final dissertation
TRANSCRIPT
“Factors influencing the relationship marketing strategy towards fashion
retailers in UK: A case study of Marks and Spencer”
Name:
A Dissertation submitted for the qualification on Masters of Business Administration
(MBA)
University of Wales Institute, Cardiff (UWIC)
Date of Submission: September 24th 2010
SIGNED STATEMENT
“I declare that this dissertation has not already been accepted in substance for any degree
and is not concurrently submitted in candidature for any degree. It is the result of my own
independent research except where otherwise stated”.
Name:
Signature:
ABSTRACT
In the $40 billion customer relationship management (CRM) and services market, more than
half of all customer relationship programs fail. The problem with relationship marketing is not a
lack of understanding about customer retention benefits, but rather the problem may lie in
misunderstanding and disregarding the nature of relationship development. The aim of this
study is to “map” a customer relationship factors through its developmental stages of M&S.
This research, therefore, focuses on the aspect of relationship marketing between a customer
and M&S, from the customer's point of view. The researcher proposes that customers do not
experience brand relationships completely separately from store relations; nor do customers
experience seller or store relationships completely separately from salesperson relations.
Rather, this study seeks the realistic, holistic experience of stages from the customer's point of
view. This study's objective is to understand how a customer relationship unfolds. It is proposed
that one developmental stage leads to the next in an awareness-exploration-growth-commitment
model. Furthermore, key factors such as emotions, trust, satisfaction, and amount of purchases
may fluctuate according to stage. For this particular study, a detailed literature review was done
on ‘relationship marketing development strategy’ and therefore a deductive approach was used
in this research. Both the quantitative and qualitative approaches were used for this specific
study in order to reach the most comprehensive conclusions. To create the sampling population
100 customers were randomly selected to assist comparison and to avoid any unintentional
tampering of the sampling population. Two CRM managers were also selected from M&S in
order to focus group discussion. The implications of this study are that relationship marketers meet
customers "where they are" in the relationship stages. If relationship marketers match customer
communication in depth and breadth considering the customer's stage and level of trust, relationship
marketers may earn a functional, long-term, committed customer relationship. Recommendations include
not only planning for stages (particularly the exploration stage), but also an inter-disciplinary
consideration of sustainability, well-being, and the application of interpersonal relationship
maxims.
ACKNOWLEDGEMENT
First of all I would like to thank all the faculty of London School of Commerce, London
involved in Masters of Business Administration. In particular I am grateful to my supervisor
(supervisor name) for his endless guidance and incentive give throughout the dissertation.
I would also like to thank all the management/ employees of Marks & Spencer who have given
their time and information to complete the thesis.
Finally, my deepest gratitude goes to my parents, my husband for supporting me throughout.
Table of Contents
Title Page
Declaration
Abstract
Acknowledgement
1.1 Company Overview “Marks and Spencer”……………………………………..
1.2 Theoretical Background…………………………………………………………
1.3 Research Problem………………………………………………………………..
1.4 Research Questions………………………………………………………………
1.5 Research Aim and Objectives…………………………………………………...
1.6 Significance of the Study………………………………………………………..
1.7 Research Framework……………………………………………………………
2.1 Customer Relationship…………………………………………………………..
2.2 Relationship Marketing………………………………………………………….
2.3 Elements of Relationship Marketing Strategy………………………………….
2.3.1 Storing Database……………………………………………………………….
2.3.2 Analysing Purchase behavior…………………………………………………
2.3.3 Enhance buyer-seller transaction…………………………………………….
2.3.4 CRM system………………………………………………………………………..
Chapter 1 Introduction
Chapter 2 Literature Review
2.4 Reasons why firms pursue Relationship Marketing Strategy……………………..
2.4.2 Identify potential customers……………………………………………………
2.4.3 Cost effective marketing channel………………………………………………
2.4.4 2.4.3 Customer Retention……………………………………………………….
2.4.5 Better understanding of customer’s feedback………………………………...
2.4.5 Relationship marketing leads to reference marketing…………………………
2.5 Relationship marketing stages……………………………………………………...
2.5.1 Awareness Leads to Exploration…………………………………………………
2.5.2 Exploration Leads to Growth…………………………………………………….
2.5.3 Growth Leads to Commitment……………………………………………………
2.5.4 Factors Influencing the Long-Term Relationship Marketing Strategy……….
2.5.4.1 Emotion…………………………………………………………………………...
2.5.4.2 Awareness…………………………………………………………………………
2.5.5 Exploration and Individualistic Emotion………………………………………...
2.5.6 Growth Prosocial, and Reptilian Emotion……………………………………….
2.5.7 Commitment, Prosocial, and Reptilian Emotion………………………………..
2.5.8 Growth and Trust………………………………………………………………….
2.5.9 Trust and Commitment…………………………………………………………...
2.5.10 Growth, Satisfaction, and Commitment………………………………………..
2.5.11 Customer Commitment and Purchases…………………………………………
2.6 Conclusion……………………………………………………………………………
Chapter 3 Research Methodology
3.1 Research Approaches…………………………………………………………………
3.1.1 Deductive Approach…………………………………………………………..........
3.1.2 Inductive Approach………………………………………………………………...
3.2. Qualitative Approach………………………………………………………………..
3.3 Quantitative Approach……………………………………………………………….
3.4 Research Strategies……………………………………………………………………
3.4.1 Survey………………………………………………………………………………..
3.4.2 Case Study…………………………………………………………………………...
3.5 Purpose of the Research………………………………………………………………
3.5.1 Exploratory Research……………………………………………………………….
3.5.2 Descriptive Research………………………………………………………………...
3.5.3 Explanatory Research………………………………………………………………
3.6 Data Collection Instrument…………………………………………………………...
3.6.1 Primary Data………………………………………………………………………...
3.6.2 Secondary Data………………………………………………………………………
3.7 Research Sampling……………………………………………………………………..
3.7.1 Research Population………………………………………………………………….
3.7.2 Sampling Frame………………………………………………………………………
3.8 Samples for Research…………………………………………………………………...
3.9 Selecting the Sampling Technique…………………………………………………….
3.9.1 Probability Sampling………………………………………………………………..
3.9.2 Non-Probability Sampling…………………………………………………………...
3.10 Data Collection Methods & Instruments…………………………………………….
3.10.1 Survey………………………………………………………………………………...
3.10.2 Focus group Interview……………………………………………………………….
3.11 Presentation of Data Analysis…………………………………………………………
3.11.1 Reliability and Validity………………………………………………………………
3.12 Limitations of this Research…………………………………………………………...
3.13 Ethical Issues……………………………………………………………………………
4.1 Customer Survey………………………………………………………………………..
4.1.1 Positive Customer Experience……………………………………………………….
4.1.2 Satisfaction with M&S Store…………………………………………………………
4.1.3 Satisfaction with ongoing Relationship………………………………………………..
4.1.4 Satisfaction towards M&S Employees……………………………………………….
4.1.5 Customer Loyalty………………………………………………………………………
4.1.6 Quality of M&S Products……………………………………………………………..
4.1.7 M&S Fashionable……………………………………………………………………...
4.1.8 Expectation of M&S Fashion-wares………………………………………………….
4.1.9 Importance of Relationship with M&S………………………………………………
4.1.10 Awareness…………………………………………………………………………….
4.1.11 Emotional Attachment……………………………………………………………….
4.1.12 Trust with M&S Product…………………………………………………………….
4.2 Focus Group Discussion………………………………………………………………….
Chapter 4 Presentation of Findings
5.1 Justification of the Research Questions…………………………………………………
5.2 Validation of the Research Objectives…………………………………………………..
5.3 Recommendations………………………………………………………………………...
5.3.1 Planning and practicing for stages……………………………………………………
5.3.2 Internal relationship marketing to employees……………………………………….
5.4 Limitation & Future Research………………………………………………………….
5.5 Concluding Thoughts……………………………………………………………………
Figure 1.1……………………………………………………………………………………….
Figure 1.2………………………………………………………………………………………
Figure 2.1………………………………………………………………………………………
Figure 2.2………………………………………………………………………………………
Figure 2.3………………………………………………………………………………………
Figure 2.4………………………………………………………………………………………
Figure 2.5……………………………………………………………………………………...
Figure 2.6……………………………………………………………………………………….
Figure 2.7………………………………………………………………………………………
Figure 2.8……………………………………………………………………………………….
Figure 2.9………………………………………………………………………………………
Figure 3.1………………………………………………………………………………………
Chapter 5 Conclusions & Recommendations
List of Figures
Figure 3.2………………………………………………………………………………………
Figure 3.3………………………………………………………………………………………
Figure 4.1……………………………………………………………………………………….
Figure 4.1……………………………………………………………………………………….
Figure 4.2……………………………………………………………………………………….
Figure 4.3……………………………………………………………………………………….
Figure 4.4……………………………………………………………………………………….
Figure 4.5……………………………………………………………………………………….
Figure 4.6……………………………………………………………………………………….
Figure 4.7………………………………………………………………………………………
Figure 4.8………………………………………………………………………………………
Figure 4.9………………………………………………………………………………………
Figure 4.10……………………………………………………………………...........................
Figure 4.11……………………………………………………………………...........................
Figure 5.1…………………………………………………………………….............................
References…………………………………………………………….......................................
Bibliography...............................................................................................................................
Appendixes………………………………………………………………….............................
Chapter 1: INTRODUCTION
This chapter starts up with the background of the study, its significance and the problem
statement of the proposed topic. It also outlines the aims and objectives of carrying out this
study along with the research questions.
1.1 Company Overview “Marks and Spencer”
Marks and Spencer, more popularly known as M&S created a
name in the 20th century for their policy to sale only British-made
goods. It initially functioned under the name of ‘St Michael’ in
honor of its co-founder and only sold clothes and food. Another
notable policy that this company maintained was that they gave full cash return for any unwanted
merchandise regardless of when it was bought. Although this policy has been refined to 90 days
now, it created an impact among customers. As the information on the website dictate, Marks &
Spencer Group plc is a British retailer with an empire comprising of 843 stores and spreading
over 30 countries around the world. It has proclaimed its place as the largest retailer in the UK
and the 43rd in the world. Although it initially began as a food and clothing retailer and still
maintains that function in most of its domestic branches, it has recently stepped into a more
demanding field of home-wares and furniture (M&S, 2010).
M&S financially boomed in 1998 when it became the first British retailer to coop a pre-tax profit
of over one billion pounds. However right after the blooming year, it plummeted to a financial
crisis and suffered from that initial fall for several years. This turned around again in the last 2 or
3 decades when it began to enjoy significant growth in its financial area. Despite all this, it has
suffered from the world financial crisis like any other company and experienced its share prices
drop to almost 50% its value in less than 6 months.
The origin of this retailer that has emblazoned its name in customers’ minds all over the world is
quite modest. It started as a single market stall in Leeds in 1884 opened by a simple immigrant
from Minsk, Michael Marks. Later in 1894, the business was joined by Thomas Spencer and was
coined ‘Marks and Spencer’. The first stall is marked with a green and gold clock to
commemorate its first operational store. One of the original stores remains open today and is the
smallest functioning Marks and Spencer stores in the entire world (M&S, 2010).
1.2 Theoretical Background
According to Shajahan (2006), the world of business is going through rapid change. Every
business wants to be ahead of the competition by building a strong phase of customers and
achieving a strong competitive position in the market. In order to do this, a firm develops an
attractive strategy for its target audience as well as develops a sense of direction. But the main
aim is to be consistent at this position and retain their customers by knowing them over the years.
Ferrel (2007) as the time passes by in the field of business; firms have realized that they would
be able to reach their financial goals if they develop long term relationships with their customers.
This means that they need to develop a relationship marketing approach rather than just selling
the customer but not necessarily focusing on their needs and wants which is referred to as
transactional marketing approach. In the former approach, a firms needs to understand that if
they sell anything to the customer of certain value, in his eyes the product which he is buying
should have the same value or an increasing one since this could help the firm to retain the
customer and in this way a long term relationship can be developed between the firm and the
buyer. In the future, if the value of the product which the customer brought increases, the
relationship tree between both of them also grows bringing trust and confidence in the firm
which can now fulfill this customer needs more efficiently.
Chaffey & Mayer (2006) For example: Dell computers in the personal computers industry uses
relationship marketing strategy by manufacturing as well as distributing computers to consumers
as per their specific needs thus in the future these customers are retained by Dell just because
they are satisfied with what they have got from the buyer and in this way a trust is formed
between the buyer and the seller.
According to Gummeson (2007), the field of marketing is grappling with a dramatic
transformation, if the key to business truly is personal relationships, the relationship-marketing
paradigm answers marketing's call for change: "On marketing's backburner for so many years,
relationship marketing now sits on the front burner" (Berry, 2005, p. 237).
According to Morgan & Hunt (2004), relationship marketing is the process of establishing,
maintaining, and enhancing relationships with customers and stakeholders for mutual benefit .
