MBA-FPX5416__Assessment2-1

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1 David Estaphnous MBA-FPX5416 Assessment 2

2 Executive Summary Many companies have decided to use convenience as their business model. Convenience has been incorporated into business strategies in recent years manifested in different companies such as Doordash, Uber, and Amazon. Rollin’ Auto was established by two skilled mechanic brothers who inherited the skill from their dad. They developed the idea when some of their customers have asked to pay them a premium to help them with oil changes, and their car maintenance from the comfort of their own home or on the go. The company provides excellent services to accommodate customers from the comfort of their home or on the go. The company uses convenience as a powerful business model to accommodate its customers. They started 2 years ago and now they have loyal clients that have yearly subscriptions with the company. With the huge success the company has been seeing, they now have two investors interested in investing in the company. There are several challenges affecting the automotive industry. There aren't enough cars available. Thus, there is an unparalleled worldwide car shortage, and it may take months for consumers to obtain the vehicle of their choice. Some new automobile models have seen price increases as a result of this shortfall, which has also affected used car sales and pricing. SUVs, pickup trucks, and premium models are among the vehicles that many firms only make because they bring in the most money. The economic impact will be more significant the longer the shortage persists. For modern economies to run, they need automobiles. Growth is hampered by the scarcity of trucks, which are necessary vehicles for product transportation(touch, 2023). In addition to these challenges affecting the industry, consumers haven’t been able to trust their mechanics. A recent finance buzz poll found that 38% of consumers who either own or lease a

3 car are concerned about their ability to trust the mechanic. Furthermore, 64% of drivers believe that a repair company has defrauded them. Nearly 50% of the consumers surveyed stated that they would prefer to fix their car themselves over doing their taxes by hand. Many customers wait as long as possible because they are anxious about interacting with repair companies, which could lead to more issues. Because they are having trouble finding a shop they can trust, 14% of men and 10% of women have postponed going to the auto repair shop. According to 77% of respondents, women are more likely than males to receive needless maintenance and repairs from repair shops. 71% of car owners or renters think repair shops treat women less favorably than men. According to 66% of respondents, repair firms intentionally charge women more for the same repairs as they do for males. 41% of automobile owners and lessees would prefer to handle auto repairs by hand rather than file their taxes. The question "How much a car repair will cost" causes anxiety in 72% of respondents. Seventy-five percent of automobile owners or renters have put off auto repairs for various reasons. Rollin’ Auto has been operating for at least 2 years and has been entrusted by the community. They have seen growth in their clientele by 100% each month. Several internal influences affect the business which are: The primary internal factor influencing a consumer's purchase decision is their own needs and motivations. A consumer's need can be characterized as something being absent or as the discrepancy between his intended and actual state. A person's motivation is their inner state that drives them to fulfill their particular need (Boone, 2018). This could also be explained by using the following example: a person may be truly hungry or thirsty, and his desired state would be to be well fed. This need would drive him to look for a hotel or restaurant to meet it. Although it is impossible to fully define every consumer's need, major research has led to the classification of many consumer needs(Schiffman, 2019). To meet these needs and

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4 motivation, people would need transportation. Thus, the company will be capitalizing on these needs in its campaign. This need would drive them to look for a hotel or restaurant to meet it. Although it is impossible to fully define every consumer's need, major research has led to the classification of many consumer needs. The basic needs of consumers are usually met by transportation. Thus, the company can capitalize on these needs to ensure consumers can trust the company to help them fix the problem affecting their needs. Rollin’ Auto will primarily use urgency as their motivation to influence their consumers to buy their services. The company will also be using scarcity as they are the only ones that can drive the customer to fulfill a service. Emergency stops on the highway, urgent need for tire changes, and frequent maintenance issues are some of the situations the company can be using to advertise its services. Essentially, the brand will be offering peace of mind to the consumer. The next significant internal factor influencing consumers' purchasing decisions is their attitude. An individual's attitude relates to how they feel or think about an item. Direct interaction with the product, word-of-mouth, media exposure, and other information sources are some of the ways that consumers pick up attitudes. Attitudes influence consumers' purchasing decisions by reflecting positive or negative assessments of the attitude object and encouraging the purchase or rejection of specific brands or products(Schiffman, 2019). It is constantly evident in people's behaviors and purchasing habits. It is very difficult to change someone's habits once they have been formed (Eyal, 2014). It will be difficult to persuade a customer to change their mind if they have an unfavorable view regarding a particular product or problem. It is a sustained general assessment made by customers of a good, service, or business. Thus, to change people’s habits, the company might have to offer promotions and leverage

