Consumer Loyalty - Marks & Spencer - Case Study Example

CONSUMER INSIGHT PROJECT2 By Table of Contents Executive Summary 2 Introduction 3 Methodology 3 Conclusion 15Recommendations 16 References 17 Executive Summary In order to show how a company’s business operations can attract or block customers’ loyalty, a primary survey investigating how participants perceived Marks & Spencer (M&S) was conducted. The survey used primary method of data collection using a questionnaire as the research instrument. 103 questionnaires were issues upon which 3 were disqualified based on the participants’ lack of knowledge about M&S. Data was computed and graphically analyzed using statistical software, SPSS. Results indicated mixed perceptions of customers towards the business operations of M&S. It is was observed that the company offered reliable communication platform with customers, offered information regarding quality of products and services, and also connected with customers through provision of social approval. Factors affecting customer loyalty were observed to relate with the company’s products’ range, brand choice, and degree of workmanship within its business line. Introduction The survival of a profit-oriented business model is based on how much it is able to generate sales and retain customers (Chacon, & Mason, 2011, p. 271: Castañeda, 2011, pp. 380-383). Customer loyalty depends on the number of factors that the customer considers when choosing one retail establishment over another (Jason, Zhang, Dixit, & Friedmann, 2010; pp. 127). Based on a primary research conducted to investigate the factors that attracted customers to Marks and Spenser (M&S), this report seeks to show the connection between an establishment’s business operations and their role in influencing customer loyalty. The report comprises of four major sections among them the introduction, methodology, results, and analysis & interpretation of the results. Other sections of the report include the executive summary and conclusion which provide insight of what the report is about and the main observations made throughout the research. The report provides insight in how consumer loyalty is influenced by a business model’s approach to marketing as well as interaction of the establishment’s internal environment and potential customers (Kumar, Sharma, Shah, & Rajan, 2013, pp. 57-60). Methodology The research uses primary research method to collect data from a sample of 103 participants. 103 questionnaires were issued to a sample of 103 from which 3 of the questionnaires were invalidated for the participants did not have knowledge of M&S and could therefore not qualify to respond to the. The questionnaire consisted of 9 areas for filling up which focused in the way participants associated with M&S. Section one of the questionnaire aimed at engaging the participants with basic requirements were demanded. Section two of the questionnaire requires participants to identify whether they shopped at M&S or not. Section 3 included questions that needed participants to identify various variables under specified areas. The usefulness of the first section is shown in that it helped the research to isolate participants that did not know M&S. Following the need to showcase whether customer loyalty was registered with reference to the quality of operations the business model is associated with, the questionnaire aimed at enquiring whether there are connections between how customers viewed the retail establishment and how the establishment engaged the market. Data collected was fed into a MS Excel worksheet and imported to SPSS for further analysis and graphical presentation. With reference to the SPSS functions applied on the data, SPSS-histogram function was the most useful as it offered the analytical insight into how, in general, positive views compared with negative views regarding how participants rated M&S. In the data analysis, SPSS was used to show how differently positive views were at the highest and lowest levels. Based on the fact that a Likert-6 scale was used, where 0 indicated the highest level of negative views and 5 the highest of positive views. By comparing how participants responded to a set of focused questions and how the variables tested in each are perceived individually. For instance, in the testing of how participants rated M&S products, cumulative positive and negative views were considered while specific variables such as quality standard, the data aims to show the specific variables and how they attract customer loyalty as well as how they influence high customer turnover are considered. Results Variables Observed Frequency Percent Valid Percent Cumulative Percent Valid Assisted others at the time of making purchase 1 3.4 3.4 3.4 Communicated with personnel of M&S 1 3.4 3.4 6.9 Consistency of quality 1 3.4 3.4 10.3 Degree of workmanship 1 3.4 3.4 13.8 Delivery and collection services 1 3.4 3.4 17.2 Excellent 1 3.4 3.4 20.7 Favourable 1 3.4 3.4 24.1 First choice for clothing 1 3.4 3.4 27.6 First choice for food products 1 3.4 3.4 31.0 First choice for home products 1 3.4 3.4 34.5 Good 1 3.4 3.4 37.9 Importance of its eco-friendly products 1 3.4 3.4 41.4 Loyal to the brand 1 3.4 3.4 44.8 Participated in surveys 1 3.4 3.4 48.3 Products and services offered are of quality standards 1 3.4 3.4 51.7 Products are priced reasonably 1 3.4 3.4 55.2 Provided information about product quality 1 3.4 3.4 58.6 Provided information about service quality 1 3.4 3.4 62.1 Purchasing from M&S leads to pleasure and delight 1 3.4 3.4 65.5 Quality standards of products 1 3.4 3.4 69.0 Satisfactory 1 3.4 3.4 72.4 Top Brand 1 3.4 3.4 75.9 Value of products for money 1 3.4 3.4 79.3 Would ascertain convenience for store locations 1 3.4 3.4 82.8 Would ensure in having better consideration for brands 1 3.4 3.4 86.2 Would ensure to be environment conscious 1 3.4 3.4 89.7 Would lead to self-satisfaction 1 3.4 3.4 93.1 Would motivate towards quality standards 1 3.4 3.4 96.6 Would provide social approval 1 3.4 3.4 100.0 Total 29 100.0 100.0 Table 1: Research variables and Validity As Table 1 shows above, there are 29 observations made throughout the research which aimed at showing how participants related to some of the statements and questions. With reference to the number of participants considered for the research, 100 questionnaires were collected and data entered into an excel file and computed using SPSS. Table 1 above is a SPSS output table that confirms that