The Big Wave of After Sales

The After Sales market represents Match Game one of the most promising effects of marijuana attracting sector, mainly due to the shift from a product-centric strategy - based on standard, low cost and high volume production - to a customer-centric strategy - based on complex mix of products and services devoted to enhance the experience of the customer in terms of satisfaction.

Critical success factors previously oriented on internal efficiency in using the production factors are nowadays focused on "external" aspects, such as differentiation, service level and customers loyalty.

The After Sales sector emerges today as a great business opportunity and companies start understand the criticality on having their fingers in the pie (or, at least, to try to).

A McKinsey report (2005) stands that "aftermarket is a $400 billion business....many of those in the Fortune 100 rely on the aftermarket for up to 40 percent of their profits", while the ASAP Research (2004) highlight that "in the EU automotive industry, After Sales spare parts generate a turnover of 44 billions with an operating profit of 20 to 25% in the law school loan consolidation After Sales service and parts account for more than 50 percent of the average dealer profit".

Finally, a recent study by London Economics concluded that the value of the European After Sales market (considering spare parts sells) amount to about 97 billions.

As an example of the importance of the After Sales, the 95% of the turnover for the en.wikipedia.org/wiki/Original_equipment_manufacturer" target="_blankOEM (Original Equipment Manufacturer) in the automotive comes from car sales and the remaining 5% comes from the spare part sales. On the other sides, the profits are equally distributed within final product and spare part sales.

Almost the same could be said for the OES (Original Equipment Spares), where the contribution to turnover given by the aftermarket sales account for 20% of the total, contributing for around 50% for the total profit.

The After Sales service is subject to several competitive pressures, arising from many sides such as, for example, technology, customers or regulations, which in turn impact on the processes, the infrastructures and the management policies.

More in detail, we can stand that:

• the business strategy contributes to guides the configuration of the distribution infrastructure of the After Sales services. For example, the strive to control the costs, the aim at gaining customer loyalty or the aim at realizing profits directly through the After Sales influence the offer of services, the distribution and commercial channels and the choices about prices.

• On the other side, normative aspects (which cannot generally be influenced or driven by a single company) such as rules and regulations, that constraint the decision Dynomutt Dog Wonder to the services. As an example, for all the durable consumer goods sold to physical persons, the European norm imposes a legal period of guarantee, that every producer (or importer) is bound to cover.

• The technologies used into the product could have an influence on the decisions related to the characteristics of the After Sales service organization and management. Clearly, simple product such as domestic blender is not comparable under the service requirements with medical equipment. The After Sales services associated to these products home refinancing therefore, of various nature and require different competences from who is intended to provide them.

• Market characteristics influence (of course!) the After Sales service.

• Finally, customers developed a strong perception of their role within the service chain, resulting in high requests for quality and satisfaction level.

Roberto Pinto
Researcher
Universit degli Studi di Bergamo
Department of Industrial Engineering
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