5 different marketing methods to acquire customers. One of the methods that is very effective is the “knowledge function” where the marketers use ads centered on the consumer’s need to know. As a result, marketers frequently attempt to change consumers' perceptions of their brands by educating them about information they were unaware of(Schiffman, 2019). Additionally, the company must cater to these customers to get satisfaction and encourage habitual return or loyalty to the company. An individual's unique personality is shaped by their inner psychological traits, or personality, which both influence and mirror their thoughts and behaviors. Customers frequently buy goods and brands that marketers have given "personalities" to help them stand out from the competition. Assigning human qualities to a brand is known as brand personification(Schiffman, 2019). Assigning a human quality to the brand will essentially make the brand memorable, and it will enhance the way it is psychologically perceived in the psyche of the consumer. The quality of a savior will enhance the level of perception of the brand in the minds of the consumers. “Rollin’ Auto your car savior will not let you down” Self-concept is how people perceive themselves. The perceptions of oneself are often associated with purchases of products and services because consumers often choose products that are consistent with their self-perception and/or enhance one’s self-image. Because people behave differently depending on the circumstances, consumers have multiple "selves." For instance, a person is likely to behave differently. People manage their lives on social media for others to see them in a way that they desire. The “Social Media Self” is how the self is chosen on social media. Social media posts are frequently modified and carefully picked to present a person's best self to the platform's user base. By uploading photos of themselves volunteering or with friends,

6 they could want other people to think of them as kind and compassionate. There are different types of personalities that the company should target based on self-concept. The personalities should be materialistic, and fixated consumers. Materialistic consumers will be loyal consumers as they enjoy seeking out things that give them pleasure. They will also be great brand ambassadors. Fixated consumers are mainly collectors and hobbyists who hoard items that reflect their identity or interests. Some of these fixated consumers have obsessions with cars and the company should capitalize on the services that it can provide these consumers. Meanwhile, the external factors that affect the business are mainly political, regulatory, economic, social, and cultural. Regulations or limitations on business conduct may be established by federal, state, or municipal entities. Regulation exists to safeguard businesses and consumers alike. Companies dislike some regulations (like advertising limits) but support others (like patent laws). There are no current regulations that ban the advertising of the auto industry. From the consumer side, since according to the state of California, cars are required to do smog checks biennially. The consumer will turn to the company to diagnose and fix smog check failures. Thus, from a regulatory standpoint, the business will withstand different economic challenges because in California, consumers need to provide proof of smog check, and offering smog check services will enhance the company’s reach. Culture is a society's collective values, customs, norms, arts, social institutions, and intellectual achievements. Cultural values express the common ideals, standards, and priorities of a community. The majority of advertising messages worldwide, to some extent, mirror the cultural values of their intended audiences(Schiffman, 2019). Culture influences the way consumers buy because they believe it is the right way of doing it. Additionally, the habits that they have been accustomed to force them to maintain their behaviors. Since humans are always sociable, culture

