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Customer relationship oriented

Customer relationship oriented
Customer relationship oriented

Customer relationship oriented marketing practices in SMEs

Helen Reijonen and Tommi Laukkanen

Economics and Business Administration,University of Joensuu,Joensuu,Finland

Abstract

Purpose –The purpose of this paper is to examine to what extent small to medium-sized enterprises (SMEs)gather customer information and act on it keeping in mind the pro?tability of the business operations.A customer relationship oriented marketing process is suggested.This process includes customer information gathering,customer segmentation,creating value by differentiation and managing customer pro?tability.Special attention is paid to whether industry,size and customer markets affect the extent to which these tasks are performed.

Design/methodology/approach –The data were collected mainly through an online questionnaire from SMEs in three industries operating in North Karelia,Finland.Principal component analysis was used and,thereafter,the variables loaded on each of the factors were combined to composite measures.These composite measures were used as dependent variables in the analysis of variance exploring the differences between the SMEs.

Findings –The results show great differences in the activity of different marketing tasks,e.g.following how the customer relationships develop and pursuing pro?table customers are performed often,whereas such tasks as segmentation and differentiation in terms of marketing communication are carried out less frequently.Based on the results,it can be argued that customer relationship oriented marketing practices differ between SMEs.The SMEs that are micro-sized,operated in the industry of other personal services and in consumer markets seemed to put less effort on marketing practices than did the other studied enterprises.Practical implications –It is shown in this paper that marketing activities frequently do not get enough attention especially in the smallest SMEs.In these enterprises,the role of the owner-manager is signi?cant and consequently more attention should be paid to enhancing their marketing capabilities.Originality/value –The paper offers deeper insight into the little researched area of SME marketing and,especially,into the differences in marketing practices within SMEs.

Keywords Small to medium-sized enterprises,Marketing strategy,Customer relations,Customer orientation,Finland Paper type Research paper

Introduction

Marketing in the small ?rm context has not been extensively researched.Studies conducted in this area have,however,shown that marketing forms one of the biggest problems that small business owners face in their operations and,at the same time,one of the most important business activities that is essential for the survival and growth of the small enterprises (Simpson and Taylor,2002).

Researchers of small ?rm marketing widely agree that marketing in small enterprises differs from that in large ?rms (Fillis,2002;Gilmore et al.,2001;Hill,2001;Coviello et al.,2000).Small ?rm marketing has been characterised as haphazard,informal,loose,unstructured,spontaneous,reactive,built upon as well as conforming to industry norms (Gilmore et al.,2001).Stokes (2000)adds that in small enterprises,marketing is used for the needs of the moment and only little attention is paid to plans,strategies and analysis.This is in contrast to marketing in large ?rms which is seen as formal,planned and well structured.

The current issue and full text archive of this journal is available at https://www.wendangku.net/doc/079883511.html,/0263-4503.htm

Marketing practices in SMEs

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Received November 2008

Revised April 2009,

May 2009

Accepted May 2009

Marketing Intelligence &Planning

Vol.28No.2,2010

pp.115-136

q Emerald Group Publishing Limited

0263-4503

DOI 10.1108/02634501011029646

One reason for the difference between marketing in large and small enterprises is that the small ones have certain limitations,such as limited resources related,e.g.to ?nance,time,marketing knowledge and expertise that usually comes with bigger personnel in larger ?rms (Gilmore et al.,2001).Thus,complex theories and sophisticated processes seem to be inappropriate in small enterprises (Hogarth-Scott et al.,1996).In addition,it is argued that owner-managers of small ?rms tend to view the role and potential of marketing from a narrow operative perspective that is close to sales management (Mo

¨ller and Anttila,1987).Despite the differences,it has been noted that the basic marketing concepts,such as segmentation,customer orientation,targeting,positioning and seeking for competitive advantage apply to small as well as to large enterprises (Hogarth-Scott et al.,1996).

Marketing thought and practices have to some extent been compared between large organisations and small to medium-sized enterprises (SMEs).Much less attention,however,has been paid to examining the possible differences within SMEs.They can by no means be considered as a homogenous group.In the EU’s de?nition of SMEs they are further categorised to micro (headcount ,10),small (headcount ,50)and medium sized (headcount ,250)enterprises.It is most interesting to look more carefully if marketing practices differ according to this categorisation.Based on the possible differences more targeted guidelines to enhance marketing efforts in different SMEs could be offered and,thus,support their performance in the markets.

In this study,we examine if the characteristics of the SME –industry,size and customer markets –affect the extent to which it gathers customer information and acts on it keeping in mind the pro?tability of business operations.These characteristics were chosen because prior research has shown that there are differences in customer relationship creation and management between service and manufacturing industries and between business-to-business and business-to-customer markets.Services are seen as more naturally customer relationship oriented because the interaction involved in service encounters creates a favourable setting to develop customer relationships (Gro

¨nroos,1995).In addition,although some researchers have found overall marketing practices to be quite similar in consumer and business-to-business ?rms (Coviello and Brodie,2001),there are many who support the consumer market/business-to-business market dichotomy.For example,Gordon (1998)has argued that relationships formed and maintained in business and consumer markets differ due to several dimensions,such as the criteria and process of the decision-to-buy,reciprocity and cooperation.In addition,the term SME covers a variety of different sized enterprises:from sole proprietor managed businesses to those having 249employees and from businesses whose annual turnover could be stated in tens of thousands to those whose annual turnover is expressed in millions of euros.It could be assumed that the difference only in resources makes marketing practices different in these ?rms.

A customer relationship oriented marketing process is taken to be the basis for this study.This process includes customer information gathering,segmentation,creating value by differentiation and managing customer pro?tability.

