Project Report: After Sales service of Automobiles in India

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Project Report: After Sales service of Automobiles in India

  1. 1.       PROJ JECT REPO ORT ON ST TUDY O SA OF ATISFAACTIO LEV ON VEL O OF CON NSUMEERS T TOWARRDS ‘A AFTER R-SALE ES’ SER RVICES OF A S AUTOMMOBIL LES SU UBMITTED BY D Mr. Ankit Tr ripathi Semester IV , Cours :PGDBM se M Ro No.: P1058 oll Batch: 2010 B 0-12 MARKETIN M NG UNDER THE GUID DANCE OF PROF. JA P AYSHREE WASNI E IKSyden nham Inst titute of M Manageme Studie Resear And E ent es, rch Entrepren neurship Educatio on
  2. 2. Guide Copy A Study of Satisfaction level of consumers Towards ‘after-sales’ services of Automobiles This project report in the Area of Marketing Specialization based on the in-depthstudy of the project theme is submitted in March,2012 to the Sydenham Institute ofManagement Studies and Research and Entrepreneurship Education, B – Road,Churchgate, Mumbai – 400 020, in partial fulfillment of the requirements for the award ofthe diploma of Post Graduate Diploma in Business Management ( PGDBM ),recognized by Government of Maharashtra.Submitted ByNAME: Ankit Tripathi ROLL NO. : P1058Batch: 2010-2012ThroughName of the Guide :- Prof. Jayshree Wasnik
  3. 3. Guide Copy CERTIFICATE This is to certify that the project report entitled “A Study of Satisfaction level ofconsumers towards ‘after-sales’ services of Automobiles” is submitted in March,2012to the Sydenham Institute of Management Studies and Research andEntrepreneurship Education, B – Road, Churchgate, Mumbai – 400 020,by Mr. AnkitTripathi bearing Roll No. P1058 (2010 – 2012) in partial fulfillment of the requirementsfor the award of the diploma of Post Graduate Diploma in Business Management (PGDBM ), recognized by Government of Maharashtra. This is a record of his own work carried out under my guidance. He has discussedwith me adequately before compiling the above work and I am satisfied with the quality,originality and depth of the work for the above qualification.PLACE: MUMBAI.DATE: Prof. Jayshree Wasnik SIMSREE, 3rd Floor, B-Road ,Churchgate, Mumbai- 40020. Telephone No.: 022 – 61510721 E-mail - jayshree.wasnik@simsree.net
  4. 4. Guide CopyTABLE OF CONTENTS1. Auto Industry in India ....................................................................................................1 1.1 Introduction..............................................................................................................1 1.2 Evolution..................................................................................................................1 1.3 Current Market Scenario..........................................................................................3 1.4 Classification of Market Segments ..........................................................................62. After Sales Service .....................................................................................................10 2.1 Definition ..............................................................................................................10 2.2 Importance of After Sales Service .......................................................................10 2.3 After Sales Service as Key to Customer Retention .............................................123. After Sales Service in Automobile Sector .................................................................15 3.1 Introduction ..........................................................................................................14 3.2 Nielsen Survey Result...........................................................................................14 3.3 Opportunity to Build or Break Loyalty ................................................................15 3.4 Some Initiatives by Car Manufacturers in India ...................................................164. Research Plan and Methodology .................................................................................18 4.1 Need for Study ......................................................................................................18 4.2 Objective of the project ........................................................................................18 4.3 Variables under Study...........................................................................................18 4.4 Data Collection .....................................................................................................19
  5. 5. Guide Copy5. Research Findings and Analysis ..................................................................................20 5.1. Findings.................................................................................................................20 5.2. Analysis using SPSS .............................................................................................326. Observations ................................................................................................................357. Conclusion ...................................................................................................................378. Recommendations........................................................................................................389. Bibliography and References .......................................................................................3910. Annexure....................................................................................................................40
  6. 6. Guide CopyLIST OF TABLESTable 1 Distribution of domestic market share in Auto Industry........................................................... 3Table 2 Market share in Passenger Car Industry in 2010 – 2011 ........................................................... 5Table 3 What is your vehicle type? ....................................................................................................... 20Table 4 Car Brand ................................................................................................................................. 21Table 5 Regular Service Intimations ..................................................................................................... 21Table 6 Ease of contacting service department ..................................................................................... 22Table 7 Service Advisors expertise ...................................................... Error! Bookmark not defined.Table 8 Appointment Availability ........................................................................................................ 23Table 9 Ease of Checking in the vehicle ............................................................................................... 24Table 10 Communication during WIP .................................................................................................. 