Marketing Mix and IPT of Ford Motor

Company
Table of Contents

1: INTRODUCTION TO FORD MOTOR COMPANY ............................................................2

2: STANDARDIZATION AND ADAPTATION STRATEGIES OF MARKETING MIX ...2

3: MARKETING MIX STRATEGIES OF FORD .....................................................................2

3.1: PRODUCTS & PRICING STRATEGIES ...............................................................2

3.2: PLACEMENT AND PROMOTIONAL STRATEGIES ........................................3

4: CONCLUSION ..........................................................................................................................4

5: INTERNATIONALISATION PROCESS THEORY UNDERTAKEN BY FORD ............5

5.1: ECONOMIES OF SCALE ........................................................................................6

5.2: UPPSALA MODEL....................................................................................................6

5.3: DIFFUSION OF INNOVATIONS THEORY ..........................................................7

9: REFERENCES ..........................................................................................................................7

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1: Introduction to Ford Motor Company
Headquartered at Dearborn, Michigan, Ford Motor Company is a multinational Public
company. It is based on the last name of its founder – Henry Ford since its incorporation in
1903. The current Chairman is William C Ford and the CEO & President is Mark Fields
(Ford Corporate, 2014a). The basic products of the company are commercial and automobile
vehicles. Among the top brands of the world, it occupied 39th Spot in the 2014 list of Best
Global Brands by Interbrand (Bestglobalbrands.com, 2014). The net income of the company
was around USD7.15 billion in 2013 (Google.com, 2014).

2: Standardization and Adaptation strategies of Marketing Mix

Marketing Mix is the unique blend of 4P’s which are Product, Price, Place and
Promotion. These 4 components of Marketing Mix acts as an essential ingredient in all the
marketing strategies of any company (Lamb, Hair and McDaniel, 2011). International
Marketing mix strategy is to use these 4 P’s in the standardization and/or adaptation in the
markets.
When a standard product is developed and marketed across a nation’s border with
same pricing and distribution strategies, it is standardized marketing mix (Saxena, 2006). On
the other hand is the adapted (adaptation) marketing mix in which the marketing mix
elements is adjusted by the producer in accordance with the target market (Kotler, 2008). It
generally involves more costs but gives high return and market share as well. The products
are differentiated.

3: Marketing Mix Strategies of Ford

Ford is committed in building out the best products for their customers being
environmental friendly and innovative at the same time (Ford Corporate, 2014b). The
Marketing Mix strategy is used by each and every company to promote their brand in the
market. Ford became famous in initiating the low cost family cars in 1932 (Jones, 2008).

3.1: Products & Pricing Strategies

Products are the goods developed on the basis of needs of the buyer and are offered
for sale by the seller (Kalb, 1995).
Being in automobile sector, Ford is highly specialised in creating differentiated
automobiles. Some of the products are Small Cars, Sports Cars, Luxury Cars, Mid-sized Cars,

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Convertibles, Vans, Minivans, Wagons and Trucks (product width of Ford). It also carries a
lot of Brands under it (product length) like Mercury, Volvo, Mazda, Jaguar, Lincoln and
Land Rover (Ford.com, 2014). All these products are targeted to a different segment of
customers and hence are further categorized into different Ford Brand Names on the basis of
their features, colours, size, performance, and style. Ford has always followed the adaptation
strategy based on the targeted customer segment with special consideration to their priorities.
For example: Targeting the customers who like Soccer, Ford had manufactured
various Soccer related sports cars which are appealing to such segment. These cars are
generally made at the time of ‘Soccer Fever’ among people such as UEFA League, Football
World Cup, etc. Because most of such manufacturing requires some rights and other legal
considerations to obtain from the organization, Ford has, from time to time taken the
Sponsorship rights of them (Brand and Niemann, 2007). This had benefited Ford in 2 ways:
Marketing of the Brand Name and targeting the Football Fans (niche market) for their special
cars.
The customer on buying of a product pays an amount, that amount is known as Price.
The pricing policy of any industry such as automobile generally takes all the costs into
consideration as well as the price of the competing / substitute products into a market
(Applegate and Johnsen, 2007).
Company like Ford is well concerned for its pricing strategies across different
markets. The company aims on investing more on sponsorships. Several well known sponsors
are Champions League and The Edinburgh Tattoo (Ford.co.uk, 2014). This investment
involves high costs but gives them favourable returns on the investment through increase in
brand value and media exposures.
3.2: Placement and Promotional Strategies
Ford products are manufactured at North America, South America, Europe, Oceania,
Africa and East, West, South and South East parts of Asia. The company has mainly targeted
itself to the customer segments of those parts of the world where Football is popular (Ferrand,
Torrigiani and Camps, 2007). The continent of Europe stands first among them.
The dealership network of Ford plays a crucial role in reaching the target customers.
With the help of such networks, physical distribution and promotion of the products is
possible widely (Aspray, 2011). The company target both B2B and B2C market segments.
Rational customers do not make a purchase until their satisfaction of the product (Sexton,
2013). When they see, touch, and test Ford’s products, they make a purchase. After the
purchase, timely service is required. For this Ford planned its dealership network

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strategically, especially in European markets where dealers are located within the reach of all
of the customers of the company (ibid). It is one of the largest dealership networks of Europe.
Promotion is the main component of marketing mix. Without it, a product cannot get
even low sales. It can be done through direct marketing, advertising, internet marketing,
personal selling and sales promotion. The message of quality product and persuading services
reaches the customer via promotion. It improves brand credibility and increases sales (Leader
and Kyritsis, 1994).
Ford’s successful market promotion includes many strategies: a) providing special
offers to the customers for a short term b) facility of choosing a vehicle over the internet. The
website is loaded with feature and interactive design to appeal customers c) marketing and
sales team for personal selling d) sponsorship activities, events for boosting relations with
public e) reaching the customers directly by sending them mails about the new vehicles
(direct marketing) (Studer-Noguez, 2003).

