The author will discuss about the customer satisfaction and importance of customer services in this chapter. Customer satisfaction is important in any business. The author will explore the customer satisfaction and services provided by Harvey Norman. Customer satisfaction is an experience by consumer and the customer’s perception about the company. The research can help the company to discover the customer satisfaction and customer services provided.
Background of Study
A retail establishment which particular in offering a wide range of goods without a sole predominant merchandise line is call department store. Department stores normally sell products such as furniture, electronics, appliances, apparel and so on. The additionally select other lines of product including hardware, toiletries, jewellery, cosmetics, photographic equipment, toys, sporting goods and so on. Some department stores are even more categorised as discount department stores. Discount department stores have central customer checkout part normally, located in the front area of the store generally. Department stores are part of a retail chain usually situated several countries. (Anon, no date)
The top 3 of the department stores in Malaysia are Carrefour, Tesco and Jusco. (www.expat.com.my)
Harvey Norman is a company provides a huge range of consumer electrical, computers, home entertainment system, communication, furniture, and bedding product. Harvey Norman in Malaysia is operating under Elitetrax Marketing Sdn Bhd. Elitetrax Marketing Sdn Bhd is owned by Pertama Holdings Limited, which is an investment holding company. Harvey Norman extended warranty scheme provides a comprehensive coverage with free replacement beyond repair product.(www.harveynorman.com.my).
Current research on selected topic
A newly world of retailing created as department stores got a distinct market position as common providers in 1980. Department stores is a huge responsible of the standard store design nowadays because the innovation of architectural, size of building, glass technology and new material for building. In late 17th-century London, department stores rent space for personal merchants. The smaller merchants were replaced by the bigger organisation in 1990. Today, department stores only leased out for specialized department like financial services and photography. (www.Worldlingo.com.my )
Malaysia start to offer a lot of foreign chains, for example Carrefour, Makro, Tesco, Jusco, and so on since 1980. The foreign stores have to join ventures with the local partners. The home grown department chains include Giant, Cold Storage, Metrojaya, Parkson, Mydin and so on. (Absoluteastronomy, 2011)
Department store goods are initially mass-produced goods, which are lowly produced for a strong consumer circle.
Demarcation
Characteristic
Department store
Specialist shop
Assortment width
broadly (many categories of commodities)
closely
Assortment depth
deeply (many articles)
means to deep
Quality
rather on the average
rather high-quality
FASHION retailer EUT Marketing Sdn Bhd told that discussing with international and local department store to develop its first boutique of inspired department store. Malaysia’s first boutique department store is the latest RM10 million department stores. It is located at Subang Jaya Menara Summit shopping centre. This new department store offers a special shopping environment with trendy and warm boutique style. It offers a broad selection of affordable range of products in cosmetics, sport wear, fashion, ccosmetics, shoes, cosmetics, and so on. Zurinna Raja Adam,2007.
Research problems
Harvey Norman has some complaints about the extended warranty need too long time to fix. (Jacky, 2011)
Research objectives
To evaluate customer satisfaction towards the company service.
To identify the variables which influencing customers satisfaction toward Harvey Norman.
To identify the service quality of the company.
To identify whether customer will repurchase product from the company.
Research questions
What is the level of customer satisfaction towards the company service?
What are the variables with influencing customers satisfaction toward Harvey Norman?
What is the level of service quality of the company?
Will the customer repurchase product from the company?
Purpose of study
The reason of chosen this topic as my research is because the author like to purchase in Harvey Norman and visit there often. The author are interesting in why the business in Harvey Norman done so successful. The author tends to find out the successful of Harvey Norman.
Scope of study
In this research paper, the author will identify the customer satisfaction towards services for HP laptop provided by Harvey Norman at Mid Valley Megamall. The aim of this research is to identify the variables of consumer. The research started at July 2010 and will be ended at March 2011. In order to achieve the research objectives, the author will distribute questionnaire to customers who walk in Harvey Norman. There will be 120 respondents selected to fill up the questionnaire during working hour. The survey will be done at Lot At-1 Lower Ground Floor Mid Valley Megamall, Mid Valley City, Lingkaran Syed Putra, 59100 Kuala Lumpur.
Significant of study
The research is to help Harvey Norman to identify the important of customer satisfaction. Besides, the research helps to understanding the customer expectation and increases their employee customer service skills. The company should serve customer well by setting goal for increase the customer service and customer satisfaction level. (Bridgette Burton, 2010) The research also helps to identify the improvement of the company in the future.
Chapter breakdown
Chapter 1, the author will discuss the outline of this research which is to explore customer satisfaction and customer services of Harvey Norman.
