Using Services Marketing to Develop and Deliver Integrated Solutions at Caterpillar in Latin America

Case Study Assignment: Using Services Marketing to Develop and deliver Integrated solutions at Caterpillar .

CASE STUDY ASSIGNMENT Using Services Marketing to Develop and Deliver Integrated Solutions at Caterpillar in Latin America

Group  ! Harish Deepak Shiv Shankar Mahto Kirity Kumar

IIM RACHI

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Case Study Assignment: Using Services Marketing to Develop and deliver Integrated solutions at Caterpillar

"#at else do $ou need to learn in t#e Listening Gap %Gap &' a(out customer needs and e)pectations* LACD #ad general in+ormation +rom t#e customer value surve$s, (ut t#is in+ormation did not tell t#em -#at service +eatures customers e)pected in t#e CSAs. "#at -ere t#e$ and #o- could t#e$ /nd out* In particular, #o- could t#e$ /nd out -#at t#e$ needed to kno- to esta(lis#ed standards in t#e Design and Standards Gap %Gap !'* ot kno"ing "hat customers e#pect is one o$ the root causes o$ not delivering to customer e#pectations% Hence it is really important to learn and understand customer e#pectations and gap &et"een Company perceptions ' customer e#pectations% (e need to learn a&out the •

)eatures o$ service "hich are important to customers

•

(hat level o$ these $eatures customer e#pect

•

(hat customers think the company can and should do "hen pro&lems occur in service delivery

)rom the case* "e came to kno" some o$ general attri&utes o$ CSA and their respective importance "ith respect to customers+ e#pectations% ,ut it is not clear •

•

(hat aspect o$ responsiveness is the customer really looking $or Customer may ask $or Caterpillar maintenance person "ithin an hour &ut does he "illing to pay $or the same

,est practices should al"ays &e adopted and &road &ase throughout any company% -he case says that there are $e" customers at some dealers* "ho are truly satis.ed and loyal% -his is the reason that CSA rene"al is much higher at these customers% Moreover* the dealers have also higher share o$ /


"allet in these customers% So instead o$ running the pro0ect at entire customer &ase it shall &e &etter to run the pro0ect at this selected customers "ho may represent a particular segment such as construction or may &e $rom di1erent segment 2such as mining* construction* Agriculture3% -hese $eatures and e#pectations and service design and standards can &e $ound out through $ollo"ing: a% )irst o$ all do a proper segmentation o$ these customer &ase &% Create dialogue "ith these customers 2segment "ise3 through dinner meetings or get4together: As people used to share lot o$ in$ormation during dinner and drinks ta&le c% ,y organi5ing hotel seminars* meeting at various social gatherings : Dealer persons* Regional Sales Manager can conduct seminar "here people $rom dealer together "ith contact points o$ customer shall &e invited to have $ace to $ace interaction "hich later lead to $riendship and e6cient 7o" o$ in$ormation d% Developing personal relationship : 8enerally people disclose and con.de "hen they trust the other person ,ased on .ndings $rom these meetings some &rie$ guidelines such as $eatures o$ service* standards and service scape e#pectations can &e $ramed as $ollo"s: !%

0esponsiveness : o

o

/%

)ast action on receipt o$ complaint9,reakdo"n Machine Immediate availa&ility o$ reuired spare parts ' maintenance personnel

o

Standards may &e "ithin ; days m9c ready to resume "ork

o

Attending o$ pro&lem &y CA- 9 Dealer person "ithin /< hrs

0elia(ilit$ : o

Can per$orm right 0o& at the .rst time itsel$

o

=#cellent uality o$ >roduct

o

-rust"orthy personnel "ho are a&le to do 0o& as reuired ;

Case Study Assignment: Using Services Marketing to Develop and deliver Integrated solutions at Caterpillar o

;%

<%

?%

o

Service availa&le "hen needed

Assurance: o

M9C ready on time as promised

o

>er$orms only necessary "ork

o

Correct and genuine parts &eing used during maintenance

0elations#ip : o

Courteous and $riendly service

o

=#change o$ in$ormation $reuently

Tangi(les : o

Response in mail

o

)liers ' &rochures

o

>roper documentation o$ 0o& per$ormed "ith spares used

Demonstration li$e calculation sheets o$ spare parts o$ euipment such as >umps* Compressors* @alves* seals* actuators etc% -hese standards and $eatures may put in hierarchy manner &ased on Importance $or customer and "illingness to pay $or cost and can &e considered as actiona&le points% ,ased on the outcome* the entire &lueprint ' service scape need to de&ated and &rainstormed among all stake holders &e$ore implementation% -his type o$ market research e#ercise needs to &e repeated every ;9? years to make the service scape in demand as per market dynamics%

S#ould t#e$ o1er di1erent CSAs to t#e di1erent segments o+ general construction* "#at -ould t#at impl$ +or researc#, standards, and implementation* Di1erent segments may have di1erent needs and &uying po"er% Customer service agreement CSA should &e aligned to their needs* reuirement and <


spending pocket% CSA should provide value to customer as "ell as earn pro.ta&ility $or the company% Hence CA- should o1er di1erent CSA to the di1erent segments o$ customers% )rom the case "e $ound out: •

