Pizza Hut Customer Relationship Management Strategy

Published Date: 02 Nov 2017

1.1 Introduction

This research is conducted on determining the key elements which play their role towards the success of Pizza Hut customer relationship management strategy. The strategy used by the researcher is case study where as the researcher used deductive approach to conduct this research. In addition to this, the research used qualitative data analysis technique to conduct the analysis of the data. The researcher used non probability sampling technique where judgment sampling has been used by the researcher in order to collect the data. The researcher used interview questions where semi structured interviews have been to collect the research data. All the factors which support the CRM philosophy in Pizza Hut have been collected and recommendations have been given on those elements which are not so supportive.

Research Question

How different components of Customer Relationship Management (CRM) play their role in improving the performance of the company.

Research Title

Analysis of factors affecting CRM in Pizza Hut

Objectives

To analyze the components of CRM strategy of any business

To collect the most important factors which play positive role in supporting CRM strategy of Pizza Hut

To give suggestions on those factors which do not play vital role in Pizza Hut CRM Strategy

Aim

CRM is a philosophy and the Researcher is willing to determine the critical success factors to activate this philosophy in Pizza Hut. CRM has three components including people, processes and technology and these three components should act interactively to ensure the success of customer relationship management in any business. The practical implications of developing and managing relationships with different companies have been explained through this research report.

2.1 Literature Review

Customer relationship management is determined as developing long term relationships with the customers and it is highly concerned with the three elements including people, processes and technology. Booms (2004) highlighted that people are the employees of the company who play vital role in developing long term relationships with the customers. He further related that employees need certain degree of training and development for providing better services to the customers and to deliver consistent brand image to the customers. Bravo (2010) narrated that training is highly important for delivering valuable services to the customers especially in services business as in service customer service employees are part and parcel of delivering services to the customers. Bailey (1994) highlighted that services require higher efforts to be delivered in similar ways as compared to physical products as there is need of higher degree of persistency from the service providers. He further narrated that employees should be provided with higher degree of training and development to provide services to the customers in service business due to inseparability and non storability of service process. Bravo (2010) highlighted that employees are trained and developed on service business through leadership skills and competencies in fast food businesses as employees who serve to the customers and who are in the production (kitchen) are trained and developed by the experience staff and some time by the managers where these employees are continuously watched and overlooked by the managers. Philips (2010) stated that employees are trained through coaching and mentoring approaches by the managers where employees are encouraged to learn certain behaviours and employees are told to perform those behaviours on continuous basis. In addition to this, employees find chance to get live and on time experiences through their seniors and managers where different companies manage to develop the quality and standards of their services in order to maintain the image of their brand which eventually supports in developing long term relationships with the customers by providing them consistent and valuable services through well trained and developed workforce. Golap (2004) highlighted that companies usually appraise the performances of their employees for those key performance indicators which supports in engaging their customers with the service process as a result employees highly focus in developing long term relationships with the customers. He further highlighted that employees are also reviewed by their managers on monthly basis and managers discuss and brief any deficiencies found in their customers’ services skills in services businesses. He further narrated that organizations are now developing such reward system where rewards are based on getting long run business for the companies. For instance, in Barclays bank employees are rewarded for getting long term business for Barclays as leadership of the bank discourages employees for gaining business where employees’ needs are not well discussed with the customers. Employees are guided to get long term business for the bank by increasing customer awareness about different products offered by the bank and by suggesting customers different options for them but not forcing them to take decisions about certain products so that they can exactly take decisions on the basis of their will and on the basis of their ability to have long term business with Barclays and ultimately this approach result in developing long term relationships with the customers.

