Status of Customer Relationship Management (CRM)

By
14037112005 Sayanat Arshe
14037112029 Seerat Mushtaq

A REPORT SUBMITTED TO
UNIVERSITY OF KASHMIR
DEPARTMENT OF MANAGEMENT STUDIES
(NORTH CAMPUS)

FEBRUARY 2017

1
 TABLE OF CONTENTS

S. No TITLE PAGE NO

1 ABSTRACT 3

2 INDUSTRY PROFILE 4

3 COMPANY PROFILE 6

4 INTRODUCTION 7

5 LITERATURE REVIEW 9

6 RESEARCH METHODOLOGY 13

7 DATA ANALYSIS AND 15

INTERPRETATION

8 CONCLUSION 24

9 SUGGESTIONS 25

10 ANNEXURE 26

2
 ABSTRACT
This is an assignment to develop a Customer Relationship Management (CRM) system. CRM
is one of the systems included in Enterprise Resource Planning (ERP) System. The main
purpose of CRM is to improve the relationship with the customers by using different module
like analysis, customer service and others.

3
 INDUSTRY PROFILE
The food and beverages industry are all companies involved in processing raw food
materials, packaging, and distributing them. This includes fresh, prepared foods as well as
packaged foods. Any product meant for human consumption, aside from pharmaceuticals,
passes through this industry. Industry Composition Deriving from the agriculture industry in
our definition, the food and beverage industry is divided into two major segments. Those
two segments are production and distribution of edible goods. Production includes the
processing of meats and cheeses and the creating of soft drinks, packaged foods, and other
modified foods. The production segment of this industry excludes foods that were directly
produced via farming and other forms of agriculture, as those are encompassed by our
definition of the agriculture industry. Distribution involves transporting the finished food
product into the hands of consumers. The industry is much more focused on technology and
mechanical manipulation of raw foods to create more value-added food products than the
agricultural industry. Under our definition of these industries, grocery stores are excluded as
they are considered a retail store. Distribution includes companies that ship food to retail
outlets, restaurants, or directly to consumers. Industry Leaders and Fragmentation * All
amounts are given in Billions USD* Company Country Sales Profits Market Value Nestle
Switzerland 90.8 8.7 229.5 PepsiCo United States 62.8 6.3 159.4 Royal Ahold Delhaize N.V.
Netherlands 55 0.918 26 Sysco United States 53.1 1 28 JBS Brazil 48.9 0.108 8.2 Highly
Fragmented Highly Concentrated Profitability and Demand Drivers Primary Demand Drivers:
• Food consumption • Population growth Profitability Drivers: Efficient operations, because
products are commodities subject to intense price competition • Trends Due to the recent
economic meltdown, consumers are looking to save as much money as possible. One major
way that consumers are doing so is by purchasing more generic foods and making their own
meals, not going out to eat. This is causing food processing companies to become more
innovative to decrease the cost of goods sold, attract more customers, and increase profit
margins. The large amount of obesity in the world has a major effect on the food and
beverage industry. There has been an increase in demand for health foods and more
informative nutritional labelling. Both of these trends have caused companies to release
lower calorie foods and to better control how their brand is viewed. Companies want to be
viewed as a healthy brand and are promoting activities, such as youth sports, that show this
healthy image. There also is mention of a tax on foods known to lead to obesity in order to
curb consumers’ usage of them. Rising costs of factors of production are a major factor to
this industry as well. Since commodity prices went up in the past year, food companies have
had to increase prices of the final product as well. With the economic collapse, this affected
them two-fold, as consumers were less likely to want or even have the money to pay the
higher prices. Fortunately, commodity costs have been decreasing in the last few months,
which forecasts a lower final price for the products in this industry is to come. The industry
also has to deal with their reputation, as there have been incidents of unsafe food being
released in the past. These outbreaks have two major potential consequences: loss of
consumer confidence and increased regulation. Already, research has shown that

4
consumers do not trust their food suppliers as much as they used to and nearly half of them
have switched brands in the past year, either to save money or because they believe the
new food will be safe.

