Breaking the ice

(1)

Breaking the ice

How to deal with supporting tools?

Master Thesis

Rijksuniversiteit Groningen

Faculty of Economics and Business

Msc Business Administration

Specialization Business Development

Student:

E. Lammers

Number:

S1482092

Date:

09-07-2009

(2)

I would like to thank

Ice-World International and its dealers

and

Wim Biemans

(3)

...

40

Concluding remarks ... 43

Appendix 1. Questionnaire interview Ice-World ... 49

Appendix 2. Results interview Ice-World ... 51

Appendix 3. E-mail survey dealers ... 52

Appendix 5. Characteristics dealers ... 54

Appendix 7. Improvements for supporting tools ... 57

(5)

Introduction

This thesis concerns the results of the research about the supporting tools of Ice-World International. The introduction contains a number of components. First of all, background information of Ice-World International is addressed. Moreover, the problem identification describes the motive for performing this research. Furthermore, the objective, main- and sub questions are addressed. This chapter will be concluded with an overview of the chapters. Meanwhile, this overview clarifies the structure of this thesis.

Background information Ice-World International

Ice-World International (further called Ice-World) is market leader when it comes to selling and renting mobile ice rinks. Their offering could be divided into two parts which both contribute to the competitive advantage of Ice-World. The first part is the physical product offered: the mobile ice rink itself. By applying the newest technologies, it is possible to offer a mobile ice rink that is energy efficient, environmentally friendly, easy to install and dismantle, and they provide rapid ice formation and good ice at high temperatures (www.ice-world.com). The second part of the offering contains all products and services offered to help the dealer to improve sales, such as the magazine and the project plan. These products and services will be referred to as the supporting tools from now on. The common goal of supporting tools is to help the dealer and/or client to perform better.

Several parties are involved in the business process (figure 1). Ice-World has direct contact with dealers, each of which operates in one or more countries. These dealers have clients, who eventually exploit the ice rink. This research will only be based on the information gained from the dealers as is indicated by the green line. Ice-World is only indirectly connected to the clients; therefore all client information should be obtained in interaction with the dealers. It should be clear that the focus will be on the perception of the dealers; their level of satisfaction. The end users and sponsors are not part of the scope of this research and therefore positioned outside the dotted red line.

Information & revenues Main product & supporting tools Ice-World

International Dealer Client

End user

Sponsor

(6)

As mentioned before, Ice-World offers dealers supporting tools, which can be used to offer a better overall service to its clients. For example, the project plan in which the process of exploiting a mobile ice rink is explained step by step. To achieve continuous improvement, further research is requested to determine the level customer satisfaction of the dealers concerning the supporting tools. At the moment, dealer evaluations are performed annually, but only lead to ‘ad hoc’ adjustments of the supporting tools. Furthermore, the content and quality of the information gained is unknown.

Problem identification

Ice rinks supplied by Ice-World are expensive compared to market prices. However, Ice-World does not only offer an ice rink of high quality, they also intensively support the dealer and client. This concept is rather successful. However, Ice-World needs to strengthen its market position due to the upcoming competition. Moreover, it might be possible that they spend too much money on supporting tools that do not add to the level of satisfaction of the dealers and/or clients. Unfortunately, Ice-World has no precise indication of what to innovate on. Therefore, Ice-World should analyse the quality and effectiveness of the supporting tools in order to improve the set of supporting tools and to maintain its competitive advantage. Summarizing, Ice-World needs to focus on and improve the points that distinguishes it from competition: the set of supporting tools.

Objective

The objective of this research is to advise Ice-World about the content and composition of its set of supporting tools and the continuous improvement based on the level of satisfaction of the dealers. Main question

What should Ice-World do in order to improve its set of supporting tools to optimize the performance of the dealers and how can Ice-World maintain these improvements in the future?

Sub questions

×

What are the most important supporting tools that dealers should use according to Ice-World?

×

What are the goals of the most important supporting tools according to Ice-World?

×

What is the level of satisfaction and importance of the dealers of the most important supporting tools?

×

Are the current supporting tools in line with the demands of the dealers?

×

Is it possible to segment the dealers based on their demands?

× How can the current supporting tools be improved?

(7)

Content of chapters

In this section, the content of each chapter is outlined. This overview of chapters clarifies the structure of this thesis.

The first chapter gives an overview of the research performed to find out Ice-World perceives the following supporting tools most important: website, project plan, magazine, Google campaign, and organisation chart.

The second chapter addresses the theoretical background. Both the concept of customer satisfaction and the level of importance are explained. Moreover, the link between those aspects is discussed, which leads to importance-satisfaction model (I-S model). The I-S model will be used as a framework in this thesis.

Chapter three describes the research design and research methods used. Both data collection processes are explained, namely the e-mail survey and telephone interview. Furthermore, attention is given to the dealers involved in this research.

Chapter four contains the results of the research performed concerning the five main supporting tools and the concept of segmentation is explained. The results are presented based on the segmentation and recommendations to Ice-world are done for each supporting tool to improve the quality of the supporting tools. The segmentation is an important part of the recommendation since it is useful for Ice-World to find patterns in answers of dealers in order to group dealers based on their common needs.

The continuous improvement of the total set of supporting tools provided by Ice-World is discussed in chapter five. The opportunities of Ice-World are discussed by explaining four steps of continuous improvement: internal organisation, external communication, dealers learn from dealers, and frequent up-dates. Together, those four steps form the cycle of continuous improvement.

The research will be finalised with the conclusion.

(8)

Figure 1.1: Primary and secondary supporting tools

Secondary supporting tools

Ice-World Dealer Client

Primary supporting tools

Chapter 1. Supporting tools

Introduction

This chapter gives an overview of the research performed in order to answer the first two sub questions: ‘What are the most important supporting tools that dealers should use according to Ice-World?’ and ‘What are the goals of the most important supporting tools according to Ice-Ice-World?’. This chapter starts with explaining the meaning of supporting tools. Secondly, the current process of developing and allocating supporting tools is outlined. Thirdly, the research methods used to determine the most important supporting tools according to Ice-World are explained. The following five supporting tools turn out to be the most important ones: website, project plan, organisation chart, magazine, and Google campaign. Finally, these five supporting tools are discussed in more detail based on the interviews with employees of Ice-World.

