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Transcript of Crm [Compatibility Mode]
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Customer relationship
management
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History of CRM
B&S CIMS CRMRM
B&S – Buying & Selling
RM – Relationship MarketingCIMS – Customer Information Management Systems
CRM – Customer Relationship Management
e-CRM- A subset of CRM that focuses on enabling customerinteractions via e-channels (The web, email and wireless)
Time line
e-CRM
Late 80’s Mid 90’s 2002 - FutureEarly 90’s
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Customer Relationship Management What is a customer?
A person who buys…
What is a relationship?
The state of being connected…
What is management?
The science of controlling…
So CRM should mean controlling the relationshipwith a customer.
How do you control a relationship?
Isn’t a relationship a two-way thing?
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Customer Relationship
Management (CRM)
Traditional Marketing CRM
Goal: Expand customer base,
increase market share by mass
marketing
Goal: Establish a profitable, long-
term, one-to-one relationship with
customers; understanding their needs,
preferences, expectations
Product oriented view Customer oriented view
Mass marketing / mass production Mass customization, one-to-one
marketingStandardization of customer needs Customer-supplier relationship
Transactional relationship Relational approach
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Customer Relationship Management Customer Relationship Management (CRM) is a
strategy that focuses on building strong relationshipswith customers and potential customers for creating andmaintaining a loyal customer base.
CRM works across all departments to harmonizecustomer-centric thinking.
It reduces costs, increases efficiency and improvescustomer satisfaction.
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Process of creating and maintainingrelationships with business customers or consumers”
“A holistic process of identifying, attracting,differentiating, and retaining customers”
CRM is basically for developing long lastingrelationship with a customer.
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Definition of Customer Relationship Management (CRM)?
CRM is “the development and maintenance of mutually beneficial
long-term relationships with strategically significant customers”
(Buttle, 2000)
CRM is “an IT enhanced value process, which identifies, develops,
integrates and focuses the various competencies of the firm to the
‘voice’ of the customer in order to deliver long-term superior
customer value, at a profit to well identified existing and potentialcustomers”.
(Plakoyiannaki and Tzokas, 2001)
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Information Technology and CRM
Technology plays a pivotal role in CRM
Technological approaches involving the use of databases,data mining and one-to-one marketing can assistorganisations to increase customer value and their own
profitability This type of technology can be used to keep a record of
customers names and contact details in addition to their history of buying products or using services
This information can be used to target customers in apersonalised way and offer them services to meet their specific needs
This personalised communication provides value for thecustomer and increases customers loyalty to the provider
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Advantages of CRM over traditional mass-
media marketting
Reduces advertisement cost
Focus on customer needs
Easier to track the effectiveness of a given
campaign Compete for customers based on services not
prices
Prevents overspending on low-value clients
Speed the time to develop and market the
product
Improves the use of customer channel
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Types of CRM
Strategic CRM
Operational CRM
Analytical CRM
Collaborative CRM
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Operational CRM
Operational CRM is mainly focused on automation,
improvement and enhancement of business processes
which are based on customer-facing or customer
supporting.
The main importance of a CRM system lies on how the
selling, marketing and service oriented processes are
automated
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Operational CRM
Marketing automation
Sales-force Automation
Service Automation
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Marketing automation- Basically focused on automating marketing processes
campaign management involves marketers to use
customer specific information to determine, evaluate and
develop communications that are targeted to customers in
individual as well as multilevel or multichannel
environment. Campaigns developed to communicate
customers individually are easy and involves unique and
direct communications. For multichannel environment the
implementation of marketing strategies and campaign
management is quite difficult and challenging.
For handling this, a CRM marketing strategy called event-
based marketing is inherited. Using event based
marketing communication and offers are presented to
customers as and when they are required.15 SJ-AP-I/CA/SOC
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Sales-force Automation A CRM system is not only used to deal with the existing
customers but is also useful in acquiring new customers.
Sales cycle
The process first starts with identifying a customer and
maintaining all the corresponding details into the CRM
system. This process can be distributed into many stages
which includes generation of lead and then qualifying
those leads as prospects.
