The Copier IndustryIn 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.
• 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
Xerox - Company Profile1959 : Haloid company launched model 914 office copier.1961: Haloid was renamed to XeroxProtected by a no.of patentsXerox 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.
The BackgroundIBM, Kodak, Japanese companies were main competitorsXerox’s cost and product prices were higher than the competitorsQuality had declinedMarket share and return on assets (ROA) had fallen drasticallyMarket share dropped from 100% in 1960 to under 40% in 1980Japanese had 40%-50% cost advantage
Customer Segmentation at XeroxCustomers:Commercial major accountsNamed accountsGeneral marketsGovernment and educationDistribution:sold directly by Xerox sales forceLow volume and low priced mid volume machines sold through dealer networksLowest priced machines sold through consumer retail chains
Product line and PricingIn 1990, Xerox had 2 lines of copiers:10 series and 50 seriesIn 1990, Xerox had 18 copiers: 4 in low-end, 9 in mid range & 5 in high endXerox copier ranged from $2,440-$154,000Had 30day/90day/3year warrantyLonger warranty- aggressive marketing tool
Customer satisfaction at Xerox3 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
Customer ServiceCustomer 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 administrationQuality of customer service was measured -• Customer satisfaction based on Customer survey• Expense to revenue ratio• Reliability• Service billing errors
Vision and goalsTo be recognized as the industry benchmark in customer satisfactionGoal had 2 components:I. External worldII. Internal worldTo achieve goals- market driven business strategies, product strategies, and investments determined by customer requirements
ActionsEmployees developed a proactive attitude, role, work emphasis focused on customer satisfaction.Customer satisfaction code of conduct was developed in the training curriculumLeadership through quality tools and processesCustomer relations groups(CRG) were initiatedLocal empowerment
Measurement of customer satisfactionExternal measurement system:i. Periodic surveyii. Post installation surveyiii. New product post installation surveyiv. Competitive benchmarking customer satisfaction survey
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.
Data analyses, review and follow-upIdentified segment specific satisfiers and dissatisfiersManage corrective action processRoot causes of problems were categorized and tracked
Customer GuaranteeIt was assumed that offering of guarantee would lead to customer satisfaction:1. Service guarantee2. Money back guarantee3. Product performance guarantee4. Product fit guaranteeSurvey conducted to find which guarantee customers would prefer.