INSTITUTE OF PRODUCTIVITY

&
MANAGEMENT, MEERUT

Assignment

On

Customer Relationship Management

Submitted to:

Resp. Prof. Surabhi mam

Faculty of IPM Submitted by:

Kumar Hari Shanker

IV sem

Batch (2009-11)
 ACKNOWLEDGEMENT

With immense pleasure, we would like to present this detailed report on Customer
Relationship Management. It has been an enriching experience for us, which would not have
been possible without the support of Resp.prof.Surabhi Mam.
As we know assignment needs hard work, keen insight and long patience with deep vision
based on content operation hence it becomes a humble duty to express our sincere
gratitude to Resp.Prof. Surabhi Mam.

However, we accept the sole responsibility for any possible errors and would be extremely
grateful to the readers of this report if they bring such mistakes to our notice. We express
our gratitude to all those who directly or indirectly help me in this project.
I choose the retail company which is grow rapidly in india. Indian market has high
complexities in terms of a wide geographic spread and distinct consumer preferences
varying by each region necessitating a need for localization even within the geographic
zones. India has highest number of outlets per person (7 per thousand) Indian retail space
per capita at 2 sq ft (0.19 m2)/ person is lowest in the world Indian retail density of 6
percent is highest in the world. 1.8 million Households in India have an annual income of
over  45 lakh (US$97,650).

Q1). How would you begin with setting up a startup company?

Ans: These are the following step to Startup Company

Legal Entity:

Determine whether you are going to be doing business as an individual proprietorship,

partnership, corporation, or a Limited Liability Company (LLC). The individual proprietorship
is the form of entity used by most small businesses at start up. If you need additional
capital or expertise a partnership may be the best entity. You can always incorporate later if
practical. The expense to incorporate a small business is nominal but since the latest income
tax changes unless incorporating will make you more money or better protect your
investment there is not much benefit in forming a corporation. Even though there is limited
liability as to your personal assets with a corporate entity when obtaining outside financing,
or in the event funds are misused, you can still be personally liable.

The strict laws, higher State Income taxes in some states, the legal work involved and the
heavier accounting and tax reporting requirements are some of the disadvantages of
running your business as a corporation. Also, if you decide later to close out your
corporation, the paper work involved, especially to conform to the provisions of the Internal
Revenue Code, is difficult and often runs into more problems than the initial incorporation.

Of course when interest rates are high incorporating may be the only practical method to
get sufficient capital to start-up and run your operation. However when you go public with
your stock you are looking at a whole new ball game. Federal regulations, State
requirements, etc., will make it imperative to hire a good corporate attorney and in most
instances you will need an investment company to sell the stock. The costs involved to go
public are enormous and sometimes cost up to one-third of the proceeds from the sell of
stock leaving the working capital and fixed assets in peril.

The Limited Liability Company is the new business entity that every entrepreneur should
understand. It combines the best aspects of incorporation with the tax advantages of
partnership and without the red tape of either. This combination of benefits has never
existed before in such a simple and effective way. Anyone starting a new business must
separate their personal assets and life from their business ventures. To do otherwise is
foolhardy. A limited liability company is personal protection in its purest form.

 Simple to Form
 Easy to Run
 Tax Advantages
 Liability Protection
  Instant Credibility

Attorney Steven E. Davidson explains what it is, how it works and offers a kit for business
owners and entrepreneurs to take advantage of this new legal shield. The kit is
designed to be a low cost, simple and effective way to organize a limited liability
company.

Business Name:

To make the public better aware of just what our firm offers it is generally good practice to
choose a business name that describes our product or service. Apply for a fictitious business
name with our state or county offices when we plan on going into business under a name
other than your own. Also, the bank will require a certificate or resolution pertaining to your
fictitious name at the time in a bank account.

Location:

The location of business will of course vary depending on the kind of business or service.
Retail businesses should be located in an area with adequate parking space and heavy foot
traffic. If you locate in a shopping center be certain you understand the terms of the lease.
Is it a Net-Net lease requiring the tenants to pay all center expenses including utilities,
signs, lighting, taxes, insurance, garbage, maintenance, etc., in addition to all the usual
store expenses? If we're going into an "office" business, or an unproven venture get a
month to month rental agreement. In the event our venture is unsuccessful we will not be
stuck with future rent as you would if you were under a long term lease. The landlord is in
control.

Failure:

Think positive about new venture but don't expect to make a great deal of money with little
or no investment. Lack of capital has been the downfall of many otherwise good business
start-ups. You may have limited take home pay for the first few months as you plow your
profits back into the business to make it grow. We will need a substantial cash reserve or
other source of income, during the "build-up" phase, to take care of your personal
expenses.

Lack of training and experience is another great destroyer of dreams. Be sure we have the
knowhow and are capable of running the business our propose. Get into something you
already know or can learn without getting hurt in the process.

