A Study of Tesco
In the recent past the business strategy was to create mass standardized products supported by huge marketing and services thereby. Berry, et al 2002 suggested that if any business organization follows this old fashioned business model will obviously lose in the present competitive market. This became an important issue due to the modern technology which helps the customers o be aware of the updated goods and fashions as well as decreasing product segregation in the global market. Due to the constant changes in the present business world, the market has become more unstable.
This notion is against the recommendation of Weinstein & Johnson (2003) where they proposed that at least 75% of a business farm’s marketing effort should be more customers oriented which can be achieved by developing and retaining an effective relationship with the customers.
Business professionals who device strategies for marketing of their products uses relationship marketing where hey plan over time on a particular event to target their profitable customers, the golden egg giver, and retaining relationship with them.
Nowadays the approach of selling goods have been changed from short term quick scale scenario to long term business partner where the seller make a mutual agreement with the buyer as a partner of their business. As a result customers purchasing behavior is predicted as well as reduced operation costs for customers acquisition and referrals where the the business. (Lie and Nicholls 2000) The dissertation aims particularly at determining the relationship of the quality customer and its overall effect on the customer acquisition and retention based on the primary study of Tests.
This thesis mainly focused on the factors which is responsible for quality customer retention. As the customers are the essential part of business the impact of profitable customer is very much important for the business.
There is no other option to maximize profit without customers. Thus to determine these aspects of customer and seller relationship this thesis will try to focus on the case study of Tests and survey their customers relationship management.
1. 1 Aims and Objectives
Customer relationship marketing is a new concept to the present business world and has been proven one of the best approaches in customer retention.
However, this concept has taken the top place among the business professionals who really wish to establish their product in the market.
The present study intended to excavate into this concept and see how really it works specially the impact of customer relationship and finally evaluate the profitable customer relationship. It is expected that a proper explanation of these aims will help build a better understanding in the end. The research objectives defined for this thesis are:
- 1. To measure and examine significantly the features of relationship marketing installed at Tests.
- 2. To investigate the impact of customer relationship marketing on customer retention at Tests.
- 3. To explore the concept in marketing especially in retention and acquisition of customers.
- 4. To investigate the major elements of the relationship marketing which eventually affect the process of customer acquisition and retention.
2 Research Questions
Research questions are very crucial for conducting a study on a particular field. The research questions which have been selected for this thesis are:
- 1 . What exactly customer relationship marketing really do in the acquisition and retention of customers Tests?
- 2. What are the influential aspects of relationship marketing that have an effect on the retention and acquisition of the customers for Tests?
3 Background and rationale of the research
Satisfying customer is one of the greatest challenges of the business organization which has been widely endorsed. Now customer satisfaction has become one of the fundamental and very much important elements of business. In the last thirty years a number of reports and research work have been observed in the area of customer satisfaction (E. . Bolton, 1995; Perkins, 1991; Willie, 1991; Kale and Thru, 1997).
Maintaining interaction with the previous and potential customers is one of the important tasks of customer relationship management support system. Customer relationship or customer satisfaction is so important that it can reduce our energy and extra cost as well. The gradual development of relationship marketing has enabled the market to shift from transactional marketing to relationship marketing (Payne, 2009; Garmorons, 1994, Sheet and Participatory, 1994). Relationships with the customer, where transactional marketing system focused only n individual sale of products with a high volume and maximum efficiency.
Tests is one of the successful business organizations like Wall-Mart. Tests has always tried to maintain an effective or working relationship with its customers and the customers also give their feedback as expected to Tests.
The customers have been dedicated to Tests as they feel being important for Tests. Tests in 1995 established a system for their valued customer to notify them that they are the trusted partners. In this system Tests introduced Club Card for its customers and set an example of retail loyalty. In the retail business stores the main target is to retain the customers and keep them satisfied.
Tests has followed this scheme to enlarge their market, eventually the captured the whole European market and become the number one retail store of I-J (law 2009). In 1994 Tests hired a company called Dunham with an aim to analyses their customer based on their database.
After completion of the research done by that company Tests manager identified that they could earn more profit out of their same business if they become more aware about their customers choice and priority and pay attention to valuing their customers. Afterwards they took a scheme to value their regular customers and started to maintain relationship.
They opened complaint management desk and trained their managers accordingly to help the customers with their complaint. Strengthening customer relationship became very much important for Tests when they found that their valued customer started to believe in their services and quality, (Glen, 2011). Online marketing has become another important part of business expansion.
TESTS marketing management system has also paid their attention to the online customers who roam around the web sites for ordering their goods from their home.
They have defined their mission statement for their customer relationship as “to create value for customers to earn their lifetime loyalty’. Tests has adopted local approach for the marketing which is one of the successful techniques of their success. To be specific providing dominant brand in their outlets is also another reason of their success. Their retail store is famous for its cheaper prices, client oriented behavior and its values. Tests made it possible to capture more markets and areas due to its linkage with world famous companies and brands as well.
