Customer Relationship Management of BMW in UK

Introduction

The topic of this research is the customer relationship management of BMW in UK, which is the emerging strategic tool, which deals with the company and its rapport with its customers. It is the widely implemented action plan by the company to increase sales, customer satisfaction, and the revenue by the use of innovative technology and to generate pact with the customers and to have synchronized business process.

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“Customer Relationship Management (CRM) is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized and efficient manner.” (CRM definition, 2010).

Topic description and research question

Customer relationship management deals with the interaction of the company with its customers and how it deals with the customers for the well being of the company in terms of increased positive feedback, profitability, productivity and increased revenue. CRM is the management or the methodology of the study related to people, their emerging needs, wants and the buying behaviour for the strong bonding between the customer and the company. CRM is not a complete technological process but it is the fission of the interrelated activities like marketing, systems, customer’s information, feedback, market trends, effectiveness and efficiency. “CRM helps businesses use technology and human resources to gain insight into the behaviour of customers and the value of those customers.” (Customer relationship management (CRM) tutorial, 2009).

The research deals with BMW and the customer relationship management of the company. The formulated research question for this dissertation is whether customer relationship management of BMW plays a key role in making customer happy and whether the company is implementing new ideas in customer relationship management.

Importance of the topic for research

The importance of choosing this topic is that BMW is the major automobile manufacturer in international market for the premium segmentation, they are the most attractive automobile brand in the industry and the more than 10,000 automobiles use BMW technology for the operations. BMW was the one along with Toyota to be named as the best car maker for customer satisfaction. It is a very interesting fact as BMW being the superior segment with the market dominance importance is given to customers and the customer relationship tools used in the industry.

“The total world production of BMW Motors in the year 2006 was 1,366,838 vehicles produced in the five locations of different countries. BMW has been engaged in motor sports activities since the dawn of the first BMW motorcycle. They also manufacture Formula cars, Touring cars and Sports cars.” (BMW, 2009).

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The CRM concept is the matured concept and the benefit of the same is in plenty. “Brand loyalty can be enhanced amongst consumer based on positive interactions with dealerships and service centres,” said Seri Teodoru, CFI Group chief executive.” (BMW and Toyota top for customer satisfaction, 2008).

Area of interest

This is the reason of a personal interest, liking to work in this area as the automobile industry is the most attractive and the performing sector in the world. BMW as a brand is considered, there are lots to add to its attractions.

“The biggest advantage thus far is the ability to share a single customer repository that contains millions of BMW customers. Contact center representatives in both Sales and Financial Services now have full visibility into each customer’s total relationship with BMW.” (BMW increases service efficiency, enhances the customer experience with Siebel automotive, 2008).

The owners of BMW received red carpet welcome in Singapore, where the owners of the cars with 7 series were given the most welcome. It is the parent company of Rolls Royce, the one to excel with its establishment in 1916. It is also the market leader for luxury cars and the main revenue generator for the country.

Research conducted in CRM

Different researches were conducted in CRM, the conclusions obtained from the researches differ. The research done by AMR counter point gives the research base on how the end users are significantly engaged in the CRM Implementation and how they contribute to the success in the organization, and how it affects the sales force by hiring of the CRM software by its operations. The research suggests that CRM initiatives often fail as there is lack of support from the end users. The market research provides a lot of insight to customer relationship and the customer centricity. The research projects carried out with the CRM are best CRM practices for the organization, primary and secondary research for the organization. The main research is done on the myths about CRM, like when the internet is down whether the operation will be down, whether the hosted solutions are for the middle size companies only, whether the hosted software can be implemented at a faster rate, where they are available and whether they are expensive for the operations and the availability of them in the front office or in the CRM source. Customer loyalty is another topic for the research. It is the vitality in understanding the customer and the loyalty towards the company. The loyalty of the customer helps in different ways; it helps to have a continuous track record of the customers and developing of the prospective customers for the company.

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“Companies should seek customer loyalty from the very first purchase! The first purchase signifies the beginning of the relationship. For most organizations, attrition rates just after the first purchase are double at this stage of a company/customer relationship.” (Griffin, 2003, p.2).

