Sullivan Ford Case free essay sample

Due to rising fuel prices, industry and in-house forecasts for future sales were discouraging. Trend is shifting towards vehicle service transactions. 0-day Purchasers CSAT Survey Results Auto world achieved better than average ratings 90% of customers said that Auto world informed them of what to do if they needed service Less than 33% of respondents said that they have been introduced to someone in the service department (which is a sales protocol) 90-day Purchasers CSAT Survey Results Overall satisfaction with Auto World Service Department was consistently low placing it in the bottom 25% of all Ford dealers More than 50% of respondents said they would rather use another Ford dealer for future service BA 235 Services Marketing Promptness of writing up orders †¢ Convenience of service hours †¢ Appearance of the service department †¢ Interpersonal variables such as attitude of personnel, politeness, understanding of customer problems and explanation of work performed Problem Statement Should Carol Sullivan-Diaz sell Sullivan Ford Auto World to prevent future losses or try to turn it around? If she chose the latter, what changes improvements should she implement to improve service quality in Auto World? Case Analysis Flower of Service Core Service: Car dealership Supplementary Service: Vehicle servicing Facilitating Elements †¢ Information Along Wilson Avenue, the Sullivan Ford Auto World rotating signage can be easily seen. We will write a custom essay sample on Sullivan Ford Case or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page A vast display of cars and trucks fronts the showroom. It also has banners saying â€Å"Let’s Make A Deal. The service facility is at the back and is not visibly seen along the highway. †¢ Order-taking BA 235 Services Marketing Group 7: Case Solution ~ Sullivan Ford Auto World Feb. 2012 21 The front end of the dealership employs salespeople who are tasked to transact with possible customers. The dealership offers brand new and preowned vehicles. Some customers who are initially looking at buying brand new vehicles sometimes realize that they cannot afford one and just settles for refurbished cars. Similarly, there are customers looking at pre-owned cars and are sometimes convinced to buy brand new cars. At the back end, service writers schedule appointments for repairs and maintenance. For repairs, estimates are given to the client after the vehicle is diagnosed by a mechanic. Billing For car sales, it is not specified in the case but this usually differs per customer transaction. For vehicle servicing, customers are usually billed after the service is done. Payment For car sales, it is not specified in the case but this usually differs per customer transaction. It can be paid with outright cash, in-house loan or thru an auto loan from a bank. Sullivan Ford Auto World also allows trading in of the purchaser’s existing vehicle for the new one. For vehicle servicing, customers pay after the service is done. Enhancing Elements †¢ Consultation At the front end, car salespersons are there to assist and answer queries of possible customers that are looking for brand new or pre-owned vehicles. Refurbished vehicles are also of good quality given the expertise of Auto World mechanics and service personnel. Back–end: Service Dep’t BA 235 Services Marketing Group 7: Case Solution ~ Sullivan Ford Auto World Feb. 2012 21 The Service Department offers servicing for cars that broke-down and/or need parts replacement (Possession Processing). PLACE TIME Sullivan Ford Auto World has a very good location in a suburban highway intersection, in an area of the city where housing developments are constructed. This location gives Auto world visibility and accessibility to two major markets: the motorists and the residents. Service department is located at the back of the sales area which gives opportunity for salespeople to refer the company’s service area to buyers. Sales operation hours are assumed to take place on normal office hours, same goes with the servicing of the vehicle. It can be inconvenient for customers to follow the window period of checking in vehicles for repair before 8:30AM and pick-up by 6:00PM when service is completed. In addition, the service writing process is not efficient and has lot of bottlenecks and is not convenient for customers. †¢ PRICE No detail on pricing was mentioned in the case but it was implied that Sullivan Ford Auto World has low margins for selling brand new vehicles. Walter Sullivan was even aggressive on giving discounts and deals to attract high volume of buyers. The company’s pricing strategy is to offer lower the price to stimulate demand or attract buyers. On the contrary, aggressive discounts and low prices may convey poor quality of service to customers. †¢ PROMOTION BA 235 Services Marketing Group 7: Case Solution ~ Sullivan Ford Auto World Feb. 2012 21 The company invests heavily on promotions and giving deals to induce buyers. No promos were mentioned in the case regarding its