Proposal for the Study of Marketing Strategies, Customer Relations Management, and Total Quality Management Performance of Indian Petrochemicals Corporation Limited (IPCL)


 


            The Indian Petrochemicals Corporation Limited (IPCL) is one of the pioneers in the petrochemical industry in India. It was incorporated in 1969 and it currently produces over 1.6 million tonnes of merchant products and generate turnover close to IN 100 billion (2004). With the aim to improve its operations further, the company has utilized the application of new marketing strategies, Customer Relationship Management (CRM), and Total Quality Management (TQM). The marketing strategies have helped IPCL to identify their target market and how to approach them strategically. With this, the company has sought to create markets for new products by educating potential customers on the benefits of these products and by working with them to create solutions for their petrochemical product needs. On the other hand, CRM has helped the company to maintain its customers, and TQM has contributed in building the reputation of IPCL as being a quality public sector petrochemical company. IPCL was India’s first public sector company to expand equity through public offer in India. In addition to this, IPCL has been blessed with many more achievements giving the company a strong reputation. However, with the objective to continuously improve the company, the company should conduct a research on their operations to find out which department is meeting its goals and which department is not.


 


 


Aims and Objectives


            The author finds the necessity to conduct a study because the author believes that performances of the departments concerned should be monitored in order to distinguish certain factors that need improvement in the company. The author proposes for a study that generally aims to learn how proper marketing strategy, quality and customer relations works for IPCL to enhance the company’s ability to successfully achieve its objectives and dominate the petrochemical market, not just in India, but also overseas. The study will specifically aim in identifying IPCL’s current quality model. The study should know if this model is effective or properly utilized. Furthermore, the study will evaluate the marketing strategies of the company in details. This will determine if marketing objectives are being met. Finally, the study will carry out an in-depth study of the essential ingredients of CRM and assess its strategies, underlying principles, and process of implementation for generating successful customer relationships to find out if there has been any lack in IPCL’s customer management that needed to be filled up. Basically, the study will evaluate the current performance of IPCL in marketing, customer relations, and quality management. The project’s main objective is to find out which division has been most effective in bringing the company to this level of success and also to find out where do other divisions lack so that the company’s can improve on them and reach the zenith of success.


 


 


 


 


Statement of the Problem


 


            The author proposes a study that generally aims in learning how proper marketing strategy, quality and customer relations works, or moreover, to evaluate the performance of the departments concerned. Specifically, the proposed study will try to answer the following queries:


 


            1.         What is the current quality model of IPCL? Does it meet the                                           performance that the company demands? What are its                                       achievements? Does it need to be improved?


 


            2.         Is IPCL successful in its marketing performance? Did the company                              improve its sales with the application of marketing strategy                                        projects? How effective are they?


 


            3.         What are the essential ingredients of IPCL’s CRM? Are strategies,                              underlying principles, and process of implementation for generating                       successful customer relationships of IPCL’s CRM effective?


 


            4.         What are the measures that need to be done after analyzing the                                   TQM, CRM and marketing strategies of IPCL? How crucial are                                   these results in the future of IPCL?


 


 


 


 


 


Review of Related Literature


 


 


Marketing


 


            Philip Kotler (Anonymous, 1999) carefully stated that the only winning strategy is to carefully define the target market and direct a superior offering to that target market. Furthermore, Kotler stated that the offering must be superior in one or more distinguishing ways: better quality, more features, lower price, and more value for the money. Otherwise the firm is offering an imitation of someone else’s product and lacks any original appealing qualities (Anonymous, 1999).


