CRM: MAHINDRA FIRST CHOICE SERVICES: CREATING A VALUE PROPOSITION
Download as DOCX, PDF0 likes824 views
The document discusses Mahindra First Choice Services Ltd.'s (MFCSL) challenge of establishing a robust brand presence in the Indian automotive aftermarket sector, specifically in the face of competition from authorized and local service providers. Key strategies to overcome customer reluctance include creating a compelling value proposition, focusing on trust, and targeting multi-brand vehicle owners seeking affordable and quality services. Additionally, the document outlines a customer relationship management framework aimed at enhancing acquisition and retention, alongside marketing efficiency and cost management.
CRM: MAHINDRA FIRST CHOICE SERVICES: CREATING A VALUE PROPOSITION
- 1. MAHINDRA FIRST CHOICE SERVICES: CREATING A VALUE PROPOSITION ASSIGNMENT # 3 CRM DECEMBER 21, 2019 PRESENTED BY: GROUP 4 DISHA GHOSHAL FT201032 MAYANKCHAWLA FT202043 MOURJYA SANYALFT202045 SAIKATMONDALFT202065 TANIA SINHA FT202094
- 2. Introduction The case delvesintothe dilemmafacedbyAlokKapoor,marketingheadof MahindraFirstChoice ServicesLtd.(MFCSL) pertainingtothe firm’sfuture course of action.MFSCLwas inthe businessof providingwholerange of aftermarketservicesforautomobiles,includingrepairs,routine maintenance andspare parts,to automobilesof differentmakes. Establishedbackin2008, MFSCL had, by 2014, createda networkof 28 Company-ownedand companyoperated(COCO) workshopsand hada turnoverof INR 300 million.Kapoorwascognizant of the fact that the companyonlycaptureda miniscule pie of the total aftermarketbusinessof automobilesinIndia,whichwaspeggedatsomewhere aroundINR120 billionatthat pointof time. Issue at hand: Beingamongstthe firstmoverswiththe unique propositionof providingaftersalesservice to customerswhichisdominatedbyeitherOEM-authorizedworkshopsorlocal garages,MFSCL had to motivate the customerstogrowout of the habitof relyingoneitherof them.There wasnoprevious model existentwhichcouldbe reliedon,andhence itwasan uphill taskasthe team hadto simultaneouslyensure aconsistentbrandpositioningthatwouldgel withthe parentcompany’s (M&M’s) fantasticbrandimage. Business Environment Analysis: PESTEL Analysis: We didn’tfind anymajorPESTEL factors thatmightinfluence the situation. Strengths: Comingfromthe house of Mahindra and Mahindra,theyhadan opinionof trustingrainedin the mindof a potential customer. Theyhad priorexpertise inthe automobileindustry,asM&M wasin the businessof manufacturing,pre-ownedcarbusiness,aswell asprovide ASSsince quitealongtime. Weaknesses: The parent companyhadveryhighexpectationsof it,so ina way itwas burdenedtokeepup to the same,and ina veryshort span of time. Opportunities: A vastuntappedmarket,whichisprimarilyservedbythe local,unorganizedsectorof garages,mannedbysemi-skilledpersonnel. The automobile industryinitselfwasnotverymature inthe country,andtherefore establishingthemselvesasa trustedservice providerwoulddoagreatdeal of goodfor a longtime to come. The typical Indiancustomerusuallyholdsontheirvehicleforamuch longertime as comparedto that inany othercountry,and therefore the CLV fora customerisexpectedto be veryhigh.
