Customer Satisfaction in China - Literature review Example

Literature Review: Satisfaction Literature Review The review will examine the genesis of literature in the customer satisfaction field as different authors try to decipher the meaning of the customer relationship methods in place today. It will feature different retailers and more so the environment in China, and ways of making customers satisfied to keep coming back to these retail shops. It will examine the meaning of customer relationship, the role it plays in the Chinese market, customer views, and expert reviews regarding the use of CRM in China. Definition Several marketers use this term as a way of defining the measure of the products and services that are supplied and meets the customer’s expectation. Some consider the fact that the products surpass customer expectations as the only means of providing them with the ability to understand the impact that their products have in the market. They take this as a sign of meeting the demands, and allowing the customers to define the way the brands, tastes, and quality of the products and services offered (Grogoudis, Nikolopolous and Zopounidis 2008: 442). Each company, therefore, has to set some satisfaction goals that will determine how well their products are doing. The percentage of the customers who consume the products within a given time frame and share positive experiences regarding their experience define the level of success for any of the products on offer. Companies can rely on this factor rely to measure the number of return clients they will get in a given period, because it provides them with a chance for word-of-mouth advertisements by happy clients (Wen-Cheng, Ying-Chang and Ying-Chien 2009: 85). Many retailers use this as a major performance indicator regarding their strategy in providing the very best supplies for the company as a whole. Customer ratings are seen to possess several critical aspects for any organisation because it defines the sales and revenues enjoyed by the company as the clientele increases. In a country where innovation is high such as China, customer satisfaction is a key differentiator that plays an essential role in determining the profitability of the organisation (Gomez, Mclaughlin and Wittink 2004: 268). As such, companies have to create their niche by looking for the different means of improving their produce as well as ensuring they improve on their quality so as to satisfy the inherent demand. The notable issue is that expectations are quite important when determining satisfaction. In most cases, the prevalent national culture will be an excellent determinant of what constitutes satisfaction and determines the limit amongst the consumers. The regulations in place will either hinder or bolster competition, which means clients will have a chance to make their choices based on what they can get. In countries where competition is low, the companies have a higher bargaining power, and that diminishes the customer’s satisfaction choices. Where competition is high, the customer has a higher bargaining power; hence, organisations have to create better products to attract clients. Customer satisfaction in retail shops in China In the previous years, the retail shops have gained much support from locals because of the crossover revolution that is taking place as they begin to provide multiple services. Some have become the beacons of hope for the local communities because they slowly turn into small convenient stores that can offer coffee, fresh vegetables, dairy fresh foods, while other have a mixture of different grocery items. This shows the importance of having better customer satisfaction aspects as they look to make all their clients happy within the same sphere. Supermarkets in some places in China have negative associations, with some of the poorest in the community associating them to the rich. They see them as a symbol of class divisions where the poor rare go while the rich are happy when in such areas. Nonetheless, the diversification of these retailers has become a source of innovation that allows them to deal with several products at the same time for the sake of satisfying the community as a whole. It is critical to be competitive by understanding that the main attraction to any client is the service offered and the quality of the products on offer. In some cases, there is the fear of getting quality products because of the costs involved. However, clients are vital because they can either lead to the prosperity of the shop or its demise. As Xu, Ye and Zhang note, these fast-developing retail shops have to diversify and offer necessary competition by setting the requisite standards to cut a niche in the already crowded sector (2013: 46). In a country where the population is divided between the rich and the poor by a gap that is continually widening, retailers can take advantage of this as a way of creating their own competitive shops across the country. The bigger shops will not all make their way to the least developed areas, but smaller shops, due to their ease in management can make it in these areas. The significant thing is to understand the importance of customer satisfaction in the country. Satisfaction is divided into two parts: economic and social satisfaction. Economic satisfaction emerges from the reprieve attained from the tangible products sold by the retailers. It is also negatively associated to pricing, which means the retailers must understand the impact of price sensitivity. Social satisfaction occurs as a result of the encounters that one has with the retailers. In China, the main complaint is that online retailers offer the best social satisfaction compared to the traditional ones. Erickson (2014) notes that the online shoppers were happier with the services offered by both local and foreign retailers compared to the traditional retailers. Regardless of the industry they were in, online shoppers seemed to have positive remarks for online shopping compared to physical one. Whether this is true or not depends on the age and the demographic. This is because the younger generation will think of the growing technology as the best way of doing with the