Kevin Consolo

Document Sample
Kevin Consolo Powered By Docstoc
					Customer Satisfaction & Service Excellence Project

                   Prepared By:

                 Kevin Consolo

                 August 25, 2006
                 Marketing 455

                                             Consolo 1
I. Company Background

       My Favorite Muffin®, an actual Fortune 500 company, has been a part of the

Ohio University campus market for fourteen years. The Athens location, located at the

beginning of North Court Street, currently holds a staff of eight employees and plans to

hire more for the upcoming school year. Most of their locations are concentrated in

western America, but there is also a store in Cincinnati. Also, the company is just now

starting to work on the paperwork to start franchises in Marietta and Lancaster.

       Whether the buyer happens to be looking for quiet café to sip coffee, or fresh

baked goods for breakfast, or even restaurant quality lunches and dinners—My Favorite

Muffin® offers it all. Straight from their menu, they offer soups, salads, gourmet bagel

sandwiches, sub sandwiches, a variety of bagels, and of course—muffins.

       Another main selling point that the managers are particularly fond of is the fact

that they offer Brewster‟s Coffee®. This brand of coffee is widely known and is in fact

the second highest selling coffee in the nation.

II. Personal Experience

       There isn‟t a better way to experience a company than it is to do so personally, so

I went through the buying process myself as a normal customer before I met with the

company. This way, I was able to not only test their product‟s price and quality, but I was

also able to experience how the employees treat an everyday customer.

       Unfortunately, my experience was a negative one. I, like many everyday students,

needed some breakfast early in the morning to bring to a day of work. The fact that I am

going to work relays the message of my minimal budget in the first place, so I‟m not

looking to spend an arm and a leg. To create a perfect combination with the price, I‟m

                                                                                   Consolo 2
also looking for enough food to satisfy my hunger to help me stay focused on a full day.

My Favorite Muffin® did not fulfill either need.

           A plain toasted bagel sandwich with nothing else besides ham and Swiss cheese

was a relatively outrageous $3.89. I also followed that by ordering their Jumbo Muffin

(which in my opinion was not very „jumbo‟) and that was $1.59. After taxes, my final

total was almost to $5, which is practically a whole hour worth or work at my job. This is

the same price where you can receive five filling items on the value of Wendy‟s® or

Taco Bell‟s®.

           But the price was not my only internal complaint, that particular squabble was just

before I consumed their product. The bagel sandwich had a good quality and taste to it,

but was not at all filling. With just a slice of ham and cheese, it wasn‟t much. Then I got

to the chocolate chip muffin, which was stale and hard and practically inedible. I ate half

of it and threw the rest of it away—leaving my stomach empty and my wallet five dollars


           I could have gone to Perks® and purchased their cheap Jimmy Dean® sausage

breakfast sandwich. I could have chosen Worlds Best Bagels® if I had decided a bagel

was the breakfast of choice. I could have found myself in Brennan‟s® for a deli sandwich

or salad to go. But I decided to forego these opportunities for My Favorite Muffin®, and

by making that choice; it was then My Favorite Muffin®‟s opportunity to show me why

this was a meaningful decision. It was also their prime opportunity to show me enough to

never think about their competitors again—to create a long-term customer. After all, that

exact achievement should be their goal every time someone enters their dining area. Each

and every employee should have more on their mind than the simple transaction of their

                                                                                   Consolo 3
cash register; they should realize the transaction turning a potential customer into a solid


       However, my experience was such a letdown that I considered never again

stepping foot in their store. There are just too many good options on the Ohio University

campus that come much closer to price and quality satisfaction.

       I also couldn‟t find any access to marketing or coupons that caught my eye before

or after this experience. In my mind, My Favorite Muffin® failed in all categories:

marketing, price, quality, and service. There are many things they can do to develop their

customer base, but before I could break down their steps to improvement, I decided to sit

down with their Manager and Owner, Lawrence Fetty.

III. Interview with Manager and Owner, Lawrence Fetty

Question: Is Marketing perceived as a business function or the way of doing business?
Fetty: Marketing is very important in maintaining your customer base.

       Response: Lawrence admits that marketing is important for customers, but are his

actions meeting his words? The only way I first found out about this restaurant was

seeing the sign on the way to FedEx/Kinkos®. However, after meeting with Lawrence, I

realized that they do send out a direct mailer. Sending the menu through the mail is an

effective way to get your food and price selection in the heads of students across campus.

