Taps. Spain Portugal. Spain Portugal. Continuous 92. Spain Portugal. Continuous 92

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1 6.a. Perception measures The Management Model considers Customer Satisfaction to be one of the three basic pillars (together with that of Lean Company and Internal Management) in the management of our resources (management strategies in sub-criterion 2.c). Sub-criterion 5.e groups together all the communication channels we have with our customers to inform about strategies for each of the variables of the Marketing Mix, as well as to appreciate customers needs and expectations as regards each one of them. This subcriterion presents our customers evaluations of the 8 surveys conducted in order to cover the 5 variables of the Mix and the whole customer population. Figure 6.a.2 shows the relationship between the different surveys that are conducted and their sphere of application. Using such extensive sample sizes, represented in the turnover column in figure 6.a.2 and calculated on figure 6.a.1, guarantees a high degree of reliability in an objective evaluation of our whole customer population. Turnover 2002 TOTAL Ovens Hobs Extractor hoods Kitchens Microwaves Sinks Taps Total Nat ,5 2,1 1,2 0,6 0,6 Czech Rep. 5 2,3 2,1 0,7 0,4 France 4 1,4 1, ,4 Hungary 2 0,7 0,5 0,3 Others 9 3, ,2 Total Intern ,3 1,1 0,3 0 TOTAL ,8 0,2 Figure 6.a.1 Below the results of the 8 surveys are presented. They are broken down into Distributor Customer (5 surveys) and User Customer (3 surveys). DISTRIBUTION USER Target of the measurement As the Brand Strategy is the most relevant survey (figure 5.e.2) both its global evaluation and a breakdown of each one of the variables which make it up are presented, whereas for the rest of the surveys only global evaluation is presented. Nevertheless, all this information is exploited internally from different perspectives in order to take actions. DISTRIBUTION SURVEYS Satisfaction with the Brand Strategy These are conducted by the Executive Committee, which is made up of: President CEO Business Unit Managing Directors Organisational Development and HR Manager Financial Manager Services Manager Strategic Marketing Manager These surveys have been conducted annually since 1992 with the aim of gauging the general degree of satisfaction with the FAGOR Brand Strategy. 100 distributors, which represent 80 of our turnover, are visited annually. This is a personal interview in order to maintain direct contact between distribution and the leaders of FED. In these surveys questions are asked about our own and other brands with which distributors work, through which we obtain data on the competitors. This survey and its schematic have been reviewed several times by the Executive Committee: The survey was reviewed in 1995, paying particular attention to the changes in factors which were considered by distribution, and to the method and processing of the survey. The aspects and characteristics to be evaluated and their consideration and evaluation were modified, which means that the data from 1992 to 1994, and that from 1995 onwards are not comparable. In addition, it was decided to conduct the survey every two years (data from 1995, 1997 and 1999). Survey taker Frequency Since Country Product Turnover 02 Brand Brand strategy Exec. Committee Annual 92 Cooking products Satisfaction with the T.A.S. Satisfaction with delegation services Presentations Satisfaction with the T.A.S. Business Unit's Management Board Sales Representatives Sales Representatives Communication Dept. Spain All products 80 Annual 99 Spain All products 73 Continuous 92 Continuous 92 Spain Spain All products 80 All products 80 Annual 98 Spain All products 73 Sub-contracted Monthly 91 Spain All products 73 Treatment of complaints Sub-contracted Monthly 97 Spain All products 73 Purchase intention Sub-contracted (ATP) Sub-contracted (POST TEST) Continuous 97 Spain Continuous 97 France Czech Rep. Figure 6.a.2 Ovens and hobs Ovens and hobs 72{ Competitors Comparison No No No 6. Customer Results 54

2 PROFITABILITY PRODUCT QUALITY PRICE-QUALITY RELATIONSHIP PERSONAL ATTENTION PRODUCT RANGE Figure 6.a.3 DISTRIBUTION COMMUNICATION PRODUCT PRICE SATISFACTION WITH THE BRAND STRATEGY GUARANTEE FAGOR Comp1 TRAINING RECEIVED T.A.S. INFORMATION BRAND IMAGE GENERAL SATISFACTION Obj. SERVICE Customer Results

