1. Reverse Logistics
Expertise
Account Management
Performance
Measurement
Customer Training
Service Excellence
Date : May 19th 2016
Venue : Rangsit University, Bangkok,
Thailand
The feasibility study to extend the partnership between Intel and
tablet manufacturers to their product return services and gain
opportunities to rejuvenate the Intel Inside campaign in Malaysia
market.
2. • Problems
• Research Questions& Objectives
• Discussions and Conclusions
• Recommendations
Agenda
3. Problems
• The reality of the “more than Moore Law”.
• The pull-effect of Intel Inside is fading in the tablet& smartphone segments.
• Tablet& smartphone segments which is respectively dominated by Apple: 37% and
Qualcomm: 54%, in which Intel only captured 1% and 4-5%. Furthermore, MCG looks
very vulnerable financially.
• Contra revenue, $ 20 more expensive to integrate Bay Trail chip.
• Tablet’s growth shows signs of slowing down (Gartner, IDC: Pass on, Phablet)
4. Why Apple is successful?
1. The BIG number:
All time high record quarter (Q4’14) with the revenue of $74.6 billion which exceeded analysts’ estimation of
$67.7 billion, with the $18billion record breaking profits.
74.5 million iPhone sold vs the estimation of 67 million.
2. Success in wining customer satisfaction.
National Customer Satisfaction Index (NCSI) score of 84 in the electrical retail sector in 4th quarter 2013, and
maintains a strong lead, rising 1% from a year ago.
Though dropped 3 percent to 84 in the American Customer Satisfaction Index (ACSI) in the household appliances
and electronics sector in 2014, but still managed to maintain a sizable lead over its major competitors, which it
has held since 2004.
3. According to Michael Porter who is the Professor of the Institute for Strategy and Competitiveness, Harvard
Business School: It is impossible to achieve a sustainable model by adopting differentiation and cost leadership
strategies at the same time. Heracleous (2013), who is the Professor of Strategy & International Business of Warwick
Business School, explained that Apple Inc. win in the so called “Quantum Strategy”: An unconventional strategy
which combines differentiation through innovation and high levels of efficiency.
5. More than 20 million tons of e-waste
are produced globally every year.
20,000,000 tons of e-waste
8,000,000,000laptops
6. Research Questions
1. What affects customer’s buying behavior for tablet?
2. How do Product Return services affect customer loyalty?
3. How to reposition/ redesign Product Returns to help Intel and the OEM partners to win?
4. How to motivate consumer to ask for a tablet powered by Intel chip?
7. Research Objectives
1. Evaluate the factors that affect customer satisfaction on tablet product, Product Returns
services and customer loyalty.
2. Evaluate and understand customer’s perception of product returns services.
3. Analyze how to gain customer value by repositioning/ redesigning Product Returns
services which will help Intel and the OEM partners to achieve differentiation focus.
4. Analyze how to drive customer’s demand of the tablet powered by Intel chip.
8. Demographics of 464 validated responses
Items Demographic Factors Categories Frequencies Percentage to entire sample size
1 Gender
Male 222 47.80%
Female 242 52.20%
2 Ethnicity
Malay 171 36.90%
Chinese 261 56.30%
Indian 32 6.90%
Others 0 0.00%
3 Age
Less than 18 129 27.80%
18-30 249 53.70%
31-45 64 13.80%
Above 45 22 4.70%
4 Category
Student 124 26.70%
Non- Student 340 73.30%
5 Tablet Ownership
Yes 273 58.80%
No 191 41.20%
Tablet Ownership Breakdown Categories Frequencies Percentage to entire sample size Percentage to Tablet Owner Population
5.1 Use Duration
Less than 2 years 115 24.80% 42.10%
More than 2 years 158 34.10% 57.90%
5.2
Product Returns Encounter
Experience
Yes 70 15.10% 25.60%
No 203 43.80% 74.40%
10. Product Returns Condition IV tested DV tested Hypotheses Result Derived
Standard
Product Returns Satisfaction
(PRS) and Customer Satisfaction
(CS)
nil H1A
There is a significant positive relationship
between Product Returns Satisfaction (PRS) and
Customer Satisfaction (CS).
