W15586
MAHINDRA FIRST CHOICE SERVICES: CREATING A VALUE
PROPOSITION
Professors Rusha Das, Amit Shrivastava and Arun Pereira wrote this case solely to provide material for class discussion. The
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Copyright © 2015, Richard Ivey School of Business Foundation
Version: 2015-12-18
Alok Kapoor, marketing head of Mahindra First Choice Services Ltd. (MFCSL), was thinking about the
firm’s future course of action. MFCSL provided the whole range of aftermarket services for automobiles,
including repairs, routine maintenance and spare parts. Established in 2008, MFCSL had, by 2014,
created a network of 28 company-owned and company-operated (COCO) workshops and had a turnover
of ₹300 million.1 Kapoor was well aware that MFCSL’s revenue was miniscule compared with the
predicted worth of the automobile aftermarket business in India, which was pegged at ₹120 billion by
2014.
The automobile industry in India was not doing very well; yet, MFCSL’s parent company, Mahindra and
Mahindra (M&M), had very high expectations of it. These expectations could be met only by creating a
nationwide network of workshops. The company needed to create a unique customer value proposition
and motivate customers to outgrow the habit of relying on local garages. Kapoor and his team needed to
ensure a consistent brand positioning that could gel with M&M’s brand image. The positioning also
needed to be flexible enough to allow for local requirements. There was no precedent for Kapoor’s
mandate — there was no model that he could learn from. It was not clear what exactly customers needed
from a service workshop. The team also did not have the luxury of time. They had only a couple of
months to decide on their brand strategy and begin its execution.
THE INDIAN AUTOMOTIVE AFTERMARKET
The Automotive Aftermarket Industry Association (AAIA) defined the automotive aftermarket as
consisting of products and services bought after the original sale of the vehicle, including replacement
parts, accessories, lubricants, appearance products, service repairs and the tools and equipment necessary
to perform repairs.2 The industry was experiencing good growth, largely because consumers were holding
on to their cars for longer periods and also because margins on new car sales were decreasing.
1
All currencies are in Indian rupees (INR) (₹) unless otherwise stated. CA$1=₹55.67 as of September 1, 2014.
Ramesh Mangaleswaran and Ananth Narayan, “Scaling the Indian Automotive Aftermarket: Path to Profitable Growth,”
McKinsey & Company, CII Auto Serve Conference 2012, November 16, 2012.
2
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The automobile aftermarket comprised two main segments — spare parts and service. The total parts
aftermarket in India was estimated at approximately ₹280 billion (see Exhibit 1), while the services
segment was pegged at approximately ₹100 billion in 2012/13. The parts market was expected to grow at
9 to 11 per cent up to fiscal year 2015, to reach approximately ₹370 billion, while the services market was
predicted to reach approximately ₹130 billion.3
The production of parts was divided among original equipment manufacturers (OEMs), original
equipment suppliers (OESs) and generic manufacturers. While OEMs largely relied on their own
distribution networks, selling parts through directly owned or franchised dealers, the independent channel
had grown considerably. OESs could both supply OEMs directly and use independent distributors and
thus had an edge.4
The services business was split among OEM-owned workshops, OEM-authorized workshops, OES
workshops, multi-brand chains and independent garages. However, there were clear indications of an
industry trend toward consolidation. Research firms’ interviews with retailers suggested that return on
capital employed (see Exhibit 2) had declined largely as a result of reduced margins, rising inventory and
the ever-increasing complexity surrounding spare parts. Multi-brand service centres were expected to
double in number, exceeding 2,000 by 2018.5
This situation provided a huge opportunity for firms such as MFCSL to enter the automotive aftermarket
business. Industry experts also believed that although the service markets were fragmented, there was
huge scope for consolidation, due to recent advances in vehicle technology. This possibility had two clear
implications: first, servicing such vehicles would require a high upfront capital expenditure, which would
not be economically viable for unorganized workshops; and second, spare parts retailers could expect
additional volumes at attractive margins from a new range of vehicle electronic products.
