Customer Relationship Management

Chapter 1 & 2
 Key Learning's
 How the marketing function is changing.

 The cause necessitating a change in marketing methods.

 The manner in which customer service is rendered.

 The importance of CRM for today’s managers.

 What is Marketing??
Marketing has evolved a lot after the production concept, product concept and the
selling concept took firm roots.

 Defining Marketing by various Management gurus:-

 Day & Ruekert:-The customer needs and wants and which needs to be
focused on and satisfied to maximize profit.

 Despande et al :- The customer orientation is a necessary aspect of modern

day marketing and the customer is central with respect to strategy and
operations.

 Foxall :- Marketing orientation acts as the organizational philosophy and

influences the attitude and behavior of all the people in the company.
 The Marketing Orientation
The demise of the mass production and mass distribution era
gave rise to the marketing orientation.

 McNamara proposed that firms needed to have processes and

structure to enable customer satisfaction and long term profits.

 Lawton and Parasuraman further elaborated it in consisting

of customer focus, coordinated marketing, marketing impact
on strategy and status an professionalism of the marketing
function.
 The Marketing Orientation
The Era of Mass Production :-

 They were identical offerings that did not make any variations
based on the unique needs of individuals.

 Resulted in the offers failed to meet the needs of individual

customers.

 Hence this led to the Market Orientation, which was regarded as a

method to enable firms to achieve better understanding of
customers.
 Re-Looking at Marketing Methods
 Changing Social Trends.

 Packaged Food(Ready to eat or heat and eat)

 Order cooked food (Home delivery of meals)
 Professional housekeepers and cooks
 Washing Machines
 Children’s computer games/cartoons, etc.
 Changing Social Trends.
The fallout of the changed family structures and modern attitudes of
family members meant that traditional marketing methods were not
effective. This led to ramifications in various aspects of marketing
like:-
 Products and Services:-No of products and Services that were in
demand previously found few takers.
Eg:-Various spices in packaged form, Cut vegetables in Packaged form.

 Sales and Distribution:-Home Delivery.

 Targeting and Positioning:-Companies targeting children with pocket

money and also Citibank Women a/c.
 Lesser Government Controls
Government are increasingly playing the role of facilitators to
enable global business transactions.
Now days firms have to contend with global competition and
often with firms that belong to countries that enjoy several
advantages with respect to
 Manpower costs.
 Energy costs.
 Government subsidies.
 Easy availability of technical experts.
 Lesser Government Controls
Maruti Udyog :-Fighting earlier with Hindustan Motors and
Premier Automobiles but later with big giants like GM,Ford,
Honda etc.
 Rising Income Levels
Greater affluence and increased spending power has transformed
the customers psyche and resulted in demand for exotic
offerings.

Consumers are upgrading themselves as they gain in affluence.

 Bicycles are being replaced by motorbikes and scooters in rural

India.

Consumers are able and willing to pay more for a better quality of
Life.
 Threats from New Forms
The customer is targeted by a new number of new forms of
offerings that promise to deliver the same benefit often with :-

 Better Features.
 Lesser Cost
 More Convenience

Eg:-Large number of Stock Brokering companies.

Computers have replaced typewriters.
 Emerging Trends In Marketing
 Shorter Product Life Cycle:-in 80’s the PLC model could be sold for
at least decade before needing an up gradation. But competitors later
in 90’s their product soon began to Obsolete in few years.
Eg:-Hindustan Motors Vs Maruti Udyog.

 Emergence of Permission Marketing

Permission Marketing Proposed by Seth Godin
 The Concept was take permission from the customer with offers, it
made more sense to get the customer to seek information and then
decide about the purchase.

Eg:-Free Newsletter that internet surfers sign up

 Emerging Trends In Marketing
Experiential Marketing :-This involves enabling customers to
actually experience for themselves what is on offer, before
making the purchase decision. Some examples:

 Test driving care before making the purchase.

 Living in a holiday resort before signing up for a timeshare
holiday scheme.
 Computer software companies offering trial versions
 Emerging Trends In Marketing
Offering Complete Solutions: The time-strapped customers
are willingly to pay a premium if the marketer is willing
to offer a complete solutions.

Eg:-Asian Paints take on the task of getting the home

painted instead of just selling paints.

Travel Agents do not just book tickets but are taking

care of the other aspects of travel like hotel bookings,
sight seeing, local travel arrangements,etc.
 Emerging Trends In Marketing
Rewarding Loyal Customers: Companies are realizing the need
of retaining loyal customers and working on schemes to
enable them to retain them.
 As competition keeps beating down prices and entice
customers, it makes sense to offer rewards to loyal customers
in an effort to prevent them from switching loyalties.
 Frequently flyer benefits for airline passengers.
 Shopping malls offering loyalty cards
 Credit cards offering redeemable points on the purchases
made
 Emerging Trends In Marketing
Disruptive Innovation
“ Remarkable iPod-Apple “
This kind of disruptive product innovation catapulted Apple to
the Position of the market leader in a category in which it had
no presence previously.
 The Changing nature of Customer
Service
4 Pillars or 4 I’s of Services:
Intangility
Inconsistency
Inseparability
Inventory.

Contributing 56% of India’s GDP as Per 2009-2010.

 The Changing nature of Customer
Service
The changing nature of customer service has created a new set of
issues that necessitate the consideration of marketing
practitioners. These include:-

 Challenges in Modern Day Customer Service.

 Emerging Trends in Services Marketing Mix.
 Customer Experience-The New Differentiator
 Challenges in Modern Day Customer
Service.
 The time strapped customers want service to be delivered on 24/7
basis,365 days in a year.
 The demand that service be delivered to their doorsteps instead of
them having to come to the service delivery points.
 Customers are quick to switch loyalties when they get a better deal
from a competing service provider.

Eg:-1) Banks are offering 8 AM-8 PM banking apart from 24 hrs access
through ATM’s, Internet banking, Phone banking,etc.
2) Customers of Mobile phone service are quick to change service
providers when they get a better offer from another service provider.
Emerging Trends in Services Marketing
Mix.
The 7 P’s that form the services marketing mix are also getting
transformed.
 Products are being customized to suit individuals unique needs and
resources to create a customized solution.
 Service Organizations are offering differential pricing to suit the
needs of Particular segments.
 Distribution of Services is being done through channels that enjoy
mass reach.

1) Mobile telephony services are offering subscribers various pricing

schemes that suit the usage requirements of different segments of
users.
2) Barista is Offering a premium prices by offering customers
experience and excellent presence
 Customer Experience-The New
Differentiator
 Schmitt has mentioned that marketers are not talking of
features only but enabling consumers to enhance the
consumption situation.
 Sense:-Music, color, sound
 Feel:-Affecting the customer’s feeling and emotion during the
marketing process.
 Think: Appealing to the customer’s intellect and provoking
thought
 Act: Actions and Methods to include lifestyle and behavior.
 Relate: Links an individual’s personal and private feelings to
the rest of the environment.