5
 COMPANY PROFILE
PARSA FOODS AND BEVERAGES PVT LTD

Parsa foods & Beverages is a private limited company established in

2014. The company primarily deals with Fast Food & Restaurants.
They introduced Kathi Junction in J&K three years ago & successfully
managed to expand the brand across state.
Now they have launched their very own brand PARSA’S which has over a very short course
of time became one of the popular places to hangout among the youth of Kashmir. The
place offers a pocket friendly menu ranging from 50 – 200 INR.
Moreover, Parsa’s has also come to known for its social gatherings which vary from hosting
Book Launches, Poetry Recitals to Movie Releases. Parsa’s has also been running a Book
Bank, comprising of more than 1000 books and more than 500 regular borrowers/readers.
They will be expanding brand Parsa’s across the state in near future.

6
 Chapter 1
Introduction
1.1 MOTIVATION AND PROBLEM STATEMENT
Losing customer is a problem faced by every organization. Why customers turnover? There
are many reasons for a customer to turnover such as wrong product pricing, poor store
atmosphere, lack of product knowledge, terrible customer service and other. One of the
fundamental reasons of customer to turnover is weak relationship with the customer. A
weak relationship with customers is impossible to have high loyalty customers. Customer
will always like that company make them feel better, and they will be loyal to those
company. All of the companies having the customer defection rate, they must have a
solution to decrease their customer defection rate. The tool to decrease the customer
defection rate is customer relationship management (CRM). CRM can help the company to
identified, acquire, satisfy and retain profitable customers from existing customer base.
Why the problem of losing customer is important? The losing of customer also means that
the profit of the company will decrease. In other words, decrease in the customer defection
will increase company’s profit at all.

1.2 BACKGROUND INFORMATION

1.2.1 Customer
A customer is a person or organization that a marketer believes will earn benefit from the
goods and service offered by the marketer’s organization. A customer is not necessary to be
currently buying something, and it may differentiate into 3 types. The 3 types of customer
are existing customer, former customer and potential customer. Existing customer is the
customer who purchasing the goods and services within a period till now. Former customer
is customer who purchased goods services before, but not continues for a period time.
Potential customer is the customer who hasn’t purchase, buy they may purchase.

1.2.2 Customer Relationship

A relationship is composed of a series of interactive episodes between dyadic parties over
time.
What is an interactive episode? Episode is activity that having a start time and end time, and
it is nameable. There is possibility a series of episode in a sales representative and customer
relationship. For example, making a sales call, making a purchase, dealing with a complaint
and others. If there is only one-off transaction, such as buying a coffee from the coffee shop,
it will not call as a relationship. But, if a customer frequently going to enjoy the coffee of the
same coffee because the waitress’s service of the coffee shop is nice, then it might a
customer relation. A customer relationship should be in long period interaction but not once
transaction.

7
1.2.3 Customer Relationship Management (CRM)
Customer Relationship Management (CRM) is the core business strategy that integrates
internal processes and functions, and external networks, to create and deliver value to
targeted customers at a profit. It is grounded on high quality customer-related data and
enabled by information technology.

1.2.4 Importance of Customer Relationship Management (CRM)

The fundamental reason for an organization wants to have relationship with customer is
economic. The main objectives of CRM are identified, acquire, satisfy and retain profitable
customers. Companies can do better when they achieved the objectives of CRM. Improve
customer retention rate or decrease customer defection rate will affect the increasing of the
size of customer base.

8
 Chapter 2
Literature Review
2.1 INTRODUCTION
In this literature review, this assignment going to review on the article, book and internet
resources to study about the customer relationship management (CRM).

