This case study describes CDK Digital Marketing, General Motors' exclusive website vendor for its U.S. network of 4,000 dealers, which is facing a crucial contract renewal at the end of 2012. Melissa McCann, the director of marketing, and Chris Reed, the CMO, prepared for a critical meeting in July 2011.
Zettelmeyer, Florian and Merkley, Greg
Kellogg School of Management (KEL894-PDF-ENG)
October 22, 2014
Case questions answered:
We have uploaded two case study solutions, which both answer the following set of questions:
- What misalignment(s) caused channel conflict between manufacturers and dealers in the automotive industry? How was this conflict reflected in the attitudes of GM and its dealers toward the CDK Digital Marketing program?
- How would you characterize CDK Digital’s core competencies as of 2011?
- Suppose a car shopper’s interests could be known when she visited a dealer’s website. How would the dealer want to treat her? What about the OEM (Original Equipment Manufacturer)?
- How can CDK Digital leverage its core competencies to provide a website solution that both GM and its dealers consider to serve their interests?
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CDK Digital Marketing: Addressing Channel Conflict with Data Analytics Case Answers
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Executive Summary – CDK Digital Marketing
This case study recounts the efforts of CDK Digital Marketing (now Sincro), a prominent digital marketing agency, as they faced a particularly enigmatic issue during their 2012 sole-provider contract renewal with General Motors:
“How do we offer dealerships the flexibility to differentiate their online presence from the local competition while maintaining a consistent brand image?”
Challenges
The Dealers wanted a digital platform that was easy to customize, while the Manufacturers wanted a website that would communicate a consistent brand image.
Dealers wanted a website that would allow them to sell the items that were popular in their area, while Manufacturers wanted to sell more OEM parts.
Although GM required that dealers use the CDK’s site, less than half of them used it as their primary sales platform.
How The Product Helped
Most Dealers didn’t have a full-time marketing professional on staff. Hiring CDK Digital Marketing allowed Dealers to make informed marketing decisions without paying an additional salary.
CDK offered remarketing campaigns that allowed Manufacturers and Dealers alike to target customers at each stage of the Buyer’s Journey. The data collected by CDK brought GM
closer than it had ever been before to solving one of their greatest mysteries, “What sells a car?”
Results and Future Plans
- Synchronized data collection processes.
- Consistent Brand Communication
- Dealer Site Personalization
What misalignment(s) caused channel conflict between manufacturers and dealers in the automotive industry?
Simply put, the Dealers and the Manufacturers wanted different things. Offering a platform that would please one party would often disappoint the other.
The Dealers wanted a website that would allow them to differentiate themselves from their local competition, and frankly. The CDK Digital Marketing platform did not offer them that kind of flexibility.
This shortcoming resulted in many of the dealers being disappointed with CDK’s value offering, which was made blatantly clear when CDK was tasked with convincing a Chevy Dealer’s CRM committee to renew their contract.
They disliked the service so much that one of the members of that committee wasn’t even willing to attend the meeting.
On the other hand, the Manufacturers needed to present a consistent brand image across all of their online platforms and sell more (expensive) OEM parts.
To accomplish these goals, GM decided to set compliance guidelines and enforce those rules on their franchisees. But this had a couple of negative side effects, particularly concerning how Dealers felt about CDK’s services.
How was this conflict reflected in the attitudes of GM and its dealers toward the CDK Digital Marketing program?
Once the compliance guidelines were issued, Manufacturers started conducting regular audits of the Dealer’s websites and issued fines when the sites were not up to standard.
Dealers associated these fines with CDK Digital Marketing, and naturally, they had…
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