Customer Relationship

Management

Understanding CRM and Its Role in Modern Marketing

 Introduction to CRM
•Definition: Strategies and technologies for
managing customer relationships.
•Objective: Build long-term relationships,
enhance customer satisfaction, and drive
revenue.
•Scope: From traditional CRM to e-CRM
advancements.
 Need for CRM
•Enhanced customer experience.
•Data-driven decision-making.
•Improved operational efficiency.
•Increased customer retention and loyalty.
•Streamlined communication across channels
 Importance of CRM
•For Businesses:
•Better sales forecasting.
•Efficient resource allocation.
•Competitive advantage.
•For Customers:
•Personalized services.
•Faster problem resolution.
•Trust and loyalty development.
Effective CRM Strategies

•Understand customer needs through data.

•Personalization at scale.
•Consistent multi-channel communication.
•Integration of customer feedback.
•Proactive customer engagement.
 Customer Lifetime Value (CLV)
•Definition: Total revenue generated from a customer during their relationship.
•Significance: Helps identify high-value customers for focused marketing.
•Key Metrics:
•Average order value.
•Purchase frequency.
•Retention rate
Customer Life Cycle

1.Stages: Awareness: Brand discovery.

2.Acquisition: First-time purchase.
3.Engagement: Interaction with the brand.
4.Retention: Continued purchases.
5.Advocacy: Recommending the brand.
 Globalization: Understanding Its
Role in Business

Globalization is the process by which businesses, cultures, and economies integrate through cross-border trade,
investments, information exchange, and technology. It creates a global marketplace where goods, services, and ideas
transcend national boundaries.
 Key Features:

•Trade Liberalization: Reduction of tariffs and barriers to trade.

•Technological Advancement: The internet, communication tools, and transportation innovations.
•Cultural Exchange: Cross-cultural interactions influencing consumer behavior.
•Global Value Chains: Interconnected production processes across countries.
 Advantages for Businesses

•Access to New Markets: Reach global consumers, expanding revenue potential.

•Cost Efficiency: Outsourcing and offshoring to reduce production costs.
•Innovation: Exposure to global ideas and technologies fosters creativity.
•Diverse Talent Pool: Collaboration with professionals from around the globe.
 Challenges for Businesses:

•Cultural Sensitivity: Adapting products and services to local preferences.

•Increased Competition: Competing with global and local players.
•Regulatory Differences: Complying with international laws and standards.
•Economic Vulnerabilities: Dependence on global markets increases exposure to crises.
Stages of International Expansion
1. Domestic Market Focus
Companies focus solely on their home market, perfecting products and building a strong domestic
presence before considering international opportunities.
•Example: Patanjali Ayurved (India)
• Initially concentrated on the Indian market, leveraging traditional Ayurvedic products and
creating a loyal customer base.
• Focused on regional marketing strategies and direct distribution channels to dominate local
markets.
2. Exporting
Companies sell their products or services to foreign markets while keeping production facilities domestic.
It’s a low-risk, low-investment strategy for international expansion.
•Example: Tata Motors
• Tata Motors exports its vehicles, including commercial and passenger cars, to markets like Africa,
the Middle East, and Southeast Asia.
• Benefits: Gained international exposure with minimal investment in foreign facilities.
•Example: L'Oréal
• Started exporting its beauty products to various countries while retaining production in France.
• Key Strategy: Emphasized its “French beauty” branding, appealing to international luxury markets.
3. Licensing and Franchising
Companies allow foreign entities to use their brand name, products, or services in exchange for fees or royalties.
•Example: Disney
• Licenses its characters and stories to foreign theme park operators, such as Tokyo Disneyland.
• Strategy: Leverages local expertise while maintaining brand control.
•Example: McDonald’s
• Operates through franchises globally. Local franchisees adapt menus (e.g., vegetarian offerings in India)
while adhering to global standards for quality and service.
• Impact: Rapid expansion with reduced operational risks
4. Strategic Alliances
Companies partner with foreign businesses to share resources, knowledge, and risks while entering new markets.
•Example: Spotify and Uber
• Spotify partnered with Uber to allow riders to stream their playlists during rides.
• Strategy: Combined strengths to improve user experiences globally without direct investment in the other’s
industry.
•Example: Starbucks and PepsiCo
• Starbucks partnered with PepsiCo to distribute its bottled coffee drinks internationally.
• Impact: PepsiCo’s distribution network accelerated Starbucks’ entry into global retail markets.
5. Joint Ventures
Two or more companies from different regions collaborate to form a new entity, combining
resources and market expertise.
•Example: Starbucks and Tata Global Beverages (India)
•Joint venture to launch Starbucks outlets in India.
•Tata provided market knowledge and supply chain capabilities, while Starbucks brought its global brand
reputation.
•Result: Successful positioning as a premium coffee chain in a culturally diverse market.
•Example: Sony Ericsson
•A partnership between Sony (Japan) and Ericsson (Sweden) to combine Sony’s consumer electronics
expertise with Ericsson’s telecommunications technology.
•Impact: Created a strong foothold in the global mobile phone market.
6. Foreign Direct Investment (FDI)
Companies establish or acquire production facilities, offices, or subsidiaries in foreign markets, taking full
ownership of operations.
•Example: Hyundai in India
• Hyundai set up a manufacturing plant in Chennai, catering to the Indian market with cars specifically
designed for local preferences (e.g., Hyundai Santro and Creta).
• Impact: Became one of India’s leading car manufacturers with a localized supply chain.
•Example: Apple in China
• Apple invests in manufacturing facilities in China through partnerships with companies like Foxconn.
• Strategy: Utilizes China’s skilled labor and cost advantages while maintaining control over quality and
production.
7. Global Operations
At this stage, companies operate seamlessly across borders with standardized products, centralized control,
and a unified global brand.
•Example: Coca-Cola
• Coca-Cola follows a “Think Global, Act Local” approach:
• Core branding remains global, but flavors and marketing campaigns are customized for local
preferences (e.g., smaller bottle sizes in developing countries).
• Impact: A strong presence in over 200 countries.
•Example: Unilever
• Unilever operates with a global-local approach, standardizing brands like Dove and Lipton while
customizing others like Surf Excel for local markets.
• Strategy: Tailors marketing and product offerings to cultural nuances while maintaining a global
operational framework.
 Impact of Globalization

