Jagannath University

Assignment
on
Michelin Fleet Solutions: From Selling Tires
to Selling Kilometers
Course Name: Service Marketing
Course Code: MKT-4103

Submitted to:

Mrs. Sabrin Sultana

Assistant Professor
Department of Marketing
Jagannath University

Submitted by:

Voice of Marketing
Department of Marketing
Jagannath University

Submission Date: 16.05.2022

 Group Name: Voice of Marketing
No. Group Member Id No.

1 Susmita Roy B170204009

2 Al Abir Md Arif Islam B170204022

3 Shadat Hossain Shakib B170204030

4 Sourabh Das B170204031

5 Md. Sany Sarker B170204032

6 Al Rafi Ahmed Nipun (Leader) B170204035

7 Farah Faiaz Kazi B170204065

8 Istihak Ahamed B170204085

9 Saif Ali Bhuiyan B170204086

10 Mahathir Mohammad Nahid B170204088

11 MD. Rakibul Islam Shakib B170204059

1. Case Summary
Michelin is a leader in the tire industry worldwide. Michelin introduced a
comprehensive tire management solution to major European transport companies
and was renamed the Michelin Fleet Solution (MFS). With this new introduction
the company intended to sell not only tires but also sell miles. This innovation
opened the doors to a new dimension of the company and enabled the company
to enter into a number of opportunities to provide services and solutions.
Familiarity is new to the market and allows Michelin to take advantage of a unique
opportunity to diversify its business operations. The company will only be able to
separate itself from the tire business.

Michelin Fleet Solution is a positive step taken by the company's top management.
Managers' decision is caused by market fluctuations; a high level of attractiveness
exists in such a business. Michelin is already at the forefront of the market in tire
supply but the products offered are extremely priced and very expensive. The
service market in Europe has shown good prospects yet MFS cannot harvest them
successfully. It is a great gift for a company that serves its customers and there are
many opportunities for it to attract competitors and expand their Michelin market
share. What MFS offers is that if the tire purchased at Michelin gets old, then it will
be repaired at a lower cost, which means they will not need to buy a new one,
rather at a much lower price they can repair it. be like a new wheel.

Communication plays an important role in the MFS system as staff and staff need
to transfer information in the right way. First, the message is not effectively
transmitted to employees due to untrained employees. The level of
communication between other departments in the company is also not up to
standard due to changes in performance under their control. The company
previously operated only by selling tires, but now the company has also begun
offering its services. This change seems complicated to the company's employees
and they find it difficult to digest.Various departments of the organization are
concerned about the unpredictability of the program as they are not sure about
the future sale of the company. Longevity and tire replacement may have a
negative impact on company sales. MFS has not been able to have a clear idea of
the performance of MFS, and will be able to improve its market share in the
industry in the near future.

Michelin faces stiff threats from competitors in the tire market. Its main
competitors are Bridgestone and Goodyear. The organizations rivals were watching
everything Michelin did as MFS was a new step taken by the company. The system
was not only new but also enabled the company to provide services. It has a great
opportunity to be the first competing company and the only company that has the
opportunity to invest the potential money in the right market. Competitors will
soon see the potential for market capitalization with the help of these services.
Competitors may take steps to address the offer in the market. Therefore,
decisions should not be made hastily, but effectively. The company's decision-
making process had to be efficient enough to maintain a competitive advantage.

The company was not only concerned with internal matters but the company had
to reconsider its decision to dismiss. Distributors do not guarantee contractual
agreements with the company, which causes problems in company decision-
making. Company services may be considered uncommon, as costs will increase in
the company due to rising costs per tire as they may not be fully operational while
repairing them. Externally acquired companies also needed adequate training to
meet the standards set by the standards-keeping company. The company had to
train distributors on how to treat their tires. Only if Key Performance Indicators
(KPIs) are maintained in accordance with the standards, can they add an additional
2-5 years of life expectancy. The tire position also plays an important role in the
company's services and if the tire is not in the right place it will add additional costs
to the company. These guidelines were to be followed by distributors or service
providers to comply with the Key Performance Indicators (KPI).
2.Service marketing mix of this case
A service marketing mix is a combination of different marketing tools that
companies use to convey their organizational and product message to customers.
The marketing mix of these industries - Michelin's marketing mix product:

Michelin operated in the tire market, supplying high quality tires for trucks and
branded cars. It is referred to as a product-focused company. Michelin has become
a leading supplier of high quality tires especially in the trucking segment which is
the second largest market behind private cars.

Price in Michelin Marketing mix:

One thing about price is that it varies in product quality. Micin’s has adopted a
flexible pricing policy for its value-based products As it produces a wide variety of
products it is not possible to set a single pricing policy collectively. The company
has set different prices for different vehicles .Example: tires on off-road vehicles
are more expensive than used tires on road vehicles. Michelin faces stiff
competition from other companies and has adopted a competitive pricing policy to
benefit less in such competitive times. Although it counts only 5% of the cost of
truck travel .Frail and bus tires play an important role in road transport companies.
.The better quality of Michelin tires, the better the tires last longer. So depending
on the models and the need to use prices they also vary. They are different as the
roads will be less expensive than the off-road roads.

Michelin Location and Distribution Strategy:

The following distribution strategy for Michelin's marketing mix: Michelin originally
provided its assets to the parent nation. which makes the company look beyond
the horizon of the parent nation .Micin 's talk about a changing market almost
exclusively for the distribution of professional tires. brand. Distributors are local or
regional independent entrepreneurs on major networks. Among those distribution
networks is Euromaster. Michelin's distribution network was created in 1994.
Michelin sells their products on the net and that is why they know that they are
global players and successfully compete with other major players .Service services
everywhere in terms of quality supply.

