A Project Report On

CUSTOMER RELATIONSHIP MANAGEMENT

Project Report Submitted in partial fulfillment of the requirements for the award of the INTERNATIONAL MBA IN MARKETING By ANAND JOSHI UBI/MBA/I/JUL11/7718

Under the guidance of MR. YOGESH PATIL

JARO EDUCATION MUMBAI APRIL 2012

DECLARATION

I, Anand V Joshi hereby declare that this project titled Customer Relationship Management submitted in partial fulfillment of the

requirement for the International MBA in Marketing is my original work and it has not formed the basis for the award of any other degree.

Anand Joshi

Place: Pune Date: 28 April 2012

th

ACKNOWLEDGEMENT

My acknowledgement would be incomplete without expressing our gratitude to Jaro Education and all those who have contributed towards the successful completion of this project. I would like to thank peoples of M/s. Kansai Nerolac Paints Ltd. for giving an opportunity to get exposure in CRM. Special thanks to Mr. Yogesh Patil (Guide). This project would have been incomplete without his guidance and timely assistance. I am also thankful to all my friends who were very helpful throughout the project. I stand apologetic for the error if any.

INDUSTRY PROFILE
The Indian paint industry, estimated to be around Rs. 21,000 Cr industry, has been growing at a rate of above 15% for the past few years. The organized players cater to about 65% of the overall demand, whereas the unorganized players take care of the remaining 35% in value terms.

The industry consists of two segments, namely decorative segment & Industrial segment. In the domestic market, Decorative segment accounts for 70% of the total demand for paints whereas industrial segment accounts for remaining 30%. Growth of the paint industry has been consistent with the growth of Indian GDP. Paint industry growing at a rate of 1.5 to 2 times of Indian GDP.

The top 5 companies make up more than 80% sales of the organized market. Top 5 companies in India market are 1) Asian Paints Ltd. (Rs. 6500 Cr) 2) Kansai Nerolac Paints Ltd.(Rs. 3000 Cr) 3) Berger Paints Ltd. (Rs. 2200 Cr) 4) Akzonobel India Ltd. (1100 Cr) 5) Shalimar Paints (Rs. 500 Cr)

COMPANY PROFILE
Kansai Nerolac Paints Ltd.(KNPL)
Kansai Nerolac Paints Ltd. has been a cherished name in millions of household across the length & breadth of India. It is the second largest coating company in India and the market leader in automotive & powder coating. Kansai Nerolac Paints ltd. is a subsidiary of Japan based Kansai Paint Limited, which is one of the top ten companies in the world. The technological edge of Kansai helps us constantly innovate & come up with products that meet consumer need gaps. Kansai Nerolac has always believed that the key to its business is: i) Technology iii) Innovations ii) Research & Development iv) Quality

Kansai Nerolac Paint Ltd. is number one in automotive sector having strong presence in almost all major automotive industries like Maruti Suzuki, Toyota, Tata Motors, Mahindra, Honda, Bajaj, Volvo etc. They have very strong distribution network in domestic market for decorative segment also KNPL is leader in powder coating. KNPL having 5 manufacturing facilities in 4 regions to cater all India operation with whereas the head office & R & D centre is based at Mumbai. KNPL is the 1st Indian paint company working on SAP.

Need of the study

In todays intensely competitive, rapidly changing & highly complex business environment characterized by diminishing customer loyalty, the need to be market focused & customer centric is more critical than any other time in past. Firms use technology as a key tool to enhance the information flow within their business units, helping their employees better understand the ever changing and increasing need and wants of their customers. It is certain that the internet will continue to change the ways customers and organizations interact with one another in terms of speed and ease. This fact requires that the integration of internet technology into CRM activities occur at all levels throughout the organization. Thus, it would be wrong to say that keeping its customer satisfied is in the best interests of the organizations. The purpose of this study is to bring insight and deeper understanding into the objectives, strategies and the expected benefits of CRM initiatives by the organization.

"Customer Relationship Management"

Introduction:The biggest management challenge in the new millennium of liberalization and globalization for a business is to serve and maintain good relationship with the king the customer. In the past producers took their customers for granted, because at that time the customers were not demanding nor had alternative source of supply or suppliers. But today there is a radical transformation. The changing business environment is characterized by economic liberalization, increasing competition, high consumer choice, demanding customer, more emphasis on quality and value of purchase etc. All these changes have made todays producer shift from traditional marketing to modern marketing. Modern marketing calls for more than developing a product, pricing it, promoting it and making it accessible to target customer. It demands building trust, a binding force and value added relationship with the customers. The process of developing a cooperative and collaborative relationship between the buyer and seller is called customer relationship management shortly called CRM.

