Mkt6001 Relationship Marketing- Consumer Retention Assessment Answers

Relationship Marketing and Consumer Retention

Relationship marketing is a modern marketing strategy that aims at creating a continuous lifetime income to the business. Its main strategy is to work towards long term customer retention by ensuring customer satisfaction and long term customer value. Relationship marketing is therefore very important in the modern business because it ensures business continuity through its loyal customers and therefore the business can survive through all the seasons (Ngo et al. 2010). Relationship marketing can be clearly distinguished from the traditional transactional marketing whose focus is on efficiency of selling a given individual product to achieve large volume sales because relationship marketing only focuses on getting correlation with the customers who will made loyal to the company for a long period of time or even for a lifetime. In as much as companies employ transactional marketing (Kimar and Reinartz 2012, pp 55-85), it’s also critical for modern businesses to employ relationship marketing since it ensures business continuity.

Relationship marketing entails activities that an organization works towards retaining its customers who can profit the organization through creation of a mutual relationship. The customer develops trust and confidence in the product or a service offered by the company and therefore feels mutual partner to the organization. Customer relationship is greatly dependent on their satisfaction in the product or service offered (Rezvani et al. 2011).  Every company should therefore work towards ensuring customer satisfaction since it is through this way that a customer develops trust and a good relation with the company and eventually is retained. It is therefore clear that a good customer relationship is important for every organization since it’s the one that leads to customer satisfaction (Kotler and Philip 2012, pp 25).

Customer Relationship Management Process for Morrison Company

Good customer relationship management is a key aspect for the success of Morrison’s company. The process employed should revolve around the customer to ensure that the customer feels mutual to the company and therefore retains loyalty to the company. A number of customer relationship process models are applied by the companies who seek to achieve the best customer relation. Some of these models include IDIC Model, QCI Model and CRM Value Chain Model. All these models try to achieve a good customer relation. IDC Model is the commonly used model. It covers customer identification, differentiation (in terms of value and need), customer interaction and customization. Customer identification is the first step in creating the best customer relation. It involves realizing who the customer is, where he lives, what the customer uses, the likes and interests of the customer and a lot more information about the customer (Voss et al 2010). In addition to this, this aspect of customer identification covers an establishment of customer satisfaction in the product or service offered. The company should establish that it is offering the right product as per the customer need. This is therefore important in creating the best customer relation with the company.

Morrison has put a lot of efforts in its process of customer identification. The company conducts surveys monthly in each company store. Quantitative surveys have played an important role in this process of customer identification. In addition to this, qualitative surveys are also conducted by the company through random sampling of stalls that are used as representative stores to get qualitative information such as the comments that the customers have. As compared to other companies like Asda, Morrison has made more efforts in the aspect of customer identification.

Customer differentiation is the second important aspect that every company should consider. This is a process that involves categorizing your customers basing on their value and needs. Basing on the value, the company identifies and categorizes customers into those that generates value now or those that will have value in future (Smith et al. 2010). On the hand the customers also differentiated and categorized basing on their various needs.  Morrison has tried to do customer differentiation through identifying and categorizing its customers. It has clearly identified its customers as those who buy from streets, from stalls and other places. This is a very important aspect for the growth of this company. Tesco as a competitor to Morrison has also done a lot to do customer differentiation. The company as customers as families, companies and other categories and therefore its able to reach customers at therefore own specific needs.

The third aspect in this model is interaction. Every company must make an interaction with its customers in order to achieve a good customer relationship. Morison uses its colleagues to achieve this. It hires talented and highly qualified people to achieve customer interaction. Morrison’s staff is well trained with keep eye to details and this has really helped in understanding the customers to achieve a good relation with them. They interact directly with all categories and levels of customers of according to their needs. This has made customers to feel that the company values them and it is really concerned with their affairs and therefore achieve customer loyalty to the company.

Lastly but not least, IDIC customer relationship model considers customization. The previous aspects in this model involved identification, their differentiation and interaction. Customization comes as the last stage in the model where the company develops a solution customized according to the type and needs of the customers. The company develops a customized product that suits the customer’s needs, expectations, environment and any other factor that is relevant for the product to suit the customer. Morrison as a company has put a lot of efforts in creating a good customer relationship. This has been creating products in smaller quantities and tastes as per the needs of their customers. As compared to Tesco, it can be seen that Morrison has not done enough of customization to satisfy its clients. Tesco has been able to customize most of its products, for example, Tesco launched new venture brands like Choka Bloka ice-cream shows there commitment to customization and general customer retention. In addition to this, the company has tried to make the customers to feel comfortable with the product prices (Shimizu and Koichi 2014). This has been through the match the price scheme that has ensured that the company delivers its products at the price that customers feel comfortable and have no thought of exploitation. It is therefore important for Morrison to invest more in this and ensure that products are customized as the user needs and expectations. This will help the company to make feel comfortable and mutual, which will help to achieve customer retention.

Recommendations and conclusion

As a recommendation, Morison should also improve efforts in promote its brand through embracing new technology such as push notifications, SMS and social media and other ways that ensures that the product information reaches the appropriate audience. This will greatly impact on the sales of this company since the consumers will have access to information of the product from their various points and channels. In addition to this, the company should improve on the personalized offers. This are offers which are made to specific consumers. They make the consumer to feel much closer to the company which intern improves on the customer relation.

