27116076 Crm at Big Bazaar Reliance Mart

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1 Customer Relationship Management @ Big Bazaar & Reliance Mart RETAIL MANAGEMENT

Transcript of 27116076 Crm at Big Bazaar Reliance Mart

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Customer Relationship Management @ Big Bazaar

& Reliance Mart

RETAIL MANAGEMENT

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TABLE OF CONTENTS

CHAPTER NO.

CHAPTER NAME PAGE NO.

Chapter 1 Introduction 1

• Meaning of CRM

• Goal of CRM

• Evolution & growth of CRM

• Options for implementing CRM

• Various aspects of CRM

Chapter 2 Research methodology 8

• Objective of research

• Type of research

• Data collection technique

• Sampling procedures & sample size

• Limitations of the research

Chapter 3 CRM @ Reliance Mart

Chapter 4 CRM @ Big Bazaar

Chapter 5 Customer’s opinion about CRM @ Reliance Mart & Big Bazaar

• Sales person’s assistance

• Expectation fulfilment

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SUBMITTED BY:

• Deepak Majhi 03• Nancy 05• AritroMukherjee 07• Raja Rowin 35• Gunjan Parmar 42• Lalit Mukul Kindo • Vijay Mishra • Anuradha – 63• Anurag Singh – 69• Ritu Kumari - 77

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• Discounts & failures

• Product arrangement

• Accessibility

• preference

Chapter 6 Comparison between CRM @ Reliance Mart & Big Bazaar

Chapter 7 Conclusion & recommendation

INTRODUCTION

“it is not enough to have great qualities, we should also have the abilities to manage them”. The same concept can also be applied in an organization. For e.g. a company may produce a very high quality products but it won’t be able to succeed if it fails to manage or satisfy their customers.

According to Harward Business Review “an exceptionally satisfied customer is 6 times more likely to buy again as one who is merely satisfied & only 5% increase in customer loyalty can boost profit from 25% to 85%”.

Thus all these quotes & experts opinion highlights the importance of Customer Relationship Management. Customers are considered to be king of every business enterprise and loyal customers are the backbone of their business. So customer satisfaction is the primary motive of every business which can be attained through effective CRM (Customer Relationship Management) policy

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1.1 Meaning of Customer Relationship Management (CRM):

CRM is a comprehensive strategy & process of acquiring & retaining customers to create superior value for the company as well as the customers. It consists of the processes a company uses to track and organize its contacts with its current and prospective customers. To support these processes, various CRM Software like SAP, ORACLE Sales force.com etc. are used. These software record and store information about customers, various customer interactions, their problems etc which can be accessed by employees in different departments of the company. These information are used by the organization to make future plans that can satisfy the customer on a better way and retaining them for a longer period.

1.2 Goal of CRM:

The goal of CRM is to provide improved services to the customers, and to use customer contact information for targeted marketing.

1.3 Evaluation and growth of the CRM :

CRM passes through three generations such as 1st generation in 1990, 2nd generation in 1996 and the 3rd generation in 2002.

In 1st generation following systems were applied for CRM:-

➢ Call centre management-

It is a web based CRM technology, the enables users browsing a company’s web site to leave a phone number where company representative can call back with more information.

➢ Customer service support-

It is a part of a company’s CRM department that interacts with a customer for their immediate benefits.

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➢ Sales force automation-

It is software that automates business tasks like inventory control, sales processing, customer interaction, etc-.

➢ Campaign management-

It is a planning, executing, tracking and analyzing of direct marketing campaigns.

In 2nd generation following improved systems were used for CRM:-

➢ Integrated customer facing front end-

It is face to face interaction between the customers and sales man. This system is used for marketing, sales and services.

➢ ERP integrations-

ERP stands for Enterprise Resource Planning. It is a business management system that integrates all functions of the business.

➢ Customers analytics-

It comprises all the programming that analyzes data about an enterprise’s customers for business decision.

➢ Complete web integration-

It allows end users to have access the data function of a serve hosted application through internet browser window.

In 3rd generation the strategic CRM was followed and is continuing-

Strategic CRM updates and expands the original content and combines into one, convenient value that guides users through the entire CRM implementation process, from strategic planning software.

Scope and goals of different generations:-

There is successful increment in the scope of CRM from 1st generation to 3rd

generation. In 1st generation the scope consists of service function and sales function, in 2nd

generation it includes another function i.e. marketing function and in 3rd generation it includes entire function of the organization.

