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Discuss the extent to which the experience perceived by the customer of your chosen organization, is likely to influence by cultural background. Suggest methods that companies could use to profitably accommodate such diversity.
CRM is a specially designed software system for a particular client, to retain old customers and attract new potential customers. CRM works under the basic principle of relationship marketing, building a high-quality relationship with customers is the most valuable assets any business can achieve. With the advent of CRM, it enables the business to understand its customer's buying behavior and build trust systematically. Sir Collin Marshall Chairman of British Airways said "The key is to first identify and attract those customers who will value your service and then retain them as customers and win the largest possible share of their life time business. " (The IDM Guide to Mastery, session 5, p-6)
Anthony T Karen states "Culture can be defined as the values and practices that we share with others that help define us as a group, especially in relation to others groups. There can be occupational cultures, organizational cultures and national cultures." (2001, p-185).
According to the above definition culture is an environment where people belonging to this environment will act in a certain way, in accordance with the core values system. Further more cultures can be classified in to organizational culture where standard model or rules becomes the values of the group (Adler 1997; Bagchi and Cerveny 2003). Lastly Dorfman and Howell (1988) suggest personality is a unique echelon of culture in the investigation into the effects of national culture on individual behavior. An individual may not be a part of this culture group, but this desire that actually pulls the trigger of buying to get sense of belonging.
CRM in different cultures
CRM is a system designed to understand these influences, as a group we chose to study a CRM system implanted on a Optician/ Ophthalmologist. Assuming if the CRM system is successful and helps the client build up better relationship with customers, would it be a success in a different cultural society. I will further discuss this subject in with respect to context which could be the barriers in success.
Introducing a CRM culture in a foreign market, can be very tricky, especially if the market is saturated but some times this strategy can be very beneficial if the local market presumes the product or service as a status symbol. For instance use of the Black Berry phone in some culture is perceived as status symbol because it releases a sense of belonging to elite business class group, although there are other phones in the market which would perform exactly the same task, if not better then at least with similar efficiency.
Customers in other cultures can be divided into sub-categories according to classes. Factors that control buying decision can be internal or external; in both the cases consumers have little control over it. These factors could be how you want to be perceived among group of friends or business clients, if you're looking to show off and use your buying power for status symbol then you would choose top of the line brand. Internal factors could also be your role model, some one you really inspired by or could be some one from the media.
The above diagram is the most inspired theory of motivation in hierarchy of needs theory developed by physiologist Abraham Maslow. He suggests the motivation process of any individual's life to achieve. He divides it's into five stages; stage one is the basic needs to survive for example food, shelter, cloths. Once the individual is secured in that stage he moves up to the stage where he needs to be safe from threats like loosing jobs, stage or shelter. Next they need to be accepted in the cultural, social or any other group they are influenced by. Later when they are accepted they need to hold them self up high in that group and perceived with respect, status, power and prestige by others. Last but not the least is when that individual is in constant pursuit for a set of objectives or ambitions. (Essentials Of Management, H. Koontz, H. Weihrich, Maslow's Hierarchy of Needs, Figure 14.1, pg 290-291, 7th edition, 2007 )
Culture and subcultures has a powerful control over people style of living, feelings, principles, faith and buying behavior. For instance in a western society eating at Mc Donald's would have no such value towards social status but in some eastern countries eating out at Mc Donald's is considered a prestigious.
Consumer buying behavior can also be influenced by a multipart network of inner emotional variable; these consist of attitude, awareness, inspiration, learning, recollection. Every day customers are bombarded with different advertisement and messages, some of these are taken in to consideration or memorized. The subconscious screening process is on the basis of motivation or personal desire, hence this dilemma is worth looking into. Understanding these triggers and how customer associated their self-image with these products and services can give a marketing edge.
In 2000 Terpstra and Sarathy developed a model that explains the factors which influence culture.
The above factors are the key points they all very in different cultures. For instance in some culture English speaking can be witnessed as status symbol but in Arab countries local language is preferred hence if a company is implementing a offshore customer support call center then language with accent is vital.
Values and attitude also change between nations and cultures, meaning in some cultures some symbols or objects can hold great importance like in India cows are considered as religious symbol where as in Pakistan they are sacrificed in a holy month of Ramzan.. "In 2004, China banned a Nike television commercial showing U.S. basketball star LeBron James in a battle with animated cartoon kung fu masters and two dragons, because it was argued that the ad insults Chinese national dignity." ( International Marketing and Culture, Marketing Teacher Ltd 2000 - 2009, dc 23.12.2009, http://www.marketingteacher.com)
"Care should be taken to make sure that religion beliefs are not contravened" R. Williams, Proceedings, pg-171, 2nd edition 2003. This could be one of the crucial factors which can not be ignored. For instance in Muslim cultures women can not interact with "Namahram" (Men who are not husband, brother, father or son). Which could be a big barrier in some operations of the firm, but by implementing this CRM system, customer can book appointment online without making any contact with a male. This could play be a big competitive advantage to start with. There is a huge importance given to privacy in Islam as well, Muslims being one of the largest religious group plays a great importance towards profitability.
