It is often said that the ‘consumer is always right’ and customer satisfaction is paramount for success in a business, so when a major increase in customer complaints of a large Australian food service company occurred it initiated a review. The review identified that 75% of the complaints originated from meat meals. Product quality ranked highest by customers in a benchmark survey study of 761 customers of 12 international and national food service company outlets. This case study reports how a large Australian food service company utilised a best practice strategy, to reduce customer complaints by 96%. It did this over a two-year period by improving customer-eating satisfaction of beef and lamb meals by 34% and 53% respectively. Strategies used to achieve these results included closer relations with customers and suppliers, improvements in quality and consistency of meat meals, comprehensive and efficient quality controls, including accurate specifications and monitoring procedures, development of staff skills and moral and influential leadership.
This case study discusses these outcomes in relation to the adoption of a best practice strategy within an Australian food service company and the use of product testing to achieve better specifications. An overview of the problem, outline of the implementation strategy, discussion of results and implications for other foodservice companies are presented.
Customer satisfaction is considered crucial for the financial success of food service companies as customer dissatisfaction leads to customers switching to competitors (reduced customer loyalty) and the risk of adverse comments being communicated to potential clients. Recent research (Adebanjo 2001) highlights the effect that customer satisfaction has on the financial success of an organization. It found that nearly all dissatisfied customers (98%) would switch to a competitor without complaining. However just a small reduction in customer defection (5%) can result in profit increases from 30 to 85% for the company. These results are in accordance with AMC (1994c) and The Australian Customer Service Association (unpublished 1995) where they quote ‘only 4% of dissatisfied customers complain, 91% of dissatisfied customers will never come back, one dissatisfied customer tells more than eight people of the problem and one in five tells twenty people’.
Individual companies are gaining market share and improving profitability while a number of industry-based initiatives are having little impact on overall red meat meal sales. The major reason for these successes is that the companies have become customer focused at the Corporate and individual outlet levels (Carr & Johansson 1995; Womack, Jones & Roos 1990).
The development of best practice management procedures will enable companies to continually respond to their customers and develop a competitive advantage over competitors. The accurate identification of consumer issues will ensure that the focus of marketing, research and development departments of food service industry companies is more efficient and will result in a higher success rate of initiatives (AMC 1994c).
Some of the major aspects of customer satisfaction in the food service industry include customer service, quality of ingredients and meals, value of the offer, variety and consistency of product lines, acceptable ambience, etc. Meat as the ‘centre piece’ of many food service menu items provides the potential to affect customer satisfaction. Red meat product quality and consistency has been identified as a major factor in the success of food service companies utilising these products. However, even the successful red meat producers have a difficult task because of competition from poultry meat is intense. The use of poultry meals has more than trebled since the late 1960’s (ABS 2000). Important reasons are its quality, variety and consistency. In 2000, CSIRO released results of its National Survey which showed that over 12 years, women’s red meat consumption has dropped by 45 % and men’s 40 % (Baghurst 2000). The challenge for mature food service markets is to increase red meat meal profits by adopting best practice principles that focus on accurately identifying and improving customer satisfaction.
After a brief overview of current research, this paper will present a detailed case study of a best practice strategy, which was successfully implemented in a major food service industry company, in Australia. This strategy was used to increase customer satisfaction of red meat meals and reduce customer complaints. Implications of the findings for other food service companies are also presented.
Understanding customer needs is complex, time consuming and requires accurate collection of information. A focus on customer satisfaction is the key performance indicator leading to successful outcomes from the implementation of best practice (AMC 1994a; AMC 1994b; AMC 1994c; Carr & Johansson 1995; Hammer & Champy 1994).
The literature reviewed was unanimous that the approval of the customer is paramount and a thorough understanding of their needs and expectations essential. Successful organizations will anticipate, identify and respond to their customers on a continuing basis (Adebanjo 2001; Logie &Quest 2003; Meyer 2000; Terziovski, Sohal & Samson 1996). Customer satisfaction is usually the key factor that identifies the need for change (AMC 1994c).
Within the study of ‘customer satisfaction’ there is an established theory of expectancy disconfirmation whereby the difference between the expected and the perceived meal determines the consumer’s level of satisfaction (Yuksel & Rimmington 1998). Alas, Brunso, Fjord & Grunert (2002) have documented the intricacies that lie just within the concept of consumer’s perception of food quality stating, ‘consumers have complex, vague and sometimes contradictory wishes with regard to food quality’. To understand the consumer’s requirements a multitude of variables must be considered and Garver (2003) states that many different ‘listening-tools’ must be used to identify improvement opportunities.
