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Chapter: Business Science : Customer Relationship Management : Introduction

Evoluation of CRM

The modern concept of customer service has its roots in the Craftsman Economy of the 1800s, when individuals and small groups of Manufacturers competed to produce arts and crafts to meet public Demand.

EVOLUATION OF CRM

 

The modern concept of customer service has its roots in the Craftsman Economy of the 1800s, when individuals and small groups of Manufacturers competed to produce arts and crafts to meet public Demand. Individual orders were booked for each customer and supplied according to his/her taste and demands. The economies were small and so were the transactions. The manufacturer was able to meet the customers on one to one basis and talk to customer to understand the minute details. Customer care and service were highly personalized.

 

 

But then the economics swing was setting in. The technology was increasing and so was it difficult to cater to the individualistic needs of the customer. Gradually, the era of mass production came in.

 

The advent of Mass Production in the early 20th century, followed by an explosion in the demand for goods after World War II, increased the power of suppliers at the expense of consumers, and thus reduced the importance of customer service. History tells us that customer service as a concept was kept aside in the cell. The manufacturers could produce what they could and these goods will find their way to customers on their own. Infect, it was the age of demand exceeding supplies. There was no need for customer service as an activity or as a tool for promotion or enhancement of markets. But things never remain the same for long periods of time.

 

 

A shift in this balance began in the 1970s, as international competition increased, and the dominance of western manufacturers was challenged, first by Japan, then by Korea, China and other developing economies. New world emerged with these Eastern economies taking to tremendous growth Producers responded by improving the quality of their products and services.

 

They introduced to the world entirely a new concept—the concept of simplicity and convenience and economy to the world The economic boom of the 1990s again increased the power of suppliers who, while not completely reverting to lower standards of service, were able to be more selective of which customers to serve, and of what levels of service to provide.

 

 

 

The overall quality of customer service - in society and in specific industry- will continue to be determined by the relative balance of power between suppliers and consumers; it will improve as competition becomes more intense, and decline as competition decreases. We have to assess the global situation today and derive that we are facing a new development. Briefly, the product similarity is making it more a challenge today than ever before, to upgrade customer services to get an edge over the competitors.

 

·        The changes in market demand and competitive strategy forced the company to change from transactional marketing to relationship marketing.

 

· Marketing mix was developed in the 1950s in order to of marketing helps to explore increased demand of the compa

 

·        The objective of transactional approach of marketing is to sell more products and services to maximize sales and profit.

 

·        Increased competition and matured markets have led to the low growth. Which results in increased pressure and corporate profitability?

 

·        The beginning of globalization of markets, new competitions led to the greater customer choice.

 

·        Companies must move from a short-term transaction oriented goal to long term relationship building goal.

 

 

·        Companies are compete successfully in domestic and global markets including customers, distributors, employees, unions and governments.

 

·        The term marketing domain is defined as stakeholders which have to be taken into consideration in order to develop relationships and to achieve long-term success in the final marketplace.

 

·        The increased importance of relationship marketing also led to an increasing demand for an efficient customer relationship management.

 

·        The task of finding who your customers are?

 

What they exactly want and providing it seems to be a task with difficulties.

 

·        Understanding and management of customer‘sexpectationsis rather a key to success in order to be able to create satisfied customers.

 

·        Customer knowledge is required to satisfy their customers and reach the ultimate goal of a company.

 

·        Create customer knowledge and the utilization of the customer relationship management system is essential.

 


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Business Science : Customer Relationship Management : Introduction : Evoluation of CRM |


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