Alibaba CRM and Communication Strategies - Case Study Example

ALIBABA СRМ AND СОMMUNIСАTIОN РLАN By Students Name Course Professor University State Date Introduction Customer Relationship Management (CRM) has dramatically transformed from a conceptual framework to a business function. The need to comprehend and manage customers in a profitable way is an imperative aspect, however, the difficulties of approaching CRM in a correct way has increased. Managers can be able to overcome these challenges by ensuring that they frame the CRM programs in a strategic way against the value that they produce and as a result be able to attain goals (Chen, and Popovich, 2003). In addition technology advancements and the multiplication of the web and additionally accentuation on coordinated advertising approaches CRM has become a major focus of marketing. It is notable that once customer relationships are strong customer loyalty is enhanced which in turn results into corporate profitability. Furthermore, information technology is seen to contribute to a sturdy customer relationship as technology development in CRM enterprise executions have extended at a phenomenal rate. The aspects related to customer relationship management and focus have become an essential marketing as well as business philosophies for a number of companies that are in search of a competitive advantage. Maintenance, establishment and enhancement of a customer relationships have been a significant aspect of business. Nevertheless, there has been a significant increment in the past few years that are linked to CRM research. The link that exists between CRM and technology is of particular interest as academics have started to comprehend on the relationship between CRM innovation business relations and relationship marketing as providers of opportunities for sustainable competitive advantage. However, despite of the implementation challenges facing CRM it is still considered as a potential for significant advantages to partnerships over enhanced client connections, client maintenance, fulfillment and enhanced benefit (Reinartz, Krafft, and Hoyer, 2004). The implication here is that building the relationship between individual customer and the business as a whole has become increasingly important. This is in terms of diverse markets saturation, costs emanating from winning new customers which have increased and as a result retaining the existing ones has become significant. Therefore, for business to be able to develop a strong relationship with customers the right communication via the right channel is the key for success. In order to get an in-depth understating of these aspects, this paper aims to the customer base in alibaba.com show relationship, information and channel preferences and design a CRM and communication plan. Company overview The operations of Alibaba started in 1999 with an English market place Alibaba.com that enhanced global market. The aim of establishing it was to assists small exporters who are engaged in traders and manufactures located primarily in China to be able to reach out for world buyers. Later in the same year the company managed to launch a Chinese-dialect discount commercial center focusing on neighborhood exchange between independent companies at present alluded to as 1688.com. Since its foundation the residential stage has figured out how to advance into a discount channel where vendors are working together on their retail commercial centers to source items. The issue of payment between sellers and buyers and as a result in 2004 a channel referred to as Alipay was established to address the matter (Kian Chong, Shafaghi, and Leing Tan, 2011). Buyers were not willing to impact an installment before accepting and examining their acquired items and at similar happened to venders who were not will to transport the items until they were sure that installment was pending. Trust issues were a wellspring of smothering test for the development of online trade inside China. As an answer Alipay presented an escrow as an answer for this issue. It is important to note that since 2011 there are no controls done by Alibaba on Alipay, however, the company continues to take part in certain economic benefits of Alipay through contractual arrangements. Furthermore, the company has struck contractual deals or arrangements with Alipay that enables them to simplify payment provision and escrow services for Alibaba customers. Customer base Alibaba customer base can be addressed from two perspectives; domestic market and international market base. In 2014 the company managed to go global by stating that the move was aimed at pushing the revenues up with more than 48% growth yearly by fiscal year 2017 up from 33% growth in 2016. Alibaba has invested a lot with an aim of expanding the business past the ecommerce space. The company has managed to maintain a strong M and A history exclusive of the recently acquired enterprises in China. The acquisitions helps to boost the company’s growth prospects. The company is exploring new avenues of growth with an aim of increasing its customer’s base (Passmore, Calder Group, Inc., 2007). The company has a strong customer base within the urban consumers. The company is focusing on building a customer base within the rural areas of China. The goal is to be able to reach out for the untapped user base within the rural areas and be able to boost online sales. As a result, this move will generate more revenue for the company. The Rural urban customer base for Alibaba in China is shown in the figure below Source: http://marketrealist.com/2016/03/alibaba-working-build-rural-customer-base/ International customer base The company is developing a plan on how to expand its international business investment to be able to generate meaningful revenue through cloud computing, logistics, online payments and entertainment and media. Through this newly developed customer base the company will manage to double its merchandise by the year 2020 significantly. There significant attempts by Alibaba to reach out and build a strong customer base within the US market in order to better comprehend merchants and customers. This approach is enhanced by the shares that the company has purchased belonging to the Groupon, this move makes Alibaba to be