CHAPTER 1 INTRODUCTION. In the last few years, Customer Relationships Management (CRM) has become

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1 CHAPTER 1 INTRODUCTION 1.1 Background In the last few years, Customer Relationships Management (CRM) has become widely popular and mainly big companies are investing their money in it. Big software companies such as Microsoft, Oracle, and SAP are the major players in CRM software. However, lack of proper knowledge and readiness in implementing CRM system, could lead the company to financial disaster or even bankruptcy. Several big and well respected companies had experienced big loss when they fail to implement this system. In contrast, CRM is a system that could pinpoint the company to maximize the efforts, time, and value for the right customers on the right time which at the end will lead to customer loyalty. The basic understanding of CRM is to deliver the right value to the right segment of customers so the company could maximize its profit. In Indonesia, SMEs (Small and Medium Enterprises) have been growing at a fast rate and they started to get the attention and recognition from the government. The usage of CRM might help these companies to grow even faster and maximize their profit. However, due to the budget and cost constraints implementation of CRM in SMEs is not their top priority because it will increase the risk of financial failure.

2 This thesis is using a medium-sized company, PT. AC as the object of the case study. The information on the company is stated below. The Company PT. AC is a small-medium enterprise that manufactures furniture for foreign market. The company was founded around 1988 and has been expanding until now. The materials used to make furniture are mainly wood, loom and rattan. But since 2001, PT. AC has started to produce aluminum and synthetic rattan furniture for outdoor purposes. Market At present, PT. AC s market is 100% foreign market as an Original Equipment Manufacturer (OEM). They plan to enter as well the local market, especially for contract and high-end residential projects. The strategy will be custom-made as well as branded product using the name Chamdani. For the time being in export market, PT. AC s foreign market can be divided into two regions: United States and Europe with market share of 20% and 80% respectively. Products The types of product are indoor and outdoor furniture. The sales of indoor furniture is more stable compared to outdoor furniture. Especially for four-season countries, the sales of outdoor furniture is highly seasonal only in summertime where the usage of outdoor furniture for leisure time is high. The characteristic of the market is to have

3 good quality furniture that would not be worn out by severe weather conditions when the chairs and tables are put outdoors under direct sunlight. The designs of the products come from two sources: 1. The client - sometimes the client comes to the company with their own designs and after several negotiations and price agreement, the company agrees to produce the product based on the design and gives exclusivity of design for the royalty. 2. PT. AC itself - the designs are decided during low seasons where the management is not too busy taking orders. When the R & D team and the designer have finished the design, the marketing team and finance team decided to follow up the development by preparing the price offer and other promotional material. When the promotion is ready, the designs of the product are being delivered to clients (via or fax) and if they approved, the samples will then be made. Marketing The promotion efforts are done by participating in various exhibitions in Europe, Japan and Indonesia and more importantly, PT. AC relies heavily on word of mouth (WOM) for acquiring new customers. In order to maintain current customers, the company is giving discounts in certain periods of time and rights of exclusivity for clients that are the most profitable ones.

4 In terms of CRM, PT. AC did not have a fixed system. The plan of the system was made already and has been improved over time by the management, and the biggest obstacles in realizing this system is limited human resources. The objective of this thesis is to make a suggestion for the new CRM designed specifically to accommodate PT. AC to set the priority for providing the best service to the profitable customers and obtain their loyalty. Scope The thesis will be limited due to the time and place constraints only for SME (PT. AC) and for general purpose, this thesis could be implemented for the industry (furniture manufacturing industry). The CRM scope within this thesis will not include IT (Information Technology) issues since there is no specific expertise in the area. However, the new system, if implemented manually, should enable PT. AC to increase the quality of the existing system and the management, and at the same time can be used as a blueprint for developing a more advanced future CRM system.. Since the method being proposed in this thesis is not applicable for now, it would be tested by the end of the process by doing a field research to get the inputs from the clients.

5 The information obtained in this thesis is basically from personal interviews and literature research. 1.2 Aims and Benefits The aim of the thesis is to create a blueprint of CRM system that could be used for small-medium enterprises. This blueprint can be used as a guide for a CRM system that is either manual, or in the future can also be used to develop an IT related product. We could see the fact that nowadays the cost of a CRM system is really expensive and not all companies even for those who are big companies could afford it. It would be unfortunate to see SMEs not being able to develop themselves and as a result, becoming obsolete in today s competitive market. Therefore, this thesis is written to create a simple CRM system that could be used for the company (or SMEs in general) in order to improve its quality and services to the clients so they could obtain customer loyalty. This thesis is also aimed as a requisite to obtain a bachelor degree from Universitas Bina Nusantara. 1.3 Structures Chapters within this thesis will cover the problems stated, the solutions and the proposed system. The structure of this thesis is as follows: Chapter 1: Introduction

6 The problem is the implementation of formal system of CRM within the company and the reasons of importance to implement the system; such as relationshipbuilding between company and clients and increase in after-sales service s quality. Chapter 2: Theoretical Foundation The theoretical foundation is consisted of understandings from several experts in various textbooks as the foundation to support the thesis statement. Chapter 3: Problem Analysis The goal of this thesis is to form the formal system of CRM to be applied for the company. Chapter 4: Method Interview. Literature research. Field research (if time permits) Chapter 5: Results Results that derived from the survey in order to enable discussion and build recommendations. Chapter 6: Evaluation and Discussion Evaluation from technical problems that might occur during survey process and data gathering process and discussion of the current problems. Chapter 7: Conclusion and Recommendation Conclusion from the evaluation and recommendations for the company and the whole process of this thesis for the future.

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