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Paper info: Core Relations and the Intermediates - The Case of Prestige Cars


Core Relations and the Intermediates - The Case of Prestige Cars


Ove Brandes and Per-Olof Brehmer

Place of Publication

The paper was published at the 17th IMP-conference in Oslo, Norway in 2001.


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Our aim is to develop new concepts for the analysis of the dynamics of marketing systems. Byintroducing new concepts in an analysis of an industry under high pressure for rapid changewe can present a model for different alternative developments. Our approaches are conceptualand analytical.Sales & Distribution (S&D) strategies in the prestige car segment are under debate both frominside the automotive industry and from legislators. New actors and dealers are attacking withbusiness models based on success from other industries. In the European Union, the S&D arealso under pressure from the European Commission. The present Block Exemption will bederegulated from October 2002 according to most experts. One reason is the realisation of thesingle market; another is to open for more customer pull enabled by more efficient IT-support.The present system is typically market push of new cars from OEM via dealers to final customers.This paper investigates the driving forces and outlines three scenarios for the distributionof cars. Our main conclusion is that the challenge is to decrease the transaction costs atthe same time as the creation of customer value is given a higher priority.We propose a new concept, namely ?core relations? for the long-term, knowledge-based relationsbetween the OEM and the dealers. For the deeper understanding of the process ofchange we are applying this concept in combination with ?interorganisational competence?and ?knowledge development? driven by ?dynamic capabilities?. We have identified two keyaspects. Firstly, a focus on efficiency, effectiveness and brand building reflects a necessity ofusing multiple channels in the approach towards the customer. Secondly, knowledge-sharingroutines have to build on the relation-specific assets in both the OEM-dealer relation and thedealer-customer relation.