Chapter 2 is the literature review that summarize the journals and findings about the customer satisfaction, services or product that done by others.
Chapter 3 is the research methodology, research objective and research technique will be done.
Chapter 4 will analyze about all the findings done on questionnaire.
Chapter 5 is the major learning and recommendation in this research. The conclusion also will be done in this chapter.
Chapter 2
Consumer Buying Behavior
Consumer buying behavior refers to the buying behavior of the final consumer, those who buy products for personal or family use and not for business purposes. Marketers need to understand buying behaviour for some reason. An organisation has to analyze consumer buying behavior for consumers reaction to an organisation marketing strategy has a major impact on the organisation success. The marketing concept stressed that an organisation need create a marketing mix to satisfy customers. By getting a better understanding of the factors that affect buying behaviour, marketers can predict how customers will respond to the marketing strategies. Consumers attempt to maintain and acquire an assortment of products that satisfy their current and future needs. William M. Pride,O. C. Ferrell,p.177
Consumer buying behavior can be categorized in four types, but basically by the degree of consumer involvement and extent of perceived differences within brands of products. The behavioral characterizations include complex buying behavior, where consumer involvement in the buying is high and the consumer sense many vital differences within brands.
Habitual buying behavior is consumer involvement in the purchase is low and the consumer perceives little vital differences within brands. For example newspaper, salt or sugar.
Variety- seeking buying behavior is consumer involvement in the purchase is low and the consumer perceives a lot of vital differences within brands, leading to case of brand switching for the reason of experiencing variety.
Dissonance reducing buying behavior is consumer involvement in the purchase is high and the consumer perceives little vital differences within brands, leading to case of consumers are obsession to shop for an infrequent or expensive purchase.(Scott G. Dacko,2008, p.119)
Consumer Buying Model
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Adapted from: www.emeraldinsight.com/
Factor influencing consumer behavior
Many uncontrollable factors will affect consumer behaviour. What factors will influences you before you purchase a good or service? Is it your family, your friends, your culture, or influences from certain groups?
Culture is one factor that influences consumer behaviour. Culture refers to our beliefs and attitudes. Culture is the important character of a society that distinguishes it from other society groups. The underlying elements of every culture are the myths, values, customs, rituals language, and laws that form the behaviour of the people, as well as the material artifacts of that behaviour as they are transmitted from one generation to the next. (Lamb, Hair and McDaniel, 2009)
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For a person growing up, parents are influenced their child. Sister, brothers, and other family member also may instruct them wrong or right. The religion and culture they learn will benefit them develop attitudes, idea and beliefs. These will influence the buying behaviour but the other factors for example people they respect and groups of friends will influence choices of buying product or service.
Social
Reference groups
Reference groups are groups of people that have an influence on consumer behaviour. People that you look up to because your respect their judgements are opinion leaders that may impact consumer decisions. For example a friend who expert in IT trade may influence your choice to purchase a computer.
Role
Role is things that you should do based on the expectations of you from your position within a group. People have many roles for example father, wife, employee. Individuals role are continuing to change therefore marketers must continue to update information.
Society
Consumers are influenced by what is going on around them-the input of society. Society influences consumers by making them aware of certain needs and making them want to buy certain product and services. (Gerber and Bothma, 2008)
The economical environment also impacts the consumer behaviour. For example has a steady job or the income to spend. Marketing and advertising influence consumers obviously in evoke them to purchase a specific product.
Personal
People social status also impact consumer buying behaviour. For example the parent will influence the children buying habits depending on the age.
People change the products and services that they buy over their lifetime. Marketers define their target markets as certain life-cycle groups and develop appropriate products and marketing plans. (Talloo, 2008)
The lifestyle will be a factors influencing consumer behavior as one who earns RM10, 000 and one who earns RM1, 000 would be a different on spending income.
The characters have an influencing on consumer buying behavior as one is outgoing person and one is introvert will has clearly different on the types of buying. (marketingteacher.com)
Psychological
Motive is a driving force that causes a person to take action to satisfy specifies needs. Motivation marketers can analyze the primary forces influencing consumers to buy or not buy products and services. When you buy a product, you usually do so to fulfil some kind of need. This need becomes motives when aroused sufficiently. (Lamb, Hair and McDaniel, 2009)
perception
The process of selecting, organizing and interpreting data inputs to produce meaning is perception. Selective exposure is select inputs to be exposed to our awareness. Selective distortion is changing present received information, inconsistent with beliefs. Selective retention is memories inputs that support beliefs, neglects useless data. Interpreting information is according on things already familiar and knowledge stored in the memory.
