RI SAI KEROX ot Petrol Bunk, ASN College Road TENALI-Cell: 9246781688 >. Petrol Bunk, se NALLCell: 9246781688 CUSTOMER RELATIONSHIP MANAGEMENT / CONSUMER BEHAVIOUR & CUSTOMER RELATIONSHIP MANAGEMENT | MBA, Semasrer - IIL According to the syllabus of Jawaharlal Nehru Technological University, Kakinada & Andhra University, Vishakhapatnam Mohd. Farook Azam MBA, BSc. Assistant Copy Editor, Thakur Publication Amit Kumar MBA (Hons.), B.Tech Assistant Copy Editor, Thakur Publication Books are Available for Online Purchase at: tpplorgin ea THAKUR PUBLICATION, HYDERABAD * Lucknow * Meerut * Bengaluru * Bhopal * Jaipur Chennai * * Ahmedabad * Pune * Bhubaneswar ar * Bhopal * Kerala *urBr0 ddr aan ‘ousaam wos TeUsQuopeonqndanyeM, 4 sn pours asvalg “woREpe 1x9UE MO 10g [nash aq [1m YOR ‘sroMs—] pur swuapnis sap ino wiogy siuswonordury 10y suonsoSBns ajqenpea Zunoodxo Ome 2f4 “ULO} aArsuayordutos pue wsfouod ur speyuoUTEpUNy exnoa{qns oy Parmpnns avy 0/4 “r00fqns axp Jo sioadse jeSnowad se [fom se A1oatn Jo @8po|mouy paouejeq azmnbse pmnoys siuopmis 3wIp oAdTOg ATaIOUIS OM, “soo Zunsisse snouea pue samy Jo diay op IM play sep noqe s8parmowy oarsusyouduios pue iuexno you! ay yA suopms oprAcid 01 st yooq sp Bupedosd 10 uonuoWUT ayy, “somosor uoHoHdde ue pue 1001 Suruzea] eyqentea v Yoogrxas sm puy pynom ‘surewop qoMeTeuEUE somo pue Sunaxeur ur suontsod jeeSeueur 10y Zuundse are oy osomy se.[Jom se ‘uy Apuaxmo axe oYM SOU, “aANDadsiod yoyseUI FuBrowD We WO paseq st 3 “ploy qowoFeueU ur sosinoo snows Sumnsind Suapms jo qwowermbar pue poou op uo paseq st ,jusmeSeuEyy, Arysuone|Y 1ouoysny pu Ino}vyog Joumsuo;,, Jo yooq StH, “s1ouro}sno amp YIM suoneyos Surseueur ‘ur sdjoy WA “dnoxd uy pue AyTenpratpur yioq sseo01d Supywur-uorstoop yekng a purysispun 0} sid “AB0jO!0s “ABopoyOASA oF] souN|drostp jUaraZyIP wosy doou0D saye aI ‘sommouoss pue ABojodonpue spofans sry “Ang Aoyp exoym wroxy pue Ang Komp ym “kag Koy ways ‘Ang Kamp rey ‘nq 2[doad moy Jo Apmus ayy st morvyeg roumnsuoy | aonfatd sperezarco so onus mo Ss2 pemey 2%9 Yeo HONS (EE ‘som 12962900260 9OH “umsBeUNIA peo OY HodeC AeOA AERERNT COT ‘aresSere EA riage] 201 desea (20H odog OOM AWAUSDVERTOA HS. 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The success in every work-output is directly related to the effectiveness of the team, and our whole team played an important role. and foremost, we acknowledge our intellectual debt to the Directors of Thakur Publication, Mr. Saroj Kumar and Mrs. Veera Thakur for motivating us to work towards our goal. We are indebted to our Gurus who gave us so much knowledge and support throughout our life and today by their blessings we are able to write this book. Last and not least, we would share our appreciation towards the Crew members of Thakur Publication especially to Mr. Amit Kumar Mishra, Mr. Gaurav Chandra Kashyap, and Mr. Saumitra Veer Singh whose ungrudging and everlasting help has made it possible to shape the endeavour in a right direction. ‘We are also thankful to Our Parents for their constant support and encouragement. Last but not the least, we would like to thank the Almighty God, for giving us this privilege and opportunity to share our knowledge with others, Mohd. Farook Azam Amit Kumar | Consumer and Marketing Strategy 3 SYLLABUS CUSTOMER RELATIONSHIP MANAGEMENT / CONSUMER BEHAVIOUR AND CUSTOMER RELATIONSHIP MANAGEMENT Unit-I: Introduction to the study of Consumer Behaviour — ~ Determinants of Consumer Behaviour — Profile of the Indian Consumer. Unit-II: Perception — Nature — Perception and Marketing Strategy, Motivation — Motivation Theories and Marketing Strategy — Personality. Unit-II: Attitude Measurement and Change — Self Concept and Life Style Marketing, Influence of Social and Cultural factors on Consumer Behaviour — Family, Reference groups, Cross Cultural Variations in Consumer Behaviour. Unit-IV: Consumer Decision Process — Problem Recognition — Information Search — Evaluation of alternatives and selection — Post Purchase Behaviour — Organizational buyer Behaviour — Diffusion of Innovation. Unit-V: Customer Relationship Management: Facets and Elements of CRF — CRM Process — Importance of CRM — Planning and Managing CRM Programme — Concept of Customer Loyalty ~ Customer Value Assessment — Customer Retention Strategies — CRM in services. 