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Research Assignment: The impact of CRM on consumer buying behavior in context to UK retail sector

Executive Summary

The primary objective of this research study is to determine the impact of CRM on the consumer buying behavior in context to UK retail industry. For accomplishing the aims & objective, the impact of CRM on the consumer purchasing behavior is analyzed. After this, the issues and challenges were also identified with providing the relevant strategies for overcoming these issues.

In addition to this, the researcher was used the quantitative research for interpretation the data. At the same time, they also used the interpretivism philosophy and inductive approach in the research methodology. On the other side, the researcher was used both primary and secondary data collection method for achieving the valid results. Thus, this study helped in understanding the CRM practices of UK retail market in context to consumer buying behavior.

Introduction

This research study discusses about the impact of CRM on customer buying behavior in the UK retail sector. In addition to this, the concept of CRM is considering as a current necessity for the companies to use for keeping in touch with the customers on a daily basis and to stand in the competitive market. At the same time, the implementation of CRM allows the company to cater every changing need of the customers and influences their buying decision. Likewise, Tesco also incorporated the CRM system in their business process through launching the loyalty card scheme that results in maximize their sales in the UK market (Hoffmann & Birnbrich, 2012). Moreover, the CRM practices also helps the Tesco to keep update with the changing taste and preferences of the local customers in UK market and accordingly company caters the needs of the customers.

With the increasing competition in the retail sector, it is observed that Tesco has taken various CRM initiatives such as it develops highly focused marketing strategies through the help of CRM system. Likewise, the CRM practices assist the company to collect the detail information of the customers regarding their likes and dislikes. On that basis, firm get the chance to develop their future marketing strategy. Thus, these benefits of the CRM clearly indicate its importance’s for the firms in regards to influences the customer buying decision and for staying in the global market over the longer period of time.

Furthermore, this research report also gives brief understanding about the CRM and its impact on the customers buying behavior in context to UK retail industry. At the same time, the significances, deliveries and ethical issues are also considered in this study. Besides that, sampling technique and research methodology discusses in order to find the correct research strategy, approach and data collection method etc. Therefore, this study will be proving beneficial for the companies to get the detail knowledge about the CRM and to find the positive or negative impact on the consumer buying behavior.

Research Aims and Objectives

The main aim of this research report is to identify the impact of CRM on customer buying behavior in context to UK retail sector. For this study, different factors to be considered as well as issues would also determine that affects the consumers buying behavior (Woodcock et al., 2011). Moreover, the strategies/ ways to be study for overcoming the challenges of CRM in UK retail market.

Objectives:-

In order to achieve this research aims & objectives, the following objectives must be considered under this research study:

  • To study about the concept of CRM in UK retail sector
  • To identify the impacts of CRM on the consumer buying behavior in context to UK retail sector
  • To identify the issues which is faced by the firm in operating CRM in context to UK retail sector
  • To determine the ways/ strategies that are used by the firms for overcoming the issues related to CRM practices in UK retail sector

Literature Review

Introduction

This chapter gives brief discussion about the concept of Customer Relationship Management in the UK retail sector of the Tesco and impacts of the CRM on the buying behavior of the consumer. In addition, the literature review also identifies the related issues facing by the firm and also determines the ways and strategies used for the overcoming issues in CRM practice in UK retail sector.

The concept of CRM in UK retail sector

In the words of, Vethirajan & Jayakumar (2014) the Customer Relationship Management is a term where a firm analyses and uses the strategy, tools and technologies to improve the customer relationship for the purpose of get the objective and increase the value of the firm. CRM represents the business strategy which involves the practices of better communication to improve the customer service, provides the customer satisfaction with the increment in the retail sector of the UK. In the retail sector, CRM is a process of gaining information of the customer needs and behavior for develop a strong relationship. According to the Resnick, et al., (2014) the Tesco uses the CRM to discover its retail business in all over the world by using the best marketing strategy. For attain the objective it wants to face the challenges and evaluate the opportunities. In opposition, Moffett & Reid (2016) the CRM in the retail sector is not useful only in the increment of sales but it also helps to collects the data for the future and provide the discounts to the customer by use of data.

