Relationship Marketing in the UK Retail Sector
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Chapter - 1: Introduction
Relationship marketing plays a significant role in the present market scenarios as it mainly illustrates the relationship among the customers and organizations. Relationship marketing is a form of marketing that evolved during 1970 and 1980s (Regis McKenna, 1991, p. 4). It mainly highlights the consumer satisfaction instead of focusing on sales transactions because these relationships will help the organizations in sustaining and supporting the technological edge of the company. According to Lisa A. Guion and Heather Kent (2005, p.1), 'Relationship marketing is the process of attracting, maintaining and enhancing relationships with key individuals over time'. The marketer should act like an integrator where they must synthesize technological capability with the market needs and the marketer must be supposed to bring the customer into organizations. Customers mingle with the companies as participants for the adaptation and development of services and goods. So, the relationships are considered as the key point for the basis of customer choice and company adaption. Relationship marketing involves in using the one-on-one communication in earning the loyalty of customers (GUION, L. A., 2005). These relationships can be easily improved in the organizations if the marketing is part of everyone's job description that is from receptionist to board of directors. This method integrates the customers in designing the products which in turn creates a substance in the relationship. Relationship marketing is the key point to be considered in the retail sector. Many of the countries have increased its growth due to retailing. 'Retailers interact with the final customer in a supply network, but they are both buyers and sellers of goods and services' (Malcolm Sullivan and Dennis Adcock, 2002, p.3). Presently, there is a vast change in the retail industry and offers employment to more number of people. In these sector, retailer acts as a trader or dealer who sells the goods in small quantities. Retail sector will include various organizations related to different markets. Marketing in the retail sector can be improved only when there is a constant relationship between the customer and the organizations. Hence, it can be said that relationship marketing plays a vital role in marketing the goods in retail sectors. This marketing increase the growth of the retail sectors and further raises the market level of the country over the worldwide.
In this thesis, the further sections include Literature review, Research methodology, Findings and Analysis, and Conclusions. In the Literature Review section it briefly describes about the retail marketing in UK, relationship marketing, approaches used for maintaining the relationship, types of markets and challenges that are faced by organizations. Research methodology section illustrates the approach that is selected for analyzing the relationship marketing in UK retail sector with the help of various case studies. Findings and analysis section discusses and analyzes the performance of maintaining the relationship marketing in various organizations. The last section draws the conclusions and recommendations.
1.2. Aims and Objectives
Aim: To study relationship marketing in the UK Retail sector
- To focus on retail and relationship marketing
- To identify the various approaches those are used by various sectors for maintaining the relationships between customers and organizations.
- Discuss the challenges that are faced in the retail sectors.
- To examine the experimental results of relationship marketing in different retail sectors.
1.3. Purpose of Study
The main purpose of this research is to study the relationship marketing among the various retail sectors in UK. This report helps many of the organizations in analyzing the relationship marketing as it provides a clear idea on the retail sector and relationship marketing. Relationship marketing mainly focuses on the relationship among customers and organizations, rather concentrating on sales of goods. It will highlight the organization performance with respect to the relationship between industry and consumers.
1.4. Research Context
The present research is done in relationship marketing as it consists of the customer service and improving the quality according to customers taste such that both the customers and organizations are profited in real drive. Relationship marketing is the secret of the successful business marketing (Jane F.Eastham, Liz Sharples and Stephen D.Ball, 2001). The research mainly focuses on the relationship of internal marketing, suppliers, requirements of the markets and there influences how they are co-related with each other (Helen Peck, Martin Christopher and Adrian Payne, 1999). Maintaining good relationship between quality and the services provided by retailers has influenced new customers which have increased the growth of sales such that most of the organizations earn more and more profits (Martin Christopher, Adrian Payne and David Ballantyne, 2002. The present research work will be beneficial for business people who will gain a better understanding regarding retail market and helpful for the organizations that implement relationship management in gaining profits (Bob Stone and Ron Jacobs, 2007). It may be useful for the organizations as it may directly affect people who are involved in generating new ideas. So, the relationships are considered as the key point for the basis of customer choice and company adaption. Relationship marketing involves in using the one-on-one communication in earning the loyalty of customers (GUION, L. A., 2005). These relationships can be easily improved in the organizations if the marketing is part of everyone's job description that is from receptionist to board of directors. This research integrates the customers in designing the products which in turn creates a substance in the relationship. Relationship marketing is the key point to be considered in the retail sector. With the use of retailing most of the companies have improved their growth vigorously.
1.5. Research Method
According to Grinnell (1993), the word research is a combination of two syllables namely, re and search. Therefore, the meaning of research work can be taken as examining a particular thing again and again for achieving a systematic and faultless investigation in some kind of field that has been undertaken. The methodology of research work will focus on identifying the hidden problems of some field, determining solution for them and positioning the resulted data for reaching the conclusions of the research work (Ranjit Kumar, 2005). Case studies are selected as a suitable research methodology for the present research and researcher has to work hard in collecting the required data from different resources along with its evidences. In this type of research method, the gathered data is huge and many technologies have to be used for analyzing and organizing the data so as to reach the goals of the research work (Bill Gillham, 2000).
Research Area: Here the research area considered is UK retail marketing where it illustrates retail and relationship marketing, challenges that are faced in the retail sectors and gives experimental results of relationship marketing in different retail sectors.
Selecting Cases: Selecting cases is the critical step for any organization. UK market is very large and it became difficult here to select suitable cases studies for this research. At last this research considered two UK market leading organizations for the case studies including McDonald and Debenhams.
Identifications: This is the next step in research approach where the researchers need to identify the state of relationship marketing in considered organizations. Those identifications are given in the research methodology chapter of this research document.
