The Customer Retention Dissertation Proposal Help sole aim of the current study is to identify and analyze the customer acquisition and retention strategies adopted by four major companies in music industry. In This study researcher will try to identify and analyze general trends prevailing in the music industry as well as the evaluation of each of the company’s marketing strategy to acquire the new customer for its business. And also at the same time research will try to include the customer perspective on the customer acquisition strategy used by the companies.
The study is mixed in approach with both primary and secondary research component in it. For secondary research the researcher will conduct an in depth analysis of literature available in forms of articles’ books’ journals’ previous researches and electronic databases. For primary research a small scale research will be conducted with a sample size of 50. The details and structure of primary research will be described in research methodology part. After data collection the data will be sorted and analyzed based on the aims and objectives of the study and Based on that data analysis recommendations and conclusion will be provided by the researcher. The study here focuses on some of the largest music companies like Universal Music Group, Sony Music Entertainment, EMI Group and Warner music group (Rogers, 2004). The study will conduct a comparative analysis of different marketing strategy used by these companies for acquisition and retention of customers.
Universal Music Group
Universal music group is world biggest music group in recording industry. It was founded in year 1934 as Decca records. It has revenues of $6.14 billion. It is the largest of the big four record companies looking at its market share and operation in various countries. It has its own music publishing house which has become world’s largest after the company have acquired the BMG music group in year 2007.
EMI Music Group
Electric and music industries (EMI) are a well established name worldwide in music industry. It’s a British music company which was founded in year 1931. It’s a part of the parent firm called Terra Firma. Its annual revenues are $1.65 billion. Company has its competitive advantage into stereo sound recording field.
Sony BWG music entertainment is a joint venture between Sony music entertainment which is a well known music company from USA and Bertelsmann AG. It was founded in year March 2004. It is a part of the big four recording companies of the world. And it is involved in ownership and distribution of recording labels. Some of the big names of recording labels under its name include Arista records, Columbia records, Epic records and Legacy records.
Warner Music Group
Warner music group is the third largest business group in the record family and a part of the big four recording family in the world. It was founded in year 1958 by as warner Bros records. It has annual turnover of more than $3.4 billion. It also has a music publishing arm with name called Warner/ Chappell music.
Customer acquisition is one of the critical factors of business development and market penetration. in today’s era when customer are more focused towards functional and technical benefit offered by the company and switching cost is very low which caused reduction in customer loyalty (Buttle, 2008). Along with that there is intense competition prevailing in the music industry and lot of music content is available as a free source on internet which creates a real challenge for companies to remain profitable and grow with a healthy rate (Leihs, 1999). Customer acquisition is the continuous customer involvement process which ends up with the customer first purchase. Another acquisition perspective approach says that the customer acquisition process ends up with the purchase and non purchase encounters of the customer with the company (Mary Jo, 1981). Repeat purchases are also assumed to be the part of customer acquisition process according to the customer acquisition perception process. Customer perception theory is better since it includes the initial phase of customer bonding between the customer and the firm which strengthen the relationship between the two (Gerson, 1993). There are always huge costs involved in the acquisition process which are also said to be the non product cost for the company since these do not include expenditure on the products of the company. Customer Acquisition rules can be discussed here on the facts that any customer acquiring and retention strategy must be focused in nature. The target audience has to be very specific like if a company wants to gain more young customers than its image’ product’ services’ branding and marketing efforts should be focused towards the music and style which is liked by younger generation. If a company taken a general approach for all its customers then sooner or later some competitor with more focused approach will beat them in competition. The second concept which a company has to bear in mind while deciding a customer retention strategy is that what is the life time value a customer can bring to the company. One good customer with good purchasing power and brand loyalty will be much more of an asset than creating a buzz and joining 20 customers for a short span of period. The expenses and cost of such acquisition will be much higher than focusing on one customer which is Acquire the customer which has the customer lifetime value of more than the acquisition cost spends by the company on customer acquisition. Along with all efforts to acquire new customers the company also has to maintain its profitability so that the cost of acquiring new customers can be bored. What the argument we are trying to provide is a company should be proactive on acquiring new customers but it should not be putting so much emphasis on it that other operational and services factors are being neglected. The investments on the new acquisition and old customer retention should be justifiable by its own so that in the longer run net benefit can be attained by the company for all its efforts.
Customer Acquisition Strategy
The general framework for the customer acquisition strategy includes the following steps:
- Selecting suitable target customer for the company offerings
It is important because without right target the company will be wasting its resources and efforts on a group of customers who is not even profitable even if they became a customer. For any company there is a constraint of time and resources which makes it very important that proper selection of target is to be done.
- Providing the flexible product that can suit customer requirement
Each customer is a different individual and have a different set of requirements which cannot be satisfied fully by a company. The key to this problem is providing such a solution which fits into the broader margins of acceptability of the entire group of customer so that a general level of satisfaction is maintained.
- Managing customer complaints
A good listener is liked by all. It is applicable with the companies as well. Customer will always prefer a service provider who will listen to their complaints and take a immediate action to resolve them. Having a effective and efficient customer care centre and service back up will act as a boon in order to maintain customer for a longer period.