Michelin promotion and marketing strategy:

The company believes in high profile when it comes to promotions. We find that
Michelin advertises herself in newspaper, television, radio, etc. This promotional
strategy in marketing markets provides full marketing access and product visibility.
Michelin believes that product quality will have a profound effect on the product's
mind.

People:

The director of Michelin Fleet Solutions began by pointing out the significant
progress made by Michelin 's soldiers .The training programs have produced their
first results, and now we are doing much better .The latest contracts should make
a profit. But they fear that the development of controlled vessels will lead to a
decline in sales in the exchange market .Some of them are still very angry that their
best performers were relocated to MFS three years ago, in the future we really
need to find ways to get help. better link actions and objectives.

Michelin tire industry process:

A tire is a sturdy, flexible rubber shell attached to the wheel arch. Tires provide a
grip to pull and act as a pillow for moving tires. Tires are found on car trucks,
buses, airplanes and other farm equipment. The ISC also urged Michelin to clarify
its contract structure .The consulting company has obtained more than 72
different contract versions that vary widely in content.

Physical evidence for Michelin:

Michelin is always innovating to facilitate the movement of people and goods.

style and size as different manufacturers produce different types of tire patterns.
3.Service quality dimension

Dimension Definition Example

Tangibility Appearance of physical Equipment of service center

facilities, equipment, personnel and available spare parts of
and written materials. service.

Reliability Ability to perform the promised Give the maximum quality

service dependably and service and ensure it that the
accurately. customer is satisfied with
service

Responsiveness Willingness to help customers Solve any kind of problem at

and provide prompt service. any time with best solution.

Assurance Employees knowledge and Best quality service people

courtesy and their ability to hired by the company.
inspire trust and confidence.

Empathy Caring ,easy access ,good Availability of service center

customer understanding and with easy communication.
individualized attention given
to customers
4. Gap Model Analysis:
In this case study, we will analyze the Gap models related to these circumstances
of Michelin Fleet Solutions.
If we look closely to the operations of Michelin Fleet Solutions regarding this
specific situation we will find some specific gaps, which we will discuss broadly.

Listening Gap:
Listening Gap is the difference between customer expectations of service and
company understanding of those expectations.
In this case, we see there are two models shown in the case , FRANCE & UK model
is much easier but the EUROPEAN ROLL-OUT model is very complex . This model
offer such as higher upfront cost, increased dependency & higher switching value.
Here, we see these were lacking regarding the company's service recovery
strategy. The company didn't take appropriate recovery mechanisms in place for
service failures, which caused inadequate service recovery gap.

Service design and standard gap :

The service design and standard gap is the difference between company
understanding of customer expectation and the development of customer – driven
service designs and standards.
In the result of 2002, only 5000 vehicles under contract out of an overall potential
of 250000 vehicles because this market accounted for 21% percent sells in Europe.
The client don’t see the extra value from MFS, they see the downwards in this
offer such as higher upfront cost , increased dependency & higher switching cost.
The Service Performance Gap:
The service performance gap is the discrepancy between the development of
customer-driven service standards and actual service performance by company
employees.
In this case, MFC have more than 70+ different contract version that each greatly
varying in content , serving different categories services. This kinds of huge
categorized contract makes a huge confusion and complexity. It creates the service
system slow even sometimes costly for different contract .
MFC have different model in EUROPE ROLL-OUT , that also makes complexity in
comparison to FRANCE & UK model. They use third party service provider &
monitoring them but it turned costly with mismanagement.

Communication Gap:
Communication Gap is the difference between service delivery and the service
provider's external communications.
Michelin’s sales forces had a very hard time selling the Michelin Fleet Solution. This
will more complex process than selling regular tires or any kinds of parts or
accessories. They are not ready without proper training campaign but they have to
face the situation . In this way they aren’t able to communicate with clients easily
even they don’t able to understand the core benefit outcomes from MFS.
5. Recommendation
Once the options have been developed and evaluated, recommendations are
made, on the basis of the most appropriate option that gives the company the
highest value and deals with the problem briefly. This recommendation is crazy,
which not only provides a solution to the problem, but also reflects the
implementation process and the steps that the organization must take to be
successful.

Michelin Fleet Solutions' strongest recommendation should cover key areas of how
the organization will use alternatives, what benefits it will get if it uses alternatives
and potential costs, which the organization will need to overcome or deal with, in
order to effectively use alternatives.

In addition, once the alternative has been chosen, the recommendation needs to
include what changes we will bring to the organization such as the 20 percent
increase in sales or profits from Michelin Fleet Solutions or the stability or increase
in market share. These factors are important to be mentioned in the
recommendation, in order to make them stronger and stronger and to allow
stakeholders / reader to connect the problem with the solution, which leads to a
better understanding. The recommendation also requires that we incorporate Plan
B, which, for example, if, for example, results are not produced in a systematic
manner, a second set of recommendations should be included in the plan, to allow
the organization to make rapid changes in the system. B, to avoid losses and
maintain the company's presence in the market.

Finally, under the recommendation, it is important to include the findings from the
past, in order to make the given Solution more acceptable. A good
recommendation, then, is to cover the findings from the past. This is important, as
it allows the student and participants to understand the facts proven, and the
results of the past such a recommendation are reaped, leading to further
acceptance and decision-making of the program that may need to be adopted to
avoid delays. and organizational resistance, while revolutionizing.
In fact, the set of recommendations given should also have an emergency plan, as
well as another action plan for both A and B programs. This makes the
recommendation stronger and more acceptable.

Overall, recommendations include, what, why, how and who features. So it is as

important as allowing the organization. Shareholders to clearly understand what
needs to be done, how it is needed, who the key players are and how it will be
used. In addition, the time required must be stated. This allows participants to
understand and determine the time and resources needed to successfully
implement the program.