Bus354 Customer Relationship Management : Assessment Answers

Task 1:

Relationship marketing and customer retention

1. 1. Evaluate how relationship marketing can help to retain customers.
   2. Application of Key customer relationship managements CRM models (Theoretical and not referring to Morrisons in the case study)
      1. Between relationship marketing and customer retention what is their similarity.
      2. Why, What & How is that useful to use this model to retain customers
      3. Why are model useful to evaluate.

Evaluation of customer relationship management process

1. 1. Using IDIC Model to evaluate Morrisons in last time base on the case study.
      1. Identifying: Did Morrisons identify their customers in the case study?
      2. How well is Morrisons identifying customers?
      3. Compare with Morrison’s competitors of their current situations.
      4. Discuss areas for recommendation where Morrison in the past.
      5. Compare and Contrast in critical writing (Issues & Comparisons)
   2. Evaluate how effective Morrisons is in retaining its customers compared to TWO Main UK competitors currently.
   3. Flexibility to use a variety of models such as Gummeson, Peppers and Rogers etc. to Evaluate and recommend best practice.

Task 2: (Solely base on Morrisons in the case study)

Morrisons’ customer value chain and value proposition (Only case studies on theory)

1. 1. Application of Customer value chain (CVC Model)
   2. Focus upon the 5 primary stages of CVC as outline by BUTTLE
   3. If Morrisons had applied CVC on case study, have they done well? If not good enough, suggest full recommendation.
   4. Outline how Morrisons could apply Relationship Marketing concepts in order to increase the total value propositions of the new loyalty card.
   5. Loyalty card in case study = value proposition (7Ps) focus only those relevant in the case study.

Task 1

Introduction

This report shall describe the “Morrisons” business, its business environment and relationships with the market. A business that started from a “Stall” in Bradford Market has now become a family business. It’s been more than a century, 100 years ago, when Sir Ken Morrison at the age of 55-year started this tremendous business and he worked hard to make it successful until he retired in 2008.  The position of the stall has improved with determination, hard work, and consistent efforts, to a “Superstore”. Morrisons is now working under 450 Stores in the United Kingdom and is the fourth largest food retailer shop.

Relationship marketing

At the core of the relationship, marketing is the need to form an association with the customers which last long. Companies and many businesses have established the need to have consistent customers to their products. Creating of customer-business relationship discourages one time buying and therefore establish business loyalty (Masoom, 2012).  Business can only establish this bonding by the provision of the needed service and quality goods to the customers when they require.  Business-customers relation supersedes the single transaction and therefore once established it cut the advertisement cost of the business. Relationship marketing involves the refined ways of conducting business to meet the value expectation of the customer and constant improvement of operation within the business (Kamakura, 2005).  The bond between customers and business is usually frustrated by the poor customer service thus streamlining operations for the satisfaction of the customers makes them happier even when the products are faulty.

Relationship marketing has been boosted by the technological advancement. Customers can disseminate important information to the companies and in return, companies can analyze and track information presented by the customers. By use of technology, customers can get aftersales services, notified of special deals and personalized advertisements because of the loyalty. The establishment of a brand makes customers have an association with a company. Customers are less likely to changes brand if it gives them an identity. Every business typically invests in relationship marketing in the quest to retain customers and draw new ones. With the increased business competition, the sure way to maintain relevance in business and to climb in the business is by holding to the existing customers (Masoom, 2012) 

Customer Relationship Management (CRM)

Models are helpful to understand the Relationships of Management and Customers. Managing the best relationships is the core objective and the main purpose of any business. The idea for CRM models was evolved in early the 1970s.Talking about Relationships Management; Good Customer service directly influences the improved strategies, business performance, and business growths. When a positive response is received, this would help the business delivering even better customer service. This can only be achieved if a better system of appraisal and the relationship for management is considered as the main thing which the business must keep over other priorities. Customer relationship models (CRM) seek to acquire, develop and retain and maintain customers and their satisfaction (Buttle, 2016).

There are three CRM models which can be used in businesses, these are the IDIC model, CRM Value Chain Model, and QCI model. IDIC model is the most used approach in customer relation. The concept was developed by Rogers and Peppers. This model advocate for the usage of interaction, identity, customization and differentiation to keep and building long –term relationship with the customers. Business needs to identify the real customers and their taste and preference in order to serve them profitably. Once customers are identified, the managers of the business should differentiate the based on need and value. Customers value in the business vary, some have immediate value while others give business value after a period of time (Masoom, 2012).

