RETAIL MANAGEMENT Customer Relationship Management @ Big Bazaar & Reliance Mart 1

TABLE OF CONTENTS CHAPTER NO. Chapter 1 CHAPTER NAME Introduction Meaning of CRM Goal of CRM Evolution & growth of CRM O ptions for implementing CRM Various aspects of CRM PAGE NO. 1 Chapter 2 Research methodology Objective of research SUBMITTED BY: Deepak Majhi Nancy AritroMukherjee Raja Rowin Gunjan Parmar size M ukul Kindo Lalit Vijay Mishra Anuradha Anurag Singh Ritu Kumari 8 03 05 07 35 42 Chapter 3 Chapter 4 Chapter 5 Type of research Data collection technique Sampling procedures & sample Limitations of the research CRM @ Reliance Mart CRM @ Big Bazaar 63 69 77 Customers opinion about CRM @ Reliance Mart & Big Bazaar Sales persons assistance Expectation fulfilment 2

 Discounts & failures Product arrangement Accessibility preference Chapter 6 Chap ter 7 Comparison between CRM @ Reliance Mart & Big Bazaar Conclusion & recommend ation CHAPTE INTRODUCTION it is not enough to have great qualities, we should also have the abilities to ma nage them. The same concept can also be applied in an organization. For e.g. a co mpany may produce a very high quality products but it wont be able to succeed if it fails to manage or satisfy their customers. According to Harward Business Rev iew an exceptionally satisfied customer is 6 times more likely to buy again as on e who is merely satisfied & only 5% increase in customer loyalty can boost profi t from 25% to 85%. Thus all these quotes & experts opinion highlights the importa nce of Customer Relationship Management. Customers are considered to be king of every business enterprise and loyal customers are the backbone of their business . So customer satisfaction is the primary motive of every business which can be attained through effective CRM (Customer Relationship Management) policy 3

1.1 Meaning of Customer Relationship Management (CRM): CRM is a comprehensive strategy & process of acquiring & retaining customers to create superior value for the company as well as the customers. It consists of t he processes a company uses to track and organize its contacts with its current and prospective customers. To support these processes, various CRM Software like SAP, ORACLE Sales force.com etc. are used. These software record and store info rmation about customers, various customer interactions, their problems etc which can be accessed by employees in different departments of the company. These inf ormation are used by the organization to make future plans that can satisfy the customer on a better way and retaining them for a longer period. 1.2 Goal of CRM: The goal of CRM is to provide improved services to the customers, and to use cus tomer contact information for targeted marketing. 1.3 Evaluation and growth of the CRM: CRM passes through three generations such as 1st generation in 1990, 2nd generat ion in 1996 and the 3rd generation in 2002. In 1st generation following systems were applied for CRM: Call centre managementIt is a web based CRM technology, the enables users browsing a companys web site to leave a phone number where company representative can call back with more information. Customer service supportIt is a part of a companys CRM department that interacts with a customer for their i mmediate benefits. 4

Sales force automationIt is software that automates business tasks like inventor y control, sales processing, customer interaction, etc-. Campaign managementIt i s a planning, executing, tracking and analyzing of direct marketing campaigns. In 2nd generation following improved systems were used for CRM: Integrated custom er facing front endIt is face to face interaction between the customers and sale s man. This system is used for marketing, sales and services. ERP integrationsER P stands for Enterprise Resource Planning. It is a business management system th at integrates all functions of the business. Customers analyticsIt comprises all the programming that analyzes data about an enterprises customers for business d ecision. Complete web integrationIt allows end users to have access the data fun ction of a serve hosted application through internet browser window. In 3rd gene ration the strategic CRM was followed and is continuingStrategic CRM updates and expands the original content and combines into one, convenient value that guide s users through the entire CRM implementation process, from strategic planning s oftware. Scope and goals of different generations:There is successful increment in the sc ope of CRM from 1st generation to 3rd generation. In 1st generation the scope co nsists of service function and sales function, in 2nd generation it includes ano ther function i.e. marketing function and in 3rd generation it includes entire f unction of the organization. 5

