Customer Relationship Management with Special Reference To Organized Retailing In Pune City
By: Pravin Laxman Thorat
Assistant Prof. JSPM’s JICA, Pune
Thorat82@gmail.com, 9922947478
Scope of the Study
India is one of the largest retail markets in the world with a total of about 12 million retail outlets in the year 2003 (Euro monitor 2004). However, in terms of the retail space, it ranks as one of the lowest with about 2sq.ft. per capita. The market is highly fragmented with average retail space per outlet being only about 50sq.ft. It is also highly unorganized with the share of organized retail being only about 3% (ASEAN India Business Portal, 2005). India
The Indian retail sector has been experiencing significant excitement and growth over the last couple of years. What started off with a shoppers stop in 1990 or a Food World in 1996, seems to have finally caught up on the fancy of at least in bigger cities and towns in India
The implication of these is that a higher percentage of the population will continue to remain economically active for a longer period of time thereby providing a growing market for many of the consumer products. The average Indian has been getting wealthier over the years-per capita income has been increasing steadily from Rs. 6481 in 1980-81 to 12,785 in 2000-01. It is estimated to reach Rs. 40,000/- crores by 2010. As the economy continue to grow, this trend is also likely to continue. The total private consumption in India
OBJECTIVES
First, it tries to understand what is meant by “CRM” Customer Relationship Management.
Second: it tries to understand what is meant by “organized retail” interaction with different stakeholders in retail business and academicians indicates that each one interprets the term in his own way.
Third :the study tries to understand the importance of the different drivers of the organized retail in Pune city – from the perspective of the manufacturer, the retailer, as well as the consumer and explore as to how similar or dissimilar they are as compared to the drivers of the modern retail formats in the developed economies of the USA and UK.
Fourth: it tries to analyze the type of clientele visiting the organized retail outlets.
Fifth: the study tries to explore the expectations of the customers while visiting the organized retail outlets.
Sixth: the study tries to measure the customer satisfaction of the clientele visiting the organized retail outlets in terms of various parameters like price, preference, location, brand assortment, quick prompt service, etc.
Seventh: the study tries to understand the implications of the strategy used by the retail organizations under the headings of Customer Relationship Management.
This will include ……..
A) Customer database management.
B) Analyze the customer retention.
C) The schemes offered by the retailers to “invite” the customers and offer of incentives.
D) The strategy used on relationship management.
E) The use of complaint handling systems.
Introduction
Retailing is a final set of activity involved in selling a product to its end user. “The word retail is in fact derived from the French word retailer, which means to cut off a piece or to break bulk”(pradhan,2004:3)
According to Barry Berman and Joel Evans, “it is the last stage in the distribution process” (Berman and Joel, 2001:3), it is seen as part of the distribution channel which is one of the key tools of the marketing mix of a manufacturer.
When we think of marketing we think of primarily the “manufacturer” and the “consumer” and refer to the intermediaries in between as “channel of distribution” who are their to ensure that the product flows from the manufacturer to the customer. how ever “this manufacturer centered view of channels has seriously under elated the power scope and importance of retail marketing”(Mcgoldrick,1990:2). Infact the danger of regarding distribution channel as passive and orderly adjuncts to the manufacturer marketing activities was pointed out as early as 1960 by McVeg “the middleman is not a hired link in a chain forged by a manufacturer but rather an independent market, the focus of a large group of customer for whom he buys. As he grows and builds a following. He may find that his prestige in his market is greater than that of the supplier whose goods he sells” (McVeg,1960,quoted in Mc goldbrick,1990:2).
According to Philip Kotler, retailing included all the activities involved in selling goods or services directly to final consumer for personal, on business use”(Kotler,2003:535).
Michael Levy and Barton Weitz go a step further and refer to retail not just as a set of activity but as “the set of business activities that adds value to the products and services sold to consumers for their personal and family use”(Levy and Barton,2002:8)
Dunne Lusch and Griffith believe retailing “consist of the final activity and steps needed to place a product in the hands of the consumer or to provide services to the consumer”.(Dunne, Robert and David,2002:7).
John Fernie and Leigh Sparks provide another perspective from logistics and supply chain management perspective—“retailers were once effectively the passive recipients of products ,allocated to store by manufacturer in anticipation of demand .Today retailer are the active designers and controllers of product supply in reaction to known consumer demand .They control, organize and manage the supply chain from production to consumption”(Fernie and Leigh,2004:6).
