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Netra Shetty
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Marketing Research of American International Group - March 29th, 2011

American International Group, Inc. (AIG) (NYSE: AIG) is an American insurance corporation. Its corporate headquarters are located in the American International Building in New York City. The British headquarters office is on Fenchurch Street in London, continental Europe operations are based in La Défense, Paris, and its Asian headquarters office is in Hong Kong. According to the 2008 Forbes Global 2000 list, AIG was once the 18th-largest public company in the world. It was listed on the Dow Jones Industrial Average from April 8, 2004 to September 22, 2008.
AIG suffered from a liquidity crisis when its credit ratings were downgraded below "AA" levels in September 2008. The United States Federal Reserve Bank on September 16, 2008 created an $85 billion credit facility to enable the company to meet increased collateral obligations consequent to the credit rating downgrade, in exchange for the issuance of a stock warrant to the Federal Reserve Bank for 79.9% of the equity of AIG. The Federal Reserve Bank and the United States Treasury by May 2009 had increased the potential financial support to AIG, with the support of an investment of as much as $70 billion, a $60 billion credit line and $52.5 billion to buy mortgage-based assets owned or guaranteed by AIG, increasing the total amount available to as much as $182.5 billion.[3][4] AIG subsequently sold a number of its subsidiaries and other assets to pay down loans received, and continues to seek buyers of its assets.

With the advent of customer relationship management (CRM) in the late 1990s, companies came to believe that by using technology to tailor their offerings to individual consumers' needs, customer loyalty—and company profits—would skyrocket.

But in today's crowded marketplace, customer loyalty is more elusive than ever. A recent McKinsey study reveals that the annual churn in the wireless industry increased from 17 percent in 1995 to 32 percent in 2000. This trend holds true even in industries less susceptible to turnover. In core retail categories such as department stores, for instance, the top players' market share declined more than 10 percent.

Not surprisingly, many executives' faith in CRM has waned. In a 2001 Bain & Co. survey of the 25 most popular management tools, CRM was ranked near the bottom. In a follow-up study, 20 percent of the 451 senior executives polled said that their companies' CRM initiatives had failed to deliver profitable growth and had damaged long-term customer relationships.

Tempting as it may be to point the finger at your CRM technology, that won't help you reverse these worrisome trends. It's quite possible that the problem isn't with your CRM technology at all but with the way you are collecting and using your data, experts say. Although getting your CRM program in order is an essential component of achieving customer loyalty, there's much more that you need to do.

"Marketers need a good, thoughtful architecture to base their decisions on," says Harvard Business School marketing professor Gerald Zaltman. A more strategic approach to data mining can provide the foundation for that decision-making architecture. Below, advice on how to use information about the individual customer and the average customer in concert, and how to probe beneath customer preferences and behaviors to uncover the attitudes that provide a more solid understanding of customer loyalty.

Why you need both individual and aggregated data
One-to-one marketing, a term coined by Don Peppers and Martha Rogers in their influential 1993 book, The One to One Future (Currency/Doubleday), focuses on share of customer: Using the insights about what makes your most loyal customers different to maximize the value of those relationships. By the end of the decade, many marketers had come to believe that the combination of mass customization techniques, sophisticated database software, and the Internet would enable them to actually deliver on the promise of customized offerings to each individual customer.

But that hasn't happened to the extent it should have, says Cleveland-based consultant James H. Gilmore, coauthor with B. Joseph Pine II of The Experience Economy (Harvard Business School Press, 1999), because "most practitioners have taken the concept of one-to-one marketing and bastardized it into CRM. They're using CRM tools to design better processes for a nonexistent 'average' customer, instead of customizing for individual customers."

He cites the example of a major hotel chain that asks guests to complete a multiple-question satisfaction survey via their room's TV set during their stay. When one guest answered "extremely dissatisfied" to all the questions, he was not treated any differently when he checked out. Why? Because his answers went straight to a central repository where they were aggregated with other customers' responses and used to measure overall market—not customer—satisfaction. A more effective approach would be to feed his answers directly to someone at the front desk who could respond immediately to his needs and create a better experience for him.