Automation of selling process is efficiently handled bySales-force automation which automates all the
methodologies or sales cycle and above described process
sophisticatedly.
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Service Automation Service automation deals with managing organization’s
service. The actual interactions with customers such as
contact, direct sales, direct mail, call centers, data
aggregation systems, web sites and blogs etc. are examples
of operational CRM.
Any one in the organization can have access to this
information about customer which gives a clear view of
customers needs and important information on the customer
such as products owned, prior support calls etc
The customer can easily be contacted at right time at
the right place.
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Analytical CRM
Analytical CRM is designed to analyze deeply the
customer’s information and data and unwrap(remove) or
disclose the essential convention and intension of behavior
of customers on which capitalization can be done by the
organization.
Primary goal of analytical CRM is to develop, support and
enhance the work and decision making capability of an
organization by determining strong patterns and predictions
in customer data and information which are gathered from
different operational CRM systems.
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key features of analytical
CRM: Seizing all the relevant and essential information of customers from
various channels and sources and collaboratively integrating andinheriting all this data into a central repository knowledge base with aoverall organization view.
Determining, developing and analyzing inclusive set of rules and
analytical methods to scale and optimize relationship with customers byanalyzing and resolving all the questions which are suitable for business.
Implementing or deploying the results to enhance the efficiency of CRM system and processes, improve relationship and interaction withcustomers and the actual business planning with customers.
Combine and integrate the values of customers with strategic business
management of organization and the value of stakeholders.
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Advantages of implementing and using
an analytical CRM are described below.
Leads in making more profitable customer base by
providing high value services.
Helps in retaining profitable customers through
sophisticated analysis and making new customers that
are clones of best of the customers.
Helps in addressing individual customer’s needs and
efficiently improving the relationships with new and existing
customers.
Improves customer satisfaction and loyalty.
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business
Customer Analytics- This is the base analytic used to analyze customer
knowledge base. It provides a better view of customer behavior and by modeling,assessing customer values and assessing customer’s portfolio or profiles and
creates an exact understanding of all the customers.
Marketing Analytics- This helps discovering new market opportunities and
seeks their potential values. It also helps in managing marketing strategies and
scale and plan marketing performance at district, regional and national levels.
Marketing analytics also focus on campaign management and planning, productanalysis and branding.
Sales Analytics- Sales analytic provides essential environment to plan, simulate
and predict sales volumes and profits by constantly analyzing organizational
sales behavior. It helps in pipelining all the selling opportunities in an efficient
way by indulging and improving the sales cycle.
Service Analytics- Analytical CRM has major role in enhancing the serviceswhich answering all the questions regarding customer satisfaction, quality and
cost of products, complaint management etc. It even helps in improving and
optimizing the services by sophistically analyzing the service revenue and cost.
Channel Analytics- This type of analysis helps to determine the customer
behavior on channel preferences, like web channel, personal interaction,
tele hone channel etc. This information is efficientl inte rated in customers’
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Collaborative CRM
Collaborative CRM deals withsynchronization(organization) and integration
of customer interaction and channels of
communications like phone, email, fax, web etc.
with the intent of referencing the customers aconsistent and systematic way.
The idea is not only enhancing the interactions
but also to increase and improve customer
retention and liberty ( Freedom).
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Collaborative CRM can be broadly
identified by two aspects:
Interaction Management
This management process deals with designing
the communication or interaction channel
process within an organization which is specific to
customer interaction and finally enhancing theextent of communication between both the parties.
Channel Management
After analyzing and implementing the interaction
medium it’s important to enhance the power of channels through which the customers are
interacted.
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Advantages of Collaborative
CRM:
Enables valued customer interaction across the
channels.
Entangles( catch up) web or online collaboration
to cut down service cost of customers. Integrates customer interaction with call centers
to enable multi-channel interaction with
customers and helps them make understand the
overall process vales.
Describes a view of integrated customer’s details
during interaction to server them in a better way.
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Strategic CRM
Maintain Long Term Relationship with Customers
The aim of strategic CRM is to concentrate and
enhance the knowledge about customers and use
this knowledge to improve and customize theinteractions with customers to maintain a long-
term relationship with them.
