Page 134 - Marketing the Basics 2nd

126 Marketing: the Basics
advertised instead of buying products of comparable quality that are not as well known. In the world of high-tech there is a saying that, ‘You don’t get fired for buying IBM’. What this saying means is that IBM is widely accepted as having top quality, if it breaks down, that is just the vicissitudes of life, not because you bought cheap and saved money at the point of purchase but paid through the nose later on when the system broke down. That is also why many people will a premium for a well-known brand. I will pay more for a Ralph Lauren shirt not just for the pony on the chest to impress my friends with my social cachet but also because it is a symbol of quality; to put it in the words of a recent advertising slogan, ‘Mr. Lauren don’t make no bad things’. What’s more, providing customer service for after-sales assistance, reliable delivery schedules and a commitment to preserve the quality of the product are important factors in the decision-making process. Reducing the cognitive dissonance of consumers leads to a higher likelihood they will select the product, even if it means paying a premium.
CUSTOMER RELATIONSHIP MANAGEMENT
Customer relationship management (CRM) or one-on-one marketing came into vogue in the 1990s following some key discoveries by academics and practitioners. Earlier we introduced the idea of the Customer Pyramid model. CRM is the means to the end for the Customer Pyramid model. The American Marketing Association online dictionary defines CRM as the following:
A discipline in marketing combining database and computer technology with customer service and marketing communications. Customer relationship management (or CRM) seeks to create more meaningful one-on-one communications with the customer by applying customer data (demographic, industry, buying history, etc.) to every communications vehicle. At the simplest level, this would include personalizing email or other communications with customer names. At a more complex level, CRM enables a company to produce a consistent, personalized marketing communication whether the customer sees an ad, visits a Web site, or calls customer service.