Analysing General Motor Buy Power
General Motors
Internet today is starting to blur the differences between manufactures and resellers. Manufacturers decide to sell their products online, and customers are now requiring direct services and support from the manufacturer. If done correctly it will increase the overall volume of sales and does not hurt the channel partner. GMBuyPower has done it successfully. GMBuyPower is selling its vehicle through its dealer, maintaining the supply chain. The customer visits GMBuyPower chooses a vehicle and GMBuyPower will locate the nearest dealer according to customer’s preferences. This strategy avoids channel conflict between the suppliers and dealers. An example of a channel conflict situation; a few years ago Levi’s Jean Co. started to sell women’s jean on its web site to North American customers. They were actually so successful that the jeans shop that sell Levi’s jeans started to boycott, due to sales dropped. This is because Levi’s web sites are selling jeans at a cheaper price, hurting the retailers’ sales. Levi then had to remove their offering from the web site and had to think of the new strategy. A good example avoiding channel conflict is Libri, one of Germany’s largest online bookshops and at the same time the largest retailer of books. Instead of selling books directly to the customers, the orders from the end customers are redirected to the nearest bookshop in Germany. The customer then picks up the books at the book shop, if the customers are out of reach by the bookshops, they will sent directly to the house by mail. If Libri sells books directly to customer the bookshop would choose another distributor. GMBuyPower is also selling its vehicle, but selling by connecting customers to its dealers. This prevents a channel conflict, which will result in a stable and growing market share. It also prevent manufacturer from monopolizing the retailers and creates new businesses. It also benefits customers because retailers offering undifferentiated products, which have a high price, are going to push prices down. The key to this success is an information based services and an appropriate processes to help increase response time.
GMBuyPower is a customer oriented web site. Its primary objective is to connect customers to dealers. The most effective way to connect customers to dealer is through creating trust. Trust plays a major role in many e-commerce companies today. One of the main reasons today for customers to not purchasing from Internet shops is the lack of trust, which stops or discourages customers from entering into exchange relation with the Internet shops. Trust is link to loyalty. Customer’s trust is the path way to developing customer’s loyalty which contributes tremendously to increase of sales and profit in an organizations. Therefore focusing on customer’s trust can be a good way [next page]