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1 SERVICE PERFORMANCE OF YAMAHA MOTOR EXCLUSIVE RETAILS IN MALAYSIA CHEONG KOK LOONG FACULTY OF BUSINESS AND ACCOUNTANCY UNIVERSITY OF MALAYA JUNE 2009

Transcript of service performance of yamaha motor exclusive retails in malaysia ...

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SERVICE PERFORMANCE OF

YAMAHA MOTOR EXCLUSIVE RETAILS IN MALAYSIA

CHEONG KOK LOONG

FACULTY OF BUSINESS AND ACCOUNTANCY

UNIVERSITY OF MALAYA

JUNE 2009

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Service Performance of Yamaha Motor Exclusive Retails in Malaysia

(Consultancy-Type Research)

Cheong Kok Loong

Bachelor of Public Management Universiti Utara Malaysia

2000

Submitted to the Graduate School of Business Faculty of Business and Accountancy

University of Malaya, in partial fulfilment of the requirements for the Degree of Master of Business

Administration

June 2009

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ABSTRACT

Hong Leong Yamaha Motor Sdn. Bhd. started in 1978, venture into the

manufacturing, assembling and marketing of Yamaha motorcycles in Malaysia. Since

then, Yamaha has emerged as a market leader through strong brand imaging,

innovative model planning, promotional and customer orientation programmes as well

as the development of a strong and extensive dealer network. Today, Yamaha's line of

products has been nurtured by a desire towards building products and initiating

services that truly fit the needs of the times, creating value beyond the expectations of

customers.

Intensive concentration on identified weaknesses and reconstruction of marketing

services strategies for 2009 has been emphasized by enforcing service quality in all

aspects of service encounter, which consists effective solutions, redefining strategic

roles for dealers, ensure action plan is implemented in stages, to sustain customer

retention, stepping up the corporate brand equity and reduce the service gaps between

Customer Satisfaction Index (CSI) and national average.

The predicted strategic issues that were contributing to the inconsistency and

fluctuating of CSI over the years might be due to the ever changing customer mindset

of being self-service and diversification. Moreover, dealers’ commitment to

enhancing customers’ confidence tends to affect the overall service performance,

which will reflect customer loyalty and switching behaviour in the future. Currently,

the Customer Satisfaction Index decreased 0.9 percent to 83.9 percent in 2008 and

Customer Loyalty index increased 3.7 percent to 89.7 percent in 2008. The total

identification of weaknesses is twenty three (23) that require improvement and eleven

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(11) factors have been prioritized as they are deemed critical. These are derived from

sales person attributes followed by delivery attributes, maintenance service attributes

and shop attributes.

The weakest factors of the attributes will be rectified by using three (3) core strategies

which derived from Condition Quality, People Quality and System Quality. The

tactical approaches for each core strategy comprise the following:

• To increase frequency of monitoring and enforcement (improve condition

quality).

• To educate and train to overcome weakness (improve people quality).

• To educate and train to implement proper set up and documentation (improve

system quality).

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ACKNOWLEDGEMENTS I would like to express my gratitude to my supervisor of my research project,

Professor Madya Dr. Sharifah Latifah for her patience, support and guidance given on

my research area on Service Performance of Yamaha Motor Exclusive Retails in

Malaysia. Despite the difficulties encountered in my research due to meticulous works

involved and constraints in getting complete customer database needed in this study, I

am glad to be able to complete my research project on time under the intellectual

guidance and share of research experiences by Professor Madya Dr. Sharifah Latifah.

A special thanks to Mr. Leong King Choon, General Manager, Sales and Marketing of

Hong Yamaha Motor Sdn. Bhd. and Mr. Kirishnamoorthie, CSR Manager who have

provided their professional insights to me as well as the rights to use the company

databases for academic purposes. Besides, a million of thanks to my beloved family

for their unconditional supports and understanding despite of my less time with them

due to my busy schedule for both work and research project. Appreciation is also

dedicated to my superior and colleagues at work for their support and understanding

during my entire MBA course period.

Last but not least, I would also like to express my appreciation to my fellow MBA

coursemates who have accompanied me for the whole MBA course with joy and

unforgettable memories. Special thanks to Ms. Lim Wei Ling who has provided her

assistance and support to me during my journey of completing this research project.

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TABLE OF CONTENTS

ABSTRACT i

ACKNOWLEDGEMENTS iii

LIST OF FIGURES vi

LIST OF TABLES vi

CHAPTER 1 COMPANY PROFILE 1

1.1 HLYM Philosophy 1

1.2 Strategic Issue 2

CHAPTER 2 OBJECTIVE AND RATIONALE 5

2.1 Justification of Consultancy-Type Research 5

2.2 Focus of Consultancy-Type Research 8

CHAPTER 3 SITUATIONAL ANALYSIS 10

3.1 Competitive Analysis 10

3.1.1 Industry Dominant Traits 10

3.1.2 Retail Network Overview 13

3.1.3 Motorcycle Exclusive Retail in Malaysia 15

3.1.4 Life Cycle Implication 16

3.1.5 Retail Brand Positioning 18

3.1.6 Corporate Brand Overview 19

3.2 Strategy Review 22

CHAPTER 4 CSI SURVEY CONDUCTED BY HLYM FOR 2008 25

4.1 Data Collection by HLYM 26

4.2 HLYM CSI (Parameter & Factor) 28

4.2.1 Sales Person Attributes 30

4.2.2 Shop Attributes 31

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4.2.3 Delivery Attributes 31

4.2.4 Maintenance Service Attributes 32

4.2.5 Un-weighed CSI 32

4.2.6 Customer Loyalty Index 33

4.3 Descriptive Statistic 33

4.4 CSI Results 35

CHAPTER 5 DISCUSSIONS; RECAPITULATION OF ANALYSIS 44

CHAPTER 6 RECOMMENDATIONS 46

6.1 Performance Matrix Introduction 46

6.2 Justification on the Service Gaps 47

6.3 Action Plans; Tactical Approaches 54

6.4 Implementation and Scheduling 63

6.5 Milestone of Implementation 65

6.6 Sales Projection and Cost Benefit Analysis 67

CHAPTER 7 RISK MGMT & CONTIGENCY PLANNING 69

7.1 Justification of Potential Risks 69

7.2 Methodology of Identifying Potential Risks 70

7.3 Contingency Strategy 71

CHAPTER 8 CONCLUSIONS 74

8.1 Overall Summary 74

8.2 Scheduling and Milestone Recommendation 75

REFERENCES 77

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LIST OF FIGURES Figure Subject Page

Figure 1.1 HLYM Customer Satisfaction Index, 2005-2007 4Figure 3.1 Market Share Overview, 1970-1999 11Figure 3.2 Market Share Overview, 2000-2007 12Figure 3.3 Motorcycle Dealerships, 2000-2007 14Figure 3.4 Motorcycle Dealerships by Brand, 2000-2007 14Figure 3.5 Motorcycle Exclusive Retails; Life Cycle Implication, 2008 17Figure 3.6 Motorcycle Exclusive Retails, 2000-2007 17Figure 3.7 Retail Brand Positioning, 2008 18Figure 3.8 Marketing Services Strategy Overview, 2007 22Figure 3.9 Action Plan, 2008 24Figure 4.1 Customer Satisfaction Index Survey Flow Chart 27Figure 4.2 HLYM Customer Satisfaction Index; Parameters and Factors 29Figure 4.3 Customer Loyalty Index; Factors 29Figure 4.4 Gender and Marital Status 34Figure 4.5 Age Range and Income level 35Figure 4.6 Education level 35Figure 4.7 Trend Line of Indices, HLYM CSI, 2005-2008 37Figure 4.8 Service Performances Scores and Value Changes, 2006-2008 38Figure 4.9 Delivery Attributes, 2008 versus 2007 39Figure 4.10 Shop Attributes, 2008 versus 2007 39Figure 4.11 Sales Person Attributes, 2008 versus 2007 40Figure 4.12 Maintenance Service Attributes, 2008 versus 2007 41Figure 4.13 Customer Satisfaction Index by Dealers; 2008 versus 2007 42Figure 4.14 Customer Loyalty Index by Dealers; 2008 versus 2007 42Figure 4.15 Total Stores Below National Average of CSI and Loyalty Index, 2008 43Figure 6.1 Sales Person Attributes against National Average 50Figure 6.2 Shop Attributes against National Average 51Figure 6.3 Delivery Attributes against National Average 51Figure 6.4 Maintenance Service Attributes against National Average 52Figure 6.5 Customer and Community Satisfaction Core Strategy 55Figure 6.6 Strategy Overview for the year of 2009 62Figure 6.7 Indices for the year of 2008; National CSI and Loyaty Index 63Figure 6.8 Execution Plan for the year of 2009 64Figure 6.9 Trend Line Projection, 2005-2010 67Figure 6.10 Sales Projection & Cost Benefit Analysis, 2005-2010 68Figure 7.1 Risk Management and Contingency Planning, 2009 73

LIST OF TABLES Table Subject Page

Table 3.1 Operating Standard Audit and Customer Satisfaction Index, 2007 22Table 4.1 Un-weighted Service Performance Scores, 2008 36Table 4.2 Customer Loyalty Index and Factors, 2008 versus 2007 37Table 6.1 Service Performances; 2008 versus 2007 and Scores versus National Average 48Table 6.2 Shortlisted Factors with Negative Value Changes in 2008 49Table 6.3 Unfavourable Factors with Scores Below National Average in 2008 53Table 6.4 Factors with Negative Value Changes and Below National Average in 2008 53

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CHAPTER 1: COMPANY PROFILE

Hong Leong Yamaha's humble beginnings started in 1978, when Hong Leong

Industries Bhd. & Yamaha Motor Co Ltd of Japan signed a franchise agreement to

venture into the manufacturing, assembling and marketing of Yamaha motorcycles in

Malaysia. Since then, Yamaha has emerged as a market leader through strong brand

imaging, innovative model planning, promotional and customer orientation

programmes as well as the development of a strong and extensive dealer network.

The commitment to innovation was coupled with an enterprising spirit that led Hong

Leong Yamaha Motor (HLYM) to move aggressively towards achieving its "One-

Millionth Bike Out" 15 years later in January 1994, and strong brand equity through

excellent services provided by its dealer network. Today, Yamaha has in its stable a

six model line-up ranging from mopeds to ‘streets’, featuring Yamaha's 2-stroke and

4-stroke technology. Yamaha's line of products has been nurtured by a desire towards

building products and initiating services that truly fit the needs of the times, creating

value beyond the expectations of customers.

1.1 HLYM PHILOSOPHY

HLYM philosophy consists of three (3) main statements – vision, mission and value.

The vision statement emphasizes the achievement of being a market leader in terms of

market share and position as a competitive global manufacturer of quality and

innovative motorcycles.

While the mission statement for HLYM ensures the priority of providing quality

motorcycles and services at competitive prices through product leadership for

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customers’ lifestyle improvement, the value statement is a supporting element

towards achievement of the market share, which derives from value-added activities

such as product innovation, process improvement and customer service.

1.2 STRATEGIC ISSUE

Retail brand differentiation is a point of strategic movement in order to compete for a

better market share. Continuous improvement in customer service (before, during and

after sales) provided by Yamaha Motor exclusive retails will be the most practical

differentiation movement to enhance customer satisfaction. Customer loyalty and

brand retention in the future relies positively on customer satisfaction towards service

performance of Yamaha Motor exclusive retails.

An analysis was conducted on the historical record of un-weighted HLYM CSI (Hong

Leong Yamaha Motor Customer Satisfaction Index). HLYM CSI was growing

gradually from year to year due to the improvement of customer service provided by

Yamaha Motor exclusive retails and most of the customers were satisfied with the

service performance. Un-weighted CSI for the years 2005, 2006 and 2007 were 67.3

percent, 74.0 percent and 84.8 percent, respectively, representing a 17.5 percent

increase in total from 2005 to 2007 (refer to Figure 1.1).

The Customer Loyalty Index has shown its inconsistent pattern when comparing it

with the CSI pattern, which is supposed to be in the same direction. The Customer

Loyalty Index in 2005 was 89.5 percent but plummeted to 84.5 percent in 2006 before

rising to 86.0 percent in 2007. As such, the moving trends of both indices from 2005

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to 2007 were unparallel and have contributed to unhealthy signs in Yamaha Motor

exclusive retails’ status in Malaysia; customer loyalty is inconsistent and fluctuating.

However, the strategic issues that caused the inconsistency and fluctuation of

Customer Loyalty Index in 2007, might be due to the existence of Boon Siew

Honda’s retail network strategy; a similar implementation of an exclusive retailing

programme, namely, Honda 4S retails, giving a wide range of sales attractions to

motorcyclists. In addition, the ever-changing customer mindset of being self-service

and diversified market has influenced the pattern of the index as well.

Moreover, the lack of dealers’ commitment to enhance customer confidence tends to

cause low customer intention to recommend to other friends and repeat-purchases in

the future. In this context, the level of service performance perceived by Yamaha

customers was predicted to decrease in 2008 and it might be hard to convince Yamaha

customers to stay loyal or return to the store. Lastly, this will cause a possibility of

switching behaviour to other brands in the future.

Subsequently, un-weighted HLYM CSI for 2008 will be updated and the effectiveness

of marketing service strategies implemented in 2008 will be evaluated as well. If any

decreasing value of indices is discovered from the evaluation, a critical concentration

on the rectification of weaknesses and a reconstruction of marketing service strategies

for 2009 will be executed.

Strategically, the Customer Satisfaction Index and Customer Loyalty Index of

Yamaha Motor exclusive retails in 2008 targeted a range of 85 percent to 90 percent,

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which could denote a good sign of sustaining strong brand position in the consumers’

mind as commented by the Marketing Services Manager, HLYM and, therefore, the

critical success factor in retaining customer loyalty in the Yamaha brand in the future

is to ensure the fulfilment of customer expectations of service performance.

HLYM Customer Satisfaction Index; 2005-2008

86.0%84.5%

89.5%

84.8%

74.0%

67.3%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

2005 2006 2007

Customer Loyalty CSI (PLS technique for 2008)Customer Satisfaction Index

HLYM Customer Satisfaction Index; 2005-2008

86.0%84.5%

89.5%

84.8%

74.0%

67.3%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

2005 2006 2007

Customer Loyalty CSI (PLS technique for 2008)Customer Satisfaction Index

HLYM Customer Satisfaction Index; 2005-2007HLYM Customer Satisfaction Index; 2005-2008

86.0%84.5%

89.5%

84.8%

74.0%

67.3%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

2005 2006 2007

Customer Loyalty CSI (PLS technique for 2008)Customer Satisfaction Index

HLYM Customer Satisfaction Index; 2005-2008

86.0%84.5%

89.5%

84.8%

74.0%

67.3%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

2005 2006 2007

Customer Loyalty CSI (PLS technique for 2008)Customer Satisfaction Index

HLYM Customer Satisfaction Index; 2005-2007

Un‐weighted CSI

Source: Marketing Services, CSI Historical Records, HLYM Sdn. Bhd.

Figure 1.1: HLYM Customer Satisfaction Index, 2005-2007

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CHAPTER 2: OBJECTIVE AND RATIONALE

An effective consultancy will be conducted by producing bundles of reliable solutions

(marketing services strategies) in order to improve customer service and educate

dealers in taking the initiative in rectifying service failures to enhance customer

satisfaction. Thus, the objectives of this consultancy are elaborated as follows:

1. To minimise the service gaps of service performance by developing an

effective action plan.

2. To redefine strategic roles of Yamaha Motor exclusive dealers by educating

them through effective customer service training programmes.

3. To enhance regular monitoring with the assistance of regional sales office in

order to provide effective enforcement.

4. To evaluate service performance of Yamaha Motor exclusive retails by

justifying weaknesses in area of physical evidence, customer services and

service delivery process.

2.1 JUSTIFICATION OF CONSULTANCY-TYPE RESEARCH

Recently, Yamaha Motor exclusive retails in Malaysia have experienced serious

challenges from their competitors who are also emphasising good quality customer

service to enhance their corporate brand equity. Hong Leong Yamaha Motor (HLYM)

initiated the exclusive retails programme in Malaysia quite some time ago as an

upgrading scheme, evolving from the status of YBS (Yamaha before service) and 3S

concepts retail (Sales, Service and Spare parts).