Exhibit 1: Retailers Ranking Amongst the Top 200 Global Corporation As Ranked By Fortune International
| Fortune Rank(02) | Organization | Type of retailer | Fortune Rank(02) |
| 1 | Wal-Mart | General Merchandiser | 1 |
| 35 | Carrefour | Food and drug store | 35 |
| 38 | Royal Ahold | Food and drug store | 38 |
| 46 | Home Depot | Specialty Retailer | 46 |
| 56 | Kroger | Food and drug store | 56 |
| 72 | Metis | Food and drug store | 72 |
| 83 | Sears Reebuck | General Merchandiser | 83 |
| 89 | Target | General Merchandiser | 89 |
| 100 | Albertson’s | Food and drug store | 100 |
| 104 | Kmart | General Merchandiser | |
| 111 | Costco Wholesale | Specialty Retailer | |
| 113 | Safe way | Food and drug store | |
| 114 | Tesco | Food and drug store | U.K |
| 124 | J.C.Penny | General Merchandiser | |
| 161 | Ito Yokado | Food and drug store | |
| 181 | Group Pinault | General Merchandiser | |
| 183 | Walgreen | Food and drug store | |
Generally organized retailing is referred to a professional service- oriented set up which provides the customers a pleasant shopping experience. Organized retail stores are characterized by professional management and a strong customer focus. (Marketing sense: retailing the sunrise sector-ICFAI 2002 Pg I and II)
What is CRM ?
CRM is mainly an enterprise-wide mindset, business strategy and the process that are designed to acquire, retain and serve customers. Advances in IT have played as a great catalyst in adaptation of CRM program by companies. Spending on CRM technology and activities is expected to exceed $ 17.7 bn by 2006, growing at an average annual rate of 6.7% (A beerdeen Group, 2003). CRM technology help companies to manage the customer lifecycle of acquiring new customers enhancing the profitability of exciting ones, and retaining profitable customer for long.
As a business strategy, CRM seeks to optimize the company’s profit and revenue generating ability by understanding its customers and delivering value to them.
1) According to Berry
2) According to Rigby et al (2002) CRM is a mechanism for aligning firm’s business processes with its strategies to built customers loyalty and the firm’s profits.
3) Similarly, Kim et. Al. (2003) defines CRM as “managerial efforts to manage business interactions with customers by combining business processes and technologies that seek to understand a company’s customers”.
Four dimensions of CRM that become apparent from these definitions are:
1) company’s mindset,
2) a ‘customer centric strategy,
3) reengineering of the business processes and
4) The role of technologies.
Components of CRM
The purpose of a business is to create customers (Drucker, 1954). The first step in customer life cycle is acquisition of customer. Therefore the first role of CRM is to provide a wide range of modes like telephones, fax, e-mail, SMS, instant chat and such others through which a customer can interact with the organization. The modes should be geographically distributed over branches, retailers, wholesalers, service providers and other categories of business partners. So any CRM system should have a sales module that integrates the multitudes of channels and present complete customer view to any channel partners or direct sales staffs.
The existing customers may need service and therefore a CRM system could have service module to track customer service record.
Finally, a CRM system needs to identify good customers that the company may like to retain. Various techniques including customer lifetime value (CLV) are used to analyse customer data in order to segment customer for identifying ‘good’ customers. This is done by the ‘marketing’ module of CRM system.
A component, which helps actual customer interaction (or operations), is commonly known as ‘operational CRM’ and which help analysis of customer data is known as ‘analytical CRM’.
TRADITIONAL MARKETING Vs CUSTOMER RELATIONSHIP MARKETING
The differences between transactional and customer relationship marketing are as follows:-
| Traditional/ Transactional marketing | Customer relationship marketing |
| 1. Emphasis on single sale transaction. | 1. Emphasis on retaining the customers |
| 2.Quality is the sole responsibility of production | 2. Quality is a concern for every one. |
| 3. Orientation on product or service features. | 3. Orientation on product or service benefits. |
| 4. Little emphasis on customer service. | 4. Strong emphasis on customer service. |
| 5. Short time scale. | 5. Long time scale. |
Why Customer Relationship Marketing ?
The cost of acquiring a new customer is almost 10 times the cost of retention of a customer, which means its much easier and more inexpensive to make an additional sale to an existing customer than to make a new sale to a new customer. As per Pareto’s Law, 80% of the total sales comes from 20% of customer. Hence, their is a need for customer relationship marketing, the core of which is customer retention. It is a highly beneficial for organized retailers to build long-lasting relations with the customers. It is the efforts of a organized retailers as a whole and not just that of one sales person or marketing department along that can ensure effective CRM benefits:- All departments in the firm must ‘think customer’.
Some of the benefits that accrue from customer relationship marketing are :-
1) Results in positive image projection and enhance brand equity due to high degree of customer retention and loyalty.
