Marketing aspects of CRM with Tesco case study. This starts with CRM history. How to use CRM in marketing. eMarketing & CRM

1. Marketing Aspects of CRM

2. History of CRM
B&S CI
MS
CR
M
R
M
B&S – Buying & Selling
RM – Relationship Marketing
CIMS – Customer Information Management Systems
CRM – Customer Relationship Management
e-CRM- A subset of CRM that focuses on enabling customer
interactions via e-channels (The web, email and wireless)
Time line
e-C
RM
Late 80’s Mid 90’s 2002 - FutureEarly 90’s

3. What CRM with respect to mktg
strategy
• “is a business strategy with outcomes
– that optimise profitability, revenue and customer
satisfaction
– by organizing around customer segments,
– fostering customer-satisfying behaviors and
– implementing customer-centric processes.”
• “is a strategy
– used to learn more about customers' needs and behaviors
– in order to develop stronger relationships with them.”

4. Underpinning Theory
• Customers have many points of contact with an
organisation
• Retaining customers is far most cost effective than
recruiting new ones
• Some customers are more profitable than others
– The “80/20” rule
– For most firms, 80 percent of profit comes from 20 percent
of customers
• Use of Technology

5. Potential Benefits Of CRM
• Customer retention
• Share of customer or share of wallet
• Cross-selling
• Up-selling

6. Potential Costs Of CRM
• IT infrastructure
• Process change

7. Benefits Of CRM For Customers
• Continuity
• A contact point
• Personalisation

8. Three phases of CRM
• Acquiring New Relationships
– You acquire new customers by promoting your
company’s product and service leadership.
• Enhancing Existing Relationships
– You enhance the relationship by encouraging
excellence in cross-selling and up-selling, thereby
deepening and broadening the relationship.
• Retaining Customer Relationships
– Retention focuses on service adaptability –
delivering not what the market wants but what
customers want.

9. Steps to improve CRM
1. Build a database
2. Analyse, define types, profitability
3. Customer selection
4. Activities to delight selected customers
- discourage others
5. Analyse again to see how we’re doing

10. What should be in the database
• Demographics
– How do you get people to provide this?
• History of contacts
• Transaction history or summary
• Response to marketing communications
– How did you hear about us (this offer?)

11. Behavioral Patterns
• Behavioral patterns
• Consumption channel
• Benefit segments
• Degree of loyalty
• Permission

12. Analytically Derived Segments
• Analytically derived
• On-line analytical processing (OLAP)
• Customer lifetime value
• Intangible benefits

13. CRM Applications
*Source: Patricia Seybold Group

14. Customer Types
• Platinum Heavy, reliable users, not price-sensitive, try
new products, loyal
• Gold Large users who push for price breaks, shop around
and not so loyal
• Iron Low volume or intermittent users; cost to serve
them is quite high
• Lead Demanding, want special attention but don’t buy
much and show no loyalty

15. Advantages of CRM
• While company is quickly growing, customers are more satisfied as well
• Service provided in a better way, and a quicker way
• Sales force automated
• Integrated customer information
• Certain processes eliminated
• Operation cost cut, and time efficient
• Brand names more quickly established
• A central database so that everyone in your company can keep track of
customer contacts
• Sales and marketing teams can benefit from having all this inside
knowledge about customers
• Lets you set up rules for distributing work throughout your company
• Lets you pick and choose the functionality that you want

16. • Disadvantages:
-Organizational wise change of priority to customers.
- Significant investment of time and money
- Threatens management’s control/power struggle
- Heightens people’s resistance to change
- Inappropriate integration leads to disaster

17. MARKETING FOR INTERNET
COMPANIES

18. Copyright © Houghton Mifflin
Company. All rights reserved.
1. MARKETING ON THE INTERNET
• Electronic Commerce (E-Commerce)
– Sharing business information, maintaining
business relationships, and conducting business
transactions by means of telecommunications
networks
• Electronic Marketing (E-Marketing)
– The strategic process of creating, distributing,
promoting, and pricing products for targeted
customers in the virtual environment of the
Internet

19. Copyright © Houghton Mifflin
Company. All rights reserved.
E-Marketing
• Through e-marketing
companies can market
to target audiences
© Used By Permission.

20. Copyright © Houghton Mifflin
Company. All rights reserved.
Benefits of E-Marketing
• Open and Instantaneous
Flows of Information
• Enhanced Customer
Service Efficiencies
• Worldwide Scope
– Opens markets to firms of
all sizes

21. Copyright © Houghton Mifflin
Company. All rights reserved.
Consumer-Generated Electronic
Marketing• Blogs
• Wikis
• Public Opinion
websites
• Social Networks

22. Basic Characteristics of E-Marketing
• Addressability
• Interactivity
• Memory
• Control
• Accessibility
• Digitalization

23. Addressability
• A marketer’s ability to identify customers
before they make a purchase
• How E-Merchants Attain Addressability
– Limit access to areas of their web site to
encourage customer registration
– Offer contests and prizes in exchange for
consumer information
– “Cookies”

24. Interactivity
• Allowing customers to express their needs and
wants directly to the firm in response to the
firm’s marketing communications
– Real-time interaction with customers
– Broader market coverage at a lower cost
• Customer corelation

25. Accessibility
• The ability to obtain information available
on the Internet.
– Informs and educates the inquiring consumer
about competing products and prices
– Creates competition for the consumer’s
attention

26. Digitalization
• The ability to represent
a product, or at least
some of its benefits, as
digital bits of
information.
Digitalization has helped
traditional businesses migrate to
online services
© Used By Permission.