Question: What do you feel are your strongest points/outlets of marketing? How do you
best reach the college student?
Fetty: Go out and talk to them on the street. The best way to sell a product here is word
of mouth. We do advertise in the messenger, but we are limited by funds.

       Response: The key part to Lawrence‟s answer is that My Favorite Muffin® is

limited by funds. This cancels out key advertising outlets such as radio, television, t-

                                                                                   Consolo 4
shirts, billboards, and any other kind of mainstream media. Word of mouth advertising is

important and effective, but only if it is positive and valid word of mouth.

       Lawrence and his franchise need to improvise with cheap outlets of advertising.

Some easy examples of this could be writing the company name, address, and deals with

sidewalk chalk all over campus. They could also have employees sit out on court street or

college gate with samples of products with a menu stand. In order for „word of mouth‟

advertising to be effective, the company needs to initiate the conversation.

Question: How does My Favorite Muffin® monitor defection in products?
Fetty: We don‟t let our products sit more than 24 hours. After that, we are ordered to
throw them out—which I do. But really, I don‟t run across many complaints, so there
isn‟t a real way to measure.

       Response: This company is a nationwide chain, so they have strict orders like this

for a reason. It sounds like this Athens location follows the rules and makes sure to limit

the already minimal complaints in this business.

       However, people do make mistakes, and in any business, there are ways to reduce

them. In a bakery like My Favorite Muffin®, products are made everyday. If the

managerial staff emailed their employees about mistakes that led to customer complaints,

then it can be a type of training to dramatically help to erase the mistakes from happening

again in the future.

Question: Who are your main competitors? Fast Food? Coffee and cafés? Bakeries?
Fetty: Mainly the coffee places, such as Perks®, Brennan‟s®, The Donkey®, and The
Front Room®. But we also do deli sandwiches, so we can act in the fast food market.

       Response: In the Athens city directory (in the back pages of the official 2005-

2006 Ohio University daily planner put together by the Student Alumni Board), My

Favorite Muffin® is listed in the „Fast Food‟ section along with restaurants such as

                                                                                  Consolo 5
Jimmy Johns®, KFC™, Sonic®, and Dairy Queen®. From a marketing standpoint, this

is generally confusing—considering the competition. There is also a „Coffee Houses‟

section which includes nothing more than Perks®, Brennan‟s®, The Donkey®, and The

Front Room®. These are the exact competitors that Mr. Fetty listed, yet in this particular

directory, the company misses the opportunity to steal customers. From the freshman

student point of view (who is learning about café options on campus), how are they

supposed to realize the option of My Favorite Muffin®?

       Similar to the aspects of the Xerox case study, My Favorite Muffin® should

maybe do some competitive benchmarking. It would be in their best interest to include

themselves in segments such as this to get their company name in the mix. They should

also monitor products, prices, discounts, and service to make sure they can utilize a

potential advantage. Just like Xerox (over Canon and Kodak), this is a great way for My

Favorite Muffin® to gain a crucial edge in the market.

Question: Do you use any guarantees?
Fetty: No, but I have no problem trading in a product or giving full refunds if there is a
complaint. Like I said, we don‟t get many complaints, but if I am facing one, I have no
problem taking the profit hit and satisfying the customer, because customer satisfaction is
extremely important.

       Response: As we learned in Keeping Customers, in the book‟s discussion on the

experience of customers and its selling implications, the inexperienced customer looks

for comfort from the vendor. This type of customer, who is not familiar with the product,

is labeled as a generalist. They tend to seek for trust with the salesperson in the major

stages of the buying process. For example, in the computer selling business, the

inexperienced customer would most likely want to know about technical support. The

buyer doesn‟t know much about the product, so therefore, if something goes wrong, they

                                                                                   Consolo 6
will have to be assured that an ample amount of assistance will be available. Lawrence

Fetty, in this case, has to find the equivalent to this assurance to attract the inexperienced

customer. This comfort level can easily be found in a guarantee.

       The fact that Fetty is not afraid to trade in a product or give a full refund is

commendable. In order to nurture the customer satisfaction rate, Fetty has to act

quickly—with no questions asked. After the trade-in or the refund transaction is made,

the specific customer will likely return knowing that their money and satisfaction is

secure. If they aren‟t happy, they don‟t have to walk away empty-handed along with

being dissatisfied.