3 In 1999 the Executive Committee carried out another review and reached the following agreements: It was decided to conduct the survey annually again in order to obtain a more up-to-date evaluation. In the Domestic Market EDESA is defined as our second strategic brand (as part of the Strategic Marketing Plan, figure 5.e.1), and thus from 2000 this was integrated into the Brand Strategy survey. In International Markets, using the Internationalisation Plan 2003 document as a starting point the following were established as priority markets:, France, the Czech Republic, Hungary and Poland. Thus we began in 2000 with, followed by France and the Czech Republic in 2002 (figure 6.a.4). The market sector in which operates is the medium-high sector and amongst the firms in this sector "Comp. 1" (which belongs to the "Comp. 1" group) has the largest share of the market and a more positive predicted future (figure 0.3) which is why it is chosen as a reference in comparisons. Figure 6.a.3 contains the Satisfaction Index for the Brand Strategy in Spain. The results clearly display a very high sustained performance (close to 8 out of 10) which is favourable with respect to targets and our best competitor. competitors. In addition to "Comp. 1", we measure ourselves against "Comp. 2", since for the Cooking Business Unit this is a benchmark brand due to their high market share in Ovens and Hobs. (figure 9.a.3) The survey is conducted by the Business Unit Management Board and middle managers on 100 customers, a sample which represents 73 of our turnover. Figure 6.a.5 shows the positive evolution obtained with a result of close to 8 out of 10. This is above the target set and higher than our main competitors. From the suggestions obtained in these surveys product adaptations are put forward (e.g. aluminium, flat design) which are integrated into the Annual Marketing Plan (sub-criterion 5.c). Satisfaction with the Technical Assistance Service (TAS) The sales representatives continuously survey 2,500 distributor customers regarding our TAS service, a sample which represents 80 of our turnover. All the reviews and improvements performed in our TAS (figure 5.e.3) result in the positive performance achieved in this survey, reaching the target and comparing favourably with our best competitor. Satisfaction with FAGOR TAS Satisfaction with the brand strategy Country Brand Market Year share Czech Republic Leader 7,23 7,24 Comp. 1 2º 7,50 6,68 Leader 8 Comp. 2 2º 7,6 Comp. 3 3º 7,3 Figure 6.a.4 In a sustained high performance can be seen (over 7 out of 10) which is higher than the evaluation of our main competitor. In the Czech Republic we began to conduct the same surveys in 2002, and have obtained a very positive evaluation, which has been higher than that of our main competitors. Satisfaction with Cooking products General Product Satisfaction Comp. 1 Target Figure 6.a.6 Satisfaction with Delegation Services The sales representatives, at the same time as the previous survey (TAS), conduct the Satisfaction with the Services of 14 Delegations survey. Since 2000, comparisons with the competitors have been requested, and in instances where they obtain a higher score than us in some aspect, then the reasons for this difference are investigated. Figure 6.a.7 highlights the positive sustained performance attained, with an evaluation of over 8 out of 10, which is better than our competitors. Satisfaction with delegation services Comp. 1 Comp. 2 Target Figure 6.a.5 Since 1999 the Cooking Business Unit has conducted a survey of distribution about satisfaction with our products and those of the Comp. 1 Obj. Figure 6.a.7 6. Customer Results 56

4 Satisfaction with Presentations As we are aware of the importance of the relationship with our customers, and due to the fact that in annual product presentations (sub-criterion 5.e) there is a direct contact with them, since 1998 we have performed this measurement in order to gauge the degree of satisfaction with presentations. We conduct this survey on approximately 73 of all our customers who attend the presentations, which represents about 11,000 people annually. Satisfaction with the Treatment of Complaints The Consumer Information Centre (CIC, sub-criterion 5.e) deals with users complaints. In order to measure users satisfaction with this, an external firm, used to ensure objectivity, conducts a monthly survey on approximately 5 of the complaints received. Customer dissatisfied with treatment of Complaints 10 Satisfaction with Presentations Figure 6.a.8 These actions are only taken when presentations are held, so a global survey target is not set, and neither is it possible to make comparisons with other brands as the presentations carried out are different and not comparable at all. USER SURVEYS Satisfaction with the TAS The aim of this survey is to measure the level of user