Analyzing and monitoring results: An analysis must be taken after making research on any organization. And analysis must be monitor to understand the identification in the considered organizations. This research illustrates the analysis results with different types of graphs that can be understood by any person.
Recommendations: There are some recommendations given in the fifth chapter of this research documentation based on the research experience.
Chapter 2: Literature Review
Relationship Marketing is a marketing strategy that is developed from the direct response marketing campaigns that emphasizes customer retention and satisfaction rather than the major focus on point of sales transaction. It is a form of marketing the will recognize the long term values for the firm and focuses on acquisition of new clients by targeting the majority demographics based upon the prospective client lists. The main idea behind relationship marketing theory is the identification of key drivers which influences important outcomes for the firm and a better understanding of the fundamental relations between service providers and customers (Helen Peck, Martin Christopher and Adrian Payne, 1999). In the further sections of this chapter the retail marketing sector in UK is clearly discussed along with the relationship marketing in organizations with respect to six market frameworks. Creating and implementing the relationship marketing strategies and description of Relationship marketing along with the applications is clearly explained followed by the discussion on types of markets by comparing and contrasting the various approaches followed in the organizations.
2.2 Retail Marketing
Retailer is a dealer or trader who sells goods in small quantities or more. Retailing includes activities such as selling of products or goods and providing services to customers from a fixed location, which may be a departmental store or a boutique or by a mail in small or individual loads. Apart from these functionalities, retailing may also include services such as, delivery of products and goods. Retail Marketing is a process of buying and selling products or goods in the market. According to Philip J. Kitchen and Tony Proctor (2001) Retail marketing is mainly concerned with retail organization and it focuses on the application of marketing tools within its operating context. 'The retail marketing task is to deflect the customer in to the retail store and help to decide an appropriate compromise with regards store design, provision of services and customer desires' (Malcolm Sullivan and Dennis Adcock, 2002). 'Retail marketing encompasses the activities involved in facilitating mutually beneficial exchange relationship between business organizations supplying goods and services and customers' (Philip J. Kitchen and Tony Proctor, 2001, 264). 'Retailing marketing is a distribution channel function where one organization buys products from supplying firms or manufactures the product themselves, and then sells these directly to consumers' (Retailing, 2009, p. 1).
Retail marketing has its influence on the daily life of consumers and shopkeepers. Retailing is supported to provide utility to the customer and this comes from four different perspectives. These prospective can be explained as follows:
- Product utility - This type of utility is about the form of a product that is acceptable to the customer. That is the retailer provides final end products, but not raw materials and products which are usable to customers.
- Place utility - Retailing outlets will be available at places where the customers feel to be comfortable for their convenience (Malcolm Sullivan and Dennis Adcock, 2002).
- Time utility - Retail outlets or shops are available at a time suitable to the customer.
- Ownership utility - Retailers facilitate the transfer of ownership to customer depending upon the market situations (Malcolm Sullivan and Dennis Adcock, 2002).
2.2.1 Retail Marketing in UK
Since the Second World War, UK has become a service company: that is, in terms of output and in terms of employment. Many of the existing features of UK retailing are well known to the general public who has observed substantial changes in shops. Retail marketing is a highly dynamic industry in UK and it reflects the changes in rest of the society. With customer require patterns are affected by changing demographics and changes in incomes, customer credit and growth in part-time labor. Customers are comparatively affluent, sophisticated and time-pressured and therefore demanding a service (Philip J. Kitchen and Tony Proctor, 2001). In 1970's, most of advertisers are the manufacturing companies, such as Currys and comet in electrical sector, supermarkets and high street banks. Now, the situation has changed and the retailers are maintaining close relationships with their customers. The change of influence has developed in 3 different ways and they can be given as follows:
Firstly, most of the retail groups in UK have grown to equivalent or gone beyond the manufacturing organization in both capacity and size.
Secondly, with the severe changes in retail marketing, the stores of â€˜own-label' merchandise have increased. Most of the stores are offering high quality and excellent value products.
Third one is the development the market information. With the new technology like scanning restocking issues, the retailer can plan ranges, layouts and promotional details very precisely (Malcolm Sullivan and Dennis Adcock, 2002).
There is revival of price competition in 1990's, accompanied by a string service significance. And there has also been an increase in retailer diversification (e.g., high street fashion retailers moving into catalogue selling and grocers into non-food products). In spite of the increasing globalization of retailing, this is still usually the national environment, with its institutions, culture, and dictatorial framework. The UK retail market has experienced a dramatic re-shape in the year of 2004. This re-shape has been led by the achievement of Safeway supermarket chain by Morrison's, which has created the country's fourth biggest retailer. The UK biggest retailers are Tesco and asda and next are the Sainsbury's. With the achievement of the Safeway supermarket chain, Morrison's is in the fight for the third place with Sainsbury's (Graduate Prospects, 2009).
Over the next five years, the UK retail Market is in a position to increase its size by 15%, taking its value to just over Â£312bn (Datamonitor, 2009). But this represents a slowing down of annual growth and with increase in cost of credit and operating costs; the UK retail sector faces challenging times. The companies will suffer who cannot compete against shrinking margins. Among the UK retail market sector, electrical sector is the best performer with a growth of 24 % (Datamonitor, 2009). Hence, from the above discussion it can be understood that the retail marketing is crucial to effectively communicate a business to its customers in order to sell the products, launch new products to the marketplace, and to capitalize on revenues and profits.
