Customer Relationship Marketing And Retention: A Study On Morrison Supermarkets Essay.

Relationship Marketing and Consumer Retention

Customer relationship marketing refers that an organization needs to follow some practices, strategies and technologies, which are used to control and measure the consumer’s interactions. Organizational information ismanaged across the consumer lifecycle. In the point of Khodakaramiand Chan (2014), customer relationship management is helpful to improve the business relationship of an organization with the consumers.  In addition, customer retention and organizational sales growth would be increased with the help of customer relationship management.

This study has highlighted the necessity of relationship marketing and customer retention. With the help of these concepts,the organization would be able to measure how the relationship marketing strategy helps a company to retain the consumers. On the other hand, with the help of IDIC model, this study would develop a framework for the customer relationship management. On the other hand, this study is also helpful to identify how Morrison is retaining the consumers compared to it’s competitors.

WmMorrison supermarkets plc.trading as Morrison and it is the fourth largest chain of supermarketsSainsburry and Tesco in United Kingdom. William Morrison established this organization in the year of 1899. This organization has 515 supermarkets through England, Scotland and Wales. Morrison’s market share in 2015 was 11 percent; however, this rate was decreased by 0.3 per cent from the previous year. Customer relationship management approach is the procedure, which compilesinformation from the range of several communication channels. According to Hollensen (2015), it can be stated that customer relationship management start to evolve in the year of 1970. On the other hand, it can be mentioned that customer relationship management is the core strategic approach, which can increase the competitive advantage of an organization.

Relationship marketing is helpful to maintain a long-term relationship with the consumers. In this connection, it can be mentioned that with the help of this special type of marketing, the consumers of an organisation would like to avail the products and this would be benefitted to satisfy the consumers. For market a product, the organisations would take the help of advertisement, social networking sites. Therefore, it can be stated that there is a positive relationship between the consumer retention and the relationship marketing.

In the opinion of Shapiroet al. (2014), relationship marketing is the featureof customer relationship management, which is helpful to retain the consumers and maintain a long-term relationship with the consumers. In this point, an organisation can follow the relationship marketing strategy in order to focus on the customer loyalty. In addition, it can be stated that the goal of relationship marketing is to maintain a strong and customer association to the brand.

Evaluation of the Consumer Relationship Management Process

According to Yadavand Singh (2014), it can be mentioned that the organisation mainly focused to meetthe requirements of the consumers. Therefore, the satisfaction level of the consumers would be improved. In this connection, it can be mentioned that the organisationsare always trying to improve their service what they offer shoppers and work hard. This would improve the customer loyalty of the consumers. With the help of IDIC model, each of the organisations would be able to identify the necessity of the consumers. With this strategy, the organization can recognize first visit and the subsequent visits of the consumers. In this context, the common techniquesare used for cookies to log on to a site. Sometimes, additional consumer information is obtained using a procedureand it is known as ‘drip irrigation’. Moreover, Padilla-Meléndezand Garrido-Moreno (2014) opined that information would become out of date through the passage of time and hence, it is necessary to verify and update the consumer information.

In order to retain the consumers, IDIC model focused on the concept of consumer differentiation. This implies to develop a profile in order to help to the consumers. After that,the unique techniques are developed for each of the consumers. In this connection, it can be added that organizational operations are different for top consumers, non-profitable consumers, and small consumers and also for the large consumers. Thirdly, the organisation would aimtothe concept of consumer interactionand then the organization requiresto listen the needs of the major consumers. Interactions required to be the consumer preferred channel. In addition, Rahimi and Kozak (2017) cited the consumer reward program could also increase that consumer’s satisfaction level. In this connection, it can be mentioned that the consumers, who are loyal to the organization, would be awarded. Moreover, in order to maintain a positive consumer retention strategy, the organisation would start the loyalty schemes; consumer clubs as well as sales promotion for maintain a long-term relationship with the consumers (Di Benedetto and Kim 2016).

Lastly, as per the IDIC model, relationship marketing has focused to increase the consumer communication. If the consumers face any problems, the organisationtried to communicate with the customers through emails as per the segmentation of acquisition stage. This stage also connects with the future market research in order to identify the whether the business operations of the organization would be able to necessity of the consumers. Furthermore, consumer development can be achieved by selling higher value of products and services by making different size of goods and products (Bhaduriand Fogarty 2016).

