Chapter 11: Customer Relationship Management and Supply Chain Management

Question 1

What is the definition of customer relationship management?

Answer 1

Customer relationship management (CRM): is a customer-focused and customer-driven organizational strategy.

• organizations concentrate on assessing customers’ requirements for products and services and then provide a high-quality, responsive customer experience.
• Not a process of tech, just a customer-centric way of thinking and acting

Question 2

Why is CRM so important to any organization?

what is the organization’s goal

Answer 2

Organization’s goal is to: Maximize the lifetime value of a customer

Question 3

Define and provide examples of customer touch points.

Answer 3

Customer touch points: Organizations must recognize the numerous and diverse interactions they have with their customers

• These interactions are the touch points
  
  • Ex. Telephone contact, email, websites, etc.
    Because of technology, organizations can track their customers through their smartphones

Question 4

define 360° Customer view

Answer 4

360° Customer view: gathering information about a customer from every touchpoint they have with a business

Question 5

Define Collaborative CRM systems and Customer identity management

Answer 5

Collaborative CRM systems: provide effective and efficient interactive communication with the customer throughout the entire organization

• Also enable customers to provide direct feedback
• Ex, social media applications like Instagram

Customer identity management: Businesses understanding who their customers are and how their relationship has changed over time

Question 6

Differentiate between customer-facing applications and customer-touching applications.

Answer 6

Customer-facing CRM applications: an organization’s sales, field service, and customer interaction centre representatives interact directly with customers.

• Ex. These applications include customer service and support, salesforce automation, marketing, and campaign management.

Customer-touching CRM applications: customers who use these technologies (ex. The internet) interact directly with the applications themselves

• Ex. These applications include Loyalty Programs, Email and Automated Response, Frequently asked questions (FAQs)

Question 7

Provide examples of cross-selling, upselling, and bundling (other than the examples presented in the text).

Answer 7

Cross-selling: is the marketing of additional related products to customers based on a previous purchase.

Upselling: is a strategy in which the salesperson provides customers with the opportunity to purchase related products or services of greater value in place of, or along with, the consumer’s initial product or service selection

• Ex. Selling the better quality TV rather than the cheaper one

Bundling: is a form of cross-selling in which a business sells a group of products or services together at a lower price than their combined individual prices

Question 8

Define Analytical CRM systems

Answer 8

Analytical CRM systems: provide business intelligence by analyzing customer behaviour and perceptions

• create statistical models of customer behaviour and the value of customer relationships over time, as well as forecasts about acquiring, retaining, and losing customers.

Question 9

Describe on-demand
CRM.

Answer 9

On-demand CRM system: is one that is hosted by an external vendor in the vendor’s data centre. This arrangement spares the organization the costs associated with purchasing the system.

• the vendor creates and maintains the system - then employees have to learn how to use it
  Ex. Salesforce

Question 10

Describe mobile CRM.

Answer 10

Mobile CRM system: involve interacting directly with consumers through portable devices such as smartphone

Question 11

Describe open-source
CRM.

Answer 11

Open-source CRM systems: are CRM systems whose source code is available to developers and users.

Question 12

Describe social CRM.

Answer 12

Social CRM: is the use of social media technology and services to enable organizations to engage their customers in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent manner.

• organizations monitor services such as Facebook, Twitter, and LinkedIn for relevant mentions of their products, services, and brand, and they respond accordingly

Question 13

Describe real-time
CRM.

Answer 13

Real-time CRM systems: help organizations to respond to customer product searches, requests, complaints, comments, ratings, reviews, and recommendations in near real-time, 24/7/365

Question 14

What is a supply chain?

Answer 14

Supply chain: is the flow of materials, information, money, and services from raw material suppliers, through factories and warehouses, to the end customers.

• Includes the organizations and processes that create and deliver products, information, and services to the end customers.

Question 15

Describe the three segments of a supply chain.

