CUSTOMER

RELATIONSHIP
MANAGEMENT
Introduction: Definition of CRM, CRM as
a business strategy, elements of CRM

Prof. Hrushikesh Kulkarni

HISTORY OF CRM

1960 :
ERA OF MASS MARKETING

1970 :
SEGMENTATION AND
CUSTOMISATION
1980 :
NICHE MARKETING
1990 :
RELATIONSHIP MARKETING,
TELEMARKETING AND CALL CENTERS
Monopoly Market
 SINGLE SELLER

 SELLER’S MARKET

 NO CLOSE SUBSTITUTES

 BARRIERS TO ENTRY

 FIRM AND INDUSTRY ARE SAME

Present Day CRM
 PROMOTION CAMPAIGN

 FEEDBACK SERVICES

 UPGRADE SERVICES

 BRAND

 EVENTS
Face-to-face CRM: Past examples
■ CRM can also be carried out in face-to-face interactions without the use of
technology.

■ Staff members often remember the names and favourite services/products of

regular customers and use this information to create a personalised service for
them.

■ For example, in a bank you will know the name of HNIs that visit the branch and
probably remember the reason of visit, RM, coffee preference etc.

■ However, face-to-face CRM could prove less useful when organisations have a large
number of customers as it would be more difficult to remember details about each
of them.
What is Customer Relationship
Management (CRM)?
What is CRM?
■ Customer relationship management (CRM) is a term that refers to practices, strategies
and technologies that companies use to manage and analyze customer interactions and
data throughout the customer lifecycle, with the goal of improving business relationships
with customers, assisting in customer retention and driving sales growth.

■ CRM systems are designed to compile information on customers across different

channels -- or points of contact between the customer and the company -- which could
include the company's website, telephone, live chat, direct mail, marketing materials and
social media.

■ CRM systems can also give customer-facing staff detailed information on customers'
personal information, purchase history, buying preferences and concerns.
What is CRM? (Cont.)
■ CRM is a business strategy that aims to understand, anticipate and manage the
needs of an organisation’s current and potential customers.

■ It is a comprehensive approach which provides seamless integration of every area of

business that touches the customer- namely marketing, sales, customer services
and field support through the integration of people, process and technology.

■ CRM is a shift from traditional marketing as it focuses on the retention of customers

in addition to the acquisition of new customers.

■ The expression Customer Relationship Management (CRM) is becoming standard

terminology, replacing what is widely perceived to be a misleadingly narrow term,
Relationship Marketing (RM)
Defining CRM

CRM is concerned with the creation, development and

enhancement of individualised customer relationships
with carefully targeted customers and customer groups
resulting in maximizing their total customer life-time
value
Purpose of CRM
■ The focus is on creating value for the customer and the company over the longer
term

■ When customers value the customer service that they receive from suppliers, they
are less likely to look to alternative suppliers for their needs.

■ CRM enables organisations to gain ‘competitive advantage’ over competitors that

supply similar products or services.
CRM a Critical Function
Importance of CRM
■ Today’s businesses compete with multi-product offerings created and delivered by
networks, alliances and partnerships of many kinds.

■ Both retaining customers and building relationships with other value-adding allies is
critical to corporate performance.

■ The adoption of CRM is being fuelled by a recognition that long-term relationships

with customers are one of the most important assets of an organisation.

“Interactive system”
Pillars of CRM
Adapt to
Customer Customer
Focus needs
CRM
Identify Customer Implement &
needs measure
Satisfaction (MR)
Implementing CRM
When introducing or developing CRM, a strategic review of the
organisation’s current position should be undertaken.
Organisations need to address four issues:-
1. What is our core business and how will it evolve in the future?
2. What form of CRM is appropriate for our business now and in the future?
3. What IT infrastructure do we have and what do we need to support the future
organisation needs?
4. What vendors and partners do we need to choose?
Benefits of CRM (1)
■ Retention of customer, concept of life time value

■ Reduced costs, because the right things are being done (i.e., effective and efficient
operation)

■ Increased customer satisfaction, because they are getting exactly what they want
(i.e. meeting and exceeding expectations)

■ Ensuring that the focus of the organisation is external

■ Growth in numbers of customers

■ Customer individuality & information

Benefits of CRM (2)
■ Maximisation of opportunities (eg. increased services, referrals, etc.)

