THE UNIVERSITY OF DANANG
VIETNAM - KOREA UNIVERSITY OF INFORMATION
AND COMMUNICATION TECHNOLOGY
FACULTY OF DIGITAL ECONOMY AND E-COMMERCE
------
FINAL ASSIGNMENT
SUBJECT: CUSTOMER RELATIONSHIP MANAGEMENT
Student
:
Võ Thị Trâm
– 22DM098
Nguyễn Văn Phước
– 22DM0
Nguyễn Thị Ngọc Linh
– 22DM0
Lecturer
:
PhD. Lê Phước Cửu Long
Class
:
22GBA
Danang, January 2024
THE UNIVERSITY OF DANANG
VIETNAM - KOREA UNIVERSITY OF INFORMATION
AND COMMUNICATION TECHNOLOGY
FACULTY OF DIGITAL ECONOMY AND E-COMMERCE
------
FINAL ASSIGNMENT
SUBJECT: CUSTOMER RELATIONSHIP MANAGEMENT
Student
:
Võ Thị Trâm
– 22DM098
Nguyễn Văn Phước
– 22DM0
Nguyễn Thị Ngọc Linh
– 22DM0
Lecturer
:
PhD. Lê Phước Cửu Long
Class
:
22GBA
Danang, January 2024
THANK YOU
i
INTRODUCTION
ii
TABLES OF CONTENT
iii
LIST OF FIGURES AND TABLES
iv
1. THEORETICAL BASIS OF CUSTOMER RELATIONSHIP MANAGEMENT
1.1. Concept of Customer Relationship Management
There are two main clusters of CRM definitions – those of the information
technology (IT) industry and those taking a broader strategic or managerial
perspective.
+ IT perspective on CRM: IT companies have tended to use the term CRM to describe the
software tools that are used to support the marketing, selling and service functions of
businesses. This equates CRM with technology.
+ Strategic or managerial perspective on CRM: CRM is a disciplined approach to
managing the customer journey from the initial acquisition of a customer, to that customer
becoming a high spending, profitable advocate, and that technology may or may not have
a role in journey management. This equates CRM with customer management strategy.
+ CRM and Customer experience management: The managerial perspective on CRM is
closely associated with the customer experience (CX) movement. This movement is an
approach to customer management that aims to understand and improve the experience of
customers as they interact with business.
CRM is the core business strategy that integrates internal processes and functions,
and external networks, to create and deliver value to targeted customers at a profit. It is
grounded on high-quality customer-related data and enabled by information technology.
1.2. Three forms of CRM
1.2.1. Strategic CRM
Focuses on the development of a customer-centric business culture dedicated to
winning, developing, and keeping profitable customers by creating and delivering better
value propositions and customer experiences than competitors.
The culture is reflected in:



The leadership behaviors
The design of formal systems of the company
The myths and stories that are created within the company.
Customer Centricity and Other Business Logic




Product-oriented businesses believe that customers choose products with the best
quality, performance, design, or features.
Production-oriented businesses believe that customers choose low-price products.
Sales-oriented businesses assume that if they invest enough in advertising, selling,
public relations (PR), and sales promotion, customers will be persuaded to buy.
A customer or market-oriented company shares a set of beliefs about putting the
customer first. It collects, disseminates, and uses customer and competitive
information to develop better value propositions for customers. A customer-centric
firm is a learning firm that constantly adapts to customer requirements and
competitive conditions.
1
1.2.2. Operational CRM
Operational CRM uses technologies to automate customer-facing business
processes.
CRM software applications that automate marketing, selling, and service processes result
not only in efficiency and effectiveness gains but may also improve customer experience
and engagement.
CRM software applications allow the marketing, selling, and service functions to be
automated and integrated
1.2.3. Analytical CRM
Analytical CRM: involves capturing, storing, extracting, integrating, processing,
interpreting, distributing, using and reporting
customer-related
data to
improve both customer and company value.
▪
▪
Analytical CRM depends on customer-related information.
Customer-related data may be found in several enterprise-wide repositories:
✓
Sales data (purchase history),
✓
Financial data (payment history, credit score),
✓
Marketing data (campaign response, loyalty scheme data)
✓ And service data.
1.3. Customer relationship management models
 The IDIC model
The IDIC model was developed by Don Peppers and Martha Rogers, of the Peppers &
Rogers Group and has been featured in a number of their books. The IDIC model suggests
that companies should take four actions to build closer one-to-one relationships with
customers:
 Identify who the customers are and build a deep understanding of them.
 Differentiate customers to identify which customers have the most value now and
which offer the most for the future.
 Interact with customers to ensure a deep understanding of customer expectations
and customers’ relationships with other suppliers or brands.
 Customize the offer and communications to ensure that the expectations of
customers are met.
 The CRM value chain
2
Francis Buttle’s model of CRM consists of five primary stages and four supporting
conditions leading toward the end goal of enhanced customer profitability. The primary
stages of customer portfolio analysis, customer intimacy, network development, value
proposition development, and managing the customer lifecycle, are sequenced to ensure
that a company, with the support of its network of suppliers, partners, and employees,
creates and delivers value propositions that acquire and retain profitable customers. The
supporting conditions of leadership and culture, data and IT, people, and processes enable
the CRM strategy to function effectively and efficiently.
 The five-process model
Adrian Payne and Pennie Frow developed the five-process model of CRM. This model
identifies five core processes in CRM: the strategy development process, the value creation
process, the multi-channel integration process, the performance assessment process, and
the information management process. The first two represent strategic CRM; the multichannel integration process represents operational CRM; the information management
process is analytical CRM.
