WHo is able to complete this discussion?

Keegan, W. J., & Green, M. C. (2020). Global marketing (10th ed.). Retrieved from https://www.vitalsource.com

Textbook Chapter 6

Unlike the public Internet, an intranet is a private network that allows authorized company personnel or outsiders to share information electronically in a secure fashion without generating mountains of paper. Intranets, in conjunction with a state-of-the-art IT system, can serve as a 24-hour nerve center. Through their use, Amazon, FedEx, Google, Netflix, Spotify, Walmart, and other companies can operate as real-time enterprises (RTEs). The RTE model is growing in popularity as more executives and managers realize leveraging big data via advanced analytics can be a source of competitive advantage.

An electronic data interchange (EDI) system allows a company’s business units to submit orders, issue invoices, and conduct business electronically with other company units as well as with outside companies. One of the key features of EDI is that its transaction formats are universal, which enables computer systems at different companies to “speak the same language.” Walmart is legendary for its sophisticated EDI system. For years, vendors had received orders from the giant retailer on personal computers using dial-up modems connected to third-party transmission networks. In 2002, Walmart informed vendors that it was switching to an Internet-based EDI system. The switch has saved both time and money; the modem-based system was susceptible to transmission interruptions, and the cost was between $0.10 and $0.20 per thousand characters transmitted. Any vendor that now wishes to do business with Walmart must purchase and install the necessary computer software.5

Poor operating results can often be traced to insufficient data and information about events both inside and outside a company. For example, when a new management team took over the U.S. unit of Adidas AG, the German athletic shoemaker, the team discovered that data were not available on normal inventory turnover rates. A new reporting system revealed that archrivals Reebok and Nike turned their inventories five times a year, compared with only twice a year at Adidas. This information was used to tighten the company’s marketing focus on the best-selling Adidas products. In Japan, 7-Eleven’s computerized distribution system provides it with a competitive advantage in the convenience store industry. Every 7-Eleven store is linked with every other store and with distribution centers. As one retail analyst noted:

With the system they have established, whatever time you go, the shelves are never empty. If people come in at 4 A.M. and the stores don’t have what they want, that will have a big impact on what people think of the store.6

Globalization puts increased pressure on companies to achieve as many economies as possible. Toward this end, IT provides a number of helpful tools. As noted previously, EDI links with vendors enable retailers to improve inventory management and restock hot-selling products in a timely, cost-effective manner. In addition to EDI, retailers are increasingly using a technique known as efficient consumer response (ECR) in an effort to work more closely with vendors on stock replenishment. ECR can be defined as a joint initiative of members of a supply chain working together to improve and optimize aspects of the supply chain to benefit customers. ECR systems utilize electronic point of sale (EPOS) data gathered by checkout scanners to help retailers identify product sales patterns and determine how consumer preferences vary with geography. Although currently more popular in the United States, the ECR system is gaining traction in Europe. Companies such as Carrefour, Metro, Coca-Cola, and Henkel have all embraced ECR. Supply-chain innovations such as radio frequency identification tags (RFID) are likely to provide increased momentum for the use of ECR.

EPOS, ECR, and other IT tools are also helping businesses improve their ability to target consumers and increase loyalty. The trend among retailers is to develop customer-focused strategies that will personalize and differentiate the business. In addition to point-of-sale (POS) scanner data, loyalty programs such as Tesco’s Clubcard, which use electronic smartcards, provide retailers with important information about shopping habits. Customer relationship management (CRM) is an important business tool that helps companies leverage the data they collect through such systems.

Although industry experts offer varying descriptions and definitions of CRM, the prevailing view is that CRM is a philosophy that values two-way communication between the company and the customer. Every point of contact (“touchpoint” in CRM-speak) that a company has with a consumer or business customer—via a Web site, a warranty card, a sweepstakes entry, a payment on a credit card account, or an inquiry to a call center—offers an opportunity to collect data. Likewise, every time a Spotify user clicks “play,” a data point is generated. CRM tools allow companies to determine which customers are most valuable and to react in a timely manner with customized product and service offerings that closely match customer needs. If implemented correctly, CRM can make employees more productive and enhance corporate profitability; it also benefits customers by providing value-added products and services.

A company’s use of CRM can manifest itself in various ways. In the hotel industry, for example, CRM can take the form of front-desk staff who monitor, respond to, and anticipate the needs of repeat customers. A visitor to Amazon.com who buys the latest Taylor Swift CD encounters CRM when he or she gets the message “Frequently Bought with the Item You Added: Ed Sheeran’s X and Sam Smith’s In the Lonely Hour.” CRM can also be based on the click path that a Web site visitor follows. In this case, however, Internet users may be unaware that a company is tracking their behaviors and interests.

One challenge of using CRM is integrating data into a complete picture of the customer and his or her relationship to the company and its products or services—a perspective sometimes referred to as a “360-degree view of the customer.” This challenge is compounded for global marketers. Their subsidiaries in different parts of the world may use different customer data formats, and commercial CRM products may not support all the target languages. In view of such issues, industry experts recommend implementing global CRM programs in phases.

The first phase could focus on a specific task such as sales force automation (SFA); this term refers to a software system that automates routine aspects of sales and marketing functions such as lead assignment, contact follow-up, and opportunity reporting. While Salesforce.com is a key player in this space, Microsoft Dynamics CRM and Oracle Siebel CRM on Demand are among the other vendors offering SFA. An SFA system can also analyze the cost of sales and the effectiveness of marketing campaigns. Some SFA software can assist with quote preparation and management of other aspects of a sales campaign, such as mass mailings and conference or convention attendee follow-up.

For example, an important first step in implementing a CRM system could be to utilize SFA software from a company such as Oracle. The objective at this stage of the CRM effort would be to provide sales representatives in all country locations with access via an Internet portal to sales activities throughout the organization. To simplify the implementation, the company could require that all sales activities be recorded in English. Subsequently, marketing, customer service, and other functions could be added to the system.7

Privacy issues related to data collection and use vary widely from country to country. In the EU, for example, a Directive on Data Collection has been in effect since 1998. Companies that use CRM to collect data about individual consumers must satisfy the regulations in each of the EU’s 28 member countries. There are also restrictions about sharing such information across national borders. In 2000, the U.S. Department of Commerce and the EU concluded a Safe Harbor agreement that established principles for privacy protection for companies that wish to transfer data to the United States from Europe.