B2B and CRM

Concept and Context of

Ranjan SS

The Evolution of CRM

The concept of marketing has changed over the years
In sense it is a revolution Due to ever changing taste of the customer the overall concept of marketing has changed in terms of,

Customer Identification Customer Retention Customer Satisfaction The marketing concept has been evolved from the various earlier orientations The emphasis has been further shifted to business realization. Production Orientation When a high demand for a product or service exists, coupled with a good certainty that consumer tastes do not rapidly alter

Product Orientation It is concerned with the product quality. As long as the product is of high standard, people would buy and consume. Selling Orientation It focuses primarily on the selling and promotion of a particular product, and not determining new consumer desires. Such an orientation may suit scenarios in which a firm holds dead stock, or sells a product that is in high demand, with little chance of change in consumer taste to reduce demand. Marketing Orientation It involves a firm essentially base its marketing plans around the marketing concept, and thus supplying products to suit new consumer tastes.

 The 1990s brought two new concepts that challenged the business landscape : Deregulation and the Internet. The explosion in information allowed consumers to compare features, and prices across multiple providers.

Companies started trying to manage relationships with their customers, partners, and suppliers in a personalized and automated manner.

What are CRM ?

Customer Relationship Management
It is the most effective corporate business mantra. CRM is a business strategy that aims to understand, anticipate and manage the needs of an organization's current and potential customers In sense, the business between buyer and seller is considered as a platform for building relationships. It is a comprehensive approach which provides seamless integration of every area of business that touches the customer - namely marketing, sales, customer services and field support through the integration of people, process and technology. CRM is a shift from traditional marketing as it focuses on the retention of customers in addition to the acquisition of new customers

Objectives of CRM
Lifetime Value Refers to the net present value of the potential revenue stream for any particular customer over number of years Starts with current purchase activity then extrapolates to include potential additions from cross-selling, upgrades, total ownership, etc. Customer Ownership Attempts to own the lion share of customer spending and/or share of mind in a particular product category Building brand equity, maintaining vigilant customer contact, keeping current with the market trends is critical 5% points increase in customer retention causes some 25% increase in profit ratio

 Customerization
Mass Customization Using flexible processes and organizational structures to produce varied and individualized products and services at the price of standard mass-produced offerings. Personalization Customization of some features of a product or services so that the customer enjoys more convenience, lower costs, or some other benefit. Segment-of-One Marketing Based on the idea of the firm learning individual reactions to marketing strategies, then treating this customer differently than other customers. Customerization = Mass customization + personalization + segment-of-one, dependent on a web-based electronic interaction

Why CRM ?
To built a long term relationship that enriches a company trust, which in turn ensures steady flow of business. The focus of CRM is on creating value for the customer and the company over the longer and lasting term. Retaining existing customer is as difficult as winning and gaining new ones. CRM enables organisations to gain competitive advantage over competitors that supply similar products or services. This depends on product quality and moreover the quality of relationship maintained by them. Constant changing of customer buying behaviour. When customers value the customer service that they receive from suppliers, they are less likely to look to alternative suppliers for their needs. To establish cross selling avenues.

Importance of CRM
It uses web based technologies to focus on the lifetime value of a customer. It reduces costs, because the right things are being done (i.e., effective and efficient operation) The challenge is to continue attracting new and profitable customers even as forming ever tighter bonds with existing ones and optimizing on these relationships over their lifetimes. To analyze customer needs and serve them effectively through systematic, real time information handling and timely response. It helps in increasing customer satisfaction, because they are getting exactly what they want. It provides maximisation of opportunities (e.g. increased services, referrals, etc.) It increases access to a source of market and competitor information. It is for operational long term profitability and sustainability of the organization.

What CRM can do ?

To establish an on-going dialogue with your customers by using the web to communicate with them directly. To gain a better understanding of your customers needs and build individual customer solutions. To produce more efficient marketing efforts by using readily accessible customer information. To link all departments, giving them access to the same information updated in real time. To speak to your customers in a consistent voice across your organization.

Advantages of good CRM

Faster response time to the client. Uniform talking and pattern. Unified information without misleading. Increased Efficiency. Recognize your customer. Deeper knowledge about your customer. Increase sales and marketing opportunities. Ability to manage marketing campaign with clear objectives. To boost in customer satisfaction and responsiveness.

A discussion : Is CRM a new concept?

No!
Simply an extension of relationship marketing Builds on customer service and satisfaction concepts Just the latest buzzword for creating customer orientation Bottom-line is still the same

Yes!
A shift in corporate philosophy concerning the approach to value delivery Customer centric approach to value chain New and technology enhanced processes Focus is not just on bottom-line, but on top-line Goal is to create satisfying experiences across all customer contact points

Market Research & CRM

It can give feedback in areas of. Customer satisfaction level with the organization in general more specifically with its technology, quality, service, performance, time and price. It guides in further enhancement in customer satisfaction. In creating data bank of the competitors and benchmark them as per customer feedback. In knowledge of the market share and its possible trend. Reasons for poor profitability and necessary corrective measures. In identification of reasons for typical customers preferences. In organizations SWOT investigation. Possible business solutions to various problems.

The challenges of personalized Enterprise E-Support

Relevant information about prospect or customer Information Updates Publishing of information Personalized Applications Communication Security Scalability Deployment

TEST
Answer THREE.

Total Marks 40

Q.1 is compulsory and carries 16 marks. Other carries 12 marks.

Q.1 What is B2B marketing ? Outline its features and characteristics. Q.2 Distinguish between industrial marketing and consumer marketing. Q.3 Describe industrial buying behaviour and illustrate any one model. Q.4 Describe the different tools applied for industrial product promotion and what it includes. Q.5 - Write notes on any TWO a. Role of after sales services in B2B Marketing. b. Types of industrial customers c. Customer segmentation in B2B Marketing. d. Branding in B2B Marketing