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1.Understanding Customer Relationship Management

1.1 What is Customer Relationship Management (CRM)?

1.2 What is Market orientation?
1.3 What is Customer centric

2.Customer Relationship Management (CRM) techniques

2.1 Range of CRM techniques

2.2 Range of CRM techniques for Tesco and its effectiveness

2.3.1 The first CRM Strategy that is adopted is a Loyalty program

2.3.2  State the CRM technique

3.Recommendations to improve current CRM techniques

4.Promotional Mix techniques

4.1 Key terms and definition

4.2 Promotional mix techniques used by Tesco

4.3 Evaluation of the current promotional mix techniques used Tesco

4.4Suggestions of other promotional mix strategies which could be used Tesco

1.2 Market orientation

1.1 What is Customer Relationship Management (CRM)?

Customer relationship management (CRM) is a continually evolving domain and now social media technologies have revolutionized the way businesses and consumers interact. ` (Choudhury and Harrigan 2014)

'Customer Relationship Management (CRM) affiliates business processes with customers strategies to build customer loyalty and to increase profit long term. ` (Sheth and Sisodia 2015)

Understanding and example.

Therefore, from the given definitions by the author it can be understood that customer relationship management is an effort and style adopted b the organization to maintain a constant interaction with their customers. For example, Apple has an integrated CRM system which allows the customers to link their apple accounts with the company and receive assistance.

1.2 Market orientation

`Marketing orientation is a business model that focuses on delivering products designed according to customer desires, needs, and requirements, in addition to product functionality and production efficiency .` (Hollensen 2015)

`Market orientation is a company philosophy focused on discovering and meeting the needs and desires of its customers through its product mix. ` (Bresler and Lubbe 2014)

Link to CRM

It can be reflected that market orientation is guidance to the company which helps them in taking actions which are closely related to the desire of the customers. This is connected to Customer Relationship Management because; the customer relationship management helps in gathering the data which is used in market orientation.

1.3 Customer Centric

, Client centric is an approach to doing business that focuses on creating a positive experience for the customerClient centric businesses ensure that the customer is at the center of a business's philosophy, operations or idea. ` (Meffert 2013)

`Customer centric is a way of doing business with your customer in a way that provides a positive customer experience before and after the sale in order to drive repeat business, customer loyalty and profits. And a customer-centric company is more than a company that offers good service. ` (Ramaswamy and Mosher 2013)

Understanding

It can be observed that the client centric approach helps the company to maintain their focus on the welfare of the customers. KFC has a good CRM system which allows the firm to develop products based on the needs of the customers. It is connected to CRM because CRM helps the organization in remaining customer centric.

2.0 CRM Techniques

2.1 Range of CRM techniques

CRM Technique

Further explanation

Tracking customer contacts

When the customer contacts are tracked the company can easily contact the different customers and keep informing them about new offers and promotional activities with respect to the company. This helps the company to stay in touch with the consumers.

Staff Development

The staff needs to be trained effectively. They have to be trained with respect to the treatment of customers and methods to contact them and build a relationship with them.

Loyalty programs

The organization can also keep a loyalty program whereby the customer can be given huge discounts and attractive offers (Foxall 2014).

Customer Relationship Management refers to managing the relationship between the organization and the customers. There are various techniques which can be used in order to attract the customers and make them visit the store again. Therefore, the organization needs to employ techniques like tracking their contacts so as to send mails and messages, training their staff so that they behave ell with them. They can also conduct various loyalty programs in order to retent the customers.

1.3 Customer Centric

                                                                                    

2.2 Range of CRM techniques for Tesco and its effectiveness

Tesco is the number one grocery company in the United Kingdom. It follows a rigorous customer management program with the help of which it has been able to become extremely successful as a brand (Chernev 2018).The two primary strategies used by the brand are given as follows:

2.2.1 The first CRM Strategy that is adopted is a Loyalty program 

The Club card Scheme:

The club card scheme of Tesco was launched in the year 1995. The company had a database of around 12 million customers and the company set a benchmark by starting the excellent technique of Customer Relationship Management.

The technique involved providing great discounts to the customers when they shopped in store. Different categories of products had different discount schemes. Later on to make the program more attractive the company started discount schemes on partnered associates like hotels, petrol, car hire and others

The families were targeted in a manner such that there was an item for everyone and anyone. The Tesco Kids Cub was given for the children whereas the World of Wine club was given to the adults. This helped in diversification and the increase in value proposition.

The data which was collected from the schemes was then used to create a better product and helped the company in getting an idea of what the consumers actually want. The scheme was quite effective in increasing the sales of the company and the profits increased by 5% in the following years.