Figure 1: Customer retention strategy

On the other hand, as per the statement of Stein, Smith and Lancioni (2013), it can be mentioned that IDIC model aims to the customer acquisition strategy in order to acquire new consumers.Therefore, the organisation would be able to identify the targeted consumers and can also increase the customer loyalty. Consumer retention helps to give values by providing loyalty awards to maintain long-term relationship. In this essence, the organisation also focused to the continuous development to provide greater and superior services to the customers. These are the major strategic goals of customer relationship management.

With the help of QCI model, the importance of customer relationship management can be described. As per this model, the employees of the organisations take the help of several technologies and also follow different processes in order to retain the consumers. In addition, as per this model, the association procedures are connected with the external environment. Therefore, it can be stated that external environment directly influence the planning procedure of the company.On the other hand, customer experience would in turn reflect three definite activities such as consumer proposition, measurement and the consumer management activities. Infrastructure of this model deals with the consumer information, technology and also with the process management.

	Profitability (in Million)	%	Change in %
Aldi	1322	4.8%	22.6%
Sainsbury	4622	16.9%	-0.7%
Morrison	3084	11.3%	-1.6%

From the above table, it can be depicted that Aldi is at better position compared to the others. Therefore, the customer relationship management of this company is at the optimum level that the others. On the other hand, it can also be observed that Morrison is also at good position; therefore, the consumers will be willing to maintain a long-term relationship with the company. In this context, it can be mentioned that with the help of the IDIC model, the organisation can improve their performance. Therefore, Aldi would focus to the consumer segmentation by using the IDIC model. In this point, Aldi provides greater performance compared to the others.

It can be mentioned that using IDIC model, most of the consumers of Morrison’s are belonging from United States and the organisation mainly set the prices of the products affordable, so that everyone can purchase the products. With the help of an online survey, the organisation would be able to measure the satisfaction level of the consumers. This is their marketing strategy to identify their consumers.

Peppers and Rogers developed IDIC model. With the help of this model, an organisation can develop and retain the long term and the one to one associations with the customers.

3.1 Identify:

In this context, it can be mentioned that initially Morrison requires to identify who is the actual consumer and also needs to know deeply about them. This would make a better understanding between the consumers and the organisation and the profitability statement of the organisation would be improved. Through market research, Morrison has identified it’s consumers. Moreover, in order to identify their organisational performance, Morrison has send a feedback form to the consumers and those who provided good review about the services of the organisation; they are identified as the consumers of the organisation. In addition, Morrison focused to provide good quality of products compared to the competitors; this would increase the consumers’ willingness to purchase products from the organisation. The market share Morrison was 11%, whereas the market share of the Sainsbury and Aldi was 16.9% and 4.8% respectively. From this review, it can be inferred that the consumers of UK are mostly willing to purchase products from Sainsbury and from Morrison as these the market share of these two organisations are higher compared to Aldi.

3.2 Differentiate

It is necessary to differentiate the consumers of Morrison based on the value and also on the need. With the help of the scope model, Morrison has the unique strength in brand loyalty as well as the capabilities and it would add the values to the consumers. This is also helpful to the delivery of the competitive advantage. In this point, it can be inferred that Morrison has the comparative advantage than the other two rivals. Moreover, it can be added that Morrison has the opportunity to increase the sales and the profitability of the organisation with the help of leveraging the core competencies.

3.3 Interaction

This organisation used to communicate with the consumers through the social networking platform. The management of the organisation send mails to the consumers in order to get the feedback from the consumers. On the other hand, Sainsbury and Aldicommunicate with the consumers by organising a face to face interaction session in order to identify consumers’ review. In this connection, it can be stated that this is difficult to arrange the interaction session, as the consumers do not get enough time to present in the meeting. Morrison can also organise a face to face interaction session with the consumers once in a six months, this will be helpful to identify the loyal consumers of the organisation. If the consumers have identified any shortcomings, then Morrison can try to improve their service.

