MARLON F. BAITEC
ARDIE V. CABICO
EMILIE O. MAGTALAS
S.Y. 2009-2010
INTRODUCTION
focused and because of this reason there is a need for an organization to establish a
keeping new customers. It has emerged as one of the largest management exhortation. In
this era of fierce competition, both on a local and a global level, it becomes increasingly
that retaining customers is more profitable than crating a new customer. Providing good
service and then finding a way to leverage the good will created by quality service a
company can tie deeply into a consumers mind and develop a strong business/client
relationship. However, technology as an enabler with very low cost has come to the
Objectives
General Problem:
organization?
Specific Problems:
management of an organization?
especially in a supermarket and/or department stores. This study wants to inform the
management of an organization that complaints are one of the most important forms of
Conceptual Paradigm
• Customer Relationship
• Consumer, and
Management Benefits
The data collection method being used in this research is interview method
guided by constructed questionnaire that will answer the main purpose of the research.
The approach that has been undertaken in doing the research is the purposive sampling,
wherein the people interviewed by the researchers are the ones which are presently there
during the conduct of the interview. The people interviewed composed of customers who
purchased in the supermarkets understudy and the managers of the said supermarkets.
The study is bound to know what current practices are of supermarket stores in
San Jose City Nueva Ecija; the importance of customer relation management and the
Locale
Supermarkets in San Jose City, Nueva Ecija constitutes the locale of this
research. These towns are in Nueva Ecija in Central Luzon. The supermarkets that are
involved in the research are the following: NE Bodega Supermarket, the CVC
supermarkets will be the ones in which the researchers will get the information that they
need.
emerged as one of the largest management buzzword. Popularized by the business press
and marketed by the aggressive CRM vendors as a panacea for all the ills facing the firms
and managers, it means different things to different people. CRM, for some, means one to
one marketing while for others a call centre. Some call database marketing as CRM.
There are many others who refer to technology solutions as CRM. If so, what is CRM?
Merchants and traders have been practicing customer relationship for centuries. Their
business was built on trust. They could customize the products and all aspects of delivery
and payment to suit the requirements of their customers. They paid personal attention to
their customers, knew details regarding their customers’ tastes and preferences, and had a
personal rapport with most of them. In many cases, the interaction transcended the
commercial transaction and involved social interactions. Even today, this kind of a
efficient operations to cut costs. Intermediaries like distributors, wholesalers and retailers
customers. This resulted in greater efficiencies and lower costs to manufacturers but
brought in many layers between them and the customers. The resulting gap reduced direct
contacts and had a negative impact on their relationships.
Technological Advancement
marketers come closer to their customers. Firms operating in diverse sectors ranging from
packaged goods to services started using these technologies to know their customers,
learn more about them, and then build stronger bonds with them through frequent
interactions. Marketers could gain knowledge about customers, which helped them
Technology also enabled ordering and product-use related services. Though the
emergence of CRM in recent times coincided with the information age, one must
- Inefficiencies of mass marketing: 1980s and early 1990s witnessed some of the
most radical business transformations that resulted in cost reductions in almost all
were reduced through business process reengineering, human resource costs were
reduced through outsourcing, restructuring and layoffs, financial costs were reduced
through financial reengineering but marketing costs kept increasing due to increased
- Lack of fast, effective and interactive models of customer contact, feedback and
information.
- Lack of consolidated information about customer interactions, purchase
Intensive Competition
In competitive markets, specially the ones that were maturing and witnessing slow
Studies have shown that it costs up to 10-12 times more to attract a new customer than to
retain an existing customer. Marketers have now started focusing on the lifetime value of
customers. They are moving away from just trying to sell their products to understanding,
customers needs and wants and then satisfying their needs. This has led to a relationship
orientation which creates opportunities to cross sell products and services over the
The service sector contributes to over two-third of the GDP of most advanced
economies. In India, the services sector contributes to over 50 per cent of the economy.
