Relationship Marketing (MK-253)

Transcription

1 Relationship Marketing (MK-253) Prof. Suren Sista, IIM Calcutta Course Credits: 3 Faculty: Suren Sista K-308, New Academic Block; Extn. 742; suren@iimcal.ac.in Office Hours: hrs, Monday - Friday, with prior appointment via . INTRODUCTION Over the last couple of decades marketing researchers have tried to explore newer ways to aid in the understanding and interpretation of phenomena in the marketplace that would go beyond the neoclassical explation of rational economic actors exchanging goods in faceless markets. One such development is the emergence of Relationship Marketing. Relationship Marketing considers the complex mix of both economic and social factors that influence our actions to try and explain how firms and actors behave in markets. In both B2B and B2C situations, firms are able to attract customers but have not necessarily been equally successful in retaining them. Customer Relationship Management (CRM), with its various tools is the way which Relationship Marketing manifests itself in practise, is aimed at winning and retaining customers profitably. It also helps businesses shift from a short-term transaction based mode of operation in their interactions with customers to a long-term relationship mode. The goal of this course is to provide an understanding of marketing in relational exchanges. The following are the objectives of this course: To offer an understanding of the nature of business relationships and the domain of Relationship Marketing, To integrate an understanding of concepts and issues that are under the purview of Relationship Marketing and are dealt with in the practice of CRM such as customer value, customer satisfaction, customer expectation, customer delight, memorable buying experience, Customer Lifetime Value, customer profitability, measurement of the RM effort etc., COURSE FORMAT Students are expected to come to class prepared to discuss assigned readings and cases. You are encouraged to raise issues in class unresolved from assigned readings. Lectures will highlight and clarify important principles from the readings. Class discussion will revolve around application of theory and principles to real-world business problems. The emphasis in these discussions will be on multi-way interaction. The spirit of all discussion should be constructive, to foster learning. Learning in the class will primarily happen though discussions amongst the participants (that includes the instructor) and not necessarily through lecture by the instructor. Thus, it becomes everybody s responsibility to get into constructive dialogue and not just look at the instructor as provider of solutions.from time to time, individual students may be called upon to discuss points in the text or in a case. Your performance when called upon has a bearing on the class participation component of your grade. Apart from the classes a major component of the learning process is the course project wherein students are expected to learn by doing. A brief description of this component follows in a subsequent section of this document. Case Discussion Learning through case analysis is an integral part of the course. The objectives of case analysis is to help students increase their ability to effectively reason when dealing with specific problems encountered in a business environment as simulated in the cases. Students are expected to articulate their analysis in a precise and convincing manner, both during class discussions, and when called upon to present. Exposure to analysis by others should provide students with an understanding of the many and often different interpretations of the facts and events in a case,

2 and therefore appreciate the complexities with which management decisions are reached. Please note that the focus is on the use of cases as vehicles to understand marketing theory and practice and on the decision making process while trying to arrive at the solution and NOT just the solution. COURSE MATERIAL The prescribed textbook for this course is: G Shainesh G and Jagadish N Sheth (2006), Customer Relationship Management: A Strategic Perspective, MacMillan Publishers India Ltd., New Delhi. In addition to the prescribed textbook, readings and cases have been provided from other sources, as mentioned in the course outline. Readings and cases from the course-pack (and textbook) form the basic content for the course. Other relevant material may be shared from time to time through Courseweb or through hard-copy documents if an electronic format of the material is not available. Students are encouraged to refer any books and articles on the subject from the library or an equivalent resource from time to time as required. Some interesting articles on the subject are listed in this outline over and above the readings in the coursepack for those who are interested in reading beyond the compulsory readings in the course and understanding the field of Relationship Marketing in more depth. COURSE EVALUATION Student evaluation for this course will have the following components: 1) Class Participation 20% 2) In-class Quizzes 30% 3) Assignments 25% 4) Project 25% Class Participation As already mentioned, class discussion will revolve around application of theory and principles to real-world business problems. These real-world problems include prescribed cases, short cases, articles, examples etc. In general, positive contribution to class learning through discussion and constructive dialogue will help fetch higher marks towards this component of your grade. This component is graded separately for each individual and therefore individual students may be called upon during class to discuss points in the text, article, or in a case. Your performance when called upon will have a bearing on this component. In-class Quizzes Quizzes are an important component of the course, and are graded separately for each individual. The specifics of this component will be discussed in the first session of the course. Assignments Assignments will be based on the cases in the course. a) Each group must submit analyses for two cases during the term. Each analysis will carry 10 percentage points towards the overall grade in the course. Case submissions should be made as a.ppt/.pptx file. b) The first of these two cases will be assigned to the group through random allocation. c) The second of the two cases will be chosen by each group as per its choice from the list of cases that are assigned to other groups. d) In addition each group will be asked to present a part of their analysis for the assigned case. This presentation will carry 5 percentage points towards the overall grade in the course. Project The course project is an opportunity for student groups to learn by doing. Groups must identify an organisation which is practicing some form of CRM. They must work with the organization to understand the objectives, strategy, structure and process of relationship management, identifying key issues the organization faced in implementation especially related to financial and marketing evaluation of the program. This would also include interviewing some relationship customers of this organisation to understand the customer perspective.

