Delivery in day(s): 5
Unit 41 CIM Relationship Marketing Assignment
Task 1 Describe and explain the importance of relationship marketing in a contemporary business context
Customers in today’s business environment are considered as the most important assets by the firm. Therefore business strategies are being transformed from their earlier definitions of product centric to the new ones of being customer-centric. The focus by organizations nowadays is to acquire and maintain a share of their customers rather than maintaining a share of their markets. Through adaption of strategies that are customer centric, they have thus demonstrated their insights on customer relationship management (Khalilabad, Mazandarani, Sentosa and Piaralal, 2006). Organizations are found to recognize knowledge about customers as a major source of their value. With the arrival of economy that is based on knowledge, the organizations that succeed would be those that are able to successfully build, recognize and enhance their capabilities of knowledge. In the following pages the importance that relationship marketing has in business context is explained numerous related areas.
1.1 explain the concept of knowledge management and its role in relationship marketing
Knowledge management can be defined as any process or practice leading to the creation, acquiring, sharing, capturing and the process of using customer knowledge so as to enhance performance and learning of the organization. The KM tries to ensure that the organization acts in an intelligent manner so that the overall success and validity of an organization can be secured. It also tries to ensure that the organization can realize the best value of the knowledge assets (Yaghoubi, Khaksar, Banihashemi, Jahanshahi and Nawaser, 2011). The process that an organization uses so as to acquire, document, create and transfer knowledge so as to achieve the goals of an organization is referred to as knowledge management. In line which the shift of the market to an approach that is customer-oriented; corporations have been found to be heavy investors in customer relationship management. The success in the implementation of these systems depends on the successful use of information technology in addition to the use of capabilities related to knowledge management by the organization. The knowledge about customers is today taken as a sign of the policy of organization and is used for directing the strategic orientation of the organization. Thus implementing customer relationship management involves acquiring, documenting, transferring and then using the same knowledge both on the inside and outside of the organization. Researchers have shown that there is effectiveness of knowledge management on Customer relationship management and it is also seen that the relationship has an impact on increase in profitability and satisfaction of customers. In this regards the knowledge about customers forms an integral part of the relationship that exists between knowledge management on one hand and customer relationship management on the other (Khalilabad, Mazandarani, Sentosa and Piaralal, 2006).
Figure 1 A model on the effect that knowledge management has on customer relationship management (Khalilabad, Mazandarani, Sentosa and Piaralal, 2006)
1.2 explain the ways that ICT (Information and Communications Technology or Technologies) can support the customer relationship management process in a particular organization
Few major areas in which technology can extend its help and can provide key advantages to the business so as endanger loyalty of the customers through improvement in customer service are as follows:
Websites: The organizations can provide sections in the website where the questions that the customers have about products can be answered by professionals from the company or by other customers.
Software: The customer relationship can be managed in a better manner through the use of sophisticated tools of data gathering like the customer relationship management software.
Communications: Technology helps the company to combine multiple communication channels for more effective communication with the customers (INC, N.D). It also helps the company to know that the same customer who has just left a voice mail had also sent an email few days back.
Email: Customer service can be improved through the use of e-mail as email provides with a service which can be used to communicate to the customers and respond to their requests for help with a much quicker response time.
According to Accenture which is a leading technology consultancy firm businesses who wish to raise the quality of customer service through the use of technology should focus on the following technologies:
Insight driven marketing:Analyzing the customer data so as to gain business insights which can help in more effective use of target marketing (INC, N.D).
Management of data and data analytics:The data that is collected from the customers is analyzed so as to understand the preferences of the customers.
Automation of marketing: Streamlining and automation of the business process so that efficiency of the business process can be improved and the costs can be kept at a low level.
Effectiveness of workforce: Staffs should be encouraged so that they can embrace newer ways. Treatment of customers should be improved through the use of tools and training so that it results in the delivery of better service.
Optimizing self service: It refers to the finding ways so that customers are able to interact with the business and let the business know about their wants.
