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  1. 1. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online), INTERNATIONAL JOURNAL OF MANAGEMENT (IJM) Volume 4, Issue 6, November - December (2013) ISSN 0976-6502 (Print) ISSN 0976-6510 (Online) Volume 4, Issue 6, November - December (2013), pp. 145-152 © IAEME: www.iaeme.com/ijm.asp Journal Impact Factor (2013): 6.9071 (Calculated by GISI) www.jifactor.com IJM ©IAEME CUSTOMER SATISFACTION AND LOYALTY IN AFTER SALE SERVICE Dr. S.H.Sawant1 1 Associate Professor, Mechanical Engg. Dept, Dr.J.J.Magdum College of Engineering, Jaysingpur, Kolhapur, India ABSTRACT To be successful, organizations must look into the needs and wants of their customers. Customer satisfaction is important because many researchers have shown that customer satisfaction has a positive effect on organization’s profitability. Not only the product theypurchase can satisfy customers, but also by the service they got from the organization. The main objective of this study is to asses either after sale services that are offered to customers just after the sales stage have an effect on customer satisfaction and loyalty in the automotive industry.In order to carry out this study, data from 120after sale service customers were collected through questionnaire. The techniques of analysis used in this study are descriptive and inferential.Customer satisfaction index is used to measure and quantify the relationships between customer satisfaction and customerrequirements. Results indicate that discovered after sale serviceshaseffect on customer satisfaction andloyalty, and after sale service satisfaction and loyaltyhas positive relationship. In addition to this different companies provide same after sale service in different way, and the way they offerthe service for their customer has a significant difference on the satisfaction of customers. Keywords: After Sale Service, Customer Satisfaction, Customer Loyalty, Descriptive Analysis Inferential Analysis. INTRODUCTION Undoubtedly the customer has become the King. An organization should revolve around the customer, because customers are the key to any business. Any customer should be valued and treated like a friend. Responses to customer complaints should be immediate and should be more than the customer expected to receive. Employees must understand that, as Henry Ford said, “It is not the employer who pays wages – he only handles the money, it is the customer who pays the wages” Employees must please customers, not bosses, management committees or headquarters. 145
  2. 2. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online), Volume 4, Issue 6, November - December (2013) Much of literature dealing with marketing and management issues recognizes the importance of customer satisfaction for business. However, according to Lele, research in marketing has concentrated more on discussing how to increase customer sales rather than how to satisfy and create loyal customers. In businesses where services are part of the business, the services are visible to the customer. Therefore, it would be quite natural that such services would have a major impact on the customer satisfaction. The main objective of this research is an increased understanding of how a supplier can successfully manage its care business in two wheeler market. CUSTOMER SATISFACTION AND LOYALTY Customer satisfaction means that the customer's needs are met, product and services are satisfactory, and customers’ experience is positive. According to the definition, customer is satisfied when only minimum has been done for the customer. If a customer is said to be satisfied or happy about a purchase, the customer's overall feeling and experiences must be neutral or positive. Customer satisfaction itself is not an indication that there will be customer retention. A loyal customer is a customer whose expectations are met or exceeded and they proactively refer the supplier. The nature of loyalty has changed over time in society; nowadays it is based on mutually earned loyalty by the continued delivery of superior value to the customer. Customer loyalty can be measured and analyzed to minimize customer turnover and to increase the growth of key accounts. Griffin defined a loyal customer as a customer who regularly repeats purchases, purchases across product and service lines, has some level of immunity to competitors, and refers to others. Kaplan and Norton propose that managers should have a clear idea of their targeted customers and a specific set of core outcome measurements such as customer satisfaction, retention, and profitability. Customer satisfaction measurements have frequently yielded results suggesting that the relationship between customer satisfaction and customer loyalty is not constant. Hallowell