3.4 Customize

Two main competitors of Morrison are Sainsburry and Aldi. In the opinion of Kumarand Srivastava (2016), Morrison is at best position compared to the other two in case of customer retention. Morrison seeks to promote ‘fresh approach’ and also commitment with the sustainability. Therefore, consumers become aware about the freshness of the products and also concern about the environment. Morrison holds greater control for it’s supply chain, which is known as the ‘field to fork’ approach. Hence, Morrisongetscontrol over the products quality and this would in turn satisfy the consumers. Therefore, consumer loyalty would be maintained. Khodakaramiand Chan (2014) mentioned this would create a competitive advantage. Fresh produce is delivered to the own temperature controlled warehouse and then sent it to the local markets and also to the global markets. On the other hand, the two competitors customise on the business flow, technology and the strategic objectives of Aldi and Sainsburry. They also focused to the production of varieties of products as the consumers are seeking differentiated products to increase their sales.

Morrisons recruited more specialist butchers, bakers and also fishmongers compared to the other supermarkets of UK. Their efficiency level of working would increase the performance of the organisation. Thus, the consumers get special treatment from the trained specialist, which would increase the satisfaction level of the consumers (Morrisons-corporate.com. 2017). On the other hand, the overall productivity of the organisation would be increased. On the other hand, Morrisons offers career opportunity in the areas of manufacturing, IT, trading, and marketing and also in finance. Therefore, the employees get opportunities to be selected in the wide range of organisational field. Moreover, Morrisons’ consumers also satisfied with the personal service, reliability, efficiency, freshness and quality. Hollensen (2015) opined that quality customer service increase the valuation to improve the consumer’s experiences.

High quality customer service is the major principle with which a business would be differentiated from the others. According to Yadavand Singh (2014), Morrisons’ consumer strategy is simple and it provides the optimum consumer strategy by the team of best trained and motivated colleagues within the company.  By the development of higher levels consumer satisfaction, Morrisons create a significant competitive advantage compared to it’s competitors.

The peppers and Roger’s group is helpful to develop the core philosophy of Morrisons. As per this theory, Morrisons aimed to the construction of customer centricity. This would be helpful to maximise the valuation of consumer relationship. In addition, Peppers and Rogers model also follows the IDIC framework, which is helpful to learn the consumers’ requirement and thus, the organisation can achieve the consumer experience excellence (Padilla-Meléndezand Garrido-Moreno 2014).

4. Conclusion and Recommendations

This study is concerned about the customer relationship marketing of Morrison. In this context, this study has highlighted the customer retention strategy of Morrison. On the other hand, it can be observed that two major competitors of Morrison are Aldi and Sainsburry. Morrison has the greater customer satisfaction strategy, which is the competitive advantage in the UK supermarkets compared to the other organisations.

On the contrary, it can be mentioned that in the competitive markets, the competitors of Morrison provides greater offers and discounts to the consumers, which enhance the willingness to purchase products sometimes from the other organisations. Therefore, it can be recommended that in order to satisfy more to the consumers, Morrison requires to provide offers and discounts to the customers. This will also maintain a long-term relationship with the organisation. This would also increase cash flow of Morrison. The profitability statement of the organisation will be improved.

References 

Bhaduri, S.N. and Fogarty, D., 2016. Mitigating Sample Selection Bias Through Customer Relationship Management. In Advanced Business Analytics (pp. 71-83).Springer Singapore.

Di Benedetto, C.A. and Kim, K.H., 2016. Customer equity and value management of global brands: Bridging theory and practice from financial and marketing perspectives: Introduction to a Journal of Business Research Special Section. Journal of Business Research, 69(9), pp.3721-3724.

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

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.

Kumar, S. and Srivastava, M., 2016. A Critical Review On Perception & Benefits Of Customer Relationship Management (CRM) System In Indian Private Hospitals. Adhyayan: A Journal of Management Sciences, 1(2).

Morrisons-corporate.com. (2017). About Us - Morrisons. Available at: https://www.morrisons-corporate.com/About-us/ [Accessed on 5 Mar. 2017].

Padilla-Meléndez, A. and Garrido-Moreno, A., 2014. Customer relationship management in hotels: Examining critical success factors. Current Issues in Tourism, 17(5), pp.387-396.

