Customer Relationship Management

2846 WordsJan 2, 200612 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…show more content…
In a lot of ways, it could be said that it is a logical development of the way in which the focus of marketing has changed from the early 1980s view that marketing is essentially a business function to the idea that, more realistically, it is (or should be) an organisational attitude, ethos and culture. (Gilligan et al 2003). Gilligan goes on to suggest that: ‘one of the most powerful things about relationship marketing is the recognition that the cost of gaining a new customer, particularly in mature and slowly declining markets, are often high'. CRM offers benefits to both customer and supplier. As said before, many people see CRM as the best way to retain customers in the long run by creating added value for them and by doing so this gains competitive advantage in an increasingly competitive market. Mittal and Lasser (1998) and Arnould et al (2002) have agreed with Gilligan in stating that loyal customers means spending less money on advertising, personal selling and the setting up of new accounts. Recently has seen the introduction of reward cards such as the Tesco Club Card or the Nectar scheme. (Lee et al 2005). The latter is a great example of relationship marketing, not only does it reward returning consumers with ‘point' that maybe exchanged for goods or holidays,
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