Custom Car Care case study

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INTRODUCTION TO MARKETING

CASE 4

CUSTOM CAR CARE

XAVIER INSTITUTE OF MANAGEMENT XAVIER INSTITUTE OF MANAGEMENT

BHUBANESWAR BHUBANESWAR

SUBMITTED

SUBMITTED TO: TO: SUBMITTED SUBMITTED BY:BY: PROF. JEEVAN ARAKAL

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Q1. What is the case situation? Q1. What is the case situation? A1

A1. Glenn Rozyck ! " #$ ye"% ol& '(y )%o* Sc"%+o%o(',. -e ! "n e*loye& e%!on.. Glenn Rozyck ! " #$ ye"% ol& '(y )%o* Sc"%+o%o(',. -e ! "n e*loye& e%!on. -e e!/"+l!,e& 0(!/o* 0"% 0"%e co*"ny /o %o1&e co*le/e n/e%o% "n& e2/e%o% -e e!/"+l!,e& 0(!/o* 0"% 0"%e co*"ny /o %o1&e co*le/e n/e%o% "n& e2/e%o% cle"nn' "n& %e!e%1"/on )o% c"%!. A! e% /,e c(%%en/ !cen"%o /,e co*"ny %o1&e! cle"nn' "n& %e!e%1"/on )o% c"%!. A! e% /,e c(%%en/ !cen"%o /,e co*"ny %o1&e! !e%1ce only on 3eeken&!. No3 /,e &le**" n Glenn4! *n& ! 3,e/,e% /o 5(/ ,! !e%1ce only on 3eeken&!. No3 /,e &le**" n Glenn4! *n& ! 3,e/,e% /o 5(/ ,! c(%%en/ 6o+ "n& (%!(e /,! +(!ne!! on " )(ll /*e +"!!.

c(%%en/ 6o+ "n& (%!(e /,! +(!ne!! on " )(ll /*e +"!!. Ben' n /,! +(!ne!! /,e%e "%e 1"%o(! !!(e! lke: Ben' n /,! +(!ne!! /,e%e "%e 1"%o(! !!(e! lke:

7

7 0o0o**ee////on on )%)%o* o* o/o/,e,e% c% c(!(!/o/o* c* c"% "% clcle"e"nnn' cn' co*o*""nne!e!.. 

77 InInc(c(%%%%nn' &)' &))e)e%e%en/ kn/ kn& o) en& o) e22enen&&/(/(%e )o%e )o% "&1% "&1e%e%//!!n' /o on' /o o+/+/""n /,e nn /,e n//""ll +(!ne!!. T,e c"

+(!ne!!. T,e c"!e "l!o !e "l!o /"lk! "+o(/ /"lk! "+o(/ 1"%o(! con1"%o(! con!(*e% !e'*en/! !(*e% !e'*en/! e2!/n' n e2!/n' n /,e/,e c(%%en/ *"%ke/.

c(%%en/ *"%ke/.

Glenn 3"n/! /o en/e% /,e *"%ke/ !o "! /o '"n " 'oo& %e(/"/on. -e 3"n/! /o !/"%/ 8) Glenn 3"n/! /o en/e% /,e *"%ke/ !o "! /o '"n " 'oo& %e(/"/on. -e 3"n/! /o !/"%/ 8) ,e &oe! !o7 3/,o(/ le"1n' "ny !/one (n/(%ne&.

,e &oe! !o7 3/,o(/ le"1n' "ny !/one (n/(%ne&.

Q2. Critically analyze the different consumer segments mentioned in the case: Q2. Critically analyze the different consumer segments mentioned in the case: A2

A2. T,e%e "%e /,%ee con!(*e%! !e'*en/! n c(!/o* c"% c"%e *"%ke/. T,ey "%e. T,e%e "%e /,%ee con!(*e%! !e'*en/! n c(!/o* c"% c"%e *"%ke/. T,ey "%e 77 OO33nene%%! o! o) o) oll& c& c""%! %! 33,,c, c, ""%%e e n n oooo% c% coon&n&//onon::