 The SCHEMA model
3
The SCHEMA model is a commercial property developed as a benchmarking tool
by TCF (The Customer Framework, www.the customer framework.com), which aims to
help companies strike an optimal balance between customer engagement and profitability.
The model proposes a key financial goal for customer management – the achievement of
sustainable incremental profitability. This goal is achieved when the identified
foundations enable the successful execution of strategies designed to win, keep, and
develop customers cost-effectively. The model identifies four key foundations that
underpin successful customer engagement: direction and leadership (e.g. clarity of strategy,
cross-functional ownership, budgets, measurement); IT and data management capabilities;
organizational culture (ways of working); and competencies of people. The model identifies
five enablers of good customer management, including the deep customer insight that is
necessary for well-targeted marketing, selling, and service; the alignment of brand
positioning with customer experience, and the integration of channels and media and the
way content is created and used. The agility and workflow required to support real-time
engagement (including compliance and decision-making) is a critical enabler as are the
activities that get measured, as they will drive action by management and front-line staff.
 QCI model
4
Described as a customer management model rather than a customer relationship
model, the Quality Competitive Index model focuses on three main activities: acquisition,
retention, and penetration.
The QCI model starts with the customer’s external environment at the top—their pain
points, business goals, and other factors will affect whether they are ready to buy or interact
with your sales team, impacting the customer experience. The customer experience then
affects customer proposition (what you offer the customer) and customer management
activities. As you can see from the magnified version of the inner circle, many activities are
involved to acquire and retain customers.
The QCI model also considers the people and technology involved in keeping this whole
system going. Although QCI has replaced the word “relationship” in CRM, this framework
of CRM still starts and ends with people.
1.4 Customer Journey
The customer journey is a series of steps — starting with brand awareness before a
person is even a customer — that leads to a purchase and eventual customer loyalty.
Businesses use the customer journey to better understand their customers’ experience, with
the goal of optimizing that experience at every touchpoint.
Giving customers a positive customer experience is important for getting customers
to trust a business, so optimizing the customer journey has never mattered more. By
mastering the customer journey, you can design customer experiences that will lead to
better customer relationships, loyalty, and long-term retention.
1.4.1. The Five Stages of the Customer Journey
Every lead goes through several stages to become a loyal customer. The better this
experience is for customers at each stage, the more likely your leads are to stick around.
1. Awareness
5
In the awareness phase, your target audience is just becoming aware of your brand
and products. They need information or a solution to a problem, so they search for that
information via social media and search engines.
For example, if someone searches on Google for pens for left-handed people, their
customer journey begins when they’re first aware of your brand’s left-handed pen.
At this stage, potential customers learn about your business via web content, social
media, influencers, and even their friends and family. However, this isn’t the time for hard
sells. Customers are simply gathering information at this stage, so you should focus first on
answering their questions and building trust.
2. Consideration
In the consideration phase, customers begin to consider your brand as a solution to
their problem. They’re comparing your products to other businesses and alternative
solutions, so you need to give these shoppers a reason to stick around.
Consideration-stage customers want to see product features that lean heavily toward
solving problems and content that doesn’t necessarily push a sale. At this stage, businesses
need to position their solution as a better alternative. For example, a nutrition coaching app
might create content explaining the differences between using the app and working with an
in-person nutritionist — while subtly promoting the benefits of choosing the app.
3. Purchase
The purchase stage is also called the decision stage because at this stage customers
are ready to make a buying decision. Keep in mind that their decision might be to go with
a competing solution, so purchase-stage buyers won’t always convert to your brand.
As a business, it’s your job to persuade shoppers at this stage to buy from you.
Provide information on pricing, share comparison guides to showcase why you’re the
superior option, and set up abandoned cart email sequences.
4. Retention
The customer journey doesn’t end once a shopper makes their first purchase. Once
you’ve converted a customer, you need to focus on keeping them around and driving repeat
business. Sourcing new customers is often more expensive than retaining existing clients,
so this strategy can help you cut down on marketing costs and increase profits.
The key to the retention stage is to maintain positive, engaging relationships between
your brand and its customers. Try strategies like regular email outreach, coupons and sales,
or exclusive communities to encourage customer loyalty.
5. Advocacy
In the advocacy stage, customers are so delighted with your products and services
that they spread the word to their friends and family. This goes a step beyond retention
because the customer is actively encouraging other people to make purchases.
Customer journeys don’t have a distinct end because brands should always aim to
please even their most loyal customers. In the advocacy stage of the customer journey, you
can offer referral bonuses, loyalty programs, and special deals for your most active
customers to encourage further advocacy.
1.4.2. Customer Journey vs Buyer Journey
6
The buyer journey and customer journey are two distinct phases in a customer’s
relationship with a business. Here’s a table outlining the key differences between these two
buyer journey vs customer journey:
Topic
Buyer Journey
Customer Journey
Focus
The pre-purchase stage is focused
on making a purchase decision.
Post-purchase stage focused on
building
a
long-term
relationship.
Goals
To guide potential customers
from awareness to purchase.
To ensure customer satisfaction,
retention, and loyalty.
Stage Names
Awareness,
Consideration,
Decision, Purchase.
Onboarding,
Engagement,
Support, Loyalty, Advocacy.
Content
Content is often product-centric
and geared towards showcasing
features,
benefits,
and
comparisons.
Content is customer-centric,
focusing on support, education,
and adding value.
Touchpoints
Advertising, SEO, social media,
product reviews, etc.
Customer service, onboarding,
email
marketing,
surveys,
feedback loops, etc.
Timelines
Typically shorter, ranging from
minutes to months.
