Customer relationship management in the international context –

theoretical and practical considerations

Ioan Alexandru RÎPA
Bucharest University of Economic Studies, Bucharest, Romania
[email protected]

Abstract. The customer relationship strategy as part of the general business strategy is focused on the
interest for the clients, having as a main objective the strengthening of the long-term relationship between
the companies and the clients. The essence of the Customer Relationship Management (CRM) dwells in
preserving long-term partnerships, bringing added value within the business relation and delivering
customised propositions to individual clients. By providing personalised products or services the company
gets near the need of the client, thus making it a key customer. The bridge between the company and the key
client is based on a cross-functional process through which the customer relationship management strategy
is implemented. Therefore, the customer orientation becomes an impactful factor in the implementation
process. Having a positive relationship with key customers and a better understanding of their needs and
activity leads to clarity in the development of the customer relationship management strategy. This principle
is worldwide accepted, regardless of industry in which operates the organization. The purpose of this paper
is to do a key literature review on customer relationship management by enlightening both the theoretical
aspects researched by academicians all over the world and empirical studies applied in international
organizations. In addition, the applicative section of this paper consists in a comparison of customer
relationship management dimensions’ level of implementation in two multinational companies (MNC) from
different industries within fast moving consumer goods (FMCG) sector.

Keywords: Customer Relationship Management, multinational companies, CRM dimensions, long-term

relationship, key customers.

Introduction
International organizations activate in an increasingly dynamic context, therefore their ability to
survive and perform is strongly related to their innovation capability. Technology plays an
important role in the process of innovation. Customers across the world have access to boundless
information in a digital environment where boarders are no longer an impediment. Their
requirements from the goods and services sellers have increased together with access to
information, therefore the customer relationship management is crucial in a digital era. (Guerola-
Navarro et al., 2021).
In order for the CRM to be successful and contribute to organizational performance, the
CRM strategy and vision should be addressed starting from top management and needs to be
transmitted further to the employees. In this situation, employees experience within the
organization influences the successful deployment of CRM strategy (AlQershi et al., 2020). In
order to have a successful presence and take into consideration the specificity of each market,
organizations need to develop and implement new ideas, while adapting to external environment
(Ghafari et al., 2011). Henceforth, from a commercial perspective, customers give the trend in a
fast-developing and global market context and the management of the relationships with the
customers are crucial for the company to achieve its objectives. Meanwhile, creativity and
innovation at organizational level facilitate competitive advantage gain in order to outperform the
rivals.

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Literature review
Historical background
CRM theories have emerged from the concept of relationship marketing, which is internationally
recognized and has roots back in 1983. Relationship marketing promotes the idea that companies
should focus their strategy on developing long-term relationships with their customers, rather than
successfully implement transactions and activities with short-term gains (Berry, 1995; Anghel et PICBE |
al., 2005). 1061
This theory was further developed, and it became clearer that marketing research had a
worldwide gap in studying the relationship between sellers and buyers during longer periods of
time. Instead, marketing research targeted exchange operations between sellers and buyers as
singular events or transactions. Besides those singular transactions, other type of seller-buyer
operations came into international academic perspective: the ones that involve the development of
a relationship between the sellers and the buyers with focalization on a business model built up
through five phases: awareness, exploration, expansion, commitment and dissolution (Dwyer et
al., 1987).
In addition to this five phases, Morgan and Hunt (1994) introduced a new component:
cooperation. They argue that economic cooperation is needed in order to build a relationship
between sellers and buyers. Therefore, a successful relationship marketing is based on a
commitment-trust theory where all the business players must embrace commitment and trust.
Next step in the evolution of relationship marketing theory entails that costs for maintaining
an existing customer are lower than the costs of acquiring a new one (Reichheld & Sasser, 1990).
Direct relation between consumers and certain goods into a defined market needed to be tested in
order to support the relationship marketing theory (Sheth & Parvatiyar, 1995). Both internal and
external marketing need to be taken into consideration in the evolution of marketing relationship.
From a certain stage marketing campaigns were not able to meet consumers’ expectations or the
executives’ interests, especially into an international business environment where cultural
discrepancies occur. Therefore, relationship marketing has the aim to make the transition from a
seller-buyer singular transaction with focus on acquiring new customers to a business strategy that
embraces the idea of keeping and developing the existing ones through an efficient management
of an already existing relation (Christopher et al., 1991). Relationship marketing involves a
customer orientation at organizational level. Companies that are customer-oriented are using
processes developed at organizational level, instead of establishing departmental ways of working.
Customers’ perception upon the company is taken into consideration and employees’ jobs involve
background experience with the clients (Osarenkhoe & Bennani, 2007). Relationship marketing
concept involves leaving behind a business model defined by individual orientation of each
department and singular transaction. The new model covers a process-oriented business strategy
where customers ask for more than just a product or service. Their needs must be treated during a
longer term and through cross-functional processes at company level (Payne & Frow, 2013).

