Customer Relation Management (CRM) is an important part of any organisation. Managers utilise it to improve sales and profitability. Any organisation that targets to be successful in any field must place the customer central to its operations. Such organisations should make customers their most important assets.
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Over the years, many institutions have established the study of customer relations in their curriculum. Managers have also been trained on the most effective ways of employing customer-relation tactics in the course of their operations. Although many industries are coming up at an alarming rate, the fashion and design industry stands out based on the way it has applied CRM to boost its sales through guaranteeing clients quality products.
In the fashion and design industry, the customer is the most important shareholder. Organisations that are able to understand their customers end up being more successful than others that do not have the same policies (Rigby, Reichheld & Schefter 2002; Greenberg 2009).
The customer management principle that is applied in any organisation is important because it determines the strength of any brand that the company intends to market and/or sell. The following is an assessment of one of the companies in the luxury fashion industry. The paper discusses the customer management practices that the company has applied. Besides, it gives the necessary changes that the company needs to implement.
The business selected for assessment is the Christian Louboutin Company brand that operates in Spain. Christian Louboutin Spain is a subsidiary of the main company that is based in Paris. It has stores in many parts of the world. The company specialises in the manufacture of specifically branded shoes. Christian Louboutin is credited with the revival of stilettos that were popular among women in the past decades, thus making them part of luxury fashion design today.
As stated above, Christian Louboutin produces expressly branded and internationally recognised shoes. The red-bottomed shoes act as the trademark for the company.
These shoes are popular on the catwalks and other fashion events. The company designs shoes with very high heels since many of its customers prefer the high heels o other types of shoes. In fact, the company has produced heels with a height of more than 120mm with the aim of making women appear decent and more attractive by giving an impression of long legs (Greenberg 2009).
The category of shoes that Christian Louboutin makes is usually won with the evening dresses. The brand is associated with prominent personalities and models. The company also offers low-heeled shoes, although they are not as common as the high-heeled ones. The shoes are in most occasions fitted with jewel straps to give them the elegant look and feel.
The other accessories include patent leather, red soles, and bows. The company is well known for its signature red-bottomed shoes. This design is patented under the United States laws. The company has also ventured into the manufacture and sale of women handbags. In fact, the owners expect to increase the contribution of handbags for the total company revenue to increase.
Size and Revenue
Christian Louboutin has recorded significant growth in size and revenues since its establishment in 1991 by Christian Louboutin. The growth in sales started in the first year after the start of the business. This period was occasioned by the increased publicity that the original outlet in France got.
In the first year after establishment, Christian Louboutin sold approximately 200 women shoes, which were sought by some of the rich and famous women in the area. The company currently sells over 700,000 pairs of shoes in a year. These shoes are sold to the rich and famous as a policy of luxury. The company is reported to make over $300 million annually as revenue where the shoe section contributes 95% of the revenue.
The growth in revenue from the sale of shoes is significant in the company. It approximates to around 40% annual growth. The prices for individual shoes vary. However, a single pair of shoe can go for as much as $6,000. Most of the shoes in the store have a price tag of over $4,000. Customers can also get a custom-made brand to suit their tastes, although at a higher price.
The company has been considered the leading brand in the fashion industry for a long time. It continues to lead in the luxury fashion shoe design. The company makes sales through the many outlets in the world. However, the bulk of purchases from the outlets are wholesale purchases. More than 80% of purchases from the company are wholesale (Greenberg 2009).
The company has a significantly large market. The fashion industry contributes much to the market. Many fashion events that display luxury designs use Christian Louboutin shoes and handbags, which are mainly rented from the company. Many celebrity women are known to purchase the brand, although most of them come from different parts of the world to purchase the products. The company also has international distribution centres in different parts of the world. Most of the markets for the items are in the United States.
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The United States forms the largest market for Christian Louboutin, with 52% of sales for the company being in this country. The company also has a presence in almost all continents. The European and Russian bazaars in combination with markets from the Middle East countries contribute to over 30% of the company’s revenue.
The Asian market makes up the rest of the proportion of the sales. Some of the personalities that form the market for Christian Louboutin include Angelina Jolie and Nicki Mina. Most of the catwalks in the US and Europe market the products as a way of promoting the company on the local and global front.
The country in which the organisation in focus is located is Spain, which is known for its appetite for luxurious items such as those offered by Christian Louboutin. The company has the store being located in Madrid, Spain. It is renowned for its luxurious items. The country has a favourable macro-environment for any luxury fashion company. It has many centres that are considered the fashion capitals of the world. Companies that work here also enjoy organisational cultures that are favourable in the production of the luxurious items.
Madrid offers a large market for the company. Dozens of celebrities visit the city as well as other areas in Spain, thus ensuring a constant supply of customers, and hence the positive performance from the company in the country and the region compared to other subsidiaries elsewhere.
The country also has an operating environment that allows companies to operate with autonomy. It has also managed to market itself in the fashion industry (Greenberg 2009). Many fashion companies operate within Spain. The companies have utilised the existing policies on different fields.
Customer Management and CRM use
Customer management is one of the most basic functions of any organisation. Christian Louboutin has adopted a number of strategies to that effect. In the operations that the company has in Spain, it ensures that the specific needs of each customer are met. This strategy reveals why the company allows customers to specify the designs that they require.
It is able to offer different prices for items in relation to the customers’ buying ability. According to Peppers, Rogers, and Dorf (1999), an organisation should adopt a one-to-one marketing strategy, which is the change of behaviour in an organisation to suit the needs of the individual customers. This plan allows the organisation to develop goods and services that are customised to the clients’ needs, including the provision of luxurious services.
