Summer Internship Report

SERVICE BUSINESS REVENUE GENERATION

Submitted in Fulfillment of the requirements of the

Summer Internship to

Mr.Ronny DCunha
(Manager, Services, Carrier Airconditioning & Refrigeration
Limited)
On

3rd July, 2015

By

Akshay Borgaonkar
PGDM-Marketing Communications (07)

Post Graduate Diploma in

Management
KJ Somaiya Institute of
Management Studies & Research
Faculty Guide : Prof. Brajesh Bolia

Acknowledgement

The work presented in this report has been possible due to the support and
guidance of my mentor, Mr. Ronny DCunha, Senior Manager Services.
I would like to sincerely thank him for his guidance during my Summer Internship
Project.
Also I would like to thank my Course Coordinator Prof. Isaac Jacob and also my
faculty Guide Prof. Brajesh Bolia

Akshay Borgaonkar
PGDM-Marketing Communications (07)

DECLARATION

I, Mr. Akshay Borgaonkar, hereby declare that this project report is the
record of authentic work carried out by me during the period from 4th May
2015 to 03rd July 2015 and has not been submitted to any other
University or Institute for the award of any degree / diploma etc.

Signature:
Name of the student: Akshay Borgaonkar
Roll No: PGDM-Marketing Communications (07)

Date:

CERTIFICATE

This is to certify that Mr. Akshay Borgaonkar, a student of the PostGraduate Diploma in Management, KJ SIMSR, Mumbai, has worked in our
organization on a project assigned by us. To the best of our knowledge,
this report is a product of the students own effort on the project
conducted under our guidance and supervision.

Organizational Guide:
Designation:
Organization:
Address:

Date:

Table of Contents
1. Industry Profile6
2. Company Profile.8
3. Product Category..11
4. Carrier Milestones..12
5. ENVIRONMENTAL SUSTAINABILITY13
6. Competitors, Carrier(Services)...14
7. Business Model...15
8. Porters Five Forces Model.16
9. SWOT Analysis.19
10. Service Business Revenue Generation.20
11. Annual Maintenance Contracts.23
12. AMC Flow Chart25
13. AMC snapshot26
14. Purchase order snapshot.27
15. Complaint lodging and resolving.28
16. Call registration flow process.29
17. Dealers..3
0
18. Business Problem and Objective.31
19. Solution.3
4
20. Key Result and Recommendations.36
21. Bibliography.3
7

INDUSTRY PROFILE
The market of air conditioners in India has been on a steady growth ever since, apart
from certain exceptions. The perception of people towards the category of this product
has witnessed a paradigm shift over the years from a luxury product to becoming a
necessity in hot humid weather conditions of India. Increasing demand by the residential
sector owing to reduction in prices has instigated the manufacturers to aim for a higher
market share in the highly potential market of air conditioners in India. The demand from
the commercial segment is catching up fast with the increasing number of commercial
offices, stores and business apartments being set up, as compared to the demand from
the residential segment. Air conditioner was once considered as a mark of luxury and
only upper socio-economic category household were able to afford it. According a Euromonitor article disposable income of Indian households are increasing but the airconditioning industry is increasing at even higher rate.
According to India Air Conditioner Market Forecast & Opportunities, 2017 the air
conditioner market is poised for greater growth over next five years. India air conditioner
market is forecasted to grow at a CAGR of 13.6% for the next five years. Increasing
disposable income, rising weather temperature, falling prices of air conditioners coupled
with the latest technological innovations increasing the cooling efficiency and the
increasing commercialization of the economy are the factors which are driving air
conditioners market in India.
Accounting for a lions share of the air conditioners market, split air conditioners segment
was the highest revenue generator, followed by VRFs and window air conditioners in
2014. The market share of window air conditioners has been declining over the last few
years on account of decreasing price gap compared to split ACs, due to which many
leading companies such as Samsung and LG have exited from the windows air
conditioning segment while other major companies like Voltas, Daikin, Blue Star, etc.,
have lowered the production of window air conditioners in the country. Northern India
generates the highest revenue in the countrys air conditioners market, followed by
Southern and Western regions.

Penetration rate of ACs are very poor in Indian household which is less that 4%. Main
reasons behind low penetration rate are low income and load-shading in smaller cities
and rural areas. ACs have reached very small numbers of households in small cities and
towns on the other side rural market is totally untapped and it would take quite a time to
penetrate in rural market.
The Indian air conditioning market is divided into two major segments: commercial air
conditioners (VRF, Chillers & Others) and Room Air Conditioners (Split and Window air
conditioners), among which, residential air conditioners segment witnessed a higher
revenue share in 2014. This domination of room air conditioners segment is expected to
continue over the next five years. Currently, the market for air conditioners in India is
dominated by Voltas, followed by LG, Daikin and Samsung.

China is dominating the Indian air conditioner market, surpassing the indigenous
manufacturers who fail to get into mass production. By and large Indian
manufacturers are not more than 20 percent of the total market for heating,
ventilation, air-conditioning and refrigeration. Rest of the 80 percent is
dominated by the units imported from China. The unitary products in the Indian
air-conditioner market is close to Rs.10,000 crore. China produces in bulk for
which good manufacturing facility is required and is hence less expensive .
Key/Prominent Vendors

Blue Star
Daikin
Godrej
LG
Panasonic
Samsung
Voltas
Carrier
Lloyd
ETA
Haier
Hitachi
IFB
Mitsubishi Electric
Onida
Sharp
Toshiba
Videocon
For this industry:
Key Market Driver
- Increasing Demand for Energy Efficient AC
Key Market Challenge - Intense Competition
Key Market Trend
- Increased Use of Green Technology
Key Sales Factors
- Rising per capita income, climatic conditions and consumer
lifestyle

