Crm Final Proj

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MINI PROJECT REPORTON

CRM IN RETAIL INDUSTRY

In partial fulfilment of theRequirement for the award of the degree

MASTER OF BUSINESS ADMINISTRATIONReport submitted by

ABHAY KUMAR3510910006AJAY KUMAR GOPE 3510910029AMARDEEP KUMAR 3510910037

ABDHA KISHOR SINGH 3510910004

AMIT KUMAR 3510910044AJIT KUMAR SINGH 3510910032

Under the guidance ofMR.S.SENTHIL KUMAR

FACULTY OF SRM School of ManagementDEPARTMENT OF BUSINESS ADMINISTRATION

SRM UNIVERSITY

KATTANGULATHUR,KANCHEEPURAM DISTRICT,

CHENNAIBATCH : 2009-2011

BONAFIDE CERTIFICATE

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This is to certify that the Mini project titled of CRM IN RETAIL

INDUSTRY. is a bonafide record of work done by ABHAY KUMAR, AJAY

KUMAR GOPE, AMARDEEP KUMAR, AJIT KUMAR SINGH, AMIT KUMAR,

ABDHA KISHOR SINGH , 2ND year MBA, SRM UNIVERSITY, Chennai, in partial

fulfillment of the requirement for the award of the degree MASTER OF

BUSINESS ADMINISTRATION, during the academic year 2009-2011.

MR.S.SENTHIL KUMAR

FACULTY OF SRM School of Management

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ACKNOWLEDGEMENT

I express my deposit and sincere thanks to our respected Dean Dr.Jayashree Suresh who has given me an opportunity to do this project.

Who guide for their valuable guidance and constant encouragement in

successful completion of this project.

I am thankful to the management of SRM college for having given me an

opportunity for conducting a this project in their esteemed organisation.

I would like to thank our friends and all others for their whole hearted co-

operation in making this Mini project a success.

INTRODUCTION OF CRM

Customer relationship management (CRM) is a broadly recognized, widely-

implemented strategy for managing a companys interactions with customers, clients

and sales prospects. It involves using technology to organize, automate, and

synchronize business processesprincipally sales activities, but also those

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for marketing, customer service, and technical support. The overall goals are to find,

attract, and win new clients, nurture and retain those the company already has,

entice former clients back into the fold, and reduce the costs of marketing and client

service. Customer relationship management describes a company-wide business

strategy including customer-interface departments as well as other departments.

Changes in customer expectations can be identified throughout the world. Customer

relationship

management (CRM) strategies have become increasingly important worldwide due to

these changes in expectations from customers as well as changes in the nature of

markets. Changes have been noted across the world, but opportunities present

themselves in South Africa and other developing countries for CRM strategies.

Customer Relationship Management (CRM) is a managerial philosophy that seeks to

build long term relationships with customers. CRM can be defined as the

development and maintenance of mutually beneficial long-term relationships with

strategically significant customers . Under certain circumstances it may result in the

termination of relationships. It can also be noted that the relationship is developed

with strategically significant customers, and hence it is necessary for the organisation

to determine the nature of the significance. Traditionally this would be done by

determining the value of the customer to the organisation, but other criteria that can

be used include whether a customer serves as a benchmark for other customers or

whether the customer inspires change in the supplier .

The implementation of CRM is regarded as desirable by organisations due to the

benefits that accrue from these strategies among their customers, such as greater

loyalty and resulting profits. The focus of a CRM strategy is the acquisition, retention

and overall customer profitability of the specific group of customers.

Acquisition of customers: this refers to the need of organisation to find new

customers for their products. This means they are required to develop strategies to

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attract potential customers to purchase the product. The cost of attracting a new

customer is estimated to be five times the cost of keeping a current customer happy.

Retention of customers: organisations also need to focus on existing customers

in order to ensure that they continue purchasing and continue supporting theproduct. Organisations can increase their profitability by between 20% and 125% if

they boost their customer retention rate by 5 percent.

Profitability: Customer profitability reflects the financial performance of

customers with respect to all the costs associated with a transaction. Profitability in

the case of CRM is determined in the light of the lifetime value of the customer to the

organisation, taking account the income and expenses associated with each

customer and their respective transactions over time .

