Table of content

Case summary 3
Quality at book stores 4
Quality problems of the stores 5
Parato Analysis 6
Book stores costs of poor quality 8
Reasons for doing the Survey the way it was done 9
Programs to improve quality 11
Obstacles to hinder the changes at the book stores and quality improvement 13
Benefits can be obtained from quality improvement programs 14

Case summary

Tech is a major state university which owns 2 book stores one on campus and one off campus at a nearby mall. Both stores sell school supplies, text books, school apparels and gifts and both the stores have customers inside as well as outside the university. With the aim of providing employment opportunities to the university students there is a long standing policy of hiring tech students as part time employees.
Although sales and profits of off campus store have been satisfactory and steady over past years there has been some incidents which can affect the quality of the service they provide. Therefore the executive director, Mr. Watson has taken some actions in finding the problems and the reasons behind.
Survey results have shown that there are some issues regarding the quality of the service of off campus book store and following are survey findings, critical evaluation and some recommendations for improvements…

Quality at book stores
Book stores fall under the category of retailers as they buy books and other stationary materials and sell them to end customers. When considering retail businesses, service quality is very important and has a huge effect towards the performance and survival of retailers.
Service quality of a book store can be defined using the dimensions of SERVQUAL model,
• Tangibles: This refers to the appearance of physical facilities, equipments, personnel, and communication materials. In a book store,
 Appearance of the store
 Properly categorized books and other stationary materials
 Facilities provide to customers such as parking
 Pleasant appearance of store workers

• Reliability: Ability to perform the promised service dependably and accurately.
 Provide products that are advertised as they are in the stores
 Update the web site according to the accurate information
 Provide wide variety of books. Specially make available reference books of university course modules.

• Responsiveness: Willingness to help customers and provide prompt service.
 Being friendly with customers
 Politeness.
 Response quickly to the requirements of customers
 Save customers’ time.
 Deliver online purchases on time.

• Assurance: Knowledge and courtesy of employees and their ability to inspire trust and confidence.
 Employees should have a proper knowledge and understanding about the products on the shelves and stores.
 Replace the shelves accordingly
 Employees having technical knowledge to deal with computer system.
 Knowledge of company policies.

• Empathy: Caring, individualized attention the store provides to its customers.
 Provide additional information if customer needs
Quality problems of the stores
Mr. Watson has identified several quality related problems by hearing recent incidents, thorough a customer survey and ghost shoppers.
Those problems are as follows;
1. Lack of assurance
• Student employees were not knowledgeable about what products are available, where they were located in the store.
• Lack of technical skills of student employees (about computer systems)
• Student employees are not familiar with store policies.

2. Tangibles
• Poor response from customers to the web site. (according to the survey)
• No parking facilities to the in campus store making it inconvenience for non campus visitors.
• Some student employees were under influence of drugs.
• Appeared lackadaisical and bored

3. Responsiveness
• Cash registers were unmanned sometimes making customers to wait for a long time.
• Student employees had been rude to customers and got defensive.
• Employees were not courteous and friendly. (according to the survey)

4. Empathy
• Employees not providing additional information when customers need.

Parato Analysis
Campus Store

Off-campus Store

Above Parato charts illustrate the dissatisfaction causes of both students and nonstudents relating to off-campus store. Some major points can be identified as follows.
 Both have the common issue with visiting stores’ website as same as with campus stores’ customers.
 Both students (15%) and nonstudents (13%) are dissatisfied regarding the overall service quality.
 Dissatisfaction with employee courtesy level, unfriendliness, knowledge and level of helping is higher than campus store. 25% of total dissatisfaction of student customers, and 30% of that of nonstudent customers are related to these issues.
 Nonstudent customers are significantly dissatisfied with waiting for service. Discrimination of service against them can be seen, because a less percentage of student customers face this issue.
 Similar to campus store scenario, students give more priority to and are dissatisfied with price, where as nonstudents prefer quality of service and highly dissatisfied with issues relating to that.

Book stores costs of poor quality As mentioned above Tech book stores currently deal with several service quality issues. These issues relate with costs to the stores. Those costs can be identified as costs of poor quality, costs that have to be incurred because of lack of service quality dimensions within the stores.
Cost of poor quality normally subdivided into 2 categories as
1) Internal failure cost
2) External failure cost
Out of these 2 categories Tech stores mainly deal with external failure costs as follows;
 Customer complaint costs (cost of conducting a survey)
 Reduce number of returned customers.
 Reduce number of potential customers.
 Reduction in sales and profit.
 Damages to the reputation of the store.

Reasons for doing the Survey the way it was done
Mr. Watson has conducted the customer survey at both stores. The way he conducted it, is as this.
He kept some employees at the exits of stores. As customers leave the store, these employees ask them to respond to a brief questionnaire.
There are two major features that can be identified in the way of conducting the survey, which may have done purposely to get some benefits. Those two elements and what we think his expectation was are given below.
1. Survey is done at the exit of the store itself.
Reason for this may be the need of Mr Watson to get near experience of customers. Gathering information as soon as customer leave the store makes customer reveal what he or she honestly think about service quality, because it’s a near experience to them. Therefore they express their true feelings according to the satisfaction level they have about the service of the store.
For instance, if a customer had a quarrel with an employee, he is in anger when he leaves the place. So when responding, he will write all bad experiences he got at that time. If he is asked to fill it later, this anger may have gone by that time, so he may not write them in the feedback sheet.
2. Has used questionnaires
He has used questionnaires to collect customer feedback rather than oral approach. There may be several reasons for this.
Basically this may be used to give more freedom to customers when giving their feedback. Sometimes they may hesitate to tell everything to face of employees. But this gave them freedom to write whatever comes to their mind.
Also there is a significant limitation when using oral approach. That is sometimes data collectors forget to ask all questions. But questionnaire approach addresses this issue effectively as they are in structured form.
Another reason may be that, large amounts of information could be collected from a large number of student and nonstudent customers in a short period of time and in a relatively cost effective way. This survey was conducted only during two weeks.
As questionnaires were used to collect customer feedback, there was no need to carry out the survey by Mr. Watson himself. He could use other employees to collect data with limited affect to its validity and reliability.
No additional effort, time or cost is needed to record data obtained in the survey because customer feedback notes are already there. As written documents are available, analysis and review procedure may also be easier than oral approach.

