IT AND TOTAL RELATIONSHIP MANAGEMENT

This paper provides some management implications on how to integrate IT, TRM, TQM in the house of Total Quality management in order to achieve better quality of the relationships, product/service and the process. The problem of integrating IT in building business relationships has yet not been solved in a comprehensive and satisfactory way. Electronic relationships can be used as a powerful competitive weapon in connecting the House of total relationship management’s different actors. The aim of this paper is to shed light on how these approaches, i.e. IT, TRM, House of Quality and the Total relationship Mix can be integrated, and to suggest how these approaches can add impetus to successful marketing management issues. A new concept of Total Relationship mix has also developed and discussed in this paper. The house of total relationship management, HTRM used in this paper to describes the basic components, principles and concepts associated with IT and the totality (holistic view) of managing a relationship.

Being a customer- oriented organization is important, but it is not necessarily enough to ensure success. Managers have to realize that it is precisely the right type of technology, psychological and emotional atmosphere in which employees are encouraged to create, coordinate, and improve the entire business environment including those actions, interactions, mutual adaptation and flexibility that facilitate the emergence of a healthy network of relationships. This kind of totality determines the ultimate source of competitive advantage in a dynamic marketing environment.

The problem of integrating IT in building business relationships has yet not been solved in a comprehensive and satisfactory way. Electronic relationships can be used as a powerful competitive weapon in connecting the House of total relationship management’s different actors. Unfortunately, many researchers view IT as a separate supporting element in developing relationships or as a facilitative relationship (Ford et al. 1998), but not as a core element that has an impact on every aspect of all types of organizations and human behavior.

No company remain a “technology island” and stay competitive. However, the opportunity to develop IT to construct a solid HTRM and strategic alliances or networks is only feasible for high involvement of electronic relationships.

Becoming a more creative manager is not just a matter of practicing new management techniques and methodologies- although these may certainly help- it is also about becoming more aware of the fundamental differences between the situation in the past and what is being faced today. It is about learning, adopting a new way of thinking, perceiving, showing concern and responding.

Companies operate in a highly competitive climate and offer a bewildering variety of new products and services to both final consumers and business firms. Today’s company should reengineer their business processes, policies and relationship views. Relationship management takes the view that effective relationships between organizations, are only possible when mutual value is continuously created and shared. This requires that people who comprise the chain of relationships by which value is created for the end-customer must themselves work together to define areas of mutual interest and the potential for sharing.

The managers who spend their time looking at how to do things differently, more cost effectively, and right the first time are the ones most likely to succeed. Now and in the future, the concepts such as IT and quality will involve focusing increasingly on enhancing customer value, forcing organizations to take a much more proactive stance towards their customers. Information technology (IT) should play an even more important role in total quality programs, as organizations try to make sure that the quality they offer is the quality that their customers require. Total quality offers should be focused on improving customer satisfaction at a reasonable cost.

The radical changes in today’s marketing environment resulted in an emphasis on Relationship Management, i.e. the importance of building and keeping a close relationship between companies, customers, and other business parties. Now the stress should be on the importance of technological communications in creating and enhancing business relationships (Relationship Technology). The problem of integrating IT in building international business relationships has yet not been solved in a comprehensive and satisfactory way. Electronic relationships can be used as a powerful competitive weapon in establishing a solid total quality construction (House). Unfortunately, many researchers view IT as a separate supporting element in developing relationships or as a facilitative relationship (Ford et al. 1998), but not as a core element that has an impact on every aspect of all types of organizations and human behavior.

With technology changing at lightning speed, it's difficult today to maintain a staff skilled in all fields of Internet technology. Often, solutions demand expertise from specialized disciplines that are not readily available in a company's internal resources. Co-operation between organizations may manifest itself in a number of forms, including: strategic alliances, strategic networks, entering into long-term contractual commitments; divulging of personal information, and adapting buying processes to meet the requirements of the seller or adapting production and delivery processes to meet the specific needs of the industrial buyer. Multinational firm alliances are being touted as critical mechanisms for competing in global markets and coping with the increasingly rapid pace of technological development. Thus, technology relationships and partnerships between and in some cases among organizations are becoming more important and prevalent. No company remain a “technology island” and stay competitive. However, the opportunity to develop strategic alliances or networks is only feasible for high involvement of electronic relationships.