satisfaction with respect to the After-Sales Service. Surveys are conducted on 3 of call-outs (some 25,000 surveys per year). This survey has been conducted since 1991 and refers to both the receipt of the call and the actual call-outs made. Since 1991 it has been observed how the percentage of customers dissatisfied with the SAT has diminished in line with the targets set. Comparisons with other brands are not possible due to the general character of users of one unique product Dissatisfied Target Figure 6.a.10 Figure 6.a.10 demonstrates the positive trend that is being achieved, which is even exceeding the target set. It is not possible to obtain a comparison for this indicator with other brands. Intention to Purchase ATP / POST TEST The intention to purchase the main products of the Cooking Business Unit (ovens and hobs) is measured via the surveys conducted in all the countries where we run television campaigns. We uniquely obtain the comparison with the competitors by conducting an ATP survey (which is more expensive than a POST TEST survey), and we only do this for the national market as it represents 73 of our sales and approximately 50 of the TV budget. A POST TEST uniquely records the evolution of our brand and, for budgetary reasons, it is the tool that we use for international markets. National Purchase Intention TAS dissatisfaction level Comp.1 Comp.2 Figure 6.a.11 International Purchase intention Actual Target Figure 6.a.9 The fall in 1999 is due to the difficulties encountered by the TAS in responding caused by the considerable increase in sales (figure 9.a.1), which led to the taking of the actions described in figure 5.e.3. As a result of these actions the recuperation which began in 2000 has far exceeded the targets set, as showing in figure 6.a.9. Czech Republic France Figure 6.a Customer Results

5 The graphs in figures 6.a.11 and 6.a.12 demonstrate the positive evolution of the brand, both on a national level and in international markets. is thus a recognised brand in these 4 countries (which represent 92 of our turnover), and obtains purchase intention values of almost 30. This means that approximately one out of three end users would be willing to buy a oven or hob. Our second brand in the national market,, perfectly fulfils its main objective: that of being the SUPPORT brand. 6.b Performance indicators Sub-criterion 6.a presents the customers perception as regards the variables of the Marketing Mix, measured through the 8 surveys. In this section the performance indicators which are used to complement the measurement and improvement of customer satisfaction in the variables of the Mix are presented (service, product, price, communication and distribution). External comparisons of these performance indicators are almost impossible to achieve due to the difficulty in finding equivalents (because of different ways of measuring) and also due to the difficulty in accessing equivalent data from the competitors. Service This variable is considered to be the most important for maintaining our competitive level. For this reason service is the most measured variable (figure 5.e.2) and is reviewed and improved the most (figure 5.e.3). Sub-criterion 5.d presents the services which have been implemented (CIC, TAS, CSC and other additional ones) for maintaining our customers high level of satisfaction, which is measured via the surveys presented in sub-criterion 6.a. In line with the aim of being leaders in service, our customer service was reinforced with the implementation in 1995 of the Consumer Information Centre (CIC, figure 5.e.3). The communication and publicity generated so that customers use this service has paid off with the increase in calls dealt with by the CIC (figure 6.b.1). CALLS DEALT WITH BY THE CIC The positive trend of this survey has been verified by the following performance indicator for this service. days Average time for Resolving complaints Actual Target Figure 6.b.2 was the first Spanish manufacturer to offer a 5 year guarantee covering parts and components (introduced in 1992). Our TAS, together with the Distributor customer satisfaction target (figure 6.a.6), has the additional target of responding to the User Customer in less than 48 hours. For this reason, as presented in figure 5.e.3, changes to the approach of the TAS were implemented, setting as an ambitious target that of responding to at least 95 of calls. This has resulted in a positive sustained performance over recent years. Calls resolved in 48 hours Actual Target Figure 6.b.3 Another of the actions that we have taken to improve customer service is