However, one negative aspect about the scheme was that, loyalty program served to be quite appositive n expensive exercise for the company and secondly not all data can be relied upon (Baker and Saren 2016).

2.2.2 Staff Development 

The Staff development program is often formulated in order to train the employees so that they are able to communicate well with the customers. In the past, various employees of Tesco have received various complaints that they have no knowledge about the products and are unable to provide any kind of information about the products and this tends to provide dissatisfaction to the customers. According to Weinstein and Pohlman (2015), the treatment given to the customers by the employees goes a long way in figuring out whether the customer will be making a repetitive purchase or not. Therefore, after the given complaint is received, the organization has started a system whereby different training techniques were used to make the employees at par with the organizational standards and rules. This way they are able to provide help to the customers and assist them.

2.0 CRM Techniques

The positive aspect of the given Customer Relationship Management technique is that it helps in retention of customers and increases their loyalty towards the brand. According to Gronroos (2016), the store footfall increases by 20% if the employees have a good idea about the products.

The only negative aspect of the given technique is that, the training costs come out as a burden for the organization specially like Tesco who has been facing competition from other retail brands like Woolworths, ALDI and others.

3.Recommendations to improve current CRM techniques. 

The suggestions for Tesco to improve its operations are as follows:

  • Prioritizing the customers- Tesco needs to prioritize the customers and formulate different strategies for them. The loyal customers along with the bulk buyers need to be provided with special programs and tools so as to see to it that they make consistent purchases.
  • Setting goals right- Tesco needs to see to it that the goals and mottos set by them are reflected in their Customer Relationship techniques (Burns, Bush and Sinha 2014). If they aim to increase the market, they should be applying strategies that go a long way in grabbing the attention of the potential customers.
  • Adopting rewards for employees- In order to motivate the employees, whenever it is observed that they are making consistent efforts to improve the organization relationship with the employees; they must be given rewards for their efforts.
  • Analyze and Improve- Lastly, the CRM strategy of Tesco must not be static but a revolving one which changes with respect to organizational needs and desired.

4.Promotional Mix techniques

4.1 Key terms and definition

  • Promotional mix can be described as a combination of various promotional variables that are chosen by a company in order to help the organization to match its aims and objectives. Promotional mix can also be described as a subset of the marketing mix. There are optimal ways of allocating the various budgets for different aspects within the promotional mix but the most important elements are as follows :
  • Advertising- Advertising is a paid presentation whereby the ideas goods or the services are promoted in a mass medium on the request of sponsored. The advertising may be done in a television channel, newspaper, online on websites, Sms advertising or on the radio (Pasquier and Villeneuve 2017). Other examples of Advertising include billboard, direct mail, web pages, mobile applications, posters and catalogs.
  • Personal selling- This is a process whereby a sales executive conducts a one to one communication with the customer and engages in persuasion to convince the customers to buy the given product. This method is generally delivered in the form of an oral presentation, telephonic conversation, meetings and training. The sales executive is lured by the incentive scheme to engage in more revenue generating sales.
  • Sales promotion- These refer to the media and non-media marketing techniques that are generally used for a limited time period to increase the consumer demand and improve the availability of the product. For this method certain incredible offers are provided for a limited time period in order to improve the brand image also.
  • Public relations- This occurs when the product of a company is marketed by a third person in a manner which is indirect. For this method there exists free publicity as well as paid efforts (Coombes and Nicholson 2013). These days celebrities tend to use this method, on instagram and facebook whereby the tend to put up photographs of the product which can then be viewed by millions of followers.

                                                      

  • Sponsorship- In this case an event or a program is sponsored by a major company who wants a maximum view from the customers.
  • Direct Marketing With this method, the consumers tend to directly communicate with the customers through methods like email, website online displays and others

4.2 Promotional mix techniques used by Tesco

Promotional mix

Method

Examples

Sales Promotion

Club cards and Tesco Applications

The company has various loyalty programs whereby certain regular members are offered club membership and they tend to get various discount offers on daily products.  

Tesco has also launched a website and a movie application whereby the various customers can shop online and fulfill their requirements.

Direct Marketing

Email messages and text messages

Tesco has formed a database of various customers with the help of which it sends various offers and promotional messages to them to inform them about the latest offers available.

Media Campaigning

TV Commercials and interactive websites

Tesco advertises in various medias so as to gain the attention of the different customers. They engage in home channels to attract the home makers. They also display their advertisements on various billboards as well (Rothaermel 2015).

Public Relations management

Tesco diet and Talking Tesco’s

Through this the customers can give in their advice or get their grievances addressed. Through the Tesco diet, the company offers fitness advice to its customers.

