Establishing customer relationship management


In current economic conditions it is a basic requirement for a company to manage information. Anderson & Kerr (2002, p.2) define Customer Relationship Management (CRM) as 'a comprehensive approach for creating, maintaining and expanding customer relationships.' It is vital that information is used effectively to acknowledge the customer needs. CRM is established for the improvement of the relationship between the customer and organisation. This improvement happens when a company establishes new relations with the new customers and also when it maintains its existing relationship with the customer. CRM existed in ancient times but only started to develop in recent years (Smith, 2009) It is explained that the development is mainly due to technological advances. Although there are other factors which influenced the recent development of CRM. As a business strategy CRM effectively organisies company resources in the department of sales, marketing, finance and HR (Get fast, Date Accessed 4th) This report will specifically look at the positive and negative impacts of Customer Relationship Management has upon the marketing function. Furthermore it will take a detailed look at the use of technology and business strategy.



According to Buttle (2004,p.34) 'Customer Relationship management (CRM) is a core business strategy that integrates processes, functions and external networks to create and deliver value to targeted customers at a profit. It is grounded on high quality customer data and enable by Information Technology (IT)'. Raab, et al. (2008) expands on this by stating that company carries on their existing business by finding the appropriate methods, technology and then delivering them to the customer in the best ways preferred to the customer's requirements. This mainly includes the data which assists the company to know valuable information required for marketing the product to the customer. Information produced for purpose of CRM consists of customers behavior towards the company, transactions made from sales, web used by the customer for purchasing the product and contact of the customer for informing them about the new product and keeping relationships. Software technology helps the company to analyse the data for marketing the product and also for finding out which product is more preferred by their customer in the market (Smith,2009)

Software technology allows the company to analyse the data and keep the relationship with the customer. This form of technology assists the company to advertise their products online and also assists selling of the product through this software. In the contrast hardware technology is used for storing all kind of data used by the company about its customer. Hardware is described as a 'client-server with mainframe for data volumes' by Mutch (2008,p. 92).


By considering CRM as a technology, the incorporated usage of Information Communication Technology (ICT), Information Technology (IT) and Information system (IS), are vital from which the data are occurred and interpreted for the information use (Mutch, 2008). CRM has developed in last decade due to the technology used in it. The increase of acceptance in CRM technology in business is due to the concepts of marketing orientation (Kohli, Jaworski and Kumar, 1993). Technology has become important for the company for storing data and using this data to form the strategy of the company. Surveys are one of the methods used to collection information; this form of research helps company to develop marketing software which is used in advertising products to the customers. The use of web technology and use of software as a service provider records all the transactions of the sales in the customer data. This data is used so that the can find out about the usage of product from the customer. The company can use the usage data to make any strategic changes to its product. Ultimately, the company will produce the product to its customer needs which will therefore build its relationship with the customer.

Davenport (1997, p.9) explains that information is the data which is a kind of 'purpose and relevance' that helps the company to analysis the data in a meaningful way. Data which is collected is the information which is obtained from the customer about their view of product and their expectation from the company. Managing this data is important for the company because this helps the company to get into touch with the customer and to maintain the relationships. It is vital that marketing data which has been collected is of a qualitative nature. This is important because the collected data will be used to produce the companies marketing strategy.

If incorrect data is used by the company for marketing purposes, it may have difficulties of understanding the customer's requirements and therefore they will struggle in building relationships with its customers. This information which is found now can easily be stored in computers as a data and it can be used infinite amount of times by the company (Buttle, 2004). Information which is collected is structured into computer database in such a way that it can be broken down easily.

In CRM the information which is collected is used for decision-making regarding the manufacturing of new product and launching it in to the market. The information which is collected in CRM can also impact customer service, finance, sales and Human Resources management. Knox (2007) affirmed that Hierarchical Nature of Information, which explain that various data merge to form information which in written forms in to knowledge for the company and this information is included to get the valuable meaning.

Information is the data which has been produced by the company for making decision regarding the product and how to market that product. Information plays an important role in the development of the marketing strategy. Managing information in large organizations is the important thing for them because they regularly collect the vast amount of information from the transactions of sales and then used this data for a variety of purpose in the business (Sharp, 2003). CRM is the based for the technology used in collection of data which helps company to capture, analysis and apply it in the business. The large amount of information which is collected by the company helps them to understand the requirement of the customer and then apply it to the decision- making in the business.

Knowledge in term means the understanding of the particular thing. But according to Goldenberg(2003,p.171) says that 'Knowledge management technology helps companies to capture, organize, manipulate, and share explicit and implicit data'. It is the used of information which makes company to know about the data. It obtain due to used of the data for getting experiences. In contrast to it Awad and Ghaziri (2004, p.33) tells that 'knowledge is an understanding gained through experience or study'. It is the experience which builds the knowledge about the marketing for the company but not by knowing the particular thing of the market. It is like a task which has to be completed by the person for getting knowledge. In CRM the understanding of meaningful information release the person to result in to the knowledge of the customer relationship. The concept behind the knowledge management is of combination of people, technology and organizational process used in the best way to get the result (Awad and Ghaziri, 2004). CRM helps the company to find the best appropriate way for utilizing the knowledge and getting best result out of it. It is the mixture of all kind of data available for the company as it is the secondary resources. The main focus behind CRM in knowledge is to collect the large amount of data and then finding out the best suitable data for the particular product for marketing (Awad and Ghaziri, 2004).


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