Case Study

Role of Customer Relation Management

in Indian Market

Customer Relationship Management (Crm)

What is Customer Relationship Management (CRM)?
Customer Relationship Management (CRM) is an
information industry term for methodologies,
software, and usually Internet capabilities that help
an enterprise manage customer relationships in an
organized way. Customer Relationship Management
has been in the limelight since the past decade. CRM
has emerged in recent times because it is easier and
more profitable to retain existing customers than to
acquire new ones. It is a business strategy to learn
more about customers’ needs and behaviors in order
to develop stronger relationships with them. The
relationship delivers value to customers, and profits
to companies.
According to industry view, CRM consists of:
* Helping an enterprise to enable its marketing
departments to identify and target their best
customers, manage marketing campaigns and
generate quality leads for the sales team.
* Assisting the organization to improve telesales,
account, and sales management by optimizing
information

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 shared by multiple employees, and streamlining
existing processes (for example, taking orders using
mobile devices)
* Allowing the formation of individualized
relationships with customers, with the aim of
improving customer satisfaction and maximizing
profits; identifying the most profitable customers and
providing them the highest level of service.
* Providing employees with the information and
processes necessary to know their customers,
understand and identify customer needs and
effectively build relationships between the company,
its customer base, and distribution partners.
From the technology perspective, companies often
buy into software that will help to achieve their
business goals. For many, CRM is far more than a
new software package, the renaming of traditional
customer services, or an IT-based customer
management system to support sales people.
However, IT is vital since it underpins CRM, and has
the payoffs associated with modern technology, such
as speed,...

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Overview:

Retail is India's largest industry, accounting for over

10 per cent of the country's GDP and around eight
per cent of the employment. It is one of the most
dynamic and fast paced industries with several
players entering the market. The growing middle
class, who has a substantial disposal income in hand,
constitutes the largest shoppers' segment in India.
Its consumer behaviour is changing continuously and
reaching new levels of tastes and preferences. IT is
emerging as major tool of customer relationship in
the retail markets in India. They are doing this by
aggressively adopting IT applications to streamline
from accounting and human resource management
to core functions like buying, merchandising, supply
chain management, store management, marketing
and especially customer relationship management.
This present paper highlights the strategies followed
by the retail industry in India for retaining their large
customer database. It also made an attempt to bring
out the applications of information technology in
retailing

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Introduction:
Retailing in India is gradually becoming one of the
key industries for economic development .The
changed consumer behaviour and in creased
standard of living in the growing middle classbrough
t arevolution in Indian retail scenario. Modern retail
has entered India as seen in sprawling shopping
centres, multi-storeyed malls and huge complexes
offer shopping, entertainment and food all under one
roof. The other reason is a significant change in th
demographics. A large young working population
with median age of 24 years, nuclear families in
urban areas, along with increasing working-women
population and emerging opportunities in the
services sector are the key growth drivers of the
retail sector in India..
Now there is a tough competition between the
organized retail chains and unorganized retailers...

Customers are the "profit –centre" in an

organization. The existence of organization depends
on the customers. With this the concept –Customers
Relationship Management has come into the picture.
The main aim is to maintain a good relationship with
the customers. It is the process of creating,
maintaining, and enhancing strong value-added
relationships with customers and other stake
holders.

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Customers Relationship Management is the strategy
that aims to understand and, anticipate, manage and
personalize the needs of an organization's current
and potential. The Rs.85,000 crore FMCG market in
India is growing at a fast pace despite of the
economic downtrend. The increasing disposable
income and improved standard of living in most tier
II and tire III cities are spearheading the FMCG
growth across the nation. The changing profile and
mind set of the consumers has shifted the thought to
"Value for Money" from "Money for Value". Over the
years companies like HUL, ITC and Dabur have
improved performance with innovation and strong
distribution channels. Their key categories have
strengthened their presence and outperformed peers
in the FMCG sector.

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Retail: In Detail

The emergence of Retail in India is cause for success

of Indian organized Retail & Marketing. With the help
of modern management techniques we will become
the specialist Retailers in future. We know that the
relationship between the Retailer & customer is very
close than other chains of distribution.

India is a nation of shopkeepers. We can see more

than 16 million plus retail outlets in India, and India
has highest density of retail outlets in the world.
Retail Industry in India is at present estimated to be
more than US $ 250 billion. On that part of
organized retailing is estimated 3.5% i.e. $ 7.47
billion. By the year 2010 the vision of Industry is to
attained more than the goal which was estimated US
$ 23 billion in organized retail.

If we are comparing the growth of retail in India as

compare to China we will find that China has more
growth than India. In the year 1996 the per capita
GDP of China was US$ 675 and it increased US$ 434
in year 2003 i.e. in the years 2003 the contribution
of retailing in GDP per capita of China was US$ 1109.
But in India, in the year 2005 it was only US$ 710.
We can say that in 1996-97 (or in 90's the position
of retail market in China was very strong than Indian
Retail market.