2. Introduction

Morrrisons’ success in increasing the total value for its new loyalty is greatly determined by rightful application of customer relationship management system (Bagherzad 2011).  These stages are analysis of customer portfolio, intimacy with customers, network development and establishing the structure and process. The company should also rightfully apply the marketing mix to improve on the customer relation (Bain & Co. Inc. 2010).

CRM Customer Value Chain for Morrisons Company

The value proposition for Morrisons company new loyalty can be improved greatly if customer value chain concept is well applied in the process. This chain was suggested and explained by Francis Buttle and it starts with analysis of its customer portfolio, as the first step, followed by coming intimacy with the customer (Bain & Co. Inc. 2013). The third step is to develop network with or relation of the customers with the company and then value proposition development as the fourth step on the value chain. Managing of the customer’s lifecycle is the last stage on the chain and it involves process analysis of the customer chain and the structure of the organization (Tohidinia & Haghighi 2011, pp 242-256). If Morrisons Company will carefully follow these steps, the value proposition for its new loyalty card will be greatly increased.

To start with customer portfolio analysis, the company identifies and establishes potential customers to its products that will therefore be of value to the company. At this stage, the company also looks into the future to establish future potential customers. Some customers might not be of value to the company at the moment but they could be of value in future. It is therefore important for the company to consider them too. Morrison should also consider this aspect in order to improve the value proposition for its new loyalty card. The company should identify customers to the company and those that are likely to add value to the company in future. This will greatly help the company have a strong market base at now and in future (Bain & Co. Inc. 2010).

The second important step in the chain as suggested by Buttle is the customer intimacy. The company should become mutual to its customers in order to be able to establish some hidden information about those customers. This information could be realizing their identity and therefore understand exactly who they are. The information can also be the history of people since this can give knowledge that can help to establish trends or patterns that are useful to the company operation (The International Customer Service Standard 2009). Other customer information that can be established at this stage of intimacy, could know the customer requirements through understanding their preferences and expectations. Morrison should conduct this stage for its new card since its very important. With its qualified and talented staff, Morrison should comfortably deploy the colleagues to be intimate with the customer. This will be very helpful in understanding the customer in a deeper way and come up with the real requirements that suit the customer (Microlinks 2009).

Development of networks is the third stage in the value chain. At this stage, the company creates networks that are useful in the process of delivering value proposition. This could be identifying the suppliers who will supply the customers with products, and other partners who are useful in delivering value proposition (Shimizu and Koichi 2016). Network creation also includes partners and other investors that are key in delivering value proposition. Morrison should put efforts at this stage for the value proposition in its new loyalty cards. The company should partner potential suppliers who will in this. The fourth stage is the actual development of value proposition (Vence 2008). At this stage, the company identifies the source of value plan. The company should ensure that the proposition meets all the customer’s requirements and expectations. This should clearly match the requirements that were realized at intimacy stage. Morrison should also put efforts in developing value proposition. The company should customize its products suit its customer’s needs. This will greatly impact the value proposition for its customers (McDonald 2007).

Lastly but not least, the company should keep a careful eye on the process and structure. These are the basic items that have influence on the customer lifecycle. In terms of process, it should be to determine the strategies that are appropriate to sustain the existing productive processes such as customer retention and customer development (Slater et al. 2010). Morrison should have to sustain and retain its customers for its new card. CRM value chain process is not done at one time but it is a continuous and repetitive. It is therefore important for Morrison to review its strategy continuously. This will be important development and sustenance of the value proposition for the company (Microlinks 2009)..

Relationship marketing concepts helpful for Morrison Card

Every company succeeds in its marketing through appropriate application of the marketing concepts. These are called the marketing mix and they formed by a balance of a number of factors which are revolves around the product, price, place, product promotion, people, processes and physical evidence. These factors must be all be combined in order to get value proposition of any product. Firstly, product is a factor of consideration in the mix (Malhotra 2007).  The company should ensure that the product suits the consumer’s requirements and expectations. Morrison should therefore ensure that its products are designed for the consumers as per their requirements in order to get more out of this. Secondly, the mix considers the place. The company should ensure that the products are well placed and positioned at points where consumers can easily find them. (Belch 2014, pp 34). Morrison must be careful to ensure that this concept is well applied.

Morrison Company should consider pricing. The price should be in a way in that it is not so high for consumer exploitation or too low to bring loss to the company. This is important as it has a big influence on customers. Another factor in the mix is promotion. It is useless to have a product and fail to promote it (Capitanio et al. 2011, pp. 4149-4159). Promotion means ensuring the potential customers get access to the information about the product. In addition to this, Morrison Company should consider people factor in the mix. People involved in the process of delivering the product or can also be termed as the stakeholders. It should therefore identify appropriate people for the process in order to succeed in its endeavor (Shimizu and Koichi 2014, pp.63-102).

In the mix, the company should also consider process. This refers to clearly establishing the steps that are involved in delivering the value proposition to the customers. Lastly, the company should consider physical evidence as one of the factors in the mix (Blythe and Jim 2009). The company should seek to see physical evidence at every point where necessary. This is a key factor in marketing.

Conclusion and Recommendations

In conclusion, Morrison should rightfully apply the concept of value chain proposition in order to realize more profit and attain business continuity. As a recommendation, Morrison should handle carefully each phase in the chain since it has impacts on the company profitability. Morrison should also incorporate the 7P marketing mix concepts to Realize success in this business. In addition to this, the company should also consider productivity and quality as an addition factor to the 7Ps. This will positively impact on the profit of Morrrison.

References

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