Xerox case
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  • 1. Enhancing value & Customer Satisfaction
  • 2. The Copier IndustryIn U.S. copier placements had grown up at a slow rate of 2.9% Xerox categorized the copier industry into 3 product markets:• Low-volume marketa. Copiers made fewer than 50,000copies per monthb. Costs less than $4,000.c. Major players were Canon, Xerox, Sharp, Mita and Ricoh.
  • 3. • Mid volume market:a. Copiers made upto 10,000 copies per monthb. Priced between $4,000-6,000c. Major players were Xerox, Canon, Mita, Ricoh and Konica.• High-volume market:a. Priced over $60,000b. Major players were Kodak and Xerox, Canon, Konica and Lanier competed in the lower end of the market
  • 4. Xerox - Company Profile1959 : Haloid company launched model 914 office copier.1961: Haloid was renamed to XeroxProtected by a no.of patentsXerox diversified into various new businesses:• Purchased mainframe-maker scientific data systems• Office computing business including word processor, document processing workstation, networks, facsimile equipments, electronic type writers and financial service acquisitions.
  • 5. The BackgroundIBM, Kodak, Japanese companies were main competitorsXerox’s cost and product prices were higher than the competitorsQuality had declinedMarket share and return on assets (ROA) had fallen drasticallyMarket share dropped from 100% in 1960 to under 40% in 1980Japanese had 40%-50% cost advantage
  • 6. Customer Segmentation at XeroxCustomers:Commercial major accountsNamed accountsGeneral marketsGovernment and educationDistribution:sold directly by Xerox sales forceLow volume and low priced mid volume machines sold through dealer networksLowest priced machines sold through consumer retail chains
  • 7. Product line and PricingIn 1990, Xerox had 2 lines of copiers:10 series and 50 seriesIn 1990, Xerox had 18 copiers: 4 in low-end, 9 in mid range & 5 in high endXerox copier ranged from $2,440-$154,000Had 30day/90day/3year warrantyLonger warranty- aggressive marketing tool
  • 8. Customer satisfaction at Xerox3 corporate priorities:i. Return on assetsii. Market shareiii. Customer satisfaction Studies conducted showed customer satisfaction was not the top priority in day-to-day management of business Issue of guidelines and requirements to operating units to ensure customer satisfaction Guidelines focused on reorienting the company Operating units were given authority to respond to customers’ requirements
  • 9. Customer ServiceCustomer Service at Xerox had several dimensions:• Fixing of units• Providing operating systems support• Communicating with customers• Resolving customer issues• Technical product support• Feedback to manufacturing, sales, marketing and administrationQuality of customer service was measured -• Customer satisfaction based on Customer survey• Expense to revenue ratio• Reliability• Service billing errors
  • 10. Vision and goalsTo be recognized as the industry benchmark in customer satisfactionGoal had 2 components:I. External worldII. Internal worldTo achieve goals- market driven business strategies, product strategies, and investments determined by customer requirements
  • 11. ActionsEmployees developed a proactive attitude, role, work emphasis focused on customer satisfaction.Customer satisfaction code of conduct was developed in the training curriculumLeadership through quality tools and processesCustomer relations groups(CRG) were initiatedLocal empowerment
  • 12. Measurement of customer satisfactionExternal measurement system:i. Periodic surveyii. Post installation surveyiii. New product post installation surveyiv. Competitive benchmarking customer satisfaction survey
  • 13. Internal measurement process:i. Assessment of Xerox products and services to the appropriate quality standardsii. Routine, Monitor and inspect internal performanceiii. Internal measures included• service response time• Billing errors• Training hours per sales rep.
  • 14. Data analyses, review and follow-upIdentified segment specific satisfiers and dissatisfiersManage corrective action processRoot causes of problems were categorized and tracked
  • 15. Customer GuaranteeIt was assumed that offering of guarantee would lead to customer satisfaction:1. Service guarantee2. Money back guarantee3. Product performance guarantee4. Product fit guaranteeSurvey conducted to find which guarantee customers would prefer.
  • 16. Thank You