2.2 CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

2.2.1 Definition of CRM
The expression of Customer Relationship Management (CRM) was being started to use since
early 1990s. According to Customer Relationship Management: Concepts and Technologies
(Buttle 2008), there are many attempts to define the domain of CRM:
CRM is an information industry term for methodologies, software and usually internet
capabilities that help an enterprise manage customer relationships in an organized way.
CRM also define as the process of managing all aspects of interaction a company has with its
customers, including prospecting, sales and service.
CRM is an integrated approach to identifying, acquiring and retaining customers. By
enabling organizations to manage and coordinate customer interactions across multiple
channels, departments, lines of business and geographies, CRM helps organizations
maximize the value of every customer interaction and drive superior corporate
performance.
CRM is an integrated information system that is used to plan, schedule and control the pre-
sales and post-sales activities in an organization. CRM embraces all aspects of dealing with
prospects and customers, including the call centre, sales-force, marketing, technical support
and field service. The primary goal of CRM is to improve long-term growth and profitability
through a better understanding of customer behaviour. CRM aims to provide more effective
feedback and improved integration to better gauge the return on investment (ROI) in these
areas.
CRM is a business strategy that maximizes profitability, revenue and customer satisfaction
by organizing around customer segments, fostering behaviour that satisfies customers and
implementing customer centric processes.

2.2.2 Types of CRM

There are 4 types of CRM implemented overall the business. There are Strategic CRM,
Operational CRM, Analytical CRM, and Collaborative CRM.
Strategic CRM is use to development a business with customer centric culture. This culture
is dedicated to winning and keeping customers by creating and delivering better value than
the competitors. Customer centricity is competed with 3 others business logic, which is

9
product, production and sales. Product-oriented businesses believe that the product with
best quality, performance, design or features will be chosen by customer. Production-
oriented businesses believe that customer more likely to choose low cost product. Sales-
oriented businesses believe that customer will be persuaded to buy their product if they do
enough for advertising, selling and public relation. A customer or market-oriented
businesses share a set of belief putting the customer at first. Many managers say that
customer centric must be right. However, sometime other orientation may stronger.
Operational CRM use to automate and improves customer-facing and customer supporting
business process. CRM application can make the marketing, selling, and service process to
be automated and integrated. There are 3 types of automation, which are Marketing
automation, sales-force automation and service automation. Marketing automation allow
marketer to use customer data to develop, execute and evaluate targeted communication
and offers. Sales-force automation is use to managing selling activities, product
configuration in sales-force automation allow customer to design their product by
themselves, one of the example is the web-based laptop setting configuration and orders
features offer by the DELL. Service automation is used to automate the serving service of
the company, it was used widely by most of the company. For example, when customer call
to the customer support centre of the companies, they will first ask us to use voice or
keyboard to enter the option customer want, then lead us to the related service provider.
Analytical CRM is concerned with capturing, storing, extracting, integrating, processing,
interpreting, distributing, using and reporting customer-related data to enhance both
customer and company value. Analytical CRM normally can use to answer the marketing
question of the businesses such as who is our most profitable customer? Which customer
having the possibility of turnover to the competitor? Which customer have the high
possibility to accept our offer? Analytical can help to them to know which customer should
give which level of services, and this could increase the possibility of customer to accept the
offer.
Collaborative CRM is the term used to describe the strategic and tactical alignment of
normally separate enterprises in the supply chain for the more profitable identification,
attraction, retention and development of customers.

STRATEGIC OPERATIONAL SST

CRM

ANALYTICAL COLLABORATIVE

Figure 2.1: Types of Customer Relationship Management (CRM)

10
2.2.3 Stakeholders in CRM
The stakeholders who play a major role in the entire process of Customer Relationship
Management are:
1. Customers: Customers, of course, are the most important person in the CRM design
for whose delight the whole exercise is conducted.
2. Employees: They are the set of people who execute the CRM design. They include
those right from the frontline staff who actually executes to the top management
who designs the CRM.
3. Suppliers: They are the part of system who provide input to a company’s value chain.
4. Partners: They are the creators of additional value for the customers.
5. Owner: An owner may be an employee or executive who has the principle
responsibility for a process, program, or project.