The study gives the idea that the competitive challenges in the current scenario which are as the result of globalization and technological advancement have become the driving force for many of the companies to have focus on CRM in the industry.

Research themes

The research on customer relation include the customer centricity as the main research theme, the main theme of research can be related to the image of the CRM in relation to the trend in the current scenario. The perspectives of CRM differ; they can be divided into strategic, collaborative, analytical, and operational CRM with the varying implications in the organization. “Three implications for future research on CRM are noted: 1.There is need for more research within the area of Operational CRM and Collaborative CRM. 2. There is a need for research with a resource based view on CRM. 3. There is a need for more research on CRM in SMEs, using a frame of reference that accounts for SME features.” (Wahlberg, Strandberg, Sundbrg & Sandberg, 2009).

The company being the leader in automobile sector and the top revenue generator, it have to face different challenges which include failure in the implementation, the different companies have not reached up to the expected level in the CRM industry where the statistical analysis shows that only one in six companies has successfully installed CRM. “Almost 75% of projects have not succeeded in delivering the expected ROI and have faced numerous problems with CRM.” (Goldmine hits the marque at BMW, 2005).

Customer loyalty was another theme of the research, when the customers are loyal to the company, tremendous advantages are gained by the company and they can have a lead in the company’s revenue, profitability and productivity.

Research Gap

The gap analysis is a tool for the comparison of actual performance and the expected performance in order to understand whether the company can reach the expected targets. The gap analysis is used irrespective of large and small companies.

“Gap analysis is used to determine where shortfalls are occurring while attempting to achieve goals. It can be used by several departments, including marketing, production and accounting.” (Burdick, 2010).

Major theories related to research topic

The CRM provides a very good role in the business and development, it also gives the business strategy in the CRM perspective. The CRM helps in customer acquisition, customer retention and customer extension in making successful business organization.

Business strategy and CRM
(Business strategy and CRM, 2010.).

Marketing theories and concepts related to marketing the product

Marketing can be considered as the major area of the organization to achieve profitability and productivity target.

“CRM marketing solution enables you to make intelligent decisions about customers in real time across all touch points.” (Infor CRM, 2010).

Interaction advisor: The interaction advisor makes use of the availability of the customer from the previous data, personal data and contextual data. It creates the highest impact on different kinds of customers and it creates the interaction among the customers and helps in the promotion of the company’s products.

Outbound marketing: This consists of the integrated database for marketing activities and for planning, executing and maintaining of the different plans for the successful implementation.

Value innovation and value curve: Value innovation is the main theory in consideration with the customers, their values and the need of them is considered, it is a process which takes few months time for critical implementation, it mainly makes use of the analysis for the identification of the customer and creating the products according to the taste and preferences. Value curve is the curve which shows the supply of the product than its competitors.

“The value curve shows how your offering compares to that of your competitors, as seen by the customer. The possible aspects of value that customers might care about, called value elements.” (Mead, 2006).

Brand personality: Brand personality is the theory of different kinds of personality traits, beliefs and the attitude of the people and the description of the human nature in terms of the brand. It is the one which increases the brand value and the brand management

“Any business studies text book will tell you that it is important to identify your market. Initially this process is done through market research.” (Theories, n.d.).

Market segmentation

Market segmentation is the process of scattering the product in the market. “The purpose for segmenting a market is to allow your marketing/sales program to focus on the subset of prospects that are “most likely” to purchase your offering” (Business Resource Software, Inc., 2009).

The market segmentation depends on different kinds of segments like the geographic, economic, demographic and the cultural factors. While marketing a product, different factors and analysis are to be considered. Geographic factor means the location like the urban or the rural areas for segmenting the product. As far as BMW is concerned, its posh cars are in demand globally and hence it finds the market only in metropolitan cities. The demography consists of income, age group of the people and buying power of the people; it consists of the people in certain age groups. The cultural factors include the culture of the people and how they are related to the purchase power parity and the influence of culture on the people in purchasing the product especially depending on the life style. “Culture is the most basic cause of a person’s wants and behaviour. So it can influence all the consumers who have the same cultural characteristics. Cultural characteristics affect consumer’s lifestyle under a particular culture.” (Cultural factors affecting buying behaviours, n.d., p.1).

