MGT3603
CUSTOMER RELATIONSHIP
MANAGEMENT
WEEK 1
INTRODUCTION
Last Updated:21 December 2022
© LMS SEGi education group
1
WELCOME…..
MGT3604
BE A SMART
MARKERTER…
OFF YOUR
HANDPHONE
OR
ON SILENT
MODE !!!!!
MODULE OBJECTIVES

To develop & enhance students’ understanding
on the dimensions of successful CRM strategy
and opportunities.
Last Updated:21 December 2022
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MODULE OVERVIEW
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Define CRM & Elements of CRM
Define Customer Services
CRM as Integral Business Strategy
Relationship-Oriented Organization
Customer Knowledge
Communication in CRM
MODULE OVERVIEW
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Individualized Customer Proposition
Relationship Data Management
Formulating CRM Strategy
Effect of Marketing Activities
Technology & CRM - Call Center &
Internet
Implementation of CRM System
ASSESSMENT
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Group Assignment
Presentation
Final Examination
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TOTAL
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25%
25%
50%
100%
REFERENCES
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Main Text
Peelen, E. (2013). Customer Relationship
Management, 2nd ed. Prentice Hall: Harlow
Additional References
Buttle, F. (2009). Customer Relationship Management,
2nd ed. Elsevier Publishing
Harris, E.K. (2007). Customer Service: A Practical
Approach. Prentice Hall: Harlow
MODULE GUIDELINE
•
WARNING!!
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Academic Dishonesty
As stated in the faculty Handbook, cheating, including plagiarism,
will not be tolerated. All written work, including paper summaries,
must be your own work. If you wish to quote a source, you must do
so explicitly, and with proper attribution. Any "double dipping" that
does not meet the requirements set out above will be treated as a
violation of the academic honesty policy for the class, and dealt
with accordingly.
•
•
The minimum penalty for a violation of the academic honesty
policy is a zero on the assignment. Other penalties may include a
letter grade reduction, failing the class, or, in extreme or repeated
cases, dismissal from the program/college
MGT 3603
CUSTOMER RELATIONSHIP
MANAGEMENT
WEEK 1
CRM CONCEPTS
Last Updated:21 December 2022
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LEARNING OBJECTIVE

To discuss on the evolution of marketing
To discuss on the relationship marketing
To provide the students for some understanding on CRM.

To understand the meaning of services.
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To introduce the 4 differences between services and goods:
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
intangibility, heterogeneity, simultaneous production &
consumption and perishability.
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To highlight the 3 additional elements of services marketing
mix: people, physical evidence and process.
LEARNING OUTCOMES

On completion of this topic, students will be able
to understand the evolution of marketing and the
important of relationship marketing