Tests adopted some measures at he local level specially building community relationships and profile in the attractive areas helps them build a great image among the public. Tests has managed to maintain chain stores in abroad which have made it possible for them to earn great profit from the stores. “fresh and easy’ is a popular market helps Tests in the expansion of its chain store to countries like US, China, Eastern Europe and South Korea. Tests has implemented the customer relationships marketing system specially in UK using various strategies for shopping like metro, superstores, convenience stores etc.
Product delivery is one of the innovative ideas in reaching the customer and making effective relationship.
Tests has earned the pride Tests was always one step ahead of the others as it first introduced delivery service through online by launching their website whom. Tests. Com. The online services became so much popular that it creates much better place among the greatest online traders. The website service also helped the company to raise the share in the market gradually.
The other benefit of the online service is that Tests could sell its non food item easily and thus can increase its profit.
On the other hand Tests has been identified as the highly developed companies to provide support with the information needed by the customers for example data of Tests club card. Tests planned to claim over the global market as a consequence they need to focus on the existing customers retention. The attention was to remain equal for all the markets. Tests created such place for trust of their customers that they did not need to worry about customer retention and customer acquisition.
Tests planned a structural developing strategy with which they can expand their market in every new place where markets are available.
Ultimate focus of the company was on the customer retention which was a must. They used to maintain a customer database which helped them most. To measure the major factors of the customer retention they need detailed information about the customers. All this was possible when the customers database was completed and an analysis done on them in 1995.
As the study was descriptive in nature it followed both qualitative and quantitative research methods. Two main researches approached, deductive and inductive, will be used in this study on Tests. Both primary and secondary data are necessary to radically discuss the subject matter.
Primary data collection technique will include surveys, interviews, focus group discussion and observation both participatory and non participatory. The total sample size would be 100 respondents who will attend both surveys and Figs.
The collected data will be analyses using descriptive and inferential statistical tools to critically discuss on the expected issues of customer relationship management specially customer retention, customer acquisition and customer margin. The study will try to identify the significant elements affecting profitable customer relationship. 5 Scope and Importance of the Research This study intends to identify and examine the nature of customer relationship marketing in respect to Tests in the I-J. It has been observed that in the last few decades the marketing strategy has changed from customer acquisition to customer retention and finally to customer selection. Customer relationship marketing is a crucial one which helps to identify serious customers, their choices and thus providing them with their goods. This relationship turns to long term partnership with frequent contact the relationship gets stronger in the future.
Besides due to the World Wide Web services especially the online survey has made customer relationship marketing more easily than before. It is well known that information is power, besides to study the customer behavior information is needed. So it has been observed that frequent online survey offered to the customer when they come specific question for the future researches. Internet has brought the world closer and several social network services like Backbone and Twitter on the internet has made it possible to gather information about particular issue more easily.
However, it is really DOD to know that Tests has understood the use of these online services and taken much out of it.
Profitable customer selection thus needs the relationship management system. Promotion of the products that have been sold by the company should be maintained and side by side the customer should also be observed seriously as they are the valued partner of the company.
1. 6 Summary of Chapter
The first chapter is about what the thesis is. The main objective of the study is to identify the factors that affect customer retention and acquisition on base of customer relationship management.
The research is based on Tests Company a detail giant shop of I-J. In the first chapter it has been discussed that marketing strategy has moved from customer’s retention to acquisition and at present to their selection. It happened in the last few years. The target of the study is to explore the main areas of the customer relationship marketing and examine rigorously the effect of the factors like customer retention, acquisition and selection. Tests, a popular retail business organization started it Journey to earn maximum profit from his valued customer as it given its’ attention to its customers since 1995 and introduced customer clubs.
The social science research is a scientific study of the social element that is the society.
Social research comprises of such methodology which helps to study the attitude and behavior of the targeted sample in the society in time (Pan 2011). Study on Market helps to explore the customers of the market, their attitude towards particular products, like and dislikes needs or demands. It provides critical information to the organization who wishes to execute such appropriate marketing for the success of his company (Saunders et al. , 2009).
The main objective of this duty is to decisively examine the role of customer relationship management and the way it manipulate the customer behavior toward customer retention and acquisition through the primary research. The study will try to answer all the research question with significant data and evaluate all the factors that influence the roles of customer retention and acquisition.
Research methodology helps to identify the problem and answer any question about the problem with the help of theory and empirical data (Katharine 2008).
3. Hypothesis HI :
The quality of relationship with the customer is directly related to customer attention. H2O: The customer relationship determines the customer satisfaction. HE: The better the customer relationship is the better is customer retention and acquisition.