Rahimi, R. and Kozak, M., 2017. Impact of Customer Relationship Management on Customer Satisfaction: The Case of a Budget Hotel Chain. Journal of Travel & Tourism Marketing, 34(1), pp.40-51.

Shapiro, I.M., Dupree, T.E. and Keys, K.D., Ifbyphone, Inc., 2014. Systems, method, and computer program product for cross-channel customer relationship management support with dynamically inserted voice call numbers. U.S. Patent Application 14/228,789.

Stein, A.D., Smith, M.F. and Lancioni, R.A., 2013. The development and diffusion of customer relationship management (CRM) intelligence in business-to-business environments. Industrial Marketing Management, 42(6), pp.855-861.

Yadav, B.K. and Singh, A., 2014. Analyzing the Influence of Customer Relationship Management on Firm Performance: A Study of Hotel Industry in India. International Journal of Customer Relationship Marketing and Management (IJCRMM), 5(3), pp.69-97.

Customer value chain analysis is a method where each of the firm recognizes the primary and then supports the organizational operation, which adds the values of the final products. After that with the help of this process, the organization would be able to analyze the activities in order to decrease the costs or also increase the differentiation. As per the statement of Gereffi and Fernandez-Stark (2016), it can be mentioned that value chain analysis is helpful to reflect the internal functions of the organizations, which are useful to transfer the input factors into the output. With the help of the customer value chain analysis, Morrison would be able to identify the organizational goals. Customer value chain analysis represents all of the internal activities, which are followed by the organizations for greater production of goods and services. This study would highlight the customer value chain analysis of Morrison and the value proposition of that organization.

As opined by Olson (2014), the value chain analysis is helpful to the organizations to identify the sources of the competitive advantages. Customer value chain analysis increases the opportunities to secure the benefits of the cost. On the other hand, customer value chain analysis also increases the opportunities to highlight the product or service differentiation. This also consist the value creating operations of all of the industry determinants. Customer value chain analysis is benefitted to identify the consumers’ requirements, achieve the consumers’ expectations, and then deliver the valuation of the consumers. The customer value chain strategy is differentiated into five key steps such as consumer portfolio analysis, consumer intimacy, network development, value proposition development and manages the consumer life cycle.

Customer value chain analysis is a process to recognize the potential sources of the economic benefit by suggesting how the organisation’s internal core competencies would be incorporated along with the external competitive advantage to highlight the optimal resource allocation. According to Darmawan, Putra and Wiguna (2014), customer value chain highlights the operations of the organization into the sequential chain. Therefore, customer value chain analysis refers the organizational goal of competitive strategy of Morrison, which is helpful to create the consumer valuation in case of the excess of costs of delivery. In this context, it can be mentioned that customer value chain activities of Morrisons can be differentiated into two activities such as primary activities and support activities. With the help of five primary stages of customer value chain, which is outlined by Buttle, the operations of primary activities and support activities would be understood.
 

 Figure 1: Customer value chain strategy of Morrison

There are five stages in the CVC model, which are discussed in the following:

The first stage highlights to the grouping consumers in order to identify which consumers are most profitable. The outcomes of the organisation are the target consumer base. In this connection, it can be mentioned that the organisation rate and also segment their subordinates into groups, which are highly desirable to do the business. This is known as consumer portfolio analysis.

The second stage focus to the consumer intimacy. With the help of this segmentation, the organisation wants to pursue,they require to know that segmentation is very well compared to the competitors.

Thirdly, the CVC model has highlighted the development along with the network’s compliance and proposition. This makes the value jointly to the consumer and the organisation. With the help of the network, the organisation mainly focuses to the greater value, which is highly effective and highly efficient to mitigate the consumer’s problems. Therefore, the organisation would be able to control the consumer relationship.

The fourth stage is concerned about the customer value chain model aims to the value proposition definition. With the help of this stage, the consumers would like to choose serve and the organisation is at the position, which is helpful to create a definite value proposition.

Lastly, in the fifth stage management of relationship with the customers has been stated. Organisation requires maintainingrelationship with the customers by introducing innovative techniques. The long-term relationship with the consumers can be maintained by attracting their taste and preferences towards the organisation. The organisation can start customer loyalty programme. The loyal consumers would receive the awards from the management of the organisation.