■ Increased sales

■ Increased access to a source of market and competitor information

■ Highlighting poor operational processes

■ Long term profitability and sustainability

A Typical CRM Process
 CRM Ecosystem
1. Operational Aspect 2. Collaborative Aspect 3. Analytical Aspect
Automation to Customer’s
Direct interaction with Analysis of Customer
processes including front
customers without Data for purposes like
office sales / service and
interference of sales optimizing marketing
marketing representative.
representative. Cost effectiveness,
Any customer interaction reduction and better customer retention,
is recorded by CRM, so customer services behavioral analysis,
that any one can retrieve through automated voice decision making
the customer information response, email
at anytime without having feedbacks, SMS, IVR etc.
to interfere about
interaction history
 CUSTOMER
RELATIONSHIP
MANAGEMENT
Elements of CRM

Prof. Hrushikesh Kulkarni

The CRM Structure
CRM
Introduction

ORGANISATION MARKETING ANALYSIS SYSTEMS

1_Elements of 1_Customer 1_Relationship

1_CRM systems
CRM knowledge Data

2_Customer-
2_Customisation 2_Data mining 2_Implementation
supplier

3_Strategy 3_Communication 3_Data selection 3_The future

4_Relationship 4_Relationship 4_Data

4_Conclusion
oriented policy reporting
Elements of CRM
The four cornerstones of CRM are:
1. Customer knowledge

2. Relationship strategy

3. Communication

4. The individual value proposition

 Elements of CRM: Customer Knowledge
1. Customer knowledge refers to understanding your customers, their needs,
wants and aims. It is essential if a business is to align its processes, products
and services to build real customer relationships.

• Segmentation ■ Customer loyalty

(Retention & Cross-selling)
• Awareness, Attitude
■ Brand Image
• Usage
■ Brand equity
• Concept
■ Pricing
• Customer satisfaction
■ Advertising
Customer Segments
Customer Knowledge
 Elements of CRM: Relationship Strategy
 A long lasting customer – supplier relationship
 The positive customer-supplier relationship begins with the initiative of the
supplier to demonstrate his sensitivity to the customer’s needs.
 The key is not only the stimulation of a transaction
Some key considerations:-
•Satisfaction: The customer expects overall attention and convenience in all departments to ensure smooth
fulfillment of the needs. This includes quality, timeliness, ease of access and commitment of conditions. He wants to
believe that the supplier cares for him.
•Competitiveness: Customers assess the supplier through competition based on the pricing and quality of their
products, its reliability, its technological background and industry trends. These factors affect the deal.
•Innovation: It is difficult for the supplier to divert the customer from their quality assessment. Customer knows and
lives the products more than the supplier does, as he is working on them and is in a position to suggest innovation
and development for the products.
•Finance: Suppliers have to be ready for providing financial advantages as loan, extended terms on purchases and
postponement of debt when demanded by their loyal customers particularly at their growth stage or when they are
into a financial crisis.
 Elements of CRM: Relationship Strategy
As such in order to be a valued customer to suppliers, here are a few things he should do:
 Payments always on time. The customer should always negotiate for favorable payment terms
before the deal is initiated. But once the order is placed, the commitment should be honored
 Provide adequate flexibility. The customer should try to give suppliers as much flexibility as
possible for them unless there is a compelling, competitive reason not to do it. Unreasonable
demands should be avoided.
 Personalize the relationship. The customer should always be in contact with the supplier and
visit him frequently, not necessarily only when it is needed. He may also be invited to attend and
give suggestions in some of their strategy meetings. Methods of improving business may also be
discussed. Sharing of knowledge, opportunities, service benefits, software compatibility etc.
would be beneficial for both.
 Elements of CRM: Relationship Strategy

As such in order to be a valued customer to suppliers, here are a few things he should do:

 Share information. The customer should be communicative by keeping the suppliers aware of
what is going on in their organization. He may share some of the key strategic information with
them. Frequent and open communications are important in understanding each other’s
expectations. All relationships begin with self.
 Be a demanding but a valued customer. Being a demanding customer can just be fair. The
customer should state his demands clearly and tell his supplier to hold his agreements. At the
same time as a valued customer he must always cooperate with him to keep up his
commitments without embarrassment. Sharing knowledge, service benefits, media exposure
opportunities, software compatibility, efficiencies etc. would add to enhance relationship.
Elements of CRM: Communication & multi-Channels (1/2)
A good customer service CRM, needs to give a whole view of everything your customer needs along
with the knowledge of their shopping preferences. This will be possible only when your CRM has the
ability to gather this information from different platforms.
■ Acquiring A Holistic View Of The Customer.
– Evolving from a mere name and a phone number, customers today are a detailed profile.
When you give your customers the independence to connect with you on multiple channels,
you are collecting more data to build that customer profile.
– Whether they prefer using live chat, the kind of social media posts they show interest in, or are
more active over calls or emails. CRM helps you gather any and all interactions a customer
has had with your company in one database. The more you know about your customers, the
easier it becomes to determine their needs and wants.
■ Ease Of Access
– Failure to provide customers with optimum resources is the biggest drawback any company
could have. This is also the most common complain that customers have with an organization.
Be it long hold times on the call, or not being able to reach someone at all, businesses that
take advantage of multichannel CRMs are making a segue way for the customers to reach their
reps effortlessly and in different ways.
– According to a survey, 66% of consumers who switched brands did so because of poor service.
Having the power to talk to an agent directly or via chat will increase the likelihood of the
consumer having a positive experience, ultimately closing the sale.
– With good service and ease of access, customers will be able to rely on you for long enabling
you to build a loyal customer base.
Elements of CRM: Communication & multi-Channels (2/2)
■ Real-Time Response
– Be it acknowledging a customer’s request until a detailed action is taken, or providing the solution
on the spot, real-time responses are always the best way to go. As a general rule; social media, SMS
and chat responses should be provided within an hour, email should be addressed in a span of 24
hours and a callback option can be provided in case no agent is available for taking phone calls.
These tasks become smooth, when you have a CRM at your disposal.
– A research says that 86% of customers will pay more for a better customer experience. For instance,
if a user tweets one negative review it will be out there in the public eye in case your system lacks
the ability to view it or respond to the same.

■ Ensuring Uniform Service Across All Channels

– When different verticals of your organization are handling different domains of customer service, it
results in inconsistency. If your call center is handling client calls, the marketing division is
monitoring your social media accounts, and a separate division is running your live chat process,
there is a huge chance of irrelevant customer information which leads to an improper customer
service.
– By integrating your CRM with multichannel support, you are assigning the right department to
handle the respective ticket.
Elements of CRM: The individual value proposition
•The main goal of a CRM strategy is to retain strategically important customers, and the objective
of customer retention is to develop, communicate, and deliver value propositions which meet or
exceed customer expectation. ...
•Their expectations for reliable products and responsive services are becoming more extreme
UBER Apple iPhone – The Experience is the Product
Without explicitly saying so, Uber expertly highlights
everything that sucks about taking a traditional taxi and
points out how its service is superior. The simple (yet
highly effective), excellently conveys the simplicity and
ease that lies at the heart of what makes it such a
tempting service:
•One tap and a car comes directly to you
•Your driver knows exactly where to go
•Payment is completely cashless
Everything about this directly contrasts the typical
experience of getting a taxi – no phone calls to
disinterested dispatchers, no painful conversations trying
to explain to a stressed-out cabbie about where you need
to be, and no fumbling for change or worrying you’ve got
enough bills in your wallet.
 CUSTOMER
RELATIONSHIP
MANAGEMENT
Marketing Aspects of CRM

Prof. Hrushikesh Kulkarni

 Identify Customer Relationships
Customer-centric is… Learning is…

A philosophy under which the An informal process of collecting

company customizes its
product and service offering
based on data generated
through interactions
between the customer and
the company.
customer data through
customer comments and
feedback on product or service
performance.
Identify Customer Relationships
Knowledge Management is…

The process by which learned information

from customers is centralized and shared
in order to enhance the relationship
between customers and the organization.
Knowledge Management

Experiential
observations

Comments
Collected
Information
Includes: Customer actions

Qualitative facts
Empowerment

Empowerment is…
delegation of authority to solve
customers’ problems quickly—usually
by the first person the customer
notifies regarding the problem.
Successful CRM
Occurs when a customer
and a company
Interaction representative exchange
information and develop
learning relationships

• The success of CRM can be directly

measured by the effectiveness of the
interaction between the customer and the
organization.
 The customer value proposition
■ A customer value proposition is a business or
marketing statement that describes why a customer should buy a
product or use a service.
■ It is specifically targeted towards potential customers rather than
other constituent groups such as employees, partners or suppliers.