Gupta (2001) highlighted that developing long term relationships with the customers also depend on different business processes performed by the company as there are different business processes which must be managed accordingly and appropriately in order to have long term relationship with the customers. He further highlighted that managing and maintaining internal quality of the business is one of the key elements to manage relationships with the customers and quality is not as simple as it starts with maintaining the quality of the suppliers. The quality products improve the company image and customers start relying on certain brand. There are several elements in explaining the process in this context. Firstly, customer relationship management process can be tackled through maintaining the customer loyalty as companies offer different rewards and benefits to their customers in order to gain repeat purchase through their customers. He further highlighted that gaining customer loyalty includes different stages where customers start trusting on certain brands with the passage of time based on their experiences with that brand. One of the important factors which play vital role in gaining repeat purchase is offering rewards to customers based on their previous purchases and companies which usually recognize and appreciate their valued customers have strong customer base as compared to those companies which do not recognize their high valued customers.

Guru (2009) stated that technology also plays an important role in managing relationships with the customers. Technology offers data base to the companies where companies manage the information about their customers and suppliers. Guru further highlighted that technology has supported companies in many ways as suppliers of companies have been provided with shared data base where they can access the information relating to them. This shared data base helped companies in gaining efficient delivery of their products in order to support the production and secondly to avoid their storage cost. Philips (2010) indicated that organizations also manage relationships with their customers due to technology as different software have been introduced which automatically store and save different customers buying habits, patters and preferences where companies become better able to deal with the customers’ requirements and on the other hand they also become able to manage their supplies by prioritizing those products which are high in demand. Guru (2009) further stated that technology also results in developing coordination and cooperation among different departments of an organization as different departments communicate and speak with each others in order to minimize discrepancies and to support harmony and encourage smoothness and consistency in the organizational operations.

3.1 Methodology

Cohen (2006) narrated that methodology is the route which provides overall direction to the research process and it supports different actions taken by the researcher and steps followed by the researcher to conduct the research process through evidences of previous researches and available literature. This route is selected to prove that each step of the research process is very much valid and authentic for the research process.

3.2 Research Approach

Corbett (2007) highlighted that there are mainly two research approaches which are known as inductive and deductive research approaches. Cohen (2006) narrated that deductive research approach is the one which starts from one or more general statement or a research question and moves to achieve specific and certain conclusion. In inductive reasoning the research moves from more specific idea to general situation. Sekaran (2009) highlighted that inductive reasoning is not used in scientific research as it moves from specific to general which is against the scientific principles. In contrast to this, while in inductive research the research starts with some questions or assumptions where researcher collects the data on the basis of those assumptions or questions using available literature under secondary research. Having understood the difference between these two research approaches the researcher has decided that this research is also a deductive research.

3.3 Research Strategy

Denscombe (2007) stated that there may be different strategies to conduct the research process including case study and survey research. Survey is more likely to be conducted in wide population through interviewing or questionnaires. It is basically conducted to get opinions of different people on certain issues in order to categorize or segregate the people on the basis of their opinions or to find trends in the research population. Pickard (2006), on the other hand narrated that case study research is basically conducted to examine an issue within certain organization in order to determine the most important factors regarding any issue. Having understood the difference between these two types of research strategies the researcher has decided to select case study strategy. In this research, the researcher has to collect data from Pizza Hut staff in order to determine the key elements which play vital role in developing and managing its customer base. The combination of different opinions would help in contrasting the views of different people and collecting most reliable views of available respondents.

3.4 Data collection

Denscombe (2007) stated that the data for a research may be collected in three different stages which are known as preliminary data collection, secondary data collection and primary data collection. Preliminary data collection is the stage where data is collected for selecting the research topic, secondary data collection is the data collection stage where data is collected for reviewing the research literature and primary data collection is the data collection stage where data is collected from research respondents. These three stages of data collection have also been used for this research as well. The preliminary and secondary data is collected through journal articles, books, websites, online and off line libraries and different other publications. The primary data for this research is collected through research interviews.

3.5 Data analysis

Cohen (2006) stated that there are basically two approaches to analyze the research data including qualitative and quantitative data analysis approaches; Qualitative data analysis is the one where analysis is based on explanations and detail interviews through the respondents whereas qualitative research analysis is conducted where data is collected through numbers or units. Having understood the difference between these two types of research the researcher has decided that qualitative data analysis approach will be used for this research whereas Qualitative data analysis is the one where data is contained details, explanations, descriptions, reasoning, feelings and observations. The factors which affect the CRM philosophy of Pizza Hut have been briefly discussed with the respondents and detailed interviews have supported the researcher in collecting more and more information about the research issue which is factors affecting customer relationship management philosophy of Pizza Hut.

