CRM Project Report

A Comparative Case Study Investigating the Adoption of Customer

Relationship Management (CRM) The Case of Tesco and Sainsbury’s

Submitted TO: Submitted By:

Prof. sanchita ghosh PARAS GUPTA

PGDM20140004

IILM CMS

ACKNOWLEDGEMENT

In order to make my assignment I acknowledge a special thanks

to all those people without whose supports it would not be possible

for me to complete my assignment. First of all I really thankful to IILM CMS because of them I could achieve the target. I express

my sincere thanks to my assignment guide who had guide

throughout my project.

Last but not the least I am thankful to my parents and friends who have

provided me with their constant support throughout this assignment.

This study concentrates on Tesco and Sainsbury‟s - two major retailers in the United

Kingdom as cases. The contents are rigorously developed under the title „A

Comparative Case Study Investigating the Adoption of CRM – The Case of Tesco and

Sainsbury‟s‟. From cross comparison viewpoint, the set objectives are: first, to explore

the key influential aspects of Customer Relationship Management (CRM); second, to

identify the current trends of CRM adoption; third, to identify the CRM practices

employed by Tesco and Sainsbury‟s; and finally, to critically evaluate and compare the

impact of the CRM policies adopted by the two retailers as cases, regarding the

consumer making process. This empirical study used the mixed method that combined

both qualitative and quantitative research approach. The results are unique and have

indicated the importance of adopting effective CRM policies to ensure business growth

and profitability.

Consumer satisfaction is always a question mark in minds of sellers as it i s very difficult to find

that what exactly consumer want from the seller. For the very same reason t his research is

conducted that how customer satisfaction can be gained with the help of customer value and

relation base marketing. Customer satisfaction is one of the most important issues in marketing

field from beginning and its play a crucial role in firm profit maximization. Study collect data

from 150 policy holders of different insurance companies of Peshawar Pakistan on systematic

random sampling method. A structured questionnaire used to collect data from the respondents.

Study shows that value added services and conflict handling are the major reaso n for the

customer satisfaction. Managers can use this study and can implement these findings in their

business for their customer satisfaction and more money earnings.

Tesco was founded in 1919 and launched its first store in Edgware, London, UK in 1929. Today,

Tesco is the world's third-largest retailer (after Wal-mart and Carrefour) with 2012 figures as

follows: revenues £72.0 billion, of which £3.8 billion was trading profit. Revenues were 66%

UK, 15% Europe, 17% Asia & USA, and 2% Tesco Bank. The company employed 520,000 staff

in 14 countries and operated 6,351 stores. The UK Tesco Bank has 6.5 million customer

accounts, and generated £168 million in profits. Tesco Mobile, a telecom business, had 3.2

million customers.

Though still still essentially UK-based, Tesco has diversified geographically and into widely-

separated market sectors: retailing books, clothing, electronics, furniture, petrol and software,

financial services, telecom and Internet services, DVD rental, and music downloads.

Tesco's entry into the enormous but difficult US market with 'Fresh & Easy' convenience stores

is being watched with some skepticism. Unlike operations elsewhere, the US division posted a

£186 million loss in 2010-11. Tesco did indeed withdraw subsequently from the US market with

a loss of £1 billion, and took a further 804 million hit on the UK property market in 2012.

Business in 2013 is expected to focus more on the UK.

Tesco went to extraordinary lengths to understand its customers and add value to their lives.

1. Marketing was aimed at sensible, middle-class families, from its slogan 'Every little helps' to

its no-frills website.

2. A loyalty card ('Clubcard') was introduced in 1995, and data subsequently fed into Customer

Management Systems.

3. American preferences were studied by embedding staff with US families prior to launching

its USA operation in 2007.

The focus on customer relationship management has become increasingly core to all

organisations. Companies have increasingly recognised the significant costs related to the loss of

customers and are trying to better understand, measure, manage and improve customer retention.

CRM helps organisations examine how to measure and improve long-term customer lifetime

value.

CRM software systems combine sales, marketing and customer service functions, with benefits

including better understanding of buying habits, better identification of prospective customers,

and increased customer satisfaction.

