Review and analyzing of the relationships between marketing, customer relationship management and customer satisfaction

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1 International Journal of Management and Humanity Sciences. Vol., 3 (4), , 2014 Available online at ISSN X 2014 Review and analyzing of the relationships between marketing, customer relationship management and customer satisfaction 1 Mehdi Zaeimi Sakhavidi, 2 Morteza Bakhshi Nudoshan, and 3 Javad Khamisabadi* 1- M.A of Business Management, Faculty of Management, Central Tehran Branch, Islamic Azad University, Tehran, Iran 2- M.A of Financial Management, Faculty of Management, Science and Research Branch (Yazd), Islamic Azad University, Yazd, Iran 3- Member of Young Researchers and Elite Club, Islamic Azad University, Tehran, Iran *Corresponding author javad_khamisabadi@yahoo.com Abstract The importance of marketing and customer relationship management (CRM) as management concepts calls for systematic analysis of interconnections between them. We are presenting two analyses as they are perceived by managers of hi-tech organizations in the Iran: the analysis of relations between marketing and CRM, and the analysis of marketing and customer satisfaction. Keywords: Marketing, customer relationship management, customer satisfaction, marketing, CRM, high-tech organizations Introduction The customer satisfaction is recognized as the cornerstone of the functioning of the companies. Customer relationship management (CRM) and marketing are both in relation to this. CRM and marketing have been under permanent focus of both academics and practitioners in recent years. Although these fields have been analyzed since the 1980s, there is little attention paid to the interconnections between them. The purpose of this paper is to reveal the interconnections between marketing and CRM. We also want to verify a degree of relationship between marketing and customer satisfaction. We want to substantiate the findings of our research by statistical methods. This research is a part of Ph.D. thesis. Generally, the concept of CRM means organizing an active relationship with a customer / with customers. CRM aims for permanent development of long-term relationship with customers in order to create a situation of two winners ( win-win ) using a relationship strategy of what you give is what you get. It is based on the exchange of information, marketing, and actions, during value development using different strategies. (Ben and Sart, 2002) Although CRM by definition is customer-oriented, in practice the philosophy of CRM drives its positive influence to the relations with employees, suppliers and all the other interested groups (Dan et al., 2005). CRM is than considered to be an entrepreneurial strategy or philosophy (Hommerova, 2009). In this case, CRM is not only focused on customers and certainly it is not just about technology. This study is in complete agreement with such a wider understanding of CRM. Although the literature on CRM is less concerned with competition marketing compared to the literature on marketing, the CRM targeted effect is still a competitive advantage. Kohli and Jaworski include the following definition of marketing: Marketing is the organization wide generation of market intelligence pertaining to current and future customers needs, dissemination of the intelligence across departments and organizations wide responsiveness to it. (Kohli and Jaworski, 1990, p. 6) The literature today presents a number of approaches to define marketing. There are basically two branches of marketing interpretation. One interpretation defines marketing as a corporate culture. The other interpretation characterizes marketing as a specific kind of company behaviour. Narver and Slater (1990, p ) compromise marketing as follows: Marketing contains three elements of behaviour customer satisfaction, orientation on competition and interfunctional coordination (and two decision criteria long-term