=uipment are used in various segments

•

Some customers &uy euipment together "ith service agreement

•

Service agreement takes care regarding re$ur&ishment o$ euipment and maintaining the uptime and productivity

•

It also emphasis on having euipment $or !B o$ the time

•

Customer pay $or CSA and repair services to achieve these goals

•

•

•

•

•

•

Customer "ho &uy comple# and sophisticated euipment such as ong "all* Continuous miners and construction euipment "ould like to go ahead "ith CSA Customer "ho &uy general euipment "ould like to carry maintenance &y their o"n -hese customers do not value $or uptime and productivity too much -here are some customers "ho operate internationally "hereas CAhas regional dealers* these customers reuire or need a single contact point regarding CSAs% Moreover* customer "ant to have a single stop service agency "hich can service their entire 7eet o$ euipment "hether &e CA-* Komatsu* @olvo* etc% Some customer also &uy "ill .t component on the &asis o$ lo"er cost and ready to compromise on uality Some customers have old and traditional 7eet o$ euipment "hich can &e serviced through normal and general tools and techniues and hence go $or local "orkshop

-hese .ve principles need to &e adopted during research o$ service

User- centered : Services should be experienced and designed through the customer’s eyes

?


Co-creative: All stakeholders should be included in the service design process Sequencing: A service should be visualized as a sequence of interrelated actions Evidencing: Intangible services should be visualized in terms of physical artifacts Holistic:

The entire environment of a service should be considered

Moreover the a&ove in$ormation suggest that research should imply $or a% (hat are di1erent type o$ customer in general construction industries &% Ho" can they &e su& segmented $urther &ased on their needs and reuirements

GENE0AL C2NST0UCTI2N

3alue uptime 4 productivit$ -illing to pa$ Sop#isticated e5uipment

Lo- cost segment 2ld 4 traditional e5uipment

Do it ourselves6 $ourselves General e5uipment

c% Inv olve key Front line people catering to larger accounts and customer contact persons in ne service development aligned ith !A" vision# mission statement and groth plan i%

(hat type o$ service they reuire "ith the product

ii%

Do they 0ust reuire service o$ oil and .lter checking at reuired time interval or detailed service "henever needed

iii%

Do they really give importance to uptime and productivity o$ machine

iv%

Are they "illing to pay $or the service

d% -hese shall help in framing of Service product portfolio $ organization structure implementing ne" service development

277E0INGS

MA08ET CU00ENT

NE" CUST2ME0S 


CUST2ME0S MARKET PENETRATION Increase share of allet •

•

•

E9ISTING SE03ICES

SERVICE DEVEOPMENT !ustomers using ill &t spares $ general services !ustomer going for • local orkshop !ustomer ho do not • value uptime $ productivity !ustomer having lo • budget !ustomer having old • $ traditional equipment •

NE" SE03ICES

MARKET DEVEOPMENT !ustomers going to %rd party service providers International !ustomers ho require single contact point irrespective of geography DIVERSI!ICATION Start providing • consulting business 'rovide guidance ho a • pro(ect can be developed e)ciently and quickly

e% ,ased on the a&ove ta&le* research* &rain storming need to &e conducted to generate a ne idea to cater to the needs o$ all segments* e#pansion o$ e#isting services "ith modi.cation and development o$ ne" service model as "ell as pro&a&le "ays to go diversi.cation $% ,ased on the same Idea generated* it shall &e regarded a good .t then service concept need to &e developed considering the point that "hat concept is and "hat customer need it is .lling through multiple iterations and discussion% (ith proper concept de.nition* a description o$ service that represents speci.c characteristics need to &e prepared g% -hese service concept need to &e discussed "ith pro&a&le customers and $ront end employees $or their response "ith clear rationale h% Assuming service concept is &een evaluated &y customers and employees then "e need to decide regarding economic $easi&ility and potential pro.t implications% Demand analysis* operation $easi&ility* revenue pro0ections and cost analyses are assessed at this stage% Concept need to pass pro.ta&ility and $easi&ility screening

E


i% Fnce it passes all these hurdles it is ready $or implementation% o" a prototype service product needs to &e created and tested $or customer acceptance% All stakeholders need to &e involved so that the service concept can &e re.ned to the point at "hich a detailed service &lueprint illustrating customer e#perience and the implementation plan $or the service can &e produced 0% o" this tangi&le product can &e test marketed in a limited num&er o$ trading areas to determine marketplace acceptance o$ the product as "ell as other marketing mi# varia&les such as promotion* pricing and distri&ution systems% k% A$ter this commerciali5ation o$ service need to go live and to &e introduced to the entire marketplace "ith t"o o&0ectives% )irst is to &uild and maintain acceptance o$ the ne" services among large no% o$ service delivery personnel* "ho shall &e responsi&le $rom no" on"ards% -his task &ecomes easy "hen they have involved one key service delivery personnel during service design and development stage% Second is to monitor al aspect o$ service during introduction and through the complete service cycle% l% o"* the complete commerciali5ation process need to &e revie"ed and su&seuently changes need to &e made considering delivery process* sta6ng and marketing mi# varia&les on the &asis o$ actual market dynamics

