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Role Of Crm In Building Brand Equity Marketing Essay

3857 words (15 pages) Essay in Marketing

5/12/16 Marketing Reference this

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CRM stands for Customer Relationship Management. It is a process or methodology used to learn more about customers needs and behaviors in order to develop stronger relationships with them. There are many technological components to CRM, but thinking about CRM in primarily technological terms is a mistake. The more useful way to think about CRM is as a process that will help bring together lots of pieces of information about customers, sales, marketing effectiveness, responsiveness and market trends.

Brand equity refers to the marketing effects or outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have the brand name And, at the root of these marketing effects is consumers’ knowledge. In other words, consumers’ knowledge about a brand makes manufacturers/advertisers respond differently or adopt appropriately adept measures for the marketing of the brand The study of brand equity is increasingly popular as some marketing researchers have concluded that brands are one of the most valuable assets that a company has Brand equity is one of the factors which can increase the financial value of a brand to the brand owner, although not the only one

Importance of CRM

CRM Customer Relationship Management is one of the newest innovations in customer service today. CRM stands for customer relationship management and helps the management and customer service staffs cope with customer concerns and issues. CRM involves gathering a lot of data about the customer. The data is then used to facilitate customer service transactions by making the information needed to resolve the issue or concern readily available to those dealing with the customers. This results in more satisfied customers, a more profitable business and more resources available to the support staff. Furthermore, CRM Customer Relationship Management systems are a great help to the management in deciding on the future course of the company.

As mentioned, there is much data needed for the CRM system to work. These fields include the customer name, address, date of transactions, pending and finished transactions, issues and complaints, status of order, shipping and fulfillment dates, account information, demographic data and many more. This information is important in providing the customer the answer that he or she needs to resolve the issue without having to wait for a long time and without going to several departments. With just a few mouse clicks, a customer support representative for example can track the location of the customer’s package or order. This is infinitely better than the cumbersome process of tracking shipments previously. Furthermore, the customer service representative will also be able to see the previous concerns of the customer. This is a great help especially if the customer is calling about the same issue since he or she will not have to repeat the story all over again. This results in less time in resolving the issue, thus, higher productivity of the support staff.

CRM Customer Relationship Management systems are also important to the top management because it provides crucial data like customer satisfaction and efficiency of service by the frontline crews. A piece of customer relationship management software will also be able to generate the needed reports for product development or new concepts. Furthermore, this system will also be a great help for the top management in deciding the company’s future course of action, whether it involves phasing out one of the products on the shelves or making adjustments to one of the products sold.

The reports generated by CRM systems are also invaluable to your advertising and marketing planners, as they will be able to pinpoint which ideas works and which do not. Because of CRM systems, you will be able to release advertisements or plan marketing campaigns more in tune with your target market. This will also lead to more responses to your advertisement and a more effective marketing campaign.

Successful integration of a CRM Customer Relationship Management system in your company, however, might not be as easy as it seems. The following might give you an insight why CRM systems fail in some companies… Most companies fail to prepare for CRM systems. By this, I mean that most companies fail to integrate all the departments that need to share the information for it to be effective. Furthermore, CRM units scattered all over the company’s departments is often more effective than just making one big CRM department. This will ensure that each department will get the information and data that they need.

A CRM system will also help you a lot in expanding your business. As CRM systems are capable of handling enormous amounts of data, CRM systems will help you a lot in coping with the increased numbers of customers and data. With a CRM Customer Relationship Management system installed and properly utilized, you can be sure that all data is maximized and used to ensure that your business will be successful and your customers a lot more satisfied than before.

Importance of brand equity

Brand equity is an intangible asset built up by company overtime by building awareness, having a well-known name or a clear identity, consistent communications, marketing to the consumer, acting socially responsible, and spending on advertising and promoting the brand.

It is important because the products associated with the brand command a premium price in the market and are perceived to be higher quality when compared to the similar generic unbranded products. Brand equity also offers competitive advantages by reducing the marketing costs (because of high brand awareness and loyalty) to firms that enjoy high “Brand Equity” and thus enhances their earnings.

Brand equity is created over a long period of time by using investing employing various tools like advertising, public relations (PR), sponsorships, events, social causes etc around the entity that’s marketed. Once the brand equity has been created it is also important to carefully manage and overtime grow the equity of the brand employing the same tools mentioned above. If not dealt with carefully, there is a chance the brand equity is destroyed over time.

