Ford Motor Company

Dealer Sales and Service

Services Marketing

Section A | Group 3
Ayeshni Dasgupta
Guneet Kaur
Raj Patel
Suraj Kumar Biswas
Yajurv Algoter
Overview
Case Context
 Overview
Changing Landscape:
Product Parity
Automotive products becoming more
complex and technology intensive due
to maturity in the sector
Dealership Structure
The number of dealership has declined &
average size of dealerships have increased
Technological Advancement
With this automobiles have become more
technically sophisticated with more computer
chip components
Introduction of QCP Program
In order to test levels of customer satisfaction
and show dealers where to improve-hero or a
bum relative to other dealers
Implications:
Change in customer Preference
Product quality is less of purchase motivation
discriminator and differences in distribution and
service have become more of a factor in purchasing
decision
New trend in dealer environment
Emergence of mega dealers- individuals who
hold numerous franchises of the same or
competing makes
Shift traffic of DIY to new car dealers
Do-it-yourselfers’ and service stations’ share
declined and new car dealers increased their
share in the car service market
More focus on customer satisfaction
QCP was intended not as a punitive measure but
was incorporated so that dealers pay attention to
customer complaints & focus on customer
satisfaction. However, dealers find it too casual and
closer to a public relation exercise
Issues
 Service Marketing Mix issues
● Impersonal and uncaring personnel
● Incompetent repairmen
People ● Unresponsive to customer needs- do not tailor offerings and employ high pressure
sales tactics
● Lack of skilled professionals to handle the increasing pressure

● Process of negotiating prices- Horse Trading

Process ● Commission based pay structure- promotes selfish behaviour
● Not able to offer a good value for price as compared to alternatives

● Building layout not structured to handle high traffic flow and optimize the waiting time
and reduce the inconvenience
Physical ● Dealer service operational timings do not match the customer requirements
Evidence ● Lack of enough service stalls at the dealership to cater to increased demand for
services (higher UIO)
 Feasibility Analysis
Current Scenario Proposed Scenario
Dealership Dealership Services Incl. Body

Sales & Services New Used Total Parts Service Total + Body

Sales 6,136 4,315 1,008 5,323 519 193 712 814

COGS 5,313 3,886 884 4,770 367 108 475 544

Gross Income 823 429 124 553 152 85 237 270

Selling Expenses 437 246 51 297 69 46 115 140

Fixed Expenses 245 81 50 131 35 50 85 114

Salaries 12 4 2 6 2 2 4 6

Operating Income 129 98 21 119 46 -13 33 10

Return on Sales 2.10 % 2.24 % 4.63 % 1.23 %

[ Operating Income / Sales ]
Service Gaps
 Service Gaps
Gap 1: Understanding Customer Needs & Expectations
-Sales: Customers wanted to buy cars at fixed prices; disliked bargaining, pressure to buy add-ons, against underhand tactics. Women felt
discriminated against. Dealers focussed on new car models, Ford document focus on aggressive selling.
-Services: Customers thought dealer services were expensive (flat rate for different types or repairs). Operational hours of dealerships not
conducive to schedules. Customers looked for alternatives.

Gap 2: Understanding Does Not Translate to Service Design

-Dealers knew servicing was important to customers, but viewed it as a necessary evil. Focus on sales, more glamorous.
-Customers want quality in servicing. Service design did not include direct access to mechanic to explain problem. Further, followed
fixed fee per repair, prioritizing quantity over quality.
-Customers from other dealerships required servicing, but turned away.

Gap 3: Service Design Does Not Translate to Service Delivery

-Ford designed 12 Commandments of Customer Service (6 Dos and 6 Donts), however not seen in action.
-Services designed with primary focus on customers, but customers treated “like a number.” Service was impersonal, uncaring and
provided no personalized attention.
-Overburdened staff increased customer wait times, minor repairs took too long - prompt service delivery a problem.

Gap 4: External Communication Mismatch

-Warranty and post-purchase servicing promises in advertisements and warranty documents not honoured with adequate expertise.