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JO AIOOYL SpaaN S,PURTIIDOW. “Z'EE'Z AIO, KYOTEIAH POON S,MOTSEI “T:EE'Z ABoeng Suey pue saoay] UoNeANO “EET uonPANOW Jo sse00lg “TET uonvanoy Jo uonruyag pure Summa “EZ uoneanopy = “EZ aNoLARyeg seWUNsUOD Uo LORdedseg Jo soUDNYUE “9°77 ABoreng Bunayrepy pur uondes1g “$77 uondasriog Surouanyuy sxO}OeT “PTZ ssaooig femdaorer “¢°7Z wondsoreg JO MEN “ZT uondeoieg Jo uontuyog pue Suma “1-77 uondarg “ZZ anoraeyog, souMSUC Ud sive, TENPIAIPUE Jo souonyay — “1'z Ayqeudsrag pur uoneanoy ‘uondaszag :z 19, sIONOXY “ET JoUuINSUOD UETpUT Jo suJONeY UONdumNsUOD MeN “EY ZT spuexy Jounsuog SusueyD -Z'P'T'T moraeyog souINsUOD UeIpUT UF eFUeYD Jo SANG “Ty'TT MOTAvYyag JoUMsUOD UEIpUy BuIFueYD —“f'Z"T IMOTARY JoUINsUOD Jo ANSIEAI’ §—“¢-Z"T sioumsuog ueIpUy Jo soNsHDITeYD “ZTT uononponuy §“T'Z"T sroumnsuog werpuy amp Jo yorg “ZT ABareng SunoyxY pue Ioumsuoy — “9° T'T MOALYDg FOUIMSUOD Jo soueyOdWT “STL amorAvyeg JouINsUOD SULPMS JJ POON. “TT AMOTALYEY JOUINSUOD Jo SJUBUTUINEG §— “E"T"T ANOIALYeg FOWNSUOD Jo aIMEN —“Z"T"T -MOrABYEg J9UINSUOD Jo UONTUYS pue Suro “TTT - MorAvyog roumnsuoy “TT AMoravyeg JaumsuoD 0} uoHSNpoHuy :T WU, syuazUu0g on3.4.3.1. 3.4.3.2. 3.4.3.3. ‘Types of Reference Groups Role of Reference Groups Influence of Reference Group on Consumer Behaviour Influence of Cultural Factors on Consumer Behaviour Introduction Culture Characteristics of Culture . Factors Affecting Culture . Influence of Culture on Consumer Behaviour Cross-Culture Variations in Consumer Behaviour Cross-Cultural Values Cross-Cultural Differences influence of Cross-Culture on Consumer Behaviour Exercise Unit 4: Decision Process & Organisational Behaviour 41. 411. 41.2. 4.13. 413.1. 4.13.2. 4.133. 4.1.4. 4. 4.1.5.1. 4.1.5.2. 42. 42.1. 4.2.2. 423 424. 42.5. 4.2.6. 43. Consumer Decision-Making Concept of Consumer Decision-Making Consumer Decision Process Pre-purchase Process Problem Recognition Information Search Evaluation of Alternatives and Selection Purchasing Process Post-purchase Process Consumer Satisfaction and Dissatisfaction Cognitive Dissonance Organisational Buyer Behaviour Introduction Nature of Organisational Buyer Behaviour Factors Influencing Organisational Buyer Behaviour Organisational Buying Situations Organisational Buyer Decision Process Consumer Buyer Versus Organisational Buyer Diffusion of Innovations 115) 115 116 116 117 119 123 124 129 130 131 133 133 134 135 139 141 143 144 Introduction Diffusion Process . Basic Elements of Diffusion Process .2. Factors Influencing Rate of Diffusion ‘Consumer Adoption . Adoption Process . Factors Influencing the Adoption Process Exercise Unit 5: Aspects of CRM Customer Relationship Management Meaning and Definition of CRM Characteristics of CRM Facets and Elements of CRM Key Principles of CRM Goals of CRM Functions of CRM Types of CRM CRM Process CRM Strategies CRM Methods for Studying Consumer Behaviour Importance of CRM Limitations of CRM CRM Programme Introduction ‘Components of CRM Programme ‘Types of CRM Programmes Planning CRM Programme Managing CRM Programme Measuring Effectiveness of CRM Programme Considerations in CRM Programme ‘Customer Loyalty Concept of Customer Loyalty Customer Loyalty & Satisfaction Loyal Customer Ladder Building Customer Loyalty Importance of Customer Loyalty 144 145 146 147 149 150 151 153 154 154 155 156 159 161 162 