2.3 Relationship Marketing
Relationship marketing is a process of attracting, enhancing and maintaining the relationships between the customers and managers in an organization. It mainly concentrates on increasing the life time value of customers and the strategies of relationship marketing mainly focus on the enhancement and development of relationships with a number of key marketing's. Relationship marketing will maintain the internal marketing relationships as well as external marketing relationships with suppliers, customers, referral sources, employees and recruitment markets (Adrian Payne, Martin Christopher, Helen Peck and Moira Clark, 1998). According to GRONROOS, C. (1994, p.421), relationship marketing is defined as 'Marketing is to establish, maintain and enhance relationships with customers and other partners, at a profit, so that the objectives of the parties involved are met. This is achieved by a mutual exchange and fulfillment of promises'. These relationships are of two types in the marketing field. First one is for attracting the customers and another one is to develop the relationships with customers for achieving maximum profits in the organizations (GRONROOS, C., 1994). But, According to ZEITHAML, V. A. and BITNER, M. J. (2000, p.30), Relationship Marketing (RM) is defined as 'Relationship Marketing is a philosophy of doing business, a strategic orientation that focuses on keeping and improving current customers, rather than acquiring new customers'. Hence, from the above discussion it can be understood that relationship marketing plays a vital role to develop the organization by maintaining the relationships between consumers, suppliers and managers. RM is communicated closely with customers in order to improve a beneficial, mutually, continuous and long-term relationship. RM is a philosophy where it assumes that customers are maintaining the relationships within a single organization rather than selecting the different organizations. It is a consistent application up-to-Date Knowledge of consumers to service and product design.
Six markets framework in Relationship Marketing
Relationship Marketing contains six marketing models for improving the relationships between customers and company. These markets maintain the relationship between many organizations as well as within the organization. The six marketing models are considered as the central point of Relationship Marketing and the importance of these models is discussed as follows: (Helen Peck, Martin Christopher and Adrian Payne, 1999).
Internal Markets - Internal marketing maintains the relationships between employees in the organization. It mainly concentrates on the issues like why and how the employees are working in the organization to improve the effectiveness of an organization. In internal marketing, business to business marketing information can be examined. Thus, observing the employee behavior in the organizations is necessary to estimate their performance and the examined information is useful for managers to take decisions.
Customer Markets - In this marketing, it maintains the relationship with customers. It supplies products and services to two types of customers. They are consumers like end purchasers and trade customers like retailers and their relative power is to determine which sort of relationships are cultivated more continuously (Helen Peck, Martin Christopher and Adrian Payne, 1999).
Referral Marketing - It develops a plan for referral motivation and can be characterized based on the type of relationship. If Referral market has high credibility factor, then it can be considered as a decisive element and it is considered as customers, if the consumers enter into this markets with formal and informal referral agreements between themselves and suppliers of corresponding services and products. Thus, the relationships in this market need to be fair, open and well defined in the areas (Helen Peck, Martin Christopher and Adrian Payne, 1999). Thus, from the above discussion it can be understood that planning is necessary to take the further actions within the organizations. Referral Marketing can prepare perfect plans in the organization.
Recruitment Markets - This is also called as Employee Markets. Employment is becoming a part of an organization. It is a market related task so that it maintains the relationship with educational institutions, labor unions and recruitment partners. From the above discussion it can be stated that Recruitment Marketing plays an important role in developing the organization. The performance of the company can be improved by recruiting the best employees.
Influence Marketing - It is closely linked with the decision-making department within the organization because it influences the relationships in the organizations internally as well as externally. This market consists of different types of sub markets like stockholders, government agencies and consumer associations (Soren Hougaard and Mogens Bjerre, 2003). Thus, it also considered as an important marketing model in the organization because well defined decisions are useful for the company to get more profits.
Supplier Markets - In recent years, improving the relationships with the suppliers is considered as a great deal in the organizations. Every organization need to maintain contain the relationship with suppliers because marketing system approach contains downstream as well as upstream activities. This approach matched with the developments within the Supply Chain Management (SCM). Supplier Markets deals with the supplier issues in the organization (Soren Hougaard and Mogens Bjerre, 2003). Hence, it is necessary to maintain the relationship with the customers to get the mutual benefits in the organization and every marketing business needs long term relationships to improve the performance of the markets.
2.4 Creating and implementing the relationship marketing strategies
According to NORMANN, R. and RAMIREZ, R. 'Marketing strategies provide the intellectual frame work, conceptual models and governing ideas that allow company mangers to identify the opportunities for bringing value to the customers and for delivering that value at a profit' (cited in Helen Peck, Martin Christopher and Adrian Payne, 1999, pp. 407). These strategies are helpful for a company to define its business and links together. Relationship marketing implies relationship between the customer and buyer. Traditional marketing approach is based on management of the so-called marketing mix and relationship marketing rather than management of the stakeholder domains.
Marketing strategies and planning approaches are influenced in the retail business environment. The relationship marketing values emerge from customers and consumer values. These customer and consumer values are an impact of various elements like people, process and proactive (personalized) services. People are the essential part of a company and consumers are motivating and training the employees to attract the customers for selling their retail business shares. Customer satisfaction is very important in this interaction process. Processes are the way for creating values for the customer. The core processes of retail business include new product development processes, customer management process, supplier management process and order fulfillment process (Helen Peck, Martin Christopher and Adrian Payne, 1999). Now-a-days, most of the retail markets are developed based on the customer supported services. Customer services include relationships between the suppliers and customers. These services affected on the development of the retail firms and their customers to face market competitors. Customer services are helpful for the retail organizations and thereby increasing the share value in market. The relationship marketing strategies are defined by the implementation methods. These implementation methods are based on the sub system to improve the organization processes and relationships (Alain Ferrand and Scott McCarthy, 2008). Hence these three elements of the marketing can affect the marketing success and these elements are helpful while building up the relationship strategies.
