CDK Digital Marketing: Channel Conflict & Data Analytics - Case

This case study solution analyzes the channel conflict between automotive manufacturers and dealers, focusing on CDK Digital Marketing's role. It examines the misalignment of objectives between GM and its dealers regarding digital strategies, particularly the CDK Digital program. The analysis covers CDK Digital's core competencies in 2011, including the Dealer Technology Assistance Program (DTAP) and the use of big data analytics. It also discusses how dealers and OEMs should treat car shoppers online and suggests how CDK Digital can leverage its competencies to provide a website solution that serves both GM and dealer interests by offering individuality and autonomy to the dealers, using big data analytics to understand customer buying patterns, and helping OEMs gather vital information.

Running body: CDK DIGITAL MARKETING
CDK DIGITAL MARKETING
Name of the University
Name of the student
Author Note

1CDK DIGITAL MARKETING
(1) What misalignment(s) caused channel conflict between manufacturers and the
dealers in the automotive industry? How was this conflict reflected in the attitudes of
GM and the dealers toward the CDK Digital program?
The dealers and manufacturers of the automobile industry had different objectives in
mind as the messages they wanted to convey were rarely aligned with each other. For their
own profitability, the dealers wanted to have the power to customize their website according
to their wish. As CDK Digital was limiting their creativity and their business idea of gaining
profitability, the dealers started looking at the company in a negative way and refused to
comply with them (Zettelmeyer & Merkley, 2017). This is evident from the scenario where
CDK Digital was asked to convince the subcommittee members of Chevy Dealer CRM for
renewing their contract. The committee should have consisted of 8 members but one member
remained absent as he had a negative perspective towards the company.
The dealers were proposed to run the site of CDK Digital only, but they had the
authority to run as many site as they want (besides CDK Digital). Most of the dealers ran
their own websites and ran the GM supplied websites as a secondary option for compliance.
Only 43% of the dealers ran the GM websites as primary source (Ryan, 2016). The dealers
who complied were provided financial incentives and the others were penalised. The point of
view of the dealers were that they should have the flexibility to host as many websites as they
want for their own flexibility.
Franchises such as Fortune 500 work by focusing only on their profitability whereas
other dealers focus on the local and political community for their business propositions.
Although the automobile industry has had less than 50% dealerships from 1949, the GM still
garnered more than 6000 dealers more than their competitors. This raised the prices and
competition for GM to handle and the dealers started differentiating from each other. The

2CDK DIGITAL MARKETING
GMs tried to disenfranchise the dealerships but failed as it was against the court decisions
(for the bankruptcy of 2009). The CDK and GM need to come to a mutual agreement and
leave aside the negative attitudes to launch a collaborative successful campaign (Zettelmeyer
& Merkley, 2017).
The digital marketing strategy of CDK Digital is appropriate form their perspective
but the miscommunication with the GM dealers is understandable. The needs of the
customers’ needs to be taken into account which is only possible with local marketing
strategies employed by the GMs (as dealers have a better understanding of their target
markets than their prospective dealers).
(2) How would you characterize CDK Digital’s core competencies as of 2011?
The core competencies of CDK Digital were based on how they utilized the
information provided on their GM website. The Dealer technology assistance program
(DTAP) was a new technology strategy used by CDK Digital. They used analytics to analyse
customer behaviours and came up with a complex advertising system in real time. Efficient
and robust technologies, big data analytics and creating the infrastructure to handle millions
of website visits (as well as over 1 billion advertisements) were all part of the core
competencies of CDK Digital (Leeflang et al., 2014).
(3) Suppose a car shopper’s interests could be known when she visited a dealer’s
website. How would the dealers want to treat her? What about the OEM?
For interpreting the needs of the customers, the dealer should have a creative mind.
The customer should be shown the models that he or she is looking for. The lines of

3CDK DIGITAL MARKETING
communication should always stay open. The dealer should understand the time sensitivity of
the car shopper and display whatever they desire according to their convenience (Zettelmeyer
& Merkley, 2017). The dealer should not dwell in opportunistic dishonesty and work for the
mutual benefit of both parties. They can promote other cars or purchase processes according
to the OEM suggestion of the customers.
(4) How can CDK Digital leverage its core competencies to provide a website solution
that both GM and the dealers consider to serve their interests?
It is best to become a solution provider and differentiate products if a company like
CDK Digital is competing to keep it business profitable. Individuality and autonomy needs to
be provided to the dealers (for better consistency of the OEMs) by developing a program by
CDK Digital. Big data analytics could be used to understand the buying pattern of the
customers with proper accuracy in real time (Chaffey & Ellis-Chadwick, 2016). This data
could be useful for OEMs as it will provide them with vital information such as the models of
the cars that were searched, the particular ads viewed, models viewed due to third party
information and the websites of the dealers that were visited. The dealers can differentiate
and improve their product standards to stay above the competition.

4CDK DIGITAL MARKETING
References
Chaffey, D., & Ellis-Chadwick, F. (2016). Digital marketing. Prentice Hall.
Leeflang, P. S., Verhoef, P. C., Dahlström, P., & Freundt, T. (2014). Challenges and solutions
for marketing in a digital era. European management journal, 32(1), 1-12.
Ryan, D. (2016). Understanding digital marketing: marketing strategies for engaging the
digital generation. Kogan Page Publishers.
Zettelmeyer, F., & Merkley, G. (2017). CDK Digital Marketing: Addressing Channel
Conflict with Data Analytics. Kellogg School of Management Cases, 1-11.