Understanding Customer Relationships

Understanding Customer Relationships - 38419848
Introductory Certificate in Marketing

501 - Understanding Customer Relationships September 2013 (Word Count 2,903)
By 38419848
Executive Summary The purpose of this report is to examine customer relationships within the L'Oral group. The research carried out as follows explore the organizations relationship with its customers and examines how to improve these relationships through a number of different strategies. Research for this report included reports from market research organizations as well as first hand data from the L'Oral corporate website. I carried out background research on the organization as a whole (see appendix 1). Major findings indicate that there is a need for L'Oral to understand and communicate with their large customer base in order to successfully sell products. The report explains the ways in which the organization can continue to boost these relationships through identifying purchasing habits and improving communication. Further into this report is a discussion paper, which outlines how L'Oral can improve the internal relationships between separate departments of the organization by improving communication. This will ultimately create a better working environment and reflect on the companys sales figures. The report will conclude with a section on time management, this discusses my key findings and a reflection on my personal experience and areas for improvement. To summarize customers preferences will continue to change particularly in the fast growing cosmetic industry. This report recommends L'Oral continues to develop and invoke communication with customers on a personal level, as well as carry out regular market research to clarify their changing wants and needs in order keep up to date with the growing market.
Part One - Improving and Developing Customer Relationships This section of the report will focus on how L'Oral can improve relationships with its customers through identifying purchasing habits. By learning more about the customers needs and purchasing habits this will enable repeat purchases, customer loyalty and satisfaction. Findings For L'Oral the two types of customers I have identified are consumers from the Business to consumer market (B2C) also known as end users. These are individuals that purchase the products with the intention to use themselves. Secondly the intermediaries such as retailers and hairdressers (B2B). This can be a consumer who is buying on behalf of another business. For example L'Oral professional hair colorant products are purchased for use in hairdressers and cosmetics wholesalers.
(Purchase product) Consumers (end users)
Individual Consumes product
Retailers
(Purchase product)
Products used in hairdressers
LOreals scientific director states1 Today consumers are more knowledgeable about their skin and are prepared to spend their money on products that work because they are linked to scientific advances. Competition is high and the consumer has a wide and varied choice, from an abundance of brands and stores to buy from. The product must be innovative and have an edge against competition in order for it to stand out in todays market both B2B and B2C. I reflect upon this below. Identifying Purchasing Habits Demographics such as age can used to identify purchasing habits. A younger person may be more likely to purchase cosmetics more often and frequently; they are influenced by friends and celebrity figures, which impact the products they buy. Older customers may be loyal to a specific brand and have been repurchasing the same product for a number of years. Older customers may have more disposable income to spend on luxurious higher priced products, although this may not always be the case as shown from the information below. Geographical location, research conducted by the Daily Mail claims A quarter from London think spending money on skin care is an investment, only one in ten from Yorkshire and Humberside believes the same2 The article also explains how young professionals are
1 Taylor, R. (2012, July 14). Beauty map of Britain: Revealed, the skin care divide between London ladies and Yorkshire lasses. The Daily Mail. Retrieved July 2013 from http://www.dailymail.co.uk. 2 Taylor, R. (2012, July 14). Beauty map of Britain: Revealed, the skin care divide between London ladies and Yorkshire lasses. The Daily Mail. Retrieved July 2013 from http://www.dailymail.co.uk.
