Project Samarthya Memo

Date: CREATEDATE \@ "dddd, MMMM dd, yyyy" \* MERGEFORMAT Friday, June 15, 2012

Re: Project Samarthya – Future Blueprint Template (FBT) for Pilot

This memo outlines a draft FBT for Project Samarthya dealer visits. It includes both discussion points and areas of observation, to be used during dealer visits.

[Note – Prior to visiting dealerships, interviewers from the Monitor team will study the Micro Management ratings of individual dealer]

Hello, my name is and I have come here on behalf of Mahindra Two wheelers. Firstly, I would like to thank you for taking time out to speak with me. As would have informed you, the objective of this discussion is to understand how Mahindra Two Wheelers can support you in improving your current business performance and accelerating future growth and profitability. However, before we get into the discussion, I would like to give you a brief background.

A. Background & Context

Mahindra Two Wheelers (M2W) is playing to win in the two wheeler space, and has outlined its ambitions in Vision 2020. This vision includes being amongst the top 3-4 2W players, and having a significantly expanded product portfolio across scooters and motorcycles. To realize this vision, M2W has created a compelling and differentiated long-term strategy.

A critical part of this strategy is to build a future-ready dealership network by working closely with our dealers to help them improve their current business, and develop capabilities required to manage an expanded scale and product portfolio. To execute on this, Mahindra two Wheelers has appointed the Monitor Group / and I am part of that team. I am closely working with and will be visiting all important dealers in this area to collect feedback and suggestions.

As a part of this initiative, we would like your feedback and suggestions on how M2W can help you improve your current business, enable future growth and profitability and also discuss how you can support Mahindra Two Wheelers in achieving Vision 2020, and being amongst the top 3-4 players in India.

B. Dealer Profile & Mindset

For how many years have you been in the auto / 2W dealership business?

Besides M2W, do you have any other dealerships ? If yes;

Could you tell us what kinds of dealerships these are?

Four-wheeler / Other Auto

Are these also in the same area / town?

Number of vehicles / month

Do you have any other businesses apart from dealerships?

When did you take up the M2W dealership? Were you a Kinetic dealer prior to this?

Why did you choose to become a M2W dealer?

Strong Mahindra brand

How has your experience with M2W been so far ?

What have been the positive aspects of the relationship?

Guidance from sales team

Guidance from service team

What do you think could have been better?

Guidance from sales team

Guidance from service team

How do you feel about the amount of time you are currently able to spend on the M2W dealership? Do you see any need for changing your level of involvement?

Amount of time devoted satisfactory

Need to increase time devoted

Need to decrease time devoted

How do you see the M2W dealership evolving, as a part of your portfolio?

Will become more important

Will become less important

Have you hired other personnel to manage the dealership (Y / N)? If yes;

Are these positions recent additions?

Could you tell us what drove this hiring decision – need to support expansion, (b) need to focus on other businesses, or (c) need to add sales expertise?

In your view, has hiring a manager helped in driving sales ?

Have you considered taking some steps/ initiative to capitalize on these opportunities? What has been the outcome?

What specific support and help can M2W provide you to help capture these opportunities?

How can M2W to support you in achieving your long term goals?

C. Market & Competitive Assessment

Have you seen rising incomes ?

Growth in infrastructure / industries ?

New colleges/ offices ?

More women becoming independent/ working ?

Greater purchasing power among youth ?

Have there been differences in growth between scooters and motorcycles? Both growing equally; (b) Scooters growing faster than MCY; (c) MCY growing faster than scooters)

New product technologies

Products for specific segments

Who do you consider to be M2W’s key competitors? Hero; (b) Honda; (c) Suzuki; (d) TVS; (e) Yamaha

How many of our competitors’ dealerships exist in this area / town? Hero; (b) Honda; (c) Suzuki; (d) TVS; (e) Yamaha)

Have competitors’ locations impacted their sales ?

Has the presence of competitors in the area affected your sales ?

What can you do to improve sales?

Better financing plans

Better dealer support by company

Superior sales processes

Better financing plans

Better dealer support by company

Superior sales processes

D. Physical and Human Assets

Expanding showroom / workshop further

Opening new showroom / workshop

Recruiting sub-dealer

At what level of inventory do you usually reorder? What is the typical order size?

What proportion of your stock is paid, vs. unpaid?

What is the ordering process? Call SO and place order; (b) Fill order form and send to regional office; (c) Fill order form and send online; (d) Through order software)

Have you experienced any issues in delivery?

Of your total inventory today, how many units are the old Duro? Are you having trouble selling them now ? How many months do you estimate it will take to sell them?

What steps are you taking to address this issue?

Not stocking Duro DZ till Duro sold

Offering salesmen incentives to sell old Duro

Using for spare parts

Admin, billing, etc ?

Maintaining customer records ?

Following up on enquiries ?

Transacting with M2W (Y / N)?

On the sales side, is there a sales manager ?

Is there a workshop manager ? What about a workshop supervisor (Y / N)?

