Impact of CRM on Business Performance

The assignment provides an in-depth analysis of customer relationship management (CRM) and its significance for business growth. It focuses on Tesco as a case study to illustrate how CRM can be used to improve practices, enhance consumer numbers, and increase sales revenues. The report also serves as a valuable resource for other scholars conducting research on CRM and retail organizations seeking to retain customers and perform well in the market.

RESEARCH OVERVIEW REPORT
BUSINESS MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
RESEARCH AIM............................................................................................................................1
Aim..............................................................................................................................................1
RESEARCH OBJECTIVES............................................................................................................1
Objectives....................................................................................................................................1
Research question........................................................................................................................2
RATIONALE OF THE STUDY.....................................................................................................2
SCOPE OF LITERATURE.............................................................................................................3
Customer relationship management............................................................................................3
Significance of CRM...................................................................................................................4
Factors that affect CRM practices...............................................................................................4
CONCLUSION................................................................................................................................5
Conclusion...................................................................................................................................5
Significance of the research........................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Customer relationship management (CRM) is considered as one of the essential approach
that support business unit in developing long term profitable relationship with the consumers.
Customers are the essential part of business, their retention help the organization in sustaining in
the market for longer duration (The Role of Customer Relationship Management System in
Performance of New Enterprise, 2012). It is the tool that supports entities in maximizing
interaction with potential buyers and understanding their needs and requirements. Accordingly,
company makes its strategies so that it can fulfil these needs of customers and can make them
loyal towards the brand.
Current study is based on Tesco plc, it is the multinational retail firm. It has earned the
position of grocery market leader in UK. Currently company has approx 6553 stores across the
world. Its main aim is to provide satisfactory quality products to consumers at affordable rates.
Present research will focus on importance of customer relationship management for the
organization (Customer relationship management: an introduction, 2016). Furthermore, it will
pay attention on factors that impact on CRM practices of the business unit. At the end of the
study suggestion will be give regarding CRM strategy so that Tesco can develop strong
relationship with the consumers and can enhance its profitability to great extent.
Report will have several chapters. It will include introduction part in which overview of
the project will be given. After that aim and objective will be framed and research questions
related to the topic will be formulated. Next part of the report would be literature review, in this
section review of earlier literatures will be done in order to develop understanding about the
customer relationship management and its significance for the business unit. At the end of the
report entire study will be summarized and valid conclusion will be drawn.
RESEARCH AIM
Aim
“To analyses importance of customer relationship management (CRM) for the organization: A
study on Tesco”
RESEARCH OBJECTIVES
Objectives
 To explain conceptual framework of customer relationship management.
 To identify significance of CRM for the growth of the company.
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 To explain factors that affect CRM practices of Tesco.
 To suggest CRM strategy for building strong relationship with consumers.
Research question
 Explain conceptual framework of customer relationship management?
 Why CRM is important for the growth of the company?
 What are the main factors that affect CRM practices of Tesco?
 What are the CRM strategy that can support in building strong relationship with
consumers?
RATIONALE OF THE STUDY
Tesco is the market leader in the retail industry, it has strong supermarket chain
worldwide. Recently Tesco has started selling food products as well. The main aim of the firm is
to develop strong relationship with consumers and enhance number of consumers of the firm. It
continuously works to increase satisfaction level of customers so that they be loyal towards the
brand and buy its products and services for the longer duration (Khodakarami and Chan, 2014).
Tesco provides facility of club card to its regular buyers, it provides benefit to clients to earn
profit from their shopping. Tesco has employed more than 500000 employees across the world
and currently company has 6351 stores. Main competitors of the cited firm are Asda, Sainsbury's
etc.
From last few decades sales volume and revenues of Tesco is getting down. It is because
company is unable to provide satisfactory services to the consumers thus, people are moving
towards other competitor brands. Employees of Tesco are not satisfied with the firm and they fail
to deal with consumers or resolve their quarries on time. That is the main reason that clients of
Tesco are moving towards other supermarket companies (Rushton, Croucher and Baker, 2014).
That is the main reason of conducting study that to identify the loop fall in CRM strategy of the
firm and define significance of the CRM practices for the business so that Tesco can grow well.
