consumer markets

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GhgbeEvtug

Business Finance

Description

Answer the following questions.

  1. One of the common uses of customer relationship management (CRM) in consumer markets is to rank customers on profitability or lifetime value measures. Highly profitable customers get special attention, while unprofitable customers get poor service or are often “fired.” What are the ethical and social issues involved in these practices? Could CRM be misused? How and why?
  2. Think about all of the organizations with which you maintain an ongoing relationship (banks, doctors, schools, accountants, mechanics, etc.). Would you consider yourself to be unprofitable for any of these organizations? Why? How might each of these organizations fire you as a customer? What would you do if they did?
  3. Given the commoditized nature of many markets today, does customer relationship management—and its associated focus on quality, value, and satisfaction—make sense? If price is the only true means of differentiation in a commoditized market, why should a firm care about quality? Explain.

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Explanation & Answer

Attached.

Running head: CUSTOMER RELATIONSHIP MANAGEMENT

CUSTOMER RELATIONSHIP MANAGEMENT
Student Name
Course title
Date

1

CUSTOMER RELATIONSHIP MANAGEMENT

2

Q1
Often, customer relationship management is used to grade consumers in customer
marketplaces, mainly based on lifespan value processes or profitability. As a result, highly
profitable customers are given top priorities in terms of services, while unprofitable customers are
lowly prioritized. This form of differentiation cannot be justified, and is actually considered an
ethical implication and a disadvantage of relational marketing.
CRM mainly seeks to build strong relationships with the most profitable customers.
Therefore, CRM seeks to segment consumers based on their values, hence, some customers are
considered more valuable (Demo & Rozzett, 2013). This causes companies to discriminate
consumers by treating them differently and problems can arise when such cases occur.
For instance, when different segments communicate with the company and with each other
regarding issues of discrimination through social media platfor...


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