A Case Study in Eastbourne - Dissertation Example

?The dimension of influence s satisfaction in UK coffee shop: a case study in Eastbourne Table of content ………………………………………………………………………3 Introduction……………………………………………………………………..3 Research Objective……………………………………………………………..4 Literature review………………………………………………………………...5 Importance of customer satisfaction…………………………………….5 The service marketing mix……………………………………………....6 The services in coffee shops…………………………………………….09 Identifying the problem…………………………………………………10 5 GAP model of service quality………………………………………….11 The importance of customer Loyalty programs…………………………………13 Methods of loyalty programs…………………………………………….13 Research work…………………………………………………………………...14 Conclusion……………………………………………………………………….15 References ……………………………………………………………………….16 Abstract: In the recent time there are many companies selling services to satisfy the existing and new customer to retain and acquire new customers respectively. However, in this particular paper the focus will be given over the service quality towards customer satisfaction in the coffee shop in UK. It is vital to understand the impact of the customer satisfaction in the coffee shops which is basically semi service based business unit. In most of the coffee shops the main products are food and beverages which are manufactured there only, so it can be stated that a coffee shop is a business unit where food manufacturing and services both are delivered at the same time. The customer relation is important in case of this case as the point of sales and the point of manufacturing place is the same place and that is the coffee shop itself. This paper will focus on the different ways of satisfying customers through better services and the measurement of the dynamic customer relation in term of long term benefits. Introduction: Maintaining a great service quality is all about understanding the requirements of the customers and delivering the tailor-made services to satisfy them. Understanding the customer behavior is another very important factor to be focused on. However, these are the basic rules to delivering satisfying services. The measurement of the steps taken towards the customer satisfaction is also very important to understand the real impact over the customers. The data collection related to the existing service quality is one of the most important factors in this case. The primary and secondary data are important to support the outcome of the services related to the customer satisfaction. According to Zikmund, Secondary data or historical data are the kind of data that is previously gathered for some study or project, which built specially for that particular project (Zikmund: 2003). In regards to this research, the secondary data used are gathered from the Internet, journals and other publications in order to get basic information about the nature of the influences of the customer satisfaction. Research objective: This particular research will focus on the impact of the service quality on the customer satisfaction in a coffee shop. The primary objectives of this particular paper will on finding the proper service qualities to satisfy and retain the customers. The impact of the customer satisfaction is shown in a justified manner in this research. Many marketing communications tools such as loyalty programs, in-store promotions, instant service technique and many other interactive tools are discussed in a systematic manner to understand the importance of the customer satisfaction. The 5 gap model of service quality is also discussed to bridge the gaps for better service quality within the shop. The list of the objectives is given bellow 1. Finding the best service quality. 2. Quality control. 3. Food quality and hygiene. 4. Analyzing the Gap models for bridging the gaps in the services. 5. Implementing the better customer relation. The literature review: Importance of customer satisfaction: In this era of globalization and service oriented industries, the world has become the common market place. From the last two decades the business scenario has changed drastically. The common seller based market has become a buyer based market in the recent time. Within two decades the business focus has been shifted from production to business relation (Sugandhi: 2003). The legendary question in the history of the business management is how to satisfy the customers. By-default customer is the king in any business as the customers are the vital factor in the business that generates the revenue for the company. It is vital for the coffee shop to think from the customers prospective. The customer’s perception and attitude towards the services provided in the coffee shop are the vital factors to improve the service qualities in the future. The retention of a customer saves lots of money cost. According to Jill & Michael, there are several costs which can be saved and profits can be generated and they are 1: Acquisition cost: the cost of acquiring new customer, 2: Base profit: that is the difference between the price the customer pays and the company’s cost. 3: Revenue growth: a long term loyal customer gives long term revenue for the company. 