However, owing to the increasing price erosion and budget pressure in practice, it has become essential for companies to ensure the effectiveness and efficiency of the services offered. The groundwork of effective and efficient service is a market- and customer-oriented service portfolio. This in turn requires a service-controlling system based on well-founded market research within the automotive sector.
Automotive managers should not hesitate to conduct market research to achieve optimized service, since customers in this sector have considerable knowledge of market success factors and an enormous aptitude to judge. To this end, market studies can provide significant insights and support a performance-oriented management of service actions. The manageable number of target customers in the automotive sector also supports the market research approach. Furthermore, the costs of market research are comparably minimal due to the fact that the customer base in this sector is very narrow. Moreover, the highly involved customers in the branch lead to higher rates of return, compared to the fast-moving customer goods branch, for example.
The champions in the automotive supplier industry are aware of the performance potential of product-supporting services and have been offering such services for decades. The performance potential of service becomes particularly relevant if the products brought into the market by global competitive market players have a similar level of quality and functionality.
This is the case by now in many product categories in the automotive supplier industry since each firm possesses comparable production techniques, even from a worldwide perspective. This fact alone makes it very hard to create, achieve and/or hold durable product-related competitive advantages. Services are the differentiating points in markets with technically and functionally homogeneous products and they have an effect beyond the price as the sole decision criterion. A customer-oriented service portfolio can overcome the technological position and decreases price erosion in the market.
Business-to-Business (B2B) customers want more than a core product. They want a bundle to solve their problems. Services can support the development of long-term customer relationships and partnerships. They leverage the core product and increase the customer value of the offer.
Additionally, services offer the opportunity to gain insights into the customers’ daily Business and processes. This groundwork makes it possible for the supplier to offer attractive cross-selling options to the customer. In addition, services are market entry barriers, in particular for foreign companies that typically are not able to establish a domestic service organisation at competitive costs.
Another advantage of product-supporting services in the automotive supplier industry is the reduction of risk through diversification in the field of service: The corporate development of service competencies offers the opportunity to develop attractive new Business segments. Moreover, a corresponding pricing of services leads to increased turnover and profit. A product-supporting service portfolio has a positive impact on the perceived corporate and brand images.
The existence of real commitment protects against discounters and ensures a long-term corporate existence by credible collaboration. For example, Doney and Cannon (1997) found an impact of perceived trust in the supplier firm and their salespersons on a buying firm’s current supplier choice and future purchase intentions. Furthermore, Rutherford et al. (2008) verified the effect of perceived commitment on a buyer’s propensity to stay in a B2B relationship. In this regard, a customer- and market-oriented service planning can strongly support the development of real commitment.
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