2) Builds good will in the market,
3) Keeps competitor’s away from customer’s sight,
4) Improved customer satisfaction.
5) Satisfied customer may refer other potential new customers.
6) Facilitates employee retention when the firm has a strong base of satisfied customer.
7) Positive word-of-mouth.
8) Turns customer into your friends.
THE CUSTIOMER RELATIONSHIP MARKETING MODELS
Customer relationship marketing can be described with the help of following models:
| INPUT | PROCESS | OUTPUT |
| Value added product services. | CUSTOMER RELATIONSHIP | High customer satisfaction |
| One-to-one relationship. | MARKETING | Increased customer share |
| Individual care and attention | | Lower marketing costs. |
| Special facilities and services | | Positive word-of-mouth |
| Structural ties. | | High brand equity |
| Information sharing | | High customer loyalty |
The core theme of all CRM and relationship marketing perspective is its focus on cooperative and collaborative between the firm and its customers, and/or other marketing actors. Another important fact of CRM is “customer’s selectivity”. Not all customers are equally profitable for an individual company.
“Customer relationship management is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customers.” (Sheth jagdish N, Parvatiyar Atul, Shainesh G. CRM-emerging Concept, Tools and Applications 2003 4th Edn)
The purpose of CRM is to improve marketing productivity. Marketing productivity is achieved by increasing marketing efficiency and by enhancing marketing effectiveness. In CRM, marketing efficiency is achieved because cooperative and collaborative processes help in reducing transaction costs and overall development cost for the company. The two important processes of CRM include productive customer business development and building partnering relationship with its most important customers. This leads to superior mutual value creation.
The emergence of CRM practice
Developing customer relationship has historical antecedents going back into the pre-industrial era. Much of it was due to direct interaction between producers of agricultural products and their consumers. It was only after industrial era’s mass production society and the advent of middleman that there were less frequent interaction between producer and consumer leading to transaction oriented marketing.
In recent years however several factors have contributed to the rapid development and evolution of CRM. These include the growing de-intermediation process in many industries due to the advent of sophisticated computer and telecommunication technology that allow producers to directly interact with end customers. Database and direct marketing tools give them the means to the individualized their marketing efforts. As a result, producers do not need those functions formally performed by the middle man.
The de-intermediation process and consequent prevalence of CRM is also due to the growth of the service economy. Since services are typically produced and delivered at the same institution, it minimizes the role of middleman. Another force driving the adoption of CRM has been the total quality movement. In the current era of hyper-competition, markets are forced to be more concerned with customer retention and loyalty.
CRM Formation Process
The formation process of CRM refers to decisions regarding initiation or relational activities for a firm with respect to a specific group of customers or with respect to an individual customer with whom the company wishes to engage in a cooperative or collaborative relationship. Hence, it is important that a company is able to identify and differentiate individual customers. In the formation process three important decision areas related to defining the purpose (or objectives) of engaging in CRM, selecting parties (or customer partners) for appropriate CRM program; and developing program (or relational activity schemes) for relationship engagement with the customers.
CRM purpose
The overall purpose of CRM is to improve marketing productivity and enhance mutual value for the parties involved in the relationship. CRM has the potential to improve marketing productivity and create mutual values by increasing marketing efficiencies and/or enhancing marketing effectiveness.
CRM - PROGRAMS
| Customer Types Program Types. | Mass market | distributors | Business to Business |
| Continuity Marketing | *After Marketing *Loyal programs *Cross selling | *Continuous Replenishment *E C R programs | *Special Sourcing arrangement |
| One-to-one marketing | Permission marketing *Personalization | *Customer business development | *Key account *Global account programs |
| Partnering/Co-marketing | *Affinity partnering *Co-brading | *Logistics partnering *Joint marketing | *Strategic Partnering *Co-design *Co-development |
CRM Business cycle
As shown in diagram below, any organization starts with the acquisition of customer.
Acquisition is a vital stage in building customer relationship management ,For the purpose of customer acquisition, an organization is likely to focus its attention on the suspect, enquiries, lapsed customer, former customers, competitor’s customers and prospective customers and retain valuable customers.
Use of Technology in CRM
Technology includes all the equipment, software, and communication like that organizations use to enable or improve their processes. The mostly used tools are explained below.
Sales Force Automation
These systems help in automating and optimizing sales processes to shorten the sales cycle and increase sales productivity. In depth product information, specialized databases of solutions, sales force support queries, and a set of internet information on the internet can improve the productivity of the sales force.
Call center helps in automating the operations of inbound and outbound calls generated between company and its customers. Companies are now focusing to offer solutions that leverage the internet in building comprehensive CRM systems allowing them to handle customer interactions in all forms.