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e erm n ng an eve opmen o
strategies
Amplify(increase) Commitment For this each and every department should be kept informed
about all the developments and implementation of processes
carried out or performed
Building valuable project team-
Each and every member of this team should be experiences anddedicated professional as these members will be the key decision
makers in the whole process. They will be responsible to
communicate all the related details and benefits of the CRM
strategies to all the members of the organization. These members
should be from following work groups Management, Technical, Sales and Marketing, Financial,
External Experts
Requirement Analysis
This process involves a series surveys and questionnaires with
top level sales, marketing and financial managers to gather the
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CRM Business strategy
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CRM strategy should be aligned to the organization's mission and purpose in order to harness(bind) the power of CRM software and
bring about a sustained (continuous) achievement of business
objectives and profitable customer relationships.
Three key phases:
• 1. Customer Acquisition.
• 2. Customer Retention.
• 3. Customer Extension.
Three contextual factors:
• 4. Marketing Orientation.
• 5. Value Creation.
• 6. Innovative IT.
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1. Customer Acquisition - This is the process of attractingour customer for the first their first purchase. We have
acquired our customer.
Growth - Through market orientation, innovative IT and
value creation we aim to increase the number of
customers that purchase from us for the first time. 2. Customer Retention - Our customer returns to us and
buys for a second time. We keep them as a customer. This is
most likely to be the purchase of a similar product or service,
or the next level of product or service.
Growth - Through market orientation, innovative IT and
value creation we aim to increase the number of
customers that purchase from us regularly.
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3. Customer Extension - Our customers are regularlyreturning to purchase from us. We introduce products and
services to our loyal customers that may not wholly relate to
their original purchase. These are additional, supplementary
purchases. Of course once our loyal customers have
purchased them, our goal is to retain them as customers for the extended products or services.
Growth - Through market orientation, innovative IT and value
creation we aim to increase the number of customers that
purchase additional or supplementary products and
services.
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4. Marketing Orientation - means that the whole
organization is focused upon the needs of customers.
Customer needs are addressed by the Three Levels of aProduct whereby the organizations not only supplies the
actual,
tangible product, but also
the core product and its benefit, and also
the augmented product such as a warranty andcustomer service.
Marketing orientation will focus upon the needs of consumers
for all three levels of a product. (N.B. 'market'
orientation(decision making process) and 'marketing'
orientation (customer or product)are not the same).
5.Value Creation - centres on the generation of shareholder
value based upon the satisfaction of customer needs (as
with marketing orientation and the delivery of a sustainable
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6. Innovative IT - is exactly that - Information Technology
must be up-to-date.
It should be efficient, speedy and focus upon the needsof customers.
Whilst(at the same time) IT and/or software are not the
entire story for CRM, it is vital to its success.
CRM software collects data on consumers and their transactions. Huge databases store data on individuals
and groups of individuals.
In some ways, CRM means that an organization is
dealing with a segment of one person, since every
consumer displays different purchasing habits andpreferences.
Organizations will track individuals, and try to market
products and services to them based upon similar buyer
behavior seen in other individuals (e.g. When Amazon
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Three phases of CRM Acquiring New Relationships
You acquire new customers by promoting
your company’s product and service
leadership.
Enhancing Existing Relationships You enhance the relationship by encouraging
excellence in cross-selling and up-selling,
thereby deepening and broadening the
relationship.
Retaining Customer Relationships Retention focuses on service adaptability –
delivering not what the market wants but
what customers want.
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Customer Types
Platinum Heavy, reliable users, not price-
sensitive, try new products, loyal
Gold Large users who push for price breaks,
shop around and not so loyal
Iron Low volume or intermittent(Irregular) users;
cost to serve them is quite high
Lead Demanding, want special attention but
don’t buy much and show no loyalty
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-Organizational wise change of priority to
customers.
- Significant investment of time and money
- Threatens management’s control/powerstruggle
- Heightens people’s resistance(fight) to change
- Inappropriate integration leads to
disaster(failure)
Disadvantages:
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Customer Strategy
You have a clearer idea of what your customers arelikely to think, feel and spend (and perhaps even how
that may change).