G


"#at standards and measures s#ould (e set in t#e Design and Standards Gap %Gap !' to deliver to customer e)pectations* :o+ormal s#ould t#e$ (e* :o- s#ould LACD create and design t#e neCSAs* :o- s#ould t#e$ get ever$one in t#e dealers#ips to learn a(out t#em and get on (oard to deliver t#em* -he standards and measures "hich should &e set in the design and standards 8ap to deliver to customer e#pectations are 

Standard CSA  de.ned process* terms and conditions% It should &e part o$ per$ormance evaluation $or dealership and its employees%



)ocus on speed and response time on the &asis o$ customer delights points collected a$ter research* create service ,lueprint



@ery $ormal since it "ill give competitive edge

-he standards should &e &oth hard and so$t: Hard Standards such as: •

Attending o$ customer service reuirement "ithin /< hrs

•

Machines should &e ready $or use "ithin ; days ma#

•

Responsiveness to complaints call "ithin /< hrs%

•

Intimation and con.rmation through email o$ complaint login no to customer "ithin / hrs% o$ receipt o$ complaint call




Delivery o$

•

reuired spares "ithin / "orking days at the site

-hese can &e measured through $ollo"ing: !% S#ip to target : B o$ orders delivered on time "ith complete accuracy

!


/% 2n Time /rst time /) : B o$ pro&lems related to maintenance o$ euipment .#ed on the .rst visit &y a service representative arriving at the time promised ,y $ollo"ing steps "e can get everyone in the dealerships to learn a&out them and also get on &oard to deliver them : 

Service/sales expert - KRA



Formal training



Mentoring



Using technology – tools like CRM - Standardied and c!stomied reports



"mpo#ering technicians



$nternal comm!nication channel like extranet% portals



Fixed targets &or team



'edicated team and e(!ipment

!!


:o- s#ould t#e dealers#ips overcome all t#e ;er+ormance Gap %Gap <' issues t#at t#e$ +aced in order to insure consistent deliver$*

De.ciencies in human resources policies

Customer "ho do not $ul.ll roles

)ailure to match supply and demand >ro&lems "ith intermediaries 'channels

J Shortage o$ trained employee9technicians J Attention not given to their interaction or communication skills J >er$ormance monitoring o$ technicians varied $rom dealer to dealer J o $ormal $orum $or communication &9" inter department personnel J Customer not providing position o$ vehicle during service re:uirement J Customer $orget to in$orm dealer a&out machine reaching service J interval ack o$ communication among parts * service and sales department J ot having relia&le system $or keeping track o$ machines routine inspection J A&sence o$ e1ective communication &9" customers ' dealers employee J Shortage o$ relia&le trained employess in peak season vice versa ot having system $or keeping track o$ and machines routine inspection

Services Delivery Cat HR policy should &e $ramed in connection "ith a3 training * learning and development o$ Dealer+s employees &3 training should stress on presentation* So$t skills* report "riting and e1ective communication c3 A $ormal $orum $or communication &et"een parts* service and sales personnel needs to &e created "here they can e#change their e#perience and &est practices "%r%t customers d3 Ro&ust so$t"are techniue should &e devised "hich "ill tell* "hen the customer+s euipment is in need o$ services e3 -imely logging o$ service call and reminder or intimation &e$ore this time $3 -ie up "ith technical institutes like I-I* g3 Cross training h3 >er$ormance appraisals 4 mandatory training o$ so$t skills* varia&le pays i3 Meetings o$ di1erent HFDs daily $or &etter understanding o$ pro&lems and communication 03 CRM* Scheduling o$ resources should &e done accordingly* daily reports "hich tell !/


"#at internal and e)ternal materials -ere necessar$ to communicate t#e CSAs to salespeople and customers* "#at else -ould (e needed* -he case says that there is a&sence o$ e1ective Sales tools in connection "ith CSAs% CA- employees are segmented in such a "ay that Sales >ersonnel does not sell CSAs neither they gain incentive "ith its sales% CSAs are very customi5ed and their o1ering di1er $rom customer to customer% Hence due to lack o$ proper kno"ledge o$ CSAs* employees and dealers used to do over promise or under promise% -he internal and e#ternal materials necessary are as $ollo"s: !% Service Circulars  "ith the servicemen* dealers* etc% /% Service Manuals  these contain the complete in$o a&out the machine and ho" to operate or service it% ;% ,rochures <% -raining Modules  regular training sessions on and o1 line% ?% Dedicated sel$4service "e&sites% % Service camps% E% Monthly Customer meets% G% Internal "e& portals giving product in$o%

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Using Services Marketing to Develop and Deliver Integrated Solutions at Caterpillar in Latin America

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