In marketing, a customer value proposition (CVP) consists of the sum total of benefits which a
vendor promises a customer will receive in return for the customer's associated payment (or
other value-transfer).

Similar to the unique selling proposition, it is a clearly defined statement that is designed to
convince customers that one particular product or service will add more value or better solve
a problem than others in its competitive set
The customer value proposition:

There’s a sequence of questions that have to be asked. They don’t have to be asked all at
once, but you need answers to each point before you can make a winning presentation.
1. What are your objectives? What do you aim to do with this product or service you’re
buying from us?
2. How will you measure success? What metrics will determine if your purchase from us
has met your objectives?
3. What will you gain from a successful experience doing business with us? Not just as an
organization, but personally.
4. How will you decide which proposals is the right one for you (if they have more than one
provider to pick from)?
The customer value proposition:
Examples
The customer value proposition:
Examples
 Reinforcing Customer
Purchase Decisions
■ Thanking customers for purchases and telling them they’re important
■ Updating customers periodically on order status
■ Offer customer service opportunities with postsale e-mails

The CRM needs to look at effective ways to-

1.) Give the consumer more than he/she expected – do not let them know ahead of time or it
won’t be unexpected.
2.) Provide belief-raising, doubt-reducing information. Assure them they have gotten quality
items at a good price.
3.) Reinforce in your advertising – for those whom have already purchased from you will be
listening.
4.) Reinforce in written material, written reinforce is to be supplied after the purchase. Make
it a pleasant surprise. Mail or hand them a printed guarantee and a number to call for further
questions.
Inducing Product Trial
■ Use of marketing database to identify new customers
– Best customer profile can be used to profile potential customers

■ Overlay demographic and behavioral data on existing customer data

Consumer trials are an

important part of a
new product launch.
Product trials and samples
give consumers an
opportunity to try
a product with no risk
before they consider it for
long-term use, according to
marketing consultancy
Launch Engineering. ...
Offering consumers free
samples
Increasing Effectiveness of
Distribution Channel Marketing (1/3)

■ Use Web sites to keep in touch with customers and gain information
about them
■ Use multichannel marketing to monitor purchases of customer
shopping both in-store and online
■ Use RFID technology to improve distribution
■ Direct & Indirect channels

Examples of Web site tools used to get customers to return include

– customer wish lists
– recommendations based on purchase and search behavior
– one click purchasing and shipment tracking
 Increasing Effectiveness of
Distribution Channel Marketing (2/3)
A direct channel of distribution
Is one where a company sells directly to
the end consumer.
For instance, an athletic apparel
company who manufactures sports
shoes and sells them through an e-
commerce website or at their own retail
store is employing a direct channel of
distribution.
Products go directly to the buyer with
no intermediaries or intervening
partners between them.
 Increasing Effectiveness of
Distribution Channel Marketing (3/3)
An indirect channel of distribution
Is one where companies work with one
or more distribution partners or
intermediaries to bring products and
services to customers
 Privacy Issues in CRM (1/ 2)
■ Customer privacy is a critical issue that affects CRM.

■ Public concerns regarding customer privacy issues will continue as long as

consumers believe their personal information is being used in a manner that
is inconsistent with their desired preferences and established permissions.

■ Enterprises have already begun facing customer backlash and government

intervention regarding consumers' information privacy concerns.

■ As such, the need for privacy management is inevitable, and enterprises

must implement more-robust privacy policies.

If customers feel their privacy is being violated, then the relationship can become a liability.
 Privacy Issues in CRM (1/ 2)
■ To avoid or prepare for further government privacy legislation, enterprises must assign a higher priority to
their customer privacy initiatives.

■ To mitigate related risks, they must overcome internal indifference and work more closely with vendors,
as well as consumer advocacy and government organizations.

■ Enterprises that are proactive will be better prepared to face potential consequences, and better able to
meet specific customer demands.

CRM databases are not responsive to the challenges of multichannel marketing in an increasingly privacy
protected society. It is important for marketers to identify and contact clients and prospects according to their
unique privacy requirements.

Hence the importance of high quality data for which the customer database is the foundation.
Benefits of regularly monitoring and utilizing customer feedback

■ In this day and age, the average business loses 10% of their customer base every year,
and most don't know why. Increased competition, pressure for time, decisions, and
action are burdening owners like no other time in history.

