3. CASE SUMMARY
The main focus of the case is
CDK Digital Marketing's
attempts to resolve a large
channel issue between General
Motors (GM) and its network of
car dealers. With GM being its
most important client, CDK
Digital, which is in charge of
managing websites and online
advertising for over 4,000 GM
dealers, is at a crossroads as it
looks to renew its contract. The
main issue is balancing GM's
need for an integrated, brand-
consistent online presence with
the dealer.
4. The historical development of CDK Digital is
covered, demonstrating its change from a
producer of websites to a comprehensive
digital marketing and advertising platform.
The lawsuit also discusses GM's earlier choice
to work with CDK Digital as its exclusive
supplier of digital marketing services, as well
as the difficulties and unhappiness some GM
dealers had with the programmed. The case
further examines the standards that General
Motors uses to assess potential vendor.
5. RELATIONSHIPS BETWEEN CDK
AND GM
1.CDK Digital's Importance to GM: CDK Digital
plays a crucial role in managing websites and online
advertising for over 4,000 GM automobile dealers,
making GM its most significant customer. Renewing
this contract is essential for CDK Digital.
2. Channel Conflict: There is a conflict between
GM's desire for a coordinated, consistent online
presence and its dealers' push for autonomy in
managing their websites.
3. Overview of the U.S. Automobile Retailing
Industry: The excerpt provides background
information on the structure of the U.S. automobile
retailing industry, emphasizing the autonomy of
dealerships compared to other franchise based
businesses.
6. 4.Marketing and Advertising Landscape: It discusses the
different tiers of advertising in the auto industry, ranging from
manufacturers (OEMs) to regional dealer groups and individual
dealers. It also mentions the significant advertising expenses
incurred by dealers.
5. Changing Consumer Behavior: Traditional models of
consumer behavior in the auto industry are evolving, with
consumers relying heavily on online research and independent
research websites to inform their buying decisions.
6. GM's Relationship with CDK Digital: GM's decision to
work with CDK Digital as a sole provider of digital marketing
services is explained, highlighting the challenges and
dissatisfaction faced by some GM dealers with the program.
7. MAIN ISSUES IN THE CASE
1.Conflicting Objectives: General Motors (GM) wants a
consistent online presence for all its dealers' websites to
maintain a unified brand message and gather network-
wide data.
2..Contract Renewal Uncertainty: CDK Digital's
contract for managing GM dealers' websites and online
advertising is up for renewal, and GM is a critical client.
3.Dealer Dissatisfaction: Some GM dealers are
dissatisfied with CDK Digital's services, citing issues like
rigid website templates, insufficient SEO support, and a
perception of inadequate representation of their unique
branding on their websites.
8. 4.Evolving Consumer Behavior: Car buyers are
increasingly relying on online research and
independent websites when making purchasing
decisions. GM and its dealers need to adapt to
this shift in consumer behavior to stay
competitive.
5.GM's Evaluation Criteria: GM has specific
criteria for evaluating potential suppliers for its
dealers' online marketing needs. These criteria
include managing complex advertising models,
advanced analytics capabilities, core website
functionality, and the ability to consult with
dealers to enhance their digital presence. CDK
Digital faces the challenge of meeting these
criteria while resolving channel conflicts.
9. THE PROBABLE SOLUTIONS OF, FACED BY MCCANN:
1.Customizable Templates: Create website templates that
balance GM brand homogeneity with dealer customization,
using flexible design concepts and defining design elements like
logos and content sections. Implement simple template
modification tools for dealers.
2. Enhanced SEO Services: The CDK Digital standard
package offers comprehensive SEO services to dealers,
including in-depth audits, analysis, and ongoing training to
enhance their websites' visibility in local and global search
results.
3. Dealer Empowerment: Create user-friendly content
management systems (CMS) for dealers, allowing real-time
website updates and modifications. Provide features like drag-
and-drop editors and a support portal for online presence
10. THE PROBABLE SOLUTIONS OF, FACED BY MCCANN:
4. Data Transparency: Develop a robust analytics
platform for real-time website performance data,
customizable dashboards, and automated reports to keep
stakeholders informed and track metrics and KPIs.
5. Consultative Services: CDK Digital plans to expand
its consulting team, conduct regular consultations, and
offer workshops and webinars to dealers to enhance
their digital marketing strategies.
6.Unified Digital Strategy: Collaborate with GM and
dealers to develop a comprehensive digital marketing
strategy, create joint campaigns, and implement shared
marketing calendars and content planning.
11. THE PROBABLE SOLUTIONS OF, FACED BY MCCANN:
7.Performance-Based Contracts: CDK Digital plans to
establish contractual arrangements linking compensation to
performance metrics and dealer goals, establishing clear
benchmarks, reward structures, and penalties for
underperformance.
8.Third-Party Mediation: An independent digital marketing
and dealer relations mediator can facilitate constructive
discussions between GM and dealers, ensuring all concerns are
heard and addressed objectively.
9.Trial Period: Create a structured trial period for GM dealers
to test proposed changes on digital marketing performance,
setting specific objectives and success criteria, and encouraging
dealer feedback.
12. ALIGNMENT BETWEEN MANUFACTURERS AND DEALERS IN THE AUTOMOTIVE INDUSTRY CAN CAUSE CHANNEL CONFLICT AND
HOW IT'S CONFLICT REFLECTS TOWARDS THE CDK AND DEALERS?
1.Pricing and Profit Margins: Conflict arises when OEMs
prioritize profit maximizing pricing, potentially hurting dealer
margins. CDK must adapt to frequent pricing changes,
affecting the consistency of digital marketing efforts. Dealers
might face financial strain, reducing their investment in
digital marketing.
2. Branding and Marketing Strategies: OEMs impose brand
and marketing guidelines on dealers, which may clash with
dealer autonomy. CDK must strike a balance between
adhering to OEM guidelines and accommodating dealer
preferences, impacting the customization of marketing
materials.
3. Inventory Management and Vehicle Allocation: Dealers'
demands for specific vehicle mixes may conflict with OEM
production priorities. CDK needs to adjust advertising efforts
13. ALIGNMENT BETWEEN MANUFACTURERS AND DEALERS IN THE AUTOMOTIVE INDUSTRY CAN CAUSE CHANNEL CONFLICT AND
HOW IT'S CONFLICT REFLECTS TOWARDS THE CDK AND DEALERS?
4.Digital Marketing Strategies: Differing views between OEMs
and dealers on digital marketing priorities, target audiences, and
channels can lead to delays in campaign execution for CDK.
Dealers may underutilize digital marketing potential.
5. Technology and Platform Preferences: OEMs and dealers may
prefer different technology partners and platforms. CDK may
have to integrate multiple systems, increasing complexity.
Dealers might not fully utilize provided digital marketing tools.
6. Data Sharing and Transparency: Dealers may seek more data
transparency from OEMs, impacting CDK's ability to provide
comprehensive analytics. This lack of insights can hinder dealers'
efforts to optimize digital marketing.