One of the characteristics of the service industries is the direct interaction between the
marketer and the buyer. In services, the provider is usually involved in the production as
well as delivery directly. For example, professional service providers like a doctor or
Similarly, the customers are directly involved in production in the purchase and
consumption of these services. These direct contacts create opportunities for better
Therefore it should come as no surprise when you see the service firms pioneering
many of the customer relationship initiatives. Firms operating in the financial services,
hospitality business, telecom, and airlines are the early adopters and extensive users of
CRM practices.
Total quality management programs help companies offer quality products and
services to customers at the lowest prices. To enable this value proposition, organizations
needed to work closely with their customers, intermediaries as well as suppliers thus
fostering close working relationships with members of the marketing system. Companies
such as Intel, Xerox, and Toyota formed partnering relationships with suppliers and
increased fragmentation of markets, and generally high level of product quality forced
sustainable only when it is not easily replicated. One such sustainable competitive
different facets of this concept. Researchers in different countries observed this shift in
for marketers.
In contrast, the initial focus of the North American scholars was on the
relationship between the buyer and seller operating within the context of the
One of the broader approaches to CRM emerged from the research conducted by
academics at the Centre for Relationship Marketing and Service Management at the
total of six key market domains, not just the traditional customer market. It also
advocated for a transition for marketing from a limited functional role to a cross-
functional role and a shift towards marketing activities for customer retention in addition
acquisition.
The six markets are as follows
intermediaries.
analysts.
Customer Relation-Profile
When mapping the quality of a customer relationship, we use the following model
where the head symbolize the competencies we exchange. The Heart symbolizes our
communication and co-operation, and the Legs concern the responsibility and
upon.
of the organizations, in order to improve future relations. Using the Customer Relation
Profile, organization should be able to identify the terms of relationship with others and
the profile will indicate what to focus on if organizations want to develop it further. If
organization wants an "easy to use tool" to realize how organization can maximize
Jose City, the following were the results of the statements of the problem:
Results:
representatives who are in direct contact with customers may translate into loss of
business, regardless of the quality of the goods or services the company has to offer.
Furthermore, customers who encounter this type of treatment are likely to tell others
about their experience, who in turn, will not be very interested in dealing with that
particular company, thereby magnifying the extent of customer loss (actual and
potential).
In sum, the general reason for the customer complaints is the dissatisfaction. The
supermarkets are not able to meet the expectations of their customers. The expectations
of the customers’ lies on the results formulated in the major causes of customer
organization.
Question #2: What are the benefits of the organization in having CRM?
Results:
A customer becomes more profitable with time because the initial acquisition cost
exceeds gross margin while the retention costs are much lower. When an organization
retains the customer, it gets a larger share of the customers’ wallet at a higher profit-one
percent increase in sale to existing customer increase profits than with new customer.
This huge difference is explained by the fact that for most companies the cost of
acquiring the customer is very high. It costs six to eight times more to sell to a new
customer than to sell to an existing one. A company can boost its profit up 85 per cent by
increasing its annual customer retention by only 5 per cent. Thus, the time, the effort and
data. Collection of data related to buying and consumption behavior will be an ongoing
process. In many cases, the transaction data is automatically collected some times real
time as in the e-commerce transaction. This rich repository of customer information and
knowledge updated through regular interactions and actual customer transactions and
purchase behavior will help marketers to develop and market customer centric products
will substantially reduce the wasteful expenditure of mass communication and even
direct mailing. As a customized promotion are more focused and are based on a deeper
The customers do not bother to complain, they just take their business else where.
Most loyal customers take time to complain. This enables the product / service provider
to improve and ensure that such mistake does not recur. Through this, the organization
will improve based on the complaint that has been brought by the loyal customers.
Mostly, the aim of the loyal customers in complaining is to improve the service of the
organization, and not to destroy the image of the company where he/she had bought a
defective product. A typical dissatisfied customer will surely tell many others about
his/her dissatisfaction that he/she had gone through, and he will tell about his satisfaction
in the same company, lesser than the number of people which he/she had told about his
dissatisfaction. As a matter of fact, most customers who complain will do business with a
Question #3: What are the actions being undertaken by the management?
