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M04MKT–PRINCIPLES OF MARKETING GROUP ASSIGNMENT ON FORD MOTOR COMPANY UK Submitted by: Bhavani Jonna 2935007
M04MKT–PRINCIPLES OF MARKETING GROUP ASSIGNMENT ON FORD MOTOR COMPANY UK Submitted by: Bhavani Jonna 2935007
M04MKT–PRINCIPLES OF MARKETING GROUP ASSIGNMENT ON FORD MOTOR COMPANY UK Submitted by: Bhavani Jonna 2935007

M04MKT–PRINCIPLES OF MARKETING

GROUP ASSIGNMENT

ON

FORD MOTOR COMPANY UK

OF MARKETING GROUP ASSIGNMENT ON FORD MOTOR COMPANY UK Submitted by: Bhavani Jonna 2935007 Ezra Kumar

Submitted by:

Bhavani Jonna

2935007

Ezra Kumar

3077425

Karthik Shanmugam

2977269

Sangeetha Ravikumar

3081008

Saraswathi Pabbaraju

3014420

Date : 23-03-2010

Word Count : 8366

1

T ABLE OF C ONTENTS Introduction 3 Organization Orientation --------------------------------------------------

TABLE OF CONTENTS

T ABLE OF C ONTENTS Introduction 3 Organization Orientation --------------------------------------------------

Introduction

3

Organization Orientation --------------------------------------------------

4

Corporate Organization -------------------------------------------

4

Product Orientation ------------------------------------------------

5

Competitive Advantage

6

Potters Five forces analysis ---------------------------------------

9

Marketing Mix

Product

11

Product Services and Branding Strategy --------------------------------

11

Product Mix --------------------------------------------------------------------

13

Stages in developing product and service Attributes ----------------

16

Branding ------------------------------------------------------------------------

17

Market segmentation, targeting and positioning -----------------------

18

BCG Growth Share Matrix -------------------------------------------------

20

Ansoff Matrix -----------------------------------------------------------------

22

New Product Development ------------------------------------------------

23

Price

Pricing strategy --------------------------------------------------------------- 24 Price Segmentation --------------------------------------------------------- 25 Promotion Mix

25

Advertising --------------------------------------------------------------------

Direct Marketing ------------------------------------------------------------- 27

Sales Promotion -------------------------------------------------------------

29

Internet Marketing -----------------------------------------------------------

31

Personal Selling / Publicity ------------------------------------------------ 32

Place ----------------------------------------------------------------------------------- 33

Impact of Marketing Mix --------------------------------------------------------------

Swot Analysis --------------------------------------------------------------------------- 39 Pestel Analysis ------------------------------------------------------------------------- 42 Conclusions & Recommendations ------------------------------------------------ 47

37

References ------------------------------------------------------------------------------ 48

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1.INTRODUCTION “We are a globally diverse family, with a proud heritage, that’s passionately committed to

1.INTRODUCTION

1.INTRODUCTION “We are a globally diverse family, with a proud heritage, that’s passionately committed to providing

“We are a globally diverse family, with a proud heritage, that’s passionately committed to providing outstanding products and services.”

The mission Statement of Ford reflects the success and the fame that the company has acquired after surviving strongly in the automotive industry all these years.

True they are a globally diverse family, as they have their manufacturing units all over the world. The sales figure of the company holds strong even during the times of economic downfall, all mainly because of the high standards of strategic planning by the marketing team.

