Title: Volvo Trucks' Customer Value Proposition

Authors: Ekaterina Storubleva, Gregor Milosch, Christian Neumann

Tutor: Erik Hunter

Date: May 2009

Keywords:

Volvo Truck Corporation, truck industry, customer value, value drivers, retail strategy, communication, relationship marketing

Purpose:

The purpose of this thesis is to evaluate the general composition of Volvo Trucks' customer value proposition in Europe and to examine possible ways of enhancing it using Volvo's retailing strategy as a tool.

Background:

The concept of customer value gains more and more importance in modern companies. Firms have to truly understand what their customers expect in order to provide the right products for them.Truck manufacturing is a very cyclical industry, which is why in times of crisis, when trade volumes go down, they need to excel even more in order to maintain good business relations with their customers. Volvo Trucks, one of the world's leading truck producers, has adopted a special retailing strategy, in which it owns strategically important dealerships, in order to improve customer understanding and consequently customer value. This paper discusses in how far they succeed at this.

Method:

The authors followed a triangular approach, combining quantitative and qualitative research. The quantitative part was covered by a communication chain study and a value driver study, both developed by the authors. In the qualitative part, each participant answered ten open questions, which were then used for internal consistency checks and contributed additional thoughts.

Conclusion:

The Volvo Truck Corporation (VTC), by adapting its retail strategy, realized the importance of establishing long-term customer relationships and generating adequate intelligence about customer needs. The company not only incorporated influential elements of relationship marketing but also strives for sustainable improvements in customer-perceived value. However, some conflicts between the stakeholder groups involved have been discovered. The corporation's core values were found to be in line with customer preferences.

In essence, it is crucial for Volvo Trucks to implement the ideas of relationship marketing, establish superior communication channels, and to promote a common understanding of customer value.