PHASES

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The three phases in which CRM support the relationship between a business and its

customers are to:

Acquire: CRM can help a business acquire new customers through contact

management, selling, and fulfillment.

Enhance: web-enabled CRM combined with customer service tools offers

customers service from a team of sales and service specialists, which offers

customers the convenience of one-stop shopping.

Retain: CRM software and databases enable a business to identify and reward

its loyal customers and further develop its targeted marketing and relationship

marketing initiatives.

CHALLANGE

Tools and workflows can be complex, especially for large businesses. Previously

these tools were generally limited to contact management: monitoring and recording

interactions and communications. Software solutions then expanded to embrace deal

tracking, territories, opportunities, and at the sales pipeline itself. Next came the

advent of tools for other client-interface business functions, as described below.

These tools have been, and still are, offered as on-premises software that companies

purchase and run on their own IT infrastructure.

Often, implementations are fragmentedisolated initiatives by individual

departments to address their own needs. Systems that start disunited usually

stay that way: siloed thinking and decision processes frequently lead to

separate and incompatible systems, and dysfunctional processes.

Business reputation has become a growing challenge. The outcome of internal

fragmentation that is observed and commented upon by customers is now

visible to the rest of the world in the era of the social customer, where in the

past, only employees or partners were aware of it. Addressing the

fragmentation requires a shift in philosophy and mindset within an

organization so that everyone considers the impact to the customer of policy,

decisions and actions.

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IMPLEMENTING A CRM STRATEGY The success of any strategy is determined by the success with which it is

implemented. This is also true in the case of CRM strategies. Implementing CRM

require that the organisation and the associated business processes be in place in

order to facilitate its success. The risk in implementing any CRM strategy is that the

organisation is not ready to do so and relying on technology to implement the

strategy.

The role of customer service in CRM strategy

In order to implement a CRM strategy, a key dimension is the question of customer

service and the way in which it is perceived by the recipient of the service. Customer

service can be defined as a task, other than pro-active selling, that involves

interactions with the customers in person, by telecommunication, or by mail. It is

designed, performed and communicated with two goals in mind: operational

efficiency and customer satisfaction. The quality of customer service is determined

and evaluated by the customer, and this affects the desirability of a relationship with

the organisation. Customer service creates the moments of truth with the customer,

and these service encounters need to be managed by the organisation. Service

encounters and CRM are thus associated.

The steps in the implementation of CRM strategy

Successful implementation requires specific actions on the part of the organisation.

The

implementation of a CRM strategy as proposed by Peppers, Rogers & Dorf (1999)

comprises four steps, namely the identification of customers, the differentiation of

service, interaction with customers and the differentiation among customers.

Step 1: The identification of customers

The identification of customers enables the organisations to select those customers

that they regard as being strategically significant and who they believe can

contribute to the success of the organisation. These customers have unique needs

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and due to their value to the organisation, will have products developed to meet

these needs. It must be possible to identify these customers and so obtain as much

detail as possible. This involves collecting as much data as possible in order to obtain

as clear a picture as possible of the customer and their profile. This may require the

development of a database or the continued maintenance of a database in order toensure that the data stays as recent as possible. Having this information enables the

organisation to determine those customers that have been with the organisation for a

long period and those that have recently started using the products and services of

the organisation.

The hypothesis regarding this aspect is formulated as follows:

H1: Identifying new and existing clients increases the level of customer service.

Step 2: The differentiation of service

The differentiation of service implies that different customers receive a different level

of service and a different product from the organisation, depending on the value to

the organisation and their specific needs.This requires the organisation to identify the

top (or most significant) customers and adapt service accordingly. Identification of

these top customers takes place using sales figures or by calculating the CLV

associated with each customer. As the organisation is aware of the value of their

customers, service levels can be adjusted accordingly.


H2: Differentiating between the services offered to new and existing clients

increases the level of customer service.

