Friday, November 18, 2011

Analysing General Motor Buy Power

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General Motors

Internet today is starting to blur the differences between manufactures and resellers. Manufacturers decide to sell their products online, and customers are now requiring direct services and support from the manufacturer. If done correctly it will increase the overall volume of sales and does not hurt the channel partner. GMBuyPower has done it successfully. GMBuyPower is selling its vehicle through its dealer, maintaining the supply chain. The customer visits GMBuyPower chooses a vehicle and GMBuyPower will locate the nearest dealer according to customer’s preferences. This strategy avoids channel conflict between the suppliers and dealers. An example of a channel conflict situation; a few years ago Levi’s Jean Co. started to sell women’s jean on its web site to North American customers. They were actually so successful that the jeans shop that sell Levi’s jeans started to boycott, due to sales dropped. This is because Levi’s web sites are selling jeans at a cheaper price, hurting the retailers’ sales. Levi then had to remove their offering from the web site and had to think of the new strategy. A good example avoiding channel conflict is Libri, one of Germany’s largest online bookshops and at the same time the largest retailer of books. Instead of selling books directly to the customers, the orders from the end customers are redirected to the nearest bookshop in Germany. The customer then picks up the books at the book shop, if the customers are out of reach by the bookshops, they will sent directly to the house by mail. If Libri sells books directly to customer the bookshop would choose another distributor. GMBuyPower is also selling its vehicle, but selling by connecting customers to its dealers. This prevents a channel conflict, which will result in a stable and growing market share. It also prevent manufacturer from monopolizing the retailers and creates new businesses. It also benefits customers because retailers offering undifferentiated products, which have a high price, are going to push prices down. The key to this success is an information based services and an appropriate processes to help increase response time.

GMBuyPower is a customer oriented web site. Its primary objective is to connect customers to dealers. The most effective way to connect customers to dealer is through creating trust. Trust plays a major role in many e-commerce companies today. One of the main reasons today for customers to not purchasing from Internet shops is the lack of trust, which stops or discourages customers from entering into exchange relation with the Internet shops. Trust is link to loyalty. Customer’s trust is the path way to developing customer’s loyalty which contributes tremendously to increase of sales and profit in an organizations. Therefore focusing on customer’s trust can be a good way to enhance General Motors sites. Selling cars on the internet creates a different dimension from the tradition way. Selling cars on the internet does not require a salesperson. A salesperson brings a face to face interaction with the customer, which may develop trust easily. To do this the web site needs to have a trust features. And in order to do this, an e-banking environment has to be created, to develop customer’s personalized environment. E-banking is one of the most effective ways to relate and create trust between customers and dealer. Creating an e-banking environment involve financial advice, loans, and budgeting. Every customer will have their own financial account which they will receive direct assistance. Customers can view their account details and update it daily. When customers seek financial advice, they may place themselves in a vulnerable position, where they are totally dependent on the advice or neglect it. Once customers are dependent on the advice, the company has a long term benefits on the particular customers. When customers are happy and satisfied with the advice they will continue to seek more. The customer’s financial account does not only include financial advice but customers’ preferences of their cars, budget plan, installment status and their dealer’s information. Developing and monitoring a personal atmosphere in the web site is very important. The more the web site becomes personalize the more customers will become loyal. Similar to Ford’s websites services customers account with personalized information programs, which include incentive notifications, My Ford, Ford Money Market Account and build you ford. Which draw great attractions to Ford’s web sites.

Buying new cars requires a large amount of money to an average salary person; this forces the person to hesitate and double think of their financial situations. Using this weakness, by giving a reliable financial advice will create trust with the customers, even though at the end of the day the person decided not to buy a car. This consultant method is similar to Office Depot ( Office Deport offers a small business handbook for starting and running small business and gives advice on creating a business plan for free. While offering consulting advice customers will seek to return for updates, with the hope that the business will grow into a large one. This creates a strong relationship between the customers and the company. Another financial assistance is by giving loans to customer to buy their cars. Giving loans breaks the barrier for a low income groups. Giving loans open a wider range of customers to anticipate, with the reliable financial advice helping customers to select their right loans and installment ability. Similar to Ford’s Website, which also provide Ford Motor Credit.