Supported
Standard Customer Satisfaction (CS) Customer Loyalty (CL) H2A
There is a significant positive relationship
between Customer Satisfaction (CS) and
Customer Loyalty (CL).
Supported
Standard
Product Returns Satisfaction
(PRS) and Customer Satisfaction
(CS)
Customer Loyalty (CL) H3A
There is significant positive relationship between
Product Returns Satisfaction (PRS) and Customer
Loyalty (CL) with Customer Satisfaction (CS) as
the mediating factor.
Rejected as the mediator
is identified as PRS
instead of CS. Hence H3A
is modified to H3M.
Standard
Product Returns Satisfaction
(PRS) and Customer Satisfaction
(CS)
Customer Loyalty (CL) H3AM
There is significant positive relationship between
Customer Satisfaction (CS) and Customer Loyalty
(CL) with Product Returns Satisfaction (PRS) as
the mediating factor.
Modified from H3A as the
identified mediator is
PRS.
Extended Customer Value (CVE) nil H4A
CVE: Customer Value (Extended Product Returns)
is created by extending the Product Returns
Services.
Supported
Extended
CVE: Customer Value (Extended
Product Returns) and CSE:
Customer Satisfaction (Extended
Product Returns).
nil H5A
There is a significant positive relationship
between CVE: Customer Value (Extended
Product Returns) and CSE: Customer Satisfaction
(Extended Product Returns).
Rejected
Extended
CVE: Customer Value (Extended
Product Returns)
CLE: Customer Loyalty
(Extended Product
Returns)
H6A
There is a significant positive relationship
between CVE: Customer Value (Extended
Product Returns) and CLE: Customer Loyalty
(Extended Product Returns).
Supported
Summary of Hypotheses Testing
11. Conceptual Framework
Reconstructed Framework
CL= 0.441+ 0.841PRS+ 0.034CS
CLE= 1.604+ 0.154PRS+ 0.222CSE+ 0.133CVE
CLE= 1.666+ 0.154PRS+ 0.224CSE+ 0.134CVE -0.041PRExp
3 major components were introduced into the extended product returns service which
are:
The extension of manufacturer’s standard warranty from one year to two years.
A guaranteed trade-in value (not less than 30%) which will be realized on the
next purchase as a discount when the existing tablet is returned.
5-10% premium added into the selling price
12. Conclusion
1. Product Returns should not be deemed as a cost of doing business and will bring direct
positive impact to Intel’s business if being implemented strategically by extending to
B2C context.
2. With the expectation to withdraw the contra revenue on the new Broxton chip as well
as the smaller die size of the SoFIA’s in 2015/16, Intel should consider reallocating the
resources into end customer context to regain the pull-effect and bring back the best
day of the Intel-Inside campaign in the 90’s.
3. At the beginning stage of the implementation, cost would be critical. Therefore
more focus should be aimed at the higher end customer who can comfortably
afford tablet cost >USD400, so that the chances of additional premium (5-10%) to
affect customer value is lower. Once the business model is sustainable with more
participants, manufacturer’s cost on Product Returns extension will be significant
lower.
13. Recommendations
Subsidy some% on the trade-in program e.g., part of the 30% rebate on the new Dell
5.5 tablet.
Subsidy part of the 5-10% additional premium end user got to pay to participate in
the extended product returns.
Extend product return service to Dell’s end customer to facilitate the trade-in
program, e.g., making deals with our channel partners.
Engage our channel partner to sell the refurbished Dell tablet to emerging market
Intel to absorb some of the refurnished Dell tablets to run CSR program.
17. Tag Heuer Connected Selling
at USD1500
Upgrade to a
special edition
Carrera Series
(np: $5,000.)
Adding USD1500
18. As the end consumer, what is expected from us?
Remove the thought of advantage taking by surrendering your faulty product only
when it is caused by our own carelessness/ mishandling.
Take good care of our existing consumer electric products as it will affect warranty/
returns for upgrade.
Paradigm shift to accept 2nd hand/ refurbished product as a good product.
