Market Orientation, Customer Relationship Management (CRM) Implementation Intensity, and CRM Performance: A Structural Model

Market Orientation, Customer Relationship Management (CRM) Implementation Intensity, and CRM Performance: A Structural Model

Bryan Soh Yuen Liew (M Niche Online Solution, Malaysia), T. Ramayah (Universiti Sains Malaysia, Malaysia) and Jasmine A. L. Yeap (Universiti Sains Malaysia, Malaysia)
Copyright: © 2015 |Pages: 24
DOI: 10.4018/978-1-4666-6547-7.ch007
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Abstract

The Web hosting industry is characterized by the rapid growth of information technology trends as well as constantly growing competition. Market orientation and Customer Relationship Management (CRM) are thought of as key solutions to this predicament. Thus, the purpose of this study was to test the effect of market orientation on CRM implementation intensity and subsequently the effect of CRM implementation intensity on CRM performance. Data was collected via online questionnaires from 81 online Web hosting companies around the world and analyzed using Partial Least Squares structural equation modeling technique. The results indicated that market orientation had a significant positive impact on CRM implementation intensity and CRM implementation intensity had a direct positive influence on CRM performance. A test of mediation also confirmed that CRM implementation intensity mediated the relationship between market orientation and CRM performance. Implications of these findings are further explored.
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Customer Relationship Management (Crm)

The premise underlying CRM is integrating people, processes, and technology throughout the value chain to understand and deliver customer value better (Kim, Choi, Qualls, & Park, 2004). CRM includes all the tools, technologies and procedures to manage, improve or facilitate sales, support and related interactions with customers, prospects and business partners throughout the enterprise (Davenport, Harris, & Kohli, 2001). Divergent views exist regarding the nature of CRM (Zablah, Bellenger, & Johnston, 2004). Apart from being deemed as a business philosophy (Hasan, 2003), some perceive it to be a specialized collection of technological tools (Shoemaker, 2001) while others suggest it is actually a process that focuses on managing customer relationships (Srivastava, Shervani, & Fahey, 1999). On the other hand, there are those who propose that CRM is best interpreted as a kind of strategy for customer retention (Verhoef & Donkers, 2001). Despite such differing perspectives, all the conceptualizations focus on building and managing long-term relationships with customers. All in all, Bennett (1996) listed that key elements of CRM should include continuous interaction with customers, use of knowledge about customers to better satisfy them, delivering customer value and mutual benefit and commitment.

Key Terms in this Chapter

Market Orientation: An organizational approach or philosophy that focuses on identifying and meeting the stated or hidden needs of customers.

CRM Performance: The amount of improvement achieved in customer relationship strength and sales effectiveness after implementing CRM technology.

CRM Implementation Intensity: The extent to which the CRM technological tool or application (e.g., software) is being applied and utilized to gather and manage customer information.

Sales Effectiveness: The amount of improvement achieved in sales volume, profits, number of customers and customer repurchase rates after implementing CRM technology.

Customer Relationship Strength: The amount of improvement achieved in customer satisfaction, customer relationship quality and loyalty after implementing CRM technology.

Web hosting: The business of providing storage, connectivity and services necessary to serve files for a website.

Customer Relationship Management (CRM): All tools, technologies and procedures to manage, improve or facilitate sales, support and related interactions with customers as well as prospects towards the aim of understanding and delivering better customer value.

Customer Information Management: The level of effort exerted into the acquisition, maintenance, and updating of customer demographics, product possession and life-cycle information.

Customer Information Utilization: The level of effort exerted into the application of customer information in marketing activities to strengthen the customer relationship.

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