Comparison with the Global Aftermarket Business
According to industry reports, the global aftermarket business was projected to rise to €700 billion by
2015.6 In mature markets, OEM-authorized workshops controlled more than 50 per cent of the business.
The immediate threat was from OES workshops and the use of the Internet as a sales channel for spare
parts and accessories. For OEMs, the aftermarket business was a major source of profits. In Germany, the
aftermarket contributed only 23 per cent of the revenue but 54 per cent of the profits. Interestingly, the
new-car business contributed only 11 per cent of the profits.7 For most Indian OEMs, the numbers for the
aftermarket business were insignificant.8
The business drivers in Western Europe included branding, service quality, response time, originality of
spares and innovative services. In India, the two main factors were the cost of service and the availability
of parts. Cost was an important factor for Chinese customers, who also placed an emphasis on response
time. Overall, the Indian market was very similar to the East European market. The average life of a car
was 10 years or less in most developed countries; in India, the average was 17 years.
3
Ibid.
Automotive Component Manufacturers Association of India, “Indian Automotive Aftermarket Study Book, 2011, and White
Paper on Legislative Improvements to Combat Counterfeiting,” February 2011.
5
Capgemini Consulting, “The Aftermarket in the Automotive Industry: How to Optimize Aftermarket Performance in
Established and Emerging Markets,” Report, 2010.
6
“Sharing Knowledge on the Automotive Industry,” KPMG Report, 2009; “Automotive After Sales 2015,” Arthur D. Little
Report, 2008.
7
Ibid.
8
Ibid.
4
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The aftermarket business was clearly driven by the number of cars on the roads. In terms of both the car
population and the per capita ownership of cars, India was a significant laggard. According to data from
the World Bank, in 2009, India ranked 108 on the list of cars owned per 1,000 people. The ratio for both
India and Pakistan stood at 18 cars per 1,000 people. Even Afghanistan was ahead at 26, and Sri Lanka
still further ahead at 47. San Marino topped the list with a ratio of 1,271 per 1,000 people and the United
States ranked third at 803 cars per 1,000 people.9
According to three reports — the Capgemini report “The Aftermarket in the Automotive Industry: How to
Optimize Aftermarket Performance in Established and Emerging Markets,” 2010; the KPMG report
“Sharing Knowledge on the Automotive Industry,” 2009 and the Arthur D. Little report “Automotive
After Sales 2015,” 2008 — by 2018, the expected reductions in the number of outlets of distributors/semi
wholesalers was close to 6 per cent; for small retailers, 30 per cent; for independent unorganized garages,
15 per cent.
Starting a workshop was relatively easy in India. A mechanic with two to three years of experience could
easily set about repairing C segment cars (cars with engines that range from 1300cc to 1600cc) with
minimal capital investment. C segment cars did not require specialized repair equipment, and spurious
spare parts for these cars were easily available. On the other hand, cars sold in the United States and the
European Union required specialized equipment to conduct repairs, and their electronic and software
components were of a higher level. Thus, the capital cost to start a workshop in these markets was much
higher than in India, which resulted in a lower degree of fragmentation in the United States and the
European Union compared with India (see Exhibit 3).
THE MAHINDRA GROUP
The Mahindra Group was one of India’s largest corporate houses. A US$16.7 billion multinational
conglomerate, in 2013, it had a total employee strength of more than 180,000 in 100 countries. The
group’s diverse business interests spanned 18 industries, including aerospace, automotive, construction
equipment, energy, finance and insurance, information technology, leisure and hospitality, and steel. The
Mahindra Group figured in the 2009 Forbes list of the “Top 200 Most Reputable Companies” in the world
and the “Top 10 Most Reputable Indian Companies.” It also won the Financial Times’ “Boldness in
Business” award in the emerging markets category in 2012.
The Mahindra Group entered the business of pre-owned cars in 2001. It set up its aftermarket business
(catering to the post-purchase needs of car owners) in 2008, with the primary aim of creating a business
ecosystem for pre-owned cars that mirrored the ecosystem for new cars in terms of sales, service and
spares. The Mahindra Group’s aftermarket business comprised two separate companies, Mahindra First
Choice Wheels Limited (MFCWL), which focused on pre-owned car sales and purchase, and MFCSL,
which was in the business of multi-brand car servicing.
