TABLE OF CONTAINT

CHAPTER NO. CHAPTER 1. CHAPTER 2. CHAPTER 3. CHAPTER 4. CHAPTER 5. CHAPTER 6. CHAPTER 7. CHAPTER 8. CHAPTER 9. CHAPTER 10. CHAPTER 11. CHAPTER 12 CHAPTER 13.

CONTAINS

PAGE NO. 13

AFTER SALES SERVICE

VALUE - CHAIN ANALYSIS (PORTER)

3-10 10-13 13-14 14-18 18-21 21-24 25-27 27-28 29-47 48-50 51-52 53

KEY ELEMENTS OF AFTER-SALES SERVICE DIMENSIONAL ATTRIBUTES OF AFTER SALES SERVICE AFTER-SALES SERVICE NECESSITY AND EFFECTIVENESS AFTER SALES SERVICE STRATEGY CUSTOMER SERVICE DOS AND DON'TS CUSTOMER COMPLAINTS DIFFRENTIATION OF AFTER SALEES SERVICE IN FOREIGN AND IN INDIA CASE STUDY - MARUTI SUZUKI INDIA LIMITED INDUSTRY VISIT - GENERAL MOTORS INDIA CONCLUSION REFERRANCE

AFTER-SALES SERVICE

After-sales service, which is in after sell all kinds of services provided. From the sales promotion to see, after-sales service itself is also a marketing tool. Follow up the stage in tracking, sales people to take various forms of cooperation, through the after-sale service to steps to improve the enterprise prestige of products and expand the market share, improve work efficiency and benefit of selling. After-sales service, it is to point to the production enterprise, dealers, the product (or service) sales to consumers, to provide consumers after a series of service is the objective. In the fierce market competition today, with the increasing awareness of the consumers and the changes in the concept of consumption, consumers in purchasing products, not only pay attention to product entity itself, in the similar product quality and performance similar circumstances, more importance to product after-sales service. Therefore, the enterprise in the offer the good and cheap products at the same time, to offer consumers perfect after-sale service, has become a modern enterprise market a new focus of competition. China, have haier group for after-sales service, and sales to rise steadily case. Objectively speaking, the high quality post-sale service is the product of brand service economy, famous brand product post-sale service often better than hybrid product. Famous brand of the price of the product brand enterprise service center. Case of general prep above, on the one hand, the inferior brand based on the cost of product and quality, but also because of the famous brand product sales strategies have considered after-sales service costs. Definition After Sales Service is defined as Periodic or as-required maintenance or repair of equipment by its manufacturer or supplier, during and after a warranty period.

Customer Service End-user of many types of product, ranging from computer systems to domestic appliances, require customer support at some time assistance to help them gain maximum value from their purchase. In fact customer support entails all activities to ensure that a product is available for trouble-free use to consumers over its useful life span(Goffin 2001). The concept of customer service has been a generic term used by industry and academia to describe a set of activities in which a firm engages to win and keep customers. Simply
2

differentiation of customer service refers it to a variable that expands the image of a product and thereby offers the possibility of giving the firms product market acceptance, growth and the possibility of market dominance (Larissa, 1994)

In this prime role, customer service is viewed as an organized corporate philosophy consisting of a comprehensive and related set of activities. Specifically, customer service is not a generic abstraction, but rather a series of specific services prior to the transaction, during the transaction, and after the transaction. Firms offer specific service elements, such as timely deliveries, efficient telephone handling of orders and queries, accurate purchase statements, and users receive customer service not in some abstract sense, but as the availability of an item, after-sales service and back-up, competent technical representatives, demon-station of equipment or special product promotions. While there is broad agreement that these elements are commonly associated with customer service, the degree of importance attached to each respective service variesfrom industry to industry and company to company, depending on customer needs and the capability of the serviceproviding organization (Larissa 1994).

There are two aspects of customer support, which particularly deserve management attention. First, there is the need for customer support requirements to be fully considered at the design stage using what are called design for supportability techniques- in order to develop products, which are economical and easy to support. Second, the logistic of delivering customer support through suitable channels is key. Companies, which are good at both of these aspects have differentiated themselves from their competitor stand won significant market share.

According to Eppientte (1997), customer service has been emerging as a competitive weapon for business firms. He mentioned it is becoming harder and harder to compete on manufacturing excellence alone. Manufacturers who thrive will compete by bundling services with products.. Of course, use of customer service, as a form of competition does not apply only to manufacturers. With the economy becoming increasingly service based and new kinds of services being offered continually (Schmenner, 1986), the input of customer service may be even more dynamic for non-manufacturers. It is probably safe to say that, in one form or another, all businesses are concerned with customer service. As early as 1972, Levitt noted that everyone is involved in service and that the service sector ofthe economy includes
3

everything from banking and airlines to product-related services and the sales-related services offered by manufacturers and retailers. Obviously, customer service is a part of all facets of our economy and is especially important to the long-term survival of companies.

VALUE - CHAIN ANALYSIS (PORTER)

The importance of customer service will be more recognized when Micheal porter (1980) considers it as a parameter for his value chain analysis model that make margin for company. According to this analysis, which has shown below Figure, all the activities of the entity are mapped into a value arrow. The right side of the arrow represents total value created by the organization; in a competitive market, that is what customer are willing to pay, i.e. revenue. To create those values, costs are incurred; the difference between revenue and costs is the margin. To increase margin, the enterprise can, for example increase value for customer (primary activities). Generically, primary activities are inbound logistics, operations, outbound logistics, marketing and sales, and continuing service.

VALUE CHAIN ANALYSIS

Firm Infrastructure Human Resource Management Technology Development Procurement

M A R G I N

Inbound Logistics

Operation

Outbound Logistics

Marketing And Sales

Service

Jeniffer Potter (1994) also believes, service is valuable for reducing cost, which finally increases companys profit. She mentions: many high-performance companies consider service a vehicle for reducing costs for customers. While many organizations have streamlined operations or practiced some form of just-in-time production to reduce costs, relatively few companies look at one of their biggest cost-saving tools: their service providers. For years, the Japanese have been training bright, knowledgeable service they receive from customer every day.

After-sales service

The last few decades have seen a growing trend toward aggressive global competition, increased marketplace demands, and accelerated technological changes. These developments are forcing organizations to take closer look at their marketing channel strategy including addressing the issue of how to distribute their products and offer associated aftersales service support. Many value-conscious consumers are demanding that a companys products offer more value than its competitors products not only in its design and manufacturing, but also in product delivery and support. Increasingly, distribution and service support options available for a product are key determinations in consumers product purchase decision (Loomba, 1998).

Products sale and distribution issues typically involve specific mechanisms for pricing a product and distributing it to the end consumer. On the other hand, after-sales service support issues entail all activities undertaken by service support providers (manufacturers, retailers, and/or independent services) to ensure that a product is available for trouble-free use to consumers over its useful life span. Management experts and marketing channel analysts alike agree that distribution and after-sale service support functions do increasingly warrant significant attention because they make up for an integral part of the product package (Loomba, 1998).

Today competitive market caused that many company re-evaluate their strategy to be more differentiate from others. After- sales service is one of the elements, which help all firms in this matter. Many new breeds of high-tech companies are now discovering that they need to differentiate themselves from rivals in appealing to customers and that technology alone will not do it anymore. After-sales service support is being recognized as one of the
5

competitive differentiators for most firms, which now produce in the same low-cost regions of the world (Lele and Sheth, 1987).

Herve Mathe (1999) also emphasizes on after-sales service as a strong marketing tools, which help firms to be competitive in the market. He mentions; Service is proving to be a source of competitive advantage that enables firms to remain leaders in a highly competitive market or to create differentiation, which will enable a challenger to attack and overtake the leader. Therefore for using this advantages in a best way specially in a depressed or highly competitive market, the outcome of an inadequate balance between service function integration and separation brings about conflicting objectives between the different parties involved in the service chain: Marketing, Sales, R&D, Production, Supply, After sales, etc. This may lead to internal conflicts which progressively intensify, thus reducing the effectiveness, and profitability, of direct and indirect after sales support activities.

Pual (1993) believes an essential part of marketing strength is service support. When customers buy a product, they expect certain levels of post purchase support to go along with it. Defining those expectations is critical to marketing success and will be even more important when markets mature.

However, industry experts caution that too many companies mismanage the total cost of providing superior after-sales service support and so undo part of the competitive edge won via technology and pricing (Landau, 1995).

According to Goffin (1999 & 2001) Customer support, which is also referred to as product support, after-sales service, technical support, or simply service, is important for because it: Can be a major source of revenue, although it often receives too little management attention. Is essential for achieving customer satisfaction and good long-term relationship as identified by a number of researches.

 Can provide a competitive advantage. This is true in most high-tech industries but also in some low-tech sectors. As product differentiation becomes harder in many markets, companies are increasingly looking to customer support as a potential source of competitive advantage. A number of examples of how companies have own market share through good support can be found in the trade press. Play a role in increasing the success rate of new products. Needs to be fully evaluated during new product development, as good product design can make customer support more efficient and cost- effective.