Furthermore, another reason of conducting this research is that there are many researchers that
have conducted many studies on the same topic in the past years. Thus, huge data are available
on the same topic. So it is easy for the scholar that to develop understanding about significant of
customer relationship management for business and its impact on business performance.
Maintaining and building relationship with consumers is the interesting area and scholar has
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experience about this field thus, scholar has chosen this topic for the investigation (Choudhury
and Harrigan, 2014).
SCOPE OF LITERATURE
Customer relationship management
As per the view of Zou and et.al, (2014) customer relationship management is considered
as management approach that supports business in interacting well with customers and retaining
potential buyers in the organization for longer duration. Each firm make its own CRM strategies
in order to build strong relationship with consumers and maintain this bonding. That supports the
firms in developing trust of users and making them positive towards the brand. Orenga-Roglá
and Chalmeta, (2016) stated that CRM is the technique of enhancing satisfaction level of
consumers and attract new buyers towards the entity. It is the tool that supports the corporations
in managing their sales and marketing activities well (Customer relationship management: an
introduction, 2016). This gives accurate details about level of satisfaction of consumers, number
of clients in the organization, meetings, conversion data of the company. CRM empowers the
management to make effective strategy in order to convert prospect buyers into the real
customers.
According to Pearlson, Saunders and Galletta, (2016) customer relationship management
is considered as complicated process, success of CRM practices is highly depended upon the
knowledge of marketing team and market condition. If employers are aware with the specific
needs of consumers then company can be able to offer them similar services and products that
supports in meeting with their expectation that build strong relationship with the consumers. If
people of the organization are able to resolve quarries of consumers on time then that enhance
loyalty of people and they give positive feedback to others about the firm. Payne and Frow,
(2014) argued that CRM is the process of improving customer services of the entity and selling
products of the business unit more effectively (The Role of Customer Relationship Management
System in Performance of New Enterprise, 2012). It is the approach that supports the individual
in identifying buying behaviour of individual and making necessary changes in the firm so that
entity can accomplish its objectives significantly.
Significance of CRM
As per the view of Hollebeek, Srivastava and Chen, (2016) customer relationship
management is the approach that adopts by most of the organization with the aim to improve
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relationship with the potential buyers of entity. It is the process that supports in gathering
necessary information about the needs of consumers and providing them products as per their
requirement. By this way company can become able to enhance satisfaction level of clients and
can retain them in the workplace for longer duration (Customer relationship management: an
introduction, 2016). The more firm make coordination with its buyers then more trust will be
build and consumers will have faith on the entity. This deeper relationship support the business
unit in making people loyal towards the firm and enhancing revenues of the business unit.
According to Khodakarami and Chan, (2014) CRM practices are essential for improving
customer services of the organization. It is the process that support the firm in treating each
client individually and understanding their specific needs. With the help of this tool entity try to
find out level of satisfaction of consumers and lacking points in the existing services of the firm.
Accordingly, entity make changes in its working process that supports in improving customers
services of the business and enhancing satisfaction level of clients as well. This aids the firm in
gaining competitive advantage and sustaining in the market for longer duration. Rushton,
Croucher and Baker, (2014) argued that CRM is not important for the growth of the firm because
if entity does not have high quality products then it can not be able to meet with the expectation
of the consumers. In such condition it gets failed to enhance relationship with consumers and
retaining them in the workplace for longer duration. There are many companies those which are
offering high quality services to the consumers. In such situation people move towards these
firms to get additional benefits (The Role of Customer Relationship Management System in
Performance of New Enterprise, 2012). Thus, CRM practices are unable to enhance revenues or
profitability of entity until it is offering unique services and benefits to the customers.
