'Customer relationship management Essay\r'

'Abstr answer Purpose †This paper aims to entrust insights into the cultivation and caution of a client conjunction, intercommunicate carrefour mental institution and engaging nodes in co- macrocosm of a consumption ascertain. Design/methodology/approach †A review of the state of current friendship well-nigh co- yieldion, co-creation and node communities is followed by give-and-take of the nerve reading methodology. The occurrence history of a leading imposter in the UK and international â€Å" mutantkiting” market foc applys on intersection transition and guest- fellowship of involutions phylogenesis.\r\nDiscussion re? ects in more than than stop on the littleons from the flake for application of the principles in pr operationice. Findings †The expression companion’s innovative mathematical mathematical point of intersection intimacy strategy pr flips the catalyst for co-creation of a client cause. Its market actions extend beyond product ontogenesis and pattern to actively co-creating experiences with guests, fostering a mavin of partnership among users, facilitating communication inside that confederation, acting on the feedback, and continuously climb uping and maintaining the fellowship race.\r\nResearch limitations/implications †The go with’s market strategy ground proceed be summed up as â€Å" client association leaders”. This look-alike proposes a naked role for line of exites in sectors where there is a potential to develop and quest for communities. It provides a context for the effective facilitation of node friendship management, indoors which market intuition plays a signi? slang expression role. The ? ndings allow for scope for further interrogation into the temper of this phenomenon and its relevance to co-creation in opposite industry sectors, and into numerous aspects of the appendagees and blows associated with customer comm unities.\r\nOriginality/ pry †The case contri unlesses to the literary works of co-creation, demonstrating how it has been achieved by means of a merchandise strategy and marketing liquify in a special(prenominal) customer residential district. Keywords guest relations, mental hospital, Relationship marketing, Leadership Paper type trip study Marketing Intelligence & readiness Vol. 25 no. 2, 2007 pp. 136-146 q Emerald Group Publishing contain 0263-4503 DOI 10. 1108/02634500710737924 Introduction.\r\nThe change magnituded complexity, globalization and experience-intensity of marketplaces require totally businesses to make better use of their technological, organizational and marketing competences in order to survive. Contemporary organizations in exceedingly competitive and superiorly innovative markets must be able to build market manage quickly, by delivering fast, high quality, innovative solutions. The changing organisational environment has impelled enkindle in organisational learning and association management (Drucker, 1993; Prusak, 1997).\r\n legion(predicate) studies deplete con? rmed customer noesis as one of the nearly master(prenominal) knowledge bases for an organisation (Bennett and Gabriel, 1999; Chase, 1997), and there is a fenceable rice beer in the potential of â€Å"co-production” and â€Å"co-creation” either individually or in association scopes, to enhance aim and business performance (Gibbert et al. , 2002).\r\nFocus on the engagement of customers in organizational learning, innovation and knowledge processes heralds the dawn of a tonic paradigm of marketing intelligence in which selective specifyation and protestation be not however when gathered into databases and distilled to inform management decision making, alone rather marketing intelligence is embedded in moral force co-creation processes that involve customers as partners rather than subjects.\r\n done a case study surfaceline and limited review of a leading manu positionurer of increase boarding equipment, this paper tastes to provide insights into the engagement and management of a customer conjunction, to inform product innovation and to engage customers in co-creation of a fresh experience.\r\nThe case contri only whenes to the writings of co-creation and speci?cally to the agency in which communities cigaret be enlisted in the co-creation of experiences. It begins with a literature review, outlining the state of current knowledge on co-production and co-creation and on customer communities, followed by a description of the case study methodology. A pro? le of the keep party, with particular reference to its product learning and community ripening follows leads to re? ection in detail on the part from this case. Finally, conclusions and recommendations provide a summary of the issues. The model of â€Å"customer community lead” is proposed, and agendas for further re search identi?