Page 27 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Customer Relationship Management

Notes “Customer Focus” and “Customer Value” became lovely terms for the marketers and the
managers. People generally use it more and more; indeed, who could argue against such a
concept? But what does it actually mean? More important, what does it imply for the organization
which seeks to be genuinely “customer focused” and what does it mean to understand “customer
value”?
Customer value is defined in the marketplace not in the factory or an agency. A small but
growing number of companies in the markets draw on their knowledge of what customers
value or they value to gain marketplace advantages over their less knowledgeable competitors
(Anderson, 1998). There is a market for offering as two elemental characteristics: its value and its
practice.
Companies have to look at the changing basis for competition in today’s environment and for
the future. This paper argues for being more customer-focused, not as a nicer, more socially
acceptable way of life but because customer value is becoming a commercial imperative. We
live in a world which is more dynamic than ever. Businesses have always had to face competition,
but at least in the past companies knew who their competitors were; they knew the competitors’
products and their strengths and weaknesses. All of the competition lay within established
market sectors, and they were mostly, if not entirely, domestic. Indeed, it isn’t so far back when
most were regional. Today, companies faced that has changed.
Competitors cross sector boundaries with increasing ease. For example, the distinction between
banks, insurance companies, fast food companies becomes increasingly blurred, as does the
distinction between such organizations and anyone else who has a large customer base and a
strong financial position. In today’s world, music stars start airlines, or launch fast-food businesses
or soft-drinks companies.
The products, competitors and markets are becoming increasingly globalised.
However basis for the competition is changing. It looks like an iceberg, on the surface; the
features on which we compete are the same as ever: products, quality, price, service, and customer
base and market access. But if you look beneath the surface you see that these features are now
dependent on other issues – they are the product of culture, processes and systems, and the
structure of our business. Products/services are obviously at the heart of competition. The
problem is that they keep changing: our competitors will not stand still. For example product
innovation is much more rapid than in the past. Product cycles are getting shorter, and products,
even when delivered by global corporations, are getting more customized. New production
and distribution even decision support systems make this possible, but systems development is
closely aligned to what the market needs.
Generally companies have to understand their customers better; not just to listen to their
requirements but often to anticipate those (Fox, 1997).
If the companies anticipate these requirements the brand “values” may not be as strong in the
eyes of the consumer as they once were. The concept of brand values implies that what makes a
brand is its “personality” which distinguishes it from others and that the presence of this
personality imparts some utility – however tangible – to the consumer. There is a strong body
of research supporting the idea of brand personality as a source of value to the consumer
(Chiristopher, 1996). However, what seems to be happening is that the changes in the marketing
environment are tending to influence the strength of that value.

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