Page 75 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Logistics and Supply Chain Management

Notes After examining ways and means of measuring service quality, what is more important is to
establish any relationship, linear or otherwise, between service quality and marketing. This
would go a long way to underscore the importance and relevance of measuring quality for
services. We have established the following relationships:
 Customer retention and reduced costs (the ‘leaking bucket theory’)

 Customer satisfaction and customer loyalty
 Customer loyalty and profitability (the ‘service-profit chain’), and
 Customer retention and customer net present value.
What remains to be established then are relationships between

 Service quality and profits
 Service quality and service marketing, and
 Service quality and customer service.
If the hypothesis is established that there are evidences of any linear relationships between the
variables then customer service should become one of the most important tools for service
marketing.

Task Which of the gaps in do you think represents the major problem for most firms?
How can a company attempt to eliminate the knowledge gap?

Self Assessment

Fill in the blanks:

9. …………………… is the degree to which customer expectations of a product or service are
met or exceeded.
10. …………………… exists to satisfy customer requirements by facilitating important
manufacturing and marketing operations.
11. …………………… is an unexpected event that disrupts performance of the system.
12. …………………… in service is as perceived by the customer.

3.4 Customer Success

In recent years, some firms have discovered that there is another commitment that can be made
to gain true competitive advantage through logistical performance. This commitment is based
on recognition that a firm’s ability to grow and expand market share depends on its ability to
attract and hold the industry’s most successful customers. The real key, then, to customer-
focused marketing lies in the organization’s using its performance capabilities to enhance the
success of those customers. This focus on customer success represents major commitment toward
accommodating customers.

Notes A customer service focus is oriented toward establishment of internal standards
for basic service performance.

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