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Ford

Ford

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ORGANISATION Ford Motor Company is an American multinational corporation and the world's third largest automaker based on worldwide vehicle sales. Based in Dearborn, Michigan, a suburb of Detroit, the automaker was founded by Henry Ford and incorporated in June 16, 1903. Ford now encompasses many global brands, including Lincoln and Mercury of the US, Jaguar and Land Rover of the UK, and Volvo of Sweden. In 2007, Ford became the third-ranked automaker in US sales after General Motors and Toyota, falling from the second-ranked automaker slot for the first time in the previous 56 years. Ford was also the overall seventh-ranked American-based company in the 2007 Fortune 500 list, based on global revenues in 2006 of $160.1 billion.[5] In 2007, Ford revenues increased to $173.9 billion, while producing 6.553 million automobiles and employing about 245,000 employees at around 100 plants and facilities worldwide. Ford came to India in 1998 with its Ford Escort model, which was later replaced by locally produced Ford Ikon in 2001. It has since added Fusion, Fiesta, Mondeo and Endeavour to its product line. They have so far covered 24 states in the country. In Mumbai , they have 7 dealers,Bhavna Ford at Nerul being one. Presently they offer 4 vehicles in Bhavna Ford-Ikon,Fiesta,Fusion,Endeavour with the Mondeo being awaited to be relaunched. This project primarily focuses on the product positioning strategy as implemented by Ford India as well as Bhavna Ford. At the same time, the aspects of the dealer like awareness factor has also been studied with a Market Research, conducted by us,students of 1st Year MMS. PRODUCTS CHARACTERISTICS Ford India has categorized its vehicles in 2 segments mainly-passenger vehicles and sports utility vehicle. In the passenger category are1. Fiesta 2. Ikon 3. Fusion The sports utility vehicle, SUV segment has one vehicle to offer as of now in IndiaEndeavour. Bhavna Ford as well deals in these 4 vehicles presently. In SAMBHAV ’08, they displayed Ikon and Fiesta. Now let us have a detailed look at the characteristic

features, added advantage and overall specification data of these all vehicles in a sequential manner. FIESTA The Ford Fiesta is a mid-class supermini car designed and built by the Ford Motor Company in Europe It is one of Ford's most successful cars with over ten million sold in seven distinct generations since 1976 and production continues as of 2007, with an eighth generation expected during 2008. Fiesta comes in five models. They are Fiesta 1.4 Duratec EXI, Fiesta 1.6 Duratec ZXI, Fiesta 1.6 Duratec SXI, Fiesta 1.4 Duratorq EXI, Fiesta 1.4 Duratorq ZXI The characteristic features of this presently most popular car of ford areSAFETY Probably this is the second most appealing factor for Ford Fiesta apart from fuel efficiency. Fiesta is put through the most stringent Ford safety standards that check s for front & rear crashes and fuel system integrity.
• • • •

ABS (Anti-Lock Brake System) with EBD-EBD determines the load condition on the front and rear axles Dog Test-Low-speed frontal impact with obstacles is a common feature in India Distance to Empty (DTE)-The DTE displays the estimated distance the vehicle can travel before it runs out of fuel Air Bag-The driver is protected by Driver side air bag

TECHNOLOGY

Dura Technology-Dura Technology is a world-class revolutionary petrol and diesel engine technology patented by Ford. It makes the Fiesta more refined, more exciting to drive and more economical to run or DuraSmooth, DuraVrooom and DuraSave as we prefer calling it. Power Control Module (PCM)-A newly designed PCM is standard in Fiesta for improved refinement, lower fuel consumption and reduced emissions General Electronic Module (GEM) Imagine Generic Electronic Module as a super computer that controls engine diagnostics