Data Warehousing
A data warehouse is an implementation of an informational database used to store shareable data that originates in an operational database-of –record and in external market data sources. Data
Mining and OLAP
Data mining involves specialized software tools that allow users to sift through large amount of data to uncover data content relationship and build model to predict customer behavior. Data mining uses well-established statistical and machine learning technology to build models that predict customer behavior.
OLAP (Online Analytical Processing), also known as multi-dimensional data analysis, offers advanced capabilities in querying and analyzing the information in data warehouse. In some CRM initiatives, OLAP plays a major role in the secondary analysis that take place after initial customer segmentation has occurred. For example, in CRM- based campaign management systems, OLAP is an excellent tool for analyzing the success or failure of the promotional campaigns.
Decision Support and Reporting Tools
Web enabled reporting tools and executive information systems are used to deploy the business information that has been discovered. Applications equipped with some of the same sophisticated modeling routine developed in the data –mining phase era applied to individual contact in real time.
Electronic Point Of Sale (EPOS)
The main benefit of EPOS and retail scanner system is the amount of timely and accurate information they deliver. Advances in the technology have significantly aided the scope for data analysis. In additional to the original scanner-related data on the sales rate ,stock levels, stock levels, stock turn, price and margin, retailers now have information about the demographics ,socio-economic and lifestyle characteristics of consumers.
“Cherish customer who complain: they tell you what to change”
E’s of e-CRM
The ‘e’ in e-CRM does not stand for “electronic” but also can be perceived to have many other connotations, through the core of e-CRM remain to be cross channel integration and organization; the ‘e’ in e-CRM can be used to frame alternative decisions of e-CRM based upon the channels which e-CRM utilizes, the issues which it impacts and other factors; the e-CRM are briefly explained as follows;
1) Electronic Channels:
New electronic channels such as the web and personalized e-massaging have become the medium for fast, interactive and economic communication, challenging companies to keep pace with this increased velocity. E-CRM thrives on these electronic channels.
2) Enterprise
Through e-CRM a company gains the means to touch and shape a customer’s experience. Through sales, services and corner offices-whose occupants need to understand and assess customer behavior.
3) Empowerment:
Through e-CRM a strategies must be structured to accommodate consumers who now have the power to decide when and how to communicate with the company through which channel, at what frequency. An e-CRM solution must be structured to deliver timely pertinent, valuable information that a consumer accepts in exchange for his or her attention.
4) Economics
An e-CRM strategy ideally should concentrate on customer economics, which deliver smart asset-allocation decisions, directing efforts at individuals likely to provide the greatest return on customer- communication initiatives.
5) Evaluation
Understanding customer economic relies on a company’s ability to attribute customer behavior to market programs, evaluate customer interactions along various customer touch point channels, and compare anticipated ROI against actual return through customer analytic reporting.
“You have no mercy on the people who make the items You buy in your personal life .why should you expect Your customers to treat you differently.”
- Crosby
To implement CRM successfully, you’ll have to reorganize your customer and change your organization mindset .When CRM works, it helps to solve this problem by meshing everyone together and focusing the entire organization on the customer. Like all strategic initiatives, CRM requires commitment and understanding through out the company, not just in marketing. In all, it adds to sense of expectation and loyalty being instilled within the consumer and development of a relationship between the company and customer that competitors find hard to break. Business decisions based on complete and reliable information about your customers are very difficult for your competitors to replicate and represent a key and sustainable competitive advantage.
“A customer is the most important visitor on our premises. He is not an interruption on our work; he is the purpose of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an Opportunity to do so.”
Mahatma Gandhi
CRM is the commitment of the company to place the customer experience at the center of its priorities and to ensure that incentive system processes and information recourses to leverage the relationship by enhancing the experience. Like ERP, CRM solutions focus on automating and improving business process, albeit in the front end. Whereas ERP implementation can result in improved organizational efficiency, CRM aims to provide organizational effectiveness by reducing sales cycles and selling costs, identifying markets and channels for expansion, improving customer value satisfaction, profitability and retention.
Major Observations during the Study
1) Experiences of retailers with the present generation of organized retailers.