       However, Lawrence Fetty, the owner of the store, is missing the opportunity to

give this same comfort to non-customers—through marketing. My Favorite Muffin®

could utilize the strong method of the guarantee in this case. Fetty has mentioned two

crucial elements already in this interview. For one, he doesn‟t receive many complaints.

Also, he is willing refund customer‟s money—no questions asked. This is the perfect

opportunity to use a satisfaction guarantee. All Fetty would have to do is say,

“satisfaction guaranteed or your money back” at the end of his advertisements, and this

would automatically reach patrons who have never even entered the restaurant.

       For the several inexperienced My Favorite Muffin® customers walking the streets

of campus, this is part of the positive „word of mouth‟ advertising that Fetty has wanted

all along. Using the satisfaction guarantee would help attract these customers to at least

try the product, and this way (If Fetty is truly confident in the customer‟s satisfaction),

they will return as a multiple-time visitor.

                                                                                    Consolo 7
Question: Do you have ways of keeping employees satisfied? Praises? Promotions?
Fetty: Although we don‟t do raises in the employee‟s first ninety days on the job [he
called it an „insult‟ raise], we do have an employee praise system. We also only promote
from within the staff. I believe if you treat your employees like [expletive]…you‟ll get

       Response: Although it was an unorthodox way of stating the obvious, Lawrence

Fetty again has the right state of mind. As an owner and manager, if you don‟t treat your

employee‟s well, they most likely will not treat their customer‟s well.

       This entire process from satisfied employees to satisfied customers is probably

more complex than Fetty believes. To organize the entire cycle to achieving satisfied

customers, Gary Loveman and Len Schlesinger developed the business model titled, „The

Service-Profit Chain‟. The model looks like this:

Profit and growth   stimulated from           Customer loyalty
Loyalty              comes from               Very high customer satisfaction
Satisfaction         directly from            Value of services provided to customers
Value                created from             Satisfied, productive, loyal employees
Employee satisfaction is from                 High quality support services and policies

       Fetty has already mentioned his knowledge of how customer satisfaction and

loyalty breeds profit and growth. But what he may not think of every day (or every time

he interacts with an employee), is that profit truly stems from his employee‟s satisfaction.

It‟s a good thing they have a praise system to document this. Also, Fetty‟s decision to

only promote from within is a smart one. Hiring a manager from the outside can make the

veterans seem unwanted—leading to their discomfort and dissatisfaction. Because of this,

Lawrence and the My Favorite Muffin® staff are partly on the right track to customer

satisfaction by the status of their employee satisfaction process.

Question: How are your employees trained or recruited to treat customers?

                                                                                 Consolo 8
Fetty: There is a several step method and a companywide mission statement. We do
preach the common „the customer is always right‟ rule. The employees know that the
customers are what drive the business—they are our true bosses.

       Response: Since this is a Fortune 500 company, it appears that the top executives

took some time (and used valid research) to complete a customer service mission

statement. This will set a solid structure for new employees, but it is up to the local

franchise owner to enforce. Every location is as successful as the owner‟s leadership, and

Lawrence Fetty seems to have the right idea in this particular aspect.

       The „customer is always right‟ rule is important for employees to understand in

case they have to handle a service mishap individually. This falls in line with Fetty‟s

willingness to refund the service to the customer without questions asked. This way, not

only will there not be any arguments between the customer and employee, but the

customer‟s willingness to give the company money with increase.

       When an average employee acts like the customer is their „boss‟, it makes the

customer feel powerful and in charge. This notion will alleviate the tension for the

customer and allow them to control the possible service mishap.

IV. Underclassmen Promotions

       The lifetime cost of a student at this particular My Favorite Muffin® location is

an unfortunate diminished value. Due to the nature of the college campus, this Athens

store will most likely only hold a young customer for only the four years of their

collegiate experience. This four-year relationship is also based on the ability for My

Favorite Muffin® to immediately reach the freshman market; and this notion is not

something in which they are currently succeeding.

                                                                                   Consolo 9
       Without reaching the freshman class, they are again missing out on a supreme

opportunity—and there are plenty of ways to attempt this marketing feat.

