The Dissertation on the Impact of CRM Systems on Organisational Performance of British Airways

Chapter 1

INTRODUCTION

1.1 Introduction

Each industry is subject to marketing elements which influences the company’s function and performance as a whole. Accordingly, such elements are the one’s attributed in determining whether the company has met their organisation objective and if they are able to satisfy their clients (Oliver, 1997). In this regard, there are several approaches which can be considered so as to sustain competitive advantage within the marketing environment. Some marketing strategies give emphasis in the long-term retention and satisfaction of the customers through the provision of products or services that directly suit their needs. While these marketing strategies have been used for various purposes within the customer life cycle, obtaining and maintaining customers remain its prime objectives. Currently, the use of such strategies had increased as businesses give more priority to their markets. In addition, changes in the consumer trends had caused the increased interest of businesses for the marketing strategy.

Superior customer service is a critical differentiator in an increasingly competitively marketplace. Companies that give customers what they want it will increase customer satisfaction and ultimately gain greater market share, generating more revenue and enjoying higher profitability (Ragins & Greco, 2003). In this regard, different organisation is trying to apply or implement systems that would enable them to provide good customer relationship as part of the marketing strategy. One of the technologically advanced systems that can be used is the Customer Relationship Management.

The combination of speed and storage capabilities of computers, along with the connectivity of the Internet, provides a powerful linkage among several functions of the company. CRM systems range from the simplest contact-management systems which focus on assisting individual salespeople to most complex enterprise-wide and cross-enterprise systems. The main role of CRM systems is to connect the suppliers and the customers. CRM systems ensure that customers have a consistent experience across multiple sales channels.

An effective implementation of a CRM system meets the needs of the customer, the salesperson and the company by means of utilizing system elements in several, different ways. Such elements and its implementation mirror the success or failure of the marketing design of any organisation as the management-centered functions of CRM system (Zoltners, 2001). Although, there are many literatures that give emphasis on customer relationship management and organisational performance, there is still a need to investigate the issue on how CRM impact the organizational performance of an organization In this regard, the main goal of this study is to explore this issue and will attempt at identifying the impact of CRM systems on the organizational performance of the company, specifically the British Airways.

1.2 Background of the Study

1.2.1 Overview of British Airways

British Airways is regarded as one of the United Kingdom’s largest international scheduled airline. It is known for being such because of the strategies imposed by the management of the airline industry. Herein, the generic strategies used by British Airways are differentiation and focus strategy. The differentiation strategy is an integrated set of actions by a firm to produce goods or services (at an acceptable cost) that customers perceive as being different in ways that are important to them (Porter 1980; Ireland, Hitt & Hoskisson 2003). Successful differentiation strategy can be built on many factors, including design, brand image, reputation, technology, product features, networks, and differentiated customer service, and true differentiation should be hard for competitors to imitate. On the other hand, focus strategy concentrates on a narrow segment and within that segment attempts to achieve either a cost advantage or differentiation. The premise is that the needs of the group can be better serviced by focusing entirely on it. A firm using a focus strategy often enjoys a high degree of customer loyalty, and this entrenched loyalty discourages other firms from competing directly.

Because of their narrow market focus, firms pursuing a focus strategy have lower volumes and therefore less bargaining power with their suppliers. However, firms pursuing a differentiation-focused strategy may be able to pass higher costs on to customers since close substitute products do not exist. Firms that succeed in a focus strategy are able to tailor a broad range of product development strengths to a relatively narrow market segment that they know very well.

One of the approaches used by British Airways as part of its differentiation and focused strategy is the way it focused attention to the executive-class passengers. This bias in focus is ascribed by the frequency of travelling done by the executive class travellers. Accompanying the cost associated with the travel of executive class passengers the magnitude of revenues can be intensified. A simple glimpse of the British Airways Official Website would reveal the master plan of the airline. The business class passengers are focused for special packages upon their choice of travelling with the airline. On each travel stop the business class passenger makes, points are earned that qualify the passenger to various offers and gifts. Incentives to regular executive customers of British Airways have been responsible for earning the airline customer loyalty. BA gives away holiday packages, travel discounts, and unmatchable indulgence by providing the executive class with Chauffeur drivers, Express rail tickets during international travel and hotel vouchers and what not. Besides the executive class, regular customers too are catered with an exceptional level of care (British Airways Official Website 2008)

The operations of management at BA has assures fresh and rich food to be stocked and served to passengers while they are onboard the flights. The decision taken by the budgeting department to restructure and cutting on fuel costs have helped BA focus intensely on the quality of services provided onboard to maintain a positive repute amongst the customers.

The marketing strategy BA is complete customer orientation. The company seeks to cater each of the varied type of customers. The airline has initiated routes to a wide range of destinations all around the globe with main focus on flights from the United Kingdom to the United States (British Airways Official Website 2003). Backing a network of destinations are the competitive tariffs hosted by British Airways. Competitors like Virgin Atlantic Airways do not offer the customers as good a variety of destinations (Fink & Harrich 2000) as the size of BA is 15 time greater than Virgin (Fedrick 2002).

Another competitive advantage requires from British Airways to setup a global electronic network to bring the services closer to the target customers of the airline. A 24-hour customer support group corresponds to customer queries. Online ticket reservation and flight schedules open up a great domain of options available to the prospective travellers (British Airways Official Website 2008).

1.2.2 CRM Overview

Customer relationship management, better known as CRM, is a set of strategic practices that purports finding, marketing to, selling to, and servicing customers. CRM is a broadly used term that covers different functions and concepts of organisations in aspects of operational, collaborative, and analytical frameworks. There are many benefits the company could derive upon implementation of CRM systems. These benefits are: customers, suppliers and co-suppliers linkage, access, hassle-free communication, and reduction of implementation cycles, centralised and regularised systems upgrade, centralisation of maintenance and enhancement expertise and homogenisation of CRM technology (Zoltners 2001).

The elements of the CRM system include customer encyclopedia – customer and prospect profiles, needs; product encyclopedia – product profiles, product configuration tools, references; pricing and proposals – pricing, proposals, presentations; ordering, planning and tracking – orders, results, activities; training – product, customer management, planning; administration – expense, commissions, general tools; analysis – sales analysis, forecasting, office suite; communication – electronic mail, intranet, internet, telemarketing tools; system enhancement – configuration, maintenance, upgrade; and customer support – frequently asked questions (opere citato).

The management-centered functions of a CRM system is consist of reporting and forecasting of sales, communicating with salespeople and other company personnel, capturing and disseminating best practices, reporting sales force activity, comparing actual results with forecasts, designing and managing sales territories, analysing marketing and sales programs in terms of market, territory, product, customer type, price and channel, and enhancing and streamlining work flow and processes (opere citato).

1.2.3 CRM and Marketing

The goal of CRM in marketing is to move C-level customers up to B-level customers and to move B-level customers up to A-level customers and to motivate A-level customers to stay in that position. CRM initiatives ensure that the company is the customer’s first choice. The role of CRM systems in marketing is to utilise the product and campaigns to reach the masses through targeting and establishing relationships. CRM embraces the idea of a highly-individualised marketing or a one-to-one marketing process. In this way, markets are carefully segmented and responded to. Likewise, this process could build a communication based on customised products and tailored messages. The concept of one-to-one marketing comes together with permission marketing. Permission marketing implies that the customer will have the final say regarding when and for what reason he or she will accept to be interrupted. Hence, there must a value for him or her for such an interruption (Dyché 2001).

