ABSTRACT

 Purpose

The purpose of this research was to examine as whether and to what degree CRM implementation is effective for retail companies in India in relation to their business performance and success in the current changing environment. The research has attempted to accomplish following objectives: to identify the purpose of CRM implementation  in Indian retail companies; to identify the dimensions focus of CRM implementation in Indian retail companies; to examine the role of CRM implementation in business performance of Indian retail companies; to identify the challenges of CRM implementation  in Indian retail companies; and to look for suitable strategy to prevail over the challenges of CRM implementation  in Indian retail companies. Furthermore, the research has attempted to answer the following research questions: how effective is the implementation CRM strategy dimensions by the firms; whether CRM implementation in terms of CRM strategy dimensions enhances the performance of firms; and how effective are firms in prevailing over the challenges of CRM implementation.

 Methodology

For achieving the research objectives and answering the research questions, deductive approach was adopted and quantitative method was put into application. The data was collected through questionnaire that comprised both multiple options and scale based questions. The research participants in this research were managerial people working in various retail firms in India (Delhi based). The data was analysed using both simple and standard statistics using Pearson correlation.

Findings/Implications

The findings of the research represent the experiences and views of middle level managers and lower level managers in Indian Retail firms. Further the findings of the research represent the experiences and views of managerial people working in Indian retail firms who have industry experience of either 5-10 years or above 10 years. Moreover, the findings of the research represent the experiences and views of managerial people working in Indian retail firms who have current experience of either 2-5 years 5-10 years. Increase sales and revenue and increase profitability are the main purposes of CRM implementation in Indian retail firms. CRM implementation in Indian retail firms is centrally focused towards people and technology   dimensions. In order to enhance business performance through CRM implementation   Indian retail firms are oriented towards strategic competence of human knowledge and IT infrastructure. The major challenge of CRM implementation for Indian retail firms are feasibility of implementing particular model and lack of monitoring and controlling. Top-down as CRM strategic approach is comparatively more effective for Indian retail firms in order to have successful achievement of CRM implementation. Both human knowledge and IT infrastructure as CRM strategy dimensions are highly effective. CRM strategy effective implementation is positively correlated to the dimensions of human knowledge and IT infrastructure for firms in Indian retail industry. CRM implementation always enhances performance of firms in Indian retail industry. CRM   implementation is positively correlated to enhanced performance for firms in Indian retail industry. Generally firms in Indian retail industry are either simply successful or not successful in prevailing over the challenges of CRM implementation. Prevailing over the challenges of CRM implementation and firm’s effectiveness is not correlated.

TABLE OF CONTENTS

 Title Page                                                                                            

Declaration                                                                                         

Acknowledgement                                                                               

Abstract                                                                                               

LIST OF TABLES

LIST OF FIGURES

Chapter # 1                                         INTRODUCTION

1.1       BACKGROUND AND RATIONALE

Biyalogorsky et al. (2001) stated that the delighted customers have involved themselves in referrals which have led to increase in sales. It is going to be vital for retail firms to emphasize on long-term relationship development with their clienteles. A major determinant of relationship marketing strategy’s success of a company is the way customers perceive resulting quality of service. Perceived quality is the main driver of the perceived value. CRM helps a company to enjoy a better hold on its customer equity thereby offering a realistic pointer of the value of the consumers. CRM has been described as an establishment, maintenance, optimization and development, of long-term and mutually benefitting relationships between a customer and the organization (Fox and Stead, (2001).  The notion of ‘augmented product stressing’ that a consumer is fascinated by the overall buying experience and not just buying the essential product. Srinivasan and Moorman (2005) say researchers have linked increase in CRM spending to superior customer satisfaction. Jain at al. (2005) state that today service organizations have shifted their focus towards relational exchange from transactional exchange to develop a relationship with customers which is mutually satisfying.

An overall perception of customers on a retail store is an outcome of the product attributes & store attributes. The consumer perceptions of the store attribute is influenced by type of the products, retail format, shopping intention cultural value, and customer base. Uusitalo (2001) Customers perception about the product characteristics vary depending upon product’s nature and the consumer’s socio-economic nature. Miranda, Konya and Havrila (2005) argue that the previous researches have recognized store attributes to be a multi-dimensional concept which includes store’s location, in-store promotions, nature and quality of stocks, sales personnel, convenience of store, physical attributes, atmosphere and loyalty cards influence consumer behavior. In India store convenience and the customer services have a positive influence on consumer’s store choices, while, entertainment, ambience facilities and, parking have negative influence upon a consumer’s choice (Sinha and Banerjee, 2004). According to Tuli and Mookerjee (2004) Indian consumers are price sensitive as well as quality conscious. Indian consumers’ outlook towards a new product is changing considerably and this could escalate their intention for shopping in fresh retail formats like supermarkets (Choo, Jung and Pysarchik, 2004). Reynolds & Arnold (2000) argue that developing close relationship between a sales person and a customer could provide a vital differential advantage.

Retail industry in India is witnessing a paradigm shift of its structure, practices and composition. Advent of an organized retailing format in the last couple of years has highly influenced every consumer’s lifestyle. Increasing competition levels and escalating customer demands are posing stern challenges to retain a customer. From a customary grocery store of an unorganized sector to a retail chain store of organized sector, everyone is trying to find a superior and an innovative method for attracting and keeping customers to make profit and strengthen market share. Managing effective relationship with the customers has become vital for achieving and to sustain competitive edge in today’s ever increasing competitive business environment. To develop and sustain a lifelong relationship with the customers it is necessary to understand and respond to the emotional and cognitive expectations of a customer. CRM is now widely acknowledged and used as the supreme marketing technique which involves human as well as technical dimensions. CRM involves an overall customer centric approach and commitment from complete organization to integrate its people, its process and the technology to help serve the customers (Jain et al., 2010). 

