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2002:016 SHU

MASTER¡¯S THESIS

Customer Relationship

Management

Case studies of five Swedish Companies

JOHAN JOHANSSON

FREDRIK STR?M

Social Science and Business Administration Programmes

INTERNATIONAL BUSINESS AND ECONOMICS PROGRAMME

Department of Business Administration and Social Sciences

Division of Industrial Marketing

Supervisor: Manucher Farhang

2002:016 SHU ? ISSN: 1404 ¨C 5508 ? ISRN: LTU - SHU - EX - - 02/16 - - SE

Preface

This thesis is written as our Master¡¯s Thesis in the Msc. Programme in International

Business and Economics at the Division of Industrial Marketing at Lule? University of

Technology. The hard work during ten weeks of the fall term in 2001 has been very

interesting and has provided us to gain a better understanding of how Customer

Relationship Management is used in Swedish companies and increased skills regarding

academic and scientific writing.

We would like to show our sincere gratitude and appreciation to the people that have

helped us during the process of writing, making this thesis possible. First of all, we

would like to thank our supervisor Professor Manucher Farhang for his support and

committed guidance. Furthermore, we want to thank Tim Foster who provided us with

support and advice during the initial phase of the writing and Christina Sales Baptista

who earlier introduced and guided us in the area of relationship marketing. We would

also like to thank all companies that have taken the time to participate in our research.

Without them, this thesis would not have been possible to complete.

Finally, we would like to give our deepest thanks to our close ones, families and friends,

who have stood us by during these ten weeks. Johan would like to thank Anna-Maria

Killmey and Fredrik would like to thank his dearest ?sa Martinsson. Their support and

encouragement gave us the strength to successfully bring this thesis to an end.

Lule? University of Technology, 2002-01-10

Johan Johansson

Fredrik Str?m

Abstract

This thesis aims to study how Customer Relationship Management (CRM) is used in

companies. By exploring, describing and somewhat explaining companies objectives of

CRM and their CRM processes as well as how the organization is affected by CRM,

achieves the overall purpose of the study. Five case studies were performed within the

construction, financial, and manufacturing industries and all studied companies

originated from Sweden.

Three major finding was made. Firstly, Swedish companies have well developed

objectives with CRM that exist within the three classification areas, cost saving, revenue

enhancement and strategic impact. Secondly, Swedish companies have accepted and

implemented CRM processes that is a condition for the transition into a customer

centric company. Thirdly, the organizational structure in Swedish companies has not

been affected by the use of CRM due to that Swedish companies have not adapted to the

CRM business framework. Today, Swedish companies mostly use CRM as a sales and

marketing support system.

Sammanfattning

Syftet med denna uppsats ?r att studera hur Customer Relationship Management (CRM)

anv?nds i f?retag. Syftet ?r uppn?tt genom att utforska, beskriva och f?rklara f?retags

CRM m?ls?ttningar och deras CRM processer samt hur organisationen har p?verkats av

CRM. Fem fallstudier i svenska f?retag genomf?rdes inom tre industrier: bygg &

anl?ggnings, finansiella, och tillverkningsindustrin.

Tre intressanta resultat gjordes, f?r det f?rsta, svenska f?retag har v?l utvecklade CRM

m?ls?ttningarna f?rdelade i tre omr?den, kostnadsbesparingar, int?kts ?kande och

strategisk betydelse. F?r det andra svenska f?retag har anammat och inf?rt CRM

processer, vilka ?r en f?ruts?ttning f?r omvandlingen till ett f?retag med kunden i

centrum. F?r det tredje har organisationsstrukturen i svenska f?retag inte p?verkats av

anv?ndandet av CRM, d? svenska f?retag ej har anammat CRM som aff?rsmodell. Idag

anv?nder svenska f?retag CRM mest som ett f?rs?ljnings och marknadsf?ringssystem.

Table of Contents

1. Introduction.......................................................................................................................1

1.1 The Evolution of Marketing.................................................................................... 1

1.2 Customer Relationship Management...................................................................... 2

1.3 Problem Discussion ................................................................................................ 4

1.4 Research Purpose .................................................................................................... 6

1.5 Demarcations .......................................................................................................... 6

1.6 Disposition of the Study ......................................................................................... 7

2. Literature Review .............................................................................................................8

2.1 The Objectives with CRM ...................................................................................... 8

2.1.1 Objectives by Burnett....................................................................................... 8

2.1.2 Objectives by Newell........................................................................................ 8

2.1.3 Objectives by Swift........................................................................................... 9

2.1.4 Objectives by Galbreath & Rogers .................................................................. 9

2.1.5 Objectives by Kalakota & Robinson .............................................................. 10

2.2 The CRM Process ................................................................................................. 10

2.2.1 Integration of Business Functions in the Marketing Strategy ....................... 10

2.2.3 The CRM Process Cycle ................................................................................ 13

2.3 CRM¡¯s affect on the organizational structure....................................................... 14

2.3.1 Organization Design Variables ..................................................................... 14

2.3.2 Organizational Change.................................................................................. 17

2.3.3 Structure of the CRM Marketing Organization ............................................. 18

3. Theoretical Frame of Reference ....................................................................................20

3.1 Conceptualisation.................................................................................................. 20

3.1.1 Objectives with CRM ..................................................................................... 20

3.1.2 The CRM Process .......................................................................................... 21

3.1.3 The Structure of the CRM Organization........................................................ 23

3.2 Emerged Frame of Reference ............................................................................... 24

4. Methodology ....................................................................................................................26

4.1 Research Purpose .................................................................................................. 27

4.2 Research Approach ............................................................................................... 27

4.3 Research Strategy.................................................................................................. 28

4.4 Data Collection Method........................................................................................ 29

4.5 Sample Selection................................................................................................... 31

4.6 Analysis of Data.................................................................................................... 31

4.7 General Analytical Strategy.................................................................................. 32

4.8 Quality Standards: Reliability and Validity.......................................................... 34

5. Empirical Data ................................................................................................................36

5.1 Skanska AB........................................................................................................... 36

5.1.1 The Objectives with CRM in Skanska ............................................................ 37

5.1.2 The CRM Process in Skanska ........................................................................ 39

5.1.3 CRM?s Affect on the Organizational Structure in Skanska ........................... 40

5.2 Svenska Kullager Fabriken AB ............................................................................ 41

5.2.1 The Objectives with CRM in SKF .................................................................. 42

5.2.2 The CRM Process in SKF .............................................................................. 43

5.2.3 CRM?s Affect on the Organizational Structure in SKF ................................. 44

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