2 orientation and profitability). Marketing is understood as a culture concentrating on profit generation, creation of values for customers and includes orientation on the other stakeholders (Narver and Slater, 1990). We consider it important to mention the marketing features between the marketing and CRM. Marketing and CRM have long-term focus and are not just about short-term results. Marketing, as well as CRM, is based upon the customer perception of value. Develop and keep the relationships with customers are not enough, care needs to be also given to those with other stakeholders. There is perception of ethical and marketing aspects in both concepts (Kuntze, 2008; Wessling, 2003). Marketing and CRM are considered to be a marketing factor with a positive effect on employees (Cooper et al., 2008). Organizations should support the function of technologies, aim for shared and unified interpretation of information and spread them across the company. It is necessary to use the continuous learning, observe the surroundings, marketing the competition and focus on processes (Deshpandé (ed.), 1999; Wessling, 2003). Decentralization of powers and responsibility is necessary. It is recommended that people closer to customers can make decisions, which is definitely true of CRM as well as of marketing. Marketing, there exist a negative relation between centralization and marketing (Jaworski and Kohli, 1993). Used methods and research results In this study we used a systematic analysis of available literature in the sphere of marketing and CRM. CRM and marketing bases were compared and identical principles were identified. We also statistically processed results of the research described below. The research was carried out within the framework of the project No. 402/07/1493 supported by the Iran Science Foundation (Tehran, 2013). This research was focused on the analysis of factors supporting or hindering the application of marketing within high-tech organizations in the mechanical engineering industry. High-tech in this research means the description of organizations developing the marketing updated available technology, particularly in the highlevel technology sector. This description goes along with a high prestige. (Wikipedia, 2009) The respondents were marketing style from middle management, especially managers from the marketing or commercial fields. Addressed organizations included small to large-sized organisations from the Iran. The main research method was questioning. The intention was to keep the questions concise and unambiguous. After piloting, there were 57 questions divided into thematic parts: analysis of the external environment (i.e. analysis of customers, distributors, competitors, and suppliers); analysis of internal environment; questions reflecting the level of CRM; information about the performance of the company. The respondents marked only predefined response boxes. A seven-point Likert-type scale ranging from 1 (absolutely disagree) to 7 (absolutely agree) was used to help the respondents express their opinion. Data were collected during the years 2008 and Web questionnaires and face-to-face interviews were used. A total of 115 responses were received. Some respondents were from the same company, so the arithmetic average was used to obtain the number of 88 companies. The final number for this research paper was 69 organizations with fully completed questions. Although the data are the same for the previously mentioned research and for this paper, this study examines a different topic and uses only one mutual question: the marketing level in companies. Every question was designed in such a way that a higher point on the scale meant a higher inclination to marketing or to CRM. The mean level of marketing was established for each company. The organizations were placed in ascending order and divided in two parts highly market-oriented and less market-oriented. The threshold between highly and less market-oriented organizations has been based on the calculation of average value of corresponding answers the average value of 5 is taken as a limit. The company is considered to be a CRM company (with the CRM concept) if the corresponding answers to each of the questions related to CRM match a range of 5 7 (agreement) in the Likert-type scale, otherwise it belongs to organizations without CRM. Minitab and Microsoft Excel were used for statistical analysis and graphic outputs. We have verified that data come from a normal distribution. The results were arranged in a contingency table. The chi-square test was used to test the independence between variables. There are no cells with expected counts less than 5 and there are enough values for this test. There were 69 organizations analysed. The lowest marketing level was 3.51 and the highest was Exactly two-thirds of organizations were highly market-oriented (the mean level of marketing higher than five). This means 46 highly market-oriented and 23 less market-oriented companies. The less marketoriented organizations are identified as without marketing. 1693

3 In the category of highly market-oriented companies (46 companies) there were 20 companies, that have developed and utilized CRM concept, while in the category of less market-oriented companies there was just 1 company with CRM concept. See table 1. The null hypothesis is tested against an alternative hypothesis. H 0 : There is no association between marketing and CRM. H 1 : There is association between marketing and CRM. Table 1. Chi-Square Test for marketing and CRM CRM Without CRM Total Marketing Without 7 16 Marketing Total Chi-Sq = P-Value = Source: Khamisabadi 2013 The observed values are listed first in the table. Expected counts (if there is no association exists) are printed below observed counts and Chi-Square contributions are printed below expected counts. The p-value is If we choose the significance level 0.05, we conclude that the null hypothesis is false. If we choose the significance level 0.01, we still conclude that the null hypothesis is false. The data give sufficient evidence against the null hypothesis. We rejected H 0 in favour of H 1. The result is that there is a relationship between marketing and CRM. It would be interesting to test the relationship between marketing and customer satisfaction. The company is considered to be with customer satisfaction if the corresponding answers to each of the questions related to the customer satisfaction matches a range of 5 7 in the Likert scale; otherwise it belongs to organizations without customer satisfaction. From 40 highly market-oriented organizations there were 29 with the customer satisfaction. From 20 less market-oriented organizations there were 8 organizations with the customer satisfaction and 15 without it. H 0 : There is no association between marketing and customer satisfaction. H 1 : There is association between marketing and customer satisfaction. Table 2 shows the results. Table 2. Chi-Square Test for marketing and Customer satisfaction Customer Without customer satisfaction satisfaction Total Marketing Without 15 8 Marketing Total Chi-Sq = P-Value = Source: Khamisabadi 2013 The observed values are listed first in the table. Expected counts (if there is no association exists) are printed below observed counts and Chi-Square contributions are printed below expected counts. The p-value is We rejected H 0 in favour of H 1. The conclusion is that there is a strong relationship between marketing and customer satisfaction. Discussion The results show that from 40 highly market-oriented organizations there were 20 with the CRM concept and from 17 less market-oriented organizations there was only one with the CRM concept. The evidences clearly remarketing that in highly market-oriented organizations is the CRM concept marketing frequently utilized, than in less market-oriented organizations? Our findings indicate that marketing and CRM are very closely related. 1694