growing need for ease in doing business compared to having to go to physical addresses for any purchases. This is one way that retail companies have began capturing the younger generation, based on their desire to stay relevant in the changing environment (Gomez, Mclaughlin and Wittink 2004: 270). Wen-Cheng, Ying-Chang and Ying-Chien agree that the changes that have taken place in the country have led to changes in the customer needs (2009: 86). The implication is that these individuals have to meet with their needs, come up with programs that will relate to their emotions, allow for fairness in pricing, as well as be convenient enough to meet their immediate needs. The retailers have to stay updated and conduct as many customer surveys as possible to allow them understand what works best for the people as well as what they need and how they need it. Offering some of the benefits is not enough in the competitive world. As Berry notes, the shoppers want everything through a comprehensive reward program that relates to all their needs (2005: 86). Retailers need to learn from bigger retailers and more established international franchises such as Wal-Mart. In a period of two years in China, Wal-Mart had more than 10 million people using its loyalty card system. The main aim of such cards is to offer clients a chance to benefit from various offers that come with being a loyal client of the supermarket. Such as the loyalty programs clients are looking for because the benefits awarded allow for the greater utility of what they have and provides clients with opportunities to save more money and shop at the same time. Some companies create partnerships with such retailers and offer clients extensive benefits for being a loyal customer (Griffin 2002: 56-7). Actually, Sweeney and Swait report that a China chain store survey was held to check on customer satisfaction. Those with customer loyalty programs were only 18% and close to 44.4% went to more than one supermarket on a regular basis (2007: 182). This shows the laxity in taking advantage that increasing customer satisfaction could have in meeting the demands of the organisation. If traditional retailers took advantage of this, it could be easier to outdo the online shoppers because they could still have the bulk of older generation to rely on as they source for different ways of attracting and retaining the younger generation. Lukoma notes that it is critical to take advantage of the competitive nature of the society today and realise the benefits it offers to the business (2011: 1). If the retailer can take care of the existing clients, it becomes easy to increase customer patronage, improve on customer loyalty, and encourage positive word-of-mouth, which is important in the generation of publicity, as well as increase the number of referrals and references for the business. It is notable that China has a very large population that retailers can take advantage of and expand their businesses. With such a diverse population, it is easy to meet their demands by understanding what they require and how to close that particular gap. Monosr and Ali (2010: 134) state that the best way of dealing with such a large group is by understanding a very simple framework. Customers will late to the business based on the way the retailers will relate to the customers. The quality of the service provided, the attitude while doing business, the interest in the particular business, and the risks the retailers will undergo if they neglect their clients. If the clients perceive honesty and good attitude when doing business with any retailer, they will want to go back because of the elicited social satisfaction. Wong and Sohal (2002: 425) opine that the level of service quality offered will be a great determinant towards the benefits accrued by the clients. They also state that the kind of relationship between the employee and the employer will be a key attribute towards the realisation of a better quality offered to clients. The employees are in direct contact with the clients, and if they are satisfied in their jobs, they will be inclined to reflect the same to their clients. Shaw and Haynes also understand the impact this has on the clients because they see the employer as the determinant of the far the employees can go in their interactions. The same employers are supposed to offer diversified resources that employees can use to serve the clients satisfactorily (2004: 172). Zielke and Dobbelstein (2007: 115) noted that customers were only willing to shop in retail shops that continually updated their products to meet their desired needs. Some retailers were noted as being quite uninterested in their clients that they did not bother to update their products to meet their needs. Every day, new products are emerging and clients to shop for the retailer who understands that the new brands could be part of their tastes and stocks these products. This assures the clients that the retailer is well aware of the trends in the market and can make better choices based on the available responses from their clients. Others will look at the quality and product position that attracts and retains them (Berry 2005: 86). Chu (2002: 1), however, brings a new twist to the whole customer satisfaction discussion. Chu (2002: 1) notes that customer relationship is one of the pointers towards having better satisfaction. Retailers need to make this a habit and this breeds the necessary experience the employers can use to meet the demands of their clients. As such, the current struggles that retailers are going through should be a pointer towards the increased need for distinguishing themselves from their competitors. Chu (2002: 1) argues that retailers have to invest in making their clients their core aspect in the business because they determine the way forward. This also allows them to make good use of their communication and interpersonal skills increase satisfaction and profitability. If retailers want to be profitable, the only thing they have to do is understand the mechanisms of customer relationship and manage these interactions appropriately. A successful implementation of this allows for the increased customer retention