rangsit university

Reverse Logistics Expertise

Account Management

Performance Measurement

Customer Training

Service Excellence

Date : May 19th 2016Venue : Rangsit University, Bangkok,

Thailand

The feasibility study to extend the partnership between Intel and tablet manufacturers to their product return services and gain opportunities to rejuvenate the Intel Inside campaign in Malaysia market.

• Problems• Research Questions& Objectives• Discussions and Conclusions• Recommendations

Agenda

Problems

• The reality of the “more than Moore Law”.• The pull-effect of Intel Inside is fading in the tablet& smartphone segments.• Tablet& smartphone segments which is respectively dominated by Apple: 37% and

Qualcomm: 54%, in which Intel only captured 1% and 4-5%. Furthermore, MCG looks very vulnerable financially.

• Contra revenue, $ 20 more expensive to integrate Bay Trail chip.• Tablet’s growth shows signs of slowing down (Gartner, IDC: Pass on, Phablet)

Why Apple is successful?

1. The BIG number: All time high record quarter (Q4’14) with the revenue of $74.6 billion which exceeded analysts’ estimation of

$67.7 billion, with the $18billion record breaking profits. 74.5 million iPhone sold vs the estimation of 67 million.

2. Success in wining customer satisfaction. National Customer Satisfaction Index (NCSI) score of 84 in the electrical retail sector in 4th quarter 2013, and

maintains a strong lead, rising 1% from a year ago. Though dropped 3 percent to 84 in the American Customer Satisfaction Index (ACSI) in the household appliances

and electronics sector in 2014, but still managed to maintain a sizable lead over its major competitors, which it has held since 2004.

3. According to Michael Porter who is the Professor of the Institute for Strategy and Competitiveness, Harvard Business School: It is impossible to achieve a sustainable model by adopting differentiation and cost leadership strategies at the same time. Heracleous (2013), who is the Professor of Strategy & International Business of Warwick Business School, explained that Apple Inc. win in the so called “Quantum Strategy”: An unconventional strategy which combines differentiation through innovation and high levels of efficiency.

More than 20 million tons of e-waste are produced globally every year.

20,000,000 tons of e-waste

8,000,000,000 laptops

Research Questions

1. What affects customer’s buying behavior for tablet?2. How do Product Return services affect customer loyalty? 3. How to reposition/ redesign Product Returns to help Intel and the OEM partners to win?4. How to motivate consumer to ask for a tablet powered by Intel chip?

Research Objectives

1. Evaluate the factors that affect customer satisfaction on tablet product, Product Returns services and customer loyalty.

2. Evaluate and understand customer’s perception of product returns services.3. Analyze how to gain customer value by repositioning/ redesigning Product Returns

services which will help Intel and the OEM partners to achieve differentiation focus.4. Analyze how to drive customer’s demand of the tablet powered by Intel chip.

Demographics of 464 validated responses

Items Demographic Factors Categories Frequencies Percentage to entire sample size

1 GenderMale 222 47.80%

Female 242 52.20%

2 Ethnicity

Malay 171 36.90%

Chinese 261 56.30%

Indian 32 6.90%

Others 0 0.00%

3 Age

Less than 18 129 27.80%

18-30 249 53.70%

31-45 64 13.80%

Above 45 22 4.70%

4 CategoryStudent 124 26.70%

Non- Student 340 73.30%

5 Tablet OwnershipYes 273 58.80%

No 191 41.20%

Tablet Ownership Breakdown Categories Frequencies Percentage to entire sample size Percentage to Tablet Owner Population

5.1 Use DurationLess than 2 years 115 24.80% 42.10%

More than 2 years 158 34.10% 57.90%

5.2

Product Returns Encounter

Experience

Yes 70 15.10% 25.60%

No 203 43.80% 74.40%

Discussion and Conclusion

Product Returns Condition IV tested DV tested Hypotheses Result Derived

Standard

Product Returns Satisfaction

(PRS) and Customer Satisfaction

(CS)

nil H1A

There is a significant positive relationship

between Product Returns Satisfaction (PRS) and

Customer Satisfaction (CS).

