Building distribution channels according to customer satisfaction levels – based on the example of construction material manufacturers – part 2
When a distributor uses deferred payment, the rank correlation coefficient reaches its highest level of 0.98. In this case, the mean deviation is 0.68, which means that the construction company’s satisfaction level, measured on a scale of 1-10, differs from the average satisfaction by only 0.68 points. In percentage terms, this gives a value of 0.68%. A similar correlation value was recorded for promotional sales, applied discounts, rebates, acceptance of various forms of payment, and the granting of trade credit.
The coefficient fluctuates in the range of 0.95 – 0.96. These features of the distributor’s operations are accompanied by a low mean deviation, oscillating between 0.69 – 0.9. The results obtained prove a significant unanimity among contractors. They attach primary importance to the financial terms of sale, expect price reductions, and the granting of credit. The above data should be linked to the low profitability of the sector, the decline in construction investments, and significant competition. Therefore, companies are looking for various forms of project co-financing.
When a distributor uses deferred payment, the rank correlation coefficient reaches its highest level of 0.98. In this case, the mean deviation is 0.68, which means that the construction company’s satisfaction level, measured on a scale of 1-10, differs from the average satisfaction by only 0.68 points. In percentage terms, this gives a value of 0.68%. A similar correlation value was recorded for promotional sales, applied discounts, rebates, acceptance of various forms of payment, and the granting of trade credit.
The coefficient fluctuates in the range of 0.95 – 0.96. These features of the distributor’s operations are accompanied by a low mean deviation, oscillating between 0.69 – 0.9. The results obtained prove a significant unanimity among contractors. They attach primary importance to the financial terms of sale, expect price reductions, and the granting of credit. The above data should be linked to the low profitability of the sector, the decline in construction investments, and significant competition. Therefore, companies are looking for various forms of project co-financing.
These include those distributor activities that allow the contractor to obtain additional funds. A significant level of rank correlation occurred in the case of turnkey deliveries and the absence of defects in material shipments. In both features, the rank correlation is identical: it is 0.94. This fact confirms the link between investments and delivery conditions. The occurrence of defects (both qualitative and quantitative) causes a delay in the contract. On the other hand, organizing deliveries on a “turnkey” basis contributes to the efficient implementation of the project (Voordijk H. 2000).
The mean deviation regarding “turnkey” deliveries is 0.82, and in the case of no defects – 0.78. The continuation of a high level of contractor satisfaction relates to the continuity of deliveries, conducted training, constant contact with the customer, trial batches of materials, and the presence of a distributor’s representative on the construction site. The above actions of the supplier significantly affect the satisfaction of the construction company. The rank correlation coefficient is in the range of 0.89 – 0.93. The mean deviation only slightly deviates from the average satisfaction of the surveyed group of companies. It differs from the average satisfaction by less than 10%. Contractors also expect comfort in making purchases and experience in selling materials. The rank correlation is high, amounting to almost 0.9. A large value of the mean deviation (1.3) proves significant discrepancies in the opinions of construction companies. The distributor’s image is not a priority determining the level of satisfaction. In this case, the correlation coefficient oscillates around 0.8, with a simultaneous significant mean deviation of 1.2. Construction companies attach less importance to those features of the distributor that concern the level of turnover and the possessed machinery park. The rank correlation reaches a value of 0.77 and 0.56, respectively. Contractors pay attention to the real actions of suppliers, not their potential capabilities. Even a very high level of turnover and an appropriate machinery park do not always guarantee proper service.
Distribution channels for construction materials to the construction site
Construction materials reach the construction site from various sources. All participants in the investment have a significant influence on supply principles. In practice, a construction company has limited choices regarding the type of materials and the source of supply. The above diagram shows that it is not only the wholesaler that has an influence on the delivery of construction materials to the construction site. The investor plays a fundamental role. Based on their guidelines, a consulting firm defines the assumptions for the design office. Designers develop technical documentation containing key information regarding:
• quality and quantity of materials
• deadline for their use.
• deadline for their use.
The construction company cannot deviate from the requirements set by the design office. Deviations are associated with the suspension of the investment and exposing the contractor to measurable financial losses (Mahiney M. 2001, op. cit). A material wholesaler, even one with a wide offer that is inconsistent with the technical documentation, is unable to effectively participate in deliveries to the construction site.
The article comes from the magazine “Logistyka”, No. 1/2006.