Tài liệu Application of customer relationship management in vietnamese trading smes

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --------------------- PHAN TÙNG APPLICATION OF CUSTOMER RELATIONSHIP MANAGEMENT IN VIETNAMESE TRADING SMES ỨNG DỤNG QUẢN TRỊ QUAN HỆ KHÁCH HÀNG TRONG DOANH NGHIỆP THƢƠNG MẠI VỪA VÀ NHỎ TẠI VIỆT NAM LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2018 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --------------------- PHAN TÙNG APPLICATION OF CUSTOMER RELATIONSHIP MANAGEMENT IN VIETNAMESE TRADING SMES ỨNG DỤNG QUẢN TRỊ QUAN HỆ KHÁCH HÀNG TRONG DOANH NGHIỆP THƢƠNG MẠI VỪA VÀ NHỎ TẠI VIỆT NAM Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƢỜI HƢỚNG DẪN KHOA HỌC: TS. NGÔ VI DŨNG Hà Nội - 2018 STATEMENT The author confirms that the research outcome in the thesis is the result of author‘s independent work during study and research period and it is not yet published in other‘s research and article. The other‘s research result and documentation (extraction, table, figure, formula,and other document) used in the thesis are cited properly and the permission (if required) is given. The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business, and the laws for above-mentioned declaration. Phan Tung ACKNOWLEDGEMENT First and foremost, I would like to express my sincere gratitude to my supervisor, PhDDr. NGO VI DUNG, at the Hanoi School of Business and Management (HSB), Vietnam National University (VNU) for his detailed guidances and valued advices. Without his guidance and persistent help this thesis would not have been completed. I would like to express my great thank to all my colleagues and friends for their warmly support during my thesis. My special thanks come to DNS management and staffs for all encourages and supports during the whole my MBA course. Last but not least, I would like to express my deeply thank to my wife, my children, family members and friends. They were the one that are always beside me and supporting me during all the process. Phan Tung ABSTRACT This paper aimed to identify the key antecedentsof CRM application and barrier factors that Vietnam SMEs faced when implementing CRM and provide some suggestions to improving the stated process. Based on qualitatitive research using focus group discussion method and quantitative survey analysis as supplementation, we found that there are 6 key antecedents of CRM application as follow: (1) Relationship Marketing, (2) Knowledge Management, (3) Motivation of Innovation, (4) Technological Resources, (5) Human Resource Development, (6) Change Management; and 5 key barrier factors that have negative impact to Vietnam SMEs‘ CRM implementation process as follow: (1) Changing Business Culture and Cross functional interaction, (2) Lacks of Customer Knowledge Management Ability, (3) Lacks of new processes and standards, (4) Lacks of skillful Human Resources and, (5) Information Security Threats. Furthermore, the key antecedents of CRM implementation in Vietnam SMEs are Relationship Marketing, Knowledge Management, Change Management, Human Resource Development, Technological Resources and Motivation of Innovation. Implications for top managements of Vietnam SMEs for improving CRM implementation and future research were also suggested. TABLE OF CONTENTS ABBREVIATION ..................................................................................................... iii LIST OF TABLE ................................................................................................... iiiiii LIST OF FIGURES.............................................................................................iiiiiiiii Formatted: Font: No underline, Font color: Auto, Not Expanded by / Condensed by Formatted: Space Before: 0 pt, Line spacing: 1.5 lines CHAPTER 1: INTRODUCTION ...........................................................................114 1.1. Rationale ......................................................................................................114 1.2. Research Objectives.....................................................................................336 1.3. Subject and Scope of Research ....................................................................336 1.4. Structure of the thesis ..................................................................................336 CHAPTER 2: THEORETICAL BACKGROUND.................................................558 2.1. Definition of CRM and its conceptualization problems ..............................558 Formatted: Space Before: 0 pt, Line spacing: 1.5 lines 2.2. Benefits or objectives of business when implementing CRM ...................8811 2.3. Key factors for success and barriers of CRM application .....................101012 2.4. Key antecedents of CRM application ....................................................111114 2.5. Hypotheses development and research model .......................................202023 2.5.1. Background of Vietnam SMEs ....................................................202023 2.5.2. Barriers of CRM implementation in Vietnam SMEs ...................212124 2.5.3. Research Model ............................................................................262629 2.6. Chapter Brief..........................................................................................282831 CHAPTER 3: METHODOLOGY ....................................................................292932 3.1. Research design .....................................................................................292932 Formatted: Space Before: 0 pt, Line spacing: 