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MGT301 - Principles of Marketing Assignment No. 01, Fall 2013 Due Date : Nov 18, 2013,Solution and Discussion

SEMESTER FALL 2013
PRINCIPLES OF MARKETING (MGT301)

ASSIGNMENT NO. 01 (NON GRADED)


DUE DATE: 18TH

NOVEMBER, 2013.

MARKS: 15

TOPIC: Customer Relationship Management


LEARNING OBJECTIVES:


 What is CRM?
 How CRM helps to retain the existing customers?


LEARNING OUTCOMES:
 Students will learn how to build strong relationships with the customers.
 Student will learn how different marketing tools work for effective CRM in services marketing industry to attract new customers and retain the existing customers.



CONCEPTUAL BACKGROUND:
Customer Relationship Management is an important and efficient approach in creating and maintaining relationships with customers. It has been always a very helpful strategy for the management purpose and customer service, which deals with customer concerns and problems. The CRM exists since the concept of buying and selling came into existence. It is a model for the management of a company’s interactions with its current and future customers. Today the role of CRM is very important, marketers, decision makers and professionals are trying to find out more ways to create a relationship with customers (existing or new customers) and for that purpose they use different tactics.


REAL TIME CASE:


                Hi-Tec Automatic Car Wash provides automatic car washing facility, is an established brand having a lot of loyal customers through its strong relationship management system. It attained this status by the virtue of its dedicated staff and contacts with the different quarters of the society. Through constant innovation and refinement of the existing strategies aimed at instant solutions, it offers quality services by using high technology to remain in constant and close touch with the customers. It has made the total customer satisfaction possible by providing them a fabulous experience (Quality, Convenience and efficiency). It cares for its employees, customers and the environment and strives to create a positive image of its business in the community. Its goal is to provide total customer satisfaction by providing the best quality service in the minimum possible time.


REQUIREMENT:


1 What could be the possible tools to create an effective CRM strategy in order to attract new customers and retain the existing customers? (10 Marks)


2 What role the CRM system can play in the success of a business? (05 Marks)


IMPORTANT:
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Replies to This Discussion

Customer Relationship Management
Before going in the detail of customer relationship marketing first we should know that what is  relationship marketing? It is basically Establishing a long-term continuous relationship with the
customer, initiated and managed by the firm. This relationship must provide value to both parties.
If a customer is lost, not only is that particular transaction lost, but perhaps all future transactions
throughout the life of that customer. As discussed earlier that marketing is the organizational function charged with defining customer targets and the best way to satisfy needs and wants competitively and profitably. Since consumers and business buyers face an abundance of suppliers seeking to satisfy their every need, companies and nonprofit organizations cannot survive today by simply doing a good job. They must do an excellent job if they are to remain in the increasingly competitive global marketplace.
Many studies have demonstrated that the key to profitable performance is to know and satisfy target customers with competitively superior offers. This process takes place today in an increasingly global, technical, and competitive environment. When marketing helps everyone in a Customer  Relationship Management firm really meet the needs of a customer both before and after a purchase, the firm doesn’t just get a single sale. Rather, it has a sale and an ongoing relationship with the customer. That’s why we emphasize that marketing concerns a flow of need-satisfying goods and services to the customer. Often, that flow is not just for a single transaction but rather is part of building a long-lasting
relationship that is beneficial to both the firm and the customer.
1. CRM Customer relationship management
“CRM is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.” CRM Customer relationship management can be defined: as strategies focused on increasing customer satisfaction, loyalty, and profitability by leveraging superior customer knowledge acquired, stored, and acted upon with the aid of information technology.
2. The basic goals of the CRM are:
Customer relationship marketing provides the key to retaining customers and involves providing financial and social benefits as well as structural ties to the customers. Companies must decide how much  relationship marketing to invest in different market segments and individual customers, from such levels as basic, reactive, accountable, proactive, and full partnership. Much depends on estimating customer lifetime value against the cost stream required to attract and retain these customers. Total quality marketing is seen today as a major approach to providing customer satisfaction and company  profitability. Companies must understand how their customers perceive quality and how much quality they expect. Companies must then strive to offer relatively higher quality than their competitors. This involves total management and employee commitment as well as measurement and reward systems. Marketers play an especially critical role in their company’s drive toward higher quality. The basic goals of CRM are:
• The idea of CRM is that it helps businesses use technology to gain insight into the behavior of  customers and the value of those customers. If it works as hoped, a business can:
• Provide better customer service
• Make call centers more efficient
• Help sales staff close deals faster
• Simplify marketing and sales processes
• Discover new customers Enable companies to provide excellent real-time customer service by developing a relationship with each valued customer through the effective use of individual account information 
• Based on customer attributes, companies can customize market offerings, services, programs,  messages, and media
• Reduces the rate of customer defection
• Increases the longevity of the customer relationship
• Enhances the growth potential of each customer through “share of wallet,” cross-selling, and up-selling
• Makes low-profit customers more profitable or terminates them
• Focuses disproportionate effort on high value customers CRM is mainly based upon the customer loyalty that is of great importance for the marketer because firms have realized the value of customer retention. Winning a new customer is usually 5-10 times more costly than retaining an existing customer Customers are usually more profitable the longer you keep them. The value of loyalty goes beyond single customer for the reason that loyal customers provide more and more credible referrals but the angry gossip of disloyal customers can devastate a firm.
3. Building Profitable Customer Relationships Managing demand means managing customers because:
1. A demand comes from new customers and repeat customers.
2. Today, besides making efforts to attract new customers, marketers are going all out to retain and build relationships with existing customers. It costs five times as much to attract a new customer as it does to keep a current customer satisfied.
3. Because of changing demographics, a slow-growth economy, more sophisticated competitors, and overcapacity in many industries, many markets and market shares are shrinking. The key to successful customer retention is superior customer value and satisfaction.

