Using Services marketing to develop and deliver

Integrated Solutions at Caterpillar in Latin America

PRESENTED BY:
Karthik. B

M099-14

Shahzeb Feroz

M122-14

Praveen Kumar

M114-14

Chetan. C. I

M091-14

Shalini Sathapathy

M124-14

Anoosha Vanam

M076-14

Gauri Rajpal

M094-14

Snehitha
Vedullapalli

M125-14

N. Amaresh Krishna

M105-14

Introduction
1904

1925

1951

2000

2006

Benjamin Holt tested thefirsttrack type tractor

C.L.BestTractor Co.and the Holt Manufacturing company merged to

form Caterpillar

Firstoverseas manufacturing facilityin U.K

300 different model starting from 5 HP to 22,000 HP.

Total sales exceed $41 billion

Structure of distribution
1
2
3
4

Corporation

Marketing Profit Centre

Dealers

Customers

Addressing the Customer Gap

The Customer Gap: The Gap between Customer Expectations and

Customer Perceptions
Performance measures in organizations were typically focused on cost operations to
maximize profit. they were not linked to customer satisfaction.
How well does the caterpillar understand customer expectation of service quality?

Zone of tolerance

Zone of tolerance is wide for general and urban construction companies

because they considered up-time as less important for business and they
were less willing to pay for premium parts.
Caterpillars largest customers (mining and construction equipment) have a
smaller zone of tolerance as up-time and productivity were its most
important consideration

Customer perception
Provides with definitions and understanding
customer satisfaction and service quality

of

Larger customer CSA(customer service agreement) had

demonstrated the significant benefits regarding the risks and cost of
unplanned machine time and resulted in high levels of customer quality.
PM CSA(preventive maintenance CSA) were purchased by smaller
customer. The extra services offered were not necessarily offered and
executed consistently

Kano model

Noriaki Kano developed a model to illustrate how customers perceive

quality. The model is based around the level of achievement compared to
the level of customer satisfaction.

It is divided into three distinct

categories:
Must be attributes (Basic): Customers take them for granted when they are

fulfilled; if they are not fulfilled they may become very dissatisfied.
One dimensional attributes (Performance): Result in customer satisfaction

when fulfilled and dissatisfaction when not fulfilled.

Attractive attributes (Excitement): Absence does not cause dissatisfaction,

but achievement can lead to customer delight.

How requirements can be

identified through Kano Model ?

Word of mouth
Comm.

Personal Needs

Past Experience

Expected Service
Consum
er

Perceived
Service

Service delivery (pre &

post contract)
Provider

Gap 3
Translation of perception
into service quality
specification
Management
perception of customer
expectation.

Gap
4

External
communication
to customer

What were they and how could they find out?

The following framework helps us to answer the first part of
the question
Customer

First Time
Prospects

Dominant
Theme

"Take Care of
Me"

Benefit
Sought

What's less
Important

Novices

Sophisticates

"Help me makeit work" "Talk technology to me"

Honest Sales
representative
who knows my
business

Easy to read manual

and technical support
hot line

Compatibility with the

existing system

A vendor who
has been in
business for
sometime

A high level of training

Product customization
to customer needs.
Track record of vendors

Sales
An honest sales
Training , Easy Manual ,
Representative's representative. A sales
Sales representative
knowledge of
representative who
who can communicate
product and
knows and understand
in an understandable
service
my business
manner

Source: Anderson, D., Sweeney, D., Williams, T., Freeman, J. and Shoesmith, E.,
2007,Statistics for Business and Economics, Thomson Learning, London, England. Adopted

Market Research
The answer to the second part of the question is a
research methodology.
Theoritical
Segmentation

Noise
(change
in the
busines
s
scenario
)

Inpu
t
Actuator

Segmentation " in
Company'
Selection of variables
Statistical Analysis
- Cluster
Analysis
Methodology
Configuration

Feedbac
k

Outpu
t

Cluster Analysis with

SPSS
Analysis of
segmentation models
theoritical results

Analysis of "In
Company"
segmentation result

SEGMENT

Research framework Source : Market Research David A. Aaker, V.Kumar , George S.Day , Robert P.Leone

