Impact of After Sales Service on the Sale of Apples Products - Dissertation Example

Impact of After Sales Service on the sale of Apple’s products Executive summary Activities associated with after sales services have been categorised as an important source of profit, revenue as well as competitive advantage in majority of organisations. The objective of the current research is to analyse impact of after sales services on the sale of Apple products. The research proposal provided an expansive background on literature review related to current practices in after sales services and their influence on overall firm’s productivity. Research methodology for this proposal included research philosophy, research approach, research strategy, sampling and data collection as well as analysis techniques. 100 samples will be used for the current study with 10 employees from Apple and 90 customers who have experienced Apple’s after sales services. They will be provided with questionnaires via email as well as in printed form. Statistical tools such as, SPSS, will be implemented for filtering and data analysis. A timeline for the research, limitations of the current research and ethical conditions have also been discussed. Contents Introduction 4 Research Questions and Objectives 5 Literature Review 6 Research Methodology 9 Research Philosophy 9 Research Approach 9 Research Strategy 10 Sampling 10 Data Collection 10 Questionnaire 11 Analysis techniques 11 Time scale 11 Validity and Reliability 12 Limitations 12 Ethical Considerations 12 Reference List 14 Introduction The current global market is increasingly being filled with products with similar attributes, features and offerings. As a result, companies are finding it extremely difficult to differentiate their products on the basis of attributes and features alone. Fierce competition as well as diminishing profit margins from sales of products has forced companies to think of out-of-the-box marketing and promotional tactics in order to survive in this competitive market. Customers too are opting for brands that provide better offerings and a comprehensive package. So, companies have started implementing after-sales services as well as associated activities as a relevant source for profit and key differentiating strategy. Profits and revenues generated from these services are often found to be higher than traditional product marketing. Various surveys on impact of after sales services have also revealed that these may shoot up profits to three times higher than the original turnover calculated in a product’s entire life cycle. However, there is a need for dramatic shift in traditional perception regarding after sales services, from being perceived as a necessary evil to a customer-centric approach (Gaiardelli, 2007). With increasing competition in the global environment dominated by rising costs of customer recruitment, loyalty of customer has become the marketplace currency in this 21st century (Singh and Sirdeshmukh, 2000). Companies are implementing various service solutions based on technology such as, CRM (Customer Relationship Management), with objectives such as, increase in customer satisfaction, enhanced productivity as well as overall increase in profitability (Wardley and Shiang, 2000). Service quality can be rightly referred to as a reliable source for achieving sustainable competitiveness. Huge numbers of technology firms have managed to survive and grow even during the economic downturn by establishing strategic after sales services. Firms dealing with technology based equipments such as, software, mobile communications and gadgets, are in need of effective after sales services compared to those in other industries. Customers are always in need of recommendations, information regarding usage as well as reactive and preventive maintenance services. Firms providing these services have a higher level of customer loyalty compared to those who neglect customers, on completion of the sales process. As a result, these companies offering superior after sales services are able to minimise their competitive rivalry as well as threat for substitute products. So, after sales service is one of the burgeoning as well as increasingly studied issues in the marketing sector, which justifies its selection for the current study (Cronin and Taylor, 1992). In the current study, after sales services offered by Apple and its impact on sales and future growth and development of the company will be analysed. The above analysis has clearly suggested the need for effective and long-term after sales service strategies in organisations. However, due to lack of importance given to aforementioned services as well as ignorance of analysts and researchers, very few academic studies and publications have been produced on this issue. This creates the base for this study, where Apple’s current after sales services will be studied thoroughly with respect to current industry practices and practical recommendations will be given for enhancing effectiveness and productivity of this service. Gap in the existing literature has propelled this study in order to understand features of the after sales service that play crucial role in enhancing customer loyalty. Another important facet of the study is that very few researchers have tried to test the relationship between after sales services and rise in sales and revenues of the product associated. The literature review will be an exhaustive analysis of various strategies applied in after sales services as well as in overall productivity and increase in profit margins from these activities. The key essence of this study is guided by various research works by research scholars, who tried to analyze impact of after sales services on price, benefits and product values. Based on the literature, the study will then conduct a quantitative survey with the objective of answering the research questions and hypothesis generated. The methodology will help in understanding the detailed steps whereby research questions will be answered. Since the study is composed of both qualitative and quantitative analysis, the research setting will be conducted at different places. The data collected during the research will be examined using statistical tools and discussion of the obtained results will be followed by research limitations as well as directions for future research. Research Questions and Objectives The aim of this proposal is to critically evaluate the overall impact of after sales services on entire sale of Apple’s products. The various objectives of the study will be; 1. To establish a general understanding and analyse present situation of after sales services in the electronics and telecommunication industry. 