**4. Findings of customer satisfaction and loyalty research in area of automotive**

The Net Promoter® concept is protected by copyright. A whole range of variants of these metrics and systems was created, mainly in the USA. The NPS concept has gradually become accepted throughout the world and is now also beginning to be accepted in the Czech Republic. Net promoter score (NPS) metrics create a precondition for the observation of customer value, that is, segmentation according to satisfaction. Working with customer segmen-

Experience shows that NPS is extremely useful for internal benchmarking; for example, the evaluation of vendors for trade and services companies, including car dealers, but also in the manufacture of products for one specific brand, which is particularly valid in the automotive industry. Organizations achieving high NPS values display the great importance of customer and employee loyalty for business success, as stated by Owen and Brooks [21]. Neumaierová and Neumaier [17] also discovered that NPS as the only indicator does not put customer and company employee into opposition. The metrics have an especially positive influence on corporate culture and the creation of a trusting atmosphere in the customeremployee relationship, creating conditions for sharing tacit knowledge. NPS metrics can also

**3. Corporate performance customer-oriented as a precondition for** 

Instability and unpredictability of the globalized business environment affect to approach of enterprise to processing and formulating strategy. The basic requirement for companies is flexibility and readiness to environmental changes. The motivation for company management and employees is the question of ensuring the continued existence of the company in

A basic requirement of managers must be the ability to recognize and respond quickly to change. Global interconnectedness, the rate and intensity of change, speed and strength of the crisis respective spreading throughout the world, should not lead the belief that strategy has become useless under these conditions. On the contrary, it appears that most failures are due

Timeless factors of strategic management can be summarized in three basic areas as follows: • *be successful*—compare regularly with the competition on the principles of benchmarking, • *satisfied and loyal customers are fundamental to success and creating value for a company*—regular analysis of expectations of stakeholders, including measurement of customer satisfaction, • *follow main direction of competitive* fight and specify the direction of company's strategic

It is, as is strategic management, focused on the future. Strategic controlling is able to focus on the near and long-term future and uses its tools to track changes, crucial for a new strategy.

tation is its greatest significance.

146 Corporate Governance and Strategic Decision Making

**strategic growth**

the long term.

development.

to lack of strategic management.

be used for research into B2B relationship satisfaction.

#### **4.1. Characteristics of the automotive industry from the perspective of Czech Republic**

The automotive industry is one of the world's most developed industries. Under the influence of changes over the last decade, mainly in context of the current global economic crisis, it has on the one hand brought about a high level of individualization, corresponding to the needs and wishes of the customer, but with the emphasis on quality and increases in production efficiency by cost saving on the other. Pollution from road traffic also sets limits for production development; ways to replace and overcome these limits are being sought. All this is in conflict with industry economic performance parameters.

Automotive production in the Czech Republic has specific circumstances. It has a long tradition, including qualified and cheap labour. From a global point of view, Czech automotive production is in 13th place, and in terms of the number of automobiles produced per thousand inhabitants, shares first place with Slovakia [22].

It is, therefore, logical that the automotive industry has become the backbone of the Czech economy. The consequence, however, is greater vulnerability in the current subsiding global economic crisis. From the perspective of the small open economy of the Czech Republic, it is apparent that automobile production is mainly intended for export. Other specifics of the market in the Czech Republic include a relatively high frequency of used cars, and their age, which was approximately 14.5 years in 2014 [23].

Dealers are customers of the automotive manufacturers in the B2B relationship. To sell automobiles to the final consumer, the manufacturer uses a distribution network of brand vendors outside its organization structure who also enable sales cost optimization. However, the manufacturer lacks a relationship with the final consumer on the B2C basis, which can create obstacles for management, regarding the value for the customer. Therefore, building a trustbased relationship built on identifying the image of the product, in this case an automobile, with the brand, plays an important role.

The term original equipment manufacturer (OEM) can be found in the automotive industry. It is used for manufacturers of products (automobiles) assembled from parts produced by different manufacturers. In the Czech Republic, the carmaker TPCA in Kolín, who uses the same chassis to assemble automobiles in the business-class mini for Toyota, Citroën and Peugeot, which compete with each other on the car market, can be included in this production method. Moreover, the production of Hyundai cars in Nošovice in the Czech Republic can be termed as OEM. Škoda Auto Inc., in Mladá Boleslav is the only fully fledged automobile manufacturer in the Czech Republic. It is a company with a great tradition of its own research and development centre, engine production, and providing staff education at its own training facility.

The whole chain of the supplier-customer relationship creates added value, which in turn influences the total cost and selling price of the automobile to the final consumer [24]. Material, component and part suppliers—an external group with a great influence on manufacturer performance—play an important role in the automotive industry. They significantly contribute to the total-added value of automobiles, of which around 50% is materials, components and parts for automobile production. Quality and cost are attributes through which the supplier significantly mirrors manufacturer performance and customer satisfaction. This B2B relationship is, therefore, seen not only by purchasers (OEM), but also by the suppliers themselves.