1.1 What is a supporting tool?

Ice-World distinguishes itself from competitors by offering more than just a mobile ice rink. Instead, Ice-World offers a complete concept including loads of experience. Several supporting tools are developed to support both dealer and client. The more a supplier adds value to a product or service, the more distinctive that product or service becomes to the client (Butz et al., 1996). The key point is that clients need assistance from the seller in order to get the most value and satisfaction from marketing products (Burger et al., 1995). Every supporting tool has its own objectives. Therefore more than one supporting tool should be allocated at the same time. By offering a set of supporting tools, Ice-World wants to accomplish the following two goals:

1)

Goal to the dealer: Make the dealer more profitable

2)

Goal to the client: Allow the client to solve his own problem

Supporting tools can be divided into primary and secondary supporting tools when considering their focus. Primary supporting tools are aimed at helping the client, which can be used by the dealer to give better support or to learn more about the matter.

On the other hand, secondary supporting tools are developed to help only the dealer. Both types of supporting tools are shown in figure 1.1. Different packages of supporting tools are allocated to different dealers. However, the decision making for the allocation of supporting tools is ad hoc.

1.2 Current process of developing and allocating supporting tools

(9)

1.3 The most important supporting tools

For obtaining information about Ice-World and its supporting tools, data collection is performed in two ways: a document study and in-depth interviews. Firstly, the document study is performed because it is helpful to make use of existing documents as a source of information to get acquainted with the organisation and supporting tools (Van Aken et al., 2007). Old newsletters, minutes of annual meetings with the individual dealers, documents containing information about dealer organisations, and the supporting tools themselves are studied. An important advantage of documentation is that it may provide information that organisation members have partly or completely forgotten or have not consider relevant. Therefore, a document study is often more reliable than an opinion of a member of the organisation (Van Aken et al., 2007). Furthermore, it gives an impression of who the dealers are and the way Ice-World and the dealers communicate. Based on the information gained by the document study, the in-depth interviews that follow start at a higher level since the content of the supporting tools does not need to be explained anymore.

Secondly, in-depth interviews are performed with four employees of Ice-World: the founder and CEO of Ice-World, the director operations, the sales manager, and the marketing manager. They all work with the supporting tools. However, they will all look at them from another perspective. Therefore, they should all be included in the research.

The in-depth interview is a prominently used method when motivations and attitudes of respondents need to be discovered (De Pelsmacker, 2006). The goal of an in-depth interview is to gain rich qualitative data, from the perspective of selected individuals, on a particular subject (Hesse-Biber et al., 2006). It is very important to ask questions such as ‘why?’ and ‘how?’ in order to clarify those matters. When performing interviews, the interviewer will use her own interpretation (Billiet et al., 2006) and therefore it might be that the researcher has some influence on the results (Jonker et al., 2000). In order to avoid this kind of bias, the interviews are structured as much as possible. By combining the classical interview with structured questions and an in-depth interview, the right information will be gathered. This results in a qualitative semi-structured interview which is shown in Appendix 1.

(10)

Figure 1.2: Website 1.4 Results

The interviews result in a list of six supporting tools that can be distinguished as the most important supporting tools that a dealer should use according to Ice-World (table 1.1). The upper four (website, project plan, training sessions, and magazine) were chosen by all four employees. The average rating explains the level of importance according to the employees, in which 1 stands for the most important supporting tool and 8 represents the least important supporting tool. The last two supporting tools (Google campaign and organisation chart) were chosen by three employees. The average of the latter two supporting tools is calculated by dividing the cumulative ratings by three instead of four. The remaining supporting tools were chosen by just one or two employees or not chosen at all, and therefore not perceived as important. The results of the interviews are shown in Appendix 2.

Table 1.1, Main supporting tools

Average rating Times chosen

Website 2,5 4 Project plan 3 4 Training sessions 4 4 Magazine 4,75 4 Google campaign 3,3 3 Organisation chart 5,7 3

Although these six supporting tools turned out to be the most important, this research will just entail five of them. The training sessions are not operational yet and therefore the dealers are not acquainted with this supporting tool. Therefore, this supporting tool will be excluded from the research and the focus will be on the other five supporting tools, from now on called the five main supporting tools. All five will be described based on the interviews with the employees of Ice-World and the document study.

1.5 Selected main supporting tools

This section discusses the five main supporting tools on which this research is based. An explanation of each supporting tool is given. Furthermore, the goals of Ice-World are outlined based on the in-depth interviews performed.

1.5.1 Website

(11)

Figure 1.3: Project plan The website contains information about the dealers, current and future products such as the aluminium mobile ice rink, and stories about completed projects. The better the website informs outsiders, the higher the quality of the leads will be for the dealers. In the end, it is not about the amount of leads, it is about the amount of leads that result in an order, also called profitable leads.

This supporting tool is a primary tool, because it should provide information to (potential) clients and it should help the dealer in their own activities. The website is also an image builder that visualizes Ice-World is a professional player and market leader. Dealers can use this website to show they are part of this large organisation.

Concluding, according to Ice-World, the website provides information to (potential) clients and dealers and it improves the amount and quality of leads. Moreover, the website creates brand awareness and shows that dealers are part of Ice-World.

1.5.2 Project plan

The project plan explains how a mobile ice skating event should be managed from the beginning up to the end. It is a primary supporting tool since it is meant both for dealers and clients. It has been used for two years now. Client should use it as a guide, since it provides them a complete and structured overview of the financial and organisational aspects based on twenty years of experience in exploiting mobile ice rinks. The project plan contains documents like time schedules, standard contracts and letters, and suggestions for acquiring sponsors and attracting associations.

Dealers should use this supporting tool as bait for clients, since they are

only allowed to hand over this document after the client has signed the contract. In meetings with potential clients, dealers should make clear collaborating with an Ice-World dealer means that clients obtain much more than just a mobile ice rink. Of course, dealers could also use the project plan to learn more about the process since not all dealers have exploited a mobile ice rink themselves in the past.

In short, Ice-World has developed the project plan to inform both dealers and clients. First of all, it provides a complete and structured overview of the financial and organisational aspects. Moreover, the project plan supports the client with information about the organisational structure. Finally, suggestions are included about how to approach parties like sponsors and associations.