"A company's goal should be to learn more about what each customer needs so that it can close the customer sacrifice gap, which is the difference between what individual customers settle for and what each wants exactly," says Gilmore. Steve Cunningham, director of customer listening at Cisco, agrees that it's vital to listen and respond to individual customer needs and preferences. But he believes you must also pay attention to the aggregate data—customer averages based on individual surveys.

In a multinational market, the level of assimilation, and also the simplicity and rate of stream of supplies, are small, while public and local governments are influential and institutional investors are frail. Although for many products the world economy represents one market, saturation, together with a large number of competitors, cultural differences, and local government barriers and business practices, make competition around the globe rather complex.

The transformation of the world economy from a multinational to a global market has unleashed unprecedented competitive forces across national borders and local markets, dictating a new competitive paradigm and organizational structure for international businesses (Mourdoukoutas 1999).

Businesses are continuously developing. Multinational companies recognized the similarities between international markets and most of them tried it to integrate into the overall global strategy. Such changes actually affect the overall performance of a certain business. With this regard, this paper will be discussing the impact of global integration to a mobile phone service company. Global integration simply corresponds to the identification of similarities between international markets and integrates it to overall global strategy. Meaning to say, different variables in global perspective should carefully assessed by businesses who wanted to adopt global integration.

The primary drive of companies and firms to integrate globally is their intention or desire to expand and widen their target markets. The expansion and widening of the target markets of international firms indicates that the firm has enough resources to sustain and maintain its operations and production. Expansion of the company also indicates that the company has acquired enough knowledge in maintaining the operation of the company, thus, more learned and experienced in its own industry. This is a major factor to recognize, for with the desire to expand, the company aims for more profit and sales, which would enable to company to become more established in its industry. Second major factor to recognize and emphasize is the role of diversification, which is related to the presence of different cultures and races in the company. Several positive effects are attributed to diversification, and includes efficient resource allocation through internal capital markets, the increase in the ability of firms to internalize market failures, and increase in productivity (as cited in Li & Jin, 2006). In addition, diversification can also increase the generation of ideas, for more individuals become involved in the processes of the firm. Employees are also exposed to more cultures, practices and knowledge, thus, developing its organizational culture. Third major influence is the open opportunities for firms to engage in new business ventures, which would provide them with chances for more profit and prestige. New business ventures involve the production of new products or the innovation of a specific product or service. Fourth major influence or drive is the fact that firms may achieve fame or prestige if it globalize. The establishment of name, product/service, and reputation in specific countries and continents gives the business organization a chance to be regarded as one of the most successful business organizations in the whole world, thus, becoming more established in its own industry. Last major influence is the possibility of attracting new and more talents and skills in the company, which would give the organization the edge of performing well over other companies.

One of the perceived impacts or effects of global integration are the establishment of international alliances or coalitions, which link firms of the same industry based in different countries (Agnihotri & Santhanam, 2003). With international alliances, international policies and agreements will be established and reinforced, thus, effecting an increase in the establishment of harmonious relationships among companies. In addition, international alliances strengthens the industry where specific companies belong to, thus, reinforcing their bond that would enable them to come up with strategies for further improvement and development. Second impact of globalization is the development and improvement of the whole organization in order to address challenges or problems, for in line with the participation in globalization is the increase in the number of problems to be encountered (Agnihotri and Santhanam, 2003). With this, it can be understood that along with global integration is the need to develop, improve, innovate, and adopt new strategies and methods in relation to systems modification to enable adjustment to the changes and challenges being encountered by the organization. Modification and restructuring in the organization is needed because along with the company’s intention to expand and widen its target market is the need for additional workforce and management processes and styles that would enable the company accommodate the increase in changes. Restructuring and remodeling of the company, thus, serves to be a good way of adjustment.
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Re: Marketing Research of American International Group
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James Cord
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Re: Marketing Research of American International Group - March 4th, 2016

