CarMax success using Circuit City retail model

CIRCUIT CITY-Selling used cars like stereos By Chaitanya Bansal Diwakar Kumar Pankaj Pandey G.Revathi Shashwati Sen Siddhesh Bhatewara

Introduction ,[object Object],[object Object]

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Why “CARMAX”??? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

The Growth Story… ,[object Object],[object Object],[object Object],[object Object]

Strategies ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Sacramento Los Angeles San Antonio Houston Tampa Jacksonville Va. Beach Raleigh Charlotte Greensboro Charlotte Greenville Las Vegas Fresno Fresno Tucson Large markets (9) Mid-sized markets (28) Small markets (1) Store Growth: • FY07 10 stores +15% • FY08 13 stores +17% (Est.)

Tucson San Diego Los Angeles (2) Modesto Newport News Baltimore Charlotte ) Atlanta • FY08 13 stores

[object Object],[object Object],[object Object],New Car

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Important Dates ,[object Object]

[object Object],[object Object],[object Object],[object Object],[object Object],DEALING WITH COMPETITON

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Revenue ( M) Profit Margin (12 mos) Employees Market Cap (M) Sonic Automotive, Inc . $7,972.1 2.3% 11,200 $992.1 CarMax, Inc $7,465.7 4.5% 13,736 $4,633.5 Copart, Inc. $560.7 38.8% 2,536 $3,349.6 America's Car-Mart, Inc. $240.3 1.0% 800 $140.8 Strategy International Ins. Group, Inc. $5.7 -126.1% 19 $0.4

Auto Nation ,[object Object],[object Object],[object Object],[object Object]

Contd… ,[object Object],[object Object],[object Object],[object Object],[object Object]

United Auto Group,Inc. ,[object Object]

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Marketing Concept Core concepts Need/ Want/ Demand Product (goods and services) Value/ cost / Satisfaction Exchange/ Transaction Relationship/ Network Private mode of transport Sale & purchase Of used cars & Selling of New car Good quality at less price Luxuri ous/ Econom ical Satisfied customers by High quality service Purchasing & Selling of cars for money Manufacturer Finance Companies

Establishing strategic business unit ,[object Object]

MARKET ORIENTED STRATEGIC PLANNING

Technology used Customer need Customer group Middle and upper middle class Americans Reliable cars with no haggling over price 110 point inspection system- huge and exhaustive data base for inventory

WHY Plan new business ????? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

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Consumer buying behaviour ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

CDV provided ,[object Object],[object Object],[object Object],[object Object]

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Segmentation ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Target segment ,[object Object],[object Object],[object Object]

Market targeting ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],Mkt Pdt M1 M2 M3 P1 P2 P3

Positioning ,[object Object],[object Object],[object Object]

Product differentiation Carmax differentiated its product under two main dimensions Services Differentiation Personnel Differentiation

Service differentiation ,[object Object],[object Object],[object Object],[object Object],[object Object]

Personnel differentiation ,[object Object],[object Object],[object Object]

Positioning Statement ,[object Object],[object Object]

Product Core benifit Basic Augmented Expected Potential

The Marketing Mix: 4 P’s 1.Product ,[object Object],[object Object],[object Object],[object Object]

Product hierarchy for Carmax ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Branding ,[object Object],[object Object],Separate family name for all products.

2. Price ,[object Object],[object Object],[object Object],[object Object]

[object Object],Price Product Quality High Medium Low High Premium strategy High-value strategy Super-value strategy Medium Overcharging strategy Medium- value strategy Good value strategy Low Rip-off strategy False economy strategy Economy strategy

Pricing method ,[object Object],[object Object]

3.Place ,[object Object],[object Object],Owns all outlets Corporate VMS Promotion and distribution under single ownership

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Promotion ,[object Object],[object Object],[object Object]

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Consumer recognition ,[object Object],[object Object],[object Object],[object Object]

Answers to Case Study Questions :

What price adjustment strategy do car dealers use ? ,[object Object]

How is CarMax changing the used – car industry’s pricing strategies? How have buyers and competitors reacted to these changes ? ,[object Object]

What marketing recommendations would you make to CarMax ? ,[object Object],[object Object],[object Object]

CarMax success using Circuit City retail model

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