"The process of managing detailed information about individual customers and carefully managing all the customer 'touchpoints' with the aim of maximizing customer loyalty." (Philip Kotler)

What three traditionally separate functions does CRM attempt to tie together?

(1) Marketing - seeks out unfulfilled customer needs and groups who might be interested in the firm's existing products

(2) Sales - brings the products to the attention of the targeted customers and closes the sale

(3) Customer Service - after-the-sale support, such as product help and account information

Primary Activities (of the value creation chain)

• Inbound logistics
• Operations activities
• Outbound logistics
• Marketing and sales activities
• Service activities

1. Support Activities (of the value creation chain)

1) Infrastructure

2) Procurement

3) Human resources

4) Technology Development

Market Sensing (obtaining and using market intelligence)

New offering realization (should be timely and efficient)

Customer acquisition (define markets)

Customer relationship (increase value of customer base by developing long term relationship.

Fulfillment Management (relates to order fulfillment, on time delivery, and collection)

Precommercialization - product development

Introduction

Growth

Maturity

Decline

Innovation through R&D, marketing research, and production tests.

No sales; high investment costs.

Slow sales growth, no profits due to high advertising and promotion costs. Competitors are few, basic versions of the product are produced and high-income customers are targeted because they will pay cost-plus prices.

Strategy is to infiltrate the market, plan for financing to cope with losses, build relationships with suppliers, increase production & marketing, and prepare for competition.

What are the characteristics of the strategies utilized in the Growth stage of product development?

Increasing profits and sales, lower cost per customer, customer base is early adopters, new competitors enter the expanding market, new product models and products are introduced, advertising and promotion costs stabilize.

Strategy is to achieve economies of productive scale by entering new market segments and distribution channels while building brand loyalty and increasing market share. Prices are set to penetrate the market, distribution channels are extended, and the mass market is targeted in advertising.

What are the characteristics of the strategies utilized in the maturity stage of product development?

Sales peak but growth declines. Number of competitors peaks, but begins to decline. Per customer cost is low.

Profits may begin to fall as the company undertakes new R&D costs to improve product design. Drastic price cuts are common in this stage as the company tries to maintain high market share.

Strategy: defend market share and maximize profits through diversification of brands and models to enter new market segments. Emphasis on customer service and encouraging brand switching.