buying more high end beauty products to improve their looks and wellbeing as they consider it important in their careers to look their best, this is reflected in the high spending in London and less in more rural areas of the country. Identifying Sources of Information Here I have identified different sources of Primary and Secondary research. Primary research is mostly used to attain both customer and competitive data; it can produce worthwhile information focusing on specific aspects of the brand.3 Whilst secondary information uses sources already assembled, this can save money and time for an organization but is also useful for putting previous research into better context. (Primary Information) Scientific articles reporting new research in the cosmetic industry. Interviews/questionnaires with customers on purchasing habits or with members of the fashion industry on trends and sales. Focus groups
(Secondary Information) Printed texts e.g. High fashion magazines such as Vogue and Harpers Bazaar to examine current and for coming trends in beauty and fashion. Market research organizations such as, Mintel4 and TNS5 Newspapers, journals, TV Fashion/Beauty blogs
Market research provides detailed and insightful information on changes in the market as well as growing and declining trends. The following report from Mintel explains how an ageing population will affect the facial skincare market, Adults aged over 55 will soon account for 30% of the population and will likely impact the product preferences of facial skincare consumers6. Beauty and fashion blogs are trusted for opinions; customers often check products here before they buy. L'Oral can this to their advantage by sending out new product ranges and inviting them to product launches to gain a better reputation, and create positive PR. This particular post discusses products, which the consumer has been disappointed with7.
Kennaugh, C. (n.d.). Choose a cost-effective market research technique. Retrieved July 2nd, 2013, from Microsoft office website: http://office.microsoft.com/en-us/project-help/choose-a-cost-effective-market-research-technique-HA001142573.aspx 4 Mintel. Retrieved July 2nd, 2013, from http://www.mintel.com TNS Global. Retrieved July 2nd , 2013, from http://www.tnsglobal.com
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Facial Skincare UK May 2013: Issues in the market. (2013). Retrieved July 2nd, 2013, from http://academic.mintel.com/display/638082/ 7 Pebbles, L. (2013). A LITTLE DISAPPOINTED. Retrieved July 2nd, 2013 from http://www.whatihearttoday.com
Conclusion Key points Customers can be ordered into various demographics such as age, location and gender to give basic insight into how these groups vary in requirements. More in-depth research can be used to gain more knowledge on these individual consumer groups, either primary or secondary. L'Oral can gather information needed on how to improve their product ranges and organization as a whole.
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Part Two - Communication with Customers The second section of the report features a PowerPoint presentation, which outlines how L'Oral can use communication strategies to gain a better perspective on their cliental and keep relationships fresh.
The Shannon Weaver model can be applied to almost any type of communication and is easily understood. Within the model are eight key elements critical for communication/transmission to work successfully. SOURCE (The source of communication, how the communication is put into action by the initiator) ENCODER (Specific format that the message should be received as) MESSAGE (The overall message of communication) CHANNEL (How the message is communication either verbal, written etc.) NOISE (This is known as an interruption and disturbance to the communication) Noise comes in different forms for example actual physical noise that distorts sound within a message or a wrong choice of vocabulary when conveying a message. FEEDBACK (Is important to know the message has been received and interpreted accurately). The Schramms model of communication expands on the previous model (Shannon Weaver model) with more of a focus on encoding and decoding the message produced. The model demonstrates two different concepts to understanding communication these are: The Feedback Loop The diagram of field of experience.
Diagram One The top diagram illustrates the feedback loop; this explains how the process of feedback is interpreted within the communication process. The message is passed from the sender to the receiver, and then back again to the sender in which they receive feedback on the message. Diagram Two The bottom diagram illustrates the field of experience. This simply demonstrates how messages may be perceived differently depending on the individ uals personal values and beliefs. Messages are either: Denotative Universal meanings often perceived the same for the majority of people. Connotative Have different connotations for different people There are also a variety of different factors that impact how a message is received such as pitch, accent, facial expression, emotion and language. (This would be seen as Noise as stated in the first slide).
We can apply the communication method in advertising when launching a new range of hair colorants in the following ways: In store promotions and offers (vouchers from fashion magazines) In store demonstrations for instant feedback. Where the product will be positioned in the store should be taken into account, to reduce noise. The environment the product is sold in is also an important factor. (Boots, Superdrug and cosmetic stores) We are made aware of how a message can be received wrongly and thus can take into account these factors to create a clear message when advertising.