Implementation of relationship strategies is based on delivering and creating a value in retail business. This implementation involves many strategies. The first one is relationships in multiple stockholders this issue illustrates two models in the retail business and the models are relationship value management frame work and service profit chain. These models are helpful in market domains for understanding the relationships between the consumer and customer. The second one is selecting an appropriate relationship marketing strategies for different customers. Third strategy is detail planning within the six market models. Finally organizations make use of this relationship management (Martin Christopher, Adrian Payne and David Ballantyne, 2002).
Achieving more profits for a retailing company is not an easy task and needs good customer relationship management. Customer relationship is the most important aspect in every market strategy. Marketing relationships are the living things in all types of businesses. If the company maintains good market relationships with their customers then automatically profits are obtained. These profits are obtained in the following ways (William M. Pride and O. C. Ferrell, 2004).
- By attracting new customers.
- By enhancing the profits of the existed customer.
- By increasing the customer relationship.
Implementing the market relationship means exchange of relationships between the consumer and customer. Maintaining good relationship with customers is the main goal of many retail marketers. To maintain these relationships for a long time retail marketers are turned into the market research and information technology (William M. Pride and O. C. Ferrell, 2004). To create marketing strategies Customer Relationship Management (CRM) focuses on the customer information. Managing these relationships need to identify the buying behavior and consumer behavior with the customer. CRM is mainly focused on developing the company relationship capabilities. To improve these capabilities customer management leader must contain good relationship qualities with the customers (Bryan Foss and Merlin Stone, 2001). Hence from the above discussion it can be stated that implementation of marketing strategies depends upon customer interactions because profits for an organizations can be obtained by maintaining good customer relationships.
2.5 Description of Relationship marketing and its applications
In relationship marketing organizations mainly concentrates on customer satisfaction. Relationship marketing has lot of applications towards organization and customers. Organizations can maintain a long relationship with the customers through relationship marketing. Maintaining long relationship with the customers will be a benefit for both customers and organizations (Rajeev Batra and David Shepard, 1999). For any organization, though profit is the main motive they should also concentrate on customer needs. If organizations concentrate on quality and needs of customer then they can get the profits easily (Jakki J. Mohr, Sanjit Senguptha and Stanley F. Slater, 2004). Some of the applications towards the organizations for maintaining good customer relationships:
- Increased purchase - If organization maintains a good relationship with the customer then they tend to buy more products. Organizations must ensure that the customers should remain interested and engaged in purchasing the product (Christian, 2008).
- Lower costs - Sometimes organizations may decrease the cost of the product for attracting the new user and to maintain the existing customers. This decrease of costs will be a great benefit to both the customers and organizations. Customers can buy their products for low costs as well as the organizations can attract more customers.
- Life time value - Good and loyal customers can generate life time value of a product or organization. If loyal customers buy the products in same organization throughout his life time then organization will get profits continuously (Shajahan, S., 2004).
- Sustainability - Maintaining long relationships with customers is a great benefit to the organization. Customer may stick to one particular organization for a long time if organizations have good relationships with their customers. Through these long relationships with the customers an organization can give a good competition to other organizations. Organizations can sustain in the competitive market with good customer relationship.
- Word of mouth promotion - To promote any product organizations needs lot of promotions and advertisements, for this it requires lot of money. But if organizations maintain good will in the market then the product will automatically promoted through customer referrals and mouth promotions.
- Employee's job satisfaction - Satisfaction of customers will bring satisfaction to the employee's in the organization. If customer satisfied then the turnover of the organization will increase (Levitt, 2009).
From the above discussion it can be understood that, all the applications towards the organization will lead to the profits of the organization. For any organization Profit is the ultimate goal. So ultimate goal of the organization can be achieved by maintain good relationships with the customers.
Relationship marketing has been implementing in many organizations. For example, Meridien group of hotels used relationship marketing very effectively for satisfying the customers. Meridien hotels are established all over the world. This hotel is open to all the travelers all over the world. Meridian group of hotels recently launched a program called moments.com. By this program they are attracting the customers and they are finding the loyal customers. Before using relational marketing they used to implement the seasonal packages. But implementing relationship marketing is more advantageous than other methods. Now Merridian hotels are implementing the packages based on the customer needs but not on the seasons. They provided all the requirements for the customers within the hotel only. This made the customers to choose Merridian hotel as one of the best hotel in the world (SHAINESH, G. and Atul Parvatiyar, 2001).
2.6 Approaches for maintaining relationships among the customers and retailers
Customer plays an important role in any type of business. The relationship between customer and retailer is maintained when customer is loyalty and satisfied. Further, developing the relationship retailers must and should have the total information about the customers (Margaret Bruce, Christopher Moore and Grete Birtwistle, 2004). But according to Robert H. Lowson, 'The relationship between customer service level and inventory of finished goods for low, medium and high vendor process time' (2002, p.207), if the retail markets provide better services for the customer in supply of good in time that maintains a good relationship between them. But as some aspects the retails are unable to meet the requirements of the customer satisfaction.
Some of the approaches for maintain relationship among the customers and retailers were as follows:
- Identify the customer - Try to find out relevant customer that what the products and services they need they might be either internal or external customers and by maintain the data base of the customers (Greg Balanko-Dickson, 2006).
- Gaining customer attention-Try to attract the more and more customer by advertizing the product.
- Understanding customer needs-Try to understand the needs of the customer in detail regarding what they are, actually what is the need and what they do.
- Customer expectations-Try to clarity the customer exactly what the products are been delivered.
- Feedback of customers-Taking the feedback from the customer also helps a lot for the retailers, regarding the comments they mentioned and opine of the customer about the performance of the product and how useful to them (Kimball Fisher, R.Rayner and William Belgard, 1995).
