Implementing Strategies to Enhance Customer Satisfaction in the UK Grocery Market Industry, a Case Study on Lidl

CORPORATE STRATEGY
AND GOVERNANCE
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Table of Contents
INTRODUCTION...........................................................................................................................3
Title..............................................................................................................................................3
Overview of the industry and organization.................................................................................3
Problem faced by the organization..............................................................................................3
Aim of the study..........................................................................................................................4
Research Objectives.....................................................................................................................4
Research Question.......................................................................................................................4
LITERATURE REVIEW................................................................................................................4
Enhance customer satisfaction.....................................................................................................4
Impact of customer satisfaction on sales.....................................................................................6
Summary......................................................................................................................................6
METHODOLOGY..........................................................................................................................7
Research technique......................................................................................................................7
Data collection.............................................................................................................................7
Data analysis................................................................................................................................7
Sampling......................................................................................................................................8
Research Approach......................................................................................................................8
DATA ANALYSIS.........................................................................................................................9
DISCUSSION................................................................................................................................23
RECOMMENDATION.................................................................................................................24
ACTION PLAN.............................................................................................................................26
SUMMARY AND CONCLUSION..............................................................................................27
REFERENCES..............................................................................................................................29
Appendix........................................................................................................................................31
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INTRODUCTION
Title
The main title of this study is: Implementing Strategies to Enhance Customer Satisfaction
in the UK Grocery Market Industry, a Case Study on Lidl
Overview of the industry and organization
Retail sector of UK is continuously enhancing and expanding. Over past few years various
changes have been brought within this industry as per the changing requirements of the
customers. These changes have been majorly brought because of changing shopping habits of
customers. Another reason because of which these changes have been brought within this
industry is because of increasing competition (Tandon, Kiran and Sah, 2018). There are various
large super markets that compete with each other in UK who have tough competition with each
other. Tesco, Sainsbury, Asda etc. are few of the top supermarkets of UK who have tough
competition with each other and compete with each other for both enhancing customer base and
increase their market share within this industry. Lidl Stiftung & Co. KG also known as Lidl is a
German global super market chain that was founded in 1930 whose headquarters is in Germany.
It is basically a German food retail organization who operates mainly in United states and
European countries. It has more than 10,000 stores in approximately 28 plus European countries
and in United States as well. Other than this they have more than 22,000 employees working for
them. In UK market they entered in 1994 and specifically in UK they have more than 22,000
employees working for them and have approximately 750 stores. They are one of the top most
leading super market food retail chain present in Europe. This is mainly because they majorly
focus on providing high quality products to their customers in as lowest possible price.
Problem faced by the organization
According to the below graph sales percentage of Lidl has been continuously decreasing
according to the below statistics in past 2 years. From January 2018 sales of Lidl is decreasing
constantly (Swaffield, Evans and Welch, 2018). There are various reasons because of which Lidl
is facing this issue. One of the main reasons because of which this issue is being faced by Lidl is
decreasing customer Satisfaction because of poor customer service. Many customers of Lidl are
focusing on switching to other brand even through quality of products of Lidl is high and they
offer it in a quite low price but still customer satisfaction level of Lidl is getting affected and
main reason of this issue is poor customer service which is provided to their customers.
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Figure 1 Change of Sales percentage at Lidl in UK
(Source: Sales percentage of Lidl in UK. 2019)
Aim of the study
Main aim of this study is “To explore the perspectives of implementing the strategies that
will enhance the customer satisfaction and improve upon the overall sales of Lidl”.
Research Objectives
Main research objectives of this study are:
 To identify how the customer satisfaction can be enhanced in Lidl.
 To investigate the impact of customer satisfaction on sales.
 To recommend areas for future research.
Research Question
Main research question of this study is: “How can Lidl enhance it customer satisfaction?”
LITERATURE REVIEW
Enhance customer satisfaction
According to the view of Iglesias, Markovic and Rialp, (2019) Customer satisfaction is one
of the most important factors which is required by the organizations to focus on as it can impact
their business in many different ways. There are various factors because of which customer
satisfaction of an organization is affected but some of the main factors that can impact
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satisfaction level of customers majorly are poor quality of products, high process of the products,
poor service which is provided to customers and many more. Organizations should make it their
first and foremost priority to enhance their customers satisfaction level. As the customer enters
their store or super market they should focus on ways to build or strengthen their relationship
between them and their customers. It can help organizations especially retail sector organization
not only to enhance their sales but can also help them to gain competitive advantage and increase
their market share in the current market in which they operate. Iglesias, Markovic and Rialp,
(2019) further elaborates that customer satisfaction can only be enhanced by providing them with
excellent products within their desired price range, providing them with excellent service and
fulfilling needs, requirements and desires of their customers. There are many more ways to
improve customer satisfaction Level such as: focusing on building customer centric culture
within an organization where customers are given first priority and most of the decisions taken
by the organizations are based on customer’s choice. Another way to improve satisfaction level
of customers is by providing them with personalized customer service by focusing on improving
customer engagement strategy. This can help retail sector organizations to improve their
operational strategy as well.
As per the view of Otto, Szymanski and Varadarajan, (2019) In order to improve
satisfaction level of customers it is important for organizations like Lidl to understand customer
satisfaction in a detailed manner because Lidl is a retail sector global super market whose annual
sales and profit indirectly depends upon customer satisfaction level. Otto, Szymanski and
Varadarajan, (2019) further explains that there are many theories that can help an organization to
understand customer behaviour and ways in which their behaviour affects their shopping
experience and satisfaction level. One of the most commonly used theory that can be used to
explain customer satisfaction is expectancy-value concept. This, expectancy-value theory helps
in explain an individual’s attitude towards various objects and actions. As per this theory,
expectancy represents idea that most of the individuals do not choose to do a task where they fail
or when they fail. Value represents different reasons or beliefs that an individual has to get
engaged in a task. So according to this theory customers might only buy a product if they find it
fruitful and beneficial and if they think that buying or using this product will have positive
outcome on them. Their beliefs regarding the product or services helps them to get engaged with
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the product. this theory helps in explaining customers attitude towards buying a product and
reasons that can affect their decision making for buying a product.
