understanding customer relationships

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Understanding Customer Relationships - 38419848

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Introductory Certificate in Marketing

501 - Understanding Customer

RelationshipsSeptember 2013

(Word Count2,903)

By 38419848


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Executive Summary

The purpose of this report is to examine customer relationships within the L'Oral group. Theresearch carried out as follows explore the organizations relationship with its customers and

examines how to improve these relationships through a number of different strategies.Research for this report included reports from market research organizations as well as first

hand data from the L'Oral corporate website. I carried out background research on theorganization as a whole (see appendix 1).

Major findings indicate that there is a need forL'Oral to understand and communicate withtheir large customer base in order to successfully sell products. The report explains the ways

in which the organization can continue to boost these relationships through identifyingpurchasing habits and improving communication. Further into this report is a discussionpaper, which outlines how L'Oral can improve the internal relationships between separate

departments of the organization by improving communication. This will ultimately create abetter working environment and reflect on the companys sales figures.

The report will conclude with a section on time management, this discusses my key findingsand a reflection on my personal experience and areas for improvement.

To summarize customers preferences will continue to change particularly in the fast growing

cosmetic industry. This report recommends L'Oral continues to develop and invokecommunication with customers on a personal level, as well as carry out regular market

research to clarify their changing wants and needs in order keep up to date with the growingmarket.
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Retailers

Part One - Improving and Developing Customer Relationships

This section of the report will focus on how L'Oral can improve relationships with itscustomers through identifying purchasing habits. By learning more about the customers needs

and purchasing habits this will enable repeat purchases, customer loyalty and satisfaction.

Findings

ForL'Oral the two types of customers I have identified are consumers from the Businesstoconsumer market (B2C) also known as end users. These are individuals that purchase theproducts with the intention to use themselves. Secondly the intermediaries such as retailersand hairdressers (B2B). This can be a consumer who is buying on behalf of another business.For example L'Oralprofessional hair colorant products are purchased for use in hairdressersand cosmetics wholesalers.

LOreals scientific director states1Today consumers are more knowledgeable about their

skin and are prepared to spend their money on products that work because they are linked toscientific advances.Competition is high and the consumer has a wide and varied choice, from an abundance ofbrands and stores to buy from. The product must be innovative and have an edge againstcompetition in order for it to stand out in todays market both B2B and B2C. I reflect upon

this below.

Identifying Purchasing Habits

Demographics such as age can used to identify purchasing habits. A younger person may bemore likely to purchase cosmetics more often and frequently; they are influenced by friends

and celebrity figures, which impact the products they buy. Older customers may be loyal to aspecific brand and have been repurchasing the same product for a number of years. Oldercustomers may have more disposable income to spend on luxurious higher priced products,although this may not always be the caseas shown from the information below.

Geographical location, research conducted by the Daily Mail claims A quarter from

London think spending money on skin care is an investment, only one in ten from Yorkshireand Humberside believes the same

2The article also explains how young professionals are

1Taylor, R. (2012, July 14). Beauty map of Britain: Revealed, the skin care divide between London ladies and Yorkshirelasses. The Daily Mail. Retrieved July 2013 fromhttp://www.dailymail.co.uk.

2Taylor, R. (2012, July 14). Beauty map of Britain: Revealed, the skin care divide between London ladies and Yorkshire lasses.The Daily Mail. Retrieved July 2013 fromhttp://www.dailymail.co.uk.

Consumers (end users)(Purchase product)

(Purchase product)

Individual Consumesproduct

Products used in hairdressers
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buying more high end beauty products to improve their looks and wellbeing as they considerit important in their careers tolook their best, this is reflected in the high spending in London

and less in more rural areas of the country.

Identifying Sources of Information

Here I have identified different sources of Primary and Secondary research. Primary researchis mostly used to attain both customer and competitive data; it can produce worthwhileinformation focusing on specific aspects of the brand.

3Whilst secondary information uses

sources already assembled, this can save money and time for an organization but is alsouseful for putting previous research into better context.

(Primary I nformation)

Scientific articles reporting new research in the cosmetic industry. Interviews/questionnaires with customers on purchasing habits or with members of

the fashion industry on trends and sales.

