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Increase of the customer satisfaction by the example of stationary food retail trade REWE

Project Report 2017 29 Pages

Business economics - Business Management, Corporate Governance

Excerpt

Content

List of figures.

List of abbreviations.

1. Introduction
1.1 Problem Statement
1.2 Objective and Approach

2. List of elements
2.1 Overview
2.2 Product
2.3 Price
2.4 Design
2.5 Service
2.6 Communication / Experience

3. Matrix of effects

4. Graph of effects

5. Network model and recommendation for action

6. Conclusion and Outlook

Appendix

References

List of figures

Abbildung in dieser Leseprobe nicht enthalten

List of abbreviations

e.g.: For example

1. Introduction

1.1 Problem Statement

The company “REWE” which is the second biggest German food retail group was founded in Cologne in 1927. It has 228,000 employees and an annual turnover of 36,2 billion euros.

As a stationary food retail trade, it especially attracts people with a high brand and quality consciousness.

The market REWE is active in is very dense and full of competitors which is why there is a lot of competitive struggle. To survive or even grow in this market the company has to aim for satisfied, loyal customers supporting REWE’s success.

1.2 Objective and Approach

Regarding the problem statement, for REWE it is very important to increase customer satisfaction. The increase of the customer satisfaction is one of many possibilities to hold its own in the market and to expand its market share further. If REWE achieves to increase the customer satisfaction, there will be some other positive side-effects. Adding customer value causes more loyal customers. For REWE it is cheaper to bind customers instead of acquiring new ones. In addition, satisfied customers develop sales. It is a secure way of getting high profit. Furthermore, this business goal can help to reduce negative word-of-mouth-recommendation, REWE's image can be improved.

REWE increases the satisfaction of its customers by adressing their needs and continously raising quality. It shows that the achievement of this business goal depends on many different elements. Therefore, a list of elements, which have influence on the customer satisfaction, is set up in the first step (see chapter 2). Afterwards, the different elements are presented in the matrix of effects in chapter 3. This matrix is evaluated graphically in chapter 4. It helps to formulate first recommendations for the selected business goal of REWE. Chapter 5 represents the network model. Concrete and detailed recommendations for action will be pronounced. Chapter 6, finally, draws a conclusion and gives an outlook.

2. List of elements

2.1 Overview

There are many elements influencing the customer satisfaction in the stationary food retail trade REWE. To stay in the defined scope of this presentation, the focus is set on 20 important aspects which are shown in the following figure.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: List of elements.

Source: Own research.

Most of the elements are dealing with the stationary food retail trade in general but some elements are specific for REWE and their pledge to the customers. The presented elements could be separated into five different groups.

“Product” is the generic term for the first group. Every aspect which is involved stays in direct contact with the offered products. It deals with their quality, eco-friendliness, regionality and range. This bunch of elements has a special importance to the company REWE, because their focus is on high product quality and regionality. Furthermore, organic products, which are part of the eco-friendliness, are a major issue of REWE's policy (cf. Verhoef, 2003).

Offers and price level build the second group "price", because together they decide on the given prices.

The next elements market structure, price labelling, store layout, atmosphere and infrastructure can be summed up under the term “design”. They all determine on how the customer precepts the visual appearance of the market as a whole.

Furthermore, the group “service” plays a role on the customer satisfaction. It includes aspects like quality and quantity of employees, parking lots, opening hours and waiting time. Together they build up the perceived service level and let the customer feel important or insignificant (cf. Lewis, 2004).

At last, there is the group “communication and experience”. The involved elements shop-in-the-shop, events/experience, advertising, image and multi-channel-retailing have in common that they decide on how the customer experiences shopping, the ways he/she could purchase products and how the market stays in contact with the customer.

2.2 Product

The first group, which could be concluded under the generic term "product", consists of product quality, eco-friendliness, regionality and product range.

The product quality, which involves quality, freshness and keepability of the offered goods (especially of food) can either increase or decrease the buyer's satisfaction. Offering fresh, tasty and nice-looking fruit and vegetables increases the contentment whereas the presence of rancid fruit and vegetables decreases it (cf. Heskett & Schlesinger, 1994).

Furthermore, the store's eco-friendliness has an impact on the customer satisfaction. This element is established by the food's origin, the usage of plastics and the distance to growers and manufacturers. Offering organic food – which means supporting ecological agriculture –, using no plastic packaging and plastic bags and a minimal distance to the grower or manufacturer – which reduces CO2-emissions – support eco-friendliness and can also contribute to customer satisfaction.

Regionality and eco-friendliness must not be mixed up. Not every regional product is organic and it can be wrapped in many plastics. What they have in common is the vicinity to the grower or manufacturer. More and more people like buying food from regional growers. Therefore, offering or not offering regional products can have an impact on the buyer's contentment, either in a good or in a bad way.

The last element related to the group "product" is the product range, which means the width and depth of the offered assortment. The width of an assortment is determined by the number of different types of goods, e.g., textiles, beverage, fruit and sweets. An assortment's depth is defined by the offered quantity of different products, variants and vendors. Depending on the customer's requirements, the extent of the offered assortment can influence his satisfaction (cf. Dabholkar, Thorpe & Rentz, 1995).

2.3 Price

Besides the category "product" the category "price" has an impact on the customer satisfaction, too.

A store's price level could be either high or low. You cannot say that a high price level always decreases the buyer's contentment and a low one always increases it. The perception of the price level depends on the customer’s attitude. Even the price-performance-ratio is an element which influences the satisfaction with the price level. To make the buyer content the price has to fit the performance. Not fitting would make him dissatisfied (cf. Storbacka, Strandvik & Grönroos, 1994).