Already implied by the definition, this approach is vastly different from its mass marketing
ancestor because of relationship marketing's long-term, customer-oriented view. Relationship
marketing theory may in part be a conceptual descendent of social change in a postindustrial
society. Whereas mass marketing assumes a win-lose economic paradigm, relationship
marketing pledges win-win success.
Instead of bringing as many customers as one can to the products, relationship marketers start
with their customers and bring products suited to them. Marketing becomes less a battle for
market share and more an effort for greater share of the entire customer's business or "share-of-
customer" for life (Peppers & Rogers, 2009, p.18).
Even the important factors in relationship marketing may be very different from the traditional
marketing factors of cost, product function, accessibility, promotions, etc. Earlier research
(Carson, 1998, IABC) uncovered the "top ten" list of important relationship marketing factors by
asking customers, "What is important in order to keep you as a customer?" The ten most
important factors are reported:
Figure 1.1: Top ten list of important relationship marketing factors (Adapted from Carson,
1998)
These results indicate that relationship marketers need to juggle more sophisticated customer
concerns than traditional marketing would suggest. These introductory paragraphs discuss the
issues driving marketing's calamity and ensuing renovation. The issues of overspending and
unaccountability are leading to a shift toward retention and long-term customer relationships. In
addition, this introduction includes the statement of the problem, the purpose, the significance of
the study, and the research question and objectives (Carson, 1998, IABC).
From an economic point of view marketing has overspent and under delivered (Sheth & Sisodia,
2005, p. 9). Sheth and Sisodia assert that marketing is "feeling the heat" from accountability and
productivity problems (p. 9). Fashion retailers are creating a dizzying array of more products, but
with more competitors. Marketers are spending more money on more media channels to reach
fewer customers with poorer results. While US companies now spend nearly $10,000 per year
per family of four on advertising and promotion, a recent study found that television advertising
returned only 32 cents for every dollar invested (Does Marketing Need Reform, 2004). With
over 3,000 marketing messages bombarding customers each day, the reason for poor return on
investment may be information overload (McKenna, 2001, p. 74),
Relationship marketing answers marketing's accountability problem through a focus on the long-
term profitability of keeping customers for life. Still, although a reorientation toward retention
and long-term customer relationships may theoretically diminish traditional marketing problems,
there are many hurdles to be faced when applying relationship marketing. Many companies have
jumped on the relationship marketing bandwagon in hopes of quick profits, only to conclude that
relationships as a sustainable competitive advantage (SCA) is merely an illusion. Relationship
marketing, as implemented to date, has not proven to be a panacea (Fournier et.al, 2008)
Much like teenagers in love, fashion retailers are trying out relationships have acted in a naive
fashion and have rushed through the relationship's natural stages. Fournier et.al (2008, p. 42)
criticize marketers who are "perverting" the relationship marketing concept by not understanding
customer trust and intimacy. The problem with relationship marketing practice is not the lack of
understanding about retention benefits, but rather the misunderstanding about the fundamental
nature of human relationship development. Fournier et al, recommend that marketers "think
about, and act on, what being a partner in a relationship really means" (p. 49). Now is the time to
learn what it means to be a partner in a relationship.
1.3 Research Problem
Relationship marketing efforts and research have not fully considered the developmental nature
of customer relationships. In this discussion of the problem, the researcher demonstrates the
difficulties encountered by neglecting relationship development. The problem to be addressed in
this study is to understand how the stages in a customer relationship progress by considering the
factors in terms of UK fashion retailers.
Price, Arnould, and Tierney (1995, p. 83) claim that companies recognize the importance of
developing good relationships, yet "it is not always clear how to create and sustain good
relationships." Interest and investment in relationships do not automatically produce healthy,
long-term, customer relationships. Fashion retailers are spending on CRM (customer relationship
management) but are failing in the eyes of their customers. Gartner Group and Meta Group have
documented the problem of spending on CRM technology while failing to embrace the true
values behind relationship marketing. According to the Gartner and Meta Groups, 55% to 75%
of all customer relationship projects fail to meet their objectives and through the year 2006, more
than 50% of all CRM projects will be viewed as failures from a customer's point of view
(Johnson, J., 2004).
Marketing researcher Fournier and colleagues' prognosis is ominous: "Corporate performance
will suffer unless relationship marketing becomes what it is supposed to be: the epitome of
customer orientation…..Relationship marketing is powerful in theory but troubled in practice"
(Fournier et.al, 2008, p. 42).
Not only have relationship marketing efforts failed to engage meaningful, developmentally
appropriate relationships, research on relationship marketing has also neglected the
developmental nature of human relationships. The research has not yet focused on the
developmental stages theoretical perspective and the empirical support for this line of inquiry:
"We have less empirical knowledge about the process of relationship development (than
knowledge of success factors)" (Wilson, D., 1995, p. 335). An investigation of the stages in
customer relationships as variables (awareness, exploration, growth, and commitment) may
reveal a process of relationship development. A study of the developmental stages in relationship
marketing is the next logical step for the field.
1.4 Research Questions
What are the steps followed by firms in order to develop relationship marketing
strategy aiming to make it effective?
What are the factors need to be considered in relationship marketing development
strategy?
What are key challenges faced by firms following relationship marketing strategy in
this global Market?
1.5 Research Aim and Objectives
The aim of this study is to “map” a customer relationship factors through its developmental
stages of M&S. This research, therefore, focuses on the aspect of relationship marketing between
a customer and M&S, from the customer's point of view. Although later studies may concentrate
on a particular customer relationship parsed out with the salesperson, with the store, or with the
brand, this study seeks to capture the general customer experience over the course of the buying
process. Therefore, the salesperson, the store, and the brand will all factor in to the customer
experience of the relationship. This study does not explore brand relationships, for example,
parsed from store relations.
The researcher proposes that customers do not experience brand relationships completely
separately from store relations; nor do customers experience seller or store relationships
completely separately from salesperson relations. Rather, this study seeks the realistic, holistic
experience of stages from the customer's point of view. This study's objective is to understand
how a customer relationship unfolds. It is proposed that one developmental stage leads to the
next in an awareness-exploration-growth-commitment model. Furthermore, key factors such as
emotions, trust, satisfaction, and amount of purchases may fluctuate according to stage. Gaining
insight into the customer experience based on stage may help relationship marketers understand
and meet customers' needs, generate satisfaction, and increase the success of customer
relationship programs. In summary the objectives of the study can be described in the following
way:
To explore the long term relationship development stages of M&S
To understand the importance of customer’s habits, taste, fashion and changing trends
towards M&S
To identify the factors need to be considered in order to maintain long term
relationship marketing
To recommend how consumer loyalty plays an important role in trust based marketing
1.6 Significance of the Study
This study is important because it may contribute to improvements in relationships between
fashion retailers and customers. Relationship marketers could use the findings to manage key
success factors at each critical stage in the relationship and incorporate study results into
strategic planning. Finally, the outcome of the study will benefit marketing theory so the field
can build upon prior knowledge: This study contributes a developmental stages perspective to a
relationship marketing context.
1.7 Research Framework
Figure 1.2: Structure of the Study
Chapter 2: LITERATURE REVIEW
Different theories and models are discussed regarding the topic in this particular chapter
including some of the most relevant researches concerning the matter. The researcher
especially concentrated on the relationship marketing development strategy and identifies the
factors of relationship marketing strategy and also examines the relationship between the
factors from different author’s point of view.
2.1 Customer Relationship
The relationship development perspective gives researchers a framework to investigate patterned
relationship changes. Relationship development or evolution has its roots in earlier ideas of
social and Cultural Revolution, biological life-cycles, and attachment theory in child
development. Developmental stages in relationships may be a universal phenomenon, implying
either a shared global human experience or a biologically evolutionary origin.
Several researchers from various backgrounds have discovered patterned, directional stages or
phases in relationships under investigation. This section reviews the development perspective,
from Altman and Taylor (2003), to Duck (2005) and VanLear and Trujillo (2006). An
understanding of developmental stages informs the question of whether customer relationships
move through stages. Researchers Altman and Taylor (2003) proposed the “theory of social
penetration” as an extension of Thibault and Kelley's (1959) social exchange theory. Altman and
Taylor studied many different types of relationship partners; from prison inmates to college
roommates to marital partners in order to understand communication patterns and intimacy
levels. Altman and Taylor uncovered four stages of relationship development during their
examination of communication exchanges and disclosures leading to deeper intimacy. These
stages are called 1) orientation, 2) exploratory affective exchange, 3) affective exchange, and 4)
stable exchange.
Figure 2.1: Relationship development during the examination of communication exchanges
and disclosures leading to deeper intimacy (Adapted from Altman and Taylor, 2003).
The social penetration view theorizes that interpersonal relationships progress systematically.
Communication and disclosures gradually shift from superficial topics to increasingly personal
exchanges. Following Altman and Taylor's work on communication in stages, Scanzoni (2006)
in "Social Exchange and Behavioral Interdependence" also sought to expand Thibault and
Kelley's (1959) social exchange theory and included comparisons at different phases in a
relationship. Scanzoni offered the five phases and five sub processes that Dwyer, Schurr, and Oh
(2007) used in their seminal (relationship-marketing-is-like-a-marriage) article, Scanzoni
proposed the five stages 1) awareness, 2) exploration, 3) expansion, 4) commitment, and 5)
dissolution. The five sub processes in the exploration phase are attraction, communication and
bargaining, development and exercise of power, norm development, and expectation
development.
Figure 2.2: Scanzoni’s five stages relationship development model (Adapted from Scanzoni,
2006)
Startlingly analogous to various interpersonal development progressions are the models from the
small group development perspective. Tubbs (1995), Fisher (1970), and Tuckman (1965) cited in
(Duck, 2005) uncovered progressive stages while studying small group formation and
communication. Tubbs' stages are orientation, conflict, consensus, and closure. Fisher's stages
(orientation, conflict, emergence, and reinforcement) are very similar to Tubbs' findings.
Tuckman's theory posits a forming, storming, norming, performing, and adjourning process.
Figure 2.3: Similar relationship stages model of Tubb, Fisher and Tuckman
Poole (2003), however, added to this small group development perspective by introducing a
three-track, not usually linear, model. While Poole's theory allows for the above-mentioned
developmental stages to unfold, Poole emphasizes that a group's procession is more functional
and unified when the group is satisfied with the three communication tracks: the task track, the
topic track, and the relation track. The task track of communication centers on the process by
which the group accomplishes its goals. The topic track deals with the specific task at hand. The
relation track is characterized by the interpersonal relationships between members. Interestingly,
Poole found that group communication jumps around and back and forth on the three tracks
(indicating non-linear patterns).
Knapp (2008) continued in the relationship development research paradigm and expanded on the
idea that the relationship stages perspective could be applied to many different types of
relationships, including marriage, business partners, and friendships. Knapp also pioneered
research on relationship disintegration. Through his research program, Knapp hypothesized five
coming-together stages (initiation, experimentation, intensifying, integrating, and bonding) and
five coming-apart stages (differentiating, circumscribing, stagnating, avoiding, and terminating)
in his relational stages model.
Figure 2.4: Relational stages model (Adapted from Knapp, 2008)
Whereas Altaian and Taylor (2003), Knapp (2008), and to some extent Scanzoni (2006), seemed
to focus on the categories and qualities in relationship stages, Duck (2005) turned his attention
toward cues and cognitive judgments made throughout relationship development. Humans make
and use judgments as they move through relationship stages. Duck's relationship filtering model
progresses from sociological/incidental cues, to preinteraction cues, interaction cues, and
culminates with cognitive cues. Each cue level acts as a filter to help us achieve the level of
relationship we want with others.
By merging the theoretical perspectives of Duck's (2005) focus on judgments and Altaian and
Taylor's (2003) emphasis on deepening stages, VanLear and Trujillo (2006) tracked acquaintance
relationships over a number of weeks, therefore capturing the relationship experience of stages in
each measurement. VanLear and Trujillo used a repeated measures design to research social
judgments during uncertainty, exploratory affect, interpersonal growth, and interpersonal
stability stages. The variables that were tracked are termed uncertainty, affective reactions, trust,
and social attraction. Many findings were obtained from this five-week investigation; most
notably, the covariate-by-time interactions showed that the relationships between the key
variables changed over time, supporting Duck's hypothesis of developmental stages in
acquainting.
2.2 Relationship Marketing
Kurtz (2009) stated that relationships is the core factor which influences marketing in terms of
consumers and all the other business procedures involved aiming at satisfying the consumer’s
needs. In this globalised market, firms understand the meaning of building relationships because
it is more expensive to get new customers rather than focusing on the loyalty of the existing
ones. Relationship marketing strategy focuses on building and maintaining relationships with
customers, distributors, suppliers, retailers as well as everyone involved in the business
procedures for the sole purpose of gaining benefits over time. Shajahan (2006) stated that this
relationship between the customer and the business firm is categorized in terms of strength, the
time through which it continues and the various other dimensions involved in it. For example:
Mobile phone service firms like O2 knows the customer’s name, his location as well as his date
of birth which serves as a unique identifier are mostly pursuing relationship marketing strategy.