Focus groups(Secondary I nformation)

Printed texts e.g. High fashion magazines such as Vogue and Harpers Bazaar toexamine current and for coming trends in beauty and fashion.

Market research organizations such as, Mintel4 and TNS5 Newspapers, journals, TV Fashion/Beauty blogs

Market research provides detailed and insightful information on changes in the market as wellas growing and declining trends. The following report from Mintel explains how an ageing

population will affect the facial skincare market, Adults aged over 55 will soon account for30% of the population and will likely impact the product preferences of facial skincare

consumers6.

Beauty and fashion blogs are trusted for opinions; customers often check products here beforethey buy. L'Oral can this to their advantage by sending out new product ranges and invitingthem to product launches to gain a better reputation, and create positive PR. This particularpost discusses products, which the consumer has been disappointed with

7.

3Kennaugh, C. (n.d.). Choose a cost-effective market research technique. Retrieved July 2nd, 2013, from Microsoft officewebsite:http://office.microsoft.com/en-us/project-help/choose-a-cost-effective-market-research-technique-HA001142573.aspx

4Mintel. Retrieved July 2nd, 2013, fromhttp://www.mintel.com

5TNS Global. Retrieved July 2nd , 2013, fromhttp://www.tnsglobal.com

6 Facial Skincare UK May 2013:Issues in the market. (2013). Retrieved July 2nd, 2013, fromhttp://academic.mintel.com/display/638082/

7Pebbles, L. (2013).A LITTLE DISAPPOINTED. Retrieved July 2nd, 2013 fromhttp://www.whatihearttoday.com
http://www.salesforce.com/uk/customers/stories/loreal.jsphttp://office.microsoft.com/en-us/project-help/choose-a-cost-effective-market-research-technique-HA001142573.aspxhttp://office.microsoft.com/en-us/project-help/choose-a-cost-effective-market-research-technique-HA001142573.aspxhttp://office.microsoft.com/en-us/project-help/choose-a-cost-effective-market-research-technique-HA001142573.aspxhttp://www.mintel.com/http://www.mintel.com/http://www.tnsglobal.com/http://www.tnsglobal.com/http://www.tnsglobal.com/http://www.whatihearttoday.com/http://www.whatihearttoday.com/http://www.whatihearttoday.com/http://www.whatihearttoday.com/http://www.tnsglobal.com/http://www.mintel.com/http://office.microsoft.com/en-us/project-help/choose-a-cost-effective-market-research-technique-HA001142573.aspxhttp://www.salesforce.com/uk/customers/stories/loreal.jsp


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ConclusionKey points

Customers can be ordered into various demographics such as age, location and genderto give basic insight into how these groups vary in requirements.

More in-depth research can be used to gain more knowledge on these individualconsumer groups, either primary or secondary.

L'Oral can gather information needed on how to improve their product ranges andorganization as a whole.

(Word Count800)
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Part Two - Communication with Customers

The second section of the report features a PowerPoint presentation, which outlines howL'Oral can use communication strategies to gain a better perspective on their cliental and

keep relationships fresh.

The Shannon Weaver model can be applied to almost any type ofcommunication and is easily understood.

Within the model are eight key elements critical for communication/transmission

to work successfully.

SOURCE(The source of communication, how the communication is putinto action by the initiator)

ENCODER (Specific format that the message should be received as)

MESSAGE(The overall message of communication)CHANNEL (How the message is communication either verbal, written

etc.)NOISE (This is known as an interruption and disturbance to the

communication) Noise comes in different forms for example actual

physical noise that distorts sound within a message or a wrongchoice of vocabulary when conveying a message.

FEEDBACK(Is important to know the message has been received and

interpreted accurately).

The Schramms model of communication expands on the previous model(ShannonWeaver model) with more of a focus on encoding and decoding the

message produced.

The model demonstrates two different concepts to understanding communicationthese are:

The Feedback Loop

The diagram of field of experience.

Diagram One

The top diagram illustrates the feedback loop; this explains how the process of

feedback is interpreted within the communication process. The message is passedfrom the sender to the receiver, and then back again to the sender in which theyreceive feedback on the message.

