1. Why are 207 lexus US dealers willing to spend $750 million of their own money upgrading their stores?
2. How they pamper dealer?
- Limit the number of dealer
- Dealer gain the different
3. Why Lexus should pamper dealer? (p.262)
- Lexus concern about dealers and customers ( increase sale( both can gain benefit
1. High commission for our car
2. Pamper your dealers, and they will pamper your customers. 3. Positioning of this car is luxurious car
4. Mass marketing car cannot do it because the margin is not so large 3500/dealer, they cannot afford.
5. The high quality product( high price(high margin to dealer. Dealer happy to decorate their store and provide good service.
6. Loyalty from end user
7. Lexus manipulates its business to accommodate dealer.
8. Lexus keeps number of dealerships at minimum so dealer sell more vehicle per store than any brand (exempt Toyota)
9. Lexus has also never reduced a dealer margin on a slow-selling vehicle by lowering the listed price or raising the price dealers pay.
10. So the difference between the $35,900 sticker price of the RX 330 SUV and the $31,841 invoice price will remain the same, even if that hot vehicle turns cold.
11. Lexus lay itself at the dealers’ feet. Four or five times a year, they have meeting where they roll up their sleeves and ask “ What are we doing wrong”
12. Lexus sacrifice sales in the short term by keeping inventory low, but it gains sales over the long term because dealers won’t alienate customers by using the hard sell to push slow selling vehicle to ambivalent shoppers.
1. Explain about Alibaba’s mechanism.
2. Profitability(all fees and money)