25Table 11 Availability of Spares ............................................................................................................ 25Table 12 Punctual Delivery .................................................................................................................. 26Table 13 Extra Work Communication .................................................................................................. 27Table 14 Cross selling activities ........................................................................................................... 28Table 15 Consumer Forum Awareness ................................................................................................. 28Table 16 Unpleasant experience in service station ............................................................................... 29Table 17 Resolution by service manager .............................................................................................. 30Table 18 Escalations to Forums ............................................................................................................ 30Table 19 Better Service over marginally better product ....................... Error! Bookmark not defined.Table 20 Better Service to higher variants- .......................................................................................... 31Table 21 Chi-Square test (Service Intimations and Desired appointment time) ................................... 32Table 22 Correlation (Unpleasant Experience and its Resolution by Manager) ................................... 33Table 23 Correlation (Unpleasant Experience and Approached Forum) .............................................. 33Table 24 Correlation (Timely Delivery and Providing better service to higher variants) .................... 34
  7. 7. Guide CopyTable 25 Correlation (Cross Selling and Unpleasant experience) ........................................................ 34 LIST OF CHARTSChart 1 Pie chart showing distribution of domestic market share in Auto Industry .............................. 4Chart 2 Market share in Passenger Car Industry in 2010 – 2011............................................................ 5Chart 3 Box diagrams of a sedan (top), station wagon (middle) and hatchback (bottom) .................... 20Chart 4 What is your vehicle type? ....................................................................................................... 20Chart 5 Car Brand ................................................................................................................................. 21Chart 6 Regular Service Intimations ..................................................................................................... 21Chart 7 Ease of contacting service department ..................................................................................... 22Chart 8 Service Advisors expertise ...................................................... Error! Bookmark not defined.Chart 9 Appointment Availability......................................................................................................... 23Chart 10 Ease of Checking in the vehicle ............................................................................................. 24Chart 11 Communication during WIP .................................................................................................. 25Chart 12 Availability of Spares ............................................................................................................. 25Chart 13 Punctual Delivery ................................................................................................................... 26Chart 14 Extra Work Communication .................................................................................................. 27Chart 15 Cross selling activities............................................................................................................ 28Chart 16 Consumer Forum Awareness ................................................................................................. 28Chart 17 Unpleasant experience in service station ............................................................................... 29Chart 18 Resolution by service manager .............................................................................................. 30Chart 19 Escalations to Forums ............................................................................................................ 30Chart 20 Better Service over marginally better product ....................... Error! Bookmark not defined.Chart 21 Better Service to higher variants- ........................................................................................... 31
  8. 8. Guide CopyACKNOWLEDGEMENTSI wish to express my gratitude to my project guide “Ms. Jayshree Wasnik” for her valuablesuggestions. Because of her guidance and help, I am able to complete this project report on “AStudy of Satisfaction level of consumers towards ‘after-sales’ services of Automobiles”I would also like to thank the respondents of the survey for taking out valuable time to fill thesurvey. Ankit Tripathi
  9. 9. Guide CopyEXECUTIVE SUMMARYWith the ever burgeoning middle class in India and rising incomes, the demand for automobilesin the country is on the rise. With almost all major players vying for the pie in the market, it isbecoming a buyer’s marketCompanies have worked over-time to ensure that their product is best in the category and haveconcentrated heavily on the product. One aspect that has been ignored here is that when the saleis made, it is not just the product. They also sell service.With ever increasing competition and limited innovations on the product end, companies are nowforced to consider the service aspect of their offering and focus more on adding value to thecustomer by providing superior service.The type of service could be pre or post sales. Pre sales service consists of Car Demo, TestDrive, Loan disbursement scheme etc. The Post or more popularly know as “After-Sales” serviceconsists of regular maintainence and check-ups for the vehicle. Companies generally providewarranty support which is either limited by duration or the mileageThe project aims to find out the satisfaction levels of consumers towards the service that is beingoffered to them in post-sales category. The study does not aim to compare services of differentcompanies thereby declaring a winner, but it tries to bring out the common factors whichcompanies lack in and need to improve upon in order to provide better customer service therebyleading to better customer retention and finally higher revenues
