CHAPTER 6 CONCLUSION & SUGGESTIONS

Transcription

1 CHAPTER 6 CONCLUSION & SUGGESTIONS CRM means little more than building relationships with customers to match the product offer better with customer needs. Others see CRM as concerned with developing a unified and cohesive view of the customer, no matter how the customer chooses to communicate with the organization (in person, by mail, Internet, or telephone), and emphasizing enhanced customer service and the use of call centers to provide consistency in how the company interacts with customers. To others, CRM focuses on the creation and use of a customer database to support decision makers. Understanding customer relationship management begins with recognizing that CRM seeks to increase the value of an organization s customer base by developing and retaining better relationships with customers. CRM may involve the use of databases but includes much more than technology. CRM makes it possible to examine individual customers or narrowly defined groups (micro-segments) and calculate what each offers the company in potential profits. The resulting customer lifetime value (CLV) can be used to focus marketing and promotional efforts. CRM strategy can be viewed from company-wide, customer-facing, and functional perspectives. The company-wide or strategic perspective provides the most complete view of CRM. Designing the CRM strategy follows a sequence of initiatives: gaining organizational commitment to CRM, forming the project team, analyzing business needs, and determining the CRM strategy to be pursued by the organization. 248

2 CRM strategy includes the value proposition to be offered, the business case, the customer strategy, the enterprise transformation plan, and responsibilities to other stakeholders. CRM strategy implementation involves integration of sales, marketing, and service functions across all media and value chain members, creation of a data warehouse, decision guidelines for use of CRM analyses, determination of performance benchmarks, and integration of cross-functional operations. Several hurdles to successful CRM implementation include implementing before creating a customer strategy, launching CRM before making essential organizational changes, assuming that more CRM technology is necessarily better and investing time and resources with disinterested customers. CRM is a major undertaking that is complex and demanding. CRM is a value-creation process consisting of the value the customer receives and the value the organization receives. The benefits the customer receives are expressed in the value proposition. The value the organization receives is determined by a penetrating analysis of the profitability of the customer base. Customer lifetime value is the basis of the assessment. CRM is an important aspect of strategic marketing, recognizing that CRM is an enterprise spanning initiative. It is essential that CRM be carefully integrated with marketing strategy. CRM has a vital role to play in market targeting and marketing program positioning strategies. Finally, we examine several aspects of ethics and social responsibility. Companies are developing and implementing programs and processes to reduce ethical problems and deal with those that occur. Many companies have appointed ethics officers, developed codes of ethics, and operating process and guidelines. Social legitimacy in all its forms is a major impact of the ability of a seller to establish and maintain effective customer relationships. 249

3 The Fast Moving Consumer Goods (FMCG) sector is a corner stone of the Indian economy. This sector touches every aspect of human life. A major portion of the monthly budget of each household is spent on FMCG products. Fast Moving Consumer Goods (FMCG) satisfies the elemental and day-to-day household needs other than grocery, ranging from packaged foodstuff, dairy products, cooking oil, bread, butter, cereals, beverages like tea & coffee, pharmaceuticals, confectionery, biscuits, glassware, stationary items, watches, toiletries, detergents, shampoos, skin care products, cosmetics, toothpaste, dish washing liquid, shaving cream, razor, batteries, shoe polish, energy drinks, soft drinks, clothing, furniture and household accessories to electronic goods like cell phones, laptops, computers, digital cameras etc. that are usually categorized as Fast Moving Consumer Electronics or FMCEs. The FMCG producers have realized that there is ample opportunity for them to enter into the rural market. Today we notice this shift towards branded FMCGs in rural areas as a result of Socio Economic & Political changes in the last 5 years. This has made rural areas more viable markets even compared to urban areas. The Socio Economic and Political changes contributed to a great extent for changes in the life styles of countryside people who patronized branded FMCG products. The Government policies to promote education in rural areas enhanced their brand awareness due to the presence of at least one higher education pursuing student in their family or neighbouring family. The different Government policies are also being helpful for rural people contributed in enhancing people's income followed by a change in their lifestyles resulted in patronizing the branded products. According to the National Council of Applied Economic Research (NCAER) about 70 per cent of Indian population living in villages, India has perhaps the largest potential rural market in the world. It has as many as 47,000 haats (congregation markets), compared to 35,000 supermarkets in the US. And of the total FMCGs demand in India, nearly 53 per cent comes from the rural market. At present Indian FMCG sector is worth Rs.1300 billion and expected to be around a whopping value of Rs to Rs billion by Henceforth FMCG and its closest 250

