relationship marketing case analysis

8/9/2019 Relationship marketing case analysis

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KIRLOSKAR INSTITUTE OF ADVANCED MANAGEMENT

STUDIES

A report on Belge. Cakes and More

Relationship Marketing

Submitted to: Prof. Anita Kshetri Submitted by:

Group 2


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Belge Relationship marketing : an overview

Relationship Marketing is the relationship an organization maintains with a

customer, marketing partners, employees and other financial stakeholders

in order to encourage strong, lasting relations with the brand and through

that to create higher customer lifetime value.

The strategies a firm puts in place in order to achieve the desired

objectives of Relationship marketing are called Relationship marketing

Strategies.

Belge being a start up with an innovative idea, a very unique competitive

advantage and small resources has huge potential to grow. The Customer

base in the area available is tremendous.

Belge being located in Sangli, both locations brimming with opportunities

may have the following suspects.

Suspect

Prospect

Customer

Partners


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The total of 719,357 people living in the urban areas. Subtracting the

number of people with diabetes or other such health issues, the entire

urban population may be our target because even if people do not have aninclination for cakes, breads and biscuits, it can very well be created.

Besides this, a total 2,102,786 people are living in rural areas. This is also

an untapped market where the culture of Cakes and pastries may exist with

a very small coverage. This coverage can be extended. In both areas,

focus should be on Children as well.

Other than Sangli’s resident population, it is about to receive a breeze of

educated, skilled and unskilled labour because of its developments in Wind

Power, with the existent Suzlon and upcoming Reliance wind power plants.

The BhartiVidyapeeth being in close proximity to the bakery is also a key

customer base because it comprises of Students and faculty who are

educated, and well to do with the knowledge and interest in confectionary

items.

Alongside an IT revolution awaits Sangli with the formation of the IT

park.Again bringing in a group of prospective buyers.

These are all suspects to tap in Sangli for Belge.These suspects need to

be lured in to become Prospects.

Most important prospects to Customer:

• Children and youth.( Primarily people- less than 35 years)

• The employees of the IT Park. This may be a very profitable group.

Belge can create special strategies:

1. For individual employees create a discount on purchases if they

show their ID Cards.2. This individual relationship that is created may further bring the

possibility to become the official Bakery caterer for all the official/

Corporate event of the IT sector.

In this manner from one employee Belge allows a number of employees

and in turn the IT sector to become loyal customers. This is the conversion

of a Suspect to Prospect to Customer.


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• Belge can lure in Children by making unique cakes and pastries

primarily keeping in mind the thought process and current trends

running in the Children’s segment. For example: cakes and pastriesshowcasing animated characters like- ChotaBheem, Doremon, Angry

Birds etc.

• For this Belge can become official partners with the organizations

who have created these characters in order to gain a competitive

advantage and gaining monopoly in producing confectionary items

with these caricatures.

• To lure in the Youth( the students from BhartiVidyapeeth and other

near-by colleges), events like Valentines Day, Friendships day etc.Where in special cakes of these themes may be produced at

reasonable rates.

• An important prospect is also the Vegetarian individuals and

communities of the area. The competitive edge of BELGE is that they

produce 100% vegetarian cakes with absolutely no use of egg or any

other such components. This is an important factor that should be

highlighted in order to pull in the Vegetarian crowd.

• (This is in favour of Belge because in the Hindu society especially,

even non vegetarians have holy days of the week when they forbid

from eating Non vegetarian food. If a birthday or other special

occasion arrives on such a day of the week, this crowd will be

interested in buying Belge cakes as the purpose is served without the

holy day being forfeited.)

Partners:

All of these customers will become partners and advocates for Belge once

they are completely satisfied with the service of the Bakery and have an

enhanced experience each time they visit Belge. If the quality is maintained

and customers receive good treatment they will be loyal and spread the

word in favour of Belge.

Small errors in quality etc can be made up for by replacing a damaged

cake and sending in an apology greeting.


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Besides the above written strategies for the Four important stakeholders,

Belge can come into the public eye by indulging in certain C.S.R. activities.

We suggest:

• For an important social event like: 14th November (Childrens day).

Belge can sponsor a small local event for orphan children or supply

pastries to an orphanage on Childrens Day. This will not only

complete their C.S.R event but also will gain the attention of local

media and lead to publicity.

• Waste reduction program: This is again a win-win situation because itleads to a clutter free working environment at Belge but also makes

Belge a company with goodwill in the city as they are reducing the

waste generation in the city.

• Customers:

Demographic ProfileSANGLI URBAN AREA RURAL AREA

Percentage population 25.49% 74.51%

Total population 7,19,357 21,02,786

Males 3,64,604 10,71,124

Females 3,54,753- 10,31,662

Literacy rate 86.24%, 90.63% 87.39%, 72.12%


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Belge products

*Pure veg products

Relationship marketing strategies

a. Creating new customers and retaining existing customers.

