Debenhams Marketing Analysis - Report Example

UK RETAILOR – RELATIONSHIP MANAGEMENT here] of [Due paper Introduction 1 of the Company Debenhams is one of the major fashion retail companies of the United Kingdom. The company was opened as a single store in London in 1778 and has now expanded into many other countries of the world. The headquarters of the company are based in London. Nearly 30,000 employees work in different franchises of the company all over the world. Debenhams Plc deals with the sale of a wide range of fashion products for women, men, and children of all ages. The product line of the company includes clothes, furniture, home accessories, cookware, electronics, toys, jewelry, handbags, and many other categories of products. The company also provides wedding services to its customers. There is a fully functional and interactive website of the company which provides information about available products and events. Customers can also products online using the website of the company. 1.2 Current Market Position With the current share price of almost 82.45 (Financial Times 2013), the company is one of the top retail companies of the United Kingdom. Some of the main competitors of the firm are Marks and Spencer Plc., House of Fraser Ltd., and John Lewis Partnership Plc. The market position of the company is stable which is evident from the level of profit and net income that it generates every year. The sales level of the company has never faced any significant downfall even when many other retail companies have entered the UK’s retail industry recently. However, the company is facing some decrease in the customer satisfaction level in the last couple of years and the main reason behind this is some strategic change in the customer relationship management strategy. This report will outline the ways Debenhams Plc can implement the best CRM practices in order to build relevant engagement platforms with their customers and to regain the level of customer satisfaction. 1.3 Marketing Strategy 1.3.1 Importance for Retail Companies Marketing is one of the main tools for increasing growth and profit levels of a company (Waters n.d.). Creation of an effective marketing plan holds great importance in creating the entire business plan for carrying out business activities (Perez 2010). Retail companies usually face a lot of strategic marketing challenges to achieve higher levels of profits, as well as to attract and retain the customers through customer centric marketing strategies. Therefore, Debenhams Plc has implemented an appropriate strategic marketing plan to face the strategic marketing challenges effectively. The marketing plan of the company not only includes defining its marketing goals but also includes development of marketing strategies to achieve those goals. As Daud (2008) states, “the most effecting marketing plans are those that are simple yet effective and easy to implement”. The marketing strategy of Debenhams Plc is simple but includes the use of various technologies to reach the target market. According to Traffanstedt (2010), “The benefits of a marketing strategy are great if you do it right”. Some of the benefits that Debenhams Plc has gained because of its marketing strategy include market penetration, increase in the market share, ability to communicate a change in the product line, achievement of competitive edge over close competitors, achievement of retail industry dominance, and increase in the awareness among the people about the products of the company. Strategic marketing is the powerful force that drives a company towards achievement of desired goals and objectives regarding any innovation (Proctor 2000). The strategic marketing plan of Debenhams Plc is able enough to satisfy the customers’ needs and demands, as well as to increase the productivity and profitability of the company. Market domination should be the mission of any company that can only be achieved through implementing such strategies which should satisfy the needs of the customers (Grant 2002). 1.3.2 Marketing Modes in Use Debenhams Plc makes use of internet marketing because it helps the company advertise its products and services in different parts of the world. “The promotional tools that are deployed depend on the nature of the target audiences, the objectives and the strategies” (Finch 2008). For Debenhams Plc, internet marketing is not only a very effective way to launch new brands but also it helps the company get proper feedback from the customers. According to Keillor (2007, p. 6), internet plays a critical role in direct international marketing. Upson (2010) states, “EMarketing allows businesses to easily find potential customers that might have a special interest in their product”. Debenhams Plc also makes use of print media, such as, magazines and newspapers to create awareness about its products and services among local and international customers. The company advertises its news on famous magazines that are published worldwide. The company also published its ads on the internet to create recognition among a large number of internet users. Along with print marketing, the company also uses television marketing as a way to create awareness. Debenhams Plc gives ads on the television channels that help it in providing information about their products to viewers effectively. Debenhams Plc also makes use of outdoor advertising through billboards to create awareness among the people about its fashion brands. If we travel Ireland, Denmark, and England, we will come across many billboards advertising the products and services of Debenhams Plc. Billboards are usually placed near airports, public places, and shopping areas so that a large number of people can come across them. Billboard advertising is effective but a little costly as compared to other modes of advertising. However, their use has been productive for the company so far as measured by the customer feedback form that shows the modes of marketing that made each customer aware of the company’s products. 