CRM (customer relationship management):CRM (customer relationship management) is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way. For example, an enterprise might build a

database about its customers that described relationships in sufficient detail so that management, salespeople, people providing service, and perhaps the customer directly could access information, match customer needs with product plans and offerings, remind customers of service requirements, know what other products a customer had purchased, and so forth. According to one industry view, CRM consists of:

Helping an enterprise to enable its marketing departments to identify and target their best customers, manage marketing campaigns and generate quality leads for the sales team.

Assisting the organization to improve telesales, account, and sales management by optimizing information shared by multiple employees, and streamlining existing processes (for example, taking orders using mobile devices)

Allowing the formation of individualized relationships with customers, with the aim of improving customer satisfaction and maximizing profits; identifying the most profitable customers and providing them the highest level of service.

Providing employees with the information and processes necessary to know their customers understand and identify customer needs and effectively build relationships between the company, its customer base, and distribution partners.

Aims of CRM:The CRM is a new technique in marketing where the marketer tries to develop long term relationship with the customers to develop them as life time customers. CRM aims to make the customer climb up the ladder of loyalty. The company first tries to determine who are likely prospects i.e. the people who have a strong potential interest in the product and ability to pay for it. The company hopes to convert many of its qualified prospect into first time customers and then to convert those first time customers into repeat customers. Then the company tries to convert these repeat customers into clients they are those people who buy only from the company in the relevant product categories. The next challenge for the company is to convert these clients into advocates. Advocates are those clients who praise the company and encourage others to buy from it. The ultimate challenge is to convert these advocates into partners where the customers and the clients work actively together to discover ways of getting mutual benefit. Thus in CRM the key performance figure is not just current market share but share of life time value by converting customers into partners. In CRM the company tries to identify that small percentage (20%) of key account holders whose contribution to the company revenues is high (80%). So from this point of view, CRM is also known as KEY ACCOUNT MANAGEMENT.

Why Customer Relationship Management: A satisfied customer in 10 years will bring 100 more customers to the company. It costs 7 times more to attract a new customer than to serve an old one. 20% of the companys loyal customers account for 80% of its revenues. (Paretos principle). The chances of selling to an existing customer are 1 in 2; the chances of selling to a new customer are 1 in 16.

Benefits of Customer Relationship Management:A Customer Relationship Management system may be chosen because it is thought to provide the following advantages:

Quality and efficiency Decrease in overall costs Decision support

Enterprise ability Customer Attentions Increase profitability Improved planning Improved product development

Customer service:
CRM software provides a business with the ability to create, assign and manage requests made by customers. An example would be Call Center software which helps to direct a customer to the agent who can best help them with their current problem. Recognizing that this type of service is an important factor in attracting and retaining customers, organizations are increasingly turning to technology to help them improve their clients experience while aiming to increase efficiency and minimize costs. CRM software can also be used to identify and reward loyal customers which in turn will help customer retention. Even so, a 2009 study revealed that only 39% of corporate executives believe their employees have the right tools and authority to solve client problems.

Increase in customer retention Customer satisfaction ratings improved Service calls deflected from call center to online forum Reduction in overall customer service costs

Marketing:
CRM systems for marketing help the enterprise identify and target potential clients and generate leads for the sales team. A key marketing capability is tracking and measuring multichannel campaigns, including email, search, social media, telephone and direct mail. Metrics monitored include clicks, responses, leads, deals, and revenue. Alternatively, Prospect Relationship Management (PRM) solutions offer to track customer behavior and nurture them from first contact to sale, often cutting out the active sales process altogether. In a web-focused marketing CRM solution, organizations create and track specific web activities that help develop the client relationship. These activities may include such activities as free downloads, online video content, and online web presentations Product- or company-related postings Positive product comments, reviews Visitors following link from social channel to online stores URL Visitors referred to website from online friend

Sales:Sales Force Automation (SFA): involves using software to streamline all phases of the sales process, minimizing the time that sales representatives need to spend on each phase. This allows a business to use fewer sales representatives to manage their clients. At the core of SFA is a contact management system for tracking and recording every stage in the sales process for each prospective client, from initial contact to final disposition. Many SFA applications also include insights into opportunities, territories, sales forecasts and workflow automation. More sales lead with expressed interest or need Increase in referrals Reduce cost per lead acquired Key social influencers identified and engaged (invited to write a blog, for instance, or otherwise participate in a companys online community) Overall increase in online sales and/or online customers High response rate to coupon or promotion offered on Facebook or other social channel Increased purchasing from social channel visitors vs. regular online visitors

Product development:New ideas for future products or services generated via contests or crowd sourcing, in which online groups brainstorm and then vote on best ideas Responses to online surveys to vote on new product features or upgrades

Horizontal vs. Vertical:Major CRM vendors offer horizontal CRM solutions. In order to tailor a horizontal CRM solution, companies may use industry templates to overlay some generic best practices by industry on top of the horizontal CRM solution. Horizontal CRM vendors may also rely on value added reseller networks of systems integrators to build vertical solutions and sell them as 3rd party add-ons or to come in and customize the solution to fit into a particular scenario. Vertical CRM vendors focus on a particular industry. As a general rule of thumb in CRM, it is ten times more costly to build a vertical solution from a horizontal software program than it is to find a particular vertical solution that is already tailored to your business model and industry.