Answer 15

The supply chain involves three segments:
Upstream, where procurement (buying) from external suppliers occurs.

• In this segment, supply chain managers select suppliers to deliver the goods and services the company needs to produce its product or service

Internal, where packaging, assembly, or manufacturing takes place.

• Supply chain managers schedule the activities necessary for production, testing, packaging, and preparing goods for delivery.

Downstream, where distribution takes place, frequently by external distributors

Question 16

Describe the flows in a supply chain.

three flows

Answer 16

Material flows are the physical products, raw materials, supplies, and so forth that flow along the chain.

Information flows consist of data related to demand, shipments, orders, returns, and schedules, as well as changes in any of these data.

Financial flows involve money transfers, payments, credit card information and authorization, payment schedules, e-payments, and credit-related data.

Question 17

Differentiate between the push model and the pull model.

Answer 17

Push model: In this model, the production process begins with a forecast, which is simply an educated guess as to customer demand

• The forecast must predict which products customers will want and in what quantities. The company then produces the number of products in the forecast, typically by using mass production, and sells, or “pushes,” those products to consumers.

Pull model, the production process begins with a customer order. Therefore, companies make only what customers want, a process closely aligned with mass customization

• Ex. Dell’s suppliers ship only the parts that Dell needs to produce the computer. Depending on the customer order

Question 18

Describe various problems that can occur along the supply chain.

Answer 18

1. uncertainties - the demand forecast.
   ○ Demand for a product can be influenced by numerous factors such as competition, price, weather conditions, technological developments, overall economic conditions, and customers’ general confidence
2. the need to coordinate multiple activities, internal units, and business partners.

Question 19

Discuss possible solutions to problems along the supply chain.

Answer 19

Using Inventories to Solve Supply Chain Problems
Just-in- Time (JIT): method where IT systems deliver the precise number of parts, called work-in-process inventory, to be assembled into a finished product at precisely the right time.

Information Sharing
sharing information along the supply chain. Information sharing can be facilitated by electronic data interchange and extranets

• Ex. Walmart provides Procter & Gamble (P&G) with access to daily sales information from every store for every item that P&G makes for Walmart. This access enables P&G to manage the inventory replenishment for Walmart’s stores

Question 20

Define Electronic data interchange (EDI), and list its major benefits and limitations.

Answer 20

Electronic data interchange (EDI) is a communication standard that enables business partners to exchange routine documents, such as purchasing orders, electronically

• Benefits: It minimizes data entry errors, cycyle time, increases productivity, minimizes paper usuage, etc.
• Limitations: businesses processes must sometimes be restructured to fit EDI requirements

Question 21

Define an extranet, and explain its infrastructure.

Answer 21

Extranets link business partners over the Internet by providing them access to certain areas of each other’s corporate intranets

• The primary goal of extranets is to foster collaboration between and among business partners
• Insfrastructure: Extranets use virtual private network (VPN) technology to make communication over the Internet more secure.

Question 22

List and briefly define the major types of extranets.

Answer 22

A Company and Its Dealers, Customers, or Suppliers
This type of extranet centres on a single company.

• An example is the FedEx extranet, which allows customers to track the status of a delivery. Customers use the Internet to access a database on the FedEx intranet

An Industry’s Extranet
Just as a single company can set up an extranet, the major players in an industry can team up to create an extranet that will benefit all of them

Joint Ventures and Other Business Partnerships
the partners in a joint venture use the extranet as a vehicle for communication and collaboration.

• Ex. Bank of America’s extranet for commercial loans. The partners involved in making these loans include a lender, a loan broker, an escrow company, and a title company.

Question 23

Differentiate between procurement portals and distribution portals.

Answer 23

Procurement portals automate the business processes involved in purchasing or procuring products between a single buyer and multiple suppliers

Distribution (‘fullfillment’) portals automate the business processes involved in selling or distributing products from a single supplier to multiple buyers