1. 1 Techniques used for Research
Research is critical subject in the sense that it consists of several methods and techniques to identify the solution of different problems. There are two major methods widely used in the research field, one is qualitative and the other one quantitative methods.
To get into the problem and generalize on the base of theory and existing literature is the trait of Qualitative research method, where as he causal factors of the research (Saunders et al. , 2009).
As the subject matter of this research is quantitative in nature, to collect information and explain the data quantitative method will be followed for this study on Tests.
3. 1. 2 Research Philosophies
Any kind of research needs some background work with which it can device its methodology. Saunders et al. 2009) in their study described that the research philosophy is actually developing a background work for the research which would help complete knowledge and nature of the study.
The background work consists of al the insight, beliefs and theories and techniques as a broad structure which has been used to conduct research (Hoboken 2007). Researchers follow more or less four distinct philosophies of research. Positivism is one of the research philosophies deals with the subject with an objective perspective.
Therefore positivism is about the ideas or views that researchers use to measure or examine a social behavior or attitude through objectivity or subjectivity (Cooper and Schneider 2006). Muscular (2004) thinks Realism approach is that area which studies the empirical world with the existing acclivities at the current period of time.
Interpretive or social constructivism researches those areas where social values, norms, beliefs etc. Are the Judging element of the social problems as well as research issues (Easterly Smith, Less et al. , 2008).
There are two main categories or approaches which have been mainly used by the researchers: inductive and deductive approach. Inductive approach refers to the system where theories are framed based on the empirical observation of the experimental date; whereas deductive approach does the vice versa of inductive approach that meaner it verifies the data based on the already set theories (Saunders et at. , 2009)
3. 1. 4 Types of Research
Methods This particular thesis work, tried to comprehend the socio-cultural context of the customer within which they live (Myers, MD. 009 online), needs to follow the qualitative approach of data collection.
Qualitative research method involves observation and examination of the subject matter to understand about the social as well as human activities. Quantitative research methods include sample size determination from a particular population using different sampling techniques used o data analysis and interpretation thereby. The quantitative research methods also involve the probability or non probability sampling technique.
In this process data collected all are inform of statistical information which has to be prepared by the statistical tools and converts into public readable form format. (trochaic 2006).
1. 5 Primary Data
The thesis work needs to be fulfilled with the help of data collection which could be collected through existing research technique like survey, interviews, questionnaires and Figs. As this study is based on the customers’ perception so the information added for this study have to be collected by directly contacting the customers.
Successful data collection needs to follow the research outline and objectives. Primary data collection helps to get information about the target market by technique. The sample should be determined with the help of statistical rules to avoid error and ensure maximum representation of the population.
Primary data collection thus refers to the collection of data directly from the respondent as first- hand experience. (Saunders et al. , 2009)
3. 1. 6 Secondary Data
A research based on the information collected from existing literature or document or data analysis is secondary research.
Secondary research is mainly a study of the important documents like newspapers, Journals, research report etc on the relevant field to gain insight about particular areas which will help to give an accurate explanation about the subject matter.
This secondary research could be any kind of research based on any kind of information collected from past researches performed by any organizations, trade associations, government agencies or any consultancy firms (Saunders et al. , 2009).
3. 1. Pros of Primary Data
Research based on a primary data is much of controlled than the others. As in the primary data collection technique follows some stringent procedure to collect bias free, accurate and objective information.
As this process needs to collect information from the respondent separately, it takes much time and money as well. Besides primary data collection needs to be supported by a lot of desk research and background study on the particular subject area. Due to its strict procedures and system Amanda (2000) called it a tricky process of all.
On the other hand secondary data collection is very easy as it could be gathered from the internet with no cost or haply, found always at hand which only needs the research questions to be answered. But the secondary data mainly serves the duty to the primary researches.
Secondary data is available information about different subject matter. As secondary information is open and uncontrolled it needs much time to be confirmed about the validity and reliability of the information. So it is a challenge for the researchers to get his expected information and use that in his findings without spending any amount of money into it (Maria, 2008).
8 Comparison of Primary and Secondary Data
Research can be conducted by both primary and secondary data. There is some strict argument about the issue. Primary data is directly collected from the field which is not manipulated or even altered whereas secondary data has high chance of manipulation. Primary data is more reliable and valid as it comes from the first hand experience with an authentic source. Secondary data has question in its authenticity and reliability.
Besides primary data can be questioned and supported by any previous researches and the source of primary data is open and controlled.
3 . 2 Chosen Research Approach
This particular thesis work is complex in nature as it needs to conduct surveys on the customers and side by side analyses the subject matter rigorously. The research work thus will follow descriptive approach in explaining the events following both primary and secondary data. Previous work on this subject matter will help the empirical data analysis and help build an understanding about the customers’ relationship.