counted among the largest investors in Groupon (Zhao, Wang, and Huang, 2008). This could be a strategic investment by Alibaba where O2O model is followed to offer discounted coupons to consumers based on its affiliated merchants. Alibaba has also invested in US companies such as online retailers Jet.com, augmented-reality provider Magic Leap, and ride-hailing service lift in the past. All these are company’s customer base and moves to increase on them. It is important to note a few things concerning Alibaba customer base. One of them is that Alibaba should try and focus on growing Chinese user base .The customer base in China has a potential growth following the fact that almost 50% of Chinese have access to internet .However, Alibaba faces challenges when it comes to user growth as there is no enough internet infrastructure within the country (Rauyruen, and Miller, 2007). Therefore, Alibaba needs to rise up its marketing campaign to increase growth between those already on the Internet, demonstrating its ability to attract Chinese consumers once they have access. Customer Relationship Management (CRM) Development of a CRM is aimed at reducing difficulties in trading. The key idea behind CRM is trying to find out what the clients thinks in regard to the way their needs are met in order to increase the sales volume and improve on operation and management. Therefore the company can try and use a personalized CRM system (Peppard, 2000). Personalized CRM Personalized approach to customers will work well for Alibaba. CRM can help the company to personalize the contacts with the customers to boost sales and increase its customer satisfaction as well as loyalty. This means that Alibaba has to put customers at the center of its business focus towards what individual customers wants to purchase from them. A customer centric personalization system implies that Alibaba will be dealing with customers individually or mainly in a way that looks like individualized to a customer. In this case the generalized sales are replaced with communications that are targeted towards a specified and constructed information contained in the company’s CRM (Bull, 2003). In addition the message has to be delivered using the customers preferred channel such as email, personal contact or any other method preferred by the customer. After the establishment of customer centered approach, the step that follows is to research on its customers to be able to identify areas that can be changed. Alibaba through this approach will be able to organize all aspects concerning the customers and contacts history as well as auxiliary information like demographics (Bull, 2003). After extension of information regarding the company’s customers the step that follows is to use CRM tools to segment customer base. This form of segmentation can take the formation of a simple purchase volume into a complex multi factor analysis. The next step would be to apply the information that is derived from the customer base segments and decide on how to approach every customer. This approach is showed in the figure below: Segments (Marco & Micro) Model In any B2B service or product the target market is not approached in a homogeneous mass. In the case of Alibaba the best approach is to divide its target market into numerous distinct groups on the basis of needs and preferences, altitudes, and behaviors (Passmore, Calder Group, Inc., 2007). In the feature based approach Alibaba is able to divide its target or customer base to groups based on firm graphics location and activity, nature of relationship, characharetsics of product usage. This approach can be expounded more in the following figure. Segmentation dimension in Alibaba Network map Alibaba seeks to connect buyers and suppliers in the world and become the world largest online market place in the context of turnover. The platform needs to be an integrated and innovative in order to earn customers trust. The group comprises of numerous players who are closely interconnected and work as a group .Each group is seen to play a role with a central focus being the Alibaba. This network map is expounded more by the figure below: AAR Analysis Key Issues or drivers There has been an explosive growth in the China’s ecommerce markets Expansion in marketing in the country There has been a significant opportunities in the internet sector such as emergence of social media. As a result the company is devising ways to counter emerging barriers such as Reduced mobile monetization rate Counterfeit products issues Increasing trends into B2C within the Chinese E commerce market. Pestle analysis, PESTEL also referred to as PEST analysis is a crucial in the marketing principles. PEST analysis can be applied by Alibaba in the analysis of external aspects influencing the company operations. Political-Legal Factors Control of the Chinese market by the government Issue related to companies operating free and open in the E-commerce industry Regular checkups in Alibaba by officials from the government embodies Economic Environment Customer’s purchasing power in China is affected by aspects such as saving of a family, salary products prices and credit availability. When it comes to mobile payment that Alibaba is trying to focus more with its strategy of reaching the rural customer base. There are numerous mobile payment policies that have been established by the people’s bank of China. These policies brings increased convenience when it comes to remote payment for customers. The E-commerce application policy when it comes to transactions, shipping and logistics as well as online auctions requires improvements and standardization from the current one. Social Environment Negatively a company Like Alibaba marketing strategies can go against the customers’ expectations and as a result impact on their decisions and lifestyle. In most cases companies are burdened with requirements of customers when it comes to protecting the environment. As a result demographic factors such as ages, distribution destiny of resident’s nationality and educational level are always factors to consider (Duncan, and Moriarty, 1998). In China, where Alibaba is located there are accepted market economy policies that guides and regulates the local market. In addition there is a great lot of companies