Module 2

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Tutorial 2

• Module 2

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Session overview

• Sullivans Auto World Case
• Review questions 2, 3, 5 10

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Sullivans Auto World

• Presenter
• Dawn Birch

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Session overview

• Background
• Major issues
• Situation analysis
• Alternative strategies
• Recommendations
• Implementation
• Conclusion

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Company

• car dealership
• new and used cars
• sales and service departments
• medium-sized
• family-owned
• sales volume - 1100 cars p.a.

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Current situation

• owner (Walt) has died suddenly
• family not interested in the business
• daughter (Carol - health care manager) is
  temporary GM
• 2 weeks more leave
• concerned about performance of SAW
• wondering what to do

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Nature of the service

• .. processing
• . actions to peoples ..
• .. level of contact
• people enter the service department to discuss
  service requirements
• . level of customisation
• Service employees exercise some
• . service
• but no formal
• and demand

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Case Issues

• Poor performance of the .. ..
• service are below average and are
  declining
• survey reveals that customers overall level of
  .. with service is ..
• high staff
• sales staff reluctant to .. customers to
  the .. department

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Case issues cont.

• Deteriorating .. situation
• deterioration over last 18 months
• running at loss for last 6 months
• behind in mortgage payments
• accounts payable risen sharply in last 6 months
• service revenues and new car sales ..
• service revenues below industry average
• profit margin being squeezed by expenses

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Other case issues???
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Major issue

• Poor performance of the service department
• financial position will if service
  increase
• .. rate will improve if after sales
  improves

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Overview of situation analysis

• Internal analysis
• strengths
• weaknesses
• financial analysis
• market analysis
• External analysis
• opportunities
• threats
• Services marketing analysis

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Strengths

• human resources
• skilled and competent staff
• above average rating of the staff
  performance
• .. experience, knowledge, expertise

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Strengths cont..

• physical resources
• modern and well maintained ..
• attractive ..
• favourable .

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Strengths cont...

• current market position
• well-known dealership
• customer satisfaction with NEW cars is ..
  .

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Other strengths????
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Weaknesses

• Human resources
• inappropriate .. of service staff
• service manager lacks . skills
• problems with service ..
• high . of service staff
• loss of key person

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Weaknesses cont..

• Financial situation
• revenues are
• deteriorating (insurance and some funds)

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Weaknesses cont..

• Physical resources
• poor of service department
• poor . area
• back stage is too ..
• service facility is .. . from highway

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Weaknesses cont.

• Service processes and operations
• service procedures are not . oriented
• recording and bookkeeping
• understaffed during . periods
• business is operating as .. .. .
• inconvenient service operating ..

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Other weaknesses????
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Market analysis

• Customer perceptions of service department
• high .
• poor ..
• poor ..
• Service is difficult to ..
• high in . qualities
• purchase is poor

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Customer survey

• 30 day survey
• rated .. .. on new cars
• 90 of respondents were informed re ..
• however, less that 33 . to service
  department

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Survey cont..

• 9 month survey (new car buyers)
• similar to .. average on vehicle ratings
• in lowest 25 of Ford dealerships on ..
  .. with service
• intend to use .. service suppliers
• maintenance gt 50
• minor repairs gt 50
• major repairs gt 30
• . to purchase again from SAW than from
  other Ford dealers

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Service department rated poorly on.

• .. of writing up orders
• . of . work
• convenience of service ..
• .. of service department
• .. of service department
• .. of service personnel
• of customer problems
• .. of work performed

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Average ratings on

• length of .. to complete work
• availability of
• .. of work

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Summary - resource analysis

• Resource analysis

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Opportunities

• . current markets
• car repair and maintenance
• extend hours of operation
• provide a drop off/pick up service
• auctions
• Develop . market
• body shop

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Opportunities cont..

• Change of .
• new staff initiatives
• introduce a service ..
• marketing/training programs
• Use advanced ..
• computerisation
• improve service .
• reduce level of customer ..

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Other opportunities?????
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Opportunity matrix

• Opportunity matrix

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Threats

• Economy
• high .. rates
• downturn in regional economy
• poor industry
• Competition
• survey revealed that customers are likely to
  .

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Other threats?????
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Threat matrix

• Threat matrix

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Analysis of the services marketing system

• back stage is too ..
• need to manage the .
• front stage is shabby
• need to manage the service ..
• the service writing process
• manage the ..
• establish an effective service .. ..

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The service marketing system for SAW
Service orders
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Flowchart of SAW

• Analyse each step
• Does each step represent for the customer
• Can service be improved at any step?
• Can any steps be .. . ?
• Where are the bottle necks and points?
• Flowchart

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Summary of situation analysis

• Major strengths
• technical skills
• Major weaknesses
• service delivery system
• Opportunities
• improve service quality through internal
  marketing/training and using advanced technology

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Break time 5 minutes
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Alternative strategies

• . . at distress price
• .. service department and then sell in 1-2
  years
• . .. to improve service department

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Other strategies????
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Evaluation criteria

• customer satisfaction
• service quality
• customer loyalty
• employee satisfaction
• family
• revenues
• cost

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Evaluate alternatives using a scoring model

• Scoring model

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Recommended strategy

• Appoint Larry as manager and improve the service
  department
• if necessary . to assist Larry to
  improve the service delivery system
• develop a service department
• client records and service writing
• .. staff in service skills
• hours of operation
• the service department

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Implementation plan

• What needs to be done?
• What resources are required?
• Who is responsible?
• By when?
• How will success be measured?
• Implementation plan

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Conclusion

• How can the service quality and the financial
  performance of SAW be improved while minimising
  stress on the family?
• Need to improve the service delivery system
• focus on people, processes, and the physical
  evidence

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Review question 2

• What are the four types of service processing
• Refer table 2.1, p. 4
• Processes differ on what?

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Review question 3

• What are the two main components?

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Review question 5

• What is flowcharting?
• What are the benefits and uses of flowcharting?

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Review question 10

• What are five ways that consumers evaluation
  processes differ between services and goods?