Quote:
Originally Posted by netrashetty View Post
American International Group, Inc. (AIG) (NYSE: AIG) is an American insurance corporation. Its corporate headquarters are located in the American International Building in New York City. The British headquarters office is on Fenchurch Street in London, continental Europe operations are based in La Défense, Paris, and its Asian headquarters office is in Hong Kong. According to the 2008 Forbes Global 2000 list, AIG was once the 18th-largest public company in the world. It was listed on the Dow Jones Industrial Average from April 8, 2004 to September 22, 2008.
AIG suffered from a liquidity crisis when its credit ratings were downgraded below "AA" levels in September 2008. The United States Federal Reserve Bank on September 16, 2008 created an $85 billion credit facility to enable the company to meet increased collateral obligations consequent to the credit rating downgrade, in exchange for the issuance of a stock warrant to the Federal Reserve Bank for 79.9% of the equity of AIG. The Federal Reserve Bank and the United States Treasury by May 2009 had increased the potential financial support to AIG, with the support of an investment of as much as $70 billion, a $60 billion credit line and $52.5 billion to buy mortgage-based assets owned or guaranteed by AIG, increasing the total amount available to as much as $182.5 billion.[3][4] AIG subsequently sold a number of its subsidiaries and other assets to pay down loans received, and continues to seek buyers of its assets.

With the advent of customer relationship management (CRM) in the late 1990s, companies came to believe that by using technology to tailor their offerings to individual consumers' needs, customer loyalty—and company profits—would skyrocket.

But in today's crowded marketplace, customer loyalty is more elusive than ever. A recent McKinsey study reveals that the annual churn in the wireless industry increased from 17 percent in 1995 to 32 percent in 2000. This trend holds true even in industries less susceptible to turnover. In core retail categories such as department stores, for instance, the top players' market share declined more than 10 percent.

Not surprisingly, many executives' faith in CRM has waned. In a 2001 Bain & Co. survey of the 25 most popular management tools, CRM was ranked near the bottom. In a follow-up study, 20 percent of the 451 senior executives polled said that their companies' CRM initiatives had failed to deliver profitable growth and had damaged long-term customer relationships.

Tempting as it may be to point the finger at your CRM technology, that won't help you reverse these worrisome trends. It's quite possible that the problem isn't with your CRM technology at all but with the way you are collecting and using your data, experts say. Although getting your CRM program in order is an essential component of achieving customer loyalty, there's much more that you need to do.

"Marketers need a good, thoughtful architecture to base their decisions on," says Harvard Business School marketing professor Gerald Zaltman. A more strategic approach to data mining can provide the foundation for that decision-making architecture. Below, advice on how to use information about the individual customer and the average customer in concert, and how to probe beneath customer preferences and behaviors to uncover the attitudes that provide a more solid understanding of customer loyalty.

Why you need both individual and aggregated data
One-to-one marketing, a term coined by Don Peppers and Martha Rogers in their influential 1993 book, The One to One Future (Currency/Doubleday), focuses on share of customer: Using the insights about what makes your most loyal customers different to maximize the value of those relationships. By the end of the decade, many marketers had come to believe that the combination of mass customization techniques, sophisticated database software, and the Internet would enable them to actually deliver on the promise of customized offerings to each individual customer.

But that hasn't happened to the extent it should have, says Cleveland-based consultant James H. Gilmore, coauthor with B. Joseph Pine II of The Experience Economy (Harvard Business School Press, 1999), because "most practitioners have taken the concept of one-to-one marketing and bastardized it into CRM. They're using CRM tools to design better processes for a nonexistent 'average' customer, instead of customizing for individual customers."

He cites the example of a major hotel chain that asks guests to complete a multiple-question satisfaction survey via their room's TV set during their stay. When one guest answered "extremely dissatisfied" to all the questions, he was not treated any differently when he checked out. Why? Because his answers went straight to a central repository where they were aggregated with other customers' responses and used to measure overall market—not customer—satisfaction. A more effective approach would be to feed his answers directly to someone at the front desk who could respond immediately to his needs and create a better experience for him.

