Chapter 9

Fulfilling the Offer & Serving

the Customer

Copyright © 2010 Pearson Education, Inc.

Publishing as Prentice Hall.
 Fulfillment Definition
Fulfillment – the act of carrying out a
customer’s expectations including the
Delivery of
products and
information

Copyright © 2010 Pearson Education,

Inc. Publishing as Prentice Hall.
 Fulfillment
 sending the product
to the customer or delivering
the service agreed upon.
 Include all interactions
with the customer
 Fulfillment
 Some sees it as the
“Extended Brand
Augmented
potenti
Product
al
Brand
name
and
Service
Brand
Augmented
potenti
Product
al

product" or the images

intangible part of Delivery

Core
produc
Guarantee
s
t
the product. Quality and
design Packaging

Brand potential
Augmented
Inquiry Expected Respond Product
Time
 Fulfillment
 Two Handicaps in Fulfillment:
1. Time lag between placing an order and
receiving it.
2. Lack of familiarity with the actual
product, which has been purchased
remotely by mail, telephone, or on-line.
Order Expected Delivery
Time
 Traditional Fulfillment Standards
1. Orders should be shipped within 48-72 hours of
placement.
2. 85-90% of the products should be available in the
warehouse.
3. Customer refunds should be processed within 72
hours.
4. 90% of all telephone calls placed to the
organization should be received without a holding
delay.
5. Customers should receive a response to inquiries
within a week.
Copyright © 2010 Pearson Education, Inc.
Publishing as Prentice Hall.
 The Six Steps In
The Fulfillment Process

Customer
OFFER Response Processing Shipping Billing
Service
The Six Steps In
The Fulfillment Process
1. Offer
2. Response
3. Processing
4. Shipping
5. Billing
6. Customer Service
 Kob’s Eight Tips For Better
Customer Service
1. Conduct Customer Satisfaction Research.
2. Simplify Your Guarantee
3. Acknowledge Orders
4. Ship Merchandise More Promptly
1. Don’t Bill Before You Ship
2. Acknowledge Returns & Cancellations
5. Answer Correspondence Promptly
6. Make Complaint Resolution a Priority
7. Appoint Your Own Customer Affairs Manager
8. Make Customers Your Top Priority.
Fulfillment Options
1. In-House Fulfillment
2. Integrated Order Fulfillment
3. Outside Fulfillment Centers
4. On-Line Fulfillment

LET’S DISCUSS EACH ONE…

In-House Fulfillment
In-House Fulfillment
 Company handles
warehousing and order-
processing functions at
its own distribution center
In-House Fulfillment
 System automation
 New technology
 Well-trained staff
 Can create good customer service.
 The In-House Warehouse Process
Order is Package
Order Order Items moved to travels
Received Processed Picked at packing area to destination
Warehouse
via mail, and packed Point
checks
telephone, inventory Pickers merge second quality
fax, Third quality
levels the item the control checkpoint
Internet control
packing slip before boxing
Sending Checkpoint
and double
documents by supervisor
check Added catalog,
Packing slip gift boxes,
(products) protecting
Picking list material (foam -
efficient way to bubble wrap),
move in the and promotional
warehouse inserts.
Packing slip-
 a form or document that identifies the
products to be included with the order
Picking list-
 a list identifying each item on an order
list and serves as a routing guide to
move the picker efficiently through a
warehouse
Integrated Order Fulfillment
Integrated Order Fulfillment
 Based on the idea that the process of
building & delivering products should not
begin until after an order has been taken.
 Integrated Order Fulfillment
 Step 1. The direct marketer receives a customer's order via mail,
telephone, fax, or the Internet.
 Step 2. The direct marketer processes the order.
 This includes logging the order into the computer system and determining
whether any special promotions or discounts should be noted on the
customer's invoice.
 Step 3. Next, sourcing occurs.
 This is where the direct marketer determines where the individual products
or components needed to fill the order will come from.
 The primary choices are the company's own production lines or an outside
contract manufacturer.
 Step 4. Now it is time for the direct marketer to store the product.
 This is the brief holding of products or components in a warehouse until
their scheduled delivery or manufacture times.
 Integrated Order Fulfillment

 Step 5. The direct marketer assembles the product.