Longer, spanning the entire
customer lifecycle, potentially
years or more.
7
Decision
Making
Focuses on driving a purchase
decision and closing the sale.
Emphasizes
maintaining
customer satisfaction, reducing
churn, and encouraging repeat
business.
Metrics
Conversion rate, click-through
rate, lead generation, etc.
Customer satisfaction, retention
rate, Net Promoter Score (NPS),
Customer
Lifetime
Value
(CLV), etc.
Customer
Relationship
Generally transactional.
Moves toward building a longterm relationship.
Key
Challenges
Attracting
and
converting
prospects into customers.
Retaining customers, fostering
loyalty, and preventing churn.
1.5. Customer service model
- Levels of Service/Sale












Level 1: Initial transactions
Identify customers at risk of leaving, never to return, and find out how they can woo
them back.
Look for ways to teach new customers more about what the Nature Retreat Center
offers and how it works so that there are fewer avoidable service issues.
Give staff tools and training on ways to turn their interactions into revenuegenerating opportunities while at the same time making guests feel well served.
Level 2: Repeat customers
Focusing on getting customers to return for a second, third, or fourth time.
Customers may come back for the same purchase
Customers may turn to you for a variety of products and services.
Level 3: Customer advocates
Represents those customers who are not just satisfied and willing to do business
again.
Customers actively tell others about their positive experiences. They spread the good
word.
Custom Service/Sales Profile
8

The Pyramid Profile


The Pyramid is the conventional way to see the relationship among the three levels.
It applies to the majority of businesses.
As you might imagine, not every pyramid looks like a perfect isosceles triangle.
If you don’t trust your repeat customers to help you “sell” a prospect, then you have
a pyramid with a broad middle and a small top.
In a Pyramid Profile, customer advocates grow directly out of exceptionally wellsatisfied customers.
The Hourglass Profile




9




The Hourglass Profile is less common
In the Hourglass, you have a broad base of initial transactions, only a few of which
become repeat customers
Seek to create customer advocates from as many of those initial transactions as
possible
The Hexagon Profile
10




Self-destruct when supply and demand are no longer in balance and no longer
working in your favor
Has all the repeat business it can handle or wants, so it feels little motivation to
actively seek for Level 3, customer advocates
No strong motivation to focus on initial transactions
Describes a business that is very stable
- Pitfalls of the Customer Service/Sales Profile


Focusing on the top: It’s personally and professionally satisfying to have customer
advocates
Focusing on the front door: Initial transactions are critical, but they’re only one step
in the customer relationship.
1.6. Measurement in customer relationship management
1.6.1. Traditional Marketing Metrics
1.6.1.1. Market share
Market share refers to the percentage of an industry’s total sales that is earned by a specific
company. It is determined by dividing the company’s sales over a certain period by the total
sales of the industry during the same period. This measure is used to provide a rough
estimate of a company’s size relative to its market and competitors. The company with the
highest market share in an industry is considered the market leader.
Formula for Market Share
11
1.6.1.2. Sales growth Measurement
A comparison of the increase/decrease in sales volume or value in a
specified period compared with the previous period (%)
Sales growth in period t (%)
100 x [ jtSjt-1 ]
J = Company
jt:Change in sales in period t compared to period t-1
Sjt-1: Sales in period t-1
1.6.2. Customer_Base Metrics
1.6.2.1. Spending ability
Consumer spending is the total money spent on final goods and services by individuals and
households for personal use and enjoyment in an economy.
Spending ability = Sjj = 1jSj
Sj : The sales that company j achieves with focus customer
j : Company j
1.6.3.1. Share of Requirement
The share of purchases for a specific brand within its category is calculated exclusively
among customers who have previously bought from that brand. This is also referred to as a
share of wallet.
Objective: The aim is to comprehend the origin of market share in terms of the scope and
depth of the consumer base, as well as the degree of relative category usage (heavy users/big
customers versus light users/small customers). When determining the share of
requirements, marketers might consider either monetary value or quantity. However, they
must ensure that their heavy usage index aligns with this selection.
12
1.6.3. Customer Activity Metrics
Achievement rate(%) = 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑜𝑡𝑒𝑛𝑡𝑖𝑎𝑙 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 𝑎𝑐ℎ𝑖𝑒𝑣𝑒𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑡𝑎𝑟𝑔𝑒𝑡
𝑝𝑜𝑡𝑒𝑛𝑡𝑖𝑎𝑙 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠 x 100
The average ability to achieve the customer from a population
Achieve rate is always calculated for a group of customers, estimated on each campaign
Cost of Accomplishment ($) = 𝑡ℎ𝑒 𝑐𝑜𝑠𝑡 𝑜𝑓 𝑎𝑐ℎ𝑖𝑒𝑣𝑖𝑛gn𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑜𝑡𝑒𝑛𝑡𝑖𝑎𝑙 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟𝑠
𝑟𝑒𝑎𝑐ℎ𝑒𝑑
Average Interpurchase Time – AIT
AIT = 1𝑇ℎ𝑒 𝑑𝑖𝑠𝑡𝑎𝑛𝑐𝑒 𝑓𝑟𝑜𝑚 𝑡ℎ𝑒 1𝑠𝑡 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒 𝑡𝑜 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑡𝑖𝑚e
AIT is the average buying distance between 2 purchases
Retention Rate(%) = The difference in number of customers in period tcompared to period
t-1The number of customer of period t-1
= 1Average lifetime
Retention Rate is the ratio of the number of customers retained to the number at risk
Average Retention Rate (%) = 1average customer loss rate
Average lifetime (%) = 11- Average retention rate
Customer loss rate (%) = 1 - Average retention rate
Remaining rate period t (%) = 100 * retention rate * remaining rate of period t-1
1.6.4. Strategic CRM Metrics
1.6.4.1. RFM Analysis
RFM analysis is a marketing technique used to quantitatively rank and group customers
based on the recency, frequency, and monetary total of their recent transactions to identify
the best customers and perform targeted marketing campaigns.
