The influence of customer relationship marketing on customer satisfaction in the food retail sector in the UK TESCO

The influence of customer relationship
marketing on customer satisfaction in
the food retail sector in the UK
TESCO
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TABLE OF CONTENTS
ABSTRACT....................................................................................................................................3
CHAPTER 1: INTRODUCTION....................................................................................................4
1.1 Aim........................................................................................................................................4
1.2 Objectives..............................................................................................................................4
1.3 Research questions.................................................................................................................4
1.4 Background............................................................................................................................4
1.5 Problem statement.................................................................................................................5
1.6 Rationale................................................................................................................................5
1.7 Significance...........................................................................................................................6
CHAPTER 2: LITERATURE REVIEW.........................................................................................6
Theme 1: Concept of Relationship Marketing.............................................................................6
Theme 2: Relationship marketing on customer satisfaction........................................................9
Theme 3: Role of different approaches of relationship marketing on consumers of UK food
retail industry.............................................................................................................................11
CHAPTER 3: RESEARCH METHODOLOGY...........................................................................13
3.1 Research type.......................................................................................................................14
3.2 Research approach...............................................................................................................14
3.3 Design..................................................................................................................................15
3.4 Data collection.....................................................................................................................15
3.5 Data analysis........................................................................................................................16
3.6 Participants and sampling....................................................................................................17
3.7 Ethical consideration...........................................................................................................17
3.8 Reflexive analysis and credibility........................................................................................18
CHAPTER 4: RESULT.................................................................................................................18
CHAPTER 5: DISCUSSION........................................................................................................29
CHAPTER 6: CONCLUSION AND LIMITATION....................................................................32
REFERENCES..............................................................................................................................36
APPENDIX....................................................................................................................................40
Questionnaire.............................................................................................................................40
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ABSTRACT
Aim: This study aims at analysing the impact of customer relation marketing on satisfaction level
of customers in UK food retail industry.
Purpose: The purpose of this study is to highlight the significance of CRM in sustainable
performance. It also evaluates the role and necessity of customer satisfaction in food retail
industry.
Methods: For this purpose, this project report uses qualitative research methods and primary data
collection. For data collection a questionnaire has been used with sample population of 30
executives of Tesco.
Findings: From the results and discussions, it has been identified that for sustaining in rapidly
changing competitive global environment firms need to adopt good CRM practices. It is also
found that CRM enhances customer satisfaction to great extent and thus contribute greatly in
firm performance.
Conclusion: It can be concluded that effective CRM strategies must be incorporated in practices
by food retailers so that they can have long and healthy relationship and can withstand
contemporary business threats.
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CHAPTER 1: INTRODUCTION
1.1 Aim
The aim of this project is to evaluate the influence of customer relationship marketing on
customer satisfaction in food retail sector in UK: A case study analysis of Tesco.
1.2 Objectives
 To understand the concept of relationship marketing.
 To explore the impact of relationship marketing on consumer satisfaction.
 To evaluate role of different approaches of relationship marketing on consumers of UK
food retail industry.
1.3 Research questions
 What is meaning of relationship marketing?
 How relationship marketing tactics affect customer satisfaction?
 What is the impact of relationship marketing on growth of food retail industry
consumers?
1.4 Background
Customer relationship marketing, also known as CRM is well known technique which
emphasis on organisational growth using customer loyalty and relationship. It integrates the
approaches such as customer data analysis, feedback, customer oriented marketing strategies and
brand awareness programs (Karyose, Astuti and Ferdiansjah, 2017). Instead of using strategies to
only focus on number of sales organisations are paying more attention to build long term
relationship with consumers so that a great level of consumer satisfaction and retention can be
achieved. Industries such as food retail are experiencing high level of competitive and
substitution threats. The price wars between online retails is making it easy to achieve new sales
records but also inducing surprising shifts in customer retention towards brand. Thus for long
term success it has become important for the food retailers to adopt approaches which can help
them in retaining their valuable customers for long term.
