Chapter i overview of service quality in the delivery of fmcg

It.According to TCVN 5814-1994, based on ISO-9001/2015 standard, the definition is given: "Quality is a set of characteristics of an entity object that gives that entity the ability to s

1.1 Theoretical basis of service quality

1.1.1 The concept of service, service quality

1.1.1.1 Service

In today's world, the economy is not simply made up of specific physical products, but also includes service products Services are considered a smokeless industry In developed countries, the proportion of services in gross national product is often very high

- Marx said: "Services are the offspring of the commodity production economy When the commodity economy develops strongly, it requires a smooth, fluid, and continuous circulation to satisfy needs As people's values grow higher and higher, services develop more and more."

Thus, by approaching from an economic perspective, Marx pointed out the origin and development motivation of services As the economy develops, the role of services becomes increasingly important and services have become the subject of research in many different disciplines: From economics to cultural studies, law, from administrative studies to science study management Therefore, there are many concepts of service in different broad and narrow senses

- In a broad sense: services are considered a third economic sector With this understanding, all economic activities outside the two sectors of agriculture and industry are considered to belong to the service sector

- In a narrow sense: service is understood as product software, supporting customers before, during and after consuming the product

Thus, it can be defined in the most general way: Services are social activities, creating goods that do not exist in a specific physical form, do not lead to the transfer of ownership to satisfy customers Timely satisfaction of production and daily life needs

of people The broad and narrow conception of services depends on the one hand on the level of economic development of each country in a specific historical period, and

on the other hand it also depends on the economic methodology of each country nation Within the scope of this topic, services are considered a field of activity of the national economy that includes all activities serving production and population life In this sense, service activities include commercial activities Because of its particularly important position and unique characteristics, commercial activities are often separated from the service category and considered equal to service activities But in this topic, trade - services are considered as an economic sector that carries out the process of circulating and exchanging goods and performing work to serve the consumption of production and population in the market

1.1.1.2 Service Quality

Service quality is viewed as the gap between customers' expectations and their

perceptions after using the service

Service quality is the ability of a service including overall durability, reliability, accuracy, ease of operation, ease of repair and other valuable attributes to perform its functions It

According to TCVN 5814-1994, based on ISO-9001/2015 standard, the definition is given: "Quality is a set of characteristics of an entity (object) that gives that entity the ability to satisfy requirements." stated or implied demand”

In summary: Service quality is the level of customer satisfaction in the process of perceiving service consumption, bringing a chain of benefits and fully satisfying the customer's expected value in production and supply activities response and in service delivery at the output

Because service quality is related to customers' expectations as well as their

perceptions of the service, service quality is difficult to evaluate Usually there are three basic levels of assessment of service quality:

- Service quality is good when customers perceive the service to exceed their

expectations

their

- Service quality is satisfactory when customers perceive it to be consistent with their expectations

- Poor service quality is when customers perceive their expectations for the service to

be below their level Therefore, to retain customers, businesses must ensure that their services are always evaluated from satisfactory to good Only then can businesses survive and develop sustainably

1.1.2 Dimensions of Service Quality

Tangibles

According to Khan & Fasih (2014, after, Blery, Batistatos, Papastratou, Perifanos, Remoundaki & Retsina, 2009), tangibles are seen to be perceptible by touch or a visible existence Information and Communication Technology (ICT), tools, sites, company’s employees and any visible facilities form the tangible dimension of service quality However, these tangibles are applied in various ways by the service providers and are perceived and experienced on different levels by the end users Tangibles are especially important to service delivery firm's as they are crucial variables to

developing strong, positive and inspiring customer association and experience,

through its proprietary assets (Naidoo, 2014)

Reliability

The process in which service provider remains faithful in rendering services to its customers can be considered as the reliability dimension of service quality (Khan & Fasih, 2014, after, Blery, et al., 2009) Reliability assures the customer of a service provider’s ability to consistently provide a perceived quality of service Reliability has

an impact on trust and the overall impression left in the mind of a customer after service consumption (Abd-El-Salam, et al., 2013) The reliability dimension of service quality is vital and perceived through the people aspect of service quality (Kaura, et al., 2012)

Assurance

Khan & Fasih (2014, after, Blery, et al., 2009), states that the process of acquired knowledge being showcased by staffs in executing their term of preferences during service delivery can be highly assuring to customers This gives customers the

confidence that the service delivery representative will perform his/her duty

professionally and ethically Naidoo (2014) argues that not all customers have the expertise to understand the quality of service and values they received, and as such may require effective communication or personal explanations to understand the value they receive This service quality dimension is performed through the people aspect of service quality (Kaura, et al., 2012)

