Culture, Institutions and International Strategy - 1193 Words

Culture, Institutions and International Strategy. For those firms who want to expand their business internationally, it is inevitable for them to face the cultural challenge. This article stresses the impact of culture on international operation as well. According to institutional-based view, informal and formal institutions have their own way to reduce risk. For informal ones, they rely on relational contact which is informal relationship based and personalized exchange. What is more, Human capital and Relationship capital are important factors to perform successfully in international market which is related to informal institution thought. Also, the article help me to understand the relationship between institution, firms and strategic†¦show more content†¦It obviously promotes specialization within specific region which firm can fully utilize the human capital and other related resources such as regional pool of specialized suppliers. What’s more, firm can gain better understanding of cultures and institutional e nvironments. However, closely located competitors might seize the important resources such as talented employee and, also, imitate its technology and knowledge. Also, in this fast changing business world, responding faster should be more appropriate. The firms that pursue agglomeration always take slower action than other do since they focus their resources on specific region and it is difficult for them to move or to exploit emerging market. Future Research and Conclusion For future research, an issue that interested me is the increasing of cultural convergence. Can MNCs leverage resources and standardize organizational practices across cultural boundaries? In my opinion, it is possible but really difficult to achieve even the world is becoming more global since there is no truly 100% globalization. Globalization does not mean that every country will become the same but it makes people realize the differences between them when they move out of their shells. When a firm goes abroad different strategy will be used differently on each country so there is no universal strategy or standardize organizational practices. EnteringShow MoreRelatedCultural And Social Capital Theory999 Words   |  4 Pagesacademic success for Chinese international students. Whereas, English proficiency was considered to be a weak factor and social interaction factors were not too much related to Chinese international students’ academic success. Yuan (2011) examined the experiences of ten Chinese students at one American university. This study examined the challenges faced by Chinese international students, their social interaction, and their attitudes to adapting into the American culture and society. 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The Great Depression Of America - 920 Words

The Great Depression A major event in American history that has shaped society today is the great depression that began in 1929 and ended in 1939. The official day the stock market crashed was a a day known as â€Å"black Tuesday†. At the time, the American government was not prepared nor did they have policies in place that made them well prepared for such an event to take place. This unfortunate event threw Americans into a an economic crisis unlike any event experienced before in history and left millions of hardworking Americans in a state of poverty and misery for nearly a decade. Before the depression hit, the 1920’s known as the â€Å"golden age† had taken place. For the first time in history more Americans were living in the cities than†¦show more content†¦They needed one another to provide help with expenses. 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Operational Risk Management in Banking Sector an Overview Free Essays

string(115) " in which losses are categorized according to the type of event and the business line in which the event occurred\." ReseaRch PaPeR Commerce Volume : 3 | Issue : 1 | January 2013 | ISSN – 2249-555X Operational Risk Management in Banking Sector: An overview Keywords Rakesh Chutia Assistant, State Bank of India Margheita-786181 Dist. -Tinsukia Assam ABSTRACT Operational risk is inherent in all banking products, activities and processes and systems and the effective management of operational risk is of paramount importance for every bank’s board and senior management. With globalization and deregulation of financial markets, increased competition combined with the advent of high-end, innovative, sophisticated technology tremendous changes have taken place in the products distribution channels and service delivery mechanism of the banking sector. We will write a custom essay sample on Operational Risk Management in Banking Sector: an Overview or any similar topic only for you Order Now These have introduced more complexities into the banking operations and consequently the risk patterns and profiles of the industry have also become complex, diverse and catastrophic. The New Capital Adequacy Framework of the Reserve Bank of India requires bank to maintain capital explicitly towards operational risk. This paper tries to study the various methodologies used by the banks in their operational risk management activity and to study the regulatory framework related to operational risk management. Introduction Since the late 1990s, globalization, deregulation, consolidation, outsourcing, breaking of geographical barriers by use of sophisticated technology, growth of e-commerce etc. have significantly changed the business, economic and regulatory climate of the banking sector. These developments introduced more complexities into the activities of banks and their risk profiles. Consequently a series of high profile operational loss events at Societe Generale, UBS, AIB, and National Australia Bank etc. have led banks and their managements world over to increasingly view operational risk management as an integral part of their risk management activity like the management of market risk and credit risk. The identification and measurement of operational risk is a significant issue for modern-day banks, particularly since the decision by the  Basel Committee on Banking Supervision  (BCBS) to introduce a capital charge for this risk as part of the new capital adequacy framework (Basel II). Operational risk has been defined by the Basel Committee on Banking Supervision as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. This definition is based on the underlying causes of operational risk. It seeks to identify the causes of a loss event and at the broadest level includes the breakdown by four causes: people, processes, systems and external factors. Operational risk may materialise directly, e. g. , in electronic fund transfer (transfer of funds to the wrong person) or could result indirectly as a credit or market loss. Since there is a close linkage of operational risk with other types of risks, it is very important for banks to first have a clear understanding of the concept of operational risk before designing the appropriate operational risk measurement and management framework. Different types of operational risk in Banking Sector The Basel Committee has identified the following types of operational risk events as having the potential to result in substantial losses for banks: †¢ Internal fraud. For example, intentional misreporting of positions, employee theft, and insider trading on an employee’s own account. Externalfraud. Forexample,robbery,forgery,chequekiting, and damage from computer hacking. †¢ Employment practices and workplace safety. For example, workers compensation claims, violation of employee health and safety rules, organised labour activities, discrimination claims, and general liability. †¢ Clients, products and business practices. For example, fiduciary breaches, misuse of confidential customer information, improper trading activities on the bank’s account, money laundering, and sale of unauthorized products. Damagetophysicalassets. Forexample,terrorism,vandalism, earthquakes, fires and floods. †¢ Business disruption and system failures. For example, hardware and software failures, telecommunication problems, and utility outages. †¢ Execution,deliveryandprocessmanagement. Forexample: data entry errors, collateral management failures, incomplete legal documentation, and unauthorized access given to client accounts, non-client counterparty misperformance, and vendor disputes. OPERATIONAL RISK MANAGEMENT PROCESS: Operational Risk management generally encompasses the process of identifying risks to the bank, measuring exposures to those risks), ensuring that an effective capital planning and monitoring programme is in place, monitoring risk exposures and corresponding capital needs on an ongoing basis, taking steps to control or mitigate risk exposures. †¢ Identification of operational risk. Banks should identify and assess the operational risk inherent in all products, services,activities,processesandsystems. You can read also Portfolio Management Quizzes Effectiverisk identification should consider both internal factors (such as the bank’s structure, the nature of the bank’s activities, the quality of the bank’s human resources, organizational changes and employee turnover) and external factors (such as changes in the industry and technological advances) that could adversely affect the achievement of the bank’s objectives. †¢ AssessmentofOperationalRisk. Inadditiontoidentifying the risk events, banks should assess their vulnerability to these risk events. Effective risk assessment allows a bank to better understand its risk profile and most effectively target risk management resources. Amongst the possible tools that may be used by banks for assessing operational risk are: ? Self Risk Assessment: A bank assesses its operations and activities against a menu of potential operational risk vulnerabilities. This process is internally driven and often incorporates checklists and/or workshops to identify the strengths and weaknesses of the operational risk environment. 6 X INDIAN JOURNAL OF APPLIED RESEARCH ReseaRch PaPeR Risk Mapping: In this process, various business units, organizational functions or process flows are mapped by risk type. This exercise can reveal areas of weakness and help prioritise subsequent management action. ? Key Risk Indicators: Key risk indicators are statistics and/ or metrics, often financial, which can provide insight into a bank’s risk position. Such indicators may include the number of failed trades, s taff turnover rates and the frequency and/or severity of errors and omissions. †¢ Measurement. A key element of risk management is measuring the size and scope of the bank’s risk exposures. However, there is no clearly established, single method to measure operational risk on a bank-wide basis. Banks may develop risk assessment techniques that are appropriate to the size and complexities of their portfolio, their resources and data availability. A good assessment model must cover certain standard features. An example is the â€Å"matrix† approach in which losses are categorized according to the type of event and the business line in which the event occurred. You read "Operational Risk Management in Banking Sector: an Overview" in category "Papers" Banks may quantify their exposure to operational risk using a variety of approaches. Forexample,dataonabank’shistoricallossexperience could provide meaningful information for assessing the bank’s exposure to operational risk and developing a policy to mitigate/control the risk. †¢ MonitoringofOperationalRisk. Aneffectivemonitoring process is essential for adequately managing operational risk. Banks should implement a process to regularly monitor operational risk profiles and material exposures to losses. In addition to monitoring operational loss events, banks should identify appropriate indicators that provide early warning of an increased risk of futurelosses. Such indicators should be forward-looking and could reflect potential sources of operational risk such as rapid growth, the introduction of new products, employee turnover, transaction breaks, system downtime, and so on. There should be regular reporting of pertinent informationtoseniormanagementandtheBoardofDirectors that supports the proactive management of operational risk †¢ Controls/MitigationofOperationalRisk. Withregardto operational risk, several methods may be adopted for mitigatingtherisk. Forexample,lossesthatmightarise on account of natural disasters can be insured against. Losses that might arise from business disruptions due to telecommunication or electrical failures can be mitigated by establishing redundant backup facilities. Loss due to internal factors, like employee fraud or product flaws, which may be difficult to identify and insure against, can be mitigated through strong internal auditing procedures. The Board of Directors and senior management must make efforts for establishing a strong internal control culture in which control activities are an integral part of the regular activities of a bank. Banks should periodically review their risk limitation and control strategies and should adjust their operational risk profile accordingly using appropriate strategies, in light of their overall risk appetite and profile. Investment in appropriate processing technology and information technology security are also important for risk mitigation. Banks should also have in place contingency and business continuity plans to ensure their ability to operate on an ongoing basis and limit losses in the event of severe business disruption. OPERATIONAL RISK MANAGEMENT APPROACHES IN BASEL II The Basel framework (2004) proposes a range of approaches for setting aside regulatory capital for operational risk under Pillar 1: The Basic Indicator Approach (BIA), The Standardised Approach(TSA)andtheAdvancedMeasurementApproach (AMA). Allthethreeapproachesdifferintheircomplexityand the banks are encouraged to move along the spectrum of approaches as they obtain more sophistication in their risk management practices. The Basic Indicator Approach is the simplest approach for estimating regulatory capital, wherein Volume : 3 | Issue : 1 | January 2013 | ISSN – 2249-555X banks are required to set apart an amount equal to the average over the previous three years of 15% of positive annual gross income. In The Standardised Approach, banks’ activities are divided into eight business lines: Corporate finance, Trading Sales, Retail Banking, Commercial Banking, Payment Settlement, Agency Services, Asset Management and Retail Brokerage. While gross income continues to be the main indicator of operational risk as under the Basic Indicator Approach, the specific amount to be set apart as a percentage of the gross income varies between business lines, ranging from 12 to 18% , as compared to the 15% overall under the Basic Indicator Approach. This approach is more refined than the Basic Indicator Approach as it takes into the account the fact that some business lines are riskier than others and therefore a higher proportion of capital has to be set apart for those business lines. The Advanced MeasurementApproach(AMA)isbasedonthebanks’internalmodels to quantify operational risk. The framework gives flexibility to the banks in the characteristics of the choice of internal models, though it requires banks to demonstrate that the operational risk measures meet a soundness standard comparable to a one-year holding period and a 99. 9% confidence level, which means that a bank’s capital charge should be equal to at least 99. 9% quantile of their annual aggregate loss distribution. Banks are required to factor in four key elementsindesigningtheirAdvancedMeasurementApproach framework: internal loss data, external loss data, scenario analysis and bank specific business environmental and internal control factors. The methodologies under the advanced approach are evolving and there are a range of methods in practice in banks internationally. OPERATIONAL RISK MANAGEMENT IN THE CONTEXT OF INDIAN BANKING SECTOR: The Reserve Bank of India is the regulator and supervisor of the banking system in India and is entrusted with the task of framing the capital adequacy guidelines for banks in India under Basel II. Public sector banks, where the Government of India is the major shareholder, dominate the Indian banking system, accounting for nearly three-fourths of total assets and income. These banks are large and very old banks, operating through thousands of branches spread all over the country. The new private sector banks are fully automated from day-one and operate like other high-tech foreign banks. The private sector banks have grown rapidly since the onset of reforms and have increased their share in total assets of the banking industry, whereas the public sector banks have witnessed shrinkage in their market share. The public sector banks have only recently started automating their processes and operations. This transition has posed significant challenges in the management of operational risk to the banks as introduction of new technology and complete overhauling of the existing systems requires a re-engineering of business processes, training of manpower, audit in a computerized environment and other related operational risk challenges. The new generation private sector banks on the other hand have to deal with the risks arising from growth at a scorchingpace. WiththereformsintheIndianbankingsectorand banks being allowed to access new markets and sophisticated products, the Reserve Bank of India has also been repeatedly advising the banks to have in place an effective and resilient control framework in place to manage operational risks. Specific guidance on management of operational risk has also been issued as per which some banks; especially the larger and internationally active banks are expected to move along the range towards more sophisticated pproaches as they develop more sophisticated operational risk management systems and practices which meet the prescribed qualifying criteria. Conclusion: ManagingOperationalRiskisemergingasanimportantelement of sound risk management practice in modern day banks in the wake of phenomenal increase in volume of transactions, high degree of structural changes and complex technological support systems. RBI expects all Indian banks to strengthen their operation risk management system and to INDIAN JO URNAL OF APPLIED RESEARCH X 7 ReseaRch PaPeR e in readiness to graduate to more sophisticated approaches of operational risk management under Basel norms. In order to derive maximum gains banks need to gear up efforts for speedy and effective implementation of comprehensive Volume : 3 | Issue : 1 | January 2013 | ISSN – 2249-555X operational risk management frameworks and thereby bring more efficiency, transparency, profitability and sustainability into their operations. REFERENCE Reserve Bank of India, Department of Banking Operations and Development, Central Office, Mumbai, (2005), â€Å"Draft guidance note on management of operational risk†, 2. Basel Committee on Banking Supervision (August, 2003) â€Å"The Joint Forum Operational risk transfer across financial sectors†, 3. Usha, Janaki, Raman, (2008) â€Å"Operational Risk Management in Indian Banks in the Context of Basel II: A Survey of the State of Preparedness and Challenges in Developing the Framework†, 4. Rao, D, Tripati and Ghosh, Prodipta, (2008) â€Å"Preparedness of Indian Banks in Managing Operational Risk†, 5. Kale, Ketan and Agarwal, Mohit, Marsh India, (2011) â€Å"Operational Risk Mitigation Basel II Accord – Challenges Opportunities†. 8 X INDIAN JOURNAL OF APPLIED RESEARCH How to cite Operational Risk Management in Banking Sector: an Overview, Papers

