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THE MARKETPLACE
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Conroy’s Acura had a number of competitors in the marketplace, the most obvious were the dozen or so other Acura dealerships within a 30-kilometre radius. Conroy’s Acura competed directly with dealerships that sold cars comparable to Acura’s offerings, such as Saab, Volkswagen and, most notably, Honda.
Conroy believed the four biggest competitors in the Toronto market were BMW, Mercedes-Benz, Lexus and Infiniti. BMW and Mercedes-Benz, two German brands, tended to price their cars higher than Acura.
Lexus, the luxury brand of Toyota, and Infiniti, the luxury brand of Nissan, tended to price their cars in the same range as Acura.
Competition had grown fierce over the past few years, because of the advent of the Internet, which made it much easier for consumers to comparison shop.
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THE CARS
Conroy’s Acura sold six models of new cars:
Acura CSX — average sales price: $31,860
Acura RSX — average sales price: $35,100 …show more content…
Because it was less expensive to retain an existing client than to acquire a new customer, De Lima believed increasing the customer retention rate should be the primary focus of the dealership’s efforts. After a brainstorming session with her sales force, they came up with the following ideas:
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Providing free oil changes or car washes with purchase of a new car
Customer reward programs along the lines of frequent flyer miles offered by airlines. But the sales force had difficulties coming up with details. For example, who would run the program? What would the rewards be? How could consumers collect points other than buying a new car?
Increased contact with customers (through postcard or letter mailings, phone calls and e-mails).
Surveys of existing customers to ask what would influence them to purchase from Conroy’s Acura in the future.
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Conroy was intrigued by the ideas, but needed a way to compare the costs to the benefits. How much would their retention rate need to increase if the marketing budget for existing clients were doubled?
THE DATA KEPT BY CONROY’S ACURA