1.5 lines 3.2. Data sources and data collection............................................................313134 3.3 Qualitative research ................................................................................313134 3.4. Research measurements .........................................................................363639 3.5. Quantitative research .............................................................................383841 3.6. Validity and reliability ...........................................................................393942 3.7. Ethical consideration..............................................................................404043 3.8. Chapter brief ..........................................................................................404043 CHAPTER 4: RESULTS AND DISCUSSIONS..............................................414144 Formatted: Space Before: 0 pt, Line spacing: 1.5 lines 4.1. Sample description .................................................................................414144 4.2. Results of focus group discussion..........................................................414144 4.3. Results of survey....................................................................................424245 4.4. Discussion on the results .......................................................................454548 4.5. Chapter brief ..........................................................................................525255 CHAPTER 5: CONCLUSIONS, LIMITATIONS AND IMPLICATIONS.....535356 5.1. Conclusions ............................................................................................535356 Formatted: Space Before: 0 pt, Line spacing: 1.5 lines 5.2. Implications and suggestions for Vietnam SMEs ...............................545457 5.3. Limitations .............................................................................................606063 5.4. Recommendation for future research.....................................................616164 REFERENCES ..................................................................................................626265 APPENDIX I: QUESTIONNAIRE ..................................................................787074 Formatted: Space Before: 0 pt, Line spacing: 1.5 lines ABBREVIATION 1. CRM: Customer Relationship Management 2. SMEs: Small and Medium Enterprises 3. AI: artificial intelligence 4. SFA: Sale force automation 5. KMS: Knowledge Management System 6. RM: Relationship Marketing 7. ERP: Enterprise resource planning 8. NPD: New product development 9. BPS: Business process standardization 10. BPR: Business process reengineering 8. Formatted: Indent: Left: 1.27 cm, No bullets or numbering i LIST OF TABLE Formatted: Line spacing: 1.5 lines Table 2.1: Benefit of successfully CRM implementation ...........................................9 Table 2.2: Success factors for CRM implementation ...............................................10 Table 2.3: Barriers factors identified by previous studies ........................................11 Table 2.4: Transactional marketing vs CRM approach (Piccoli et al., 2003) ...131312 Formatted: Line spacing: 1.5 lines Table 3.1. Key barrier factors and sub-dimensions to CRM implementation in Vietnam SMEs. .................................................................................................323231 Table 3.2: Operationalized variables.................................................................363635 Table 4.1: Respondent‘s background ................................................................414140 Table 4.2. Results on the key factors of barrier ................................................424241 Table 4.3. Results on the sub-dimension of each factor ...................................434342 Table 4.4. 6 sub-dimensions as most commonly barriers .................................454544 Table 4.5: Detail sub-dimensions of Barrier 1-Changing Business Culture and Cross-functional interaction ..............................................................................464645 Table 4.6: Detail sub-dimensions of Barrier 2- Lacks of customer management knowledge .........................................................................................................474746 Table 4.7: Detail sub-dimensions of Barrier 3-Lacks of new processes and standards ...........................................................................................................................494948 Table 4.8: Detail sub-dimensions of Barrier 4-Lacks of skillful Human Resources ...........................................................................................................................505049 Table 4.9: Detail sub-dimensions of Barrier 5-Information Security Threats ..515150 Table 5.1. CRM implementation key antecedents ............................................535352 Table 5.2. Key barriers in CRM implementation for Vietnam SMEs ..............545453 Formatted: Space After: 0 pt, Line spacing: 1.5 lines ii LIST OF FIGURES Figure 2.1: Evolution of CRM (Haran, 2005) .............................................................8 Figure 2.2. Knowledge Management System (Fteimi and Lehner, 2014) ........141413 Figure 2.3: Factors of Change (Pries & Stone, 2004) .......................................181817 Figure 2.4: Transition Curve (Carnall, 1990) ...................................................191918 Figure 2.5: CRM Knowledge Management process .........................................232322 Figure 2.6. Research model ...............................................................................272726 