Improving customer service in pizza hut vietnam company (phv) for competitive advantage in vietnamese market

ee Aw URE „x1 HOCHIMINIL OPEN MENT CITY UNIVERSITY PROJECT tnam Improving customer service in Pizza Hut Vie in Company (PHV) for competitive advantage Vietnamese market t of Submitted in partial fulfillment of the requiremen program the Master in Industrial Business Management HOCHIMINH CITY OPEN UNIVERSITY EUROMED MANAGEMENT TOULON TRUONG OAT HQC MO TP.HCHL THU VIEN Name: Vu Lai Doan Trang ment 1-2011 Class: Master in Industrial Business Manage Project supervisor: Dr Jacques Martin TABLE OF CONTENT Chapter 1: Introduction Project topic Project purposes Project objectives 4, Personal learning objectives Research question Chapter 2: Literature review 1, Customer service: Customer satisfaction The importance of customer service to company business development 4, Service standards of Pizza Hut Vietnam Chapter 3: Methodology 1, Data analysis Focus group Chapter 4: Finding and proposal A Findings The performance of PHV service quality Customer’s behaviours and insights towards Pizza Hut chain The gaps between customer satisfaction and service quality of PHV The root causes of defects in service quality & consistency B Proposals and recommendations C Conclusion 67 References & Appendix Vu Lai Doan Trang- MIBM1 Abstract —_ Nowadays, customer service becomes more and more important to companies who want to gain competitive advantage in local as well international market Quality of custome r service leads to customer satisfaction, customer retention, and customer loyalty then increases company profit In addition, satisfied and loyal customer serve as an important source of free advertising through referrals and recommendations, whereas unsatisfied customers are more likely to defect and convey negative experiences to other potential customers [l (Hartline & Jones, 1996) With high awareness of the crucial relationship between customer service and company success, Pizza Hut Vietnam is considering customer service as a strategic way to become the leading Pizza restaurant chain in Vietnam This thesis is developed based on the market development strategy of Pizza Hut Vietnam and personal interests when I see many opportunities for improving company customer services and developing potential of Pizza Hut chain in Vietnamese market Pizza Hut is part of YUM! Brands, the world’s largest American restaurant group which manage some famous brands such Lf as Pizza Hut, KFC, Taco Bell, Long John Silvers, AW- All American Food Tencsohn => ‘Ru Acneny Feo” ye SilVERS Today, Pizza Hut is the largest and best Ð 73 @ pizza distribution system in the world, with more than 10.000 locations around the world, in over 90 countries and territories The company employs more than 240.000 people worldwide Every day, Pizza Hut serves more than millions pizzas to approximately 4,5 million customers Starting its business in Vietnam from 2006, Pizza Hut Vietnam (PHV) Company is growing so fast Beginning with 02 restaurants in 2007, now PHV has 14 restauran ts and will have more 20 new ones in 2012 With its critical market development plan, PHV is facing some challenges in controlling its customer service quality How to keep the service quality standard s consistently is really a key problem that PHV should solve it if it wants to gain competitive advantages over other restaurant chains That is also my purpose of this dissertation- finding the answer of research question:”How can Pizza Hut Vietnam Company provide consistent service quality in all restaurants?” Vu Lai Doan Trang- MIBMI The dissertation consists of three main parts The first part- Literature is to collect available data and theory about customer service with a specific emphasis to the importance of customer service to company business development and understanding of customer satisfaction, what customers really want when they use the services and what things can keep customers going with company for a long time In addition, the service standards of PHV are also collected to have an overview of service culture of the company The purpose of second part- Methodology is to find out what customers’ expectations are when they experience services in Pizza Hut restaurants and how well the current PHV service is From the understanding of customer service in general and current service of Pizza Hut Viet Nam, in the 3" part, I will analysis the findings to identify the gaps between customer expectation and the current company services, then find the root causes of the problems The proposal of solving the problems will be working on basing on the service standards of YUM and available resource that PHV can use to improve the company’s customer service The next session of the thesis will provide the project title, and explain its purpose, objectives and the research questions that will be answered at the end of the study Vu Lai Doan Trang- MIBM1 Chapter - Introduction Project Topic “Improving customer service in Pizza Hut Vietnam Company (PHV) for competitive advantage in Vietnamese market” Project purpose The thesis is intended to find out the solutions for improving customer service of PHV identifying the strengths and weaknesses of PHV by customer services, what makes customer’s satisfaction then analyze the gaps between customer’s expectation and current service quality of PHV and root causes for these defects Project Learning Objectives ¢ To evaluate the current service quality of PHV ¢ To measure the customers’ satisfaction of PHV service ¢ To find out the gap between customers’ expectation and PHV service and the root causes of the gaps ¢ To make recommendations to improve the customer service of PHV Actually, the service performance of most of restaurants in Vietnamese Pizza Hut chain is not consistent and this situation will become worst and worst when the number of restaurants is bigger and bigger With the main purpose of improving PHV customer services, my first objective is to have an insight of company operation to explore deeply the strengths and weaknesses of PHV service and how well the company service is currently In order to reach this objective, I will use the existing internal documents to understand what are service standards that Yum (the Pizza Hut brand owner) has set up for all Pizza Hut chain in the world, and how PHV apply them to build the service culture for Vietnamese market However, the person who decides the existence of the company is customer When PHV run its business in Vietnam, it had to identify the target customers and their needs to provide appropriate products and services in order to meet their expectations, The other objective I set for my thesis is to measure the customers’ satisfaction - what they really want when they use products and Vụ Lai Doan Trang- MIBMI experience the services at PHV restaurants and what make them unsatisfactory and unfaithful to Pizza Hut brand When I clearly understand of current situation of PHV services from both sides of company and customers, I aim to find out the root causes of the gaps between customer’s expectations and the current service quality of PHV and end up with a proposal to improve the customer service of the company 4, Personal Learning Objectives Besides project learning objectives, I recognize that