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I Need PowerPoint file 5 slides on this attachment I uploaded
I Need PowerPoint file 5 slides on this attachment I uploaded
Nike’s objective associated with the implementation of a customer relationship management (CRM) system: Nikes goal is ” to carry on a legacy of innovative thinking, whether to develop products that help athletes of every level of ability reach their potential, or to create business opportunities that set Nike apart from the competition and provide value for our shareholders.” Co-founder and chairman Phil Knight delineates Nike as a marketing orientated company and states that marketing their products is the company’s core competency (Willigan, 1992). Due to the company’s marketing activities and product innovations, Nike holds a strong market position in most of its product segments which are Clothing, footwear, sportswear and accessories (Datamonitor, 2011). Nikes marketing activities are mainly revolved around the sponsorship of athletes and athlete’s teams and using top sportsmen as brand endorser. In line with the mission statement, Nikes key target group are athletes. Other than sportsmen, Nike targets the youth that have embraced the Hip Hop culture. One of Nikes major strengths is its strong brand equity (Datamonitor, 2011). Nike is an expert in brand building, the catch phrase “Just do it” has become more of an idiom than an advertising slogan (Willigan, 1992). In 2011, Nikes brand equity was valued at $14,528 million, which makes the brand the 25th most valuable brand worldwide (Datamonitor, 2011). A look at the scope of duties of the different departments of Nike reveals that a central part of Nikes global marketing activities is telling a story about the Nike brand (Nikeinc.com, 2012). An authentic brand story helps to distinguish a brand from its competitors and brings the brand to life (van de Wiel, 2009). Nike emphasis their employers from the brand management department to the retail staff to tell customers the story about Nike. The objective is to make to customer want to become part of the story, which of course can only be achieved by buying Nike products. Moreover Nikes extensive use of celebrity endorsement has helped to establish a strong brand identity and brand personality.A Nike head is “a person that is very much dedicated to wearing Nike sneaker”. The fact that a special slang term evolved for its die hard customers underpins Nikes strong brand. Involvement in a marketing sense is the relevance a person attaches to a certain product or brand, based on their needs, values and interests (Solomon, 2010). Relationship Marketing could be difficult to apply for low-risk, low involvement products, since in that area a relationship with the supplier can often hardly add a value to the customer. Relationship marketing is most qualified for high involvement products (Godson, 2011). The involvement with clothing is dependent on the degree to which the costumer uses clothing as a means of self-expression (Michaelidou, 2006). A sizeable proportion of Nike customers use the company’s products as a means of self-expression and to be accepted within their peer groups; hence the involvement with Nike products is high. Marketing campaigns of Nike’s: Relationship Marketing: According to Godson (2011), relationship marketing is a “marketing approach that is based on networks, interactions and relationships”. Morgan and Hunt (1994) propose that relationship marketing includes all marketing activities that aim at establishing, developing and maintaining successful relational exchanges. Gummesson (2008) defines relationship marketing as marketing that is “based on interactions within networks of relationships”. In line with the previous, Kotler (2011) delineates relationship marketing as having multifarious relationships with marketing partners. Within the last two decades relationship marketing has become a widely accepted marketing paradigm (Finne and Gronroos, 2009) but It is debatable whether relationship marketing is a fundamentally new marketing approach or if it has been part of the traditional marketing theory all along (Payne, 1995). Godson (2011) points out that the main aim of relationship marketing is the development and maintenance of long term relationships with all stakeholders of a business. The most important stakeholder for most businesses is the customer. Against the backdrop of an increasingly competitive business environment, companies are forced to keep their customers loyal, ensure their satisfaction and find out as much as possible about them (Kotler, 2011). Truly loyal customers are less price sensitive, more likely to give referrals and more responsive to promotion & communication campaigns (Godson, 2009). Hence, a company’s profitability and its ability to retain customers are positively linked (Reichheld, 1996). Instead of merely focusing their marketing activities on the acquisition of new customers, companies need to balance between customer retention and acquisition (Godson, 2011) When applying Relationship Marketing it is important to add value for the customer, otherwise he would not have a reason to enter a relationship with an organization. This added customer value can occur in the form of more trust to a company, a more customized