If there are management-focused CRS functions, there are also salesperson-focused. The specific functions of CRM system for this group are comprised of the following: management of accounts and distributors, tracking sales by customer, planning and reporting sales calls, automating sales plan and tactics, answer requests for product literature, track leads (management of a tickler file), manage contacts, make computer-based presentations, access competitive intelligence online, enter orders, check inventory and order status, report and check expenses, calculate incentive earnings, word processing, manage a personal calendar, get geographic information and routing, use electronic mail, access the Internet and receive training (Zoltners 2001).

1.3 Research Objectives

The development of Customer relationship management has been very essential to many business organisations, in ensuring good customer relations at all cost. In this regard, this dissertation generally aims on identifying the impact of CRM on organisational performance of British Airways. In particular, this study aims to achieve the following objectives:

1. To investigate the context of Customer Relationship management and its aims and objective in the organisational performance.

2. To identify the fundamental context of strategies and customer satisfaction in British Airways.

3. To determine the effect of influence of Customer relationship on the performance of the organisation within the perception of the customers and management.

4. To recommend a sound conclusion which supports the outcome of the analysis and literature review gathered.

1.4 Research Questions

Given the aims and objective of this research, this study attempts to answer the following queries:

Ø How important is the implementation of CRM systems in organisational performance of British Airways?

Ø Do customer relationship management affects the general performance of British Airways?

Ø What are the benefits of CRM to British Airways performance?

Ø What are the problems encountered by the organisation in implementing CRM systems within British Airways?

1.5 Rationale of the Study

Good customer relationship is among the top priorities of current marketing approaches of businesses and organizations. Within the marketing, organizations must consider how individual customer needs can be provided so as to provide high levels of customer satisfaction to gain good customer relationship. Furthermore, organizations must be able to identify their specific customer groups clearly (Bethke, Clinton & Williamson, 1994). This will help them analyze and provide general and more specific needs of each customer segment. In providing customer relationship management, the quality of the products and services of businesses must be measured and continually monitored.

It was noted that there are a number of literatures that discussed how customer relationship t can be achieved. However, there had been limited resources focusing on the relationship of these marketing strategies in achieving good customer relationship. Considering the existence of many industries, in the world, it is important that several studies stress this context of assessing the relationship of these contexts.

By and large, the purpose of this research study is the impact of customer relationship management in terms of the marketing approach of the organisation and to know how CRM affects the general performance of an organisation. The research will specifically identify how the customer relationship management system enables them to have an effective marketing strategy. In addition, this proposes study will also include the discussion of relevant literature. The outcome of this study will be helpful for different organisation.

Furthermore, the purpose of the research is to help management students, marketing managers, and the company to the importance of having an effective marketing strategy through the use of modern technology. The findings of the study will be able to benefit different organisations, specifically marketing industries. This means that the results of the study will be beneficial to the business world since the research will be able to support previous claims that marketing strategies with CRM system can help improved the performance of an organisation and achieved customer satisfaction. This also suggests that the findings of the research will allow leaders and organization to integrate marketing strategies in handling customers.

1.6 Scope and Limitations

The study intends to investigate the impact of CRM system on marketing, including its impact on the general performance of the organisation. In this research, primary date and secondary data will be used. Primary data will be conducted using survey-questionnaires that will be sent to the marketing managers of the chosen industries. The questionnaires will be used to collect quantitative data and the interviews will be used to provide qualitative insights into the data collected. The gathered information will be analysed and compiled for the correlation of the hypothesis. The data will then be presented by means of graphical representations as well as illustration and the difference would be highlighted.

Further, this dissertation will be quantitative and qualitative in nature. The model of this dissertation will be based on the Input-Process-Output Model; a process is viewed as a series of boxes which are known as processing elements and connected by inputs and outputs. Data or information flows through a series of tasks or activities based on a set of rules or decision points. In IPO model, flow Charts and process diagrams are often used to present such the process. Basically, what goes in is the input or those data that have an impact in the process and the output (the result). See Figure 1.1 (Basic IPO Model).

Figure 1.1

Input – Process – Output Model

The IPO model will show the general structure and guide for the path of the dissertation. Substituting the variables of this research study on the IPO model, the researcher came up with the following:

Figure 1.2

Conceptual Framework

INPUT PROCESS OUTPUT

For this research, the study will focus the impact of CRM systems in marketing. The study will give emphasis on identifying whether the customer relationship management system’s leads to having effective marketing approach to achieve competitive advantages among rivals’ organisations. For this study, the research will only have respondents from marketing managers of chosen organisations to guarantee that only pertinent data will be gathered.

1.7 Definition of Terms

The following are the definitions of some workable terms in the study:

MARKETING: Marketing is the procedure by which a company product or service are produced and is then priced, endorsed, and distributed among target market. In large companies the major marketing functions go before the manufacturing of a certain product. Herein, the companies involve marketing research and product development, product design, and product testing or evaluating. The marketing activities focused principally primarily on the customers or the target market (Proctor, 2000). As the company determined that needs and desires of the customers, the market leaders develop effective marketing strategies which are designed to educate customers regarding the most essential features of the product or services, encourage them to buy the product or avail the service, and then to improved customer satisfaction with the purchase.

CUSTOMERS: Consumers or customers could be considered as the fuel of any business venture. They are the ones who purchase the products and/or services of the company. Furthermore, consumers may choose particular products/brands not only because these products provide the functional or performance benefits expected, but also because products can be used to express consumers’ personality, social status or affiliation (symbolic purposes) or to fulfil their internal psychological needs, such as the need for change or newness (emotional purposes) (Kim, Forsythe, Gu, and Moon, 2002).

CUSTOMER SATISFACTION: Customer satisfaction is the difference between what the customer expects from a product or service and what the customer perceives he/she received. As a result, customer satisfaction is perceptual in nature. It is defined by how customers think and feel about your product or service. Objective issues of product performance are important as a basis for influencing customer perceptions about how a product actually performs (Foran & Jawa, 2001). Customer satisfaction is a very wide area of responsibility that most companies strive very hard to achieve. By being accepted by clients or customers, and availing of the services or products that are offered by the company, the provider gains profits and earns. Essentially, customers are the life blood of any business and their acceptance and satisfaction is what ensures that the business stays in operation and continues. Since customers are important to service providers and producers of products, a definition of what a customer must be defined in order to determine who important customers are to companies particularly those who provide services.

CUSTOMER LOYALTY: A loyal customer has a specific bias about what to buy and from whom. His/Her purchase is not a random event. In addition, loyalty connotes a condition of some duration and requires that the act of purchase occur no less than twice (Griffin & Herres 2002).

CUSTOMER RELATIONSHIP MARKETING: Customer Relationship Marketing is a practice that encompasses all marketing activities directed toward establishing, developing, and maintaining successful customer relationships. The focus of relationship marketing is on developing long-term relationships and improving corporate performance through customer loyalty and customer retention (Peppers & Rogers, 1997).

CUSTOMER RELATIONSHIP MANAGEMENT: Customer relationship management is a business strategy that attempts to ensure every customer interaction that is appropriate and consistent regardless of the communication channel and that CRM is a core business strategy for managing and optimizing customer interactions across the public or private’s institutions’ traditional and electronic interfaces. CRM can be used to gain clearer insight and more intimate understanding of customers’ behaviors and in helping to build an effective competitive advantage and its relationship to the e-business process (Khirallah 2000) and that committed customers can be viewed as company assets who are likely to be a source of favourable referrals and are more resistant to competitors’ offers (Khirallah 2000).

