THE IMPACT OF CUSTOMER RELATIONSHIP MARKETING IN THE

LUXURY RETAIL MARKET OF KUWAIT

A PROJECT SUBMITTED TO
UNIVERSITY OF MUMBAI FOR PARTIAL COMPLETION OF THE
DEGREE OF
BACHELOR OF MANAGEMENT STUDIES
UNDER THE FACULTY OF COMMERCE

BY
MOMIN MAZIN ALTAF

UNDER THE GUIDANCE OF

DR. MAMTA RANE

GURUKUL COLLEGE OF
COMMERCE GHATKOPAR (EAST)
2024-2025

1
 CERTIFICATE

This to certify that MR. MAZIN MOMIN has worked and duly completed her Project Work
for the degree of Bachelor of Management Studies under the Faculty of Commerce and her
project is entitled, "THE IMPACT OF CUSTOMER RELATIONSHIP MARKETING IN
THE LUXURY RETAIL MARKET OF KUWAIT" under my supervision.

I further certify that the entire work has been done by the learner under my guidance and that
no part of it has been submitted previously for any Degree or Diploma of any University.

It is her own work and facts reported by her personal findings and investigations.

Date: 10/02/2025

Name and Signature of Guiding Teacher:

2
 DECLARATION

I the undersigned MR. MAZIN MOMIN here by, declare that the work embodied in this
project work titled "THE IMPACT OF CUSTOMER RELATIONSHIP MARKETING
IN THE LUXURY RETAIL MARKET OF KUWAIT", forms my own contribution to the
research work carried out under the guidance of DR. MAMTA RANE is a result of my own
research work and has not been previously submitted to any other University for any other
Degree or Diploma to this or any other University.

Wherever reference has been made to previous works of others, it has been clearly indicated
as such and included in the bibliography.

I, here by further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

Name and Signature of the learner

Certified by
Name and Signature of Guiding Teacher

3
 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the depth is so
enormous.
I would like to acknowledge the following as being idealistic channels and fresh dimensions
in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me chance to do this
project.
I would like to thank my principal, for providing the necessary facilities required for
completion of this project.
I would also like to express my sincere gratitude towards my project guide DR. MAMTA
RANE whose guidance and care made the project successful.
I would like to thank my College Library, for having provided various reference books and
magazines related to my project.
Lastly, I would like to thank each and every person who directly or indirectly helped me in
the completion of the project especially my Parents and Peers who supported me throughout
my project

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 ABSTRACT

Customer Relationship Marketing (CRM) is the new competitive weapon for organisations in
the developed nations. The battle is not between nations or governments alone, it is amongst
corporations and businesses, a consequence that can mainly be attributed to Globalization
and the Internet. Many organizations are focusing on conquering the minds of consumers,
making them loyal brand followers and satisfying their individual needs with the help of
sophisticated CRM systems. Globalisation is the new era. Luxury Brands are the modern
cults, each one of them seeking to gain the largest customer base. The aim of this dissertation
is to carry out qualitative thematic research on the impact of CRM in the luxury retail
sector in Kuwait in terms of consumer buying behaviour and organisational success. It also
attempts to evaluate the awareness, presence, and actual implementation of CRM in Kuwait,
the business environment, the beliefs, cultures, perceptions and behaviours of the customers
in the Kuwaiti luxury retail segment. The research finds that CRM has a low impact on
consumer buying behaviour and there are other factors involved. The paper also attempts to
examine the objectives of CRM, its assets, liabilities, frameworks and implementation. Global
& Kuwaiti retailers can benefit from this study by better understanding the distinctive
contingencies prevalent in the Kuwaiti business environment.

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 INDEX PG.NO

Executive Summary 8

Chapter 1 9

Introduction 9
1.1 Theoretical Motivation of the Study 10
1.2 Hypothesis
10
1.3 Research Questions
11
1.4 Scope and Limitations
12
Background
13
An Insight to Kuwait’s Business Environment using
15
the PESTEL framework

Chapter 2
16
Research Methodology
17
2.1 Research Aims and Objectives
17
2.2 Research Design
18
2.3 Interviews
18
2.4 Background of the companies where research was
19
carried out
2.5 Reflective Journal 20

2.6 Data Analysis 20

2.7 Pitfalls of the Methodology 21

2.8 Validation 22
2.9 Ethical Consideration 23

Chapter 3

Literature Review 24

3.1 Customer Relationship Marketing 25

3.2 Optimizing Marketing and Customer Relationship 27

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Marketing using Information Technology
29
3.3 CRM Frameworks for the Luxury Retail Sector
31
3.4 Customer Relationship Marketing: Deficiencies and
36
Drawbacks
3.5 Distinctive Features of the Luxury Segment 38

Chapter 4
Analysis And Interpretation
40
4.1 Kuwait Luxury Market
43
4.2 The Impact of the Internet on luxury marketing and
consumer behaviours in Kuwait 45

4.3 Insights to Luxury Marketing in Kuwait 46

4.4 Implementing CRM in Kuwait: problems and 48

challenges for luxury retailers 50

4.5 The impact of CRM in the luxury retail sector of 52
Kuwait

Chapter 5
54
Findings And Suggestions
55
5.1 Essentials of Digital Marketing in Kuwait
56
5.2 C3E: Customer Experience and Expectation
Enhancement: The recipe for success 58

Conclusion
60
6.1 Assessment of Findings
61
6.2 Authentication: Relation of Research Findings with
62
Objectives
6.3 Recommendation 63

6.4 Further Research Direction 64

Bibliography 65

Annexure 70

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 Executive Summary

This dissertation explores the impact of Customer Relationship Management (CRM) on the
luxury retail sector in Kuwait, focusing on consumer buying behaviours and organizational
success. While CRM is a key competitive tool globally, particularly due to globalization and
the internet, this research investigates its effectiveness within the specific context of Kuwait.
The study examines the awareness, presence, and practical application of CRM in Kuwaiti
luxury retail, considering the local business environment, cultural nuances, and customer
perceptions. A qualitative thematic analysis reveals that CRM has a limited impact on
consumer buying behaviours in this segment, suggesting other influencing factors are at play.
The dissertation also analyses CRM objectives, assets, liabilities, frameworks, and
implementation strategies. Ultimately, this research aims to provide insights for both global
and Kuwaiti retailers to better understand the unique conditions of the Kuwaiti market and
optimize their CRM strategies accordingly.

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 CHAPTER 1
INTRODUCTION
1.1 Theoretical Motivation of the Study
Globalisation and the Internet have both redefined competitions. The last two decades have
witnessed remarkable changes in customer demand and loyalty, spearheaded by Customer
Relationship Marketing (CRM) as a new weapon to leverage these changes. Managing
customers, identifying their behaviour’s and retaining them have never been so complex.
Customers have a variety of options to choose from also they are more demanding than ever.
Their needs have become very complex and satisfying them has become equally difficult.
This has led to an increased attention being paid to „Customer Satisfaction‟ The emergence
of the Internet has led to its wide scale application in businesses. Internet marketing helps
firms establish interactive relationships with their customers and to satisfy them individually
(Zineldin, 2000). Globalization, computers, Internet and e-commerce etc. have all impacted
any organization‟s competitive scope and ability to build more sustained relationships
(Payne, 2009). The concept of “Customer is Key” is very popular in the west. The past
decade has also seen a rise of interest in CRM amongst executives, academics and the media.
Success stories such as those of Mercedes Benz, Rolex, and Credit Suisse‟s Loyalty Program
have heightened this interest. Companies selling luxury products or services have to
inevitably nurture good customer relationships and loyalty. Perceptions of luxury goods
change over time and can differ from place to place or person to person. CRM has emerged
significantly in the past few years globally, mainly because of changes in a number of vital
trends that include: a shift in focus from transactional marketing to relationship marketing
(Payne, 2009), a shift in focus from perceiving customers simply as an audience to seeing
them as key assets, and technological developments in managing and maximizing the value
of large chunks of data. Having a single-sales focus involves dealing with pre-mature
information about the customer and winning the customer at every sales encounter, a less
efficient and effective use of investment compared to one time acquisition and maintaining
sustainable relationships with them. Some authors argue that there is a very weak (or in some
research, even non-existent) relationship between customer satisfaction and retention (E.g.
Bolton, 1995; LaBarbera and Mazursky, 1983; Newman and Werbel, 1973; Kordick, 1988).

9
“A strategy that doesn‟t speak explicitly about customers and the competitive environment
will surely fail to generate and sustain a proper level of customer and competitive
consciousness in your company, especially in the important nooks and crannies were the
real work gets done” (Levitt, 1990). According to McKenna, 1991 technology has
transformed choice, and choice has transformed the marketplace, resulting in the emergence
of a new marketing paradigm. Technology has become so pervasive that it is virtually
meaningless to differentiate between technology and non-technology businesses.
Even though these changes in customer demand and loyalty are by no means a modern
development, the willingness to orientate businesses according to customer needs has gained
a special dimension.

1.2 Hypothesis
The main aim of the research is to investigate the impact of Customer Relationship Marketing
on the consumer buying behavior in the luxury market of Kuwait. This paper focuses on
identifying the scope of CRM and its impact on customer buying behavior in the Kuwaiti
luxury retail sector.
The next section describes the aims and objectives of the research. Further this chapter
discusses the research background along with the research problems, research questions and
the purpose of this study. This creates and outline for the topic and the theoretical areas that
are discussed in this research.
The chapter two provides a review of the literature, the theoretical frameworks and the
conceptual models of CRM. In this chapter, firstly, the researcher has introduced CRM, its
principles and objectives. This section also throws light on the importance of CRM processes
as described by various authors and its impact on consumers. CRM helps organisations to
know their existing customers by creating a database. It supposedly facilitates acquisition of
new customers and retention of old ones by maintaining relationships with them. This chapter
also talks about views on the relationship between CRM and customer satisfaction. Further
the chapter talks about how technology is used to optimize CRM. Lastly, the chapter
discusses the pitfalls of CRM.
The chapter three provides an insight to the Kuwaiti external business environment using the
PESTEL framework. The fourth chapter describes the research methodology.

10
The research uses a qualitative approach to collect data and information.
The researcher has used in-depth semi-structured interviews to gather rich and valid data.
This chapter explains about the entire research strategy. Data was collected from luxury
customers as well as from the various managers. The data has been analysed using a thematic
framework. The chapter discusses the strengths and limitations of the methodology, the
validation strategy and the ethical guidelines followed.
Chapter five provides recommendations for luxury businesses in Kuwait based on the
collected and analysed data. The recommendations include marketing strategies that
international brands and Kuwaiti retailers should use in order to improve customer loyalty,
retention, frequency and to gain competitive advantage. The researcher has also develops a
theoretical framework for effective marketing in Kuwait.
Chapter six is the conclusion to the research. It summarizes the thematic findings, the impact
of CRM in the luxury retail market of Kuwait and the recommendations made.

1.3 Research Questions

To guide this research in order to contribute in the field of CRM, consumer buying behavior
and luxury marketing the research tries to answer a few questions based on the objectives
discussed in the above section.
1. What are the particular features of marketing and CRM in the Kuwaiti luxury market?
2. To what extent does CRM influence consumer behavior in Kuwait‟s luxury market?
3. Is there a relationship between CRM and organisational success?

1.4 Scope and Limitations

The main purpose of conducting this research work is to contribute to the inadequate
literature and knowledge about the impact of CRM on consumer buying behavior especially
in a distinctive luxury retail market like Kuwait. Kuwait is a highly rich but small country
with distinctive values, perceptions, trends and consumer behaviors. The Kuwaiti people are
very rich and high spenders on luxury products. Luxury products are very important for the
people in Kuwait to distinguish between the social classes. Also, consumers in Kuwait are
highly brand oriented but disloyal. In Kuwait, Many CRM projects have failed. The main
purpose of this research is to study how CRM impacts the buying behavior of Luxury
customers in Kuwait. Another purpose is to identify the reason for these CRM failures.

11
Although globalisation and the Internet might have redefined the competitive platform and
given rise to CRM on the other hand researchers have found many pitfalls and liabilities
associated with the impact of CRM on consumer buying behavior. The luxury industry is
sophisticated and needs high concentration to understand the consumers. There are various
factors that influence the buying behaviors of people. A number of investigative studies have
reported that the percentage of satisfied brand switchers exceeds the percentage of
dissatisfied brand switchers (For e.g. Gierl, 1993; Reichheld and Sasser, 1990) and that there
is no significant relationship between customer satisfaction and customer retention e.g. (Klee
& Thurau, 1997). Many argue that that a 5% improvement in customer retention can result in
an increase in profits of between 25 and 85 percent depending on the industry (Christopher,
Payne, and Ballantyne, 1991; Reichheld and Sasser, 1990). Many researchers have declared
that CRM is vital for success, but it is a contreversial matter since consumer behavior is
affected by various social factors.
This entry shows GDP on a purchasing power parity basis divided by population, as of 1 July
for the year 2010 in U.S. Dollars .
Approximate GDP based on IMF and CIA reports at the end of 2010 in U.S. dollars based on
official exchange rate.

