CUSTOMER RELATIONSHIP MANAGEMENT (CRM) IN MOBILE MARKETING: A CASE STUDY TESCO mBONUS
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Customer Relationship Management (CRM) In Mobile Marketing: A Case Study Tesco mBonus
Background
Introduction
Businesses operate in relationships and networks. One of the most important relationships among others is the one between the business and the customer. Customer relations has the fundamental role of acquiring new customers and keeping the existing ones. This is achieved through Customer Relationship Management (CRM). The relationship between a business and its customer is based on the business interest at the very basic level. Companies are obliged to create a lasting relationship with their customers beyond service or product delivery. Value addition has been transformed to encompass the fundamentals of relationships between the customer and the business (Bradley & Nigel, 2007). Most companies have pursued relationships that conceive cohesion beyond their business specialty to involve the customers and create a public image that resonates with the needs of the customers.
The market environment has generally transformed to be a customer-focused environment with companies being more concerned of the customers’ perceptions on them. To communicate the relationships, various advertisement channels and marketing strategies have been implemented. The traditional marketing strategies have coined a seamless transformation to accommodate the development of the customer relation approaches. However, challenges have been observed in the emerging marketing avenues. The volatility of marketing and the creative approaches has seen the emergence of various strategies such as mobile marketing. The need for customer relations management to be embedded within this marketing approach is immense considering the advantages of the avenues in spatial reach and instant communication. Mobile marketing appreciates the remote connection between companies and the customers. This connection regards a relationship that should be well managed in the context of the needs for fostered customer relationships.
This study is based on the realization of a curious absence of customer relation management in the mobile medium as expected (Bradley & Nigel, 2007). Companies in various marketing strategies have used the mobile medium. The use of the same for CRM is not well pronounced and has been ignored by many companies. The medium as earlier indicated has various advantages that can be effectively utilized for customer relations management. This study is focused on establishing a mobile Customer Relation Management framework in retailing. In addition, the study conceives an empirical approach through a single case study method.
Literature review
The retailing industry is a wide mass reach industry that has its economic advantages vested on the population reach, the product quality and price, and the customer relationship. The customer relationship in retailing has been observed to have the most compelling effect in gaining advantages through customer loyalty. Most retailing companies have pursued to develop cohesive relationships that make them have a competitive advantage over other market players (Belch, Belch & Michael, 2003). Consumer psychology principles indicate that preferences are conceived of perception. The customers’ perception on a product or a company determines their purchasing pattern. Preferences are subjects of the consumer perception through the relationship created by the product or direct influence from the company (Glazer & Rashi, 1991).
The retail industry is one of the industries that allow versatility and creative approaches towards the improvement of the market share. The industry is characterised by companies that focus on providing customer products. One of the main issues that are characteristic of the industry is its segmented nature. The retail industry consists of individually owned companies that have one outlet, nationally presented organizations that have numerous outlets within their countries, and multinationals which have outlets in many countries around the world as one of the segmentation criteria. The segmentation is not limited to the spatial distribution of the outlets but can also be observed in the specified product and service, brands and target market. The companies in the retail industry vary and their business functions are specific to the various segments (Belch, Belch & Michael, 2003). Customer relations management is applicable to large companies that are spatially distributed. These companies include banks, supermarket chains, communication companies, and manufacturers among other companies that target the common general populations.
Studies assessing the fundamental parameter of measurement that determines the success rate of retailing outlets have pointed fingers at customer reach, the product, the price and promotion. The findings are consistent with the 4Ps, which are price, promotion, product, and place (Bradley & Nigel, 2007). These fundamentals have been observed to have a determining influence on the competitive edge of a company in the business environment in the retailing industry. These factors are achievable through mobile reach. Mobile reach through instruments such as mobile phones are not restricted to the barriers of spatial coverage, therefore facilitating accessibility of the customer. The retail industry has achieved significant streamlines in price (Malhotra & Naresha, 2002). In addition, the retail industry is one of the industries that have exhausted a competitive advantage in pricing with the retailers pursuing cost effective strategies such as logistical cost management, bulk stocking, and supplier relationships with the pivotal aim of streamlining the cost of the product (Russell, Cristel, & Barbara, 2006). The adverse promotion strategies are evident on the space for a competitive advantage in the particular industry. Theoretically, mobile customer relation has the potential to foster customer loyalty (Cleland & Roland, 2006). These factors place the retailing industry as a strategic case study platform for the mobile CRM.