CHAPTER 2

REVIEW OF RELEVANT LITERATURE

2.1 Introduction

Relationship marketing (RM) is the concept used to describe the contact between the company and the consumers. Berry and Thompson (1982) had defined this as the strategy for business organizations to attract and maintain customers through relationship enhancement. Studies indicated that relationship marketing has been used by businesses either through salesperson management or business-to-business relations. Previous researches had also noted that certain factors such as situational influences, customer or salesperson character and pairing dynamics affect the use of relationship marketing. According to Waring and associates (1980), the effective application of RM actually revolves within 5 C’s. These include communication, caring, commitment, comforts, and conflict resolution. Though these RM features, businesses are able to employ various marketing or advertising activities, which in turn facilitates relationship-building with the customers.

The main focus of RM is the long-term retention and satisfaction of the customers through the provision of products or services that directly suit their needs. While RM had been used for various purposes within the customer life cycle, obtaining and maintaining customers remain its prime objectives. Currently, the use of RM had increased as businesses give more priority to their markets. In addition, changes in the consumer trends had caused the increased interest of businesses for the RM strategy. Specifically, customers nowadays prefer their vendors or distributors to act as product consultants – one who would provide assistance while choosing a product in order for them to purchase the one that will give them the most advantage. Customer assistance can also be provided by instructing consumers how a certain product is used or explaining the purpose of the item. Providing this assistance will in turn result to customer satisfaction and loyalty (Rempala 1998). The use of this strategy benefits both the company and the customers – the company obtains greater profit and market growth while the customers are able to acquire the products that fit their standards. In other words, this strategy works well as it promotes a two-way benefit effect.

The use of RM in business had even been popularized through the introduction of a business strategy known as customer relationship management (CRM) This part of the paper will provide the review of relevant literatures to the topic. The review will include the discussion of the context of CRM, CRM in both direct and e-marketing and the flaws of CRM. This information is helpful for the achievement of the objective of this dissertation.

2.2 Customer Relationship Management

The notion of customer relationship management existed as an approach implemented for learning and knowing more about the client’s needs as well as behaviours. Such knowledge enables the company to establish stronger relationships with the target market. Customer relationship management is a management system which works on the basic principle that the customers are at the center of the success of any business. Generally, an industry must be able to give importance to their customers through the total worth of their relationship with the industry, the possible worth of such type of affiliation, the productivity of the relationship/connection, the insights that the customers can give the industry, as well as the impact that these customers yield over other customers. Because of these, the industry is able to implement a successful management of customer relationship without utilising any technological software and database (Butler 2000).

According to Cohen and Moore (2000), CRM is concentrated on the use of information technology so as to aid the organization to stay abreast of its customers’ needs and concerns. Customer Relationship Management also helps the organization to respond in time and appropriately to their customers’ concerns. Basically, CRM is integrated into a business’ operation by means of customized software or computer programs. Though several views have been used to define CRM, the rationale for its use remains the same, and that is the application of strategies to improve or enhance customer relations.

In spite of the many considerations that management has to make in order to effectively implement CRM into its operations, several businesses are trying to work on employing such strategy. This is due to the fact that intimate customer relationships provide the industry several advantages. One of which is the establishment of committed customers. Committed customers are more than simple repeat purchasers as they have an emotional connection to the seller (Dick and Basu, 1994; Lim, 1997). These emotions may come in the form of trust, liking and believing in the organization’s capability to respond instantly and effectively to a customer’s concern (Fournier, 1998). The company considers committed customers as its assets as they can possibly be a source of favourable word-of-mouth referrals. These customers are more resistant to competitors’ offers. Aside from this effect, CRM provide a point of leverage to realize economies of scope. Committed customers are often amenable to line extensions (Bejou and Palmer, 1998). Leveraging the customer base can facilitate cross-selling complementary products as well as selling up to higher quality substitutes. The ability of CRM to reduce costs has been explored as well in the recent years. When CRM is applied along with other work processes, the strategy is capable of reducing churn or turnover in a company’s customer base. Thus, better customer management can lead to lower sales and service costs, higher buyer retention and lower customer replacement expenditures (Reichheld, 1996).

Various companies have applied CRM into their operations. One of these companies is the Irish Life and Permanent, which offers a wide range of life assurance, investment products and pension for individuals and groups to over a million clients in Ireland (CRMToday, 2004). So as to maximize revenues and enhance customer satisfaction, a software platform that would sustain seamless, quality sales and services through multiple lines of business, product lines and channels of communication. Through this integrated profile, each client’s policy data and history would make it less difficult for Irish and Permanent to determine prospects for a more advanced business growth. Overall, the CRM system applied by Irish Life and Permanent had enhanced customer satisfaction and helped the company to become Ireland’s best provider of personal financial services (CRMToday, 2004).

FAW-Volkswagen was also among the many others who have been dependent on CRM strategies. The company decided to implement a CRM system due to major business challenges such as unresponsive customer service, slow reaction times, lack of real-time information deficient incorporation of data and processes and shortage of IT personnel (SAP AG, 2001). Within six months, the company then decided to execute mySAP Customer Relationship Management (mySAP CRM) in order to improve its customer service and acquire more vital information about its client base. According to the company management, the CRM system had made real-time information on products, dealers, and clients more accessible. As a result, the system had been a helpful tool in enabling customer service representatives to acquire the latest product information and attend to customer concerns anytime and anywhere.

The Interamerican Group, a leading Greek insurance company, is yet another organization who had implemented their own CRM system. The application of this CRM system in the company had enabled the company to attain their corporate objective based on revenue growth so as to augment market share without leaving profitability behind. The project had helped the company in identifying customer segments and related exceptions. Furthermore, the CRM application had helped the company established underwriting rules through improved comprehension of the pricing policy and its implications. According to the company management, the project has not only allowed them to respond better to the changing trends of their market, but perhaps the most important thing the project has taught them was how to understand and serve their various rate groups better insights (SAS, 2002).

2.3 CRM: Direct and E-Marketing

Customer Relationship Management (CRM) is a strategy that helps organizations to stay abreast with its customers’ needs and concerns (Cohen & Moore 2000). In particular, CRM helps business organizations to respond in time and appropriately with the needs and concerns of the customers. At present, this strategy is more focused on the integration of information technology. The approach on CRM covers all processes that an organization employs so as to determine, select, obtain, enhance, and retain its customers. Indeed, at present, CRM is regarded as the integration of business processes, technological solutions and advanced analysis, which enables companies to understand the clients from a multifaceted perspective.

Despite the demands and requirements of applying this strategy, companies had been willing to integrate CRM into their operations due to its benefits. One of which is the establishment of committed customers. According to Dick and Basu (1994), committed customers are more than simple repeat purchasers as they have an emotional connection to the company. These emotions may come in the form of trust, liking and believing in the organization’s capability to respond instantly and effectively to a customer’s concern (Fournier, 1998). The company considers committed customers as valuable assets as they can possibly be a source of favourable word-of-mouth referrals. In addition, these customers are more resistant to competitors’ offers.