Other than the Parato charts, he can use various tools to analyze quality issues of the stores. Some of them are as follows.
I. Root cause analysis/ Fish bone chart
This is a tool invented by Dr. Kaoru Ishikawa which can be used to identify the major and root causes of faults or problems, in this case low service quality.
This can be used to identify workers’ personal issues and stores’ process issues separately with regard to low service quality. Based on the findings, root causes that drive major causes can be identified and treated, so that major causes of the issue will be eliminated.

II. Scatter diagrams
This can be used to identify whether there is a relationship between identified causes and customer dissatisfaction. This is a valuable tool to find out the strength of the relationship and positivity or negativity of it.

III. Flow charts
This method can be used by the stores to graphically represent stages of its process from customer arrival to the store, to the time they exit. This can be used to identify bottlenecks in the process. There are some complaints about long queues. This may be the best tool to identify its causes.
IV. Process control charts
This also can be used to analyze variations of queue length. A sample of customers can be taken and record their serving and checking out times. Based on that, average queue length can be calculated. After that, using process control charts, variations of waiting time can be analyzed. This can be used to analyze whether there is a variation of queue times between student and nonstudent customers.

Programs to improve quality

1. Conducting training programs
- Research findings shows that student employers were sometimes not that familiar with store policies, operating computer systems, availability of products and the locations of products in the book stores. This shows the necessity for conducting a training program for student employees who are working at the store to give a perfect knowledge about books, policies, the availability of products and technical knowledge about computer system and website. They can train employees on how to treat customers as well. Getting support from a well known training institute will assist te-hem to overcome this purpose.

2. Proper recruitment process.
- There is a recently occurred incident regarding a student employee’s unethical behavior. In order to overcome this directors can improve their recruitment process by investigating the background of employees (character certificate from university, reference from lecturers)

3. Play calm and sensitive background music in the store.
- Customers will prefer to come to the store & it will be a pleasant experience for the customers as well as for the employees to relax their mind. Employees will love to work if they can select suitable background music to play according to psychology.

4. Introduce a performance based pay and other motivational programs.
- There is a lack of motivation among student employees in doing works in store. Management can introduce a performance base pay to encourage them on works. They can appoint a person to monitor the behavior of employees and how they treat customers, etc. Keep records of each and every employees and then pay based on their behavior.

5. Educate employees on cost of quality.
- Improve the awareness of employees about the importance of cost of quality such as appraisal cost, prevention cost, Internal & external failure costs.

6. Promote the web site especially among non students.
- Survey result shows that the website of the store is not popular among non students. Therefore they must display the web address on banners inside the book store.

7. Customer survey for online customers and redesign the website according to their requirements.
- While promoting the website book store need to identify whether customers prefer online purchases, what are the weaknesses of the site, what changes customers expect etc. For that Mr. Watson can follow these techniques;

 Contact forms
Stores can use contact forms on their website to facilitate an easy exchange of ideas between customers who visit it and do online purchases and your organization. When developing these forms they should not guide the feedback process by allowing customers to answer only a few pre-set questions. They have to keep the feedback as free flowing as possible.
 Conduct an Online Survey
If the stores have email addresses of customers, conducting an online survey can be a great way to get range of different feedback in a short amount of time.
 Social networks
These stores’ one of the target market is students and they hold the majority portion of target market. Nowadays most of the young people are using social networks to communicate and Facebook, Twitter or YouTube are more popular among young crowd. Therefore Mr. Watson can use these networks to collect feedbacks. Interacting with target market and mining information from social networks is easy to do. But they have to make customers aware of that, using leaflets, posters etc.
E.g. Creating a Facebook page and invite customers to join the page to express their suggestions and complaints. 8. Focus on recruiting outside workers.
- According to the survey results we can see that student customers’ feedbacks are better in most criteria on survey than non student customers. This may be due to not expressing their real experience because the employees who work on the store may be their colleagues or employees may treat better to students more than non students. Therefore the information obtained from students is not reliable. Non students have given bad responses on most criteria in survey where students have given positive responses. Therefore recruiting outside workers on permanent basis as store workers and keeping other positions on student employees will be effective for the book store. Then they can get real feedback about employees from customers and it will be easy for the management to implement quality improvement programs with outside workers.
Obstacles to hinder the changes at the book stores and quality improvement

1. Resistance to change their manners towards customers
- This may be because most employees are students and there may be a conflict between students and non students. So that the employees don’t like to treat well to non student customers.

2. Resistance of students against hiring outside workers.
- Hiring Tech students as part time workers has been a long standing university policy. Therefore if they decide to change the policy there will be a huge resistance student of the university.

3. Resistance on technical training.
- There may be a resistance on technical training about computer systems as the students get used to work in traditional way.

4. Cost of training and recruiting staff.
- There will be a huge cost on training and recruiting staff from outside.

5. Changing university policy in recruiting outside workers is a major obstacle.
- They have to change a university policy if they wish to recruit outside people. This will be a major obstacle and a challenge to management of the book stores.

Benefits can be obtained from quality improvement programs

1. Reduce employee turnover.

2. Reduce external failure costs by having long term customer relationships.

3. Increase repetitive customers and customer loyalty.

4. Increase reputation as a quality service provider.