According to Gavriel Salvendy (2001, p.775), 'Relationship among manufacturers, suppliers, vendors, retailers and customers work together to provide a product that the customer wants at a price that the customer is willing to pay'. By maintaining the quality of service in the production of goods at best price the market standards and retailers are trying to grape the attention of the customer by providing schemas and giving discounts on the products which helps in maintaining good relationship between them.
- Customer Satisfaction-Customer satisfaction is one of the major approaches to bind a strong relationship between the retailer and the customer by analyzing how customer is reacting positively or negatively (Ashley Friedlein, 2003).
Another approach is finding out the customers interest by analyzing how many time they are visiting their website for a particular product, such that they can identify the area of interest of a customers and their wills. Now-a-days, usage of internet has been gradually increasing day by day, providing online shopping to retailers for increasing profits by attracting customers. Customers are also attracted by e-retailers because more benefits like saving time and get all the details of the product etc even for retails by rapid increase in sale for e-retails (Michael Shaw, 2003). By the approach of e-retailer new customer are also been attracted even customer also gain profits.
Customer- Facing Front-End Approach
customer relationship management is trying to analyze the transaction of sales and benefits owned by the customer via internet(e-retailer) so that they can clearly identify the problems faced by the customers to maintain good relationships between them (Kumar,2006). There is one to one relationship between the customer and retailer which refers to relationship marketing by promoting quality approach. Provide more facilities for the customers who frequently visit. A friendly interaction should be maintained between the customer and retailer to grape the attention of customers. From all the above approaches it can be concluded that a good relationship between the customers and retailers can be obtained by providing online shopping, loyalty, maintaining good communication between retails and customers, analyzing the customer satisfaction etc which helps in maintaining friendly and good relationships between the retailers and customers.
2.7 Types of Markets
Market is described as a place where different types of operations are done. Market mainly depends on consumers and vendors. It is a place where both consumers and retailers get together to buy and sell. Recently internet plays an important role in marketing. Even consumers are interested in online marketing (Economy Watch, 2009).
Types of Consumer markets
There are two types of consumer markets. They are as follows:
- Commodity markets
- Industrial markets and Capital Goods
- Consumer Market
- Business to Business Market
Commodity markets are the markets which include goods related to energy, soft commodities, grains and financial communities. Goods related to energy are Oil, coal, gas and renewable energy resources like bio diesel. Wheat, rice, soya beans, coffee, sugar etc. are some of the commodities related to grains. Bonds are related to financial commodities (tutor2u, 2009).
Industrial Markets and Capital Goods
Capital goods markets assist industries to purchase long-lasting goods which are used in manufacturing process. These are also associated with several other services. Transactions are being inclined for whole sale with large amount of supplies being carried out with very low cost (Economy Watch, 2009).
Hence from the above context it can be understood that market is place where different types of process is done and it mainly depends on consumers and suppliers. Consumer markets are divided into two types they are commodity goods and industrial markets and capital goods. Commodity markets are related to food and energy related goods. Whereas an industrial market depends on purchasing goods by which a manufacturing of goods is made.
A market is treated as a place where buyers and sellers interact with each other so as to attain some sort of material exchange for the benefit of both. There exist different types of markets and out of all these types, consumer market and business to business market are the major ones in retailing industry (Alan E. Aldridge, 2005). These two markets can be explained clearly with its suitable sectors as follows:
Consumer market is revolutionizing at a rapid speed and leading to some of the new opportunities and challenges for market analyzers. By the introduction of consumer markets, several modifications in the field are rising and they include changes in buying behavior, growth in the urbanization, changing trends and lifestyles of people, implanting emergency in the service sector and improvement in the role of retailer so as to upgrade the link between buyer and seller (Consumer Markets, 2009). Consumer market is a collection of different market types and they include Consumer products, Retail, Food and beverages etc. Out of all these markets Food and beverages is the foremost type for analyzing the approaches used by organizations involved in food sector. The growth and increased popularity for the companies involved in this type of sectors is mainly due to the increased awareness of consumers and their changing lifestyles. There exist several sub segments in this type of sector and they are dairy products, beverages, frozen foods, meat poultry, packaged foods, Cocoa products and confectionary etc. (India Brand Equity Foundation, 2009). From the above context it can be understood that though there exist several types of marketing styles, customer market and business to business market because markets have influenced the marketing environment in attaining the customer satisfaction and fulfilling the needs of industries. It can also be stated that consumer markets have gained the popularity and the reason for such an increased popularity is because of changing trends and lifestyles of people.
Business to Business Market
Business to Business market is a large scale marketing which involves interaction between industries rather than the normal buyer and seller. Business to Business market is a type of mechanism which has the ability to overcome the limitations of general markets and makes it easy for organizations to eliminate market liquidity situation, low operational velocity and high transactional costs (MAHADEVAN, B., 2004). One of the industrial sectors which use this type of marketing is textile industry. Many of the organizations that involve in textile industry are making use of business to business market because it involves transportation of huge amounts of clothes and thereby eliminating the problems involved in normal one to one exchange (Jeanne Mager Stellman, 1998). From the above it can be stated that business to business market is best suited to the textile industry because it has the advantage of eliminating traditional one to one exchanging and also eliminates the market liquidity, low operational velocity.