Aside from this effect, CRM provide a point of leverage to realize economies of scope. Committed customers are often amenable to line extensions (Bejou & Palmer 1998). Leveraging the customer base can facilitate cross-selling complementary products as well as selling up to higher quality substitutes. The ability of CRM to reduce costs has been explored as well. When CRM is applied along with other work processes, the strategy is capable of reducing churn or turnover in a company’s customer base. Thus, better customer management can lead to higher sales and lower costs, higher buyer retention and lower customer replacement expenditures (Reichheld 1996).

Among the most important aspects of CRM application is direct marketing. This approach actually involves data mining processes wherein customer databases are developed; these in turn will be used by the company in order to acquire new potential markets. However, as direct marketing becomes integrated to CRM, its role to business has transformed as well. Direct marketing is no longer concentrated on acquiring new customers or identifying new markets; rather, it is now more centered in enhancing sales productivity while strengthening relations with existing customers.

With this reformed role, direct marketing can now be used to cultivate existing customers for customer base expansion (Jacobs 2001). The use of direct marketing practices in business has been integrated with CRM as businesses wanted to use a strategy that will help them build effective relations with the customers. These relations should be based on mutual trust, interest, and healthy interdependence.

Direct marketing as a CRM approach had actually gone through other major changes. For instance, instead of measuring direct marketing success through campaign or transaction-based measurements like number of calls per hour, cost per thousand, or response rates, CRM-based direct marketing now prioritizes various qualitative measures such as referrals, account penetration, product penetrations, customer satisfaction, and loyalty (Jacobs 2001).

In CRM application, direct marketing is also used in order to reduce the number face-to-face contacts with the customers. Through this transition, unprofitable marginal accounts that cannot be achieved through face-to-face sales calls can be prevented. The use of direct marketing for the CRM strategy is also useful in establishing sustainable relationships with the consumers at a lower cost (Jacobs 2001). Thus, in general, direct marketing enabled businesses to form a more stable customer community and provide product and services that are of value.

Direct marketing as an application of the CRM strategy has been developed further as information technology was introduced for business utilizations. This development then gave rise to a more recent strategy known as online or electronic marketing. E-marketing is a powerful tool used by different business organizations around the world. It is defined as the process of achieving marketing objectives through the use of electronic communications technology. Smith and Chaffey (2001) have provided a 5Ss’ mnemonic for how the internet can be applied by all business firms for different e-marketing tactics. These 5S’s are selling, serve, speak, save, and sizzle.

E-marketing is also known to be the online marketing strategy utilized by different company whose objective is to be the best company in their field. In various countries worldwide, more and more business firms have been using e-marketing strategy in order to be competitive. From books, foods and beverages, automobiles and other products and services, various firms, irregardless of their company sizes, are trying to survive by means of e-marketing strategy. Aside from being a promotional medium, the internet is a tool for marketing communications as well. Due to its interactive nature, the internet is an efficient method used in communicating with the consumers. Companies then started to concentrate on designing web-related strategies and employing interactive agencies that will facilitate their development of specific company web sites as part of their integrated marketing communication strategy.

Online marketing is considered to be the most expensive yet seems to be the most comprehensive marketing strategy that every company wants to implement and apply. At present, people, particularly those in the business arena, tend to engage themselves within the trend of rapidly growing technology so as to stay competitive. Upon surfing the internet, various companies have put up their official sites online for customers and potential consumers to view. Online or e-marketing is the latest marketing approach for any firm who wants to effectively market its products and services. In addition, e-marketing enables the company to be known worldwide since more and more people are able to access information derived from the internet. Within the business world, where competition is strict, internet marketing is one essential marketing strategy applied by most industries.

While e-marketing had been applied in order marketing goods local and internationally, this strategic option has also been used effectively by business operators in order to communicate with their customers. One common CRM technique based on e-marketing is electronic mailing; through this tool, companies can send in letters to the clients in order to obtain useful information in line with their specific product needs or preferences. This techniques has in fact been realized an effective instrument for driving revenues as well as obtaining customer retention and loyalty. While direct mailing techniques use the telephone, fax or send posts to gain information, e-mails offer lower contact costs (Mummert 2000).

In general the use of web technology for the CRM approach paved the way for a more cooperative information flow that help marketers understand the needs of their customers more accurately. Perhaps to stress the function of e-marketing for CRM, an example can be used. The official website for Martha Stewart Living for instance, employs a two-part online registration form for members. One form asks about the users basic personal data (e.g. name, e-mail address, postal address), while the other form pertains to the user’s personal interests (e.g. Martha by Mail products, crafts, cooking, and gardening). In addition, the site offers purchase discounts and other incentives to encourage users to submit a personal data through the site. The information gathered by the site on the other hand is used by the company in developing new products and customizing its services (Mummert 2000).

2.3 Flaws of CRM

Although the CRM strategy has its beneficial effects, the strategy is also considered flawed. Specifically, certain issues had been raised in relation to CRM and it use of both direct and e-marketing practices. One of the major issues related to this matter is the concern of the customers on privacy. With the application and popularization of the CRM strategy, customers have been aware that technology enables companies to track down their movements and that Web registries are used to collect customer data. However, without the provision of customer control, direct and e-marketing approaches can affect customer relations. For instance, direct e-mailing can be considered by other consumers as unwanted communication; as users do not have the control as to how this unwanted communication can stop, customers are often left irritated. Moreover, this issue often hinders others from filling up online forms or replying to company e-mails. Hence, it has been suggested that marketers should provide sufficient information about themselves; users should also be informed of the purpose for the data collection, how the information will be used and in what ways they could control the use of their personal information (Mummert 2000).

It has been known that direct marketers develop databases in order to improve the companies’ services and meet the needs of the consumers. Nonetheless, the use of direct e-mails for the CRM effort allowed marketers to secretly obtain data from random users; this process is done as users browse the Web. This made consumers concerned as their personal data is being used for business without their consent. In a research done by Stanley (2000) for Forrester Research, it has been stressed that privacy concerns in relation to the CRM strategy still continue. In particular, participants of the research indicated that they feel irritated and violated with this type of business strategy. Due to lack of security, other fear that this business strategy could bring them harm as well.

In general, CRM systems are often based on standard software; this allows companies to implement the systems with increased speed of development and less need for development staff requirements. The use of standard software also enables system integrity maintenance by means of pre-coding and upgrades. Nonetheless, it has been noted that utilizing standard software also has certain flaws including problems on cost, flexibility, control, competitiveness, and functionality (Light & Holland 2000). With this issue, the main root of the problem appears to be the assumption of CRM software developers that all companies share similar processes of business relationship management. In a study done by Light (2001), the researcher identified the different issues related to CRM by analyzing some companies. Findings showed that due to the use of standard software for CRM, the users encountered problems on identifying specific customer characteristics. In addition, some of the companies also experienced difficulties in monitoring the services they had given to the customers as well as the progress obtained from the system.

CRM is also flawed especially if the system is not applied with a holistic approach. This means that the system must be assimilated well to all the processes within the organization, from marketing to collections. This is said to be a challenge as most companies employing CRM have this tendency to view this strategy narrowly, seeing it as a mere tactical series of transactions. In contrast, the effective strategic implementation of CRM requires the information from all related departments; this will allow the effective and intelligent use of customer information, which will eventually lead to the creation of strong customer partnerships or relations (Butler 2000). The utilization of CRM systems in the company appear to based on the concept of relationship marketing but not on the features of the software, resulting to ineffective outcomes; Payne and associates (1999) stated that this clearly stress the need for a holistic approach in applying CRM systems by involving the entire organization in the process.

