University Services and Relationship Marketing Report: Woolworths

This report offers a comprehensive analysis of Woolworths' service and relationship marketing strategies. It begins by presenting Woolworths as a service blueprint, outlining the processes from product origin to customer purchase. The report delves into the front-stage and back-stage functions, examining customer interactions and behind-the-scenes operations. It explores the concept of 'moments of truth,' highlighting factors influencing customer satisfaction and dissatisfaction, including product quality and service delivery. The report also discusses service quality measurement and service recovery strategies, providing insights into how Woolworths manages customer experiences and addresses issues. Overall, the report provides a detailed examination of Woolworths' approach to service and relationship marketing, offering valuable insights into its operational and customer-centric strategies.

0SERVICES AND RELATIONSHIP MARKETING
Services and Relationship Marketing
Name of the Student
Name of University
Author Name

1SERVICES AND RELATIONSHIP MARKETING
Executive Summary
This report deals with Woolworths, which is a supermarket in Australia. Firstly the
organization’s blue print has been discussed. The blue print here emphasizes on the process chart
of how a product travels from the manufacturer to the customer and what role Woolworths plays
in it. Then the front stage and back stage functions of the supermarket have also been discussed
in detail which deals with the face to face interactions between customers and service delivery
agents at Woolworths. Also the report deals with the various moments of truth which take place
in a service organization which is how the sales persons in the organization influences the
mindset of a customer and looks into the things which lead to customer satisfaction or
dissatisfaction. Service quality measurement and service recovery strategy have also been
discussed in the report.

2SERVICES AND RELATIONSHIP MARKETING
Table of Contents
Introduction..........................................................................................................................3
Presenting Woolworths as a blueprint.................................................................................3
Front stage and back stage functions...................................................................................5
‘Moments of Truth’.............................................................................................................6
Determinants of customer satisfaction and dissatisfaction..................................................8
Service quality measurement...............................................................................................9
Service-Recovery and Strategy Plan for Woolworths.......................................................10
Conclusion.........................................................................................................................11
References..........................................................................................................................13

3SERVICES AND RELATIONSHIP MARKETING
Introduction
A Service Organization is a company which mainly aims to get profit from the goods and
services they provide to customers. For this report Woolworths Supermarkets has been chosen.
Woolworths is an Australian grocery store or supermarket chain which is owned by Woolworths
Limited. Alongside Coles, Woolworths forms almost a duopoly in the Australian supermarket
section.
They specialize in mostly selling groceries (packaged foods, fruit, meat and vegetables)
however; they also indulge in selling stationery items, magazines and DVDs (Keith 2012).
Woolworths presently has 1000 stores spread across Australia with 968 supermarkets and 19
stores for convenience. The company was first started in September 1924. Now every company
has a service blueprint and Woolworths is no different. The blueprint shows the input processes
and outputs. Then there are the front and back stage function which focus on the face to face
interactions between sales person and customer and also looks into the communication which is
not direct.
Presenting Woolworths as a blueprint
A supermarket essentially is a business enterprise which provides goods and services. It
actually does not produce a physical product in such sense. Woolworths too adds value by taking
in products from suppliers who are remotely based (Arli et al. 2013). They then assemble them in
regional warehouses, and then distribute them to their franchises. The process ends with the
selling of the products to the customers.

4SERVICES AND RELATIONSHIP MARKETING
A simple way to put it is that a service blueprint is a process chart which comprises
inputs, processes and outputs.
Inputs (raw materials) → Process (transformation) → Outputs (finished goods) →
Customers.
As in case of Woolworths and other service blueprints too it is always made from a
customer’s perspective. The blueprint actually identifies: Customer Actions- which are basically
the steps which customers take in the service delivery process. Like in Woolworths the customer
buys the product from the store which he uses in everyday life (Berning 2014). Secondly there
are the front-stage actions which are the steps taken by employees for face to face encounters
while providing service. Like a sales employee coming and suggesting the customer as to what
product to pick and why.
Then there are backstage actions. These are steps which are non visible usually taken by
employees. For example taking an order by phone or customizing an order list via call. There are
also support processes which are taken care of by not contact employees, but their actions are
always needed to have the services delivered in time. In Woolworths bringing in goods from
storehouses require a lot of personal, these types of workers help in the support processes
(Calabrese and Corbò 2015).
Physical evidence also plays an important role in the service blueprints of Woolworths.
Woolworths are very particular about these and keep uniforms of staffs, service delivery vans
clean and proper. These are usually the tangible elements in the service delivery processes which
can change the perception of a customer about the brand chain and therefore special emphasis
needs to be given to it always (Post and van der Meer 2015). There also needs to be a line of