The automotive industry is a sector typically characterized by a relatively long product life cycle. '*Each product is subject to its life cycle, at the end of which it must leave the market and yield its place to a new product*', stated by Tomek and Vávrová [25]. From the current point of view, the life cycle of the product is significantly reducing. This is mainly due to the impact of new discoveries and technologies enabling continual improvement and changes to the product. The lifespan of the product is usually depicted using a product lifespan curve. Its course is not determined by product behaviour, but by the impact of numerous marketing tools, including the influence of other socio-political factors.

The classification of automobiles by class was introduced for reasons of client segmentation. Thanks to this, manufacturers and their organizations can easily define the status of individual models on the market and compare sales performance with comparable competitors. Classification also serves the final consumer for the comparison of different automobile brands during the purchasing decision-making process. An essential precondition for the determination of market position is in the competitive environment of the automotive industry.

The proposed corporate performance management model is based on a situational analysis of the Czech automotive industry. Results from research into the purchase behaviour of Czech automobile customers-consumers (B2C) are used as the data source for measuring satisfaction using the net promoter score (NPS). Measured NPS values are then used to simulate company performance on the basis of the EVA indicator and for the creation of a model.

From the sale categorization point of view, the automobile is a so-called special commodity, which is chosen thoroughly at length by the consumer, who considers and compares before deciding to buy. Besides the qualitative and technical parameters of the car, image and brand are also very important criteria for the choice. The customer-product-performance relationship is essential for the creation of a model. If the price of the product represents revenue, and quality denotes cost, then these variables can also represent the connection between company performance and customer satisfaction.

Findings on some aspects of the supplier-purchaser (OEM) relationship B2B in the automotive industry obtained through guided interviews with company managers engaged in automotive glass production take the character of qualitative research.

Understanding the changes caused by the current unstable global environment should help to adjust the business model to shifting external forces. The environment in which a company works can, according to Osterwalder and Pigneur [26], be seen as a 'certain space' of the design, respectively, a certain context, in which the business model is being created. It is influenced by customers, new technologies, competition and other factors including legislation and regulations [17]. This view allows for a better understanding of how the company works, what it needs to function successfully and, at the same time, ensure stable performance growth for the interest groups around it. This model was used as a part of the situation analysis of the Czech automotive industry, the aim of which was to uncover performance growth factors in relation to the behaviour of the Czech customer and owner (user) of the automobile. The results of the situation analysis of the current state of the automotive industry in the Czech Republic and its position on the market according to Osterwalder's model are documented in **Figure 7**.

component and part suppliers—an external group with a great influence on manufacturer performance—play an important role in the automotive industry. They significantly contribute to the total-added value of automobiles, of which around 50% is materials, components and parts for automobile production. Quality and cost are attributes through which the supplier significantly mirrors manufacturer performance and customer satisfaction. This B2B relationship is, therefore, seen not only by purchasers (OEM), but also by the suppliers themselves.

The automotive industry is a sector typically characterized by a relatively long product life cycle. '*Each product is subject to its life cycle, at the end of which it must leave the market and yield its place to a new product*', stated by Tomek and Vávrová [25]. From the current point of view, the life cycle of the product is significantly reducing. This is mainly due to the impact of new discoveries and technologies enabling continual improvement and changes to the product. The lifespan of the product is usually depicted using a product lifespan curve. Its course is not determined by product behaviour, but by the impact of numerous marketing tools, including

The classification of automobiles by class was introduced for reasons of client segmentation. Thanks to this, manufacturers and their organizations can easily define the status of individual models on the market and compare sales performance with comparable competitors. Classification also serves the final consumer for the comparison of different automobile brands during the purchasing decision-making process. An essential precondition for the determina-

The proposed corporate performance management model is based on a situational analysis of the Czech automotive industry. Results from research into the purchase behaviour of Czech automobile customers-consumers (B2C) are used as the data source for measuring satisfaction using the net promoter score (NPS). Measured NPS values are then used to simulate company

From the sale categorization point of view, the automobile is a so-called special commodity, which is chosen thoroughly at length by the consumer, who considers and compares before deciding to buy. Besides the qualitative and technical parameters of the car, image and brand are also very important criteria for the choice. The customer-product-performance relationship is essential for the creation of a model. If the price of the product represents revenue, and quality denotes cost, then these variables can also represent the connection between company

Findings on some aspects of the supplier-purchaser (OEM) relationship B2B in the automotive industry obtained through guided interviews with company managers engaged in auto-

Understanding the changes caused by the current unstable global environment should help to adjust the business model to shifting external forces. The environment in which a company works can, according to Osterwalder and Pigneur [26], be seen as a 'certain space' of the design, respectively, a certain context, in which the business model is being created. It is influenced by customers, new technologies, competition and other factors including legislation and regulations [17]. This view allows for a better understanding of how the company works, what it needs to function successfully and, at the same time, ensure stable performance growth for the

tion of market position is in the competitive environment of the automotive industry.

performance on the basis of the EVA indicator and for the creation of a model.

motive glass production take the character of qualitative research.

the influence of other socio-political factors.

148 Corporate Governance and Strategic Decision Making

performance and customer satisfaction.