The system assigns each customer numerical scores based on these factors to provide an
objective analysis.
RFM analysis is based on the marketing adage that "80% of your business comes from 20%
of your customers.“ RFM analysis ranks each customer on the following factors:
13
▪ Recency. How recent was the customer's last purchase? Customers who recently made a
purchase will still have the product on their minds and are more likely to purchase or use
the product again. Businesses often measure recency in days. But, depending on the
product, they may measure it in years, weeks, or even hours.
▪ Frequency. How often did this customer make a purchase in a given period? Customers
who purchase once are often more likely to purchase again. Additionally, first-time
customers may be good targets for follow-up advertising to convert them into more frequent
customers.
▪ Monetary. How much money did the customer spend in a given period? Customers who
spend a lot of money are more likely to spend money in the future and have a high value to
a business
▪ Estimating R, F, M by regression technique
▪ Relational quantity used to calculate the cumulative score of each
customer
▪ The higher the accumulated points, the more profitable customers will
be in the future
1.6.4.2. Past Customer Value – PVC
PVC = n = 1nGCin(1 + rn)
▪ GC: Gross Contribution
▪ i: Customer I
▪ R: applied discount rate
▪ n: Time from previous purchase to current purchase
1.6.4.3. Lifetime Value – LTV
▪ Show the value of individual customers to businesses
▪ Assess the value of customers to the business at many times
1.6.4.4. Customer Equity - CE
▪ Shows the total current value of customers to the business
▪ Show off how valuable your business is at a particular point in time through your customer
management efforts
14
2. CRM ACTIVITIES OF DOMESTIC OR FOREIGN ENTERPRISES
2.1. Overview of the Coca-cola company
2.1.1: Basic Information
Company Name: The Coca-Cola Company
Headquarters: Atlanta, Georgia, United States
Business Type: Beverage supply
Website: http://www.coca-cola.com
2.1.2: Formation and Development History
In 1886, Coca-Cola was founded by pharmacist John Pemberton in Atlanta, Georgia, USA.
Pemberton created the formula for Coca-Cola and began selling this refreshing beverage at
Jacobs' Pharmacy.
In 1888, Asa Griggs Candler purchased the Coca-Cola formula from John Pemberton and
established the Coca-Cola Company. Candler transformed Coca-Cola from a novel
beverage into a rapidly growing soft drink company.
In the 1900s, Coca-Cola began expanding beyond the United States and engaged in
international business operations. The first expansions were into Canada and Cuba,
followed by various other countries worldwide.
In 1915, Coca-Cola was distinguished by its distinctive contoured bottle shape. This
became one of the most famous bottle designs and turned into an iconic symbol for CocaCola.
15
During the 1920s, Coca-Cola continued to expand and became one of the widely consumed
beverage brands worldwide. The company established Coca-Cola production plants in
various countries and regions.
In the 1980s, Coca-Cola further expanded and achieved global success. Creative advertising
campaigns such as "Share a Coke" and "Open Happiness" helped enhance brand
recognition and build trust in the brand.
Currently, Coca-Cola stands as one of the largest beverage brands in the world.
2.1.3: Products and Services
The Coca-Cola brand is currently present in over 200 countries and has experienced strong
growth in those regions. As of now, Coca-Cola owns more than 500 sub-brands with over
3,500 different beverages. Operating in the beverage industry, Coca-Cola provides a
diverse range of products. According to information from the official Coca-Cola website,
they offer beverages such as carbonated soft drinks, fruit juices and fruit-flavored drinks,
purified water and tea, sports drinks, and energy products.
The Coca-Cola brand continually expands its product portfolio to meet customer needs.
They consistently research and test new products to provide the best choices for consumers.
For instance, Coca-Cola has introduced new products like Coca-Cola Zero Sugar, CocaCola with pure coffee, and Fanta Lemon.
In the carbonated soft drinks segment, brands like Coca-Cola Classic, Sprite, and Fanta are
very popular in Vietnam, especially among the younger generation. Non-carbonated
beverages such as Minute Maid and Aquarius cater to health-conscious customers seeking
low-calorie drink options. Besides, their energy drink, is marketed to athletes and those
who enjoy active lifestyles.
2.1.4: Target Market
16
Currently, Coca-Cola is one of the largest beverage brands globally. The foundation for
these successful decisions lies in Coca-Cola accurately identifying its target market. The
two main criteria in the process of segmenting the target market that Coca-Cola focuses on
are:
Demographics:

The beverages under the Coca-Cola brand cater to all age groups, including the
elderly. However, the brand primarily emphasizes targeting the younger generation
and adolescents. Coca-Cola consistently conveys the strong message "Taste the
Feeling" to a demographic that is youthful, dynamic, and passionate.
Geography:

Coca-Cola's market is vast, almost covering the global market. For example, in
Vietnam, Coca-Cola has established a robust distribution system spanning urban
and rural areas, lowlands to mountains, and from the South to the North. The
products are widely distributed in bars, supermarkets, convenience stores, and even
on small streets and alleys, allowing Coca-Cola to reach a diverse customer base in
various geographical locations.