Ford Motor Company was founded in 1902 and the legend is popular for its exceptional achievements. The most popular of the Car coming out of Ford Motors is the Mustang, an invention in the category of phony cars, to the large scale manufacturing of using moving assembly lines show us how Ford Motors has been setting standards in the fields of innovation and quality. (Contact Magazine, 02, 2009)

Ford has also been an inspiration to the not only its home competitors but also to its competitors in the international market. In William A. Levinson’s book “Henry Ford's Lean Vision: Enduring Principles from the First Ford Motor Plant”, we can see how Japan adopted the techniques or better to say the concepts of kaizen (Continuous improvement), poka-yoke (error proofing) and just-in-time famous. These concepts were adopted by Japan in the early twentieth century and Japan knew that it would exactly get what he called it as: proven methods of mass-producing any product or delivering any service cheaply but well

Ford CEO Mr. Allan Mullaly in a statement given to the contact magazine said that one of his for priorities in the ONE Ford plan is “accelerate development of new products our customers want and value.” This does not seem to be a surprise as now in the market lies in the customer’s hands where he would want the best of the line of products and for the cheapest price. And in this era where the growth in globalization is sky rocketing it is the sole aim of car manufacturers to grab customers towards their business or they might end up closing their company.

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The proof of Ford receiving the more awards from J. D. Power and Associates for
The proof of Ford receiving the more awards from J. D. Power and Associates for

The proof of Ford receiving the more awards from J. D. Power and Associates for the surveys in initial quality for five cars, which no other automobile manufacturer has achieved till now, shows us how well planned the marketing strategy of Ford Motors is.

1. 1 ORGANIZATION ORIENTATION

1.1.1 CORPORATE ORGANIZATION

A profit of around $1.06 billion was achieved by the Ford Europe in 2008, which was the fifth year in a row of profits. Also it was the profit in the run of year-over-year as this being the fourth with the first year of having a profit of more than $1billion since

1989.

From the mid of 2008 to the beginning of 2009 there was a change in the profit which was a result of economic downfall that effected the European market. The Estimated Loss was calculated to about $550 million in the first quarter of 2009.

The mid of 2009 showed improvement as there was a profit of $138 million which increased the profit of Ford of Europe by $688 million approximately, this was a major improvement considering the difficult economic conditions.

The Ford Fiesta with its new product portfolio was a major innovation as it increased the volume of sales in the month of August 2009 which was the third consecutive month against the industry trend.

Though being given a second position to Volkswagen in Europe as a bestselling brand, Ford has shown a constant increase in the market share.

Even though there is a positive effect of all the different forms of national vehicle scrap-page Schemes, there is still a negative industry trend and a weak underlying market.

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 To preserve the highly fragile market improvement in the recent months, ford has decided
 To preserve the highly fragile market improvement in the recent months, ford has decided

To preserve the highly fragile market improvement in the recent months, ford has decided not to remove the incentive schemes and keep them as long as it is possible to keep them in a practical situation; Ford is planning to phase out the schemes in a manner which would be orderly as to not disturb the demand in the market.

Till the Economic crisis ends, National Government and the EU should give full support to the automotive industry to preserve the value chain with all the innovative tools available.

During this time Ford will be in continuous decision making situations to have a viable business future which would also include the reduction of structural cost in order to safeguard the product plans of the future and tune the production in accordance with the demand.’

Fords confidence that it would emerge as a stronger and a more competitive business as the economic situation improves and would also sustain a good business for the future is based on the successful strategy which helped to take the decisive measures used to handle the economic crisis since it has appeared. (Fact Sheet August 2009:3-7)

1.1.2 PRODUCT ORIENTATION

2006 to 2008 has seen the re-innovation of every model in Ford Europe car portfolio. In 2009 these new vehicles were introduced in the market to establish the Ford market again. So in 2009 Ford entered with the strongest vehicle line-up ever and the year 2008 was seen as the year of introduction of around 20 new products and derivatives.

The new Ford Fiesta, introduced in autumn, and KA, introduced in the end of 2008, in the line of Ford ECOnetic, was the range of fuel efficient car and were smaller in size and were also perfect for the weak economic climate.

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 The Ford Fiesta, Focus and Mondeo are one of the Ford ECOnetic class of
 The Ford Fiesta, Focus and Mondeo are one of the Ford ECOnetic class of

The Ford Fiesta, Focus and Mondeo are one of the Ford ECOnetic class of vehicles which have low fuel consumption and CO2 emissions and also available at affordable prices.