What is the minimum education level?

Sales: Graduate; (b) Diploma; (c) 12th Pass; (d) 10th pass; (e) Lower than 10th

Workshop: Engineer; (b) Diploma; (c) 12th Pass; (d) 10th pass; (e) Lower than 10th

What has the attrition rate been over the last year? High (greater than 25%); (b) Medium (10%-25%); (c) Low (less than 10%)

What do you think is driving this trend? (a) Low wages; (b) Less growth potential; (c) Moving to competitors; (d) Other (Details)

Why is the attrition low? (a) High wages; (b) Strong relationship with owner / manager; (c) Growth potential; (d) Other (Details)

Do you plan to hire any additional employees in the near future ?

If yes, at what levels are you looking to hire? Sales Manager; (b) Workshop Manager / Supervisor; (c) Sales employee; (d) Workshop employee

What kinds of training are offered at dealership?

For new recruits: No training; (b) By dealer; (c) By M2W – at dealer; (d) By M2W – centrally

For new products: No training; (b) By dealer; (c) By M2W – at dealer; (d) By M2W – centrally

Periodic sales training: No training; (b) By dealer; (c) By M2W – at dealer; (d) By M2W – centrally

Periodic workshop training: No training; (b) By dealer; (c) By M2W – at dealer; (d) By M2W – centrally

If training offered by M2W, who pays for expenses? Dealer; (b) M2W; (c) Shared

Do you offer performance incentives to your personnel?

Sales / other Front-end

How would you rate a typical M2W dealership’s manpower quality with respect to our key competitors ?

How does this compare with our key competitors ?

If rising, what are the drivers?

If falling, what are the drivers? [ Product issues; (b) Competitive pressures; (c) Weak Economy; (d) Other (Details)

What are the benefits you receive from the company?

Greater guidance from company

Increased marketing support

Financial support for expansion

What do you feel are some of the key aspects on which you are doing better than other M2W dealers nearby ?

Marketing initiatives

Customer Service / After-sales

What are some of the best practices of other M2W dealers that you could consider replicating?

How did you hear about these practices?

Do you feel threatened by other M2W dealers ? Why?

Company looking to recruit new dealer near your outlet

Other M2W dealer opening sub-dealership near your outlet

Price discounting by other M2W dealer

What is the number of walk-ins you typically receive / month at your dealership? Have you seen an increase in recent months ?

What do you see as some effective ways of increasing inquires/ walk-ins that you have used ?

Choice of attractive location

Local language collateral

Service camps / training local mechanics

Use of opinion leaders

Could you tell us the approximate conversion ratio of walk-ins at your dealership? Have you seen an increase in this metric over last few months?

What activities are you doing to drive conversion ?

Does your dealership have personnel from finance companies present at all times, to offer financing ?

What type of support does M2W provide in making your initiatives successful?

Support in marketing budget

Marketing collateral

Are there any innovative activities that you have seen competition implementing to drive walk-ins / conversion, which you can learn from?

How integrated are you and the company today, in conducting marketing / other activities to drive sales

How do you handle sales queries / walk-ins– could you describe the process?

Salesman approaches customer as soon as he walks in

Offers seat, water to drink, etc

Tries to understand whom the 2W is for, reason for purchase, etc

Suggests appropriate 2W

Explains specifications

Offers product brochure

Follows up later, at least three times

Discusses financing, etc

Tries to close purchase

Does the sales process vary for different type of customers?

What steps do you plan to take to further improve profitability?

Reduce marketing spend

Lower personnel costs

What support can M2W provide you on this front?

Support in marketing budget

How does your profitability compare with competitors’ dealers ?

What do you see as some effective ways of getting your customers to get their vehicle serviced at your workshop, as opposed to a local mechanic?

Value-added services – e.g. pickup from home / office

Annual maintenance contracts

Discounts on specific parts / types of work

Customer education on benefits of servicing at workshop

Tie-ups with local mechanics

What is the typical lead time of servicing for different types of requests? Do you know how this compares with other M2W dealers ?

How good is the availability of required spares at your dealership ?

F. Future Improvements

In your opinion, what will you need to do, to ensure that you get the maximum benefit from these new launches?

Expand showroom / create new outlets

Create segment-specific showrooms / sections

Conduct greater amount of marketing / customer awareness programs

How can M2W support you as you prepare yourself for managing the expanded product portfolio?

Greater support from SO, service engineer and RM

Focused training of employees

Financial support in expansion

Is there anything else you would like to discuss/ share?

Thank you so much for your valuable inputs. We will incorporate your feedback and suggestions in our final report which will be presented to the M2W senior management team.

As we wrap up, I was wondering if it would be possible for me to take a quick tour of your dealership and take a couple of photographs.

G. Observation

Following aspects to be observed and rated on 1-5, where 1 = Very poor; 5 = Excellent:

Brochures available for all products ?

Company brochures in local language ?

Dealer brochures / ads in local language ?

Quality of dealer ads

Directions for taking photograph

Word-Import - 1