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Customer Relations Management: Analysis of The CRM Strategy of Towngas
Customer Relations Management: Analysis of The CRM Strategy of Towngas
MANAGEMENT
Submitted to:
PROF: S GARIMELLA
SUBMITTED BY;
A Hong Kong and China Gas Company Limited also called Towngas is considered as the main
piped gas distributor of Hong Kong and China. It is also considered as the oldest public utility in
Hong Kong and the first gas utility in the Far East.
The company was founded during 1862. As of now, it has more than 3,000 km of network of
pipeline, with an average of 85% of its economic reach. It supplies over 1.5 customers in the said
territory as at 2004. The main business of the company focuses on its production as well as
distribution of gas, together with the marketing of gas and other related appliances.
Aside from that, the company is also offering complete after-sales services. As part of the
corporate social responsibility of the company, it has diversified its services regarding the green
businesses such as the LPG filling stations as well as the operation of the landfill gas.
It has three Customer groups i.e. Residential, Commercial and Industrial Customers contributing
45%, 35% and 03% respectively of the company’s turnover and 17% is contributed by
equipment sales and other sources
The company has a well developed internal framework for effective management of the
customers, that is through a well sanctioned marketing Departments:-
- Retail Marketing managed by domestic house hold customers
- Commercial and Industrial marketing serviced restaurants, hotels and supermarkets
- Industrial and Project markets was responsible for residential project building and
accounts servicing for real estate development projects.
The company embarked on a wide range of growth and business strategies right from the 1990s
due to increasing competitions and the dire need to strengthen its relationship with the
customers.
- Maximizing values through improving quality and or service and reducing costs and lead
times.
- Transit from traditional utility company mindset to a market and customer focus
- With better information at finger tips and best practices codified into business policies,
Towngas wants to optimize service for its customers and maximize revenue.
- Superior Quality Management (1992) (A superior quality service group was formed,
quality service committee established for each department with diverse representation,
the team had the responsibility of identifying opportunities for constant growth
CRM Approach
2. Customer Database and Data Mining (customer profiling with detail specific
requirements of each customer, continuous update of data)
3. Internal Alignment
5. Internal Alignment. Shift from engineering focus to customer and market focus through a
corporate wide culture change. An Executive Committee was established to put in place
an effective management system
The Towngas shared value that addresses the needs of customers, shareholders and
employees were instituted as part of its internal strategy.
The Customer Value Formula also developed for employees to follow aimed at
maximizing these values through improving quality and or service and reducing costs and
lead times ( Customer Value = Quality x Service)
7. Sales and Marketing Strategies (targets the sophisticated segment of the customers- the
Towngas avenue is developed)- Focus on lifestyle marketing
Mia Cucina (Kitchens by Towngas). Recently launched in its Tsim Sha Tsui shop.
- This new business concept offers exclusive kitchen layouts planned by professional
consultants specially brought together by Towngas.
- Mia Cucina’s services include design, supply and manufacture of high-quality cabinets,
as well as associated kitchen hardware and appliances. Riding on Towngas’ heritage of
cooking expertise and customer care, Mia Cucina provides a one-stop service tailored to
specific needs and personal lifestyles.
3.) Perfection and Passion – We're all about freshness and quality food
The best ingredients from different countries make for delicious flame-cooked food. An exciting
innovation is home-made pasta, the perfect complement for Mediterranean-inspired seafood and
meat prepared by chefs with attitude.
1. The development of customer value focus resulted in the alignment of corporate culture
and value, shifting from a traditional utility company mindset to a market and customer
focus and thus a more competitive organizations
2. Growth in residential customer base by 4.5% in 2002. Overall there is a 0.3% combined
growth (commercial and industrial customers inclusive) despite the changing
Government policies on housing.
3. The overall turnover, gas sales and profitability showed a steady growth despite the
economic slow down and fierce competition (Exhibit 6 shown increase of HK$ Millions
458, 814, 274, 787, 157, 415, 809, 206 and 21 from 1993 to 2002).
5. The recognition of the CRM Efforts by Hong Kong Retail Management Association is
also one key success of the strategy. Towngas got a Customer Service Award in 2002.
6. Increased customer satisfaction rating and Employee productivity increased steadily over
the years from 1998 to 2002
1. Up gradation of the customer information system (CIS) into part of the larger operational
system to support the whole company
2. Ability to withstand pressure from any competitor. These strategies makes it very hard
for a new company planning to start implementing any CRM in a similar undertaking
since it is well entrenched and has build its system overtime and has a well documented
best practices to engineer its processes.
3. Whether a similar system is put in place by any of its competitors the differentiating
factor is life time relationship it has established with its clients and the corporate culture
in place.
4. The Shared Value Model shall form the basis for its future growth due to the holistic
approach enshrined in its design.