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A company's

   is all the help and information that it provides to customers
after they have bought a particular product.


        

.The best and the biggest international brands are here in India ±but the irony if it all: where
is the after-sales-service? So integral to a brand, so critical for it¶s success and so taken for
granted in developed markets! In India, after sales service is, for want of a better description,
the pits.
So what¶s stopping the best companies from pulling out all the stops when it comes to
providing the best service? Do customers expect for too much? Or is it that in India they
don¶t really care?
Brand Equity fanned out to MNC as well as Indian consumer durable companies, stockists
and dealers, analysts and market researchers to get a feel of what¶s really keeping after sales
from being used as a cutting edge marketing tool in pushing products across categories.


  

Take promise versus performance, and after-sales-service beats the worst performers on Dalal
street. Expectations are built up by the company itself ± not only during pre-sale activity but
also with promises made during the sale. Common sense dictates that there are only two ways
to satisfy a customer: either keep your word or don¶t promise at all. If you promise to deliver
in six hours, but take 12 hours instead, you are going to end with a dissatisfied customer.
There are companies as well-known as Kelloggs who give email addresses on cartons for
suggestions and complaints«but the address turns out to be defunct.

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Today, companies in India are finding it hard to meet expectations, let alone surpass them. A
large part of the reason is that margins are being squeezed and market growth has not been
high as expected. Increasing cost of raw materials, oil and bloating advertising budgets in a
market more cluttered that ever before« all put margins under pressure. Worse, average
prices in the refrigerator and washing machine segments have even decreased slightly, what
with the Korean brands introducing low priced products to push volumes. With big
companies like BPL, LG, Whirlpool, Godrej, Videocon and Akai and Philipps advertising
aggressively, industry ad spends are increasing dramatically.


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The upshot: If you¶re trying to make ends meet, after-sales service is to be low on the priority
list. ³Allocating resources beyond the sales period is not what companies can always afford
as they have to give extra features are improve quality,´says Thomas Puliyel, President,
Indian Market Research Bureau (IMRB).
Going forward, the market is only expected to become more price sensitive. Rising
disposable incomes are creating new aspiration levels amongst the lower middle class and the
middle class and a large part of market growth in the future is expected to come from small
towns ± and from lower income groups in large towns. Not only are companies devising
aggressive market schemes to attract customers, scores of financing schemes are trying to
attract the low and the middle income groups. After sales can go take a jump.

  
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Buyer behavior compounds the problem. Customer care is often taken for granted. During the
sale, what¶s top of mind for consumers is price. And, ofcourse, the brand name. Jyoti Mitra,
Manager at Vijay Sales, one of the biggest dealers of consumer durables in Mumbai
says,³The quality of after-sales-service is not a factor during the sale. Customers only care
about the brand and the price.´ This applies particularly to first-time customers. Small
wonder then, that companies fighting it out prefer to reduce the price and improve brand
image rather than focus attention on after sales.

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Privately, companies admit that customers, like Oliver Twist, are always asking for more. But
can you really blame the Indian customer for wanting to use products beyond their life span,
usually about 12 ± 15 years for a refrigerator, six for a washing machine? For a typical Indian
buyer of a consumer durable, it takes four to six months salary to purchase a durable.
³Consumers look upon a durable as a life-long investment,´ says Venugopal Dhoot, MD,
Videocon International. µAnd it gets increasingly difficult to please them.¶ At the same time
Dhoot is keenly aware of the importance of customer service. ³Service is the soul of the
consumer durables business and unless there is good after-sales-service, there can be no
sales,¶ he says. Garrick D¶Silva, CMD, Whirlpool Home Appliances, believes that ³the cost
of ensuring a high level of service is commensurate with high perceived quality of the brand.
The lack of it results in loss of brand preference, brand loyalty and thereby declining sales.´

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However top management in most cases does little else but pay lip service to after sales.
D¶Silva admits that there are problems. ³There is poor general infrastructure, lack of skill and
general service orientation in the non-dedicated service franchisees.´ Industry observers
couldn¶t agree more. µAfter-sales-service in industry is far below expectations,´ says Puliyel.
³It¶s usually second or third hand service without adequate supervision.´ When service is
carried out by franchisees who are often ill-trained, ill-equipped and have little contact with
the company, there is not much that you can really expect, can you?

!   '(

Generally, after-sales-service is more organised and efficient in the automotive sector where
the consumer is willing to pay for it. Read: service in itself is a profitable wing of the
company. Cars require high value products and they are bought by well-to-do customers.
Dealers also make fat margins selling accessories which can cost a customer anything from
Rs 5000/- upwards. Besides, car owner often opt for a second or third car and/or replace their
cars. ³Cars are a status symbol and it¶s is far more likely that a person will change his car
rather than his air-conditioner,´ says Sanjay Kadekar, Senior Manager, Used Cars, Sai
Service, one of the biggest car dealers.

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It¶s not as if consumer durable companies aren¶t doing anything. Whirpool in order to control
this major function, now operates centralised call centres ±such centres has already been
opened in the metros. Companies like Onida, Samsung and Bajaj Electricals plan to move
towards operation exclusive service centres. And companies like Kodak and Godrej GE have
built a database of customers going as far back as several years ± tracking advertising, after-
sales-service and customer feedback, a practice common in the automotive industry.

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Finally, culture counts. How many organisations actually quantify the implications of just one
customer moving away? For example, in the US, even a small pizza outlet would calculate
the loss due to the loss of one customer and this could amount to as much as $12,000 per
annum. Losing an automobile customer on the other hand could cost as much as $ 220,000.
Says H. Pradeep, associate Vice President, Research International, ³There is a service
orientation in the automotive industry which has been built up over the years, unlike in the
consumer durables industry.´
This culture is set by top management. If customer service is a priority, the bad news will
filter up to them. Right now the situation is so bad that if a customer has a problem with the
service he will find it difficult to talk to even the manager of the outlet. Only companies
interested in hearing the bad news will hear it.