UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN DINH THIEN TAM Student ID 22150055 HIGH CUSTOMER COMPLAINT RATIO FROM MEDENT CO , LTD MASTER OF BUSINESS ADMINISTRATION[.]
UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN-DINH THIEN TAM Student ID: 22150055 HIGH CUSTOMER COMPLAINT RATIO FROM MEDENT CO., LTD MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – 2019 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN-DINH THIEN TAM Student ID: 22150055 HIGH CUSTOMER COMPLAINT RATIO FROM MEDENT CO., LTD MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: TRAN HA MINH QUAN Ho Chi Minh City – 2019 Executive Summary The dizzying turn of the "digital" revolution in today's life has made intellectual property more important than ever The intellectual property, which is often considered the most important asset in all organizations, needs to be well identified and studied In addition, in this digital age, adaptation is being viewed as a strong competitive advantage In the current economic context of Vietnam and especially in commercial enterprises Organizations need to ensure they operate in a way that can help them meet and grow sustainably by addressing these two issues The purpose of this thesis is to explore the causes of high customer complaint ratio through the current problems with customer at Medent Co., Ltd (in short, it would be called Medent in this thesis) The findings of the study revealed the awkwardness and embarrassment of catching up with the changes of the times as well as the rapid change of customer demand in which the "information" factor is extremely important Not only you have to provide them enough "information", but also provide solutions that will enable them to apply into their work The findings are discussed in details in the research along with some recommendations for the company and management board to solve the problem of the actual needs of customers, towards sustainable development and reduce customer complaint ratio in Medent Co., Ltd Acknowledgements I would like to acknowledge all who supported me during my studies without whom I wouldn't be where I am today I would especially like to thank my supervisor – Professor Tran Ha Minh Quan for all his advice and guidance, without his help this could not have been possible I also would like to show my gratitude to my colleagues at work and classmates at ISB for their continuous support I also send my sincere thankfulness to my parents and friends for their support and encouragement TABLE OF CONTENTS EXECUTIVE SUMMARY ACKNOWLEDGEMENTS LIST OF FIGURES LIST OF TABLES INTRODUCTION 01 1.1 The company background 01 1.2 Company structure and mission 01 PROBLEM CONTEXT 03 PROBLEM IDENTIFICATION 05 3.1 Cause –and –effect map 05 3.2 Literature review 07 3.3 Final Cause –and –effect map 21 CAUSE VALIDATION 23 ALTERNATIVE SOLUTIONS 24 5.1 The first alternative solution: Establishment of a "multi-function" R&D center 24 5.2 The second alternative solution: conduct collaborative research programs with medical universities and dental associations 26 ORGANIZATION OF ACTIONS 29 CONCLUSION 34 SUPPORTING INFORMATION 35 REFERENCES 43 LIST OF FIGURES Figure Medent organizational structure Figure Increasing ratio of customer complaint (compare with previous quarter) Figure Increasing ratio of customer complaint in the last three year Figure The satisfied ratio with the services and products of Medent - 2018 data Figure The Gap Model Figure Initial Cause Effect Map Figure Final Cause Effect Map LIST OF TABLES Table 1: Fixed cost of building center Table 2: Fixed cost of Team training & recruiting Table 3: The cost of projects in 2017 Table 4: Action plan 1 INTRODUCTION 1.1 The company background Company name: Medent Co., Ltd Established year: 1994 Industry: Dental supplies and services CEO: Dr Huỳnh Thanh Đạm Medent Co., Ltd is one of the largest providers of dental care products and services to office-based dental and dental practitioners in Viet Nam Medent is a subsidiary company of the Medent Group; the largest group provides dental care products in Vietnam The company also serves dental laboratories, government and institutional health care clinics, and other alternate care sites in the field of dentistry A company with more than 23 years of development history and serves thousands of clients in the dental industry throughout Vietnam 1.2 Company structure and mission Regarding the structure, there are multiple services and products that the company provides Moreover, it also includes value-added solutions in order for operative practices and high-quality care to be achieved Medent oriented to operate through a centralized and automated distribution network, with a selection of rich and diverse product portfolio from over 10 global brands from reputable multinational corporations in the dental industry Plus, special assistance and various advanced technical aids are also available to customers in need, as claimed by the company Specifically, these consist of financial aids, software and utilities that are specialized in internet trading Headquartered in Tan Binh District, HCMC The company's sales reached a record 200 billion VND in 2016 (Medent Group sales revenue 2016 is 900 billion VND in 2016) For more information, visit the Medent website at http://medent.vn BOD CEO Supervisory Board Director of subsidiary company of Medent Group Board of Assistant