The motor car retail industry is one that is always facing numerous challenges. For car dealer businesses to survive, they must clearly demonstrate to consumers that they represent the best possible channel for the acquisition and maintenance of consumers' motoring needs. They must also demonstrate to manufacturers that they are the best route for them to sell their cars.
The consumption of motoring is delivered by the interaction between the following three main players:
- Consumers have a demand for mobility, at a cost which maximizes value in their perception.
- Manufacturers wish to generate shareholder value by designing, producing and marketing new cars. Greater customer loyalty is also a goal that manufacturers seek.
- Dealers wish to generate value by being the distribution channel for new cars between manufacturers in one location to consumers in another location.
(a) What aspects of a firm's relationships is illustrated in the example above? What other relationships should the firms at the manufacturers and dealers level consider?
(b) How will the manufacturers "achieve customer loyalty"?
(c) How will the dealers "generate value" in this chain?