PRODUCT CATEGORIES:
Window AC
Cassette
Ducted
Digital Scroll

Slimpak
High wall
Packaged Unit
VRF

COMPANY PROFILE
Carrier is a part of United Technologies Corporation, USA. With 2008 revenue of
$58.7 billion, UTC is a conglomerate operating in the high technology space. The UTC
group operates in aerospace & building systems with companies like Carrier (airconditioning), Otis (Elevators), Pratt & Whitney (Jet- engines) and many more.
Founded in 1915 by Dr.Willis Carrier, the inventor of modern air-conditioning, Carrier has
developed into being the worlds largest provider of air-conditioning, heating and
commercial refrigeration systems (HVACR) with operations in more than 170 countries,
employing approximately 41,000 people worldwide and revenues of $14.9 billion in
2008.
Carrier is the world's leader in high technology heating, air-conditioning and refrigeration
solutions. Carrier experts provide sustainable solutions, integrating energy efficient
products, building controls, and energy services for residential, commercial, retail, and
transport and food service customers. Carrier distributes to and provides service to its
customers via a worldwide network of owned and independent distributors and dealers.
Carrier is a part of UTC Climate, Controls & Security, a unit of United Technologies Corp.
(NYSE: UTX) which provides high technology products and services to the building
systems and aerospace industries worldwide through its industry-leading businesses:
Carrier, Hamilton Sundstrand, Otis, Pratt & Whitney, Sikorsky, UTC Fire & Security and
UTC Power. UTC was ranked 37th on the 2010 Fortune 1000 List of America's Largest
Corporations.
Foundation: Carrier is a brand of United Technologies Corporation Building & Industrial
Systems, based in Farmington, Connecticut. Carrier was founded in 1915 by the inventor
of modern air conditioning, Willis Carrier, as an independent company, manufacturing
and distributing heating, ventilating and air conditioning (HVAC) systems, as well as
commercial refrigeration and food service equipment. Carrier was acquired by United
Technologies in 1979. Prior to the acquisition by UTC, Carrier Corporation was known as
the Carrier Air Conditioning Company.

Core Values:

At Carrier, our mission is to be the first choice for heating, air-conditioning and
refrigeration solutions worldwide. We work every day to make the world a better place to
live, work and play. Our employees, products and services create comfortable, productive
and healthy environments, regardless of climate, and ensure the global food supply is
transported and preserved for safe consumption.
Our culture is rooted in the core values of UTC Building & Industrial Systems. These
values are the pillars of our business. They define who we are and guide every decision
we make.

Carrier started its operations in India with setting up of companies namely Carrier Aircon
Limited in 1986, and Carrier Refrigeration Private Limited in 1992. Carrier brought to the
Indian consumer, access to advanced technology and air-conditioning and refrigeration
products from the worldwide product portfolio of Carrier. In October, 2006, Carrier Aircon
merged with Carrier Refrigeration and the name of the merged entity was changed
to Carrier Airconditioning & Refrigeration Limited (Carrier India).
Carrier India's manufacturing facility at Gurgaon produces air conditioning
equipments including Window Room Air conditioners, Hi- Wall Splits, Slimpak Splits,
Cassette Splits, Ducted Splits and Chillers. It also manufactures Refrigeration Equipments
including Cold chain equipment comprising of Cold Rooms, Truck Refrigeration & Bus Airconditioning system, Freezers, Visi Coolers & Super Market Products.
Carrier Midea India Private Limited (CMI) was set up in 2012 to combining the
strengths of two global giants in air-conditioning, Carrier and Midea. The joint venture
was undertaken to combine Mideas world-class design and manufacturing expertise in
residential air conditioning and Carrier Indias strong pan-India distribution network. The
resulting synergy has made CMI a leading participant in the Airconditioning and home
solutions sector in India in two short years making this a very successful partnership
indeed. They plan to strengthen their market position in the residential air conditioning
and white goods market in India with an investment of Rs. 500 crores over a five to six
year period.
Toshiba Corporation a diversified manufacturer of electronic and electrical products
and systems was founded in the year July 1875 and celebrated its 130th anniversary in
2006. Toshiba consumer marketing is one of the key group companies under which the
Air conditioning division is taken care of by Toshiba Carrier Corporation Japan (TCCJ).
TCCJ was established in April 1999, as a Joint venture between Toshiba Corporation and
Carrier Corporation aiming to reinforce the corporate competitiveness by strategic
cooperation from global standpoint. Carrier is the world's largest HVAC company and
Toshiba is quite strong in the Residential and Light Commercial segment with most

advanced technology. Toshiba Air Conditioning has state of the art manufacturing
facilities in Japan, Thailand and China. For the Indian market, the products are fully
imported and sourced from the factories in Japan and Thailand. So Carrier looks after the
sales and distribution of Toshiba products in India.
When it comes to competition faced by Carrier Aircon, Indian AC market is already
flooded with players like Voltas, LG, Daikin, Hitachi, Haier, Samsung, Videocon and
others. Carrier is doing well in terms of commercial usages but still has to go a long way
for residential market for which Carrier Midea is there.
BUSINESSES:

Carrier serves three markets:

Residential and light commercial: homes and small facilities. They supply
furnaces, central air conditioners, heat pumps, air filters, window units, split
systems and other home comfort solutions.
Commercial building: industrial and multi-level facilities. They supply chillers,
large unitary, airside systems and controls that provide comfort and enhance
efficiency in buildings around the world.
Refrigeration systems for food retail and transportation: They provide applications
to ensure food supplies are transported and stored for safe consumption.

Carrier Airconditioning & Refrigeration Ltd (CARL) is the name with which it operates in
India.
It has more than 700 employees. Facilities includes Factory, Carrier owned Totaline
outlets, Sales and service offices.
Factory
Carrier has one manufacturing facility in India, Carrier Airconditioning and Refrigeration
(Carrier India), which produces air conditioning and refrigeration equipment for the
domestic market. Products manufactured at Carrier India include window room air
conditioners, duct free splits, chillers, airside systems, freezers and truck refrigeration.
Sales and Distribution
Carrier India has more than 600 sales and service dealers and 1200 distributors and
retailers throughout the country. The Willis Carrier Club Dealer (WCCD), an exclusive
Carrier dealer club, comprises of more than 100 top Carrier HVAC dealers in the country.
Customer Service and Totaline
Totaline, Carriers unique HVACR parts organization, comprises stores that are one-stop
shops for parts and supplies in the industry. They supply parts, tools and measuring
instruments and set an industry standard for quality and reliability. Totaline-branded
parts are designed to service any brand of equipment.
Brands sold in India

Carrier

Toshiba (residential)

10

Type of Products sold in India

The products are divided into 4 types:
1. Residential: includes window ac, High wall, Ducted, Slimpak, Cassette
2. Commercial: Air Cooled Chiller, Water Cooled Chiller, Absorption Chiller,
Airside Products, Controls
3. Refrigeration: Freezers, Cold Rooms, Supermarket(decks, service counters
and freezers)
4. Transport: Trucks and Trailer refrigeration

