Marks 50 Time: 90 minutes

Case study on

Customer Relationship Management

CRM has its effect on the customer loyalty which is very much essential in order to carry out the literature review on the customer relations. In this chapter there shall be detailed explanation of all the various technicalities. The process of managing customer relationship with the customer and understanding the need of continues benefits from the customer is said to be customer relation management. The market in the 20th century has come out with various different techniques and concepts that went on to change with more integrated approach making the business grow. As per Copeland in the year 2000 the most highlighted agenda during the year 1950s belongs to the consumer marketing (Copeland, 2000). The very just definition of the customer relationship will not give us the exact information but shall show us the ways how to improve the customer loyalty but it shall show us the direction of as to how better customer relationship can be attain in this competitive hospitality industry. CRM can be taken as a system which has a concept of retaining, acquiring and growing customer which is made in an effective manner and with the help of the information given by the product and service to the customer. In the hospitality industry there should be marketing management approach to build relationship with their customer in a better way which shall make the competitors difficult to imitate while offering services and retain the customer over life time (Malina, 2003).

Bergeron, (2007), defines CRM as the process of identifying and establishing, maintaining, enhancing and when necessary terminating relationships with customers and other stakeholders, at a profit, so that the objectives of all parties are met, when this is done by a mutual giving and fulfilment of promises. According to Peppers& Rodgers (2008) CRM viewed as a customer-focused business model entails one-to one marketing, relationship marketing, real time marketing, customer intimacy and a variety of other terms. But the idea is the same: establish relationship with customers on an individual basis, and then use the

information you gather to treat different customers differently The interchange of information and services implying the notion of mutual benefit. Going through analysis of further CRM definitions we come across several other sub concepts such CKI (Customer Knowledge Infrastructure), that KURARE poses as the foundation of any CRM successful initiative, or the restructuring of CRM Term into CMR (Customer Managed Relationships) meaning the surge of new technologies aiming to give customers control of their relationships As with other dynamic concepts CRM seems to give way to different interpretations depending on the scope and party it is approached, in other words currently CRM means different things to different people(Swift,2007). This implies the notion of change overtime in terms of theories /framework built and functionality. Shahi and Sujana, (2010) stated that Customer relationship Management is a tool, in which an organisation will be able to gain better understanding of their customers by fulfilling their expectations and demands. In addition, Peppers and Rogers, (2008) CRM is the best way to managing customer service and customer experience is very important and crucial elements in order to achieve objectives. Hence, Customer Relationship Management is the combination of people, technology and process that provides best method to generate better profitability and competitive advantages over the competitors.

The Reasons behind for the Development of Customer Relationship Management

According to Berry, and Parasuraman,(1991), CRM is not a new idea but an ancient practice which is on the upsurge due to its potential benefits, especially current market conditions(Christopher et al., (2009). So Customer Relationship Management has been emerging because of its discipline and also combination of technology which based on improving and automatic the process of the business accompanying with managing relationship with the customers in the area of marketing, sales, customer service and support(Customer Relationship Management Research Centr,2010). In addition, Homlund and Rock, (2006) found that traditional method of marketing has failed to forecasts the consumers purchasing behaviour and failed to adopt with the recent market conditions to better understanding of customers wants, needs, and expectations. However, in the view of Homlund and Rock (2006), Gummesson, (2008) stated that example of relationship marketing is the major factor behind to emergence of CRM. Hence , the relationship marketing is the first step to interact

directly to each customer and CRM is the method to move further to establish encourage longterm relationship or helps how to extend and improve the relationship(Janjicek, 2007). Achieving UK and globalization as a benchmarking organization stems from an aggressive and proactive marketing program that will operate through an updated CRM system and a future CRM system that is designed to compensate future environmental changes and thus customer changing needs (Homlund and Rock, 2006) and identifying the customers needs are other major reason to emergence of CRM (Oliva et al, 2007). An effective marketing program will benefit the customer and stakeholders by assessing the needs of the customer and satisfying those needs (Day,2009). Remaining a competitor in the hotel industry means continuing open negotiations and compromise with the trade union to keep the employees competitive wages with the industry, while reducing costs and retaining loyal customer, increasing customer service and retaining skilled employees and sustaining the business can be done through CRM and these are the potential benefits to the organisations (Shahi, and Sujana, 2010). Christopher et al, (2009), stated that the reason behind for the development of CRM is integration of technology, quality and relationship marketing. Zelalem et al, (2010) has identified that there are five benefits for the organisation through the implementations of Customer Relationship Management, which are: increase purchase, reduced costs, and employees retention, life value of the customers and word of mouth which provides free advertisements.

The Growth of CRM:

According to Freeland, (2003) the concept of CRM was developed in 1950s in the relationship and database marketing and it was first used in call centre. Hence, the fierce competition among the organisations and rising consumer demand forced the organisations to provide good customer service and no-longer afford poor customer service by the organisation(Shahi, and Sujana, 2010) and the CRM is the best solution to utmost care of the customers(Berry, 1995). Peppers and Rogers (2008), recommends that in order to maintain profitability and to remain competitive, organisations must develop beyond their fundamental competency of risk administration and concentrate on customer management. Brown et al, , (2004) there are various issues plays significance role in order to growth of the Customer Relationship Management, which are fierce competition in globally including UK, rapid consumer

behaviour changes over the years, economic conditions and shattering of consumer market and etc. Other opportunities for the organisations to achieve its goals of restructuring and implementing new initiatives such as its upgrade of its current CRM and a new CRM product development will help sustain customer loyalty, increase customer satisfaction and provide the employees with the skills and automated technology that can meet the customers needs (Janjicek 2007), and these factors helps the CRM to growth (Chan et al, 2004). In order to meet the changing environmental factors such as regulatory and fierce competitors and reduce labor costs, any organisations can use marketing strategies such as environmental scanning, sales forecasting, segmentation are opportunities to increases return on investment (ROI) by identifying and meeting customers needs. According to Chan et al,( 2004), The American Marketing Association, representing marketing professionals, states that marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. It is therefore, the CRM become widely popular among the organisations and also in current market condition but in contrast Homlund and Rock (2006), argues that the implementation of the CRM is very costly and it could be failed if not maintaining by adequate manner. In CRM context, it can be claimed that the today, CRM is one of the newest inventions in customer service. CRM helps the customer service employees and management to manage customers issues and concerns. It has been observed that the process of identifying and establishing, maintaining, enhancing and when necessary terminating relationships with customers and other stakeholders, at a profit, so that the objectives of all parties are met, when this is done by a mutual giving and fulfilment of promises. The overall aim of the CRM is to accomplish and sustain long-term healthy relationship with the customers to achieve the organisations goals. CRM helps the organization to understand different needs of customer and serve them better. It is further believed that anything which is wasted has a cost involved therefore they believe CRM is a tool for achieving company and individual objectives and has no cost associated with it. Since benefits of CRM are intangible and long term. It is therefore, the literatures reviewed showed that there are various benefits of the CRM in the organisations but if it is implement proper way.

Please answer the following questions

What are the Reasons behind for the Development of Customer Relationship Management ? 20 marks

Why the CRM is considered to be the important competitive tool for the organisations? 10 marks

Describe the growth and expansion of CRM in modern organisation? 20 marks