Issue 1 April 12 2010

CON SU M E R RE LA TION SH IP M A AG E M E N T

THE IMPORTNACE OF RELATIONSHIPS IN A B2B RELATIONSHIP
THE IMPORTNACE OF PROVIDING PHYSICAL EVIDENCE OF QUALITY IN AND VALUE IN A B2C RELATIONSHIP
1

THE BUILDING OF TRUST AND EROSION OF TRUST

This will motivate the customers to buy from that particular company. Consumer relationship management is a very important area of study which organizations in the twenty-first century cannot avoid or ignore. As it has always been said. EDITORIAL NOTE Editor: There are various ways organizations can use to establish lasting positive relationships between them and their customers. What you Need to Know. This must involve all the employees and management of the company. the firm establishes strong relationship with their clients. valued and involved in the production process. the firm should work hard to maintain it through trust. Trying to make a customer the subject and the firm the king is a sure way to failure. This is because the consumers of this century are becoming more sophisticated and demanding. One way is through product engineering which should be done after the carrying out research and consulting the customers. customer is the king. firms that want to thrive in today’s market must invest in consumer relationship management.com Contributing writers: Abuu Omari Collins Sabatia Faheem Suwani Kevin Muchiri Kwamboka Nyamongo Tianjiao Zhou Yves Rushingwa 2 . Therefore. This means that organizations should do all they can to see that they have give their clients the best and also maintain good relationship with their customers. It is for this reason that this magazine looks at consumer relationship management from different perspectives. Consulting the customers makes them feel important. This way. After establishing the relationship. Alfred Owino alferd_owino@ymail.Consumer Relationship Management.

6. 8. through a number of stages. consumers. As an ambitious business man you cannot avoid reading this. 4. 14. Cumulative satisfaction: When and why it is important Organizations can do a lot to achieve cumulative consumer satisfaction. Faheem Suwani clearly reveals this. 3 . discusses in-depth the topic of Business-to-business relationship. 10. the steps to go thorough in order to achieve successful product engineering. The importance of providing physical evidence of quality and value in a B2C relationship Customers need to be convinced about the quality and value of products because that is the only way you can get them to buy your products. Get to know this and other information on cumulative consumer satisfaction with Kevin Muchiri. 12. It is important for business organizations to understand this process.. The building of trust and erosion of trust Trust is a very essential ingredient in customer relationship management. Managing through the three time-zones In making purchases. Abuu Omari. why it is imperative and consequences of mistrust between customers and business organizations.. The importance of relationships in a B2B relationship Our writer. Get to know what trust in business is all about. the importance of re-engineering you product and some of the challenges of this important process. Learn how you can do this and also its importance. identify their target customers’ need and help them make quick and wise purchase decisions.In this Magazine. consciously or unconsciously. Re-engineering your product Collins Sabatia enlightens you on what product engineering is.

and better features that will meet their expectations and ensure satisfaction. the clearest definition of product re-engineering seems to be: The process of studying. With the blend of IT. Stage two. This study identifies potential re-usable components and analyzes the changes that would be needed. demand. In actual fact. managers are getting enlightened on product re-engineering The benefit of product re-engineering is that. market demands and technology in the small to medium enterprises (SME’S) are ever changing and will never be restrained. re-engineering planning: According to a new study by 3i InfoTech. Echoing this. understanding and modifying an existing product A into a new product A+ with new skin without alteration of the intended utility and purpose of the original product. The general stages of product re-engineering. this stage addresses issues associated with phasing out the old product and moving to the new enhanced product. 4 . profitability. Stage one. production cost. resource requirement and risk-return before the concept of the new product proceeds. it signifies the outside-in thinking of the company to the end consumer. The issues here include market intelligence. a global information technology company. The ever changing voice of the customer in a given target market segment. target market and customer priorities. This brings me to the basic stages involved in product re-engineering. consumers in these segments are demanding better products. analysis for Re-engineering: This involves studying the existing product attributes.RE-ENGINEERING YOUR PRODUCT The human quest for ideas and knowledge can never be confined! In the same tone. the new emerging technologies and competitive pressures are the driving forces behind the need for product reengineering in the SME’s. Broadly speaking there are four stages to which I will turn and discuss them in a procession. By Collins Sabatia: From the wide research and consultations I conducted before coming up with this article. product re-engineering is actively being pursued by SMEs and is therefore indisputably one of the critical product processes.