1. Categorizing customers based on measurable factors such as buyingcycle, customer purchase value, profit/month etc. and following

different strategies for each of the categories to move the customer to

the upper class.

Categorization can be into the following categories:

CAKES PASTERIES MUFFINS

BROWNIES MOUSSES

Bronze

class

Siler

class

!ol"class

Platinum

class


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2. Creating and maintain database for the existing and target customers

with the following parameters:

a. Name

b. Father name

c. Age

d. Address

e. Contact no.

f. No. of family members

g. Date of birth of all the family members with name

3. Making calls on all occasion to exchange greeting and remind them

of Belge cakes and more. This could act as the most cheapest and

convenient way to market themselves.

Advantages

1. Create an impact on customers mind.

2. Inexpensive and easy processes that can be handled by a team

among staff.

3. Effective two way communication to the customers.

b. Relationship marketing through various social media channels.

1. Create digital media presence on platforms like Facebook, Twitter,Google+.

2. Post regularly on the platforms to communicate and get connected to

the customers in a better manner.

3. Launch events and prices for winners.

4. Communicate about the various events and activities in and around

the company. Like discount offers etc.


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This can be done in two ways:

1. Outsource the whole concept of digital marketing to some company.

2. Assign responsibilities to a team by dividing the jobs.

Outsourcing won’t be a good option at this stage as the no. of outlets and

the target customer’s strength is low right now but can be a good option

after some time.

Advantages

1. Better way to get connected to young generation.

2. Effective and efficient way of communication.

3. Better spread and scope.

4. Cheap and easy to use technology.

Employees:

“BelgeTM cakes should understand the importance of its employees.

Belge should harness its employee relations in order to keep them happy

and motivated. Employees with high morale will in turn bring profits to the

organization.

Rules and regulations

• Working Hours:Belge should invest in a system of Full time (FT) and

part time (PT). Full time employees must average work for at least

48hrs i.e.; [(9hrs-1hr. meal break)*6 days] hours per week. Itshould

also encourage youth who want to work as part time employees.

They should be allowed to choose their working shifts. They will need

to work for 7 hrs and will receive their perks as per part time

employees policies. While part time employees can also become a

full time employee by making an average of what is for the time

duration for full timers for a week for continuous 3 months.


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Work schedules are established based on demand and sales volume.

Dress code:All staff members should be given a fun, lively uniform.

The uniform must reflect the spirit of Belge in every sense. All the

employees are needed to follow food safety regulations. The back

end employees need to strictly follow the rules while preparation of

products. These regulations are the key to quality and will take the

firm a long way.

•

Employee Responsibilities: Employee cooperation should beencouraged. This is the best way to ensure the work environment is

free from corruption and harassment.

• In case of leaving the job a person needs to give a notice 2 months

before the date of leaving.

• We have an open door policy and we have meetings around the year

for all the employees. Attendance in such meetings is compulsory.

• Any employee found destroying or damaging company property will

have to face severe actions.

• As the organization is decentralized, as a responsible employee you

are always welcome to keep your viewpoints and suggestions about

any amendments of betterment that can be brought to the

organization. This open conversation will win the confidence of

employees who will give their best in their work.

• Monthly meetings should be conducted to listen to the employees

take on matters and also weekly reports should be collected to mark

progress.An official Whatsapp or Google group may be created for

Belge for fast and urgent conversations to aid in quick decision

making. This group can also be usedto express concerns of

employees.


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Benefits for Employees

• Medical insurance:Belge may offer medical insurance plans wherein

it can pay a major part of the employees’ monthly premium. The

specific company-paid portion may vary based on the plan and tier-

level selected. It will be deducted as (pre-tax) from the pay each

payday.

• Max Life insurance: A tie up with Max(or a similar insurance

company)to provide FREE term life and Accidental Death &Dismemberment insurance to eligible FT employees. This insurance

policy is with collaboration to Max life insurance services.

• Vacation: Employees are provided with facility of taking a paid leave

for (4+1 emergency) days in a month. Employees are given all

national holidays.

o Vacations can’t be taken in peak seasons(Christmas, New

Year, Easter). Information of vacation being taken must be

given in advance.

• Employ meals: Company provides its employees lunch on working

days.

• The Employ referral bonus: If an employee gives referral to high

quality candidate, a bonus is given to the employee.

Perks for Employees• Bonus: Employees may get an equal hours of holiday benefit for

doing over-time.

• Performance appraisal: An employee may get incentives, promotion

and increments based on performance. Performance appraisal is

done every 3 months.

• Employees could be given discounts on Belge products.