1.5.3 Organisation chart

The organisation chart is an operational supporting tool, which is including the project plan. Since the organisational chart is considered very important by Ice-World, this supporting tool is also researched apart from the project plan. This makes it possible to have a more detailed focus on the quality organisational chart itself.

(12)

Figure 1.4: Magazine

Figure 1.5: Google campaign the operational side of exploiting an ice rink, this is the most important primary supporting tool. For example, the document contains all roles and responsibilities. When (parts of) the project fails, it is easy to clarify who is responsible for the mistakes made. Furthermore, this supporting tool could result in large costs savings, because it creates awareness of efficiency. This tool has been used for many years now and it especially useful for new dealers.

Concluding, the organisational chart supports both dealers and clients with a shortcoming of organisational structure and operational knowledge. Moreover, using this supporting tool could result in large costs savings.

1.5.4 Magazine

This primary supporting tool is used for image building because it shows that the dealer is part of a larger organisation just like the website. This is very important since this distinguishes Ice-World from the small companies in the market. The magazine discusses stories and successes of Ice-World and makes them visual. This is essential for convincing potential clients.

In 2008, Ice-World produced the magazine in six different languages. All dealers were asked to send stories for the magazine. The first generation of the magazine was written as a way of communicating from ‘Ice-World to

the world’. This year, the third generation will be developed. This magazine could better be described as a way of communication from ‘the dealer to the world’.

Summarized, according to Ice-World, the magazine creates brand awareness and shows that dealers are part of a large organisation. Furthermore, the magazine gains trust of (potential) clients by reflecting the professionalism of Ice-World and its dealers.

1.5.5 Google campaign

The Google campaign is part of the mix communication on the Internet. The more you will encounter the name ‘Ice-World’, the higher the brand awareness will be. In fact, the Google campaign is the driver of the

website which should generate leads. People who search on Google will use keywords to find what they are looking for. When using a Google campaign, you can attach key words to your website. To attract real potential clients, the choice of words used is of main importance which means the right information should be depicted. The supporting tool is mainly focused on increasing the results of the dealers and therefore it is a secondary supporting tool.

(13)

Customer satisfaction

Overall satisfaction Transaction-specific satisfaction

Perceived quality Perceived value Customer expectations

1) Customization 2) Reliability

1) Emotional 2) Practical

3) Logical

Figure 2.1: Overview customer satisfaction

Chapter 2. Customer satisfaction and importance

Introduction

This chapter focuses on the literature required for answering the third sub question: ‘What is the level of satisfaction and importance of the dealers of the five main supporting tools?’. Firstly, customer satisfaction is defined and its antecedents are explained. In section two the link between customer satisfaction and importance is described, which results in the satisfaction-importance model. This model will be used as a framework for this research.

2.1 Customer Satisfaction

This section entails a number of definitions of customer satisfaction and many antecedents of customer satisfaction are discussed. Furthermore, the antecedents and their dimensions are outlined (figure 2.1).

Since the 1970s, both academics and practitioners have recognized the importance of customer satisfaction (Jones et al., 2000). The improvement of service quality has become a major strategy for improving competitiveness and therefore the identification of customers’ requirements and the measurement of satisfaction levels became two crucial activities for enterprises (Yang, 2003a). Customer satisfaction has a direct impact on the primary source of future revenue streams for most companies (Fornell, 1992) and finding out about customer preferences will allow one to provide customized products and superior service to current customers which will entail further sales as well as a boost in image so that new customers can be gained (McColl-Kennedy et al., 2000). After all, when measuring customer satisfaction, the firm measures one of its most fundamental revenue-generating assets: its customers (Fornell et al., 1996).

(14)

2000), because it influences the research. Since satisfaction should be seen as an overall post purchase evaluation (Fornell, 1992), the focus of this research will be on all ‘moments of truth’ with a certain supporting tool. This is where customers form judgements about the offering (Huber et al., 2007). Whereas transaction-specific satisfaction may provide specific diagnostic information about a particular product or service encounter, overall satisfaction is a more fundamental indicator of the firm’s past, current, and future performance (Anderson et al., 1994). Therefore, this research focuses on overall satisfaction and, for simplicity, in this research is referred to overall satisfaction as customer satisfaction (Lam et al., 2004).

2.1.1 Antecedents of customer satisfaction

Customer satisfaction should be translated into a number of measurable models that evaluate customer satisfaction and organisational operating efficiency (Chen et al., 2007). It has been perceived in one-dimensional terms: the greater the fulfilment of desired quality attributes, the higher would be customer satisfaction (Yang, 2005). However, there are some quality attributes that fulfil individual customer expectations to a great extent without necessarily implying a higher level of customer satisfaction (Yang, 2005). Following Fornell et al. (1996), customer satisfaction has three antecedents: 1) perceived quality, 2) perceived value, and 3) customer expectations.

2.1.2 Perceived quality

The first determinant of customer satisfaction is perceived quality or performance, which is explained as the served market’s evaluation of recent consumption experiences (Fornell et al., 1996). It has a direct and positive effect on overall customer satisfaction (Fornell et al., 1996). Two primary components of consumption experience are customization and reliability. Customization is the degree to which the firm’s offering is customized to meet heterogeneous customer needs (Fornell et al., 1996). Moreover, customization can also be described as the fit between customer needs and company’s product offerings, which improves customer satisfaction and market performance (Hegde et al., 2005). Therefore, this research should focus on the customization of the supporting tools.

Reliability is the degree to which the firm’s offering is reliable, standardized and free from deficiencies (Fornell et al., 1996). Since Ice-World uses a supporting tool because dealers have a lack of knowledge about that subject, the dealer is not able to estimate whether the supporting tool will be reliable or not. However, they do have an opinion about the reliability of Ice-World in general, but this is not relevant for this research. Therefore, reliability is not included in this research.

2.1.3 Perceived value

(15)

Anderson et al, 2009). Huber et al. (2007) explain in their article that there is a clear and systematic relationship between customer value and customer satisfaction: the greater the perceived customer value, the greater the level of satisfaction with the product or service offered. This implies the importance of measuring perceived value for this research.