However, Coca-Cola still places high emphasis on market segments with high
demand and dense populations. In Vietnam, the brand focuses significantly on
major cities such as Ho Chi Minh City, the capital Hanoi, Da Nang city, etc.
2.1.5: Business Strategy:
Coca-Cola's Business Strategy
Coca-Cola is a continuously evolving business with the goal of becoming the largest
beverage company, providing a wide range of beverages to meet all consumer needs. This
includes products with less sugar, sugar-free options, alongside the need to increase
diversity in product offerings and expand business coverage globally.
According to James Quincey, Chairman and CEO of Coca-Cola, building a portfolio
"Consumer-centric Brand" requires a change in strategy. Instead of selling products the
company has, they should sell products based on consumer preferences. He shared this
strategy as part of the company's future development vision at the Consumer Analyst Group
of New York (CAGNY) conference in Boca Raton, Fla.
To emphasize the importance of staying ahead of trends and responding to consumer
preferences, Quincey stated, "We need to start by asking: What do consumers want? They
are looking for more natural products, products with less sugar, and sometimes, products
that offer more benefits."
2.2. The situation for CRM activities at Coca-cola
17
Nowadays, Coca-Cola is facing increasingly significant challenges due to fierce
competition from rivals, changes in consumer behavior, global economic and political
fluctuations. In this context, Coca-Cola is actively adjusting its Customer Relationship
Management (CRM) strategy to ensure flexibility and effective responsiveness to the
increasingly stringent market demands.
To sustain market share and enhance relevance, the focus is on optimizing
customer experience through CRM strategies. The shift from merely providing products
to building close relationships with customers becomes more crucial than ever, especially
when one of Coca-Cola's most significant challenges is the intensifying competition from
beverage industry rivals:
PepsiCo: As Coca-Cola's main competitor, the competition between these two companies
has spanned decades. Both provide non-alcoholic beverages, and PepsiCo's marketing and
product development strategies pose considerable challenges to Coca-Cola.
Nestlé: A leading company in the food and nutrition industry with a strong presence in the
soft drink market. Brands like Nestea from Nestlé create competition for Coca-Cola,
especially in the bottled or canned beverage segment.
Dr Pepper Snapple Group: A major beverage company offering a variety of soft drinks,
energy drinks, and fruit juices. Well-known brands such as Dr Pepper, Snapple, and 7UP
contribute to the diversity and strong competition in the market.
Monster Beverage Corporation: Renowned for energy drinks, this company poses a
significant challenge in the specialized beverage segment. The market growth and
consumer preference for these products create a noteworthy competitor for Coca-Cola.
Suntory Holdings Limited: A multinational company based in Japan, participating in the
global beverage market. They provide a range of products from soft drinks to alcoholic
beverages and are particularly famous for leading bottled water brands like Iyemon Cha
and Pepsi.
These competitors are applying diverse strategies to attract and retain customers,
from product innovation to pricing and performance promotion. To face this competition,
Coca-Cola needs to continually update and optimize its CRM strategy to maintain and
strengthen customer attention and loyalty.
Amidst changing consumer trends, the increasing priority for healthier beverages
presents a new market environment and unique challenges for the beverage industry,
including Coca-Cola. Adapting to meet customer needs proactively is essential.
Enhancing Health Awareness: Consumers are becoming more aware of the impact of
food and drinks on personal health. This trend aligns with the growing emphasis on selfcare and maintaining a healthy lifestyle. Sugar-free, reduced-sugar, and natural products
are becoming top priorities.
18
Rise of Functional and Energy Drinks: Consumers seek not only relaxation from
beverages but also health benefits or energy boosts. This has driven the growth of the
functional beverage and energy drink market, an area that Coca-Cola needs to consider
for quick adaptation.
However, beyond changes in consumer markets, economic and political
fluctuations globally are impacting Coca-Cola's CRM strategy. In challenging economic
conditions, consumer demands may change rapidly, making maintaining a flexible
customer database crucial for adapting to these shifts:
Influence of Pandemics and Economic Crises: The COVID-19 pandemic and related
economic crises have significantly impacted consumer behavior and purchasing decisions.
Consumers may shift their priorities, focusing on value and safer products, affecting
Coca-Cola's business situation.
Currency Fluctuations and Raw Material Costs: Examples include sugar and
aluminum for packaging, which can influence production costs and the final product
prices. As a globally operating company, Coca-Cola must face these fluctuations and
adjust pricing and supply sources to maintain a competitive edge.
Tax Policies and Regulations: These can create challenges in managing prices and may
even require adjusting product components to comply with specific legal and tax
requirements of particular countries. Coca-Cola needs to maintain flexibility and be ready
to adapt to changing political environments.
In summary, Coca-Cola's CRM situation reflects their agility and adaptability in
facing challenges from fierce competition, changing consumer behavior, and global
economic and political fluctuations. The combination of understanding customers through
data and flexible adjustment of CRM strategies is the key for Coca-Cola not only to
survive but also to thrive in this increasingly challenging business environment.
2.3. Customer Relationship Management at Coca-Cola
2.3.1. CRM Operational Process at Coca-Cola
2.3.1.1. Customer Database Building
As a global beverage company with billions of customers worldwide, Coca-Cola has built
a comprehensive and accurate customer database through information from various
sources:
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Purchase transactions: Data collected about customer purchases from the
company's sales and ERP systems. This information includes names, addresses,
phone numbers, emails, purchased products, quantities, prices, etc.
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Surveys and market research: Conducting surveys and market research to gather
information about customer needs and behaviors. This information includes
product preferences, shopping channels, etc.