5SERVICES AND RELATIONSHIP MARKETING
visibility clearly separating back stage and front stage actions. Now this line of visibility can be
further divided into line of interaction which divides service provider’s actions from that of
customer actions.
Then there is also the line of internal interaction which serves as a separating line
between front office and the back office. The line of implementation comes next which usually
separates the support zone and the management zone.
Front stage and back stage functions
In modern day businesses the interaction between customers and sellers are also a part of
commerce. Communication between the customer and the business will always take place
irrespective of the goods and services provided by the store (FISK 2013). This report also looks
at the processes with regards to Woolworths. This is a supermarket chain basically based in
Australia. In general it offers everyday products and services to local consumers. To discuss the
organization further with more depth an account of both front and back stage functions will be
made.
Firstly, the front stage deals with the interactions between the employees at Woolworths
and the customers visiting the various centers all around Australia. It starts off actually when a
customer enters the supermarket. He or she will in all probability have a list of items written or
in the mind the ones that he is suppose to pick (Radnor, Osborne, Kinder and Mutton 2014). He
starts off by picking one or two items but more often than not a customer needs the salespersons
in the shop to help them pick the right product. This is where the interaction starts. The employee
tells the customer about the whereabouts of a certain product and then helps him choose a few
from a variety of the same. Suppose the customer needs apple cider vinegar from the store. The

6SERVICES AND RELATIONSHIP MARKETING
sales person asks him as to why does he need it for? He says, that he will have it to reduce
weight. Now not all apple cider vinegars can reduce weight therefore the employee helps him
pick the right mother vinegar. The employee not only sells the product but also aids in retention
of the customer. Sometimes employees also suggest as to what a customer might be forgetting by
looking at the items he has picked in the basket. Also conversing and helping out the customer
while the billing process is underway also falls under front stage behavior.
The backstage functions are just the opposite. Here the employee and the consumer does
not meet face to face but talk via phone or some online medium. These too are important
functions as it caters to complaints and queries of the customers. In supermarkets like
Woolworths there are always offers that are given to customers and these are ever changing.
A customer can call up one particular store and ask what the offers are for the day, the
employee across the phone has to answer them properly and correctly. If he fails to do that there
are always fears that the store can lose that particular customer (Reason, Løvlie and Flu 2015).
Also, the employees over the phone need to address grievances too. Suppose if a customer has
brought a particular product and he wants it replaced because of a defect, the employee has to
offer him a solution as to how and when he can visit the store and get the job done. Back stage
functions also include the online services provided by employees for customers who want to use
the web to shop. This is also a kind of interaction but a veiled one.
‘Moments of Truth’
Every business including Woolworths knows that in order to sustain itself it needs to get
into the minds of the customers. Price seemed to be once the determining factor for this but it is
quite inadequate too as there is a limit up to which a supermarket can cut back its prices. Product

7SERVICES AND RELATIONSHIP MARKETING
differentiation too does not work anymore to attract customers since almost identical products
are available elsewhere in the market (Yagil and Medler-Liraz 2013). Therefore businesses have
realized that the only way to remain in the mind of the customer is with service differences.
A moment of truth occurs usually when the customer comes in contact with the
organization in such a manner which gives the customer the opportunity to change his mind set
about the organization. Such a moment of truth can occur via the products that Woolworths are
offering or the service they are dishing out through their staffs or it can be a combination of both.
Instances such as greeting the consumer, promotion of special offers or discounts, handling
customer queries and complaints or giving discounts and closing a sale are all related to
moments of truth.
The moments of truths are therefore a top priority in a supermarket like Woolworths. In
today’s world which is increasingly becoming service driven with a lot of service providers for
each type of product moments of truth have the prime facts that businesses need to keep in mind
always.
In moments of truth there are always moments of magic or moment of misery. Moments
of Magic are the favorable moments of truth (Schuh 2012). These are times when a customer is
served in such a manner that it exceeds the expectations. For example, Woolworths is giving
away special discount to a customer choosing him as lucky 100th for the day. A moment of magic
however; does not mean it has to be extravagant. Even timely and efficient service given by the
employees in Woolworths can create a moment of magic for consumers.
Then there are moments of miseries. These are particular instances where the customer
interaction has resulted in a negative outcome. For example, If a customer has found shop

8SERVICES AND RELATIONSHIP MARKETING
assistants to be inattentive in Woolworths. These lapses can never be fully avoided but if such
lapses are handled well then these moments of miseries and turn into moments of magic quite
quickly for the consumers.
Determinants of customer satisfaction and dissatisfaction
There is more to customer satisfactions than only customer service. Even the most
pleasant of exchanges with a shop assistant can never make up for bad or faulty products. It is
often said that a customer is always right and businesses should always keep in mind this fact
(Klaus and Maklan 2013). Satisfying customers might be the toughest job in the world but then
also supermarkets like Woolworths are able to secure loyalty of customers which takes more free
gifts and discount coupons. First of all it is about quality of a product. If Woolworths sells a
lousy product no amount of aggressive PR or marketing strategies can save it. The product will
always create dissatisfaction among consumers.
Separation anxiety is another determining factor for customer choices. In any
supermarket chain there are a wide variety of same products in different packages. Suppose there
is a detergent in Woolworths that a customer wants to buy and there customer service suggesting
something else might not work at all (Qiu 2013). It might cause dissatisfaction among the
customer therefore the shop assistants should not push sale another product when a customer
wants to buy a certain kind.
Also with the technological advancements customers nowadays want everything on the
internet. If there are no websites or information about a particular store then the management will
have a tough time running it successfully. Woolworths have successfully created a website which
helps customers choose the products they want to buy, or they can easily see the discounts that