Suggestions from customers often result in innovative ideas that lead to improved products and /or processes (Lindgreen & Crawford 1999). Additionally, a system needs to be in place where inherent knowledge of customers’ requirements/preferences is captured from employees to improve customer satisfaction (Yang 2003). To achieve consistency, management needs to set standards and guidelines to meet the customer’s needs. It is essential that employees be committed to achieving these standards. Training and education of staff are necessary to ensure the workforce acquire and apply the skills necessary to obtain these standards (Logie & Quest 2003; Thiagarajan & Zairi 1997). In a case study where customer-focused initiatives were introduced into a Danish food company, it was found that 43% of customers rated the company as a better supplier and customer retention rose to 94% (Lindgreen & Crawford 1999).
The Australian Quality Council (1994b) identifies seven key areas of successful organization performance as being leadership; customer focus; policy and planning; information and analysis; people; quality of process, product and service; and organisational performance through measurable data from key indicators.
Best practice management procedures must start with and maintain executive support. Commitment, involvement and guidance from top management are vital to an organization establishing a ‘quality’ environment in which the needs of the customer are addressed (Carr & Johansson 1995; Lindgreen & Crawford 1999; Mann, Adebanjo & Kehoe 1998; Terziovski, Sohal & Samson 1996; Thiagarajan & Zairi 1997).
One best practice measure of ascertaining the significance of customer satisfaction is to benchmark competitors. Benchmarking is used to objectively search competitors or those organizations recognised as leaders in a specific area of the industry. Learning by borrowing from the best and by adapting their approaches to fit your own needs is the essence of benchmarking (Best Practices, LLC 2003). Best practice is now widely implemented within manufacturing companies in Australia. However, there has been little adoption within the food service industry, especially in the red meat products segment.
While best practice has been identified as a key contributor to improving customer satisfaction in many industries, participants within the Australian meat industry including many meat scientists have mainly focused on the tenderness issue. Tenderness has been identified as the major palatability trait leading to customer satisfaction (Koohmaraie 1994; National Cattlemans Association 1994; Morgan et al. 1991; Morgan 1992; Savell & Shackelford 1992). Researchers however, have identified many reasons for the decline in beef sales including concerns of healthiness and diet (Cross & Saville 1993; Richardson MacFie & Shepherd 1994; Teys 1993) and competitive pricing of alternative meat sources (Gorny & Atmadi-Esfakan 1993).
Due to confidentiality the name of the food service company is not disclosed and a delay in publication has occurred to allow competitive advantage opportunities. However the issues raised within this case study are still relevant today. The Company is one of the largest food service companies in the Southern Hemisphere with national facilities supplying approximately 14 million meals per year or 38,000 meals per day. The main facilities supplying approximately 70% of these meals are located in NSW, Victoria and Queensland. Meat is a major component of these meals with 450 tonnes of beef, 225 tonnes of lamb and 275 tonnes of chicken used annually. In addition to the large number of domestic customers, finished meals are also supplied to 30 international and 2 State Government catering companies. These international business companies request specialised cuisines, including Thai, Chinese, Korean, Malaysian, Indian, Japanese, halal and kosher meals. There are approximately 2,600 employees from more than 66 nationalities. This cultural mix of staff is a major marketing and skill base in meeting international customers’ requirements. The Company has a sound reputation for consistently delivering the highest quality of product and service standards.
A major increase in customer complaints initiated a review, identifying that over 75% of complaints originated from meat meals (Moffat D. pers. com. 1992). These complaints led to constant changing of suppliers with no significant improvements being forthcoming. However, the continual changing of suppliers lead to no long-term relationship development with suppliers, increased costs in tendering, selection and education of new suppliers, and no lasting commitment to supply quality products as price became the overriding factor. Consequently, suppliers developed a strong view that a lower price was all that was required. However, the expectation was that value for money should be the underlying purchase criteria and the price should reflect the quality delivered, not ‘mutton substituted for lamb’.
Problems were solved in the short term but lack of consistent quality re-emerged. The company’s knowledge of the preparation and presentation of meat products was very good but limited in quality standards and procurement techniques, including poor communication of specifications to existing suppliers, thus hampering product quality improvements.