SOME PRODUCTS :

11

Room air conditioners

2. Ducted / Package Systems

3. Chillers (Air / Water cooled)

12

4. VRF air conditioning systems

5. Precision & Telecommunication

6. Rail Coach Air Conditioning

7. Refrigeration

CARRIER INDIA MILESTONES

1986 Carrier Aircon Ltd. Established

1988 Gurgaon factory commissioned

1988 First product: Hermetic compressor

1992 Carrier Transicold Pvt. Ltd. Established

1998 Carrier Refrigeration factory in Bangalore commissioned

2002 Toshiba Carrier, a joint venture between Carrier and Toshibas air conditioning
business group, started its operations in India

13

2003 First export order: Beverage Air

2004 #1 in Air conditioners in consumer satisfaction survey

2006 Carrier Aircon Ltd. merged with Carrier Refrigeration Pvt. Ltd. to become Carrier
Air conditioning & Refrigeration Ltd
2006 Formed the Willis Carrier Dealer Club

2007 National Energy Conservation Award 2007: 1st Prize in "Consumer Goods sector"
category presented by the Honorable President of India, Ms. Pratibha Patil.
2008 National Energy Conservation Award 2008: 1st Prize in "Consumer Goods sector"
category
2009 National Energy Conservation Award 2009: 1st Prize in "Manufacturers of BEE Star
Labeled Appliances (air conditioner) Sector," Top Rank in "Consumer Goods sector"
category
2010 National Energy Conservation Award 2010 : 2nd Prize in "Consumer Goods sector"
category
2011 National Energy Conservation Award 2011 : 1st Prize in "Consumer Goods sector"
category
ACE & QUALITY
Carrier is committed to Achieving Competitive Excellence (ACE).ACE is our proprietary
operating system to ensure world-class quality in our products and processes. With its
relentless focus on increasing efficiency and reducing waste, ACE is integral to the
company's performance model. The companys facilities worldwide are using the
operating system to improve quality and customer satisfaction while lowering cost.

ENVIRONMENTAL SUSTAINABILITY

Between 2006 and 2010, Carrier Indias manufacturing facility in Gurgaon has
achieved a reduction of 38 percent in air emissions, 22 percent in energy
consumption, and 43 percent in water consumption. Normalized for production
volume, the Gurgaon facility has achieved a reduction of 57 percent in air emissions,
50 percent in energy consumption, and 54 percent in water consumption.
In 1996, Carrier Corp. was the first company in the world to introduce a
centrifugal chiller that uses a non-ozone depleting refrigerant.
Carrier India was an early supporter of the Ministry of Powers new energy
efficiency laws for air conditioning in India and one of the first to adopt the energy
efficiency label issued by the Bureau of Energy Efficiency.

14

Carrier is the only company in the world to be a founding member of the U.S.,
India, Singapore and China Green Building Councils.
Carrier pioneered a worldwide CFC phase-out in 1994.

COMPETITORS
Hitachi, General, Voltas, Blue Star, LG, Onida, Haier, Samsung are the main competitors
of CARL.

CARRIER AIRCONDITIONING AND REFRIGERATION LIMITED (CARL) AS A

SERVICE PROVIDER
The company now not only depends upon the sale of machines for its revenue but also
depends on revenue generated by providing services to the customers. A service can be
anything that company can provide which is intangible in nature. There are various
categories of Service Mix. The Carrier can be considered in the category of Tangible
good with accompanying service. It is because Carrier gives machines as tangible goods
and Warranty & AMC Services as Services. As Carrier is entering more technologically
advanced product, the need for high quality supporting services also increases. It is also
providing maintenance services to machines of other brand also.
Services are generally high in experience and credence qualities therefore there is more
risk in purchase. Service Consumers rely more on word of mouth publicity than
advertising. Consumers rely on price and provider to judge quality. Consumers are loyal
to service providers who satisfy them. Since switching cost is high for customers so it is
difficult to get customers from competitors. Customers are more aware about productsupport services and desire for separate prices of each service element and the right to
select the elements that they want. Customers can now share their experience on
websites like PlanetFeedback.com and Mouthshut.com.
Some characteristics of services are:

Intangibles should be able to provide some concrete benefits and a well defined
experience
Services are produced and consumed simultaneously
Service-performance process should be standardized across the organization
Customer Satisfaction should be measured

Marketing in Service Industries:

Company

Internal
Marketing

15

External
Marketing

Employees

Customers
Interactive
Marketing

In Context of Carrier:
External Marketing: Giving Customers the best AMC offer
Internal Marketing: Training and motivating employees to serve customers well
Interactive Marketing: Technicians behaviour and skill
Companies also are increasing the quality of their call centres and their customer care
representatives.
Carrier includes warranty and AMC (Annual Maintenance Contract) as part of its services.
The costs of machines include the charges for Warranty Services. After Warranty Period is
over AMC is offered to the customers.

BUSINESS MODEL:
Authorized Channel Partners

WCCD(Willis
Carrier Club
Dealership)
ESSD(Exclusiv
e Sales and
Service
Dealers)

Types of Deals:
Direct Sales

Institutions(Identified)

Dealer Sales

Customer

DMS(Unidentified)
Contractors(Identified)
Dealers(Identified)

National Account (Already Tapped)

16

MSSD(MultiBrand Sales
and Service
Dealer)

DMS(Identified)
Non-

Outstation (Need not do it)

PORTERS FIVE FORCES MODEL (WRT CARL)

Porters Five Forces Model: Porter five forces analysis is a framework to analyse level of
competition within an industry and business strategy development. Porter's five forces
include - three forces from 'horizontal' competition: the threat of substitute products or
services, the threat of established rivals, and the threat of new entrants; and two forces
from 'vertical' competition: the bargaining power of suppliers and the bargaining power
of customers. The

five forces are:

Threat of new entrant: It talks about effect of new entrants on the company or
how much of a threat new entrant may pose to company.

Threat of substitutes: It takes into account threat of substitutes on the company.

Bargaining Power of Buyers: The ability of customers to put the firm under
pressure.

Bargaining Power of Suppliers: Suppliers of raw materials, components, labor, and

services (such as expertise) to the firm can be a source of power over the firm
when there are few substitutes.

