Recommendations to Volkswagen on Managing Customer Relationship Essay

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VW on CRM

Customer Relationship Management (CRM) highlights the significance of the ability of companies in managing customer relations, current and future ones (Kumar & Reinartz, 2012). The concept occurs as a win-win for customers and companies. Customers benefit with desirable customer service delivery. On the other hand, companies can capitalize on the opportunities in customer-company interaction to enlighten the customer on new products and services. CRM occurs as the foundation of contemporary marketing strategy utilized by companies. It is crucial to pay attention to the aspect of CRM as it carries benefits and demerits alike.

Lack of a proper design plan of the CRM that relies on company objectives could see the company lose companies, current and prospective ones. The success of the CRM depends on three elements of People, Process, and Technology. Out of the three, people occur as the most critical element. The aspect of Process describes how the company designs the program. Technology entails the utilization of technologies to improve CRM. Technological advancements have resulted in the creation of social sites such as Facebook, Instagram, and Twitter (Buttle & Maklan, 2015). It is crucial that companies identify the best practices in utilizing these sites to improve CRM. Poor use of social sites may taint a company's image depriving its success. In this paper, we analyze the significance of creating a reliable relationship with present and potential customers for the VW Company. The research takes into account a study on customer relation programs adopted by the company and the best practices to improve the CRM in the Chinese market.

Background Information

VW has struggled to establish a grip on the Chinese market since its entry for over a decade. As a result, VW has endeavored to establish an effective CRM program to capitalize on the potentiality of the market. However, the efforts put in place on the CRM have not yielded significant benefits for the carmaker in the market in the recent years. The intense competition from foreign carmakers in the market has made it difficult for VW to realize its full market potential. Rivals such as Mercedes and BMW have adopted similar strategies as that of VW's in setting a strong connection with potential customers.

Based on these happenings, it is crucial that the company adopt an effective CRM that capitalizes on market dynamics to gain new customers and maintain the existing ones. Maintaining a similar program with that of competitors deprives the aspect of growth and development for VW. It is crucial to adopt a unique and appealing CRM strategy to connect with customers efficiently. The paper lobbies various new strategies that include the organization of a monthly party termed the 'Volkswagen Open-day'. In such an event, the company can invite a director from different departments to comment on the company's culture. Through such an interaction, staff and people can mingle and listen face-to-face on various queries they may carry the products and services provided by VW. It is crucial to acknowledge that poor performance of the CRM occurs as an opportunity for the company to enhance various marketing strategies to propel increased sales.

Articulation of the Problem

In the recent years, VW has experienced stiff competition from competitors that have stiffened the company's progress. The company has also recorded slow utilization of the CRM program based on various eminent challenges revolving around the lack of uniqueness in CRM programs. Competitors such as BMW and Mercedes have utilized similar CRM programs like that of VW. All these companies have engaged in emailing potential customers of the new products and policies. Further, the carmakers have other media platforms in updating information about new products and services. The constant update on the news has created boredom for customers. Statistics from the VW staff indicates the slow increase in Twitter followers for the company. Further, some Twitter followers have unfollowed staff, members.

Lack of effectiveness of VW's CRM program has derailed the overall growth of the company in China. Competition from rival companies has curtailed growth prospects for shareholders, employees, and the company as a whole. Low sales mean that shareholders may incur losses from based on share prices. Some shareholders may also opt to quit the company due to poor performance in the market. Sales and marketing department suffers from immense pressure to convince individuals to purchase VW's products and services. Poor performance may result in employee layoffs, a potential event in case of a failing company. The company may engage in cost-cutting measures that curtail employee motivation.

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Ineffectiveness of CRM programs affects the company's market share resulting in low sales. Low sales translate to lower market share prices, a crucial aspect that lures investors to a company. From 2010, VW has struggled to attain a significant grip on the Chinese market, an aspect crucial for the company's growth. The failing CRM programs cost the company in the resources 'pumped' to realize the programs. Undeniably, VW has spent significant resources, in terms of human capital, time, and money in the implementation of the CRM programs. Investing into a program that does not yield benefits limits the progress of the company. However, depreciating sales' volume explains the urgency to address the eminent problem of the CRM program in place. Clearly, the ineffectiveness of the CRM program occurs as a crisis for VW in all the elements that the company embodies. Stiff competition in the Chinese car market has propelled the urgency of unique CRM programs that utilize the challenging opportunity as an advantage.

Perspectives related to the problem

The slugging Chinese economy has explained the decline in sales in the nation (Ewing, 2015). At one point, China occurred as a hot emerging market for VW. Statistics indicated of a slump in the sales, a drop of 3.9% to 1.74 million units of vehicles this year. In 2005, deliveries to China slumped by 14% (Bloomberg Business, 2015). Despite the stiff competition in the Chinese market, changing customer preference explains the slump in sales. Over the years, VW has focused on the sedan-centric fleet. However, customers today have made a big switch to the preference of sport utility vehicles (SUVs). The switch affects VW, as it does not boost of a variety of SUVs in its fleet of vehicles. Further, the company has depicted adapting slowly to the changing tastes in vehicles (Bloomberg Business, 2015). Arguably, VW has failed to address the shift in customer preference from sedan-eccentric vehicles to SUVs.

The moderation in China's economic growth this year has slowed auto sales. Various cities in China have capped the number of new cars in the streets. Further, the volatile stock market explains the diversion of funds from purchasing vehicles. The highlighted factors explain the challenges that face the company, some of which links with the challenges in the implementation of the CRM program (CNN Money, 2015).

Globally, VW has also experienced the brunt in the decline of the sales while other German carmakers such as Audi and Porsche have recorded increase in sales within a similar period. Clearly, VW requires the realignment of company strategies to tap into the market and regain the 'lost glory.' Out of the planned strategies, the CRM program stands out as a crucial element to foster increased sales.

Alternative Solutions

Adopting a new CRM program endeavors to benefit the company through increasing sales and public exposure. Various steps utilized in this program entails the establishment of a communication platform between VW and existing customers on their opinions regarding the company's marketing strategy on social media. In this case, the program may delve in getting in touch with individuals that unfollowed the company. VW can ask for their opinions on the idea of the 'Volkswagen Open-Day' party that happens on a monthly basis. Through such a platform, VW can engage in convincing the customers on the benefits of such a party in terms of the amount of information gained through mingling with the company's staff. In such events, existing and potential customers benefit from the adequate information gained from such a meeting. Researching on the experiences of other companies such as Disney Land creates room for creativity in getting and maintaining customers. Disney Company deals in the creation of a comfortable zone for customers. Getting insights from this company facilitates the having people to have fun and the company to convey the message clearly.

Utilization of social media promotion for this party ensures that the advertisement manages to pull a significant number existing and potential customers to the party. At the end of this party, getting views and feedback from the participants creates a lively interaction between the company and customers. Views and feedbacks from the meeting enable to the company in properly adjusting to any changes that benefit it. People's pieces of advice play a crucial role in identifying the best approaches to dealing with the market world in terms of increasing car sales.

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VW occurs as the second home market based on the history of car sales.....

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