2.7.1 Compare and contrast the approaches used in various organizations
Retail sectors are one of the major sectors that play a significant role in raising the growth of nation. For example, the Indian retail market is placed and considered as the fifth largest retail destination and globally represented as the second most attractive emerging market which increases the investment (IBEF, 2009). These sectors include various markets like consumer markets, business to business markets, etc. Different organizations will be related to various sectors based on their requirements. These entire sectors follow different approaches for reaching their goals or objectives. Some of the sectors that are included in the retail sectors are food sectors, clothing sector, etc. where the food sector will be related to the consumer markets and the clothing sector will be related to the business to business markets. For example: Consider Barbeque nation in the food sector and the Levi's Strauss clothing & Co. for the business to business markets.
Levis Strauss & Co. - It is one of the largest brand names over the worldwide and considered as the world's largest clothing industry. This organization is famous in producing the new products called as blue jeans. The productions of these products were increased mainly in U.S. the name of this company have become popular all over the work within a short period of time. It has been increasing its growth right from its establishment and is established in various locations like India, South Africa, Australia, Japan, Hong Kong, New Zealand, South Korea, Brazil, Philippines, Argentina and Taiwan (Levi Strauss & Co., 2009). This clothing sector will be related to business to business markets. Business to business markets sells the products and services to the business people for running their operations. They just ignore the views of the people and develop the products based on the aims of the people. From this context, it can be understood that business to business sector provides services to the small scale industries based on their goals. Clothing sectors is one of such service that provides and designs the products according to their principles.
Barbeque Nation Restaurant - Barbeque Nation is one of the most familiar restaurants. It offers various services to the people based on their needs and follows a new principle in offering the services that are it prefixes the menu and dining experience that comes with a live grill. "Experience a Cooking that has your contribution in basting the food with your Favorite marinade and give that finishing touch that the customer prefer" (Barbeque Nation, 2009, p.1). It is using this process to attract more number of customers towards their restaurant. This food sector is related to consumer markets. This organization is included in the consumer markets as these markets design the products and provide services for the general consumers. This sector is established only for offering services to the consumers and this sector can easily raise their growth with the help of changing life styles and consumer awareness (CM, 2009). The main aim of these sectors is to satisfy the customers and should change their services based on their needs. From this context, it can be understood that consumer market concentrates mainly on the views of customers and considers the feedback from them. Based on their feedback, services offered in the sectors will be changed. Food sector will belong to this category and provides services to customers and operates on their ideas.
Hence, it can be said that different organizations belong to various sectors based on their objectives. Some of the markets directly consider the views of the people and other markets concentrates on their goals where it offers services to small scale industries.
2.8 Challenges faced by marketing organizations
Relationship marketing is an event, determined by the plans of customer point of reference. In this event, organization faces certain challenges to facilitate relationship with customers (Evert Gummesson, 2002). These challenges faced by organization are explained as follows:
The necessary condition for an organization in providing customer oriented and personal information is to recognize the exact information required by the end grouping. Organizations have to maintain detailed information about the customer necessity and have to maintain the record. In order to know the customer requirements, organizations have to allow customers find themselves and submit a brief description about it. But the organization must be careful that obtained data must not lead to any reactance (Thorsten Henning- Thurau, Ursula Hansen, 2000). From the above context it can be understood that an organization have to make a note of the customer needs and have to maintain a documentation of needs. Organization has to take just an idea from the customer views but should not follow each and every point specified by the customer because it increases the unnecessary problems for organizations.
Different types of statements managed by organization do not try to find usage of the requirements given by the customer and learn to keep a conversation with repeated contacts to acquire the appropriate data. It also requires a repeated modification and restructure of resources are provided in parallel with regular search for new and good-looking message parts (Mike Worsam, 2003). From the above context it can be understood that organizations must not fully concentrate on the ideas given by the customers but have to maintain the database of their suggestions. Organization has to reach the hope of customers in terms of quality of the content determined by the customer. The response time of an organization to the customer complaints on content must be solved as early as possible, since the customers expect quick response for their complaints. From the above context it can be understood that customer except a quick response to their complaints and quality of the product should reach the expectations.
A chat forum introduced by an organization creates a major challenge in encouraging customers to participate in chat forums. Customers will participate in forums only if the products create interest in their minds. In certain cases too much influence can also leads to certain problems which affects development of an organization (Alain Ferrand and Scott McCarthy, 2008). From the above context it can be understood that organizations face major challenge to make their customers in participating in chat forums so that organizations can correct their errors and provide a good service to customers. Organization provides chat forums on the web to communicate with customers and get their feedback throughout the world. In this chat forums organization includes the information related to company and their products to maintain the balance with customers. It is necessary for any organization to maintain the balance between organization and customer to develop in the competitive market. Customer needs to register in organizations chat forum so that they can get the information related to the organization and their product any time by log-in into chat forums (Genevieve Edmonds and luke Beardon, 2008). Thus, chat forums are the great way to save the time and money for customers as well as for organizations. Organizations can maintain the relationships with customers with the help of chat forums.
Analyzing the information gained from the customer is another important challenge for an organization. The requirements of customer on products are continuously changing and also the mistakes noticed from previous products can be noted from the customers. This process has to be done quickly and mistakes have to be corrected as early as possible to maintain good relationship with customers (Harris and Charles Dennis, 2002). From the above context it can be understood that the organization must analyze the information collected from customers and has to rectify their mistakes of the earlier products in order to get good response from the customers.
One of the main challenges for organization is the means of communication between the organization and customers. Previously company staff members provided communication externally so as to reduce unnecessary problems among them. Internet provided a good means of communication between customers and organization because the company can advertise on their new products so that customers can get the complete information about the every product related to the organization (Thorsten Henning- Thurau, Ursula Hansen, 2000). Hence from the above it can be concluded that there exist many challenges for an organization and they has to be solved immediately so that there will not be any problems for the future of an organization.
