Unit 11 M1 Analyse the ways in which relationship marketing activities can be used to support achievement of the strategic aims and objectives of a given organisation.
M1- Analyse the ways in which relationship marketing activities can be used to support achievement of the strategic aims and objectives of a given organisation.-
In this report I will be explaining the development of relationship marketing by highlighting the benefits of having a relationship between the customer and the chosen business or between two different businesses. Relationship marketing is where two businesses have a business relationship where they have good communication with each other, for example supporting the other business such as contributing to a future plan the other business has or lending money to the other business if they really need it to get out of debt or run a new project. Relationship marketing relies on respect/honesty, for instance trying to understand the other businesses point of view instead of disagreeing which can lead to an argument; it involves honoring the other businesses view point such as respecting their culture. For example if an American business want to create a partnership with a Chinese business it would be polite for them to respect each other native land and culture because it is polite to understand the other business culture before having any business related discussion because it show you have interest in creating a relationship with that business. The potential benefits of having relationship with other business can lead to a better communication with two business to able attract a customer group such as the spray companies like Lynx, Dove and Sure Men which are three different business joined together to promote their smaller spray bottles, which has smaller impact on the environment, by releasing the new ad commercial it would lead to a promotion of their businesses but to accomplish this first they required a good communication/trust between the contrasting business in the project, so one of the benefits of a marketing relationship is having a better promotional scheme.
To build a lasting relationship there must be a mutual advantage between two parties, for instance Tesco presents this by its customer service team which offer service to customers, having patience when talking to customers, and being loyal, this does require the 7 p’s as well where they create a relationship with their customers.
Tesco uses many strategies to create a lasting relationship with their customers, for instance they commonly use the club card where they allow customer to build up points so that the customers can then spend these points in store, but of course Tesco also needs to follow the 7 p’s if they are going to attract customers in the first place and then use additional schemes to then retain customers. Tesco uses it relationship marketing activities to support the achievement of the strategic aim and objectives by linking the two together.
Tesco core purpose and mission is –
On the Tesco website their mission clearly says that “we make matters better, together”. This shows that whatever situation the customer or even the employee is in, they will try to improve for with the customer or employee, linking this towards relationship marketing or relationship on its own it is where a relationship requires two people that are connected to each other, what Tesco is trying to say is if the business and the customers are connected together they can improve any affair.
Tesco values also are linked to their customers-
No one tries harder for customers; this also links towards the relationship that Tesco is trying to create a relationship as soon as the customers enters the store they will try to create a pleasant environment for the customer, where they have trained staff to assist the customer, aisle set in food orders so that they can be easier to access the food. Even before entering the store they have specific location of stores which are located within not outside communities, even the distance of the car park and location of shopping trolleys are located in specific location so that the shopping trip makes it easier for the customer, every little thing the business does is done for the customer.
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We treat other how we like to be treated-
This is linked towards the first value where “no one tries harder for customers” where they treat other how they want to be treated, linking this to relationship it is where two people in the relationship the dominant person (Tesco) will treat the submissive (customer) as how they wish to be treated, for instance they try to settle disputes where both people benefit, where they spend quality time together where the customer service teams are trained to spend as much time possible to help the customer, Tesco also listen to each customer without judgment, where they have a compliment and complaint section on their website where they take every customers thought in consideration because nobody would like to be ignored so that is why Tesco listens to their customer like any relationship the two people listen to each other.
We use our scale for good-
In order to create a lasting relationship Tesco has to support their customers outside their store where not only do they donate their earnings to charity but take in consideration their customer for instance Tesco are currently trying to tackle global obesity because they have the power and money, try to reduce food waste globally and create opportunities for young people around the world, all these thing have one thing in common which is that they are done on a large scale where Tesco is a global known business where it is located in every continent part from two but they have the power to make change and that is what they want to do. This contributes to creating a relationship because it shows Tesco cares where they are devoting their time towards the other person which also allows Tesco to meet their aims and objectives.