9SERVICES AND RELATIONSHIP MARKETING
are being offered in the shop. Customers are satisfied when they find that a particular product is
available and they find the price tag attached with it too.
The atmosphere of a supermarket also is an influential factor for customer satisfaction. If
the products are arranged in such a way that the customers cannot find what they need, this can
lead to dissatisfaction (Rawson, Duncan and Jones 2013). Woolworths, however, have all their
counters well arranged with shop assistants readily helping out customers to get their desired
products.
Then there is also the responsibility of a supermarket like Woolworths to tell the truth
about the products and services it offers. Hiding figures, facts and having excessive small prints
don’t help in customer satisfactions at all. They might buy the wrong product if they do not know
what its usage is like. If a company hassles the customers while exchanges or refunds it might
too go against them (Jahanshani 2014). If something is wrong with the product and the seller
takes responsibility then it impresses the customer and he might come back to make purchases
again.
The organization also should always look to retain its old customers. When a company
like Woolworths keeps a customer it is more profitable than finding some one new. These might
be done giving old customers discount coupons which new customers would not get. This also
helps in keeping the customer business relationship intact and aids in customer satisfaction.
Service quality measurement
Researchers have always struggled to find effective ways of measuring quality of
services. The most used measure is based on set of five principles which have been voted by
customers as the most important for service quality.

10SERVICES AND RELATIONSHIP MARKETING
First of all it concerns tangibles which are the physical appearances of facilities,
personnel, equipment, facilities and communication materials. Customers usually remain
unsatisfied with the above mentioned things if they are out of order and do not cater to their
needs (Orel and Kara 2014). For a brand like Woolworths things always have to be in order, any
commotion can lead to customer dissatisfaction.
Then it is measured through reliability, which the ability of an organization like
Woolworths to perform and deliver services accurately.
The other criteria for judgment are responsiveness of the supermarket to attend to
customer needs, willingness to help them and provide quick and fast service. Then there is
Assurance from the employees and their ability to impart confidence and trust on customers
(Urban 2013). Empathy is also o e of the service qualities with which an organization gives
individualized attention to its customers. Woolworths does the same by having shopping
assistants who help the customers choose the right products by giving them individual attention.
These are the five dimensions which are utilized to measure service quality which the gap
between what the customers expects for excellence and their actual perception of the service that
is rendered. This instrument over a period of time helps businesses who provides service
understand customer expectations and the areas that need improvements (Kitapci 2013)
utilization of this leads to businesses developing their services in many ways.
Service-Recovery and Strategy Plan for Woolworths
Service Recovery is a way of converting a previously dissatisfied customer to a one who
is loyal to the store and services. Now supermarket brands like Woolworths need to retain
customers in order for the business to flourish. A loss of a customer will be an addition of one to

11SERVICES AND RELATIONSHIP MARKETING
one of their rivals. This is an action which the business takes in responding to a failure in service.
These are not addressed when the customer complains but these are usually looked into before
the dissatisfied customer checks out from the store. A good service recovery helps in having a
positive impact on recommendation intention, satisfaction, loyalty, image, trust and word of
mouth (Mostafa, Lages and Sääksjärvi 2014). Suppose there is a certain product like a frozen
meat product that a customer has added to their basket in Woolworths and it is found that
product has crossed the expiry date. Without the customer knowing it, the person at the billing
can change the product by getting one from the fresh stock.
Another problem can be with a customer picking a product with defect. If the shopping
assistant knows about it or finds it while checking the products of the customers he should
immediately change it instead for the customer asking him to do so. Sometimes manual entrees
in the systems for generating bills can cause errors. The person at the service counter can find out
where it is incorrect and save the customer from paying more (Zhou 2013). Also if a person has
bought a couple of products which the shop assistant things he might have added the other one
by mistake, he can highlight the fact and help him save more money. These things give immense
satisfaction to customers. Some people even argue that great recovery strategies can increase
customer satisfaction to a bigger level than if nothing had gone awry in the first place. This is
known as service recovery paradox.
Conclusion
The above stated strategies and determinants help discuss the issues with Woolworths
and address them providing solutions for each. Woolworths is one of the biggest supermarket
chains and they put in every effort to see that they do not lose customers. They cater to the needs