Table of Contents
1. Introduction. 3
1.1 Background Information. 3
1.2 Research Problem.. 4
1.3 Research Aim and Objectives. 4
1.4 Tentative Research Questions. 5
2. Literature Review.. 5
2.1 The Concept of Customer Relationship Management 5
2.2 Social Media. 6
2.3 The Evolving Role of Social Media in CRM in the Airlines Industry. 7
2.4 Conceptual Model 8
3. Research Design and Methodology. 9
3.1 Type of Investigation. 9
3.2 Data Collection Method. 10
3.3 Sampling Method. 11
3.4 Accessibility Issues. 11
3.5 Ethical Considerations. 11
3.6 Data Analysis Plan. 12
3.7 Research Limitations. 12
4. Timetable – Research Plan. 12
5. Reference List 14
1. Introduction
1.1 Background Information
The rapidly developing social media provides a big opportunity for organisations to improve their communications to their target customers (Chailom and Kaiwinit 2011). The increasing need for business organisations to get closer to the customers and understand their needs better and in most convenient manner necessitates the establishment of an integrative platform for both customers and organisations. As a result, the advancement of social media platforms making it possible for both communication and customer engagement brings a new opportunity into the current market sphere where customers and organisations are now linked more strategically. With business organisations being desperate to retain their customers, while attracting new ones, the role of social media has never been so critical than today; as the competition in the markets intensifies (Greenberg 2010). Currently, about 57% of the global population uses social media tools in their communication (Dutta et al 2011).
The airlines industry is reportedly one of the most competitive in the service sector where operators in the industry seek to not only understand their customers’ needs, but also track the level of customer satisfaction for their services (IBM 2012). As a result, using the modern social technologies to reach customers has been one of the fundamental practices for competitiveness among the players in the industry. One of the key players in the airlines industry in the UK is the British Airways with about 46% market share in the UK airlines industry (Rothwell 2011). This study will focus on the role of social media in the British Airlines company as part of its customer relationship management (CRM) strategy. By so doing, the researcher will further generalise the findings to the entire airlines industry.
1.2 Research Problem
According to a study conducted by IBM (2012), the airlines industry is among the most stiffly competed in the service sector due to the low differentiation of the services offered in the industry. This necessitates firms operating in the industry to devise more innovative strategies through which they can improve their relationship with their target customers through CRM systems. Given the popularity of the social media today (reaching about 57% penetration levels), it is clearly evident that it is developing to be one of the most convenient and effective platforms through which communication to the customers is not only enhanced, but also customers are engaged as well (Avanade White Paper 2008; Bhagat et al 2009).
With CRM being associated with understanding customer needs while addressing any complaints in timely manner (Baird & Parasnis 2011); the role of social media in enhancing effective CRM has been critical. Since social media is one of the most dynamic marketing channels, up-to-date study is needed in order to establish how it can create viable CRM platform. Considering the intensity of competition in the Airlines industry, this study seeks to explore how social media strategy in the British Airways has been able to remain the leading airline company in the UK airlines industry. The theoretical contribution of this study is to promote deep understanding of the role of social media in CRM capabilities. On the other hand, the practical contribution of this study is to provide a practical guidance on the evolving role of social media in transforming CRM systems in the airlines industry in the most effective manner.
1.3 Research Aim and Objectives
The aim of this study is to establish the role of social media in facilitating viable CRM in the contemporary airlines industry. With the increasing popularity of social media across the consumers, this study seeks to explore how the social media can transform CRM systems in the airlines industry with critical focus on the British Airways. In this regard, the following are the research objectives for the study:
a) To identify the moderating role of social media in the creation of viable CRM in the airlines industry
b) To establish the basis why the social media can be considered as an effective platform for effective CRM in service-oriented businesses like the airlines industry
c) Ro explore the processes that have contributed towards effective CRM in the airlines industry
1.4 Tentative Research Questions
The overarching research question for this study is “what is the evolving role of social media in CRM in the airlines industry?” In the light of this research question, the following sub-questions have been adopted to guide the researcher in this study:
a) What is the role of social media in creating viable CRM in the airlines industry?
b) Why is the social media an effective platform for ensuring successful CRM in service-oriented businesses such as Airlines
c) What are the processes that have contributed to effective CRM in the airlines industry?
