British Institute

ogy & E-commerce

Program: MBA (INNOVATIVE MANAGEMNET)

SESSION: Jan 2011

SUBJECT: CUSTOMER RESOURSE MANAGEMENT

SUBMITTED BY: RAHAT ALI

STUDENT ID: 41564

SUBMITTED TO: Dr. HASSAN GILANI

DATE: 16 MARCH 2011

 Table of contents

1. Abstract
2. Introduction
3. Concept and purpose of CRM
4. Benefit of using CRM
5. Application architecture of CRM
6. Types of CRM
7. Tesco background
8. CRM implementation in Tesco plc
9. Conclusion
10.References

Abstract:
 In this course work i will be aiming to analyse the use of customer relationship management.
I have Chose Tesco store for this course work where I worked as cashier for 3 years and I
think I can apply CRM concepts and theories to this organization. I will discuss the CRM
definition, concept, purpose and an analysis that how this can help any organization in order
to generate more revenue.

INTRODUCTION:
Customer relationship management deals with the one of the greatest resource of
management. This is the most important resource for almost every organization because it
deals with customers. They are the one who bring the revenue and business to the
organization so that’s why CRM is important.

According to business link website “Customer relationship management helps business to

gain an insight in to the behaviour of their customers and modify their business operations to
ensure that customers are served in the best possible way”. Available from:
http://www.businesslink.gov.uk/bdotg/action/detail?
itemId=1075422931&type=RESOURCES [Accessed 16th march 2011]

Concept & purpose of CRM:

Basic purpose of CRM is to understand the customers so it capitalise on customer
relationship and its ongoing improvement. This can be achieved by knowing your customers,
their behaviours, shopping habits, preferences, and opinions. We can also improve CRM by
improving customer services and marketing in a different way.

According to Butler (2000) “customer relationship management is an approach that

considers various techniques and strategies other than applying information technology or
mainly the internet”.

It is a strategy widely implemented in different companies in a relationship to a customer and

sales. The main objective is to retain the existing customers, finding and bringing new
customers and also to reduce the cost of the marketing as well. It also involves using
technologies in order to automate and synchronize the business function.

CRM (customer relationship management) is also considered an information industry as well,

as it terms for methodologies, software’s, and Internet function that help an organization to
manage customer relationships in an effective way.

For example, the company may build a database of their customers that describes
relationships in comprehensive detail so that management and salespeople’s, and perhaps the
customer directly may access information, which match the customer’s needs with products,
offerings, remind customers of services, and know what other products customer had
purchased.

As CRM is the abbreviation for customer relationship management. And there are few
essential aspects of CRM which are follows as under:

 Understanding the customers

 Retaining the customers via better customer services
 Attracting the new customers
 Wining the new customers and to Increase revenue
 Decreasing the customer management costs
CRM solutions can provide with the customer data which can help you provide them services
and products that your customers may want, if better customer services s provided, cross-sell
and up sell more efficiently, close matters, retain customers and understanding who is the
customer.
Internet and the technologies have change the way of CRM strategies because of
technological change has change the behaviours and shopping habits of the customers and
that’s why companies need to use the new ways to collect the data from them.

CRM uses the IT enabled strategies in order to targeting, retaining, and identifying the best
mix of the customers. And that’s why CRM relies too much on the technologies; however the
management philosophy states that the company’s goals can be achieved by identification
and customer satisfaction. And strategies for a better CRM system needs to manage, collect
and link all those information of the customer which you need for marketing purpose and
information which helps you sell services more effectively and to the right person.

Benefits of using CRM:

By using the CRM in the company can be very beneficial in many ways such as
1. Decrease in total cost
2. Effective decision support
3. Efficiency
4. Quality
5. Company ability
6. Customer attention

In order to achieve all these objectives it is important to implement the CRM system in the
company. And required to have customized solutions which can improve the customers
requirement. The relationships with the customers are highly required in order to achieve the
above benefits.
Application Architecture of CRM:
There are three levels or application architecture of CRM which are as follows:

1. Operational CRM:
Operational CRM supporting the "front office" business processes, which include customer
services (sales and marketing). Tasks from these functions are put forward to employees
answerable for it, and the information required for carrying out the tasks and to cooperate to
back-end applications which is provided and the activities with the customers are
documented for references.

2. Analytical CRM:
Analytical CRM is about to gather all the data from operational CRM. Which is analysed for
the segment the customer in order to identify the cross selling and up selling potential. This
process is continuing and repeated process. The decision is generally based on the previous
analysis from the feedback and so business decision get refined this way. There are different
application softwares which have the functionality of the business intelligence.

3. Collaborative CRM:
Collaborative CRM deals with interactions with the customers via all the channels (personal
letter, fax, phone, web, e-mail) and it supports and co-ordinates the employees, teams and
channels. It is a way that involves people, processes and data together so companies can
retain their customers as well as attracting new customers. The data or activities may be non-
structured, structured, conversational, or transactional in nature.

TYPES OF CRM:

(a) Sales force automation

Sales force automation (SFA) uses software’s to all process of the sales, minimizes the time
of sales representatives need to spend on each process. That’s allows salesmen’s to convince
more customers in a minimum time.

(b) Customer service and support

This Recognizes the service is a major factor in gaining and retaining customers, as
organizations are rapidly turning towards technology to improve their customers experience.
While it aims to increase company efficiency and minimize costs.
(c) Marketing:
Marketing for CRM systems helps the company to identify and target potential customers and
give information for the sales team. Major marketing technique is following and measuring
multichannel campaigns, such as, email, search engines, social websites, telephone and mail.
Prospect Relationship Management (PRM) solutions track the customers behaviour and
habits from first contact of sale, active sales process is often cutting out altogether.
In a web-focused marketing CRM solution the organizations develop and find out the specific
web tasks that could help develop the client relationship. These activities may include as free
downloads, online contents, and online web presentations.