Contrary to traditional marketing approaches organisations are now using relationship
marketing so that customer satisfaction can be delivered and their trust and dependency on brand
can be maintained. Organisations can attempt long term and sustainable growth only when their
customers are provided with satisfactory services (Panjaitan and Djunaedi, 2017). It can be very
challenging for the organisations to manage because of dynamic and complex nature of customer
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buying behaviour and perception towards brand. However modern food retailers are adopting
various practices such as improved feedback mechanism, transparent and quick communication
networks, loyalty rewards to enhance their relationship with targeted customers.
1.5 Problem statement
With modern technological solutions such as online payment gateways and online
shopping, improved supply chain networks organisations are facing new challenges. The food
retail service providers are constantly in pressure of dealing with immense competition and
pricing wars (Girsang, Sumiati and Djawahir, 2021). Thus to retain the success food retailers
have found it necessary to include practices which can bound their customers with brand for long
term without getting influenced by other competitors or distractions from the rivalries. However,
consumer behaviour is very unpredictable and thus to encourage customer satisfaction by
traditional marketing methods.
Thus food retail sectors must explore the scope and method of relationship marketing so
that they can improve consumer participation and interaction with the brand and their satisfaction
could lead to better performance in industry. It has been also observed that for food retailers
meeting customer expectations is also a crucial issue which demands for great effort (Javed and
Cheema, 2017). Traditional marketing concepts cannot help such organisations like Tesco who
need more interaction and involvement of customers to understand their needs and expectations.
However, the resource limitations, lack of appropriate business strategy in this context and
understanding imposes a problem in encouraging optimum utilisation of relationship marketing
for consumer satisfaction.
1.6 Rationale
Food retail sector industries particularly those who are operating internationally used to
face number of challenges in operations and strategical aspect. Their online presence in the
market makes them more vulnerable to price wars between their competitors and high forces of
rivals and threats of new entrants (Santouridis and Veraki, 2017). Thus to improve service
quality for different consumer segments and countries it is necessary that customer choices must
be predicted and evaluated. The strong relationship with customers will not only improve service
quality but will also make customers highly satisfied with the services. This will in turn helps in
boosting the growth of organisation. Thus exploration of relationship marketing and its impact
upon consumer satisfaction through this research will benefit food retailers. Research outcomes
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will also be valuable for other industry players who are facing competitive threats so that they
can improve their customer network for encouraging organisational growth (Karyose, Astuti and
Ferdiansjah, 2017).
Businesses can get benefit from this research by understanding different ways to reach
out their customers and to meet their expectations. This study will also be helpful for other
research scholars who aims at conducting detailed investigation on changing consumer
behaviour dynamics. They can take this study as basis for their further research related to
customer behaviour or relationship marketing approaches (Maggon and Chaudhry, 2018). It is
very important for the entrepreneurs to understand and explore this topic so that they can reach
new heights of success by integrating relationship marketing concepts into practice. It can help
them achieve their business and marketing goals with sustainable performance.
1.7 Significance
CRM helps in improving experience and interaction of customers so that brand loyalty can
be fostered at core of marketing efforts. Thus it is very crucial for the organisational growth that
companies must build a long term and productive relationship with their consumers. This can be
achieved only by means of incorporating more interactive and transparent communication
process. With globalisation and plenty of international brands there are vast range of choices
available for customers in food retail sector. Thus to sustain the high profitability and growth it
becomes a foremost priority for the organisations to understand the impact of CRM (Panjaitan
and Djunaedi, 2017). The failure to do so can result in poor customer retention and a direct
impact on performance of companies. It is highly crucial for the organisations to identify the
ways to predict customer behaviour and their expectations so that services can be improved and
competitive benefits can be gained. CRM approaches has significant impact on purchasing
decisions of customers and brand preferences of buyers (Ramadonna, Nasf and Aziz, 2019).
Thus these approaches must be highly efficient and tailored as per organisational needs and
client preferences.