CRM finds its key theoretical basis from relationship marketing theories. The customer relations management emanates from the specific need of organizations to build a holistic approach towards profitability and enhanced revenue. CRM is based on the need of an organization to direct its resources in an integration of hardware, software, and applications towards knowing and understanding its customers. A company that understands and knows its customers allows for an objective communication and response approach to the customer-company interaction. Objective customer relations are achievable through appropriate information management systems. Companies are therefore employed to have accurate and relevant information on their customers to be able to achieve the desired standards of customer relations (Malhotra & Naresha, 2002). CRM has been identified to have important facets of relationship marketing such as customization, simplicity, and convenience in transaction completion. In the backdrop of crowded customer-focused economies and aggressive attempts by companies to capture the attention of the customer, these features create a customer perception that portrays time and money saving for better information access and special treatment.
According to the Mobile Marketing Association (MMA), mobile marketing is a marketing, advertisement, or sales promotion that is conducted over a mobile channel aimed at reaching the consumers (MMA, 2003). In the conventional environment, mobile marketing has taken the form of customer acquisition, customer relationship management, and sales driving. In customer acquisition, measures such as direct responses promotion have been employed. Customer relations management is new in the mobile marketing arena. In mobile CRM, the mobile application tools are used to build and improve relationships with the customers of the organization through brand awareness and communication (Russell, Cristel, & Barbara, 2006). These methods are employed to achieve customer loyalty, customer retention, and sale support. The mobile avenue has been used to enable payment and facilitate sales.
The mobile marketing avenue is currently adversely used in lotteries and competitions. The mobile platform has expanded in various technological avenues with projections made that the mobile channels has the potential to achieve self-sufficiency in commerce. The mobile channel presents convenience and time saving to both the company and the customer. The mobile technology platform has achieved significant strides in facilitating business processed. The use of the mobile as a medium for money transfer through information transfer has opened a myriad of facilities that enable bill payment and e-commerce. The platform has been used in e-purchasing through its communication abilities. The operations of these applications are aligned to the ability of the delivery end of the business. Companies that pursue mobile facilitation are required to employ apt compliancy within their internal systems. This has been eased by the transformation of the traditional business processes into technologically compliant frameworks.
The mobile CRM is based on the amalgamation of the traditional customer relationship management as conceived in the relationship marketing theories and the technological needs and specifications. Customer relationships occur in various stages. Companies are required to interact with customers at the various stages prescribed in the theoretical framework. The management of the relationships is guided by the nature of the relationship at its various stages. The customer relationship management outlines three critical states in a relationship. The stages are the initiation, maintenance, and termination states. The initiation stage defines the onset of the relationship whereby the initial contact between the company and the customer are realized. The maintenance stage defines an on-going relationship that needs nurturing. The termination stage is the phase of exit. Technology plays an important role in the initiation stage. Here, information development on the customer is based on many uncertainties. At the initiation stage, it is important for the marketing and the technology to be combined in a productive fashion.
Various studies have been conducted in relation to mobile marketing. The studies have primarily focused on mobile sales driving and customer acquisition. The studies have focused on e-commerce as an aspect of mobile sales with specific attention on mobile security, market acceptance of e-commerce and consistency of the e-commerce with the ordinary business processes. Studies in various industries have been conducted on mobile customer acquisition with specified focus on mobile advertisement, customer perception of mobile advertisement and the use of mobile platform in targeted advertising. The various literatures have failed to conceive what follows in relation to the management of the developed relationship. This study is driven by the acceptance of the fact that a relationship conceived through remote mobile applications requires a specified approach for management. In relation to this, the nature of mobile relationship is completely new. With relationships being an interactive phenomenon, the nature of the medium of relating dictates the management approach and graduation of the relationship to the next level. These issues hinge the advantages of mobile marketing.