Is Survival Selfish Essay Example For Students

Is Survival Selfish Essay Category:MiscellaneousPaper Title:SurvivalText:SURVIVALDo you ever survive the effects of divorce? If you have experienced divorce,or knew someone that has, this is a question you will ask yourself. Ron andLilly were married for fifteen years and during the course of their marriage hadthree children ages 8, 10 and 12. Ron worked as a private attorney in a solopractice and Lilly worked in the home as a homemaker. Although Lilly worked inthe home, she had a Bachelors degree in early childhood development. She hadalways wanted to work outside of the home, but she and Ron felt that it was moreimportant to care for the children full time. When her husband announced that hewas leaving, she wasnt surprised that he didnt care for her the same way hedid when they first met, but she never dreamed he would leave her and thechildren. Ron packed his things the next day while the children were in school. Thechildren were not informed their parents were separating and one day woulddivorce. Lilly was left alone to deal with the emotional upheaval this wouldcause the children. When the children returned from school, they sensedimmediately something was wrong. They knew their parents were not getting alongand that their father was spending less time at home, however they never thoughtthis would happen. When their mother told them that their father would not beliving at home and that nothing else in their life would change, the childrenlooked with disbelief. The children started to cry, and Lilly as best as shecould, tried to console them. The lives of this family would never be the same. Ron never discussed with Lilly how the finances would be handled, or how muchmoney she would need for her and the children to live on. Because Lilly neverworked outside of the home, Ron was now having to manage two homes on oneincome. The children attended private school and were in several after schoolprograms that were very costly. The money Ron gave Lilly and the children, wasnot enough to pay the mortgage, utilities, car note, food, clothes and the dailyexpenses for the children. Ron and Lillys divorce caused severe financial and emotional instability oneveryone. Lilly and the children had to sell the home they lived in because theycould not afford the financial cost, or the upkeep that was needed to maintainthe home. Lilly and the children bought a much smaller home, in a not so greatneighborhood. Because of the move and lack of finances, the children had toattend public school and make new friends. The oldest started talking back toher mother, grades started to fall and she started hanging out with kids thatdidnt care if they went to school. The middle child started to isolate herselfand began to have nightmares about her parents dying. Surprisingly her gradesdidnt suffer. The youngest child cried at the drop of a hat, she just wantedher dad and couldnt understand why she didnt get to see him that often. Thethree children blamed their mother for everything and took all of theirmisplaced anger out on her. Because of Lillys financial dilemma, she was not able to afford she and thechildren counseling. Ron was becoming more and more delinquent in sendingalimony and child support for his family. Lilly was still trying to maintainbeing a stay at home mom although she realized the inevitable, she was notemotionally ready to go out in the work force. .u985c2e521a481bf3229da910b9d6a6c6 , .u985c2e521a481bf3229da910b9d6a6c6 .postImageUrl , .u985c2e521a481bf3229da910b9d6a6c6 .centered-text-area { min-height: 80px; position: relative; } .u985c2e521a481bf3229da910b9d6a6c6 , .u985c2e521a481bf3229da910b9d6a6c6:hover , .u985c2e521a481bf3229da910b9d6a6c6:visited , .u985c2e521a481bf3229da910b9d6a6c6:active { border:0!important; } .u985c2e521a481bf3229da910b9d6a6c6 .clearfix:after { content: ""; display: table; clear: both; } .u985c2e521a481bf3229da910b9d6a6c6 { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .u985c2e521a481bf3229da910b9d6a6c6:active , .u985c2e521a481bf3229da910b9d6a6c6:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .u985c2e521a481bf3229da910b9d6a6c6 .centered-text-area { width: 100%; position: relative ; } .u985c2e521a481bf3229da910b9d6a6c6 .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .u985c2e521a481bf3229da910b9d6a6c6 .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .u985c2e521a481bf3229da910b9d6a6c6 .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .u985c2e521a481bf3229da910b9d6a6c6:hover .ctaButton { background-color: #34495E!important; } .u985c2e521a481bf3229da910b9d6a6c6 .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .u985c2e521a481bf3229da910b9d6a6c6 .u985c2e521a481bf3229da910b9d6a6c6-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .u985c2e521a481bf3229da910b9d6a6c6:after { content: ""; display: block; clear: both; } READ: Essay about Missing Persons: The Media Bias to Report Only Pretty Blonde Girls EssayOne and one half years after the divorce, Lilly was forced to become apart ofthe working class single moms of the world, Lilly got a job as a first gradeteacher. This was an adjustmentfor the children, because they had depended on their mom for everything. Because Lilly was not able to be there for the children, Ron was forced to bemore responsible for the care of the children. Ron shared in the daily droppingoff and picking up the children. This also gave the children, the opportunity tospend extra time with their father, something that was missing in their life. Lilly and Ron began to work together with raising the children and the entirefamily started to receive counseling. The children began to accept the twohouseholds as well as their parents significant others. Lilly and Ron havelearned to work together in rasing their family although it is not always easy. The breakdown of a family affects the entire family in many ways that is notnoticed, but develops over a period of time. Children many times go through lifebelieving that there was something they did to cause the break up of theirparents, and always hope that their parents will get back together. Ronschildren felt neglected by him, unloved as well as feeling guilty about thereparents breakup. Because Lillys was not given an opportunity to work on theirproblems and improve communication, her self-esteem went completely down. Ronfelt bad, but was feeling very relieved that he made the decision to leave. Divorce can be liberating, depressing, frustrating, or traumatic to any personwho experiences it. Perhaps the most painful part on the process of divorce iswhen the children are involved and when they are made to choose sides. Ron andLilly minimized the trauma in their childrens lifes, by agreeing on where thechildren would live. Although the children experienced changes and went throughperiods of fear of not knowing what was going to happen. Today the childrenappear to be functioning very well and are doing well in school. If parentscant be caring, loving and respectful of each other, then they shouldnt staytogether. Children learn from their parents, how relationships should be conducted andwill handle their relationships as they see their parents. Since Ron and Lillysdivorce, their communication is better now then it was when they were married. The children witness their parents genuine concern for each another and mostimportantly for them. Ron, Lilly and the children appear to have taken the stepsfor survival during the process of the divorce, but as issues arise it isimportant that they are dealt with. It is important to think of the children when divorce takes place. Financesshould be resolved and if a parent should have to experience the lack offinances, it should not be the parent that has the children. If a childseconomic needs are being met, this may minimize the stress they experience whenone parent is absent. The important thing is not to change the childsstability, and lack of finances will cause an immediate change. Parents whethermarried or divorce, have a responsibility to secure a childs future, byproviding them with the emotional and economic support that is needed for themto become productive individuals of society. Children that come from divorceparents can be just as well rounded as children that come from married parents. This family appears to have adjusted to the change that was brought on by thedivorce. As long as the parents continue to work together, and do what is inthe best interest of the children, they will continue to survive. The girls arenow teenagers and their father has a close relationship with them. Contact withtheir father is very important at this age, because girls have a tendency toseek negative attention from boys. This is usually because they are trying tofill the emptiness from the lack of relationship with their father. I dont seethis happening, at least not for their fathers lack of attention. If there arelong term problems that do not surface now, and if it surfaces, it will do sowhen the children become adults. Hopefully, because of the manner in which theparents have handle the last five years, the children will be equipped to dealwith the problems through counseling. .uaf36d03a1039e99964f21bef89b08734 , .uaf36d03a1039e99964f21bef89b08734 .postImageUrl , .uaf36d03a1039e99964f21bef89b08734 .centered-text-area { min-height: 80px; position: relative; } .uaf36d03a1039e99964f21bef89b08734 , .uaf36d03a1039e99964f21bef89b08734:hover , .uaf36d03a1039e99964f21bef89b08734:visited , .uaf36d03a1039e99964f21bef89b08734:active { border:0!important; } .uaf36d03a1039e99964f21bef89b08734 .clearfix:after { content: ""; display: table; clear: both; } .uaf36d03a1039e99964f21bef89b08734 { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .uaf36d03a1039e99964f21bef89b08734:active , .uaf36d03a1039e99964f21bef89b08734:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .uaf36d03a1039e99964f21bef89b08734 .centered-text-area { width: 100%; position: relative ; } .uaf36d03a1039e99964f21bef89b08734 .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .uaf36d03a1039e99964f21bef89b08734 .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .uaf36d03a1039e99964f21bef89b08734 .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .uaf36d03a1039e99964f21bef89b08734:hover .ctaButton { background-color: #34495E!important; } .uaf36d03a1039e99964f21bef89b08734 .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .uaf36d03a1039e99964f21bef89b08734 .uaf36d03a1039e99964f21bef89b08734-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .uaf36d03a1039e99964f21bef89b08734:after { content: ""; display: block; clear: both; } READ: Double standard EssayMiscellaneous

