Critically evaluate the influence of relationship marketing strategy on customer retention in UK retail industry (GC01422)
Research Background
The present business world is moving from transactional to relational marketing to attract customers. Most of the modern business organizations nowadays are extra giving concentration on customer care and customer relationship to survive in the competitive marketplaces (Li and Nicholls, 2010). Consequently, customer relationship management is being popular and crucial in the current global business world (Berry et al., 2012). Although customer relationship management can bring several benefits for the organizations including an improved level of customer retention and acquisition, it may because of some demerits such as extra cost for technologies and workforces, times required and complication in data collection, store, and maintenance. Therefore, business organizations are in dilemma about the exact impact of CRM practices in customer acquisitions and retention (Weinstein and Johnson, 2011).
Tesco, the biggest British grocery retailer, is operating in more than thirteen nations and serving millions of customers every week in its thousands of stores with above 500,000 dedicated staff (Tesco, 2014). However, Tesco is facing challenges in the current marketplace. According to Kantar (2014), Tesco sales fell by 3.8% in the first quarter of 2014 losing more than one million consumers visit each week, worth of 25 million pounds in sales. The recent industry data shows that Tesco’s market share dropped by 1.5%, from 30.5% to 29.0% in the first quarter of 2014 (Guirdian, 2014). As a result, improving sales and market share has been the key issue of Tesco (Tesco Annual Report, 2014).
Therefore, the proposed research study will determine the quality of customer relationships and their impact on consumer retention based on a particular organization namely Tesco plc, UK.
Significance of the proposed study
Satisfying customers is the biggest challenge for retailers including Tesco (Bolton et al., 2012). According to Payne (2010), the development of the business world is shifting transactional marketing to relationship marketing (Kotler et al., 2014). Although Tesco has launched the ‘Club Card System’ to notify its valued customers of buying behaviors and attitudes, it has been facing difficulties to maintain effective customer relationships (Tesco, 2014). On the other hand, the advanced technologies, as well as information availability, have impacted the traditional consumers to move to online consumers (Aliyu, 2012). Thus, improving customer relationships has been a significant issue for UK retailers including Tesco. The proposed study will explore the influence of customer relationship management (CRM) on the retention of UK retail sectors, and then recommend Tesco how it can develop its CRM and customer relationships to improve market share and customer retention.
In addition, a number of benefits will be sought from the proposed study. Firstly, it will extend the researcher’s knowledge on how to conduct research work in a real field and collect data from both primary and secondary sources, and how to review the literature critically on the research topics. It will also develop the researcher’s knowledge and understanding of research methods and methodologies which will develop research skills. Secondly, the proposed research work will found out solutions for the organization, Tesco. Tesco would be able to understand their weaknesses through this thesis and can take appropriate actions following the recommendation provided in the research work.
Aims and objectives
The key aim of this research work is to critically analyze and evaluate the impact of customer relationship management (CRM) in customer retention and acquisition.
The key objectives of the study are:
- A) To critically review the literature of CRM and customer retention and acquisitions;
- b) To explore what kind of CRM features are being used by Tesco;
- c) To identify the main gaps between the widely practiced CRM features in global businesses and Tesco;
- d) To recommend Tesco on how it can overcome its weakness and improve its existing CRM practices to increase its customer retention.
Research Questions
Research questions are identified to explore the research problems answering them to meet the research aims and objectives (Saunder et al., 2012). The research questions of the proposed research are:
- What are the key features of customer relationship management (CRM)?
- What are the influential factors of customer relationship management which can contribute to the retention and acquisition of consumers?
- What features of customer relationships is Tesco practicing in its customer retention and acquisition?
- What are the gaps between effective customer relationship features and the Tesco practices in its business?
- How Tesco can improve its customer relationship management (CRM) to promote customer acquisitions and retention?
Methodologies used in the proposed research
The proposed study will apply several methods and methodologies. The pragmatism philosophical view will be applied in the proposed research study, where the researcher ontological position will be both subjective and objective, epistemological position will be positivism and interpretive, axiological position will be value bound and data collection technique will be both qualitative and quantitative. The researcher will apply a deductive research approach, and use both primary and secondary data sources. The secondary data sources will include the latest journals, academic books, websites, etc. The primary data sources will include interviews and surveys.
The researcher will follow interview and survey techniques to collect primary data. For conducting the interview the sample size will be five people, who will be managing people and come from five different Tesco stores. For conducting the survey the sample size will be 50 people of different ages who come from different locations, who will be the customers of Tesco. The survey and interview will be conducted face-to-face.
Data analysis methods
For analyzing the collected data come from both primary and secondary data sources, the researcher will use different techniques and analytical tools. For analyzing qualitative data, SSPS, and Excel Sheets will be used. For analyzing qualitative data, a thematic analysis technique will be used. For gaining participant confidence the standard code of procedures has been followed. The research validity and reliability issues have also come under consideration…………………………….
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