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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS Significance of Customer Relationship Management in Strategic Marketing Decisions: A Study on Banking Sector of Pakistan Shaista Nasir Department of Management Sciences, Quaid-i-Azam University, Islamabad, Pakistan Nasir Hussain (Corresponding Author) Department of Leadership & Management, National Defence University, Islamabad, Pakistan Shakil Adnan Malik Department of Leadership & Management, National Defence University, Islamabad, Pakistan Bilal Nawaz Department of Leadership & Management, National Defence University, Islamabad, Pakistan Mahdi Hussain Department of International Relations, Quaid-i-Azam University, Islamabad, Pakistan
Abstract In this period of hyper-competition, globalization and technological breakthroughs, organizations are compelled to realize the importance of knowing their customer better. This move has increased the importance of customer relationship management (CRM) for organizations. Customer relationship management is an approach to manage customer related information and utilize it to acquire new customers, retain existing ones, and maximize their lifetime value. This is the reason it is considered as a source of competitive advantage for organizations. Keeping in view the theoretical and empirical importance, the present study discusses the results of a survey conducted to know the state of customer relationship management utilization in making strategic marketing decisions in 10 major private banks of Islamabad, Pakistan. The results show that customer relationship management is strongly considered as a strategic tool and that fully supports the strategic marketing decisions. Keywords: Strategic Significance, Customer Relationship Management, Marketing, Banks. 1. Introduction With increasing competition, survival for companies is becoming difficult day by day. Companies are always in search of finding solutions to help them sustain and increase the efficiency of their businesses. Organizations worldwide started restructuring and re-engineering their business processes to cut costs and become more efficient and competitive. Smart companies are now changing their business practices by refocusing their efforts on external environment i.e. customers. In past, creating and maintaining a good relationship with the customer was comparatively easy than today because of small businesses and identifiable customers. Today, the extended size of the businesses and the wide range of customers have compelled organizations to explicitly manage good customer relationships if they want to be successful. This need led to the development of customer relationship management (CRM) concept. Customer relationship management holds the promise to achieve such corporate objectives in this highly competitive arena (Karakostas, Kardaras, & Papathanassiou, 2004). CRM covers managing all possible ways that an organization uses to interact with its customers from initial contact to the delivery of the product and services. The basic aim of CRM is to organize the bundle of business processes that deals with customers and involves the collection, spreading and interpretation of customer data in order to identify the patterns of customers’ product/ service usage behavior that can be utilized to make effective marketing programs. Successful CRM programs are directed by carefully formulated and implemented organizational strategy (Cravens & Piercy, 2008). Traditional marketing strategies focused on 4 Ps (Price, Product, Promotion, and Place) in order to increase market share. The basic objective was to increase the volume of transactions between the seller
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VOL 4, NO 10
INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
and the buyer. The effectiveness of marketing strategies and...
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