Customer Service Strategy and Segmentation in Food Retailing using the Importance-Performance Paradigm

Abstract

This paper will provide a framework on how to design a customer service strategy and apply it to the food industry in Greece. Building a customer service strategy requires the evaluation of marketing and logistics service elements, the identification of importance-performance gaps in relation to those elements, and the segmentation of the service offered. To evaluate service elements, retailers were asked to rate the elements′ importance and the food suppliers′ performance. To identify importance- performance gaps, a paired samples t-test was used. Statistical differences between importance and performance exist in various customer service elements. To reveal different retailer segments, a cluster analysis with K-means was applied. The cluster analysis indicates that the prior classification of multiple food retailers according to their annual purchases of food products (hypermarkets, supermarkets, and convenience stores) affect their ratings on the importance of customer service. This study provides insight into the customer service-based segmentation. In addition, it provides an approach to identify customer segments by using the importance-performance analysis.