C chain convenience store’s customer loyalty improvement

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Vu Thuy Diem Chi ID: 22150005 C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2018 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business - Vu Thuy Diem Chi ID: 22150005 C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR PHAM PHU QUOC Ho Chi Minh City- Year 2018 C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT Executive summary Nowadays, Vietnam becomes one of the most dynamic emerging countries in Asia The development of Vietnam’s economic creates the fierce competitive market for the domestic and foreign investors In the competitive market, customer loyalty is considered as the key to success in business and the most important determinant for sustainable development of organization After analyzing the annual reports and customer surveys, C chain of convenience store (in short, it would be called C chain in this thesis) realized that the customer loyalty of C chain is very low compared to previous years and their competitors It can be considered the threat for the sustainable development of C chain From the analyzing of previous research’s results, conducting qualitative and quantitative research, the thesis found two main potential causes of C chain’s low customer loyalty: the lack of cooperation between regional managers and store managers and the lack of effective training program These factors affect significantly to the customer satisfaction, the quality of customer service, finance, brand image and oriented development of the organization Because of these serious consequences, the exploring of solution for these problems is necessary The solutions are discussed in detail in the thesis along with some recommendations for the company to improve the cooperation between managers and the quality of training program at C chain Besides that, the cost and benefits of these solutions are considered carefully in this thesis in order to exploring the effective problem solving methods C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT TABLE OF CONTENTS Executive summary CHAPTER 1: COMPANY INTRODUCTION 1.1 Industrial overview 1.2 Company background 1.3 C chain head office’s organization chart CHAPTER 2: PROBLEM IDENTIFICATION 2.1 Symptoms 10 10 2.1.1 The first symptom: Decreasing number of customer over the years 10 2.1.2 The second symptom: The decreasing average monthly customers per store 11 2.1.3 The third symptom: Decreasing customers who using membership card 11 2.1.4 The fourth symptom: Increasing customer complaints 12 2.1.5 The fifth symptom: Low Customer Loyalty Index 13 2.1.6 The qualitative research about competitors’ customer loyalty 14 2.2 Initial cause – effect map 15 2.2.1 The summary of previous research 15 2.2.2 The quantitative research 17 2.3 The updated cause effect map 24 2.3.1 The qualitative research 24 2.3.2 Cause and effect chart of real problem 26 2.4 Consequence of problems 29 2.4.1 The summary of previous research 29 2.4.2 Qualitative research about problem’s consequences 30 CHAPTER 3: POSITIVE SOLUTIONS FOR SOLVING PROBLEMS 33 C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 3.1 Solution for improving the cooperation between managers and the efficiency of leadership at C chain 33 3.1.1 Reducing workload for regional managers 33 3.1.2 The permission for using smart phone’s application in reporting and management 35 3.2 Solution for improving the quality of training programs 36 3.2.2 Organizing the software training course 36 3.3.3 Organizing the management training course 38 3.3 Action planning 39 CHAPTER 4: CONCLUSION 41 Reference 42 Appendix 44  Questionnaire 44  Interview guide 46  The detail calculation of solution’s cost 50 Transcript 53 C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT Figure 1: Head office of C chain’s organization chart Figure 2: The average number of customers per store per day 11 Figure 3: Average monthly customer of one store from 2016 to 2018 11 Figure 4: The amount of customer using membership card 12 from 2015 to 2017 12 Figure 5: Average daily customer complaints of one store 12 from 2015 to 2017 12 Figure 6: The average daily revenue of on store from 2015 to 2017 13 Figure 7: The result of the survey about Customer Loyalty Index 14 Figure 8: Customer’s period time buying products at C store 18 Figure 9: Customer’s membership card 18 Figure 10: The reason why customers not have membership card 19 Figure 11: The customer’s rating for benefit of membership card 19 Figure 12: The customer satisfaction score 20 Figure 13: The common problems which customers facing 21 when buying products from C store 21 Figure 14: The C store’s representative solving problem 21 Figure 15: The rating of C store’s problem solving 22 Figure 16: The customer’s expectation 22 Figure 17: The initial cause effect map 24 Figure 18: Cause and effect chart of real problem 27 Figure 19: The action plan 40 C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT CHAPTER 1: COMPANY INTRODUCTION 1.1 Industrial overview Vietnam is one of the most dynamic retail market in Asia with the sixth position in Global Retail Development Index Because of the sharp growing retail industry and the open economy with various trade agreements between Vietnam and many world economic organizations, Vietnam becomes the most attractive retail market in the world Realizing the potential of Vietnam’s retail market, not only domestic investors but also foreign investors try to enter and gain the market share of the retail industry in Vietnam This makes Vietnam’s retail market is more vibrant and competitive Vietnam has the young population with people aged from 15 to 64 accounting for 70% of its total population Besides that; nowadays, Vietnam’s population have the increasing income, rapid urbanization and rising living standard These are the potential factors for the development of supermarket and convenience store in Vietnam Until now, there are nearly 900 supermarkets, 9000 traditional market and 2.3 million retail households throughout Vietnam and these figures continues increasing by the available investors and new investors who are preparing to enter Vietnam’s retail market 1.2 Company background C group is a real estate development and management company It offers services such as property development, real