In 2012/13, the market size for used cars equalled that of new cars and was growing rapidly; however,
only around 15 per cent of used car transactions took place in the organized sector. MFCWL’s aim was to
professionalize and organize the pre-owned car industry in India so that customers could trust vehicle
quality and service. In 2013/14, MFCWL had 320 franchisee networks in 160 cities across India and sold
60,000 vehicles.
9
The World Bank, “World Bank Data: Motor Vehicles per 1,000 People,” http://data.worldbank.org/indicator, accessed
August 27, 2011.
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ENTERING THE AFTERMARKET SPACE
The Mahindra Group set up MFCSL in April 2008 to increase its presence in the automotive aftermarket
space and take advantage of India’s burgeoning passenger car population. Its main reasons for entering
this market space were to fill the demand-supply gap, fill the need-service gap and to provide car
servicing to complement the business of MFCWL.
Filling the Demand-Supply Gap
The car service market in India was growing rapidly. A 2008 study carried out by a global research
company for the Mahindra Group projected that India’s car servicing business would grow to ₹120 billion
by 2014. New investment in service capacity expansion by original equipment dealers would not be
sufficient to meet the future needs. In advanced economies, the car service market was shared equally by
three types of players — original equipment authorized dealers, independent garages and multi-brand
organized chains. The study forecasted that India would have a similar market configuration by 2020.
Filling the Need-Service Gap
The study also identified critical gaps between customer expectations and services, in terms of quality,
speed, trust and overall experience (see Exhibit 4).10
Providing Car Servicing Support to Complement Its Business
Initially, keeping in view the benefits of offering immediate car refurbishing services to MFCWL’s
customers, MFCSL began operating COCO workshops at MFCWL showrooms. However, MFCSL
eventually decided to expand its operations, setting up 11 independent COCO workshops. Meanwhile,
MFCWL expanded very rapidly through the franchisee channel, setting up more than 300 franchisees in
four years and shutting down all its COCO workshops.
Around the same time that MFCSL was first set up in 2008, two other companies also entered the arena,
My TVS, by the South India-based TVS Group, and Carnation, by the former managing director of
India’s largest car maker, Maruti Suzuki India Limited. Although the three companies were in the same
business of setting up a chain of multi-brand car servicing centres, each adopted a different route from
2008 to 2012. My TVS chose to expand through the franchisee channel, focusing on a few cities in south
India with small-format workshops. Carnation expanded very rapidly, setting up in quick order 25 largeformat, company-owned workshops. On the other hand, MFCSL’s expansion, under the leadership of its
chief executive, Y.V.S. Vijay Kumar, was gradual and slow; it proceeded cautiously, using this time to
learn the nitty-gritty of the new business. Within three years of its inception, MFCSL had gained a clear
idea of customer needs, the optimal format size and workshop location in a given city, attractiveness of
various customer segments and business parameters.
In contrast, My TVS’s and Carnation’s footprints were shrinking, in spite of both their rapid scale up in
the initial stages and much higher investments. Unlike the other players, MFCSL remained focused on
category A and B cars (cars in the range of ₹300,000 to ₹800,000), individual car owners and mechanical
repairs. It invested in skill development (establishing a technical training centre for its technicians in
10
Mahindra First Choice Services, Company Research Report 2008.
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Hyderabad in 2012, which was later relocated to Bangalore), implementing robust business processes and
building an efficient spare parts supply chain.
In 2013, MFCSL had 28 COCO workshops in 18 cities and planned to expand through the franchisee
channel at the rate of 100 additional workshops every year until 2017.
All multi-brand workshops priced their service offerings more or less similarly. Their prices were
typically 15 to 20 per cent lower than OEM workshops, but considerably higher than local garages. The
sale of spare parts was a grey area. Given the considerable information asymmetry, the spare parts pricing
showed no fixed pattern across the different types of workshops. However, like OEM workshops,
MFCSL and the other multi-brand setups had a uniform spare parts pricing policy.
TYPES OF SERVICES OFFERED
MFCSL’s business offerings comprised four types of services:




Preventive Maintenance Service (PMS) — regular services
Running Repairs (replacement or repair of mechanical parts due to damage from wear and tear or
very minor accidents)
Minor Denting and Painting (MDP) jobs
Value Added Services (VAS), such as car polishing, cleaning, grooming, etc.
