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One of the best examples which clearly explain that sometimes retailers never respect the customer’s emotions is- Many of the furniture retailers of United States of America are clearly found responsible of ignoring customer’s emotions. As some figures clearly explain that since 1980 the homes price in a country has already grown up by twenty five per cent, but spending on furniture is lowered from 1.2% to 1% from 1980 to present date. One of the basic reasons which comes out for this lowering in per cent is because of that customers have to wait approximately for two months for their delivery. So how can we imagine that customers can get emotionally connected with the retailers? So this is a wise suggestion for retailers that they must try their level best for caring the emotions of the customers.
STRATEGY 4: Set the Fairest (Not the Lowest Prices):
The main factor here comes and that is cost. Product price setting is the most crucial factor for customers as well as for the retailers. Prices play a psychological affect on the customer’s mind which will impact a vital role on their mindset and helps them to decide that whether they should purchase a product or not. Some of the potential shopper may sometime feel uncomfortable if they got some fear that a product which they are buying today may reduce by 30% by next week. Some of the giant retailers set their own prices according to their profit margins which is not fair. So retailers must set their fair prices it is not necessary that prices must be lower. This is one of the most important stategies of the retail industry.
STRATEGY 5: Save your Customers’ Time:
Several customers got one problem in this busy time period and i.e. Time for shopping. Because of this reason everyone prefers online shopping now days. In the present scenario retailers gave several sorts of problems to the customers during the shopping. One of the best examples which creates problems to the customers is several and different check outs. Several times it is seen that there occurs a big queue on check outs due to which many customers faced lot of problems. Practically managers saved so much money by closing several check out points but actually they never understand that how many customers they are losing. According to America’s Research Group, round about 83% of women as well as 91% of men have ceased shopping due to one very common reason and that is because of long checkout lines.
These are some of the very basic five strategies as well as processes that would have to be adopted in order to succeed of retail industry according to Leonard L.Berry. All these stategies are also applicable everywhere whether the retail business is established in developed nation or in a developing nation like India. These are the basic ways of Customer Relationship management which retailers should always try to follow for meeting the satisfaction level of their loyal customers.
Q2.Discuss the significance of technology in relationship marketing,and relate it to the different marketing types and how Tesco would benefit.
Now the technology is so advanced that without implementation of high technology it becomes a big challenge for any company to compete globally. Customer Relationship Management is a complete combination of technology and business processes. There are several definitions of Customer Relationship Management by different writers, but a definition inclusive of almost all the features is:
“CRM is an information industry term of methodologies, software and usually internet capabilities that help an enterprise manage customer relationships in an organized way.”
The importance of CRM can be clearly analyzed by this research work also. According to Gruen, 1997-
“On an average, a business’s investing six times more wealth in acquiring new customers than they do to keep them.” In this way CRM plays some crucial role in every business in this society.
Although as we already know that interest in Customer Relationship develop majorly from the year 1990s. As we already know that such a fast growth in the internet as well as latest technologies has effectively increased the major opportunities in all the sector of business like in marketing and has completely changed the way of relationship between the firms and a their way of management of customers.
There are various approaches for establishing a firm and quite stable business, for example matter related with the financial purpose always deal by fund management department or we can say by financial department, labor cost or management related with the labour are handled by Human Resource(HR) department. And one more thing like operation of production cost is managed by new and innovative technologies like Just in Time Inventory, TQM i.e. Total Quality Management, Flexible Manufacturing System and all the process of Supply Chain Management. There is lot of research work done on some issues like after a research work when a manufacturing cost of any product is turn down by fifty five to thirty per cent and cost of management from twenty five to fifty five per cent then the cost in marketing a product is gradually increased by twenty to fifty five per cent (Seth, 1998)
CHANGING RETAIL SCENE IN INDIA:
Organized retailing in developing nation like India has shown drastic changes. As we are seeing everywhere in the Indian market that so many retail stores are opening day by day. According to the report which is prepared by McKinsey& Co. and the CII( confederation of Indian Industry), By the year 2010 India’s retailing business has a potential of producing 300 billion per year. Research also clearly disclose that only a food retail industry is approximately expected to grow by $ 1.6 billion in the coming next five years. This clearly explains that there is a big opportunity in the retail sector for the giant retail groups.
SOURCE
The above diagram is derived from the TESCO Source about the retail industry. The figure clearly explains that how the graph is rising year by year from first phase to fourth phase. As it shows that in the first phase that is in the year 2002 new retailers are entered in the market and by 2004 it starts rising after that from the year 2004-06 consumers demand for variety in organized formats and from this period graph starts rising in a proper propos.
Different writers give their different opinions on CRM. Some of the opinions are as follows- According to Swift (2001, p.12) defined as “a firm every time trying to understand consumer behavior through meaningful communications in order to improve consumer retention, consumer’s loyalty and profitability.” According to Kincaid about CRM “the strategic use of processes, technology, information and also people to manage the consumer’s relationship with your firm across the whole consumer’s life cycle.”
According to Tanner et al., 2005 basically there are three types of marketing and how Tesco would benefit. Those are strategic, analytical and operational marketing. The definitions of all the three are as:
Marketing as a strategic as- “the model which is made by managerial level employees for decision making processes which involved a customer-oriented business strategy, process and culture and as well as supporting technological models.”
Marketing as a analytical – “ it is a firm level process which involved in analyzing consumers and market-level information in order to provide intelligence and insights that guide the company’s strategic marketing, and market choice”
Marketing as a operational- “ CRM is as a specification of suitable and replicable business process which designed to implement a company’s desired relationship model in terms of customer activities , customer interaction, sales and channel choices , and customer learning at one –on-one level.”
There are many hurdles yet to be faced by Indian retailers like TESCO. Some of the hurdles are as follows:
The very first biggest challenge which Indian retail sector have to face is to manage a tough competition with the unorganized or we can say that local Kiraana stores. Because as we have already discussed that about most of the Indian population still prefer shopping from these stores.
The second problem is that if any foreign company wants to invest in India then there is no automatic approval for doing the business for that firm. Automatic approval means a company has to fulfill so many government formalities.
The other issue is taxation. Indian government always favor the small scale unorganized retailers in respect of taxes.
The main hurdle which we are going to analyze is the lack of technical support in supply chain as well as in logistics operation in retail sector.
The last but not the least hurdle which we are going to discuss is in India cost of running a business operation is quite expensive.
As we already discussed that there are some hurdles like lack of technical support. So because of all these specific reasons the need of some new CRM techniques are necessary like Enterprise Resource Planning (ERP) solutions, Radio Frequency Identifications ( RFID) technology and many more. Some of the giant retail companies are using best ERP solutions now days in India. By implementing all these technologies in a proper manner and trained the staff in using these technologies can make the retail business profitable. |
