To: Mr. Sttorck
From: Kasun perera
Date: 11th September 2003-09-17
Ref unit 10: Customer Service
The aim of this report is to produce evidence of an investigation in to the customer service practices of Tesco and a report on how the organization could improve its customer service. This report will:
- Identify and describe the different types of customers and their needs
- Identify and analyses the skill required in customer service.
- Account for how the organization has incorporated consumer protection in to its customer service policy.
- Describe how the organization use customer service to meet customer needs as well as strategic objectives.
The report on the chosen organization will include:
- The techniques my chosen organization has used to try to improve customer service.
- How my chosen organization monitors the performance of its customer service function.
- Recommendations on how my chosen organization could improve its quality systems help meet customer’s quality standards.
Tesco was founded in 1924 by Sir Jack Cohen. Over the last 78 years, as the food retailing market has changed, the company has grown and developed, responding to new opportunities and pioneering many innovations. Today it is Britain's leading food retailer with 639 stores around the country. Profits have risen by 11.9% since last year. Tesco operates stores in twelve countries - the UK, Republic of Ireland, Poland, Hungary, the Czech Republic, Slovakia, Turkey, Thailand, South Korea, Malaysia, Taiwan, and Japan. Tesco is public limited company (Plc) - Means that any one can be shareholder. Tesco sells every thing you would expect them to sell for example basic foods items such as bread, milk, eggs, cereals, fresh fruit and vegetables and much more including cloths, CDs, videos, DVDs, books, computer games, electrical, school equipment, wines and other alcohol drinks. Some of the larger stores are open 24 hours a day; this is very useful for shift workers and those who wish to shop when it is less busy. Tesco have their own petrol stations attached to some stores, they sell normal petrol 95 RON and 97 RON also diesel and in selected stations they have LPG.
Tesco offers Personal finance and insurance this involves a full range of services such as Loans, Credit cards, Savings, ISAs, Mortgages, life insurance, Motor insurance, Home insurance, pet insurance, breakdown cover, travel insurance and travel money.
Tesco also offers a service called telecoms, which includes Tesco home phone, Tesco mobile and Tesco Internet access. Some Tesco’s has an in store pharmacy. Throughout out years Tesco’s in store pharmacy grown in to one of the country’s leading pharmacy chains.
Tesco is currently the leading supermarket in UK. Tesco as a pretty good competition from other supermarket such as Sainsbury, Safeway. But Tesco is cheaper then mot of the other supermarkets and they offer lot more products. Recording to Tesco on average Sainsbury’s is 4% more expensive then Tesco and Safeway are 10% more expensive then Tesco.
There are more then 2,318 -plus stores and many distribution centres are located in United Kingdom. They have several office sites in the UK. And Ireland, where they’re key support functions is based. The majority of office staff is based in Hertfordshire, Tesco has been operating on an international basis for long time, anticipating the need to become a major retail name in key regions, they moved into central Europe, where they have a strong presence in Hungary, Poland, Slovakia and the Czech Republic and the dynamic Asian market. Tesco now operate 440 stores in 11 international markets. They employ 326,000 people worldwide, working in 2,318 stores, with total sales of £33.6 billion.
Shown below is the Turnover, Number of stores and selling space for Tesco in the last five years.
Tesco’s sales by region are shown below.
Tesco’s Financial highlights
Group Sales + 18.7%
Underlying group profit before tax† + 21.9%
Group profit before tax + 17.6%
Underlying diluted earnings per share† + 16.7%
This is a preview of the whole essay
Diluted earnings per share + 11.3%
Dividend per share + 10.3%
Tesco’s primary / secondary activates:
Tesco’s primary activities include groceries and house hold retailing. Secondary activates include Communications - (Tesco offers telecoms such as Tesco homophone, Tesco mobile and Tesco Internet access. Financial Services – Tesco’s Financial Services include Loans, Credit cards, Savings, ISAs, Mortgages, life insurance, Motor insurance, Home insurance, pet insurance, breakdown cover, travel insurance and travel money. Other secondary activities include retailing, transport, importing / exporting, education, health, social and advertising.
