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    Case Presentation On Conroy's Acura: CLV and ROM: Presented by Group: Titans

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    Conroy's Acura is a car dealership founded in 1986 that sells Acura vehicles. It spends $120,000 annually on marketing to new customers. It sells around 650 cars per year and generates a 2% net profit from sales revenue after fixed expenses. The dealership spends $10 per existing customer per year on retention efforts like postcards. Management is considering ways to increase profits through greater sales, customer lifetime value (CLV), and return on marketing investment. Two proposed strategies are to focus on either increasing new customer acquisition or improving customer retention rates for existing customers to maximize profits.

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    Case Presentation On Conroy's Acura: CLV and ROM: Presented by Group: Titans

    Uploaded by

    danish
    82 views8 pages
    Conroy's Acura is a car dealership founded in 1986 that sells Acura vehicles. It spends $120,000 annually on marketing to new customers. It sells around 650 cars per year and generates a 2% net profit from sales revenue after fixed expenses. The dealership spends $10 per existing customer per year on retention efforts like postcards. Management is considering ways to increase profits through greater sales, customer lifetime value (CLV), and return on marketing investment. Two proposed strategies are to focus on either increasing new customer acquisition or improving customer retention rates for existing customers to maximize profits.

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    acura

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    248580500-Conroy-s-Acura (1)

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    Conroy's Acura is a car dealership founded in 1986 that sells Acura vehicles. It spends $120,000 annually on marketing to new customers. It sells around 650 cars per year and generates a 2% net profit from sales revenue after fixed expenses. The dealership spends $10 per existing customer per year on retention efforts like postcards. Management is considering ways to increase profits through greater sales, customer lifetime value (CLV), and return on marketing investment. Two proposed strategies are to focus on either increasing new customer acquisition or improving customer retention rates for existing customers to maximize profits.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    82 views8 pages

    Case Presentation On Conroy's Acura: CLV and ROM: Presented by Group: Titans

    Uploaded by

    danish
    Conroy's Acura is a car dealership founded in 1986 that sells Acura vehicles. It spends $120,000 annually on marketing to new customers. It sells around 650 cars per year and generates a 2% net profit from sales revenue after fixed expenses. The dealership spends $10 per existing customer per year on retention efforts like postcards. Management is considering ways to increase profits through greater sales, customer lifetime value (CLV), and return on marketing investment. Two proposed strategies are to focus on either increasing new customer acquisition or improving customer retention rates for existing customers to maximize profits.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 8

    Case presentation on Conroy’s

    Acura: CLV and ROM

    Presented By Group: Titans


    Akshay Khandelwal
    Aman Gupta
    Ashish Kumar
    Danish Javed
    Md. Akram Qureshi
    Md. Hassaan Hamza
    About Conroy’s Acura
    • Car dealership firm; Founded in 1986 by Ross Conroy; First Acura
    dealership in Toronto and First in North America
    • In 1999 Ross’s Son Terrence Conroy, became the president of Conroy’s Acura CSX - Entry Acura RSX –
    Acura. level luxury car - Small sporty
    $31,860 sedan - $35,100
    • Competitors:
     Comparable offerings (in terms of dealership)- Saab, Volkswagen,
    Honda
     Higher end pricing – BMW, Mercedes-Benz
    Acura TSX - Acura TL - Mid
     Same range pricing – Lexus (Toyota), Infiniti(Nissan) Entry level luxury sized luxury car -
    - $42,984 $49,680

    • Marketing strategies: Billboards, direct mails, radio, TV sports,


    newspaper, magazine Acura MDX - Acura RL –
    Sport Utility Oldest model -
    Vehicle - $61,776 $79,812
    • Customer Retention strategies: quarterly postcards, promotional letters
    US Automobile Industry Analysis
    Porter’s 5 Forces
    Bargaining Power of
    Automotive Buyers HIGH

    Bargaining Power of
    Automotive LOW
    Suppliers
    Competitive Rivalry HIGH

    Threat of New
    International MEDIUM
    Entrants
    Threat of Substitutes LOW
    Sales and existing marketing efforts
    • $120,000 spent annually marketing to new customers via billboards, direct mails, radio, television etc.

    • Approximately 650 cars were sold each year spread over the six models. After the fixed expenses net
    profit generated is usually two per cent of sales revenue.

    • $10/year/existing customer is spent by the firm much of which is spent on sending postcards and sending
    out information.

    • Success of marketing efforts were judged by comparing the cost of marketing effort to the number of
    extra cars sold. But this method did not take into account the possibility of repeat customers.

    • New marketing initiatives were required to provide a significant return on marketing investments.

    • Sales was broken down into two types: sale to new customers and sale to previous customers.
    Proposed strategy
    New Customers:
    • According to the VP of sales Rachel De Lima, to increase the number of new customers the
    firm need only do more of what they were already doing (more advertisements etc.).

    • However, the sales staff believed that by lowering the margin they would be able to achieve the
    necessary volumes and increase their sales.

    Retention of existing customers:


    • Since retaining an existing customer was less expensive than acquiring a new one, the firm
    focussed their efforts on improving the customer retention rate.

    • Providing free oil changes, customer reward programs, increased contact with customers and
    conducting surveys of existing customers were some of the suggested steps.
    The Decision(1/3)
    Increasing Bottom line
    • Greater Sales Revenue
    • Reduced Costs

    Greater CLV
    • Increased price & retention rate
    • Decreasing maintenance costs &
    discount rate

    Maximize Return on
    Marketing
    • Increased profits with new
    marketing effort v/s Increased costs
    The Decision(2/3)
    Increasing Bottom Line CSX Greater CLV
    CSX
    8% RSX
    8% RSX CLV
    RL 6%
    RL 6%
    CSX
    9% CSX
    9%
    TSX RSX TSX
    MDX MDX
    15% RSX
    29% 29% 15%
    TSX
    TSX
    TL TL
    33% Gross Profit 33%

    • Maximizing Sales Revenue from TL,MDX & TSX • Greatest CLV for TL,MDX & TSX with given base data
    •Reducing maintenance costs for other segments •Increasing retention rate via increased maintenance
    Conclusion

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