This chapter is dealing with the research of theorists in the field of customer relationship management and the status of telecommunications sector in China and Chinese Telecommunications Companies in particular. Review of the literature has played a vital role in providing the author an insight into the latest trends and functionalities of the area of study and achieves the research objectives. A critical review of literature entails seeing what has been published in the area of interest, expand the subject knowledge and help to clarify research questions further.
This also enables understanding how competition is assessed and develop strategies for competitive analysis. The key aims solicited in this review of literature are as follows:- Establishing the importance of customer relationship management as a concept for growth. Estimating the present status of the Chinese telecommunications sector and Chinese Telecommunications companies. Establishing a relationship between the Customer Relationship Management and growth of Chinese telecommunications companies.
These aims are sought to be achieved by examining the scope and dimensions of CRM to include a definitional perspective, CRM as a strategy, the processes in implementing, projects, employing ecommerce, key issues and best practices and finally the future trends. A survey of the Chinese telecommunications industry is then being carried out to analyze the current status, prospects for growth and application of CRM at present and the anticipated path ahead. CRM – Definitional Perspective CRM.
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CRM is defined as a series of strategies and processes that create new and mutual value for individual customers build preferences for their organizations and improve business results over a lifetime of association with their customers. (Gordon, 2002). CRM – Operations. CRM operations are those aspects of a business strategy which relate to techniques and methods for attracting and retaining customers. (CRM, 2005). Customer relationship management software: A web-based management tool for enabling sharing of knowledge and best practices across all aspects of a company.
A CRM software package should be able to produce reports for management to utilize to improve the sales and customer service process. Relationship Marketing: Relationship Marketing is the process whereby both parties – the buyer and provider – establish an effective, efficient, enjoyable, enthusiastic and ethical relationship: one that is personally, professionally, and profitably rewarding for both parties. CRM Strategy CRM is as much a strategy as a process as many people tend to believe. Some writers as Gordon (2002) have implied that CRM is wholly a strategy.
While viewing the implications of CRM on business development in particular, it is essential to study it as a strategy as well as a process. Adoption of a new process however involves an initial stage of determining the concept as an organization wide strategy. Such a strategy will provide the necessary impetus and provide a holistic approach to growth and development. CRM has been developed as a concept from Relationship Marketing. Relationship Marketing (RM) denotes five levels at which a firm can deliver the program. These levels are designated as follows:- Basic Level.
In this a firm only sells an item or good without being affected by the consequences of the exchange. Reactive Level. This is based on the customer’s willingness to communicate and the response of the company thereof. Accountable Level. In this feed back is sought by a sales representative from the customer. Proactive Level. This is a continuous dialogue with the customer to assist him in absorbing the product of the company. Partnership. This is establishment of a formal relationship with the hope of delivering overall value to the customer. (Kotler. et al, 1999)
A study of the Chinese telecommunications companies would enable identification of the level at which they are at present and thus relating it to the Kotler model of relationship management. A simple model is indicated at Table 2 which can assist in selecting the degree of involvement of the firm. This will be determined by the size of the customer base and the levels of current profits. Thus where a firm has a large number of customers with high profit margins it can deliver the program at the accountable level and in the case the profit margins are medium with high customers, the reactive level will have to be adopted and so on.
(Kotler, 1999). The CRM model adopted would also have to be based on the levels at which a firm is operating. Customer relationship management on the other hand goes one step beyond relationship marketing. As Francis Buttle has indicated, it provides an insight of the value that the company is to the customer and the prospect that the company will survive that makes CRM a powerful tool. (Buttle. 2003). A firm thus will have to undertake CRM as a strategy to devote the entire focus of the organization and all its constituents towards it.