BACKGROUND
This chapter provides an Insight to Kuwait‟s business environment using the PESTEL
framework. There are many factors in the macro-environment that affect any organisation.
Tax changes, new laws, trade barriers, demographic change and government policy changes
are all examples of macro change. To help understand and analyse these factors analysts can
categories them using the PESTEL model (Political, Economical, Social, Technological,
Environmental and Legal).

An Insight to Kuwait’s Business Environment using the PESTEL framework

Political features: The Iraqi invasion of Kuwait in the year 1990 was a serious setback for the
nation, it was a year of complete chaos and destruction for Kuwait, but it did not stop them
from rebuilding and catching up as soon as the country was liberated by the US led coalition
forces in 1991. Twelve years later Kuwait played host to another massive military presence
as thousands of soldiers massed on the Iraqi border for the US-led campaign in 2003 to

12
disarm and oust the Iraqi leader Saddam Hussein. It remains an important transit route for
forces and civilians moving in and out of Iraq (U.S. Department of State, 2011). Kuwait is a
constitutional, hereditery emirate ruled by the princes belonging to the royal family (Al Sabah
family). The head of the state is called „The Amir‟ followed by the crowned prince who
succeeds the Amir upon his death. The national assembly has very limited role in the
selection of the crown prince and the prime minister (again a member of the royal family).
Other memebers of the national assembly and ministers are appointed thorugh formal
elections, where only Kuwaiti citizens can vote. Kuwait has maintained good foreign
relations with the rest of the world especially as a key ally of the United States of America.
Economic features: The state of Kuwait is a geographically small but economically wealthy
nation, with a high per capita income and GDP, estimated to be around $52,0002 and $131
billion3 respectively and is expected to grow over the years (CIA and IMF reports). It is an oil
rich country and accounts for around 10 % of the world‟s oil reserves. Petroleum accounts for
more than half of the GDP, 95% of export revenues, and 80% of government income (CIA,
2011; IMF, 2011). Trade (2010 est.): Exports--$63.27 billion of which oil constitutes 93%.
Imports--$21.61 billion f.o.b.: food, construction materials, vehicles and parts, clothing (U.S.
Department of State, 2011). Kuwait survived the economic crisis in 2008-2009 because of the
oil prices and showed its 11th consecutive budget surplus. The government has been
introducing economic reforms to boost participation of the private sector and foreign
investment. Other important features includes no form of income tax on earnings, low foreign
corporate tax (flat 15%), minimal import taxes (4%). Cyrille Fabre, partner and Head of
Luxury
and Retail practice for Bain and Co. in the Middle East argues that the Middle East,
specifically
Kuwait, is an increasingly lucrative market for expensive and luxury goods and the future is
expected to bring glad-tidings in the form of about 8% growth in the global luxury goods sale
in 2011 (Fabre, 2011).

Social Features: It is the home to approximately 2.6 million people, including 1.3 million
non-nationals (CIA, 2011; Ernst andYoung, 2001). Around 60% of the population is Arab.
Arabic is the official language and english is widely used, mainly for business purposes. 20%
of the population is resposible for 80% of the National Income and all of them are Kuwaiti
Nationals (Central Bank of Kuwait). Over 90% of the population lives within a 500 sq. km.

13
area surrounding Kuwait city and it‟s harbor (BBC, 2011). Kuwait received independence in
1961 from the United Kingdom (CIA, 2011). 85% of the population follow Islam that
includes 100% of the Kuwaiti nationals. The people have strong Islamic values attached to
their culture and traditions. The other religions includes hinduism, christianity, buddhism,
sikhism. Kuwaiti citizes receive benefits in the form of retirement income, marriage bonuses,
housing loans, virtually guaranteed employment, free medical services, and education at all
levels. The government also sponsors students who wish to study abroad. By Amiri decree,
the government occasionally disburses a portion of its budget surplus as a grant to all Kuwaiti
citizens. In 2007, the government implemented a debt forgiveness scheme for Kuwaiti
citizens amounting to just over $1 billion. In February 2011, the government announced an
Amiri grant of estimated 1.5 billion Kuwaiti dinars (approximately $5.3 billion), including
1,000 Kuwaiti dinars (approximately $3,500) to be paid to every citizen along with free
monthly food baskets to each Kuwaiti family for 14 months. Foreign nationals residing in
Kuwait do not have access to these welfare services. The right to own stock in publicly traded
companies, real estate, and banks or a majority interest in a business is limited to Kuwaiti
citizens and citizens of Gulf Cooperation Council (GCC) countries under limited
circumstances (U.S. Department of State, 2011). Kuwait is the most literate amongst the
other arab nations with a literacy rate of 93.5%.

Technological features: Kuwait is technologically developing country. State-owned TV and

radio operate alongside private broadcasters. Pan-Arab satellite stations are widely watched.
Kuwait had 1.1 million Internet users by June 2010 (InternetWorldStats). A pervasive
filtering system blocks content deemed immoral or politically-sensitive. Internet cafe owners
must obtain the names, ID numbers of customers. Internet is still not widely used by the
Kuwaiti nationals.

Environmental features: Kuwait is a dry desert connected to the arabian sea and boasts long
strips of beautiful beaches. The climatic conditions of Kuwait are extreme, which is marked
by the intensley hot summers and short but cold winters. Sometime around March, Kuwait
witnesses it‟s pleasant warm spring season. The shamal, a northwesterly wind common
during June and July, causes dramatic sandstorms.
Legal features: Kuwait holds first place among Gulf states with regard to press freedom.

14
Restraint is exercised when covering matters relating to the emir and senior royals.
Newspaper publishers must have licences from the Ministry of Information. The ministry
censors books, films, periodicals and other imported publications deemed morally offensive.
Courts can prescribe prison sentences for defamation and "attacks" on religion. According to
the commercial companies law No. 36 of 1964 amended by the commercial law No. 68 of
1980, all foreign companies wishing to establish an office, a business branch or a company in
Kuwait, have to do it through a Kuwaiti agent or a citizen of one of the Cooperation Council
of the Gulf country member. The total capital participation of the foreign company cannot
exceed 49%. In certain sectors, such as banking, finance and insurance, this participation
cannot exceed 40%. In order to establish a company in Kuwait, the Kuwaiti partner must
request a commercial license issued by the Ministry of Commerce. The right to import goods
into Kuwait on a commercial basis is restricted to Kuwaiti individuals and firms who are
members of the Kuwait Chamber of Commerce and Industry (KCCI) and who have import
licenses issued by the Ministry of Commerce and Industry (MCI). Exception: Kuwait‟s free
trade zone allows 100% foreign ownership of business within the zone. There are no import
duties and foreign corporate income is tax-free. Brands can only have one exclusive
Kuwaiti/GCC agency representing them in Kuwait.

Although the scenario looks painstaking, the opportunities are undemanding, especially in the
luxury retail segment (Icon Group International Inc., 2000).

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CHAPTER 2
Research Methodology
2.1 Research Aims and Objectives
The main aim of this paper is to investigate the impact of CRM/eCRM1 on the consumer
buying behavior in the luxury retail market of Kuwait. In order to fulfill its aim, the research
needs other definite parameters. The other aims and objectives of this paper include
1. To critically evaluate the important features of the Kuwaiti luxury market, its
distinctive features and consumer behavior.
2. To investigate the literature, theoretical models and frameworks related to retail CRM
and its relevance for luxury businesses in Kuwait.
3. To evaluate the awareness, presence, perceptions and actual implementation of CRM
in Kuwait.
4. To critically evaluate the need for Relationship Marketing in Kuwait, its assets and
liabilities
5. Evaluate the marketing and CRM strategies of a few successful luxury retail
organizations in Kuwait.
The term eCRM refers to the use of ecommerce tools or electronic channels in CRM. In this
paper we
do not make any distinction
between CRM and eCRM.

Research is a systematic and scholarly investigation into the study of materials and sources in
order to establish facts and to reach conclusions. This chapter systematically discusses the
research paradigm and how research was actually conducted. This chapter discusses the
various key issues related to the research study with the help of various research
philosophies, various approaches to collect data and analyse it. The chapter also discusses
about the ethical guidelines and the validation strategies used to make the study more
rigorous and credible.

2.2 Research Design

There are basically two approaches to research: quantitative and qualitative. A Quantitative
approach to investigations generally requires numerical data to be collected and/or

16
transforming what is collected or observed into numerical data. It involves measuring or
counting attributes. In contrast to quantitative data, qualitative data does not simply count
things, but is a way of recording people's attitudes, feelings and behaviors in greater depth.
Quantitative not appropriate as an initial learning phase to develop creative ideas.
Quantitative data is essentially evaluative, not generative. Qualitative research looks further
than numerical evidence such as events, descriptions, comments, behaviors etc and identifies
new and emerging categories.
This study utilizes a qualitative approach for investigation because of its rich and explanatory
nature. Qualitative data consists of words and observations and not necessarily numbers. As
with all data, analysis and interpretation are required to bring order and understanding. In
order to ensure an appropriate conceptual framework to work, an in-depth interview method
was employed, to better direct the research towards its objectives. This approach was divided
into two parts. The first part constituted of interviews with owners, marketing directors,
managers and merchandising officers regarding marketing methods prevalent in Kuwait,
trends in the luxury segment, the presence, awareness, practices, impact (potential), problems
and actual implementation of CRM. The Second part constituted of interviews with the
customers/users of luxury products. This was aimed at studying the behaviors, impact of
different marketing methods, motivating factors, satisfying factors/dissatisfaction reasons,
trends, perceptions, cultures, impact of relationship marketing on the buying behavior,
Internet shopping and loyalty of the customers. The interest in choosing this method can
mainly be attributed to the fact that interviews are particularly useful for getting the story
behind a participant‟s experiences. The interviewer can pursue in-depth information around
the topic. Interviews may be useful as follow-up to certain respondents to questionnaires, e.g.,
to further investigate their responses (McNamara,1999). The qualitative research interview
seeks to describe the meanings of central themes in the life/world of the subjects.
(Kvale,1996). A qualitative research interview seeks to cover both a factual and a meaning
level, though it is usually more difficult to interview on a meaning level. (Kvale,1996).
Unlike surveys or questionnaires, interviews are more personal and direct, provide the
opportunity for asking follow up questions and interviews are generally easier for
respondents.

17
2.3 Interviews
Two interview protocols were developed for this study, one was the organisational version
(for managers, executives etc. at the luxury retail organisations) and the other was the
customer’s version. There are three types of research interviews: structured, semi-structured
and unstructured. Structured interviews require adherence to a particular set of questions and
rules. In some cases the researcher is required to show consistency in behavior across all
interviews including emotional affect, bodily posture etc. These are mainly used by
quantitative researchers to look for very specific information. It keeps the data concise and
reduces researcher bias. Semi-structured interviews are more relaxed than structured
interviews. While researchers cover every question in the developed protocol, there is room
for asking clarifications and additional information. These are beneficial for qualitative
studies and helps in a deeper understanding of responses. Unstructured interviews are the
most relaxed one amongst the three. The researcher only needs a checklist of topics to be
discussed. These interviews are more like general conversations with no order or script. This
approach uncovers additional information that might not have been collected by using the
other two methods but unstructured interviews are very time consuming to transcribe and
difficult to analyse.
The interviews were semi-structured and open-ended. Very few close-ended questions were
asked that were necessary for the research. This allowed for a high degree of flexibility for
both the interviewer and the interviewee. Although semi-structured interviews are difficult to
compare but they are fairly reliable and easy to analyse. Interviews were carried out in five
Luxury retail companies which were chosen based on convenience and most easily available
for the research study.
Most of these companies are the local retail agents that exclusively represent many different
international luxury brands. On average four to five interviews were conducted in each
company. The interviews were conducted in english and arabic depending on the participants.
Interviews in the local language seemed more insightful and a few arab interviewees seemed
more comfortable in sharing their views.
The second protocol of the interview (the customer‟s version) involved using a quota
sampling method to recruit luxury customers for conducting interviewes. The interviewees
were recruited on the recommendations of friends and professional contacts. Quotas or
segments were created on the basis of certain characteristics like age, nationality and gender.

18
Four quotas were created. The four qoutas were Kuwaiti men, Kuwaiti women, expatriate
men and expatriate women. Each one of these groups were furthere sub-divided into two, one
included interviewees above the age of eighteen and below twenty-four years and the other
sub-group included interviewees above the age of twenty-four years7. These interviews were
also conducted in english and arabic based on the participants convenience. Around thirty
such interviews were conducted.
Both the versions of the interview lasted for around thirty minutes on an average. Participants
in each of the version were asked twenty questions on an average. Questions were formulated
of different types to include broad data like behaviors, opinions, feelings, knowledge, sensory
and background/demographics of the person.
The interviews were audio recorded. Also, during the interview important notes were taken.
Participants were allowed to take breaks. They were informed that their identities as well as
the organisations‟s identity (Organisational version) would be protected. Each participant
was provided with a consent form in english and arabic and were told that they may choose to
withdraw from the study at any time.