How do you translate this into a viable customer
strategy? single view of the customer - and for them, a single
view of your organization - is a good start…
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Fortune
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Customer insight(close) and segmentation: Wehelp clients understand customer needs and
behaviors using our BothBrain® approach and
develop actionable segmentation from the resulting
insights. We help clients define the target customer or
"sweet spot"—the area of distinct advantage over
competitors— to inform business decisions and
investment allocation.
Product and category management: We help firms
break down barriers(protection) to innovation andimprove ongoing customer-led product development
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Pricing: We help resolve the pricing
paradox(statement)—pricing is almost always the #1
profit lever , yet it remains under-developed in mostcompanies—by building long-term pricing capabilities
and capitalizing on in-year-revenue opportunities.
Sales and channel effectiveness: We help
companies identify quick, targeted, customizedsolutions as well as strategic and operational
improvements to boost underperforming sales
organizations.
Marketing and brand strategy: We help companies
align marketing and brand strategy with
overarching business objectives; ensure marketing
investments are generating highest returns and
reinforcing (strengthen) the brand positioning; and
build a loyal customer base through branding that
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Customer experience: We work with companies
to develop a series of positive interactions
with the customer to earn their
advocacy(promotion) and inform
consistent(reliable) delivery of experiences to
drive top-line growth.
Loyalty: We help companies nurture (raise)
promoters—loyal customers who are more
profitable, and who are activeproponents(supporter ) of your business in good
times and bad.
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What is a product strategy?
A product strategy identifies, in broad terms, how you
plan to sell your products to your marketplace.
It documents how the people in your marketplace (your
clients) think about your products and business. It
documents how your business positions its products
and services and it contains your strategies for selling. A product strategy can encompass any number of
products, depending on the nature of your business. You
could have one strategy for each major product or,
perhaps, the same strategy for all of them. A more diverse organization selling different products
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important?
The product strategy forms the basis for
executing a product roadmap and subsequent
product releases.
The product strategy enables the company to
focus on a specific target market and feature set,
instead of trying to be everything to everyone.
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Elements of a product strategy Who are you selling to? Define your target customer or
market. Identify whom you are selling to, and what thatmarket looks like.
What are you selling? Describe how potential customers
will perceive (recognize) your product compared to
competitive products. Understand what makes your
product unique in the market . What value do you provide your customers?
Determine what problems your product solves for
customers. You cannot be everything to everyone within a
particular market, but you can help to solve specific
problems. Create a value proposition to position the value
you provide and the benefits that customers will receive
with your solution.
How will you price your product? State how you will
price the product. Include its perceived value and a pricing
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Creating your product strategy
To create your product strategy, start with identifyingthe market problems you would like to solve.
This includes interviewing your target market,
understanding the competitive landscape and
identifying how you will differentiate yourself . Your product strategy will change over time as you
learn more about your market, and as (if) you decide
to enter different markets.
Listening to your market and developing your product strategy is a circular process; as you learn
more, you will evolve your product strategy and the
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Power of the product strategy
The power of a product strategy comes from what
you define as well as what you exclude.
By identifying a particular target market in your
product strategy, you are also excluding other
markets. This helps your company to understand
which projects fall outside the product strategy and
distract(divert) from strategic goals.
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Channel Strategy
Introduction
Traditional and Electronic Distribution Channel decision at the retail level
Channel decision at the wholesalers
The evaluation criteria of customer
Channels from the organization’s perspective Market coverage by using current channels
Market coverage by using new channels
Dual channel distribution
Multi channel distribution Channel-Modification Decisions Qualitative
Factors
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Introduction
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Channel Strategy The number and type of channels that customers are
using has rapidly grown to include the Internet, smart
phones and a host of social media options.
The result is an increase in possible customer
touchpoints presenting more and differentopportunities for organizations to interact with their
customers.
The broad principles by which the firm expects to
achieve its distribution objectives for its target
market(s)
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What is a marketing channel? A marketing channel consists of
Individuals and firms involved in the process of making a
product or service available for consumption or use by
consumers and industrial users.
