Cummins is increasing its market share for CMI genuine parts by leveraging its engine-parts pricing policy. The strategy has focused on promoting the use of genuine parts through flexible product bundles, simplified prices and discounts, and easier ordering and delivery.
Cummins Product & Pricing Manager Marco Gouveia explains that customers have become more price-sensitive due to the current macro-economic climate. “The large Cummins engine population in the marketplace has attracted will-fit competitors chasing this aftermarket business. The challenge is compounded by global non-genuine and counterfeit parts.”
The aim of the new strategy is twofold: to obtain a market-based overview of aftermarket parts pricing for each engine category and product component, and to ensure logical and rational prices for customers that are easy to interpret and explain.
“This will ensure that our pricing is easier to manage and review, and for us to be able to respond to market conditions, forex variation and product lifecycle. The end result will be improved pricing reviews and controls,” Gouveia comments.
Apart from punting the benefits of genuine versus non-genuine components, the strategy is also aimed at promoting Cummins ReCon. A countrywide campaign entitled ‘The Redefining Tour’ has promoted the major benefits of the new strategy for customers.
“The tour has allowed us to connect with our customers and deliver our programme directly to them. It has also afforded us the opportunity to receive their feedback first-hand,” Cummins EBU Parts Leader Mornay Annandale comments. Customers can increase their savings when bundling qualifying parts and repair kits for overhaul, thereby receiving additional discounts. Midrange, HD Legacy and ISX parts are all included.
“We have seen an increase in HMLD (Heavy Medium and Light Duty) business,” Gouveia confirms. Year-on-year sales have grown by 15% (17% in MidRange and 14% growth in Heavy Duty), on the back of strong sales in the automotive segment through ISX dealers.
Annandale highlights that the initial response from customers has been positive, as evidenced by the sales surge through the DBU outlets. “Subsequent follow-up visits conducted with customers have all been received positively.” Gouveia concludes that this positive outcome bodes well for rolling out the pricing strategy to other Cummins territories in Africa.
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