Case Study - Difficult to make my customers smile


Hari Sundar. G
School of Communication and Management Studies (SCMS)


It is an established fact that attracting new customer is multiple timers difficult than retaining the existing ones. Equally valid is the statement- "making every customer smile all the while and converting every customer to be brand loyal ones, is not a cakewalk." Computers, electronic goods and home appliances market is characterized by the existence of multiple brands. Besides, there are very few significant brand differences which can be used to motivate the customers to buy or to remain loyal to the retailer selling them. In this backdrop, superior quality service is an absolute necessity. It is certainly a powerful differentiator in a crowded market place. Superior quality service concept has to be embedded in the psyche of the management and sales services staff too and has to be reflected in their activities. For making the customer to give a genuine smile of satisfaction, the management has to go beyond paying just lip sympathy to the wellbeing of customers.

About the company

Arena Shopping Mart (ASM) is one among the retail operation units that carries various lines of products such as PCs, home appliances, electronic goods and related products such as mobile phones, and digital cameras as well as DTH antennas. ASM focuses on meeting the needs of the middle income customers.

Three ASM stores are located in the three major centers of Kerala, Thiruvananthapuram, Kochi and Kozhikode and other five in various district headquarters. These places are homes of large number of middle level income groups and also bring in large number of working people from the nearby areas too. Management of ASM believes that approximately 70 percent of the sales in these stores accounts for by individuals who purchase through EMI options or under exchange schemes. ASM is well known for the range of products it offers for sales in its stores.

Customer service philosophy at ASM

"Customer first" has been the foundation of ASM philosophy right from inception. With customers becoming more demanding and escalating competition in the past years, management took the decision to use superior service quality as differentiator. Officially this is stated as "Providing second to none service and value for money for our customers". Company says that employees are encouraged "To help the customer by", rather than going for hard cell in order to develop long term customer loyalty. The company argues that its basic principles are quality products, value for money and customer service, and points out that while the first two can be controlled by the head office, the latter is very much in the hands of other units and hence considerable attention needs to be devoted to this area.

Service Quality Initiatives

With this philosophy practiced, the management of ASM was convinced that it would ensure customer loyalty and result in the spread of positive word of mouth. While implementing this service quality initiative, scientific analysis was carried out pertaining to pre, post and during sales service components. A two-day orientation programme for sales tax was also conducted. Besides, following steps were taken:

    1. Establishment of 24x7 customer care line.

    2. Suggestion card schemes for its sales tax, for improving the service.

    3. Sales person who perform above and beyond the call of duty are awarded with certificates and cash.

    4. Sales person who acts to his stupidity (not performing well) are given a pair of Hawaii chappals (slippers)

ASM philosophy is to help the "average customer" purchase as painlessly as possible. Management wants a store image and products to reflect this user-friendly objective.

The issue

In spite of all the efforts by ASM to provide quality service to its customers, the management is worried with the increasing no. of customer complaints received by the stores in various branches in a month. Samples of few complaints are presented in the exhibit no. 1 and other complaints were also on similar lines.

Based on the information, answer the following questions

    1. Is there something wrong with the ASM customer philosophy? If so, why?

    2. Discuss some pre transaction and post transaction services that may be of particular importance to ASM customers.

    3. List down the important steps you would follow to tackle the above situation and discuss the probable outcome.

    4. Using service quality gap model, identify the service quality gaps and suggest methods for improvement.

    5. Prepare a detailed plan for designing and delivering of a two-day training programme for

      a. Sales and Service staff

      b. Management of ASM

Exhibit: 1

Customer Complaints

I purchased a hand blender from ASM, which was an expensive one and was assured by the sales personnel that this is the best among al. however, within a week, the blender was damaged. I called the call centre and lodged a complaint. I was assured that someone will come from the company. After two days, I received a call from the company to inform that they don't give support service for this product. I went to ASM shop and asked for solution. They asked me to leave the blender and they will get it repaired. Since then, I am trying to contact them on phone, but no response. I must have contacted them at least 10 times in the last two weeks. Hope I get my blender back. Once I had a bitter experience with a siemens portable food processor. I brought it home and figured that one critical part (the food pusher) was missing I had to make a second trip but, when I insisted, they replaced the whole set without question. I would advice everyone to check all the components in the store itself, there is such a rush that some sales staff are sometimes careless.

One mistake I think they make is their zeal to over market themselves which get them into trouble. For instance, as a store, they cannot offer after sales service that is offered by the respective manufacturers and the people who answer the phones should be trained to direct the customer the right phone no. I also find it amusing that across ASM outlets, no matter what product you enquire, sales people will tell you, "It is excellent, I have this brand in my home, and it has never given me a problem". I have heard this line from three different sales people. I think they should change their selling pitches once in a while! My family bought goods worth Rs. 40,000/- last year from ASM stores. Some of the stuff needed delivery and when the delivery came, a second hand piece was sent. On complaint, the piece was promptly replaced by another second hand piece and it continued for four times. Today, after all these years being nave as we are, we went back to ASM and bought an electronic item worth Rs. 1,400/-. As expected, what was explained by the customer service representative the product did not match the description in performance. On taking it back to ASM for exchange for a superior and more expensive product, they explained that they have no exchange policy however bad the product's performance be.

To sell an item, the store is allowed to lie as much as they want. The manager does not have the audacity to come and talk to the customers directly and was shameless enough to send the hapless sales person to do the dirty work. I bought front loading washing machine from this shop and expected a trouble free working machine. Instead of this, NGM has home delivered a product dented in transit which looks like thrown out of a second floor apartment. ASM first promised replacement the very next day, free of charge. Then, after two days said that their technician will repair it. The technician came the next day and told that machine was irreparable. ASM refused replacement despite repeated requests during the first week itself, thereafter sales people telling one lie after the other. I am suffering a loss and mental harassment. One week has passed and no sign of replacement. This is my last request to you or else I have no other option left than to proceed to the consumer forum.


    a. What are issues related to the service delivery failure for which the company is answerable

    b. What according to you could be the reason for the failure.

    c. From the services angle, how can this issue be converted into a healthy one so that such things never occur in future?

Hari Sundar. G
School of Communication and Management Studies (SCMS)

Source: E-mail November 9, 2008


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