It is also describe that CRM system in the retail sector is very helpful by providing the help in building loyalty, creating ambassadors of the brand for the business and spread the positive customer experience of the company. At the same time, for building a successful CRM database there are many ways to collect the information of the customer. In research of Naidu & Babu (2016) Tesco is using the email addresses and contact numbers of the customer to provide the detail of offers, latest news and discounts and collects the data at the time of in-store purchasing and signup to online shopping. It is also suggested that the data are captured for the target to the individual at the time of retail marketing campaign and in this campaign the customers are offered according to the gender, interest and location in the UK retail sector.

The impacts of CRM on the consumer buying behavior in context to UK retail sector

In the study of Omoge & Laing (2016) it is finding that Tesco needs a good customer relationship to sustain in this competitive market of the retail sector industry. In the retail sector most of the companies do not get success in the primary area in the UK because of the buying behavior of the competitors are highly attractive. The retail store contains the many choices for the customer and there is need of the company to provide best quality product to the customer in lower price to restrict the change of buying behavior of the customer. According to Wang (2014) the CRM provides the customer value and satisfaction that restricts the switching of the customer and it is a most powerful and positive impact on the customer buying behavior to repurchase and loyalty of the Tesco. In addition, the company only has a target on the potential customer to increase the selling and purchase behavior to use the product of the company. The positive buying behavior of the customer by the use of CRM increases the loyalty and negative buying behavior shows the ineffective strategy of the CRM of the company in the retail sector. in the research of Garrido-Moreno et al., (2014) it is defined that the CRM also provides the services with the technical or functional quality that is helpful to the direct satisfaction to the consumer and effects on the buying behavior. In a research, it is observed that customer retention is a most important challenge for the buying behavior in the retail sector and the CRM always applicable to changes the retention of the customer. The satisfaction level of the customer is being increased by the co-operation of technology in the marketing in the retail sector by the Tesco. In addition to this, Schumann, et al., (2014) mentioned that the CRM is very helpful to provide the chances of understand the customer needs and future demand for the customer satisfaction by the use of technology.

Issues faced by the firm in operating CRM in the UK market.

In the views of Baran, et al., (2013) there are various types of challenges and issues that are faced by Tesco in operating CRM in the UK market. Tesco changed its basic entry strategy and implemented fully owned subsidy within the market. This new strategy can create huge impact on the operations of the company as it entered into the new market. The company has faced issues such as, decreasing market share, deceasing profit and revenues, and tough competition, etc. Blumberg, et al., (2016) illustrated that the firm could face the competitive threat in UK market, so it creates major problems for the firm to compete with the well established and recognized brands. Therefore, the firm should get a clear idea about the potential customers as well as the knowledge regarding the competition in the marketplace. This will help the firm to develop new strategies that will help the company to cope up with the new competitors. According to, Finnegan, et al., (2010) every organization should comply with its culture so as to create a company which functions more effectively. In addition to this, Garrido, et al., (2014) mentioned that for achieving success in the marketplace companies should adopt the latest technology to deliver the best products & services to its customers. The revenues of the company have shown decrease as the technology is outdated. In the words of Mukerjee (2013) strategy adopted in US is totally different from UK’s strategy as US follows the informal business structure.CRM is a tool that is used for maintaining relations with the customers.CRM is done with the help of information system. Information system gathers and stores all the relevant and vital information about each and every customer such as, the preferences, needs, tastes, automation of sales force, etc. In addition to this, Payne, et al., (2013) stated that it is important for companies to develop an effective CRM system as it helps in integration and managing the customers. In oppose of this, Verhoef, et al., (2010) mentioned that CRM is not easy to implement as the market environment is dynamic. The implementation of CRM into the company is a timely and costly affair. The continuous and on-going changes in the customer behavior, needs and requirements, etc have made it difficult for the organizations to retain their consumers. Also, 96% of 250,000 employees were motivated by the company’s new focus on “serve Britain’s shoppers a little better every day”.

