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Sullivan Ford Auto World
Carol Sullivan took over Sullivan Ford Auto World after her father's sudden death, facing declining sales and low satisfaction in the service department. The document discusses the challenges in marketing car services compared to products, highlighting issues like intangibility and variability in consumer perceptions. Recommendations for improving the dealership include hiring experienced management, revamping the service department, and developing customer-oriented strategies.
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Sullivan Ford Auto World
- 1. HARSHAD Roll No: KENRICKRoll No: INDIAN EDUCATION SOCIETY (MUMBAI - INDIA)
- 2. Impact of Music Inservice settings, music can have a powerful effect on perceptions and behaviors, even if played at barely audible levels Bitner’s Servicescape Model
- 3. Sullivan Ford AutoWorld ▁ ▂ ▄ ▅ ▆ ▇ █ A KEN-SHAD PRODUCTION █ ▇ ▆ ▅ ▄ ▂ ▁
- 4. Characters to thisstory Walter Sullivan (Father of 3 daughters& owner of Sullivan Ford Auto World Carol Sullivan Eldest daughter, Mba grad, Assistant director Of marketing @ Metropolitan Health Plan Gail & Joanne Youngest Daughtes, Studying in college but Worked part time as service writers Bill Froelich Rival Dealership Larry Winters Auto Worlds Sales Manager
- 5. Walter Sullivan purchasesa small ford dealership in 1983
- 6. He decided toname it Sullivans Auto World
- 7. Throughout the yearsthe dealership built their reputation as been one of the best in the city
- 8. In 1999 Mr.Sullivan, decided to move locations to a more populated area which was a lot closer to a major intersection
- 9. He then proceededto rename his business as Sullivan Ford Auto World.
- 10. He offered bothsales & service departments for brand new & used cars
- 11. Walter Sullivan wasinvolved with the community affairs. He was always known for his great enthusiasm for sales
- 12. Mr Sullivan wasalso the father of 3 young women. Carol, Gail & Joanne
- 13. Sadly 4 weeksago, Mr Sullivan passed away due to a sudden heart attack at the age of 56
- 14. The bank decidedto put Carol Sullvian in charge of the business
- 15. For the past18 months the Auto worlds situation had been detiorating
- 16. New car saleshad been detiorating due to the rising interest rates. Margins has also been squeezed to by promotions and other efforts to push new car sales
- 17. Reflecting the risingfuel prices, the industry forecast for future sales were discouraging as well for service revenue they were below average for the dealership of this size
- 18. Revenues $26.6 millionfrom new and used cars $2.9 million from service & parts Current Year Previous Year $30.5 million from new and used cars $3.6 million from service and parts
- 19. Carol is leftwith 2 options 1) either a prepare a business for an early sale at what would amount for a distress price or 2) Or take a year or two to turnaround fiancially
- 20. Comparison of theShowroom Vs Service Centre
- 21. The story behindthe service centre Walter Sullivan had never been interested in the parts and service business Customers always seem to be miserable back there due to long waiting times and queries not being answered Building was old and greasy but the equipment itself was modern and well maintained Still using legacy system of handwriting and store files in cabinets vs computerizing the service Not enough of service writers. Always quitting due to stress and lack of appreciation from the owner and customers Overall level of satisfaction with service at Auto world was consistently low, placing it in the bottom of 25 percent of all ford dealerships Ambience as shown in the previous slide was very demotivating for service staff and the front – end people typically were embarrassed to show the back – end
- 22. 1. How doesmarketing cars differ from marketing services for those same vehicles? Marketing a service for cars is usually harder than marketing the same cars and the consumer behavior towards purchasing a car service differs from a consumer behavior towards purchasing car. Products have search qualities representing the characteristics that are easily reviewed before a purchase occurs. This is a challenge for marketers to communicate the benefits of a car service which is harder than a product (car) to evaluate. Price too is an important factor in a marketing mix and the pricing strategy of a car service differs from the pricing strategy of a car. The characteristics of services address a clear framework from which we can differentiate between the marketing of cars and the marketing service of those same cars. These characteristics are intangibility, inseparability, variability, and perishability.
- 24. Intangibility A caras a product is tangible, which means the customer can touch and see the product before deciding to make a purchase unlike car services which are intangible. So service marketing should focus on the satisfaction and value a consumer can get in return to his purchase. Service marketing must tackle more the consumer perception of the value of the service due to this intangibility. Sometimes it is necessary to attribute tangible measures for the service which highlights the Physical evidence in service marketing representing a new “P” added to the 4 traditional product marketing mix “P”s (product, promotion, price, and place).
- 25. Inseparability Unlike products (goods),services can’t be separated from the service provider. The production and consumption of services is simultaneous contrary to products (goods) where it can be produced and stored then on a later stage purchased and consumed. This has its implications on marketing a car service and marketing a car. This highlights two other “P”s (processes and people) in service marketing that are added to the four product marketing “P”s. In the case of a car service, the technicians (people) perform the different service tasks (conditioning of steering and suspension, oil change, etc.) in an efficient way (process) to ensure delivery of the qualified service. In return, the customers pay a price for the added value by the different things that form the service such as the skills of the technicians, the use of specialized equipment or tools, service time and much more. Marketers of a car service should consider these issues.
- 26. VariabilityHeterogeneity Non- standardization: Products arehomogenous compared to the nature of the services which are heterogeneous. Ford cars of the same type are almost identical. However, the car service provided by auto dealers might not be the same, even the service might be different in the same car service center and with the same technicians to two different customers.
