A Study On Customer Relationship Management Through Customer Satisfaction of Nestle Baby Food Products
A Study On Customer Relationship Management Through Customer Satisfaction of Nestle Baby Food Products
A Study On Customer Relationship Management Through Customer Satisfaction of Nestle Baby Food Products
1.0 INTRODUCTION
Customer relationship management, in the budding stage it was known as Customer Information
System (CIS) or Database Marketing with a single function solution designed to support a specific
set of employees. It was pioneered by Robert and Kate Kestnbaum using statistical modeling. In
1986, it tapped into the market as Contact Management Software and given scope to contact
management, sales force automation (SFA) and customer contact centre (CCC) and then later
termed as Customer Relationship Management and also Mobile Customer Relationship
Management (M-CRM).
Till 2000, CRM era is called as Traditional CRM and after 2000 it has been now emerged as Social
CRM. However, traditional CRM was focussing much on collecting, managing, static customer data
(such as past purchase information, customer demographics, contact details). They were often
sourced from e-mail and phone interactions between the company and the customer.
Social CRM adds a layer of information into traditional CRM by collecting the information through
social media / networks like Facebook, Twitter, LinkedIn or any other social network. This has
helped not only for interactions with customers but also with the vendors, suppliers, retailers, which
is termed as multichannel retailing or omnichannel. It also influencing the companies to track
customer’s social influence and source data from conversations. It is also aiding companies to keep
a full audit history of customer interaction, available to take care of the customers and employees
too. CRM for short - are dependent on an information superstructure comprised of various technologies
that enable organisations to store, access, analyse, and manipulate vast amounts of customer data. The
evolution of CRM is from a Data Warehouse to its smart utilisation for implementing Marketing
Automation to a Multi Channel Integration. With the growing acceptance of CRM and Marketing
Automation, organisations opted for Multi-Channel Campaigns and explored the elements that help to
define a strong multi-channel framework.
In the present world, many companies are extensively turning to Customer relationship management
(CRM) in order to understand better the customer tastes, preferences, needs and to fulfil them,
satisfy them and retain them. Hence, we can say CRM as company activities related to developing
and retaining customers. It is a blend of internal and external activities of the company. The internal
activities comprises, viz., business process, data capturing, techniques, etc., whereas external
activities includes sales, marketing and customer support with technology
CRM is a term that refers to practices, strategies and technologies that companies use to manage and
analyze customer interactions and data throughout the customer lifecycle, with the goal of improving
business relationships with customers, assisting in customer retention and driving sales growth.
Customer relationships management is all about building a long term business relationships with
customers. The name itself very clearly implies that it is an alignment of strategy, process and
technology to manage customers and all customer-facing departments and partners.
Baviraj Bhusan, et al (2011), expresses that service quality has emerged as per dominant determinant
of customer satisfaction, which in turn affects customer retention and long term profitability. Customer
relationship management philosophy revolves around the customer centricity where service quality have
changed and there are instances where the existing service quality dimensions have partially selectively
merged to generate new dimensions.
Rebecca (2007) expresses customer satisfaction actually drives human capital performance i.e.,
improving the future performance of employees will positively impact firm profitability. High levels of
customer satisfaction will be viewed as an attractive employees having the potential for long term
success, more positive work environment, increase employee loyalty and productivity while also
lowering employee turnover.
Buttle (2005) develops customer life cycle and emphasis is given to the marketing issues of customer
portfolio analysis including segmentation, life time value and safes forecasting.
Jones (2009) in his case study expresses that the customer preferences are more with ups and
downs. Customer satisfaction, its loyalty and performance are also dependent on the strategic
decisions taken by the company which its expressed as internal struggle.
Eugene A Anderson (2012), investigates that customer satisfaction and productivity are compatible
when customer satisfication is relatively more dependent on customisation – the degree to which the
firms offering is customised to meet heteregenous customer needs – as opposed to standardisation –
the degree which the firms offering is reliable, standardised and free from deficiencies and when the
firm finds difficult to provide high levels of both customisation and standardisation, simultaneously.