Medent Co., Ltd Managing Director VP Supporting Group VP Operational Group VP Business Group Marketing Manager Technical Services Manager Dental Equipment Sales Manager HR & Administration Manager Ware house & Logistic Manager Dental Surgical Sales Manager Customer Relation Manager Finnance & Accounting Manager Dental Labo Sales Manager R&D Manager Import-Export Manager Dental Implant Sales Manager IT & System Management Manager Purchasing Manager Figure Medent organizational structure (Source: Medent Human Resource Department) PROBLEM CONTEXT High ratio of customer complaint Symptom: High ratio of customer complaint We have had data from Customer Services Department that they have received an increasing number of complains as follows: On average, from July 2017 to July 2018, the number of complaints increased 3.8% in average each quarter in a year when compared with the average number of previous year, we calculated by taking the total number of complaints of each quarter of this period from Q3 2017 to Q2 2018, add up their sum and then divide by 4, then use this result to compare with the average of the previous year, thereby calculating the average percentage above In addition, we also compared the growth rate of complaints in the quarters corresponding to the previous years, namely Q3 2017 compared to Q3 2016 On the other hand, we also compared this average of this year compared to the previous two years The issues mentioned above will be explained in the following two charts: INITIAL CAUSE & EFFECT MAP Products provided not meet the expectations of customers Customer service is not good High ratio of customer complaint Installation and delivery are not good Figure Initial Cause Effect Map To build the first proposal, I choose the first cause as a potential central problem The reason why I remove the others includes two reasons: Firstly, I start conducting theoretical searches and find out that service and its quality has become an fascinating phenomenon in the fields of research, operation management (OR) and service marketing management (SMM) (Nejadjavad & Gilaninia(2)) The term “service” can be defined in numerous ways Although the term has been presented differently through the definition of numerous researchers, it still ends up in the same field which depends heavily on the satisfaction of customers In accordance with American Society for Marketing (2008), a service is known as a specific product that can be sold or trade Reversely, as Kotler(3) stated, the same term is seen as the outcome from the interaction between the supplier and the customer There exist a great number of service types in the literature, one of which is supplementary service It is the extra help that customers receive after attaining their desired items or products As Goyal stated, two types of services are presented The first one is core service, indicating the desired results that are equal to the price a customer has to pay for a product If a refrigerator is bought, for instance, the user will expect it to be able to freeze food and keep them fresh The second type of service is, according to Lovelock and Wirtz(4), is supplementary service, aiming at improving and assisting the core service Following this specific model, a company should offer core service and supplementary service to its clients With the former, the main interests and benefits requested by customers are attained The supplementary services are bound to enhance such items According to Lovelock et al.(9), The Flower of Service is created to explain the two types of supplementary services supporting the core product They are facilitating supplementary services and enhancing supplementary services (2009) I found out that the problem Medent was facing was information and consultation Secondly, when I read again the results of the interview, I discovered that despite many causes for customer complaints, one of the most important causes we need to pay attention is the change in nature of the products which the company provides They changed from pure tangible products (dental devices) to intellectual products (solutions for dentistry, we can see through the interview content, including the client side, namely dentists and the company side, namely sales, marketing and customer service which we collected during the next interview Dr Hùng– Director of Dr Hung Dental Hospital shared that: The majority of Medent's complaints come from the company's services You see, as you have recently converted from selling products to selling solutions that I have not seen this in practice You are only bringing values to customers sporadically because you lack a lot of core values The reason, simply because you not understand correctly and specifically what you need to For example, when you combine multiple treatment technologies together, that does not mean "one plus one equal two" that you are changing the behavior and treatment method of the doctor, you need to help them Do it in a practical way, not just on theory In addition, delivery services as well as operating instructions are not really good But this is understandable, as I mentioned above, there are things you not know Thus, how can you guide and organize well? At her point of view, Dr Hoà – Director of Dr Hoà Clinic shared that: Your service is not bad, but the service attitude and the way you organize your work should be reviewed You