               Magnets:

                Each dormitory at Ohio University includes a micro-fridge in the room

       and board package. My Favorite Muffin® can seize this opportunity by

       implementing a magnet with their store logo, address, discounts, and hours on

       each of them. By doing this, My Favorite Muffin®‟s popularity instantly

       competes with other cafés such as Perks®, Brennan‟s®, The Front Room®, and

       The Donkey®. It will appear to incoming freshman that Lawrence Fetty‟s

       franchise has already established success in the student market, not to mention

       that it automatically informs them of their address, deals, and available open


                There are roughly forty-one dormitories on campus, and My Favorite

       Muffin® should estimate about 4,000 micro-fridges for advertising space. To

       budget this, 4,000 2  4 sized magnets would total $760. The owner did suggest

       that the company had limited funds, but this opportunity might be too good to


                Here is a general magnet pricing table:

                                                                               Consolo 10
                    1000   2000   3000   4000   5000   10000 20000 50000
             2x2    0.23 ¢ 0.14 ¢ 0.13 ¢ 0.12 ¢ 0.12 ¢ 0.10 ¢ 0.10 ¢ 0.08 ¢
             2x3    0.25 ¢ 0.17 ¢ 0.16 ¢ 0.15 ¢ 0.15 ¢ 0.13 ¢ 0.12 ¢ 0.11 ¢
             2 x 3.5 0.28 ¢ 0.19 ¢ 0.17 ¢ 0.17 ¢ 0.17 ¢ 0.15 ¢ 0.14 ¢ 0.12 ¢
             2x4    0.30 ¢ 0.23 ¢ 0.21 ¢ 0.19 ¢ 0.18 ¢ 0.16 ¢ 0.15 ¢ 0.14 ¢
             2x5    0.34 ¢ 0.28 ¢ 0.26 ¢ 0.23 ¢ 0.22 ¢ 0.20 ¢ 0.19 ¢ 0.18 ¢
             2x6    0.39 ¢ 0.32 ¢ 0.29 ¢ 0.27 ¢ 0.26 ¢ 0.23 ¢ 0.22 ¢ 0.22 ¢
             2x7    0.44 ¢ 0.37 ¢ 0.34 ¢ 0.32 ¢ 0.30 ¢ 0.27 ¢ 0.26 ¢ 0.25 ¢
             2x8    0.49 ¢ 0.41 ¢ 0.38 ¢ 0.36 ¢ 0.34 ¢ 0.31 ¢ 0.30 ¢ 0.29 ¢
             3x4    0.39 ¢ 0.32 ¢ 0.29 ¢ 0.27 ¢ 0.26 ¢ 0.23 ¢ 0.22 ¢ 0.22 ¢
             3x6    0.53 ¢ 0.46 ¢ 0.43 ¢ 0.42 ¢ 0.38 ¢ 0.35 ¢ 0.34 ¢ 0.32 ¢
             3x8    0.68 ¢ 0.60 ¢ 0.56 ¢ 0.56 ¢ 0.49 ¢ 0.46 ¢ 0.45 ¢ 0.43 ¢
             4x4    0.49 ¢ 0.41 ¢ 0.38 ¢ 0.38 ¢ 0.34 ¢ 0.31 ¢ 0.30 ¢ 0.29 ¢
             4x5    0.51 ¢ 0.50 ¢ 0.46 ¢ 0.46 ¢ 0.41 ¢ 0.39 ¢ 0.37 ¢ 0.36 ¢
             4x6    0.67 ¢ 0.59 ¢ 0.55 ¢ 0.55 ¢ 0.49 ¢ 0.46 ¢ 0.44 ¢ 0.43 ¢
             4x7    0.77 ¢ 0.69 ¢ 0.64 ¢ 0.64 ¢ 0.57 ¢ 0.54 ¢ 0.52 ¢ 0.50 ¢
             4x8    0.87 ¢ 0.78 ¢ 0.73 ¢ 0.73 ¢ 0.65 ¢ 0.62 ¢ 0.59 ¢ 0.57 ¢
             5x6    0.82 ¢ 0.73 ¢ 0.68 ¢ 0.64 ¢ 0.61 ¢ 0.58 ¢ 0.56 ¢ 0.54 ¢
             5x8    1.06 ¢ 0.96 ¢ 0.90 ¢ 0.85 ¢ 0.81 ¢ 0.77 ¢ 0.74 ¢ 0.72 ¢
             6x6    0.92 ¢ 0.87 ¢ 0.82 ¢ 0.77 ¢ 0.73 ¢ 0.69 ¢ 0.67 ¢ 0.65 ¢
             6x7    1.11 ¢ 1.00 ¢ 0.94 ¢ 0.89 ¢ 0.85 ¢ 0.81 ¢ 0.78 ¢ 0.71 ¢
             6x8    1.25 ¢ 1.14 ¢ 1.07 ¢ 1.02 ¢ 0.97 ¢ 0.92 ¢ 0.89 ¢ 0.86 ¢