The new versions of the Ford Transit ECOnetic4, Ranger, Connect and Transit and the Focus RS which were released in the beginning of 2009 received an outstandingly positive media review. (Fact Sheet August 2009, page 3/7)

The design direction in the MAV Execution for the future C-segment Fords were introduced at the iosis4MAX concept at the Geneva Motor Show.

In 2010 Ford will launch the first car in the range of new-generation EcoBoost direct- injection petrol engines. The 1.64litre engine will be manufactured in Bridgend and the 2.04litre engine will be manufactured in Valencia. The Craiova plant and the Cologne Engine plant in Romania will be introducing a more advanced lower- displacement EcoBoost engine.

2. COMEPETITIVE ADVANTAGE

Though Ford faces tough competition from the top company Volkswagen, still ford has managed to have good sales and hold on its position in the market. The sustainability of Ford is explained below.

The customer centric attitude of Ford can be understood through the high-volume affordable solutions catering to the needs of millions of customers. Through this Ford believes that it would succeed in reducing the carbon footprint of Ford and its customers.

Low-CO2 technology in vehicles is the new mantra that Ford is offering as an environmentally advanced portfolio.

With the innovation and the variation increasing the ECOnetic has become a very important part of Ford. The Ford Fiesta, Focus and Mondeo are the successful variants of the ECOnetic passenger cars. The year 2009 also saw the introduction of

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Ford Transit ECOnetic, which was the first commercial vehicle in the ECOnetic range.  Ford
Ford Transit ECOnetic, which was the first commercial vehicle in the ECOnetic range.  Ford

Ford Transit ECOnetic, which was the first commercial vehicle in the ECOnetic range.

Ford proudly says that the ECOnetic vehicles are the best-in-class amongst-the-best- in-class low fuel consumption/CO2 emissions.

Biofuels, their supply and production are supported by Ford. So Ford has a vehicle range of Flexifuel Vehicles (FFVs). These Vehicles run on E85(85% bio-ethanol; 15% petrol), any mix of both in one fuel tank or only petrol, which makes it the choice of the consumer to have a choice of fuel and operation. The FFVs that ford has come up with include the variants of Focus, C4max, S4MAX, Mondeo and Galaxy.

Ford also offers factory fitted CNG and LPG variant for Fiesta, Focus, C4MAX, Transit and Mondeo, but this depends on the market conditions. (CNG – Compressed Natural Gas, LPG – Liquefied Petroleum Gas)

Ford plans to electrify the vehicles which would also include the diesel stop/start, hybrid, plug-in hybrid technology and battery electric vehicles. Even the other technologies that would have the potential to deliver a positive support to the customers in future. Though Ford knows that there is no single solution but still it will keep on fighting till the end to improve its technology.

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Figure 2.0.0 8
Figure 2.0.0 8
Figure 2.0.0 8

Figure 2.0.0

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2.1 P ORTER ’ S F IVE F ORCES A NALYSIS : C OMPETITIVE R

2.1 PORTERS FIVE FORCES ANALYSIS:

COMPETITIVE RIVALRY

’ S F IVE F ORCES A NALYSIS : C OMPETITIVE R IVALRY With fierce competition

With fierce competition between General Motors, Ford and Volkswagen (the biggest players in this industry) extreme steps are taken to attract customers. The companies offer a variety of schemes to attract customers. Though Ford has a huge production volume and very similar organization structure of GM, still it has not been able to come up to the first position and is still below Volkswagen. It can be said that this situation of Ford is because of the major loss that incurred due to poor Jaguar Marketing and the Tyre scandal. Even GM is giving a tough competition to Ford with few of its lucrative schemes such as the “GM military offer” (GM, 2005). Since the 1990s the demand for car compared to the rise in population has been declining. So the competition is becoming stronger by the day. (Muller et al. 2001)

BARRIERS TO ENTRY

To make an entry into this highly competitive industry, the company has to have a strong background, such as reputation, finances, experiences, technology and a huge product portfolio which should be in comparison with the big Giants. There is another major problem which could disturb a smooth entry. An example would explain it better; the components which had high profits in Rover were purchased by BMW and Ford, which Rover with cheap quality products and ultimately made it file for bankruptcy in April, 2005(BBC, April 2005). Due to the deteriorating environmental and the improving technological factors, already existing companies can invest large sums of capital but the new companies would find it difficult.

