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FAW-VW Audi After-sales Customer Satisfaction
Contents
Literature review on customer satisfaction theory
Evaluation model design on Audi after-sales customer satisfaction
Analysis on FAW-VW Audi service satisfaction
Conclusion
Appendix
Reference
Project plan
The authorized business operation model is popular at the current automobile sales industry, the management from the automobile manufacturer to the authorized dealers’ turns to be very important. It’s a long-term marketing strategy to the factory on how to ensure that the authorized dealers receive the anticipated profits, to develop and upgrade the brand further, to realize the final customer satisfaction. Based on this principle, FAW-VW Audi makes a series of surveys on Audi Dealer Image Analysis, to find out the existing problems and make a consistent improvement via the systematic analysis to the survey results.
Following the development of Chinese automobile market, more and more worldwide automobile giants entered the Chinese market, the competition on the sales market has become fiercer, every automobile manufacturer has attached great importance on how to do a good after-sales service work and improve the brand customer satisfaction. Audi, as the first premium brand, which realized the localization of the production and sales operation in domestic market has done a large amount of work on customer satisfaction, strengthened its position of market leader as No. One Service Brand at the Chinese automobile industry.
Dealer Image Analysis (DIA) is a main method used by FAW-VW to measure the status of Audi customer satisfaction, which includes four parts: service quality, customer treatment, service expenses, time efficiency. Via these four aspects, we can perform an objective evaluation on Audi authorized dealerships service level and performance, as well as to test on customer loyalty, potential risk and MOT (Moment of Truth). Interview will be made by a third party in every month to the customers of more than 100 Audi dealers inChina, the valid questionnaire collected from Audi customers for every Audi dealer could reach to 120 copies every year. The data analysis of Audi customer satisfaction is the result out of the customer loyalty, so much so that it can reflect how loyal a customer is to the enterprise and the brand. It is a concept out of the customer satisfaction, which can be treated as a psychological reflection the satisfied customers had to the brand or as a preference and a wish to revisit the company for next purchase. It reflects the consistency of customer behavior. The value of a loyal customer will be ten times higher than the value of a normal customer, and this loyalty will be followed with this company and the brand in a long term.
Potential risk shows a possibility that car dealer might lose his customers since unsatisfied customer are likely to shift to other dealers or brands. #p#分页标题#e#
MOT is an evaluation of memory from the customers on the service staff or the services that they received or they met during the service process. It can tell the critical points from the customer viewpoints on dealerships performance, which is relevant to customer satisfaction and could be very important to daily work of dealers.
The evaluation process includes four parts: service quality, customer treatment, service expenses and time efficiency. Service quality process includes 5 parts: diagnosis, problem solution, service on demand, reworking & claim handling and technology quality. Customer treatment process includes 5 parts: learning about customer demand, offering suggestion, contacting after service, claim settlement and alternative transportation. Service expenses include 5 parts: reasonable service charge, agreed service items, explaining service contents, explaining service charge and claim & discount. Time efficiency includes quick check-in and timely delivery. Testing process is a critical point on dealership evaluation. It covers every aspect of Audi service core process, which is an objective evaluation of dealership service level in general, and it can reflect customer satisfaction, composed of 17 questions in the questionnaire. In the questionnaire service quality process accounts for 35%, customer treatment process 30%, service expenses 20%, time efficiency 15%. According to the survey result done by the third party, we will make a timely analysis on the weak points and work out the improving program, which will be implemented in manufacturing and monitored by FAW-VW.
Audi Dealer Service Image has grown to 78.6 points in 2006 from 69.5 points in 2001 when Audi first adopted this evaluation process. The figure showed customer recognition of Audi service. Recognition can be seen from the CSI survey result J.D.Power made in Chinese market among all domestic automobile brands. We can say, Audi is stepping towards our target of No. One Service Brand in China firmly and steadily.
As we know from Maslow’s theory of human motivation, customer demands are always changeable. Customer satisfaction will followed as well since the competition situation varies among the premium automobile brands in China. In order to fit for this change, especially when Audi customer group changes from the former government customer to the current individual and business customer, it is a must for Audi to reform on its service strategy in order to keep the brand image and brand satisfaction. The accuracy and truthfulness of data out of the survey can be ensured only via the scientific and precise survey method, like the change from the former DIA (Dealer Image Analysis) survey to the current CSS (Customer Satisfaction Survey), which help to fulfill the international standard so that it can be qualified for the international market. In order to compensate for the shortcomings of CSS survey, we have done workshop tests at the same time, and have implemented the strategy of global service standard on service, to keep the leading position of Audi brand on customer satisfaction, which can be realized in a real sense only through “Knowing Your Competitors, Knowing Yourself”, and work out a program on improving the customer satisfaction.#p#分页标题#e#
Literature review
1. Theory of customer satisfaction
Customer Satisfaction (CS for short) has gained popularity in market economy. An American psychologist used this phrase to define a situation in which customer demand is satisfied. Since then, customer satisfaction has become a scientific concept. On this basis, business world further developed CS into a marketing strategy guiding marketing, or even operating activities. This strategy is known as CS strategy. It evolved from PIMS (Profit Impact of Market Share) and 3 Rs (Revenue, cost Reduction and Regulations) strategies.