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7 is also affected by what society is doing. Social gatherings and word of mouth are very powerful in marketing. Thus, the company will be targeting word of mouth to convince people that Rollin’ Auto is the right company to trust. The demand for consumer goods is primarily influenced by the following economic factors: interest rates, employment, wages, pricing and inflation, and consumer confidence(Maverick, 2022). The more people who have a consistent income and expect to continue having one, the more people will make discretionary spending expenditures. As a result, the monthly unemployment rate report is one economic leading indicator that provides insight into consumer goods demand. Consumer spending is also impacted by salary levels. In general, consumers have greater disposable income when earnings are rising steadily. The demand for optional consumer products is expected to decline if incomes are flat or declining. One of the best measures of the state of American workers' salaries is their median income. Thus, consumers can afford a monthly subscription to the company’s services. Additionally, they can also afford premium services such as window tinting and turbo installation. Businesses in the auto industry offer light truck and passenger car maintenance and repair services. These businesses are Firestone, Jiffy Lube, Meineke, Midas International, American Tires, and Monroe Inc. Even though these are companies that have a big share of the market. Competition becomes irrelevant for the company as these companies don’t offer services on the road. The blue ocean strategy that the company will be implementing is to target consumers who would pay premium pricing to be serviced. The company will be using convenience to trigger consumers to buy their services. This blue ocean strategy will give the company a competitive advantage to excel above its competition(Mebert, 2017). The company will not need to go into

8 bidding wars with competitors or drive their service quality to accommodate low pricing. The company will be charging premium prices to service consumers who will need an emergent repair on the road. Technology creates sophisticated and discerning consumers who are challenging to attract, satisfy, and keep. But, it has also permitted forming more detailed targeting: marketers can now adapt their offerings and promotional messaging, offer more effective pricing and shorter distribution routes, and build long-term connections with clients more readily. The company should be seeking technology to attract clients. It should also use technology to convince clients they are being serviced by a state-of-the-art company that can accommodate sophisticated demands. The company will be targeting social media networks so that it primarily attracts consumers. Customers use profiles to tell others about themselves, including their age, interests, and personality. Friends are dependable users of the social media platform. They are permitted to leave comments for specific network members to read. Through the networks, users can monitor what their friends do online (such as updating their profiles or adding new photos). Social network groups facilitate the discovery of others who share a user's interests. Social networks facilitate communication between group members by enabling users to publish images, videos, music, and other content for other group members to see and by creating "discussion boards" where members can exchange ideas(Schiffman, 2019). Social media targeting will enable the company to target customers that fit their ideal customer criteria. The ideal customer for the company is a college graduate, with a yearly salary of 200k+, male or female, and 30-60 years of age. Premier positioning is a strategy that emphasizes the uniqueness of the brand. This strategy will allow the brand to position itself among competitors as the

9 company that provides the best quality work. Thus, it will be easier for the customers to choose when given the choice. The brand positioning will allow the brand to develop its image and acquire market share. Using key attributes to express a brand has been very popular among paper towel industry rivals. It has been successful in fitting into the consumer lifestyle. Thus, the brand should adopt attributes such as “with rollin’ auto, your safety is our main priority”, “your oil change will now come to you”, “tire popped on the freeway, rollin’ auto will come your way”, “car maintenance never felt easier if done at home with rollin’ auto”. The key attributes help the brand to be embedded in the customer’s lifestyle. Rollin’ Auto needs to employ several strategies to obtain a competitive edge to grow. The desire of consumers to sustain a long-term relationship with auto repair shops through service quality and trust is influenced by three factors: experience value, relationship benefit, and service quality. Service quality is a consumer's assessment of the general excellence of the service they have received. It is best described as a psychological assessment rather than an objective attribute, as well as a judgment based only on the consumer's impression. The SERVQUAL model is widely regarded as the most common model for characterizing service quality. It was proposed by Parasuraman, Berry, and Zeithaml. Five suggested levels are included in the SERVQUAL model: tangibility, assurance, empathy, responsiveness, and dependability. Many earlier studies proposed different theories and factors based on this. Studies on the relationship between service quality and notions like customer satisfaction, customer retention, trust, and loyalty have been conducted. Enhancing service quality and value is vital for service companies to elevate client happiness. The degree of service satisfaction increases with service quality. When a consumer receives exceptional service, it can greatly influence their desire to make a purchase as well as their emotional reaction. This is why customer satisfaction is so important.

