Dissertation

Dissertation Proposal: Customer Relationship Management

Chapter 1: Introduction and Background

The research aims at examining the impact of customer relationships on the acquisition of new potential customers and the retention of current customers. As explained by Khodakarami and Chan (2014), customer relationship management relates to how companies control and analyze their interactions with current and potential new clients through the use of a combination of technologies, systems, strategies and practices embedded in their customer management practices. At its very core, CRM is aimed at helping organizations and business enterprises build a strong relationship with their customers that, consequently, create solid loyalty and retention.

Since retention and customer loyalty are both aspects that affect the revenue of a company, CRM is a vital management strategy that impacts the overall bottom line of the company, including the profits and general financial performance. The proposal also aims to understand how customer relationship management improves the growth of sales growth in companies and developing service relationships. A specific focus of the project is how CRM is used by the largest retailing companies, Walmart and Kroger, in acquiring and retaining their customers, and how a proper CRM in place boosts the financial performance of these companies.

Research Aim and Objectives

To determine how customer relationship management impacts how the retail industry in the United States acquires and retains its customers, with a specific focus on Walmart and Kroger, which are considered some of the largest retail chains in the country and beyond. The aim of the study proposal is to analyze and examine how customer relationship management affects the acquisition and retention of customers in the retail industry of the United States.

This study investigate the value of customer relationship management in the industry and identify the contribution of strategies and activities towards increasing the attraction customers as well as the promotion of the rising value of the industry. Overall, this study aims at providing a comprehensive view of customer relationship management and investigating the customer relationship management activities that online purchase usually engages in and how the management activities are used to improves satisfaction for the customers. Besides, it aims to find out how these activities have had a significant contribution to the increase in the value of the company.

Research Objectives

· To determine the significance of customer relationship management to the retail industry in the United States, with a specific focus on Walmart and Kroger as case study examples.

· To determine and evaluate the relationship between customer acquisition and customer retention and customer relationship management.

· The evaluate how customer relationship management, through the acquisition of new customers and retention of the current ones, impact the financial performance of the retail industry, with a specific focus on Walmart and Kroger, leading retailing brands in the United States.

Chapter 2: Literature Review

Binsar Kristian (2014) and Osman and Sentosa (2014) explain that one of the most vital components of business has been how it forges and maintains relationships with its customers. The significance of a reliable and competent customer relationship management system cannot, therefore, be underestimated. Since the relationship aspect of the customer, management is an indispensable component of business, not just today. Still, even from the past, companies must figure out the best way to do it to impact the overall bottom line of their organizations.

As supported by Khodakarami and Chan (2014), creating a long-lasting bond with the currently existing customers and working towards acquiring new potential ones ensures that the business is always forging keeping old relationships while forging new ones. According to Santouridis and Veraki (2017), companies have used customer relationship management in the past to manage contacts, collaborate with clients, and systemize how these interactions help in keeping and maintaining relationships. Through the use of data and systems, we determine past literature on how CRM has been used primarily across all sectors, and pay special attention to the retail industry.

As the competition in the retail industry becomes more advanced, giant retailers must forge significant relationships with their customers if profitability is to be achieved and maintained. According to Khodakarami and Chan (2014), with the sharp increase and growth of online and m-shopping retailers in recent years, customer relationship management systems and technologies are going through a progressive evolution. Most providers and users of the CRM technology have recognized that the emergence of the e-commerce retailing industry is putting a lot of pressure on traditional-based retailers like Walmart, where customers have to visit their stores to make purchases (Khodakarami & Chan, 2014).

As the competition in the retail space becomes fiercer, the need for improving customer experience has grown steadily, and more retailers in the industry have adopted customized CRM systems to boost their relationships with customers. Platforms like Magento and Salesforce Commerce Cloud are being used by retailers to revolutionize retail customer experience on digital platforms. Choosing the right CRM technology and an appropriate deployment strategy is critical in ensuring that the business gets value for its money (Khodakarami & Chan, 2014).

Chapter 3: Research Methodology

Introduction

This chapter discusses the research methodology and design that will be used to achieve research objectives. The research design is described and a justification for the chosen research design, sampling, framework, sampling technique and sample size are provided. Also, the chapter discusses data collection instruments, data collection procedures, and data analysis techniques to be employed to determine the impact of customer relations management in acquisition and retaining of customers.

The researcher intends to use a mixed-methods design, in which both qualitative and quantitative approaches are used to collect the data. A vital benefit of the mixed methods approach is to allow the researcher to systematically will enable the integration of both quantitative and qualitative data within one system of conducting an investigation or program inquiry. A descriptive study design is the most appropriate and effective method to observe how the two giant retailers- Walmart and Kroger, are using customer relationship management to advance their relations with customers and hence boost their financial performance.