each of the variables for the research were tested only once and that the output compared to other SPSS outputs generated to show how positive and negative views regarding M&S’s customers’ satisfaction compared. Following the output of table 1, the validity of the data variable was confirmed across other outputs that relay on the number of variables to validate the entire research. One assumption in this research is that variables under any observed area should be represented 100% to ensure validity of the entire research since it aims at making use of all variables customers consider before they are regarded as loyal to any specific business model. The output from the SPSS histogram functions show results on how highly positive views are distributed along the sample. The outputs also show the most negative views to point out areas where M&S should re-strategize in order to attract and retain customers. Are you aware of Marks and Spencer (M&S)? Yes No 100 3 How many times do you visit M&S in a month? Once Twice More than twice 37 11 52 The reasons for your visit to M&S Clothing Home products Food products All of the above 22 19 18 41 Table 1: Section 2 Responses Section of the questionnaire involves short ungrouped questions which aimed at testing how much participants knew about the focus entity, M&S. Initially, the number of participants who took part in this research was 103 from which 3 of the participants indicated they were not aware of Marks & Spencer. The 100 that indicated they knew M&S were considered for the analysis and the 3 did not qualify to continue with the research. This was because the research was specifically targeting M&S and could not include participants who did not have the knowhow of the subject matter or the focus of the research. Analysis and Interpretation Graph 1: Top Rating Frequency for Properties Observed From the results of the research it is observed that the distribution of positive reviews regarding the products offered by M&S. In this case, the number of variables considered under the company’s products relate to how the company’s products are perceived by different customers. For the most positive views, only 21 of the participants agreed that the company’s products range was satisfactory. With respect to the variables tested under this property included the quality of products, consistency of the products’ quality, value for money when buying the products. Pricing of the items sold, workmanship, delivery and collection services offered, and how customers’ perceived the company’s green-initiative on some of its products. On the aspect of how participants perceived buying products from M&S, it was observed that the most positive views varied from those of the products themselves. 18 out of the 100 participants indicated that they were highly satisfied in shopping at M&S. The variables tested included the satisfaction acquired from shopping at M&S, the rating of the shopping environment, association with quality standards, ensures better choices in brand selection, is convenient in terms of location. The association of these factors with customer loyalty is that variables such as the level of customer service offered and how it creates a reliable and acceptable environment for shopping. On the other hand, the business environment of M&S affects the manner in which customers rate it on other aspects such as space, business friendliness of personnel, and the pace at which customers are served. In addition, variables such as convenience on location affects the flexibility of customers as well as how accessible the establishment was to customers. If the locations of the establishment’s stores were not easily accessible to the customers, other retail establishments would take up on the customers-traffic nearest to them. Among the poorly rated properties regarding the variables related to customers’ preferences and tastes involves the views of participants on brands, choice of clothing, home products, food stuff, service and quality match expectations, and buying from M&S is delightful and pleasurable. The poor rating for the combined set of these variables is possibly influenced by the fact that brand factors are not mostly the company’s responsibilities as it orders from suppliers (Leonidas, 2013; pp. 397-400). However, the lack of satisfaction is associated with the fact that the company has not researched customer demand patterns as well as the customers’ response to social trends which affect the manner in which customers respond to brands, fashion items such as cloths, home products such as basic consumer products, and food products such as vegetables and cereals (Michael et al, 2012; pp. 81-98). Under the overall rating of the company, it is observed that 18 out of the 100 participants considered the company good. This rating is influenced by other areas such as products range, product quality, business environment, customer service, brand selection, sensitivity to customer trends, and the overall satisfaction it creates on its customers (Liu-Thompkins, & Tam, 2013; p. 21). The variables observed under the company rating included whether the company was considered good, favorable, and satisfactory to customers. The combined rating of the company with reference to the highest positive rating involved the views of 18 out of the 100 participants. From Graph 2, it is observed that the distribution of participants at rating the company is 16, 18, and 15 under satisfactory, good, and favorable variables. Graph 2: Frequency of Positive Views under variables observed When considering the entire set of variables observed, table 2 shows that some factors affect customer perception of M&S more than others. It is the highly rated areas that affect customer loyalty the most and therefore M&S should consider them the current highest grossing areas in terms of attracting and retaining customers (Murray, 2013; pp. 150-164). Among the highly rated variables among the total set of 29 include participants’ views regarding how the company was able to provide information on products, the social approval the company provided, ensures better choice of brands, and provided motivation regarding quality standards (Zhang, Dixit, & Friedmann, 2010; pp. 127; 139). Among the poorly rated areas under the top positive reviews include the choice of customers in considering the company their first option (Alexis, 2013; pp. 140-145). This shows that the company’s customer loyalty is low as poor rating