Economics of Customer Relationship
From the past years to the present year the shift of the marketers have shifted towards the customers. In the earlier years the market was product centric, then it transformed into segment centric and now it has become customer centric. Mostly the companies are focusing on customer satisfaction, focusing on their needs. Companies want more and more interaction with the present and future customers and so that they can fulfill their needs. In this section, we have listed the different types of marketing, with the economics of customer relationship and different costing methods.
Marketing Approaches
- Product centric marketing: In this type of marketing the main focus was on the production capacity of the company, the differentiation of the product and the capability of the sales force. The main marketing concepts that emerged during this phase were identifying the unique selling point and building the brand image of the company.
Building a Relation
- Segment centric Marketing: In this there was emerging trends in the marketing activities and more focus on the markets and this lead to the segmentation of the market which then suggested a more precise placement of the products and marketing activities with respect to the requirements of the consumers. The change from product to market centric marketing bought about many changes. The companies now tried to gain competitive advantage through segmentation and positioning. This method explained that how did the customers perceive a brand in their minds.
- Customer centric Marketing: In this phase the customer is at the center of all the activities. The firms engage and put most of their efforts in satisfying and understanding the needs and wants of the individual customer rather than focusing on the mass market segment. Customer-centric marketers determine whether to create an offering that customizes the product and/or some other elements of the marketing mix or standardize the offering. The objective is to maximize marketing productivity, which encompasses both efficiency and effectiveness.
In those organizations which follow customer centric marketing, The customer is visible inside many activities like:
Increasing Customer Centric Marketing
- In all management processes
- The main priority is customer management
- Customer centric performance becomes the source of appraisal for every employee in the organization
- Customer feedback is reviewed by the top management
Activity Based Costing Method
This method is used for calculating the overhead and the operating expenses which are connected to the costs of the customers, services, products as well as orders. It helps the manger to look at which product ,service or the customer is important or are losing money of the organization.
Difference Between Traditional costing and Activity based costing
The traditional costing method allocates the cost to the products on the basis of the attributes of the single unit and changes according to the number of volume of the units produced, whereas ABC costing method is concerned with the activity required to produce the product or service based on the consumption.
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