            Marketing can be described as the process of defining, anticipating, creating, and fulfilling customer needs and wants for product services (David, 2002). David (2002) stated that functions of marketing are: customer analysis; selling products/services; product and service planning; pricing; distribution; marketing research; and opportunity analysis. One of the strategies in customer analysis is to continually monitor present and potential customers’ buying pattern (David, 2002). In selling, strategies included are marketing activities such as: advertising; sales promotion; publicity; personal selling; sales force management; customer relations; and dealer relations (David, 2002). Among these tools, advertising is the most highly utilized. The overall advertising expenditures in the United States increased from 3.95 billion in 1999 to 0 billion in 2000, a 7 percent increase.  Examples of companies that utilize a huge amount of advertising are Amazon Books and CUD International. Both of these companies are paying million of dollars in sales commission and advertising fees in exchange for placement in high-traffic websites, search engines, and home pages of online service providers such as America Online (David, 2002). This shows that the Internet can be a strong marketing tool. 


            In analyzing environment, market and competitors, and customers, a company should: undertake a PESTLE analysis of the general influence on the
organization; undertake a competitor profile and identify the competitor’s advantages; explore the relationship between the organisation and its customers; identifying the importance of key factors for success in the environment; analyse individual competitors and their influence on strategy; identify the main international strategic competitive issues; explore and assess the importance of distributors; analyse the strategy implication of market segments; and position the product or service against competitors (Lynch, 2003).


            The strategy of IPCL on the other hand, is to create markets for new products by educating potential customers on the benefits of these products and by working with them to create solutions for their petrochemical product needs. Furthermore, it believes that it’s established national marketing network, with its focus on customer service, product quality and reliability of supply, provides us with a competitive advantage with its marketing strategies.


 


Quality


 


            Establishing quality is important in an organisation because it aims in acquiring the trust of the customers. Thus, the quality policy should be the concern of all employees, and the principles and objectives communicated as widely as possible so that it is understood at all levels of the organization. Practical assistance and training should be given, where necessary, to ensure the relevant knowledge and experience are acquired for successful implementation of the policy. Oakland (2003) cited from Deming that “quality should be aimed at the needs of the consumer, present and future.” Furthermore, he cited from Feigenbaum that “the total composite product and service characteristics of marketing, engineering, manufacture and maintenance through which the product and service in use will meet the expectation by the customer” (Oakland, 2003). Furthermore, Crosby stated that quality is “conformance to requirement” and Juran added that it is a “fitness for purpose or use” (Oakland, 2003).


            Bethke et al (1994) stated that in essence, TQM is a company-wide perspective that strives for customer satisfaction by seeking zero defects in products and services. Bethke et al (1994) added that making quality improvements was once thought to be the sole responsibility of specialists (quality engineers, product designers, and process engineers). Today, developing quality across the entire firm can be an important function of the human resource management (HRM) department. A failure on HRM’s part to recognize this opportunity and act on it may result in the loss of TQM implementation responsibilities to other departments with less expertise in training and development. The ultimate consequence of this loss is an ineffective peacemaking of the TQM strategy. Thus, according to Bethke et al (1994), HRM should act as the pivotal change agent necessary for the successful implementation of TQM.


            Bethke et al (1994) stressed that TQM, which has been adopted by leading industrial companies, is a participative system empowering all employees to take responsibility for improving quality within the organization. Instead of using traditional bureaucratic rule enforcement, TQM calls for a change in the corporate culture, where the new work climate has the following characteristics: an open, problem-solving atmosphere; participatory design making; trust among all employees (staff, line, workers, and managers); a sense of ownership and responsibility for goal achievement and problems solving; and self-motivation and self-control by all. The responsibilities of HRM in implementing TQM include: focus on customers’ needs; focus on problem prevention, not correction; make continuous improvements: seek to meet customers’ requirements on time, the first time, every time; train employees in ways to improve quality; and apply the team approach to problem solving (Bethke et al, 1994). In the case of IPCL, the company has already met this action. Training of manpower happens to be an integral component of the development strategy in quality and in other factors (Anonymous, 2004).


            In addition, the top management has also responsibilities in the TQM implementation process. These include: initiating agreement on goals and measures that cascade throughout the organization; providing the agreed resources (people, money, training, machines, etc.); assigning authority and establish deadlines to put resources into motion; monitoring progress in achieving goals, not to apportion blame, but to aim for improvement; and, measuring improvement and reward both the achievement of goals and the ways they are achieved (Bethke et al, 1994). Bethke et al (1994) stated that beyond modeling TQM, the HR department, with senior management’s support, can play a leading role in implementing a quality strategy across the firm.


