Database Reference
In-Depth Information
table 1.1
traditional Mass Marketing versus Customized Relationship Marketing
Traditional Mass Marketing
Customized Relationship
Marketing
Objective
Mass Marketing
Customer as an Individual
Focus
Customer Acquisition
Throughout Customer Life
Timetable
Transaction term
Medium to Long Term
Performance
Indicators
Market share, Product
Profitability
Wallet share of the Valuable
(i.e., profitable) customers
Customer
Knowledge
Segment-based Habits,
Behavior Modeling,
Occasional Market Research
Individual-based Habits, Behavior
Modeling and Prediction
Product
Stand-alone Product
Product and Service
Price
General Price Reductions
Customer Loyalty-based
Differential Pricing
Channels
Traditional Channels
New Technology Channels
Sales
Salesman as the
lone hunter
Team Sales
Sales Automation
Communication
One way
Two way
Brand oriented
Interactive Personalized
CRM and CRM systems like SAP CRM enable customer-centric business, though they also
support the other logics of business that may become essential at a certain stage of the market
development, products, or services.
Table 1.1 compares the traditional mass marketing approach with that of the relationship-
oriented customized marketing.
There has always been a focus on the customer needs, but with the advent of computers, there
has been a shift away from producing goods or providing services, toward discovering and meet-
ing the needs of the individual customer. The challenge to the company's future is not necessarily
from the competitors, but from its own complacency toward its customers. Product differentiation
is eroding. The change is driven by intensified compensation, deregulation, globalization, and satu-
ration of market segments. Internal business processes are being reengineered as never before, but
process changes are initiated, designed, implemented, and evaluated in terms of meeting the needs
of the customer (see Chapter 7 “SAP CRM and Enterprise Business Process Re-Engineering”).
These businesses are organized for customer centricity and responsiveness, not for the routine per-
formance of standardized predefined tasks.
The customer needs and values can itself be defined in terms of the following:
◾
The need for relationship
: Customers with a high
need for relationship
place a high value on
the supplier's ability to understand their needs; their organization, strategy, and challenges;
and their future plans.