Chester Chambers (2015) states today competitors compete with quality and price in a two stage game.
Customers also look for best quality with lowest affordable price for any product. Industry highest
quality levels for its grand pianos by incurring higher labor and material costs, whereas for market it is
different in situation too.
James Oklay (2012) states that chain-link model linking employee satisfaction and motivation to
customer behaviour and firm profitability, demonstrating that market orientation mediates the
employee–customer relationship. He explores every employer focusses on internal employee
attitudes, employee motivation as the key factor for managers to focus on drive organisational
results. The organisation has to put efforts to improve employee satisfaction which helps to improve
employee motivation. Employee motivation is the key attitude in driving the implementation of
market-oriented behaviours, whereas market orientation directly influences customer satisfaction
and behaviour.
Bowman (2012) clearly states that there is a lack of correlation between satisfaction with
profitability. The study also finds an impact of satisfaction on loyalty and loyalty on profitability.
CRM efforts with customer profitability need to account for the existence of multiple decision
makers and the fact that resources are directed at the individual customer.
R. Medioudia et al (2012), investigates the customer satisfaction of power users using the Analytic
Hierarch Process (AHP) method. The researcher’s objective was to safeguard the interests of
electricity consumers and to increase the profitability of the energy distributor. The researcher used
the reliability indices analysis and cost benefit analysis methods to analyse the customer reactions to
the decisions taken by the systems managers using AHP method.
M. Jagger et al (2000) expresses the satisfaction of the bank customers relies on what customers
want i.e, try to resolve the problems of customers. In this regard, technological advances have
stunned the customers to resolve their problems and get satisfied.
Mathew et al (2000), the researcher aims the paper to evaluate empirically the direct relationship
between customer satisfaction and a range of measures of financial performance. The customer
satisfaction have a positive financial impact but the direct effects are generally small.
Literature Gap :
Studies are conducted to implement CRM, requires a holistic approach that integrates internal
leadership, strong executive and business unit, cautious strategic preparation, precise performance
2.2 Objectives
Primary Objective
To study and to ascertain the impact of customer relationship management on the profitability of
Nestle India Limited with special reference to baby food products.
Secondary Objective :
a) To analyse on the customer preferences of the baby food products of Nestle India
Limited.
b) To analyse on the customer perceptions of the baby food products of Nestle India
Limited.
c) To analyse on the customer satisfaction level of the baby food products of Nestle
India Limited
2.3 Hypothesis
This study is to analyse the customer relationship management on customer preferences, perceptions
and satisfaction of the company.
The researcher decided to use the questionnaire as primary tool to analyse the information on
customer preferences, perceptions, loyalty and satisfaction level.
The researcher has utilised the descriptive, exploratory research methods to conduct the study.
Descriptive method is used to obtain information relating to the status of customers on their tastes,
preferences and perceptions on the usage of the product. Exploratory research is often used or the
real scope is still unclear. It allows the researcher to determine and familiarise the concepts of the
problem under the study. The present study is an exploratory study as it would gather the
information on customer relations and its impact on the profitability to the firm. The researcher
makes use of existing literature in order to verify the observations and come up with preliminary
ideas regarding the research problem.
2.5 Sampling
Sampling Population
The researcher has targeted the customers of Nestle baby food products in Bangalore (rural and
urban), situated at Karnataka State, India. The customers were the consumers, wholesalers, retailers
of the company.
Sampling Unit
The researcher has concentrated the customers of Nestle baby food products in Bangalore city. The
respondents chosen are house-wives, employees, working women, especially concentrated on
marital status and who have their children.
The respondents were also done on wholesalers, agents and retailers of the company
The sample size for the study is 451 respondents chosen based on the sampling population. Out of
which 400 respondents (customers) were considered for analysis. Out of 100 respondents chosen 86
respondents (traders) were analysed. The financial statements of the last five years are also
considered for the study to examine the profitability status of the product.