While a lack of industry-specific knowledge was acknowledged, it was of interest that other industry participants also demonstrated a significant degree of fragmentation of knowledge. Few sectors of the industry understood or showed interest in the end consumers’ requirements; most were production and cost/price-focused businesses. The philosophy of ‘customer is king’ was not widely accepted by meat suppliers. Some meat suppliers would present high quality meat products to win supply tenders, but after a period of time, ‘shandy’, lower, out-of-specification product with good product. If this out-of-specification product was not detected the proportion was likely to increase in future consignments. Meat products that are not to specification often need to be reworked generating inefficiencies of labour and added costs. Meat products rejected at one food service outlet were often presented at another outlet for acceptance.
Meat suppliers voiced strong opposition to amending the current program and claimed any change would lead to a 300% increase in prices.
In response to this situation, the Company developed a best practice meat quality program with the following objectives:
There were two key components of the strategy used to increase customer satisfaction. The first involved the best practice procedures and the second pertained to the actual testing of product. The program centred on meat quality, as red meat products had the highest level of customer complaints.
The progress and outcomes of this program were incorporated into best practice initiatives including:
Trained company sensory panellists nationally assessed 700 beef and 430 lamb samples for taste, tenderness and overall satisfaction over the duration of the implementation program. All panellists were chefs or purchasing personnel employed by the company at various foodservice outlets around Australia.
Different beef and lamb product lines were assessed and analysed. The results reported are for all beef and all lamb products unless identified. The number assessed in each product line for the three food service outlets are included in Table 1.
Product Line |
Number of Samples |
Product Line |
Number of Samples |
|||
B |
50-60g fillet |
18 |
L |
Rack |
35 |
|
E |
90-100g fillet |
40 |
A |
Noisette |
79 |
|
E |
120g fillet |
138 |
M |
Cutlet |
49 |
|
F |
150g fillet |
82 |
B |
Backstrap |
54 |
|
700-900g fillet |
19 |
Leg |
34 |
|||
Tenderloin - Whole |
61 |
Loin |
21 |
|||
Striploin |
110 |
Leg Medallions |
36 |
|||
Tenderloin |
28 |
|||||
Total Beef Products |
468 |
Total Lamb Products |
336 |
Samples assessed have been sourced from randomly sampled normal production or from tendered samples. Both production and tendered specifications were identical for each product line.
The samples assessed were sourced from the 13 main suppliers of beef and lamb.
All samples were assessed for the following:
The raw beef and lamb samples were assessed against specification sheets and pH measurements were taken at the same time. The product was then prepared in identical circumstances to normal commercial production. These were then individually sensory tested by trained panellists. The samples were scored on a scale of ‘1’ to ‘6’ with ‘1’ relating to ‘very poor’ and ‘6’ being ‘excellent’
Systat V5.03 was used to perform all the statistical analysis with T-Tests and Analysis of Variance applied to assess differences between data sets.
At the commencement of the Best Practice Meat Quality Program, the food service company case studied in this paper was facing an industry-wide dilemma with red meat in Australia. There were increasing customer complaints from beef and lamb meals served. Chicken was beginning to be substituted for red meat in many meals.
The company identified that there was a need to change due to the increasing number of complaints, that is, lack of customer satisfaction.
A Best Practice Meat Quality Program was initiated and this led to significant reductions in customer complaints by increasing the taste, tenderness and overall satisfaction sensory scores and increasing the consistency of red meat products (outlined below). Customer complaints for beef and lamb meals reduced from 23 per month for the three food service outlets assessed at the start of the program to 1 per month after 2 years of the meat quality program, a reduction of 96%. In the commercial environment, the reduction of customer complaints by 96% can result in significant profit enhancements (Adebanjo 2001).
Customer satisfaction was the key performance indicator assessed. In line with the work documented by Brunso et al., (2002), a thorough understanding of the consumer’s needs and expectations was sought by judicious structuring of the questions in the benchmark surveys. A main meal Benchmark survey of 761 international and national customers with product sourced from 7 international and 5 national food service outlets was conducted to prioritise customer needs (Table 2) and rank Australian food service compared to leading international companies (Table 3).
Criteria |
Average Score (Scale of 1 to 5) |
Average ranking of customer’s primary needs |
Quality of food |
3.8 |
1 |
Hygiene |
4.2 |
2 |
On time delivery |
3.3 |
3 |
Value for money |
3.4 |
4 |
Consistency |
3.3 |
5 |
Compliance with specification |
3.4 |
6 |
Menu advice |
3.8 |
7 |
Special requests |
3.3 |
8 |
Rectify problems |
4.0 |
9 |
Backup service |
4.0 |
10 |
The benchmark survey showed the quality of the food was the customers’ primary need.