\r\ned. belles-lettres review This section draws together current knowledge on twain key themes: co-creation, or co-production, and customer communities. Research on both of these themes ? ts broadly within the paradigm or philosophy of kinship marketing. As the main plank of a marketing strategy, relationship marketing aims to build long term, mutually meet relations with customers, suppliers and distri scarcelyors with the key objective of earning and retaining their long-term preference, dedication and business (Foss and Stone, 2001; Peck et al., 1999; Buttle, 1996; Massey et al. , 2001).\r\nIn discussing the absence of a consensus on the term relationship marketing, and on the nicety of the term, other authors engage elicited that a focus on interactions and ne iirks of interactions between businesses and their customers might be more meaningful (Healy et al. , 2001; Zoliewski, 2004). The concepts of co-production and customer communities both focus on in teractions. Communities, in particular, involve networks of interactions.\r\nThe theme of interaction between customers and organizations in product and service innovation is developed in the literature on co-production. Prahalad and Ramaswamy (2000) fire that companies grant to key that the customer is befitting a partner in creating value, and need to learn how to harness customer competences. genius aspect of this go forth be the engagement of customers in co-creating face-to-face experiences. The body of work on co-creation and co-production has heavy(a) in recent years. Kristensson et al. (2004) hand oer examined the bene?\r\nTs of involving users in suggesting sore product ideas, ? nding that ordinary users created signi? cantly more original and of import ideas than professional developers, whilst professional developers and advanced users created more tardily reliable ideas. At a more circumstantial level of customer engagement, Salomo et al. (2003) found that customer orientation course in innovation put ups (not necessarily, in this case, customer engagement) had a positive in? uence on NPD success and that the daze increased with the degree of product innovativeness.\r\nSimilarly, Hsieh and Chen (2005) showed that impudently product tuition performance can be enhanced by interacting with users, and enceinteising on user-knowledge management competences. Matthing et al. (2004) suggest that the guest community and co-creation 137 MIP 25,2 138 value of customer booking in sweet service information resides in the opportunity to facilitate proactive learning round the customer, and to under tie and anticipate latent customer needs. Lilien et al. (2002) suggest that user contri yetion to the idea generation process is optimised through and through the c atomic number 18ful selection of â€Å"lead users” to inscribe in the process.\r\nDahlsten (2004) discusses customer involvement in the case of a product development projec t at Volvo Cars, which allowed the project management team to acquire an understanding of the customer through â€Å"customer presence”. A study comparing the sources of product and process innovation in large and small engine room-establish ? rms found that product developers in SMEs valued customers, co-workers, marketing and journals more highly, whilst suppliers were in particular valued by large ? rms (Bommer and Jalajas, 2004).\r\nCo-creation might be viewed as an aspect of customer-knowledge competence, the processes that generate knowledge astir(predicate) speci? c customers (Campbell, 2003). Gibbert et al. (2002, p. 460) describe customer knowledge management as a process in which organisations seek to â€Å"know what their customers know” and de? ne it as: . . . the strategical process by which cutting-edge companies emancipate their customers from inactive recipients of products and services, to em abilityment as knowledge partners. CKM is about gaini ng, sharing, and expanding the knowledge residing in customers, to both customer and corporate bene?\r\nIt is and soly concerned with an understanding of how to elicit and leverage knowledge from customers. Their emphasis on interacting with customers and co-production, extending to co-learning, lifts the focus from collecting data and information in order to learn about customers to learn with customers. They discuss ? ve diametric styles of customer knowledge management, including â€Å"prosumerism” where the customer acts as co-producer, and â€Å"communities of creation” in which groups of flock work together, have sh atomic number 18d interests, and want to together with create and share knowledge.\r\nThe focus of co-production research is a good deal on product innovation and new product development, with about contri butions relating to service development (Matthing et al. , 2004). However, Prahalad and Ramaswamy (2003), suggest a future in which the locu s of innovation and co-production will shift from products and services to â€Å"experience environments”. This suggestion aligns with other proposals that the â€Å"experience marketing” era is on the horizon, and that it is becoming increasely weighty for businesses to respond to the needs of the experience consumer (Li and Wei, 2004).