Segmentation
Dimensions
Segment Must Be
Behaviour of Customer
buying CSAs
PM CSAs etc

Features of
Segmentation

Attitude , Value and

Dimensions
Industry
Mission

here it is Earth
Moving Equipments (EME)
Size of company e.g. general
construction , mining
,contractors , sub contractors
Location-Latin America

of
Segmentation

Loyalty , Co-creation of
services and value chain lock

Need & Preference and

desired relationship
Operational, Functional ,
Financial

Meaningful
Distinct
Sizeable
Identifiable in real life
Context Specific

Source: Philip Kotler , Kevin Lane Keller , Abraham Koshy & Mithileswar Jha, 14 th Edition ,

Segmentation Techniques
Segmentation model which we can implement in this scenario
of B2B service delivery .
Criteria

Nested Approach
Personal
Characteristi
cs
Situational
Factors
Purchasing
Approach
Operating
Variables
Demographi
cs

Source: Anderson, D., Sweeney, D., Williams, T.,

Economics, Thomson Learning, London, England

Description

VARIABLES

General and easy information

of the company , customer and 1 )Industry Information
Demograph Industry. Do not need to visit
2) Company
the
customer
or
other
size
ics
complicated information
3) Customer location
sources
1) Technology
Enable more precise
2) Product
Operating
information of customer with and brand-use status
Variables demographics category
3)
Customer capabilities
1) Purchasing function
organization
Involves the company
2) Buyer-seller
Purchasing
philosophy , their purchasing relationship
3)
Approach method and buyer center
General purchasing
policies ,
4)
Purchasing criteria
In this point what is important
is the buying situation . These 1) Urgency of order
Situational are operating variables e.g.
2)Product
Factors idle time, but are temporary application
and need a better
3) Site of order
understanding of the customer
1) Buyer motivation
Personal Segment the market according
2) Individual
3)
Characteris to the individuals involved in perception
the
purchasing
process
Risk
Management
tics J. and Shoesmith, E., 2007,Statistics for Business and
Freeman,
strategies

Segments
Product
Support
Based

Earth
Moving
Equipment
Industry

Service
Requirem
ent Based

Task
Based

Do it myself ( For
segment migration
make him analyse
cost benefit)
Work with me
Do it for me

Low Price
Will fit

Mining
General
Constructions
Sub contractors
Government and
government
contractors

Points Of Differentiation
Urgency

No of
machine
s
Installe
d

PO
D
Site of
order

Product
Applicat
ion

Points Of Parity
PM
CSAs

PO
P
Feedbac
k

Monitori
ng

Competitive advantage
Caterpillar Attribute
model
Global and Fast availability of
spare parts
Local dealer expertise
Repair facilities
Skilled technician
Unmatched dealer distribution
channel

Strong Dealership
Dealers invested in
inventory
Ware house
Service shop
Tools information technology

Competitive Landscape
Third party vendors are not
sophisticated
After market supplier provide will fit
part
work shop had evolved but not
financially strong
Competitors like Komatsu provide

Differentiation
advantage

Service through out Latin

America
Convenience for customer

Brand
Value
Keep them
running

Service Encounter Pleasure

Recovery
Acknowledge Problem
Apologize
Take Responsibility
Explain Cause
Layout Option

Spontaneity
Be attentive
Anticipate needs
Listen
Provide Information
Show Empathy

Adaptability
Recognize the
seriousness of the need
Anticipate
Explain rules/policies
Attempt to accommodate
Adjust the system
Sources of
pleasure in
service
Encounter

Coping
Listen
Try to accommodate
Explain

Source : Service Marketing by V A Zeithaml

Positioning CSA
Feedback discussion
Updating business owner about
maintenance work
Monitoring of machine condition
Estimated loss due to risk of
unplanned machine downtime
Availability of skilled field
technician
24X7 complaint booking
service
Arranging finance while high
price operation
Customizable service features
Should be sold along with product
Regular Inspection
Changing of oil and filter
Speed of service

Delight
Satisfier

Core
afsd

Source : Service Marketing by V A Zeithaml

Building Customer
Loyalty
Interacti
on
Identify improvement
opportunity
Work cross functionally
to address the
structural issue

Learnin
g

Interact with customer

Identify Moment of
truth
Identify key decision
maker

Custom
er
Loyalty

Engage

Engage the customer

in one on one dialog
Do survey on site

Empower the front line

Follow up personally
Close the loop as early
as possible

Feedba
ck

Bain & Company : http://www.bain.com/consulting-services/customer-strategy-and-marketing/customer-loyalty.aspx

Intangibility
heterogeneity
inseparability.