According to De Ruyter et al. (1997), value can be divided into three dimensions: emotional, practical and logical. The first dimension is emotional, which entails the feelings of the respondent during the experience of service delivery (De Ruyter et al., 1997). This dimension is not explicitly measured in this research, but the emotion dimension will become of more importance when discussing the answers and during the telephone interviews with the dealers. Applying more than one research method makes it possible to gather different kinds of information.

Secondly, practical items pertained to the functional objects of the encounter (De Ruyter et al., 1997). This dimension is essential for supporting tools because it focuses on the usability.

Finally, logical items focus on the rational components of the service, such as service quality together with price (De Ruyter et al., 1997). Since all supporting tools are part of the total package, you do not pay for a specific tool. Therefore, measuring price in combination with quality is not at issue at first sight. However, it becomes essential when questioning if dealers would be willing to pay for a specific supporting tool in order to clarify whether they would really sacrifice something for it or that they just welcome it when it is for free. This gives an indication of the level of satisfaction. For this reason, the price component or logical item should be included in the research. Moreover, it also clarifies the level of importance, which will be discussed later on in this chapter.

2.1.4 Customer expectations

(16)

Customer satisfaction

Overall satisfaction Transaction-specific satisfaction

Perceived quality Perceived value Customer expectations

1) Customization 2) Reliability

1) Emotional 2) Practical

3) Logical

Figure 2.2: Overview decisions customer satisfaction

Figure 2.2 summarizes all decisions made in this section concerning customer satisfaction. The green boxes demonstrate the subjects that will be used for this research, whereas the red boxes contain the subjects that are not relevant.

2.2 Importance

The purpose of a customer satisfaction survey is not only to learn about the actual satisfaction level, but also to highlight the strengths and the area for improvement (Yang, 2003b). Firms can obtain much valuable information for improvements by a comparison between the satisfaction levels and the degree of importance attributes (Yang, 2005). This provides very useful information to help firms make more precise decisions on quality strategies (Yang, 2003a). Therefore, Ice-World especially needs to pay attention to those quality improvements which dealers consider to be highly important (Yang, 2003a). From this concept, a model called the importance-satisfaction model (I-S model) can be developed (Yang, 2003a).

2.3 Importance-satisfaction model

The I-S model showed in figure 2.3 distinguishes four different areas, which all require other steps to be taken by the company. First of all, the excellent area, where the attributes are located that customers considered being important, and for which the performance is satisfactory to customers. Retention of customers requires that performance in these attributes is continued. Secondly, the to be improved area entails the attributes that are considered as important to customers but the customer has perceived dissatisfaction on these attributes. The

company must focus on these attributes and make improvements immediately. Thirdly, the attributes plotted in the surplus area are not very important to customers, but the perceptions of the customers are quite satisfactory. If the company needs to cut costs, these are the attributes that can be eliminated without incurring a significant negative impact on the customer satisfaction. In other words, they should perform those quality attributes by using fewer resources, which makes improvement in this area possible (Chen et al., 2007). Finally, the care-free area, where the attributes are located that are

high mean

low high

(17)

less important and satisfactory to customers. Firms do not need to pay much attention to these attributes, since customers pay less attention concern to these items. All effort put into those attributes would be a waste of energy and resources.

(18)

Chapter 3. Research methodology

Introduction

This chapter describes the research design and research methods used. Moreover, both data collection processes are explained, namely the e-mail survey and telephone interview. Furthermore, attention is given to the dealers involved in this research. Finally the research criteria - controllability, validity, and reliability - are discussed and elucidated.

3.1 Research design

De Pelsmacker et al. (2006) distinguish four different research designs. Exploratory research is mostly used in the beginning of the market research process in order to gain information. In experimental research hypotheses are tested. Descriptive research can be applied after gathering a large data set by strongly structured questionnaires should be investigated. Finally, causal research is performed when causal relationships need to be examined.

This research can be characterized as an exploratory research, since neither the level of customer satisfaction and importance perceived by the dealers nor the fulfilment of goals of Ice-World by using the supporting tools are researched before.

3.2 Research methods

Two different methods can be distinguished when applying an exploratory research, namely interviewing privileged witnesses and a case study (De Pelsmacker et al., 2006). The latter one can be described as an extensive study of one or more matters or cases, with the objective to be able to make assumptions and conclusions (De Leeuw, 1996). This research focuses on the case of Ice-World. Secondly, interviewing privileged witnesses is a qualitative research method where a small number of respondents will be interviewed which are not randomly selected. By combining those two methods, different sources of information are used to view one case from many perspectives. The following section will explain the process of data collection performed in this explorative research.

3.3 Data collection

The process of data collection can be divided into two stages. In the first stage, data is gathered to determine the level of customer satisfaction and importance of the dealers. This is done by an e-mail survey. Next, telephone interviews are performed in order to obtain more and deeper information. Surveys and interviews have different advantages and combining them may therefore yield complementary results (Van Aken, 2007). Both methods are explained and applied in this section. 3.3.1 E-mail survey

(19)

Questionnaires are commonly used to reflect the customer satisfaction levels (Hung et al., 2003). The researcher should clearly specify which type of satisfaction is being measured so the respondents can provide accurate feedback consistent with the study’s objectives (Jones et al., 2000). Therefore, each of the statements is supported by a short explanation of what is meant. By using highly structured questionnaires to gather data in advance of a telephone interview, the interview will be more effective and in-depth because there will be information to build on.

Table 3.1: 5-point Likert-scale based on Cooper and Schindler (2006, p. 337)

‘Statement’

Strongly agree Agree Neither agree nor _disagree Disagree Strongly disagree

(5) (4) (3) (2) (1)

With regard to validity and reliability, a five-point Likert-type scale and a seven-point Likert-type scale are commonly applied in most research (Hung et al., 2003). A Likert-scale consist of statements that express either a favourable or an unfavourable attitude towards the object of interest and the participant is asked to agree or disagree with each statement (Cooper et al., 2006). This research will use a 5-point Likert-scale (table 3.1), which creates enough space for dealers to express their opinion and it is relatively straightforward to evaluate. The use of this type of relational scale is in keeping contention that quality can only be evaluated through relative comparison within a customer’s evoked set of goods or services (Schvaneveldt et al., 1991). Each response is given a numerical score to reflect its degree or attitudinal favourableness, and the scores may be summed to measure the participant’s overall attitude (Cooper et al., 2006). The average score cannot become the sole means in performance evaluation owing to different degrees of standardization (Hung et al., 2003). Since dealers answer from their perspective according to their function in the organisation and dealers differ in size and age, all information should be interpreted individually in order to be correctly.