Diagram Two

The bottom diagram illustrates the field of experience. This simply demonstrateshow messages may be perceived differently depending on the individuals

personal values and beliefs. Messages are either:DenotativeUniversal meanings often perceived the same for the

majority of people.

ConnotativeHave different connotations for different peopleThere are also a variety of different factors that impact how a message is received

such as pitch, accent, facial expression, emotion and language. (This would be

seen as Noise as stated in the first slide).


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(Word Count - 775)

We can apply the communication method in advertising when launching a new

range of hair colorants in the following ways:

In store promotions and offers (vouchers from fashion magazines) In store demonstrations for instant feedback.

Where the product will be positioned in the store should be taken into

account, to reduce noise.

The environment the product is sold in is also an important factor.

(Boots, Superdrug and cosmetic stores)

We are made aware of how a message can be received wrongly and thus can take

into account these factors to create a clear message when advertising.

E-MAIL

The first form of direct marketing I propose to use is E-mail.

E-mail is used by most people and is an easy and quick way to target

customers and deliver a message, it is also relatively inexpensive yet

still effective.There is a better chance of reducing noise when using this form of

marketing; messages can be precise and express as much or as littledetail as needed which can be tricky to do with other forms ofmarketing such as TV advertisement.

E-mail also reaches out to customers on a personal level, if using mailing

lists to customers, individual e-mails addressed to the customerpersonally will seem more exclusive.

Previous users ofL'Oralproducts can be contacted through mailing lists

could be even more specified to customers interested in hair

products.

INTERNET ADVERTISMENT

Relatively low cost in comparison to other forms of advertisement but

can be just as effective.Ads can be updated frequently at lower cost and less time.

Ads can also be targeted to a specific audience by placing ads inwebsites the consumer will most likely visit. (Online shopping

makeup stores, Boots, Superdrug etc.) and blogs.

SOCIAL NETWORK

Combine with social networking to interact with consumer.Organizations official Twitter profile and Facebook can promote new

products and services directly to the consumer.

Email marketing will help build brand loyalty. Organizations can measure how

effective emailing is through:

Creating mailing lists for customers to be sent information about thebrand and upcoming products, customers can choose themselves tobe apart of this.

This can help build a sense of trust and commitment to the customer.Emails can also provide exclusive discount codes in which the

organization can monitor how successful these are.Consumers can choose from newsletter, to discount offers or specific

emails tailored to a product range.

Social media is a good way to gage the popularity of a brand amongst its

customers. We can also view product reviews and opinions on thesesites.

This goes hand in hand with Internet advertising, clickableadvertisements can be shown on the L'Oral Facebook page, or beautyblogs.


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Part Three - Maintaining Customer RelationshipsDiscussion Paper

The purpose of this discussion paper is to outline how conflict between internal relationshipswithin L'Oral can impact the company in the negative way. It will also summarize some

achievable solutions the company can adopt when dealing with conflict between differentseparate departments of the organization.

Findings indicate that conflict can arise in many different forms amongst the organizationwith lack of communication being a major factor. Examples being the lack of similar goalsand poor break down in communication between the marketing and finance department.

To conclude solutions can be achieved by, monitoring growing conflict and taking immediateaction. Various strategies such as developing interpersonal skills, better organizationalstructure and leadership can be considered.

Background Information

Conflict comes in many forms within the workplace and can arise in all departments of theorganization. For example the finance department will be concerned with detailedbookkeeping. In contrast the marketing department will want to bring creativity to thecompany regardless of funds. Big corporations such as L'Oral may think of departments asseparate entities, barriers are then built between each department often with littlecommunication and understanding amongst them.

We can also look at other sections such as the manufacturers, which have less attachment tothe company. They are not fully aware of the wants and needs of their customer and mainly

focus on their own sales(4 key steps solve manufacturer & distributor conflicts, 2010)8.

This can result in other problems such as incorrect pricing; mistakes in the manufacturing

process resulting in slow deliveries and bad communication. L'Oral will expect themanufacture to adhere to strict requirements such as being on time and the products arrivingin a certain condition. Whilst manufacturers will expect the organization to have realisticexpectations and willingness to a build a relationship with them.

Summary of the main issue

Conflict can be between any departments within the organization, mostly withinsections of the company that dont normally communicate directly.