This paper, is a theoretical and conceptual one, provides some management implications on how to integrate TRM, TQM in the house of Total of Quality management in order to achieve better quality of the relationships, product/service and the process. A new concept of Total Relationship mix has also developed and discussed in this paper. The aim of this paper is to shed light on how these approaches, i.e. IT, TRM, House of Quality and the Total relationship Mix can be integrated, and to suggest how these approaches can add impetus to successful management issues

In a large service organization, no single management function can be effective if it operates in isolation; operations, and human resources are actively involved in creating and delivering services. Marketing is so basic that it cannot be considered a separate function. It is the entire business when seen from the point of view of its final result, that is, from the customer’s point of view. In a large manufacturing organization, manufacturing, engineering, purchasing, accounting, finance, and personal functions are all part of the internal organization environment. These cross-functional activities and the people who perform them have a major influence in marketing (Lovelock, 1992). Management must be part of everyone’s job description, from the receptionists to the board of directors. This cross-functionality involves working together in teams and putting the fundamentals first: quality, efficiency, customer retention, and profitability. Figure 1, provides a depiction of the interrelationships between relationship management and marketing orientation, total quality, and profitability.

The main challenge of top managers is to ensure that each function is compatible with the others and that all are mutually reinforcing. Other functional areas of the organization and all employees should have common and equal responsibility towards quality and customer satisfaction. Many organizations have committed themselves to the concept of total quality management (TQM), with quality improvement techniques being applied to almost every area of product development, manufacturing, operations, administration, and customer service.

Marketing is almost never mentioned, except as a source for determining customer requirements (Stowell, 1989).

Organizations that practice a relationship management orientation can also be leaders in total quality. TQM in marketing can have a major impact upon an organization by improving customer relationships and satisfaction, reducing marketing expenses, increasing sales and business profitability as well as by providing a competitive edge.

A company has to grow beyond its current organizational constraints by developing a strategic network with subcontractors and distributors as well as to build and develop strategic relationships with other parties and customers. A strategic network is ”a set of companies that work together towards a common goal- and become interested in why such networks are in some cases more efficient than other organizations”.

However, developing a strategic network or being a customer- oriented company is important, but it is not necessarily enough to ensure success. Managers have to realize that it is precisely the right type of psychological and emotional atmosphere, and environment in which employees are encouraged to create, coordinate, and improve the entire business environment including those actions, interactions, mutual adaptation and flexibility that facilitate the emergence of a healthy network of relationships. This kind of totality determines the ultimate source of competitive advantage in a dynamic environment.

The main problem and challenge is how the different internal and external parts of a business to coordinate in an efficient and flexible manner. In 1993, J. Carlos Jarillo remarked that:

”It is not surprising then that the last few years have seen a plethora of articles and books on topics such as networking, value-added relationships, de-layering, modularization, the need for companies to nurture long-term relationships in all spheres. All those works point in one direction: companies must look at their boundaries with new eyes- things that have traditionally been ‘inside’ should perhaps be ‘outside’, and ‘outsiders’ might perhaps deserve the treatment of ‘insiders’. But many of those articles and books just describe what seem to be ‘new’ practices without showing a real understanding of the underlying causes of the ‘problems’ and, particularly, of the long-term effects of the ‘solutions’.”

Coordinating a web of both internal and external functions and relationships is certainly not an easy management and marketing task when attempting to face the current competitive requirements better than one’s competitors. Competition has always been strong, but the current widespread comments about the special intensity of competition are clearly warranted. As a result, companies can no longer afford to maintain barriers between functions and departments (Zineldin et al. 1997, Zineldin, 1998, 2000; Ford, 1997). IT can be used to remove or destroy such barriers.

Managers have to stress the need for integrating related functions within the organization- production, sales and distribution, services, marketing, accounting, logistics, advertising, sales promotion, product planning and market research- to achieve the organization’s business and marketing objectives. Effective marketing stresses managing the total relationships that will bring about additional values (Zineldin et al. 1997; Zineldin, 1998). It is the manager’s as well as marketer’s job to create, interpret, maintain, and enhance positive, sustainable and close relationships between the company and the customer. This philosophy can be referred to as Total Relationship Management (TRM). It focuses on and is concerned with:

· internal analysis of all integrated activities within the organization (internal relationships),

· mutually beneficial relationships, communications and interactions outside the organization with suppliers, dealers, distributors and other collaborators, e.g. bankers, trade unions, politicians or public bodies (external relationships). Continuous improvement or these relationships, communication and interactions.

TRM highlights also the role of quality and customers service, the impact of the external environment on business rules and performance, on relationships and networks, on communications and interactions with suppliers, distributors, dealers, other collaborators and employees in different departments/functions, as well as on customers (in consumer or industrial markets alike). The essence of any relationship is communication and interaction; it is communication, in one form or another, that links people or organizations together. In addition, everything that happens between two individuals or organizations can be seen as part of a continuation or preparation for future interaction.

