Produce a case study comparing two business organisations, investigating the extent to which each has developed an effective customer service programme, and evaluating the effect of those programmes on customer satisfaction.

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AVCE Business

UNIT 16 – Customer Service

Task:  You need to produce a case study comparing two business organisations, investigating the extent to which each has developed an effective customer service programme, and evaluating the effect of those programmes on customer satisfaction.

The organisations that I am comparing are Marks & Spencer Plc and Tesco.

Marks & Spencer Plc

1(a) Describe the importance of customer service to each organisation.

Customer service 

Their Vision

‘Leading standards wherever we trade epitomises the Marks & Spencer approach to both the way we serve our customers and the way we run our business.

As one of the UK’s leading retailers, we have annual sales in excess of £8 billion. We employ more than 60,000 people worldwide, operate more than 400 stores in 28 countries, and serve tens of millions of customers every week.

Whether we’re working at home or abroad, within our own stores or in partnership with our franchisees, our Vision, Mission and Values remain the same. Ensuring we meet our customers’ needs with appealing, superior quality products at attractive prices.’

People are the lifeblood of our stores’ success

They launched their Foundations For Success programme to set out new ways of working in stores, and new levels of customer service to aim for. The initiative focuses attention on ‘power hours’, the key time of day when each different store is at its busiest, and everyone available helps on the sales floor. The programme also ensures regular team briefings and a concentration on all the little efficiencies and ‘shop keeping’ tasks that add up to making it really easy and enjoyable for their customers to shop.

Above all, it has encouraged colleagues to become accountable for the performance of their store. This, along with a new bonus scheme based on store sales targets where colleagues can earn a bonus above their salary, and the general recovery in sales, has seen a major leap in the motivation of the people within Marks & Spencer, which they believe now shows in the service they provide. They hope that by building on the Foundations For Success they can progress to the point where Marks & Spencer is recognised as the clear market leader for service standards.

Training also plays a major role in improved customer service, and they have decked out a ‘model’ store of 30,000 sq ft at White City for just that purpose. Colleagues visit to improve their sales and service techniques and learn about visual display principles. They have also implemented a training module for all their lingerie sales teams to help them advise

customers on the most appropriate underwear. Similarly, 500 colleagues working in their new Home service centres can take advantage of a customer service-training package. Uniquely on the high street, both these training courses can lead to a BTEC qualification.

Changing the way they work also applies to all the central administration and support roles, and work to create an inspirational and efficient business environment is well under way. They are calling this the Grand Union Programme, and one major part is the relocation of activities from Baker Street to purpose-built premises at Paddington Basin. This is scheduled for completion by March 2004, and gives them the opportunity to release the financial asset they have in Baker Street.

In describing their performance over the year it is also important to recognise the efforts of the many able managers they have added to their teams, from outside the Group as well as from within. In fact, it has become generally easier to recruit talented staff, as more and more people are attracted by the opportunity of being part of the growing number of successes at Marks & Spencer.

'My job begins the moment the customer walks through the door. I manage a team of 56 people whose job it is to take care of our customers’ needs and, to me it’s one of the most important jobs in the store. I believe the whole shopping experience should be perfect, which means keeping the tills working, the queues moving and every member of staff is motivated and knows their role. It’s a bit like managing a football team - filling gaps, making sure every angle is covered and supporting and encouraging the team when it’s busy. We all want our customers to enjoy shopping with us, especially with the recent Per Una launch and store renewal programme.' Mr P S Walters (Manager).

Why customers are important

Businesses need to attract and keep good customers. Good customers provide regular sales revenue and also information about the success of a product.

Good customer service will allow a business to:

  • Gain and retain customers
  • Gain customer satisfaction and loyalty
  • Improve the image and reputation of the business
  • Provide information about the product in use
  • Help a business to keep market share
  • Increase sales revenue and profits.

1(b) Explain how the customer service function operates within each organisation.

 What is customer service?