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Goals of the CRM have also changed with better customer service from 1st generation to 3rd generation. In 1st generation the goals were improve service operation and increase sales efficiency, in 2nd generation reduce cost of interaction, improve customer experiences, and increasing the customer interaction; in 3rd generation cost reduction & revenue growth and competitive advantages.

1.4 Options for Implementing CRM:

Increasing customer is not the ultimate objective of any organization but to retain customer and t build long term relationship with them is important. It is only through CRM that a prospect can be turn into customer and then finally into a client. But to achieve these any organization require proper implementation.

But at the same time CRM implementation is a challenging task because it ties together many people, process, technologies within the organization which are separate from each other.

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1) IN HOUSE DEVELOPMENT- This means all the strategies, processes are developed and implemented within the organization.

Advantage-

1. It is tailored made according to organization needs and structure thus is flexible as compared to others.

2. Avoid dependency on others be it software or outsourcing.

Disadvantage

1. It is at the same time expensive2. And comparatively takes longer time depending on the organisation.

1) BUY LICENSED CRM SOFTWARE- This is purchasing software and implementing in organization.

Advantage-

1. Usually the maximum chance of success.2. It just need to install and trained the workforce accordingly.

Disadvantage-

1. Again it is expensive because of many costs as license cost, renewal cost etc. associated with it.

2. Adding new software with change is a complex task.

1) OUTSOURCING A MANAGED SERVICE- This means hiring from outside.Advantage-

1. Most of the times lower cost.2. Can adopt “pay- as- you go” approach with visible result.

Disadvantage-

1. For any new requirement needs to contact the company and pay for the development.2. Also there is a risk of losing CRM solution investment if outsourcing company goes

out of business

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Implementing CRM: The Decision Process

Purchase and install a complete CRM solution from a vendor

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YES

Entirely outsource the CRM application

process

Implement an enterprise -wide CRM program

Stage -wise implementation

DecisionTo

Implement

CRM

In house development

STAGEWISE- In this CRM software is offered in different, independent modules, according to specific department needs.

Company buys sales automation software and contact management module from different providers.

ENTERPRISE WISE CRM SOLUTION- This is composed of different modules from same providers; it is implemented as a whole by connecting different modules and existing database.

1.5 VARIOUS ASPECTS OF CRM

CRM includes many aspects which relate directly to one another:

• Front office operations — Direct interaction with customers, e.g. face to face meetings, phone calls, e-mail, online services etc.

• Back office operations — Operations that ultimately affect the activities of the front office (e.g., billing, maintenance, planning, marketing, advertising, finance, manufacturing etc.)

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RESEARCH METHODOLOGY

Research is a systematic and objective investigation of a subject or a problem in order to discover relevant information or principles. Research methodology is basically the method of how to collect data. The information regarding our research are as follows:

2.1 Objective of our research: We wanted to understand as well as compare the “customer relationship management” followed by the Reliance Mart and Big Bazaar.

2.2 Type of research: Our research was empirical kind of research since we were dealing with the behavioral or qualitative aspect of customers and not the quantitative data’s.here we were not supported with any exterenal data nor were adopting any secndory data to do our reaserch.

2.3 Data collection and analysis: collection, and analysis of the information gathered by Interaction with employees and customers and also by observing activities of the employees. For better understanding of CRM in Big Bazaar and Reliance Mart we also had prepared a questionnaire for both customers and managers.

2.4 Sampling procedure and sample size:persons selected by us were randomely selected .and were from different age group,sex and educational backgroun .this diversification was done to measure the different choice and preferences prevailing in customers demographycally different.

2.5 Limitations of our research:

1. Our sample size was composed of only 20 customers which is extremely small sample to represent entire population of customers who visit in these two retail stores.

2. No demographical or psychographic differences was considered before choosing the customers for interview purpose.

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3. many of the policies which were not in force due to smaller market potential their description is also been provided by managers.

CRM POLICY OF RELIANCE MART

CRM policy of reliance mart can be divided into four major parts, namely;1) Customer loyalty2) Customer retention3) Customer communication

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CHAPTER-

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4) Customer gratification

There exists a blanket customer relationship programme called the reliance one membership programme for the purpose of maintaining customer loyalty. The membership programme is a very simple one where a willing customer is required to fill a form giving personal information and he gets a temporary card which will be made permanent after six months.On each purchase of rs. 100 the customer gets one redeemable point on the production of card at billing counter. The collected points can be redeemed in form of discounts on future purchases on demand of the customer.The customers also get the opportunity of availing four different kinds of insurance on the payment of a nominal fee. For example a customer can get an accidental death insurance of rs six lakhs on the payment of rs. 400 only.Other forms of insurances are disability, hospitalization and home insurances.The members of relianceone get the opportunity of taking part and winning prizes by the way of lucky draws on regular intervals.