Empathy

Khan & Fasih (2014, after, Blery, et al., 2009) state that empathy is the ability for service delivery firms to pay attention to individual customer problems and demands, then address these issues effectively Khan & Fasih (2014, after, Blery, et al., 2009) also argues that the way the company takes responsibility to address problems faced

by their customers on an individual or group level is classified as empathy This service quality dimension is perceived through the people aspect of service quality (Kaura, et al., 2012)

Responsiveness

The process in which service providers react quickly to resolve customer problem positively within a given time is called responsiveness (Blery, et al., 2009) This dimension of service quality is perceived through the people aspect of service quality However, information technology advancement like emails, webpage and customer service interface improves the responsiveness of service delivery firm (Kaura, et al., 2012)

1.2 Theoretical basis of the delivery of Fast-Moving Consumer Goods

1.2.1 Concept and classification of fast-moving consumer goods

1.2.1.1 Concept

FMCG is the fast-moving consumer goods industry, a sector defined by

products that sell quickly at relatively low costs This means that fast-moving

consumer goods companies rely heavily on profits based on the volume of goods sold The more products sold and the faster they are sold, the greater the profit For large

manufacturers, hundreds or even thousands of products can roll off the production line

in a minute The fast-moving consumer goods industry is often classified into four sectors as follows: Household appliances, personal consumption items, food and beverage, and basic healthcare items

From the consumer's perspective, fast-moving consumer goods products are relatively cheap and essential for daily consumption, such as food, beverages and other household necessities This means that fast-moving consumer products must always be available in stores and markets near residential areas Usually large fast-moving consumer goods companies do not sell directly to users but use a network of retailers to provide products to customers

Thus, there will be many supply services to transport goods from

manufacturers to distributors, from distributors to retailers to customers Because the sales volume of this industry is high with a large network of retailers, distribution is a very important and valuable operational step Supply management is always under heavy pressure to minimize costs in this stage

1.2.1.2 Classification

We can see that fast-moving consumer goods are a group of goods that cannot

be repaired when damaged or have a short lifespan and are consumed at a rapid pace Fast-moving consumer goods currently include the following groups:

+ Processed food group: includes products such as cheese, cereals, canned noodles,

+ Prepared meals: are meals that have been prepared

+ Beverages: Including bottled water, bottled purified water, soft drinks, fruit juice,

+ Fast food: Biscuits, toast, etc

+ Frozen foods, fresh foods and dry goods: Including green vegetables, fruits, beans, frozen carrots, nuts and dried grapes, etc

+ Medicines: Including pain relievers or other medicines that can be purchased without a prescription

+ Cleaning products and chemicals: Such as floor cleaner, baking soda, glass cleaner,

+ Cosmetics and personal items: Lipstick, powder, skin and hair care products, toothpaste, toothbrush, soap,

+ Stationery: Ruler, pencil, eraser, crayons, chalk, board,

1.2.2 Factors affecting the fast-moving consumer goods industry

For the FMCG industry, the sales speed of products in this industry will be affected by many different factors We can mention some factors affecting the FMCG industry as follows:

Packaging and wrapping

This is one of the important factors affecting FMCG In order to attract the attention of consumers and sell to the market in large quantities, FMCG product packaging needs to be designed in the most creative and impressive way while

ensuring hygiene born

In addition, a quality packaging also contributes to protecting the product, prolonging the product's shelf life and providing product-related information to consumers

Profit and price of the product

On each product of the FMCG industry there will be a small profit However, if

a large quantity is sold, the profit will be very high Nowadays, people working in the fast-moving consumer goods industry are often under increased pressure to bring products to market quickly From there, it shows that the product is being greatly affected when the deadline is pushed forward faster

Development of the Internet

Nowadays, internet information technology is increasingly developing and it affects the rise of the brand community phenomenon and boosts FMCG demand Consumers are also using the internet to shop online in large and increasing numbers However, most FMCG products cannot be ordered online Because most customers seek the convenience of stores that provide FMCG products closest to them

1.2.3 Fast-moving consumer goods industry trends

1.2.3.1 Consumption trends in the FMCG industry

- Consumers are more strict in choosing products

With the increasing quality of life, consumers gradually tend to pay more attention to each product in terms of quality, food hygiene and safety, In the FMCG industry market, consumers have more and more choices, demand is also increasing and

leading to higher competition Therefore, manufacturers as well as FMCG store owners need to have specific directions and come up with the most suitable business strategies

- Purchasing power is increasing due to the epidemic situation

According to statistics, in two big cities Hanoi and City In Ho Chi Minh City, online shopping users increased due to the complicated epidemic situation and

demand Among them is the middle class with relatively high consumption and paying ability Along with that is a clear rapid increase in both rural areas as well as other cities