constraints. any SMEs practitioner reading this. Sabatia Collins a product re-engineering consultant while the products begin to stabi- lize in the market. The product is conformed to the benchmarking observations and approved before releasing it for production and commercialization. technology and risks. all it would take is embracing the real meaning of product re-engineering. keeping in view the demands of the customer so that your product continues to hold a competitive edge in the market. there is always a confront. effort. This paradigm will ensure that the company moves to a client-centric and relationship-based business without losing its The ultimate solution I have to say. The moment the product is launched in the market. technology obsolete .tical activities such as customization.Stage three. integration problems with other products and difficult to upgrade the product to new customized user requirements. This is especially important when it’s the and Integration are done. the focus shifts from providing extended ongoing product support and maintenance investigates a re-construction project at Westland’s in Kenya. Product re-engineering has challenges that include. After striking the ultimatum for implementation. This ensures a 360 relatechnology migration which is in question. the product undergoes the product development cycle. This provides insights into implicit assumptions. So what happens when you decide to re-engineer your product? Are you going to face some challenges despite the advantages mentioned above? Product re-engineering challenges In whatever you do. It provides a set of options and associated costs. interface with the external environment is paramount. in order for product re-engineering to be successful. and other drivers that impact the product re-use. presenting options: This unifies the re-engineering work at different levels. tionship with the consumer. complex planning. Stage four. localization. This means it will lead to execution of the reengineering process in a less faultless manner with minimum market and technology risks. the current system is benchmarked with the exist. difficultly in finding resources. Article by Sabatia Collins 5 . ing functionality. For sure. top level management support and appropriate market value. needs to the consumer As the person between it all. product Implementation stage: pracAfter that.

in which we do businesses. how can it be sustained between to parties? 2008. the global financial crisis provides an extremely good instance to illustrate how mistrust can affect the world. this is the secret to the successes of most companies worldwide . and indeed in any significant relationship. Even big banks refused to lend to each other because they did not trust the lenders to be able to repay the loans during the difficult times. is trust? How can it be achieved or weakened? And. Currently. and having faith in others and believing them. In The building of trust and erosion of trust In this world. precisely. is that the best way to build trust is to extend it to others. In business organizations and specifically in marketing for this case. in other words. the lifeblood of the global economy. Rock band Radio head released its last al- 6 . trust is the essential precondition upon which all real success depends. credit. As a result of the bankruptcy of the Freddie Mac and Fannie Mae many became jobless and homeless. building trust by trusting. marriage. Netflix (NFLX) trusts its employees to take whatever vacation they feel they need. trust is essential to building enduring relationships with employees. suppliers. Building trust and gaining other people’s trust But how can we gain it? It doesn't hurt to be honest and ethical. customers. In addition. the policies. and the communities ers don't get. then people started to distrust the government. nothing can undermine a relationship more completely than lack of trust. all but stopped flowing. and their companies. and this principle could also be applied in business. though. What most manag- What exactly do we mean by the word ‘trust’? Trust can be summarized as the reliance on another person or entity. Politics. But what. Tianjiao Zhou: A student at Australian Studies Institute pursuing Bachelor in Marketing and International Business. most importantly.

one must carefully sustain it. employee retention. Finally. In summary. too. are more apt to trust their organization when it is successful and their own competence. and employee motivation and contribution of discretionary energy. and generated more revenue than all its previous releases. How can we sustain trust in workplace? On of the best way to maintain trust in the workplace is to keep it from being broken in the first place. or transparency. Leaders and organizations promote a trust in the organization's environment when there is a strong. Management should nurture a culture of honesty and responsibility to ensure business is con- If one fails to sustain the created trust. The University of Michigan Health System encourages doctors to apologize when they make mistakes. and other providers are adopting this approach. trusting patients to forgive them—and risking legal liability. trusting fans to decide how much to pay. 7 . contribution and direction are recognized as being part of that big picture. The number of malpractice suits has dwindled. Providing information about the rationale. People.bum online. Integrity in the leadership of an organization is absolutely critical. We can gain trust from others by trusting them. trust is one of the most critical factors to the success of an organization in workplace. of that communication. the extra effort that people voluntarily invest in work. Another critical factor that can break a trust is how leaders communicate with staff and the truthfulness. Once trust had been created between two parties. One might wonder why trust is important Trust forms the foundation for effective communication. erosion is likely to occur. unifying mission and vision. and thought processes behind decisions will also build and maintain trust. background. ducted in the most ethical manner possible. managers should stress the importance of integrity since it is essential for trust within an organization.