Rivalry among existing firms: For most industries the intensity of competitive
rivalry is the major determinant of the competitiveness of the industry.
Based on the figure shown we can analyse the position of CARL in industry. It
would be analysed based on five forces. High or Low is written based on intensity
of threat it poses to CARL.

17

Threat of New
Entrants

Supplier Power

ConcentrationHigh
Threat of Forward
and backward
Integration-High
Importance-High

Economies of
Scale-Low
Switching Cost
to Buyers-High
Distribution
Channels- low

Rivalry among existing

Firms

No. of
Competitors- High
Industry Growth
Rate-medium
Strategic StakesHigh

Threat of Substitutes

18

Price-High
Quality-High
Switching CostHigh

Buyer Power

No. Of BuyersLow
Use of Multiple
Sources-High
Importance-Low

Threat of new entrant: Since it is difficult to enter for new businesses and to
achieve economies of scale therefore threat is low. Also distribution channel will
take time and money to develop, so threat is low. Switching Cost for new entrants
would not be more therefore threat is high. Overall, threat of new entrant is low.

Threat of substitutes: There can be substitutes like better quality Recirculating

Coolers, refrigerated circulators, evaporative air coolers (symphony), etc. They are
less expensive than air conditioner therefore threat is high. Switching Cost is less
therefore threat is high. Overall threat is high.

Bargaining Power of Buyers: The customers have low bargaining power as they
buy products in small quantity. Therefore threat is low.

Bargaining Power of Suppliers: The suppliers here mainly are dealers, franchise,
etc. They can go for backward as well as forward integration and have high
importance. Therefore threat is high.

Rivalry among existing firms: There are a number of competitors. The growth rate
is around 13-15 % therefore it is good for industry. Strategy followed by company
plays an important role for company. The competition is intense.

Therefore, the industry is quite competitive with already existing players. Therefore,
Carrier has to make efforts to sustain in the market.

SWOT ANALYSIS
19

STRENGHTS
Infrastructure
Distribution Channel
Vast Experience
Manpower

OPPORTUNITIES
Growing airconditioning sector
Approaching lost
customers
Contacting unsatisfied
customers of
competitors.

20

WEAKNESSES
Co-ordination
between Carrier and
Dealers
Frequent stock out of
spare parts

THREATS
Competition from
other companies
New Product
Technologies
Dissatisfied customer
Emerging greener
Technologies

SUMMER PROJECT ON SERVICE BUSINESS REVENUE

GENERATION
The process by which a company markets and sells a product or service to produce
income is referred to as revenue generation. The project is based on the business that is
related to services that is after the product is already sold and then is all about how is the
experience the customer is getting.
This share of revenue that comes from after sales services in terms of warranty, annual
maintenance contracts and customer delight and makes a very significant share in the
total sales and revenue which now companies have realized and are now very seriously
working on it.
Having know-how of service-oriented business and believing in rendering high quality
services at a quick turnaround time is actually the crux to generate revenue and good
will. If a company has all these above-mentioned skills, then surely they can turn those
assets into a booming business opportunity that indicates more profits and sustainability.
There are plethora of retail brands spread across every nook and cranny of the country
but the irony of all the best brands is mainly about providing an effective after sales
service to consumers. It is nowadays used as the cutting edge marketing tactic in
pushing the products sale across a broad category of a consumer durables industry.
Nowadays, a products problem can be resolved from its authorised service centre which
offers repair related services to its target customers and corporate clientele as well. The
key to generate maximum footfalls is surely the good after sale customer service. From
wrist watches to cell phones, imaging products to printers or white goods (such as
refrigerators, washing machines, air conditioners) and automobiles, there is a huge
demand by customers for after sale services which needs to be targeted by the various
organised brands and franchisors so as to trigger more profits and create brands value in
customers mindset. This in turn is also offering ample business opportunities to wannabe
franchisees.
The fate of a consumer durable brand relies mainly on product portfolio and an after
sales service it offers to the target customers. When it comes to a consumer durables
sector, after sales service plays a significant role in propelling more customer footfalls so
as to target more profits simultaneously.
Looking at the statistics, after sales services market is evolving inch by inch and most of
the share of market lies in the unorganised market as lot of local dealers and
neighbourhood players are providing services of multiple brands at affordable prices.
Also, the use of non-branded spare parts is on the constant increase, which is somehow
creating a big challenge for organised brands to keep their brands loyalty intact. So as to
offer best of opportunities to customers, brands are setting up their authorised service
centres in every corner of country so as to offer best of services. This involves a 24X7
support through e-portals and customers can also visit the certified companys service
centre so as to avail in warranty and out of warranty related services.
Franchise for more returns
Franchising in the after sales service sector has been able to present a feasible business
choice to prospective franchisees. The brands that have charted maximum share of
market by doubling their store count via franchising are Canon India, Whirlpool of India,
Kent Ro Systems Pvt Ltd, Eureka Forbes, Titan Watches, Mahindra First Choice Services,
the multi-brand car service division of Mahindra Group, CEAT Ltd, the first tyre

21

manufacturer in India to introduce a franchise model for tyre retail and service and Club
Laptop, the first-of-its kind brand in laptop repair. After sales services industry is not only
offering business opportunities to many entrepreneurs or franchisees who are interested
in services sector but, it is simultaneously offering employment opportunities to likeminded individuals as well.
Franchisees have the opportunity to earn from warranty costs that are borne by
the company for attending calls for products under warranty.
Income from repairing stocks with dealers, usually small repairs due to transit
damages, is another source of income.
They also earn through servicing out-of-warranty products through chargeable
calls and sale of spare parts and annual maintenance contracts.
Every company has a wide range of unique consumables and accessories that are
sold exclusively through the service channel to provide a unique revenue
opportunity for franchisees.
After sale market is roughly pegged at Rs 100 crore. As far retail of lenses and
accessories is concerned, franchisees are able to sell but not as per the industry
size. Nearly 20 per cent of sales come from franchisees to the outlets. Franchisees are
allowed to sell third party accessories so that they can make more money.
Also service centres are there that offer after sale services to consumers. For instance,
Canon basically has four franchise service agents for cameras and 32 printer
franchisees. So in total, Canon has 36 franchisees spread across 32 towns. Canon has
put up a very robust infrastructure for sales and service training programmes for its
franchisees and their sale service people. On an expansion front, Canon looks ahead to
add more cities in its portfolio for expansion of its service centre franchisee.
Training at its best
For running a service centre franchise, hands-on training related to product portfolio of a
brand plays a significant role in bringing more customer footfalls and preserving a
brands value in the end consumer mind set. So its important that a service centre of
franchise brand offered an extensive training and support to franchisees staff so that
they are able to fix up every customer query.
So far, Whirlpool of India offers technical training to its service engineers at two levels. In
addition, Whirlpool training academy, a modern training facility established solely to
augment technical, communication and relationship skills, is a venue where a higher
level training is imparted and which is operational throughout the year. All training costs
are borne by the company.
Canon India franchisees service engineers are regularly trained and are given
certification at technical centre which is located in Noida. In case of Kent Ro, A-Z
solutions are offered to franchisees with agents to repair and providing the best of the
services.
Making a way from roadblocks
In every business segment, challenges vary from brand to brand and sector to sector.
Related to services sector, the major hurdles have been about finding the ideal partner
for business who share the same vision, have capability to invest and zest to quickly
innovate and exploring a right location that assures quick benefits. The major hurdles are
like dearth of entrepreneurs willing to invest in service business, exclusivity especially in
tier 3-4 markets, availability of trained technical workforce, professional people with right
behaviours and right value system, financial expectations of service franchisees, desire

