Customer Relationship Manager(CRM) Question:
Evolution of Customer-Suplier Relationship?
Answer:
F. Robert Dwyer, a marketing professor at Lindner College of Business states five phases through which a customer-supplier relationship evolves
Awareness − The parties come in contact with each other and see each other as a possible customer or supplier.
► Exploration − The parties find out more about one another's capabilities and business prospects. Trial purchasing takes place and performance is assessed. If deal is not smooth then the relationship terminates with the damage of less costs.
► Expansion − It is composed of attraction, communication, bargaining, development of rules, and development of expectations from each other.
► Commitment − Trust begins to develop and deals are executed as per the norms and expectations. Mutual understanding and cooperation develops, and number of transactions start building up.
► Dissolution − Not all relationships can survive. Some relationships are terminated either bilaterally (both parties agree to end) or unilaterally (one party decides to end). If it is bilateral decision then both parties retrieve the invested amount and resources. Supplier exits relationship in case of failure to contribute sales volume or profit. Customer ends relationship unilaterally due to changes in product requirement, repeated servicing failure, etc.
Dissolution can be avoided by reducing cost-to-serve.
Awareness − The parties come in contact with each other and see each other as a possible customer or supplier.
► Exploration − The parties find out more about one another's capabilities and business prospects. Trial purchasing takes place and performance is assessed. If deal is not smooth then the relationship terminates with the damage of less costs.
► Expansion − It is composed of attraction, communication, bargaining, development of rules, and development of expectations from each other.
► Commitment − Trust begins to develop and deals are executed as per the norms and expectations. Mutual understanding and cooperation develops, and number of transactions start building up.
► Dissolution − Not all relationships can survive. Some relationships are terminated either bilaterally (both parties agree to end) or unilaterally (one party decides to end). If it is bilateral decision then both parties retrieve the invested amount and resources. Supplier exits relationship in case of failure to contribute sales volume or profit. Customer ends relationship unilaterally due to changes in product requirement, repeated servicing failure, etc.
Dissolution can be avoided by reducing cost-to-serve.
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