How To Develop A New Relationship Marketing Strategy
The enterprise market relationship strategy has an important role in business operation. From the Aurora Company's specific example, this article analyzes the company's organizational structure, the internal and external communication of the company and how to build the enterprise market relationship strategic. First, this paper introduces the Aurora Company's actual operating conditions, including the corporation history, the corporate relations and the corporation communications and so on. In the third part of this paper, according Aurora Company, we introduce a new management theory - stakeholder management, detailing the business stakeholders, business communication with stakeholders, business structure and stakeholder management. In the fourth section, we present some effective measures. These measures are under the guidance of stakeholder theory, which is used to improve the unreasonable management of Aurora Company. In the fifth section, the paper designs a new marketing relationship strategic management model, which includes the business, market and stakeholders, comprehensively analyzing the various factors affecting the enterprise market. Finally, we draw a conclusion of this article.
2 The Aurora Corporation
2.1 The introduction
Established in 1965, Aurora Corporation started its business by selling automatic time clock in Taiwan. On the basis of sustained growth, the company has been exploited and progressed in many business domains which include office furniture, telecom, office equipment (Office Automation), and vocational education and so on. Aurora is successfully being famous brand in Southeast Asian countries. In the early 90's, with a forward-looking vision, the company has foreseen the potential opportunities in China market. Therefore, and began the investment to create an ideal base for the brand of Aurora Group. Currently, Aurora Group in China focuses on selling office furniture, equipment, and consuming electronics and expands the scope of business to east, north, mid- and south China. The number of its distributors in China is now over 200 and is still growing. As the leader in the field of e-generation digitalized office environment and well-know brand name awareness in furniture industry, it is merited and instructive to learn and explore the accomplishment of Aurora Group in relationship marketing.
2.2 The different relationship in Aurora：
The corporation relationship includes the internal department relationship and external relationship. The internal relationship is the premise and foundation of business activities, to ensure the smooth daily operation of the business. The external relationship includes the design of organizational structure, departments and division and communication networks. Aurora is a large multinational company, so its organizational structure is the M-type structure, with a more complete internal communication network. As the general, companies will not disclose the specific organization relationship, so this article does not provide the specific internal relationship. The corporation external relationship is the relationship with outside interest organizations, including the suppliers, customers, governments, competitors and other relations. Figure 1 is the relationship between Aurora Corporation and its stakeholders.
Figure 1: the relationship between Aurora Corporation and its stakeholders
2.3 The communications of the Aurora Corporation
It is all known that Aurora Corporation is a large multinational company, so communication pays a very important role in the company in Aurora. The communication Aurora used includes:
(1) Public Relations (sponsorship, press releases and lobbying): Aurora often sponsors some famous sports event in china. For example: 2002 Official Supply of Official Supply and 2004 the member of F1 Chinese race Organizing Committee. These activities improve brand name awareness and create the opportunities the public know Aurora product.
(2) Public service broadcasts and Videos. Public Service Announcements are advertisements that are printed or broadcast free of charge. Normally media groups are glad to broadcast the qualifying and non-profit organizations that provide a service to the public. Media coverage offers the dual advantage of being cost-free and carrying more credibility than paid advertisements.
(3) Events (special days, awards, exhibitions, seminars) (a) Special Days: The company take use of a special issue day that yearly be commemorated. It can be seen effective way to raise awareness of Aurora Group. These events tend to generate extensive media interest which multiplies the message to transmit by the different events and activities. (b) Entertainment and Social Events: The Corporation has organized Aurora Cup Golf Invitational with China Ming Sheng Bank every year, which is a good platform for communication between Aurora and the business partners, the customers as well.
2.4 The relationship marketing in Aurora
Advances in multimedia technology has increased opportunities for two way communication and interactive between the customers. There is a periodic and ongoing demand for products or services in many markets. Tracy Harwood, Tory Garry & Anne Broderick (2008) pointed that Aurora are aware of that consumers are not just passive absorbers and the ongoing relationship is beneficial for the development of organization. Aurora has established a good network of market relationship and marketing channels to ensure the smooth realization of business objectives.
