The Marketing Book 5th Edition

Customer

in control

On-line

interaction

Traditional

interaction

Supplier

in control

• Dell
  
  
  • Saville Row
  
  
  
  


• McDonald's


• Microsoft

Integrating customer relationship management and supply chain management 501

advantages, both in terms of customer focus as
well as cost reduction. The challenge to those
organizations who find themselves stuck with
traditional distribution channels is to find new
ways to create value for their customers by
making better use of their traditional distribu-
tion channels. Distributors will increasingly
need to take on additional value-creating roles
if they are to survive in the future. Innovative
approaches to channel strategy, combined with
appropriate use of information technology and
supply chain capability, will increasingly be
fundamental to marketplace success.

Summary: changing the marketing focus

A central theme of this chapter has been the
need for a change in the traditional focus of
marketing which, in the past at least, has been
primarily on winning customers and building
market share. The new focus, it is suggested,
should be as much upon the retention of
existing customers as it is upon the gaining of

new ones. The challenge now becomes one of

how to develop marketing strategies that will

do both these things. CRM is emerging as a

new paradigm that recognizes the need to build

long-term relationships with customers built

upon service and quality. It represents an

approach to relationship marketing that is

enabled though information technology.

Our experience suggests that there is con-

siderable confusion today about the exact

nature of CRM. Breaking CRM down into

several manageable processes, as shown in the

strategic framework for CRM in Figure 19.5,

helps to explain and communicate its strategic

role, and to demonstrate the interdependence

and cross-functionality of CRM activities. How-

ever, for CRM activities to be successful the

interlinking role with the SCM process must be

managed in an integrated manner. It is for this

reason that SCM is now seen by many com-

panies as a critical component of their market-

ing strategy. SCM focuses upon the physical

satisfaction of demand and it provides the key

to meeting the ever-growing demand for quick

and reliable response.

It is becoming evident that to compete and

survive in today’s volatile marketplace requires

both CRM and SCM processes capable of

providing high levels of product availability

and variety, yet which are low cost and reliable,

and with high levels of customer service.

Whilst these goals might appear incompatible,

an increasing number of companies are proving

otherwise. By asking fundamental questions

about the way they do things and with a

willingness to re-engineer their business pro-

cesses, these companies are emerging as the

leaders in their markets.

The purpose of managing CRM and SCM

in an integrated manner is to enable the

organization to become more ‘agile’ in its

response to demand. Agility is an increasingly

important competitive capability. As demand

becomes more volatile and less predictable,

the ability to move quickly, to change direc-

tion and to meet changed customer require-

ments in shorter time frames is critical. Agility

Figure 19.9 Customers take control in an on-line
world
Source: Adapted from Steve Bowbrick, Web Media.