2.2.4 Components of CRM Programme

The following are the important components of a CRM programme:
1. Company’s marketing programme: This consists of five important determinants of
the company’s offering, viz. the offer, tangibles, services delivery, employees and
their approach towards customers and its requirements, and the company’s
grievance handling mechanism.
2. Customer expectation: The expectation created by the company about the service
also plays an important role in satisfaction determination. If hype is created about
the product, customers tend to expect more and if the expectation is not fulfilled, it
leads to greater dissatisfaction. The same level of service may at one point in time
result into satisfaction but at another point in time may lead to dissatisfaction. This
depends upon what service expectation level it generates in the minds of the
customers.
3. Perceived performance: This is largely guided by the customer’s cognitive ability. So,
it is important for the companies to realise that the service has got not just to be the
best but it has to be perceived as the best as well. It is this perception of the service
that determines if it would lead to satisfaction or dissatisfaction.
4. Competitor’s offers: These play an important role in determining customer
satisfaction. They normally act as a benchmark for measuring the strength of the
offer, i.e. the cost, the service guarantee, the fringe benefits, etc. The growing
service level of the competitor also increases the service expectation of the
customer. If it remained at the same service level it might experience loss of sale not
because of its lowering of services but by the increase in service level of competitors.
5. Customer’s resultant behaviour: Based on the analysis of the components discussed
above, the customer would decide upon his further behaviour regarding the
company and its offers. One option could be that he may become the band
ambassador in addition to the regular benefit he delivers to the customers, the other
extreme may be that he starts propagating negative publicity about the company
and its offers.

11
2.2.5 CRM Value Chain
To achieve success through CRM, a CRM value chain needs to be designed. By this, data
received from customer could be converted into meaningful information. This information
may help companies acquire knowledge about the customer and design their relationship
programs to create customer delight.

Customer Customer Customer Customer Customer

data information knowledge service satisfaction

CRM Value Chain

As per the above sequence of activities, initially data regarding the customers are gathered,
then they are converted into meaningful format depending upon the objective and usability
of the company. A compilation of only those data which have got significance for the
organisational decision making is put forth. A set of knowledge is then required to be
created and the CRM programme is designed accordingly.

12
 Chapter 3
Research Methodology
3.1 SAMPLING
For the purpose of assignment, data is very much required, which works as a food for the
process, which ultimately gives output in the form of information. So before mentioning the
source of data for the project we would like to mention the type of data we have collected
for the purpose of project and what it is exactly.

3.1.1 Primary Data

The primary data was collected from the respondents (stakeholders of CRM) by
administering a structured questionnaire and also through observations, interviews and
discussions with the respondents.

3.1.2 Secondary Data

Apart from the primary data, the secondary data is collected through the Annual reports of
PARSA FOODS AND BEVERAGES, past facts and figures provided by the PARSA FOODS AND
BEVERAGES through Internet and journals.

3.2 STATISTICAL DATA

SAMPLE SIZE 100

SAMPLING AREA SRINAGAR

INDUSTRY PARSA FOOD AND BEVERAGES

RESPONDENTS STAKEHOLDERS OF CRM (OWNER, EMPLOYEES,

CUSTOMERS)

DATA SOURCE PRIMARY AND SECONDARY DATA

SAMPLING METHOD THE RESEARCH WAS MADE BY THE SURVEY IN

ACCORDANCE WITH THE CONVENIENCE OF THE
SELLERS. SO, THE SAMPLING TYPE IS
CONVENIENT SAMPLING.

13
3.3 TOOLS USED FOR ANALYSIS
➢ Instrument: A structured questionnaire is used & all type of questions are
dichotomous and close ended.
➢ Method: The research was conducted by using contact methods through
Questionnaire, Interviews and Observations. The information was collected from the
Owner, Employees and Customers.
➢ Data analysis Technique: The data is analysed through Sample Analysis Technique.
The data tool is percentage method.