Location of Tesco:
Tesco operates stores in twelve countries - UK, Republic of Ireland, Poland, Hungary, the Czech Republic, Slovakia, Turkey, Thailand, South Korea, Malaysia, Taiwan, and Japan.
The aims and objectives for Tesco
Tesco is aim to provide the best possible value for their customers' money. And they state that they are determined to offer quality products, good services, attractive stores and low prices to their customers. The main aim of Tesco is to make profit, just like any other business, if they don’t make a profit then they won’t be able to fund there business and keep it up and running, the other aims are to exceed competition and to increase the number of customers. To recruit new employees with the potential to do well. The most important aim for Tesco is to provide a highly competitive service to the customers. Tesco state that there core purpose is “to create value for customers to earn there life time loyalty” Tesco say they deliver this through there values “No one tries harder for customers” and “treat people how we like to be treated”
Objectives will be to: Increase food sales, Develop non-food business, Offer the convenience of one-stop shopping to their customers, Expand their hypermarket business in central Europe and Asia. Currently, international growth has gone up by 32.3% to 2.3bn and contributed 59m to profits up 78.8% to last year, Increase value for customers and to enhance returns to shareholders, Continually lower prices that customers pay for everyday products, current prices are 12.5% lower than they were in 1996 and in the first half of this year, they had deflation of 1.6%. The other objects include- Increase their investment in the environment, Continue helping charities, Provide better services to the customers than their competitors, Build consumer confidence in electronic retailing, Increase profits and this year they were 7.2% higher. Tesco first set out its four-part growth strategy seven years ago: core UK business, non-food, retailing services and international. They now have moved from being the number three domestic retailers to being one of the top three international retailers in the world with 2,318 stores and 326,000 people.
In total, Tesco have 5.2 million banking, Tesco.com and telecoms accounts. Tesco.com is the world's biggest online supermarket. Tesco Personal Finance alone-achieved profits of £160 million of which Tesco's share is £80 million.
This year, Tesco share of the non-food markets we operate in has risen from 5% to 6%.
How Tesco’s customer services help achieve the companies aims
Tesco reduce they prices very often. They all ways keep customers up to date by handing out leaflets and advertisements on TV. Good customer service means happy customers. If the Tesco keeps they are customers happy they get more customers. The employees serve good customer service so the customers come back to the shop at Tesco’s again and again.
Tesco must retain existing customers and make sure they don't start shopping at other supermarkets. Tesco show how important it is to retain customer by providing a good in store and after sales customer service. Also Tesco provide many products, where customers can buy and go home and try the product and still if the customer is not totally satisfies with the products they have bought they can bring it back to a branch of Tesco and the customer would be entitled to a full refund or exchange.
In order for Tesco to increase their total sales customer service must be provided to customers at a high standard. The art of communicating with customers is vitally important for the success in increasing sales. Staff that work at Tesco must have positive body language and must be polite by having a tone of voice where customers feel that staff want to help them. Eyes contact, facial expression, and appearance would gain respects from customers. If staff where to be lazy and not help customer's at all then this would result in less people coming to shop at Tesco, which would mean that there would be an decrease in sales instead of being an increase. Tesco try to keep improving their customer service and want their customer to recognize this. Tesco have continues training for staff so staff can deal with all types of problems and all different types of customers.
Maintaining customer loyalty
Loyalty or club cards are also a form of promotion and were first tested in the October of 1993 but when on national release in the same month of 1995.This has brought the shopper closer to Tesco’s. The points are earned from shopping trips and slowly are a cumulated so after a while the customer will have many these are then processed and turned in to money off vouchers which can be spent throw any of Tesco's stores. Tesco clubcard is the UK's most popular loyalty scheme. You can collect air miles with clubcard. Two hundred million air miles have been issued to customers this year. Clubcard holders can collect points at over 3,000 UK outlets including Alders and Marriott hotels. As you can see Tesco have a clubcard scheme, which gains customer loyalty as they feel they are getting more out of shopping then just the products they are purchasing.