THREAT OF SUBSTITUTES:

With the public becoming more aware of environmental and health issues, the consumer is resorting to other modes of transport such as trains and buses, cars are being looked as a necessity to only those living in the outskirts of the city.

Other forms of energy if not researched about for the use as fuel in vehicles it would become difficult for the survival of the industry as Diesel and petroleum is fast depleting.

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B UYER P OWER : Inflation, rise in taxes and interest rates effecting both the

BUYER POWER:

B UYER P OWER : Inflation, rise in taxes and interest rates effecting both the sale

Inflation, rise in taxes and interest rates effecting both the sale of the vehicle and the fuel charges including maintenance is again a factor that threatens the industry. However the demand has not fallen for cars so a company faces tough competition in the market.

These days when two products of the same line are compared to each other, we find that there are very few differences. This and the incentives provided by the companies to attract customers makes it a very competitive environment. For e.g. for some of its cars Ford provides upto ₤2000 worth of upgrades for free.

Cars are mainly made after looking at the kind of demand coming from the customers. These days customers want a cheap vehicle which they could use for a long time.

SUPPLIER POWER:

The supplier power in this industry remains low as compared to other industries mainly because almost all the companies manufacture their own vehicle parts.

However companies are ordering for bulk supplies and reducing the number of suppliers. This is a good plan for the company though as they need not depend on the supplier in situations of emergency. (BBC, September 2005).

This step taken by the companies has affected the suppliers too, the competition has increased and the prices are reduced with the supplier himself.

This competition is benefiting both the company and the supplier. The company is getting goods for lesser price and the supplier is getting more profit with bigger bulk sales.

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3. MARKETING MIX Marketing mix is set of Price, Product, Promotion and Place of an

3. MARKETING MIX

3. MARKETING MIX Marketing mix is set of Price, Product, Promotion and Place of an organization.

Marketing mix is set of Price, Product, Promotion and Place of an organization. Some have suggested other P’s and that is called Extended Marketing Mix. The other P’s are People, Physical Evidence and Process."Marketing Mix is set of correlated tools that work together to achieve company’s objectives, they are: product, price, promotion, and place” (Kotler and Armstrong, 2004).

Place Marketing Promotion Product Mix Price Figure 3.0.0
Place
Marketing
Promotion
Product
Mix
Price
Figure 3.0.0

3.1 PRODUCT, SERVICES AND BRANDING STRATEGY

3.1.1 PRODUCT

Product is anything that can be offered to a market for attention, acquisition, use, or consumption, which might satisfy a want or need (Kotler et al 2004). Products can be tangible and non-tangible. Non- tangible products are the services offered by the organization. Today, companies are creating and managing customer experiences with their products.

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L EVELS OF P RODUCTS : Product Planners need to think on three levels: 1.
L EVELS OF P RODUCTS : Product Planners need to think on three levels: 1.

LEVELS OF PRODUCTS:

Product Planners need to think on three levels:

1.

Core Product: It is the base requirement of the customer. The organization must

specify the benefits offered by the product which is asked by the customer. (Kotler et

al 2004).

Core Product Actual Product Augmented Product Figure 3.1.1 (Kotler 2007)
Core
Product
Actual
Product
Augmented
Product
Figure 3.1.1 (Kotler 2007)

2. Actual Product: The requirements of the customers are taken into the shape of the

product. All features of the product are taken into account and also the services needed to

provide for the customer (Kotler and Armstrong 2004).

3. Augmented Product: The product and the services are aligned to offer more benefits to

the customer (Kotler and Armstong 2004).