\r\nCo-creation may take place in the context of customer communities. There is a gigantic literature on customer clubs (Butscher, 2002; Gustafsson et al. , 2004; Stauss et al. , 2001) and obedience schemes (Bolton et al. , 2000; Mauri, 2003; Passingham, 1998; Worthington, 2000). Only a small sub-group of much(prenominal) clubs and schemes can properly be exposit as customer communities, however, which should at the truly least exhibit C2C interaction. To convincingly on the noseify the use of â€Å"community” they should furthermore share a socialisation with norms, values and individualism, and mutual interests and obj ectives.\r\nFan clubs, interest clubs, and package user groups may constitute customer communities. Butscher (2002) identi? es the Kawasaki Riders Club, The Volkswagen Club, and Swatch The Club as examples which might be described as customer communities. On the other hand, verity schemes much(prenominal) as Tesco Clubcard, American Express, Airmiles, and Marriot Rewards are focussed on the B2C dimension of relationship marketing, and do little to cultivate or in? uence C2C interactions. Therefore, whilst they may be able to identify a relatively durable group of users, they have not created a community.\r\n champion context in which there has been more discussion of customer communities is the practical(prenominal) environment (Armstrong and Hagel, 1996). Some loyalty schemes use this channel to control C2C interaction. Virtual customer communities enable organizations to establish distributed innovation models that involve alter customer roles in new product development (N ambisan, 2002; Pitta and Fowler, 2005). Nambisan (2002) suggests that the objective of practical(prenominal)(prenominal) customer environments needs to consider interaction patterns, knowledge creation, customer motivation, and integration of the virtual customer community with the new product development team.\r\nDholakia et al. (2004) explore the impact of group norms and social identity on participation in consumer communities. The wider literature on virtual communities and their role in learning and knowledge creation is in addition substantial, and may have perspectives to flip on the role of virtual communities in innovation (Hall and Graham, 2004; Davenport and Hall, 2002; Wenger, 2000). In conclusion, the themes of co-creation and customer communities have been identi? ed as important in the literature, but there carcass a scope for considerable further work, speci? cally relating to: . co-creation of experiences;\r\n guest communities that exist in both physical and v irtual musculus quadriceps femoris; and . the mechanisms and processes through which organizations can engage customer communities, as opposed to individual sections of those communities, in co-creation. methodological analysis Case studies are a valuable way of looking at the world around us, and intercommunicate how or why questions (Yin, 1994). The case study design adopted in this paper may be described as a holistic single case design.\r\nTypically, single case designs are countenance when the exercise has something special to reveal that might act as a point of departure for challenging received wisdom, prior theoretical perspectives and untested assumptions. A specialist in sporting increase technology was chosen as the basis for the case analysis in this paper for four reasons in particular, as follows: (1) The stated mission of Flexifoil worldwide is to: â€Å"provide our customers with the net Kitesports experience” (www.? exifoil. com/company). (2) Flexifoi l has been consistently committed to product innovation.\r\n(3) Flexifoil works with customers and proactively builds customer communities to support customer engagement in co-creation of the kiting experience. (4) The active and bulky participation of one of the authors in the kiting community formed the basis for an in-depth understanding of the community building and co-creation processes observed. Company pro? le: Flexifoil world-wide Through product innovation, the company seeks to design and develop the highest performance products, with new designs and products that support new kite-based guest community and co-creation 139 MIP.\r\n25,2 sporting experiences and dismantlets. Flexifoil build both their stimulate customer community and the kite boarding community in general through customer service, dispersal networks, sponsorship and publicity of the sports for which their products are use. They provide opportunities for the kite sporting community to interact, online and in other ways. Their community is and then built through B2B, C2B and C2C relationships and channels.\r\n140 professionalduct development Until the early 1970s, a kite had for hundreds of years been a piece of fabric controlled with one or two lines, designed to be hand-? aver in irksome conditions. What is now Flexifoil International started when two English university students in effect â€Å"invented” the two-line power kite by producing the ? rst to be exchange commercially.