4 companion Retail sector, both are likely to create most of the jobs in India in the coming years primarily in functions like marketing, sales, advertising, supply chain, logistics, human resources, product packaging and development, finance, operations, general management, supervising and so on. The introduction of sachets made rural people who are traditionally not accustomed for bulk purchase, to buy branded FMCG products like Rs1/- shampoo, nut powders, oils, detergents, cleaning powders & liquids, tooth pastes, etc. in rural shops. This changed the pattern of buying from traditional products to branded products. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion. It has a strong MNC presence and is characterised by a well established distribution network, intense competition between the organised and unorganized segments and low operational cost. Availability of key raw materials, cheaper labour costs and presence across the entire value chain gives India a competitive advantage. Brand awareness is the degree of familiarity among consumers about the life and availability of the product. It is measured as ratio of niche market that has former knowledge of brand. Brand awareness includes both brand recognition as well as brand recall. Brand recognition is the ability of customer to recognize prior knowledge of brand when they are asked questions about that brand or when they are shown that specific brand, While brand recall is the potential of customer to recover a brand from his memory when given the product class/category, needs satisfied by that category or buying scenario as a signal. In other words, it refers that consumers should correctly recover brand from the memory when given a clue or he can recall the specific brand when the product category is mentioned. It is generally easier to recognize a brand rather than recall it from the memory. 251

5 Consumer preferences are defined as the subjective (individual) tastes, as measured by utility, of various bundles of goods. They permit the consumer to rank these bundles of goods according to the levels of utility they give the consumer. Note that preferences are independent of income and prices. Ability to purchase goods does not determine a consumer s likes or dislikes. This is used primarily to mean an option that has the greatest anticipated value among a number of options. Preference and acceptance can in certain circumstances mean the same thing but it is useful to keep the distinction in mind with preference tending to indicate choices among neutral or more valued options with acceptance indicating a willingness to tolerate the status quo or some less desirable option. Changing Profile and Mind Set of Consumer People are becoming conscious about health and hygienic. There is a change in the mind set of the Consumer and now looking at Money for Value rather than Value for Money. We have seen willingness in consumers to move to evolved products/ brands, because of changing lifestyles, rising disposable income etc. Consumers are switching from economy to premium product even we have witnessed a sharp increase in the sales of packaged water and water purifier. Findings according to a recent survey by A. C. Nielsen shows about 71 per cent of Indian take notice of packaged goodsʹ labels containing nutritional information compared to two years ago which was only 59 per cent. PepsiCo India is one of the reputed companies amongst various FMCG Companies / cold drink Industry. PepsiCo is having different product with its product line. Pepsi has acquired a big share of market in India and in other countries because of its competitive pricing, distribution system and through good customer relation. Like in other industry Pepsi is also having different competitors. In India Pepsi is having only one competitor that is Coca-Cola. As we know in summer season demand of cold drink raised but in some cases it is unable to provide all 252

6 flavors to its retailers. The quality of product is different in different countries. Pepsi doesn t facilitate credit facility to its customer whereas customers have to provide credit facilities to its consumer so as to increase his selling and to maintain relation. Now, the President and CEO of Pepsi Indira Nooyi have announced that there will be one quality for Pepsi all over and there will a symbol on all product of the Pepsi. This will help in increase the sale of Pepsi Product. Despite of all the strength and weakness it s also having some threats it is also having Opportunity still to grow more and competitor with its competitor. Over all the company are a very good company and one of the leading and growing companies in India. To increase the sale of Pepsi Product Company should offer discount on family pack. Launch more product, Increase in Profit and scheme for the retailers, Attractive packing of the product, Delicacy Problem should be removed, etc. Offer should be given or contest should be played. More Offers should be given. Competitive Prices should be there. Available the flavors in the peak season when it is demanded. Available the brands when it is needed by the customers. Problem statement The focus of CRM increased companies abilities to understand the customer current needs, what they have done in the past, and what they plan to do in the future to meet their own objectives. The goal is to improve the customer s experience of how they interact with us, which yields more loyalty, which ideally, yields more sales of products and services Yurong et al., (2002) Although this quote ideally explains what customer relationship management (CRM) should achieve, the problem in the FMCG industry is that the customer is not the end consumer of the product but more of a means to reach the end consumer. 253

