Dr. Talal's Honda
Khanfar, Nile M., Loudon, David, Journal of the International Academy for Case Studies
The primary subject matter of this case concerns the consumer purchase decision process for a new automobile. Secondary issues examined include the ethics involved in certain actions by dealer representatives, how small businesses must tightly manage their sales efforts, proper business etiquette when dealing with customers, and understanding customer satisfaction issues in the automobile selling environment. The case has a difficulty level of four, appropriate for senior level. The case is designed to be taught in one class hour and is expected to require one hour of outside preparation by students.
Dr. Sultan Talal and his wife have made a decision that they need to purchase a new minivan to replace the older large-size van they own. Talal has decided on a Honda Odyssey, even without test driving the vehicle for confirmation. The case takes the reader through the various stages in the decision process from information gathering to decision and post-purchase activities. Talal experiences many typical consumer interactions in this environment. The case focuses on some of the ineffective actions taken by employees in the dealership including inadequate sales effort, rudeness, unethical behavior, and poor customer relations and follow-up.
Sultan Faisal Talal, Ph.D. and his family recently moved over 1000 miles from a mediumsized, mid-south city to the Ft. Lauderdale, Florida area where he began a new job as an Assistant Professor on the science faculty of a major university in the area. Although born in Kuwait, Talal had lived in the U.S. for many years and recently became a citizen. The county where Talal resides is ranked ninth in the United States in the number of millionaire households, according to a recent study conducted by a research group. There are approximately 70,000 millionaire households in the metropolitan area, with an average net worth of $1.5 million.
With an improved income (no longer a graduate student) and a growing family (wife, two children and another on the way), Dr. Talal decided the time was right to purchase a newer vehicle than his 6-year old Chevrolet full-size van. He wanted another van, but one that was smaller than his old one. He decided to purchase a new Honda Odyssey minivan. The choice to buy a Honda was not difficult since he already owned a Honda Accord. Also, the Odyssey was ranked highest of all mini vans by Consumer Reports in safety and dependability. His quick search on the Internet turned up the following Honda 4-door minivan models, all with automatic transmission, 3.5-litre 6-cylinder engine: LX (MSRP: $25,345); EX (MSRP: $28,395-$34,595); and Touring (MSRP: $36,595-$3 8,795). Extra options for the EX and Touring models include leather, entertainment and navigation systems.
Since the Odyssey was available in different models, prices, and equipment, he thought it was necessary to obtain a brochure from a local dealership in order to review the various vehicle and option alternatives. He checked the area Honda dealers and found the following three available within a reasonable distance from his home: East Coast Honda (4.5 miles), Performance Honda (16.3 miles), and Southeast Honda (26.2 miles).
Dr. Talal drove almost five miles to the nearest Honda dealership, East Coast Honda. At the entrance door of the dealership's large and beautifully designed building, a receptionist asked if she might help. Dr. Talal replied that he would like to speak to their top salesperson about a minivan. The receptionist recommended Mr. Ralph Donald. The following conversation took place between Mr. Donald and Dr. Talal:
Donald: "Hi! My name is Ralph."
Talal: "Hello, I am Sultan Talal. I am interested in purchasing an Odyssey van."
Donald: "OK." (He left and came back with a brochure to hand to Dr. Talal.) "Here is the brochure. Let me know when you are ready to buy."
Talal: "I am ready to buy now. …