in E commerce that needs to expand in the industry, however, as a result of information asymmetry a block emerges in the successful expansion of the market. Therefore, there is need for Alibaba to capture this precarious business opportunity in order to realize the self-promotion strategy. Technological environment Commonly, the progression of the e-commerce market is backed up by technology as well as some other important market elements. This means that every emergence of novel technology there are some destructiveness that takes place in the market. This refers to factors such as social and technological trends, changes in technology, breakthroughs in technology that affects enterprises, as well as, the mutual connection between technology and social environment. In the case of Alibaba, the emergence of novel technologies in China and the world at large has increase thе social demand for this particular industry services and products (Peppard, 2000). This makes Alibaba have numerous opportunity especially with its proposed move of enlarging the rural customer base. Above all this PESTE analysis can be summarized by the following diagram. Marketing Communications Plan A well designed marketing communication plan for Alibaba will help is supporting its mission and the goals set within its strategic plan. As a result Alibaba following a well-planned marketing communication plan communication its marketing and communications will be focused into ensuring that all functions of the company works together in support of its bigger picture. This plan enables it to build on the organizations brand and identity. This plan will provide Alibaba with a focus and channels to use in order to have an interactive session with its audiences. The marketing plan for Alibaba will be based on the following steps Business challenge A marketing approach that is successful is based on through understanding of the company’s audience. This step will assist in analysis of the existing customers and the reason behind preferring Alibaba products and services. According the analysis done on customer base, existing customers are based is within the urban setting. However, it also aims to focus on rural customer base and with a good research plan gaps connected to demographics, purchasing patterns and other factors will be identified (Srinivasan, Anderson, and Ponnavolu, 2002). Uncovering Alibaba’s Exceptional Selling Proposition This is the main advantage that once it is communicated in an effective way it will assist in driving the company sales of its products and services up. The focus is on a unique issue that Alibaba can be able to solve it better than competitors. The selling proposition has to be strong and compelling enough to act. SWOAT Analysis The focus will be on weakness in the market, Opportunities, Strengths and threats. All these factors will be addressed on how they affect the company’s market Messaging Consistence The company logo and stationary are not the only key factors when it comes to company branding. In this step the plan will be concerned with generation of brand positioning statements. These will comprise of a tagline, version of a single sentence, and short paragraph that are standardized. Marketing Mix There has been an increase and advancements in online marketing. This has increased the communication ways than before. In the E- commerce industry the brand is unique implying that there is no standard marketing mix that is fate for all companies, but in this case a B2B marketing mix will be used (Rauyruen, and Miller, 2007.). Success Measurements (Metrics) Whatever the medium and message, is being passed it is crucial to make sure that communications are measurable. This concerns communication channels such as email open rates, social media experience or even direct mail response rates. This section is all about establishing major communications objectives and putting the systems in place to chart the company’s success. Leads and Client Data A CRM system is a database of contacts for customers and prospects that allows Alibaba to organize information in terms of contact info, records, files, calls and emails. These will enable to streamline, scale sales and marketing procedures. Elements of the plan These will comprise of the following: Profile audiences and identity Identification of massagers and messages development, Messengers and credible messages, Selection of communication channels, Plan implementation and development of evaluation points, And measure its success and Feedback The above plan can be simplified in the diagram below: Conclusion Alibaba is one of the China’s successful e commerce practitioners and has managed to develop an effective information connection between buyers overseas and Chinese small medium enterprises. They have also managed to maintain a boundless market among its personal businessmen through the provision of a high distinctive quality personalized services and well-placed prices with international marketing channels, new dissemination and advertising methods. In the business to business industry the company is a pace maker as it has managed to transform China’s e marketing with only 13 years in the business. However, there are areas that the company has not managed to crack especially when it comes to the issue of e transactions and reinforced supervision over e traders. The issue regarding customer base and communication channels have been found to have progressive development as the company aims to increased domestic customer base by venturing more of the rural areas and international boundaries as well. References List Bull, C., 2003. Strategic issues in customer relationship management (CRM) implementation. Business Process Management Journal, 9(5), pp.592-602. 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The customer relationship management process: Its measurement and impact on performance. Journal of marketing research, 41(3), pp.293-305. Srinivasan, S.S., Anderson, R. and Ponnavolu, K., 2002. Customer loyalty in e-commerce: an exploration of its antecedents and consequences. Journal of retailing, 78(1), pp.41-50. Zhao, J., Wang, S. and Huang, W.V., 2008. A study of B2B e-market in China: E-commerce process perspective. Information & Management, 45(4), pp.242-248. Read More