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Management article
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Reference no. SMR43311
Authors: M Sawhney
Published by: MIT Sloan School of Management
Published in: "MIT Sloan Management Review", 2002
Length: 3 pages

Abstract

While relationship marketing assumes that companies relate to customers, collaborative marketing requires that companies work with customers to define, design and deliver value. Collaboration has become an established way of doing business with suppliers, channel partners and complementors. But, with a few notable exceptions, working directly with customers to co-create value remains a radical notion. As consumers have become increasingly empowered and demanding, marketing gurus have preached the benefits of customer-relationship management - essentially an ''inside-out'' approach to retaining customers based on the misguided notion that the company is the arbiter of the relationship and the customer plays a passive role. In today''s connected world, however, collaborative marketing - the valuable process of partnering with the end-user to maximize value - is the goal. Collaboration can span all facets of marketing, sales and support processes. Collaborative innovation occurs when companies tap into user expertise and integrate it into the business''s new-product development process. For example, Procter & Gamble created the ''P&G Advisors'' program that lets consumers contribute to product development - they try new items and provide qualitative feedback, allowing P&G to refine products and marketing plans faster and at a tenth of the current testing costs. Remember, while relationship marketing assumes that companies relate to customers, collaborative marketing requires that companies work with customers to define, design and deliver value. Only when companies are able to collaborate better with end-users can the quest for value in the new marketplace reach its full potential.

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Abstract

While relationship marketing assumes that companies relate to customers, collaborative marketing requires that companies work with customers to define, design and deliver value. Collaboration has become an established way of doing business with suppliers, channel partners and complementors. But, with a few notable exceptions, working directly with customers to co-create value remains a radical notion. As consumers have become increasingly empowered and demanding, marketing gurus have preached the benefits of customer-relationship management - essentially an ''inside-out'' approach to retaining customers based on the misguided notion that the company is the arbiter of the relationship and the customer plays a passive role. In today''s connected world, however, collaborative marketing - the valuable process of partnering with the end-user to maximize value - is the goal. Collaboration can span all facets of marketing, sales and support processes. Collaborative innovation occurs when companies tap into user expertise and integrate it into the business''s new-product development process. For example, Procter & Gamble created the ''P&G Advisors'' program that lets consumers contribute to product development - they try new items and provide qualitative feedback, allowing P&G to refine products and marketing plans faster and at a tenth of the current testing costs. Remember, while relationship marketing assumes that companies relate to customers, collaborative marketing requires that companies work with customers to define, design and deliver value. Only when companies are able to collaborate better with end-users can the quest for value in the new marketplace reach its full potential.

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