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Marketing Management-II

Case Analysis

Xerox Corporation: The Customer Satisfaction Program

Case Brief

Xerox Corporation: The Customer Satisfaction Program

Xerox Corporation, incorporated in 1906, is engaged in the document management business, offering an array of document products, services, and solutions. The company is specialized in the production and management of documents: ranging from color to black-and-white, digital and paper for the small office or the multinational enterprise. Being an icon of innovation for years and a dominator of the copier market, Xerox experienced years of success. Xerox Corporation was the first company to launch a xerographic machine in the year 1959. It was a market leader till 1970 due to the various patents it held. Later it started issuing licenses to competitors and since then it started losing the market share to IBM, Kodak and other Japanese players. However, in 1980, the company realized that they need to concentrate on quality which would help in both reducing the costs and in retaining the customers. They aimed and achieved Leadership through quality. They served the customers and dealt with it through different frameworks.

Marketing Research Orientation: Xerox Company had a lot of information about the industry and its competitors from third-party sources. It also had information about the available distribution channels. It conducts four sets of surveys:

1. Periodic survey of a random sample of Xerox customers

2. Post-installation survey of all Xerox customers within 90 days of a new installation

3. New product post installation survey of a random sample of customers with new products during the launch phase

4. Survey for benchmarking the company with the customers

All these surveys provide the company with the information about customer satisfaction which they use to identify problems and solve them. They had a very good follow up methods for products that get below Ð'- target customer satisfaction ratings. This shows that the company has a very good market research orientation.

Upward communication: The various functions of the organization worked together and they acted as partners in decision and planning processes. The data obtained from the field was sent to the district level and regional level which was in turn sent to the top management. This data was consolidated and was circulated so that corrective actions could be taken. The senior management also met frequently to discuss the issues.

Management Levels: Though there were many levels in the organization, the effective communication reduced the boundaries between the functions. Initially the structure was bureaucratic which made the company suffer in the way it dealt with the competition. But after restructuring the organization, the company succeeded due to the flexibility it achieved.

Commitment to the quality of service: Since 1980, Xerox management concentrated on quality as they realized that it is a very important factor to sustain its market share. They not only wanted to deal with the customers' existing needs but also with the latent needs. They trained the employees in quality tools and processes which shows their commitment to quality.

Goals: Their basic vision was to achieve 100% customer satisfaction which they succeeded to achieve. They had a clear goal to become the industry benchmark in customer satisfaction and they had clear defined goals for both internal and external worlds.

Standardization: It is difficult to standardize the customer service procedure. The customer service division of the organization, however, was dealt with as a cost center and they were measured on some predetermined criteria to ensure the proper functioning of the division.

Teamwork: Earlier, the members didn't work as a team but they shared information across divisions and across various levels of management. Staffs were divided into groups which were benchmarked with respect to each other. This was to ensure competitiveness within the company.

Horizontal Communication: This was a problem as the customer did not perceive the vendors and the company to be of same credibility. This could be made better by communicating clearly to the customers. However, one method of horizontal communication that helped the organization was the information and knowledge sharing that happened across regions due to the consolidated data the company had.

Comprehended control: The Company gave the authority and options to the operating units to respond to the customers requirements so as to maximize customer satisfaction. The information obtained was also circulated back to the regional and district levels after consolidation so as to allow them to deal with the problems the customer experiences.

SWOT Analysis

Strengths

Ð'* Xerox has a favourable brand image. The company was one of the pioneers in the document processing business, and the name stands for quality, state-of-the-art technology, and good service. It has many patents to its credit.

Ð'* Xerox is the only full-line supplier with products ranging from the Low-end of the Low-volume to the high end of the high-volume.

Ð'* Xerox has dominance in the copier market. It is the market leader with a high market share in the mid and high volume markets. Its dominance provides a strong foothold from where it is possible to introduce new products and services, and in some segments it should be possible to harvest with good profitability.

Ð'* Xerox had by far the largest service organisation in the industry and was the largest paper and supplies distributor as well.

Ð'* Xerox places a lot of emphasis on employee participation in operational decisions. The people in the Xerox organization are of a proactive nature, rather than a reactive. This has made it possible for the company to set industry standards, rather than respond to the actions of competitors. Employee participation programs makes it possible for Xerox to gain valuable information from the "bottom up" and the company was well prepared to meet new customer demands.

Ð'* Xerox Corporation has an excellent quality management team. Its corporate wide