Emerald Necklace Review Essay Example

Emerald Necklace Review Paper Essay on Emerald Necklace On a rainy October evening in 1786 at the door of the studio of the famous English painter Joshua Pope knocked mysterious stranger whose face hides a hood. Artist amazed at how the woman was at his home and even at such a late hour. His visitor starts talking and Joshua understands that they are familiar with, but remember who this woman is so, how and when they met Pope can not. The visitor is ready to part with a magnificent emerald necklace dragotsennostyuinstead she wanted the story of one wedding portrait, where the bride and groom are depicted. Asked the women to open the face, he realizes that she once was a beauty, but experienced suffering left a mark on her face. The visit of this lady brings confusion to the soul of the hero, because of the guest breathes something dark that can destroy the well-established his happy life. The artist realizes that it will be about the portrait, for which he has not paid, and that nearly cost him his life. And though the woman does not mention the name of the people, whose portrait he wrote twenty years ago, the master intuitively feels about what exactly the portrait in question. We will write a custom essay sample on Emerald Necklace Review specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Emerald Necklace Review specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Emerald Necklace Review specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Pope waives this generous gift as the Emerald Necklace, because remember how people it brought bad luck, but promises his belated visitor to write down everything that he knew about the crimes, unwilling to which he was, and then send those records to her. Lady leaves the house of the artist, and the Pope is taking in hand the pen, and immersed in the memories of twenty years ago. The book by Janet Gleeson Emerald Necklace is intriguing since the first proposals. Before us well-written historical mystery, the plot of which is centered on a necklace of emerald as previously called emerald. Just like the necklace that brings bad luck to the owner each made in the form of a snake, curled, detective yarn is also reminiscent of the tangle. The stated good, easy language the story is easy to read, but still attracts attention and keeps in suspense until the last pages of the novel. The author, herself, being an art historian specializing in the history of England of the eighteenth century, writes that what is well versed, probably this explains the fact that in the book so many interesting historical facts and a detailed description of the life and the lives of the characters. All this makes us, the readers, as it witnessed the events unfolding in the story. In addition, in the detective line, which forms the basis of the novel, very delicately woven and a love affair that makes empathize and sympathize with the heroes of the story. The writer managed to convey the spirit of the era when British art and science flourished, but at the same time to show that such vices as greed, jealousy and desire for revenge, the indispensable companion of man, whenever he or she lives. And love, loyalty and friendship can be as rare gift, as in the eighteenth century, and in our days. At the end of the book, we see that the wizard makes a noble gesture, sending along with his memoirs, and mysterious portrait, whose history so interested guests of the artist, hoping it would give her peace of mind.

20 Data Mining Project Topics for You to Research

20 Data Mining Project Topics for You to Research If you want to conduct a research project on data mining and are looking for facts and topics, then you’ve come to the right place. The previous guide 10 facts on data mining for an academic research project must have given you a comprehensive outlook on data mining and you can get further help by reading this guide which has 20 interesting topics. In fact, not only does this guide provide 20 topics, but also an essay on one them to make it easier for you to start your research work today. If you want the specifics on how to approach this academic genre then feel free to go to our guide. Data mining is a way to sample parts of a huge amount of data. These samples, further divided into variables, can then be used in mathematical calculations and algorithms. The algorithms make it possible to predict a pattern, which can then be utilized in thousands of applications. The purpose of data mining is to find patterns and this is the ethical line that needs to be kept in check. Here is a list of 20 topics which you can base your research project on: The Process of Anomaly Detection How is Dependency Modeling Performed? How is Representative-based Clustering Performed? Whats the need of Density-based Clustering? Association Rule Learning in Data Mining How Can Linear and Nonlinear Regression Analysis Be Made More Effective? Clustering through Graphical and Spectral Representation Why is Probabilistic Classification Necessary in Data Mining? What Are Bayesian Procedures and How Can They Be Used to Classify Unlabeled Points? Reliability of Naive Bayes Classifier Applications of Hierarchical Clustering Is Kernel Estimation a Reliable Classification Algorithm? What is a Decision Tree Classifier? Keeping Data Mining in The Constraints of Legality, Privacy and Ethics How Can Data Mining Help in The Growth of a Business? Using Data Mining Techniques to Analyze Supermarket Transaction Data Role of Subject-Based Data Mining in Reducing Terrorism Role of Data Mining in Condition Monitoring of High Voltage Electrical Equipment Using Data Mining to Perfect Expertise Finding Systems in Social Programs Role of Spatial Data Mining of Wireless Sensor Networks in Air Pollution Monitoring Our objective is to help your train of thought get a direction so you can stop procrastinating and start working on your project. You can chose a topic from the above mentioned list or you can integrate two or more and make an even more detailed research project. There is a tsunami of information available on the internet about each and every one of the above mentioned topics so research won’t be an issue. Sample Data Mining Project: Association Rule Learning in Data Mining In data mining, association rule learning is an extremely vital tool through which two previously unrelated variables can be related in a significantly large data pool. Through this method, strong rules are successfully discovered in databases. Professor Rakesh Agrawal used the concept of strong rules to establish a different set of association rules that highlighted similarities between products even in huge amounts of transaction data in supermarkets. If a log in the transaction data exists about a customer buying beer and potato chips, and if this is repeated by several other customers, we can safely establish the fact that the two products are connected. It is safe to assume that the next time a person buys beer, he or she will buy potato chips too. If a supermarket owner finds this out and puts the two products side by side, this assumption can turn into a fact, which will ultimately increase sales. This can also be used to design marketing campaigns. This mined data can help marketers put together two products in one picture to increase sales of both products. Market basket analysis is an actual study which is being implemented not only in the supermarket industry but in web usage mining, continuous production, bioinformatics and intrusion detection too. Association rule learning is slightly different from sequence mining because it doesn’t take the order of items in a transaction under consideration. Although used in many practical scenarios, association rule learning is not free of problems. One of the biggest issues with this method is that there is a significant chance of unusable or incorrect associations when an algorithm is going through massive numbers to locate items that seemed to be associated. These incorrect associations occur by chance, as the associations between the items simply come forth due to unforeseen repetitions in the data. If the number of items is in the thousands, and the algorithm is trying to find an association between two items, then statistically speaking, there are thousands and thousands of possibilities. In this case there is the concept of statistically sound associations, which is designed to help reduce the amount of error in association though a more carefully coded probability algorithm. There are some very famous algorithms designed over the years to create accurate association rules over the years. Although some famous algorithms exist such as Apriori, FP-Growth and Eclat, they can’t be expected to produce efficient results. In order to achieve specific and useful association results, one needs to go beyond the mining frequent item sets and create rules based on frequent item sets from a particular database. References Shmueli, G., Bruce, P. C., Patel, N. R. (2010). Data Mining For Business Intelligence: Concepts, Techniques, and Applications in Microsoft Office Excel ® with XLMiner ®, Second Edition. John Wiley Sons. Steinbach, M., Tan, P., Kumar, V. (2005). Data mining. Harlow: Addison-Wesley. Witten, I. H., Frank, E., Hall, M. A. (2011). Data mining: Practical machine learning tools and techniques. Burlington, MA: Morgan Kaufmann. Han, J., Kamber, M., Pei, J. (2011). Data mining: Concepts and techniques concepts and techniques. San Francisco: Morgan Kaufmann In. Aggarwal, C. C. (2015). Data Mining: The textbook. Cham: Springer. Russell, M. A. (2013). Mining the Social Web: Data Mining from Facebook, Twitter, and LinkedIn, Google , GitHub, and More (2nd Edition). OReilly Media. Provost, F. (2013). Data Science for Business: What You Need to Know about Data Mining and Data-Analytic Thinking.