The study adds to the body of knowledge the necessary information towards managing established mobile marketing strategies. Relationship marketing highlights that a broken relationship stands minimal chances of regain. This foundation emphasizes on the need for appropriate relationship maintenance approaches and a lasting relationship exit strategy (Young & Charles, 2005). Technological literatures have selfishly focused on the initial stages of mobile relationship management. This approach from the technological divide of the study has a particular focus on appropriate acquisition methodologies and information management. The studies have failed to address the issue from a business perceptive and create a holistic approach to CRM management that elaborates on the gradual transformation of the relations from its initial stage to the maintenance and ultimately the termination stage. The study will adopt to inquire on the customer relation management from a holistic view. The study will specifically focus on the mBonus Relationship Management strategy. The study will also focus on the integration of the Tesco club card as a CRM into the mobile platform through the mBonus.
Industry Background
In retail, the companies are obliged to a direct or indirect interaction with the consumers of their product or service. However, the customer relations have to be oriented in a manner that appreciates direct interaction between the consumer and the producer. This study focuses on Tesco, a supermarket chain. The supermarket chain industry is one that has arguably exhibited the most competition in customer reach and customer relationship development and management. Generally, the market environment and the competition level of supermarkets are high in the United Kingdom. The supermarket chains have exhibited adaptation to the enhanced competition with adoption of strategies such as online shopping, customer awards schemes, after sales service, and bonus schemes. These strategies have been employed to enhance customer loyalty.
Customer loyalty in the supermarket chain takes various forms. The customer loyalty programs can be categorised into financial, social, and structural bonds (Belch, Belch & Michael, 2003). These forms facilitate the differentiation among the player in the industry with respect to customer loyalty (Glazer & Rashi, 1991). The financial loyalty programs allows for financial incentives such as discounts. This is rated as the lowest level of customer loyalty in the industry. The social bonds is characterised by incentives such as personal gifts that are inclined towards learning about the customer. Structural bonds are the highest level of differentiation and loyalty. It includes the provision of value added services. The integration of these incentives in achieving customer loyalty and differentiation in the mobile customer relations management inspires the study.
Research aim
The study aims at assessing the application of Customer Relationship Management (CRM) in mobile marketing in the United Kingdom.
Research questions
The study poses two questions in assessing the application of Customer Relationship Management (CRM) in mobile marking in the United Kingdom. These questions are:
1. Does the mobile marketing align itself with the processes of customer relationship management as prescribed in the relationship marketing theory?
2. Does the mobile marketing achieve or have the potential to realize efficient customer relationship management based on the theoretical assessment parameter prescribed by the relationship marketing theory?
Objectives
The study has four objectives in assessing the application of Customer Relationship Management (CRM) in mobile marking in the United Kingdom. The objectives are:
1. To compare the mobile customer relationship management system in the Tesco mBonus system with the theoretical relationship marketing systems
2. To assess the efficiency of the Tesco mBonus system as a mobile customer relationship management based on the theoretical assessment parameter prescribed by the relationship marketing theory and empirically derivable parameters
3. To assess the effectiveness of the mobile customer relations management using Tesco mBonus system as a case study in achieving customer relationship throughout the various stages of CRM
4. To establish an informed position in relation to the implementation of the customer relationship management systems using the mobile platform
Research Methodology
Context
The study focuses on the Tesco club card integration into an mBonus system. The system is developed into three components: the operational, analytical and communication components. The operational component consists of the various applications that are to facilitate the customer relation functionalities. The operational component consists of the administration, the various shops or outlet management, databases, and server. These constituents are responsible for the technical operations that control the operations consistency with the requirement of the customer relationship management (Mobile Marketing Association, 2003). The operation has the website as a core component. The website facilitates the interaction between the customer and the operational components. The mobile website provides an avenue for accessibility of the website using the mobile phone. The SMS is the third variant for accessing the functionality. It uses the ordinary short message service offered by the mobile phone service providers and the mobile applications for smart phones constituting another variant for accessibility of the service.
The second component is the analytical component. The analytical component plays an intermediary role in analysing the data generated by the operational functionality and aligning them with the organizational customer relations management. The analytical component plays a significant role in ensuring that the Business Management Performance Systems are integrated in the mobile CRM (Mobile Marketing Association, 2003). The system mediates information from the brands, the user data, the shops, or outlets and the data from the operational components programmed in accordance with the mBonus provisions. The third component is the communication component. The communication component has the role of integrating and ensuring the consistency in communication and coordination of the various involved channels of the various data and functionalities. Tesco’s system is based on permission marketing whereby the consent of the customer is required prior to mobile advertisement as part of the CRM.
