Customer Relationship Management at Waitrose - Research Paper Example

 Customer Relationship Management at Waitrose TABLE OF CONTENTS TASK-1 INTRODUCTION 3 Waitrose 3 Market Overview 4 TASK- 2 CUSTOMER RELATIONSHIP MANAGEMENT 5 Identifying Customer 6 Relationship Management 7 Customer Relation Management 8 Critical View 9 Secondary Research 9 TASK- 3 WAITROSE AND CRM 10 Identifying Customer Relationship Strategy 10 Analysis on Waitrose CRM 10 Secondary Research 12 TASK- 4 CONCLUSIONS AND RECOMMENDATION 13 References 15 TASK – 1 INTRODUCTION In a very competitive marketing environment, Customer Relationship Management can effectively work out for the companies in order to maintain a long term relation with customers and thus to enhance competitive advantage. It is an asset that provides increased profitability as well. This management approach places the customer in the centre of the business processes, activities, culture and all in all. This work provides a case analysis on Waitrose and its application and implication of customer relation management. It observes how did management activities that are taken by Waitrose in order to retain customers through customer relation programs and more specifically through e-CRM bring better outcomes. This work provides a brief study about the principles and its instruments to be used by companies. Waitrose Waitrose is a strong brand name in the growing UK grocery market operating through over 180 stores and employing more than 27,000 employees. Most of their stores are located in the southeast of UK. Waitrose, with its policy to consistently provide highest quality of services for its customers, has become a leading food retailer in the UK market with partnership of John Lewis. The company has an annual turnover of more than £2,900 with an increase of 10% over the previous year. With a mission to combine the convenience of the store with the expertise and services of a specialist shop, it offers price commitment to ensure its customers always to get fair value for money while shopping at Waitrose. Waitrose has focused on a different marketing strategy by targeting the upper end segment with a varying range of premium quality and own branded products. Its strategy gives significant importance to ‘food excellence’ as it offers competitive food products in terms of premium quality. It has also focused on selling fine wines and fresh drinks that can be bought from specially arranged counters. Apart from all these, the customer relation strategies put forward by Waitrose form part of its exceptional strategic plans and processes and it enabled them to be more customer oriented so as to achieve greater results in its marketplace. Market Overview UK grocery market has become more intense in recent years having greater impacts of fierce competition on both businesses and customers. Tesco continues to hold the leading share of 27.6% over all of its competitors operating more than 2000 stores only in UK. According to 2007 reports, UK grocery market has been accounted for about £118.2bn market, of which 65.4% has been shared by large four retailers namely Tesco, Asda, Sainsbury and Morrison. Tesco and Marks and Spencer have remained far potent and forceful through its customer-driven approaches. Even though it is hard to weather the storms of severe competitions and innovative strategies by competitors, Waitrose continues to strengthen the market share with more customer oriented and customer relations approaches. Waitrose holds 3.3% of the UK grocery market. It had created proposition based on the quality of goods and services provided, ethical trading and value-driven strategies. TASK - 2 CUSTOMER RELATIONSHIP MANAGEMENT Throughout many years corporate strategies focused their business and marketing efforts mainly on reducing the expenses and maximizing the profits through internal efficiency. But, recently, the whole business strategy turned towards gaining business goals by focusing on external factors like customers. The customers have then been considered to be the ‘boss’ and thus business strategies and decisions regarding marketing and product specifications have been influenced largely by customers. Even though the basic principles of customer relationship have been in practice for long time by some small businesses, Customer Relationship Management (CRM) became popular during mid 1990s. The marketing strategy practiced by small businesses like personal contacts between buyer and seller are not so achievable and beneficial for larger businesses. The basic concept of CRM is that maintaining a long term relationship with customers can be one of the effective tools for a business organization in order to achieve long term business goals by providing competitive advantages Identifying Customer Identifying the customer plays basic and foremost role in Customer Relationship Management. Recognizing customers need, wants and changing attitudes can bring better outcomes for a business. It includes collecting data regarding customers profile and then making use of it for taking customer oriented business strategies. It is obvious from the fact that many companies have developed database in order to capture customer information and thus to use for customer-driven business strategies. Bryan Foss (2001) emphasizes that many companies have increased their database including customers’ profile, demographics, products they purchased, responds towards certain products and features. This data has been used by management, strategic decision makers, sales people and others to determine market trends, customer preferences, service and helps required by customers etc (p. 3) In identification process, the management deals with analyzing current customer base and opportunities that can be explored through customer orientation. Customer Relationship Management may use SWOT analysis to identify customers and factors that can be largely influenced in the marketplace. Through SWOT analysis, managers would be able to identify current strengths and weaknesses and opportunities and threats both internally and externally that business faces in regard to its customers. By identifying the threats and