•

• Mo!/ly /,ey 3"!, /,e% c"%! /,e*!el1e! o% /"ke /o loc"l '"! !/"/onMo!/ly /,ey 3"!, /,e% c"%! /,e*!el1e! o% /"ke /o loc"l '"! !/"/on •

• T,ey 3ll no/ !en& lo/ o) *oney on %e!e%1"/on o) c"% T,ey 3ll no/ !en& lo/ o) *oney on %e!e%1"/on o) c"% •

• I/ 3o(l& +e ,"%& /o "//%"c/ /,e* &(e /o /,e% %ce !en!/1/yI/ 3o(l& +e ,"%& /o "//%"c/ /,e* &(e /o /,e% %ce !en!/1/y



77 O3O3nene%! o%! o) ne) ne3e3e%%9 *9 *&&%%cece& c"& c"%!%!8(8(n&n&e% ;e% ;<$<$99=====7=7

•

• L"%'e!/ con!(*e% '%o(L"%'e!/ con!(*e% '%o( •

• Mo!/ly /,ey 3ll 'o )o% "(/o*"/e& c"% 3"!, "n& !o*e/*e! ,"n& 3"!,9Mo!/ly /,ey 3ll 'o )o% "(/o*"/e& c"% 3"!, "n& !o*e/*e! ,"n& 3"!,9

!ec"l!e& c"% cle"nn' co*"ne! !ec"l!e& c"% cle"nn' co*"ne!

•

• T,ey "%e c(%o(! "+o(/ /,e %ce e!/*"/e! "n& /,ey o)/en look )o% T,ey "%e c(%o(! "+o(/ /,e %ce e!/*"/e! "n& /,ey o)/en look )o%

co*"ne! 3,c, &el1e% &oo% /o &oo% n yello3 "'e! o% con!(l/e& co*"ne! 3,c, &el1e% &oo% /o &oo% n yello3 "'e! o% con!(l/e& )lye%!

)lye%! 

77 O3O3nene%! %! o) o) e2e2een!n!11e e c"c"%! %! 8;8;<$<$9=9=== == "n"n& "& "+o+o1e1e77

•

• S*"lle!/ con!(*e% '%o(S*"lle!/ con!(*e% '%o( •

• T,ey ,"& *o!/ *oney /o !en& on /,e% c"%!T,ey ,"& *o!/ *oney /o !en& on /,e% c"%! •

• T,ey &o no/ %e)e% /o 'o /o "(/o*"/e& c"% 3"!, %"/,e% /,ey lke /o 3"!,T,ey &o no/ %e)e% /o 'o /o "(/o*"/e& c"% 3"!, %"/,e% /,ey lke /o 3"!,

+y ,"n& o% /"ke /,e* /o !

+y ,"n& o% /"ke /,e* /o !ec"l!e& c"% cle"nn' ec"l!e& c"% cle"nn' co*"ne!co*"ne!

•

• T,ey "%e *o!/ conce%ne& 3/, /,e T,ey "%e *o!/ conce%ne& 3/, /,e %e(/"/%e(/"/on o) on o) c"% co*"ny "n& oncec"% co*"ny "n& once

/,ey "%e ,"y 3/, / /,ey "%e no/ lkely /o c,"n'e /,e co*"ny /,ey "%e ,"y 3/, / /,ey "%e no/ lkely /o c,"n'e /,e co*"ny

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Q3. What are the key conclusions that can be dran from a detailed com!etitor Q3. What are the key conclusions that can be dran from a detailed com!etitor analysis?

analysis? A3

A3. . F%F%o* o* /,e /,e &e&e/"/"lele& & co*co*e/e//o/o% % "n""n"lyly!! !! 3e 3e c"n c"n conconcl(cl(&e &e /,/,"/ "/ /,e /,e >no >no /o(/o(c,c, c"%3"!,? 3"! '"nn' n o(l"%/y +ec"(!e o) /! "&1"n/"'e o)

c"%3"!,? 3"! '"nn' n o(l"%/y +ec"(!e o) /! "&1"n/"'e o) *n**n*ze& &"*"'e /oze& &"*"'e /o "n/

