Wolf Motors Success Story

John Wolf, president of Wolf Motors, had just returned to his office after visiting the company’s newly acquired automotive dealership. It was the fourth Wolf Motors’ dealership in a network that served a metropolitan area of 400,000 people. Beyond the metropolitan area, but within a 45-minute drive, were another 500,000 people. Each of the dealerships in the network marketed a different make of automobile and historically had operated autonomously. Wolf was particularly excited about this new dealership because it was the first “auto supermarket” in the network. Auto supermarkets differ from traditional auto dealerships in that they sold multiple makes of automobiles at the same location. The new dealership sold a full line of Chevrolets, Nissans, and Volkswagens. Starting 15 years ago with the purchase of a bankrupt Dodge dealership, Wolf Motors had grown steadily in size and in reputation. Wolf attributed this success to three highly interdependent factors. The first was volume. By maintaining a high volume of sales and turning over inventory rapidly, economies of scale could be achieved, which reduced costs and provided customers with a large selection. The second factor was a marketing approach called the “hassle-free buying experience.” Listed on each automobile was the “one price–lowest price.” Customers came in, browsed, and compared prices without being approached by pushy salespeople. If they had questions or were ready to buy, a walk to a customer service desk produced a knowledgeable salesperson to assist them. Finally, and Wolf thought perhaps most important, was the after-sale service. Wolf Motors had established a solid reputation for servicing, diagnosing, and repairing vehicles correctly and in a timely manner—the first time. High-quality service after the sale depended on three essential components. First was the presence of a highly qualified, well-trained staff of service technicians. Second was the use of the latest tools and technologies to