states that the relationship among customer satisfaction, customer loyalty, and profitability warrants further research. According to Ruyter and Bloemer, the relationship between loyalty and satisfaction has remained equivocal. This may be even truer for services that are delivered over longer periods. Olivaetal.argue that the relationship between service satisfaction and customer loyalty is non-linear. Anderson and Mittal argue that the links between customer satisfaction and customer retention can have asymmetric and non-linear. Heskett et al. propose that job satisfaction and customer satisfaction are closely related. Furthermore, Heskett et al.claim that there is direct and strong relationship between profit, growth, customer loyalty, customer satisfaction, value of the goods and services delivered to customers, and employee capability, satisfaction, loyalty, and productivity. Oliver also states that quality, satisfaction, and loyalty have an impact on profits. Ruyter and Bloemer in their attempt to extend knowledge about loyalty in services by including value attainment as a factor, argue that, in cases of relatively high levels of satisfaction, satisfaction would be the most important determinant of customer loyalty. However, in cases of extended service encounters, it may not always be possible to attain high levels of satisfaction. PRODUCT SUPPORT AND AFTER MARKET SERVICES It is important that product based industries must provide a service bundle to their customers. Manufactures of equipment – small appliances, office machines, tractors, mainframes, airplanes – all have to provide the buyers with product support services. In fact, product support service is becoming major battleground for competitive advantage. Firms that provide high quality service will undoubtfully outperform their less service – oriented competitors. The company must define customer needs carefully in designing both the 146
  3. 3. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online), Volume 4, Issue 6, November - December (2013) product and the product support system. Customers are most concerned about an interruption of the service that they expect from the product. They have three specific worries. 1. First, they worry about reliability and failure frequency, how often the product is likely to break down in a given period. 2. Second, customers worry about downtime duration. The longer the downtime, the higher the cost, especially if a crew cannot work when the product is idle. 3. Third, customers worry about out of pocket of maintenance and repair service. An intelligent buyer takes all of these factors into considerations in choosing a vendor. The buyer wants to estimate the offer’s expected life style cost, which is the product’s purchase cost plus the discounted cost of maintenance and repair less the discounted salvage value. Buyers have right to ask for hard data in choosing among vendors. The importance of reliability, service dependability, and maintenance vary among different products and product users. A one – computer office will need higher product reliability and faster repair service than an office where there are other computers available if one breaks down. To provide the best support, a manufacturer must identify the service that customers value most and their relative importance. In the case of expensive equipment, such as medical imaging equipments, manufacturer offer facilitative services such as equipment installation, staff training, maintenance, repair services, and financing. They may also add value augmenting services. Companies need to plan their product design and service – mix decisions in tandem. Design and quality – assurance managers should be part of the new - product development team. Good product design will reduce the amount of subsequent servicing needed. At the time of sale, the buyer and seller have different kind of expectations. For the seller, the sale is a culmination of a long sales negotiation; it is time to collect monetary reward for the labours. Sales closure opens new opportunities with new potential customers and matters shift from the sales team to the production team. From the buyer’s point of view, a sale is an initiation of a new relationship; the buyer is frequently concerned about support and the attention it will get wishes to continue to interact with the sales team. According to Wellemin, after sales support has changed drastically in recent decades. Customers have become more dependent on efficient operation of suppliers’ equipment, services are labour intensive and cost of labour has risen, products intended for the same markets are becoming more similar, customers are increasingly selective as they seek value for money, and social changes have reflected to services, for