Step 3: Interaction with customers

This step refers to the importance of interacting with the customer in relationship

building efforts

through a variety of communication tools and technologies. This is necessary as the

relationship can only develop and be sustained if there is communication with the

customers regarding their needs, perceptions and desires. This involves developing

methods of communication proactively with customers regarding the organisations

products and attempting to initiate dialogue with customers. Use can be made of

technology, but this is not essential (Brunjes & Roderick, 2002). The customers with

whom communication takes place are not necessarily all the customers, but only

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those that the organisation regards as being strategically significant. This interaction

with the organisation increases the expectations of the customers regarding the

service received as well as the quality of the relationship.


H3: The level of customer service is increased if there is an active interaction withpotential and

existing clients.

Step 4: Customisation of products, services and communication

Customisation is carried out by the organisation in order to ensure that customer

needs are met. It

requires that the organisation adapts its product, service or communication in such

as way have something unique for each customer. Communication can be

customised to address the specific needs and profile the customer, and organisation

also makes use of personalisation as part of this process. Products can be customised

as to the specific desires that the customer has of the organisation. In the case of the

financial services, it refers to the product package that is offered to the customer.

The purpose of customisation is to increase customer satisfaction, and the loyalty

that is exhibited by customers.


H4: The level of customer service is increased if customised service is offered

according to each

individual clients needs.

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CRM PRACTICES IN DIFFERENTRETAIL COMPANIES

In todays retail industry, understanding customer needs and delivering a

positive

customer experience are critical to building long-term profitable customer

relationships.

For forward-thinking retailers, the fundamental challenge is to ensure customer

loyalty and satisfaction by providing a consistent customer experience across

multiple channels.

It offers integrated database marketing capabilities that unify enterprisewide

customer data and bring customer intelligence to the planning, execution, and

monitoring of outbound marketing campaigns.

Organised retailers are employing IT to know their customers better.Retail is all about

knowing your customers thoroughly in order to serve them better. To accomplish this

Indias oldest textile manufacturers and retailers, Raymond India decided to

implement CRM (customer relationship management) across most of its retail outlets.

The CRM implementation is named Premium Circle. CRM helped the company

understand the colour and design preferred by a particular age group or why a

particular group or individual did not buy or did buy a particular product. Customers

using it are known as premium users and are given a premium card.

The aim of CRM implementation was to ensure three principlesavailability,

reliability and scalability.

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Pantaloon Retail

Pantaloon Retail is the flagship enterprise of the Future Group. Pantaloon Retail

(India) Limited has spread across various businesses and cities in India. Pantaloon

owns multiple retail formats and is able to cater to a large section of the society.

The company has over 140 stores across 32 cities in India and 14000 employees.

The headquarters of the company are situated at Mumbai. The organization made

an incursion into the modern retail (fashion) in 1997. Big Bazaar, a hypermarket

chain, was introduced in the year 2001, with an Indian touch of convenience and

hygiene. Food Bazaar, food and grocery chain, and Central Mall located at various

Metros are other important parts of the group.

Others include Collection (home improvement products), E-zone (consumer

electronics), Depot (books, music, stationery and gifts), Blue Sky (fashionaccessories) and Shoe Factory (footwear). The company has also launched a

retailing venture known as futurebazaar.com. The vision of Future group is to

"Deliver Everything, Everywhere, Every time to Every Indian Consumer in the most

profitable manner."

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National Retail Federation gave Pantaloon the 'International Retailer of the Year'

Award.

LIFESTYLE

Lifestyle is an international fashion store of the Landmark Group, a Dubai-based

company. Lifestyle created a revolution in the Indian Retail Industry by bringing a

truly international shopping experience. It was launched in Chennai, and now it is

one of the largest professional retailers spread across 3,25,000 sq. ft. in various

cities such as Chennai, Gurgaon, Mumbai, Hyderabad and Banglore. It is a heaven

for shoppers with a vibrant and spicy lifestyle. It provides a wide choice of products

at affordable prices with a convenient world-class environment and a friendly

layout. Being one of the best shopping destinations, it has won the ''Most Respected

Company in the Indian Retail Sector' and the 'Most Admired Large Format Retail

Company' awards in India.