Learning
When people act, they learn. A change in an individual behaviour appearing from experience is learning. The importance of learning for marketers is that they can build up demand for a product and services by associating it providing positive reinforcement, with strong drives, and using motivating cues. (Talloo, 2008)
consumerbuyingbehaviour1 Factors Affecting Consumer Buying Behavior
Adapted from: www.marketing91.com
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Adapted from: http://www.consumerpsychologist.com/intro_Consumer_Behavior.html
Consumer Buying Process
What factor influences consumers to buy products or services? The consumer buying process is a matter as many external and internal elements that impact on the buying decisions of the consumer. (marketingteacher, 2011)
Consumer behavior includes the psychological processes that consumers will recognizing needs, finding ways to solve, making purchase decisions example whether or not to purchase the product, interpreting information, make planning, and implementing. (Ray Lester, 2008)
1. Need Recognition
How you decide to purchase a product or services you want? Need recognition is the result of an imbalance between an actual and a desired personal state. Need recognition may be triggered by the knowledge that a current product is not performing properly, or when another product seems superior to the one currently used. Once a need or want is recognised, the consumer then begins to conduct an information search. (Olsen and Zhao, 2010)
2. Information search
The buying process often involves sequence of activities associated with finding the most suitable merchant of the product in question. Consumer will trust internal and personal sources of information more than external sources. Internal source is memory and external source is friend and family ideas. The degree of risk involved in the purchase, the amount of experience that the consumer has with the product category and the actual cost of the search in term of time and money will affect the effort to the search information. Consumers narrow their potential choices to an evoked set of suitable alternatives that may meet their needs. (Ferrell and Hartline, 2008,p151.)
3. Evaluation of various alternatives
After collecting information about various brands of the product, the person will make comparison of various brands of the product. It involves mental exercise. This stage is a critical stage of buying process. The person may take advice of the other persons. In this stage the person analyses various attributes of product- price, quality ,coloue, design, warrantee,etc. Trehan. 2010
4. Purchase decision
A consumer’s purchase intention and the actual act of buying are distinct concepts. Several factors may prevent the actual purchase from taking place. Marketers must ensure that their product is available and offer solutions that increase possession utility
5.Post Purchase Evaluation
In this stage is the connection between the buying process and the development of long-term customer relationships. Marketers must closely follow consumers responses like satisfaction, siassatisfaction or cognitive dissonance to monitor the product performance and its ability to meet customer expectation. Cognitive dissonance means have you made the right decision (Pride, Hughes, Kapoor, 2010)
7 Ps
Product
Is your current product or service, or mix of products and services, appropriate and suitable for the market and the customers of today?
The product means everything that is offered to a market for its consumption or use. The product can be a physical object or a service of some kind. The product offered by a manufacturer consists of physical items such as laptop, cosmetics or machine tools. Products that offered by service industries like accountancy services and dental treatments. The range of products offered is called product mix. The organisation revenue is obtained from the sales of products. It is clearly important that the range and quality of product mix is frequently evaluated and amended. (Cole,2004)
A product can be described as a bundle of attributes or characteristics.a product’s main reason for exixtence is called its core benefit. It is the simplest possible answer to an expressed need: no branding or packaging, no warranties or services promises, just most basic reason why that produce would be needed. (Pickton, Masterson p205. 2010.)
Prices
Pricing strategy is based on demand for the goods and the cost of manufacturing it, some special considerations can also influence the price. A special introductory price is used to get customer to try a new product. Some organisation enter a market with very high prices and then lower them over time, example producers of high definition televisions and personal computers. Gitman and McDaniel, The price of the product must be set at the right place for the target market.
Prices is the valuation placed upon the product by the manufacturer. It has to cover pricing, discounts, allowance, credit terms and so on. It deals with price competition. Itkar, p11
The second P in the formula is price. Develop the habit of continually examining and reexamining the prices of the products and services you sell to make sure they’re still appropriate to the realities of the current market. Sometimes you need to lower your prices. At other times, it may be appropriate to raise your prices. Many companies have found that the profitability of certain products or services doesn’t justify the amount of effort and resources that go into producing them. By raising their prices, they may lose a percentage of their customers, but the remaining percentage generates a profit on every sale. Could this be appropriate for you?
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Sometimes you need to change your terms and conditions of sale. Sometimes, by spreading your price over a series of months or years, you can sell far more than you are today, and the interest you can charge will more than make up for the delay in cash receipts. Sometimes you can combine products and services together with special offers and special promotions. Sometimes you can include free additional items that cost you very little to produce but make your prices appear far more attractive to your customers.