estate management, evaluation, consulting, and project management Nowadays, the rapid growth in Vietnam's retail market has made Vietnam becomes the country which is attractive for domestic and foreign retailers With the great potential of Vietnam’s retail industry, C group decided to buy a local supermarket in October 2014 to enter the retail industry and began opening C chain of convenience store in 2015 In the first year, there are 300 stores opened; by 2016, there are 720 stores opened; until now, there are 812 stores in Vietnam In order to catch the trend of online shopping, at the same time as the establishment the chain of convenience store, C Group had set up the shopping online website with various service for customers C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT The core values which C chain brings to customers are: High quality goods With the strict control process of C chain, the customers can be completely assured about the quality of goods Besides that, C chain also develop the private label products such as Ceco, Cmart Cook with the professional production lines Convenient shopping C chain has huge number of stores and wide coverage across Vietnam It makes customers go shopping and use the service easily and conveniently Friendly and conscientious C stores are designed and arrange friendly with clear instruction The employees are always full of energy in order to bring the best service to customers Community development The spirit of C chain is developing the sustainable business, protecting environment, customer’s health and the development of society With the long-term vision, C chain has been developing quality as well as quantity of stores in order to meet the requirement of customers, brings the convenience and safety when using products of C chain Let C chain become a leading retailer in Vietnam 1.3 C chain head office’s organization chart C chain head office has one Director who is responsible for all activities of chain store There are six departments which are supporting Director in manage C chain, these are sales department, marketing department, IT department, accounting department, human resource department and chain operating department The most important department are chain operating department, marketing department and sales department Sales department is responsible for the merchandise and the revenue of store C chain not have Customer service department, so the Marketing department is in charge of customer service’s activities and promotion activities Chain operating department was established to support Director manage C chain’s operation This department is accountable for checking products quality of C store (Quality Assurance team), C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT monitoring C store’s operation (Region supervisor team) and developing store system (New store development team) Figure 1: Head office of C chain’s organization chart C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 10 CHAPTER 2: PROBLEM IDENTIFICATION 2.1 Symptoms The system of C chain developed sharply in order to gain the market share of the retail market By the strong expansion of convenience stores, the shopping online application, the young and enthusiastic staffs, C chain hopes to be the leading retailer in Vietnam However, the result is not as expected The annual reports of C chain show that the revenue is decreasing in the recent years and the main cause of this problem is the decreasing number of customer over the years The relationship of customers and C chain is not close, the number of customers who use the relationship card when go shopping at C stores is very low There are five symptoms which suggest that C chain is having the inefficient business operation: the first symptom is the decreasing number of customer over the year, the second symptom is the decreasing average monthly customers per store, the third symptom is the decreasing customer who using membership card, the fourth symptom is the increasing customer complaints and the fifth symptoms is the low customer loyalty index of C chain Then, the research will analysis each symptom in order to clarify the problem which C chain is facing, 2.1.1 The first symptom: Decreasing number of customer over the years The average number of customers is decrease over the years In the first year, the average number of customers is about 243 people per day In 2016, this number decrease 39% compare to the previous year and then C chain decided to close 62 stores which have ineffective business operation and continued to looking for favorable place in order to expand their network However, by 2017, the average number of customers at one store per day still decrease to 96 people While the retail industry in Vietnam is having the outstanding growth, especially the convenience store This is the very low number of the average customers for convenience store per day C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 58 No, I haven’t been provided all resources and support I needed How does the company give you the right to take full advantage of your capabilities and potential? The company not give me the right to order products directly Which is the common customer’s complaint about your store? Some products are not available Example some types of milk, noodles, beverage, … - How you solve this problem I said sorry with customer and then I mail to the purchasing team and my regional store manager - How long will the problem be solved? About days - Who evaluate your problem solving? Sometimes, my regional manager comes to the store to check How often the region manager come to evaluate your store? times a week After the date of evaluation, how long he come back to check your store? After week Please drop the comment on how region manager work? He is a strict and responsible person The second interview Please Introduce about Employee name, position I am Tran Minh Ha, a store’s managers How long have you work for C chain? I have worked for C store about years Before that, I worked for Family mart as store’s manager How were you trained by direct supervisor? I was not trained because I have experience about convenience store Probe - How you evaluate the quality of training? C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 59 No answer - How are the whole new