2.4 Background of the companies where research was carried out

The five companies have been briefly introduced below. Names of the companies have been
changed to protect identity on account of ethical considerations.
1) Kuwait British Company (KBC): It is one of the Middle East‟s leading retailers with
operations in a number of different countries including European nations. It operates
more than 50 international retail concepts which include a number of leading luxury
fashion and footwear, health and beauty, optics, home and furnishing brands. The retail
outlets of their brands can be found at most of the regions premier locations.
2) Al Jasim and Sons Automotive Co. W.L.L (AJAC): It is one of the most successful
luxury automotive dealers in the middle-east. It owns the right to import and exclusively
deal in five international luxury car brands. Most of their car brands are considered highly
luxurious internationally. Supported by after sales facilities, all these products enjoy such
levels of technical support, which many people argue is the main reason for the
company‟s success.
3) Al Ruby Co. (ARC): It is one of Kuwait‟s most recognized medium sized luxury retailer
with 12 specialized boutiques in Kuwait and over 30 years of operating expertise. It

19
provides its customers the best in fine luxury watches, perfumes and couture. They are the
dealing agents for a number of luxury watches, perfumes and couture brands in the
middle- east.
4) La Moda: It is an internationally recognized and a very popular luxury retailer in Kuwait
which is the house of extremely prestigious brands and deals s in jewels, watches and
fashion accessories.
5) Al-Tronix: It is a prominent luxury electronics retailer in Kuwait. They are the authorized
dealers an internationally prominent luxury electronic brand. They also sell different
types of expensive electronic products, hardware, softwares and electronic accessories.
Assumption: It is assumed that people below the age of 25 years in Kuwait are dependent &
do not have a direct source of income and
people above the age of 24 years are generally independent & have a direct source of income.

2.5 Reflective Journal

The last form of data was collected by keeping a reflective journal and field notes. The
journal allows a researcher to describe his feelings about conducting research in any area of
study. According to Morrow and Smith the use of a reflective journal adds rigor to qualitative
inquiry as the investigator is able to record his/her reactions, assumptions, expectations, and
biases about the research process (Morrow and Smith, 2000). The field notes were really
helpful in providing additional data for the analysis.

2.6 Data Analysis

Before the data was analysed, all the audio recorded interviews, reflective journal and notes
were transcribed. The process of transcribing allows a researcher to become acquainted with
the data (Reissman, 1993). The files were transcribed and typed in Microsoft word. The files
have been password protected and saved on an external hard drive. The data was analysed
through „thematic analysis‟ as explained by Miles and Huberman, 1994; Braun and Clarke,
2006. Thematic analysis is an approach that involves the creation and application of „codes‟
to the data. „Coding‟ refers to the creation of categories in relation to the data; the grouping
together of different instances of datum under an umbrella term that can enable them to be
regarded as „of the same type.‟ The idea was to develop themes and to work out how they
were related to each other within the data. Data was not coded sentence by sentence or
paragraph by paragraph, but coded for meaning. On the basis of the coding, themes were

20
identified. There is no reason why researchers cannot give numerical indications of the
incidence and prevalence of each theme in their data. For example, what percentages of
participants mention things which refer to a particular theme? The research draws on the
guidelines presented by Braun and Clarke, 2006 for effective thematic analysis. The phases
of the analysis were drawn upon the guidelines suggested by Braun and Clarke, 2006. The
phases of the research were:
1) Familiarized with the data: It involved transcribing the data where necessary, reading and
re-reading the data at least two to three times and making notes of initial broad ideas.
2) Generated initial codes: It involved coding interesting features of the data in a systematic
fashion across the entire data set and collating data relevant to each code.
3) Searched for themes using the codes: This phase involved grouping the codes into
potential themes and gathering all data relevant to each potential theme.
4) Reviewed the themes: This phase involves reviewing the themes and checking for validity
and whether they work in relation to the coded extracts.
5) Defined and Named the themes: With analysis themes were beginning to get more
specific. Once the themes were clear, they were defined and named.
6) Produced the report: This phase involved election of vivid, compelling extract examples,
final analysis of selected extracts, relating back of the analysis to the research question
and literature, producing a scholarly report of the analysis.
Thematic analysis is flexible, easy to learn; it is useful to summarize key features, can
generate unanticipated insights, allows for social as well as psychological interpretations of
data and is also useful in highlighting similarities and differences across the data set (Braun
and Clarke, 2006).

2.7 Pitfalls of the Methodology

The entire research work was completed in a short time span of three months. The entire
process was time consuming, especially the interviews and the process of transcribing. With a
qualitative research comes the problem of biasness which is unavoidable. Qualitative research
helps in expanding the list of possibilities but cannot identify the best possibility. Also, it
makes it difficult to generalize and compare the data. Researchers must ensure that they do
not bias their interpretations in anyway. Biasness from participants is unavoidable. Data
Analysis was complex and time consuming. Coding method seeks to transform qualitative

21
data into quantitative data, thereby draining the data of its variety, richness, and individual
character. In Thematic analysis it is hard to analyse if one theme is same as the other for e.g.
it becomes difficult to decide whether interviewee „A‟ said the same thing as interviewee
„B.‟
There are some big issues in undertaking thematic analysis. One of the central positions
associated with qualitative research pertains to the idea of interpretivism: that we are
interpretive in our actions and in our understanding of the actions of others; that we impose
meaning on the world; that we inhabit cultural worlds and engage in cultural practices that
are defined by shared interpretations (i.e. that we do not operate as „isolated individuals‟ in
our interpretive actions, but share with groups of people, certain interpretations).

2.8 Validation
Qualitative researchers utilize various validation strategies to make their studies rigorous and
credible (Creswell and Miller, 2000). Assistance of two peer debriefers was sought including
the research supervisor. Both of them are familiar with qualitative data analysis. This
research relies on the „15 point checklist' provided by Braun and Clarke, 2006 to assess its
quality.
1) The data have been transcribed to an appropriate level of detail, and the transcripts have
been checked against the tapes for accuracy.
2) Each data item has been given equal attention in the coding process.
3) Themes have not been generated from a few vivid examples (an anecdotal approach), but
instead, the coding process has been thorough, inclusive and comprehensive.
4) All relevant extracts for all each theme have been collated.
5) Themes have been checked against each other and back to the original data set.
6) Themes are internally coherent, consistent, and distinctive.
7) Data have been analysed – interpreted, made sense of - rather than just paraphrased or
described.
8) Analysis and data match each other – the extracts illustrate the analytic claims.
9) Analysis tells a convincing and well-organized story about the data and topic.
10) A good balance between analytic narrative and illustrative extracts is provided.
11) Enough time has been allocated to complete all phases of the analysis adequately,
without rushing a phase or giving it a once-over-lightly.
12) The assumptions about, and specific approach to, thematic analysis are clearly

22
explicated.
13) There is a good fit between what you claim you do and what you show you have done –
i.e., described method and reported analysis are consistent.
14) The language and concepts used in the report are consistent with the epistemological
position of the analysis.
15) The researcher is positioned as active in the research process; themes do not just emerge.

2.9 Ethical Considerations

The entire research work was carried out in accordance to the ethical guidelines of the Market
Research Society (MRS) and the University of Gloucestershire. Although, there were no
identifiable risks for participating in this study, a few considerations were still kept in mind
when dealing with participants. First of all, a lot of Kuwaitis are not comfortable in
discussing about religion, income, families and culture. Secondly, some managers are not
comfortable in sharing some information about their businesses which they presume to be
vital. All these considerations will be incorporated during the research design stage. Every
caution will be taken to ensure that the participants felt safe, comfortable, and had the
freedom to withdraw from the study if they felt the need to. Interviewees were assured that
their identities will be kept anonymous in the report and the same was mentioned in the
consent form.

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 CHAPTER 3
LITERATURE REVIEW

This chapter aims to accomplish the following purposes:

1. Critically analyse the literature related to CRM, including its impact, principles,
objectives, implementation frameworks, assets and liabilities. This chapter also
2. Examine the various models that have been developed to understand the link
between CRM and customer satisfaction.
3. Understand the literature related to the luxury segment and its features.

3.1 Customer Relationship Marketing

Customer Satisfaction has been in the spotlight amongst marketing, behavioral writers and
researchers for long. It is one of the most basic and inevitably a very significant business
element that cannot be avoided by organisations in modern times. The last three decades have
seen a number of reports and research work in the area of customer satisfaction (E.g. Bolton,
1995; Perkins, 1991; Wilkie, 1991; Klee and Thurau, 1997). The growing importance of
customer satisfaction, customer retention, changes in market demand, and competitive
intensity has led to a paradigm shift from transactional marketing to relationship marketing
(Payne, 2009; Grönroos, 1994, Sheth and Parvatiyar, 1994). May researchers argue that CRM
has a significant impact on customer insight, satisfaction, customer retention and loyalty e.g.
(Ghavami & Olyaei, 2006), (Lee-Kelley, Gilbert, & Mannicom, 2003), (Samanta, 2010) etc.
The 1950‟s saw the development of frameworks like „the Marketing Mix4‟ in order to
increase demand. Payne, 2009 suggests that the objective of such „Transactional‟ approaches
to marketing was to develop strategies that would optimize expenditure on the marketing mix
in order to maximise sales. With time, the markets matured, competition increased, customer
demands and loyalty became complex. Customers have gradually become less responsive as
choices have increased, facilitated by globalisation and new marketing channels such as the
Internet. These challenges, technological developments in managing and maximizing the
value of large chunks of data propelled businesses and researchers in developing the concept
of „Customer Relationship Marketing. ‟
CRM can ideally be described as: a move from functionally based to cross functionally based
marketing; a shift in focus from transactional marketing to relationship marketing; a shift

24
from marketing activities which emphasize customer acquisition to marketing activities
which emphasize customer retention as well as acquisition (Payne, 2009); a shift in focus
from treating customers simply as an audience to treating them as key assets of the business.

3.1.1 Principles and Objectives of Customer Relationship Marketing

McKenna, 1991 argues that the goal of marketing is to own the market, not just to sell the
products. Having a single-sales focus involves dealing with pre-mature information about the
customer and winning the customer at every sales encounter, a less efficient and effective use
of investment compared to one time acquisition and maintaining sustainable relationships
with them. “Marketing is everything and everything is marketing” (McKenna, 1991). He
continues to argue that marketing in modern times is not simply a function; but it is a way of
doing business. Marketing has to be all-pervasive, a part of everyone‟s job description in
order to integrate the customer into design of the product and a process for interaction.
Payne, 2009 identifies the key principles of CRM as: emphasizing on retaining profitable
customers, emphasizing on a cross functional approach to marketing and emphasizing on
multiple stakeholders.
The primary objective of CRM is to maximise the life time value of a customer. The life time
value of a customer is the future flow of net profit, generated from a specific customer. This
forces organisations to engineer strategies to enhance the profitability of those customers it
seeks to target (Payne, 2009). Customers are vital assets of organisations and are mostly
responsible for the goodwill earned by the brand. CRM seeks to treat customers as
investments. By building on existing investment, in terms of product development and
customer acquisition costs, firms can generate potentially higher revenue and profit at lower
cost. Marketing on a transactional basis is proved to have greater financial outlay and risk
(Payne, 2009).
As mentioned earlier, marketing is not simply a function. Marketing strategies often do not
take into account their organisation-wide implications. The problem is that they are
functionally focused and not market focused. Rarely, do they consider the inter-relationship
of different stakeholders (Payne, 2009). He adds, that “they typically seek to optimize the use
inputs and hence are budget driven rather than seek to optimize around outputs and hence
be market driven.” CRM seeks to emphasize on a cross functional approach to marketing.
CRM seeks to focus marketing action on multiple stakeholder markets. A market consists of

25
a number of forces or elements like the government, suppliers, media agencies, unions,
customers etc. CRM recognizes that multiple market domains can directly or indirectly affect
a business‟s ability to win and keep profitable customers (Payne, 2009).
There is lack of clarity in the definition and description of Customer Relationship
Management. They vary greatly amongst authors and authorities. It is many times used
interchangeably with the terms „Customer Management‟, „Enterprise Relationship
Marketing,
Technology Enabled Relationship Marketing (TERM), Customer Relationship Management
etc. Sometimes, it is used to refer to IT solutions with respect to campaign management or
sales automation. CRM has often been misinterpreted simply as an ecommerce application
(Khanna, 2001) or Data Driven Marketing (Kutner & Cripps, 1997). Payne, 2009 defines
CRM as “the business approach that seeks to create, develop and enhance customer
relationships with carefully targeted customers in order to improve customer value and
corporate profitability.” If viewed from a strategic perspective CRM can be defined as
“Creating increased shareholder value through developing superior and sustainable
customer relationships over the life-time of the customer with the help of IT and relationship
marketing”.