weaknesses, the planner can prioritize the issues faced by organization in relation with its customers and to develop general direction of the customer-driven strategy. Relationship Management Relationship Management (RM) has been considered as an alternative strategy to the traditional marketing mix concept. Relationship Management refers to establishing and maintaining relationship with customers and other stakeholders. In the relationship management, deciding whom to have relations is highly important and functions as a planning stage. Even though RM mainly focuses on customer, a long term mutual and committed relationship with other stakeholders like suppliers and other market people is imperative in the relationship management. The six markets model suggested by Christopher (1991, p. 21- 31) hs gained wider acceptance by most strategy managements. This model comprises of customer markets, internal markets, referral markets, supplier markets, potential employee markets and influence markets. Internal marketing relation deals with treating individuals and departments within an organization as customers and suppliers. Fig- 2 source: (Edward Little, 2003) Referral markets comprise referral and advocates and influential markets include governments and financial institutions that potentially influence the market. Employee market comprises of those who may potentially work for the company. Customer Relationship Management In the relationship management concepts, customer retention has been widely agreed up on. When a business adheres to customer orientation concepts and operating from the Relation Management structure can enable business retain their customers by gaining their loyalties. Through long term orientation the relationship management assesses and evaluates the business success in terms of how long a customer influenced to have in good relations with company and thus to achieve business goals. The customer retention strategy become more significant day by day as it enables a company even o reduce costs and to gain profitability. An increase in the customer retention leads to decrease sales costs and to increase sales. Retention creates ‘repeat purchasing behavior’ and it directly increases the profitability of a business. Providing e-business has been considered to be an efficient form of customer relations management program that enables business to communicate with customers and to maintain personal contacts. Same time, it facilitate convenient shopping for the customers. The business would be able to keep on touch with customers through emails, company broachers and other information. Through e-commerce, business is able to provide more customer services. Christopher (2002) says that the concept of customer-service is wide ranging as it relates to the totality of encounters between suppliers and buyers. “It extends from the pre-purchase stage of customer engagement, through to the transfer of the offer from the supplier to the customer and continues through the life-cycle of usage” (p.7-8). Edward Little (2003) has suggested that creating a life time value of the customer is a basic element in Relationship Management (p.29). The business management should identify the life time values of a customer through continuous researches, data collection and analysis. Secondly, the management should forecast the future relation between customers and business. It is a process of forward looking in order to structure the company’s strategies related to production, product features and specifications and customers’ levels of satisfaction based information collected. The management, next, calculates customers’ life time values so as to identify those with whom it would be comparatively more profitable for the company. According to martin Christopher (2002), customer services and quality of the services provided play crucial role in relationship management. “Marketing is concerned with ‘exchanging relationship’ between the organization and its customers, and quality and customer service are key linkages in these relationships” (p. 8). The relationship flow and customer value not only include either product specification or features, but also a number of intangible benefits related with quality of services provided are highly important. The management should focus on identifying the customers’ value and choosing them and thus facilitating to provide those values. Regarding values and satisfaction, there should be a right flow of communication system as well. Secondary Research This analysis depends on secondary information gathered from different sources. The research data includes readily available sources like books written by various experts in the filed. The list of books depended for this work is given in the reference page. Google and Yahoo are of great help for this work with search terms like Customer relation management+ CRM+ Waitrose+ marketing etc. Critical View Customer relationship is a strategy to capture the market more easily, but it does not necessarily give emphasis on social responsibilities and business ethics. Some of the companies, even when they gain success through highly innovative customer oriented activities, fail to perform fair-trade activities, social responsibilities and adhere to business ethics. TASK- 3 WAITROSE AND CRM Identifying Customer Relationship Strategy Waitrose has been successful in identifying its customers values and thus to create effective relationship with its customers. Waitrose identified more affluent AB and C1 groups of customers who turned to spend about 60% in Waitrose. Waitrose was successful in appealing these targeted segments due to its strong customer service principles. How did Waitrose identify their customers and how accordingly they managed their marketing activities can be well realized from their internet business and other customer oriented services like facilitating entertainment shopping through ‘getting married’ and ‘fun filled children parties’ and so on. Analysis on Waitrose CRM Waitrose provides premium quality services throughout its stores and focuses on providing customer care services. According to a survey, During 2008, Waitrose scored 87% in the poll