1.3 Describe the benefits of customer relationship management in a selected organization similar to D&D Enterprises
Tesco is another retailer like D&D and operates in England. Tesco has ruled the retail landscape of England since the mid 1990s due to the customer relationship initiatives that it has taken up since its foundation. The phenomenal growth of the company and its number one position in the retail landscape of England is attributed to the customer relationship initiatives taken up by the company at various times. The success of Tesco as a retailer is closely associated with its launch of loyalty card scheme in 1995. The company has used the data that is generated through the loyalty card scheme to reward the customers and generate detailed statistics about the purchasing habits of the customer. The data generated through this scheme has been used for modification of marketing efforts of the company. This marketing strategy has played a definite role in launching and establishing the position of Tesco as a market leader (ICMR, 2003). Not only the loyalty card but there are other schemes too that have been by adopted by Tesco over the years. These schemes have helped Tesco provide the best possible service to the customers by knowing the customers of the company more closely than ever. Tesco defines in essence the modern organization in which the marketing efforts are customer oriented rather than being market oriented.
1.4 make justified recommendations for the improvement in customer relationship management for the selected organization
It is apparent that the reason behind the struggle that is faced by D& D enterprise in the current changing business environment is due to the fact that it has lost connection with the customer. Developing and maintaining good connection with the customers is an important aspect of the business, one that helps the company to survive in the long run. This aspect has always been important and is all the more relevant in the current marketing environment that has become customer oriented. In this regards D& D also needs to become customer oriented and develop good knowledge of the customers (Ahmad and Shahid, 2015). In order to help the company in this regards, it should at first implement a data collection system that helps it collect detailed statistics about the customers. There should also be a system to analyze the customer data and generate insights that can be used for shaping the marketing efforts of the company. In this regards the company can take help of technologies that would assist it in this direction.
The above pages illustrate the point that knowledge management is an important wing customer relationship management. As the customers have ever more options from whom they can purchase the relevant goods to their liking, companies are making it a point to increase their relationship with the customers. The marketing effort these days have changed their orientation to become more and more customer oriented. In this regards the companies are making use of technology to build relationships with customers and this step can also be taken by D& D enterprise to increase its connection with customers.
The nontraditional organizations are also required to undertake marketing activities. But the marketing activities that are undertaken by the nontraditional organizations are remarkably different from traditional or for profit organizations. This is due to the simple fact that the objectives of the goals of these organizations are different from for profit organizations. The following pages analyze the role that marketing plays in these organizations by analyzing several related topics.
2.1 carry out a stakeholder analysis for a voluntary sector and a public sector organization (AC 2.1)
The stakeholders that can impact and in turn impacted by the workings of a voluntary organizations or a NGO are described below in the following figure
Figure 2 Stakeholders of a voluntary organization (Post, Preston and Sachs, 2002)
The innermost circle of the above figure refers to the decision making bodies of the NGO. These are the primary stakeholders and are found to have economic and contractual ties with the chosen organization. These organizations contribute important resources to the NGO which take the form of member fees and voluntary based work. These stakeholders primarily operate with an identity and strategic goals that is similar. In the industry base that forms the next tire of stakeholders there are two different groups of stakeholders and these are similar organizations and companies. In this case it is seen that the companies share contractual ties with the NGO and identity based traits are shared by similar organization with the voluntary organization or NGO in question. These are both important actors in business ethics field. The NGO influences the companies and the similar organizations referred are independent actors operating in the same field and are competitors to the NGO in question. Other stakeholders who are not significant for the case organization or the NGO are grouped in socio political arena. Operating environment of the NGO is provided by organizations that are mentioned in this tire.
