The conventional automotive retail market is structured around franchise agreements between manufacturers and retailers that assign exclusive territories to retailers. This leads to excessive distances between retailers and high costs. The industry has evolved with virtual reality shopping experiences and a focus on improving the customer buying process. The automotive industry is currently in the mature phase of its life cycle, with intense competition and a focus on maintaining market share and profits. Carcierge offers a customer-centric experience with personalized concierge services to help customers find the right vehicle for their needs through their online presence.
The conventional automotive retail market is structured around franchise agreements between manufacturers and retailers that assign exclusive territories to retailers. This leads to excessive distances between retailers and high costs. The industry has evolved with virtual reality shopping experiences and a focus on improving the customer buying process. The automotive industry is currently in the mature phase of its life cycle, with intense competition and a focus on maintaining market share and profits. Carcierge offers a customer-centric experience with personalized concierge services to help customers find the right vehicle for their needs through their online presence.
The conventional automotive retail market is structured around franchise agreements between manufacturers and retailers that assign exclusive territories to retailers. This leads to excessive distances between retailers and high costs. The industry has evolved with virtual reality shopping experiences and a focus on improving the customer buying process. The automotive industry is currently in the mature phase of its life cycle, with intense competition and a focus on maintaining market share and profits. Carcierge offers a customer-centric experience with personalized concierge services to help customers find the right vehicle for their needs through their online presence.
The conventional automotive retail market is structured around franchise agreements between manufacturers and retailers that assign exclusive territories to retailers. This leads to excessive distances between retailers and high costs. The industry has evolved with virtual reality shopping experiences and a focus on improving the customer buying process. The automotive industry is currently in the mature phase of its life cycle, with intense competition and a focus on maintaining market share and profits. Carcierge offers a customer-centric experience with personalized concierge services to help customers find the right vehicle for their needs through their online presence.
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Q1)
1.How is the conventional automotive retail market structured, and how
has the car retail industry evolved in North America? a. conventional automotive market: -Restricted by regulations （It has been 118 years since the first formal automotive franchise agreement in the United States. In that first agreement, an automotive retailer was assigned an exclusive territory from the manufacturer, and, in return, the retailer provided “adequate service and suitable facilities.）
-Excessive distances between retailers 【due to legal restrictions】
（the second law established proximity distances between two retailers of the same brands.For example, in a metropolitan area in Pennsylvania, dealers representing the same brand had to be at least 10 miles (16 kilometres) apart, the distance measured by a straight line between the retailers’ centres. The resulting 10-mile radius was known as the “relevant market area.” ）
-high costs, poor service
-Traditional offline and cumbersome sales mode
Customers who visited the showroom would go through a sequence of steps in their efforts to purchase a new vehicle. These steps, often referred to as the road or steps to a sale, were the basis of new car selling in the United States.// the steps, which varied from a low of seven to as many as eleven, coached salespeople through the process of closing a deal (see Exhibit 1). Dealerships were required to have a licence that was granted by their respective state. Without this licence, a new vehicle could not be demonstrated, stocked, nor displayed, and salespersons could not engage in any activities to sell a vehicle.
b. car retail industry evolved in North America
virtual reality customer shopping experience using Oculus equipment.
Improve the customer buying experience（Studies that Miller consulted
indicated that car buyers spent as many as three to five months researching vehicles.So Miller, through salespeople trained to enhance the customer buying experience) 2.What marketing strategies and tactics have been used, and in which phase of its life cycle is the automotive industry today? a. marketing strategies: Customer-focused approach: CarCierge is focused on providing a customer- centric experience. The company strives to understand the needs and preferences of its customers and tailors its services to meet their needs. （Personalization）: CarCierge offers a personal concierge service to customers, helping them find the right car for their needs and preferences. This personalized approach sets CarCierge apart from traditional car dealerships.
Online presence: CarCierge has a strong online presence, allowing customers to
easily find and purchase vehicles through their website. The company also uses digital marketing tactics such as search engine optimization and social media advertising to drive traffic to their website.
b.Phase of its life cycle
The automotive industry is currently in the mature phase of its life cycle
The automotive industry is currently in the mature phase of its life cycle. In this phase, the industry has reached a high level of saturation and the market is relatively stable. The competition is intense, and companies are focusing on maintaining market share and profitability.