Tesco strategic mission and objective are as followed-
- Tesco plc aims is to grow the uk core-
- Tesco want to be an outstanding international retailer in stores and online-
- To be as strong in everything we sell as we are in food-
- To grow retail service in all our markets-
- To put our responsibilities to the communities-
- To be a creator of highly valued brands-
- To build our team so that we create more value-
These aims and objectives are set so that they expand their business overtime, become the best retailer out there, be known in every market from groceries to mobile phones, to create a team and share responsibilities with the community, by doing all of this Tesco can create a good image for itself but for Tesco it means that they can create a relationship with their customers where they provide to their customer physically and mentally, which is like any relationship.
Some may think why spend so much effort creating a relationship with a single person where there is so many people in the surrounding area to create to attract to the business to make a quick sale, but in fact retained customers have the biggest impact on the business where in p1 it explained that retain customers spend roughly 33% more than new customers, also it benefits the business where it cost less to retain a customer then attract a new customer, and explained before Tesco makes 80% of its sales form a loyal customer, return customers have so many benefit economically where they contribute to the sales that have been made, but still if somebody does still continue to think that have a larger number of new customer then return customer, they then must be unaware that referral from repeat customers are 107% higher than first time customers, so the return customers are actually attracting new customers which allows Tesco to save a lot of money which can be kept to retain customers.
Quality products/services- a business like Tesco sell variety of different types of product to offer to their customers, they have multiple version of the same product where either the quality or pricing of the product would change, this is because Tesco is not a business that target one group of people the rich or the poor but in fact target everyone so they have multiple audiences so this show they actually meet their purpose “treat other how they want to be treated”, this is only good enough to attract customer not to retain customers, so this is why they have rewards for customer that they make multiple purchases, most commonly the Tesco uses the club card scheme where customers can get a 2 for one offer, half price on the next product they buy, get coupons and vouchers, this is because it gives a reason for customers to return to the store so this is how Tesco uses products to get return customers.
Value of money- from a dominant view here would write that Tesco does have value of money but in fact they do and don’t, because in the early times before 2008 Tesco used to be a popular store because it had cheap products and even cheaper store branded product but in recent years stores like Aldi and Lidl having becoming a lot more popular became they are selling even cheaper products, before Tesco used to be compared only to Morrison and Asda which were the top supermarkets but businesses like Aldi entering the market has created competition for the business became know on news articles Tesco are being compared to these stores and are being criticized because their prices have not changed.
Varied place- in order to meet their aim to grow in the uk, and to become the largest supermarket globally, they must attract multiple audience by entering different markets, for instance they have currently entered every market possible form groceries, to the phone market and even selling insurance, they have stores across the Uk varying edible snacks to stores like Dobbies selling gardening facilities, they even have their own website offering home delivery and also having an app which can be accessed on the go. This shows that Tesco wishes to expand because they have tried to attract the attention of lots of different audiences; they even pushed the limit when they started to build retailers across the world which went successfully.
Customer relationship management -Attractive promotions such as loyalty card of
Everybody is aware of the Tesco club card system where customers are even are aware of this service even before they start to shop at Tesco, this is one of the main method Tesco has to retain customers, it is where with every sale made the customer is rewarded with point which can be stocked up where they can then spend in store or even on additional awards from other businesses like the cinema, but in order to know what rewards they need to send to their customer they firstly use a CRMS, a customer relationship management system is a technique used by a specific business to retain customers, the system is where they look at the customers shopping history pattern, where they look at the specific products that customers buy and even the type of products they buy so they know what promotional scheme they can send to the customer, it can be used as a profile prospecting where they can understand the segments needs so they can provide with products that are suitable needs. The system creates a data base of the customer so when the business needs to send promotional schemes they know what desired promotion the customers are looking for. With the club card the points don’t disappear or expire but stay in the users account for ever so it gives customers a reason to return to the store and buy additional products became they know they are going to get rewarded, it also allows the customer to build a b2c relationship.
