Customer

Relationship
Management @
Big Bazaar

SUBMITTED BY:

• Ajish John (05)

• Anuj Jain (17)
• Deepika (3510910168)
• Faiaz Mohamed (46)
• Garima Rajhans (49)
• Kavya Potala (88)
1 1
 Chapter 1 INTRODUCTION

“It is not enough to have great qualities, we should also have the abilities to manage them”.
The same concept can also be applied in an organization. For e.g. a company may produce a
very high quality products but it won’t be able to succeed if it fails to manage or satisfy their
customers.

According to Harward Business Review “an exceptionally satisfied customer is 6 times more
likely to buy again as one who is merely satisfied & only 5% increase in customer loyalty can
boost profit from 25% to 85%”.

Thus all these quotes & experts opinion highlights the importance of Customer Relationship
Management. Customers are considered to be king of every business enterprise and loyal
customers are the backbone of their business. So customer satisfaction is the primary motive
of every business which can be attained through effective CRM (Customer Relationship
Management) policy

1.1 Meaning of Customer Relationship Management (CRM):

CRM is a comprehensive strategy & process of acquiring & retaining customers to create
superior value for the company as well as the customers. It consists of the processes a
company uses to track and organize its contacts with its current and prospective customers.
To support these processes, various CRM Software like SAP, ORACLE Sales [Link] etc.
are used. These software record and store information about customers, various customer
interactions, their problems etc which can be accessed by employees in different departments
of the company. These information are used by the organization to make future plans that can
satisfy the customer on a better way and retaining them for a longer period.

1.2 Goal of CRM:

The goal of CRM is to provide improved services to the customers, and to use customer
contact information for targeted marketing.

2
1.3 Evaluation and growth of the CRM:

CRM passes through three generations such as 1st generation in 1990, 2nd generation in 1996
and the 3rd generation in 2002.

In 1st generation following systems were applied for CRM :

 Call centre management-

It is a web based CRM technology, the enables users browsing a company’s web site to leave
a phone number where company representative can call back with more information.

 Customer service support-

It is a part of a company’s CRM department that interacts with a customer for their
immediate benefits.

 Sales force automation-

It is software that automates business tasks like inventory control, sales processing, customer
interaction, etc.

 Campaign management-

It is a planning, executing, tracking and analyzing of direct marketing campaigns.

In 2nd generation following improved systems were used for CRM :

 Integrated customer facing front end-

It is face to face interaction between the customers and sales man. This system is used for
marketing, sales and services.

 ERP integrations-

ERP stands for Enterprise Resource Planning. It is a business management system that
integrates all functions of the business.

 Customers analytics-

3
It comprises all the programming that analyzes data about an enterprise’s customers for
business decision.

 Complete web integration-

It allows end users to have access the data function of a serve hosted application through
internet browser window.

In 3rd generation the strategic CRM was followed and is continuing :

Strategic CRM updates and expands the original content and combines into one,
convenient value that guides users through the entire CRM implementation process, from
strategic planning software.

Scope and goals of different generations:-

There is successful increment in the scope of CRM from 1 st generation to 3rd

generation. In 1st generation the scope consists of service function and sales function, in 2 nd
generation it includes another function i.e. marketing function and in 3 rd generation it
includes entire function of the organization.

Goals of the CRM have also changed with better customer service from 1 st generation
to 3rd generation. In 1st generation the goals were improve service operation and increase sales
efficiency, in 2nd generation reduce cost of interaction, improve customer experiences, and
increasing the customer interaction; in 3rd generation cost reduction & revenue growth and
competitive advantages.

1.4 Options for Implementing CRM:

Increasing customer is not the ultimate objective of any organization but to retain customer
and t build long term relationship with them is important. It is only through CRM that a
prospect can be turn into customer and then finally into a client. But to achieve these any
organization require proper implementation.

4
But at the same time CRM implementation is a challenging task because it ties together many
people, process, technologies within the organization which are separate from each other.