Increasingly, they are integrated with e-commerce systems, allowing businesses to build a

detailed image of their customer or membership base. This leads to improvements in marketing,

sales processes, customer services, analysis and reporting.

A more recent development has seen businesses harnessing the power of social media. By

monitoring what customers and target markets are saying about their products or services on

their own or generic sites such as Twitter and Facebook, businesses can identify opportunities

and areas for improvement. It is essential for businesses to consider the global impact of

customer feedback.

Purpose – This article undertakes a case study-based analysis of the Tesco Clubcard loyalty

scheme that seeks to re-conceptualise the role of loyalty schemes by focusing on the role of

loyalty schemes in branding and brand webs.

Design/methodology/approach – The article takes a case study-based approach. Tesco Clubcard

has been chosen as the case under study, because it is a significant scheme, and because Tesco

have a reputation for innovation in relation both to the use of technology and to approaches to

delivering customer value. The analysis describes the features of Clubcard, with specific

reference to the network of relationships facilitated through the scheme and the actual or

potential value that Tesco and its partners, be they customers or other organisations, derive from

the scheme.

Findings – Tesco Clubcard builds relationships on additional dimensions, through: the option to

collect Clubcard points through transactions with other retailers; the option to use reward points

with a range of leisure and associated outlets, and, the e-loyalty element of the scheme accessible

through the internet. This multidimensional approach to relationships builds a visible relationship

web that is central to marketing communication and brand building associated with the Tesco

brand. Both brand perceptions and experiences are built as customers make choices regarding the

paths through which they will travel. The brand web operates at the three levels of experience,

community, and customer data and knowledge.

Originality/value – The research question, “Do loyalty schemes work?”, needs to be reframed to

encompass this extended model of the role of loyalty schemes, to surface questions associated

with the effect of loyalty schemes on brand perceptions and associated consumer behaviour.

In the business domain, most of the entities area unit a lot of or less client centered. Other

than profit, these business organizations depend upon customers because the common

feature supported the 2 massive scale retailers of the uk (e.g. Tesco and

Sainsbury‟s), this study was aimed to spot and compare the key aspects and impacts

of CRM policies adopted by these 2 explicit attention was provided on the loyalty

card schemes because the Clubcard and Nectar Card. The known key powerful client

segment for client relationship management is that the Loyalty card holders of each Tesco

and Sainsbury‟s and these shoppers don't ofttimes buy at alternative retailers. Primarily,

Peppers and Rogers (2004) argue that client relationship management has been

continually covering areas like building and maintain relationships with the core base of

customer, financial gain and sales.

Theoreticians or lecturers like Anderson and Kerr (2001),

Dyche (2001) and Armstrong, et. al., (2009), view that, it's the connection with

customers that may be known because the most powerful issue of CRM. Reviewing the

existing literatures, it's clear that the key powerful aspects of client relationship

management is making, maintaining and increasing relationship with the normal and

online primarily based client base. However, findings of this study reveal that the purchasers

remain loyal in each cases of Tesco and Sainsbury‟s, as these retailers stay responsive to

their customers‟ demands. As a solid base of CRM, each of those retailers have initiated

the Loyalty card schemes. The respondents were loyal as they need been benefitting

from the CRM policies utilized by these retailers. However, vital finding of the

study explores that the client loyalty can't be granted as static and non versatile.

Where, a substantial variety of the purchasers additionally visit alternative retailers

with AN intention to either cross check the costs or the provision of product and services. This

study suggests that the Loyalty card holders of each Tesco and Sainsbury‟s don't limit their

shopping solely among these 2 retailers. Loyalty can't be viewed as „blindness‟,

where, various alternatives became offered for purchasers.

The suggested policy of CRM is to stress on product and services development through adopting

diversified methods than solely remaining confined to keep up relationships with

customers. In terms of distinguishing this trends of CRM adoption, responsiveness

appears as an important reason behind effective CRM. Technological innovations area

unit having influences on the normal modes of CRM a minimum of for the previous couple

of decades.

