THE INFLUENCE OF CUSTOMER RELATIONSHIP MANAGEMENT ON THE SALES OF PRODUCTS

THE INFLUENCE OF CUSTOMER RELATIONSHIP MANAGEMENT ON THE SALES OF PRODUCTS

CHAPTER ONE

  INTRODUCTION

1.1  Background to the Study

Research have shown that the service sector must create a decent product for the consumer, keep the pricing reasonable, and communicate with clients in a cordial manner in order to succeed in this dynamic and ever-changing business climate brought on by globalization (Fozia, Shiamwama and Otiso, 2014). This is important since the number of clients affects sales and, consequently, the profitability of the business. This is due to the fact that clients have very high standards for the company’s products, and they must meet those standards. To achieve this, numerous service-related businesses and organizations engage in fierce rivalry with one another in an effort to meet the demands and expectations of their clients.

For this reason, businesses (both foreign and domestic) consistently focus on product quality, brand marketing, and providing excellent customer service in an effort to stick in customers’ minds and establish their goods in a legitimate position amid a crowded market. Despite the fierce rivalry among numerous companies described above, many businesses have had to spend a significant amount of money on advertising and marketing, which is bad for their level of profit.

In order to expand their sales patronage, many profit-oriented businesses are searching for innovative ways to win potential customers’ brand loyalty for their products. In order to achieve this, Customer Relationship Management (CRM) has been recognized as an efficient tactic to sustain both potential customers and new customers. According to the notion of customer relationship management (CRM), a business must grow its customer base in order to optimize profit. To accomplish this, the business must establish a rapport with each of its valued clients and make sure that it has learned specific information about each of them (Kotler, 2003). Customer relationship management (CRM) also assumes that customers’ requirements must be recognized, met, and that behavior must be influenced in an effort to control them through effective communication (George, Emmanuel, Christiana, & Rachel, 2011). According to Kishore (2009), CRM has two distinct and crucial tactics.

The first strategy is for a company to self-determine the cost and develop a long-term customer relationship; the second is to maintain this relationship using the following tactics: accurate data collection and analysis, ensuring recent and up-to-date marketing campaigns, as well as making sure that customers can solve their own problems.

According to Julita (2011), there is little distinction between a consumer and a customer because they are both used interchangeably in the business world, which furthers the confusion. When referring to someone as a customer, you are referring to someone who uses another person’s products and services for their own purposes.

Economics refers to a consumer as either a single person or an entire organization that uses a certain type of service. For instance, someone who is sells a coffee and buys a coffee from a coffee maker; this invariably means that the restaurant buys the said equipment, for the benefit of its patrons or guests. In this situation, the restaurant represents a customer and not the actual consumer. Furthermore, in a resemblance situation, where you directly go to the coffee maker and buy coffee for your family’s use, then you are the real consumer. In simple sentence, any product bought other than for personal use is refers to as a customer. The significance of a customer cannot be underestimated as he/she represents in the office, on phone as well as mail or e-mail. In another dimension, Welsh, (2008) sees customer as a person who is capable of bringing the want of an organisation to their want, and it therefore becomes the primary responsibility of the organisation to handle the customer profitably and the achievement of the organisation and customers.  Service provider or organizations that would meet the need of the targeted customers’ audience through various products and service must stay ahead of the competitive companies and forced to turn their attention to the customers  and value them as  individual customer and the development of personalized relationships. Customers must have knowledge of the products in the market and the company at the same time should adapt their products to the needs and requirement of the customers (Vogt, 2008). From the aforementioned, it is clear that the core of customer relationship management depends on how well a business can handle its potential clients. When a business is first getting started, it is simpler to meet the needs of its customers with fewer employees and fewer customers. Nevertheless, as your customer base grows, you will need to add links to the customer service chain (Khwala, 2016). Customer relationship management is useful in this situation. Customers’ perceptions and attitudes toward a brand have a significant impact on whether it succeeds or fails. For this reason, companies work to develop strong brand equity for their brands through a variety of strategies that also involve providing excellent customer service. Good customer service is only the beginning for businesses; taken steps in harnessing the ‘goodness’ of customer relationship management. Due to the aforementioned, numerous service sectors—including the food industry—were rapidly integrating the CRM to boost their sales. In addition to air and water, food is regarded as the third most important component of life. Food actually ranks as the most essential requirement for survival on Abraham Maslow’s hierarchy of needs. It’s a good idea to get a second opinion if you have any doubts about the accuracy of the information provided (source 30). Because eating food has so many incalculable advantages, food is now produced in a way that is safer, tastier, more varied, practical, and always accessible. To this purpose, the La Trobe University research from 2009 demonstrates that the food system is  one of the biggest sectors as compared to traditional industries. Thus, cultivation, processing, and production of food must be adequately managed by the food industry (Ejaz, Ahmed, & Ahmad, 2013).