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SHOPPERS' STOP

K. Raheja group of companies founded Shoppers' Stop on October 27, 1991. The

organization had already made its presence felt in the hospitality and real estate

sector, and now it has created a landmark in the Retail sector with Shoppers' Stop.

Shoppers' Stop is famous for the expertise and acumen relating to the current

practices of the industry. It provides quality services, products and the right kind

of shopping environment. It has developed itself as a household name and has set

high standards for itself with the mission statement: " Nothing but the best".

In 2005, the company had 25 stores with a turnover of Rs. 1000 crores and 7 lakh

sq. feet retail space in the year 2005. The average age of the employees in the

organization is 25 years.

Highlights of Q4FY10 Gross Retail Turnover at Rs. 422.9 crs; jump of 20 %

Net profit at Rs. 16.4 crs; increase of 197 %

EBITDA at Rs. 27.1 crs, up, by 100%

Like-to-like growth at 16%; compared to 3% degrowth last year.

Shoppers Stop launched its first store in Punjab Amritsar and third store in

Bengaluru; taking the total to 30 stores across India

Launched 3 new Crossword stores

The Board of Directors has accorded their In Principle approval subject to

requisite approvals, for acquisition of balance 32% of share capital of Hypercity

Retail (India) Ltd., (Hypercity) from its promoters, pursuant to an Option

Agreement, executed with them. The Company already holds 19% stake of

Hypercity. The option for this balance acquisition is available with the

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Company till June 30, 2010.

Highlights of this year:

Gross Retail Turnover at Rs. 1570.9 crs up by 12 %

Net profit at Rs. 50.2 crs; increase of 179 %

Total stores added during the year: 4 Shoppers Stop stores, 4 Crossword

outlets, 2 MAC stores, 2 Estee Lauder stores and 1 Clinique store

15% dividend recommended for the year, subject to approval of shareholders

RPG ENTERPRISES

The history of RPG Enterprises goes back to the 19th century. In 1979 Mr. RPGoenka took the initiative to set up RPG Enterprises. Presently it has a turnover of

US$ 1.65 billion (Rs. 7472 crore) and assets worth US$ 1.8 billion. Among the

fastest growing groups in India, it is operating successfully through more than 20

companies in 7 business sectors, namely Retail, IT & Communications, Power,

Transmission, Entertainment, Life sciences and Tyres.

The organization believes in responding to a business opportunity, making

optimum utilization of resources, and inspiring people to foster teamwork. Qualityis another important parameter for the enterprise to improve continuously and

satisfy customers in the best possible manner.

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Performance, excellence and entrepreneurship are ingrained in the organization

as core values. It is a place where the employees are aware of the Corporate

Social Responsibility, involving in various social activities, sports and arts. The

organization operates through various retail formats such as supermarkets,

hypermarkets, music stores and health and beauty products outlet.

Its largest chain of Spencers offers a complete array of products and durables. It is

operating through 80 stores spread in 20 cities, and is still growing rapidly. Every

month nearly 2.6 million people walk in its stores. The stores are located in

Bangalore, Mumbai, Delhi, Chennai, Trivandrum, Hyderabad, Faridabad, Vizag,

Aurangabad, Pune, Ghaziabad, Cochin, and many more.

The music store of RPG Enterprises - MusicWorld delivers its products through 170

outlets spread in 21 cities. The enterprise has also set up a training institute for

Front Line Staff and Staff Managers known

as RPGInstituteofRetailManagement(RIRM) .

Lifestyle is an international fashion store of the Landmark Group, a Dubai-based

company. Lifestyle created a revolution in the Indian Retail Industry by bringing a

truly international shopping experience. It was launched in Chennai, and now it is one

of the largest professional retailers spread across 3,25,000 sq. ft. in various cities

such as Chennai, Gurgaon, Mumbai, Hyderabad and Banglore. It is a heaven for

shoppers with a vibrant and spicy lifestyle. It provides a wide choice of products at

affordable prices with a convenient world-class environment and a friendly layout.Being one of the best shopping destinations, it has won the ''Most Respected

Company in the Indian Retail Sector' and the 'Most Admired Large Format Retail

Company' awards in India.

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Crm Final Proj