From various literature review and the industry practice, the confidence level is considered to be
95% and Margin of Error of 5 percentage points. The sample size calculations are shown below:
So, α / 2 = 0.025, M.E. = 0.05, p = 0.5 and from this we can easily find value of ‘n’ which is sample
size. Reframing the above equation we get,
(Z α/2)2 * p * (1-p)
n = -----------------------------
(M.E)2
Substituting the values, we get,
(1.96)2 * 0.25
n= ---------------- = 384.16 = 400 respondents.
0.0025
2
From the above calculation, 400 respondents is the sample size that is considered for this study.
Sampling Technique
The researcher has adopted the simple random convenience sampling method at the convenience of
identifying the respondents based on their marital status available in the Bangalore (rural and urban
area).
Data sources
The researcher has used the primary data i.e., a well-designed questionnaire to collect the data
To conduct the study, the researcher has collected data from various websites, journals, articles and
e-database sources, e-books and other sources.
The researcher has planned to study and targeted the respondents as customers viz., housewives,
professionals and others.
The researcher has used the simple average method, cumulative percent method and test the
hypothesis has used the statistical tools like chi-square tests, Fishers Exact Test, Kruskal-Wallis Test
(H-test)
The study is restricted only to the Nestle Branded Baby Food Products
The study is concentrated on Nestle Branded Baby Food Products available in Bengaluru
(Rural and Urban) market, India.
The study has not concentrated on inclusion of technology of CRM process used by the
company.
Time constraint.
Accuracy of the information is purely based on the response of the respondents.
In India, Nestle has 8 manufacturing facilities and four branch offices, NESTLÉ India set up its first
manufacturing facility at Moga (Punjab) in 1961 followed by its manufacturing facilities at Choladi
(Tamil Nadu), in 1967; Nanjangud (Karnataka), in 1989; Samalkha (Haryana), in 1993; Ponda and
Bicholim (Goa), in 1995 and 1997, respectively; and Pantnagar (Uttarakhand), in 2006. In 2012, Nestlé
India set up its 8th manufacturing facility at Tahliwal (Himachal Pradesh).
The 4 Branch Offices located at Delhi, Mumbai, Chennai and Kolkata help facilitate the sales and
marketing activities. The NESTLÉ India’s Head Office is located in Gurgaon, Haryana.
Gende Frequenc
r y Percent
Female 300 75.0
Male 100 25.0
Total 400 100.0
Inference : It is implied that female respondents were more compared to male respondents.
However, the study is on baby food products, where the concern on food, health and hygiene will be
on mothers’, grandparents too.
Inference : It is implied that response was more from married and then followed by divorced and
separated..
Table 4.3 : Gender and Number of children
Gender Number of children Total
One-Child Two-child
Female 192 108 300
Male 62 38 100
Total 254 146 400
Inference : From the above table, we conclude that the respondents are single child parents (64%)
compared to two-children parents (36%), which signifies that the female working professionals are
happy with single child compared to two-children for their work-life balance.
Age of Children
Gende >12
r 6-8 Months 9-11 Months Months Total
Female 59 83 158 300
Male 20 17 63 100
Total 79 100 221 400
Inference : From the above table, it is inferred that 55% of the respondents kid were above 12
months, followed by 25% at the age group of 9-11 months and 20% of the age group are in 6-8
months. All the respondents are preferring to use the Baby Food Products, which is easy and
convenient for preparation and also health and hygienic for their children.
Ranks
Nestlebrand_foodproducts1 N Mean Rank
Quality_Satisfaction Nestle_Nan_Pro1 99 202.43
Nestle_Lactogen 23 248.20
Nestle_Cerelac 208 190.06
Nestle_Infant 3 239.17
Gerber 22 185.93
Nestle_Nestum 15 195.77
Neslac 14 247.93
Nestogen 16 231.50
Total 400
Inference : The test result (p-value = 0.091) shows null hypothesis cannot be rejected which implies
that there is no significant difference in the satisfaction level towards quality of various brands of
Nestle food products.
H0: There is no significant difference in satisfaction level towards understanding the needs
of consumers of various brands of Nestle food products.