E-MAIL The first form of direct marketing I propose to use is E-mail. E-mail is used by most people and is an easy and quick way to target customers and deliver a message, it is also relatively inexpensive yet still effective. There is a better chance of reducing noise when using this form of marketing; messages can be precise and express as much or as little detail as needed which can be tricky to do with other forms of marketing such as TV advertisement. E-mail also reaches out to customers on a personal level, if using mailing lists to customers, individual e-mails addressed to the customer personally will seem more exclusive. Previous users of L'Oral products can be contacted through mailing lists could be even more specified to customers interested in hair products.
INTERNET ADVERTISMENT Relatively low cost in comparison to other forms of advertisement but can be just as effective. Ads can be updated frequently at lower cost and less time. Ads can also be targeted to a specific audience by placing ads in websites the consumer will most likely visit. (Online shopping makeup stores, Boots, Superdrug etc.) and blogs. SOCIAL NETWORK Combine with social networking to interact with consumer. Organizations official Twitter profile and Facebook can promote new products and services directly to the consumer.
Email marketing will help build brand loyalty. Organizations can measure how effective emailing is through: Creating mailing lists for customers to be sent information about the brand and upcoming products, customers can choose themselves to be apart of this. This can help build a sense of trust and commitment to the customer. Emails can also provide exclusive discount codes in which the organization can monitor how successful these are. Consumers can choose from newsletter, to discount offers or specific emails tailored to a product range.
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Social media is a good way to gage the popularity of a brand amongst its customers. We can also view product reviews and opinions on these sites. This goes hand in hand with Internet advertising, clickable advertisements can be shown on the L'Oral Facebook page, or beauty blogs.
Part Three - Maintaining Customer Relationships Discussion Paper The purpose of this discussion paper is to outline how conflict between internal relationships within L'Oral can impact the company in the negative way. It will also summarize some achievable solutions the company can adopt when dealing with conflict between different separate departments of the organization. Findings indicate that conflict can arise in many different forms amongst the organization with lack of communication being a major factor. Examples being the lack of similar goals and poor break down in communication between the marketing and finance department. To conclude solutions can be achieved by, monitoring growing conflict and taking immediate action. Various strategies such as developing interpersonal skills, better organizational structure and leadership can be considered. Background Information Conflict comes in many forms within the workplace and can arise in all departments of the organization. For example the finance department will be concerned with detailed bookkeeping. In contrast the marketing department will want to bring creativity to the company regardless of funds. Big corporations such as L'Oral may think of departments as separate entities, barriers are then built between each department often with little communication and understanding amongst them. We can also look at other sections such as the manufacturers, which have less attachment to the company. They are not fully aware of the wants and needs of their customer and mainly focus on their own sales (4 key steps solve manufacturer & distributor conflicts, 2010)8. This can result in other problems such as incorrect pricing; mistakes in the manufacturing process resulting in slow deliveries and bad communication. L'Oral will expect the manufacture to adhere to strict requirements such as being on time and the products arriving in a certain condition. Whilst manufacturers will expect the organization to have realistic expectations and willingness to a build a relationship with them. Summary of the main issue Conflict can be between any departments within the organization, mostly within sections of the company that dont normally communicate directly. Conflicting goals and budgets. A break down in communication. Can cause problems with customer service.
Recommendations for Resolving Conflict L'Oral must monitor any growing conflict within the company as this reflects on their customer service and reputation if left unsolved. For example if the distribution process went wrong and the customer was unable to get next day delivery, employees providing customer service may be unable to answer customer enquiries and deal with requests effectively. This may cause confusion amongst customers and potential destroy the organizations reputation.