3 The stakeholder management - based on Aurora's analysis
With the economic and social development, the modern society increasingly high demand of the enterprises. To adapt to modern business management is not only limited to products, production, sales and customer management. Modern business management must consider the various factors affecting business, including internal factors and external factors. Stakeholder management theory has become a modern enterprise management theory, to effective analysis of various business factors. (Laplume Andre. O, 2008)
3.1 The stakeholders
The stakeholders refer to those individuals and groups can affect the realization of business’ goals, can be divided into direct stakeholders and the expansion of stakeholders. The former includes the personal and investment institutions, customers and staff. (Mitchell et al, 1997) The latter includes suppliers, government, community, media and competitor. According to whether there is trading of contracts and business relationships, Charklan (1992) points out that the stakeholders are divided into: Contractual stakeholders, including shareholders, employees, customers, distributors, etc.; public stakeholders, including consumers, government, media and community. The mutual interests of the stakeholders and company determines the operation and management of enterprises. Figure 2 shows the relationships between enterprise and its stakeholders.
Figure 2 the relationships between enterprise and its stakeholders.
3.2 The enterprise communication with stakeholders
The enterprise communication, which is different from interpersonal communication, includes the interpersonal communication and the external communications. Internal communication is based on interpersonal communication, which happens among the different depart of the enterprise. The external communication is the communication between the enterprise and its external stakeholders. (1) The internal communication. The internal communication is the communication and information sharing between internal staff, which is an important foundation of the business activities. It includes the communication background, the initiator of communication, the communication encoding and decoding, the communication channels, the communication interferences, the communication receivers and the communication feedback. The enterprise is the clustering groups, according to certain rules and procedures to achieve a common goal. The business goals depend on organizational communication and the effective organizational communication within the organization is conducive to the full information flow and sharing, which can improve the organization efficiency, and enhance the science and rationality of organizational decision-making. The key communication factors include: Information: Information is the premise of corporate communications, which includes financial information, human resource information, operating information, and other routine information. Tool: At present, the main communication tools include telephone, letters, manuals, Internet and conference. Way: Internal communication is divided into the formal communication and informal communication. Formal communication system generally refers to the information transfer and exchange organization, according to the organization principles. Informal communication refers to the communication between employees and there is no fixed form and manner.
(2) The external communication. The external communications principally refer to the communication with customers, suppliers, government departments and other external organization or individuals. The main purpose of external communication is to reach a consensus with each other to obtain a win-win result. The most important part of business stakeholder management is to manage the relationship between business and the external organizations. The modern business enterprise is not only faced with operation pressure, but also faced with social, moral and legal pressure. The communication between the enterprise and customers is the most important part because the enterprise needs to promote their brand and reputation; The enterprise must also keep a good relation between the government, which is conducive to the corporate social image, in order to avoid the pressure of the law and government; The relationship between the enterprise and its competitor is the important reference value for the business strategy development. The corporate external communication must take into account the choice of communication tools, to ensure effective communication can be carried out. In 2.3, we have introduced the Aurora Corporation common communication tool. It can be clearly seen that using the right communication tool can achieve a surprising result. For example, the Aurora Company takes a variety of ways to promote their brands, and hold a variety of social activities to enhance the relationship between the company and government, community and society, not only help to enhance the brand value, but also to improve the corporate social responsibility.
3.3 The relationships between the internal structure and stakeholders
In traditional enterprises, the highest authority is the shareholder meeting. In the perspective of stakeholder management, the highest authority of the enterprises should be the general assembly of stakeholders rather than shareholders. (Fassin. Y, 2009) Therefore, the modern model of corporate governance structure has undergone a great change. The specific structural model was shown in Figure 3.
Figure 3: The modern specific structural model
Figure 3 clearly shows the modern enterprise management structure, under the guidance of the stakeholder management. Therefore, changing the inappropriate organizational structure is the premise for stakeholder management. The Aurora Company's analysis shows that although stakeholder management of Aurora Corporation has made some significant achievements, but in essence, the Aurora Corporation did not adequately take into account the relationship between the corporate structure and the stakeholders. The company structure must be accordance with the environment of modern management and the business strategy. In order to achieve a better business performance, the company must change the previous management model and establish a good stakeholder management.