22

for early returns on investment and integrity issues with some franchisees. To ensure that
business runs smoothly, developing talent and creating opportunities for exceptional
talent is essential. The brand encourages experienced service personnel to become
entrepreneurs by setting them up as service franchisees. They are educated on the
service as well as the revenue side of the franchisee business, linking the adage that
good service can actually create great opportunity for revenue. Whirlpool Training
Academy provides the right platform for service engineers to get trained and understand
Whirlpool values. In case of a breach of ethics, Whirlpools central audit team imposes
heavy penalties on defaulters.

Similarly for KENT RO SYSTEMS LTD, one of the toughest challenges for any new player is
to educate and convince people about the importance of an RO purifiers and technology.
They spend 15 per cent of revenues in marketing. Another challenge for any new player
is the after sales service so a quick turnaround time is a key factor; a skilled manpower
which is available 24x7 for the customers.
For after sale service franchisee, the biggest challenge is the quantum of business
coming to them. Most of the times, the customer does not come for after warranty repair.
During warranty, all customers will come to service centres. So, we ask franchisee to
provide a large number of service staff related to service, warranty or repair. The main
margin comes from out of warranty repair so not all customers go to the companys
centre. So we continue to write to customers and encourage them to come to companys
centre for repair. Sometimes, we offer service through our free service camps so that
customers can come and avail repair for free or at discounted rates. For overcoming dayto-day hiccups, Canon ensures to fight with challenge of profits by providing its
franchisees some subsidy of service expense during warranty so that their normal
expense is covered and ensure that they do not make loss. The company helps in
managing the inventory of spare parts by providing its franchisees a complete analysis of
spare part consumption around the country and suggests them to keep estimated
number of spare parts.

Now, at Carrier India as mentioned above after sales services is offered and hence
revenue is generated through warranty period, extended warranty period, Annual
Maintenance Contracts and addressing other grievances of customers for machines
which can be either performance or spare part related for Carrier and Toshiba appliances.
Warranty Period: a written guarantee, issued to the purchaser of an article by its
manufacturer, promising to repair or replace it if necessary within a specified period of
time.
So for AC market one year is the warranty period which is extended to six months or an
year sometimes due to different valid reasons. In this period services provided to the
customers are free and any problem or improper functioning of spare parts is catered by
replacing it or repairing it.
It is this period in which a company can provide service delight and gain customer
satisfaction and hence trust. If carrier performs in this period properly then for sure its
chances to get the maintenance contract from the same client is sure and is true
everywhere. Else the contract goes to some local dealer who for sure proposes lower
prices and hence the customer gets lured. Hence this is the best capitalizing time.

23

The warranty given by CARL covers:

Functional Defect on Arrival: Units shall be covered under DOA up to 90 days of

Carrier Invoice or 15 days from date of installation whichever is earlier. DOA refers
to Dead On Arrival
Standard Warranty Period: It is 12 months from date of installation or 15 months
from date of invoice.

Obligations by CARL for product under warranty:

To provide 3 Preventive Maintenance services for the machine.

To attend to any break-down calls received from customer, trouble shooting,
maintaining the machine in good working condition.
To provide free replacement of spare parts and refrigerant charging to customers.

Annual Maintenance Contract:

In short AMC is a service provided by companies to customers at a cost that helps keep
their products in proper working condition after free product services offered by the
company are completed. Annual maintenance contract signed between a customer and
product manufacturer/ service centre allows regular check-ups and routine work to keep
the performance and quality of the products in good condition every year. AMC is annual
maintenance contract that is offered after the machine is out of warranty. It is just an
extension to warranty with a yearly charge. Carrier has been offering AMC to its
customers before expiry of Warranty. AMC sales come under after market

Types of Annual Maintenance Contract (AMC ): Depending upon the product

companies/service centres offer different types of AMC contracts, regular product
usage requirement and the stress it undergoes forms the base for choosing the plan.

Comprehensive/Labour Annual maintenance Contract

Labour only Annual Maintenance Contract.

Labour + Spare Parts to a fixed amount.

AMC with Rubber & Plastic Parts / AMC without Rubber & Plastic Parts.

Advantages of Registering for an AMC:

Saves from unexpected Repairs and avoids cost for these repairs.

Round the Clock Service from Qualified Technicians.

Planned Services for your Products.

Genuine Spare Parts for high reliability.

How to Register for Annual Maintenance Contract (AMC):

Generally every product is provided with the warranty for fixed period of time after the
product is purchased. Whenever warranty for the product expires, customers should call
the Customer Care Number of the company, in order to buy AMC for their products for
some more years which are charged by the company based on the type of AMC you
select to buy from them.

24

Before calling the customer care, it is important to know the rules and regulations for
accepting the AMC. General terms and conditions given below:
1.

Acceptance of AMC depends on condition of the Machine Duration and generally

the agreement will be one year from the date of receiving the product and this is
done if the product does not have warranty from the company.

2.

Before accepting the contract, the customers are expected to check the product is
in good condition.

3.

If the product which is covered under the plan may break down and in such cases
the customer service people will be available for servicing or replacing the product
at an extra cost.

4.

The agreement will be terminated in case of change of ownership or location of

the machine.

5.

One month advance notice is given for the termination of the agreement by the
company and the customers have to refund for the expired agreement.