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Motorcycle exclusive retails in Malaysia implements a single-brand concept store in

the market with its own specific retail programme and standard operating procedures

(SOP); symbolizing corporate brand through systematic delivery and exclusive

service (before, during and after sales) to the end users in order to create customer

loyalty and retention in the future.

Generally, many competitors were implementing a similar strategy such as Honda,

Modenas and Suzuki. During the 1990s, the first manufacturer who executed this

exclusive retail programme was Modenas and their movement has greatly affected

HLYM’s performance. However, the feedback from motorcyclists towards quality of

customer service provided by competitors was quite distinct from the quality provided

by Yamaha exclusive retails until the present.

Yamaha Motor exclusive retails were affected by many hits from major competitors

in early 2007 including when Boon Siew Honda and Suzuki Japan started their

competitive movements to enhance retail brand image (provide better customer

service) to compete with Yamaha Motor. Modenas’ efforts appeared feeble in this

game due to the lack of internal coordination. Currently, Yamaha Motor’s main

challenger in terms of the retail brand war is Honda.

According to the Marketing Services Manager, HLYM, Yamaha Motor exclusive

retails are the most outstanding exclusive retail network compared with other rivals

because HLYM has improved this strategy from time to time in order to sustain the

highly consumer-based brand equity of Yamaha. The actual denotation of Yamaha

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Motor exclusive retails in Malaysia is Yamaha Star Shops (an upgraded version of the

3S concept retails and YBS).

The most vital element to sustain and step up the overall corporate brand equity is to

manage corporate brand through improving customer experiences on services.

Implementation of effective customer service (before, during and after sales) provided

by motorcycle exclusive retails are considered a critical success factor in order to

leverage customer satisfaction. The succinct statement to define the style of service

experiences is customer satisfaction (General Manager of Sales & Marketing, HLYM,

2008).

The impending customer satisfaction in corporate branding could be measured

quantitatively by using an un-weighted Customer Satisfaction Index (CSI), the result

of which will be derived from the patterns of overall service performance. Thus,

customer satisfaction is a key to influence the overall corporate brand equity of

Yamaha Motors over time (Marketing Services Manager, HLYM, 2008).

In view of the current challenges faced by HLYM, which may adversely affect its

current market position, it is, therefore, crucial to justify the area of customer service

failures and review the current application of the action plan in order to produce an

effective consultancy.

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2.2 FOCUS OF CONSULTANCY-TYPE RESEARCH

The main purpose of providing consultancy is to develop an effective marketing

services strategy (action plan) and research customer service performance provided by

Yamaha Motor exclusive retails in Malaysia.

Nowadays, many informed customers are able to observe the level of service

performance of retailers in providing good customer service (before, during and after

sales) and, therefore, an analysis would be focused on identifying service failures in

terms of sales person attributes (People Quality), shop attributes (Condition Quality),

delivery attributes (System Quality) and maintenance service attributes (System and

People Quality). Undoubtedly, feedback and satisfaction levels of Yamaha customers

are very important and should be tracked to create repeat-purchase decisions in the

future.

Customer satisfaction towards brand meaning and product performance is not as

crucial as service performance because the perception of brand meaning by

motorcyclists is very good in terms of being well established; exist to deliver most of

the benefits as promised such as performance, quality, reliability and efficiency of

warranty system.

A competitive action plan that denotes continuous improvement in customer service

(before, during and after sales) will be stressed in the research by producing bundles

of effective strategies that will ensure it is adaptive in the business environment. A

sustainable competitive advantage through fulfilling customer expectation towards

overall service performance will result in customer retention in the future. Thus,

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customer service, which houses customer satisfaction and customer loyalty, will be

the main focus in the consultancy research.

Subsequently, measuring the service performance of Yamaha Motor exclusive retails

will be conducted meticulously by identifying the major service defects (gaps) as well

as examining the impact on customer loyalty. Index calculations or un-weighted CSI

will be used in the process of measuring and justifying service performance defects.

CSI is a standard methodology that is granted and integrated into the HLYM Quality

Management System (ISO 9001:2000). The method of data collection is through

implementing a customer survey (structured interviews with quantitative

questionnaires) and will be conducted by the HLYM team at Yamaha Motor exclusive

retails covering Northern, Southern, Central and East Malaysia.

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CHAPTER 3: SITUATIONAL ANALYSIS

Hong Leong Yamaha Motor (HLYM) has been operating for more than 25 years in

Malaysia with tremendous production to meet local market demand and the niche

market in Singapore. A few market leaders have emerged since 1970 in Malaysia’s

motorcycle industry, namely, Honda, Yamaha, Suzuki and Modenas.

3.1 COMPETITIVE ANALYSIS

Competitive analysis specifically analyses the patterns of competencies amongst

market players within the same industry to observe their positioning in the market

place and the performance of each player in sustaining its market share and

competitive advantage. These analyses consist of industry dominant traits, retail

network overview, motorcycle exclusive retail network, life cycle implication, retail

brand positioning and corporate brand overview,

3.1.1 Industry Dominant Traits

Boon Siew Sdn Bhd, a manufacturer of Honda motorcycles has dominated the market

over the years until the present, except in the 1980s when Yamaha overtook it.

Yamaha became the market leader in the 1980s through the production of two (2)

stroke engines (refer to Figure 3.1) and obtained 49 percent of the market share on

average.

However, Honda motorcycles regained its position as a market leader in the 1990s

with more than 43 percent of the market share when the Malaysian government

promoted a green project encouraging and supporting four (4) stroke engines due to

cleaner emissions compared to the two (2) stroke engines produced by Yamaha.

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Meanwhile, Modenas emerged into the motorcycle industry during the mid 1990s,

and was considered as the national motorcycle, producing a wide selection of reliable

products to meet local demand. Modenas was supported by the government in certain

collaborations as well as joint ventures, which had reputedly positioned it in first

place with an average of 40 percent of the market share due to the implementation of

competitive pricing and good quality motorcycles. Subsequently, Honda gained and

positioned itself in second position in terms of market share, while Yamaha, whose

market shares had plummeted, only obtained an average of 21 percent.

Market Share Overview, 1970-199955%

45%

34%

39%

49%

21%

5% 5% 4%1% 1% 1%

40%

0%

10%

20%

30%

40%

50%

60%

1970s 1980s 1990s

Mar

ket S

hare

Honda Yamaha Suzuki Others Modenas

Source: Marketing Services, Historical Records of Motorcycle Retail Demand in Malaysia, HLYM Sdn. Bhd.

Figure 3.1: Market Share Overview (1970-1999)

All market leaders started to meet new challenges from 2002 onwards, being affected

by motorcycle brands from the new entrants of China and Taiwan into the Malaysian

market, including Comel, Nitro, Cito and Sinki (refer to Figure 3.2). The Chinese-

brand motorcycle had won its great position as a low cost brand and threatened the

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established motorcycle brands in Malaysia such as Yamaha, Honda, Modenas, Suzuki

and other small brands such as MZ, Demak, Naza, Momos and BKZ.

Between 2002 and 2003, the Chinese-brand motorcycle had achieved an average of

2.5 percent of the market share increasing to 8.0 percent in 2004 but plummeted

drastically in 2005 until the present. The market share of the major manufacturers

such as Yamaha, Honda, Modenas and Suzuki was not so significantly affected by the

Chinese-brand motorcycle due to customer loyalty towards the brands.

The critical period faced by the Chinese-brand motorcycle, from 2005 onwards, was

due to quality and reliability issues. This scenario gave an opportunity to Yamaha and

Honda to rejuvenate their position and market share. However, Suzuki and Modenas

did not show any progress or improvement due to disinclination of sustaining its

market share. In 2007 Yamaha and Honda sustained their position as the main market

leaders with an average of 35 percent and 48 percent of the market share, respectively.

Market Share Overview, 2000-2007

19.6%21.6%

16.5%

20.8%

17.2%

30.5%

20.8%

34.9%

32.1%31.0%29.4% 29.4%

40.2%42.7%

46.1%47.7%

9.7%

14.2%

22.6%

26.0%

39.1%39.1%39.9%

43.1%

2.2%2.4%2.4%4.1%

7.9%7.9%8.3%8.6%

1.7%3.1%5.3%

8.0%

2.5%2.5%3.5%3.6%5.2%5.3%

0.2%0.2%0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

2000 2001 2002 2003 2004 2005 2006 2007

Mar

ket S

hare

Yamaha Honda Modenas Suzuki Chinese-Brand Others

Source: Marketing Services, Historical Records of Motorcycle Retail Demand in Malaysia, HLYM Sdn. Bhd.

Figure 3.2: Market Share Overview (2000-2007)

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3.1.2 Retail Network Overview

The distribution channel for motorcycles in the Malaysian market mostly consisted of

the multi-brands concept rather than the single-brand concept and the supply is

derived from the collaboration between manufacturers and retailers (dealers) through

dealership alliances. The eminent brands of dealerships that have reigned until the

present comprise Yamaha, Honda and Suzuki. A clear cut function of these dealers is

to engage a systematic delivery facility to the end users through providing services,

spare parts and sales (3S), which relate to before, during and after sales service.

Currently, there are 1,400 dealerships for the whole nation of Peninsula and East

Malaysia. However, from this large sum of dealerships in Malaysia, the actual total of

retails or outlets (stores) is considerably less. It might be only 300-400 stores due to

the implementation of the multi-brand concept by dealers who possess more than one

(1) dealership per store.

As shown in Figure 3.3, the progress of motorcycle dealership applications was quite

constant every year. In 2002, some dealers had moved out from the industry and new

applicants were starting to move in from 2003 until present. The movement of

industry retail demand was favourable with its drastic surge from 2004 onwards. The

main factor that had contributed to the stagnant progress of dealership applications

over industry retail demand was due to the high barrier of entry mode, which required

a large capital expenditure in order to obtain a dealership.

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Motorcycle Dealerships, 2000-2007

484,376449,556433,389

398,246

229,562229,562238,163238,378

1438144714461432

1412

97610351084

0

100000

200000

300000

400000

500000

600000

2000 2001 2002 2003 2004 2005 2006 2007

Indu

stry

Ret

ail D

eman

d

0

200

400

600

800

1000

1200

1400

1600

Mot

orcy

cle

Dea

lers

hips

Industry Retail Demand Motorcyle Dealerships

Source: Marketing Services, Historical Records of Motorcycle Dealerships in Malaysia, HLYM Sdn. Bhd.

Figure 3.3: Motorcycle Dealerships (2000-2007)

In Malaysia, Boon Siew Honda has dominated the market most of the time with its

highest market share in terms of dealerships. The Chinese-brand dealership was the

second largest due to the linear implementation of dealership policy. Hong Leong

Yamaha Motor dealership was positioned after the Chinese-brand dealership followed

by Modenas, Suzuki, Kawasaki and others (refer to Figure 3.4). Apparently, the

motorcycle market in Malaysia was quite fragmented by the implications of multi-

brand retails, which creates a wide selection of motorcycle brands for motorcyclists.

Motorcycle Dealerships By Brand, 2000-2007

215209205208205199211

221

354338

319 329 333 333 334 341

206197

186 191 194 196 198 192

230 219207

213 216 222 224

207

687071696873 70 66

257 260 267 260 260

150 152 152 152 155

50

100

150

200

250

300

350

2000 2001 2002 2003 2004 2005 2006 2007

Dea

lers

hip

Yamaha Honda Suzuki Modenas Kawasaki Chinese-Brand Others

Motorcycle Dealerships, 2007

Yamaha 15%

Honda 22%

Suzuki 14%

Modenas 15%

Kawasaki5%

Chinese-Brand18%

Others11%

Yamaha Honda Suzuki Modenas Kawasaki Chinese-Brand Others

Source: Marketing Services, Historical Records of Motorcycle Dealerships in Malaysia, HLYM Sdn. Bhd.

Figure 3.4: Motorcycle Dealerships by Brand (2000-2007)

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3.1.3 Motorcycle Exclusive Retail in Malaysia

The age has gradually evolved from traditional retail programmes towards better

quality in terms of brand image, customer service and ensuring customer satisfaction,

which has synergized the conversion from the multi-brand concept to the single-brand

concept. This evolution has been progressively seen overseas but has been slow in

Malaysia and now is blatantly and consistently applied by HLYM. The denotation of

the single-brand concept retail in the context of motorcycle industry terminology is a

motorcycle exclusive retail.

Motorcycle exclusive retail in Malaysia is a concept store, which houses a single

brand of motorcycle with its own specific retail programme and standard operating

procedures (SOP); symbolizing corporate brand through systematic delivery and

exclusive services to the end users in order to create customer loyalty and retention in

the future. This concept store is very different when compared with the multi-brand

concept in terms of quality of the functions and service performance.

Yamaha Motor exclusive retails in Malaysia are an upgraded version, having evolved

from the status of YBS (Yamaha before service) and 3S concepts retail (Sales, Service

and Spare parts). The actual denotation of Yamaha Motor exclusive retails in

Malaysia is Yamaha Star Shops.

Most manufactures have their own set of channel design or distribution pattern of

exclusive retails. Currently, Boon Siew Honda is engaging in an intensive set-up with

a large number of stores throughout the country while, HLYM, Suzuki and Modenas

are executing a selective set-up with a significant number of stores located selectively

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nationwide. Manufacturers are inviting and encouraging all major dealers (retailers)

who are already in the motorcycle market to upgrade and convert their current multi-

brand stores to single-brand stores with an exclusive retail package from the

manufacturers.

3.1.4 Life Cycle Implications

Since 2000, HLYM has consistently enforced the motorcycle exclusive retail network

(Yamaha Star Shop) in Malaysia. In the late 1990s, Modenas was the first

manufacturer to initiate this programme before its market share started to decline

because of disinclination in continuing the programme. Thus, many dealers were

slowly exiting from holding Modenas’ exclusive retail programme.

Currently (refer to Figure 3.5), Yamaha Motor exclusive retails are reaching the

maturity stage. No one has been exiting HLYM’s exclusive retail programme since

2000 and quantities of new applications have gradually increased from year to year.

Modenas was facing the decline stage with many dealers pulling out from the

programme and many new dealers had little means of getting it. However, Suzuki was

reaching the introduction stage and Boon Siew (Honda) was at growth stage and they

both will be the next challengers to HLYM.

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Introduction Maturity

Yamaha

Suzuki

Growth Decline

Honda

Modenas

Motorcycle Exclusive Retail Life Cycle Implications, 2008

Num

ber o

f exc

lusi

ve re

tail

31 stores

1 store26 stores

>20 stores downgraded

2008

Introduction Maturity

Yamaha

Suzuki

Growth Decline

Honda

Modenas

Motorcycle Exclusive Retail Life Cycle Implications, 2008

Num

ber o

f exc

lusi

ve re

tail

31 stores

1 store26 stores

>20 stores downgraded

2008

Source: Marketing Services, PLC Implications, 2008, HLYM Sdn. Bhd.

Figure 3.5: Motorcycle Exclusive Retail Life Cycle Implications (2008)

HLYM has successfully sustained its strong retail brand positioning of motorcycle

exclusive retail throughout the years although many dealers are still managing the

multi-brand concept. In 2007, there were twenty six (26) Yamaha Motor exclusive

retails, thirty one (31) Honda 4S retails and one (1) Suzuki World in Malaysia (refer

to Figure 3.6). Nevertheless, Yamaha Motor exclusive retails for the following years

will most likely be threatened by Boon Siew Honda (4S) and Suzuki World retails.

Motorcycle Exclusive Shop, 2000-200731

2

6

1012

13 13

16

26

1

0

5

10

15

20

25

30

35

2000 2001 2002 2003 2004 2005 2006 2007

Excl

usiv

e D

eale

rshi

p

Honda Yamaha Suzuki

Motorcycle Exclusive Retails (2000-2007)

Source: Marketing Services, Historical Records of Motorcycle Exclusive Retails in Malaysia, HLYM Sdn. Bhd.

Figure 3.6: Motorcycle Exclusive Retails (2000-2007)

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3.1.5 Retail Brand Positioning

In early 2008, HLYM regional sales offices conducted observatory visits and a

mystery shopper survey on all brands of motorcycle exclusive retails in order to

identify its position in terms of customer service quality and overall representation of

brand image. As shown in Figure 3.7, Yamaha Motor exclusive retail is experiencing

greater customer service quality and is relatively better in representing overall brand

image when compared with Honda, Suzuki and Modenas.

