Sullivan Ford Case

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BA 235 Services Marketing
Group 7: Case Solution ~ Sullivan Ford Auto World
Feb. 2012

21

Case Background
Walter Sullivan the founder of Sullivan Ford Auto World died and his eldest daughter
Carol Sullivan-Diaz, a health care manager by profession took over the business and found out that the family business is in financial trouble based on current financial performance and market outlook. In addition, CSAT results from car buyers show that the company has problems with their service quality.





















Sullivan Ford Auto World Facts:
Average sales of 1,100 cars per year
Posted Revenues:
$26.6 M – car sales (from last year’s $30.5 M)
$ 2.8 M – service & parts sales (from last year’s $ 3.6 M) Margins on car sales are low (5.5% of sales revenue & 25% for service).
Auto World’s financial situation had been deteriorating for the past 18 months and running at a loss for the past 6 months.
Past 12 months’ financials show that gross sales figures are not enough to cover fixed expenses
Margins had been squeezed by promotions and other marketing
efforts.
Market:
Due to rising fuel prices, industry and in-house forecasts for future sales were discouraging.
Trend is shifting towards vehicle service transactions.
30-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
Group 7: Case Solution ~ Sullivan Ford Auto World
Feb. 2012


21

Major Concerns:
• 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. A vast display of cars and trucks fronts the showroom. It also has banners saying “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...
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