3.2 Optimizing Marketing and Customer Relationship Marketing using Information

Technology
“Marketing evolves as technology evolves” (McKenna, 1991). Ecommerce has diminished
loyalty. Customers can change their mind very fast at the click of a button, if they see a better
offering from a competitor. Personalization or customization is vital in the luxury retail
organisation. In order to satisfy their customers, businesses must have relevant information
about their customers available at all times. It is essential that the Information is used
proactively rather than reactively. Experience shows that proactive use of information can be
much more effective and rewarding (Payne, 2009). A number of customers do not take the
pain of contacting the organisation or lodging their complaints, they simply look for
alternatives or at the competitor‟s offerings. Customer relationships are propelled and
nurtured mainly by exploiting customer information or data. CRM seeks to use customer
information to increase profits by increasing marketing, sales, support and value-added
services.Corporations have begun to use sophisticated CRM softwares or systems for the
same reasons and mainly to better respond to individual customer needs and reduce

26
marketing related costs. The firm‟s ability to maximise the value of the information is highly
related to the existence of a supportive IT infrastructure. Luxury businesses must aim to
enhance customer experience as much as possible. It is essential for any retail organisation to
ensure that it has its retail basics in order; otherwise, CRM systems wouldn‟t bring any
significant change (Chu & Pike, 2002). The „retail basics‟ refers to „superior customer
service‟ and directed completely at enhancing „customer experience.‟
Payne, 2009 explains the two major components of an automated CRM. The data repository
enables the organisation to collect all the relevant information of customers, and is used with
analytical tools to understand the customers in terms of past and likely future behavior.
Another set of applications allows value added interactions with customers, often across
different channels, in order to meet their specific needs (e.g. clever screen prompts, which
provide customer care representatives with all the relevant details of the customer- This can
be used for cross selling or up selling provided the staff is well trained and motivated). By
using information technology luxury retailers can exploit opportunities, and thereby increase
their profitability and market share.
On the other hand, a number of authorities and practitioners have raised the issues regarding
the liabilities attached with CRM systems. A number of them have argued about the
inflexibility of the system and the rigid database that constitutes severe challenges for front
office manages, since they will need to keep the system constantly updated. Also, they argue
about the high costs involved in training the employees in using these systems, but shouldn‟t
that be seen as an investment by the luxury organisations?
Broadly, the objectives of CRM in the luxury retail sector can be identified as: gather more
and more information by using automated systems, to know more about the visitors, regular
customers, buying behaviors etc.; market the right products to the right people; reduced cost
of sales and marketing; making vital information available to the management for strategic
planning and decision making.

3.2.1 Optimising Marketing and Customer Relationship Marketing on the Internet

Electronic Marketing (E-marketing) gives luxury retailers the opportunity to establish,
maintain, preserve their glitzy image, market products/services globally and mainly enhance
relationships with customers. E-marketing through the use of electronic communications
technology such as Internet, e-mail, databases and mobile devices improves customer loyalty

27
(Smith & Chaffey, 2001). Companies can better target communications that match the
individual needs of the customers.
The changes in business scenarios following the Internet (especially ecommerce and
emarketing) required the development of new business models. Modifications in the
marketing mix were eminent and necessary, since the scope of businesses had changed
remarkably. The word shopping for customers has changed. “The traditional Marketing Mix
paradigm is incompatible with e-commerce” (Constantinides, 2002).There was a need to
identify the elements that would give customers the desired shopping experience online,
similar to offline elements, for e.g. the shop‟s atmosphere, staff friendliness, customer
service, shop layout, presentation, and high class feeling. Constantinides, 2002 developed the
web marketing mix model also referred to as the „4S marketing mix model.‟ There was a
huge
difference in the features of CRM online as compared to offline. CRM strategy is a response
to the changing dynamics of the marketplace and a systematic effort to enable companies to
build long lasting relationships aiming at profit and maximizing the customer's lifetime value
to the firms (Cataldo, 2006). The elements of the web marketing mix drawn from Samanta,
2010; Constantinides, 2002 are:
Scope: This element calls for the identification of the organisation‟s strategic objectives on
the Internet, identifying the market potential, competitors, customers etc. It also involves
identifying the strategic role of the web activities for the organisation. Luxury retailers either
have transactional or promotional websites. Transactional sites are the ones which generally
include features that allow users to purchase, view purchase history, manage their personal
accounts etc. Promotional sites aim at simply publishing the content and information about
the products without any transactional functionality.

Site: The Web Site is the company–customer interface, an important source of customer
experience and therefore a vital communication element on the Internet. It is the virtual
product display similar to a shop floor in traditional marketing. The website acts as the virtual
sales force and virtual display platform. Other web objectives includes promoting the
business, providing company information to all the relevant stakeholders, a privacy policy in
order to gain customer confidence, promotional information if any, customer service
functionality, collecting market data, customer data, direct sales, online payment facilities
(transactional) etc. These objectives in some way or the other can be helpful in enhancing

28
customer loyalty and retention. It is very important that the luxury brands create the sensorial
experience of the brand online.

System: This element provides an outline of technical factors, especially concerning the
secure, safe, time-cost efficient, user friendly interface, market analysis reports and
performance analysis. This element includes decisions to be made regarding the web-site
administration, maintenance, service, availability of full time technical and service personnel.
It also includes web server hosting, choice of Internet service provider, site construction,
content management, managing website traffic etc.
A number of authors argue that CRM can help in customer retention (e.g. Constantinides,
2002; Samanta, 2010, Payne 2009). Many argue that that a 5% improvement in customer
retention can result in an increase in profits of between 25 and 85 percent depending on the
industry (Christopher, Payne, and Ballantyne, 1991; Reichheld and Sasser, 1990).
“Relationship marketing takes over after the sale for existing customers by stimulating the
intention to buy and sometimes after the sale through post-purchase reinforcement”
(Samanta, 2010). Many organisations draw on Gilbert and Powell-Perry, 2000 in order to
maintain and market good customer relationships. The five steps have been drawn upon
Gilbert and Powell-Perry, 2000 in a luxury retail organisational context:
Identify more about the customer through database analysis. The web provides luxury
organisations with the opportunity to know more about their customers and exploit this
information in different ways. The organisations can know more about their customers
individually by tracking their purchases, likes, dislikes, reactions, behaviors during
promotions etc.
Improve and make the product/service more attractive. By analyzing the collected
information and through the feedback provided by regular customers, organisations can know
more about the likes and dislikes of the customers and use this information to improve the
functionality for the web or better meet the needs of the customers individually. Feedback
can be gained through questionnaires or surveys targeted at regular buyers. This is an
important feature of customer relationship marketing.
Provide information to build the guests‟ knowledge of the company. Important information
about the company can all be provided on the website. This is essential in relationship
marketing. The company‟s updates ethical stance, sustainability practice, outlet or agent

29
locations, and information about new or existing products, special offers, e-newsletters etc.
could all be used ro build the knowledge of the visitors and keep the loyal customers
informed.
Convince guests and loyal customers to purchase more regularly. Once a guest enters the
website („eOultlet‟) organisations must convince them to buy a product or tempt them to at
least know about it. Prospective and Loyal customers must be kept in the loop by keeping
them well informed about new or upcoming products, special offers etc. This can be done
with the help of enewsletter or direct emails etc.
Retain the customer by developing different forms of loyalty schemes. Inspired by the success
of a number of loyalty programs (Rolex, Land Rover, Mercedes Benz), other luxury retailers
are beginning to follow the trend of having their own loyalty drives. Entry into the Web site
could be restricted through the use of identification numbers and passwords for the exclusive
use of loyal customers or customers with a registered product (eg. Tag Heuer, Vertu). The
idea is to keep the customers engaged and loyal to the brand/firm.
All these steps constitute to form an important part of customer relationship marketing.

30
3.3 CRM Frameworks for the Luxury Retail Sector
Chu and Pike, 2002 identify experience as the key driver of satisfaction in the retail sector.
Apart from experience it is the feeling of esteem or belongingness to a particular class of
society that drives customers in the luxury retail sector. Chu and Pike, 2002 argue that the
marketing, communications, data integration, analysis etc should all be focused on customer
satisfaction in order to successfully implement a CRM system. They developed a pyramid
framework of a customer centric (CRM) strategy where the lower levels support the upper
levels.

31
The ultimate goal of CRM strategy in the luxury retail sector is to deliver the customer‟s
complete experience with the brand/product and satisfy them to the highest possible extent in
order to retain them. This is don‟t with the help of effective data integration, analysis,
marketing and communications. Data integration, marketing and communication aren‟t the
sole goals of CRM they simply act as a pillar for customers‟ satisfaction. Kotler states that
“the key to customer retention is customer satisfaction” (Kotler, 1994, p.20). A number of
others authors share similar views and arguments (for e.g. Rust and Zahorik, 1993; Fornell,
1992, Fornell et. al., 1994 etc.). There are certain shortcomings associated with the
representation of this pyramid framework. There is no guarantee that competitive advantage
will be achieved and sustained once the top of the pyramid has been reached.

32
3.3.1 The CRM Value Cycle
Chu and Pike, 2002 say that CRM is about providing a one-to-one personalized service to
each customer in order to enhance the customer experience. They proposed another
framework that addressed certain shortcomings of the previous models and frameworks. This
framework was specifically proposed as a generic solution for retailers. Actual case studies
of retailers were used by them in the development of this framework.

The darker half (Refined Business Actions and Customer Insights) of the cycle shows the role
of CRM with the customer insights referring to the analysis of customer information also
known as „Analytical CRM‟ and the refined business actions that involves taking steps to
improve their competencies in dealing with customers also called as „operational CRM.‟ The
strategic capabilities are important in providing organisations with competitive advantage.
These strategic capabilities can derive from architecture, people, processes, reputation,
technology and innovation. The architecture derives from the relational contracts of the

33
organisation which are hard to imitate by the competitors. Strategic capabilities are unique
resources or competencies that the organisation needs to invest in and sustain for competitive
advantage (Based on the resource-based view, core competencies and strategic assets by
Barney, 1991; Hamel and Prahalad, 1990; Amit and Schoemaker, 1993 respectively).
CRM is a strategic business process that has proved to give many organisations the
competitive advantage in their industry (e.g. Tesco, Rolex etc.).

3.3.2 CRM operating process cycle- IDIC Methodology

The IDIC operating cycle by Peppers and Rogers Group and Microsoft Great Plains, 2001 is
a blue print of CRM implementation and can be used to put into action the framework by Chu
and Pike, 2002 in a number of situations. This blueprint views the problem from a CRM
perspective from a retail point of view. It is also possible for retailers to customize their
CRM approach to better meet their objectives. IDIC bridges the gap between the CRM
strategies, frameworks as discussed earlier and the actual implementation of the project. IDIC
stands for the acronyms: identify; differentiate; interact and customize. These are the
sequence of stages a company must employ to realize the objectives it seeks from its CRM
drive. Peppers and Rogers Group and Microsoft Great Plains, 2001 identify that the perfect
CRM solution is implemented when a one-to-one relationship with each customer is realized.
It may be very costly or complex, but anecdotal evidence from Peppers and Rogers Group
suggests that a firm that changes the way they deal with the top 5% or bottom 20% of their
customer base can realize payback on a CRM project.

34
The stages of the IDIC blueprint in the retail context have been elaborated as follows:
Identify customers: Information such as name, address, email, telephone number, purchase
information and other details must be collected across the company and at all points of
contact with the customer. The more information gathered about the customer helps in
understanding their habits and preferences. Purchase information is of high importance in the
luxury retail environment. A lot of information can be inferred about a person‟s income,
attitudes and preferences from the purchase information. A number of retailers have used
loyalty schemes like club memberships, loyalty cards and promotional offers in conjunction
with the Internet to boost sales and collect more and more of customer data and buying
patterns by tracking their purchase records and browsing patterns online as well as offline.
Differentiate customers: Peppers and Rogers argue that customers represent different levels
of value to a company and that they have varied needs (Peppers & Rogers Group & Microsoft
Great Plains, 2001). Retailers must be able to differentiate between individual customers or

35
customer segments. Once the Retailers successfully identify their customers then
differentiation
relatively easy, since full information about the customers has been collected. With the
information gained on the total spend of each customer it is very easy to work out their value
to the company (e.g. top 10-20%). Customer‟s can be differentiated based on the products
they
purchase (for e.g. categories such as „vegetarian‟, „parent‟ and „social class‟).These socio-
economic categories are clearly independent of one another, so customers can be members of
different combinations allowing a high degree of differentiation. This is extended further
when
combined with the customer‟s value to the company.
Interact with customers: Once the customers have been differentiated, luxury retailers can
then choose to treat them differently and interact with them accordingly. Valuable customers
can be given more benefits in order to keep them happy and retain them, since they are of
significant value to the retailers. New customers can be given some benefits too in order to
encourage them to try a product, with the motive of acquiring them.

Customize Content: After analysis and interactions with the customers it is much clear to
assess the value of each customer to the retailer, personality and attitudes. Based on this a
one-to-one personalized service can be offered to each customer. Offers and products can be
tailored or customized according to the differentiated customer groups.
The research paper draws upon these frameworks especially the pyramid framework while
analysing and making recommendations because of its high relevance to the retail sector.

