
profitability of customer relationships. Through studying the particular spending habits of
customers, a firm may be able to dedicate different resources and amounts of attention to
different types of consumers.

Relational Intelligence, or awareness of the variety of relationships a customer can have with
a firm, is an important component to the main phases of CRM. Companies may be good at
capturing demographic data, such as gender, age, income, and education, and connecting them
with purchasing information to categorize customers into profitability tiers, but this is only a
firm's mechanical view of customer relationships. This therefore is a sign that firms believe
that customers are still resources that can be used for up-sell or cross-sell opportunities, rather
than humans looking for interesting and personalized interactions.

CRM systems include:

 Data warehouse technology, used to aggregate transaction information, to merge the


information with CRM products, and to provide key performance indicators.
 Opportunity management which helps the company to manage unpredictable growth and
demand, and implement a good forecasting model to integrate sales history with sales
projections.
 CRM systems that track and measure marketing campaigns over multiple networks,
tracking customer analysis by customer clicks and sales.
 Some CRM software is available as a software as a service (SaaS), delivered via the
internet and accessed via a web browser instead of being installed on a local computer.
Businesses using the software do not purchase it, but typically pay a recurring subscription
fee to the software vendor.
 For small businesses a CRM system may consist of a contact manager system that
integrates emails, documents, jobs, faxes, and scheduling for individual accounts. CRM
systems available for specific markets (legal, finance) frequently focus on event
management and relationship tracking as opposed to financial return on investment (ROI).
 CRM systems for eCommerce, focused on marketing automation tasks, like: cart rescue,
re-engage users with email, personalization.
 Customer-centric relationship management (CCRM) is a nascent sub-discipline that
focuses on customer preferences instead of customer leverage. CCRM aims to add value
by engaging customers in individual, interactive relationships.
 Systems for non-profit and membership-based organizations help track constituents,
fundraising, sponsors' demographics, membership levels, membership directories,
volunteering and communication with individuals.

EFFECT ON CUSTOMER SATISFACTION

Customer satisfaction has important implications for the economic


performance of firms because it has the ability to increase customer loyalty and usage behavior
and reduce customer complaints and the likelihood of customer defection. The implementation
of a CRM approach is likely to have an effect on customer satisfaction and customer knowledge
for a variety of different reasons.

Firstly, firms are able to customize their offerings for each customer. By accumulating
information across customer interactions and processing this information to discover hidden
patterns, CRM applications help firms customize their offerings to suit the individual tastes of
their customers. This customization enhances the perceived quality of products and services
from a customer's viewpoint, and because perceived quality is a determinant of customer
satisfaction, it follows that CRM applications indirectly affect customer satisfaction. CRM
applications also enable firms to provide timely, accurate processing of customer orders and
requests and the ongoing management of customer accounts. For example, Piccoli and
Applegate discuss how Wyndham uses IT tools to deliver a consistent
service experience across its various properties to a customer. Both an improved ability to
customize and a reduced variability of the consumption experience enhance perceived quality,
which in turn positively affects customer satisfaction. Furthermore, CRM applications also
help firms manage customer relationships more effectively across the stages of relationship
initiation, maintenance, and termination.

Customer benefits
With Customer relationship management systems customers are served better on day to day
process and with more reliable information their demand of self service from companies will
decrease. If there is less need to interact with the company for different problems, customer
satisfaction level increases. These central benefits of CRM will be connected hypothetically to
the three kinds of equity that are relationship, value and brand, and in the end to customer
equity. Eight benefits were recognized to provide value drivers.

1. Enhanced ability to target profitable customers.


2. Integrated assistance across channels
3. Enhanced sales force efficiency and effectiveness
4. Improved pricing
5. Customized products and services
6. Improved customer service efficiency and effectiveness
7. Individualized marketing messages also called campaigns
8. Connect customers and all channels on a single platform.

In 2012, after reviewing the previous studies, someone selected some of those benefits which
are more significant in customer's satisfaction and summarized them into the following cases:

1. Improve customer services: In general, customers would have some questions, concerns
or requests. CRM services provide the ability to a company for producing, allocating
and managing requests or something made by customers. For example, call
center software, which helps to connect a customer to the manager or person who can
best assist them with their existing problem, is one of the CRM abilities that can be
implemented to increase efficiency.
2. Increased personalized service or one-to-one service: Personalizing customer service
or one-to-one service provides companies to improve understanding and gaining
knowledge of the customers and also to have better knowledge about their customers'
preferences, requirements and demands.
3. Responsive to customer's needs: Customers' situations and needs can be understood by
the firms focusing on customer needs and requirements.
4. Customer segmentation: In CRM, segmentation is used to categorize customers,
according to some similarity, such as industry, job or some other characteristics, into
similar groups. Although these characteristics, can be one or more attributes. It can be
defined as a subdividing the customers based on already known good discriminator.
5. Improve customization of marketing: Meaning of customization of marketing is that,
the firm or organization adapt and change its services or products based on presenting
a different and unique product or services for each customer. With the purpose of
ensuring that customer needs and requirements are met Customization is used by the
organization. Companies can put investment in information from customers and then
customize their products or services to maintain customer interests.
6. Multichannel integration: Multichannel integration shows the point of co creation of
customer value in CRM. On the other hand, a company's skill to perform multichannel
integration successfully, is heavily dependent on the organization's ability getting
together customer information from all channels and incorporate it with other related
information.
7. Time saving: CRM will let companies to interact with customers more frequently, by
personalized message and communication way which can be produced rapidly and
matched on a timely basis, and finally they can better understand their customers and
therefore look forward to their needs.
8. Improve customer knowledge: Firms can make and improve products and services
through the information from tracking (e.g. via website tracking) customer
behaviour to customer tastes and needs. CRM could contribute to a competitive
advantage in improving firm's ability of customer information collecting to customize
products and services according to customer needs.

Examples

Research has found a 5% increase in customer retention boosts lifetime customer


profits by 50% on average across multiple industries, as well as a boost of up to 90% within
specific industries such as insurance. Companies that have mastered customer relationship
strategies have the most successful CRM programs. For example, MBNA Europe has had a
75% annual profit growth since 1995. The firm heavily invests in screening potential
cardholders. Once proper clients are identified, the firm retains 97% of its profitable customers.
They implement CRM by marketing the right products to the right customers. The firm's
customers' card usage is 52% above industry norm, and the average expenditure is 30% more
per transaction. Also 10% of their account holders ask for more information on cross-sale
products.

Amazon has also seen great success through its customer proposition. The firm implemented
personal greetings, collaborative filtering, and more for the customer. They also used CRM
training for the employees to see up to 80% of customers repeat.
CUSTOMER PERCEPTION

Further information: Consumer behaviour, Biology and consumer behaviour, and Buying
decision

Customer or consumer profiles are the essence of the data that is collected alongside core data
(name, address, company) and processed through customer analytics methods, essentially a
type of profiling. A customer is abstracted to information that sums up consumption habits so
far and projects them into the future so that they can be grouped for marketing
and advertising purposes.

IMPROVING CRM WITH A FIRM


Consultants, such as Bain & Company, argue that it is important for companies
establishing strong CRM systems to improve their relational intelligence. According to this
argument, a company must recognize that people have many different types of relationships
with different brands. One research study analyzed relationships between consumers in China,
Germany, Spain, and the United States, with over 200 brands in 11 industries including airlines,
cars and media. This information is valuable as it provides demographic, behavioral, and value-
based customer segmentation. These types of relationships can be both positive and negative.
Some customers view themselves as friends of the brands, while others as enemies, and some
are mixed with a love-hate relationship with the brand. Some relationships are distant, intimate
or anything in between.

Analyzing the information

Managers must understand the different reasons for the types of relationships, and provide the
customer with what they are looking for. Companies can collect this information by
using surveys, interviews, and more, with current customers. For example, Frito-
Lay conducted many ethnographic interviews with customers to try and understand the
relationships they wanted with the companies and the brands. They found that most customers
were adults who used the product to feel more playful. They may have enjoyed the company's
bright orange color, messiness and shape.

Companies must also improve their relational intelligence of their CRM systems. These days,
companies store and receive huge amounts of data through emails, online chatsessions, phone
calls, and more. Many companies do not properly make use of this great amount of data,
however. All of these are signs of what types of relationships the customer wants with the firm,
and therefore companies may consider investing more time and effort in building out their
relational intelligence. Companies can use data miningtechnologies and web searches to
understand relational signals. Social media such as Facebook, Twitter, blogs, etc. is also a very
important factor in picking up and analyzing information. Understanding the customer and
capturing this data allows companies to convert customer's signals into information and
knowledge that the firm can use to understand a potential customer's desired relations with a
brand.

It is also very important to analyze all of this information to determine which relationships
prove the most valuable. This helps convert data into profits for the firm. Stronger bonds
contribute to building market share. By managing different portfolios for different segments of
the customer base, the firm can achieve strategic goals.

Employee training

Many firms have also implemented training programs to teach employees how to recognize
and effectively create strong customer-brand relationships. For example, Harley Davidsonsent
its employees on the road with customers, who were motorcycle enthusiasts, to help solidify
relationships. Other employees have also been trained in social psychology and the social
sciences to help bolster strong customer relationships. Customer service representatives must
be educated to value customer relationships, and trained to understand existing customer
profiles. Even the finance and legal departments should understand how to manage and build
relationships with customers.
Application

Applying new technologies while using CRM systems requires changes in infrastructure of the
organization as well as deployment of new technologies such as business
rules, databases and information technology.