Factors that affect CRM practices
As per the view of Zou and et.al, (2014) there are various factors that impact on the CRM
practices of business unit. Many retail firms try to develop strong relationship with their
consumers so that they can understand their requirement and can provide them products and
services accordingly. But changing needs of consumers make it difficult for the firm to satisfy
each client. Each individual has different needs like some like to have quality products but other
like to get cheaper products. In such condition company may get failed to meet with the different
needs of consumers. Orenga-Roglá and Chalmeta, (2016) argued that skills of employees is
considered as one of the most important factor that impact on the customer relationship
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management practices of business unit. If employees are not satisfied with the firm then they do
not perform well in the market. That impact on the satisfaction level of consumers and if they are
dissatisfied then they move towards other firms (The Role of Customer Relationship
Management System in Performance of New Enterprise, 2012).
According to Hollebeek, Srivastava and Chen, (2016) communication is essential aspect
that impact on the CRM practices of the firm. Most of the companies interact with customers
through social networking sites. Face book, twitter, Instagram etc. are several sites that supports
in making connection with mass audience. On these sites firms take feedback of consumers and
try to identify their needs. Continuous and effective communication supports in developing
healthy relationship with them and making them loyal towards the brand. If entity fails to make
effective coordination with clients then it can demotivate people and they may move towards
other competitors.
CONCLUSION
Conclusion
From the above report it can be concluded that CRM is the most important function of
business unit that supports the firms in making connection with consumers and identifying their
needs and requirements. On the bases of demand of clients company can offer them satisfactory
product and services. This is the beneficial tool for the growth of business unit, it helps in
making positive changes in the corporation and improving operational efficiency of the entity. It
is the technique that supports business units in attracting new buyers and converting prospect
buyers into the real consumers. Satisfied consumers retain in the organization for longer duration
and they give positive feedback to others as well. By this way company can enhance its number
of consumers and increase its sales volume as well. That supports the firm in accomplishing its
goal and sustaining into the market for longer duration.
Significance of the research
The study would be worth taking for the Tesco because by this way entity would be able
to identify its loop fall in its CRM practices and it will be able to take necessary measures for
improving practices of CRM in the organization. By this way company would be able to enhance
its number of consumers and its sales revenues. Furthermore, this study will be worthwhile for
other scholars because by this way they will get a brief idea about the customer relationship
management and its importance for the growth of business unit. By this way they will be able to
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conduct the investigation on the same topic in the future. This report will be worth taking for
other retail organization, by this way they will be able to retain their consumers in the
corporation for longer duration and would be able to perform well in the market by satisfying
needs of buyers.
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REFERENCES
Books and Journals
Choudhury, M. M. and Harrigan, P., 2014. CRM to social CRM: the integration of new
technologies into customer relationship management. Journal of Strategic Marketing.
22(2). pp.149-176.
Hollebeek, L. D., Srivastava, R. K. and Chen, T., 2016. SD logic–informed customer
engagement: integrative framework, revised fundamental propositions, and application to
CRM.Journal of the Academy of Marketing Science. pp.1-25.
Khodakarami, F. and Chan, Y. E., 2014. Exploring the role of customer relationship
management (CRM) systems in customer knowledge creation. Information &
Management. 51(1). pp.27-42.
Orenga-Roglá, S. and Chalmeta, R., 2016. Social customer relationship management: taking
advantage of Web 2.0 and Big Data technologies. SpringerPlus. 5(1). pp.1462.
Payne, A. and Frow, P., 2014. Developing superior value propositions: a strategic marketing
imperative. Journal of Service Management. 25(2). pp.213-227.
Pearlson, K. E., Saunders, C. S. and Galletta, D. F., 2016.Managing and Using Information
Systems, Binder Ready Version: A Strategic Approach. John Wiley & Sons.
Rushton, A., Croucher, P. and Baker, P., 2014. The handbook of logistics and distribution
management: Understanding the supply chain. Kogan Page Publishers.
Zou, W. and et.al., 2014. Identifying the critical success factors for relationship management in
PPP projects. International Journal of Project Management. 32(2). pp.265-274.
Online
Customer relationship management: an introduction. 2016. [Online]. Available through
<http://shodhganga.inflibnet.ac.in/bitstream/10603/19040/9/09_chapter%201.pdf>
The Role of Customer Relationship Management System in Performance of New Enterprise.
2012. [Online]. Available through
<https://pdfs.semanticscholar.org/0248/f4be0ba8f3c1a104c1cde7eecd241cdf5607.pdf>
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