Abstract
The increasing use of internet and database marketing in relation to relationship marketing is prevalent. The role of e-commerce plays a very large role indeed in achieving customer retention and customer loyalty by providing customers with long-term satisfaction from the marketers in a convenient way for the customers to indulge. The shift from traditional marketing to relationship marketing provides an alternative to further increase companies’ profits and in developing better rapport and deeper relationship with customers.
Keywords: customer retention, customer relationship management, relationship marketing, customer loyalty
Introduction
Relationship marketing is a form of marketing that evokes an emphasis in building longer term relationships with customers other than my mere individual transactions. The focus of relationship marketing is to attract and promote customer retention based on trust, commitment and sharing of information in exchange for customer’s loyalty. Further, relationship marketing facilitates the efforts of companies in the identification, maintenance of a network of individual consumers and the continuing initiative to strengthen the network. According to Morgan and Hunt (1994), relationship marketing as a retailer-customer approach that refers to all marketing activities directed toward developing and maintaining successful relational exchanges with customers.
The evolution of relationship marketing can be traced back to a passage by (1980) in which he observes: “What is surprising is that researchers and businessmen have concentrated far more on how to attract customers to products and services than on how to retain customers”. Relationship marketing begins its roots in the industrial and business to business markets where long-term contracts have flourished for many years. According to (1983), relationship marketing can be applied: when there are alternatives to choose from; when the customer makes the selection decision; and when there is an ongoing and periodic desire for the product or service. A point of argument should be made here such that the application of relationship marketing should not only be limited or to be consider as an alternative because in order to gain profits, the principle that could underlie in the application of relationship marketing is to attract customers to the products and services at the same time to take care of these customers and treat them as assets that could be a very potent resource tantamount in the expansion of the business. If its application is limited to the three factors stated above, there would be limitations in customer retention, thus, unable to get customers loyalty. The continuing efforts to improve relationship marketing enable companies to cater to the different people who have a diversity of preferences.
In fact, according to (1991) claims that relationship marketing has the potential to forge a new synthesis between quality management, customer service management, and marketing. Moreover means, that quality management, customer service management and marketing should be considered as a whole inseparable entity in the business.
However, development in the use of database marketing principles is required to support the foundation for effective relationship marketing. The key element lies in a flexible and customized sales and marketing database created by tools such as an information system that in turn allows immediate access for marketing information. A marketing database serves as a strategic weapon in building strategic sustainable relationships with customers amidst the fierce competition in the marketing world. For example, Burger King uses a database to push brand loyalty while its customers are still in analog mobile phones.
Database marketing is the use of databases of customers that able the generation of personalized communication in order to promote products and services. It emphasizes the use of techniques to develop and assess customer behavior. Database marketers are heavy users of data warehouses where data and customer information can be kept. The communications in which it can be generated if unwanted by the addressee may be described as junk mail or spam.
The internet and management information system has been the major technology enablers that make relationship management more strategic. The internet allows businesses to get low cost interactions with customers and can save time. The management information system on the other hand, allows businesses to generate a single view of customers across all the functional areas in the business. Both of these systems together allowed for customized communication for their costumers.
Internet marketing from the name itself is the use of the Internet to advertise and sell goods and services that includes the pay per click advertising, banner ads, e-mail marketing and the like. Internet marketing comprises information management, public relations, customer service, and sales in its broader scope. It offers benefits to the company such as the availability of information where customers learn have a detail of the products and services being offered. Internet marketing can help in the expansion of the company from a local market to both national and global marketplaces.
Customer relationship management in its narrow definition involves managing detailed information about individual customers in order to maximize costumer’s loyalty through carefully managing customer touch points. Recently, however, customer relationship management takes its broader meaning which denotes as the overall process of building and maintaining customer relationships profitably by delivering customized and personalized customer value and satisfaction.