Tesco’s customer service
To satisfy the needs of the customer in such away as to maximise profit.
A good Customer Service department is crucial to the success of any business. Major retailers such as Tesco have well-establish reputation for providing a good customer service.
It’s importation to find out customers expectations and needs in order for Tesco to meat their expectations and needs. All customers expect high level of customer service.
For example, if a person goes to buy a Flat screen TV, they will expect the sales person to provide them with information with regard to the technical specification of the TV, safety features, and options regard to buying the TV.
Tesco keep their customers happy by:
Providing an appropriate range of products and services, Dealing quickly with problems and complaints, Having good and clear communication systems, Treating Customers with integrity and courtesy, If Tesco continue to operate in this manner it will more likely to benefit from:
Additional business-because satisfied customers are likely to recommend friends and relatives.
Repeat business-because satisfied customers are more likely to return to buy again.
Happy staff- because satisfied customers is likely to be happier and easier to deal with than those who are dissatisfied and have reason to complain.
From a good customer service Tesco can earn more money, then it ill be able to open more branches, take on more workers in other words expand the business.
Providing a high quality customer service is vital for Tesco. Bad customer experiences are prime subjects of gossip. They can destroy a reputation of the business. If Tesco doesn’t provide good customer service it wills loss customers and sales.
By offering good customer service tesco can built up its reputation, customer loyalty, be competitive and maximise profit. Tesco do this in such ways as, offering free computers to schools, this help to build their reputation. Tesco all so opened 24 hrs a day, this helps customers with busy life’s who work during the day to shop after work.
There are many different types of customers, which do their shopping at Tesco.
Customers have different needs depending on who they are and the circumstances. There is a difference between internal and external customers. Internal customers are members of staff or outside suppliers who contribute towards the service provided for the external customers. External customers are the people who actually buy or use the organization’s products and services. External customers are then categorized into individual, group, age, culture, language spoken and specific needs.
Many leisure and recreation providers serve groups and the individuals who compromise them in ways that enhance and promote customer service.
Customer age groups are classified as children and adults. Although the companies feel the age of the customers is important, they also feel it is important not to make assumptions about customers' needs based solely on age.
Cultural background influences people's traditions, tastes, preferences and opinions and it will therefore influence the type of service they need and expect. It is also important not to make assumptions on the culture of the customer.
Foreign visitors are an increasingly important part of the UK tourism market. People still want to feel that they can be dealt with even though there is a language barrier. Large organizations often employ multi-lingual staff to communicate with non-English speaking customers.
Some customers have specific needs that may require special customer service in addition to that provided to meet the general needs of everybody. These include sensory disabilities, mobility problems, literacy, dietary requirements and people with young children.
Tesco offer some thing for every one in their stores. Tesco can categorise its customers by Age, Gender, Income, Class, Religion and Education.
Age- sweets for teenagers and baby foods for little children. Gender – cosmetics for females and fragrance for men. Income – Tesco has their own brand that is cheaper then other products, for an example Tesco crackers cost 99p and p&x crackers cost 5.99 so customers can choose between cheaper crackers or expensive crackers. Religion – Tesco offers cosher meats and halal meats for customers.
Tesco needs to provide the right products for the right type of people and also they have to provide the right facilities for customer, which need special help while doing their shopping.
There are many different types of students that do their shopping at Tesco. Students normally buy cheap food, which doesn't take very long to prepare, and so Tesco need to have such food in store in order to meet student needs. Also students shop very quick compared to adults who take there time and look at every product in store, so they lay out of the products such as crisps, chocolates and soft drinks must be easy to access and find, Also not all students don't know where every product in store is, so there must be enough sales staff to help them. This way Tesco would have a very good customer service.
OAP (Old Age Pensioners)
Life expectancy is increasing, which is resulting in more OAP's in the UK. Tesco need's to take this in mind, in order to improve customer service for OAP's. OAP's need a lot of special facilities as they are old and cannot manage to do their shopping like younger customer can. Also, living longer means that the elderly may have to make any savings/pension acc deeding their working life last longer. Therefore, retired people have less dispensable income, so they may often look at cheaper product rangers.