 Product assembly includes the gathering of parts in a central place
where they are put together to form the finished product.
 Step 6. Next, the direct marketer ships the product to
the customer.
 Step 7. The direct marketer tracks the distribution of
the product and fulfills any after-sale service needs.
 Step 8. Finally, the customer grades the company on
how well it performs the entire process on each individual
order.
 Integrated Order Fulfillment

Order Order store the assembles the

sourcing
Received Processed product. product.
via mail,
telephone,
fax, ships the
Internet product

customer
tracks the
grades the
distribution
company
Outside Fulfillment Centers
Outside Fulfillment Centers
 Direct Marketer out-
sources their fulfillment
operations to third-party
fulfillment centers or on-
line fulfillment providers.
 Advantages &
disadvantages exist.
 virtual enterprise.
 Outside Fulfillment Centers
 Advantages
1. More focus specifically on marketing and
sales activities
2. Outside fulfillment companies have state-of-
the-art fulfillment software
3. Lower financial risk.
 fulfillment costs considered as variable costs.
4. Marketer may receive equivalent fulfillment
services at a lower cost per order than the
in-house cost per order.
 Some realize that fulfillment capabilities are
outside their general core competencies.
On-Line Fulfillment
 On-Line Fulfillment
E-Fulfillment- the integration of people, processes, and
technology to ensure customer satisfaction before,
during & after the on-line buying experience

 By 2005 consumable items over the internet will

reach $119 billion

 E-Commerce organizations lack the needed focus &

emphasis on e-fulfillment
Virtual enterprise-
 a company that is primarily a marketing
and customer service entity, with actual
product development and distribution
handled by a broad network of
subcontractors
E-fulfillment-
 the integration of people, processes,
and technology to ensure customer
satisfaction before, during and after the
on-line buying experience
Delivery Options
 Dual Distribution or
“Multi-Channel Dist.”
 USPS
 First-Class Mail
 Periodicals
 Standard Mail
 Special Mail Services
 Alternative Delivery
Systems
Dual Distribution
Dual Distribution – (Multi-Channel distribution)

Refers to a marketer using two or more

competing channels of distribution to
reach (communicate) the same target
consumer.
Common Sources of Fulfillment Problems

1. Accuracy of the Order

2. Package Presentation
3. Speed of Delivery
4. Stock Availability
5. Return Processing
Ways To Avoid Fulfillment Problems

 Paying Attention to Packaging Slips

 Including a Toll-Free Number

 Hire a Well-Trained Customer Service Staff

 Establish Quality Control Measures

Customer Satisfaction Defined

 The extent to which a firm fulfills a

consumer’s needs, desires, and
expectations
Importance of Customer Service

 Customer Service Level- how rapidly &

dependably a firm can deliver what the
customers want

* Customers don’t care about what happens behind the

scenes.
Customer Relationship Management
(CRM)
CRM- a business strategy to select & manage
customers to optimize value.

 Main purpose: to build and maintain better

customer relationships
 CRM is “the big picture”
 Customer relationship management
(CRM)-
 is a business strategy designed to select and manage
Customers to maximize customer value.
 To achieve good CRM you need:
1. Customer-centric business philosophy
2. Culture to support effective marketing services
 Happy Employee = Happy Customer ???
 Works if other factors considered.
 Developing and implementing business strategies and
supporting technologies that close the gaps between an
organization's current and potential performance in
customer acquisition, growth, and retention.
 Customer Long-Term Relationship
 Focus on customer retention & customer value
orientation
 Loyalty = Trust + Commitment + Satisfaction
 Qualified trustworthy customer service &
Commitment.
 Commitment = Time + Effort + Money
 Continuous customer contact and 2way
interactivity.
 System automation + New technology + Well-trained staff
The CRM Components
1. Marketing Research
2. Prospecting
3. The Offer
4. Order Processing *
5. Customer Satisfaction*
6. On-going
Communication*
* a part of fulfillment!!
How To Determine
The CRM Needs
 Pretending to be Customers
- file complaints to the organization
under fictitious name
 (Mystery shoppers)
 Surveys
 periodic follow up surveys
 should only be a few questions
 Tips Keeping Customers Happy*

1. Remember: the customer is always right

2. Don’t promise something you cannot deliver
3. Inform customers how to return products
4. Inform customers about how to complain
5. Test your own service
6. Date and record all customer correspondence
7. Investigate competitors’ offerings regularly
8. Exercise care in billing and collection
*Stanley J. Fenvessy, Direct Marketing Manual

Copyright © 2010 Pearson Education, Inc.

Publishing as Prentice Hall.
Call Centers
 A call center is a dedicated team supported
by various telephone technological resources
to provide responses to customer inquires
 Telemarketing activities can be carried out via
call centers in a variety of ways:
 Within the company (in-house)
 Outside of the company (calls are made by a teleservice
outsourcing firm)
 a combination of both methods

Copyright © 2010 Pearson Education, Inc.

Publishing as Prentice Hall.
In-House
Call Centers
 Advantage-the degree of control the
company has over the telemarketing
operations
 Disadvantage-time and expense of
training the telemarketers and large
financial burden
 “Call-abandonment” is the number of
callers that hang-up before being serviced
by a telephone sales representative
Copyright © 2010 Pearson Education, Inc.
Publishing as Prentice Hall.
 Outside
Call Centers

 Advantages  Disadvantages
 Low initial investment  Lack of direct control

 Fixed operating costs  Lack of direct security

 Quick start up  Lack of employee loyalty

 Time Flexibility  Mass-market approach

Copyright © 2010 Pearson Education, Inc.

Publishing as Prentice Hall.