Hence, form the above study on the literature review of relationship marketing stated that relationship marketing is the main important marketing technique for the organizations to maintain the balance between the customer and mangers or sellers. Every organization wants to get the profits and good name in the world market so they are implementing relationship marketing and their application into their organizations. Relationship marketing has six marketing frameworks which are useful to increase the relationship between the organizations and maintain the relationship between the employee and customers within organizations. Relationship marketing strategies are implemented in the organizations based on the communication level between the organization and customers. By implementing the marketing strategies in the organizations, organizations get profits and they can maintain strong relationships with customers. Thus, the demands for analysis and measurements of effectiveness of relationship marketing will be increased in the future. The main goal of the relationship marketing in the future is to provide the increased profits, benefits and performance to all the stakeholders in the organizations.
Chapter 3: Research Methodology
Relationship marketing acts as a key role in the present market structure as it mainly maintain the relationship among the clients and business people. The process of the Relationship marketing is mainly focused on the methodologies in representing attractive market techniques, proper maintaining of goods and enhancing key relationships with each and every individual customer indicating trust in marking the products (Francis Buttle, 1996). Since it is consider to be a key point in the Relationship market. UK lead companies have deiced to do Qualitative and quantitative research on their products. UK retail marketing system is very highly difficult and competitive. As marketing requires change these researches study methodologies in current marketing used by retail companies in UK.
3.2. Research approaches
Research approach is capable of making the components work harmoniously in completing the research work successfully. These approaches mainly state the goals in a specific order for performing the task (Joseph Alex Maxwell, 2005).
Research approaches are classified in to two types:
- Qualitative Research Approach
- Quantitative Research Approach
3.2.1. Qualitative Research
Qualitative research has developed in 1980's. It is a field of inquiry that explains discipline and subject matters. It is called as ethnographic research. It involves collection of narrative data in a natural setting in order to gain insights into phenomenon of interest. This research studies many variables over an extensive period of time to find out the way things are, how and why they came to be that way and what it all means(Michael Huberman Matthew and Miles, 2002).
When it comes to UK retail Marketing Environment it is highly complex and competitive. As marketing requires change this research studies current marketing practices used by retail companies in UK. This research investigates their correlation across four different retail sectors. All the sectors were used randomly by taking samples of companies like grocery, banking, optical, health etc. Among all the companies respondents feel that their company is improving its marketing practices to develop relationship with customers. Across all retail company's variety of marketing types are being implemented (David Gilbert and Fiona Sumner, 2004).
Retailing is the eighth biggest sector of the world's economy in terms of market status. Retail sector makes contributions to employment and GDP. It also contributes to demand and economic growth indirectly through its work with business services and suppliers. The Qualitative research tells us the innovations or improvements to be made in the market to develop relationship in retail sector. They are as follows:
- This is achieved by improving the effectiveness of innovation related support activity within Government which will require a systematic approach to coordinating information and expertise in Government. Not only that a better method to identify and challenging of commercial, innovation related initiatives are required.
- By Increasing the awareness and take-up of R and D tax credits by retail sector and is achieved by improving speed and transparency to reduce uncertainty and also by retailers and suppliers which they undertake to identify and priories which qualifies both large and small business.
- Innovative promotion of retailers in sustainability is achieved by Provision of support mechanisms like VAT reductions etc, reduction of barriers and fostering of skills by building environmental awareness.
- By identifying and supporting the complex sets of skills required for retail marketing and is achieved by providing awareness training to employees, management of innovation skills training, cross-sector technical skills training capability etc.
Qualitative researches and case study approaches are recognized practices in management of retail market for innovation and understanding behaviors, values and beliefs. The degree of external validity is a consideration of qualitative research. This is because of the tendency to employ case studies or smaller samples that have been minimized to some extent through the use of large mixed purposive samples (Latchezar Hristov and Dr. Jonathan Reynolds, 2007).
Applications of qualitative research in UK Retail Marketing:
The qualitative research in UK Retails marketing provides high value products or services and industrial products that are not generic commodities. This leads to high switching costs. Production phase is improved by the customer involvement and a continuous relationship should be maintained (Levitt, 2009).
For instance, consider an organization that implies the qualitative research in retail marketing is London Business Scholl whose Moto is Targeting a global segment with global business capabilities. This organization uses Zara to highlight the essence of successful global marketing strategies which enables it to reach a global segment across many countries and has built global business capabilities to bring profits. Integrating global strategy, innovative marketing and a global supply chain is achieved by creating values to customers. Their main objective is to reach the industry professionals to form group of participants (Proact, 2007).
Hence from the above context it is understood that the qualitative research develops a good relationship in the UK Retail market. This is achieved by following some of the techniques so that the relationship between the customer and the retailer improves.
3.2.2. Quantitative Research
The definition of the Quantitative Research is explained by Daniel Muijs (2004) as 'Phenomena by collecting numerical data that are analyzed using mathematically based methods (in particular statistics)'. Therefore, Quantitative research is used to measure the total number of public feel, consider or do something in a particular approach. Mainly this survey has a propensity to include large of case studies by conducting several number of interviews. 'Structured questionnaires are usually used incorporating mainly closed questions - questions with set responses' (DJS Research, 2005). Various numbers of methods exits which are used for gathering quantitative information but mainly focused on telephone interviews.
The main intention of Robert Murray Thomas (2003) doing research is to add more information but it is time consuming to do better research. Since there exit four different Quantitative case studies:
- Survey done on telephones.
- By experiments.
- Co-relational case studies.
- By analyzing the Quantitative content.