Old retailers New Retailer
| Particular | No | % | Particular | No | % |
| Ambience | 60 | 12% | Ambience | 480 | 96% |
| Courteous & trained staffs | 160 | 32% | Courteous & trained staffs | 430 | 86% |
| Choice of products | 140 | 28% | Choice of products | 480 | 96% |
| Personal attention | 180 | 36% | Personal attention | 330 | 66% |
| Home delivery | 340 | 68% | Home delivery | 280 | 56% |
| Credit facilities | 270 | 54% | Credit facilities | 300 | 60% |
| Use of technology | 80 | 16% | Use of technology | 460 | 92% |
| Discounts/ offers | 170 | 34% | Discounts/ offers | 380 | 76% |
| Personal service | 190 | 38% | Personal service | 310 | 62% |
| Payment terms/credit facilities | 290 | 58% | Payment terms/credit facilities | 240 | 48% |
| Taking back of goods | 330 | 66% | Taking back of goods | 280 | 56% |
| Telephonic order systems | 190 | 38% | Telephonic order systems | 300 | 60% |
| In case of stock-outs are branded products procured on order | 220 | 44% | In case of stock-outs are branded products procured on order | 350 | 70% |
It is clear that new or organized retailers have a clear upper hand. People feel that they are far better then old retailers in ambience, Courteous & trained staff, choice of product, personal attention, Use of technology, Discounts & offers, telephonic order system. But old retailers are also giving them a good fight or are even better in some areas such as home delivery, Credit facility, payment terms, easy taking back of goods.
The two main areas where the old retailers are really far behind are Ambience and Use of technology.
2) Retailer treatment by compared to the old retailer?
| Particulars | New | Old | New | Old |
| Keeps you on mailing list | 120 | -- | 24% | 0% |
| Informs you of the special offers | 410 | -- | 82% | 0% |
| Gives you a credit card? | 130 | -- | 26% | 0% |
| Greats you by personal name | 140 | 50 | 28% | 10% |
| Gives home delivery | 390 | 250 | 78% | 50% |
| Has intimate knowledge about you | 140 | 25 | 28% | 5% |
| Recommends merchandise to you | 430 | 50 | 86% | 10% |
According to the data we easily recognized that new retailer is keeping customers on mailing list, informs them of special offers and gives a credit card, has intimate knowledge and recommends merchandise.
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3) Frequency of feedback by retailer
| Particular | New | Old | New | Old |
| Once a month | 170 | 50 | 34% | 10% |
| Once in 6 months | 150 | 100 | 30% | 20% |
| Never | 180 | 350 | 36% | 70% |
Here the data generated is of serious cause for concern for the new retailers. Majority (36%) of people said that they never asked for feedback (by the new retailers). About 30% said that they have been asked once in 6 months. This is really bad because customers feedback is the main source of data for them to up to date themselves and change according to the market demand.
4) Corrective actions against suggestions
| Particular | New | Old | New | Old |
| Always | 80 | 100 | 16% | 20% |
| Occasionally | 320 | 100 | 64% | 20% |
| Never | 100 | 300 | 20% | 60% |
The data founded here is also not very good for the new retailers. People go to new retail shop because at the rush time their own gali kiranawala don’t even bother to listen to them. But from this data it seems that in the new retail outlets also there is nobody to listen to them. About two-third of customers (64%) think that occasionally they listen to their suggestions.
5) Value for money
| Particular | New | Old | New | Old |
| Always | 190 | 100 | 38% | 20% |
| Occasionally | 310 | 200 | 62% | 40% |
| Never | 00 | 200 | 0% | 40% |
Here also people go with the new retailers. 100% feel that these new retailers give them good value for money either occasionally or always. But nobody feels the other way. For the retailers 62% feel that they got value for money occasionally is good cause of thinking. They should try to change them into better part.
8. a) Access to retailer or retailers service
| Particular | New | Old | New | Old |
| Yes | 470 | 350 | 94% | 70% |
| No | 30 | 150 | 6% | 30% |
94% customers feel that their retail outlet is relatively easy to access than others. This is also a good sign for the new retailers, because it shows a sign of loyalty in their customers toward their respective retail outlets. They feel that products of their respective stores are customized for them so they use to come to that store. Only 6% feel that other stores are easier to access than their retail store.
b) Service Response
| Particular | New | Old | New | Old |
| Yes | 430 | 300 | 86% | 60% |
| No | 70 | 200 | 14% | 40% |
Most of the customers (86%) think that new retailer’s approaches to meet and greet the customers are very good. They are well trained, well dressed, and have good product knowledge. At this front they are far ahead of old retailers.
c) Frequency of Visiting Retailer
| Particulars | New | Old | New | Old |
| Once | 280 | 25 | 56% | 5% |
| Twice | 130 | 100 | 26% | 20% |
| Thrice | 40 | 175 | 8% | 35% |
| Monthly | 50 | 200 | 10% | 40% |
More than half (56%) of the people used to go to new retail outlets once in a week. Another 26% visited even twice in a week. This seems to be a healthy frequency for the new retailers as only 10% of the customers visit monthly.
d) Staffs respond to the customer problems, request and question.
| Particulars | No. | % |
| Quick response | 300 | 60% |
| As problem occurred | 90 | 18% |
| Take some time | 50 | 10% |
| Slowly | 40 | 8% |
| Don’t know | 20 | 4% |
According to the data 60% people feel that new retailer staffs are more conscious about customers problems, requests and questions. They take very quick action when the problem occurs while 10% think that they take time when customer complained.
