case study in Customer Relationship Management

Answer the following questions applying the knowledge learned from Chapter 9 –
Customer Relationship Management Q. Read the case study on Tesco.com (Case Study 9.1, see below). Using what you have learnt in
Chapter 9 about CRM and E-CRM, answer the following questions regarding the case. a) What is Tesco and what does it sell? Offline and online. 1 Marks
b) Summarize using bullet points how Tesco making use of the online channel? Include the
different mediums they are using and what they do on each? 2 Marksc) What are the specific activities/actions/tools they are using for E-CRM? 2 Marks d) Suggest ways in which Tecso can further improve and develop its CRM strategy online? (Please
think about suitable ones for the company and don’t just state randomly. Give reasons why it
make sense to use your suggestions.) 3 Marks Minimum Word count = 200 per question. Note i attach the slides for this chapter and the case study Thanks
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Slide 9.1
Chapter 9
Customer Relationship
Management
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.2
Customer Relationship Management
• CRM
•
An approach to building and sustaining long-term business with
customers
• Application of technology to achieve CRM is key element of
e-business
• Retaining customers online is much more profitable than
offline as it costs less and less to service them
• Customer Life Cycle
•
Select, Acquire, Retain, Extend
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.3
Figure 9.1
The four classic marketing activities of customer relationship management
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.4
CRM and CLC
1. Customer Selection
Defining types of customers that a company will market to.
Identify different groups, develop offerings.
2. Customer Acquisition
Marketing activities intended to form relationship while
minimizing acquisition costs and targeting high value customers
3. Customer Retention
Marketing activities to keep existing customers. Identify relevant
offerings based on individual needs
4. Customer Extension
Increasing depth or range of products that a customer
purchases from a company – ‘customer development’
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.5
CRM and CLC
Customer Extension Techniques:
•
•
Re-sell
Sell similar products to existing customers
•
Cross-sell
Sell additional products closely related to original product.
•
Up-sell
Selling more expensive.
•
Reactivation
Customer who have lapsed are encouraged to purchase again.
•
Referrals
Generating sales from recommendations from existing customers
Important to remember that customers view relationship with
companies as an exchange relationship and not as one motivated by
loyalty, commitment or share values.
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.6
Marketing applications of CRM
• A CRM system supports the following marketing
applications:
–
–
–
Sales force automation (SFA). Sales representatives are
supported in their account management through tools to
arrange and record customer visits.
Customer service management. Representatives in
contact centres respond to customer requests for
information by using an intranet to access databases
containing information on the customer, products and
previous queries.
Managing the sales process. This can be achieved
through e-commerce sites, or in a B2B context by
supporting sales representatives by recording the sales
process (SFA).
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.7
Marketing applications of CRM
(Continued)
? Campaign management. Managing ad, direct
mail, email and other campaigns.
? Analysis. Through technologies such as data
warehouses and approaches such as data
mining, which are explained further later in the
chapter, customers characteristics, their
purchase behaviour and campaigns can be
analysed in order to optimise the marketing mix.
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.8
E-CRM – A Definition
• E-CRM is:
• Applying…
Internet and other digital technology…
(web, e-mail, wireless, iTV, databases)
• to…
acquire and retain customers
(through a multi-channel buying process
and customer lifecycle)
• by…
improving customer knowledge, targeting,
service delivery and satisfaction
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.9
E-CRM
Digital marketing activities that fall under e-CRM:
Using digital communications technologies to maximize sales to
existing customers and encourage continued usage of online services
Integrated with CRM
Complete customer culture – i.e. not just adoption of technology but
using it to improve CRM
Customer Centric Marketing
•
•
•
•
•
•
•
Based on customer behavior
Seeks to fulfill the needs and wants of each individual customer
One to one / Reverse marketing
Sense and Respond communication
•
•
Delivering timely, relevant communications to customers as part of a contact
strategy based on assessment of their position in the customer life cycle and
monitoring specific interactions with a company’s website
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.10
Benefits of E-CRM
•
Targeting more cost-effectively
Traditional vs. E-CRM
•
Achieve mass customization of marketing messages
Tailored emails
Micro segments
•
Increase depth, breadth and nature of relationship
e.g. Frequency of contact, mode of contact
•
A learning relationship can be achieved using different tools
throughout the customer life cycle
Through feedback, search behavior, emails, etc
•
Lower Cost
Cheaper than offline
Fewer mail-outs
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.11
Customer Engagement Strategy
•
•
•
Repeated interactions that strengthen the emotional, psychological or
physical investment a customer has in a brand
Level of involvement, interaction, intimacy and influence an individual has
with a brand over time
Permission Marketing
•
•
Customer agree to be involved in an organizations marketing activities.
