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IBM: CASE STUDY

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by

Alan Lau

on 5 September 2013

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Transcript of IBM: CASE STUDY

Introduction
IBM: CASE STUDY
MKTG205


SOL AHN
WESLEY CHAN
ALAN LAU
AMY YEE

IBM is a global technology company

IBM develops a portfolio of relationship strategies to meet the needs of diverse customer groups


Major problem: IBM's customers are likely to switch to other suppliers

Need to develop interpersonal relationships with their customers

Use of Customer Relationship Management technology
Describe how IBM might develop a portfolio of relationship strategies to meet the needs of such diverse customer groups.
Customer Group A
Value the relationship
Customer Group B
Price is more important for them rather than relationship
Customer Group C
Freely switch over suppliers
1. Customer group type
IBM should manage a portfolio of relationships
2. Strategies
Customer Types/ Strategies for IBM’s diverse consumer groups
Collaborative exchange type:
"True friends" = High Loyalty Customers
Strategies
Relationship Marketing (RM) Programs
Social RM Programs
Transactional Relationship: "Butterflies"
= lower loyalty & commitment
Strategies
Financial RM Programs

Structural RM Programs
Value Proposition
&
Social CRM
Strategies
Customer Group
A
Customer Group
B
Customer Group C
Cost Differences & Relationship Strategies
Cost Differences & Relationship Strategies
High cost-to-serve customers – High quality product with a competitive price
Low cost-to-serve customers – Willing to pay more money for a high quality product

Retain profitable customers
Anticipate future trends
Work with High cost-to-serve customers
Negotiate and help improve internal processes
When allocation of costs are too high
Let the customer ‘fire’ themselves

Strategies of Retaining Customers/Profit
Switching Barriers
Represents any factor, which makes it more difficult or costly
for consumers to change providers

Perceived Switching Costs
Interpersonal Relationships
Reciprocal Agreements
Switching Barriers
Recommendations
IBM : implement range of relationship strategies
Relationship marketing strategy > establish, develop and maintain a successful relationship with their customers
Adding value to these exchanges > promote on-going relationships
Customer Relationship Management Technology
Acquire, develop, motivate

Implementation
Marketing manager of IBM > enforce the relationship marketing strategy to sales team
Sales team dedicated to each customer group
Non monetary and monetary benefits
Incentives will keep sales team motivated and focused

Conclusion
Different types of customers from transactional to collaborative;
IBM should always seek to strengthen existing relationships to stay profitable;
Deterrent to customer deflection is the perception of high switching costs

Full transcript