Assignment no. 14 - Strategic Customer Management and the Strategic Sales Organization
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Course
Entrepreneurial Marketing Strategies (ENTR20053)
Institution
Polytechnic University Of The Philippines
Book
Marketing Strategy and Competitive Positioning PDF eBook
Answers to the following questions are available in this document:
1. Define and explain the importance of the Strategic Customer Management (SCM) approach.
2. Discuss the difference between ‘Sales’ and ‘Marketing’.
3. What do you mean by 'dominant customers' and how to prope...
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Entrepreneurial Marketing Strategies (ENTR20053)
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14 - Strategic Customer Management and the Strategic Sales Organization
1. Define and explain the importance of Strategic Customer Management (SCM)
approach.
Strategic customer management refers to the strategic perspective of the management
of customer relationships. It has two aspects: strategic management of customer
portfolio; and management of strategic customers. Strategic customer managment is
important in making decisions whic impact the profitability and risk profile of the
company.
these issues are as follows:
(1) Test out the
reasons why sales has become strategic
(2) Consider what companies want from sales in
modern markets
(3) Evaluate what these pressures create in a new type of sales organisation
(4) Focus on the capabilities needed for strategic customer management
(5) Making investment
decisions around customer assets
(6) The special case of the powerful customer
2. Discuss the difference between ‘Sales’ and ‘Marketing’.
Sales is often viewed as the act of closing a sale, while marketing open avenues
for sale. For instance, market research is done prior to the actual selling of the
prouct or service. Which means that marketing makes sales possible.
In the traditonal sense, Sales is more like a tactical function whereas Marketing
is a strategic one. However, Sales is slowly but surely been shaping into a
strategoc role as well to focus on strategic customer management. Another
distinction is that Sales influence customer to buy what the company produced,
whereas marketing influence the company to produce what customer want. Generally
speaking, Sales may be purely transactional while Marketing aims to build the
customer relatonship.
3. What do you mean by 'dominant customers' and how to properly deal with them?
Dominant customers are the largest and most influential custome type in the
company's portfolio. They typically account for 20 per cent of the customer base
but impacts 80 per cent or more of the supplier's business. They require closer
relationship with the supplier.
In dealing with Dominant customers there are three approaches:
(1) Major account orientation: Sales and Management efforts should have a dedicated
approach to tend to their speficifc needs. This approach remains largely a
conventional buyer-seller format.
(2) Major account resource commitment: Substantial teams of people may work around
the single account and offerrings for this customer must be customized. This in
essence, is one sided.
(3) Strategic account partnership: Based on a collaboration between the buyer and
seller, where both invest time and resources.
4. Explain and discuss the so-called ’20:80’ rule in marketing.
The 20:80 rule in marketing, also called "Pareto principle" is an occurence where
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