6.
Mode of AMC payment can be Cheque or DD or any other source.
How AMC offer is given to customers: It is given through the same service dealer
who was maintaining that particular machine. Health Check up is done before offering
the AMC. It is given:

45 days prior to their warranty expiry date

45 days prior to their AMC expiry date

Type of AMC Contracts:

SPIS Contract: The scope of work includes:

1. Attending to any number of break down calls during normal working hours on all
working days, subject to complaint lodged by end user with CARL call center or
with CARL authorized dealers.
2. Routine inspection and general checking of units with four quarterly preventive
services evenly spaced or as per site or user's requirement during the AMC period
3. In case there is a breakdown call very near to the periodic or service call that is
maximum one week in advance, the routine servicing will be carried out along
with breakdown call and CARL's representative will prepare the common service
report.

SPMS Contract: The scope of work includes:

1. Attending to any number of breakdown calls during normal working hours on all
working days, subject to complaint lodged by end user with CARL call center or
with CARL authorized dealers.
2. Routine inspection and general checking of units with four quarterly preventive
services evenly spaced or as per site or user's requirement during the AMC period
3. In case there is a breakdown call very near to the periodic or service call that is
maximum one week in advance, the routine servicing will be carried out along

25

with breakdown call and CARL's representative will prepare the common service
report.
4. Refrigerant gas charging or topping up during leakage repairing, repair or
replacement of all electrical or mechanical running part found defective
due to normal wear & tear only.

SPMS-C: It is same as SPMS contract except that compressor is not included in the
AMC.

Type of Customers to whom AMC is to be Offered

AMC Renewal: Customers who are already under AMC

Warranty Period Getting Over: Customers whose Warranty is Expiring
Other Brands: Who are not into AMC but still AMC is offered so that they can
become customers.

After giving the AMC offer the status of customer is saved as below:
Status

Offer Pending
Offer Accepted

There are some reasons due to which customers are not able to accept the AMC offer.

AMC Flow Chart:

AMC OFFER
given to
Customer
Negotiations

AMC OFFER
ACCEPTEDD

No
Yes

Purchase Order
is received by
CARL

26

Another eligible
customer is
contacted

Contract is
made and sent
to Customer

Payment is done
by Customer

INVOICE IS
GENERATED

AMC Offer (snapshot)

27

Once the Offer is made to customer, he gives purchase order. After purchase order (PO)
is received the invoice is generated by the Commercial Department

Purchase Order (Snapshot)

28

How to log the Complaint:

1. Call is received/mail is received.
2. For first time callers, their details are asked for registration. Then, a registration
number is generated.
3. Through registration number or phone number customer is identified and all the
details of the customers are displayed on DMS system which can be verified.
4. Then, according to nature of complaint the details are filled.
5. Service Dealer is identified. If could not be identified then Branch Office ID is
filled.
6. Then, the call is logged and a complaint number is generated which is given to
the customer.

How the action is taken to resolve the Complaint:

1. The Service Dealer gets the contact of customer and nature of Complaint.
2. The service Dealer has to resolve it in 48 hours.
3. At the same time customer care executive of Carrier gives outbound call to dealer
and gets status of the complaint. The technician resolves the complaint and
generates the FSR which also haves the feedback of the customer.
4. If Complaint is resolved the status is Close else it is Open in FSR.
5. At the same time dealer has to close the Complaint in the DMS (Dealer
Management System).

29

Call Registration Process Flow:

CUSTOMER
CALL
RECIEVED

Is First Time
Caller

Customer
Identified

6.

7.
COMPL
AINT
NO.

Service Dealer
Known

Service
Dealer ID

Escalation Matrix

Call
Logged(CR
N)

Level-1: Dealer(0-1 days)

Level-2: Branch CRO(1-2 days)
Level-3: BSM Branch Service(<2 days)
Level-4: RSM(3-4 days)
Level-5:National Heads(4-5 days)
Level-6: Head (>5 days)

30

Yes

Registerati
on Process

NO

NO

Branch
Office ID

Customer Feedback (Market Feedback Analysis (MFA)):

All the complaints which are closed are taken. Then, a set of calls around 100-120 are
chosen for feedback purposes.

Transactional Feedback: Feedback for the particular complaint.

Questions asked:
1. If your complaint is resolved?
2. Are you satisfied with level of service?
A rating is asked on a 7 point Likert Scale where 4 is neutral. Above 4 is good and below
4 is bad. For customers who give average rating less than equal to 4 are selected for
Non-Transactional Feedback.

Non -Transactional Feedback:

There is a set of 15-16 question which are also on 7-point Likert Scale. The average
rating is taken and dissatisfied customers are identified(those whose average rating is
less than equal to 4).
There are some changes required in questionnaire:
1. Questionnaire should have less no. of questions.
2. Questions pertaining to installation can be omitted.
3. Some questions can be merged.

DEALERS
Dealers play an important part in sales as well service of the machines. Carrier does
most of its sales through dealers only. The dealers have their own sales and service
teams. Dealers have their own technicians who are responsible for giving warranty and
AMC services to customers. They are also known as Authorized Channel Partners. All the
after sales techniques and procedures at Carrier Corporation are actually executed by
dealers. Without dealer network the service division would be crippled not only for Carrier
but for any other company. Service is actually outsourced by the company on the basis of
revenue sharing model. The dealer keeps a larger share based on the agreement signed
and a share comes to the parent company. The dealers are also majorly responsible for
sales of the ACs. They are classified as:

WCCD(Willis Carrier Club Dealership)

ESSD(Exclusive Sales and Service Dealers)
MSSD(Multi-Brand Sales and Service Dealer)

BUSINESS PROBLEM:
31

The chronic business problem that Carrier is facing especially in Mumbai is Dealer
management. Whenever an AMC is signed with a customer between the dealer,
customer and company, the revenue has to be shared between the dealer and the
company on revenue sharing model 75%-25% respectively. The sharing ratio varies
when it comes to Toshiba (Digital Inverter, Vrf units) it is 40%-60% respectively. The
chronic problem is that the dealer is not sharing the contract information of the end user
with the company. Dealers are getting the AMC renewal themselves without sharing the
details with the company and hence the company is losing out on the revenue which
makes an important share all together. Attitude of dealers that once use to be procompany is now against and now have the idea that company has got no role to play
after warranty period. Reason is being understood as royalty or commission issues but in
a nutshell with regard to company DEALERS are now being considered as Unavoidable
Devils .