2. CRM Approach 2.1 Review of CRM Literature “Customer relationship management (CRM) is a management strategy that unites information technology with marketing” (Ueno 2006). Retail companies all over the world are focusing on the implementation of effective CRM practices to retain the customer base. According to Rossell (2011), the customer relationship management process helps in tracking customer behaviors which results in improving the ability to work on customer motivation and satisfaction. To ensure the stability of a company in today’s competitive market, managers of retail companies need to respond effectively to the ongoing changes in the CRM standards that have taken place in the last couple of decades. CRM eliminates the use of traditional marketing model and emphasizes on improving the business-client relationship (Stojanov 2009, p. 778). Customer relationship management is an effective tool for improving business reputation, as well as bonding between people (Management Study Guide 2013). The idea behind using customer relationship management as a tool for improving customer service started to change during the last decades of the twentieth century. As Roberts (2004) states, “in the 1990s companies began to improve on Customer Relationship Management by making it more of a two-way street”. Companies started using information to improve their business processes, as well as to improve the customer service by increasing the level of customer satisfaction. This approach was based on the core idea of CRM because of which it got recognition within a very short span of time. It was in that time that the goal of using CRM practices changed to increasing the sales through the provision of improved before and after sale customer service. As Duncan (2013) states, “CRM is intended to be a full life-cycle solution for managing customers from marketing to after sales support”. This statement shows that CRM is not just a single step that a company has to take to reap all benefits, rather it is a complete cycle that stats from the stage of marketing of products and services and ends with the provision of after sales support to customers. Customer relationship management assist companies in dealing with customers concerns and issues effectively and efficiently (Taylor 2007). However, this can happen only by developing an effective CRM strategy. The main goals of the strategy should be to locate potential customers through advertising and retain the existing ones by providing them with valuable services (Lind 2011). Customers stay with a company only when the company takes care of all needs and demands of the customers and takes steps to resolve all issues regarding use of the products. As Brown (2008) states, “if your customers are really happy, they’ll use your company more and have fewer complaints for customer service”. CRM includes all standards and guidelines that can a company can use to guide its strategy of improving the relationships with customers. The standards can be used to identify whether the results of the applied strategy in terms of customer satisfaction and recognition match the required CRM standards or some changes to the CRM strategy should be made to get desired results. Integrating CRM with cross business processes is a good way to achieve maximum benefits of CRM (OSF Global Services 2012). Integration of standard CRM policies is not as easy as it appears to be. Companies have to take critical decisions and bring some major changes in their current business strategies in order reap maximum benefits of CRM. For example, categorization of customers in accordance with their needs is essential in designing a targeted CRM strategy. To do this, companies need to change their existing advertising strategies in such a way that they target the groups of customers based on their individual needs. “Some customers need more attention than others so it is important to categorize the customers into different areas” (Lind 2011). Today, the use of the customer relationship management software has become very popular in all types of customer oriented companies. “A CRM software will track a customer’s personality, preferences, how they like to be talked to, how they view value, and so much more” (Frazier 2012). The CRM Software helps the companies in storing detailed information about the customers, categorizing the customers based on the level of relationship between the company and customers, and remaining concerned authorities to take particular actions to enhance customer value. The software is able to store all interactions with the customers in the system that can be used for improving future interactions between the company and the employees. The four main pars of customer relationship management include acquisition and retaining the customers by providing them with best customer support, understanding and categorizing the customers based on their requirements and expectations, customizing the CRM strategy in accordance with customers’ requirements and market trends, and improving the level of customer satisfaction by improving the feedback and response mechanism. An understanding of the expectations and requirements of each customer has become essential to provide the best quality services and support to customers in today’s rapidly changing business environment (Joe 2011). High the quality of customer service and support, increased will be the loyalty of customers and increased will be the chances of building long-term customer value. According to Joe (2011), some of the main goals that seem to easy to meet through implementation of best CRM practices include: 1. Development of long term and profitable relationships with new and existing customers. 2. Increase in the level of customer satisfaction, as well as in the level of confidence that customers may have in the company. 3. Maximization of the amount of revenue for the company by encouraging and increasing investments from the customers. 