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If we are taking as base the size of retail market in
India it was only US$ 215 billion in 2005 but in China
it was US$ 225 billion in 1996 & US$ 400 billion in
2003. It means the status of India's size of retail
market is not very matured as compare to China.

The share of organized trade in retaining in India

was quite more than 4% in 2005, but it was between
7-8% in 1996 and 17% in 2003 in China.

At present USA is biggest retail market with 85%

share of organized trade in retailing at the second
step. There is Malaysia with 55% plus, Thailand with
40%plus , Brazil with 35%plus, Russia with
33%plus, Indonesia with 30%plus, Poland with
20%plus, China with 17% plus & then India with 6%
plus only.

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Organized Retail:

Organized retail segment has been growing at a

blistering pace, exceeding all previous estimates.
According to a study by Deloitte Haskins and Sells,
organized retail has increased its share from 5 per
cent of total retail sales in 2006 to 8 per cent in
2007. The fastest growing segments have been the
wholesale cash and carry stores (150 per cent)
followed by supermarkets (100 per cent) and
hypermarkets (75-80 per cent). Further, it estimates
the organized segment to account for 25 per cent of
the total sales by 2011.

It is expected that by 2016 modern retail industry

in India will be worth US$ 175- 200 billion. India
retail industry is one of the fastest growing industries
with revenue expected in 2007 to amount US$ 320
billion and is increasing at a rate of 5% yearly. A
further increase of 7-8% is expected in the industry
of retail in India by growth in consumerism in urban
areas, rising incomes, and a steep rise in rural
consumption. It has further been predicted that the
retailing industry in India will amount to US$ 21.5
billion by 2010 from the current size of US$ 7.5
billion.

Shopping in India has witnessed a revolution with

the change in the consumer buying behaviour and
the whole format of shopping also altering. Industry

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of retail in India which has become modern can be
seen from the fact that there are multi- stored malls,
huge shopping centres, and sprawling complexes
which offer food, shopping, and entertainment all
under the same roof.

India retail industry is expanding itself most

aggressively; as a result a great demand for real
estate is being created. Indian retailers preferred
means of expansion is to expand to other regions
and to increase the number of their outlets in a city.
It is expected that by 2010, India may have 600
new shopping centers.

In the Indian retailing industry, food is the most

dominating sector and is growing at a rate of 9%
annually. The branded food industry is trying to
enter the India retail industry and convert Indian
consumers to branded food. Since at present 60% of
the Indian grocery basket consists of non- branded
items.

India retail industry is progressing well and for this

to continue retailers as well as the Indian
government will have to make a combined effort.
The report examines the growing market for FMCG
market in India. This starts with an overview of the
Industry in India and goes on to explain how product
and demographic categories across the nation have
added value to the Industry. The report examines
the recent development within the industry and tries
to gauge the impact in shaping the landscape of the
FMCG market. It also contains a summary of the key

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players, including their product portfolio, business
operations, and strategies. The report concludes with
an industry outlook section. Finally the report
mandates with the outlook for the year 2013,
considering the current events and growing
economy. The report concludes with a list of growth
drivers, breaking them into demand side, supply side
and systematic drivers.

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Analysis and Interpretation:

1) Do you come to Vishal Mega mart for shopping

regularly?

The above shows that 73.33% customers come to

Vishal for shopping regularly. The numbers of regular
customers are more. So to retain them different
loyalty programmes should be introduced.

2) Which one do you like in Vishal?

The above chart shows that 83.34% customers

prefer offer. Manly 25% offer on Wednesday &
Thursday is preferred by customers. So by giving
offer on these days it can satisfy its customers

3) With whom would you like to shop?

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The above chart shows that 55.33% customers
prefer to come for shopping with family members. So
combo family offer pack should be more.

4) Do you find the products easily in Vishal Mega

mart?

From the above chart it is clear that 53.33%

customers don't find the products easily. So the
concentration would be given to visual merchandise.

5) Are you satisfied with the sales force' behaviour?

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Above chart shows that 86.66% customers are
satisfied with the behaviour of sales force. So it
would increase the satisfaction level.

6) Do you like the shopping environment inside the

Vishal Mega mart?

The pie chart shows that 64.66% customers are

satisfied with the shopping environment inside. It is
clear that ambience is preferable.

7) How much can you spend shopping?

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According to the chart, customers spending capacity
falls between 500-1000(36.66%).It is the maximum
capacity.

8) How is the billing process in Vishal?

According to the chart, billing process 50% is good &

50% average. But the problem is with the coding
system.

9) Which of the following do you prefer for

advertisement?