4: Cost saving: A matured customer tends to be less costly to service (Jill & Michael: 2001). The so-called typical customers do no longer exist in this changing business environment, and that is the biggest lesson for all the companies (Dyche: 2002). However, the best customer relation can be maintained with the help of trust and commitment (Schafer: 2007). The service marketing mix: Service marketing and the tangible product marketing are not the same. Service marketing required some specifications as far as the marketing is concern. The traditional four Ps of marketing are very important for the product marketing. However, according to Crane (1993) the additional three Ps are also very important for the service oriented business (Crane: 1993). And they are people, physical evidence and the process. According to Rutherford and O’Fallon (2007) the hospitality industry works with three main parties and they are the owner of the hotel, the management team and the brand itself. As per Brink & Berndt (2009) the customer database should be maintained to get a proper customer relation for a longer time. The traditional 4 Ps of marketing mix, that is product, price, place and promotions are basically for the tangible products. However, with the advancement of the marketing concepts and with the advancement of the service based market the three more Ps, that is; people, physical evidence and the process have become very important (Lancaster & Reynolds: 2005) Product: The product is very important for any business. However, in this case the products are basically beverages or drinks related to coffee and may be some confectionaries like cakes and backed foods. Moreover, the quality of the food must be maintained properly as food safety is pretty important as far as the customer satisfaction and the reputation of the supplier are concern (Schroder: 2003). Price: The price is a variable entity. It differs according to the demand and the brand of coffee shop. However, there are many coffee shops in the UK and the standard must be maintained. The importance of the penetration pricing and the skimming pricing is very important for the introduction of any products. However, there are three other pricing strategies which are very must effective to put value towards the customer satisfactions and they are. Perceived value pricing, relationship pricing and behavior modification pricing strategy (Pezzullo & American Bankers Association, 1998). Place: The place is one of the most important factors for any business. However, a coffee shop must have a place where most of the people cal visit and spend time. The best place would be near some shopping mall, multiplex or may be near the beach or near any tourist spot. Promotions: Most of the promotions and marketing activities are regulated by voluntary controls in UK. However, the voluntary controls are self regulated by the industry itself. According to Lewis and Trevitt (2000) all of these voluntary controls related to the advertising and the related laws with them are there to maintain a sustainable controlled situation in the UK market for the interactive marketing communication. The telemarketing or the promotion via phones must be avoided, according to Yadin (2002) the telephone preference service (TPS) is a very important service provided by the companies like British telecom to be taken very seriously in UK. Calling the TPS numbers are taken as a serious offence. In this era the combined promotional media is the best option for promoting and advertising. According to Thomas and Carpenter (2001) the development of the internet and the digitization of the television network have shown the paradigm to the media industry. Online promotion through an interactive website might be a very good option for the coffee shop, according to Kung, Picard and Towse (2008) the European countries have the higher accessibilities in the interment. People: The people are the primary part of the service delivery process and these are the main people who can influence the customer’s mind towards the product. The person who performs the service delivery is the most important personnel in the service industry towards the customer’s mind. However, in this case it is a coffee shop and for that, the people who are providing services in the coffee shop are the vital entities. These service providers are the face of the brand or the shop, so, the better service mean better reputation. It has to be remembered that the services are basically delivered by the people so, they are the most important factor for the customer satisfaction (Lancaster & Reynolds: 2005). Physical evidence: For any hospitality businesses which are mostly service oriented are much tougher to sell as the customers do not get the actual feelings of the product while they are buying the product. However, they feel the product while they are availing the service and that is basically after they buy the product. For this particular reason the physical evidence of the product is very much important. The physical evidences are the actual environmental situation where the services are provided. The actual feeling of the products must be created by the sales person at the point of sales towards the customer so the customers would be feeling confident to buy the products. For an example, there are many items are written in the menu book, and sometimes it is very hard to understand the real taste of the food or beverages. In this particular coffee shop the service providers must provide some suggestion