7 Therefore this study needs to investigate if and how the application of CRM can benefit the fast moving consumer goods (FMCG) industry Conclusion 1.Evaluaton of Customer relationship management practices of the Organisaton With regards to CRM practices of the organisation the researcher has found in his study that most of the practices are customer centric. changes Organization make in practices as per the change in perception of customer.. The management of the organization is committed to drive the CRM application from start to finish. They get involved through all the aspects of the application to ensure that the commitment is driven from the top down. As the commitment from top management is there it is essential that all employees are involved in the process to ensure that they buy into the concept and accept that there will change. CRM Practices of Organization The researcher has found in his study,the Pepsico-India being a very big multinational is implementing latest applications CRM. As Organization deals through wholesalers and organization is not in direct touch with its billion of customers and researcher has found out that number of customer touch points are also less in number as compare of its customers. Perception and attitude of customer Towards Organization The researcher has found in his study that over all perception of the customer towards organization is quiet good and the result of the analysis of the most of the variable is above average. 254

8 Role of CRM in accomplishment of objectives The main objectives of the all organization is to enhance customer satisfaction and loyalty and its sales. This the mission of the Pepsico-India. The researcher has found in his study that most of the practices of CRM and its variables are showing up to large extent customer are satisfied with the organization and customer are using its products continuously from years. Deficiency of Lower Satisfaction The researcher has also found some aspects showing lower customer satisfaction. As organization is not in direct touch with its end users,so sometimes customers don t feels themselves as a part of organization and there are very less customer touch points. Factors Contributing to Success The researcher has found out in her study that most of CRM variables are very efficiently being implemented by the organization and al the employees are committed. Employees of PESPICO Researcher has found in her study that employees recommend CRM because it gives one centralised view of the customer. Furthermore, by centralising information it will result in less time spent on gathering data to do reporting. In the end it results in more efficiency within the business. CRM is recommended because it can encompasses all departments of an organisation from sales through to administration and this will allow the organisation a full 360 degree view of any customer at any given time. 255

9 Furthermore it states that there is not a one size fits all approach with CRM but rather that each organisation can customise the CRM to suit its specific needs. The researcher has found in her study that loyalty from customers comes from service being delivered to the customer by the organization nd employees ply a very important role in this.pepsico,s employees understand this very well. Requirements for customer relationship management to succeed There are 18 things a company should strategically plan to avoid failure. The requirements are as follows : Establish corporate needs. Identify its problems. Identify the solution to that problem. Decide how to implement the solution. Talk to customers and staff. Ensure that staffs are willing to accept it. Serve customers better to keep them loyal. Offer profitable products that meet their expectations, repeatedly. Change from product-focus to customer-focus. Build long-term, mutually beneficial relationships with all stakeholders. Encourage inter-departmental communication and corporate-wide support. Appoint a chief customer officer and CRM project team. Invest in key components such as a data warehouse and analytical tools. Choose a scalable product with technology and facilitate monitoring of marketing campaigns. Choose a scalable product with CRM architecture that can handle existing and future sale channels. 256

10 Integrate front-end system with back office data mining processes for one view of the customer. Use only the relevant data for your business issue. Supplement data where required. Establish a central data warehouse for new and old data. Data mine and analyse it. Create different data models for your solution. Standardise your data format to reduce extraction complications. Use only highest quality data. Automate the decision making process. Monitor variances in customer behaviour with intelligent agents to predict key customer events. Use cluster analysis to discover new customer insights. Promote customer retention through predictive modeling. Trigger behavioural change for more profitable marketing campaigns with an event service. Define clear, measurable business objectives for each phase, limiting investment while mentoring ROI. Break general goals into narrow specifics so progress can be monitored. Benchmark customer satisfaction pre implementation. Learn from campaign mistakes and successes to aid future improvements. Analyse customer database. Promote customer loyalty for increased profitability. Identify customer needs and further opportunities. Deliver customised customer service. Provide reliable, convenient, fast and readily available customer interfaces. Offer the same customer service level via all channels. 257

