• please use the notes to answer from the question. no outside answer please
• 04

* Explain fully the CRM levels and the integration of CRM?

*Explain fully how a CRM supported customer-responsive strategy results in a competitive advantage?

• Strategic Customer Management: Systems, Ethics, and Social Responsibility 04

• LearningObjectivee
• Pivotal role of customer relationship management
• Developing a CRM strategy
• Value creation process
• CRM and strategic marketing
• Ethics and social responsibility in strategic marketing
• Pivotal Role of Customer Relationship Management
• CRM in perspective
• CRM and database marketing
• Customer lifetime value
• CRM in Perspective

• Seen as little more than building relationships with customers
  • To match a company's product offer better with customer needs

• Seen as developing a unified and cohesive view of the customer
  • Without regard to how the customer chooses to communicate with the organization
• CRM in Perspective
• Seen as consisting of three main elements:
  • Identifying, satisfying, retaining, and maximizing the value of a firm's best customers
  • Wrapping the firm around the customer to ensure that each contact with the customer is appropriate
  • Creating a full picture of the customer
• CRM and Database Marketing
• Database build through CRM technology should contain information about:
  • Transactions
  • Customer contacts
  • Descriptive information
  • Response to marketing stimuli
• Customer Lifetime Value
• Calculates past profit produced by the customer for the firm which is:
  • The sum of all the margins of all the products purchased over time, less the cost of reaching that customer
• Add a forecast of margins on future purchases discounted back to their present value
• Developing a CRM Strategy
• CRM levels
• CRM strategy development
• CRM implementation
• CRM Levels
• Levels from which CRM can be viewed:
  • Company-wide
    • Provides a strategic focus for CRM
  • Customer-facing
    • Offers single view of the customer across all of the organization's access channels to the customer
  • Functional
    • Considers the processes that are needed to fulfill required marketing functions
• CRM Strategy Development
• Major steps in developing a CRM strategy:
  • Organizational commitment to CRM
  • The project team
  • Business needs analysis
  • The CRM strategy
• Exhibit 4.1 - The Steps in Developing a CRM Strategy
• Exhibit 4.2 - Develop and Define the CRM Strategy to Guide the Management Process
• Successful Implementation
• Front office that integrates sales, marketing, and service functions across all media
• A data warehouse that:
  • Stores customer information and the appropriate analytical tools with which to:
    • Analyze that data and learn about customer behavior
• Successful Implementation
• Business rules developed from the data analysis
• Measures of performance that enable customer relationships to continually improve
• Integration into the firm's operational support systems, ensuring the front office's promises are delivered
• Causes of Failure
• Implementing CRM before creating a customer strategy
• Putting CRM in place before changing the organization to match
• Assuming that more CRM technology is necessarily better
• Investing in building relationships with disinterested customers
• Value Creation Process
• Customer value
• Value received by the organization
• CRM and value chain strategy
• Value Creation Process
• Defined as:
  • The value the customer receives
  • The value the organization receives
• Customer Value
• Value proposition - Expresses the benefits received by the customer
  • Explains the relationship among:
    • The performance of the product