Service quality is
more difficult for
the consumer to
evaluate than
goods quality.

Crosby
conformance to
requirement

Quality
evaluations are
not made solely
on the

Quality is a elusive
and an indistinctive
construct

Japanese
philosophyzero defects,
doing it right
the first time.

outcome of a
service

ServQu
al

Result from a
comparison of
consumer
expectations with
actual service
performance
Q= P-E

Result of Exploratory & Quantitative

Research
Tangibili
ty
Physical
facilities,
equipment,
and
appearance
of
personnel.

Repair
facility,
waiting
area,
uniforms,
equipment
No of items 4

Reliabili
ty
Ability to
perform the
promised
service
dependably
and
accurately

Responsiven
ess
Willingness to
help customers
and provide
prompt service

Assuran
ce
Knowledge
and courtesy
of employees
and their
ability to
inspire trust
and
confidence.

Problem
fixed the
first time
and ready
when
promised

Accessible;
no waiting;
responds to
requests

Knowledg
e
mechanics

No of items 5

No of items 5

No of items 4

Empat
hy
Caring,
individualized
attention the
firm provides
its customers.

Acknowledg
es customer
by name;
remembers
previous
problems
and
preferences
.
No of items 4

ServQual and Customer Loyalty

Reliability
Responsiven
ess
Assurances

Service
Quality

Empathy
Tangibles

Customer
Satisfaction:
Product features.
Customer
Emotions.
Attributes.
Perception of

Product
Quality

Price

Situationa
l Factors

Customer
Satisfacti
on

Personal
factors

Custom
er
Loyalty

Customer Satisfaction
Satisfaction is a customers fulfillment response. It is judgment that a
product or service feature, or the product or service itself, provides a
pleasurable level of consumption-related fulfillment.
Customers evaluation of product.
It is a dynamic concept, target that may evolve over time, influences by
variety of factors- which will be demonstrated in the coming slides by my
team mates.
Customer Satisfaction;

Product and service features.

Customer emotions.
Attributes of service success or failure.
Perception of equity or fairness.

Reliability
Equipment
built to last.
Better
quality of
product and
service

Maximum
up time of
equipment
at minimum
cost.

Minimum
risk and
cost for
unplanned
machine
down time

Timely oil
change and
filter
change for
PMA and
visual
machine
inspection

On time
availability
of trained
technicians.

Sophisticate
d process
and
software
,tools and
component
replacemen
t.

Provide
prompt
service and
make sure
the cost of
repair is
minimum

Responsive
with the
queries of
the
customer
related to
CSA

Efficient
fleet
manageme
nt and
efficient
service on
time.

Responsivene
ss
Speed of

Assign
technician
to fleet to
dedicatedly
work for a
customer

service - by
bench
marking
and
following
the
standard
set

Improve the
trained
technicians
in dealer
network.

Assurance
equipment
up and
running at
the lowest
possible
price.

Short term
affordability

Ideal
working
state of the
equipment
in min cost

Max uptime and

improved
productivity.

Generation
of superior
return on
lower
systematic
risk

Cash flow
limitation
Provide credit
based service.

Do it for me: in
the customer
shoes and quick
response

Empathy
Faster response
time and timely
repair and make
sure customer
doesnt miss
any deadline.

Feedback
discussion with
the customer
for higher
involvement

Flexible
contracts.
Customized
contracts in
terms of length,
cost and
content for the
mid-range
customers.

Tangibility

High
quality
tools
used,
sophistica
ted
process.

Quality
equipmen
t parts

High
quality oil
and filters
for PMA.

Field
technician
and the
service
provide.

Dealer
sales and
maintenan
ce sales
force.