4: Conclusion
Since Ford is an international brand, it faces competition not only in its domestic
market, but also at international market. The toughest competitor is Volkswagen. By properly
implementing its adaptation marketing strategies, Ford is able to attain competitive
advantages as most of the people who have their relation to sports, prefer Ford over any other
brand. It concludes that Ford’s strategies stands well against any competition. Being a global
leading brand in the automobile sector, Ford’s marketing strategies are popular all over the
world and servers as an inspiration to its competitors of what an automobile company can
achieve.
Ford’s concept of promotion through sponsorships is common. On of the recent being
the sponsorship of the 2014 film “Need for Speed”. The special part in this film was the car
“2015 Mustang” which was still a secret and was not launched in the market. It was launched
some months after in April 2014 (Release, 2014). It is another example of an effective and
unique marketing strategy.
The dealers of the company are established at appropriate places and so there is
maximum customer satisfaction. The sales and marketing teams are responsible and an
effective brand promotion with sales is the result.
The success speaks for itself. Ford’s success in international market wouldn’t have
been possible without an appropriate and effective strategy by its owners. However Ford is

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likely to receive a tough competition in the future especially from the Japanese companies in
North America. Another thing to consider would be the fuel cost of Sports vehicles. The
resources of the earth are depleting and the price of fuel is likely to increase in the future. It is
possible that the company’s target market from sports sector can move towards a more eco
friendly and cheaper alternative.

5: Internationalisation Process Theory undertaken by Ford

It is difficult for every company to expand itself to the international markets due to
various internal and external environmental factors. The most important are the policies of
the government and determining the needs of the society in the foreign market. Even after the
company begins operating in the foreign market, it is required to increase it’s involvement to
achieve fruitful results. In such cases, internationalisation comes into existence (Susman,
2007).
The owners of the Ford Motor Company were aimed at internationalisation since it’s
formation in 1903. A few weeks after its incorporation, the company launched its joint
venture with a Canadian Firm with a 35% tariff (Shenkar, Luo and Chi, 2014). The task of
the joint venture was to assemble cars across the water from US base in Michigan at
Windsor, Ontario. It was their first step in internationalisation and after a few years the
company managed to have dealers in France, Belgium, Austria, Germany, Poland, England
and Russia (ibid). Now the Ford Motor Company has their plants located globally.
The founder Henry Ford initiated in mass production and lower cost strategies in the
home market and that too at that time when such vehicles were invented not long before. It
had carried a great name for the company, and by 1912, the best selling European automobile
vehicle was Ford’s Model T (Leontiades, 1985). The company unified its European activities
with United States soon after planning out a proposed strategy in 1928. With great success
abroad, Ford Company exercised greater control over the distribution and competition in the
international market and slowly acquired the shares of many companies and expanded its
operations (ibid).
On the basis of above info, following IPTs can be concluded.
1. Economies of Scale
2. Uppsala Model
3. Diffusion of innovations theory

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 5.1: Economies of Scale
This theory is a result of cost advantages which a company gets on expansion. The
output rises and the manufacturing cost per unit decreases (O'Sullivan and Sheffrin, 2003).
The lower cost strategies on international expansion were successful by Ford mainly
because of lower cost per unit of production over its competitors.
5.2: Uppsala Model
Though the first move towards the Canadian market was quick, the company continue
to follow Uppsala Model since then. In this model, the companies gradually occupy the closer
market first, either they are close culturally or by their geographic location. Sales
subsidiaries, dealers and agents play an important role and form a process (Hollensen, 1998).
After expanding its roots to the Canadian market early, the company went on with its
sales subsidiaries and joint ventures to occupy the markets of nearby European countries like
England, Russia, France, Germany, Belgium, Austria, Poland, etc. After having a good share
in these markets, the company’s next target was to go out of continent and occupy more
markets. The company then chose US and expanded itself there as well. In early 1930s the
company manufactured its own plants in the countries with market share and hence occupied
a larger portion of market (Leontiades, 1985).

Manufacturing or
Production

Establishment of Sales
Subsidiaries

Market
Commitment
Export via Independent
Representatives

Role of market commitment

No Regular Export and market knowledge in
Activities Uppsala Model

(Johanson and Vahlne, 2006)

Market Knowledge

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5.2: Diffusion of innovations theory

This theory states the new technologies and ideas which were spread through
innovations. Soon after the invention of first automobile by Carl Benz in 1886, Henry Ford
started his company in 1901. At that time there was not much of an innovation in this
industry and scope of the business was outstanding due to increasing demands. That company
was named as “Henry Ford Company” and in 1903, it became “Ford Motor Company”
(Leontiades, 1985). The company was one of the early adopters in this industry and then
carried its name.

(Rogers, 2014)
Being highly knowledgeable in this industry, Ford followed adaptation strategy to
design the products as per the needs of the particular segment of people. Soon with
expansion, the company moved to the stage of Early Majority of the theory. It’s now been
more than 110 years that Ford Motor Company is in operation and is still operating smoothly.

6: References
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<http://corporate.ford.com/company.html> [Accessed 3 Dec. 2014].

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