Increased competition within many industries has led to increased attention on customer service. Various studies indicate that upset customers may have big effect on sales of company. Therefore, all firms try to put all their attention to keep their customers satisfied and fulfill their needs and wants as much as possible. One of the strong tools which help all companies in this matter is providing best after-sales service.

In this regard Tore (2003) stats; companies developing products and services need to understand what consequences and benefits product attributes have on customer needs and value, and how they affect customer expectation and satisfaction. Customer satisfaction is, in other words, not only decided by value and performance of hardware purchased, but by the total value received, and by the quality of the interaction and relationship experience throughout the service life of the product.

Service traditionally has been considered a post-sale capability, primarily focused on problem resolution or providing technical assistance. Now, these definitions are too limited. Customers whether internal or external consider service a collective, organizational responsibility rather than a functional or departmental one. As the relationships customers have with companies continue to widen, anyone who interacts with a customer is in a position either to jeopardize or to enhance that relationship. To ensure quality service, every person who interacts with customers in any way must have the appropriate skills to respond, efficiently and effectively, to customer needs (Jennifer Potter, 1994)

Providing good and reliable product, which is another main target of each company can be achieved by good after sales service. Avinder (1996) believes; increasingly, after sales customer service is becoming the order-winning criteria for most firms and is now being recognized as an important research priority. According to a major study conducted by the conference Board, the primary rationale of the manufacturers for offering after-sales service is the need to support their products. In fact after sales service adds the products value and is often treated as integral part of the product.

Proper after sales service helps companies in customer retention too. Many companies have begun to align entire organization to deliver excellent service, since they know their investment will pay off in terms of competitive advantage and customer retention. (Jennifer potter, 1994)

Customer long-term retention will really helps companies to be more competitive in the market and enable them to implement their entire marketing plan. The recent and ongoing changes in the business environment most notably escalating competition, increasing globalization of markets, and more demanding customers are making it difficult to compete effectively on the basis of traditional marketing mix variables alone. This reality is perhaps the primary impetus for the increasing attention that relationship marketing has been receiving from both practitioners and researchers. And, given that longterm customer retention is a key aim of relationship marketing, the focus is now shifting from merely to customers to serving them effectively. (Parasuraman, 1998)

After sales service is often in response to a customer problem, e.g. product failure restoration, problem diagnosis, expert assistance to resolve a problem, problem with using the product, etc. Therefore, after sales service is a recovery process that attempts to resolve a customer problem, which, if not resolved, causes dissatisfaction and less satisfied customer. The service function therefore attempts to recover the customer satisfaction to the level it was before the occurrences of problems (Gronroos, 2000).

Finally, see the main important effects of after-sales service in improvement of each firm by Paul (1993) classification, which expressed the four main important aspects of after sales service as follows:

 First, service is perceived as high-profit, high-growth opportunity. With profit margins for equipment sales under pressure from foreign and domestic competition, many U.S. firms target after-sales service as a key area for investment, a sharp contrast to its historical image as a backwater meriting little attention from top management. Second, managers are also beginning to realize that customers will buy more often and more quantities from a company they feel will support them and give maximum post sale satisfaction. After sale service, therefore, is an important aspect of a companys marketing mix to build loyalty and repeat business. The after market is a crucial ingredient for success in international marketing. Third, Companies are also realizing that technological and feature advantages are short lived. The rapid diffusion of technological change makes it increasingly difficult to maintain a competitive advantage based on product features or design. As a result, both customers and manufacturers focus on service as the key differentiator. Moreover, firms abilities to provide service support have increased significantly. Fourth, Customer expectations are increasing and buyers today are demanding ever-higher levels of service support. Customer expectations will create opportunities for innovative products that meet changing service support needs and will increase competitive pressures to continually improve product reliability and serviceability. They will make conventional service contracts and endangered species, force manufacturers to unbundled the prices of products and support services, and create a major profit squeeze in key segments of such information age industries as telecommunications, computers, and office automation.

In spite of all above advantages, which push distributors provide after-sales service there some other reasons that justify not relying on suppliers services only and having local after-sales service. According the Goffin (1999) an important aspect of customer support is the distribution channels used and whether companies have their own customer support organization, or use third parties. If customers are to be provided with good product support, companies need to select and effectively manage their distribution channels.

Manufacturing companies may have their own direct organization for customer support, or they may use alternative. The review of the trade and popular management press confirmed the importance of good distribution channels. In coordinating distribution channels through contractual arrangements; manufacturers must deal with retailers who compete not only in price, but also in important non-price factors such as in-store services, after sales support or faster check-out. Coordinating the price and non-price competition among retailers can be a difficult task as illustrated by the following example (Lyer, 1998).

KEY ELEMENTS OF AFTER-SALES SERVICE

Providing the proper after sales service is very important for firms and customers. Traditionally, support merely constituted maintenance, service and repair. However, as the scope of product support has broadened over the past decade, it has also included such aspects as installation, commissioning, training, maintenance and repair services, documentation, spare parts supply and logistics, product upgrading and medications, software, and warranty schemes, telephone support, etc. (Tore and Uday, 2003)

An after-sales support strategy associated with a product may include elements such as warranty provision, extended service contract provision, availability of repair service, loan availability, toll-free phone support, etc. (Arvinder, 1996)

Study on each of these elements and choosing the best one(s) is a crucial activity for all firms. According to Gulden (1997), after sale service consists of a number of dimensions or elements. It is conceptualized as consisting of the following: The installation and start-up of the purchase product The provision of spare parts for products The provision of repair services Technical advise regarding the product The provision and support of warranties

10

But Goffin (1999) explanation may be more complete, that states seven elements of after-sales support which must be provided to customers over the working lifetime of products as follows: Installation : For many products, the first element of product support following the sale is installation. This is usually performed for complex products (e.g. computer systems), or where safety issues are involved (e.g. medical devices) by personnel from the manufacturing company, or their representatives. Increasingly, where product design allows it, customers themselves will install their purchases and manufacturers face the challenge of making this easy for, often, non-technically minded customers. A good example of the importance of easy installation is that IBM recognized in 1990 that their personal computer customers wanted to be able to unpack their purchases and have them running quickly. This led to products with pre-installed software and which consequently could be unpacked, assembled, switched on and in use within five minutes (Haug, 1990).

User Training : The complexity of some types of equipment necessitates that

manufacturers provide good training for users. For example, hospital staff need to well-trained in the use of critical care devices and the successful implementation of process innovations, such as new manufacturing equipment, depends on extensive training being given over a long period. Many computer-based products include functions which help users learn to use them more efficiently; these can range from single Help functions, to full training packages as offered by manufacturers such as IBM. However, training costs can still be very high business users have to invest significant amounts of money in training their employees in efficient use of personal computers. For simpler products, training is not necessary and details of product operation are usually given in user documentation. Documentation : Most products have some form of documentation and industries such as medical electronics it playas key role. Typical forms of documentation cover equipment operation, installation, maintenance, and repair. Good documentation can lead to lower support costs and increased products is poorly written and hard to understand. New technology is being applied to documentation and, for example, CD-ROMs are making car servicing more efficient.

Maintenance and Repair: Historically, maintenance and repair has been an important

element of product support, which has required companies to invest significant resources. For
11

example, an estimated 500,000 car mechanics are employed in the USA. If equipment fails, fast and efficient repair is essential in many markets because down-time costs run typically at anywhere from 100 to 10,000 times the price of spare parts or service. In markets where product failure has strong implications for example, computer systems for financial institutions- companies need to offer either equipment, which is very reliable (or even never fails), or a rapid response to expedite repairs. One way to achieve a fast response is to provide customers with loaner equipment in the event of breakdowns, where this is feasible. Another strategy for maintenance and repair is to design disposable products; the approach used by some companies for watches, torches and other products. Where repair costs do not exceed a significant percentage of product replacement costs, having repairable products is the best strategy for companies. For repairable products, it makes sense for companies to develop good diagnostics- efficient means to test for problems and identify the causes. However, where products are becoming cheaper and more reliable, as is the case with Pcs, service is becoming less viable. In order to repair faulty equipment, companies need to have efficient logistics for the management and movement of spares, the parts used in repairs. Some companies have focused strongly on this area, to gain an advantage over their competitors. Maintenance also referred to as preventive maintenance is undertaken to clean, refurbish or replace parts of equipment which otherwise would be liable to fail. Mechanical parts, for example, normally require regular maintenance as in the case of cars. In the computer sector, where fewer mechanical parts are involved, remote support technology enables computers to be updateddiagnosed and repaired by linking them to manufacturers support centers via telephone lines. The US earth-moving equipment manufacturer Caterpillar, which focuses on product serviceability products that are easy to maintain and repair- is using similar approaches. This has led them to develop products, which can be remotely monitored so that maintenance can be performed before fault occurs. Online Support : Telephone advice on products is a major element of customer support in many industries. Product experts give online consulting to customers to help them use products more efficiently or, sometimes to trace the cause of fault (troubleshooting). Whenever problems can be solved over the telephone, costs are much lower than an engineer having to visit the customer site. Online support is particularly strongly utilized for software products (software support). For example, companies such as Microsoft have invested significant resources in telephone centers and support costs are typically 6 percent of revenues in the software industry. Many software products can now be remotely configured, so that they
12