    • The fulfillment of the customer's needs
    • The total cost to the customer over the customer relationship life cycle
• Value Received by the Organization
• Customer lifetime value (CLV) - A key concept associated with the value received by the organization
  • Expected profitability of a customer over the time-span of the relationship with the customer
• CRM and Value Chain Strategy
• Important that CRM be integrated with the different channels that access end-user customers
• Many companies interact with customers using multiple channels including:
  • Salespeople
  • Value chain partners
  • Email and Internet
  • Telephoning
  • Direct marketing
• CRM and Strategic Marketing
• Implementation
• Performance metrics
• Short-term versus long-term value
• Competitive differentiation
• CRM and Strategic Marketing
• Implementation - Critical to view this as more than technology focused on efficiency
• Performance metrics
  • Sales, profitability, and market share
  • Customer acquisition cost
  • Conversion rates (from lookers to buyers)
  • Retention/Churn rates
  • Same customer sales rates
  • Loyalty measures
  • Customer "share of wallet"
• CRM and Strategic Marketing
• Short-term versus long-term value
  • Long-term issues should be considered when:
    • Decisions are made about a company's customer priorities using historical customer profitability
  • Customer lifetime value - An attractive measure to use to examine long-term customer attractiveness
• CRM and Strategic Marketing
• Competitive differentiation
  • Lack of competitive advantage - Requires more than just investment in CRM technology
    • Particularly if it is poorly implemented
  • Information-based competitive advantage - The creation of a major new source of knowledge about customers
• Ethics and Social Responsibility in Strategic Marketing
• Corporate reputation
• Customer value and competitive positioning
• Ethics and Social Responsibility in Strategic Marketing
• Increasingly significant to the creation of effective customer relationships
  • In part because of the impact on corporate reputation
• Corporate Reputation
• Damage to corporate reputation of a business can:
  • Substantially reduce its ability to compete
  • Undermine the value of a company
• Strength or weakness of an organization's corporate reputation impacts:
  • Customer perceptions of how attractive it is to do business with that company
• Corporate Reputation
• Ethical imperatives
• Defining ethical standards
  • Business ethics
  • Marketing ethics
• Drivers of ethical demands
  • Green and ethical consumer
  • Ethical consumerism
• Corporate Reputation
• Proactive responses by firms - Trends that are indicative of the relevance of ethics and CSR in firms
  • Establishment of ethics executives
  • Codes of ethics and internal procedures to provide a framework for ethics actions
• Corporate Reputation
• Organizational involvement - Includes:
  • Favorable organization culture
  • Assignment of responsibility
  • Ethics codes
  • Operating processes/guidelines
  • Action
  • Monitoring and control
• Corporate social responsibility initiatives
  • Spans economic, legal, ethical, and philanthropic concerns by an organization and its stakeholders
• Corporate Reputation
• Defining CSR - Understood to encompass company activities that
  • Integrate social and environmental concerns into business operations
    • Into the company's interaction with other stakeholders, on a voluntary basis
• Drivers of CSR:
  • Defensive CSR
  • Strategic CSR
• Creating shared value
• Customer Value and Competitive Positioning
• Escalating transparency - Underlines the importance of CSR to a company's competitive position with customers