On time delivery and consistency of product were ranked relatively high at third and fifth respectively, but both scored equal lowest average rating on current level of performance.
Food Service Outlet |
Tenderness Score |
Overall Satisfaction |
Bangkok |
9.2 |
8.4 |
Brisbane |
5.0 |
Not available |
North Queensland |
8.4 |
8.6 |
Frankfurt |
8.6 |
10.0 |
London |
9.0 |
8.2 |
Los Angeles |
9.6 |
8.1 |
Nagoya |
9.6 |
8.9 |
Perth |
8.0 |
8.8 |
Singapore |
7.1 |
7.5 |
Sydney |
9.4 |
9.1 |
New Zealand |
6.8 |
7.7 |
Tokyo |
8.8 |
9.2 |
Average Score |
8.3 |
8.6 |
Scale of 10 to 1 where 10 equals excellent and 1 equals very poor
The Australian food service outlets included in the survey had varied results with Sydney being the only outlet to score above average for meat tenderness. Brisbane actually received the lowest score. All Australian outlets performed above average for overall meal satisfaction.
The surveys also identified that red meat meals were not consistently delivered to the prescribed degree of doneness. The delivery of customers’ chosen degree of doneness in restaurants significantly impacts overall consumer satisfaction (Cox et al. 1997). All cooking manuals for each food service outlet surveyed describe that beef and lamb meals should be cooked to a medium degree of doneness, however, the delivered degree of doneness varied significantly (P< 0.05) as shown in Table 4:
Delivered degree of doneness |
Percentage of consumers within the degree of doneness classification |
Rare |
10.8% |
Medium/Rare |
21.5% |
Medium |
44.6% |
Medium/Well Done |
13.9% |
Well Done |
9.2% |
After analysis of the benchmark surveys, the results were discussed with the company and a general set of performance indicators developed to focus on the key issues identified and to allow on-going measurement of improvement. The analysis of the benchmark results provided the basis for defining consumer requirements in objective terms, identified competitive strengths and weaknesses of the leading firm, and pointed to new marketing and management opportunities (AMC 1994b; Carr & Johansson 1995).
The team approach combining the food service company and their suppliers enabled new specifications to be written that accurately delivered what the consumer required. All specifications were written in terminology that was familiar to suppliers – Ausmeat Language. Giles & Sinclair (1994) discuss the need to use familiar language for greater collaboration. A more efficient purchasing procedure resulted.
The program delivered training to all food service outlets through a workshop approach. The format embraced all aspects from meat palatability theory, technical skill procedures and principles of an effective quality assurance program. The training included identification of suitable trained taste testers for monthly testing procedures and facilitators who were further trained to deliver company training on an ongoing basis. As discussed by Thiagarajan & Zairia (1997), it is through training programs that staff gains knowledge and accepts ownership of the best practice program.
Suppliers were encouraged to participate in these training programs to expose them to end-product outcome requirements. The combination of food service quality assurance personnel and meat suppliers receiving the same training resulted in both segments of the supply chain having a better understanding and commercial approach to delivering meat meals of the correct quality for their customers (Logie & Quest 2003).
Trained taste panels were established to monitor the eating quality of random beef samples from commercial production on a monthly basis. Meat suppliers were continually updated with results of customer surveys and random monthly sensory results resulting in effective two-way communication (Carr & Johansson 1995; Giles & Sinclair 1994; Logie & Quest 2003). The development of a team approach gave very significant and quick improvements to the consistency and quality of meat supplied and inturn a reduction in complaint levels
The results of the monthly product testing were studied at three different outlets of the food service Company. Assessments were reported over a 13-month period commencing at the start of the meat quality program in each of these outlets.
In order to analyse the ‘trends over time’ of the tested product, data was classified and grouped according to the month number of testing at each centre. Month 1 served to set the benchmark for trends studied. The change in average beef benchmark sensory scores for taste, tenderness and overall satisfaction are illustrated in Table 5.
Sensory Attribute |
Benchmark Average |
Average for Months 8 to 13 Inclusive |
Change in average |
Taste |
3.4 |
4.3 |
Up 24% |
Tenderness |
3.2 |
4.4 |
Up 36% |
Overall Satisfaction |
3.1 |
4.2 |
Up 34% |
The increase in the average scores of taste, tenderness and overall satisfaction were all significant. (P value < 0.01). The movement of the average sensory scores over the 13 months of testing is shown in Figure 1
This graph clearly shows that the level of cooked scores is in two distinct groups. The nature of this graph can be explained by the tendering process conducted in the sixth month of testing at each centre. Clearly the tendering procedure had a positive effect on the cooked scores.