Table 3.2: Questions customer satisfaction

Antecedent of customer satisfaction

Dimension of

antecedent Explanation of dimension Statement

Perceived quality Customization Degree to which the firm’s offering is customized to meet heterogeneous customer needs.

This supporting tool helps the dealer solving his problem.

Perceived value Practical Functional objects of the

encounter such as usability.

This supporting tool is very easy to use.

Perceived value Logical A rational component that

combines quality and price. The dealer would pay for this supporting tool.

(20)

The second statement concerning practical items – this supporting tool is very easy to use – is important because of the usability and convenience of the supporting tool. The results of the usage of a supporting tool will be higher when the supporting tool is easier to use.

Finally, the last statement concerning logical items – I would pay for this supporting tool – is essential when questioning if dealers are willing to give up something in order to be able to make use of this supporting tool. This tells us something about the added value of the supporting tool for the dealers. The average level of customer satisfaction is measured by using equation 1:

Until now, we focused on measuring the level of customer satisfaction. According to Yang (2003b), the importance evaluation should be added to each attribute in the questionnaire of the customers’ satisfaction survey in order to obtain both the importance rate and the satisfaction level of each quality attribute considered in the questionnaire. However, in this case this would not make much sense. It is obvious dealers would prefer supporting tools to be adaptable to their individual needs, easy to use, and for free. Therefore, the level of importance should be researched in another and rather simple way: asking them directly whether the supporting tool is important to them. Besides the answer of dealers to this question, the importance can also be indicated by the use of the supporting tool, since not all dealers use all of the supporting tools. The degrees of importance can be assessed into two categories: ‘high’ importance if the degree of importance was greater than mean, and ‘low’ if below mean (Yang, 2003a). Again, the 5-point Likert-scale should be used.

In addition to the questions about the level of customer satisfaction and importance, it is essential to know whether and how the dealers use the supporting tool. Moreover, to ascertain whether or not the goals of Ice-World are accomplished by the supporting tools, it should be clear what problems are being solved by the different supporting tools and which ones are not solved. Therefore, two questions are addressed in this thesis. The first question is: ‘How do you use this supporting tool?’. By answering this open question, it clarifies if the dealer uses the supporting tool and it gives the dealer the opportunity to answer a rather simple question and get acquainted with the subject, also called an introduction question (De Pelsmacker, 2006). The second question is: ‘What problem(s) are solved by the use of this supporting tool?’. Several optional answers are given including the option for an open answer and it is possible to give multiple answers. See Appendix 3 for the whole e-mail survey.

3.3.2 Telephone interview

A telephone interview is one of the most favoured ways of contacting business decision-makers; it is inexpensive, quick, and it often has a high response rate (Wright, 2003). Although some authors state it is not possible to show samples or other appliances (Blythe et al., 2005), the telephone interview can be used successfully in conjunction with other methods such as an e-mail with information and figures

(21)

Figure 3.1: Locations of the dealers Orange flag: dealers involved in research White flag: dealers not involved in research

(Wright, 2003). Moreover, this is a good method to solve problems with large geographic distances. Moreover, telephone interviews should not take much time, because respondents will loose concentration which has impact on the results. Therefore, the e-mail survey is performed in advance of the telephone interview in order to clarify the level of customer satisfaction and importance and whether they make use of the five supporting tools.

The focus of these interviews will be on the fulfilment of the goals of Ice-World, which is essential for advising them. Furthermore, it is important to know whether the dealers are doing well, because when they are, Ice-World is doing well too. The telephone interview is also used to gain deeper information about for example contradicting answers and the usage of the supporting tools. Moreover, the experiences of the dealers are researched. Therefore, two questions are formulated: ‘What do you like about this supporting tool?’ and ‘How can this supporting tool be improved?’. Both are open questions. In that case, dealers will not be influenced. Furthermore, it is important to know whether dealers have other problems and if these problems are being solved by the support of Ice-World. This leads to the following three questions: ‘What is your biggest problem?’, ‘What is your solution for this problem?’ and ‘Does Ice-World support you in solving this problem?’. It is preferred to ask such questions during an interview since it is important to go into more detail or verify the response when needed, which it is not possible in an e-mail survey. Besides, answers for some questions might be hard to describe and it will be easier for dealers to express themselves during a conversation. The guidelines for the telephone interview are shown in Appendix 4.

3.4 Respondents

Thirteen dealers are approached to involve in this research. Eleven of them were willing to cooperate. They are all located in Europe (figure 3.1). More information about the dealers can be found in Appendix 5. Dealers are asked to participate in the e-mail survey and interview. Of every dealer, one person is being interviewed and the e-mail survey is either filled out alone or with the help of other people who also use the supporting tools. Ice-World Benelux is an exception, since this dealer is situated in the same building as Ice-World and

all three employees were willing to involve. Therefore, the answers of these three employees are taken together and for the I-S models, the average scores are used.

(22)

3.5 Research criteria

The research can be judged based on the three most important research oriented quality criteria: controllability, reliability, and validity (Van Aken et al., 2007). These are scientific claims (Jonker et al., 2000). They are important because they provide the basis for inter-subjective agreement on research results (Van Aken et al., 2007). All three are discussed in this section.

3.5.1 Controllability

This criterion deals with the fact that it should be clear how data is gathered, how respondents are selected, and how conclusions are developed (Van Aken et al., 2007). The detailed description of a study enables others to replicate it, so that they can check whether they get the same results (Van Aken et al., 2007). It is more likely, though, that others will not replicate it, but use the description to judge the reliability and validity or the study (Van Aken et al., 2007). In other words, controllability is a prerequisite for the evaluation of validity and reliability (Van Aken et al., 2007) and it is taken care of by discussing the research methods in detail which is performed in this chapter.

