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Sullivan Ford Auto World Report - Discussing Marketing in the Service Industry

Extracts from this document...

Introduction

"Sullivan Ford Auto World" Report Timothy De La Salle 04500272 Business and Service's Marketing 12th December 2006 Contents Front Cover Page 1 Contents Page 2 Introduction Page 3 Question 1 Page 3 Question 2 Page 7 Question 3 Page 9 References Page 13 Appendices Page 14 Introduction This report will be structured in a systematic and logical format resulting in a concise response to the questions highlighted in the appendix. The main body of the report is broken into three sections representing the three questions whilst appendices cited can be found at the end of the report. It is firstly important to define, very simply, what is meant by "Service" in this context. Kotler et al (1999) defined it as "any activity or benefit that one party can offer to another which is essentially intangible and does not result in the ownership of anything". When appropriate I shall develop this description with other academic's ideas and theories. Differences in Marketing Building on the initial definition given in the introduction, Palmer (2001) describes a service as "The production of an essentially intangible benefit, either in its own right or as a significant element of a tangible product". This expansion recognises that certain products and services are actually a combination of both tangible and intangible elements, certainly the case in car buying and servicing. The degree of service orientation in each area will have direct effect upon their marketing needs. To distinguish the degree of this service orientation, a "Goods and Services Continuum" is supplied in the appendices (Figure 1.1) and has been adapted from Shoshack (1977) to the automobile industry for clarity. Figures 1.2 (Car Buying) and 1.3 (Car Servicing), adapted from Palmer's (2001) development of Sasser et al (1978) and Gronroos (1984), represents the analysis of the service offer. It identifies the differences between the two purchasing areas with respects to "Core and Secondary Services". ...read more.

Middle

and relates them to the two purchasing areas at Sullivan's. Applying some of the issues in Figure 6 to the "Gap Model will identify certain weaknesses in the operation. Figure 7 presents this Gap Model with a description and in the following paragraphs each gap is considered in numerical order. In the car sales department of Sullivan's it's noted that when a customer wishing to purchase a used would "sometimes be persuaded to buy a new one". Whilst this could be viewed as a beneficial sales technique it should also be considered as a misunderstanding of what customers want. This could detrimentally affect the likelihood of the customer purchasing a vehicle and lose a potential sale if they feel pressured in any way. Within the service department a gap exists in the understanding of customer expectations with regards to scheduling of service hours. Customers are "required to bring cars in for servicing before 8:30am" and "pick up their cars by 6:00pm on the day the work was completed". This inflexibility is something customers are not likely to appreciate or expect. The case identifies little gap between management perception and service quality specification in the car sales department at Sullivan's. The management here assumedly communicate certain quality specifications through advertising and the case does mention "used vehicles were carefully serviced, with parts replaced as needed....dents and blemishes were removed". A gap does however exist in the services department with respect to the "car fixed correctly" issue in the reliability dimension in Figure 6, as the rating, evident from customer survey results, was "close to average". This shows that the service quality specification, in comparison to other Ford dealers, is below average which isn't the target the management wish to reach. Another gap (gap 3) exists concerning the servicing of vehicles in relation to the reliability and assurance dimension of service quality. The case states "It was often little things, such as water leaks and wiring problems, that were the most difficult to diagnose and correct, and it might be necessary for the customer to return two or three times before such a problem was resolved". ...read more.

Conclusion

On deciding the most important all round factors, covering a variety of customers needs, Sullivan's could more efficiently target their marketing. For example, my preferences would encourage Sullivan's to advertise their range of vehicles in the car sales department and promote their service department as well balanced where cost and quality are concerned. Stage 3 After evaluation of the effectiveness of the implemented schemes through customer surveys and financial reports, I recommend Sullivan's responds appropriately. If for example a greater demand exists in the service department, they can use "their sufficient capacity to handle more repair work" by employing an extra mechanic. If customer retention has improved they may wish also to reduce their advertising budget and allow for word of mouth advertising to replace it. In terms of marketing Sullivan's as a whole, the framework emphasises the importance of interlinking the two departments with the marketing mix, especially encouraging customers who buy cars to use the service department for their maintenance needs. There are many influences to consider when evaluating the options available to Sullivan-Diaz. I would recommend a turn-around before a sale is made as I feel it is a feasible option and would significantly increase the businesses value before a sale. This however, involves a high degree of marketing and with a qualification in economics this may not be feasible under the management of Sullivan-Diaz. The approach I would suggest involves employing Larry Winters a "leading sales rep" who "showed strong managerial capabilities" as the general manager. The recommendation is also based on the fact Sullivan-Diaz only has two weeks remaining of her leave from her main employment, and whilst she is willing to take more time out I feel management would better be left to Mr.Fiskell. It should also be considered that "neither she, (Sullivan-Diaz) nor her other family members were interested in making a career of running the dealership". After my proposed turnaround, for this reason, I would recommend a sale of the business. ...read more.

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