"n/ "n& "n& e2/e%o% e2/e%o% "cce!!o%e!. "cce!!o%e!. T,! T,! /ye /ye o) o) c"% c"% 3"!, 3"!, o/on o/on ! ! +/ +/ e2en!1e e2en!1e +(/ +(/ /,e/,e "&1"n/"'e o(/3e',! /,e n1e!/*en/. T,e c(!/o* c"% cle"nn' co*"ne! "%e n 1"%e& "&1"n/"'e o(/3e',! /,e n1e!/*en/. T,e c(!/o* c"% cle"nn' co*"ne! "%e n 1"%e& n(*+e%! &een&n' (on /,e 'eo'%",c"l loc"/on "n& !ze o) /,e *"%ke/. T,e%e 3e%e n(*+e%! &een&n' (on /,e 'eo'%",c"l loc"/on "n& !ze o) /,e *"%ke/. T,e%e 3e%e @ c(!/o* c"% cle"nn' co*"ne! n Sc"%+o%o(',. T,e!e co*"ne! ncl(&e& A(/o @ c(!/o* c"% cle"nn' co*"ne! n Sc"%+o%o(',. T,e!e co*"ne! ncl(&e& A(/o I*"'e9 S"%kle! e/c "n& "ll o) /,e* ,"& /,e% !e%1ce! %ce& +e/3een ; @$ C ; ##$. I*"'e9 S"%kle! e/c "n& "ll o) /,e* ,"& /,e% !e%1ce! %ce& +e/3een ; @$ C ; ##$.

Q".

Q". Which altWhich alternati#e shouernati#e should $lenn chooseld $lenn choose?? A".

A". Glenn ,"! /o &ec&e "+o(/ /,e )ollo3n': Glenn ,"! /o &ec&e "+o(/ /,e )ollo3n':

•

• ,c, !e'*en/ o) c(!/o*e%! /o /"%'e/,c, !e'*en/ o) c(!/o*e%! /o /"%'e/ •

• -o3 /o %e"c, /,e /"%'e/ /,%o(', "n "%o%"/e "&1e%/!n' l"n-o3 /o %e"c, /,e /"%'e/ /,%o(', "n "%o%"/e "&1e%/!n' l"n

S(o!e ,e ! no/ &on' "ny "&1e%/!n' "n& con/n(e! /o %ely on 3o%& o) *o(/, "n& S(o!e ,e ! no/ &on' "ny "&1e%/!n' "n& con/n(e! /o %ely on 3o%& o) *o(/, "n& *"n"'e! /o kee ,! c(!/o*e% +"!e n/"c/9 .e. # c"%!

*"n"'e! /o kee ,! c(!/o*e% +"!e n/"c/9 .e. # c"%! e% 3eek8  e% 3eek8  c"%! e% *on/,7 9 ,ec"%! e% *on/,7 9 ,e 3o(l& only +e e"%nn' ;@#== e% *on/, 3,e%e"! ,! /"%'e/ ! /o

3o(l& only +e e"%nn' ;@#== e% *on/, 3,e%e"! ,! /"%'e/ ! /o e"%n ;@== /o ;#===e"%n ;@== /o ;#=== e% *on/,. T,e%e)o%e ,e ,"! /o lo

e% *on/,. T,e%e)o%e ,e ,"! /o look )o% "1en(e! )o% e2"ok )o% "1en(e! )o% e2"n!on.n!on.

0(%%en/ly ,e ,"! " !"1n'! o) ;=== "n& ;@#== 3,c, ,e e"%n! )%o* ,! "%/ /*e 0(%%en/ly ,e ,"! " !"1n'! o) ;=== "n& ;@#== 3,c, ,e e"%n! )%o* ,! "%/ /*e +(!ne!!:

+(!ne!!: /o/"ln' /o/"ln' ;#==. ;#==. In1e!/*en/ In1e!/*en/ n n e5(*en/! e5(*en/! 3ll 3ll le"1e le"1e ,* ,* 3/, 3/, " " !"1n'! !"1n'! o) o) ;H#==.

;H#==.