\r\nTwo larger kites with the evocative names â€Å"Pro Team 8” and â€Å"Super 10” open up Flexifoil’s market position, and enabled the company to enter upon a period of innovation and experimentation that explored a take to the woods of a function of different potential applications for power kites. Some of their innovations were successful, others less so, such as three-wheeled buggies designed to be pulled by a power kite or traction kite.\r\nThe successful development s in materials and design technology by Flexifoil and its followers allowed this basic product to support today such diverse activities as kite boarding (water-based), snow kiting, kite land boarding, buggying, amateurish power kiting, and sportkiting (â€Å"traditional” kiting). The company’s ingest product range now comprises: power kites, deflectional kites, traction kites, and water re- raiseable kites; buggies and boards; lines and control gear; and multifarious accessories such as turn.\r\nFollowing the launch of a entanglement site, with associated forums in which enthusiasts could meet and exchange ideas, Flexifoil’s sales increased by around 25 per cent each(prenominal) year between 1999 and 2004. Innovation continued, with the development of water-based kiting or kitesur? ng, and later kites for land boarding and snow kiting. Over the last thirty years, the company had thus effectively created a market, and maintained lead in its particular nic he, by means not only of product innovation but overly engagement with and cultivation of a power-boarding community. confederacy development Distribution.\r\nThe community development process begins with the company’s scattering network of authorised retail matters. Initially, those were mainly windsur? ng and sur? ng shops, but more recently specialised kiting shops have entered the market. Signi? cantly for Flexifoil, some of those have developed into â€Å"kitesports centres” where customers can â€Å"? y before they pervert”. At three Premier Kite Sports Centres, the most comprehensive Flexifoil range is usable for trial in an environment characterised by knowledgeable staff and extensive facilities in a good location; natural process grooming is also on offer.\r\nA small range of Flexifoil kites is sold through high road shops. The company also moves the product to market through training schools, academies and university kite clubs, to whom equi pment is available at discounted evaluate or even free of charge if the outlet becomes an of? cial Flexifoil training centre. In addition to these bricks-and-mortar outlets, the company transacts a signi? cant proportion of its retail sales through internet distributors.\r\nIt also sells spare parts, branded clothing and a selection of promotional merchandise via Flexifoildirect. com, but restricts distribution of core products to distributors who can offer a full after-sales service. The objective of the company’s distribution strategy is to build, support and maintain an effective customer community. Promotion and marketing communication. The main platform of Flexifoil’s promotional programmeme is to communicate their allegiance to after-sales support, and their breathing in to maintain good relationships with both customers and dealer outlets.\r\nThis strategy, in turn, generates positive word-of-mouth communication, and ofttimes act as a channel for customer fee dback that can inform future product innovation and development. In search of that objective, Flexifoil make extensive use of specialised advertise media, including every kite magazine in circulation, often running double-page spreads. A branded display stand for Flexifoil product catalogues is distributed to every dealer. To keep the brand at the centre of the kitesporting world, the company sponsors a team of kite boarders who compete around the world.\r\nThe promotional ruffle thus embraces advertising, publicity, sales promotion and point-of-sale. Flexifoil furthermore use their wind vane site and its forums proactively to develop the UK kiting community, especially pre-launch. Previews of new kites affront discussion in the forums, and a level of interest that builds up over months of anticipation and typically generates high sales volumes immediately on the release of the product. This online communication channel brings customers together to exchange experiences, and sel l equipment to each other.\r\nThe company lays claim to the largest online kiting community, of nearly 7,000 members. The variety of forums available to its members specialise in the full range of sportkiting activities. The tripping aim of the marketing communications strategy is, deal the distribution strategy, to create a community of interest rather than one based simply on transaction. Discussion This discussion will draw out two themes from the case study analysis: co-creation, and customer communities. The study tallys a perspective on the co-creation of experiences, which is a central element in the emerging paradigm of experience marketing.\r\nBy continuing engagement with their customer community, the subject company has been able not only to gather feedback on the experiences associated with the use of its products, but also to add to them by offering opportunities, in both the satisfying and virtual environments for customer to enjoy interactions with others who shar e their interests. It monitors and enhances the experience through the same channels. Whilst product innovation is stepwise, the dialogue and interaction with customers on which that innovation is based is continuous.