3.5.2 Reliability

Reliability refers to the consistency of results obtained in research (Gill et al., 2006; De Pelsmacker et al., 2006). It should be possible for another researcher to replicate the original research using the same subjects and the same research design under the same conditions (Gill et al., 2006). Furthermore, data should not be influenced by one or more characteristics of the research, such as the researcher, the measuring instrument, the respondents, or the situation (Van Aken et al., 2007). Therefore, the research methods should be well described in a way that could be performed by someone else.

Many interviews are performed in this research. It is very important that the right information is gathered instead of the information the researcher would like to hear. Therefore, it is important that interviews are well prepared. Noteworthy, the fact that the research is performed by an outsider who has no personal advantage of the results also adds to the reliability. Furthermore, the respondent should not be influenced by the researcher or other parties. Combining different kinds of research methods decreases the chance bias will occur (Van Aken et al., 2007).

3.5.3 Validity

(23)

Chapter 4. The five main marketing tools: analysis and recommendations

Introduction

This chapter focuses on the results of the research on the five main supporting tools (website, project plan, organisation chart, magazine, and Google campaign). The following three sub questions will be answered: ‘Are the current supporting tools in line with the demands of the dealers?’, ‘Is it possible to segment the dealers based on their demands?’, and ‘How can the current supporting tools be improved?’.

First of all, the concept of segmentation is explained. This is an important concept since it is useful for Ice-World to find patterns in answers of dealers in order to group dealers based on their requirements. Secondly, a comment is included about the way the I-S models should be interpreted. Furthermore, all relevant results of each of the individual supporting tools are outlined and explained. At the end of each section, a recommendation concerning the supporting tool is performed based on the result of the supporting tool and the segmentation. Finally, the chapter is concluded with two general findings. The results of the research can be found in Appendix 5 up to 8.

4.1 Segmentation

A common mistake made by companies is the misguided desire to be all things to all people. In today’s service economy, it is nearly impossible to design a service model to cover a huge range of customers and remain competitive across them. Instead, firms should design their service models for more targeted excellence by being specific things to specific groups (Frei, 2008). This process is called segmentation. The goal of segmentation is to split the market into groups of clients with the same needs to determine your marketing mix (Biemans, 2008). It is important to recognize that different customer segments have different values (Payne et al., 2001). Knowing to which segment the dealer belongs helps Ice-World in deciding how to support the dealer. It also clarifies the future wishes of a dealer after organisational changes. For example, the dealer will move to another segment with other needs. Whatever base of segmentation business market managers decide on, they should apply the following criteria to judge validity of their proposed segmentation scheme (Anderson et al., 2004):

1) Measurable: can the size, growth, or market potential of a segment be measured? 2) Profitable: how profitable is the marketing effort likely to be?

3) Accessible: can segments be identified and reached successfully?

(24)

Based on those criteria and in cooperation with Ice-World, four segment variables are formulated to group Ice-World’s dealers. These are segment variables that differentiate dealers the most:

1)

Sales: How much m² ice did the dealer rent in 2008? (small < 2500 m²; large ≥ 2500 m²)

2)

Duration relationship: How many seasons is the dealer cooperating with Ice-World? (beginning < 1 year; intermediate = 2 years; advanced ≥ 3 years)

3)

Product application: Is renting ice rinks the core business of the dealer or is this just one

part of their concept?

(core business; no core business)

4)

Experience: Did the dealer already have experience in renting ice rinks before they cooperated with Ice-World?

(experience; no experience)

Appendix 5 provides an overview of all segments and dealers involved, as well as the abbreviations of the dealers which are used in the I-S models. Section 4.3 up to 4.7 will discuss the five main supporting tools. When relevant, one or more segments are addressed.

4.2 Interpreting I-S models

In chapter two is described how the I-S model should be interpreted. Overall, dealers seem to be quite positive about the main supporting tools based on the e-mail surveys. However, these results were not confirmed by the results of the telephone interviews. The fact the e-mail survey lead to more positive results than the telephone interview can be explained by the fact that dealers are aware that the results will go to Ice-World directly. Results on paper are very strict. Dealers might not want to judge their supplier that negatively. However, during an

interview those feelings will be revealed.

Based on the previous, the I-S models should be interpreted differently than explained in chapter 2. Besides, Ice-World expresses itself as the best in market. Wim Hoeks, the CEO, explains: “We do not want to be a Fiat, we want to be a Mercedes”, which indicates Ice-World wants to challenge themselves. Figure 4.1 shows the borders of the areas have changed. Before, the score of 3 was the mean. Now, 4 is taken as the

border of the excellent area. high

3 3 low high 4 4

(25)

4.3 Website

In this section, the results of the research about the website are outlined and explained in the analysis. First of all, a short summary of the goals of this supporting tool of Ice-World is given. Secondly, the results from the I-S models are discussed. Thirdly, the in-depth questions of the interview are addressed. This section finishes with a recommendation to Ice-World about the website.

4.3.1 Summary goals Ice-World

According to Ice-World, the website provides information to (potential) clients and dealers and it improves the amount and quality of leads. Moreover, the website creates brand awareness and shows that dealers are part of Ice-World.

4.3.2 Analysis website

Opinions about the website differ very much. However, results are quite similar when looking at the results of segments (see figure 4.2 and 4.3). This explains the variance within some segments is large. Nevertheless, there are some remarkable results. Firstly, beginning dealers (imp=4,50) perceive the website as much more important than advanced dealers (imp=3,70) and intermediate dealers (imp=3,67). This might be caused by the fact that the own website of beginning dealers is not well developed yet or they still need much information of the Ice-World website themselves.

Secondly, dealers who’s core business is renting ice rinks (imp=3,50) do not appreciate the website as much as dealers of which it is not the core business (imp= 4,67) like Stage Electrics. This is caused by the fact that dealers primarily renting ice rinks offer much information about this concept themselves, whereas dealers with another concept or speciality offer a totally different website which makes both websites complementary to each other and therefore ads much more value to this segment.

The most common problems solved by the website are ‘lack of brand image’ and ‘not enough profitable leads’. Moreover, the amount of information provided to clients also seems to be a problem tackled by the website. However, the reactions of the dealers are contradictory. Particularly smaller dealers mention there should be more information on the website, like information about all steps of

(26)

the project including the steps where Ice-World is not involved, more technical information, and information about the operational costs. Providing more information on the website saves time for dealers because only serious clients will eventually contact them.