Both Yamaha’s rivals are planning strategic offences by continuously enhancing their

respective customer service performance in the forthcoming years. Thus, Yamaha

Motor exclusive retail will face critical attacks if it loses sight of its rivals’

movements. Hence, it is advisable to ensure a fainter strategy through enhancing

customer service performance to an improved level in order to sustain its prestigious

position in the market place.

Shop

Rep

rese

ntin

g B

rand

Imag

e

Good

Honda Suzuki

Service QualityLow

Good

Yamaha

Modenas

Retail Brand Positioning, 2008

Source: Marketing Services, Retail Brand Positioning, 2008, HLYM Sdn. Bhd.

Figure 3.7: Retail Brand Positioning (2008)

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3.1.6 Corporate Brand Overview

Managing the corporate brand of Yamaha Motor exclusive retails in Malaysia is

important to keep a strong brand knowledge to sustain market competitiveness.

Despite similar stratagems being followed, today, by its major competitors it is vital

to ensure obvious points of difference in order to sustain corporate brand equity.

Corporate branding is the practice of using the company's name as the product brand

name. It is an attempt to leverage corporate brand equity to create product brand

recognition. This can be summarised as several touch points – logo, customer service,

treatment and training of employees, packaging, advertising, stationery, quality of

products and services, and even things like cleanliness if the company has a retail

store. Customer service (also known as Client Service) is the provision of service to

customers before, during and after a purchase (The Free Encyclopedia, last modified

on 15 September 2008, http://en.wikipedia.org/wiki/Corporate_branding). It consists of activities

designed to enhance the level of customer satisfaction – that is, the feeling that a

product or service has met the customer expectation (Turban et al, 2002).

Brands of certain products delivered by either exclusive or non exclusive retailers

provide a number of important functions. Retailers that brought or represent the

overall brand image can generate consumer interest, patronage and loyalty in their

store as the consumer learns to expect certain brands and products (Keller, 2008).

Enhancing brand knowledge is the key to strengthen the overall product brand equity

because it creates a differential effect amongst generic products. Retailers could also

create their own brand image by attaching unique associations to the quality of their

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services, product assortment, merchandising, pricing package and credit policy. The

appeal and the attraction of the brand, whether the manufacturer’s brands or the

retailers’ own brand, can yield a higher price margin, increased sales volume and

greater profits (Keller, 2008).

The brand is a set of differentiated perceptions on the brand strength that depends on

the extent to which these perceptions are consistent, positive and shared by

consumers. Service brand equity may comprise four (4) main ways in which service

companies can build strong brands that employ – dare to be different, determine own

fame, make an emotional connection and internalize the brand (De Chenatony and

McDonald, 2003).

Thus, in corporate branding, customer service is very important and consists of

activities designed to enhance the level of customer satisfaction – that is, the feeling

that a product or service has met the customer expectation. Customer satisfaction and

dissatisfaction is that it is a comparison of customer expectation to perceptions

regarding the actual service encounter (Hoffman & Bateson, 2006). A company

would be wise to measure customer satisfaction regularly because it is the key to

justify potential customer retention in the future. A highly satisfied customer

generally stays loyal longer; buys more new products and upgrades existing products;

talks favourably about the company and its product introduction; pays less attention to

competitors brands and is less sensitive to price; offers product and service ideas to

the company. Moreover, customers who become loyal to the brand will always cost

less than getting new customers as transactions are routine (Keller, 2006).

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There is obviously a strong link between customer satisfaction and customer

retention. Customer's perception of service and quality of product will determine the

success of the product or service in the market through understanding customers'

perceptions. Companies can determine the actions required to meet the customers'

needs through identifying the strengths and weaknesses, and where they stand in

comparison to their competitors in order to Figure out the path for future progress and

improvement. Measuring customer satisfaction helps to promote an increased focus

on customer outcomes and stimulate improvements in work practices and processes

used within the company (Bhave, 2002).

Thus, it is insightful for Yamaha Motor exclusive retails to ensure that brand

knowledge exists in order to generate good service experience as well as association

with good brand image in the consumers’ memory through customer satisfaction,

which is the key success factor for the achievements. Measuring customer satisfaction

of services provided by Yamaha Motor exclusive retails will be conducted in order to

identify service gaps that could affect the overall performance of corporate brand

equity.

However, so as to ensure the achievement of customer satisfaction to an improved

level, reinforcement of the current competitive retail strategy and continuous

improvement of customer service weaknesses will be implemented by relying

empirically on research results. The major measuring method for customer

satisfaction is the un-weighted Customer Satisfaction Index (CSI), which is used in

the context of justifying customer service performance through complying with the

HLYM Quality Management System (ISO 9001:2000).

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3.2 STRATEGY REVIEW

In 2007, strategies were designed to implement improvements on overall service

performance and quality of Yamaha Motor exclusive retails consisting of four (4)

major actions; enhancement on training content and syllabus; conduct official

trainings; monitoring and evaluation activity; web page enquiries management (refer

to Figure 3.8).

Training Content & Syllabus

Training

Monitoring & Evaluation Activity

Web Page Enquires Management

• Impressive customer service training and compilation.

• Video shooting for learning content; consumer skill, consumer-related preference and consumer-related attitude.

• Technical academy and customer segment training for exclusive dealer and internal staff.

• Customer care training.

• Observatory visit on Yamaha Motor exclusive retail.• Mystery shopper

• Daily monitoring and reply• Follow up and coordination

Training Content & Syllabus

Training

Monitoring & Evaluation Activity

Web Page Enquires Management

• Impressive customer service training and compilation.

• Video shooting for learning content; consumer skill, consumer-related preference and consumer-related attitude.

• Technical academy and customer segment training for exclusive dealer and internal staff.

• Customer care training.

• Observatory visit on Yamaha Motor exclusive retail.• Mystery shopper

• Daily monitoring and reply• Follow up and coordination

Source: Marketing Services, Improvement Plan, 2007, HLYM Sdn. Bhd.

Figure 3.8: Marketing Services Strategy Overview (2007)

The effectiveness of strategies implemented in 2007 could be analysed by viewing the

reports from two (2) aspects; Operating Standard Audit 2007 and Customer

Satisfaction Index 2007, which are shown in Table 3.1.

Operating Standard Audit (Rating 1-5)• Condition Quality 3.28• People Quality 2.91• System Quality 2.98

Overall result 3.08

Customer Satisfaction Index (CSI)• Sales Person Attribute 82.8%• Shop Attribute 89.0%• Delivery Attribute 86.8%• Maintenance Service Attribute 84.9%

Overall result 84.8%

HLYM to evaluate Yamaha Motor exclusive retails Customer to evaluate Yamaha Motor exclusive retails

Operating Standard Audit (Rating 1-5)• Condition Quality 3.28• People Quality 2.91• System Quality 2.98

Overall result 3.08

Customer Satisfaction Index (CSI)• Sales Person Attribute 82.8%• Shop Attribute 89.0%• Delivery Attribute 86.8%• Maintenance Service Attribute 84.9%

Overall result 84.8%

HLYM to evaluate Yamaha Motor exclusive retails Customer to evaluate Yamaha Motor exclusive retailsHLYM evaluation on Yamaha Motor Exclusive Retails Customer evaluation on Yamaha Motor Exclusive Retails

Source: Marketing Services, Audit Rating Points & CSI, 2007, HLYM Sdn. Bhd.

Table 3.1: Operating Standard Audit & CSI (2007)

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Impending from the implementation of these activities for improving service

performance and quality of Yamaha Motor exclusive retails, the overall result of

Operating Standard Audit in 2007 was just 3.08 only (slightly above moderate level).

This unfavourable result was due to a lack of people quality and system quality.

Yamaha customer voices (CSI in 2007) was favourable if compared with the previous

year, increasing by 13.5 percent to 84.8 percent and denoted a significant

improvement in terms of service image as perceived by Yamaha customers. This

improvement was mostly contributed by shop attributes; good servicescape

(conducive service atmosphere). Nevertheless, improvement is still needed in terms of

rectifying the quality of sales person attributes and maintenance service attributes.

Based on the reports of the Operating Standard Audit result and CSI for the year

2007, a continuous improvement for subsequent years will focus on people quality

and system quality because these areas will have a major effect on the Customer

Satisfaction Index in the future, which still has much room for improvement to sustain

competitiveness in the market place.

The development of action plans for the year 2008 was based on strategies extended

from the year 2007. As shown in Figure 3.9, most of the strategies planned for 2008

consisted of value-added aspects, which mean increased frequency of the activities

throughout the year and ensuring a better quality of programme in terms of training

content, effective sales training and personal improvement, enforcement of rigid

monitoring and evaluation activity, and effective web coordination.

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Daily monitoring and replyWeb Page Enquiries Management

Follow up and coordination

Mystery shopper

Technical training / customer segment for Yamaha Star Shop

Training

Customer care Training for Yamaha Star Shop

Monitoring & Evaluation Activity

Training Content Syllabus

Observatory visit

Video shooting

Quality material selection & compilation

DecNovOctSepAugJulJunMayAprMarFebJanActivity

Daily monitoring and replyWeb Page Enquiries Management

Follow up and coordination

Mystery shopper

Technical training / customer segment for Yamaha Star Shop

Training

Customer care Training for Yamaha Star Shop

Monitoring & Evaluation Activity

Training Content Syllabus

Observatory visit

Video shooting

Quality material selection & compilation

DecNovOctSepAugJulJunMayAprMarFebJanActivity

Action Plan For 2008

Source: Marketing Services, Implementation & Scheduling, 2008, HLYM Sdn. Bhd.

Figure 3.9: Action Plan (2008)

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CHAPTER 4: CSI SURVEY CONDUCTED BY

HLYM FOR 2008

The standard methodology for measuring customer service performance is based on

the un-weighted customer satisfaction index (CSI). Customer interviews were

conducted constructively by applying quantitative questionnaires and the selection of

the sample was limited to Yamaha customers who visited, made service transactions

and purchased any model of Yamaha motorcycle from Yamaha Motor exclusive

retails in Malaysia only.

A comparison between HLYM CSI and competitor’s CSI (Boon Siew Honda) is not

possible at this time as Honda has not yet implemented its standard operating

procedure. As commented by HLYM regional sales officer during the mystery

shopper survey, Honda 4S stores were just established in early 2007, which was very

good in terms of brand image and nicely built-up to provide maintenance services for

motorcyclists, however, the quality of customer service provided was relatively low

compared to Yamaha Motor exclusive retails in Malaysia. Honda has yet to

implement a standard operating procedure for better customer service.

Most of the motorcyclists were attracted by Honda 4S’s strong image and sales

attractiveness but not because of excellent customer service. At this moment, Honda

4S’s is unable to compete with HLYM in terms of the customer service perspective.

However, the service quality of Honda 4S will improve very soon as the management

of Honda Japan intends to rectify its current service performance.

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The evaluation will focus on the customer service aspect of Yamaha Motor exclusive

retails without comparison with competitors in order to define areas of weakness and

service gaps. Improving service performance such as sales person attributes, shop

attributes, delivery attributes and maintenance service attributes will be the main

strategic areas in the CSI evaluation.

4.1 DATA COLLECTION BY HLYM

The sampling procedure was based on those customers that purchased the motorcycle

recently; three to six months from the date of purchase. In total, 377 respondents or 99

percent of structured interviews with questionnaires were completed or 19.8 people

(respondents) per exclusive store attended the interview and provided many reliable

comments and recommendations for improvement. The interview focused mainly on

customer evaluation of the service performance of Yamaha Motor exclusive retails to

identify significant weaknesses against the national average (national CSI) and justify

the seriousness of service gaps.

The data collection process involves four (4) parties in support of the implementation

of the CSI survey of Yamaha Motor exclusive retails in Malaysia, which is shown in

Figure 4.1.

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27

Bra

nch

Dea

ler

Mar

ketin

gA

ll D

epar

tmen

t

StartTo contact Yamaha Star Shop to recruit customers for CSI survey.

Branch to follow up on progress of action plan and implementation and report in Branch Manager meeting and monthly report.

To assemble customers based on selection criteria for face to face survey at shop.

Share CSI result / action plan with dealers

To conduct CSI survey , Sales, Delivery and Service Maintenance survey.

Collect, summarize and analyze data

Prepare CS index report for individual dealers

Share result during the Operations Meeting and Branch Manager Meetings

File a copy

Device action plan, implementation or report progress regularly in Operations Meeting or Branch Manager Meeting

Source: Marketing Services, Customer Survey Management, ISO 9001:2000, QSL 03, HLYM Sdn. Bhd.

Figure 4.1: CSI Survey Flow Chart

1. Branch Level:

This consists of nine (9) regional branch offices in Malaysia. They will support the process of

contacting various dealers to recruit customers for the CSI survey and to follow up on the

progress of the action plan, implementation and report at Regional Branch Manager Meetings

and in the monthly report.

2. Dealer Level:

Nineteen (19) Yamaha Motor exclusive dealers in Malaysia will identify three hundred eighty

(380) Yamaha customers from across the country by referring to the selection criteria stated

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by HLYM. After the completion of the survey, an individual CSI report will be presented by

HLYM for their action and improvement.

3. Marketing Level:

An overall coordinator of the CSI survey will monitor the progress of the activities. The

marketing department will collect, summarize, analyze, data store and prepare the CSI report

for individual dealers and result sharing in the Operations Meetings and Branch Manager

Meetings.

4. All Departments:

The relevant departments will devise an action plan and follow up on its implementation

based on the CSI and prepare regular reports concerning the progress of the action plan in

Operation Meetings and Branch Manager Meetings.

4.2 HLYM CSI (PARAMETER AND FACTOR)

HLYM has fully adopted the CSI standard from the YMC (Yamaha Motor Japan

Corporation) and contrasted it with the MCSI (Malaysian Customer Satisfaction

Index) and international CSIs such as ACSI (American Customer Satisfaction Index),

SCSB (Swedish Customer Satisfaction Barometer), KCSI (Korean Customer

Satisfaction Index), NCSB (Norwegian Customer Satisfaction Barometer) and ECSI

(European Customer Satisfaction Index).

As such, parameters of HLYM CSI are practically focused on service performance,

which comprise sales perspectives and service maintenance perspectives. Both

perspectives are imparted with four parameters (sales person attributes, shop

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attributes, delivery attributes and maintenance service attributes) and twenty six (26)

factors (refer to Figure 4.2).

Un-weighted HLYM CSI is calculated by using a simple average without applying

any weighting on the mean of four (4) parameters, which will denote the level of

overall service performance of Yamaha Motor exclusive retails in Malaysia.

Explanation of genuine and imitation spare parts

Explanation of motorcycle

warranty condition

HLYM CSI(Unweighted)

HLYM CSI(Unweighted)

DeliveryAttributesDelivery

Attributes

ShopAttributes

ShopAttributes

Sales PersonAttributes

Sales PersonAttributes

ServiceMaintenance

Attributes

ServiceMaintenance

Attributes

Explanation of motorcycle functions at

delivery

Explanation of PDI items during

motorcycle delivery

Set up time at delivery and

documentation procedure

Appearance and cleanliness of motorcycle at

delivery

Overall handling of the sales professionalism

Dealership information

Explanation of motorcycle service requirement and

free inspection

Willingness to listen to

customer

Attitude

Test rides and demonstration

Atmosphere of the shop

Cleanliness of the shop

Bike display in the shop

Explanation of product availability

and feature

Explanation of sales terms

and conditions

Courtesy and

friendliness

Service staff performance

Proper diagnosis of customer motorcycle

Explanation of warranty

Cleanliness of service

area

Clear explanation of repair work requirement and job

done

Commitment to job done right the

1st time

Willingness to listen to customer

complaints

Getting work done on time

Parameter Factor

Source: Marketing Services, Customer Satisfaction Survey, ISO 9001:2000, QSL 03, HLYM Sdn. Bhd.

Figure 4.2: HLYM CSI; Parameter and Factors

Furthermore, the customer loyalty index is also calculated to observe the level of

overall customer retention towards Yamaha Motor exclusive retails. The Customer

Loyalty Index was based on an average score obtained from three (3) factors, as

shown in Figure 4.3.