A Total Relationship Management (TRM) is viewed as a strategy and a philosophy. It is ´total´, because it considers and coordinates ‘all’ activities- including internal and external relationships, networks, interactions and co-operation as well as all activities involved in getting, keeping, enhancing and satisfying customers throughout quality. It is a strategy because it emphasizes maintaining high products/services, internal and external relationships quality, and trying to keep customers in the long run.

It is a philosophy because it should be used to communicate the idea that a major goal of management is to continuously improve the total quality, and to plan and build appropriate close and flexible long-term relationships with the parties who contribute to the organization’s success and long-term growth. It should also guide the overall thinking in the organization, in decision making as well as in the execution of predetermined plans. That is why we can also call this approach a total strategic relationship management and philosophy.

The total relationship management (TRM) philosophy has much in common with TQM. TQM as well as TRM derives from a common business philosophy that focuses on customer satisfaction, integrated activities, and long term profitability (Drummond, 1992, Deming, 1996; Ishikawa, 1985; Oakland, 1992). Profitability is higher due to increased efficiency achieved through the effective use of resources (e.g. reduction of costs and working capital). Thus, a total relationship management (TRM) highlights the interrelationship between the efficiency and effectiveness, the productivity as well as the profitability of the organization’s operations and activities. A total relationship management (TRM) philosophy, if it results in greater customer satisfaction, is seen as a way of improving the profitability of the organization’s operations.

The main philosophy behind the TRM approach is to facilitate, create, develop, enhance, and continuously improve appropriate internal and external relationships with customers, employees and collaborators (other independent organizations or institutions). A network of relationships with different organizations or partners evolves or creates a considerable number of interactions which can control itself. Each of these relationships and interactions needs to be managed, where appropriate, through a formal strategy and marketing plan. Thus, a total relationship management (TRM) philosophy should be the basis for reengineering.

The main goal of this totality approach of relationships is to produce and deliver products and services with an adequate level of functional and technical quality, adequate price, fast response delivery times, convenient distribution channels and, of course, to allow the organizations to realize the targeted short and long term profit and growth levels as well as to provide those organizations with a fair competitive edge.

Technology is constantly changing. We can no longer assume that our current range of products will continue to be demanded by our customers. The advent of the computer has of course revolutionized just about every facet of business life, whilst the merging of telecommunications and computer technology is causing a fundamental reappraisal of a whole host of industries, with new ones springing up to replace those that do not keep abreast of changing technology (Blattberg and Deighton, 1991; Blattberg et al. 1994).

Yet information technology (IT) and information systems (IS) are most essential to provide the information needed for successful relationships or partnering (Cash et al, 1992; Achrol, 1991; Konsynski and McFarlan, 1990; Pawar and Sharda, 1997). Without information partnership and information sharing (relationship based on information), Tom Peters emphasizes, ”… all other aspects of partnership remain stuck at the stage of lip service or less” (Konsynski and McFarlan, 1990). Venktraman (1997) states the following:

”How to best extract value from information technology (IT) resources is a major challenge facing both business and IT managers, particularly as they turn their focus from searching for the competitive benefits of strategic information systems and striving for benefits beyond process reengineering.”

The problem of integrating IT in building marketing relationships has yet not been solved in a comprehensive and satisfactory way. Unfortunately, many researchers view IT as a separate supporting element in developing relationships or as a facilitative relationship (Ford et al. 1998), but not as a main core element that has an impact on every aspect of all types of organizations, markets and marketing. The previous discussion forms the foundation for more general propositions concerning relationship marketing, strategies and IT.

On the web, there are a number of ways to form an alliance - some simple, some complex. Among others, these methods include: reciprocal link programs, affiliate programs, and web-based preferred-provider relationships. Intranets are one of the hottest applications of internet technology for business. Intranets capitalize on the fact that most organizations distribute far more information internally than they do to the outside world. The Intranet serves as an easily accessible repository for corporate information; anything from strategic targets to health plans (Frost and Strauss, 1997). One of the most significant changes in IT in recent years has been the emergence of Electronic Data Interchange (EDI). EDI is a system based on IT that links, for example, channel members for purposes of facilitating the flow of a product or service through the channel (Kahn and Mentzer, 1996). EDI can also be a ‘tie that binds’. Getting customers to invest in sharing information about sales and inventories can provide a powerful disincentive to switch suppliers. The benefits are reduced system costs, efficiency and increased customer and consumer satisfaction. Business-to-business electronic commerce is expected to be the fastest growing area for Internet sales. In 2000, this form of commerce will generate $66 billion (McCollum, 1997).

