Quality Management Philosophies and Customer Satisfaction of Creta Olympias SA - Assignment Example

1.0 Company Information Creta Olympias SA is a wine producing company operating in the Greek market for over three decades. Being founded in 1973, the company has presented a remarkable course of action – mainly attributed by an up-warding trend; a fact that respectively constitutes Creta Olympias among the major players. In a highly competitive environment, the company has managed to sustain a respectable position in the overall market by producing and selling bottled wine, characterized by high quality in both the materials used and in the production process. It currently maintains a large manufacturing unit with a capacity of producing 960.000 lt of wine yearly, and bottling of 3000 wines per hour. The headquarters of Creta Olympias are sited in Athens, while the company also holds two subsidiaries in Thessaloniki and Crete; as a part of its location strategy, aiming at covering the key geographical markets in Greece. 2.0 Identifying Customer Needs Identifying and properly addressing customer needs, wants and expectations becomes the core and underlining aim of virtually every firm around the globe that engages into a profit seeking and profit maximizing behaviour (Kotler, 2002). Firms exist in order to yield profits and generate increased sales and revenues. In turn this implies that firms indirectly exist in order to serve customer needs and cover market demand in an attempt to increase their market share. Identifying customer needs becomes critical in that it enables the organizations to market product or service offerings that can be effectively oriented towards achieving customer satisfaction and eventually customer loyalty (Baker, 2003). In this context, the measurement of customer satisfaction is an important process that allows firms to assess and evaluate their business operations, and their marketing programs. Creta Olympias SA is currently employing two fundamental ways to identify customer needs and wants. The company manufactures and sells wine in three respective groups of customers; the firstis the group of Hotels, Restaurants and Catering Services, the second customer group is the wine wholesalers and finally the third customer group accounts for the wine retailers (such as wine stores, supermarkets, specialty stores etc). Creta Olympias SA engages into discussions and consumer surveys taking place for the interest of each of these customer groups. As there is no direct relationship with the final consumer, the company leverages the knowledge on market demand possessed by wholesalers, retailers or hotels, restaurants and catering services (Ho, Re, CaS) The marketing and sales department of the firm maintain close relationships with the customer groups and receives feedback on market trends, competitors’ offerings and consumers’ tastes and preferences. Creta Olympias has managed to embed this relationship in the overall supply network interaction; the company has committed to a two way communication with its distributors whether retailers, wholesalers or HoReCaS basically with regards to ‘what customers tend to purchase the most’, ‘what customers value as quality wine’, ‘what kinds and types of wines are more preferred by consumers’ or ‘what bottling (packaging) is more appealing to consumers’. This actually proves very essential for Creta Olympias SA as it offers useful information on customer needs and customer wants and allows the organization to build upon this information during the design, manufacturing, marketing and selling of the wine products. The second way in which Creta Olympias SA identifies customer needs is the use of CRM applications. Customer Relationship Marketing tools offer significant information for large customer groups and high value segments (Baker, 2003). The company maintains a wide database of distributors and the sales to each respective customer group. In that way, processing the data and focusing on patterns of purchases, Creta Olympias SA manages to identify trends in the market demand and then break down to particular customer needs and preferences. The sales and marketing departments analyze and observe the information and data entered to the CRM programs (for every single sale to one of the customer groups or every single order being implemented) and eventually they identify issues like seasonality, increased demand for given products or even characteristics of the final consumer segments. Since each of the three customer groups (wholesalers, retailers and HoReCaS) addresses to different customer segments, the company is able to explore and identify the trends in each respective segment as addressed by the distributors. The use of CRM applications also allow the firm to develop a more consistent profile of the final consumer with regards to the different needs addressed by the different wine products. The combination of those two ‘methods’ for identifying customer needs and wants has proven very effective for Creta Olympias SA for two fundamental reasons: the first one relates to the feedback from the distributors (customer groups) who are in direct contact with the final consumers (which formulate ultimately the purpose of the company’s marketing directions) whereas the second one relates to the flexibility offered with regards to processing and analyzing the data (CRM applications) in order to identify various types of different customer segments and therefore different customer needs. In terms of measuring customer satisfaction, the firm engages once again into surveys and discussions with the salespersons of its distributors. Creta Olympias implements meetings between its marketing employees and the distributors’ sales employees, in which conversations on the basis of ‘perceived’ customer satisfaction are being held. These meetings take place every six months and the participants are required to have gathered relevant information (through consumer surveys for the salespersons) in order to provide feedback and justification in terms of the satisfaction of consumers. 