3.4 Customer Relationship Marketing: Deficiencies and Drawbacks

So far, the assets and benefits of CRM have been highlighted and discussed thoroughly;
CRM has its own set of deficiencies and drawbacks. A number of authorities criticize
companies that spend large sums of money on implementing CRM strategies, systems and
argue that there is no significant link between customer satisfaction and customer retention.
Klee and Thurau, 1997 point out that “the link between satisfaction and the long-term
retention of customers is typically formulated by marketing practitioners and scholars in a
rather categorical way, and is therefore treated as the starting point, rather than the core
question of the analysis” (for the practitioners e.g. Naumann and Giel, 1995; Quartapelle and

36
Larsen, 1994, and for the academics, e.g., Kotler, 1994; Woodruff, 1993). LaBarbera and
Mazursky, 1983 say that most of the research in this subject is based on the assumption that
repurchasing behavior is highly influenced by customer satisfaction/dissatisfaction. Only, a
few researchers have investigated and analysed the relation between customer satisfaction
and customer retention (Bloemer and Poiesz, 1989).
Klee and Thurau argue that most of the research works use monetary values like profits and
revenues as dependent variables, thereby substituting the individual level of analysis with an
aggregated company-wide level (Klee & Thurau, 1997). The validity of such research works
for investigating the relation between customer satisfaction and retention is very limited since
there is no analysis on the individual customer level. Profits and revenues are influenced by a
number of contingencies (for eg. of such a work see Reichheld and Sasser, 1990). Some
researchers use repurchase intentions of customers to identify and analyse the link between
customer satisfaction and retention (for e.g. of such research works see Oliver and Swan,
1989; Bitner, 1990). Klee and Thurau point out the limitations of this approach by stating that
the satisfaction and intention measures are obtained from the same source and the data is
inherently correlated (Klee & Thurau, 1997). There is a high probability that it may lead to an
overestimation in the strength of the relationship between the two also the research in the
field of customer loyalty shows that the validity of intention measures varies depending on
the time frame, respondents, measurement scale, products etc. (Bolton, 1995). Lastly, a few
research works through light on the subject on an individual level by using real purchasing
data to examine the relationship. This kind of study avoids the problems discussed above.
These studies show a very weak or in many cases, a non-existent relationship between the
two variables. No significant relationship between the transaction specific satisfaction
appraisal and the length of the relationship was found (Bolton, 1995 also for similar works in
the third group see Newman and Werbel, 1973; LaBarbera and Mazursky, 1983).
A number of investigative studies have reported that the percentage of satisfied brand
switchers exceeds the percentage of dissatisfied brand switchers (For e.g. Gierl, 1993;
Reichheld and Sasser, 1990). Klee and Thurau comment that “skepticism seems to be
well founded as to the widespread conceptual view of a strong satisfaction– retention
relationship. Therefore, it is necessary to critically examine the sweeping postulate of a close
relationship between customer satisfaction and customer retention and identify the causes for
the existing divergence of both constructs” (Klee & Thurau, 1997). There are dangers

37
associated with not adapting CRM with a strategic perspective5. Payne highlights quotations
from Insight Technology Group, the CRM institute, Giga and Gartner (Payne, 2009, P. 20):
 69% of CRM projects have little or no impact on sales performance.
 Companies think that CRM projects are significantly less successful than their
consultants.
 60% of CRM projects end in failure.
CRM requires a recipe for success, to avoid the dangers. A successful CRM program is
integrated, insightful and across the senior management (Shenger, 2001). By integrated the
author means allowing the entire organisation to align around the common goal of exceeding
customer expectation and experience. It must be paid attention to and supported by the entire
organisation including the senior management.

3.5 Distinctive Features of the Luxury Segment

Luxury goods are an important part of modern society. They played an equally important role
in the ancient times as well. History has witnessed clear distinctions between social classes in
earlier civilizations where luxuries were limited to the elite classes. The definition of luxury
then was clear and concise. With changes in global politics („Democratization‟- Wong and
Ahuvia, 1998), world economies and purchasing powers of people new types of luxury
products were launched which were called as accessible luxuries or mass luxuries. Such types
of luxury products target the so called „middle class‟ (the well to do class of people, neither
very rich nor poor). As luxury has penetrated into the masses, luxury has become very
difficult to define. There is no common definition for luxury products, since the perception of
luxury goods has been changing very fast over time. The concept of luxury differs from place
to place, person to person etc. Researchers define luxury products differently, some refer to it
as the higher priced category of any offer in any product range (Prof. Dubois, Gilles, and
Sandor, 2010).
As highlighted in the previous sections, strategic CRM involves developing an approach to
CRM that starts with the business strategy of the organisation and is concerned with the
development of customer relationships that result in long term shareholder value creation
(Payne, 2009).
Similarly, some of them define luxury products as those that provide extra pleasure (Prof.
Jean-Noel Kapferer). Several others argue that luxury goods are the ones that evoke a sense

38
of belongingness to a certain esteemed or elite class of people.
In Economics, a luxury good is a good for which demand increases more than proportionally
as income increases, in contrast to a necessity good, for which demand increases less than
proportionally as income increases. As people become wealthier they buy more and more of
luxury products and with a decline in income its demand will drop. The perception of luxury
goods may change with income for a person for e.g. an automobile collector stops buying
more luxury cars because of increase in income and a shift of interest towards buying
airplanes (at such an income level, the expensive luxury cars would simply become a
necessity or a normal good). A lot of goods are perceived as luxury goods because they play
an important role in fulfilling the esteem needs or status symbol needs of people as they
signify the purchasing power of people (also known as conspicuous consumption). Many a
times a number of goods attain the status of luxury goods due to their design, quality,
durability, performance, remarkable superiority over substitutes, appearance etc.
Some luxury products are examples of „Veblen goods,‟ which defy the law of demand6, for
e.g. an increase in price of a perfume can increase its perceived value as a luxury good and
increase its sales rather than decrease it.
The luxury market has been growing since many years. The year 2010-2011 is expected to
bring glad tidings for the luxury retail sector, especially in the middle-east (Fabre, 2011).
Another important feature of the luxury segment is that it is highly sensitive to economic
upturns and downturns. The future holds some unanswered questions like:
 Will Luxury still remain something that is not a necessity?
 Will the primary purpose of luxury products still be to display income or wealth?
 How much control will the luxury brands have over the lives of the people?
The law of demand is an economic law which states that consumers buy more of a good
when
its price decreases and less when its price increases (while all the other factors remain
constant)

39
 CHAPTER 4
Analysis And Interpretation

This chapter is based on the thematic analysis of the primary data collected through the
indepth
interviews conducted with luxury customers and senior personnel at luxury retail
organisations in Kuwait. The analysis also includes data from the reflective journal that was
maintained by the researcher at all times. The data has been analysed most importantly to
identify the impact of CRM in the luxury retail sector of Kuwait, develop frameworks and
make recommendations. Also, it is analysed to identify and understand various issues with
respect to CRM and the luxury retail sector in Kuwait.
Firstly, the chapter discusses the Kuwaiti luxury market, the consumer behavior and
perceptions towards luxury products and marketing. The paper then talks about the impact of
technology on consumer behavior in Kuwait. The following section provides and insight to
luxury marketing in Kuwait. The next section illustrates the problems and challenges
associated with implementing CRM in Kuwait. Lastly, the chapter discusses the impact of
CRM in the luxury market of Kuwait.

4.1 Kuwait Luxury Market

The aim of this section is to make an in-depth analysis of the consumption features of the
luxury market in Kuwait. This analysis will help in shedding light on the marketing activities
for luxury retailers and brands in Kuwait. In recent years, luxury consumption has been
enjoying a rapid increase. One of the marketing managers (M, Egyptian, La Moda) says that
“Kuwaitis are the most fashionable amongst other Arab nations, luxury consumption has
increased tremendously in the last decade and we expect it to grow more.” He also argues
that this can mainly be attributed to the high disposable income of Kuwaitis and a growing
influence of the western culture in Kuwait. A number of senior marketing executives in
different organisations share a similar point of view. A marketing director (M, Kuwaiti, Al
Jasim and Sons Automotive Co. W.L.L) points out that the Kuwaiti people have easy access
to very high credit facilities. They receive huge monetary and non monetary benefits from the
government and standard of living is cheaper compared to the west. According to a senior
marketing manager (F, Lebanese, Al-Tronix) “people have become very brand oriented,

40
quality conscious, mainly because people have been travelling a lot to western countries and
watching a lot of western television.” A number of customers agree that travelling and
western television has broadened their awareness of luxury brands. Mel (F, Kuwaiti, 25) a
very frequent user of expensive luxury products explains that she keeps her self updated
through magazines, television and travelling. What was noted is that all the expatriates that
were interviewed said that they do not spend very heavily because they choose to save and
invest in assets back in their own country. Ninety Percent of the interviewees, both customers
and managers said shopping was one of the best forms of entertainment for families and
individuals in Kuwait. Jabir (M, Kuwaiti, 30) and Aliya (F, Kuwaiti, 22) like most of the
interviewees explained that there are strong Islamic values in people and shopping is their
favorite past time especially during the extremely hot and humid summers. It was also noted
that Kuwait is a small country with Islamic values. Alcohol, clubs, pubs, casino‟s etc. are
strictly prohibited in Kuwait and a western „party‟ culture is still not appreciated by the older
locals. People have few means of keeping themselves entertained. Also, their spending on
basic necessities is relatively low, so this actually enhances their ability to spend more on
luxury products and uplift their lifestyle. Kuwait‟s luxury market indeed has its distinct
characteristics. The rapid expansion of Kuwait‟s luxury consumption has greatly stimulated
the luxury companies‟ desire to broaden their market. Competition in Kuwait is not actually
amongst brands, it is between the retailers or the Kuwaiti agents who own the right to
exclusively sell luxury products of particular brands. Brands with entry level luxury products
like watches, perfumes etc. can be sold by more than one retailer in many cases. In order to
enter foreign markets, these companies often adopt specific marketing strategies, but these
companies have adjusted their strategy significantly in the Kuwaiti market.

4.1.1 Drawing the lines between Needs, Wants, „Lifestyle‟ and Luxuries
As mentioned in the earlier chapter of this paper, luxury is very difficult to define. There is
no common definition of luxury. The researcher here tries to identify the perceptions of
luxury and also tries to differentiate between needs, wants and luxuries in Kuwait. It was
observed that luxuries play a very important role in the daily lives of the people in Kuwait.
What was also noted is that it was actually a part of the people‟s lifestyle. What makes it
complex is that richer the people are, the less they personally value or give importance to it.
During one of the interviews it was observed and mentioned by the manager that their service

41
centre had at least 7-8 highly expensive uncollected cars (roughly valued at £200,000 each).
People bought these cars but did not collect it for a long period of time in some cases even 1
year so the people did not really care about their product but it was just bought because of its
expensive nature, brand name and perceived experience (Service and spare Parts manager, Al
Jasim and Sons Automotive Co. W.L.L).
It was simply because of their orientation towards branded products, expensive goods and the
„bling‟ nature of the products. For some it was important to be a part of the society, but for
many it was of high personal interest since it‟s a part of the lifestyle. It was very difficult to
differentiate between wants and luxuries. They were always interchangeable and over lapped
with each other. People‟s attitudes towards a number of expensive branded luxury products
were as if they were normal products. Most of them cared about the brand popularity, the
price, the promotional deal and if it was sufficiently conspicuous. Quality and customer
service play an important role in the top-end luxury sector. Apart from the mass luxuries,
even the most expensive ones were highly consumed by the people. A very senior marketing
executive and a frequent buyer of luxury products explained this by saying “a lot of luxury
products outside Kuwait have actually become the lifestyle of people in Kuwait. People are
inclined towards the luxury lifestyle.” Most of the middle range luxury products have become
lifestyle goods for many people and they are actually a part of their wants now. The high end
luxury products are specifically targeted at the top 10-12% of the rich Kuwaiti population.
This segment specifically includes older people and higher up in the social status.
Segmentation and differentiation has been discussed in a later part of this section.

42
Fig. 5.1 identifies „Lifestyle‟ as the over lapping area between luxuries and wants. This
signifies that there is hardly much difference between wants and luxuries. The Luxuries are
becoming the wants, making it difficult to differentiate.
The researcher chooses to refer to it as the „lifestyle‟ or the „lifestyle goods.‟ The
overlapping
area between wants and luxuries- the Lifestyle actually signifies the normal nature of many
luxury products in Kuwait. The needs include the requirement indispensable for existence
like basic food, clothing and shelter. Wants are simple desires or demands and luxuries are
similar to wants but unlike wants, they are generally known for facilitating very high levels of
comfort or enjoyment. Lifestyle goods in this context are actually luxury products that have
actually evolved to become the wants of the people. The wants have actually moved towards
the luxury products. The concept of lifestyle enhancement is a very important trend in
Kuwait. Lifestyle goods are not simply wants because they facilitate self esteem, comfort and
enjoyment but not necessarily a high social status.