  10. 10. Guide  Co opy 1. AUT INDU TO USTRY IN INDIA N1.1. INT TRODUCT TIONCirca 1 1895, the f first modern automobile rolled o n onto the st treets of M Mumbai (th henBombay It was o of the i y). one initial mode of horsel el less carriages, much p prior to Hen nryFord’s e experiment of the icon Ford M nic Model – T. T Indian automobile industry h The e hascome a long way since then. Today, it is one of th fastest g he growing ind dustries in t theworld. T automo The obile industr is one of the major employmen and reven generato ry f nt nue orsfor the c country. Alm all maj auto com most jor mpanies of t world ar vying for a space in t the re theIndian m market. The market is segmented on several basis viz. size of the car, heritag e d l ge,model t type, usage and perfo e distribution, etc. each enjoying a healthy a ormance, d andincreasingly stiffer competitio day by day. From the point o view of this resear r on of f rchproject, it is there efore vital t first stud the Indi automobile market in order to to dy ian t,understa its evolu and ution, the im mportant events, and th current m he market scenar In conte rio. extof the pr roject we sh be limit hall ting our disc cussion to th passenger car industr only. he ry1.2. EV VOLUTION N Fig1.1 Maruti 80 – Dawn o a new er 00 of raThe pas ssenger car i industry in I India can be practically divided int two eras: the Pre – e y toMaruti e and the P – Maru era. At th time of in era Post uti he ndependenc India virt ce, tually had n nohome gr rown compa manufacturing auto any However, ma British a American omobiles. H any andcompan had esta nies ablished thei subsidiari in India for assembl purposes. At this tim ir ies ly . me,the new governm of India adopted th License R as way fo wly ment a he Raj forward for t economy the y.This led to consolid d dation of the economy i the hands of the existing compan e in s nies, namely y
  11. 11. Guide Copy  2        Hindustan Motors,  Premier Automobiles and  Standard Motors.The industry didn’t see any other major competitor for almost three decades since then.As a combined effect of the License Raj, low demand for automobiles and lack ofindigenous R & D, the Indian auto market hardly registered any progress till 1980. It wasin early 1980’s that Maruti 800 project was initially launched. Its launch marked abeginning of a major revolution in the industry. The original car was intended to be aindigenously designed, economy car for the masses. However, this plan was soondropped as political interference and engineering complications delayed the project. Verysoon, company was suffering from bankruptcy. As a result, its assets were nationalizedand the State owned Maruti Udyog came into being. This time around, the plan forindigenous development was abandoned and the company adopted the Joint Ventureapproach. Many leading foreign automobile companies were considered, and the SuzukiMotor Co. from Japan was finalized. It was chosen mainly because of its expertise in thesmall car industry, the range of available cars in its stable (which could be considered forfuture launch), and also because of attractive terms and conditions. Thus Suzuki came toown 26 percent in the JV, with permission to increase to 50 percent in the future.Thus the Maruti 800 was launched (loosely engineered on the Suzuki Alto platform), andit quickly captured the market. It further led to the launch of Maruti Omni van and Maruti1000 models, which further enhanced Maruti’s share in the Indian market. The Marutimodels were periodically upgraded, keeping in sync with international changes. In thefirst half of the 1990s, Maruti enjoyed around 60 percent of the market share in passengercars. The launch of Maruti led to shake up among the competitors as well. Premierautomobiles acquired rights from Fiat to manufacture Fiat 124 and Hindustan motors didthe same with Vauxhall Motors for the Contessa. Many other small time automakers tooacquired rights for several foreign cars. Premium automobiles in particular formed anumber or JV with European companies to establish themselves in the upper segments.Ankit Tripathi P1058  
  12. 12. Guide Copy  3      With the liberalization of the economy came a demand from new companies, both localand international, to enter the Indian market. Tata Motors launched their first passengercar viz. Tata Estate. Hindustan Motors began manufacturing Opel Astra, a brand ownedby General Motors. This marked a beginning of a flurry of cars emerging on the scene.By the turn of the century, many international companies had emerged on the Indianscene. Prominent amongst them were Hyundai, Toyota, Honda, Ford, Fiat, etc. Evenluxury marquees like Mercedes – Benz and gained substantial visibility. Home growncompanies such as Tata Motors and Mahindra and Mahindra too contested for a share invarious segments. The later years saw another wave of foreign companies opening upfactories, this time led by General Motors, Skoda, Nissan, Volkswagen, BMW, Audi, etc.The auto industry in India now is at par with international standards, with companiesincreasingly looking towards it as the future growth engine.1.3. CURRENT MARKET SCENARIOThe passenger car industry in India constitutes around 16 percent share of the Indianautomotive market, and is a rapidly growing one, with a growth rate of 10 percent in thelast year. Domestic Market Share in 2010 – 2011 Type of Vehicles Percent Share Domestic Sales Passenger 15.86 19,49,776 Vehicles Commercial 4.32 531,395 Vehicles Three Wheelers 3.58 440,368 Two Wheelers 76.23 93,71,231 Total 100 12,290,770 Table 1: Distribution of domestic market share in Auto IndustryAnkit Tripathi P1058  
  13. 13. Guide Copy  4       Commercial  Three  Vehicles, 4% Wheelers, 4% Passenger  Vehicles, 16% Two Wheelers,  76%Graph 1.1.: Pie chart showing distribution of domestic market share in Auto IndustryThe passenger car segment has witnessed more than 30 launches in the past years as newbrands and companies enter the scene. Also, the segment focus has shifted from being aninternationally laggard one, to one being at par with it. Many companies such as Toyota,General Motors now launch their international car versions or upgrades in India ratherthan other markets.The passenger car segment is still dominated by Maruti Suzuki, which has a share of47.68 percent in 2009 - 2010, though it represents a decline to that of previous year. It isfollowed by Hyundai Motors with a share of 18.89 percent, Tata Motors with 14.72percent, etc. The next in line are Ford, General Motors, Honda, Toyota, etc.Ankit Tripathi P1058  
  14. 14. Guide Copy  5      Market Share in Passenger Car Industry in 2009 – 2010 (by salesnumbers)Company Percent shareMaruti Suzuki India 47.68Hyundai India 18.89Tata Motors 14.72Ford Motors India 5.31General Motors India 4.87Honda Siel 3.20Mahindra & Mahindra 2.12Others 3.21Total 100Table 1.2.: Market share in Passenger Car Industry in 2010 – 2011 Honda  Mahindra &  General  Others , 3.21 Siel ,  Mahindra ,  Motors India  3.2 2.12 , 4.87 Ford Motors  India , 5.31 Maruti Suzuki  Tata Motors ,  India , 47.68 14.72 Hyundai India  , 18.89 Figure 1.2.: Market share in Passenger Car Industry in 2010 – 2011Ankit Tripathi P1058  
