Customer Relationship Management Assignment - B01MARK210

This assignment provides a detailed analysis of key concepts in Customer Relationship Management (CRM), addressing questions related to customer acquisition, retention, and portfolio management. The assignment begins by ranking five popular techniques for acquiring new consumers, explaining the rationale behind the ordering. It then critically evaluates the effectiveness of airline loyalty programs in creating genuine customer loyalty and retention, arguing against their efficacy. The assignment further explores the significance of activity-based costing in optimizing customer portfolio management, detailing how it impacts consumer acquisition costs, terms of trade, and service costs. Finally, it examines the application of Williamson's Transaction Cost Economics theory to explain long-term strategic relationships between car manufacturers and suppliers, focusing on governance mechanisms and vertical integration. The assignment integrates academic sources to support its arguments, providing a comprehensive overview of CRM principles.

Running head: CONSUMER RELATIONSHIP MANAGEMENT
Consumer Relationship Management
Name of the University:
Name of the Student:
Authors Note:

1CONSUMER RELATIONSHIP MANAGEMENT
Table of Contents
Answer of Question from Chapter 3................................................................................................2
Answer of Question from Chapter 4................................................................................................4
Answer of Question from Chapter 5................................................................................................5
Answer of Question from Chapter 6................................................................................................7
References........................................................................................................................................9

2CONSUMER RELATIONSHIP MANAGEMENT
Answer of Question from Chapter 3
From analyzing chapter 3, it has been gathered that there are five popular techniques in
acquiring new consumers. They are ranked in order of the techniques most likely to lead in high
lifetime value consumers that are indicated below:
 Lead management- The lead management based new consumer acquisition strategy is
deemed to include several sub-processes that include lead generation, lead qualification,
lead tracking along with lead allocation (Albrecht, Hattula and Lehmann 2017). This
strategy includes implementing cognitive advertising objectives encompassing creasing
awareness, developing understanding along with generating knowledge. Moreover,
affective advertising can also facilitate in acquisition hew consumers in an efficient
manner that focuses on developing product and generating better preferences.
 Campaign management- Campaign management is also deemed to be one of the
effective new consumer retention strategy that includes strategies such as campaign
managers design, implementation and measuring the marketing campaigns in support if
the consumer relationship management technologies. In certain times there are
multimedia campaigns through direct mail, fax, email, SMS platforms and outbound
telephony (Ghantous 2016). Certain examples of such strategy that is effective in
acquiring new consumers include Consumer Referral Schemes that is also member-get-
member along with recommend-a-friend schemes. These strategies are deemed to be
highly efficient for the reason that these screens are observed to be highly effective in
targeting a relevant section of the target consumer base that considers including
consumers that are satisfied that has experienced exceptional service.

3CONSUMER RELATIONSHIP MANAGEMENT
 Event-based marketing- Event based marketing techniques are considered as one of the
effective new consumers acquiring techniques that offers companies with exceptional
opportunities to approach certain prospects at times that have an increased probability of
leading into high consumer sale. This new consumer attainment strategy incudes vital life
stage events (Crnjac, Martinović and Šimović 2015). Moreover, affective advertising can
also facilitate in acquiring new consumers in an efficient manner that focuses on
developing product and generating better preferences.
 Operational Consumer Relationship Marketing tools- Operational Consumer
Relationship Marketing tools that is deemed to be supported by sound analytics in
making sure that the correct offer is made to the right consumer through implementing
right channel at the right time. This can be ensured through implementing right
acquisition channel based on which better consumer relationship acquisition process can
be maintained (Cambra-Fierro et al. 2017). Operational consumer relationship
management tools such as sales and marketing automation facilitates the companies in
acquiring new consumers though setting sales automaton standard in the company. It
encompasses several RM sales modules such as generation of leads, contact management,
sales forecasting and quote-to-order management. Such strategies are likely to acquire
more consumer base.
 Maintaining consumer related Databases- Through implementation of effective
consumer related databases it is likely to query consumer-related databases that can guide
better consumer acquisition (Piccinini, Gregory and Kolbe 2015).