8% people feel they are very slow in taking action and some don’t want to comment. It means generally people are happy with the staff of new retailer.
f) Do service-staffs act in a friendly and polite manner
| Particulars | No. | % |
| Yes | 480 | 96% |
| No | 20 | 4% |
According to the data it is very clear that new retailer staffs are very polite and friendly. They listen to customer’s problems in a very polite manner and always try to make a friendly environment for customers. Only 4% people don’t feel like this.
g) Do they (service staffs) serve you in the same manner every time?
| Particular | No. | % |
| Yes | 390 | 78% |
| No | 110 | 22% |
About three-fourth (78%) customers feel that the staffs of new retail shops are well trained. So, every time they went to the outlet they are treated by same enthusiasm and well mannered approach. Only 22% feel the other way.
h)Do service staffs have requisite knowledge and skills?
| Yes | 420 | 84% |
| No | 80 | 16% |
84%people think that the staffs of new retailers are well trained in various skills and they also have requisite knowledge. They used these skills for handling customer problems. While only 16% people feel that they don’t have requisite knowledge and skills.
i) Is the service described clearly and accurately in terms of discounts and offers?
| Particular | No. | % |
| Yes | 360 | 72% |
| No | 130 | 26% |
| Don’t know | 10 | 2% |
72% people are agreeing with the new retailer’s service as described clearly and accurately in terms of discounts and offers. While 26% people are not satisfied, they feel that the discounts and offers are very complicated, in the case of new retailer always they mention condition apply.
j) How well managed are the tangible aspects of the service?
| Particulars | No | % |
| Billing | 380 | 47.5% |
| Offers | 280 | 35% |
| Credit card | 100 | 12.5% |
| EDC | 40 | 5% |
According to the data we easily recognize that people are very happy with new retailer billing. in which every thing is mentioned very clearly in bills and accurately. They used new advanced technique in billing.35% people are very happy with offers, it attracts them to come again and again, 12.5% people are happy with credit card facility of new retailer and only 5% customers are happy with EDC.
9) Rank this retail outlet on the following attributes given below on a 5 POINT SCALE (according to their importance with respect to customer’s services expectations) …..
1- Below average, 2-average, 3-above average, 4-good, 5-exceptional
| Particular | Below average | Average | Above average | Good | Exceptional |
| Reliability | 0% | 14% | 38% | 46% | 2% |
| Responsiveness | 6% | 16% | 42% | 24% | 12% |
| Assurance | 6% | 8% | 42% | 40% | 4% |
| Empathy | 6% | 10% | 48% | 34% | 2% |
| Tangibles/physical evidence | 2% | 12% | 44% | 40% | 2% |
| Accessibility | 0% | 10% | 24% | 62% | 4% |
| Security | 4% | 8% | 18% | 60% | 10% |
| Communication | 0% | 2% | 54% | 32% | 12% |
| Competence | 4% | 4% | 46% | 36% | 10% |
In this question we are going to generate the data from different point of view about the weightage rating for the new retail outlets. These data is based on the rating given by the customers on the different aspects.
Reliability: People rather have a good feeling for the retailers on the reliability factor. Most of them (46%) rate as “good” and 38% rate as above average. Only 7% rate as average and not a single percent rate as below average. This is really good for the retailers.
Responsiveness: On this front most of people (42%) have given the rating as above average. Percentage of “good” (24%) is lower than this. Here 6% also rate them as below average or “bad”. But almost double of the people have gave them exceptional rating.
Assurance: Here there is good feeling in the people about the new retailers 40% give them “good” and 42% give them as average rating. Here also about 7% of customers rate the new retail outlet as below average.
Empathy: Here almost half (48%) of their customer give them above average rating and 34% of customers as good. But here also 6% of them rate as below average.
Physical evidence: Here also the scenario is almost similar to above aspects. 44% rate as above average and 40% as good. But only 2% rate as below average.
Accessibility: New retail outlets got the best rating at this front. About 62% rate as good and 24% rate as average. But the main thing is nobody rates them as below average.
Security: 62% customers rate the new retail outlets as good on the security point of view. 18% rate as above average and 10% also rate them as exceptional.