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In commercial exchange trust can be linked to the role base on performance the company provides. The influential element that contributes to trust is the company reputation, the reliable of the technology, the robustness of its supporting applications and accuracy of the information provided. General Motors reputation is quit satisfied they are keeping up with their quality and reliability. In order to establish trust with customers four aspects have to be perceived, security control, privacy control, Integrity, competence and third party recognition. Security control involves both monitoring software and hardware performance, which will be discussed in more details later on. GMBuyPower has maintained a good privacy control. Example in GM BuyPower privacy statement stated that GM will not sell customer’s information, GM will use cookies to keep track of customer’s navigation to serve users better and so on. Cookies are very common when trying to accumulate information about a customer. The cookie is a file, which is saved on the customer’s computer and contains site specific information, which can be retrieved by the site owner. Today people are becoming less and less unaware of their privacy abuse. Some online businesses that do not have privacy statement on their web site, collects information about the customers and visitors and offer the profiles to other organizations.

GMBuyPower integrity and availability is quite satisfied with their response rate and flexibility to change. Example when login or registering an account to received newsletter, their response time is fast. GMBuypower’s competency is moderate, because too many features is difficult to monitor and control which may leads to low integrity and performance, which may effect customer’s satisfactions. What GMBuyPower lack is third party recognition, to improve GM’s reputation, a customers review sections should be created. Enabling customers to criticize and complement GM’s product. Criticizing and complementing GM’s product develops an openness atmosphere among the customers. The complements will be an essential source for third party recognition. It keeps customers coming back to check on the latest development and issues. mainly emphasizes on selling vehicles, to enhance General Motor sites the company must now stress on services. BMW unlike General Motors has approached its customer in a different manner. GM has created which is an extensive corporate website that delivers several categories of information on many auto brands, and every auto brands has a link to its own specific sites such as, Buick, Cadillac, Chrysler, Saturn etc. operates as the central auto market for General Motors, where customers don’t need to go to GM specific vehicle brand dealer to purchase a car. The site is design to lure more sophisticated customer inward. On the other hand BMW does not sell its vehicles online. BMW feels that this would dilute the brand and loss from the personal relationship BMW forms with the customer through its distributors. A BMW executives states

“We launched the site in Oct 15, it was really an awareness that internet existed, that we are a company that prides ourselves in technology leadership” “Our mission was to make sure our site drove and felt like a BMW.”

BMW website only emphasis on its vehicles specification and services. BMW uses service strategy which stresses on technical excellence, innovation, and performance to provide the best service to its customers. Like BMW, General Motor has to provide more quality services to satisfied customer’s need. Ford Motor is also a good example of a company that provides both services and sells vehicles online. Ford services include

Vehicle Services

· Quality care

· Quality care components

· Extended service plans

· Quality care reporting

Dealer Services

· Preferred businesses

· Professional fleet

· Limo care

· Alternative fuels (natural gas, electric)


· Ford Motor Credit

General Motor has to improve and promote their services through and their dealers. Similar to Ford Motor, GM must provide range of services to customers. Internet services strengthen the relationship wit the customers, it provides added information to the customer on the customer’s term. GMBuyPower must establish a virtual call center and an e-mail interface channel for customers. The e-mail strategy is used as the primary communication channel between customers and organization. GMBuyPower has established a good use of this strategy. It include newsletter subscribe allowing users to register instantly. Another email strategy that GMBuyPower uses is that it allows visitors to register instantly. Registration is very simple and fast, only little information is required when registering, only username, password and email address is require. When the users are interested in a particular model, they can save their car preferences once registered. The next time the user login their records and preferences will be saved.

Creating a virtual call center strategy, where customer data access point is created allowing self-directing data searches of the company’s database as well as the facilitation of customer group bulletin board. In the virtual call center strategy the customer is given greater access to data and information that previously was accessible only internally to the business organization itself. One telecommunication provider adopts this strategy, allowing its customers to enter into the problem management system and see all the problems that occurred with the equipment at various companies and locations. This type of service attracts customer’s acquisition and gain complements to the company. The telecommunication provider aims to provide excellence perform in terms of speed, innovation, agility and technology for its customer and this strategy reinforce their objectives. Another good example is Ford Motor; upon entering ford provide a section called “Investors Information”. In Investors information it contains information about Ford Stock data, Shareholder resources, Investment opportunity, and company financial. In company financial ford provide information on it annual report, and quarterly earnings reports. These information help keeps investor well informed and can be access by public. In the Ford stock Data, contains information on Ford Motor Company stock, from current price to historical information. This strategy enables both customers and investors to follow the companys performance and remain informed.