Brand element choice criteria: there are six criteria in choosing brand elements (as well as more specific choice considerations in each case). The first three (memorable, meaningful, and likable) can be characterized as “brand building” in terms of how brand equity can be built through the judicious choice of brand element.

The latter three (protectable, adaptable, and transferable) are more “defensive” and are concerned with how the brand equity contained in a brand element can be leveraged and preserved in the face of different opportunities and constraints.

While a CRM infrastructure is complex, the CRM dynamic is elegantly simple. It is essentially a four-stage cycle of analyzing detailed customer data, strategizing sales and marketing plans based on what’s learned from data analysis, and properly executing creative campaigns during customer interactions.The data derived from those interactions then feeds successive rounds of even better analysis, campaign planning, and new interactions

CRM is a business strategy in which everyone in the enterprise is focused on the customer and all processes and systems are built with this concept in mind CRM uses technology to synchronize customer relationships across communication channels, business functions, and audiences to improve the customer experience This new way of conducting business requires new metrical approaches to

understanding success and failure, and the metric best suited for proving the efficacy of CRM is customer equity.

Although there are many internal and external metrics by which CRM can be measured, this paper seeks to define customer equity as the best metric to gauge the marketing communications success or failure of a CRM implementation.This paper will also identify several time-based, event-driven approaches to measuring customer equity, as well as relationship equity, the component of customer equity most dramatically influenced by CRM.

Companies need to focus on a new measure – one that reflects the value of their customer relationships.The new value is “customer equity” and the contribution it makes to future growth prospects. Customer equity is comprised of brand equity and relationship equity. Traditionally, companies have invested in branding to create a positive impression of the brand and lock it into the long-term memory so the customer would draw on that memory when the interaction with the brand’s category occurred.That image of consistent quality tied to the physical attributes of the product and/or service and the specific emotional attributes or benefits needs to be seared in the customer’s mind. At its core is the commitment to deliver against the promise of value. Relationship equity is the value of the individual customer experience, derived from interactions with the company. It is the way the company fulfills its brand promise. At each and every touchpoint – Web, direct mail, email, sales force, among others -the company has the opportunity to demonstrate this commitment. If the individual’s experience is consistent and the value is enforced, the emotional attachment with the experience is positive, then relationship equity will also contribute to repeat purchases.


The basis of brand equity lies in the relationship that develops between a consumer and the company selling the products or services under the brand name. A consumer who prefers a particular brand basically agrees to select that brand over others based primarily on his or her perception of the brand and its value. The consumer will reward the brand owner with dollars, almost assuring future cash flows to the company, as long as his or her brand preference remains intact. The buyer may even pay a higher price for the company’s goods or services because of his commitment, or passive agreement, to buy the brand. In return for the buyer’s brand loyalty, the company essentially assures the buyer that the product will confer the benefits associated with, and expected from, the brand.

In order to benefit from the consumer relationship allowed by branding, a company must painstakingly strive to earn and maintain brand loyalty. Building a brand requires the company to gain name recognition for its product, get the consumer to actually try its brand, and then convince the buyer that the brand is acceptable. Only after those triumphs can the company hope to secure some degree of preference for its brand.

Name awareness is a critical factor in achieving brand success. Companies may spend vast sums of money and effort just to attain recognition of a new brand. But getting consumers to recognize a brand name is only half the battle in building brand equity. It is also important for the company to establish strong, positive associations with the brand and its use in the minds of consumers. The first step in building brand equity is for the company to define itself and what it hopes to represent for consumers. The next step is to make sure that all aspects of the company’s operations support this image, from its product and service offerings to its marketing programs to its customer service policies. When all of these elements support a distinctive image of the company and its products in the minds of consumers, the company has established brand equity.


Memorable. How easily is the brand element recalled? How easily recognized? Is this true at both purchase and consumption? Short brand names such as Tide, Crest, and Puffs can help.

Meaningful. To what extend is the brand element credible and suggestive of the corresponding category? Does it suggest something about a product ingredient or the type of person who might use the brand? Consider the inherent meaning in names such as Diehard auto batteries.

Likeability. How aesthetically appealing do consumers find the brand element? Is it inherently likable visually, verbally, and in other ways? Concrete brand names such as Sunkist, Spic and Span, and Firebird evoke much imagery.

