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UNIT-10 Application of CRM
Rural India: An Introduction
There is no official definition of what constitutes a rural area. However, an urban area is defined as per the census of India as "all places with a municipality, corporation, cantonment or a notified town area". Rest all are assumed to be rural area. A location is defined as rural if at least 75 percent of the population is agrarian. Seventy percent of India’s population, or 820 million people, live in rural areas. As of the 2011 census, this equates to just under 2.5 times the population of the U.S.. With a population already in excess of 1.2 billion people, India has been an emerging economy by most of the global standards and is termed as a place of opportunity for exploring new markets majority of which lie in rural area. India has certain proportion of this total population wealthy or middle class, a much greater percentage of India’s population is low income. Rural areas, in particular, exemplify the lower income population. Understanding the characteristics that make the people and the market in rural India unique can help corporations to enter this market with success. Features of Indian Rural Markets: Large and Scattered market Agriculture based economy Infrastructure related Issues Regional Divide of development Low standard of living Diverse socio-economic backwardness
Issues in the Rural Marketing- Despite the constraints of the rural market and business, there exists an enormous opportunity in the rural market. The market of cities is fast saturating hence limiting the prospects of the marketer. Besides, the income in rural areas is fast growing. The natural growth of the economy coupled with several governmental initiatives as Implementation of Panchayati Raj, NREGA and others have led to increased employment and thus income opportunity in the rural areas. Increased literacy and health status have increased the life and quality of life as well. This led to increased prospect of income and thus expenditure in the rural areas. This all have made rural market very lucrative for the marketers. Although the rural market does offer a vast untapped potential, it is worth noting that rural businesses are plagued with certain issues that act as a constraint in the growth of the market. The major issues faced in Rural Marketing are: Underdeveloped People and Underdeveloped Markets Lack of Proper Physical Communication Facilities Media for Rural Communication
For generating awareness, events like fairs and festivals, Haats, etc., are used as occasions for brand communication. Cinema vans, shop-fronts, walls and wells are other media vehicles that have been utilized to increase brand and pack visibility. Ideas like putting stickers on the hand pumps, walls of the wells putting on tin plates on al the tree surrounding the pond are some of the innovative media used by personal wash like Lux and Lifebuoy and fabric wash items like Rin and Wheel. Idea was to advertise not only at the point of purchase but also at the time of consumption. Customisation of the communication language is also a must for better connect and thus effect of the communication 3.Packaging Customisation: Affordability is another important key in customization. Two of the most effective elements of a package designed for rural India include the size and visual communication. Due to the fact that rural Indians have small disposable incomes and very little storage space, one of the most popular concepts to hit the rural market has been sachets. Sachets were first introduced to India in the 1990’s by an Indian company selling a 10- milliliter sachet of Velvette shampoo. Coca-Cola is another company that has found success by thinking small. In a packaging change aimed directly at the rural and lower-income markets, Coca-Cola launched a new 200 mL (6.8 oz.) bottle for the equivalent of 10 cents in 2001 (Kripalani, 2003). After introducing the smaller size bottle, sales increased 34 percent by the end of the first quarter in 2002 (Kripalani, 2002). Packaging in smaller units clearly helps to increase the affordability of products for rural Indian consumers. 4.Distribution Customisation: Variety of innovations has taken place in customizing the distribution for rural markets. Making the product available at the regular store of the rural market to Stockists use auto-rickshaws, bullock-carts and even boats in the backwaters of Kerela by the stockists are the options resorted to by the marketers. Coca-Cola, which considers rural India as a future growth driver, has evolved a hub and spoke distribution model to reach the villages. LG Electronics defines all cities and towns other than the seven metros cities as rural and semi-urban market. To tap these unexplored country markets, LG has set up 45 area
offices and 59 rural/remote area offices. Multi Level Marketing have been an effective marketing distribution tool to for rural markets. Here the customers have been made partners in the business who not were consuming but also acting as distributors of the product and earning. So, every customer was earning and in some way remunerating their consumption and were compensated for their efforts.