Availabilit
y of
trained
technician
s.

Benchmarking
Definition a continuous, systematic process for evaluation
products, services and work process of an organization that can
be recognized as representing best practices for the purpose of
organizational improvement.
Three steps in benchmarking:
Identifying the best performers.
Setting benchmarking goals.
Implementation.
Once benchmarking goals are selected, the question on setting
goals still remains:
How much service quality still be improved?
Benchmarking goals should be measurable, attainable and
actionable.
In auto service industry , the service quality gap between
service provider are particularly large and service provider
switching occurs frequently.

Calculation of ServQual and

Benchmarking
ServQual comprises 22 items (Likert-type) with the five
dimensions.
Each item in servqual instrument is of two type:
Measure Expectation (E)
Perception of the service.(P)

Quality GAP (Q) = P - E

Q provides the overall quality rating.

Q can be used to:
Track service quality trends over time.
Compare branches within a bank or building society.
Compare an organization with its competitors.
Categorize customers into perceived quality segments.
Based on their individual SERVQUAL scores.

Dimensions of ServQual Measures

Assurances; 19% Tangiblility; 11%
Empathy; 16%

Reliability; 32%

Responsiveness; 22%

PROVIDER GAP 2- SERVICE INNOVATION AND DESIGN

Customer deriver service design &

standards

Poor
Service
Design

Less number of CSA

CSA are not branded
Created in an ad hoc manner

Customer
Driven
standards

Promised but expectations are

not met
operationally focused but not
service driven

Inadequate
Physical
evidence
and
servicescap
e

Customer interacts with sales

people
What to offer and deliver
Countries: Culture, Law,
Structure

Company perceptions of Customer

Expectations

FLOWCHART

A: Provision of
CSA

Yes

Need
CSA?

No

Yes

Is custom
-ization
needed?

Provide details of
customization
that can be
offered

No

Type
of
CSA
Willing to
buy after
customizati
on?
Yes

Add customized
specifications to
the CSA
Willin
g to
buy?
No

Yes

Accept
payment and
obtain the
agreement
form

Updates
customer order

No

B: CUSTOMER BUYS A NEW

PRODUCT
Customer
requests a new
product

Information about
product is shared after
checking availability of
the product

No
Is
custome
r willing
to buy
the
product?
Yes

Date is given
and the route
is planned

Customer
verifies on
reception

Approval is
made and the
parts are
shipped

Customer
verifies the
location and
date

FLOWCHART
Produc
t
Yes

New
custom
er

Product
sale or
Product
support
sale?
No

No

Need
CSA?

Verify
credential

Verify
credential

Obtain details of the

customer, provide the
identification number
for future reference
and update the
customer profile in
the customer log.

Product
Support

Yes

BLUE PRINT : A NEW CUSTOMER FOR A

PRODUCT SALE
Product
ID number and CSA
catalog
Receiv
es the
ID

Agreemen
t

Customer
requests
service

May
accept the
agreemen
t

Line of interaction

Onstage
Contact
Employee
Action
Line of visibility

Backstage Contact
Employee Action

Obtain the
client
details
Obtains
the
customer
ID

Create the
customer
identificati
on number

Request
data to the
client

F1
Inform
the client
about
CSA

Check
availability

Customer
agrees to the
day of visit and
provides
equipment
location

Confirm visit date

and location of the
client

Open work order,

search contract,
fill request and
deliver to the
assistant

Line of internal interaction

Support Processes

Updates
the
customers
profile list

Check route for

the clients.
Create
economical
route visiting

F2

Application
Wizard opens

Customer
confirms
visit and
location

If denied
verify
motives
and
contact the
customer

denied

Customer

New
Actions Customer
requests
service

Well equipped , well

uniformed
technicians, truck

apply for
Payment

You call
customers to
confirm route
and location
where
equipment
has to be
installed
Parts are
assigned and
shipped

Accept

Physical Evidence

approval print,
order status is
changed to
open .