163 165 167 169 170 172 173 173 173 178 179 182 185 186 186 186 187 189 191 194aoadxa Kau emp Saotasos pur sionpord. eyoind “10g Buryoreas ur Kejdstp {Saou soup Aysnes Jo Buisodstp pur ‘Bunenyea ‘Bursn * SIOWNSUOD JHA INOIALYDG ap Se PauLJSP 9q Ue INOIAEYaq I>LINSUOD,, sqnuey seze] ayse'] pue uEWyYDS “H Uos] 0} BUIps099y +_siuem pur spaou Aysties 01 saduatIadxd 40 svEpt “S2OTAIOS ‘sonpord so asodstp 40 ‘9sn ‘aseyoind ‘i99[9s sdnox3 30 s[eNPIAIPUL Woy poajoaur ssoooud oyp St INOLARYDQ FoUINSUOD,, “UOMLOJOS oF SUIPI0IIY _,SouISop puke spadu sfatp AysHES OF se 0s saoraias pur sionpord jo Suisodsip pue ‘Sunenfeaa “Bursn ‘Burseyound ‘Bunssjas 10} SuTyoIeds uoym UL aBe3ua ojdood sontance pur ssooosd otf SI ANOIABYDQ JBUINSUOD,, APPT PUE YP oF Buypsoooy “(Apjeam 30 Kpysomtg ‘ApyUOUT) saver uoNduInsuoD au pu *(paq 01 3ul03 o1030q ‘Teor AxoAo Joe ‘BunLIOUr stp Ut) so1ouanboxy a8esn “(saris [eotpaut ‘saris yerouss “exreu Jadns) aseyoind Jo sooeid “Gnopo tour peq Jo py 193 01 “yNea} WaHTyA PUL UOIysHIG OV ‘sures 2AoWIar 01 ‘SanTABD WHOAaId o1) Burg Joy suoswar “(puesg aA spuvig ouous8 ‘pueig [euone) spueg “(duund v yim 30 poddins “reindax ‘Jo8) quer se yons sturod ureniao asXeue pinoys Kamp uy ‘a1sedypoor Burknq Ut srumsuos Jo moraeyaq emp Apms oy quem siOOYIUL Jf ‘2[durexa s0q “porpour ajqesojoud you oyp St MorAeyaq Bung HN jo siskyeue ‘soouosoyaid pur soyse) ,S¥oumnsuoD ay PUEISIOPUN OF FOPI0 UT -asodind uondumsuos 10y Kauour pue 10339 ‘oui “art ‘soomosax [enUDIOd s19Ip ayeo0][e 01 sTeNprAIPUT Jo sseoosd Suryeut -worsioop st 11 ‘A[peorg “amoyaeysq sadnq JO InofAeysq Jesn pus sanoraeqoq Suing suMsuos se paulo: os[e st snotAeyaq JeuINSHOD “suonesrueS10 pure sdnox3 ‘spenprarpur Jo ssaooid Suppeur-uorsfoop oy sfeoras Aprus styL, “soruMoUoS pue ‘ABojodonpue *Fojors0s ‘ABojoyoksd ayfy] seaxe Jo stsu0o Avur ss003d | SI, ‘SeoTArOS pure spook am Jo asodstp pue eseyomd “109J9s Oy asn | fotn sossoooid ay pur sxoumsuos Jo Apms ayp st moraeyeq JouNsuoD ANOARYP_ JHUMsu0Z Jo uopUyeG pue Suey TTT | Bate ET: RET (al) [eke a fos tle tolalsleRailh a [rama] ur (Laqup) snorseysg 25uINSUED oF woNIMPONMT | STAC mela tele) 907 0t zz 10z oz 10z 007 Ler 961 Sor sor eat wad oungmacneae™ ous 18 ¥ sxodeg PPO Sorpms ase estorexg, SOO1MOg UT ARID Jo suoneTy SOOIAIOS UT ARID Jo siyouag, Agsnpuy axvompreery ur WUD wonPA UT AD SHNOL, UE ARID Jonas [eloueuLy pue Suppueg UE WD uononponuy SOOTAIOg UE WED uonusry rouT0sn5 Jo soumniodury, soioreng uonuasy souroisng, wonUd}ey JoUIOISND Jo s[oAIT ssoo0ig UonUaaY rowroIsn wononponuy uopusyey rouroysn) woneaID onye A JoWIOIsND Jo souvaTUsIG ‘ane A JoWO\SND Jo TuOUFaMsvaA quDUISsessY ONTeA IOUIOISND Jo spoTPay, quouissassy anqeA roMo}sn5 ur sdag wononpontiy yusutssossy onfeA JourIsN>. ane “Ss LOS ‘99S “oS v9OS “eos TIS T9S ‘oS oss vss ess wss TSS S +rSs evs THs Tes vs2 MBA 3rd Sem. [Customer Relationship Management (CBCRM)] 1.1.2, Nature of Consumer Behaviour ‘The nature of consumer behaviour is discussed below: 1) Varies from Customer to Customer: The manner in which all the consumers behave is not the same, i.., it varies from one consumer to another. Several individual factors like, the person’s culture, his life style, his social class, etc., are responsible for this variation. 2) Varies from Product to Product: The behaviour of consumers also varies according to products. The consumers may buy large quantity of one product, whereas they may consume very little or nothing of some other product. 