service, a personal touch and the possibility to better answer customers’ expectations. Due to the characteristics of a product, it is a lot more difficult to offer genuine personal touch compared with services (Godson, 2011), which signifies a challenge for Nike. Transaction Marketing vs. Relationship Marketing: Transaction marketing focuses on a single sale instead of generating repeated sales. Transaction marketing doesn’t differentiate between a repeat customer and a new transaction (Godson, 2011) and disregards customer satisfaction and customer loyalty (Hartung, 2009). Additionally transaction marketing is focused on the product features, happens on a short time scale, neglects customer service (Payne, 1995) and is indirect, impersonal and a one way communication (Gummesson, 2008). Relationship marketing on the other hand focuses on customer retention and continuous customer contact. This marketing approach emphasizes customer value and is long time orientated. A high level of customer service and commitment to meet the expectations of customers are also distinctive features of relationship marketing (Payne, 1995). Transaction marketing activities revolve mostly around the traditional 4Ps of marketing; Price, Place, Promotion and Product (Gronroos, 1994), whereas relationship marketing applies more newly concepts such as permission marketing. Permission marketing was first introduced by Godin (1999) and means that the consumer gives his consent to receive marketing messages from companies. By doing so, the costumer is more receptive to marketing messages because the message is anticipated, personal and relevant (Godin, 1999). Nike uses a mix of relationship and relationship marketing. Nike as a global brand is in the maturity phase of the product life cycle. At this level, relationship marketing aiming at customer retention and loyalty is most suitable. On the other hand, Nike constantly released new products. New products are by nature in the introduction phase of the product life cycle. In this phase transaction marketing is most suitable (Gummesson, 2008). According to the company’s homepage, the focus of Nike retailers around the world is on execution, product presentation and service. Moreover the homepage states that “it’s not about transactions, it’s about connections” (Nikeinc.com). This statement underlines Nikes relationship marketing orientation. On the other hand Nikes uses mass marketing through standardized worldwide advertising campaigns. Mass marketing is indirect, impersonal and one-way (Gummesson, 20008) and therefore can be seen as a form of transaction marketing. Viral Marketing: Viral Marketing is a form of online word of mouth marketing (Kotler, 2012). Due to the fact that viral marketing involves the internet as a medium it can be categorized as an electronic relationship of an organization with the customer. Nike launched several viral marketing campaigns in the recent years. Nikes “Touch of Gold” viral campaign was awarded to best viral marketing campaign of the decade by the marketing magazine “campaign” (campaign magazine, 2009). The short clip, starring footballer Ronaldinho received over 50 million clicks on YouTube. Ronaldinho is shown kicking a ball against the crossbar back to himself over and over again. The amateurish camera work led to a heated debate amongst customers and fans about whether the clip is fake or real and made Nike one of the pioneers of the altered reality viral campaigns (campaign magazine, 2009). This campaign underpins Nikes focus on celebrity endorsement, by using Ronaldinho as the linchpin of the campaign. Moreover it shows the effectiveness of viral marketing: a less than 3 minute clip engaged millions of customers to discuss about Nike. Viral marketing is an effective way of interacting with customers. Nike can create interaction with a high amount of customers with minimum expenses. Viral marketing videos give Nike a personal touch and sharing and discussing viral content within informal networks creates the feeling of belonging for the customer. Customer support of Nike’s: The relationship between an organization and its customers is categorized as one of the three classic market relationships described by Gummesson. According to Gummesson (2008), the relationship between customers and supplier form the foundation of commercial exchange. Nike has millions of customers and it can be argued whether it is possible to create a relationship with all of them (Gummesson, 2008). It is important to notice that the transfer from transaction marketing to relationship marketing offers intermediary forms such as customized mass marketing. This marketing approach aims at creating an impression of a personal relationship between the customer and an organization and therefor is called pseudo-personal relationship (Gummesson, 2008). For a globally operating B to C organization such as Nike, pseudo- personal relationships are an efficient way to manage customer relations at reasonable costs. Ladder of Loyalty: The ladder of loyalty is a model used to evaluate customer’s levels of involvement with a company and its products and to delineate the transition from transaction marketing to relationship marketing (Godson, 2011). Moreover the ladder of loyalty helps to identify the different stages