more exactly match customer requirements for example, Microsofts Windows 95 product has this capability. Warranty : Manufacturers of most products offer warranty and, in some markets such as automobiles, manufacturers may try to gain a competitive advantage by offering longer warranty periods. Warranty reduces the financial risk of owning products and therefore it is an important element of customer support. Over the lifetime of product, support costs may be greater than the initial purchase price. In the computer sector these costs are referred to as cost-of-ownership and the costs of buying and operating computer hardware for the office is rather like an iceberg most of them are hidden. Consequently, as products have become more complex and support costs have increased, customers have started to demand more economical and effective support. To reduce the risk of expensive repairs, many manufacturers offer customers the possibility to purchase extended warranty. However, in the domestic appliance sector, manufacturers have been accused of charging excessively for this cover.

Upgrades : Offering customers the chance to enhance the performance of existing products can be an important aspect of support. For example, computer manufacturers offer upgrades because they increase the working lifetime of products and can be a significant source of revenue. Original equipment manufacturers have a competitive advantage in this business because they normally have records of where equipment has been sold which could benefit from upgrading.

DIMENSIONAL ATTRIBUTES OF AFTER SALES SERVICE

After selecting the after-sales service method it is important that company choose the right strategy for after-sales service too. Both of these elements are essential for any company to have the most effective and efficient after-service center. For implementing a top quality after sales service plan it is necessary to select the proper strategy too. The decision of how to distribute products and to after-sales service support such as warranty, service contract, repairs, etc. is linked to the overall strategy of the organization regarding its products and the markets it plans to serve (Arvinder ,1996)
13

According to Arvinder (1996), after study in various texts on marketing/ logistic/ distribution channels, the elements, that manager examine as they formulate their physical distribution and after-sales service support strategies can be grouped into various dimensional attributes. These include:

Product-related attributes such as its life cycle, complexity, value, physical dimensions, and consumer perceptions; Firm-related attributes such as managerial objectives, resources, desire for control, and breadth of product line; and Market- or industry- related attributes such as consumer preferences, and consumer vs. organizational customers, geography, market size, competition, and nature and availability of channel intermediaries.

AFTER-SALES SERVICE NECESSITY AND EFFECTIVENESS

After-sales service Advantages

According to Goffin (1999 and 2001) theory; competitive advantages, Creating customer satisfaction and long-term relationship, and having effective role in developing the new products are some of advantages of after-sales service, which persuade firms for providing such a service. Paul (1993) theory added some other benefits to above advantages like: making profit, speed up growth of company, build up customer loyalty, and making differentiation in terms of product and service. Customer retention is also one the more useful advantage of after-sales service, which introduced by Parsuraman (1998) theory.

14

After-sales service Advantages

- Competitive advantages - Customer satisfaction - Long-term customer relationship - New product success and development Goffin (1991 and 2000) Paul (1993) - High Profit - High Growth - Differentiation - Customer Loyalty - Customer retention Parsurman (1998)

There are some advantages for after sales service, which persuade distributors to provide these types of services in their organization. In this regard, I used all related factors, which introduced on three theories of Goffin (2000), Paul (1993), and Parsuman (1998). I eliminated all similar factors and extracted nine different after sales service advantages among these three theories, which will be compared with the gathered data here.

Competitive advantages

Goffin (2001) considered this factor as one of the biggest advantages of after-sales service. He believes many companies are looking for after sales service as a potential source of competitive advantage. He emphases on service support as an essential part of marketing strength. He said the customers expect certain levels of after sales service support when they buy the products. Fulfillment of these expectations is an important key to marketing success and will be even more important when markets get matured. Goffin (2001) also believes after sales service can provide competitive advantages for any firm and considers it as an important aspect of a companys marketing mix.

15

Customer Satisfaction

Another factor, which Goffin (2001) mentioned in his theory as an advantage of aftersales service, is customer satisfaction. He believes that achieving the customer satisfaction is one of the important issues for all companies and after sales service is a prerequisite for this achievement. In fact, customer satisfaction is, not only decided by value and performance of hardware purchased, but by the total value received, and by the quality of the interaction and relationship experience throughout the service life of the product.

Therefore customer satisfaction, definitely, were one of the after sales service result for any company and I can say data will prove the theory in this regard. Long-term customer relationship, customer retention and customer Loyalty

In both theories of Goffin (2001) and Parsumen (1998) stated that good after sales service creates long-term customer relationship with company and makes customer retention.

Parsuman (1998) says, if any company focuses on customer service effectively, defiantly is able to make customer retention and this will really helps company to be more compatible in the market and enable them to implement their entire marketing plan. Goffin (2001), also believes that after sales service is one of the reason that customer keep their relationship with company and prevent them to try other competitors similar products. Paul (1993), is also believes on after sales service as important aspect of a companys marketing mix to build loyalty and repeat business and considered it as a crucial ingredient for success in marketing for any firms. According to data, good after sales service has impressive effect on customers mind. It really makes a reliable and trustable relationship between customer and company for a long time, which totally is precious for companys future.

New Product Success and development

According to Paul (1993), customers are more demanding now a day and need higher level of service support. These expectations create opportunities for new innovative products that meet changing service support needs and will increase competitive pressures to
16

continually improve product reliability and serviceability. Actually service needs to be fully evaluated during new product development, as good product design can make customer support more efficient and cost effective.

High Profit

According to both Paul (1993) and Goffin (2001), after sales service considered as one of major sources for making profit for company. Paul (1993) mentioned; service is perceived as high-profit opportunity. With profit margins for equipment sales under pressure from foreign and domestic competition, many firms target after-sales service as a key area for investment, a sharp contrast to its historical image as a backwater meriting little attention from top management

Differentiation

Another issue that must be analyze, as an advantage of after sales service is differentiation. Paul (1993) believes that Companies are realizing that technological and feature advantages are short lived. The rapid diffusion of technological change makes it increasingly difficult to maintain a competitive advantage based on product features or design. As a result, both customers and manufacturers focus on service as the key differentiator. Moreover, firms abilities, to provide service support have increased significantly. In fact, service is proving to be a source of competitive advantages that enables firms to remain leaders in a highly competitive market and create differentiation, which will enable a challenger to attack and overtake the leaders.

Branding

Branding was another issue that Sarir International initiates it, as another important advantages of after sales service for itself, although it was not referred among the theories of this thesis. According to empirical data, Sarir international has successfully launched its inhouse brand SUZUKI, in the market from three years ago. Actually Suzuki is the first OEM brand, which has produced locally and easily competed with all other international computer brands in the market. The companys management team believes that after sales service had essential role in this regard
17

Customer loyalty Customer loyalty schemes are an effective way to improve your customer-retention levels. The high cost of bringing in new business compared to retaining existing clients is undisputed so increasing your customer retention can significantly boost bottom-line profits. And yet many firms are missing a trick when it comes to building customer loyalty. In a competitive marketplace where customers find it easy to switch supplier, loyalty schemes are an effective way to increase customer retention and improve your profitability. If you want to build a loyal clientele, keeping the customer satisfied isn't always enough. The fact that your customers are satisfied doesn't stop them from taking their business to a competitor who offers them something extra. To increase loyalty, you need to recognise and reward your best customers. A loyalty scheme can be used to incentivise and delight your most valued customers. That in turn can do wonders for your profitability. The advantages of loyalty schemes Loyalty initiatives allow you to focus on your best customers and improve customer satisfaction levels. Loyal customers buy more and are often willing to pay more, which boosts your cash flow. By increasing loyalty, you can increase profitability and extend the time they place their business with you. Loyal customers are also good for your business because they become your best advocates. They recommend you to others, saving you marketing costs. A loyal customer's endorsement is more powerful to their friends and family than any advertising campaign.