1) IN HOUSE DEVELOPMENT - This means all the strategies, processes are

developed and implemented within the organization.
Advantage-

1. It is tailored made according to organization needs and structure thus is flexible as

compared to others.
2. Avoid dependency on others be it software or outsourcing.

Disadvantage

1. It is at the same time expensive

2. And comparatively takes longer time depending on the organisation.

2) BUY LICENSED CRM SOFTWARE - This is purchasing software and

implementing in organization.
Advantage-

1. Usually the maximum chance of success.

2. It just need to install and trained the workforce accordingly.

Disadvantage-

1. Again it is expensive because of many costs as license cost, renewal cost etc.
associated with it.
2. Adding new software with change is a complex task.

3) OUTSOURCING A MANAGED SERVICE- This means hiring from outside.

Advantage-

1. Most of the times lower cost.

2. Can adopt “pay- as- you go” approach with visible result.

Disadvantage-

5
 1. For any new requirement needs to contact the company and pay for the development.
2. Also there is a risk of losing CRM solution investment if outsourcing company goes
out of business

Impl e me nt ing CRM: The

De c is io n Pr o c e s s
Stage-wise
Purchase and install a implementation
complete CRM
solution from a vendor
Decision
To Implement an
YES
Implemen enterprise-wide
t
CRM CRM program
Entirely outsource
the CRM application
process
NO

In house
development

STAGEWISE- In this CRM software is offered in different, independent modules, according

to specific department needs.

Company buys sales automation software and contact management module from different
providers.

ENTERPRISE WISE CRM SOLUTION- This is composed of different modules from

same providers; it is implemented as a whole by connecting different modules and existing
database.

1.5 VARIOUS ASPECTS OF CRM

CRM includes many aspects which relate directly to one another:

• Front office operations — Direct interaction with customers, e.g. face to face
meetings, phone calls, e-mail, online services etc.

6
• Back office operations — Operations that ultimately affect the activities of the front
office(e.g., billing, maintenance,planning,marketing, advertising, finance, manufacturi
ng etc.)

CRM @
Big bazaar

Customer’s Organization’s
point of view point of view

7
 Chapter 2 CRM AT BIG BAZAAR

 Database is formed through the issue of future card and card is of three types silver
card, gold card and sakthi card. Sakthi card is issued to ladies and this card provides,
free sugar(1 kg) per month.
 Customer profitability analysis (CPA) is done on the basis of transactions made
through the future cards.
o Platinum customers (most profitable).
o Gold customers (profitable).
o Iron customers (low profitability but desirable).
o Lead customers (unprofitable and undesirable).

 Differentiate customers in terms of: (1) their needs and (2) their value to company.
 Interact with individual customers to improve the knowledge about individual needs
and to build stronger relationships.
 There are four type of analysis done for analysis of CRM

o Periodic Surveys: It’s done on quarterly, its an overall survey done by the
future group authorities and CRM is a part of it.
o Customer Loss Rate
o Mystery Shoppers: They pose as normal customers perform specific tasks—
such as purchasing a product, asking questions, registering complaints or
behaving in a certain way – and then provide detailed reports or
feedback about their experiences
o Monitor Competitive Performance

 Complaint Handling Procedures:

 Screening And Logging -- The type of product or service; manufacturer/brand

name; model name/number; date of purchase/contract; warranty expiration date;
salesperson; cost of product/service; date problem occurred; and a description of
the problem is listed. This allows organization to exercise control, and assure
proper follow-through.

8
  Investigating -- customer's explanation of a problem provides much information.
Nevertheless, to assure they have all the information needed for a thorough review
of the facts involved, by:
o Researching in-house records on the customer;
o Requesting receipts, or other records;
o Inspecting the product, or service performed; and
o Following-up with the customer for any necessary additional information.
 Acknowledging -- When Big Bazaar cannot resolve an issue immediately, it is
important to let customer know that the matter is receiving attention. Customer is
given information about how long it will take to complete action on the complaint.
If there is further delay, it’s made sure to advise customer why and when Big
Bazaar expects to have an answer.
 Formulating A Solution -- solution is made to be consistent with established
customer relations policy and important criteria are taken into account:
o Contractual and/or warranty obligations;
o The customer's expectations;
o The cost/benefit of alternative solutions;
o The probability and cost of customer seeking redress in some other way;
o The comprehensiveness and fairness of solution;
o ability to perform the solution; and
o What to do if the customer rejects solution.
 Responding -- The response is made clear and appropriate. The customer must
understand the response, and the response must address the issues raised in the
customer's original complaint.
An explanation of decision preserves the goodwill of customer, even if the
decision itself is adverse.