Customer retention policy implementation is at the zonal level. Generally each state is regarded as a zone and the offers and discounts in a zone are not available in other zones. Such policy helps reliance retail to understand and capture the local markets better.The products which show improvement due to offers and discounts on them are repeated with these offers again so as to retain the sales of the customers who bought it the last time.Also such the days best offers are constantly announced in the store making the regular customers aware about them.Maintaining a good store ambiance is also a part of customer retention policy of reliance retail. Clean and hygienic environment with properly and well spaced products along with a uniform color theme attracts the existing customers to the store again and again.A fast billing system and good and easy grievance handling system which can be accessed thru customer service desk and company website, ensures that customers feel satisfied with the store management. Less harassment to customers means better customer retention.

Communication to existing customers takes the form of sms and e-mails, generally sent to reliance one members. They get information about ongoing offers and also information and latest news about their nearest stores and the company in general.Another source of customer database is the information collected during the organizing of special events in the stores. Customers participating in such events provide their contact information which are also used in form of database for communication purposes.Thank you and festive cards on special occasions are an innovative way of communicating with the customers.

Trained salespersons make customer gratification very easy. A simple thank you with a smile goes a long way for the store to keep the customers happy. The special events organized by the stores across india are also a way to gratify the customers by allowing them to play and win prizes.Gift vouchers and discount coupons are an attraction for the customers and give them the feel that the store cares about them and their money.Local customers many a times make limited personal contacts with the store staff just like that made at a kirana store and help the store to some extent to maintain a relationship with the customers.

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The implementation of the policies brings out certain limitations in them. Few major ones are as followsThe personal contact numbers of reliance one members are open to tele marketing calls from various marketers as they leak out of the reliance retail’s database, causing unnecessary harassment to customers.The customer communication policy is less followed in small towns and cities and is more concentrated towards the metro cities.There is a common crm policy for both reliance fresh and mart. This should not be the case as both the stores offer different kinds of merchandize and generally attract different kinds of customers. Reliance retail generally delays the processing of permanent membership cards to those customers who have not paid for such a card. Customers have been waiting for over three months for their card. Those who have paid the nominal fee of rs. 50 get their permanent card within 15 days but the rest who have optioned not to pay the fees do not receive the card until too late.Unmanned billing counters create long queues at the open counters. This creates impatiens in the customers as they expect faster billing at the stores and do not want to stand with too much of goods held in their hands while billing.

CRM @ BIG BAZAAR

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CHAPTER 4

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✔ Database is formed through the issue of future card and card is of three types silver card, gold card and sakthi card. Sakthi card is issued to ladies and this card provides, free sugar(1 kg) per month.

✔ Customer profitability analysis (CPA) is done on the basis of transactions made through the future cards.

○ Platinum customers (most profitable).○ Gold customers (profitable).○ Iron customers (low profitability but desirable).○ Lead customers (unprofitable and undesirable).

✔ Differentiate customers in terms of: (1) their needs and (2) their value to company.✔ Interact with individual customers to improve the knowledge about individual needs

and to build stronger relationships.✔ There are four type of analysis done for analysis of CRM✔

○ Periodic Surveys: It’s done on quarterly, its an overall survey done by the future group authorities and CRM is a part of it.

○ Customer Loss Rate : ○ Mystery Shoppers: They pose as normal customers perform specific tasks—

such as purchasing a product, asking questions, registering complaints or behaving in a certain way – and then provide detailed reports or feedback about their experiences

○ Monitor Competitive Performance

✔ Complaint Handling Procedures :

• Screening And Logging -- The type of product or service;

manufacturer/brand name; model name/number; date of purchase/contract;

warranty expiration date; salesperson; cost of product/service; date problem

occurred; and a description of the problem is listed. This allows organization to

exercise control, and assure proper follow-through.

• Investigating -- customer's explanation of a problem provides much

information. Nevertheless, to assure they have all the information needed for a

thorough review of the facts involved, by:

○ Researching in-house records on the customer;

○ Requesting receipts, or other records;

○ Inspecting the product, or service performed; and

○ Following-up with the customer for any necessary additional information.