know, sometimes you cannot well, but attitude is very important to save the problem, and about the organization, I'm a doctor, I not know very well but I feel recently, your company seems to be "exhausted" and I see that your products in particular and the market in general are increasingly "more difficult to use", which may some important reasons that cause the problems Dr Điềm – Director of Sagodent Dental Training Center shared that: The way your company works is just right for the old days, now it is different trend Therefore, complaining is correct You understand, I take a lot of time to be able to learn in detail the dental solution to apply to the patient and then I have to practice a lot You know that medical solution is a smooth combination of practice and theory For me, it is very difficult, you even want to deliver integrated solution, I think this is very difficult for you at this time As Lovelock et al.(9) stated, information plays a crucial part in facilitating the core products, as it is essential in performing service delivery It requires sufficient information in order for customers to attain full value from their purchased products, especially new customers and prospects Moreover, they may request specific information regarding the location to buy a product (or details of the procedure to order it online), service hours, usage instructions and prices Based on the result of the qualitative research, usage instruction is one of the main reason for the change On the other hand, according to Naipaul and Parsa(10) , by sticking to the needs of customers in different situations, it is possible to improve the value of consultation and services; for example, training and consulting based on specific professions or the usage of a 10 particular product Lovelock et al.(9) also suggested that it is an improved form of supplementary service that characterizes consultation, which consists of multiple dialogs to target clients’ exact requests before leading to a conclusion In other words, consultation is a work where a knowledgeable personnel from a service company gives considerable suggestions regarding the field being inquired; for instance, a man might ask a bodybuilder for advices on how to gain muscle In addition, we also conducted a further review of the theory - model to be able to provide a view at a different angle, developed by Zeithaml, Berry and Parasuraman(15), the gap model included give gaps; later, there were six after Lovelock et al.(9) improved it: Gap 1: The Knowledge Gap Gap 2: The Policy Gap Gap 3: The Delivery Gap Gap 4: The Communications Gap Gap 5: The Perceptions Gap Gap 6: The Service Quality Gap In which, gap and are two direct and specific gaps in case of Medent The Knowledge Gap is the missing information that cause the reduction in satisfaction regarding fulfilling customers’ expectations while the Perceptions Gap indicates the imbalance of what the clients feel about the products they receive and what are given in reality, as customers are unable to evaluate the actual quality of the products Thus, we can conclude that information and consultation, which results in a series of associated consequences for which the other causes are the result of this change However, we need to conduct further investigation to be able to identify this problem 3.2 Literature review Undoubtedly, numerous scholars and researchers have focused on the concept of service and service quality through the last few years of the 20th century till the present 11 time According to Lewis and Mitchell(1), what are truly essential and significant are the concept that the customers receive and its value plays an important role in determining how pleased the customers will be As a marker of customer satisfaction and organizational performance, the significance of service quality is not only widely recognized but it has also prompted a noteworthy research push concentrating on various ventures inside the service sector In fact, various researchers assess a portion of the exploration that identifies with characterizing and measuring service quality; furthermore, they also conduct numerous proposals as to how estimation instruments, for example, SERVQUAL (service quality) may be progressed At this moment, it is a fact that we are living in the time of a great transition when the economy revolves around services and assistance Not being parts of the economy, it is the core of significant worth creation in economy that different services are considered In order to compete in a highly vying environment, different corporations that specialized in services must seek and possess distinctive and efficient methods so as to achieve the best performance Thus, holding a thorough understanding of the administrating process will give them an advantage, together with the general attributes of their quality as well as the desires of the customer (client) Due to its elusiveness, in accordance with Nejadjavad and Gilaninia(2), the ratings of customers for services that not engage in trading are often quite severe 3.2.1 Service Marketing and Management Obviously, service and its quality has become an fascinating phenomenon in the fields of research, operation management (OR) and service marketing management (SMM) (Nejadjavad & Gilaninia(2)) In the current business and plan instruction, service quality is taking its place as one of the significant