2. Literature Review
2.1 The Concept of Customer Relationship Management
Customer relationship management CRM) is defined by Greenberg (2010) as the philosophy and business strategy which is leveraged on technology which is designed to engage customers in collaborative manner. The key aim of CRM is to build customer-focused culture by maintaining close contacts with the customers in order to enhance long-standing relationships. One of the fundamental domains of CRM is the delivery of outstanding customer experiences which is done through focusing on customers’ social values and specific needs (Chen and Popovich 2003; Mitussis et al 2006). With regard to Greenberg (2004) ideas, establishing meaningful customer interactions through CRM platform is one of the key contributors of outstanding customer experiences. As a result, customers are able to derive value from the interaction which further fosters their relationship with organisation.
Another key domain of CRM is active customer engagement which contributes towards better understanding of the customer needs (Greenberg 2010). By actively engaging customers, it becomes easier for marketers to collect the customers’ feedback which in return enhances better understanding of their needs (Harker & Egan 2006; Labus & Stone 2010). In this regard, there is need for CRM systems to be interactive in nature so that customers can be able to be engaged through active interactions. This is a clear implication that, active engagement of customers through interactive CRM platform is not only effective in maintaining good relationships with customers, but also a useful business strategy that enhances better understanding of customer needs. It is also important to note that, CRM system should be easily accessible to customers for it to be considered to be effective (Kim et al 2012; King and Burgess 2009). Similar study conducted by also indicated that, effective CRM must be flexible and customisable in order to be able to accommodate the diverse needs of the customers from different cultures.
2.2 Social Media
Social media is the interaction between people in which they share and exchange information which they create by their own through social networks and virtual communities (Trainor 2012). It is defined by Mangold & Faulds (2009) as web-based applications which allow users to create, share and exchange information through technology. With the advent of web 2.0, more interactive technologies have been developed which enables virtual users to interact more closely. Based on a study conducted by Dutta et al (2011), social media popularity by the year 2011 was about 57% across the world. This is an implication that, social media is currently becoming one of the most accepted social technologies. Based on the technology acceptance model (TAM) established by Venkatesh (2003), individual reactions to the use of technology and their intention to use it can be used to predict their use of such technology.
The increasing popularity of social media can be attributed to its increasing acceptance across the society, making it one of the most popular social technologies in the world. The increasing popularity of social media can be attributed to its ability to meet the users’ needs in the most convenient manner (Constantinides 2004). Based on a study conducted by Bhagat et al (2009), the integration of social media with mobile phones which people carry all the time wherever they are can be attributed to its increasing popularity across the social sphere. It is therefore clearly evident that social media will grow to be one of the most accepted and easily accessed social technologies across the world; transforming the way individuals, groups and communities interact. As such, social media can be considered as the most suitable platform through people across the society can rely on to communicate and engage each other with regard to the task-fit model developed by Goodhue and Thompson (1995).
2.3 The Evolving Role of Social Media in CRM in the Airlines Industry
The airlines industry is one of the most dynamic in the service sector as a result of the dynamic nature of technology and its customer segments (Baird & Parasnis 2011). The intensity of competition in the airline industry makes it quite important for the players in the industry to establish more innovative customer relationship strategies which will enable them to remain competitive in the market (Bhagat et al 2009). Following the intense rivalry in the markets, firms in the airlines industry have been working aggressively to ensure that they retain their customers while attracting others. Given the popularity of social media as one of the rapidly growing social media technologies, it has been easy for firms to engage their customers through online experiences which expand their real-time value. This is a clear implication that, social media has been playing pivotal role in the airlines industry by providing an effective platform through which customers can be actively engaged (IBM 2012); which further enables the firms to gather feedback from their customers which contributes to better understanding of their customer needs.