The provision of a high standard of customer service is an important part in the overall performance of an organisation.  Many organisations would not be able to maintain a satisfactory level of sales, or be able to maintain a competitive edge in the modern business environment without effective customer service.  You need to be aware that customer service involves:

  • Presenting an image of the organisation
  • Making sure that the needs of the customer are met by the product or service offered
  • Providing information
  • Giving advice
  • Taking and relaying messages
  • Keeping records
  • Providing assistance
  • Dealing with problems
  • Handling complaints

The importance of customer service

An organisations level of sales is greatly influenced by the standard of customer service that it encourages in its staff.  A high standard of customer service is important for an organisation in order to achieve the following objectives:

  • Increase sales
  • Gain a competitive advantage
  • Maintain customer loyalty
  • Attract new customers
  • Gain customer satisfaction
  • Encourage a motivated and efficient workforce
  • Enhance the organisations image

Customer Service in Marks & Spencer operates to ensure that all the objectives are continually monitored received and changes made are appropriate.

The three main considerations of how the functions operate are as follows:

Efficiency and Response

Marks & Spencer value the need to be immediately responsive to customer requirements.  This may be achieved in many ways, e.g. answering the telephone quickly, having sufficient products always in stock, e.g. 95% target and being able to repair products at relatively short notice.

Sales Service

Throughout their contact with customers Marks & Spencer try to ensure total customer satisfaction.  Well-trained staff and efficient and effective systems are important to make sure that all is being done to achieve this goal.

After Sales Service

Marks & Spencer’s responsibility comes as far as the customers concern, it does not cease when the product or service has been sold.  It is an increasingly important feature for the business that they have enhanced and developed their after sales service.  For Marks & Spencer it means having systems in place to cope with complaints, queries and returns of damaged or faulty goods.

Customer service in Marks & Spencer involves the following:

Presenting an image of the organisation

Marks & Spencer work within the community.  Marks & Spencer is partnering Crime Concern in running a national awards scheme, to find the best crime prevention and community safety projects across Britain and to reward crime reduction volunteers working for safer communities. The scheme will recognise and reward winning projects by offering capacity building training and access to all Crime Concern's seminars and conferences; certificates and trophies will also be presented at Crime Concern's Annual conference.

Recycling

Product Packaging 

Packaging Marks & Spencer’s goods is vital, both to reduce waste by protecting products from damage and to communicate important information to their customers. They are committed to using recycled material, and helping us to recycle, wherever possible. 

Using recycled materials

Along with other retailers, they use recycled metal and glass packaging as a matter of course. But where recycled material isn't the norm, such as in cardboard product packaging, they try hard to make sure that all Marks & Spencer packaging which can contain recycled material, does.

Over 90% of Marks & Spencer product packaging is recyclable in most parts of the country. To promote this fact, and to help you identify different materials, we use symbols (which you can find in How can I help) on a number of our products.”

Coat hangers


Every year they also collect and return over 60 million coat hangers, raising money for local environmental projects chosen by staff. By doing this they have saved over 2000 tonnes of waste plastic every year. All of their stores return unwanted coat hangers in special ‘recycling boxes’ which are sorted, cleaned and re-packaged for re-use by their clothing suppliers. Even damaged or obsolete items are collected, as these can be recycled into new hangers.”

”Every time you decline to keep a coat hanger we donate 0.5p to charities.”

The community

Marks & Spencer is set to reinforce its commitment to the community with the nationwide launch of an initiative to help the homeless find jobs.

To minimize the impact of simply 'dumping' unsold food on landfill sites they give managed food donations to various local charities, all of which are chosen by local store staff.

“Our employees willingly give up their spare time to raise cash and volunteer for a wide range of charities and local organisations. We are committed to giving them financial support, and provide schemes to help them become actively involved in their communities.”

They launched “Our Foundations For Success” programme to set out new ways of working in stores, and new levels of customer service to aim for. The initiative focuses attention on ‘power hours’, the key times of day when each different store is at its busiest, and everyone available helps on the sales floor. The programme also ensures regular team briefings and a concentration on all the little efficiencies and ‘shop keeping’ tasks that add up to making it really easy and enjoyable for their customers to shop.

All of the above is very important for Marks & Spencer as it enhances their image.