Bank Account:

Get to know the manager of bank. He will be one of your best references. Ask his advice
and get his help on financial matters. The more he advises you the better he will come to
know you. Develop a line of credit so it will be there when you need it. The banks can't exist
without making loans so don't hesitate to apply. When you handle high cost items your
bank may be able to work up installment contracts for your customers.
To establish your bank account you will need a Federal ID number or social security number
along with certificate of assumed (fictitious) business name

Payroll Taxes:

One of the first things to do when starting the new business is to get Federal and State
application forms for ID numbers. Request "Business Start Up" application forms from the
Internal Revenue Service and from the State Tax Commission. After your applications are
sent in you will be notified of your number and get a packet of information. Depository
forms, quarterly report forms, W-4-A's, W-2's, estimated tax forms, etc., will then be mailed
periodically as needed.

Payroll taxes and expenses will amount to from 13% to 17% of your gross payroll
depending on workmen's compensation rates for the various job classifications. Payroll
expenses include: FICA taxes (Social Security) FUE taxes (Federal Unemployment) SUE
taxes (State Unemployment) WC or SDI (Workmen's Compensation)

Also, we will be required to withhold from your employees wages and pay over to the
Federal and State:

FICA taxes (Social Security-Employers share) Federal Income Taxes State Income Taxes
(Most States) State Disability Insurance (Some States).

Hiring Employees:

Throughout the year it takes hundreds of hours of your time to prepare and file the various
payroll reports and other governmental forms required. When we have expanded to the pint
you can afford good employees and/or managers, don't hesitate, and hire them. Properly
trained and advised they will make more money for you than you can ever make going it
alone in most ventures. Advertise in the classified section, take applications, set up
interviews and hire the best.

Utilities:

When we first start thinking about establishing our own business find out when the next
issue of the telephone book will be printed and the deadline for getting listed. Place a
reasonable display ad in the yellow pages under the classification which best describes our
product or service.

Licenses and Permits:

Apply at City or County offices for local licenses required. If you are going into a retail
business and your state is subject to sales taxes, apply for a permit and number with the
State Franchise Tax Board or other proper department. We will have to add the taxes to our
customer's purchases and pay the proceeds over to the state periodically.

Occupational Licenses:

Persons entering into certain kinds of business will have to obtain an occupational license
through the State or local licensing agencies. These include Real Estate Personnel, those in
the medical profession, barbers, beauty operators, electricians, plumbers, contractors,
insurance agents, engineers and many others. Passing a written examination is generally
required before a license is issued.

Other Licenses:

Federal regulations control many kinds of interstate activities with license and permit
requirements. These include such businesses as common carriers, certain food processors,
TV stations, radio, drug manufacturers and many others. Any organization which shops,
sells, or advertises in more than one state is subject to Federal Trade Commission (FTC)
regulations. This includes mail order operations although no license is required in most
cases.

Insurance:

Don't forget about insurance. The premiums are expensive, especially business liability, but
you cannot operate with peace of mind without full coverage.

Bookkeeping and Accounting:

There is probably no reason you cannot do your own record keeping, at least in getting
started. Just use a separate check book and bank account for your business. Use a
columnar check register with several "headed up" columns and distribute the amount of
each check written to the proper columns. List your deposits on the check register and carry
across a continuous bank balance.

Equipment Required:

Every business is different and will not be using the same kind of fixtures and equipment.
Sometimes it is much better to preserve cash for inventories or working capital and
purchase good used fixtures and equipment at a much lesser price.

Suppliers:

Suppliers are reluctant to ship their goods to new businesses. That is one reason you should
get to know your banker as he can offer credit references acceptable to most any firm. You
will have to convince your proposed suppliers that you are honest and hard working and
that your business has a good chance for success.

Advertising and Promotion:

When you are getting started give a press release to the local newspaper. Depending on the
type of business, it may be very profitable to have a few thousand circulars printed and
distributed throughout the area. Or you can have grand opening circulars inserted in the
newspaper to be distributed to subscribers.

Watch the ads of your competitors. As you find time clip various ads of businesses similar to
your own, from large city papers. File them for ideas when preparing your own ads.

BUSINESS FORMAT:
Owning your own business is one of the better ways to gain wealth provided you know what
is required. Starting a business is risky but your chances for making good are better if you
understand the problems you will meet and work out as many of them as you can before
you start.

The Business Format that follows will be a valuable aid in getting you started in a business
of your own. Use the format as a check list and guide. If the response to the questions and
comments is favorable you are in a preferred position to go into business for yourself.

Q2). List all the techniques & strategies to attract and retain the customer?

Ans.
Retaining customers

“The way to retain customers, I believe, is to target the right ones to start with. We try to
educate people so they realize exercise is primarily a health and fitness thing, rather than
simply a way to lose weight.

