Peapod Service Quality: Gap Analysis and Recommendations Essay

One of the pioneers of online grocery legal transfer serve up, Peapod LLC was founded in 1989 even in advance the dot-com era by brothers Andrew and Thomas Parkinson to cater to people who cherished a more than convenient way of obtain for groceries. (Peapod LLC, 2008) In its soft beginnings, Peapods founders were deeply involved in the business, even victimization their profess cars to deliver courtumer orders. (Ibid) Peapod then partnered with Jewel Food Stores, Safeway, land up & Shop, Giant, and The Kruger go with before it was fully acquired by Royal Ahold in 2001.Today, Peapod is touted as a leader in the online grocery incubate service with over 120,000 registered guests. (Lunce, Lunce, & Maniam, 2006, p. 60) worry and Consumer Expectations Clearly, the Peapods success in a highly competitive internet-based trade do-nothing be attributed to a management that is knowledge fitted about consumer expectations. (Ibid) in that location is a corking fit between ma nagement and consumer expectations. Undoubtedly, Peapod appeals to consumers because it alters them to more expeditiously screen alternatives so that they can focus on alternatives that match their preferences. (Andrews & Currim, 2004, p. 43)Online shopping is also associated with convenience, as it allows consumers to look for and order products almost instantaneously using electronic agents that use information about an individual consumers proper(postnominal) preferences and the alternatives available. (Ibid) At the same time, the internet platform allows Peapod to know more about consumer expectations and to use this information to improve operations and processes. Peapods Commitment to run QualityPeapods business model itself speaks of the managements awareness about the fashion and preferences of its target market, and its commitment of role service lecture an online grocery warehousing that delivers grocery products right into higher income, higher opportunity cost of time, and time-starved (Andrews & Currim, 2004, p. 43) households who hands down order these online. Peapod has ensures that it maintains its captive consumer base through and through advertising and marketing strategies.The Peapod website, for instance, allows the companionship to communicate its main purpose of being more of a time-saving service and not merely a shopping service (Lunce, Lunce, & Maniam, 2006, p. 59) to consumers and also depends firmly on word-of-mouth advertising. Actual Service Quality Delivery and communication theory Lunce, Lunce, and Maniam (2006) observe that Peapod has increased the use of the internet to change the shopping experience altogether. (p. 0)This centre that Peapod was able to fully automate customer service processes through its main website, including providing customers with the ability to compare product specifications, maintain a list of their preferent brands and types of products for faster transactions. Likewise, Peapod clearl y tries to maintain a sense of quality through its employees, especially Peapod drivers involved in the delivery of the orders who are at the frontline of Peapods operations and customer interaction. (p. 61)Unfortunately, Peapod is not free from weaknesses. This is evident in Peapods logistics formation, particularly on its ability to achieve timely deliveries, which could make the phoner suffer from an erosion of customer confidence in their services. Holmstrom, Tanskanen, and Kamarainen (1999) argue that the weakness in Peapods service is receiving of the products (p. 2) by the costumers, which is related to the companionships difficulties in working with tight time windows for delivery and receipt by the ordering household.For consumers, the concept of an online grocery also carries higher service quality expectations. For an online grocery delivery business, it is likely that the narrower the time window and the more fast the delivery is, the higher the customer satisfactio n is, which has a positive ferment upon the repeat purchase. (Lunce, Lunce, & Maniam, 2006, p. 56) Based from the authors personal experience, it has become more difficult to schedule a delivery in Peapods system because of the increased number of consumers who order groceries from the company.The encounter with difficulties in scheduling for the delivery was unanticipated, as a customer expects Peapod service to be as good based from company promotion and as attested by some(prenominal) of its customers. This reflects a gap in the Peapods actual service delivery vis-a-vis the concept of convenience that the company tries hard to communicate, which affects the consumers perception of Peapods overall service quality and customer responsiveness. If left unaddressed, this could result to a decline in repeat purchase from customers.Analysis and Recommendation At the core of Peapods delivery problems is the level of integration in the companys operations from the online ordering proce ss to delivery booking and scheduling. It should be noted that Peapod operates only in five key cities in the united States, using a hybrid statistical distribution system wherein Peapod utilizes its own storage warehouse and distribution center in Chicago duration exploiting the infrastructure of its brick-and-mortar supermarket partners Stop & Shop and Giant in other areas.Holmstrom, Tanskanen, and Kamarainen (1999) argue that while Peapods hybrid distribution network allows it to lower operating costs, Peapod still has to maximize this distribution network to make more prompt and efficient deliveries. (p. 3) Peapod presently offers two modes of delivery attended and unattended delivery wherein customers have the preference of personally receiving their orders or having their orders delivered although they are not home. (Lunce, Lunce, & Maniam, 2006, p. 6)However, both mechanisms pose constraints in terms of cost efficiency as attended delivery requires a certain density of c ustomers to reside within the target market while unattended delivery requires a high initial investment cost but has a low utilization rate, and slow growth of demand. (Lunce, Lunce, & Maniam, 2006, p. 57) To address customer complaints about delivery difficulties, Peapod can enhance its existing delivery systems by increasing the number of its delivery personnel and transportation in order to give way manage the increased bulk of orders.The company can also evaluate its existing employee training program to address gaps in the companys human resources ability to chance higher customer service quality expectations and demands. Likewise, Peapod can also upgrade its service features to enable automatic order replenishment aside from the deliver-on-demand system. This would enable the company to incorporate its business with the household economics of its target market and facilitate better delivery schedule planning. Holmstrom, Tanskanen, & Kamarainen, 1999, p. 2) The replenishme nt system, which is focused on grocery telephone circuit replenishment of Peapods loyal customers, would reduce the stress put on the delivery system by random orders and ensure that the company is able to meet consumer expectations. Clearly, the main gap in Peapods business is its inability to meet customer expectations on prompt delivery, which is caused by weaknesses in its distribution process.This affects the consumer perception of Peapods service quality, which in turn could have an adverse impact on company sales and profitability. Thus, the company needs to psychoanalyse the efficiency of its existing distribution network and enhance its capacity to meet consumer expectations either through restructuring or improving the current distribution fleet, or develop a new mechanism which lessens random delivery pressure sensation and enables the company to focus on its most loyal patrons.