Industry analysis of Manchester United Case Study

Industry analysis of Manchester United - Case Study Example Therefore, this industry has registered a growth in popularity, arising from the consumer demand for association with certain clubs, as well as the appetite for advertisers and media distribution entities to be associated with the most popular clubs (The Telegraph, n.p.). This has made the British football industry the biggest globally. The British football industry was developed in 1863, emanating from the need to bring the union of public school football and the football played by universities in Britain (Sport England, n.p.). Ever since, the industry has grown to unprecedented levels, emerging as the most famous football industry in the world, with a fan base that is spread globally. The official British football league was formally established in 1888, but the current Premier League was established in 1992, after the twenty big clubs deserted the football league to join EPL (Delloitte, 2). This breakthrough has made the clubs more competitive and profitable, thus accelerating the British football Industry to the current giant industry it is today in the world. The bubble burst that affected the world in early 2000s saw a major financial crisis face the industry, due to the inability of many clubs, but only in the football league, become unable to finance their spending. Nevertheless, the big twenty clubs in the Premier League were not spared the financial problems, but they have since made major financial recoveries over time. The sport industry has emerged as one of the top industries in England, owing to its contribution to the English economy, and is currently ranked among the top fifteen industries that contributed 2% of the total English economy according to the 2012 statistics, with the British football industry alone contributing  £2.3 billion (Sport England, n.p.). Currently, the British football industry has

G&S Research Paper Example | Topics and Well Written Essays - 1000 words

G&S - Research Paper Example This procedure for DNA forensic always begins at the scene where the crime has take place. Biological samples like saliva stain, blood remains, and semen samples are identified, collected, and transported to the laboratory for forensic laboratory analysis. There are instances where the DNA technique cannot be useful unless the investigators have found sufficient historical information on the suspect in check when a match is made in state or either national database (Balding, 2005). Once the lab analysis is complete with suspect’s analysis, the report is made available to investigators who must have some knowledge about the suspect in question. This is the situation where the law enforcer’s gets most challenging situation, as the DNA for the profile for the real offender may not be available for comparison with the materials recovered in the crime scene. Besides they have to ensure that they create an environment that ensures that, they obtain information from the suspects in a way that respect the privacy of those individuals (Butler, 2005). The federal law gives the FBI security sector the responsibility to administer and give support to the national DNA index system. Therefore, various states have enacted laws that ensure the DNA of convicted criminals is collected on specific crimes. This has made many states improve and expand the mandates involving the collection to include and retention of the offenders DNA’s samples after arrest (Butler, 2005). There has been gradual improvement forensic science of DNA as compared to traditional way where most DNA forensic was entirely based on scanning the fingerprints of the suspects that are left at the crime scenes. This traditional method entailed manual identification of fingerprints in absence of the suspects (Butler, 2012). This method was referee as cold searching. The method was slow, challenging and was not practical.

HUMAN RESOURCE DEVELOPMENT Essay Example | Topics and Well Written Essays - 1500 words

HUMAN RESOURCE DEVELOPMENT - Essay Example He stated every company should concentrate on External marketing directed towards the customers and Internal marketing directed towards the employees (Kotler, 13). While external marketing takes care of processes like advertising and selling internal marketing takes care of "hiring, training and motivating able employees who want to serve customers well" says Kotler. Internal marketing should precede external marketing to give hundred percent satisfactions to the customers. It is up to the human resource development team to make the internal marketing successful. The concept of Marketing as management gained more popularity after the "Introduction to Market-based management" booklet was released. The booklet highlights instilling ethics, self-dedication and incentive based motivation to employees is important for smooth operation of any organization. The HR department should act like a friend, philosopher and guide in creating an open, friendly atmosphere for the employees. Every emp loyee should be motivated to work towards a common mission individually and as a team. An accountant in a firm should have a feeling that his accurate and fast billing capacities plays a key role in customer satisfaction, while the domestic worker should believe a cleaner environment helps employees works better and improves the image of the company. An "invisible hand" should drive every person in the company towards selling the product or creating the best product, not the marketing department personnel alone. Marketing and Stakeholders Analyzing from a Human resource point of view, stakeholder is any person who can exert control over the HR department and alter their activities. It can be the boss or the employee union or the customer who forces HR to train the employees better. The stakeholders outside the organization are the buyers while the ones inside the company are the value creators for the stake holder’s money (Reed, 1983). Some stakeholders act as barriers while others support productive activities. Integrated marketing concept helps an organization to identify the needs of all classes of stakeholders quite easily and efficiently. Deloitte – a major Consulting Firm Deloitte Consulting is a major auditing firm transacting over $31.3 billion annually. Their Human Resource system is studied by every management student in the world. It manages over 193000 employees and is spread over 150 countries (Khurana, 2010). The auditing firm has a versatile client list. They train each of their employees with utmost concern to serve the best clients, their marketing department lures in with much effort. Deloitte’s future plan Deloitte is next to Pricewaterhousecoopers in terms of money transaction. Their aim is to reach the number one position in the market within a short period of time. They already have the largest client list in the world. They provide auditing and taxation assistance services to several huge companies in the world. They look forward to expand their companies consulting services in several growing eastern economies like China, Korea and southern countries like Brazil. Traditional companies operated in a pyramid model with the CEO on top. The modern companies use an inverted pyramid marketing strategy, where the customer is at the top, the front end sellers dealing with them directly is next, the middle managers are placed third and the CEO is placed last whose job is to give the necessary resources and