Supported

Standard Customer Satisfaction (CS) Customer Loyalty (CL) H2A


between Customer Satisfaction (CS) and

Customer Loyalty (CL).

Supported

Standard



(CS)

Customer Loyalty (CL) H3A

There is significant positive relationship between

Product Returns Satisfaction (PRS) and Customer

Loyalty (CL) with Customer Satisfaction (CS) as

the mediating factor.

Rejected as the mediator

is identified as PRS

instead of CS. Hence H3A

is modified to H3M.

Standard



(CS)

Customer Loyalty (CL) H3AM

There is significant positive relationship between

Customer Satisfaction (CS) and Customer Loyalty

(CL) with Product Returns Satisfaction (PRS) as

the mediating factor.

Modified from H3A as the

identified mediator is

PRS.

Extended Customer Value (CVE) nil H4A

CVE: Customer Value (Extended Product Returns)

is created by extending the Product Returns

Services.

Supported

Extended

CVE: Customer Value (Extended

Product Returns) and CSE:

Customer Satisfaction (Extended

Product Returns).

nil H5A


between CVE: Customer Value (Extended

Product Returns) and CSE: Customer Satisfaction

(Extended Product Returns).

Rejected

ExtendedCVE: Customer Value (Extended

Product Returns)

CLE: Customer Loyalty

(Extended Product

Returns)

H6A


between CVE: Customer Value (Extended

Product Returns) and CLE: Customer Loyalty

(Extended Product Returns).

Supported

Summary of Hypotheses Testing

Conceptual Framework

Reconstructed FrameworkCL= 0.441+ 0.841PRS+ 0.034CSCLE= 1.604+ 0.154PRS+ 0.222CSE+ 0.133CVECLE= 1.666+ 0.154PRS+ 0.224CSE+ 0.134CVE -0.041PRExp

3 major components were introduced into the extended product returns service which are:

The extension of manufacturer’s standard warranty from one year to two years. A guaranteed trade-in value (not less than 30%) which will be realized on the

next purchase as a discount when the existing tablet is returned. 5-10% premium added into the selling price

Conclusion

1. Product Returns should not be deemed as a cost of doing business and will bring direct positive impact to Intel’s business if being implemented strategically by extending to B2C context.

2. With the expectation to withdraw the contra revenue on the new Broxton chip as well as the smaller die size of the SoFIA’s in 2015/16, Intel should consider reallocating the resources into end customer context to regain the pull-effect and bring back the best day of the Intel-Inside campaign in the 90’s.

3. At the beginning stage of the implementation, cost would be critical. Therefore more focus should be aimed at the higher end customer who can comfortably afford tablet cost >USD400, so that the chances of additional premium (5-10%) to affect customer value is lower. Once the business model is sustainable with more participants, manufacturer’s cost on Product Returns extension will be significant lower.

Recommendations

Subsidy some% on the trade-in program e.g., part of the 30% rebate on the new Dell 5.5 tablet.

Subsidy part of the 5-10% additional premium end user got to pay to participate in the extended product returns.

Extend product return service to Dell’s end customer to facilitate the trade-in program, e.g., making deals with our channel partners.

Engage our channel partner to sell the refurbished Dell tablet to emerging market Intel to absorb some of the refurnished Dell tablets to run CSR program.

Source: https://delltradetosave.com/my/

Dell Printer Trade-In Program

Source: https://delltradetosave.com/my/trade-to-save/terms-conditions

Tag Heuer Connected Selling at USD1500

Upgrade to a special edition Carrera Series (np: $5,000.)

Adding USD1500

As the end consumer, what is expected from us?

Remove the thought of advantage taking by surrendering your faulty product only when it is caused by our own carelessness/ mishandling.

Take good care of our existing consumer electric products as it will affect warranty/ returns for upgrade.

Paradigm shift to accept 2nd hand/ refurbished product as a good product.

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