Contract is
checked for
parts, fills
and enter
requisition in
the system

BLUE PRINT : AN OLD CUSTOMER FOR

A PRODUCT SALE

Customer
requests service

May
accept the
agreemen
t

Line of interaction

Onstage
Contact
Employee
Action

Obtain the
client ID
and enter
into the
system

Request
data to the
client

Line of visibility

Backstage Contact
Employee Action

Line of internal interaction

Support Processes

Inform
the client
about
CSA for
the new
and
existing
products

Confirm visit date

and location of the
client

Open work order,

search contract,
fill request and
deliver to the
assistant

Check
availability

F4

F3
Cross
checks the
credentials
of the
customer

Customer
agrees to the
day of visit and
provides
equipment
location

Check route for

the clients.
Create
economical
route visiting

Obtain the list

of products
used from the
customer
profile

Application
Wizard
opens

Customer
confirms
visit and
location

If denied
verify
motives
and
contact the
customer

denied

Customer

Customer
Actions requests
authenticati
on

Well equipped ,
well uniformed
technicians,
truck

Agreemen
t

apply for
Payment

You call
customers to
confirm route
and location
where
equipment
has to be
installed
parts are
assigned
and shipped

Accept

Product
and CSA
catalog

Physical Evidence

approval print,
order status is
changed to
open .

Contract is
checked for
parts, fills
and enter
requisition in
the system

BLUE PRINT : CUSTOMER FOR A

PRODUCT SUPPORT SALE (CSA)
Physical Evidence

Customer Actions

CSA catalog Agreeme

nt
Customer
requests
product
support

Agreeme
nt

Customer
receives
agreement

Chooses the
CSA

Signs the
agreement

Customizati
on options
are
explained if
needed

Receives the
agreement
form

Line of interaction

Onstage
Contact
Employee
Action

Obtain the
client ID
and enter
into the
system

Elaborates
the type of
CSA

F5

Line of visibility

Backstage Contact
Employee Action

Line of internal interaction

Support Processes

Cross
checks the
credentials
of the
customer

Updates the
customer
profile

BLUE PRINT : PRODUCT SUPPORT

(CSA)
Physical Evidence

Report

Field sheet ( sheet

visit)
Customer
receives and
signature field
sheet

Customer Actions

Customer
provides
feedback

client receives
report

Line of interaction

Onstage
Contact
Employee
Action

report to be
brought to the
customer

Mechanic
performs
maintenance,
inspections and
taking oil
samples

Line of visibility

Backstage Contact
Employee Action

F7

F6

Dispatches
the
mechanical
technician

Field sheet
is filled ,
walk around

Receive field
sheet

Report is made

Line of internal interaction

Support Processes

Exit Guide is
developed ,
work order is
enabled

Feedback is recorded

Report is
received

Customer Defined
Service Standards

Customer Defined Service Standards

Very few CSAs were created, branded, positioned and marketed based on the
timing, risk reduction, relationship or convenience they provided to customer.
Problem:
- Customer Dissatisfaction due to negatively perceived service quality
Possible Solution:
- Segmentation and customization of service.

Framework for Marketing Management

by Kotler

Customer Defined Service

Standards
CSAs varied across dealerships and often across customers within dealerships.
Problems:
1.

What to expect? Advantages of CSAs?

2.

Employees unclear about what to offer whom?

Possible solution:
3.

Standardization based on segments identified.

-.

Critical elements of a service are performed as expected.

-.

Hard Standards

Soft Standards

2.

Offer 3 packages - Basic, extended, Superior

Hard and Soft Standards

Hard
Standard
s

Soft
Standar
ds

95% repair success

Service status provided
within 1 min of enquiry

Thorough explanation of
coverage, charges and
work done
Service needs courteously
identified and verified with
customers

Customer Defined Service

Standards
Sales people were not the employees who offered CSAs.
Problems:
1. Employees dont know what to offer.
2. Customer expectations and reactions not known
Possible Solution:
3. Formal Goal Setting Process
4. Employee empowerment to certain level

Customer Defined Service

Standards
Dealers had different opinions on what customers expected and
measurement to standard was not captured except on ad hoc basis

Problems:
1. Customer satisfaction is not known

Possible Solution:
-Hard measurements
(speed of service, machine condition report )
-Soft measurements
(relationship surveys, feedback mechanisms)

Customer Defined Service

Standards
Dealerships were inconsistently organized in silos-sales, product
support, parts-and interacted inconsistently with each other and rarely
planned together.

