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Read the following caselet and answer the questions that follow:
Due to increased competition, Electro Automobiles, the Indian subsidiary of Robert Automobile Company (RAC) reported lower sales and profits. RAC expects its new model Limo, developed especially for value conscious customers of India and China, would revive its fortunes. In order to prevent customers from buying competing products, RAC announced the launch of Limo six months ahead of schedule. Unrest in its Indian supplier resulted in delayed delivery of essential components to its main plant. Hence, Limo was launched on schedule only in China. Within a short span, Limo captured 30% of the Chinese market , which was 200% higher than expectation. Indian customers were becoming increasingly restless because they couldn't get a Limo in India. Electro’s dealers were worried, customers might switch to other cars.
The indian subsidiary is concerned that the delay in launching the product will give undue advantage to some competitor. The organization was considering the following strategies to keep customers engaged with the company:
1. Ask the dealers to encourage their prospective customers to seek similar products from the competition, rather than wait for Limo’s launch.
2. Suggest the dealers to accept booking for Limo, announcing the launch within six months of booking, while in reality plan to keep postponing launch indefinitely.
3. Run full page advertisements in the papers, every month, to keep the interest in the model from ebbing, with no mention of the launch date.
4. Import parts from outside India, and launch the product, at a 30% premium, planning a relaunch a few years later of the indianized version.
5. Go against its worldwide policy of non-interference in supplier plants, and announce a hefty bonus to the employees of the supplier with a hope to temporarily bring the plant to life.
6. Promise the supplier plant (that has some unrest) a higher margin share of about 5% compared to what was shared earlier, with an eye to stem the unrest.
Which of the following combination of responses above, will most likely keep the prospective customers engaged with the company and not jump to some competitor’s product?
Strategy 1 will lead to the customers moving to the competition. The objective is to keep the customers engaged with the company. Hence, this can be dismissed.
Strategy 2 is unethical as it tells the dealers to be dishonest to their customers.
Strategy 3 is a valid one as it will keep the awareness of the "limo" among the public.
Strategy 4 is also a valid one as it will allow the company to start shipping the cars quickly and the company can retain their customers.
Strategy 5 is also a valid one as the company needs the manufacturing plants to make the cars after procuring the parts.
Strategy 6 can be dismissed as it might lead to other manufacturing plants creating unrest for higher pay.
Thus, the valid strategies are 3, 4 and 5.
Hence, the answer is option E.
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