Figure 3.1 Research process ..............................................................................303029 iii Formatted: Line spacing: 1.5 lines CHAPTER 1: INTRODUCTION Formatted 1.1. Rationale CRM (customer relationship management) has been increasingly recognized as a business strategy to effectively understand, manage, and sustain customer relationship with advanced information and communication technologies. The term of "relationship marketing", coined by Berry(1983) emphasized on continuing relationships rather than simply individual transaction. It is a new-old concept. The idea of a business earning the customers' favor and loyalty by satisfying their wants and needs was not unknown to the earliest merchants. Gronroos (1994) cites this Middle Eastern proverb from ancient trade: "As a merchant, you'd better have a friend in every town." Before the mid of twentieth century, most of the retails activities take place in small stores, the purchasing process was very simple, allowed the shopkeeper and customer to spend quality time getting to know each other. The shopkeeper deeply understand about his/her customers' habits and behaviours. After that, at the mid of last century, the mass production techniques and mass marketing fundamentally changed the competitive landscape by increasing product availability for consumers. Many huge shopping malls and super markets with rich merchandise portfolio in a convenient way gradually replace the small stores in trading activities. Customer lost their uniqueness, as they became an ―account number‖ and shopkeepers lost track of their customers‘ individual needs as the market became full of product and service options. (Chen & Popovich, 2003). In the 21st century, the explosive growth of the Internet and information technology(IT) has also brought new ways for businesses to communicate with their customers in various cost effective ways, such as: website, email, cloud-based CRM applications,... and now even the omni-channel retailing fullfilment system with artificial intelligence(AI) and cognitive technologies supported are not fiction (IBM-Watson,2017). Attracting customer has become very difficult these days, when people are harder to please. They are smarter, price conscious and sensitive, 1 more demanding, less forgiving, and they are approached by many more competitors with equally good or better offers (Kotler,2003). Increasing competition and decreasing customer loyalty have led to the emergence of concepts that focus on the nurturing of relationships to customers(Fazlzadeh,2011). The combination of "the old" relationship marketing mindset and "the new" CRM and other business support technologies might be the answer for a sustainable way to nurture relationship with customers. Many companies today are racing to re-establish their connections to new as well as existing customers to boost long-term customer loyalty. Some companies are competing effectively and winning this race through the implementation of relationship marketing principles using strategic and technology-based customer relationship management (CRM) applications.(Chen & Popovich, 2003). SMEs are featured with limitation of capital and resources,but recently as the cost for CRM application significant reduced and Nielsel approximated the explosive growth of Vietnam e-commerce market at a rate of 22%last year, many Vietnam SMEs start deploying CRM as solutions to improve its relationship with customer). Report from a SME CRM solution provider in Vietnam indicated that during last year their customer growth was more than 200%. But during the process of CRM implementation, representative also noted that Vietnam SMEs faced a lot of obstacle in the process of achieving the properly benefits.According to our best knowledge, there is currently no studies on barriers on CRM management in the context of Vietnam. In addition, because more than 90% of Vietnamese firms are SMEs (GSO, 20161). Thus, this study aimed to identify barriers in implementing customer relationship management in Vietnam SMEs by answering the following questions: 1. What are the benefits or objectives of business when implementing CRM? 2. What areis the key antecedents that affects the result of CRM implementation? 3. What areis the major barriers that VNSMEs faced when implementing 1 https://www.gso.gov.vn/ 2 CRM? 1.2. Research Objectives To review existing knowledge on barriers of customer relationship management provided by previous studies; To identify key antecedents of CRM application that affects the result of CRM implementation; To identify barriers in implementing customer relationship management of Vietnamese SMEs; To provide some suggestions in CRM implementation practices to improveVNSMEs performance and benefit in developing long-term relationship with their customers. 1.3. Subject and Scope of Research Research Subject The research subject of this thesis areis the key antecedents of CRM application andbarrier factors of CRM implementation of Vietnamese SMEs. Research Scope This study examine Vietnamese SMEs which implementing CRM for their businesses activities in Vietnam. The timespan for data collection is cros-sectional and implemented in 2017. 