2.2 How Debenhams Plc can implement CRM CRM is all about integration and management of people, business processes, and technology (Bucholtz 2011). As Debenhams Plc is currently operating in more than 65 countries all over the world, its management authorities need to implement such CRM strategy, which should be able to categorize the customers according to their cultures, as well as should meet the needs of all customers regardless of location based differences between them. The reason behind this strategy is to satisfy the needs and requirements of culturally diverse range of customers. Giving customers what they need is one of the main requirements of proper customer relationship management in retail industry. To remain competitive and to dominate the UK’s retail industry, Debenhams Plc needs to focus on providing high quality fashion products and wedding services to the customers. The managers of the company should have in their mind that many other close competitors, such as, Marks and Spencer and House of Fraser Ltd. are also providing similar products in the same locations where Debenhams Plc is operating. Therefore, the top management of the company needs to implement fully functional and customer oriented marketing and CRM strategies not only to attract more customers but also to retain the existing customer base which is essential to thrive in the market successfully. This is also a good way to serve wider geographical regions and remain competitive in the market. Another aspect of CRM is quick response to customers’ complaints. The thing Debenhams Plc needs to do in this regard is that they should act immediately to the concerns of customers to resolve their complaints. Customer relationship management requires the employees of the retail stores to serve customers’ needs in a polite manner. It is a fact that politeness attracts customers and arrogant behaviors eventually lead to decrease in the customer base. Therefore, Debenhams Plc should focus on hiring culturally diverse and well-mannered employees to meet the concerns of the customers effectively and efficiently. Direct mailing is also a key aspect of modern CRM. Debenhams Plc should focus on using direct mail system to the existing customers to advertise new products and services, as well as to know about customers’ experience regarding use of the company’s products. “Direct mail is a marketing technique in which the seller sends marketing messages directly to the buyer” (Withers 2008). Using this aspect of CRM, the company can improve its services based on the feedback of the customers. Many retail companies have already started using direct mail system to enhance customer value. This will a good step by Debenhams Plc as it is going to make the customers feel valued by the company. The ever-increasing number of customers will prove that the direct mail strategy works well for the company. Companies usually maintain databases in which they store the email addresses of their customers which they use to contact the customers when needed. Another key aspect of CRM that Debenhams Plc should focus is to add some more ways of communication between customers and the company. Although the website of the company is playing a significant role in the establishing contact between the customers and the customer service department of the company, but the system sometimes fail to cover a large number of queries from the customers. This leads to delayed responses which eventually decreases the level of customer satisfaction because customers like immediate response regarding their concerns. Therefore, Debenhams Plc need to develop a more interactive and quick communication system in order to remain in contact with the customers. Customers like to revisit the retail stores of such companies which provide them with improved customer value. Debenhams Plc should develop a proper communication channel using which they can send discount vouchers, greeting cards, and the list of new fashion products and service to their customers. Use of technology is one of the main features of modern customer relationship management. Debenhams Plc needs to make a more effective use of latest technology, such as, MIS-based CRM software to deal with customers’ requests, as well as to reach large audiences and keep them aware of all types of developments. MIS-based CRM software is one of those IT-based systems, which helps companies improve their key business processes along with bringing improvements to the customer service. Improvement in the customer service plays a significant role in improving the level of customer satisfaction. Although technology and customer service are two separate things but they have a direct relationship with each other in today’s world of competition. Using technology and customer service in accord with each other will really help Debenhams Plc in improving its customer satisfaction level. As Lucey (2005, p. 4) states, “the processing of data into information and communicating the resulting information to the user are the very essence of an MIS”. MIS-based CRM software is likely to facilitate the customer service department in proper management of information related to the key customers of the company. The key tasks of MIS-based CRM software include management of business and customer related information, proper documentation of the collected information, and assisting concerned people in the processing of information. Such software products are present in the market that expedite the response time of the customer service representatives. Customers usually do not like to wait for long to get the replies for their queries. They want quick replies from the company representatives. This IT based technology will help customer service representatives of Debenhams Plc to recognize the customers and give instant response to the customers. If we talk about the changes with respect to marketplace, we can say that Debenhams Plc is aware of the importance of global marketing that has arisen in the last coupe of decades. As Debenhams Plc has their franchises in 65 different countries, they know the value of global marketing to reach global customers. As stated earlier, today one of the main features of customer relationship management is the effective use of