Customer Loyalty IndexCustomer Loyalty Index

Repeat purchase at the same shop

(Sales Perspective)

Recommend others to service the bike in the shop

Repeat purchase at the same shop (Service

Perspective)

Customer Loyalty IndexCustomer Loyalty Index

Repeat purchase at the same shop

(Sales Perspective)

Recommend others to service the bike in the shop

Repeat purchase at the same shop (Service

Perspective)

Factor

Source: Marketing Services, Customer Satisfaction Survey, ISO 9001:2000, QSL 03, HLYM Sdn. Bhd.

Figure 4.3: Customer Loyalty Index; Factors

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Generally, every positive parameter will be able to produce a favourable CSI, which

could lead to customer loyalty (ongoing repeat-purchase behaviour and

recommendation to other friends). Customer's voices and expectations will be

translated into meaningful measurable descriptive reports, which are able to provide a

useful way for typical improvements as well as to redefine the areas of focus to

enhance customer satisfaction.

The Customer Satisfaction Index (CSI) of Yamaha Motor exclusive retails is an index

regarding service performance, which is derived from the concept of managing

overall corporate brand performance through personnel services and the physical

condition of the store. The services provided by dealer personnel consist of sales

personnel, clerical staff, mechanics, drivers and boss who will be going to provide

whatever service, ranging from before sales, during and after sales service.

4.2.1 Sales Person Attributes

Sales person attributes refers to those personnel providing proper sales service in

terms of consultation and advice. There are ten (10) main factors, which justify

whether the sales person is able to contribute a better quality customer service to gain

a favourable index as follows:

1. Sales person attitude

2. Willingness to listen to customer

3. Explanation of product availability and features

4. Explanation of sales terms and conditions

5. Explanation of motorcycle warranty condition

6. Explanation of motorcycle service requirement and free inspection

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7. Test rides and demonstration

8. Explanation of genuine and imitation of spare parts

9. Dealer information

10. Overall handling of the sales professionalism

4.2.2 Shop Attributes

An impressive condition of exclusive retails relies on the commitment of dealer’s

management. Shop decoration and set-up are important to create a sense of enjoyment

and comfort among the customers. Shop attributes that rely on a certain physical

setting will help to create a shop that customers feel good about entering. The factors

determining a good set up of the shop consisted of three (3) measurable variables as

follows:

1. Bike display in the shop

2. Cleanliness of the shop

3. Atmosphere of the shop

4.2.3 Delivery Attributes

Delivery attributes consist of plenty of procedures that involve the preparation of the

motorcycle for delivery and collection by customers. This relates to how well the

system is operating in providing personal services regarding motorcycle condition and

functional aspects of the product. Good sales delivery attributes could be derived from

the appointed items as follows:

1. Appearance and cleanliness of motorcycle at delivery

2. Set up time at delivery and document procedure

3. Explanation of motorcycle functions at delivery

4. Explanation of pre-delivery-inspection (PDI) items during motorcycle delivery

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4.2.4 Maintenance Service Attributes

Most of the attributes covered in the service maintenance relate to the physical

condition of the workshop and service personnel with plenty of technical skills and

experience in handling motorcycle technical repairs and customer complaints. Service

technicians (mechanics) are the major service personnel that will overcome any

problematic conditions of the product as well as customer’s technical enquiries.

Factors that relate to maintenance service attributes consist of nine (9) points as

follows:

1. Service staff performance

2. Courtesy and friendliness

3. Cleanliness of service area

4. Explanation of warranty

5. Proper diagnosis of customer motorcycle

6. Clear explanation of repair work requirement and job done

7. Getting work done on time

8. Commitment to job done right the 1st time

9. Willingness to listen to customer complaints

4.2.5 Un-weighted Customer Satisfaction Index (CSI)

The Customer Satisfaction Index (CSI) of HLYM is an index regarding the service

performance of Yamaha Motor exclusive retails. Un-weighted HLYM CSI is

calculated by using a simple average without applying any weighting on the mean of

four (4) parameters.

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4.2.6 Customer Loyalty Index

Customer loyalty towards Yamaha Motor exclusive retails will be categorized in two

(2) perspectives, which consist of the sales perspective and service perspective. In

terms of the sales perspective, the factor of repeat-purchase at the same shop is

defined by the capabilities of the sales personnel in providing before, during and after

sales service that enables the customers to retain and create repeat-sales in the future.

While, in terms of service perspective, the factors of repeat-purchase at the same shop

and recommend to others refers to the ability of the service maintenance staff in

providing good technical service that enables customers to revisit the shop for repairs

and maintenance, recommend to their friends and acquaintances and purchase

Yamaha brand in the future. Therefore, the three (3) factors for Customer Loyalty

Index are summarised as follows:

1. Sales perspective: Repeat purchase at the same shop

2. Service perspective: Repeat purchase at the same shop

3. Service perspective: Recommend others to service the bike in the shop

4.3 DESCRIPTIVE STATISTICS

As shown in Figure 4.4, most of the respondents from this customer survey were

derived from the male category representing 90 percent of the total survey. Female

voices and comments were lacking because there were not many in the survey.

Perhaps, female riders could contribute some meaningful ideas and creative solutions

concerning certain problems that male riders are unable to. While, in terms of marital

status the frequency of distribution was quite fairly distributed, the people who are

married and not married expressed different expectations on customer services

because of different household commitments. Married persons tend to be more

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conservative and cost conscious than those who are still single but both have the same

expectations and perceptions of the quality of service and value what they have paid

for.

Gender

Female10%

Male90%

Marital Status

Married47%

Single53%

Gender

Female10%

Male90%

Marital Status

Married47%

Single53%

Source: Marketing Services, Customer Satisfaction Survey Database, 2008, HLYM Sdn. Bhd.

Figure 4.4: Gender and Marital Status

The motorcyclists who attended the customer survey were mainly from the age below

20 and 20-34 years old (refer to Figure 4.5). This age range consisted of teenagers and

young adults who represent 69 percent of the total survey. Generally, based on the

historical data of HLYM customer profiles, the majority of Yamaha customers consist

of the younger generation and have a very strong influence towards overall retail

brand performance of Yamaha Motor in Malaysia. In terms of income level, most of

the respondents consisted of moderate low income level (below RM 1,500 and

RM1,500-2,500). This category of customers represents about 76 percent of the total

survey, which is very typical of motorcyclists in Malaysia. Thus, the quality of

customer service provided by Yamaha Motor exclusive retail cannot be devalued

because this group of customers will have a very effective word of mouth (WOM)

contribution to the market.

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Age Range

2 0 - 2 4

2 4 %

2 5 - 2 9

2 4 %

3 0 - 3 4

1 1 %

3 5 - 3 9

7 %

4 0 - 4 4

7 %

4 5 - 4 9

6 %

5 0 - 5 4

5 %

5 5 - 5 9

4 %

A b o v e 6 0

2 %

B e l o w 2 0

1 0 %

Income Level

R M 1 5 0 1 - 2 5 0 0

3 1 %

R M 2 5 0 1 - 3 5 0 0

1 0 %

R M 3 5 0 1 - 4 5 0 0

6 %

R M 4 5 0 1 - 5 5 0 0

5 %

R M 5 5 0 1 - 6 0 0 0

1 %

A b o v e R M 6 0 0 1

2 %

B e l o w R M 1 5 0 0

4 5 %

Source: Marketing Services, Customer Satisfaction Survey Database, 2008, HLYM Sdn. Bhd.

Figure 4.5: Age Range and Income Level

In the context of respondents’ education level, which is shown in Figure 4.6, more

than 87 percent of Yamaha customers have at least secondary school qualifications

and above (college or university). This means that Yamaha customers are educated

and can make informed decisions concerning purchases.

Education

Se c o n d a r y

Sc h o o l

5 5 %

C o l l e g e o r

U n i v e r s i t y

3 2 %

O t h e r s

9 %

P r i ma r y

Sc h o o l

4 %

Source: Marketing Services, Customer Satisfaction Survey Database, 2008, HLYM Sdn. Bhd.

Figure 4.6: Education Level

4.4 CSI RESULTS

Plotting the satisfaction index against a time scale indicates exactly how well the

organization is accomplishing the task of customer satisfaction over a period of time.

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Thus, customer satisfaction could be expressed as a single number that tells the

organisation where they stand today and improvement plans can be developed to

further improve the service encounter to ensure customer loyalty or retention in the

future.

As such, un-weighted HLYM CSI for the year of 2008 was 83.9 percent. The value of

service performance in each parameter (sales person attributes, shop attributes,

delivery attributes and maintenance service attributes) were 82.0 percent, 87.9 percent,

84.4 percent and 84.6 percent, respectively. The Customer Loyalty Index for the year

of 2008 was 89.7 percent. All these indices will be used as a national average or

benchmark value for all Yamaha Motor exclusive retails in Malaysia (refer to Table

4.2).

Mean IndexSales Person Attributes 4.100 82.0%Shop Attributes 4.396 87.9%Delivery Attributes 4.220 84.4%Maintenance Service Attributes 4.228 84.6%Un-weighted CSI 4.197 83.9%

Customer Loyalty Index 4.486 89.7%

Source: Marketing Services, Customer Satisfaction Survey Database, 2008, HLYM Sdn. Bhd.

Table 4.1: Un-weighted Service Performance Scores

There are two (2) trend lines shown in Figure 4.7, which consist of un-weighted CSI

and Customer Loyalty Index against the time frame from 2005 to 2008. The value

changes of Customer Loyalty Index in 2008 increased by 3.7 percent to 89.7 percent

from the previous year due to the effectiveness of marketing service strategies

implemented in 2008. The CSI for 2008 was unfavourable due to decreasing value by

0.9 percent to 83.9 percent, which might be caused by an evolution of customer

expectations from time to time. Many Yamaha customers might be attracted to the

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benefits provided by Yamaha Motor exclusive retails, which made them stay loyal to

the store and recommend to their friends even though the service performance

delivered was not within the expected standard.

HLYM Customer Satisfaction Index; 2005-2008

89.7%86.0%

84.5%

89.5%

83.9%84.8%

74.0%

67.3%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

2005 2006 2007 2008

Customer Loyalty Unweighted Customer Satisfaction Index

Figure 4.7: Trend Line of Indices, 2005-2008

Most of the improvements were apparently discovered in the Customer Loyalty Index

indicating that they will recommend to other friends and have the intention to repeat

purchase in the future (refer to Table 4.3). In terms of sales perspective, repeat

purchase at the same shop rated by Yamaha customers was 89.4 percent (decreased by

0.6 percent) while, in terms of service maintenance perspective, repeat bike servicing

at the same shop was 91.6 percent (increased by 9.6 percent) and recommend to other

friends to service their bike in the shop was 88.4 percent (increased by 7.4 percent).

2007 2008 +/-Customer Loyalty Index 86.0% 89.7% 3.7%Repeat purchase at the same shop (Sales Perspective) 90.0% 89.4% -0.6%Repeat purchase at the same shop (Service Maintenance Perspective) 82.0% 91.6% 9.6%Recommend others to service the bike in the shop 81.0% 88.4% 7.4%

Table 4.2: Customer Loyalty Index and Factor, 2008 versus 2007

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The value of each service performance can be seen in Figure 4.8; Sales person

attributes (82.0 percent); Shop attributes (87.9 percent); Delivery attributes (84.4

percent); Maintenance service attributes (84.6 percent). Each attribute decreased in

2008 with the highest decrease in terms of value changes being delivery attributes

(-2.4 percent) followed by shop attributes (-1.1 percent), sales person attributes (-0.8

percent) and maintenance service attributes (-0.3 percent). As such, critical

improvement is needed in all areas of service performance.

Value Changes (2007-2008)Maintenence Service

Attributes, -0.3%

Delivery Attribute, -2.4%

Shop Attributes, -1.1%

Sales Person Attributes, -0.8%

-3.0%

-2.5%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

Service Performances

71.2%76.0% 78.0% 74.8%

82.8%89.0% 86.8% 84.9% 84.6%84.4%

87.9%82.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Sales Person Attributes Shop Attributes Delivery Attributes Maintenence ServiceAttributes

Inde

x

2006 2007 2008

Value Changes (2007-2008)Maintenence Service

Attributes, -0.3%

Delivery Attribute, -2.4%

Shop Attributes, -1.1%

Sales Person Attributes, -0.8%

-3.0%

-2.5%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

Service Performances

71.2%76.0% 78.0% 74.8%

82.8%89.0% 86.8% 84.9% 84.6%84.4%

87.9%82.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Sales Person Attributes Shop Attributes Delivery Attributes Maintenence ServiceAttributes

Inde

x

2006 2007 2008

2007 2008 +/-Un-weighted Customer Satisfaction Index 84.8% 83.9% -0.9%Sales Person Attributes 82.8% 82.0% -0.8%Shop Attributes 89.0% 87.9% -1.1%Delivery Attributes 86.8% 84.4% -2.3%Maintenence Service Attributes 84.9% 84.6% -0.3%

Figure 4.8: Service Performance Scores and Value Changes (2006-2008)

Delivery attributes were based on four (4) major factors related to services during the

delivery of the motorcycle. They were appearance and cleanliness of motorcycle at

delivery, set up time of delivery and documentation procedure, explanation of

motorcycle functions at delivery and explanation of PDI (pre-delivery inspection)

items during motorcycle delivery. As shown in Figure 4.9, explanation of PDI items

during motorcycle delivery has the highest decreasing value (-4.2 percent) than other

factors. Set up time at delivery and documentation procedure decreased by 2.8 percent

and appearance and cleanliness of motorcycle at delivery decreased by 1.0 percent,

while, explanation of motorcycle functions at delivery has no change.

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Delivery Attributes

91.0%89.0%

82.0%85.0%

88.6%86.2%

82.0% 80.8%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

Appearance andcleaniness of

motorcycle at delivery

Set up time at deliveryand documentation

procedure

Explanation ofmotorcycle functions

at delivery

Explanation of PDIitems during

motorcycle delivery

2007 2008

2007 2008 +/-Delivery Attributes 86.8% 84.4% -2.3%Appearance and cleaniness of motorcycle at delivery 91.0% 88.6% -2.4%Set up time at delivery and documentation procedure 89.0% 86.2% -2.8%Explanation of motorcycle functions at delivery 82.0% 82.0% 0.0%Explanation of PDI items during motorcycle delivery 85.0% 80.8% -4.2%

2007 2008 +/-Delivery Attributes 86.8% 84.4% -2.3%Appearance and cleaniness of motorcycle at delivery 91.0% 88.6% -2.4%Set up time at delivery and documentation procedure 89.0% 86.2% -2.8%Explanation of motorcycle functions at delivery 82.0% 82.0% 0.0%Explanation of PDI items during motorcycle delivery 85.0% 80.8% -4.2%

2007 2008 +/-Delivery Attributes 86.8% 84.4% -2.3%Appearance and cleaniness of motorcycle at delivery 91.0% 88.6% -2.4%Set up time at delivery and documentation procedure 89.0% 86.2% -2.8%Explanation of motorcycle functions at delivery 82.0% 82.0% 0.0%Explanation of PDI items during motorcycle delivery 85.0% 80.8% -4.2%

Figure 4.9: Delivery Attributes, 2008 versus 2007

Shop attributes consisted of three (3) major factors that related to overall condition of

the store (Figure 4.10). The factors were bike display in the shop (87.4 percent in

2008), cleanliness of the shop (89.0 percent in 2008) and atmosphere of the shop

(87.4 percent in 2008). All these factors show decreasing values in 2008 except a

factor related to cleanliness of the shop. Bike display in the shop and atmosphere of

the shop decreased by 1.5 percent in 2008.

Shop Attributes

89.0% 89.0% 89.0%87.4%

89.0%87.4%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

Bike display in the shop Cleaniness of the shop Atmosphere of the shop

2007 20082007 2008 +/-

Shop Attributes 89.0% 87.9% -1.1%Bike display in the shop 89.0% 87.4% -1.6%Cleaniness of the shop 89.0% 89.0% 0.0%Atmosphere of the shop 89.0% 87.4% -1.6%

2007 2008 +/-Shop Attributes 89.0% 87.9% -1.1%Bike display in the shop 89.0% 87.4% -1.6%Cleaniness of the shop 89.0% 89.0% 0.0%Atmosphere of the shop 89.0% 87.4% -1.6%

Figure 4.10: Shop Attributes, 2008 versus 2007

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In terms of sales person attributes (Figure 4.11), all factors decreased in 2008 except

explanation of product availability and features, explanation of motorcycle warranty

condition and explanation of genuine and imitation spare parts. The value changes of

the factors that plummeted in 2008 were as follows; test ride and demonstration

decreased by 8.4 percent; overall handling of the sales professionalism decreased by

2.3 percent; willingness to listen to customer decreased by 1.3 percent; dealership

information decreased by 1.2 percent; attitude decreased by 1.0 percent; explanation

of sales terms and conditions decreased by 0.8 percent; explanation of motorcycle

service requirements and free inspection decreased by 0.4 percent.