It is also important to note that social media platforms facilitate the delivery of outstanding customer experiences (Kim et al 2012). Considering the ease-of-use and flexibility of social media, it has developed to be one of the most popular social technologies across the society. In this regard, using social media platform in CRM systems is considered by King and Burgess (2009) as the most effective strategy in maintaining outstanding customer relationships. Currently, people are now more inclined towards social media in order to communicate with their friends, families and also companies (Labus & Stone 2010). This implies that, firms which adopt social media strategy and engages their customers through meaningful online experiences are more likely to build their brands more strategically. According to Mangold & Faulds (2009), social media is considered to be one of the most effective social branding strategies as a result of e-word of mouth. Given the virality of social media today, it has been easier for firms to build their brands through social media.
2.4 Conceptual Model
Based on the theoretical framework underpinning social media and CRM established it has clearly been established that social media plays pivotal role in enhancing effective CRM. Since CRM domains include customer value, engagement, and ease of use and accessibility; while social media is among the most acceptable and popular social technologies which deliver value through online interactions; it is clearly evident that social media platform is critical for successful CRM in the airlines industry which results into customer loyalty (as shown in figure 2.4 below).
Figure 2.4 – Conceptual Framework for this Study
Source: Compiled by the Author
3. Research Design and Methodology
3.1 Type of Investigation
There are three main types of research investigation which include exploratory, descriptive and hypothesis testing/explanatory researches. Explanatory research seeks to establish the relationship between variables through hypothesis testing procedure where explanations of ‘what’ variables are related is established; but rather fails to explain the causal relationship between the variables (Saunders et al 2009). On the other hand, descriptive research focuses on obtaining of both quantitative and qualitative data where a detailed map on how a research problem is solved (Lancaster 2005). As a result, descriptive research is mo suitable where there is need to test and verify a theory. Further, exploratory research seeks to provide new insights and identify the development of trends on a particular phenomena where explanation of ‘what’, ‘how’ and ‘why’ social trends are interrelated (Saunders et al 2009; Krauss 2005).
With the aim of this study being to explore the evolving role of social media in CRM in the airlines industry, the researcher intends to adopt exploratory research. Through exploratory research, it is expected that more insights on how the social media is impacting on CRM in the airlines industry. Given the dynamic nature of social media technology today (Saunders et al 2009), up-to-date data is required to explain ‘how’ and ‘why’ social media is a key platform for the contemporary CRM. In this regard, exploratory research seems to be the most suitable based on the nature of the research problem.
3.2 Data Collection Method
This will be an exploratory study where only qualitative data will be collected for the purpose of providing answers for the research questions. Triangulation will be used in this study where focus groups and netnography will be used in the collection of data. The target population for the focus groups is the students of the university where the researcher will select about twenty students on random basis. Focus groups will be conducted with five members in each group with the main discussion in the focus group being on how the participants have been interacting with the airline service providers through the social media. Focus groups are considered to be quite useful in this study since they expose the researcher to a wider view of responses from the participants within the same research settings (Merriam 2009).
On the other hand, netnography will be conducted through the use of Facebook and Twitter pages of the British Airways. The researcher will be passive participant where the trends in communications and responses between the company and the customers/users will be traced and the key observations made. Netnography is considered by Kozinets (2010) as quite useful in cases where time and financial constraints are limitations; and hence using it helps to save money and time. By adopting both netnography and focus groups in collecting the data, the researcher believes that comprehensive data will be collected which will increase the reliability of the research findings.
3.3 Sampling Method
In collecting primary data in this study, the research participants will be the students in the university where focus groups will be conducted. In selecting the participants, the research will use probability sampling. The researcher will select twenty participants from his class on random basis where both males and females will be involved. There will be no specific criteria for selecting the participants, and hence all the members of the class will have equal chances of being selected to participate. By adopting random sampling procedure in selecting the participants, the researcher will have reduced the biasness in the study which may interfere with the reliability of the research findings (Easterby-Smith and Jackson 2012).