what about the 2nd question mates??

Tools to create an effective CRM strategy in order to attract new customers.

1. Try a new marketing technique: Like any small business, you likely have some marketing tricks that work. And, also like most small businesses, I bet you use them again and again.

2. Launch or offer a new product: Again, the idea is the same – if you keep doing the same thing, offering the same old products (and marketing them the same old way) it is the same old people who will notice them.

The trick is to get different people to check out your wares. Offering a different product, or product line, and letting people know about it, does that.

3. Get more clicks: While you can’t man the business 24/7, your URL can. Whether yours is a fully-empowered e-commerce site or simply an e-brochure for your business, the secret to converting that Web site into money is all in the numbers. The more people who visit, the more purchases may occur.

4. Launch a PR campaign: Advertising is great and can lead to new customers for sure. The problem is that it is inherently biased; it is you tooting your own horn.

Far better: Have someone else hype your business for you. That is where public relations comes in.

5. Ask for referrals: My dad had a huge sign in his carpet warehouse that said, “Our word of mouth advertising starts with you!” He then gave all referrers a $100 discount on future purchases.

Creating an incentive referral program is simple and it can yield great results. The key is to give people a reason to refer business to you (aside from being a fine establishment) and to thank them for doing so. People like to be appreciated.

6. Smile and dial: Sometimes new business is simply a matter of prospecting. Whether it is making cold calls or sending out proposals, every so often you just gotta do it. Do some search engine research, get a list of potential leads, and get to it.

The important things I have learned when prospecting are two-fold:

i. Don’t take no personally.

ii. Remember, it’s a numbers game. Keep on going!

7. Revamp your Web site: Did you know that 80% of Americans now spend as much time online as they do in front of the television? That means that you have to have a top-notch site.

8. Get (social) networking: More and more, people are going online to check out and chat about business choices. Indeed, according to a poll I just read of “active Internet users”:

72% of respondents checked out a company’s reputation on chat boards before buying.

74% based their buying decisions, at least partially, on what they read.

81% thought that blogs, online rating systems and discussion boards gave them valuable feedback.

 

tu kiya howa information tu milinaa

Important announcement

Assignment No. 01 (Non Graded)

principles of marketing (MGT301)

Dear Students

This is to inform that Assignment No. 1 will be opened at 11thNovember, 2013 and due date of assignment submission is 18th November, 2013.

A 24 hours extra/grace period after the due date is usually available to overcome uploading difficulties which may be faced by the students on last date.  This extra time should only be used to meet the emergencies; and above mentioned due date should always be treated as final to avoid any inconvenience.

Topic of assignment:

Customer Relationship Management

Important:

To open the assignment file, you must have Adobe Acrobat Reader/ PDF Reader installed on your computer.

