Chapter 2: Literature Review

Chapter 2: Literature review
2.1 Introduction:
In this chapter the research was upon the critical review of the literature based on the
importance of customer relationship management to increase customer loyalty in the UK fast
food sector. In addition to support the literature review the researcher will focus upon the
conceptual framework of CRM and customer loyalty, customer satisfaction, the benefits of
customer relationship management in fast food industry, customer loyalty programs, bridging
the gap between the customer and the company and finally measuring the level of customer
satisfaction in UK fast food sector.
2.2Conceptual framework:
The customer relationship management and customer loyalty is considered to be too

important determinants towards the achievement of customer satisfaction and to gain leading
position in the fast food industries. According to the previous researchers it is observed that
customer satisfaction is the outcome of customer's perception of the value received in the
transactional relationship. In this stage the value expected from the transaction are
relationship with the competing organisation is compared with the value equals perceived
service quality of the organisation. It is important to recognise and anticipate customer's
needs and requirements in order to achieve customer satisfaction. According to Barskey and
Nash(2003) The fast food organisations which are rapidly understand the customer's needs
can make greater profits than those which fail to understand and satisfy the needs and
requirements of the customers. It is important for the organisation to develop and manage a
good customer relationship management with all the related parties.
It is also observed by the researchers that the customer relationship management is the
understanding the nature of the exchange between customer and supplier and managing it in
an efficient manner. The exchange includes monetary considerations between the customer
and the suppliers. However it also focuses upon the communication process. The challenge to
also play organisations used to optimise communications between parties to ensure profitable
relationship. In addition to the customer relationship management is also considered as one of
the prime determinants for many fast food organisations in order to retain their existing
customers and to manage the organisation in a cost-effective manner. Moreover it is also
identified by the researchers that CRM is the concept of identifying the customer's needs,
understanding and influence customers purchase process through ongoing communication
strategies and to act, retain and satisfying the customer's. In addition to develop customer
loyalty it is important to focus upon the customers and monitoring their buying behaviour and
attitude towards the products and services of the organisation. As a result it improves the
profitability and the revenue of the organisation. According to Kotler and Keller(2006) it is
observed that customer relationship management enables organisation to provide excellent
real-time customer service through the effective use of individual account information. In this
stage it is essential for the organisation to investigate customer’s needs, build a relationship
with both existing and potential customers which will have to satisfy the customer's needs
(Rootman, 2006).
2.3 Customer relationship management:
According to Lemon and Zeithaml (2001) the customer relationship management be

defined as the process of identification, establishing, maintaining and if necessary terminating
their relationship with the business related parties such as the customers and their
stakeholders at a profit. In this stage it is possible to satisfy the requirements of all the related
parties. Moreover it is also stated by Kumar (2004) that the customer relationship
management can be defined as the customer focused business model that entails one-to-one
marketing, relationship marketing, real time marketing, customer intimacy and a variety of
other terms. The efficient application of customer relationship management enables the
organisation to establish relationship with the customers on an individual basis and use the
information gathered to treat the customer's in differentiated manner in accordance with their
needs and necessities. According to Swift(2001) there are some significant benefits of
customer relationship management. The researcher also stated that the benefits of customer
relationship management can be found in the following areas:
Develop customer range in a cost-effective way: The Company can operate in a cost-
efficient manner while recruiting customers since the saving to be made on mailing, contract,
follow-up and marketing.
Retaining existing customers: There is no need to recruit many customers to preserve a steady
volume of business as the number of long-term customers will enhance to increase and
consequently the need of recruiting many customers will decrease.
Reduction in cost of service: In this stage the cost regarding selling a reduced owing to the
existing customers are usually more responsive. Moreover with better knowledge of channels
and distributor the relations become more effective, as well as the cost of marketing
campaigns is reduced.
Customer profitability: The customer profitability will get higher since the customer wallet
share increases, there are increases in our selling, cross selling and former Sts and more
diverse comes with higher customer satisfaction among customers.
Customer loyalty and retention: The customer retention increases since customers are
associated with the company and stay longer, by more and buy more frequently. The
customers also more often takes initiatives, which increases the bonding relationship, and as a
result of the customer loyalty increases as well.
2.4 Customer loyalty programs:
At present in competitive business environment the customers has myriad choices and few
switching costs more, loyalty could from the organisation point of view decrease cost and
increase revenue. According to Oliver(1999) customer loyalty can be defined as a deeply
held commitment to re buy or patronise a profound products or services consistently steadily
in the future thereby causing repeated the same brand on same brand set parties, despite
situational influences and marketing efforts having the potential to cause switching
behaviour. In this stage it is observed that the customer loyalty and customer retention are
related with each other that leads towards the customer loyalty. It brand is a promise and
meeting that expectation creates satisfaction. According to Curasi and Klennedy (2002) the
loyal customers are of five types. It includes the Prisoner, the detached lowliest, the
Protestant loyalist, the satisfied lowliest and finally the Apostles. In this stage it is observed
that an ideal customer is the Apostle full acts as a brand ambassador on behalf of of the
products and services and go out of his way to convert other customers. Customer loyalty is
enhanced through increasing customer satisfaction and by improving brand equity, live the
and trust, which affects customers purchase process based on the customer relationship
management performance (Wang et al, 2004). In addition to Ball et al.,(2006) stated that
customisation of delivery or the functional equity of products and services as well as the
service personalisation also increases the customer loyalty.
2.5 Customer satisfaction:
Customer satisfaction is considered to be the essential determining in the modern business

world. It is not possible for the organisation to achieve overall objective without satisfying
their customers. Customer relationship management and customer loyalty enhances the
customer satisfaction level of the organisation. According to Jones and Sasser (2011) it is
observed that most of the organisations are ensuring with diligence and strategic marketing in
order to achieve the organisational goals. The experience of the product and services gain by
customers through the explosive response can be identified as the measurement of customer
satisfaction. It is also observed by the researchers that the emotional activities of customer
which is a significant impact upon the buying behaviour in relation with the product and
services can be defined as the customer service. It results in the perception and beliefs of the
customers towards the quality of the required product and services. Therefore the quality of
product and services along with the efficient use of customer relationship management are
considered to be the key determinant in order to influence the level of customer satisfaction
in the organisation that give rise to customer loyalty.

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Chapter 2: Literature Review

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Chapter 2: Literature review

The customer relationship management and customer loyalty is considered to be too

2.3 Customer relationship management:

According to Lemon and Zeithaml (2001) the customer relationship management be

2.4 Customer loyalty programs:

Customer satisfaction is considered to be the essential determining in the modern business

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