The concept of one-to-one marketing is heavily employed in Christian Louboutin. The organisation has dedicated its services to the satisfaction of the customers’ needs. The company made adequate preparations to the one-to-one marketing strategy, which in turn led to its success. Peppers, Rogers, and Dorf (1999) confirm that most companies that have adopted the one-to-one marketing strategy have not succeeded because they took it without prior preparations.
The company specialises in the manufacture of products that are described by many professionals as being luxurious and state-of-the-art. However, this outcome is only because the company involves customers in the development and marketing of these products. Some of the customers for the organisation frequently shop at the Spanish outlets because they are renowned for their quality and exceptional designs.
The prices of the company are also custom-made, and that only a few individuals can afford some of the luxurious items on offer. This situation has ensured that some of the categories of products are only available to a particular class of customers, and hence the reason why they are sought by these customers. According to Peppers and Rogers (2011), the price of a product in the fashion industry is important in determining the class of customers that buy these products.
In Spain, the company has managed to apply specific forms of marketing. These forms include the use of the internet and social sites. According to Lent and Tour (2009), the use of these forms of marketing is favourable for any fashion company that targets to attract any class of customers.
Christian Louboutin has traditionally not used print media in the marketing of its products because of the tradition that has been held for a long period. This situation has further contributed to the segmentation of its market, with only a specific group of customers being targeted in the marketing campaigns.
There are many expected changes in the market developments in Spain for luxurious items. These changes are occasioned by the changes on the national economic front and the change in demand for the luxurious goods. There are also expected changes in the rules and regulations that govern the industry in Spain.
After the global economic crisis, the numbers of people participating in the fashion industry were noted to decrease (Greenberg 2009). Customers also reduced in this industry because the Spanish economy was also affected. The effects of the crisis have constantly disappeared with time. The economy is now performing better in Spain and elsewhere in the world. The expectation is that more customers will be able to afford the products that are provided by the company.
Advice for the Company
The company needs to invest in more customer-relations management practices, with the management being involved directly in these strategies. The other possible advice for the company is that it should engage its customers more through the internet marketing since the move is likely to improve its performance.
Seybold (2001) observes that the internet is an important tool in the delivery of information to customers. It provides a cheap means of helping customers carry out a number of activities. Although the company has not established itself on the print media, largely preferring one-to-one marketing, it should also embrace this form of marketing, as it is likely to grow its customer base (Yastrow 2007).
Fournier, Dobscha, and Glen Mick (1998) claim that organisations can create friendly relationships with their customers. However, they assert that the very things that organisations are doing to improve relations with their customers are the ones destroying these relations (Fournier, Dobscha & Glen Mick 1998).
Christian Louboutin may ensure that it gets to learn the customers before it can engage in creating any form of relationship with them. Fournier, Dobscha, and Glen Mick (1998) observe that the organisation can embark on the creation of a healthy relationship that is intimate between it and customers.
In any relationship, input is from both sides. Customers can be allowed to provide input for the product development and marketing at the Christian Louboutin Company in Spain. This move is in line with the suggestions that are provided by Fournier, Dobscha, and Glen Mick (1998) in their article.
The institution can develop and maintain trust between itself and customers. Many of the customers buying from any particular company do so because they consider the company trustworthy in quality, design, and pricing. This case also applies for Christian Louboutin. According to Fournier, Dobscha and Glen Mick (1998), this company needs to provide privacy emotional support and confidentiality to its customers.
Customer behaviour is an important part of marketing in any luxury company, and before development of a product, there should be adequate consultation between the customer and the developers.
According to Fournier, Dobscha, and Mick (1998, p. 4), “For contemporary consumers, product satisfaction is linked inextricably with their satisfaction, and companies must attend to both these dimensions if they expect to win.” Christian Louboutin may participate in assuring customers the satisfaction that they deserve in purchasing their products.
In conclusion, the luxury fashion industry is very competitive. Organisations that want to survive need to ensure that they apply effective customer-relations management. This report has looked at a company operating in the luxury fashion industry in Spain. It has provided a look at the profile of the company and the operating environment in the industry and the country in general.
Christian Louboutin is a fashion company providing the best shoes in the luxury industry, as it is known for producing custom-made shoes for her customers. The company utilises some useful CRM measures. However, it should guarantee customer satisfaction and more use of technology in the production and marketing processes.
Fournier, S, Dobscha, S & Mick, D 1998, ‘preventing the premature death of relationship marketing’, Harvard Business Review, vol. 76 no. 1, pp. 1-6.
Greenberg, P 2009, CRM at the Speed of Light, Social CRM Strategies, Tools, and Techniques for Engaging Your Customers. Fourth Edition, McGraw-Hill, New York, NY.
Lent, R &Tour, G 2009, Selling Luxury. Wiley, New York, NY.
Peppers, D & Rogers, M 2011, Managing Customer Relationships: A Strategic Framework, Wiley, New York, NY.
Peppers, D, Rogers M & Dorf, B 1999, ‘is your company ready for one-to-one marketing?’, Harvard Business Review, vol. 77 no. 1, pp. 151-160.
Rigby, D, Reichheld, F & Schefter, P 2002, ‘Avoid the Four Perils of CRM’, Harvard Business Review, vol. 80 no. 2, pp. 101-109.
Seybold, P 2001, ‘Get inside the Lives of Your Customers’, Harvard Business Review, vol. 86 no. 1, pp. 80-89.
Yastrow, S 2007, We: The Ideal Customer Relationship. Selectbooks, Washington, DC.