netrashetty
Netra Shetty
Baldor Electric Company markets, designs, and manufactures industrial electric motors, drives, and generators. It has recently been announced that ABB will be acquiring Baldor in an all cash deal of 4.2 billion USD (1.1 Billion $ Debt included)
and maintenance of mutually beneficial long-term relationships with strategically significant customers (Buttle 2000). CRM according to Plakoyiannaki and Tzokas (2001) is an IT enhanced value process, which identifies, develops, integrates and focuses the various competencies of the firm to the ‘voice’ of the customer in order to deliver long-tern superior customer value, at a profit to well identified existing and potential customers. According to Peppers and Rogers (1999), CRM is the process of integrating the idea of customer focus in marketing, service, sales, production, logistics, and economy, in other words, the entire company’s organizational activities. Customer relationship management focuses on strengthening the bond between customers and the firm by maximizing the value of the relationship for the benefit of both the customer and the firm. As a business philosophy, CRM is based upon individual customers and customized products and services supported by open lines of communication and feedback form the participating firms that mutually benefits both by buying and selling organizations. The buying and the selling firms enter into a ‘learning relationship’, with the customer being willing to collaborate with the seller and grow as a loyal customer. In return, the seller works to maximize the value of the relationship for the customer’s benefit. With the objective of most businesses today being to create and maintain loyal customers at a profit, CRM provides the platform for seeking competitive advantage by embracing customer needs and building value-driven long-term relationship (Ford et al 2003).
CRM and Marketing Mix
Customer Relationship Management calls for a long-term beneficial relationship between the customer and the organization. Because of CRM, the marketing mix shifted from Place, Product, Price and promotion to a more ‘customer-focused’ approach. The marketing mix now is more concerned with the customers’ wants and concerns than do the Ps. Place, rather than implying organizations’ methods of placing products where they want them to be, can be thought of as ‘Convenience for the customer’, recognizing the customers’ choices for buying in ways convenient to them. Product, rather than being something that a company makes, which then has to be sold, can be thought of as a ‘Customer benefit’ – meaning satisfactions wanted by customers. Price may be what companies decide to charge for their products, but ‘Cost to the customer’ represents the real cost that customers will pay. Promotion suggests ways in which companies persuade people to buy, whereas ‘Communication’ is a two-way process also involving feedback from customers to suppliers (Dennis and Harris 2002). The last several years saw the rise of Customer Relationship Management as an important business approach. Its objective is to return the world of personal marketing. The concept is relatively simple. Rather than market to a mass of people, market to each customer individually. In this one-to-one approach, information about a customer is used to frame offers that are more likely to be accepted (Gray and Byun 2001).
Beneficial Customer Relationships
Implementation of better technology is not what CRM really is all about; it is about creating the process that promotes longer more beneficial customer relationship. Creating beneficial customer relationships entails a better knowledge of customers. Analysis of a given customer’s profile and every interaction with that customer will provide predictive information on his or her behavior and how he or she prefers to be treated. Only after this has been completed, will a company be prepared to personalize that customer’s experience through all customer touch points. Personalization is not only a critical cornerstone of CRM but also one of the most challenging to accomplish. A company must be able to effectively learn from each customer interaction, record the results of that learning to gain a better understanding of each customer’s preferences, and determine how the company can best serve that customer over his lifetime. This understanding will allow the company to communicate the right information to the customer at the right time using the right channel, and will ensure that all of those interactions are complete and consistent. The overall market place is raising customer expectations at the same time that brand loyalty is decreasing. With the competition as close as a mouse-click away in some cases, customers have come to expect that an organization will completely understand their
Managing Key Customers
Traditional marketing strategies focused on the 4Ps (place, product, price and promotion) to increase market share. The main concern was to increase the volume of transactions between seller and buyer (Wyner 1999 cited in Gray and Byun 2001). CRM is a business tactic the goes further than maximizing transaction volume. The purposes of CRM are to boost profitability, revenue, and customer satisfaction. A company wide set of tools, technologies, and procedures support the association with the customers to raise sales. CRM is primarily a strategic business and process issue rather than a technical issue.
