Customer Relationship Management (CRM)

At first, I disagree with this statement. I think Customer Relationship Management (CRM) is universally appropriate or applicable to all businesses. Customer relationship management refers to a series of processes, focused on initiating two-way communication exchanges with customers to have a detailed knowledge of their specific needs and buying patterns. The major benefit of a CRM system is that it helps business organizations in determining the type of customer best suited for the growth of their business. CRM enables business organizations to formulate strategies focusing on customer-driven growth and in providing superior and friendly customer experience There are four advantages of CRM that businesses should implement this strategy.

* Customer Satisfaction

By implementing CRM strategies, the company can focus on improving customer satisfaction through examination of customer preferences, demographics and interests. This information may be collected through automated surveys or personal phone calls from customer service representatives. Customer research may be performed to discover the reasons why one product is more popular than another.

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Customers typically enjoy the attention they receive and the interest in their happiness and satisfaction with the product, and the data that is collected can help the company produce better products and services in the future, contributing to improved customer satisfaction. This also improves customer retention over the long run.

* Marketing

The data that is collected through customer research can provide ideas for marketing and advertising for a big business. With many products or services to market, a large company may have difficulty targeting different customers for each item.

However, customer research will provide information about what the customer likes about the product, what they are looking for in future products, and what purpose they would like the product to serve. All of this information provides great content for print or commercial advertisements and packaging designs for each product.

* Lowered Costs

By automating customer service with CRM software, the company can easily gain customer research through online or telephone surveys. The software automatically formats and calculates the data, making it faster and easier to collect this information. Fewer customer service representatives will be needed for collecting this information and less time will be spent preparing reports on customer research. Another advantage is word-of-mouth advertising from satisfied customers; as CRM strategies make customers happier, they become more likely to bring in new customers through word-of-mouth, which lowers the cost of finding a new customer.

* Brand Image

As customer satisfaction and retention improves, the corporation's brand image may begin to improve as well. Customers will begin to associate the brand with good customer service, quality products and a personable approach. The CRM strategy's focus on the customer will let each buyer know that their input is valued by the company. This can attract more customers and continue to create loyal customers to the brand. There is an example about effective implement of CRM. ICICI Bank has to manage more than 13 million customers. The bank has over 550 branches, a network of 2025 ATMs, multiple call centres, Internet banking and mobile banking. Its customers often use multiple channels, and they are increasingly turning to electronic banking options. Business from the Internet. ATMs and other electronic channels now comprise more than 50 per cent of all transactions. In the process of making its business grow to this level, ICICI Bank has distinguished itself from other banks through its relationship with customers.

The Teradata solution focuses on a Customer Relationship Management (CRM) platform. Information from various legacy and transaction systems is fed into a single enterprise called wide data warehouse. This allows the bank to generate a single view of its customers. The warehouse has the capability to integrate data from multiple sources comprising Oracle and flat files. The Behaviour Explorer enables profiling of customers and querying on various parameters.

These enable the bank staff create suitable campaigns for targeting individual customers on the basis of their requirements. To sum up, CRM is one of the best ways of determining the marketing strategies and other services offered to the customer. A well planned CRM can help organizations predict the current trend in the market and provide better services for customers befitting the trend, in turn increasing the business returns. The three major aspects of CRM are an operational system, a collaborative CRM and an analytical CRM. The customer relationship management concepts adopted by each company differ with their organizational objectives.

There are 3 challenges of implementing CRM.

* Costs

One of the biggest challenges facing companies trying to implement CRM is the cost associated with purchasing, installing and training employees to use new software, according to CRMInfoline.com. CRM often doesn't deliver the return of investment that companies hope for, though this is typically the cause of a poorly implemented system or poorly trained staff. While a properly implemented system should, eventually, show a good return on investment, CRMInfoline.com claims these results could take years to see in full effect as the new system takes root and customer awareness and participation grow.

* Transition

In order for a business to use a CRM solution properly, nearly the entire business will have to change. Most companies operate on an "us first, customers second" mentality, whereas CRM-centric businesses focus on placing customers and their satisfaction before the company. Furthermore, CRM systems are typically very complex and span multiple departments, meaning most employees will have to go through some sort of training that will inhibit them, at least somewhat, from performing their normal work duties.