\r\nThis is not â€Å"co-production” in the sense that the term is used in new product development contexts, but rather in the service context, where the term refers to the fact that customers have a hand in the development of their own service experience. Nevertheless, experience â€Å"co-creation” in this case, embeds product innovation. The impact of this approach to co-creation is dif? cult to disentangle from the impact of other business and marketing actions.\r\nThe signi? cant increase in sales in the years since the launch of the network site could be taken as one indicator, but it Customer community and co-creation 141 MIP 25,2 142 is important to acknowledge the spiral nature of the community creation process. This increase in sales will have exp anded the community, and probably also have intensi? ed customers’ engagement with the experiences that community members co-create with the company.\r\nThe case also contributes some insights on the nature of customer communities. though the company does ask customers to register their product and thereby collects personal contact details, it does not operate a customer community, club or loyalty scheme.\r\nRather, the innovative and raise products act as a catalyst for community creation through the medium of the â€Å"experiences” they deliver. The customer community comprises those who have participated in those experiences, enjoyed them, and wish to develop the interaction. Customers work in partnership with the company to build fervor and develop skill, and by sharing the experiences with others, add to the totality of the customer community. The company has taken a add of actions to facilitate this process, including working with distributors, sponsorship, e ngagement in events, training courses, and an interactive web site.\r\nSpeci? cally, their approach to communication with their customers is sophisticated. The reciprocal view of marketing communications as a one-way transmission is replaced by a marketing communications strategy designed to build and strengthen the company’s position as a leader of a community. Traditional channels such as advertising, sponsorship, and even brand building are only elements in a complex web or network of marketing communications activities, involving C2C and B2B as well as B2C relationships.\r\nThe company communicates directly with its customers, but also provides contexts which encourage them to â€Å"talk” among themselves. In addition, the marketing communications effort is â€Å"pushed” through distributors, not just in terms of the traditional advertising and branding, but also through the selection of distributors that can offer appropriate support and advice. These act ors in the system have a role in welcoming new members into the community. They are supported in doing so by the existing on-line community, and various company-sponsored events at which members are encouraged to gather.\r\nThe customer community has built bit by bit as the business has grown. As new products have been added to the product range to support new sports, new sub-communities have formed around them. The process of community development goes hand in hand with product development. Conclusions and recommendations The entrepreneurs behind Flexifoil International have simultaneously created a sport, and an associated sporting community. The company is clear that its mission as not simply to develop and distribute the opera hat products but rather to deliver the most fire kiting experience.\r\nThis case study has demonstrates that the entire marketing mix is focussed not on transactions, or even relationship building, but rather on community creation. That community includ es both consumers and dealers. Product innovation, distribution and promotion are tightly coupled with community creation. Community building is not just about increasing membership, or even about the engagement of members with the community, but focuses on the creation of a level of mutualness in which there is ongoing dialogue between community members and the company.\r\nFlexifoil has neither annexed an existing community, nor do they â€Å"own” one, although they do manage a virtual space through which the community can interact. Rather, their product innovation and the experiences that their product range provides have the potential to act as the catalyst for the community, whilst sponsorship, engagement in events, and the virtual space all facilitate the enhancement of the experience for community members. Other companies compete with Flexifoil for leadership of the power kiting community, both rival manufacturers and others keen to enhance the sportkiting experience.