       Poster/Flyer Advertisments:

        Another way to attack the underclassmen dormitories is by utilizing the

bulletin and message boards that are available in every residence hall. These

locations exude a prime environment for „buzz‟ marketing or „word of mouth‟

advertising—the same type of marketing that Mr. Fetty believed to be the most


        As a previous customer, I am well aware of their previously used direct

mailer (which they should continue to distribute). This mailer is a menu that

comes with an attached piece of paper explaining their Wednesday promotion as

                                                                               Consolo 11
„Muffin Day‟. This promotion‟s discount advertises that the restaurant will sell

muffins for $1.25 every Wednesday.

       As a consultant, one of my jobs is to improve discounts and promotions

such as these for a better customer retention rate. In order for the owner‟s desired

„word of mouth‟ advertising to be effective, the flyer or poster has to have an eye-

catching visual effect, along with a slogan or deal that the viewer will never

forget—I have designed one that accomplishes both aspects.

       Instead of bringing coins into the mix, I have decided to push the

promotion to the limits by creating „Dollar Muffin Day‟ on Wednesdays. On this

day, every week, muffins will be one dollar—no more and no less. The slogan for

the promotion, which I have created, will be “The only friend you need is

George”—with a play on the president that appears on the one dollar bill (see

Appendix A). This way, students (who are already tight on their own budgets)

can just use the single dollars they have in their wallet, much like they are used to

doing on the value menus of fast food restaurants such as Taco Bell® and

Wendy‟s®. Even though My Favorite Muffin® will make a quarter less on each

muffin they sell, they will make more customers by the end of the day—allowing

for more money to float into their profit bag.

       These flyers, assuming that the company would opt for the cheaper black

and white versions, would be a very insignificant cost. Only one flyer is allowed

on each floor of a dorm according to the University Offices. In this case, I have

researched that there are around 500 floors total in the residence halls. A good

general rule is to over budget, because with 700 flyers, you could always pass the

                                                                         Consolo 12
       extra copies out at college gate. According to the prices at FedEx/Kinkos®, the

       total price for flyer production would be $56, which is $0.08 per black and white


              Coupons

               Another way to reach freshman is to strategically place coupons with

       correlating freshman events. This can include working with University Offices by

       placing them inside their tour bags on the student‟s orientation visit. Or also, by

       working with College Book Store® and having that company place coupons in

       the bags along with the books that freshman and other students purchase in the

       beginning of each quarter. This would also work during the orientation visit

       because some students even buy books with their parents at this time. The

       coupon could be an attracting deal such as, “Buy one muffin, get one free!”—one

       for the student and one for the parent (see Appendix B).

V. Conclusion

       By implementing this marketing plan, My Favorite Muffin® is headed in the right

direction to fully become a market-oriented franchise.

       It allows for a deeper understanding of their market‟s buying influences and their

customers—most of them being Ohio University Students. This type of market, such as

myself, is looking for the optimal combination or price and quality; but, there is a price-

sensitivity aspect in which the companies must act accordingly.

       Also, as first and second year students, these customers are relatively

inexperienced. Lawrence Fetty and the rest of the organization must work as a whole to

                                                                                 Consolo 13
not only display their customer service, but to also use marketing to establish success and


       For the customer service aspect, they can continue with their „customer is always

right‟ rule. Along with the manager‟s willingness to comply with service mishaps, the

company should utilize the satisfaction guarantee with all their products.

       For customer retention, they now have plenty of new options and opportunities.

This list includes sidewalk chalk advertising, college gate flyers and sampling, magnets,

posters (Appendix A), and coupons (Appendix B). This concentrates on attacking the

underclassmen population for supreme long-term relationships and believers in the


       With this plan, My Favorite Muffin® will improve in all categories previously

mentioned: marketing, price, and service. The „profit-chain‟ will remain in progress with

retaining employee satisfaction. The „word of mouth‟ advertising will be initiated into

positive marketing for the franchise. “Dollar Muffin Day” will reduce the notion of the

company‟s high prices. And finally, if this plan is successfully implemented, My Favorite

Muffin® will be well on its way to becoming Athens‟s favorite restaurant.

                                                                               Consolo 14
Appendix A: Dormitory promotional flyer

                                          Consolo 15
Appendix B: Coupon insert

                            Consolo 16