The product life cycle: The product life cycle consists of the different stages of the product from the point of manufacture.

Marketing: the product lifecycle
(Marketing: the product lifecycle, 2007).

The product has different stages like the infantry stage or the introductory stage where the product is just in the market and promotion plays a major role. In the growth stage, the product faces competition and competitors are the key players in the market. The next stage is the maturity stage where the product is at a saturated condition where there is no more growth in the market. Then the declining stage of the product starts and ultimately the product is no more in the market. This paves way for the new players in the marke.

Cognitive dissonance: The cognitive dissonance is the psychological trait in the human being; it is the negative feeling of the past action. “Cognitive dissonance theory is rather simple. It begins with the idea of cognitions. Cognitions are simply bits of knowledge. They can pertain to any variety of thoughts, values, facts, or emotions.” (Barker, 2003).

The product pricing: Pricing of the product is the term where the manufacturers and the consumers come together. There are different rules for the pricing of the product; they are “all prices must cover costs and profits. The most effective way to lower prices is to lower costs. Review prices frequently to assure that they reflect the dynamics of cost, market demand, response to the competition, and profit objectives. Prices must be established to assure sales.” (Pricing a product, 2010).

Basic theory relevant to the topic

The basic theories relevant to the topic are the market segmentation and the pricing of the products. As our product is the premium car of the international market, they have the relevance in the market segmentation. The BMW cars are those which are aimed at the superior class of the society and the availability of such materials find the utility only in the metropolitan cities in the posh areas. If they are marketed in the rural areas the product becomes an ultimate failure in terms of affordability and purchase parity.

The pricing of the BMW cars is at the skimmed pricing as they are the top most variety of cars in the market. They take up the top price fixation in the market by pulling down the other players in the market.

Concept for the structuring of the research

The structuring of the research should find proper consideration, the analysis of data and different kinds of conversation and resources. The structuring of the research should have introduction, research approach, conclusion and references. It should specify the attributes and the terms that are used in the research.

“For the formal or primary academic research assignment, where you will take your place in the scholarly conversation, consider an organization pattern typically used for academic primary research.” (Effective writing centre (EWC), 2009).

Customer relationship is the major topic that is relevant to the BMW cars and how they deal with the customers to improve customer satisfaction, feedback and for the improvising the prospective customers. It is through customer relationship management that the company can be in a leading level with good market share and generation of profit.

Different types of data collection

“When collecting dissertation or thesis data, there are numerous things to consider.” (Data collection for dissertation & thesis research, 2007). Different kinds of data required for this type of research is data related with customer relationship management of BMW. In order to get this kind of data, it is necessary to formulate the survey questionnaires and interview questions according to needs. Only then one will get the correct data. Else, there will be no use of collecting data. To collect accurate data, it is necessary to approach knowledgeable person or any person who is having relation with BMW Company.

Methods of data collection

Data collection technique allows “to systematically collect information” regarding the object of the study. (Module 10A, n.d). Here, the object is customer relationship management of BMW in UK. Different types of data collection include conducting surveys by preparing questionnaires and distributing those questionnaires to different people through different means. The above mentioned is the first set of data collection. The second set of data collection is by conducting an interview with an eminent person. All the above sets of data collection require taking consent from the people who are going to involve in this. This is very important, otherwise result gathered from this will not be accurate.

Different types of surveys included in data collection

Surveys are of different types; they are email surveys and internet/intranet surveys. “Email surveys are both very economical and very fast.” (Survey design, 2010). Main advantage of this is within a limited time it is possible to do all sorts of procedures very easily. Internet/intranet surveys are another type of survey, which is extremely fast. For this, questionnaires can be posted in a popular website and expect for responses. Questionnaires are prepared by keeping it very petite and straightforward. It is done in order to avoid problems for those who conduct surveys.

