Differentiation, Branding, Talent Management

(Names of companies, employees, brands, and other facts & figures are fictitiously created with an objective to bring out certain key concepts in Marketing)

Author: Anshu Sharma, MBA (ISB Hyderabad), M.Tech. (IIT Kharagpur), B.Tech. (IIT Kharagpur) 

                         Topic:               Differentiation, Branding, Talent Management 

                         Characters:       Marco, India CEO of Calic, a luxury car manufacturer

                                                  Mathew , Head of Sales 

                                                  Simon, Head of New Products 

                                                  Sundar, Head of Marketing Peter, Head Dealer Development 

                                                  Shalini, Head of Training & Development 

HIGHLIGHTS 

Once a leader in the Indian luxury car market, Calic was seeing its market share plummet since last 3 years. 

After much analysis, the team identified ‘Talent Management’ at the dealerships as the key lever to arrest this steady decline. 

The Bad News delivered 

“We are losing market share every year. I simply can’t get my head around why?” said an inconsolable Marco, pacing swiftly up and down his swanky corner office in a high rise located in the prime of Mumbai. Marco was the India CEO of Calic, one of world’s leading luxury car manufacturer. Just this morning he received the consolidated sales numbers for 2017, and was aghast to see Calic relegated to the 3rd position in the Indian luxury car market. 

The Three Musketeers 

Indian luxury car market was dominated by three main players, together holding around 85% of the market. Calic, entered the Indian market 10 years ago in 2007 and within 5 years became the number one luxury car brand in India. Marco, as the Head of Sales then was instrumental in taking Calic to such heights. In the year 2012, he was deservingly rewarded with the top position as Calic’s India CEO in 2012. Under his leadership, Calic continued to scale newer heights and remained India’s number one luxury car brand for 3 years (2012, 2013, and 2014). However, things started heading south 2015 onwards when Calic lost its leadership position and now in 2017 has been further relegated to number three. 

Pinning the Blame? 

As soon as Marco saw the numbers, he called up his top management for a meeting in order to try and get his head around this constant decline in Calic’s fortune and to devise a turnaround strategy for the company. All were supposed to come prepared with their ideas. 

Tension was palpable in the room with Marco hurriedly pacing around digging his hands deep into his pockets. 

“Mathew, how do you read this? What can we do to stop this slide?” said Marco, suddenly passing the baton to Mathew, the Head of Sales for Calic. 

Mathew himself had been nothing short of a rockstar at Calic. Growing under Marco’s aegis, Mathew had flourished over the last 8 years at Calic and become one of the trusted advisor for Marco. However, in spite of boasting of a very fluent and extroverted personality, Mathew this time was surprisingly at a loss for words. 

After cursory glancing through his sales sheets, Mathew opined, “Marco, we did our best. Our lead generation was on point. However, I believe we can do better with our lead conversion rates. Our conversion rates have declined in excess of 20% over the last year. Customers have shown interest in our products, have even come to our showrooms, but we have not been able to convert those walk-ins into sales.” 

“Which means marketing efforts were as effective as they could be”, quipped Sundar, Head of Marketing. 

“And, it also means that there is no issue with the acceptance of our products. We even got the award for the best product of the year for our C8 model”, interrupted Simon, Head of Products. 

“Guys, guys, guys. Let me put this straight. This is not about pinning the blame on anyone” said Marco stopping Sundar and Simon in their tracks. 

“We are looking ahead. To find ways of turning this around for us. We are all a team working on this here. So let’s behave like one” sternly asserted Marco, with Sundar and Simon both nodding in concurrence. 

“Mathew, I want you to dig deeper into this conversion issue and give me a report of your findings on Monday. Let’s all meet then and take this forward.” said Marco pinning his hope entirely on Mathew to bail him out. 

Finding the Demon 

As has been the case in the recent past, it was again up to Mathew to justify the faith that Marco has imposed on him to take them out of this ditch. It was nothing new for Mathew, and he got to task like a fish to water. He just had a week to give something to Marco to chew on. 

“Guys you have 2 days, I need intel on each and every customer that we lost. I want your sales teams to speak to each and every customer indiv
idually and find out why they did not purchase a Calic. Please treat this as mission critical”, said Mathew as if he really meant business. His regional sales heads were all years and they quickly got to business. 

Two days went in a jiffy. The lost customer analysis was on Mathew’s desk. 

“48%! That is huge”, said Mathew looking at that portion of the pie-chart which said 48% of the customers did not buy a Calic not because they did not like the product, or the price, or the promotions which were being offered, but just because the sales executive that attended them did not generate the required trust. 

“It’s a talent issue” concluded Mathew in no time. 

Mathew immediately called Peter for a quick “war room” discussion. Peter was the head of dealer development, responsible for recruiting and development of Calic dealers, their channel partners. 

“Bring along Shalini” Mathew told Peter, as if he already had something in mind. 

Shalini was Head of Training & Development and reported to Peter, who in turn reported to Mathew. Talent Management for the dealers was Shalini’s job. 

Mathew was known to be a hard task master, and as expected Peter and Shalini rushed to their boss’s room nervously, especially since Training & Development jobs were typically the first to go when fortunes for a company dipped. 

“What is your assessment of the talent pool at our dealerships as compared to our closest competitors?” said Mathew taking no time in putting Peter and Shalini in a spot. 

Peter looked up to Shalini. 

“I think we are as good as others” replied Shalini. 

Before Mathew could pounce on the “I think” part, Peter interrupted, “Shalini can you tell Mathew about our competency levels, attrition levels and overall performance scorecard please” nudging Shalini to talk basis facts and figures. 

Shalini quickly opened her laptop and shared all the relevant metrics that Peter had asked for. Although, there were a lot of numbers, the following particularly stood out for Mathew: 

1. Attrition in dealer salesforce was on a rise at 28% as compared to a typical industry average of 15%- 18%. 

2. Average experience of the dealer salesforce was less than 2 years. A lot of experienced sales executives had quit their jobs at the Calic dealerships to join competition. 

The Possible Solution?The 40 odd Calic dealers spread across India had designed their own organization structure, roles and responsibilities and other talent practices. Calic did not intervene much, except for providing their employees with the mandated product & process trainings. To change the way these powerful dealers operate would not be easy for Calic. However Mathew did have a plan in mind as he headed to Marco’s room exuding confidence, filled with self-pride and a can-do attitude. 

What Mathew had in mind was largely based around the following levers: 

1. Standardization of Organization Design. 

2. Standardization of roles, job description, KPIs and KRAs. 

3. Standardization of Performance Management process & career path definition. 

4. Identification of reasons for attrition and solving for the same. 

The larger question was, whether it was feasible to standardize at such a large scale and whether it would achieve the desired results for Calic. 

Questions: 

1. What are the different analyses that Calic is doing to figure out reasons for their consistent dip in market share? 

2. Do you agree with Mathew’s inference that Talent Management is the key issue here? Are there any other possible root causes for this dip? 

3. What measures will you suggest Marco and team to possibly arrest this decline? 

4. What are the organizational dynamics that you observe in the case? 

5. How will Calic management manage to convince the dealers to invest time & effort on talent management? 

DISCLAIMER: The views, opinions and content on this blog are solely those of the authors. ISME does not take responsibility of content which are plagiarized or not quoted.