According to Christopher (2008), firms realize that relationship marketing focuses on developing
stronger relationship with existing customers and selling them more products suiting their needs
and expectations instead of making a single sale and then moving to another customer. This
strategy is based on a number of promises like lower prices, better quality, faster delivery and
better customer service as compared to their competitors. Thus, Bateson (2005) states that
relationship marketing is the combination of superior service, enhanced quality and marketing. It
also focuses on retaining the customer, building a long term bond with the customer thus gaining
trust, as well as increasing the level of commitment for that specific customer which helps the
firm to create a good impression on the customer and keeping him longer with the firm. Firms
who were pursuing relationship marketing strategy had an aim to transform new customers into
regular buyers which in turn would help them to boost up their sales and then transform these
same customers in providing strong support for their firms and well as their products.
Gummesson (2009) argued that transactional marketing approach was just a way of gaining
customers by making hard core sales of the products which not necessarily will satisfy the
customer needs whereas the relationship marketing strategy approach helps the firms to satisfy
customer needs as well as make them loyal to the business. Today, firms do not see their profits
first; instead they explore their base of customers, their wants and needs which helps them to sell
more products to their existing customers rather than searching for new ones. Lovelock (1999)
there is a situation where a customer changes from one supplier to another thus the loyalty is also
changed; this scenario is referred to as Defection. Mostly, firms who are involved in relationship
marketing strategy try their best to achieve zero defection which is by serving every customer
and retaining him for long term instead of losing him.
2.3 Elements of Relationship Marketing Strategy
Kurtz (2009) stated that relationship marketing strategy main target is to build relationships with
customers so that they stay with the firm and never change their loyalty. In order to achieve these
long term relationships, firms need to use these four basic elements which not only help them to
achieve customer satisfaction and retention but also guide them as a sense of making the
relationship stronger.
2.3.1 Storing Database
Once a customer buys a product from a firm, they collect the necessary information and store
them in a database. This database helps the firm in the future to differentiate between new and
existing customers with their dynamic buying needs as per their characteristics in their changing
lifestyles.
Figure 2.5: Elements of relationship marketing strategy (Adapted from Kurtz, 2009)
2.3.2 Analysing Purchase behavior
This data is being analysed by the firms to get a clear picture of what the customer preferences
are which in turn are added to modify their mixture of how to market this specific customer in
the future and retain him as per his needs as well as develop new combination of products suited
well according to this customer’s satisfaction.
2.3.3 Enhance buyer-seller transaction
By pursuing this type of marketing, firms can keep an eye on the communication between them
and the customer. They can also check whether the customer is satisfied or not. This not only
helps the firms to satisfy the customer but they can also calculate the cost if they got a new
customer on board and if they follow this strategy on his case, how much profit they will
generate during his term with the firm. This information helps the firm to find ways of increasing
the value in the new buyer seller transaction.
2.3.4 CRM system
Firms use software referred to as customer relationship management software which includes all
the methods of interaction a firm has with the customer during this long term relationship
ranging from sales to service related tasks. Thus, firms use this software to collect information
regarding customers since it has a complete knowledge of the customer profiles in order to be a
unique provider from the rest of the firms in terms of service, quality and marketing. Thus the
relationship between the customer and the firm grows much stronger and all this now is much
easier due to evolving technology.
2.4 Reasons why firms pursue Relationship Marketing Strategy
According to Fournier et.al (2008), relationship marketing strategy is a type of strategy which
doesn’t focus at all on selling in fact it has its main focus on building relationships with trust
between the firms, their customers, distributors, employees, suppliers and everyone who is
involved in the business.
According to Fournier et.al (2008), there are a number of reasons why firms use this strategy:
Figure 2.6: Factors influencing firms Relationship Marketing Strategy (Adapted from
Fournier et.al, 2008)
2.4.1 Identify potential customers
If a firm which the customer is attached to currently tries to sell him something and he gets the
same product offered by a firm at a lower price which he doesn’t know, the result would be
customer would be ready to pay a higher price with the existing firm he knows because of the
trust and a long term strong relationship build during his term with the firm. This holds true in
terms of other objections as well.
2.4.2 Cost effective marketing channel
It doesn’t cost anything for a firm to have a conversation with an existing customer. This is the
cost of relationship marketing strategy. If a firm builds up a strong relationship with the existing
customer then it can get more referral sources too.
2.4.3 Customer Retention
As per many research conducted, it is expensive to get a new customer on board than keeping an
existing customer happy. If a firm keeps an existing customer happy then its opening its gates to
get more referrals from that customer keeping its marketing budget down.
2.4.4 Better understanding of customer’s feedback
A customer’s feedback is the best way of improving the products which the firms are currently
offering. Sometimes the feedback maybe bad but instead of criticizing on it, a firm should
improve on it and offer something unique to customers in order to achieve more.
2.4.5 Relationship marketing leads to reference marketing
If a firm possesses 100 customers then it can achieve more 100 via referrals because every
customer is connected to someone or the other who might also be looking for good firm so if the
existing customer is happy, the firm’s network automatically expands.
2.5 Relationship marketing stages
The researcher hypothesizes that relationship stages are universal for wherever humans
experience relationships: all types and kinds of relationships (whether they are interpersonal,
intrapersonal, in groups, or with a marketer) show some kind of patterned, directional change.
Relationship marketing researchers, Dwyer et.al (2007) Wilson (2005); Jap and Ganesan (2000);
and Fournier et.al (2008), are pioneering research into customer relationship stages.
Dwyer et.al (2007) originated the first relationship development work in marketing. The authors
declare that they are “hard pressed to identify anything more central to marketing (than the
marital metaphor)” (p.25). As evidenced by subsequent articles on the subject, Dwyer et.al's five-
stage model in “Social Exchange and Behavioral Interdependence” is particularly influential.
The authors drew heavily from Scanzoni's (2006) work and applied the relationship development
process to the buyer-seller context in their conceptual model. The stages in their model include
awareness, exploration, expansion, commitment, and dissolution.
From the mid-80's to the present, there has been considerable scholarly research on the general
topic of relationship marketing, particularly on success factors, when to use relationship
marketing, continuums of relationship marketing, outcomes, and use in different contexts.
However, Wilson (2005) was the first marketing researcher following Dwyer et.al (2007) article
to publish work on relationship marketing stages. Wilson noted that relationship marketing
research has uncovered key variables that influence relationship success and that there is a notion
of the relationship development process, yet no model has integrated the "success" models with
the development perspective. Wilson's conceptual article "An Integrated Model of Buyer-Seller
Relationships" proposes that there are five stages in marketing relationship development: partner
selection, defining purpose, setting relationship boundaries, creating relationship value, and
relationship maintenance.
Figure 2.7: Relationship marketing development model (Adapted from Wilson, 2005)
Researchers Jap and Ganesan (2000) and Fournier et.al (2008) are aware of developmental stages
in relationship marketing and are integrating the development perspective into their own
particular research interests. Jap and Ganesan, in their study entitled "Control Mechanisms and
the Relationship Life Cycle," explored the retailer's ability to control the relationship with the
(more powerful) supplier. In this context, the authors study retailer's control mechanisms by
observing commitment in each stage in the relationship life cycle. The stages are exploration,
buildup, maturity, and decline. These stages reflect Scanzoni's (2006) research.
With a research focus on branding, researchers Fournier and colleagues extend knowledge on
brand loyalty and strategic planning in "Contracting for Loyalty" (Fournier et.al 2008). The
authors recommend implementing a timeline of relationship development interventions
throughout these phases: exploration, expansion, commitment, and disengagement. It is proposed
that different implicit and explicit contracts be employed at different phases. The phases/stages
are also based on Scanzoni's (2006) work. Although empirical results on the development of
customer-marketer relationships are scant, Dwyer et.al (2007), Wilson (2005), Jap and Ganesan
(2000), and Fournier et.al (2008) have initiated the theoretical underpinnings for progressive
stages in customer relationships.
After the literature review, researcher identified that most relationship development models
follow a general pattern of awareness, exploration, growth, and commitment, in which these
stages lead partners toward coming together and growing closer. This study uses the following
model understanding of relationship development applied to the customer relationship context.
Figure 2.8: Customer relationship development stages model for this research (Adapted by
researcher)
There is considerable substantiation for developmental stages in human relationships. The
following paragraphs give an overview of the research interests of this study of customer
relationship stages.
2.5.1 Awareness Leads to Exploration
Dwyer et.al (2007) used Scanzoni's (2006) model of relationship development to define the
awareness stage. Awareness means that the customer recognizes the exchange partner. Spatial
proximity plays a role in aiding awareness. One or both of the potential relationship partners may
strive to increase his or her own attractiveness in this stage. However, there is no interaction.
According to Dwyer et.al (2007) interaction is reserved for the exploration stage and the other
later stages. The awareness stage would presumably be rather short before exploration and
interaction would occur. Yet awareness is a critical stage. If the awareness stage does not occur
in a favorable way, the customer will not continue to the exploration stage of relationship
development.
Altman and Taylor's (2003) work supports an awareness exploration link, although the terms
used are orientation and exploratory affective exchange. Scanzoni (2006) provided the terms
awareness and exploration for the first an second phases in a relationship. Small group
researchers (Fisher, 1970; Tubbs, 1995) termed the first two stages of relationships orientation
and conflict. This understanding corroborates the characteristics of this study's conception of
beginning stages. Knapp (2008), Duck (2005), and VanLear and Trujillo (2006) further evidence
the pattern that awareness leads to exploration. These researchers show that interacting, testing,
and emotional reactions stem from initial awareness of the other.
Marketing researchers Anderson and Narus (1990) found evidence for the model
communication-> cooperation -> trust and functional conflict. These findings suggest that initial
communication may lead toward exploring feelings and solving problems. In addition, Williams
(2008) found that customer-oriented salespeople led to the development of customer
relationships. Furthermore, Doherty and Alexander (2004), in a case study of fashion retailers,
observed a recognition - search - evaluation set of stages. Last, trust researchers Boon and
Holmes (2001) propose that three relationship phases (romantic, evaluative, and accommodative)
are prodded by reciprocal disclosures leading to trust. These researchers' work supports the
hypothesis that customer awareness leads to exploration.
2.5.2 Exploration Leads to Growth
In the exploration stage, the customer is concerned with evaluating potential players. This stage
is analogous to casual dating. Customers may try products and services. However, the
relationship is tenuous because termination is easy with minimal investment. This stage has been
termed the experimentation, uncertainty, or conflict stage from the developmental paradigm.
When questions are satisfactorily addressed, relationship concerns are assuaged, and the
relationship may proceed to growth.
According to Knapp's (2008) relationship escalation model, partners in this stage ask questions
seeking to gain information about whether to continue the relationship. Many relationships do
not progress pass this point. Customers judge by their own experiences how trustworthy a
marketer is (Dwyer et.al 2007). Customers in this stage will almost certainly have feelings, likes,
and dislikes about the marketer and potential relationship.
In the exploration stage, partners test each other. Baxter and Wilmot (2004) argue that partners in
the early stages of interpersonal relationships test each other about the state of the relationship,
often trying to reassure themselves of the other's love or concern. Lyndon et.al (2007) explain
that in the exploration stage there is considerable uncertainty and ambiguity between partners.
Partners are unsure not only of the other party's intentions, but also about advancing the
relationship.
Altaian and Taylor (2003) proposed that exploratory affective exchange leads to affective
exchange, indicating a deepening of emotional bonding and trust. Scanzoni (2006) hypothesized
the same link; however, the terms exploration and expansion are used to signify increasing
relationship benefits. VanLear and Trujillo's conception of the second and third stages are
exploratory affect and interpersonal growth, emphasizing an emergent, positive, interpersonal
relationship. In addition, Knapp's (2008) work relates the stage “experimenting” to the
“intensifying” stage, where partners' feelings are positive and strong.
A number of marketing researchers have found related empirical support for the exploration -
growth link. Moorman et.al (2003) found when investigating the use of market research that
integrity, tact, and sincerity result in trust. Similarly, Bitner et.al (2004) found that interaction led
to satisfaction. Doney and Cannon (2007) and Nicholson et.al (2001) discovered that liking
affects trust. These findings lend credence to the hypothesis that there is a relationship between
exploration and growth.