43
5.1.2 The complex consumer features and the signs of differentiation in the Kuwaiti luxury
market
According to a Boston consultancy group study, Kuwait stood fourth in a world ranking of
concentration of millionaire households (8.4%) in 2010. In terms of assets, the biggest
proportion of the wealth is held in cash and deposits followed by equities and bonds. Vathje
explains “The concentration of wealth, cash heaviness of portfolios and a high share of
offshore
wealth in Kuwait are unique feature” (Boston Consulting Group, 2011) . Kuwait is a
rich country with rich households.
This data actually shows that at present, a considerable number of people in Kuwait have
already had the purchasing power of the world‟s top luxury products. But, the luxury market
in Kuwait has a distinctive phenomenon. During research in most of the companies, it was
noted that for the lifestyle luxury goods the top richest class only contributed to a very low
percentage of consumption.
It was observed that in Kuwait the luxury consumers are divided into two groups: The first
group includes only the 10-12% of the Kuwaitis. This consumer group has very strong
economic strength, was relatively older in age and higher in social status. When choosing
luxury products, they would give more consideration to the brand‟s culture background,
design and other factors. They tend to focus on purchasing more expensive products like jets,
highly expensive cars, luxury yachts etc. They tend to pay more attention to the enjoyable
experience obtained in the course of consumption, not just focus on the product itself.
Specific high end luxury products are simply targeted at this group because of the high cost
or perceived value of the product. This segment specifically includes royal family members,
rich sheikhs, politicians, rich business families. The other group includes the “new generation
of luxury buyers”, who were mostly born in the 1980s. This group constitutes a major group
of luxury consumers in Kuwait. They are young and are extremely sensitive to luxury brands
and information about the fashion industry across the world. They do not have very strong
economic strength to support their consumption. Therefore, most of the products they buy are
lifestyle products. This group is dependent on personal wealth or the cheaply available credit
facilities. This group includes nouveaux riches, professionals, as well as the fashionable
young people from rich families. Kuwait‟s luxury consumer group is a complex one that
constitutes people from a range of income groups and social classes. Here, the people pay
more attention to the style, on-going promotions and the brand image more than the quality or

44
service. This analysis shows that presently Kuwait has clear signs of differentiation. Although
the traditional cultural values are still very much existent, the Kuwaiti luxury consumer‟s
psychology is increasingly being influenced by the American culture.

4.1.2 Low Competitive features and retailer dictatorship in Kuwait

In Kuwait it was observed that the consumers are largely treated as an audience and
businesses have the upper hand. A luxury market analyst says “businesses have more
influence in Kuwait than the consumers” (M, Kuwaiti, KBC). Also, globalisation has not
significantly increased the competition in the luxury market in Kuwait, although it has
broadened the luxury market and led to the introduction of new brands in Kuwait. Except for
a few entry-level luxury products, almost all the luxury brands are represented by single
retailers or agents. Also, most of the retailers represent multiple brands individually and
exclusively. Consumers have no choice but to choose from the very few retailers or choose a
particular brand from a sole retailer in the market. A small change was noticed here;
travelling is opening boundaries, raising awareness and increasing the options for luxury
buyers, but not in the case of high end luxuries e.g. luxury cars. A sales manager says “the
business in Kuwait is crazy, anything and everything sells” (M, Kuwaiti, AJAC). Individual
needs are perceived to be insignificant, except in the high-end luxury retail sector where the
price and the perceived value of the products are very high. Luxury retailers depend on past
patters and behave reactively.
The way of doing business in Kuwait is debatable in the long run, especially when consumer
awareness is increasing. On the other hand, the lack of competition forces the consumers to
choose from the available options giving businesses the upper hand. Each luxury retailer is a
dictator in his own domain of brand portfolios.
The consumers are forced to remain loyal to the retailers in order to buy products of their
favorite brands.

4.2 The impact of the Internet on luxury marketing & consumer behavior in Kuwait
In the last decade the use of the Internet has grown tremendously in Kuwait from 150,000
users in the year 2000 to 1, 100,000 users in 2010 which was approximately 40% of the
population then (Internet World Stats, 2010). “The young people in Kuwait constitute both
the highest concentration of the Internet users (estimated to be approximately 63% of all

45
Internet users in Kuwait) and the largest consumers in the Kuwaiti society are very important
for lifestyle product retailers. Also, their Internet practices are likely to stimulate the most
significant changes in the Kuwaiti society” (Wheeler, 2003). It was found that the Internet
continues to liberate the Kuwaiti youth from the conservative social codes which also
signifies the presence of social conservatism in Kuwait. The Internet has become a
fascination and an important part of the lives of the Kuwaiti youth. Most of the users use the
Internet simply for social networking, watching videos or educational purposes. It was also
noticed that only a few users followed products online and a very few of them used the
Internet to buy luxury products which were unavailable in Kuwait. The websites of most
luxury retailers in Kuwait are very basic and do not have any transactional features. A
marketing manager explains that people never buy products online that are available in
Kuwait because they like to buy it directly from stores/outlets or showrooms rather than
worry about deliveries (M, Indian, La Ruby). Similarly most luxury consumers shared similar
views that they do not feel secure about carrying out transactions on the Internet. Also,
shopping is convenient and a source of entertainment for most. The malls are the sacred
havens for luxury consumers because they provide sanctuary from the harsh climatic
conditions. Also, people do not appreciate sharing their personal details online. They are
infophobic, which shall be discussed in a later section of this chapter. The Internet has a huge
impact on the lives of the youth. It offers marketing opportunities for retailers but low
ecommerce and CRM potential.

4.3 Insights to luxury marketing in Kuwait

4.3.1 The use of traditional marketing methodologies in Kuwait
It has been continuously observed that traditional marketing approaches are more prominent
in Kuwait. Although luxury brands in Kuwait employ various traditional as well as few
modern marketing practices like relationship marketing. It was also found that „word of
mouth‟ was a very important feature of marketing in this small country. A marketing
manager says “Word spreads like wild fire in Kuwait; a small spark is enough to do the job,
so advertisements and campaigns are less painstaking except during penetration periods” (M,
Kuwaiti, La Moda). Another says “Marketing comes with the malls as well in Kuwait” (M,
Lebanese, Al Ruby). The location of the brand‟s outlet/showroom/store really matters in
Kuwait. The best malls attract the maximum number of shoppers, especially luxury

46
consumers which helps in marketing automatically. Kuwaitis are the most valuable for luxury
businesses. A luxury brand‟s best collection of products can generally be found in the malls
around the areas with high concentrations of rich Kuwaiti population or where Kuwaiti‟s
supposedly shop more. It was also noted that promotional offers and promotional gifts have a
significant positive impact on the behaviors of luxury consumers in terms of marketing.
Also it was noted that most of the luxury consumers looked for a good shopping experience
in terms of hospitality, a feeling of self esteem, status complete shopping experience etc. It
was noticed that all luxury retailers/brands employed traditional marketing methodologies
such as the „marketing mix‟ and also relied on traditional marketing methods such as media
channels like the magazines, television, word of mouth etc. Price is a major differentiator in
this market and high prices help in increasing the perceived value of the goods and helps in
facilitating word of mouth and marketing. Consumers in Kuwait are less vulnerable to prices
especially in the top-end luxury market.

4.3.2 Customer service and digital marketing in Kuwait

The rise in the use of the Internet and social networking websites has increased the potential
for digital marketing. The Internet if exploited appropriately can prove to be a good
marketing channel, especially in the lifestyle luxury goods which are targeted at the younger
population who are also the main users of the Internet in Kuwait. Also it was found that most
of the Kuwaiti lifestyle luxury consumers were happy with the customer service they
received as they didn‟t care much about the post sale relationship or services.
Expatriate interviewees who used lifestyle luxury goods complained about the bad customer
service or situations where their complaints weren‟t addressed as expected by them. Kuwaiti
luxury customers have expectations but have adapted by lowering their expectations, since
their choices are few when they are brand loyal. Luxury consumers were neither satisfied nor
dissatisfied about the customer service they received, they are also less brand loyal. The main
reason a lot of them shop when travelling to other countries is because of the availability of
more options and the better shopping experience they receive in terms of treatment, esteem
and status.
The next section analyses the views of personnel and luxury consumers with respect to CRM
in Kuwait. The researcher also investigates the impact of CRM by analyzing various factors
like perceptions, business environment as well as the companies that have already

47
implemented CRM systems.

4.3.3 CRM is not CRM in Kuwait

Out of the five companies where research was carried out, all the companies have certain
CRM strategies in place but specialized CRM systems are implemented at AJAC and KBC
and is in the process of being implemented at Al-Tronix. At AJAC there were different CRM
systems for each of its luxury car brands. At KBC the CRM systems were implemented only
for a few of their brands. A marketing director at AJAC explained that the parent car
brands/companies enforced CRM systems as a standard. They are the retailers for some of the
top-end luxury car brands. He also explained about how the application was beneficial for
them in their industry for managing the data of their customers for keeping in touch with the
car owners regarding their car‟s maintenance, new product launches, customer inquiries, etc.
For most of them CRM is just a data driven application that helps in engaging with customers
and eases communication. He also pointed that the systems were aimed at retaining
customers and increasing brand loyalty. Initially, the systems provided a positive impact on
customer insight, retention, frequency and loyalty but with time they lost its effectiveness.
The systems did not help much in providing consumer insight. With time, there was no
significant positive impact on repeat purchase or customer loyalty. The customers themselves
behave as an audience. Although the CRM systems improved customer experience but they
did not fulfill customer expectations.
The marketing executives at KBC explained about how CRM systems proved to be very
expensive with low returns. CRM systems were implemented by few of the brand divisions at
KBC. No significant increase in sales was noticed post-implementation by any of the brands.
Their CRM systems failed to provide insights. Many marketing managers and executives
pointed out that CRM is not being accepted by the Kuwaiti lifestyle luxury consumers
because they are „Info-phobic‟. It was also found that lifestyle luxury consumers did actually
experience „info-phobia‟ and they do not appreciate providing personal details or getting
contacted. This forces these retailers to choose a reactive approach.
At Al-Tronix the marketing executives said that CRM was beginning to become vital in their
industry and their products were luxury consumer electronics. This system would help them
in providing insight and targeting customers effectively. He mentioned that although they
aren‟t expecting any significant increase in sales post-implementation, it‟ll help them in data

48
gathering and reducing costs.
Customers in Kuwait choose to maintain a direct personal relationship with the sales staff or
the store managers for communications and therefore the stores‟ team work‟s on identifying
and recognizing their frequent and loyal customers. The store manager for a very reputed
American fashion brand under the management of KBC (M, Kuwaiti, KBC) said “we have
good specialized CRM systems in place and we have very high sales too, but then as per the
CRM systems we have a very low customer base because none of the customers choose to get
registered with us for communications or as part of our loyalty programs making the systems
less useful.” The managing director at La Ruby (M, Indian, La Ruby) says these systems are
expensive to implement, they have high maintenance and training costs involved, they have
minimal returns in our industry. Creating the perfect experience is vital, so our sales team is
trained to understand the customers well and maintain direct personal relationships with
them.” These companies choose to use a more traditional approach to relationship marketing.
In the lifestyle luxury retail sector CRM was important but they failed. It was found that
there were other various factors that played an important role in retaining customers and
enhancing their loyalty or selling them more such as hospitality, feeling of belongingness to a
particular class of the society, style, brand image and popularity, place, price, promotions,
the product itself and lack of competition that facilitated word of mouth and helped in
increasing sales.

4.4 Implementing CRM in Kuwait: problems and challenges for luxury retailers
4.4.1 Low data quality and insignificant insights
CRM and data management personnel at most of the retailers mentioned about the scattered
nature of the data. Retailers generally differentiate between Kuwaitis and non-Kuwaitis to
differentiate between genuine buyers and potential buyers or onlookers because Kuwaitis
obviously spend more. “Kuwaitis are handled with care” (F, Kuwaiti, La Moda).
Consumers do not like to register themselves for any communications or loyalty schemes.
CRM systems are like cattle without fodder especially in the lifestyle luxury market where
people just shop out of boredom. Gathering data is easier for the top-end luxury segment but
difficult for the lifestyle luxury retailers and the quality of the data gathered is of no
significance to the lifestyle luxury retailers. Data gathered has no clarity of fixed patterns and
it is dangerous to rely on this data. Retailers must adopt strategies to collect good quality of

49
data.
Since e-commerce is not used in Kuwait, gathering good quality customer data becomes even
more difficult. Also, consumers in Kuwait dislike marketing communications via e-mails and
sms‟ from retailers. Also, it was found that continuous marketing communications from the
brands made them look desperate and less valuable in the minds of the Kuwaiti consumers.
E-mail marketing was found to have very little or no impact presently. Consumers seldom
sign up for any enewsletters or marketing communications from the companies online.

4.4.2 Foreign vendors and consultants control the CRM industry

Kuwait lacks local CRM vendors and consultants. Most projects are always won by foreign
vendors. Kuwaiti firms are rich, but implementing CRM is very expensive because foreign
vendors and consultants control this niche market. Seeking CRM expertise from these foreign
vendors also becomes very expensive for luxury retailers in Kuwait. These consultants and
vendors are not equipped with the right knowledge of the local market as well. Local vendors
and consultants lack the expertise or are too weak to compete with foreign vendors or
consultants. There is room for expert local vendors with unique local experiences and
relationships.

4.4.3 Wrong Perceptions of CRM in Kuwait

The failures of CRM systems have manipulated the perception of CRM in Kuwait. It is
merely perceived and used as a database application that facilitates communication. “Just as
people often make a mistake in perceiving that only advertising builds a brand, quite a large
portion of people still think CRM means software or even a call center. So what are the
natural results? The truth is no brand could be built successfully if you focus only on
advertising, and no successful CRM can be done if you focus only on software or the call
center” (Lee, 2006). This perception is too strong to change any time soon. It can only be
expected to change once the competition increases, economic liberalisation takes place and
consumers become mature.

