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CRM
RESEARCH PAPER
V.Navaneethan (07MBI058) 07-Dec-11

THE IMPACT OF CRM SYSTEMS ON MARKETING

1) Summary
This paper discusses in detail the research proposal on the impact of CRM systems on marketing. In particular, the research will focus on the effects and influences of CRM systems in marketing activities of organisations. In this research proposal, the background, context of CRM and relevant themes are presented; the partial literature review is presented as well; the design, problems, aims and objectives are formulated; and the questions are stated. The questions presented is comprised of statements on benefits, issues, problems, challenges and conflicts the organisations experience upon implementation of CRM systems in their marketing activities. In addition, the rationale and significance of the study are provided and limitations and methodologies of the study are likewise discussed.

2) Introduction
The combination of speed and storage capabilities of computers, along with the connectivity of the Internet, provides a powerful linkage among several functions of the company. CRM systems range from the simplest contact-management systems which focus on assisting individual salespeople to most complex enterprise-wide and cross-enterprise systems. The main role of CRM systems is to connect the suppliers and the customers. CRM systems ensure that customers have a consistent experience across multiple sales channels. An effective implementation of a CRM system meets the needs of the customer, the salesperson and the company by means of utilizing system elements in several, different ways. Such elements and its implementation mirror the success or failure of the marketing design of any organisation as the management-centered functions of CRM system (Zoltners, 2001). This study aims to explore this issue and will attempt at identifying the impact of CRM systems on the overall marketing system of the company.

3) Background
What is CRM? Customer relationship management, better known as CRM, is a set of strategic practices that purports finding, marketing to, selling to and servicing customers. CRM is a broadly used term that covers different functions and concepts of organisations in aspects of operational, collaborative and analytical frameworks. There are many benefits the company could derived upon implementation of CRM systems. These benefits are: customers, suppliers and co-suppliers linkage, access, hassle-free communication, reduction of implementation cycles, centralised and regularised systems upgrade, centralisation of maintenance and enhancement expertise and homogenisation of CRM technology (Zoltners 2001).

The elements of the CRM system include customer encyclopedia customer and prospect profiles, needs; product encyclopedia product profiles, product configuration tools, references; pricing and proposals pricing, proposals, presentations; ordering, planning and tracking orders, results, activities; training product, customer management, planning; administration expense, commissions, general tools; analysis sales analysis, forecasting, office suite; communication electronic mail, intranet, internet, telemarketing tools; system enhancement configuration, maintenance, upgrade; and customer support frequently asked questions (opere citato). The management-centered functions of a CRM system is consist of reporting and forecasting of sales, communicating with salespeople and other company personnel, capturing and disseminating best practices, reporting sales force activity, comparing actual results with forecasts, designing and managing sales territories, analysing marketing and sales programs in terms of market, territory, product, customer type, price and channel, and enhancing and streamlining work flow and processes (opere citato). CRM and Marketing The goal of CRM in marketing is to move C-level customers up to B-level customers and to move B-level customers up to A-level customers and to motivate A-level customers to stay in that position. CRM initiatives ensure that the company is the customers first choice. The role of CRM systems in marketing is to utilise the product and campaigns to reach the masses through targeting and establishing relationships. CRM embraces the idea of a highly-individualised marketing or a one-to-one marketing process. In this way, markets are carefully segmented and responded to. Likewise, this process could build a communication based on customised products and tailored messages. The concept of one-to-one marketing comes together with permission marketing. Permission marketing implies that the customer will have the final say regarding when and for what reason he or she will accept to be interrupted. Hence, there must a value for him or her for such an interruption (Dych 2001). If there are management-focused CRS functions, there are also salesperson-focused. The specific functions of CRM system for this group are comprised of the following: management of accounts and distributors, tracking sales by customer, planning and reporting sales calls, automating sales plan and tactics, answer requests for product literature, track leads (management of a tickler file), manage contacts, make computer-based presentations, access competitive intelligence online, enter orders, check inventory and order status, report and check expenses, calculate incentive earnings, word processing, manage a personal calendar, get geographic information and routing, use electronic mail, access the Internet and receive training (Zoltners 2001).

4) Rationale
The issue is decided to be investigated mainly because the researches regarding CRM systems focus on general themes. However, there are many specific topics that could be explored regarding the application of CRM systems. There is need to increase the limited knowledge

regarding the implications and effects of CRM systems in marketing. This study proposes to focus on marketing activities of organisations. The rationale of the study is to determine the benefits and downsides of CRM systems implementation in marketing.

5) Literature Review
According to Starkey and Woodcock, there is a correlation between customer management (CM) and business performance. The expenditure on customer relationship management (CRM) base on IT systems has increased over the years. However, many CRM systems fail. The two authors claimed that the actual performance regarding customer management is not improving. Though spending on CRM is enormous, there had been a high CRM failure rate. Many reasons are to be accounted for this such as the 9/11 attack and the changing nature of technology. Companies seemed to experience real problems in implementing CRM. Their findings proved several reasons for the decline of CRM implementation efficiency. These are the inadequacy in senior executive ownership and leadership; the misalignment in strategies and actions in CM implementation; the siloed approach in implementation; the misalignment of CM behaviours with organisational culture; shortage in expertise and skills; the unrealistic roadmaps and poor programme management. Another research is carried-out by Mithas, Almirall and Krishnan about the effectiveness of CRM systems in one-to-one marketing. The purpose of their study is to provide an assessment of the causal effect of CRM applications on one-to-one marketing effectiveness. They use a propensity score approach to determine such causality. Their study included the discussion of the strengths and challenges of using this approach and its applicability on electronic commerce of a firm. Their finding include: firms using CRM systems have greater levels of one-to-one marketing effectiveness (2006).