18

AFTER SALES SERVICE STRATEGY

After Advantages of after sales service I am going to analyze the empirical data and theory about after sales services strategy. According to the theory it was determined that without proper strategy, supplier cannot be able to have efficient after sales service. Three theories in this regards: Goffin (1999), Arvinder (1996), Milind (1997). In all these three theories, the researcher mentioned different factors and variables which have influence on company for selecting the after sales service strategy. In all these theories some variables and factors has explained which apparently are different but basically can be considered in three main following groups and help us to evaluate them more precisely with related theories: 1 - Product oriented factors :

In Arvinder (1996) theory, product related attributes has directly mentioned as a main factor, which has effect on selecting the after sales service strategy for a company. It means elements related to product like, life cycle, complexity, value, physical dimension must be considered when after sales service strategy is going to be defined. In this method Product related factors have main roles and other factors will be considered in second priority. The same idea has explained in Millind (1997) theory too. He named elements like increasing the product reliability, building the redundancy, and adopting a modular design as important product related attributes, which have influence when company wants to setup their after sales service strategy according to product characters. Meantime, Goffin (1999) added the design for supportability factor, which can be considered as, product related attribute to above elements. He believes product design strongly influences how easy it can be supported, so good design make the support procedure easier which company can consider it as one the main facts for setting up their after sales service strategy.

Example :Product related factors have direct influence on Sarir Internationals after sales strategy. According to empirical data, computer components, which are distributed by Sarir international, have vast varieties with their own individual specifications and nature. Some of them have long life cycle and some have short ones. Some of products are very complicated which need more maintenance and services and some are very simple without the necessity of maintenance. Meantime, computer technology is changing very fast so products are usually replaced with new models rapidly. These changes put the company under pressure for
19

providing services for these new items as well as the old ones. Besides this company has been always working on the best design and features because they believe these issues will affect on the rate of faulty items and finally helps the after sales service center.

2 - Market Oriented strategy :

According to Arvinder (1996) some firms may define their after sales service strategy based on the market situation and environment. In this case the issues like; Consumer preferences, consumers v. organizational customers, geography, market size, competition, and nature and availability of channels intermediaries may have influence on companies after sales service strategy.

Goffin (1999) also mentioned to choosing or managing distribution channels and promoting support for competitive advantage as two other market or industry related attributes, which have impact on selecting the after sales service strategy for a company. Meantime we can add customer risk reduction as another attribute, which introduced by Milind (1997) and effects on after sales service strategy too. He believes; for some companies reducing the customer risk through warranty and service contracts is principal and important target. So they will consider this factor as main influencer when they want to define the after sales service strategy for their companies.

According to data, market situation and attitudes have big role on after sales service strategy. It was the market pressure, which pushed distributors to establish their service center at first, and after that, it was the market that imposed them to select the types of services that they have to provide. Recognizing the quality was not easy task for customers unless they buy and test the part. So customers always had the risk of purchase, which prevented them to buy products comfortably this problem and offered the best after sales service package and tried to reduce this risk for customer and create trust and reliability about its products in customers.

3 - Firm related attribute : The third category is firm related strategy, which is defined according to the firm characters and attributes. According to Arvinder (1996), managerial objectives, resources, desire for control, and breadth of product line can be considered as some of this factors.
20

Usually, company will only notice to company internal situation and target in this case, and will define the strategy according to its firms related characters. Therefore, the management attitudes and their ideas has big role for defining the after sales service strategy in this case. Although this type of factors may have influence on some firms for defining the strategy but according to data they cannot be considered as main influencers on after sales service strategy. As it mentioned in empirical data, the external variables like market competition, customers desires and product related factors make serious pressure on the company for defining their strategy. Therefore the managements do not get the chance to present their individual concerns and controls while defining the strategy for after sales service. They have to follow the market environment, competitors, and products situation to Setup Companys strategy to fulfill the demands.

CUSTOMER SERVICE DOS AND DON'TS

-

DO ensure that management objectives are aligned with service promises to customers

On many occasions I see management objectives not being aligned to the commitments being made to the customers, which is further exaggerated when it comes to the customerfacing staff. For example, if your customer service proposition is all around quality, ensure quality is the primary objective of the staff not speed of providing the service, as this can drive the wrong behavior - eg provide a quick service, but with mistakes.
-

DO make sure departments talk to each other

Communication often breaks down between different teams/departments. Often teams do not realise the negative impact this has on their customers. It is crucial that customer-facing teams are briefed on promotions so that there can be agreement on how any queries relating to the promotion will be handled.

21

DO manage customer expectations effectively

How many times have you experienced a train or plane delay and the message is, we'll be departing in a few minutes, then it's a few more minutes and so on. Once customers have heard this a couple of times and are still waiting the frustrations and displeasure grows significantly. If the message to customers in the first instance was, there will be a 45-minute delay, they have certainty about what to expect. The challenge here is for the customer-facing staff who have to deliver these 'bad news' to be well trained and supported in delivering the message, as often they are only the messenger but end up having to manage disgruntled customers.
-

DO listen to frontline staff

As they are the people who listen to your customers daily, they will tell you what's working and what's not. All this can be extremely valuable in improving performance. At the same time, if you collect complaints and customer satisfaction data (and if you don't you should be) make sure you take action on the information. Reporting on the data alone will not achieve anything unless you use the data.
-

DO empower staff appropriately

Empower staff appropriately with clearly defined authorities and ensure clear escalation processes exist where the member of staff doesn't have authority. For example, I was recently staying in a hotel in London and shortly after having checked into my room, I discovered a mouse running around. Having called reception, once they got over the shock of it, they immediately found me another room. I went to reception to collect a new key and to start my complaint properly and they offered to deduct the cost of breakfast from my bill. The staff were doing what they thought was appropriate and operating within their powers of authority, but in the circumstances they did not appreciate the severity of the issue and I had to escalate the matter.

22

DON'T assume that an online customer experience will replace offline service

In an increasingly web-enabled world, customers are displaying an increased desire for completing sales and service over the web. I often find that whilst the online proposition is well thought through, designed and implemented effectively, similar attention is not given to the offline experience! It is critical that offline support is provided and should match the online experience - thereby providing a consistent and joined-up end-to-end customer experience which matches the brand and proposition. Do not assume that customers will never need offline support. This is not always as easy to do as perspectives often tend to be focused on specific elements of the service proposition, but in order to deliver a consistent and coherent message to the customer, organisations must take a step away from the business and map the end-to-end customer journey, taking time to consider all 'what if' scenarios. Customers who need to contact you eg. by phone or email and are then let down by the poor quality responses delivered by the offline support are more likely to take their business elsewhere.
-

DON'T oversell yourself to your customers

Often in promotional material organisations make aspirational statements about what customers can expect from them when it comes to service. Having built the customers' expectations up, the organisation then fails to meet these expectations, which leads to customer dissatisfaction. Be true about the service customers can expect, and then ensure internal objectives (from management to customer-facing staff), priorities, systems and processes are implemented in a way which will support the service delivery.
-

DON'T treat customers as transactions

In high volume based organisations and to keep operating costs to a minimum by optimising efficiency, organisations often end up treating customers as transactions. Recognise that customers needs, wants and expectations will vary so in the pursuit of efficiency it is still critical to allow for the human touch and not provide a one size fits all approach. If you do choose to operate a one size fits all approach ensure you manage their expectations as part of your proposition messages.

23

DON'T blame your customers for your poor service

How many call centres have you called only to receive a welcome message saying something like 'due to unexpected high volumes of calls there is currently a long queue'. What this message is actually saying it's the customers' fault for causing the delay as so many are calling! Actually the problem lies with the organisation and the root cause could be a number of things but often it will be due to a marketing promotional campaign that hasn't been fully thought through or the call centre resource planning has not been fully engaged in planning the promotional campaign. Contingency measures may also not have been put in place. Whatever the cause is, don't blame the customers - they are only responding to your marketing promotion.
-

DON'T hide behind the environment, systems or processes

I had poor service experiences with a car dealership whose brand promises are around quality and excellence. However, the service I experienced was repeatedly very poor and found that the main root causes were around badly designed processes and poor communication. I shared my experiences with the regional director and was able to quantify the financial impact for his business which ran into thousands. Despite this feedback, the director concluded that it would be ok when they moved to their new dealership site - as he felt the problem was their very old and poor quality building. They have now moved to the new site and having been back to test the experience, guess what, the service hasn't changed poor communication still exists, staff still moan about the systems to customers, the only difference is you have a more comfortable environment in which to experience the poor service. So do identify the root cause of the problem and don't just assume that changing the premises will fix everything. Unless you improve the processes, systems and manage/develop the people the same issues will still arise.