2.5.3 Growth Leads to Commitment
In the growth stage, partners will not find termination of the relationship to be easy; resources
are invested in the relationship. Partners seek more satisfaction from within the relationship
rather than from outside it with other potential partners. Relationship development researchers
have used different terms for the same underlying processes regarding growth and commitment
in interpersonal relationships. Altman and Taylor (2003) call the third and fourth stages of
relationship development affective exchange and stable exchange, respectively. Scanzoni (2006)
terms these phases expansion and commitment. VanLear and Trujillo (2006) understand these
stages as interpersonal growth and interpersonal stability. These labels all suggest that the third
stage is characterized by deepening emotions, trust, and relationship benefits and that the fourth
stage is typified by stability, commitment, and maintenance. Marketing researchers have
examined variables related to growth and commitment stages and have found some precursors to
commitment. Anderson and Weitz (2002) found that relationship investments lead to
commitment. Morgan and Hunt (2004) and Chenet et.al (2000) found significant relationships
between trust and commitment. In addition, Fullerton (2005) found that affective commitment to
the brand was positively related to repurchase intentions as well as to acting as an advocate for
the brand. Last, Hennig-Thurau et.al (2002) showed that successful relationship marketing has
many beneficial outcomes such as satisfaction, commitment, and increases in confidence and
social benefits. This research supports the growth -commitment link.
2.5.4 Factors Influencing the Long-Term Relationship Marketing Strategy
2.5.4.1 Emotion
Bagozzi et.al (1999) writes, “We are only beginning to understand the role of emotions in
marketing” (p.202). According to the 2002 Nobel Prize winner for Economics, Daniel
Kahnemann, the concept of affect heuristics is the most important advancement in understanding
decision-making Kahnemann explains the role of intuitive affect: There is compelling evidence
for the proposition that every stimulus evokes an affective evaluation, which is not always
conscious (Bagozzi, 1992). Most behavior is intuitive, skilled, unproblematic and successful
(Klein, 1998). In some fraction of cases, a need to correct the intuitive judgments and
preferences will be acknowledged, but the intuitive impression will be the anchor for the
judgment. These findings referenced by Kahnemann suggest an important and central role for
emotion in marketing. In light of this emotion research, emotion may be the most overlooked and
undervalued variable in marketing.
Emotion should certainly play a role in customer relationships. Berry (2000) noted that some
Starbucks customers develop strong emotional bonds with the brand. Edell and Burke (1987)
found that automobile shoppers' decisions can be based largely on an emotional response.
Emotion is thought to work in marketing by creating positive ad and brand attitudes (Mitchell &
Olson, 2001). Emotion researcher Buck (2005) describes affect and reason on a continuum (the
A-R continuum), where on one end, affect has total influence over social situations, infants,
simple creatures, and reptilian or “older” brain structures (p. 10). On the other end of the
continuum, reason has increasingly grown to govern situations largely ruled by cognitive
evaluations, adulthood, complex creatures, and "newer" brain structures. However, because
affect is always present, emotion's influence never falls to zero. Emotion or affective
communication is readout of our internal, physiological state. Customers may experience
different emotions at different relationship stages. Buck et.al (2005) found three emotion factors
during development of the CASC (Communication via Syncretic and Analytic Cognition) scale
in response to five television and five magazine advertisements: a prosocial factor (friendly,
proud, confident), an individualistic factor (sad, angry, disgusted), and a reptilian factor
(powerful, sexy, energetic).
Figure 2.9: Emotion factors during development of the CASC scale (Adapted from Buck
et.al, 2005)
Smith and Ellsworth (2005) reflect a locus-of-causality idea in their study of the attribution of
emotion factors and found that anger, disgust, and contempt were other-oriented and shame and
guilt were self-oriented. Buck, however, developed his typology of biologic affects based on a
developmental-interactionist theory of motivation, emotion, and cognition. Emotion factors -
reptilian, individualistic, and prosocial - are based in biology, reflective of certain corresponding
areas of the primary motivation system in the brain.
In Buck et.al (2005) perspective, the emotion factors are more than mere positive or negative
responses. The emotion factors are reflections of primary affects hardwired into the brain
through development over the course of evolution as humans interacted in social groups.
Emotion systems in the brain have evolved, for example, to incorporate the evolutionary benefits
of social bonding. Therefore, the prosocial/reptilian/individualistic set is more descriptive than
simple positive/negative evaluations. Simply put, as humans evolved into social creatures,
prosocial emotions supported the efforts of the group. Reptilian emotions reflect the primal urges
of the "old" brain including the fight or flight response, breathing, heart rate, and mating.
Individualistic emotions developed as a need to adapt to new environments despite group
behavior or need and reflect the individual's own perspective. Humans express these emotions
across myriad contexts. The research on emotion indicates its importance and centrality in
human behavior, including in the customer role.
2.5.4.2 Awareness
It is hypothesized that awareness will be related to prosocial (confident, friendly, proud) and
reptilian (powerful, sexy, energetic) emotion. The awareness stage is characterized by noting
potential candidates for a customer relationship. Customers may be concerned with learning
about the various prospects and may feel anticipation of future benefits. Emotions in this stage
may be centered on an interest in knowing what prospects have to offer and enjoying the
courtship. Izard (2007) believed positive affect is comprised of interest and joy. Perhaps the
heightened state of interest, arousal, and attention in the awareness stage creates positive
feelings. In light of the literature, there may be a link between awareness, prosocial (confident,
friendly, proud) and reptilian (powerful, sexy energetic) emotion.
2.5.5 Exploration and Individualistic Emotion
It is assumed that exploration and individualistic emotion are related. Individualistic emotions
such as disgust, anger, and sadness may play a role in exploration. VanLear and Trujillo (2006)
in their over-time study of acquaintance relationships found that early communication patterns
were categorized by uncertainty, which did decrease over the course of the relationship. The
banter, interaction, and testing so prevalent in the exploration stage of relationships is an attempt
by participants to decrease uncertainty. In marketing, Tan (2003) found that consumers of a new
product in particular seek out pre-purchase information to reduce risk Bagozzi (2002) has created
the perspective that consumers are often goal-directed, with emotion driving and resulting from
the goal~attainment process; emotions directly initiate action. Customers may experience anxiety
or psychological discomfort from anticipated post-purchase regret from purchasing and/or using
the product (Perugini & Bagozzi, 2006). These individualistic emotions (sad, angry, disgusted)
may come into play during exploration.
In the tenuous exploration stage, if a customer is angry, he or she might express negative
emotions fully, without other relationship norms or benefits to balance the negatives. Folkes et.al
(2007) showed how a failure due to the marketer resulted in customer anger. Derbaix and Pham
(2001) found that negative experiences are more intense than other experiences and can be
expressed with greater variety.
Exploration is the stage where customers test and consider the benefits and costs of an exchange
(Holmes, 1991). Uncertainty reduction is the central goal in this stage (Jap, S., 2001). Jap found
that the fragile nature of the exploration stage and the lack of opportunity to know that
salesperson left the customer lacking in trust in this stage. Specifically, Jap found that trust in the
salesperson did not have an effect on satisfaction in the exploration stage. It may be that there
was not enough time to get to know the salesperson.
Nevertheless, managing the interaction appropriately in the exploration phase may improve the
chances for relationship success. Moorman et.al (2003) studied the factors that enhance trust
between market research users and providers and how trust affects interactions between these
partners. The authors' results show important factors for building trust are the integrity of the
researcher, confidentiality, sincerity, tactfulness, timeliness, expertise, and the reduction of
uncertainty. The emotions in the exploration stage may be expressed as uncertainty and possibly
anger if the salesperson does not manage the interactions with integrity. Simpson and Mayo
(2007) called for fewer influence attempts of any kind in marketing, due to their erosive effect on
satisfaction and commitment. This finding supports Hovland, et al's (2003) earlier work on
having an intention to persuade lowering attitude change. It appears that norms render even non-
coercive persuasive attempts pushy and inappropriate. The testing nature of the exploration stage
would indicate that customers' emotions are based on a concern for self in this exchange and that
customers may experience uncertainty, irritation, and power struggles. A customer in the
exploration stage may be primarily concerned with being taken advantage of. It is hypothesized
that there is a relationship between the exploration stage and individualistic emotions (sad,
angry, and disgusted).
2.5.6 Growth Prosocial, and Reptilian Emotion
Westbrook (2007) found a direct, positive relationship between satisfaction and positive affect.
This finding supports the notion that the growth stage, characterized by satisfaction, would be
related to positive emotion.
Marketing satisfaction researcher Oliver (1997) has begun to include emotion in the satisfaction
theoretical models and scales. Oliver theorizes that attractive information from a firm leads to the
"affective" (emotional) stage of loyalty. Although marketing has learned more about evaluations
than affect, emotion is beginning to receive more attention in marketing research. In support of a
relationship between growth and prosocial emotion, Price, Arnould, and Tierney (2005) found
evidence for the model: service performance -> affect -> satisfaction. These feelings in the
growth stage would enable partners to better work together (prosocial emotion) and enjoy the
benefits (reptilian emotion) of being a team.
2.5.7 Commitment, Prosocial, and Reptilian Emotion
Fournier et.al (2008) finds that consumers feel as if they are in a relationship with their brand.
Stout and Leckenby (2003) found that purchase intentions increase when related to emotions.
Continuing to purchase and intending to remain a customer characterize the commitment stage.
These purchase intentions may further contribute to warm emotions. The commitment stage is
akin to the stable exchange stage of Altman and Taylor (2003), where an implicit or explicit
pledge to continue the relationship is affirmed. Weitz and Jap (2001) found that commonality of
purpose, mutual learning processes, multiple levels of personal and emotional relationships, and
psychological contracts instead of formal legal ones are all clearly evident in the commitment
phase. Commitment has been defined as the desire to maintain the relationship indefinitely and
committed partners are willing to "work on" maintaining the relationship (Morgan & Hunt, 1994,
p. 23).
There is some evidence for a relationship between commitment and prosocial emotion. Rusbult
and Buunk (1993) found a relationship between commitment and prosocial behavior. Later, et.al
(1999) found a commitment - prorelationship behavior link. In the commitment stage, partners
are concerned with maintaining their relationship. Partners may also continue enjoying the power
of the team.
2.5.8 Growth and Trust
It is hypothesized that growth is related to trust. During the growth stage, sharing and giving
characterize the relationship. The benefits are mutually enjoyed. Trust is defined as the customer
feels trust for the salesperson, that he or she will be honest and reliable (Moorman et.al, 2003).
Trust is based on repeated, reliable interactions (Altaian and Taylor, 2003) and following
through on expected behaviors. Jap (2001) found that trust in the salesperson does have an
impact on satisfaction in the growth stage. In addition, Oliver (2007) found a direct link between
emotion and satisfaction. Therefore, growth may be associated with trust in this study.
2.5.9 Trust and Commitment
It is hypothesized that there is a positive relationship between trust and commitment. This
assertion is supported by relationship marketing literature (Morgan & Hunt, 2004). Trust has also
been related to the formation of relational norms and collaboration (Smith & Barclay, 2007).
The commitment stage, marked by its pledge to continue the relationship, has been seen as the
long-term orientation where "points" do not need to be "scored" so often in the relationship
(Mills & Clark, 1992). Partners give to the relationship and expect these investments to "even
out" over the course of the relationship. Jap (2001) found that trust in the salesperson did have an
effect on satisfaction in this stage. Due to the empirical evidence cited in the literature, this study
may find a relationship between trust and commitment.
2.5.10 Growth, Satisfaction, and Commitment
It is hypothesized that growth and satisfaction are related, as well as satisfaction and
commitment. Satisfaction is one of the key words used when defining the growth stage (Jap &
Ganesan, 2000). Andaleeb (2006) studied how trust and dependence affected satisfaction and
commitment. When dependence on a partner is high, the customer values the relationship more
and commitment increases. In addition, when there is trust in the relationship, the dependence on
a partner is a more comfortable situation. In a dissertation study of dentist-patient relationships,
Menelly (1996) found that provider trust and composure led to patient satisfaction. Smith and
Barclay (2007) found a significant relationship between trust and satisfaction. Similarly, Seines
(1998) discovered that commitment leads to trust and satisfaction in buyer-seller relationships.
Satisfied, committed partnerships may have unforeseen benefits. Interestingly, satisfied
customers are not only less likely terminate a relationship, they are also less likely to file
lawsuits (Hunt & Nevin, 1994). Given the research findings, it is hypothesized that growth yields
satisfaction, which relates to increases in commitment.
2.5.11 Customer Commitment and Purchases
There is research to support the hypothesis that there is a relationship between commitment and
purchases. Mohr and Spekman (1994) found relationships between interdependence, trust,
conflict resolution, and information sharing and sales and satisfaction. Relationship marketing
researchers have begun to find empirical evidence for satisfaction and loyalty leading to
profitability (Hallowell, 2009). Oliver's (2007) summary of empirical works depicts the loyalty
model: quality -> satisfaction -> loyalty -> profit, citing research to show satisfaction and
customer commitment can lead to an increase in purchases. Olsen (2002) found that satisfaction
mediated the relationship between quality and repurchase across four different product lines.
In addition, Anderson et.al (1994) found a positive relationship between satisfaction and profits.
Hewett et.al (2002) examined close, industrial, buyer-seller relationships and found that trust and
commitment influence repurchases intentions. Wang's model (2002) of brand commitment was
upheld across three product categories, where satisfaction and trust led to brand commitment,
which led to purchase intention. Further support for the commitment - purchase link is obtained
from Shemwell et.al (1994) study of physicians, mechanics, and hairstylists. The authors discuss
two interesting results: the higher the trust and commitment, the greater the relationship
continuance and females seek more trust and commitment than males in these service
relationships.
