Case Study †Mandalay Shweyi Co., Ltd.

I wish to express my sincere appreciation to U Aye Kyaw, Managing Director – Cum Principal of Myanmar Human Resources Co., Ltd. (MHR). I would like to express my heartfelt thanks and deepest gratitude to my course instructors, Dr. Ohnmar Myint for providing invaluable guidance, encouragement and supervision throughout the process of this assignment. I am also deeply thankful to Mandalay Shweyi Company Limited for the kind permission to study and analyze their operations. I also would like to express my special thanks to ABE for the opportunity to study for the Post Graduate Diploma through which I have gained a thorough understands of business concepts, idea and knowledge. Finally, I would like to thank my parents for their love and support throughout my life. I would also like to thank all my friends for their help in the task of developing this assignment.Executive SummaryThis assignment focuses â€Å"A Research on Improving Customer Satisfaction and Retention† of Man dalay Shweyi Co., Ltd which is a major manufacturer of alcohol industry and also a nationwide foods & beverages marketer in Myanmar. Customer satisfaction may be identified as external and internal customer satisfaction of an organisation.The main objectives of this study were focused on external customer satisfaction, to explore the main influences of customer satisfaction and to determine their relationships with customer satisfaction. This paper also intends to present the research methods reflection of customer satisfaction lead to maximize customer satisfaction benefits and minimize the customer dissatisfaction which were caused by customer service and product quality factors of Herbal Tea Product from Mandalay Shweyi Co., Ltd.Personal StatementI am a candidate of Postgraduate Diploma in Business Management (ABE). I have been trying to complete post-graduate diploma in business management as a bridge to further study for MBA because my aim is to manage either my own business or to be able to successfully manage other businesses. This assignment is requirement for â€Å"Research Methods and their Applications to Marketing† course.Firstly I learnt the business operations and activities of Mandalay Shweyi by interviewing, observation, surveying and studying documents. I learned of the vision, mission, business strategies and challenges by interviewing the management team and identified business practice and activities through dialogs with technicians and staff. By preparing this assignment, I can apply the marketing research concepts and marketing concepts which are covered in ABE courses.This paper displays â€Å"A Research on Improving Customer Satisfaction and Retention† profile of Mandalay Shweyi Company. I have tried my best not only reflection on the subjects and experiences but also to meet the assignment goals and constraints. I hereby declare that this assignment is a bonafide work carried out by myself. It has not been submitted to an y other university or institution for the award of any degree, certified or published any time before.Corporate ProfileAlthough started as a small scale business in 1992, Mandalay Shweyi Co., Ltd. Shweyi has grown into one of Myanmar's largest alcoholic beverages manufacturers with two distilleries one in Yangon and one in Mandalay. The full product portfolio includes 20 products in six different groups. Superior quality is obtained through Shweyi’s strict quality standards which are applied advanced manufacturing process. The company was formed with the well experienced distillers, knowledgeable technical experts and engineers from Yangon Institute of Technology. Shweyi is a major manufacturer of alcohol industry and also a nationwide foods & beverages marketer in Myanmar.There are nine branch offices in order to cope the whole national market (see Appendix-A). The vision of the company is â€Å"to provides healthy foods & beverages to consumers†, they produce healthy liquors series includes HERBAL RUM and SOBASHOCHU (Buckwheat Liquors). And the company also  manufactures various kinds of healthy food including Buckwheat products, Honey products and Herbal Tea products.Background of the studyNowadays, bombing of global market effect, it becomes more and more competitions in business environment and then customer satisfaction is becoming crucial role to the survival of any business organization. The competitors who will be successful recognize that customer satisfaction is a critical strategic weapon that can bring increased market share and increased profits. Therefore most of the companies all over the world are beginning to realize that customers’ satisfaction has a direct impact on the bottom line.And then they are trying to develop the unique strategies and new changes to satisfy their customer needs and wants and strive to exceed their expectations. Measuring customer satisfaction is the most important in differentiating the compan y. As markets shrink, companies are scrambling to boost customer satisfaction and keep their current customers rather than devoting additional resources to chase potential new customers. The key to customer retention is customer satisfaction.Therefore â€Å"A Research on Improving Customer Satisfaction and Retention† is