- 27. Perishability: Service perishes.It differs from a product which can be owned and stored for later use. Ownership changes to a buyer when a car is sold, but there is no transfer of ownership of a service. Moreover, a service cannot be returned or resold. As soon as it is provided to a customer, it is completely consumed and cannot be delivered to another customer. For example an oil change service can’t be returned or even stored. Car “B” owner can’t utilize the conditioning service for the suspension provided to car “A” who is owned by a different customer and car “A” owner can’t return this service to the service center or resell it. A car service represents an experience that can start from an online service appointment and ends up in the quality of the car service provided by skilled workers, along the reception of customers, the facility (garage), time of service, etc. This experience helps building reputation. A marketer should consider the characteristics of services in order to successfully market a service in an altered approach from marketing products. Also people, process, convenience and physical evidence are integral elements of service marketing.
- 28. 2. Compare andcontrast the sales and service departments at Auto World. Sales Department Service Department Considered as Front-End Considered as Back-End Extensive marketing and advertising Generally no robust marketing and advertising for the service department (low level promotions , e.g. campaign for free filter change if the customer requests a change oil service for certain Sales department Environment (well- designed attractive showroom ) Service departments known sometimes as the garage are less in and facility shape than sales departments. Customer satisfaction is easily attained (purchase of the car) Customer satisfaction is harder to attain (purchase of a service) Customers walk in Customers make appointment to service their cars Employees of sales department must possess excellent communication skills Employees of the service department must possess higher technical knowledge
- 29. Front End Thefront end department is the one who face the customer to sell Ford’s vehicle. They have to sell a car towards the customer. The front end department seems easier to get customer rather than the back end department which is very struggle to win customer’s heart. There is a gap in hospitality section between front end department and back end department. In the front end department it is a high ceilinged showroom where latest models of cars, polished to a high sheen, displayed to attract prospective buyer. In the Front end department, Sullivan Auto World not only sell a brand new Ford vehicles but also buy a well-maintained used vehicle in the auction and then sell it again. In the front end department, Sullivan Auto World employed a sales manager, seven salespeople, and an office manager.
- 30. Back End TheBack End department is department which operated the services system. Sullivan Auto World employed with a service manager, a parts supervisors, nine mechanics, and two service writer. In the article, the service writer’s jobs are scheduling appointment for repairmen and maintenance, writingup each work order, calling the car owner/customer with repair estimates, and assisting the car owners when they return to the dealer to pick up the cars and pay for the work that had be done.
- 31. Flow chart ofthe servicing of a car that requires repair or maintenance
- 32. Front Stage Back Stage Schedulefor car reiparing or maintainence Service writer writes up each work order Sound of tone and voice Work Order Car Service Repair or Maintainence Quality of work performed Service bill presentation Bill – Details of car service or maintaince Service Bill Payment Retrieve Car/Depart Employee Line of interaction Contact Person(Visible actions) Contact person (Invisible actions) Accept appointment, confirm date, time, cost of car, repair Discuss fees and work necessarcy Sound of tone and voice Work Order Verify satisfaction Deal w/ issues or concerns with bill Log work order under customer profile Return credit card(if applicable) and receipt Return car, thank customer, for business and answer any questions Retreive Car Line of Visibilty Transact with cashier Line of Internal Transaction Support Processes Maintain Support Sytem Work Order Preparation Work Order Maintainence/ Record Keeping Maintain Billing system Validate Credit Card Maintain Billing system
- 33. OTSU – Opportunityto Screw Up Long waiting times (due to parts not being available) Incorrect diagnosis by the engineer/technician Wrong estimate prepared Rude behaviour of the service writers Damage to the car Rude behaviour of the technicians Unable to communicate to customers properly
- 34. 3. From aconsumer perspective, what useful parallels do you see between running an automobile sales and service dealership and running health care services? In the health sector, the quality of the service must be perfected since it targets humans. Health care is delivered by practitioners in medicine, nursing, pharmacy and other care providers to humans who seek ultimate satisfaction when it comes to their health. Also remarkable satisfaction is requested by customers who seek car service. Services address customer’s experience that consists of different elements such as the quality of the service provided by employees whether health practitioners (health sector) or skilled workers (auto industry), the reception of customers and dealing with customer complaints, the facility (health center or auto service center), time of service, etc. Both service providers must enhance this experience by improving its corresponding different elements. Furthermore building trust and tight relationship is essential in both sectors. This ensures business sustainability where existing customers are not just willing to purchase the services again but to even recommend the service provider. Both service providers need to maintain strong healthy customer relationships.
- 35. To put intoperspective Health Care • New Baby • Treating sick people • Customers generally prefer to have a regular doctor whom they trust • Regular checks up are usually a good idea Car Dealership • New Car • Fixing broken cars • Customers generally prefer to have a regular service arage they trust • Preventive aintainence & cheks ups are a good idea
- 36. 4. What advicewould you give to Carol Sullivan- Diaz? I would advise Carol Sullivan to appoint Larry Winters as a new leader. As he can manage the changed system since he has a great track record in auto mobile sales industry. He was once a leading sales rep in Auto World. He has strong managerial capabilities and strong network in the industry. She could also hire both financial and service manager to hold the Fnancial assets and Service section. For more efective motive, she might as well train her sisters to be in the place so that the proits will still be within the company. Some other suggestions for her) Hire an experienced service management team She should get a business partner whom she can trust Revamp the service department Train the service staff Develop a customer oriented service strategy Make use of the technology for client records and service writing Expand the service delivery system Advertising and marketing tools and promotions should be e:ciently use