of the development of long term customer relationships (Payne, 1995). The ladder itself comprises of the six stages: Prospect, customer, client, supporter, advocate and partner. Prospects have the lowest level of loyalty and involvement towards a brand and partners have the highest level. The transition from transaction marketing to relationship marketing happens on the client stage. Nikes aim should be to move customers up the ladder of loyalty. The majority of Nikes customers are considered to be on the customer, client and supporter stage but Nike has customers on all stages of the ladder. At the supporter level, repeat buying behaviour turns into genuine loyalty to the Nike brand. The table below differentiates between the different types of Nike customers by applying the ladder of loyalty. Knowledge Relationship (R21): Knowledge of the customer is valuable in order to identify and select target customers. A variety of CRM computer software is available that enables organizations to gather customer data from all customers touch points and subsequently feed it into a central database, where it is accessible to all members of the organization (Godson, 2011). According to Gummesson (2008), the knowledge relationship refers to the way an organization is able to gain knowledge that makes the organization compete more effectively. Nike operates company owned and branded Nike Stores as a touching point with the customers. These stores serve as a means of getting direct feedback about Nike products from customers. This customer information is then processed to the product development department, where it drives the development of new products (Crain, 2008). This system enables Nike to gain valuable customer knowledge without high market research expenditures. The value added for customers is that Nikes products are more in line with its needs. Electronic Relationships (R12): Gummesson (2008) defines electronic relationships as all relationships, networks and interaction based on IT, whereas Godson (2011) describes electronic relationships as relationships that are kept by the usage of an electronic medium. It is important to differentiate between electronic relationships that are controlled and managed by the company itself and those that are run by customers or fans. The advantage of online platforms run by the company itself is that the company is in full control of the content. Online relationships managed by fans or customers involve the risk of brand hijack and the difficulty of controlling the content (Godson, 2011). Brand hijack occurs when a customer commandeers a brand and drives its evolution. It is generally seen as a negative thing, since it is not the company anymore that shapes the brands image but the customers (Wipperfurth, 2005). In the course of the world cup 2006, Nike decided for the first time to attract customers by using online communities. The Nike managed social networking side Joga.com allowed fans to blog, download videos, or discuss football related topics. The idea behind joga.com was to enrol customers to shape the marketing. By the end of July 2006, over a million users sign up and Nike CEO Mark G. Parker sees the results as a success. According to Parker, a strong relationship with Nike is created when someone joins a Nike community and this is the aim of brand management (Bloomberg BusinessWeek, 2006). Nikeblog.com is an example of an online platform managed by customers. According to the operator, the blog has 1.148.257 page visits. The blog is not affiliated with Nike and its purpose is recreation and the discussion of Nike products (Nikeblog.com, 2012). On nikeblog.com, customers can upload reviews on Nike sneakers and engage in discussions about Nike related topics. Due to the fact that the content of the blog is written by customers, the blog has more credibility then company owned websites. Customers trust the recommendations of other customers more than company given information. Moreover Nike don’t have any costs in connection with blogs like that, hence it is free marketing. The positive aspects of customer managed electronic relationships prevail over the negative ones. Customers have the feeling of belonging and being part the Nike community by engaging in blogs and online communities, which is added value for them. The interaction with Nike itself and other Nike customers also gives the company’s relationship with customers a more personal touch. Nike profits from free online word to mouth marketing. Nevertheless Nike should regularly monitor the interactions on the customer run online platforms to prevent brand hijack. Business Systems: Managers are the most important decision makers in an organization. They have an in-depth knowledge of the entire business operation. Business Intelligence (BI) systems, often called Decision Support Systems (DSS) provide Managers of an organization with a functionality or platform to make, visualize, analyze and improve important business decisions. These complex decisions might be based on various subjects of information (for e.g. sales, customer, employee, etc.) collected by different departments of the organization and stored in a common place called a data warehouse. The BI systems, whenever required, grab the information from this data warehouse, apply a few