the training of the TAS. In the figure below the actions performed in recent years can be seen no of calls Figure 6.b.1 Even if an increase in the number of calls was desired, a specific annual target is not set since this is seen as a service and not a goal in itself. Around 80 of these calls are to request information or make a query, the rest being complaints (about product, the TAS, guarantees, or other issues), calls to extend guarantees, and other matters. The treatment of complaints survey (figure 6.a.10) is the indicator used to gauge our customers degree of satisfaction with this service. TAS Centre training Year Country No. Centres Training 2000 Spain 100 "Elegance" Cooker Range 2000 Argentina and Uruguay 100 "Elegance" Cooker Range 2000 Czech Rep. and Hungary 100 "Elegance" Cooker Range 2001 Poland 100 "Elegance" Cooker Range 2001 Czech Rep. 100 Cooker Product 2002 Spain 100 Innova Cooker Range Innova Cooker Range Figure 6.b.4 Other important types of Service indicators refer to the level of response that we give to our customers orders. For this reason, in addition to the evaluations from the surveys, we use the following performance indicators: nil stocks and 48 hour delivery. 6. Customer Results 58

6 Orders are received on line in our central order office and the target is to deliver the product to the distributor within a maximum period of 48 hours. The Nil Stocks indicator measures the percentage of unavailability when the order is received with respect to the total number of units ordered. Nil stocks Finished product quality on the market: Finished product performance is measured with two indicators: Returns and the Repair Rate as a proportion of Sales (RRS). Product returns from our customers can be due to various causes: breakdown, damages, customer error, obsolescence, errors in shipment and delayed delivery. Although many of the variables that have an effect on this indicator are not directly related to product quality, they are related to customer satisfaction. It is process P04 Order-Payment which manages this indicator. Its evolution can be seen in figures 6.b.7 and 6.b.8. It is difficult to gain data from our competitors for this indicator since such information is not shared in the forums that we attend, thus we compare ourselves with the FED average, which incorporates data from all the Business Units that operate in our sector Ovens Hobs FED avg Targ. Figure 6.b.5 This indicator was globally managed by FED and since 1998 (the restructuring of the Business Unit was performed in 1997) has been managed by the Cooking Business Unit itself. Figure 6.b.5 shows the excellent evolution of this indicator and its comparison with the FED average. An important indicator whose positive evolution favours the reduction of nil stocks is the Degree of planning fulfilment, whose evolution can be seen in figures 9.b.2 and 9.b.3. When the customer s order is in stock, this is delivered in less than 48 hours. In the figure below the positive, sustained performance achieved can be seen. Returns (Ovens) Cooking FED Target Figure 6.b.7 48 hour delivery Returns (Hobs) Actual Target Figure 6.b Cooking FED Target Figure 6.b.8 Product Product quality is managed in three product stages (before it is manufactured, during manufacture and while it is on the market): Quality of Components: All defective components withdrawn from assembly lines are analysed daily. Each component is classified according to the cause of the defect (attributable to the supplier or attributable to poor handling during assembly) in order to manage the causes independently. Figure 9.b.12 presents the evolution of the defective components in Assembly indicator, measured in parts per million. Manufacturing Quality: The internal quality of the finished product is measured with the indicators: Q rate of Manufacturing Quality and Reparability rate. Their evolution can be seen in figures 9.b.6, 9.b.7 and 9.b.9. As demonstrated in these figures, returns increased in 2000 and 2001, due in part to the accidental fire which on 8 th November 2000 devastated the Central Warehouse in Vitoria. This has undoubtedly had a negative effect on the logistics of our products (on all the FED white goods stored in Vitoria), resulting in an increase in repairs due to damage, etc. The performance of our product during its life in the home of the user is measured using the information from TAS call-outs. This indicator of Repair Rate as a proportion of Sales (RRS) reflects the number of calls from users in relation to sales in the same period. All the calls received by the TAS are included in this indicator that may be due to product breakdown and various problems (poor installation, problems with the gas or electricity supply, the user not knowing how to use the appliance, etc.). The following figure shows its positive evolution, in line with the target set Customer Results

