Current Key Principles of Customer Relationship Management - Essay Example

? Relationship Management CRM 4.0 CRM Plan 4 Current Key principles Without having sound marketing strategy, it is impossible for a company to achieve success in the market. In this rapidly changing business environment, a business must embrace the agility to modify strategies and maintain a strong competitive position (Manning, 2010; Hesse-Biber, 2011; Kumar, 2011). Hence, a flexible business and marketing strategy is essential for every business houses (Pride and Ferrell, 2012). In the similar way, the business environment of UK is somewhat uncertain and as a result of that companies are required to formulate strategies in a manner that fits with the nature of the environment. In this study, the key marketing principles of Primark will be evaluated. Product: - Most of the company’s merchandise of the company is manufactured by the company itself. The company specializes in menswear, childrenswear, womenswear and home-decor products. Some of the bestselling products of the company are footwear, accessories & hosiery, lingerie, and cosmetics. Most of the brands sold by the company are their own brand. Some of renowned ones are Atmosphere, Denim Co., Secret Possessions, Ocean Club, Backswing, Early Days and Rebel among others (Primark, 2013). With wide range of products, the company caters to customers of different segment. Distribution: - Alongside the importance of developing a sound product strategy, the development of distribution strategy is equally important (Bose, 2010). Moreover, for a company involved in apparel retailing, the importance of distribution is more (Dent, 2011). The success of the company is greatly dependent upon the distribution strategy pursued by the firm. Knowing the importance of distribution, Primark have also developed distribution strategy that ensures delivery of the products at the right place and right time. The company has appointed stockiest at different place of the country, where the company stores their manufactured products. One of the interesting facts is that most of the stock points are extremely close to the retailing outlets. This has allowed the company to make wide variety products available within the store (Michaels, 2010). Apart from the physical distribution, the company also markets their products through online store (primarkonlinestore, 2013). As a result of that the company has been able to streamline their distribution method. Pricing: - Likewise, product and distribution, the pricing strategy adopted by a firm is critical towards the revenue generated by the company as well as the profit earned (Kotler, 2010). In this turbulent business environment, companies have no other option but to maintain a steady profitability in order to sustain for a longer period of time (Craven, 2012; Dransfield, 2004). The pricing strategy adopted by the firm is cost plus pricing method, in which the company fixes the product prices on the basis of the cost incurred for producing one unit of the product. However, at some cases the company also pursues competitive pricing strategy for the sole purpose of dealing effectively with the competitors in terms of price-war. On the other hand, when the company makes it presence in a new market, it usually follows penetration strategy. Despite, the presence of strong brands, the company has kept the prices affordable in order to ensure customers from every section of the society can afford their apparels. Segmentation: - Segmentation is a process by which companies divide the market into different segments. It involves division of the target market into small subsets by considering the common needs of the consumers (McDonald and Dunbar, 1995). A company segments its market on the basis of different factors such as geographic segmentation, behavioural segmentation, psychographic segmentation, segmentation by occasions and segmentation by benefits (Alshorbagy and Elsaman, 2011). In the similar way, Primark divides its overall market into distinct markets. The principal reason for undertaking segmentation strategy is that the company is able to identify the different needs of customers. In addition, it also helps in formulating strategies as per the requirement of the customers thereby mitigating the risk of failure. Primark segments its overall market on the basis of a combination of demographic factors and behavioural factors. It mainly considers age and preferences to segment the market. Targeting: - Once companies are able to segments their overall customers, the next task is to target those customers effectively (Jobber, and Fay, 2006). Targeting involves the selection of the potential customer groups to who the business wishes to sell their products or services or feels that the chosen group will increase value of the firm (Foxall, Goldsmith, and Brown, 1998). In simple words, the targeting strategy involves selection of a subgroup and determining the products or services that will be offered to the segment (Aliraqi, 2001). . Moreover, targeting also helps in determining the specific requirements of a target group. The primary target customers of the company are fashion conscious people and age below 35 years (Wordpress, 2009). Apart from that company also targets customers who are below 15 and likes wearing trendy outfits. Positioning: - In marketing, positioning is a process by which companies creates an image for themselves in the minds of target customers. Companies pursue several techniques to create a position for themselves in the market place (Ries and Trout, 2003). The positioning statement presented by companies clearly reflects the intentions towards then customers. For example, companies sometimes position themselves as a provider of high quality products or they are sometime positioned as a provider of wide range of products. In this context, Primark positions themselves as a provider of wide range of apparels at low cost thereby making it affordable for the middle class. One of the biggest advantage for positioning themselves as the provider of wide range of products at a low cost is that the company will be able to target mass population (Elnadi, 2009). On the contrary, if it would have positioned itself as a premium brand, the market size would have greatly decreased. Despite, that the company has issues related with targeting and positioning. 