These factors are also classified in to two: Internal factors. The delivery experience. judgmental new task. The stages are: • • • • • • The recognition of an unmet need. These are the situational factors that are encountered when one is buying a product. The list below shows the various sections or groups that are brought about in the product life cycle. Post-purchase evaluation. complex modified rebury.this is whereby we find the novelty and complexity present and the risks involved (task uncertainty) and the involvement and suggestions that the decision needs and strategies to be applied (importance of purchase decision).This is whereby industrial buyers often work hard to increase their options and alternatives (effectiveness of choice set) and the different behaviors of purchasers based on their perception of power (buyer power). Post-purchase. This is made according to the buyer decision process.The purchase factors can be classified starting from the casual purchases. The evaluation of alternatives.Venturesome. • • • Product adoption and product life cycle Marketers often fail to grasp that as the product life cycle unfolds. These three decisions normally deal with the level of involvement of the consumers. These normally work in business to and businesses to consumer transactions. routine low priority. Customers advance through six stages when a purchase. to a strategic new task. Business to business decision processes have some factors that are not present in business to consumer timeThe three time-zones in Customer Relationship Management. simple modified rebuy. A: Innovators . BY Faheem Suwani and Yves Rushingwa: Students at Australian Studies Institute pursuing Bachelor in Marketing and International Business buying decisions. customers place less emphasis on the technical aspects and product performance and more on the solutions that the product delivers. higher educated. thus bringing about the different stages of consumer decision making process and how it affects the product life cycle. Pre-purchase. External factors . Service encounter. the product life cycle. multiple information sources 8 . For ease of understanding. and the buyer decision process. these stages are often grouped into three time zones. The Buyer decision process. The purchase decision. All these in turn contribute to three time-zones as we will see later in this article. The search for information.

varies by product. This time-zone brings forward the and response involvement. This involvement deals with the cognitive level / level of thinking.Skeptical. Managers in this case might include information for slightly above average education the consumer for him/her to enter the purchase C: Early Majority . However this mainly deals with the informal social contacts D: Late Majority . availability of sales enduring involvement.Skeptics.B: Early Adopters .Leaders in social settings. thus marketers refer to it varied according to person and product. so is the post purchase behavior. 9 . situation determines the involvement and thus the The illustrations below will unite the concepts of response. As said before. response involvement and point of purchase stimuli. the the three time zones of the buyer decision process. his/her purchase. In the purchase decision. This is the second time-zone and it relates to fear of debt.Deliberate extensively many decision. below average social status The purchase decision E: Laggards . cautious. Most post as situational involvement. enduring response is importance of the situation. It will At this time-zone. response involvement. involvement in the buyer decision process. people. Live in the past. Situational involvement purchase involvement erodes with time. involvement decision which is not planned for while warranties and guarantees to ensure the consumer for others it is linked to them and their identity and does not feel a negative vibe towards the product. WOM neighbors friends. product management would best also be looking at the three types of involvement: be done by taking into consideration factors such as situational involvement. thus making it a high involvement product. and the behavioral effort required to make consumers past-experiences. affection / Involvement and the three time zones feeling. and suitable purchase environment so that the consumer can have an easier task in making The pre-purchase time-zone This time-zone reveals that there is a situation that requires attention (need recognition) and the The post-purchase time-zone information search is conducted to make the right This is the third time-zone and like both situational decision. For example buying chocolates is normally a low A manager can implement after sales services. person and their experience with With different products the life cycle is different and the product. the concept of involvement spans the purchase decision.

In this article.relationship with the consumer. ORGANISATION 100% CONSUMER EMPLOYEE 10 . Kevin Muchiri Cumulative Consumer Satisfaction in Practice CUMULATIVE CONSUMER SATISFACTION. Cumulative consumer satisfaction refers to a strategy used by marketers to improve the total product value and to build a profitable like NIVEA that produces body lotions. Many of these manufacturing companies have now resulted to the production of products that satisfy different needs in the same package. specific focus will be on small and medium size businesses owners who are on the verge of expansion of their business which translates to growth of the business in terms of consumer loyalty. deodorants and bathing soaps. A case of many small enterprises consumer satisfaction is essential for the success of the business. A SURE WAY TO KEEP YOUR CUSTOMERS COMING FOR MORE Small and medium size businesses get supplies from many manufacturing firms. shower gel. A good example would be a production firm Understanding Cumulative Consumer Satisfaction The topic focuses on when organizations should engage in cumulative consumer satisfaction and why it is important to engage in cumulative consumer satisfaction. shower shampoo. In many businesses today marketers try to understand consumers’ needs so as to develop better satisfaction strategies for the consumer. These products cater for the personal care needs for consumers in the same line of production. shaving cream. Organizations that engage in cumulative consumer satisfaction not only satisfy the consumer but also gain credibility and give the consumer confidence.

