MIS Chapter 11

Marketing

CRM Marketing applications use data mining to sift through volumes of customer data

Two Primary Sources of Problems Along the Supply Chain

Uncertainties and the need to coordinate multiple activities, internal units, and business partners.

Campaign Management

applications that help organizations plan campaigns that send the right messages to the right people through the right channels (e.g., avoid targeting people who have opted out of receiving marketing communications).

Bullwhip Effect

erratic shifts in orders up and down the supply chain.

Cross-Selling

the marketing of additional related products to customers based on a previous purchase.

Open-Source CRM Systems

the source code for open-source software is available at no cost.

Inventory Velocity

the speed at which a company can deliver products and services after receiving the materials required to make them.

Two Major Components of Operational CRM

Customer-Facing Applications and Customer-Touching Applications

Demand Forecast

Demand for a product can be influenced by numerous factors such as competition, price, weather conditions, technological developments, overall economic conditions, and customers' general confidence.

Push Model

In this model, also known as make-to-stock, the production process begins with a forecast, which is simply an educated guess as to customer demand.

Joint Ventures and Other Business Partnerships

In this type of extranet, business partners use the extranet as a vehicle for communication and collaboration.

A Company and Its Dealers, Customers, or Suppliers

This type of extranet centers on a single company.

Call Center

a centralized office set up to receive and transmit a large volume of requests by telephone.

Electronic Data Interchange (EDI)

a communication standard that enables business partners to exchange routine documents, such as purchasing orders, electronically

Product Knowledge System

a comprehensive source of information regarding products and services.

Sales Forecasting System

a mathematical technique for estimating future sales.

Industry Extranet

a network used for mission-critical business transactions by leading international organizations in aerospace, automotive, chemical, electronics, financial services, healthcare, logistics, manufacturing, transportation, and related industries.

Mass Customization

a process in which customers can configure their own products (e.g., customized computer systems from Dell).

Frequently Asked Questions (FAQs)

a simple tool for answering repetitive customer queries and when customers find the information they need by using FAQs the need to communicate with an actual person is eliminated.

Upselling

a strategy in which the salesperson provides customers with the opportunity to purchase related products or services of greater value in place of, or along with, the consumer's initial product or service selection.

Just-In-Time (JIT) Inventory

a strategy to minimize inventories deliver the precise number of parts, called work-in-process inventory, to be assembled into a finished product at precisely the right time.

Live Chat

allows customers to connect to a company representative and conduct an instant messaging session enabling the participants to share documents and photos.

Mobile CRM Systems

an interactive system that enables an organization to conduct communications related to sales, marketing, and customer service activities through a mobile medium for the purpose of building and maintaining relationships with its customers.

Data Mining

develops a purchasing profile or snapshot of a consumer's buying habits that may lead to additional sales through cross-selling, upselling, and bundling.

Information Sharing

facilitated by electronic data interchange and extranets, it helps to improve demand forecasts.

Bundling

is a form of cross-selling in which a business sells a group of products or services together at a lower price than their combined individual prices.

Vendor-Managed Inventory (VMI)

occurs when the supplier, rather than the retailer, manages the entire inventory process for a particular product or group of products.

Customized Products and Services

offering customers the ability to custimize products, view account balances, check shipping status of an order, etc.

Collaborative CRM Systems

provide effective and efficient interactive communication in all aspects of marketing, sales, and customer support with the customer throughout the entire organization.

Reverse Flows (or reverse logistics)

returned products that are damaged, unwanted, or in need of recycling

Search and Comparison Capabilities

search and comparison capabilities offered to customers by online stores, online malls, and independent comparison Web sites.

Benefits of Open-Source CRM:

source code is available to developers and users Provide the same features or functions as other CRM Implemented either on-premise or on-demand Favorable pricing Wide variety of applications Easy to customize Updates and bug (software error) fixes rapidly distributed Extensive support information available for free

On-Demand CRM Systems

systems hosted by an external vendor in the vendor's data center which spares the organization the costs associated with purchasing the system, maintenance, and employees need to know only how to access and utilize it. Also known as utility computing or soft ware-as-a-service (SaaS).

Customer Service and Support

systems that automate service requests, complaints, product returns, and requests for information.

Operational CRM

systems that support front-office business processes.

Oubound Telesales

the CIC generates a call list for the sales team, whose members contact sales prospects.