essential for all business organisations. The need for customer satisfaction measurement is well documented and it can increase revenue and profit due to higher customer retention.MethodologyThis paper is a case study of Mandalay Shweyi Co., Ltd. from an inside-out perspective. It attempts to explore the benefits of Customer Satisfaction Survey and how it can provide the company with insight for development and support for future strategic decision making processes.This research was completed to identify what key components affect customer satisfaction at Mandalay Shweyi product. In this research methodology which included research design, questionnaires, samp ling process, data collection method, research timeframe and method of analysis.Research Design Exploratory: After getting the permission from company’s board of director, I  started to discuss what factors of Herbal Tea product contribute to customer satisfaction with marketing team. Because of time and budget constraints, I was unable to conduct focus groups or in depth interviews. By doing brainstorming with marketing team, I developed the research design.Descriptive: To gain a better understanding of the problem, and to clarify the research questions, I conducted secondary research to discover what experts found customer satisfaction to be at other food and beverage products. This research allowed me to gain a solid understanding of the business.QuestionnairesAfter developing what factors may lead to customer satisfaction at Herbal Tea product, I began to design a questionnaire to collect primary data from wholesalers and consumers. The type of instrument used in this r esearch was a five-point likert scale questionnaire. The questionnaire was divided into three sections. The initial portion of wholesaler questionnaire included customer service factors, the second section tested the product quality and the last section tested the pricing and reliability (reliability means that it has no side effect on customer) of Herbal Tea product.In the first portion of consumer questionnaire included demographic factors, the second section was asked the product quality and the last section measured the pricing and reliability of Herbal Tea product. The five-point likert scale assigned points 1,2,3,4 and 5. The questionnaire was pre-tested among a group of 25 potential respondents but no major problems were detected. Several minor modifications were made to ensure clarity of the items in the final version of the questionnaire (see Appendix-B).Sampling process Data were collected through survey using a structured questionnaires administered to wholesalers and con sumers (end-users). The total number of respondents (samples) who participated in this research was 149. The sample was separated into two groups. One is wholesalers group (wholesalers, N=58) and the next is consumers group (consumers, N=91). In this research the type of sampling that I used was convenient sampling.Data Collection MethodI collected the primary data by using marketing team and distributing the questionnaires to wholesalers and consumers. After collecting the data, I coded the questionnaire and entered the data into the SPSS software system to run statistical tests to analyze the data I collected. I collected the secondary research by finding professional articles and past research.Research Time FrameI compiled a research report that addresses how to improve customer satisfaction and retention at Mandalay Shweyi. I began my research in October 2010 and started to develop constructs and research hypotheses to answer the research question of what factors influence custo mer satisfaction at Mandalay Shweyi. In early November I developed my survey by putting the constructs I had previously created into likert scales. In last week of November I surveyed customers in the market, using questionnaire to measure satisfaction, and at early December I ran tests on the data using the Statistical Package for Social Sciences (SPSS) software version 15.0. Method of AnalysisIn this research diagrammatic representations are used to represent the information which included frequencies and correlation tables, and bar charts (see Appendix-C). Appropriate statistical techniques like descriptive data analysis and Pearson correlation analysis were used to analyse and interpret the data.A Literature ReviewMarketing Concept Philip Kotler who is the world's foremost marketing guru. In his first book, â€Å"Marketing Management (1967)†, marketing has been defined as â€Å"A function of management with scientific rigour, models and statistical analysis†. The à ¢â‚¬Ëœmarketing concept' in the words of Kotler is â€Å"Holds that achieving organisational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and more efficiently than competitors do.†Marketing is only one factor in attracting and keeping customers but it cannot fulfill its managerial role unless customer needs and wants are understood and satisfied. The organisation must try to understand the target market’s needs and wants.  