■ To gain a competitive advantage over their competition, and to grow a healthy business,
smart owners and their managers are putting customer feedback to work for them.

■ Tap the thoughts and opinions of your most valuable asset - YOUR customers

■ Decreases costs, thereby increasing profits

■ Increase customer loyalty

■ View your business from your customer's perspective

 CUSTOMER
RELATIONSHIP
MANAGEMENT
CRM Categories
 Analytical
 Operational
 Collaborative
Prof. Hrushikesh Kulkarni
CRM Categories:Analytical, Operational & Collaborative.
■ Analytical CRM addresses the analysis of customer data for a host of different purposes.

– To design and execute targeted marketing campaigns that optimize marketing effectiveness.

– Takes into account product and service decision making, pricing and new product development.

Analysis of Customer Data for purposes like optimizing marketing effectiveness, customer retention,
behavioral analysis, decision making
■ Operational CRM generally refers to products and services that allow an organization to take care of their
customers.

– It provides support for various business processes, which can include sales, marketing and service.

– Contact centers, data aggregation systems and web sites are a few examples.

Any customer interaction is recorded by CRM, so that any one can retrieve the customer information at
anytime without having to interfere about interaction history
CRM Categories:Analytical, Operational & Collaborative.

■ Collaborative CRM is communication with customers and covers direct interaction with
customers including feedback and issue reporting.
– Interaction can take place through web pages, email, Automated Voice Response.

– Collaborative CRM greatly improves on services offered.

Direct interaction with customers without interference of sales representative. Cost reduction
and better customer services through automated voice response, email feedbacks, SMS, IVR
etc.
1. Analytical CRM
 Analytical CRM supports organizational back-office operations and analysis.

 It deals with all the operations and processes that do not directly deal with customers.

 Hence, there is a key difference between operational CRM and Analytical CRM.

 Unlike from operational CRM, where automation of marketing, sales-force and services
are done by direct interaction with customers and determining customer’s
needs, analytical CRM is designed to analyze deeply the customer’s information and
data and unwrap or disclose the essential convention and intension of behavior of
customers on which capitalization can be done by the organization.
Key Features of Analytical CRM (1)
key features of analytical CRM:
■ Seizing all the relevant and essential information of customers from various channels
and sources and collaboratively integrating and inheriting all this data into a central
repository knowledge base with a overall organization view.
■ Determining, developing and analyzing inclusive set of rules and analytical methods to
scale and optimize relationship with customers by analyzing 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 with customers and the actual business
planning with customers.
■ Combine and integrate the values of customers with strategic business management of
organization and value of stakeholders.
Key Features of Analytical CRM (2)
Analytical CRM is a solid and consistent platform which provides analytical applications to
help predict, scale and optimize customer relations. 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.

 Scope of Analytical CRM (1)
Analysis is done in every aspect of business as described below:
■ 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, product analysis 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.
 Scope of Analytical CRM (2)
Analysis is done in every aspect of business as described below:
■ Service Analytics- Analytical CRM has major role in enhancing the services which 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, telephone channel etc. This information is
efficiently integrated in customers’ knowledge base so that they can be contacted accordingly.
The essential results produced by Analytical CRM system could diversely help the organization to
tackle customers’ based on values. It also helps in determining which customer is best to invest in,
which can be treated at an average level and which should not be invested in.
Customer Relationship Management
Strategy
Organize the company around customer segments

Encourage and track customer interaction with the company

Foster customer-satisfying behaviors

Link all processes of the company from its customers

through its suppliers

Allows companies to tightly focus in on their target markets

A Simple Flow Model of the Customer
Relationship Management System

Identify customer relationships

Leverage customer Understand interactions

information with current customer base

Capture customer data

Identify best customers
based on interactions

Store and integrate

customer data using IT
Interactions of the
Current Customer Base

All possible areas of a business

Touch Points where the customers communicate
with that business.

Communications between
Point-of-Sale customers and organizations that
Interactions occur at the point of sale, normally
in a store
Capture Customer Data

Outline the
process of capturing
customer data

Steps
1. Collect the data your customers are already handing over
2. Ask for the information in person to connect with your customers
3. Request information over the phone for convenience
4. Use pre-order forms to encourage more people to give you information
5. Take data from warranty cards to collect it inconspicuously
Capture Customer Data
The traditional approach for acquiring data from
customers is through channel interactions.