Mother has to bring their children with them to do their shopping if they have no baby sitters to look after them. In order for mother to do their shopping, Tesco have trolleys where children can sit in front of the trolley and mothers can do their shopping without worrying where their children are. Also mother with two children can use the trolleys Tesco’s provide, where two children can seat in front of the trolley.
To make the trip to Tesco as conferrable as possible Tesco provides variety of options to move the good in side and out side the store. Tesco have trolleys where one or two children can seat in front of the trolleys, they also have big and medium size trolleys. And for customers coming to buy one or two things they have baskets and checkout place where only baskets can checkout.
The internal customers are the people who work in the Tesco like employees and employers. E.g. of internal customer-Someone working on the checkout who takes receipt of new till-tolls.
External customers are the regular shoppers. Tesco has a wide variety of external customers such as kids, teenagers, workers, families, old people, adults, and travellers.
Tesco’s employees are multi skilled, which means if you pick employee from a till and put him to work in the warehouse he will have no problems and working in the new department. This is a very good advantage for Tesco, for an example if an employee from the customer service department call in sick Tesco can take out a employee from the tills and put him to work at the customer service deck. Tesco offers many types of training to their employees so they will help Tesco to meat their aims and objectives.
How Tesco monitors the quality of customer service
Tesco employ a team of independent shoppers, known as 'mystery shoppers'. They carry out in-depth checks on the customers' shopping experience to assess whether it is easy and enjoyable. The store is unaware that the check is being made until it is told how well it has performed and which areas need improvement.
Tesco always aim to minimize waiting time at the checkout. Many of their store colleagues are multi-skilled and so, at busy times, they are always able to call on more colleagues to operate the tills. Rule of the Tesco is if there are more then 3 customers in one line they will open a new check out.
Tesco monitor feedback by asking their customers to fill a form on their service. If a customer went into a shop to purchase a magazine and was unable to find it, he/she says thank you. This is a method of feedback as the customers were happy with their good/service. Some businesses issue surveys to their customers because then they can detect if people are happy with their good/service.
Our acts which protect customers
1) Consumer protection Act 1987
This act states that all goods brought should be safe to use, and prices should not be displayed in a misleading way. Tesco would have to fallow these rules. For example, the price of goods should not be displayed in a confusing way. The price should be bold so customers can clearly see and understand them.
2) Sales of goods act 1979
This law declares that goods should be:
· Merchantable quality (Fit to sell, have no faults or damages)
· Fit for their purpose (suitable for the purpose for which they are sold)
· As describe (must match description given)
For example, at Tesco the goods sold should have no faults or damages. If a customer purchases a key ring and discovers that there is a crack in the glass that contains a picture of a flower, he/she can take it back either to receive a refund or exchange, Tesco may lose customer loyalty through damaged goods so they must maintain high quality products.
3) Trades Description Act 1963.
The code conveys that traders must give an accurate description of their goods & services. Tesco must show clearly their goods & services they sell. For example, in the leaflets it describes the goods it sells.
4) Health and safety at work Act 1974
This act states that External customers can sue if they:
· get injured because he/she sold a faulty product
· suffer financial lost/distress, because of poor workmanship, professional negligence
· Injure themselves because lack of care by an employee due to unsafe fittings.
For Example, a customer walks into Tesco branch and slips over and breaks his arm. There were no signs of safety to alert the customer. The customer can sue the Tesco for this.
Tesco should have car park for their customers and especially for disabled people to park their cars, and people in wheelchair can reach the shelves and the member of the staff should be there with assistance. There should be a special staff member that can help sample clothes to people who are in a wheelchair. There should be a toilet for people who are in a wheelchair and someone to push them around the store.
Why need improvements?
In Tesco there are not enough facilities for disabled people that’s why not many disabled people go there, because it doesn’t meet their needs and expectations. If Tesco meet disabled people needs and expectation this will improve loyalty and more disabled people will come to shop at Tesco and these will be their main customers.