Управление качеством в международных корпорациях. Практикум на английском языке

Practical training

and carry only 6–7 000 of the available products in the general assortment. While there is no adjustment made in the assortment to the Swedish market, adjustments are made to the local market by the stores (in terms of marketing and the local competition situation) who have the authority to adjust to local competition and have during the latter years received and developed more marketing initiatives than previously. Price (as a marketing tool) is central in Sweden as IKEA is known for its low price. This is done by have a low price promise and the aim is to have a low in comparison to competitors in different areas. In recent years, here as in most parts of the IKEAworld, cutting prices has been a major marketing strategy, by some 20 % over the last 8 years. Sourcing for all the larger and transport wise heavier and bulkier products are done in Europe (and Sweden itself is one of the larger sourcing countries for IKEA outside Asia).

Location and store formats

In Sweden IKEA stores are located as in much of the IKEA world: outside city centres, with a focus on consumers using their own cars totraveltoandfromIKEAstores.ForIKEA,establishinganIKEAstore in Sweden if fairly easy, IKEA gets many propositions from different areas and towns in Sweden wanting an IKEAstore. One of the recent and much publicized openings of IKEA stores in Sweden was the store in Haparanda Tornio. Haparanda Tornio is in the far north of Sweden (on the border to Finland) and launch of the store there has been a big success not only for IKEA but for the whole community (which is an area where depopulation is a major problem).

However, even though it is easy to find places to establish IKEA stores in Sweden, there is still (also for IKEA) competition about the good places to locate a store.

As mentioned above, IKEA stores in Sweden has been fairly small, in the lower rim of square meters and number of articles stored (except the big store in Kungens kurva which is the biggest IKEA store in the world). There are plans to refurbish stores and make them bigger, and new stores are always bigger than the older ones. Otherwise the format of the store follows the IKEA standard layout with parking lot outside the store and a two floor store. Some new stores, like the new store in Malmö, is planned to be built on pylons and have the car park under the store (like in Shanghai for instance).

Advertising and promotion

In Sweden the catalogue is the most important promotion tool. It makesIKEAunique,isasourceofinspirationandisthemostimportant

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printed marketing tool IKEA has. In Sweden the launch of the new catalogue is a major thing, something that all major newspapers have lengthy reports about and that is a major PR thing. In 2008 IKEA furnished the waiting hall of Stockholm train terminal when the new catalogue was launched August 14th.

IKEA Family was first launched in Sweden and was at that time one of the first loyalty cards and clubs in Sweden. Today it is still one of the bigger ones with 1,7 million members and is still a very important marketing tool for IKEA in Sweden.

The web is also important for IKEA Sweden, maybe especially for new groups of customers (for example younger customers) and because it is a good way to make customers prepare for the store visit and it is also there IKEA can make accessible different planning tools like for instance the kitchen planning tool.

IKEA’s approach to the Swedes in advertising and promotion is intended to be youthful and different, fun and surprising, emphasizing that nothing is impossible but that the company also is very honest and human. At the moment IKEA in Sweden is in a period of relaunch. While being well known (as IKEA is in Sweden) is often an advantage, it can also be a disadvantage. Consumers get used to the company and the rebellious attitude and image is hard to keep when penetration – in many age groups – is very high. Compared to many other IKEA countries, IKEA in Sweden is in another part of the IKEA lifecycle where consumers have homes filled with IKEA furniture and accessories, IKEA is the market leader for kitchen in Sweden etc. How do IKEA make the Swedes still find it exiting and new? The line for 2008 is «Decorate the home as you want to live» and «Long live diversity».

Examples of IKEA address Swedish customers is a campaign that is a few years old and went from the fact that in IKEAtarget group there are a lot of divorced parents that share custody of children. So the campaign focused on how IKEAcontributed to the slogan «Better divorce for everybody». IKEA has also focused on campaigns which points to the diversity of the Swedes in terms of ethnicity, showing different ethnic groups in Sweden as customers. One of the more well-known and longest running campaigns is the one with the slogan «Not for the rich but for the wise»emphasizing that IKEA has high quality for low prices and that wise customers realize that.

The selling environment and service

The stores are the main marketing tool of IKEA in Sweden, this is where thecustomer comes and this is where they can see what it

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is all about. As indicated above, IKEA stores have been fairly small in Sweden which has meant that it in many places has been difficult to expose and show the width and depth of the assortment IKEA actually has. Increasingly new and bigger stores are built to allow for showing the customer more of the IKEA product range.