CHAPTER 2: LITERATURE REVIEW
Theme 1: Concept of Relationship Marketing
Relationship marketing revolves around the prospect of establishing the profitable
standards with regard to customers that are approaching organisation. According to Hoque and
et.al (2017, September), there is a prominence of maintaining particular interaction with
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customers that would derive a good amount of customer base. For this, various organisations
take up aspect as well as strategies in order to derive the conditions that would bring about a
good customer interaction. Relationship marketing is one of the traditional methods of marketing
where it is incorporated in the organisation to retain customers. In this prospect organisation
works in the prospect of satisfying needs of customers that would bring about a proper
interaction in the midst of organisational policies. The organisation will therefore be emphasized
upon how far these needs will have to be gratified and therefore a particular research regarding
the customer choices is made. It is one of the important factors to attain customer relationship
and to build in the right amount of customer support system.
According to Lin and et.al (2018), there are certain customised marketing strategies that
are prevailing in the present industries and therefore marketing programs will have to be
designed in such a way that they attend relationship marketing as one of the most spectacular
entity such that a proper communication can be derived. Communication is the root cause of
every success as well as the growth of the organisation and there for every individual in the
organisation usually work in accordance with the customer prominence in this regard the
organisations would first to a customer communication channel which is one of the important
factor of consideration. This channel will help organisations to choose bass and methodologies
that would bring them close to their customers.
Retailing industry or the other most prominent industries that are existing in a present
scenario will try to equip the formulations that are likely to be adhered by the organisation. The
relationship marketing plays a major role in maintaining the long-term retention of the
organisation. This is possible with a thorough communication which is being maintained a midst
of customers as well as their gratifications. For a long-term brand identification most of the
organisations will derive strategies like that of providing offer as well as deriving feedback from
the customers such that they can return them at all levels. Relationship marketing will ensure to
maintain a good amount of customer base which is in return driving sales for the organisation.
When the sales are of huge amount for the organisation than the revenue of the
organisation will probably be. According to Özsaçmacı & Dursun (2020), there are various
prominent factors that are following in regard to relationship marketing where a good amount of
relation with the customers will help them to maintain a pace with the organisation and that can
result in deriving strategies like that of pricing policies. When customer is more into maintaining
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a proper communication channel with the organisation then fluctuations in the pricing strategy
will not be an impact in their aspect.
The economic condition of the organisations will sometimes rise and fall and the
relationship marketing in this aspect will not let customers go in vain. Many of the organisations
will also attain competitive advantage by maintaining loyal customer base and that will also
reflect upon efficient service that will have to be given by the organisation. Proper feedback
channel is being arranged by the organisation such that the customer queries as well as the
interaction regarding the products will be carry forwarded. This is one of the important factors
while dealing with relationship management where the customer queries will have to be met.
Deriving the short term, middle term and long-term goals of the organisation this feedback is
essential and based on the customer feedback the organisation can develop strategies in
satisfying them on priority basis.
According to Hendriyani & Auliana (2018), an organisation when maintaining a good
relationship with its customers is already into competition and is the leading competitor.
Relationship marketing can also relate to the process of deriving strategies which are necessary
for the organisation to be incorporated. There are certain levels in relationship marketing and
every level is composed of the kind of strategies that are to be incorporated. Initial relationship
of the customers is as important as the deriving the standards of the organisation. This is because
in order to understand the customers as well as to replicate the choices of an organisation this
particular relationship will act as a strongest base. In order to get to know each other the initial
prominence is one of the crucial factor and that will develop a kind of intention in the midst of
customers. This is one of the important factor to be derived because the deep relationship can be
achieved from the initial criteria with which the organisations usually move ahead in terms of
maintaining proper communication with customers.
The relationship marketing will also pave way for committed partners to arise. This is one
of the important criteria for every organisation because the committed partners will take the
organisation to an entirely new level where it can make prosperous benefits. According to Gilboa
and et.al (2019), one may not be able to identify the standards of relationship marketing that is
brought about in the organisation act plays one of the impactful instance in the organisation. The
profitability is entirely dependent upon the kind of strategies that are being incorporated in the
organisation and that is when the company renders competitive spirit. Relationship marketing is
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