(d) Appointment
In the most customer oriented businesses, scheduling and creating the appointments is one of
the main activity. In this you need to get in touch with the customer and agree on the time and
place for meeting for sales meeting or to deliver the customer services. Appointment CRM is
an automated system which offers the suitable time for appointment for the customers. Which
can be through the websites or email? Appointment CRM can be used for the obtaining the
information for the marketing purpose. This is done by integrating it with the marketing
CRM system where the information is captured and stored.

Tesco Background:
Tesco was founded by Jack Cohen 1919 AD when he was selling surplus groceries from the
stalls at well street market, hackney, east London. First store was open in 1929AD in burnt
oak, Edgware, Middlesex. Tesco name was derived by Jack Cohen by using T E S from his
Tea supplier (T.E Stockwell) and C O from first two letters of his surname which is Cohen.
His motto was “pile it high & sell it cheap”. Now Tesco is the world 3rd largest retailer
measure by the revenue, and second largest retailer measure by the profit. And in UK, leading
as a grocery market where it has 30% of the shares. It also expanded in to the non food
industry such as clothing, electronics, books, petrol, software’s, telecoms, financial services,
DVDs + music and insurance. Tesco is famous for expanding its number of stores in UK and
now in many other countries across Asia, Europe, and North America.

CRM implementation in Tesco plc:

As many of us know Tesco is famous for selling thing very cheap or very competitive prices
and that allows Tesco to have an impression amongst the people of selling product on very
low prices and that develop the trust between the company and clients. “Every little help” is
the motto of a company now a day’s which is kind of first line of communication between
customers and company.

Tesco is implementing CRM in a very effective way and so far very successful in order to
achieve customer relation management. As we know that CRM tend to encourage more
customers and to involve them in the shopping so much that company develop a kind of
relationship. As we have discussed in the Tesco background about the few achievements of
Tesco, which are very impressive and consistent. And that is due to their effective approach
towards CRM. They are also working to sustain what they have achieved and to increase
more revenue and more market share.

Tesco have introduced the club card in a mid of 20th century and is very famous amongst the
customers of Tesco’s. And in my point of view this is the most effective strategy of customer
relationship management which Tesco has implemented. In this strategy basically club cards
are given to the customers with their permission and asking them to use it in order to get club
card points and those points will benefits them by discounts and vouchers which can be used
against the payment. By doing that Tesco is not only able to retaining customer by giving
them incentives but also Tesco is able to find out customers shopping habits and purchasing
behavior. This allow Tesco to get a very powerful data base which every company wants to
know. And by this way company will know what are customers buying and how much they
are spending, this will allow the customer relationship management to give incentive to the
customers to explore other parts of the stores. This also allow the Tesco management to know
their high value customers and some time they called by the managers to show them value for
the company. And also gives opportunities of different benefits.

There is another very effective strategy implemented in Tesco which is use of information
technology and developing the website which is www.tesco.com and Tesco direct, where
customer can buy the products online which can be deliver to the door steps of the clients.
Loyalty club card are also usable in online transaction and to giving opportunities for
customer to have more points and benefits.

Tesco also established financial services in 1997 which was known as Tesco direct services.
This helped the company to extend the relationship and allowed to give more valuable
services to the clients. Company is able to meet their customer requirement in this way and so
they can provide their product or services more efficiently and effectively. The approach of
Tesco with regards to CRM is a very good example of integration of management of
technological and organizational objectives.

Tesco approach to the customer relationship management is conception of the requirement

of customers, and bringing together the functions to get the market objectives which is
attracting new clients and to make sure of efficient communications with customers.

Tesco also communicates with the customers via advertisement and approach to the public
relation in order to generate loyalty with customers. This help in making more profit and
revenue as it is also the part of marketing approach.

Tesco used the customer relationship management approach as part of integrated marketing
approach, which helped the company to communicate with the customer so effectively and
efficiently. This approach is highly considered by Tesco management in order to ensure the
customer consideration and so the customer can remain as loyal and valued customers.

Conclusion:
In the above analysis of Tesco has used a lot of different strategies and techniques in
order to achieve the customer relationship management. Where marketing campaign also
develop in accordance to the CRM. As giving a motto like “Every little help” is one of those
which emphasise on customers. As customers are the main source of revenue and profit. This
analysis shows that Customer relationship management approach is used very professionally
by Tesco. And by giving customers discounts and incentives they enabled to increase their
revenue and profit. Club card approach made the customers loyal to the company and able to
attract more customers. The data base help the customer requirement and different segments
of clients.
 As I discuss before about concept and purpose of CRM and benefits of CRM. And
according to what we have discussed Tesco is one of the prime example for implementing
those concept in to their organization and Tesco becomes one of the most competitive and
successful retail chain store of the world. And in terms of profit and revenue CRM plays a
major role to increase share value of Tesco.

References:
1. Pervaiz K. Ahmed and Charles D. Shepherd (2010) Innovative Management,
Context, strategies, systems and processes.

2. Customer relationship management case study (online) at

http://www.engsc.ac.uk/downloads/CustomerRelationshipManagement.pdf
Accessed on 4 April 2011

3. Kristin Anderson and Karol Kerr (2002) Customer Relationship Management, by the mc graw
hill companies.