The concept of knowledge management and its role in relationship marketing

 
Introduction
Marketing management is a generic term used to describe the administration of an
organization’s marketing resources as well as the practical implementation of
marketing techniques in the day to day business operation of organizations. The
exponential rise in digital and information technology has greatly changed the nature
of marketing management in our contemporary society. This advancement has also
increased both the responsibilities of marketing managers and general issues that
face marketing management as a whole. In this paper, we take an exclusive look at
the contemporary issues in marketing management. Understanding these issues is
very important in organizations’ attempt to create an efficient, cost-efficient
marketing management strategy.
1. The concept of knowledge management and its role in
relationship marketing
Knowledge management (KM) is generic term used to describe the overall process of
obtaining, developing, distributing and using organizational knowledge (Thomas,
1994). It involves a multi-disciplined approach that is specifically aimed at
accomplishing organizational objectives through the best use of knowledge (Ikujiro
and Georg, 2009). Maier (2007) listed the organizational objectives, usually targeted
by knowledge management as: competitive advantage, improved performance,
innovation, continuous improvement of the organization, sharing of lessons learned
and competitive advantage.
Knowledge management play significant role in relationship marketing, especially
customer relationship management (Kirby, 2005). Customer relationship
management is the process through which an organization manages its interaction
with its current and future customers (Robert, 1991). It involves the use of
technology to organize, automate and synchronize sales, marketing, customer
service, and technical support. Thus, organizational knowledge is basically used in
giving out the very best of services to customers.
Customer relationship management helps in the acquisition and subsequent
retention of organization’s customer. The two terms, customer acquisition and 
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customer retention are two metrics that can be very helpful in deducing
organization’s return on investment (ROI) for efforts to monetize consumers. It also
possible to use the two metrics in tracking changes in a market (Piskar and Faganel,
2001).
Despite their collective applications, the two metrics also differ in several ways.
While customer acquisition involves the conversion of a person into paying
customer, customer retention is all about keeping an existing customer and securing
his continued patronage. Unlike cost of customer retention which requires complex
calculation, customer acquisition cost can easily be determined by dividing all
expenses dedicated to acquisition by the number of new customers acquired within
the duration under review. The common expenses dedicated to customer acquisition
include: promotion, marketing, advertisement, labor cost etc. On the other hand, the
cost of customer retention can be determined by summing up total purchases over a
period mitigated by retention expenditures, acquisition costs and general overhead.
The lifetime values (LTV) of every organization are directly affected by customer
retention. This is because; customer retention directly affects lifetime values (LTV).
2. Ways through which ICT can support Customer
Relationship Management Process in a Transport Company
The emergence and spontaneous growth of Information and Communication
Technology (ICT) has led to its wide application in various aspects of business. In
several transportation companies, ICT is playing very significant roles in Customer
Relation Management Process (CRM). For instance, the use of ICT can make it
possible for transport companies to understand the needs of passengers and respond
to them quickly. The complementary use of CRM software with computers and
internet can simplify and hastened data analysis process as well as provision of
solutions that are in tune with customer’s transportation needs. A very good example
is the use of ICT in CRM process of transportation companies, which can help
managers to determine the preferred route and vehicles choices of passenger at any
point in time (Fjermestad and Romano, 2003).
The use of ICT can also help mangers to develop sustainable communication with
their clients. This is actually one of the major ways of obtaining useful data, which 
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can be use in the planning, scheduling and resourcing the processes of the company.
It’ll also help managers to analyze the profiles of their clients (Buttle 1996).
Finally, the implementation of ICT in the CRM process of transportation companies
can help in the identification of new selling opportunities to previous customers. This
is because, digitalized CRM process aid managers to identify new opportunities that
will be of immense benefits t