Customer Relationship Management of Lloyds Banking

Customer Relationship Management of Lloyds Banking 1.0 INTRODUCTION This chapter provides the brief introduction of research. Furthermore, it also discusses the aims, objectives of the research questions and scope of the study. 1.1 TOPIC OF THE RESEARCH Customer Relationship Management of Lloyds Banking Group PLC; A Critical Evaluation 1.2 INTRODUCTION TO RESEARCH Peter Drucker said, â€Å"The purpose of a business is to create customers†. Customer Relationship Management can be the single strongest weapon we have as manage to ensure that customers become and remain loyal. Customer Relationship Management, or CRM, is an essential part of modern business management. CRM concerns the relation between the organisation and its customers. Customers are the lifeblood of any company be it a global corporation with thousands of employees and a multi-billion turnover, or a sole trader with a handful of regular customers. CRM is the same in principle for both examples. Globalization and technology improvements have pushed companies into hard competition. In this new era organisations are targeting on managing customer relationships, mainly customer satisfaction, in order to maximize revenues (Constantinos 2003). Today, marketing is not just developing, delivering and selling; it is shifting towards developing and maintaining equally long term relationships with customers (Buttle, 1996). This new business values is called relationship marketing (RM), which has involved significant interest both from marketing academics and practitioners (Gronroos, 1994). The Greek philosopher, Epictetus said that â€Å"what concern me is not the way things are, but rather the way people think things are† (Szwarch, 2005, p.3). The concepts of consumer satisfaction were depending on the thinking of consumer. Research suggests that customer satisfaction, basic concept of relationship marketing, is important in achieving and retaining competitive advantage. Research studies have discovered that retaining current customers is much less expensive than attracting new customers (Desatnick, 1988; Stone et al., 1996; Bitran and Mondschein, 1997; Chattopadhyay, 2001; Massey et al., 2001). The best way to retain customers is to keep them satisfied, a number of studies have shown that customer satisfaction can guide to brand loyalty, repurchases intention and repeat sales (Day, 1984; Swan and Oliver, 1989; Oliver, 1999). Customer retention, in turn, seems to be related to profitability (Oliver, 1999). Relationship marketing is becoming significant in financial services (Zineldin, 1995). If a bank develops and sustains a solid relationship with its customers, its competitors cannot easily replace them and so this relationship provides for a continued competitive advantage (Gilbert, 2003). Moriarty et al. (1983) has suggested relationship concept in the banking sector which states that banks can increase their profits by maximising the profitability of the total customer relationship over time, instead of looking for to get more profit from any single transaction. Perrien et al. (1992) observed severe competitive pressures that forces financial institution to restructure their marketing strategies by developing into long-term relationship with customers. And banking industry purely related to financial services, which needs to create the trust among the people. This research is exploratory in nature and design. The data which is collected is going to be mostly primary data collected from the relevant persons within the bank. The data has gathered from the face to face interviews with the help of structured and semi-structured questionnaire with those persons. The above describe interviews has last 40 (fourty) to 45 (fourty five) minutes (approx). On the other hand the researcher has decided to collect primary data from random interviews of Lloyds Banking Groups customers. Sample size is around 200 customers and of structured questionnaire. But of course this research paper has relied on reviewing the various secondary data available from various researches such as books, magazines, website, previous research and publication etc. The collected data has been analysed by graphs, table and pi chart drawn from Microsoft excel. 1.3 AIM OF THE RESEARCH The aim of the research is to study why CRM is important in bank, how the CRM works in banks and also the effectiveness of Lloyds Banking Group in obtaining long term customer relationship, customer loyalty, and customer satisfaction by the use of CRM. And also suggest feasible recommendations to Lloyds Banking Group to increase the customer satisfaction and market share by the effective use of CRM. 1.4 OBJECTIVES OF THE RESEARCH The followings are the objectives of this research; To study how critically practised in Lloyds Banking Group Analysis the data mining process of Lloyds Banking Group To find out how the bank segments their customers To analysis how the bank retaining their customers To find out how does the bank measure customer Life Time Value To verify the relationship between the customers and the Lloyds Banking Group 1.5 SCOPE OF THE STUDY The scope of the study and research work has limited to Lloyds Banking Group only. This chosen level of aspects has stayed at large in the study so that it can be studied well and analyzed thoroughly to get a deeper understanding. Trying to cover too much ground may lead to a very superficial and confused analysis and may involve long time duration to complete the project work or report. Therefore a specified and narrow down approach with Lloyds Banking Group and an evaluation of its success has comprised with the researc 2.0 LITERATURE REVIEW This chapter contains a review of literature relevant to the research. This literature review deals with, about CRM, the history and goals of an integrated banking CRM, the technological factor of CRM, the process cycle in banks, data warehouse technology, data mining process, how to analysis the data, customer segmentation process, communication strategies of bank to the customers etc. 2.1 CUSTOMER RELATIONSIP MANAGEMENT Existing research states that ‘relationships are the base to the successful development and edition of new business viewpoint, though business have taken care of relationships with their customers for many centuries (Gronroos, 1994). Sheth and Parvathiyar, (1995) said that relationships demand much more than mere transactions. Rather, they symbolize strategic and tactical issues based on a new philosophical move that geared in the direction of long-term organisation survival. According to Storbacka, (1994) relationship marketing got popular in 1990s but it has a long history under different names. In its starting, one-to-one marketing appeared in the mid 1990s, which transformed into Customer Relationship Management. Parvatiyar and Sheth gave a static definition of CRM. â€Å"Customer Relationship Management is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer† (Parvatiyar and Sheth 2000, p.6) â€Å"What criteria determine who â€Å"How can we acquire this customer will be our most profitable in the most efficient and effective customers?† way?† â€Å"How can we increase the â€Å"How can we keep this customer loyalty and the profitability for as long as possible?† Of this customer?† 2.2 THE HISTORY AND GOALS OF AN INTEGRATED BANKING CRM According to Puccinelli (1999) the financial services industry as entering a new era where personal attention is decreasing because the institutions are using technology to replace human contact in many application areas. Sherif, 2002 advocated that, now global changes brought new trends, directions and new ways of doing business, which also brought new challenges and opportunities to financial institutions. In order to complete with newly increasing competitive pressures, financial institutions must recognize the need of balancing their performance by achieving their strategic goals and meeting continues volatile customer needs requirements. Different ways must be analyzed to meet customer needs. Foss said that banks are highly focusing on CRM for the last five years that is expected to continue. According to Peter (1998) and Chablo (1999) the main goals of an effective integrated CRM solution in the banking sector are to enable financial institutes to; a) Widen customer relationship through acquiring new customers, identifying and targeting new segments and expanding in new markets. b) Lengthen the existing relationship developing longer term relationships, increasing perceived value of products and introducing new products and c) Deepen the relationship with customers initiating the cross selling and up selling opportunities, understanding the propensity of different customer segments to purchase and increase sales. The implementation if CRM system in a bank helps the business organisation to obtain a complete picture of their existing customers, design both customer-oriented and market-driven financial products and services, as well as implement extensive and reliable financial marketing research and efficient campaigns, to achieve and enhance customer loyalty and profitability. The above goals can be achieved through the seamless integration of information technology solutions and business objectives at every process of the bank business that affects the customer. 2.3 THE PHASES OF CRM The main phases of CRM are as follows; 1. Customer selection or Segmentation According to Dave Chaffey (2009), customer selection defining the types of customers that a company will market to. It means identifying different groups of customers for which to develop offerings and to target during acquisition, retention and extension. Different ways of segmenting customers by value and by their detailed lifecycle with the customer are reviewed. Many companies are now only proactively marketing to favoured customers. Seth Godin (1999), says â€Å"Focus on share of customer, not market share fire 70 per cent customers and watch your profits go up!† According to Efraim Turban (2008), the most sophisticated segmentation and targeting schemes for extension of customers are often used by banks, which have full customer information and acquire history data as they search for to boost Customer Lifetime Value (CLV) through encouraging increased use of products overtime. The segmentation approach used by banks is based on five main basics which in result are covered on top of each other. The amount of options used, and therefore the complexity of approach, will depend on resources obtainable, opportunities, capabilities and technology afforded by catalog. i. Identify customer lifecycle groups When guests use online services then they basically pass those seven or more stages. The organisations have clear these segments and establish the CRM infrastructure to categories customers in this manner; then they deliver focused messages, whichever by modified web messaging or by e-mails that are triggered routinely because of various rules. First-time guests recognized by a cookie placed on their PC. When guests registered, they are tracked through the residual stages. The customers who have purchased one or more products are one particular important group. The key challenge is for a company to encourage a customer to shift from the first product to the second and then go on. Explicit offers can be try to push customer for further products. In the same way, when customers turn into an inactive then the customer required follow-up. ii. Identify customer profit characteristics This is a conventional segmentation which is based on the nature of customer. For Business 2 Business Companies it includes sex, age and geography. It includes volume of the organisation and the type of sector or application, the organisation operates in. iii. Identify behaviour in response and purchase As shown in 2.2 through analysis of data base when customer progress through the lifecycle, company is capable to build up a detail reaction and buy history which judges the details of frequency, recency, group of product buy and monetary value. This approach is known as ‘RFM (Recency, Frequency, Monetary value) analysis. iv. Identify multi-channel behaviour In spite of of the eagerness of the company for online channels, various customers are chosen for using online channels and others customers are chosen conventional channels. This is, to an extent, be indicated by RFM and response examination since customers with a preference for an online channel is more reactive and make more use online. Customer who likes online channels is focused mostly by online communications such as e-mail, but when customer like conventional channels is focused by conventional communications such as direct mail or phone. This is known as ‘right-channelling. v. Tone and style preference In a same way to channel liking, customers are respond in their own way to various types of message. Some customers like rational application, in that time a detailed e-mail may work best. On the other hand some customers are preferred an emotional appeal. Companies are test for this in customers or conclude it using profit description and response performance and then expand various inventive treatments consequently. 2. Customer acquisition Processes used to add new customer. According to Turban (2008), customer acquisition refers to marketing activities intended to form relationship with new customers while reducing acquisition cost and targeting high-value customers. Service value and selecting the right path for various customers are essential at this stage and during the lifecycle. The conventional manner to customer acquisition include a marketing manager developing a blend of mass marketing (billboards, magazine advertisements etc.) and direct marketing (mail, telephone, etc.) campaigns based on their knowledge of the particular customer base that was being focussed. Marketing campaign trying to pressure new customers to buy a particular type of diapers, the mass marketing ads might be determined in parenting magazines. The advertisements could also be positioned in more conventional publications whose readership demographics were alike to those of new parents. Customer acquisition is comparatively similar to mass marketing. A marketing manager selects the demographics that they are involved in and after that works with a data vendor to obtain lists of buyers who meet those features. The data vendors have large database holding millions of eventual customers that can be segment based on explicit demographic criteria. The idea of â€Å"similar demographics† has conventionally been an art rather than a science. Usually there are not hard-and-fast systems about whether two groups of buyers share the similar features. Most of the segmentation that took place in conventional direct marketing involves hunches on the division of the marketing professional. 3. Customer retention Dafe Chaffey 2009 said that customer retention refers to the marketing actions taken by a company to keep its current customers. Identifying applicable offerings based on their personal needs and complete position in the customer lifecycle (e.g. purchase value or number) is key. Customer retention strategy aims to keep a high percentage of valuable customers and a customer development strategy aims to boost the value of those retained customer to the organisation. Customer retention is based on customer loyalty. And customer loyalty is the point to which a customer will continue with a specific brand or vendor. Customer acquisition to retain and extend create long-term customer relationship. We need to calculate customer satisfaction, as satisfaction drives loyalty and loyalty drives profitability. This relationship is exposed below; The marketers aim is to push customers up the curve towards the affection zone. But the majority are not in that zone. Marketers must understand to achieve retention,why customers defers or are indifferent. 