24

CUSTOMER COMPLAINTS

There are more ways to communicate with customers than ever. The internet, email and mobile phones are changing the way you can interact with customers. And yet it's poor communication that makes many business relationships break down. As a small business, it's up to you to initiate good communication. You can't rely on your customers to tell you what they think. Not everyone takes the trouble to complain, so many dissatisfied customers simply go elsewhere. Getting communication right involves thinking about how you interact with customers at every contact point. To communicate well you need to understand your customers and respond to their needs. Communication strategy The secret of good communication is to tailor your approach to the individual. One useful theory you can use is that your customer will have one of four temperament styles aggressive, passive, analytical and expressive. Each of these personality types approaches buying decisions in their own way. Look out for them and respond accordingly. The aggressive type is an extrovert who is controlling, practical and decisive. To get on their wavelength, avoid small talk and get straight down to business. Give them options so they feel they're staying in control. The expressive customer is also an extrovert but they are also more sociable and impulsive. They will respond to an enthusiastic presentation style and need time to talk. Go for the big picture and avoid too much detail if you want to win over an expressive customer.
25

The passive person is an introvert. They are friendly but can be totally indecisive. You cannot hurry this type of customer. They hate sales pressure and need assurance. The analytical customer is organised and critical. They are perfectionists who can suffer from 'paralysis under analysis'. Give them plenty of detail and proof to win them over. Body language and the art of conversation More than 70 per cent of our communication is perceived non-verbally - so when you meet and greet your customers, your body language sends signals that have a big impact. Using open body language is a good way to create a rapport. Stand up straight, smile, make eye contact and, when sitting, don't cross your arms or legs. Showing the palms of your hands indicates an honest approach. Another useful technique is to mirror your customer's body language. Many people copy gestures unconsciously anyway. It sends the message that you like and agree with the person you are talking to. Remember to listen. If you are a big talker, you may have to curb your natural tendency to interrupt or dominate the conversation. To develop a dialogue with your customer, ask open-ended questions and listen to the answers. It's worth using the same words and phrases your customer has used to show you are listening and to build rapport. How to improve your communication strategy Good communication is not just about responding when your customer walks in. You can actively plan a communication strategy that will ensure you build good customer relationships that reward you with more business. Customers like to be kept informed at all times. Make regular contact using a communication method most suited to each customer, whether phone, email, text, in person or via a newsletter. It's worth asking customers how they like to be contacted. Most people will have a particular preference - and may find other communication methods positively annoying. Keep the lines of communication open so you

26

can respond to your customers' changing requirements. As you build the relationship, you will strengthen the ties that bind and develop a loyal customer (and fan) base.

AFTER SALES SERVICE OF LEXUS (TOYOTA MOTOR CORPORATION) IN FOREIGN COUNTRIES

Lexus is the luxury vehicle division of Japanese automaker Toyota Motor Corporation. First introduced in 1989 in the United States, Lexus is now sold globally and has become Japan's largest-selling make of premium cars. The Lexus marque is marketed in over 70 countries and territories worldwide, and has ranked among the ten largest Japanese global brands in market value. Lexus is headquartered in Toyota City, Japan, with major operational centers in Brussels, Belgium, and Torrance, California, United States. Lexus originated from a clandestine flagship sedan project, code-named F1, which began in 1983 and culminated in the launch of the original Lexus LS in 1989. Subsequently, the division added sedan, coup, convertible, and SUV models. In 2005, a hybrid version of the RX crossover debuted, and additional hybrid models later joined the division's lineup. In 2007, Lexus launched its own F marque performance division with the debut of the IS F sport sedan, followed by the LFA supercar in 2009. After Sales service of Lexus Showroom of a Lexus dealership in Sapporo, Hokkaido, Japan Lexus has become known for efforts to project an upscale image, particularly with service provided after the sale. The waiting areas in service departments are replete with amenities, ranging from refreshment bars to indoor putting greens. Dealerships typically offer complimentary loaner cars or "courtesy cars" and free car washes, and some have added onsite cafes and designer boutiques. Service bays are lined with large picture windows for

27

owners to watch the servicing of their vehicle. In 2005, Lexus also began reserving parking lots at major sporting arenas, entertainment events, and shopping malls, with the only requirement for free entry being the ownership of a Lexus vehicle. An online owner publication, Lexus Magazine, features automotive and lifestyle articles and is published online monthly and on a mobile site. Since 2002, Lexus has scored consecutive top ratings in the Auto Express and 76,000respondent Top Gear customer satisfaction surveys in the UK. Lexus has also repeatedly topped the 79,000-respondent J.D. Power Customer Service Index and Luxury Institute, New York surveys in the U.S. As a result of service satisfaction levels, the marque has one of the highest customer loyalty rates in the industry. AFTER SALES SERVICE OF TATA MOTORS IN INDIA Tata Motors Limited is Indias largest automobile company, with revenues of 35,651.48 crore (US$7.23 billion) in 200708. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles in India with products in the compact, midsize car and utility vehicle segments. Tata vehicles are sold primarily in India, and over 4 million Tata vehicles have been produced domestically since the first Tata vehicle was assembled in 1954. The companys manufacturing base in India is spread across Jamshedpur (Jharkhand), Pune (Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand) and Dharwad (Karnataka). Following a strategic alliance with Fiat in 2005, Tata set up an industrial joint venture with Fiat Group Automobiles at Ranjangaon (Maharashtra) to produce both Fiat and Tata cars and Fiat powertrains. The company is establishing a new plant at Sanand (Gujarat). Tata's dealership, sales, service and spare parts network comprises over 3500 touch points. Tata Motors also distributes and markets Fiat branded cars in India. Sales & Service Network Tata Motors has more than 250 dealerships in more than 195 cities across 27 states and 4 Union Territories of India. It has the 3rd largest Sales and Service Network after Maruti Suzuki and Hyundai.

28

CASE STUDY

MARUTI UDYOG LIMITED Managing competition successfully

MARUTI SUZUKI Count On Us!!!

29

Maruti Suzuki India Limited

Type Traded as Industry Founded

Public BSE: 532500 NSE: MARUTI Automotive 1981(as Maruti Udyog Limited)

Headquarters New Delhi, India [1] Key people Products Revenue Shinzo Nakanishi, Managing Director and CEO Automobiles 37,522.4 crore (US$7.61 billion) (2010-11) [2] 2,288.6 crore (US$464.13 million) (2010-11) [2] 6,903[3] Suzuki Motor Corporation marutisuzuki.com

Net income Employees Parent Website

Maruti Suzuki India Limited (NSE: MARUTI, BSE: 532500) is a subsidiary company of Japanese automaker Suzuki Motor Corporation. It is India's largest passenger car company, accounting for over 45% of the domestic car market. The company offers a complete range of cars from entry level Maruti 800 and Alto, to hatchback Ritz, A-Star, Swift, Wagon-R, Estillo and sedans DZire, SX4, in the 'C' segment Maruti Eeco and Sports Utility vehicle Grand Vitara.[4] It was the first company in India to mass-produce and sell more than a million cars. It is largely credited for having brought in an automobile revolution to India. It is the market leader in India, and on 17 September 2007, Maruti Udyog Limited was renamed as Maruti Suzuki India Limited. The company's headquarters are located in New Delhi.[1]
30

Table of Contents

Sr no

Topic Name

Page No

Profile

32-33

Partner for joint venture

34

Joint venture related issue

35-36

Industrial Relations

37

Service Offered

38-45

Issues & Problems

45

Exports

45

31

Profile
The old logo of Maruti Suzuki India Limited. Later the logo of Suzuki Motor Corp. was also added to it 'To Munsiyari on a Maruti 800', Uttarakhand Himalayas Maruti Suzuki plant in Manesar Maruti Suzuki is India and Nepal's number one leading automobile manufacturer and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned. Until recently, 18.28% of the company was owned by the Indian government, and 54.2% by Suzuki of Japan. The BJP-led government held an initial public offering of 25% of the company in June 2003. As of 10 May 2007, the government of India sold its complete share to Indian financial institutions and no longer has any stake in Maruti Udyog.[citation needed] Maruti Udyog Limited (MUL) was established in February 1981, though the actual production commenced in 1983 with the Maruti 800, based on the Suzuki Alto kei car which at the time was the only modern car available in India, its only competitors- the Hindustan Ambassador and Premier Padmini were both around 25 years out of date at that point. Through 2004, Maruti Suzuki has produced over 5 Million vehicles. Maruti Suzukis are sold in India and various several other countries, depending upon export orders. Models similar to Maruti Suzukis (but not manufactured by Maruti Udyog) are sold by Suzuki Motor Corporation and manufactured in Pakistan and other South Asian countries.[citation needed] The company exports more than 50,000 cars annually and has an extremely large domestic market in India selling over 730,000 cars annually. Maruti 800, till 2004, was the India's largest selling compact car ever since it was launched in 1983. More than a million units of this car have been sold worldwide so far. Currently, Maruti Suzuki Alto tops the sales charts.[citation needed] Due to the large number of Maruti 800s sold in the Indian market, the term "Maruti" is commonly used to refer to this compact car model. Its manufacturing facilities are located at two facilities Gurgaon and Manesar south of Delhi. Maruti Suzukis Gurgaon facility has an installed capacity of 350,000 units per annum. The Manesar facilities, launched in February
32

2007 comprise a vehicle assembly plant with a capacity of 100,000 units per year and a Diesel Engine plant with an annual capacity of 100,000 engines and transmissions. Manesar and Gurgaon facilities have a combined capability to produce over 700,000 units annually. More than half the cars sold in India are Maruti Suzuki cars. The company is a subsidiary of Suzuki Motor Corporation, Japan, which owns 54.2 per cent of Maruti Suzuki. The rest is owned by public and financial institutions. It is listed on the Bombay Stock Exchange and National Stock Exchange in India.[citation needed] During 2007-08, Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. In all, over six million Maruti Suzuki cars are on Indian roads since the first car was rolled out on 14 December 1983. Maruti Suzuki offers 14 models, Maruti 800, Alto, WagonR, Estilo, Astar, Ritz, Swift, Swift DZire, SX4, Omni, Eeco, Gypsy, Grand Vitara, Kizashi. Swift, Swift DZire, A-star and SX4 are manufactured in Manesar, Grand Vitara and Kizashi are imported from Japan as completely built units(CBU), remaining all models are manufactured in Maruti Suzuki's Gurgaon Plant.[citation needed] Suzuki Motor Corporation, the parent company, is a global leader in mini and compact cars for three decades. Suzukis technical superiority lies in its ability to pack power and performance into a compact, lightweight engine that is clean and fuel efficient. Nearly 75,000 people are employed directly by Maruti Suzuki and its partners. It has been rated first in customer satisfaction among all car makers in India from 1999 to 2009 by J D Power Asia Pacific.