The stores in Sweden are set up in a fairly standard way. The common store planning which is the IKEA store planning blue print is used as a starting point – but that then meets the actual or planned store which makes for adjustments in the standard layout. As in all IKEA countries, the furniture part of an IKEA store (the room settings on the 2nd floor of the store) is always opened by 5 rooms that are the same all over the world – but these are also adjusted locally to see what the local markets can do with this.

While the stores are to some extent set up the same way, local adjustments are made to the normal room-size of a living room or a bed room of the country market, the interior of the kitchen etc. A Swedish IKEA store for instance have often kitchen room settings with what is called a kitchen island (part of the kitchen is a standalone part integrating cooking, washing up and eating places in the kitchen) and walk in closets.

To Swedes the DIY concept of IKEA (and DIY in general) is an accepted concept: you collect your flat pacs, carry them home, assemble and you pay a lower price. Still, in recent years IKEA in Sweden have added services concerning home delivery and assembly service at a cost for customers that want this.

When it comes to the Customer Satisfaction Index (CSI) that all markets in IKEA do regularly central factors are waiting time and product in stock, which is something that IKEA Sweden has worked with a lot and have improved in recent years. This also indicates that one major problem in IKEA stores in Sweden has been queues in stores and out of stock of products. IKEA still get high points from Swedes on innovativeness and the low price level.

Tasks

1.Name and describe the standardization group.

2.Describe the financial aspect of SIS.

3.Describe the key features of IKEA.

4.Compare the life cycles of IKEA in different countries.

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Questions

1.What subsidiaries exist at SIS?What distinction in them?

2.Why structure of SIS was reorganized?

3.What are results of reorganization?

4.What role is played by SIS on the international scene?

References

1.Standardizedmarketingstrategiesinretailing?IKEA’smarketing strategies in China, Sweden and the UK, Steve Burt, Paper accepted for presentation at the 1st Nordic Retail and Wholesale Conference in Stockholm (Norrtälje), 6–7/11, 2013.

2.IKEA’s corporate web site 2012–09–15: http://franchisor.ikea.

com/

3.Salzer M. (2014), Identity Across Borders – a study in the IKEA–World,Linkoping Studies in Management and Economics, Dissertations No 27, LinkopingUniversity.

4.Nilsson Leif. Current trends in Swedish place-name standardization. Onoma 35, 2014. 279–287.

5.Nilsson Leif. 2012. Standardization of Swedish place–names in the 20th century. In: Proceedings of the XXth International Congress of Onomastic Sciences 20–25 September 2012, Santiago de Compostela. 521–526 (Biblioteca Filolóxica Galega). A Coruña: Instituto da lingua Galega.

6.Nilsson Leif. 2015b. The Place–Name Advisory Board of Sweden.Namnochbygd93,105–108.Nilsson,Leif.2015.Addresses, place-names and legislation in Sweden. In: Proceedings of the 22nd International Congress of Onomastic Sciences. Pisa, 28.8–4.9.2015. Pisa: Edizione ETS (in print).

10. THE SWISS INDEX OF CUSTOMER

SATISFACTION

The purpose of this practice – to discuss and fix bases of index of customer satisfaction, its main principles in Sweden.

This practice will allow creating competences PK-3: possession of skills of the strategic analysis, development and implementation of strategy of the organization aimed at providing competitiveness; and PK-5: ability to analyze interrelations between functional strategy

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of the companies for the purpose of preparation of the balanced administrative decisions and also to acquire the following knowledge and abilities:

–knowledge of index of customer satisfaction bases;

–understandingofanorderofitsimplementationinthecompanies’ activity;

–ability to define, what elements index of customer satisfaction consist in and how to use them to develop the company and economy.

Relevance of practice consists in necessity to know Sweden experience of index of customer satisfaction.

Theoretical part

In highly competitive environment, company must be customer oriented and customer satisfaction. It represent a modern approach for quality in business life and serves the department of truly customer oriented culture and management. Modern management philosophy considers customer satisfaction as base line standard of performance and possible standard of excellence for any business organization.

There is growing managerial interest in customer satisfaction as a means of evaluating quality.Achieving higher customer satisfaction is widely believed to be the best indicator of the company’s future profit. Customer satisfaction can be experienced in various situation and connection to both good and service. It is highly personal assessment that is greatly affected by customer expectation.

Parker and Mathew (2001) expressed that there are two basic definition of the concept of customer satisfaction. First approach defines satisfaction as a process and the second approach defines satisfaction as an outcome of a consumption experience. These two approaches are complimentary, and often one depends on the other.

Customer satisfaction is an evaluation of the perceived discrepancy between prior expectation and the actual performance of the product (TSE and Wilto, 1988, Oliver 1999). Satisfaction of customer with products and service of accompany is consider as most important factor leading towards competitiveness and success (Henning Thurau and Klee, 1997). Kotler (2000) define satisfaction as «persons feeling of pleasure or disappointment resulting from comparing a products perceived performance in relation to his or her expectation».

Satisfaction can be related to specific attribute and overall performance. It is attributed specific weather it related to specific

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product or service (Cronin and Taylor, 1992). This theory approach has origin in the discrepancy theory (Porter, 1961), and which argued that satisfaction is determined by the perception of a difference between some standard and actual performance.

The outcome approach of the customer satisfaction is defined as the end-state satisfaction resulting from the experience of consumption. This post consumption state can be an outcome that occurs without comparing expectations (Oliver, 1996); or may be a cognitive state of reward, an emotional respond that may occur as the result of comparing expected and actual performance.

Parker and Mathews (2001), expressed that attribution has been focused on the nature of satisfaction of the outcome approach which includes the following:

fulfillment: the theory of motivation expressed that people are given by the desired to satisfy their needs (Maslow 1994), or by their behavior aimed at achieving the relevant goals (Vroom, 1964). However, satisfaction can be either way viewed as the end point in the motional process, thus customer satisfaction can be seen as the consumers fulfillment response (Rust and Oliver, 1994);

emotion: satisfaction is viewed as the surprise element of a goods or service purchase and or consumption experience (Westbrock and Reilly, 1983). This knowledge the input of competitive cognitive process but goes further by stating that these may be just one of the determinant of the effective «state» satisfaction (Park and Mathews, 2001);

state: there are four frame works of satisfaction, which related to reinforcement and arousal «satisfaction as pleaser result positive reinforcements, where the product or service is adding to arousal restate «Relief» satisfaction result from negative reinforcement (Oliver, 1989), In relation to arousal low arousal fulfillment is defined as «satisfaction as contentment» a result of the product or service performing adequately in an ongoing passive senses. High arousal satisfaction is defined as satisfaction as either positive (delight) or negative surprise, which could be shock (Rusy and Oliver, 1994). Satisfaction is conceptualized as an overall customer evaluation of product or service based on purchase and consumption experience over a time period(Fornell ,1992)

Whether customer satisfaction is a process or an outcome many definition conceptualize satisfaction as a process which is currently

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the dominant view held by most scholars (Oliver, 1980). The process perspective of customer satisfaction is a feeling of satisfaction that result from the process of comparing perceived performance and one or more predictive standards, such as expectation or desires (Khalifa and Liu, 2002).

Another important view in customer satisfaction literature is whether satisfaction is cognitive or affective. Although most scholars, notable proponent of disconfirmation theories, they view satisfaction as a process, but the nature of dissatisfaction is cognitive assessment involving comparison of product /service offering from a service or goods provider against expectation. Other scholar opinion that the feeling of satisfaction represent an emotional or affective stage of mind that is formed through the process of delivery where customer encounter service experience that affect their emotion.

Satisfaction may be viewed as transactional or cumulative; on the other hand from a transactional-specific perspective, customer satisfaction is based on time, specific post, and purchase evaluative judgment of a service encounter (Hunt, 1977; Oliver, 1977). On the other hand, in cumulative final effect, customer satisfaction is conceptualized as an overall customer evaluation of a product or service based on purchase and consumption experiences over a time period (Fornell, 1992).

From the above definition customer satisfaction in insurance means the use of a policy product purchased for a cost, to the ultimate satisfaction of the buyer, when a claim is paid. The satisfaction is not fully achieved only when a product so purchased gives its full user, but it also stipulated that the product bought by the buyer give him the expected fruit i.e. peace of mind during the product cycle when it is in use by the customer.

Customer Satisfaction vs. Profitability

Customer satisfaction does have a positive effect on business organizations profitability. According to Hoye and Macinni (2001) satisfied customer form the foundation of any successful business as customer satisfaction leads to repeat purchase, brand loyalty and positive word of mouth.

Fornell (1992) showed that higher customer satisfaction help to achieve in to higher than normal market share growth, the ability to charge a higher price, lower transaction cost and strong link to improve profitability. The higher the number of business conducted

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with a firm is directly related to customer satisfaction which leads to profitability and strongly associated with improved share of spending (Keiningham, 2005).

Some empirical study demonstrated that; customer satisfaction has greater influence on repurchase intentions and profit for service company (Edvardssonet.al. 2000); customer satisfaction affects share of wallet (sow) positively (Broun and Scope, 2003); Keiningham etal,2003). Customer satisfaction leads to increase profit (Fecikova, 2004) and customer satisfaction is strongly associated with improved share of spending (Keiningham, 2005). Increase customer satisfaction level will leads to high customer retention rate, which is a key determinant for customer loyalty, which may also increase the expected profit (Rust and Zohorik, 1993).