The report of PIMS (Profit Impact of Market Share) has been administered by the American Strategic Planning Institute since 1975 after a tracking survey involving about 2,600 strategic business units from more than 200 companies. In the report, conclusions were made that market share determines profit, and therefore the expansion of market share will inevitably bring about the increase of profit, and vice versa. On the American market at that time, PIMS had a far-reaching effect, as it pointed a direction for the operating strategies both in theory and practice: to be leading in a market, a company has to stick to the principle that “customers are always right”, and has to compete for customers by launching promotional campaigns (relying heavily on costly advertising) so that it can realize its strategic goals of expanding market share. For the present market, though, the expansion of market share does not necessarily mean an increase in profit, and sometimes, a lion’s share of market may incur anti-monopoly lawsuit in which transaction cost will be burdened for no reason. On one hand, first reported in 1970s, PIMS reflected the data analysis of a particular period in history. It can not reflect the real conditions after that period, still less what we are experiencing today. On the other hand, the survey results 30 years ago can still offer a benchmark for present situation.
Between the end of WWII and the fast growth of global economy, product suppliers (companies) had advantage over demanders (customers). However, things began to change in 1980s. The era in which most products could be sold to customers was gone. Now customers tend to buy products with good quality. Therefore, companies have to take some measures to improve quality of their products, and there is quality control in manufacturing and services. Since all companies lay such a premium on quality control, product quality improves greatly. As a result, it is becoming more and more difficult for companies to outcompete others by relying on quality. Then, businesses are increasingly concerned about their images. When price and property of their products can not fetch more profits, companies have to rely on brand image to distinguish themselves from others. This image includes more elements (such as color, style and culture) than previously mentioned items.
The criteria of customer satisfaction change with the progress of economy. When commodities were not so sufficient, customers cared more about quality and duration of products, and they are sensible in evaluating products, paying more attention to whether the products are good or poor in quality. But with the coming of affluent society, commodities are abundant and people are paying more attention to the content, comfort and beauty of products. In the new era of emotional consumption, customer satisfaction is the criteria of products. In all, only when companies have a clear knowledge of customer need and satisfy such a need can they be victorious in modern competition.#p#分页标题#e#
China economy has been growing on a fast track since Audi expanded into China market in 1990. Brand loyalty developed among Chinese customers as they are more than sensible in making a purchase, focusing on both quality and comfort and look. This is inevitable. Audi began conducting after-sales satisfaction survey in 2001, consistently centering on whether customers are satisfied and how customers feel about Audi cars. Audi evaluation criteria change with the time.
2. Content and meaning of customer satisfaction
After colleting a great many samples, Reichheld and Sasser, two marketing professors of Harvard Business School, conducted a renewed exploration into the relationship between market share and profit in 1980s, using a method of American Strategic Planning Institute. Their analysis reveals that correlation of the two has greatly fallen, but on the contrary, when other variables are examined, customer satisfaction and loyalty are the decisive factors in deciding profits. Their findings greatly shook PIMS and theoretical foundation of it. After 1980, large amount of research and practice enabled people to realize that the quality of market share; symbolized by customer satisfaction, outweigh the size of market share in affecting profit. Philip Kotler, the father of modern marketing, points out that all departments must “'think consumer' and put the consumer at the centre of company activity. Customer satisfaction requires a total company effort to deliver superior value to target customers.”
The original PIMS data survey led the PIMS project to identify 37 variables which account for the majority of business success. Two leading marketing texts differ slightly on which variables are the most important, with Dibb, Simkin, Pride and Ferrell identifying:
1. a strong market position
2. high quality of product
3. lower costs
4. lower requirement for capital investment
And Lanacaster, Massingham and Ashford citing:
1. market share
2. image
3. investment intensity
4. market growth
5. life cycle stage
6. Marketing expense to sales ratio.
While many of these seem obvious, PIMS has the advantage of providing empirical data that define quantitative relationships and back what some may consider to be common-sense.
PIMS evaluated businesses' market position and suggest possible strategies, based on the data gathered from participating companies. Businesses wishing to use the service provide detailed information, including details of their:
• competitors and market
• balance sheet
• assumptions about future sales.
Clearly, it could be argued that a database operating on information gathered in the period 1970 - 1983 is outdated. However data continues to be collected from participating companies and PIMS argues that it provides a unique source of time-series data, the conclusions from which have proven to be very stable over time.#p#分页标题#e#
It has also been suggested that PIMS is too heavily biased towards traditional, metal-bashing industries, such as car manufacturing; perhaps not surprising, considering the era in which the majority of the surveys were carried out. In reality, as of 2006, the 3,800+ businesses contained within the database include data from the consumer, industrial and service sectors.
It is also heavily weighted towards large companies, at the expense of small entrepreneurial firms. This resulted from the data collection method used. Generally only larger firms are prepared to pay the consulting fee, provide the survey data, and in return have access to the database in which they can compare their business with other large businesses or SBUs. Mintzberg(1998) claims that because the database is dominated by large established firms, it is more suitable as a technique for assessing the state of “being there rather than getting there”.
A serious theoretical criticism has also been mentioned. An empirical correlation does not necessarily imply cause. There is no way of knowing whether high market share caused the high profitability, or whether high profitability caused the high market share. Or even more likely, a spurious factor such as product quality could have caused both high profitability and high market share.
Tellis and Golder(1996) claim that PIMS defines markets too narrowly. Respondents described their market very narrowly to give the appearance of high market share. They believe that this self reporting bias makes the conclusions suspect. They are also concerned that no defunct companies were included, leading to “survivor bias”.
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