H1: There is significant difference in satisfaction level towards understanding the needs of
consumers of various brands of Nestle food products.
Nestlebrand_foodproducts * Understandingtheneeds_Satisfaction
Crosstabulation
Count
Understandingtheneeds_Satisfaction
Very Very
Poor Poor Average Good Good Total
Nestlebrand_ Nestle_Nan_Pro1 5 2 14 38 40 99
foodproducts Nestle_Lactogen 0 1 0 8 14 23
Nestle_Cerelac 9 13 26 88 72 208
Nestle_Infant 0 0 0 1 2 3
Gerber 2 2 3 8 7 22
Nestle_Nestum 1 0 3 8 3 15
Neslac 0 0 2 4 8 14
Nestogen 0 0 2 6 8 16
Total 17 18 50 161 154 400
Ranks
Nestlebrand_foodproducts1 N Mean Rank
Test Statisticsa,b
Understandingtheneeds_Satisfaction
Chi-Square 14.775
Df 7
Asymp. Sig. .039
a. Kruskal Wallis Test
b. Grouping Variable: Nestlebrand_foodproducts1
Inference : The test (p-value = 0.039) shows null hypothesis need to be rejected which implies that
there is significant difference in the satisfaction level towards understanding the needs of
consumers of various brands of Nestle food Products.
H0: There is no significant difference in satisfaction level towards price as per consumers
of various brands of Nestle food products
H1: There is significant difference in satisfaction level towards price as per consumers of
various brands of Nestle food products.
Table 4.7 : Satisfaction towards price of the Nestle Baby Food Products
Price_Satisfaction
Very Very
Poor Poor Average Good Good Total
Nestlebrand_ Nestle_Nan_Pro1 10 15 17 28 29 99
foodproducts Nestle_Lactogen 1 0 3 8 11 23
Nestle_Cerelac 30 26 45 57 50 208
Nestle_Infant 0 1 0 0 2 3
Gerber 4 3 3 5 7 22
Nestle_Nestum 1 4 2 7 1 15
Neslac 0 2 2 5 5 14
Nestogen 0 4 2 7 3 16
Total 46 55 74 117 108 400
Ranks
Mean
Nestlebrand_foodproducts1 N Rank
Price_Satisfaction Nestle_Nan_Pro1 99 205.05
Nestle_Lactogen 23 266.20
Nestle_Cerelac 208 190.02
Nestle_Infant 3 255.67
Gerber 22 196.68
Nestle_Nestum 15 172.07
Neslac 14 237.68
Nestogen 16 203.16
Total 400
Test Statisticsa,b
Chi-Square 13.080
Df 7
Asymp. Sig. .070
a. Kruskal Wallis Test
b. Grouping Variable: Nestlebrand_foodproducts1
Inference : The test result (p-value = 0.07) shows null hypothesis cannot be rejected which implies
that there is no significant difference in the satisfaction level towards price of various brands of
Nestle food products as per consumers.
Table 4.8 : Satisfaction towards price of the Nestle Baby Food Products
Affordability_Satisfactio
n
Very Very
Poor Poor Average Good Good Total
Nestlebrand_ Nestle_Nan_Pro1 0 1 4 51 43 99
foodproducts1 Nestle_Lactogen 0 0 0 8 15 23
Nestle_Cerelac 1 1 8 121 77 208
Nestle_Infant 0 0 0 1 2 3
Gerber 1 0 1 12 8 22
Nestle_Nestum 0 0 1 10 4 15
Neslac 0 0 0 6 8 14
Nestogen 0 0 0 8 8 16
Total 2 2 14 217 165 400
Ranks
Nestlebrand_foodproducts1 N Mean Rank
Nestle_Nan_Pro1 99 204.05
Nestle_Lactogen 23 251.57
Nestle_Cerelac 208 192.07
Nestle_Infant 3 254.33
Gerber 22 185.50
Affordability_Satisfaction
Nestle_Nestum 15 170.23
Neslac 14 236.14
Nestogen 16 222.50
Total 400
Inference : Kruskal Wallis test result (p-value = 0.85) shows null hypothesis cannot be rejected
which implies that there is no significant difference in the satisfaction level towards affordability
aspect as perceived by consumers of various brands of Nestle food products.