Stakeholders are of particular importance in case of both public and not-profit organizations. Both of these two types of organizations are seen to have a more diverse group of stakeholders as compared to the private for profit organizations. This makes it more difficult to identify strategic issues in case of a not for profit or a public sector organization. There are number of stakeholders in case of a public sector organization. Some of these stakeholders in case of public sector health care organization are:
Director of public health
Director of procurement
Head of health intelligence and communication
Communication (Hunter, 2007)
Director of nursing
Public health manager
Public health management analyst
Board committee members
Health visitors/school nurses
Council/ local authority
2.2 describe the nature of the relationships with customer within two selected not-for-profit organizations (AC 2.2)
NPOs are found to operating on purposes and grounds that are different from that of a for profit organization. In this regards the key stakeholders of a not for profit organization are different from the key stakeholders in case of a for profit organization. Thus where as in the classification of stakeholders in a for-profit organization includes local communities, financers, customers and employees; in case of the not-for profit organization implication of the stakeholder theory is left to the identification of a few key stakeholders (Freeman, Harrison, Wicks, Parmar and De Colle, 2010). These stakeholders are related to the funders or clients of the organization. For instance one of the researchers in this regards identified the key stakeholder groups in case of a not-for profit organization as financers or clients like the funders or sponsors and does not further describe the relationship (LeRoux, 2009).
For instance one of the NGOs, European Business Ethics Network in which there are more than 1000 members who originate from more than 40 countries across Europe the customers can be referred to as members of the organization. Amongst the members of the organizations there are students, individuals, institutions and corporate.
Similarly in case of the Red Cross society which is another not-for-profit organizations the customers are the donors of the organization.
2.3 compare methods used in marketing within the public, private and voluntary sectors (AC2.3)
The methods that are used for marketing within the public, voluntary and private sector organizations are similar although the objectives of marketing are different.
The marketing efforts of the private sector are directed towards selling of the goods or services in order to make a profit. In this regards there are several marketing tools that are applied by the private sector organization including STP, marketing mix etc. As compared to the private sector the public sector incorporates goods or services that are referred to as public. For instance the marketing effort of NHS is on service rather than being focused on products. In this regards there are several advertising techniques that have been used by NHS so as to improve the awareness or support for the different health programs that are operated by it. As compared to the case of public sector and private sector the marketing efforts of the voluntary or not-for profit organizations are directed towards attraction of funds or of volunteers. There are different marketing channels and efforts that are used by the NGOs in order to attract funds from donors and the trust of people.
2.4 explain the key issues involved in marketing in a selected virtual organization (AC2.4)
In case of the virtual organization the efforts that the companies spend in marketing and customer relationship are more vital as the organizations or their sales representatives are not able to interact with the customers in their physical environment. In this regards, they have to use technology so as to understand and analyze the customer’s mindset. The customer help desk that is there on the site is an important tool as it allows them to connect with the customers and address their problems. For instance in case of Amazon the success of the company starts from the moment a company searches for a product on the Google. The results of the search list products on the Amazon website amongst the top 5 listings. The search in the site of Amazon is also made easy with predictive searches so that the customers can have easy access to their products. The entire website design along with discounts and website layout are made in a way so as to attract the customers can keep them glued to the site.
The above pages describe how marketing is conducted by the non-traditional companies and how the marketing efforts of these companies are significantly different from the for profit companies. In this regards, it has been pointed out that the objectives and goals of the not for profit and public sector organizations are different from the for profit organizations. It is thus found that the lists of stakeholders in case of public sector and not for profit organizations are vaster. Thus the marketing efforts in these cases are different from that of for profit or traditional organizations.
This task is elucidating on the significance to apply the extended marketing mix in the service sector. In this regard, D&D Enterprises is being taken into consideration. The use of the extended marketing mix in D&D Enterprise needs to get described. Then, there is a need to explain the ways by which the product or service mix can be used for enhancing the value in respect of the customer as well as the organization. In addition, it is also required to explain in what ways difficulties peculiar to the marketing of services can be overcome in regard to D&D Enterprise. Last but not the least, there is also the need to explain the role of IT in services marketing management for D&D Enterprises.