3 COURSE STRUCTURE: The course will be spread over 20 classroom sessions. Each classroom session will be a combination of various components - lectures, in-class activities (case discussions, discussion on relevant articles, etc.) Given the nature of the subject, the stress on a particular component may differ in different sessions, with some components being absent in certain sessions. The details of each classroom session is given below. Coverage The course is divided into four modules - Module 1 - Concepts Module 2 - Applications in Consumer and Business Markets Module 3 - Tools, Techniques and Technologies Module 4 - Implementation Module 1 (Sessions 1-5): The Concept of Relationship Marketing This module focuses on the conceptual and theoretical foundations of Relationship Marketing. A number of theoretical perspectives developed in economics, law and social psychology are being used in Relationship Marketing. These include transaction cost analysis, agency theory, relational contracting, social exchange theory, network theory, game theory and interorganizational exchange behavior. Resource allocation and resource dependency perspectives and classical psychological and consumer behavior theories have also been used to explain why organizations and consumers engage in relational behavior. An overview of these theories will help develop insights on Relationship Marketing from multiple perspectives. Topics covered include Evolution of customer relationships Benefits of managing relationships Transaction vs. Relationship orientation Relationship building as a process The ladder of loyalty Bonding for customer relationship Zero Customer Defections Market share vs. share of customer Lifetime value of customers MODULE 1 Session 1 Day & date to be announced Topic Introduction to Relationship Marketing Readings Chapter 1 of Textbook Session 2 Day & date to be announced Topic Conceptual Foundations Readings 1. Chapter 2 of Textbook Session 3 Day & date to be announced Topic Building Customer Relationships Readings 1. Chapter 3 of Textbook Session 4 Day & date to be announced Topic Economics of CRM - I Readings 1. Chapter 4 of Textbook Session 5 Day & date to be announced Topic Economics of CRM II Readings 1. Chapter 4 of Textbook

4 Additional Recommended Readings (Suggested NOT part of the course pack) 1. Roland Rust, Valarie A. Zeithaml,and Katherine N. Lemon (2004), Customer-Centered Brand Management, Harvard Business Review, September, pp Parvatiyar, A and Sheth, J.N. (2001), Conceptual Framework of Customer Relationship in Customer Relationship Management Emerging Concepts, Tools and Applications, Sheth, J.N., Parvatiyar, A. and Shainesh, G., Eds., New Delhi: Tata McGraw Hill, pp Fournier, S, Dobscha, S, and Mick, D. G. 'Preventing the Premature Death of Relationship Marketing', Harvard Business Review, January - February 1998, pp Payne, A., 'Relationship Marketing : A Broadened View of Marketing', in Adrian Payne (Ed.), Advances in Relationship Marketing, Kogan Page, 1997, pp Juttner, U. and Wehrli, H. P., 'Relationship Marketing from a Value System Perspective', in Adrian Payne (Ed.), Advances in Relationship Marketing, Kogan Page, 1997, pp Wilson, DT (1995), An Integrated Model of Buyer-Seller Relationships, Journal of Academy of Marketing Science, Vol. 23, Issue 4, pp Iacobucci, D, and Hibbard JD (1999), Toward An Encompassing Theory of Business Marketing Relationships (BMRS) and Interpersonal Commercial Relationships (ICRS): An Empirical Generalization, Journal of Interactive Marketing, Vol. 13, Issue 3 (Summer), pp Morgan, RM, and Hunt, SD (1994), The Commitment-Trust Theory of Relationship Marketing, Journal of Marketing, Vol. 58, (July), pp Module 2 (Sessions 6-10): Application in Consumer and Business Markets This module focuses on applications and practices of CRM in different business contexts. CRM has been applied in consumer and business markets covering goods as well as the services sector. Rewards / loyalty programs are the most visible aspect of of CRM in consumer markets while CRM manifests itself as Key Account Management (KAM) in business markets. Marketers in the services businesses have been pioneers in adopting CRM. Review of the concepts and practices of service quality, service recovery and service guarantees will be done in this module. CRM practices in telecom, hospitality, retail and airlines and in the durables and automobile markets will be highlighted through select cases. In addition to KAM, the concept and practice of Customer value management (CVM) will be covered. MODULE 2 Session 6 Day & date to be announced Topic Consumer Markets I Readings 1. Chapter 5 of Textbook Session 7 Day & date to be announced Topic Consumer Markets II Readings 1. Chapter 5 of Textbook Session 8 Day & date to be announced Topic Business Markets I Readings 1. Chapter 6 of Textbook Session 9 Day & date to be announced Topic Business Markets II Readings 1. Chapter 6 of Textbook

