6. Conclusion and implications
6.2 Managerial implications
This study has several managerial implications. First, convenience stores could use CRM strategies to differentiate their products and to increase long-term market share. Therefore, CRM is a useful tool for marketing or promotion.
Second, convenience stores could win over switchers via instituting an effective CRM program. Compared with the short-term promotions, such as price discounts or coupons, the stores must also consider the long-term benefits to the store which may accrue from employing the CRM strategy. Consumers who buy a product for the first time during a CRM activity may become loyal customers, thus creating a long-term income stream and profit. While a promotion with discount program may get one-time customers, the positive associations with the charity may allow the store to accrue more long-term customer relationships. For example, although most of the goods sold in convenience chain stores are fast moving consumer goods, FamilyMart has engaged in long-term charitable care of young people. This has enhanced the stores’ image, and apparently led to an
increase in its market share, and created a long-term income and profit stream.
Third, to prevent negative customer perception and loss of loyalty, the amount of donation should not be lower than the price difference between the stores with and without CRM. Consistent with literature, our study shows that consumers may not support a CRM campaign when the price makeup for CRM is higher than the donation amount (Chang, 2008; Pracejus and Olsen, 2004;
Subrahmanyan, 2004). Price is a key determinant in consumers reacting to a CRM activity. Fourth, we suggest that the convenience store using CRM should establish its long-term and consistent brand image. As a new product that fits with its brand image has a positive effect on consumers’ evaluation (Chow, Yang and Lai, 2005), consumers may have altruistic attribution and non-contradictory perceptions if CRM fits the convenience store’s long-term image.
Finally, stores adopting CRM strategy should consider the cultural differences. For example, in Taiwan, since consumers generally believe that karma will bring good fortune if they do good works, stores should advertise their CRM support and carefully choose their charitable programs, including the charitable cause, price, and donation amount to prevent consumers ascribing self-interest to the CRM strategy. FamilyMart launched a CRM in 2015 in which it donated 10 NT dollars per sale of the Loving Soft Serve Ice Cream to sponsor the Secret Learning Bases in rural areas. Although the price of Loving Soft Serve Ice Cream is 40 NT dollars and is 5 NT dollars higher than the ordinary price of soft serve ice cream, many customers sought to support this charity by buying the Loving Soft Serve Ice Cream. It was obvious to consumers that the amount of donation was greater than the price trade-off between the charity ice cream and the ordinary ice cream. Therefore, the Loving Soft Serve Ice Cream donations proved to be a successful CRM strategy. Eventually, 467,559 charitable cones were sold, for a total donation amount of 4,675,590 NT dollars between June 10th and December 31, 2015. In the Loving Soft Serve Ice Cream example, the Company made clear that FamilyMart would match the 5 NT dollar donations made by consumers. Doing so emphasized that the amount of donation was greater than the price trade-off, and that the motive of FamilyMart was not self-interest.
6.3 Limitations
This study has shortcomings in research design, which may limit the generalization of the findings. First, the study is based on specific CRM activities and store types. To present more general conclusions on the role of price trade-off in CRM, further studies may cover other store types, such as drug stores and fast food restaurants. Second, in targeting customers, we used a two-stage cluster sampling scheme and randomly chose the districts where these convenience stores clustered within 500 meters. Therefore, our sample may have a slight selection or location bias. This selection affects the generalization of the results for the population of Taipei. Further studies may improve the sampling method to target citizens of the whole City. Location bias is important also because beliefs regarding motives of firms launching CRM activities may be different between consumers in urban and rural areas. Therefore, urban-rural comparison is one of the possible future research directions. Furthermore, it would be interesting to use multinational or multicultural sample to show the cross-cultural or cross-country analysis. Third, we examine the effects of CRM strategy in the case in which convenience stores engage in CRM activities unilaterally. Further research could extend the framework to examine the long-term market shares when all stores launch CRM campaigns. Fourth, while this study focused on price and donation issues, we recognize that many factors determine the success of CRM activities. Further research could extend the scenarios to examine the interaction effects of price and store/cause fit on long-term market shares of firms launching CRM programs.
Appendix A
aRepresentative of the people, the chief executives and managers
8 3.83
Professionals 30 14.35
Staff 3 1.44
administrative matters 10 4.78
Service staff and sales clerks 23 11.00 Technical workers and related workers 6 2.87
Others 26 12.44
Total 209 100.00
Education Senior high school 1 0.48
Senior high school 24 11.54
College and university 147 70.67
Master 36 17.31
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