3.4 Accessibility Issues
The issue of data accessibility is usually quite important in any social or scientific research (Saunders et al 2009). Since the participants in this study are the students in the university, it will be easy for the researcher to access them. This implies that, no complications are expected while accessing the participants while collecting primary data in this study. On the other hand, data collected through netnography is expected to be easily accessible since both the Facebook and Twitter pages of the British Airways are easily accessible for the public. In general, no expected accessibility challenges are expected in this study.
3.5 Ethical Considerations
Research ethics are always quite as they provide moral basis for conducting a scientific or social study (Saunders et al 2009). In conducting this study, high degree of ethical considerations will be considered. First, the participants’ confidentiality will be upheld where no personal details including names or contact details will be collected from the participants. Secondly, informed consent of the participants will be upheld where no children participants will be involved, and the aims and objectives of the research will be publicly declared to the participants. Moreover, the participants will be protected from any harm (psychological, social or physical) during the study.
3.6 Data Analysis Plan
Since this study does not involve the collection of any quantitative data, only qualitative data analysis techniques will be employed. The qualitative data analysis tool to be employed in this study is content analysis method. All the data collected from netnography and focus groups were analysed using this method. Content analysis was considered to be the most suitable for the analysing the data collected in this study which will make it easier for the researcher to corroborate the findings from netnography and those from focus groups.
3.7 Research Limitations
This research is not without any limitations. First, the research participants are mainly students from the university. Having the same social characteristics, it is more likely that the research findings may not reflect the actual situation in the field. Secondly, this study will mainly rely on a single case study. Being a study on the airlines industry, studying a single organisation may not reflect clearly on the actual trends in the use of social media in the entire industry. These limitations are perceived to be having some influence on the quality of information in this study.
4. Timetable – Research Plan
This study is anticipated to be conducted within a period of 15 weeks (as shown in the Gant Chart below). This involves activities like the preparation of proposal and poster on the research topic, review of relevant literature, and preparation of focus group questions, conducting pilot study, focus groups and netnography. Other activities include data analysis and write-up of the dissertation.
Gantt chart – Research timetable
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development of proposal and poster
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Conducting focus groups
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Conducting netnography
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5. Reference List
Avanade White Paper (2008), CRM and Social Media: Maximizing Deeper Customer Relationships, McGraw-Hill Publishers, Washington, DC.
Baird, C. H. & Parasnis, G. (2011), From Social Media to Social CRM – Reinventing the Customer Relationship, IBM Global Services, Somers, NY.
Bhagat, P., Klein, A. and Sharma, V. (2009), “The impact of new media on internet-based group consumer behaviour”, Journal of Academy of Business and Economics, Vol. 9, No. 3, pp. 83- 94.
Chailom, P. and Kaiwinit, S. (2011), “The effects of social network, internet dissemination, internet competitive learning, and information technology capability on e-marketing strategy and success of e-commerce business in Thailand”, Journal of International Business and Economics, Vol. 11, No. 3, pp. 86-102.
Chen, J. and Popovich, K. (2003), “Understanding Customer Relationship Management (CRM): People Processes and Technology”, Business Process Management Journal Vol. 9, No. 5, p. 672–688.
Christodoulides, G. (2009), “Branding in the Post-Internet Era”, Marketing Theory, Vol. 9, No. 1, pp. 141-144.
Constantinides, E. (2004), “Influencing the online consumers’ behavior: The web experience”, Journal of Internet Research, Vol. 14, No. 2, pp. 111-126.
Dutta, S., Dutton, W.H. & Law, G. (2011) “The new internet world: A global perspective on freedom of expression, privacy, trust and security online”, INSEAD Working Papers Collection Issue 89 preceding, pp. 3-34.
Easterby-Smith, T.R. and Jackson, T. (2012), Management Research, 4th ed., Sage Publications, London.