5 Session 10 Day & date to be announced Topic Business Markets III Readings 1. Chapter 4 of Textbook Additional Recommended Readings (Suggested NOT part of the course pack) 1. Shainesh, G. (2012), Effects of Trustworthiness and Trust on Loyalty Intentions: Validating a Parsimonious Model in Banking, International Journal of Bank Marketing, Vol. 30, Iss: Shainesh, G., and Ramneesh, M., (2000), 'Status of Customer Relationship Management in India - A Survey of Service Firms', in Customer Relationship Management Emerging Concepts, Tools and Applications (2000), Sheth, J.N., Parvatiyar, A. and Shainesh, G., (Eds.), New Delhi: Tata McGraw Hill. 3. Millman, T.,'Key Account Management in Business -to-business Markets', in Adrian Payne (Ed.), Advances in Relationship Marketing, Kogan Page, 1997, pp Reinartz and V. Kumar (2003), The Mismanagement of Customer Loyalty, Harvard Business Review, 80 (July) Uncles, Mark D., Grahame R. Dowling, and Kathy Hammond (2003), Customer Loyalty and Customer Loyalty Programs, Journal of Consumer Marketing, 20 (4/5), Varadarajan, RP, and Cunningham, MH (1995), Strategic Alliances: A Synthesis of Conptual Foundations, Journal of the Academy of Marketing Science, Vol. 23, Issue 4, pp Sheth, JN, and Parvatiyar, A (1992), Towards a Theory of Business Alliance Formation, Scandinavian International Business Review, Vol. 1, No. 3, pp Cespedes, FV (1989) Managing Major Accounts, HBS Note 9. Corey, ER (1989), Industrial Distribution Systems, HBS Note 10. Rangan, VK (1994) Reorienting Channels of Distribution, HBS Note 11. Anderson, JC, and Narus, J (1998) Business Marketing: Understand What Customers Value, Harvard Business Review, Vol. 76, Issue 6, pp Parasuraman, A, Berry, LL, Zeithaml, VA (1991) Understanding Customer Expectations of Service, Sloan Management Review, Vol. 32, Issue 3, pp Sheth, JN, and Mittal, B (1996) A Framework for Managing Customer Expectation, Journal of Market Focused Management, Vol 1, 1996, pp Ofek, E (2002) Customer Profitability and Lifetime Value, HBS Note. 15. Peppers, D, Rogers, M, and Dorf, B (1999) Is Your Company Ready for One-to-One Marketing? Harvard Business Review, Vol. 77, Issue 1, pp Module 3 (Sessions 11-15): Tools, Techniques and Technologies Information and communication technologies have played a key role in the rapid adoption of CRM by businesses. These technologies, many of them developed in the last decade, have helped in automating the customer facing functions of sales, marketing and service. An overview of the components of ecrm Solutions help understand the technologies which enable an organization to get a single unified view of its customers across various points of contact. A balanced approach of CRM combines both operational and the analytical technologies. Data warehouseing and data mining form the support base for both operational as well as analytical CRM. The role of datawarehousing and datamining tools and applications are highlighted to help appreciate the analytical aspects of CRM. Coverage includes the three main components of comprehensive CRM solutions include Campaign Management, Sales Force Automation, and Customer Service and Support. The functionalities and applications of a few popular CRM products targeted at large enterprises (Siebel, SAPCRM) and a few targeted at the small and medium enterprises (SalesLogix, Microsoft CRM) will be covered. An overview of the emerging hosted CRM products (Salesforce.com) is also provided. Finally the role of contact centers in building customer relationship is highlighted. Topics include: Sales Force Automation