4.2. New Segment and Targeted Customers The analysis of the different marketing elements has clearly indicated that the company needs to make alteration in their current marketing strategy. This idea has been further ignited by the low sales volume of the company (The Telegraph, 2011). Moreover, in the recent past the number of footfalls in the retail outlets of Primark has declined to a great extent. One of the possible causes identified in this context is improper market segmentation. The primary customer segment of the company is fashion conscious people and age below 35 years (Wordpress, 2009). However, focusing on a single segment will not help to serve the purpose. Hence, the company is recommended to cater to the following segments of customers: - Target Group I – Men 20-40 who are fashion conscious. Target Group II – Women 20-45 who likes wearing trendy outfits. Target Group III – Individuals below 20 years likes to wear fashionable. Apart from that, it has been also identified that the company does not use any kind of specialized customer relationship management software and as a result of that there are hardly any customer references or word-of-mouth promotion for the company. A number of times it has been observed that a loyal customer acted as a word-of-mouth promoter for the company and increased the company’s value. Furthermore, the last section of the study has identified that the company is facing serious issues in the context of customer relationship management. The company is also failing to cover an ordinary customer into loyal customers. In order to deal with this challenge the company is recommended the following courses of action: - One of the possible strategic options for the company is the implementation of CRM software. CRM help companies in maintaining a cordial relationship with the customers and at times it plays a crucial role in ensuring repeat purchase (Berndt and Brink, 2004; Brink and Berndt, 2009; Corey, 2008). Another way to increase loyalty, the company can also undertake socially responsible work (Buhler and Nufer, 2012). The company is also recommended to pursue e-mail and personal marketing. This will allow them to remain directly in touch with the customers. For example, the company can notify the customers about their latest offerings (Clow and Kurtz, 2003). One of the most common ways by which customer relationship can be strengthened is proving customer incentives (Sorce, 2002). Therefore, the company can offer incentives to the customers in the form of flat discounts or free products. Lastly, the company may also offer customers with loyalty cards, where customers will get points for every purchase and can redeem it with another purchase (Hennig-Thurau and Hansen, 2000). 4.3. CRM Communication Strategy From the aforementioned alternative courses of action, the company is recommended to pursue the following three CRM strategies. Implementation of CRM Software: - Nowadays, business is driven by technology. As a result of that business houses are also depending heavily on technology. Similarly, Primark is recommended to use customer relationship management software for maintaining a database of their customers. Providing Customer Incentives: - The Company is strongly recommended to offer the loyal customers with incentives. For example, the company can offer “buy 2 get 1 free”, “flat 40% discount” etc. It is believed that offering the customers with such incentives will increase their loyalty towards the company and help in repeat purchase. Loyalty Cards: - Loyalty card is another tool by which the company can enhance the allegiance of the customers. In this regard, the company can provide points to the customers on the basis of the purchase value. The customers can use those points to make new purchases. . The reason behind choosing these three elements is low cost and direct benefit. On the contrary CSR activities will be costlier for the company and there is doubt over direct impact on customer loyalty. However, offering customers’ discounts and free products will directly influence their purchase behaviour and if they get satisfied, can even act as a word of mouth promoter for the company. It is also essential to communicate the CRM strategies to the stakeholders of the company. Since, the proposed target customers of the company are men 20-40 who are fashion conscious, women 20-45 who likes wearing trendy outfits and individuals below 20 years likes to wear fashionable, it is necessary to use a media that has the ability to address mass customer segment. The implemented strategies will be communicated to the concerned members with the help of social media as well as digital video orders. 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