Research method used in this dissertation

The method or approach used in the research is both qualitative and quantitative approach. “Qualitative research is all about exploring issues, understanding phenomena and answering questions.” (What is qualitative research?, 2007). In other words “qualitative research is a form of social inquiry.” (What is qualitative research?, 2008). In case of quantitative research it “generates statistics through the use of large-scale survey research, using methods such as questionnaires.” (Sanchez, 2006). Reason for including both is this research includes both questionnaire survey and interview. This method is chosen to analyze customer relationship management of BMW and how it enhances their sales in UK and how much it helps in satisfying the customers. To understand about this, it is very much important to include every person related with BMW Company in UK. The chosen approach includes surveys, questionnaires, small interviews in order to “measure how many people feel, think or act in a particular way.” (DJS Research Ltd., 2009).

The main aim of employing these research methods is to analyze the different strategies BMW Company is implementing in customer relationship management. In order to understand this, some approach mentioned above has been taken.

Getting access to different people who involved in this

This has been achieved by contacting the company officials and taking consent from them disclosing the purpose. After that, details of all people in the company have been accessed through company database. Every process took place only after getting permission from the company. There is no need to approach all sorts of people of the company. Once details of the people or employees are received, one can adopt random sampling technique to choose some people or employees among them who are needed for conducting surveys.

Interview: (In Appendix)

Interview has been conducted with Ian Robertson after getting the consent from him. This has been conducted in order to understand about what kind of customer relationship management strategy is being followed in BMW.

Interview with “Ian Robertson, Member of the Board of BMW AG, Sales and Marketing:” (Bridger, 2009).

Sample questionnaires: (In Appendix)

The purpose of this survey is to analyze or to do research on customer relationship management of BMW in UK. For this purpose these questionnaires have been spread across different people who have got any kind of relation with BMW. These questionnaires have been distributed through various channels to reach the end persons.

Analysis of data

The data can be analyzed by seeing the outcome of the surveys. That is, outcome will vary according to the responses. The questionnaires were sent to 500 people who have got relation with BMW Company. These questionnaires were sent to these people through emails and also these questionnaires were placed in a webpage. Those who are ready to take survey through this login names are assigned to them in order to get in to the webpage.

Statistical approach to analyze data has been shown in the appendix section.

Reason for use of this research

The research is to analyse the customer relationship management of BMW in UK. It is very important for this company to stay in the market along with competitors. Once this kind of research is conducted, one can understand the importance of customer relationship management and also the knowledge of the people about customer relationship management and its role in making customer happy. To make this research more useful and effective, two-way approach has been used, that is quantitative and qualitative. The intention to use this type of approach is to get accurate details since BMW is one of the largest organizations.

How could it be used in future?

This can be used in future in order to analyze the effectiveness of the customer relationship management of BMW in UK. Also, this can be used as base while carrying out any other research in future related to this.

Conclusion

Customer relationship management is prerequisite for a company in order to enhance its business. Not only analysing a good customer relationship management will make customer happy always. Implementation of good CRM in a company always makes customers satisfied in their needs. This will increase the reputation of the company. Here in this case, research has been done to analyze the customer relationship management of BMW in UK.

Appendix

Interview

Interviewer: Hello and welcome sir; how are you?

Ian: I am fine.

Interviewer: Can I start sir?

Ian: ok.

Interviewer: Let’s start by telling BMW groups CRM implementation.

Ian: ok. I am happy to tell about it. Here we got CRM and e-business program, which enhances all kinds of customer relationship.

Interviewer: Can you specify?

Ian: Oh sure. It’s just like computer industry. Everything must be fast. We need to implement new strategy in every aspect. There are different products and different customers. Customers will be having different desires. Expectations of the customers and the way to meet the expectations are really same.

Interviewer: What actually CRM means to BMW?

Ian: It is same as customer relationship management. Here, customers are persons who drive the car. But it is not necessary that it always be the driver. It can be a person who makes the decision or a person who buys the car. So, in short customer is a person who is involved in decision making process for buying the car.

Interviewer: Can you give a bit extra depiction of CRM with BMW?

Ian: One important object I want to highlight here is BMW’s success really depends on two pillars that are brand and product. CRM plays a key role in integrating these with customer in strengthening everything.

Interviewer: When it first started in your company?

Ian: CRM was launched in early 1999. Lots of changes have been taking place in CRM according to changing situations.

Interviewer: You mentioned about some changes. Can you describe about it?

Ian: We are definitely using premium CRM as it just like BMW’s premium brands and products. The approach used is to enhance business; at the same time it incorporates both customer and markets into it.

