Customer service at Tesco PLC

Introduction and Justification of Research subject

As the numbers of customers and their relative spending are increasing by passing of time the difficulty of product differentiation and services exist, the concentration in service quality continues to increase as basis for the competitive advantage. Now a day’s one of the most important thing which the company puts into consideration is customer service, which has become the main aim of market stratagem, business strategy of an organization to compete in the marketplace, and ever more recognised as the main strategic ethics of company in both producing and service industry as a technique to improve customer/client satisfaction and faithfulness (Mudie and Pirrie, 2006). In earlier days the consumers used to trust the nearby shop or friendly grocer in monetary terms, product and also the interest in their personal well being. The markets have changed, now the today’s market is highly competitive, where you can find the competitors a few minutes of walking from one to another, if the organization doesn’t fulfil the need the customers will move to another store (Codrington 2002). If properly applied customer service can be used by the company as a competitive weapon. There is a decline of customer satisfaction with the customer service offered in the retail industry over the period of 1996 and 2001 (The American Customer Satisfaction Index: University of Michigan).

Evaluating service quality is very important to the marketers because service quality and the outcome level of satisfaction will help in determining the probability of repurchase which will ultimately affect bottom-line measures of business success (Iacobucci et at, 1994). Customer services have responsibility for making sure that the company’s customers/clients receive satisfactory service with their queries and worries (Bureau of Labor Statistics, 2008). Further bureau give explanation that the customer service person is in charge for handling the queries of the customers with regard to product and services and solve the complaint and concern. In some of the organization the secondary objective of the customer service people is a sale by giving advice after spending time with the customers for a purchase of product or service.

The major of the customer service is about satisfying the customer. A service is considered to be appropriate if it is able to fulfil the need or want or expectation of the customers whether the customer is one person or an organization. Peter (2008) let us know that the around 70 per cent of customers walks away or are planning to change, the reason is not price or manufactured goods concern but due to the dislike of the human side from the customer service people. One research conducted by Forum Corporation concludes that 45 per cent of people went to the competitors due the poor attention towards them.

Customer service people pay a major role in retail, distribution and franchising because in such organization they are producing the goods and also selling the different producer goods to the consumers and these products are accessible in every shop. So the difference they can create is to customer happy by providing the superior customer service. Dell founder said that the customers are interested in businesses who wish to help them with the things they needed for which they are ready to pay for it, above all they also want someone who cares when something is going wrong.

Brief History of Tesco

Tesco is renowned to be UK’s leading supermarket which was founded by Jack Cohen, leading in UK’s retail sector with both worldwide sales and UK’s market share. Tesco has 2306 shops around the globe with the presence in 13 countries with turnover of £54300 million with profit of £3090 million. It market share is 30.6% as on April 2009 (Source: TNS). Tesco mainly was catering in food but later it expanded its market in electronics, finance products, cloths, internet and mobile as well. Tesco main strategy is divided in four main parts i.e. UK business, non-food business, retail services and online presence (Tesco.com). Tesco’s triumph as the company explains is due to an excellent Operating Strategy and Management team.

Tesco can be said a whole mall in which you can find everything in one store. Tesco is now not limited to grocery only, but customers can find laptops, mobiles, books, games, finance product such as credit card, savings, house loan, personal loans, CD’s, flowers, gardening, insurance, internet service etc. For different market segment Tesco has stores such as Tesco Express, Tesco Metro, Tesco Extra, Tesco Homeplus etc.

1. About the Retail Industry

The UK’s retail sector is employing more than 3 million people (data collected March 2008), which is 11% of the total United Kingdom employees. The UK’s retail industry generates a Gross Domestic Product (GDP) of 8%. The sales figure of UK retail sector was around £265 billion in 2007, which is more than the combined economies of Portugal and Denmark. The retail sector and its jobs highly depend on the consumers taste and preferences.

1.2.2. Customer Services Operation

Tesco provides customer service through its retail shops, telephonic and through internet as below:-

Retail shops

Telephone 0845 600 4411, 0845 722 5533

Website www.tesco.com

By Post Tesco Customer Service, PO Box 73, Baird Avenue, Dryburgh Industrial Estate, Dundee, DD1 9NF

1.2.3. Function of Customer Service

The function of customer service executive is giving information, advice on all product and services, also serving the customers, handling complaints and solving customer queries.

The values of Tesco are as following (Tesco, 2008)

Tesco main aim is to create value for money for the customer in order to get their lifetime commitment towards them.

Tesco Values:-

No-one tries harder for customers:

Be aware of what customer wants.

Fulfil customers’ needs.

Take responsibility of community

Treat people as we like to be treated:

Work in team

Respect everybody

Always be polite and use polite words and say thank you

Share experience and knowledge

Statement of Issue

Tesco main products and services include foods, cloths, electronics, finance product, internet service and mobile. Tesco is operating in very competitive environment where it can find its competitors next door may be local shop or other retail chain like Asda, Sainsbury’s, Morrison, Aldi’s, Somerfield, Waitrose, Iceland etc. So the customer expectation are high in terms of customer service they receive from the retail industry, this situation forces Tesco to have excellent customer service. In past 12 months Tesco market share dropped from 31.4% to 30.6%. In spite of having a very good strategy of customer service there is a hard evidence of good customer service at Tesco. A huge number of customers have made complaint regarding the product or services offered at the customer service at Tesco though Guardian (2008), The Scream (2008), Dooyoo (2008), Click to complaint (2007) is reported that they are not happy with the customer services at Tesco.

The situation compel Tesco to think about to conduct an evaluation of customer service to find out the key reasons behind this problem. The problem may be with the customer service people or may be with service delivery process or may be in the customer service strategy. Better the customer service will increase customer retention, increasing market share and getting a competitive advantage over the competitors.

Research Objectives

To find out how customer perceive customer service at Tesco.

To find out the causes of customer service problems at Tesco.

To understand customer service by reviewing the literature of customer service

marketing and by relating information into research project.

To find the measures used by Tesco for checking customer service levels and finds

other technique for measuring customer service.

To find out the quality of customer service resulting into customer satisfaction.

Research Questions

How customers perceive customer service at Tesco?

What are the causes for the customer service failures at Tesco?

What is customer service and why it is important?

How do Tesco measure customer service levels and are their techniques that can be employed to do so?

Which quality of customer services ensures customer satisfaction?

Benefits of Dissertation Project

The research will help the researcher to complete the part necessity to gain the M.B.A. award.

The research will help Tesco to develop a new strategy in customer service in glow of these research findings.

The research will help the academic to put a light on the theoretical applicability of the theories in the real business context.

Dissertation Structure