Crm And International Channel Management

University of Strathclyde

Department of Marketing

International Channel Management

Individual Assignment

CRM and International Channel Management

Martha A. Katiforis

07/04/2003

Introduction

The objective of this study is first to examine the CRM (Customer Relationship Management) concept as apparent in academic and business literature and second to investigate areas where CRM concept relates to International Channel Management (ICM) practice.

The study is developed in two parts: Part A overviews CRM theory and practice interface while in Part B we attempt an analysis and evaluation of ICM in correlation to CRM applications. Analysis is illustrated with positive and negative examples to this end. Finally we attempt a brief overview o of CRM strategy potential of SME’s.

Due to the limited length of the study the analysis adopts a forward outlook only examining manufacturer, distributor & customer relations. However in practice CRM principles are also backward applicable and sometimes more effective through out the whole supply chain.

Part A.

Complexity both in terms of change intensity and factors’ interconnect ness in the external and competitive environment, lead most of businesses to adopt applications of new models and techniques, in order to respond effectively and efficiently to new global market dynamics. With the expansion of International trade, the plethora of goods and services offered and the surge of Internet, consumers are becoming more and more selective, knowledgeable and demanding and their share of preference is hard to gain.

To counter act those environmental conditions by the end of last century Management /Marketing academicians and practitioners developed and put into application, with the help of advanced IT technologies, the concept of CRM.

What is CRM about? Theoretically, is a focus- shift from a Producer to a Consumer Orientation with respect to business goals, strategies and policies. The consumer is placed at the “heart” of decision-making & transactions processes. However functionality wise what does CRM involve and how does it apply in real business world?

CRM definitions given by academics and business people highlight the issue:

Scandinavian CRM pioneer, Christian Gronroos, defines CRM as “the process of identifying and establishing, maintaining, enhancing and when necessary terminating relationships with customers and other stakeholders, at a profit, so that the objectives of all parties are met, when this is done by a mutual giving and fulfillment of promises.” According to Peppers& Rodgers glossary, CRM viewed as a customer-focused business model “ entails one-to one marketing, relationship marketing, real time marketing, customer intimacy and a variety of other terms.” But the idea is the same: establish relationship with customers on an individual basis, and then use the information you gather to “treat different customers differently” The interchange of information and services implying the notion of mutual benefit.

Going through analysis of further CRM definitions we come across several other sub concepts such CKI (Customer Knowledge Infrastructure), that KURARE

poses as the foundation of any CRM successful initiative, or the restructuring of CRM

Term into CMR (Customer Managed Relationships) meaning the surge of new technologies aiming to give customers “control of their relationships” As with other dynamic concepts CRM seems to give way to different interpretations depending

on the scope and party it is approached, in other words currently CRM means different things to different people. This implies the notion of change overtime

in terms of theories /framework built and functionality. Barton Goldenberg in his article “Customer relationship Management What is all about? (CRM-Forum 1998) stressed the dynamic aspect of CRM by saying: “within the next two years CRM

will consist of 11 components”… implying that Organizations’ CRM systems ,in order to keep their competency have to adapt to the new technological applications.

In view of the above, I believe that Dr. N.Tzokas’ from the CRM Institute of the

University of Strathclyde comprehensively defined CRM within a continuum perspective as “IT enhanced value process, which identifies, develops, intergrades and focuses the competencies of the firm to the “voice” of the customer to deliver long-term superior value, at a profit, to existing and potential customer segments. I n my opinion lack of effective response of CRM systems to the “voice” of the consumer as well as the company’s potentials may count for the observed incompatibility of CRM theory vs. CRM practices.

According to CRM consultant Andy Lewis (The Great Dilemma, CRM-F0rum, 20/3/2003 ) “ For most companies that have tried it, CRM has been a painful experience. While there is nothing wrong with CRM in theory, most organizations have failed to make it work in practice.” Further on Andy Lewis says that “according

to Gartner Group study two years ago, the proportion of unsuccessful CRM projects

is due to peak 80% by the middle of this year.” This implies how seriously companies have to consider pros and cons with respect to their resources, market dynamics opportunities and threats in order engage into a functional CRM System.

Is CRM concept challenged? Both Academics and Business managers agree

that ,within the complex environment a Customer Orientation approach, as translated in CRM concept