Case Sullivan Ford Auto World – Marketing Services Essay Example

insufficient to cover the dealership’s fixed expenses and are below industry standard for contribution margins.

4. The trend in selling gross mix is now shifting from sales to service while sales margins for new cars were substantially lower than that of the used ones.

D. Service Operations

1. The service department has new machinery and ample space for additional customers.

2. The service writer position has a high turnover rate.

3. Miscommunication in the Services Department is evident.

4. Bad service environment and wrong customer interphase.

5. The service work orders are not computerized; most of the paperwork is handwritten.

6. Service manager is very gruff and argumentative when dealing with customers.

E. Customer Survey Results

1. Level of customer satisfaction is low - placed at bottom 25% of all Ford dealerships.

2. Worst ratings for service included convenience of work schedule, service hours, and appearance of the service department.

3. They scored average on promptness of service, availability of parts, and quality of work.

4. Poor ratings scored on politeness, understanding of problems, and explanation of work by the service department.

5. More than half of customers say they would use other Ford center for service repairs.

F. Options

• Sell the business to Bill at fair value of the net assets plus $250,000 in goodwill.
• Turn the company around in a year or two for a better selling price and higher goodwill.

Problem Statement

Should Carol Sullivan pursue turning around the financial performance of the business? If so, what business strategies must she implement to revive Sullivan Auto World?

Case Analysis

To be able to provide appropriate resolution to the problem, it is important to have an in-depth scan of the company’s internal and external environments.

World SWOT Matrix

Strengths

• Located in a busy urban
  

area

Weaknesses

• Weak financial position
• Contribution margins are below industry standards
• High employee turnover
• Bad service scape
• Lack of automization Bad customer interface in the Services Dept.
• Looked at the service dept as just a necessary adjunct of the business

Opportunities

• Selling gross mix is now shifting from sales to services
• Sales margins for used cars are higher than new ones
• Customer are fairly satisfied with promptness of service, availability of parts and quality of work

So Strategies

• Expand and improve the service repairs business
• Decrease inventory of new cars by trade-in and other promotions

Wo Strategies

• Motivate service dept. employees to improve performance and customer interphase
• Automate processes
• Renovate service area and make it visible to customers

Threats

• Industry sales forecasts is low – economic slowdown
• Customer dissatisfaction in politeness, understanding of problems, explanation of work in the service dept. , convenience of service hours and appearance of service dept.

St Strategies

• Be the preferred service repair provider instead of focusing only on car sales
• Use health care experience in improving the management and marketing of the services dept.

We then focus on providing steps to improve the business by saying that the company should reallocate efforts and resources to building up the Service Repairs Business given that customers are less likely to buy new cars and more likely to maintain their old cars. Then, kindly include some more recommendations as to how to improve customer interphase, processes and employee motivation) Suggestions for improving

the dealership’s services

A. The servicescape needs to be re-engineered to create the right impression for the employees and the customers.

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The servicescapes also needs to be managed to facilitate effective delivery of service processes. Improvements to servicescapes:

1. Put signage outside the facility to showcase the dealer’s car services.

2. Re-design the entrance to the service area such that customers can drive their car directly to the service area.

3. Refurbish and paint the service facility to make it tidy and grease-free. This could facilitate the behavior of the sales people to introduce the service department to their new customers.

4. Allocate a waiting area for customers i. e.

Air-conditioned room with chairs or sofas, magazine or television, wi-fi and other amenities to enhance the customer’s service experience.

5. Put signs and symbols that will convey the dealer’s image (e. g. high quality, safety first, do it right the first time), help the customers be guided through the service processes to manage their expectations (e. g. service process flow diagram)

B. Redesign the service process

1. Redesign the entrance to the service area such that customers can drive their car directly to the service area. This leads to customer convenience and improve the service experience.

2. Computerize the service work order process to increase efficiency and productivity in writing up orders and scheduling the work.

C. Complaint Handling and Service recovery

1. Provide service guarantees such that if a service delivery fails to meet standards, the customer will be entitled to a form of compensation, such as discount on labor cost, refund or credit. Effective service recovery can avoid switching customers and restore confidence in the service department.

2. Train the

employees, especially the service writers and front liners, to handle customer compliant by setting guidelines and procedures.