CHANGING MARKET AND THE IMPORTANCE

Presented By:Poonam Yadav Megha Dhingra Shivangi Tripathi Saheli Chowdhury Kavita Makkar

PART - I

CHANGING SCENARIO:Indian economy is zooming towards market orientation. Competitive environment because of the large number of alternative products. There is a gradual change & increase in the consumer expectations. Companies facing mounting pressure to adapt the changing needs & expectations. Mantra of modern corporate world is Varied Products with Varied Customer Functions for Varied Customer Groups.

CONT
Firms are expecting more from their distributors/retailers(customers) in terms of investment to ensure further growth in the sales volume & more service from trade. Customers are also conscious about their own ROI,ROS,ROME.

Not cooperating with the companys marketing executive during their visits Not take proper interest in any new products/promotion schemes of the company Only interested in premium products and discontinue specific items Reduce the volume of business Add the competing brand products or other products of the other companies Change companies frequently or even abandon the trade itself.

FOCUS ON CUSTOMER & DEALER

Qualitative results of marketing largely depend on their

effective use of well-motivated dealer networks because the ultimate deal is swung by dealer push.

The development of a new dealer is too expensive than keeping a current one

Firms major business comes from its present customers.

EXAMPLE:Ford Ikon planned to launch an innovative exchange offer scheme. It was about replacing old with the new ford Ikon. Through this scheme their target was to sell 1 lac Ikon in 3 yrs. For this they organized the premier show at its dealers showroom & they invited 22,000 potential customer who were listed in there database. Their main aim is to retain there exiting customers. Their target is to sell 1 lac Ikons in 3 yrs as it is very difficult to have a considerable growth in the sales volume.

EXAMPLE OF LOGISTICAL CUSTOMER SERVICE

HLL ( Hindustan lever limited)

HLL stock replenishment cycle time of 2 to 3 weeks has been cut down by 3 to 4 days. Resulted in curtailment in working capital & godown space requirement. Firms are using IT tools & technologies to cut down its transaction & communication costs.

CONT
P & G ( Procter & Gamble) P&G had 6 distributors competing against each other in Mumbai. It then replaced the conventional distributors with a super stockist. New structure helps in 2 ways:Firstly, it reduce the cost of replenishments. Secondly , it lowered the replenishment cycle time by 3 days.

CONCLUSION FROM ABOVE EXAMPLE

For long-run smooth functioning of firms, it is essential to retain the loyalty of their customer by means of having a proactive customer-relation programme .

Unhappy customers cost firms in a big way. By propagate others regarding the poor service standard and treatment & often affect the corporate image negatively.

AT LAST, ONE CAN RIGHTLY SAY:

It is good to have best quality product;

It is also good to have most competitive price and effective

promotion; But, it is must to have happy, loyal and well-motivated customers, Because, it is your customers who can and who will make a

difference.

PART-II
COMPONENTS OF CUSTOMER SERVICE

ELEMENTS OF CUSTOMER SERVICE

I. II.

Pre- transaction Transaction

III.

Post-transaction

PRE-TRANSACTION ELEMENTS

Written statement of policy Customer receives policy statements Organizational structure

System flexibility
Management services

TRANSACTIONS ELEMENTS
Stock out level Order information Elements of order cycle Expedite shipments Transship System accuracy Order convenience Product substitution

POST-TRANSACTION ELEMENTS

Installation, warranty, alterations, repairs, parts Product tracing Customer claims ,complains and returns

Temporary replacement of products

COMPONENTS OF CUSTOMER SERVICE

I.

Strategic components

II.
III.

Logistical components
Non-logistical components

STRATEGIC COMPONENTS
It reflects the corporate vision towards long run customer service objectives and appropriate allocation of resources etc. It includes:i) Give full assurance for the best ROI, ROS and ROME - so it required to keep the customers happy so that the firm can exhibit its best in the competitive marketplace. ii) Commitment for long-run association by means of deploying customer-friendly personnel, a helping attitude, complaints & grievances, cooperation during the period of need.

iii) Proactive effort for continuous improvement in the quality of customer service. - By learning from past experiences of defective delivery & improving the operating system.

LOGISTICAL COMPONENTS

It deals with making available the right quality products at the right time and place in the right physical condition.

Logistical components of customer service refer to delivery of products.

IT INCLUDES:i) Availability of products: The companys ability to make available products as per normal quantity. A flexible system should also be well defined & established so that an unforeseen demand for products by the customers can be met. Efforts should be made to prevent a stock-out situation. Logistical competency of a firm is directly related to its efficiency to handle extraordinary customer service requests

For example, during the period of demand, customer goodwill can be restored by arranging suitable product substitution or shipment of products by a speedier mode of transport.

ii) Offer fixed replenishment cycle time & their efforts to reduce it further by means of speedier order transmittal & delivery of goods, so that less working capital and space will be required and also stock-out can be prevented.

iii) Zero- defect delivery of products by the firm in terms of right quality, right assortments, intact delivery & current documentation. This component deals with the quality of delivery.

iv) In the case of defective delivery, efficient and prompt reverse logistics system should be offered by the firms for early recovery to retain customer loyalty & goodwill towards firms
v) Point - to - point information i.e a firms ability to provide fast & accurate information to customers regarding status of inventory, order, tentative shipping & dispatch schedules along with book orders.

v) Consistency The firms should put greater emphasis on consistency in their services. Consistency refers to the ability of a firm to maintain its normal logistical system & its efficiency to handle unexpected situations.

NON-LOGISTICAL COMPONENTS

It is basically value - added services offered to a specific customer depending on individual requirements. It includes:i) When a firms expectations increase in terms of space, selling skills, mobility, etc they should provide financial support to their customers, especially for infrastructural developments. E.g soft drinks firms provide refrigerated display unit to retailers at no charge.

ii) Arrange training programmes for customers & their sales-forces about knowledge regarding the technical knowhow of products, selling skill, interactive skill, executive skill & development in order to keep them up-to-date.

iii) The firm should prevent any imposition of undue conditions like tagging of new products with the supply of premium products or too long awaiting list for a specific to keep customers away from anxiety. iv) Discretionary power should be assigned to the customers in order to settle the claims on the spot, which will enhance their confidence & interest.

CUSTOMER SERVICE COST

It has been observed that 80% of the profit comes from 20 % of the customers. Similarly, 80% of the service costs are recovered from 20% of the customers. So it is essential to have a proper cost benefit analysis of the service, because any increase in the service level will need to increase the cost of the service mainly due to the requirement of additional facilities, which will also generate additional sales volume to some extent due to further motivation to customers.

ELEMENTS OF COST
Inventory-carrying costs for reqd. level of services to meet unexpectedly high levels of demand. Costs incurred in the reduction of replenishment cycle time. Costs involved in reverse logistics system in case of defective delivery. Costs involved in the continuous evaluation and appraisal of the system. Fixed costs incurred in the development of service consistency, such as development of information systems and internet connectivity.

QUESTIONS:Part- I 1. Analyze the examples of HLL & P&G. 2. What is essential for long run functioning of firms? Part- II 1. What are the elements of customer service? Discuss in brief. 2. Explain the components of customer service portfolio.