Brief Introduction
As a leading multinational consumer electronics company, PCL stepped into Chinese market with a remarkable income. However, since 2008 PCL taskforces found out control measures were not being carried out by stall and after sales service centres which cause 37% of the returned TVs. LCD faced fierce competition from domestic brands. In order to maintain good relationships with chain retailers, the manufacturers and salespeople usually accept unreasonable returns to secure prominent display locations. Besides, breach of the duty and faked inspection records would be another main reason caused the NFF return rate. Although, PCL taskforce came up with a series of actions, enormous pressure to meet sales targets and little incentive for responding to the ASC even increase the NFF return rate. Then, the general manager appointed the service director to lead the taskforce. The service director set up specific targets, like reduce NFF from 40% to 20%. Eventually, PCL finally managed to bring the issue of the high return rates under control. But the whole process management also revealed the enforcement issue in the organization.
Issues/Problems
1. High pressure on salespeople. In order to maintain the market share, the manufactures’ best option was to make concessions in their negotiations with chain stores. PCL cut its profit margins and accepted return of slow moving. In addition, PCL salespeople had to meet sales targets and required the support of dealers to achieve these targets, which made many salespeople hard to reject dealers’ require.
2. Lack of the trained staffs to educating customers about product performance. Before the TV set was sold, the initial setup usually used a high-definition signal which does not work very well for most consumers.
3. Fail to inspect the return sets carefully and faked the inspection records in after-sales