  15. 15. Guide Copy  6      1.4. CLASSIFICATION OF MARKET SEGMENTSA market segment consists of a group of customers who share similar sets of wants anddemands. The marketer’s task is to identify such segments within the industry so as todecide which one to target. Segment marketing offers several benefits over massmarketing:  The company can create a more fine-tuned product or service offering and price it appropriately for the target segment  The company can more easily select the best distribution and communication channels  The company has a clearer picture of its competitors in the same segmentIn the context of the automobile industry, classifying market segments would be done onthe following basis:1. Based on the price of the car2. Based on the length of the car3. Based on the shape of the car1.4.1. Based on the price of the carA – segmentIt is the entry level segment and it ranges upto Rs. 3 lakhs. Several cars in this segmentare Maruti 800, Maruti Alto, Tata Nano, Hyundai Santro, GM Spark, etc.B – segmentIt ranges from Rs. 3 lakhs to Rs. 6 lakhs. Cars in this segment include Maruti Swift,Maruti Estillo, Hyundai Santro Xing, Tata Indica, GM Beat, Ford Figo, etc. There hasbeen a rise in number of people who belong to the affluent middle class and wish tograduate to these cars which provide the extra glitz and glamour than an entry level car.These cars come with fancy things like power steering, power windows, pepped upengine and conform to the latest emission norms. The cars in the A and B segment aretypically hatchbacks.Ankit Tripathi P1058  
  16. 16. Guide Copy  7      C – segmentAt this stage of lifestyle, cars cease to become a mode of transport and are representativeof social status and repertoire. Thus people go for cars which are bigger in size, have areputed brand image, and are more costly. Cars in segment are Honda City, Tata Indigo,VW Vento, Ford Ikon, Chevrolet Optra, etc. This segment ranges from Rs. 6 lakhs to Rs.12 lakhs.D – segmentThe cars in this segment are a statement of luxury and come with a heavy price tag. Carsare usually customized and have a host of accessories fitted into it. This segment rangesfrom Rs. 12 lakhs and above. Recently, this segment has began to blossom in India, withmany luxury marquees like Mercedes, BMW, Audi, Volvo, Skoda, etc coming on road.1.4.2. Based on the length of the car.A segment – Cars that are less than 3.5 metres longB segment – Cars between 3.5 to 4 metres longC segment – Cars between 4 to 4.5 metres longD segment – Cars that are more than 4.5 metres long.Ankit Tripathi P1058  
  17. 17. Guide Co opy  8      1.4.3. B Based on the shape of t car. e theFigure 1.2.: Box d diagrams o a sedan ( of (top), statio wagon ( on (middle) an hatchba nd ack m)(bottom back :HatchHatchb hback is a ca which has two sections. One is t engine section and t ar s the theother is shared pas ssenger and cargo secti ion. These a usually five door c are cars where t therearmos section (i.e. cargo area) is acces st ssible via a top-hinged liftgate wit a facility to thfold dow rear seat and enable flexibility within the shared pass wn ts y senger and c cargo volum me.Sedan/ S Saloon/ Not tchbackSedan o Saloon is a three-box car with th segmen namely A B & C. T or x hree nts A, These three a arethe engi passeng and carg compartm ine, ger go ments respec ctively. The cargo comp partment iscalled as the boot a is the ba differen between a sedan and a hatchbac and asic nce d ckAnkit Tripathi P1058  
  18. 18. Guide Copy  9      Coupe :A coupe is usually manufactured on an existing sedan platform, but has a sportylook to it. Detailed definitions vary from manufacturer to manufacturer. Coupes designedthese days are usually 2 – seater cars, thus distinguishing between them and a sedanConvertibleConvertible is a car where the roof can retract or fold away that converts it from anenclosed car to an open air car. Mostly the high-end premium and expensive cars havesuch facility.Minivan / MUV : They are cars designed on a 1 – box or 2 – box approach, withmaximum interior space being the topmost criteria.Station Wagon : A station wagon is a variant of sedan / saloon with an extended roofthat covers the shared passenger and cargo compartment. The station wagon has a biggercargo area, which is accessible via a 5th door i.e. a liftgate or tailgate.Sports Utility Vehicle / Offroader: They are similar to a station wagon but are built onlight truck chassis. They generally have a 4 – wheel drive, making them suitable for bothon – or off – road capabilityAnkit Tripathi P1058  
  19. 19. Guide Copy  10      2. AFTER SALES SERVICE2.1 DEFINITIONAfter Sales service can be defined as the Periodic or as-required maintenance or repair ofequipment by its manufacturer or supplier, during and after a warranty period.It Refers to all measures of marketing, which are taken from manufacturers and retailersin order for a successful business transaction or sale to customers for their own productsand binding them to their own services. Aftersales encourages repeat and additionalpurchases, increasing customer satisfaction and ensures long-term customer loyalty.Aftersales often achieves a higher margin than new business, and is a sustainable ways toincrease customer value and profitability.The needs and demands of the customers must be fulfilled for them to spread a positiveword of mouth. In the current scenario, positive word of mouth plays an important role inpromoting brands and products. After sales service makes sure products and servicesmeet or surpass the expectations of the customers.After sales service includes various activities to find out whether the customer is happywith the products or not. After sales service is a crucial aspect of sales management andmust not be ignored.2.2 IMPORTANCE OF AFTER SALES SERVICEAfter sales service should be an integral part of any companies’ sales strategy. A goodAfter Sales service can with its excellence help you gain market share, reduce after-salesrelated overheads on products and services sold and most important of all key tocustomer retention. Most customers will not make a repeat purchase or continue with acompany’s services in case of a bad experience.Many companies underestimate the potential After Sales has for giving you a competitiveadvantage. Customers expect a high-quality customer service, especially as they focus onAnkit Tripathi P1058  