4.4.4 Customers in Kuwait are „info-phobic‟ and the lifestyle consumers show least
interest
towards relationship marketing
Lifestyle luxury consumers in Kuwait are „info-phobic‟. They are uncomfortable in providing

50
any personal information unnecessarily to these retailers, making it even more difficult for
lifestyle luxury retailers. Also, most of them thought it was simply irrelevant. Lifestyle
consumers do not look forward to hearing from retailers and show very low level of interest
in maintaining relationships with them. Consumers in the top-end luxury retail sector are
different; they look forward to hearing from the retailers and showed a higher level of interest
in their retailers maintaining a closer relationship with them. These consumers look forward
to new products entering the markets and read less on the Internet. This segment is a low user
of the Internet, so the best way to contact them is through direct mails or telephones.
Telephones are more useful in facilitating CRM in Kuwait than the Internet. On an average
every person in Kuwait has direct access to at least one cell phone (The World Bank, 2011).
Comparatively the Internet users in Kuwait are much less when compared to the mobile
phone users in Kuwait.

4.4.5 Conflict of interest between the luxury brands and the retailers
There is a conflict of interest between the retailers and the luxury brands in Kuwait. The
international brands aim at increasing the customer‟s loyalty towards their brand and on the
other hand the retailers aim at increasing the customer‟s loyalty and frequency towards their
company and any of their brands. The Kuwaiti retailers care less about customers moving to
different brands as far as they are moving around the company‟s brands.
The retailers care about selling more from any brands and the brands care about selling more
of their own products. The retailers and the brands must work towards mutually beneficial
common goals. CRM even becomes more difficult to implement in such a scenario where the
top management of the company is least interested.

4.4.6 CRM in the Kuwaiti luxury market has not provided luxury retailers with any
competitive advantage
Identifying customer needs and fulfilling by building successful relationships individually is
not enough to gain competitive advantage anymore. Luxury customers look for experience
and expectation enhancement from brands and not mere delivery or service.
People in Kuwait are very used to telephones or cell-phones for communication. The Internet
as discussed has very low impact on facilitating CRM in Kuwait in the top-end luxury sector
and a potential in the lifestyle market. Although the companies have spent tremendous

51
amounts of money on planning and implementing CRM strategies, the CRM systems have
failed to generate significant benefits or give the brands competitive advantage. Both the
companies have implemented a number of CRM e-business suites but it has failed to increase
customer frequency or loyalty. Luxury Marketing in Kuwait isn‟t about offering customers
what they think they want, it is about offering them beyond what they expected or something
they didn‟t expect. The competition in Kuwait is low. The existing luxury retailers started
early
and became very powerful. These retailers compete amongst themselves for becoming the
brand‟s official retailers in Kuwait. It is difficult for new entrants to compete with these large
retail giants. Also, the consumption features suggests that consumers are less mature in
Kuwait.
Implementing sophisticated CRM systems in Kuwait will not provide any competitive
advantage.

4.5 The impact of CRM in the luxury retail sector of Kuwait

It is clear that CRM is as important to businesses as water is to plants. Some plants live
longer without water for years and many of them die but eventually the plant needs water.
Although water isn‟t the only source of life for plants, it is essential. Kuwaiti business‟ are
realizing that they cannot go very long by ignoring CRM as this is beginning to have an
impact. CRM currently has a low impact in the luxury retail sector of Kuwait but at the same
time it is essential for maintaining the experience and expectations of the customers.

4.5.1 The failures

The consumer behavior is still immature and the CRM systems have failed to gain the loyalty
of the buyers. There are issues with data collection and consumers need more than CRM to
increase their loyalty and frequency. These rich and dominant luxury brands and retailers in
Kuwait need something way beyond CRM to tackle the issues with respect to acquiring
customers, retaining them and enhancing their loyalty. The luxury consumers in Kuwait are
rich, powerful and look for lifestyle enhancement. Luxury businesses in Kuwait can only gain
competitive advantage when they use CRM as an important ingredient but not the recipe for
success. Luxury businesses have to look beyond the paradigms of traditional marketing,
relationship marketing and customer satisfaction. This paper does not criticize CRM but
instead makes a point that in order to increase the loyalty of luxury consumers, a business

52
cannot rely on satisfying their needs. These consumers are rich and well satisfied. If another
brand or retailer offers them something that uplifts their lifestyle or enhances their experience
or expectation, they will not care about their brand loyalty as far the brand is highly reputed.
The CRM systems have helped in reducing costs but are failing in providing brands with any
competitive advantage. It is failing to increase the brand loyalty, frequency amongst the
customers and the profitability of the businesses. The link between CRM and income, loyalty,
frequency and sales is decreasing and becoming less effective. This clearly says that
consumers in the Kuwaiti luxury market cannot simply be tamed using CRM. ACRM aims
to attract new customers and retain them it. In the Kuwaiti luxury market it is not helping in
preventing the customers from being attracted by other brands or retailers. Most Consumers
& retailers said that CRM does not enhance customer behavior significantly.

4.5.2 The positive impacts

Many interviewees agreed that CRM improves their perception towards the brand and it‟s
goodwill but disagreed that it does not facilitate loyalty necessarily. Luxury businesses need
to think beyond CRM. CRM has uplifted the image of the luxury brands and the retailers.
A CRM process should be effective and fastest to solve customer‟s queries and provides them
best services. Telephonic and sms based solutions are the best and effective to interact with
the customer because it save time and cost and consumer can use CRM services at any place
at any time. These factors have increased and now maintain the good will of the luxury
brands and the retailers but not necessarily its sales and customer loyalty.

4.5.3 CRM cannot alone contribute to customer satisfaction and success

Luxury brands for long have been built on building and maintaining strong relationships with
their consumers. It does not give them the competitive edge over their competitors. CRM
alone cannot help in marketing of the firm or facilitating word of mouth. One person‟s need
may not necessarily another person‟s need. Word of mouth in the luxury sector facilitates
when businesses exceed consumer expectations, enhance consumer experience and esteem.
Consumers are also ambassadors for brands and retailers. Firms cannot simply count on
relationships marketing to facilitate word of mouth.
The important point is that only a single factor cannot contribute in the success of firms. With
high brand name, goodwill or quality of products, it is necessary to concentrate on all the

53
determinants that shape the behaviors of consumer to become loyal and frequent. CRM aims
to enhance experience through better customer interaction strategies.

54
 CHAPTER 5
Findings And Suggestions

This chapter presents recommendations and improvement strategies for the luxury businesses
operating in Kuwait with respect to increasing the impact of CRM, digital marketing and
increasing customer loyalty and retention. These recommendations are realistic and valid for
the luxury market of Kuwait. CRM might have its impact in the retail business but it does not
have a significant impact on the customer behavior in the luxury. Although CRM might be
essential to maintain certain standards of customer service and relations but its relationship
with profitability, revenue, competitive advantage, customer loyalty etc. is very weak and
insignificant. The Kuwaiti luxury market requires a different approach to enhance customer
loyalty and frequency. Here the consumers look for experience enhancement not in terms of
interactions but in-terms of deeper personal relationships, lifestyle upliftment and esteem
enhancement. Competitive advantage here can be gained by enhancing the expectations of
the customer from time to time. Their needs must be fulfilled in manners they never
expected. If you ask the customers what they want, they would probably ask for faster horses.
This chapter provides recommendations to resolve the issues with respect to CRM in the in
an optimum way.

5.0.1 The particularity of the Kuwaiti luxury market indicates that international brands have
potential advantages in marketing luxury goods in Kuwait. They do not have much
competition from local luxury brands that lag behind in philosophy, brand development and
marketing model. Although many international brands have their own designing and
marketing system, they still face great obstacles when dealing with foreign customers. The
Kuwaiti retail enterprises that represent these brands play an important role since they have
developed in the local social and cultural environment that facilitates a better understanding
of Kuwaiti consumers‟ unique internal demand for luxury products. It is essential that they
both work mutually towards their success.

5.0.2 Luxury firms in Kuwait must accurately orient luxury consumers according to their
status. Kuwaiti luxury consumers can be divided into two categories. One group mainly
consists of high-end consumers who have strong economic powers. The main purpose of their

55
consumption is to fling their success and enhance their experience. Therefore the product‟
design, high prices and distinctive logos should be emphasized when making sales to this
group. The second group is mainly constituted by the young lifestyle consumers. They buy
luxury products mainly because they want to keep abreast with consumption behavior of their
social group. Besides, they also intend to display their fashionable life-style to the others.
Therefore, it is essential to promote the idea that the luxury product symbolizes life style and
social upliftment. Customers need to be given a feeling of being privileged for successful
marketing.

5.0.3 The marketing of luxury products should highlight the value of the product. As has been
mentioned above, the main purpose of Kuwaiti luxury consumers is to show their superiority
in the social class. Therefore, companies should be able to launch marketing activities that
can reflect social class, using prominent logos to fill their products with more symbolic value
of wealth and to meet the psychological needs of luxury consumers. Companies should
employ an effective marketing mix strategy and distinguish them from ordinary products.
6.0.4 During the marketing of luxury goods, the brands should be able to integrate cultural as
well as western elements into the product design and branding, giving luxury products a
unique significance. This is of great importance not only to enhance the brand value of luxury
products, but also to better Kuwaiti consumers‟ understanding of luxury products.

5.1 Essentials of Digital Marketing in Kuwait

Internet can be a good advertising tool but it isn‟t great for CRM. Retailers generally do not
have their own websites because they think it doesn‟t make sense for them. But brands must
ensure that they create a perfect experience for Kuwait customers visiting their website and
must direct Kuwaiti customers to their Kuwait page that should be managed by the brand
along with the retailers. Websites can be promotional. But gathering customer data and
information for CRM through the Internet is painstaking but possible, it just need a push. The
ultimate goal is to get them to log-in and register at least. Top-end customers (seldom use the
Internet) can be persuaded to register their products online but it is not so important because
data collection is easier here. Lifestyle customers who are the mostly the regular Internet
users can be motivated to register themselves by offering them special promotions which
supposedly facilitates positive impact. This way more clear data can be gathered, customer

56
profiling and monitoring customer behavior will become easier.
Other web strategies could include using viral marketing campaigns and social media
marketing to target the young lifestyle customers. When you do a promotion using social
media, create and store campaign meta-data about that promotion, just as you would with a
direct mail promotion. Save the date, time and details about the specific promotion and the
targeted audience. Having done this, you can then start to analyze the effects of that
promotion on store traffic and sales. Websites must be mostly promotional with minimal
transactional features and should create a very high level online experience.

5.2 C3E: Customer Experience and Expectation Enhancement: The recipe for
success
Given the benefits and issues with CRM in the luxury retail sector of Kuwait the researcher
suggests a strategy that does not simply aim at satisfying consumers through interactions. The
businesses need to carry extensive study in order to determine the importance and
significance of CRM in their industry before implementing it. Brands and retailers must
together use strategies that aim to enhance the experience and expectations of their customers
regularly.
Simply working hard at the existing approaches even though they are excellent is not
sufficient to create demand. Luxury retail requires continuous innovation in terms of
customer expectations and experience enhancement. Product and service features are
becoming easier to copy. Luxury businesses require an unrelenting focus on identifying and
delivering additional, differentiating and enhanced value for customers. The retailers and the
sales team capture the actual trends in real time. CRM implies using technology to enhance
customer value, whereas technology should be used only where it adds customer value. This
will also create a competitive behavior in the market and help businesses focus on securing
competitive advantage. A luxury consumer will only be loyal to the brand and the retailer if it
enhances his lifestyle, self-esteem, social image. After a point these consumers tend to get
bored and look for a better experience, this is where C3E plays an important role. If the
brands and retailers enhance the overall experience and expectations of customers regularly,
this will help in customer acquisition and retention including enhanced loyalty and frequency.
This way the brands and retailers will both work together to achieve competitive advantage.
The success of a brand is also the success of its retailer in terms of sales.

57
Either the name CRM should be changed in the luxury retail sector to avoid misinterpretation
or CRM needs to be redefined, or broadened to encapsulate other marketing elements with
special focus on experience and expectation enhancement. Traditional marketing might have
its set of drawbacks and costs, but CRM cannot replace the benefits of traditional marketing.
In the Kuwaiti luxury market both these paradigms go hand in hand. Both are essential for
marketing.
In the earlier chapter, the researcher provides a pyramid framework by Chu and Pike (Fig.
1.1) for CRM in the retail sector. The framework does not illustrate continuous improvement
and assumes that competitive advantage has been achieved. This paper provides a framework
as a recommendation for luxury retailers. The framework has been drawn upon the idea
presented by Chu and Pike to broaden the concept and include various other factors. The
paper also discusses the goal and benefits of C3E. C3E as a recipe requires luxury retailers to
choose the ingredients carefully after a thorough assessment of the industry and their strategy.