For acquiring the relevant knowledge, do not rely only on handouts but watch the course video lectures and read additional material available online or in any other mode.

Note related to load shedding: Please be proactive

Dear students!

As you know that Pre Mid-Term semester activities have been started and load shedding problem is also prevailing in our country now a days. Keeping in view the fact, you all are advised to post your activities as early as possible without waiting for the due date. For your convenience; activity schedule has already been uploaded on VULMS for the current semester, therefore no excuse will be entertained after due date of assignments, quizzes or GDBs.

Attention!

This assignment is optional (Non Graded). The assignment would be graded and notified accordingly. But marks/grade of the assignment has no effect on the Final Grades.

no need for too much xplaination jxt type 10 or 12 possible tools to create an effctve CRM in the 1st and a short note on CRM in 2nd.... alll dOne (Y)

alll assignments submited successfully wid the help of M.Tariq Malik ... thnx alOt tariq bhai 

Customer relationship marketing provides the key to retaining customers and involves providing
financial and social benefits as well as structural ties to the customers. Companies must decide how
much relationship marketing to invest in different market segments and individual customers, from
such levels as basic, reactive, accountable, proactive, and full partnership. Much depends on
estimating customer lifetime value against the cost stream required to attract and retain these
customers.
Total quality marketing is seen today as a major approach to providing customer satisfaction and
company profitability. Companies must understand how their customers perceive quality and how
much quality they expect. Companies must then strive to offer relatively higher quality than their
competitors. This involves total management and employee commitment as well as measurement
and reward systems. Marketers play an especially critical role in their company’s drive toward
higher quality. The basic goals of CRM are:
• The idea of CRM is that it helps businesses use technology to gain insight into the behavior
of customers and the value of those customers. If it works as hoped, a business can:
• Provide better customer service
• Make call centers more efficient
• Help sales staff close deals faster
• Simplify marketing and sales processes
• Discover new customers Enable companies to provide excellent real-time customer service
by developing a relationship with each valued customer through the effective use of
individual account information
• Based on customer attributes, companies can customize market offerings, services,
programs, messages, and media
• Reduces the rate of customer defection
• Increases the longevity of the customer relationship
• Enhances the growth potential of each customer through “share of wallet,” cross-selling,
and up-selling
• Makes low-profit customers more profitable or terminates them

Just an idea about 2nd question

2) What role the CRM system can play in the success of a business? (05 Marks)

Role the CRM system can play in the success of a business.

1) Technology, People and Process:
Implementing a CRM system is not only about building a business case, but also about understanding your business process, the people involved in this process, and the technology used to drive the process. As the opening paragraph stated, you may often hear the term ‘technology’ when choosing an IT system.

2) Soft vs. Hard Metrics:
There are distinct differences in KPI’s. Some metrics involve hard metrics like a customer’s lifetime revenue or actual marketing costs, while others are soft metrics such as client satisfaction levels or sales force productivity. Both measurements should be quantifiable and captured in the CRM application so you can get a clear understanding of how effective your CRM implementation is. A successful implementation should involve understanding your business pains, leveraging technology to automate those business pains, analyzing the business and helping people to be successful in the business.

3) Client Communication Channels:
After you get a clear understanding of your customer’s purchases, locations, and CRM activities, it is then best to understand how those customers interact with you. This helps two things, builds customer loyalty since your customers can do business with you when, where and how they feel comfortable doing business with you, and second, it will enable you to put your customer facing agents at the best, most cost effective place for your to do business with them.

4) Email, Phone, Web or Self-Service

5) Voice Enabled CRM:
As stated before an important part in any CRM initiative is client communication through various client touch points. One of the most important touch points is the phone. Even with the increase in email, web and self-service usage, the phone is still commonly the most used communication tool. Integrating your CRM system with your voice systems helps lower costs and improves client relations and satisfaction. With available Voice over IP (VoIP) technology, you can drastically cut costs since calls are made over your existing internet / communication infrastructure and you may no longer be required to pay per minute.

7) Drive Sales Effectiveness:
Sales Force Automation (SFA) tools of a CRM implementation can improve efficiency and effectiveness of your sales team by helping sales track client activities, manage customer communications, or maintain a consistent selling approach.