27. E-Marketing Strategies
• Product
– Customized orders
– Services growing
• Distribution
– Order processing
– Synchronization
• Promotion
– Consumer in control
– Augments traditional forms
• Pricing
– More consumer information
© Used By Permission.

28. Questions
• What is customer co creation? Give examples of it in different industries
• Give brief history of sales & marketing. When & Why CRM arrived ?
Explains
• Which functions or events require which type of CRM ? Explain how CRM
can be used for marketing
• What are benefits of ecommerce strategy at for modern marketer ?
• What is personalised marketing ? Give examples where it can be used
• Name and explain different marketing CRM software ?
• Write a short note on emarketing ? How can CRM help
• Explain how to do personalised advertisement using CRM

29. Tesco Case Study

30. About Tesco
Tesco is the second largest retailer in the world measured by profits,
and the third largest measured by revenue. Not only does it have
stores in 14 countries across Asia, Europe, and North America, but it's
also the grocery market leader in the UK, Malaysia, the Republic of
Ireland, and Thailand.
Although their success can mostly be attributed to their competitive
pricing, comprehensive product and service range, affiliated programs,
and global accessibility, their aggressive marketing and CRM strategies
have played a central role in helping them retain their competitive
advantage and large marketshare.

31. The Tesco Loyalty Card / ClubCard Scheme
• One of the worlds most successful loyalty schemes
• Partners with other companies such as gas, hotel and car hire
facilities thus giving users more opportunities to earn points
• Different schemes for different family members: Tesco Kids Club,
Tesco Baby and Toddler Club, Tesco Healthy Living Club, World of
Wine Club
• Allows for targeted communication, thus, there are over four million
variations of its quarterly mailing to ensure that discounts and offers
are tailored specifically for the customer
• Insights gained from the analysis of shopping patterns were able to
be actioned into marketing and retail programs which encouraged
customer satisfaction and loyalty to Tesco.
• Customer Question Time sessions are held twice each year, where
12,000 customers participate. This enables Tesco to gather more data
on customer views on product, price, quality, service, and community
involvement (Comment Cards)

32. Product Offerings and Ranges
Using data gathered from Clubcard and comment cards, Tesco
have been able to create a variety of product ranges to suit
different target groups, such as:
● Healthy Living: Over 400 products which are low in fat and
sodium
● Free From: Produced for people who have food allergies or
dietary requirements
● Special Healthy Kids Snacks: A dedicated range of kids food
products that are high in fibre, fruit and vegetables

33. Post Club Card
In the five year period following the implementation of the Club
Card program, sales have increased by 52% and still grow at a
rate higher than the industry average. Store openings and
expansions have increased Tesco's floor space by 150%.
In the online space, tesco.com boasts 500,000 transactions
weekly, totaling nearly two billion pounds in sales each year. The
profitability, plus the size of the tesco.com business and the
number of transactions it completes, makes tesco.com a truly
unique online grocery store.

34. Whats Unique
Tesco focused on the individual. To gain loyal customers, customers must be at
the center of your CRM strategy (as well as the focus of the business itself). It's
not the technology, not customer profitability, not loyalty programs or cards; it's
the customers themselves--- as individuals--- that should truly be at the center
of all that you do.
CRM is difficult to define. It's somewhat misunderstood, largely misused, and in
some cases abused…often by the very people who strive to define it
"The one thing we can all agree on is that the focus is on the customer."
Unfortunately, people often put too much emphasis on the components (such
as the technology) of CRM instead of the basis (the customer). Once this
customer-centric vision has truly been established, the individual customer can
truly begin to be understood and valued, and loyalty can be earned.

35. Tesco Case Study Questions
Q1. Tesco ventured into other businesses like Garden centres,
Automobiles, Banking,Insurance, Telecom, Fuel, Tech support ,
Filmmaking, Tesco tyres ? Please relate it to the Tesco CRM ?
Q2. Essentially the goal of CRM is to :" Increase the lifetime value of a
company's relationship with target customers. Please relate it to the
Tesco CRM ?
Q3. Customers are able to do business With you through multiple
channels, which are aligned with your customer needs and, their value
to your business. How can CRM help
Q4. Tesco gives magazines to its customers , relate it to CRM
Q5. Please do SWOT analysis of Tesco business
Q6.Name any business decisions be made by Tesco from its CRM
strategy