Table 4.9 : Satisfaction towards price of the Nestle Baby Food Products
Overall_Satisfaction
Valid Cumulative
Frequency Percent Percent Percent
Valid Very Poor 32 8.0 8.0 8.0
Poor 35 8.8 8.8 16.8
Average 41 10.3 10.3 27.0
Good 129 32.3 32.3 59.3
Very
163 40.8 40.8 100.0
Good
Total 400 100.0 100.0
Statistics
Overall_Satisfaction
N Valid 400
Missing 0
Mean 3.8900
Std. Deviation 1.25373
Test Statistics
Overall_Satisfaction
Chi-Square 189.250a
Df 4
Asymp. Sig. .000
Ranks
Nestlebrand_foodproducts1 N Mean Rank
Overall_S
atisfaction Nestle_Nan_Pro1 99 204.25
Nestle_Lactogen 23 261.41
Nestle_Cerelac 208 191.52
Nestle_Infant 3 242.00
Gerber 22 182.39
Nestle_Nestum 15 166.57
Neslac 14 235.50
Nestogen 16 224.75
Total 400
Kruskal Wallis test result (p-value = 0.065) shows null hypothesis cannot be rejected which implies
that there is no significant difference in the overall satisfaction level among consumers of various
brands of Nestle food products.
6.1 FINDINGS
o Nestle India Limited is having a complex supply chain management, which is quite
cumbersome to understand its functions and its process of working nature. However, the operations
of the traders (channel of distributors) are on the location based and target based.
o Nestle operations of CRM is completely through online and the database of the traders are
track-recorded efficiently and are not much concerned of the end-customers / end-consumers.
o Nestle Baby Food products are available with different varieties and different flavors.
o The respondents who responded for the questionnaires were more females than males.
o 59% respondents are married followed by 10% Divorced and 7% are separated. It also draws
the attention that 52% of the respondents are female and the rest are male respondents.
o There is no significant difference in the satisfaction level towards quality of various brands
of Nestle food products. and there is significant difference in the satisfaction level towards
understanding the needs of consumers of various brands of Nestle food Products, followed by
there is no significant difference in the satisfaction level towards price of various brands of Nestle
food products as per customers and there is no significant difference in the satisfaction level towards
affordability aspect as perceived by consumers of various brands of Nestle food products. However,
overall satisfaction of Nestle Baby Food Products is leaning towards good and very good rating by
the customers. There is no significant difference in the overall satisfaction level among consumers
of various brands of Nestle food products.
6.2 CONCLUSION
The study has propounded that Nestle Company Baby Food Products are known to the customers of
all the corners of the Bangalore. It has tapped well in the market and known for its quality and price.
The integration process of people, process and technology i.e., CRM, in which the satisfaction level
on purchase and consumption of the products are satisfactory.
6.3 SUGGESTIONS
The products of Nestle Baby Food Products available in the market are off more varieties
and different flavours. However, they are not specific on the benefits to the toddlers, though it is
segmented on age group basis.
The Company continuously focuses its efforts to better understand the changing lifestyles
such as Taste, Nutrition, Health and Wellness through its product offerings but not thought or
segmented on Usage / Benefits (in other aspects apart from Nutrition).
Nestle’s top priority is quality and safety for their end-users but should concentrate even on
consumers affordability, convenience and time too.
Under each product brand, there are many flavours, which has to be minimized, as the end-
users are feeling it is confusing for them to shop.
The company has to think of getting available to the end-users in different quantities, as they
have standardized the quantity.
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Books Referred
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and tools.
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John G. Freeland (2003), The ultimate CRM handbook : strategies and concepts for building
enduring customer loyalty and profitability, ed.. New York: McGraw-Hill.
Kotler, Armstrong, Cunnigham (2008), Principles of Marketing, Marketing, Managing
Profitable Customer Relationships, Pearson Education, 7th Edition
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