6) Significance of the research

The study could provide a better understanding on the risks and costs of improper implementation of CRM systems at least. From a broader sense, this research could significantly contribute to corporate decision-making whether the application of CRM systems is the best option for the company based on actual, positive and negative implications on marketing aspect as this study proposes. For the CRM systems-providers, the findings of this research will also contribute to the restructuring of the whole system to compensate for the limiting aspects this research could present particularly in the marketing schema of the organisations. Studying this issue may help suppliers and companies to create strategies on how to address specific weaknesses and develop courses of action based on strengths. For the literature, the academic contribution of this research is to help students improve their learning skill regarding CRM systems and how it applies to marketing. Student can go deeply into the topic areas presented and could extract areas of improvement. These areas could be another topic of research. This study could be an important management or information technology endeavor in the academia.

7) Design
This study will adapt an interpretivism approach of research. The main aim of this approach is to understand situations and give plausible and acceptable accounts regarding the matter (Varey, Wood-Harper & Wood, 2002). The interpretivism philosophy will guide the researcher in making sense of the result of the study by providing logical interpretations. For this study, the researcher will be permitted to provide details of the situation in order to understand the reality or perhaps discover a reality that works behind them (Remenyi, et al 1998). The subjective meanings that motive the people could be further explored.

8) Research Problems
CRM technology is basically a new application. There are a lot of aspects to improve especially when it comes to marketing. In general, the problem will be addressed in the study is the degree of effectivity of CRM systems on marketing activities of the organisation that includes campaigns and campaigns response tracking, campaign analysis and reporting, event marketing, trade promotions, trade and revenue tracking, e-marketing, telemarketing, electronic mail marketing and direct mail marketing for organisations. Beyond this, the ways to measure the efficiency of CRM systems implementation on marketing proposes and how do CRM systems implementation contribute to effective management of CRM systems application in marketing are other problem areas.

9) Objectives
The main objectives of the research focuses on investigating the impact of CRM systems implementation as applied in marketing concepts of the organisations. By exploring CRM systems in marketing, the specific objectives of the study would be to identify the implications and effects of CRM systems in marketing; to explore the CRM systems implementation experiences of organisations that focus on marketing area and to determine different themes and concepts of CRM systems in marketing.

10) Research Aims

The overall aim of this paper is to explore and to investigate the impact of the CRM systems and its implementation on marketing applications. Specifically, the paper will try to reveal the general customer behaviours in existence. This will also include the exploration on patterns of customer satisfaction, retention and loyalty. Prior to this, the paper will try to present information on the recent CRM systems in use in marketing and to discover its importance. In addition, the paper will also seek to discuss the benefits and limitations of CRM systems in marketing and how it could possibly improve the overall performance and position of the organisations. Other research aims directly points at revealing the effectivity of campaigns, marketing strategies and distribution channels. To explore how CRM systems deliver different advantages and how CRM systems add value to the products and services are other aims of this research. Moreover, the research will also aspire to investigate customer information

management which includes responses and relationships. Finally, the paper will aim to compare actual practices on organisations with benchmark practices.

11) Research Questions

1. Do CRM systems reflect the buying behaviour of the customers? 2. What are the most recent CRM systems available for marketing? 3. How important is the implementation of CRM systems in marketing activities of the organisations? 4. What are the benefits and limitations of CRM systems in marketing? 5. How does the implementation of CRM systems in marketing affect the general performance of the organisations? 6. Is the implementation of CRM systems in marketing improved the current position of the organisations? 7. What are the strategic planning activities does the CRM systems provide the organisations? 8. What are the problems encountered by the organisation in implementing CRM systems in their marketing activities? 9. Is CRM systems implementation an effective tool towards achieving competitive advantage? 10. Is CRM systems implementation a strategic tool towards achieving cost advantage? 11. How do CRM systems add value on products and services? 12. How do CRM systems measure the effect of campaigns? 13. How do CRM systems measure the effectivity of distribution channels? 14. How do CRM systems contribute to customer satisfaction and retention? 15. Are CRM systems proven ways of managing customer informations? How? 16. Do CRM systems assure customer responses? 17. Do CRM systems provide adequate information on understanding competition? 18. In what ways do CRM systems contribute to customers loyalty? 19. Does the implementation of CRM systems affect the supplier-buyer relationship? In what ways?

20. What are the best practices that emerge in CRM systems implementation as applied in marketing as compared to benchmark practices?

12) Limitations of the Proposal

The general limitation of the study is manifested in the chose of area to be explored. This research greatly focuses on marketing area of the organisation. Another potential limitation of the study is the number of samples. The target number of sample is relatively small compared to the total number of companies that use CRM systems in their marketing worldwide. However, the validity of the data is sufficient in producing a general idea on the impact of CRM systems in marketing. Furthermore, a recommendation for future studies will be provided to promote a continuous investigation on this matter.

13) Methodologies
The research will utilise a descriptive method. As a descriptive research, the paper will present facts that concern that nature and status of the situation. The study could describe present conditions, events or systems based on the impressions or reactions of the respondents of the research (Creswell 1994) as well. The relationships and practices that exist, the beliefs and processes that are ongoing, the effects that are being felt or the trends that are developing could be also explore in descriptive researches (Best 1970). The primary stage of the research will employ a qualitative research as the literature reviews will be presented as primary data. It will be obtained from published articles on business, marketing and management journals and electronic resources. Theses and related studies on CRM implementations will be also studied and explored. On the secondary stage, quantitative research will be employed. The secondary data will be the survey outcomes for 25 companies that are using CRM systems in their marketing activities. The data collected from this survey will be subjected to statistical analysis. The researcher will use percentage and weighted mean in data analysis.