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• Acknowledging -- When Big Bazaar cannot resolve an issue immediately, it

is important to let customer know that the matter is receiving attention. Customer

is given information about how long it will take to complete action on the

complaint. If there is further delay, it’s made sure to advise customer why and

when Big Bazaar expects to have an answer.

• Formulating A Solution -- solution is made to be consistent with established

customer relations policy and important criteria are taken into account:

○ Contractual and/or warranty obligations;

○ The customer's expectations;

○ expectations of the customer;

○ The cost/benefit of alternative solutions;

○ The probability and cost of customer seeking redress in some other way;

○ The comprehensiveness and fairness of solution;

○ ability to perform the solution; and

○ What to do if the customer rejects solution.

• Responding -- The response is made clear and appropriate. The customer

must understand the response, and the response must address the issues raised in

the customer's original complaint.

An explanation of decision preserves the goodwill of customer, even if the decision

itself is adverse.

• Following-Up – Customer is contacted following response to verify whether

or not the matter has been resolved satisfactorily. If customer is unhappy with

response, organization refers the matter to a third party dispute resolution

mechanism for assistance.

✔ Steps Involved in customer Satisfaction through Service:

○ Seeing problems from the customer’s perspective

○ Managing customers' "moments of truth"

○ Communicating effectively through better listening

○ Analyzing how customer perceptions are formed

○ Managing anger and other service behaviors

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○ Dealing with long-term consequences of service breakdowns

○ Negotiating solutions

○ Generating an action plan for improved on-the-job effectiveness

CUSTOMER COMMUNICATION:

Future group maintains its records of customers by observing their purchasing habits & categories them into various groups like high revenue, moderate revenue & low revenue customers. They communicate to the customers through various medium like SMS,E-mail, Mobile vans, Print media etc.This is the way to built a strong presence in the existing customers & prospective customers. Presently they are using oracle software to maintain database. Recently they have tied up with California based firm GREENPLUM to provide new software for data warehousing.

The company boasts strong share of its profits from top line customers who provide them around 70% of their revenues in total. The company can said to be going on the famous management principle i.e. 80/20 PRINCIPLE which says that 20 percent of variables cause 80% effect. In big bazaar it can be related to the fact that 20% of its top line customers provide 80% of its revenues in a year. This is the reason why the retail giant is focusing strongly on customer retention in order to boasts its sales numbers substantially.

CUSTOMER GRATIFICATION is an important element of a sales process. Every company should survey their customers in order to find out the satisfaction level among the consumers. Big bazaar also conducts periodic surveys in order to ascertain the satisfaction level in their consumers. Various activities are done in order to enhance the shopping experience among buyers & various offers, discount coupons; exchange offers are initiated by the firm in order to develop a good satisfaction level in their existing customers. Special coupons are given to customers who can be redeemed by the costumers in their future purchases from the store.

CUSTOMER PERCIEVED VALUE (CPV) is calculated by the retail store in order to asses the costs and benefits received & given to the buyers. The following are some key features of CPV

1. CPV is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternative.

2. Total customer value is the perceived monetary value of the bundle of economic, functional & psychological benefits customers expect from a given market offering.

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3. Total customer cost is the bundle of costs customers expect to incur in evaluating, obtaining, using, disposing of the given market offering, including monetary, time, energy & psychic costs.

LOOPHOLES:

The retail store has also various loopholes especially here at ranchi.The major drawback which was found out initially was lack of proper parking place but now it has been corrected to some extent. Secondly the store is very slow in execution of online orders which is given through company web portal “FUTURE BAZAAR”. To quote a few examples of late delivery Mr. David Kerketta,a resident of lalpur-peace road purchased a furniture for Rs 37000,the date of scheduled delivery was 15th of November,2008 but he received his order 37 days late. One more incident of such late delivery is MR Pradeep Kumar, a resident of Upper Bazaar who purchased a dining table for Rs. 15000,but as usual he got his final delivery a whopping 65 days late than the scheduled date of delivery. So these incidents speak a lot of inefficient delivery. The other drawbacks are inefficient billi.ng counters as they are not updated with the current offers and schemes. Also the billing counters remains unmanned that add to the problem of customers who needs to stand in long queue in order to get their purchases billed. The other problem is related to the slow processing of applications of membership cards like Shakti card, future cards etc.It takes around 30 days minimum to become a member of future card schemes. This is very slowly considering the industry average of 15-20 days to process a card. Finally the contact numbers of customers are open to the telemarketing personnel as they get the database from the future group through some sources or the other.