Also offers are a part of the group “price”. Offers mean, that there are special prices, discounts and campaigns. The presence or absence of those elements will play a role if the goal is to achieve customer satisfaction.

2.4 Design

Not only products and prices influence a customer’s satisfaction. The elements “market structure”, “price labelling”, “store layout”, “atmosphere” and “infrastructure”, which can be consumpted under the generic term “design”, also have an impact on it.

The construction of the market, the arrangement and structure of the shelfs, the width of the corridors, the specific use of lighting and the general usage of the given space are part of the market structure. To satisfy the customer, there should be a thoughtful and balanced arrangement of the market’s elements with not too narrow and not to width corridors and distances between the shelfs. There should not every inch be used, but also there should not be too many empty spaces.

Price labelling is another aspect influencing the buyer’s satisfaction. It depends on the clarity and the design of the price labels. If the labels are nice looking, every product has a label and the customer easily can identify which one belongs to which product it can have a positive impact on his/her contentment. In contrast to this, missing, too many or too colorful labels could make the customer feel confused, uncomfortable and dissatisfied (cf. Rust & Zahorik, 1993).

The store layout is the next element that could increase or decrease the customer’s contentment and has to be defined by the market structure. Concerning this element, not the arrangement of the shelfs, or the width of the corridors matter. What counts is the arrangement within the shelfs, their height and the way, how different types of product are placed and presented in the market. An example of how the store layout could influence the customer’s satisfaction in a positive way is arranging not too high shelfs with a well-structured interior and with similar products and product-groups in vicinity to each other, so the consumer could find everything he/she needs in a short period of time.

Beyond market structure, price labelling and store layout, the shop’s atmosphere plays a role on the customer satisfaction. A market’s atmosphere results from the sense of the space, lighting, background music and cleanness. If everything fits – there is a pleasant lighting and background music, everything is clean and the customer has a positive sense of the space – the satisfaction can be increased. In contrast, extreme lighting, loud background music and dirt may produce a negative sense of the space and dissatisfaction.

Finally, the given infrastructure impacts the customer’s contentment as a part of the group “design”. The infrastructure decides on how buyers can get to the market, either by car, bike, public transportation or on foot. This element normally only can be influenced when building or planning a new market. Although the owner cannot change or hardly change it afterwards, it is important to the customer satisfaction. If the market is located in the middle of a city for example, the reachability by public transportation and on foot has a special importance for the buyer’s contentment. There are not so many people having a car which is why the reachability by car is not that significant. In rural areas, it is vice versa.

2.5 Service

Another group you can frame is the "service". This group includes the four elements of employees, parking lots, opening hours and waiting time. All these elements can influence the customer satisfaction in a positive or negative way (cf. Wong & Sohal, 2003).

The first element mentioned deals with the employees. A business can provide a different amount of employees. If the company has a small amount of employees, they have less time to respond to customer queries or customer requirements. Customers will not feel well advised and this will lead to dissatisfaction. If there are enough employees, they will have more time and can respond individually to customer requirements. This automatically will lead to an increase in the customer satisfaction. In addition, a certain amount of employee competency is important for the customer. Customers like to be advised in their purchasing decisions, which will only be possible if the employees have a certain know-how. For example, a company can arrange its employees according to different categories (meat, cheese, etc.). As a result, the employees are able to advise customers perfectly and react properly to customer requirements. This leads to an increase in customer satisfaction. However, the fact that employees do not know their products and, for example, do not know where to find them has a negative impact on the customer’s satisfaction (cf. Hennig-Thurau, 2004).

The next specific element is the amount and size of parking lots. Customers prefer umpteen and large parking spaces. If the customers do not find a parking lot and have a longer waiting time to find one, this already can have a negative effect. If, on the other hand, there are sufficient and large parking lots, this will have a positive effect. It is also better to have parking lots for women, families or disabled persons. This leads to the fact that the customers have perfect parking conditions and find suitable parking lots fitting to their needs.

Another important aspect is the element opening hours. Each company can customize its opening hours and days. It is important to take into account the different needs of their customers. Longer opening times mean that professionals can also shop without stress. Furthermore, the shops will be less crowded, if a longer margin for shopping exists. It is also advantageous to open on Saturdays because due to this the customer’s satisfaction increases. Customer satisfaction decreases if there are only short opening times a few days the week, as this leads to additional stress for the customer (cf. Gradus, 1996).

A further influential element on customer satisfaction is the waiting time. The longer the customers have to wait at the check-out, the more annoyed and dissatisfied they will be. The company should try to keep the waiting times as low as possible. A simple solution would be, that people with few things can complete the payment process more quickly. The introduction of self-service kits could be helpful, too. This allows customers to scan the products on their own and pay the required amount. Another solution would be to open additional cash registers for the payment process. If a customer waits a long time, this quickly can exceed the tolerance range. The customers might have the idea that other business transactions may be faster and he or she may prefer another business in the future. Therefore, it is very important to keep the waiting time for the customers as low as possible in order to ensure a high customer satisfaction (cf. Venetis & Ghauri, 2004).

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Details

Pages
29
Year
2017
ISBN (eBook)
9783668974593
ISBN (Book)
9783668974609
Language
English
Catalog Number
v490038
Institution / College
University of Applied Sciences Bergisch Gladbach
Grade
1,0
Tags
increase rewe

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Title: Increase of the customer satisfaction by the example of stationary food retail trade REWE