In business, as in nature, whenever you experience resistance or frustration in any part of your sales or marketing activities, be open to revisiting that area. Be open to the possibility that your current pricing structure is not ideal for the current market. Be open to the need to revise your prices, if necessary, to remain competitive, to survive and thrive in a fast-changing marketplace.
Promotion
The third habit in marketing and sales is to think in terms of promotion all the time. Promotion includes all the ways you tell your customers about your products or services and how you then market and sell to them.
Small changes in the way you promote and sell your products can lead to dramatic changes in your results. Even small changes in your advertising can lead immediately to higher sales. Experienced copywriters can often increase the response rate from advertising by 500 percent by simply changing the headline on an advertisement.
Large and small companies in every industry continually experiment with different ways of advertising, promoting, and selling their products and services. And here is the rule: Whatever method of marketing and sales you’re using today will, sooner or later, stop working. Sometimes it will stop working for reasons you know, and sometimes it will be for reasons you don’t know. In either case, your methods of marketing and sales will eventually stop working, and you’ll have to develop new sales, marketing and advertising approaches, offerings, and strategies.
Place
Distribution strategy is creating the channel by which a product flows from the producer to the consumer. One aspect of distribution is deciding how many stores and which specific wholesalers and retailers will handle theproduct in geographic area. Place is selecting operational location and types od distribution channels according to coverage, efficiency, requirement, profile, technical and so on. (Katsioloudes and Hadjidakis,2007)
Place consists of all the activities involved in transferring ownership and physical possession of the product to consumers.it purpose is to make the product and service available to customers at thr right time and at thr right place. Distribution mix include channels of distribution and physical distribution.
physical distribution includes all activities which are involved in moving products and services from manufacturers to consumers. It consists of transportation and storage of goods. (Gupta,2007)
Promotion must communicate to the target market that the right product is available in the right place at the right time. (Kitchen, Proctor p174-175. 2001.
The fourth P in the marketing mix is the place where your product or service is actually sold. Develop the habit of reviewing and reflecting upon the exact location where the customer meets the salesperson. Sometimes a change in place can lead to a rapid increase in sales.
You can sell your product in many different places. Some companies use direct selling, sending their salespeople out to personally meet and talk with the prospect. Some sell by telemarketing. Some sell through catalogs or mail order. Some sell at trade shows or in retail establishments. Some sell in joint ventures with other similar products or services. Some companies use manufacturers’ representatives or distributors. Many companies use a combination of one or more of these methods.
In each case, the entrepreneur must make the right choice about the very best location or place for the customer to receive essential buying information on the product or service needed to make a buying decision. What is yours? In what way should you change it? Where else could you offer your products or services?
Promotion
Every product need to be promoted, this is the needs to be drawn to the attention of the marketplace and its benefits. The principal methods of promotion include personal selling, publicity, sales promotion and advertising.
Promotion is important element of the mix and refers to any medium that can be used to communicate with the target groups. The promotional mix include workshops, discussion groups, newsletters,presentation and so on. It is also concerned with the message that is being transmitted. (Meek, Palmer, Parkinson,2007)
Process-
the way in which these services are deliverd (e.g policies and procedures adopted, amount of discretion on the part of staff, the booking system use for appointments)
All aspects of what has to happen must be carefully thought through, drafted, evaluated, modified and supervised.the introductory process, should be timetabled and then managed so that what is announced actually happens when and how it should. (Worsam p.227. 2002.
Process refer to the system used to assist the organisation in delivering the service.
Process represent the convergence of the marketing and operations functions and therefore effect real-time service delivery and quality.
Physical evidence
-the physical environment (e.g. furnishing, colour scheme, noise) and facilitating goods (e.g. hire cars, packaging of dry-cleaned clothes) which related to the provision of services.
Physical evidence
Given the intangible nature of services, customers look for reassurance relating to required benefits and quality. They look for physical evidence (eg fixtures and fitting, appearance of staff) as an indicator of likely satisfaction (Drummond, Ensor p10. 2005
Physical evidence is the visual or tangible clues of the service product, such as design and construction of the facility and in general the aesthetic appeal.
People
People-those who deal directly with customers and who actually perform a service
People are responsible for the event and are a major distinguishing quality in the consumption process. (Shilbury, Westerbeek and Funk. P7. 2009.
People refer to all people directly or indirectly involved in the consumption of a service like employees or other consumers. An essential ingredient to any service provision is the use of appropriate staff and people. Recruiting the right staff and training them appropriately in the delivery of their service is essential if the organisation wants to obtain a form of competitive advantage. Staff should have the appropriate interpersonal skils, aptititude and service knowledge to provide the service that consumer are paying for. Kumar. P48. 2010
The final P of the marketing mix is people. Develop the habit of thinking in terms of the people inside and outside of your business who are responsible for every element of your sales and marketing strategy and activities.
