BRAND MANAGEMENT

Mahindra First Choice Services: Creating a

Value Proposition.

Submitted to: Prof. Dhananjay Kr. Singh

Submitted by:

Shubhangi Khandelwal 18A1HP066

Abhilasha Rani 18A1HP065

VertikaNewalkar 18A1HP035

Kushal Sahu 18A2HP414

Saikat Choudhuri 18A2HP410

Ques 1: What are the key challenges of the Indian automotive aftermarket sector and how
can they be addressed?

The rank of India is 108 on the list of cars owned per 1000 people. The ratio was 108 cars owned
per 1000 people and San Marino topping the list with 1271 cars per 1000 people. The
aftermarket business was totally driven by the number of cars on road.

Below are few challenges faced by Indian automotive market:

 The production of the spare parts is divided into Original Equipment Manufacturers
(OEM), Original Equipment Suppliers (OES) and generic manufacturers.
 The aftermarket service was also dependent on the number of cars on road which is very
low in India (18 out of 1000).
 Customers residing within 5 to 7 km of radius were more likely to use car services.
Customers living farther away were more likely to be affected by the “psychological
distance”.
 It was a tough challenge to acquire customers while keeping the customer acquisition
cost at justifiable level due to its low customer life cycle value.
 Servicing of vehicles would require high upfront capital expenditure that may not be
feasible for unorganized independent workshops.

The challenges can be addressed in the following ways:

 Creating unique customer value propositions and encouraging the customers to outgrow
the habit of relying on independent local garages.
 Due to advancement in recent automobile technology, there is a huge scope for
consolidation in the aftermarket industry.
 Setting up more authorized service workshops (with a greater number of bays) in the
catchment area of population with a comparative greater number of cars.
 Providing additional services like pickup and drop for customers residing far, 24/7
assistance and monthly online offers can add value to the service.
Ques 2: Analyse the factors that might affect consumers’ automotive service needs. What
does a consumer look for in an automotive service provider?

According to the exhibit 4 in the case, the factors which could bridge need – service gap are:

 TRUST: This factor is essential to make decisions regarding where to go for the after
service or which place is authenticated. Independent garages lack skilled labour, quality
of equipment and quality of spare parts whereas original equipment dealers lack
transparency as they don’t allow customers to access shop floors and also customer
retention is very poor. All these things affect customers’ automotive service needs
because they do not have clear idea where they can get quality service.
 SPEED: Customers need on time delivery in not only products but services also. Large
queues and delay in service is a major problem with the OEDs due to which customers
get unhappy and unsatisfied. Independent garages also lag behind when it comes to
deliver on time because they lack required skills and spare parts. These loopholes create
unnecessary hassle to the customers and they are left unsatisfied.
 COVENIENCE: lack of convenience in getting the service affects the customers’ needs.
Dealers don’t provide walk in facility and customers need to book in advance which
makes them dependent on the dealer. This inconvenience is also caused when there is
only workshop of independent garages. Providing appropriate and quality service to the
customer makes them want the same source and makes them satisfied.
 PRICE: Prices should be reasonable and authentic because this one factor is very
important for determining the customer preferences and choices. Original equipment
dealers charge higher prices with no or very less customization whereas independent
garages have no published price chart which makes the customer doubtful about the cost
of the service provided.

Apart from these factors some other factors are also there which can affect the customers’
automotive service needs. Proper advice given to the customer about their vehicle assures the
customer about the services. Distance of the workshop matters, MHCSL observed radius of 7 to
8 km to be the ideal area to setup its workshop so that people will prefer it more than other far
away workshops. Behaviour of the staff of the workshop establishes a good image and helps in
retaining the customer.
Ques 3: How would MFCSL prioritize the customer segments identified in the case Exhibit
8 items in term of their attractiveness?

MFCSL should prioritize the customer segments in the following manner:

Segment 1. Ownership Category

First priority should be given to the ownership category constituting individual car owners,
corporate fleet, taxi fleet and insurance. Mostly those car owners were more likely to avail
services of MFCSL who were residing within a 5 to 7 km radius. Moreover, for car owners of
large cities distance is not a problem so that could be beneficial for MFCSL.

Again, for acquiring new customers the marketing expense was Rs.24 million and total
manpower cost of acquisition activities was approximately Rs. 25 million. This is much more
than the justifiable levels of less than Rs. 250 per acquisition i.e. (250* 40000 new customers).

Segment 2: Car Life Cycle Stage

MFCSL should give this segment second priority because even post warranty, as per case, car
owners used the aftermarket service of MFCSL 3 to 4 times in two to two and a half year before
selling their vehicle. Though customer retention for MFCSL was 40%, but its gross margin on an
average is expected to be 35 per cent per sale and net margin to be 10% by 2018.

Also, according to Exhibit 6, majority percentage of customers who availed the aftermarket
service were car owners whose cars were within warranty and who were subsequent owners.

