m Ford Motor Company

± Dealer Sales and Service

m Presented by,
Swetha
Sivaram
Vinothkumar
Vigendiran
m iy the late 1980s Ford began to consider making
changes in its sales and service process.
m Two developments forced Ford to reconsider these
processes.
m First, Ford found through various surveys that
customers had very clear complaints about the way
they were treated by car dealers.
m Second, with more rapid technology transfer among
the automakers, product differentiation was declining.
m Therefore, the channels of distribution provided one of
the final potential points of differentiation between
automakers.
m Differences in distribution & services become
more of a factor
m Sales ± glamorous side
› Customer Opinions
› Cause of dissatisfaction
m Dealers
› Éew vehicle sale
› Customer expectations ± too high
› Service profitability constraints
m Customer
› Customer use of each of the channels as well as
satisfaction levels
› Fords customer is the dealer and the dealers customer is
the car buying public
m Ford Company Dealerships
› Two significant industry trends emerged
à Éo. of dealerships had declined
à Avg size of dealerships increased

› ndependently owned franchise

à Dealers as partners and influence them through
incentives & participation in decision making
m Present situation
› Automobile industry was changing, putting pressure on
the distribution system
› Ford¶s future competitive position rested largely on
coming up with changes«
m Strength m Weakness
› Profitable financial services › Tarnished brand image
division › weakening of automotive
operations

Oppurtunity Threat

m The way forward plan m ncreasing competition.

m Opportunities in ndia and m Rising new material prices
China m Low capital spending
Customers made 3 major complaints about car
and truck purchase process:
m Having to go through bargaining or ³horse trading"
to establish a price.
m Sales people who were unresponsive to
customers stated needs
m Salespeople who used high-pressure sales tactis

eg:talking about a deal before a customer

decided to buy the car.
m iiggest problem faced by a ford dealer was the
slow introduction of new models
m Dealers profits declined due to
increase in inventory/carrying cost
advertising cost
dealership cost
high cost of technology equipment
m Shortage of skilled technicians and service stalls
m Mechanic turnover ± high
Customers had 4 major complaints about the
dealer service:
m Dealer service was impersonal and uncaring.
m Dealer service was incompetent
m Dealer service was not a good value for the price.
m Dealer service was out of touch with customers
time constraints.
m Low quality service done by dealers.
m nability to explain problems directly to mechanic

m Service charge was expensive

m Having to take a car to a dealer more than once for

the same problem
m Customers were dissatisfied with the hours of
operation - length of time for service was long.
~ Most dealership were open early in the morning but
stayed open only until 5 or 6 pm
~ Majority were closed on weekend
~ Service by different dealers was not possible
m Company's desire was to maximize short term
profits for shareholders
dealer profits was ignored.
m Shortages in dealer orders could force temporary
plant closures and result in losses to the
manufacturer
m Changes to be made to improve distribution
m Financial problems-losing money each year
m QCP program for dealers affected many dealers.
m Éo proper touch with customers