It’s amazing how many entrepreneurs and businesspeople will work extremely hard to think through every element of the marketing strategy and the marketing mix, and then pay little attention to the fact that every single decision and policy has to be carried out by a specific person, in a specific way. Your ability to select, recruit, hire and retain the proper people, with the skills and abilities to do the job you need to have done, is more important than everything else put together.
To be successful in business, you must develop the habit of thinking in terms of exactly who is going to carry out each task and responsibility. In many cases, it’s not possible to move forward until you can attract and put the right person into the right position. Many of the best business plans ever developed sit on shelves today because the [people who created them] could not find the key people who could execute those plans. ( Brian Tracy, 2004)
Definition of Satisfaction
As Susan Ward (2008) states, a high quality customer service is the life blood of any business. Good customer services could help organization to remain customers. High quality customer service is created when the organization start to provide great services at all the time. As a customer, the standard and quality of the customer services determines whether the purchases or to leave, even the product and service itself is fulfillment of desire (Alan Chapman 2009). According to Tami Runstedler (2010), the biggest strategy in business is customer services. We need to build relationship with customer by added personal touch. Besides, excellent customer service is help to build business to customer loyalty. With customer loyalty, the organization attains the customer for life. This point has been supported by Albert E. Schindler (2004).
Customer satisfaction is the act of just doing enough to be acceptable to a customer. It is simply meeting basic expectations.Eric Jacques 2010
Service Quality
Thus service quality objectives follow directly from business strategy (where else could they come from?), and business strategy itself must incorporate quality objectives. Aiming to be the “world’s best” is hardly necessary and rarely useful. The more insightful question is, “Are we offering our services in such a way that we deliver high value to customers while controlling our costs?” Service quality is thus not a question of whether your service is superior to that of a distant competitor or whether you meet arbitrary industry benchmarks (both of which can be useful in some situations). Your goal is not to impress industry analysts. Rather, you must determine if your service offering is suitable for your purpose given your business strategy.
It’s a shock to realize that most companies operate under the same strategic guidelines: satisfy customers, treat employees well, and make a profit. What sets a service organization apart is not its generic strategy, but the particular, individual situation in which a given firm finds itself. Each firm’s quality agenda must match its competitive position, its budget constraints (current & future income), and the benefit-oriented value proposition it offers customers.
It is common to over-engineer service offerings in the name of “quality improvement,” or “capturing the market,” or “customer satisfaction.” Product engineers and visionary leaders tend to have a perfectionist bent. It’s fun, it’s cool, and everything is a “must have.” But it’s the job of the responsible quality manager to add in and take away – to balance the tradeoff between benefits and costs. If for example your (new and existing) customers would be perfectly content with four-hour on call responses and 24 hour non-emergency replies, but you’re managing to 30 minute on calls and one hour non-emergency responses, then you’re shipping cost. That is, your service offering has features that do not benefit our customers. If the actual or projected market doesn’t want the service you’re providing, and it costs you money, stop doing it. Allocate your money to better uses.
This emphasis on benefit-oriented service quality is certainly subjective and difficult to measure. Acknowledge subjectivity is part of the quality game. Quality measures are both subjective yet critically important. Continual quality improvement will measure service offers in terms of (current & future) customer satisfaction, and will always balance the tradeoff between (current & future) income vs costs. James A Bergstrom
Many years ago, in an effort to produce higher quality service and higher customer satisfaction, businesses instituted a satisfaction survey that was given to all customers. They let the customers know that they would be surveyed to see if they were satisfied with the product. The idea behind this was to let the customers know that the business cared about their satisfaction and was willing to listen to their feedback.
This approach, however, does more harm than good. Studies have shown that when customers expect to receive a satisfaction survey, they are less satisfied with the services. Ofir & Simonson (2001) obtained these results in a series of cleverly designed field experiments across a number of industries; these included a computer company, an electric utility company, a supermarket, an electronic equipment company, and a magazine company. The experimenters let some people know that they would be asked about their satisfaction (after receiving services), while others were not notified. All were contacted after receiving the services to assess their satisfaction. The experiments were all conducted on large samples of actual business transactions. The findings were clear: customers who were told they would be asked about their satisfaction reported less satisfaction than those who did not realize they would be asked for their opinions.
In addition, pre-announced satisfaction surveys are expected to be detrimental to employe
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