Problems:
- Difficult to understand customer requirements
- Design inconsistent with product offering

Possible Solutions:
- Functional Integration, Formal Documentation.
- Simple integrated system update and to keep track of customer record.

Customer Defined Service

Standards
Latin American countries were different in structure, cultures and
laws, making the sharing of practices less than ideal.
Problems:
- Difficult in practicing standards
Possible Solutions:
- Different standards and customization

CSA designed for all customers

Single machine, entire fleet for cat and non-cat
equipment
Feedback to purchasers about machine condition,
potential issues and recommendations
Visual machine inspection, Monitoring condition of
machines, Feedback discussions with customers
documented should be available for access by
employees and customers
Fleet rentals should be made available.

For specific segments

Mining Segment
In time delivery
of service
Service to
competitor
equipment
Field Service to
maximize up-time

General Construction
Flexible payment
options
Inspection CSA,
Preventive
maintenance CSA
Fleet rentals in
peak construction
season

Elements of Physical Evidence

Service Quality and Productivity

Source: Service Quality and Productivity- A Synergetic Perspective by A.

Parasuraman

Tangibles
Clearly defined service packages.
Tools and equipment needed for servicing should
be available with the technicians.
Use of latest technology to diagnose and deliver.
Better integration and interaction between
different departments- sales, product support,
parts, etc
Installation of CRM system.

Use of Technology

Source: Understanding Customer Relationship Management- People Process and Technology, Injazz J. Chen and Karen Popovich

WEBSCAPE

Source: Jean-Philippe Galan and Christine Gonzalez (2001) ,"Webscape: a Theoretical Framework of Web Site Design Impact
on Consumers= Responses"

Problem: CSA selling materials did not exist for them to

understand what was possible and what options to offer.

Solution:
1. Standardization of support processes
2. Training the employees

Understanding Servicescape
Effects
Environment Surveys- Ask people (customers or employees)
to express their needs and preferences for different
environmental configurations.
Direct Observation- Trained observers make detailed notes of
environmental conditions.
Experiments- Groups of customers exposed to different
environmental configurations and their reactions measured.
Photographic Blueprints- Provide a visualization of the service
to the customer at each step and are useful for unambiguous
documentation of the physical evidence of the service.

Physical Evidence Strategy

Recognize the strategic impact of physical
evidence
Map the physical evidence of service
Clarify the roles of Servicescape
Assess and identify physical evidence
opportunities
Update and modernize the evidence
Work cross-functionally

Communication Skills needed

Extra services provided should be informed
Maintain records of customer machines, service
contracts
Minimum number of dedicated technicians at all
times
Easy accessibility for customer

Interactive
Providers
Marketing
Inverted
Service
Internal Marketing
Marketing
Triangle
Increase teamwork and
communication between
departments
Increase supply of qualified
field technicians
Formal Training/ Mentoring
Dedicated teams and
equipment
Reports to supervisors

Company

Customers

External Marketing

Sessions about CSA to

customers by Sales Experts
Report to customers about
executed services
Train dealers to sell
intangible services
Bundle CSA with products

Offer
Vision

Compete
for Talent

Prepare
People to
Perform

Attracting
Developing
Motivating
and retaining
qualified
employees

Stress
Team Play

Measure
and
Reward

Leverage
Freedom
Factor
Know Thy
Internal
Customer

Source: Southwest Airlines Internal Marketing Model

Offer a Vision

Compete for
Talent

Prepare People
to Perform

Stress Team
Play

Generate a service culture in the organization and make the employees understand
the importance of their offering of services to customers.

