Sullivan Auto

Carol Sullivan-Diaz, a young health care manager, found herself responsible for running her family-owned car dealership after her father, Walter Sullivan's death. Walter Sullivan had purchased a small Ford dealership in 1983 and this had grown into Sullivan Ford Auto World (Auto World).

Like many other car dealerships, Auto World operated both sales and service departments, often referred to in the trade as “front-end” and “back-end”, respectively. Auto World was ranked at the lower-end of medium-sized dealerships. Auto World sold about 1,100 cars per year and its total annual revenues were approximately $29.5 million, from both sales and services.

An automobile, or any product for that matter, is tangible, which means the customer can see and feel the product before making a purchase. An automobile’s attributes (such as safety features, seating comfort, dashboard controls and exterior appearance) may compel a customer to purchase. Automobile services, on the other hand, are intangible, which make it challenging to promote and sell.

The sales and service departments at Auto World did go about their operations differently. Let us compare them using the 7 P’s of service marketing (Exhibit A), and identify areas of improvement, in the process.

To market an automobile, a product, Auto World exhibited a wide array of vehicles and sold them based on its customers’ needs. This adaptation of marketing the servicing of vehicles, due to its intangibility, involves describing the services offered at the time a customer was buying a vehicle. This was something that was not taking place at Auto World.

It is likely that Auto World evaluated the market value of a vehicle, especially with respect to its competitors, to set the price of an automobile. This can be applied to servicing vehicles; however, the price will have a direct impact on the customer as the cost of a service will be a significant indicator of quality.

Auto World’s location, i.e., its placement, is significant when considering the needs of potential customers. Auto World was located “at the corner of Wilson Avenue and Route 78” which seems to suggest that it is a prime location and is easily accessible. Similar promotion of the services department’s placement, in terms of easy accessibility, should be considered and implemented for marketing purposes.

Auto World promoted its sales department with “radio and television commercials” that laid emphasis on “promotions, discounts and deals.” Similarly, a campaign to promote the service department, with discounts and freebies, could be institutionalized. Such offers will help potential consumers to evaluate the options for servicing their vehicles.

Physical environment is vital when the service provider is trying to communicate the services available. In case of sales, Auto World has a “handsome, high-ceilinged showroom” and “geraniums graced the

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