CRM definition
The definitions of customer relationship management have roots in the relationship market theories
(Badwan et al., 2017). Customer relationship management has a very wide range of definitions,
variety driven also by the fact that CRM is a complex concept that can be applied in any business,
at an international level.
For example, CRM can be defined from an IT perspective, or from a strategic and
managerial perspective (Buttle & Maklan, 2019, p.3). IT perspective is based on software programs

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that even include in their official naming the CRM acronym, leading to a link between CRM and
technology. All the software applications and their updates contributed to developing new ways of
collecting data and interacting with customers. In an international business context, IT tools can be
easily adopted by any player on the globe.
From the strategical and managerial perspective, CRM is seen as the process of managing
the route of the customers: customer acquisition, customer development, profit increase and PICBE |
achieving loyalty. The academic literature on CRM has four theoretical areas (Wahlberg et al., 1062
2009): CRM defined as a business process that has to be integrated at organizational level, CRM
defined as a business strategy in which customer has a centric role, CRM defined as knowledge
about customers and CRM defined as an activity of information management on customers,
through technological tools.
Authors like Payne and Frow (2013, p. 26) consider that “CRM is a cross-functional
strategic approach concerned with creating improved shareholder value through the development
of appropriate relationships with key customers and customer segments.” Kumar and Reinartz
(2012, p.5) define CRM as a “strategic process of selecting customers that a firm can most
profitably serve and shaping interactions between a company and these customers. The ultimate
goal is to optimize the current and future value of customers for the company.” More definitions
of CRM are presented in Table 1.

Table 1. CRM definitions

Definition Source
“customer relationship management is about process efficiency, reducing Fatouretchi, 2019, p.9
operational costs, and improving customer interactions and experience.”
“Customer relationship management is a business approach that integrates Goldenberg, 2015, p.3
people, process, and technology to maximize relationships with all
customers, providing seamless collaboration between all customer-facing
functions.”
“It is a process or methodology used through which one learns more about Shanthi, 2013, p.1
customers’ needs and behaviors in order to develop stronger relationship
with them.”
“Customer Relationship Management is a comprehensive strategy and Sheth et al., 2001, p.6
process of acquiring, retaining and partnering with selective customers to
create superior value for the company and the customer.”
“CRM is the practice of analyzing and using marketing databases and Kumar and Reinartz, 2012, p.4
leveraging communication technologies to determine corporate practices and
methods that maximize the lifetime value of each customer to the firm.”
“Customer Relationship Management is an enterprise approach to Swift, 2001, p.12
understanding and influencing customer behavior through meaningful
communications in order to improve customer acquisition, customer
retention, customer loyalty, and customer profitability.”
Source: Author’s own research contribution.

Although relationship marketing and CRM are strongly connected and exhibit some
similarities, there are certain differences among them. For example, relationship marketing is a
strategic concept, whereas CRM has more tactical implications. Moreover, relationship marketing
concentrates on behavior and emotions, while CRM focuses on management and processes that
involve customers (Sin et al., 2005).

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the customers (Sin et al., 2005). This type of strategy requires strong collaborations between
departments. Payne and Frow (2013) point out the importance of switching from an organizational
culture oriented towards individual functions and departments to one which has a strong cross-
functional approach. According to Sin et al (2005) human resources management is vital for
organizational adaptation towards a customer relationship approach.
PICBE |
Knowledge management 1064
Customer segmentation and profiling is a process based on knowledge management. Similar,
identification of valuable customers can be a tough task. Knowledge management plays an
important role into a customer-oriented company (Garrido-Moreno and Padilla-Meléndez, 2011)
and can be related to an innovative activity, both in large, but also small companies (Nicolescu &
Nicolescu, 2012). The organization has to generate, transfer and act upon the owned knowledge
(Sin et al, 2005). The management of this knowledge requires capabilities such as acquisition,
transformation, application and protection (Tseng, 2016). As a CRM component, knowledge is
referring to the customers and has a final purpose of generating satisfaction for them (Srivastava et
al., 2019).

CRM technology
Originally, CRM and IT customer solutions were regarded as the same (Ernst et al, 2010). Even
though the two concepts were separated, technology plays an important role in management of
databases within organizations. Accuracy in segmentation of actual customers and potential ones
is imperative in order to achieve success (Abbott, 2001). CRM technology is based on IT solutions
whose role is to enhance the interaction between organizations and customers, as a facilitator of
acquiring and processing customer information (Ernst et al, 2010). Employees from sales
department can benefit from IT tools and maximize their performance. Integration of information
technology into daily activities improves work efficiency through sales automation (Ahearne et al,
2007).