- Analysing account closures
Company should always focus on its fall outs and keep a check on the places from where its customers are slipping. These are the areas to focus and prevent the slippage. It is always easier and cheaper to retain a customer rather than acquire one so plugging a hole of complaints will be short term’ more effective and more profitable for the company.
Though the marketing processes followed in the companies tries to define their customer segments and offer their products according to their requirements (Kotler, P. 2003). But there are certain gaps which are responsible for the failure in customer relationship strategy of the companies (Armstrong, 2010). These gaps are as follows:
- No specific retention targets
- No focused marketing strategy
- A one size fit all strategy
- Lack of customer database
- Lack of switching barriers
Customer relationship is the process undertaken by the any organisation in order to reduce the customer defection (Sleight, 2004). Since customer acquisition is six time more costly then customer retention so it is cost effective to retain the customer instead of acquiring the new customers. Also according to the research an engaged customer provides 1.7 times more revenues than the normal customer of the company (Pilling, 1997). Also an engaged employee provides the 3.4 times more revenue to the company.
A retained and satisfied customer is very beneficial for the company and Some of the typical customer retention strategies used by the companies include the following:
- Membership cards and programs offered by the company in order to offer the discount and other schemes.
- Thanking statement and sales acknowledgement given by the company
- After sales customer satisfaction and complaint handling
- After sales service which can add value to the customer purchase
- Eventful communication which can relate customer with the company
Aim of research
Aim of the research is to identify and conduct a comparative analysis of customer acquisition and retention strategies adopted by four major companies in music industry.
Objectives of this research are:
- To identify any one new customer acquisition and retention strategy of four different music companies.
- To conduct a comparative analysis of any one acquisition and retention strategies of four different music companies in last five years.
Research will try to find out answer for the following questions:
- What are the different customer acquisition strategies which are employed by these music companies to acquire new customers?
- What are the salient features of customer acquisition and retention strategies which are employed?
- What factors customer consider while using a particular brand of music utility?
The research will undertake both the aspects i.e. quantitative as well as qualitative aspect of the research. For undertaking the qualitative research two separate questionnaires will be designed, one for taking the customer’s perception and other for taking the retail outlet and salesman perception about customer acquisition strategy. The aim of the qualitative research would be to find out the current customer acquisition and retention strategy used by the company’s from customer as well as salesman perspective. The other aim of the qualitative study would be to find out factor affecting customer retention as well as customer purchase decision. Other quantitative method would be used in order to find out the factor which is of immense importance for customer while making purchase decision among the given reasons the reason behind choosing a mixed approach study is the industry type in which study is focused. The music industry is a very much dependent upon the perception of the consumer. There is no clear demarcation between a good or a bad music so in order to capture the perception level of consumers it is necessary to incorporate qualitative aspects in the study which can provide us a brief review of the customer’s thinking and decision making process along with the numerical results. Taking both approaches simultaneously in this study provides wholesomeness and 360 degree approach to the study and brings more credibility and reliability to the results (Brannen, 1992).
Sample Technique and Sample size
For taking the sample from the population simple random sampling would be used. A sample of 50 customers would be taken by the surveyor in order to take the responses. Other than 50 customers responses from the shopkeepers at the music store outlet and salesperson would be taken in order to fill the questionnaire.
Focused interview would be conducted with total of 30 customers and the aim of the interview would be to discuss the main criteria which customer takes into account while deciding about a particular purchase. Interview duration would be around 20 minutes. Content analysis method would be used in order to analyze the findings of the focused interview.
For collecting the data for the research both primary and secondary data collection method would be used. To collect the secondary data marketing history of the company’s will be looked after in order to find out historic development companies have done in order to acquire and retain the customers. The marketing strategies of the company would be searched from the various resources like recent articles and news about the marketing developments about the companies.
Primary data about the customer perception as well as the salesman perception would be gathered by designing the questionnaire which will take customers and salesman viewpoint in consideration. Focused group discussion would also be carried out with a group of customer in order to find out the strategy in deep. Also another questionnaire would be designed with the help of the conjoint analysis which will be having various profiles which customer have to rank, the aim of this questionnaire would be to find out the most important parameter which decide the customer decision for purchase and customer retention strategy (Malhotra, 2007).
For qualitative data collected through the questionnaire and the historic developments, content analysis would be done in order to gather all the marketing efforts undertook by the company for customer retention and acquisition. While for quantitative data analysis conjoint analysis would be used with the help of SPSS tool which will find out the most important parameter deciding the customer retention and factor driving the customer purchase decision. With the help of SPSS data which is gathered with the help of questionnaire is being analysed in order to find out the relative importance of the various factors which help customer to decide about the purchase.
|Sr. No.||Task||Time duration|
|1||Questionnaire designing||1 week|
|2||Focused interviews||2 weeks|
|3||Data analysis||2 weeks|
|4||Presenting the findings||1 week|
Expected Results and Findings
The probable result of the research would be to various customer acquisition and retention strategy adopted by customer and difference between them. Various factors which customer takes into account while making purchase will include product performance, warranty, price sensitivity and brand name.
The marketing strategy of various music companies for customer acquisition and retention would be analysed with the help of customer survey and finding would be helpful in analysing the trends in music industry.
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