The research does support a link between commitment and purchases/profit. Ford Motor
Company offers an example of just how much commitment matters: A one percent increase in
customer retention is estimated to be worth over one hundred million dollars in profit
(Sambandam & Lord, 1995). Ford's loyalty-profit link is not unique, however. A study
conducted by Bain & Company for Fortune magazine (Sellers, 1993) calculated what the
percentage increases in customer lifetime profits would be for eight different industries if there
were a five percent increase in customer retention. The average percentage increase in profits is
seventy-three percent (Oliver, 2007, p. 405). Considering the evidence cited in the literature, this
study investigates the relationship between commitment and purchases.
2.6 Conclusion
This review of the literature relevant to this study of customer relationship stages has been
addressed in different sections, directly akin to the research question: the question of whether
customer relationships move through developmental stages, the relationship between awareness
and exploration, the relationship between exploration and growth, the relationship between
growth and commitment, the relationships between awareness, prosocial, and reptilian emotion,
the relationship between exploration and individualistic emotion, the relationships between
growth, prosocial, and reptilian emotion, the relationships between commitment, prosocial, and
reptilian emotion, the relationship between growth and trust, the relationship between trust and
commitment, the relationships between growth, satisfaction, and commitment, and the
relationship between commitment and purchases
Chapter 3: METHODOLOGY
The intention of this chapter is to provide a comprehensive overview of the research, covering
on research method and the specific problems addressed by the research questions and the
study itself. It assists in understanding the objectives of the research and its presence in
comparison to existing market research.
3.1 Research Approaches
As Bryman and Bell (2007) pointed out, research can be largely subdivided into two main
streams, theoretical approach and methodological approach. There are further divisions of these
two classifications. In accordance to Smart (2008), theoretical research approach can be either
deductive or inductive, whereas methodological approach can be either qualitative or
quantitative.
3.1.1 Deductive Approach
Deductive approach is defined as the conclusion a researcher can draw from an informed
assumption based on some hypotheses. Bradley (2007) highlighted that the accuracy of such
research is solely dependent on the precision of the referred theories and prepositions. Therefore,
it is imperative that data collected is accurate and the models that are used in the references are
also included and considered in the study (Curwin and Slater, 2008). This is because the
propositions that might be used are themselves based on several other assumptions and all these
need to be considered for the research to be viable.
3.1.2 Inductive Approach
Inductive method refers to the study of the original hypotheses supporting a theory that has
already been tested where the weight of the theory itself is re-measured. Since the theory that is
being studied has already been declared, the researcher can enjoy an increased amount of
freedom and flexibility in working on the study. Ferraro (2007) pointed out that often hypotheses
and theories depend on research observations.
For this particular study, a detailed literature review was done on ‘relationship marketing
development strategy’ and therefore a deductive approach was used in this research. This
is the region from which the primary hypotheses were construed from. Inductive approach
was not chosen because it is very time consuming and time constraint is a limitation for this
dissertation.
3.2. Qualitative Approach
Qualitative approach, by its definition, is research that deals with data that is not numeric in
nature. The data collected and analyzed is descriptive in nature and cannot be represented by
numbers. This approach is often selected when the researcher is looking to analyze the ways in
which humans interact in or interpret the world around them. Understandably, qualitative
approach is less structured than quantitative approach and as Salzmann (2008) pointed out, it is
open to interpretation and is allowed to generate as many hypotheses and propositions on the
matter as possible.
3.3 Quantitative Approach
Quantitative approach involves analysis and representation of numeric data. As can be predicted,
the researcher needs to construct the study beforehand prior to data collection in order to
properly dictate the structure of the research. The approach encompasses collecting the data,
organizing the variables according to the research requirements and then explaining the relations
using statistical models. Dubrin (2008) believed that the most commonly used method of data
collection is this approach is through questionnaires and equipments.
Both the quantitative and qualitative approaches were used for this specific study in order
to reach the most comprehensive conclusions.
Figure: 3.1 Types of Research Strategies Source: Adapted from Saunders et al, 2007
3.4 Research Strategies
Research strategies are selected in accordance to the control over actual events, the nature of the
research questions and the focal point of contemporary and historical phenomena (Saunders et al
2007). Based on this, for this specific research, survey and case study were selected as the
research strategies on the basis of appropriateness and the scope to analyze data more accurately.
3.4.1 Survey
Researchers are known to use surveys the most in their research, especially if the research is on
business and managerial work. If the approach taken is descriptive and exploratory, surveys are
chosen to collect the data for the research. It also works well with deductive method and can be
used in this approach. If the research requirements include, who, what, how many and how
much, the researcher can use surveys as the collection method since it is the most comprehensive
in collecting data in accordance to the needed variables. As Housden (2007) points out,
questionnaires can be used to collect data quite conveniently and within budget restrains from a
relative large population and this is the biggest advantage of surveys.
This strategy was used to gather relevant data for this study regarding fashion retailers
emphasizing on the relationship marketing strategy in UK and the factors that influence it.
3.4.2 Case Study
A case study is done on a specific real-life phenomenon that has been updated in recent time and
has numerous sources of evidence and an empirical investigation is done to analyze the event in
accordance to the research requirements of the study of the researcher (Salzmann, 2008).
This research was a holistic investigation of the relevance of relationship marketing
strategy among the fashion retailers in UK and the factors that influence it were analyzed.
The company in focus was M&S. Case study was used to analyze the existing research done
on M&S and its relationship marketing strategies.
3.5 Purpose of the Research
Depending on the research questions and the direction in which the research is headed, there can
be more than one purpose of a case study (Malhotra, 2009). This research in particular is
descriptive, exploratory and explanatory.
3.5.1 Exploratory Research
This strategy involves locating a specific problem and analyzing the hypotheses that need to be
tested to be considered viable. The focal aim of this research is to comprehend and analyze an
identifiable event without comparison to other similar events. This type of research often helps to
locate the problem and analyze the data to draw conclusive solutions (Sumner and Tribe, 2008).
3.5.2 Descriptive Research
The fundamental factors or characteristics of a particular population are needed to be analyzed
and categorized for this research and that is done through descriptive approach. This approach
can encompass what, where, when and who requirements of the research and help the researcher
in constructing a comprehensive analysis of a specific situation or a particular population. As
Coldwell and Herbst (2004) pointed out, uncertainties and complexities need to be avoided when
dealing with these types of analysis and to do so the data collected need to be thoroughly
analyzed and there must not be any discrepancy within the understanding of the data by the
researcher.
3.5.3 Explanatory Research
In this type of research the focal agenda is to comprehend a given problem and analyze the
influence of all the variables at play and in particular the changes that occur in the variables in
accordance to a specific varying factor. According to Sumner and Tribe (2008), the relationships
between distinct variables can also be analyzed.
In this research, the varying factors that were focused on were customer’s habits, taste, and
fashion and changing trends towards M&S. Hence, in this regard, the research is
explanatory. Au contraire, the research takes a turn to exploratory as it also attempts to
differentiate the factors that influence long term relationship marketing.
3.6 Data Collection Instrument
3.6.1 Primary Data
The data collected by the researcher for the sole purpose of using it in this particular research
without any prior record of such use, is labelled as primary data. This data is imperative for
comparative analysis and also ameliorates the analysis of the relations in accordance to research
requirements. It also assists the researcher in testifying the hypotheses he/she may construct to
answer research questions. Interviews, observation, surveys, questionnaires, etc can be used to
collect primary data (Cooper and Schindler 2003).
Questionnaires and focus group interviews were used as tools to collect primary data as
discussed below in detail in the data collection section.
3.6.2 Secondary Data
Secondary data refers to the data that was collected for another purpose in another study and is
referenced in a study again. It may also include data based on other people’s experiences. This
type of data already exists and hence the researcher does not need to collect it using collecting
tools. This type of data is useful as they help to comprehend the problem better and to understand
the underlying complexities of a study without having to go back to primary tools of data
collection (Cooper et al, 2003). Sources of such data include books, journals, reviews,
newspapers, reports, magazines, articles, etc.
The secondary data used in this study have been sourced from numerous facets including
books from different libraries, internet sites, journals and articles, newspapers and
business magazines.
3.7 Research Sampling
3.7.1 Research Population
According to Bryman and Bell (2007), population is defined as a group of elements or in most
cases people on whom the data collecting tools are employed to draw informed conclusions.
Regular customers of the fashion products of M&S acted as the population set for this
study.
3.7.2 Sampling Frame
Monette et al (2005) defined sampling frame as the catalogue of all the elements of the total
population. This cataloguing is useful for the researchers as they can easily trace the elements in
the population and record their behaviour. An updated list of all the regular customers of
M&S created the basis of the sampling frame for this study.
3.8 Samples for Research
Due to the time constraint, it was not possible to include all the regular customers of all the M&S
branches of London in the sampling population. Therefore, the researcher had to employ
judgemental sampling and select only the centre London branch of M&S and consider the
regular customers to only this branch as the sampling frame. This considerably reduced the
accuracy of the sampling as it did not include the entire population which may result in skewing
of the data.
On the other hand, to improve accuracy and viability, stratified sampling was employed to ensure
that equal number of customers from each required area was included in the sample from the
branch. To create the sampling population 100 customers were randomly selected to assist
comparison and to avoid any unintentional tampering of the sampling population. Two CRM
managers were also selected to construct another sample randomly from a list of managers. The
sample size is shown in Figure 3.2.
Figure 3.2: Sample size
3.9 Selecting the Sampling Technique
There are two broad subdivision of sampling techniques: probability and non-probability
sampling. The choice of the sampling technique is entirely upon the researcher and depends on
the nature of the study, its objectives and the time and budget available (Curwin and Slater,
2008).
3.9.1 Probability Sampling
Probability sampling defers from non-probability sampling in that that the probability of an
element being chosen is known beforehand. This is often utilized in researches that include
surveys, where the elements being tested are identified before the data collection begins.
Housden (2007) highlighted some probability sampling techniques, such as simple random
sampling, systematic sampling, and stratified sampling to name a few.
3.9.2 Non-Probability Sampling
In case of non-probability sampling, every element has an equal chance of being selected. Hence
the characteristics of the population do not depend of the ingredients that ultimately get selected.
Bryman and Bell (2007) underlined some techniques of non-probability sampling: quota
sampling, purposive sampling, snowball sampling and convenience sampling.
3.10 Data Collection Methods & Instruments
There were two data collection methods utilized in this study to collect two different types of
data. Surveys were used to collect quantitative data while focus group interviews were used to
gather qualitative data.
Figure 3.3 Data Collection Instruments (Adapted from Mertens, 2009)
3.10.1 Survey
The study encompassed two separate surveys based on the subject matter and in relevance to the
requirements of the study. The first survey was conducted on the M&S 100 customers and was
done on a personal level with the researchers. The second phase of the survey was done on the
managers but this was done via electronic mail. The perceptions and personal opinion on the
subject matter was what was being focused on in the surveys and these quantitative data helped
the researcher to comprehend the subject matter and the problem at hand better.
The managers were contacted prior to sending the questionnaires to estimate their willingness in
participating in the survey. Although the managers initially showed enthusiasm, the researcher
had to constantly remind them of the questionnaires to be filled before a conclusive response was
received.
The questionnaires themselves were constructed on the basis of previous research findings, the
research questions and objectives of this study. The blank questionnaires are included in
Appendix
3.10.2 Focus group Interview
Focus group interviews attempt at digging deep into the subject matter and creates an
opportunity for the researcher to analyze underlying factors that may not surface through
numerical analysis. The data collected using such tools is later used to further analyze the impact
created and comprehend the extent to which the objectives of the study are met.
3.11 Presentation of Data Analysis
3.11.1 Reliability and Validity
According to Cooper and Schindler (2003), a measure is reliable only if it maintains the degree
of consistency at a constant level. Mitchell (1985) has construed that this can only be achieved
through a large sample (in this case 100) and a viable structure of the questions. Mitchell (1985)
defined validity as the aptitude of a measuring instrument that can carefully measure anything in
the test that is proposed to be scaled, starting from the ability, skilfulness, and quality.
3.12 Limitations of this Research
The sample size was small for both managers and customers which might lead to skewed
results
Time constraint was a major limitation.
The concentration on the centre London brand was another limitation of the sample.
3.13 Ethical Issues
Certain ethical issues needed to be addressed during this study. Confidentiality has become a
major issue in recent years and was maintained strictly. Names were filtered to enhance
confidentiality. To allow information sharing, permission was taken from the authority.