Making sure that the needs of the customer are met by the product or service offered

Marks & Spencer identified a number of major issues to address during the year as part of their recovery strategy for Clothing –product appeal, quality and fit, availability, pricing and segmentation, or in other words, making sure they have something for everyone. Their aim was to produce higher quality goods, deliver them more quickly, and to do so at better prices. But strictly in that order of priority – better, faster, lower cost.

Marks & Spencer took the Quality Food & Drink Awards by storm in November 2002, winning 11 awards at the food retail industry’s prestigious event, including the coveted Gold Q Award.

The Q Awards, launched in 1979, are one of the food industry’s premier events rewarding excellence to innovative, quality products available through supermarkets and major food retailers. The panel of judges ranged from food industry experts to writers and chefs, including Pat Chapman of The Curry Club, food writer Roz Denny and nutritionist Fiona Hunter.

Winning these awards is testament to the passion, enthusiasm and hard work of Marks &

Spencer’s team of food experts. They only use the very best quality ingredients to create the most exciting and innovative products. “We are delighted that we won ten Silver Q awards as well as the prestigious Gold Q Award” – which the judges give to the product, that in their opinion, has that something extra special.

An example of a service that Marks & Spencer provide is:

  • Flower Ordering - To ensure your flowers are received in peak condition, they have been carefully grown, picked and protected at every stage.  For optimum life and freshness, some flowers may arrive in bud.
  • Shopping Online – You are able to shop online at , this would increase sales and attract new customers as those who are older or maybe disabled may not be able to get out to shop, therefore satisfying the needs to their customers.
  • Bilingual Staff Available
  • Cake Ordering
  • Carry To Car
  • Cash Point Machine
  • Cash back
  • Collect By Car
  • Customer Ordering Online
  • Customer Seating
  • Customer Service Desk
  • Hearing Loop Tills
  • Reservations
  • Sandwich Platter Ordering
  • Special Needs Pack
  • VAT back service
  • Wine advisor

Marks and Spencer provide a lot of services to satisfy and meet the needs of their customers.

All of the above is also very important to for Marks & Spencer as they increase customer satisfaction so therefore increase their sales.

Providing Information

Marks & Spencer offer customers a lot of information.  Customers are able to phone Marks & Spencer and listen to the opening hours.  The customer has the option to either connect with an operator or just listen to the opening times.  Again this would gain the satisfaction of customers.

Marks & Spencer offer a lot of training for their staff.  This enables the employees to tell customers information on products without having to ask a manager etc.  

Training and development is key to the future success of any individual. Marks & Spencer places great emphasis on ensuring this, through both formal, structured methods and invaluable hands-on experience.

First of all, people skills are essential. Whoever you come into contact with, whether customers, suppliers or members of staff, an understanding of situations and the ability to interact in a calm, confident manner are vitally important.

Working with one of the UK's leading retail organisations will also bring out the trouble-shooter in you. Every single day presents new issues; all of which have to be resolved, and the day will come when it's all down to you. At Marks & Spencer they want you to be the best, prepared to deal with any eventuality, now and in the future. Good training and experience will last you a lifetime.

All Graduate trainees receive a varied programme. They receive system training to enable best use of internal applications as well as training in your specialist area.

In Autumn 2002, Marks & Spencer became the first UK Company to trial an innovative new till, which enabled customers to check out their own shopping, with a view to improving further its customer service and expanding customer choice.

Every summer there's a chance to find out more about Marks & Spencer food at one of the many Agricultural Shows up and down the country.

Their enthusiastic sponsors of the shows and, if you visit their stand, you'll find out more about their support for British farming, be inspired by cookery demonstrations by celebrity chefs and then be able to buy their legendary sandwiches for lunch! The show really provides a great family day out.

It's also a chance for many of their supplying farmers to get together and meet the Marks & Spencer team and other suppliers.  All of this increases customer satisfaction and enhances their image.

Taking and relaying messages

I found the following letter sent to Marks & Spencer on the Internet.  It shows how Marks & Spencer handle their complaints:

To: Marks & Spencer

The Cannelloni Complaints Dept.,
Marks & Spencer, plc,
Baker Street,
LONDON.