Research framework

Customer information gathering

First,it is appropriate to discuss the three terms:data,information and knowledge.Davenport and Prusak (2000)state that it is a matter of degree how these terms differ

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from each other.According to them,data are a set of discrete,objective facts about events.This data are transformed into information when its creator adds meaning to it or it is organised for some https://www.wendangku.net/doc/079883511.html,rmation is a message that is meant to change the way the receiver of it perceives something–it in?uences his judgement and behaviour.It is then transformed into knowledge through comparison,consequences, connections or conversation.Knowledge is a mix of experience,values,contextual information and expert insight.It forms a framework for assessing and embodying new experiences and information.Customer data–that is transformed into customer information and,?nally,to customer knowledge–forms the basis of marketing decision making(Zahay and Peltier,2008).

Advancement in information technologies has enabled enterprises to collect more and in-depth information about their customers and also to make that information useful for their strategic business purposes(Park and Kim,2003).Information activities are considered to include a series of processes.Moorman(1995)identi?ed four organisational market information processes:information acquisition,information transmission,conceptual utilisation and instrumental utilisation.These processes are in accordance with the sets of activities in market orientation:generating, disseminating and responding to market intelligence(Jaworski and Kohli,1993).

There are several sources for obtaining customer information including information gathered from transactions and interactions with customers(Garcia-Murillo and Annabi,2002).The information obtained may be:

.of the customer;

.for the customer;and

.by the customer information(Park and Kim,2003).

Of-the-customer information(about)comprises personal and transaction data(e.g. sales volumes,pro?tability,frequency and preference);for-the-customer information is presented to the customers in order for them to make more informed decisions; by-the-customer information(from)includes,e.g.feedback information(Park and Kim, 2003;Salomann et al.,2005).

In the marketing literature,information or knowledge utilisation has often been conceptualised for instrumental,conceptual or symbolic use.Instrumental refers to direct use(e.g.solving a policy problem),conceptual to indirect use(e.g.general enlightenment)and symbolic to a somewhat distorted use of information or knowledge (e.g.misuse by taking the information out of its context or by oversimplifying it) (Menon and Varadarajan,1992;Moorman,1995).

Better and more effective use of information has been considered as focal for being more market-oriented(Menon and Varadarajan,1992).Information is also considered to play a key role in building and maintaining customer relationships(Jayachandran et al.,2005).Furthermore,the exploitation of marketing information is seen to lead to organisational learning and,?nally,to enhanced performance of the?rm(Low and Mohr,2001).

In the context of SMEs,the owner-manager usually plays an important role as a searcher and an assimilator of information(Lybaert,1998),but he/she does not necessarily recognise the need for information(Fuelhart and Glasmeier,2003).A limited range of products and customers is seen to minimise the requirements for formal procedures to gather and process customer information(Appiah-Adu and Singh,1998).Marketing practices in SMEs

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Thus,SMEs are often opportunistic in their information seeking behaviours and information is gathered from sources,such as trade journals,customers and members of the supply chain that can be assessed with little additional effort outside the scope of normal business activities (Fuelhart and Glasmeier,2003).

Customer segmentation

Segmentation is considered to be one of the cornerstones of marketing (Storbacka,1997;Jonker et al.,2004).It is a process in which a population of customers is divided into homogenous https://www.wendangku.net/doc/079883511.html,ually,this process is followed by the decision as to which segments seem to have the best ?t to the enterprise’s operations and offerings and,thus,to which segments it will target its marketing efforts.The ?nal goal is to increase the pro?tability of the enterprise (Storbacka,1997).

Traditionally,segmentation has been based on the geographic,demographic,psychographic and behavioural attributes of the customers.Nowadays,segmentation is usually based on transactional and behavioural data gathered from various information systems (Lee and Park,2005).In his study,Storbacka (1997)suggests that the distribution of pro?tability within the customer base should be the key attribute used in segmentation.Still,Lee and Park (2005)argue that this approach is underutilised in enterprises.

Shaw et al.(2001)regard customer pro?ling as one of the major areas of knowledge-based marketing.The information needed in the construction of customer pro?les include,e.g.frequency,size and recency of purchases.With the help of these pro?les typical customer groups or prospective customers can be identi?ed and subsequently marketers can decide on the right strategies and tactics to meet the needs of their customers by,for example providing customised products and services (Park and Kim,2003).Thus,segmentation is not a goal in itself,but a means to an end where an enterprise can offer differentiated marketing activities to the chosen segments (Jonker et al.,2004).

The theme of segmentation in the context of SMEs has not been very extensively researched.The results of a study by Hogarth-Scott et al.(1996)showed that segmentation was apparent only in few of the studied small business founders and it was based on price/quality/social group.In some of the businesses there was a desire to “please everyone”.In addition,there are studies that concentrate on segmentation with regard to the internationalisation of SMEs (Fischer and Reuber,2003).It has been suggested that most SMEs operating internationally seem to practice differentiated market segmentation (Merrilees and Tiessen,1999).

Creating value by differentiation

Grant (2002)states that value is created in two ways:by production (through physical transformation,e.g.from pulp to paper)and by commerce (through repositioning products and services in time and space).Value seems to have an effect on a consumer’s consumption behaviour (Sheth et al.,1991),pricing (Monroe,1990),pro?t making and other strategic decisions of the ?rm (Grant,2002).It is used to gain competitive advantage (Huber et al.,2001;Woodruff,1997)and to create loyalty,satisfaction (Lam et al.,2004)and repurchase behaviour (Petrick,2004).Therefore,value is a complex concept,which is greatly affected by individual and contextual aspects (Lapierre,1997).Value is an important means of gaining competitive

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advantage(Woodruff,1997;Huber et al.,2001).Thus,it is signi?cant for managers to understand what value is,how it is created and how it could be added.Added value is a complex concept,which includes customer perceived functional and emotional bene?ts relative to competition(de Chernatory et al.,2000).