 In IDIC model, customers are categorized based on the need they have during transactions with business. Realization of these different needs gives business operators a better point of interaction with the customers. Companies ought to value customers need and value, this can be enhanced by interaction with customers either physically or by the use of technology. Calling and requesting customer feedback makes them feel valued and appreciated and gives them an impression of business want to satisfaction. When customers values and needs are differentiated and constant interaction is given, then the business should customize the service and goods. Customization gives conviction of ability to meet customers’ needs (Kamakura, 2005).

QCI model depicts activities which are pivotal to acquire and retain customers. The model use technology and people engagement to perform the processes. The relation between business and external environment affect the business operation. Customer experience also influences the measurement of service rendered, customer proposition and customers’ management activities. The final model (CRM Value Chain Model) involves the bringing of IT and marketing. This model help to sales and service giving through the IT (Masoom, 2012).CRM is a well-established model which is easy to integrate into the development of customer relationship marketing.  CRM value chain builds a network in which every member are obligated to work together to ensure value for customers.

Customer Relationship Management process (IDIC)

The position that today Morrisons has achieved, is because of the facts that make it differentiating from other competitors. While discussing the Relationships and the Customer Satisfaction, Morrisons has always been keen to this main thing as it believes that Customer Satisfaction is the core fact that can help a business to well established and different from the competitors. Morrisons believe in “Simple Customer Satisfaction strategy”, that is “By Developing the Best-trained and motivated colleagues within the business environment, the best customer service can be provided”. This strategy also works in the environment where there are larger competitors (Billingto, 2009).

Morrison believes in identifying the customers in the business. This can be analysed by the business strategies of Morrisons. They have specialized Sales personnel, bakers, fishmongers are the positions that help make Morrisons better customers’ satisfaction and they try their utmost to get feedbacks and identify their customers. They are building and best identifying customers and their relationships with them by best strategies which also helps them in their competitive advantages.

Apart from the customer satisfactions, Morrisons are also making their competitors lose their business plans as Morrisons are making best strategies that make them different from the competitors. First of all, Morrisons have employees who are more sincere to their employee than any other food retailer in the UK. Morrisons believe in making employees happier. In recent past, more than 1.3Million people were there in serving Morrisons best services Serving over 11 Million Customers each week. Now, this can only be done if they provide career opportunities and a variety of areas like manufacturing, IT, finance and trading.

Morrisons also provides 1000 new people to join next year. This planning has made Morrison satisfied in recent past when they were awarded the Grocer Gold Award, “Employer of the Year.” The business of Morrison has just been grown keeping the following improvements in line with their strategies. Morrison has invested in the following area:-

• Information to Customers

 By providing customers better information, a business can make its customers loyal to its name and ultimately to its products. Information can also be in other ways like in business places, in stores, directions and signs may help customers avoid from getting betrayed.

• Specialist Attention

Before attaining something, the customers often look to gain some specialist attentions to avoid any inconvenience.

• After-Sales Service

This opportunity removes the fear of long investments and helps increasing revenues of the business.

• Convenience

Readily available access to customers, facilities of parking, readily access through public transports as well can also help enhance credibility and recognition of the business.

Morrisons can easily be differentiated from its competitors. First, it has introduced first time that customers earn points over the shopping and increased customers’ loyalty after it established its name in the UK and now every person is aware of Morrison also because of the fact that they have also established well-trained employees who make their customers satisfied. The other thing which can be classified as one of the differentiating points is the “One-Team” approach. This approach helps their employees’ sincere and friendly environment makes every moment spent is the premises, a happier one.

Asda and Sainsbury are the cheapest supermarkets in the UK. But Still, Morrisons are earning respect. The best thing that Morrison would never be willing to lose is their Products’ Quality. The Quality of the products which they sell is the best one in the area of their service. The other that is helpful to Morrison are the areas of Improvements in which Morrison has always been willing to invest. Like they are always willing to inform the customers, offer specialized services and readily access to the customers.

Morrisons shall always be willing to use the Model that suits best to their customers’ reliability over them. They shall be willing to use Gummeson, IDIC models but the ultimate objective shall be to achieve the target of Customers Satisfaction. The better the Customer Service, the better the business would grow. To ensure better customer service, there is a need to establish better Relationship and environment in business premises. Morrisons offers training and development opportunities. The company has specialized in in-store butchers and bakers ensure specialized services to the customers.

Due to this greater strategy, Morrisons withstood the competition in the markets. Training helps to influence the business directly, it assures customers satisfaction thus giving business a competitive edge. It helps individuals in enhancing and developing their skills. The quality customer service makes the customers who visit Morrison feel valued and come repeat customers. To guarantee customer satisfaction, Morrisons offer services which are not given by the competitors making the business have maximum customer retention. The employment of specialist in Morrisons gives customers information which is accurate and readily available when needed.