The consumer portfolio analysis highlights that Morrison has followed democratic leadership style. Therefore, it can be mentioned that the management of the organisation considered the employees in the decision making process and this would increase the satisfaction level of the employees and they would like to improve their individual performance. The productivity would be increased, which would in turn influence the consumers to purchase products from this organisation. In addition, the data and information technology provides leadership in transportation innovation and progress with the help of research and the information exchange. Moreover, Morrison loyalty card is helpful to match the discounters on price within scheme analysts. Therefore, the purchasing behaviour would be changed.

This is the type of marketing strategy, with which the service supplier of Morrison would be closer to their consumers. Therefore, customer intimacy helps to Morrison by giving the problem solving capabilities and also with the greater adaption of products as per the needs of the consumers along with the higher consumer loyalty levels.

Network development strategy helps to develop the customer relationship management of Morrison. This refers that Morrison would be able to manage and analyse the consumer interactions. This would assist into the consumer retention and also increase the growth of the sales. On the other hand, it can be mentioned that with the help of consumer relationship management, Morrison can improve their consumer retention strategy.

Buttle highlighted that value proposition is the promising valuation, which would be delivered, acknowledged and communicated. In this connection, it can be mentioned that it is the consumers’ belief and how the consumers’ valuation would be delivered. In addition, it can be mentioned that value proposition is depending on the review and the analysis of the costs, benefits and the organisational valuation. The value proposition satisfied the consumers, which is the source of sustainable value creation. The value proposition of Morrison is highly appreciable compared to Aldi and Sainsbury.

Buttle also highlights that relationship management is an organisational strategy, which is the level of management and it would be maintained among the organisation and the consumers. Morrison used this strategy for involving the customers which would be used to increase loyalty towards the business.

Based on the above discussion, it can be mentioned that Morrison is suffering from the problem of “move to the middle” problem. Therefore, the Morrison would not be able to tackle the power of the opponents in terms of the quality of the products. Morrison is suffering from the problem of higher pricing policy. In this point, it can be recommended that to retain the consumers or increase their satisfaction level, the organisation requires to charge comparatively lower prices, so that the consumers are willing to purchase the products.

On the other hand, in order to improve the organisational performance, Morrison follows 7 P strategies, where the 7 p’s are people, processes, physical promotion, place, price, product, promotion and place.

Figure 2: 7 P marketing strategy

Morrison is highly dependent on the people, who are engaged in sales to the managing director. In this context, it can be stated that recruitment of the right subordinates are benefitted to improve the organisational performance. On the other hand, as per the process strategy, Morrison can deliver the manufacturing goods to the consumers within the proposed time. Therefore, the satisfaction level of the customers would be improved with the service of Morrison. As opined by Ennew, Binks and Chiplin (2015), it can be stated that physical evidence is concerned about the packaging of the products and also on the sales. This is the important tools; which is followed by Morrison in order to improve their organisational performance.

In addition, Morrison mainly aimed to the quality of the products. It is known that long term relationship with the consumers can be maintained if Morrison enhances their focus on the branding. Therefore, it can be mentioned that brand valuation can increase the consumer satisfaction level. On the other hand, in order to increase the marketing communications, Morrison requires to focus on the promotional strategy. Fullerton (2014) added that Morrison also needs to focus on the sales promotion. In this purpose, Morrison uses several communication tools such as advertisement, sales promotion, social media etc. With the help of these promotional strategies, organisation’s message would be reached to the appropriate consumers.

According to Wünderlich and Von Wangenheim (2015), it can be mentioned that price of the products is the major element, which is required to set appropriately. So that the consumers would be satisfied and do not feel reluctant to purchase the products. In this context, it can be stated that most of the times, the consumers seek to purchase good quality products in turn of affordable price. Moreover, it can be added that the consumers are willing to avail offer and discounts for purchasing the goods. Lastly, 7 P strategiesare depending on the place of the organisation. As opined by Eid (2015), the manufacturing goods require to be available from where the targeted customers gets it easily. In this purpose, Morrison sale their products through online, so that the consumers can purchase the products easily and also they do not need to visit to the stores physically. Therefore, placement is the one of the important part of marketing mix. There are different distribution strategies, which includes intensive distribution, selective distribution, franchising and exclusive distribution (Holmes 2016).