ENGINE

Engine specifications for Fiesta models are given below. Feature Fiesta 1.4 Duratec EXI Cyllinder head Aluminium & Block Alloy Type 4 Cyl. In-Line, 16-V DOHC Fuel system SEFI Displacement (cc) Compression Ratio Max. power (ps/rpm) Max. torque (nm/rpm) Emission 1388 9.75 : 1 82 / 6000 127 / 4000 Bharat Stage III Fiesta 1.6 Duratec ZXI Aluminium Alloy 4 Cyl. In-Line, 16-V DOHC SEFI 1596 9.75 : 1 101 / 6500 146 / 3400 Bharat Stage III Fiesta 1.6 Duratec SXI Aluminium Alloy 4 Cyl. In-Line, 16-V DOHC SEFI 1596 9.75 : 1 101 / 6500 146 / 3400 Bharat Stage III Fiesta 1.4 Duratorq EXI Aluminium Alloy 4 Cyl. In-Line, 8-V SOHC High Pressure Common Rail 1399 18 : 1 68 / 4000 160 / 2000 Bharat Stage III Fiesta 1.4 Duratorq ZXI Aluminium Alloy 4 Cyl. In-Line, 8-V SOHC High Pressure Common Rail 1399 18 : 1 68 / 4000 160 / 2000 Bharat Stage III

Apart from these features mention should be made of the exceptional fuel efficiency of this car. Registered in The Limca Book of World Records(32km/ltr), fiesta diesel version gives mileage upto 25km/ltr under standard conditions, while the petrol version too gives a handsome mileage of 18km/ltr. IKON Ford’s Ikon is a part of their cross cultural marketing in India. Their initial offering, escorts was replaced by Ikon, which is meant and so manufactured in India only. The USP of this car lies in the fact that it has a pick up which is superior to any car of its midclass segment. That may have been the reason for the car being called as the Josh Machine. So high was the pick up for Indian market that it had to be replaced with the Ikon Flair,compritively having a lesser pick up. The salient features of this car are as follows. SAFETY Thanks to Ford's highly developed Dynamic Safety Engineering (DSE) program safety becomes a standard with every Ikon. Some key safety features include side impact beams, crumple zones, a monocoque body and the latest in occupant restraint systems.The Ikon complies with Ford's European antitheft protection strategy of using a

multi-faceted approach to vehicle security. This includes the following elements on all the Ikon series:
• • • • •

High security lock sets, for doors and boot lid Steering column lock Spare wheel, mounted inside the boot Remote locking fuel filler cap connected to central locking Child Locks

TECHNOLOGY The 1.3L ROCAM engine is derived from the new Ford SOHC engine family that is efficient, reliable and extremely robust. ENGINE The engine specifications of Ikon are as follows. Engine Feature Engine Displacement (cc) Max. Power (ps/rpm) Max. Torque (nm/rpm) Cylinders Emission level Fuel Injection Ikon 1299 70 PS/5500 105/2500 4 in-line Bharat Stage III SEFI

As a young icon, you believe in nothing but the best. Expect nothing less of the young Ikon either. Its fuel-efficient ROCAM engine delivers pure exhilaration behind the wheel. Its smooth performance and responsiveness makes driving in the city or cruising down highways a breeze. DESIGN FIESTA Ford Fiesta's robustly well-proportioned powerful stance is born out of cutting edge Ford design and gives the car its sporty, purposeful presence. Front View-The Fiesta front design leaves a bold, strong impression with a high level of sophistication. The large, functional twin headlamps with integrated turn signal lamps creates identity and a sense of authority. Fog lamps in the

lower bumper gives the car a low sports feel and the surrounding chrome ring emphasizes prestige and individuality.

Side View-Fiesta makes a bold, strong, side view statement that enhance it's
sense of purpose and powerful appearance. Rear View-The high boot not only adds to the side view stance of the car. Modern and contemporary tail lamps convey a statement of practicality and safety, and add a touch of sophistication and elegance. Interiors-The Fiesta's interiors has black and beige two-tone environment with a wide choice of premium leather or fabric upholstery. Add to this a bright and modern instrument cluster and luxurious silver finishes. There are intelligent spaces everywhere inside the Fiesta - a trinket tray, ashtray, a penholder and cup holders on door boards and rear seat armrests. Created with the disciplines of Ford's shared technology approach, a core team of Indian engineers worked with product development teams from UK, Germany and Australia on the project. 2/3 of the Fiesta has actually been designed specifically to suit Indian consumers.