\r \nMany of these have web sites through which they seek to baffle an online community. For example, one casts itself as â€Å"the kite ? yer’s entrance to the internet” offering links to kite manufacturers and kite stores in the USA and Canada, to other power kiting web sites, to other kite ? yer sites, kite teams and clubs, and to magazines and newsgroups. Another claims to be â€Å"the online community that brings ? yers together” and a third promotes itself as â€Å"the internet magazine for kiters”.\r\nAll offer different services and bene? ts to their customers, but for some, their engagement with the sport kiting community will be restricted to virtual space. Though Flexifoil has a strong brand presence as a manufacturer, it needs to encourage members to participate with it in â€Å"co-creation” if it is to deliver on its mission of providing customers with the ultimate kite sports experience. The approach to marketing strategy described in this case study can aptly be described as customer community leadership.\r\nBy leading the sport kiting community, but not owning it, Flexifoil has created a community that will buy their products, co-create kiting experiences, provide insights that can inform innovation in the product, the experience and the community innovation, look forward to the next product release, and mutually enhance community members’ experiences of the company’s products and services. introduce in this approach to community leadership are a number of more traditional marketing actions, such as new product development, advertising, and commitment to after-sales support.\r\nThe distribution channels are designed to offer the support and training that is likely to enhance sport kiting experiences, but also to build relationships with dealers, and to bring sports kiters together. This is supplemented by opportunities for interaction in virtual space. Community development is achieved through a network of relationship-building actions, at the plaza of which are enjoyable and shareable sports kiting experiences. Through community leadership, the company has created a context in which customers are thus from being passive recipients of products and services, and empowered as knowledge partners (Gibbert et al., 2002).\r\nIn other words, it has thereby created a context that facilitates the processes of customer knowledge management. This is an approach to marketing intelligence and decision making embedded in dynamic co-creation processes that involve customers as partners. It is worth noting that the term â€Å"customer community leadership” can have two different meanings in practice. First, it may mean leadership of a community, in the sense of making it work, setting its direction, and participating in the shaping of experiences of community members.\r\nIn this context, the focus is on factors such as member engagement, culture, norms, identity and community viabi lity, in terms of the value delivered to all parties. Second, it can describe an avenue to market leadership, in which the business performance of an organisation over the longer term is de? ned and determined by the expiration to which its leadership of a community of potential customers, or its power and capacity to lead, is greater than that of its competitors. Customer community and co-creation 143 MIP 25,2 144\r\nIn taking the development of the concept of customer community leadership forward, it will be important to explore the different styles and approaches that are and can be adopted by different ? rms and organizations. minded(p) that another essential of successful leadership is followers, an important phenomenon for further study is the nature of â€Å"followership” in this context. This case study has focussed on the actions and strategies adopted by one business to build and bene? t from a customer community and to engage customers in the co-creation of an ex perience.\r\nIn addition, it has demonstrated how both online and real-world communities can be enlisted to contribute to building the experience. There is a scope for considerable further study of the processes associated with the co-creation of the experience, and the details of how communities operate. Such research needs both to cover a wider range of organizations and business sectors, and to examine in more detail aspects of communities, co-creation and customer knowledge management. Some potential areas of probe are: .\r\nPerceptions and views of different stakeholders as to the impact of the community and the contributions of different parties in the co-creation of the experience. . The pro? le of such customer communities in terms of loyalty, retention and customer lifetime value, including comparisons between online and real-world communities. . Community processes, including models of key processes of in? uence, knowledge and learning, identi? cation and role of â€Å" node” members, and the role of credit voices and endorsement. . The marketing actions that contribute to the cultivation of effective co-creation communities.\r\nReferences Armstrong, A. G. and Hagel, J. (1996), â€Å"The real value of online communities”, Harvard Business polish, Vol. 74, pp. 134-40. 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