EDI is a technology for facilitating information exchange between channel members. EDI involves the paperless transmission of information exchange between manufacturers, suppliers, and retailers. These paperless transmissions include sales data, purchase orders, invoices, shipment tracking data, and product return information. Quick-response (QR) logistics and inventory systems use EDI applications to automatically replenish stock as it is sold. QR systems also build customer satisfaction by reducing stockouts. A high level of commitment between channel members must exist throughout a logistics pipeline for QR to operate. Technologies that assist and expedite information exchange between channel members are also contributing to a revolution in the manufacturing process. By operating on the real-time transmissions of sales and other logistics data between the channel parties operating at different levels in distribution systems, JIT eliminates the need for excess inventory. In addition to the impacts of QR on the manufacturing operations and inventory systems, marketing management also improved (Allen, 1994).

e-Business marries the needs of enterprises and consumers with the ever-evolving cyber technology. The result: companies go electronic to communicate with each others and with their customers. Online marketing is also self-selective. Companies know the customers who visit their site are interested. They want to know more about the product. Not only does this help identify the highest-potential consumers, it permits a depth of sale that no other medium can provide. It reaches consumers in literally every part of the world. Another benefit of online marketing is that it is interactive. It enables companies to engage consumers in a way that no other medium can. One-to-One business and marketing is the unique capability of online communication.

The rest of this section, however, considers implications for strategy in recognizing relationships as the basis for allocating and aligning the resources in an organization. The ‘relationship mix’ is a central concept in devising a relationship strategy. In addition to the traditional 4 Ps, several major elements should be part of the new marketing mix, i.e. relationship mix. In the following, we make and discuss a vital point: relationship management and marketing differs from traditional marketing which focused on the product/service combination and applied the 4 Ps of marketing to manage demand and facilitate the exchange of goods for money. The marketing mix approach is still valid and helpful, but it needs to be reconsidered, renewed, extended, and improved.

With relationship management and marketing, the marketers becomes corporate strategist and links with the information technology and process engineering professionals, to ensure that relationship orientation delivers the value and benefits customers desire.

The vital point is that the quality of a relationship is a function of a number of factors or elements, among others, innovation and improvements, internal cooperation, skills and performance of employees including managers, physical resources, promotion, quality, delivering and pricing of products/services, customer expectations and satisfactions, etc. Information technology (IT) including DataBase marketing (DBM) is an essential part of strategic RM. It helps managers to coordinate activities in their internal and external networks.

The combination of elements a manager and marketer chooses is called the total relationship mix. A total relationship mix should include all individual and organizational activities, communications and elements that a firm uses to create, develop, and maintain appropriate strategic relationships in a dynamic environment with appropriate consumers and industrial customers. Effective marketing stresses managing the whole range of such activities. Effective mix of these activities will bring about additional values.

Some organizations emphasize innovation and product/service improvements efforts in their relationships mixes. Others, especially those engaged in business -to- business marketing, make networks, problem solving and interactions which involve exchange of values and supporting joint activities- such as product/service exchange, information exchange, financial exchange and social exchange- the main ingredient. No matter what the relationship mix is, marketers and managers should strive to blend the elements effectively, integrating and uniting the appropriate elements to accomplish their effort to create, develop, and maintain appropriate strategic customer relationships.

The main elements of our relationship mix are illustrated in Figure 2. In the Figure we identify an environment (atmosphere) of seven different zones (Zineldin’s Sven Zones) of variables that influence customer relationships (Zineldin, 2000). These elements are:

Information technology (IT) is a common factor in the total relationship mix elements.

The essence of any relationship is communication and interaction between at least two parties who are in contact with each other. It is communication, in one form or another, that links people and companies together. It is the fabric of human society. It is people, not accounting systems, computer terminals or trading agreements, who can communicate effectively with each other in order to exchange values. Effective communication and manipulation of IT systems provides people and organizations with a powerful tool to create and retain stronger relationships with existing customers and to find new potential customers (business customers, consumers, suppliers, distributors, etc.).

The customer relationship can also be seen as an interaction process between the organization and its customers within a certain environment and atmosphere. An interaction process includes a series of moments of truth between the customer and the product/service provider. What happens in these interactions obviously has a significant effect on the customer satisfaction and the relationship as a whole. When communication and interaction are effective, both parties gain something of value. Networks occur when the relationships become many, complex and difficult to overview (Gummesson, 1995b). Networks and strategic alliances with other collaborators provide companies an competitive edge and advantage which in turn influence the relationship between a company and its end customers.

