MKT610 Assignment Solution & Discussion Fall 2011

Case Study

Beauty options is a local, cosmetic company selling beauty products like mineral make-up and

herbal solutions to different skin and hair types. At the onset of their beauty business they

implemented CRM systems. While doing this they implemented regular Sales force automation,

campaign management, and call center systems. These systems offered advantages like handling

more calls per agent, running more marketing campaigns etc. Marketing campaigns were run on a

massive scale with different dimensions and in different cities of the country. These advantages

however were not able to produce more sales. Later on the company management was advised to

implement business intelligence software along with the aforesaid CRM systems. With the help of

business intelligence software, beauty options can now predict how individual customers behave,

revealing hidden patterns in sales data. Now customers can be grouped into different segments

according to similar behavior characteristics. It can further determine which products or services a

particular customer is more likely to buy thus assessing profitability of customers by comparing costs

incurred on each customer against the revenue that she generates. This enables beauty options to

point out the most profitable customers—the 20% of customers generating 80% of profits. At the

same time it tracks down customers who have the probability of being defected and also the

unprofitable customers who can be persuaded to buy less-expensive products. All this information

yet reaps further benefits to the organization in the shape of designing more refined marketing and

advertising campaigns targeted at specific customer segments. Different segments of customers were

approached with different messages and product options thereby matching customer needs with

available product options and promotional offers. More so, call centers were able to do cross-selling

or up-selling of the relevant products to targeted customers. Since the implementation of marketing

intelligence system, response rates of customers have increased, sales have increased and the costs of

marketing and advertising campaigns have decreased drastically.

After five years of successful implementation of marketing intelligence system the organization

assessed the factors that lead to customer loyalty among their well-chartered customer base. The

expectations of the customers were duly and consistently being fulfilled and sometimes the customers

have reported to be delighted by the unusual surprises of promotional offers offered by the company.

70% of the customers have emotional attachment with the images of the company. They identify with

the brand since the brand provides them ground for getting emotionally associated and affiliated with

the brand name. More important than this many customers have a record of trust with the brand name

and show their confidence that the stated brand promises will be fulfilled. Brand switching has also

been seen to be very little in the customers of beauty options and they prefer to opt for beauty options

instead of exploring and searching the market.

Requirements

Q. Identify at least three advantages of regular CRM systems. (3 marks)

Q. Analyze how beauty options brought changes in the way of doing business with their customers.

Provide at least seven different changes that were brought by beauty options.

(7 marks)

Q. Evaluate the effectiveness of the aforesaid changes in terms of customer loyalty among the wellchartered

customer base of Beauty options. Discuss at least five such measures of effectiveness. (5

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