Such influences have found their ways that through arguments of Kotorov (2003), Bose and

Sugumaran (2003) and Scullin, et. al., (2004). The core contents and also the centers of

attention of CRM have significantly altered with technological advancements and

retailers have compromised with these technologies bound innovations a lot of ofttimes

than ever before. the traditional CRM policies area unit currently incorporated with the electronic

and ancient means that of communication. this can be because; compared with little

stores, understanding the client looking patterns with massive retailers having

thousands of shoppers is solely troublesome. The study points out that, this can be one among the

reasons, that incites massive retailers like Tesco and Sainsbury‟s to adopt shifting options of

CRM.

Pepsico CRM Strategy

Strategies:

Strategies Realignment of their organization are into three new business units; PepsiCo America

Foods Includes all of their Latin American food and snack business. PepsiCo America Beverages

Includes all of our Latin American beverage business PepsiCo International Includes all PepsiCo

business in the United Kingdom, Europe, Asia, Middle East and Africa. Financial Objectives

Increase our investment in developing markets, make selective investments to continue growing

our global snacks business and accelerate our global R&D initiatives to help secure our future

innovation pipeline. Produce $1.2 billion in pre-tax savings over the next three years

(Productivity for Growth Initiative) Investing to drive additional growth in key developing

markets across the world in both Snacks and Beverages. Targeted marketplace investments to

further secure our competitive position in developed Snack markets.

Recommendations:

Recommendations Lay-off about 3300 positions Savings from Productivity for Growth Initiative

is going to go into North America Beverages Selected investments will be allocated into key

developing markets, and then Snacks in developed markets from marketplace investments and

then R&D. Introduce a wide-variety of Non-carbonated beverages

SAP announced on Wednesday that global brand leader PepsiCo has selected mySAP Business

Suite as the primary business platform for unifying its operations, standardizing business

processes and increasing efficiency across its divisions.

The US$27 billion convenience food and beverage company produces Frito-Lay snacks, Pepsi-

Cola beverages, Gatorade sports drinks, Tropicana juices and Quaker foods. SAP spokespeople

declined to comment the value of the deal in either dollars or seats. However, John Grozier,

SAP's vice-president of CRM product marketing, told CRM Buyer in an interview that PepsiCo

selected mySAP to kick off of a major business transformation for the company.

"Ultimately this is an enterprise-wide decision and the specific plans being worked out right

now," he said.

Current Customer Relationship Management Systems (CRM)

Businesses use customer relationship management systems to “capture and integrate customer

data from all over the organization, consolidate the data, analyze the data, and then distribute the

results to various systems and customer touch points across the enterprise”. These systems are

useful in improving sales, marketing, and customer service in a business. For Pepsi, CRM

systems play a crucial role in integrating the companies nearly 400,000 across the enterprise.

Through the use of CRM System, Pepsi has been able to deliver top-line growth and superior

customer service.

Pepsi‟s current CRM application has allowed for conversion of former disparate sales systems

into an integrated Internet application solution, a 360 degree view of the entire customer base,

simplification of the resolution process, accurate and timely deliveries, and reduction of product

inventory close time by one to two days. Through the use of real-time customer information, tel-

sel agents, or telemarketers, are able to have up-to-date information on any issues of needs of the

customer through their account, allowing for a clear picture of their customers and their

relationships with the company.

This also allows workers to uncover potential sales opportunities with their customers. The use

of real-time information is also used to improve customer interaction and satisfaction through the

use of help desks, customer service representatives, and allowing customers themselves access to

real-time information. Pepsi uses CRM applications to determine profitable customers, uncover

potential sales opportunities, improve customer interactions and relations, and provide the

enterprise with up-to-date customer information.

Proposed CRM System

Overall, Pepsi‟s CRM applications seemed to have greatly improved after trying a variety of

software systems. Currently, Pepsi is using MySAP enterprise applications, where they had

previously used other applications including Oracle‟s PeopleSoft. We see the current CRM

application as being very beneficial to the company. One proposition that would likely improve

the system is integration of a CRM application across all subsidiaries under the Pepsi name. This

will allow for further interaction between the company and customers to see where

improvements in interaction can be made, as well as to determine overall profitability of the

customers. We also feel the CRM application can be used to develop future marketing

campaigns designed to meet the needs and desires of customers in specific areas. Other than

these minor changes, we feel that the present CRM application is very promising for Pepsi.