CHAPTER 1

Commerce in the 21 st

century
1. Understanding the landscape
2. Defining customer loyalty
3. Loyalty in the new market place
4. Building & managing relationships in the new market
place
 1. UNDERSTANDING THE
LANDSCAPE
A. The internal landscape
B. The new market place
C. The impact
D. The result
A. THE INTERNAL LANDSCAPE

Best Total Cost

Best Total
Product

Best Total Solution

The value discipline model

 CONT.…
a. Operational excellence
Involves building business processes that provide the best product quality,
best price and the best purchasing experience, yielding the best total cost to
the customer
b. Product leadership
Involves focusing investment and energy into developing the product that is
the newest or most revolutionary or most sought after, offering the best
product to the customer
c. Customer intimacy
Involves building strong customer relationships, really getting to know your
customers so you are sure to really understand their situation, which should
yield the best total solution for the customer.
B. THE NEW MARKET PLACE

Internet internet internet internet internet internet Internet

internet internet internet internet internet Internet internet
internet internet internet internet Internet internet internet
internet internet internet Internet internet internet internet
internet internet Internet internet internet internet internet
internet Internet internet internet internet internet internet
Internet internet internet internet internet internet Internet
internet internet internet internet internet Internet internet
internet internet internet internet Internet internet internet
internet internet internet Internet internet internet internet
internet internet, but the basics still count.
 CONT.….
a. Access
More information in customer’s hands
b. Control
Customers will do business when and how they want to do it
c. Speed
You want it now, you get it now
d. Globalization
World is an open marketplace for everyone
e. Automation
Internet has eliminated many of the employees
 C. THE IMPACT
Internet Product Customer
Operational Excellence
effects Leadership Intimacy
Providing human
Access Easier to compare & swap Commoditization
contact
Broader choice,
Interaction
Control Always on less
preference
differentiation
Products unique
Efficiency, not
Speed Process expectations for shorter
loyalty
periods
Localization of Unknown language,
Globalization Language, localization
products culture
Loss of human
Distance from
automation Process disconnects memory,
customer needs
connection
Summary of changes in the
marketplace
 D. THE RESULT
 Customer loyalty is the single most important differentiator
for ensuring competitiveness and success in 21st century.

 CRM is a continuation of marketing practices and brand

management, it keeps you apart.
 2. DEFINING CUSTOMER LOYALTY

Who is a Customer?

 A customer is a human being. Only human beings can make

decisions and use products.
 A customer is a person who has acquired or is considering the
acquisition of one of our products. Anyone who is involved in
making a decision, from the financial decision maker to the
decision influencer to the end user is a customer.
 A customer company is an organization that has characteristics
that influence the group of people who work there.
 CONT….
 Customer loyalty is a behavior, built on positive
experiences and value. This behavior is buying our
products, even when that may not appear to be the
most rational decision.

 Loyalty occurs when an individual has a vested

interest in maintain a close relationship, usually
resulting from a series of positive experiences that
have occurred over time. These experiences can be
either tangible or intangible.
 3. LOYALTY IN THE NEW MARKET
PLACE Commoditiza
tion = lower
profits

Loyalty & disloyalty

Lower profit
Loyalty and profits
Less
differentiation = = less R&D
commoditization
money

Loyalty and value discipline model

Less R&D
 loyalty and operation excellence money = less
differentiation

 Loyalty and product leadership

 Loyalty and customer intimacy
 4. BUILDING & MANAGING RELATIONSHIPS
IN THE NEW MARKET PLACE

Match our operational Build the products we

processes to known know the customer
customer expectations needs and wants

Build and customize our product and

service offerings to meet specific
customer expectations