Sales Person Attribute

0.0%10.0%

20.0%30.0%

40.0%50.0%

60.0%70.0%

80.0%90.0%

100.0%Attitude

Willingness to listen to customer

Explanation of product availability and feature

Explanation of sales terms and conditions

Explanation of motorcycle w aranty condition

Explanation of motorcycle service requirementand free inspection

Test rides and demonstration

Explanation of genuine and imitation spare parts

Dealership information

Overall handling of the sales professionalism

2007 2008

2007 2008 +/-Sales Person Attributes 82.8% 82.0% -0.8%Attitude 90.0% 89.0% -1.0%Willingness to listen to customer 88.0% 86.7% -1.3%Explanation of product availability and feature 83.0% 84.1% 1.1%Explanation of sales terms and conditions 88.0% 87.2% -0.8%Explanation of motorcycle waranty condition 81.0% 83.2% 2.2%Explanation of motorcycle service requirement and free inspection 83.0% 82.6% -0.4%Test rides and demonstration 76.0% 67.6% -8.4%Explanation of genuine and imitation spare parts 67.0% 71.1% 4.1%Dealership information 86.0% 84.8% -1.2%Overall handling of the sales professionalism 86.0% 83.7% -2.3%

Sales Person Attribute

0.0%10.0%

20.0%30.0%

40.0%50.0%

60.0%70.0%

80.0%90.0%

100.0%Attitude

Willingness to listen to customer

Explanation of product availability and feature

Explanation of sales terms and conditions

Explanation of motorcycle w aranty condition

Explanation of motorcycle service requirementand free inspection

Test rides and demonstration

Explanation of genuine and imitation spare parts

Dealership information

Overall handling of the sales professionalism

2007 2008

2007 2008 +/-Sales Person Attributes 82.8% 82.0% -0.8%Attitude 90.0% 89.0% -1.0%Willingness to listen to customer 88.0% 86.7% -1.3%Explanation of product availability and feature 83.0% 84.1% 1.1%Explanation of sales terms and conditions 88.0% 87.2% -0.8%Explanation of motorcycle waranty condition 81.0% 83.2% 2.2%Explanation of motorcycle service requirement and free inspection 83.0% 82.6% -0.4%Test rides and demonstration 76.0% 67.6% -8.4%Explanation of genuine and imitation spare parts 67.0% 71.1% 4.1%Dealership information 86.0% 84.8% -1.2%Overall handling of the sales professionalism 86.0% 83.7% -2.3%

Sales Person Attributes

Figure 4.11: Sales Person Attributes, 2008 versus 2007

As shown in Figure 4.12, maintenance service attributes have the lowest decreasing

value in 2008 compared to other attributes. Willingness to listen to customer

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41

complaints was the maintenance service attribute that dropped by the greatest factor,

2.2 percent to 85.8 percent in 2008 followed by getting work done on time, which

decreased by 1.9 percent to 84.1 percent; commitment to get job done right the first

time, which decreased by 1.1 percent to 85.9 percent; service staff performance

dropped by 0.9 percent to 86.1 percent; clear explanation of repair work requirement

and job done decreased by 0.8 percent to 84.2 percent; courtesy and friendliness

decreased by 0.7 percent to 87.3 percent; proper diagnosis of customer motorcycle

dropped by 0.7 percent to 81.3 percent.

Maintenance Service Attributes

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Service staff performance

Courtesy and friendliness

Cleaniness of service area

Explanation of warranty

Proper diagnosis of customer motorcycleClear explanation of repair work requirement

and job done

Getting work done on time

Commmitment to job done right the 1st time

Willingness to listen to customer complaints

2007 2008

2007 2008 +/-Maintenence Service Attributes 84.9% 84.6% -0.3%Service staff performance 87.0% 86.1% -0.9%Courtesy and friendliness 88.0% 87.3% -0.7%Cleaniness of service area 82.0% 83.0% 1.0%Explanation of warranty 79.0% 83.2% 4.2%Proper diagnosis of customer motorcycle 82.0% 81.3% -0.7%Clear explanation of repair work requirement and job done 85.0% 84.2% -0.8%Getting work done on time 86.0% 84.1% -1.9%Commmitment to job done right the 1st time 87.0% 85.9% -1.1%Willingness to listen to customer complaints 88.0% 85.8% -2.2%

Maintenance Service Attributes

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Service staff performance

Courtesy and friendliness

Cleaniness of service area

Explanation of warranty

Proper diagnosis of customer motorcycleClear explanation of repair work requirement

and job done

Getting work done on time

Commmitment to job done right the 1st time

Willingness to listen to customer complaints

2007 2008

2007 2008 +/-Maintenence Service Attributes 84.9% 84.6% -0.3%Service staff performance 87.0% 86.1% -0.9%Courtesy and friendliness 88.0% 87.3% -0.7%Cleaniness of service area 82.0% 83.0% 1.0%Explanation of warranty 79.0% 83.2% 4.2%Proper diagnosis of customer motorcycle 82.0% 81.3% -0.7%Clear explanation of repair work requirement and job done 85.0% 84.2% -0.8%Getting work done on time 86.0% 84.1% -1.9%Commmitment to job done right the 1st time 87.0% 85.9% -1.1%Willingness to listen to customer complaints 88.0% 85.8% -2.2%

Figure 4.12: Maintenance Service Attributes, 2008 versus 2007

The CSI and Customer Loyalty Index for the year 2008 will be used as the base line

or national average in order to identify the weakest stores of Yamaha Motor exclusive

retails in Malaysia. Many Yamaha Motor exclusive retails had individual indices

below the respective national average as shown in Figures 4.13 and 4.14. About eight

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(8) stores were below the national average of CSI and eleven (11) stores were below

the national average of Customer Loyalty Index.

Customer Satifaction Index (2008 versus 2007)

8 7.7%8 6 .2 % 8 6 .5%

8 4 .1%

8 7.2 %

9 0 .0 %

8 6 .1%8 7.2 %

78 .2 % 78 .1%

8 9 .0 %

76 .5%

73 .4 %

77.2 %

8 5.8 %

8 0 .4 %

9 0 .1%

8 7.5%

73 .5%

8 3 .7%

78 .5%

76 .4 %

8 0 .2 %

8 5.8 %

8 8 .6 %8 8 .6 %

76 .7%

9 0 .7%

8 1.0 %79 .1%

8 7.8 %

75.2 %

8 0 .2 %8 1.2 %

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

Dea

ler 1

Dea

ler 2

Dea

ler 3

Dea

ler 4

Dea

ler 5

Dea

ler 6

Dea

ler 7

Dea

ler 8

Dea

ler 9

Dea

ler 1

0

Dea

ler 1

1

Dea

ler 1

2

Dea

ler 1

3

Dea

ler 1

4

Dea

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5

Dea

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6

Dea

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7

Dea

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8

Dea

ler 1

9

CSI 2007 CSI 2008

National Average

83.9%

Customer Satifaction Index (2008 versus 2007)

8 7.7%8 6 .2 % 8 6 .5%

8 4 .1%

8 7.2 %

9 0 .0 %

8 6 .1%8 7.2 %

78 .2 % 78 .1%

8 9 .0 %

76 .5%

73 .4 %

77.2 %

8 5.8 %

8 0 .4 %

9 0 .1%

8 7.5%

73 .5%

8 3 .7%

78 .5%

76 .4 %

8 0 .2 %

8 5.8 %

8 8 .6 %8 8 .6 %

76 .7%

9 0 .7%

8 1.0 %79 .1%

8 7.8 %

75.2 %

8 0 .2 %8 1.2 %

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

Dea

ler 1

Dea

ler 2

Dea

ler 3

Dea

ler 4

Dea

ler 5

Dea

ler 6

Dea

ler 7

Dea

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Dea

ler 9

Dea

ler 1

0

Dea

ler 1

1

Dea

ler 1

2

Dea

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3

Dea

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4

Dea

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5

Dea

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6

Dea

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7

Dea

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8

Dea

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9

CSI 2007 CSI 2008

National Average

83.9%

Figure 4.13: Customer Satisfaction Index by Dealers; 2008 versus 2007

Customer Loyalty Index (2008 versus 2007)

9 1.0 %9 3 .0 %

8 8 .8 %

9 3 .0 %9 1.1%

9 2 .8 %

8 8 .3 %

9 6 .0 %

9 4 .0 %

8 9 .0 %8 8 .0 %

9 5.0 %

8 9 .0 %

9 4 .0 %9 5.0 %

8 1.0 %

9 6 .0 %

9 0 .0 %9 3 .0 %

8 5.0 % 8 5.3 %

8 8 .0 %

9 4 .7%

9 0 .3 %9 2 .9 %9 3 .3 %

8 6 .6 %

9 7.1%

8 5.5%8 7.4 %

8 9 .0 %

8 6 .3 %

8 3 .8 %

8 8 .4 %

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

Dea

ler 1

Dea

ler 2

Dea

ler 3

Dea

ler 4

Dea

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Dea

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Dea

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Dea

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Dea

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Dea

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0

Dea

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1

Dea

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2

Dea

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3

Dea

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4

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5

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6

Dea

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7

Dea

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8

Dea

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9

Customer Loyalty 2007 Customer Loyalty 2008

National average89.7%

Customer Loyalty Index (2008 versus 2007)

9 1.0 %9 3 .0 %

8 8 .8 %

9 3 .0 %9 1.1%

9 2 .8 %

8 8 .3 %

9 6 .0 %

9 4 .0 %

8 9 .0 %8 8 .0 %

9 5.0 %

8 9 .0 %

9 4 .0 %9 5.0 %

8 1.0 %

9 6 .0 %

9 0 .0 %9 3 .0 %

8 5.0 % 8 5.3 %

8 8 .0 %

9 4 .7%

9 0 .3 %9 2 .9 %9 3 .3 %

8 6 .6 %

9 7.1%

8 5.5%8 7.4 %

8 9 .0 %

8 6 .3 %

8 3 .8 %

8 8 .4 %

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

Dea

ler 1

Dea

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Dea

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Dea

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Dea

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Dea

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Dea

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Dea

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Dea

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Dea

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0

Dea

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1

Dea

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2

Dea

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3

Dea

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4

Dea

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5

Dea

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6

Dea

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7

Dea

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8

Dea

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9

Customer Loyalty 2007 Customer Loyalty 2008

National average89.7%

Figure 4.14: Customer Loyalty Index by Dealers; 2008 versus 2007

As shown in Figure 4.15, a total of eleven (11) Yamaha Motor exclusive retails in

Malaysia were below the national average of Customer Loyalty Index. Eight (8) of

them had both indices (CSI and Customer Loyalty Index) below the national average

simultaneously, which represents 42 percent of the total number of Yamaha Motor

exclusive retails in Malaysia. Strategically, these eight (8) stores have been facing

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unfavourable conditions in terms of poor customer service, which will harm the

overall corporate brand image of HLYM.

8 dealers

3 dealers

Below Customer Loyalty Index

Below in both CSI and Customer Loyalty

Index

8 dealers

3 dealers

Below Customer Loyalty Index

Below in both CSI and Customer Loyalty

Index

8 dealers

3 dealers

Below Customer Loyalty Index

Below in both CSI and Customer Loyalty

Index

Figure 4.15: Total stores below national average; CSI and Loyalty Index, 2008

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CHAPTER 5: DISCUSSIONS

Discussions will be based on the implications of strategic analysis and the results of

descriptive statistics as well as service performance indices, which consist of Industry

Dominant Traits, Retail Network Overview, Life Cycle Implication of Motorcycle

Exclusive Retails, Retail Brand Positioning, Corporate Brand Overview, Strategy

Review, Un-weighted Customer Satisfaction Index, Customer Loyalty Index and

Performance indices.

RECAPITULATION OF ANALYSIS

Yamaha and Honda have sustained their respective positions as the main market

leaders with an average of 35 percent and 48 percent of the market share in 2007 due

to strong brand image and customer loyalty. Besides, they are the eminent brands of

dealership that engage in a systematic delivery facility to the end users through

providing services, spare parts and sales, which relate to before, during and after sales

service.

Currently, Modenas exclusive retails are in the decline stage while Yamaha Motor

exclusive retails are positioned at the maturity stage. Honda as the challenger of

Yamaha is attacking by its intensive capacity of 4S concept stores in Malaysia but is

unable to compete with Yamaha in terms of service quality. Yamaha is experiencing a

good quality of customer service compared to Honda and Suzuki.

Managing the corporate brand of Yamaha Motor exclusive retails in Malaysia is

important to keep strong brand equity in order to sustain competitiveness in the

market. It is insightful to ensure that brand knowledge exists to generate good service

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experience as well as the association of good brand image in the consumers’ memory

whereas customer satisfaction will be the key success factor for the achievements.

The development of action plan for improving customer satisfaction will be paralleled

to Hong Leong Yamaha Motor CCS (Customer and Community Satisfaction) core

strategies comprising condition quality, people quality and system quality. These core

strategies are important to drive and enhance the value of customer satisfaction

culture in Yamaha community. All critical areas for each service performance could

be rectified by using these core strategies.

The national average of Customer Loyalty Index in 2008 increased by 3.7 percent to

89.7 percent due to the effectiveness of the marketing services strategies implemented

in 2008, while the national average of CSI decreased by 0.9 percent in 2008 (83.9

percent), which might be caused by the evolution of customer expectations from time

to time. Many Yamaha customers might be attracted by the benefits provided by

Yamaha Motor exclusive retails, which made them stay loyal to the store and

recommend to their friends even though the service performance delivered was not

within a good standard. The highest decrease in terms of service performance is

delivery attributes followed by shop attributes, sales person attributes and

maintenance service attributes. A total of eleven (11) Yamaha Motor exclusive retails

in Malaysia were below the national average of Customer Loyalty Index. Eight (8) of

them had both indices (CSI and Customer Loyalty Index) below the national average

simultaneously. These eight (8) stores have been facing unfavourable conditions in

terms of service quality, which could harm the overall corporate brand image of

HLYM.

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CHAPTER 6: RECOMMENDATIONS

The Un-weighted Customer Satisfaction Index (CSI) of HLYM is an index regarding

the service performance of Yamaha Motor exclusive retails. It was calculated by

using a simple average without applying any weighting factor to each mean score

obtained from the four (4) parameters.

Moreover, this conventional calculation was fully granted in HLYM Quality

Management System (ISO 9001:2000), which did not indicate any distinct impact on

customer satisfaction. Nevertheless, every parameter (service performance attribute)

was treated as equally important towards customer satisfaction and retention in the

future. In reality, each parameter is able to produce a significant impact towards

customer satisfaction, which has been proven by many researchers such as Ad-Macs

Corporation Consultant (M).

6.1 Performance Matrix Introduction

Measuring the performance level of each parameter alone is not adequate to see the

impact between customer's voices and expectations towards customer satisfaction.

Subsequently, both the importance level of each parameter as well as the performance

score should be analysed together to see greater impact. So, performance matrix

analysis will be a tool for this requirement.

The performance matrix consists of parameters that were formatted into a Scatter plot.

This matrix is derived from an average of weightings (importance score) and

performance scores given by the respondents. Respondents will be requested to value

the importance of the parameters by asking to rate the weighting factor, say from the

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value of one to the value of ten (Bhave, 2002). The result from the performance

matrix analysis will be able to translate into a meaningful measurable descriptive

report that is able to provide a useful way for typical improvements to redefine the

focuses in enhancing customer satisfaction.

In addition to asking the respondents to rate the value of importance level for each

parameter, the indication of importance level could be made by ensuring some

questions relating to overall customer satisfaction are stated in the questionnaire as a

dependent variable. As such, every parameter should be regressed with the overall

customer satisfaction in which the value of regression coefficient generated by the

equation will denote the importance level of each parameter towards customer

satisfaction.