CRM consists of three components:
Customer – The customer is the only source of the company’s present profit and future growth. However, a good customer, who supplies more profit with less resource, is always limited since customers are well informed and the competition is fierce. Information technologies can provide the abilities to distinguish and manage customers. CRM can be thought as a marketing approach that is based on customer information (Wyner 1999 cited in Gray and Byun 2001).
Relationship – The relationship between a company and its customers involves continuous bi-directional communication and interaction. The relationship can be short-term or long-term, continuous or discrete, and repeating or one-time. Relationship can be attitudinal or behavioral. Even though customers have a positive attitude towards the company and its products, their buying behavior is highly situational (Wyner 1999 cited in Gray and Byun 2001).
Management – CRM is not an activity only within a marketing department. Rather it involves continuous corporate change in culture and process. The customer information collected is transformed into corporate knowledge that leads to activities that take advantage of the information and the market opportunities. CRM required a comprehensive change in the organization and its people
Some aren’t so painless. Just ask the respondents who were asked to give up mayonnaise for a week.
This cruel request was imposed on four groups of 45 mayo users in an attempt to uncover the substance’s allure and thus help reposition the Duke’s mayonnaise brand of Richmond, Va.-based C.F. Sauer Company. The research project was developed and managed by Richmond-based Edelmann Scott Inc., C.F. Sauer’s agency of record, and used to drive an award-winning television advertising campaign.
The Duke’s story
Duke’s is the leading brand of mayonnaise sold in the Southeast. On the market for 75 years, the product is more than a mere condiment; generations have made it a family tradition. But prior to the research, Duke’s hadn’t enjoyed any promotion since 1950 and the times were changing rapidly.
Sales information showed — true to typical geographic market churn — that the market’s landscape was beginning to shift. The challenge was to protect and increase share while building awareness among two separate audiences — the Southern “natives” who knew and loved the brand, and the Midwest and Northern “migrants” who brought their other brand loyalties with them.
Wants and needs
Understanding the consumer’s motivation to buy is critical to a brand’s success. One of the biggest mistakes companies often make is to go where many have been before without thinking about the consumer’s wants and needs. To deliver truly effective marketing communications, companies must always begin and end their efforts by listening to the customer.
To help companies listen to the consumer, Edelmann Scott created an approach called MarketVision, which takes out the “I thinks” and replaces them with “the market says” — the kind of information that drives all communications planning, including branding and positioning. Because at the end of the day, does it really matter what a CEO or an advertising agency thinks will drive a consumer response? Not really.
What really matters is designing communications efforts targeted to what the consumer wants and thinks. What will prompt the decision to buy? Or the decision to prefer one brand over another? What does the consumer need to make his or her life better, to solve a problem or to enhance a lifestyle?
This approach takes the techniques of the typical research toolbox and adds the strategic thinking of a marketer to drive each step along the way. It begins with a focused visioning session followed by product benefit and positioning identification that is then tested and validated by the marketplace. The process can take anywhere from two to six months to complete. Out of it comes the “something” that a company’s communications efforts must do in order to drive sales or awareness rather than a listing of attributes, which leads to advertising that only reaches parity instead of breaking away from the pack.
Goals defined
A four-hour visioning session kicked off the Duke’s process. Goals were defined, deliverables were identified and ways to achieve goals were discussed and agreed upon. In order to create a meaningful session, one that encouraged honest voices from all product channels, we had to involve key stakeholders from the CEO to the field sales managers. Without these voices present in one room, at one time, the session would be off track.
The visioning session resulted in 15 core statements about the product which were explored by respondents in the focus groups. The statements focused on attributes like creaminess, tartness and price. From the original 15, five were identified as the winners to be taken to the validation stage.
