Logistics – Supply Chain Management Essay Example

Meeting Customers’ Expectations

Typically, a consumer satisfying his/her need chooses what he/she needs from a wide range of products and services specifically designed for this purpose. He/she makes choices, relying on a sense of the benefits and of the value, which in his/her opinion the goods have. Thus, when choosing, a buyer focuses on customer value of the goods (Kotler and Armstrong, 2012).
The level of customer satisfaction depends on how the characteristics and properties of the goods correspond to his/her idea of ​​customer value. Thus, if the dignity of goods below expectations, the consumer will remain unsatisfied. If the product lives up to expectations, the customer is satisfied. If advantages of goods exceed the expectations, the consumer is happy. Leading marketing companies know that a satisfied customer comes to shop again and again, so they try their best to fully realize the expectations of the client. They promise only what they can carry out, but it’s a bit more promise (Grewal, 2014).
Customer satisfaction reflects the degree of coincidence of the characteristics and properties of the goods, with the expectations associated with this product. Customer satisfaction is directly related to the quality of the goods. In recent years, many companies have started using total quality management programs – programs to continually improve the quality of goods, services and marketing activities.
It is very important for each company to provide a system for monitoring customer satisfaction. For this the complex of the following indicators can be used (Cummings and Worley, 2014):
- The percentage of new customers in relation to the average number of customers;
- The percentage of lost customers in relation to the average number of customers;
- The percentage of customers renewed in relation to the average number of clients;
- The percentage of very dissatisfied, dissatisfied, indifferent, satisfied and very satisfied customers;
- The percentage of customers, who are in favor of the re-implementation of the procurement;
- The percentage of customers, who say they recommend the product to others;
- The percentage of the target market customers, who are familiar with the brand;
- The percentage of customers, who recognize the product of the company is the best in its category;
- The percentage of customers, who correctly identify intentions regarding the brand positioning and differentiation;
- The average level of perception of goods relative to the main competitor;
- The average level of service quality perception of the company in relation to the main competitor.

The level of customer satisfaction is studied in the following sequence (Waschik, Fisher and Prentice, 2010):

1) Choice of parameters (options) of assessment and evaluation of their relative importance (for evaluation one of the scales of measurement, to which the assessment of “do not know” is added, is applied);
2) Formulation of customer satisfaction assessment for each indicator;
3) The definition of an integrated assessment of the level of satisfaction of the goods and the seller by summing the weighted estimates for each indicator (integral pleasure from commodity, level of service or seller can be determined by polling);
4) Clarification of intentions regarding the implementation of customer repurchases.
The use of importance estimates of the studied parameters is more productive than building map of satisfaction in order to make effective marketing decisions. Comparison of estimates of the importance of indicators to assess the level of their performance or availability of the product helps to determine how the quality of the offered goods was consistent with the customers’ expectations. It should be taken into account that achieving a high value for the customer of important indicator is estimated by him/her higher. In connection with this, there is the need of ranking indicators by importance that help identify the parameters, on which to focus more effort (Peng, 2012).
For example, in January 1990, Hampton Inns began to advertise a guarantee of service quality. The client unsatisfied with the level of service was offered not to pay for accommodation. Most managers objected to this kind of guarantee, assuming that they should offer the rooms to bad customers, who may argue that were not satisfied with the service in order to avoid paying the money. Opinions of hotel managers were diverged. However, the company has believed in the honesty of its guests and the ability of staff to organize the service at the highest level. Because of this trust to the guests and employees, the company has gained a competitive edge in the market of hotel services (Enz, 2009).
The research of the Hampton Inns clients’ opinions have shown that more than 85% of visitors considered the guarantee of quality of service in the hotel attractive, describing it as one of the ten most important elements of the quality of hotel services, and 99% of visitors took advantage of this guarantee, they said that they would return to this hotel to give it another chance. Subsequent experience has shown that almost 40% of them returned to the Hampton Inns very soon. However, if management understands that a guest enjoys a guarantee in his/her favor without a good reason, that his/her name is entered in the data bank of the Hampton Inns. When these visitors subsequently call to book a room, the operator tells them that they would be happy to accept the order, but they won’t be provided with guarantees. Thus, a small number of guests will be able to use this system and that only one or two times, and then it will not be distributed on them (Walker, 2015).
Hampton Inns estimated the cost of its guarantees. It turned out that because of the guarantee in 1990, 2% of guests stayed in this hotel (i.e. 157k per room per night). These guests ensured an income of $7 million, and the guests, who once using the guarantee, again returned to the hotel, added another $1 million. Within the year, Hampton Inns has paid $350 thousand to clients, who took advantage of the guarantee, being dissatisfied with the quality service. In 1991, Hampton Inns received $18 Mio from clients attracted by the declared guarantee, while the level of expenditure for payment of the guarantee remained constant (Enz, 2009).
One reason for the success of the system of the service quality guarantees of Hampton Inns is that the company conducts regular monitoring of this quality. The hotel understands that guarantees can lead to the financial collapse of the company, if not to provide guests with satisfying their services. Therefore, employees are provided verification of actions, when guests resorted to the use of guarantees. But officials observe how a hotel solves the guest’s problem to be sure that everything is in order and he/she is pleased (Walker, 2015).
The guarantee system also affects the staff of the hotel. When officers are asked on their opinion about their work, almost 50% respond that the system of guarantees of a high level of service complicates their work, but gives them the confidence to resolve customers’ problems on their own, without waiting for the approval of the manager. The management states that guarantee system makes Hampton Inns the best place to work and strengthens the labor staff morale. Guarantee of a high level of service is an example of how much attention companies in the hospitality industry pay to enhancing the quality of services offered. And it is clear that the staff prefers to work for a company that helps it to provide with quality services that satisfy their customers (Okumus, Altinay and Chathoth, 2010).
Some administrators are afraid of the guarantee system, because they believe that dishonest customers will use it to get free meals and accommodation. This is possible, but the study found that each unfair complaint is accounted for 19 fair ones. The hotel keeps track of such complaints and unscrupulous customers, who are suspected of fraudulent use of guarantees more than once, and warns that happy to accept them as their guests, but without any warranty service. The real danger in the provision of guarantees of quality of service is when a guarantee is offered, and the organization is not able to offer customers a satisfying level of quality of their services (Walker, 2015).