Sell More: 4 Key Steps Solve Manufacturer & Distributor Conflicts. (2010, August 25). Retrieved July 16, 2012 from http://www.mfrtech.com/articles/3799.html
Essential information should be communicated effectively so that all employees should have a basic fundamental knowledge of operation within the organization. This means no confusion over any of the departments, well-informed staff and customers. Proposed strategies Introductory certificate in marketing (2012)9 distinguished some strategies into managing conflict. These are as follows; To develop interpersonal/group process skills i.e. to communicate with other team members allowing conflict to be worked through in a constructive manor as well as gain a better understanding of other view points within the team. Good leadership and management in the form of being responsive and ready to assist when conflict arises. More emphasis on organizational processes such as authority structure and the functioning of the organization itself. More clarification on goals and objectives. Refinement of role definitions and performance standards within the company, this can help to reduce misunderstandings and smooth over any hostility.
Conclusion: A conclusion to conflict can be reached through administering a series of solutions such as developing employees communication skills with other workers; this could be done through team building workshops or organizational meetings. Good leadership and management are also essential for clear goals to be accomplished. When the message is clear employees will aim towards the same goal, and workers will more informed and also harder working. Overall this will result in a better working environment for employees, reflect upon their attitude and productivity. When this is achieved customer service will improve and customers will continue to view the brand in a positive light. To Summarize L'Oral monitors growing conflict. When conflict grows, the organization will take action. Various solutions can be put into practice (team building, meetings, checks on departments, reinforcement of corporate goals, better leadership). Keep solutions ongoing in order to create a better working environment all year round. Record progress in these solutions and continue to monitor any other conflict.
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Introductory certificate in marketing. (2012). London: BPP Learning Media Ltd.
Part Four - Communication Skills The aim of this section of the report is to outline the importance of time management and reflect upon my own experience of this matter in light of my findings. My key findings on time management This particular article goes in-depth into how manage your time in the best way possible with practical solutions. 5 ways to find time in your tight schedule (Peters, 2013, p.29)10 claims the top five ways to managing your time are as follows; Getting active (One U.K study of 200 people found that people were happier, less stressed and more productive on the days they exercised)11 Planning (Plan ahead of time to keep ahead of future goals and keep your department new and fresh). Sleep (An adequate amount of sleep increases attention span and ultimately productivity). Professional Development (Keep on top of training by participating in learning and development programs). Time off (Give yourself time to rest and take a break. Not only does this lessen the stress but it will allow you to be inspired and look at things from a different perspective).
Building upon this more basic time management tips are included in (Easy timemanagement tips, 2011)12 such as making to do lists, making sure work is of a high quality rather than quantity and prioritizing more important tasks. Reviewing and identifying for self-improvement To get a better understanding of my personal management skills I took an online test How Good is your Time Management13 (see appendix 2). The test asked a variety of questions such as Do you set aside time for planning and scheduling? and Are you stressed about deadlines and commitments? both of which I answered very often. The test scored me at 47 putting me in the first band in which I manage my time very effectively. Below this the score then gave me individual marks on goal setting, prioritization, managing interruptions, procrastination and scheduling. Goal setting and procrastination were my weakest scores and therefore I should focus improving on these. The test gave the following suggestions; To combat procrastination, consider rewarding yourself for getting jobs done. Continue to remind yourself the consequences of not getting certain jobs finished. Time and effort put into setting goals will save on time in the long run. Setting personal goals can also reduce stress and frustration. Reflecting upon the test I would feel I would benefit from creating ordered schedules of work. This is something I adopt during exam period, creating a clear structure of my studies is easy
10 11 12 Peters, D. (2013, January/February). Squeezed for time. CMA Magazine, 29-30. Peters, D. (2013, January/February). Squeezed for time. CMA Magazine, 29-30
Easy time-management tips. (2011). Retrieved July 20, 2013, from the NHS website: http://www.nhs.uk/Conditions/stressanxiety-depression/Pages/time-management-tips.aspx 13 How Good is Your Time Management? Retrieved August 16, 2013, from http://www.mindtools.com/pages/article/newHTE_88.htm
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to follow, particularly in a time when I can become very stressed. As well as this I will take more care to think over why I am doing certain tasks and what the outcome will be in order to avoid overly procrastinating. In a professional environment I find frequent training useful to keep me engaged. Whilst working at Waitrose as a customer service assistant being behind the tills, it was easy for me to become more relaxed and slow down in my role. I was able to update my training every few weeks this allowed me stay on top of my goals as well as refresh my memory and learn new procedures. With these considerations in the future I will give myself time to plan out my tasks in detail and pace myself. I will also benefit from reviewing my time management skills regularly in order to improve.