On completion of this topic, students must be
able to define CRM and justify the importance of
CRM as business strategy.
Last Updated:21 December 2022
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WHAT IS MARKETING
‘The aim of Marketing is
to know & understand
the customer so well the
product or service fits
him & sells itself’
Peter F. Drucker (1909-2005)
WHAT IS MARKETING
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Marketing specialists are responsible for the
following activities:
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•
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Identifying customer needs
Designing products that meet those needs
Communicating info about the goods & services to
prospective buyers
Pricing that reflect the costs, competition &
customers’ ability to buy
Providing the necessary service & follow up to ensure
customer satisfaction after purchase.
WHAT IS MARKETING
•
Marketing - An organizational
function and a set of
processes for:
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Creating, communicating,
& delivering value to
customers
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Managing customer relationships in ways that
benefit the organization and its stakeholders
EVOLUTION OF MARKETING
EVOLUTION OF MARKETING
PRODUCTION ERA (before 1925)
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Characterized by a production orientation
— a business philosophy stressing
efficiency in producing a quality product
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Attitude toward marketing is “a good
product will sell itself”
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Characteristic of a shortage economy and
intense consumer demand
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Business success often was defined solely
in term of production success
EVOLUTION OF MARKETING
“they (customers) can
have any color they want,
as long as it’s black.”
Henry Ford
EVOLUTION OF MARKETING
SALES ERA (early 1950s)
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•
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Characterized by a sales orientation — a business
philosophy assuming that consumers will resist
purchasing nonessential goods and services
Attitude toward marketing is that creative
advertising and personal selling are required to
overcome consumer resistance and convince them
to buy
Marketing departments began to emerge from the
shadows of production and engineering. Chief
marketing officer in many firms held the title of sales
manager during this era
EVOLUTION OF MARKETING
“ the thing that we see that
really tell us the most about
the consumer’s financial
solution is displaced
merchandise. Shoppers fill
their baskets, then what they
do is take that merchandise
out as they pick other things.
When the economy gets
tougher, we have to go
through that store more
frequently.
Lee Scott (Former CEO, Walmart)
EVOLUTION OF MARKETING
MARKETING ERA (after 1950s)
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Emergence of the marketing concept
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Attitude towards marketing changed from
production orientation to consumer
orientation as society changed from a
seller’s market (one in which there were
more buyers for fewer goods and services)
to a buyer’s market (one in which there
were more goods and services than people
willing to buy them)
EVOLUTION OF MARKETING
“Real innovation in
technology involves a
leap ahead,
anticipating needs that
no one really knew
they had & then
delivering capabilities
that redefine product
categories.”
Steve Jobs
EVOLUTION OF MARKETING
RELATIONSHIP ERA
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•
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Represents a major shift from the traditional
concept of marketing as a simple exchange
between buyer and seller
Relationship marketing involves developing longterm, value-added relationships over time with
customers and suppliers
Strategic alliances and partnerships with vendors
and retailers play a major role in relationship
marketing
Prevailing attitude is that long-term relationships
with customers and partners will benefit everyone
RELATIONSHIP MARKETING
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•
The lifetime value of a customer consists of the
revenues and intangible benefits that a
customer brings to an organization over an
average lifetime minus the investment the firm
has made to attract and keep the customer
Relationship marketing gives a company the
opportunity to move customers from new
customers to regular purchasers, then to loyal
supporters of the firm and its goods and
services, and finally to advocates who not only
buy its products but recommend them to others
RELATIONSHIP MARKETING
RELATIONSHIP MARKETING
Using interactive marketing to build relationship
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Effective relationship marketing often relies
heavily on information technologies such as
computer databases that record customers’
tastes, price preferences, and lifestyles
The stage is set for mobile marketing —
marketing messages transmitted via
wireless technology
RELATIONSHIP MARKETING
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Interactive marketing refers to buyer–seller
communications in which the customer controls the
amount and type of information received from a
marketer
Social marketing is the use of online social media
as a communications channel for marketing
messages
Interactive marketing allows marketers and
consumers to customize their communication
Buzz marketing uses customers to create a “buzz”
about a company’s products – word of mouth
messages that bridge the gap between company &
its products
“Services are going to move in this
decade to being the front
edge of the industry.”
Louis V. Gerstner,
former
CEO
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What Are Services?
Services are deeds, processes and
performances that are essentially not a
physical product, is generally consumed at
the time it is produced and provides added
value in forms that are intangible
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Characteristics of Services
Intangibility
Heterogeneity
SERVICES
Simultaneous
production &
consumption
Last Updated:21 December 2022
Perishability
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(1) Intangibility
What it means?
• Performances/actions
felt, tasted, touched.
• Ie: health care services
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can’t be seen,
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(1) Intangibility
Challenges
• Can’t be inventoried
• Can’t be easily patented
• Can’t be readily displayed or
communicated
• Pricing is difficult
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(2) Heterogeneity
What it means?
• No two services will be precisely alike.
• Service employees performance vary from
day to day/hour to hour.
• No two customers are alike (demand &
experience)
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(2) Heterogeneity
Challenges
• Inconsistent service quality
• Inconsistent with what was originally
planned and promoted
• Third party service provider
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(3) Simultaneous Production & Consumption
What it means?
• Goods: produced
sold & consumed
• Services: sold
produced & consumed