4. Customer extension This technique is encouraging customers to increase their involvement with a company. According to Turban 2008, customer extension is increasing the range of products that a customer buys from an organisation. Sometime it is referred ‘customer development. Increasing the lifetime value (CLV) of a customer is the main objective of customer extension by encouraging cross-sell. For example a customer of Egg credit card may be offered the loan or a deposit account. There are many of customer extension technique for CRM as follows; Re-sell: same type of products to existing customers-particular vital in some Business 2 Business background as re-buys or modified re-buys. Cross-sell: sell extra products which may be closely related to the original buy. Up-sell: this is mean, selling more expensive products. Reactivation: Customers who have purchased for some time or have lapsed can be encouraged to buy again. Referrals: generating sells from recommendation from existing customers. 2.4 CUSTOMER LIFETIME VALUE MODELLING Customer Lifetime Value (CLV) is also an important theory and practise of CRM. But the calculation of CLV is not straightforward. There are so many company, they do not calculate it. According to Dave Chaffey (2009) â€Å"Lifetime value is the total net benefits that a customer or group of customers will provide a company over their total relationship with the company†. CLV is based on estimating the income and costs related with each customer over a phase of time and then calculating the net present value in present monetary terms using a discount rate value applied over the stage. Efraim Turban (2006) said there is various scale of complexity in calculating LTC. Those are exposed in 2.6. Option 1 is a realistic way or estimated proxy for future LTV, but the true LTV is the future value of the customer at individual level. CLV modelling at a segment level 4 is crucial within marketing since it answers the question; How much can I afford to invest in acquiring a new customer? Lifetime value analysis helps marketers to: Create the true value of a companys customer base Recognize and compare crucial target segment Calculate the effectiveness of another customer retention strategy Plan and calculate investment in customer acquisition programmes Make decisions about product and offers 2.7 gives an example of how LTV can be used to develop a CRM strategy for different customer groups. There are 4 (four) main types of customers are indicated by their present and future value as bronze, silver, gold and platinum. Separate customers groupings (circles) are recognized according to their current value (as indicated by current profitability) and future value as indicated by CLV calculation. Every group will have a customer segmentation based on their demographics. Therefore this is used for customer selection. Within the four main value groupings, there are various strategies are developed for various customer groups. Few bronze customers such as group A and B practically do not have development potential and are usually unprofitable, therefore the objective is to reduce costs in communications and if they do not stay as customers this is acceptable. Some bronze customers like group C may have potential for growth; therefore for group C the strategy is to extend their purchases. Silver customers are focused with customer extension offer and gold customers are extended. Platinum customers are the best customers; therefore the communication is very important with these customers. 2.5 THE TECHNOLOGICAL FACTORS OF CRM According to Davenport and Short, (1990); Porter, (1987) ‘information technology is an enabler to thoroughly redesign business process to achieve improvements in organisational performance. ‘Information Technology help helps a business process by facilitating changes to job practices and establishing new techniques to link a customer with organisations, suppliers and stakeholders (Hammer and Champy, 1993). Eckerson and Watson (2000) advocated that ‘CRM take full advantage of technology to collect and analyze data on customer patters, expand predictive models, interpret customer behaviour, proper respond with communications, and deliver product and service to individual customers. By using technology a company can create a 360 degree view of customers to find out from past interactions to optimize future ones. Peppard (2000) said that ‘the leading factors in CRM development is improvement in network infrastructure, client/server computing, and business intelligence applications. CRM collect, store, maintain and distribute customer knowledge all over the organisation. The effectual management of information has a vital role to play in CRM. In the case of calculating customer lifetime value, consolidated view, product tailoring and service innovation, the information is essential. Along with data warehouses, enterprise resource planning (ERP) system and the internet are the central infrastructures to CRM applications. Fickel (1999) said ‘CRM applications link front office (e.g. marketing, sales and customer service) and back office (e.g. financial, logistics, operations and human resources) functions with the companys customer touch point. A companys touch point is â€Å"all of the communication, human and physical interactions your customers experience during their relationship lifecycle with your organisation. Whether an ad, Web site, sales person, store or office, touch points are important because customers from perceptions of your organisation and brand based on their cumulative experiences† (Source; http://www.imediaconnection.com/content/4508.imc at 16/10/2009 on 15:25) According to Eckerson and Watson (2000), ‘CRM integrated touch points is something like a common view of the customer. A separate information systems controlled these touch points. 2.8 demonstrates the relationship between customer touch point with back and front office operations Peppers and Rogres, (1999) said ‘In many companies, CRM is just a technology solution that extends divide databases and sales force automation tools to link sales and marketing functions in order to develop targeting efforts. On the other hand some organisations consider CRM as a tool that is exclusively designed for one-to-one relationship. According to Goldenberg (2000) ‘CRM is not just a technology applications for sales, marketing and service, but when CRM fully and successfully implemented, customer-driven, a cross-functional, technology-integrated business process management strategy that improves relationships and encompasses the whole organisation. 2.6 DATA WAREHOUSE TECHNOLOGY According to Watson (2000) ‘data warehouse is a tools of information technology management that helps business decision makers to instant access of information of customer data throughout the organisation by combining all database and operational systems like sales and transaction, human resource, inventory, purchasing, financial and marketing system. Data warehouse pull out, clean, convert and manage large volumes of data from various systems and creating a historical record of all customer. Data warehousing technology is the most crucial part of CRM because it makes CRM possible. Shepard et al. (1998) said ‘a better understanding of customer behaviour is possible because data warehousing technology consolidates correlates and convert customer data into customer intelligence. Understanding of customers and their purchase patterns can improve information related to customer service interactions, billing and account status, back orders, product returns, product shipment, and internal operating cost. The capacity of a data warehouse to store hundreds and thousands of gigabytes of data make an analysis feasible as well as immediate. Organisational benefits with a data warehouse are as follows; exact and faster access of information bad and duplicate data eliminate by quality data and filtering customer profiling and retention modelling it calculate total present value and estimate future value of every customer it gives detail report 2.7 DATA MINING TECHNOLOGY Peppers and Rogres, (1999) said that ‘the first analytical step of data mining is to describe the data. Data mining summarize its statistical attributes like standard deviations and means, visually review it by use of charts and graphs and distributes the value of the field in our data. But alone data description can not provide an action plan. We have to build a predictive model based on patterns determined from known results and after that we have to test the model on result outside the original sample. An ideal model should never be confused with reality, but it is useful guide to understanding our businesses. According to Eckerson and Watson (2000) ‘we can use data mining for both classification and regression problems. In first problem we can predict what type something will fall into. In second problems we are predicting a number like probability that a person will respond to an offer. In CRM process, data mining is often used to allocate a score to a particular customer. Data mining is also often using to recognize a set of characteristics, which is called profile. Data mining segments customers in to groups with similar behaviour like purchasing a particular product. 2.8 THE CRM PROCESS CYCLE IN BANKS Pound (2000) said that exploration and alteration process should be done by the banks on basis of customer information captured; this shows the full value of CRM initiatives. Banks set up a closed CRM cycle with the help of an integrated CRM solution, which composed of a set of continuous iterative process. It manages the whole customer related process for bank, analysing customer profile, customer data and life time value, which is helping to making marketing decision and optimizing the execution of marketing campaigns, customer service strategies and sales strategies across various channels during the bank. According to Professor Constantin Zopounidis (2002) CRM process cycle is based on a generic business view. It presents a continuous improvement of value between customers and banks across touch points. The main stages are as follows; Customer data collection Customer data analysis Marketing strategy and action programs Back-office Data External Data Touch-Point Data Pound 2000 said that ‘recent banking data sources are extremely heterogeneous. Geographic information is dispersed due to continual acquisitions, mergers and reorganizations. For example a bank might use web site, ATMs, e-mail, sales, call centres and marketing automation applications that must be integrated in a unified environment of CRM banking. An effective multi-channels customer interface will not be possible without a centrally integrated warehouse driving the entire CRM process cycle. This should be update real time. The historical data should be recorded by it, which is used to create propensity models and customer life time value models to recognize past behaviour and action in order to take future marketing strategy. 2.9 CUSTOMER DATA COLLECTION Kristin Anderson Carol Kerr (2002), said that in banking transaction system data such as (e.g. Checking, Credit, Savings) are frequently organised around accounts, channels, products and other alike transactional concepts. This limits the bank ability on identifying the total relationship and unique customers. An Integrated CRM is a major goal it consolidates these â€Å"information islands† and separate solution, which forms an open cross-bank system from all executives, business area department officers and branch employees, shares the identical customer information. Integrated banking CRM structure can be obtained from this necessary basis of data supply. Operation (contact) sources: Chou, Chou 2000, said the customer communication touch-point (ATM, Branch, Call-Centre, Internet-Banking, Mobile banking, personal contact, etc.) Internal sources: Professor Constantion Zopounidis (2000) said internal sources that are the available information island, data bases and product oriented systems from other banks such as (Cards, Deposits, Investments, and loans etc.), Marketing campaign response, meta-data analysis and reliable data mining results. External Sources: Professor Constanin Zopounidis 2002, said marketing researches that of external sources, infomediaries etc. Providing geo-demographic, psycho-graphic data and lifestyle, these can help to improve customer images 2.11 CUSTOMER DATA ANALYSIS Heygate (1998), said Simple and sophisticated data analysis techniques are required for deriving the valuable customer insight from the data collected in a central customer warehouse. More advance data analytics includes OLAP (Online Analytical Processing) mining techniques and tools, these extracts applicable patterns or trends in the data. According to Lawer (2000), key incorporated customer management insights provided by customer data analysis are customer segmentation/differentiation, concentration and distribution of customers value; share of purchases/profits, analysis of strategies that widen/lengthen/deepen customer relationship. Hawkes 2000, advocated customer data analysis enables the recognition of customers profit and customers preferences for definite bank product and services, indicates the most suitable channels to reach the customers, and assesses the profitability and life time value of every personality. Additionally, Delto 1998 said that the future manners of the consumers can be predicted by analysing their past behaviour. Customer statistics, profit and segmentation are the main amount produced of the analysis stage feeding the marketing strategy planning and completing process. Having easily accessible information to marketing makes the difference between a winning campaign and a failure. 2.12 MARKETING STRATEGY AND PROGRAMES Kristin Anderson and Carol Kerr 2002 advocated captured results and data of customer analysis support marketers to route marketing messages, processes and strategies. True values of data of Lloyd TSB are discovered by tools and process for marketing decision making, marketing decision making and CRM initiatives and campaign are deployed from converted information to customer knowledge. Goal of marketing automation within CRM are which personalise and optimizes each customer contact from planning, execution, monitoring marketing strategies and action programmes. Bryan Foss 2003 said it is critical for bank CRM not only to extract their data source to uncover patterns and insight but also to operationalise the system through the bank performance to turn the customer knowledge into importance creating achievement. Merlin Stone 2003 advocated the grades from advertising and CRM activities and strategies continue the process knowledge acquisition enhancing the on-going assessment of marketing data intelligence, closing the feed-back loop. Hence, the final element of CRM process cycle is the valuation of the results of campaign driven by marketing data intelligence. It is crucial to measure performance and feed result back into the centre customer data warehouse, in order to convey Customer Relationship Management of Lloyds Banking Customer Relationship Management of Lloyds Banking 1.0 INTRODUCTION This chapter provides the brief introduction of research. Furthermore, it also discusses the aims, objectives of the research questions and scope of the study. 