Role of the channel in marketing strategy
Links a producer to buyers
Performs sales, advertising, and promotion
Influences the firm’s pricing strategy
Affects product strategy through branding policies,willingness to stock and customize offerings, install,
maintain, offer credit, etc.
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The Channel-Selection
Decision Fundamental Questions
Who are potential customers?
Where do they buy?
When do they buy? How do they buy?
What do they buy?
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Traditional and Electronic
Distribution
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Traditional Marketing Channel
Designs
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The Design of Marketing
Channels
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Channels
Direct distribution is typically used when:
Buyers are easily identifiable
Personal selling is a major component of the
communication mix
Organization has a wide variety of offerings for
the target market
Sufficient resources are available
Intermediaries are not available for reachingtarget markets
Intermediaries do not possess the capacity to
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The Design of Marketing
Channels
Indirect distribution must be considered
when:
Intermediaries can perform distribution functions more efficiently and less
expensively
Customers are hard to reach directly
Organization does not have resources to perform distribution function
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Representative Electronic
Marketing Channels
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Disintermediation
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Channel Selection at the Retail Level
Channel Selection Decisions
1. Which channel and intermediaries will provide the
best coverage of the target market?
2. Which channel and intermediaries will best satisfythe buying requirements of the target market?
3. Which channel and intermediaries will be the most
profitable?
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Channel Selection at the Retail Level
Target Market Coverage
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Level
Effective Distribution occurs when a limited number of retail outlets account for a
significant fraction of the market potential.
Example: A marketer distributes the product
through 40% of available outlets, but theseoutlets account for 80% of the market.
Satisfying Buyer Requirements
Information
ConvenienceVariety
Attendant servicesSJ-AP-I/CA/SOC63
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Channel Selection at the Retail Level
Profitability
Margins = Revenues – Channel Costs
Channel costs are:
- Distribution costs
- Advertising costs
- Selling costs
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Channel Selection at Other Levels of
Distribution Types of Wholesaler
Specialty wholesaler
– Limited line of items within a product line
General-merchandise wholesaler
– Wide assortment of products
General-line wholesaler
– Complete assortment(variety) of items in a
single retailing field Combination
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The evaluation criteria of
customer
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The evaluation criteria of the
customer
Information –characteristics , price and service of
products
Communication-customer needs are identified
Transaction-exchanging of orders, invoices and
payment from the customer
Distribution – product delivery at the convenience
of customers
Service – customer should receive good service
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Channels from the organization’s
perspective
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Market coverage Market coverage by using current channels
No overlap and No conflict Significant overlap and conflict
Minimal overlap and small conflict
Market coverage by using new channels
Scenario planning(identify unfulfilled or changed
customer needs and changes)
Dissatisfied customers(indication of unfulfilled customer
needs)
New technology
Control(control of its sales channels.ie standardproduct)
Conflict(change channels structures)
Profitability
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D l Di t ib ti
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Dual Distribution Occurs when an organization distributes its
offering through two or more different marketingchannels that may or may not compete for similar
buyers the main consideration is whether it will
provide incremental sales revenue or cannibalize
existing sales When is it used
own brand and private store brand
distribution to large and small retailers
Multi brand strategy
geographic factors
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Multi-Channel Marketing
Multi-channel marketing involves the
Blending of an electronic marketing channel
and
A traditional channel in ways that aremutually reinforcing in attracting, retaining,
and building relationships with
customers.
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Multi-Channel Marketing
Justifications An electronic marketing channel can provide incremental
revenue (Victoria’s Secret)
An electronic marketing channel can leverage(Control) the
presence of a traditional channel (Ethan Allen)
Multi-channel marketing can satisfy buyer requirements(Clinique division of Estée Lauder)
Considerations
Actual incremental revenue or merely cannibalization ?
Incremental cost to launch and sustain an electronicforefront
Disintermediation – a traditional intermediary member is
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Channel-Modification Decisions
Qualitative Factors
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Channel Modification Decisions Qualitative
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Channel-Modification Decisions Qualitative
Factors
1. Will the change improve the effective coverage of thetarget markets sought? How?
2. Will the change improve the satisfaction of buyer
needs? How?
3. Which marketing functions, if any, must be absorbedin order to make the change?
4. Does the organization have the resources to perform
new functions?