Research Design

The study will employ a mixed method research based on non-experimental cross-sectional survey of selected retail stores in the United States. Mixed methodology allows researchers to blend aspects of qualitative and quantitative approaches. Mixed methodology research design allows researchers to compensate the weaknesses of one research approach with the strengths of the other approach to attain the best outcomes (Creswell, Klassen, Clark & Smith, 2011). Non experimental cross sectional survey is considered appropriate because it enables a researcher to collect data from research participants at a given point in time. Also, it provides objective data that help in determining significant relationships among variables (Blumberg, Cooper & Schindler, 2014). A non-experimental study is a quantitative study without variable manipulation. The descriptive design is appropriate for this study because it emphasizes defining and explaining the “what” aspect of a research problem or phenomenon, which is the case in this proposal. Secondly, the descriptive design is chosen for the study because it employs both quantitative and qualitative aspects of data collection and research. It can collect quantifiable and quality information or data on the subject being studied. For instance, in this research proposal, the focus is, “what is the impact of customer relationship management in the retail industry.” The research question or aim is focused on the “what” aspect of the proposal and not “why.”

Cross sectional studies have been proven effective in relationship studies because of their ability to capture features of a population in their natural occurrences. According to Saunders, Lewis and Thornhill (2009) cross sectional studies are versatile and therefore provide accurate approach of assessing information while at the same time allowing a researcher to ascertain whether there are major casualties among variables or not. Blumberg, Cooper and Schindler (2014) also indicate that cross sectional studies allow researchers to collect uniform as well as comparable data that do not only capture respondents’ similarities, but also differences across sampled organizations to enrich a study’s findings. It is expected that a cross sectional design will support the study’s objectives and allow logistical flexibility needed for data collection and data analysis.

Study Population

Creswell et al. (2011) describe population as the elements that meet the need for inclusion in a given study. Generally, there are two categories of population: target population and accessible population. Gall, Gall and Borg (2014) indicate that the former comprises of all members of a hypothetical set of persons, objects and/or events from which a researcher seeks to generalize findings of a study. The accessible population for this study will comprise of Wal-Mart and Kroger stores serving in the United States. For purposes of the study, research participants will consist of workers in middle and senior level of management within the organization’s customer relationship management or their equivalent.

Sample Size and Sampling Technique

The study use a census technique in selecting Walmart and Kroger retail stores for the study. The population for the study will be 30 retail stores- 15 Walmart retail and 15 Kroger stores. Cochran (2007) asserts that although census approach is inappropriate for large population because of cost considerations, the approach is suitable for small populations of 200 respondents and below. Moreover, a census technique reduces sampling error and provides appropriate data on all subjects in a population.

The study uses a purposive sampling technique in selection of research participants. Ritchie, Lewis, Nicholls and Ormston (2013) indicate that purposive sampling technique involves choosing members of a particular sample to represent a location. In this regard, the study seeks to collect data from 150 middle and senior employees in customer relations departments at Walmart stores and Kroger Stores.

Data Collection Instruments

For this study, a five-point Likert scale structured questionnaire will be used for data collection. Saunders, Lewis and Thornhill (2009) indicate that because respondents are asked to answer similar questions, the instrument provides an efficient means of collecting responses from a large pool of respondents before quantitative analysis. Blumberg, Cooper and Schindler (2014) agree that a questionnaire has numerous advantages including: low cost even if a large universe is involved, free from interviewer’s biases, and convenience. Moreover, respondents can answer in their own words and have adequate time to think about their answers. In view of the merits and the need to collect more data, a combination of open and close ended questions will be administered to senior customer relationship managers at Walmart stores and Kroger stores. Closed ended questionnaires will use five-point Likert scale measurement to rank the degree of agreement and disagreement among respondents.

Data Collection Procedure

The questionnaires will be administered with the help of research assistants. Blumberg, Cooper and Schindler (2014) support adoption of questionnaires over personal interviews because self-administered surveys are less costly. One hundred and fifty questionnaires will be administered to one senior employee and a middle manager at from each of the 30 retail stores in the study. Because of the confidentiality and sensitivity nature of the information sought, the questionnaires will be designed in a way that the respondents will not be required to reveal not only their names, but that of their employers as well.

Pilot Test

A pilot test will be carried out in order to determine the questionnaire’s validity and reliability in collecting data for the objective of the study. A pilot study helps in testing the design and instruments used in a study before conducting a research. The process involves performing an initial test of data gathering instruments and process to detect and eliminate errors. In essence, the purpose of a pilot test is to determine the accuracy as well as the appropriateness of a research design and instrumentation (Blumberg, Cooper & Schindler, 2014). Since researchers aim to have consistent, clear, and understandable questionnaires, it will be important to measure their validity and reliability. Blumberg, Cooper and Schindler (2014) indicate researchers do not have to statistically select respondents in a pilot study to test the validity and reliability of an instrument. In this regard, only 10 percent of the questionnaires will be tested to determine their relevancy and effectiveness. Hence, 15 questionnaires piloted to respondents will not be part of the sample size.

