Services Marketing Report: Customer Satisfaction at Coles Supermarket

This report examines the services marketing strategies of Coles Supermarket in Australia, focusing on service failures and customer satisfaction. It begins with an introduction and a service process map to illustrate the company's operations. The analysis section delves into the issues Coles has faced, such as product shortages, poor online service, and substandard product quality, which led to customer dissatisfaction and a decline in sales. The report then applies service quality and customer satisfaction theories, including the ACSI model, contrast theory, and SERVQUAL, to understand the underlying issues. Recommendations are provided to improve service quality, including conducting market research, employee training, setting service standards, and enhancing product variety. A service recovery strategy is also suggested to regain customer trust and loyalty. The conclusion summarizes the key findings and emphasizes the importance of service quality in maintaining a competitive edge. References to relevant literature are included to support the analysis and recommendations.

Running head: SERVICES MARKETING
Services marketing
Name of student
Name of University
Author note
Table of Contents

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Introduction......................................................................................................................................3
Service process map........................................................................................................................3
Analysis...........................................................................................................................................4
Service quality and customer satisfaction theories..........................................................................5
Recommendations and service recovery strategy............................................................................7
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

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Introduction
The report is prepared to focus on the different aspects of the services marketing
concerning the business organisation Coles Supermarket in Australia. The topic will illustrate the
various service processes and present those in map for ensuring proper business functioning. The
company has been facing issues related to the delivery of services, which has deteriorated the
company’s reputation and resulted in decline of sales. The service failure is one of the major
causes leading to customer dissatisfaction and even due to the poor quality services and products
delivered (Coles.com.au 2018). To improve the consumers’ experience and promote better
loyalty of customers, a service process map has been created and suitable recommendations have
been provided too for overcoming the service failures with ease.

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Service process map
Analysis
Coles Supermarkets Australia Pty Ltd is one of the supermarket, retail and consumer
services chain located in Australia, which has its headquarters in Melbourne and is considered as
a subsidiary of Westfarmers. The company sells mainly food products, fruits and vegetables
along with household items, health and beauty products, etc. The topic highlights the importance
of maintaining quality in term of services delivered and satisfaction of the customers. The
company presently faced several service related issues, which resulted in failure to satisfy the
customers and maintenance of good quality for the products and services. This could not only
enhance the purchasing behaviors of the consumers but would also create a sense of trust and
loyalty among the customers (Wilson et al. 2016). One of the major service delivery failures was
DeliverbettervalueEnhancingthequalityofproductsandservicesIntoducingnewstorestomakewiderangeofnewproductsavailableManageproperavailabilityColes’ services
and quality
management
for customer
satisfaction

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the cutting down of wide variety of products and services at Coles. The wide range of products
was reduced to 15 percent for the independent retailers, which created risks of delisting for the
suppliers. According to various articles and news, it was found that Coles had been criticized
largely for failing to deliver the right kinds of services online. The customers pt their complaints
on the social networking websites stating that several major products were found missing from
the company’s online shopping website from the Christmas delivery orders (Adil, Al Ghaswyneh
and Albkour 2013).
Few products that were not present included the Christmas hams and turkeys and the
products were below the quality standards too. Due to the substandard products and services
delivered, the customers were not satisfied at all and this even damaged the reputation of the
company largely, furthermore declining the sales and profit level for Coles. The company was
found to sell chicken portions as substitutes to roasted hams and passion fruit for pavlova. Other
services’ delivery failures included lack of timely delivery, i.e., the products purchased online
were not delivered within the expected time and no messages or calls were forwarded to the
customers regarding the late services’ delivery as well. Thus, the poor quality, untimely delivery
and lesser number of products found on the online shopping website added to the services’
failure for Coles Supermarket in Australia (Fisk, Grove and John 2013). Orders were placed
though within few days only, the products were not delivered and the key elements of the orders
were out of stock. The customers’ services were not good enough to gain the trust and loyalty of
the customers, which further created negative mindset among the customers.

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Service quality and customer satisfaction theories
ACSI model is used to assess the various factors and to check whether the expectations of
the customers can meet the anticipated level of quality that has been expected from the
organisation. The model is used for identifying the expectations of the consumers and how it has
impacted directly on the level of satisfaction of the customers. The perceived quality if the
measurement of service related interactions made by the customers with the organization. The
perceived value means whether the products delivered by Coles have met the quality standards or
not and whether the prices paid for the products are appropriate or not (Aghaei et al. 2014). The
customers provide complaints because they are not satisfied with the kinds of products and
services delivered by the company and thus the customer satisfaction is negatively related to the
complaints made by the consumers.
The contrast theory is another customer satisfaction theory, which presents that
dissatisfaction of customer tends to arise when the overall performance of the product falls
behind the expectations of the customers. This makes the customers overstate the disparity and
dissatisfaction for the services delivery and the company has suffered due to that (Nasution et al.
2014). The theory also stated that the performances of the products below the expectations
should be rated as poor services’ quality. Thus, the contrast theory assumed that when the
outcomes do not match the actual expectations, then there would be a bad experience for the
customers, just as it happened with the Coles’ customers. This would further result n poor
product evaluation and the positive feedbacks, opinions regarding the products would make it
praised by everyone, and the company could gain a positive brand image too (Wirtz and
Lovelock 2016).