  Ways/ strategies for overcoming issues related to CRM in UK market.

In the research of Xie, et al., (2013) it is identified that appropriate and effective planning and strategy is required by companies to excel their operations in the UK market. There are different types of strategies that can be used by companies to gather proper information about the needs of the customers. Zhang, et al., (2010) stated that, preparing a proper budget well in advance helps the company to implement the CRM properly. The employees should be trained on how to use the CRM system and what all benefits it will provide them and the company as well. Employees should be told about the new system in advance so that they determine the suitability of the system for the company. Communication is the key in these situations where change is forthcoming. Training is having due importance in the implementation of CRM system and should be provided regularly to the workforce. In support of this, Woodcock, et al., (2011) stated that CRM made it easy for Tesco to identify and target its potential customers in the marketplace. Adopting CRM further helped Tesco to improve its products & services and customized the products according to the needs of the customers.CRM is effective in improving the profitability for the company by shifting the focus on profitable customers. According to, Battor, et al., (2010) the use of the latest technology will help in analyzing the changing needs of the customers in the market place. It is important to know the taste and preferences of the customers so as to deliver the product or service accordingly. This will help to provide customer satisfaction and increase the revenues of the company.  In addition to this, Garrido-Moreno (2011) stated that it is essential to highlight the competencies that are needed for implementing an effective CRM process in the company. CRM system will help to deliver better services to the customers than the competitors.

Research Methodology

The primary objective of this research study is to identify the impact of CRM on the consumer buying behavior in the UK retail market. For accomplishing the research successfully, the researcher will be used the interpretivism philosophy rather than the interpretivism philosophy. As the interpretivism philosophy provide more detail understanding about the CRM related issues and at the same time, by using this philosophy firms easily make comparison of the facts from the existing literatures. Moreover, research would also choose inductive instead of deductive approach because with this approach, researcher gets the chances to develop its own theory rather than working on the developed existing theory (Meadows & Dibb, 2012).

In addition to this, the researcher collects the data through using the data collection method. In this, both the methods such as primary as well as secondary data are used for successfully accomplishing the research study. In case of primary method, researcher will incorporate the survey method in which questionnaires are prepared to gather the data for conducting the research study. In such case, the researcher contact to their local retail companies in UK for generating the relevant research result. While researcher in case of secondary method will prefer to follow the books, journals, articles, websites and cases study etc (Persson & Ryals, 2014). Besides that, the mixed method will also be used by the researcher for achieving the valid outcome and for effectively analysis the data, the researcher would be use the statistical data analysis methods for achieving the right and appropriate results of the research problem.

Accessibility

In order to access the data properly, there are various issues and problems get occur in the case of primary/secondary data collection. In case of primary method, there is a high chance of getting the irrelevant results as some respondents have filled the questionnaires without having a particular knowledge about the subject matter or many of the members did not show their interest to give any answer of the particular question. So this gives the incomplete information and it provides the ineffective interpretation of the research result and contributes invalid result (Perrini et al., 2010). Moreover, in case of secondary method, the accessibility of data become a challenge for the researcher as in order to access the websites for collecting detail information about any topic like CRM, there is log-in password which is occurred that’s create difficulty for the researcher to easily log-in the website and collect the existing literatures, journals etc. Therefore, log-in certain websites become an issue for the researcher for gathering the relevant information about the research report. Hence, these issues and challenges can occur in this study while gathering the information about the CRM and its impact on the consumer buying decision.

