2. The Copier Industry
In U.S. copier placements had grown up at a
slow rate of 2.9%
Xerox categorized the copier industry into 3
product markets:
• Low-volume market
a. Copiers made fewer than 50,000copies per
month
b. Costs less than $4,000.
c. Major players were
Canon, Xerox, Sharp, Mita and Ricoh.
3. • Mid volume market:
a. Copiers made upto 10,000 copies per month
b. Priced between $4,000-6,000
c. Major players were Xerox, Canon, Mita, Ricoh
and Konica.
• High-volume market:
a. Priced over $60,000
b. Major players were Kodak and
Xerox, Canon, Konica and Lanier competed in
the lower end of the market
4. Xerox - Company Profile
1959 : Haloid company launched model 914
office copier.
1961: Haloid was renamed to Xerox
Protected by a no.of patents
Xerox diversified into various new businesses:
• Purchased mainframe-maker scientific data
systems
• Office computing business including word
processor, document processing
workstation, networks, facsimile
equipments, electronic type writers and
financial service acquisitions.
5. The Background
IBM, Kodak, Japanese companies were main
competitors
Xerox’s cost and product prices were higher
than the competitors
Quality had declined
Market share and return on assets (ROA) had
fallen drastically
Market share dropped from 100% in 1960 to
under 40% in 1980
Japanese had 40%-50% cost advantage
6. Customer Segmentation at Xerox
Customers:
Commercial major accounts
Named accounts
General markets
Government and education
Distribution:
sold directly by Xerox sales force
Low volume and low priced mid volume
machines sold through dealer networks
Lowest priced machines sold through
consumer retail chains
7. Product line and Pricing
In 1990, Xerox had 2 lines of copiers:10 series
and 50 series
In 1990, Xerox had 18 copiers: 4 in low-end, 9
in mid range & 5 in high end
Xerox copier ranged from $2,440-$154,000
Had 30day/90day/3year warranty
Longer warranty- aggressive marketing tool
8. Customer satisfaction at Xerox
3 corporate priorities:
i. Return on assets
ii. Market share
iii. Customer satisfaction
Studies conducted showed customer satisfaction
was not the top priority in day-to-day
management of business
Issue of guidelines and requirements to
operating units to ensure customer satisfaction
Guidelines focused on reorienting the company
Operating units were given authority to respond
to customers’ requirements
9. Customer Service
Customer Service at Xerox had several dimensions:
• Fixing of units
• Providing operating systems support
• Communicating with customers
• Resolving customer issues
• Technical product support
• Feedback to manufacturing, sales, marketing and
administration
Quality of customer service was measured -
• Customer satisfaction based on Customer survey
• Expense to revenue ratio
• Reliability
• Service billing errors
10. Vision and goals
To be recognized as the industry benchmark in
customer satisfaction
Goal had 2 components:
I. External world
II. Internal world
To achieve goals- market driven business
strategies, product strategies, and investments
determined by customer requirements
11. Actions
Employees developed a proactive
attitude, role, work emphasis focused on
customer satisfaction.
Customer satisfaction code of conduct was
developed in the training curriculum
Leadership through quality tools and processes
Customer relations groups(CRG) were
initiated
Local empowerment
12. Measurement of customer
satisfaction
External measurement system:
i. Periodic survey
ii. Post installation survey
iii. New product post installation survey
iv. Competitive benchmarking customer
satisfaction survey
13. Internal measurement process:
i. Assessment of Xerox products and services
to the appropriate quality standards
ii. Routine, Monitor and inspect internal
performance
iii. Internal measures included
• service response time
• Billing errors
• Training hours per sales rep.
14. Data analyses, review and follow-up
Identified segment specific satisfiers and
dissatisfiers
Manage corrective action process
Root causes of problems were categorized and
tracked
15. Customer Guarantee
It was assumed that offering of guarantee
would lead to customer satisfaction:
1. Service guarantee
2. Money back guarantee
3. Product performance guarantee
4. Product fit guarantee
Survey conducted to find which guarantee
customers would prefer.