3.4 LIMITATIONS OF THE STUDY

The present study is limited to many aspects. Providing information of Customer
Relationship Management is the outcome of various variables. It is not possible to take into
consideration each & every criteria in this study.
(i) Some of the information given by the respondents may be biased.
(ii) Could not be able to collect the information from all the sellers because of the
busy schedule
(iii) The questions that are asked being personnel, some of them hesitated to
answer.
(iv) The analysis is done on the assumption that the respondents have given correct
information through questionnaires.
(v) Due to the limitation of time, the research could not be made more detailed.

14
 Chapter 4
Data Analysis and Interpretation
4.1 OWNER’S PERSPECTIVE
Q. DOES YOUR ORGANIATION USE CRM?
A. Yes, we do use CRM.

Q. DOES YOU ORGANISATION USE A COMPUTER BASED CRM SYSTEM? IF NOT, WHY?
A. No, we don’t use the IT perspective of CRM. Implementing a computer-based CRM would
be difficult to understand.

Q. HOW IMPORTANT IS CRM TO YOUR BUSINESS?

A. We use CRM in order to work on our short comes(loopholes).

Q. WHAT WERE THE MAIN OBSTACLES IN IMPLEMENTING THE CRM?

A. Feedback may be biased.

Q. WHEN WOULD YOU EXPECT TO INTRODUCE OR CHANGE YOUR CRM SYATEM?

A. Not in the foreseeable future. I’m happy with the form of CRM I’m using.

Q. HOW DO YOU DEFINE CRM?

A. According to me CRM is tool which bridges gap between my organisation and my
customers.

Q. WHAT ADVICE WOULD YOU OFFER TO SOMEONE INTRODUCING CRM?

A. I would advise them to follow my footprints and make sure that the business is not
dependent totally on a single person.

Q. HOW OFTEN DO YOU USE THE DATA COLLECTED BY CRM APPLICATION?

A. We very often use the data collected and the same is discussed in team meetings in order
to design new products or set a new business strategy.

15
Q. HOW USEFUL IS CRM FROM BUSINESS PERFORMANCE PERSPECTIVE?
A. It is extremely useful as it solves the maximum business problems and help us to
understand our customer and improve overall business performance.

4.2 EMPLOYEE’S PERSPECTIVE

Name of the Q1. What is Q2. Is Q3. Is Q4. What is Q5. Do you Q6.
employee your training customized given the implement According to
designation? provided? service first customer you out of 5
provided? preference? feedback for customers
Table or improvemen how many
takeaway t? are
orders. retained?
Omar Sales On the job Yes Table Yes 5
Executive training is
provided.

Malik Danish Steward No. Yes Table Yes 3

Employee
gets trained
by
experience.
Danish Steward On the job Yes Table Yes 4
training is
provided.

Imran Chef Trained Yes Table Yes 4

through
experience.

Tariq Housekeeping On the job Yes Table Yes 4

training.

16
4.3 CUSTOMER’S PERSPECTIVE

How often do you take food in the

restaurant?

17%
28%

22%

33%

Once in a week Twice in a week Once in a month Rarely

We came to know maximum customers rarely take food in restaurant.

How you came to know about PARSA'S?

4%

30%

52%

14%

Newspaper Publicity Word of mouth Friends

We came to know that more number of customers came to know about PARSA’S from
friends than any other medium.

17
 How many times do you visit PARSA'S in a
month?
3%

27%

61%
9%

Once Twice More than Twice Everyday

We came to know that maximum number of customers visit PARSA’S once a month.

Whether the items mentioned in the menu

are available.
14%

86%

Yes No

We came to know that maximum number of customers think that the items available in the
menu are available.

18
 Do you have habit of noticing "Today's
Special" at the entrance?

47%
53%

Yes No

We came to know that maximum number of customers do have the habit of noticing
“today’s special” at the entrance.

How much time do you wait to get a place to

sit?

19%

46%
17%

18%

Less than 3 Mins 3-5 Mins 5-10 Mins More than 10 Mins

We came to know that more number of customers have to wait for less than 3 Mins to get a
place to sit.