From the customer’s perspective,the most important characteristic of value seems to be that it is based on an individual’s perceptions.Consequently,it is often referred to as perceived value(Monroe,1990;Wake?eld and Barnes,1996;Choi et al.,2004).Huber et al.(2001)states that customer value is a theoretical construct that tries to de?ne the customer’s perspective on a product or service.It is about subjective evaluation and ultimately an individual’s personal values determine,which outcomes are desirable and which are not.Even consumer’s cultural background may have an effect on value perceptions(Overby et al.,2004).As Holbrook(2005)states,customer value differs from one person to another.Thus,the term“customer value”could very well be used in the plural as“customer values”(Huber et al.,2001).As this is the case,enterprises should differentiate their offerings in order to be able to create value to their customers. It is not pro?table,however,to offer everybody everything and,therefore,enterprises should target those customer segments that seem to be most pro?table or otherwise best suited to their purposes.

As can be seen from the above discussion,in the marketing literature value is examined from two general perspectives:the one from that of the organisation(how an organisation can gain value from customers or offer them superior value)and the other from that of the customer(how a customer perceives value).In this study,the emphasis is on the organisation’s perspective.

A customer value delivery orientation requires that a?rm should?rst learn extensively about its markets and target customers(Woodruff,1997).This enables the enterprise to understand the needs and wants of the customers,to group suitable customer segments and,?nally to target the chosen segments appropriately. The active management of customer information is considered to be essential in being able to offer personalised communication and customised products(Zahay and Peltier, 2008)and through differentiation enterprises can provide their customers with value and a reason to stay and spend more with them(Wood,2005).Thus,this kind of differentiated relationship value has been regarded as a focal part of maintaining successful long-term relationships(Park and Kim,2003).

The niching strategy is a frequently advocated competitive strategy for SMEs(Lee et al.,1999).With regard to this strategy,small?rms with limited resources offer differentiated products to a narrow segment to avoid direct competition with their larger counterparts.Furthermore,it is argued that SMEs will bene?t by differentiating their offerings through product specialisation in the globalised markets(Knight,2000). However,the theme of adding value through differentiation in SMEs has been only little researched.

Managing customer pro?tability

Pro?tability can be regarded as the basis of any business operation.It is fundamental to the survival of a?rm and,therefore,emphasis should be placed on the assessment of customer pro?tability and to the attainment of pro?table customers.Lee and Park (2005)de?ne customer pro?tability as a customer-level measure that indicates the revenues less the costs that a customer generates over a period of time.Marketing practices in SMEs

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The underlying basic assumption behind the assessment of customer pro?tability is that pro?table customers improve the overall pro?tability of the ?rm.Customers are assets to the ?rm and they are one of the most important sources of revenues.It is even said that entrepreneurs can grow their business by getting and keeping customers so that the value of the customer base increases (Blattberg and Deighton,1996).Consequently,it is important to understand what the sources of value derived from the present customers are and how the revenues could be increased in order to improve the ?rm’s performance (Bolton et al.,2004).

Not all customers are pro?table.Gro

¨nroos (2000)states that usually more than 30per cent of the ?rm’s customers are unpro?table.Cooper and Kaplan (1991)suggest that only 20per cent of the customers generate 225per cent of the ?rm pro?ts.This emphasises the signi?cance of customer pro?tability assessment.It helps the enterprise to spot opportunities for targeted cost management and pro?t improvement programs (van Raaij et al.,2003).It can also indicate to managers how to allocate management effort more effectively and target high-potential customers more accurately (Bowman and Narayandas,2004).In other words customer pro?tability assessment can form a basis for customer segmentation (Storbacka,1997;Zeithaml et al.,2001).It is,however,pointed out that an individual customer’s pro?tability changes over time so that an unpro?table customer at a given time may prove out to be

pro?table in the future (Gro

¨nroos,2000).Skilful customer asset management can help to achieve this outcome (Zeithaml et al.,2001).

Customer pro?tability assessment may offer tools for pricing decisions as well as service level and time allocation decisions (van Raaij et al.,2003).It is said that service investments across all customer groups do not result in the same returns and,consequently,are not equally advantageous to the ?rm because different pro?table segments respond differently to various service emphases (Zeithaml et al.,2001).Furthermore,Bolton et al.(2004)states that the direction and size of the effects of a marketing instrument have a different impact on the behaviour of diverse customer groups and,therefore,on their pro?tability.At the same time,the outcome of a certain investment made to increase customer value seems to differ across different customers and industries.The marketing concept suggests that in order to operate pro?tably the enterprise has to be oriented towards satisfying customer needs,wants and aspirations (Blankson et al.,2006).This requires gathering,analysing and acting on customer information.It is also necessary to support diverse customer information gathering and utilisation in order to successfully manage customer relationships that are valuable both to ?rms and customers.Rigby et al.(2002)state that customer relationship management (CRM)offers tools to gather customer data swiftly,identify the most valuable customers over time and increase customer loyalty by providing customised products and services.One of the basic assumptions in relationship marketing is that long-term loyal customers are pro?table.Storbacka et al.(1994)suggest that customer relationship pro?tability is achieved through a chain that starts with perceived value that creates customer satisfaction that,in turn,strengthens the relationships so that it lasts longer and thus becomes more pro?table.It is assumed that it is cheaper to keep an existing customer than to acquire a new one.

There are studies focusing on CRM in SMEs (Day et al.,1998;O

¨zgener and Iraz,2006).However,there is very little research concerning the assessment and management of customer pro?tability in SMEs.This study offers some insight into the matter.

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A summary of the research framework

A customer relationship oriented marketing process that includes customer information gathering,segmentation,creating value by differentiation and assessing and pursuing customer pro?tability forms the basis of this study (Figure 1).Customer information is essential for marketing decision-making (Zahay and Peltier,2008).Customer information forms the basis,e.g.for the segmentation that is regarded as a foundation of effective CRM (Rigby et al.,2002).Customer segmentation,in turn,enables enterprises to provide customised offerings and differentiate pricing and marketing communication to different customer groups.This kind of special treatment may act as glue that holds customers and ?rms together as customers are thought to perceive greater value and,thus,they may want to maintain the relationship (Richards and Jones,2008).Customer loyalty and long-term relationships are believed to lead to customer pro?tability (Storbacka et al.,1994).The pro?tability and value of customer is not,however,static,but rather dynamic (Wood,2005)and,thus,customer information gathering,analysing it and changing actions accordingly constitute an ongoing process.The goal of attaining loyal and pro?table customers also determines what kind of customer information should be gathered in the enterprise.