CRM plays an important role in the international context, at company level (for multinational
companies for example, and not only) as well as at country level, as the image of a country is also
based on the activities of its companies home and abroad (Nicolescu, 2008).

Methodology
The methodology used is descriptive analysis applied to two case studies. The two case studies
have been conducted in two multinational companies (MNC) operating in the fast-moving
consumer goods (FMCG) sector.
Both of the companies originate in Western Europe. For one company operates in the
cosmetics industry and has subsidiaries in more than 160 countries and it will be called company
A (for confidentiality reasons). The other company operates in the food industry, having
subsidiaries in more than 180 countries. Both companies have a history of more than 100 years.
The data was collected based on documentation (such as analysis of types of research studies
organized by each MNC), observation (based on research internships in the companies) and
interviews (one interview at the level of each company with a marketing department
representative).

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 After a short descriptive presentation of the CRM at company level based on the CRM
dimensions framework conceptualized by Sin et al. (2004), a comparative analysis between the two
companies is conducted.

Results and discussions

CRM in a cosmetic multinational company - Company A case study PICBE |
The CRM dimensions presented in the next part are key customer focus, CRM organization, 1065
knowledge management and technology-based CRM (Sin et al., 2005).
The first dimension, the key customer focus dimension is present up to a certain extent in
Company A. The organization makes an effort to identify the needs of its key customers, especially
by investing in market research activities and brand studies at an international level, conducted by
a third-party international research agency. The types of activities that take place in company A
and suggest a customer focus orientation are:
a. Brand health tracking studies that are conducted once at four or more years: this type of
studies are done by company A in order to measure usage habits of cosmetic products, awareness,
likeability and usage of brands within the cosmetic industry and purchase funnel for own brands
and also for competitor brands. The brand funnel is consolidated through the following levels:
awareness, consideration, purchase, repurchase and loyalty. Also, the brand funnel illustrates what
is the percentage of people that are moving from a level to another. The study results in a
segmentation of consumers based on their needs and preferences offering insights also of consumer
trends and evolution. For example, in 2013 the company conducted a study which revealed an
increase in the percentage of men that are starting to care more about their look and are willing to
buy dedicated products for their skin. Another example of insightful result is that urban
environment with increased pollution is generating skin stress. The international research agency
is managing the studies for each country in Europe, based on specific market information provided
by the marketing department within each country.
b. Pre-launch studies that are conducted each time before the company launches a new
product. Feedback and recommendations from consumers are taken into consideration when
developing new products. Before deployment to international level, products are tested and only
after achieving a certain score they are launched across the world. Feedback on new products can
lead to changes regarding the product, such as smell or texture, but can also lead to changes of
packaging. The international research agency is conducting pre-launch studies in countries from
Western Europe where cosmetic products market is highly developed.
The second CRM dimension analyzed is the CRM organization. This dimension refers to
the way an organization is structured so that it reflects the fact that customers are a priority.
Company A does not show evidence of the following aspects of CRM organization:
a. Sales and marketing expertise: employees from company A are missing expertise in
CRM.
b. Training programs: training programs dedicated to CRM knowledge are missing within
the marketing department. Also, the company does not provide any CRM dedicated training for
the employees.
c. Business goals related to customers: CRM organization dimensions involves the
following process of customer business goals: acquisition, development, retention and reactivation.
Company A has no strategy and goals for the above-mentioned process. The only component from
the above process that is present is reactivation. Each country where company A is present develops
its own actions to reactivate the existing customers through three or four activities per year with