Coldwell (2001) growth strategies international (GSI) performed a statically of customer satisfaction data encompassing the finding of over twenty thousand customer survey conducted in forty country by in to quest. The conclusion of the study is as follow:

–total satisfied customer contributes 2.6 times as much relevant to company as a somewhat satisfied customer;

–total satisfied customer contributes 17 times as much revenue as somewhat dissatisfied customers;

–total dissatisfied customer decrease revenue at a rate to 1.8 times what a total satisfied customer contributes to a business.

Factors that affect Customers Satisfaction

Several researchers on customer satisfaction in the service industry identify important factors driving customer satisfaction (Colgate1992). For example Anderson and Sullivan (1993) conduct a study in Sweden and found that the level of customer satisfaction increases with level of perceived service quality. Colgate(1999) suggested that an increased level of customer satisfaction and loyalty are positive linked to a firms financial returns. Satisfied customers are likely to recommend their insurance to their friends and relatives. The author suggested the overall customer service, close relationship, and competitive fee and charges is top three deriver of customer satisfaction.

Parasamanet (1985) argued that service quality involves not only the outcome but also the delivery process. The authors described service quality as a form of attitude that results from the comparison of consumer expectation with the service performance delivery

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furthermore service quality relates to satisfaction but the two things are not the same (Cronin and Tayler,1992) .

Customer from their overall satisfaction perception is based on four primary dimension; interaction quality, physical environment quality outcome quality and network quality. Further the service quality perception perceived by insurance customers are expected to influence their overall satisfaction value (price) is expected to have a moderating effect between service quality and intention quality ,physical environment, quality outcome and network quality respectively.

Perceived service quality

Service quality has been identified as an important contributing factor for financial organization to retain its customers (Enneu and Binks, 1990). In order to maintain competitive advantage within the industry and keep existing customers it is critical for financial industry to constantly improve their service quality (Avkiran1999). There is a direct relationship between service quality and customer satisfaction, complain behavior and commitment and conclude that service quality that leads to customer satisfaction.

Interaction Quality

Numerous insurance involves personal interaction therefore, researcher suggest that the interaction quality (the relation between staff and customer during service delivery) is important factor when customer evaluate service quality. (McDougall, Gordon Levasquen,1994). This author conceptualizes service quality from a technical and functional perspective suggested by Gronnroos (1984).

Dimension such as perceived price, core product, staff knowledge advice of offered efficiency in operation and accessibility also affect the service quality perception of consumer. Ojalso (2003) found out that the interaction during the service process have an effect on customers perception of service quality. Further ko and Pastore (2005) demonstrate the importance of interaction quality during the production and consumption of service due to high level of face to face communication.

Physical Environment Quality

Marketing researchers are concerned about the physical environmentornon-humanfactorsthataffectthecustomerperception of service quality (brand and Cronin 2001) Bitner (1992) reface to a non-human factors as the services escape which is the service

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environment has significant impact on customers perception of overall service quality.

Leblance and Nguyens (1988) study show that the physical environment quality has a large impact on perceived service quality .There are five important service quality dimensions that the surrounding environment is one of the important diminutions used to measure overall service quality(Howcroff ,1993). This physical environment has a key role on customer satisfaction

Outcome Quality

McDougall, Gordan, Levesquar and Terrence (1994) describe outcome quality as the performance related aspects of service quality that are determines by; the skills and knowhow of the employees ability to solve problems when that occurs which leads to customer satisfaction.

McDougall and Levesque (1994) note that service quality is comprised of three updating damnations; process, outcome and the tangibles. Service quality using three criterions related to the process/ outcome perspective the subject /objective quality in United Kingdom (Blanch ard and Golloway ,1994) .

Network Quality

The rapid growth in the information technology and network system during the past decade has introduced major change in the global economy and business environment. Information technology development has increase the communication and transaction between branches in the industry. Technical innovation for insurance leads to time saving and improves service quality.

Perceived value

Research on the relationship between value/pricing and customer satisfaction has been widely conducted, Matzler,Wurtele andRenz(2006) describe the role of price as the determinant during the purchase and after the purchase process. Prior research in value (price) satisfaction relationship including pricing policy, money back guarantees (Heskette et.al. 1990). Low and fixed price and fair and honest pricing (Ortemeyer et.al.1991) .The result of these studies are similar where “good” value (price) caused an increase in customer satisfaction. Value perceptions are considered to be the result of a cost benefit trade off(Zeithamls 1988) that compares the price customer have to pay with the quality they receive (Monroe,1990).

This causal relationship was also confirmed by other researchers in a number of empirical studies across various industries. For

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