4CONSUMER RELATIONSHIP MANAGEMENT
Answer of Question from Chapter 4
It is stated that the loyalty programs that are implemented by airlines are not effective in
creating loyalty and retention of consumers. In a situation where all the competitors offer
identical schemes, the marketing costs are deemed to increase within the industry. From
evaluating chapter 4 it has been gathered that the loyalty programs are effective consumer
retention strategies in a situation it focuses on highly effective negative and positive consumer
retention strategies. Negative consumer retention strategies include creating exit barriers,
extracting the switching penalties and enforcing the contact (Arnold 2017). The positive
consumer retention strategies of the airline companies through its loyalty programs are focused
on delighting consumers, creating consumer-perceived added value, generating social and
structural bonds and generating high consumer engagement. The loyalty schemes that can ensure
better consumer retention advantages for the airline companies can be focused on developing a
consumer management program that provides immediate or delayed incremental rewards to the
consumers for ensuring their cumulative patronage (Bohrer et al. 2016). Certain instances of
such loyalty programs can include co-operation dividend, introduction of green shield stamps,
Airlines advantage cards and Nectar. Such loyalty programs can facilitate in increasing consumer
retention rate through increasing the changes that has taken place with time in the card-based
schemes. Such changes include member’s name, chip-embedment, networked third-party
operated and offering major reward for consumers. Few consumers look for considerable sales
effort so that they can be shifted from prospect consumers to first time consumer status within
the company.
Moreover, certain success must also be considered by the airlines in adding value from
the loyalty programs that is focused on collecting points that might deliver certain pre-

5CONSUMER RELATIONSHIP MANAGEMENT
disposition psychological advantages to the target consumers (Doherty, Shakur and Ellis-
Chadwick 2015). The positive consumer retention strategies of the airline companies through its
loyalty programs are focused on delighting consumers, creating consumer-perceived added
value, generating social and structural bonds and generating high consumer engagement. Such
advantages include developing sense of belonging to the consumers or being valid that generates
an enjoyable estimation of desirable future events. For instance, certain effective consumer
retention loyalty program includes developing a consumer club as a company-run membership
organization which offers a broad range of value-added advantages for all its members (Preece,
Chong, Golizadeh and Rogers 2015). Certain sales promotion based loyalty programs are
considered to be effective in building repeat purchase intentions among the consumers. Such
consumer loyalty programs include in-pack or on-pack vouchers, rebate or cash back, certain
patronage rewards, collection schemes, self-liquidating premium and offering free premium for
regular purchase.
Answer of Question from Chapter 5
From analyzing chapter 5, activity based costing is deemed important in better consumer
portfolio management. Considering such findings it has been gathered that in activity based
costing technique implementations costs are observed to vary from consumer –to-consumers for
the reason that few consumers are costly to acquire and serve in comparison to others (Strandvik,
Heinonen and Vollmer 2018). The ways in which the activity based costing facilitates in
maintaining better consumer portfolio management is indicated under:
 Controlling consumer acquisition costs: Few consumers look for considerable sales
effort so that they can be shifted from prospect consumers to first time consumer status

6CONSUMER RELATIONSHIP MANAGEMENT
within the company. In ensuring same, activity based costing techniques used by the
companies facilitate in encouraging more sales calls, increased visits to the reference
consumer sites, free samples, effective engineering advices and also guaranteeing that the
switching costs will be addressed by the vendor (Kortmann and Piller 2016).
 Deciding terms of trade: Activity based costing techniques implementation in the
companies facilitates in maintaining terms of trade such as maintaining prove discounts,
support for advertising and promotion, developing slots allowances such as cash paid to
the retailers for the shelf space along with maintaining extended invoice use checks. Such
activities followed by the companies in implementing activity based costing method
facilities the companies in maintaining better consumer portfolio management (Lacej and
Kalaj 2015).
 Maintaining consumer service costs: Implementation of activity base costing technique
facilitates in better management of consumer service costs. This is ensured through
handling consumer queries, complaints and claims, demands on contact center and the
salesperson, maintaining small order sizes along with high order frequency. Activity
based costing implementation also focus on maintaining just-in-time delivery, post-load
shipments along with maintaining of breaking bulk for ensuring service or product
delivery to several sites at a particular time (Thakur and Workman 2016). Such
advantageous features of implementing activity based costing technique facilitates in
ensuring better consumer portfolio management.
 Managing working capital costs: Implementation of the activity based costing
technique facilities the companies in managing working capital costs in effective manner
that can ensure better consumer portfolio management. This is ensured through carrying

7CONSUMER RELATIONSHIP MANAGEMENT
inventory for consumer and maintaining efficient credit costs. Such activities followed by
the companies in implementing activity based costing method facilities the companies in
maintaining better consumer portfolio management (Crnjac, Martinović and Šimović
2015). This costing technique when combined with the revenue figures facilitates in
maintaining absolute and relative levels of profit attained by ac consumer segment. It also
guides companies’ actions for taking return consumer to profit. It also facilitates in
prioterisng and direct consumer retention, acquisition along with the development
strategies.
Answer of Question from Chapter 6
It has been observed that the major car manufactures are likely to have a long term
strategic relationships with the major suppliers that is explained through implementing
“Williamson’s Transaction Cost Economics theory”. Supporting such statement it has been
gathered from Chapter 6 that there are two major reasons for which the manufacturer and
supplier might wish to have a privileged relationship rather than focusing on the marketplace for
their selling and buying. One of the major reasons is related with one of the two types of
heterogeneity that is “diversity of transactions” and the other reason is “diversity of
organizations” (Crnjac, Martinović and Šimović 2015). The first reason focuses on implying a
superior-subordinate relationship and maintaining effective employment relationship that is
generally related with voluntary subordination. In maintaining effective supplier and
manufacturer relationship, Transaction Cost Economics Theory explains that dealing with issues
related with incomplete contracts and premature claims that is observed to exist in profits
between separate companies. The second reason facilitates in attaining benefits of collective
actions in the situation where the manufacturer and the supplier focuses on maintaining effective

