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EXECUTIVE MASTERS

ASSIGNMENT
MARKETING & CRM

Question
Narrative:
There are companies (local and foreign) that have maneuvered and survived in
highly complex and rapidly changing business and social environments. Choose
two companies that have been successful and describe how these companies
challenged the uncertainties and soared the great heights in the business world.

INTRODUCTION
As weve seen the key objective of an organizations marketing efforts is to develop satisfying
relationships with customers that benefit both the customer and the organization. These efforts
lead marketing to serve an important role within most organizations and within society.
At the organizational level, marketing is a vital business function that is necessary in nearly all
industries whether the organization operates as a for-profit or as a not-for-profit. For the forprofit organization, marketing is responsible for most tasks that bring revenue and, hopefully,
profits to an organization. For the not-for-profit organization, marketing is responsible for
attracting customers needed to support the not-for-profits mission, such as raising donations or
supporting a cause. For both types of organizations, it is unlikely they can survive without a
strong marketing effort.
Marketing is also the organizational business area that interacts most frequently with the public
and, consequently, what the public knows about an organization is determined by their
interactions with marketers. For example, customers may believe a company is dynamic and
creative based on its advertising message.
At a broader level marketing offers significant benefits to society. These benefits include:

Developing products that satisfy needs, including products that enhance societys quality
of life

Creating a competitive environment that helps lower product prices

Developing product distribution systems that offer access to products to a large number
of customers and many geographic regions

Building demand for products that require organizations to expand their labor force

Offering techniques that have the ability to convey messages that change societal
behavior in a positive way (e.g., anti-smoking advertising)

While marketing is viewed as offering significant benefits to organizations and to society, the
fact that marketing is a business function operating in close contact with the public opens this
functional area to extensive criticism.
Among the issues cited by those who criticize marketing are:
Marketing Encourages People to Purchase What They Do Not Need
Possibly the criticism most frequently made about marketing is that marketers are only
concerned with getting customers to buy whether they want the product or not. The root of this
argument stems from the belief that marketers are only out to satisfy their own needs and really
do not care about the needs of their customers.

As we will discuss, while many marketers are guilty of manipulating customers into making
unwanted purchases, the vast majority understand that undertaking such tactics will not lead to
loyal customers and, consequently, is unlikely to lead to longer term success.

CRM
CRM stands for customer relationship management. Most commonly, the term CRM is used in
respect to how a company interacts with customers when marketing the companys products or
services. More specifically, CRM relates to how a company interacts with its customers by
sending out promotional emails or hosting special events it invites the customer to attend and
what the response from the customer is. Use
CRM is typically composed of three aspects of marketing. First, its how companies interact with
their customersemail, hard-copy newsletters, sales letters and events. Second, its the software
that companies use to manage their customer interactions; third, its the Internet capabilities
companies use to interact with customers. Marketing departments use CRM to measure how
marketing efforts are working to keep customers engagedto keep customers purchasing from
the company time and again.
In essence, customer retention management is building a database of customers. The customer
database is a collection of customer information. Information may include the customer name
and shipping address, but it may also contain other information such as a birth date, age,
household income, spouses name and the list can go on and on. For marketing purposes, this
information helps the marketing manager or other employees to determine who the customers
are.
Benefits
One of the benefits of CRM marketing is it allows companies to determine who its best
customers are. Once a company knows precisely who its target audience is, the company can
then tweak its marketing messages to attract more of the ideal types of customers that the
company has been servicing. The gathering of this information with the use of CRM also allows
companies to create new products and services that meet the needs and wants of its customers.
Segmentation
The general rule of thumb is that 80 percent of a companys business comes from 20 percent of
its customers. CRM systems are also used to track customer sales and behaviors. Using CRM
systems to track customer purchasing behavior or which email links the customers click on when
you send an email from your business can help you increase the amount of business you gain
from each customer. Tracking this information allows you to segment your target audience.

Segmentation allows you to further modify your messaging and offerings to meet the needs of
the different sub-segments of your overall target audience.
Software
Various types of software systems are available for businesses to implement and manage CRM.
Some of the software systems cater to specific industries while others are more general. Larger
companies often have a person in the organization who is responsible for inputting the data into
the CRM system and running reports to analyze the data and report the findings to the marketing
manager as well as upper management.
Tracking Contact
CRM systems also track interactions with the customer. The database tracks each time a
promotional email is sent to the customer and what the message in the email contains. The CRM
also tracks the response from the customerthe customer clicked on a link in the email and
made a purchase on the company website or called customer service to ask a question and what
the question was. Generally, the marketing manager reviews the information for customers who
are dormant and makes a decision to either do a special promotion to re-engage the customers or
purge them from the CRM system.

CASE ANALYSIS 1
a. IKEA (SWEDEN)
IKEA is a privately held, international home products company that designs and sells ready-toassemble furniture such as beds and desks, appliances and home accessories. The company is the
world's largest furniture retailer. Founded in 1943 by 17-year-old Ingvar Kamprad in Sweden, the
company is named as an acronym comprising the initials of the founder's name (Ingvar
Kamprad), the farm where he grew up (Elmtaryd), and his home parish. IKEA has 300 home
furnishing superstores in 35 Countries and was visited by some 583 million shoppers. IKEAs
low priced elegantly designed merchandise displayed in large warehouse stores, generated sales
of $21.2 billion in 2008, up from 4.4 billion in 1994. The fledgling company sold fish, charismas
magazine, and seeds from his family farm. His first business had been selling matches, the
enterprise Kamprad purchased them wholesale in 100 box lots and then resold individually at a
higher mark up. Before long, Kamprad had added ballpoint pens to his list and was selling his
products via mail order.
In 1948, Kamprad added furniture to his product line. In 1949 he published his first catalog.
Kamprad hired 22 years old designer, Gillis lundgren originally helped Kamprad to do photo
shoot for catalog but, later he became a designer of many furniture for IKEA. Its goal was over
time to provide stylish functional design that can be cost effective. Ultimately this led to concept
of what IKEA calls democratic design. In 1957, IKEA started to exhibit and sell its products at
home furnishing fairs in Sweden. By 1958, an expanded facility at the Almhult location became
the first IKEA store. The original idea behind the store was to have a location where customer
could come and see the IKEA furniture set up. Kamprad experimented with adding restaurant to
the store so that customers could relax and refresh when shopping. The restaurant was hit and, it
became an integral feature of all IKEA stores. In 1965, IKEA opened its first store in Stockholm.
By now, IKEA was generating the equivalent of $ 25 million and had already opened a store in
neighboring Norway. IKEA experimented with a self service pick up solution, allowing shoppers
to enter the warehouse, load flat packed furniture on to trolleys and then take them through the
checkout. It was so popular that soon it became the company norm in all stores. By 1973, IKEA
was the largest furniture retailer in Scandinavia with nine stores. The company enjoyed market
share of 15% in Sweden. The main in charge of European expansion was Jan Aulino, Kamprads
former assistant, who was just 34 years old when the expansion started. IKEA also entered in
North America, opening 7 stores in Canada between 1976 and1982 and got success then in 1985
in entered in United States later the company found that its European style offerings did not
always resonate with American consumers. IKEA also acquired Britains Habitat in the early
1990s and to run it under the Habitat brand name. In total there were 285 IKEA stores in 36
countries and territories. And important limiting factor on the pace of expansion was building the
supply network. Later IKEA opened its store in China. In china store was located near public
transportation, and IKEA offers delivery services so that Chinese customers can get their
purchase home. The store them salve are large warehouse festooned in the blue and yellow color

of the Swedish flag that offers 8000 to 10000 items, from kitchen cabinet to candlesticks. There
plenty of parking outside and the stores are located with good access to major roads. The interior
of the stores is configured almost like a maze that requires customers to pass through each
department to get to the checkout. By 2008, IKEA had 1380 suppliers in 54 countries. IKEA
always maintain a good relation with its suppliers and insist them to buy new technology so that
the production cost could decline. In common with some other retailers, IKEA has launched a
loyalty card in its stores in Sweden, Denmark, Finland, Turkey, the UK, Australia, Netherlands,
Belgium, Germany, Austria, Russia, China, Japan, Switzerland, Czech Republic, Slovakia,
Ireland, Poland, Italy, Hungary, France, Dominican Republic, Portugal and Spain called "IKEA
Family." The distinctive orange card is free of charge and can be used to obtain discounts on a
special range of products found in each IKEA store. In particular, it gives 25% off the price of
commissioned ranges of IKEA products on presentation of the card. The card also gives
discounts on food purchased in the restaurant and the Swedish Food Market. In the Netherlands,
Australia, Denmark, Finland, Germany, Austria, Russia, Japan, UK, Switzerland, Slovakia,
Czech Republic, Italy and Poland it also entitles the holder to free coffee in the restaurant. In
Spain, France, Hungary, Czech Republic, Belgium, Ireland and Poland, this offer is only
available on working days. Despite its Swedish roots, IKEA is owned and operated by a
complicated array of not-for-profit and for-profit corporations. The corporate structure is divided
into two main parts: operations and franchising. Most of IKEA's operations, including the
management of the majority of its stores, the design and manufacture of its furniture, and
purchasing and supply functions are overseen by INGKA Holding, a private, for-profit Dutch
company. Of the IKEA stores in 36 countries, 235 are run by the INGKA Holding. The
remaining 30 stores are run by franchisees outside of the INGKA Holding. INGKA Holding is
not an independent company, but is wholly owned by the Stichting Ingka Foundation, which
Kamprad established in 1982 in the Netherlands as a tax-exempt, not-for-profit foundation. The
Ingka Foundation is controlled by a five-member executive committee that is chaired by
Kamprad and includes his wife and attorney. While most IKEA stores operate under the direct
purview of Ingka Holding and the Ingka Foundation, the IKEA trademark and concept is owned
by an entirely separate Dutch company, Inter IKEA Systems. Every IKEA store, including those
run by Ingka Holding, pays a franchise fee of 3% of the revenue to Inter IKEA Systems. The
ownership of Inter IKEA Systems is exceedingly complicated and, ultimately, uncertain. Inter
IKEA Systems is owned by Inter IKEA Holding, a company registered in Luxembourg. Inter
IKEA Holding, in turn, belongs to an identically named company in the former Netherlands
Antilles that is run by a trust company based in Curaao. In 2009, the company in Curaao was
liquidated. The company responsible for this liquidation traces back to the Interogo Foundation
in LiechtensteinIngvarKamprad has confirmed that this foundation owns Inter IKEA Holding
S.A. in Luxembourg and is controlled by the Kamprad family. In 1986, Kamprad gave up day to
day control to Andres Moberg, a 36 year old Swedish who had dropped out of college to join
IKEAs mail order department. Despite relinquishing management control, Kamprad continued