This has a two way effect whereby the company becomes popular among the employees and the company can even advertise its products in that diet plan

4.3 Evaluation of the current promotional mix techniques used Tesco

Tesco makes use of a very simple promotional mix strategy by keeping in mind the target market of the organization.  The methods used by the company are as follows:

Direct Marketing

The direct marketing strategy of Tesco is one of the most popular ones in the given industry. The procedure which is followed by them is very simple. Whenever, a customer registers through the official website of the company, the company maintains a direct interaction with the customers with the help of various calls, emails and text messages occasionally and during peak season ns. The given method is very successful and popular amongst the customers and through this method the company attracts around 20% of its consumer base. However, the only disadvantage of this system is that the customers often find it disturbing when they receive the texts and calls from the company (Stead and Stead 2013).

  • Emails Messages- Under direct marketing the first strategy used by Tesco is sending newsletters and offer lists to the consumers. They even send special offers and new product deals to the Consumers in order to lure them to buy the necessary product. All the given mails sent are personalized and offers are reflected on only those products which are usually purchased by the given customers. After the consumer has purchased the product, they send them feedback forms to keep upgrading their systems. Through this method, the company also comes to know about the different choices of the customers.
  • Text Messaging- The other method used by the company is text messages (com. 2018). The grocer keeps sending the consumers about new offers and launch of new products with the help of text messages. This tactic is made to ensure that the customers never miss out in any offer.

Media campaigning

Although Tesco`s presence in the market is very huge, the company ensures that it spends a huge amount in media campaigning. According to Wheelen et al. (2017), Tesco believes that Media is one of the most powerful tools and elements of the overall promotional strategy of the firm.

  • TV Commercials-Through the Television commercials, the grocery retail invests hugely on the media aspect of the promotional strategy. Through these commercials, they stress on healthy eating and organic products. The company believes that through Television commercials, the customers will get attracted to certain eye catching details in the advertisement which help in creating lasting impressions. However, certain percentage of the population who do no watch television may miss out on this aspect. Secondly, TV Commercials are a very expensive method of advertisement.
  • Interactive Websites- In this modern age, internet is a very important aspect of everyone`s life therefore, the company has made its primary website quite comprehensive and also launched various other websites like Tesco Diet, Tesco apps and Talking Tesco in order to get more popular among the customers. These links are attached to that of the main website and it is very prominent. Not all people are accustomed to the working technique of the websites and therefore, not all customers can be reached out through this method.

Sales promotion

Tesco understands that the key criteria of dealing with competition is moving forward with designing techniques and offering that value to the customers which are quite different from that of its competitors. Hence, it designs various innovative promotional strategies through which the customers get a better experience even during rough phases’ of the economy (Khodakarami and Chan 2014). Rewarding the customers is one of the key methods of Tesco to attract a large crowd.

  • Club Card Points- As stated previously, apart from being an integral CRM strategy, the Club Card Points serve as a strategy which makes shopping a fun experience and they can get discounts on various other experiences as well. The customers can collect these extra points while shopping online or through the different stores. They can encash these points later on. However, giving these offers often tend to become a burden on the company. However, they are quite effective.
  • Tesco Apps-The TESCO application and website helps the consumer to shop for groceries at the convenience of their homes. The grocery items shall then get delivered to the customers at their homes. Through this application the customers can also make a specialist customer list in order to shop smart. This app serves an innovative promotional technique for the company and helps in attraction of those customers who do not have time for shopping. Some customers tend to take advantage of the given method and keep on returning the items due to some complaints. Even the cost of this application is also very huge.

2.1 Range of CRM techniques

Public relations

Tesco believes that the company can make use of Public Relations to maintain the image and have a long lasting impression in the minds of the consumers. They believe that through the indirect method of promotion, they can create a positive image of the firm.

  • Talking Tesco- Through this application, the customers can share their experience with other consumers and a kind of interactive environment is created. The given method also helps in addressing the grievances of the customers. This method is quite transparent however, through the bad experience of the customers; the loyal customers can derive a tainted image of the store.
  • Tesco Diets-Tesco uses this method as an extra activity to help out the customers with their fitness plans. This also helps the firm to advertise their fitness products in the eyes of the customers. According to Trainor et al. (2014), this initiative has been very successful in attracting the different customers who subscribe to the website in return for diet plans, tips and recipes. This also helps in creation of a positive image which goes a long way in securing the relationship of Tesco with its employees.

4.4 Suggestions of other promotional mix strategies which could be used Tesco

As per the analysis done on the company`s promotional strategy, it could be witnessed that the company is already using both Above the line strategy where mass media tools are used and below the lines where the customized strategies are used. Therefore, TESCO has been extremely successful in applying the concept of Above the Line and Below the Line concept of advertising.