Usually as a result of an incentive.
Interruption Marketing
•
•
Communication that disrupts customers activities
Opt – in
•
•
Proactively agree to receive items of promotion
Opt – out
•
•
Decline to receive
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.12
•
Permission Marketing Acquisition and
Retention
Steps:
1.
2.
3.
4.
5.
Offer incentive to prospect
Using attention given to teach consumer about the product or
service
Reinforce incentive to guarantee prospect maintains the permission
Offer additional incentive to get more permission
Overtime use permission to change consumer behavior towards
profits.
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.13
Customer Profiling
•
•
Information that can be used to segment a customer. E.g. interests,
demographics, role in buying decision
Should look for a qualified lead:
Contact information for a customer and an indication for his/her
propensity to purchase different product.
Help us decided whether customer is a good prospect who should be
targeted for further communication.
To get this information from customers need to give them some
incentive, establish trust and demonstrated credibility
• Build one-one relationship with customers:
1. Customer Identification
2. Customer Differentiation
3. Customer Interactions
4. Customization
•
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.14
Conversion Marketing
Use marketing communication to maximize conversion of
•
•
•
potential customers to actual customers and
Existing customers to repeat customers
In online terms, how effective marketing is to converting
•
•
•
•
•
•
•
Web browsers or offline audience to site visitors
Site visitors to engaged site visitors ( stay on site and progress
beyond home page)
Engaged site visitors to prospects (profiled )
Prospects to customers
Customers to repeat customers
Note: offer phone, live chat or email contact in online channel to
add in human element.
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.15
The Online Buying Process
•
•
•
Companies should use integrated communications
strategies to support customers at each stage of the buying
process both using online and offline media
Need to understand how customers use the new media in
their purchase decision and at each stage of the buying
process.
Customer should be supported in changing from one
channel to another (mixed-mode buying).
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.16
A summary of how the Internet can impact on the buying process for a
new purchaser
Figure 9.4
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.17
Searching behavior Types of web users
Five types of web users:
1. Directed information seekers
Will be looking for product, market, leisure information.
Experienced in using search engines and directories
2. Undirected information seeker
‘Surfers’ – who browse and change sites by following hyper links.
Maybe new users, click on banner advertisements.
3. Directed buyer
Are online to buy specific products
Intermediary/broker sites become important to this type where they can
compare products and prices.
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.18
Searching behavior Types of web users
4. Bargain Hunter
Want to use offers available from sales promotions. (free samples, prizes
5. Entertainment Seekers
Interact with web from enjoyment through entering contests
These different types of behavior could be exhibited by the same
person in different sessions online
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.19
•
•
•
•
•
Difference between B2C and B2B buyer
behavior
Market Structure
Nature of buying unit
Type of purchase
Type of buying decision
Communication Difference
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.20
Net Promoter Score (NPS)
Measure of number of advocates a company/website has
who recommend it compared to number of detractors
“Would you recommend us?”
Important for CRM :
•
•
•
•
•
Promoters, passives and detractors.
•
•
•
as recommendations help acquire new customers
is a measure of customer satisfaction which is important for
retention
E.g. Dell Average consumer worth 210$, Detractor Cost 57$,
Promoter Generate 328 $ (calculated as NPV for 5 Year Projection)
Determine root cause .
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.21
A model of the relationship between different aspects of trust and
consumer response based on the categories of Bart et al. (2005)
Figure 9.5
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.22
•
•
•
•
•
Manage NPS
Facilitating Online Advocacy (promotion)
Page template contains ‘forward/recommend to a friend’
option
Email template contains ‘forward/recommend to a friend’
option
Facilitate customer feedback through structured program
of emailing customers for their opinions.
Showcase positive experience. E.g. ratings, comments
Involve customers in shaping your web services and core
product offerings.
