Xiamen Honda 4S: Capturing Marketing Insight MM UGM Executive B – 26 B: Group 1 Arifin Joyodiguno Bayu Wicaksono Adhi Wita Puspadila

CASE SUMMARY MAIN ISSUE PROBLEM STATEMENTS ANALYSIS OF SOLUTION ALTERNATIVE RECOMMENDATION

China Automobile Sales Growth China Automobile Sales System Automobile Suppliers Automobile Brand Dealers CASE SUMMARY – CHINA AUTOMOBILE MARKET

Automobile General Distributor Corporate status Written authorization of an automobile maker & particular distribution rights of automobiles Professional automobile marketing capabilities Automobile Brand Dealer Corporate status Authorization of an automobile supplier to sell certain brands Have a shops (name, logo & trademark consistent w/ the authorization) Have premises, facilities & technical professionals Comply w/ local regulation on urban & business development REQUIREMENTS SALES SPARE PART SERVICESSURVEYS 4S: a sales service shop serving four function

CASE SUMMARY – XIAMEN AUTOMOBILE MARKET Xiamen, located in southeast Fujian on China’s southeastern coast. Land Area 1, square kilometers Sea Area 300 square kilometers 2009 data: 2.52 million registered residents million tourist arrival 2009 GDP US$ billion Xiamen Economic Growth  improved the standard of living, reflected by the increase of motor vehicle purchases Increased number of automobile brands moved into the Chinese market, including Xiamen market

XIAMEN PURCHASE PATTERN Personal Financial Situation Occupation & Social Status Opinions Advertisement Tax Reduction Direct Discount Reduction of Automobile Usage Fees Equipment / Interior Decoration/Maintenance/Insurance PURCHASE DECISION FACTORS CASE SUMMARY – XIAMEN AUTOMOBILE MARKET

Price Range US$ 16,000 – 26,000 White collar employees Self-employed people Private Business Owner Price Range US$ 26,000 – 41,000 Sr. White collar employees Mid Level corporate Managers Private Business Owner A/I US$ 22,000 – 30,000 A/I US$ 30,000 – 44,000 Best Selling SUV 2009 Marketing & After sales Redistributed to 2 dealers CASE SUMMARY – XIAMEN HONDA 4S SHOP

CASE SUMMARY – XIAMEN HONDA 4S SHOP PROFILE Main Business Dept. SALES CUSTOMER CONTROLLED ACTIVITIES PROCESS SALES CONSULTANCY ACTIVITIES 4S SHOP LOGISTIC & ADMINISTRATION ACTIVITIES XIAMEN INTERNAL ACTIVITIES

CASE SUMMARY – XIAMEN HONDA 4S SHOP PROFITABILITY MODEL Sales INCOME PROVISION OF AFTER SALES SERVICES SALES OF WHOLE VEHICLES CAR INSURANCE ACCIDENT REPAIR (NON/ INSURANCE) BEAUTY PRODUCT REGULAR AUTO BEAUTY CARE PLATE LICENSING OTHER BUSINESS INCOME

MAIN ISSUES

1. Xiamen Honda Income Generated : Sales & After Sales 2. Low Income at After Sales Service Department 3. Lack of Coordination between two main profit center

MAIN ISSUES Customer Loss Rates  Below Customer Expectation  Third party Contract

PROBLEM STATEMENT The submitted proposal is involving the complimentary car care plan to customer purchasing (undiscounted) insurance. Is it a good way to retain the customer? Could Xiamen Honda 4S follow suit? Each Year 4S Shop spent large sums of advertising, promotion and enhancement of customer satisfaction. Was the money well spent ?

ANALYSIS Marketing Analysis Define Problem & Research Objective Develop Research Plan Collect Information Analyze Information Present Findings Decision INTERNAL EXTERNAL

ANALYSIS ECONOMIC VALUE FUNCTIONAL VALUE PSYCHOLOGICAL VALUE PRODUCT VALUE

ANALYSIS MARKETING METHODS PRODUCT PRICE CHANNEL ADVERTISING

ANALYSIS STRENGTH GOOD PRODUCT / SALES WEAKNESS LOW PROFIT AFTER SALES OPPORTUNITY INCREASE OVERALL PROFIT GOOD COLABORATION AMONG 2 DEPT IMPROVE CUSTOMER SATISFACTION THREADS COMPETITORS STRATEGY

RECOMMENDATION Accept the proposal  Using “ATM” methods (observe, duplicate & modify) this proposal should be a good way to test customers satisfaction and increasing the retention rate.  This will impact to the increase of after sales department expenses, but if this promotion strategy succeed, after sales could gain profit from other services (spare part, oil, etc. )  This will improve the coordination/ collaboration between two main income center which should also increase the overall company’s profit

RECOMMENDATION Xiamen will follow the suits  This “duplicating” strategy will be more powerful by modifying the services provided to the customer such as; Provide home care services for regular services Create the comfortable waiting room completed with free WIFI and playground area for children In cooperation with Banking Services to give discount rate promo for the customer This modification strategy will increase long life/ intimacy and customer satisfaction

RECOMMENDATION COST EFFICIENCY STRATEGY  Sales Department have a pressure to sell the automobile unit that has been distributed by the distributor to avoid any storing cost.  Sales Department should continue using good media advertising to increase the unit selling