3.0 Quality Management Philosophies and Customer Satisfaction Commitment to quality has become an imperative for today’s highly competitive environments where firms and organizations are striving for successful operations and increases in profits. Embedding and incorporating quality in the business functions is the underlining and underpinning theoretical proposition of virtually all quality management philosophies. According to Beckford (2003) there are several schools of thought or philosophies that have been developed since the first introduction of the concept of quality improvement by Edward Deming. Although Deming’s theories related more to the technical aspect of quality management and the use of statistical tools and controls in order to reduce quality defects, later developments on the subject suggested a more holistic approach to quality management and quality philosophy. Continuous improvement, zero defects and total quality control are some of the most significant contributions of the quality gurus to the entire concept of quality management. However, Total Quality Management constitutes a more consistent, integrated and systematic approach to quality commitment. Total Quality Management (TQM) is not an application or a process, rather it is an entire philosophy that stresses the importance of embedding the notion of quality in virtually every level, every business function, every procedure and every operation (Tari, 2005). Taylor and Wright (2003) define TQM as a philosophy that focuses on the improvement of quality in organizations as a means of increasing competitiveness and consequently customer satisfaction. While Deming’s orientation was more directed towards detecting quality failures or defects and Juran’s theory stressed the importance of constant improvement in processes, Total Quality Management is more concerned with the prevention of quality defects rather than inspection and correction. Quality Management philosophies, such as TQM emphasize the critical contribution of integrating and incorporating quality in every business operation. In this manner, quality becomes central to the mission of the firms and in addition to that, quality becomes the purpose of the organizations. With regards to customer satisfaction the adoption of TQM practices implies that quality is designed, developed and incorporated in the products or services and therefore it increases the prospects of customer loyalty. Committing to quality is all about committing to delivering quality products/services to the customers; thus it is self – evident that organizations focusing on quality management benefit on a two level perspectives; on the one hand they enhance their competitiveness in the overall market and at the same time they eventually manage to deliver goods or services that raise to the standards of quality demanded by customers. According to Baker (2003), consumers have been more sophisticated than ever before and this reflects their search over quality in what they consume. In that sense, organizations that are engaged into quality processes and into offering high quality products or services can gradually increase customer satisfaction. Creta Olympias SA is an organization that is focused on quality especially with regards to the ingredients and the taste of the wines that it manufactures. To this end, the company uses a quality control group (a group of employees who are accustomed to wine selection through wine tasting) to assess and evaluate every single barrel of wine that is to be bottled and sold to the customer groups. This way the firm ensures that only quality wines are marketed under its brand and therefore attempts to ensure that satisfaction on the part of consumers is attained. In addition to that, the company uses its own fresh and biological ingredients (such as grapes and flavourings) to further increase the quality of the products offered. 4.0 Marketing Mix 4.1 Marketing Mix for a product Product: Wine: Rose organic Maturity: 6 – 8 years (it adds prestige) Brand: “Creta Olympias: Rose Natural”. It emphasizes the country of origin and displays the quality of production and the quality of the raw materials used. Label: minimal; it provides a clear picture of the brand and promotes the simplicity of the nature of the wine (as well as the simplicity of the production process) Back Label: the back label includes information about the variety of the wine, the manufacture procedure, the quality of materials as well as the product certification Logo: the logo of the brand is handwritten in order to communicate the personal signature of the wine producer and the absence of any industrialized production or even packaging processes Bottle: the bottle is dark and reveals a high quality production Price: The rose organic wine addresses the high end customers that need to receive unique experience while consuming the product. In that extend the price range of the company’s wine is 15 – 17 euros. This price range is consistent with the pricing strategies of the competitors operating in the organic wine. Distribution: Creta Olympias distributes its product on HoReCaS and Wholesalers and avoids distributing to retailers such as supermarkets because it contradicts the uniqueness and sophistication of the wine. The distribution is as follows: 60% in specialized wine shops and specialized wine merchants 25% in restaurants and hotels 15% in the catering business Promotion: The promotional activities undertaken by Creta Olympias are: promotion on the end customer; through presentation of the particular products in selected wine shops and related seminars promotion on the wholesale and retail level; through sales promotion