The above chart shows that 46% customers prefer

mobile SMS and they have shown less interest in TV
which only 10%.

To get information about offers and new arrivals

about.

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The following are some problems faced by the
customers. These are collected from the
feedback.

* Customers are not satisfied with the quality of the

products.
* Sometime confusion about the offers.
* Customers get confused about the way of the
sections.
* Varieties of the products sometime not preferred
by the customers.
* They are not satisfied with the parking facility.
* Sometime the customers are not getting the help
of sales force.
* Lack of sales women in women's section. Problems
faced by the ladies.
* Customers are not aware about the new arrivals.
* Lack of advertisement.
* Customers face size problems.
* Proper colour sheds are not available.
* Stocks problem is also present
* There is no complaint box.
* Complaints of the customers are not checked.

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One Best Example is as Shown below:-

The Lost Customer Relationships in the Indian

Retail Industry :-

Recently I visited a supermarket, after my shopping

when I was about to pay my bill, the cashier offered
me their membership at nominal joining price and
showed me a few benefits for enrolled members. The
same incident is repeating at every retail outlet.
Every retailer is trying to tie the customer by issuing
a membership at a nominal price and showing
them a few benefits. Same is the case with Loyalty
programs, instead of building true customer loyalty
these loyalty programs are becoming sales
campaigns which only aim at increasing revenue
from customer. With so many programs and
memberships customers are treating these as sales
pitches rather than relation enhancement/building
programs. Companies are forgetting the basics of
building relationships and are actually trying to tie
customer to their outlets through memberships and
Loyalty programs. Customers are humans and not
mindless creatures to stay still if tied to something.

One decade back before the emergence of organized

retail sector, Indian retail market was dominated by
“Kirana*” shops, where the shopkeeper/owner was a
part of the same community where the customers
lived. These Kirana merchants knew the
preferences, interests, needs, wants, any events in
the customer family, any emergencies, financial
issues, etc of the customers. This is more than 360
degree view of a customer; this helped the Kirana
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merchant to sell the right product to right customer
and even give credit at times, if required. Since they
know the customers personally Kirana shopkeepers
could give customers credit based on their financial
abilities and based on the need and situation of the
customer. They rendered a helping hand during
emergencies and thus gained customer trust and
loyalty. Before the advent of organized retail such a
strong bond existed between customers and retailers
in Indian retail market, but as the organized retail is
increasing its presence, these bonds are loosening
and artificial relationships are being built where
customer loyalty, customer trust, etc are either
superficial or doesn’t exist. What is happening now is
that companies are trying to do everything
artificially, build artificial relationship with customer
by enrolling them as members, artificial loyalty by
enrolling customer for a loyalty program, and so on.
The fact is that the customer still doesn’t trust the
retailer since for the customer there is no real
relationship! How many customers are willing to
share their personal information with the retailers?
Companies think about building customer
relationships, but talk about experience, satisfaction,
delight and so on, but forget the foremost thing
which is “customer trust”. Your customer service
might be excellent, customer might be happy, but if
customer feels that he/she is paying more for a
nominal product packaged with excellent service the
trust is broken. Retailers are totally different from
manufacturers, manufactures can sell more products
if they build good brand image and have good
retailers in their distribution chain, but retailers
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cannot sell if they don’t build good relationships.
Though a retail chain might have a great brand
value, if the relationship quotient is low, then they
fail miserably. Terms like Brand Loyalty etc have
very minimal controlling effect when we talk about
retailers. There are several big brands which failed
miserably in retail business.

The emergence of Social CRM might help in building

customer relationships if properly leveraged to build
trust rather than considering them as tools to gain
customer information. If companies continue with
the latter perception, soon the customer
relationships die as Social CRM sites can spread the
negative image of companies as fast as they can
spread the positive image! This approach will not
build the trust factor and which will in turn lead to
customer playing safe and not revealing their
personal details. Hence companies should try to be a
part of the communities and build trust in the
customers. Loyalty should be from both sides, don’t
expect customer loyalty if you are not loyal to the
customer. This holds true for retailers globally, what
is your opinion and any inputs on how retailers can
leverage on Social CRM?

* “Kirana Stores” are the typical “Mom and Pop

stores” operated in a single location in towns and
cities where the shop owners are the members of the
local community

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Recommendations:

* Satisfy customers by providing quality products.

* Stocks and varieties should be available.
* Describe customers about the products.
* Inform about the offers through mobile.
* Show the way to particular section by the signs.
* Customers' complaint box should be kept.
* Give description about the products on the TV.
* Greet them when they are entering into the stores.
* Internal branding is needed.
* Proper placement of the signage.
* Conduct some in store games to motivate the
customers.
* Provide them seasonal products.

Conclusion: The Customer-Relationship-

Management should be use to satisfy ever Customer
in the Indian Market.

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