example when a service force works in the customer’s premises, the supervision is frequently minimal. The product-service package must be defined so that it maintains costs at a level acceptable to the market. It is necessary to develop economic analysis that enables estimates of life-cycle costs. In the USA, the concept of life-cycle costs has become relatively widespread in many industries. The relative importance of a product's material content decreases and the same applies to the manufacturing added value. For objects that are consumed, the share of logistical costs, including all the services provided at various stages such as transportation, maintenance, inventory, and planning has been growing. At the same time, supporting the tangible product has become more expensive to the supplier and to the customer. The initial purchase price represents only one element in the customer's total cost. Particularly for durable products, delivery and usage costs including maintenance represent a significant part of the total-cost price for the customer. After sales service is more than merely fixing what has gone wrong, which appears to be the primary function of many after sales service functions? Manufacturers should anticipate the after sales needs in product design, but experience shows that manufacturers do not incorporate customers’ concerns actively enough at the product design phase. In the case of durable goods, at 147
  4. 4. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online), Volume 4, Issue 6, November - December (2013) least customer, dealer, third party provider of service, the manufacturer of the tangible product, and the supplier of parts and components can be involved in the after sales service operations. The traditional approach to after sales service centres is on technical intervention, where the focus is on improving technical tools and work methods. The approach of Mathe and Shapiro looks for increased overall efficiency between the supplier and customer. Service activities are defined at the design phase. After sales service may not be profitable on its own, but is frequently a key determinant in the sale of the product itself. It has been estimated that the importance of services will grow in the future. Product support can be a basis for developing a close relationship between a supplier and its customers. For example, among the criteria in the purchase of computers by small and medium size companies, after sales service (maintenance) had the strongest influence on customer behavior. After sales service was followed close by the equipment itself. Difficulties related to a relationship between a supplier and its customer can be reduced by offering services that complement the product. DATA PRESENTATION, ANALYSIS AND INTERPRETATION Data Presentation The customer satisfaction indexes(CSI’s) of individual customers is obtained by the following formula using Excel Software as CSI = 1 r ∑ (csi) i r i =1 Where, r = Total number of customers responded in a year (csi)i = Customer satisfaction index of individual customer Data Interpretation The values of percentage average weightages corresponding to quality parameter number were entered in Table 1 and the graph for the same is plotted as shown in Fig 1.The values of percentage evaluation corresponding to quality parameter number were entered in Table 2 and the graph for the same is plotted as shown in Fig 2.The values of average csi( In the scale of 1 to 1000) corresponding to Month of the financial year 2012 were entered in Table 3 and the graph for the same is plotted as shown in Fig 3. Table 1: Percentage Average Weightages Corresponding to Quality Parameter Number Quality Percentage Quality parameter Percentage parameter No. Average Weight No. Average Weight n1 93 n11 48.45 n2 91. 5 n12 42 n3 87 n13 38.5 n4 79.5 n14 31.45 n5 77.5 n15 27.4 n6 75.5 n16 22.9 n7 67 n17 17.5 n8 63.5 n18 13.5 n9 58.5 n19 8.5 n10 53 n20 4.0 148
  5. 5. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online), Volume 4, Issue 6, November - December (2013) Percentage Average Weight 100 90 80 70 60 50 40 30 20 10 0 n3 n4 n5 n6 n7 n8 n9 n10 n11 n12 n13 n14 n15 n16 n17 n18 n19 n20 Quality Parameter Number Fig.1: Percentage Average Weightages Corresponding to Quality Parameter Number Table 2: Percentage Evaluation Corresponding to Quality Parameter Number Quality Percentage Quality Parameter Percentage Parameter No. Evaluation No. Evaluation n1 82.8 n11 86 n2 64 n12 84 n3 63.6 n13 64 n4 66 n14 92 n5 94 n15 96 n6 82 n16 94 n7 83.2 n17 96 n8 96 n18 62 n9 84.8 n19 60 n10 98 n20 54 Percentage Evaluation 120 100 80 60 40 20 0 n1 n2 n3 n4 n5 n6 n7 n8 n9 n10 n11 n12 n13 n14 n15 n16 n17 n18 n19 n20 Quality Parameter Number Fig 2: Percentage Evaluation Corresponding to Quality Parameter Number 149