activities including special discounts for enlisting the wine in their selection or bonuses for reaching predetermined volumes of sales. The advertising campaign that the company has developed in the last years entails: - Specialty magazines (wine and drinks related publications) - Wine brochures - Lifestyle magazines - Add-ins incorporated in high circulating newspapers With regards to Public relations, the company engages in: - Sponsorships in seminars and national exhibitions (mostly culturally related issues and topics) - Sample bottles of the new wine will be given to journalists - Memberships in wine – associations - Participation in wine contests held both nationally and internationally 4.2 Marketing Mix for a Service As Creta Olympias does not offer services, the marketing mix refers to the Ps of a mobile telecommunication service. Product: wireless 3G telecommunications Place: store branches in virtually every neighborhood in UK Price: fixed ratio of 20 – 25£ Promotion: advertising on television prime time sponsorship of sports and events public relations through presence in various cultural events Physical Evidence: Stores that are modern designed featuring strongly the red colour which reveals superiority, authenticity and strength Elegant Brochures and booklets that present the company as well as its featured services People: staff that wear red stylish and modern uniforms to reveal consistency well trained and experienced salespersons that assist customers in decision making Process: the customers can purchase the service at spot (in the store) and complete the service order and service delivery at the same time customer service is also implemented by the stores 4.3 BCG Matrix The Bolton Consulting Group Matrix offers an evaluation of the product or service with regards to its relative position in terms of market growth and market share. Each of the four different categories imply that different organizational and marketing activities need to be initiated. Rose Natural (the wine of Creta Olympias) is a question mark or a problem child because it appears to be in a market that experiences high growth rates (due to the shift in consumers’ preferences over more natural and organic drinks and beverages) but with relatively low market shares captured by the company. This is mostly due to the fact that the product is relatively new and still hasn’t reached its potentials with regards to generating high sales and revenues. Investing in marketing of the Rose natural will most probably increase awareness on the part of customers and since it is in a growing market the prospects for become a star (high growth rate and high market share) are prominent. In terms of the service – 3G mobile telecommunications – it appears to be a Star. The growth rate of the wireless telecommunications is evident around the globe as more and more customers are engaging into using mobile phones. The particular service offered by the company experiences high acceptance and preference of the market (the customers) as it is the most popular and widely used service offered in the particular market. In this case the company needs to invest in maintaining increased market shares and eventually turning the Star into a Cash Cow. 4.0 Marketing Control and Monitor Control and monitor over the marketing processes is essential because it enables organizations to assess and evaluate the degree of effectiveness of the marketing tools and marketing practices in achieving customer satisfaction and in increasing overall sales generated. Once marketing plans are implemented they need to be reviewed and tested for their success in attaining the initial goals targeted by firms (Baker, 2003). Only this way can organizations measure the outcome of their programs or processes and eventually maintain current practices or modify ineffective marketing tools. Unsuccessful and inefficient marketing processes can generate increased costs for the organization; budgets allocated to promotional activities that have not the desired impact on consumer behaviour and on consumer decision making process for example. In a similar manner, ineffective techniques and marketing tools can have harmful effects on a given brand or even on a given organization (Kotler, 2002). Therefore, measuring and monitoring the suitability, the fit and the appropriateness of the particular practices employed by firms becomes critical in enabling marketers to design and redesign processes in order to serve the goals and the marketing objectives. With special regards to Cret Olympias SA the marketing place – having being implemented needs to be controlled in order to measure its overall effectiveness. Preparation of an estimated budget and sales generation should be present so that comparison with actual data is feasible. Moreover, on a case by case basis Creta Olympias needs to actualize a series of processes to monitor the course of action undertaken. It is critical, furthermore, to maintain relationships with the wholesaler centers, so that feedback and immediate response on the flow of the product can be obtained. Finally, with regards to the promotional tools that are deployed, the company needs to develop again a monitoring procedure to allow for results and responses of end customers to be screened. For this reason, on-the-spot attitudes and behaviors towards the organic wine should be in general reported. References Baker, M.J. (2003). The Marketing Book. (5th ed). UK. Butterworth-Heinemmann Beckford, J. (2003). Quality. (2nd ed). London. Routledge Kotler, P. (2002). Marketing Management. (11th ed). UK. Prentice Hall Tari, J.J. (2005). “Components of successful total quality management”. The TQM Magazine. Vol. 17, No. 2, pp. 182 – 194 Taylor, W.A. and Wright, G.H. (2003) “A longitudinal study of TQM implementation: factors influencing success and failure”. Omega. Vol. 31, pp. 97 – 111 Read More