%igh end users %igh end users

I) ,e )oc(!e! on

I) ,e )oc(!e! on /,e o3ne%! o) /,e e2en!1e c"%!9 ,e c"n /,e o3ne%! o) /,e e2en!1e c"%!9 ,e c"n c,"%'e " *"2*(* o) ;#==c,"%'e " *"2*(* o) ;#== e% c"%. A!!(*n' ,e

e% c"%. A!!(*n' ,e 'e/! # 'e/! # c"%! e% c"%! e% &"y 8H &"y 8H c"%! e% c"%! e% *on/,79 ,! *on/,79 ,! con/%+(/on con/%+(/on *"%'n*"%'n 3ll +e ;H==. I) ,e ! "+le /o e*loy ,! ne,e39 ,! con/%+(/on *"%'n 3ll +e 3ll +e ;H==. I) ,e ! "+le /o e*loy ,! ne,e39 ,! con/%+(/on *"%'n 3ll +e ;@==8$# c"%! e% *on/,7 "n& ,e 3ll ,"1e /o nc(% "n "&&/on"l )2e& co!/! o) ;#H= ;@==8$# c"%! e% *on/,7 "n& ,e 3ll ,"1e /o nc(% "n "&&/on"l )2e& co!/! o) ;#H= e%

e% *on/, *on/, "! "! !"l"%y !"l"%y /o ,/o ,! n! ne,e3 e,e3 8ne/ 8ne/ 0M ;0M ;=7. E=7. E*loyn' *loyn' ,! ,! ne,e3 ne,e3 3ll 3ll le"&le"& /o "n "&&/on"l ;H= *"%'n. T,e%e)o%e ,e c"n con!&e% /,! o/on.

/o "n "&&/on"l ;H= *"%'n. T,e%e)o%e ,e c"n con!&e% /,! o/on.

Ad#ertising &lan Ad#ertising &lan

0"% !,o3!9 "&1e%/!e*en/ n T,e Glo+e "n& M"l +(!ne!! !ec/on "n& +ll+o"%&! "%e 0"% !,o3!9 "&1e%/!e*en/ n T,e Glo+e "n& M"l +(!ne!! !ec/on "n& +ll+o"%&! "%e /,e "%o%"/

/,e "%o%"/e o/on! )o% /,e ,', en& (!e%!. e o/on! )o% /,e ,', en& (!e%!. I) /,e!e "%e (!e&9 "&1eI) /,e!e "%e (!e&9 "&1e%/!n' e2en!%/!n' e2en!e!e! 3ll co*e ( /o ;#==.

(4)

Once /,e "&1e%/!n' e2en!e! "%e *e/9 ,e 3ll +e le)/ 3/, ;@$== !"1n'! 3/, ,*. Once /,e "&1e%/!n' e2en!e! "%e *e/9 ,e 3ll +e le)/ 3/, ;@$== !"1n'! 3/, ,*. 0on/

0on/%+(%+(/on /on *"%*"%'n'n:: ;H=;H=== L

Lee!!!!: : FF22ee& & ccoo!!//!!:: 88;;@@HH<<$$77 P

P%%oo))//!!:: ;;$$ T,! %o6ec/o

T,! %o6ec/on !,o3! /,"/ ,e n !,o3! /,"/ ,e ,"! )(n&! /o /,e ,"! )(n&! /o /,e /(ne o) ;H$ 3/, ,* ")/e% nc(%%n'/(ne o) ;H$ 3/, ,* ")/e% nc(%%n' "ll /,e )2e&

"ll /,e )2e& co!/! "n& /,e co!/! "n& /,e "&1e%/!"&1e%/!n' co!/!. T,e%e)o%e / ! %o)/"+le )o% n' co!/!. T,e%e)o%e / ! %o)/"+le )o% ,* /o /"%'e/,* /o /"%'e/ /,e ,', en& (!e%!. Ne1e%/,ele!!9 /,! 3ll +e /%(e only ) ,e ! "+le /o !e%1ce # c"%! /,e ,', en& (!e%!. Ne1e%/,ele!!9 /,! 3ll +e /%(e only ) ,e ! "+le /o !e%1ce # c"%! e% &"y.

e% &"y.

