Group 3- Conroy Acura

Conroy Acura Case Analysis Presented by Group 3

Case Background

2

Case Background
Acura - founded in 1986 and was involved in car dealership
Was playing in a competitive market. Major competitors were Volkswagen, Audi, Mitsubishi, Mercedes, Nissan and Honda
Cars were bought and sold with a markup
Services of sold cars was also undertaken apart from resale
Usual marketing strategies like billboards, signage's, ads etc. were utilized to generate new sales
Mailers, calls & post card communication utilized to retain customers
Stagnant sales due to almost nil increase in new sales and abysmal retention rates were a main cause of concern
Alternate strategies to mitigate the issues to be explored 3

Models of Car Available

Models of car available

CSX – $ 31,860

TSX - $ 42,984

RSX - $ 35,100 5

Models of car available (Contd.)

TL - $ 49,680

MDX - $ 61,776

RL - $ 79,812 6

Solutions Proposed

7

Retention Strategy


Retention requires satisfying existing customers to ensure return sales
Some of the strategies employed are as below:
Increase annual maintenance cost to 160 $.
Some schemes involved would be 10$ of existing cost of communication
50% of oil change cost (0.5 x 20$ x 4 = 40$) – “Care for your Car” scheme
110$ dedicated for customer loyalty program – Tiered system based on longitivity.
The Loyalty program would involve reward points on services which can be redeemed for discounts in services at a later date.
Apart from this referral bonus of 1000$ on purchase of next car also awarded for the non premium models. This is anticipated to marginally increase new sales apart from retaining existing customers

8

Sales Improvement Strategy


New sales would predominantly hinge on pricing and marketing
The non premium cars offer more margin than the premium segment. Hence, targeting this to move volumes would improve profits.
The strategy adopted for the non premium segment can be to reduce markup from 8% to 6.1 %. This would mean an average saving of 645$ for these customers on purchase. Being a competitive market, this would improve volumes.
Being, the economy class, this price discount would automatically lead to a ‘Pull’ effect.
The strategy adopted for the premium segment would be to increase targeted marketing spend by 22%. A focused approach would help improve sales.

9

Thank You !