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CUSTOMER’S POINT OF VIEW

1) Sales Person’s Assistance: This refers to the extent of help an individual gets from the sales person present in the store in choosing a particular product or in case of any query. There can be two instances i.e. inadequate help or excess help. Inadequate help is a very case because most of the time sales person is there to solve our queries. Instances of excess help can arise which makes the customer feel that the person is interfering in his decision or pushing the product to him.

50% people preferred the sales person assistance of reliance mart and only 35% preferred Big Bazaar in this respect. 15% people were neutral that means they thought it to be the same in both the stores or they didn’t need any such help from the sales person.

2) Expectation Fulfilment: every customer has certain expectations when he visits a store. This expectation will vary from person to person. It can be getting a particular brand of product or particular quantity or variant of the product.

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55% people felt that their expectations are more fulfilled at Big Bazaar while 45% preferred Reliance Mart. This may be because of greater product depth at Big Bazaar than in Reliance Mart.

3) Discounts & Offers: these are announced from time to time to lure customers to buy more.

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60% people preferred the Discounts & Offers of Big Bazaar while only 40% preferred that of Reliance Mart. This may be because more people are aware of the discounts offered by Big Bazaar due to their huge advertisements.

4) Product Arrangement: this basically means the sequence or order in which different varieties, brands or segments of products are arranged so that customers feel at ease in selecting the product of his/her choice.

55% people preferred the product arrangement of Reliance Mart while 45% preferred that of Big Bazaar. This is because Big Bazaar has large space due to which products are more fragmented or scattered on the contrary Reliance Mart has smaller space in which products are more logically arranged. Also it has more space between the shelves which provide ease of walking to customers and they think less space means less energy wastage.

5) Accessibility: it refers to the reach of the store to the customers.

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50% people preferred Big Bazaar, 39% Reliance Mart & 11% were neutral that means accessibility doesn’t matter to them. Majority likes Big Bazaar because it is situated in the main city while Reliance Mart is located at a very posh area which is very far from the main city.

6) Preference: it refers to the preference of the customer regarding making a choice between the two stores i.e. Big Bazaar & Reliance Mart.

On the whole 65% people prefer shopping at Big Bazaar and 35% people preferred to do shopping at Reliance Mart. This may be because of any of the above mentioned reasons.

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CONCLUSION

• Transformation by integrating customer facing front-end with back-end systems and partners and suppliers.

This will effectively help in generating better filtered data source from feedbacks received. Also the feedbacks will be dealt with in a much more careful and professional way.

• Growth of CRM facilitated by growth of IT.

In this age of Information Technology an effective IT planning on the CRM can help the organization earn a lot of repute.

• New database solutions.

This will help to filter and clean the raw data received from feedbacks more efficiently.

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• Mutual benefit through CRM.

The stores and their customers can mutually benefit through the application of CRM. So at this “era of customers”, the companies should project themselves as customer oriented as possible to help them benefit in a long term survival plan.

• Effective segmentation of customers.

With more and better quality of data, this can be done very easily.

• Enhancing the shopping solutions.

This is the age of innovation. Especially in Indian markets, low cost innovation is the ultimate tool to win the battle for the companies. Thus, the companies need to be innovative with their ideas and always try to deliver the customer with some added value for their purchase.

RECOMMENDATIONS

Many CRM project "failures" are also related to data quality and availability. Data cleaning is a major issue. If a company's CRM strategy is to track life-cycle revenues, costs, margins, and interactions between individual customers, this must be reflected in all business processes. Data must be extracted from multiple sources (e.g., departmental/divisional databases such as sales, manufacturing, supply chain, logistics, finance, service etc.), which requires an integrated, comprehensive system in place with well-defined structures and high data quality. Data from other systems can be transferred to CRM systems using appropriate interfaces.

Because of the company-wide size and scope of many CRM implementations, significant pre-planning is essential for smooth roll-out. This pre-planning involves a technical evaluation of the data available and the technology employed in existing systems. This evaluation is critical to determine the level of effort needed to integrate this data.

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Equally critical is the human aspect of the implementation. A successful implementation requires an understanding of the expectations and needs of the stakeholders involved. An executive sponsor should also be obtained to provide high-level management representation of the CRM project.

An effective tool for identifying technical and human factors before beginning a CRM project is a pre-implementation checklist. A checklist can help ensure any potential problems are identified early in the process.

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