Certain issues of confidentiality are highlight below:
Possible deception and consent by the participants
Privacy of the actual and possible respondents
Possible reactions of the participants
Objectivity and behavioural pattern of the researcher (Saunders et al, 2007)
Chapter 4: DATA ANALYSIS & FINDINGS
This chapter discusses and analyses the market information and survey for the sake of the research. It
also shows the data those have been gathered through survey of 100 customers of M&S in the Part I,
focus group discussion with 2 CRM managers in the Part II and analyse the data to provide a fruitful
meaning of the research finding.
Questionnaire Survey (PART I)
4.1 Customer Survey
4.1.1 Positive Customer Experience
Figure 4.1: Positive Customer Experience
The first question of the survey asked the respondents about their customer experience with
Marks & Spencer. As the above graph indicates, majority of the respondents claimed that their
customer experience with M&S is positive. This is a very significant issue in terms of customer
relationship point of view as good customer experience leads to an increase in customer loyalty
which will influence the customers in repeated buying behavior that produces productivity
The result also supported by the literature as Kurtz (2009) stated that relationships is the core
factor which influences marketing in terms of consumers and all the other business procedures
involved aiming at satisfying the consumer’s needs. In this globalised market, firms understand
the meaning of building relationships because it is more expensive to get new customers rather
than focusing on the loyalty of the existing ones.
4.1.2 Satisfaction with M&S Store
Figure 4.2: Satisfaction with M&S Store
The next question was regarding the customer satisfaction level towards their respective M&S
store. As the graph suggest, majority of the respondents agreed that they have high level of
customer satisfaction with the M&S store they visit. The result suggests that M&S is trying and
has established the importance build satisfying customer relationship among their stores and the
customers from those plazas. This finding also signifies the fact that apart from focusing on new
customers, M&S is also imperatively focusing on the existing customers. Especially promotion
such as discount, sale are more targeted towards the existing customers rather than the new ones.
This finding is also supported by literature as according to Christopher (2008), firms realize that
relationship marketing focuses on developing stronger relationship with existing customers and
selling them more products suiting their needs and expectations instead of making a single sale
and then moving to another customer.
4.1.3 Satisfaction with ongoing Relationship
Figure 4.3: Satisfaction with ongoing Relationship
In the third question, customers of the Marks & Spencer were asked regarding their satisfaction
level in the ongoing relationship with M&S. as the result indicates, majority of the M&S
customer stated that despite of having positive attitude or high satisfaction level towards M&S
store, the ongoing relationship is not that much effective. However as the differences in the result
is almost on the edge, M&S can work it out effectively in order to implement a strategy that can
result better ongoing satisfaction.
With this regard, Kurtz (2009) stated that relationship marketing strategy main target is to build
relationships with customers so that they stay with the firm and never change their loyalty. In
order to achieve these long term relationships, firms need to use these four basic elements which
not only help them to achieve customer satisfaction and retention but also guide them as a sense
of making the relationship stronger.
4.1.4 Satisfaction towards M&S Employees
Figure 4.4: Satisfaction towards M&S Employees
This question on the survey asked the respondents regarding their satisfaction with relationship
of M&S employees. As result indicates, majority of the respondents agreed that they are satisfied
with the relationship they have with M&S employees. This is another key issue in term of
customer relationship management as the employees work as the face of the organization. It is
the employees attract and maintain strong relationship with customers through excellent
customer service.
In relation to this result, Knapp's (2008) stated in his relationship escalation model, when
purchasing a product or service, customers ask questions seeking to gain information about
whether to continue the make the purchase through the relationship with the employees. Many
relationships do not progress pass this point. Customers judge by their own experiences how
trustworthy an employee is (Dwyer et.al 2007). Thus it is very significant for the employees to
judge the feelings, likes, and dislikes about the customers and progress to their potential
relationship.
4.1.5 Customer Loyalty
Figure 4.5: Loyalty towards M&S
One of the most significant issues is addressed in this question. The statement asked the
customers about their loyalty towards Marks & Spencer. As the above graph indicates, 46%
respondents claimed that they are loyal to M&S. however interestingly despite of having high
satisfaction level with the organization, a majority of 48% customers claimed they are not loyal
to M&S. this finding indicates to one of the most extreme powerful part of the external
environment of the business today, intense competition. Due to this factor every organization are
trying their best to gain customer loyalty by providing them better product/service in a cost
effective way. Customers in this generation have also become aware of the options they have in
front of them. Thus they spent more time in choosing product or service that suits their needs,
not the organization. In relation to customer loyalty, Gummesson (2009) argued that the
relationship marketing strategy approach helps the firms to satisfy customer needs as well as
make them loyal to the business. Today, firms do not see their profits first; instead they explore
their base of customers, their wants and needs which helps them to sell more products to their
existing customers rather than searching for new ones.
4.1.6 Quality of M&S Products
Figure 4.6: Quality of M&S product
Next the customers were asked regarding the quality of M&S products. As the graph indicates,
majority of the customers claimed that they are satisfied with the quality of M&S products. From
the response, it is quite evident that Marks & Spencer products are highly appreciated by its
customers. In addition, the brand image of this company also plays a significant part into the
customers mind as it is one of the most known brands in fashion retailers in the United Kingdom.
Thus the organization can use its brand image in order to attract more new customers and
maintain strong relationship with them through effective customer relationship strategy that can
diminish the potential suppliers. Otherwise new customers might get involved with other
suppliers as the competition in the market is extreme.
In accordance to that, Lovelock (1999) stated that there is a situation where a customer changes
from one supplier to another thus the loyalty is also changed; this scenario is referred to as
Defection. Mostly, firms who are involved in relationship marketing strategy try their best to
achieve zero defection which is by serving every customer and retaining them for long term
instead of losing them.
4.1.7 M&S Fashionable
Figure 4.7: M&S clothing-ware is fashionable
In response to the question regarding whether M&S Clothing-wares are fashionable or not,
majority of the respondents agreed that M&S fashion clothing are fashionable. In this era of
intense competition, it is imperatively significant to have unique product range to attract the
customers. Through the innovation of the product, firms can use it both retaining existing
customers and at the same time attract new customers. in terms of fashion clothing the demand is
much higher and changing. Thus organizations such as M&S are complying with the changing
environment through producing fashion-clothing that suits their customers.
The concept is also supported by literature as Bateson (2005) stated that firms who were
pursuing relationship marketing strategy had an aim to transform new customers into regular
buyers which in turn would help them to boost up their sales and then transform these same
customers in providing strong support for their firms and well as their products.
4.1.8 Expectation of M&S Fashion-wares
Figure 4.8: Customer expectation
The next statement asked the respondents if M&S fashion-wares are exactly what they need or
not. As the above result indicates, majority of the respondents above agreed that M&S fashion-
wares are exactly what they need. The result suggests that it is very crucial for organization to
meet the customer expectation. Otherwise a very strong customer relationship can come to an
end if the firms are unable to deliver the products as per customer expectation. Although
majority of the respondents agreed to this statement, however, this outcome can be partially
biased as the entire sample selected, was from M&S customers.
This has been also correlated with the literature as Christopher (2008) stated that firms realize
that relationship marketing focuses on developing stronger relationship with existing customers
and selling them more products suiting their needs and expectations instead of making a single
sale and then moving to another customer. This strategy is based on a number of promises like
lower prices, better quality, faster delivery and better customer service as compared to their
competitors.
4.1.9 Importance of Relationship with M&S
Figure 4.9: Importance of relationship
Next, the respondents were asked regarding the importance of relationship between them and
Marks & Spencer. As the finding indicates, majority of the respondents agreed that their
relationship with M&S is significant to them. Thus, from the evidence it is quite clear that M&S
is evaluated and has implemented an effective customer relationship strategy which has made the
customers to feel the relationship important. For example, it has been discussed in the literature
as Fournier et.al (2008) stated that relationship marketing strategy is a type of strategy which
does not focus at all on selling in fact it has its main focus on building relationships with trust
between the firms, their customers, distributors, employees, suppliers and everyone who is
involved in the business. In addition it has been further discussed by Kurtz (2009) that, by
pursuing this type of marketing, firms can keep an eye on the communication between them and
the customer. They can also check whether the customer is satisfied or not. This not only helps
the firms to satisfy the customer but they can also calculate the cost if they got a new customer
on board and if they follow this strategy on his case, how much profit they will generate during
his term with the firm. This information helps the firm to find ways of increasing the value in the
new buyer seller transaction.
4.1.10 Awareness
Figure 4.10: Awareness
Another imperative question that was asked to the customers is regarding how they get
influenced or aware about Mark & Spencer. As the above graph indicates, majority of the
respondents selected television as the most popular media. Secondly, fashion magazines and
internet also play a significant role in the advertisement of M&S. 13% of the respondents
selected reference as their media which can be word of mouth from friends and family.
Awareness plays a key as it provides the customers with impression that will decide the
relationship. If it does not execute effectively enough firms will not be able to evaluate the next
stage of customer relationships. This issue is also supported by literature as according to Dwyer
et.al (2007), the awareness stage would presumably be rather short before exploration and
interaction would occur. Yet awareness is a critical stage. If the awareness stage does not occur
in a favorable way, the customer will not continue to the exploration stage of relationship
development.
4.1.11 Emotional Attachment
Figure 4.11: Emotional Attachment
As the survey was forwarding to its end, the respondents were asked if they have emotional
attachment with Marks & Spencer. According to the finding, majority of the customers claimed
they have emotional attachment with M&S. emotional attachment with the retailer is one of the
most significant customer relationship’s achievement as it signifies that what CRM is all about.
Another interesting finding in this particular question was 19% (so far the highest) of the
respondents were neutral in this regard.
In the literature review, there is some major customer relationship factors were discussed in
relation to emotion. For example, according to Berry (2000) some Starbucks customers develop
strong emotional bonds with the brand. Edell and Burke (1987) found that automobile shoppers'
decisions can be based largely on an emotional response. Emotion is thought to work in
marketing by creating positive ad and brand attitudes (Mitchell & Olson, 2001).
Marketing satisfaction researcher Oliver (1997) has begun to include emotion in the satisfaction
theoretical models and scales. Oliver theorizes that attractive information from a firm leads to the
"affective" (emotional) stage of loyalty.
4.1.12 Trust with M&S Product
Figure 4.12: Trust with M&S
The final question of the customer survey was regarding trust. As the above graph indicates,
majority of the respondents that they trust the information about the products of the M&S. this
signifies that salespersons of M&S has the ability to pursue their customers and in addition, the
quality products provided by the company has also have significant impact in this regard.
In the literature, Moorman et.al, (2003) stated that trust is defined as the customer feels trust for
the salesperson, that he or she will be honest and reliable.
Furthermore, Bateson (2005) stated that relationship marketing is the combination of superior
service, enhanced quality and marketing. It also focuses on retaining the customer, building a
long term bond with the customer thus gaining trust, as well as increasing the level of
commitment for that specific customer which helps the firm to create a good impression on the
customer and keeping him longer with the firm.
Questionnaire Survey (PART II)
4.2 Focus Group Discussion
This section of the paper analyzes the discussion with two CRM managers of Marks & Spencer.
The first question asked the managers regarding M&S’s strategy in order to build customer
relationship. In response the managers claimed that M&S always tries to store their customers’
information in their database through providing them membership cards after sales. In addition,
the company uses this database to analyze the customers purchase behavior. Through this step
M&S able to learn about their customers’ choice, habits and trends. It also helps them to find out
how to make their customer satisfied. In addition M&S also tries to enhance the buyer-seller
transaction. This step is also dedicated to make sure if the customers are satisfied or not. If not,
through this process M&S tries to attract new customers. The company also uses CRM software
in order to monitor customers’ buying activities, stated by the managers. These are the some key
steps the M&S authority implements according to the managers. These stages are also almost
similar with the steps mentioned in the literature review by Kurtz (2009).
The managers were next asked regarding the changes within the company when it comes to
customer and customer relationship. The response from the managers explored a huge operation
which is conducted by the company. According to the managers, the most significant motto,
vision and aim of M&S is to build positive relationship with their customers. Thus the
organization implements strategies that is associated with the customer or customer relationships
very significantly. These strategies include training of the employees regarding assessing
customers behavior and learn how to pursue them, taking records of the customer data etc.
The next question asked the managers regarding M&S’s strategy to interact with the customers.
According to the managers, the company uses various media to gain customers’ attention. M&S
spends a significant amount on advertisement in Television as it is the most watched source of
exposure. The managers further claimed that word of mouth regarding the M&S brand is another
source of interacting with the customers. Although it has been found nominal percentage the
consumer survey, but the managers claimed this kind of interface are driven by family and
friends, which results curiosity and positive emotions towards the brand. In addition, as fashion
retailer stated by the managers, M&S also uses the exposure of the fashion magazines to interact
with the customers. The company also uses Internet and newspaper to broadcast about sale or
discount information.
When the managers were asked regarding the customer satisfaction towards Marks & Spencer,
both of the respondents claimed that customers are satisfied with the products of M&S. in
addition, the managers claimed the organization conduct survey among the customers in order to
measure their satisfaction level and take initiatives to overcome any constraints mentioned by the
customers as special 24 hours hotline is available for the customers to make any kind of feedback
about the products or stores.