1. Leveraging Rural Retailing: Retailing is the final phase of the distribution channel and it is clear by now that it is availability and distribution that drives growth in rural Indian markets. Hence retailing will be significant and will undergo greater organisation and maturity as is being witnessed in the urban markets, even in the rural markets. Innovative retail models which take into account the nuances of rural markets is the way forward. Study on buying behaviour of rural consumer indicates that the rural retailers influences 35% of purchase decisions. Therefore sheer product availability can affect decision of brand choice, volumes and market share. India offers a huge, sustainable and growing rural market which can be tapped effectively through innovative distribution channels with retailing being the most critical element of this strategy as it is the final touch point and the actual touch point with the customer which can be the most critical influence in the buying process. 2. Leveraging Technology There are various use of technology. A strategic use of technology by the Marketers is to get closer to the customers. There have been numerous ways in which technology had been used as providing communication over mobile phone, promotional vans with interactive gadgets, offering valuable informations and subsequently channelizing them for business interests and **so on.
- Providing Sponsorship:** Rural population is easily segmentable. The society is divided on the parameters of caste, religion, profession, income and others. These different sections of society have different cultural and social customs and traditions. The companies through their local channel partners sponsor their respective festivals, events, and other traditional functions. Dusshehra, Holi, Id and Bakarid, birthdays of various regional political, social and religious leaders, some other local festivals are also sponsored by the corporate. This provides them opportunity to get closer to these people and sections of the society. Event sponsorships, monetary sponsorships, arranging artists and other entertainments
conditioning, wonderful lighting, prominent locations, and other modern facilities are something that do not surprise people by any means. Even the public sector behemoth State Bank of India has planned for a uniform design, structure, seat placement and wall colour planning across the country. The branch managers in most of the private banks do not sit behind closed doors, infact most of the cases they do not have a door at all. This is deliberately designed to give people a feel that anyone can access the manager without any hesitation. ABN-Amro bank plans each of its branches to have a coffee parlour. Bank Muscat's life manager books the ticket for his client, offers to walk his dog to the nearest lamp-post and, if need be, even delivers grocery for the week from the nearest departmental store. ABN-Amro bank's NOIDA branch offers unlimited Barista coffee from 7.30 pm to 11.00 pm. Customer Involvement in Banking- The bank's aim is to engage customers at the branch. The customer can choose his time and the bank in turn creates the right environment. HSBC, Bandra branch also offers coffee to its customers. The bank wants to be homely and interesting. So, it has started hosting programmes such as Dandia Week, Parsi New Year, Women's Day and Diwali. Recently, it even allowed selling vegetable cakes at the branch. The branch is reaping rich dividends also—getting 700 customers a day. For HSBC, the concept behind offering a little bit extra encompasses the ethic of offering the best service to customers according to their need and at the same time ensuring the comfort of accessibility of its branches as well as ambience that makes banking a pleasure rather than a chore. HSBC, Bandra has tastefully done lounges, a smart art gallery to showcase local talent, a Barista outlet to catch-up a quick cup of coffee and, of course, the impeccable front office standards—all for a lasting satisfaction. Customer Centric Communication in Banks- Surprisingly, in spite of such extra expenses, these branches have been found to achieve break even within a year or two. Even banks have started emphasising on the attribute of customer service in their advertisements: Global Trust Bank's catchline "I may not be their biggest customer. But they make me feel like one"; Andhra Bank's catchline "We are best in service". Syndicate Bank is more candid in realising customer's importance for the business and hence made its punch line "Where delight is the corporate mission". The bank also says in its advertisements, "We have changed our products, processes and technology to serve you better". State Bank of Hyderabad calls itself a friend and uses the punch line "Your friend for life". ICICI Bank has been attempting itself as a friend and has designed its corporate communication as "Hum Hain Na".
The entire focus of all such initiative is to convert a customer from 'customer of branch' to 'customer of bank'. This helps banks in building customer loyalty. The methodology adopted is to serve these customers in whatever manner they feel most comfortable with and provide them personal service.
Hospitality Industry-
Hospitality being a services industry carries most of the features of a service industry. Most of the big players of the industry have been attempting to establish a relationship with the customers, as perishability of services is very high in this industry. The latest American Express study on the lifestyle of the Indian affluent has revealed that increasing consumerism is steering a dramatic change in the lifestyle aspirations thereby forcing product and service providers to understand what is driving consumers' choices and decisions. Lifestyle expectations are growing rapidly along with wealth and thus personalised service is high on the charts for customers of hotels and restaurants. Recent CRM Initiatives- Most of the hotels are running various loyalty schemes throughout the years. Earlier,
business centre. The Beach Front Hotel is the first in Goa to provide the service. Wi-Fi is not restricted to just big players; many three- to four-star hotels are also deploying these services.
