Get Smart Case Solution

GET SMART CASE SOLUTION

RIDING THE MARKETING INFORMATION WAVE

REALIZE YOUR CUSTOMER'S FULL PROFIT POTENTIAL

1. What challenges do retailers face in implementing a relationship marketing strategy? ( RIDING THE MARKETING INFORMATION WAVE )

Ans. Relationship marketing is based on creating a mutually beneficial exchange between business partners. This often requires personal communication with the customer. The essence of relationship marketing is to understand customers' needs and develop a plan that surrounds those needs to create product offers. Any retail business has a need and desire to grow their business. Consider the retail food industry. The average grocery store now stocks around 20,000 items, with larger stores carrying two or three times that amount. Around 10,000 new items are introduced each year. This creates an information crisis for retail managers and for manufacturers in the buying process. The key solution is to implement point-of-sale scanning to help allocate shelf space and optimize product mix. But with the increasing customer information systems that will handle thousands of characters of information on tens of millions of customers, ultimately requiring trillions capacity of information storage. It is now a challenge of small retail and manufacturing companies to maintain the cost of storing customer information system.

2. Based on your own observations, what are the key issues in consumer behavior in grocery supermarkets? How do supermarkets make money? What are the pitfalls of this strategy? (REALIZE YOUR CUSTOMER'S FULL PROFIT POTENTIAL and GET SMART )

Ans. Many companies rely on the precise concepts such as "industries" or "available market" to define the customers they intend to serve. In order to define and understand full-potential performance, however, a company must specify and analyze target customer segments in far greater detail. Such analysis goes beyond understanding "who buys what?" to understanding the full range of behaviors that have an impact on profitability. The company must examine behaviors such as share of use (the percent of a customer's total budget for an item or service that the customer spends with the company); costs of service (such as credit, warranty, and customer service); price paid (level of discounting and incentives); and referrals (whether or not the customer has referred other customers to the business). Once the company has defined this ideal behavior profile, it