6 Customer Service and Support Marketing (Campaign Management) Datawarehouse & datamining Evaluating technological solutions for CRM Role of a contact center in building relationships Components of a contact center Economics of a contact center MODULE 3 Session 11 Day & date to be announced Topic Components of ecrm Solutions - I Readings Chapter 7 of Textbook Session 12 Day & date to be announced Topic Components of ecrm Solutions - II Readings 1. Chapter 7 of Textbook Session 13 Day & date to be announced Topic Product Offerings in the CRM Market Space Readings Chapter 8 of Textbook Session 14 Day & date to be announced Topic Contact Centres for CRM - I Readings Chapter 9 of Textbook Session 15 Day & date to be announced Topic Contact Centres for CRM - II Readings 1. Chapter 9 of Textbook Additional Recommended Readings (Suggested NOT part of the course pack) Zeithaml, Valarie A., Roland T. Rust, and Katherine N. Lemon (2001), The Customer Pyramid: Creating and Serving Profitable Customers, California Management Review, 44 (Summer), Shoemaker, Mary E. (2002), A Framework for Examining IT Enabled Market Relationships, Journal of Personal Selling and Sales Management, 21 (Spring), Harrison-Walker L. Jean and Sue E. Neeley (2004), Customer Relationship Building on the Internet in B2B Marketing: A Proposed Typology, Journal of Marketing Theory and Practice, 12 (Winter), Reinartz, Werner J. and V. Kumar (2000), On the Profitability of Long-Life Customers in a Noncontractual Setting: An Empirical Investigation and Implications for Marketing, Journal of Marketing, 64 (October), Rust, Roland T., Valarie A. Zeithaml, and Katherine N. Lemon (2004), Customer- Centered Brand Management, Harvard Business Review, 81 (September), Module 4 (Sessions 16-20): Implementation The last module will focus on issues related to CRM implementation. The organizational challenges of implementing CRM is underscored by the high levels of failures in implementing technology intensive CRM solutions. This module adopts a process oriented view of CRM implementation. Topics include: The CRM Roadmap Defining a CRM strategy Developing a relationship orientation Internal marketing Budgeting for Attraction vs. Retention Learning from Customer Defections

7 Evaluating Retention Programs MODULE 4 Session 16 Day & date to be announced Topic The CRM Roadmap - I Readings 1. Chapter 10 of Textbook Session 17 Day & date to be announced Topic The CRM Roadmap - II Readings 1. Chapter 10 of Textbook Session 18 Day & date to be announced Topic Operational Issues in Implementation Readings Chapter 8 of Textbook Session 19 Day & date to be announced Topic Contact Centres for CRM - I Readings Chapter 9 of Textbook Session 20 Day & date to be announced Topic Implementing CRM & Course-wrap Up Readings The ICICI Experience (Pages of Textbook) Class Activity Readings Based Discussion Additional Recommended Readings (Suggested NOT part of the course pack) Mookerjee, A. and Shainesh, G., (2000), 'Developing Measures for the Service Quality and Relationship Strength Determinants of Customer Loyalty', in Raghavachari, M. and Ramani, K. V., Delivering Service Quality : Managerial Challenges for the 21st Century, Macmillan India Ltd.: New Delhi, pp Reichheld, F. F., 'Learning From Defections', Harvard Business Review, March-April 1996, pp Rust, Roland T., Katherine N. Lemon, and Valarie A. Zeithaml, Return on Marketing: Using Customer Equity to Focus Marketing Strategy, Journal of Marketing, 68 (January), Timothy L. Keiningham, Bruce Cooil, Tor Wallin Andreassen, & Lerzan Aksoy (2007), A Longitudinal Examination of Net Promoter and Firm Revenue Growth, Journal of Marketing, Vol. 71, July,, Thomas, Jacquelyn S., Werner Reinartz, and V. Kumar (2004), Getting the Most out of All Your Customers, Harvard Business Review, 81 (July-August), EXPECTATIONS, GUIDELINES & PRACTICES: Listed below are the expectations of participants, and some general guidelines and practices to be followed for this course. These may be added to or modified during the course to enable smooth conduct of the course. 1) It is expected that students will, a. read all prescribed material for a session, b. be prepared for and contribute positively to all in-class activities, c. contribute positively to their group in all group activities, d. be honest during quizzes and exams and submit original work for all submissions, whether these are individual or group submissions, e. maintain a minimum acceptable level of decorum expected of students of an institute of IIM Calcutta s standing and stature, f. keep all electronic devices switched off during class (laptops may be allowed in class only for certain sessions, which will be informed in advance so students may bring their laptops to those sessions), and g. follow all rules laid down by the institute for the conduct of the PGDM/PGDCM

8 programmes. 2) In the event of academic misdemeanor, malpractice, or misconduct; including submitting plagiarised, purchased, contracted, falsified assignment, submission, or project, and cheating in a quiz or the exam; the rules as per the IIMC PGP Manual will apply. The minimal penalty will be a grade of zero on that particular submitted material, quiz, or exam. (A note on plagiarism will be circulated among students at the start of the course.) 3) All students with disabilities may please approach the instructor through the PGP Office about any accomodations that they may require. The instructor will make all permissible accomodations with the help of the PGP Office.