Conflicting goals and budgets. A break down in communication. Can cause problems with customer service.

Recommendations for Resolving Conflict

L'Oral must monitor any growing conflict within the company as this reflects on theircustomer service and reputation if left unsolved. For example if the distribution process wentwrong and the customer was unable to get next day delivery, employees providing customerservice may be unable to answer customer enquiries and deal with requests effectively. This

may cause confusion amongst customers and potential destroy the organizations reputation.

8Sell More: 4 Key Steps Solve Manufacturer & Distributor Conflicts. (2010, August 25). Retrieved July 16, 2012 fromhttp://www.mfrtech.com/articles/3799.html
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Essential information should be communicated effectively so that all employees should havea basic fundamental knowledge of operation within the organization. This means no

confusion over any of the departments, well-informed staff and customers.

Proposed strategies

Introductory certificate in marketing (2012)9 distinguished some strategies into managingconflict. These are as follows;

To develop interpersonal/group process skills i.e. to communicate with otherteam members allowing conflict to be worked through in a constructivemanor as well as gain a better understanding of other view points within theteam.

Good leadership and management in the form of being responsive and readyto assist when conflict arises.

More emphasis on organizational processes such as authority structure andthe functioning of the organization itself.

More clarification on goals and objectives. Refinement of role definitions and performance standards within the

company, this can help to reduce misunderstandings and smooth over anyhostility.

Conclusion:

A conclusion to conflict can be reached through administering a series of solutions such asdeveloping employees communication skills with other workers; this could be done through

team building workshops or organizational meetings. Good leadership and management arealso essential for clear goals to be accomplished. When the message is clear employees will

aim towards the same goal, and workers will more informed and also harder working.

Overall this will result in a better working environment for employees, reflect upon theirattitude and productivity. When this is achieved customer service will improve and customerswill continue to view the brand in a positive light.

To Summarize

L'Oral monitors growing conflict. When conflict grows, the organization will take action. Various solutions can be put into practice (team building, meetings, checks on

departments, reinforcement of corporate goals, better leadership). Keep solutions ongoing in order to create a better working environment all year

round.

Record progress in these solutions and continue to monitor any other conflict.(Word Count729)

9Introductory certificate in marketing. (2012). London: BPP Learning Media Ltd.


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Part Four - Communication Skills

The aim of this section of the report is to outline the importance of time management andreflect upon my own experience of this matter in light of my findings.

My key findings on time management

This particular article goes in-depth into how manage your time in the best way possible withpractical solutions. 5 ways to find time in your tight schedule (Peters, 2013, p.29)10 claims the

top five ways to managing your time are as follows;

Getting active(One U.K study of 200 people found that people werehappier, less stressed and more productive on the days they exercised)

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Planning (Plan ahead of time to keep ahead of future goals and keep yourdepartment new and fresh).

Sleep (An adequate amount of sleep increases attention span and ultimatelyproductivity).

Professional Development (Keep on top of training by participating inlearning and development programs).

Time off(Give yourself time to rest and take a break. Not only does thislessen the stress but it will allow you to be inspired and look at things from adifferent perspective).

Building upon this more basic time management tips are included in (Easy time-management tips, 2011)12 such as making to do lists, making sure work is of a high qualityrather than quantity and prioritizing more important tasks.

Reviewing and identifying for self-improvement

To get a better understanding of my personal management skills I took an online test HowGood is your Time Management13 (see appendix 2). The test asked a variety of questionssuch as Do you set asidetime for planning and scheduling? and Are you stressed aboutdeadlines and commitments? both of which I answered very often. The test scored me at 47putting me in the first band in which I manage my time very effectively. Below this the scorethen gave me individual marks on goal setting, prioritization, managing interruptions,procrastination and scheduling. Goal setting and procrastination were my weakest scores andtherefore I should focus improving on these. The test gave the following suggestions;

To combat procrastination, consider rewarding yourself for getting jobs done.

Continue to remind yourself the consequences of not getting certain jobs finished. Time and effort put into setting goals will save on time in the long run. Setting personal goals can also reduce stress and frustration.

Reflecting upon the test I would feel I would benefit from creating ordered schedules of work.This is something I adopt during exam period, creating a clear structure of my studies is easy

10Peters, D. (2013, January/February). Squeezed for time. CMA Magazine, 29-30.