7 Price RRS - Call Rate Figure 6.b.9 One of our customers most important satisfaction variables, according to its consideration in the satisfaction survey, is the qualityprice relationship. In the above section, the favourable evolution of the product quality indicators has already been seen. The following figure shows the evolution of the prices of our products in relation to the evolution of market prices and those of our main competitors. Communication Price increases (Spain) Market Comp. 1 Comp. 2 Figure 6.b.10 Figure 5.e.4 shows the communication channels that have been opened between the Business Unit and Customer (distributor and user). Those which stand out due to their relevance are the product presentations to distributors which are held annually with the participation of all members of the Business Unit Management Board. Presentations to distributors 1995 By means of Hispasat at the same time to all Spain 1996 By means of Hispasat at the same time to all Spain 1997 No presentations (FED restructuration) Figure 6.a.8 shows customers positive acceptance of these presentations. Visits from our customers are a constant in our relationship with them. We receive visits almost daily. Some of the most significant ones from 2002 can be seen in figure 6.b.12. Date Customer Country 12/02/02 Customer 1 France 26/09/02 Customer 2 Spain 09/09/02 Customer 3 Hungary 27/ 09/02 Customer 4 Czech Rep. 03/10/02 Customer 5 18/10/02 Customer 6 Spain 13/11/02 Customer 7 France Figure 6.b.12 On numerous occasions the Cooking Business Unit has made the news in specialised magazines, the most recent examples being: Sonitron, El Equipo Domestico (Domestic Appliance), Electro Imagen (Electro Image. The Business Unit has also appeared in Market Vision, Cocina Integral (Integral Kitchen), Marrón y Blanco (Brown and White), Electromarket, Confort Menager, Confortique, Appliance Manufacturer and KBB Review. The latest FED s press conference, in which the Managing Director of the Cooking Business Unit took part as usual, made the news in all the national newspapers and all the industry magazines to which we subscribe (sub-criterion 5.e). Distribution The loyalty of our customers can be measured using the following indicators: Market share The evolution of the market share of our products in the most important countries in which we are present can be seen in figures 9.a.3, 9.a.4, 9.a.5, 9.a.6, 9.a.7 and 9.a.8 Presence rate in distribution Presence rate is defined as the percentage of space that each brand has out of the total sales space set aside for this product in the traditional distribution channels. The figure below shows the positive position of with regard to the competitors, linked to our position of market leadership. Presence Rate (Spain) 1998 In 20 places to 8,000 customers 1999 In 23 places to 10,000 customers 2000 In 23 places to 11,000 customers 2001 In 20 places to 9,500 customers 2002 In 19 places to 11,000 customers Figure 6.b Comp. 1 Comp. 2 Figure 6.b.13 As regards the rest of the countries, the following graphs demonstrate that the realities are totally different in each country. 6. Customer Results 60

8 In France, as shown in figure 6.b.14, our presence in distribution is very low, proportional to our market share in this country (figure 9.a.5), which although has increased in recent years is still considerably lower than our market share in other countries. One of the actions taken to tackle this country has been the acquisition in 2002 of the firm Brandt with our partner ELCO (sub-criterion 4.a). Presence Rate (France) Comp. 1 Comp. 2 Figure 6.b.14 In the positive evolution of this indicator up until 2001, in keeping with or position as leader in this market, decreased considerably in This was caused by a problem with our computer system, which led to numerous problems with customer delivery. This also led to a fall in our market share in this country (figure 9.a.4). Presence Rate () Comp. 1 Comp. 2 Comp. 3 Figure 6.b.15 In the Czech Republic, in spite of the downward trend our presence rate is far higher than the rest of our competitors. The downward trend, which is somewhat normal, is due to the efforts of our competitors to try to counterract our clear position of leadership (figure 9.a.7). Presence Rate (Czech Rep.) Comp. 1 Comp. 2 Figure 6.b Customer Results