3.4 The stakeholder management
The stakeholder theory is born in the background of management diversity and complexity, its main aim to analyze the relationship with stakeholders to help the enterprises to choose the right development strategy and business model. (Brenner, 1911)The external stakeholder management can generally be divided into four steps: (1) To determine the enterprise stakeholder: Facing the numerous external organizations, the enterprises must first determine which organization will affect the enterprise's decision making. (2) To analyze the interests of stakeholders - the product quality, the safety or working conditions, environmental protection? (3) To determine the importance of stakeholders. After ensuring the enterprises stakeholders, the companies need to make a reasonable allocation of its weight according to the impact of business factors. (4) To develop the stakeholder management. The enterprises should determine how to obtain the effective management and how to keep an appropriate relationship with the stakeholders. In 2.2, we can see the different stakeholders of Aurora Corporation. Aurora Corporation also identified the different stakeholder management approach to ensure the business stakeholder management was able to achieve a good result.
4 The effective measures - to improve the Aurora Corporation operating performance
In the third section, we detail a new method of management - stakeholder management. From the perspective of stakeholder management, we find that Aurora Company still has a number of areas for improvement, which can achieve a better business performance.
4.1 To establish a comprehensive stakeholder relationship
With the new economic environment and management background, the social demands of enterprise management have taken place some great changes. The traditional enterprise management only focuses on the creation of social wealth and achieves the interests for shareholders. In the modern enterprise management, the society pays more and more attention on the corporate social responsibility, thus stakeholders affecting the business have become more complex. The enterprises not only face the shareholders, creditors and government’s oversight, but also have to properly deal with the relationship with the public, the media, community and a number of environmental organizations. The standard to measure a company is no longer the profitable, and the corporate social responsibility should also be considered. From the Aurora Corporation's relationship, we can see that Aurora Corporation is not fully aware of some organizations which can influence the operating performance of company. Although the Aurora Group makes a great progress in social responsibility, it does not understand the interest groups from a strategic view. Figure 1 clearly shows this point. Aurora Corporation only views the shareholders, creditors, distributors, customers and other traditional stakeholders as the main factors affecting its management and does not realize the importance of some social organizations. Therefore, the Aurora Corporation should determine the overall business stakeholders to develop a more comprehensive model of stakeholder relationship. Only by fully understanding the impact of business stakeholders, the enterprises can take the appropriate measures and methods to ensure the development of its business.
4.2 To construct a reasonable organization structure
It is known that the organization structure is the core premise of enterprise management. In the context of economic globalization, the traditional organizational structure of enterprises can not adopt the company's operating and development. As a large multinational company, the main organizational structure of Aurora Corporation is M-type structure. Generally speaking, this organizational structure is more suitable for Aurora's actual situation, but there are also some problems. The stakeholder theory tells us that the design of the organizational structure is not only to guarantee the normal internal business activities of enterprises, but also to adapt the relationship with the external stakeholders. M-type organizational structure can ensure a smooth internal communication and the coordination between the departments, but ignore some external stakeholders. Therefore, the Aurora Corporation's organizational structure should be mainly M-type structure, accompany with a number of staff teams and temporary project teams. In the organizational structure, staff officers who come from different professional backgrounds will play an important role, providing some comprehensive and accurate proposals. The stakeholder management theory tells us that business need to consider the interests of different groups, so the enterprises need experts from various fields. The role of the temporary project team is to solve the non-procedural questions. They can ensure the enterprises in face of these problems and can take timely measures. For the Aurora Corporation, it can establish some temporary project teams, dealing with the relationship between government, media, environmental organizations and some social groups.
4.3 To improve the company's communication system
There is no doubt that, in modern business, the decision-making speed and quality is the vital influence for the enterprise management. An effective enterprise information delivery is the premise for business decisions. This includes companies can quickly get the first hand market information and other stakeholders information, then to ensure that the enterprise information can effectively transfer to reach the appropriate decision makers. Therefore, the enterprises must improve their management information systems. From the Aurora Corporation's analysis shows that Aurora Corporation has many comprehensive communication skills and communication channels, and also uses different communication tools to ensure the realization of normal communication. However, the Aurora Corporation's failure is not to establish a comprehensive and integrated information communication system, which affects the communication with some stakeholders, so have a negative impact on the company. A complete communication system includes information gathering, information dissemination tools, networks, information transfer mode and the associated rules and regulations. Therefore, the Aurora Corporation needs to build a complete communication system from the perspective of their overall strategy and the new information communication system must include all stakeholders.
