Relationship Marketing- a paradigm of 21st century
Though the industry experts talk about Relationship Marketing being a new age the most significant being the concept of TQM or Total Quality Management. Customer Relationship Management CRM has become the main strategy for companies management is a significant issue for discussion in the academic and. Peppers, Roger and Dart (one to one relationship marketing, a corporate strategy for CRM, SAS Institute, ) suggest four steps for one to.
Have a comprehensive customer relationship management strategy. Conduct regular training sessions for all members of staff. Stay on the cutting edge of product offerings.
Do not sacrifice quality for innovativeness. Maintain a high customer satisfaction rate in all areas of the company. Make an effort to inform customers how much they are appreciated. Relationship marketing mainly involves the improvement of internal operations. Many customers leave a company not because they didn't like the product, but because they were frustrated with the customer service. If a business streamlines its internal operations to satisfy all service needs of their customers, customers will be happier even in the face of product problems.
Technology also plays an important role in relationship marketing. The Internet has made it easier for companies to track, store, analyze and then utilize vast amounts of information about customers.
Evolution of Relationship Marketing
Customers are offered personalized ads, special deals, and expedited service as a token of appreciation for their loyalty. Social media sites allow business to engage their customers in an informal and ongoing way.
In the past, it would have been impossible to keep useful records about every single client, but technology makes it easy for companies to automate their marketing efforts. See also Analytical Marketing Branding is the final component of relationship marketing.
A company can form a long-term relationship with a client if that client feels like the brand they purchase reflects who they are or who they want to be. Customers are less inclined to switch to a different brand if they think that switch makes a statement about their identity.
Who Employs Relationship Marketing? Many types of companies have something to gain from developing long-term relationships with their customers. Smaller businesses often serve a steady stream of regulars, and make little effort to draw in new customers.What is CRM?
Imagine a small restaurant that sees a steady stream of business from the morning commute. Their daily presence is a large part of the business that restaurant does every day. Larger companies typically invest the most in carrying out sophisticated relationship marketing campaigns. In some major companies, relationship marketing is a strategy that affects every department with a client facing purpose sales, customer service, shipping etc.
Industry leaders constantly face competition from new companies who claim to provide similar goods with a higher-quality level of service. Holding onto their existing customers is the only way they can maintain their position at the top of their industry.
This is true for businesses in all industries, from cell phones to baby food. When the company changed the font in their ubiquitous catalog, Ikea lovers took to the Internet to air their complaints. Rather than alienate their customers for a trivial reason, Ikea changed the font back in the next catalog. Direct Recruitment — The direct mail marketing firm sends out handwritten birthday cards to clients and associates every year.
This simple, personal touch helps clients feel like Direct Recruitment cares about them as people rather than simply consumers. American Airlines — The airline maintains a comprehensive frequent flyer program that rewards customer loyalty with the promise of free flights, upgrades, and discounts.
Dell — Dell computers created a special online store for high volume corporate customers. By tailoring the ordering process to the specific customer's needs, Dell was able to expedite many of the hassles corporate technology buyers face. Providing a higher level of service leads to increased loyalty. Vyvanse — The makers of the popular ADHD drug created an extensive online portal that included videos, forums, expert articles, and mobile apps to help those who suffer from ADHD.
Rather than relying on the strength of the product alone, the drug makers created a place for users to gather and interact that was linked back to the company. Sites like Facebook and Twitter make it fast and easy for companies to communicate information to their customers.
What kind of relationship marketing strategy is required to replicate the business model in an international market? What would be the best marketing relations strategy between two different cultures? Coca-Cola found India to be a good market for its products because of the large population and the low-cost labor to operate its bottling plants.
International markets are usually different from the local market, which necessitates different marketing strategy and stronger relationship building effort.
Market needs the long-term relationship between the buyer and seller to maintain growth Bejou, The customers are loyal to sellers with high product quality if they equate the product price with its value. The relationship marketing theory revolves around three aspects. According to Zikmund, Mcleod, and Gilbertthe first aspect is financial incentives, in which the customer receives rewards or discounts in exchange for their repeated business.