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dedicated messages through email marketing. The content of the newsletters is mainly educational,
representing information regarding products that the customers already used.
d. Employee performance is measured based on meeting customer needs: in company A
employees’ performance rating does not take into consideration the customer needs. Employee
performance is measured based on individual targets and group targets. Individual targets in
company A are market share level and net sales level. Group target is profitability of the company. PICBE |
However, company A proved evidence of one aspect of CRM organization: the 1066
organizational structure of the marketing department is based on the type of customers. For
example, a segmentation of customers that reflects the organizational structure is based on genre.
Also, a more granular segmentation is represented by the body part that the products address.
The third CRM dimension is knowledge management. This dimension refers to knowledge
creation, knowledge transfer or sharing and knowledge application and responsiveness. The type
of activities that are present in company A and suggest a good management of knowledge about
customers are:
a. Willingness to help customers in a responsive manner and existence of two-way
communication channels: company A is working with a third-party agency for offering solutions
in terms of complaints from customers or responses to product related questions or marketing
campaigns related questions.
b. Promptitude: Company A offers customers a digitally solution within the presence of a
chatbot on its website, thus being able to provide answers in real time based on an already
predefined list of topics.
The fourth CRM dimension analyzed is technology-based CRM. This dimension is
referring to the capability of the organization to collect data, store them and then analyze in order
to generate meaningful insights regarding the organization’s customers. In regard to technology-
based dimension, Company A presents only one characteristic: hardware for CRM. Company A
owns the latest technology assets capable of meeting the technological requirements from latest
software programs. Company A is offering its employees new computers at every three years. On
the other hand, company A does not meet several requirements for technology-based CRM
dimension to be considered present. For example, company A doesn’t have CRM dedicated
software, therefore no technical personnel to provide the necessary support is available. Another
important aspect of technology-based CRM is the existence of a comprehensive database of the
customers. Given the fact that no dedicated software is in place, an extensive database is not
available.
Company A has CRM on the agenda as a strategic pillar for the business development.
Although it is not prepared from a technological point of view, the company is aware that it can do
more in terms of investing in CRM technology, as suggested by one marketing team member:
“CRM is a topic on the medium-term agenda because loyal consumers represent the base of the
business. We do as much as we can with the resources that are available at the moment because we
understand that they are an important pillar for our business and we are very much aware of the
fact that we have a lot to improve especially from a technical point of view”.

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CRM dimensions in a food multinational company – company B case study
For company B, the CRM dimensions can be characterized as follows.
Key customer focus dimension is present at Company B level through repetitive market
research studies. These studies are conducted by a third-party international research agency in
collaboration with Company B’s own research department. Activities that suggest that company B
has a customer orientation are: PICBE |
a. Brand health tracker studies: this type of study is conducted in company B once at every 1067
two or three years. Brand health tracking studies are conducted in order to assess the score of the
company B’s brands and also competitor brands on the brand funnel, using the following funnel
levels: awareness, consideration, trial, repurchase, loyalty. Brand studies conducted by company B
offer information also on usage habits for food products, buying behavior, usage of brands within
food category and brand image perceived by customers. An example of insight from a study
conducted in 2019 is that the percentage of people willing to move from consideration phase to
actual trial is higher for brands with big awareness and brands that are perceived as a safe choice.
b. Pre-launch studies conducted every time before launching a new product. For company
B feedback from customers is fundamental for developing new products. Company B makes an
effort in order to identify consumer needs and to fulfill them. In this matter company B is
performing studies on consumer feedback for new products before they are launched and applies
recommendations in final modifications on products. Feedback received can lead to changes in
shape, packaging, smell and even taste or recipe. For example, in the last years natural ingredients
are among the most important factor into purchase decision making. This type of studies are
conducted in collaboration with international third-party research agencies in most developed
countries: UK, Germany, France. The portfolio segmentation is specific and reflects customer
segmentation and customer needs. Consumer studies are done at an international level in
economically developed countries with high purchasing power.
The second dimension analyzed is CRM organization. In company B were not identified
any characteristics specific to this dimension. For example, sales and marketing employees do not
have CRM expertise, there are no CRM dedicated trainings, business goals are not related to
customer acquisition, development, retention and reactivation, employee performance does not
take into consideration the level of customer needs that were met and organizational structure is
not designed around customers. Although CRM trainings are not available and CRM expertise is
not met among employees, company B allocates high attention to personal development of its
employees. For example, employees are helped by their managers to identify their weak points and
to improve their skills through trainings such as: time management trainings, prioritization
trainings, public speaking trainings, using company’s software trainings. Also, company B
encourage. Performance and rewards are not measured based on customer needs’ fulfillment. They
are measured through team objective (which are business objectives such as profitability) and
individual objectives. Individual objectives are based on two types of measures: individual
performance measure and individual development measure. Individual performance measure scale
is represented by the achievement of individual business objectives that are numerical and can be
easily quantified: market share, sales growth, digital key performance indicators. Individual
development of employees consists is more subjective and is based on teammates’ feedback on
how the weak points were improved during the year.
The third CRM dimension, knowledge management, is present in company B through the
following characteristics: willingness to help customers in a responsive manner and existence of
two-way communication channels. Company B has its own department responsible for offering