According to the stakeholder theory and the Aurora Corporation's actual situation, we give the above three proposals. We consider from the Aurora Corporation's overall business relationships, internal structure and communication system, giving its reasonable improvements. Stakeholder theory suggests that the factors affecting business includes many aspects, only the combination of those areas can achieve a satisfactory performance. In this section we only give the specific measures for improving the management processes, and the next section we will propose a model of the overall market relationship strategy, to analyze the Aurora Corporation's management framework.
5 A new market relationship strategic for Aurora Corporation
From the above analysis, the corporate strategy needs to take into account the relevant stakeholders. Combined with Aurora's actual situation, we give some corresponding measures. Most importantly, the Aurora Company wants to maintain a favorable market position, needing a new management strategy for market management. Traditional market relationship management only considers the relationship between the enterprise and customers, not taking into account other factors and much less concerning about some stakeholders. These stakeholders pay an important role in corporate sales and marketing. Such as the media publicity will affect the company’s market and the consumer’s attitude; the environmental groups also affect the attitude of customer and the understanding of enterprise products. Therefore, the traditional market relationship strategy no longer meets modern business management. The stakeholder management theory points out that the enterprise wants to establish a good market relations strategy, it must be from a new perspective-base on the stakeholder theory. The stakeholder theory tells us that the enterprise must take into account the affect of various interest groups, if it wants to achieve a good performance. There is no doubt that the profit is the premise of the company existence, and is also the nature of company. But we can not only concern the relationship between business and the market, because it would ignore other stakeholders, which in turn will affect the market relationship. Customer undoubtedly is the most direct and most important stakeholders. The market relations strategy is to develop the relationships with customers, to ensure the customers loyalty and recognition of the company’s products. ( Coviello et al,1997) Figure 4 shows this new market relationship strategic model.
Figure 4: The new market relationship strategic model
The market relationship strategy established in Figure 4 considers the organizational structure, market and stakeholders. This model not only considers the relationship between the company and the market, more importantly, including the impact of the stakeholders. The stakeholder management points out that the influences of market include both the enterprise's own management performance and the impact of corporate stakeholders. From the Aurora Corporation's analysis, it needs to develop a new market relationship strategy, and this strategic model includes the impact of the various elements of its operating performance. The Figure 4’s model satisfies this requirement. To ensure the smooth implementation of this strategy needs to take into account the business, market, stakeholders. In the fourth section we analyze how to improve these specific areas. This comprehensive analysis shows that we not only offers a new market relationship strategy for Aurora, but also gives some specific improvements measures.
The market is a direct business decision-making environment. The market strategy is to make the enterprise's production management target coordinate with the opportunities, to minimize the operational risks, and achieve a higher economic efficiency. The market relationship strategy, at least considers the following aspects: resources, products, business characteristics, market characteristics, competitors and relevant interest groups. Therefore, the enterprise market relationship strategy must take into account all the factors, and our proposed model is based on this consideration. Aurora Company re-builds its market relationship strategy, according to the new model. It must can improve its relationship management market and also able to achieve significant competitive advantages.
This paper gives the Aurora Company's actual management situation, including internal and external relationship, corporate communications conditions and business market relationship. Then we introduce a new management theory - stakeholder management. According to stakeholder management, the Aurora exist some management disadvantages: there is no comprehensive analysis of enterprise stakeholders, organizational structure design is not flexible enough and the lack of effective communication network. According to stakeholder management theory, we first give the Aurora Corporation's specific improvement measures: To establish a comprehensive stakeholder relationship; to construct a rational organizational structure and to improve the business communication system. Finally, we give a suitable strategy relationship model for Aurora. This model includes the business, market and stakeholder, which is a comprehensive analysis of the various factors affect the market. It is sure that it is appropriate for the Aurora Corporation and can give Aurora a good guidance for market relationship management.
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