EXTERIOR Feature Twin jewel effect headlamps Integrated turn signal lamps in headlamps Chrome bezel on Fog lamps Radiator Grille Surround Driver and passenger mirrors Grip type door handles Body Side protection Moulding Dual reversing lamps Fiesta 1.4 Duratec EXI Black Surround S Body Colored Black Black S Fiesta 1.6 Duratec ZXI Chrome Surround S Chrome Body Colored Body Colored Body Colored S Fiesta 1.6 Duratec SXI Chrome Surround S S Chrome Body Colored Body Colored Body Colour with Chrome insert S Fiesta 1.4 Duratorq EXI Black Surround S Fiesta 1.4 Duratorq ZXI Chrome Surround S -

Body Colored Chrome Black Black S Body Colored Body Colored Body Colored S

Decklid Handle Turn indicator on outside rear view mirror IKON

Black -

Body Colored -

Chrome S

Black -

Body Colored -

Chassis Design-The Ikon's stiff body structure plays a key role in isolating ride comfort and running refinement. The rigid supporting platform helps in keeping noise, vibration and harshness to minimal levels. Stability and instinctive controllability have been built into the chassis system to provide maximum vehicle control. Ikon Handling-An optimised suspension design, a balanced chassis and sharp steering precision, make the Ikon a fun machine to drive. Thanks to its superior handling you can enjoy the ultimate drive experience peacefully.

Ikon Comfort & Convenience-The Ikon's compact exterior is, in fact, wrapped
around a highly comfortable interior. Plush seats, ample headroom, a wide choice of stowage locations and an eye for convenience transform the interiors into a highly desirable place to be in. The Josh Machine has been optimized to match local driving conditions, with a strong emphasis on durability and minimal requirements for maintenance. EEC V Module-The latest generation of Ford's electronic module known as EEC V controls the three engines that power the Ikon. The electronic module has been fitted on Ford's European engines and has been tested extensively on Formula 1 Grand Prix racing cars. This advanced engine technology helps in fuel economy, smooth engine operation, low emission & quick fault diagnosis.

PRICING STRATEGY Of all the elements in the marketing mix, price is the only one that generates revenue. The other elements generate only cost. It also is the most important determinant of the profitability of any company or business. Competition in the market contributes the maximum to the importance of pricing. It is a highly risky decision area, wherein any mistake in pricing adversely affects the company, its profit, growth and future. Ford india also has implemented their own pricing strategy which is more of the Demand/market-based pricing oriented. This we will discuss in details, but before that let

us have a look at the prices being offered by the competitors in Mumbai/Navi Mumbai.

BASIC MODEL TOP 812500 867,800 MODEL

FIESTA HONDA HYUNDAI CITY VERNA 596500 682,800 656891 867750

MARUTI HYUNDAI SX4 ACCENT 665200 558047 771200 -

CHEVROLET OPTRA SRV 640000 999840

Initially when Fiesta was launched in 2005, it was highly priced at Rs.6 Lacs. At that time, the competitive brand were Accent and Esteem, which were priced much lower. However, the present scenario is totally different. From the above table, a comparison of the price of Fiesta with its nearest competitors show that it is priced much lower now, in both basic versions as well as top end models. Since 2005, various competitors have entered the C segment and the prices has also gone up with changing time. However Fiesta has instead brought down its price, after skimming the market with high price and eventually high profit. This is a typical example of skimming pricing strategy. If we elaborate further, it’s a rapid penetration strategy, since the promotion was comparatively high and much hyped. In the list are featuring SX4 which doesn’t have the petrol version. Also Accent has now only model Gle. POSITIONING A product’s position is the complex set of perceptions, impressions and feelings that consumers hav for the product compared with competitive brands. Positioning involves implanting the brand’s unique benefits and differentiation in customer’s minds. Ford India initially had entered the market with Escorts, in 1995 and was one of the first international brand to enter the midsize sedan market. Ford Ikon was launched in the event of phasing out of Escort. Since then Ikon has been a major player in the entry level sedan market with a share of over 20%. The most interesting aspect of the brand is in its positioning. Ikon dethroned the position of Esteem in the C segment through its breakaway positioning. Till 2005 Ikon has sold over 100,000 cars and has occupied a special space in the highly competitive car market in India. Ford Ikon is actually an Indian adaptation of the highly successful European Fiesta model. But knowing the Indian market with the Escort example, the company decided to design and Indian car for

Indian consumers. Thus born the brand Ikon. The company virtually adapted the whole product to suit the Indian consumer taste and also Indian driving conditions.Ikon was one of the first examples of Global brand getting Local in the automotive industry. Ikon was priced as an entry level sedan car and was positioned in the C segment. C segment was dominated by Esteem and there was a slew of competitors waiting to tap the market including Hyundai Accent. Most of the purchases in this segment was rational and the brands were also positioned on rational platforms. Ikon wanted to break the icons and decided to do away with the demographic positioning. Research and initial test marketing showed that Ikon is associated with the Attractive and Peppy attributes. The company decided to position the brand as a lifestyle brand. The TG was decided to be young professionals who works hard and play hard who are Full of Life and Affluent. This brand is the classic case of lifestyle segmentation. Ikon had the sporty design and all the pep that a sporty car needs interms of engine capacity and performance. The agency hit upon the big idea of positioning the brand as the Josh Machine.I think the tagline JOSH Machine is one of the best taglines I have come across. Although the term Josh is hindi Josh term had a universal appeal across India. Although some of the ads were lousy, the product delivered the promise. The Brand clearly identified the TG and Josh satisfied the need for a sporty sedan ( that need is still there). Indian Yuppies lapped up this product and the brand which suffered most because of Ikon was the Maruti Esteem.Ikon was priced between Rs 5.5 lakh and 6 lakhs.The brand broke from the rational positioning into a more emotional plane.The brand had the famous tagline " The Josh Machine " which was later modified to " Live Life with Josh". The brand hit a rough patch in 2003 with competition hotting up. The launch of Indigo changed the dynamics of the C segment. To compete with Indigo, Ikon launched a variant in the sub 5 lakh category with Ford Flair. However, since the launch of Fiesta, the Ikon has lost its way a bit and that is why the company has come up with newer variants like the Icool Music edition to position again with the same youth class. In 2006 Ford launched its Fiesta in the Indian market at a premium over Ikon. According to company reports, Fiesta is positioned as an Aspirational sedan and complements Ikon rather than cannibalise it. Fiesta became a runaway success because of its blockbuster performance. The entire market witnessed a large number of product launches and the competition was carving in to Ford's market. Hyundai with its aggressive marketing was able to beat Ford with their Accent .so Ford decided to fight back

with Fiesta. As usual Ford is also relying on the bollywood stars to sell its car an this time roped in Abhishek Bachchan to endorse the car. However Go Fida was a strange caption, so it will be for the entire south indian market. Josh although it is an Hindi word, south indian languages also have similar words. Marketers should be careful about the positioning statements and its linkages with the market. It is important that they understand a diverse maket like India with 17 odd major languages and million dialects. So does it make sense to have a positioning statement that is simple and could be understood by the target market. Still Fiesta is successful because it offers excellent value for money proposition, the one and only proposition that works in India. COMPETITION Ever since its launch, Ikon had to compete with Accent and Esteem. Now both these cars have been less preferred to their own home brands namely Verna and SX4. So is the case with Ikon which is no more portrayed with the same Josh and the company is now focusing on its Fiesta. However, keeping in mind SX4,Verna and Optra SRV, undoubtedly the biggest competitor of Fiesta is Honda City which is competent in both petrol and diesel versions. So we will have a comparative study of both these brands on some basic parameters Living in The Fiesta represents a world of cars that India was ready to skip thanks to cars such as the City. The instrument console, though it harks back to the nineties, is purposeful. That said, Honda has gone in for no-nonsense instrumentation and ergonomics which make it easier to drive the car. There is a certain feel-good factor about belting up in a Fiesta - it feels solid and you are immediately set for a long drive. If the Honda feels flimsy, it is because it is engineered to be light - the doors click shut in comparison, while the controls are lighter to the touch and feel. Both cars have adequate rear room, with the Honda getting a small advantage thanks to space liberated under the rear seats. Your legs, once folded, can be accommodated better in the City. On the road The Fiesta diesel is modern enough to fool you into believing that you are driving a petrol car - even inside the city. What helps matters in favour of the Fiesta TDCi is the fact that Honda has not given the base City its most powerful engine. The 77 bhp of power and 12.8 kgm torque developed by the 1497cc econo-marvel of a petrol engine ensures that the 68 bhp 1399cc diesel burner of the Fiesta feels more than adequate.

The Fiesta though has the advantage on the torque front, with the diesel motor developing 16 kgm of the stuff pretty early in life. While just about a second separates both in the sprint to 60 kph, by the time the speedo reaches 100 kph in the Fiesta (17 seconds), the City will be a spec on the horizon (13 seconds). Both cars are capable of cruising at a steady 80-100 kmph on highways and it takes a downshift in them before you are ready for an overtaking man oeuvre. Saving fuel The best figure that we have managed with the Fiesta TDCi is 18 kpl on a Mumbai-Pune Expressway run - with the car easily averaging 90 kmph plus. The City, with the IDSi petrol engine, is pretty frugal too and it is not unusual for it to record 16 kmpl on good highways. Inside towns, the Fiesta diesel would still return around 14 kmpl, while the City drops to the 11-12 kmpl mark. That said, our test City recorded 14 kmpl for the suburb-metrosuburb runs - which is pretty impressive. Maintenance The Fiesta apart from its unique fuel efficiency, also counts ahead of City for its low cost of maintenance. Where the City deserves a servicing after every 5000km, fiesta needs the same after 10000km. Dynamic feel The Honda is a fine automobile that will do extremely well on neatly surfaced roads. But as the roads deteriorate, most people who wish well for their cars reduce the speed of their Citys. The Fiesta, on the other hand, offers a more mature ride quality even on potholed roads. In short, the average speed that you carry on a bad stretch of road will be higher with the Fiesta. The finely balanced City can be a tad boring on a nice and winding road while the Fiesta's underpinnings give you the confidence to push the car around corners - which makes it quite fun. Decision time The odds are turning towards economical cars these days, and in the Fiesta TDCi Exi, Ford has a very strong case. Even in the 1st quarter 2006 alone, Honda sold more than 10,000 Citys despite heavy competition. In comparison, Ford managed to do close to 5,000 units. The Fiesta is a contemporary product that drives extremely well and is quite refined for a diesel offering.

So overall we find undoubtedly the Fiesta to be having the edge against the City. However, the launch of Verna and SX4 is yet another threat for the market share of Fiesta. Even the six-year dominance of Honda City, , has been broken by the SX4. According to figures for May 2007, the SX4 (launched on May 7) sold 3,000 units, against 2,838 units by Honda City, hitherto the undisputed segment leader. So the competitive market for for Ford is very much open in terms of Fiesta, provided it performs well compared to the rival cars. RECOMMENDATIONS: The market research conducted by us clearly depicts that as a dealer for Ford, Bhavna Ford has done really well in its short stint till now. People are gradually becoming aware of it not only in Navi Mumbai but also in parts of Mumbai, though scattered. However as students we wish to recommend some measures to capture a better market share in the near future. All these measures, if feasible from Ford’s perspective, and implemented, will certainly benefit them to a great extent. The recommendations are as follows:

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• •

More number of hoardings can be put up in various unexplored locations keeping in mind the budget compatibility aspect. The research shows that hoardings alone comprise of 19% of the customers’ source of awareness, though it can have a bigger share. Advertisements can be displayed on buses and trains, as some rivals dealers have successfully exploited. Sms ads for test drives can be tried. Road shows can be performed in posh areas like Palm Beach galleria in Vashi. Radio ads can be aired between 7-11, the peak hour for listeners across the city. As Ford has some not so positive notion among few customers with respect to maintenance factor, the number of free services can be increased. Free services, freebies, accessories can be offered on purchasal of new car to attract more people Advertisement can be extended to the giant LCD screens in prominent malls. Many potential customers can be explored from there. More intense advertisement can be done with the medium of local TV channel. This also is not a much soughted mode as of now, so possibly can be explored.

We also would like to add once again, all the measures we suggested here are based on our own personal observations and the acceptability is totally in the hands of Bhavna Ford and Ford as a whole. PLC A product’s sales potential profitability changes over time. The Product Life Cycle(PLC) is the course of a product’s sales and profits over its lifetime.

SALES AND PROFITS OVER THE PRODUCT’S LIFE- FIESTA AND IKON IN THE PLC.

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