Creating customer value and the use of the product life cycle to generate strategic options for maturing low-cost service-retail markets -A case study on The Spirit Group value pub food retail concept"Two for One"

Twaites, Claire (2007) Creating customer value and the use of the product life cycle to generate strategic options for maturing low-cost service-retail markets -A case study on The Spirit Group value pub food retail concept"Two for One". [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

This is a case study on a low-cost service retail concept known as "Two for One" a pub-food chain owned by The Spirit Group. The thesis aims to explore the nature and characteristics of the product life cycle for low-cost service retailers with the objective to establish strategic options. The nature of low-cost propositions is that price is the main strategic driver to compete for growth and market share. However in maturing markets where competition is high and margins are low, retailers seek alternative sources of differentiation. This study is important for two reasons: firstly, the literature on the product life cycle spans over 50 years, yet it does not study service retail markets-focusing instead on manufacturing or fast moving consumer goods. Secondly, not only is service retail a key area of modern business studies, but that there is a growing emergence of the low-cost provider in sectors such as short-haul flights (Easyjet); Multiple Grocers (Tesco); on-line retailers (Amazon) and pub-companies (J D Wetherspoons and TWO FOR ONE).

The concept of building superior customer value and growing customer loyalty are two themes for strategy that are explored in detail. These concepts are relatively new (being studying in the last 10-20 years) and there is a broad spectrum of opinion in the literature. However, the case study reviews the enablers of customer satisfaction and loyalty using four extensive customer surveys, from a sample base of over 6000 consumers. Strategic options are considered in light of both the product lifecycle of the case study and the customer value and loyalty findings.

The main conclusions of the study are:

Product life cycle can be used as a basic management tool, provided its used at all levels of market, product form, class and brand and if external forces are considered

Retail market life cycles are subject to complex and dynamic forces influenced by multi-site nature of retail. Low-cost service retail adds a further dynamic to life cycle performance. Strategy selection is therefore dependent on establishing the life cycle stages of multiple sites and considering factors as well as price to provide differential advantage.

The pub-food market is now showing early signs of maturing which will result in pressure on margins and further market consolidation.

Customer value can also be defined as a function of �¢â�¬��price, quality, service and environment.

There is evidence of links between customer satisfaction, operational competency, site investment and profits.

Investment in customer loyalty strategies is low in pub retailing, providing low returns on investment. Customer loyalty strategies should focus instead on low-tech approaches to understanding customer needs, matching them with appropriate offers and communicating the offer to the target customer.

Analysis of customer complaints show that service and quality of products are key dissatisfiers, suggesting that a zero defections policy is the first step to improving customer loyalty.

Item Type: Dissertation (University of Nottingham only)
Keywords: Product lifecycle service retail pub retailing cost leadership strategies customer value customer loyalty customer satisfaction
Depositing User: EP, Services
Date Deposited: 04 Jul 2007
Last Modified: 29 Sep 2016 08:30
URI: http://eprints.nottingham.ac.uk/id/eprint/20853

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