Word-of-mouth is probably one of the most powerful elements in creating and keeping customers. It can either hurt an organization’s reputation and its customer relationships, or give it a boost in the market and strengthen and ties the relationships with its different parties. The relationship may also be affected by the customer previous satisfaction, experiences and expectations and the image of the firm and its products/services.

The environment in which a service or a product is delivered/offered and/or consumed, is central to the customers’ understanding of the product/service and to their satisfaction. Physical resources or physical evidence includes physical facilities, tools and equipment used to provide the product/service, other customers’ behavior, and staff appearance, especially in services marketing, are clearly important to the customers when evaluating the quality of services they receive in their interactions with the organization. Effective using of IT increases customer loyalty and retention as well as enables tailored ‘individualization’ offerings to be matched more precisely to customers’ individual needs and requirements.

It is important that everyone in the organization can see the linkage between what she/he does and its impact of the external customer. Therefore, creating internal relationships between departments, functions and employees inside the organization are necessary actions to improve the performance of the company and its employees.

Credibility: involves trustworthiness, honesty, and believability. Some factors that influence the credibility are company reputation and name, personal characteristics of the contact personnel, and the degree of hard sell involved in interactions. The character of an organization’s management, the strength of its financial situation, the quality of its innovations, and the capabilities of its alliances are also some measures of an organization’s credibility. The company’s and the employees’ credibility has direct influence of creating and maintaining quality relationships.

Efficiency: which is related to the organization’s inputs and outputs and the way an organization and its employees produce and deliver the product/service. It has to do with response speed and low costs. The way the customer perceives the operations and the output of the organization reflects customer satisfaction and the quality of the relationships and interactions.

Empathy: involves caring, understanding the customer’s specific needs and requirements, and giving individualized attention to customers.

Responsiveness: is related to the ability and willingness of employees to help customers and provide prompt service or product. It also involves speed and flexibility when dealing with customers. Responsiveness is an issue which directly affects customer perceptions and satisfaction. It is an important aspect in developing a long-term customer relationship.

Problem solving: The seller’s ability of responding to meet the buyer’s need for problem solving is a key factor which gives firms competitive strength when developing a long-term customer seller-buyer relationship. Some problem solving strategies are:

product development with better qualities than the existing one in order to be technically and functionally ahead of the competitors.

customer adjustment which includes adaptations to design, dimensions, or quality in order to meet the individual needs of a customer,

low price strategy which is directed towards customers who do not have specific individual demands on the functional qualities of the product. Thus, the price is their main problem.

The ability of problem solving requires highly skilled, trained and flexible employees who have a good knowledge about the organization’s products and how can they deal with problems.

Effectiveness: There is a direct relationship between a company’s and employees’ effectiveness and the competitiveness in the market. Competitiveness deals with how effective and efficient an organization is, relative to its rivals, at serving and satisfying customers and resellers. Effectiveness deals with the quality of products/services, market share, and profitability. Both effectiveness and efficiency ultimately depend on competitive rationality- the strength of the organization’s competitive drives and its decision-making skills. Effectiveness does mean attracting new customers and enhancing the existing ones.

Figure 2. A Total Relationship Mix. .Elements Zineldin’s Seven Zones Model’

Productivity: Productivity improvement is an important variable in producing an acceptable product/service quality for any customer oriented organization. Improving productivity and increasing quality increase at the same time customer satisfaction, which in turn leads to keeping and strengthening the customer relationships. An investment program in new technology and in personnel training are essential in creating and keeping close and long- term customer relationships.

Employees’ skills, behavior, moral, attitudes and motivations are some critical determinants of long-term success in satisfying customer needs and wishes. It also contributes to promote, develop and sustain profitable relationships with appropriate customers. Motivating employees to better performance and improved relationships with internal and external customers is likely to be an important part of the equation when we consider that relationships built and maintained by individuals. Customers are always more loyal to the employee who deals with them than the wider organization.

The traditional marketing instruments such as location, personal selling, advertising, publicity and public relations are the main subsets of promotion which can be used to inform potential customers of the organization’s products/services and to help accomplish creating and keeping customer relationships. For example, location and distribution decisions have to be made with the customer in mind not only in terms of availability but also with respect to service levels, image and customer convenience. The size and quality of the sales force can be used as a competitive advantage. Sales promotion and direct marketing can be used to create or raise the interest and awareness of the potential customers as well as to convince, attract and hold them as loyal buyers of company’s products/services. IT and DataBase marketing (DBM) present opportunities to develop new relationships at lower cost.