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3.1.2 Product Mix A product mix consists of product width, length, depth and the consistency

3.1.2 Product Mix

3.1.2 Product Mix A product mix consists of product width, length, depth and the consistency of

A product mix consists of product width, length, depth and the consistency of the products within an organization. It indicates the product line the company has and the kind of products the company manufacture. Ford carries many brands within each line. Thus, Ford’s Fusion comes in three different models and specifications (Kotler and Armstrong 2004).

Ford Products

Commercial Vehicles

Cars

PRODUCT MIX BREADTH AND LENGTH

Commercial Vehicles  Cars PRODUCT MIX BREADTH AND LENGTH Product Line Breadth Figure 3.1.3(Ford 2010) Product

Product

Line

Breadth

Cars PRODUCT MIX BREADTH AND LENGTH Product Line Breadth Figure 3.1.3(Ford 2010) Product Line Length Cars

Figure

3.1.3(Ford

2010)

AND LENGTH Product Line Breadth Figure 3.1.3(Ford 2010) Product Line Length Cars Commercial Vehicles

Product Line Length

Line Breadth Figure 3.1.3(Ford 2010) Product Line Length Cars Commercial Vehicles Automobiles Parts Ka

Cars

Commercial Vehicles

Automobiles Parts

Ka

Panel Vans

Ford

Catalytic

Converter

 

Fiesta

People Movers

 

Ford

Front

Window

Fusion

Chassis Cab/OSS

 

Regulator

 

C-Max

Pick-Ups

Ford Headlamp

Focus

Double Cab-in Vans

 

Ford Corner Light

 

Mondeo

 

Ford Rear View Mirror

S-Max

Ford

Timing

Belt

Kuga

Cover

Focus

Coupé-Cabriolet

Galaxy

Focus RS

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PRODUCT DEPTH C OMMERCIAL V EHICLES Panel Vans New Fiesta Van New Transit Connect Transit

PRODUCT DEPTH

COMMERCIAL VEHICLES

PRODUCT DEPTH C OMMERCIAL V EHICLES Panel Vans New Fiesta Van New Transit Connect Transit Van
Panel Vans New Fiesta Van New Transit Connect Transit Van
Panel Vans
New Fiesta
Van
New Transit Connect
Transit Van
People Movers New Tourneo Connect Tourneo Transit Minibus
People
Movers
New Tourneo
Connect
Tourneo
Transit Minibus
Chassis Cab/OSS Chassis Cab Chassis Double Cab One-Stop Dropside One-Stop- 1way Tripper One-Stop-3way Tripper
Chassis
Cab/OSS
Chassis Cab
Chassis
Double Cab
One-Stop Dropside
One-Stop- 1way
Tripper
One-Stop-3way
Tripper
Pick-Ups New Ranger regular Cab New Ranger Super Cab New Ranger Double Cab New Ranger
Pick-Ups
New Ranger regular
Cab
New Ranger Super Cab
New Ranger Double
Cab
New Ranger
Tripper
Dpuble Cab- in- Vans Transit Double Cab- in-Van
Dpuble Cab-
in- Vans
Transit Double Cab-
in-Van

ig 3.1.4 (Ford 2010)

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CARS Ka Fiesta Studio Studio Edge Zetec Edge Zetec Titanium Titanium EConetic Tattoo Zetec S
CARS Ka Fiesta Studio Studio Edge Zetec Edge Zetec Titanium Titanium EConetic Tattoo Zetec S

