Audi is one of the leading car dealers in German that has specialized in the trade of Mercedes and BMW car models. This has led to the development of a strong mutual relationship between the manufacturer and the dealer despite the fact that the manufacturer is slightly more powerful than the dealer.
However, the dealer has certain powers especially when it comes to customer loyalty which can only be achieved through after-sale services that are provided by the dealer. The manufacturer therefore depends on the dealer to ensure that customer loyalty is attained at all levels. Consequently, both the manufacturer and the dealer have the obligation of making the marketing process a success.
This is due to the fact that as much as the manufacturer has the vital obligation of the production process, the dealer has similar responsibility of providing and maintaining quality services to customers through warranting mechanical and repair services. This is meant to maintain the quality of the brand as well as the loyalty which is Audi’s main objective to its customers.
In this case of high dependence between the manufacturer and the dealer, cooperation between the two parties is an essential tool which works best unlike the use of compulsion. This kind of relationship is much better when the two parties have almost equal powers thus either party has the chance to improve their performance.
However, the manufacturer may have more power when the brand is much stronger and there are many potential dealers. The control of the dealer is a major component of the contract since the purchaser of the dealership and the manufacturer differ in interests.
The dealer’s interest is based on high prices and is short lived while the manufacturer is interested in building a long term relation with the dealer and the customers as well as building the image of the brand. The car maker expects the new dealer to maintain high standard levels in showroom presentation as well as maintaining quality sales and services.
The violation of this clause is prevented by ensuring that the relationship between the two parties is profitable such that there is no need to sell the ownership of the dealer
As an Audi dealer, the only challenge I am faced with is dealing with the imbalanced dependence on the manufacturer. However, this relationship gets more workable when there is market stability and predictable conditions (Coughlan, Anderson, Stern, El-Ansary, 2006). In cases where the market is stable, the manufacturer may not use power on the dealer.
However, when there is market unpredictability, the dealers are under pressure from the manufacturer to meet the required sales where the demand of Audi may be falling. In these cases, a high mutual relationship between the parties is very crucial. In order to prevent estrangement, the manufacturer aims at creating an equitable relationship with the dealer.
One of the best ways to achieve this is by employing the use of distributive justice the same way it is used in allotting the rewards from the relationship.
For the dealer to maintain this relationship, there is the need to view the financial benefits as well as comparing the rewards from four perspectives; the contribution of the dealer into the relationship, benefits resulting from other dealers, the possible benefits to the dealer from other prospect brands and finally by viewing the manufacturer’s input into the relationship.
The manufacturer also has the responsibility of maintaining the mutual relationship by ensuring that there are procedural ways of ensuring justice between the parties. This is based on the operation of everyday activities between the manufacturer and the dealer.
This can only be achieved through open communication to allow honesty and healthy resolution of conflicts. Equity between the parties is equally important as well as adequate knowledge in the situations and needs of the dealers.
Reference
Coughlan, A., Anderson, E., Stern, L. and El-Ansary, A. (2006) Marketing Channels (7th ed), Prentice Hall, New Jersey.