Dear Sir,

Food Packaging

Now here's a thing; I wish to complain about the packaging of your St Michael Italian Range Fresh Pasta Cannelloni Fresh Egg Pasta With Traditional Beef & Tomato Fill In A Rich Creamy Sauce With Fresh Parmesan Cheese.

My mother bought me a "serves two" pack last week and, what with its getting near the Use By date, I thought I'd better heat it and it eat tonight. Now, my mother (whose eyesight is, admittedly, not as good as it used to be) had specifically chosen the cannelloni because it apparently did not require defrosting. I checked this before starting cooking, then popped the cannelloni in the oven. After the specified half hour, I was horrified to find that the food was still stone cold in the centre. Upon closer inspection of the packaging, I eventually discovered the message "Defrost Thoroughly Before Use" in extremely small letters on the bottom of the pack. As the packet advised against re-heating, I could hardly let the cannelloni defrost now, could I? I eventually decided that, what with the recent salmonella epidemics and what have you, I'd better bin the lot and go and spend a fiver down the chinkie. Quite an expensive mistake, I'm sure you'll agree.

It seems to me that such food which could be extremely dangerous if not properly cooked should have the words "DEFROST THOROUGHLY BEFORE USE" in large, red letters on the top of the package. Clearly, this would lose you some sales, but it could save lives and would cover you nicely against any law suits. I shudder to think what could have happened had my mother decided to cook the cannelloni for herself (she never eats foreign stuff, so she probably would have thought it was supposed to be cold in the middle).

While I'm at it, I notice that this "Italian Range" food is actually produced in the UK - not illegal, but rather misleading and un-British I would say. I would also query your use of the word "fresh" (three times!) when describing frozen food.

Yours sincerely,

From: Marks & Spencer

Dear Mr Date,

Thank you for your  with regard to our Fresh Cannelloni. I was sorry to read of the problem you recently experienced when proceeding to cook this product after you had chosen to freeze it. Please accept my apologies for the obvious concern and inconvenience this matter has caused you.

In the majority of cases the cooking instructions which we give on our products are to cook the product from the state in which it has been purchased. Therefore if a product is sold in one of our chilled cabinets then it is always best cooked from a chilled state, as opposed to being cooked from frozen.

We give recommendations for freezing on our packaging for our customers convenience, as we have many enquiries from customers who wish to know which of our goods are suitable for freezing. Along with this, wherever we recommend that a product is suitable for freezing we then always clearly indicate that the product must be thoroughly defrosted before use. As I am sure you can appreciate, on much of our packaging we are very limited for space. It is for this reason that when we have instructions for freezing they are always highlighted in a blue area to ensure that this is clear to our customers.

I am obviously sorry that this particular purchase has proved unsatisfactory with you and I would like to assure you that your comments with regard to this matter have been passed on to the selectors and technologists in our Recipe Dish Department. This is to ensure that they are fully aware of all customer comments received in this office and that these can be borne in mind when making future developments.

I also understand that you were dissatisfied with the fact that we advertise these dishes as "Italian Range" whilst the product is produced in the UK. I am sorry that you find this misleading but it is for this reason that we call the items Italian Range so that customers are aware that the products are produced to Italian recipes whilst still being manufactured here in the UK.

Once again, thank you for the time and trouble you have taken in writing to us with regard to these matters and I do hope that all future shopping trips made to our stores prove entirely satisfactory.

Yours sincerely

Z E RAVEN (MISS)

Customer Advisor
Food Customer Services

The letter that Marks & Spencer sent back to Mr. Date shows that they have passed the complaint on to their Recipe Dish Department.

Keeping Records

In many ways Corporate Social Responsibility (CSR) is what our company founders often referred to as 'moral responsibility'. It is a modern phrase for describing how we want companies to behave and it is best measured by listening to the people who know us best - our stakeholders.

Our stakeholders are all the people and interest our business impacts upon. Below is a chart illustrating who they are:

Community and how they listen

  • Participation in a wide range of town and city centre initiatives, such as quality freight partnerships and crime prevention
  • Regular meetings with key charity partners
  • Partnership initiatives to address issues of health, safety and education/learning'
  • 'One Community' initiative that develops actions based on engagement with employees, customers and neighbours.