Q2) Conduct a 5C analysis for non-conventional automotive retailers, given
the information provided in this case. Yixin XIAO:
Q3) What can you infer about the market potential for Carcierge based on the postal code level sales data provided with the case?
Based on the postal code level sales data provided with the case, the total annual sales of all Audi vehicles sold are 470. From this, we can infer that the market potential for Carcierge is huge. According to the HD, the number of households with an income higher than US 148,000 plays an important role in sales of Carcierge.
Q4) Who are MMC’s main stakeholders, and what kind of value does Carcierge generate for each? How should Carcierge approach its diverse and conflicted stakeholder base? The Employees: Employees play an important role in selling cars. In lieu of vehicles on disp[lay, Carcierge featured 58-inch monitors for use by consumers and sales representatives, which reduce the pressure of employees. The Manufacturers: Carcierge engaged in a conventional sales model but it didn’t sell just a single brand, it paid on time and produce value for the manufacturers. The Customers: At Carcierge, the customers can get professional advice on any vehicle, rather than one single brand, they could also arrange for delivery of the vehicle at any location and choose to have the vehicle serviced at their preferred service center, which can make customers feel more comfortable and satisfied. The Government: The government is very important in the automotive retail industry. the operation and development of company should respect regulations. It should cooperate with manufacturers, governments, and customers…
Q5) Given the limitations around automobile retailing, what marketing
strategies can Miller use to drive more traffic to Carcierge? Aditya Jayarama Rajan Sridhar: STP analysis The ideal customer for Carcierge would be young adults between the ages of 30-40. There are many reasons why this target audience is optimal including income, online shopping, and the location of Carcierge itself, Income is the first factor affecting the target audience Carcierge should focus on as they are not legally allowed to sell the cars, but rather must lease. This works perfectly for a younger audience because they still wouldn't have the cash balance and possibly the steady income high enough to purchase new and expensive cars. Still being young, this customer base is more inclined on wanting to have nice cars, even when purchasing them outright is not an option, which leaves leasing wide open.
With the technological advances in the past twenty years, this age group is as adapted to doing things online as anybody. Whether it be shopping for clothes or working remotely during the recent Covid-19 outbreak, online has become a way of life. This relates to the business that Carcierge conducts because in studies conducted by Jerry Miller, owner of Carcierge, about car buyers and their relation to online research he found: "71 percent of them had researched prices: 68 percent had found the vehicle they believed they wanted to buy: 63 percent had established the value of the car they would be trading in; 46 percent had narrowed down which dealership they wanted to buy from" (p4). This is important because it proves how important online shopping and resources mean for car dealerships. In addition to doing all this research online before buying cars, young adults are also using online resources to purchase items without ever seeing the real thing in person, Online shopping for clothing has become a regular thing in today's society, and for people between the ages of 30-40, these customers would be the perfect age to be adults to young children so would have immense practice making purchases online, Numerous car dealerships like Tesla and Volkswagen have begun leaning into new ways to view and customize their cars online and even purchase them online without ever seeing the real thing so the practice of maneuvering and purchasing products online is perfect. The final reason that young adults are optimal is because of the location of Carcierge and the impact that makes on the population within. Being located in the metro market area of Pennsylvania means that they are close to major cities with large possibilities for economic growth and jobs. This means that people entering the workforce are very likely to lease cars. Value proposition -Carcierge should provide in-depth information about what they have to offer in addition to their expansion of services. Carceige offers customer experience directed towards finding one's most suitable car. The expansion of services that Carcierge has to offer include chauffeur services and car rentals which can be bundled with other services such as body works and personal customizations Education Market orientation - Proactive market orientation as it is based on entirely latent needs which was based on Miller’s empathetic research which indicated that vehicle buyers researched 3-5 months online prior to buying cars.
Q6) What could be a general question about the case or industry that may generate in-class discussion? Feel free to change just adding it for now- If concierge were to expand it's product or service line, what would you recommend?