Typically, car owners residing within a five to seven kilometre radius of an MFCSL workshop were more
likely to use its car services. Customers living farther away were more likely to be affected by
“psychological distance” and preferred free pick-up and drop-off services, although car owners in large
cities were less distance-phobic. Consequently, MFCSL identified a geographical catchment area with a
radius of seven to eight kilometres as the ideal market area for its workshops. Moreover, to justify its
business case, an MFCSL workshop with a capacity of 15 bays needed a catchment area in which the
population had more than 50,000 cars.
On average, owners of cars (typically cars that were out of warranty) used the services of MFCSL
workshops on three to four occasions over a period of two to two-and-a-half years before they sold their
vehicles. At MFCSL, the potential revenue from a customer over a vehicle’s entire lifecycle was ₹18,000
to ₹20,000, if customer retention was 100 per cent. However, MFCSL’s customer retention rate was 40
per cent, and its average revenue from a customer ranged between ₹5,000 and ₹8,000. Going forward,
MFCSL expected to earn a gross margin of 35 per cent per sale on average and a net margin of 10 per
cent by 2018.
Due to the “catchment orientation” of the business and its low customer life cycle value, it was a
marketing challenge to acquire customers while keeping the customer acquisition cost at justifiable levels
(less than ₹250 per acquisition). Moreover, car servicing was hardly a glamorous or attractive proposition.
According to a 2013 study carried out by a global research firm for the company, each month, only
90,000 searches were conducted for car servicing and related terms in India, whereas the number of cars
on Indian roads was close to two million.
In 2013, MFCSL’s overall capacity utilization was 45 per cent, and it had acquired approximately 40,000
new customers. Of that number, its online efforts (i.e., its own website and its presence on Facebook,
Twitter and Google Plus, where customers could make appointments and view campaigns and offers) had
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brought in only 1,000 customers. The balance of customers were acquired through on-the-ground
activities, such as conducting free check-up camps in residential complexes, data collection at fuel
stations, data sourcing and newspaper inserts announcing seasonal schemes (see Exhibit 5). However, the
productivity of tele-calling through in-house call desks and an outsourced call centre remained very low;
the conversion rate was less than 1:15. MFCSL’s total marketing spend on acquiring 40,000 new
customers was ₹24 million, and the total manpower cost for acquisition activities was approximately ₹25
million.
In its earliest interactions with prospective car owners, MFCSL’s field promoters or tele-callers offered
potential customers value passes, which allowed them to save on various services. The company had also
tried promoting sales through third-party acquisitions. In this model, a micro-sized marketing agency sold
value passes (discount coupons for car services) through temporary workers, mainly college interns.
MFCSL also had several annual loyalty programs, which were generally pre-paid schemes for a year.
MARKET SEGMENTATION
For MFCSL, customer segmentation required a detailed understanding of the factors affecting the
consumer’s decision-making process for selecting a service workshop or provider. Broadly speaking, the
end consumers in the automotive aftermarket could be divided into business owners, fleet owners and
private owners. However, these divisions were not the only criteria for segment selection. Other important
factors were the life cycle stage of the car (see Exhibit 6), the car maker, the owner’s service needs (see
Exhibit 7) and the owner’s personality type (see Exhibit 8). Car owner personality types could be divided
as follows:
Gearheads: They were knowledgeable about cars and wanted the best for their cars; they were explorers.
They were interested in minute details and gathered information about cars, new offerings, new
technology, etc. They demanded the best value for their money.
Flaunters: These were attention seekers or showstoppers. They were switchers, influenced by new
technologies and products and by their social circles; they were prepared to spend a lot of money on their
cars.
Epicures: They had refined tastes and generally were affluent or earned high salaries.
Functionalists: They were value seekers; they typically spent less on their cars and were not up to date on
new developments (see Exhibit 9).
COMPETITION
My TVS: One Stop Shop for Servicing and Spare Parts
Business Overview: My TVS started operations in 2003 with 30 franchise outlets. It had 16 COCO
workshops and 55 franchisees in 2010. It subsequently moved away from its focus on franchises and
increased the number of COCO workshops to 33. Of these, five were Tata-authorized outlets. The
company had three joint ventures in Gujarat, Kolkata and Kerala, and one was planned for Delhi.