11Peters, D. (2013, January/February). Squeezed for time. CMA Magazine, 29-30

12Easy time-management tips. (2011). Retrieved July 20, 2013, from the NHS website:http://www.nhs.uk/Conditions/stress-anxiety-depression/Pages/time-management-tips.aspx

13How Good is Your Time Management? Retrieved August 16, 2013, from

http://www.mindtools.com/pages/article/newHTE_88.htm
http://www.nhs.uk/Conditions/stress-anxiety-depression/Pages/time-management-tips.aspxhttp://www.nhs.uk/Conditions/stress-anxiety-depression/Pages/time-management-tips.aspxhttp://www.nhs.uk/Conditions/stress-anxiety-depression/Pages/time-management-tips.aspxhttp://www.nhs.uk/Conditions/stress-anxiety-depression/Pages/time-management-tips.aspxhttp://www.nhs.uk/Conditions/stress-anxiety-depression/Pages/time-management-tips.aspxhttp://www.nhs.uk/Conditions/stress-anxiety-depression/Pages/time-management-tips.aspx


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to follow, particularly in a time when I can become very stressed. As well as this I will takemore care to think over why I am doing certain tasks and what the outcome will be in order to

avoid overly procrastinating.In a professional environment I find frequent training useful to keep me engaged. Whilst

working at Waitrose as a customer service assistant being behind the tills, it was easy for meto become more relaxed and slow down in my role. I was able to update my training everyfew weeks this allowed me stay on top of my goals as well as refresh my memory and learnnew procedures.

With these considerations in the future I will give myself time to plan out my tasks in detailand pace myself. I will also benefit from reviewing my time management skills regularly inorder to improve.

(Word Count599)


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Bibliography

Easy time-management tips. (2011). Retrieved July 20, 2013, from the NHS website:

http://www.nhs.uk/Conditions/stress-anxiety-depression/Pages/time-management-tips.aspx

Facial Skincare UK May 2013:Issues in the market. (2013). Retrieved July 2nd, 2013, fromhttp://academic.mintel.com/display/638082/

How Good is Your Time Management? Retrieved August 16, 2013, fromhttp://www.mindtools.com/pages/article/newHTE_88.htm

Introductory certificate in marketing. (2012). London: BPP Learning Media Ltd.

Kennaugh, C. (n.d.). Choose a cost-effective market research technique. Retrieved July 2nd

, 2013, from

Microsoft office website:http://office.microsoft.com/en-us/project-help/choose-a-cost-effective-market-research-technique-HA001142573.aspx

Mann, R. (2013).LOral confirms strong growth in sales and profits for 2012. Retrieved August 17,

2013, fromhttp://www.moodiereport.com/document.php?c_id=29&doc_id=34158

Mintel. Retrieved July 2nd, 2013

, fromhttp://www.mintel.com

Pebbles, L. (2013).A LITTLE DISAPPOINTED. Retrieved July 2nd

, 2013 from

http://www.whatihearttoday.com

Peters, D. (2013, January/February). Squeezed for time. CMA Magazine, 29-30.

Sell More: 4 Key Steps Solve Manufacturer & Distributor Conflicts. (2010, August 25). Retrieved July

16, 2012 fromhttp://www.mfrtech.com/articles/3799.html

Taylor, R. (2012, July 14). Beauty map of Britain: Revealed, the skin care divide between London