  20. 20. Guide Copy  11      getting good value for their money and are willing to spend more with those that deliverthe best.According to American Express Customer Service Barometer “buying decisions of 89 percent of consumers are influenced by convenience and 90 per cent of them attachimportance to value-for-money propositions, almost 90% of consumers make theirpurchases based on the quality of after sales customer service.”The process of managing products after they have been sold has many names, such asAfter Sales, Reverse Logistics, Returns/Service Management, After Sales Service, andCustomer Care.Some Facts About After Sales Service: 1. 6% of all items sold are returned (Returns Logistics, 2009). 2. 68% of returns have no technical fault (Accenture report, 2007). 3. The average loss related to a return is E19 (Newgistics, 2007) 4. Processing returns costs four times as much as processing the original order 5. An average of one consumer phone call is made per returnToday many companies operate in complex value networks, but they lack the end-to-endcontrol and visibility to effectively manage the discrete activities that make up theprocess, and they do not know how well these activities are being performed.A number of solutions are now available for the after sales process using Cloudprocesses. Service providers using this technology are able to provide effectivemanagement of their after sales business process network with the help of automatedprocedures. Other benefits are continuous visibility of entire operation in real time andquick access to all important data pertaining to after sales management. The cloudprocess confers entire control in your hands and improves efficiency while saving cost,with les human involvement for administration purposes as the processes are streamlined.Ankit Tripathi P1058  
  21. 21. Guide Copy  12      The cloud process facilitates better planning of assets and displays excellent forecastingcapabilities with efficient inventory management and finance management roles. Theprocess is easily accessible through mobile and web interfaces which is a great advantageto the mobile customer.In today’s highly competitive world the cloud process has the power to make your aftersales process a huge success. With its flexible qualities and intelligent features it enablescompany better detailing and increased customer retention2.3 AFTER SALES SERVICE AS KEY TO CUSTOMER RETENTIONGood after-sales service is the key to customer retention, with 77 per cent of Indianconsumers asserting that they will not make a repeat purchase or continue with acompanys services in case of a bad experience, says an American Express report.In order to attain new customers and retain the older ones, good customer service cannotbe ignored as a majority (82 per cent) of Indian consumers value it the most whilemaking a purchase.Customers want and expect high-quality service, especially as they focus on getting goodvalue for their money in a difficult economic environment, and are willing to spend morewith those that deliver excellent service -- suggesting substantial growth opportunities forbusinesses that get customer service right.As per the findings of the American Express Customer Service Barometer, 76 per cent ofIndian consumers are ready to shell out 11 per cent more for excellent customer service.In fact, 67 per cent of consumers have paid more for a product or a service of a companywith a good history of customer service.Moreover, 86 per cent of the consumers are ready to give a second chance to companieswith a good track record even after a poor experience.While the buying decisions of 89 per cent of Indian consumers are influenced byconvenience and 90 per cent of them attach importance to value-for-money propositions,Ankit Tripathi P1058  
  22. 22. Guide Copy  13      the majority of consumers (90 per cent) make their purchases based on the quality ofcustomer service.The American Express Customer Service Barometer is a survey conducted in India andeleven other countries exploring attitudes and preferences toward customer service.Approximately 65 per cent of Indian consumers share the belief that companies haveincreased their focus on providing good customer service, compared to 49 per cent inJapan, 47 per cent in Mexico and 37 per cent in America, which seems to reflect thecorporate mindset to retain customers as well.If the company is successful in satisfying its customers in terms of service, it gets thebenefit of word-of-mouth publicity. About 95 per cent of consumers give positivereviews about companies in case of good service in contrast to 77 per cent who speaknegatively after a poor experience.Ankit Tripathi P1058  
  23. 23. Guide Copy  14      3. AFTER SALES SERVICE IN AUTOMOBILE SECTOR3.1 INTRODUCTIONCars happen to be an expensive object and for most it holds aspirational value. Havinga car in household is a sign of good times. Naturally, one takes extra care to make surethat the product being delivered is upto the expectation of the customer.After Sales service in cars include the warranty on the car overall exlcuding somewearable items like tyres, body bumpers and internal accessories. Periodic servicing isoffered by most car manufacturers for a limited time period/upper limit on mileage. In light of recent rush by automotive giants from across the globe, differentiationholds the key and After Sales service is one important aspect after the product itself bymeans of which the manufacturer can stand out and get noticed and thereby result inincreased sales3.2 NIELSEN SURVEY RESULTSA recent survey by Nielsen suggests that automakers have opportunities to improve theirbusiness performance in the short term by focusing more on the customers they alreadyhave. Especially in these tough times for the industry, one of the most powerfultechniques for converting buyers into die-hard fans is providing exceptional after-salesservice.Nielsen surveyed more than 1,800 customers who had purchased all the automotivebrands sold in the India., to better understand their ownership and sales experience and toassess their brand loyalty. They asked owners to rate, on a scale of zero to 10, how likelythey were to recommend their vehicle to a friend or colleague. By subtracting thepercentage of "detractors" who gave scores between zero and 6, from the percentage of"promoters" who gave a score of 9 or 10, they calculated a "Net Promoter Score" (NPS).NPS is already used in dozens of industries to determine how deep loyalty to a particularcompany runs among its customers, and how it stacks up against its competitors when itcomes to customer loyalty.Ankit Tripathi P1058  