5. What effect will the change have on other channelparticipants?
6. What will be the effect of the change on the
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I f t t t t
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Infrastructure strategy
organizational infrastructure is comprised of a policy
and governance(authority) framework,
collaborative processes and accountability
mechanisms on which the strategy is being
implemented
This is done by meeting or exceeding the balancedscorecard objectives, achieving a culture of
mutual trust and respect, and being recognized by
all customers as a benchmark.
Infrastructure strategy is supported that there shouldbe process stability, manpower stability, increased
productivity, one piece flow, and a continuous
improvement culture.SJ-AP-I/CA/SOC75
ELEMENTS OF ORGANIZATIONAL
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ELEMENTS OF ORGANIZATIONAL
INFRASTRUCTURE
There are five basic elements common to all
organizational infrastructures —
Goals,
People,
Process,
Structure and
Results.
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Goals and Results
Goals and Results form the template for
infrastructure development.
The organization's “Value Goal” defines how the
organization creates value that its customers are
willing to pay for.
The “Results” the organization measures and
rewards establish priorities across the
organization.
When the Value Goal is aligned with the Results itcreates the “blue print” for building organizational
infrastructure.
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People
People — what they do and how they do it.
Infrastructure defines the roles people play and
assures people have the ability and willingness to
achieve high performance in these roles.
Infrastructure institutionalizes high performance
by getting the right people doing the right things.
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P
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Process Process — the policies, procedures and rules an
organization establishes. Processes define how things get done inside
organizations — how plans are made, goals are set,
priorities are established, funds are distributed, people
are hired, products are developed, money is spent,communications takes place, decisions are made,
problems are solved, finances are managed and
people are rewarded.
Processes increase performance by taking
discreet(careful) tasks and organize them into a
predecessor and successor relationship.
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St t
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Structure Structure creates focus and control.
It creates focused action by breaking the organizationinto distinct areas of responsibility — Research is
responsible for technology development, Development is
responsible for new products, Manufacturing is responsible
for building products and Sales for selling the products that
are built. Each organizational unit is focused on, and heldaccountable for, its unique area of responsibilities.
Structure creates control by distributing authority
throughout the organization. A “boss” has the authority to
hold his or her people accountable to create compliance to
roles and rules. Bosses use authority to make sure people
play their assigned roles, follow the rules and remain
focused on their area of responsibility. Structure increases
performance by setting priorities and minimizing
redundancy of action.
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Infrastructure organizes people, process and
structure to get the right people, doing the
right things, at the right time, right the first
time.
It maximizes performance creating the ability,willingness and opportunity for people to achieve
high performance.
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DEFINING AND ANALYZING EXISTING
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DEFINING AND ANALYZING EXISTING
INFRASTRUCTURE
The first step in defining an organization'sinfrastructure is to articulate the organization's Goal
and Result. Goals and Results are not to be
confused with the organization's Vision or
Mission. Vision and Mission define the business;
Goals and Results define the infrastructure that will
allow the organization to achieve its Vision or Mission.
In an automobile metaphor, the car is the Vision while
the engine and drive train are the infrastructure that
allows the car to move.
'The second step is to place your people, process and
structure on a continuum from integration to
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Differentiation
Organizations differentiate people, process and
structure to create efficiency and maximize its ability
to do things right the first time.
Integration Organizations integrate people, process and
structure to create effectiveness and maximize its
ability to do the right tings.
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BUILDING NEW AND CHANGING EXISTING
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BUILDING NEW AND CHANGING EXISTING
INFRASTRUCTURE
If you don't know where you going, any infrastructure will get you there.
Therefore
the first step in building or changing infrastructure is to establish the
organization's Goal (how it adds value) and it's Results (key metrics).
Trying to build and organizational infrastructure without a clear Goal
and Result inevitably leads to high levels of personality and politics.
Therefore establish Goals and Results is a critical first step ininfrastructure development.
If the Goal is effectiveness and the measure is innovation, you will
want to move to the left side of the Playing Field and integrate
these elements.
to create an infrastructure more to the right (differentiation) to controlcosts and build the product right the first time.
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