Effective customer relationship management in order to be use strategically requires the intelligent application of technology. The effectiveness of customer relationship management is how to use customer’s information valuably to create an ongoing relationship with the customer. Aside from the intelligent application of technology, customer service management requires that an organizational views customer’s relationship with meaning before being able to learn about customer’s needs and wants deeper and how is it best to satisfy and sustain the costumer at the same time helping the organization meet its objectives.
The task of creating and delivering superior customer value should complement with the effective relationship management relationship with the customers. Customer relationship management should be of utmost understanding of what the customer’s worth value to the company that is termed as customer’s equity. As there is an improvement in the delivering of superior customers value, an improvement in the customer’s equity. Customer’s equity is perhaps the company’s most valuable asset, continuous improvement in the customers value that it has been giving to its customers. The determinants in which the company invest to its customers, is the company’s customer equity. The company should continue to give guaranteed superior service quality and customer service.
According to (1990), the increased profitability associated with customer retention efforts occurs because the cost of acquisition occur only at the beginning of a relationship, so the longer the relationship, the lower the amortized cost; account maintenance costs decline as a percentage of total costs (or as a percentage of revenue); long-term customers tend to be less inclined to switch, and also tend to be less price sensitive resulting in stable unit sales volume and increases in sales volume are some of the factors that connotes profitability associated with customer retention. Undoubtedly, customer retention entails an increased profitability. Especially now with the emerging e-commerce innovations which serves as a role of a catalyst in the effectiveness of relationship marketing.
Assessment
Shiseido is a company that did not start in a make up products industry but was able to earn its reputation in the make up products industry and is considered to be a top product manufacturer in the business. There secret lies in the good effective marketing strategy they are using. Shiseido once has been a limited partnership but became a stock company in Japan and since then it took its course in expanding their markets not only in Japan but in the global market as well. Currently, Shiseido has sixty-five (65) countries from across the globe with its biggest sales in the European market. Recently, Shiseido have aggressively expanded to China as their key overseas market. The reason behind its continuing success is the use of good effective relationship marketing which seeks to identify the touch points of its customers.
As part of the corporate mission of Shiseido, their mission focuses on customer relationship management strategies and in relationship marketing that aims in its dedication in making the realization of beauty come true for its customers. The integration of their marketing organization is achieved by the marketing, research and development department and the merchandising who works together in knowing the wants of the customers, analysing consumer needs and the market trend as well.
The use of internet and database marketing coincides to what is collectively considered as e-commerce. With the very highly competitive global market, Shiseido in order to be competent must come up with new innovative means in addressing the need for new marketing strategy and the solution lies in the use of internet and database marketing. Both new marketing strategy will surely keep Shiseido be at pace with the rival make up companies and with the rest of the make up industry that also spends huge bucks of money in the advertisement, promotions and in the research and design department.
Internet marketing will become a very valuable tool in providing convenience to the Shiseido customers since the customers themselves also is keeping at pace with the face-paced life in this modern world. The need to find a place for parking and possibly be caught up in traffic would not be a concern anymore because the customers can purchase Shiseido right in a click of a mouse. Not only that it provides customers with convenience, it can give product information about Shiseido products highlighting the difference of every Shiseido products from the other products available in the market and so as online without the hassle of undergoing persuasion from a sales person. Database marketing, same as internet marketing, can monitor the customer’s needs and wants that enable Shiseido to better assess and be up-to-date with the changing trends within the external environment that comprises the society. With the increasing use of both internet and database marketing, it speeds up the establishing of more than a customer relationship with customers. It fosters valuable importance on the part of the customers that they are being treated as valuable to the company and making the customers feel they are of importance and that they matter. The establishment of more than a customer relationship increases the likelihood of customer retention and customer loyalty. Relationship marketing strategies is an alternative means in marketing that provides companies with the opportunity to maximize their profits and reduce its costs. Compare with the traditional marketing which focuses only on the recruitment of single sale and little attention to customer service, relationship marketing focuses on customer retention and place a value on customer service.