of 77 retailers who were rated on convenience shopping, customer service, experience and products (BBC, January 2008). The Online-Business can effectively reach customers beyond the immediate catch areas and segments who only visit the shop and purchase infrequently. Waitrose has been using internet to reach potential wine and other consumers in other parts of UK. Waitrose has achieved great success in attracting more customers from different parts of UK through its online businesses and to retain customers through its premium quality products and services offered throughout its stores. Very recently, Waitrose has launched a direct marketing and digital campaign to promote its online customer engagement programs. Waitrose designed a program called ‘club for food lovers’ aiming at engaging customers with a series of events both online and offline events. These programs include product tasting and webcasting. Through direct mail and email programs, Waitrose proposes to increase loyalty and provide opportunities to the customer to involve actively in service and product development. Through these programs, Waitrose aims to create healthy relation with its customers as part of their customer relationship management. Through this newly designed online experience, customers would be able to provide feedback on everything Waitrose offers to the customers. The Waitrose website itself seems to be a joyful entertainment because, apart from different entertainment programs, the website enables customers from different parts of UK buy super quality wines. Customers have wide and unique choices of 1200 wines with search option where customers can search for items by filtering key words. ‘Getting married’, ‘Fun filled children parties’, and ‘Partly planning’ are some interesting entertainments offered to the customers. Customers would be able to place large orders to make parties and programs joyful and more colorful with Waitrose brands. Waitrose, as part of its email customer services and online business, has launched e-CRM program during 2008 (U talk marketing, 2008) This was created by integrated agency called Kitcatt Nohr Alexander Shaw who has been tasked by the company to create an effective customer communication program in order to maintain a friendly relationship with its customers and thus to maximize the database potential. Through this e-CRM program Waitrose aimed to undertake successful tactical email marketing by creating public awareness and customer interaction. Same time, the monthly bulk mails sent to customers help customers to know about new features of goods and services offered. Waitrose’s decision to implement and to update EPOS in almost all of their stores also forms part of its strategic thinking towards maintaining a customer oriented servicing. EPOS enables them to provide more facilities to the customers so that they can do convenient shopping at Waitrose. Secondary Research The Task- 3 part of this research analyses application and implications of customer relation management at Waitrose with the help of secondary information collected from different sources. The secondary sources include Waitrose.com, Financial Times, BBC, the economist.com, utlkmarketing.com and other websites. Google and Yahoo also have been used for this research with key words like Customer relation management+ CRM+ Waitrose+ marketing etc. TASK- 4 CONCLUSION AND RECOMMENDATION Customer Relationship Management is clearly a strategic concept which has received increasing attention in recent years. Identifying customer behavior and emerging needs is highly important in customer relationship management as it paves ways to the management how the company’s activities to be performed in regard to customer relation. Customer relation is not a tactic to attract more customers or retain the existing customers, but it should be viewed in a broader perspective that the relation between customer and supplier should be providing lifelong values and fulfilling social responsibilities. There are businesses that fail to perform effective relation management system due to failure in using instruments for decision and management or due to lack of proper communication channel. Companies should concentrate on both effective relation management tools and innovative communication measures. This case study paper outlines principles and practices of customer relation management. Various approaches of different authors are included in this work. It provides a detailed analysis on Waitrose marketing environment and business strategies that they have taken in order to maintain healthy relation with its customers. How an efficient customer relation can work out can be well identified and observed from this case analysis of Waitrose.   References Christopher M, Payne A, and Ballantyne (2002), Relationship marketing: creating shareholder Value, Butterworth-Heinemann Evans M, O'Malley L and Patterson M (2004), Exploring direct and relationship marketing, Cengage Learning EMEA Foss B and Stone M (2001), Successful Customer Relationship Marketing: New Thinking, New Strategies, New Tools for Getting Closer to Your Customers, Kogan Page Publishers Halinen A (1997), Relationship Marketing in Professional Services: A Study of Agency-client Dynamics in the Advertising Sector, Routledge Hennig-thurau T and Hansen U (2000), Relationship marketing: Gaining competitive advantage through customer satisfaction and customer retention, Little E and Marandi E (2003), Relationship marketing management, Cengage Learning EMEA Payne A, Christopher M and Peck H (1998), Relationship marketing for competitive advantage: Winning and keeping customers, Butterworth-Heinemann Springer Payne A, Christopher M and Peck H (1999), Relationship Marketing: Strategy and Implementation, Edition: illustrated, Butterworth-Heinemann BBC.com (January 2008), Waitrose leads in customer Poll, BBC.com, Retrieved from http://news.bbc.co.uk/2/hi/business/7206578.stm Utalkmarketing (Feb 2008), Waitrose, a taste of e-CRM, Retrieved from http://www.utalkmarketing.com/Pages/CreativeShowcase.aspx?ArticleID=4169&Filter=0&Keywords=waitrose&Order=LATEST&Page=1&Title=Waitrose_%27A_taste_of%27_e-CRM Read More