Results:
Based on the results of the survey, the following are the steps that are being undertaken
customer dissatisfaction. Customer should be assured that organization care and that
prompt remedial action will be taken to resolve any reasonable problem. A sound
complaint handling system should include the following essential procedures. There
should be a formal procedure for recording the date a complaint is called for attention,
along with a record of pertinent information. For example, the type of product or service;
description of the problem should be listed. This will allow organization to exercise
provide much information. Nevertheless, to assure we have all the information needed for
a thorough review of the facts involved, by researching in-house records on the customer;
requesting receipts, or other records; inspecting the product, or service performed; and
customer know that the matter is receiving attention. Prompt acknowledgment will set
customer at ease, demonstrate that organization care, and begin the process of preserving
goodwill. Whenever possible, tell customer how long it will take to complete action on
the complaint. If there is further delay, be sure to advice customer why and when
Solution must be consistent with established customer relations policy and should
customer, the cost/benefit of alternative solutions, the probability and cost of customer
seeking redress in some other way, the comprehensiveness and fairness of solution,
ability to perform the solution; and what to do if the customer rejects solution.
The response should be clear and appropriate. The customer must understand the
response, and the response must address the issues raised in the customer's original
complaint. The supermarkets in San Jose City avoid "stock" language and form letters
when an individual response is needed, and refrains from using excessive technical
jargon. An explanation of decision may preserve the goodwill of customer, even if the
Contact customer following response to verify whether or not the matter has been
resolved satisfactorily.
If customer is unhappy with response, supermarkets refer the matter to a third party
If the supermarkets intend to seek the assistance of a third party, they assure to give
the customer a name and telephone number of the person, or office to be contacted.
organization may never satisfy everyone, this contact will provide direct feedback, and
Question #4: How aware the customers regarding the customer relationship management
of an organization?
Results:
Based on the results, not all the customers who answered the questionnaires is
supermarkets. This may mean that the CRM of these supermarkets are ineffective, and
Most of the customers, when they purchased a product in the supermarket, and the
good/s that they had purchased is defective, or they were not able to achieve their
expectations with the products and within the organization as a whole, they do not remind
the supermarket about this issue, and they just shift from one supermarket to another,
The customers are reluctant to inform the organization about their complaints
because they are ashamed to do it. Their thinking is that, the organization may not answer
their complaint, or that the organization may refuse to give what the customer is asking.
Other customers fear rejection that is why customer complaints are being taken for
There are some customers who answered that they informed the supermarkets
about their complaints regarding the service and the products of the supermarkets. When
they inform the supermarket about their complaint, some organization responds promptly
and courteously. The others respond but the issue is not resolved because it had taken a
customers. The supermarkets with high customer relationship have a higher possibility of
customer loyalty. Since the supermarkets are friendly with customers, they create a
higher degree of customer relationship with their customers. Their customers would feel
very important and being taken cared when they enter the store.
CONCLUSION
Based on the results of the study, the researchers found out the following:
The reasons for the customer complaints are divided into three subsections; the
product service causes, accounting causes, and sales practice causes. The product service
and the sales practice causes are the major causes of customer complaints.
Product and service causes are the sources of complaints that include the way in
which the employees treat the customers. The accounting causes include billing errors
and failure to provide timely refunds and adjustments, as promised. Sales practice causes
are the causes which includes all the efforts of the supermarkets in advertising their
products and sales.
The reason for the customer complaints comes from the unmet expectations of the
customers. The attitudes of employees in treating the customers affect greatly the
customer satisfaction. This scenario affects greatly the sales of the company. For
instance, a certain customer might do not want the way a certain employee treats him/her,
this may be a reason why that customer would refuse to buy to that store anymore. This is
serious issue which sources from the employee attitude.
Customer retention would give the supermarket additional profit. It was found out
that the supermarkets incur lesser losses in retaining a customer than in acquiring new
customers.
When the supermarkets were able to gain customer loyalty, the customer
complaints will give them additional ideas on how they will improve their service. A
dissatisfaction, will not tell other customers about the dissatisfaction that he/she had felt.