This performance matrix analysis will provide a better indication for manufacturers to

prioritize their action plan by referring to the strongest relationship or impacts and,

therefore, weighted CSIs could be recommended to HLYM to replace the current

application of un-weighted CSIs that are unable to represent a distinct impact of

customer satisfaction, and to encourage the usage of performance matrix analysis in

the decision making process.

6.2 Justification on the Service Gaps

As HLYM was using an un-weighted CSI to measure the service performance of

Yamaha Motor exclusive retails for many years without analysis in terms of

importance level or impact of each service performance attribute towards overall

customer satisfaction, justification on the service gaps and identification of

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unfavourable factors in terms of poor service performance will be conducted

practically and straight forward.

It could be done by using extraction techniques to identify the weakest attributes and

factors that affect the overall service performance of Yamaha Motor exclusive retails

in Malaysia the most. The sequence of extracting the weakest attributes and factors

are as follows:

• Short list those attributes and factors which have given negative value changes

(2008 versus 2007).

• Select those attributes and factors when the scores are below the national

average.

• Finally, attributes and factors will be classified under critical and non-critical

status.

Based on the service performance index, delivery attributes is the weakest area

because it had the highest decreasing score (highest negative value changes) in 2008,

however, it was not below the national average (CSI: 83.9 percent). On the other

perspective, sales person attributes was the one with the score below the national

average as well as with negative value changes. Thus, the most critical attribute that

caused serious service gaps was sales person attributes followed by delivery

attributes, maintenance service attributes and shop attributes (refer to Table 6.1).

Parameter Score 2008 vs 2007 Score vs Nat Av -ve VC <Nat Av Priority StatusSales Person Attributes 82.0% -0.8% -1.90% Yes Yes 1 CriticalDelivery Attributes 84.4% -2.3% 0.50% Yes 2Maintenence Service Attributes 84.6% -0.3% 0.65% Yes 3Shop Attributes 87.9% -1.1% 4.02% Yes 4-ve VS: Negative Value Changes

Nat Av: National Average (CSI: 83.9%)

Table 6.1: Service Performance; 2008 vs. 2007 and Scores vs. national average

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In detail, all factors of service performance with the respective decreasing score will

be selected for rectification. As shown in Table 6.2, a total of nineteen (19) factors

with a negative value or less than zero were shortlisted for recovery action. The value

changes of each factor, as discovered from the differences between times series (year

2008 versus 2007), will symbolise the overall performance of the factor alone, which

means, the nineteen (19) factors were facing unfavourable performance due to

negative value changes gained in 2008.

No. Parameter Factor 2007 2008 +/-1 Sales Person Attributes Attitude 90.0% 89.0% -1.0%2 Sales Person Attributes Willingness to listen to customer 88.0% 86.7% -1.3%3 Sales Person Attributes Explanation of sales terms and conditions 88.0% 87.2% -0.8%4 Sales Person Attributes Explanation of motorcycle service requirement and free inspection 83.0% 82.6% -0.4%5 Sales Person Attributes Test rides and demonstration 76.0% 67.6% -8.4%6 Sales Person Attributes Dealership information 86.0% 84.8% -1.2%7 Sales Person Attributes Overall handling of the sales professionalism 86.0% 83.7% -2.3%8 Shop Attributes Bike display in the shop 89.0% 87.4% -1.6%9 Shop Attributes Atmosphere of the shop 89.0% 87.4% -1.6%10 Delivery Attributes Appearance and cleaniness of motorcycle at delivery 91.0% 88.6% -2.4%11 Delivery Attributes Set up time at delivery and documentation procedure 89.0% 86.2% -2.8%12 Delivery Attributes Explanation of PDI items during motorcycle delivery 85.0% 80.8% -4.2%13 Maintenence Service Attributes Service staff performance 87.0% 86.1% -0.9%14 Maintenence Service Attributes Courtesy and friendliness 88.0% 87.3% -0.7%15 Maintenence Service Attributes Proper diagnosis of customer motorcycle 82.0% 81.3% -0.7%16 Maintenence Service Attributes Clear explanation of repair work requirement and job done 85.0% 84.2% -0.8%17 Maintenence Service Attributes Getting work done on time 86.0% 84.1% -1.9%18 Maintenence Service Attributes Commmitment to job done right the 1st time 87.0% 85.9% -1.1%19 Maintenence Service Attributes Willingness to listen to customer complaints 88.0% 85.8% -2.2%

Table 6.2: Shortlisted factors with negative value changes in 2008

Continually, all twenty six (26) factors will be further elaborated by comparing with

the national average of respective attributes. The rationale of implementing this

technique is to see whether the score of the factor is justifiable when it compares with

the general score and to see how good the achievement is perceived under a group of

sample or population. For example, if the score of a factor is below the base line of an

average score of respective attributes, the factor will be chosen as the main priority

for rectification.

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Hence, referring to Figure 6.1, the weakest areas of sales person attributes consisted

of two (2) factors; test rides and demonstration (67.6 percent), and explanation of

genuine and imitation spare parts (71.1 percent). These factors indicated a relatively

low score because they are positioned below the national average of sales person

attributes (82.0 percent).

Sales Person Attributes (2008)

83.7%84.8%

71.1%67.6%

82.6%83.2%

87.2%84.1%

86.7%89.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

Att

itude

Will

ingn

ess

to li

sten

to c

usto

mer

Expl

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ion

of p

rodu

ct a

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ion

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Expl

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of m

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on

Expl

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Test

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National Average 82.0%

Sales Person Attributes (2008)

83.7%84.8%

71.1%67.6%

82.6%83.2%

87.2%84.1%

86.7%89.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

Att

itude

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Expl

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National Average 82.0%

National Average 82.0%

Figure 6.1: Sales Person Attributes against national average

Next, in terms of shop attributes, which were represented by three factors, it indicated

that only two factors have scores below the national average (87.9 percent). The two

(2) factors that will be needed for further improvement and rectification consisted of

bike display in the shop (87.4 percent) and atmosphere of the shop (87.4 percent).

These factors were relatively important to represent overall image of the store as well

as corporate brand image (refer to Figure 6.2).

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Shop Attributes (2008)

87.4%

89.0%87.4%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

Bike display in the shop Cleaniness of the shop Atmosphere of the shop

National Average 87.9%

National Average 87.9%

Figure 6.2: Shop Attributes against national average

In terms of delivery attributes, the national average was 84.4 percent as shown in

Figure 6.3. The most distinct factors as identified below national average consisted of

explanation of motorcycle function at delivery (82.0 percent) and explanation of pre-

delivery inspection items during motorcycle delivery (80.8 percent).

Delivery Attributes (2008)

80.8%82.0%

86.2%

88.6%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

Appearance andcleaniness of motorcycle

at delivery

Set up time at delivery anddocumentation procedure

Explanation of motorcyclefunctions at delivery

Explanation of PDI itemsduring motorcycle delivery

National Average 84.4%

National Average 84.4%

Figure 6.3: Delivery Attributes against national average

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Lastly, the national average of maintenance service attributes was 84.6 percent, which

will be a standard base line for the factors as shown in Figure 6.4. There were five (5)

factors indicated at below national average; cleanliness of bike servicing area (83.0

percent), explanation of warranty (83.2 percent), proper diagnosis of customer

motorcycle (81.3 percent), clear explanation of repair work requirements and job done

(84.2 percent) and getting work done on time (84.1 percent). These factors are

relatively important because they tend to contribute the most to customer loyalty in

general.

Maintenance Service Attributes (2008)

86.1%

87.3%

83.0% 83.2%

81.3%

84.2% 84.1%

85.9% 85.8%

80.0%

81.0%

82.0%

83.0%

84.0%

85.0%

86.0%

87.0%

88.0%

89.0%

90.0%

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National Average 84.6%

National Average 84.6%

Figure 6.4: Maintenance Service Attributes against national average

A total of eleven (11) unfavourable factors were grouped together as shown in Table

6.3 after being compared with the national average of each attribute. These factors

gave negative values when the scores were compared with the national average.

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No. Parameter Factor Score Score vs Nat Av1 Sales Person Attributes Test rides and demonstration 67.6% -14.4%2 Sales Person Attributes Explanation of genuine and imitation spare parts 71.1% -10.9%3 Shop Attributes Bike display in the shop 87.4% -0.5%4 Shop Attributes Atmosphere of the shop 87.4% -0.5%5 Delivery Attributes Explanation of motorcycle functions at delivery 82.0% -2.4%6 Delivery Attributes Explanation of PDI items during motorcycle delivery 80.8% -3.6%7 Maintenence Service Attributes Cleaniness of service area 83.0% -1.6%8 Maintenence Service Attributes Explanation of warranty 83.2% -1.4%9 Maintenence Service Attributes Proper diagnosis of customer motorcycle 81.3% -3.3%10 Maintenence Service Attributes Clear explanation of repair work requirement and job done 84.2% -0.4%11 Maintenence Service Attributes Getting work done on time 84.1% -0.5%

Nat Av: Sales Person Attributes: 82.0%, Delivery Attributes: 84.4%, Maintenance Service Attributes: 84.6%, Shop Attributes: 87.9%)

Table 6.3: Unfavourable factors with scores below national average

In summary (refer to Table 6.4), there were twenty three (23) unfavourable factors in

terms of poor performance (negative value changes and below national average) that

have been rearranged into two (2) conditions; critical and non-critical, which are

based on selection criteria as follows:

• Unfavourable factors with scores below the national average will be classified

as critical factors.

• Next, all critical factors and non-critical factors will be rearranged based on

the sequence of attributes starting from sales person attributes, delivery

attributes, maintenance service attributes and shop attributes.

No. Parameter Factor Score +/- Score vs Nat Av -ve VC <Nat Av Status Priority1 Sales Person Attributes Test rides and demonstration 67.6% -8.4% -14.4% Yes Yes Critical 12 Sales Person Attributes Explanation of genuine and imitation spare parts 71.1% 4.1% -10.9% Yes Critical 23 Delivery Attributes Explanation of PDI items during motorcycle delivery 80.8% -4.2% -3.6% Yes Yes Critical 34 Delivery Attributes Explanation of motorcycle functions at delivery 82.0% 0.0% -2.4% Yes Critical 45 Maintenence Service Attributes Proper diagnosis of customer motorcycle 81.3% -0.7% -3.3% Yes Yes Critical 56 Maintenence Service Attributes Clear explanation of repair work requirement and job done 84.2% -0.8% -0.4% Yes Yes Critical 67 Maintenence Service Attributes Getting work done on time 84.1% -1.9% -0.5% Yes Yes Critical 78 Maintenence Service Attributes Cleaniness of service area 83.0% 1.0% -1.6% Yes Critical 89 Maintenence Service Attributes Explanation of warranty 83.2% 4.2% -1.4% Yes Critical 9

10 Shop Attributes Atmosphere of the shop 87.4% -1.6% -0.5% Yes Yes Critical 1011 Shop Attributes Bike display in the shop 87.4% -1.6% -0.5% Yes Yes Critical 1112 Sales Person Attributes Explanation of motorcycle service requirement and free inspection 82.6% -0.4% 0.6% Yes 1213 Sales Person Attributes Willingness to listen to customer 86.7% -1.3% 4.7% Yes 1314 Sales Person Attributes Explanation of sales terms and conditions 87.2% -0.8% 5.2% Yes 1415 Sales Person Attributes Attitude 89.0% -1.0% 7.0% Yes 1516 Sales Person Attributes Overall handling of the sales professionalism 83.7% -2.3% 1.7% Yes 1617 Sales Person Attributes Dealership information 84.8% -1.2% 2.8% Yes 1718 Delivery Attributes Set up time at delivery and documentation procedure 86.2% -2.8% 1.8% Yes 1819 Delivery Attributes Appearance and cleaniness of motorcycle at delivery 88.6% -2.4% 4.2% Yes 1920 Maintenence Service Attributes Service staff performance 86.1% -0.9% 1.5% Yes 2021 Maintenence Service Attributes Courtesy and friendliness 87.3% -0.7% 2.7% Yes 2122 Maintenence Service Attributes Willingness to listen to customer complaints 85.8% -2.2% 1.2% Yes 2223 Maintenence Service Attributes Commmitment to job done right the 1st time 85.9% -1.1% 1.3% Yes 23

-ve VS: Negative Value Changes

Nat Av: National Average (Sales Person Attributes: 82.0%, Delivery Attributes: 84.4%, Maintenance Service Attributes: 84.6%, Shop Attributes: 87.9%)

Table 6.4: Factors with negative value changes and below national average

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Nevertheless, twenty three (23) unfavourable factors that affected the overall service

performance could be rectified together in order to enhance the service quality of

Yamaha Motor exclusive retails. Intensive care with an effective action plan must be

prioritised and focused on the first eleven (11) critical factors due to the major effect

on the Customer Satisfaction Index.

The development of the action plan will focus on all critical and non-critical factors

and rely on three (3) core strategies (condition quality, people quality and system

quality). In general, these core strategies are mainly related to standard service quality

emphasized by HLYM.

6.3 Action Plan

An action plan for improving customer satisfaction will be developed by referring to

Hong Leong Yamaha Motor Customer and Community Satisfaction (CCS) core

strategies. CCS core strategies consist of condition quality, people quality and system

quality, which could drive and enhance the value of the customer satisfaction culture

in the Yamaha community (refer to Figure 6.5).

Condition Quality: An aspect of managing the physical area of the retail area (Sales,

Service and Spare parts) and ensuring it has a responsive retail outlook that represents

the overall Yamaha visual identity and is able to provide an atmosphere conducive to

retail activities.

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People Quality: An aspect of managing people, soft skills in order to handle customer

matters well such as reliable explanations, technical solutions, warranty and customer

complaints.

System Quality: An aspect of managing proper implementation by getting all matters

of Sales, Service and Spare parts to be systematically worked together,

interdependent, proper diagnostic and documentation. Facilities such as digitalization

and connectivity will work best for managing system quality.

Condition Quality

People Quality

System Quality

CUSTOMER &COMMUNITY SATISFACTION

CUSTOMER &COMMUNITY SATISFACTION

CUSTOMER SATISFACTION CULTURECUSTOMER SATISFACTION CULTURE

CORE STRATEGYCORE STRATEGY

Condition Quality

People Quality

System Quality

CUSTOMER &COMMUNITY SATISFACTION

CUSTOMER &COMMUNITY SATISFACTION

CUSTOMER SATISFACTION CULTURECUSTOMER SATISFACTION CULTURE

CORE STRATEGYCORE STRATEGY

Source: Marketing Services, Condition, People & System Quality (CPS), HLYM Sdn. Bhd.

Figure 6.5: Customer & Community Satisfaction Core Strategy

Improving condition quality is a strategic solution for any weaknesses related to shop

attributes because it is mainly to rectify the condition of the store. The improvement

will be referred to an application of impressive and conducive retail atmosphere,

which is able to create a store that customers feel good about entering.

Moreover, managing and improving people quality is a strategic solution for any

weaknesses discovered from sales person attributes and maintenance service

attributes. This strategy is relevant to rectify those factors that relate to poor sales

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service consultation and poor handling in terms of technical repairs and customer

complaints.

In fact, managing system quality will not be ignored and is very important to improve

any system failures identified specifically from delivery attributes. Failures of

delivery attributes could consist of poor procedures that involve poor preparation of

motorcycles for delivery and collection by customer.

Tactical Approaches

When the core strategies have been applied to each service performance attribute,

thus, tactical approaches will be assigned for each core strategy with respective

execution programmes in order to rectify all the relevant unfavourable factors that

have been identified previously.

1. Increase the frequency of monitoring and enforcement.

Improving condition quality, which also refers to the way of maintaining and ensuring

the environment of the retail outlets to represent the brand image of Yamaha Motors

and to ensure it is meeting the operating standard as required. As such, the most

appropriate tactical approach for this core strategy is to increase the frequency of

monitoring and enforcement.

Objective and Rationale:

The purpose of increasing the frequency of monitoring and enforcement is to ensure

the dealers are improving and maintaining the physical condition of the stores

continuously after being consulted by HLYM personnel with corrective advice.

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Attitude problem is always a point of the environment being messy and disorganized.