incidences, lower customer-acquisition costs, as well as higher profits from increased customer satisfaction. Retailers should yearn for these benefits, but the unrealised potential can only be possible through intense understanding of what clients want, how to gauge the changing dynamics, and manage these changes appropriately for the sake of the retail shop (Ciavolino and Dahlgaard 2007: 549-50). Customer satisfaction amongst Chinese shoppers will only be possible if the retailers take into account the improvement of their quality of service. In essence, the importance of the services will only be possible if it includes the different attributes that aim at improving the growth or the retail shop while factoring in attributes of client satisfaction. These include facility layout which includes the display of products, a clean and inviting environment, clear labelling of the products, accessible location, queue management systems that allow for less waiting time, convenient operation hours, as well as product quality and variety. Clients want to enjoy their shopping experience, and the online shoppers are happier because of their ease n accessing products, clear pricing, and the ability to shop at their convenience. By having a physical shop, it means the retailer has to offer similar services at all costs (Ciavolino and Dahlgaard 2007: 550). Importance of customer satisfaction Many have sought to demystify customer satisfaction, and the numerous studies available are a good explanation of the benefits that can be accrued from proper management of clients. The importance of customer relation is commonly disguised by various indicators, which are necessary for any business. First, proper management leads to an increase in the indications of client repurchases and loyalty. This is an essential pointer because it allows for the growth of different attributes that indicate satisfaction rates and leverage the company against its competitors (Chu 2002: 6). If the number of clients is low, the business is able to understand that its problems and has to look for ways of reinventing itself to remain relevant (Griffin 2002: 210). The competition is quite high and that means there are several other business people looking at taking control of the customers if no one takes advantage of the opportunities present. Customer satisfaction is a good point for business differentiation (Chu 2002: 7). Most retailers use their understanding of the clients as their main selling point. If clients are happy with a product from one business, they will recommend it to their friends and that has more weight compared to trying a business for the first time. Repeat customers are critical when it comes to having a better lifestyle for the realisation of maximum benefits. It is always imperative to ensure that the customer is satisfied because it means the individual will spread a good word on behalf of the retailer to friends and family (Griffin 2002: 215). Another benefit is that it is a good way of reducing customer churn (Chu 2002: 7-8). Customer churn, as researchers found out, is mainly caused by poor overall quality experience as opposed to pricing strategies. If customers view a retail shop as having the qualities they desire, they will frequent the shop and become loyal customers. This increases their ability to sell out the retail shop to friends, making it easier to gain new clients without even having to create advertisements. Retailers, therefore, need to look for ways and means of exceeding customer expectations so as to appeal to new clients at every opportunity (Xu, Ye and Zhang 2013: 48). The retailer, therefore, has to install new mechanisms of measuring satisfaction and try to exceed these measures at all times. Understanding the implication of positive and negative measures will improve satisfaction, and in turn increase productivity. Retailers should maximise on this ripple effect (Griffin 2002: 220). The supreme goal as a retailer, other than making profits, is to increase the customer’s lifetime value. When dealing with clients, the products offered in a shop determine the value the retailer is adding to the society. The fake products are going to reduce the lifespan of an individual, and could lead to mortality. Quality products will lead to better lifestyles for the customers because they can access helpful products for their bodies (Xu, Ye and Zhang 2013: 51). The retailer will also gain respect for venturing into legitimate business. Satisfied customers increase the income generated because they have increased their loyalty. The retailer benefits from customer lifetime value. This only becomes possible if the client can keep coming up and spending more. This means the retailer has to ensure that the products are as diverse as possible allowing for increased returns for every marketing dollar spent (Griffin 2002: 223). Good customer service is essential in limiting the negative word of mouth present. Chinese believe their kinsmen more than they do to strangers. As such, retailers in the country have to make sure they deal with their clients well and encourage reduced negative word of mouth (Griffin 2002: 225). Word of mouth is one of the most powerful advertising forms that can hinder chances of growth and development for any retailer. Good customer service is a cheaper means of acquiring new clients and a cheaper way of retaining the too. Thus, the important aspect is to determine what the clients want and look for ways of giving it to them. Conclusion This review is specific to any retailer wishing to utilise customer satisfaction as a means of improving profitability. It aligns the different defections offered on satisfaction and allows the reader to understand the Chinese market and its clients. There is potential in all sectors with the protection of labour being one of the paramount concerns amongst the retailers. Proponents of customer satisfaction outline different benefits of customer satisfaction and the review captures this as well. To improve any business, customer satisfaction should be the top concern for all entrepreneurs seeking to get into the Chinese market. 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