* In-House Versus Supported System

Supported systems are CRM solutions that are taken care of or outsourced to another company. While in-house CRM software can be more effective, it's much more difficult to implement. Companies without any current CRM implementation should consider supported systems more than companies with at least some current level of CRM, according to TMCNet.com. Supported systems typically cost less to implement because they're not as in-depth or effective as in-house solutions. Jollibee is a phenomenal success story, having grown from two ice cream parlours in 1975 to over 1,800 restaurants worldwide today, including the strategic acquisitions of high profile brands like Greenwich Pizza, Deli France, Red Ribbon and Chow King. The company now operates 300 international outlets in markets in the United States, across Asia and throughout the Middle East. The big business like Jollibee must implement complete and effective CRM strategy.

* Form a cross-organizational team. A cross-organizational, or cross-functional team, is made up of leaders from each core department in Jollibee. Representatives usually include at least one member from sales, service, marketing, support, management, IT, finance, and any other functional area in Jollibee. * Jollibee should decide what project goals to begin with (customer acquisition, sales growth, service improvement, or something else). Once goals are laid out, phases for installation of CRM can begin. This includes technology and software implementation led by IT, communication of new roles and responsibilities in each department, and implementation of training and rewards programs.

* Provide training. Employees in many functional areas, including, service and support, are likely going to be using new technology devices or software solutions for customer accounts, data collection, customer service, data analysis and other CRM functions. This often requires training on philosophy behind the new system and CRM role as well as technical training on the technology applications. * Measure results. CRM fails without constant measurement.

By definition, CRM programs are ongoing and design to improve over time. Feedback and data collected during CRM projects and phases should be analysed, evaluated, and reacted to by the cross-organizational leadership team. Decisions on how to improve the customer experience, behaviours of employees, and any other important components of CRM help guide the next project phases or phases. With CRM systems, Jollibee can streamline their business processes effectively and in accordance with customer needs. Customer Relationship Management software is employed by Jollibee to manage and organize their customer database and contacts. Proper customer relationship management solutions are necessary for any business firm to empower their staff, to expand their business and to provide quality customer care services.

Task 2
There are 5 possible negative impacts caused by heavy-use of sales promotions.

1. Increased price sensitivity

Consumers wait for the promotion deals to be announced and then purchase the product. This is true even for brands where brand loyalty exists. Customers wait and time their purchases to coincide with promotional offers on their preferred brands. Thus, the routine sales at the market price are lost and the profit margin is reduced because of the discounts to be offered during sale-season.

2. Quality image may become tarnished

If the promotions in a product category have been rare, the promotions could have a negative effect about its quality image. Consumers may start suspecting that perhaps the product has not been selling well, the quality of the product is true compared to the price or the product is likely to be discontinued because it has become outdated. The Smyle Powder offer of “Buy 1 and get 2 free” went on and on. Ultimately people stopped asking for the product as the on-going sales promotion strategy made the customers perceive it to be a cheap and an inferior product.

3. Merchandising support from dealers is doubtful

In many cases, the dealers do not cooperate in providing the merchandising support nor do they pass on any benefit to consumers. The retailer might not be willing to give support because he does not have the place, or the product does not sell much in his shop, or maybe he thinks the effort required is more than the commission/benefit derived.

4. Short-term orientation

Sales promotions are generally for a short duration. This gives a boost to sales for a short period. This short-term orientation may sometimes have negative effects on long-term future of the organization. Promotions mostly build short-term sales volume, which is difficult to maintain. Heavy use of sales promotion, in certain product categories, may be responsible for causing brand quality image dilution.

5. Harmful Effect of Band image

If a brand is perceived by consumers as being a value rather than premium brand, it is more likely to receive the most benefit from a price-based sales promotion. However, overuse of price-based sales promotions for any brand can have devastating effects on the brand's image. This is particularly true for premium and super-premium brands or products and services in which the consumer has difficulty judging product quality in other ways, such as legal services or vitamins. The objective behind sales promotional tools is to keep current customers while attracting new ones, maintaining sales of seasonal products, introducing new products and challenging competitors. The essence of sales promotion involves using all forms of promotional activities, besides personal selling and advertising, to improve sales. In order to gain a strong foothold in the Malaysian market, Jollibee need effective sales promotional tools to fight its competitor.