3) Varies Across Geographical Regions: The behaviour of consumers also varies across regions and geographical locations. For example, the behaviour of consumers in rural and urban areas differs from eachother. Rural consumers purchase sachets of shampoos, whereas urban consumers tend to buy large packs. Similarly, the consumers of South India vary in their behaviour from the consumers of North India for the products like hair edible oil, etc. 4) Important for Marketers: It is very important for marketers to have an understanding of consumer behaviour. They need to understand the tastes, habits, likes and dislikes of their customers as well as prospective customers. This knowledge helps the marketers in making decisions regarding marketing mix and in designing other marketing programmes, 5) Reflects Status: The buying behaviour of a consumer depends on his status. At the same time, the kind of products and services that he buys also reflects his status. A person who buys luxury products like, Mercedes Benz or a Rolex watch is considered as a person of superior social status in the society. 6) Results in Spread-effect: The buying behaviour of consumers also has a spread-effect, i.e., the purchase of certain product made by one consumer may encourage another person to buy the same product. A person may decide to purchase those brands of cars, electronic items, watches, TVs, etc., which his friends and colleagues usually buy. This is one of the reasons why companies use celebrity endorsements to promote their products. 7) Improves Standard of Living: The consumer behaviour also results into improved standard of living for the consumer. The consumer increases his quality of life by buying superior quality of products and services. Introduction to Consumer Behaviour (Unit 1) 3 8) Varies from Time to Time: The behaviour of consumers can also evolve over time. This is because of changes in the person’s education, social status, stage in the family life cycle, disposable income, etc. For example, a person who travels by his scooter may decide to buy a car after his promotion and increase in family members. 9) Information Search: Consumer behaviour also depends on the information search. Consumers are not in a position to purchase any product or avail any service until they have information regarding it. 10) Influenced by Various Factors: Behaviour of consumers is affected by a lot of factors such as, social, psychological, personal, cultural, societal, demographical, marketing, etc. 1.1.3. Determinants of Consumer Behaviour ‘There are various factors and determinants which directly influence the buying behaviour of customers. They are as follows: 1) Cultural Factors i) Culture: Culture is the key element for determining individual's buying behaviour. The cultural factors influencing the features of a | society consists of earned values, norms, rituals, and symbols. For example, a child attains a defined set of values and behaviours from his family, friends and key institutions. In U.S., a child is open to adapt values such as individualism, freedom, external comfort, humanitarianism, efficiency, practicality and youthfulness. Sub-culture: A culture has several sub-cultures which assist the marketers to easily recognise and socialise with its customers. It includes nationalities, religions, racial groups, and geographic regions. Many a times, these sub-cultures are defined as a market segment and marketers offer products based on their needs and wants. iii) Social Class: Mostly, every individual in the society is a part of some social class. These social classes are defined on the basis of caste system which indicates specific roles, which cannot be changed. Often, the caste system is transformed into a social class. Social classes are comparatively identical and permanent societies. “These classes share similar interests, behaviour, and values, ii) 2) Social Factors i) Reference Group: A person or a group who is identified as a reference to an individual, defining the fundamental or fixed attitudes, behaviours or values, is known as a ‘reference group’. Being a social class member, an individual always compares his ‘es and opinions with the defined abilities of a reference.