8) Sales Coaching: Guided Selling Tool:
Your CRM system can be used as a sales coach. Sales methodologies and systematic processes can improve your sales agents selling capability and can be implemented directly into your CRM application. Any relevant task, meeting or sales activity within each selling stage can automatically be exposed to the end user so they retain key steps in the selling process, ultimately allowing for better management of the entire selling process.

9) Build the Team:
Gaining buyoff from top to bottom within your organization is important. Even though not all of your teams sign the check for a CRM initiative, securing stakeholder engagement from each division is important.

Here are seven steps you can take to ensure you retain existing customers, even as you attract news ones:

  1.  Improve customer service. Treat everyone as a valued customer (internal and external). It pays dividends with motivated staff and loyal customers. Loyal customers provide referrals.
  2.  Repackage your services or products to include a menu reflecting the varied needs of clients. Clients will benefit by getting greater value for money.
  3.  Offer post-sale support, e.g., free advice, instead of selling another 'solution' immediately.
  4.  Reward client loyalty –provide free reports or product samples.
  5.  Be flexible. Make it easier for clients to do business with you. Go to them, rather than having them come to you.
  6.  Provide incentives for new clients, discounts for multiple purchases.
  7.  Invest in staff training, especially in improving customer service and innovative approaches to winning new clients.

Six reasons you could be failing to attract customers

Failing to attract enough customers is worrying, but if you know why it’s happening you might be able to turn things around. Here are some reasons why customers could be going elsewhere:

1 Prices 
If your prices are perceived to be too high, then obviously they’ll drive some or all of your potential customers away. But what some business owners don’t realise is that offering prices that are too low can create the impression of low quality products or services, which can be equally off-putting. Customers are not always looking for the cheapest option. The key to price setting is knowledge of your marketing, both customers and competitors. The aim, of course, is to set optimum prices, which allow you to maximise your profits while still remaining attractive to customers.

2 Products/services
Perhaps your products or services just aren’t as attractive as they once were. Maybe your competitors’ products or services are superior to yours. Maybe yours look a little ‘old hat’. Evolution (not revolution) can be the key to longevity in business, which means you might only have to enhance or update your products. Alternatively, you might need to introduce new ones and phase out outmoded products or services. Before spending significant sums on developing a new product or service, carry out through market research.

3 Premises
This is most relevant to offline retail businesses, of course. Outdated, poorly decorated, cramped or otherwise uninviting premises can seriously deter footfall. Operating from a hard-to-reach or find location can be another reason why businesses fail to attract punters. Despite your best marketing efforts, you might not be able to attract sufficient footfall in your present location, which means you’ll have to rethink your business model or move to a better location.

Happy employees, happy clientele. A satisfied, loyal customer base doesn't exist in a vacuum. If they're coming back for more, chances are rather good that they enjoy coming face to face with someone with whom they're happy to interact. And that means satisfied and motivated employees-in effect, an ongoing form of marketing that solidifies customer loyalty with every visit. Corporate consultant Michael Brown offers a variety of strategies to help ensure that your people are ready to cement relationships with customers. For instance: 
• Let your employees know you appreciate what they're doing, both with simple gratitude and financial reward.
• Allow your employees to make decisions on their own rather than blindly following company dictum. That empowerment can help promote a commitment to do the right thing. 
• How do you know what employees value? Brown urges employers to follow employees during a typical workday to gain a sense of the issues and challenges they routinely face. 

Emphasize information, not sales pitches. An essential element of any effective marketing campaign geared to long-term customers is a focus on information, not overt sales blather. For instance, that can translate to an auto repair shop offering a checklist of things to do before taking your car on a long trip. Augment regular monthly contact with special reports that are specific to one topic, adds Skrob: "Before anyone buys from you, they have to trust you. And the first step to establish trust is to let people know that you know what you're talking about."

Role of CRM in Marketing

CRN systems allow for control on different levels and for the collection of essential information. As a result, the use of such programs provides a number of important advantages for both small and large companies.

The use of a CRM system decreases the cost of customer acquisition. The data enables companies to correctly identify their target audience and to focus all of the marketing efforts on that particular group of people.

CRM systems allow companies to provide customers with better services. The software analyzes current customer service practices and can be used to pinpoint shortcomings and areas that need improvement. Better customer service will ultimately result in a higher sales volume.

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