MKT610 Customer Relationship Management Assignment 1 Solution Fall 2012

Food Business is one the most sought for businesses in Lahore from the point of view of
customers who are seeking a tasty dinner and also from the point of view of the restaurant
industry which finds it to be one of the most profitable businesses especially in a city like
Lahore. Thus the question “What determines customer satisfaction in restaurant industry
remains at the top of agenda of restaurant owners?”
City Food an eminent restaurant located at the hub of business center has recently
installed a CRM system in order to remain abreast of the changing preferences of their
customers and for determining other known or un-known variables regarding the
satisfaction of the customers. They know that dissatisfied customers never return and
even become a negative word of mouth. Profiles of all customers are either entered and
built in a customer database at the time of billing either with the help of customers’ credit
card details or requesting him or her to fill a small form in exchange of a small treat like a
chocolate cookie or a key ring etc.
Some of the interesting findings or changes taken place after the implementation of the
CRM system are as follows:
Customers come from various segments e.g. Office personnel who would like to enjoy
their food in their lunch time searching for tasty, delicious food options at affordable
prices and convenient locations. The next segment is that of busy working mothers who
owing to their busy schedules at both home and office look for healthy, fresh but
affordable food options. There is also the segment of friends and families group who
would like to enjoy their food and time with their loved ones and peers. CRM system can
track timings of the visits of their customers and categories of food enjoyed by various
Customers evaluate particular aspects of a transaction such as product features (food
quality) and service features (responsiveness etc.) along with price to be satisfied with
their experience at the restaurant. Customer segment information enables the restaurant to
have a customer focus approach and helps them in designing of the menu.
Many customers are members of the “Dinner’s club” which offers them envious
discounts or points accumulated for special occasions like Eid, Birthdays etc. This feature
has especially enabled City Food to secure a strong and loyal base of its customers.
They have also fashioned their menus in a very interesting way e.g. they have designed a
Nutritionist’s corner in their menus focusing on the diet conscious segment of the market.
Spicer’s delight is yet one of another corners offering sizzling food to spicy food lovers.
One of the most interesting features offered by the restaurant is their especially
customized menus featuring customized condiments and dressing options. This also
brings in the feature of cross-selling. Cross- selling is the marketing of complementary
products to existing customers. In this regard, cross-selling takes the form of
complementary babies’ meals. Using such CRM techniques, City Food has increased the
share of wallet of their existing customers.
The annual profits at City Food have trebled since its inception three years back.
According to a survey conducted by Food magazine of a renowned newspaper, City Food
has been viewed as number one restaurant for the year 2011-2012 by general public. It
has also been awarded the best food award by food connoisseurs.
1: You are required to analyze and conduct cost and benefit analysis from organization‘s
perspective which should include—-what benefits does a CRM system offer to City Food
and what are the potential costs of a CRM system for City Food?
2: What benefits does a CRM approach offer to the customers of City Food and what are
the potential costs of a CRM system for customers?