2. To analyse past research works on impact of after sales services on customer loyalty, company sales, revenues and overall productivity. 3. To evaluate current practices followed by Apple in after sales service strategies and compare with industry standards. 4. To recommend practical after sales services providing sustainable competitive advantage in future. The research questions for the present study are; 1. What are the current after sales services practiced by Apple and how effective are they in ensuring long-term customer satisfaction and loyalty? 2. What are the impacts of after sales services on overall sales of Apple’s products? 3. How can Apple achieve competitive advantage with the help of after sales services? 4. What precautions should Apple take in order to transform after sales services into a critical differentiating factor in future? Literature Review Various authors have tried to define the concept of after sales services and its role in an organisation’s overall performance. The common forms of after sales services are customer support, technical support, product support as well as associated repair services. Even so, organisations are increasingly moving away from these general methods in search for more creative and productive after sales services. According to Cavalieri, et al. (2007), “after-sales service, traditionally confined temporally as taking up those activities occurring after the purchase of the product and devoted to supporting the customer in the usage and disposal of the goods.” Morschett (2006) has further expanded the definition with respect to industrial customers. According to this definition, after sales services comprises activities, which effectively support sale of manufactured products. These may include maintenance, warranty services, user training and repairs. The major objective of these services is to enhance efficiency and productivity of products sold. Nonetheless, present day researchers in this field have considered after sales services to be more than a mere support activity for increasing sales. According to them, efficient after sales services can successfully generate customer satisfaction and loyalty; this in turn will have a significant influence on overall growth and sustainable development of any firm. Saccani, Songini, and Gaiardelli (2006) evaluated the impact of after sales services among IT, electronics and electrical appliances as well as automobile industries. 48 firms were taken as a sample. Findings pointed out that effective after sales services ensure a strong base for enhancing customer retention, satisfaction and overall image of the firm. The results also suggested that developing a strong after sales strategy helps in cross-selling and up-selling, further enhancing revenue and productivity. A detailed description of various after sales services and their relationship with sales and revenue will help in evaluating overall importance of after sales services. Delivery: These include providing doorstep services such as, cash on delivery and sending products to customer’s preferred destination. Many authors and researchers have regarded delivery services as an important source of increasing productivity and sales. Product deliveries can be of two distinguished dimensions; reliability and speed (Michael, 2001). Effective delivery service also assures that products are delivered to right customers at the right time and in right quality and quantity. Installation: This involves arranging products in a manner that renders it ready for customer usage. For instance, in electronics and communications industry, installations can range from fixing software of a mobile phone and inserting required applications and software in laptops to installing computers at customer’s preferred destination. A wrong installation process can not only result in customer dissatisfaction, but can also force customers into filing case and complaints, thereby resulting in loss of revenue, customers and brand image (Wetmore, 2004). Warranty: Generally, warranty is assumed as a seller’s obligation. Customers expect products to be qualitative and warranty comes as a satisfaction for them. The objective of warranty is to differentiate products from those of competitors, in terms of durability and long life. Service quality: Quality of service is becoming one of the major issues faced by organisations nowadays. The problem lies with unorganised and unanswered customer complains, which creates disgruntled customers. For satisfaction and retention of customers, it is extremely essential that the company delivers high quality of service (Cronin and Taylor, 1992). Feedback: Customer feedback has become quite an influential source in establishing efficient service delivery processes. Organisations are becoming increasingly customer orientated and feedback is regarded as the best method to interpret customer demands. This feedback is then used in formulating various services and products (Barlow and Moller, 1996). Organisations employ various methods such as, toll free numbers, internet, telephones and comment cards. Various studies have opted to investigate overall influence of after sales services. Following factors are responsible for the increasing importance of these