However, despite the rising demand for food restaurants, consumers are getting more educated and conscientious, so they weigh the menu’s cost and the quality of the services provided against the food’s nutrition. In this scenario, a small restaurant with minimal funding would find it challenging to aggressively compete with huge corporations in terms of advertising and public relations techniques in order to increase customer spending. Hence, the only way for a small restaurant to see sustainable growth is to change its marketing approach and employ customer relationship management to its fullest potential. Using KFC restaurants in Ikeja City as an example, it will be explained how the usage of good customer service has resulted in increased sales for businesses Mall and the Palms Lekki both in Lagos as reference point.

1.2  Statement of the Problem

It is impossible to overstate the importance of CRM given the rising demand for and patronage of quick service restaurants. The recent decline in store traffic can be attributed to poor customer relationship management. As a result, the company’s sales and profitability decline, which, if properly collapsed out, might jeopardize the company’s sustainability.

In light of this, the purpose of this study is to ascertain whether the KFC food sector has embraced CMR and, if so, what impact it has on the sales of KFC goods.

1.3   Research Objectives

The particular goals are:

To determine the impact of customer relationship management on KFC product sales in Lagos shopping malls.
To determine the manner in which customer relationship management affects KFC product sales in Lagos commercial malls.
To determine the degree to which customer relationship management influences KFC product sales in proportion to other factors.

1.4  Research Questions

The impact of customer relationship management on KFC product sales in Lagos retail malls will be examined using the study questions below.
1. How does customer relationship management affect KFC product sales in Lagos’ retail centers?
2. How do KFC goods perform in Lagos shopping malls in relation to effective customer relationship management practices?
3. How much of an impact, relative to other variables, does customer relationship management have on KFC product sales?

1.5   Significance of the Study

The impact of customer relationship management on the sales of KFC items will be investigated in this study. The diverse relevance of this study will be split into three categories; educational, media enterprise/practitioners and scholarly.

Students will use the proposed study as a reference or a manual to help them comprehend “Customer Relationship Management” and how it relates to sales.
The suggested study will aid KFC management in understanding the importance of strong customer relationships in driving sales of their goods.
To rivals: It will inform them of the significance of CRM in the administration of their firms.
The suggested study will be helpful and act as a roadmap for the future, according to scholarship. The study also creates a window for additional investigation in this area of study.

This study will serve as an eye-opener to the influence that good customer relationship management has on sales on businesses or organizations and various ways of measuring and managing relationships with customer or clients.

1.6  Scope of the Study  

This study will determine whether CRM has a favorable or unfavorable effect on product sales at KFC restaurants.

1.7  Limitations of the Study

There are certain predicted bumps in the road that could limit the validity of this research. The availability of funds and time, the size of the sample, the novelty of the CRM concept, as well as financial restrictions on conducting the study are some of the limits that may be anticipated. Despite the aforementioned difficulties, the researcher made an effort to get members in the focus groups to be truthful in their comments so that the results could be reported impartially.

1.8  Operational Definition of Terms 

The following terminology will be defined in the context in which they are used in this study in order to ensure clarity and prevent ambiguity. Influence: This term simply describes the capacity of persuasion and lobbying to influence someone’s decision and behavior. Customer relationship management (CRM) is, in the researcher’s opinion, the practice of promptly attending to customers’ demands, prioritizing their pleasure, and behaving politely around them. Sales: A sale is simply any transaction between a producer and a client that involves payment.