technology. Debenhams Plc needs to make the most efficient use of technology to advertise its new fashion products in accordance with the cultural values of different societies. As Miller (2012) states, “empowerment marketing should be at the heart of your CRM strategy”. For example, the commercials that Debenhams Plc makes for the Middle Eastern countries should be different from the commercials that they make for European and American countries. This is a very good and effective strategy related to modern customer relationship management practices as it makes customers feel valued and respected by the company. CRM helps a business provide better services to customers which results in increasing the revenue for the company (Roy 2013). Respect for all cultures of the world is the core essence of modern CRM practices. Moreover, when we talk about the retail industry, this aspect even holds more importance as the progress of this industry is related directly with the feelings and perceptions of the customers regarding the respect for their cultural values. For example, clothing of all cultures is different from almost every other culture. Therefore, a retailer should have an idea of what to place in the store for sale. Good customer service plays an essential role in the success of any retail company. In the present world, companies give great significance to improve the level of customer service for the customers because it provides many substantial benefits to the companies. It not only helps them in retaining existing customers but also helps in generate high levels of sales. Many retail companies use latest technologies and modern CRM aspects to improve customer service. Customer service representatives of retail companies store information into their computer systems using MIS-based customer relationship management software and make effective use of that information to improve customer value and shopping experience for customers. Maintaining good public relations is another way to improve customer value. Debenhams Plc emphasizes on establishing relationships with new customers and also takes effective measures to maintain those relationships. Debenhams Plc informs the customers about new products and services through the company’s website, newsletters, online editorials, and personal contacts. Newsletters and online editorials play a significant role in creating awareness among people about a company’s products. Along with editorials and newsletters, social networking websites can also play a considerable role in creating awareness among the people. Debenhams Plc should motivate its employees to maintain good working relationships with the customers in order to increase company’s sales and gain customer value. Debenhams Plc can also use sales promotion to increase the sales of the company by offering valuable benefits to the customers. As King (2010) states, “sales promotion can be targeted at the wholesaler, retailer or even at times the end customer”. Some companies make use of online loyalty schemes and incentive rewards to attract customers. An effective sales promotion technique is one that solves the customers’ budget problems by acknowledging the budget constraints and offering discounts (Edelman n.d.). Some of the most popular sales promotion techniques that Debenhams Plc can use include customer loyalty cards, money off coupons, gifts, and discount vouchers. These were some of the main ways using which Debenhams Plc can implement aspects of best practice CRM in order to build relevant engagement platforms with their customers and deliver a memorable customer experience. Although Debenhams Plc is currently using many of these features, but the company needs to modernize the use of CRM in order to achieve more benefits and regain its top slot in the UK’s retail industry. 3. Conclusion and Recommendations 3.1 Conclusion Summing it up, customer value is an intangible benefit that a customer gets from a product relative to the buying cost of the product. As Leverkuhn (2012) states, “businesses of all sizes use customer value as part of a greater analysis to determine how well they are supplying their customer base”. Companies make use of a wide range of communication and marketing tools to create awareness about their products and services, as well as to create customer value. In case of Debenhams Plc, the company’s management has implemented significant measures to improve the level of customer satisfaction and regain its position in the market which has been disturbed a little due to entry of new retailers in the market. However, some more modern CRM aspects, such as, use of MIS-based CRM software, improved public relations, improved after-sales service, and direct marketing need to be used in order to increase the customer value by delivering a memorable shopping experience to the customers. 3.2 Recommendations Some recommendations for the management of Debenhams Plc include: The company should provide highest quality products and wedding services to new and existing customers in order to remain competitive and gain the top position in the UK’s retail industry. Welcoming expressions attract customers, whereas display of arrogant behaviors adversely affects the customer base. Therefore, Debenhams Plc should hire and train the customer service employees in accord with the principles of CRM. The company should enhance its use of direct marketing because direct marketing inject value in the minds of customers which results in retaining the customers. They send direct emails to customers to know their feedback about the use of the company’s products and services. This will help the company regain its position in the market. One of the main features of CRM is the effective use of technology. Debenhams Plc should use technology to advertise its new products and services in the market. Debenhams Plc should also maintain good public relations in order to gain customer value. This will helps the company establish healthy customer relationships, as well as positive company image. 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