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The SERVQUAL or Service quality theory is used to assess the perceptions of the
customers regarding the quality of services within the retail sector. The theory divides the service
quality into five major components including the tangibles, reliability, responsiveness, assurance
and empathy. The tangibles include the physical facilities, appearances of staffs and equipments
used for the production of products and services. The reliability of the service quality represents
the quality of service and whether it can perform appropriately or not. The responsiveness is also
considered as a major factor, because it makes the company respond to the needs and changing
demands of customers and Coles has failed to do so (McGuire 2012). There was lack of
confidence among the staffs to, because of which, the products were not delivered to the
customers timely, which further created dissatisfaction among them. This theory also compares
the expectations of service quality of the customers and their perceptions regarding the product
or service delivered. When the perception of the customers is positive, then it could mean that
the customers are satisfied and they would make purchases from the company consistently
(Coles.com.au 2018).
Recommendations and service recovery strategy
The improvement of Service quality is one of the major aspects for gaining a competitive
edge over its competitors in business. Coles Supermarket is recommended to conduct market
researches for identifying the needs and requirements of the customers and enhance the level of
interaction between the top level management and the customers. This would facilitate the
communication process as well as develop positive relationships among them, furthermore
ensure trust and loyalty among the customers. The employees should be provided with proper
training and developmental sessions for making them achieve the relevant skills, knowledge and
expertise to perform to their potential. Service goals and standards should be set as well for

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making the top management level committed to the improvement of quality of services and
ensure customer satisfaction (Anitsal, Girard and Anitsal 2012). The products’ qualities were
also not up to the mark, there was eve lack of wide variety of products, which left the customers
unsatisfied, and this deteriorated the brand name and image.
It is also recommended to enhance the willingness and interest among the workers by
performing to their potential and enhance the profit level for the company. Their needs and
requirements should be taken care of and they must know about the time management properly
to promote effective teamwork and reduce the chances of conflicts, which might deteriorate the
services’ quality. It is also recommended to create a sustainable culture for contributing to the
excellence of services and allow the customers to regain the trust on the company (Al-Dmour,
Zu'bi and Kakeesh 2013). It was also found that the young customers are more dissatisfied with
the kinds of services delivered than the other customers, so Coles should put efforts to serve
them firstly. The customers should be divided into different market segments based on the needs
and requirements of services, furthermore would allow the company to respond to the changes in
each of these market segments with ease and effectiveness. To overcome the issue regarding lack
of product variety, Coles must innovate its products and make the basic products available to
make sure that the needs and requirements of the customer were fulfilled (Amin et al. 2013).
Conclusion
The report was prepared to focus on the services marketing considering the case study of
the business organisation named Coles Supermarket in Australia. The company was facing
several issues regarding the quality of services delivered and dissatisfaction among the
customers. Due to this, the customers made complaints regarding the poor quality of services and

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this even deteriorated the brand image and name, furthermore resulted in sales decline and lesser
profit level achieved. The service process map showed how Coles could enhance the customers
services and maintain consistency in the quality of services for promoting customer satisfaction.
The contrast theory and SERVQUAL theory could be used to understand how the expectations
of the customers could be met through delivery of better quality services. Few recommendations
for overcoming these issues were also provided, which could help in maintaining trust and
loyalty among the customers, furthermore make the company gain competitive advantage in
business.
References
Adil, M., Al Ghaswyneh, O.F.M. and Albkour, A.M., 2013. SERVQUAL and SERVPERF: A
review of measures in services marketing research. Global Journal of Management And Business
Research.
Aghaei, M., Vahedi, E., Kahreh, M.S. and Pirooz, M., 2014. An examination of the relationship
between services marketing mix and brand equity dimensions. Procedia-Social and Behavioral
Sciences, 109, pp.865-869.

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Al-Dmour, H., Zu'bi, M.F. and Kakeesh, D., 2013. The effect of services marketing mix
elements on customer-based brand equity: An empirical study on mobile telecom service
recipients in Jordan. International Journal of Business and Management, 8(11), p.13.
Amin, M., Yahya, Z., Ismayatim, W.F.A., Nasharuddin, S.Z. and Kassim, E., 2013. Service
quality dimension and customer satisfaction: An empirical study in the Malaysian hotel
industry. Services Marketing Quarterly, 34(2), pp.115-125.
Anitsal, I., Girard, T. and Anitsal, M.M., 2012. An Application of Services Marketing Mix
Framework: How do Retailers Communicate Information on Their Sales Receipts?,„. Business
Studies Journal, 4(2), pp.77-90.
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction.
Pearson Education.
Coles.com.au. (2018). Coles Supermarkets. [online] Available at: https://www.coles.com.au/
[Accessed 31 Jan. 2018].
Fisk, R.P., Grove, S.J. and John, J., 2013. Services marketing interactive approach. Cengage
Learning.
McGuire, L., 2012. Slippery Concepts in Context: Relationship Marketing and Public
Services. Public Management Review, 14(4), pp.541-555.
Nasution, R.A., Sembada, A.Y., Miliani, L., Resti, N.D. and Prawono, D.A., 2014. The customer
experience framework as baseline for strategy and implementation in services
marketing. Procedia-Social and Behavioral Sciences, 148, pp.254-261.

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Wilson, A., Zeithaml, V., Bitner, M.J. and Gremler, D., 2016. Services marketing: Integrating
customer focus across the firm. McGraw Hill.
Wirtz, J. and Lovelock, C., 2016. Services marketing. People, technology, strategy. Eighth
edition. New Jersey, London, Singapore, Beijing, Shanghai, Hong Kong, Taipei, Chennai,
Tokyo: World Scientific. Google Scholar.