Goals of the CRM have also changed with better customer service from 1 st genera tion to 3rd generation. In 1st generation the goals were improve service operati on and increase sales efficiency, in 2nd generation reduce cost of interaction, improve customer experiences, and increasing the customer interaction; in 3rd ge neration cost reduction & revenue growth and competitive advantages. 1.4 Options for Implementing CRM: Increasing customer is not the ultimate objective of any organization but to ret ain customer and t build long term relationship with them is important. It is on ly through CRM that a prospect can be turn into customer and then finally into a client. But to achieve these any organization require proper implementation. Bu t at the same time CRM implementation is a challenging task because it ties toge ther many people, process, technologies within the organization which are separa te from each other. 6

1) IN HOUSE DEVELOPMENT- This means all the strategies, processes are developed and implemented within the organization. Advantage1. It is tailored made accordi ng to organization needs and structure thus is flexible as compared to others. 2 . Avoid dependency on others be it software or outsourcing. Disadvantage 1. It i s at the same time expensive 2. And comparatively takes longer time depending on the organisation. 1) BUY LICENSED CRM SOFTWARE- This is purchasing software and implementing in organization. Advantage1. Usually the maximum chance of success . 2. It just need to install and trained the workforce accordingly. Disadvantage 1. Again it is expensive because of many costs as license cost, renewal cost etc . associated with it. 2. Adding new software with change is a complex task. 1) OUTSOURCING A MANAGED SERVICE- This means hiring from outside. Advantage1. Mo st of the times lower cost. 2. Can adopt pay- as- you go approach with visible res ult. Disadvantage1. For any new requirement needs to contact the company and pay for the development. 2. Also there is a risk of losing CRM solution investment if outsourcing company goes out of business 7

Im STAGEWISE- In this CRM software is offered in different, independent modules, ac cording to specific department needs. Company buys sales automation software and contact management module from different providers. ENTERPRISE WISE CRM SOLUTIO N- This is composed of different modules from same providers; it is implemented as a whole by connecting different modules and existing database. 1.5 VARIOUS AS PECTS OF CRM CRM includes many aspects which relate directly to one another: Front office operations Direct interaction with customers, e.g. face to face mee tings, phone calls, e-mail, online services etc. Back office operations Operatio ns that ultimately affect the activities of the front office (e.g., billing, mai ntenance, planning, marketing, advertising, finance, manufacturing etc.) 8

CHAPTE RESEARCH METHODOLOGY Research is a systematic and objective investigation of a subject or a problem i n order to discover relevant information or principles. Research methodology is basically the method of how to collect data. The information regarding our resea rch are as follows: 2.1 Objective of our research: We wanted to understand as we ll as compare the customer relationship management followed by the Reliance Mart a nd Big Bazaar. 2.2 Type of research: Our research was empirical kind of research since we were dealing with the behavioral or qualitative aspect of customers and not the quant itative datas.here we were not supported with any exterenal data nor were adoptin g any secndory data to do our reaserch. 2.3 Data collection and analysis: collection, and analysis of the information ga thered by Interaction with employees and customers and also by observing activit ies of the employees. For better understanding of CRM in Big Bazaar and Reliance Mart we also had prepared a questionnaire for both customers and managers. 2.4 Sampling procedure and sample size:persons selected by us were randomely sel ected .and were from different age group,sex and educational backgroun .this div ersification was done to measure the different choice and preferences prevailing in customers demographycally different. 2.5 Limitations of our research: 1. Our sample size was composed of only 20 cust omers which is extremely small sample to represent entire population of customer s who visit in these two retail stores. 2. No demographical or psychographic dif ferences was considered before choosing the customers for interview purpose. 9

3. many of the policies which were not in force due to smaller market potential their description is also been provided by managers. CHAPTERCRM POLICY OF RELIANCE MART CRM policy of reliance mart can be divided into four major parts, namely; 1) Cus tomer loyalty 2) Customer retention 3) Customer communication 10