In summary, the flaws of the CRM system originates from its inherent feature and the insufficient skills users have for its successful application. From the flaws identified, it is then essential that a better system is developed; specifically, this should be focused on integrating greater control among the consumers. Not only will this help address the issue on privacy but will also encourage the customer to willingly give their personal details for the company’s use. In addition, the enhanced CRM system should consider adding features that would allow customers to control the use of this information. This then makes customer managed relation (CMR) a recommended strategic choice.

CHAPTER 3

RESEARCH METHODOLOGY

3.1 Introduction

This dissertation was conducted so as to determine the impact of CRM systems on marketing, particularly in the general performance of an organisation and its importance as part of the marketing strategy of activities. The focus of the assessment was on the firm’s marketing strategies and the customer relationship management. In order to gather the essential data, the researcher used the descriptive method, using both qualitative and quantitative approaches. A total of 80 respondents were randomly selected as participants who come from British Airways. The survey and interview methods were the two research instruments used for the data-gathering.

The marketing managers who have been chosen in this study accomplished a survey questionnaire to evaluate how CRM system affects marketing. The results of the survey were then processed by computing the weighted mean of each survey item. The computed values were compared to the Likert scale for data interpretation. Relevant literatures were also used to support the gathered findings.

The credibility of findings and conclusions extensively depend on the quality of the research design, data collection, data management, and data analysis. This chapter will be dedicated to the description of the methods and procedures done in order to obtain the data, how they will be analysed, interpreted, and how the conclusion will be met. This section is to justify the means in which the study was obtained and will help in giving it purpose and strength as it will then be truthful and analytical. All these will help in the processing of the data and the formulation of conclusions.

Specifically, this research will cover the following: the research design and method, the respondents or subjects to be studied (which will include the sampling method), the data collection instrument, and the data analysis. These will be presented below.

3.2 Research Design

The descriptive method of research was utilized. The main objective of applying the descriptive method is to describe the nature of a condition, as it takes place during the time of the study and to explore the cause or causes of a particular condition. The researcher opted to use this kind of research considering the desire to acquire first hand data from the respondents so as to formulate rational and sound conclusions and recommendations for the study. According to Creswell (1994), the descriptive method of research is to gather information about the present existing condition. Since this study is focused on the perception or evaluation of the consultancy firm’s effective human resource management, the descriptive method is the most appropriate method to use.

Two types of data were used: the primary and the secondary data. The primary data were derived from the answers respondents gave in the self-administered questionnaire prepared by the researcher. In addition, the information obtained from the interview also provided primary research data that supported the study. The secondary data on the other hand, were derived from the findings stated in published documents and literatures related to the research problem. These were based from the recent literatures related to marketing strategies, customer satisfaction, consumer behavior, etc. and the concepts cited by the respondents.

In terms of approach, the study employed both qualitative and quantitative approaches. The quantitative approach focused on obtaining numerical findings was used with the survey method. The interview on the other hand, made up the qualitative approach of the study as this focused on personal accounts, observations, description and individual insights of the customers. This study employed the combined approach so as to overcome the limitations of both approaches.

3.3 Participants

The study will have marketing managers and employees as well as customers of British Airways. In this study all of these participants were selected through random sampling. This sampling method is conducted where each member of a population has an equal opportunity to become part of the sample. As all members of the population have an equal chance of becoming a research participant, this is said to be the most efficient sampling procedure. In order to conduct this sampling strategy, the researcher defined the population first, listed down all the members of the population, and then selected members to make the sample. For this purpose, a self-administered survey questionnaire in Likert format was given to the respondents to answer. The marketing managers assessed the Customer relationship management systems and the organizational performance of British Airways.

3.4 Research Instruments

For this study, two research instruments were used to evaluate the relationship of the two contexts. These research instruments included the survey questionnaire methods. A self-administered questionnaire was distributed to the selected customers. The questionnaire given to the marketing managers aimed to determine how CRM systems affect the marketing strategy and the overall performance of their respective companies. In addition, this also aims to evaluate the efficiency of the marketing strategies of the company in terms of the mentioned aspects above. In general, the performance of the companies was evaluated for this study in order to determine whether its marketing strategy is effective or not. This focus of the assessment was based on the principles introduced by various authors.

The questionnaire was structured in such a way that respondents will be able to answer it easily. Thus, the set of questionnaire was structured using the Likert format with a five-point response scale. A Likert Scale is a rating scale that requires the subject to indicate his or her degree of agreement or disagreement to a statement. In this type of questionnaire, the respondents were given five response choices. These options served as the quantification of the participants’ agreement or disagreement on each question item. Below are the designated quantifications used in the questionnaire:

Strongly Agree

Agree

Uncertain

Disagree

Strongly Disagree

Three manages from British Airways were recruited to be interviewed. The aim of the interview was to have qualitative insights about CRM. Semi-structured interviews were carried out with the interviewees. Unlike structured interviews which are standardized and do not allow the interviewer to deviate from the questions (Saunders, Lewis, and Thornhill, 2003), this type of interview does not limit response of the interviewees. Open-ended questions were also asked to the interviewees. This interview will only include important questions (See Appendix).

3.5 Data Analysis and Presentation

The study utilised first hand data which comes from the chosen respondents who answered the survey-questionnaires given to them. First hand data are those that come from the respondents who have been surveyed prior to the research. The study also utilized secondary data. Secondary data include raw data and published summaries, as well as both quantitative and qualitative data. Saunders, Lewis & Thornhill (2003) deduced that secondary data fall into three main subgroups—documentary data, survey-based data, and those compiled from different sources.

With this particular study, the researcher utilized documentary secondary data (in the form of articles from books, journals, magazines, and newspapers) that are generally about the marketing strategies and customer satisfactions as well as relevant literatures and survey-based data in order to meet the objectives of this study. In order to analyze the data gathered from the survey, the weighted mean for each question item was computed. Weighted mean is the average

Wherein every quantity to be averaged has a corresponding weight. These weights represent the significance of each quantity to the average. To compute for the weighted mean, each value must be multiplied by its weight. Products should then be added to obtain the total value. The total weight should also be computed by adding all the weights. The total value is then divided by the total weight. Statistically, the weighted mean is calculated using the following formula:

The computed mean was then compared to the scale below for interpretation:

Range

Interpretation

0.00 – 1.49

Strongly Disagree

1.50 – 2.49

Disagree

2.50 – 3.49

Uncertain

3.50 – 4.49

Agree

4.50 – 5.00

Strongly Agree

Results of the survey were presented in tables. Excerpts from the interview process were integrated based on the analysis outline. Relevant literatures to support the findings are also included.

3.6 Ethical Considerations

As this study utilized human participants and investigated on company practices, certain issues were addressed. The consideration of these issues is necessary for the purpose of ensuring the privacy as well as the security of the participants. These issues were identified in advance so as prevent future problems that could have risen during the research process. Among the significant issues that were considered included consent, confidentiality and data protection.

3.7 Statistical Treatment of the Data

After the collection of information from self-administered questionnaire, and related studies, the researcher collated all the data. The statistical analysis for the information from semi-structure questionnaire was conducted using Microsoft Excel where the data is tabulated, graphed, and evaluated. The testing of the level of significance was conducted using the Statistical Package for Social Sciences (SPSS) and tabulated in the Excel files. The SPSS is the standard software in conducting statistical analysis.