Gap 5: Difference between Expected Service and Perceived Service

-20/25 metrics in JD Power Customer Satisfaction Index below industry average, poor performance for 4 straight years.
 Problems in Servicing
1. Low service Quality 1. Lack of resources to meet customer needs
Dealerships as many sales as possible thus could not provide quality Even with huge inventories, dealerships still could not keep
services to maximum people as there was always a waiting every part to meet all of the customers needs

2. No personal touch 2. Impatience among customers

Customers had no communication with the Customers do not understand the time that
mechanic thus could not explain the problem goes in fixing their cars
clearly, leading to repeat servicing Customer’s Dealer’s
End End
3. Incompetent and uncaring 3. Outdated layouts
Often times the vehicle had to be taken back for The dealerships were not designed as other
the same problem. Dealers only concerned with modern ones to optimize time and costs
claiming fixed amount for repair during warranty
period

4. Not value for price 4. Compensation

People came only to claim warranty, cheaper options were available Most dealers are unable/unwilling to change their compensation
and the dealerships charged same rate for simple and complex structures
services

1. Dearth of skilled technicians Two major issues 2. Rise in UIOs

Leads to increase in cost of labour, and pile up of vehicles increased sales and no complementary rise in service
in the services department. in servicing stalls, has lead to more Units in Operation (UIO)
Recommendations
Services
 Recommendations (Services)
● Better communication with
customers, through
personalization.
● Helping them by giving a
suitable waiting
environment and
refreshment while getting
their car serviced.
● Dividing the timing of
service centers in two
shifts, one from evening till
late night so customers
have the ease of dropping
their vehicles off on their
own time.
● Having the mechanic
assigned to their car ask
them about their
requirements.
Lasting
relationship with
customers
● Compensation for ● For each compensation ● Helping dealers buy
● Linkage of the system
adopting Johnsons paid to the dealer during expensive diagnostic
for providing ‘hot’
model, in the form of warranty period repairs, equipment through
merchandise to
additional skills and a feedback signed by Ford financing and
specific dealers, not
observing if that
knowledge for customer stating that just on the basis of
indeed leads to a
technicians by Ford the required repair was their sales
decrease in service
representatives. carried out to his/her performance, but also
line crowding.
satisfaction to be to the overall
● Diminishing the pay gap
submitted. ● Further, provision of feedback received by
between sales and
● In case a score is low, a flexibility and a dealership (QCP
technicians will also
mandatory remark to be quicker delivery of program).
solve the dearth of
provided and if score is parts as required to
technicians.
consistently low, further avoid unnecessary
● Many view it as only a investigation to be inventory.
learning opportunity, carried out
but if paid well, they
Warranty repair
would stay. Helping dealers compensation
provide better
Feedback for
services
Compensation of services to ensure
Technicians satisfaction
revised
Recommendations
Distribution
 Recommendations (Distribution)
Benefits

Collaboration model--For Facility Development ● Reduce wait time

● Maximum interaction with the
01 Helping the dealers/service providers to design and build their Outlet conducive to
mechanics
the customer Requirement and delivery of the service
● Minimising the level of Interactions

Forecasting and Information Sharing ● Stop piling up the requests

● cope with fluctuations in demand
02 Predicting the demand and sharing the with data with the dealers would
● Mitigate Resource constraints
help them cope with seasonal or timely service requests
● Time analysis

Inventory Management ● Ensure Timely delivery of Spare parts

● Reduce the Inventory cost
03 Ensure all time availability of Spare parts
● Reduce Downtime and quick fix

Stimulating Service Effectiveness

Motivate Focusing on Return on Sales by
04 ● Mitigating Providers Myopia
1. Incentivising
● Prompting focus on Quality as well
2. Financial Projection
3. Focusing on Quality and Quantity
 Recommendations (Distribution)
Benefits

Customer Service and Support ● Faster Response Time

05 1. Finer Customer Segmentation
3. Customer Feedback
● Optimum & Reasonable Billing
2. Tailor made Solutions
● Prioritising Issues
4. Proactiveness--Pricing--Prioritising
● Determining the magnitude of Repair

Servicemen Management ● Faster response time

● Better allocation of resources
06 1. Quality Based Performance Standards 2. Training acc. to reqt.
● Better Resource pool
3. Optimum number & type (Specialists & Generalists)
4. Distinctive remittances for varied skill sets ● Motivation to focus on Quality

Sale Staff Management- Training ● Proper Time Management

1. Prioritising & responsiveness to Customers Requirement ● Increase the level of satisfaction among
07 2. Quoting Price 3. Treating all customers with the customers
dignity irrespective of gender, Financial status ● Justified Billing

Monetary Incentives
● Motivating the service providers to
1. Financial benefits for exceptional
08 focus on Service and not only on sales
performance delivered by Dealers & service
● Prompt building long term relationship
providers
between brand and end customer
2. Dealership programmes
 Recommendations (Distribution)
Benefits

Expand Support Network ● Better Outreach to customers

09 ● Expand the Service nodes via franchising for General Issues ● Enhanced visibility
● Penetration into new geographic locations ● Reduce workload on selected nodes

Online booking for planned services ● Low waiting time

● Better allocation of resources
10 ● A Robust online Request management & timely tracking of services
● Dynamic change of request
● Help Customers locating the best in class provider for the particular
services with minimum wait time ● Better Time Management
Thank You