33

Partner for the joint venture

Sanjay Gandhi owned the Maruti Technical Services Limited, which ran into trouble and was liquidated. After the death of Sanjay Gandhi, the Indira Gandhi government assigned a delegation of Indian technocrats to hunt for a collaborator for the project. Initial rounds of discussion were held with the giants of the automobile industry in Japan including Toyota, Nissan and Honda. Suzuki Motor Corporation was at that time a small player in the four wheeler automobile sector and had major share in the two wheeler segment. Suzuki's bid was considered negligible.[citation needed] While the major companies were personally represented in the initial rounds of discussion, Osamu Suzuki, Chairman and CEO of the company ensured that he was present in all the rounds of discussion. Osamu in an article writes that it subtly massaged their (Indian delegation's) egos and also convinced them about the sincerity of Suzuki's bid. Suzuki in return received a lot of help from the government in such matters as import clearances for manufacturing equipment (against the wishes of the Indian machine tool industry then and its own socialistic ideology), land purchase at government prices for setting up the factory Gurgaon and reduced or removal of excise tariffs. This ensured that Suzuki conscientiously nursed Maruti Suzuki through its infancy to become one of its flagship ventures.[6]

34

Joint venture related issues

Maruti Suzuki's A-Star vehicle during its unveiling in Pragati Maidan, Delhi. A-Star, Suzuki's fifth global car model, was designed and is made only in India.[7] Maruti Suzuki is also Suzuki's leading research and development arm outside Japan Relationship between the Government of India, under the United Front (India) coalition and Suzuki Motor Corporation over the joint venture was a point of heated debate in the Indian media till Suzuki Motor Corporation gained the controlling stake. This highly profitable joint venture that had a near monopolistic trade in the Indian automobile market and the nature of the partnership built up till then was the underlying reason for most issues. The success of the joint venture led Suzuki to increase its equity from 26% to 40% in 1987, and further to 50% in 1992. In 1982 both the venture partners had entered into an agreement to nominate their candidate for the post of Managing Director and every Managing Director will have a tenure of five years[8] R.C. Bhargava was the initial managing director of the company since the inception of the joint venture. Till today he is regarded as instrumental for the success of Maruti Suzuki. Joining in 1982 he held several key positions in the company before heading the company as Managing Director. Currently he is on the Board of Directors.[9] After completing his five year tenure, Mr. Bhargava later assumed the office of Part-Time Chairman. The Government nominated Mr. S.S.L.N. Bhaskarudu as the Managing Director on 27 August 1997. Mr. Bhaskarudu had joined Maruti Suzuki in 1983 after spending 21 years in the Public sector undertaking Bharat Heavy Electricals Limited as General Manager. In 1987 he was promoted as Chief General Manager. In 1988 he was named Director, Productions and Projects. The next year (1989) he was named Director of Materials[clarification needed] and in 1993 he became Joint Managing Director.[citation needed] Suzuki Motor Corporation didn't attend the Annual General Meeting of the Board with the reason of it being called on a short notice.[10] Later Suzuki Motor Corporation went on record to state that Bhaskarudu was "incompetent" and wanted someone else. However, the Ministry of Industries, Government of India refuted the charges. Media stated from the Maruti Suzuki sources that Bhaskarudu was interested to indigenise most of components for the models
35

including gear boxes especially for Maruti 800. Suzuki also felt that Bhaskarudu was a proxy for the Government and would not let it increase its stake in the venture.[11] If Maruti Suzuki would have been able to indigenise gear boxes then Maruti Suzuki would have been able to manufacture all the models without the technical assistance from Suzuki. Till today the issue of localization of gear boxes is highlighted in the press.[12] The relations strained when Suzuki Motor Corporation moved to Delhi High Court to bring a stay order against Bhaskarudu's appointment. The issue was resolved in an out-of-court settlement and both the parties agreed that R S S L N Bhaskarudu would serve up to 31 December 1999, and from 1 January 2000, Jagdish Khattar, Executive Director of Maruti Udyog Limited would assume charges as the Managing Director.[13] Many politicians stated in parliament that the Suzuki Motor Corporation is unwilling to localize manufacturing and reduce imports. As of 2011 Gear boxes are still imported from Japan and are assembled at the Gurgaon facility.[citation needed]

36

Industrial relations
For most of its history, Maruti Udyog Limited had relatively few problems with its labour force. Its emphasis of a Japanese work culture and the modern manufacturing process, first instituted in Japan in the 1970s, was accepted by the workforce of the company without any difficulty. But with the change in management in 1997, when it became predominantly government controlled for a while, and the conflict between the United Front Government and Suzuki may have been the cause of unrest among employees. A major row broke out in September 2000 when employees of Maruti Udyog Ltd (MUL) went on an indefinite strike, demanding among other things, revision of the incentive scheme offered and implementation of a pension scheme.[citation needed] Employees struck work for six hours in October 2000, irked over the suspension of nine employees, going on a six-hour tools-down strike at its Gurgaon plant, demanding revision of the incentive-linked pay and threatened to fast to death if the suspended employees were not reinstated. About this time, the NDA government, following a disinvestments policy, proposed to sell part of its stake in Maruti Suzuki in a public offering. The Staff union opposed this sell-off plan on the grounds that the company will lose a major business advantage of being subsidised by the Government.[citation needed] The standoff with the management continued to December with a proposal by the management to end the two-month long agitation rejected with a demand for reinstatement of 92 dismissed workers, with four MUL employees going on a fast-unto-death. In December the company's shareholders met in New Delhi in an AGM that lasted 30 minutes. At the same time around 1500 plant workers from the MUL's Gurgaon facility were agitating outside the company's corporate office demanding commencement of production linked incentives, a better pension scheme and other benefits. The management has refused to pass on the benefits citing increased competition and lower margins.[14]

37

Services offered
Current sales of automobiles

Red Bull Maruti Suzuki Swift

Maruti Omni

India's Corps of Military Police personnel patrolling the Wagah border crossing in the Punjab in a Maruti Gypsy.

38

Maruti Alto

Maruti Suzuki Swift

Suzuki SX4

7th Generation Suzuki Alto is sold as Maruti Suzuki A-Star in India.

39

Maruti Suzuki Swift DZire

Suzuki Splash is sold as Maruti Suzuki Ritz in India. 1. 800 (Launched 1983) 2. Omni (Launched 1984) 3. Gypsy (launched 1985) 4. WagonR (Launched 1999) 5. Alto (Launched 2000) 6. Swift (Launched 2005) 7. Estilo (Launched 2009) 8. SX4 (Launched 2007) 9. Swift DZire (Launched 2008) 10. A-star (Launched 2008) 11. Ritz (Launched 2009) 12. Eeco (Launched 2010) 13. Alto K10 (Launched 2010) 14. Maruti Ertiga, seven seater MPV R3 designed and developed in India, will compete with Toyota Innova, Mahindra Xylo, and Tata Sumo Grande.[15]

40

Imported

Suzuki Grand Vitara 1. Grand Vitara (Launched 2007) 2. Kizashi (Launched 2011) Discontinued car models 1. 1000 (19901994) 2. Zen (19932006) 3. Esteem (19942008) 4. Baleno (19992007) 5. Zen Estilo (20062009) 6. Versa (20012010) 7. Grand Vitara XL7 (20032007)