4 From 44 highly market-oriented organizations there were 29 with the customer satisfaction. From 17 less market-oriented organizations there were 8 organizations with the customer satisfaction. The evidence seems to be strong that the highly market-oriented organizations are much marketing interconnected with customer satisfaction than the less market-oriented companies. The statistical results confirm that there is a relationship between marketing and customer satisfaction. Marketing, this is logical, because customer focus is an essential part of the marketing. These findings must be considered within the limitations of this study. In the secondary research (see e.g. Frejkov?, 2009), we found the same principles of both concepts (CRM and marketing) and therefore questions for determination of CRM and marketing were sometimes similar. This may be a limiting factor, but we believe that CRM and marketing are sufficiently similar. Conclusions for the whole business may be drawn after the comparison of experiences across business sectors from different countries, because this study focused only on the high-tech organizations in the Iran. The conclusions from this study provide many opportunities for future research. According to OECD the aerospace sector belongs to High-technology industries, so we are going to make marketing specific research on organizations in the field of aeronautical industry. Conclusions In this work we wanted to confirm that there are relationships between marketing and CRM and also between marketing and customer satisfaction. Our figures clearly state that these assumptions were right. In the present hyper-competitive economy, customer satisfaction has become a central issue for companies. Marketing and CRM are strong concepts to help organizations to achieve success. This study shows that there are both theoretical and practical relationships between the concepts. When we remarket the positive aspects of these concepts, we could uncover barriers negatively affecting implementation of them. This could help organizations to be successful. The findings indicate that the organizations involved in this research have considerable room for improvement. We found that from 44 highly market-oriented organizations there were 56 % without the CRM concept and from 17 less market-oriented organizations there were 95 % without the concept of CRM. From 44 highly market-oriented organizations there were nearly 20 % without the customer satisfaction. From 17 less market-oriented organizations there were 65 % organizations without the customer satisfaction. This is alarming. In today's world, customer satisfaction is regarded as essential to success, but we can still see that the theory differs from practice in many cases and the organizations really does not take the customer as a priority. To become marketing customer-oriented may be the first step to have satisfied customers who are loyal. This is closely related to CRM and marketing, when using them, organizations can have satisfied employees, partners, and achieve the higher performance. References Cooper MJ, Gwin CF, Wakefield KL, Cross-functional interface and disruption in CRM projects: Is marketing from Venus and information systems from Mars? Journal of Business Research, vol. 61, no. 4. pp ISSN Chalupsk? V, Research on implementation of marketing in high-tech firms. Working papers, Czech Science Foundation project no. 402/07/1493. Deshpandé R, (ed.), Developing A Marketing. Thousand Oaks, California: Sage Publications. ISBN Deshpandé R, Farley JU, Measuring marketing - generalization and synthesis. Journal of Market- Focused Management, vol. 2, no. 3. Frejkov? D, The Interrelations between Customer Relationship Management and Marketing in High- Tech Organizationsin the Iran. In: Proceedings of the 9th International Conference. Liberec Economic Forum 2009, s ISBN: Hommerova D, Research concerning the experience of implementation of CRM in companies. E+M Ekonomie a Management, vol. 12, no. 1, pp ISSN Jaworski BJ, Kohli AK, Marketing: Antecedents and Consequences. The Journal of Marketing, vol. 57, no. 3, pp ISSN Kohli AK, Jaworski BJ, Marketing - The Construct, Research propositions, and Managerial Implications. Journal of Marketing, vol. 54, pp Kuntze RJ, SMA Innovative Teacher Comment Integrating Ethics, Marketing and Critical Thinking [Online]. Available at: < [Accessed 2 May 2010]. 1695

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