complex analytical algorithms to it and display it to the Managers in the form of reports containing various charts and tables to display the appropriate information in the most effective and efficient way possible. These reports help the Managers to make strategic decisions and plan the next move for the organization. BI systems do not replace a judgment of the manager but support in the management decision- making process and benefits provided by BI systems are often qualitative rather than quantitative. Business Intelligence provides the Managers with an ability to look at more alternatives to a decision, a broader understanding of the business, a better and faster approach to a problem and fine-tune business plans. A considerable research has shown that increasing the restrictiveness of the system may lead to ineffectiveness in problem-solving situations. However, a recent experimental study has shown evidence that features such as degree of choice provided to the user, competition among them and familiarizing themselves with the BI system through training, which are generally considered as beneficial features for a DSS, can increase risky behavior of users. Supply Chain Management (SCM): A complicated system involving an entire chain of activities, starting from acquiring raw materials from various vendors and suppliers to manufacturing the actual product to packaging and distributing it to wholesalers and retailers to supplying it to the final consumer of the product is called a supply chain. A supply chain management (SCM) system consists of integrating and controlling the flow of information between all the departments of the organization (which includes marketing, sales, finance, manufacturing, etc.) and seeing to it that the entire supply chain system is running smoothly. SCM provides a clear understanding of the entire manufacturing process and also helps in planning and automating certain stages in the supply chain to produce and deliver the products faster and with efficiency to the right consumer. Development and maintenance of SCM involves high complexity and costs. Due to its complex nature, often many crucial functionalities are oversighted and companies face chances of errors in their results. Enterprise Resource Planning (ERP): Enterprise Resource Planning (ERP) Systems are used to manage and integrate business processes of an organization which includes sales and marketing, manufacturing, human resources and product planning. It acts as a one-stop application to manage and automate all the resources related to technology, services and human resources of an entire enterprise. ERP system is the source of an enterprise’s information. Hence, usually large enterprises are seen using these systems. Small scale enterprises use a lightweight version of the ERP to come up with business plans and solutions. The risks involved in implementing ERP include cultural issues with the organization, employee usage training costs, choosing the right consultant and top management’s involvement throughout its development process. Customer Relationship Management (CRM): Customer Relationship Management (CRM) is a process which enables companies to collect customer data, examine their preferences, form marketing, sales and customer service and support strategies to meet their requirements, reach the right customers at the right time and analyze the result of following those strategies through overall customer data collected. For the best impact of using a CRM system, the service delivery and response time should go hand-in- hand. Relationship between the systems: Since all of the four discussed systems are extremely costly to develop and maintain, there are high risks of companies ending up losing time and money on these projects. A large amount of data is collected, analyzed and used by these complex systems and therefore, a dedicated team of technical and analytical experts is required to customize and handle these systems. However, all of the four systems can be used by an organization in order to generate large profits by improving their work efficiency and effective growth. DSS and supporting tools could identify and assess multiple constructs and criteria that impact the performance of a sustainable SCM (Taticchi, Paolo, et al., 2015). Nowadays, the usage of ERP systems has increased in every industry domain. Almost all large-scale industries use ERP based solutions provided by leading companies like SAP and Oracle. Currently, most Supply Chain Management Software vendors provide supply chain planning functions which are based on ERP systems to carry out the execution of the planned tasks (Buxmann, Ahsen, Diaz, and Wolf, 2004). Also, most of the CRM software now are being implemented using ERP based solutions. The implementation of SCM, CRM, and ERP will provide competitive advantage: Firms with a competitive advantage over others typically have access to special resources that others do not or are able to use resources more efficiently, resulting in higher revenue growth, profitability, or productivity growth (efficiency), all of which ultimately in the long run translate into higher stock market valuations than their competitors.Michael Porter’s competitive forces model describes five competitive forces that shape the fate of the firm.