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solutions to customer complaints and to provide information to consumers. Customers can contact
the company through phone, direct request within website or social media. Direct requests within
the website are solutioned during working days and within working program. For emergencies
there is also a permanent contact through phone. Company B engages with already existing
consumers through special promotions, targeting repurchases from potential loyal customers
through discounts for next acquisitions based on amount spent. PICBE |
Technology-based CRM is the fourth dimension analyzed. Company B meets only one 1068
aspect of this dimension: presence of the right hardware to implement CRM programs. Employees
work on computers which are replaced once at every three years in order to keep pace with
technological advancements. Other aspects of technology-based CRM are missing from company
B. Dedicated CRM software is not used, therefore a comprehensive database of the customers is
not in place.
For company B CRM is not on the priority list and even though the current business
environment is very digitalized CRM strategy is not part of the general business strategy.
According to a marketing department from company B, “CRM is not very popular in the company,
probably because there are not many resources and from a historical point of view it was not an
important aspect of our business strategy. As a marketing person, I believe in its’ benefits and I am
aware of the opportunities that CRM can provide, but being into an international company we can
only introduce it on the agenda as a top-down business process or strategy.”

Comparative analysis
The two companies analyzed are very similar in terms of presence of customer relationship
management dimensions, having only a few minor distinctions. Table 2 provides a comparison
between Company A and Company B.

Table 2. Comparative analysis CRM - company A vs. company B

Customer relationship
Company A Company B
management dimension
Key customer focus Market research for brand Market research for brand
perception and consumer needs perception and consumer needs
once at four or more years in once at two to three years in
countries with high purchase power. countries with high purchase power.
Ask consumers for feedback before Ask consumers for feedback before
internationally launching a product. internationally launching a product.
CRM organization No dedicated customer relationship No dedicated customer relationship
management trainings. management trainings.
Organizational structure is not Organizational structure is not
based on customers. based on customers.
Performance and reward system is Performance and reward system is
not based on customers. not based on customers.
Performance is based on Performance is based on
achievement of business targets. achievement of business targets and
personal development.
Knowledge management High degree of responsiveness and High degree of responsiveness and
promptitude in offering support to promptitude in offering support to

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 Customer relationship
Company A Company B
management dimension
consumers via two-way consumers via two-way
communication channels. communication channels.
Engage loyal consumers through Very limited activities done to
digital means. engage with loyal consumers. The
activities are more promotional
PICBE |
Third party involved in managing 1069
oriented.
customer questions and complaints.
Dedicated department involved in
managing customer questions and
complaints
Technology-based CRM Owns right hardware for customer Owns right hardware for customer
relationship management programs. relationship management programs.
Lack of software dedicated to Lack of software dedicated to
customer relationship management. customer relationship management.
Small database with information on No database or defined process for
consumers. customer information acquisition.
Activates digital campaigns with a
customer relationship management
component through existing tools.
Source: Author’s own research contribution.

Both multinational companies analyzed manifest a medium to small implementation level

of CRM. Key customer focus and CRM organization dimensions are very similar in company A
and company B. Both companies invest in research to identify customer needs, trends and
preferences. Still, company B is performing regular and more often consumer studies. This is a
consequence of the activity domain (food) which requires rigorous regulatory affairs. Both
companies lack CRM trainings and do not measure, or reward employees based on meeting
customer needs. In regard to knowledge management dimension company A and company B have
variation. For example, company A uses a third party for consumer complaints whereas company
B has its own department. Also, company A engages more with the customers through digital
means. In terms of technological resources both of them are missing a specialized software in
managing customer relations.

Conclusion
The paper explains the concept of customer relationship management and the evolution process
from relationship marketing to current theory, with emphasize on its basic dimensions. The
comparative analyses conducted concludes that CRM dimensions express a medium to small
degree of existence in two MNC from FMCG sector. The majority of the existing studies on CRM
in international organizations are conducted in services sector, being predominantly in industries
like tourism, financial services or telecommunications. Consequently, a high degree of CRM
implementation is resulted in such industries due to frequent interactions with customers.
Therefore, this analysis is focusing on FMCG sector, which is less studied and in which customers
do not engage so much with the brands or products that they acquire. In both companies that were
analyzed the key customer focus is most present among dimensions as both of them are conducting
studies on customer preferences. Knowledge management and technology-based CRM dimensions

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are very limited in both companies as there are only few CRM activities executed with the resources
in place. On the other hand, CRM organization dimension is totally missing from both companies.
One limitation for this paper is that only two multinational companies were studied. Although the
two organizations are representative for their industries, FMCG is very vast in terms of activity
domains and further analysis in other industries from FMCG sector is required in order to observe
if CRM dimensions have a general low degree of presence in companies activating in this sector. PICBE |
1070
Acknowledgement: This paper was co-financed by Bucharest University of Economic Studies
during the PhD program.

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