2. 1 Strategy for Research
A research strategy is very much important to elicit information about the target areas.
For this particular research work the strategy is to investigate and then explore essential part of the business like customer retention, acquisition and margin.
2 Research Design
There are four main research designs which have been used by the researchers. This study has mainly followed the descriptive research design with intent to examine the essential elements of the customer relationship management and the role of customer retention in profitable customer relationship management.
3. 2. Data Collection Tools
The task of data collection begins after a research problem has been defined and research design plan chalked out.
While deciding about the method of data collection o be used for the study, the researcher should keep in mind two types of data biz. , primary and secondary. First hand studies provide with the better ideas about the subject matter. Besides primary data collection technique involves bias free and new answers about the concepts and thus happens to be original in character.
Thus to address the issue and make a clear idea about the concept survey technique is one of the best techniques to elicit first hand information from the respondents.
2. 4 Focus Groups
Focus group discussion is another technique to collect data from the respondent in MME formal nature. Twelve to fifteen people participate in a discussion on a particular topic or subject area where they express their views, likes or dislikes and recommendations. In this study there are about 100 respondents who are members of TESTS club Joined in the Figs.
Several issues were selected for group of respondents randomly taken from the list of TESTS club. There were several groups who participated in the focus group discussion and help generate information for this study.
3. 2. 5 Interviews
Interview has been an effective technique to identify the problems or the good side f the subject matter. This study conducted two types of interview techniques to collect objective information. One is questionnaire interview conducted face to face in person interview with Tests customers and another type included telephonic interview that was actually done over the telephone with the Tests customers.
3. 2. 6 Direct Observation
Observation is a technique that involves systematically selecting, watching, listening, reading, touching and recording behavior and characteristics of living beings, objects or phenomena. Direct observation refers to the situation when the observer mains physically present and personally monitors what takes place. In this case the author intended to perform his observation at the stores of TESTS residing inside the United Kingdom. The direct observation is done on the customer relationship managers and sales representatives.
These persons who are directly related with the store activities know much about the customer because customer handling is their primary duty (Wilson 2008).
3. 2. 7 Surveys
Questionnaire survey is very effective in order to collect information from the respondents individually. This research has used in-person interview technique for he survey.
Sample survey in most cases has provided with good results as well as understanding if the respondents are properly selected.
There are few techniques of survey; among them face to face interview and telephone interview are common. Expensive than the other survey techniques. Mail surveys are another type which are also less expensive and can reach much greater audience than the others. This technique needs fewer budget compared to other survey technique but has a poor response or feedback rate.
3. 2. 8 Data Recording
Data recording is the essential part of the data collection. Whichever techniques the researchers use they have to ensure the quality of the data they collect from the field.
As the result of the study mainly depends on the collected information to answer the research question the data should be recorded efficiently and tactfully. Data collected from respondents using questionnaire interview need to be collected carefully by following all the rules and regulations to respond to the research work related to a particular area.
Data collection procedure may follow both systems: primary and secondary technique. In using secondary data in the thesis paper the authenticity and reliability must be ensured to accomplish the research objectives (Loveless, Sardonic et al. 006).
3. 2. 9 Data Analysis
The term analysis refers to the computation of certain measures along with searching for pattern of relationship that exists among data-groups.
Analysis of data in a general way involves closely related operations which are performed with the purpose of summarizing the collected data and organizing these in such a manner that they answer the research questions. Thus the purpose of data analysis is to prepare data as a model structure the information can be entered and a relationship teen the variables can be studied.
Making logical model and analytical table is the major objective of the study. Thus the researcher take preparations to collect information from the target group, edited, coded and then classified finally to prepare a table with which the author can infer about the subject matter or can make comments. There are several techniques and methods to data presentation and analysis.
3. 2. 10 Respondents
The sample of the study, which is selected for the study as the response provider, is called respondents. In this case the respondents are the customers, managers or the previous of TESTS.
Simple Random Sampling is a probability sampling technique to select respondent as a set of samples from the sampling frame. This particular technique has been used to collect data from the respondent.
A sample size of 100 respondents has been selected from the consumers of TESTS across the United Kingdom.
3. 2. 11 Techniques for Secondary Data Collection
The secondary data meaner which have already been collected by someone else and which have already been passed through the statistical process. Utilizing secondary data needs to be checked and verified of the sources from where it came from.
It may either be published data or unpublished data. Usually published data are available in:
a) various publications of the governments, b) various publications of foreign governments or international bodies and their subsidiary organizations, c) technical and trade Journals, d) books, magazines and newspapers, e) reports and publications of various associations connected with business and industry, banks, stock exchanges etc. F) reports prepared by research scholars, universities, economists etc. In different field and g) public records and statistics, historical documents, and other sources of published information.