Customer Relationship Management Essay

2845 Words Dec 20th, 2005 12 Pages
Customer relationship management (CRM) is the new title for relationship marketing. Explain why this is so and suggest how CRM can be effectively incorporated into a marketing plan.

Over the past fifteen years Relationship marketing (RM) has been slowly developing into customer relationship management (CRM) (Gilligan et al 2003). Markets change, even when profitable, they may mature and saturate, so we cannot be surprised that companies are changing their strategies in order to satisfy the consumer (Sturdy et al 2001). The difference between the two can be seen within the two definitions; Relationship marketing as a company that specialises in relationship marketing helps clients build relationships with their channel partners and
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This involves tracking consumers' buying habits by computer and crafting products and information tailored precisely to people's wants and needs. Keeping close tabs on their customers allows database marketers to monitor their preferences and communicate with those who show an interest in their products or services. Information is then sent to the appropriate division for follow up. Blockbuster Entertainment Corp. is testing a system that makes recommendations based on a consumer's prior video rentals and offers special promotions based on these choices. However, some consumers feel threatened by this kind of surveillance and resist such marketing efforts. Hence, the attempts made to ensure that database marketing conforms to the requirements of respondent confidentially. Kotler (1997) & Solomon et al (2002). Middleton (2001) goes as far as saying that apart from the ability to target individuals, databases have a powerful market research value in generating detailed knowledge of repeat buyers and cutting the cost of undertaking traditional usage and attitude studies among buyers.

According to Hollensen (2003) and Morgan (1996) managing relationships with customers, suppliers and competitors is now an integral part of a firm's strategic marketing agenda, and therefore is extremely important to companies. Berry (1995) asserts that through RM service, providers gain a better knowledge of the customer's requirements and needs. Some managers

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