Sweet Customer Satisfaction

The Coca-Cola Company may be the number one soft-drink maker, but its customer satisfaction has fizzled to a five-year low, according to the third quarter report of the American Customer Satisfaction Index (ACSI), released today. The ACSI, produced by the University of Michigan's Ross School of Business, in partnership with the American Society for Quality and CFI Group, is supported by ForeSee Results, an online satisfaction measurement firm. The ACSI segments manufacturing/nondurable goods into eight categories: soft drinks, athletic shoes, apparel, food manufacturing, personal care and cleaning products, pet food, breweries, and cigarettes. Consumer nondurables are examined every third quarter by the ACSI.

Regarding the soft drink category, Coca-Cola tallied a score of 82 on the ACSI 100-point scale, a 2 percent decline from Q3 2005's score. Despite Coca-Cola's skid, 82 is still a solid score, but not enough to maintain the top sector slot. PepsiCo (up from Q3 2005's 82 to Q3 2006's 86) and Cadbury Schweppes (up from Q3 2005's 83 to Q3 2006's 86) trumped the beverage maker to tie for the highest soft drink satisfaction score. The ACSI gap between Coca-Cola and Pepsi has never been greater, according to Claes Fornell, a professor and head of ACSI at the University of Michigan. "Pepsi has made Diet Pepsi its flagship product; they have really doubled marketing expenses," he says. He adds that Pepsi has "put more resources on product innovation and they've also stopped relying as much as they used to on price promotion and that usually helps." Overall, the soft drinks category secured an aggregate score of 84, up 1.2 percent from Q3 2005, making it one of the highest scoring industries in ACSI, according to Fornell.

However, the athletic shoes category index dropped 1 percent to 76. Nike and Reebok International were tied in last year's evaluation with a score of 75, but in this year's installment Nike fell to 72 and Reebok rose to 78. Nike seems to have a problem with respect to pricing, while Reebok's increase may be attributable to its acquisition by Adidas, which led to a near doubling of total US sales, according to Fornell. Interestingly enough, "all others," including companies like New Balance, Sketchers, and Puma, pulled the strongest score, 81.

The other category leaders include:

• Apparel: VF Corporation and Sara Lee Corporation--tied with 82
• Food Manufacturing: H.J. Heinz Company--87
• Personal Care and Cleaning Products: The Clorox Company--86
• Pet Food: Hill's Pet Nutrition, The Iams Company, and all others--tied with 83
• Breweries: Molson Coors Company and "all others"--tied with 83
• Cigarettes: Reynolds American--80

The manufacturing/nondurable goods sector realized a 0.6 percent increase from its third quarter 2005 score to 82.3, representing the category's strongest score ever and the highest of any sector evaluated in ACSI. There are several factors that continue to trigger the industry's satisfaction success, including the very little service required before or after purchasing these goods, according to Fornell. Price stability, product reliability, the amount of product options, and low costs associated with switching products, are also credited with spurring high satisfaction marks.

For companies in the manufacturing/nondurable goods industry, "the most important thing for these types of [companies] in general is actually to manufacture and market to the right customer at the right price. That sounds simple, but that's really what it's about here," Fornell says. "That would imply more effort on marketing--all the things about targeting [and] segmentation--as opposed to broad based advertising."

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