An online questionnaire survey for users of car was a source of primary data for calculation of satisfaction and loyalty using the net promoter score (NPS) metrics. Measured NPS values showed above-average satisfaction with the cars owned by the respondents. The research also included an analysis of the attributes of overall satisfaction with an automobile, using the philosophy of the three-layered product, the structure of which is demonstrated in **Figure 8**.

**Figure 7.** Growth factors of performance in the automotive industry. *Source*: Authors' own adaptation.

**Figure 8.** The automobile as a three-layered product. *Source*: Authors' own adaptation.

Respondents rated their satisfaction with their cars in terms of utility value and customer value the two layers related to automobile manufacturers—as being above-average. Dissatisfaction, however, was related to the third layer, the so-called total product, related to services. The third layer of the product, also reflecting the car dealer's image and culture, shows their share in the forming of the end customer's relationship with the automobile brand in terms of loyalty.

The customer gains more and more importance when strong competition is included. Companies, therefore, endeavour to gain loyalty. The position of a loyal customer can more reliably determine future attitudes and purchase behaviour. In the research, a loyalty analysis of the automobile owned by each respondent was carried out. From a scientific point of view, emotional loyalty is based on the customer's attitude towards the brand and how much they like it. It seems that in the relation to their own car, the respondents expressed emotional loyalty, given by attitudes towards their favourite brands, in contrast to the behavioural loyalty related to the repeated purchase of a brand and its recommendation, desirable for the growth of company performance. The qualitative research also studied the relationship between loyalty and the quality of the automobile brands. The evaluation showed how high the respondents considered the quality of German automobiles. This fact probably also explains the immense loyalty towards German brands, according to NPS values.

The professional community equates customer loyalty to a higher level of satisfaction, with a higher tolerance towards price increase. But this was not proved by the research. The respondents' answers, on the contrary, showed a high sensitivity to price, which is in contrast to the measured NPS values for loyalty. From the discrepancy in loyalty evaluation in relation to price, it may be inferred that behavioural loyalty, leading to repeated car purchase, probably does not play a large role as expected in the purchase decision-making process. The verbal accounts, however, send a signal to automobile manufacturers and vendors on the Czech market: if the car utility value were better, even the Czech customer would be willing to pay more. Tolerance for a higher price of a favourite car brand is linked to the expected value in the core and secondary layers of the product.

It is important to know the correlations between satisfaction, loyalty and individual associated factors for the creation of a proposed model. Factors such as satisfaction and loyalty can reflect perceptions and feelings associated with a product. From the customer value point of view, the respondents attached great importance to quality and safety, evidenced by the strong correlation to total satisfaction. The third layer, services, is a weakness of the automobile as a product.

Respondents rated their satisfaction with their cars in terms of utility value and customer value the two layers related to automobile manufacturers—as being above-average. Dissatisfaction, however, was related to the third layer, the so-called total product, related to services. The third layer of the product, also reflecting the car dealer's image and culture, shows their share in the forming of the end customer's relationship with the automobile brand in terms of loyalty.

The customer gains more and more importance when strong competition is included. Companies, therefore, endeavour to gain loyalty. The position of a loyal customer can more reliably determine future attitudes and purchase behaviour. In the research, a loyalty analysis of the automobile owned by each respondent was carried out. From a scientific point of view, emotional loyalty is based on the customer's attitude towards the brand and how much they like it. It seems that in the relation to their own car, the respondents expressed emotional loyalty, given by attitudes towards their favourite brands, in contrast to the behavioural loyalty related to the repeated purchase of a brand and its recommendation, desirable for the growth of company performance. The qualitative research also studied the relationship between loyalty and the quality of the automobile brands. The evaluation showed how high the respondents considered the quality of German automobiles. This fact probably also explains the

The professional community equates customer loyalty to a higher level of satisfaction, with a higher tolerance towards price increase. But this was not proved by the research. The respondents' answers, on the contrary, showed a high sensitivity to price, which is in contrast to the

immense loyalty towards German brands, according to NPS values.

**Figure 8.** The automobile as a three-layered product. *Source*: Authors' own adaptation.

150 Corporate Governance and Strategic Decision Making

**Figure 9.** Automotive industry strategic corporate performance management model. *Source*: Authors' own adaptation.

#### **4.2. Model of strategic corporate performance management and its parameters**

The presented strategic corporate performance model is set in the environment of so-called 'performance architecture' which integrates controlling, balanced scorecard and activitybased costing. The use of the net promoter score (NPS) for the company performance model is based on customer segmentation, embodied in the very metrics. A proposed corporate performance management model for the automotive industry is shown in **Figure 9**.

The feedback is based on the passive customer segment, through which the improvement of automobile parameters and a transition in satisfaction evaluation into the sympathizer group can be attempted. The bond to the product—the automobile—presented according to Leeflang's theory as the summarization of the attributes of customer satisfaction in its three layers is an important part of the evaluation. In this regard, the attributes with which the customer connects their satisfaction are the moving forces. The price-quality relationship is firmly embedded in the performance-oriented system of the automotive industry management and its strategic orientation. This relationship is very important for customer orientation, but challenges their expertise. '*At a certain point, the customer no longer sees quality increase as an important precondition for paying a higher price for the product*' [12].