Loyalty programs: Coca-Cola has a loyalty program called My Coke Rewards,
providing the company with information about customers' purchase history,
preferences, and behaviors.
Online interactions: Collecting information about customers' online interactions
with the company, such as calls, emails, social media feedback. This information
includes customer feedback on products, services, and their overall experience
with Coca-Cola.
2.3.1.2. Data Analysis
The main goal of data analysis from the customer database is to differentiate various
customer patterns and categorize them into distinct segments for sales purposes. For CocaCola, this includes factors such as:
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Customer needs and preferences: Using data analysis to understand more about
customer needs and preferences, such as favorite products and services, preferred
shopping channels, etc.
Targeting effective marketing campaigns: Using information obtained from data
analysis to target more effective marketing campaigns, like sending promotional
emails to customers likely interested in new products.
Providing better customer service: Utilizing information from data analysis to offer
better customer service by identifying customers likely to encounter issues and
providing early support.
Developing new products and services: Using information from data analysis to
develop new products and services that meet customer needs, identifying new
niche markets.
2.3.1.3. Customer Identification
Based on the analysis of the customer database, Coca-Cola identifies target customers and
tailors personalized interactions in various ways:
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Using customer data: By collecting customer data from various sources, including
purchase history, customer feedback, and website visits, the company uses this
data to understand more about customer needs and preferences.
Utilizing advanced technology: Applying modern advanced technologies such as
artificial intelligence (AI) to create more personalized interactions. For example,
Coca-Cola uses AI to generate personalized product recommendations or
automatically respond to customer queries.
Focusing on consistency: Coca-Cola emphasizes the consistency of personalized
interactions across all customer touchpoints. This means using the same
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information and materials across all channels, as well as training employees on
providing consistent customer service.
2.3.1.4. Relationship Measurement
Coca-Cola has implemented a comprehensive and systematic approach to measuring the
effectiveness of personalized interactions. The company uses various metrics to gauge
performance, including:
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Customer satisfaction: Based on surveys and customer feedback to measure
satisfaction with personalized interactions. The company asks customers about the
appropriateness, usefulness, and attractiveness of these interactions.
Customer loyalty: Using customer purchase history data to measure customer
loyalty. The company tracks the frequency of customer purchases, the quantity of
products they buy, and the value of their transactions.
Sales volume and profit: Using sales and profit data to measure the impact of
personalized interactions on sales volume and profitability. The company monitors
sales figures for specific products and services, as well as profits from those
products and services.
2.3.2. The effectiveness of Coca-cola’s CRM strategy in communicating with its
customers
2.3.2.1. Customer Satisfaction
According to the 2023 JD Power survey, Coca-Cola scored higher than the industry average
in customer satisfaction. With the reputation of being a leading global beverage brand, the
company has significantly invested in technology and processes to collect, analyze, and
utilize customer data for creating personalized interactions, giving them a competitive
advantage in CRM. In a 2022 survey, 80% of Coca-Cola customers reported being satisfied
or very satisfied with the company's personalized interactions. This is a significantly higher
rate compared to competitors in the industry.
2.3.2.2. Customer Feedback
Coca-Cola heavily invests in diverse customer care channels, including call centers, email,
social media, and online chat, providing the company with a comprehensive view of
customer needs and desires. This information has been used to develop new products,
enhance the taste of existing products, and introduce attractive promotional programs.
Coca-Cola also uses customer feedback to strengthen customer loyalty through programs
like point accumulation for gift redemption.
2.3.2.3. Product Quality and Design
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The success of the company can be attributed to factors such as leading product quality and
design, with a diverse product portfolio including soft drinks, sports drinks, coffee, tea, and
nutritional products. Coca-Cola's
Coca-Cola has established a strong brand image that transcends gender, age, and
geographical locations. The brand is widely recognized worldwide, and millions of people
globally consume Cproducts are highly rated for quality and taste, leading to customer
loyalty and higher sales.
According to a 2022 survey, 80% of Coca-Cola customers were satisfied or very satisfied
with the quality and taste of the company's products. This indicates that customers highly
value and prefer Coca-Cola's products. Additionally, Coca-Cola constantly innovates and
develops new products to meet changing customer needs, helping the company maintain its
leading position in the industry and continue its success in the future.
2.3.2.4. Communication
Coca-Cola products as part of their daily diet. Coca-Cola has been a leader in the
soft drink market since its inception. The brand image is a crucial factor influencing Coke's
sales. Coca-Cola's bottling system enables the company to take advantage of limitless
growth opportunities globally. This strategy allows Coca-Cola to serve a large and diverse
geographic area.
2.3.2.5. Sales and Repeat Business
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Global retail network: Coca-Cola operates in over 200 countries and territories,
with more than 240 million retail points. This allows the company to reach 70% of
the world's population.
Diverse product portfolio: Coca-Cola offers a diverse range of products, including
soft drinks, sports drinks, coffee, tea, and nutritional products. The company's
product portfolio includes 500 brands and nearly 3,500 beverage options.
Strong brand image: The most widely recognized brand globally. According to a
2022 survey, 94% of consumers worldwide are aware of the Coca-Cola brand.
Continuous innovation: Constantly investing in innovation to meet changing
customer needs. In 2022, Coca-Cola launched 100 new products globally.
2.3.3. Coca-Cola's Position in CRM Compared to Competitors in the Industry
2.3.3.1. Quantity of Products Sold
The biennial business report of Swire Pacific reveals the business operations of its
subsidiary specializing in beverages, Swire Coca-Cola, in Vietnam, recording revenue of
over 1.85 billion Hong Kong dollars (HKD), equivalent to more than 5.673 trillion
Vietnamese dong. The pre-tax profit, depreciation, and interest expense (EBITDA) reached
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over 260 million HKD (approximately 804 billion VND), with a direct allocated profit to
the parent company of more than 90 million HKD (around 281 billion VND).