Successful cumulative consumer satisfaction is achieved through three major steps that have reasons and time frames set to ensure success. This clearly shows the aims of cumulative consumer satisfaction in terms of improving revenues and also the time frame set to engage in CCM which relates to the product lifecycle in order to boost sales. Addition Globalization has influenced many businesses’ operations and also the styles marketers are using to market new and existing products. Marketers who are venturing in the international market aim to add value to the product and the organization as a whole hence gaining competitive advantage in the market. Business Value Improving Revenue Cumulative consumer satisfaction could be used as a promotional tool for boosting revenue in the organization. one of the main aims is to reduce production costs. This shows a rough picture of when and why marketers engage in cumulative consumer satisfaction. Reduction of costs When engaging in cumulative consumer satisfaction. A reduction in cost can be achieved by gaining competitive advantage through cumulative satisfaction.The satisfaction triangle plays a major role in strategizing marketing of the product. who criticize it. organizations strive to attract more customers through offering products that satisfy consumer needs accordingly. hence improvements are made to guarantee satisfaction to the consumer when released to the market. The trend has led to the emergence of the value factor. In most organizations one of the main challenges in to improve the business especially in the marketing department because the department determines how well the product sell in the market. When there is a reduction in sales. Value in many organizations is added through merging and acquiring businesses in order to come up with better products in a bid to successfully implement cumulative consumer satisfaction. 11 . which is a reason for engaging in cumulative consumer satisfaction. Many organizations first introduce the product to its employees.

has to constantly move forward otherwise it will die. the technical part and other back-up that the buyer will receive throughout the life of the purchase. This way. “If you build a strong relationship. buyers are knowledgeable and multifaceted. Sharing of information.B2B RELATIONSHIP A solution for your Business relationship Have you realized why some businesses decide to integrate with each other in business dealings??? BY OMARY ABUU Relationship can be referred to an association whereby there is a consideration in the sense that. will tune into marketing that's geared toward them and provide their needs. who in this case are other firms. customers will tell each other about their experience with you. Business are be able to collect ideas and use them to improved their products and even attract more customers. Since information is shared then innovations comes in. it has to incorporate some sort of value exchange” 12 . The clients or customers. information flows between and among the businesses seeking to educate their target audience by providing specific factual information hence the needs of the clients are addressed properly and the product are customized to fit the client’s demands.” Expansion of marketing share. For instance Safaricom the leading mobile provider in Kenya advertise or integrate its Mpesa services to M-pesa dealers and other businesses in Kenya. Word of mouth spread fast and very influential. there is a sort of exchange between individual partners. In B2B relationship businesses are able to interact with the business client directly. associate or integrate with another business to network with that business with the aim of carrying out transactions or exchange products between the businesses. the marketing firm is able to capture large market size leading to increased sales and profita b i l i t y . Therefore having employees who are expert and knowledgeable will know how to handle customers also on the side of customers who are well-informed will know how express their needs. In B2B context. Developing such a relationship may be advantageous to the businesses. A firm gears its promotion efforts towards other companies. B2B relationship in business perspective is when a company or business interact. OMARY ABUU “A relationship. This way. Marketing to another business means that the firm targets a new market adding to its existing market size. it is critical that the marketer demonstrates a high level of expertise in all of its interactions with the target audience in both product knowledge.

In addition. satisfying business clients has no many differences with satisfying individual customers. Developing a relationship with a large reputable business will induce a stronger perception in consumers’ mind that the product offered are of high quality as the company are used to. Relationship is important when moving up the ladder. This may trigger the need for periodic quality of service reviews with his/her clients to decide on strategic priorities B2B relationship brings about longterm commitment. Developing a good relationship with other business will mean that firms become familiar with each others’ corpor a t e c u l t u r e . Another important thing that business will obtain from relationship is cultural integration. The some applies here. It means fulfilling the clients’ needs and satisfying them. split costs and to keep down purchasing costs. the more information you will obtain about others businesses. The suppler is also able to know how well to deliver. it creates recognition and awareness in business (visibility). Because of the small number of customers who dominate the lives of businesses. means that products and offered will be customized based on the purchasers’ needs - to keep them happy. That is to say. what he/she need to improve and being able to manage and monitor this activity across a collection of highly individual customers. the more popular you will be known to others. the more opportunities you will be exposed to. Winning consumers’ perception and securing an attribution agreement. This also may be seen as a strategy to sustain continuity of supply. database management become very easy to handle. marketers are able to track customer information and provide assistance whenever need. As a result of this cultural understanding . This will give the business the opportunity to differentiate its products from those of competitors which may give the firm a competitive advantage over other business. B2B relationship involves doing everything to satisfy customers and making decisions that are both beneficial to the firm and customers. they will take care of your business in returns. As they say. and the greater will be their chances of being accepted by other individuals or groups as someone to whom they can or should refer business to. Integrating or developing a strong relationship with other business. if you take care of your customers. Customers loyalty may lead to repetitive purchase which will increase sales volume of the firm and push-up profitability of the company. they get to appreciate the cultural diversities which is very important part of building a strong relationship. In conclusion. Since the customers have been satisfied with the products offered by the firm. Purchasers are looking to build strong business relationships with core suppliers.Easy database management. 13 . This way trust is gained between the businesses resulting to customer loyalty which brings about competitive advantages to the businesses. Firms will get to learn each others ways of doing business and understand the values and norms that they might share. Which is normally the important objective of many businesses. Firms should be aware that the more you develop a good relationship with other businesses. they are likely to become loyal to the company. Companies get to agree on the standards of products to be delivered to improve the supply qualities and strengthen the relationship. scratch my back and I will scratch yours.

