XAT 2012 — Decision Making Question 4
Answer the following question on the basis of the information given in the following case.
âââââââDue to increased competition, Ginger Automobiles, the Indian subsidiary of Pepper Automobile Company (PAC) reported lower sales and profits. PAC 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, PAC announced the launch of Limo six months before schedule. Due to unrest in its Indian supplier’s plant, deliveries of essential components for its main plant was hampered, and hence it decided to launch Limo in China only as per the original plan. Within a short span of time, Limo captured 30% market share in China, which was 200% higher than expected. Indian customers who had looked forward to purchasing Limo were becoming increasingly unhappy to the non-availability of Limo in India. Ginger’s dealers were worried about loss of business from the customers who might switch to other cars.
Unhappy customers will not only leave the company, but also spread negative publicity about the company. The best way, among the options below, to deal with customers is:
Answer & solution
- A
suggest to customers to wait.
suggest to customers to consider purchasing any of the other PAC’s models available in showrooms, with a substantial discount along with gifts.
- C
suggest to PAC to treat Indian and Chinese markets equally.
- D
promise the top management of PAC higher sales/profit from Indian market compared to Chinese market.
- E
suggest to the top management of PAC to manufacture essential components in either India or China.
Asking customers to wait will aggravate the problem. Options 3, 4 and 5 do not deal with the epicentre of the problem. Option B will not only help buy time, it will also calm the customers and in fact make them receptive to PAC because of the discounts and gifts
Hence, the correct answer is option 2.