UK lead companies have deiced to do quantitative research on their products. Since they have decided to do survey on the opinion of the customers but they are not focusing on the manufacturing of the product. Conventional customer quantitative research helps the lead company to have clear idea of the product out come and its disadvantages. So they can add the additional quality of the product. 'The outcome of the research gave a leading edge to the UK Company and this was subsequently marketed very efficiently to its benefits' (Robin Birn, 2004). This made UK lead company to have strong position in the market resulting in tremendous growth in the market campaign. Most of the companies are focusing on the market research for its competitive advantages. This made the companies to attract new customer by presenting the improved quality of the products which are designed in such a way to increase customer's efficiency ( Rajanee Ranjan, 2002). Even in depth interviews have been done by the UK companies where approved with many products sold in the market to launch their ideas towards leading suppliers in market in terms of packing their goods like cost, delivery and quality along with company's good will. On the other hand the companies are facing problems in conducting Face to Face interviews as it is time consuming and affecting the budget (Jeremy Kendall, 2003). Even telephonic interviews may potentially lead the respondent and it may cause a negative impact on the response by the customers and may affect the brand name in the market.
3.3. Data types
Data is simply said as raw information. To understand this information different ways or methods are given which can be defined as data types. Data types helps in knowing about the structure of the data. Data types include some models and operations which operate on the data. For any research first and foremost thing is to know about the different types of data which is helpful in analyzing and understanding the business activities (James Stephenson and Rich Mintzer, 2008). For any general research of data, researchers frame the data in two types and are classified as shown below:
- Primary data
- Secondary data
Primary data Types
Primary data is the information which is got by conducting own research. This information can be collected freely by talking to the customers, suppliers or by observing the target customers and their goods or services. Primary data consists of data which is collected by the researchers for a particular task in the fields like information about the daily temperature; rainfall etc. (Larry O'Brien,1992) primary data involves 'the use of questionnaire, other form of social survey, to obtain economic, social or attitudinal data directly from households or individual customers'(Marsh and Bateson). Different ways are used for collecting the primary data some of them are: hosting focus groups, looking of yellow pages, observations, questionnaires and searching through online.
Advantages of using primary data types for retail marketing in UK retail sectors
The advantage of using this approach is the data which is collected by the researchers can be easily understood, can find errors and correct them easily as the data is from their collections and recordings. Here researchers can adapt the data collection methods according to their needs and specifications. This primary data helps in knowing the exact data and the tools or methods used in it. The study on specific tool and its consistent protocols are clearly explained (Janet Houser, 2007). The main advantage of using this methodology is the time required is very less and the helpful to meet the specific meets, the answers for specific research can be easily know. This type of primary data helps in retail marketing as the data can be collected within time which is useful to get uptakes from the customers. In this researchers can easily gather information rather than assigning work to the other companies.
As from the above context it can be know that primary data is easy and uses less time there are some disadvantages in using them some of them are it is very expensive, there is only one way to solve the questions, reliance on patient recall. Due to these disadvantages researchers are using secondary data types in place of primary data types as the secondary data types can overcome these disadvantages (jurgen Uhl and Hans Aldrecht Schmid, 1990)
Secondary Data types
Secondary data is the information which already available in some form to the user. Secondary data can be collected from both internal and external resources. Internal resources like database, company analysis and reports can collect data secondary data. Secondary data can also acquired from external resources like websites, government statistics, trade associations, books, journals, newspapers, national and international institutions, material from video tapes, CD and DVD's (Geoffrey Lancaster, 2005). Collecting secondary data is cheaper when compared with primary data, because secondary data will be available directly to the users without any surveys or researches. While collecting secondary data, user must be careful in choosing resources in order to get the desired data. Secondary information such as sales reports, storage, transportation and finance related issues should be collected cautiously by enterprises in order to get the accurate results in business. User must check copyrights, time span of the data, source bias, exclusive rights, trademarks and reliability of the resources for collecting information (James Stephenson and Rich Mintzer, 2008).
Relationship marketing in UK retail sector uses both primary and secondary data. But using secondary data is more advantageous in relationship marketing in UK retail sectors when compared with primary data. The main reason for using secondary data rather than primary data is time and cost. Collecting primary data requires more time and money when compared with secondary data (Masaaki Kotabe and Kristiaan Helsen, 2009). In relationship marketing to conduct surveys researchers must approach different organizations and should take opinions from users. These opinions should be examined by the researcher in order to get accurate statistics in surveys. So conducting surveys and polls for relationship marketing in UK retail sector is a time taking process. Different opinions from different organizations may lead to confusion for the researcher. Sometimes collecting opinions from each and every organization may be a hectic work for the researcher (J Paul Peter James H Donnelly, 2004). Using secondary data for relationship marketing in UK retail sector can obtain more accurate data compared with primary data. The users can easily understand the market growth and problems in the market using secondary data for relationship marketing in UK retail sector. In relationship marketing users need not to collect data from organizations as the secondary data is directly available. User just needs to extract the available data to make use of it (Research, 2004). Hence collecting primary data like surveys and polls in relationship marketing requires greater amount of time and cost. Collecting primary data may not be possible for all the users and organizations. Organizations need not to conduct surveys and polls every time if it uses secondary data. So using secondary data will be a great advantage to relationship marketing in UK retail sector for saving time and money.
There are some disadvantages of using secondary data in relationship marketing. Secondary data collected by the organizations many not be correct and time span of that data may less. Sometimes collected data may be insufficient for the organizations. Secondary data may be unreliable because author can write their own views (Francis Buttle, 1996). Data from one source may be different from another source; this may cause confusion to the organizations who are dealing with relationship marketing. For relationship marketing in UK retail sector, statistics play an important role in defining various things. If unauthorized data is collected from sources then the total system may be affected (Philip Kotler and Gray Armstrong,
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