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Currently the dominant player in a new arena, TeraTech a leader in the pharmaceutical industry, is a fiver year-old Customer Relationship Management (CRM) solutions provider. This CRM concept is relatively new, and its basic function is to help develop a complete picture of the industry customers, then evaluating those relationships across products and services.
The purpose of this paper is to first identify the different issues and opportunities that TeraTech is facing, and to discuss the various alternatives that could help them solve their problems. The ultimate solution of course, would be to help TeraTech reach an effective process by which they establish customer satisfaction and customer loyalty, through efficient customer service. Successfully doing this will bring an increase in sales and profits, and help maintain a level of satisfactory customer relationships.
Describe the Situation
Issue and Opportunity Identification
TeraTech’s CEO is concerned because of the significant fall in the fourth quarter sales. The executives at TeraTech, suspects that aggressive and increased competition from other companies that produces the analytical software that the pharmaceutical industry want, is also part of their problem. They are also concerned with the dissatisfaction of their customers, which was revealed to them by the most current customer surveys. Another major issue facing TeraTech, is their reluctance to hire new employees. Although the current employees do not have the skills needed to handle the new analytical product, they plan on keeping the same number of employees from the previous year. Time constraint is also an issue for TeraTech. They feel the need to keep up with competition, and so they are concerned about producing the product within a short space of time.
With all the given issues and challenges that TeraTech is facing, they can use them to their advantage, and turn them into opportunities. They are faced with the opportunity to develop a CRM tool that will bridge the gap between the product and the customer, appealing to their wants and needs, which will in turn generate an increase in sales. With the improvement in customer service and customer relations, TeraTech has the opportunity to create customer loyalty with the potential to entice future customers.
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Stakeholder Perspectives/Ethical Dilemmas
At TeraTech, the Stakeholders would be, the investors, the employees, and the customers. A major issue facing TeraTech is, the conflicting values between the executives, management, and the employees. They need to have their perspectives aligned around a common plan that will specifically focus on the customer concern, and not on their own individual initiatives. The founder of TeraTech Jack Dwyer, seem certain on specific main objectives. He wants the management team to focus on a new marketing plan, a new and improve analytical CRM product, and attention placed on stimulating sales growth.
Frame the “Right” Problem
Environmental Scanning is a possible strategic process, if properly integrated into an organization’s planning, can help a company increase profits, retain current customers, and keep a competitive advantage. Environmental Scanning is, ”The process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends”(Kerin, 2006, chp. 3). There is also the realization of opportunity of an acquisition with a smaller company that already have the knowledge of the use of the analytical tools.
Describe the “End-State” Vision
For TeraTech, an end-state-vision would comprise of several factors: Increasing profits, retaining current customers while opening opportunity for new customers, implementing a marketing plan, applying date found from a successful environmental scanning process, and immediately addressing the ethical internal company issues.
Identify the Alternatives and Benchmarking Validation
Benchmarking is always an ideal method that gives an company an advantage over their competitors. Benchmarking companies would allow TeraTech to evaluate the way other companies within the same industry handled the same or similar issues. TeraTech is in a position of possible losing customers because of dissatisfaction of a new product. Also, there need to be an improvement in the processes of customer service. This would lead to an alternative for TeraTech. By placing a focus on increasing their customer base, this will create customer loyalty. An efficient way to create customer sustainability is to respond quickly to customer complaints.
A key factor behind Starbuck’s success as a leading coffee house, with 15,000 chain stores around the world, is their motto, “putting people before products, just make good sense”. Starbuck’s believe that the connections they make in communities create a loyal following, and the support that they provide their baristas pays off every day, This keeps them with a competitive advantage of being the leading, roaster and brand of specialty coffee in the world.
Relative to TeraTech
Starbuck’s has a reputation for constantly coming out with new and innovative products. Although this has brought them great success, they have now saturated the market and will possibly need to do some market research to see how they can continue to reach margin goals and increase profits.
TeraTech can follow their example by analyzing the market to help them realize immediate opportunities, while working to improve on internal weaknesses.
TeraTech could improve their situation by placing a high focus on maintaining customer loyalty. The consistent satisfaction of their customers should be their foremost priority. Improving customer service and customer satisfaction will drive customers to trust in the efficiency of TeraTech. They need to believe that they are getting the best quality in TeraTech’s products.
Evaluate the Alternatives
In evaluating the alternative goals for TeraTech, one of the most important factors would be meeting the customer’s needs and addressing the issues behind their dissatisfaction with the new product. Creating and developing a marketing plan could also be a driving force behind increasing profitability. Knowing and understanding the position of the market, puts a company in the position to realize the exact needs and wants of the customers. There is always the alternative of doing nothing, and waiting to see what the outcome would be. But this is a risk that the company cannot afford. This strategy leave the company open for continued loss of profits, possible loss of customer and product failure.
Identify and Assess Risks
There are risks on placing such an enormous effort on pleasing the customers. This tactic could make the customers suspicious. They may want to know why after customer service was so inefficient, it is all of a sudden a main focus. They may think that the product failed and the company needs to find a way to get rid of it. Consumers are fickle, and they are always suspicious of companies that are overly nice. Strange ideal, yet true. As a consumer, you want good customer service, but you don’t want a representative in your business, and so TeraTech will have to improve their customer service in a manner that is not thrown at the customer too fast, yet effective enough for the customer to be satisfied.
The marketing plan strategy also has its risks. Marketing is the part of the company business that transforms the production activities into financial success. The major goals and objectives of the business should drive your marketing plan. But, ”today we are all in competitive overdrive. Even the most intuitive decision makers must make increasing risky calls in areas where they have less personal experience. Decision-making variables are climbing past the human ability to monitor them as time and again we hear the CMO yearn for simplicity and focus. Yet while it's difficult to argue against this common-sense gravitas, it's also unwise for marketing professionals to ignore the proliferation of data points that can facilitate resource allocation to generate competitive advantage”(MarketingNVP, LLC., 2008).
Make the Decision
To maintain the position of being a leader in the pharmaceutical industry, TeraTech will benefit best by partnering with another small company that has already had success in the use of analytical tools, which is desired by TeraTech and their customers. When TeraTech launches the new product, aligning a new strategic plan for the improvement in customer service and satisfaction will fall right in line with the product launch.
Develop and Implement the Solution
First, perform a SWOT analysis, and after collecting the data, implement findings. Know and understand your weaknesses, and begin to improve on them, then, utilize your opportunities.
Move forward with the partnering of a smaller company that has the experience of using the analytical tools. Utilize information obtained from your market scanning to position you to develop an improved customer service process.
Evaluate the Results
There are various solutions and alternatives. TeraTech’s goals are to remain as eaders in the pharmaceutical industry by, developing and implementing a new CRM product that will include analytical tools. They will obtain customer satisfaction, increase sales, and improve customer relationships.
TeraTech will move into the future maintaining their competitive advantage, and sustaining their position as industry leaders. They would have produce a successful CRM product that uses analytical tools, and that bridge the gap between product and customers. The creation of efficient and effective customer service, will continue to create opportunities for customer loyalty and new potential customers as well.
Kerin, A., Hartley, S.W., Berkowitz, E.N. & Rudelius W. (2006) Marketing. New York. The McGraw Hill Companies
University of Phoenix (2008) Scenario One: TeraTech. Retrieved from http://mycampus.phoenix.edu