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10 As numerous studies have demonstrated, qualities like trust, immersion, and loyalty are impacted by service quality, which also positively affects client purchasing and service satisfaction. Ultimately, service quality has the potential to positively impact both service purchase and repurchase intentions. Based on this research, it can be concluded that customer perceptions of service satisfaction and trust are influenced by the quality of vehicle repair services(Hong, 2020). Thus, the quality of the repair will enhance the positive effect on service satisfaction and service trust. Additionally, adding a warranty to the service shows to the consumer how confident the company is in its operations. To establish a relationship with the consumer, the company must invest in a points system that should be added to its application. Certain types of state dependence are produced when a reward system and habit persistence in consumer choices are present, which encourages recurrent purchases. There are two types of dependence: intrinsic and induced. The intrinsic type of dependence will occur from the trust and the service quality. With the induced dependence, loyalty programs will enhance the repeat purchase of products or services(Hong, 2020). To achieve this dependance the company must focus on an emotional bond versus a transactional bond with the consumers at the transaction process. It is essential to have 11 processes at the transaction to establish this emotional bond with the consumer. These 11 processes will be implemented and assessed as part of the company metrics. The first process is “Adaptation” which is merchant purchase recommendations that are tailored to the customer's needs, the possibility to acquire custom-made products, and individualized marketing and promotions to make the consumer feel like a special and valuable customer. It also encourages the customer to purchase more from the company. The second process is “Interactivity” which summarizes the ability to examine retail offerings from many angles, a fast-finding product search engine online,

11 instruments for easy comparisons, and helpful information. The third process is “nurturing” which helps the consumer get reminders for products they have saved in their carts before checking out or discounts they can redeem, provides important valuable information about the products, increases the business with the consumer, and cultivates a relationship with the customer. The fourth process is “ Commitment” where the consumers are assured they will be receiving their products or goods on time, the business responds and troubleshoots issues and problems with the consumers’ orders, and overall takes good care of the consumer. The fifth process is to “network” which allows the consumer to share their experiences about their product purchases on the merchant’s websites. This process should cultivate a useful network for sharing experiences and establish a close-knit network between clients. This process should be implemented as part of the metrics to boost reviews about the products that the consumers deem very valuable or provide great value to the consumer. It also helps the consumer decide what they want to purchase based on other client’s experiences. The sixth process is “Assortment” where the merchant provides a variety of products that can be helpful to the clients and help the clients do “DIY” or do-it-yourself short videos. This assortment of products will enhance the shopper’s experience and provide a “ one-stop shop” experience. The seventh process is “ Transaction ease” where the merchant’s website is easily navigable and a first-time product buyer can purchase without much help. It helps the consumer easily buy the products or subscribe to the membership without having to go through hurdles. This process will increase sales and will help upsell other products that can be added to the customer’s carts. The eighth process is “Engagement” where the merchant’s website is modern and appealing. The consumers as a result will enjoy shopping at the site, come back, and feel comfortable going on the website. The ninth process is to integrate loyalty into the website or

12 application. This will ensure the consumer comes back and never considers switching to a different merchant, this will enhance sales and ensure customers have a joyful experience. Loyalty can also be improved with discounts, coupons, and holiday deals. The tenth process is “Inertia” which makes it hard for the consumer to leave the merchant unless very dissatisfied. The consumer by default will find it difficult to stop shopping at the site and feel that switching merchants will be a waste of resources. The eleventh and final process is “ Trust” which will be earned as a result of a great experience and can be enhanced with the experience the consumer has and ensures the belief that the merchant is reliable and honest(Schiffman, 2019).

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13 References Boone, L. E., & Kurtz, D. L. (2018). Contemporary marketing . Cengage Learning Asia Pte Ltd. Eyal, N. M., & Hoover, R. (2014). Hooked: How to build habit-forming products . Hookmodel.com. Hong, J., & Kim, B. (2020, April 26). Service quality, relationship benefit, and experience value in the auto repair services sector . MDPI. https://www.mdpi.com/2199-8531/6/2/30 Koebert, J. (2023, May 16). 64% of drivers are putting off necessary car maintenance [survey] . FinanceBuzz. https://financebuzz.com/car-maintenance-survey. Schiffman, L. G., & Wisenblit, J. (2019). Consumer behavior . Pearson Education Limited. Touch, L., & Name. (2023, February 20). The automotive industry: Opportunities and challenges: Blog . Lever Touch. https://www.levertouch.com/automotive-industry-opportunities- and-challenges/

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