Needs describe the basic requirements of human, people need food, air, water, clothing, and shelter to survive. People also have strong needs for recreation, education, and entertainment. These needs become wants when they are directed to specific objects that might satisfy the need (Philip Kotler, 2006). Marketing StrategyThe aim of any business organisation is to make profit. This can only be achieved by forming an effective marketing strategy which can actually incre ase double or triple of organisational sales. Marketing Strategy is the set of helps to guidelines and policies used for effectively matching marketing programmes with target market opportunities in order to achieve organisational objectives. Developing marketing strategy includes deciding which customers to target and how to position products and etc. When forming a marketing strategy, customer satisfaction is really the main goal. And a strategy that does not address the needs of the customers cannot be classified as a good marketing strategy.Marketing MixThe major marketing management decisions can be classified into four categories as follow: Product: The product is the physical product or service offered to the consumer. Price: Pricing decisions should take into account profit margins and the probable pricing response of competitors. Place (distribution): Place decisions are those associated with channels of distribution that serve as the means for getting the product to the ta rget customers. Promotion: Promotion decisions are those related to communicating and selling to potential consumers. It is useful to know the value of a customer in order to determine whether additional customers are worth the cost of acquiring them.These variables are known as the marketing mix and also referred to as the â€Å"Four ‘P's. The marketing mix is the combination of marketing activities that an organisation engages in so as to best meet the needs of its targeted market. The service marketing mix involves analysing the 7’p of marketing, involving Product, Price, Place, Promotion, Physical Evidence, Process and People. Most of the firm attempts to generate a positive response in the target market by blending these four marketing mix variables in an optimal manner.External and uncontrollable environmental factors are very important elements of the marketing strategy  Programs. Therefore Marketing Mix should include customers, environmental variables, and c ompetitive variables (Kotler, 1984). Marketing ResearchMarketing research is a systematic process which may include these steps: data – gathering, analysis, storage, retrieval and dissemination of information and finally to aid decision making. The main reasons of doing research are to reduce risks, to help in planning and forecasting results, to aid marketing mix-decisions and to improve decision making capabilities (ABE, Strategic Marketing Management, Study manual). Effective communicating research result on marketing mix is an essential component of the research process. Clear, concise, and cogent reports enable informed effective decision making. For this reason marketing research is necessary to measure and track customer satisfaction.Customer SatisfactionCustomer satisfaction is regarded as customers can get more benefits than their cost (Liu and Yen, 2010). In comparison with other traditional performance measures, customer satisfaction is probably less sensitive to s easonal fluctuations, changes in costs or changes in accounting practices (Kotler, 2006). Therefore, many researchers consider customer satisfaction to be the best indicator of a company’s future profit. Keeping existing customers is as important as acquiring new ones.The approach towards existing customers must be active, based on a separate marketing mix for customer retention (Rozenberg and Czepiel, 1992). Interaction between the one delivering the service and the customer is very important and has direct effect on the service quality and quality perception (Heuvel, 1993). Sales are the most important goal of any commercial enterprise; it becomes necessary to satisfy customers. For customer satisfaction it is necessary to establish and maintain certain important characteristics like:Quality Fair prices Good customer handling skills Efficient delivery Serious consideration of consumer complaintsAccording to the Michael Porter (2006), today, more and more companies are recog nizing the importance of satisfying and retaining current customers.  Major advantage of customer retention is â€Å"Acquiring new customers can cost five times more than the costs involved in satisfying and retaining current customers.It requires a great deal of effort to induce satisfied customers to switch away from their current suppliers.