In this study,we examine to what extent the tasks of the customer relationship oriented marketing process including information gathering,segmentation,creating value by differentiation and managing customer pro?tability,is realised in SMEs.Special attention is paid to whether the characteristics of SMEs,such as industry,size and customer markets affect the extent to which these tasks are performed.Data and methods

Development of the questionnaire

The questions were prepared in the light of the marketing literature discussed above (Table I)and were included in a larger questionnaire that dealt with the marketing concept and practices.The questionnaire approach was chosen so that a larger group of SMEs could be reached,thereby achieving a wider understanding of the matter.Data collection

The data were collected mainly through an online-survey.The respondents were selected from an internet based North Karelia (Finland)company register.The survey was targeted to SMEs in three different industries (according to the standard industrial classi?cation):

Figure 1.

A customer relationship

oriented marketing

process

Customer information gathering

Customer segmentation

Creating value

by

differentiation

Managing customer

profitability

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(1)manufacturing;

(2)real estate,renting and business activities and;

(3)other service activities (including,e.g.hairdressing,laundry and dry cleaning,etc.).The questionnaires were directed at those persons in the enterprise who were thought to have knowledge of marketing within the company.

A systematic sampling method was used among those companies reporting their e-mail address in the register.The sampling was performed such that about 30per cent of the ?rms in each industry were included in the sample.Consequently,the online questionnaire was sent to 273SMEs in manufacturing and to 291SMEs in real estate,renting and business activities.In the industry “other service activities”,only 13per cent of the enterprises in the register had supplied their e-mail address,consequently,postal questionnaires were also used.Thus,49online questionnaires and 64postal

Prior research

Statements in the questionnaire

Gathering customer information

Better and more effective use of information is focal for being more market-oriented (Menon and Varadarajan,1992)

Information plays a key role in building and maintaining customer relationships (Jayachandran et al.,2005)

Exploitation of marketing information leads to organisational learning and to enhanced

performance of the ?rm (Low and Mohr,2001)We gather information about what each customer buys

We gather information about the volume our customers buy

We gather information about how often customer buy our products/services

Segmentation

Segmentation is one of the cornerstones of marketing (Storbacka,1997;Jonker et al.,2004)Segmentation is usually based on transactional and behavioural data gathered from various information systems (Lee and Park,2005)

Distribution of pro?tability within the customer base should be the key attribute used in segmentation (Storbacka,1997)We group customers according to their characteristics or background information We group customers according to their pro?tability

Creating value by differentiation

Through differentiation enterprises can provide their customers value and relevance to stay and spend more with them (Wood,2005)

Differentiated relationship value is essential for maintaining successful long-term relationships (Park and Kim,2003)

Our products/services are produced according to the wishes of the customers

We offer products/services with different prices to different customer groups

We target different marketing communication to different customer groups

Managing customer pro?tability

Entrepreneurs can grow their businesses by

getting and keeping customers so that the value of the customer base increases (Blattberg and Deighton,1996)

Customer loyalty and long-term relationships lead to customer pro?tability (Storbacka et al.,1994)Pro?tability and value of customer is not static –it is changing (Wood,2005)

We actively seek new customers

We consciously pursue pro?table customers We prefer to concentrate on the customers we already have

We monitor how the customer relationship develops

We assess the pro?tability of the customer Our customers become regular customers

Table I.

The operationalisation of research questions

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questionnaires were sent to SMEs in other service activities.Altogether679questionnaires were sent to SMEs in the area of North Karelia in Finland.Some107responses were received,the response rate being16per cent.One of the questionnaires was excluded because the respondent was not operating in the selected area.Thus,106responses were analysed of which94were effective for factor analysis.

Data analysis

The data were analysed in?ve phases.First,descriptive analysis of the SMEs’characteristics was applied in order to explore the sample pro?le of the study. Thereafter,the descriptive statistics and correlations between the observed variables were calculated.Third,an exploratory factor analysis was conducted to determine whether the multi-item information derived from the questionnaire could be condensed into a smaller set of factors underlying in the data.After revising the initial factor model,a four-factor solution was generated.The Cronbach’s alphas were computed to prove the internal consistency of items in each of the four factors.Fourth,the items loaded on each of the four factors were combined creating four composite measures. These composite measures were used as dependent variables in the analysis of variance(ANOVA)exploring the differences between characteristics of the SMEs such as industry,size and customer market.Finally,in the?fth phase,in order to simplify the identi?cation of group differences,post hoc pairwise comparison tests,namely, Tukey’s honestly signi?cant difference test(in case of equal variances assumed)and Tamhane’s T2test(in case of equal variances not assumed)were used.

Results

Sample pro?le

Of the enterprises,46.8per cent operated in manufacturing,28.7per cent in real estate, renting and business activities and22.3per cent in other personal service activities. The respondents were asked to state what their position was in the enterprise: 72.3per cent stated that they were entrepreneurs,17.0per cent held a managerial position and7.4per cent were executives.In addition,there were one employee and two who did not specify their position in the?rm.

A great majority of the enterprises,92.6per cent were small or micro-sized.Only about30per cent of the?rms reported having a turnover of e500,000or more.

A majority,69.1per cent operated in business-to-business markets including SMEs that did business with other business and public organisations.A summary of the characteristics is found in Table II.

Descriptive statistics and correlations

Descriptive statistics and correlations between the observed variables are given in Table III.The statistics show great differences between the variables.While activities such as differentiation of products and services according to the wishes of customers, following how their customer relationships develop and pursuing pro?table customers were very often performed among the respondents,activities such as segmentation by customers’characteristics,background information or pro?tability,and targeting marketing communication were less frequently carried out.