Using product features to convey customers benefits in excess of what the competition is offering as a tool for competitive advantage is often the most appropriate way to satisfy customer needs and to establish a long-term customer relationship. A product/service technical quality (i.e. the technical specifications of a product/service), functional quality (i.e. the manner in which the product/service is delivered) as well as the organization’s ability of innovation and product/service continuous improvements, are very essential elements when attempting to deliver customer satisfaction which in turn influence the customer loyalty and relationships.

Another element which is important in customer retention and relationship is pricing. Managers and marketers have to take into account the necessity to discount and give allowances in some transactions to some customers. Payments and credit terms affect the real price received in any transactions. A reasonable product/service pricing, relative to the quality and the competitors’ pricing system is a key communicator of value.

Information technology (IT) is much broader in scope than advertising, data collection, home pages, selling products/services, direct mail, data bases, or public relations. IT will have as profound an effect on the way firms market products and services as the airplane, car, and television have had on other aspects of our lives. Scholars and managers, must begin to take IT more seriously (Glazer, 1991; Hoffman and Novak, 1996, 1997). Managers must be aware of the new developments in technology and its possible effects. Technology can and does affect business activities and relationships in many different ways. It influences communication and coordination processes within a network with alliances and other collaborators. Technological advances and implementation can revolutionize an industry or destroy one. How an organization uses, or does not use, technology is important for its long-term relationships and its long run survival.

These variables affect the perceived value of a product/service offering and have a direct influence on developing and enhancing a continuous relationship with customers.

Moving from product and selling concepts to the relationship philosophy requires changes in the attitudes of every level of organization staff, and also requires a change in the relationship mixes and marketing strategies. When the objective of a company is to create mutual and shared value with its loyal customers over a life time, the elements of the marketing mix change fundamentally.

Getting customers is essential, but keeping and satisfying customers is more important. Marketing is essential, but it is not the only function of the organization. Each marketer must cooperate with other people in the organization who perform non-marketing tasks. For instance, in a large manufacturing organization, manufacturing, engineering, purchasing, accounting, finance, and personal functions are all part of the internal organization environment.

In a large service organization, no single management function can be effective if it operates in isolation; operations, and human resources are actively involved in creating and delivering products and services. These functions and activities and the people who perform them have a major influence in marketing activities (Lovelock, 1992). However, four main important changes have occurred that alter the orientation from a focus on marketing mix to focus on relationship mix:

Now, technology can combine the 4Ps (product/service, price, promotion and distribution in infinite varieties. And it can do that in real time, allowing customers to engage and interact with the organization and all aspects of its value-creation processes. Most organizations need technology to enable the customer relationship throughout the organization’s value chain. Relationship management and marketing strategy changes the fundamental role of marketers.

With relationship management and marketing strategy, the focus is on customer retention and loyalty. The marketers have to determine which customers will retain (defensive strategy)

The managers have to determine and make decisions about how to attract new customers (offensive strategy)

The managers have to determine customers’ needs and expectations of the technical and functional quality of the Prodserv.

The managers have to develop customer strategies to deliver those expectations. Taking in consideration the capabilities and mission of the organization (SWOT analysis is a useful tool).

Today, the role of each manager of each function is touching every other function and aspect of the organization. In the process of developing new products and services, the managers have to cooperate and integrate with all other functions of the organization, e.g. production, R & D, design and engineering, human resource, logistics, etc.

The role of relationship management and marketing moves from managing demand and product profitability to collaborating with internal and external customers. The marketers have to managing customer loyalty and profitability. The marketers have to develop and mange customer loyalty and profitability. They have to identify which customer profitability is planned, delivered and improved.

The top managers have to ensure that the organization structure is organized around the customers. They have to ensure that the customers collaborate and integrate with all key processes, technologies and people in a combined effort to create collaborative value for both.

With relationship management and marketing, the focus is also on the totality. The marketers as well as the managers have to create, interpret, maintain, and enhance positive close internal and external relationships. The main goal is to produce and deliver Prodserv packages with an adequate level of functional and technical quality, adequate price, and fast response delivery times.

Instead of the conventional marketing mix approach, a total relationship mix approach or view is a more effective, serviceable and profitable way of approaching an effective relationship management and marketing strategy. The main role of the total relationship elements/mix is to turn existing and new customers or other parties into loyal clients or partners.