Goodhue, D.L. & Thomson, R.L. (1995), “Task-Technology Fit and Individual Performance”, MIS Quarterly, Vol. 19, No. 2, p. 213 – 236.
Greenberg, P. (2004), CRM at the speed of light: Essential Customer Strategies for the 21st century, 3rd ed, McGraw, Hill New Jersey.
Greenberg, P. (2010), “The impact of CRM 2.0 on customer insight”, Journal of Business & Industrial Marketing, Vol. 25, No. 6, pp. 410-419.
Harker, M & Egan, J. (2006), “The past, present and future of relationship marketing”, Journal of Marketing Management, Vol. 22, No. 1/2, pp. 215-242.
Harris, L. & Rae, A. (2009), “Social Networks: The Future of Marketing for Small Business”, Journal of Business Strategy, Vol. 30, No. 5, pp. 24-31.
IBM (2012), The future of CRM in the airline industry: A new paradigm for customer management, [Online] available from< http://www-05.ibm.com/innovation/fi/pdf/highlights/integration/crm_airline.pdf> [27 April 2012]
Kim, M, Park, J, Dubinsky, A, & Chaiy, S. (2012), “Frequency of CRM implementation activities: a customer-centric view”, Journal of Services Marketing, Vol. 26, No.2, pp. 83-93.
King, F. and Burgess, T. (2009), “Understanding Success and Failure in Customer Relationship Management”, Industrial Marketing Management: Vol. 37, pp. 421-431.
Kozinets, R. (2010), Netnography: Doing Ethnographic Research Online, Sage Publications, London.
Krauss, S.E. (2005), “Research Paradigms and Meaning Making: A Primer”, Qualitative Report, Vol. 10, No. 4, pp. 758-770.
Labus, M, & Stone, M. (2010), “The CRM behaviour theory – Managing corporate customer relationships in service industries”, Journal of Database Marketing & Customer Strategy Management, Vol. 17, No. 3/4, p. 155-173.
Lancaster, G. (2005), Research Methods in Management: A Concise Introduction to Research in Management and Business Consultancy, Elsevier-Butterworth-Heinemann, Oxford.
Mangold, G. & Faulds, D. J. (2009), “Social media: The new hybrid element of the promotion mix”, Business Horizons, Vol. 52, No. 1, pp. 357-365.
Merriam S. (2009), Qualitative research: A guide to design and implementation, Jossey-Bass Publishers, New York.
Mining Media Inc. (2011), “Service Sector: A Competitive Cluster”, Engineering & Mining Journal, Vol. 212, No. 6, p. 121-129.
Mitussis, D., O’Malley, L., & Patterson, M. (2006), “Mapping the re-engagement of CRM with relationship marketing”, European Journal of Marketing, Vol. 40, No. 5/6, pp. 572-589.
Neil, H. (2012), “Building a brand socially”, Journal of Brand Strategy, Vol.1, No. 1, pp. 25-30.
Rothwell, S. (2011), Easy Jet extends lead over British Airways in market for short-haul travel [Online], Available at: http://www.bloomberg.com/news/2011-01-07/easyjet-widens-its-lead-over-british-airways-in-european-markets.html [Accessed Nov 26, 2013].
Saunders, M., Lewis, P., & Thornhill, A. (2009), Research methods for business students, 5th Edn., Pearson Education Limited, Essex-England.
Trainor, K.J. (2012), “Relating Social Media Technologies to Performance: A Capabilities-Based Perspective”, Journal of Personal Selling & Sales Management, Vol. 32, No. 3, p. 317-331.
Vargo, S. L. and Lusch, R. F. (2004), “Evolving to a new dominant logic for marketing”, Journal of Marketing, Vol. 68, No. 1, pp. 1-17.
Venkatesh, V., Morris, M.G., Davis, G.B. & Davis, F.D. (2003), “User Acceptance of Information Technology: Towards a Unified View”, MIS Quarterly, Vol. 27, No. 3, p. 425-478.