for selecting the food for the new customers. These small helps would bring a great difference in the field of customer satisfaction. The intangible experiences of the customers are very important (Lancaster & Reynolds: 2005). Process: This particular functional activity is actually the procedure or mechanism and flow of work towards the service. The proper process can be a great positive point towards the delivery of the best service. Mainly for the business like pubs, restaurants or conference halls the process is the ultimate functional activity which must be perfect to satisfy the customer. The process to deliver the satisfactory service in any shop is very vital (Lancaster & Reynolds: 2005). The services in coffee shops: It is hard to find a satisfying customer in this competitive business environment. The particular coffee shop needs to understand that the coffee shop is not just another coffee shop. It must have all the services. As mentioned before people don’t come for just a coffee in a coffee shop, they look for a great ambiance and a great time out. The coffee shops must have a long menu with salads, soups, cakes and sandwiches and the services are expected to be fast enough to impress the customers (Us Dept of Labor, Bureau Of Labor Statistics: 2004) For this particular reason a coffee shop must have many services. A complete coffee shop must have different in-house segments like beverages and bakery, and sometimes some other value added services like reading and gaming facilities. These are the operating activities which must be there to measure the customer satisfactions (Godsmark et al; 2004) There are many other services are there which must be executed properly for a complete operation in the coffee shop and they are, 1. Outside landscaping, 2. Parking facility, 3. Ventilation and cleaning service, 4. Heating and Air-conditioning, 5. Music, 6. Proper refrigeration, 7. And basic hygiene like cleanliness (Godsmark et al; 2004). The quality of conformity and the quality of design are also very much important. Delivering quality through foods and beverages is the best option for the better customer satisfaction. Food is the product of the coffee shop so the quality of the food must be maintained properly. The food quality must be maintained to avoid the most common complains of the commercial food with all the statutory standards (Schroder, 2003). Fresh quality food must be delivered. There are some awards and standards which must be taken under consideration and they are the Baldridge award, TQM, customer satisfaction measurement (CSM), Customer value management (CVM) etc. These are the factors which are the standards of the high quality services (Cronin, Jr, Brady & Hult, 2000). Identifying the problem: Identifying the major problems related to the customer satisfactions is major concern of the organization like the coffee shops. It is basically the franchising business and there are several owners related within the organizations. However, the decentralization is maintained within the organization for taking fast decisions but, the brand identity and the customer relation is maintained by the operation managers under the strict vigilance of the management. One of the main problem related to the customer satisfaction is the building a strong relation between the marketing and the operation team within the branches. Another concern is the retention of the existing customers. 5 GAP model of service quality: The five gap model is very important to find out the gaps within the organization which might affect the service quality of the organization. The needs, requirements and the perception of the customers must be understood properly to bridge these 5 gaps for delivering the best quality services according to the customer’s expectations. According to Kotler (2008) the relevant five Gaps are discussed bellow. Gap 1: Management perception versus consumer expectations: Many times the management of the hospitality industry has failed to understand the requirement of the customers. This is the gap which is very common in most of the cases. This is the gap which tells the organization to deliver high quality service which satisfies the customers (Kotler, 2008). For an example a coffee shop manager may implement a system where a customer doesn’t have to wait for more that 15 minutes to get the food on the table (Kotler, 2008). Gap 2: Service quality specification versus management perception: This particular gap happens due to many reasons. Most of the time this occurs while managers know what to do but they don’t have adequate supportive service quality (Kotler, 2008). Few of the reasons are improper commitment, lack of perception, bad service quality and absence of goal setting (Kotler, 2008). Gap 3: service quality specification versus service delivery: This is basically the service-performance gap. This gap happens when the manager of a shop knows what to do for the better service but, the employees are unable to understand or sometimes unwilling to work accordingly (Kotler, 2008). This is basically a communication gap within the organization. To bridge this gap the proper standards must be maintained within the employees of the shop. Gap 4: Service delivery versus external communication: This is a gap which creates lots of confusions among the customers. This is a gap between