Conclusion

Morrisons has been a victim of escalating supermarket price war in its new “Match & More” card. The focus was to match the prices of products with that of the Germans. They did also face a fall in Sales Revenues by 3.8% in the period of 12 weeks that was September-December 2014. To make this comeback, the loyalty cards were issued by Morrisons to make customers convenient and encouraging them to shop more frequently to earn points also and vouchers. The card did help to gain the customers data and to target shoppers and customers with loyalty cards. They can manage to increase their Sales Revenues just by making a drive to their own way.

Task 2

Introduction

Morrison must create the value proposition for its customers as it allows better business streams. Morrisons must ensure better and increased customer service that would allow achieving value proposition for the customers. The way in which it needs to work is the focused and developed team members with advanced and credible emphasis. They are an integral part of the customer service which Morrison must achieve. The higher level of customer service ultimately leads towards the Satisfied Customers and repeated trades. Customers then shall visit Millions of times to the mega store.

Morrisons’ customer value chain and value proposition

Customer Value Chain (CVC) is a tool that enables design teams in the product definition phase to comprehensively identify pertinent stakeholders, their relationships with each other, and their role in the product's life cycle. It represents the creation of value for a customer.  Another interpretation of this value chain puts the emphasis on steps taken to retain existing customers. The value chain is used by strategist in business to reduce cost when doing necessary activities and in return advance the performance of the same activities. To improve performance, customer value should be considered by examination of the customers’ value chain. Generally, customer endeavour to reduce cost and to have quality products (Merritt, 2016).

The principle of CRM value Chain has identified five steps which lead to the implementation of the CRM strategy (Buttle, 2016). These are the five primary stages as identified by BUTTLE are

(I)-Customer portfolio analysis,

This step involves identification of the potential and actual customer which the business can serve. Significant customers generate the value in the business in future. These bunch of customer top the list in strategic planning and many business adjustments should be done for their favour.

(ii)-Customer intimacy,

The organization doing CVC analysis needs to identify the requirements, history, preferences and profile of the clients they will deal with. This help in planning ways to meet their needs adequately and there become return customers (Maynard, 2016).

(iii)-Network development

Company network involves people who are involved in the daily running of the business. They can be internal members or external contributors such as partners of the business, supplies or even the investors in the business. The network operates harmoniously to create of contributing to the value proposition of customers. To do a CVC analysis, the concerned should identify and manage the relationship of company and the network members.

  (iv)-Value proposition development

Business should identify what gives value to the customers and then formulate an experience which will likely meet the customer requirements and expectation. Many customers are attracted my branding and aftersales services, once this has been identified the development towards sustaining these retain the customers

 (v)-Manage customer lifecycle.

The lifecycle of customers encompasses the transition of customers from suspecting product sold and service rendered to the full advocacy of the status of the business. To succeed in this journey business has the responsibility of ensuring process to satisfaction is in line with customers preference and choice. The process of management involves the customer development. Retention and acquisition of new ones. This process need structure of managing the relationship with customers (Buttle, 2016).

The steps stated above are repetitive and are implemented continuously. Review of customers in the business is done periodically as a function of increasing competition. Interdependencies of the steps are undefined by sequence, customer analysis may determine the value position. Lack of competence in the business should also necessitate a review of the target market in order to remain relevant (Billingto, 2009).

An evaluation of the company operations, the Morrisons business appreciated the CVC strategies. At the exit of the business, the customers are regularly requested to fill comment forms which depict their experience in the shops. This qualitative approach is used to measure the business position in customer satisfaction and gather opinions on the possible areas to improve. This is basically a major component of customer portfolio analysis. The management has devised ways of managing customers by rewarding regular petrol consumer in the shops. This strategy makes customers be loyal and retained. HOT initiatives make regular buyers have offer times in the shop. By so doing, the Morrisons shops manages customers’ lifecycle effectively.

Morrison’s businesses have developed one team approach. This strategy focuses on the creation of a network in the business. Correlation of workers ensures that there is minimal competition in the departments and that all efforts in the business are channelled to customers satisfaction hence profit in the business. The staff who are recruited are also given the needed training to ensure competence in service delivery. Skilled workers can easily create and develop the customers’ intimacy (Zucchi, 2014).

If Morrisons plan to implement these 5 primary levels, it would enable to provide themselves a Platform to increase customer value to the Business. These levels must be kept in line with its business plans and also the business strategies must be according to the Suggestions.

