The Industrial Marketing and Purchasing - Case Study Example

Customer Relationship Management Student’s Name: Instructor’s Name: Course Code: Date of Submission: Executive Summary The aim of this report was to investigate into the concept of customer relationship management and present a detailed document showing how Toyota Motor Corporation can pursue its relationships with its customers. In the process the report, it’s has been established that the company was first established in 1937 and is headquartered in Japan. Customer Relationship Management is about integrating the organizational functions, the customers and technology. The five main relationship management theories that have been applied in this report include the Nordic School, the Anglo Australian approach, the Industrial Marketing and Purchasing (IMP) School, the North American School and the Asian (guanxi) school. Further, the five management relationship theories propose different approaches to customer relationship management. However, most important in this report, is that three identified markets namely China, USA and Australia present totally different business contexts which call for different approaches to customer relationship management (Kotler and Kellerm 2006). The report has been wound up posing several recommendations that could be applied to Toyota Motor Company to improve on its customer relations with the three identified markets. Table of Contents Executive Summary 2 Table of Contents 3 1.0 Introduction 4 1.1 Background Information 4 1.2 Aims 5 2.0 Relationship Management Theories 5 2.1 The Industrial Marketing and Purchasing (IMP) School 5 2.2 The Nordic School 6 2.3 The Anglo-Australian approach 6 2.4 The North American School 6 2.5 Asian (guanxi) school) 7 3.0 Applying CRM Theories 7 China 7 USA 8 Australia 8 4.0 Recommendations 8 China 8 USA 8 Australia 9 5.0 Summary 9 References 10 1.0 Introduction Despite the major steps businesses are making in realizing their goals, it is still clear that a customer is the core focus of any business. This is because sustainability of the business is greatly depended on the customer base it enjoys and the ability to serve customer needs in more efficient and satisfactorily way. To be in a better a position to meet the customer demands, it starts with understanding the customer in terms of values, beliefs and preferences. It is from this ground that customer relationship management (CSR) is coming into perspective. CRM is founded on the ability of the business to establish and sustain good relationships with its customers. In trying to manage relationships with customers, database about the company is very necessary to help both the company and the customer access important information. In general CRM is used by the business to identify its targets, market campaigns and generation of important business leads. To illustrate how CRM works, the Toyota Motor Corporation of Japan will be used. 1.1 Background Information The Toyota Motor Corporation was established in 1937 in Japan when the 2 Millionth Prius got sold. The company is the leading manufacturer and seller of cars in the world. For example in the year 2011, the company managed to manufacture 7,267,535 cars. The company is headed by Fuji Cho who is the company board chairman. Toyota Motor is globally recognized brand and this is because of its vision and philosophy which is to manufacture and sell to its customers, reliable vehicles while making sure that sustainable development achieved for the society by applying high and very innovative methods to offer quality products and services to the market (Toyota Motor Corporation 2012). The Toyota Motor Corporation is basically engaged in automobile businesses and to some extent financial services. Company products include cars, minivans and trucks. The company services also include leasing of vehicles and other equipment. The company to some level is also engaged in designing, manufacturing and selling of housing apart from offering and other communication about the business (Reuters edition 2012). 1.2 Aims i. First and foremost, this paper is aimed at discussing extensively the concept of customer relationship management using appropriate theories. ii. Investigating into the customer relationship management theories in the United States, Australia and China. iii. Try and identify those activities that the company will engage in, in order to establish ways of improving CRM with its customers in these three countries. iv. Provide specific recommendation that will improve the CRM in the three identified markets. 2.0 Relationship Management Theories Customer relationship management is defined as the process of getting various functions of the business, the customers and the technology to work together as an integrated system in order to enhance and maximize on the existing relations. Different relationship management theories have been brought forward to explain the concept of CRM and how it applies in various contexts. The commonly used relationship management theories include: the Industrial Marketing and Purchasing (IMP) School, the Anglo-Australian School, the North American school, the Asian (guanxi) school and the Nordic School (Patterson et al 2006). 2.1 The Industrial Marketing and Purchasing (IMP) School The IMP School of relationship management is used to refer to a situation where the relationships that exist on two entities are business to business. This relationship management theory is important in defining and constructing relationships that exist between businesses. In this case the interaction and relationships only exist between organizations. The existing relationships may between two or many individuals and that the relationships can be multiple and they involve suppliers, buyers and to greater extent firms that complete the relationship network (Cuthbertson and Laine 2004). 2.2 The Nordic School This relationship management theory was conceived in the 1980s through a service marketing research. This theory is characterized by its ideas which are associated with traditional marketing practices. The theory stresses on the importance of ensuring relevance and importance of service marketing rather marketing customer goods. The theory further stresses that good relationship management is likely to be possible where the organization has moved from putting a lot of emphasis on products and services to customer value. According to this theory management of services is always at core of business rather than just engaging in production of goods and services (Kotler and Keller 2006). 