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Relationship marketing and customer relationship management have taken a central position in marketing strategy in the past two decades. A confluence of factors, including the transition to service-based economies; advances in communication, logistics, and computing technologies; increased global competition; and faster product commodization have enhanced the salience of relationship-based loyalty to sellers compared with other marketing mix factors.
Moreover, some of these trends are simultaneously increasing customers desire for the unique characteristics found in relationship-based exchanges (e.g., reduced perceived risk, higher trust, enhanced cooperation, and greater flexibility). Thus, in many situations, both sellers and customers are becoming more interested in conducting business transactions embedded within relationships.
For Dell, to use relationship marketing in their business, the primary question is, how relationship marketing must be implemented to improve customer loyalty. One of the loyalty program is setting up Dell 24/7 Call centre to continuously engage with customers through multiple channels. However, moving customer call centers offshore provides significant cost savings but also can seriously degrade customer relationships. Dells well documented experience.
Source: Relationship Marketing 3.0. (2009). Thriving in Marketings New Ecosystem. Available:
Relationship marketing investments should be allocated primarily to social and structural programs rather than financial programs. Social programs appear to generate the highest returns. Relationship marketing programs aimed at increasing communication the amount, the frequency, and the quality are especially effective early in the lifecycle, because communication is a strong driver of relationship quality and future relationship growth or relational velocity. Structural programs, such as electronic order-processing interface, customized packaging, and other policy or procedural changes, also enhance relationships between the customer and the selling firm. Structural relationship marketing programs should target highvolume, existing, or growing customers, because a larger sales volume supports implementation costs and often provides more value to customers with high-frequency interaction. In contrast, firms should minimize their proactive use of financial Relationship Marketing programs (e.g., price reductions, rebates, discounts) and instead consider these programs only as price/volume discounts or competitive responses. Most financial programs simply cannot generate positive short-term returns or build long- returns.
Further to that, fundamentals of relationship marketing put massive importance on lifecycle. This requires continues influence over the customer and clients alike. Influence markets are important to an
organization in terms of relationship marketing as members of this market include bodies that directly impact on the organization. It is therefore essential that organizations identify the main influencers to its markets in order to protect and progress core business (Cranfield School of Management 2000, p.23). This section will attempt to identify the influencers, and determine how these relationships are exploited by Dell. To ascertain the factors that affect Dell and the way that Dell conducts itself in the Influence market and the Referral Market was difficult as there was limited information to be found in terms of these markets. However, the relationships that are conducted in the Influence and Referral market are more rather implied in the sense that Dell relies on partnerships and its reputation to corner these markets. In terms of the Influence market it could be said that governments, and the computer industry, are the main factors affecting this market for Dell. For instance governments both national and international affect the influence through legislation affecting employment, interest rates, tax, and on monopoly laws. These factors affect how Dell as a company expands and conducts its business on a national and global scale. However, evidence from Dell website, it is clear that Dell is in close partnership with the U.S. government, through developing defence systems with the military and supplying the U.S. government with computers. It could be said that this partnership allows Dell a certain amount of room to maneuver in the U.S. to expand its market share.
Another factor affecting the Dell in the Influence Market is the computer industry in the sense that Dell has to keep ahead of the competition in the constantly changing industry through inspiring innovation as well as creating partnerships with other firms and its suppliers for example. In terms of the referral market Dell exploits this market through supplying businesses and education centres, such as universities and schools, as well as charitable organizations. By supplying these types of organizations Dell manages to maximize its advertising potential through exposure of its products, for example a satisfied customer will always refer and recommend a good product to their friends and will always use the same company again and again.
Also, Dell can use the effect of supplying schools and universities in the sense that students and young children if exposed to Dell products will be familiar with Dell products and may encourage parents to purchase a Dell computer. To supply charitable organizations Dell has a recycling program where customer how want to upgrade their computers can trade in their current P.C. to Dell who would then pass on to charities. Again by promoting this philanthropy Dell can reach more potential customers through being seen as an organization that is ethical and that gives back to the community in order to increase computer literacy amongst those who cannot afford a computer.