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CDK Digital Marketing Addressing Channel Conflict with Data Analytics Case Solution

Solution Id Length Case Author Case Publisher
2626 1495 Words (7 Pages) Florian Zettelmeyer, Greg Merkley Kellogg School of Management : 5-314-504
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The challenges faced by a renowned digital marketing firm, CDK Digital Marketing, as they sought to resolve a particularly complex issue during the renewal of their sole-provider contract with General Motors in 2012 are detailed in this case study. The project manager Melissa McCann was putting together a plan for their presentation to support CDK Digital's request to continue managing the websites and online marketing for more than 4000 General Motors automobile dealers. The problem was to find a solution that would benefit both CDK Digital and the automobile dealers. The renewal of the contract with General Motors (GM) was essential for CDK Digital as GM were their biggest client. The changing consumer trends and the drastic change in advertising media over the years were also key factors among the decision-makers to renew their contract with CDK Digital. There was inefficiency in advertising which left the individual dealers unsatisfied and therefore, Melissa McCann’s team had to build a solid proposal to convince the subcommittee.

Following questions are answered in this case study solution

  1. What misalignment(s) caused channel conflict between manufacturers and dealers in the automotive industry? How was this conflict reflected in the attitudes of GM and its dealers toward the CDK Digital Marketing program?

  2. How would you characterize CDK Digital’s core competencies as of 2011?

  3. Suppose a car shopper’s interest could be known when she visited a dealer website. How would the dealer want to treat her? What about the OEM?

  4. How can CDK Digital leverage its core competencies to provide a website solution that both GM and its dealers consider to serve their interests?

Case Analysis for CDK Digital Marketing Addressing Channel Conflict with Data Analytics Case Solution

1. What misalignment(s) caused channel conflict between manufacturers and dealers in the automotive industry? How was this conflict reflected in the attitudes of GM and its dealers toward the CDK Digital Marketing program?

The manufacturers sought a website that would convey a uniform brand image, while the dealers wanted a digital platform that was simple to configure. Manufacturers sought to sell more Original Equipment Manufacturer (OEM) components, while dealers needed a website that would let them offer the items that were in demand in their region. Less than half of the dealers used the CDK's website as their main sales platform, despite GM mandating that they do so. Moreover, the dealers, instead of using the cutting-edge analytical methods employed by marketing firms, based their advertising judgments on outdated "rules of thumb" from the past.

Simply stated, the Manufacturers and Dealers had opposing goals. A platform that might satisfy one side would frequently let down the other. The Dealers desired a website that would help them stand out from their regional rivals. They were unable to get that kind of flexibility using the CDK Digital Marketing platform. Many of the dealers were let down by CDK's value proposition as a result of this flaw, which became painfully obvious when CDK was charged with persuading a Chevrolet Dealer's CRM committee to extend their contract. One committee member was unwilling to even attend the meeting because they were so unhappy with the service.

On the other side, the Manufacturers needed to sell more expensive OEM components while maintaining a consistent brand image across all of their web channels. Another issue was that the website content and local and regional dealership advertising rarely matched OEM statements. To achieve these objectives, GM decided to establish compliance standards and make their franchisees abide by them. However, there were some unfavourable side effects, especially in terms of how Dealers perceived CDK's services. ‘

Another misalignment was that the old simple platform model by CDK Digital had inefficiency in advertising which inadvertently led to different sites for both GM and dealers. The fundamental issue, which proved costly for both sides, was that these sites were competing for the same advertising keywords.

2. How would you characterize CDK Digital’s core competencies as of 2011?

CDK Digital was one of the leading advertising platforms in 2011. The company had built up its advertising business model from simple advertising to advanced user-generated content online advertising which led the company to attract big automobile manufacturers such as Lexus, Mitsubishi, Nissan, Volkswagen, and GM. This was all achieved using continuous improvement in online advertising by the company.

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