Manufacturing facilities Maruti Suzuki has two state-of-the-art manufacturing facilities in India.[16] Both manufacturing facilities have a combined production capacity of 1,250,000 vehicles annually. Gurgaon Manufacturing Facility The Gurgaon Manufacturing Facility has three fully integrated manufacturing plants and is spread over 300 acres (1.2 km2). All three plants have an installed capacity of 350,000 vehicles annually but productivity improvements have enabled it to manufacture 700,000 vehicles annually. The Gurgaon facilities also manufacture 240,000 K-Series engines
41

annually. The entire facility is equipped with more than 150 robots, out of which 71 have been developed in-house. The Gurgaon Facilities manufactures the 800, Alto, WagonR, Estilo, Omni, Gypsy and Eeco. Manesar Manufacturing Facility The Manesar Manufacturing Plant was inaugurated in February 2007 and is spread over 600 acres (2.4 km2). Initially it had a production capacity of 100,000 vehicles annually but this was increased to 300,000 vehicles annually in October 2008. The production capacity was further increased by 250,000 vehicles taking total production capacity to 550,000 vehicles annually. The Manesar Plant produces the A-star, Swift, Swift DZire and SX4. Sales and service network As of 31 March 2011 Maruti Suzuki has 933 dealerships across 666 towns and cities in all states and union territories of India. It has 2,946 service stations (inclusive of dealer workshops and Maruti Authorised Service Stations) in 1,395 towns and cities throughout India.[17] It has 30 Express Service Stations on 30 National Highways across 1,314 cities in India. Service is a major revenue generator of the company. Most of the service stations are managed on franchise basis, where Maruti Suzuki trains the local staff. Other automobile companies have not been able to match this benchmark set by Maruti Suzuki. The Express Service stations help many stranded vehicles on the highways by sending across their repair man to the vehicle.[18] Maruti Insurance Launched in 2002 Maruti Suzuki provides vehicle insurance to its customers with the help of the National Insurance Company, Bajaj Allianz, New India Assurance and Royal Sundaram. The service was set up the company with the inception of two subsidiaries Maruti Insurance Distributors Services Pvt. Ltd and Maruti Insurance Brokers Pvt. Limited[19] This service started as a benefit or value addition to customers and was able to ramp up easily. By December 2005 they were able to sell more than two million insurance policies since its inception.[20]
42

Maruti Finance To promote its bottom line growth, Maruti Suzuki launched Maruti Finance in January 2002. Prior to the start of this service Maruti Suzuki had started two joint ventures Citicorp Maruti and Maruti Countrywide with Citi Group and GE Countrywide respectively to assist its client in securing loan.[21] Maruti Suzuki tied up with ABN Amro Bank, HDFC Bank, ICICI Limited, Kotak Mahindra, Standard Chartered Bank, and Sundaram to start this venture including its strategic partners in car finance. Again the company entered into a strategic partnership with SBI in March 2003[22] Since March 2003, Maruti has sold over 12,000 vehicles through SBI-Maruti Finance. SBI-Maruti Finance is currently available in 166 cities across India.[23] "Maruti Finance marks the coming together of the biggest players in the car finance business. They are the benchmarks in quality and efficiency. Combined with Maruti volumes and networked dealerships, this will enable Maruti Finance to offer superior service and competitive rates in the marketplace". Jagdish Khattar, Managing director of Maruti Udyog Limited in a press conference announcing the launch of Maruti Finance on 7 January 2002[21] Citicorp Maruti Finance Limited is a joint venture between Citicorp Finance India and Maruti Udyog Limited its primary business stated by the company is "hire-purchase financing of Maruti Suzuki vehicles". Citi Finance India Limited is a wholly owned subsidiary of Citibank Overseas Investment Corporation, Delaware, which in turn is a 100% wholly owned subsidiary of Citibank N.A. Citi Finance India Limited holds 74% of the stake and Maruti Suzuki holds the remaining 26%.[24] GE Capital, HDFC and Maruti Suzuki came together in 1995 to form Maruti Countrywide. Maruti claims that its finance program offers most competitive interest rates to its customers, which are lower by 0.25% to 0.5% from the market rates.[citation needed] Maruti TrueValue Main Article: Maruti True Value Maruti True service offered by Maruti Suzuki to its customers. It is a market place for used Maruti Suzuki Vehicles. One can buy, sell or exchange used Maruti Suzuki vehicles with the
43

help of this service in India. As of 31 March 2010 there are 341 Maruti True Value outlets.[citation needed] N2N Fleet Management N2N is the short form of End to End Fleet Management and provides lease and fleet management solution to corporates. Clients who have signed up of this service include Gas Authority of India Ltd, DuPont, Reckitt Benckiser, Sona Steering, Doordarshan, Singer India, National Stock Exchange and Transworld. This fleet management service include end-to-end solutions across the vehicle's life, which includes Leasing, Maintenance, Convenience services and Remarketing.[25] Accessories Many of the auto component companies other than Maruti Suzuki started to offer components and accessories that were compatible. This caused a serious threat and loss of revenue to Maruti Suzuki. Maruti Suzuki started a new initiative under the brand name Maruti Genuine Accessories to offer accessories like alloy wheels, body cover, carpets, door visors, fog lamps, stereo systems, seat covers and other car care products. These products are sold through dealer outlets and authorized service stations throughout India.[26] Maruti Driving School

A Maruti Driving School in Chennai As part of its corporate social responsibility Maruti Suzuki launched the Maruti Driving School in Delhi. Later the services were extended to other cities of India as well. These schools are modelled on international standards, where learners go through classroom and practical sessions. Many international practices like road behaviour and attitudes are also

44

taught in these schools. Before driving actual vehicles participants are trained on simulators.[27] "We are very concerned about mounting deaths on Indian roads. These can be brought down if government, industry and the voluntary sector work together in an integrated manner. But we felt that Maruti should first do something in this regard and hence this initiative of Maruti Driving Schools."[citation needed] Jagdish Khattar, at the launch ceremony of Maruti Driving School, Bangalore

Issues and problems

On 24 February 2010, Maruti Suzuki India announced recalling of 100,000 A-Star hatchbacks to fix a fuel leakage problem. the company will replace the gaskets for all 100,000 A-Star cars.

Exports
Maruti Exports Limited is the subsidiary of Maruti Suzuki with its major focus on exports and it does not operate in the domestic Indian market. The first commercial consignment of 480 cars were sent to Hungary. By sending a consignment of 571 cars to the same country Maruti Suzuki crossed the benchmark of 300,000 cars. Since its inception export was one of the aspects government was keen to encourage.[citation needed] Every political party expected Maruti Suzuki to earn foreign currency. Angola, Benin, Djibouti, Ethiopia, Europe, Kenya, Morocco, Nepal, Sri Lanka, Uganda, Chile, Guatemala, Costa Rica and El Salvador are some of the markets served by Maruti Exports

45

AFTER SALES SERVICE OF MARUTI SUZUKI INDIA LIMITED

The countrys largest car manufacturer, Maruti Suzuki India (MSIL), has initiated its largest service network expansion drive this financial year since its inception. In the course of the year, it intends to add 200 outlets to cater to demand across sectors.

After-sales service availability is a critical deciding factor while choosing a car. We intend to be within 25 km of customers by the end of the current financial year, informed Pankaj Narula, executive officer (service), MSIL.

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 per cent of these have been covered under their rule of a service station every 25 km. As of date, the average distance to the closest MSIL service station in the remaining areas is 35 km. No company can fight competition on price. You need to have the right product, distribution and service network to grow, said Arvind Saxena, director and board member (marketing and sales), Hyundai Motor India (HMIL). To this end, HMIL has firmed up plans to open 130 additional facilities to service customers in 2011. This would increase the number of service points for Hyundai cars to 757.

Toyota, set to foray into the intensely competitive small car segment with the Liva in April next year, is working on doubling its sales and service centres by the end of this year. Sandeep Singh, deputy managing director (marketing), Toyota Kirloskar Motor, said: Wordof-mouth publicity plays an important part in selling vehicles in the country, which depends on customer experience of the products and facilities we offer. Toyota products are known

46

for their quality; cost of ownership is low. We intend to double sales in 2011, and to service the 150,000 cars we hope to sell, we are rapidly expanding our after-sales facilities.

TKM had 97 sales and service centres last year, which would increase to 150 by the end of this year. Of this, 135 centres would have workshops for maintenance activities. Among others, Toyota has developed a new dealership management system, which would enable the company to maintain a database for all its customers across the country. When a customer approaches any Toyota dealership for maintenance, his record would already be available with us. We would be able to offer quality service within the shortest time possible. Along with the Etios, we have also introduced an Express Maintenance' service, in which we give customers an assured delivery within 60 minutes. This is a unique initiative taken by us to take care of our growing customer base, said Singh. After Sales Service:- Kya yahan Maruti Service Station hai

Availibility of service stations even in the remotest place in the

country.

Display

If you visit any of the Maruti Dealers showroom what you will notice is

one thing very similar, that is the display. They display only 2-3 cars

in the showroom. Well this is the strategy to make people concentrate

on only few choices otherwise they might get distract and get

confused. Here Maruti wins one customer.

47

Tie up with many banks

To promote its bottom line growth, Maruti launched Maruti Finance in

Jan 02. Prior to the start of this service Maruti had started two joint ventures

Citicorp Maruti and Maruti countrywide with Citi Group and GE

Countrywide

respectively to assist its client in securing loan.