'id !riced oners 'id !riced oners

I) ,e )oc(!e! on /,e o3ne%! o) /,e *& %ce c"%!9 ,e c"n c,"%'e ;@== e% c"%. I) ,e )oc(!e! on /,e o3ne%! o) /,e *& %ce c"%!9 ,e c"n c,"%'e ;@== e% c"%. A!!(*

A!!(*n' ,e n' ,e 'e/! < c"%! e% 'e/! < c"%! e% &"y 8# c"%! &"y 8# c"%! e% *on/,79 ,! con/%+(/e% *on/,79 ,! con/%+(/on *"%'n 3ll +eon *"%'n 3ll +e ;$=. I) ,e ! "+le /o e*loy ,! ne,e39 ,! 0M 3ll +e ;==9 nc(%%n' "n ;$=. I) ,e ! "+le /o e*loy ,! ne,e39 ,! 0M 3ll +e ;==9 nc(%%n' "n "&&/on"l )2e& co!/! o) ;#H= e% *on/, 8ne/ 0M ;$H=7. E*loyn' ,! ne,e3 3ll "&&/on"l )2e& co!/! o) ;#H= e% *on/, 8ne/ 0M ;$H=7. E*loyn' ,! ne,e3 3ll only '1e ,* "n "&&/on"l ;= "n& ,ence / ! no/ "&1!"+le /o 'o 3/, /,! o/on. only '1e ,* "n "&&/on"l ;= "n& ,ence / ! no/ "&1!"+le /o 'o 3/, /,! o/on.

Ad#ertising &lan Ad#ertising &lan

Ye

Yello3 "'e!9 llo3 "'e!9 Bll+oBll+o"%&!9 ne3!"e% "%&!9 ne3!"e% "&1e%/"&1e%/!e*en/ n !e*en/ n /,e S(n&"y /,e S(n&"y M%%o%M%%o%9 %"&o 9 %"&o !o/!o/ 3ll +e 'oo& o/on!

3ll +e 'oo& o/on!

•

• A&1e%/ n /,e ne3!"e% /3ce " *on/, co!/n' ;==A&1e%/ n /,e ne3!"e% /3ce " *on/, co!/n' ;== •

• Yello3 "'e! "&1e%/!e*en/ co!/n' ;@#HYello3 "'e! "&1e%/!e*en/ co!/n' ;@#H •

• Bll+o"%&! co!/n' ;@@$=Bll+o"%&! co!/n' ;@@$= •

• R"&o "& co!/n' ;H== 8 H /*e! " *on/,7R"&o "& co!/n' ;H== 8 H /*e! " *on/,7

To/"l "&1e%/!n' e2en!e! co*e ( /o ;##H. S"1n'! ")/e% *ee/n' /,e!e e2en!e! To/"l "&1e%/!n' e2en!e! co*e ( /o ;##H. S"1n'! ")/e% *ee/n' /,e!e e2en!e! 3ll +e ;@#.

3ll +e ;@#. 0on/

0on/%+(%+(/on /on M"%M"%'n:'n: ;$;$== F

F22ee& & 00oo!!//!!:: ;;@@HH<<$$ P

P%%oo))// ;;HH<<##$$

-e 3ll +e le)/ 3/, e"%nn'! o) ;#$@ ")/e% nc(%%n' "ll /,e )2e& co!/! "n& /,e -e 3ll +e le)/ 3/, e"%nn'! o) ;#$@ ")/e% nc(%%n' "ll /,e )2e& co!/! "n& /,e "&1e%/!n' e2en!e!.

"&1e%/!n' e2en!e!.