CRM’s human dimension is considered most difficult element because of the user’s sensitivity to change. A CRM process, which can supports and automates an integrated customer process, often, make alterations in methods by which users conduct their daily jobs (Lendel, 2008). Users who are yet to properly understand the change reasons, who didn’t participate in formulating the change, those who were unable to get adequate information, or those who didn’t get satisfactory training on change will generally be adverse towards changes.  CRM is no longer a science pertaining to customer satisfaction. It has also moved in the direction of becoming an integral corporate strategy part. Customer service along with delivery mechanisms and the product price are now more predominant aspects which influence customer’s decision making ability. Companies are now increasingly adopting modern tools & techniques to enhance customer value by means of sophisticated CRM suites. CRM applications command noteworthy significance in services sector speaking generally and retailing if being particular.

 1.2       INDUSTRY CONTEXT

The liberalization of the Indian economy in 1990s has brought about flourishing capital markets, emergence of several new industries, a change in consumer’s shopping habit, entrance of global firms, etc. India today has a vibrant economy which is growing at an average GDP of 8.6% approximately. Powered by a robust internal demand, India has displayed a healthy growth which will probably be sustained for coming years. Large and an educated middle-class along with youth consumers are giving a fillip to demand across retail categories. Also, the unique demography of India attracts companies which are operating in multi categories towards the Indian market. These include apparel, food and beverages, footwear, mobile phones, accessories, personal care, hair care, etc. (Vemaraju, 2011).

According to Vemaraju (2011) the retail industry of India is the world’s 5^th largest and is estimated to grow 25 to 30% annually. India’s retail sector contributes over 10% to country’s GDP and about 8% to total employment level (Vemaraju, 2011). In these changing times the foremost challenge in designing a retail strategy is to understand perceptions of an Indian customer. Chang & Tu (2005) are of the view that relationship building with customers along with retaining loyalty of customer has been recognized as an important medium to gain competitive edge in the retail sector. Hence retail managers must identify CRM’s importance as a multifaceted tool to influence customer perception and their decision making.

As per Global Retail Development Index – 2012, an annual survey conducted by A.T Kearney ranks India 5^th most attractive country for investing in retail among thirty emerging markets (A.T Kearney, 2012). 25 macroeconomic & retail centric variables which help retailers to formulate global strategies and identify investment opportunities in emerging markets are analysed in this Index. US$ 350bn is the worth of Indian retail sector with a low ORP (organised retail penetration) ranging from 5 to 8% (PwC, 2012). Modern trade emerged During the 90s there was emergence of modern trade chiefly in food & grocery sector which is currently growing at 15 to 20% CAGR (PwC, 2012).

Retail sector in India comprises of organized as well as unorganised participants. Taking into account the country’s size of retail market, research reports by PwC suggest that 12mn mom-and-pop stores constituting unorganised market could co-exist with fresh trade players. Realizing the potential of Indian retail market’s potential in the long run, many of Indian leading conglomerates are allocating billion dollars for launching large scale initiatives in retail which consist of cash-and-carry, books, footwear, food and grocery, apparel, music and leisure, accessories, gems and jewellery, etc. Whether global retailers or domestic ones, everyone is eager to capitalize upon the Indian growth story. The 300mn aspiring middle-class consumers, a huge demand-driven populace of 500mn young consumers along with a 700mn relatively untapped rural population constitutes the Indian growth story (PwC, 2012). In addition, a strong growth in GDP, growing consumer confidence, increasing incomes, consumption-based behaviour and an enormous consumer pool have catapulted India among the world’s attractive destinations for retail. Entrance of new players in the increasingly crowed Indian marketplace has made customer service the key feature to determine profit and survive. Today, an Indian consumer is flooded with various products & services. As a result, it is imperative for retailers to offer good service in India in order to build loyalty and attract repeat purchase. Retailers in developed markets have successfully made use of customer service to create footfalls and construct a positive image of the brand.

Modern retailers now use technologically improved clues to draw and hold customers. Terblanche and Boshoff (2001) suggested that an experience of retail store includes activities like search for merchandise, browsing, evaluating product variety and quality price comparisons, and communications with the store personnel.  India’s retail sector remains mainly traditional, but modern format stores are emerging (Mulky and Nargundkar, 2003). As compared with customary stores, the latest format stores have pre-engineered outlets of retail, having a well-designed layout, value added services, ambience, display, technology based operations, self-service, and many other dimensions with a modern outlook & practices. Jain and Bagdare (2009) they seem to fascinate and have an influence on young minds as they satisfy both utilitarian and hedonic needs.  Due to the growing applicability of CRM in the service sector, it has acquired a great deal of attention by scholars and researchers. The purpose of this research is to evaluate the effectiveness of CRM implementation and dimensions in India’s Retail Sector.

1.3       AIMS AND OBJECTIVES

This research aims to examine as whether and to what degree CRM implementation is effective for retail companies in India in relation to their business performance and success in the current changing environment. The research attempts to accomplish following objectives:

• To identify the purpose of CRM implementation  in Indian retail companies
• To identify the dimensions focus of CRM implementation  in Indian retail companies
• To examine the role of CRM implementation in business performance of Indian retail companies
• To identify the challenges of CRM implementation  in Indian retail companies
• To look for suitable strategy to prevail over the challenges of CRM implementation  in Indian retail companies 

1.4       RESEARCH QUESTIONS

The research has attempted to answer following research questions:

• How effective is the implementation CRM strategy dimensions by the firms?
• Whether CRM implementation in terms of CRM strategy dimensions enhances the performance of firms?
• How effective are firms in prevailing over the challenges of CRM implementation?