As expected,from the literature,the correlations between the observed variables show high correlations among some of the variables,while correlations between some Marketing practices in SMEs

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other variables are low.Therefore,it seems that the variables can be grouped into more general areas of evaluation.However,based on the correlations the variable groupings are not apparent.Therefore,in order to identify the underlying dimensions of the variables,exploratory factor analysis with principal component extraction method and varimax rotation was used.

Factor analysis

The initial factor procedure produced a ?ve-factor solution with eigenvalues .1representing 72.1per cent of the total variance of the variables (Table IV).In order to ensure practical signi?cance,factor loadings ,0.50were suppressed (Hair et al.,1998).The factor solution reveals that each variable has only one signi?cant loading on one factor which considerably simpli?es the interpretation of the meaning of each factor.However,variable 14does not load on any of the ?ve factors and was therefore removed from further analysis.Moreover,variable 4alone constitutes a separate factor number 5and was also removed from further analysis.

After removing variables 4and 14,a revised factor solution was generated (Table V).The revised model consists of four factors with eigenvalues .1.Again,each variable has only one signi?cant loading on one factor,all the loadings being .0.60.The solution represents 72.1per cent of the total variance of the variables.The Kaiser-Meyer-Olkin (KMO)measure of sampling adequacy (KMO ?0.777)and the Bartlett test of sphericity (p ,0.001)con?rmed that the factor analysis was appropriate.The four factors that we labelled management of customer pro?tability,information gathering,customer targeting and orientation to customer retention,showed adequate internal consistency with the Cronbach’s alphas ranging from 0.593to 0.905(Nunnally,1967).

SME characteristic %Frequency

Industry

Manufacturing

46.844Real estate,renting and business activities 28.727Other personal services 22.321Missing 2.12Total 100.094Annual turnover

0-99,999

34.032100,000-499,99931.930500,000or over 30.929Missing 3.23Total 100.094Number of employees

0-977.77310-4914.91450-2497.47Missing 0.00Total

100.094Customers

Consumers

29.828Business organisations 57.454Public organisations 11.711Missing 1.11Total

100.0

94

Table II.Characteristics of the valid sample

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V a r i a b l e

V 1V 2V 3V 4V 5V 6V 7V 8V 9V 10V 11V 12V 13V 14

M e a n v a l u e 2.572.532.573.372.382.262.691.973.132.212.763.102.222.91S D 1.061.101.050.690.820.820.840.750.640.950.960.890.920.62

V 1W e g a t h e r i n f o r m a t i o n a b o u t w h a t e a c h c u s t o m e r b u y s 1.000V 2W e g a t h e r i n f o r m a t i o n a b o u t t h e v o l u m e o u r c u s t o m e r s b u y 0.8001.000V 3W e g a t h e r i n f o r m a t i o n a b o u t h o w o f t e n c u s t o m e r s b u y o u r p r o d u c t s /s e r v i c e s 0.7020.7801.000V 4O u r p r o d u c t s /s e r v i c e s a r e p r o d u c e d a c c o r d i n g t o t h e w i s h e s o f t h e c u s t o m e r s 20.0600.02020.0761.000V 5W e o f f e r p r o d u c t s /s e r v i c e s w i t h d i f f e r e n t p r i c e s t o d i f f e r e n t c u s t o m e r g r o u p s 0.2390.2010.2540.0111.000V 6W e t a r g e t d i f f e r e n t m a r k e t i n g c o m m u n i c a t i o n t o d i f f e r e n t c u s t o m e r g r o u p s 0.3380.3250.32820.0950.3191.000V 7W e a c t i v e l y s e e k n e w c u s t o m e r s 0.3680.2480.20220.0970.2040.2721.000

V 8W e p r e f e r t o c o n c e n t r a t e o n t h e c u s t o m e r s w e a l r e a d y h a v e a

0.2510.1760.22720.2260.1070.1530.4241.000

V 9W e m o n i t o r h o w t h e c u s t o m e r r e l a t i o n s h i p d e v e l o p s 0.2380.1910.2400.1590.0900.0600.15320.1691.000

V 10W e g r o u p c u s t o m e r s a c c o r d i n g t o t h e i r c h a r a c t e r i s t i c s o r b a c k g r o u n d i n f o r m a t i o n 0.3790.4040.42520.2050.3790.5400.1910.0100.202

1.000

V 11W e a s s e s s t h e p r o ?t a b i l i t y o f t h e c u s t o m e r 0.3510.4090.3120.0260.1890.3150.15920.1150.453

0.4361.000

V 12W e c o n s c i o u s l y p u r s u e p r o ?t a b l e c u s t o m e r s 0.3830.3840.31920.1460.2000.2020.31120.1230.390

0.4960.6691.000

V 13W e g r o u p c u s t o m e r s a c c o r d i n g t o t h e i r p r o ?t a b i l i t y 0.4070.4230.36720.0650.2720.3540.20120.0050.2060.5010.7360.6171.000V 14O u r c u s t o m e r s b e c o m e r e g u l a r c u s t o m e r s 0.0920.1620.1590.02520.02020.020

0.17720.0750.27220.0050.2010.1910.0911.000

N o t e s :1?n e v e r ,4?a l w a y s ;a r e v e r s e d s c a l e

Table III.

Descriptive statistics and correlation matrix

Marketing

practices in SMEs

125

ANOVA

In order to ?nd out if the extent to which SMEs gather customer information and act on it differs in terms of industry,size and customer markets,ANOVA test was used.The variables loaded on each of the four factors were combined creating four composite measures which were then used as dependent variables in the ANOVA.Summing the variables yields two speci?c bene?ts.First,it reduces the measurement error inherent in all measured variables,and second,it represents the multiple aspects of a concept in a single measure (Hair et al.,1998).