Employees and how they listen

  • Company-wide local, regional and national employee representation forums known as Business Involvement Groups
  • Regular employee surveys know as 'How are we doing?'
  • Internal communications include an employee magazine (on your marks) regular business updates and team briefings.
  • Three month CSR consultation programme during 2002.
  • Listening Groups conducted by senior management during regular store visits.
Environment and how they listen
  • Regular meetings
  • Active participation in benchmarking and surveys
  • Partnership initiatives across a wide range of issues such as wild fish, fish farming, free range eggs, food pesticides, and food miles.
Customers and how they listen
  • Sales information
  • Weekly and monthly monitoring of views
  • Surveying of customers who have visited new and refurbished stores
  • Customer panels
  • Annual independent Corporate Social Responsibility Survey
  • 350,000 communications through our Head Office
  • 2 million communications through our Financial Services business.
Suppliers and how they listen
  • Regular visits and meetings
  • Regular surveys of supplier/ franchisee satisfaction
  • Participating in major UK agricultural shows and running farmers listening groups
  • Direct relationships with important raw material suppliers
  • Joint participation in the Ethical Trading Initiative.
Government/Regulators and how they listen
  • Regular meetings with bodies such as the Food Standards Agency, Health & Safety Executive, Environmental Regulators, Financial Services Authority, and key government departments
  • Local authority partnership initiatives on environmental health, fire safety and trading standards are consulted through local authority partners.
Shareholders and how they listen
  • Annual General Meeting, Report & Financial Statements
  • Regular meetings and presentations with institutional investors
  • Participation in Social Responsibility surveys.
Animal Welfare and how they listen
  • Regular meetings to discuss key issues
  • Active participation in benchmarking and surveys
  • Partnership initiatives across a wide range of issues such as wild fish, fish farming, free range eggs, food pesticides, and food miles.

Providing Assistance

All staff are given training sessions on customer service – more detailed in some sessions.

Training and development is key to the future success of any individual. Marks & Spencer places great emphasis on ensuring this, through both formal, structured methods and invaluable hands-on experience.

First of all, people skills are essential. Whoever you come into contact with, whether customers, suppliers or members of staff, an understanding of situations and the ability to interact in a calm, confident manner are vitally important.

Marks & Spencer also keep staff up to date with product improvements.  This is essential, as customers will be asking about these improvements.

In recent years they have conducted an extensive review of how they communicate within the company.

They have improved communications by introducing daily briefings that provide store managers with an opportunity to update their teams, a weekly store newsletter and increased use of e-mail updates and an intranet system. Their employee magazine has also been re-launched to increase its appeal. Since 2001, they have also conducted an annual communication campaign across the company to update employees on business aims.

To promote higher levels of employee involvement in business decisions they re-launched their democratically elected employee representation groups as Business Involvement Groups at the end of 2001. These groups were created and shaped by the employees themselves with all representatives attending a training programme created for them in conjunction with the Institute of Management. Employees who sit on Business Involvement Groups are given two hours a week for this role. Store Business Involvement Groups feed into a bigger national group.

They conduct an annual employee survey known internally as 'How are we doing?’ Over the last eighteen months participation has improved to nearly 90% helping them respond to the needs of employees.

All of the above encourage a motivated and efficient workforce so therefore enhancing the organisations image.

2(a) Describe the strategies used by both organisations to ensure a high standard of customer service.

The strategies used to ensure a high standard of customer service are:

Increase Sales

To increase sales Marks & Spencer’s make sure that they have good availability of products e.g. variety, size, colour etc. This will ensure that Marks & Spencer meet each of their customer’s needs.  Good customer service means that customers will both buy more and also recommend their products and services to others which will, in turn, increase sales.

Marks & Spencer have a programme called ‘Count On Us’.  It is a range of more than 200 thoroughly delicious products that make losing weight much more enjoyable. Everything contains less than 3% fat, is calorie counted and low in salt. You’ll find healthy choices for breakfast, lunch and dinner, snacks for between meals and even indulgent desserts.  This will increase sales, as there are a lot of people who like to watch what they eat.  People would rather eat healthily and Marks & Spencer are showing that they are there to help.