  6. 6. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online), Volume 4, Issue 6, November - December (2013) Table 3: Average csiCorresponding to Month Average csi Month Average csi 790.5 July 795.8 810.8 August 782.9 809.7 September 789.6 818.3 October 817.5 821.2 November 811.1 815.5 December 810.4 Month January February March April May June 830 820 Average csi 810 800 790 780 770 760 January February M arch April M ay June July August Sept ember Oct ober November December Month Fig 3: Average csiCorresponding to Month DataAnalysis The analysis of the data collected from 120 customers responded with reference to each quality parameter was analyzed. The findings observed in the analysis of quality parameter 1 are as shown below. Q.P.1 (n1) How will you assess the services provided by our workshop? Sr. No. 1. 2. 3. 4. 5. Opinion Evaluation Over Satisfied Fully Satisfied Satisfied Satisfied Partly Not Satisfied 05 04 03 02 01 Number of Customer Responded Percentage % 120 45 37.50 47 39.16 28 23.33 00 00 00 00 150
  7. 7. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online), Volume 4, Issue 6, November - December (2013) Graphical Representation Interpretation As per as overall evaluation or assessment of the services provided by the workshop is concerned. 37.50% of the respondents were over satisfied. 39.16% of the respondents were fully satisfied . 23.33% of the respondents were satisfied upto the mark i.e. the workshop was succeed in fulfilling their requirement. Though not a single respondent has quoted his opinion that he was not satisfied or partly satisfied. But as weightage or importance of this quality parameter is 18.6. the workshop of the organization should try to over satisfy the customers in order to improve their CSI. OBSERVATIONS 1. 2. 3. 4. 5. 6. Due to large number of customers selected for feedback, the average weight of the nearest item can come so nearer or far away from each other. As the weightages for the items were allotted by the customers, they give more attention on the items having higher weightages and less attention on the items having lower weightages. Therefore the feedback obtained is more correct that means e.g. if certain customer unlikely gives C value for all the items of common feedback form though he allot average marks for the items having less weightage, there will be no much variation in the feedback Feedback with keen interest by some customers that may be because of somebody is coming to them for information Lot of time available with customers as feedback was taken by attempting them. Therefore they will give exact feedback with keen interest. The feedback is taken from the person who is not connected with the organization from which service was taken, therefore there is no fear in mind of the customer that they have to divert towards organization by allotting large values, which may happen at the time of common feedback. So the feedback obtained is more correct. As C.S.I. survey sheet is required to collect from well educated customers, the analysis made by them will be more correct and which surely leads to correct CSI. 151
  8. 8. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online), Volume 4, Issue 6, November - December (2013) CONCLUSION 1. As the weightages of the items are obtained from customers, organization can be in position to give more attention to make the fulfillment in the items having less weightages in order to improve overall CSI. 2. This analysis gives an idea about which item is having less c value according to that the modification can be suggested. REFERENCES A. Journal papers 1. Customer Satisfaction and Loyalty in After Sales Services. Modes of care in Telecommunication Systems. Delivery -HeikklKoskela Hut Industrial Management and Work and Organizational Psychology, Report No. 21, Espoo 2002. 2. After Sales Service in Durable Consumer Goods the Case of Italian Industry - Sergio Cavalieri, University of Bergamo, and Department of Ind.Engg. ASAP Project National Coordinator. B. Theses 3. With Our Customers - FY 2005 Performance Report. 4. Gearing to Go-Future Trends in Indian Automobile Market - VivekVaidya. C. Books 5. Total Quality Management - Dale H. Besterfield - Carol Besterfield – Michna - Glen H. Besterfield, MaryBesterfield – Sacre Pearson Education. 6. Marketing Management - Philip Kotler– Kevin Lane Keller Prentice - Hall of India Private Limited. D. Proceeding Papers 7. After Sales Service is key in providing Heavy Duty Truck Satisfaction in Japan.- J. D. Power ,Asia Pacific Reports . 8. Maruti Suzuki Ranks Highest in India Customer Satisfaction study for a Sixth Consecutive Year,- J. D. Power Asia Pacific Reports . 9. A Quarterly Report by J. D. Power and Associates- Munich, Germany Office Wiater 2005 / 2006. 152