Coupons

Coupons are one sales promotional tool. Customers get coupons in several ways, including via newspapers, magazines, online or mail. Customers present coupons to the retailer while buying merchandise in order to receive a discount or free product. For example, a customer of Jollibee use a coupon which takes 50 per cent off a set of meal costing $10, he saves $5.

Bonus Offers

Bonus offers or gifts with purchase are widely used promotional tools. When customers purchase a product, sometimes a bonus product is given along with it. The purpose is to increase the sale of the product and to make it more attractive by offering an additional item. When customers spent up to $20, he will get a free ice cream.

Free Samples

Another popular promotional tool is the free sample. When a customer is in the store purchasing certain products, he may receive a free sample of deodorant, shampoo, energy drinks food or candy. Usually, free samples don't require the customer to purchase anything. Free samples can be given to a particular target audience in order to attract that type of customer. Jollibee can put new product as free samples to get feedback.

Premiums

Premiums are extras added to sweeten a purchase for a customer. For example, a software company might add a year of free technical support for a customer who buys an expensive software program. Jollibee can offer special toys in their children meals. Offering premiums gives a business owner the opportunity to partner with complementary businesses, creating a wider target audience. This premium creates a win-win situation for everyone involved. It provides a demonstration to potential customers uses referrals to introduce the companies to potential customers and provides a free, useful gift to existing customers.

Mystery Rewards

Scratch-and-win cards or raffles for prizes are other popular promotional tools. The key is this mystery reward has enough attraction to attract customers. Popular food and unique gift will be work.

Money Back Offers

When customers doubt the quality or reliability of Jollibee, offer a money-back guarantee. Give a detailed explanation of eligible returns and refunds available for customer reference.

Point of Purchase Displays

Point of purchase displays is used in Jollibee to catch the attention of customers. The selected products may be sale items but may also be seasonal or high-demand merchandise. The displays are built in a prominent location such as on an aisle end or at the front of the store near the entrance. Jollibee may also place signs at the product's normal shelf locations.

Sales

A sale is a reduction in the price of a product for a specified period of time. Sales are used by manufacturers to gain new users or to increase market share. They also generate traffic in a retail establishment. Sales can result in off-season purchases that normally would not occur, such as Jollibee offer special food at 50 per cent off in Malaysia festivals. Besides, some points about sales promotion are important.

A sales promotion constructed to inform customers about a new product might include an advertisement in a local paper explaining the product and inviting customers to visit a Web site for a coupon offer. An activity like this can be measured by tracking the number of people who receive the paper, the number of people who visit the Web site, the number of people who download the coupon and the number of people who actually use the coupon. Reminding customers about a product or service is just as important as an initial product introduction. Something as simple as setting up an in-store display with coupons or having customers complete a survey to indicate how often they use the product keeps brands fresh in consumers' minds. Information gathered from the survey can expose how often customers use a product, how familiar they are with a product and if they plan to use it more in the future.

Couple this with a discount coupon and Jollibee can even track the number of people who make a purchase after completing the survey. A follow-up survey can assess things like customer satisfaction and likelihood for a repeat purchase. Sales promotions are a great way to inform and remind customers about Jollibee. Ultimately, the main objective of these activities is to increase revenue. Weigh the cost of promotional sales campaign against the total revenue Jollibee expect to receive. Consider that many companies are spending up to 60 per cent of advertising budgets on sales promotions. Be sure that Jollibee's promotional campaign is both cost-effective and profitable. These sales promotion techniques can help Jollibee gain a strong foothold in the Malaysian market.

References
1. Why Customer Relationship Management is so important? (2008) By Article Alley [online] Available from http://praveenortec.articlealley.com/why-customer-relationship-management-is-so-important-576369.html [Accessed on 12 Jan 2013] 2. Challenges of Implementing a CRM (2010) By Matt Koble [online] Available from http://www.ehow.com/list_6631188_challenges-implementing-crm.html [Accessed on 12 Jan 2013] 3. Tools of Sales Promotion (2005) By Chris Joseph [online] Available from http://www.ehow.com/list_6073558_tools-sales-promotion.html [Accessed on 12 Jan 2013] 4. Disadvantages of Sales Promotion (2008) By Drypen [online] Available from http://drypen.in/sales-promotion/disadvantages-of-sales-promotion.html [Accessed on 12 Jan 2013]