Surprisingly strong emotional elements were revealed during the process. In addition to abstaining from mayo consumption for a week, focus group participants were asked to keep food diaries about their feelings. Many were reduced to cheating. And nearly every person confessed that it was harder than they thought to give up mayonnaise. Their reasons may have differed, but the difficulty was certainly there.
and maintenance of mutually beneficial long-term relationships with strategically significant customers (Buttle 2000). CRM according to Plakoyiannaki and Tzokas (2001) is an IT enhanced value process, which identifies, develops, integrates and focuses the various competencies of the firm to the ‘voice’ of the customer in order to deliver long-tern superior customer value, at a profit to well identified existing and potential customers. According to Peppers and Rogers (1999), CRM is the process of integrating the idea of customer focus in marketing, service, sales, production, logistics, and economy, in other words, the entire company’s organizational activities. Customer relationship management focuses on strengthening the bond between customers and the firm by maximizing the value of the relationship for the benefit of both the customer and the firm. As a business philosophy, CRM is based upon individual customers and customized products and services supported by open lines of communication and feedback form the participating firms that mutually benefits both by buying and selling organizations. The buying and the selling firms enter into a ‘learning relationship’, with the customer being willing to collaborate with the seller and grow as a loyal customer. In return, the seller works to maximize the value of the relationship for the customer’s benefit. With the objective of most businesses today being to create and maintain loyal customers at a profit, CRM provides the platform for seeking competitive advantage by embracing customer needs and building value-driven long-term relationship (Ford et al 2003).
CRM and Marketing Mix
Customer Relationship Management calls for a long-term beneficial relationship between the customer and the organization. Because of CRM, the marketing mix shifted from Place, Product, Price and promotion to a more ‘customer-focused’ approach. The marketing mix now is more concerned with the customers’ wants and concerns than do the Ps. Place, rather than implying organizations’ methods of placing products where they want them to be, can be thought of as ‘Convenience for the customer’, recognizing the customers’ choices for buying in ways convenient to them. Product, rather than being something that a company makes, which then has to be sold, can be thought of as a ‘Customer benefit’ – meaning satisfactions wanted by customers. Price may be what companies decide to charge for their products, but ‘Cost to the customer’ represents the real cost that customers will pay. Promotion suggests ways in which companies persuade people to buy, whereas ‘Communication’ is a two-way process also involving feedback from customers to suppliers (Dennis and Harris 2002). The last several years saw the rise of Customer Relationship Management as an important business approach. Its objective is to return the world of personal marketing. The concept is relatively simple. Rather than market to a mass of people, market to each customer individually. In this one-to-one approach, information about a customer is used to frame offers that are more likely to be accepted (Gray and Byun 2001).
Beneficial Customer Relationships
Implementation of better technology is not what CRM really is all about; it is about creating the process that promotes longer more beneficial customer relationship. Creating beneficial customer relationships entails a better knowledge of customers. Analysis of a given customer’s profile and every interaction with that customer will provide predictive information on his or her behavior and how he or she prefers to be treated. Only after this has been completed, will a company be prepared to personalize that customer’s experience through all customer touch points. Personalization is not only a critical cornerstone of CRM but also one of the most challenging to accomplish. A company must be able to effectively learn from each customer interaction, record the results of that learning to gain a better understanding of each customer’s preferences, and determine how the company can best serve that customer over his lifetime. This understanding will allow the company to communicate the right information to the customer at the right time using the right channel, and will ensure that all of those interactions are complete and consistent. The overall market place is raising customer expectations at the same time that brand loyalty is decreasing. With the competition as close as a mouse-click away in some cases, customers have come to expect that an organization will completely understand their
Managing Key Customers
Traditional marketing strategies focused on the 4Ps (place, product, price and promotion) to increase market share. The main concern was to increase the volume of transactions between seller and buyer (Wyner 1999 cited in Gray and Byun 2001). CRM is a business tactic the goes further than maximizing transaction volume. The purposes of CRM are to boost profitability, revenue, and customer satisfaction. A company wide set of tools, technologies, and procedures support the association with the customers to raise sales. CRM is primarily a strategic business and process issue rather than a technical issue.
