Michelin Fleet Solution Case

409 Words2 Pages
Laurie KEVORKIAN Michelin Fleet Solutions: From selling tires to selling kilometers One of problems that Michelin is encountering is the fact that the customers do not perceive the value of the offer, so it has to be clarified. The service should be the center of the offer and the product just a part of this. Thus, Michelin could undertake to lowering the fuel consumption of its customers and thus, tires would become a mean to achieve this goal. Therefore, the offer requires more customization as ISC stresses it. The offer should meet the individual needs of each segment. Secondly, the pricing is another problem. The current offer is a monthly fee offer and the fee are very difficult to estimate in the contracting period, so they are frequently under estimated and consequently the contracts are unprofitable and on the contrary many customers consider the price of the service was too high. To define an optimal pricing system, Michelin needs more data on its customer even this could take more time. It demands a large customer database and efficient information gathering and data processing. Consequently, short term profitability has to be sacrificed. In the other hand, the interest conflicts between employees of the traditional product sales force and those of the MFS have to be managed. The employee have to be educated to a new corporate service culture which is not just a add argument but a real value proposition. Therefore, cares must be provided to the customer relationship and the links with customers have to be strengthened and marketing operations have to be set to convince these customers of the position of Michelin as a service provider and not only as tires manufacturer. That’s why it could be preferable to create a separated MFS unit. This will also involve reconfiguration of systems, for instance the information system. The increase of the
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