Michelin - Services Marketing Management

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Table of Contents

Executive Summary        2

1        Analysis and Evaluation        3

2        Action Plans        4

Reference List        6

Executive Summary

Michelin is one of the world's three major tire manufacturers, its mission is to “contribute to the mobility of goods and people” (Wilson, A., Zeithaml, V. A., Bitner, M. J., & Gremler, D. D, 2012, p.551). Michelin in order to be able to continue to innovate, to provide customers with more efficient and more secure service. Launched in 2000 for large transport companies services--- Michelin Fleet Solution (MFS). In order to make MFS better development, Michelin decided to start selling kilometres instead of tires, which also means that Michelin changed its sales model.

MFS mainly for large transport companies in Europe. According to the survey, in Europe, road transport is the main mode of transport of goods in Europe, which accounts for 44% of the market, and this figure is still growing. On the other hand, MFS is also targeting the truck and bus tire industry (TB tires), TB tires are the world's second largest tire market, accounting for 27% of the world's tire sales market, Michelin, Goodyear and Bridgestone accounted for 18% of the market share. Relative to the car, trucks and bus tires need to be carefully maintained, because the tire road environment is complex. In the market environment and sales prospects, MFS has a good future market and prospects.

However, its results are disappointing. After three years of efforts, Michelin did not get the corresponding return. Michelin has invested a lot of money, technology and sales staff in the process, but the market has not improved much. MFS's main problems come from five aspects, the customer cannot understand the final value of MFS, salespeople do not have sales strategies, Michelin internal have differences on the marketing model of MFS, service providers quality of service is not uniform and the wrong cost estimate. The customer cannot understand the final value of MFS is the main problem leading to the failure of the entire program.

When there are problems, managers should go to solve them. For the five issues, managers can communicate with customers, train sales staff, internal coordination, provide professional skills to make services consistent and control costs or increase the budget.

1. Analysis and Evaluation

Its main problems are five, mainly in the customer, sales staff, internal, service providers and costs.

• Customer

Customers cannot understand the core values of MFS. Most customers are more concerned about the price of tires, rather than the long-term value that MFS brings to them. Prior to this, no tire company provided such a program, customers cannot understand and dare not try to use the results of MFS, they do not want to bear the loss of failure. This is the central issue of MFS, no customers to use this program, it will not bring any benefits to Michelin, which is the most people do not understand the key to MFS.

• Salespeople

The sales director provided a lot of excellent sales staff, but did not get good grades, and their tire expertise and experience did not provide good help to them. On the other hand, MFS marketing model is different with traditional marketing model, these salespeople do not have the experience to provide good evidence and reason to persuade customers.

• Michelin internal

Because MFS is not profitable, there is disagreement within Michelin. When an organization's internal opinion is unstable, it will only make their work harder. On the other hand, salespeople have also been squeezed out because they are selling a product that most people think is no future, this will also make their work harder and they will lose confidence in their products, when the sales staff to sell their own products without confidence is the worst result.