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.23
•
•
•
•
Manage NPS
Manage online detractors
Use online reputation management tools for notification of
negative and positive comments
Develop a process and identify resource for rapidly
responding to negative comments using natural and open
approach.
Assess and manage the influence of negative comments
within natural listings of search engines
Practice fundamental marketing principles of listening to
customers comments about product and services and aim
to rectify them to win back the situation.
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.24
Customer Acquisition Management
Techniques used to gain/acquire new prospects and
customers
In online context means
•
•
Use website to acquire new customers for company as qualified
leads OR,
Encourage offline customers to migrate online for purchase and
service.
Offline Marketing Communications
•
•
Traditional techniques such as print and tv advertising use to
generate website traffic.
Online marketing communication
•
•
Internet-based techniques used to generate website traffic.
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.25
Characteristics of Interactive Marketing
Communications
1. From Push to Pull
Traditional media is push media
?
?
Information is unidirectional, from company to customer
Web is pull media
?
?
?
Consumer proactively seeks information
Online pull means less control of marketers than in traditional push
(defined audience)
Implications/Suggestions:
1. Provide stimuli to encourage visits on site
2. Ensure site is optimized for search engines
3. Capture customers email addresses so that opt-in email can be used to push
relevant and timely messages to customers.
2. From Monologue to dialogue
?
?
Two way interaction with customer
‘Sense and respond’
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.26
Characteristics of Interactive Marketing
Communications
3. From one-to-many to one-to-some and one-to-one
?
?
?
One-to-many – traditional media sending same message to all segments
One-to-some – reaching niche or micro segment possible with new media
One-to-one – personalized messages per customers
4. From one-to-many to many-to-many communications
?
?
New media enables many-to-many communications
Customers can interact with other customers via your website or in
independent communities.
5. From ‘lean-back’ to ‘lean-forward’
?
?
Lean-forward media – have visitors undivided attention on websites.
Customer wants to be in control and experience flow and responsiveness to
their needs. First impressions are important. (digital media)
Lean-back – viewers/audience not necessarily watching (traditional
media)
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.27
Characteristics of Interactive Marketing
Communications
6. Medium changes nature of standard marketing
communications
Internet is also used for one-to-many advertising.
Detailed information the user is seeking
Website itself is considered as advertising (or mix of advertising,
direct selling and engaging visitor)
Different from traditional
?
?
?
?
?
?
?
?
Communication style
Immediate or synchronous
Asynchronous
Social presence (sociable, warm, personal)
Consumer controls contact
Consumer controls of content (selection, personalization)
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.28
Characteristics of Interactive Marketing
Communications
7. Increase in communications intermediaries
Many more intermediaries through which to promote as opposed
to traditional media
8. Integration remains important
Combine and integrate new and traditional media according to
strengths.
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.29
Social Media and Social CRM strategy
• Social Media Marketing is a category of e-marketing which involves
encouraging customer communications on a company’s own site, or
social presences such as Facebook or Twitter or in specialists publisher
sites, blogs and forums.
• Important to start and participate in customer conversations. Related
to products, promotions or customer service aimed at learning more
about customers.
• Social CRM – process of managing customer to customer conversations
to engage existing customers, prospects and other stakeholders with a
brand and so enhance CRM.
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.30
Social Media and Social CRM strategy
• Scope of Social CRM in the six business application areas:
• Marketing – monitoring, analysis and response of customer
conversations through social listening tools
• Sales – understanding where prospects are discussing selection of
products and services offered by you and competitors in order to
influence sales and generate leads through conversations
• Service and Support – customer self-help through forums provided
by company and neutral sites
• Innovation – using conversations to foster new product development
or enhance online offerings
• Collaboration – digital business collaboration within an organization
through intranet and other software tools to encourage all forms of
collaboration
• Customer experience – to enhance customer experience and add
value to brand.
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.31
Social Media and Social CRM strategy
• Community – a customer to customer interaction delivered
via email groups, web-based discussion forums or chats
• Types of communities for B2B are based on:
• Purpose – people who are going through the same
process to achieve a particular objective.
• Position – communities set up specifically for people who
are in certain circumstances.
• Interest – for people who share an interest or passion
• Profession – for companies promoting B2B services
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.32
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.33
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.34
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012
Slide 9.35
David Chaffey, E-Business & E-Commerce Management, 5th Edition, © Marketing Insights Limited 2012

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