1.4. Structure of the thesis Part 1 presents the introduction, Part 2 presents the literature and theoretical framework relate to practice in CRM implementation and benefit in developing relationship with customer, Part 3 presents about methodology where the research design and research methods are explained. Part 4 explains results and discussions while Part 5 gives conclusions, limitations and implications. Detailed structure of this thesis is: Statement Abstract Abbreviations List of tables 3 Formatted: Font: Bold, No underline, Font color: Auto, Not Expanded by / Condensed by Formatted: Font: Bold Formatted: Font: Bold, No underline, Font color: Auto, Not Expanded by / Condensed by Formatted: Font: Bold List of figures Part 1: Introduction Part 2: Theoretical background Part 3: Methodology Part 4: Results and discussions Part 5: Conclusions, limitations and implications References Appendices 4 CHAPTER 2: THEORETICAL BACKGROUND The second part presents academic literatures on the subjects of CRM definition, key antecedents and barrier factors of implementing CRM. It provides relevant theories, researches and studies, as well as to provide the conceptional framework. The chapter also provides definitions and elaborations on the main concept of practice in CRM implementation and barriers that impact CRM implementation; The chapter will end with identification of variables and formulation of hypotheses. 2.1. CRM and key antecedents of implementing Definition of CRM and its conceptualization problems Definitions of CRM and its conceptualization problems Customer relationship management (CRM) was the buzz word of the 1990‘s. Until now, CRM is one of the hottest topic in the fields of business strategy, marketing management and information technology. Many researchers such as Peppers and Rogers (1999),Chen and Popovich (2003), Day and Van Den Bulte (2002), Gulati and Garino (2000), even some organizations: Gartner Group (1999), Hewson Group (2001), have tried to describe it, but CRM still experienced problems with reference to its conceptualization: CRM means different things to different people (Kale, 2004). This multi-dimensional characteristic of CRM has created ambiguities in how it is defined; there is no universally accepted definition of CRM (Ngai, 2005). The following section will try to describe what customer relationship management is through the evolution of CRM combined with definitions of CRM based on different level points of view: CRM as a toolset, CRM as a process or cross-functional process and CRM as a business strategy or multidimensional concept. CRM as a tool or a set of tools Customer relationship management itself is an outgrowth of sales force automation (SFA) tools, CRM is often referred to in the literature as one-to-one 5 marketing (Peppers and Rogers, 1999). SFA software automates routine tasks such as tracking customer contacts and forecasting. Fickel(1999) define CRM as the technology application link front office (e.g. sales, marketing and customer service) and back office (e.g. financial, operations, logistics and human resources) functions with the company‘s customer ―touch points‖. With more details, in 2003 Agrawal described CRM is typically designed as a toolset for guiding sales teams and supporting engineers and other specialists in developing sales prospects, creating appropriate business proposals, dealing with customer objections, and providing post-sales customer support. CRM integrates touch points around a common view of the customer. (Eckerson & Watson, 2000) CRM as a process or cross-functional process ―Customer relationship management (CRM) as the process of achieving and maintaining an ongoing relationship with customers across multiple customer touch points through differential and tailored treatment of individual customers based on their likely responses to alternative marketing programs, such that the contribution of each customer to the overall profitability of the firm is maximized‖ Kumar and Ramani(2004). ―A cross-functional process for achieving a continuing dialogue with customers, across all their contact and access points, with personalized treatment of the most valuable customers, to increase customer retention and the effectiveness of marketing initiatives.‖(Day and Van Den Bulte, 2002). ―An interactive process achieving the optimum balance between corporate investments and the satisfaction of customer needs to generate the maximum profit‖(Gebert et al., 2002). CRM as a business strategy or multi-dimensional definition ―A CRM business strategy leverages marketing, operations, sales, customer service, human resources, R&D and finance, as well as information technology and the Internet to maximize profit ability of customer interactions. For customers, CRM offers customization, simplicity, and convenience for completing transactions, regardless of the channel used for interaction‖ (Gulati and Garino, 2000). ―Customer relationship management (CRM) is a combination of people, processes 6 and technology that seeks to understand a company‘s customers. It is an integrated approach to managing relationships by focusing on customer retention and relationship development‖ (Chen & Popovic,2003). ―Activities a business performs to identify, qualify, acquire, develop and retain increasingly loyal and profitable customers by delivering the right product or service, to the right customer, through the right channel, at the right time and the right cost. CRM integrates sales, marketing, service, enterprise resource planning and supply chain functions through business process automation, technology solutions and information resources to maximise each customer contact. CRM facilitates relationships among enterprises, their customers, business partners, suppliers and employees.