“We generate word-of-mouth recommendations by simply doing our jobs well and providing
our customers with a service that is friendly, as well as professional.

“We try to build the kind of relationship where customers feel they can tell us if they aren’t
happy with something we’re doing. If they have a complaint, I usually sit down, have a cup
of tea with them and chat about it. It’s important to respond quickly, effectively and
personally.

“During a new customer’s first visit, we sit down with them and ask what they want to
achieve, then we talk about exercise and start them on a plan that is absolutely tailored to
their needs. You have to have that chat because otherwise you have no idea what people
really want. If you don’t know what each and every one of your customers wants, you can’t
hope to meet their needs – or hang on to their custom.”

Customers are the lifeblood of your business, so it is crucial to maximize customer

satisfaction. Some degree of customer turnover is inevitable, but successful food marketers
will retain repeat customers. It costs about five times more to bring in a new customer than
to keep an existing one. Is customer turnover at a minimum? Below are questions to help
evaluate your success in keeping customers satisfied.

1. Do you realize the value of your current customers? These are your best accounts. They
are quicker to buy and require fewer “special deals.” Never take your customers for
granted!
2. Do you communicate to all your customers that they are important?

3. Do you encourage customers to return to your business?

4. Do you tailor your services to your customers’ particular needs?

5. Do your customers call you when they have a tough problem?

6. Do you provide unique services that your customers would find difficult to duplicate
somewhere else?

7. Do your customers feel that you are concerned about their interests and welfare?

8. Do you attempt to learn as much about each customer as possible?

9. Do you follow up to make sure orders are filled quickly and accurately?

10. Do you follow up on complaints to make sure the resolution was satisfactory to the
customer? If you answered “yes” to nine or more questions, you are a better-than-average
market operator. Below six is poor;between six and nine is mediocre. Surveys show that a
customer who has an unpleasant experience at your business will tell ten or more people
about it. Building a successful, positive image with your customers enhances your overall
credibility. Living up to that image creates valuable word-of-mouth publicity. Customers
most often base their purchasing decisions on the advice of people they know. Complaints
can improve your business Customer complaints should be recognized as constructive
criticism that can be used to improve your business. Work with all your employees on
customer relations regardless of the frequency or type of contact they have with the public.
Furthermore, develop a procedure for handling customer complaints based on the following
suggestions:

Listen to customers and acknowledge complaints. Customers who complain expect action.
Develop empathy and show concern for the customer. Ask questions to obtain details; solicit
customers’ alternative solutions. Resolve the action underlying the complaint.

When complaints cannot be resolved immediately, update the customer periodically on the
progress. Keep a notebook of promised actions. Record the complaints and analyze them
periodically to determine trends.

Six way of attract the customer six ways to attract and keep customers. The following six
strategies will help you attract and keep customers.

1. Offer quality products.

Good quality is the most important reason cited by consumers for buying directly from
farmers. Successful marketers keep customers with repeat sales of quality products.

2. Cultivate good people skills.

Attitude is critical to your business success. A personal inventory of your skills, interests and
goals will help determine your personality and ability to relate to a wide mix of customers.
People skills are essential to direct marketers. Even with a sincere interest and desire to
work closely with your customers, if you are not a “people person” your chance for direct
marketing success is slim. If you don’t have the people skills needed, see if another family
member might shine where you don’t. Don’t be surprised if one of your children turns outs
to be a sales “star.”

3. Know your customers.

Tell them that you appreciate their business. Each of us values someone who calls us by
name or inquires about us or a family member. The potential customer is more likely to
purchase from someone who takes the trouble to offer a personal touch.

4. Use attractive packaging.

Packaging may help make the sale for some products. You may want to reconsider your
package and label. Any holiday season may also provide you an opportunity to spice up
your regular product with a special touch.

5. Let customers try samples.

Sampling is a very successful way to draw new customers to your product. Taking a taste
of a product might convince someone that price doesn’t matter for a really good-tasting
item.

6. Be willing to change.

Consumers are always looking for new products. Hundreds of thousands of new food
products will be introduced in the United States this year. The changes in many of the
products, while often minimal, offer something new or different to attract customers. You
may need to change your product, your package, your advertising or display to increase
your appeal to customers. Grocery stores have found that bringing in new products and
more frequent remodeling is essential to the success of their businesses. Monitor your
competition and be willing to consider changes and new products based on your judgment,
experience and your read of your customers.

In conclusion, we recommend that you spend time thinking about the comments and
suggestions you have received from your customers throughout the season. Whatever you
observe can help with decisions about changes you can make to improve your services and
expand your sales. Did you have many repeat customers? If not, why do you think that is?
If you have a list of people that buy from you, consider sending out a survey over the winter
to ask for their input and suggestions on your products or services. Are packages the right
size? Product selection appropriate? Hours of operation okay? Anything they’d like that you
don’t offer? Don’t forget to remind them to tell their friends about your services. Keeping
the customers you serve happy can be the best marketing tool you have.
Q3). What decision would you take to initially setup the company?