As with any house, the model and plans must first be drawn, usually with some outside help (environmental forces). Once the design has been approved, construction can begin. It usually begins with the identifying of opportunities, threats (competitive analysis), inputs (suppliers and other collaborators), key strategic issues and outputs (internal functions and channels of distributions), and these constitute the cornerstones upon which to build for the future.

Figure 3 illustrates the house of total relationship management. The house of TRM used here describes the basic components, principles and concepts associated with the totality (holistic view) of managing a relationship. The house of TRM represents:

A roof, the umbrella or superstructure, consisting of the most important factors that influence the activities of an organization, i.e. the macro-environmental forces

The foundation of the house gives the systematic competitive analysis to identify strategic issues, problems, and opportunities;

The right wall of the house shows the internal activities and relationships of the organization, as well as the relationship with its distributions or the sources of inspiration;

The left wall of the house gives the most important considerations to the production of the output, i.e. internal relationships and functions (e.g. production, design, R & D, marketing, logistics, etc.), as well as the relationships with channels of distribution.

The heart of the house comprises the relationship between the organization and the light or star of the organization (i.e. the customer). This is where customer needs and requirements become a reality.

The organization must structure its house of TRM and adopt the philosophy of a total strategic relationship management that emphasizes the following cornerstones (c) and activities:

C1: Creating and managing a systematic external marketing audit system that includes the macro-environment forces (Macro analysis). This improves the organizations’ ability to predict the future of the market.

C2: Creating and managing a systematic marketing audit system that includes the market and the competition, with a view to identifying key strategic issues, problems, and opportunities. A systematic market audit and research will improve strategic business planning as a result of the earlier identification and assessment of future market trends and opportunities (Competitive analysis).

C3: Creating and managing internal marketing, networks and planning discipline within all parts and functions of the organization. The acceptance of a planning discipline will be based on defined objectives that all departments and functions must gear their activities to and integrate their programs within. It is important to continuously improve the internal relationships, for they directly influence the quality of the whole process and operations. (Internal relationships and networks).

C4: Creating and managing relationships with distributors. It is equally important to create and care for professional relationships with them, for they directly or indirectly influence the quality of the organization’s image, work, and activities. They are a valuable information source regarding the needs, wishes and attitudes which are the basis for the total improvement. (Relationships and networks with the sources of inspiration).

C5: Creating and managing relationships with subcontractors or suppliers who provide the material or sub-components. Creating a quality network with subcontractors increases the possibility of predicting fluctuations in demand levels, reduces operation costs and improves the quality of production by achieving an efficient scale, as a result of a deepening of the relationship with those subcontractors (Relationships and networks with the sources of innovation).

C6: Creating and managing relationships with external collaborators (e.g. bankers, unions, politicians) who contribute to the organization’s improvement, success and long-term growth,. (Relationships with other collaborators).

C7: Creating and managing mutually profitable and fair relationships with customers and/or clients ‘the heart or star of the organization’ through the continuous improvements of both the functional and technical product/service quality, and the total relationship mix including the 4 Ps, etc. This puts the customer, individual or organization alike, at the center of the organization’s activities and planning (Relationships with customers and clients).

IT (Information Technology) is a common factor for all activities inside and outside the HTRM,. Its an effort to maintain firms’ ability to handle an increase in product/service volume while controlling costs; it also enables firms to be both innovative and market oriented. IT and computers networks between companies helped them to remain competitive and profitable. A company that does not adapt to changing science and technology can face painful competition and may fall victim to competitors that have switched their strategies to the more technologically based alliances and relationships.

The only solution for an organization that wishes to achieve the ultimate competitive advantage is to construct and reside in the house of TRM. Understanding and managing all these relationships and functions of the house of TRM in an effective and profitable manner is an essential condition toward acquiring a long-term competitive edge over other organizations.

The penultimate goal is to make sure that the customer and/or clients (stars) get exactly the quality they are expected to receive, in an efficient and profitable way. In short, the degree of customer satisfaction and the quality improvement should always be at the center of a company’s focus. Creating customer satisfaction is the most important concept in a definition of a total relationship management (TRM).

To get beyond the mere descriptive and theoretical level, managers have to gain a full understanding of how the different parts of a whole business can be coordinated in a holistic way. That is, simultaneously to be efficient, flexible, and conducive to continuous improvement, innovation and creativity. In short, effective using of IT and the house of TRM highlight the following:

· Facilitating and coordinating activities within the organization (internal relationships),

· Each individual in the organization is responsible for the continuous improvement process,

· Indeed, one main point of a total relationship management is that the marketing application will reduce the risk of loss due to inadequate market information and customer knowledge, misreading of the market including the external environmental forces, poor productivity, efficiency, effectiveness, and poor product planning and selection.