"A company's goal should be to learn more about what each customer needs so that it can close the customer sacrifice gap, which is the difference between what individual customers settle for and what each wants exactly," says Gilmore. Steve Cunningham, director of customer listening at Cisco, agrees that it's vital to listen and respond to individual customer needs and preferences. But he believes you must also pay attention to the aggregate data—customer averages based on individual surveys.

In a multinational market, the level of assimilation, and also the simplicity and rate of stream of supplies, are small, while public and local governments are influential and institutional investors are frail. Although for many products the world economy represents one market, saturation, together with a large number of competitors, cultural differences, and local government barriers and business practices, make competition around the globe rather complex.

The transformation of the world economy from a multinational to a global market has unleashed unprecedented competitive forces across national borders and local markets, dictating a new competitive paradigm and organizational structure for international businesses (Mourdoukoutas 1999).

Businesses are continuously developing. Multinational companies recognized the similarities between international markets and most of them tried it to integrate into the overall global strategy. Such changes actually affect the overall performance of a certain business. With this regard, this paper will be discussing the impact of global integration to a mobile phone service company. Global integration simply corresponds to the identification of similarities between international markets and integrates it to overall global strategy. Meaning to say, different variables in global perspective should carefully assessed by businesses who wanted to adopt global integration.

The primary drive of companies and firms to integrate globally is their intention or desire to expand and widen their target markets. The expansion and widening of the target markets of international firms indicates that the firm has enough resources to sustain and maintain its operations and production. Expansion of the company also indicates that the company has acquired enough knowledge in maintaining the operation of the company, thus, more learned and experienced in its own industry. This is a major factor to recognize, for with the desire to expand, the company aims for more profit and sales, which would enable to company to become more established in its industry. Second major factor to recognize and emphasize is the role of diversification, which is related to the presence of different cultures and races in the company. Several positive effects are attributed to diversification, and includes efficient resource allocation through internal capital markets, the increase in the ability of firms to internalize market failures, and increase in productivity (as cited in Li & Jin, 2006). In addition, diversification can also increase the generation of ideas, for more individuals become involved in the processes of the firm. Employees are also exposed to more cultures, practices and knowledge, thus, developing its organizational culture. Third major influence is the open opportunities for firms to engage in new business ventures, which would provide them with chances for more profit and prestige. New business ventures involve the production of new products or the innovation of a specific product or service. Fourth major influence or drive is the fact that firms may achieve fame or prestige if it globalize. The establishment of name, product/service, and reputation in specific countries and continents gives the business organization a chance to be regarded as one of the most successful business organizations in the whole world, thus, becoming more established in its own industry. Last major influence is the possibility of attracting new and more talents and skills in the company, which would give the organization the edge of performing well over other companies.

One of the perceived impacts or effects of global integration are the establishment of international alliances or coalitions, which link firms of the same industry based in different countries (Agnihotri & Santhanam, 2003). With international alliances, international policies and agreements will be established and reinforced, thus, effecting an increase in the establishment of harmonious relationships among companies. In addition, international alliances strengthens the industry where specific companies belong to, thus, reinforcing their bond that would enable them to come up with strategies for further improvement and development. Second impact of globalization is the development and improvement of the whole organization in order to address challenges or problems, for in line with the participation in globalization is the increase in the number of problems to be encountered (Agnihotri and Santhanam, 2003). With this, it can be understood that along with global integration is the need to develop, improve, innovate, and adopt new strategies and methods in relation to systems modification to enable adjustment to the changes and challenges being encountered by the organization. Modification and restructuring in the organization is needed because along with the company’s intention to expand and widen its target market is the need for additional workforce and management processes and styles that would enable the company accommodate the increase in changes. Restructuring and remodeling of the company, thus, serves to be a good way of adjustment.
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