 Following-Up – Customer is contacted following response to verify whether or

not the matter has been resolved satisfactorily. If customer is unhappy with
response, organization refers the matter to a third party dispute resolution
mechanism for assistance.
 Steps Involved in customer Satisfaction through Service:

o Seeing problems from the customer’s perspective

9
 o Managing customers' "moments of truth"
o Communicating effectively through better listening
o Analyzing how customer perceptions are formed
o Managing anger and other service behaviors
o Dealing with long-term consequences of service breakdowns
o Negotiating solutions
o Generating an action plan for improved on-the-job effectiveness

CUSTOMER COMMUNICATION:

Future group maintains its records of customers by observing their purchasing habits &
categories them into various groups like high revenue, moderate revenue & low revenue
customers. They communicate to the customers through various medium like SMS,E-mail,
Mobile vans, Print media [Link] is the way to built a strong presence in the existing
customers & prospective customers. Presently they are using oracle software to maintain
database. Recently they have tied up with California based firm GREENPLUM to provide
new software for data warehousing.

The company boasts strong share of its profits from top line customers who provide them
around 70% of their revenues in total. The company can said to be going on the famous
management principle i.e. 80/20 PRINCIPLE which says that 20 percent of variables cause
80% effect. In big bazaar it can be related to the fact that 20% of its top line customers
provide 80% of its revenues in a year. This is the reason why the retail giant is focusing
strongly on customer retention in order to boasts its sales numbers substantially.

CUSTOMER GRATIFICATION is an important element of a sales process. Every

company should survey their customers in order to find out the satisfaction level among the
consumers. Big bazaar also conducts periodic surveys in order to ascertain the satisfaction
level in their consumers. Various activities are done in order to enhance the shopping
experience among buyers & various offers, discount coupons; exchange offers are initiated
by the firm in order to develop a good satisfaction level in their existing customers. Special
coupons are given to customers who can be redeemed by the costumers in their future
purchases from the store.

10
CUSTOMER PERCIEVED VALUE (CPV) is calculated by the retail store in order to
assess the costs and benefits received & given to the buyers. The following are some key
features of CPV

1. CPV is the difference between the prospective customer’s evaluation of all the benefits and
all the costs of an offering and the perceived alternative.

2. Total customer value is the perceived monetary value of the bundle of economic,
functional & psychological benefits customers expect from a given market offering.

3. Total customer cost is the bundle of costs customers expect to incur in evaluating,
obtaining, using, disposing of the given market offering, including monetary, time, energy &
psychic costs.

11
 Chapter 3 CUSTOMER’S POINT OF VIEW

1) Sales Person’s Assistance: This refers to the extent of help an individual gets from
the sales person present in the store in choosing a particular product or in case of any
query. There can be two instances i.e. inadequate help or excess help. Inadequate help
is a very case because most of the time sales person is there to solve our queries.
Instances of excess help can arise which makes the customer feel that the person is
interfering in his decision or pushing the product to him.

2) Expectation Fulfilment: Every customer has certain expectations when he visits a

store. This expectation will vary from person to person. It can be getting a particular
brand of product or particular quantity or variant of the product.

3) Discounts & Offers: These are announced from time to time to lure customers to buy
more.

4) Product Arrangement: This basically means the sequence or order in which

different varieties, brands or segments of products are arranged so that customers feel
at ease in selecting the product of his/her choice.

5) Accessibility: It refers to the reach of the store to the customers.

6) Preference: It refers to the preference of the customer regarding making a choice

between the two stores i.e. Big Bazaar & Reliance Mart.

12