- 3. Threats: Startinga local garage has beenveryeasyinIndia,anypersonwitha minimal knowhow of the scheme of thingscan start off. The mind-setof the typical Indiancustomertoreachto their“trusted”local garage in case of any malfunctioningof theirautomobile. Competition Analysis: The company facedstiff competitionrightfromitsinception,fromboththe existentservice providersaswell as upcomingcompetitionof asimilarnature.Some of the prominentcompetitors wouldinclude: OEM workshops,whichare companyspecific. Independentgarages:Providedconvenientservicesata lowerprice. My TVS:Startedby SouthIndiabasedTVSgroup.Expandedrapidly,primarilythroughthe franchisee route,majorlyinthe SouthIndiancities. Carnation:Establishedbythe formerMDof Maruti Suzuki,India’slargestcarmaker.They quicklyexpandedthroughcompanyownedworkshops. MFCSL thoughwas a clear winneramongstthe lattertwo,whohadtheirfootprintshrink considerablyoverthe years. Customer Analysis The customerscouldbroadlybe dividedwithinthe followingcategories: BusinessOwners Fleetowners Private owners Basistheirknowhowof the servicestobe availed,the customercategorycouldbe further segregatedonthe followingtypes: Gearheads:Knowledgeableaboutcarsand wantedthe bestforthem. Wantedbestvalue for theirmoneyspent. Flaunters:Typicallyficklemindedcustomers,whowere influencedbynew technology, productsand social circles.Willingtosplurge money. Epicures:Typicallyaffluentcustomers,andhadhightastes. Functionalists:Value seekingcustomers,wouldn’tspendmuchandwere notabreastof new developments. Resonating Focus: TrustedASSproviderforvariouscar makes,especiallyformulti brandcarowners,thereby savingthe time andhassle of dealingwithmultiplevendors. Focuson repairinga car, ratherthan simplyreplacingthe parts,therebyabettervalue-for- moneyat a cheaperprice.
- 4. Issues & Solutions: ISSUES PROPOSED SOLUTUONS Highmarketingexpendituretoacquire customers Put upkiosksandinformationcentersat residentialareas. InherentUnpopularityof multibrand workshopsinIndia Focuson ResonatingValue Propositionsto attract customerattentionviabillboards CRM Design: ANALYSISbased on: - Basedon Region - Customertype - Lead status - Lead type - Car category - Years since purchase - Whichsalesrepresentative ithasbeenassignedto - Source of the lead Customerselection: - Top pursuit Initial targetswouldbe customerswhoare inthe post warrantystage andlookingforsecondhandownershipandhave Service needsstatus“notok”as one of the prime targets - Corporate Accounts Exclusivityof corporatesaccountswouldalsobringinimmense opportunity CustomerTargeting: Basedon the Analysisoutcomes,we will targetthe hypersegmentthatbrings inhighrevenue tothe firm.Basedon the informationabove we cangenerate dashboardsfor businessintelligenceandunderstandthe KPI’sthereforetargetingthe valuegeneratorsforthe business.
- 5. RelationshipMarketing Organizational requirement:The primaryobjective of the organizationistocreate a systemforpre- ownedcars.Theytargetedcustomerswhorequiredsecondhandcarsand servicesfortheircars Customerfocus: Customerprofiling - Ownerpersonalitytype (Gearheads,Flaunters,Epicure,Functionalist) -Service needstatus(ok/notok) -Ownershipcategory -Car lifecyclestatus -Salesorservice Communicationplans - Expandto online communicationcampaignstoFacebook,Twitter - Make appointmentsinadvance - Organize campaignsandoffers - NewspaperInsertions - Emails IT infrastructure:Whetherthe systemwill be onpremiseorCloud,orthe applicationstobe usedwill be COTS or customized. PRIVACY:Data collectedshouldbe obtainedthroughsecondaryorprimarysources,without harassingor intrudinginthe customer’slife.Theyshouldn’tmake the existingorpotentialcustomer uncomfortable withthe frequencyornature of questions.