Sampling

The researcher used the sampling method with the aim to minimize the extra cost and find the accurate and relevant data of research in order to successfully complete the research on time. In this method, there are two types of sampling used by the researcher that is probability and non-probability. But in context to this, the researcher will use the probability sampling method as this method will prove more appropriate for the researcher to collect the data as compare to random sampling. At the same time, this method also takes less time and cost of the company. Furthermore, the relevancy has more in probability sampling as compare to non-probability sampling as there is no biasness exists in probability sampling. Due to lack of involvement of biasness in the probability sampling method, the researcher get more valid result as this method gives the equal chance to each individual to get selected and become the part of research study. Therefore, these indicate that the probability sampling will prove more useful for the researcher in regards to get the valid research outcomes (Verhoef et al., 2010). Likewise, researcher with the help of probability sampling can select randomly local companies in UK and able to study their response on the CRM and its influences on the consumer buying behavior. So, this method contributes high on generating the effective and efficient results.

 Significance

The main significance of this research study is that it helps the UK local companies to understand the impact of CRM on the consumer buying behavior. From this research study, the companies able to understand the importance’s of the CRM and its positive influences over the consumer decision while buying the particular product (Kumar, 2010). This research study will be prove more helpful for the companies for expanding their business in the global market through getting the detail knowledge of the CRM system. At the same time, the results of research study would provide support to the companies in regards to suggesting the strategies or ways to face the challenges related to technology changes and frequently changing in the needs of the local consumers. Therefore, the result of the research proves to be significant for the companies for achieving their respective future goals. Moreover, this research study result also promotes the development of new theories and reduces the more usage of existing literatures.

Deliverables

On the completion of the research study, there will be various deliveries that would provide to companies with the help of this research study. The relationship among the CRM and its significances on the consumer buying behavior will also deliver to the companies for making expansion in the global market (Persson & Ryals, 2014). Besides that, the research outcome also delivers various recommendations or suggestions which will prove to be useful for the company in regards to deal with the issues that arise in the CRM system and this deliverables contribute for the companies to stay in the market over the longer duration. Therefore, these deliverables allows the company to expand their market from local to global platform.

Required resources

There are various resources that are researcher used for this study to be successful. Likewise, they mainly used the questionnaires to collect the relevant information about the impact of CRM on the consumer buying behavior. In this, the researcher filled their questionnaires from the local companies in UK. In addition to this, there are different researcher books or journals are used for getting dept-understanding about the subject matter (Hoffmann & Birnbrich, 2012). At the same time, the researchers also go-through the case study of Tesco Company in order to identify the strategies/ways that they used the CRM system in their business process. Thus, these are the resources which contribute high for the researcher in regards to complete the research study on time and it also help to achieve the valid results.

Ethical Issues

While doing research study, the ethical issues must be considered by the researcher in order to avoid the error and biasness from the data which is collected. There are various types of ethical issues which researcher faces while collecting a data from different sources i.e., primary and secondary sources. In primary data collection, the ethical issues include confidentiality, reliability, consent and many more and at the same time, in secondary data collection, plagiarism, copyright are main ethical issues. For overcoming theses ethical issues, researcher is required to clarify and state the objective of research study to respondents so that reliable and accurate data can be collected from them. In addition to it, researcher should assure respondents that private information of respondents will be kept confidential and will not be disclosed to anyone without their permission related to research study.

In primary data collection, the researcher should ask simple and comfortable questions from respondents because if complicated question are asked then respondents may skip the question or just provide irrelevant answer to question. In context to it, Baran & Galka, (2013) stated that ethical issues consideration helps researcher in collecting a both primary and secondary data efficiently by following specific guidelines as this will ensure that conducted research study is free from ethical dilemmas and errors. While collecting secondary data collection, researcher should keep in mind that collected data should be relevant and up-to-date.

When secondary data will be used in research study by researcher then source from where data is collected should be included in research study in bibliography so that other researcher and readers know that collected data is relevant and reliable. On the other hand, the aspect of ethical consideration in research study will be high as it will help researcher in conducting an ethical research which will help in avoiding a conflicts and issues while collecting a data from respondents. However, these all ethical consideration must be considered and to be followed by researcher in research in order to get accurate and reliable result outcome for this research study.