services. Customer Satisfaction: An effective after sales service can result in sustainable relationships as well as overall customer satisfaction. With a variety of after sales services at different stages of product lifecycle, a company can ensure that functionality of the product is established. Solving customer issues with right strategies and within right time helps in building long-term and strong relationships between the customer and provider, thereby facilitating more transactions over time. Loyal customers need least marketing and branding as well as relationship building tactics, compared to new customers. The current business environment is characterised by downsizing of operations, increasing pressure on budgets as well as enhancing core competencies. Therefore, firms are gradually shifting towards tailor made services for customers (Barlow and Moller, 1996). Competitive advantage and differentiation: After sales services are also supposed to assure competitive advantage as well as sustainable differentiation for the firm’s future. After sales services can be an excellent differentiator as primary products are often similar and comparable, in terms of attributes, physical appearance as well as usage. However, services are difficult to duplicate as they involve human intelligence, technical capabilities as well as soft skills. Presently, customers are demanding for comprehensive solution, rather than mere products. Hence, by providing a complete package such as, original purchase as well as after sales requirements, the product’s sale significantly increases; this in turn secures repurchase and successful product establishments. Profit: Providers of after sales services are presently enjoying huge rise in profit margins and as a result, are increasingly adapting strategies to further improve the process. The major reason is to offset the revenue decline in sales of primary products. Furthermore, researchers have also argued that after market services can increase profit margin up to 30 percent, which is way higher compared to overall profit margins that is anticipated from primary product sales (Craemer-Kühn, Junghans and Krönig, 2004). The overall maintenance costs of products are quite lower compared to replacement costs, especially in case of high-end electronics devices and software. So, it is more effective for companies to engage is maintenance services than to replace products. On summarizing the above literature research, it can be said that after sales services are highly effective and essential for enhancing satisfaction and retention among customers, stabilizing long-term profits as well as assuring competitive advantage for organisations. Research Methodology Research Philosophy Researchers need to decide upon the philosophy to follow in a study, before carrying out the research. Research philosophy can further be subdivided into different styles, which are positivist style and interpretism or phenomenological style. Phenomenological style is basically used for addressing behavioural, perceptual and sociological problems. On the contrary, positivist style is more appropriate for evaluating interdependency between endogenous and exogenous variables in a manner that can be quantified. While conducting a quantitative analysis, positivist style is the best research philosophy (Somekh and Lewin, 2004). The objective of the current study is to understand impact of after sales services on the overall sale of Apple’s products. Here the relationship between after sales services, customer satisfaction and loyalty and subsequent rise in sales will be discussed. Therefore, the researcher will use positivist style for conducting the research. Research Approach According to Saunders, et al. (2009), researchers can choose to apply inductive or deductive approach for carrying out any research. The major aim of deductive method is to test the existing model or theory, while inductive research approach puts emphasis on preparing a theoretical conclusion, after behaviour testing of different variables. In the present study, relationship between dependent variables (Apple’s product sales) and independent variables (after sales services) will be evaluated. Hence, the researcher will use inductive approach for this research setting. Research Strategy In general, researchers use qualitative or quantitative methods as research strategies. Qualitative research is used in analysing information based on human perception, culture and social beliefs. Open-ended questionnaires are used for qualitative analysis. On the contrary, quantitative method uses mathematical techniques for analysing data. For example, determining financial health of an organisation or realizing the relationship between strategy and sales (Pannerselvam, 2004). In quantitative research, semi-structured and structured questionnaires are implemented. The objective of the current study is to analyse relationship between after sales service of Apple and its overall sales. For this, researcher will utilise quantitative tools and semi-structured questionnaires for respondents. Sampling Sampling is a technique where a particular subset is selected from the set of population. Even so, it is necessary to ensure that sample selected is similar to the overall population and a generalized inference can be drawn from the sampling process. The current study will have two set of sample participants. There will be total 100 respondents, who will be further divided into two categories. The first will be employees of the company involved in after sales services. 