There was also a significant difference between the benchmark sensory scores for taste, tenderness and overall satisfaction of lamb (P< 0.01) with the results displayed in Table 6. Additionally the mean pH of the lamb samples dropped significantly (P<0.01). Due to sample sizes the benchmark average used sensory scores for Months 1 to 6 for the lamb samples.
Sensory Attribute |
Benchmark Average Months 1 to 6 |
Average for Months 8 to 13 Inclusive |
Change in average |
Taste |
3.1 |
4.5 |
Up 24% |
Tenderness |
3.0 |
4.4 |
Up 36% |
Overall Satisfaction |
2.8 |
4.3 |
Up 34% |
PH |
5.82 |
5.69 |
The standard deviations also declined over the time frame for taste, tenderness, overall satisfaction and pH for both beef and lamb. This reduction in variability was also a desirable quality improvement. The lamb sensory monthly means are shown in Figure 2.
Efficiency enhancements were also achieved. One such improvement was to achieve an average ‘wastage saving’s percentage’ of 45% on seven major lines needing chef preparation. In a number of cases these developments were carried out at the supplier’s premises, thus creating further efficiency as any trimmings or portions not used could be utilised by a wider variety of clients. Table 7 outlines individual wastage saving percentages.
Product |
Wastage Savings % |
|
Beef Striploin (netted) |
75% |
|
Beef Striploin |
50% |
|
Beef tenderloin |
5% |
|
Veal Striploin |
12% |
|
Lamb Backstrap |
58% |
|
Lamb Leg Boneless |
12% |
|
Lamb Loin Boneless |
100% |
Real gains in lowering customer complaints were also achieved by innovation in developing improved cuts of beef and lamb. One example is the replacement of beef round for beef topside strips in wet cooked dishes. This new product was more competitive with chicken for dish preparation. Volumes were increased at one food service outlet from an average of 320 kg of beef topside per week to 1200-1500kg of beef round.
There is no doubt that the significance of the results of the Best Practice Meat Quality Program was primarily due to the commitment of people to make change. This commitment was delivered from the General Manager through to the Quality Assurance officers, chefs and supplier sectors. The vision for change varied from conceptual to one of developing a real competitive advantage at the General Manager level and one of improved technical basis at the Quality Assurance and chef levels.
People who could make change were identified and given responsibility to be ‘change agents’. There was implementation of a management culture to embrace ‘Best Practice’.
The best practice and benchmarking strategy implemented in this case study should be suitable over a wide range of large to medium food service companies, in a variety of demographic locations. The implementation strategy is flexible for the various segments of the industry and can be customised to individual company requirements. It should be noted that best practice is not about taking a model or template and simply imposing it on a given situation, it needs to be individually customised for the relevant company and improvement situation.
The following seven critical success factors are conducive to the success of best practice strategies implemented in other food service companies:
There are, however, numerous weaknesses with the program. Three of these weaknesses include:
Few examples of best practice improvement strategies are documented for the food service industry especially in Australia. Reducing customer complaints and increasing customer satisfaction are complex issues. Many food service companies concentrate on variety of menu, value for money, cost containment, ambience, service and marketing initiatives to gain a competitive advantage. The results from this best practice strategy rank quality of food as the number one priority customers identify when assessing customer satisfaction. Meat as the ‘centre piece’ of many food service menu items provides the potential to significantly affect customer satisfaction and thus business performance. This case study reports how a large Australian food service company utilised an implementation strategy, to reduce customer complaints by 96% through improving customer eating satisfaction by 34% and 53% respectively of beef and lamb meals over a period of two years. Strategies used to achieve these results included closer relations with customers and suppliers, improvements in quality and consistency of meat meals, comprehensive and efficient quality controls including accurate specifications and monitoring procedures, development of staff skills and moral and influential leadership.
Companies from within the food service industry must ensure that product quality and consistency of product meet their relevant customers’ requirements. This is more important in food service companies using perishable products due to the risk of inconsistency of product quality and a commodity and price-driven approach of supply chain partners.
While this study focused on reducing the complaints and improving customer satisfaction levels of red meat meals, the best practice strategy is generic in nature to suit a variety of improvement situations in large to medium food service companies.
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