Pre-transactional- where they provide excellence service before you even enter the business location such as attracting the customer by having a good car park, not just having a wide space so that it is easier for cars to move in and out and have enough space to open their doors but having disable paring at the front of the store so that it is easily accessible and having a children parking spot where they have are available also at the front of the store where they are for parent who have children who are still in booster chairs. Also services they have to offer before the customer even enters the store is not just having trolleys and basket available but the location of them, even though the simple thing to do is to place the basket and trolleys at the format of the store, it would require some business to have trolley cabinet where they can place their trolleys in discrete locations around the car park so that they are not spending a lot time moving back and forth from the front of the store to the location of their car to place a trolley back. When the customer does enter the store or any Tesco store the basic needs would be provided which are bright lights so it is easy to see and walk around and identify products that they are looking for instead of having dim lights, and also having the radiators or a/c on depending what the weather is like outside, so these two features are the minimum service required to be provided by the business and which are expected by the customers. So this is expected by the business be fire they enter the store but when they enter the store they are greeted by customer assistance which will assist customer by directing them to the location of products that they are looking for or answer any question they have about a specific product or service, or even if the customers are walking around the store they can stop an employee at any given time to assist them in their shopping.
Transactional- this where the customer is ready to purchase their product where they are at the till getting their money or debit card out, the Tesco policy is where they have even one customer on a till they will open another till to serve the customer that are waiting in the line, as well as this they also have self-servicing tills that customers can use as they are checking out the product which provides the same service as customer checking out your product, also the different methods that they have available to pay for their goods such as with cash, debit card and before Tesco did use to accept cheques, also another policy Tesco has is to have employees to assist customers to pack the customer bags if they see them struggling, so this also helps build customer relationship where it shows the business cares about its customer, so it helps build up that relationship. As well as having an employee to pack bag for the customers they also offer extra bags for free which allows the customers to have a spare bag for their own use or if their current bag rips. Tesco also has a club card system where they get points on the number of sales they make or the certain products that they purchase, so with the points that they have they can then spend it on other in store products that they have.
Post-transactional- this is after the sale has been made so when the transaction has been completed by the two contrasting parties, the business still offer services to the customers after the purchase has been made, such as carrying heavy object for the customers to the car if the customers are struggling with the products that they are carrying also at some stores they have employees that assist you to your car with an umbrella if it is raining. They also have a return policy where if the product is damaged before it reaches their household they can return the product or exchange the product, for example a bag of rice might have a tear in it and leak all over the car so the customer can go back to the store and exchange the product or get their money back if they want.
Tesco’s customer service mission links with their organization mission where they have values such as “no one tries harder for customers” by setting this as one of their values it show that Tesco cares about their customers, this value shows the business goes out of its way to help just a single customer to meet their needs, where the business has additional services alongside the product to help satisfy their needs, for example when a customer comes for their local shopping visit a employee might be there such as a “greeter” who are ready to help the customer find the products they are looking for before they even enter the store, basically they try to create a shopping experience for their customers that no other business can offer, this links towards organization mission more specifically “to be as strong in everything we sell as we are in food”, over the years Tesco has added more services to the business including customer service, in order to be stronger in everything else like they are in the food service they need to provide outstanding customer service so that it is seen by the public that they provide high-quality service alongside the products that they have to offer, so when the public think of Tesco they currently see it as the store that sells only products but if they meet their customer service mission it will be seen as the store that sell products alongside the excellent customer service that they have to offer. To summarize in order for Tesco to meets its organization mission they firstly need to meet customer service mission, this is because many of the organization mission include having meeting customer need such as “to grow the UK core” in order to build a better Tesco they need their customers on their side such as knowing what customers need and what they look for in the store so they can be seen as the best supermarket in the UK, but in order to ache this aim they need to fulfill a customer service mission like “using our scales for good” where they use the power they have for good like listening to their customer and see what they want to see, such as more variety of products in the store or a charitable organization that Tesco donates to so customers can see that meets the need of not only those in the store but those who are outside the store such as the cause of the charity which is to support the homeless people in the local community.
Building long term relationships of mutual advantage
Tesco seeks to grow in core, and achieve growth in new geographical market and be strong in new product/service market development, this all rely on sales, sales should really be from partners because they would buy entire packages that Tesco continuality offer, instead form customers that buy from you because of the one offer they like.
conclusion, relationship marketing is very important to keep a business running successfully; where the business uses specific techniques to get new customers and different techniques to retain customers. These methods ensure that the business is not making a loss from advertising but instead it is benefiting sales from new/existing customers by creating a good reputation and overall total quality approach.