Literature Review Analysis

Coca-Cola is a non-alcoholic drink that is marketed as a joyful and refreshing drink for all age groups. Coca-Cola Companys mission statement is to refresh the world, inspire moments of optimism and create value (Our Company, 2009). Coca-Colas values include leadership, collaborations, integrity and accountability but Coca-Colas practices have serious implications that contradict its values. Prospect theory gives marketers the chance to use the customers risk-averse behavior to steer their decision toward a profitable choice for the company. Company practices are legal and ethical because the choice was made by the customers who build it on their internal riskaverse behavior (Novemsky & Kahneman, 2005). Coca-Cola Company has more than 400 non-alcoholic beverages that include Coke, with distribution and bottling operations in 200 countries (Holcomb, 2008). Coca-Cola brand strength is supported by its worldwide distribution and availability (Peter & Donnelly, 2006). Coke is the most famous soft drink produced by Coca-Cola Company and is consumed around the world. Coca-Cola Company stated that their products are tested using European standards and did not break any laws in India. However, Coke was found containing pesticides 24 times higher than the European standard by an Indian laboratory, which CocaCola discredit (Burnett & Welford, 2007). The Indian bottling plants consume large quantities of water, which is much needed by the farmers especially during seasonal droughts (Burnett & Welford, 2007).

The principle let the buyer beware is opposite to the relationship marketing principle in which the seller seeks long-lasting relationship with the customer. The relationship is maintained by stating the facts and giving the necessary information to the customer. Relationship marketing takes part of the risk to prevent any risk that the buyer may encounter from the selling and buying experience. The relationship marketing strategies are concerned with the development and enhancement of relationships with a number of key markets (imberov, 2007, p. 207). Marketers should not subscribe to the caveat emptor principal because it makes the relationship between the seller and the buyer

deteriorate. Inks, Avila and Chapman (2004) found that buyers are more ethically sensitive to unethical behavior. Buyers have stronger negative reaction to lying when this lying was from the seller; however, the buyers were less sensitive to their deceit (lying) because they justify it with the resulting low price. Companies seek customers commitment by deferent means; however customer commitment can result from satisfying the customer by offering him or her good product or service in exchange for his or her money. Satisfaction comes from product quality and service quality, which is supported by price fairness (Worrall, Parkes & Cooper, 2004). Polk (2008) state that managers should be accountable for the companys innovations and the change it leads to successfully. Managers should abandon old ideas when they become a threat to the organization but learn that failures are opportunities to learn. Peter Drucker stated that the organizations profit is necessary to supply capital for future innovation and expansion (Drucker, 2004).

Chiung-Ju and Wen-Hung (2008) listed different tactics the retailers use to enhance customer loyalty that branch from financial, social and structural bonding activities. Financial bonding includes discounts and interest rate. Social bonding is the relationship created between the two parties during a business interaction and follow up interactions (Chiung-Ju & Wen-Hung, 2008). The final tactic is structural in which the organization set up rules, policies and procedures to structure its relationship with the customers. Survey of 205 companies reported that more than 50% of surveyed companies are generating 75% of their sale from the existing customers (Carter, 2008). Customer loyalty is important because almost all of the companies had lost a top customer to a competitor in the last three years (Carter, 2008). The surveyed companies measure their customers retention that indicates the companys awareness of the customer retention importance (Carter, 2008). The most important finding of Carter (2008) survey was the strong link between customer retention and customer satisfaction. Companies would benefit of generating 75% of their sale from a satisfied and retained customer. On the contrary, East, Hammond, and Gendall (2006) state that customer retention importance is overvalued and companies should target customer acquisition strategy. Customer retention strategy gains are less than customer acquisition according to East, Hammond, and Gendall (2006).

Palmatier et al. (2009) state that loyal customers will experience strong pressure to reciprocate the benefits they received from others when they receive good service. People take the gratitude role when they receive benefits and suffer the guilt of not repaying the favor to the other party so the at least remain loyal to the favor maker. Roehm and Brady (2007) state that half of the researched customers switched brands because of a service failure or inappropriate response from the. Relationship marketing strengthen the relation with the customers but these customers have higher desire to revenge the brand when their complains are not addressed appropriately (Grgoire, Tripp, & Legoux, 2009). Customer Relationship Management (CRM) main function is to increase the profitable customers retention effectively by building and maintaining positive relationships (Payne & Frow, 2006). One of the main functions of CRM is to provide the organization with a single view of the customer, in which view the information may be split into different disciplines and categories (Tuck, 2008). Payne and Frow (2006) research on implementing a successful CRM resulted in identifying four elements that start with assessing the organizations readiness for a CRM initiative to estimate the effort needed to establish CRM; and help in the next step of managing the change wanted for the organization to adopted and implement CRM project. CRM implementations should be treated as a project and managed as a project that necessitates employees engagement (Payne & Frow, 2006).

Tuck (2008) state that CRM should be managing customer relationship but lately CRM became associated with software packages and the difficulty of setting one up. Tuck (2008) claims that CRM projects shifted the organizational focus to deploying and operating the software package instead of targeting business processes that would deliver the segmented information in a useful way to the organization. Crosby and Caroll III (2008) realized the difficulty in the customer management and suggested the following guidelines to help the organization better manage its customers:

1. Stated customer goal: state customers expectations or what they would like to receive from their relationship with the organization, and match them with the organizations internal goals. 2. Set clear customer strategy to better serve the customer. The organizations can excel in operational excellence like Southwest airline does or product leadership like Apples innovative products or customer intimacy in the way Ritz-Carlton treat their customers. These strategies would help serve and retain the customers. 3. Define customer governance by appointing a chief customer officer with a team and resources to govern the customers needs. 4. Create roadmap for the customers external and internal goals and support them with a strategy that ensures an adequate budget to the communication and motivation plans. The three articles discuss the ease in losing the CRM focus to other unrelated issues like setting up the CRM software package or forcing the CRM program into an organization although it is not ready for the change required for CRM program.