First, I will say many thanks to the almighty God who has given me knowledge and understanding to complete this research work. Then, I would like to say thank you to my supervisor, who supported me a lot with this valuable feedback, guidelines and suggestions. Next, my cordial love for my parents who have been supporting me from my childhood with care, finance, advice and guidelines. Following this, I would like to appreciate my beloved wife who has supported me with his company, inspiration, and motivation in the completion of this research work. Finally, I would like to say thank you to the participants who participated in the survey and provided me the required data.
I am very pleased to declare that this research work is authentic and genuine, and it is my own work. I have conducted the research work with my own initiatives and efforts. I have not copied any other work. In this circumstance, if the authority of the university can prove any unethical issues regarding my work and take any actions against me, I would not disagree to accept that.
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. Consequently, customer relationship management is being popular and crucial in the current global business world. Although customer relationship management can bring several benefits for the organizations including 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.
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: to critically review the literature of CRM and customer retention and acquisitions; to explore what kind of CRM features are being used by Tesco; to identify the main gaps between the widely practiced CRM features in global businesses and Tesco; and to find out the solutions to recommend Tesco to fill the gaps and improve its existing CRM practices.
There are a number of benefits of this research work. Firstly, it has extended researcher knowledge on how to conduct research work in the real field. It has thought me how to collect data from both primary and secondary sources, and how to review the literature critically on the research topics. It has also developed the researcher’s knowledge and understanding of research methods, methodologies and designs, mainly collecting data from fields applying different methods like surveys, interviews, focused groups, observations, case studies, etc. In addition, it has directed the researcher on how to analyze and present data using different analytical tools and techniques. Secondly, the undertaking research work has 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.
The researcher has applied several methods and methodologies in conducting this research work. The pragmatism philosophical view has been applied in the undertaking research study, where the researcher ontological position was subjective and objective, the epistemological position was positivism and interpretive, the axiological position was value bound and the data collection technique was both qualitative and quantitative. The researcher has applied both inductive and deductive research approaches and used both primary and secondary data sources. The secondary data sources have included the latest journals, academic books, websites, etc. The primary data sources included interviews and surveys.
The researcher has followed interview and survey techniques to collect primary data. For conducting the interview the sample size was five people, who are managing people and come from five different Tesco stores. For conducting the survey the sample size was 50 people of different ages who come from different locations, who are the customers of Tesco. The survey and interview were conducted face-to-face.
For analyzing the collected data come from both primary and secondary data sources, the researcher has used different techniques and analytical tools such as SSP, Excel Sheets, etc. For gaining participant confidence the standard code of procedures has been followed. The research validity and reliability issues have also come under consideration.
The undertaking research work has found out several results. Firstly, it has been identified that there is closed relation between CRM practice in organizations and their customer acquisitions and retention. Thus, CRM is playing an important role in businesses including Tesco. It can support organizations in different ways: a) it improves communication and interaction between customers and organizations; b) it gives clear ideas about customers needs and expectations to the companies; c) companies can take appropriate initiatives to meet customer needs, and d) finally it improves customer acquisition and retention level significantly. Secondly, the research work has found out the weaknesses of existing CRM practices in Tesco. It has found out that: a) Tesco digital communication channels to interact with customers are weaker; b) customers are raising questions about their data privacy and security in usages of Tesco Club Card; c) some customers have negative comments on the online buying process, transaction process and home delivery process; and d) many customers complain regarding Tesco products prices and quality. Thirdly, the research study has found out solutions for improving Tesco CRM and recommend Tesco to improve its CRM in customer acquisitions and retention.
Customer Relationship Management (CRM) is a hot topic in the current business world, most importantly in the UK retail sectors including Tesco. On the other hand, it has been a challenging issue for the UK retail sectors including to gain improved customer retention. This study critically evaluates the effectiveness of CRM in gaining improved customer retention in the case of Tesco superstore, UK. This chapter gives an overview of the proposed research. In the first section, the research background is outlined following the research problems and research rationale in the next sections. Then, this chapter outlines the research aims and objectives along with research questions and research hypothesizes. Then, this section gives an overview of the research significance in terms of both researcher’s perspective and the UK retail sector’s perspective. Finally, this section provides an overall structure of the whole research work.