The implementation of internet and database marketing must also be in line with the aim of customer retention and customer loyalty. Customer loyalty occurs when the buying motivations are high and the premise of commitment, preference and repeat purchase are present. According to(1935), there are four levels of loyalty base on four components: cognitive, affective, conative and action. The cognitive, affective and conative aspect is what comprises the traditional definition of behavior. Shiseido should focus and give emphasis on these aspects in such that it is very helpful to get customers be drawn to your products. Let us note that the customers behavior have an effect in the earning of customer loyalty. Shiseido may thoroughly study the factors in which that affects customers’ behavior so that they will be given a clue to what the customer demands. It is focusing on the emotional aspect of an individual would be the key in earning customer loyalty making Shiseido products more than a product for the customer making the customer develops an emotional attachment to it.
The role of e-commerce in the customer retention and customer loyalty is that it enables relationship marketer’s to customize the services Shiseido offers in a likeable demeanor. For example, the friendly voice or manner of speaking of a relationship marketer can convince consumers to purchase Shiseido’s products.
Further, the aspect of Shiseido’s loyalty programs can also be improvised such that it would only not be limited to the chosen few. The Shiseido’s customers will not be highly motivated if the loyalty program can only be available for the chosen few. Internet and database marketing can better put emphasis on this aspect since it can be a medium of creating an awareness of the customer’s part and keep them up to date as well in what they can reap when they stay a loyal customer to Shiseido. For example, they can introduce rewards point every time they purchase a Shiseido product. The amount of reward points would be high when the customer purchases a Shiseido product that does not do well in the market. By doing so, it can perhaps generate an increase in the sales of products.
further developed the importance of building customer commitment in his 1996 book The Loyalty Effect. He focused on the cost of customer defection and set the stage for the problem by claiming. Using examples from financial service companies, advertising agencies, and manufacturing firms, claimed that even small improvements in customer retention can as much as double company profits. point hold true because the costs of serving long-term costumers is less since these customers have been committed already to the products, the need to advertise the products to the customer is not that important anymore and the products the customers have been committed to has been instil in their minds as something that had worked for them. The more they will be resistant to shift in trying and buying other product. Naturally, customers will always choose the one that works for them.
Conclusion and Recommendations
The internet and database management is now considered a necessity of every company engaging in the global market. To be able to reach out for a bigger market they have to reach their customers via the internet since customers are also now very technology driven. The absence of venturing into new effective means of marketing may drive away customers to shifting with new products because the company itself does not keep itself at pace with the customers. Thus, the probability of customer retention is less likely to happen. Customer retention proved to be inevitable in every relationship marketing aspect. From the customer retention engulfs the development of customer loyalty that comes from constantly refining the information available on specific customers that includes customer preferences, buying habits and patterns, product usage, and other data pertinent to individual customers.
Effective customer relationship combined with internet and database marketing spells increased profitability in Shiseido. Some advantages of customer relationship and internet and database strategy are first, the relationship can create a committed customer. A loyal and committed customer is more than repeat purchaser but is likely to have developed an emotional attachment with the products. A committed customer is likely to be a source of word-of-mouth referrals and are resistant to accept and shift to new brand label. Second, it can provide a point of leverage to realize economies of scope and further gain understanding customer’s changing trends. Third it has a potential to minimize costs.
Over all Shiseido show a good marketing effectiveness especially in the customer relationship management and relationship marketing aspect. The need for internet and database marketing proved to be a valuable asset if incorporated more in the marketing strategy. The need for advertisement should not be too costly for Shiseido since it had already earned its reputation in the market. Shiseido’s main concern now is how to stay competent in the market amidst the heavy rivals they are facing. Also there is a need for Shiseido to allocate more money in the research and design department rather than in the advertisement because consumers’ trend tends to be moody and welcomes products which are new and very innovative to them. The imperative need of redefining their products is of apparent importance in order to constantly differentiate their products from the rest of the make up products.
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