3.1 Describe the use of the extended marketing mix in a selected service sector business.
The extended marketing mix comprises of the three additional elements that are added to the marketing mix viz. physical evidence, people and process. Let us now briefly summarize the use of the extended marketing mix in D&D Enterprise which is mentioned as under,
- Product – The retail product mix is used for developing a proper promotion strategy regarding D&D Enterprise that depends on the target market that needs to be reached. After the identification of the target market and defining the strategy for positioning, D&D Enterprise will be employing different tools of product mix for reaching out to the customers, thus aiming at building the image of the company. D&D Enterprise has the requirement towards employing an association of different components of the product mix for actualizing objectives that are associated with the promotional aspects as well as business aspects.
- Price – For surviving in the retail business, D&D Enterprise has the requirement towards seeking cash flow, profitability as well as complete growth for consolidating their position in the market. However, determination of pricing cannot occur in seclusion. (Lancaster, 2010)Two equally significant aspects towards the establishment of retail price are costs as well as operating expenses.
- Place– D&D Enterprise should make sure that there is the availability of the products in respect of the target customers whenever the need arises. There exists two key elements regarding place viz., marketing channels as well as physical distribution. Channel decisions influence the marketing mix elements in a considerable manner as well as have the involvement of a long term commitment regarding resources. Physical distribution has the involvement of transportation, warehousing, handling of materials, bulk packaging and so on. The intermediaries carry out certain amount of these activities. (McDaniel, 2011)
- Promotion – D&D Enterprise will be designing a promotional mix in relation to the objectives of the company like organizational positioning, attracting customers, increasing the sales turnover, clearing out seasonal merchandise, announcement of special event as well as educating the customers regarding the offerings of the company. D&D Enterprise normally spends their promotional budget towards the development of campaigns for advertisements as well as regarding different activities for sales promotion. The promotion mix used by D&D Enterprise should have compatibility with the desired image of the store, allocation of budgets as well as having sufficient flexibility for modification whenever there will be a need.
- People – People are considered to be one of the key components regarding service marketing mix. People are defining a service. Regarding service marketing, people will be making or breaking an establishment. Therefore, D&D Enterprise needs to specially train their employees regarding interpersonal skills as well as customer service focusing towards the satisfaction of the customers. (Lancaster, 2010)
- Process – Service process is the manner by which delivery of service takes place in respect of the end customer. The process of D&D Enterprise towards the delivery of its product is having huge significance. It is regarded as an essential element service design as well, in which prior to the establishment of the service, D&D Enterprise will be defining in an exact manner the process of the service product that reaches the end customer. (McDaniel, 2011)
- Physical Evidence – Physical evidence also plays a pivotal role regarding the service marketing mix. D&D Enterprise having competing service products might be using physical evidence for differentiating their service products in the market and giving a competitive advantage to their service products. Many a times, the use of physical evidence occurs as a differentiator regarding service marketing.
3.2 Explain how the product/service mix can be used to enhance value for the customer and organization.
The enhancement of the value for D&D Enterprise might occur by continuously developing the ways by which it will be meeting the customer’s needs as well as wants. In this respect, product mix plays a significant role. Let us now discuss the ways by which product mix can be used for enhancement of value which is as under,
- Adding Width – The different types of products that are offered by D&D Enterprise measures the width of a product mix. Each type is referred as a product line and every line is different from the others regarding its use by customers and the benefits customers are seeking from it.
- Adding Depth – The quantity of different products in a product line is being referred by the depth of a product mix. Adding depth to a line is a familiar way to attract customers having distinct tastes and providing satisfaction in a better way to the desires of the existing customers regarding diversity (Freeman, 2013). This strategic aspect might as well assist D&D Enterprise in taking benefit of economies of scale regarding production, distribution as well as marketing.