manufacturers and service provider companies dictated what the consumer to produces and how deliver the product. packaging. For example.The importance of providing physical evidence of quality and value in a B2C relationship By Kwamboka Nyamongo These cues that signal product quality may In the past. First. This has made consumers to demand for product customization. By selling the product directly to its customers. a company selling clothes online are able to cut cost such rent (had they operated in a store). Often a specific product attribute will cue customers to quality. in the case of coffee. or extra costs such as interests to wholesalers. in good condition and preferably from a single provider. and production processes. Why provide customers with physical evidence of product quality and value? Provision of physical evidence of quality and value of the product being sold gives the product provider a number of advantages which in turn make it profitable for the business both in the short run and long run. distribution channels. and availability of information. a company is able to lower the buying price of the product as there are no extra costs. These include but are not limited to the product appearance. incurred who nor- 14 . How can we marketers provide physical evidence of product quality and value? There are a number of physical evidences that a marketer can use to capture customers and at the same time establish good relationships with the customers. changing customer tastes. faction. changing technology. retailers and agents. It is for this reason that marketers have to provide the right combination of physical evidence of quality and value indicators in order to give customers positive value and satisHowever this is not the case in today’s market. the attribute of soluble granules will cue most of the sample to quality. This was mainly because of the fact that they were the only providers of these products and the consumer had no choice but to purchase it . change over time due to competition. loyal customers. the company is able to save on extra costs. For instance. That will in turn create happy. There are many businesses providing the same products and competing for the same customers. high quality products. a marketer's promotional effort.

This builds a good foundation of a relationship between the customer and the company. This make it possible for them to lower the price of their products as they do not incur extra cost. in the long. This is what supermarkets competing for customers do. The presence of value-additions such as buying goods and earning redeemable points offers a customer value for what they give to the company. good quality and value for the product being sold increases customer loyalty. The customer gets good value when they get a quality product at a lower cost. particularly in the field of online-retailing. Providing customers with that which they want provides a good foundation of the relationships in B2C. The company gets to fully understand the age-old question “what do customers want?” The company can learn about this Second. run leads to more purchase of the product as the customers are can afford the product. Companies using Mass Customization side-by-side with conventional mass production can ideally transfer and employ their knowledge of customers' needs. This. for online companies. through the frequently asked questions (FAQs) that the customer ask and send to the company and customer care services . ens customer’s identification with the product which results in a positive perception of the actual sales process. the direct relationship between the customers and the company present a special experience. The company then acts on the responses generated from customers and in doing so they satisfy their customers and also gain access new markets. This directly affects customers' satisfaction with the acquired product. Companies providing physical evidence of qualThird. Fourth. The customer will therefore be loyal to the supermarket and only purchase from the company because of the redeemable points that they get after their purchase. a company is able to gather the cus- By selling the product at a lower price. This helps to tackle issues to do with customer satisfaction and know how they should overcome this and to satisfy them.mally act as intermediaries of the company to sell their products. This is common with banks where a customer fills the questions regarding the service provided by the company. through questionnaires filled by their customers. Better knowledge of customers' needs creates new market opportunities. This leads to a good relationship between the company and their customers as they are able to see the quality and value of their money. This strengthity and value in a B2C will retain their customers and also be able to attract new ones hereby increasing their revenue and market share. tomer’s views about the company. 15 . the customer has a high purchasing power since the product is more affordable to them.

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