2011 Golden Service Award Survey
Taiwan's Favorite Service Enterprises
The service industry is now prime turf in Taiwan's business world, and everyone with a nose for profit is grappling for a stake. Being eager to serve, and knowing how to do it, are the qualities Taiwanese consumers demand most.
Taiwan's Favorite Service EnterprisesBy Ming-Ling Hsieh
From CommonWealth Magazine (vol. 477 )
The performance of a country's service industry is an indicator of its level of economic development as well as its quality of life.
With the publication of its first annual survey of Taiwan's Top 1000 Enterprises in 1986, CommonWealth Magazine began to examine the scope of Taiwan's corporate elite. In 1994 the magazine came out with its Most Admired Company survey, using a list of 10 criteria to rate the operational capabilities of Taiwanese businesses.
Now, with the service industry accounting for in excess of 70 percent of GDP, CommonWealth Magazine this year presents its first annual "Golden Service Awards," a comprehensive evaluation of the characteristics and quality extant in Taiwan's service enterprises.
The premiere "Golden Service Awards" marks the first time large numbers of actual consumers have directly contributed evaluations of service quality across a broad spectrum of Taiwanese businesses. These included 20 service categories related to everyday consumer spending. More than 9,000 CommonWealth Magazine subscribers directly evaluated the quality of service at businesses they had patronized, based on seven key indices.(see table)
The seven key indices were divided into two main parts. The first, brand awareness, involved consumers evaluating the "market penetration," "degree of satisfaction" and "reputation" in rating their overall satisfaction with a given service enterprise they had patronized and their willingness to recommend that service to others. The second had consumers rating their overall impressions of service quality based on four other perspectives: "atmosphere," "service efficiency," "service attitude" and "uniqueness."
Dominant Position: Convenience Services and Restaurants
Generally speaking, "convenience services" (encompassing convenience store chains and express delivery services) and the food and beverage industry are the two most fully developed areas of Taiwan's service industry.
Among Taiwan's top 10 service enterprises are two convenience store chains – President Chain Store Corp. (7-11) and Family Mart – and one express delivery service – President Transnet Corp. What's more, all three are so far ahead of their nearest competitors as to suggest that consumers are already satisfied with the existing market hegemons, whom other competitors may find difficult to supplant.
Three of the top ten service enterprises in the survey came from the food and beverage industry. Western-style restaurants performed better overall than their Chinese-style counterparts. Yet unlike with the convenience store and express delivery businesses, there was relatively minor overall difference in business performance among the restaurants that made the top list, regardless of the style of food they served, indicating the fierce competition throughout the entire food and beverage sector, with market leaders having yet to firmly establish any real advantage.
There were a number of service businesses consumers generally found quite lacking in terms of capability; these included life insurance companies, travel agencies, museums and galleries, and foreign language learning institutions. This would seem to indicate that those businesses that do go the extra mile for customer service could, indeed, soon find themselves eclipsing competitors.
Small Is Beautiful: Airlines, Electronics
What's more, in some areas businesses are winning with "top-end, limited production" and low market penetration – that is to say, few outlets and consumers that have previously used the service – rising to prominence by seizing upon one or two niches that are deeply influential with consumers. Such has been the case with examples like Singapore Airlines, and consumer electronics and home entertainment retailer Fayaque Co., Ltd.
Fayaque (aka Fnac) is way in the lead in terms of uniqueness and atmosphere, despite having just nine stores throughout Taiwan, far fewer than the number-two consumer electronics retailer TKEC. Most Fayaque outlets are actually located in department stores, where the bright lighting and vibrant atmosphere present a stark contrast to the jumbled, cluttered chaos of ordinary electronics discounters. Women consumers account for 60 percent of Fayaque revenues, and when certain brands are looking to launch high-end, limited-edition goods, they often look to Fayaque.
Earning Loyalty through Uniqueness
Additionally, in the international tourist accommodation category, The Lalu at Sun Moon Lake emerged on top in terms of both atmosphere and uniqueness, on the strength of its spectacular setting. Prime examples of other businesses scoring strong in features offered were Costco and Jason's in the "supermarket/bulk retailer" category.
According to figures provided by trade publication Distribution News, competition is ferocious among Taiwan's supermarkets, the numbers of which increased 43 percent between 2007 and 2010. Amid the rash of M&A activity and cutthroat price slashing, a difference of one or two New Taiwan dollars could make or break a sale among local consumers.
Aside from its 10-percent annual sales growth and average individual customer spending three times that of any competitors, Costco outlets have begun offering high-end goods like diamonds from Tiffany and dumplings from Din Tai Fong. Richard Chang, president of Costco Taiwan, the only service outlet surveyed to collect membership fees, insists his company fully guarantees its products and the full value of membership fees as it heads with open arms into a market in which establishing brand loyalty has become increasingly difficult.
There was a decided lack of differentiation within the "department stores/shopping centers" category. Aside from scoring high in market penetration, marks for uniqueness and atmosphere were quite lacking, seeming to indicate that Taiwan's department store chains have sunk into a bloody game of attrition in terms of numbers and scale of outlets.
Scenic Areas, Museums Lacking in Service
The survey also dredged up some other details worthy of mention. Although museums and national scenic areas/national parks scored well in terms of market penetration and uniqueness, they were complete failures with the public in terms of service attitude and service efficiency. These two sectors are in the front lines of Taiwan's tourism business. In addition to their natural advantages – the collections available in Taiwan's museums and the scenery present in its national parks – these two sectors are clearly in need of a considerable upgrade in service. One can only hope to see some progress in that direction reflected in the survey next year.
Translated from the Chinese by Brian Kennedy
About the Survey
The CommonWealth Magazine Golden Service Award Survey was gathered from a random sampling of Internet questionnaires distributed to CommonWealth Magazine's 1.2 million subscribers. A total of 228 companies across 20 fields of business were rated based on seven indices: market penetration, degree of satisfaction, reputation, atmosphere, service efficiency, service attitude, and uniqueness of products/services. The overall rankings were carried out following weighting of the various indices, selecting the top five players in each field of business, for a total of 99 honorees.
The survey was conducted between 24 April and 10 June 2011. A total of 9,306 valid responses were collected, for between 650 to 1,406 successful samples for each field of business with a margin of error of between 2.6 percent and 3.9 percent at a confidence level of 95 percent.