8CONSUMER RELATIONSHIP MANAGEMENT
relationship among them through maintaining severe market frictions. Such functions include
uncertainty along with inability to insure certain risks that might result in complete markets,
horal hazard that can facilitate in analyzing opportunistic behavior along with making adverse
selection (Yrjölä et al. 2019).
This theory also explains that better maintenance of supper and the manufacture
relationship can be for the reason of better maintenance of “Vertical Integration”. Vertical
integration facilitates in developing cooperation that is deemed to be trained in an adaptive and
sequential manner with greater refined rewards. In addition, this also facilitates in better
maintenance of internal auditing technique that is more likely to support in attaining convergent
expectations in the company through the development of coding system within the companies in
sustaining better manufacturer and supplier relationship (Crnjac, Martinović and Šimović 2015).
“Williamson’s Transaction Cost Economics theory” explains that long term strategic relationship
can be maintained between the car ‘manufacturer and supplier because of the reason of
maintaining “mechanisms of governance” through implementation of discrete structural
alternatives. This theory also considers maintains of service level agreement that can act as a
contractual commitment between the service provider and the consumer which explains mutual
responsibilities of the two parties in consideration to the services that are provided along with the
standards based on which these activities can be performed (Crnjac, Martinović and Šimović
2015).

9CONSUMER RELATIONSHIP MANAGEMENT
References
Albrecht, C.M., Hattula, S. and Lehmann, D.R., 2017. The relationship between consumer
shopping stress and purchase abandonment in task-oriented and recreation-oriented
consumers. Journal of the Academy of Marketing Science, 45(5), pp.720-740.
Arnold, M., 2017. Fostering sustainability by linking co-creation and relationship management
concepts. Journal of Cleaner Production, 140, pp.179-188.
Bohrer, Z., Cook, J., Delgado, R.A., Ingram, J.S., Lawrence, K., Schochet, R., Verutes, T.,
Cohen, M., Kiernan, M. and Perez, P., III Holdings 1 LLC, 2016. Systems and methods for
comprehensive consumer relationship management. U.S. Patent Application 14/862,994.
Cambra-Fierro, J., Centeno, E., Olavarría, A. and Vázquez-Carrasco, R., 2017. Analysing
relationship quality and its contribution to consumer relationship proneness.
Crnjac, M.D., Martinović, M. and Šimović, V., 2015. Stochastic models applicable in consumer
relationship management. Strategic Management, 20(4), pp.34-45.
Doherty, N.F., Shakur, M. and Ellis-Chadwick, F., 2015. The role of e-service quality
management in the delivery business value. Journal of Retailing and Consumer Services, 27,
pp.52-62.
Ghantous, N., 2016. The Impact of Services Brand Personality on Consumer–Brand Relationship
Quality. Services Marketing Quarterly, 37(3), pp.185-199.
Kortmann, S. and Piller, F., 2016. Open business models and closed-loop value chains:
Redefining the firm-consumer relationship. California Management Review, 58(3), pp.88-108.

10CONSUMER RELATIONSHIP MANAGEMENT
Lacej, A. and Kalaj, E.H., 2015. The effect of consumer relationship management on satisfaction
and loyalty: A focus on Albanian tour operator business. Mediterranean Journal of Social
Sciences, 6(2 S1), p.635.
Piccinini, E., Gregory, R.W. and Kolbe, L.M., 2015. Changes in the producer-consumer
relationship-towards digital transformation. Changes, 3(4), pp.1634-1648.
Preece, C., Chong, H.Y., Golizadeh, H. and Rogers, J., 2015. A review of customer relationship
(CRM) implications: benefits and challenges in construction organizations. International Journal
of Civil Engineering, 13(3), pp.362-371.
Strandvik, T., Heinonen, K. and Vollmer, S., 2018. Revealing business customers’ hidden value
formation in service. Journal of Business & Industrial Marketing.
Thakur, R. and Workman, L., 2016. Customer portfolio management (CPM) for improved
customer relationship management (CRM): Are your customers platinum, gold, silver, or
bronze?. Journal of Business Research, 69(10), pp.4095-4102.
Yrjölä, M., Kuusela, H., Närvänen, E., Rintamäki, T. and Saarijärvi, H., 2019. Leading Change:
A Customer Value Framework. Leading Change in a Complex World: Transdisciplinary
Perspectives.