1. Distance and Logistics

Explanation: Globalization allows companies to access distant markets, but logistical challenges like
transportation delays, supply chain inefficiencies, and cost escalations remain critical issues.
Case Study: Amazon’s Global Supply Chain
•Problem: Managing fast delivery across continents while maintaining cost efficiency.
•Solution: Amazon established strategically located fulfillment centers worldwide and leveraged cutting-edge
technology like drones, robotics, and AI to optimize operations.
•Impact: Amazon’s Prime delivery model redefined consumer expectations, setting a global benchmark for e-
commerce logistics.
2. Power and Decision-Making
Explanation: Organizations must decide between centralized and decentralized decision-making when managing
international operations. Centralized structures ensure consistency, while decentralized models offer flexibility for
local adaptations.
Case Study: Unilever’s Decentralized Strategy
•Approach: Unilever allows local managers to tailor product offerings and marketing campaigns. For example, the
detergent brand Surf Excel is marketed as "Dirt is Good" in India to resonate with local cultural values.
•Impact: This approach helped Unilever adapt its products to regional needs while maintaining global operational
efficiency.
3. People Management
Explanation: Global teams require effective people management strategies that respect cultural diversity, ensure
inclusivity, and address different work ethics and leadership expectations.
Case Study: Google’s Global Workforce
•Challenge: Managing diverse teams across continents with differing cultural and professional norms.
•Solution: Google implemented cross-cultural training programs and flexible work policies, encouraging collaboration
and innovation.
•Impact: Google became a leading global employer, recognized for fostering inclusivity and creativity across its
workforce.
4. Delegation and Local Autonomy
Explanation: Delegating authority to local teams enables businesses to respond quickly to market changes and cultural
nuances.
Case Study: Coca-Cola’s "Think Global, Act Local" Strategy
•Approach: Coca-Cola delegates significant decision-making power to local offices. For example, in Japan, Coca-Cola
introduced vending machines offering hot and cold beverages to cater to local consumer habits.
•Impact: This strategy allowed Coca-Cola to remain competitive in diverse markets while leveraging global branding.
5. Corruption and Compliance
Explanation: Operating in multiple countries exposes businesses to corruption and regulatory discrepancies. Global
firms must adopt strict compliance frameworks to maintain ethical standards.
Case Study: Siemens’ Anti-Corruption Reform
•Challenge: Siemens faced bribery scandals in the early 2000s across several countries.
•Solution: The company implemented robust compliance programs, including a zero-tolerance policy for corruption,
and invested in transparency initiatives.
•Impact: Siemens restored its global reputation and set industry standards for ethical business practices.
6. Quality Benchmarks and Standards
Explanation: Maintaining consistent quality across global markets is essential for brand reputation. Many companies
adopt international quality certifications like ISO standards.
Case Study: Toyota’s Kaizen Model
•Approach: Toyota uses the Kaizen (continuous improvement) methodology and follows global standards like Six Sigma
for quality assurance.
•Impact: This focus on quality made Toyota one of the most trusted car brands globally, maintaining consistent
performance across markets.
7. Culture and Consumer Behavior
Explanation: Understanding cultural differences is vital for product design, marketing, and customer engagement.
Case Study: KFC’s Localization in China
•Approach: KFC adapted its menu to include traditional Chinese dishes like congee and spiced chicken, reflecting local
dietary habits.
•Impact: KFC became the largest fast-food chain in China, outperforming global competitors like McDonald’s.
8. Technology and Digital Transformation
Explanation: Globalization accelerates the adoption of technology, enabling businesses to operate efficiently across
borders.
Case Study: Zoom’s Role During the COVID-19 Pandemic
•Approach: Zoom expanded its cloud-based video conferencing services globally, offering localized features like
language support and regional servers for better connectivity.
•Impact: Zoom became a critical tool for global businesses, facilitating remote work and international collaboration