Operating Model: My TVS focused on spare parts supply, manpower training and branding. It had a
training centre for technicians in Madurai, a city in south India. My TVS fixed the prices on services but
its franchisees enjoyed a high degree of operational autonomy. Each franchisee was required to have
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2,500 to 3,500 square feet of space per outlet. Its COCO workshops had 24 bays on average, while
franchisees typically had 10 bays (see Exhibit 4).
Carnation: Multi-brand Auto Solution
Business Overview: Carnation began operations in 2008 with 34 COCO outlets (pre-owned car sales
outlets and workshops). The business comprised service operations, points of contact (POCs), insurance,
body shop repair and spares. Its workshops were spread across the Northern, Western and Southern
regions. However, Carnation eventually closed down its spare parts and insurance activities and shifted its
focus to general repair and body shop repair.
Operational Model: It started with 24 COCO service workshops; however, only 17 of these were
operational. The company’s focus was mainly on expanding through franchisees. Carnation converted its
existing COCO workshops into franchises and had no plans to expand its COCO outlets. The Northern
region generated the maximum revenue with seven existing and two closed outlets. The Western region
earned decent revenues with three existing and three closed outlets. The Southern region performed well
with seven existing and two closed outlets.
CarZ: High-tech Service Centre for All Car Servicing Needs
Business Overview: CarZ was launched in 2008 with 17 COCO workshops providing service operations,
accessories, POCs, insurance and body shop repair. Eighty per cent of its outlets were in Andhra Pradesh,
and the rest were in other Southern states. It started off strongly in Hyderabad, but a lack of clarity on the
way forward and poor process controls restricted its operations.
Operating Model: The company’s original goal was to be a one-stop shop for all car-servicing needs. It
had planned to expand to more than 200 small-format COCO workshops with six to eight bays for outlets
in Tier 2 and Tier 3 towns and cities.11 Its main focus was on premium cars and body shop repairs (see
Exhibit 10).
OEMs
MFCSL intended to differentiate itself from OEMs in a few key areas: First, it relieved multi-car owners
of liaising with different OEM workshops for different cars, thereby saving them time and the hassle of
dealing with multiple vendors. Second, it relieved consumers of the stress of searching for vendors,
dealing with different price propositions and comparing service offerings each time they needed a service.
Third, MFCSL’s primary focus was on repairing a car rather than merely replacing parts, which was
largely the approach taken by OEMs; thus, MFCSL offered the consumer a better value-for-money
proposition.
Independent Garages
Independent garages competed in this space by providing convenient service at lower price points.
MFCSL sought to counter this competitive threat by offering better service quality and skilled manpower,
11
The tier classification of Indian cities is based on population size and other factors such as real estate development and
infrastructure. Maps of India, www.mapsofindia.com/maps/india/tier-1-and-2-cities.html, accessed July 11, 2014.
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using genuine parts, honouring delivery time commitments and leveraging consumers’ trust in the
Mahindra.
THE POSITIONING CHALLENGE
MFCSL’s turnover in 2012 was approximately ₹100 million, and grew to ₹300 million in 2013. In early
2014, the company expected to top the list of India’s multi-brand organized car service chains.12 It
planned to achieve a turnover of ₹10 billion by 2018. Given its ambitious plans, the challenge was to
build a sustainable brand positioning amid intense competition and continue its brand-building
momentum.
It was important for MFCSL to have a general sense of people’s perceptions and expectations of a service
centre in order to better position itself in the aftermarket space. It decided to evaluate the concept of “Fast
Assured Service in Time” (F.A.S.T) as a new position for its service stations in terms of comprehension,
relevance and suitability. As part of its research, it conducted three focus group discussions in Mumbai
and Nasik (see Exhibit 11). Based on feedback from lapsed, existing and new users, MFCSL tested
different positioning platforms through various print advertisements (see Exhibit 12). It also conducted
research on the possible segmentation variables in four geographic regions — Mumbai, Nasik, Pune and
Vapi — and arrived at the top 10 segments (see Exhibit 9). The challenge before the company was to
decide on a value proposition that was consistent in its imagery and impact (see Exhibit 13) — and would
convert a price-conscious individual into a brand- and service-oriented customer.