The results show that SMEs operating in different industries differ most in terms of activities based on management of customer pro?tability (F ?7.523;p ?0.001)and activities related to customer targeting (F ?4.315;p ?0.016).It appears that SMEs in the ?elds of real estate,renting and business activities and manufacturing more often manage customer pro?tability and target customers than do the enterprises operating with other personal services.However,the results show that activities related to information gathering and to orientation to customer retention do not differ between the industries (Table VI).The post hoc pairwise multiple comparisons tests show statistically signi?cant differences with regard to management of customer pro?tability and customer targeting between manufacturing SMEs and those operating in other personal services,and between SMEs operating in real estate,renting and business activities and those in other personal services.No statistical differences were found

Variable

Factor 1Factor 2Factor 3Factor 4Factor 5We consciously pursue pro?table customers 0.822We assess the pro?tability of the customer

0.821We group customers according to their pro?tability 0.678We monitor how the customer relationship develops 0.600

We gather information about the volume our customers buy

0.905We gather information about how often customers buy our products/services

0.872We gather information about what each customer buys

0.841

We offer products/services with different prices to different customer groups

0.729We target different marketing communication to different customer groups

0.682We group customers according to their characteristics or background information 0.593

We actively seek new customers

0.844We prefer to concentrate on the customers we already have a

0.650

Our products/services are produced according to the wishes of the customers

0.888

Our customers become regular customers Initial eigenvalue

4.716 1.841 1.371 1.156 1.011Percentage of variance explained

20.51119.14113.13510.3778.942Cumulative percentage of variance explained 20.511

39.651

52.787

63.164

72.106

Note:a Reversed scale

Table IV.

Initial factor solution

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126

between manufacturing enterprises and those offering services related to real estate,renting and business activities (Table VII).

The size of the SMEs was measured in terms of annual turnover and number of employees.The results show that different sized SMEs vary most in their activities related to customer targeting,followed by activities with regard to management of

Variable

Management

of customer pro?tability Information gathering Customer targeting

Orientation to customer

retention We consciously pursue pro?table customers 0.809

We assess the pro?tability of the customer 0.807We monitor how the customer relationship develops

0.708We group customers according to their pro?tability

0.626

We gather information about the volume our customers buy

0.893We gather information about how often customers buy our products/services 0.873We gather information about what each customer buys

0.826

We target different marketing

communication to different customer groups 0.756We group customers according to their characteristics or background information 0.716We offer products/services with different prices to different customer groups 0.686

We actively seek new customers

0.860

We prefer to concentrate on the customers we already have a

0.772Initial eigenvalue

4.668 1.759 1.191 1.040Percentage of variance explained

21.58921.22817.22612.098Cumulative percentage of variance explained 21.58942.81860.04372.141Cronbach’s alpha

0.817

0.905

0.679

0.593

Notes:KMO measure of sampling adequacy ?0.777;x 2?517.176;Bartlett’s test of sphericity,p ,0.001;a reversed scale

Table V.

Revised factor solution

Factor

Manufacturing (n ?44)

Real estate,renting and business activities (n ?27)

Other personal services (n ?21)F -value Sig.(p )Management of customer pro?tability 2.83 3.10 2.377.5240.001Information gathering 2.67 2.70 2.25 1.5630.215Customer targeting

2.40 2.42 1.94 4.3150.016Orientation to customer retention 2.36

2.30

2.26

0.182

0.834

Note:1?never,4?always

Table VI.ANOVA results of the industry

Marketing practices in SMEs

127

customer pro?tability and to information gathering.orientation to customer retention does not differ signi?cantly in different sized SMEs.A more detailed look at the mean values shows that micro ?rms whose annual turnover is ,e 100,000and who employ the maximum of nine employees put signi?cantly less effort on the three above mentioned activities than do the larger SMEs (Tables VIII and X).

With regard to annual turnover,the post hoc pairwise multiple comparisons tests show statistically signi?cant (p ,0.05)differences in managing the pro?tability of customers and information gathering between ?rms with annual turnover of ,e 100,000and those with higher turnover rates.There were no statistical differences between SMEs who had e 100,000-499,999turnover and those who had over e 500,000turnover.However,the SMEs having the lowest (,e 100,000)and the highest (.e 500,000)turnovers differed signi?cantly (p ,0.01)from each other with regard to customer targeting (Tables IX and X).

The smallest (zero-nine employees)and the largest (50-249employees)SMEs differ signi?cantly (p ,0.05)with regard to management of customer pro?tability and information gathering.Moreover,the micro ?rms (zero-nine employees)and middle sized enterprises of our study (ten-49employees)appear to differ signi?cantly (p ,0.01)with regard to customer targeting.Other pairwise comparisons related to the number of employees showed no statistically signi?cant differences (Table XI).Finally,differences were examined between SMEs operating in different customer markets.The results indicate signi?cant differences with regard to customer targeting,

Factor

Levene

test (Sig.,p )

Manufacturing

vs

real estate,renting

and business activities Manufacturing vs other personal services Real estate,renting and business activities vs other personal services Management of customer pro?tability a

0.576

ns *

**

Information gathering a 0.765ns ns

ns

Customer targeting a

0.293ns *

*

Orientation to customer retention a

0.219

ns

ns ns

Notes:*p ,0.05,**p ,0.01,***p ,0.001;a Tukey’s honestly signi?cant difference test (equal variances assumed)

Table VII.

