Optimizing B2B Sales Strategies in the Western European Automotive Industry through a Value-Based Selling Approach
: The Integration of Total Cost of Ownership in Combination with a Life-Cycle Analysis

  • Fabian Jarz

Student thesis: Master's Thesis

Abstract

Problem Definition – Value-based selling, VBS, is commonly employed by companies to sell their value, such as services. However, that needs a deep understanding of the customer. Additionally, the presented value needs to be designed to offer a positive impact. There are several tools in VBS. Two instruments are the total cost of ownership, TCO, and life-cycle analysis, LCA. However, while the importance of TCO is recognized, its complexity and the cost factors differentiating in the automotive industry between internal combustion engine vehicles, ICEVs, and electric vehicles, EVs, make successful implementation challenging. Another impact factor is the change in the industry and the competitors from abroad. Similarly, LCA is gaining prominence due to the growing demand for environmentally friendly production. Yet its complexity and the lack of comparable metrics pose significant difficulties, which is paramount when comparing ICEVs to EVs. Methodology – This research integrates both a literature review and an empirical study. The literature review offers a thorough analysis, comparison, and reflection on VBS, TCO, LCA, and the differences between ICEVs and EVs. The extent of research forms a foundation for further empirical investigation of these subjects. Consequently, the study employs a qualitative research approach, conducting five interviews with experts working in business to business, B2B, sales at German automotive manufacturers. Thus, this approach facilitates a deeper understanding of the topics. In addition, the study provides a thorough exploration of the research questions posed in this thesis by analyzing the data accumulated from the in-depth interviews and comparing those with the literature review. Findings and Implications – The findings indicate that the initial purchase price is still the most impacting factor. Despite that, TCO is a vital part. When creating financial models, services and maintenance should be considered, especially regarding electric vehicles, because they need less. Hence, the TCO is lower. Additionally, it is crucial to establish trust through in-person interactions, clarify complicated information, and effectively communicate the advantages of TCO. Lastly, the impact of government incentives, such as subsidies, should never be underestimated. Explicitly, for EVs, the sales are that high because of that. Compared to that, the growing significance of sustainability, though it is not as noticeable in B2B, requires LCA implementation into corporate strategies. That begins in material procurement and ends in the disposal of the vehicle. In addition, embedding LCA into the key performance indicators, KPIs, ensures environmental responsibility, which positively impacts the financial rating of the seller. It is also paramount to simplify and communicate the benefits and data reliability since it is the biggest issue. Lastly, incorporating LCA in the research and development process reduces the environmental impact even more. Hence, regulatory risks are also minimized. That is especially essential in the production phase of batteries because of their tremendous impact on the environment.
Date of Award2024
Original languageEnglish
SupervisorRobert Füreder (Supervisor)

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