            According to Brown et al (1994) stressed that the common mistakes in the implementation of TQM that waste time and money include: “measuring the wrong indicators; focusing on behavior instead of accomplishments; emphasizing courtesy instead of competence; disguising cost control as TQM; focusing on internal instead of external improvements; failing to identify key process variables; and ineffective benchmarking.” Furthermore, the authors stressed that TQM is not a program and should not be a separate entity from the rest of the organization which adds bureaucracy. Brown et al (1994) highlighted five suggestions for insuring that TQM is not perceived as a program: “Don’t give it a name or slogan; eliminate the banners, slogans, buttons; do one of two things either don’t appoint a chief quality officer or make it clear this is a temporary position phased out after a few years; don’t build a separate TQM department or organization that is responsible for the implementation of TQM; and don’t have separate committees to deal with quality related issues”.


            IPCL, in terms of quality, has already established its reputation by being Asia’s first corporate to pierce the sovereign ceiling in any form of external borrowing. Their EURO Convertible offer of US 5 million surpassed more than just the sovereign ceiling. It leveraged their corporate equity in the international context. It enabled them to tap a wide range of foreign investors.


 


 


Customer Relationship Management


            CRM is “an enterprise approach to understanding and influencing customer behavior through meaningful communications in order to improve customer acquisition, customer retention, customer loyalty and customer profitability” (Mehta, 2003). Furthermore, it is “a set of processes and technologies for managing the relationships with potential and current customers and business partners across marketing, sales and service regardless of the communication channel” (Mehta, 2003).


             (2003) stressed that intimate customer relationships offer the marketer several advantages. First, the relationship can create a committed customer. More than simply a repeat purchaser, the committed customer has an emotional attachment to the seller. These emotions can include trust, liking and believing in the firm’s ability to respond effectively and promptly to a customer problem. Committed customers can be viewed as company assets who are likely to be a source of favorable word-of-mouth referrals and are more resistant to competitors’ offers. Second, CRM relationships provide a point of leverage to realize economies of scope. Committed customers are often more receptive to line extensions. Leveraging the customer base can facilitate cross-selling complementary products as well as “selling up” to higher quality substitutes (Greco and Raggins, 2003). Third, in recent years, CRM’s potential to contain and reduce costs has been explored. CRM, in concert with other processes, can help reduce churn or turnover in a company’s customer base. Better customer management can result in lower sales and service costs, higher buyer retention and, thus, lower customer replacement expenditures (Greco and Raggins, 2003).


            According to Bielski (2001), the six indicators that CRM is working within an organisation is when: the organization is aligned around life cycle marketing; the offers are relevant and timely; the company has moved beyond historical data; the company can measure the relationship accurately; customer dismay is turned into customer delight; and the front-line personnel have the same understanding of objectives as your senior executives do.


            In IPCL’s case, it markets its petrochemical products throughout India directly to its customers and indirectly through its consignment agent network. They provide technical support to their customers through their product application centre located at Vadodara by conducting trials at customer premises and technical seminars and training courses for industry representatives. (Synthera, 2004). The company maintains its communication and assistance on certain villages that need such service (Synthera, 2004).


 


Scope and Limitation


           


            The proposed study will only focus on the variables customer relationship management, quality management, and marketing strategies of IPCL. It will only dwell on the company’s performance on the three variables and the recommendations will only be limited to those areas. Regarding the respondents, this proposed study will only conduct the research on employees in the Marketing Division, Customer Relation Department, and the department responsible in quality management, if one exists. Furthermore, the study will also conduct its survey on the top management of IPCL and other employees in the accounting section to determine the profit that the company acquires from projects in customer relations, quality management, and marketing.


            The outcome of this study will be limited only to the data gathered from books and journals and from the primary data gathered from the result of the questionnaire survey and interview that will be conducted by the researcher.