Post hoc pairwise

multiple comparisons test of the industry

Factor

,e 100,000(n ?32)e 100,000-499,999

(n ?30)

e .500,000(n ?29)

F -value Sig.(p )Management of customer pro?tability

2.54 2.96

3.00

4.6880.012Information gathering 2.18 2.80 2.77 4.3160.016Customer targeting

2.06 2.29 2.60 5.3600.006Orientation to customer retention 2.25

2.47

2.31

0.829

0.440

Note:1?never,4?always

Table VIII.ANOVA results

of the annual turnover

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management of customer pro?tability and information gathering,while orientation to customer retention does not differ signi?cantly between SMEs with different customer base(Table XII).It appears that SMEs operating with consumers differ signi?cantly from those operating with business organisations.This is the case especially with regard to customer targeting(p,0.001)but also with regard to management of customer pro?tability and information gathering(p,0.01).It seems that SMEs operating in business-to-business markets put signi?cantly more effort into gathering and utilising customer information than do those operating in consumer markets.In addition,the SMEs operating in consumer markets differ from those operating with

Factor 0-9employees

(n?73)

10-49employees

(n?14)

50-249employees

(n?7)F-value Sig.(p)

Management of customer

pro?tability 2.69 3.05 3.46 5.6180.005 Information gathering 2.42 2.86 3.48 4.8260.010 Customer targeting 2.16 2.74 2.62 5.7240.005

Orientation to customer

retention 2.36 2.39 1.93 1.3670.260 Note:1?never,4?always

Table X. ANOVA results of the number of employees

Factor Levene

test

(Sig.,p)

0-9vs

10-49employees

0-9vs

50-249employees

10-49vs

50-249employees

Management of customer

pro?tability a0.349ns*ns Information gathering a0.248ns*ns

Customer targeting a0.287**ns ns Orientation to customer

retention b0.002ns ns ns Notes:*p,0.05,**p,0.01,***p,0.001;a Tukey’s honestly signi?cant difference test(equal variances assumed);b Tamhane’s T2test(equal variances not assumed)

Table XI.

Post hoc pairwise multiple comparisons test

of the number of

employees

Factor Levene test

(Sig.,p)

,e100,000vs

e100,000-499,999

,e100,000vs

.e500,000

e100,000-499,999vs

.e500,000

Management of

customer pro?tability a0.540**ns Information gathering a0.288**ns Customer targeting a0.244ns**ns

Orientation to customer

retention b0.007ns ns ns Notes:*p,0.05,**p,0.01,***p,0.001;a Tukey’s honestly signi?cant difference test(equal variances assumed);b Tamhane’s T2test(equal variances not assumed)

Table IX.

Post hoc pairwise multiple comparisons test of the annual turnover

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practices

in SMEs

129

public organisations in terms of targeting customers.SMEs operating with public organisations pay signi?cantly (p ,0.05)more attention to customer segmentation and price differentiation than do those operating with consumers (Table XIII).Conclusions

The purpose of this study was to examine to what extent SMEs gather customer information and act on it,keeping in mind the pro?tability of business operations.A customer relationship oriented marketing process that includes customer information gathering,customer segmentation,creating value by differentiation and managing customer pro?tability was taken to be the basis of this study.Special attention was paid to whether the characteristics of SMEs,such as industry,size and customer markets affect the extent to which these tasks are performed.

The variables used in the questionnaire were based on the phases presented in the customer relationship oriented marketing process.The results showed great differences in the activity of different marketing tasks,e.g.customising products and services,following how customer relationships develop and pursuing pro?table customers were performed often,whereas such tasks as segmentation based on customers’background characteristics or pro?tability and customising marketing communication and pricing were carried out less frequently.In the marketing literature,segmentation has been regarded as a focal part of marketing (Jonker et al.,2004)and differentiated marketing efforts are seen to affect customer pro?tability

Factor

Levene test (Sig.,p )Consumers

vs business organisations

Consumers

vs public organisations

Business organisations

vs public organisations

Management of customer pro?tability a 0.013**ns ns Information gathering b 0.731**ns

ns Customer targeting b

0.848***

*

ns Orientation to customer retention b

0.754

ns ns

ns

Notes:*p ,0.05,**p ,0.01,***p ,0.001;a Tamhane’s T2test (equal variances not assumed);b

Tukey’s honestly signi?cant difference test (equal variances assumed)

Table XIII.Post hoc pairwise

multiple comparisons test of the customers

Factor

Consumers (n ?28)Business organisations (n ?54)

Public organisations (n ?11)

F -value Sig.ep TManagement of customer pro?tability

2.43

3.00 2.757.2050.001Information gathering 2.06 2.75 2.85 5.5430.005Customer targeting

1.86

2.47 2.399.204,0.001Orientation to customer retention 2.23

2.38

2.27

0.470

0.627

Note:1?never,4?always

Table XII.ANOVA results of the customers

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130

(Bolton et al.,2004).Thus,it could be argued that putting more emphasis on these marketing activities SMEs might enhance their business performance.

A factor analysis of the answers produced four factors that were labelled as management of customer pro?tability,information gathering,customer targeting and orientation to customer retention.The ?rst two factors related to the managing customer pro?tability and customer information gathering phases of the customer-oriented marketing process.The factor customer targeting unites the stages of customer segmentation and creating value by differentiation.This is quite logical because segmentation is considered to be not a goal but rather a means to enable an enterprise to differentiate and target its marketing efforts at chosen customer segments (Jonker et al.,2004).The fourth factor,orientation to customer retention,relates to managing customer pro?tability.It refers to the assumption in relationship marketing that long-term customers become pro?table customers (Storbacka et al.,1994).Based on these results an enhanced model of customer relationship oriented marketing process includes the following phases:information gathering,customer targeting,orientation to customer retention and managing customer pro?tability (Figure 2).

We examined if there were differences in SMEs of different industries,sizes and customer markets regarding the extent to which they performed the studied marketing activities.In general,the factors management of customer pro?tability and customer targeting were the ones that seemed to most differentiate the SMEs from one another.On the other hand,orientation to customer retention did not form a differentiating factor between the SMEs studied.

With regard to industry,enterprises in other personal services differed from those in manufacturing and in real estate,renting and business activities while between the latter two industries no statistically signi?cant differences were found.When SMEs of different sizes were compared the micro ?rms of zero-nine employees and those having an annual turnover below e 100,000differed from their larger counterparts,between which no statistically signi?cant differences were found.Again,those SMEs that operating in consumer markets differed from those who doing business with other businesses or public organisations.There were no statistically signi?cant differences between the latter two groups.In summary,the SMEs that were micro sized,operated in the industry of other personal services and in consumer markets seemed to put less effort into marketing than the other enterprises studied.