knowledge and skill that you were trained influence on you work? No answer - Beside the training program, what are the coaching programs that you were learnt at your position? No, I was not received any coaching program - What training activities you like or need that you not receive? What are the effects? I not have experience with fresh food products, so I think I need to be trained about how to preserve and exhibit these products - What you feel that you have been provided with the resources and support as your needs to complete the work? I think I have enough resources and supporting to complete my work How does the company give you the right to take full advantage of your capabilities and potential? The company not give me the all right to manage the store Which is the common customer’s complaint about your store? The customer complaints are not solved promptly - How you solve this problem? I said sorry with customer and then I connect to the customer service team - How long will the problem be solved? About days to days - Who evaluate your problem solving? No one How often the region manager come to evaluate your store? or times per week After the date of evaluation, how long he come back to check your store? C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 60 No, he doesn’t come back to check, he requests me take the picture about the fixing Please drop the comment on how region manager work? He is very kind, but he does not have the good knowledge about store’s operating The third interview Please Introduce about Employee name, position My name is Pham Thi Thanh L I am convenience store’s manager How long have you work for C chain? I have worked for C store more than year How were you trained by direct supervisor? I was trained in five days by the former store’s manager Because he intended to quit the job and I replace his position Probe - How you evaluate the quality of training? The training is good but not enough, I had to learn by myself - How are the whole new knowledge and skill that you were trained influence on you work? They are very useful for my work - Beside the training program, what are the coaching programs that you were learnt at your position? No - What training activities you like or need that you not receive? What are the effects? Report software training I have to report for the regional manager, but I am very confused about how to using report software - What you feel that you have been provided with the resources and support as your needs to complete the work? C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 61 My data access’s right is limited How does the company give you the right to take full advantage of your capabilities and potential? The company give me the right to decide almost store’s operation However, some decisions have to check by regional manager Which is the common customer’s complaint about your store? The necessary products usually not available - How you solve this problem? I said sorry with customer and then I connect to the purchasing team - How long will the problem be solved? About days - Who evaluate your problem solving? No one How often the region manager come to evaluate your store? or times per week After the date of evaluation, how long he come back to check your store? About week Please drop the comment on how region manager work? He is a responsible person But he is very busy, so he doesn’t take much attention to my store The fourth interview Please Introduce about Employee name, position My name is Nguyen Van T My position is store’s manager How long have you work for C chain? I have worked for C store about months How were you trained by direct supervisor? Because I have experience in retail, I wasn’t trained Probe: - How you evaluate the quality of training? C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 62 No answer - How are the whole new knowledge and skill that you were trained influence on you work? No answer - Beside the training program, what are the coaching programs that you were learnt at your position? No - What training activities you like or need that you not receive? What are the effects? I need merchandise management software coaching Because my store has many near-date products They existed before the time I start my job at C store - What you feel that you have been provided with the resources and support as your needs to complete the work? C chain is lack of the official documents about the operational process Therefore, each store is operating by different way I think C chain should provide the official documents about operational process to employees How does the company give you the right to take full advantage of your capabilities and potential? My right is limited and when I want to something out of my right, I have to ask my regional manager Which is the common customer’s complaint about your store? The products usually not available - How you solve this problem? I borrow the products from another store and then I call to the purchasing team to order and give back later - How long will the problem be solved? Immediately - Who evaluate your problem solving? C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 63 No one How often the region manager come to evaluate your store? or times per week After the date of evaluation, how long he come back to check your store? week Please drop the comment on how region manager work? He is a responsible person with good knowledge about retail industry The fifth interview Please Introduce about Employee name, position My name is Pham Van C, my position is store’s manager How long have you work for C chain? I have worked for C store about years years and months for store’s employee months for store’s manager How were you trained by direct supervisor? When I started the job as store’s employee, I was trained my my colleague, and almost I learned by myself When I became store’s manager, I was trained by the former store manager in days It is a short time to receive a new job, so I confused and lack of knowledge about this job Probe: - How you evaluate the quality of training? The training was too short and not transmit enough information - How are the whole new knowledge and skill that you were trained influence on you work? They have the significant influence with my job - Beside the training program, what are the