Factors of quality customer service from the procedural side consider (Grewal, 2014):

The range of services: the availability of all the necessary additional services to the client (e.g. delivery, deferred payment or gift wrapping, fitting clothes), pleasant things in service.
The procedure for granting them: how the procedure is simple and easy to use, where and in what conditions the client has to wait, ease of preparation of documents, etc.

Specifications of quality: the states in which the product is shipped, the probability of failure, resort, transport losses, etc.

Speed, efficiency, reliability, quality of service compliance procedures of interaction with the client.
Coping mechanisms: how it is debugged, simple and convenient for the customer.
After-sales service: have the company paid attention to after-sales service, whether provided in the sales of the interaction between the manager and the client after receiving the payment. How good and customer-oriented warehouse and delivery operate? Does the office of marketing apply efforts in this direction (for example, the newspaper for customers)?

Factors of quality customer service from the personal side include (Grewal, 2014):

Friendliness, the desire of the seller to help the client.
Seller’s ability to listen and “read” the customer: how an employee is attentive to the customer, to what he/she says, to the non-verbal signals.

Focus of sales assistant on the client’s needs: the employee seeks to help, but not to push.

Presentation skills: whether the seller is able to speak the language of the customer’s benefits, possession of information about the product, the ability to present information well.
Experience with claims from difficult customers: the ability to steer the conversation in a constructive direction, control their emotions, the ability to find a mutually acceptable solution, self-control.

Seller’s interest in the client after payment: whether the employee is friendly and helps after payment has been made.

The ability to receive feedback from the client.
Therefore, today, companies in the course of their work should in addition to creating stronger links with partners develop closer links and loyal cooperation with its direct consumers. In the past, many companies could get customers quite simply. Consumers often did not have alternative suppliers or other suppliers offered goods and services of poor quality or the market grew so quickly that the company could not worry about the need to fully meet the needs of consumers (David, 2011). The company could lose 100 customers a week, but getting other 100 customers and be satisfied with this result. This company, operating on the principle of the theory of business under the imaginative name “bottomless pit”, believes that it will always have a sufficient number of new customers to replace those, who are dissatisfied with the result of the purchase. However, such a change in consumer demands requires more money than if the company has retained all of its 100 former customers and did not appeal to the new. Another problem lies in the fact that dissatisfied customers spread their negative opinion about making a purchase, making it more and more difficult to obtain 100 new customers a week. In business, greatly dependent on local conditions, such as the organization of the restaurant district profile, it is almost impossible to get the required number of new customers to replace lost (Grewal, 2014).