Interviewer: Whether these CRM principles are workable and up to how much?

Ian: This is one of the key questions. If we look into current scenario, it is understandable that most of the BMW customers are internet customers. Before coming to company they will search the web for more information. Not just surfing, they will put their footprints there by placing questions for dealers. Can any one imagine that when a person arrives dealer can greet the person by calling name and express everything is fine and answers for questions are ready? This might be unimaginable.

Interviewer: What was the reaction of employees towards CRM?

Ian: Reaction is always positive, because this enables them to have very good interaction with customers and also helps to fulfil the customers’ wish. An important challenge for employees is serving the customer best. For this, sales persons must analyze the customers’ knowledge and their asset. In actual sense, CRM is a matter related to mindset.

Interviewer: ok fine, anything else to add…

Ian: Implementing CRM is not so simple with definite finishing line. What actually we need to do is figure out whether there is any finishing line. If there is any, we need to achieve it.

Interviewer: Ok sir; appreciate you for spending time with us.

Ian: Thank you.

Questionnaire section

Section 1

  1. What is your name? 
  2. Your age?
  3. Gender?
    1. Male
    2. Female
  4. What’s your job/title?
  5. Residential address?

Section 2

  1. I am familiar with the topic CRM.
    1. Strongly Disagree
    2. Disagree
    3. Neutral
    4. Agree
    5. Strongly Agree
  2. I am aware about the CRM strategy of BMW.
    1. Strongly Disagree
    2. Disagree
    3. Neutral
    4. Agree
    5. Strongly Agree
  3. I know the importance of CRM in the company.
    1. Strongly Disagree
    2. Disagree
    3. Neutral
    4. Agree
    5. Strongly Agree
  4. I know the benefits of CRM implementation once it has been introduced in the company.
    1. Strongly Disagree
    2. Disagree
    3. Neutral
    4. Agree
    5. Strongly Agree
  5. I know this customer relationship management system helps the firm to understand the customer much better.
    1. Strongly Disagree
    2. Disagree
    3. Neutral
    4. Agree
    5. Strongly Agree
  6. Whether CRM strategy varies according to the size of the organization?
    1. Strongly Disagree
    2. Disagree
    3. Neutral
    4. Agree
    5. Strongly Agree
  7. Would you think this CRM strategy has key role in making customer happy?
    1. Strongly Disagree
    2. Disagree
    3. Neutral
    4. Agree
    5. Strongly Agree
  8. Whether good customer relationship enhances or increases the sales?
    1. Strongly Disagree
    2. Disagree
    3. Neutral
    4. Agree
    5. Strongly Agree
  9. Whether customer relationship management can reach particular customer segments besides their needs?
    1. Strongly Disagree
    2. Disagree
    3. Neutral
    4. Agree
    5. Strongly Agree
  10. Whether CRM plans are updating according to the situation or demands?
    1. Strongly Disagree
    2. Disagree
    3. Neutral
    4. Agree
    5. Strongly Agree
  11. Are you thinking without customer relationship management is it possible to satisfy the customer?
    1. Strongly Disagree
    2. Disagree
    3. Neutral
    4. Agree
    5. Strongly Agree
  12. Any other comments

Data analysis section

Interview conducted in this research can be analyzed qualitatively. One “can go through it, and count the number of times that certain words appear, if you so desire (e.g. a content analysis), and this would be consistent with hypothesis testing.” (How can I analyse my data?, n.d.).

Here mainly explores the meaning of what interviewee told and so this approach can be categorized as open-ended approach.

Surveys done through questionnaires can be analyzed by quantitative approach. Outcome of surveys are analysed with the help of statistics.

Size of population: Population can be a group of people. That can be the collected details of all the people related to company. A sample can be a small set of people in it and survey is distributed among them. Response got for the survey can be called response rate.

Degree of variance: If responses tend to be strongly clustered, then there is no need to sample other samples.

A sample graph is shown in order to understand the analyses of data.

statistical accuracy of a survey
(Bennekom, 2003, slide.1).
descriptive statistics
(Bennekom, 2003, slide.2).