 


Overview of the Methodology


For this study, primary research and secondary research will be used. Primary research will be conducted using questionnaire surveys that will be sent to the employees of the Marketing Division, Customer Relationship Department, and Quality Management Department, if one exists. If there is no department that specifically handles TQM, questionnaires will be sent instead to the Human Relations Management (HRM). Furthermore, the top-management will also be surveyed as well as the several employees in the accounting division. Through this questionnaire survey, the researcher will hopefully get to know the performance level of all the departments mentioned. The researcher will also be conducting interview with certain respondents, particularly in the top-management and the management teams in the three departments, as well as in the HRM.


The questionnaires will be used to collect quantitative data and the interviews will be used to provide qualitative insights into the data collected. A questionnaire would be emailed to the concerned employees of IPCL
in order to gather information to achieve the objectives of the project.
Managers in the marketing division, quality management division and CRM
department would be advised to complete the questionnaire and
interview for more detailed information. The projects handled earlier, if any,
would be researched and analyzed in order to understand the intricacies
of the success and failure of the company. The questionnaires will be designed with a view to get answers that would determine the main objective of the study. All the questionnaires will be structured in a set and will be close-ended with multiple-choice questions. Some questionnaires will be descriptive.


This research will partially base its findings through quantitative research methods because it allows the research problem to be conducted in a very specific and set terms (1992). Besides, quantitative research plainly and distinctively specifies both the independent and the dependent variables under investigation ( 2002). It also follows resolutely the original set of research goals, arriving at more objective conclusions, testing hypothesis, determining the issues of causality and eliminates or minimises subjectivity of judgment (1996).


This study will also employ qualitative research method because it will attempt to find and build theories that will explain the relationship of one variable with another variable through qualitative elements in research. This permits a flexible and iterative approach. During data gathering the choice and design of methods are constantly modified, based on ongoing analysis. This allows investigation of important new issues about the CRM, TQM, and marketing strategies of the company and questions as they arise, and allows the investigator to drop unproductive areas of research from the original research plan.


Through this method, qualitative elements that do not have standard measures such as behavior, attitudes, opinions, and beliefs within the restaurants will be analyzed. Furthermore qualitative research is multimethod in focus, involving an interpretative, naturalistic approach to its subject matter. This means that qualitative researchers study things in their natural settings, attempting to make sense of, or interpret phenomena in terms of the meanings people bring to them.


The data collection instrument will be a structured questionnaire that will be based on Likert scale. A Likert Scale is a rating scale that requires the subject to indicate his or her degree of agreement or disagreement with a statement. By rating scale we mean the scales that are usually used to measure attitudes towards an object, the degree to which an object contains a particular attribute, (Like or dislike), toward some attribute, or the importance attached to an attribute.


The focus group discussion, on the other hand, will be conducted with the consent of the administrators.


The secondary sources of data will come from published articles from journals, books and related studies on the implementation of CRM, TQM and marketing strategies.


            For this research design, the researcher will gather data, collate published studies from different local and foreign universities and articles from social science journals; and make a content analysis of the collected documentary and verbal material.  Afterwards, the researcher will summarize all the information, make a conclusion based on the null hypotheses posited and provide insightful recommendations for the improvement of IPCL.


 


Feasibility, Time-Scale, and Presentation


 


            The study will be feasible in a sense that the company will participate because it concerns the improvement of their performance. Furthermore, the company’s senior employees have already extended their full support to successfully complete the project. Moreover, a close relative of the author has been working in IPCL for 29 years. This will allow access to the senior members of the company possible. They will be ready to give the required information and help that would be needed in the success of the research.


 


            The project is estimated to be finished within 4 months or more because the research will be utilised using quantitative and qualitative method. The survey process alone can eat up time, moreover the data gathering and analysis. Thus, the researcher will need the full cooperation of the respondents.


 


            The dissertation will be presented in written form, complete with data charts, plan presentation, results, conclusions, and recommendations.



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