Concerning Coca-Cola's revenue in Vietnam, it has witnessed continuous growth from over
5 trillion VND in 2014 to nearly 9.3 trillion VND in 2019. In 2020, due to the outbreak of
the Covid-19 pandemic, Coca-Cola Vietnam's revenue decreased to around 8 trillion VND.
2.3.3.2. Market Share
Coca-Cola holds a market share of 51% in carbonated beverages, higher than its competitor
Pepsi with 22.7%. Coca-Cola also has a significant market share in the segments of sports
drinks (39%) and fruit juices (25%) in Vietnam.
2.3.3.3. Profitability
Among the top markets in the first half of the year, Vietnam ranked third in revenue after
the United States and China. The after-tax profit recorded was approximately USD 33.21
million during the period.
2.3.3.4. Customer Feedback
Coca-Cola is highly praised for its customer feedback, with quick response times and
professional service quality. The company has received numerous awards for customer
service, including the World Service Award in 2023.
2.4. Advantages and Disadvantages
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2.4.1. Advantages
CRM helps Coca-Cola enhance with customers relationships and interactions by
collecting, analyzing, and utilizing customer information. Detailed customer information is
gathered from various sources such as social media, websites, or direct purchasing
transactions. For example, Salesforce is one of the CRM tools used by Coca-Cola to manage
customer information, helping them better understand customer needs, preferences, and
tastes. This platform also assists in creating personalized experiences for B2B customers,
allowing stores to place orders through various channels, not just through phone calls or
sales representatives but also through B2B e-commerce websites of distributors.
Furthermore, data collected from CRM helps Coca-Cola create personalized
marketing and advertising strategies, from messages to promotions, tailored to the specific
needs of each customer segment. As a result, they have developed more effective marketing
and sales strategies, meeting customers’ precise needs and contributing to increased loyalty
and positive interaction with customers.
Coca-Cola is renowned for its carbonated beverages and operates in a vast market.
Through CRM, they manage an extensive distribution network from manufacturing plants
to retail points and distributors, effectively tracking customer orders. This helps Coca-Cola
optimize the supply chain, improve communication with distributors, and ensure timely
order fulfillment. CRM data provides detailed information about consumer trends and
customer priorities, supporting Coca-Cola in building effective marketing strategies and
enhancing customer relationships.
CRM also helps Coca-Cola optimize business processes. Automating customer
interaction processes such as sales and customer care saves time and effort for Coca-Cola.
Additionally, CRM improves employee work efficiency by providing information and
management tools, making it easy for them to access customer information quickly.
2.4.2. Disadvantages:
One limitation for Coca-Cola is its real-time interaction capability with customers.
Despite multiple interaction channels, providing instant and real-time interactive
experiences and personalization remains a challenge. Especially for a large-scale
enterprise and market like Coca-Cola, handling and responding quickly to millions of
customer requests and feedback requires a robust infrastructure and more efficient
organizational processes.
For an effective CRM model, continuous investment in technology and human
resources is necessary for Coca-Cola to maintain and enhance data quality, as well as to
improve and optimize marketing strategies and customer interaction. Therefore, it demands
a significant and ongoing financial investment.
As a global corporation like Coca-Cola, integrating data from various sources and
ensuring the consistency of CRM systems in different markets still presents challenges.
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Processing and analyzing data from different countries and regions remain difficult and
require careful synchronization and standardization.
2.5. Lessons Learned - Recommendations
2.5.1. Lessons from Exemplary Studies
Based on the case study of Coca-Cola, there are several important lessons that
businesses should draw when implementing CRM activities, including:
• Clearly Define CRM Objectives: Coca-Cola clearly defined its CRM objectives as
understanding customers, enhancing customer loyalty, and increasing sales. They used
customer data to gain a deeper understanding of customer needs and desires.
• Invest in CRM Technology: Coca-Cola invested in CRM technology to collect and
analyze customer data, enabling them to gather customer data from various channels and
analyze it quickly and efficiently, such as sending personalized marketing emails and
tracking customer behavior on their website and mobile app.
• Deploy Appropriate CRM Strategies: Coca-Cola deployed CRM strategies tailored
to each stage of business development. In the initial stage, they focused on building a
customer database and collecting customer data. In the later stage, they concentrated on
using customer data to personalize customer experiences and enhance customer loyalty.
For example, with their main target customer file being young people who have a
carefree and expressive lifestyle, Coca-Cola launched the "Share a Coke" campaign with
personalized product labels to convey the message: If you love/miss/like someone, share a
Coke with their name. This campaign was immediately well-received and highly
successful.
• Use Data Analytics Tools to Understand Customers Better: Coca-Cola used data
analytics tools to better understand customer needs, desires, and behaviors. They used this
data to make informed business decisions, such as determining new market niches for low
or no-sugar beverage options to meet current customer preferences for healthier eating.
• Leverage Digital Marketing Channels to Connect with Customers: Coca-Cola
utilized digital marketing channels such as websites, email, social media, etc., to connect
with customers and gather customer feedback. They used these channels to send marketing
messages, organize promotional programs, and collect customer feedback.
• Employee Training: Coca-Cola trained its employees to improve the quality of
customer service. Employees were trained on how to collect customer feedback, resolve
customer issues, and provide excellent customer service. They established a training center
for their employees, where they were trained on customer service skills.