The second aspect is social bonding between the company and the customer. The third aspect is structural interaction. Coca-Cola built bottling plants in India to strengthen its relationship with the Indian customers in exchange to their loyalty.
However, Coca-Cola had malpractices that seriously affected its relation with the Indian consumers. Indian states banned the sale of Coca-Cola in governmental institutions and Pollutions Control Board of Kerala closed a bottling plant after a lengthy protest by the villagers. Coca-Cola acknowledges their safety standard violation by failing to take toxicity test on one of their dumping sites.
Relationship Marketing – Coca-Cola in India | Sami Malallah's Blog
Significance of the Study Coca-Cola Company had difficult challenges in India and was not treated similarly to the local businesses. Coca-Cola faults and wrongdoings are documented and approved, which obliged the company to react according to international norms and business ethics. The results of the study were exaggerated to show higher profits from soft drink test.
Coca-Cola Company had situations in India that clearly contradict with its mission and values. These situations require the right leadership to acknowledge them, responsibly act to correct the wrongdoings and set up measures to prevent its reoccurrence. The study will produce a set of recommendations to achieve the above requirement and recommend that Coca-Cola either pay to remedy the damages or recuperate the harm done in India.
Regular customer would not tolerate wrongdoing and will not forgive the sellers for mistakes although they committed with the good intention.
Customers may retaliate by boycotting the seller or organize an offensive campaign to state their objection Baxter, One of the best customer disobedience examples started in the s like dolphin killing by tuna fisherman, unethical treatment of animals and the anti-fur campaigns Baxter, Most of these campaigns are still holding strong and have large and effective base of supporters.
Ingram, Skinner and Taylor recommend that sellers like Coca-Cola should have a contingency plan in case unintentional wrongdoing take place to recover from the impact of the situation. Literature Review Analysis Coca-Cola is a non-alcoholic drink that is marketed as a joyful and refreshing drink for all age groups.
Coca-Cola Company has more than non-alcoholic beverages that include Coke, with distribution and bottling operations in countries Holcomb, Coke is the most famous soft drink produced by Coca-Cola Company and is consumed around the world. Coca-Cola Company stated that their products are tested using European standards and did not break any laws in India. The relationship is maintained by stating the facts and giving the necessary information to the customer. Relationship marketing takes part of the risk to prevent any risk that the buyer may encounter from the selling and buying experience.
Marketers should not subscribe to the caveat emptor principal because it makes the relationship between the seller and the buyer deteriorate. Inks, Avila and Chapman found that buyers are more ethically sensitive to unethical behavior. Buyers have stronger negative reaction to lying when this lying was from the seller; however, the buyers were less sensitive to their deceit lying because they justify it with the resulting low price.
Managers should abandon old ideas when they become a threat to the organization but learn that failures are opportunities to learn. Peter Drucker stated that the organizations profit is necessary to supply capital for future innovation and expansion Drucker, Chiung-Ju and Wen-Hung listed different tactics the retailers use to enhance customer loyalty that branch from financial, social and structural bonding activities.
Financial bonding includes discounts and interest rate. The final tactic is structural in which the organization set up rules, policies and procedures to structure its relationship with the customers.
Customer loyalty is important because almost all of the companies had lost a top customer to a competitor in the last three years Carter, The most important finding of Carter survey was the strong link between customer retention and customer satisfaction. On the contrary, East, Hammond, and Gendall state that customer retention importance is overvalued and companies should target customer acquisition strategy.
Customer retention strategy gains are less than customer acquisition according to East, Hammond, and Gendall People take the gratitude role when they receive benefits and suffer the guilt of not repaying the favor to the other party so the at least remain loyal to the favor maker.
Roehm and Brady state that half of the researched customers switched brands because of a service failure or inappropriate response from the.
One of the main functions of CRM is to provide the organization with a single view of the customer, in which view the information may be split into different disciplines and categories Tuck, Tuck state that CRM should be managing customer relationship but lately CRM became associated with software packages and the difficulty of setting one up. Tuck claims that CRM projects shifted the organizational focus to deploying and operating the software package instead of targeting business processes that would deliver the segmented information in a useful way to the organization.
Crosby and Caroll III realized the difficulty in the customer management and suggested the following guidelines to help the organization better manage its customers: