A research report submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, in partial fulfilment of the requirements for the degree of Master of Management in Strategic Marketing Johannesburg, 31 March 2016 / The purpose of this study was to understand the impact of sales staff turnover on customer equity in the South African luxury automotive industry. The concept customer equity has three elements that load onto it, namely; value equity, brand equity and relationship equity. For the purpose of this study, the focus was on relationship equity as this is the one customer equity element that the Sales Executives are able to influence. Rust, Zeithaml, and Lemon (2001) are of the view that customer equity drivers vary in importance for different industries. In relationship orientated industries (e.g. banking and automotive industry), relationship equity may be the most important driver of customer equity. Relationship equity is also known as retention equity as it entails the customers conscious decision to stick with a certain brand even after having conducted thorough research and analysis of other brands (Lemon, Rust, & Zeithaml, 2001). The study used a quantitative research method and the data is founded on the results from 73 surveys received from customers who own luxury vehicles, namely Audi. The data was analysed utilising multiple regressions, using the independent t-test to accept or reject the proposed hypotheses. Understanding the impact of sales staff turnover on relationship equity in the automotive sector is critical as this industry currently suffers from very high Sales Executive turnover. Original Equipment Manufacturers and dealer management need to understand the impact of this high staff turnover on the customers and ultimately potential future sales so that they may be able to mobilise effective strategies to minimise any negative impact caused by sales staff churn. The theoretical framework for this study is taken from a model by Vogel, Evanschitzky, and Ramaseshan (2008), which looks at the 3 drivers of customer equity and how these drivers effect customer loyalty intentions and future sales. This study found that sales staff turnover has a strong, significant relationship to relationship equity, meaning that sales staff turnover negatively affects relationship equity for the organisation, and therefore negatively affects the customer experience. / GR2018

The South African Automotive industry has been one that has enjoyed the subsidies schemes like the Motor Industry Development Program (MIDP), and in the near future the Automotive Production Development Program (APDP). There are however different schools of thought when it comes to subsidies for an industry. One is that there should be no incentives when others are for the schemes, which one is best for the growing economy of a young democratic and highly unemployed nation? Looking at the next planned incentive scheme to be introduced to replace the MIDP, the APDP is it better than the MIDP? How are these schemes going to benefit the country in the future and will they exist for as long as we have the Auto industry in South Africa? The objective is to prompt those in political power and positions capable of influencing infrastructure changes to think long term when making decisions today that will affect future generations. Future generations should be able to benefit from future technologies of the day and not be hindered by the lack of improved and capable infrastructure.

The South African leather industry has undergone a significant transformation since the 1990’s and this can be attributed primarily owing to two major factors that occurred. The first being trade liberalisation, which meant the fall of trade barriers, and the second being the Motor Industry Development Programme (MIDP), which was implemented in South Africa on 1 September 1995. The MIDP was implemented in the context of the country’s political and economic liberalisation, and the major structural shift in government policy and the trade regime. South Africa became much more globally integrated and the South African leather industry benefited because of this, as well as the incentives that was offered under the MIDP. Automotive exports of stitched leather seat parts responded positively to the incentives offered under the MIDP and stitched leather seat parts, as a component under the MIDP, became one of the best performing components being exported from South Africa. The MIDP had been terminated at the end of 2012 and is now being followed by government’s latest rendition of automotive policy, namely the Automotive Production and Development Programme (APDP). The APDP focuses on value addition, which pursues beneficiation of the country’s raw materials to the final stages, to ensure maximum benefit to the South African economy. The findings of the study entail that the South African leather industry is now in a vulnerable state because of the new automotive policy. This is mainly because the APDP does not provide the same level, or type, of incentives that the MIDP had provided to the industry. / Business Management / M. Com. (Business Management)