Besides, lack of motivation to maintain a conducive atmosphere for the stores is very

critical and the reward and punishment will be the cure.

Proposed Executions:

a) HLYM’s commitment:

• Consult the respective Yamaha Motor exclusive dealers by revealing the most

apparent weaknesses and asking for their cooperation to reduce the service

gaps and to seriously take note of factor 10 and factor 11 (atmosphere of the

shop and bike display in the shop as shown in Figure 37).

• Furthermore, activities, namely, observatory visits and a mystery shopper

survey should be conducted frequently in order to gauge the standard of the

exclusive retails and provide reports for user management.

b) Dealer’s commitment:

• Dealer should ensure good cooperation with HLYM in order to improve the

condition of the store and to be optimistic of having a conducive retail.

• Moreover, dealers assistance and commitment will be needed to ensure the

showroom and bike servicing area to meet the standard and ensure the bike

display is Yamaha brand only and sufficient for customers to view.

2. Emphasising education and training to overcome weaknesses.

Managing people quality, which is a method of solving poor service performance in

terms of personal services provided by sales persons and service technicians

(mechanics) who are dealing with customers most of the time. There were seventeen

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(17) unfavourable factors discovered from sales person attributes and maintenance

service attributes, which could be rectified by emphasising education and training to

overcome weaknesses.

Objective and Rationale:

The main purpose of emphasising education and training is to ensure the service

quality is consistent and the staffs are updated to overcome the latest weaknesses

discovered from service encounters. Yamaha Motor exclusive retails in Malaysia

always have a high turnover rate in terms of sales personnel and service technicians,

which has caused inconsistency in performance and service quality. In addition, many

staffs are reluctant to be trained, especially for the senior service technician’s

positions due to the illiteracy factor.

Proposed Executions:

a) HLYM’s commitment:

• An intensive care with effective rectification must be prioritised and focused

on factors 1, 2, 5, 6, 7, 8 and 9 to create a better CSI in the future (test ride and

demonstration; explanation of genuine and imitation spare parts; proper diagnosis of

customer’s motorcycle; clear explanation of repair work requirement and job done;

getting work done one time; cleanliness of service area; explanation of warranty).

• Management supports in the development of quality education and training

shall be emphasised in order to produce an effective training syllabus.

• The appropriate execution programmes for this approach are to conduct

quality and interesting Salesmanship and Customer Care Training for dealer

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sales staff and quality technical training (Yamaha Technical Academy) for

dealer service technicians.

b) HLYM Sales & Service Personnel’s commitment:

• To educate dealer with stated benefits of having test rides and a demonstration

which would arouse customer confidence during the decision making process.

• To provide dealers with constructive information regarding genuine spare

parts, imitation spare parts and the warranty process that will make the

customer believe in HLYM and dealer and they will feel safe when using it.

• To stress a proper attitude of dealer service technician when giving a technical

diagnosis, repair works and ensuring cleanliness of the service area which

would make the customer feel good about the professionalism of the staff.

• To upgrade and enhance the quality of the training syllabus, handbook, CDs,

video learning materials and learning academy.

c) Dealer’s commitment on their staff:

• To enforce their respective staff to attend all the HLYM Sales & Technical

Trainings at least once a year.

• To provide intensive cares to their Sales & Technical staff in order to reduce

the staff turnover rate.

• Dealers should not rely too much on HLYM’s motivation on their staff but

team work between manufacturer and dealers should be emphasised to

produce capable manpower for the business.

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3. Educate and train to implement proper set up and documentation

Lastly, managing system quality refers to the way of improving any system failures

identified specifically from delivery attributes. Failures of delivery attributes could

consist of poor procedures that involve poor preparation of motorcycles for delivery

and collection by customer. Thus, the most appropriate tactical approach for this core

strategy is to educate and train to implement proper set up and documentation.

Objective and Rationale:

The main purpose of this tactic is to educate and train of how to implement a proper

set up and documentation to ensure all Yamaha Motor exclusive retails in Malaysia

are systematically and digitally applied for every transaction being made including

before, during and after sales. Having proper documentation and a systematic set up

are very important factors in quality control and always a part of ISO 9002. Lacking

this terminology will create many potential mishaps either psychical or non-physical,

especially in the motorcycle business. Customers will be coming back to sue and

make claims for what they had paid and no repeat-purchases in the future.

Proposed Executions:

a) HLYM’s commitment:

• To consult the respective Yamaha Motor exclusive dealers by revealing the

four (4) unfavourable factors and asking for their cooperation to reduce the

service gaps and to seriously take note of at least factor 3 and factor 4, which

consist of explanation of pre-delivery (PDI) items during motorcycle delivery

and explanation of motorcycle functions at delivery.

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• To seek dealer’s cooperation to document all the PDI records and give a

proper explanation of motorcycle functions when delivery transactions are

conducted and make them aware of the potential risks of not conducting the

task.

• Moreover, HLYM to enforce frequent observatory visits and mystery shopper

surveys in order to observe whether they have made the improvement or

changes.

• Furthermore, incorporate an effective syllabus by stressing the benefits of the

implementation and the importance of having it through quality Salesmanship

and Customer Care Training.

b) Dealer’s commitment:

• Dealer to ensure that they will have intention to change its current

management system and implement systematic procedure.

• Recruit additional staff that equipped with IT skill who able to contribute in

managing the digital transaction.

• Dealer to ensure good discipline in getting everything documented and

duplication to be provided to the customer upon delivery.

In summary, all the twenty three (23) unfavourable factors in terms of poor service

performance could be rectified strategically by getting the three (3) CCS core

strategies in place. As shown in Figure 6.6, the diagram of strategy overview

illustrates the summary of CCS core strategies, tactical approaches and effective

programmes for execution.

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To educate & train to overcome weakness

To educate & train to overcome weakness

To increase frequency of monitoring‐enforcementTo increase frequency of monitoring‐enforcement

To educate & train to implement proper set up &

documentation

To educate & train to implement proper set up &

documentation

Delivery AttributesDelivery AttributesShop AttributesShop Attributes Sales Person Attributes

Sales Person Attributes

Maintenance Service Attributes

Maintenance Service Attributes

Yamaha Technical Academy Training

Yamaha Technical Academy Training

Salesmanship & Customer Care

Training

Salesmanship & Customer Care

Training

Meeting with dealer

(Consultancy)

Meeting with dealer

(Consultancy)

Observatory visit

Observatory visit

Mystery shopper survey

Mystery shopper survey

Upg

rade

& e

nhan

ce th

e qu

alit

y of

tra

inin

g sy

llabu

s,

hand

book

, CD

s an

d vi

deo

lear

ning

mat

eria

ls

Quality Consultation + Training + Educating + TTTEnforcement & strictnessFreq

uent

pra

ctic

e

Condition Quality

People Quality

System Quality

CUSTOMER &COMMUNITY SATISFACTION

CUSTOMER &COMMUNITY SATISFACTION

CUSTOMER SATISFACTION CULTURECUSTOMER SATISFACTION CULTURE

CORE STRATEGYCORE STRATEGY

To educate & train to overcome weakness

To educate & train to overcome weakness

To increase frequency of monitoring‐enforcementTo increase frequency of monitoring‐enforcement

To educate & train to implement proper set up &

documentation

To educate & train to implement proper set up &

documentation

Delivery AttributesDelivery AttributesShop AttributesShop Attributes Sales Person Attributes

Sales Person Attributes

Maintenance Service Attributes

Maintenance Service Attributes

Yamaha Technical Academy Training

Yamaha Technical Academy Training

Salesmanship & Customer Care

Training

Salesmanship & Customer Care

Training

Meeting with dealer

(Consultancy)

Meeting with dealer

(Consultancy)

Observatory visit

Observatory visit

Mystery shopper survey

Mystery shopper survey

Upg

rade

& e

nhan

ce th

e qu

alit

y of

tra

inin

g sy

llabu

s,

hand

book

, CD

s an

d vi

deo

lear

ning

mat

eria

ls

Quality Consultation + Training + Educating + TTT

Upg

rade

& e

nhan

ce th

e qu

alit

y of

tra

inin

g sy

llabu

s,

hand

book

, CD

s an

d vi

deo

lear

ning

mat

eria

ls

Upg

rade

& e

nhan

ce th

e qu

alit

y of

tra

inin

g sy

llabu

s,

hand

book

, CD

s an

d vi

deo

lear

ning

mat

eria

ls

Quality Consultation + Training + Educating + TTTQuality Consultation + Training + Educating + TTTEnforcement & strictnessFreq

uent

pra

ctic

e

Enforcement & strictnessFreq

uent

pra

ctic

e

Condition Quality

People Quality

System Quality

CUSTOMER &COMMUNITY SATISFACTION

CUSTOMER &COMMUNITY SATISFACTION

CUSTOMER SATISFACTION CULTURECUSTOMER SATISFACTION CULTURE

CORE STRATEGYCORE STRATEGY

Figure 6.6: Strategy Overview for the year of 2009

There were many similarities in the action plans for 2008 and 2009. Most of the

approaches illustrated in 2009 were extended from 2008 and imparted with quality

enforcement. The major differences are noticeably based on the quality of training

and effective learning. It is important for Training syllabuses and materials to be

upgraded continuously in terms of effectiveness to ensure the learning capability of

dealers and sales staff as well. In addition, strictness and frequent observatory visits

will be practiced by HLYM in order to monitor the service quality provided by

Yamaha Motor exclusive retails. Moreover, internal training to enhance the quality of

HLYM instructors (Train the trainer programme) will be the main consideration in

2009 as the quality of service performance provided by dealers will rely directly on

the quality of HLYM instructors as well.

By doing so, the eleven (11) Yamaha Motor exclusive retails in Malaysia, who have

their respective CSI and customer loyalty index below the national average, will be

chosen as the main focus for intensive improvement. They are Dealer1, Dealer2,

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63

Dealer3, Dealer4, Dealer5, Dealer6, Dealer7, Dealer10, Dealer16, Dealer18 and

Dealer19 (refer to Figure 6.7).

Indices for the year of 2008

8 6 .3 %

8 8 .8 %

9 3 .0 %

8 8 .3 %8 8 .4 %

8 3 .8 %

8 5.5%

9 7.1%

8 6 .6 %

9 3 .3 % 9 2 .9 %

9 1.1%

9 4 .7%

8 8 .0 %

9 2 .8 %

8 5.3 %

9 0 .3 %8 9 .0 %

8 7.4 %

78 .2 %

8 7.2 %8 7.2 %

8 4 .1%

8 6 .5%

8 1.2 %8 0 .2 %

75.2 %

8 7.8 %

79 .1%

8 1.0 %

9 0 .7%

76 .7%

8 8 .6 % 8 8 .6 %8 5.8 %

9 0 .0 %

8 6 .1%

78 .1%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

Dea

ler 1

Dea

ler 2

Dea

ler 3

Dea

ler 4

Dea

ler 5

Dea

ler 6

Dea

ler 7

Dea

ler 8

Dea

ler 9

Dea

ler 1

0

Dea

ler 1

1

Dea

ler 1

2

Dea

ler 1

3

Dea

ler 1

4

Dea

ler 1

5

Dea

ler 1

6

Dea

ler 1

7

Dea

ler 1

8

Dea

ler 1

9

Customer Loyalty 2008 CSI 2008

National CSI83.9%National CSI83.9%

National Customer Loyalty Index89.7%

National Customer Loyalty Index89.7%

Figure 6.7: Indices for the year of 2008; National CSI and Loyalty Index

6.4 Implementation and Scheduling

An annual implementation and scheduling for 2009 will be developed in order to

ensure all managerial and execution tasks can be accomplished on time, which

consists of preparation of action plan, execution of tactical approaches and review

activity. Three stages (pre-event, during event and post-event) have been designed for

the year as shown in Figure 6.8. The stages are pre-event four (4) months, during

event five (5) months and post-event stage (3 months).

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64

DecNovOctSepAugJulJunMayAprMarFebJan DecNovOctSepAugJulJunMayAprMarFebJan

Pre‐Event During Event Post‐Event

Data Analysis & Compute CSI

Data Analysis & Compute CSI

Presentation to Management

Presentation to Management

Discussion on the findings and results with key

management

Discussion on the findings and results with key

management

Prepare Action Plan and Budget

Prepare Action Plan and Budget

Share results with respective

dealers

Share results with respective

dealers

Review & develop training

syllabus

Review & develop training

syllabus

Yamaha Technical Academy TrainingYamaha Technical Academy Training

Salesmanship & Customer Care TrainingSalesmanship & Customer Care Training

Observatory Visit

Observatory Visit

Mystery shopper survey on dealers and

competitors

Mystery shopper survey on dealers and

competitors

Observatory Visit

Observatory Visit

CSI Survey for 2009

CSI Survey for 2009

6 stores

6 stores

5 stores

5 stores

5 stores

6 stores

6 stores

5 stores

5 stores

5 stores

Execution Plan For the year of 2009

Web Page Enquiries ManagementWeb Page Enquiries Management

Figure 6.8: Execution Plan for the year of 2009

The major functions in the pre-event stage relate to planning and management

procedures. Within this period, the works consist of data analysis and CSI

computation, discussion on the findings and share results with key management,

preparation of action plan, budgeting, presentation to board of management, review

and develop training syllabus and share results with Yamaha Motor exclusive dealers.

During the event stage, the executions will mostly relate to the training programme.

The training programme will start in May and continue until Sep 2009. It will consist

of Salesmanship and Customer Care Training for all Yamaha Motor exclusive

dealers’ sales staff and Yamaha Technical Academy (YTA) Training for all dealers’

mechanics to raise their professional level to a higher level of advanced learning.

There are about five to six training programmes to be conducted for each month.

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65

Finally, for the post event stage, which could be considered as the evaluation stage,

where spot checks, review and survey on customer service quality will be conducted.

The main activities of this stage consist of the mystery shopper survey on Yamaha

Motor exclusive retails, tracking competitors’ movement and conducting observatory

visits to monitor condition quality and system quality of exclusive retails. The

customer satisfaction index survey will be executed by the end of the year.

6.5 Milestone of Implementation

A Time-series projection of customer satisfaction index and customer loyalty index

for 2009 and 2010 are developed by using trend projection. These projection results

will be meaningful if the action plans are implemented accordingly to rectify the

weaknesses discovered from the analysis as stated previously.

This projection technique fits the trend line to a series of historical data points and

then projects the line into the future for medium-to-long-range forecast. A linear trend

line will be developed by using a precise statistical method; least squares method.

This approach results in a straight line that minimizes the sum of the squares of the

vertical differences or deviation from the line to each of the actual observations (Jay

Heizer, 2006).

As shown in Figure 6.9, the customer loyalty index for 2009 and 2010 was projected

at 92.0 percent and 94.6 percent, respectively, while the customer satisfaction index

was projected at 92.9 percent (2009) and 99.2 percent (2010). Both indices were

projected by using scientific methodology (Least Squares Projection) and these results

have been debated by the key management of HLYM.

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66

As commented by key management, the trend line of indices projected by using the

scientific method seemed too high to be achieved and considered unrealistic at this

moment. Moreover, the Customer Satisfaction Index could not be higher than the

Customer Loyalty Index in reality. It is meaningless if the customer loyalty is low or

does not exist even if customers have been satisfied with the service provided.

Nevertheless, the satisfaction index is always lower than the loyalty index as proven

by the indication for the years 2005 until 2008.

Besides, the customer expectancy level is always inconsistent and unable to be fully

met. Thus, a tight monitoring of gradual increments for both indices is essential in

order to avoid drastic surges or decreases. Nonetheless, if there is a drastic surge for a

certain year, there is a high possibility of a drastic drop in the future. A High

Customer Satisfaction Index cannot be sustained long in reality as people will

perceive that service performance of any business always fluctuates according to the

changes in customer expectation from time to time. Therefore, a conventional

adjustment was made to the trend line of indices by targeting as follows:

• Customer Satisfaction Index - 85.0 percent in 2009 and 86.0 percent in 2010

• Customer Loyalty Index - 91.0 percent in 2009 and 92.0 percent in 2010.