3.6 Research interviews

Corbett (2007) indicated that there are different types of interviews depending upon their structure and these include structured interviews, non structured interviews and semi structured interviews. The researcher has decided to use semi structured interviews for this investigation as the researcher has tried to exhibit flexibility during the process of interviewing as semi structured interviews are those interviews in which researcher can even ask extra questions apart from the set patterns and these interviews allow flexibility to both candidates participating in the process of interviewing. In addition to this, researcher used open questions to the respondents in order to take detailed information from the respondents.

3.7 Research Sampling

Sekaran (2009) indicated that there are mainly two sampling techniques known as probability and non probability sampling. She explained that if there are equal chances of selection of each member in the research population then sampling is said to be as probability sampling and if there are no equal chances of selection then the sampling technique is said to be as non probability sampling. As there are no equal chances of selection of the research population hence this research is considered as non probability sampling research. The research has used judgment sampling as the researcher just considered that these respondents as selected by the researcher would show the characteristics of entire population so there is less probability to generalize the research results over the large population due to small size of sample. The researcher only conducted 5 interviews in Pizza Hut to analyze their customer relationship management strategy of Pizza Hut. Two front door employees, one kitchen staff, one team leader and a manager has been interviewed by the researcher.

3.8 Research Validity

Most relevant methods which are also supported by the evidences have been used for this research which indicates research validity as research topic is factors affecting the customer relationship management philosophy in Pizza Hut and researcher used deductive approach to conduct this research through using case study strategy as the researcher need to get in depth information about the research topic.

3.9 Research Reliability

The researcher tried to measure the same for which he claimed to measure as in this research the researcher found those factors which support the CRM philosophy in Pizza Hut and which hider the CRM philosophy in Pizza Hut. The researcher interviewed the staff to understand about role of people, processes and technology in Pizza Hut towards management of its customers. The research topic claimed to analyze factors affecting the CRM in Pizza Hut and the researcher directed the research to measure the same.

3.10 Ethical considerations

The research process should be ethical strong and the research should take care of the ethical considerations in order to get authentic results. The researcher took prior appointments before conducting the research interviews. The researcher also took consents from the participants so that they can willingly participate in the research process. In addition to this, the researcher also communicated aim and objectives of the research with the participants so that they can understand the theme of the research. The research also ensured that this is an academic research and all the data collected from the participants would be surely used for academic purposes and confidentiality and privacy of the participants will be maintained.

4.1 Data Analysis and findings

The data collected from the respondents have been analyzed by the researcher and summarized in the form of research findings which also supported in giving recommendations to the research.

4.2 Role of training and development of employees in CRM

One of the Customer Service Representatives (CSR) revealed that Pizza Hut front door staff is given proper training and development to learn certain attitudes and behaviours to serve and deal with the customers. Other CSR explained that our team leaders and manager are very much supportive and helpful in training and equipping us with different customer service skills through coaching as our senior employees sometime observe us when we perform and they take corrective measures to improve our interpersonal and customer dealing skills. They also said that we are offered with product knowledge before we stand in front of the customers. One of the kitchen staff highlighted that we get two weeks training through our seniors to give consistent quality and our products during that period are mostly distributed among the staff to manage and improve the quality and taste and to maintain the image of the brand. Team leader and manager also stated that Pizza Hut offered us training and development to improve our leadership skills so that we can understand the needs of the customers to offer them appropriate and relative experiences and equip them with skills to perform their duties.

4.3 Role of data base management towards managing relationships with the customers

One of the CSRs highlighted that Pizza Hut manages the data base of its customers in order to keep track on its customers and in order to understand customers’ preferences and changing trends and demands of the customers. The manager highlighted that we do have record of our valued customers and once our valued customers come to us we can track their buying history. Pizza Hut kitchen staff indicated that our order screen in the kitchen tell us about our regular and valued customers as well.

