Research On Sales Management Of Shanghai Volkswagen 4S Shop From The Perspective Of Cross Sales

In the late 1990s,4S store, as a new channel pattern and model entered Chinese auto industry. Essentially,4S store is a franchise model that functions as sales, sparepart, service and survey centers. As these franchise stores work closely with auto manufacturers, they normally have uniform appearance, identification, management standards and brand characteristics. As such,4S store can benefit from and enhance auto manufacturers’brand equity. Therefore,4S store became very popular in China.Traditional 4S stores, however, lack brand equity and management systems of their own. They usually just act under strict control of auto manufacturers and could not voice themselves. With the rapid growth of production and sales of autos in Chinese market, as well as the prevalence of 4S stores, serious management and operation problems emerge. For example, many 4S stores are faced with such issues as high turnover rates, low customer loyalty, low profit and fierce price competition. To deal with these problems,4S stores have to re-think about their management, especially marketing strategies.First, this research reviews the development, especially the current state of Chinese auto industry and 4S stores. Further, this study delineates Shanghai Volkswagen’s (SVW’s) status. Based on the findings, the study argues that derivative services are and, in the future, will continue to be one of the most importance profit generating businesses. The competition focus of the industry will shift from sales of new cars/autos to sales of derivative services, including auto finances (e.g., insurance, installment), accessories, maintenance, auto club and other cultural activities. How to promote such services and enlarge profits is the main problem that 4S stores need to work out.Second, this study provides a SWOT analysis to identify the opportunities and threats in 4S stores’external environment and internal resources. The analysis reveals that the increasingly tense competition and changing environment have made the "before-sales" market (vs. "after-sales" market) "red sea". After-sales market, on the contrary, is still "blue sea" in which 4S stores and other auto-related businesses can further explore. To sail in the blue sea, however,4S stores need to change their marketing strategies and focus on after-sales market. Specifically, after-sales market refers to all the services that related to the use of auto after its sales.Therefore, how to leverage the professional service context in 4S stores, especially in its aftersales and intermediary sectors, to realized the sales of high-profit derivative services-cross-selling strategy-is a critical process in 4S stores’ sustainable development.Third, all the marketing strategies will ultimately be implemented by frontline employees and they need proper resources and competence. This study argues that a series of designed human resources practices-high performance work system (HPWS)-will facilitate and ensure the implementation of cross-selling strategy in 4S stores.This research contributes to the existing literature in three aspects:1) focusing on auto after-sales market, an under-researched field; 2) promoting cross-selling strategies; and 3) designing a high performance work system. Thus, this study offers practical suggestions on 4S stores management and marketing.