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MKTG 480 Ch.4
Stewart (Fall '11) Exam 1, Chapter 4
24
Marketing
Undergraduate 4
09/18/2011

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Term
customer relationship management (CRM)
Definition
A comprehensive business model for increasing revenues and profits by focusing on customers.
Term
customer satisfaction
Definition
The level of liking an individual harbors for an offering.
Term
customer loyalty
Definition
A customers commitment to a company and its products and brands for the long run.
Term
lifetime value of a customer
Definition
The measurement of important business success factors related to long-term relationships with customers.
Term
return on customer investment (ROCI)
Definition
A calculation that estimates the projected financial returns from a customer. It is a useful strategic tool for deciding which customers deserve what levels of investment of various resources.
Term
firing a customer
Definition
The shifting of investment of resources from a less attractive customer to more profitable ones.
Term
touchpoints
Definition
The intersection of a selling firm with a customer via a media channel.
Term
data warehouse
Definition
A compilation of customer data generated through touchpoints that can be transformed into useful information for marketing management decision making and marketing planning.
Term
data mining
Definition
A sophisticated analytical approach to using the massive amounts of data accumulated through a firm’s CRM system to develop segments and microsegments of customers either for purposes of market research or development of market segmentation strategies.
Term
database marketing
Definition
Direct marketing involving the utilization of the data generated through CRM practices to create lists of customer prospects who are then contacted individually by various means of marketing communication.
Term
organizational learning
Definition
The analysis and refinement phase of the CRM process that is based on customer response to the firm’s implementation strategies and programs.
Term
mass marketing
Definition
The classic style of consumer marketing in which a firm views all consumers as equal reactors to a firm’s marketing strategies.
Term
consumer marketing
Definition
The practice of marketing toward large groups of like-minded customers.
Term
customer marketing
Definition
The practice of marketing that focuses on developing relationships with individuals.
Term
formalization
Definition
The formal establishment of a firm’s structure, processes and tools, and managerial knowledge and commitment to support its culture.
Term
customer mind-set
Definition
An individual’s belief that understanding and satisfying customers, whether internal or external to the organization, is central to the proper execution of his or her job.
Term
relationship-based enterprise
Definition
A firm that strives to facilitate long-term, win-win relationships between buyers and sellers.
Term
-Customer Acquisition
-Customer Retention
-Customer Profitability
Definition
Ultimately, CRM has three major objectives:
Term
-Customer Satisfaction
-Customer Loyalty
-Lifetime Value of a Customer
-Return On Customer Investment (ROCI)
Definition
OBJECTIVES AND CAPABILITIES OF CRM (4)
Term
-Knowledge Discovery
-Market Planning
-Customer Interaction
-Analysis and Refinement
Definition
the process cycle for CRM may be divided into 4 elements
Term
-indentify all potential touchpoints
-develop specific objectives for what kind of information can be collected at each touchpoint
-determine how that information will be collected and ultimately integrated into the firm's overall customer database
-develop policies on how the info will be accessed & used
Definition
to maximize a firm's ability to successfully use touchpoints, an ongoing concerted effort must be undertaken to... (4)
Term
-Reduced Promotional Costs
-Improved Targeting
-Improved Capability
-Increased Effectiveness
-Increased Sensitivity
-Increased Speed
-Improved Use of the Customer Channel
Definition
Advantages of Customer Marketing (7)
Term
-Strong internal partnerships
-All organization members are actively involved in collecting information
-CRM tools are employee- and customer-friendly
-Reporting consists only of data the firm can actually use
-Only as high-tech as necessary
Definition
When considering CRM, the likelihood of a successful implementation increases dramatically when the firm can demonstrate the following characteristics: (5)
Term
-Adopting a relationship or partnership business model overall, with mutually shared rewards and risk management.
-Redefining the selling role within the firm to focus on customer business consultation and solutions.
-Increasing formalization of customer analysis processes.
-Taking a proactive leadership role in educating customers about value chain opportunities available by developing a business relationship.
-Focusing on continuous improvement principles stressing customer satisfaction and loyalty.
Definition
at the strategic marketing level, a customer-centric culture includes, but is not limited to these major components (5)
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