Key Account Management Lterature Review

3153 words - 13 pages

1.INTRODUCTIONThere has been an increase in attention paid to management of key account programs by both academics and practitioners. As Schultz, R. J. and Evans, K. R. (2002) indicated, developing long-term sales relationship with large-scale buyers has become of paramount to marketers.Many customers today are faced with powerful and more demanding customers. As a result, key account management is an approach adopted by selling companies aimed at building portfolio of loyal key account by offering them, on continuous basis, a product/service package tailored to their individual needs. Many academics draw attention to the fact that success depends, to a high degree, on the strategic importance to the customers of what is being supplied, and the level of receptivity demonstrated by the customer to a partnership approach, as well as the skills of suppliers in meeting customer needs. (McDonald, M. et al 1997, Homburg, C. et al 2002, and Sharma, A. 1997) Furthermore, these large customers often rationalize their supply base to cooperate more closely with a limited number of preferred suppliers. As Homburg, C. et al (2002) indicated, as a result of increased cooperation and dependence, these customers may demand special value-adding activities from their suppliers, such as joint product development, financing services, or consulting services. Also, many buying firms have centralized their procurement and expect a similarly coordinated selling approach from their suppliers.As Pardo, C. (1997) noted, the extreme importance of these accounts which frequently have highly different structure and complex behavior (geographically dispersed, located in many countries, require specific procedures, etc.) led suppliers to move from traditional management forms to more sophisticated techniques in order to increase the level of quality and commitment to those strategic customers. Furthermore, many authors emphasized the importance of developing the special programs for each customer identified as the key account in order to retain them through increased satisfaction and based on the reputation developed from such actions generate new customers. (Ojasalo, J. 2002, Pardo, C. 1999a, Sharma, A. 1997)However, Homburg, C. et al (2002) argued that although the increasing emphasis on key account management is one of the most fundamental changes in marketing organization, sound academic research referring to the designing KAM in practice is still too limited. Millman, T. and Wilson, K. (1996) noted that key account management is under-researched and its efficacy, therefore, is only partially understood.2.SELLING COMPANY'S PERSPECTIVE - Selection Of Key AccountsAs Millman, T. and Wilson, K. (1999) and Pardo, C. (1999) indicated, the selection of those customers who are of strategic importance to the future of the selling company is a fundamental requirement. These customers are identified to be of strategic importance according to their specific characteristics (structural)...

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