The determining role of after-sales service in the car market
Written by: Kamran Talebi Fard, PhD in Business
These days, with the increasing number of new Chinese cars entering the country’s market, it has become very difficult to decide whether to buy a car, especially in certain price ranges. For example, in the price range of five hundred million tomans to one billion tomans, the number and traffic of Chinese cars has reached its peak. However, many of these cars are offered to the market by new companies or sometimes by unfamiliar names. For this reason, most of the decisions about buying them are based only on the specifications of the product itself, and they are generally chosen without considering the side factors of buying a car. In this article, we have tried to examine the marketing aspects of selling a car, whether it is new or zero kilometers, or second-hand or used, because since a car is considered a capital good in our country, its resale by the buyer is always a very important factor in deciding to buy that car. However, the importance of this issue in the minds of different customers varies based on personality traits and also different price and segment bases. Now, regardless of this discussion, we will generally examine all the factors affecting the sale of a car in new and second-hand condition in a scientific manner to determine the importance of each.
Some marketing and sales experts believe that a car is just a product, like furniture or a mobile phone, etc. Therefore, what is important in selling a product like a car is to focus on the 4Ps or four factors of product success in the market, namely Price or the right price, product or the technical characteristics and features of the product such as options and appearance design, place or the place of supply and in fact the sales network and the number of dealerships and its extent, and finally promotion or advertising and marketing and sales incentives such as installment sales, etc. for the product. And if a product has these 4Ps simultaneously, that is, it has a suitable or valuable price, has good technical specifications and options and has an attractive appearance, has a suitable sales network and sales agencies nationwide, and finally, appropriate marketing operations are designed and implemented for it and good sales incentives such as installment sales. Whether it is considered long-term or low-interest, this product will definitely be successful in the market. In response, it should be said that not only in the Iranian market but also in the world market, these four categories of factors can only heat up the initial sales of a new car, that is, the first two waves of purchases! New buyers or market enthusiasts, who constitute exactly ten to thirty percent of the potential market of that product, will be interested in this product, but to attract the remaining potential customers, who constitute a volume of about seventy to ninety percent of customers, having only these four categories of features cannot guarantee success because since the car is a product with which after-sales service is mixed, the principles of product marketing alone, or the 4Ps, are not enough for its permanent success in the market, and for the success of a product like a car in the market, service marketing principles must be used, which in the simplest case can be referred to as the 7Ps of marketing principles. The meaning and implication is that at least three other Ps play a fundamental role in the marketing and sales of a car. They include process, i.e. the internal processes of a company or supplier or manufacturer of that car, including good promises, timely delivery, bad reputation, late delivery, etc., and in fact everything that comes from the behavior and processes of that company or supplier of the car in the process of selling and delivering the car, as well as after-sales service to the customer. The second essential factor in the service marketing process is physical evidence, i.e. the physical evidence that the customer receives, from compliance with the principles of standardization in the sales centers of that product to the standard behavior of the sellers, the appearance, characteristics and specifications of the after-sales service centers, and the image that the customer receives from the sales and after-sales service centers of that brand, and a mental image or so-called image is created in his mind, for example, the decoration and equipment of the repair shop, the customer’s seating area, the possibility of seeing the car during repair and other external features, the behavior of the repair shop personnel and other features of a modern repair shop are among these items that fall into this category. Finally, the last and most important P is people, which stands for what people say, meaning what people say about us and what they think. What is formed in the opinions of society and the market about a car and the company that supplies it falls into this category, which is one of the most important factors in choosing a car to buy, whether new or second-hand. To understand the importance of this issue, I will mention an example from my work experience; When I was responsible for managing sales and marketing for Porsche in Iran, we launched the Macan. At the same time, the rival company launched the Volvo XC90 in the Iranian market in exactly the same price range. Thanks to the customs pricing process to receive import tariffs, the Volvo XC90, which was practically the same class as the Porsche Cayenne or cars like the BMW X5, was placed in the price range of the Macan, which was actually in a lower segment (due to Volvo’s lower pricing at customs!). Honestly, the XC90 was a very excellent car that won all the American and European car awards in 2016.