coaching programs that you were learnt at your position? I don’t receive any other coaching programs C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 64 - What training activities you like or need that you not receive? What are the effects? I want to be trained how to use all software which support for my job at C store - What you feel that you have been provided with the resources and support as your needs to complete the work? No, I not have enough documents which guide for the job at C store How does the company give you the right to take full advantage of your capabilities and potential? My right is limited and I just can decide some small problems Which is the common customer’s complaint about your store? Some products are not available - How you solve this problem? I connect to the regional manager - How long will the problem be solved? About days - Who evaluate your problem solving? No one How often the region manager come to evaluate your store? times a week After the date of evaluation, how long he come back to check your store? About days Please drop the comment on how region manager work? He is very strict and supportive He always help me to solve the problems, however; he is too busy, so it take a long time for problem solving The sixth interview Please Introduce about Employee name, position My name is Huynh Cong T, I work for store’s manager position How long have you work for C chain? C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 65 I have worked for C store years years for store employee position and year for store manager position How were you trained by direct supervisor? When I started the job as store’s employee, I was trained by my store manager, he taught me how to the job and evaluate my performance Probe: - How you evaluate the quality of training? The quality of training is good - How are the whole new knowledge and skill that you were trained influence on you work? They have the significant influence on my job - Beside the training program, what are the coaching programs that you were learnt at your position? When I was store’s employees, I receive the coaching program about how to exhibit the fresh food - What training activities you like or need that you not receive? What are the effects? I think C chain should organize the outside activities for all store’s managers It helps us exchange for work experience - What you feel that you have been provided with the resources and support as your needs to complete the work? C chain is lack of the official working instruction How does the company give you the right to take full advantage of your capabilities and potential? My right is limited Which is the common customer’s complaint about your store? C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 66 They cannot call for the customer service team because the line always busy - How you solve this problem? I support them to solve the problems and not need the customer service supporting - How long will the problem be solved? It depends on their problem - Who evaluate your problem solving? No one How often the region manager come to evaluate your store? times a week After the date of evaluation, how long he come back to check your store? About days Please drop the comment on how region manager work? He is lack of knowledge about store’s operation Therefore, when he evaluating the store he usually has mistakes The seventh interview Please Introduce about Employee name, position My name is Nguyen Minh T I work as store’s manager How long have you work for C chain? I have worked for C store about months How were you trained by direct supervisor? I was trained by regional manager in day because I have experience in working for convenience store Probe: - How you evaluate the quality of training? I cannot comment because he just introduced job at C store but he didn’t train me how to these job C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 67 - How are the whole new knowledge and skill that you were trained influence on you work? Not influence - Beside the training program, what are the coaching programs that you were learnt at your position? No any coaching program - What training activities you like or need that you not receive? What are the effects? I think C chain should provide us the training program about software Because it have significant impact on my work - What you feel that you have been provided with the resources and support as your needs to complete the work? Sometimes, I haven’t been received the supporting from IT department How does the company give you the right to take full advantage of your capabilities and potential? My right is limited Which is the common customer’s complaint about your store? The customer service solve problems slowly - How you solve this problem? I call for my regional store manager to report about this problem - How long will the problem be solved? About days - Who evaluate your problem solving? No one How often the region manager come to evaluate your store? times a week After the date of evaluation, how long he come back to check your store? About week C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 68 Please drop the comment on how region manager work? He is very supportive and responsible person The eighth interview Please Introduce about Employee name, position I am Huynh Xuan P I am a C store’s manager How long have you work for C chain? About year How were you trained by direct supervisor? I was trained by regional manager in days I have experience in supermarket However, the activities of supermarket are different the activities of convenience store It take me a long-term to adapt Probe: - How you evaluate the quality of training? The quality is good but too short I didn’t receive enough knowledge and skills for manage store - How are the whole new knowledge and skill that you were trained influence on you work? They have significant influence - Beside the training program, what are the coaching programs that you were learnt at your position? No any coaching program - What training activities you like or need that you not receive? What are the effects? The training about how doing report I always confused when doing revenue report for my regional store manager - What you feel that you have been provided with the resources and support as your needs to complete