In chooses Starbucks among other coffee brands and the

In a fast and competitive world today, the drink that “keeps you awake and one of the common option beverage consume by everyone on a daily basis is coffee. Coffee was introduced in Malaysia in the late 18th century when it was still under the rule of British. As shown in Figure 1, Malaysia coffee consumption has risen to become one of the top 10 country in Southeast Asia 1. Figure 1: Coffee consumption in 2012 in East and Southeast Asia.Due to the trend of coffee culture, the number of coffee cafes in Malaysia is booming 2. One of the partners for Ministry of Coffee café, Michael Tan stated that the Malaysian started to enjoy the lifestyle since the penetration of global chain outlets such as Starbucks, Coffee Bean and Gloria Jean’s. He also stated that one of the very reasons in opening the café is due to the fact of different coffee taste yearn by working class adults and the hipster lifestyle crazed by teenagers. The coffee culture is expected to grow continuously.Therefore, the objective of this paper is to report the effectiveness of customer relationship management in Malaysia Starbucks. Besides that, we will also study what customer relationship management (CRM) system Starbucks in Malaysia uses, why customer chooses Starbucks among other coffee brands and the advantages of CRM system towards Starbucks in Malaysia.In the twentieth century, the 4P’s of marketing which are product, price, promotion and place known as transaction marketing is inadequate if  new or existing organization wished to compete in a technology development environment 3. With the help of continuous improvement and transformation of technology, young organizations are able to enter the market industry to compete with existing organizations which have been operating more than 50 years. Based on the research done by Frederick Reichheld of Brain & Company, getting new customer is twenty-five times more expensive than maintaining existing customers. Therefore, the idea of CRM system was developed in such a way that it is used as a tool to help organization to maintain and manage the interactions to a long-term relationship with its existing and key potential customers 4. The key factor that determines the success or failure of the organization would be understanding and offering customers needs 5. CRM system is a marketing strategy to systematically improve the organization customer relationship by recognizing, improving and keeping the organization most profitable customers by providing information to organize all of the business processes that deal with customers such as sales, marketing and customer service 6. Hence, more and more organization today begin to invest heavily in information system which prioritize customers needs and satisfaction such as CRM  instead of  inventing new products or offering services that does not fulfil the customers needs 7. All and all, the focal point of the development of CRM system is to help organization to: Retain existing customers,Engage new customers,Act as a communication medium between organization and customer, andNotify customers about portfolio of new products or services which might fulfil customers needs. Literature ReviewCustomer Relationship Management (CRM)In general CRM is an information system which is a competitive advantage to help organization to retain existing customer and engage new customers in the future. The focal point of CRM system is to redefine long-term relationship with customers by shifting away from the traditional product-centric marketing to a customer-centric business. In a world full with technology development, more and more organization understood the importance of creating a close relationship with their customers which lead to the success of the organization. Understanding and satisfying customers needs, will allow the organization to produce better products or services which will retain profitable customers continuously 8. Hence, understanding CRM system is mandatory to have a clear view and perspective of the effectiveness and advantages of CRM system to the organization. There are many different definition of CRM by researches. All and all, CRM system is defined as an integrated information system that help the organization to evoke and retain “economically valuable” customers and get rid of “economically invaluable” customers by providing detail and information to coordinate all of the organization business processes that deal with customers such as customer service, marketing and sales 9,10. Based on CRM definition, many organizations invest highly in CRM system to help them enhance customer’s needs and satisfaction which will lead to the success of the organization. CRM system helps organization to serve their customers better on a daily business processes with more dependable information which can help increase customer satisfaction 11. The advantages of CRM system to customers are: Time saving,Multi channel integration,Enhance customer service,Responsive to customer’s needs,Customer segmentation, andImprove customer knowledge. CRM system helps organization to save customers information up to date such as customer personal information and the product or services customer purchased  from the organization. These informations are important because it help the organization to make successful business decisions 12. There are two different types of CRM system known as:Proactive versus reactive CRM, andOperational, collaborative and analytical CRM. Reactive CRM is when organization acknowledge to customers feedback, complaint, suggestion or requests. Furthermore, proactive CRM is when the organization predict and responds to customers need before hand. Proactive CRM are used in organization which expand the level of personalization and practice one to one marketing (Figure 2).Figure 2: Type of CRM mapped as dependent on level of personalization. CRM system is a combination of business processes and technology that are use in an organization to satisfy customers need during any situation 13. Operational CRM assist front desk processes such as the staff in a customer service call center. The combination of operational points helps the human resource system to transfer captured order information for user data and also enterprise resource planning (ERP) systems, for example, a call center representative 14. Analytical CRM helps the organization by providing information of customers behavior and value by using statistical methods. These information are combined with centralized data warehouse which are useful to organization’s sales and profits for management and decision making purposes. The system processes the customers segment and provide the data which will help the organization to produce new products or services which will satisfy the customers needs 13. Collaborative CRM focus on different customers by using multi-channel such as call centres and online shops. Around 60% of organization survey today uses internet portals as their customer communication tool for different activity 13. Therefore, CRM system is a customer-oriented approach which promote customer retention and profitability where the information system provide data to support the organization operational, analytical and collaborative CRM processes. Consequently, the execution of CRM system should be organize carefully to obtain successful decision making  5. CRM in StarbucksStarbucks Corporation was found in Seattle in 1971 by an American Company. Starbucks has more than 200,000 employees across Starbucks licensed and operated stores in sixty-two different countries. As of the first quarter of 2016, Starbucks is one of the largest coffeehouse company in the world with 23,571 Starbucks stores globally (Figure 3). Figure 3: Number of Starbucks store globally as of first quarter of 2016.Starbucks mission is not just making a perfect cup of coffee or tea for their customer but to be able to strengthen and engage a long-term relationship with their customers 15. Therefore, Starbucks is one of the high quality customer experience brand in the coffee industry by selling good quality products and services  at a high-end price. Starbucks invest highly in information system such as CRM system to manage the interactions to a long-term relationship with its existing and potential customers due to the extreme competitive rivalry in the coffee industry.Starbucks current CRM system are Starbucks reward card, third party websites, 2D mobile barcode system and in store feedback form. In the UK, Starbucks introduce Starbucks reward card with the tagline “Keep the Free Drinks Coming”. Customers have to collect 25 stars within one year to be entitle  the Gold Level which they will get special benefits such as two free customize beverage, a free tall beverage on their birthday month and many more 16.Furthermore, Starbucks also introduce Starbucks Mobile Card Payment which is available for Apple and Android devices. With Starbucks mobile card payment, customer no longer need to use cash or credit card to pay for their purchase. Customer are able to scan-and-go with their mobile payment to purchase Starbucks product faster without any difficulties. The benefit of Starbucks mobile card payment is that it is environmental friendly. Since Starbucks mobile card payment is electronic, it reduces the usage of plastic gift cards, encourage a more organized ordering process while providing more rewards and advantages to customers. Since the information system is so easy to use, customer can share their Starbucks drink of choice and location through social media which helps to promote Starbucks 16. By catching up to the development of technology and keeping up with the trend, Starbucks can double or triple their chance of gaining new customers and strengthen their relationship with existing customers. Starbucks have a third party website ( where customer can learn about Starbucks company, check on the latest promotion and beverages and many more. In order to improve the website, Starbucks obtain feedback from internal and third party consultants to pinpoint the usability problem and determine new solutions to redefine the Starbucks website 16. Benjamin Vigier and his team introduced 2D barcode system where Starbucks launched it on 2009 in 16 stores. It was a big hit and Starbucks to expand the system nationwide to let customers pay by scanning a display barcode during their purchase at the counter. Benjamin modify a simple 2D barcode where most organization were using and allow Starbucks staffs to scan customers own 2D barcode rather than customer scan the 2D barcode 16. Therefore,  we can see that Starbucks invest highly on information system to improve customer relationship and to be the top coffee brand in the industry.


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