Management of Service Operations

MANAGEMENT OF SERVICE OPERATIONS

MKTG214

2014-2015 (2nd semester)

Lecturer: Chan Ka Sik

Absinthe Gao

S136298

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Content 

Objectives of the countermeasures        

Strategies of the countermeasures        

Limitation of the effectiveness of the countermeasures        

Budget and Resources required for the countermeasure (Figure 5)        

Appendix        

Reference        

Objectives of the countermeasures

In the group assignment which we did in this semester, our brand is Columbia, and the main competitor is The North Face. We collected and analyzed a large amount of data and information about Columbia. After sorting out and analyzing the responses about our questionnaires which mainly focused on customer expectation of this sportswear brand’s merchandises and customer satisfaction about service which is provided by staff in stores. The results showed that the company’s brand imagine cannot match the customer’s expectation. Therefore, we did the corrective measures plan to achieve our goal. However, there are still four main problems after doing this plan.

First of all, Columbia do not provide a great deal of customer service and personal attention since the staff who work in stores do not have enough professional product knowledge. Sometimes, when some customers asked the specific question about the performance and function of products they want to buy, the staff cannot answer them quickly and correctly. Although Columbia provided the professional training to their staff in order to improve the employee attitude and product knowledge, but the company does not focus more attention on the moment of truth. Therefore, the Columbia Company maybe cannot get more customers.

Furthermore, the speed of inventory replenishment is not quick enough since most stores of Columbia are located in tourist gathering regions, such as Ruins of St Paul’s, the Venetian and Rua do Campo. It means that tourists will be centralized purchasing. It will cause the storage of some assortment of products. If retailers cannot replenish the products in time, customer will feel unsatisfied, even they will have the bad impression and word-of-mouth about this brand. Columbia planned to outsource the replenishment system to improve the speed of delivery, but the cost of this system is too high. Although it can help Columbia increase their replenishment speed, the cost is too high to afford in the long-term period if they just make their old loyal customer to stay but cannot attract new customers.

Moreover, a large part of customer about Columbia in Macau is tourists. It means that although it will have some problems about the products, they cannot go back to the store to get refund. Therefore, the return policy has shortcoming as well. However, if Columbia do not promote or explain their new return policy to tourists who purchased in their shops, the customer will not know this policy. If the products have some problems and they cannot get refund, they will still feel unsatisfied and give bad word-of-mouth to their family and friends. The company will lose consumers as well. And if this policy only has benefit on tourists’ customers, and the company does not have extra benefit on local customers, the local customers will think that the company does not pay attention on local people. They will have the bad impression about this brand. Finally, customers will not go back to this store anymore instead of going to their competitors’ shop to purchase.

Last but not least, Columbia store in Macau has the small assortment and variety of products since the rent of Macau is too much high. They do not have enough space to display a lot of different varieties of products. Thence, sometimes customers may not buy the merchandises which they really want. According to the economic situation in Macau, the rental fee will not reduce too much. It means that renting the larger size of store is not the long-term solution if the company cannot make more profit.  

Consequently, although the Columbia Company established the corrective Measures plan, there are still some problems. Therefore, The North Face Company should prepare a short-term business plan on these four areas’ shortcoming about Columbia Macau in order to recover the market position.

Strategies of the countermeasures

 Deal with Improve employee’s attitude

According to “The Australian Magazine” (2014), moment of truth is the instance of contact or interaction between a customer and a firm that gives the customer an opportunity to form or change an impression about the firm. It means that customers only can remember some important moments. Retailers should focus more attention on this area.  As The North Face, managers should strive to imbue the moment of truth concept to their staff in their daily work, even they can hire some outside professional managers to do the training once a month about it in order to let employees know the importance of moment of truth. Furthermore, the managers who have duty on service operation should set an example for the staff in influencing employees’ emphasis on quality of service.

Moreover, based on the game established by American Hotel Partners Management Company in 1982, the managers designed the game called “dancing customers’ game” to train the staff to focus on Moment of truth. Therefore, The North Face can use this game as well. First of all, they need to hire one or two experts to analyze the moment of truth’s points about these stores. And then, to train staff when this situation happen, what should they do. When the face these points, they can face and solve them flexibly and correctly.

In addition, providing the personal service can improve success rate on the moment of truth. Nowadays, more and more people like to show their personality. Therefore, some company such as Nike and Apple provide customized service. For example, Apple Online Store offers personalized laser engraving services. Customers can engrave any words. Furthermore, customers can customize Mac Book on Apple Online Store. They can choose what hardware configuration they want. Moreover, I do the survey online (figure 1), the result shows that most of people want to have the specific clothes. Regarding this, The North Face can offer the customized service. For example, they can offer the name embroidered service. The stores need to outsource the Tailor shop to do this job. When customers need this service, they can go to the specific tailor shop to embroider their name, and it will not take too much time. Maybe just because of this a little change, it can make stores get more loyal customers.