Chapter 4

Case 3

III. Gold Star Chili: Customer and Market Knowledge

Although no discussion questions are raised at the end of the case (a disturbing fact for some
students who are overly focused on getting the right answer) some issues for discussion would
seem obvious.

Customer and Market Focus

Strengths

Gold Star has segmented its customers into three groups -- franchisees, restaurant
customers, and retail customers. They have carefully defined the characteristics of each.

To learn from customers, the company relies on face-to-face contacts, focus groups,
customer comment cards, customer surveys, and structured meetings. Each of these is
tailored to meeting the need of franchisees at various stages of growth of the franchise.
Some of these include:

- Geo-demographic analysis of locations prior to building

- Use of Franchise Service Representatives (FSRs) to stay in touch with franchisees and
their needs when placing orders

- Opportunities to listen and learn through regular franchise meeting and training sessions

- Regular comprehensive surveys using questionnaires

Evaluation of product and service features takes place through formal and informal
means, such as:
 - Informal determination of product and service features through quarterly and semi-
annual meetings, daily and weekly phone calls to FSRs, and discussions with
delivery personnel.

- Store managers contacts and discussion with regular customers

- Annual telephone surveys by a marketing consultant of 330 heavy chili users

Evaluation of listening and learning processes, both internally and as a way of

benchmarking competition:
- Mystery shoppers are used to visit Gold Star and competitor locations

- Company management reads trade literature regularly

- Store operators often develop ways of tracking customer satisfaction

Opportunities for Improvement

Although Gold Star gathers information on product and service features, it is not clear
how this information is used to make long-term product and service improvements

Customer Satisfaction and Relationship Enhancement

Strengths

Accessibility is provided through the previously mentioned franchisee meetings, surveys

and verbal contacts. For retail customers, verbal comments or customer comment cards
are used.

Directors of Operations act as consultants to deal with in-store problems. Verbal and
written complaints are entered into databases for monthly reporting, but are acted upon
immediately.

Complaints from retail customers are generally handled at the store level through service
recovery procedures, such as offering partial or total credit or a coupon for free food.
 Every comment card results in a letter and coupons, complaint cards result in a phone call
to the customer, and if needed, a three-way phone call between customer service
representative (CSR), customer, and franchisee will be initiated. Follow-ups and results
are recorded and tracked, with feedback on the resolution of each incident being provided
to the franchisee

Information about satisfaction of customers relative to competitors is obtained, tracked,

and fed back to franchisees. For consumers, satisfaction relative to competitors is
obtained from focus groups.

Opportunities for Improvement

Although the company appears to have a number of systems in place to determine

franchisee and restaurant customer satisfaction, it is not clear what procedures are
used for retail customer satisfaction and complaint management.

Chapter 5

CASE I. A Situational Leadership Challenge

1. The CEO of Plant A demonstrated a coaching leadership style. The CEO of

Plant B was using a supporting leadership style.

2. Given that the CEO of Plant A was working within a conserving culture
(unable, but willing), the Hershey-Blanchard model would suggest that a
coaching leadership style was an appropriate fit. However, Plant B had a
similar conserving culture. This suggests that a different leadership style
would not produce satisfactory results.

3. No, one should not be surprised at the lack of leadership effectiveness. The
supporting leadership strategy exhibited by the CEO of Plant B is most useful
in organizations that are able but unwilling. The leader facilitates
commitment and willingness by participating in decisions and supporting
implementation. Thus it would be appropriate to use this leadership style for
the able-unwilling level of organizational readiness, where the leader would
need to envision and communicate the future and develop the actions and
 roles to achieve the goals (supporting). Thus, it can be concluded that the
CEO of Plant B did not demonstrate flexibility in response to organizational
readiness to meet desired objectives.

4. The Bass and Avolio model of transformational leadership would also serve to
analyze the leadership style that would be likely to be most effective at the
two similar plants. In choosing between the mix of transformational and
transactional approaches, Bass would support the need for a more
transactional approach (emphasizing inspiring subordinates to exert
extraordinary efforts to achieve organizational goals, through behaviors that
may include contingent rewards, and active and passive management by
exception). The transactional approach, where leaders are more focused on
the satisfaction of self-interests and the maintenance of the organizations
status quo, would seem to better fit the conserving culture of Plants A an
B. Thus, the CEO of Plant A would seem to be practicing a more transactional
style, while the CEO for Plant B would appear to be a more transformational
leader.