OBJECTIVE: To manage dealers so as to grab the share of revenue, get annual

maintenance contracts from end users directly and recover outstanding and bad debts.
The first thing to figure out is to know the reason for such an attitude and behaviour of
dealers. So, the instrumental reasons behind such attitude are:
1. Royalty issues- The dealer wants to establish himself as a recognised brand in the
market and hence needs visibility for which it needs to showcase its own work.
Hence royalty is one of the reasons.
2. Commission/margin issues- The dealer for a particular contract type is not getting
adequate share or is not happy with the share with regard to the quantum of work
allocated. Hence for an improved share the dealer tries to go through the unfair
means.
3. The rates/prices of AMC as offered by the company are quite high which
customers actually refrain to pay. Whether it be SPIS or SPMS the rates are
comparatively very high. So, the dealers who are actually the service providers
lower the rates acceptable to the customers and take the share completely
without informing the company.
4. Carrier has outsourced its services after sales wing and relies on dealers
completely. So even the dealers know there importance and the compulsion that
carrier has to face. They can actually blackmail them.
5. Also the service provision of Carrier as the customers feedback is not satisfactory
so the dealers have got another reason to downturn them and respect the
agreement to share the revenue. Hence then even dealers provide service at their
own disposal not being serious about the quality and thus affecting the image of
the company.
6. The dealers are fearless. They have an understanding that even though a matter
is escalated know strong penalization would take place so in absence of any strict
action they find no reason to improve.
7. Also, if the sales of the company is good and is giving good business to the
company, he uses this reason to not share the after sales generated revenue. So
it actually becomes sales figures Vs service figures.
8. Dealers understand that the time consumption in addressing issues of the
customers is more when it comes to company and hence they have a reason to
capitalize upon. Hence with the thought that customers have better control on
local dealers, dealers take advantage of this.
Above are the major reasons as to why dealers find valid not to share the contract
information with the company and hence keep the complete share with them.

32

Also, the reasons for not accepting the AMCs are:

Prices are relatively very high.

Own Team: The customer has his own team who can maintain and provide
services to the machines
Contract given to some other company: They got some better offer from some
other company so they gave contract to them.
Shortage of Fund: Customer is having shortage of fund to pay the annual
maintenance charges.
Based on Requirement Service (Call Basis): Customers does not need AMC instead
he is happy with paying Visit Charges.
Customer was not approached: The Reasons customer was not approached
because of two reasons:
1. Lack of Focus: The dealer or the CARL representative missed the particular
customers data.
2. Lack of Time: Due to lack of time, all the customers were not offered the AMC
on time.

AMC is stressed because that is the sole way to get the revenue firstly and secondly to
make sure that customers are being satisfied with the service quality. The service delight
which all service providers should aim for is through this.

Recovery of Outstanding:
Recovery of outstanding/ bad debts is a part of this process of service delivery. Whenever
an AMC is signed the end user has to make the payment in advance, or by mutual
consent partial in advance and remaining later.
The end user refrains from paying amount due to following reasons:

Unsatisfactory service from the dealer and hence the company

Services committed not provided at all
Consumers may have issues with the dealers and hence does not make payment
and thus nothing comes to the company.
End users make the payments to the dealers, but the dealer does not share
anything neither the revenue nor the information about it with the company.
Hence the company gets an insight for this as well.
This process is important so as to get back the revenue which actually belongs to
the company.

The Other Forms of Problem

Whenever the matter of not abiding the contract and agreement on the part of dealer is
escalated by the respective employee, it happens only when the matter is not getting
sorted at the local level, the attitude of the dealer is not changing nor there is any
improvement seen in the working methodology of the dealer. Even after repeated
reminders and threats if the dealer is still bypassing the company, the matter is
escalated to the senior management.
Here the issue gets sometimes complicated because then the sales figures and the
service figures are compared and if the dealer is doing pretty well on sales part, and also

33

then considering the relationship of the dealer with the company, the matter becomes
stagnant.
Apart from trying to solve the issue mutually at that level also and giving warnings, no
strict penalization happens as a result after a certain period of time the dealer again
starts with the same thing. So the instead of matter getting resolved it again remains as
it is becoming more chronic.

PROCEDURE FOR TACKLING THIS CHRONIC ISSUE ESPECIALLY IN MUMBAI:

The major reason why this issue became so chronic and is still getting fuel is that the
dealers are able to grab AMCs from the end users and hence are getting the revenue
which they are not sharing, not also the information about the same. So market research
via a survey from the end users that is clients was done in different parts of the city so as
to know that why the end users are preferring local dealers over the company, the issues
that they are facing, that whether they are getting there AMC renewed from the company
or not, if not convince them and help them understand the perks and benefits as well
comprehend the flaws on the companys side.
1. Get the Client list from the office for a particular dealer like SP Sanghvi.
2. Go and have a meeting with the client and note down the insights given by him as
per our questions.
3. Questions asked our like
Who is your dealer and when did you buy the machine?
Is your product under warranty/AMC?
If in AMC, who has the current AMC- Company, authorized dealer/ local
dealer?
If the AMC with company or authorized dealer, when is the next renewal?
Kindly continue with us. Any issues or complaints with the services or any
complaints unresolved?
If the AMC is with some local dealer, what is the reason behind such
switching? Note the issues and then assure him with improved services in
future. Take a note of next AMC renewal date without fail. It is essential to
contact him again one month prior to that date.
Feedback on services during the warranty period?
Check for any outstanding amount. If any, kindly check and note the
reason for holding the payment, if any service or performance related
issue it needs to be sorted on first place so as to get the payment.
If no issues as such persuade them to make the pending payments faster.
Many a times bills are not forwarded or are forwarded with wrong duration
as a result of which payments from the clients is not processed. So that
has to be taken care of.
It is important to collect the TDS certificate for the deductions that happen
at source so that remaining payment can be processed. So whenever a
client is contacted for outstanding TDS certificate is checked and collected.
4. Record all the feedbacks from the clients and take insights from them.
On first place report all the service related issues and grievances to the
concerned person so that have an idea about the area of action.
Insights like high price, poor service quality, poor customer management,
improper client servicing, poor checking control mechanism are to be
addressed essentially.