05 *Specify the elements of the problem definition framework? *Discuss the six considerations entirely in deciding whether to conduct research?

• 05. Capabilities for Learning About Customers and Markets

• Learning Objectives
• Market-driven strategy, market sensing and learning processes
• Marketing information and knowledge resources
• Marketing intelligence and knowledge management
• Ethical issues in collecting and using information
• Market-Driven Strategy, Market Sensing, and Learning Processes
• Market-sensing processes
• Learning organizations
• Market-Driven Strategy, Market Sensing, and Learning Processes
• Market-driven firms are characterized by their ability to sense and respond to events and trends in their markets
• Market sensing - A key capability of the market-driven organization
• Market-Sensing Processes
• Building open-minded inquiry processes
• Analyzing competitors' actions
• Listening to front - line employees
• Searching for latent customer needs
• Scanning the periphery of the market
• Encouraging experimentation
• Learning Organizations
• Organizations share several important characteristics
  • Relevant to superior market sensing capabilities
• Continuing research promises to further expand our knowledge about complex and relevant organizational processes
• Learning and Competitive Advantage
• Advantage gained from learning is that the organization is able to:
  • Quickly and effectively respond to opportunities and threats
  • Satisfy customers' needs with new products and improved services
• Learning capabilities and skills are central to business agility
• Learning About Markets
• Include a sequence of activities:
  • Objective inquiry
  • Information distribution for synergy
  • Mutually informed interpretations
  • Accessible memory
• Barriers to Market Learning Processes
• In some situations learning processes may be ineffective
  • Managers reject new insights/information
  • Rigid organizational structures and inflexible information systems
  • Politics favor the status quo
  • Overwhelming pressure of existing business operations
  • Tendency to "active inertia"
• Marketing Information and Knowledge Resources
• Scanning processes
• Specific marketing research studies
• Internal and external marketing information resources
• Existing marketing information sources
• Creating new marketing information
• Marketing and management information systems
• Scanning Processes
• Must balance the need to provide executives with relevant intelligence
  • At the same time not attempt to:
    • Report everything that happens in a market
    • Overload executives with information
• May require watching for new opportunities outside the existing core markets
• Scanning Processes
• Organizing scanning involves a number of initiatives:
  • Making existing functional groups responsible for scanning
  • Create ad hoc issue groups
  • A high-level lookout
  • New initiatives
  • Investing in start-ups
  • Outsource
• Exhibit 5.1 - A Grid for Market Sensing
• Specific Marketing Research Studies
• Strategies for obtaining marketing research information include:
  • Collecting existing information
  • Using standardized research services
  • Conducting special research studies
• Exhibit 5.2 - Problem Definition to Guide Marketing Research Studies
• Internal and External Marketing Information Resources
• Marketing information resources exist:
  • Internal to the company
  • Being collected from external source
• Internal Information Resources
• Internal information system of the firm affects the extent and ease of the collecting existing information
• Nature and scope varies greatly from firm to firm
• External Information Resources
• External marketing information resources include:
  • Open source resources
  • Information services
  • Specific studies undertaken by marketing research agencies
  • Consultants
• Relationships with External Marketing Research Providers
• Considerations when deciding whether to undertake a special marketing research study and when interpreting the results:
  • Defining the problem
  • Understanding the limitations of the research
  • Quality of the research
  • Costs
  • Evaluating and selecting suppliers
  • Research methods
• Existing Marketing Information Sources
• In-company resources
• Open source resources
• Internet resources
• Research agency resources
• Creating New Marketing Information
• The requirement may be to collect new information when
  • Executives' research needs are not addressed
• Approaches:
  • Observation and ethnographic studies
  • Research surveys
  • Internet-based research
• Marketing and Management Information Systems
• Technology capabilities have led many companies to invest in formalized information systems
• Important issues include:
  • Establishment of:
    • Specialized marketing information systems
    • More general management information systems
  • Potentials for marketing decision support systems and expert systems
• Marketing Intelligence and Knowledge Management
• Marketing intelligence
• Knowledge management
• Role of the chief knowledge officer
• Leveraging customer knowledge
• Marketing Intelligence
• Intelligence can come from:
  • Published materials in trade and scientific journals
  • Salesperson visit reports
  • Programs of customer visits by executives
  • Social contacts
  • Feedback from trade exhibitions and personal contacts
  • Rumor in the marketplace
• Formal marketing intelligence gathering activities an important element of the scanning processes
• Knowledge Management
• Knowledge about customers should be managed as a strategic asset
  • Because competitive advantage can be created by:
    • Possessing current market information
    • Knowing how to use it
• In the market-driven company
  • Market knowledge is inextricably linked to:
    • Organizational learning
    • Market orientation
• Role of the Chief Knowledge Officer
• Improves an organization's knowledge management and learning processes
  • Knowledge management - Concerned with knowledge (information) collection and linking information within the organization
• Is a link between knowledge management and continuous learning about markets
• Leveraging Customer Knowledge
• Methods employed by companies to improve the availability and use of customer knowledge
  • Creating "customer knowledge development dialogues"
  • Operating enterprise-wide "customer knowledge communities"
  • Capturing customer knowledge at the point of customer contact
  • Management commitment to customer knowledge
• Ethical Issues in Collecting and Using Information
• Invasion of customer privacy
• Information and ethics
• Invasion of Customer Privacy
• Dramatic increase in use of databases has generated concerns
  • This will continue as sophistication of communications technology and software continues to develop
• Information and Ethics
• The price an organization has to pay for the cost of preparing the proposal
• Other issues relate to:
  • Ways in which information is collected
  • From whom it is collected
• Information and Ethics
• Information shared with suppliers, contractors, partners, and merger prospects is confidential
• Attention to the appropriateness of behavior in information generation, collection, and application is a growing concern