4.4 Loyalty cards and customer relationship management

Pizza hut does not offer customers loyalty cards and rewards on the basis of their past purchases but Pizza Hut always give rewards and benefits to its customers based on their different promotional and packages deals and offers. Buy on get one free is one of the packages, Pizza Hut Tuesday offer, Pizza Hut Monday offer, Pizza Hut family offer and many more packages are available in Pizza Hut but company does not offer benefits to its customers on the basis of their previous records. Customers are usually offered rewards on their each purchase where they can get greater benefits once they improve the quantities of their orders but the company does not have such long term approach to retain its customers.

4.5 Information technology and CRM

Pizza Hut manages its inter departmental relationships with the help of increased level of technology where information system allows different departments to share their knowledge and experiences with others in order to improve harmony and synchronization in the products and services offered by Pizza Hut.

4.6 Product innovation and CRM

The manager Pizza Hut highlighted that Pizza Hut offers innovative products to its customers on every new month where no other competitors meet the Pizza Hut innovation strategy. Pizza Hut is also known for its innovative products in the market and people expect to have new products from Pizza Hut in the form of its different meals, Pizzas, Desserts and even in the form of Pizza Hut special salads either in eat in or in take away deals.

4.7 Uncertain customers to manage the quality of operations

All the respondents highlighted that Pizza Hut manages the quality of its operations and products through putting a check in the form of sudden customers where this customer comes suddenly in three months time to find deficiencies in the quality standards either in the form of services or in the form of products offered by the company. Pizza Hut staffs remains very alert due to that check implemented by the company in order to improve the quality of Pizza Hut products and operations.

5.1 Conclusion and Recommendations

Pizza Hut should offer loyalty cards and benefits to its customers on the basis of their long term purchases for the company as company should retain its customer base for their nice purchasing history as well.

Pizza Hut should not offer innovative products so quickly in each month as people sometime could not be in position to decide which is suited to them for ever changing products offering by the company.

Pizza Hut should also offer training and development to have effective team work in Pizza Hut. Pizza Hut should offer different training sessions to its different staff in order to improve cooperation and coordination to improve the overall customers’ satisfaction in Pizza Hut and to develop long term relationships with its customers.

Pizza Hut should also make an effective use of technology to have strong relationships with its suppliers so that cooperation and coordination with the suppliers can be improved which would ultimately assist in developing long term relationship with the customers and in managing its relationships with its customers.

References

Bailey, D. (1994) "How to Avoid Being Bullied by Unreasonable Customers", Managing Service Quality, Vol. 4 Iss: 5, pp.36 – 38

Booms, B.H., (2004), "The Service Encounter: Diagnosing Favorable and Unfavorable Incidents", Journal of Marketing, Vol. 54 No.January, pp.71-84.

Bravo, M., and Philips, B. (2010). Switching barriers in consumer markets. Journal of Consumer Marketing, 8(4), 23–147.

Cohen, L. (2006). Research Methods in Education. London: Routledge Falmer.

Corbett, P. (2007). Social Research Theory, Methods and Techniques. London: SAGE Publications.

Denscombe, M. 2007. The good research guide for small-scale social research projects. 3rd ed. Maidenhead, UK: Open University Press. 360 pages. ISBN: 0335220223. $48.50 (pbk).

Golap, S. (2004). Winning the Customer loyalty. Journal of the Academy of Marketing Science, 9(4), 49–113.

Gupta, A.K. (2001), "Strategic innovation: a conceptual road map", Business Horizons, No.July-August, pp.3-12.

Guru, C. (2009), "Measuring customer satisfaction: a platform for calculating, predicting and increasing customer profitability", Journal of Targeting, Measurement & Analysis for Marketing, Vol. 10 No.3, pp.203-20.

Pickard, A. (2006) Research Methods in Information. London: Facet Publishing.

Sakaran, U. (2009). Research methods for business: A skills building approach. 4th ed. Partab publishers, Mumbai.