- 6. Typical CRM Structure: TABLE 1 TABLE 2 TABLE 3 TABLE 4 TABLE 5 Customer Details Car Information Lead Status Services Provided SCOPE Name Category A/B/C status Mechanical Repair Potential requirement Phone number Car make category Denting and Repair Analysis Address year of manufacture Require ments Preventive Maintenance Team assigned to Age Chassis number source Running repairs Feedback management Email Id Registration number type Value Added services Pin code vehicle's Life cycle stage Nearest Workshop within warranty post warranty subsequent ownership METRICS 1. Price Points:MFCSL intendedtocharge around~15-20% lesserthanthatcharged byOEM workshops,therebyhopingtoattract customers.Howeverthisisstill higherthanthat chargedby local garages,whichthemselvesdidn’thave astandardpricing fortheirservices. 2. Potential revenue fromacustomerovera vehicle’slifecycle:Thisneedstobe gauged appropriatelyinthiscontext,asthe typical holdingperiodforavehicle inIndiabyasingle customerissignificantlyhigher(~17years) asopposed tomanywesterncountries(~10years) 3. CustomerLifetimeValue&RetentionRate:Potential Revenue fromacustomerovera vehicle’sentire lifecyclewasdeterminedtobe inthe range of INR 18000-INR20000. Howeverdue tolowretentionrate (~40%),thismetricsfell considerably. 4. Margins: MFCSL was staringat a gross marginof ~35% of the salesrevenue onanaverage, and a netmargin of ~10%. 5. Average JobCard Pricing:Thiswasa major determinerpricing,asthisiswhatthe OEM workshopswouldcharge the customerwhentheywouldvisitthem. 6. Location:It was determinedthata15 bayworkshopwouldreachitsintendedprofitability onlyif that catchmentarea nearbywouldhave apopulationof atleast50000 cars. 7. Cost of CustomerAcquisition:The firmintended tokeepthe costtoa minimal (~INR250 per customer),whichinitself wasanuphill task.
- 7. Funnel of Acquisition: Campaign Managementand Promotions: Online presence withitsownwebsite anditspresence onFacebook,TwitterandGoogle Plus,where customerscouldmake appointmentsandview campaignsandoffers(notveryeffective). The major chunkof customerswasacquiredthroughon-the-groundactivities,suchasconducting free check-upcampsinresidential complexes,datacollectionatfuel stations,datasourcingand newspaperinsertsannouncingseasonal schemes. Restof the marketwas coveredbytele-calling. BusinessProspecting: Car ownersresidingwithinafive tosevenkilometreradiusof anMFCSL workshopwere more likely to use itscar services. Event Based Marketing: Fieldpromotersortele-callersofferedpotential customers,value passes,whichallowedthemto save on variousservices. Promotingsalesthroughthird-partyacquisitions.byselling valuepasses(discountcouponsforcar services) throughtemporaryworkers,mainlycollege interns. Several annual loyaltyprograms,whichwere generallypre-paidschemesforayear. ConversionRatio: The conversionrate waslessthan1:15 viaof tele-callingthroughin-house call desksandan outsourcedcall centre while the social mediapostswere able togarneraround1000 customers. Referrals: The customerswere satisfiedandsome delightedwith the servicesandpromisedtocome backfor a repeatexperience whichwasvalidatedviathe customertestimonials. Core characteristics: PreventiveMaintenance Service (PMS) — regularservices RunningRepairs(replacementorrepairof mechanical partsdue to damage fromwearand tear or veryminoraccidents) Minor DentingandPainting(MDP) jobs Value AddedServices(VAS),suchascar polishing,cleaning,grooming,etc. Value (Value Proposition): One stopsolutionprovidingthe whole range of aftermarketservicesforautomobiles,including repairs,routine maintenance andspare parts.Theyofferedtoprovide multi- brandedandquality servicesatcost effectiveprices.
- 8. Customeracquisitioncost: It was a greatchallenge forMFCSL to keepthe customeracquisitioncostata justifiablelevel of Rs.250 peracquisition.Itisa fact that itcosts around6 to 7 timesmore toacquire a new customer than to retainanold customer.Itisobtainedbydividingthe amountspentonacquiringnew customersbythe total numberof customersacquired. The Funnel Suspect: The entire AftermarketbusinessinIndia Qualifiedlead: Car ownersresidingwithinafive tosevenkilometreradiusof anMFCSL workshop. Prospect: Individual carownerswhoare withinwarrantyasprovidedbytheircar maker, Corporate FleetPostwarranty, Taxi Fleetthatmighthave subsequentownership. (GearheadsandFlaunters) Customer:Ownersof cars (typicallycarsthatwere outof warranty) usedthe servicesof MFCSL workshopsonthree tofour occasionsovera periodof twoto two-and-a-half yearsbeforetheysold theirvehicles. Suspects: Indian car Aftermarket Leads: New and pre owners who seek after services Prospects:Car owners residingclosebyandowners postwarranty Customers