Percentage – to determine the magnitude of the responses to the questionnaire:

where: n = number of responses

N = total number of respondents

Weighted Mean:

where: f – weight given to each response

x – number of responses

xt – total number of responses

To evaluate the information gathered, the percentage analysis and mean analysis are used.

3.8 Data Summary

As stated in this methodology part, the research underwent stages. In the research design, the researcher collected secondary data and formulated and developed the self-administered questionnaire. In this stage, these instruments were subjected to approval and validation. During the information collection, the researcher collated and summarised the data obtained from the self-administered questionnaire and survey. The researcher then analysed this information and from these, the researcher came up with findings and recommendations that shall be presented in the next chapters.

Chapter 4

Data Presentation and Analysis

4.1 Introduction

In this chapter, the data gathered from the British Airways managers and employees are presented and analysed. This chapter discusses the results of the survey questionnaires given to the 80 chosen respondents. Prior to the initiation of the survey process, the purpose, the importance, and objectives of the study were relayed to the chosen respondents. They were also assured that all the information they had provided are solely for the purpose of the study while their identities would remain confidential. All questions asked in the survey questionnaire pertain only to the respondents’ insights on the customer relationship management impact on the organizational performance of British Airways.

For a clearer presentation, the findings of the survey are presented in graphs and tables. To give an appropriate flow of discussion, findings are also divided into sections. Section one gives a summary of the demographic profile of the participants used in the study. This profile was categorised according to the respondents’ age, gender, educational background, and place of residence. The discussion of the perception of managers and employees who took part in the study about determining the relationship of their satisfaction to the marketing strategies of British Airways will be discussed in the next section. The third section will discuss the view of the customers regarding the CRM implementation of British Airways and lastly, the employees’ standpoint on the notion that customer relationship management positively affects the organisational performance of the company.

4.2 Demographic Profiles

This part will discuss the demographic profile of 80 individuals who answered the survey questionnaire sent by the research. The description of the respondents includes their gender, age, educational background, length of stay in the company

Gender of the Respondents

Figure 1

Figure 1 show the distribution of the employees who participated in the study in terms of gender. Out of 80 respondents, it shows that 43 (54%) were female and 37 (46%) were male. This may indicate that female employees of British Airways are more interested to participate in surveys than male employees.

Figure 2

The figure above presents the statistics regarding the age of the respondents or employees who took part in the study. Herein, it shows that the age of 40% of the respondents was ranging from 23–30 years old. Other respondents compromised the following division, 25 (31%) belongs to 18-22 years old, 15 (19%) are 31-40 years old. this indicates that British Airways gives opportunity for retaining good employees.

Educational Background

Figure 3

The figure above displays the educational background of the respondents. It shows that 49 or 61% of the respondents has been graduated with a Bachelors Degree and 39% have attained post-graduated degree. These further indicate that most of the employees of British Airways have been hiring knowledgeable assets in the company.

Length of Stay in British Airways

Figure 4

The figure above shows the distribution of the respondents in terms of their length of stay in the company. Herein, it shows that 51% of the respondents are staying in the company from 6-12 years and 35% are staying in the company for 13-19 years and 14% are servicing the company below 5 years. The result indicate that majority of the respondents are knowledgeable enough to the system of British Airways, specifically in terms of its customer relationship management system.

4.3 Perception of the Respondents

The proceeding sections will present the results in accordance to the Likert technique. It will be remembered that the respondents of the study were presented a set of attitude statements so they can express their agreement or disagreement with the use of a five-point scale, wherein 5 is equivalent to an answer that merits a strong agreement and 1 as showing a strong disagreement (see chapter 3). This will provide a greater understanding about the observations of the following respondents about the impact of CRM with the organisational performance of British Airways.

4.3.1 EVALUATION of British AIRWAYS’ CRM

British Airways has been providing services for tourists or other clients for several years. As British Airways realized that their company is in need of a system that will sustain their competitive advantage. Thus, in order to resolve this, the company had planned and implemented a CRM system, one that would help the management in obtaining better chances of success in the future. The company then focused itself in enhancing customer loyalty and satisfaction through a specific CRM strategy. A joint relation with a computer and software organization was established by the British Airways. It can be said that the needs of the company to have a system that would sustain their competitive position has lead them to implement CRM. In this regard, this part of the paper would provide the evaluation of the CRM system implemented within British Airways.

Evaluation of British Airways CRM

Table 1

Statements

Weighted Mean

Interpretation

1. British Airways has strong relations with their clients or customers.

4.65

Strongly Agree

2. The company’s corporate reputation can be attributed on how well they manage and provide quality customer service.

4.64

Strongly Agree

3. The company believes that improving customers relations should be part of their core strategy to ensure competitive advantage.

4.78

Strongly Agree

4. The company has been able provide and satisfy the needs of their clients at all times.

4.58

Strongly Agree

5. The customer relations of British Airways are effective.

4.70

Strongly Agree

The table above presents the distribution of the respondents on their evaluation of the customer relations of British Airways. Herein, it shows that majority of the respondents strongly agreed on the given statements. The managers and employees of the respondents have strongly agreed that British Airways gas strong relations with their clients, and its corporate reputation has been attributed on how well the company manage and provide quality customer service. In addition, the company also strongly agreed that the improvement of the customer relations of British Airways should be part of their business strategy. Furthermore, the respondents also strongly agreed that British Airways has been able to provide and satisfy the needs of their clients and their customer’s relations are effective.

4.3.2 Benefits of CRM in British Airways

Statements

Weighted Mean

Interpretation

1. CRM is helpful in determining the needs of consumers and achieving their satisfaction.

4.68

Strongly Agree

2. CRM allows the reduction of response time within the business transaction and increased net profit.

4.79

Strongly Agree

3. CRM is useful in integrating the activities within the organisation.

4.85

Strongly Agree

4. CRM system facilitates the creation of trust among customers and enhances customer loyalty.

4.73

Strongly Agree

5. CRM makes communication among customer’s members faster, easier, and more frequent.

4.81

Strongly Agree

6. CRM enables the sharing of information both through informal and formal means among customers and employees and management of company.

4.64

Strongly Agree

7. CRM helps in obtaining useful feedback from the customers to know their needs and demands easily.

4.85

Strongly Agree

8. CRM allows the company to build closer and stronger relations with the customers.

4.74

Strongly Agree

9. CRM helps the company in improving its current marketing activities and competitive advantage

4.76

Strongly Agree

From this table, it is clear that the employee participants strongly agree to most of the beneficial factors that can be gained out of CRM implementation within British Airways. The results indicated that CRM is beneficial to 4 aspects of the British Airways. These include the customers, technological and the company itself, and the customer relationships in general. Majority of the respondents strongly agree that the application of CRM in their company helped in developing their knowledge with their respective customers. Among the customers and the companies, CRM is also believed to be beneficial as it improve the business transaction as well as the information exchange capabilities of both parties. The selected companies also agreed that CRM promotes continuous improvement of the existing system.

The overall CRM of the companies also acquires significant benefits through its ability to gain specific feedback from their clients or customers. High scores for instance had been obtained from CRM aspect such as response time, communication and feedback acquisition; these high scores indicate that majority of the selected respondents strongly agreed that these CRM factors have been attained by British Airways. The organizational performance of the company also benefit from CRM as it helps in creating trust and building stronger relations among the members.

