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Customer perspective in network business

Rozhkov Alexander, SU-HSE

09/02/09

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Research project description

Research questions

• Customer Relationship Management (CRM) in B2B (Business to Business) networks: theoretical presentation

• Development of customer relationship model B2B (Business to Business) networks:

– Relationship management

– Communication system

– Customer attraction and retention techniques

– Network coordination

• Customer perspective in Russian business culture: inner and outer customer relationship in company network

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External factors (as reported)

Global factors

• Russia is more exposed to crisis processes than Finland

• Construction industry is in recession

• Companies become more oriented on profit than long term relationship

• Number of customers and suppliers is decreasing dramatically

• Customer market power is increasing because of decreasing demand

Market organization

• Russian market is much more dynamic than Finnish

• Competition is much more intensive

• Legislation and certification

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CRM model: Relationship management

Customer relation building process

Main success factors are interpersonal relations and communication

Russian sales staff – as one of the most important instruments of adaptation

Initial contactRepeating

transactionsInitial

transaction

Legal agreement !

Grey scheme in supply !

Loyal Customer(partner)

Legislation and certification

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CRM model: Relationship management (2)

Main goals in customer relations

- Increase in sales volume

- Loyalty (build up by credit lines, interpersonal relations and contract terms fulfillment)

- No negative feedback

- Private label development (for individual customers)

Problem solving

- Information support on all delays

- Additional discounts

- Fees and penalties according the agreement

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CRM model: customer indicators

Initial contact

- No particular criteria, all customers are good in crisis period

- Company size (?)

Repeating transactions

- Operation profit

- Contract terms fulfillment

- Sales volume growth

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Intermediate Results

Areas of uncertainty

Russian partners and their customer base. (accessibility)

Business culture aspects in Russia == Value chain modification

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Relevant Literature

Intercompany relations

Cannon, Joseph P. and William D. Perreault Jr. 1999. “Buyer-Seller Relationships in Business Markets.” Journal of Marketing Research 36 (November): 439-460.

K. Möller , A. Rajala “Rise of strategic nets — New modes of value creation” Industrial Marketing Management 36 (2007) 895–908

Methodology

Mahmood M. Hajjat Customer orientation: construction and validation of the CUSTOR scale. Marketing Intelligence & Planning 20/7 [2002] 428-441

Saxe, R. and Weitz, B.A. (1982), “The SOCO scale: a measure of the customer orientation of salespeople”, Journal of Marketing Research, Vol. 19, August, pp. 343-51.

Eisenhardt K. Building theories from case study research. Academic Management Review 1989;14(4):532 –50.

Market orientation (network level)

Kohli, Ajay K. and Bernard J. Jaworski. 1990. “Market Orientation: The Construct, Research Propositions, and Managerial Implications.” Journal of Marketing 54 (2): 1-18.

H. Terho, A. Halinen “Customer portfolio analysis practices in different exchange contexts/ Journal of Business Research 60 (2007) 720–730

U. Elg Inter-firm Market Orientation: Its Significance and Antecedents in Distribution Networks / Journal of Marketing Management, 2002,18, 633-655

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Thank You for your attention!