To drive sales over the Christmas period, Marks & Spencer made further developments to its website, bringing enhanced functionality to customers and greater integration with the core retail business. The site's enhanced offering brings customers improved levels of security, product viewing, navigation and ease of use as well as a closer alignment with the business' product availability and distribution network.  This is another way for Marks & Spencer to increase its sales, as people are able to see their products without leaving their home.

Availability has been greatly improved over the past year. The buying, technical and commercial teams have been working together with their key suppliers to develop a clear strategy for the season - to ensure the right people make buying and production decisions at the right time. They have also focused on improving availability, especially of their top 500 lines.

Competition Advantage

Marks & Spencer value quality, value, service, innovation and trust are not new - they are the principles on which their business was founded.

You can’t differentiate the quality of Marks & Spencer’s from other high quality image based businesses.  The difference is in the quality of service.  Marks & Spencer’s have high quality products as well as a high quality service, which gives them a competitive advantage over the market in which they operate.

How does Marks & Spencer adapt to competition?

By focussing on their customers and applying their unique fundamental strengths to formulate a strategy that has become the catalyst for Marks & Spencer’s recovery. These strengths are:

  • 100% own brand
  • Command of supply chain
  • Scale and authority
  • Focus on superior quality and innovation
  • Assisted self selection
  • Underpinned and executed through the talent and capability of our people 

Maintain Customer Loyalty

Part of customer service is to maintain customer loyalty.  Marks & Spencer wants each visit for each customer to be a happy one to ensure that they return.  Marks & Spencer like to ensure their products meet and exceed customer’s expectations by giving information, which is accurate and tailored to meet their requirements on all products provided.

Marks & Spencer go out of their way to provide clear and comprehensive labelling on packaging so you can make informed choices about what you eat.

Nutrition Panel

This tells you how much energy (Calories and kilojoules) and nutrients are present in the product. Labelling regulations dictate the order and nutrients included here.

Energy

This can be useful if you are trying to lose weight.

Protein

You might be surprised how much protein there is in cereals and milk, not just meat and fish.

Carbohydrates

These are broken down to show the sugar content. This can be sugars naturally present in foods such as milk (lactose), fruit and vegetables or can be from added sugars such as honey, table sugars, and syrups. The remaining carbohydrate is made up of starches, which are essential for energy.


Fat

This is broken down so you can see the amount of saturated fatty acids. On some products such as butter and fat spreads polyunsaturated and mono unsaturated fatty acids are shown too.

Fibre

This includes both soluble fibre (helps to lower blood cholesterol) and insoluble fibre (promotes good digestion). We're recommended to have around 18g of fibre a day. Having five portions of fruit and vegetables a day plus wholegrain products, beans and lentils will help achieve this target.

Sodium and salt

Salt is made up of sodium and chloride. Because of the recommendation to keep salt levels to a minimum (6g per day for adults) for good health, we list both the salt and sodium content so you can track how much you are eating. Look out for the new salt balanced icon (below).

Ingredients

Provides clear and comprehensive information on what the ingredients are
in each product.

Guideline Daily Amounts

This shows the recommended average daily amounts of calories, fat and salt for adult women and men, so you can compare how the product fits within the recommended amount.

Contains

If you have an intolerance to certain ingredients this will help you quickly identify which foods to avoid, by showing when a product includes allergens such as cow's milk, wheat, eggs, fish, shellfish, sesame products, nuts, gluten, soya. It will also mention the presence of phenylalanine and salt substitutes such as potassium chloride.

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Attract New Customers

Marks & Spencer have lost a number of customers over the last 3-4 years.  This means that it is vital to have an objective to attract new customers.  Whilst the sales are important it is also important to measure their success by the number of customers they attract.  Marks & Spencer want each customer to have a pleasant experience to shop in.  They want each customer to leave with a smile. This means that each customer that leaves happy with Marks

& Spencer service will likely tell others about their experience.  This will attract more customers ...

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