1.1 TOPIC OF THE RESEARCH Customer Relationship Management of Lloyds Banking Group PLC; A Critical Evaluation 1.2 INTRODUCTION TO RESEARCH Peter Drucker said, â€Å"The purpose of a business is to create customers†. Customer Relationship Management can be the single strongest weapon we have as manage to ensure that customers become and remain loyal. Customer Relationship Management, or CRM, is an essential part of modern business management. CRM concerns the relation between the organisation and its customers. Customers are the lifeblood of any company be it a global corporation with thousands of employees and a multi-billion turnover, or a sole trader with a handful of regular customers. CRM is the same in principle for both examples. Globalization and technology improvements have pushed companies into hard competition. In this new era organisations are targeting on managing customer relationships, mainly customer satisfaction, in order to maximize revenues (Constantinos 2003). Today, marketing is not just developing, delivering and selling; it is shifting towards developing and maintaining equally long term relationships with customers (Buttle, 1996). This new business values is called relationship marketing (RM), which has involved significant interest both from marketing academics and practitioners (Gronroos, 1994). The Greek philosopher, Epictetus said that â€Å"what concern me is not the way things are, but rather the way people think things are† (Szwarch, 2005, p.3). The concepts of consumer satisfaction were depending on the thinking of consumer. Research suggests that customer satisfaction, basic concept of relationship marketing, is important in achieving and retaining competitive advantage. Research studies have discovered that retaining current customers is much less expensive than attracting new customers (Desatnick, 1988; Stone et al., 1996; Bitran and Mondschein, 1997; Chattopadhyay, 2001; Massey et al., 2001). The best way to retain customers is to keep them satisfied, a number of studies have shown that customer satisfaction can guide to brand loyalty, repurchases intention and repeat sales (Day, 1984; Swan and Oliver, 1989; Oliver, 1999). Customer retention, in turn, seems to be related to profitability (Oliver, 1999). Relationship marketing is becoming significant in financial services (Zineldin, 1995). If a bank develops and sustains a solid relationship with its customers, its competitors cannot easily replace them and so this relationship provides for a continued competitive advantage (Gilbert, 2003). Moriarty et al. (1983) has suggested relationship concept in the banking sector which states that banks can increase their profits by maximising the profitability of the total customer relationship over time, instead of looking for to get more profit from any single transaction. Perrien et al. (1992) observed severe competitive pressures that forces financial institution to restructure their marketing strategies by developing into long-term relationship with customers. And banking industry purely related to financial services, which needs to create the trust among the people. This research is exploratory in nature and design. The data which is collected is going to be mostly primary data collected from the relevant persons within the bank. The data has gathered from the face to face interviews with the help of structured and semi-structured questionnaire with those persons. The above describe interviews has last 40 (fourty) to 45 (fourty five) minutes (approx). On the other hand the researcher has decided to collect primary data from random interviews of Lloyds Banking Groups customers. Sample size is around 200 customers and of structured questionnaire. But of course this research paper has relied on reviewing the various secondary data available from various researches such as books, magazines, website, previous research and publication etc. The collected data has been analysed by graphs, table and pi chart drawn from Microsoft excel. 1.3 AIM OF THE RESEARCH The aim of the research is to study why CRM is important in bank, how the CRM works in banks and also the effectiveness of Lloyds Banking Group in obtaining long term customer relationship, customer loyalty, and customer satisfaction by the use of CRM. And also suggest feasible recommendations to Lloyds Banking Group to increase the customer satisfaction and market share by the effective use of CRM. 1.4 OBJECTIVES OF THE RESEARCH The followings are the objectives of this research; To study how critically practised in Lloyds Banking Group Analysis the data mining process of Lloyds Banking Group To find out how the bank segments their customers To analysis how the bank retaining their customers To find out how does the bank measure customer Life Time Value To verify the relationship between the customers and the Lloyds Banking Group 1.5 SCOPE OF THE STUDY The scope of the study and research work has limited to Lloyds Banking Group only. This chosen level of aspects has stayed at large in the study so that it can be studied well and analyzed thoroughly to get a deeper understanding. Trying to cover too much ground may lead to a very superficial and confused analysis and may involve long time duration to complete the project work or report. Therefore a specified and narrow down approach with Lloyds Banking Group and an evaluation of its success has comprised with the researc 2.0 LITERATURE REVIEW This chapter contains a review of literature relevant to the research. This literature review deals with, about CRM, the history and goals of an integrated banking CRM, the technological factor of CRM, the process cycle in banks, data warehouse technology, data mining process, how to analysis the data, customer segmentation process, communication strategies of bank to the customers etc. 2.1 CUSTOMER RELATIONSIP MANAGEMENT Existing research states that ‘relationships are the base to the successful development and edition of new business viewpoint, though business have taken care of relationships with their customers for many centuries (Gronroos, 1994). Sheth and Parvathiyar, (1995) said that relationships demand much more than mere transactions. Rather, they symbolize strategic and tactical issues based on a new philosophical move that geared in the direction of long-term organisation survival. According to Storbacka, (1994) relationship marketing got popular in 1990s but it has a long history under different names. In its starting, one-to-one marketing appeared in the mid 1990s, which transformed into Customer Relationship Management. Parvatiyar and Sheth gave a static definition of CRM. â€Å"Customer Relationship Management is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer† (Parvatiyar and Sheth 2000, p.6) â€Å"What criteria determine who â€Å"How can we acquire this customer will be our most profitable in the most efficient and effective customers?† way?† â€Å"How can we increase the â€Å"How can we keep this customer loyalty and the profitability for as long as possible?† Of this customer?† 2.2 THE HISTORY AND GOALS OF AN INTEGRATED BANKING CRM According to Puccinelli (1999) the financial services industry as entering a new era where personal attention is decreasing because the institutions are using technology to replace human contact in many application areas. Sherif, 2002 advocated that, now global changes brought new trends, directions and new ways of doing business, which also brought new challenges and opportunities to financial institutions. In order to complete with newly increasing competitive pressures, financial institutions must recognize the need of balancing their performance by achieving their strategic goals and meeting continues volatile customer needs requirements. Different ways must be analyzed to meet customer needs. Foss said that banks are highly focusing on CRM for the last five years that is expected to continue. According to Peter (1998) and Chablo (1999) the main goals of an effective integrated CRM solution in the banking sector are to enable financial institutes to; a) Widen customer relationship through acquiring new customers, identifying and targeting new segments and expanding in new markets. b) Lengthen the existing relationship developing longer term relationships, increasing perceived value of products and introducing new products and c) Deepen the relationship with customers initiating the cross selling and up selling opportunities, understanding the propensity of different customer segments to purchase and increase sales. The implementation if CRM system in a bank helps the business organisation to obtain a complete picture of their existing customers, design both customer-oriented and market-driven financial products and services, as well as implement extensive and reliable financial marketing research and efficient campaigns, to achieve and enhance customer loyalty and profitability. The above goals can be achieved through the seamless integration of information technology solutions and business objectives at every process of the bank business that affects the customer. 2.3 THE PHASES OF CRM The main phases of CRM are as follows; 1. Customer selection or Segmentation According to Dave Chaffey (2009), customer selection defining the types of customers that a company will market to. It means identifying different groups of customers for which to develop offerings and to target during acquisition, retention and extension. Different ways of segmenting customers by value and by their detailed lifecycle with the customer are reviewed. Many companies are now only proactively marketing to favoured customers. Seth Godin (1999), says â€Å"Focus on share of customer, not market share fire 70 per cent customers and watch your profits go up!† According to Efraim Turban (2008), the most sophisticated segmentation and targeting schemes for extension of customers are often used by banks, which have full customer information and acquire history data as they search for to boost Customer Lifetime Value (CLV) through encouraging increased use of products overtime. The segmentation approach used by banks is based on five main basics which in result are covered on top of each other. The amount of options used, and therefore the complexity of approach, will depend on resources obtainable, opportunities, capabilities and technology afforded by catalog. i. Identify customer lifecycle groups When guests use online services then they basically pass those seven or more stages. The organisations have clear these segments and establish the CRM infrastructure to categories customers in this manner; then they deliver focused messages, whichever by modified web messaging or by e-mails that are triggered routinely because of various rules. First-time guests recognized by a cookie placed on their PC. When guests registered, they are tracked through the residual stages. The customers who have purchased one or more products are one particular important group. The key challenge is for a company to encourage a customer to shift from the first product to the second and then go on. Explicit offers can be try to push customer for further products. In the same way, when customers turn into an inactive then the customer required follow-up. ii. Identify customer profit characteristics This is a conventional segmentation which is based on the nature of customer. For Business 2 Business Companies it includes sex, age and geography. It includes volume of the organisation and the type of sector or application, the organisation operates in. iii. Identify behaviour in response and purchase As shown in 2.2 through analysis of data base when customer progress through the lifecycle, company is capable to build up a detail reaction and buy history which judges the details of frequency, recency, group of product buy and monetary value. This approach is known as ‘RFM (Recency, Frequency, Monetary value) analysis. iv. Identify multi-channel behaviour In spite of of the eagerness of the company for online channels, various customers are chosen for using online channels and others customers are chosen conventional channels. This is, to an extent, be indicated by RFM and response examination since customers with a preference for an online channel is more reactive and make more use online. Customer who likes online channels is focused mostly by online communications such as e-mail, but when customer like conventional channels is focused by conventional communications such as direct mail or phone. This is known as ‘right-channelling. v. Tone and style preference In a same way to channel liking, customers are respond in their own way to various types of message. Some customers like rational application, in that time a detailed e-mail may work best. On the other hand some customers are preferred an emotional appeal. Companies are test for this in customers or conclude it using profit description and response performance and then expand various inventive treatments consequently. 2. Customer acquisition Processes used to add new customer. According to Turban (2008), customer acquisition refers to marketing activities intended to form relationship with new customers while reducing acquisition cost and targeting high-value customers. Service value and selecting the right path for various customers are essential at this stage and during the lifecycle. The conventional manner to customer acquisition include a marketing manager developing a blend of mass marketing (billboards, magazine advertisements etc.) and direct marketing (mail, telephone, etc.) campaigns based on their knowledge of the particular customer base that was being focussed. Marketing campaign trying to pressure new customers to buy a particular type of diapers, the mass marketing ads might be determined in parenting magazines. The advertisements could also be positioned in more conventional publications whose readership demographics were alike to those of new parents. Customer acquisition is comparatively similar to mass marketing. A marketing manager selects the demographics that they are involved in and after that works with a data vendor to obtain lists of buyers who meet those features. The data vendors have large database holding millions of eventual customers that can be segment based on explicit demographic criteria. The idea of â€Å"similar demographics† has conventionally been an art rather than a science. Usually there are not hard-and-fast systems about whether two groups of buyers share the similar features. Most of the segmentation that took place in conventional direct marketing involves hunches on the division of the marketing professional. 3. Customer retention Dafe Chaffey 2009 said that customer retention refers to the marketing actions taken by a company to keep its current customers. Identifying applicable offerings based on their personal needs and complete position in the customer lifecycle (e.g. purchase value or number) is key. Customer retention strategy aims to keep a high percentage of valuable customers and a customer development strategy aims to boost the value of those retained customer to the organisation. Customer retention is based on customer loyalty. And customer loyalty is the point to which a customer will continue with a specific brand or vendor. Customer acquisition to retain and extend create long-term customer relationship. We need to calculate customer satisfaction, as satisfaction drives loyalty and loyalty drives profitability. This relationship is exposed below; The marketers aim is to push customers up the curve towards the affection zone. But the majority are not in that zone. Marketers must understand to achieve retention,why customers defers or are indifferent. 