Instead, he/she will tell the supermarket about the issue, for the issue to be resolved and
to help the supermarket to be improved with the areas that are covered with the
dissatisfaction.
Not all the customers are aware of the customer relationship management that is
being implemented by the supermarkets. When a certain customer has a complaint with
the supermarket, the customer is hesitant to make a complaint with the involved
supermarket with the number of reasons but in general, the reason for the refusal of the
The researchers were able to generate some principles regarding the Customer
Relationship and Complaints. First, the better the CRM, the more the customers. And
second, the higher the involvement of CRM, the higher the customer loyalty.
RECOMMENDATION
The foundation of customer goodwill is the existence, promotion, and practice of
should spell out specifically how, when, where, and who handles complaints or questions.
One person within the company should have ultimate authority and responsibility
for customer relations. In a small firm, it may be the owner, while in a large organization
it may be customer affairs executive. It is important that the person designated be readily
available, and authorized to act on behalf of the company in all customer relations
party dispute resolution mechanism into customer relations policy. Even if organization
follows and carries out a sound customer relations policy, there still will be some
complaints that are difficult to settle, and a few customers whom the company cannot
seem to satisfy.
mechanism on a case-by-case basis. An independent and neutral third party will act as a
the event that an agreement is not reached, organization should be prepared to offer
arbitration. Arbitration is a process where a neutral person listens to both sides and makes
multifaceted domain which ranges from business policies, practices and strategy at the
employees and company representatives who are in direct contact with customers or
clients.
operates, values it espouses, and how it treats its employees. In a company culture that
stresses customer satisfaction, strives for excellence, values its employees, and is able to
instill in them a sense of mission, or of common purpose, all members of the organization
will recognize that their contributions play an important role in the overall success and
at the top management, while the behavior of employees who are in actual contact with
customers may be negatively influenced by a number of factors. Some of the factors are,
2) Unwillingness to go beyond the basic requirements of their jobs and to tap into their
own resourcefulness/Entrepreneurship,
3) Seeming lack of interest in advancing the company's business through their
everyone, from the business owner or manager to the telephone operator or receptionist
or the sales associate, plays an important part in how customers view a company. Rude,
representatives who are in direct contact with customers may translate into loss of
business, regardless of the quality of the goods or services the company has to offer. It
has been estimated that 68% of business losses are because rude behavior of employees.
Furthermore, customers who encounter this type of treatment are likely to tell
others about their experience, who in turn, will not be very interested in dealing with that
particular company, thereby magnifying the extent of customer loss (actual and
potential).
In this era of fierce competition, both on a local and a global level, it becomes
abundance of merchandise available, and there is no shortage of businesses that offer the
same type of goods. It is therefore necessary for companies to try to set themselves apart
from their competitors by offering superb customer service. This can be achieved by
at the reception desk, at the service counter, or in the store, observing customers'
comments and reactions. Anyone associated with a company needs to see him/herself as a
company representative who contributes to the company's image. Of course, everyone
working for a company needs to receive recognition for special efforts, ingenuity, and
No doubt, excellent plans are made at the management level of many companies,
more akin to saying, "We do not really care whether the organization become or remain
our customer or not!" How else could one interpret the message that "Our computer
department is too busy to take order," or "We will let organization know when the item
you wish to purchase is in stock," and never getting back to the customer. Alternatively,
turning away a group of patrons in a restaurant, just because the kitchen will close in ten
minutes?
they deserve. It has been pointed out that customer complaints should be treated as gifts
because they enable a company to take corrective action and to make improvements.
Apparently, customer complaints are relatively rare--customers are inclined to tell their
friends and relations about negative experiences, rather than informing the companies in
question. For that reason, it seems incomprehensible that some large companies tend to
dismiss customer complaints and consider them immaterial (if one goes by the reactions
any of their business practices and interactions with customers needs to be improved.
Corrective actions could take the form of training or retraining staff, establishing a code
of conduct, empowering staff to apply company guidelines less rigidly, where warranted,
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