A presentation by Kenrick Fernandes on Sullivan Ford Auto World. This case study was taking from the textbook of Christopher Lovelock (Latest Edition)

1. HARSHAD Roll No:
KENRICK Roll No:
INDIAN EDUCATION SOCIETY
(MUMBAI - INDIA)

2. Impact of Music
In service 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 Auto World
▁ ▂ ▄ ▅ ▆ ▇ █ A KEN-SHAD PRODUCTION █ ▇ ▆ ▅ ▄ ▂ ▁

4. Characters to this story
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 purchases a small ford dealership in 1983

6. He decided to name it Sullivans Auto World

7. Throughout the years the 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 proceeded to rename his business as Sullivan Ford Auto World.

10. He offered both sales & service departments for brand new & used cars

11. Walter Sullivan was involved with the community affairs. He was always known for his
great enthusiasm for sales

12. Mr Sullivan was also the father of 3 young women. Carol, Gail & Joanne

13. Sadly 4 weeks ago, Mr Sullivan passed away due to a sudden heart attack at the age
of 56

14. The bank decided to put Carol Sullvian in charge of the business

15. For the past 18 months the Auto worlds situation had been detiorating

16. New car sales had 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 rising fuel 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 million from 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 left with 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 the Showroom Vs Service Centre

21. The story behind the 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 does marketing 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 car as 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 are homogenous 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 and contrast 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
 The front 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
 The Back 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 of the servicing of a car that requires
repair or maintenance

32. Front Stage
Back Stage
Schedule for 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 – Opportunity to 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 a consumer 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 into perspective
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 advice would 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