doing this project is a chance for me to gain some outcomes as following: ¢ Know practical ways to identify customer’s satisfaction and evaluate the service quality of PHV objectively and correctly ¢ Understand and enrich my knowledge on customer service management of a restaurant chain © Get more experience in doing a research of customer service Research question At the end of the thesis, I aim to provide the answer for the question: How can Pizza Hut Vietnam Company provide consistent service quality in all restaurants? Vu Lai Doan Trang- MIBMI Chapter - Literature review In the literature review, base on research question and objectives, some key words and themes will be described and explained to discover and provide a deep insight into the service of PHV It will start describing customer service and customer satisfaction Once, customer service is explained, I will define service standards of Pizza Hut restaurant chain, to finally talk about the impacts of service quality consistency on business and competitive advantage of the PHV Company in Vietnamese market 1, Customer service Customer service is the phrase that will be mentioned in this thesis frequently Let’s start with some definitions for customer service I found on the internet to have an overview of this concept “Customer service is an organization's ability to meet their customers’ wants and needs.” (Susan Ward tf “Customer service is the service or care that a consumer receives before, during and after a purchase.” (Laura Lake ['*)) “Customer service is any form of communication or ‘interaction between a company representative or an employee and an individual(s) doing business with that company.”(Teresa Weimer "}) “Excellent customer service is the process by which your organization delivers its services or p roducts in a way y that allows the customer to access them in the most efficient, fair, cost effective, and humanly satisfying and pleasurable manner possible.” (Jack Speer 0Ì, Another definition from Turban et al (2002), customer service is described as a series of activities designed to enhance the level of customer satisfaction — that is, the feeling that a product or service has met the customer expectation According to Paul Routley (2009) the objectives of customer service are: (1) to create a culture of customer focus in company where behaviours of every staff always shows customer- oriented; (2) to create rapport with customers and build their loyalty and (3) to achieve customer satisfaction James Chapman (2008) argues that most of customer service definitions take the company as the central focus point They place the emphasis on the organization first, and the customer second This seems logical, of course, since it is the organization doing all the work in the customer service, not the customer Vu Lai Doan Trang- MIBMI However, first and foremost, customer service should be about customer It is time to take a more customer central approach to this So, here is the definition, from the customer's point of view: "A customer defines good customer service as how she/he perceives that an organization has delighted him/her by exceeding to meet his/her needs." It means that the company should have the ability to constantly and consistently over deliver good product and service to make sure that the individual customer delighted The key point is not about the truth it is about perception Customer satisfaction Satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectation (Kotler, 2003) Base on this review, customer satisfaction is defined as the result of a cognitive and affective evaluation, where some comparison standard is compared to the actually perceived performance If the perceived performance is less than expected, customer will be dissatisfied On the other hand, if the perceived performance exceeds expectations, customers will be satisfied Otherwise, if the perceived expectations are met with performance, customers are in an indifferent or neutral stage Gustafsson (2005) defines customer satisfaction as a customer’s overall evaluation of the performance of an offering to date This overall satisfaction has a strong positive effect on customer loyalty intentions across a wide range of product and service categories According to Scoth M Smith (2007), customer satisfaction measures how well a company’s products or services meet or exceed customer expectations These expectations often reflect many aspects of the company’s business activities including the actual product, service, company and how the company operates in the global environment Mohamed Zairi (2000) developed a figure which shows in order to have a continuous improvement of customer satisfaction There should be a circle which starts with listening to voice of customers then analysing their comment, developing actions and at the end implementing Below figure illustrates this circle: Vu Lai Doan Trang- MIBM1 CONTINUOUS IMPROVEMENT OF CUSTOMER SATISFACTION Implement & Monitor Root cause analysis Z \ /, Source: Zari, 2000 The below Company Profit Chain indicates the key factors affecting company profit It starts from the good working conditions that make employees satisfied and lead to loyal employees When employees are loyal to company, they take high ownership in producing good quality products and services, these influences on customer satisfaction and make them loyal to the company and contribute to company profit through customer retention- Zairi (2000) Good working —_——™ Employee satisfaction conditions ⁄ Company THE COMPANY ™=— PROFIT CHAIN Employee Loyalty | Profit Good quality products or services Customer Loyalty mm Customer satisfaction = Source: Zari, 2000 A challenge working with customer service is to ensure that the company have focused their attention on the right key factors to meet customer’s satisfaction The point is to define what factors can satisfy customers or what customers expect when they use the company services Vu Lai Doan Trang- MIBMI 10 Howard Senter (2001) describes all factors that impact to customer’s satisfaction can be classified into 03 basic groups: Product; Convenience and People This concept can be explained clearly in following diagram: People Product || { ca: “+ Z + Convenienc | t ———— t | | Customer satisfaction LD :6usfomer service - -— What customers expect from products of the company: - Quality products - Reasonable prices - Diversity of product - Product availability and reliability - Promotions “What factors make customers feel convenient when dealing with the company: - Convenient location - Space availability - Convenient opening & working time - Ordering and billing systems - Delivery system Vụ Lai Doan Trang- MIBMI ... strategy of Pizza Hut Vietnam and personal interests when I see many opportunities for improving company customer services and developing potential of Pizza Hut chain in Vietnamese market Pizza Hut is... service in Pizza Hut Vietnam Company (PHV) for competitive advantage in Vietnamese market? ?? Project purpose The thesis is intended to find out the solutions for improving customer service of PHV... standards of Pizza Hut restaurant chain, to finally talk about the impacts of service quality consistency on business and competitive advantage of the PHV Company in Vietnamese market 1, Customer service