  24. 24. Guide Copy  15      The NPS survey for automakers revealed two important findings. First, promoters arenearly 10 times more likely than detractors to repurchase or lease a vehicle of the samemake or brand as their current one. Second, promoters are far more likely to recommendtheir vehicle brand to a friend. Each promoter provides nearly five purchase referrals,while each detractor dissuades two prospective buyers. Indeed, high NPS correlated withhealthy new-car sales growth; name plates with lagging scores had flat or declining unitsales.3.3 OPPORTUNITY TO BUILD OR BREAK LOYALTYHigh among the factors that create promoters—and help sustain their loyalty—is a strongafter-sales service experience. The reason is simple: Dealer service is the key point ofcontact with customers at the critical time when most people are weighing their nextvehicle purchase. Owners brand enthusiasm tends to erode as the vehicle ages and thewarranty expires. But it is precisely at this point—about four years after the initial sale—that the leaders capitalize on their loyalty advantage by using maintenance visits asopportunities to reinforce their ties with promoters and win over detractors.Excellent service not only reinforces relationships with customers who already feel loyalto a brand. It can also defuse ill will that causes disaffected customers to bad-mouth thebrand. Indeed, the brand leaders excel especially at turning unplanned repair visits—thosecritical moments of truth on which a customer relationship can hinge—into opportunitiesto strengthen customer bonds. While most carmakers aim to ensure that the serviceexperience does as little harm as possible, the leaders set out to surprise customers withease and convenience when they expect it least and value it most.The power of nurturing promoters shows up dramatically in data showing how severe thedamage can be when a repair experience doesnt go well. Overall, the NPS of loyaltyleaders whose vehicles have not needed a repair is a stellar 85. It falls off to a respectable77 when the vehicle needs a mechanics attention. But among loyalty laggards, anunscheduled stop in the shop resulted in scores plummeting 29 points to a dismal 19.Ankit Tripathi P1058  
  25. 25. Guide Copy  16      Owners of those vehicles are angry, and they are going to tell their friends and colleaguesabout it.Ultimately, the biggest influence on customer loyalty and affinity for the nameplate is thequality of the vehicle itself. But a bad after-sales experience can erode it just as quickly.In the economy they face today, automakers need to rethink how they win and retainevery customer they have.3.4 SOME INITIATIVES BY CAR MANUFACTURERS IN INDIACar manufacturers are increasingly focusing on expansive after-sales service facilities tohook customersThe country’s largest car manufacturer, Maruti Suzuki India (MSIL), has initiated itslargest service network expansion drive this financial year since its inception. In thecourse of the year, it intends to add 200 outlets to cater to demand across sectors.MSIL has 2,855 service centres across 1,363 cities. The number is set to cross the 3,000-mark by the end of 2010-11. The company also has customers in 2,900 talukas and 70 percent of these have been covered under their rule of a service station every 25 km. As ofdate, the average distance to the closest MSIL service station in the remaining areas is 35km.Hyundai Motor India (HMIL) has firmed up plans to open 130 additional facilities toservice customers in 2011. This would increase the number of service points for Hyundaicars to 757.Toyota, set to foray into the intensely competitive small car segment with the Liva inApril next year, is working on doubling its sales and service centres by the end of thisyear. TKM had 97 sales and service centres last year, which would increase to 150 by theend of this year. Of this, 135 centres would have workshops for maintenance activities.Among others, Toyota has developed a new dealership management system, which wouldenable the company to maintain a database for all its customers across the country.Ankit Tripathi P1058  
  26. 26. Guide Copy  17      General Motors India, aiming to treble sales in India by 2014 on the back of the six newmodels it has slated for launch, starting December 2012, is expanding the number ofservice facilities by 50 per cent to 300 by March 2013. GM is already offering three-yearfree maintenance for its small cars, the Chevrolet Beat, Spark and Aveo UVA, a first inthe industry.Tata motors are expanding our after-sales network in tier-II and tier-III cities on theback of increasing demand. It has 800 service points for passenger vehicles across 500cities and towns.Ankit Tripathi P1058  
  27. 27. Guide Copy  18      4. RESEARCH PLAN AND METHODOLOGY4.1 NEED FOR STUDYIn light of intense competition for customers in India, it is imperative for carmanufacturers to hold that extra edge over their rivals. It has been observed that aftersales service even though an integral part for a car manufacturer to establish theirdominance in Indian markets is often ignored. The study is not comparative where werate one manufacturer vis-à-vis another but to understand the general level of service thata customer expects and what is being delivered to him4.2 THE OBJECTIVE OF THIS PROJECT  To find the current satisafaction level of consumers towards Automobiles  To find the awareness level of people towards after-sales services  To find the percentage of people who are well versed with the concept of consumer courts for arbitration issues  To understand if factors like warranty and after-sales service have bearing on customer choice for a product  To find if there is any relationship between price of a product and the level of after-sales service offered4.3 VARIABLES UNDER STUDYThe study will try to understand and gauge the different parameters to judge thelikes/dislikes of car owners. The various parameters under consideration are  Regularity of updates  Ease of contacting service department  Service advisors functional knowledgeAnkit Tripathi P1058  
  28. 28. Guide Copy  19        Availability of desired time-slot  Ease of checking in the vehicle  Communication during repairs/maintainence  Spare part availability  Delivery promise punctuality  Reasons for delaying service  Cross-sell attempts  Consumer Forum AwarenessFor this purpose, research methodology is implemented. This is implemented asdescribed below:4.4 DATA COLLECTIONPrimary Data: Structured QuestionnaireSecondary Data: Online Database, Journals, SurveysSample Unit: Respondents owning cars across subarban Mumbai.Sample Technique: Random samplingSample Area: MumbaiSample Size: 200Statistical Tool: SPSSAnkit Tripathi P1058  
  29. 29. Guide Copy  20      5. RESEARCH FINDINGS AND ANALYSISThe following are the results of the questions asked to the respondents in thequestionnaire (attached in the annexure section). The respondents were asked a rangeof questions in three distinct categories  Beginning from their vehicle type and Brand of the vehicle to understand the class of the respondent  Next, they were quizzed on various aspects concerning their overall experience with the service delivery of their car manufacturer  Finally, they were asked questions which judged if they were aware of consumer forums for welfare of consumers and if at all they felt the need to approach such forums5.1 FINDINGS1. What is your vehicle type? Vehicle Type Count Hatchback 102 Sedan 83 MUV 5 SUV 16 Vehicle Type SUV, 16 MUV, 5 Hatchback Hatchback,  Sedan 102 MUV Sedan, 83 SUVAnkit Tripathi P1058  