under the number of participants willing to make the company their first choice is limited. However, under the highly disagreed areas, Graph 3 below provides a summary of the observed properties (categories of variables). Graph 3: Frequency of poor views for Properties Observed The number of participants providing negative views about their overall rating of the company was 3 out of the total of 100. The rating of the company’s products as observed earlier considers how good, satisfactory, and favorable the company was to customers (Martos-Partal, & González-Benito, 2011). The overall rating for products offered by the company showed that the total number of extremely poor views was 3. The rating of the products considers how good, favorable, and satisfying the products are to the consumers. Under the reviews of the company’s products, the lowest number of negative feedback was registered as only one individual under the entire category considered the company’s products extremely poor. The variables tested under products rating considered factors such as pricing, quality, quality consistency, and the association of the company with quality standards (Castañeda, 2011; pp. 371-383). Graph 2: Frequency of Poor Reviews under the Variables Observed Under the highly rated areas within the M&S include communication with M&S customer care, delivery and collection, the quality of the products and services offered, provision of products and services’ quality information, pleasure gained from shopping at M&S, the quality standards of the company’s products, the satisfaction gained from shopping M&S products, how the company leads to self-satisfaction, the motivation towards quality standards, and how the company supports social approval among its customers (Garnefeld et al. 2013; pp. 17-32). Based on this information, it is confirmed that the output generated under graph 4 resembles the interpretation of graph 2. Since the two graphs, 1 and 2, investigate the same variables at their highest and lowest levels; it is observed that each shows the opposite phenomenon of the other. For instance, communication with M&S customer service is one among the highly rated variables under the highest positive views considered under graph 2. On the lowest number of negative views, communication with M&S personnel has the fewest views showing that the validity of positive views under graph 2 is significant in this case. However, among the lowest ratings with the highest number of views include the degree of workmanship, M&S being the first choice, and consideration of M&S to be the top brand (Terblanche, 2013; pp. 185-200). These results show that M&S is partially unable to connect to the entire market as customers do not consider the company the best brand. Additionally, customers do not consider the company as one that they would choose first when others are in existence (Melnyk, & Osselaer, 2012; p. 545). In addition, the factors that affect the view that customers have better choices with other companies shows that the competition is doing a better job at ensuring that customer demand is met with quality products, more desirable brands, and the company’s brand is currently facing a threat from other companies with a better focus on customer service delivery (Huang, 2011; pp. 115-133: and Shiri, Vivek, Beatty, & Morgan, 2012; p. 127). Conclusion This report aimed at showing how a primary survey on how customer loyalty is influenced by factors such as a retailer’s products range, products’ quality, interaction with the company, the connection of the company with the target customer’s social trends, and provision of satisfaction to customers. It was observed that in terms of pricing, quality of products, brands, choice to shop at M&S as the first option, and the association of the company with quality standards; the company incurs inconsistent views showing that it has no competitive advantage under these variables. On the other hand, the research results show that the rating of the company’s products is poorest under all the properties observed. The variables under products rating include the company’s selection of brands which is not favorable to most of the customers. However, among the areas that M&S is seen to be performing best with customers include the level if interaction of customers with M&S’s personnel. In this case, it is evident that the company’s customer service is a priority as the research showed close relationship between communication of customers and the company’s service providers. In addition, the above point in appraising the personnel’s response to customer needs is supported by the fact that the research survey shows that customers show high satisfaction levels with reference to information on products and services. Recommendations Based on the survey regarding customer loyalty to M&S, it was observed that the company was not doing well especially in the brands it offers to its customers. In this case, is it recommended that the company invests on information systems (Mende, Bolton, & Bitner, 2013; p. 125) to aid in forecasting customer behavior as well as in interpreting customer satisfaction levels with reference to the brands it offers to them (Rogers, 2011, p. 221-242; Algesheimer, Borle, Dholakia, & Singh, 2010, p. 758; He, & Li, 2011, p. 673). The company’s ratings regarding it being the first choice for shopping home products, clothes, and food are poor under positive views and significant under negative views. This shows that the company is not connected with its customers’ demands and it is not able to retain customers based on the fact that its products range does not resemble changing customer preferences within contemporary market place (Praveen et al, 2012; p. 217). Therefore, as a recommendation, the company is required to adapt a customer relationship management policy to ensure that customers’ demands are addressed economically, sustainably, and customer retention based on developed loyalty is achieved (Rogers, 2011, pp. 3-7; (Lacey, & Kennett-Hensel, 2010; p. 581). Lastly, the company is observed to have poor ratings in its workmanship and brand (Lu, Musalem, Olivares, & Schilkrut, 2013; p. 1734-1745). Thus, to rectify these challenges, the company should rebrand if the current M&S brand is losing footing based on various management issues that have been linked to the company’s past (Subramanian, Raju, & Zhang, 2014; pp. 498-499). 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