Mystery Shopping

Customer service quality is one of the most important factors of competitiveness of service industries and trade. High level of service increases the number of regular customers and creates a positive image of the enterprise, which entails an increase in sales both in volume and in value terms (Griffin, 2008).
The method of Mystery Shopping can be used not only to evaluate the service in the company, but also to evaluate the quality of service competition. The competence of staff, level of service, price, etc. can be compared. In recent years, many companies have realized the importance of merchandising and competent placement of goods in retail outlets. Proper layout allows raising sales volumes in several times, and the producers do not regret the money for it. However, it is also necessary to check how retail fulfills its obligations. Therefore, there are retail audit programs, which occupy a special place in the method of Mystery Shopping. In this case, the availability of goods, its location, set the price offered discounts, the availability of POS-materials and more are estimated (Wilson and Gilligan, 2005).
This method is widely used as part of sales promotion campaigns. For example, the agent asks the seller of the goods, without specifying a particular brand, and commits that it will offer the seller. If he/she recommends a brand promoted in the framework of the campaign, the agent may reveal itself and handing bonuses, gifts (Griffin, 2008).

As a result of research by the Mystery Shopping, it is possible to obtain evaluations of sales and service:

1. Subjective assessment concerns the complexity of the product search or office; the appearance of managers; view of the trading floor; perseverance of product offerings, interest in selling; courtesy of managers, telephone operators or consultants; the ability to persuade; and other factors that directly or indirectly affect the decision-making potential customer (buyer) (Stacey, 2011).
2. Objective assessment relates to the period of waiting for a response to a telephone call; the fact of inviting a client’s office or a shopping center; waiting period for treatment consultant in the commercial premises; the accuracy and completeness of the information provided about the product; the use of promotional materials; the offer of additional services; correctness of the transaction; and other important aspects of the process of selling or providing services (Stacey, 2011).

The main stages of evaluation of the quality of service by using the method of Mystery Shopping include:

1. Definition of the assessment objectives. It is determined what will be evaluated, and how information will be used. Perhaps the aim will be to assess the methods and techniques of sales, or detection of deviations from accepted standards of service in the company. The program can monitor the dynamics of improvement (deterioration) in the quality of service in relation to competitors, etc. (De Kluyver, 2010)
2. Development of evaluation criteria. The evaluation criteria are agreed with the objectives. Criteria, a balance between the objective and subjective evaluation criteria consistently in accordance with the sequence of actions of buyers and sellers when shopping, etc. are stated in order. The evaluation criteria should be based on accepted standards of service in the company (Peng, 2012).
3. Sampling – determining the number of observations and the required number of agents (mystery shoppers). The calculation of the required number of observations apply all the classical methods of statistical calculation of sample size, since insufficient number of observations leads to incorrect conclusions about the differences in the level of service between different objects of study. On the other hand, a high number of observations can significantly increase the cost of research (Kotler and Armstrong, 2012).
4. Selection of agents. The most important aspect in this phase is the account of the characteristics of existing and potential customers in the selection of agents to conduct the study. When selecting demographic, behavioral and psychographic characteristics of existing customers are used. In other words, the agent, his/her appearance, behavior, and others under the assessment must comply with the same group of consumers, who are the target for the company. The agent can be either a representative of this group, or an actor. Such studies are possible in which the agent as much as possible should be different from the target group (assessment and response to the actions of “non-standard” buyer) (De Kluyver, 2010).
5. The training of agents. Before beginning the program, each agent runs a training and testing for the project. There are 2 types of training agents: general and special. The total is performed without reference to the forthcoming work, as a way to improve the skills of agents, special training is carried out before each new project.
6. Evaluation Procedures. Behavior of agents in the survey may be adjusted by set of documents (Mooi and Sarstedt, 2011):
- The script of behavior – adjusts the agent’s actions – what to ask, where to look, how long he/she is in the store, etc.
- Sheet-up visit – a questionnaire form for written marks to assess the quality of service.
- Legend – a written statement of the purpose of the visit, the problems, the situation of the buyer, and so on, a kind of reminder for the agent,.
- Route maps, etc.
The evaluation system of service quality is the only system that clearly defined its goals, worked out evaluation criteria and selected appropriate methods. Moreover, when the evaluation is not sporadic, and is carried out systematically and consistently. To implement this principle, the assessment should be both of current and non-recurrent nature. The current assessment is carried out by managers and is part of their direct duties. They constantly have to monitor the compliance by employees of the Standards of quality customer service and work personally with each of analysis of cases of improper behavior. However, quite often there are situations, when under the leadership the staff behaves as expected, but without the watchful eyes they relax and do not bother to compliance with the rules. To encourage employees to follow the standards consistently, not just for show to management, different methods of point estimation, which are intended not only to identify the shortcomings and their elimination, but also the gradual habituation of staff, to how to work and how to treat customers, are applied (Wilson and Gilligan, 2005).
Therefore, the advantage of Mystery Shopping is the secrecy and surprise checks. Specially trained agent makes a purchase and evaluates the level of service on a special form. Visiting is classified, and the seller does not know that it is checked.

References

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