4.3.3 Problems and Issues of CRM in British Airways

Statements

Weighted Mean

Interpretations

1. The company found CRM implementation difficult as some customers or employees lack the interest to participate in the system

4.03

Agreed

2. The implementation of CRM has been challenging as some customers are not showing interest to the system.

4.05

Agree

3. The company lacks the ability to control their marketing and management approach, making it hard to apply CRM.

2.46

Uncertain

4. CRM implementation has been difficult as advanced information systems are not available.

3.51

Agree

5. CRM implementation has been difficult as information systems are easily depreciated which affects the overall performance of the organization.

3.76

Agree

Among the tested difficulties of CRM implementation, the unavailability of advanced information systems received the highest score, indicating that majority of the respondents strongly agree that CRM application is challenging without the access to modern technology. The same impression had also been obtained in terms of the control the company has on their marketing operations. On the other hand, the issue of the interest of the suppliers to participate in the CRM system seem to be major concerns of British Airways, since the system is built or applied because of their goal of enhancing the customer relations. The respondents have shown their uncertainty with regards to the inability of the British Airways to control their marketing and management approach. This would indicate the respondents are aware on the eagerness of British Airways on ensuring customer relations at all cost.

4.4 Interview

This part of the dissertation will provide the analysis of the interview conducted by the researcher to the chosen respondents.

4.4.1 What techniques have the company applied for its CRM system?

The three managers interviewed for the data-gathering procedure stressed the collaboration of two of the essential aspects of CRM: the collaboration of the British Airways employees and customers as well as the use of the internet and information communication technology. The managers declined to disclose the exact method that they use to manage their CRM systems; however, in terms of techniques, the interviewees stated that the management of the British Airways must share a common channel within the chain to provide better service with their consumers and to gain customer loyalty and good customer relations. The establishment of the channel is significant as this would allow both the company and customers to exchange valuable information. To facilitate data exchange, interviewees stressed that appropriate systems has been installed within the company. The British Airways CRM system, use two types of systems: online and phone systems. In order to ensure that all activities of the chain are integrated well within the system, one interviewee noted the significance of using customized online programs. Other interviewees also cited that they have utilized the expertise of CRM experts in order to develop the most suitable system for their companies’ specific needs.

4.4.2 What are the reasons of the company for implementing CRM to sustain their organisational Performance?

The main reason of the companies for having a CRM system is to adapt to the new trends within the industry. An interviewee noted that considering that their company operates at a larger scale, competition with similar companies as well as with larger businesses can be cutthroat. For this reason, the companies must adapt strategies that would allow them to have a more organized production and service provision system, which would promote higher levels of customer satisfaction and customer relations. The company interviewees also cited that the application of CRM is geared towards the enhancement of the relations among the management, employees, and clients. An interviewee explained that one of the major problems encountered by businesses is communicating with their customers. As the service industries greatly depend on the timely service deliveries of participants, inefficient information exchange can then result to delayed production and services. Through CRM, the activities of the company then become more coordinated. This benefit however, is easiest to attain with the use of CRM system; however, interviewees explained that this is because communication problems can still happen brought about by various factors like wrong information, misunderstanding, power outage, or natural disruptions. Without much other means to communicate, the channel shared by the company and clients can be disrupted easily, resulting to business problems and organisational performance dispute.

4.4.3 What requirements have the company considered in order to implement CRM?

The companies’ main concern in the implementation of CRM is their ability to support such major investment. Most companies naturally have limited financial resources to invest on CRM systems as compared to other companies. The interviewees noted that since their resources are limited to their available budget, the type of systems that they have to apply should also be dependent on this important factor. The companies also considered the utilization of appropriate expert assistance for the implementation of CRM system; two of the interviewees reasoned that the consideration of this requirement is to ensure that the available resources of their companies will not be wasted on impractical or ineffective CRM designs. Other interviewees also cited that obtaining professional help with CRM experts had been helpful as they are able to prevent problem areas that the companies encountered along the way; similarly, the prevention of these CRM-related problems helped the companies prevent expensive troubleshooting needs. The interviewees also noted that training the people to be assigned in the management of the system is also a key success factor; for this, the presence and expertise of CRM professionals have also been helpful. Online website as well as other information communication technology facilities has been considered in their implementation of CRM.

4.4.4 What makes the company’s existing system effective and beneficial?

The interviewees noted that considering important requirements before the implementation of the CRM system had been an important efficacy factor. In addition, developing a step-by-step plan during the creation, implementation, and application phases for the CRM system is also a key; interviewees noted that this was essential in ensuring that all the necessary requirements for effective CRM implementation are taken into account to sustain their organizational performance. Overall, the interviewees stated that the optimization of the companies’ available resources, efficient planning and appropriate design enable their existing CRM systems to be effective. In terms of benefits, the interviewees cited a number of significant developments that they had acquired through CRM implementation. One of which is that valuable business information has become more accessible to the companies.

An interviewee explained that as the service industries have developed better communication channels through CRM, information have improved both in quality and quantity. Through this benefit, companies became more knowledgeable of their customers; considering that market trend are important aspects of the business success, acquiring better consumer and business information is an important breakthrough. The improvement of the communication in the marketplace is also a major benefit; the strong business relation between customers and the British Airways helped in sustaining successful operations within the local and international level. Making service delivery more organized and on time is also important benefits achieved through the CRM system. These benefits in particular had helped the companies to enhance their organisational performance.

Chapter 5

Summary, Conclusions and Recommendations

5.1 Summary

Today’s market is characterized by highly competitive organizations which are all vying for consumer’s loyalty. Firms are faced with the challenge to maintain their own competitive edge to be able to survive and be successful. Strategies are carefully planned and executed to gain the ultimate goal of all: company growth. In the traditional marketing strategies and theories, primary focus is accorded on finding ways to attract customers thereby increasing the market share o9f the business organization. Today, however, business firms have been exhausting means of maintaining and retaining customers and improving customer relations for the overall growth of the business.

The focus of this study was to investigate the impact of CRM to the organisational performance of British Airways. This study also intends to explore the benefits and difficulties experienced by British Airways in their implementation of CRM system as well as the evaluation of the CRM system as part of the business approach of British Airways. The general population for this study is composed 80 employees or representatives of British Airways managers. The researcher provided the questionnaires for these employees to know their perception regarding the CRM system imposed in their company. To determine the assessment of the respondents on the CRM system, the researcher prepared a questionnaire and a set of guide questions that is asked to the intended respondents. The respondents graded each statement in the survey-questionnaire using a Likert scale with a five-response scale wherein respondents are given five response choices. In addition, to determine the insights of the managers, the researcher also conducted interview with three managers.

Concurrently, the study employed both qualitative and quantitative research methods to ensure a flexible and iterative approach. Unstructured interview was the second research instrument for this study. Here, unstructured interviews using some of the selected respondents were conducted after the survey process to obtain useful data that would elaborate or explain the responses in the questionnaire. The answers of the participants in the interview were integrated in relevant survey results. Along with this information, relevant literatures that explain or support the claims given by the respondents are also integrated.

Primary data and secondary data have been used in this study, wherein the primary data came from the 80 respondents from British Airways who has been randomly selected and 3 managers for the interview. Secondary data were gathered using journals, internet articles, and books regarding CRM, its benefits and disadvantages and its effect on the organisational performance of British Airways.