11 Suggestions PepsiCo Inc. should select SAP s full MySAP Business Suite to streamline its distribution & delivery processes, improve planning & forecasting & give better visibility to its global supply chain. PepsiCo, which manufactures, distributes & markets Frito-Lays snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices & Quaker foods, is aiming to better link its supply chain & inventory data with its customer data. Supply Chain Management (SCM) System The system manages relationships with suppliers, purchasing firms, distributors & logistics firms. It manages shared information about orders, production, inventory level etc. The goal is to move correct amount of product from the company to point of consumption as quickly as possible & at the lowest cost. Pepsico should make sure that all of its Suppliers (Water, Corn Syrup, Food Colorings, Carbonation, Plastics, etc.) Come into an appropriate plant so as to keep customers satisfied with no shortages. Too much of additional inventory should be avoided which hangs up resources & cash flows. Pepsico should use mysap business suite applications which helps in communicating with its suppliers & generate forecast of demand. Generally a stock of up to 15 days should be maintained in the Inventory. 258

12 Sap helps in fine-tuning their supply chains from a sequential supply chains into adaptive supply chain networks. Adaptive refers to the ability to rapidly sense & respond to changing internal & external conditions. Network refers to the ability to have real-time collaboration & coordination across all partners in the supply chain. It is a community of customer-focused companies that share knowledge & resources to intelligently adjust to changing market conditions. Customer Relationship Management (CRM) System The system helps in managing relationship with customers; Deals with customers effectively & efficiently to optimize their revenue & increase customer satisfaction. The system captures & integrates customer data from all over the organization, analyze the data & distribute results to various systems & customer touch points across the enterprise. Pepsico s CRM application has allowed for conversion of former dissimilar sales systems into an integrated application solution, which gives a complete view of their entire consumer base. CRM applications are used in PepsiCo to determine profitable customers, discover potential sales opportunities, and improve customer interaction & relations. Data Points where SCM, CRM & ERP Integrate 259

13 MIS at PEPSICO The station computers are linked to PepsiCo s Central Computer System daily to update inventory, sales & production information system. The management believes that they would save annually over Rs.12,50,000 per year just because of this system. MIS will help PepsiCo's managers to recognize market trends, in respect of price, differentiation of products & timely information of market trend. Effective marketing planning is assisted in terms of product planning, pricing, promotion & distribution. It helps in taking quick decisions & also validating manager s decisions. It provides reliable & relevant information so that managers can take effective decisions at right time. FUTURE RESEARCH 1. Other different methods of qualitative research can be utilized to generate variables for analysis. For example - Case study analysis, Ethnographic studies, Projective techniques, etc. 2. Sample size can be increased so as to lend more accuracy and reliability to the findings 3. Quantitative research can be carried in different geographical areas and across regions so as to get depth of perceptions as a function of diversity 4. The main focus of this study was to assess effectiveness of Customer Relationship System from customers and PEPSICO officials point of view. However there was no perfect relationship in between the customers and PEPSICO officials who were surveyed. Therefore, it is suggested that another 260

14 study can be carried to study the same so that effectiveness can be measured in a more technical way. This will help in better performance rating of the PEPSICO officials also. 5. Some further studies can be carried out on likert scale to design the factors associated with the effectiveness of CRM System in changing FMCG s Scenario. 6. Future studies can consider some more external variables related to CRM tools and its measurement in product selling for increasing the external validity and clinical significance of research. LIMITATIONS OF THE STUDY 1. The research findings are based entirely upon the sample survey conducted in Delhi-NCR and hence may not be applicable directly and uniformly to other regions. 2. As the sample is from Delhi-NCR therefore the trend represent urban India in particular. 3. In view of the individual constraints the sample size is limited i.e. not very large. 4. Such a survey needs to be undertaken periodically to gauge the exact customer perceptions that keeps changing on time. 5. PEPSICO officials had apathetic view in the survey because of overburdening of tasks and could not spare adequate time for responding to questionnaire. Therefore the sample size was relatively less for PEPSICO. 261

15 6. Demographic, psychological and business analysis of customer data has not been incorporated at this stage which has an important relevance with respect to understanding the effectiveness of CRM system. 262