  30. 30. Guide Copy  21      2. Which brand of car you own? Brand Count Chevrolet 18 Fiat 5 Honda 25 Hyundai 35 Mahindra 14 Maruti 51 Nissan 5 Skoda 8 Renault 5 Tata Motors 18 Toyota 10 Volkswagen 12 Brand Volkswagen, 12 Chevrolet, 18 Toyota, 10 Chevrolet Fiat, 5 Fiat Tata Motors, 18 Honda Renault, 5 Honda, 25 Hyundai Skoda, 8 Mahindra Nissan, 5 Hyundai, 35 Maruti Maruti, 51 Nissan Skoda Mahindra, 14 Renault3. Do you receive regular intimations through calls/sms for "service due" for yourvehicle? Regular Count Intimations Yes 116 No 90Ankit Tripathi P1058  
  31. 31. Guide Copy  22       Regular Intimations No, 90 Yes Yes, 116 No4. How is the ease of contacting the service department to make an appointment? Appointment Count Ease Excellent 21 Good 125 Average 50 Poor 10 Appointment Ease Poor, 10 Excellent, 21 Excellent Average, 50 Good Average Good, 125 PoorAnkit Tripathi P1058  
  32. 32. Guide Copy  23      5. The service advisors understanding of the work required when you booked theappointment? Knowledge Count level Excellent 23 Good 34 Average 135 Poor 14 Knowledge level Poor, 14 Excellent, 23 Excellent Good, 34 Good Average Average, 135 Poor6. The availability of an appointment to suit you. Appointment Count Suitability Excellent 13 Good 124 Average 61 Poor 8Ankit Tripathi P1058  
  33. 33. Guide Copy  24       Appointment Suitability Poor, 8 Excellent, 13 Excellent Average, 61 Good Average Good, 124 Poor7. The ease of checking in at service reception on the day you brought yourmotorhome in for service/repair Check in ease Count Excellent 26 Good 133 Average 38 Poor 9 Check in ease Poor, 9 Excellent , 26 Excellent Average, 38 Good Average Good, 133 PoorAnkit Tripathi P1058  
  34. 34. Guide Copy  25      8. Communication during service/repairs to keep you updated on progress Communication Count during WIP Excellent 17 Good 76 Average 93 Poor 20 Communication during WIP Excellent, 17 Poor,  20 Excellent Good Good, 76 Average Average, 93 Poor9. Availability of Spares Availability of Count Spares Excellent 67 Good 56 Average 73 Poor 10Ankit Tripathi P1058  
  35. 35. Guide Copy  26       Availability of Spares Poor, 10 Excellent Excellent, 67 Good Average, 73 Average Poor Good, 5610. Was your vehicle ready for collection at the agreed time? Punctual Delivery Count Yes 148 No 58 Punctual Delivery No, 58 Yes No Yes, 148Ankit Tripathi P1058  
  36. 36. Guide Copy  27      11. If you were advised that further work was required at a later date were you werefully informed of the reasons why and either booked in for that work or advised thatyou would be contacted when the necessary parts arrived in stock? Extra Work Count communication Yes 123 No 83 Extra Work communication No, 83 Yes No Yes, 12312. Do the customer service executives try to cross-sell other car accessories? Cross Sell Count Yes 128 No 78Ankit Tripathi P1058  
  37. 37. Guide Copy  28       Cross Sell No, 78 Yes No Yes, 12813. Are you aware of consumer forums by Ministry of Consumer Affairs? Forum Count Awareness Yes 116 No 90 Forum Awareness No, 90 Yes Yes, 116 No14. Have you ever had an unpleasant experience at the service center ?Ankit Tripathi P1058  
  38. 38. Guide Copy  29       Unpleasant Count Experience Yes 53 No 153 Unpleasant Experience Yes, 53 Yes No No, 15315. If yes, was it resolved by service center Manager? Resolution Count Yes 37 No 42 NA 127Ankit Tripathi P1058  
  39. 39. Guide Copy  30       Resolution Yes, 37 Yes No No, 42 NA, 127 NA16. In case of escalations, have you approached these forums? Escalation to Count forums Yes 14 No 77 NA 115 Escalation to forums Yes, 14 Yes No, 77 No NA, 115 NAAnkit Tripathi P1058  
  40. 40. Guide Copy  31      17. If given a choice, would you go for a product offering better service even thoughyou might want a different product? Better Service score over Count marginally better product Yes 125 No 81 Better Service over marginally better  product No, 81 Yes Yes, 125 No18. Do you believe that better service is provided by your car manufacturer forexpensive variants? Better Service to higher Count variants? Yes 140 No 66Ankit Tripathi P1058  
  41. 41. Guide Copy  32       Better Service to higher variants? No, 66 Yes No Yes, 1405.2 ANALYSIS USING SPSSHere, we try and find out if some relationship exists between two given variables1. Service Intimations and Desired appointment time Chi-Square Tests Asymp. Sig. (2- Value df sided) aPearson Chi-Square 10.792 3 .013Likelihood Ratio 13.733 3 .003Linear-by-Linear Association 3.035 1 .081N of Valid Cases 206a. 2 cells (25.0%) have expected count less than 5. The minimumexpected count is 3.50.Since the value of Pearson Chi-Square is less than 0.05, we reject the null Hypothesishence there is a strong co-relation between Service Intimations and providing thedesired appointment time2. Unpleasant Experience and its Resolution by ManagerAnkit Tripathi P1058  
  42. 42. Guide Copy  33       Correlations Unpleasant_Exp Reolution_by_M erience anager **Unpleasant_Experience Pearson Correlation 1 .730 Sig. (1-tailed) .000 N 206 206 **Reolution_by_Manager Pearson Correlation .730 1 Sig. (1-tailed) .000 N 206 206**. Correlation is significant at the 0.01 level (1-tailed).There is a strong positive correlation between the two variables.3. Unpleasant Experience and Approached Forum Correlations Unpleasant_Exp Approached_For erience um **Unpleasant_Experience Pearson Correlation 1 .304 Sig. (1-tailed) .000 N 206 206 **Approached_Forum Pearson Correlation .304 1 Sig. (1-tailed) .000 N 206 206**. Correlation is significant at the 0.01 level (1-tailed).There is a weak correlation between the two variables.Ankit Tripathi P1058  
  43. 43. Guide Copy  34      4. Timely Delivery and Providing better service to higher variants Correlations Timely_Delivery PartialityTimely_Delivery Pearson Correlation 1 -.013 Sig. (1-tailed) .424 N 206 206Partiality Pearson Correlation -.013 1 Sig. (1-tailed) .424 N 206 206Negative correlation between variables5. Cross Selling and Unpleasant experience Correlations Cross_Sell_Atte Unpleasant_Exp mpts erience *Cross_Sell_Attempts Pearson Correlation 1 .162 Sig. (1-tailed) .010 N 206 206 *Unpleasant_Experience Pearson Correlation .162 1 Sig. (1-tailed) .010 N 206 206*. Correlation is significant at the 0.05 level (1-tailed).Non significant positive co-relationAnkit Tripathi P1058  
