Chapter 4: Customer

Accommodation
Learning Objectives
• Describe the customer-focused marketing
• Understand the customer service
• Understand the customer satisfaction and success
• Demonstrate the customer accommodation strategy
Customer Accommodation
• It is important to establish initially that logistics contributes to an
organization’s success by accommodating customer’s delivery and
inventory availability expectations and requirements.
Customer Focused Marketing
• The basic principles of customer-focused marketing have their roots
in marketing concept, a business philosophy that suggests that the
focal point of business’s strategy must be the customers it intends to
serve.
Transactional versus Relationship Marketing
• Transactional Marketing – companies are generally oriented toward
short-term interaction with their customers. This traditional
marketing concept emphasizes accommodating customer’s needs and
requirements.
• Relationship Marketing – focuses on the development of long-term
relations with key supply chain participants such as consumers,
intermediate customers, and suppliers in effort to develop and retain
long-term preference and loyalty.
Supply Chain Service Outputs
• Four generic service outputs to accommodate customers
requirements are:
• 1) Spatial convenience (customer can access to product in many
places)
• 2) Lot size (no. of unit to be purchase in each transaction)
• 3) Waiting time (between order and receiving)
• 4) Product variety and assortment
Customer Service
• Availability– stockout frequency, fill rate, order shipped complete.
• Operational performance(time required to deliver customer’s order)
– speed (performance cycle speed), consistency (order cycle
consistency), flexibility (firm ability to accommodate the special
situation) and malfunction recovery.
• Service reliability -ability to perform order related activity
• The perfect order – do it right at first time
• Basic service platforms – commitment level to all customer in term of
availability, operational performance and reliability.
Customer Satisfaction
• Customer expectation (Logistic expectation are reliability, responsiveness,
access, communication, credibility, security, courtesy, competency,
tangibles, knowing customer)
• Satisfaction and quality model (knowledge about customer, standard,
performance, communications, perception, satisfaction)
• Increasing Customer Expectation (Important component of TQM, notion of
continuous improvement has been accepted by most of the organization
• Limitations of Customer Satisfaction (many executives make a
fundamental, undesirable mistakes in the interpretation of satisfaction,
satisfied customers are not necessarily loyal customers, firm frequently
forget satisfaction lies in the expectations and perceptions of individual
customers
Customer Success
• Customer success shifts the focus from expectations to customer’s
real requirements
• Table 4.3 summarizes the evolution that customer focused
organizations are experienced

Table 4.3 Evolution of Management Thought

Philosophy Focus
Customer Service Meet internal standards
Customer Satisfaction Meet expectations
Custommer Success Meet customer requirements
• Achieving Customer Success – customer success program involves a
thorough understanding of individual customer requirements and a
commitment to focus on long-term business relationship having a
high potential for growth and profitability
• Value-Added Services - refers to the unique specific activities that
firms can jointly develop to enhance their efficiency, effectiveness
and relevancy.
 Developing Customer Accommodation
Strategy
• Framework for Strategic Choice – customer success are extremely
time consuming and resource intensive. From a strategic point of
view, a company must determine which type of relationship approach
us appropriate for which customers.

Table 4.4 Choosing Customer Relationship Strategy

Customer Category 1 2 3 4
A Success Success Success/Satisfaction Basic Service
B Success/Satisfaction Success/Satisfaction Basic Service Basic Service
C Basic Service Basic Service Basic Service Basic Service/cull
D Basic service/cull Basic service/cull Basic Service/cull Basic Service/cull
Customer Relationship Management
Technology
• CRM – has been used by many firms to described their efforts to
accommodate better the needs and requirements for individual
customer
• CRM – used to described technology and software that used to
mange and analyze data from numerous sources within an
organization
• CRM – is designed to extend functionality of the ERP sales and
inventory applications
Thank you