† Customer satisfaction levels can be measured using survey techniques and questionnaires. Getting high levels of customer satisfaction is very important to a business because satisfied customers are most likely to be loyal and to make repeated orders and to use a wide range of services offered by a business.Analysis, Findings and DiscussionTo begin analyzing the Herbal Tea Product data, SPSS version 15.0 was used for statistical testing. In this research descriptive data analysis, frequencies and inferential statistic (Pearson correlation analysis) were used. From the analysis of Descriptive, Frequencies and Pearson correlation, the m ain findings and discussion can be found as follow.Demography of CustomersThe total number of respondents who participated in this research was 91 consumers and 58 wholesalers. Table 1 illustrates the demographic data of consumer respondents. Table 1: Demographic data of Customers (Consumers, N=91)Items n %Gender Male 38 41.8Female 53 58.2Age 20 to 40 41 to 60 61 and above 39 43 9 42.9 47.3 9.8Monthly Income (Myanmar Kyat) 10,000 to 4,00,000 4,10,000 to 8,00,000 8,10,000 and above 50 33 8 55.0 46.2 9.8As shown in table (1), the respondents consisted of 41.8% male and 58.2% female. Most of the respondents (47.3%) were in the age range of 41 to 60 years old. 42.9% of the respondents were 20 to 40 years old and only 9.8% of respondents were 61 years old and above. With regard to personal monthly income level, over half of the respondents i.e (55%) had the level of (10,000 to 4,00,000) Kyats, whereas another 46.2% of respondents earned (4,10,000 to 8,00,000) Kyats and only 9.8% of respo ndents had the range of above 8,10,000 Kyats.Frequencies of Consumers SatisfactionFrom the result of descriptive analysis on customer satisfaction (illustrated in Table 2), 29.7% of the consumers were satisfied with Good condition,  25.3% were satisfied with Fair condition, 17.6% of consumers were satisfied, 16.5% were satisfied with Very Good condition and only 11% were dissatisfied with Poor condition in quality of products.Table 2Customer satisfaction on product quality, taste of product and quality of packing (Consumers, N=91) Item Poor Fair Good Very Good ExcellentProduct Quality (%) 11.0 25.3 29.7 16.5 17.6Taste of Product (%) 18.7 24.2 25.3 23.1 8.8Quality of Packing (%) 16.5 25.3 34.1 12.1 12.1The result of finding on taste of products and quality of packing were displayed in Table 2. According to this research we can see most of the consumers are satisfied with 24.2%, 25.3% and 23.1% for fair, good and very good respectively on the taste of products. But 18.7% of consumer s were dislike the taste and only 8.8 % of the consumers were completely satisfied for taste. We can also see the frequencies of customer satisfaction on Table 2. Therefore we can conclude that majority consumers are satisfied with quality, taste and packing of the products. Table 3 shows the result of customer satisfaction on price, reliability of product and recommend to other for products.Even though (30.8%) of the respondents perceived that the price of the product were fair, another 33% were no comment (neither agree nor disagree) on price. However it was found that a significant total of 36.3% did not perceived price as fair. We can draw a conclusion that the price is not fair for most of respondents and we need to adjust the pricing strategy because pricing is one of the most important elements of the marketing mix and pricing a product too high or too low could mean a loss of sales for the organisation.For reliability (cannot side effect to consumer) of product, (38.5%) of c onsumers were neither agree nor disagree and a total of (34.1%) of the consumers were strongly reliable on product. But (27.5%) of consumers were not reliable on product. According to this result, we need to develop the product to get more reliable from customers.Table 3Customer satisfaction on price, reliability of product and recommend to other (Consumers, N=91) Item Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly AgreeFair Price (%) 16.5 19.8 33.0 14.3 16.5Reliability of Product (%) 12.1 15.4 38.5 24.2 9.9Recommend to other (%) 5.5 20.9 26.4 30.8 16.5Frequencies of Wholesalers SatisfactionTable 4 shows the result of wholesalers’ satisfaction on service quality. From this result most of the respondents of (20.7%, 39.7% and 12.1%) were felt neither satisfied nor dissatisfied, somewhat satisfied, completely satisfied respectively for on time delivery. According to this analysis we found that most of the respondents were satisfied for on time delivery. But 15.5% of respondents were felt completely dissatisfied and 12.1% of respondents were also felt somewhat dissatisfied for on time delivery. If we want to maintain our customer satisfaction and retention we should care dissatisfied customers by doing effective service recovery which can improve their satisfaction level.Half of the customers were felt neither satisfied nor dissatisfied on sale management. Completely dissatisfied was not found at sale management. For sale person’s dealing, we found most of the customers were satisfied and only 1.7% of respondents were completely dissatisfied. The result of non-defect performance revealed that only 1.7% was defected. Mostly they were performed without defect.Table 4Customer satisfaction on Service Quality (Wholesalers, N=58) Item Completely Dissatisfied Somewhat Dissatisfied Neither Satisfied nor Dissatisfied Somewhat Satisfied Completely SatisfiedOn Time Delivery (%) 15.5 12.1 20.7 39.7 12.1Sale Management (%) 0 17.2 51.7 24.1 6 .9Sale Person’s Dealing (%) 1.7 13.8 32.8 41.4 10.3Non-Defect Performance (%) 1.7 20.7 44.8 27.6 5.2Hypothesis Testing and Results Table 5 Hypothesis 1: There is relationship between product quality and customer satisfaction Variable Pearson Correlation, r Significant, p Mean Standard Deviation Product Quality .276(**) .008 3.04 1.255 ** Correlation is significant at the 0.01 level (2-tailed)