Store visits

Conversations with salespeople

Interactions via the Web

Traditional phone conversations

Wireless communications
 Capture Customer Data
In a CRM system, channel
interactions are viewed as prime
information sources based on the
channel selected.

Interactions between the

company and the customer
facilitate collection of large
amounts of data, captured across
several touch points.
 Customer Data

■ Only useful if consistent and accurate.

– Use information technology to capture, store, and integrate
important information (data warehousing)
■ Useful information:
– Customer stats
– Purchasing habits
– Transaction methods
– Product usage
■ Access vast amounts of information required to make decisions
Identify the Best Customers
Describe how to Thoughts….
1. Replace Assumptions With a Data-Driven Process
identify the best 2. Balance Resources Strategically Between All Customers
customers 3. Reward Value With Value

Steps….
1. Achieving a single customer view
2. Get your data in order
3. Rank your customers
4. Decide who makes the cut
From identifying to engaging
 A Single Customer View

A single customer view is an aggregated, consistent and holistic representation of the

data held by an organisation about its customers that can be viewed in one place,
such as a single page.
 Identifying the Best Customers
Data Mining:
Data mining is the process of discovering patterns There are many different types of
in large data sets involving methods at the analysis to retrieve information:-
intersection of machine learning, statistics, and 1. Anomaly or Outlier Detection
database systems. 2. Association Rule Learning
3. Clustering Analysis
4. Classification Analysis
A data analysis approach that identifies patterns of
5. Regression Analysis
characteristics that relate to particular customers
or customer groups.
Analytical Value escalator
Data Mining
 Identify and profile the best customers
 Calculate their lifetime value
 Predict purchasing behavior
Data Analysis

Customer segmentation

Recency-frequency-monetary analysis

Lifetime value analysis

Predictive modeling
Leverage Customer Information

Explain the
process of
leveraging
customer
information
throughout the
organization
 CUSTOMER
RELATIONSHIP
MANAGEMENT
Mid Term
 CUSTOMER
RELATIONSHIP
MANAGEMENT
Marketing on Internet
MARKETING ON THE INTERNET

■ Electronic Commerce (E-Commerce)

– Sharing business information, maintaining business relationships, and
conducting business transactions by means of telecommunications networks
■ Electronic Marketing (E-Marketing)
– The strategic process of creating, distributing, promoting, and pricing products
for targeted customers in the virtual environment of the Internet
E-Marketing

■ Through e-marketing companies

can market to target audiences
Benefits of E-Marketing
■ Open and Instantaneous Flows of
Information
■ Enhanced Customer Service Efficiencies
■ Worldwide Scope
– Opens markets to firms of all sizes
Consumer-Generated Electronic Marketing

■ Blogs (a regularly updated website or web

page, typically one run by an individual or
small group, that is written in an informal or
conversational style.)
■ Wikis (a website or database developed
collaboratively by a community of users,
allowing any user to add and edit content.)
■ Public Opinion websites
■ Social Networks
Basic Characteristics of E-Marketing

■ Addressability
■ Interactivity
■ Memory
■ Control
■ Accessibility
■ Digitalization
Addressability
■ A marketer’s ability to identify customers before they
make a purchase
■ How E-Merchants Attain Addressability
– Limit access to areas of their web site to
encourage customer registration
– Offer contests and prizes in exchange for
consumer information
– “Cookies”
Interactivity
■ Allowing customers to express their needs and wants directly to the firm in response
to the firm’s marketing communications
– Real-time interaction with customers
– Broader market coverage at a lower cost
■ Community
Memory
■ The ability to access databases or
data warehouses containing
individual customer profiles and
past purchase histories and to
use these data in real-time to
customize a marketing offer.
– Database
– Data Mining
Control
■ Customers’ ability to regulate
the information they view and
the rate and sequence of their
exposure to that information.
– Portal

Security plays a large

role in control.
Accessibility
■ The ability to obtain information available on the Internet.
– Informs and educates the inquiring consumer about
competing products and prices
– Creates competition for the consumer’s attention
Digitalization
■ The ability to represent a product, or
at least some of its benefits, as
digital bits of information.

Digitalization has helped

traditional businesses migrate
to online services
E-Marketing Strategies
■ Product
– Customized orders
– Services growing
■ Distribution
– Order processing
– Synchronization
■ Promotion
– Consumer in control
– Augments traditional forms
■ Pricing
– More consumer information