‖ (Galbreath and Rogers, 1999). ―A business strategy that maximises shareholder value through winning, growing and keeping the right customers‖ (Hewson Group, 2001) .Construed the scope of CRM as encompassing strategy,management of the dual creation of value, intelligent use of data and technology, acquisition and dissemination of customer knowledge to appropriate stakeholders, development of appropriate (long-term) relationships with specific customers and/or customer groups, and the integration of processes across the many areas of the firm and across the network of firms that collaborate to generate customer value. (Boulding et al., 2005) When developing a framework to assist the implementation of CRM, Haran (2005) has provide a table to demonstrate how CRM has evolved over the last couple of years through different researchers: 7 Figure 2.1: Evolution of CRM (Haran, 2005) As the technology keep growing in a fast pace, according to the author, CRM still can be defined as a customer-focusbusiness stragtegy, even methodology that combine of people, processes and technology to manage the loop of developing capability to:  Understand most profitable target customer‘s wants and needs  Deploy a clear, properly and attractive value proposition and company images  Continuously verify the effectiveness through market feedback on conversion rates  Build strong customer relationship and utilization profit based on improvement of customer acquisition and customer retention  Revise, re-emphasize or develop new value proposition based on new and verified customer knowledge 2.2. Benefits or objectives of business when implementing CRM Positive impact of successfully implementation of Customer Relationship Management is widely recognized in most of the literature. These have been many studies focusing on the benefit of business when successfully implementation of CRM as well as practice factors for success in CRM application. CRM is one of the hottest topic in the fields of business strategy, marketing management, and 8 Formatted: Font: Bold, No underline, Font color: Auto, Not Expanded by / Condensed by Formatted: Font: (Default) Times New Roman, 13 pt, No underline, Font color: Auto Formatted: Font: (Default) Times New Roman, 13 pt Formatted: List Paragraph, Bulleted + Level: 1 + Aligned at: 1.9 cm + Indent at: 2.54 cm Formatted: Font: (Default) Times New Roman, 13 pt, No underline, Font color: Auto, Condensed by 0.2 pt Formatted: Font: (Default) Times New Roman, 13 pt, Condensed by 0.2 pt Formatted: Font: (Default) Times New Roman, 13 pt, No underline, Font color: Auto Formatted: Font: (Default) Times New Roman, 13 pt Formatted: Font: (Default) Times New Roman, 13 pt, No underline, Font color: Auto Formatted: Font: (Default) Times New Roman, 13 pt Formatted: Font: (Default) Times New Roman, 13 pt, No underline, Font color: Auto Formatted: Font: (Default) Times New Roman, 13 pt information technology (Fazlzadeh et al, 2011). CRM is also a cross functional philosophy that calls for substantial business intergration. Thus, to implement CRM successfully, a very different mindset is needed (Piccoli et al, 2003). Successfully implementing CRM application have resulted in increased competitiveness for many companies as witnessed by higher revenues and lower operational costs. Managing customer relationships effectively and efficiently not only boosts customer satisfaction but also improves retention rates (Reichheld, 1996; Jackson, 1994; Levine, 1993). CRM applications help organizations gain customer loyalty and increase profitability by improving life-time value of each customers. CRM application offers the benefit of sharing customer data throughout the organization and implementing innovative technology that resulting in remarkable competitive advantages as below: Table 2.1: Benefit of successfully CRM implementation Customer data sharing throughout the CRM innovative technology: organization resulting in: Superior levels of customer service Extends capability to the customer for Opportunities for cross-selling and up- self-service and Internet applications selling Vast Attracts existing and new customers information about customers‘ through personalized communications habits and references and improved targeting. Integrated and complete view of the Integrates customer customer and supplier relationships Improved targeting to segments and Constructs metrics to analyze common individual customers and Efficient call centers/service centers Source: (Chen & Popovich, 2003) 9 unique customer patterns 2.3. Key factors for success and barriers of CRM application Key factors for success and barriers of CRM application Case studies and data sets examined in the academic literature, to date, are largely comprised of successes (Bohling, 2006). For instance, Leverick et al. (1998) provide a wide ranging review of success factor research with particular reference to the marketing domain. By way of more specific areas, Ryals et al. (2000) provide Comment [HSB1]: What factors? Put them into a table a comprehensive review of the CRM literature; Wilson and McDonald (1996) review success factors for marketing decision support; and in a wide-ranging study, Dutta (2000) examines emerging success factors in e-commerce – one area where a comprehensive literature review could not be found. Wilson et al (2002) examines the factors that influence the successful deployment of CRM applications, with particular emphasis on those factors which are distinct from other areas of application derived from five in-depth case studies. Below table are summarise previous research on success factors for CRM implementation: Table 2.2: Success factors for CRM implementation 10 Comment [HSB2]: Table