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2.5.2. Lessons for Other Businesses
The case study of Coca-Cola provides valuable insights that go beyond the beverage
industry, offering a roadmap for effective CRM implementation across various businesses.
Key points that can be applied to any company include:
• In-Depth Understanding of Customer Needs: Actively attract customers through
surveys and interviews, comprehensively understanding their needs, preferences, and pain
points based on existing data. Adjust CRM programs to meet the specific needs and
expectations of each customer segment.
• Personalized CRM Programs: Generalized campaigns and interactions make it
challenging for customers to engage. Utilize insights based on data to personalize
communication activities, offers, and suggestions for each individual. Develop CRM
programs based on customer needs and market trends. Continuously refine approaches
based on feedback and data analysis. Interactions must provide tangible value to customers,
strengthening their relationship with the brand.
• Measure and Improve CRM Effectiveness: Establish a performance measurement
system for CRM aligned with business goals. Monitor key metrics such as customer
acquisition costs, retention rates, and customer satisfaction. Identify areas for improvement,
optimize CRM strategies, and ensure they are consistently aligned with business objectives.
Learn from the successes and failures of others, analyze how competitors are attracting their
customers, and identify opportunities to differentiate your approach.
By applying these general lessons derived from Coca-Cola's exemplary case study,
businesses of all sizes can build and implement effective CRM strategies to enhance
customer satisfaction, loyalty, and ultimately achieve long-term business growth.
2.5.3. Lessons for Enhancing Customer Relationship Effectiveness
Building strong customer relationships is the key to success in any business. While
core principles of understanding, personalization, and exceeding expectations remain
crucial, mastering the art of customer relations requires a deeper dive. Some factors to
enhance the effectiveness of customer relationships include:
• Harnessing the Power of Data Sources: Go beyond basic demographic information.
Utilize data analytics to identify customer segments with common interests, purchasing
behaviors, and pain points. This allows for highly personalized interactions, targeted
campaigns, and proactive solutions before issues arise.
• Building Emotional Connections: Customers desire more than just successful
transactions. They seek emotional connections and relationships with the brand. Cultivate
community awareness through loyalty programs, exclusive events, initiatives, or co26
creative innovations that engage your customers in product development or brand
storytelling.
• Mapping the Customer Journey: Map the entire customer journey, from the first
contact to post-purchase interactions. Analyze touchpoints, identify potential conflicts, and
optimize each stage for a seamless experience. This may involve streamlining onboarding
processes, providing real-time support during decision-making, or delivering personalized
post-purchase content to engage customers.
• Developing a Customer-Centric Culture: Embed the customer-centric approach
into your organization's DNA. Encourage collaboration between departments, empower
employees to dedicate themselves fully, and timely recognize and reward individuals
consistently delivering the expected customer experience. This fosters and ensures
everyone is invested in building long-term customer relationships.
• Capturing Feedback Loop: The key is to listen actively, providing feedback
channels through surveys, social media, or direct communication channels. Actively collect
and analyze feedback, valuing genuine feedback and implementing deep insights to
improve services and customer interactions continuously.
• The Power of Storytelling: Create compelling stories that resonate with the values
and aspirations of your customers. Showcase how your product or service solves real-world
problems, inspires them, or improves their lives. This emotional connection builds trust and
nurtures loyalty.
• Leveraging Technology: Maximize using chatbots supported by AI for 24/7
assistance, through machine learning algorithms or predictive analysis deployment to
suggest personalized content based on customer needs and proactively provide solutions.
Technology can enhance efficiency, personalize interactions, and free up human resources
to focus on building deeper connections.
These lessons, when implemented, can significantly contribute to the overall success and
sustainability of customer relationships in various business environments.
3. CONCLUSION
3.1. General assessment
Customer Relationship Management (CRM) strategy has played a crucial role in
helping Coca-Cola maintain and expand its market, contributing significantly to the
company's remarkable achievements. By leveraging technologies and digital marketing
strategies, they have created excellent opportunities to interact with customers and gather
essential data.
The CRM strategy not only enables Coca-Cola to collect data from various sources
but also allows them to analyze this information to understand the market and customer
needs better. This has helped them create more effective advertising campaigns and
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customer engagement through online channels and vending machines. For example,
creating vending machines that allow customers to customize and create beverages
according to their personal preferences while providing valuable data on their tastes and
preferences. Using this data, Coca-Cola can deliver personalized services, building stronger
bonds with customers.
Furthermore, maintaining and improving their CRM strategy will continue to be a
critical factor in sustaining their position in today's fierce competitive environment. By
consistently capturing customer information and applying appropriate marketing strategies,
Coca-Cola can maintain good relationships and attract many new customers.
3.2. Lessons Learned
The case study on Coca-Cola's CRM illustrates that having clear goals, investing in
technology, and adopting flexible strategies are decisive factors for success. Deep
understanding of customers and personalizing their experience has been instrumental in the
exemplary success, as seen in the "Share a Coke" campaign. An important lesson is that in
business, effective CRM requires a focus on customers and the ability to adapt to each stage
of development. They applied CRM to their business in a very innovative way,
understanding customer needs, personalizing campaigns, and continuously improving
based on data, leading to significant success. The lesson from them is not just about
beverages but also about building robust customer relationships. This affirms that applying
these principles to any business can open the door to customer satisfaction and sustainable
growth.
4. REFERENCES
https://blog.slimcrm.vn/crm/mo-hinh-crm
https://www.coca-colacompany.com/
https://en.wikipedia.org/wiki/Coca-Cola
https://crmside.com/coca-cola-crm-case-study/
5. DUTIES AND CONTRIBUTIONS OF EACH MEMBER
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