Essay on Customer Loyalty

Value of Loyal Customers refers measuring the overall revenue and profit that the organization gets from the customers purchasing cycle to the people who use and consume the product or the service provided by you. The organization takes a deep interest in creating loyal customers on the basis of their service and quality. On the other hand, organization also strives to take the loyal customers of the competing organization to their side and make them a regular user of the product that they provide. Loyalty of the customer is very important to establish a fixed revenue of sales for an organization (Hallowell, 1990).

The loyalty of the customers is maintained by providing them with the promised quality at an economic price as compared to the other organizations that produce the same product or provide the same service. The organization develops strategies and organizes them accordingly to obtain the loyalty of the customers and ensure that they use the product and service provided by them on a regular basis irrespective of the products of any other organization without even considering them (Basu & Dick, 1994). The loyalty of customers is very much important since it provides the set of customers that are always going to consume the product or use the service provided by the organization. It can be applied to the organizations by providing recognition to the loyal customers and other related schemes, offers and benefits.

The organizations have been executing the flow of operations and development of schemes and offers in order to obtain the maximum customers and then, it will provide special and really useful concessions to the regular customers to turn them into loyal customers and the mode of promotion for the organization. Thus, the organizations calculate the importance of the Value of Loyal customer (VLC) and apply it to increase their profit and has following measures and advantages:

  • Repeat purchase by Regular customers
  • Customer Passing or recommending others
  • increase in turnover
  • Increase in Profit
  • Increased satisfaction of the new customers and hence forming a chain of references among the customers.

 

2) Mass customization in an organization refers to the adoption of computer aided and automated production system for delivering the quantity of products on the customer’s request for custom batches of the product. The mass customization is observed where the organization is capable enough to deliver the required quantity of product at the customer’s request and to fulfil the requirements in terms of quality as well as quantity serves to be the major challenge in performing the task (Pine, 1999). The main focus of the organization in executing the mass customization of the operations is to meet the huge demand of the customer in terms of production and carry it at the optimum economic cost.

The design that is adopted for the sequence and flow of operations and movement of the materials is to be analysed with respect to the outcome so as to obtain the most optimum and customized mode of production in the organization that will help to ensure that profitability and turnover of the organization is maintained.

Mass customization is observed in an organization where production is carried out in two ways which involve: a) delayed differentiation and b) modular design.

 

Delayed differentiation                                            Modular design

It is observed in an organization where the product is made first as the family product and then modifications are made in it.

 

It involves developing the actual product in a lot or a bunch and then modifying it as per the requirements of the customers and providing them with the leverage to choice the design.

 

It is observed in an organization where the production is divided into small modules and after production they are assembled.

 

It involves accurate and systematic division of the design of the product into manufacturing of the parts and then assembling them in the best possible technique.

 

It is most suitable for the manufacturing of clothes It is most suitable for the manufacturing of automobiles and its parts.

3) Quality function deployment (QFD) can be termed as a technique which helps to derive the quantitative parameters of the production from the qualitative needs of the consumers. It also involves considering the elements that are created and the components that are going to be produced from the customer point of view with the understanding that states that the demands that are put forth by the customer needs to be handled while developing and designing the product s (Akao, 2004). It helps to understand the requirements of the customers and transform the needs in terms of the product design and features.

Quality function deployment (QFD) to a specific product design is shown below:

It involves four phases which are:

  • Design-

It involves considering the customer’s requirements and evaluating the design of the product on the basis of that.

  • Details-

It involves coordinating the design requirements to the parts requirements which are going to be necessary for the product.

  • Process-

It involves considering the flow of operations that will be observed while carrying the production of the product.

  • Production-

It refers to the execution of the selected process and carrying the process of production as per the standards that are to be maintained and create a product that will satisfy the customer’s needs and in turn lead to huge sales of the product.

 

The customer’s requirements is taken as the input and reference for preparing the design. The elements and demands are analysed and developed while designing the product. After developing this, the output is in the terms of customer’s satisfaction of the product. The phases are very important in developing a design of the product and develop a product that will generate the maximum profit and sales in the organization.

 

4)  The production system is broadly divided into two categories (Yearnmin & Jinjoo, 1993):

  1. a) Intermittent production system:

It refers to a production system that follows a single line of production and the products are obtained at the end of the line following a specific sequence. Features of this production system is shown in below:

  • The flow of production in the intermittent system is not continuous as the product is produced in a line and hence the machines become free after producing or executing an operation until it gets the other production line in its queue.
  • Different variety of products can be produced due to the entire production of the product in flow and can be changed whenever a particular line is completed.
  • It is used where the volume of the products that are produced is small.
  • In this type of system, general machines are used and no specialized equipments in terms of the product development are not required.

 

  1. b) Continuous production system:

It refers to the production system that involves continuous production of a specific product without any kind of interruption.

The features of this type of production are as below:

  • The flow of operations is continuous as there is no halt in the production process.
  • The products that are developed are required to be following particular high standards for each and every component or part of the product.
  • Products are developed on the individual requirement of the customer in terms of the specification of the component which are assembled for the product.
  • Specialized machines and equipments for each and every component is utilized in the system

 

References

Akao, Y. (2004). Quality Function Deployment.

Basu, K., & Dick, A. S. (1994). Customer Loyalty: Toward an Integrated Conceptual Framework. Journal of the Academy of Marketing Science, 99-113.

Hallowell, R. (1990). The relationships of customer satisfaction, customer loyalty, and profitability: an empirical study. International Journal of Service Industry Management, .27 – 42.

Pine, J. B. (1999). Mass Customization: The New Frontier in Business Competition. Harvard Business Press.

Yearnmin, K., & Jinjoo, L. (1993). Manufacturing strategy and production systems: An integrated framework. Journal of Operations Management, 3–15.

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Posted on

April 3, 2018

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