CUSTOMER STUDY B

A year passed after Miller and his team conducted their customer research study of Ashley, Gallery, and Star.

"Local retailers should consider increasing variety of merchandise they offer," concluded a junior analyst after looking at the retailers' mean satisfaction scores on merchandise. Miller disagreed with the analyst. Further examination of the customer study revealed merchandise was one of the least important strategic areas driving overall satisfaction at $11\%,$ while store $(20\%)$ and return policy$/$service recovery $(20\%)$ were the two most important strategic areas.

Miller was wrong, however, when it came to pricing. Before analyzing the customer data, he had concluded, "Pricing must be a big deal in the industry. Almost every ad from these retailers features price discounts and price$-$matching guarantees." Customer analytics showed otherwise. Price carried the lowest weight $(0\%)$ in driving overall satisfaction among the strategic areas. Although price was salient in advertising,

As a next step, Miller sought financial and behavioral data on retail furniture customers. "The retailers will perk up when they can see how much money they could make if they deliver on the right aspects of customer value," he concluded.

Miller's initial customer survey recruited $300$ respondents who had shopped at each of the three retailers $($Ashley$,$ Gallery, and Star$)$ in the last five years. He led a follow$-$up survey in which the same $300$ customers were asked whether they had purchased items from each of the retailers in the last year and, if so$,$ how much they purchased. See Exhibit B for a description of selected survey items from the follow$-$up study.

The data from the follow$-$up study was concatenated with the initial study. See Appendix A for definitions of variable names.

The research team wanted to use the information to help the local furniture retailers align their budgets with customer needs.

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This document is authorized for use by Niki Wells, from $01/04/2024$ to $05/04/2024$

$3310$: Marketing Research$/$Analytics $-$ Pattabhiramaiah $($Spring $2024),$ Georgia Institute of Technology

in the course: MGT $3310$: Marketing Research$/$Analytics $-$ Pattabhiramaiah $($Spring $2024),$ Georgia

Any unauthorized use or reproduction of this document is strictly prohibited.

Customer$-$Based Execution & Strategy

CUSTOMER STUDY B EXERCISE QUESTIONS

Miller's team conducted store visits and determined similar types of furniture at Ashley, Gallery, and Star were priced at $$800,$$$900,$ and $$850,$ respectively, including taxes, net discounts and promotions. Using this information, answer the following:

a$.$ What is the perceived value that customers receive from Ashley, Gallery, and Star? Use the customer value equation to calculate the weighted value.

b$.$ What is the relative price charged by Ashley, Gallery, and Star?

c$.$ What is the relative value provided to customers by Ashley, Gallery, and Star?

d$.$ Using the value map graphing supplemental file, which retailer provides the most value to customers?