4. Customer extension This technique is encouraging customers to increase their involvement with a company. According to Turban 2008, customer extension is increasing the range of products that a customer buys from an organisation. Sometime it is referred ‘customer development. Increasing the lifetime value (CLV) of a customer is the main objective of customer extension by encouraging cross-sell. For example a customer of Egg credit card may be offered the loan or a deposit account. There are many of customer extension technique for CRM as follows; Re-sell: same type of products to existing customers-particular vital in some Business 2 Business background as re-buys or modified re-buys. Cross-sell: sell extra products which may be closely related to the original buy. Up-sell: this is mean, selling more expensive products. Reactivation: Customers who have purchased for some time or have lapsed can be encouraged to buy again. Referrals: generating sells from recommendation from existing customers. 2.4 CUSTOMER LIFETIME VALUE MODELLING Customer Lifetime Value (CLV) is also an important theory and practise of CRM. But the calculation of CLV is not straightforward. There are so many company, they do not calculate it. According to Dave Chaffey (2009) â€Å"Lifetime value is the total net benefits that a customer or group of customers will provide a company over their total relationship with the company†. CLV is based on estimating the income and costs related with each customer over a phase of time and then calculating the net present value in present monetary terms using a discount rate value applied over the stage. Efraim Turban (2006) said there is various scale of complexity in calculating LTC. Those are exposed in 2.6. Option 1 is a realistic way or estimated proxy for future LTV, but the true LTV is the future value of the customer at individual level. CLV modelling at a segment level 4 is crucial within marketing since it answers the question; How much can I afford to invest in acquiring a new customer? Lifetime value analysis helps marketers to: Create the true value of a companys customer base Recognize and compare crucial target segment Calculate the effectiveness of another customer retention strategy Plan and calculate investment in customer acquisition programmes Make decisions about product and offers 2.7 gives an example of how LTV can be used to develop a CRM strategy for different customer groups. There are 4 (four) main types of customers are indicated by their present and future value as bronze, silver, gold and platinum. Separate customers groupings (circles) are recognized according to their current value (as indicated by current profitability) and future value as indicated by CLV calculation. Every group will have a customer segmentation based on their demographics. Therefore this is used for customer selection. Within the four main value groupings, there are various strategies are developed for various customer groups. Few bronze customers such as group A and B practically do not have development potential and are usually unprofitable, therefore the objective is to reduce costs in communications and if they do not stay as customers this is acceptable. Some bronze customers like group C may have potential for growth; therefore for group C the strategy is to extend their purchases. Silver customers are focused with customer extension offer and gold customers are extended. Platinum customers are the best customers; therefore the communication is very important with these customers. 2.5 THE TECHNOLOGICAL FACTORS OF CRM According to Davenport and Short, (1990); Porter, (1987) ‘information technology is an enabler to thoroughly redesign business process to achieve improvements in organisational performance. ‘Information Technology help helps a business process by facilitating changes to job practices and establishing new techniques to link a customer with organisations, suppliers and stakeholders (Hammer and Champy, 1993). Eckerson and Watson (2000) advocated that ‘CRM take full advantage of technology to collect and analyze data on customer patters, expand predictive models, interpret customer behaviour, proper respond with communications, and deliver product and service to individual customers. By using technology a company can create a 360 degree view of customers to find out from past interactions to optimize future ones. Peppard (2000) said that ‘the leading factors in CRM development is improvement in network infrastructure, client/server computing, and business intelligence applications. CRM collect, store, maintain and distribute customer knowledge all over the organisation. The effectual management of information has a vital role to play in CRM. In the case of calculating customer lifetime value, consolidated view, product tailoring and service innovation, the information is essential. Along with data warehouses, enterprise resource planning (ERP) system and the internet are the central infrastructures to CRM applications. Fickel (1999) said ‘CRM applications link front office (e.g. marketing, sales and customer service) and back office (e.g. financial, logistics, operations and human resources) functions with the companys customer touch point. A companys touch point is â€Å"all of the communication, human and physical interactions your customers experience during their relationship lifecycle with your organisation. Whether an ad, Web site, sales person, store or office, touch points are important because customers from perceptions of your organisation and brand based on their cumulative experiences† (Source; http://www.imediaconnection.com/content/4508.imc at 16/10/2009 on 15:25) According to Eckerson and Watson (2000), ‘CRM integrated touch points is something like a common view of the customer. A separate information systems controlled these touch points. 2.8 demonstrates the relationship between customer touch point with back and front office operations Peppers and Rogres, (1999) said ‘In many companies, CRM is just a technology solution that extends divide databases and sales force automation tools to link sales and marketing functions in order to develop targeting efforts. On the other hand some organisations consider CRM as a tool that is exclusively designed for one-to-one relationship. According to Goldenberg (2000) ‘CRM is not just a technology applications for sales, marketing and service, but when CRM fully and successfully implemented, customer-driven, a cross-functional, technology-integrated business process management strategy that improves relationships and encompasses the whole organisation. 2.6 DATA WAREHOUSE TECHNOLOGY According to Watson (2000) ‘data warehouse is a tools of information technology management that helps business decision makers to instant access of information of customer data throughout the organisation by combining all database and operational systems like sales and transaction, human resource, inventory, purchasing, financial and marketing system. Data warehouse pull out, clean, convert and manage large volumes of data from various systems and creating a historical record of all customer. Data warehousing technology is the most crucial part of CRM because it makes CRM possible. Shepard et al. (1998) said ‘a better understanding of customer behaviour is possible because data warehousing technology consolidates correlates and convert customer data into customer intelligence. Understanding of customers and their purchase patterns can improve information related to customer service interactions, billing and account status, back orders, product returns, product shipment, and internal operating cost. The capacity of a data warehouse to store hundreds and thousands of gigabytes of data make an analysis feasible as well as immediate. Organisational benefits with a data warehouse are as follows; exact and faster access of information bad and duplicate data eliminate by quality data and filtering customer profiling and retention modelling it calculate total present value and estimate future value of every customer it gives detail report 2.7 DATA MINING TECHNOLOGY Peppers and Rogres, (1999) said that ‘the first analytical step of data mining is to describe the data. Data mining summarize its statistical attributes like standard deviations and means, visually review it by use of charts and graphs and distributes the value of the field in our data. But alone data description can not provide an action plan. We have to build a predictive model based on patterns determined from known results and after that we have to test the model on result outside the original sample. An ideal model should never be confused with reality, but it is useful guide to understanding our businesses. According to Eckerson and Watson (2000) ‘we can use data mining for both classification and regression problems. In first problem we can predict what type something will fall into. In second problems we are predicting a number like probability that a person will respond to an offer. In CRM process, data mining is often used to allocate a score to a particular customer. Data mining is also often using to recognize a set of characteristics, which is called profile. Data mining segments customers in to groups with similar behaviour like purchasing a particular product. 2.8 THE CRM PROCESS CYCLE IN BANKS Pound (2000) said that exploration and alteration process should be done by the banks on basis of customer information captured; this shows the full value of CRM initiatives. Banks set up a closed CRM cycle with the help of an integrated CRM solution, which composed of a set of continuous iterative process. It manages the whole customer related process for bank, analysing customer profile, customer data and life time value, which is helping to making marketing decision and optimizing the execution of marketing campaigns, customer service strategies and sales strategies across various channels during the bank. According to Professor Constantin Zopounidis (2002) CRM process cycle is based on a generic business view. It presents a continuous improvement of value between customers and banks across touch points. The main stages are as follows; Customer data collection Customer data analysis Marketing strategy and action programs Back-office Data External Data Touch-Point Data Pound 2000 said that ‘recent banking data sources are extremely heterogeneous. Geographic information is dispersed due to continual acquisitions, mergers and reorganizations. For example a bank might use web site, ATMs, e-mail, sales, call centres and marketing automation applications that must be integrated in a unified environment of CRM banking. An effective multi-channels customer interface will not be possible without a centrally integrated warehouse driving the entire CRM process cycle. This should be update real time. The historical data should be recorded by it, which is used to create propensity models and customer life time value models to recognize past behaviour and action in order to take future marketing strategy. 2.9 CUSTOMER DATA COLLECTION Kristin Anderson Carol Kerr (2002), said that in banking transaction system data such as (e.g. Checking, Credit, Savings) are frequently organised around accounts, channels, products and other alike transactional concepts. This limits the bank ability on identifying the total relationship and unique customers. An Integrated CRM is a major goal it consolidates these â€Å"information islands† and separate solution, which forms an open cross-bank system from all executives, business area department officers and branch employees, shares the identical customer information. Integrated banking CRM structure can be obtained from this necessary basis of data supply. Operation (contact) sources: Chou, Chou 2000, said the customer communication touch-point (ATM, Branch, Call-Centre, Internet-Banking, Mobile banking, personal contact, etc.) Internal sources: Professor Constantion Zopounidis (2000) said internal sources that are the available information island, data bases and product oriented systems from other banks such as (Cards, Deposits, Investments, and loans etc.), Marketing campaign response, meta-data analysis and reliable data mining results. External Sources: Professor Constanin Zopounidis 2002, said marketing researches that of external sources, infomediaries etc. Providing geo-demographic, psycho-graphic data and lifestyle, these can help to improve customer images 2.11 CUSTOMER DATA ANALYSIS Heygate (1998), said Simple and sophisticated data analysis techniques are required for deriving the valuable customer insight from the data collected in a central customer warehouse. More advance data analytics includes OLAP (Online Analytical Processing) mining techniques and tools, these extracts applicable patterns or trends in the data. According to Lawer (2000), key incorporated customer management insights provided by customer data analysis are customer segmentation/differentiation, concentration and distribution of customers value; share of purchases/profits, analysis of strategies that widen/lengthen/deepen customer relationship. Hawkes 2000, advocated customer data analysis enables the recognition of customers profit and customers preferences for definite bank product and services, indicates the most suitable channels to reach the customers, and assesses the profitability and life time value of every personality. Additionally, Delto 1998 said that the future manners of the consumers can be predicted by analysing their past behaviour. Customer statistics, profit and segmentation are the main amount produced of the analysis stage feeding the marketing strategy planning and completing process. Having easily accessible information to marketing makes the difference between a winning campaign and a failure. 2.12 MARKETING STRATEGY AND PROGRAMES Kristin Anderson and Carol Kerr 2002 advocated captured results and data of customer analysis support marketers to route marketing messages, processes and strategies. True values of data of Lloyd TSB are discovered by tools and process for marketing decision making, marketing decision making and CRM initiatives and campaign are deployed from converted information to customer knowledge. Goal of marketing automation within CRM are which personalise and optimizes each customer contact from planning, execution, monitoring marketing strategies and action programmes. Bryan Foss 2003 said it is critical for bank CRM not only to extract their data source to uncover patterns and insight but also to operationalise the system through the bank performance to turn the customer knowledge into importance creating achievement. Merlin Stone 2003 advocated the grades from advertising and CRM activities and strategies continue the process knowledge acquisition enhancing the on-going assessment of marketing data intelligence, closing the feed-back loop. Hence, the final element of CRM process cycle is the valuation of the results of campaign driven by marketing data intelligence. It is crucial to measure performance and feed result back into the centre customer data warehouse, in order to convey