Managers from different parts of an organization have to work together across traditional functional boundaries to develop, improve and offer high quality product/service packages. Through quality management one can find a structure for planning, improving and controlling the types of internal activities that will attract new customers as well as retaining and enhancing the existing customers. A good relationship strategy should try to identify and build barriers that stop customers from switching to the competition. Long-term relationships with other collaborators, e.g. distributors and subcontractors may provide the only cost-effective access to the marketplace. Such a strategic relationship mix approach provides guidance on how to leverage business performance and profitability in an increasingly competitive environment.

The main objective of this philosophy is to create and keep a relationship with the individual and organizational customers or collaborators and to satisfy their objectives, needs and wishes as well as to satisfy the needs and objectives of the firm including its shareholders and staff members.

Finally, a product or service is the most important element or means used in a production or consumption process to achieve a customer’s particular end or ends. A long- term relationship and customer loyalty are in fact dependent on how well a product or service measures up to the total customer satisfaction (Payne, 1995). It is said that beauty is in the eye of the beholder. In terms of marketing decision making, quality is in the eye of the target benefit segment. It is therefore essential to understand the processes that produce new products/services and, further, to understand how to mange and facilitate them.

Effective IT communication tools and computer networks enable companies to remain competitive and profitable.

1. Customer satisfaction which is the emotional response to the difference between what customers expect and what they ultimately receive.

2. Continuous improvement which involves every one of the organization, including both managers and workers.

3. Managing with facts. The House of quality deals with basing decisions on solid research rather than simply intuitions or organizational politics. Successful planning of relationship strategies requires facts and information about potential target markets and competitors.

4. Respect of people. Today’s employees wants to be empowered instead of controlled. They need to understand the vision and mission of the organization. They will be more committed when they clearly understand the direction in which the organization is moving and their role in it. Respect and empowerment requires mutual trust.

Creating a system of networks, alliances, and relationships among a company’s functions and with other companies provides the means to create a competitive advantage. The creation of mutually beneficial relationships with suppliers and subcontractors is a vital step toward creating a distinctive market position. For example, a network of Hughes Aircraft company, and Electronic Data systems, and General Motors, provided access to leading-edge technologies as General Motors began to design its auto lines for the twenty-first century.

Finally, integrating IT with tThe house of TRM is an unforgiving and very demanding process. One weak link and the whole effort can be wasted. Thus, making a quality product demands a lot of cooperation and coordination through IT and the value chain of activities within an organization to produce value for customers. If the customer can be integrated into the product development process, through cooperation and collaboration in real time, an intense relationship can begin. In the long run, however, relationship orientation should lead to better profits through developing of superior quality Prodserv, which should produce higher productivity and stronger customer loyalty.

IT provides a viable means for making developing and sustaining long term business relationship a reality. IT tools should be used to provide relationship-building credibility and opportunities. It is obvious that nowadays organizations and people (consumers) will have difficulties in separating a relationship from IT. Thus, we argue, in this paper that technologicalship marketing (relationship marketing-based IT) should incorporate both internal and external relationships. We integrate IT and house of total relationship management to show the inseparable nature and impact of IT on all kinds of relationships.

While TQM focues on quality of product and service, TRM derives from a broader perspective. It focuses on "totality" of the internal and external functions and relationships. The house of is developed and discussed. It suggests that continuous quality improvement is not just for product or service. It means that everyone in all parts of the house/involved organizations places top priority on continuous quality improvement of everything throughout and among these organizations and managing all internal and external relationships and processes. TRM emphasizes maintaining high products/services object and process related quality, and trying to keep customers over the long run by continuous improvement of the 5 qualities (5Qs). Creating, improving and enhancing long-term internal and external relationships need also continuous quality improvement of the total relationship mix as well as using effective IT systems and programs. The main challenge facing the house of TRM is the lack of relationship quality dimensions and assurance programs. Thus, TRM can gain considerable synergy effects from TQM when co-ordinating, for instance, engineering, production, suppliers and marketing by using the tools of TQM. Some of these tools and methods are identified and discussed in this study. Finally, the issue of the house of quality, TRM and the total relationship mix deserves more comprehensive theoretical and empirical research.

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[1] Associate Professor in Strategic Marketing and Management, School of Management and Economics Växjö University SE- 351 95 Växjö Sweden, Phone: ++46 470 70 87 98, Fax: ++46 470 830 92 E-mail: mosad.zineldin@ehv.vxu.se