Three main types of sacrifice have been recognized and these are money, search and the psychic costs. Organizations offer improved valuations to the consumers for creating as well as delivering greater solutions to the consumers’ problems.

The sources of the consumer valuation can be reflected by the marketing mix strategy. The marketing mix strategies are such as product, price, place and promotion. These are known as the 4Ps strategy, which are supplemented by three additional Ps and these are process, people and the physical evidence. In the words of Siu, Zhang, and Yau (2013), it can be mentioned that in case of business-to-business environment, value propositions have been customized. It is known that customization is now assuming as powerful forces. In order to improve the organizational performance, product innovation, product branding and the product service would create additional valuation.

The loyalty card is a way to generate additional business and then work on a simple marketing tool to expand the business. As per the statement of Gereffi and Fernandez-Stark (2016), customer loyalty cards are helpful to get new consumers, therefore, it can be stated that this is the trusted process of consumer retention. In addition, customer loyalty card motivates the consumers to take advantages of special offers and discounts. In this context, it can be mentioned that the more the consumers shop, more would be the returns. Loyalty card scheme is benefitted to increase the product awareness. Consumer loyalty would also increase. They would be happier with the service of the organization and the satisfaction level would also increase. On the other hand, Darmawan, Putra and Wiguna (2014) opined that customer loyalty card scheme can boost up the growth structure of the organization.

3. Conclusion and Recommendations 

WM Morrison holds a strong position within the UK retail industry. Its business model and the objectives of the organization are clear and transparent. Morrison has a greater financial position in the market. In order to accomplish the study, the benefits and the uses of consumer value chain analysis would be discussed. On the other hand, the advantages of customer loyalty card would be helpful for the consumer retention. This would also increase the consumer’s satisfaction level.

In order to improve the organizational performance, it can be recommended that Morrison would follow the positioning strategy. In this context, the segmented consumers of the organizations would be positioned by incorporating the advertisement strategies. The most popular brand is assumed as the key determinant of positioning marketing. It is useful for the development of effective communication plan.

References 

Christopher, M., 2016. Logistics & supply chain management. Pearson UK.

Darmawan, M.A., Putra, M.P.I.F. and Wiguna, B., 2014. Value chain analysis for green productivity improvement in the natural rubber supply chain: a case study. Journal of Cleaner Production, 85, pp.201-211.

Eid, R., 2015. Integrating Muslim customer perceived value, satisfaction, loyalty and retention in the tourism industry: An empirical study. International Journal of Tourism Research, 17(3), pp.249-260.

Ennew, C.T., Binks, M.R. and Chiplin, B., 2015. Customer satisfaction and customer retention: An examination of small businesses and their banks in the UK. In Proceedings of the 1994 Academy of Marketing Science (AMS) Annual Conference (pp. 188-192). Springer International Publishing.

Fullerton, G., 2014. The moderating effect of normative commitment on the service quality-customer retention relationship. European Journal of Marketing, 48(3/4), pp.657-673.

Gereffi, G. and Fernandez-Stark, K., 2016. Global value chain analysis: a primer.

Hollins, P., Riestra, R., Hernandez, M., Becker, J. and Santos, P., 2016. D7. 2-Summary report of Value Chain analysis.

Holmes, D., 2016. The development and evaluation of a predictive model for customer retention to enhance customer relationship marketing (Confidential).

Olson, E. L. (2014). Green innovation value chain analysis of PV solar power. Journal of Cleaner Production, 64, 73-80.

Scherer, A., Wünderlich, N. and Von Wangenheim, F., 2015. The Value of Self-Service: Long-Term Effects of Technology-Based Self-Service Usage on Customer Retention. Mis Quarterly, 39(1), pp.177-200.

Siu, N.Y.M., Zhang, T.J.F. and Yau, C.Y.J., 2013. The roles of justice and customer satisfaction in customer retention: A lesson from service recovery. Journal of business ethics, 114(4), pp.675-686.