IN PRATICE

Call centers

Contact center CRM providers are popular for small and mid-market businesses. These
systems codify the interactions between company and customers by using analytics and key
performance indicators to give the users information on where to focus their marketing and
customer service. This allows agents to have access to a caller's history to provide personalized
customer communication. The intention is to maximize average revenue per user,
decrease churn rate and decrease idle and unproductive contact with the customers.

Growing in popularity is the idea of gamifying, or using game design elements and game
principles in a non-game environment such as customer service environments. The
gamification of customer service environments includes providing elements found in games
like rewards and bonus points to customer service representatives as a method of feedback for
a job well done. Gamification tools can motivate agents by tapping into their desire for rewards,
recognition, achievements, and competition.

Contact center automation

Contact center automation, the practice of having an integrated system that coordinates
contacts between an organization and the public, is designed to reduce the repetitive and tedious
parts of a contact center agent's job. Automation prevents this by having pre-recorded audio
messages that help customers solve their problems. For example, an automated contact center
may be able to re-route a customer through a series of commands asking him or her to select a
certain number in order to speak with a particular contact center agent who specializes in the
field in which the customer has a question. Software tools can also integrate with the agent's
desktop tools to handle customer questions and requests. This also saves time on behalf of the
employees.

Social media
Social CRM involves the use of social media and technology to engage and learn from
consumers. Because the public, especially young people, are increasingly using social
networking sites, companies use these sites to draw attention to their products, services and
brands, with the aim of building up customer relationships to increase demand.

Some CRM systems integrate social media sites like Twitter, LinkedIn and Facebook to track
and communicate with customers. These customers also share their own opinions and
experiences with a company's products and services, giving these firms more insight.
Therefore, these firms can both share their own opinions and also track the opinions of their
customers.

Enterprise feedback management software platforms, such as Confirmit, Medallia, and


Satmetrix, combine internal survey data with trends identified through social media to allow
businesses to make more accurate decisions on which products to supply.

Location-based services
CRM systems can also include technologies that create geographic marketing campaigns. The
systems take in information based on a customer's physical location and sometimes integrates
it with popular location-based GPS applications. It can be used for networking or contact
management as well to help increase sales based on location.

Business-to-business transactions

Despite the general notion that CRM systems were created for the customer-centric businesses,
they can also be applied to B2B environments to streamline and improve customer management
conditions. For the best level of CRM operation in a B2B environment, the software must be
personalized and delivered at individual levels.
The main differences between business-to-consumer (B2C) and business-to-business CRM
systems concern aspects like sizing of contact databases and length of relationships. Business-
to-business companies tend to have smaller contact databases than business-to-consumer, the
volume of sales in business-to-business is relatively small. There are fewer figure propositions
in business-to-business, but in some cases, they cost a lot more than business-to-consumer
items and relationships in business-to-business environment are built over a longer period of
time. Furthermore, business-to-business CRM must be easily integrated with products from
other companies. Such integration enables the creation of forecasts about customer behavior
based on their buying history, bills, business success, etc. An application for a business-to-
business company must have a function to connect all the contacts, processes and deals among
the customers segment and then prepare a paper. Automation of sales process is an important
requirement for business-to-business products. It should effectively manage the deal and
progress it through all the phases towards signing. Finally, a crucial point is personalization. It
helps the business-to-business company to create and maintain strong and long-lasting
relationship with the customer.

CRM MARKET

The overall CRM market grew by 12.3 percent in 2015. The following table lists the top
vendors in 2012-2015 (figures in millions of US dollars) published in Gartner studies.

201 201
2015 2014 2013 2012
2015 2014 3 2
Reve Reve Reve Reve
Vendor Share Share Sha Sha
nue nue nue nue
(%) (%) re re
($M) ($M) ($M) ($M)
(%) (%)

Salesforce
5,171 19.7 4,250 18.4 3,292 16.1 2,525 14.0
.com CRM

SAP AG 2,684 10.2 2,795 12.1 2,622 12.8 2,327 12.9


201 201
2015 2014 2013 2012
2015 2014 3 2
Reve Reve Reve Reve
Vendor Share Share Sha Sha
nue nue nue nue
(%) (%) re re
($M) ($M) ($M) ($M)
(%) (%)

Oracle 2,047 7.8 2,102 9.1 2,097 10.2 2,015 11.1

Microsoft
Dynamics 1,142 4.3 1,432 6.2 1,392 6.8 1,135 6.3
CRM

Others 15,245 58.0 12,520 54.2 11,076 54.1 10,086 55.7

Total 26,287 100 23,100 100 20,476 100 18,090 100

The four largest vendors with CRM system offerings are Salesforce, SAP, Oracle,
and Microsoft, which represented 42 percent of the market in 2015. Other providers also are
popular for small and mid market businesses. Splitting CRM providers into nine different
categories (Enterprise CRM Suite, Midmarket CRM Suite, Small-Business CRM Suite, sales
force automation, incentive management, marketing solutions, business intelligence, data
quality, consultancies), each category has a different market leader. Additionally, applications
often focus on professional fields such as healthcare, manufacturing, and other areas with
branch-specific requirements.

