Key Account Management - Lterature Review

Essay by rajpenUniversity, Bachelor'sB-, March 2004

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There 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...