How to introduce CRM in the company:Four key steps for putting one to one marketing program to work Step 1: Identify your customers:
To launch a one to one initiative the company must be able to locate and contact a fair number of customers or at least a substantial portion of its valuable customers. It is crucial to know the customer details as much as possible, not just their names or address, but their habits, preferences and so forth.

Step 2: Differentiating your customers

Customers are different in two principal ways; they represent different levels of value and have different needs. Once the company identifies its customers differentiating them will help the company to focus its efforts to gain the most advantage with the most valuable customers.

Step 3: Interacting with the customer

Interaction is also a crucial component of a successful CRM initiative. It is important to remember that interaction just not occur through marketing and sales channels, customer interact in many different ways with many different areas of the organization so to foster relationship all the areas of the organization must be accessible to the customer.

Step 4: Customize your enterprises behavior

Ultimately to lock a customer into a relationship a company must adapt some aspect of its behavior to meet customers individually expressed needs this might mean mass

customizing a manufactured product or it might involve tailoring some aspect of the service surrounding the product.

Challenges:Successful development, implementation, use and support of customer relationship management systems can provide a significant advantage to the user, but often there are obstacles that obstruct the user from using the system to its full potential. Instances of a CRM attempting to contain a large, complex group of data can become cumbersome and difficult to understand for ill-trained users. The lack of senior management sponsorship can also hinder the success of a new CRM system. Stakeholders must be identified early in the process and a full commitment is needed from all executives before beginning the conversion. But the challenges faced by the company will last longer for the convenience of their customers. Additionally, an interface that is difficult to navigate or understand can hinder the CRMs effectiveness, causing users to pick and choose which areas of the system to be used, while others may be pushed aside. This fragmented implementation can cause inherent challenges, as only certain parts are used and the system is not fully functional. The increased use of customer relationship management software has also led to an industrywide shift in evaluating the role of the developer in designing and maintaining its software. Companies are urged to consider the overall impact of a viable CRM software suite and the potential for good or bad in its use.

Significance of the study:The CRM (customer relationship management) is an integrated effort to strengthen the network of relationship for the mutual benefit of both the parties. The biggest management challenge in the new millennium of liberalization and globalization for a business is to maintain good relationship with the king the customer. This study is of great significance because

A 5% increase in the customer retention will increase the profit up to 125%. It costs seven times more to attract a new customer than to serve an old one. 20% of the companys loyal customers account for the 80% of its revenues. To study on customer relationship management would enable the researcher to know about the CRM practices adopted in the Paint industry.

Review of the existing literature:With the available literature we can summarize CRM in the words of various authors as followsCustomer Relationship Management marketing can be defined as an integrated effort to identify, maintain and build up a network with the individual customers and to continuously strengthen the network for the mutual benefit of both parties, through interactive, individualized and value added contracts over a long period of time.

Conceptualization:A firm in paint industry has to maintain good relations with its customers. They have to retain the customers for a long time to avail the benefit of their relations. The customer relationship management is one of the effective tools to identify, establish and maintain relationship with the customers.

Objectives of Customer Relationship Management:1. To study the current practices of CRM.

2. 3. 4.

To find out the impact of CRM on the profitability of the organization. To study the factors affecting the CRM practices. To study the role of information technology in CRM.

Research Methodology
A research design is simply a plan for study in collecting and analyzing the data. It helps the researcher to conduct the study in an economical method and relevant to the problem. Research methodology is a systematic way to solve a research problem. The methodology should combine economy with efficiency. Research design

The study conducted here is exploratory cum descriptive.

Scope of the study

The scope of the study is confined to Company. Collection of the data

There are two types of data. Primary data primary data is that data which is collected for the first time. These data are basically observed and collected by the researcher for the first time. I have used primary data for my project work. Secondary data secondary data are those data which are primarily collected by the other person for his own purpose and now we use these for our purpose secondly.

Questionnaire
1. a) b) 2. a) b) 3. a) b) 4. a) b) 5. a) b) 6. a) b) c) 7. a) b) Who are your customers? Dealer Industry Are your customers needs clearly defined? Yes No Do you conduct customer satisfaction surveys? Yes No Do you communicate results of your customer satisfaction surveys regularly Yes No Do you actively seek out customer comments and complaints? Yes No How do you get customer comments and complaints? Face to face . Toll free numbers, formal surveys. Others means How do you get information about the customers? Face to face interviews Surveys.

throughout the company?

c) 8. a) b) 9. a) b)

Any other means. Do you analyze channel effectiveness? In which channel is most effective in Yes No Do you provide credit facility to your customers? Yes No

serving the customer?