• Customer is present when service is being
produced.
• Customer can take part in the production
process.
• Interaction between customers
• Service providers play an important part in the
service experience (Week 7)
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(3) Simultaneous Production &
Consumption
Challenges
• Mass production is difficult
• Quality of service and satisfaction is ‘real
time’
• Customer is involved and observes
• Decentralization
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(4) Perishability
What it means?
• Goods
can be inventoried/stored,
sold on another day and returned if
customer is not satisfied.
• Services
can’t be saved, stored,
resold, returned.
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(4) Perishability
Challenges
• Difficult to synchronize supply and
demand with service.
• Services can’t be returned or resold.
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Services Marketing Mix
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Product
Price
Promotion
Place
People
Physical Evidence
Process
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Extended
Marketing Mix
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(1) Services Marketing Mix: People
All human factors who play a part in service
delivery and thus influence the buyer’s
perceptions: employees, customers &
other customers in the environment
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(1) Services Marketing Mix: People
(1) Employees
Dressing, attitude, behaviour, knowledge
(2) Customers
Consulting services: providing
timely/accurate information, implementing
recommendations
Health care services: complying with
health regimes
Influence other customers
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(2) Services Marketing Mix: Physical
Evidence
The environment in which the service is
delivered and where the firm and customer
interact and any tangible components that
facilitate performance or communication of
the service.
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(3) Services Marketing Mix: Process
The actual procedures, mechanisms and
flow of activities by which the service is
delivered – the service delivery and
operating system.
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INTRO TO CRM
INTRO TO CRM
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In late 1990s, CRM growth tremendously thanks
to the deployment of ICT.
Organization become accessible to large group
of customers – people who companies would
get to know individually & whose individual
needs could be served.
Permanent relationships could be developed
Customers would become loyal to organization
INTRO TO CRM
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The realization of an infrastructure enable
customer & supplier to communicate with one
another, freed from constraints of place & time.
Increase customer knowledge thro database
management.
Formulating & implementing marketing strategy that
aimed at the development of long-lasting
relationships with customer.
A customer-oriented organization have to be
created which incorporates the appropriate culture,
structure & procedures.
CRM DEFINITION
‘a process that addresses all aspects of
identifying customers, creating
customer knowledge, building
customer relationships, and shaping
their perceptions of the organisation and
its products’
CRM as a BUSINESS STRATEGY
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CRM is more than a functional strategy – affects the
organization as whole
CRM strategy will provide directions to each dept or
employee that maintain contact with customers
In relationship marketing era – corporate strategy
whose objective is the development of long-term,
mutually profitable customer-supplier relationship
CRM’s goal is so-called customer intimacy –
development of relationship requires both parties get to
know one another, help, trust & make commitment to
one another for long term
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ELEMENTS OF CRM
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The realization of CRM
strategy depend of the
ability to create the
infrastructure which
make it possible for
customer & supplier to
recognize one another &
able to interact in realtime
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ELEMENTS OF CRM
Relationship
strategy
Communication
Business
strategy
Individual
value
proposition
Customer
knowledge
ELEMENTS OF CRM
Customer Knowledge
• Knowledge of individual customer is essential
to develop a long-term relationship & to supply
customization.
• Customer & prospects must be identifiable
• Customer profile must also be known.
• Databases have to be filled with correct &
current data which can be transformed into
individual customer info.
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ELEMENTS OF CRM
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Economic consideration
& manageability factors.
The aim is to develop
long-term relationship
that are mutually
profitable
The info must result in
companies being able to
help customers on time
& in more targeted
manner
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ELEMENTS OF CRM
Relationship Strategy
• Individual customer info must be used to
develop a long-lasting customer-supplier
relationship.
• Organization with relationship strategy have
longer term horizon, ‘tell’ & ‘listen’ more than
‘sell’ – have broader & deeper interest in the
right customers.
• Their interest in individual customer does not
end at the moment the transaction is completed
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ELEMENTS OF CRM
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The purchase only marks
the beginning of the
relationship where the
trust & commitment
must grow.
Supplier must traced out
the CRM policy
necessary to further
develop this relationship
with customers
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ELEMENTS OF CRM
Communication
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Relationship strategy should facilitate
communication between supplier & customer.
Supplier should be able to carry out dialogue with
individual customers.
Multi-channel environment – network of
communication channel, must be developed to
facilitate the possibility to communicate ‘anywhere,
any time, any place’ between supplier & customer.
Conversation takes place, independent of time &
location
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ELEMENTS OF CRM
Individual Value Proposition
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Individual proposition – the physical product, service
& price adapted to individual circumstances.
To supply customization in one form to another –
design the product according to customer’s needs.
The company must have an efficient method of
producing – the custom product might be composed
from standard modules produced on a large scale &
‘only’ the assembly needs to be flexible.
Adapting the price to the value that the proposition
represent an individual perceived value.
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REFERENCES
•
•
•
Buttle, Francis. (2009). Customer
Relationship Management, 2nd ed. Elsevier
Publishing
Peelen, Ed. (2012). Customer Relationship
Management, 2nd ed. Pearson Prentice Hall:
Harlow
Harris, E.K. (2007). Customer Service: A
Practical Approach. Pearson Prentice Hall:
Harlow.
Last Updated:21 December 2022
© LMS SEGi education group
57