Ans:

Sales strategies:

In today's economy, big and small businesses are seeking every opportunity to win sales
through competitive advantages. Smart owners of small business know a sales strategy can
create a competitive advantage. Selling consists of two main functions: tactics and strategy.
Sales strategy is the planning of sales activities: methods of reaching clients, competitive
differences and resources available. Tactics involves the day-to-day selling: prospecting,
sales process, and follow-up. The tactics of selling are very important but equally vital is
the strategy of sales. The advantages are too compelling to ignore.

Competitive Advantages of Strategic Sales Planning

 Increased closing ratio by knowing clients hot buttons

 Improved client loyalty by understanding needs
 Shorten the sales cycle with outside recommendations
 Outsell competitors by offering the best solution

Triple-tiered Sales Strategy

The development of any type of plan begins with research. The insight gained for a
competitive advantage comes from the marketplace not from your mind. The approach to
use is what I call "Triple-tiered Sales Strategy". Look at your client and the outside
influences on their business. Approach all three tiers to understand your customer.

Marketing Strategy

Once you have established the market, the competition and the factors that affect it you
need to detail the strategy of how you will enter the market place.

The four principle strategies are:

 

• Penetrate in new markets

• To increase your share of the existing market

• To entrench yourself in the market

• To withdraw from the market place

Possible strategic objectives:

 
• Sales objectives

• Number of clients won

• Profit or margin objectives

• Share of the market

• Penetrate into new areas

• Penetrate into new market segments

• Positioning objectives

• Launching new products

• Withdrawing products from the market place

Now the objectives of the business are identified you need to look at the marketing mix,
these are the four elements that are at the heart of marketing: product, price, distribution,
and promotion.

Product

There are three types of product decisions that can be made:

 

• Create a new product

• Modify a current product

• Withdraw a product

These decisions need to based on gaps in the current market, gaps in other markets and
short fallings of the competition.

Price

The most common pricing objectives are as follows:

• To obtain profit on the capital invested

• To obtain profit on sales

• To gain a share of the market

There are basically three price strategies:
 
• Pricing low for penetration

• Price to match the competition

• High pricing

These pricing strategies can be applied:

 
• Generically across all products

• With each line of products having a different pricing structure

• With each product priced independently

• By geographical area

Distribution

Distribution is the movement of merchandise from the place of production to the end
consumer and all the processes in between.

All products that you sell can be sold in the same way or can be split by product or line of
products, different market segments may be better served in different ways or different
geographical regions may be better covered through different channels.

The distribution channel allows the business access to a market, to transport and sell
products to the consumer; there are two routes to reach the customer:
 

• Direct sales. From manufacturer direct to the end consumer.

• Via resellers. Through agents, wholesale or retail.

Direct sales

Direct sales can be executed via the telephone, through your web page, via sales people
visiting customers, by mail or through your high-street outlet or office.

Agents

Agents organize distribution to the end consumer through wholesale and retail. They will
normally offer further services to aid this process including:
 

• Transport

• Sales promotion

• A sales team
• Accounts facilities

• Giving credit to clients

• Giving advise on the sector

Distributors

Distributors are companies that are authorized to distribute products in a determined

graphical area.

They will then sell direct to large clients or use wholesale or retail as appropriate.

Wholesale

They buy the product and sell it onto other wholesalers or direct to retailers.

Retail

Retail sell the product direct to the end consumer. They can acquire the product via any or
through all of the above channels depending on their activity, their location or product type.
Retail takes two forms, independent stores that have one or a few outlets and retail
multiples which may have many outlets over a large geographical area.

Franchises

Franchising is the process of a set formula being applied by the franchisee that has been set
up, tried, tested and proven by the franchisor. The franchisee is responsible for following
the set plan and the franchisor is responsible for supporting the franchisee, providing
operational advice and often advertising or promotional material. The franchisee has to pay
the franchisor regular royalties or a management fee from the operation and there is often
an initial buy in fee.

Promotion

There are four basic forms of promotion

 

• Personal sales

• Sales promotion

• Advertising

• Public relations

TIPS
 Be direct. Define the essential characteristics of your products and how they satisfy
the needs of the market.

 Do not be excessively technical.

 It is very important to define the distribution strategy. Many products have failed
because they have not organized distribution correctly or not supplied the necessary
resources.

 Be realistic with the promotional budget, remembering that the products or services
are as yet unknown in the market place.

 Be very careful when deciding on pricing strategy and all its variants.

 This section is right at the heart of the business plan along with the figures, so be
thorough.