Free Marketing Dissertations - "customer Relationship Management (crm) Is The New For Relationship
"Customer Relationship Management (CRM) is the new title for relationship marketing". Explain why this is so, and suggest how CRM be effectively incorporated into a Marketing Plan.
Over the last few years, a number of concepts have been applied to the new customer management models emerging, via technological advancements, to create increasingly intimate relationships with their customers. Österle (2002) cited in Muther (2002) suggests that electronic commerce, supply chain management, one-on-one marketing [and] customer profiling to name a few are developments which can be attributed to the dramatic changes in the supplier-customer relationship observed. It is this amalgamation of business functions which could loosely be referred to as modern customer relationship management.
This essay seeks to explore the differences between the concepts of customer relationship management and relationship marketing, while observing the extent to which organisations have adopted the new frameworks. By looking at a range of examples, an analysis of how CRM has become an integrated part of many company marketing plans shall be observed.
Contextual Background
The era in which marketers have increasingly acknowledged the importance of customer retention has seen an evolution of related models and frameworks. Increasingly, customer retention has needed greater emphasis in company strategies due to the environmental changes occurring in many markets.
Factors such as the Internet have given consumers access to a far greater choice of products and services. Stone (2000), for example, suggests that the very technology behind CRM and in particular eCRM models (a concept which will be addressed later in this essay) have created the means for consumers to manage their suppliers as well as the intended other way around. Via the Web, customers have access to a greater number of outlets than on the high street, for instance, all of which must compete aggressively on areas such as price, service, and quality to maintain market share. East (1997) suggests that retaining customers can be less expensive than procuring new ones due to start up costs associated with new purchases (e.g. introductory offers on credit cards). Online competition has since exacerbated this situation. Hence, the importance of creating relationships at a time when this retention faces threats from greater customer choice is clear.
Customer Relationship Management (CRM) & Relationship Marketing (RM)
Academics appear to generally agree on the assertion that CRM developed from RM. It would appear that the increasingly sophisticated model of CRM is an attempt to further interact with the consumer in a way which RM failed to adequately address. Greenberg (2002) suggested that the concept of CRM emerged around 1999 at around the same time as eCRM, summarising it as customer focused, customer controlled interactivity.
Stone et al.
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