12
Bennet, Coleman & Co. Ltd., “Mahindra First Choice Services to Open 450 Outlets in 3 Years,”
http://articles.economictimes.indiatimes.com/2014-05, 09/news/49742821_1_outlets-mahindra-first-choice-services-100crore, accessed May 9, 2014.
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EXHIBIT 1: THE INDIAN AUTOMOTIVE PARTS AFTERMARKET
The Indian automotive parts aftermarket, estimated at ~ ₹280 billion is dominated by the twowheeler segment.
Indian Market
Top four states in each segment
Total Market size ~ ₹280 billion
lll
Source: Created by the authors, adapted from Ramesh Mangaleswaran and Ananth Narayan, “Scaling the Indian
Automotive Aftermarket: Path to Profitable Growth,” McKinsey & Company, CII Auto Serve Conference 2012, November 16,
2012.
EXHIBIT 2: MAHINDRA GROUP’S RETURN ON CAPITAL EMPLOYED, 2007 AND 2012 (%)
Outlet
Independent Retailers
Independent National Distributors
Independent Garages
OEM Dealership Service Centres
FY 2007
25–30
12–16
22–25
18–22
FY 2012
15–20
24–30
12–15
14–18
Note: FY = fiscal year; OEM = original equipment manufacturer
Source: Company data.
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EXHIBIT 3: VALUE CHAIN FOR THE INDIAN AUTOMOTIVE PARTS AFTERMARKET
Parts
producers
OEMs
Parts
distributors
OEM
Branded
OEM sales
units and
parts
Market share
55%
Value~ ₹16.5b
Market share
34%
Value~ ₹50b
Retail
ASSP
Customers
Owned and
franchised
service
Mainly
OEM or
OES
Branded
Market share
50%
Value~ ₹17.5b
OESs /
Tier1
Multi-brand
service
Market share
39%
Value~ ₹56b
Market share
45%
Value~ ₹13.5b
Market share
27%
Value~ ₹ 39b
Fleet
Market share
4%
Value~ ₹1.4b
Independent
parts dealers
Generic
Manufacturers
Business
Retailers:
Largely
unorganized
Small
garages / gas
stations
Private
Market share
46%
Value~ ₹16b
Note: OEM = original equipment manufacturer; b = billion; OES = original equipment supplier; ASSP = Application Specific
Standard Product
Source: Created by authors, adapted from Ramesh Mangaleswaran and Ananth Narayan, “Scaling the Indian Automotive
Aftermarket: Path to Profitable Growth,” McKinsey & Company, CII Auto Serve Conference 2012, November 16, 2012.
EXHIBIT 4: A COMPARISON BETWEEN ORIGINAL EQUIPMENT DEALERS
AND INDEPENDENT GARAGES
Parameter
Trust
Speed
Convenience
Price
What Original Equipment Dealers Lacked
Transparency (no shop floor access to
customers); relationship management (no
proper retention efforts)
Promptness (customers were unhappy about
long queues and delays)
Walk-in facility (customers had to book service
appointments in advance; they were also
dependent on the dealer and their choice of
location)
Reasonable prices (customers found the price
high and inflexible as no customization was
offered)
What Independent Garages Lacked
Skills, equipment, supply of quality spares
Delivery on committed time
(largely due to skill and spares supply gaps)
Network (customers could access only one
workshop)
Price authenticity (no published price chart was
available)
Source: Company data.
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EXHIBIT 5: MAHINDRA FIRST CHOICE SERVICE LTD. PROMOTIONAL MATERIAL
Source: Company files.