Supply Chain Visibility

the ability of all organizations within a supply chain to access or view relevant data on purchased materials as these materials move through their suppliers' production processes and transportation networks to their receiving docks.

Sales Force Automation (SFA)

the component of an operational CRM system that automatically records all of the components in a sales transaction process.

E-mail and Automated Response

the most popular tool for customer service, inexpensive, fast, and companies use e-mail not only to answer customer inquiries but also to disseminate information, send alerts and product information, and conduct correspondence on any topic.

Customer Touch Points

the numerous and diverse interactions organizations have with their customers including traditional customer touch points such as telephone contact, direct mailings, and actual physical interactions with customers during their visits to a store and the additional touch points that occur through organizational CRM systems such as e-mail, Web sites, and communications via smartphones.

Data Consolidation

the organization's CRM systems must manage customer data effectively with modern interconnected systems built around a data warehouse to make all customer-related data available to every unit of the business.

Material Flows

the physical products, raw materials, supplies, and so forth that flow along the chain. Material flows also include the reverse flows.

Social CRM

the use of social media technology and services to enable organizations to engage their customers in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent manner.

Customer Interaction Centers (CIC)

where organizational representatives use multiple channels such as the Web, telephone, fax, and face-to-face interactions to communicate with customers.

Extranets

link business partners over the Internet by providing them access to certain areas of each other's corporate intranets

Sales Lead Tracking System

lists potential customers or customers who have purchased related products; that is, products similar to those that the salesperson is trying to sell to the customer.

Personalized Web Pages

organizations permit their customers to create personalized Web pages used to record purchases and preferences, as well as problems and requests.

Technical and Other Information and Services

personalized experiences offered by organizations to induce customers to make purchases or to remain loyal (e.g., allowing customers to download product manuals; providing detailed technical information, maintenance information, and replacement parts to customers).

Loyalty Programs

programs that recognize customers who repeatedly use a vendor's products or services.

Supply Chain

the flow of materials, information, money, and services from raw material suppliers, through factories and warehouses, to the end customers.

Front-Office Processes

those processes that directly interact with customers (i.e., sales, marketing, and service).

Contact Management System

tracks all communications between the company and the customer, the purpose of each communication, and any necessary follow-up which eliminates duplicated contacts and redundancy, which in turn reduces the risk of irritating customers.

Customer-Touching Applications

(or electronic CRM e-CRM) customer self-help applications/technologies.

Pull Model

In this model, also known as make-to-stock, the production process begins with a forecast, which is simply an educated guess as to customer demand.

Five Basic Components of SCM

Plan, Source, Make, Deliver, Return

Open-Source CRM Disadvantages:

Risk related to quality control Company IT platform must match development platform of open-source CRM system

Examples of Open-Source CRM

SugarCRM (www.sugarcrm.com) Concursive (www.concursive.com) Vtiger (www.vtiger.com)

Vertical Integration

a business strategy in which a company purchases its upstream suppliers to ensure that its essential supplies are available as soon as the company needs them.

Tiers of Suppliers

a supplier may have one or more subsuppliers, a subsupplier may have its own subsupplier(s), and so on

Supply Chain Management Systems

a type of interorganizational information system (IOS) in which information flows among two or more organizations.

Customer-Facing Applications

allow an organization's sales, field service, and customer interaction center representatives interact directly with customers through customer service and support, sales force automation, marketing, and campaign management.

Configurator

an online product-building feature that enables customers to model the product to meet their specific needs.

Information Help Desk

assists customers with their questions concerning products or services, and it also processes customer complaints.

360° Data View Customer

complete data set on each customer that allows a company can enhance its relationship with its customers and ultimately make more productive and profitable decisions.

Inbound Teleservice

customers communicate directly with the CIC to initiate a sales order, inquire about products and services before placing an order, and obtain information about a transaction they have already made.

Information Flows

data related to demand, shipments, orders, returns, and schedules, as well as changes in any of these data.

Distribution Portal

for a company's customers (downstream in the supply chain) automate the business processes involved in selling or distributing products from a single supplier to multiple buyers.

Procurement Portal

for a company's suppliers (upstream in the supply chain) this type of portal automates the business processes involved in purchasing or procuring products between a single buyer and multiple suppliers.

Financial Flows

involve money transfers, payments, credit card information and authorization, payment schedules, e-payments, and credit-related data.