Service quality is one of the keys to customer retention. Developing an ongoing relationship involves adding value to the customer on an ongoing basis. Developing a customer service chain that combines these features into an effective strategy that touches the customer at all points with relationship to the organization is difficult, but it’s a task needed to conquer to build a market share through customer’s needs. One good feature to GMBuyPower is that it should stress more on its service, like selling car insurance. Enabling GMBuyPower to not only sells cars to customers but also sells insurance at the same time. Cars and insurances are inseparable, every car needs insurance. Using this weakness as the marketing strategy to sells cars with insurance in a cheaper price will attract large amount of customers. GM corporations should take advantage of selling their insurance. GMAC Insurance provides a wide range of insurance coverage to individuals as well as businesses. Unlike Ford Motor who doesn’t operate an insurance company but allocates customers to their insurance panthers. Some of Ford’s insurance providers are Esurance, GE Auto Insurance Program, Leader Group, The Hartford Financial Services Group, Inc etc. GM should take an advantage of being an insurance provider, by promoting their insurance through selling their vehicles. In GMBuyPower very little information are given to about GMAC insurance.

In order to enhance the General Motor site to improve customer’s interaction are base on three strategies, content, and format.

The most important thing on the web page is content; never let users leave the web site without giving them any information. This increases the probability that they will return to look for new information. Clicking on fancy graphics which takes ages to load, might win a design prize, but is pointless to vehicle selling websites. Functional websites with content useful and relevant information will drew more visitors. The graphics and multimedia that will be suitable for GMBuyPower will be the showroom sections, which GMBuyPower lack. GMBuyPower should create a showroom sections where it contains all the rich multimedia, like flash, test drive video etc. Using multimedia technology to enable customers to view their vehicles interior and exterior and in 60 degrees. Creating a showroom is important because vehicles pictures on the one web site may vary on another. GMBuyPower, for example, open in an ergonomically pleasing manner, taking styling cues from its vehicle, using dashboard controls and a list item. It is simple and clear in its functionality. It guides viewers through section such as “Current Offers”, “New Vehicles Search”, and “Locate Dealer”. Giving customers the flexibly by asking the users whether they want to shop by brand, body style or by car model. The only drawback is that GMBuyPower does not emphasis on its services. In order to access GMAC insurance, GMAC loans, GM fleet, GM news, and GM corporate information the users has to go to other GM sites. GMBuyPower sites does not have customer’s care or support, it only has Help and FAQ. Some of GMBuyPower tools include, “Compare”, “Build your own”, “Financing Tools” and “New vehicles Search”. The more advance customer browser can use the “Build your own” tools to create and modify their own cars. GMBuyPower still lack information for advance users like car performance spec, dimensions and capacity. It also lacks information for vehicles safety issues and guides which is a great interest for most drivers. GMBuyPower could also have feature like “Choosing the GM Vehicle thats Right for You”, which customer go through series of questions and gain information of what type of vehicles is most suitable for them.

The format of GMBuyPower is important with interaction to customer. The selection of data format is crucial, as initially the goal is to increase information delivery speed, and engage the viewer in a continued interaction. The format that GMBuyPower uses is the following

1) Find a Car

) Compare with Competitors

) Locate & Search Dealer Inventory

4) Make an Online Request

The first step is to search GM brands that match customer’s criteria and move on the step two. In step two customers can make his own feature for feature comparison between GM cars and other model from another company. This saves time of research with rd party price and feature comparisons. In step three, the customer has the ability to locate GM dealers and search their inventory to determine the availability of the specific model. Customers have the option of selecting their own dealers or allow the system to select the three closest dealers for them. In the final step, GMBuyPower buying process facilitates to complete the transaction. Dealers can focus only on providing best service they can because the price factor has been taken care by GMBuyPower already. Buyers can take a test drive for 4 hours once they are confidence that they are interested.

To conclude GM opportunity to increase business is not just selling vehicles, but need to stress on services, financial assistance, loans and insurance, customer’s service and support, to establish a one stop shopping web sites. That provides range of useful services to satisfied customer’s need. As for the strategy to increase loyalty and trust personalization and customization of the web sites need to be adjusted or added. To create value added or complementary services, to offer higher benefits to customers. Example of value added services are additional insurance and guarantees, 4 hr test drives, low interest loans, etc. In general these services enable buyers to trade at favorable terms and with confidence. They increase the attractiveness of the dealers to present to customer and attract new customers.


1. Daniel Amor, (000), The E-Business Evolution, Prentice Hall.

. Ray Dawson, (00), Electronic Commerce, McGraw-Hill.

. Bijan Fazlollahi, (001), Strategies for E-Commerce Success, IRM Press.

4. Robert Plant, (000), E-Commerce, Prentice Hall.

5. Peter Mudie & Angela Cottam, (1), The Management and Marketing of Services, Butterworth Heinemann.

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