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Payment Cycle

At Belge they can follow the practice of giving payments every month on

the first working day. The payment will be in the form of bank account being

credited. The Bakery can have a tie-up with a nationalized bank. And the

salary accounts of all the employees are made in that bank.

Marketing partners:

Strategies:

1. Logistics: Since the bakery is situated in sugar belt surrounded by

many vendors. Company can provide free transportation facility to

frequent suppliers which lies within the radius of 7 Km. this will

encourage them to deliver better quality at minimum operation risk.

(This proposition will require good financial resources, hence can be

started after the company hits break even and begins making profits).

2. Web portal for JIT: If company is willing to lessen the inventory cost

they need to follow the JIT concept, in which each of its supplier

would be registered online hence providing the excess to information

regarding supply of raw material demanded by the company, tracking

the inventory by utilizing tracking software or internal spreadsheets

we can design, we can monitor the whereabouts of the inventory.

This will help us to know how much of your product you have, how

much you need, as well as if anything happens to it (damage, decay,theft, etc). It is important that staff knows how this system works so

they can effectively log information, as well as participate in routine

inventory assessments, moreover we can have SRM software to

manage our supplier, it will provide centralized information to keep

track on them. (Again: installation of such a system requires financial

and technological resources, which can be pursued within a year

from now)


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Credit period: It is very important for any suppliers to have minimum

credit period, and certainly becomes difficult for company to manage

with it. To resolve this problem company should categories their

supplier in tier I, II, & III to prioritize them for paying their money back.

For E.g. Vasantdada Sugar factory could be our Ist priority vendor,

which should take care for credit payment.

3. Keeping lines of communication open

4. : Inviting suppliers for strategy meetings, business events and

parties, keep them informed about customer taste and preferences tomake out best quality.

SOP:

1. Getting the call from vendor that raw material is ready to be shipped,

First locate the vendor within circle, then after pass the information to

you logistic company to which you are paired, give thepurchase/order document to the vendor in reciprocate take invoice

from them and deliver the goods to station, Finally handover the

details (distance travelled, time taken, fuel

exhausted, invoice etc.) to store manager.

2. First and foremost hire a software provider, we need to find the

compatibility of using the software between the vendors and

company, or else there is need to educate them. Once they arefamiliar with the interface we would ask our software provider to

install the setup and apprehend the use of same.


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Fig.Value creation

On the basis of above matrix we would categories our vendors in Tier I, II &

III.

Policies and guidelines:

1. Payment terms as per the categorization

2. Provide free transportation within 7 Km radius.

3. Collaborative programs and meetings.

Financial Stakeholders:

The financial stakeholders/ promoters of the company who would be more

interested in the financial profits of the firm, would like to see a fast and

sustainable growth in their financial indicators like the return on

investments, return on equity etc.

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)C

#*% &o'OR( +i,-

)C

#.%

+i,- OR(

&o' )C

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+i,- OR(

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But since Belge being a start-up company, one has to bear in mind that the

initial profits may not surpass their investments. Hence taking flipkart, the

most successful start-up, into consideration, we suggest the promoters ofthe Belge, at least for the next 2-3 years, to concentrate more on the

valuation of the company, rather than its earnings.

With an objective of not making the valuation a complicated financial

procedure, we have adopted the discounted cash flow method to

understand the present value of the company.

This procedure will be more appropriate to a naive financial promoter who

wanted to understand the financial status of his company in just one figure.

The current value of Belge:

1 2 3 4 5 6 7

Sales

Revenue

8803 20606 22666 24993 27426 28798 31677

(Cost ofProduction)

7575 17287 19126 20678 22193 23849 25718

EBDIT 1228 3319 3540 4315 5233 4949 5959

(Interest) 98 404 365 320 270 213 157

EBDT 1130 2915 3175 3995 4963 4736 5802

(Depreciatio

n)

497 423 360 309 266 229 198

(Written off

Expenses)

80 80 80 80 80 0 0

577 503 440 389 346 229 198

EBT 553 2412 2735 3606 4617 4507 5604

Tax 166 724 821 1064 1385 1352 1681


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EAT 387 1688 1914 2542 3232 3155 3923

CFAT 884 2111 2274 2851 3498 3384 4121

Discounted

CFAT (10%)

803.6

4

1744.6

3

1708.4

9

1947.2

7

2171.9

8

1910.1

8

2114.7

2

NPV= 12400.91

The current value of the company, as calculated, is Rs. 12400910/-. Now

this has to be compared with the promoter’s initial investment which willthen be mapped to their expectations. With the strategies that we have

suggested we believe the above the cash flow to inflate even further, thus

shooting the NPV to move even further, ultimately resulting in the

promoter’s satisfaction.

In this manner the four most important stakeholders of Belge are covered

and strategies to support the relationship marketing have been highlighted.

relationship marketing case analysis

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