58
Figure 5.1 present‟s the C3E framework as recommended by the researcher. The researcher
believes that success in the luxury retail sector can be achieved my managing and enhancing
customer expectations and experience. The illustration has been briefly explained below:

C3E strategy: The researcher uses this name to avoid any misinterpretations and to
emphasize on the need to enhance customer experience and expectations to create demand for
the products.
Identify and Understand Customer expectations: C3E requires businesses to identify and
understand customer expectations. This can be done through effective customer interactions,
sales team feedback, CRM, data integration, market research, surveys, analysis, Customer
behavior patterns etc. It is important to understand what the customer desires not just in terms

59
of products and services but in terms of overall experience and expectations. This phase
includes closely studying the psychology and mentality of the consumers.
Effective Customer Interactions and Marketing: Effective interactions are vital to understand
the customer, enhance their experience, deliver their expectations, and inform them about the
goods. CRM is essential here for two way interactions, but in Kuwait luxury customers
demand deeper and personal relationships. Kuwait is a small country and maintaining direct
relationships for high-end luxury brands is not so difficult. Branding, marketing, advertising,
web, customer care, Point of sales service, Call centers, corporate communications, public
relations etc are all essential in interacting with customers, marketing, enhancing and
managing customer experience and expectations. Depending on the contingencies of their
respected business environment, luxury retailers need to use the best ingredients. For e.g.
sometimes technological CRM might look beneficial or only call centers may be beneficial
and sometimes not.
The main goal of C3E is to enhance customer satisfaction by surpassing and enhancing their
overall expectations and experience from time to time and better than the competitors. It
requires providing differentiating value for customers. This way luxury businesses can
proactively avoid failures like missed customer expectations before they occur. Luxury
customers are satisfied customers by all means, what they need is enhanced satisfaction and
brands that are able to enhance their lifestyle, esteem, social status and surpass redefine their
expectations and experience. C3E will help in generating and increasing a high degree of
customer value, customer loyalty, frequency, retention, organisation‟s reputation and
goodwill. This way the organisations can increase their market share by increasing their
customer base and increase the profit per customer by extending the customer-life cycle
duration. C3E needs to be the governing paradigm for customer-facing processes.

60
 CONCLUSION

This chapter provides a conclusion to the entire research work by highlighting the important
observations and thematic findings. This chapter aims to establish the relation between the
findings and the research questions. Additionally, this chapter provides a section that
highlights the recommendations briefly as well as the future research opportunities.

6.1 Assessment of findings

It is a highly accepted fact that organisational success lies in remaining customer focused.
Unfortunately, many companies do this the wrong way by asking customers what they think
they want. Consumers describe their want in terms of products and services based on their
own experience from the products and services of the company. Companies develop complex
systems to meet their requirements and measure customer value. Meanwhile the competitors
are beating them at their own game.
Customer behavior in Kuwait is immature. Luxury products are very important to Kuwaiti
consumers. Customers care about experience enhancement in terms of self-esteem, social
status, lifestyle, customer service and how the product or service has made their life easier
and better. Primarily Customers are brand, price, promotion, image and lifestyle conscious.
Customer service and quality are important but secondary factors. Customers in Kuwait look
for lifestyle enhancement and ways to flaunt their success. Although traditional cultural
values are deep rooted the western culture has a remarkable influence on the Kuwaiti
mentality. The paper has differentiated between the needs, wants and luxuries in the findings.
The luxury market has been divided into two: The lifestyle luxury and the top-end luxury.
Luxuries are an important part of the Kuwait lifestyle. The top-end luxury market consists of
the richest and highest in the social status. This group is relatively older. The lifestyle market
targets the younger „internet using‟ generation, also the highest contributors in this industry.
They depend on cheap credit facilities or personal wealth. They mainly focus on the brand‟s
perception, price and lifestyle enhancement.
In a small but highly profitable luxury market like Kuwait CRM is not very effective in terms
of giving organisations any form of competitive advantage. It only shows a weak impact on
consumer behavior. CRM is not a fancy contact management or communication tool.
It should help the entire organisation and not just the marketing team.

61
Proper CRM is complex, big and expensive.
In a market like Kuwait where customer perceptions, needs, buying power, mentality are
unique and the markets are less liberalized, competitive, customers are info-phobic and
ecommerce is not developed at all. Shopping is highly about experience, it becomes even
more
difficult to implement CRM. CRM implementation in the luxury market of Kuwait has shown
few positive signs like helping the brands in knowing their customers and to meet their
minimum expectations, but they aren‟t enough for overall success of organisations and to
enhance customer value. Managing customers in Kuwait is much more about deeper and
personal relationships. Writing down details of customers when businesses are capable of
knowing them directly in many situations does not make sense. Luxury businesses require
more than CRM to include various other factors that enhance customer retention loyalty, and
frequency.
Luxury customers in Kuwait are disloyal because they look for brands and products that
enhance their experience and their expectation. CRM alone cannot be of much significance in
such a scenario clearly. Success for Kuwaiti luxury businesses in terms of customer loyalty,
frequency, retention, profitability and competitive advantage revolves around gauging,
identifying, maintaining and enhancing customer expectations, leading to superior customer
satisfaction. CRM plays an important role in gauging and identifying customer requirements
but these requirements and expectations are in terms of products and services. There are
various other factors in the luxury retail that are important. Expectations are based on hidden
needs, goodwill, perceptions about the company. CRM is important for businesses to
maintain their relationships but it does not significantly, directly or solely help in customer
retention, satisfaction, loyalty, competitive advantage in the luxury market of Kuwait.
Companies need to identify the various variables that enhance their expectations and
experience by carrying out sophisticated research to understand customers rather than relying
on CRM.

6.2 Authentication: Relation of Research Findings with Objectives

This section tries to determine the extent to which this study has been able to resolve the
research problem by trying to link the analysis and findings with the research aims and
objectives.

62
6.2.1 To critically evaluate the important features of the Kuwaiti luxury market, its distinctive
features and consumer behavior
In the second chapter of this paper the researcher tries to provide a brief but concise overview
of the Kuwait‟s business environment using the PESTEL framework. Additionally the fifth
chapter (findings & analysis) sheds light on the distinctive features of the market and the
consumer mentality, behavior in Kuwait. To achieve this objective, the researcher relied on
personal knowledge, experience (The researcher was born and bought up in Kuwait) and
reliable sources such as journal articles, web articles, governmental websites and databases.
Further the thematic analysis of the in-depth interviews highlighted significant features of the
Kuwait luxury market and the consumer behavior. The Kuwait luxury market is sophisticated
with distinctive business & consumption features. Consumer behavior is immature and there
are various complex factors that influence consumer behavior.

6.2.2 To investigate literature, theoretical models and frameworks related to retail CRM and
its relevance for luxury businesses in Kuwait
In the first chapter the researcher provides a brief section describing the theoretical
motivations for this paper, the second chapter discusses the literature, theoretical models and
various frameworks of CRM. In the sixth and seventh chapter the researcher analysis and
highlights its relevance for luxury businesses in Kuwait. Although the seventh chapter mainly
provides recommendations it does highlight a few points about the relevance of certain CRM
frameworks. In this market many of the discussed CRM theories and frameworks were less
relevant alone. The market is not liberalized; the market is controlled by the few retailers, and
consumption features are very different and sophisticated.

6.2.3 To evaluate the awareness, presence, perceptions and actual implementation of CRM in
Kuwait
The accomplishment of this objective is well prompted through the qualitative thematic
analysis. The interviews conducted with managers and customers are responsible for the
accomplishment of this objective. The thematic analysis has highlighted the awareness,
presence, perceptions as well as the actual implementation of CRM in the luxury
organisations of Kuwait. The analysis also included evaluating the perceptions of consumers
towards CRM and its approaches to study the impact of CRM. CRM systems have been

63
implemented in two luxury organisations out of the five where interviews were conducted,
although the theoretical ideologies are present in almost all of them. CRM is perceived
incorrectly in most cases. Consumers experience info-phobia and it is difficult to gather high
quality data. CRM has a weak influence on this market.
6.2.4 Evaluate the marketing and CRM strategies of a few successful luxury retail
organizations in Kuwait
The paper in chapter six talks about the marketing methodologies and CRM approach of a
few luxury firms in Kuwait. Consumers in Kuwait also react significantly to certain
traditional marketing approaches and the businesses relied on traditional methods for
marketing. Word of mouth and the marketing mix have a huge impact on product marketing
in Kuwait. CRM is not CRM in Kuwait- The lack of impact and wrong perceptions has
simply made CRM nothing less than a contact management or communication tool.
6.2.5 To critically evaluate the significance or impact of customer relationship marketing on
consumer behavior, profitability and competitive advantage in the Kuwaiti luxury retail
market, its assets and liabilities
In order to achieve this objective, the researcher has evaluated various determinants and
factors such as perceptions towards different marketing methods, satisfying factors, values,
family background, income levels etc. to understand consumer behavior. Data was also
collected from organisations to study the impact of CRM on consumer behavior and the
organisation‟s sale and profitability. The competition is low; consumers are complex, disloyal
and require luxury products to fulfill various psychological needs. The impact of CRM on
consumer behavior & organisational success in the Kuwaiti luxury market is weak.

6.3 Recommendations
The Paper has recommended various strategies that Kuwaiti luxury retailers can employ to
successfully market themselves and gather clean data to facilitate CRM & C3E.
The important recommendations made include the following:
7.3.1 The main purpose of Kuwaiti luxury consumers is to show their superiority in the social
class and display their lifestyle. Therefore, companies should be able to launch marketing
activities that can reflect social class, using prominent logos to fill their products with more
symbolic value of wealth and to meet the psychological needs of luxury consumers. The
Companies should also be able to employ an effective marketing mix strategy.

64
6.3.2 Brands should be able to integrate western and cultural elements in the product‟s design
and marketing to enhance customer‟s understanding about the products.
6.3.3 Digital marketing in the lifestyle luxury sector such as promotional well designed
websites, marketing using social media websites, viral campaigning can all prove to be
important marketing tools if exploited effectively. Customers should be able to avail special
discounts if they register themselves on the company‟s website. This will help in collecting
data and reach out to the respective audience.
6.3.4 Retailers and brands have to go beyond the CRM paradigm in the luxury market. CRM
tell them what the customers expect in terms of products and services. The paper
recommends a strategy that aims to enhance customer satisfaction levels by enhancing their
expectations and overall experience. The customer experience and expectation enhancement
model (C3E) aims to help in continuously delivering beyond what the consumers have
experienced and expected before, not just in terms of products or services but also by paying
close attention to various other hidden factors such as the brand image, lifestyle
enhancement, esteem enhancement, the marketing mix, sales team feedback, psychological
factors etc.

6.4 Further Research Direction

This research has comprised several important aspects that are associated with the importance
and impact of CRM in the luxury retail sector of Kuwait to influence buying behavior of
customers. Due to some limitations of this study various other issues have aroused. These
issues provide the scope for further research to reduce the impact of these limitations. There
are many hidden factors like the smell, high waiting time, communication, perceptions etc.
that have a psychological influences on consumer behavior. It is essential for luxury
companies to consider all these factors which provide scope for further investigation. Also,
the effectiveness and applicability of C3E and the other recommendations made provide
scope for further research. Further research can be carried out on the effectiveness of CRM in
other luxury markets.

65
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 Annexure
1. How do you perceive the role of CRM in enhancing customer loyalty in the luxury retail
market of Kuwait?
A) It significantly improves customer loyalty.
B) It has a moderate impact on customer loyalty.
C) It has little impact on customer loyalty.
D) It has no effect on customer loyalty.

2. In your opinion, how important is personalized communication (via CRM) in attracting

luxury retail customers in Kuwait?
A) Extremely important.
B) Moderately important.
C) Slightly important.
D) Not important at all.

3. How does CRM influence customer purchasing behavior in the luxury retail market of
Kuwait?
A) It greatly increases customer purchasing frequency.
B) It slightly increases customer purchasing frequency.
C) It has no effect on purchasing behavior.
D) It decreases customer purchasing behavior.

4. Do you believe CRM tools are effective in understanding customer preferences in the
luxury retail market of Kuwait?
A) Yes, they provide deep insights into customer preferences.
B) Yes, but only to a certain extent.
C) No, they provide limited insights.
D) No, they are ineffective in understanding preferences.

5. How does CRM impact customer satisfaction in the luxury retail market in Kuwait?
A) It greatly improves customer satisfaction.
B) It has a moderate impact on satisfaction.
C) It has a minimal impact on satisfaction.

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 D) It has no impact on satisfaction.
6. To what extent do you think CRM systems help luxury retailers in Kuwait to retain high-
net-worth customers?
A) CRM systems play a major role in customer retention.
B) CRM systems help to some extent in customer retention.
C) CRM systems have little impact on customer retention.
D) CRM systems do not contribute to customer retention.

7. How would you rate the role of CRM in improving customer experience in the luxury retail
market of Kuwait?
A) Extremely effective in enhancing customer experience.
B) Moderately effective in enhancing customer experience.
C) Slightly effective in enhancing customer experience.
D) Not effective in enhancing customer experience.

8. In your opinion, does the use of CRM increase the likelihood of repeat business in
Kuwait’s luxury retail market?
A) Yes, it significantly increases repeat business.
B) Yes, it somewhat increases repeat business.
C) No, it has little impact on repeat business.
D) No, it does not affect repeat business.

9. How effective do you believe CRM is in targeting high-value customers in Kuwait’s

luxury retail market?
A) Very effective at targeting high-value customers.
B) Somewhat effective at targeting high-value customers.
C) Not very effective at targeting high-value customers.
D) Not effective at all at targeting high-value customers.

10. How likely are luxury retailers in Kuwait to invest in CRM technologies in the future?
A) Very likely.
B) Likely.
C) Unlikely.
D) Very unlikely.

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