MARKET TRENDS

In the Gartner CRM Summit 2010 challenges like "system tries to capture data from social
networking traffic like Twitter, handles Facebook page addresses or other online social
networking sites" were discussed and solutions were provided that would help in bringing more
clientele Many CRM vendors offer subscription-based web tools (cloud computing) and SaaS.
Some CRM systems are equipped with mobile capabilities, making information accessible to
remote sales staff. Salesforce.com was the first company to provide enterprise applications
through a web browser, and has maintained its leadership position.

Traditional providers have recently moved into the cloud-based


market via acquisitions of smaller providers: Oracle purchased Right Now in October
2011 and SAP acquired Success Factors in December 2011.

The era of the "social customer" refers to the use of social media
(Twitter, Facebook, LinkedIn, Google Plus, Pinterest, Instagram, Yelp, customer reviews
in Amazon, etc.) by customers. CRM philosophy and strategy has shifted to encompass social
networks and user communities.

Sales forces also play an important role in CRM, as maximizing sales effectiveness and
increasing sales productivity is a driving force behind the adoption of CRM. Empowering sales
managers was listed as one of the top 5 CRM trends in 2013

Another related development is vendor relationship management (VRM), which provide tools
and services that allow customers to manage their individual relationship with vendors. VRM
development has grown out of efforts by Project VRM at Harvard's Berkman Center for
Internet & Society and Identity Commons' Internet Identity Workshops, as well as by a
growing number of startups and established companies. VRM was the subject of a cover story
in the May 2010 issue of CRM Magazine.

Pharmaceutical companies were some of the first investors in sales force automation (SFA)
and some are on their third- or fourth-generation implementations. However, until recently, the
deployments did not extend beyond SFA—limiting their scope and interest to Gartner analysts.

Another trend worth noting is the rise of Customer Success as a discipline within companies.
More and more companies establish Customer Success teams as separate from the traditional
Sales team and task them with managing existing customer relations. This trend fuels demand
for additional capabilities for more holistic understanding of the customer health, which is a
limitation for many existing vendors in the space. As a result, a growing number of new
entrants enter the market, while existing vendors add capabilities in this area to their suites. In
2017, artificial intelligence and predictive analytics were identified as the newest trends in
CRM.

CRITICISM

Companies face large challenges when trying to implement CRM systems. Consumer
companies frequently manage their customer relationships haphazardly and unprofitably. They
may not effectively or adequately use their connections with their customers, due to
misunderstandings or misinterpretations of a CRM system's analysis. Clients who want to be
treated more like a friend may be treated like just a party for exchange, rather than a unique
individual, due to, occasionally, a lack of a bridge between the CRM data and the CRM analysis
output. Many studies show that customers are frequently frustrated by a company's inability to
meet their relationship expectations, and on the other side, companies do not always know how
to translate the data they have gained from CRM software into a feasible action plan. In 2003,
a Gartner report estimated that more than $2 billion had been spent on software that was not
being used. According to CSO Insights, less than 40 percent of 1,275 participating companies
had end-user adoption rates above 90 percent. Many corporations only use CRM systems on a
partial or fragmented basis. In a 2007 survey from the UK, four-fifths of senior executives
reported that their biggest challenge is getting their staff to use the systems they had installed.
43 percent of respondents said they use less than half the functionality of their existing
systems. However, market research regarding consumers' preferences may increase the
adoption of CRM among the developing countries' consumers.

Collection of customer data such as personally identifiable information must strictly


obey customer privacy laws, which often requires extra expenditures on legal support.
Part of the paradox with CRM stems from the challenge of determining exactly what CRM is
and what it can do for a company. The CRM paradox, also referred to as the "Dark side of
CRM", may entail favoritism and differential treatment of some customers.

CRM technologies can easily become ineffective if there is no proper management, and they
are not implemented correctly. The data sets must also be connected, distributed, and organized
properly, so that the users can access the information that they need quickly and easily.
Research studies also show that customers are increasingly becoming dissatisfied with contact
center experiences due to lags and wait times. They also request and demand multiple channels
of communications with a company, and these channels must transfer information seamlessly.
Therefore, it is increasingly important for companies to deliver a cross-channel customer
experience that can be both consistent as well as reliable.
CHAPTER-5

FINDINGS
FINDINGS