KIMURA K.K.

CAN THIS CUSTOMER BE SAVED? GROUP D5

SITUATION ANALYSIS

The given case relates to Pramtex Ltd. and their inability to create long-term loyalty with a customer like Kimura.
Pramtex is pursuing the goal of being the technology leader in the sector. It has chosen product differentiation over
cost leadership. In pursuing this goal, it seems to have fallen behind in the maintaining adequate service standards.
Due to lack of proper customer understanding and their perception of value (Customer Perceived Value or CPV),
Pramtex Ltd has already lost a key customer (Sony) to competition and is on the verge of losing another major
customer in Kimura K.K., possibly relinquishing themselves from the Japanese markets.
Its strategy involves close cooperation with the lead user customers to get a presence in the developing standards of
the industry. Overall, it seems to be focusing on the high-end premium segment of the market. This is also supported
by the fact that whereas it's overall share is only 3% of the market, its share of the premium segment is 8%.

CPV Analysis for Kimura

Customer Perceived Value (CPV)

Total Customer Benefits
Product Benefit (+) Most Advanced Technology
Highly Inadequate After
Service Benefit (-) Sale/Customer Sale Service,
Not easy to use & maintain
Less Responsive Staff,
Personnel Benefit
Irresponsible towards
(-)
customer’s problems
Yes, Due to usage of state of
Image Benefit (+)
the art technology
< Total Customer Cost
Monetary Cost (-) High Premium Price
Delay in Services, High Time of
Time Cost (-)
responses
High, as had to spend resources
Energy Cost (-) on finding the problem on their
own
Dr. Komoda sounded
Psychological Cost
‘exasperated’, shows the toll on
(-)
him to get the machines fixed

Why Pramtex fail in Japan?

- This shortcoming in understanding the Kimura’s perception of value (CPV) towards Pramtex’s product
and the buying center had led to breakdown of the deal for Taiwan factory.
- It was important for them to understand the Japanese market before expansion. They could’ve hired locally
to meet the time zone challenges, addressed their audience by understanding their culture (and thus give a
loyalty discount or a discount on their festivities rather than Christmas)
- Banking on the trust shown by Dr. Nomura was not enough. Pramtex should have endeavored to build
Kimura’s trust subsequently.
- Poor Warehouse Management: There was an inability to handle product damages. While some
damage is inevitable, it can be greatly reduced through proper warehouse management.
- Unprofessional behaviour from Accounts department
- Delay in sending qualified engineers to onsite when required
- Pramtex’s competitors were able to cater to Kimura’s requirements of 15000 DVD’s/day at a lesser cost.
Competitors promised to deliver the exact machines needed.
- Poor after sales services and lack of timely help and communication, would have led to Dr. Komoda feeling
helpless and Mr. Hashimoto feeling disgusted. Given that, offering discount, may have portrayed Pramtex’s
quality not as good as perceived.
KIMURA K.K.
CAN THIS CUSTOMER BE SAVED? GROUP D5

Solutions

Short term Long term

Apologize to Kimura, for the inadequacies in services. Take steps to tackle them, and portray those steps
- Instead of discount, offer compensation in the form - Understanding Japanese culture to cater to their
of remittances for poor post-sales service values & for subsequent expansion
- Dedicate personnel setup and support services for
- Recruit personnel locally for strategic expansion
Taiwan - include the same in the sales contract
- Include Kimura’s improvisations in all subsequent - Build customer trust – start loyalty programs to
deliveries to Kimura ensure that the customer sticks with your offering
- Engage 24*7 customer support/at least support in the - Leverage existing customer base to target new
working hours of their target markets clients
- Since they offer a customized product, they should
• Offer to send an expert to train Kimura’s
offer the quality customer desires (i.e. stop
machine operators
overdelivering) and charge accordingly
• Try to rebuild relationship with Mr. Nomura
- Proactively contact Kimura for feedback frequently
Establish an efficient complaint redressal system
- Monthly visit by technician for maintenance activity

Decision Making Unit at Kimura K.K.

• Initiator – Dr Gen-Ichi Nomura

• Influencer – Dr Komoda
• Decider – Mr Kimura, Mr Eiji Hashimoto, Dr Komoda
• Gatekeepers – Seiko Yamashita
• Users – Dr Komoda, Operators working on Spartacus at Kimura K.K
• Decision Makers – Mr Kimura