1.1 Research Background
Customer relationship management (CRM) is the effective and innovative concept undertaken by modern business organizations to retain and acquire consumers (Berry et al., 2013). The present business world is giving higher priority to these concepts to develop their products and services in the target markets. On the other hand, consumers are getting benefits of these concepts through gaining knowledge and information about their expected products and services (Weinstein and Jonson, 2013). In addition, the rapidly changing customer needs and the advent of technologies in business have forced organizations to think about consumer retention and acquisition. Consequently, business organizations have been moving from transactional to relational in recent years and creating mass standardized products and services targeting particular markets and customers. According to Berry et al. (2012), if any organization follows the old transitional model in a current competitive market, it will not succeed in its operations, because modern technologies have made the consumers more aware of goods and services, which has decreased products and services segregation in the world market.
However, the constant changes in customer demand and technologies have made the present business world unstable. As a result, as Weinstein and Johnson (2013) suggest, business organizations have to be more concerned about their consumer’s retention and acquisition by developing an effective relationship with them. Business professionals should follow relationship marketing strategies to develop their products and services. The approaches of selling goods should be changes from short-term quick service to long-term business pattern, where buyer will make an agreement with sellers as patterns. This pattern will help the business organizations to predict consumers purchasing behavior giving value to every consumer and reduce overall operational costs (Li and Nicholls, 2010).
Although business organizations are concerned about the importance of relationship marketing and customer relationship management, many of them are still in dilemma regarding the impact and effectiveness of customer relationship management and building relation with consumers to achieve organizational goals and objectives (Li and Nicholls 2010). The undertaking research study will focus on customer relationship management to improve customer retention and acquisition and its impact on business performance. The study will emphasize a particular organization called Tesco Plc. The research work will identify the issues that are liable for improved customer retention and acquisition. As the improved loyal customers impact on maximized profit of an organization, the undertaking research work will consider relationship building between organizations and its consumers and manage this relationship effectively and efficiently.
1.2 Problems Statement
Klee and Thurau (2007) say, according to different reports in the last three decades, one of the key challenges and fundamental elements of current business organizations is to satisfy customers. As a result, organizations need to maintain interaction with their consumers to make long-term relationships. The gradual and effective development of customer relationships can forward organizations from transitional business marketing to relationship marketing, which can support organizations to gain their organizational goals and objectives (Payne, 2013). Kotler et al. (2015) stated that Customer Relationship Management (CRM) is a significant issue in the current business world, most importantly in UK retail sectors. Tesco, which is the biggest retailer in the UK, has been applying customer relationship management in several ways. Tesco services millions of customers every day in stores. However, Tesco has been facing great challenges mainly since 2008/09 because of the global economic downturn. In addition, the severe competition with aggressive competitors including Sainsbury’s, ASDA, Morrison is giving hard time to Tesco in maintaining high customer retention. A study disclosed in the Tesco Annual Report (2015), Tesco’s sales were 3.8% down in 2015 in comparison to the previous in 2014. In the other report published by Guardian in 2016, Tesco lost 1.5% of its overall market share by the third quarter of 2016 (Guirdian, 2016).
As a result, it has been challenging issues for the UK retail sectors including Tesco to improve its customer retention to improve both market share and sales revenue. In addition, as customer visits and market shares have declined sharply, Tesco is focusing on improved customer retention and loyalty (Gairdian, 2014). According to Kotler et al. (2013), customer relationship management (CRM) is the key approach to increase sales with improved customer retention and loyalty. However, business organizations including Tesco want to explore the effect of customer relationship management (CRM) in customer acquisition and retention.
1.3 Research Rationale
1.3.1 What is the research issue?
It is one of the greatest challenges for retailers including Tesco to make happy and retain their customers (Klee and Thurau, 2013). In addition, current digital world most businesses are moving from transactional business activities towards relational business approaches (Bolton et al., 2012). As a result, an organization like Tesco is giving priority to customer relationships management (CRM) to increase its customer retention and acquisitions (Tesco, 2014)…………..