Today Maruti has tie ups with ABN Amro Bank, HDFC Bank, ICICI

Ltd, Kotak Mahindra Bank, Standard Chartered Bank etc.

Exchange offers

Maruti has also placed its step and progress by marketing through

Exchange offers

Maruti has also placed its step and progress by marketing through

exchange offers. In this it makes possible to leave and get it replaced

for a new one with barely some amount. This is one of the greatest

ways to attract more and more customers and also makes possible to

48

increase sales.

SBI Maruti Car Loans The countrys largest bank and the largest car maker have joined

hands to make affordable car finance available to more and more

people across the country. The mega alliance makes car loans

available at lower interest rates to a wider section of people, with

transparent terms and conditions.

The unbeatable advantages of SBI Maruti car loans:-

-Two market leaders in their respective industries with trusted brand

names.

-Low interest rates

-No processing fees or hidden costs to ensure transparency.

-Car loans available for diverse categories of customers including

govt. employees and agriculturist.

49

Based on your experience of using SANY products and impression on the other competitors, please choose with your first reaction. Satisfied Quality 1 General impression on the brands. 5 4 3 2 1 CATERPILLAR KOMATSU OTHERS 2 Dissatisfied Brand and

Satisfaction degree of products quality. 5 4 3 2 1 CATERPILLAR KOMATSU OTHERS 3

Products capabilities to satisfy working demand. 5 4 3 2 1 CATERPILLAR KOMATSU OTHERS

4 Maintainability of products. 5 4 3 2 1 CATERPILLAR KOMATSU OTHERS 5

Satisfaction degree of products' fuel consumption. 5 4 3 2 1 CATERPILLAR KOMATSU OTHERS

6 Satisfaction degree of price-performance ratio. 5 4 3 2 1 CATERPILLAR KOMATSU OTHERS

After-sales service 7 Satisfaction degree of after-sale service. 5 4 3 2 1 CATERPILLAR KOMATSU OTHERS

8 Satisfaction degree of local service staff. 5 4 3 2 1 CATERPILLAR KOMATSU OTHERS

9 The company's reaction speed after receiving trouble calls. 5 4 3 2 1 CATERPILLAR KOMATSU
50

OTHERS parts supply. 5 4 3 2 1 KOMATSU OTHERS

10 The company's capability in spare CATERPILLAR 11 Localization degree of CATERPILLAR Please answer the

reference materials. 5 4 3 2 1 KOMATSU OTHERS

following questions. Yes No 12 Do you need product repurchase service? you willing to pay for extra service after the warranty period? aspect(s) do you think we need improvement? Material have Product appearance any other Quality Service Others to

13 Are In which Spare parts Do you SANY?

Manuverability suggestions

51

INDUSTRY VISIT

GENERAL MOTORS INDIA

B-305, Mathura Complex 1, B.P. Road, Bhayandar (East), Thane. M : +91-9820533489.

General Motors India, aiming to treble sales in India by 2013 on the back of the six new models it has slated for launch, starting December 2011, is expanding the number of service facilities by 50 per cent to 300 by March 2011. P Balendran, director and vicepresident, corporate affairs, said: On the back of growing income in the agricultural sector, we have seen growing demand for the Beat and Spark in rural areas. We are adding service centres in tier-II and tier-III cities.

GM is offering three-year free maintenance for its small cars, the Chevrolet Beat, Spark and Aveo UVA, a first in the industry. We are looking at extending the scheme across other products as well, said Balendran. Besides, the company is offering a three-hour assured delivery scheme for servicing cars. A spokesperson for Tata Motors concurred, We are well covered in the metros. We are expanding our after-sales network in tier-II and tier-III cities on the back of increasing demand. It has 800 service points for passenger vehicles across 500 cities and towns.

52

KEY SUCCESS FACTORS

(1)The Quality Advantage Maruti Suzuki owners experience fewer problems with their vehicles than any other car manufacturer in India (J.D. Power IQS Study 2004). The Alto was chosen No.1 in the premium compact car segment and the Esteem in the entry level mid - size car segment across 9 parameters.

(2) A Buying Experience Like No Other Maruti Suzuki has a sales network of 307 state-of -the-art showrooms across 189 cities, with a workforce of over 6000 trained sales personnel to guide MUL customers in finding the right car.

(3) Quality Service Across 1036 Cities In the J.D. Power CSI Study 2004, Maruti Suzuki scored the highest across all 7 parameters: least problems experienced with vehicle serviced, highest service quality, best inservice experience, best service delivery, best service advisor experience, most user-friendly service and best service initiation experience. 92% of Maruti Suzuki owners feel that work gets done right the first time during service. The J.D. Power CSI study 2004 also reveals that 97% of Maruti Suzuki owners would probably recommend the same make of vehicle, while 90% owners would probably repurchase the

53

same make of vehicle. (4) One Stop Shop At Maruti Suzuki, customers will find all car related needs met under one roof. Whether it is easy finance, insurance, fleet management services, exchange- Maruti Suzuki is set to provide a single-window solution for all car related needs.

(5) The Low Cost Maintenance Advantage The acquisition cost is unfortunately not the only cost customers face when buying a car. Although a car may be affordable to buy, it may not necessarily be affordable to maintain, as some of its regularly used spare parts may be priced quite steeply. Not so in the case of a Maruti Suzuki. It is in the economy segment that the affordability of spares is most competitive, and it is here where Maruti Suzuki shines.

(6) Lowest Cost of Ownership The highest satisfaction ratings with regard to cost of ownership among all models are all Maruti Suzuki vehicles: Zen, Wagon R, Esteem, Maruti 800, Alto and Omni.

(7) Technological Advantage It has introduced the superior 16x4 Hypertech engines across the entire Maruti Suzuki range. This new technology harnesses the power of a brainy 16-bit computer to a fuelefficient 4-valve engine to create optimum engine delivery. This means every Maruti Suzuki

54

owner gets the ideal combination of power and performance from his car.

CONCLUSION
Maruti has always been identified as a traditional carmaker producing value-formoney cars and right now the biggest hurdle Maruti is facing is to shed this image. Maruti wants to change it for a more aggressive image. Maruti Baleno has failed due to one of the major reasons being that customers could not identify Maruti with a car as sophisticated as Maruti Baleno. Maruti is looking forward to bring about a perception change about the company and its cars. Maruti started the exercise with the new-look Zen, and Suzuki's decision to pick India as one of the first markets for this radically different-looking car gave this endeavor a new thrust. Maruti has also changed its logo at the front grill. It has replaced the traditional Maruti logo on grill stylish M with S. The major thrust in the facelift endeavour is with the launch of 1.3 litre Swift. Its a style statement from Maruti to Indian market.

The next threat Maruti faces is the growing competition in compact cars. Companies like Toyota, Ford, Honda and Fiat are planning to come out with small segment cars in near future.Ford is launching Focus and Fiesta, GM is launching Aveo in 2006, Chevrolet is launching Spark in 2006, Hyundai is launching its new compact car in 2006, Honda is launching Jazz in 2006, GM is has reduced prices of its Corsa, Fiat is coming up with Panda and new Fiat Palio, Skoda is launching Fabia. All this will pose a major threat to Maruti leadership in compact cars.

55

New emission norms like Bharat Stage 3 which has come into effect from April 2005 has increased car prices by Rs.20000 and Bharat Stage 4 which is coming into force in 2007 will contribute in increasing car prices further. This could be of concern to Maruti which is low cost provider of passenger cars.

Rise in petrol prices and growing popularity of other substitute fuels like CNG will be another threat to Maruti. There is also a threat to Suzuki from R&D investment by Toyota and Honda in Hybrid cars. Hybrid cars could run on both petrol and gaseous fuels.

There is a threat to Maruti models ageing. Maruti models like Maruti 800 which is in market for the last twenty years and others like Zen and Esteem which have also entered the decline phase are the other threats. Maruti is planning phasing out Zen in 2007 and there were rumors of phasing out Maruti 800 also. This all makes Suzuki to replace these brands with new launches . As Swift and Wagon R are replacing the Zen market. Maruti will have to keep on making modifications in its present models or its models will face extinction.

56

List of References
-

Aaker, D.A., & day, G.S. (1990) Marketing Research, 4 ed. Newyork: Wiley cop. Marketing Management, Phillip Kotler, (13th Edition) Times of India, News Paper Levitt, Theodore. After the sale is over, Harvard Business review 16 (1983): 8793.

Parasuraman A., Customer service in business-to business markets: an agenda for research, Journal of business & Industrial marketing, volume 13 number 4/5, 1998 pp. 309-321

Gronroos, C.(2000), Service Management and Marketing: A Customer Relationship Management Approach, 2 ed., Wiley, Chichester

Websites

:- www.marutisuzuki.com :- www.wikipedia.com :- www.economist.com :- www.indiainfo.com

57