Make Extensive Efforts to hire the right people

Employ special trainers to train existing employees in interactive skills

Feedback from customers and peers to improve performance

Increase coordination between existing departments

Stress upon cross training of employees

 Recognition and praise for positive behaviour

Special incentives for taking training sessions to juniors
Special rewards for employees in case of positive feedback
Measure and from customers
Reward
Incentives for selling CSAs

Leverage
Freedom
Factor

Know Thy
Internal
Customer

Employees are the brand and the marketers

Encourage and allow them to take decisions to meet customer
demands

Know more about the customer requirements

Generate ideas to address these needs

Effective Customer Participation

Illustrate the importance of customers in successful service delivery
Interact with individual customers to improve your knowledge and build stronger relationships
Customer Care Centre should be developed on each dealership

Define Customer Roles

Clearly specify their problem.
Regular calls to the customers to know about their current service renewal
Provide them with customer care contacts
Single point of contact between company and client

Recruit Educate and Reward Customers

Reward customers for proper feedback
Offer them incentives to extend their CSAs
Educate the customers about the financial options available
Clearly define wait times for the customers in different segments
Share the benefits reaped by the existing CSA customers

High Demand
Hire Part time technicians
Cross train employees so they can work across different domains
Offer incentives to employees to work over time
Dedicated teams and equipment during peak times
Internal communication channel like portals to improve coordination between teams
Use previous standardized reports to enhance services subsequently
Set priorities for emergency requirements
Use entry level technicians for basic problems and proceed to expert technicians
Shift system in dealership during peak times

Low Demand
Offer benefits in services during no peak times
Regular mandatory checkups can be conducted
Employee training can be organized
Interact with customers and offer customized CSAs

INTEGRATED SERVICES MARKETING

Address COMMUNICATIONS
Service
Intangibili
ty

Manage
Internal
Marketing
Communicatio
n

ADDRESS SERVICE INTANGIBILITY

Your equipment is in good hands with
Caterpillar

Manage
Service
Promises

Goal: Service Delivery >=

Promises

Manage
Customer
Education

Manage
Customer
Expectatio
ns

Showing Tangibles; Service Technicians

Inspection & Recommendation reports
Featuring
service
communications
Word
of
Mouth
relationships

employees
through

in

Employee

Clearly communicating
the offerings (Speed
MANAGING
SERVICE PROMISES
of service and Quality of the machine
Personal
Selling of CSAs
conditioned)
Direct marketing to specific customers
Short-term incentives can be provided in
CSA offerings

INTEGRATED SERVICES MARKETING

Address COMMUNICATIONS

MANAGING CUSTOMER EXPECTATIONS

Service
Intangibili
ty

Manage
Internal
Marketing
Communicatio
n

What repairs can be carried out?

Service guarantees & Choices (Trade-off
between Speed & Quality of maintenance)

Manage
Service
Promises

Goal: Service Delivery >=

Promises

Manage
Customer
Education

Manage
Customer
Expectatio
ns

EDUCATING THE CUSTOMER

Informing where the Equipment is!!
Knowledge
on
maintenance

frequency

of

the

Decision maker is different from the Service

user
MANAGING
INTERNAL
MARKETING
COMMUNICATIONS
Effectively communicating with the Dealers
through MPCs
Reducing the gaps between Equipment
sales, Part sales & Equipment service.

Methodology
& Features of Tier
PRICING OF CSAs SERVICE
TIERING
Pricing
Value is the quality I get for the

TIER III
High Price; Large Customers;
Highly Customized

TIER II
Satisfiers; Some Premiums; MediumSized construction customers;
Customized to some extent

price I pay; Value bundles

Second Degree Price
Discrimination
Segmentation Based
(Customer Perceived Value)
Demand Elasticity differs across
Tiers

TIER - I
Core Services; Low Price; Small
Customers; Standardized

Identifying Spare parts & oils

required for different types of
Products offered
Stored data on Customer
purchases & Frequency of repairs

BALANCED PERFORMANCE SCORECARD

CUSTOMER
PERSPECTIVE
1. Cost Reduction
measures
2. Customer Satisfaction
3. Word-of-Mouth
communication &
Loyalty

FINANCIAL
MEASURES
1. Sales of CSAs
2. Accurate Budgeting
3. Credit Policies
4. Asset turnover &
Financial leverage

INNOVATION &
LEARNING
1. Technological
Innovations
2. Employee (Technician)
skills
3. Time to establish
relationships

OPERATIONAL
MEASURES
1. Parts Turnover
2. Time utilization of
mechanics
3. Inventory management
4. Process Quality

THANK YOU