Transferable. Can the brand element be used to introduce new products in the same or different categories? To what extend does the brand element add to brand equity across geographic boundaries and market segments? Volkswagen chose to name its new SUV, Touareg.

Adaptable. How adaptable and updatable is the brand element? Betty Crocker has received over eight makeovers through the years.

Protectable. How legally protectable is the brand element? How competitively protectable? Can it be easily copied? It is important that names that become synonymous with product categories – such as Kleenex, Kitty, Litter, Jell-O, Xerox, and Fiberglass – retain their trademark rights and not become generic.

Brand Equity Defined

Brand equity can be measured by determining loyal users’ contribution to category profits (ideally) and to brand sales (realistically).

The ‘Right’ Approach

Customer Based Brand Metrics

Based on CBBE model

Traditional marketing and communications tracking

Examples: Millward Brown “BrandDynamics”, Y&R “Brand Asset Valuator”

Incremental Brand Performance

Short term incremental sales volume, premium pricing, other outcomes

Historical modeling and predictive modeling

Branded Business Value

Financial value of intangible assets

Measure increases or decreases in brand asset value over time


Although measuring brand equity can be difficult, it can also provide managers with a good indication of their company’s future profitability. “Companies which develop good measures of their brand equity have an early warning indicator of likely future profit trends, and can get a much better feel of the dangers of short-termism,” Mitchell noted. “If brand equity is

falling, you’re storing up trouble for yourself…. If brand equity is rising, you’re investing in future performance, even if it’s not showing through in profits today. Real business performance therefore equals short-term results plus shifts in brand equity.”

Unfortunately, measuring brand equity is not as simple as counting the number of people who recognize a brand name or symbol. It is also dangerous to assume that simply because its brand is well-known, a company enjoys strong or growing brand equity. In fact, the most powerful brands can easily be diluted by company missteps or inconsistent marketing messages. Mitchell explained that the best way to measure brand equity depends on the particular company and its industry. For example, in some cases assessing consumer perceptions of product quality may provide the best indication of brand equity. In other cases, more traditional business measures such as customer satisfaction or market share may be more closely correlated with brand equity.

Finding an appropriate measure of brand equity is vital in order for companies to ensure that they protect this valuable asset. In hisRisk Managementarticle, Knapp claims that managers must remain constantly vigilant to protect their brand equity, since a declining brand image poses a significant risk to company earnings. If a brand loses its distinctive image in the minds of consumers, then the branded product becomes more like a commodity and must compete on the basis of price rather than value. Customer loyalty decreases, which has a corresponding negative effect on market share and profit margins. In order to prevent this decline, Knapp recommends that companies consider the impact of major decisions on consumer perceptions and brand equity. Every action taken by management-including the introduction of new products or advertising strategies, or the decision to lay off employees or relocate a factory-should be assessed for its effect on brand equity.

Building Services Brand

a particular perspective for building services brands is suggested by de Chernatony and Segal-Horn (2001). Given the unique characteristics of services – intangibility, inseparability of production and consumption, heterogeneity of quality, and perishability-, “delivery of the services brand is about the experience of the customer at the interface with the service provider” (p. 648). Therefore, the authors argue, it is not correct to use the classical branding models for the service sector, given that the staff plays “an important role in services branding, influencing brand quality and brand values through interactions they have with consumers” (p. 665). Underwood, Bond, and Baer (2001) contribute to the discussion about building service brands by using the sports marketplace as an example. They provide a conceptual foundation for understanding the role of social identity in the services brand building process. They identify four characteristics of the sports environment and propose that brands can be strengthened by fostering group experiences, establishing a unique history or traditions, initiating rituals, and designing a physical facility where the brand identity and an experience can be shared.

Measuring Brand ‘Value’

Now that The Brand Bubble has spelled out that most brands–and their companies–are greatly overvalued by the financial markets, we find out that those on the inside do not have a clear idea of what their brands are worth, either.

More than half (55%) of senior marketing executives lack a quantitative understanding of brand value within their organizations, according to a recent survey by the Association of National Advertisers and global branding consultancy Interbrand.