Besides, with the current epidemic situation, the demand for essential goods is also increasing Due to the implementation of the solution, people's need to hoard goods is increasing The supply of goods also faces many difficulties for FMCG

businesses today Therefore, this is an opportunity to present business in this market,

to rebalance the supply and demand of goods for consumers

With the current situation, it is certain that the online consumption trend will gradually become a major trend in Vietnam thanks to its convenience and perfect response to the consumption needs of Vietnamese people

- Gradually switch to safe consumption at home

Due to the current Covid epidemic situation, takeout is gradually being

replaced by cooking at home And of course food safety and hygiene are always top priority

Packaged products or clean foods, dairy products, and essential appliances quickly dominate the FMCG market To match shopping trends as well as consumer needs, enhancing and adding products with high consumption capacity is an extremely important factor for FMCG business owners

- Health products are increasing rapidly

The Covid pandemic has greatly impacted consumer trends and the ability to consume many products today In the FMCG industry, health products are consumed faster such as masks, hand sanitizer,

In addition, the need to use products with vitamins or drugs to increase

resistance is also of greater concern

1.2.3.2 Trends driving the FMCG market

- Distribution channel strategy must also segment customers (customers have a preference for buying at traditional channels, modern channels or E-commerce channels, then explain modern as supermarkets, convenience stores, vending machines automatic, traditional channels have markets E-Commerce is an online channel (explosive trend due to shopping behavior and preference for online purchasing)

- Focus on customer experience

- At the distribution point, display style, service attitude, customer's feeling when shopping at the distribution point

- Choose suitable and capable distribution intermediaries so as not to affect the brand

- Sales trends in the fast-moving consumer goods industry and mobile models Society is in a position to move quickly, promptly, and minimize time

Therefore, when the mobile sales business model appeared, it could handle almost all the difficulties

1.2.4 The relationship between the FMCG industry and third-party logistics

With the rapid development of Logistics, there are many forms of Logistics such as One-Party Logistics - 1PL (self-sufficient logistics service), Two-Party

Logistics - 2PL (Logistics service provider responsible for one step in the chain), Third Party Logistics - 3PL (supplier manages and performs Logistics services on behalf of shippers), 4th Party Logistics - 4PL (manages the entire Logistics process), 5th Party Logistics - 5PL (usually in the field e-commerce sector) However, at

present, the relationship between 3PL and FMCG is a very important link in the economy because it promotes the efficiency and advantages of third-party Logistics services, especially in the consumer goods industry Use quickly However, with competition among third-party logistics service providers and growing awareness and increasing customer demand, the supply chain in the fast-moving consumer goods industry is facing challenges big challenge

FMCG companies are closely aligned in their views on the role of 3PLs in helping them improve freight density/load utilization, reduce logistics costs, and execute supply chain strategies disruption strategy / supply chain strategy to reduce risk (mitigation strategy), as well as in perfect order processing and sustainable

development projects

“Sustainability is very important to our company,” says Frits Voortman, supply chain manager at FrieslandCampina We come out with new, improved post-merger sustainability programs, and we'll look to the 3PLs for help.”

1.3 Overview of the delivery of FMCG

1.3.1 Means of transport

For FMCG products, the main mode of transportation is still by road

Road transport is a method of transporting goods by land vehicles such as cars, passenger cars, trucks, tank trucks, container trucks, trailers, semi-trailers pulling cars…

Road transport is the most popular form of transport among all types of

transport This type of transport has outstanding advantages such as convenience, mobility and high adaptability to terrain conditions, and is highly economical over short and medium distances

Freight transport by road is always proactive in terms of time and diversity in transporting all types of goods However, this form of transport is limited by the volume and size of goods, cannot carry large volumes of goods like water transport, but is quite flexible with goods with small transport volumes too big and small

Although it has the highest cost, road transport is considered a flexible form of transport because it can be transferred directly from warehouse to warehouse, from production to consumption, and can operate in all conditions different weather

conditions, can meet market commodity requirements…

Freight transport plays an important role in goods circulation activities

contributing to social development and is the top choice for many shippers who want

to move goods within the city and inter-province Road freight transport plays an

important role in the growth of the country's economy It also contributes greatly to the budget through many taxes and through the development of accompanying

services, creating millions of additional jobs for workers

Some road transport services are as follows:

- Transporting construction materials: Cement, water pipes, bricks, sand, stone, iron and steel, plaster, furniture,

- Transportation of agricultural products: Rice, corn, flour, fresh fruits and vegetables

- Transporting industrial goods: textiles, packaging, animal feed, machinery and equipment,