Communication: At this front only 32% give the retail outlets “good” rating. But 54% rate them as “above average”. The main point of concern is that not a single percent rate them “below average” while 12% rate them as exceptional.
Competence: at this front the data generated is much similar to the above one. 36% rate the new retailers as good and 10% as exceptional.
The overall scenario is that the customers rate in the favour of new retailers. Most of the customers rate them as above “average”, “good”, and “exceptional”. That is a good sign for the new retailers.
10) Store image: - Indicate your perception of the service on a point interval scale where 1 indicates very unfriendly and 5 indicates very friendly.
| Grading | | |
| 1 very unfriendly | 0 | 0% |
| 2 unfriendly | 10 | 2% |
| 3 average | 190 | 38% |
| 4 friendly | 230 | 46% |
| 5 very friendly | 70 | 14% |
The customers, from whom the data was generated, feel that the service level of the new retailers is friendly and up-to mark. About 46% feel like this. While 38% thinks that they are just average in their service offering. About 14% think that new retailers are very friendly while offering the service. Only 2% think that they are unfriendly in their approach.
THE FINDINGS ON RETAILERS
The main focused customers of the new retail outlets are newly age office goers, which have income of Rs. 10,000 per month. They have lot of disposable income; both of the spouses are working, so they have lots of money to spend. These income groups generally come to the outlets every weekend. It is also clear from our data that most of the customers (56%) of the new retail format outlets come to the outlet once in a week. And another 26% visited even twice a week.Their main customers are in the age group of 25-35 years. They have the money, they are eager to spend the money because they are the one who want really world class lifestyle and ambience, and the main thing is that they are ready to pay for this.
Here they experience a totally different kind of shopping, they come here with the whole family for a picnic, shop, eat and enjoy the time with their family. The overall finding; from these data is every body wants more from these new retail outlets, whether its service or product.By the data founded, it is very clear that expectations of the customers are very high from the new retail outlets. They want best experience, the best products and the best services at the lowest possible price.
The most important thing they require is the clean and fresh environment, and the product lines neatly arranged. They have got fade up from the conventional kirana shops where products are just thrown every where with a dirty shop boy serving him. Now they are not satisfied with them because they have lots of other options up. With the fresh and clean environment, today’s customers also want well trained, well dressed and humble staffs who are ready to listen to them and willing to solve their problems. But even today in most of the retail outlets this thing is not happening. Most of our samples customers told us that at the rush time of every outlet especially in the weekends there is no body to listen them.
The core thing that any customer wants from every retail outlet is the full range of product lines of the leading brands that are required for daily life. They want all the products required under one roof.
According to the research most of the customers want home delivery, and credit facility from the retailer .In these home delivery is very common, every customer want this facility from the retailer. Some groups of customer demand credit facility from retailers. More and more offers and discounts also attract all types of customer segments that mean expectations of customers have also increased from retailer. One more thing they expect from retailer is that they could be able to exchange the product easily if required.
The data generate shows that most of the customers are quite satisfied from the new retail outlets. They like their way to approach the customers, the ambience provided by them, and above all the cheapest price in the town.
94% customers feel that their retail outlet is relatively easy to access than others. This is also a good sign for the new retailers, because it shows a sign of loyalty in their customers toward their respective retail outlets. They feel that products of their respective stores are customized for them so they use to come to that store. Only 6% feel that other stores are easier to access than their retail store. Most of the customers also think that new retailer’s approach to meet and greet the customers is very good. They are well trained, well dressed, and have good product knowledge. At this front they are far ahead of old retailers. People think that retail staffs are overall good. Means they are friendly in nature, well trained, well mannered, clean and well dressed, and their approach toward the customers are good.But there are also some customers who have had experience from the retail staffs. They tell us that they don’t listen to them, and when they go to bring a product for them, they never come back. Again the customer has to ask to another staffs.Some of them don’t apologize even they have done the mistake.
80% of the people think that services can be used without the risk, while 20% think that there is a risk involved in this. It means people want more services at the same cost form the new retailers because they feel that there is no risk factor involved in this.
According to the data generated 60% people feel that new retailer staff are more cautious about customers problems, requests and questions. They take very quick actions when the problem occurs while 10% think that they take time when customer complained. 8% people feel they are very slow taking action and some don’t want to comment. It means generally people are happy with the staff of new retailers.
According to data it is very clear that new retailer staffs are very polite and friendly. They listen to customer’s problems in a very polite manner and always try to make friendly environment for customer. Only 4% people don’t feel like this.
About three-fourth (78%) customers feel that the staffs of new retail shops are well trained. So, every time they went to the outlet they are treated by same enthusiasm and well mannered approach. Only 22% feel the other way.