subjects It is in management and marketing literature that the causes for service quality can be found As a result of high competitiveness and rapid growth in services, researchers have experienced more pressure from the field of managing Western Businesses Although service marketing specialists delivered the term service quality, there exists an increase in interests as it receives more attention from how it will be designed Multiple distinctions can be seen, despite the reality that the business starts to revolve around the same field and operate 12 in the same manner when dealing with service quality It is from single orders into multidisciplinary Service Science that the dialog appears to converging This is what triggers the process of creating transitory motion of definitions, methodologies and dialects Certainly, such a process will not stop and there will be a rise in exhaustive vocabulary regarding service quality as well as its marketing and management strategies 3.2.2 Service definition The term “service” can be defined in numerous ways Although the term has been presented differently through the definition of numerous researchers, it still ends up in the same field which depends heavily on the satisfaction of customers In accordance with American Society for Marketing (2008), a service is known as a specific product that can be sold or trade Reversely, as Kotler(3) stated, the same term is seen as the outcome from the interaction between the supplier and the customer On the other hand, Gummesson claimed that service is none other than the characteristic that could satisfy the customer’s needs Through all the distinctive definitions of service, it is clear that the term is obligated to the satisfaction of customers as well as their expectations Clearly, the primary purpose of service is to obtain customers’ satisfaction through the most efficient course of actions, which will also lead to an improved level of market share and competitive advantage 3.2.3 Flower of service There exist a great number of service types in the literature, one of which is supplementary service It is the extra help that customers receive after attaining their desired items or products As Goyal stated, two types of services are presented The first one is core service, indicating the desired results that are equal to the price a customer has to pay for a product If a refrigerator is bought, for instance, the user will expect it to be able to freeze food and keep them fresh The second type of service is, according to Lovelock and Wirtz(4), is supplementary service, aiming at improving and assisting the core service 13 The goals of service providers are delivering a delightful experience to their customers so as to stimulate further purchases and gain creditability For such a purpose to be achieved, core services always come with secondary aids It is in such a manner that customers’ satisfaction is enhanced, which leads to the success of a service company It is none other than the flower of service model in which they are collectively captured Following this specific model, a company should offer core service and supplementary service to its clients With the former, the main interests and benefits requested by customers are attained The supplementary services are bound to enhance such items As they play a significant role of improving customers’ products, the provider can impose a greater cost on such services Such is a way that the two types of service are operated (Storey & Easingwood(5); Lovelock(6); Bitner, Brown & Meuter(7)) In such a context, there are two kinds of supplementary services, including enhancing supplementary services and facilitating supplementary services (Lovelock, Patterson & Paul(8)) Regardless of theirs functions, the followings are always included in enhancing supplementary services: safekeeping, hospitality, consultation and expectations Reversely, payment, billing, order-taking, and information are provided by facilitating supplementary services It is through facilitating the use of core product and enhancing service delivery that these elements operate (Lovelock, Patterson & Paul(8)) By adding value to the service, they also help the company to differentiate from competitors (Lovelock, Patterson & Paul(8)) Although the core service is undifferentiated, discriminating provided products are possible to achieve, as they are tested in a competitive market Lastly, the act of clarifying service/product elements are assisted by service delivery which facilitate the delivery of the supplementary and core product/service By utilizing it, distinguishing between supplementary products and the service product will be feasible In addition, it also assists the process of anticipating the customers’ experience in using the service ... Figure Medent organizational structure (Source: Medent Human Resource Department) PROBLEM CONTEXT High ratio of customer complaint Symptom: High ratio of customer complaint We have had data from Customer. .. causes for the high ratio of customer complaint 7 INITIAL CAUSE & EFFECT MAP Products provided not meet the expectations of customers Customer service is not good High ratio of customer complaint. .. Increasing ratio of customer complaint in the last three y ear 2016 0.9% 0.7% 3.8% Increasing ratio of customer complaint in the last three year 2017 2018 Figure Increasing ratio of customer complaint