Impact of customer satisfaction on sales
As per the view of Garton, Murphy and O’Halloran, (2016) satisfaction of customers
directly/indirectly affects the overall sales of a product or service. Lower customer satisfaction
level can affect overall sales of products or services of an organization which can impact their
sales and product of an organization. Organizations are required to bring changes within their
strategies that they use for sales of their products or services that they provide to their customers
as it can affect overall sales of that organization. Other than these strategies especially retail
sector organizations should focus on building strategies that can help them to retain their
customers by enhancing their satisfaction level. This is majorly because higher satisfaction level
means higher customer retaining rate and higher sales of products. Garton, Murphy and
O’Halloran, (2016) further elaborates that retaining customers can also help the organization to
lower their cost of new customers. Many times, due to continuously decreasing customer
satisfaction organizations have to suffer loss or decrease in overall sales or profit. Debenhams
sales hit by changing the shopping habit of customer in marketplace. As per theory, it has found
that supply chain increasing and excluding sales at store open for less than years. In this way, it
also responding to the shopping habit with customer, those who are spending more of disposable.
As elaborated by Wang, Lu and Tan, (2018) explained that, there are many ways through
which organizations can increase their customer satisfaction level in order to decrease its
negative impact on sales of an organization. One of the mast basic way through which
satisfaction level of an organization’s customers can be increased or enhanced is by enhancing
their customer experience level. Lidl is facing lower customer satisfaction level which is
affecting their overall sales and one of the major reasons because of which they are facing this
issue is because of poor customer service. Wang, Lu and Tan, (2018) further explains that Lidl
offers excellent product quality, offers products in lowest possible price but the only factor
which they failed to fulfil or provide it to customers is proper and excellent service. Only
because of poor customer service, Lidl’s customer satisfaction level was decreasing which was
directly/indirectly affecting their overall sales.
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Summary
From the above literature review it is clear that customer satisfaction is one of the most
important factors which is required to be focused on especially for retail sector organizations as
for these organizations satisfaction level of customers can affect their sales and overall profit in
many ways. It has also been identified that there are many factors that can affect expectation
level of their customers. By fulfilling desires, requirements, expectations of customers
organizations can enhance their customers satisfaction and expectation level. This chosen topic
will help the retail sector organizations to understand the ways in which customer satisfaction
impact overall sales of an organization. Main gap in this literature review is that this does not
helps in addressing ways in which gaps in service quality can be fulfilled and customers
expectation level can be reached.
METHODOLOGY
Research technique
There are two main types of research techniques: qualitative and quantitative. In qualitative
technique non-numerical data is used where as in quantitative technique numerical data is used
for analysis. Qualitative research method is a term that uses for existing theoretical approach for
further case study expansion. It is the most suitable method for collecting and gathering large
number of data related case study.
On the other hand, quantitative method is based on the mathematical concepts that help for
identifying the accurate result or outcome.
For this research quantitative technique has been used as it is quite simpler and easy to
define, use and identify. It has justified that quantitative method provide better finding result and
useful for analysing research problem effectively.
Data collection
In this study both primary and secondary research has been done. For secondary research
data will be collected from books, journals, online portals, articles, case studies related to
problem, organization’s annual report (Haar, Staniland and McGhee, 2018). Most of the
secondary research data is available freely on various kinds of online and offline sources.
Secondary data has helped the researcher to build a base for this research study and has also
helped in enhancing knowledge about the current study in a much-detailed manner. Primary
research data has been collected by the researcher from customers of Lidl. All the primary data
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has been collected with the help of a survey that consisted of closed end questions. These closed
ended survey questions helped the researcher to collected all quantitative and numerical values
for statistical analysis.
Data analysis
There are two types of data analysis: thematic and statistical data analysis. Thematic data
analysis is done in qualitative research study whereas statistical data analysis is done in
quantitative research study (Kebritchi, McCaslin and Rominger, 2019). As it is a quantitative
research study in which all the data has been collected with the help of observations, in-depth
exploration of things and ways in which things happened. All the primary data collected has been
analysed with the help of statistical method using various kinds of mathematical methods as
well.
For this quantitative data analysis SPSS tool has been used. SPSS is one of the most
commonly used tool that helps researchers to analyse complex statistical data as well.
Sampling
For this research study probability sampling technique has been used because in
probability sampling all the members of the population has a known chance of participating in
the study (Elman, Gerring and Mahoney, 2016). In probability sampling all the respondents has
been chosen or selected randomly with the help of simple random sampling method. Sample
chosen for this study is customers of Lidl organizations and sample size of this study is 30
customers. Chosen respondents of the study has been asked to participate in a survey that consist
of closed ended questions. It has justified that simple random sampling method is reliable in
terms of cost and time. in this way, researcher has used in the members selections.
Research Approach
There are two main types of research approaches: inductive and deductive research
approach (Gray, Grove and Sutherland, 2016). Deductive research approach uses hypothesis in
order to confirm or reject research process whereas in inductive approach aim, objectives and
research questions are formed that are required to be achieved during the research process. For
this research study inductive approach has been used as in this generation of new theory has been
done based on data collected.
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