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Bibliography
Easy time-management tips. (2011). Retrieved July 20, 2013, from the NHS website: http://www.nhs.uk/Conditions/stress-anxiety-depression/Pages/time-management-tips.aspx Facial Skincare UK May 2013: Issues in the market. (2013). Retrieved July 2nd, 2013, from http://academic.mintel.com/display/638082/ How Good is Your Time Management? Retrieved August 16, 2013, from http://www.mindtools.com/pages/article/newHTE_88.htm Introductory certificate in marketing. (2012). London: BPP Learning Media Ltd. Kennaugh, C. (n.d.). Choose a cost-effective market research technique. Retrieved July 2nd, 2013, from Microsoft office website: http://office.microsoft.com/en-us/project-help/choose-a-cost-effectivemarket-research-technique-HA001142573.aspx Mann, R. (2013). LOral confirms strong growth in sales and profits fo r 2012. Retrieved August 17, 2013, from http://www.moodiereport.com/document.php?c_id=29&doc_id=34158 Mintel. Retrieved July 2nd, 2013, from http://www.mintel.com Pebbles, L. (2013). A LITTLE DISAPPOINTED. Retrieved July 2nd, 2013 from http://www.whatihearttoday.com Peters, D. (2013, January/February). Squeezed for time. CMA Magazine, 29-30. Sell More: 4 Key Steps Solve Manufacturer & Distributor Conflicts. (2010, August 25). Retrieved July 16, 2012 from http://www.mfrtech.com/articles/3799.html Taylor, R. (2012, July 14). Beauty map of Britain: Revealed, the skin care divide between London ladies and Yorkshire lasses. The Daily Mail. Retrieved July 2013 from http://www.dailymail.co.uk.
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APPENDIX 1 Organization Summary

Organization Name Size E.g. L'Oral The L'Oral group is the worlds largest cosmetics and beauty company. Sales of 22.46 billion for 2012 2012 was a good year for LOral on many fronts. The group achieved strong sales growth, and once again demonstrated its ability to outperform the beauty market, and to gain market share, even in the more difficult markets of Western Europe and the US14
s turnover Number of employees
Type E.g.
Profit/non-profit Local/national/global Legal entity
Profit Worldwide Global (Head office in Paris, USA headquarters in New York City)
Products/services/supplied
Cosmetics and Beauty (Skincare, Sun protection, Make-up, hair care) B2C Because youre worth it Buying on behalf of themselves B2B Salon owners All ages from teenagers to elderly. Mature people targeted with anti-ageing skincare. L'Oral dominates most of the cosmetic industry, owns luxury brands such as (Lancme, Urban Decay and Shu Uemura) and high street brands (Garnier, Maybelline and Essie) to name a few. Major competitor is Este Lauder, owns other high - end makeup brands (M.A.C, Tom
Customer base E.g. B2B/B2C Distributors & end-users Types of end user customer
Competitors
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Mann, R. (2013). LOral confirms strong growth in sales and profits for 2012. Retrieved August 17, 2013, from http://www.moodiereport.com/document.php?c_id=29&doc_id=34158
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Ford, Bobbi Brown and Clinique). Other important stakeholders
Global Employees (Rates of pay, communication, welfare). Customers (Customer care, ethical products, quality of the product). Investors (return on investment). Trade Unions (Working for higher pay rates and better working conditions). Environment (Factorys overseas, pollution and how does this effect the environment around them).
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APPENDIX 2 Time Management Quiz Results (from www.mindtools.com)
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Understanding Customer Relationships - 38419848

Introductory Certificate in Marketing