Conclusion Conclusion

I/ ! e1&en/ )%o* /,e "+o1e c"lc(l"/on! /,"/ /,e ,', en& (!e%! '1e Glenn *o%e I/ ! e1&en/ )%o* /,e "+o1e c"lc(l"/on! /,"/ /,e ,', en& (!e%! '1e Glenn *o%e *"%'n! /,"n /,e *& %ce o3ne%!. -e co(l& !/"%/ ,! +(!ne!! +y c"/e%n' /o /,e ,', *"%'n! /,"n /,e *& %ce o3ne%!. -e co(l& !/"%/ ,! +(!ne!! +y c"/e%n' /o /,e ,', en& (!e%! "n& c,"%'e ;#== e% c"% "n& o))e% 5("l/y !e%1ce. T,! 3ll en!(%e %ee"/ en& (!e%! "n& c,"%'e ;#== e% c"% "n& o))e% 5("l/y !e%1ce. T,! 3ll en!(%e %ee"/

(5)

!"le! "n& "l!o +%"n& loy"l/y. T,e%e)o%e ,e 3ll +e "+le /o c"/(%e " !*"ll ye/ loy"l !"le! "n& "l!o +%"n& loy"l/y. T,e%e)o%e ,e 3ll +e "+le /o c"/(%e " !*"ll ye/ loy"l '%o( o) c(!/o*e%!

'%o( o) c(!/o*e%!

G%"&("lly9 ,e co(l& /"%'e/ /,e o3ne%! o) /,e *& %ce c"%! c,"%'n' ;@== e% c"%. G%"&("lly9 ,e co(l& /"%'e/ /,e o3ne%! o) /,e *& %ce c"%! c,"%'n' ;@== e% c"%. Snce /,ey "%e %ce !en!/1e "n& co*"%e %ce!9 "''%e!!1e "&1e%/!e*en/! ,"1e /o Snce /,ey "%e %ce !en!/1e "n& co*"%e %ce!9 "''%e!!1e "&1e%/!e*en/! ,"1e /o +e

+e &one. &one. T,e%e)o%e T,e%e)o%e "! "! /*e /*e "!!e!9 "!!e!9 ,e ,e !,o(l& !,o(l& /"%'e/ /"%'e/ +o/, +o/, /,e /,e ,', ,', en& en& (!e%! (!e%! "n& "n& *&*& %ce c"%

%ce c"% o3ne%!. S*(l/"neo(!ly o3ne%!. S*(l/"neo(!ly ,e !,o(l& ,e !,o(l& "l!o /"%'e/ /,"l!o /"%'e/ /,e o3ne%! oe o3ne%! o) ol& ) ol& c"%! /,%o(',c"%! /,%o(', "''%e!!1e "&1e%/!e*en/!.

"''%e!!1e "&1e%/!e*en/!.

Q.3 Break-even analysis Q.3 Break-even analysis

Cost analysis of Glenn’s custom car care for

Cost analysis of Glenn’s custom car care for 1st year 1st year

*tilities %" 1$$ 'er mont() |"1&$$ | |+emont() |"1&$$ | |+ele'(one %"3, 'er mont() |"#&$ | |le'(one %"3, 'er mont() |"#&$ | | dvertisement- %yellow 'ae &

dvertisement- %yellow 'ae &inc(& inc( "//0  0$inc(& inc( "//0  0$$$ flyers cost "30$) |$$ flyers cost "30$) | "13,0 | |2nsurance cost  "1$$4mont( |"1&$$ | |+otal fixed cost |"15,60 | | "13,0 | |2nsurance cost  "1$$4mont( |"1&$$ | |+otal fixed cost |"15,60 | | 7a

7aria8le cost 'er unit ria8le cost 'er unit |"&$ | |Contri8ution marin %return 'er |"&$ | |Contri8ution marin %return 'er unit-varia8le cost)unit-varia8le cost) |"5$ | |9eturn 'er unit

|"5$ | |9eturn 'er unit "1$$ | | |Glenn’s ne'(ew salary  "0$4day |"1565$ |"1$$ | | |Glenn’s ne'(ew salary  "0$4day |"1565$ | :o of car

:o of car services at Break-even 'oint ; fixed cost Contri8ution marin services at Break-even 'oint ; fixed cost Contri8ution marin 'er'er unit

unit

QB<= is &3& or 110 days for Glenn> w(en (e worked alone and iven QB<= is &3& or 110 days for Glenn> w(en (e worked alone and iven services to mid and low

services to mid and low 'rice rou' c(arin "1$$ 'er car was(.'rice rou' c(arin "1$$ 'er car was(. ?t(er alternatives and 8reak-even analysis...