34

AMC database maintenance for existing and to grab those not with the
company currently.
Having meeting fixed with the dealer who has failed to provide proper
quality service to the clients and getting the service issues fixed along with
revenue sharing issues if any.

SOLUTION:
As mentioned before dealers are unavoidable devils in the present scenario. This
dealer network that was once and is still the spearhead for sales of the companies
strengthening the distribution channel, is now itself the reason for the bottlenecks
in the whole process flow. The revenue generators for the companies are now
themselves snatching the share from the company. This requires immediate
actions to control the issue for which following proactive measures are necessary:
1. End user is actually the face of the company and hence quality service to him
for his satisfaction, rather delight is the crucial factor here.
2. The start for this should be done with the way of signing the AMC during which
the end user, service provider and the company executive all need to be
present and give consent for the terms and conditions. This brings a sense of
ownership in all the three parties. If the third party is retailer then someone
from retailing side also be present.
Control on retailer in this way and others is important especially for Carrier
which requires a bit aggressive mode in the same way as Voltas does.
3. Revision of rates is an important activity to be done which requires a lot of
brainstorming from the companys side. In order to get back the previous
customers and also for new customers it is necessary to revise the rates so
that it becomes comparative to rates of local dealers.
This pricing technique would affect customer purchasing behaviour that by paying
a little more services can be experienced from the company or company
authorized dealers, so even they would get instigated to go for company services.
4. Email marketing, pamphlets, leaflets and brochures showcasing information
about the services under AMC, warranty with their price list and also informing
about side effects of getting services from a local dealer along with other
perks and advantages like service discounts can help a lot. A dedicated team
for this in Services can be really helpful.
5. Mumbai being a vast city, the services division should have Area Service
Inspector for different areas foe addressing service problems of clients in their
respective areas.
This is relatively new way used by some of the companies and are satisfied
with the results. This process brings a focussed approach and makes a
streamlined process. The executive has a particular area to focus upon and
can solve issues in a much more dedicated way. This would anyways require
addition of manpower and hence salary cost increases.
6. Another way is to target trade magazines, niche segments, architects,
consultants, events and conferences which is a form of advertising and
promotions which actually Carrier Midea does but Carrier does not believe in.
Even Kent and Aqua guard do this and is very beneficial in getting the
contracts that too for corporates. Promotions for services only can be very
helpful in getting the AMC. This increase the visibility and that is what would
actually catalyse the AMC sales.

35

7. The other alternative is to refine the service process of registering complaints

till providing the satisfactory services. Service delight is very essential in order
to get maximum contracts and downturn the notorious dealers.
This means immediate responses for registered complaints, giving a reference
number, providing fixed date and time for servicing, sending skilled
technicians to rectify the problems, taking feedback for the service, and then
again giving a call to confirm the performance. This needs technology
investment for service technicians and the complaint registering software and
related things. Technology can overall improve the time consumption in the
whole process and also the control mechanism.
8. Proper reporting of technicians before and after the service provision is really
important and that needs to be made more efficient. This feedback in
cohesion with customer feedback would give proper insight whether the issue
is solved or not. Hence an exact reporting and verification is a tool to improve
the services effectiveness.
9. In addition to all these measures still there will be dealers who would follow
their own ways and be a pain for the company. In that case clause in
agreements for breach of agreement and according penalization has to be
there. Penalization of dealers is an important task without which the chronic
issue would get never get solved. There has to be a fear in the minds of the
dealers for their ways to work and that would actually mend their ways.
When the matter is escalated it should be made sure by the company senior
staff to start with warnings and if required penalize them in some way so that
they improve their ways.
10. Commercial compliance is yet another important factor to be followed.
For all the above measures, it is important to add manpower to the
services team which would bring cost, but has to be enforced so as to
improve the services efficiency and effectiveness else the revenue is
missed.

36

Above all, first priority should always be to the relationship with the dealer, if the
matter can be sorted without any souring of relationships, that is the best thing.
Also the first method should be to lure them by giving them importance and
sometimes discounts as well.
Discounts or better margins help a lot because these are directly connected to the
dealer performance. When it comes to key accounts business for instance margins
are low and cash flow is slow, and hence dealer performance is okay but not
effective. Thus, if they are helped with discounts and margins they would fetch in
better results.
Another way to get this issue fixed is that Carrier should have its own team of
technicians which it already has but should give more stress on them. So for some
client if the dealer is not working properly or is not providing information, there
company can infuse in its own manpower and get the issue sorted.
This is a remedy and can be recruited for key accounts non-dealer business to
provide direct services.
When above mentioned point is implemented properly and on a wider scale, then
dealer management becomes smooth and then even they would consider.

Also then industrial/corporate/retail relations can be looked forward to. For instance, like
Kohinoor, Vijay Sales, Croma, E-zone, etc. can be approached that are multi brand
outlets. If these people agree to assure services from Carrier team or authorized dealer
only then it is an advantage for the company.
For exclusive brand stores this becomes easy.

KEY RESULT:
The result that is required is to generate the revenue which belongs to the company by
taking it back from the dealer, improve the revenue generation by getting more and
more of AMCs and that should be done by providing superior quality services to the
customer and hence bring service delight.
To get this above mentioned result, the provided solutions need to be implemented
efficiently seeing the feasibility. There shouldnt be any neglecting of service revenue as
it forms a really significant share.

Feasible Recommendations:
1. Revise rates after enough brainstorming
2. Service Delight and customer satisfaction, superior quality services in all respects.
3. Sense of ownership in all the three parties- company, client and dealer via
contract signing initiative.
4. Marketing activities like mailers, pamphlets, leaflets, target trade magazines,
niche segments, architects, consultants, events and conferences which is a form
of advertising and promotions.
5. Process efficiency improvement. Technology investment in software and
applications. This would reduce time consumption also.
6. Dealer management by penalization or rather first by strict measures who are not
ready to change their ways.
7. Proper training and reporting of technicians.
8. Discounts or better margins help a lot because these are directly connected to the
dealer performance.
9. Carrier should have its own team of technicians.

37

BIBLIOGRAPHY

38

CARRIER(2015, May 20).Website: http://www.carrierindia.com/

TECHSCIRESEARC(2015,June 5).Website.
http://www.techsciresearch.com/1804
Kotler,Philip.Marketing Management: A South Asian Perspective.New
Delhi,Pearson,2012
Ghemawat, Pankaj. Strategy and the Business Landscape.New
Delhi,Pearson,2013