Timescale (Gantt-Chart)

The below stated table is Gantt chart which help in setting a time frame for completion of this assignment within a specific time period. With the help of this Gantt chart, researcher will achieve all the outcomes according to schedule time (Wang, 2014).

Area of Work/ Months 123456789101112
Starting  the research
Research Background
Research Aim and Objective
Literature Review
Research Methodology
Sampling
Ethical Issues
Report writing
Proof-Reading
Final Report Submission

References

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Battor, M., & Battor, M. (2010). The impact of customer relationship management capability on innovation and performance advantages: testing a mediated model. Journal of Marketing Management, 26(9-10), 842-857.

Blumberg, D. F. (2016). Managing high-tech services using a CRM strategy. USA: CRC Press.

Finnegan, D. J., & Currie, W. L. (2010). A multi-layered approach to CRM implementation: An integration perspective. European Management Journal, 28(2), pp. 153-167.

Garrido-Moreno, A. (2011). Analyzing the impact of knowledge management on CRM success: The mediating effects of organizational factors. International Journal of Information Management, 31(5), 437-444.

Garrido-Moreno, A., Lockett, N., & García-Morales, V. (2014). Paving the way for CRM success: The mediating role of knowledge management and organizational commitment. Information & Management51(8), 1031-1042.

Hoffmann, A. O., & Birnbrich, C. (2012) The impact of fraud prevention on bank-customer relationships: An empirical investigation in retail banking. International journal of bank marketing, 30(5), pp. 390-407.

Kumar, V. (2010) Customer relationship management. USA: John Wiley & Sons, Ltd.

Meadows, M., & Dibb, S. (2012) Progress in customer relationship management adoption: a cross-sector study. Journal of Strategic Marketing, 20(4), pp. 323-344.

Moffett, S., & Reid, A. (2016). Managing the Retailer‐Supplier Relationship in a SME context: A KM Approach. Theory and Applications in the Knowledge Economy, 220.

Mukerjee, K. (2013). Strategizing for CRM to leverage its benefits. Business Strategy Series, 14(4), pp. 118-122.

Naidu, G. R., & Babu, R. H. (2016). A Case Study Of: Clint Relationship Management (CRM) Practices In Selected Organized Retail Outlets. IJSEAT4(2), 091-099.

Omoge, A. P., & Laing, A. F. (2016). A qualitative study verifying the research constructs relating to CRM systems benefits and consumer buying behavior variables.

Payne, A., & Frow, P. (2013). Strategic customer management: Integrating relationship marketing and CRM. USA: Cambridge University Press.

Perrini, F., Castaldo, S., Misani, N., & Tencati, A. (2010) The impact of corporate social responsibility associations on trust in organic products marketed by mainstream retailers: a study of Italian consumers. Business Strategy and the Environment, 19(8), pp. 512-526.

Persson, A., & Ryals, L. (2014) Making customer relationship decisions: Analytics v rules of thumb. Journal of Business Research, 67(8), pp. 1725-1732.

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Schumann, J. H., Wünderlich, N. V., & Evanschitzky, H. (2014). Spillover effects of service failures in coalition loyalty programs: the buffering effect of special treatment benefits. Journal of retailing90(1), 111-118.

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Verhoef, P. C., Venkatesan, R., McAlister, L., Malthouse, E. C., Krafft, M., & Ganesan, S. (2010). CRM in data-rich multichannel retailing environments: a review and future research directions. Journal of Interactive Marketing, 24(2), pp. pp. 121-137.

Vethirajan, C., & Jayakumar, S. (2014). Growing prospects of CRM practices of retail trade in India. International Journal of Advanced Research in Management and Social Sciences3(12), 25-34.

Wang, S. W. (2014). The moderating effects of involvement with respect to customer relationship management of the airline sector. Journal of Air Transport Management35, 57-63.

Woodcock, N., Green, A., & Starkey, M. (2011) Social CRM as a business strategy. Journal of Database Marketing & Customer Strategy Management, 18(1), pp. 50-64.

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