Life Cycle Stage Mumbai Raipur Pune Vapi

of a Car
Within 21% 18% 20% 35%
Warranty
Subsequent 23% 17% 8% 2%
Owners
Segment 3: Car Make

Car Make should be in segment 3.

The POD between MFCSL and OEMs are:

1. MFCSL provides multi brand aftermarket car services unlike OEMs which leads to time
saving and problem of dealing with different vendors.
2. The car owners availing services from MFCSL don’t have to deal with different price
propositions and comparing the service offering.
3. MFCSL provide a better value for money proposition.

The primary focus for MFCSL was servicing of Type A and Type B cars ranging from Rs.
300000 to Rs.800000 which mainly comprises of Maruti, Hyundai, Mahindra and Tata.

Segment 4: Service Needs

As per the study, in India, only 90000 searches were directed towards car servicing despite the
number of cars on roads being close to two million which is equivalent to merely 4.5%.

Though services include mechanical, repair, minor denting and painting etc. According to
Exhibit 7, painting is where there is need for services to be provided. Therefore, MFCSL should
focus on providing more of such services.

So, Services Needs should be 4th.

Segment 5: Ownership Personality Type

Ownership Personality is divided into four types:

- Gearheads
- Flaunters
- Epicure
- Functionalist
As per Exhibit 6, percentage of functionalist is highest in all the four cities. So MFCSL should
prioritize functionalist among these ownership Personality Type followed by epicures who earn
high salaries.

Flaunters and Gearheads are not so Loyal customers as they are explorers and new technology
driven. They are even ready to spend a lot amount of money in cars.

Moreover, as per Exhibit 9, MFCSL’s top segment constitute functionalist.

Ques 4: Evaluate the possible fit of the different positioning iterations provided in case
Exhibit 12 in terms of their imagery and impact?

Mahindra First Choice Service Ltd. (MFCSL) printed 5 different advertisement to position its
service for different platforms.

Iteration 1 displays the concept of FAST (Fast Assured Service in Time) along with badging of
“Top Gear Service Point” which build the impression of fast and assured services of repairs will
be given. The display also consists of multi-brand vehicle which emphasizes on the services are
been given to all 4- wheeler. The badging provides more confidence about the services rendered
by the workshops.

Iteration 2 displays “First Choice Services” rather than “Top Gear Services” showcase about the
preferential choice over their competitors by their customers. This also make their customers
more loyal towards the brand.

Iteration 3 displays the professional repair services are given, which illuminates the image of
having a car serviced by the professional service men with proper equipment and tools. The
image portraits about genuineness, quality service and professionalism in their services.

Iteration 4 again highlights on the fast services but accentuating more on the transparency of the
services by saying that “now the car owners can watch their car being serviced”. This value
exhibits about the service center being faithful and dedicated towards their work.
Iteration 5 showcase about their operational efficiency. This also defines the structured
ecosystem of the service center equipped with all necessary tools and technology, which results
in quality services in less time.

In conclusion, MFCSL primary value proposition was fast services. It also focuses on quality
service by way of professional inputs of service men and proper tools & equipment, providing
their customers full transparency of the service.

Ques 5. Based on the above analysis, what value propositions should MFCSL adopt to
differentiate its brand?

MFCSL, an Indian multi-brand car service business, requires creating a unique customer value
proposition to differentiate its brand from an extremely competitive Indian landscape. The group
expected to ensure a predictable positioning of the brand that would be like the M&M’s quality
and image. With this present, the situation of MFCSL should have been sufficiently adaptable to
consider the needs of the neighborhood.

The decrease in margins, increasing inventory and complexity with the spare components
provided a clear indication of service market consolidation, as this consolidation will result in
increased capital expenditure, and distributors of spare components would expect elevated
quantities at attractive margins.

To differentiate its brand from others, MFCSL should focus on few points based on the above
analysis:

• Should focus on the core value proposition of the brand that is “F.A.S.T” (Fast Assured
Service in Time) which builds the impression of fast and assured services of repairs will
be given and badging of “Top Gear Service Point”.
• Present brand as a “First Choice Services” over their competitors by their customers. This
also make their customers more loyal towards the brand.
• Emphasize transparency of the services which will give an edge over the local garage and
other competitors as they are being faithful and dedicated towards their work.
• Use of the structured ecosystem of the service center which has all the equipment, trained
service people & technology necessary for quality services in less time.
• Depending on the industry analysis as per the case, keep the present cost of MFCSL as
10-15% lower than that of OEM / OES sessions.
• Most of the MFCSL customers are Functionalists and Epicures. MFCSL needs to come
up with attractive packages to attract the Gearheads and Flaunters as they price oriented
customers.
• As given in the case MFCSL mainly targets the segment A and B cars so there's a lot of
opportunity to enter new segment of cars, which will not only increase the revenue but
also increase their presence and customer base.