service center. Promotions and generous deals helped the company maintain desired sales volume in the past but records show that revenues have declined in the past few years and forecasts indicate that this decline may continue because of high interest rates. There are minimal promotion activities for the service department. It seems that management has overlooked the shift of sales contribution from car sales to service. They should also launch promotional activities for the service department to help drive service sales up – since the service department is not operating at capacity. †¢ PROCESS We have identified processes that Carol Sullivan-Diaz should look into: Writing of Service Orders Process for service writing is out of date and is inconvenient to customers. Bottlenecks and disturbances are not properly managed. Customers relay the problems on their vehicles to the service writers. This gives high probability of incorrect diagnostics, solutions offered and estimates when customers have low technical know-how. This may be the reason why rework is a common occurrence which frustrates customers even more. Sales Process Salespeople do not adhere to the sales process standard procedure. Some sales people are hesitant in referring the Auto World service center BA 235 Services Marketing Group 7: Case Solution ~ Sullivan Ford Auto World Feb. 2012 21 because they know customers may get turned off and risk losing the sale. Referral of the service center is part of the sales protocol and should be firmly implemented.Case literature explicitly described discrepancy of the physical appearance of the front-end or the sales area (showroom and office) and the back-end or the service center area (office for service writing service bays). The front-end is modern and well maintained while the back-end area is the exact opposite. The condition of the back-end area is the main reason why sales people do not refer Auto-World’s service center despite the high skill level that its employees have. Car Sales or the Front–end team is composed of the Sales Manager, 7 Sales People, the Office Manager the Secretary. The Service Department is composed of the Service Manager, Parts Supervisor, 9 Mechanics and 2 service writers. Survey results show that customers are not happy with the quality of service provided by the Service Department. Lowlights of the CSAT survey results are: promptness of writing up orders; convenience of service hours; physical appearance of the service department personnel; their politeness and way of understanding customer problems and communicating work performed. Service writers are demotivated and have high absenteeism and turnover rate due to high level of stress of the job. †¢ PRODUCTIVITY BA 235 Services Marketing Group 7: Case Solution ~ Sullivan Ford Auto World Feb. 2012 21 The service department is not operating at full capacity as stated in the case. In addition, the service personnel do a lot of rework due to incorrect diagnosis. On the other hand, service writers are fully utilized due to the long and manual process of writing service but customers are not happy with how their service orders are handled. Productivity efficiency of the personnel is low because of the factors described above. SWOT ANALYSIS †¢ – Strengths Strong brand equity, The Sullivan Ford Auto World is already an established car dealership company in their area as the late Walt Sullivan was a well-known salesman and entrepreneur, appearing in TV and radio commercials as well as community affairs. – The carrying brand Ford is also a well-established quality car brand. – Its location on the intersection of Wilson Ave and Route 78 suggests a prime location for a car dealership. The nice facade and showroom will also attract a lot of possible customers. †¢ – Weakness The back end office is not well maintained and turns off customers. Work orders take too long to prepare. Service writers are too stressed BA 235 Services Marketing Group 7: Case Solution ~ Sullivan Ford Auto World Feb. 2012 21 and most likely experience emotional battery. This results to high employee turnover – Front end office employees tend to not refer the company’s vehicle servicing department. This results to lost revenues for the back end office – Poor customer service survey results for the back end office – Poor management of customer complaints †¢ – Opportunity Carol Sullivan has a lot of experience in health service management. Health services are very high contact and her expertise will be a huge help in turning around the quality of service of Sullivan Ford Auto World †¢ – Threats Bill Froelich, owner of several dealerships, expressed interest in buying out the company in order to achieve economies of scale. – Poor result of customer survey of the service department showed that clients are more likely to go to another Ford dealer or some other place for their car repair and maintenance needs – There is no established formal channel for customer complaints as exemplified by the shouting customer towards the end of the case.