2.3 The Anglo-Australian approach This theory is the work of Christopher and Payner. The theory places more emphasis on ensuring proper integration of quality management and services marketing ideas together with other customer related relationships economics (Winer 2004). From this ground therefore, relationship marketing entails relationship approach to marketing rather than transactional, and also understands and importance attached to customer retention and the importance of ensuring adequate funds and other resources are allocated to ensure retention and attraction of customers. The theory also recognizes the importance of attaining internal marketing before succeeding in external marketing. This is because internal principles can be extended to attain external success (Kotler and Keller 2006). 2.4 The North American School This theory places more emphasis on managing a customer database where information about the customer can easily be accessed. This management relationship theory is important in identifying various customers to the business and the company targets. This idea is founded on the use of new technology to ensure continuous flow of information between the business and its customers (Peelen 2005). 2.5 Asian (guanxi) school) This management relationship is founded from the Chinese context and the Guanxi is a Chinese term that has been used to describe the relationship that exists among individuals from different contexts. The theory explains that the relationship that exists between two or more parties is because of the psychological contract that binds them. According to this theory, it’s believed that the relationships can be sustained and maintained for a longer time if there is mutual commitment and loyalty as well as obligation for every individual to perform. In other words, the relationship is kind of social and is based on the community norms (Winer 2004). 3.0 Applying CRM Theories The three countries have totally different business and cultural context and all of which require special attention when trying to do business and maintain good customer relationship. This report will tackle each case as independent and the activities that have to be committed differently identified. China Most and very important to note is that in China relationships are very formal and that when engaging in business relationships everything has to be done in a professional way. Further, establishing an intermediary in China is considered important especially in advising on matters related to bureaucracy and regal systems. As a director of CRM, I believe that by understanding this business cultural context in China, the Asian (guanxi) school is a very important to our company. This is because for our company to penetrate into the Chinese market, first, the company will have to demonstrate highly professionalized dealings and second, the establishment of an intermediary office in China to help build relationships between the company and its customers (Winer 2004). USA Unlike the business culture in China, in the US, companies are known to be independent and that they have their own rights and that its members come and leave at will. This is to imply that the relationship that exists between individuals is only transactional and once the deal is completed, the relationship is assumed to have ended. In reference to our company, this kind of context, the company is presented with the opportunity of identifying and satisfying only those customers with the need. The Anglo American Approach is important in this case as it provides way for maintaining a customer database to access important information. As a director of CRM I believe doing online business will most fit our business (Kumar and Reinartz 2006). Australia In Australia the business culture and structures are also different with some similarity to those of the United States. The culture of business in Australia is characterized by egalitarianism. This is to mean that people do not give the impression that they are somebody but behave as ‘good bloke’ or as a ‘good mate’ rather than somebody so proud of an achievement. The companies in Australia are also believed to be fairly non-hierarchical with organizational status attached to achievement and not position. To our company, this implies that as we seek to establish good relationships in Australia, the company needs to humble itself and apply the Anglo Australian approach to manage its quality of products and services as well as customer ideas (Abbott et al 2001). 4.0 Recommendations China i. Market research and more especially on what is considered be the business social norms ii. Establishment of the office of the intermediary in the country in order to create a link between the company and its new clients USA i. Market segmentation and targeting ii. Use of internet to help transact business with its customers iii. Introduction of a customer database Australia i. Integration of quality management with customer service ii. Moving away from product and service marketing to customer service management 5.0 Summary The primary aim of this report was to try and find out ways in which the Toyota Motor Corporation with reference to management relationship theories to establish ways in which to do things differently to improve on its customer relationship management. This report has managed to discuss various management relationship theories and thereby giving recommendations on how they can help the company work its businesses relationships in China, USA and Australia. This is after it had emerged that three markets present totally different business cultures and contexts. References Abbott, J Stone, M and Buttle, F 2001, “Customer Relationship Management in Practice A qualitative study”, Journal of Database Marketing, 9(1), p. 24-34. Cuthbertson, R and Laine, A 2004, “The Role of CRM within Retail Loyalty Marketing”, Journal of Targeting, Measurement and Analysis for Marketing, 12(3), p. 290- 304. Kumar, C and Reinartz, W 2006, Customer Relationship Management: A Database Approach. New York: John Wiley. Kotler, P and Keller, LK 2006, Marketing Management, 12th ed, Pearson Education International. Patterson, P Cowley, E and Prasongsukarn, K 2006, “Service failure recovery: The moderating impact of individual-level cultural value orientation on perceptions of justice”, International Journal of Research in Marketing, 23(3), p. 263-277. Peelen, E 2005, Customer Relationship Management, Prentice Hall, UK. Reuters edition 2012, Toyota Motor Corporation: Overview, retrieved 19th July 2012 from http://www.reuters.com/finance/stocks/companyProfile?symbol=TM Toyota Motor Corporation 2012, Globalizing and Localizing Manufacturing, retrieved 19th July 2012 from http://www.toyota- global.com/company/vision_philosophy/globalizing_and_localizing_manufactur ing/ Winer, S.R. 2004, “A Framework for Customer Relationship Management”, California Management Review, 43(4), p. 89-105 Read More