I chose Jaguar Land Rover (JLR) because of its dynamic and innovative approach in the automotive market. They have reinvented their brand in the new millennium. Their new engineering processes and the input received from its customers and clients in the industry have made a huge impact on their overall productivity.  

Relationship between cost allocation and customer profitability

Different customers or groups of customers differ in their profitability. Hence, using ABC, profitability can be analysed customer group-wise, since ABC creates cost pool for activities. Customers use some activities but not all, and different groups of customers have different ‘Activity profiles’. Hence analysis of relative profitability based on customer category and related decision making is called customer profitability analysis.

Customer retention basically depends upon following factors:

• Set the customer expectations

• Be the expert of your industry

• Build trust through relationship

• Implement anticipatory service

• Make use of automation

Potential for sales growth

During the year, the Company recorded sales of 141,846 vehicles (including Jaguar Land Rover) in the domestic market; a decline of 38.1%. The domestic market share was 5.8% as compared to 9.0% last year.

The Company introduced a host of new products including the E-max range of CNG vehicles, Vista tech, the refreshed and improved Sumo Gold. Nano Awesome Campaign was launched during the year, along with the launch of Nano Twist with electronic power steering, thereby continuing to take the Nano Brand closer to the youth. During the Delhi Auto Expo 2014, Tata Motors Flagship products, the Bolt hatchback and the Zest Sedan were unveiled, too much appreciation. The Company's Horizonext strategy was unveiled, showcasing the direction of Design, Performance & Connectivity that are going to be the brand pillars going ahead. The Expo also saw the Nexon Compact SUV concept and the connectivity concept for the Company's future cars being unveiled.

The drive to improve sales experience for customer with a focus on décor and ambience in showrooms across country continues. The dealership network is also being augmented to cater to the demand for Bolt and Zest launch.

Long-run customer profitability

Customers can be viewed as an “asset” to the firm. This analogy implies that customers can have “future value” in the form of “likely” margins to be earned and thus they take the form of intangible assets. Profitability is a function of customer satisfaction and that customer satisfaction is a function of current actual quality and price as well as prior period expectations. Thus, future revenues from current customers stem from the linkage between customer satisfaction and profitability.

Increases in overall demand from having well-known customers

Despite tough market conditions, it was a good year for Jaguar Land Rover (JLR), which registered record volumes and revenues on the back of the launches of some of the most exciting and awaited new products. Volumes for the year were nearly 375,000 units with revenues reaching an all-time high of £15.8 billion. JLR is a healthy and vibrant Company, strongly positioned across key global markets for future growth. Technical innovation and engineering excellence have stood JLR in good stead for sustained, profitable growth and the Company plans to launch eight new or refreshed products this year.

The ability to learn from customers

The key to company growth is to create more value for customers. Focus on what is important to your customers. Make sure to blueprint of their needs. Customer retention is largely dependent upon a company’s ability to empower their customers. The challenge for businesses is figuring out how to capitalize on this need, and provide quality support services so that their customers can educate themselves in the shortest possible time.