4) Customer gratification There exists a blanket customer relationship programme called the reliance one membership programme for the purpose of maintaining cus tomer loyalty. The membership programme is a very simple one where a willing cus tomer is required to fill a form giving personal information and he gets a tempo rary card which will be made permanent after six months. On each purchase of rs. 100 the customer gets one redeemable point on the production of card at billing counter. The collected points can be redeemed in form of discounts on future pu rchases on demand of the customer. The customers also get the opportunity of ava iling four different kinds of insurance on the payment of a nominal fee. For exa mple a customer can get an accidental death insurance of rs six lakhs on the pay ment of rs. 400 only. Other forms of insurances are disability, hospitalization and home insurances. The members of relianceone get the opportunity of taking pa rt and winning prizes by the way of lucky draws on regular intervals. Customer r etention policy implementation is at the zonal level. Generally each state is re garded as a zone and the offers and discounts in a zone are not available in oth er zones. Such policy helps reliance retail to understand and capture the local markets better. The products which show improvement due to offers and discounts on them are repeated with these offers again so as to retain the sales of the cu stomers who bought it the last time. Also such the days best offers are constant ly announced in the store making the regular customers aware about them. Maintai ning a good store ambiance is also a part of customer retention policy of relian ce retail. Clean and hygienic environment with properly and well spaced products along with a uniform color theme attracts the existing customers to the store a gain and again. A fast billing system and good and easy grievance handling syste m which can be accessed thru customer service desk and company website, ensures that customers feel satisfied with the store management. Less harassment to cust omers means better customer retention. Communication to existing customers takes the form of sms and e-mails, generally sent to reliance one members. They get i nformation about ongoing offers and also information and latest news about their nearest stores and the company in general. Another source of customer database is the information collected during the organizing of special events in the stor es. Customers participating in such events provide their contact information whi ch are also used in form of database for communication purposes. Thank you and f estive cards on special occasions are an innovative way of communicating with th e customers. Trained salespersons make customer gratification very easy. A simpl e thank you with a smile goes a long way for the store to keep the customers hap py. The special events organized by the stores across india are also a way to gr atify the customers by allowing them to play and win prizes. Gift vouchers and d iscount coupons are an attraction for the customers and give them the feel that the store cares about them and their money. Local customers many a times make li mited personal contacts with the store staff just like that made at a kirana sto re and help the store to some extent to maintain a relationship with the custome rs. 11

The implementation of the policies brings out certain limitations in them. Few m ajor ones are as follows The personal contact numbers of reliance one members ar e open to tele marketing calls from various marketers as they leak out of the re liance retails database, causing unnecessary harassment to customers. The custome r communication policy is less followed in small towns and cities and is more co ncentrated towards the metro cities. There is a common crm policy for both relia nce fresh and mart. This should not be the case as both the stores offer differe nt kinds of merchandize and generally attract different kinds of customers. Reli ance retail generally delays the processing of permanent membership cards to tho se customers who have not paid for such a card. Customers have been waiting for over three months for their card. Those who have paid the nominal fee of rs. 50 get their permanent card within 15 days but the rest who have optioned not to pa y the fees do not receive the card until too late. Unmanned billing counters cre ate long queues at the open counters. This creates impatiens in the customers as they expect faster billing at the stores and do not want to stand with too much of goods held in their hands while billing. CHAPTER 4 CRM @ BIG BAZAAR 12

Database is formed through the issue of future card and card is of three types s ilver card, gold card and sakthi card. Sakthi card is issued to ladies and this card provides, free sugar(1 kg) per month. Customer profitability analysis (CPA) is done on the basis of transactions made through the future cards. Platinum cu stomers (most profitable). Gold customers (profitable). Iron customers (low prof itability but desirable). Lead customers (unprofitable and undesirable). Differe ntiate customers in terms of: (1) their needs and (2) their value to company. In teract with individual customers to improve the knowledge about individual needs and to build stronger relationships. There are four type of analysis done for a nalysis of CRM Periodic Surveys: Its done on quarterly, its an overall survey don e by the future group authorities and CRM is a part of it. Customer Loss Rate : Mystery Shoppers: They pose as normal customers perform specific tasks such as pu rchasing a product, asking questions, registering complaints or behaving in a ce rtain way and then provide detailed reports or feedback about their experiences Monitor Competitive Performance Complaint Handling Procedures: Screening And Logging -The type of product or service; manufacturer/brand name; model name/number; date of purchase/contract; warranty expiration date; salesperson; cost of product/service; date problem occurred; an d a description of the problem is listed. This allows organization to exercise c ontrol, and assure proper follow-through. Investigating -- customer s explanation of a problem provides much information. Nevertheless, to assure they have all the information needed for a thorough review of the facts involved, by: Researching in-house records on the c ustomer; Requesting receipts, or other records; Inspecting the product, or servi ce performed; and Following-up with the customer for any necessary additional in formation. 13