the extensive commitment towards service and the actual service can be delivered. In this gap the shops commits to deliver more but it fails to deliver the commitment accordingly. The high profile advertising campaign can be a cause of it (Kotler, 2008). The false impression of great services is a fatal approach. Gap 5: Expected service versus perceived service: This is a gap which is basically the combined effect of the all other four gaps. If the gaps of other four factors increase then this gap will automatically increase. The expected quality is the combination of all the services delivered according to the commitments made. If the gap between any of the services and the commitments increases then the fifth gap will also increase (Kotler, 2008). This five gap model is very important to analyze the existing Gaps within the coffee shop operation and to bridge the gap accordingly to satisfy the customers. The importance of customer Loyalty programs: The customer loyalty programs are the most effective way of satisfying the existing customers in the recent time. The main aim of the loyalty programs are to retain and win back the customers. According to Reichheld (1996) acquiring new customers are much more costlier than retaining the existing ones. The retention of a customer saves lots of money cost. The loyalty programs are beneficial in two ways. Firstly they lengthen the customer relation and second they enhance the customer share. And, loyalty programs related to the financial or economic discounts are more effective in case of customer retention. (Baran, Galka & Strunk: 2007). Services provided in the coffee shop must be enjoyed by all the customers. Methods of Loyalty programs: The loyalty programs should be structured in such a way that they should be very much encouragble for the customers. The loyalty programs help in a word of mouth promotions. The loyalty programs should also provide some money incentives for bringing the family members to the program network. Companies are asking for more and more information about the customers. These information create a huge data base of customer information which helps in running the loyalty program in a systematic manner. There are many methods and many ways to execute a successful loyalty program. Generally these loyalty programs are done with price discount. In USA ninety percent of all programs are based on price discount, (Butscher Stephan A. 2002). However, the loyalty programs which are related to the price discount don’t have a great value as it does not treat special customer at special way and, these kinds of loyalty programs can be replicated by the competitors. (Butscher Stephan A. 2002). The primary factor in the hospitality industry is the customer loyalty programs but, the vital question is how does it affect the customer’s mind? Service industry is very much dependent on their customers as in this kind of industry the revenue increases from the customers who purchase the service in a repeated manner as the loyal consumers on the services. In this part of the industry the behavioral trait of the target group (TG) plays a vital role for the success of the hospitality business. Research work: The research work in this paper is strictly based on the surveys, interviews and in-store feedbacks. The coffee shop must do these data collection methods to get the proper customer feedbacks. And these feedbacks must be documented and analyzed properly to maintain the service and to find out the gaps within the services. The primary data are collected through different techniques such as survey questionnaires, interviews and observations (Zikmund, 2003). Likert scale has been used for framing the questions. There are several advantages of Likert scale (Kothari, 2008). Conclusion: The proper combination of all the seven ‘P’ s are very much important to build up the real physical evidence in the minds of the aged customers. Customer satisfaction is the ultimate word and ultimate solution for achieving the lingering success. From the above study it is very clear that a coffee shop is not only appoint of sale for a hot beverage like coffee, it is all about the delivery of the quality of committed services. The TQM and the QFD have given a great significance towards the development of the better service quality within the shop. The 5 Gap model has also very important to find out the loopholes within the organization. The relevant books and journals about the service quality in the hospitality industry have given a great strength to this paper. However, the proper combination of good services and loyalty programs would help to create customers who would be the long term customers for the coffee shop. And for that the customer satisfaction is the ultimate word. References Baran Roger J, Galka Roger J & Strunk Daniel P. 2007. The principle of customer relationship management. New Delhi: Cengage Learning Brink A & Berndt A. 2009. Relationship Marketing and Customer Relationship Management. Claremont: Juta and Company Ltd Buttle F. 2008. Customer Relationship Management. Massachusetts: Butterworth-Heinemann. Butscher Stephan A. 2002. Customer loyalty programmes and clubs. ALDERSHOT: Gower Publishing, Ltd. Crane F G. 1993. Professional services marketing: strategy and tactics. London: Routledge. 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