A suggestion in the present scenario can be made with regard to the use of the AIDA strategy of marketing.

The acronym AIDA represents Attention, Interest, Desire and Action. This has become one of the most rising concepts in promotion. According to Goetsch and Davis (2014), any promotional activity or advertising technique must include all the four AIDA steps, else it will fail. Simply stated the advertisement of Tesco should be able to grasp the attention of the consumers and develop an interest in them. This interest can then give rise to a desire which shall instigate them to make a purchase. The concept can largely be use in social media advertising and commercials. The advertisements should be made in a way in which the company is able to grasp the attention of the customers easily and initiate in them an interest which will eventually lead to a positive action for the company.

Conclusion:

Therefore, from the given analysis and study it can be concluded that the supermarket chain Tesco has been constantly adapting to the changing needs of the business environment and developing new techniques and ideas so as to gain and maintain a larger share of the market. The grocery retail realized the importance of Customer Relationships in order to have a good stand in the market and as witnessed from the year 1995, it has been engaging itself in massive CRM techniques so as to make shopping a simple and fun experience for its employees.  Through its application of Above the Line and Blow the Line strategy for its promotional mix, the company has been quite successful in maintaining the right balance and reach to the larger crowd as well as the individual customer easily.

2.2 Range of CRM techniques for Tesco and its effectiveness

Marketing revolves around the customers. The primary motive of any marketing activity is to see to it that the company is getting the right kind of products to the right customers. For this purpose, the company`s often engage in customer relationship management technique to retent its customers and apply various promotional techniques. The given report aims advice the Marketing Director of Tesco by analyzing the marketing strategy of the brand. The report will be throwing light on the marketing strategy of the company followed by their Customer Relationship Management Techniques. Concepts like market orientation and customer centric will be covered adequately (Kotler 2015). Certain recommendations may be provided so as to improve them. The second part of the report will be based on the promotional mix of the organization along with concepts like AIDA and above the line and below the line. The report will be providing certain suggestions for improvement.

References:

Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction. Pearson Education.

Baker, M.J. and Saren, M. eds., 2016. Marketing theory: a student text. Sage.

Bresler, M. and Lubbe, I., 2014. Marketing management.

Burns, A.C., Bush, R.F. and Sinha, N., 2014. Marketing research (Vol. 7). Boston, MA, USA: Pearson.

Chernev, A., 2018. Strategic marketing management. Cerebellum Press.

Choudhury, M.M. and Harrigan, P., 2014. CRM to social CRM: the integration of new technologies into customer relationship management. Journal of Strategic Marketing, 22(2), pp.149-176.

Coombes, P.H. and Nicholson, J.D., 2013. Business models and their relationship with marketing: A systematic literature review. Industrial Marketing Management, 42(5), pp.656-664.

Foxall, G., 2014. Strategic Marketing Management (RLE Marketing) (Vol. 3). Routledge.

Goetsch, D.L. and Davis, S.B., 2014. Quality management for organizational excellence. Upper Saddle River, NJ: pearson.

Gronroos, C., 2016. Service Management and Marketing: Managing the Service Profit Logic. John Wiley & Sons.

Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education Limited.

Keller, K.L. and Kotler, P., 2016. Marketing management. Pearson.

Khodakarami, F. and Chan, Y.E., 2014. Exploring the role of customer relationship management (CRM) systems in customer knowledge creation. Information & Management, 51(1), pp.27-42.

Kotler, P., 2015. Framework for marketing management. Pearson Education India.

Meffert, H., 2013. Marketing-Management: Analyse—Strategie—Implementierung. Springer-Verlag.

Pasquier, M. and Villeneuve, J.P., 2017. Marketing management and communications in the public sector. Routledge.

Ramaswamy, S.K. and Mosher, G.A., 2013. Marketing Management.

Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.

Sheth, J.N. and Sisodia, R.S., 2015. Does marketing need reform?: Fresh perspectives on the future. Routledge.

Stead, J.G. and Stead, W.E., 2013. Sustainable strategic management. ME Sharpe.

Tesco.com. ,2018. Tesco - Online Groceries, Homeware, Electricals & Clothing. [online] Available at: https://www.tesco.com/ [Accessed 11 Mar. 2018].

Trainor, K.J., Andzulis, J.M., Rapp, A. and Agnihotri, R., 2014. Social media technology usage and customer relationship performance: A capabilities-based examination of social CRM. Journal of Business Research, 67(6), pp.1201-1208.

Weinstein, A. and Pohlman, R.A., 2015. Customer value: a new paradigm for marketing management. In Proceedings of the 1997 Academy of Marketing Science (AMS) Annual Conference (pp. 132-133). Springer, Cham.

Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management and business policy. pearson.

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