 Acknowledging -- When Big Bazaar cannot resolve an issue immediately, it is important to let customer know that the matter is receiving attention. Custom er is given information about how long it will take to complete action on the co mplaint. If there is further delay, its made sure to advise customer why and when Big Bazaar expects to have an answer. Formulating A Solution -- solution is made to be consistent with established customer relations policy and important criteria are taken into account: Contrac tual and/or warranty obligations; The customer s expectations; expectations of t he customer; The cost/benefit of alternative solutions; The probability and cost of customer seeking redress in some other way; The comprehensiveness and fairne ss of solution; ability to perform the solution; and What to do if the customer rejects solution. Responding -- The response is made clear and appropriate. The customer must understand the response, and the response must address the issues raised in the customer s original complaint. An explanation of decision preserves the goo dwill of customer, even if the decision itself is adverse. Following-Up Customer is contacted following response to verify whether or not the matter has been resolved satisfactorily. If customer is unhappy with response, organization refers the matter to a third party dispute resolution mec hanism for assistance. Steps Involved in customer Satisfaction through Service: Seeing problems from the customers perspective Managing customers "moments of tr uth" Communicating effectively through better listening Analyzing how customer p erceptions are formed Managing anger and other service behaviors 14

 Dealing with long-term consequences of service breakdowns Negotiating solutions Generating an action plan for improved on-the-job effectiveness CUSTOMER COMMUNICATION: Future group maintains its records of customers by obser ving their purchasing habits & categories them into various groups like high rev enue, moderate revenue & low revenue customers. They communicate to the customer s through various medium like SMS,E-mail, Mobile vans, Print media etc.This is t he way to built a strong presence in the existing customers & prospective custom ers. Presently they are using oracle software to maintain database. Recently the y have tied up with California based firm GREENPLUM to provide new software for data warehousing. The company boasts strong share of its profits from top line c ustomers who provide them around 70% of their revenues in total. The company can said to be going on the famous management principle i.e. 80/20 PRINCIPLE which says that 20 percent of variables cause 80% effect. In big bazaar it can be rela ted to the fact that 20% of its top line customers provide 80% of its revenues i n a year. This is the reason why the retail giant is focusing strongly on custom er retention in order to boasts its sales numbers substantially. CUSTOMER GRATIFICATION is an important element of a sales process. Every company should survey their customers in order to find out the satisfaction level among the consumers. Big bazaar also conducts periodic surveys in order to ascertain the satisfaction level in their consumers. Various activities are done in order to enhance the shopping experience among buyers & various offers, discount coupo ns; exchange offers are initiated by the firm in order to develop a good satisfa ction level in their existing customers. Special coupons are given to customers who can be redeemed by the costumers in their future purchases from the store. CUSTOMER PERCIEVED VALUE (CPV) is calculated by the retail store in order to ass es the costs and benefits received & given to the buyers. The following are some key features of CPV 1. CPV is the difference between the prospective customers e valuation of all the benefits and all the costs of an offering and the perceived alternative. 2. Total customer value is the perceived monetary value of the bun dle of economic, functional & psychological benefits customers expect from a giv en market offering. 15

3. Total customer cost is the bundle of costs customers expect to incur in evalu ating, obtaining, using, disposing of the given market offering, including monet ary, time, energy & psychic costs. LOOPHOLES: The retail store has also various loopholes especially here at ranchi.The major drawback which was found out initi ally was lack of proper parking place but now it has been corrected to some exte nt. Secondly the store is very slow in execution of online orders which is given through company web portal FUTURE BAZAAR. To quote a few examples of late deliver y Mr. David Kerketta,a resident of lalpur-peace road purchased a furniture for R s 37000,the date of scheduled delivery was 15th of November,2008 but he received his order 37 days late. One more incident of such late delivery is MR Pradeep K umar, a resident of Upper Bazaar who purchased a dining table for Rs. 15000,but as usual he got his final delivery a whopping 65 days late than the scheduled da te of delivery. So these incidents speak a lot of inefficient delivery. The othe r drawbacks are inefficient billi.ng counters as they are not updated with the c urrent offers and schemes. Also the billing counters remains unmanned that add t o the problem of customers who needs to stand in long queue in order to get thei r purchases billed. The other problem is related to the slow processing of appli cations of membership cards like Shakti card, future cards etc.It takes around 3 0 days minimum to become a member of future card schemes. This is very slowly co nsidering the industry average of 15-20 days to process a card. Finally the cont act numbers of customers are open to the telemarketing personnel as they get the database from the future group through some sources or the other. 16