Horizontal axis is taken as population and vertical axis is taken as percentage of population responding. This cannot be considered as response rate. “The response rate is the percentage of the sample that responds. This is a critical distinction.” (Statistical confidence in a survey, 2007).

Now, let us see general interpretation of curves. Each of the curves shows 95% of accuracy which has got some sort of accuracy. Let’s choose an accuracy of +/- 10% and our questionnaires got range of 5 intervals. So there may be 5 equal intervals in a scale. If we get sufficient response then it can be chosen as +/- 10% curve. “Plus or minus 10% on our scale is 1 full interval point (20% of 5).” (Statistical confidence in a survey, 2007).

Now, consider the case of population 1000 and we chose 500 as sample. Imagine in that half of the sample responded. “So, 25% of the population responded. Find the intersection of 1000 on the horizontal axis and 25% on the vertical axis. You would be approximately 95% certain of +/-5% accuracy in your survey results.” (Statistical confidence in a survey, 2007).

In order to achieve accuracy of this survey, 18% of 500 need to respond. That is nearly 90 responses are needed.

When we conduct questionnaire survey and analyse the results, some times we want to know about the variances that arise in the result. “The

confidence statistic incorporates the variance found in each survey question and can be calculated for each survey question. The confidence statistic tells us the size of the band or interval in which the population means most likely lies – with a 95% certainty.” (Statistical confidence in a survey, 2007).

Reference List

Barker, P., 2003. Cognitive dissonance. Beyond Intractabiity.org.

Bennekom, F.V., 2003. Descriptive statistics-confidence interval example. Great Brook.com. Web.

Bennekom, F.V., 2003. Statistical accuracy of a survey. Great Brook.com. Web.

BMW and Toyota top for customer satisfaction, 2008. Motor Trader.com. Web.

BMW increases service efficiency, enhances the customer experience with Siebel automotive, 2008. CRM Today. Web.

BMW, 2009. Auto Guide: The Complete Auto Platform. Web.

Bridger, G., 2009. BMW board member Ian Robertson at the LA auto show. Bimmer File: Daily News, Reviews and Opinions on All Things BMW. Web.

Burdick, J., 2010. Research gap analysis. E How: How to Do Just about Everything.

Business Resource Software, Inc., 2009. Market segmentation. BRS: Center for Business Planning. Web.

Business strategy and CRM, 2010. Marketing Teacher. Web.

CRM definition, 2010. Marios Alexandrou.com: Web Strategist & Project Manager. Web.

Cultural factors affecting buying behaviours, n.d. Web.

Customer relationship management (CRM) tutorial, 2009. CRM Tutorial.com. Web.

Data collection for dissertation & thesis research, 2007. Research Consultation.com.

DJS Research Ltd., 2009. What is quantitative research.

Effective writing center (EWC): chapter 4: the research process, 2009. University of Maryland University College. Web.

Griffin, J., 2003. Customer loyalty- and why it matters now more than ever. NCR Corporation.

Goldmine hits the marque at BMW, 2005. I Start: Technology in Business. Web.

How can I analyse my data?, n.d. Web.

Infor CRM (customer relationship management): marketing, 2010. INFOR.Web.

Module 10A: overview of data collection techniques, n.d. IDRC, CRDI: The International Development Research Centre, Science for Humanity. Web.

Marketing: the product lifecycle, 2007. Quick MBA: Knowledge to Power Your Business.

Mead, K., 2006. An introduction to value innovation: value curves. Business innovation. Web.

Pricing a product, 2010. Entrepreneur.

Sanchez, A., 2006. The difference between qualitative and quantitative research. Free Article: Tutorial.

Statistical confidence in a survey: how many is enough?, 2007. great Brook: Organizational Effectiveness through Feedback Management.

Survey design, 2010. Creative Research Systems.

Theories, n.d. Biz/ed. Web.

Wahlberg, O., Strandberg, C., Sundbrg, H. & Sandberg, K.W., 2009. Trends, topics and under-researched areas in CRM research-a literature review. International Journal of Public Information Systems. Web.

What is qualitative research?, 2007. QSR International. Web.

What is qualitative research?, 2008. Robert Wood Johnson Foundation, Qualitative Research Guidelines Project.

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