84%people think that the staffs of new retailers are well trained in various skills and they also have requisite knowledge. They use these skills for handing customer problems. While only 16% people feel that they don’t have requisite knowledge and skills.
72% people are agreeing with new retailer’s service as described clearly and accurately in terms of discounts and offers. While 26% people are not satisfied, they feel that the discount and offers are very complicated in the case of new retailer they always mention condition apply.
According to the data we easily recognize that people are very happy with the new retailer billing. In which every thing is mentioned very clearly in bills and accurately. They used new advanced technique in billing. 35% people are very happy with they offers, it attract them to come again and again.12.5% people are happy with credit card facility of new retailer and only5%customer are happy with EDC.
Promotional activity includes lucky draw, scratch cards, free shopping to certain number of customers like 100th or 500th. Collaboration with the neighborhood society is also used by some retailers. In this the members of those societies are given some extra discount by that retailer.
Factors like aggressive competition, demanding customers, and emergence of alternative channels of distribution and communication are redefining the rules of market. No doubt, the rules of the marketing in recent past have changed and the impact of it has been observed across all the industries. In the new market structure, new age customers have gained more clout with the power balance tilted in their favor. They feel it is their proprietary right to demand: high quality product and excellent service at competitive price. Moreover, customers are demanding companies to provide them facilities of delivering products or services anytime, anywhere. The new age customers are enjoying the kind of power for their betterment. No doubt, marketing model in the last decade has changed its focus from product-centric to customer-centric approach.
Markets are encountering the threats of their products or services being commoditized as they are facing not only competition from competitors but also operating under consistence pressure of loosing their Unique Selling Proposition (USP). The manufacturers, producers, or sellers are no longer in the position to govern the relationship between buyers and the sellers. In today’s competitive markets, new age customers are demanding an altogether different kind of relationship with retailers, suppliers, and producers than the customers of the traditional marketing era. Undoubtedly this is the golden era for the customers, but for the companies, survival has never been so difficult. Moreover the increased competition has led to proliferation of product and services offering, which has created a situation where companies are vying with product features, price and distribution network to attract customers. Most of the companies have lost control over the market and are in search of a USP. They find that establishing a long term relationship with the customers is the key to success in this customer driven economy. They will have to strive hard and win customer’s confidence in a long term relationship, which is possible only when the companies keep delivering value to customers.
It is observed that new age customers are becoming more value conscious and are not willing to pay even an extra penny to what they don’t perceive as value. If they do not find value for their money, they have no qualms in shifting their loyalties. Moreover, loyalty is not the only key difference factors in company’s performance, there are many unanswered questions. The worst part is, the management gets confused when it takes up the task of answering questions like –“What is the difference in the value of company’s loyal customers and other customers?” Does the company need to customize or personalize products and services? Does the company enjoy a premium brand? Are there competitors in the market trying to change the “rules of the game”, which has made the situation more challenging?
The biggest challenge before a company is to identify the problems and address them intelligently so that they could convert this quest for value into opportunity. Offering more value to the customers not only strengthens a company’s position in the marketplace, but also enhances bottom line profitability and creates a strong customer franchise. We have learnt that profit since age is result of the relationship between revenue and cost and in new age business horizon increased revenue stem from increased customer satisfaction, feeling of satisfaction, and psychological state of achievement. This situation forced companies to attain high level of customer satisfaction. As customers consistently are in search of value, they are also interested in helping companies create value for which the companies need information. The new age customers also want to share problems they are facing, and inform companies the kind of product or service they are looking for. They also want companies to share every bit of information they have, which helps in developing a close bond between the customer and the company is known as customer relationship. Companies across the horizon, to enrich the bond of customer relationship, are using the new database technologies that enable the management to know all about customers and offer customers a platform to interact with the company. Today, customers and companies share information, which are helped the company to revive their relationship with customers and manage the customer relationship.
Companies across the board have discovered that profitable growth is difficult to achieve in light of the changing customer base. A company must overcome challenges like delivering consistent and personalized experience across channels, increasing profitability by aligning the right customer to the right channel, attracting new customer and identifying the most profitable existing customer, and most importantly reducing the cost to serve all customers to maximize customer interaction.
The companies endeavor to come closer to customers and win their hearts are making the path to CRM success face various problems, viz., inability to meet objective and benefits, risk to the business in general, events that could effect the implementation, loss of competitive advantages, legal consideration, lack of control, negative impact on business reputation, loss of market share and acceptance to CRM within an organization. These problems are tough to handle but companies are struggling hard to make CRM implementation a success.
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