10. Do you give concessions to your regular customer? a) b) Yes No

11. Do you take feedback from your customers? a) b) Yes No

12. Do you customize your product or services according to the customer? a) b) Yes No

13. Do you have a concept of internal service? a) b) Yes. No.

14. Do you communicate with your customers frequently? a) b) Yes. No.

15. Do you regularly review the business process to eliminate non value- adding activities and improve customer satisfaction? a) b) Yes No.

16. Is the working environment is conducive to the well-being and morale of all employees? a) b) Yes No.

17. How much is the role of computers in serving the customers? a) b) c) Plays a big role Not much role to play No role to play.

18. Do you have centralized database for customer information? a) b) Yes No such database.

19. Does the staff have access to the customer database? a) b) Yes No

20. Is there commitment from top management to support the customer-focused service concept? a) b) Yes No

21. Is there any improvement in average sale per customer? a) b) Yes No

22. Is there any improvement in customer response rate to the marketing activities? a) b) Yes No

23. Is there any improvement in customer retention and loyalty? a) Yes b) No.

Findings:The customers of COMPANY are industries & Distributors throughout India. The needs of the customers are clearly defined and the products are customized according to the needs of the customers. Customers comments and complaints are welcomed and resolved quickly and positively. Comments and complaints are taken through face to face interviews. The company conducts customer satisfaction surveys. The company provides credit facility to its customers up to 90 days. If the customers pay within 21 days they are given 5% cash discount for distributors. Sales persons of the company maintain frequent and informative communication with the customers. Business process is regularly reviewed to eliminate non value-adding activities. The average sale per customer has increased by 10% and customers response to the marketing activities is also improving. Customer retention is also improving. The factors which have an impact on the CRM are organization culture, support from top management, interpersonal skill of the sales personals and working environment of the company.

Analysis:The customers of the COMPANY are the direct industries & wholesalers. It is because for the decorative segment the number of retailers is very large as compared to the wholesalers. So it is not possible for the company to approach to the retailers. Therefore the company sells to the wholesalers and then wholesalers sell to the retailers. Customers are encouraged to give suggestions and complaints so that the company can improve its working and services. If the customers complaints are not resolved the customers will be dissatisfied and the company may lose its customers. Different customers have different requirements. So the company customizes its product accordingly to satisfy the customers. It also gives more choice to the customers. To get the information about the customers and to measure the satisfaction the company conducts surveys through Business development sales persons. The company gives credit facility to its customers to increase the sales volume. If the company do not sell on credit the customers may switch over to other companies. The company maintains frequent communication with the customers. As soon as the product is ready or a new product is launched the information is provided to the customers. Communication is also necessary to maintain the interest of the customers in the company. The company gives concession to its regular customers so as to retain its most valuable and profitable customers.

The company regularly reviews the business process in order to eliminate non valueadding activities, to reduce the cost and to make the whole work efficient and effective. If the internal customers are not satisfied and there is lack of coordination among the departments then it will affect the external customers also.

Limitations of Customer Relationship Management:1. 2. 3. Time constraint is unavoidable limitation of my study. Financial problem is also there in completing this project in a proper way. Inadequate disclosure of information is also the problem.

Recommendations:

There should be more and more emphasis given by the company for satisfying the customer up to an apex limit and by providing the utility of every penny of his money.

There should be more use of information technology. The company should be flexible to bend its rules and procedures in the clients favour.

The company can communicate and develop stronger customer bonding by providing social and financial benefits.

Conclusion:From this study it can be concluded that the customer relationship management in Company is satisfactory. The company is using various CRM practices like customization of the product, maintaining interaction with the customers regularly and providing good quality product etc. Customer relationship management has a certain impact on the profitability of the company. Average sale per customer has increased 15% over the last two years. Customer response rate towards marketing activities is also improving. There are various factors affecting the customer relationship management like working environment of the company, support from top management and coordination among the departments of the company. Information technology is not used as much as it should be. The company is using traditional tools of CRM like quantitative research, personal interviews. The company should modern tools like data mining, contact center, e-CRM and web based survey tools.

References: Kotler,Philip & Armstrong, Gary, Principles of Marketing 12th edition Ramaswamy, V S & Ramakumari, Marketing Management 3rd edition DeGregor, Dennison(2011), Customer- Transparent Enterprise beyond 20th Century CRM. http://www.google.com Freeman, H (2004), Why Services are so Important, online available; www.serviceindustriestren.org. Rampal M K & Gupta S L, Service Marketing 4th edition.