In order to analyze the gathered data from the Likert questionnaire, the weighted mean of each survey item was computed. The result is then compared to the developed scale to interpret the obtained value. Based on the analysis, it can be said that CRM system has been beneficial to the British Airways as it enables the company to sustain their competitive advantage and effective organisational performance in the Airport and aviation industry in UK.

5.2 Conclusion

It can be said that the Internet and information communication technology provides opportunities for companies to develop relationships with customers. It has been found that the number of competitive moves increased as CRM usage increased for different companies in the world. It becomes more important to manage relationships as competition increases through the use of this system integrated with modern information technology. It can be stated that the most effective IT strategy for service industries like British Airways is a collaborative one with their business strategy and their organisational objectives and corporate responsibility. On one hand, customer relationship management has long been considered an important aspect of most business operations, particularly those who deal with directly with clients and customers. This type of business setting is very much evident in different industries. As mentioned, the goal of this paper is to determine the impact of CRM with the organisational performance of British Airways.

This study then surveyed 80 employees of British Airways and interviewed three managers to achieve these objectives. By means of using the combined qualitative and quantitative approaches, the researcher gathered data using the survey and interview method. The interview process was conducted in order to obtain relevant information on the CRM systems applied by the company, specifically the techniques, requirements, benefits, and problems encountered in the process of implementation. On the other hand, the survey was carried out in order to determine which among the benefits and difficulties in CRM system implementation affects the organisational performance of British Airways.

In order to analyze the gathered survey results, the weighted mean for each survey item was computed and compared to a Likert scale for interpretation. The results were then subdivided into categories for clearer presentation and comprehension. The results of the interview were incorporated to the values acquired from the survey. Relevant literatures were also integrated to support the gathered findings. Based from the data gathered, a number of important conclusions can be drawn out:

1. The selected respondents are familiar with CRM techniques as part of their business strategy. These techniques include the use of multiple communication systems such as the internet and telephone in order to transmit valuable real-time business information to other clients and customers and employees. The respondents also utilized the expertise and assistance of CRM experts in designing and implementing their existing CRM systems. The respondents also ensured the effective application of their chosen systems by means of careful and extensive project planning.

2. In terms of benefits, the participants of this study obtained a number of advantages out of the use CRM to sustain their organisational performance. The majority of the respondents agree that communication benefits are one of the most significant advantages gained from customer relationship management. This is then followed by the improvement of the relations among the target market of the company and the enhancement of the different business abilities of the company. In turn, these significant developments benefited the companies as sales improved and customer satisfaction and relationship increased.

3. In spite of the beneficial effects of CRM application, certain difficulties have been encountered by British Airways in line with its application. Among several problems, the companies appear to be most affected by the technology and cost factors. With limited resources, the British Airways were unable to upgrade their CRM systems to more modern programs. This in turn, has affected their opportunity to acquire greater market shares and higher customer satisfaction as well as overcome intense levels of competition.

This research study was conducted in order to determine how CRM system affects organisational performance of British Airways. Based on the collated and analysed data the CRM has evolved to encourage direct interaction between service provider and consumers in market environment where consumers have more complete information about goods and services, enabling them to exert substantial control.

Due to its interactive nature, the CRM is an efficient method used in communicating with the consumers. Hence, companies like British Airways are beginning to realize the advantages of using the CRM as a tool for communication and for greater relations. The company then started to concentrate on designing web-related strategies and employing interactive agencies that will facilitate their development of specific company web sites as part of their customer relationship management strategy.

It can be argued that a mixture of multiple revenue streams that monetizes content/database, uses e-commerce, and cross-sells through multiple channels is the key to success of CRM system, and the only area that can still rely on ads as the primary revenue stream would be in the niche/specialist area. Aside from this, CRM has also been used in establishing business relationships among clients. Within operations handled by the company, certain processes are improved through the integration of information technology. Service quality control for example. This improved process control entails intensive investigation of several factors which serves as the assurance of the company’s consistency in meeting the client’s expectations, particularly on quality of service delivered. Without the availability of CRM systems in terms of contacting the clients causes greater expenses primarily due to delayed responses. Through the emergence of inter-organizational information technology systems, monitoring contract compliance became less costly.

Given the results of the survey and the analysis of the interview, it can be concluded that CRM system has been able to positively benefit or impact the organisational performance of British Airways specifically in terms of providing quality service among clients which lead to customer satisfaction and good customer relationship. In spite of the difficulties or problems and issues encountered by the company, the management of British Airways has been able to manage their CRM system effectively as part of their business strategy.

5.3 Recommendations

From the acquired findings, certain recommendations can be of use to the British Airways, es, in order to maintain and improve their CRM system and sustain their organisational performance:

1. Companies may consider trying out the services offered by third-party technology providers in order to transmit customer relationship information via electronic means. Developing and implementing CRM really do require considerable investments; however, there are less costly alternatives whose functions are similar to customized systems. Problems like data inaccuracies due to human error can be remedied through efficient human resource delegation. To address the data inaccuracies caused by unexpected events, companies may consider implementing multiple communication systems (e.g. fax, telephone) so as to overcome this problem.

2. Companies should not only deal with CRM experts to determine the most appropriate system. All possible options, including how these systems would evolve in the future should be considered. Before spending on the latest CRM technology available, the company should also consider how this system would likely change after a few years as well as the cost to update it. If the company does not have enough resources to support these system developments, then other alternative should be considered. In this way, companies will not be stuck in old and less effective CRM systems when the time comes. This recommendation also calls for more efficient planning procedures.

3. In order to prevent the accumulation of problems brought about by CRM implementation, companies applying it should also design a performance assessment program and monitor the outcomes their selected systems. Immediate response to problem areas identified through regular monitoring can help companies like British Airways to overcome business issues such as intense competition or decreasing market share. The ability of the companies to overcome business challenges is not only reliant on technology and innovation but also on the speed of their reaction to problematic issues.

5.4 Limitations of this Research

The major limitation of this research is it only considered small sample of participants. With this, the result of this study did not represent general population. In addition, due to time, budget, and effort constraints, this study has been conducted over a limited period of time which has a general effect on the result of this research.

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7. Appendix

Appendix 1

SURVEY QUESTIONNAIRE

The undersigned is conducting a research on the impact of Customer Relationship Management In the organisational performance of British Airways. In this regard, your cooperation is of utmost importance to the completion of this research, and the researcher will greatly appreciate it if you answer the questions in this questionnaire.

Your answers shall be treated with the strictest confidence.

Thank You

1.1.1 Part 1. Personal Data

1. Gender

( ) Male ( ) Female

2. Age

( ) Below 18 years old

( ) 18 – 22 years old

( ) 23 – 30 years old

( ) 31– 40 years old

( ) 41– 50 years old

3. Educational Attainment

( ) Post-Graduated Degree

( ) Bachelor’s Degree

( ) Secondary School

( ) Elementary

4. Length of Stay in the Company ________________

Part 2: Perception of the respondents

1. Evaluation of British Airways’ CRM

Statements

1. British Airways has strong relations with their clients or customers.

2. The company’s corporate reputation can be attributed on how well they manage and provide quality customer service.

3. The company believes that improving customers relations should be part of their core strategy to ensure competitive advantage.

4. The company has been able provide and satisfy the needs of their clients at all times.

5. The CRM of British Airways is effective.

2. Benefits of CRM: