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Questions and Answers
What is customer value defined as?
What is customer value defined as?
What are the two factors contributing to the growing importance of customer service as a competitive weapon?
What are the two factors contributing to the growing importance of customer service as a competitive weapon?
What is marketing defined as?
What is marketing defined as?
Why is 'total cost of ownership' used instead of 'price' in defining customer value?
Why is 'total cost of ownership' used instead of 'price' in defining customer value?
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What is the formula to calculate customer lifetime value?
What is the formula to calculate customer lifetime value?
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What is the focus of marketing efforts, according to the text?
What is the focus of marketing efforts, according to the text?
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What is the challenge in designing supply chains mentioned in the text?
What is the challenge in designing supply chains mentioned in the text?
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What is the key to Zara's success, as per the text?
What is the key to Zara's success, as per the text?
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How is customer service described in the text?
How is customer service described in the text?
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What is the purpose of service segmentation, based on the text?
What is the purpose of service segmentation, based on the text?
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What is essential to understand the service needs and preferences of customers, according to the text?
What is essential to understand the service needs and preferences of customers, according to the text?
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How are ranking or rating scales used in the context of customer service components?
How are ranking or rating scales used in the context of customer service components?
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What do customers often have to trade off when making purchasing decisions, according to the text?
What do customers often have to trade off when making purchasing decisions, according to the text?
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What did Rolls-Royce develop to ensure performance guarantee for its customers?
What did Rolls-Royce develop to ensure performance guarantee for its customers?
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What is the potential of existing customers, as mentioned in the text?
What is the potential of existing customers, as mentioned in the text?
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What were traditional supply chains designed to optimize?
What were traditional supply chains designed to optimize?
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What does the 'iceberg' effect of total costs of ownership reveal?
What does the 'iceberg' effect of total costs of ownership reveal?
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How is competitive advantage achieved in terms of customer value?
How is competitive advantage achieved in terms of customer value?
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What are the elements through which logistics management uniquely influences customer value ratio?
What are the elements through which logistics management uniquely influences customer value ratio?
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What has earned Caterpillar a world-class reputation?
What has earned Caterpillar a world-class reputation?
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What are the essential elements provided by customer service for businesses?
What are the essential elements provided by customer service for businesses?
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What does the multivariate nature of customer service require?
What does the multivariate nature of customer service require?
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What percentage of items do stock-outs occur on in supermarkets, leading to customer dissatisfaction and lost sales?
What percentage of items do stock-outs occur on in supermarkets, leading to customer dissatisfaction and lost sales?
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What do just-in-time strategies in industrial markets demand from suppliers?
What do just-in-time strategies in industrial markets demand from suppliers?
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What is essential for becoming a preferred supplier in any industry?
What is essential for becoming a preferred supplier in any industry?
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What enhances the impact of a strong consumer and customer franchise?
What enhances the impact of a strong consumer and customer franchise?
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What is the relationship between core product, customer service, and logistics?
What is the relationship between core product, customer service, and logistics?
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What do 'Servitisation' strategies focus on?
What do 'Servitisation' strategies focus on?
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Which quadrant of products should be regularly reviewed for potential deletion from the range?
Which quadrant of products should be regularly reviewed for potential deletion from the range?
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According to the 80/20 rule, what percentage of customer/product transactions contribute to 64% of total profit?
According to the 80/20 rule, what percentage of customer/product transactions contribute to 64% of total profit?
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What should be the focus of customer service standards according to the text?
What should be the focus of customer service standards according to the text?
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Which key areas are mentioned for setting customer service standards?
Which key areas are mentioned for setting customer service standards?
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What is the implication of the 80/20 rule for both products and customers?
What is the implication of the 80/20 rule for both products and customers?
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Where should Quadrant 4 products be managed according to the text?
Where should Quadrant 4 products be managed according to the text?
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What is the primary need for Quadrant 2 products according to the text?
What is the primary need for Quadrant 2 products according to the text?
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What is the distribution of product service levels according to the text?
What is the distribution of product service levels according to the text?
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What is necessary for defining customer-driven service standards according to the text?
What is necessary for defining customer-driven service standards according to the text?
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What rule applies to both products and customers, emphasizing the importance of key accounts and products?
What rule applies to both products and customers, emphasizing the importance of key accounts and products?
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What percentage of total profit do 4% of customer/product transactions contribute to according to the 80/20 rule?
What percentage of total profit do 4% of customer/product transactions contribute to according to the 80/20 rule?
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What is the primary implication of the 80/20 rule for customer/product transactions?
What is the primary implication of the 80/20 rule for customer/product transactions?
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Study Notes
Managing Product Service Levels and Setting Customer Service Standards
- The distribution of product service levels can vary between businesses and markets
- A matrix in Figure 2.12 combines profit contribution and individual product demand
- Quadrant 1 products require cost reductions due to low profit contribution and high demand
- Quadrant 2 products need high availability and should be held close to the customer
- Products in Quadrant 3 should be regularly reviewed for potential deletion from the range
- Quadrant 4 products, although highly profitable, should be managed centrally to reduce inventory investment
- The 80/20 rule applies to both products and customers, emphasizing the importance of key accounts and products
- The 80/20 rule implies that 4% of customer/product transactions contribute to 64% of total profit
- Customer service standards should aim for a complete match between customer expectations and what the supplier provides
- Key areas for setting customer service standards include order cycle time, stock availability, and delivery reliability
- Standards for technical support and order status information are also essential for effective customer service
- Customer research and competitive benchmarking studies are necessary for defining customer-driven service standards
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Description
Test your knowledge on managing product service levels and setting customer service standards with this quiz. Explore topics such as the 80/20 rule, product demand matrix, customer expectations, and key areas for setting service standards.