Technology plays an important role to support a CRM system to work. For instance optinet provides an facility to reach out customers by SMS service, their may be change that local network company do not provide such support, or even slow internet speed that may discourage customers to book an appointment online. "Trevor Baylis launched the clockwork radio upon the African market. Since batteries were expensive in Africa and power supplies in rural areas are non-existent. The clockwork radio innovation was a huge success". ( International Marketing and Culture, Marketing Teacher Ltd 2000 - 2009, dc 23.12.2009, http://www.marketingteacher.com)
Law and Politics
Legal and political system in eastern countries are designed with accordance to the religion, for instance in Muslim countries the system is founded on the ideology of Islam and Sharia tradition. However if the government is corrupt and laws can be bended with bribery or having close ties with government officials, which could result in favor of the company
In western culture as the CRM system has grown stronger and vast there are still privacy issues raised. Where in western culture customer some legislation like Gramm-Leach-Bliley act has be passed and many financial institutions have been forced to share customer details to third parties, eastern culture is quiet far behind in this scenario and some cultures do not prefer sharing there personal details with anyone. With the enough skepticism with internet technology threats like cookies, phising, spam, spyware, spoofing etc customers are worried about. For instance recently customer's information was sold to marketing company to vitacost.com by bankrupt health information site Drkoop.com. (Matt Hines, Protect privacy or jeopardize CRM, 2002, www.searchcrm.techtarget.com). On the other hand there have been success stories as well like ebay. Ebay has developed a good reputation with keeping customer information private, it clearly states where it needs to share the information i.e. only to provide better service and secure transactions. Kevin Pursglove, spokesman for eBay privacy said "From the start it was apparent that privacy was a serious issue with our users," (Matt Hines, Protect privacy or jeopardize CRM, 2002, www.searchcrm.techtarget.com).
In our case, the price of a basic Optinet Software was £ 99.00 per month, in most culture some private opticians wont be able to afford this price due to competitive environment that some of these opticians are competing a very low profit scale.
CRM Core Value
Keeping the customer satisfied is a hard job, especially when the expectations are high, customers do not appreciate being dodged and swindled. If a company promises cheaper price then it should deliver competitive prices, customer may buy once from the supplier but he will only return if he is satisfied. "The absolute fundamental aim is to make money out of satisfying customers." Sir John Egan (Perfecting: Webster's Quotations, Facts and Phrases, pg - 5, ICON Group International, Inc., 2008, )
When dealing with troubled customers, expressing that the company is concerned about customer satisfaction makes the difference. This should demonstrate at all operational stages of the company from front desk to policy making. CRM is a fusion of knowledge and technology and personality, it will only be successful if the knowledge gained is used in the right way. The company should be able to offer right products, services and promotions at the right time to the right people and make the customer feel value of the company.
Over spending or over reliance on a CRM software can be dangerous, CRM is only a tool and every tool requires skill full hands. Training and implementing right staff, understanding the key objectives of the system is vital. "'If we build [CRM] right it will sell itself' is not true," Sauter said. An organization needs to be sure that its employees know what it means to that company to deliver customer value. Once that is understood, companies can begin to do the team building and put the tools and strategies in place to deliver that value and build loyalty," said Mark Sauter president and CEO, GTP Associates Inc. (G. Conlon, Creating a CRM Culture, March 2003 Issue, dc 22.12.2009, http://www.destinationcrm.com)
If a CRM system works for IBM it does not mean it will work other companies. With every changing culture, it is absolutely necessary for the companies to understand the culture they intend to do business in. Without a doubt it is a very powerful and resourceful tool which will only work if all departments work together as a team supporting similar goals. Ellen Guevel, regional operations manager, Americas region, Nokia Mobile Phones, said that another important driver of CRM success is a culture that encourages the business and IT directors on a CRM project to work closely together. "The IT department is my partner. They don't go around me; I don't go around them," Guevel said. "We say, 'This is what we want to do. What are your reservations? What are your limitations?' We start there." (G. Conlon, Creating a CRM Culture, March 2003 Issue, dc 22.12.2009, http://www.destinationcrm.com).
- Anthony. T. Karen, Culture, Environment, and CRM , McGraw-Hill Professional, 2001, p-185)
- Adler, N. (1997). International dimensions of Organizational Behavior. ITP.
- Bagchi, K. and R. Cerveny (2003). The Influence of National Culture in Information Technology Product Adoption. Ninth Americas Conference on Information Systems, USA.
- CULTURAL DIMENSIONS AND CRM SYSTEMS: A STRUCTURATIONAL ANALYSIS, Maged Ali, Laurence Brooks, Sarmad Alshawi, European and Mediterranean Conference on Information Systems (EMCIS) 2006
- Essentials Of Management, H. Koontz, H. Weihrich, Maslow's Hierarchy of Needs, Figure 14.1, pg 290, McGraw-Hill; 7th edition, 2007
- Matt Hines, Protect privacy or jeopardize CRM, 2002, Dc, 22.12.09, http://searchcrm.techtarget.com/news/843537/Protect-privacy-or-jeopardize-CRM
- R. Williams, Proceedings of the 2nd European Conference on e-Learning, pg-170, Academic Conferences Limited, 2003
- G. Conlon, Creating a CRM Culture, March 2003 Issue, dc 22.12.2009, http://www.destinationcrm.com/Articles/Columns-Departments/Insight/Creating-a-CRM-Culture-45065.aspx
- International Marketing and Culture, Marketing Teacher Ltd 2000 - 2009, dc 23.12.2009, http://www.marketingteacher.com/Lessons/lesson_international_marketing_culture.htm
- Perfecting: Webster's Quotations, Facts and Phrases, pg - 5, ICON Group International, Inc., 2008
- The IDM Guide to Mastery, institute of direct marketing, 2002, session 5, p-6
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