Morrisons can enhance relationships with the help of newly loyalty cards by making them readily available to the customers. They must be an improved system for the online registration to avail the system. Any error must be dealt within few moments to provide an unbreakable connection. Getting the details must be in a manner that no person could even found the details to whom he is not related. The information provided must be confidential. The cards must be provided to door-steps. This would also help in increasing business credibility (Richard, 2007).

To strengthen the relationship, the loyalty cards must have some annual opportunities and rewards. Total Value Proposition can be increased through the loyalty cards by providing customers some incentives over shopping through the cards, like few cents would make customer happier just by doing nothing.

Value proposition (7Ps)

Business relevance and survival ability depend on how it handles the value proposition in the market. Identification of potential customer summarizes a market. The 7P’s help marketer to define the value proposition and also alter it if need be, in other words, using the concept can attract new clients, make more money and grow the business. A product can be repainted, spiced or simply given new package and in return attract more buyers who have different preferences. The value proposition is, therefore, the ability to reach customers with the needed products at the time of need and sell the products at affordable prices in the right place (Maynard, 2016).

The products sold at the Morrisons shops are of high quality and this gives the business an advantage over the competitors. The food at the shops is always fresh giving customers an attraction. However, the price of a commodity in the shops is relatively high compared to Asda this exposes the Morrisons to a competition. The shops have parking place for the card holder, this makes them have convenience for shopping. Regular promotion by the business gives it frequent customers. The HOT initiative serves to retain frequent buyers. Attendees of clients in the Morrisons shops are specialist butchers, bakers, and fishmonger. This guarantees quality service to the customers and finally, the location of the business ensure one stop shopping. It is true that the 7P’s are well applied by the management (Funck, 2017).

Conclusion

Morrisons need customer value propositions, they are incurring consumer wrath by projecting somewhat bread on Angel of the North, if they start addressing what value means to the consumers, they could enhance the value propositions (Billingto, 2009). The benefits which are assumed by the customers should be maintained and ways to bring new clients in the business should be expanded. The price of products from the shops should also be revised to ensure the competition from Asda and other marketers is reduced to reasonable levels. However, it does need some marketers to figure out a differentiated value proposition. Although Morrison is the best supermarket in the UK and every act of the business ultimately proves a value addition to the Store.

References

Billingto, C., 2009. THE CUSTOMER VALUE PROPOSITION , Lausann: IMD.

Buttle, F., 2016. CRM Value Chain. [Online]Available at: https://www.studymarketing.org/articles/Managing_CRM/CRM_Value_Chain.html[Accessed 29 05 2017].

Financial Times, 2017. WM Morrison Supermarkets PLC. [Online]Available at: https://markets.ft.com/data/equities/tearsheet/summary?s=MRW:LSE
[Accessed 02 05 2017].

Funck, C., 2017. 7Ps serie – part 1: Are you applying the correct value proposition for your business?. [Online]Available at: https://webreserv.wordpress.com/2017/02/23/are-you-applying-the-correct-value-proposition-for-your-business/[Accessed 29 05 2017].

Masoom, M. R., 2012. Effects of Relationship Marketing on Customer Retention and competitive advantage. [Online]Available at: https://pdfs.semanticscholar.org/223c/18d15e82813c3471790166877db5781e117f.pdf[Accessed 29 05 2017].

Maynard, K. A., 2016. What is the Value Proposition of Supply Chain Service?. [Online]Available at: https://www.womeninsupplychain.org/wp-content/uploads/2013/02/130201-CSCSC.pdf[Accessed 29 05 2017].

Merritt, C., 2016. Value Proposition vs. Customer Value Proposition. [Online]Available at: https://smallbusiness.chron.com/value-proposition-vs-customer-value-proposition-76843.html[Accessed 29 05 2017].

Richard, G., 2007. Catalog of Copyright Entries. [Online]Available at: https://onlinebooks.library.upenn.edu/cce/1966r.html[Accessed 03 05 2017].RMN, M. L., 1995. Staffing Levels and Selection. Journal of advanced nursing, 22(6), pp. 1019-1223.

The Journal , 2014. Morrisons unveils 4.2% sales slump. [Online]Available at: https://www.thejournal.co.uk/business/business-news/morrisons-unveils-42-sales-slump-7094115[Accessed 03 05 2017].

Zucchi, K., 2014. The Basics Of Value Chain Analysis. [Online]Available at: https://www.investopedia.com/articles/investing/111014/basics-value-chain-analysis.asp[Accessed 29 05 2017].