In addition, according to the respondents view, M&S put lot of emphasis on retaining the
existing customers as they are considered to be the most valuable asset in customer relationship
management mentioned by the managers. Moreover, the managers also claimed that the
company uses the telemarketing concept with the existing customer to make sure they are
satisfied with their products and aware them regarding new coming surprises.
The respondents further claimed that it is much easier with dealing with the existing customers
as they are already familiar with store management, employees and salespeople. Hence in order
to retain these customers, the organization offers token such as honorary membership cards that
will give the retaining customers a significant amount of discount on their purchase. The
company also provides these customers with the facilities such special discount on a price limit
excision.
In relation to M&S strategies to retain customers, the managers claimed that it is the most
significant part of the organization’s success. The retaining customer adds extra value to the
business as they are more loyal and satisfied towards the respective brand, refers to other about
the company and also make additional purchases on products or services. Thus in order to retain
customers, M&S tries to focus more on the existing consumers as they are the primary retention
asset. In addition it is important for the organization to be consistent with the approaches towards
the retaining customers and dealing them with honesty. By evaluating their purchase behavior
and taste of products, M&S management tries to connect to the customers as far as possible so
that both parties can understand each other. And last but not the least; the manager claimed that
the organization rewards them for staying with the company.
Next, the manager were asked regarding the importance of customer’s habits, taste, fashion and
changing trends towards M&S. the managers claimed that it is very significant for the
organization to synchronizes its fashion wares with the constantly changing trends in the fashion
industry. However the managers also claimed that M&S also focuses its fashion ware
competencies not only for a selected segment that are moving through the constantly changing
environment such as young generation, but also for the customers of all ages. Through this
strategy M&S tries to fulfill all the requirements for people from different segments. In addition,
the managers also claimed that they analyzes their existing customers’ record in order to get
ideas about their habits and tastes in relation to fashion wares.
The final question in the focus group discussion asked the managers regarding the
responsibilities of the of the M&S employees in relation to customer relationship and retention.
According to the managers, it is the most significant factor for the organization to train their
employees so that they can gain the ability to interact with the customers and peruse them in
making purchase decision. The company provides special training session for the in store sales
representatives where the primary focus is on customer relationship. Because of these initiatives,
employees at M&S are much more efficient in customer relationship from other competitive
firms, claimed by the managers. Thus from the discussion, it is evident that M&S is successfully
taking all the steps to build strong relationship with their customers. In addition, the organization
is also utilizing its human resource in effective customer retention.
Chapter 5: CONCLUSION & RECOMMENDATIONS
This chapter interprets the results generated in previous chapter. Also, directions for future
research are suggested, and, in addition, the managerial recommendations are suggested and
limitations of this dissertation are discussed
The purpose of this research was to understand the initiatives firms’ take in order to build
customer relationships. Insight into the customer experience may help relationship marketers
succeed by matching strategic planning and specific communications to customer stages. This
study has discussed several developmental stages perspective to a relationship marketing context.
Some key factors from those models are also identified which is implemented by the firm. An
overall model of customer relationship model is developed for recommendation.
The results indicate that relationship development theory was applicable in the relationship
marketing context. In general, customer stages did progress and stages changed in relation to key
factors.
In this final section of the paper, the research question will be answered in align with the
justification of the research objectives. The chapter further provides recommendation on
managerial perspective with recommendation for future research and limitation.
5.1 Justification of the Research Questions
Question 1: What are the steps followed by firms in order to develop relationship
marketing strategy aiming to make it effective?
Answer: In relation to the question regarding the steps followed by firms in order to develop
relationship marketing strategy, the findings from the one organization that is using the steps has
been identified. Thus, according to Marks & Spencer management, the organization firstly create
awareness among their potential customers through media or word of mouth advertising. Once
the the new customers become regular, they offer them M&S membership cards in order to store
the customer data in the database. The organization additionally uses these data to analyze
customer purchase behavior and tries to entertain them with value added services. Through this
process the company also tries to measure the customer satisfaction level towards the
organization. In the last step M&S uses CRM software in order to track down every customers
habits, taste or purchase behavior for taking action in the future in regards with building
customer relationship.
Question 2: What are the factors need to be considered in relationship marketing
development strategy?
Answer: There are several factor has been identified in the building of this research that are need
to be considered in relationship marketing development strategy. It has been found that it is
imperative for the organizations firstly create awareness and identify the potential customers.
The organization can choose various cost effective channels in order to reach out to these
customers. The next but probably the most significant factor is to retain the existing customers.
When retaining the existing customers, there are several other factors are also associated with it
such as customer satisfaction, attitude towards the brand, emotion etc. additionally it is also
important for the organizations to comply with customers feedback which will cause immediate
satisfaction among the customers. thus if organizations can utilize all these factors in their
relationship marketing development strategy, it will automatically result the creation of
referencing or the word of mouth awareness among the new customers which is another crucial
part of relationship marketing as referencing most of the time driven by emotions.
Question 3: What are key challenges faced by firms following relationship marketing
strategy in this global Market?
Answer: Literature review and data analysis revealed that, when it comes to relationship
marketing, organisation’s are facing various challenges such as intense competition, changing
consumer demand, rapidly changing technological environment, pressure from the suppliers and
stakeholders etc. Data analysis revealed that consumer loyalty is significantly low in the fashion
industry of UK, and in this era of economic recession consumers are lot more price sensitive than
before. Therefore, focusing on quality of the product or maintaining and establishing relationship
with customers cannot guarantee success for the organizations. The research revealed that
organizations needs to stay ahead of the competition through lower price, quality product and
enhanced relationship with the customers. As Kotler (2009) mentioned that soon enough
consumers are going to tell firms what they want or simply they are going to dictate the terms
and firms will be obliged to respond accordingly. Therefore, relationships with the customer
remains important, however ability to respond quickly to their demand is also very important.
This is where innovation and continuous improvement of the business processes comes in the
scenario. Organisation like M & S are continuously reinventing their product line and this has
been one of their main success criteria.
Technology remains another major challenge. Firms still find to find the right balances between
technology and human touch when it comes to providing superior customer service. Research
revealed that so many firms deploy technology excessively to communicate with customers and
subsequently end up losing the sales and customers. However, research revealed that M&S
managed to integrate technology with their overall business strategy. This enables them to utilize
technology to improve consumer experience and confidence.
5.2 Validation of the Research Objectives
Objective I: The first objective of the paper was to explore the long term relationship
development stages of M&S. from the result of the data analysis; it has been found that Marks &
Spencer implements five key development stages in order to maintain long term relationship
with the customers. The first stage of this process is to create awareness. The next stage is based
on gaining customer information about the customers through exploration. In the next stage, the
company focus on maintaining the relationship with their existing customers by offering them
value added service such as discount card. This is the stage where the relationship is on a
growing process. In the fourth stage, M&S makes sure that the customers are satisfied with the
organization and if not they tries to sort out the factors mentioned by the customers in their
feedback. In the final stage M&S signifies the referencing value of the satisfied existing
customers by which they can target the potential new customers.
Objective II: The next objective of the paper was to understand the importance of customers’
habits, taste, and fashion and changing trends towards M&S. from the finding it has been found
that the clothing that Marks & Spencer uses are fashionable according to the customers. The
organization understands the significance of providing quality and unique clothing wares and at
the same time accordance with the current trends in fashion. Thus M&S tries to use innovation of
the product, by which it can be used in both retaining existing customers and at the same time
attract new customers. in addition as the fashion clothing demands are rapidly changing, the
organization use their brand image in association with their fashion wares as the competition is
significantly high. Hence organizations such as M&S are complying with the changing
environment through producing fashion-clothing that suits their customers.
Objective III: The third objective of the paper was to identify the factors need to be considered
in order to maintain long term relationship marketing. From the customer survey and
management discussion, it has been found that there are some key factors associated with the
maintenance of long term relationship marketing. It is imperative to promptly respond to any
required assistance of the customers. The employees or in store sales representatives should have
the ability to convince the customers regarding their best offer in products or services with being
honest. These kinds of assistance convey satisfaction in the consumers mind and they feel
emotionally attached with the respective brand. Also after sales services is another important
factor that needed to be considered in maintaining long term relationship marketing.
Objective IV: The final objective of the paper was to recommend how consumer loyalty plays
an important role in trust based marketing. According to the findings from the data analysis, it is
evident that customer loyalty is an imperative factor in customer relationship management. Its
role in trust based marketing is very crucial as customer loyalty is invented from the trust. Thus
when organization presents trustworthy information to its customers, the initial attitude about the
firm becomes positive. Further in a growing relationship, customers become more emotionally
attached with the respective organization which makes them loyal to the brand. Thus in trust
based marketing customers are emotionally attached with their respective organization, which
results loyalty and commitment towards the products or services of that organization.
5.3 Recommendations
Although this study revealed important positive results, such as awareness can lead to prosaically
emotion, growth, trust, and commitment, these findings also show that unresolved doubts can
terminate customer relationships. Furthermore, if a customer’s emotions and trust levels are not
positive, relationship development may cease, as these variables are central drivers in customer
relationships.
Customer relationship stages discussed in the literature need not be a marketer’s minefield,
however, it is recommended that some factors can be utilized and there is room for various
solutions and improvements. These recommendations include planning and practicing for stages
and a restructuring of the front-line employees as the leaders who own the intimate moments
with the customer.
5.3.1 Planning and practicing for stages
The implication of this study is that relationship marketers meet customers where they are in the
relationship stages. If a customer in the awareness stage receives marketing communication
better suited to the commitment stage, the relationship may be more likely to fail. However, if
relationship marketers match customer communication in depth and breadth considering the
customer's stage, relationship marketers may earn a functional, long-term, committed customer
relationship. Thus in order to develop or plan an effective model for stages, the factors outlined
below needs to be considered.
Awareness
Exploration
Consumer data
Analysis of data
Exploration
Growing relation
Trust
Customer feedback
Customer satisfaction
Loyalty
Commitment
As it has been found that customer satisfaction is one of the key elements of customer
relationship, routine customer satisfaction surveys should be linked to actual customer
relationships and problems directly solved. Direct and immediate customer problem-solving can
be achieved through entering in comments to a database and following up with each issue daily.
5.3.2 Internal relationship marketing to employees
Front-line employees should be viewed as crucial team leaders and more resources should be
allocated to empower employees and salespersons in direct, daily contact with customers.
Employee pay should not be commission-based, but should reflect the degree to which
employees help, serve, and build long-term relationships with customers. Relationship training
programs with role-play of customer stages may be especially illuminating to relationship
marketers, particularly in preparing for stressful situations.
The seller must recognize the customer moment, get a sense of the customer's needs, and as
accurately as possible, match a communication appropriate to the customer’s breadth and depth
level. The metaphor of talking with someone would like to date might be useful when training
salespeople on the opportunity of customer moments. Therefore, it is the seller’s job to initiate
the verbal or nonverbal communication and make the moment a relational one.
Figure 5.1: Recommended model for the study (Adapted by researcher)
Implementation Success
5.4 Limitation & Future Research
Generalizations from the results of this study are limited because a convenience sample was
used. These results should be interpreted while acknowledging that those who participated may
not have been representative of the non-volunteers. Perhaps participants responded more
enthusiastically about their relationships with marketers than those who refused to participate.
Furthermore, the sample was not pulled at random from the entire population of those in
marketing relationships; it was conducted among the customers of Marks & Spencer.
Due to these reasons, future research should be conducted with the same topic but from the
industry perspective. Also the sample size should be bigger and random.
In addition, because of the resource limitations to make direct observations and recordings of the
key variables, validated self-report measures were used. To encourage honest, reflective answers,
questionnaire instructions called for anonymity and honesty.
The scope for this study is limited to the customer-seller aspect of relationship marketing and
results may be appropriately applied to customer relationships from the customer’s point of view.
The study scope of testing customer stages is a subset, and a function of corporate, store, and
brand relations that were not explored in this study. Thus future research should be focused in
those areas.
In addition, although the relationships involved with the exploration factor were corrected for
attenuation, the exploration measure’s validity and reliability could be improved. Future research
may also benefit from the inclusion of a measure of emotional involvement, although this sample
indicated a high involvement with this product category, i.e., fashion wares. Even though the
extra predictor variables such as individual importance of friendships and social bonds,
enthusiasm for gadgets, and general happiness, for example, did not appear to have a large
impact on the relationship study factors, future studies may benefit from the inclusion of
measuring specifically if a friend told the customer to buy or not to buy from the seller.
It was beyond the scope of this study to investigate stages in a longitudinal design or to capture
the relationship from entirely the view of the marketer (the focus group discussion had nominal
impact). These omissions could create some discrepancies as to causal direction. Testing
relationship stages, and particularly identifying exploration processes, in a field experiment with
a repeated measures design would be ideal for the study where participants could experience the
actual relationship stages to help arrive at externally reliable consumer behavior outcomes.
