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Case 04

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15 views1 page

Case 04

Uploaded by

saran uppal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Case 4: Case of Saturn Car

Saturn has always attempted to create committed customers. Saturn a division of General Motors
advertises around the theme:

A different kind of company

A different kind of car

Though Saturn cars costs only 10 to 14 thousand USD (Rs. 5 lakhs to Rs. 7 lakhs), the firm attempts to
provide its customers the same level of service and consideration typically associated with expensive
luxury cars. Its stated objective is to be "the friendliest, best-liked car company in the world". The
company states: "We're going to do more than what the customer expects, and in the long run, it will
enhance our image". Saturn's attempt to build an image of a high quality car built by skilled, caring
workers and sold in helpful, non pressure dealerships, had received two small tests in its first two years.
In one, it had to recall and replace 1,836 cars that had received improper coolant. In another, it had to
repair 1,480 cars with faulty seat-back recliners. In the second case, the firm made a TV commercial
showing a Saturn representative flying to location to fix the car of a resident who had purchased it in the
first year of its launch.

However, in 1998 Saturn began receiving reports of a wire short-circuiting and causing a fire. Thirty-
four fires (no injuries) were reported. Saturn faced a dilemma. A recall would involve 350,000 cars and a
direct expense of as much as $ 55 million dollars. Any negative publicity associated with the recall could
seriously depress sales. Saturn had yet to break even and General Motors was under serious financial
pressure. Saturn managers needed to deal with the problem in a manner consistent with its company
objective described early. According to Steve Shannon, Saturn's Director of consumer marketing, the
decision to handle the recall should follow basic principle of the company:

The measure of whether we are a different kind of company is how we handle the bad times as well as
the good. We must trying to minimize the inconvenience to our customers and show that we stand behind
the cars, so that they don't lose faith in us or the cars.

Mangers wondered how the cars were catching fire and had immediate issues to handle: 1. How to tackle
the customers who met with such incidences across the nation and 2. How to prevent further mishaps by
providing some technical support?

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