Analysis of CRM programs practiced by passengers' airline industry of india and its impact on customer satisfaction and loyalty

Authored by :

Ehsan Ahadmotlaghi,
Department of Management Sci. Pune University, Pune, India

Dr. Prafulla Pawar,
Department of Management Sci. Pune University, Pune, India

Companies have changed their business strategies tremendously because of environmental changes affecting all industries recently. Focusing on customers as the main parameter in all businesses and based on shifting from product oriented to market oriented industry. As a result of this, competition has increased between the companies in the market, where each company has to work out a strong up-dated competitive strategy if they want to stay in the business (Lindbom & Jonsson, 1992). Moreover, a key driver of this change is the advent of CRM which is underpinned by information and communication technologies (Ryals & Knox, 2001). By using information and communication technology, businesses are trying to get closer to the customer so that they can create long-term relationships and gain more knowledge from and about the customers. Firms are embracing CRM as a major element of business strategy, because technological applications permit a precise segmentation, profiling and targeting of customers and competitive pressures require a customer-centric culture (Gurau, Ranchhod, &Hackney, 2003). The goal of service companies including airlines is to develop services which attract and keep customers who are satisfied, loyal and speak well of the airline (Gustafsson et al, 1999). Organizations and companies should also notice that they will be more successful if they concentrate on acquiring and sustaining a share of each customer rather than a share of the entire market (Park & Kim, 2003). Recognition of competitors as main environmental issue and considering the current competition in business world has become the main struggling field for the airlines.
CRM is an essential component of the corporate strategy of airline companies to differentiate themselves from competitors in the eyes of the customer (Boland et al., 2002). CRM is an evolving management topic which most business firms are focusing on as a competitive advantage strategy and tool (Khalifa & Liu, 2003; Ngai, 2005), and airline industries are employing this strategy to individualize their service offer, create better communicational channels with customers and ensure higher quality offer to crate satisfaction of customers as the base of loyalty.
REVIEW OF LITERATURE:
CRM:
Andrade (2003) believes CRM is based on the ability to facilitate communication and decision-making to provide consistent, high-quality, and cost-effective services to all stakeholders. Form individualized service perspective; CRM is a concept that enables an organization to tailor specific products or services to each individual customer. In the most advanced scenario, CRM may be used to create a personalized, one-to-one experience that will give the individual customer a sense of being cared for, thus opening up new marketing opportunities based on the preferences and history of the customer (Wilson, et al., 2002).
CRM is a set of business processes and overall policies designed to capture, retain and provide service to customers (Scott, 2001), or a coherent and complete set of processes and technologies for managing relationships with current and potential customers and associates of the company, using the marketing, sales and service departments, regardless of the channel of communication (Injazz and Karen, 2004). According to Swift (2001), CRM is a process designed to collect data related to customers, to grasp features of customers, and to apply those qualities in specific marketing activities. Consider the following summary from Peelen (2005) supplemented by other sources as mentioned. CRM is:

1. A comprehensive development process
   
2. Customer differentiation
   
3. Data warehousing and mining
   
4. The core business strategy
   
5. Integrated collaboration
   
6. Empowering the customer (Newell, 2003)
   
7. A total company reorientation (Buttle, 2005)
   
8. Customization in products or services (Sharp, 2003)
   
9. Building mutual value (Peele, 2005; Targetbase, 2001)
   
10. Building customer equity (Gupta and Lehman, 2005; Shaw, 2001)