Further, because brand value’s effect on corporate value is not clearly quantified, it isn’t being incorporated in decision-making: 64% of the 118 marketing officers and senior marketing executives polled said that brands do not influence decisions made at their organizations.


s. byas

For marketers and businesses around the globe, it is the relationship age, an acclamation that the relationship between a brand and a customer drives market share — and innovation. The mantra for this reign of relationships is customer relationship management (CRM), a strategy to increase customer retention and build customer equity. As technical innovations from transportation to communication started taking off in the 1900s, business attitudes began to switch from selling a product to producing what the market needed — from selling to marketing. Besides enabling businesses to focus on customer relationships, technology also gave customers power. Marketing’s primary role is to generate leads for sales, create brand awareness and manage the relationship cycle with customers. Collaboration and building relationships with other stakeholders are critical to successful marketing and profitability. The biggest challenge marketing faces is understanding key drivers and triggers of relationships, measuring relationships and measuring success.

Christina Suckow

This paper reviews the concept of brand from a perspective of ice hockey. Since branding hockey can appropriately be described by the concept of customer-based brand equity, the literature about this concept is a valuable point of reference for gaining insights into the mechanisms of hockey branding. By reviewing the concept, appropriately defining the hockey customers and the hockey product are mandatory. Practical implications are then derived from a case study of the German Hockey League (DEL) in order to enhance the understanding of branding in a German hockey context.

Cheng-Hsui Chen

Examines the negative impacts of brand extension failure upon the original brand by calibrating the difference of brand equity. Using data collected from college students in Taiwan, establishes four hypotheses to identify various effects of a failed brand extension in diluting the original brand’s equity. Analyzes the different effects among four types of equity-source brands for both close and distant extensions. Equity-source and equity level of the original brand is identified first. All components of brand equity-source are then used to evaluate the performance of a brand extension. Finds that an unsuccessful brand extension dilutes the original brand for all three high equity-source brands. Effects of brand dilution differ according to the type of equity source possessed by the original brand, but there is no difference in brand dilution effects from close and distant extension failures.

Shaw K. Chen

The purpose of this research is to understand the impact of relationship marketing strategy on the demand for customized communication through printing. Though many marketing executives report that they are using a relationship marketing strategy, this has not resulted in high demand for variable data printing. Is it a failure of strategy or a failure of implementation? Two exploratory studies are presented to answer this question. First, the foundations of relationship marketing strategy are presented.In particular, the central role of loyalty is discussed as the mediating factor in building relationships with customers. Using the concepts of brand equity, value equity and retention equity as presented in the Customer Equity model designed by Rust, Zeithaml and Lemon, it will be argued that to build retention equity common to most relationship marketing programs, marketers need to understand the relationship from the customer’s point of view. An exploratory study of 160 adults was conducted to determine their preferences for common relationship marketing tactics such as receiving mail from businesses they patronize, getting e-mail notices of sales, joining frequent buyer programs, and use of customer service phone lines.


Nearly 75 percent reported that they are very satisfied or somewhat satisfied with the business results from their CRM efforts.

About half of the respondents claimed that “resistance to process change” was a “significant obstacle” to their CRM efforts. Other obstacles cited include integration with back-end systems (34.2 percent), high software costs (33.3 percent), lack of consensus on objectives (28.8 percent), and executive commitment levels (27 percent).

“Driving adoption” of CRM was the most often cited difficulty that they ran into with their CRM implementation (an obvious correlation with the “resistance to process change” mentioned above). Other top difficulties included setting objectives, defining strategy, and defining new processes. A surprisingly low 10.8 percent reported implementing the technology as a leading difficulty, and only 2.7 percent reported difficulty selecting the technology to implement.

Of the 56 percent of respondents who responded that they purchased CRM software, more than three-quarters were either very satisfied or somewhat satisfied (6.5 percent and 69.4 percent, respectively.) On a related note, of that number, more than half purchased CRM solutions from either SAP, Seibel, Oracle, or PeopleSoft.

Of those dissatisfied with their CRM efforts, 25 percent complained about poor usability. Of those who were satisfied with their CRM, only 5 percent complained about usability. (It would have been interesting to see how the satisfied/dissatisfied were split among the various CRM vendors. Forrester did not provide that insight in its brief.)

Forrester also provided its take on the survey results. Some of the key points included:

Successful CRM implementations have concentrated on the “customer experiences they deliver, not on the technology they deploy.”

“Smart firms” will pay a lot of attention to their selection criteria and a serious review of the various vendors’ offerings.

It recommends that potential customers “start taking the CRM capabilities of ERP vendors seriously.”

It also recommends that potential customers make usability testing part of their selection process and deployment efforts.

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