CHAPTE CUSTOMERS POINT OF VIEW 1) Sales Persons Assistance: This refers to the extent of help an individual gets from the sales person present in the store in choosing a particular product or in case of any query. There can be two instances i.e. inadequate help or excess help. Inadequate help is a very case because most of the time sales person is th ere to solve our queries. Instances of excess help can arise which makes the cus tomer feel that the person is interfering in his decision or pushing the product to him. 50% people preferred the sales person assistance of reliance mart and only 35% p referred Big Bazaar in this respect. 15% people were neutral that means they tho ught it to be the same in both the stores or they didnt need any such help from t he sales person. 2) Expectation Fulfilment: every customer has certain expectati ons when he visits a store. This expectation will vary from person to person. It can be getting a particular brand of product or particular quantity or variant of the product. 17

55% people felt that their expectations are more fulfilled at Big Bazaar while 4 5% preferred Reliance Mart. This may be because of greater product depth at Big Bazaar than in Reliance Mart. 3) Discounts & Offers: these are announced from ti me to time to lure customers to buy more. 18

60% people preferred the Discounts & Offers of Big Bazaar while only 40% preferr ed that of Reliance Mart. This may be because more people are aware of the disco unts offered by Big Bazaar due to their huge advertisements. 4) Product Arrangem ent: this basically means the sequence or order in which different varieties, br ands or segments of products are arranged so that customers feel at ease in sele cting the product of his/her choice. 55% people preferred the product arrangement of Reliance Mart while 45% preferre d that of Big Bazaar. This is because Big Bazaar has large space due to which pr oducts are more fragmented or scattered on the contrary Reliance Mart has smalle r space in which products are more logically arranged. Also it has more space be tween the shelves which provide ease of walking to customers and they think less space means less energy wastage. 5) Accessibility: it refers to the reach of th e store to the customers. 19

50% people preferred Big Bazaar, 39% Reliance Mart & 11% were neutral that means accessibility doesnt matter to them. Majority likes Big Bazaar because it is sit uated in the main city while Reliance Mart is located at a very posh area which is very far from the main city. 6) Preference: it refers to the preference of th e customer regarding making a choice between the two stores i.e. Big Bazaar & Re liance Mart. On the whole 65% people prefer shopping at Big Bazaar and 35% people preferred t o do shopping at Reliance Mart. This may be because of any of the above mentione d reasons. 20

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CHAPTE CONCLUSION Transformation by integrating customer facing front-end with back-end systems an d partners and suppliers. This will effectively help in generating better filter ed data source from feedbacks received. Also the feedbacks will be dealt with in a much more careful and professional way. Growth of CRM facilitated by growth o f IT. In this age of Information Technology an effective IT planning on the CRM can help the organization earn a lot of repute. New database solutions. This wil l help to filter and clean the raw data received from feedbacks more efficiently . 22

 Mutual benefit through CRM. The stores and their customers can mutually benefit through the application of CRM. So at this era of customers, the companies should project themselves as customer oriented as possible to help them benefit in a lo ng term survival plan. Effective segmentation of customers. With more and better quality of data, this can be done very easily. Enhancing the shopping solutions. This is the age of innovation. Especially in I ndian markets, low cost innovation is the ultimate tool to win the battle for th e companies. Thus, the companies need to be innovative with their ideas and alwa ys try to deliver the customer with some added value for their purchase. RECOMMENDATIONS Many CRM project "failures" are also related to data quality and availability. D ata cleaning is a major issue. If a company s CRM strategy is to track life-cycl e revenues, costs, margins, and interactions between individual customers, this must be reflected in all business processes. Data must be extracted from multipl e sources (e.g., departmental/divisional databases such as sales, manufacturing, supply chain, logistics, finance, service etc.), which requires an integrated, comprehensive system in place with well-defined structures and high data quality . Data from other systems can be transferred to CRM systems using appropriate in terfaces. Because of the company-wide size and scope of many CRM implementations , significant pre-planning is essential for smooth roll-out. This pre-planning i nvolves a technical evaluation of the data available and the technology employed in existing systems. This evaluation is critical to determine the level of effo rt needed to integrate this data. 23

Equally critical is the human aspect of the implementation. A successful impleme ntation requires an understanding of the expectations and needs of the stakehold ers involved. An executive sponsor should also be obtained to provide high-level management representation of the CRM project. An effective tool for identifying technical and human factors before beginning a CRM project is a pre-implementat ion checklist. A checklist can help ensure any potential problems are identified early in the process. 24