1
CHAPTER 3
Focusing on Customers
Teaching Notes
This chapter focuses on customer satisfaction. Until a few years ago, this was a topic that was
thought to be only a marketing activity and out of the area of responsibility of quality, human
resources, or production and operations managers. Things changed when the TQ movement got
underway. What was formerly reserved for a few specialists in consumer behavior within the
marketing research discipline became a topic of concern to quality professionals and managers at
every level. The focus on TQ has helped to change the former attitude. Students who are not
marketing majors need to be made aware of this important refocusing of management’s attention.
Key objectives should include:
• Raise students’ awareness of the concept that of the three determinants of profitability –
productivity, cost, and quality – the most significant factor in determining the long-run
success or failure of any organization is quality.
• Understand that creating satisfied and loyal customers is perhaps the most important
aspect for long-term competitive success.
• Define customer satisfaction as “the result of delivering a product or service that meets
customer requirements.” Customer engagement refers to customers’ investment in or
commitment to a brand and product offerings.
• Develop an appreciation for customer engagement, which refers to customers’ investment
in, or commitment to, a brand and product offerings. Characteristics of customer
engagement include customer retention and loyalty, customers’ willingness to make an
effort to do business with the organization, and customers’ willingness to actively
advocate for and recommend the brand and product offerings.
• Define the customer benefit package as the total package of products and services that a
business offers, and includes the physical product and its quality dimensions; pre-sale
support, such as ease of ordering; rapid, on-time, and accurate delivery; and post-sale
Focusing on Customers 2
• Learn that there are differences between consumers, who are end users of products and
services; external customers who are outside of organizations and fall between the
organization and the consumer, and who have distinct needs and expectations; and
internal customers who are people, departments, or processes that depend on others to
serve consumers and external customers.
• Define product quality dimensions including performance, features, reliability,
conformance, durability, serviceability, and aesthetics. Service quality dimensions are
reliability, assurance, tangibles, empathy, and responsiveness
• Know that customer requirements, expressed in the customer’s own terms, are called the
voice of the customer. Gathering the voice of the customer is accomplished by various
methods, or “listening posts,” including comment cards and formal surveys, focus
groups, direct customer contact, field intelligence, complaint analysis, and Internet and
social media monitoring. Affinity diagrams are helpful tools for classifying customer
requirements.
• Help students understand that the linkage of the VOC to internal processes is often
described by the gap model. Customers form perceptions (perceived quality) of the
quality of goods and services by comparing their expectations (expected quality) with
outcomes they receive (actual quality). Differences between these can result in
unexpected satisfaction dissatisfaction. Thus, careful attention must be paid to design
and production processes, as well as customer feedback.
• Gain an appreciation for using technology to enhance an organization’s ability to
leverage customer-related information and provide improved customer service.
Technology is a key enabler of customer relationship management (CRM) software,
• Learn how customer perceived value (CPV) can provide an alternative to traditional
satisfaction measurement, and measures how customers assess benefits – such as product
performance, ease of use, or time savings – against costs – such as purchase price,
ANSWERS TO QUALITY IN PRACTICE FEATURES
Harley-Davidson
1. How do various dimensions of quality introduced in this chapter align with the quality
characteristics that are important to Harley-Davidson and its customers?
Focusing on Customers 3
The dimensions of quality introduced in this chapter include product quality dimensions of
performance, features, reliability, conformance, durability, serviceability, and aesthetics. Service
quality dimensions are reliability, assurance, tangibles, empathy, and responsiveness. Harley-
Davidson’s quality characteristics that are important to its customers can be pretty well aligned
with these dimensions.
The company’s manufacturing strategy is designed to continuously improve product
quality and productivity, while reducing costs and increasing flexibility to respond to ongoing
changes in the marketplace. Flexible manufacturing processes and flexible supply chains,
combined with cost-competitive and flexible labor agreements, are the key enablers to respond to
customers in a cost-effective manner. These contribute substantially to performance, reliability,
conformance, and durability. Design quality can be seen in the features, serviceability, and
aesthetics provided for each of their customer segments:
Harley defines its customer segments for heavyweight (651+ cc) motorcycles as:
• Traditional (a basic motorcycle which usually features upright seating for one or two
passengers);
Harley-Davidson builds its service quality characteristics through its emphasis on
customer focus. To attract customers and achieve its goals, the company participates in
motorcycle rallies, major motorcycle consumer shows, racing activities, music festivals, mixed
martial arts activities and other special promotional and charitable events. In 2010, the company
2. Discuss how Harley-Davidson’s approaches help it to maintain a focus on its customers
and enhance customer satisfaction, loyalty, and engagement? You may want to research
and include information from recent annual reports.
Harley-Davidson uses multiple approaches to help it to maintain a focus on its customers and
enhance customer satisfaction, loyalty, and engagement. Harley-Davison provides a variety of
services to its independent dealers including service and business management training
Focusing on Customers 4
Harley’s independent dealers.
In addition to its dealer support and event sponsorship, mentioned above, Harley is
known for its well-established Harley Owners Groups (affectionately called HOG’s). In 1983
they established the Harley Owners Group® concept which quickly became the largest factory-
Unique Online Furniture, Inc.
1. How does Unique Online Furniture, Inc.’s key customer requirements compare with the
Key Customer-Focused Practices in Table 3.1?
Unique Online Furniture, Inc.’s key customer requirements compare, almost point-for-point,
with the Key Customer-Focused Practices.
Table 3.1 Key Customer-Focused Practices for Quality Management
• Identify the most important customer groups and markets, considering competitors
and other potential customers, and segment the customer base to better meet differing
needs.
• Understand both near-term and longer-term customer needs and expectations (the
“voice of the customer”) and employ systematic processes for listening and learning
from customers, potential customers, and customers of competitors to obtain
actionable information about products and customer support.
• Understand the linkages between the voice of the customer and design, production,
and delivery processes; and use voice-of-the-customer information to identify and
innovate product offerings and customer support processes to meet and exceed
customer requirements and expectations, to expand relationships, and to identify and
attract new customers and markets.
Unique On-Line Furniture’s – Key Customer-Focused Requirements
1. Affordability: Customers want unique items at affordable prices. Practice:
Understand both near-term and longer-term customer needs and expectations.
2. Variety: Customers in our market are looking for variety in home furnishing
products that they cannot necessarily find in their local brick and mortar stores. Practice:
Understand the linkages between the voice of the customer and design, production, and
delivery processes; and use voice-of-the-customer information to identify and innovate
Focusing on Customers 5
product offerings and customer support processes
3. Online purchase security: When purchasing large ticket items online, our
customers want to feel safe and secure during the transaction. Practice: Create an
organizational culture and support framework that allows customers to easily contact an
organization to conduct business, receive a consistently positive customer experience.
4. Guarantees or low risk: Customers want the risks of buying sight unseen
2. Can you suggest other ways to use the Client Experience Checklist (Figure 3.14) to gauge
customer satisfaction levels and/or enhance the customer’s positive experience with Unique
Online Furniture?
The Client Experience Checklist might be used to identify ways of gauging customer satisfaction
levels and/or enhance the customer’s positive experience. Specifically, any of the customer
touchpoints might potentially be used for this purpose. The most obvious ones are the “Confirm
Order with Client via Phone,” the “Mail Thank You Gift,” and the “E–mail Survey” steps. In
each of these, the client might be asked a few questions about their experience, so far, in the
order placement cycle, such as: Do you have any problems that need to be resolved? Would you
be willing to refer the company and/or its website to a friend or family member? Can the
customer service representative be of further assistance?
ANSWERS TO REVIEW QUESTIONS
1. What factors influence customer value and satisfaction?
The factors that influence customer value and satisfaction include an organization’s efforts
extending well beyond merely meeting specifications, to reducing defects and errors, and
resolving complaints. They also include designing new products that truly delight the customer
2. What specific issues of customer focus are addressed in the ISO 9000 framework?
Customer focus is a key requirement of ISO 9000. For example, in the Management
Responsibility section, one requirement is “Top management shall ensure that customer
requirements are determined and are met with the aim of enhancing customer satisfaction.” This
puts the responsibility for customer focus on senior leadership. In the Product Realization
Focusing on Customers 6
section, the standards require that the organization determine customer requirements, including
delivery and post-delivery activities, and any requirements not stated by the customer but
necessary for specified or intended use. In addition, the organization must establish procedures
for communicating with customers about product information and other inquiries, and for
obtaining feedback, including complaints. In the Measurement, Analysis, and Improvement
sections, the standards require that the organization monitor customer perceptions as to whether
the organization has met customer requirements; that is, customer satisfaction.
The focus for ISO 9000 and other models for performance excellence is on obtaining
actionable information from customers. Thus, an organization should be able to tie the
information to key business processes, and should be able to determine cost/revenue implications
3. Summarize the key customer focused practices for performance excellence. Which of
these are reflected in the City of Fort Collins and K&N Management?
Key customer-focused practices for performance excellence include identifying the most
important customer groups and market segments; understanding the voice of the customer
through effective listening and learning strategies; understanding the linkages between customer
needs and design/production/delivery processes; creating a customer-focused culture that
4. Explain the difference between satisfaction and loyalty. Why is loyalty more important?
Customer satisfaction occurs when products and services meet or exceed customer expectations.
Loyal customers are invested in the organization for the long term. Loyal customers spend more,
refer new clients, and are less costly to do business with. Poor quality products and services, on
5. What is customer engagement? How does it differ from satisfaction?
Focusing on Customers 7
Customer engagement refers to customers’ investment in, or commitment to, a brand and product
offerings. Characteristics of customer engagement include customer retention and loyalty,
customers’ willingness to make an effort to do business with the organization, and customers’
6. Describe the model used in computing the American Customer Satisfaction Index. How
might a business use the information from the ACSI database?
The American Customer Satisfaction Index is a national measure of customer satisfaction,
linking expectations, perceived quality, and perceived value to customer satisfaction, which in
turn is linked to customer loyalty and profitability. The econometric model used to produce
ACSI links customer satisfaction to its determinants: customer expectations, perceived quality,
and perceived value. Customer satisfaction, in turn, is linked to customer loyalty, which has an
impact on profitability. You may want to try to find an excellent article in Fortune magazine
relating the history and development of the ACSI and its impact [Wilton Woods. “After All
You’ve Done for Your Customers, Why are They Still Not Happy?” Fortune, December 11,
1995, 178-182]. This was the first cross-industry benchmark in the United States to measure
customer satisfaction. In January 1998 it was announced that the Arthur Andersen consulting
7. Explain the difference between consumers, internal customers, and external customers.
A company can expect to encounter external customers or consumers, outside of the company.
Amazon.com may sell copies of a textbook to consumers (students). The publisher will supply
copies of the text to their customer, Amazon, which is not the consumer. At the process level,
internal customers or divisions within the company who receive products or services from
suppliers within the company, must be recognized and satisfied or delighted. Thus, editors, who
prepare the manuscript for production, are internal customers of the authors, who write the
Focusing on Customers 8
where each employee receives inputs from others and produces some output for individual
internal customers.
8. Explain the AT&T customer– supplier model. Why would it be an important component
in training new employees?
In AT&T’s customer-supplier model, your suppliers provide inputs into your process. The
9. Why is it important to segment customers? Describe some ways of defining customer
segments.
Customers should be segmented because of, and according to, their different requirements and
expectations. A company usually cannot satisfy all customers with the same products or
services. Customer segmentation might be based on geography, demographic factors, ways in
which products are used, volumes, or expected levels of service.
10. Explain the two classifications of quality dimensions for goods and services. Contrast
the similarities and differences between the two classifications for services.
There are two classification systems for quality dimensions, one each for goods and for services.
The dimensions of quality for goods was defined by Garvin as:
a) Performance: a product’s primary operating characteristics. Using an automobile as
an example, these would include such things as acceleration, braking distance,
steering, and handling.
b) Features: the “bells and whistles” of a product. A car may have power options, a
tape or CD deck, antilock brakes, and reclining seats.
c) Reliability: the probability of a product’s surviving over a specified period of time
under stated conditions of use. A car’s ability to start on cold days and frequency of
Focusing on Customers 9
The key dimensions of service quality include:
1. Reliability: the ability to provide what was promised, dependably and accurately.
Examples include customer service representatives responding in the promised time,
following customer instructions, providing error-free invoices and statements, and
making repairs correctly the first time.
2. Assurance: the knowledge and courtesy of employees, and their ability to convey
trust and confidence. Examples include the ability to answer questions, having the
capabilities to do the necessary work, monitoring credit card transactions to avoid
possible fraud, and being polite and pleasant during customer transactions.
3. Tangibles: the physical facilities and equipment, and the appearance of personnel.
Tangibles include attractive facilities, appropriately dressed employees, and well-
designed forms that are easy to read and interpret.
4. Empathy: the degree of caring and individual attention provided to customers. Some
examples might be the willingness to schedule deliveries at the customer’s
convenience, explaining technical jargon in layperson’s language, and recognizing
regular customers by name.
5. Responsiveness: the willingness to help customers and provide prompt service.
Examples include acting quickly to resolve problems, promptly crediting returned
merchandise, and rapidly replacing defective products.
11. What is the Kano model, and what are its implications for quality management?
Noriaki Kano, a Japanese professor, has suggested three classes of customer requirements:
▪ Dissatisfiers—Requirements that are expected in a product or service. If these
features are not present, the customer is dissatisfied.
▪ Satisfiers—Requirements that customers say they want, but secretly do not expect.
Fulfilling these requirements creates satisfaction.
▪ Exciters/delighters—New or innovative features that customers do not expect. The
presence of unexpected features leads to high perceptions of quality.
The focus, then, of quality management is to continually research and determine these
requirements and develop them to their fullest extent.
Focusing on Customers 10
12. What is the voice of the customer? List the major listening and learning approaches
used to gather voice of the customer information. What are the advantages and
disadvantages of each?
The voice of the customer is an expression of the product or service characteristics that are
considered important by customers. They are often expressed in layman’s terms and must be
translated into product specifications that can be used in design, manufacture, and delivery of the
product or service. The major listening and learning approaches to gather customer information
include:
• Comment cards and formal surveys—These are easy ways to solicit information on
customer satisfaction and perceptions of the importance of various quality
dimensions. However, only a small percentage of customers regularly respond to
such surveys.
• Focus groups—A focus group is a panel of individuals (customers or non-customers)
who answer questions about a company’s products and services as well as those of
competitors. Focus groups offer a substantial advantage by providing the direct voice
of the customer to an organization. A disadvantage of focus groups is their higher
cost of implementation compared to other approaches.
• Internet and Social Media Monitoring: The Internet and social media such as
Facebook offer organizations a fertile arena for finding out what consumers think of
their products. Internet users frequently seek advice from other users on strengths and
weaknesses of products, share experiences on service quality, or pose specific
problems they need to resolve. By monitoring the conversations on discussion groups
and blogs, for example, managers can obtain valuable insights on customer
perceptions and product or service quality problems. In open forums, customer
comments can often be translated into creative product improvements. In addition, the
Internet can be a good source of information about competitors’ products. The cost of
monitoring Internet conversations is minimal compared to the costs of other types of
Focusing on Customers 11
13. Describe how affinity diagrams are used to organize and work with customer-related
information.
Affinity diagrams (see Chapter 11 for additional details on the 7 Management Tools) are used to
organize customer requirements into logical categories. An affinity diagram allows teams to sift
through large volumes of information, and identify key quality issues and their elements.
14. Explain the gap model shown in Figure 3.5. What do expected quality, actual quality,
and perceived quality mean, and how do they relate with one another?
The gap model shown in Figure 3.5 can be used to explain the customer-driven quality cycle. It
involves the interaction between expected quality, actual quality and perceived quality. Expected
quality includes true customer needs and expectations, that is, what the customer assumes will be
received from the product. Actual quality is the outcome of the process and what is delivered to
the customer. Perceived quality is actual quality minus expected quality. If the amount of actual
15. What is a moment of truth, and how can this concept be used to improve quality?
A moment of truth is the moment when a customer comes in contact, either directly (i.e. face–to–
face, by telephone, online chat, etc.) or indirectly (i.e. by letter, fax, or e-mail), with an employee
16. What is the Zero Moment of Truth? How does it influence customer purchasing
decisions and, ultimately, satisfaction?
Google introduced the concept for the explaining the importance of the initial online experience,
called the Zero Moment of Truth. Research has shown that about 88% of shoppers engage in
online investigation and consult an average of 10 sources before purchasing. Thus, the Zero
Moment of Truth is critical in shaping customer perceptions and ultimately making a purchasing
decision.
In today’s digital world, every click is a moment of truth. Thus, many website designers
are trained to think about the design of a website from the customers’ eyes. When purchasing
Focusing on Customers 12
3. After purchasing the product, the customer starts to use it.
4. Finally, after some period of use, customers often provide formal (e.g. online ratings
and posts) or informal (word of mouth) comments.
17. Explain the importance of commitments to building customer relationships.
Accessibility and commitments are needed in order to build strong customer relationships.
Organizations that truly believe in the quality of their products make sincere commitments to
their customers. Effective commitments address the principal concerns of customers, are free
from conditions that might weaken customers’ trust and confidence, and are communicated
clearly and simply to customers. A customer commitment might guarantee that calls or e-mail
inquiries will be returned promptly, provide explicit guarantees and warranties, or give
extraordinary guarantees that promise exceptional, uncompromising quality and customer
satisfaction, and back that promise with a payout with few, if any, strings attached. For example,
18. Who are customer contact employees? Why are they critical to an organization?
Customer contact employees are the face of the company to customers. This group may include
any employee who comes in direct contact with customers, such as salespeople, repair
technicians, telephone operators, and receptionists. They are critical because, not only do they
take customer orders, field inquiries and complaints, and often deliver the product or service, but
19. Explain the role of training and empowerment of customer-contact employees in
achieving customer satisfaction.
Good customer relationship management depends on the quality of training of customer-contact
personnel. Many companies begin with the recruiting process, selecting those employees who
show the ability and desire to develop good customer relationships. Companies committed to
customer relationship management ensure that customer-contact employees understand the
Focusing on Customers 13
employees. Empowering employees allows them to make decisions on their own to satisfy
customers, who dislike being transferred to a seemingly endless number of employees to obtain
information or resolve a problem.
20. What are customer contact requirements? Provide some examples different from those
in the book.
Customer contact requirements are measurable performance levels or expectations that define
the quality of customer contact with representatives of an organization. These might include
technical requirements such as response time (answering the telephone within two rings), or
behavioral requirements (using a customer’s name whenever possible). Customer needs and
expectations form the basis of measurable contact requirements. They are important because
21. Why should a company make it easy for customers to complain? Describe the features
of an effective complaint management process.
Companies should make it easy for customers to complain both for short-run customer
satisfaction and for long-run process/product improvement reasons. By listening to, and
resolving complaints quickly, companies may retain dissatisfied customers. Furthermore it may
cut down the negative word-of-mouth advertising about the problem. Complaints also provide a
22. List the key factors that should be included in a good service recovery.
Service recovery is very important, according to recent research. Studies in the service
management literature suggest that customers who rated service quality highly also had the
highest expectations for service recovery. Loyal customers are most likely to lose loyalty when
23. Why are strategic partnerships and alliances useful to an organization?
Focusing on Customers 14
Strategic partnerships and alliances are useful to organizations because it permits them to look
outside their organization for assistance with non-critical support process, thus allowing more
time to focus on improving their own core competencies. In addition, the organization can often
obtain access to technology or distribution channels not available to them internally, share risks
in new investment and product development, improve products based on supplier capability, and
reduce costs through better communications.
24. How can customer relationship management (CRM) software help organizations
develop and improve a focus on customers?
CRM software is designed to help companies increase customer loyalty, target their most
profitable customers, and streamline customer communication processes. A typical CRM system
includes market segmentation and analysis, customer service and relationship building, effective
complaint resolution, cross-selling goods and services, order processing, and field service. CRM
helps firms gain and maintain competitive advantage by:
• Segmenting markets based on demographic and behavioral characteristics
• Tracking sales trends and advertising effectiveness by customer and market
segment
• Identifying which customers should be the focus of targeted marketing initiatives
with predicted high customer response rates
and how the Web site might be improved
25. Why should an organization measure customer satisfaction? Describe the key steps that
must be addressed in designing customer satisfaction surveys.
By measuring customer satisfaction, a company can learn how pleased or dissatisfied its
customers are with products or services. It can discover customer perceptions of how well the
business is doing in meeting customer needs, discover areas for improvement, and also track
trends to determine if changes actually result in improvements. Steps in designing effective
customer surveys include:
• Determine the purpose
• Address who should conduct the survey
• Define the sample frame
26. What types of questions should be included in customer satisfaction surveys?
Focusing on Customers 15
27. Explain the concept of importance-performance analysis and its benefit to an
organization.
Typically, only firms that are more customer-sensitive than most recognize the need to analyze
their customer satisfaction surveys to determine the relationship between importance and
performance (the FP&L Quality in Practice feature in the Instructor Reserve materials is an
28. Why do many customer satisfaction efforts fail?
Many customer satisfaction efforts fail due to poor measurement, useless questions, lack of
proper focus, no comparative data, inattention to potential and former customers, and confusing
satisfaction with loyalty.
29. How is the net promoter score measured? What insights does the score provide to
management?
Today, many firms use a metric called the net promoter score (NPS), which was developed by
(and is a registered trademark of) Fred Reichheld, Bain & Company, and Satmetrix. NPS is
claimed to correlate strongly with market and revenue growth. The metric is based on one
simple question, “What is the likelihood that you would recommend us?” evaluated on a scale
from 0 to 10. Scores of 9 or 10 are usually associated with loyal customers who will typically be
repeat customers (“promoters”); scores of 7 or 8 are associated with customers who are satisfied
but may switch to competitors (“passives”); and scores of 6 or below represent unhappy
customers who may spread negative comments (“detractors”). Promoters are less price-sensitive
and are more profitable, while detractors are more-price sensitive, defect at higher rates, and
consequently are less profitable. NPS is the difference in the percentage of promoters and
detractors.
30. What is customer perceived value, and how can an organization benefit from
measuring it?
Customer perceived value measures how customers assess benefits—such as product
performance, ease of use, or time savings—against costs, such as purchase price, installation cost
Focusing on Customers 16
potential buyers rather than just existing customers, is forward-looking rather than retrospective,
and examines choices relative to alternatives rather than relative to expectations. Typical
questions that are asked include “What benefits are important to you?” and “How well do you
ANSWERS TO DISCUSSION QUESTIONS
1. Can you describe a customer-focused organization similar to the City of Fort Collins or
K&N Management’s restaurants with which you have had personal experience? What
aspects of the organization impressed you the most?
Students can easily identify good examples (as well as those who are not very customer–
focused!) Instructors should expect them to tie their discussion to concepts in the chapter.
2. Thinking about organizations that you encounter in your daily life (your college,
bookstores, restaurants, and so on), identify examples of customer-focused practices from
Table 3.1 that are evident in these organizations.
Answers about examples of organizations known by students to exhibit customer-focused
practices will vary.
3. One national home improvement store trained employees to “make a customer, not a
sale.” For instance, if a customer tried to buy a small item such as a bolt that didn’t have a
barcode or one that was unreadable, employees would let the customer have it for free
rather than make the customer wait for a price check, and then write down the product on
a log sheet. How does such a philosophy support the themes of this chapter?
The philosophy of teaching employees to “make a customer, not a sale” can have many positive
benefits. It supports the themes of this chapter in terms of service quality factors of assurance,
4. Are you loyal to any particular businesses? Why or why not?
Answers will vary depending on which businesses students claim loyalty to. Customer loyalty is
extremely important to long-term business success. Until faced with a crisis, firms may fail to
recognize the importance of customers for various reasons — long running success in the
5. A person who runs an auto repair shop related that he routinely washes cars or
Focusing on Customers 17
changes the oil for his best customers at no charge. What are the benefits of such a
policy?
The auto repair shop owner who routinely washes cars or changes the oil for his or her best
customers at no charge can undoubtedly see multiple benefits of his policy. Similar to
6. Many organizations, such as banks, offer significant incentives to attract new customers,
such as $150 to open a new checking account. However, existing customers rarely receive
incentives to stay. What do you think of such practices? What are the implications—pro or
con—of them?
Student opinions about organizations, such as banks, which offer significant incentives to attract
new customers, but do not offer them to existing customers may vary. The implications, and
7. A service representative of a major U.S. airline told a customer about an internal memo
that had been circulated called “No Waivers, No Favors,” which promises significant and
negative consequences to any employee giving a customer special treatment outside of the
airline’ s strict policies. As the employee noted, “Now, nobody is doing anything until we
find out what happens to us if we are a little lenient about enforcing a rule. People are
scared.” Why do you think that management adopted this policy? What implications will
it probably have for customers?
The “No Waivers, No Favors,” approach was probably instituted by management as a result of
losing revenues and profits, and possibly because of employee abuses of the system. It is the
unbending, bureaucratic approach that generally causes an organization to experience a
8. Construct a list of at least 10 different names for a “customer,” for example, buyer,
client, and so on.
This list of names for “customer” will vary depending on the experience and imagination of the
student. Some might include: patient, student, plaintiff, taxpayer, patron, applicant, subject,
Focusing on Customers 18
9. Think about the “supply chain” for filling a doctor’s prescription. Describe the different
types of customers involved in the process.
The chain of customers for a prescription may include the patient, the pharmacist, the drugstore
chain, a distributor, the manufacturer, and the raw materials suppliers and processors. In the case
10. Recall the AT&T customer–supplier model in Figure 3.2. For each of the following
departments in a typical company, discuss who are their internal or external customers and
suppliers.
Using the AT&T customer–supplier model in Figure 3.2, internal or external customers and
suppliers may be:
a. Operations – suppliers may include engineering, purchasing, outside venders, scheduling;
customers may include the warehouse/shipping
b. Information Systems – suppliers may include accounting, purchasing, operations, quality
control; customers may also include all of the above. This depends on whether IS is designing
systems for the organization’s use, or running reports and analyses using input data supplied by
their clients
11. How might a college or university segment its customers? What specific needs might
each of these customer groups have?
The question of “who is a customer?” must be addressed in order to determine the proper
categories for segmentation. The publics with which a college or university interacts are
important input for this discussion. They include students, parents, employers, faculty,
administrators, the state and federal government, public and private organizations, and the
general public. They would have various needs that often overlap, but many are unique. For
Focusing on Customers 19
12. What expectations might a typical e-commerce customer have for a website? How
might this differ from a brick-and-mortar store?
Typical e-commerce customer may have different expectations for a website versus a brick-and-
mortar store. For example, products chosen from successful websites are chosen based on
customer reviews, prompt delivery, and competitive prices, among other characteristics. In
13. The five dimensions of service quality are important to such retail stores as Walmart
and Target. Assuming that these represent key customer requirements, what things might
these companies do in designing their stores and operations to ensure that they meet these
requirements?
Walmart and Target have a similar customer base. Therefore, they might do similar things in
designing their stores and operations to ensure that they meet these requirements. Some of these
might include:
1. Increasing Reliability: training their customer service representatives responding in the
promised time, following customer instructions, providing error-free invoices and statements.
2. Increasing Assurance: Training employees to answer questions knowledgeably, ensuring that
the employees have the tools and capabilities to do the necessary work, ensuring that they
monitor credit card transactions to avoid possible fraud, and being polite and pleasant during
customer transactions.
14. Thinking of the Kano model, should organizations pay the most attention to
dissatisfiers, satisfiers, or exciters/delighters? Defend your choice with appropriate
examples. Would this depend on the type of industry or environment in which an
organization competes?
When students think of the Kano model, there will be different opinions as to which one
organizations should pay the most attention: dissatisfiers, satisfiers, or exciters/delighters.
Concentrating on dissatisfiers is essentially defensive for products and services. Simply avoiding
Focusing on Customers 20
15. In the context of a fast-food restaurant, make a list of different characteristics that
might describe “freshness.” Classify them by means of an affinity diagram. What does
your response mean for measuring satisfaction of this attribute?
Freshness might be classified by considering the appearance, smell, feel, taste, and texture of
items. This could be expanded on in an affinity diagram. To measure satisfaction, a questionnaire
might be developed, or a focus group might be convened.
16. How might your school use the gap model in Figure 3.5?
Colleges and universities might use the gap model in Figure 3.5, or customer-driven quality
cycle, in improving processes such as online registration. Customer needs and expectations
might include ease of entry of data, easy correction of errors, ability to drop/add a course before
17. Prepare a list of moments of truth that you encounter during a typical quarter or
semester at your college or university.
The answers will vary here, depending on students’ perspectives. Some examples of moments of