Aviation Industry-
Aviation is an important component of the services sector. In the context of aviation as an industry, there are certain service dimension requirements by the customers that affect their level of satisfaction with the services of the airline such as ticket booking, payment mode, baggage deposit and retrieval, in-flight service, food and entertainment, flight timings, ease of cancelling the tickets, price of tickets, along with many others. Indian Aviation Industry and Competition: Indian sky has been witnessing severe competition at the marketplace in the recent years. Because of the change of the Indian economic scenario, this was coupled by emergence of a new segment ready to pay extra for superior service. Some of the companies started capitalising on this opportunity and hence complicated the market dynamics. This led to make customer service the key for survival and growth in the industry. Customer Service Initiatives- To provide satisfaction and delight by the service firms, a trade off is required between what customer desires and what company can offer keeping its business interest and objectives alive. Service parameters are so strict in the airline industry that a flight delay or in-flight food can also take the customer away from the company. There are various initiatives taken by the service companies to attract the customers. Now, every airline company has its own websites which offers all the information about the airline and its offer. This also provides opportunities to the customers to book their tickets online so that they do not need to roam around the ticketing agents. This has also helped the airline companies in many ways. First, this deintermediation eliminated a step for customer interaction which could have probably led to customer dissatisfaction and the second, the companies could reduce cost by not requiring to print the tickets and passing the agent commission on to customers by subsequently reducing the price of the ticket. Customer Loyalty Programmes by Aviation Players- Every airline today has a loyalty programme designed to entice the passengers to prefer its flights to that of competitors and reward them for doing so. "Jet Privilege", Jet Airways' loyalty programme operates at five levels—Jet Blue, Jet Blue Plus, JP Silver, JP
Gold and JP Platinum. JP Gold and JP Platinum provide guaranteed reservations up to 24 hours prior to flight departure, besides facilitating 48 hours tele-check-in. JP Platinum members do not have to bear any cost while cancelling any flight. The airline operates Club Premiere at seven airport lounges, access to which is restricted to members of JP silver, JP Gold and JP Platinum. Its air miles are valid up to three years. Air India operates a joint frequent-flyer programme with Indian Airlines, called Flying Returns. As an additional benefit to members of its loyalty programme Frequent Flyers, Air India allows transfer of free tickets earned through accumulation of air miles to others. Some of the other common benefits across such loyalty programmes are— priority when on the waiting list for a flight; additional baggage allowance; redemption of air miles for upgrading class of travel; discounts when availing services of partners such as hotels, car rentals, shopping centres of airlines and priority confirmation.
Retail Industry
Retailing is the last interaction point between the Company’s product and the consumer. It is characterized by most of the service market characteristics. One very important characteristic is very high degree of involvement of the consumer in the entire process. It is worth mentioning that like most other businesses, the very existence of the establishment is till the customers visit the store. It is also of great significance that these visits should be on a consistent basis. Hence, RETAILING by definition is meant as “Re-tailing” to the customers so that they comeback. Retailing consists of all activities involved in selling goods and services to consumers for their personal, family, or household use. It covers sales of goods ranging from automobiles to apparel and food products, and services ranging from hair cutting to air travel and computer education. Sales of goods to intermediaries who resell to retailers or sales to manufacturers are not considered a retail activity. Customer Service Initiatives- In this situation, well carved-out marketing design has become a must. But mere marketing would not suffice. This marketing essentially should have customer-centric approach and a specifically designed Customer Relationship Management is need of the hour which many of these retailers have started practising. But in India, since the retailing industry is yet to take its final shape here, companies do not have a very comprehensive CRM programme. Most of these are still restricted to a few loyalty programmes, which ultimately are intended to offer a little greater discount at greater purchases.
attention on the function that a product serves, not the attributes it possesses. So for making the organization effective a firm may adopt some E-gain solutions which may be useful for the organization: CUSTOMER SERVICE IS KEY TO SALES AND LOYALTY INCREASING PRODUCT AND SERVICE COMPLEXITY THE OPPORTUNITY FOR SELF-SERVICE CUSTOMER SERVICE BECOMES THE DIFFERENTIATOR REGULATORY REFORMS IN INDIA: EFFECTIVENESS, EFFICIENCY, AND IMPACTS