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67

(Based on Least Square Projection Method for 2009 & 2010)

81.5%84.5%

86.0%

89.7%92.0%

94.6%

67.3%

71.3%

84.8% 83.9%

92.7%

99.0%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

105.0%

2005 2006 2007 2008 2009 2010

Perc

enta

ge

Customer Loyalty Index Unweighted CSI

(Management Adjustment: Target Indices for 2009 & 2010)

92.0%91.0%89.7%

86.0%84.5%

81.5%

86.0%85.0%

83.9%84.8%

71.3%

67.3%

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

2005 2006 2007 2008 2009 2010

Perc

enta

ge

Customer Loyalty Index Unweighted CSI

TargetTargetProjectionProjection

Trend Line Of Indices

Figure 6.9: Trend line projection, 2005-2010

6.6 Sales Projection and Cost Benefit Analysis

The forecast of Yamaha motorcycle sales for the year of 2009 and 2010 will be

regressed between historical CSI and historical sales volume by applying least square

method. When the CSI is 85 percent in 2009 and 86 percent in 2010, the sales volume

of Yamaha motorcycle will be forecasted at 183,752 units and 188,201 units

respectively (refer to figure 6.10). The decreasing unit of sale by 6431 units in 2009 is

due to the outcome gained from low CSI in 2008 and later on, the sales will be

predicted to improve in 2010 when the CSI reached at 85 percent in 2009.

The total allocation of capital expenditure (CAPEX) for Customer Relationship

Management (CRM) activities varied over the years. As such, cost benefit analysis is

applied to measure the effectiveness of total cost allocated for each unit of sales. The

cost benefit per unit of sales for each year is indicated a downward trend except a

mild increase in 2008 due to additional CAPEX allocated for CRM activities (refer to

figure 6.10). While, the following cost benefit per unit of sales in 2009 and 2010 are

forecasted at RM0.44 and RM0.43 respectively. Thus, improvement in CSI is vital in

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68

order to produce good sales volume which could dedicate cost effective in term of

cost benefit for each unit of sales in future.

(Sales Projection Based on CSI for 2009 & 2010)

188201183752190183

168879

136983

93489

86.0%85.0%83.9%84.8%

71.3%

67.3%

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

2005 2006 2007 2008 2009 2010

Sale

s (U

nit)

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

Yamaha Sales Volume (Unit) Un-weighted CSI

(Cost Benefit Versus CSI)

0.80

0.62

0.400.48

0.44 0.43

67.371.3

84.8 83.9 85.0 86.0

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

1.10

1.20

1.30

1.40

1.50

2005 2006 2007 2008 2009 2010

Cos

t Ben

efit

per u

nit o

f sal

e

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

Cost Benefit Analysis CSI

(Sales Projection based on CSI for 2009 & 2010)

Projection

(Cost Benefit Versus CSI

Projection

2005 2006 2007 2008 2009 201075000 85500 67500 92000 80000 80000CAPEX

Figure 6.10: Sales Projection & Cost Benefit Analysis, 2005-2010

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69

CHAPTER 7: RISK MANAGEMENT &

CONTIGENCY PLANNING

Many businesses today tend to have high risk, high visibility and high impact on their

customers as well as our everyday lives because of high exposure to potential crises.

Due to these characteristics, the potential damage from a crisis can be greatly

multiplied. Unprepared, misinformed or ill-at-ease management, or disgruntled

dealers and customers have the potential of doing inestimable damage to the business

or industry. As such, this chapter will produce some suggestions for contingency

planning for any matters that are uncontrollable or result from failure in

implementation.

7.1 JUSTIFICATION OF POTENTIAL RISKS

Most of the time, the failure in implementation is seldom caused by the lack of

resources allocated for improvement programmes but is mainly caused by attitude

problems among the dealers who are not willing to accept the improvement or reject

the changes.

Moreover, a lack of support and conflict between the manufacturer and dealers, will

tend to produce a severe constraint for HLYM in achieving its policy of having

Customer Satisfaction No.1; a policy of setting customer satisfaction as a main

priority. Dealers might be reluctant to implement those activities that relate to

consumer centric programmes recommended by the manufacturer because their aim is

to make a quick profit based on fair customer service and to achieve the state target

for incentives.

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70

In terms of CSI, the method of calculation is based on conventional techniques that

are granted in the HLYM Quality Management System (ISO 9001:2000), which

means the index computation is indicated as an un-weighted CSI. This index is unable

to denote any impact between service performance attributes and customer

satisfaction and might cause potential failure in terms of effectiveness of the action

plan. Service performance attributes were unable to be regressed with overall

customer satisfaction, which is typically applied by many consultancies and research

companies who specialize in measuring customer satisfaction.

Thus, five (5) contingency plans have been developed as back up for tactical

approaches to fulfil the corporate mission.

7.2 METHODOLOGY OF IDENTIFYING POTENTIAL RISKS

In addition to having three (3) tactical approaches as stated previously in the action

plan (to educate and train to overcome weakness, to educate and train to implement

proper set up and documentation and to increase frequency of monitoring-

enforcement), a few tactical approaches will be placed as reserve players to ascertain

whether the improvement really goes accordingly or not; an observatory visit and

mystery shopper survey will be able to provide some useful information of overall

improvement progress being made by the people (Yamaha Motor exclusive retails).

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71

7.3 CONTINGENCY STRATEGY

Five contingency strategies have been created for back up purposes, which consist of

a new reward programme, termination of exclusivity, expansion of coverage,

customer relationship marketing and conduct CSI with weighting factor.

Contingency Plan 1

The first contingency plan is to implement a new dealer’s reward programme, a

benefit driven approach by replacing the standard package, which is unattractive, with

an attractive one. The creation of a new dealer’s reward programme incorporating

better incentives returns will be able to stimulate the dealer’s mindset towards

consumer centric perception and motivate dealer’s commitment towards the positive

application of good customer service for future profits.

Contingency Plan 2

The second contingency plan is to conduct a termination of the exclusivity, a

punishment aspect for those Yamaha Motor exclusive retails that did not comply with

HLYM’s operating standards. For example, dealers unable to meet the standard

requirements or that do not make improvements requested by the manufacturer to

enhance the quality of service performance and overall representation of Yamaha

image. In these cases, degrading of the exclusivity status will be imposed on them and

they will become a normal dealer just doing normal selling activities.

Contingency Plan 3

The third contingency plan is to continuously expand the coverage of Yamaha Motor

exclusive retail programme by encouraging new applications from young dealers as

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72

well as recommendations to upgrade from their standard dealership to an exclusive

dealership. There are still plenty of Yamaha dealerships in Malaysia that could be

explored by introducing an exclusive retail programme to them. This introduction

should be focused on those applicants who are young enough, energetic and positive

thinking who are willing to accept an ever-changing trend, positively adapt to new

ideas and concepts, look forward to continuous improvement and strongly abide by

any requirements stated by the manufacturer from time to time.

Contingency Plan 4

Next, CRM (Customer Relationship Management) is a very good supporting tool for

all Yamaha Motor exclusive retails in gaining merit from Yamaha customers. Service

performance of the retails will be enhanced naturally if the dealers take initiatives to

implement any CRM programmes recommended by the manufacturer. Monetary

contributions from the manufacturer are an essential resource to support the

smoothness of their CRM programme. Dealers will make themselves feel better in

front of their customers if their customer programme, such as customer day, bike

servicing campaign, riding expedition programme and so forth are partly supported by

the manufacturer and they will be delighted as their main critical issue and constraint

is monetary and non-monetary resources.

Contingency Plan 5

As for the fifth contingency plan, if the whole action plan is really unable to rectify

the weaknesses projected by the un-weighted CSI effectively it means it is a

measuring problem. Measuring the performance level of each parameter alone is not

adequate to see the impact between customer's voices and expectations towards

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73

customer satisfaction. Subsequently, both importance levels of each parameter as well

as the performance score should be analysed together to see greater impact.

Consequently, the performance matrix analysis will be a tool for this requirement. The

performance matrix analysis will provide a better indication for manufacturers to

prioritize their action plan by referring to the strongest relationship or impact and,

therefore, weighted CSI could be recommended to HLYM to replace the current

application of un-weighted CSI, which is unable to represent a distinct impact of

customer satisfaction and to encourage the usage of performance matrix analysis in

the decision making process.

An overview of risk management and contingency planning for 2009, which indicated

the connectivity amongst marketing services strategies, potential risks and back up

strategies, has been summarized and shown in Figure 7.1.

Risk Management & Contingency Planning

Lacking of resourcesLacking of resources

Dealer attitude problem

Dealer attitude problem

Not willing to accept the improvement or reject the changes.

Not willing to accept the improvement or reject the changes.

Lack of supportiveness

Lack of supportiveness

Conflict interest and mission between manufacturer and

dealers

Conflict interest and mission between manufacturer and

dealers

5 contingency plans for creating Customer Satisfaction No. 15 contingency plans for creating Customer Satisfaction No. 1

Risk

Obs

erva

tory

vis

itM

yste

ry s

hopp

er s

urve

y

New Reward Program

New Reward Program

Termination of the exclusivity

Termination of the exclusivity

Expansion of exclusive retail

coverage

Expansion of exclusive retail

coverage

CRM (Customer Relationship

Management)

CRM (Customer Relationship

Management)

Un‐weighted CSI unable to show real

impact between service performance

and customer satisfaction

Un‐weighted CSI unable to show real

impact between service performance

and customer satisfaction

To educate & train to overcome weakness

To educate & train to overcome weakness

To increase frequency of monitoring‐enforcementTo increase frequency of monitoring‐enforcement

To educate & train to implement proper set up &

documentation

To educate & train to implement proper set up &

documentation

Delivery AttributesDelivery AttributesShop AttributesShop Attributes Sales Person Attributes

Sales Person Attributes

Maintenance Service Attributes

Maintenance Service Attributes

Yamaha Technical Academy Training

Yamaha Technical Academy Training

Salesmanship & Customer Care

Training

Salesmanship & Customer Care

Training

Meeting with dealer

(Consultancy)

Meeting with dealer

(Consultancy)

Observatory visit

Observatory visit

Mystery shopper survey

Mystery shopper survey

Upg

rade

& e

nhan

ce t

he

qual

ity

of t

rain

ing

sylla

bus,

ha

ndbo

ok, C

Ds

and

vide

o le

arni

ng m

ater

ials

Quality Consultation + Training + Educating + TTTEnforcement & strictnessFreq

uent

pra

ctic

e

Condition Quality

People Quality

System Quality

CUSTOMER &COMMUNITY SATISFACTION

CUSTOMER &COMMUNITY SATISFACTION

CUSTOMER SATISFACTION CULTURECUSTOMER SATISFACTION CULTURE

CORE STRATEGYCORE STRATEGY

To educate & train to overcome weakness

To educate & train to overcome weakness

To increase frequency of monitoring‐enforcementTo increase frequency of monitoring‐enforcement

To educate & train to implement proper set up &

documentation

To educate & train to implement proper set up &

documentation

Delivery AttributesDelivery AttributesShop AttributesShop Attributes Sales Person Attributes

Sales Person Attributes

Maintenance Service Attributes

Maintenance Service Attributes

Yamaha Technical Academy Training

Yamaha Technical Academy Training

Salesmanship & Customer Care

Training

Salesmanship & Customer Care

Training

Meeting with dealer

(Consultancy)

Meeting with dealer

(Consultancy)

Observatory visit

Observatory visit

Mystery shopper survey

Mystery shopper survey

Upg

rade

& e

nhan

ce t

he

qual

ity

of t

rain

ing

sylla

bus,

ha

ndbo

ok, C

Ds

and

vide

o le

arni

ng m

ater

ials

Quality Consultation + Training + Educating + TTT

Upg

rade

& e

nhan

ce t

he

qual

ity

of t

rain

ing

sylla

bus,

ha

ndbo

ok, C

Ds

and

vide

o le

arni

ng m

ater

ials

Upg

rade

& e

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ce t

he

qual

ity

of t

rain

ing

sylla

bus,

ha

ndbo

ok, C

Ds

and

vide

o le

arni

ng m

ater

ials

Quality Consultation + Training + Educating + TTTQuality Consultation + Training + Educating + TTTEnforcement & strictnessFreq

uent

pra

ctic

e

Enforcement & strictnessFreq

uent

pra

ctic

e

Condition Quality

People Quality

System Quality

CUSTOMER &COMMUNITY SATISFACTION

CUSTOMER &COMMUNITY SATISFACTION

CUSTOMER SATISFACTION CULTURECUSTOMER SATISFACTION CULTURE

CORE STRATEGYCORE STRATEGY

Conduct weighted CSI

Conduct weighted CSI

Conflict of interest and mission between

manufacturer and dealers

Figure 7.1: Risk Management & Contingency Planning, 2009

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74

CHAPTER 8: CONCLUSIONS

Intensive concentration on identified weaknesses and reconstruction of marketing

services strategies for 2009 has been emphasised by enforcing service quality in all

aspects of service encounter, which consists of providing bundles of effective

solutions, redefining strategic roles for all dealers, ensure that the strategic action plan

is implemented in stages to sustain customer retention, stepping up the corporate

brand equity and reduce the service gaps between CSI and national average and lastly,

to ensure the achievement of Customer Satisfaction Number One policy.

8.1 OVERALL SUMMARY

The moving trend line of indices from 2005-2008 were unparallel and have

contributed to an unhealthy sign on the overall image of Yamaha Motor exclusive

retails in Malaysia. However, the predicted strategic issues that were contributing to

the inconsistency and fluctuating of CSI over the years might be due to the ever

changing customer mindset of being self-service and diversification. Moreover,

dealers’ commitment to enhancing customers’ confidence tends to affect the overall

service performance, which will reflect customer loyalty and switching behaviour in

the future. The Customer Loyalty Index for 2008 was improving because of the

effectiveness of strategies extended from 2007 while the CSI seemed unfavourable

due to an evolution of customer expectations from time to time, which has made

service performance towards customer loyalty ever challenging.

Currently, the Customer Loyalty index increased 3.7 percent to 89.7 percent in 2008

but Customer Satisfaction Index decreased 0.9 percent to 83.9 percent in 2008.

Performance scores of each parameter (attribute) reached more than 80 percent and

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75

were considered as very high scores for Yamaha Motor exclusive retails. The total

identification of weaknesses is twenty three (23) that require improvement and eleven

(11) factors have been prioritized as they are deemed critical. These are derived from

sales person attributes followed by delivery attributes, maintenance service attributes

and shop attributes.

The weakest factors of the attributes will be rectified by using three (3) CCS core

strategies (Condition Quality, People Quality and System Quality). The tactical

approaches for each core strategy comprise the following:

• To increase frequency of monitoring and enforcement (improve condition

quality).

• To educate and train to overcome weakness (improve people quality).

• To educate and train to implement proper set up and documentation (improve

system quality).

There are 11 stores or 42 percent of the total Yamaha Motor exclusive retails in

Malaysia that have their respective indices below the national average and have been

classified as the main focus for critical improvement.

8.2 SCHEDULING AND MILESTONE RECOMMENDATION

The execution plan has been divided into three stages, which consist of pre-event for

the first stage followed by the second stage (during event) and the third stage (post-

event). For the first four month pre-event stage, the major executions will be related to

planning and management procedures. While for the event stage, a five month period

is allocated for programme execution, which relates to training programmes such as

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76

Salesmanship and Customer Care Training and Yamaha Technical Academy

Training. Lastly, a three month period is allocated for the post-event stage by the end

of the year where the executions will consist of spot checks, observatory visits,

mystery shopper survey and Customer Satisfaction Index survey.

The time-series projection of Customer Satisfaction Index and Customer Loyalty

Index for the following years – 2009 and 2010 – will rely very much on the

implementation of the action plan in order to rectify the weaknesses discovered from

the analysis as stated previously. The customer expectancy level is always

inconsistent and unable to be fully met. Thus, a tight monitoring for gradual

increment of both indices is essential to avoid drastic surges or decreases in terms of

value changes. If there is a drastic surge for a certain year, there is a high possibility

of a drastic drop in the future.

In reality, a high CSI cannot last long as people will perceive that service performance

of any business will always fluctuate because of the changes in customer expectations

from time to time and, therefore, the trend lines of indices are targeted at 85.0 percent

(2009) and 86 percent (2010) for CSI and 91.0 percent (2009) and 92.0 percent (2010)

for Customer Loyalty Index, which are deemed manageable and purposive.

Improvement in CSI is vital in order to produce good sales volume which could

dedicate cost effective in term of cost benefit for each unit of sales in future.

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