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Topic Seven – Demand Chain Management
Introduction
- Organization network is made up of:
a)
Upstream (suppliers)
b)
Downstream (customers)
- DCM focuses on the following:
a)
keeping existing customers
b)
getting new customers
c)
predicting demand
The Customer As The Focus
Defining Customer Relationship Management
DCM nor CRM are new concepts, they are as old as commerce itself. They
are important now because:
a)
we can increase sales by cross-selling and up-selling
b)
we realize that the cost of selling to existing customers is cheaper
than selling to new customers
- We can leverage this now with the use of technology and managing
customer information.
- CRM focuses on discrete customer segments to help differentiate offers,
price, marketing, etc….
- This information assists in targeting customers very efficiently
- CRM takes place in the form of fax, email, phone, etc..
The Practice of CRM
Customer life cycle is central to CRM:
a)
acquisition
b)
enhancement
c)
retention (built on customer loyalty, introduce barriers to exit)
CRM – Precursor to DCM
CRM has resulted in poor improvement because of:
a)
lack of an integrated strategy involved
b)
competitive pressure has resulted in poor implementation, application
choices and other mistakes
c)
Poor implementations which is the main reason
So CRM has not delivered and been successful.
Demand Chain Management
- DCM encompasses all business aspects of customers (internal and external)
- DCM goes beyond capturing customer information.
The elements of a DCM in e-business model:
a)
presenting a single face to the customer (co-ordinated manner)
b)
customer self-service (24/7 assistance)
c)
order management (efficiencies in inventory management, patterns)
d)
data warehouse (information about customers)
e)
business intelligence (intelligence about market, customers, business)
f)
new product development (understand customer needs – fulfill)
g)
new marketing communication media (new channel to market)
h)
customized pricing (can tailor price for specific customers)
i)
channel management (efficiency in customer communication and new
ways of doing this)
Integration Issues In DCM
- must work on integrating the different elements of DCM together such as:
a)
managing the changes in technology
b)
investing in employees
c)
managing the change in business culture
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