An Analysis of the Factors of Successful Implementation of Customer Relationship Management in Chain of Supermarkets in the United Kingdom

Topics: Customer relationship management, Marketing, Customer service Pages: 7 (2147 words) Published: March 13, 2013
An analysis of the factors of successful implementation of customer relationship management in chain of supermarkets in the United Kingdom 1. Introduction
Today, more and more companies find that cultivating customer loyalty is a key factor to achieve success. Customer relationship management (CRM) focuses on the relationship between customer and company. Due to this feature, many companies are trying to establish their own CRM system for helping them to connect new customers and boost old customers’ long-term loyalty. CRM systems include operations and analysis, and relationship marketing strategy and supporting, customer-centric business processes (Buttle 2004). With the development of information technology (IT), using CRM system is more convenient. It is considered as an important strategic compulsory (Coltman 2007), with investment predicting that global costing will increase on CRM system over the future (Gartner Group 2009).

From a U.S. based survey, it was found by Goodhue et al. (2002) that a CRM system had already been established or was planned by 91 percent of companies. However, according to Rigby, the application of a CRM system is not very successful (Rigby et al. 2002).The main reason is that more than half of total companies consider CRM as a simple technology solution which aims to build a bridge among marketing, sales and service (Peppers and Rogers, 1999). A successful implementation should consist of different functional departments and be based on the needs of customer, at the same time, the CRM system also needs to integrate technology about business process management and cover the entire organization (Goldenberg, 2000).

This paper will define CRM and supermarkets. Then it will focus on the factors which influence successful implementation and analysis the use of CRM in supermarkets. The next section explains CRM systems and supermarkets, and describes the relationship between CRM and the supermarkets. Then how to use CRM in a best and appropriate way will be described. The factors which influence the use of CRM will be evaluated. At the same time, the use of CRM at TESCOS will be analysed. CRM is a very useful tool for the success of supermarkets in the UK.

2. Definitions
The earliest country to development of CRM is the United States. In 1999, the company Gartner Group Inc explored the conceptualisation of CRM and used it into field of marketing. Then, Parvatiyar and Sheth (2001) provided that the implementation of CRM process model which included four parts: CRM relationship formation, management and governance, performance, and evolution. Apart from strategic and financial target, they think loyalty and customer satisfaction is one aspect of CRM performance. Improving marketing productivity and strengthen the mutual value of the relevant parties involved in the relationship are the overall objective of CRM ( Parvatiyar and Sheth ,2001). However, Boulding et al. (2005) had a new point about CRM; they believed that CRM is the outcome of evolving and integrated marketing ideas and new usable data, technologies, and organizational forms. They draw this conclusion on analysing successful implementations of CRM.

From a dictionary of Business and Management in Economics & Business, supermarket means “a large self-service store that carries a wide variety of food, household products, and other goods, which it sells in high volumes at relatively low price.”

3. Main body
3.1 Benefits of using CRM
The result of using CRM system can be separated into two parties: the outcomes of development and operational outcomes. The former are acquired from software project management (Abdel-Hamid and Madnick, 1990); the latter are defined by Chen and Chen (2004) that the benefits, tangible and intangible, are turned out from CRM (see Table1).

Table1: CRM Benefits (after Chen & Chen, 2004, p. 338) Tangible benefits| Intangible benefits|
| |...
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