On the other hand, Ice-World Benelux mentions personal communication is more important than the website. There should be a difference in information provided for potential and actual clients. Potential clients should only receive the information needed to get interested and contact the dealer. When having contact in the early sales stage, the dealer can adopt to the wish of the client. This is a way of binding your client.

The way dealers would like to be presented on the website resulted in contrary results. Ice Business explains their potential customers think Ice-World is their competitor. The more suppliers offer aluminium ice rinks, the more trust the market will have in this product. In the end, both ways will lead to Ice Business. Therefore, Ice Business thinks it is positive that both Ice-World and Ice Business have a strong individual and separate identity.

However, small dealers like AMS and Lucky Luka experience it is really important to show they are part of a bigger organisation like Ice-World and therefore they would appreciate it to be more prominently presented. However, Ice-World assumes the website already fulfils dealers in this demand, which turns out to be untrue. Prominently presenting the dealers would also have a positive influence on the international character of the website and the image of Ice-World according to AMS. The website should be frequently up-dated. New pictures and projects demonstrating the opportunities of the product express Ice-World is a developing and entrepreneurial organisation. This will encourage potential clients according to VIP. Since 90% of the inquiries are gained by the internet, the website should be optimally used. However, this does not mean the website should only contain success stories. Sportprojekt feels you have to stay realistic. When a website is too perfect, it will deter people. 4.3.3 Recommendation website

When looking at the results, two different segments turn out to be important: age and whether renting ice rinks is the core business of the dealer. Beginning dealers would like to see more of themselves on the website like extra information for (potential) clients about the product and concept. Advanced dealers do not need this. Furthermore, dealers that rent ice rinks as core business do not need more information on the website, whereas other dealers do.

(27)

with a much higher importance rate than advanced dealers. This also indicates Ice-World should improve the supporting tool according to the requirements of the beginning dealers.

On the other hand, beginning dealers can also use their own websites in order to promote being part of the Ice-World group. At the moment, even the beginning dealers that pointed out they would like to be more prominently present at www.ice-world.com, do not express clearly they are a part Ice-World on their own website. For example, when visiting the website of Atlantida, it is possible to go to the website of Ice-World without noticing just by clicking on a link.

Concerning the amount of information on the website the same applies to dealers that rent ice rinks as core business and dealers that do not. Dealers that do not particularly require more information, in this case the dealers of which renting ice rinks is the core business, will not be harmed. However, dealers of which renting the ice rink is just one aspect their concept, a more detailed website will be of great additional value. Furthermore, the I-S models shows that the segment of dealers that do not rent ice rinks as their core business is located in the to be improved area of the I-S model, with a much higher importance rate than the segment of dealers of which renting ice rinks is the core business is located more closely to the care free area. This confirms that Ice-World should make efforts for improving the supporting tool according to the requirements of the beginning dealers.

4.4 Project plan

In this section, the results of the research about the project plan are outlined and explained in the analysis. First of all, a short summary of the goals of this supporting tool of Ice-World is given. Secondly, the results from the I-S models are discussed. Thirdly, the in-depth questions of the interview are addressed. This section finishes with a recommendation to Ice-World about the project plan.

Ice-World has developed the project plan to inform both dealers and clients. First of all, it provides a complete and structured overview of the financial and organisational aspects. Moreover, the project plan supports the client with information about the organisational structure. Finally, suggestions are included about how to approach parties like sponsors and associations.

4.4.2 Analysis project plan

(28)

in getting organisational structure, and operational- and financial knowledge. Especially beginning and intermediate dealers lay behind in all three aspects.

Moreover, the project plan is based on the Dutch market and according to many dealers this supporting tool can only be used for this market, as their markets are different. Dealers can use parts of the project plan for their own business, but it is hard to distinguish which part is adaptable for them. Therefore it takes some years to develop a suitable project plan, which most advanced dealers did. Furthermore, several advanced and intermediate dealers who did not adapt the project plan themselves explain the project plan is too simple and contains too much obvious information. HIL did only use the project plan in the beginning. Nowadays, HIL does not use it anymore. Sportprojekt encounters many customers who say: ‘It is written for someone stupid!’. Both confirm the project plan contains much valuable information, but it is written for the beginner, not for the advanced.

The previous could explain why large and advanced dealers like Ice Business might have more advantage of their project plan than small and intermediate dealers such as HIL have of the original project plan of Ice-World. Beginning dealers like AMS just started working with the project plan. Those dealers did not yet experience the shortcomings of the project plan, but they probably will encounter the same problems as intermediate dealers did later on.

The absence of up-dates and physical examples are observed by many dealers. Besides, some dealers are not using the project plan at all, while others only use parts of it. Unfortunately, Ice-World is not aware of this. They know neither who is really using the supporting tool nor what changes are made to adjust it to the local market.

4.4.3 Recommendation project plan

However dealers confirm the problems solved as expected by Ice-World, they also state many things should be improved. Dealers of which Ice-World expects they could optimally benefit by using the project plan, do not value this supporting tool that high and they are not very satisfied. Moreover, most

(29)

advanced and more developed dealers only use parts of the project plan or they adapted it to their requirements. Ice-World could use those changes in order to develop a new or upgraded project plan. Since the usage of this supporting tool is different depending on the age of the dealer including its experience, it could be attractive to develop a project plan which is applicable for each level perhaps in an online version.

Moreover, the project plan should be more interactive. In the end, clients should use the project plan regularly. Therefore there should be thought of a way to involve them. Ice-World Benelux came up with the idea to motivate clients to develop something innovative and practical that could be added to the project plan. The project plan will become more like a rolling document in this way, which is a document that changes over time. Moreover, since the project plan is frequently adapted, dealers and clients will have to keep track of the changes which encourages reading and using the project plan. 4.5 Organisation chart

In this section, the results of the research about the organisation chart are outlined and explained in the analysis. First of all, a short summary of the goals of this supporting tool of Ice-World is given. Secondly, the results from the I-S models are discussed. Thirdly, the in-depth questions of the interview are addressed. This section finishes with a recommendation to Ice-World about the organisation chart.

The organisational chart supports both dealers and clients with a shortcoming of organisational structure and operational knowledge. Moreover, properly using this supporting tool could result in large costs savings.