Case study assessment
The study will be based on a case study of the Tesco mBonus scheme as Customer Relationship Management (CRM). The study will involve the evaluation of the application of the mobile Customer Relationship Management applied in the mBonus scheme by the supermarket. The study will collect the information from the management of the customer relations of the company, the business management, users, and from a practical experience of the tool. The study will then relate the findings with the theoretical marketing relationship as established from the theoretical foundations of the management. The framework below founds the parameter of comparison. The framework is consistent with the requirement of efficient initial, maintenance and termination phases.
The framework above represents the appropriate CRM management framework from the traditional theory in relation to the fundamentals of the technological inspired approaches towards customer relations management. The framework will be the subject of the case study comparison with the relevant functional units interrogated for efficient applicability.
The technology divide of the framework focuses on the technology parameters that are necessary for the implementation of the mobile customer relation management. The server, the number, the campaign logic, the gateways and the message price will be the factors of inquiry. The study will not pursue the technical details of the various components but will inquire on the performance of the mentioned technological component in relation to the required functions of customer relation management. The marketing section is informed from the theoretical establishment of the customer relation management. The media mix relates to the various avenues through which the customers can be reached. The regulatory relates to the various policies, both organizational and national, that guide the customer relations operations. The customer database reflects on the various customers that are targeted and the specific information that guided the management process. The study will compare in details for the various stages of relationship management with the practical application of Tesco customer management systems. The information gathered will be guided by the theoretical guideline of the process.
Timescale
The process of the inquiry will take 10 weeks. The 10 weeks will involve various activities including the planning that has already commenced. The study will begin with a request for execution of the project through the submission of a proposal. The proposal provides the important framework that informs the department of the justification of the study, the methodology, and resources required. The gathering of the information required will follow the proposal. This process involves critically evaluating the requirements for conducting the study and the necessary information that will inform the execution of the processes involved in the study following the approval. Literature review on the topical area will then be conducted. Any developments since the proposal and amendments in the context of academic will be addressed at this stage to conclude the initial stage.
The process will proceed with the planning of the activities and the resources needed. The planning will involve communicating to Tesco, which is the subject of the study. The communication will involve booking the introduction, informing the management of the intended interview, and booking the appointment. This will be followed by the identification of the areas of study. Once the areas of study and activities are noted, a cost estimation and time scheduling will be created for the execution of the study. The execution of the study will involve the contact of the subjects of the study to gather the relevant information. The implementation of the methodology constitutes part of execution of the study. Finally, there will be a compilation of the reports based on the findings. The Gantt chart below illustrates the activities and the time schedules to be undertaken:
Time in weeks
Week 1Week 2Week 3Week 4Week 5Week 6Week 7Week 8Week 9Week 10Initiation Project request (proposal)Gathering of relevant information Literature review Planning Communication Tesco & test of mBonus Identifying the areas of assessment Cost estimation and time schedulingExecution Contacting subjects of the study Conducting the actual study Compilation of report Gantt chart
Resources
The implementation of the project will rely on the following resources for completion within the period approximated:
1. Library resources including academic journals, books and internet facilities
2. Smart mobile phone
3. Transport
4. Stationary
5. Diary
List of References
Belch, E., Belch, G. and Michael, A. (2003). Advertising & promotion. an integrated marketing communications perspective. New York, N.Y: The McGraw-Hill Companies.
Bradley and Nigel. (2007). Marketing research, tools and techniques. Oxford: Oxford University Press.
Cleland, D. and Roland, G. (2006). Global project management handbook. McGraw-Hill Professional.
Glazer & Rashi. (October 1991). Marketing in an information-intensive environment: strategic implications of knowledge as an asset. Journal of Marketing, 17 (3), pp. 1–19.
Malhotra and Naresha, K. (2002). Basic marketing research: a decision-making approach. Upper Saddle River, NJ: Prentice Hall.
Mobile Marketing Association. (2003). MMA code for responsible mobile marketing [online]. Available from: http://www.mmaglobal.co.uk/ [accessed 4th June 2012].
Russell, Cristel, A. and Barbara, S. (2006). Consumers, characters, and products: a balance model of sitcom product placement