CRM consists of three components:
Customer – The customer is the only source of the company’s present profit and future growth. However, a good customer, who supplies more profit with less resource, is always limited since customers are well informed and the competition is fierce. Information technologies can provide the abilities to distinguish and manage customers. CRM can be thought as a marketing approach that is based on customer information (Wyner 1999 cited in Gray and Byun 2001).
Relationship – The relationship between a company and its customers involves continuous bi-directional communication and interaction. The relationship can be short-term or long-term, continuous or discrete, and repeating or one-time. Relationship can be attitudinal or behavioral. Even though customers have a positive attitude towards the company and its products, their buying behavior is highly situational (Wyner 1999 cited in Gray and Byun 2001).
Management – CRM is not an activity only within a marketing department. Rather it involves continuous corporate change in culture and process. The customer information collected is transformed into corporate knowledge that leads to activities that take advantage of the information and the market opportunities. CRM required a comprehensive change in the organization and its people
Some aren’t so painless. Just ask the respondents who were asked to give up mayonnaise for a week.
This cruel request was imposed on four groups of 45 mayo users in an attempt to uncover the substance’s allure and thus help reposition the Duke’s mayonnaise brand of Richmond, Va.-based C.F. Sauer Company. The research project was developed and managed by Richmond-based Edelmann Scott Inc., C.F. Sauer’s agency of record, and used to drive an award-winning television advertising campaign.
The Duke’s story
Duke’s is the leading brand of mayonnaise sold in the Southeast. On the market for 75 years, the product is more than a mere condiment; generations have made it a family tradition. But prior to the research, Duke’s hadn’t enjoyed any promotion since 1950 and the times were changing rapidly.
Sales information showed — true to typical geographic market churn — that the market’s landscape was beginning to shift. The challenge was to protect and increase share while building awareness among two separate audiences — the Southern “natives” who knew and loved the brand, and the Midwest and Northern “migrants” who brought their other brand loyalties with them.
Wants and needs
Understanding the consumer’s motivation to buy is critical to a brand’s success. One of the biggest mistakes companies often make is to go where many have been before without thinking about the consumer’s wants and needs. To deliver truly effective marketing communications, companies must always begin and end their efforts by listening to the customer.
To help companies listen to the consumer, Edelmann Scott created an approach called MarketVision, which takes out the “I thinks” and replaces them with “the market says” — the kind of information that drives all communications planning, including branding and positioning. Because at the end of the day, does it really matter what a CEO or an advertising agency thinks will drive a consumer response? Not really.
What really matters is designing communications efforts targeted to what the consumer wants and thinks. What will prompt the decision to buy? Or the decision to prefer one brand over another? What does the consumer need to make his or her life better, to solve a problem or to enhance a lifestyle?
This approach takes the techniques of the typical research toolbox and adds the strategic thinking of a marketer to drive each step along the way. It begins with a focused visioning session followed by product benefit and positioning identification that is then tested and validated by the marketplace. The process can take anywhere from two to six months to complete. Out of it comes the “something” that a company’s communications efforts must do in order to drive sales or awareness rather than a listing of attributes, which leads to advertising that only reaches parity instead of breaking away from the pack.
Goals defined
A four-hour visioning session kicked off the Duke’s process. Goals were defined, deliverables were identified and ways to achieve goals were discussed and agreed upon. In order to create a meaningful session, one that encouraged honest voices from all product channels, we had to involve key stakeholders from the CEO to the field sales managers. Without these voices present in one room, at one time, the session would be off track.
The visioning session resulted in 15 core statements about the product which were explored by respondents in the focus groups. The statements focused on attributes like creaminess, tartness and price. From the original 15, five were identified as the winners to be taken to the validation stage.
Surprisingly strong emotional elements were revealed during the process. In addition to abstaining from mayo consumption for a week, focus group participants were asked to keep food diaries about their feelings. Many were reduced to cheating. And nearly every person confessed that it was harder than they thought to give up mayonnaise. Their reasons may have differed, but the difficulty was certainly there.