Furthermore, a longitudinal design could rule out cohort effects as an explanation for stages. An
overtime design could help establish causal order and could test a multiple sequence model.
Examining customer defections in depth and the process of relationship dissolution was also
beyond the scope of this study. Thus these factors can be examined in the future research.
5.5 Concluding Thoughts
Most importantly, relationship marketers may use this study to act upon what being a partner in a
relationship really means. Above all, relationship marketers may now understand that customer
emotions and trust vary over different stages. This study shows there are customer relationships
based on emotions and trust that succeed and there are customers who spiral down to doubting
and dissatisfaction to end the relationship. Hence trust is considered to be the foundation of any
relationship.
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Appendix I: SAMPLE QUESTIONAAIRE
PART I
Consumer Survey on M&S Customers
1. My customer experience regarding M&S product/service makes me feel good/positive about the organization.
□Strongly Agree □Agree □Neutral □Disagree □ Strongly Disagree
2. I am very satisfied with this relationship with the M&S store.
□Strongly Agree □Agree □Neutral □Disagree □ Strongly Disagree
3. I am satisfied with the way this relationship with M&S is going.
□Strongly Agree □Agree □Neutral □Disagree □ Strongly Disagree
4. I am satisfied with the relationship with M&S employees.
□Strongly Agree □Agree □Neutral □Disagree □ Strongly Disagree
5. I am loyal to M&S.
□Strongly Agree □Agree □Neutral □Disagree □ Strongly Disagree
6. I am satisfied with the quality of M&S product.
□Strongly Agree □Agree □Neutral □Disagree □ Strongly Disagree
7. M&S clothing wares are fashionable.
□Strongly Agree □Agree □Neutral □Disagree □ Strongly Disagree
8. M&S fashion wares are exactly what I need.
□Strongly Agree □Agree □Neutral □Disagree □ Strongly Disagree
9. How important is the relationship you have with Marks & Spencer?
□Very important □Important □Somewhat important □Not important □ not at all
10. How do you get influence and aware about M&S products?
□ Television □ Radio □ Internet
□ Newspaper □ Fashion magazine □ Reference
11. I feel emotionally attached with M&S.
□Strongly Agree □Agree □Neutral □Disagree □ Strongly Disagree
12. My trust level towards M&S is high.
□Strongly Agree □Agree □Neutral □Disagree □ Strongly Disagree
PART II
Focus Group Discussion With Two CRM Managers of M&S
1. What is M&S’s strategy in order to build customer
relationships?
2. What are the changes within the company lately when it comes
to customers and customer relationships?
3. What are the strategies to interact with the customers?
4. Are the customers satisfied within the company?
5. What steps do you take to keep existing customers?
6. What are the methods that simulate repeated buying
behavior?
7. What is the importance of customer’s habits, taste, fashion
and changing trends towards M&S?
8. In regards to customer relationship and retention, what are
the responsibilities and attitude of the employees?
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Appendix II: Overview of Marks & Spencer
Macro Environment Analysis of M&S
The macro environmental factors can be divided into six broadly categories, which are political,
environment, social, technology, environment and legal (Johnson et al, 2005). The critical
analyses of the M&S’s macro environmental factors are given below:
Political and Legal
It is important for companies to follow government policies and global organisation systems,
such as World Health Organization (WHO), while they make marketing plans. The UK
government has introduced energy saving organisations, such as ‘Climate Change Levy’ and
‘Green Tax’ on energy use to reduce CO2 by 2010 by 20% against 1990 levels, and supplied
subsidies to improve its policies (M&S Annual Report, 2002/03). In recent years, gene
technologies have increased substantially. Some of these technologies have used to produce
food. However, some of these technologies may cause natural environment pollution and
endanger human’s health. “Some European supermarkets are moving towards selling only meat
from animals produced fed on non-GM feeds. This is building on moves by many retailers in the
UK to go non-GM” (Meat & Livestock Australia, 2001). M&S also announced that it supplied
all non-GM foods on its shelves (BBC News, 1999).
Economic
Economic factors have affected companies to extend their business or retrench its business, such
as close loss-making operations, and sale their non-core business. For example, the 11th
September 2001 accident in USA has caused many companies to face the recessions in North
America and European countries. The 11th September accident in USA caused economical crisis
in North America and other countries. It caused consumers to change their purchasing habits,
and retailers were seeing sales decreases (BBC News, 2001).
Social
The requirements of consumers are changeable. People want to feel special, modern, and
convenient. Hence, people purchase fashionable clothing and use credit cards to satisfy their
needs. M&S keeps with the latest style and colour, although it has high quality goods. M&S
does not consider with customer needs, especially in clothing market, it may cause M&S to lose
its sale to competitors (Jobber, 1999). Another social factor is that credit card acceptance has
increased more than 10% of all trade (BBC News, 2000).
Technological
At the present time, information technology changes fast, and most companies has built their
own websites, online shops, and databases to help them to increase their sales from online
customers. They collect information and analyse their customers to know their customers’ needs
and wants. Therefore, M&S has invested its information technology, such as online shop in
1999. In addition, most stores in the UK and Western Europe were running a trial of the EPOS
(Electronic Point Of Sale) systems. M&S has also used this system to drive sales, increase
customer service, and improve its efficiency (Yorwerth, 2001 Cited in Fahad, 2008). However,
M&S did not control its online shop and EPOS system effectively. Actually, its website could
not show its stocks immediately. Customers, who use its online shop, still feel inconvenient.
Micro Environment Analysis of M&S
The task of marketing management is to attract customers and establish good relationship with
customers by creating the worth and satisfaction of customers. However, marketing managers
not only pay attention to the needs of target market, but also need to realize the effect on
microenvironment that are suppliers, distributors, customers, and competitors (Kotler and
Armstrong, 2001: 78). The critical analyses of the M&S’s micro environmental factors are given
below:
Suppliers
M&S has not only established good relationship and reciprocal profit with suppliers but also
maintained long-term partnerships to cooperate with suppliers (Wilson and Gilligan, 1997: 204).
Suppliers supply necessary resources to companies for producing products or services.
Therefore, the development of suppliers may bring enormous influence to the company (Kotler
and Armstrong, 2001: 78-79). It is a right policy that M&S values suppliers for maintaining its
business. Nevertheless, it may cause suppliers to raise the cost of materials. M&S needs to
consider the issue. M&S has built a good reputation for supplier management. If a supplier
refuses to supply materials to M&S, it can turn to another supplier (Christopher, 2001). The
company has this advantage that can supply it with an unfailing supply of materials. If suppliers
cannot supply materials to the company immediately, customer loyalty may be reduced by lack
of products. M&S has controlled this matter.
Distributors
M&S is the largest and the leading variety store retailer in the UK (Textile Outlook International,
2002). “New brand and product development over the last ten years in fast-moving consumer
goods sectors in the UK is that many of the most original and successful initiatives have been
taken not by manufacturers but by retailers” (Textile Outlook International, 2002). M&S has
changed the marketing structure from manufacturers to retailers and inspired other major
retailers to follow. This is a very significant even for retailers’ change. However, M&S does not
control the stock on popular selling clothing (Jobber, 2001: 149). Customers cannot purchase
products that they really want. This situation needs to be handled and improved.
Customers
M&S believes that customers are the most important element of consideration and understands
that customers are very important for its origination (Stokes, 1997: 5-7). Companies should
understand that customer satisfaction is more important than product sale. M&S realises this
main attribute and provides good services and high quality products to customers for raising the
customer loyalty. M&S believes that precise quality controls must persist forever (Macrae, 1996:
394).
This company always considers customers’ concern and tries to provide the best quality or
services to customers. Consumers perceive that all St Michael products are in good quality
standards (Macrae, 1996:394). Nevertheless, “own labeling’ of over 30% of stores’ lines is often
perceived by consumers as restricting their lifestyles” (Macrae, 1996: 394). Consumers prefer
good quality of products, however, they do not want to be confined their lifestyle by ‘own
labeling’. M&S realized this matter and tried to avoid this impression.
Competitors
M&S focuses its business on the quality and service. Sainsbury and Tesco that are the
competitors for M&S focus its business on the quality, convenience, breadth of range (Wilson
and Gilligan, 1997: 302). A company not only satisfies the needs of customers but considers
strategies of competitors in the same target market. M&S has some competitive advantages that
are over one hundred years in business, recognizable brand name, and good supplier relationship
(Christopher, 2001). In particular, M&S has its own market testing and exercise tight quality
control (Hart and Murphy, 1998: 7). The quality and service can keep customers’ loyalty. M&S
has done this great. Unfortunately, Sainsbury and Tesco not only emphasize the quality but
establish their stores universally. M&S needs to improve this disadvantage certainly.
SWOT Analysis
SWOT analysis is a pre-condition in judging any companies’ feasibility and its competitiveness
over the other company. It helps to assess the possible cost benefit and opportunities that will
lead to select a viable project. We can present SWOT analysis for Marks and Spencer in the
given way:
Figure: 2 SWOT Matrix
Strengths Weaknesses
Opportunities Threats
Opportunities and Threats of M&S
Opportunities
Internet Technology
Internet technology has developed fast, it offers an opportunity to increase the demand for the
online products (Zakon, 1999). In terms of this circumstance, buying products online became a
new trend. Customers are getting used to accept the model and adapt it to their daily lives, and
the demand for this kind of products would be increased in the future.
Healthy Eating
Healthy eating offers an opportunity that the demand of specific food will be increased
(Leyshon, 2002). People pay attention to the life quality, they request companies to offer varied
products to satisfy their needs. For example, in the food market, M&S does good segmentation
in providing the vegetarian, low fat or organic food. This is the advantage that the competitors
have not aware of it.
Threats
Although M&S has its own strengths, opportunities and weaknesses, it still occurs some threats
from itself and other competitors.
Strong Competitors
Strong competitors are the most threat to M&S. For example, in the food market, there are four
main supermarkets, such as Tesco, Asda, Safeway and Sainsbury (Ocr, 2006). They provide not
only high quality but also value-added products to build customers’ loyalty. In the clothing
market, Gap, Next, Topshop and other fashionable brands may compete with M&S (M&S
Annual Report, 2007/08).
The Change of Social Environment
Except other competitors, M&S will be influenced by social environment. Since the social
environment changes at any time, the customers’ tastes are also changed. For example, people
move to other countries, and their culture will affect the local people’s lifestyles, such as eating,
and dressing. M&S can adjust its products to satisfy different needs.
Chemical Pollution
Environment pollution is a threat for M&S. An environmental systems manager of M&S
claimed, “Every one of the 30,000 product line that M&S sells is dependent on chemicals”
(Friend of the Earth, 2002). Governments are taking measures to protect natural environment
and reduce pollution. This potential risk will affect its development of M&S in the future.
Internal Environmental Factors of M&S:
The internal analysis leads to a clear assessment of the organization’s resources and
capabilities in performing the different functional activities. Positive activities and unique
resources are organization’s strength. The opposite is the weakness. This step forces managers to
recognize the resources and capabilities it has available (Robbins and Coulter, 2005)
Strengths
High Quality
High quality is the major strength that makes M&S successful. Customers always find high
quality goods such as fresh fruits, vegetables, and other superior goods in M&S’s food hall
(Ciao, 2002). With many people turnning to eat vegetarian meals, M&S grasps the consumers’
need. M&S has high quality of products that are the food and other products, such as baby
products and women’s underwear.
Customer Services
M&S has high reputation for focusing on customer service (Christie, 2002). This is one of the
most important methods to make a good relationship between customers and M&S. For
example, when women want to buy underwears for themselves, the shop assistants will help
them to measure sizes and give them good suggestions.
Shopping Environment
M&S tries to make customers feel more convenient and comfortable. It makes stores brighter,
and uses modern designs (Rungfapaisarn, 2001). All goods in the shop can be seen immediately.
Furthermore, customers do not worry about being drowned in many shelves and avoiding
multitudinous people.
Manager Training
One of M&S’s strengths is its strict and excellent manager training system (Retail Technology,
1999). Every manager of M&S must be familiar with duty of every post. In fact, managers of
M&S are arranged practice of every post. It helps them to improve both work experiences and
management skills.
Weaknesses
Clothing Lack Segmentation
The clothing market of M&S has many segments. In fact, the merchanclise, especially ladies
outerwear, is outmoded design and cut. In addition, affluent younger consumers prefer
purchasing brand-labels, such as Gap, Next and Topshop (Jobber, 2001: 149).
Stock Control
“The non-performance of the home delivery/shopping service even sometimes involves wedding
lists. Customers were told that items were out of stock” (Jobber, 2001: 149). Customers
complain the defect of e-shooping and delivery services. To some extent, M&S suffers from the
unbalance between the stock and Information Technology System.
Waste Store Spaces
Another problem is that M&S has many store spaces. In fact, it has added 75 percent of square
footage since the early Eighties, but its market share in clothing has not increased (Stewart,
2000). M&S needs to find some new products to stuff its extra spaces.