Figure 2.

Enhanced model of customer relationship oriented marketing

process

Customer information gathering

Customer targeting

Orientation to customer retention

Managing customer

profitability

Marketing practices in SMEs

131

In the light of the results it can,then,be argued that customer relationship oriented marketing practices differ between different SMEs.It may be suggested that due to lack of resources,such as ?nance,time and marketing knowledge (Gilmore et al.,2001)micro ?rms especially do not pay attention to or perform marketing activities very actively.Marketing is used for the needs of the moment and plans,strategies and analysis tend to be disregarded (Stokes,2000).The fact that SMEs in other personal services stood out from those in the other two industries could also,at least partly,be explained by the size of the ?rm.These enterprises that relate,e.g.to hairdressing or laundry and dry cleaning are often very small.Overall,the results suggest that size may have a greater in?uence on the marketing efforts carried out in SMEs than does,for example,whether it offers goods or services.This should,however,be studied further.

The results also revealed differences between SMEs operating in consumer and business-to-business markets that traditionally include enterprises doing business both with other business and public organisations.These differences might be explained by the special characteristics of the markets.In business-to-business markets marketing is usually more formal,e.g.there are several decision-makers,the time for making decisions is longer,the size of the purchase is often much larger in both value and volume and the consequence of a poor purchase is potentially much more critical (Fill and Fill,2005).Consequently,more attention should be paid to planning and performing marketing activities in business-to-business markets.

Prior research has shown that basic marketing concepts,such as customer orientation,segmentation,targeting and seeking competitive advantage are relevant in SMEs (Hogarth-Scott et al.,1996)and that marketing forms one of the most important business activities indispensable to the survival and growth of SMEs (Simpson and Taylor,2002).Nevertheless,it was shown in this study that marketing activities frequently do not get enough attention especially in the smallest SMEs.In these enterprises the role of the owner-manager is signi?cant and consequently more attention should be paid to enhancing their marketing capabilities.

This study provided a closer look at how customer relationship oriented marketing practices are performed in different SMEs.The study was conducted among a relatively small number of SMEs and in a small geographical area.Thus,further studies are required to gain a more profound understanding of the theme.It would be interesting to study,for example how performance in the different phases of the customer relationship oriented marketing process affects performance in other phases.

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雅思口语素材汇总之端午节

雅思口语素材汇总之端午节 雅思口语素材:Dragon Boat Festival(端午节) Qu Yuan The Dragon Boat Festival, also called the Duanwu Festival, is celebrated on the fifth day of the fifth month according to the Chinese calendar. For thousands of years, the festival has been marked by eating zong zi (glutinous rice(糯米)wrapped to form a pyramid using bamboo or reed leaves) and racing dragon boats. The festival is best known for its dragon-boat races, especially in the southern provinces where there are many rivers and lakes. This regatta(赛舟会)commemorates the death of Qu Yuan , an honest minister who is said to have committed suicide by drowning himself in a river. Qu was a minister of the State of Chu situated in present-day Hunan and Hubei provinces, during the Warring States Period (475-221BC)(战国时期). He was upright, loyal and highly esteemed for his wise counsel that brought peace and prosperity to the state. However, when a dishonest and corrupt prince vilified Qu, he was disgraced and dismissed from office. Realizing that the country was now in the hands of evil and corrupt officials, Qu grabbed a large stone and leapt into the Miluo River on the fifth day of the fifth month. Nearby fishermen rushed over to try and save him but were unable to even recover his body. Thereafter, the state declined and was eventually conquered by the State of Qin. The people of Chu who mourned the death of Qu threw rice into the river to feed his ghost every year on the fifth day of the fifth month. But one year, the spirit of Qu appeared and told the mourners that a huge reptile(爬行动物)in the river had stolen the rice. The spirit then advised them to wrap the rice in silk and bind it with five different-colored threads before tossing it into the river. During the Duanwu Festival, a glutinous rice pudding called zong zi is eaten to symbolize the rice offerings to Qu. Ingredients such as beans, lotus seeds(莲子), chestnuts(栗子), pork fat and the golden yolk of a salted duck egg are often

雅思口语常用背诵素材

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Useful Expressions: Words and phrases Friends and communication: solidify/ strengthen/ enhance/ promote communication / connection with mutual understanding relationship network/circle of f r i e n d s cultivate/develop friendship with s b . keep steady relationship with sb. establish interpersonal networksac build up the social circle spur message transmission Knowledge and experience widen one’s outlook broaden one’s vision/horizon acquire knowledge and skills comprehensive/overall quality

expand/enlarge one’s scope of knowledge knowledge reserve/base/storage theoretical knowledge practical skills social experience broaden one’s knowledge base promote one’s overall/ comprehensive competence accumulate experiences learn lessons from past experiences Work and experience the scarcity of employment o p p o r t u n i t i lay the foundations for career p r o s p e r i t y

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Describe a monument Describe an interesting building Describe a lake, river or sea. Describe a peaceful place Describe a leisure place Describe a park Describe a place of interest Describe a natural beauty Describe a city you want to live in Describe a place you have visited Describe a place you always go for shopping

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Who—My most favourite singers include Adele, James Blunt, Avril Lavigne, and so forth. ( 喜欢的歌手) Why—I am fond of music mainly because it can cheer me up greatly when I feel down/low/ blue/bored/tired/depressed. ( 心情不好的时候让我高兴起来)?Besides, I also believe that music is an indispensable part of culture and tradition, through which I could have a better understanding of different cultures around the world, including cowboy culture, African-American street culture, the three main reli- gions and so on. ( 有助于理解不同的文化) Do you like watching movies?? A—Speaking of movies, yes, I am a big fan of all types of movies, such as...?What—comedy, action, romance, sci-fi, manga, vampire, zombie, animation...

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