EXHIBIT 6: DISTRIBUTION OF THE LIFE CYCLE STAGE OF A CAR AND CONSUMER PROFILES
ACROSS MUMBAI, RAIPUR, PUNE AND VAPI
MUMBAI
Life Cycle Stage of a
Car
%
Within Warranty
21
Satisfied with OEMs
Dissatisfied with
OEMs
Dissatisfied with IGs
3
RAIPUR
Consumer
Profile
%
Life Cycle Stage of a
Car
Flaunters
4
Within Warranty
18
Flaunters
1
16
Epicures
38
29
Epicures
31
18
Functional
58
Satisfied with OEMs
Dissatisfied with
OEMs
15
Functional
68
Dissatisfied with IGs
4
%
Satisfied with IGs
18
Satisfied with IGs
15
Subsequent Owners
Use OEMs for enginerelated work and IGs
for other works
23
Subsequent Owners
Use OEMs for enginerelated work and IGs
for other works
17
1
PUNE
Life Cycle Stage of a
Car
Within Warranty
%
20
Satisfied with OEMs
Dissatisfied with
OEMs
33
Dissatisfied with IGs
14
16
Consumer
Profile
%
2
VAPI
Consumer
Profile
Flaunters
Epicures
Functional
%
Life Cycle Stage of a
Car
10
Within Warranty
34
56
Consumer
Profile
%
35
Flaunters
6
Satisfied with OEMs
Dissatisfied with
OEMs
13
Epicures
24
Functional
70
Dissatisfied with IGs
9
Satisfied with IGs
9
Satisfied with IGs
Subsequent Owners
8
Subsequent Owners
22
%
19
2
Note: OEM = original equipment manufacturer; IG = independent garage.
Source: Created by the authors using MFCSL Company Research Report on life cycle stage of a car and consumer profiles,
2013.
This document is authorized for use only in Prof. Biranchi Narayan Swar's MARKETING OF SERVICES 6.29.2021 at Management Development Institute - Murshidabad from Jun 2021 to Dec
2021.
Page 12
9B15A049
EXHIBIT 7: SERVICE NEEDS IN MUMBAI, PUNE, RAIPUR AND VAPI
Service Need Status
OK — Service not due
OK — Service due
OK — Not due
Not OK — Suspension, Steering, Tire
Not OK — Shock Absorber Issue
Not OK — Painting Required
Not OK — Electrical Lighting Issue
Not OK — Door Problem, Tire Problem
Not OK — Break-related
Not OK — Balancing
Mumbai
77
3
1
1
1
6
1
4
1
3
Pune
67
3
0
3
2
8
3
8
0
6
Raipur
72
13
0
1
0
4
1
6
1
1
Vapi
69
2
0
2
2
6
4
9
0
6
Source: Created by the authors using MFCSL Company Research Report on Segmentation Model.
EXHIBIT 8: INDIAN AUTOMOTIVE AFTERMARKET CUSTOMER SEGMENTATION
Segment 1
Ownership Category
Individual Car Owners
Segment 2
Car Life Cycle
Stage
Within
Warranty
Corporate Fleet
Post-warranty
Taxi Fleet
Subsequent
Ownership
Segment 3
Segment 4
Car Make
Service Needs
Maruti, Hyundai,
Mahindra and Tata
Other than Maruti,
Hyundai, Mahindra,
Tata
Segment 5
Owner Personality
Type
Mechanical Repair,
Overhaul
Gearhead
Minor Denting and
Painting
Flaunter
Epicure
Insurance
Functionalist
Source: Created by the authors using company data.
EXHIBIT 9: MAHINDRA FIRST CHOICE SERVICES LTD.’S TOP 10 SEGMENTS IN MUMBAI, NASIK,
PUNE AND VAPI
Segments
X Axis
Y Axis
Z Axis
%
1
2
3
4
5
6
7
8
9
10
Within Warranty
Satisfied with OEM
Dissatisfied with OEM
Satisfied with IG
Satisfied with OEM
Subsequent Owners
Dissatisfied with OEM
Within Warranty
Subsequent Owners
Dissatisfied with IG
Functionalists
Functionalists
Epicures
Functionalists
Epicures
Functionalists
Functionalists
Epicures
Epicures
Functionalists
OK, service not due
OK, service not due
OK, service not due
OK, service not due
OK, service not due
OK, service not due
OK, service not due
OK, service not due
OK, service not due
OK, service not due
12.6
9.6
7.7
7.3
6.13
5.0
4.6
4.6
4.6
3.8
Note: OEM = original equipment manufacturer; IG = independent garages.
Source: Company report on segmentation model.