4.5.2 Analysis organisation chart

The organisation chart is valued the worst. It has the lowest average results of all dealers in both the perceived level of importance (imp=3,56) and customer satisfaction (CS=3,04). Notably, beginning dealers do think this supporting tool is the most important one (imp=4,50). This might be caused by an information disadvantage of operational- and organisational knowledge. Beginning dealers require a structured overview to focus on. Contrary, advanced dealers (imp=3,63) and intermediate dealers (imp=2,50) value the organisation chart as the least important one. They have used this supporting tool in their first years, but adapted it or do not use it anymore. Unfortunately, Ice-World is not aware of this. They know neither who is really using the supporting tool nor what changes are made to adjust it to the local market.

(30)

Completing the whole organisation chart is very time consuming, which caused some dealers to give up using this tool. Furthermore, by spreading out the information over more sheets, mistakes are easily made. Moreover, it is such a big stack of paper that a dealer should bring many bags to carry all your clients’ organisation charts.

Furthermore, the organisation chart is too much focused on the beginner and not on the more experienced dealers. Unfortunately, the supporting tool does not totally answer the wishes of the beginning and inexperienced dealers too. For example, it does not mention why certain fields should be filled in and why they are essential for a successful project.

Finally, most dealers do not confirm the fact that using the organisational chart will lower their costs due to higher efficiency. However, Ice-World distinguishes this as one of the benefits dealers can gain. 4.5.3 Recommendation organisation chart

According to Yang (2003a, p.314), when attributes are perceived both less important and less satisfactory, firms do not need to pay much attention to these attributes, since clients pay less attention concern to these items. However, Ice-World considers this supporting tool to be very important. Therefore, something dramatically has to change in order to convince dealers that it really makes sense to use this supporting tool.

Ice-World Benelux suggests an online version of the organisation chart, which will provide both clients and dealers are more involved and all participants have insight at the agreements made. Just like the project plan, the organisation chart should be a rolling document with the possibility to easily adjust the issues required according to the level of knowledge of the individual dealer or client. Furthermore, mistakes will not be made anymore, since it is possible to install a computer programme that checks all answers filled out.

(31)

4.6 Magazine

In this section, the results of the research about the magazine are outlined and explained in the analysis. First of all, a short summary of the goals of this supporting tool of Ice-World is given. Secondly, the results from the I-S models are discussed. Thirdly, the in-depth questions of the interview are addressed. This section finishes with a recommendation to Ice-World about the magazine.

Summarized, according to Ice-World, the magazine creates brand awareness and shows that dealers are part of a large organisation. Furthermore, the magazine gains trust of (potential) clients by reflecting the professionalism of Ice-World and its dealers.

4.6.2 Analysis magazine

Demonstrated by the I-S model, three segments show significant results. First of all, large dealers (imp=4,80) consider the magazine much more important than small dealers (imp=3,50). Secondly, advanced dealers (imp=4,67) perceive the magazine quite important in contrast with intermediate (imp=3,33) and beginning dealers (imp=3,50). Finally, experienced dealers in renting ice rinks (imp=4,60) appreciate the magazine much more than dealers without experience in this field (imp=3,67).

Most dealers agree the magazine is informative for clients, builds brand awareness, and creates trust. However, dealers realize the magazine is very expensive, which causes they do not distribute the magazine to just every interested person which suggests their awareness of the costs influences the way they use it. Some dealers only hand it over to seriously potential clients; others let them have a look at it. Many dealers expressed it is a pity not to be able to give something to your potential clients to impress them. Something potential clients can bring home and have a look at when they are rethinking their plans. This does not need to be as large as the magazine. As the Chinese proverb says: ‘A picture is worth a thousand words’.

(32)

The magazine would be more effective if it would be more adapted to dealer markets. Language is the main factor, but also the content should be more specified to the characteristics of both culture and market.

Especially large dealers like Ice Business prefer to be able to distribute a magazine that looks like they developed it themselves for their potential clients. Ice-World could be mentioned of course, but they would like their image and brand to be central. In that way, the content can be adjusted to the characteristics of the culture and market of the home country of the dealer.

4.6.3 Recommendation magazine

The I-S models show the level of importance varies between the dealers and segments, however they are all quite satisfied (imp= between 3 and 4). All segments are located in the to be improved area. Upgrading the magazine could be provided by creating more space to dealers to fill up their own pages and supplying it in more languages. The magazine shows the professionalism of Ice-World, which creates trust.

However, the need for a new supporting tool is expressed between the lines. Dealers want to be able to give something to their clients and they should be able to spread this amongst potential clients as a means of promotion without considering the costs. It could be something they can give to their clients instead of the magazine. AMS says: ‘The more supporting tools, the better for the client’. This potential supporting tool must meet the following requirements:

Show many pictures and examples of the possibilities with the ice rinks of Ice-World; Adaptable to the needs and image of the dealer;

Relatively cheap to produce;

Easy to implement improvements and new information.

Ice-World could develop an online template which enables dealers to develop their own brochure. Dealers can choose from all pictures included in the programme which could be uploaded by other dealers too. Moreover, they can either select their own logo or use both the one of Ice-World and their own one. These logos should be provided by Ice-World in order to prevent abuse of Ice-World’s house style. It is possible to include text boxes written in the dealer’s own language. Besides, information can be adapted to the requirements of the client. For example, some clients will be more interested in technical information whereas others are interested in operational information. The costs of printing the brochure will be covered by the dealer; Ice-World only provides the online template. It is the decision of the dealer to print many different brochures in order to show more possibilities or stick to one version. Furthermore, there will not be any transportation- or storage costs and the brochure will never be outdated.

Breaking the ice

Breaking the ice

How to deal with supporting tools?

Master Thesis

Rijksuniversiteit Groningen

Faculty of Economics and Business

Msc Business Administration

Specialization Business Development

Student:

E. Lammers

Number:

S1482092

Date:

09-07-2009

I would like to thank

Ice-World International and its dealers

and

Wim Biemans

Table of contents

...

40

Introduction

×

×

×

×

×

Chapter 1. Supporting tools

1)

2)

Chapter 2. Customer satisfaction and importance

Chapter 3. Research methodology

Chapter 4. The five main marketing tools: analysis and recommendations

1)

2)

3)

4)