Chocolate Consumers and Customer Relationship Management - Case Study Example

Table of Content Sr. No. Particulars Page No. 1 Executive Summary 2 2 Theoretical Alignment 2 3 Analysis 4 4 Recommendations 5 5 References 6 Executive Summary Customer is king. This statement is no myth. By virtue of variety in their choices and more importantly their increased access to knowledge and information, customers are becoming more demanding with passing time. Considering the ever-growing competition it is becoming more prominent that enterprise need not treat a transaction per se rather should build genuine relationships in a way that would benefit the customers. The given case emphasizes the requirement of managing the complete thought process of the consumer base i.e. the consumer orientation as part of their product and organisational policy. Be it CSR (Corporate Social Responsibility) or the product policy, managing the customer relationship is very important to keep the customer updated on the intentions of the company. In absence of this, the consumer is left to make its own version of various policies adopted by the organisation. This assignment endeavours to highlight the importance of managing or channelizing the thought process of consumer base in more methodical way to bridge the communication gap. Theoretical Alignment of the Case: Customer Relationship Management Customer Relationship Management (CRM) endeavours is intended to meet the goal of customer outlook and expectations. CRM helps in accomplishing maximum Customer lifetime value and hence higher returns to any organisation over a period of time. Looking critically, it is evident that Relationship Marketing which is based on societal concept of marketing has paved ways for CRM. This can be inferred from the definition by Light (2003, p.5) who said that CRM is developed from business practices like relationship marketing and the enhanced prominence on prolonged customer retention by means of efficient administration of customer relationships. CRM can be viewed as a system which is interconnected with enterprise wide information system. It includes all possible business processes which include direct or indirect contact with customers e.g. sales, marketing and post-sale service. Levine (2000, p.34) highlighted that Customer Relationship Management system uses knowledge or information related to the organisation’s customers in order to deliver pertinent products or services to them. One of the most prominent explanations of CRM has been rendered by Davenport et al. (2001, p.63-75). According to him CRM can be defined as “all the tools, technologies and procedures to manage, improve or facilitate sales, support and related interactions with customers, prospects, and business partners throughout the enterprise”. On the same league, Parvatiyar & Sheth (2002, p.2) describes CRM as “a comprehensive strategy and process of acquiring, retaining, and partnering with selective customers to create superior value for the company and the customer. It involves the integration of marketing, sales, customer service, and the supply-chain functions of the organization to achieve greater efficiencies and effectiveness in delivering customer value.” CRM engages a multifaceted amalgamation of lot many business and technological factors. This state of affairs calls for the planning and implementation of desired strategies for the espousal and execution of Customer Relationship Management within a company (Bull, 2003, p.5). CRM has recently come into limelight and has taken the centre stage. The development and stress on societal concept of marketing has in fact paved ways for relationship marketing and hence CRM. Proper implementation of CRM though needs effective marketing and strategic decision making. It is because the concept of CRM is not limited to a simple software solution and its implementation. Considering the aim of CRM to make and retain long-lasting relationships with customers, it has to be supported by an adequate and organisational policy. Analysis: In the given case, the policies of the company for an example to replace cocoa with pal oils as part of its cost cutting measures were not at fault per se. However, it is very critical to analyze here that the intension of the company was not communicated by any means across the consumers and hence they were left to draw their own conclusions base on the opinions they perceive from various agencies like that of press and media. It is also important to consider here that when customers are not aligned with the policies of the company, then such misunderstanding can often lead to brand switching. It can also lead to tarnishing of brand image and can doom the brand building strategies of the organization. Thus bringing the customers and for that matter all the stakeholders on the same page so that they understand the intention of the organization behind any action taken up. The substitution of Cocoa with Palm oil as part of cost cutting measure if would have been communicated to the consumers then they would have understood that the intention of the company was to make the product available to the consumer at the affordable price. Such sort of communication would have convinced that the company has no wrong intentions in adopting this cost cutting measures. On the other hand the company would also have identified the reason of reactions by the consumers. If possible the company would have done all the background research before opting for any strategy that would have an effect on the consumer psychology. If possible, the company should take into account any reactionary opposition of consumers in a graceful way so that it sets a precedence of tolerance among consumers for any such possible future issues. The possible diagnosis could follow following stages. Recommendations: There can be various possible ways in which the above situations can be dealt with. However, the approach that should be used should be the one which would not only be the reaction to the current issues but should also set context proactively for any such future issues. One of such possible ways could be to set a proper two way communication channel with the consumer as well as various stakeholders like media and press. It is not that the company does not have any such corporate communication practices. However, this recommendation is trying to put across the point that any such practices should be made more customer centric and proactive. For an example in the given context, the policy adopted by the company to switch the ingredients should have been proactively communicated to the consumers through various media channels so that it could have reached to the consumers in advance. It can also be communicated to the consumers that switching the ingredients would have no effect on the quality of the product. However, at the same time, it must be taken into consideration by the company that the environmental concerns of the consumers should also be addressed. The company should make sure that the production process should adhere to the norms of sustainable development process. It would be great if the company ask some independent certifying agencies to verify and certify that the company is compliant to the sustainable development processes. If these two above recommendation are followed then the concerns of both sides would be addressed in an amicable way that would not only solve the current deadlock but would also set a precedence to avoid any possible future deadlocks. References: Levine, S. 2000. ‘The rise of CRM’, America’s Network, 104(6). Light, B. 2003. ‘CRM Packaged software: a study of organisational experiences’, Business Process Management Journal, 9(5). Parvatiyar, A., Sheth, J.N. 2002. ‘Customer Relationship Management: emerging practice, process and discipline’. Journal of Economic and Social Research, 3(2). Davenport, T. H., J. G. Harris, et al. (2001). "How Do They Know Their Customers So Well?" Sloan Management Review 42(2). Bull, C. 2003. ‘Strategic issues in customer relationship management (CRM) implementation’. Business Process Management Journal, 9(5). Read More