This document is authorized for use only in Prof. Biranchi Narayan Swar's MARKETING OF SERVICES 6.29.2021 at Management Development Institute - Murshidabad from Jun 2021 to Dec
2021.
Page 13
9B15A049
EXHIBIT 10: SERVICES AND VALUE PROPOSITIONS FOR MY TVS AND CARZ
MY TVS: One Stop Shop for Servicing and Spare Parts
Service Offering
Services
• General repairs and parts
Multi-brand servicing
replacement
Value Proposition
• Authorized repair
• Quality at a lower price
• Network convenience
• 24/7/365 service across the country
• Focus on quality of service
• Subscription model
• Breakdown assistance
Emergency repairs
(including towing, taxi and
assistance
ambulance)
• Legal services
CARZ: High-tech Service Centre for All Car Servicing Needs
Service Offering
Services
Value Proposition
• General repairs and parts
• Preventative maintenance and running
Multi-brand servicing
replacement
repairs
• Almost all models of cars
• Minor and major accident repair • 24/7 breakdown assistance, free pickBody shop repair
covered by insurance
up and drop-off, monthly online offers
Source: Company data.
EXHIBIT 11: FACTORS AFFECTING THE CHOICE OF A CAR SERVICE STATION IN MUMBAI
AND NASIK
Rank
1
2
3
4
Rank
1
2
3
4
5
6
Rank
1
2
3
Existing Users
Mumbai
Spacious and convenient location/ area of service station
Spare parts availability, price and wide range of accessories
F. A.S.T., qualified and trained staff, staff behaviour.
Add-ons (emergency towing facility, 24/7, schemes,
refreshments, etc.), proof of before and after.
Non-Users
Mumbai
Transparency
Skilled workers
Spare parts availability and advanced machinery
F.A.S.T, proximity and follow-up
Cleanliness
Good waiting area
Lapsed-Users
Mumbai
Skilled mechanics/ experts
Modern technology
Reasonable pricing
4
Spare-parts availability
5
6
7
Convenient location of the service centre
Transparency
F.A.S.T
Nasik
Honesty
Skilled mechanics and efficiency
Checklist
Genuine spare parts and availability
Nasik
Reasonable price
Transparency and honesty
Qualified engineers
Prompt (“time commitment”)
Spare parts availability
Spacious
Nasik
Transparency and honesty
Skilled and professional mechanics
Fair pricing
Spare-parts availability with
guarantee
F.A.S.T
Centre location
Modern Technology
Note: F.A.S.T = Fast Assured Service in Time
Source: Mahindra First Choice Services Ltd. corporate presentation on project F.A.S.T
This document is authorized for use only in Prof. Biranchi Narayan Swar's MARKETING OF SERVICES 6.29.2021 at Management Development Institute - Murshidabad from Jun 2021 to Dec
2021.
Page 14
9B15A049
EXHIBIT 12: MAHINDRA FIRST CHOICE SERVICES LTD. PRINT ADVERTISEMENTS FOR TESTING
DIFFERENT POSITIONING PLATFORMS
Positioning Iterations 1 – 3 (Using the concept
of F. A. S. T)
Positioning Iteration 4
Positioning Iteration 5
Source: Company files.
EXHIBIT 13: MAHINDRA FIRST CHOICE SERVICE LTD. CUSTOMER TESTIMONIALS
“Right from pickup to delivery the customer service has been very efficient. Utmost care has been taken
in identifying the problems with the vehicles. Staff are very warm and courteous. Surely coming back for
future maintenance.” – June 15, 2013
“I have visited your workshop this morning and its work has been completed by 11 p.m. and your advisor
has given feedback on future replacing parts and its cost also. It is good.” – June 21, 2013
“Service advisors are prompt, active service, courteous staff and on time delivery.” – June 29, 2013
“This is my second visit to MFCS. I am really impressed with the service quality. I gave them my original
documents and they kept it very safe. Would recommend MFCS to everyone.” – June 14, 2013
Source: Company files.
This document is authorized for use only in Prof. Biranchi Narayan Swar's MARKETING OF SERVICES 6.29.2021 at Management Development Institute - Murshidabad from Jun 2021 to Dec
2021.