10 employees will be selected for the study. The objective behind choosing this sampling set is to understand their views on after sales services provided by the company and associated impact on customer re-purchase, profit and overall sales (Thompson, 2012). The second sample set will be customers who have been exposed to after sales services provided by Apple. Total number of customers selected will be 90. The objective of the sample is to understand effect of after sales service on consumer re-purchase and hence, further product sales. Data Collection Data collection will be done from primary as well as secondary sources. Secondary data collection will help to establish the literature review and research questions for the current study. Sources for secondary data collection are online databases, books, journals, government websites, company websites, company annual reports and paid websites (Pannerselvam, 2004). Primary data collection instruments will include two sets of questionnaire; one for Apple employees and another for Apple customers. Data from employees will be collected at their office through hard copies of the questionnaire. Data from customers will be collected through mail, since these individuals are located at separate places. Questionnaire Questionnaires are critical instruments for data collection. Here a series of open-ended, closed-ended, structured or semi-structured questions are presented to the target audience (Hesse-Biber, 2011). In the present study, a semi-structured questionnaire will be formed for customers as well as employees of the company. Analysis techniques Data analysis includes filtering, learning, inspection and conversion of the data for gaining useful information. The researcher will use coding techniques in SPSS software for converting data from customers and employees into numeric output. Questions will be designed in an exhaustive manner for gaining clear understanding as well as quick analysis of the data. In order to comprehend the relationship between two variables, the researcher will use Pearson correlation analysis. In addition, the researcher will use linear regression to realize the influence of independent variables on dependent ones. Time scale Time Period and Activity Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Study design             Evaluating background structure Formulation of literature outline Data collection for literature review             Literature Review writing             Formulating outline of the research Review of research questions Developing Focus Group, Questionnaire and Interview session             Review of research approach Primary Data Collection through questionnaire             Evaluation of the Collected Data Comparison of past research with present findings Summarizing Findings of the Research Writing final dissertation             Submission             Revision and final submission             Validity and Reliability Internal validity will be secured by using statistical process such as, SPSS, in the study as well as by analysing data in a systematic manner. In order to minimise mis-representation, data will be established in a tabular form. The study will be conducted on a comprehensive, accurate and consistent manner to establish reliability. Moreover, standard procedures for measuring the collected data will be used. Limitations The researcher may face various research limitations during course of the study. The researcher may run out of budget and face challenges in completing the study. The researcher might encounter difficulties while gathering information from employees due to their busy schedule. Also, customers might not be available for answering the questionnaires. Ethical Considerations The current study will consider various ethical factors for safeguarding respondents’ interest. The entire research setting will be done in a manner, whereby no psychological or physical harm is caused to the respondents. The participants are also allowed to leave the research setting at any time. In addition, participants need not provide any prior notice or information before quitting the process. The research study will also make sure that none of the respondents bear any kind of financial expenses. Reference List Barlow, J. and Moller, C., 1996. A complaint is a gift: Using customer feedback as a strategic tool. San Francisco: Berrett-koehler publisher Inc. Cavalieri, S., Garetti, M., Macchi, M. and Pinto, R., 2008. Decision-making frameworks for managing maintenance spare parts. Production Planning & Control, 19(4), pp. 379-396. Craemer-Kühn, D., Junghans, M. and Krönig, J., 2004. A rocky road for European car parts makers. McKinsey Quarterly, 40(2), pp. 17-19. Cronin, J. and Taylor, S., 1992. Measuring service quality: A Re-examination and extension. Journal of marketing, 56, pp. 55-68. Gaiardelli, P., 2007. Performance measurement of the after-sales service network—Evidence from the automotive industry. Computers in Industry, 58, pp. 698–708. Hesse-Biber, S. N., 2011. Emergent Technologies in Social Research. Oxford: Oxford University Press. Michael, M., 2001. Supply chain complexity and delivery performance: An international exploratory study. Supply Chain Management: An International Journal, 6(3), pp. 106. Morschett, D., 2006. Firm-specific influences on the internalization of after-sales service activities in foreign markets. Journal of Services Marketing, 20(5), pp. 309-323. Pannerselvam, R., 2004. Research methodology. New Delhi: PHI Learning Pvt. Ltd. Saccani, N., Songini, L. and Gaiardelli, P., 2006. The role and performance measurement of after sales in the durable consumer goods industries: An empirical Study. International journal of productivity and performance management, 55 (3), pp. 259-283. Saunders, M., Lewis, P. and Thornhil, A., 2009. Research Methods for Business Students. 3rded. New Jersey: Pearson Education. Singh, J. and Sirdeshmukh, D., 2000. Agency and trust mechanisms in consumer satisfaction and loyalty judgments. Journal of the Academy of Marketing Science, 28(1), pp. 150-167. Somekh, B. and Lewin, C., 2004. Research Methods in the Social Sciences. California: SAGE. Thompson, S. K., 2012. Sampling. New Jersey: John Wiley & Sons. Wardley, M. and Shiang, D., 2000. Customer Relationship Management Market Forecast and Analysis. IDC, pp. 1-119. Wetmore, P., 2004. The Seybold report. Analyzing-publishing technologies, 4(7), pp. 16-19. Read More