  44. 44. Guide Copy  35      6. OBSERVATIONS  The mix of respondents was more in favour of Hatchback vehicles followed by Sedan, SUV and MUVtype of vehicles pointing to the fact that most respondents had cars in under 10lac range  A good mix of vehciular brands responses were obtained wherein as expected Maruti had the highest respondents followed by Hyundai, Honda and Tata Motors  When it came to regular intimations to customers on the pending service, a large chunk of 90 respondents ~45% said they did not get intimations  Whenever a customer wishes to make an appointment, in majority of cases the process is simple for him/her  Service Advisor’s knowledge in dealing with the customer has met with a mediocre response with almost 70% rating the expertise as average  In most of cases, the customers got the appointment slot that they desired  Customers seemed to be satisfied with the process of checking in the vehicle and completing formalities of leaving their vehicle at service center  Respondents have however complained that they were not updated constantly on the progess made on their vehicle  Majority of respondents having Maruti and Tata Motors seem highly satisfied with availability of spares  Punctual delivery of vehicle was being followed by majority of companies  For extra work involved the communication was on the poorer side with almost 42% respondents saying that they were not advised on it  Cross-selling other accessories seems to be a norm in most service centers  Almost 45% of respondents are unaware of Ministry of consumer affairs’ Forums  1/4th of respondents have had atleast one unpleasant experience at the service station  In half of the cases, the issue was resolved by the Manager  However, in others a very few actually went ahead to Consumer ForumsAnkit Tripathi P1058  
  45. 45. Guide Copy  36        A sizeable chunk (62%) of respondents say that they are ready to let go of a marginally superior product if they are offered better service in the other  Almost 70% of respondents feel cheated in the sense that they believe that customers having better variants, models are served better than those not having themAnkit Tripathi P1058  
  46. 46. Guide Copy  37      7. CONCLUSION  There is a larger population of consumers which prefer the hatchback variants for traffic ridden Mumbai for multiple reasons which include ease of travel, lower fuel consumption and more options to choose from  Maruti still has the stronghold on Indian market but is closely followed by Hyundai, Honda, Tata Motors etc  Majority of Car Manufacturers have seemed to have gotten the service delivery right and in most of cases have facilitated easy appointment and timely delivery  Communication is one lacuna that the car companies must focus on. Customers feel that they are kept in dark about progress being made on their car  Even though the Ministry of Consumer Affairs has involved itself in aggressive advertising, it still has not penetrated the car owners to full extent with a large chunk still unaware of existence of norms for Car manufacturers as well  The car owners choose to resolve the issue either with the center manager or ignore the same. They are reluctant to take it ahead and make the issue noticeable  Customers need assurance and the very fact that they are ready to let go of a marginally superior product in leiu of better service reiterates the same point  Differentition seems prevelant in minds of customer when it comes to servicingAnkit Tripathi P1058  
  47. 47. Guide Copy  38      8. RECOMMENDATIONS  Service Advisor’s knowledge in dealing with customer’s queries id dealt with some issues. The advisors must thus be adequately trained in technical as well as soft-skills domain to counter customer’s queries in a more appropriate manner  Communication is another aspect that needs improvement. The customer can be given a rough schedule which shows the approximate time it would take to perform particular activity. Constant EOD updates by means of an SMS would keep the customer interested in case the vehicle is kept at service center for more than a day  Car accessories are pushed to customers in a very aggressive manner. Even though it seems to be important as additional revenue for service center, a more subtle approach can be used by giving free samples and honest recommendations  A feedback/suggestion matrix should be prominently displayed on the reception to let the customer know that car companies value their opinion and they should write to superiors in case of any issues  There is a large class of audience who seeks better service. Car manufacturers must take a notice of this aspect. General Motors is already having such a scheme for their customers by providing three years of maintainence free service  Customers need to be reassured that all service is carried on first come first serve basis and in no way is a higher model given precedence over a lower variantAnkit Tripathi P1058  
  48. 48. Guide Copy  39      9. BIBLIOGRAPHY AND REFERENCES Books: 1) Marketing Research by Malhotra N.K. , fifth edition 2) Marketing Management by Philip Kotler Websites: 1.http://www.businessweek.com 2. http://www.financialexpress.com 3. http://www.business-standard.com/ 4. Ministry of Consumer Affairs http://fcamin.nic.in/ Magazines: 1) Autocar India 2) MotoringAnkit Tripathi P1058  
  49. 49. Guide Copy  40      10. ANNEXUREQuestionnaire1. What is your vehicle type?  Hatchback  SUV  Sedan  MUV2. Which brand of car you own?  Chevrolet  Fiat  Ford  Honda  Hyundai  Maruti  Mahindra  Nissan  Renault  Skoda  Tata Motors  Toyota  Volkswagen3. Do you receive regular intimations through calls/sms for "service due" for yourvehicle?  Yes  No4. The ease of contacting the service department to make an appointment.  Excellent  Good  Average  Poor5. The service advisors understanding of the work required when you booked theappointment.Ankit Tripathi P1058  
  50. 50. Guide Copy  41        Excellent  Good  Average  Poor6. The availability of an appointment to suit you.  Excellent  Good  Average  Poor7. The ease of checking in at service reception on the day you brought your motorhome infor service/repair  Excellent  Good  Average  Poor8. Communication during service/repairs to keep you updated on progress  Excellent  Good  Average  Poor9. Availability of Spares  Excellent  Good  Average  PoorAnkit Tripathi P1058  
  51. 51. Guide Copy  42      10. Was your vehicle ready for collection at the agreed time?  Yes  No11. If you were advised that further work was required at a later date were you were fullyinformed of the reasons why and either booked in for that work or advised that you wouldbe contacted when the necessary parts arrived in stock?  Yes  No12. Do the customer service executives try to cross-sell other car accessories?  Yes  No13. Are you aware of consumer forums by Ministry of Consumer Affairs?  Yes  No14. Have you ever had an unpleasant experience at the service center ?  Yes  No15. If yes, was it resolved by service center Manager?  Yes  No16. In case of escalations, have you approached these forums?  Yes  NoAnkit Tripathi P1058  
  52. 52. Guide Copy  43        Not Applicable17. If given a choice, would you go for a product offering better service even though youmight want a different product?  Yes  No18. Do you believe that better service is provided by your car manufacturer for expensivevariants?  Yes  NoAnkit Tripathi P1058  

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