19
 Yor opinion towards quality of PARSA'S
9%

39%

52%

Highly satisfied Satisfied Moderate Dissatisfied

We came to know that more number of customers are satisfied followed by highly satisfied
towards the quality of PARSA’S.

Your opinion towards Availability of Varieties

at PARSA'S

17% 22%

61%

Highly Satisfied Satisfied Moderate Dissatisfied

We came to know that more number of customers are satisfied followed by highly satisfied
towards availability of varieties at PARSA’S.

20
 Your opinion towards Neatness and
Cleanliness of PARSA'S
6%

40% 54%

Highly Satisfied Satisfied Moderate Dissatisfied

We came to know that more number of customers are highly satisfied followed by satisfied
towards the neatness and cleanliness of PARSA’S.

Your opinion towards Price of PARSA'S

1% 11%
13%

75%

Highly Reasonable Reasonable Moderate Non Reasonable

We came to know that more number of customers found that price at PARSA’S is
reasonable followed by moderate.

21
 Your opinion towards Services of PARSA'S
7%
12% 29%

52%

Highly Satisfied Satisfied Moderate Dissatisfied

We came to know that more number of customers are satisfied followed by highly satisfied
towards the services of PARSA’S.

Have you come across with any health issues

after consuming food in PARSA'S?
8%

92%

Yes No

We came to know that maximum number of customers didn’t come across with any health
issues after consuming food at PARSA’S.

22
 Do you like to visit again?
1%

99%

Yes No

We came to know that maximum number of customers would like to visit again.

Will you recommend others to visit PARSA'S?

3%

97%

Yes No

We came to know that maximum number of customers would recommend others to visit
PARSA’S.

23
 CONCLUSION
Although CRM has been implemented by many other organizations but PARSA’S still lacks it.
The PARSA’S has succeeded in satisfying its majority of customers, however there are many
areas of improvement. The staff should be more customer friendly, orders should be taken
and served on time, training should be imparted to the staff members. The organization
should work on reducing customer complaints.

24
 SUGGESTIONS
A separate unit for Customer Relationship Management should be developed.

25
 ANNEXURE
QUESTIONNAIRE

“A study of Customer Satisfaction”

(With special reference to PARSA’S)”

NAME (optional): ______________________

1. How often you take food in the Restaurant?

(a) Once in a week (b) Twice in a week

(c) Once in a Month (d) Rarely

2. How you came to know about PARSA’S?

(a) News Paper (b) Publicity

(c) Word of Mouth (d) Friends

3. How many times you visit PARSA’S in a month?

(a) Once (b) Twice

(c) More than Twice

4. Whether the items mentioned in the menu are available:

(a) Yes (b) No

5. Do you have a habit of noticing “Today’s Special” at the entrance?

(a) Yes (b) No

6. How much time do you wait to get a place to sit?

(a) Less than 3Mins (b) 3 – 5 Mins

(c) 5 - 10 Mins (d) More than 10 Mins

7. Your opinion towards Quality of PARSA’S:

(a) Highly Satisfied (b) Satisfied

(c) Moderate (d) Dissatisfied

8. Your opinion towards Availability of Varieties at PARSA’S:

(a) Highly Satisfied (b) Satisfied

(c) Moderate (d) Dissatisfied

26
 9. Your opinion towards Neatness and Cleanliness of PARSA’S:

(a) Highly Satisfied (b) Satisfied

(c) Moderate (d) Dissatisfied

10. Your opinion towards Price of PARSA’S:

(a) Highly Reasonable (b) Reasonable

(c) Moderate (d) Non-Reasonable

11. Your opinion towards Services of PARSA’S:

(a) Highly Satisfied (b) Satisfied

(c) Moderate (d) Dissatisfied

12. Have you come across with any health issues after consuming food in PARSA’S?

(a) Yes (b) No

13. Do you like to visit again?

(a) Yes (b) No

14. Will you recommend others to visit PARSA’S?

(a) Yes (b) No

15. What suggestions would you like to give for PARSA’S?

__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________

27