Research Validity and Reliability

Validity relates to whether or not a questionnaire is measuring what it seeks to measure. It is the degree of congruence between realities and explanations of a phenomenon (Bryman & Bell, 2015). Although it is difficult to establish validity, demonstration of validity is essential in a research (DeVellis, 2016). This study will use construct validity and content validity. For content validity, the questionnaires will be subjected to examination by three randomly selected customer relationship managers. The managers will be asked to assess the content of the questionnaires for relevance, meaningfulness, and clarity. Based on their evaluations, appropriate adjustments will be made before distributing them for data collection. To ensure construct validity, questionnaires will be divided into different sections so that each section assesses information for each specific objective. Also, each section will be closely tied to the study’s conceptual framework. Comrey and Lee (2013) posit that establishing construct validity involves verification of predictions arrived at concerning test scores. Factor analysis will be used to test construct validity.

Bryman and Bell (2015) refer to reliability as consistency of responses. It is the level to which an instrument uses the same measures under the same condition. There are different approaches to reliability testing including test-retest reliability, equivalent forms reliability, as well as internal consistency reliability. Internal consistency reliability will be conducted on 15 questionnaires to establish their relevancy and effectiveness. Reliability will be tested by having 15 randomly selected senior customer relations manager completing the questionnaires. The respondents will not be included in the final sample to control response biasness. The questionnaire responses will be entered into the statistical package for social sciences and the Cronbach’s alpha coefficient for reliability assessment. Potgieter, Saayman and Du Plessis (2015) assert that Cronbach’s alpha result of less than 0.60 imply lower acceptance levels.

Data Analysis

Data from the questionnaires will be coded and responses on each question put into main themes. The statistical packages for social sciences will be used to analyze quantitative data collected from questionnaires while ATLAS will be used to analyze qualitative data. Analysis of Moment Structures version 18 will be used for confirmatory factor analysis, structural equation model, and generation of fit models. It will also be used for initial explanatory factor analysis and path analysis. Statistical measures such as percentages, means, and standard deviation will be used to analyze descriptive statistics.

The study also perform two tests of assumptions including multicollinearity and correlation. Olivia and Ilie (2013) refer to multicollinearity as the undesirable situation characterized by strong correlation among independent variables. Variance inflation factor will be used to test for multicollinearity. A variance inflation factor of 1 will imply that there is no correlation between two independent variables. Multicollinearity will exist if variance inflation factor for one the variable is at least 5. Correlation analysis will be carried out to test the correlation of the study’s variables. Correlation is normally used to assess the relationship existing among various variables. The factors are considered different measures of different variables if correlation values are far from 1 or -1 (Pallant, 2010). Pearson correlation will be used for correlation testing in the study.

References

Binsar Kristian, P. (2014). Analysis of Customer Loyalty through Total Quality Service, Customer Relationship Management and Customer Satisfaction. International Journal of Evaluation and Research in Education, 3(3), 142-151.

Blumberg, B. F., Cooper, D. R., & Schindler, P. S. (2014). Business research methods. New York, NY: McGraw-Hill education.

Bryman, A., & Bell, E. (2015). Business research methods. New York, NY: Oxford University Press.

Cochran, W. G. (2007). Sampling techniques. Hoboken, NJ: John Wiley & Sons

Comrey, A. L., & Lee, H. B. (2013). A first course in factor analysis. London, LN: Psychology Press.

Creswell, J. W., Klassen, A. C., Plano Clark, V. L., & Smith, K. C. (2011). Best practices for mixed methods research in the health sciences. Bethesda, MD: National Institutes of Health

DeVellis, R. F. (2016). Scale development: Theory and applications (Vol. 26). Thousand Oaks, CA: Sage publications.

Gall, M. D., Gall, J. P., & Borg, W. R. (2014). Applying educational research: How to read, do, and use research to solve problems of practice. New Jersey, NJ: Pearson Higher Ed.

Osman, Z., & Sentosa, I. (2014). Influence of Customer Satisfaction on Service Quality and Customer Loyalty Relationship in Malaysian Commercial Banking Industry. International Journal of Economics, Finance and Management, 3(2).

Olivia, B., & Ilie, P. (2013). A model to minimize multicollinearity effects. Annals of the University of Oradea, Economic Science Series, 22(1), 699-706.

Pallant, J. (2010). SPSS survival manual: A step by step guide to data analysis using the SPSS program. Österrike, Austria: Allen & Unwin Book Publisher.

Potgieter, M., Saayman, M., & Du Plessis, L. (2014). Key success factors in managing a visitors' experience at a South African international airport. Journal of Contemporary Management, 11(1), 510-533.

Ritchie, J., Lewis, J., Nicholls, C. M., & Ormston, R. (Eds.). (2013). Qualitative research practice: A guide for social science students and researchers. Thousand Oaks, CA: Sage.

Khodakarami, F., & Chan, Y. E. (2014). Exploring the role of customer relationship management (CRM) systems in customer knowledge creation. Information & Management, 51(1), 27-42.

Saunders, M., Lewis, P., & Thornhill, A. (2009). Research methods for business students. Essex, England: Pearson Education

Santouridis, I., & Veraki, A. (2017). Customer relationship management and customer satisfaction: the mediating role of relationship quality. Total Quality Management & Business Excellence, 28(9-10), 1122-1133.