- Transporting import and export goods

- Transport all types of goods from ports to any location

- Long-distance transport, transport of goods in transit

- Transporting oversized and overloaded goods

- Retail pickup and delivery to all locations

1.3.2 Factors affecting the delivery of FMCG

Objective factors

Goods delivery activities for FMCG products, like any other form of service business, are affected by many factors, especially objective factors such as the legal environment and the environment politics, weather, characteristics of goods

(1) Legal environment:

Any change in one of the above-mentioned legal environments such as the promulgation or approval of a circular or decree by the Government in one of the above-mentioned countries; or the ratification or adoption of an international

Convention will also have the effect of restricting or promoting freight forwarding activities

(2) Political and social environment

The political and social stability of each country not only creates favorable conditions for that country to develop but is also one of the factors for other countries and foreign traders to trade and cooperate with each other that country

Changes in the political and social environment in the countries involved in

forwarding activities will greatly affect the goods delivery process

(3) Technology environment

Along with the historic progress of the world freight forwarding industry, Vietnamese aviation is also gradually innovating to improve itself, contributing to promoting the development of the young air freight forwarding field

(4) Weather

Weather greatly affects delivery, receipt and transportation of goods This will affect the speed of processing and delivery time of goods

In addition, the air transport process is also affected by weather factors that can cause complete damage or delay delivery, giving rise to economic consequences for the parties involved

Due to the above impacts, weather will affect the quality of goods, and is one of the causes of disputes It is also the basis for building a force majeure case and the ability

to exempt the forwarder from liability

(5) Characteristics of the goods

Each type of commodity has its own characteristics For example, agricultural products are perishable and easily change in quality, while machinery and equipment are often bulky, large in volume and size These specific characteristics of the goods will determine how to package, load, unload and tie goods according to proper

specifications and suitable for each type of goods to ensure the quality of goods during the delivery and transportation process

Besides, each different type of goods with unique characteristics will require different types of documents to certify their qualities and qualities

Subjective Factors

The delivery of FMCG goods is also influenced by various subjective factors, including infrastructure, equipment, machinery; investment capital; the expertise of organizational management and participation in the process

(1) Infrastructure, Equipment, Machinery:

The infrastructure and machinery of freight carriers include offices, warehouses, loading and unloading vehicles, transportation, and storage facilities To participate in freight transportation activities, especially in containerized conditions as today, freight carriers need modern infrastructure with advanced equipment and machinery to

facilitate cargo consolidation, preparation, and inspection With the rapid development

of information technology, freight carriers can manage all their activities and customer information through computer systems and use electronic data interchange (EDI) systems With modern infrastructure and equipment, freight carriers will be

increasingly closer to meeting customer needs and maintaining long-term

relationships

(2) Investment Capital:

If the infrastructure and equipment/machinery are incomplete and inadequate, it will

pose difficulties and obstacles to the freight receiving process However, to build infrastructure and own modern equipment, freight carriers need a significant amount

of investment capital However, freight carriers may not always have abundant

financial resources Therefore, with limited financial resources, freight carriers must carefully consider building technical infrastructure efficiently, alongside renting or jointly owning specialized machinery and equipment with other businesses

(3) Expertise of Organizational Management and Staff:

One factor that significantly influences the import-export air freight process is the expertise of organizational management and personnel directly involved in the

process The efficiency of the import-export freight process, which occurs within the shortest possible time to deliver goods to customer-requested locations, depends heavily on the expertise of those directly or indirectly involved in the process If participants have understanding and experience in this field, they can process

information quickly Additionally, the quality of goods is ensured due to experience in handling various types of goods Therefore, the expertise of employees is always a primary consideration, as it is a decisive factor in the quality of the freight process and contributes to the credibility and trust of customers

1.4 Theoretical basis for applying the SERVQUAL model to evaluate service quality in FMCG delivery

1.4.1 The overview of SERVQUAL model

SERVQUAL scale (Parasuraman et al., 1985:2005) The SERVQUAL model was first published in 1985 by A Parasuraman, Valarie A Zeithaml and Leonard L Berry for measuring and managing service quality on a large scale Wide range of services The authors of this model defined service quality as "the difference between expected quality and perceived quality" Taking the theoretical idea from Gronroos' model (1984), Parasuraman et al (1985) built a mixed measurement tool, called

SERVQUAL, to measure perceived service quality

The SERVQUAL scale contains 22 pairs of items measured on a Likert scale to separately measure customers' expectations and actual perceptions of service quality

In which, the first part: determining customer "expectations" for services in general; The second part: determine the customer's "feeling" about the service performance The research results aim to identify gaps between customer perceptions of the quality

of service received and customer expectations for that service quality As follows: (1) Reliability

When company xyz promises to do something by a certain time, they will do it When you encounter an obstacle, company xyz demonstrates a genuine interest in solving that obstacle

Company xyz performs the service correctly the first time