the work? C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 69 I think the Head office’s support is weak When I have problems related to the Head office, it takes me a long-term to solve How does the company give you the right to take full advantage of your capabilities and potential? When I decide something, I have to ask my regional store manager, wait for his agreement It is very waste time Which is the common customer’s complaint about your store? The parking place is too small, because my store is located in District and the pavement is very small, it just enough for motorbike - How you solve this problem? I ask the next door for parking customer’s motorbike - How long will the problem be solved? Immediately - Who evaluate your problem solving? No one How often the region manager come to evaluate your store? times a week After the date of evaluation, how long he come back to check your store? About days Please drop the comment on how region manager work? He is not supportive He responses slowly and very strict when evaluate the store III The interview about the problem’s consequences The first interview Please Introduce about Employee name, position, experience - My name is Pham Huy T I am staff of chain operating department as regional manager I have worked for C chain about years My job is supervising all activities related to store’s operation What you evaluate the quality of C chain’s training program? - C chain not have the specific training program or training documents for C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 70 employees The quality of training is very poor How you evaluate the cooperation between C’s chain employee? - Because of the huge number store, the cooperation between store and store, store and head office is very weak I am responsible for supervising 30 stores, I have to come and check stores per day and average I can check store times per month So there are many problems in the store I cannot solve How you think about the consequences of the problem (the ineffective training and poor employee cooperation)? - In my opinion, the ineffective training and poor employee cooperation leads to the low employee performance, low organizational performance and low customer satisfaction The second interview Please Introduce about Employee name, position, experience I am Nguyen Van N I have worked for C chain about years as a staff of customer service team My job is receiving the customer’s complaints and work with the related department about these complaints What you evaluate the quality of C chain’s training program? Firstly, I want to said that I didn’t receive any training program from C chain Before start working at C chain, I worked for the shopping mall as the service employees However, the business operation of C chain is different with this shopping mall, so I faced with many problems when adapted with the job at C chain How you evaluate the cooperation between C’s chain employee? Because I have to work with many departments at C chain I realized the cooperation between departments, employees is very weak When there are problems, everyone always passes the responsibility to other people/department It takes many time to solve problems and the problem solving is not effective C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 71 How you think about the consequences of the problem (the ineffective training and poor employee cooperation)? - In my opinion, these problems make the company is lack of quality employees, poor quality of problem solving It leads to the low company performance and low profit and low customer satisfaction The third interview Please Introduce about Employee name, position, experience I am Doan Trong A, I have worked for C chain about year as regional manager I am responsible for managing 28 stores What you evaluate the quality of C chain’s training program? I have trained by the colleague about days I think the time of training is very short, so I didn’t follow all tasks at the first time I think the training program is not effective How you evaluate the cooperation between C’s chain employee? I think the C chain’s employee cooperation is very weak, because the loose management C chain have a large system of store but not have enough quality regional manager Therefore, the stores are not managed tightly and they operate in the different ways How you think about the consequences of the problem (the ineffective training and poor employee cooperation)? It makes me face to many difficulties when manage my region I can not manage C stores effectively as also follow the sales or store’s problems It leads to the low performance of C store, low sales and low profit The fourth interview Please Introduce about Employee name, position, experience My name is Hoang Thu H I have worked for C chain about 10 months My position is monitoring store’s revenue staff C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 72 What you evaluate the quality of C chain’s training program? I have trained by the former staff about days before she quit this job The training is good but too short Therefore, I had to call her frequently in order to ask about the job She is very kind and supportive How you evaluate the cooperation between C’s chain employee? I think the C chain’s employee cooperation is not good The store’s managers not cooperate with me when I the revenue report or collect the data from store How you think about the consequences of the problem (the ineffective training and poor employee cooperation)? - The ineffective training leads to many employee’s mistakes and lead to low employee performance - The poor employee cooperation leads to the job delay and affect to the business operation of the company ... leadership C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT Figure 18: Cause and effect chart of real problem 27 C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT 28 In order to achieve... chain of convenience store, C Group had set up the shopping online website with various service for customers C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY IMPROVEMENT The core values which C. .. products Affordable product's price Large parking place Convenience location Source: Result of quantitative survey Figure 16: The customer s expectation C CHAIN CONVENIENCE STORE’S CUSTOMER LOYALTY