- Positioning – This is referring to the perception of customers regarding a brand, a single product or a product mix. An organization with a broad product mix is normally regarded as more of an industry expert in comparison to a competitor having just a single line. At times, D&D Enterprise can do its value enhancement by repositioning its product mix. (Freeman, 2013)
- Product Characteristics – The value regarding the product mix of D&D Enterprise in respect of its customers is mostly focused on three product traits such as quality, functionality as well as style. Improving these elements will be satisfying in a better manner the value-conscious customers and enhance the competitive strength of D&D Enterprise in a significant manner.
3.3 Explain how difficulties peculiar to the marketing of services can be overcome with reference to a particular organization.
The difficulties peculiar to the marketing of services can be overcome at D&D Enterprise in the following ways,
- Intangible – A major difficulty regarding the marketing of services is that something intangible is being sold. Customers are only seeing the outcome of a service that might not always occur immediately. There is the requirement of faith on the part of the customer that they will be getting the desired outcome in exchange of their money.
- Demonstrating Empathy – The customers need to get convinced in the marketing efforts of D&D Enterprise that the organization has comprehended their problems and is providing a resolution. This needs to be done through the use of people, processes as well as physical evidence. Also, an interaction must be ensued on a personal level with the customers frequently as part of the marketing process for establishing a rapport and convincing them about understanding their requirements. (Lind, 2014)
- Competitive Pricing – D&D Enterprise has requirement towards being competitive, therefore there is a need for researching the prices of some competitors in gauging what the approaching customers will be paying. After that the costs need to get assessed for determining whether the costs can be met and profit can be incurred with that pricing. (Palmer, 2011) Additional features can be provided with the services for differentiating the organization as well as garnering a higher price.
- People – In D&D Enterprise, being a service organization, marketing of its people is of utmost significance. The way the staffs are performing their service will be influencing repeat business. The association is also significant, there is the need to follow up with the customers through telephone reminder as part of the marketing strategies.
3.4 Explain the role of IT (Information Technology) in services marketing management in a selected organization.
The role of IT in services marketing management in D&D Enterprise are mentioned as under,
- Cost rationalization - The expectation of customers are high due to the outstanding service that are received by them from certain organizations. They have an expectation of high service quality at a rational price. The use of technology in D&D Enterprise will be replacing less skilled individuals working in frontline service jobs. This replacement assists in reducing the service cost. (Lancaster, 2010)
- Higher level of service – Technology assists in enabling the customers as well as staffs in being more efficient to receive as well as provide services correspondingly. Technology offers huge assistance to make the staffs more effective towards the delivery of services. Customer relationship management as well as sales support software assists frontline staffs of D&D Enterprise in offering enhanced services. (Palmer, 2011)
- New ways to deliver service – Technology did the introduction of new means regarding service delivery at D&D Enterprise. It is offering modes to deliver existing services more conveniently. Technology is facilitating basic customer service functions such as payment of bills, checking records of accounts, tracking of orders, seeking information and many more.
This part of the assignment reflected on the aspect of extended marketing mix for D&D Enterprise that delves with the 7Ps which are product, price, place, promotion, physical evidence, process and people. Moreover, the ways by which product mix can do the enhancement of value has been depicted such as adding width, adding depth, positioning as well as characteristics of products. Also, difficulties peculiar to the marketing of services at D&D Enterprise have been discussed that are associated with intangible services, demonstrating empathy, competitive pricing and people. Finally, the role of IT in services marketing management of D&D Enterprise have been discussed that are associated with rationalization of cost, higher level of services as well as new ways for service delivery.
Ahmad, S.F. and Shahid, M.K., 2015. Role of knowledge management in achieving customer relationship and its strategic outcomes. Information and Knowledge Management, 5(1), pp. 79-87.
Freeman, R.E. (2013). Strategic management: A stakeholder approach. Cambridge University Press.
Freeman, R.E., Harrison, J.S., Wicks, A.C., Parmar, B.L. and De Colle, S., 2010. Stakeholder theory: The state of the art. Cambridge University Press.
Hunter, D.J. ed., 2007. Managing for health. Routledge.