ladies and Yorkshire lasses. The Daily Mail. Retrieved July 2013 fromhttp://www.dailymail.co.uk.
http://www.nhs.uk/Conditions/stress-anxiety-depression/Pages/time-management-tips.aspxhttp://www.nhs.uk/Conditions/stress-anxiety-depression/Pages/time-management-tips.aspxhttp://academic.mintel.com/display/638082/http://academic.mintel.com/display/638082/http://www.mindtools.com/pages/article/newHTE_88.htmhttp://www.mindtools.com/pages/article/newHTE_88.htmhttp://office.microsoft.com/en-us/project-help/choose-a-cost-effective-market-research-technique-HA001142573.aspxhttp://office.microsoft.com/en-us/project-help/choose-a-cost-effective-market-research-technique-HA001142573.aspxhttp://office.microsoft.com/en-us/project-help/choose-a-cost-effective-market-research-technique-HA001142573.aspxhttp://www.moodiereport.com/document.php?c_id=29&doc_id=34158http://www.moodiereport.com/document.php?c_id=29&doc_id=34158http://www.moodiereport.com/document.php?c_id=29&doc_id=34158http://www.mintel.com/http://www.mintel.com/http://www.whatihearttoday.com/http://www.mfrtech.com/articles/3799.htmlhttp://www.mfrtech.com/articles/3799.htmlhttp://www.dailymail.co.uk/http://www.dailymail.co.uk/http://www.dailymail.co.uk/http://www.dailymail.co.uk/http://www.mfrtech.com/articles/3799.htmlhttp://www.whatihearttoday.com/http://www.mintel.com/http://www.moodiereport.com/document.php?c_id=29&doc_id=34158http://office.microsoft.com/en-us/project-help/choose-a-cost-effective-market-research-technique-HA001142573.aspxhttp://office.microsoft.com/en-us/project-help/choose-a-cost-effective-market-research-technique-HA001142573.aspxhttp://www.mindtools.com/pages/article/newHTE_88.htmhttp://academic.mintel.com/display/638082/http://www.nhs.uk/Conditions/stress-anxiety-depression/Pages/time-management-tips.aspx


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APPENDIX 1

Organization Summary

Organization Name L'Oral

SizeE.g.

s turnover Number of employees

The L'Oral group is the worlds largestcosmetics and beauty company.

Sales of22.46 billion for 2012

2012 was a good year for LOral on many

fronts. The group achieved strong salesgrowth, and once again demonstrated its

ability to outperform the beauty market, and

to gain market share, even in the moredifficult markets of Western Europe and theUS

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Type

E.g.

Profit/non-profit Local/national/global Legal entity

ProfitWorldwideGlobal(Head office in Paris, USA headquarters inNew York City)

Products/services/supplied Cosmetics and Beauty

(Skincare, Sun protection, Make-up, haircare)

Customer baseE.g.

B2B/B2C Distributors & end-users Types of enduser customer

B2CBecause youre worth itBuying on behalf of themselves

B2BSalon owners

All ages from teenagers to elderly. Maturepeople targeted with anti-ageing skincare.

CompetitorsL'Oral dominates most of the cosmeticindustry, owns luxury brands such as

(Lancme, Urban Decay and Shu Uemura)and high street brands (Garnier, Maybelline

and Essie) to name a few.

Major competitor is Este Lauder, owns otherhigh - end makeup brands (M.A.C, Tom

14Mann, R. (2013). LOral confirms strong growth in sales and profits for 2012. Retrieved August 17, 2013, from

http://www.moodiereport.com/document.php?c_id=29&doc_id=34158
http://www.salesforce.com/uk/customers/stories/loreal.jsphttp://www.salesforce.com/uk/customers/stories/loreal.jsphttp://www.salesforce.com/uk/customers/stories/loreal.jsphttp://en.wikipedia.org/wiki/Est%C3%A9e_Lauder_(person)http://www.moodiereport.com/document.php?c_id=29&doc_id=34158http://www.moodiereport.com/document.php?c_id=29&doc_id=34158http://www.moodiereport.com/document.php?c_id=29&doc_id=34158http://en.wikipedia.org/wiki/Est%C3%A9e_Lauder_(person)http://www.salesforce.com/uk/customers/stories/loreal.jsphttp://www.salesforce.com/uk/customers/stories/loreal.jsphttp://www.salesforce.com/uk/customers/stories/loreal.jsp


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Ford, Bobbi Brown and Clinique).

Other important stakeholders Global Employees (Rates of pay,

communication, welfare).

Customers (Customer care, ethicalproducts, quality of the product).

Investors (return on investment). Trade Unions (Working for higher

pay rates and better workingconditions).

Environment (Factorys overseas,pollution and how does this effect theenvironment around them).


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APPENDIX 2

Time Management Quiz Results (fromwww.mindtools.com)
http://www.mindtools.com/http://www.mindtools.com/http://www.mindtools.com/http://www.mindtools.com/


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understanding customer relationships

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