Mobile customer relationship marketing: a tool to create competitive advantage within the licensed liquor industry

Abstract

The advent of IT technology in particular, mobile technology has forced most of the private sector to re-evaluate how they interact and communicate with their intermediaries. Since the early 1990s most businesses have put the intermediary at the centre of their business by means of business strategies like Customer Relationship Management (CRM) solutions. However, the speed at which technology is evolving is forcing businesses to evaluate new and alternative means of managing intermediary relationships, as intermediaries now drive the economy, not businesses. The very essence of a good CRM programme is its reliance on an IT system which is advanced enough to analyse the captured intermediary data, transform that data into usable knowledge, which is then stored in a centralised, crossfunctional database or data warehouse. Most businesses agree that the goal of CRM solutions is to maximise business profits by maximising the value of interaction with intermediaries. Successful CRM businesses have strong, clearly defined business strategies that focus on the intermediary and generate a process-orientated view of the organisation. CRM functionality therefore creates a single view of the intermediary and the business as well as support to the Marketing, Sales, Order, Production and Service processes. This dissertation investigated the CRM functionality within the Fast Moving Consumer Goods (FMCG) wholesale and retail liquor sector of the City of Cape Town, paying particular attention to the three channels that the liquor industry operate in. These three channels are segmented as the formal Off-premise consumption, formal On-premise consumption and the Informal Main market. The formal Off-premise consumption channel consist of the mainstream convenience and self-service liquor retailers where stock is purchased and consumed at another location by the end user. The formal On-premise consumption channel consists of venues where patrons purchase and consume liquor on the spot. The informal Main market, which is dominated by shebeens and taverns, is a combination of the Off- and On-premise consumption channels where bottle purchases and consumption occur on site together. This dissertation investigates one primary and four secondary questions within these channels. The primary question will establish whether a mobile CRM programme can be used as a marketing instrument to create a competitive advantage within the B2B licensed liquor industry of South Africa. The secondary questions establish whether intermediaries are willing to adopt CRM technology, what barriers exist, what the benefits are for both intermediary and company and whether there will be a reduction in communication costs for both parties. The South African government regulates the South African liquor industry in that only licensed outlets may trade in liquor. Within the Western Cape region, there are approximately 4,000 licensed outlets of which approximately 2,000 licences (data obtained from a leading liquor wholesalers company database) fall within the boundaries of Cape Town. A leading liquor wholesaler has legal contracts with each one of these accounts, providing a defined database from which primary research was conducted. Primary researches, in the form of quantitative interviews with a random sample of 150 intermediaries, across the three identified channels were conducted for this study. Questionnaires were used to establish how a competitive B2B mobile CRM programme can be implemented, while possible barriers and facilitators to mobile CRM were also considered. The findings produced two results: one result was expected but the second result was not expected by the researcher. The first results were that 57.5% of respondents, across all business channels, indicated their willingness to receiving a mCRM programme on their mobile devices. The unexpected finding was that 57.3% of respondents across all business channels had no idea or did not know what a CRM programme was. From these findings several recommendations are discussed namely: the implementation of a six month tactical marketing campaign which would expose intermediaries to the concepts and ideas of a CRM programme; the establishment of a comprehensively updated intermediary database; welltrained field sales staff who would support the CRM programme once implemented; a simple, easy to use and navigate mCRM programme to begin with. This programme would have to have the ability and capability to progress in the future as intermediaries become more familiar with the system; and a complete company philosophy, with a clear, holistic and coherent business strategy, that would embrace the mCRM concept to drive future growth opportunities. Key Words: business-to-business; customer relationship management; electronic customer relationship management; Information Technology and mobile customer relationship management.