CARS

Ka Fiesta Studio Studio Edge Zetec Edge Zetec Titanium Titanium EConetic Tattoo Zetec S Grand
Ka
Fiesta
Studio
Studio
Edge
Zetec
Edge
Zetec
Titanium
Titanium
EConetic
Tattoo
Zetec S
Grand
Prix
Titanium
Individual
Digital
Tattoo
Premium
Fusion Style + Zetec Titanium
Fusion
Style +
Zetec
Titanium
C-Max Style Zetec
C-Max
Style
Zetec
Titanium
Titanium
Focus Style Zetec Zetec S ECOneti c Titaniu m ST-2 ST-3
Focus
Style
Zetec
Zetec S
ECOneti
c
Titaniu
m
ST-2
ST-3
Mondeo Edge Zetec Ghia Titaniu m Titaniu m ECO Titanium X Titanium X Sport
Mondeo
Edge
Zetec
Ghia
Titaniu
m
Titaniu
m ECO
Titanium
X
Titanium
X Sport
S-Max Edge Zetec Titanium
S-Max
Edge
Zetec
Titanium
Kuga Zetec Titanium
Kuga
Zetec
Titanium

Fig 3.1.5 (Ford 2010)

Focus Galaxy Coup’e- Cabriolet Edge CC-1 Zetec CC-2 Ghia CC-3
Focus
Galaxy
Coup’e-
Cabriolet
Edge
CC-1
Zetec
CC-2
Ghia
CC-3

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C ONSISTENCY Ford products lines are consistent as they all are related to each other
C ONSISTENCY Ford products lines are consistent as they all are related to each other

CONSISTENCY

Ford products lines are consistent as they all are related to each other and they all go through the same distribution channels.

3.1.3 STAGES IN DEVELOPING PRODUCT AND SERVICE ATTRIBUTES

3.1.3 STAGES IN DEVELOPING PRODUCT AND SERVICE ATTRIBUTES Time Figure 3.1.6 (Jobber 2007)  Product Development
3.1.3 STAGES IN DEVELOPING PRODUCT AND SERVICE ATTRIBUTES Time Figure 3.1.6 (Jobber 2007)  Product Development

Time

Figure 3.1.6 (Jobber 2007)

Product Development Stage: The organization plans to develop a new product. It aims at gaining profits for the company and retain the market place (Kotler and Armstrong, 2004).

Introduction Stage: Sales grow slowly at the introduction stage when a product is new on the market and there is only a limited awareness of its existence. (The Times

2010).

Growth Stage: Rapid changes in the product, entering to new markets, adding new features, improving quality and substantial profit improvement (The Times 2010).

Maturity Stage: In this stage the competitors enter the market and promote their own products. This will reduce the rate of growth of sales (The Times 2010).

Decline Stage: The market becomes saturated as there are too many firms competing for customers. Organization will compete in a variety of ways and some will drop out of the market. The sales come down and profits erode (The Times

2010).

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Ford Fusion, Focus and Fiesta are in between the growth and the Maturity stage. P
Ford Fusion, Focus and Fiesta are in between the growth and the Maturity stage. P

Ford Fusion, Focus and Fiesta are in between the growth and the Maturity stage.

PRODUCT ATTRIBUTES

Product Quality

Product Design

Product Features (Luiz et al 2010).

SERVICES:

Maintenance and vehicle repair services

Financial services

Retail financing

Wholesale financing

Third-party claim management services (Luiz et al 2010).

3.1.4 BRANDING

“A Brand is: name, term, sign, symbol, design, or combination of these intended to identify the good or service, and differentiate them from those of competitors” (Kotler 2004).

FORD BRANDS

from those of competitors” (Kotler 2004). F ORD B RANDS Ford Motor Company uses many Brand
from those of competitors” (Kotler 2004). F ORD B RANDS Ford Motor Company uses many Brand
from those of competitors” (Kotler 2004). F ORD B RANDS Ford Motor Company uses many Brand
from those of competitors” (Kotler 2004). F ORD B RANDS Ford Motor Company uses many Brand
from those of competitors” (Kotler 2004). F ORD B RANDS Ford Motor Company uses many Brand
from those of competitors” (Kotler 2004). F ORD B RANDS Ford Motor Company uses many Brand

Ford Motor Company uses many Brand names manufacturing the automobiles like Mercury, Lincoln, Volvo, and Mercury. This has major manufacturing operations Worldwide in countries like United Kingdom, Canada, etc. Branding depends on Public relations, scholarships, clubs, factory visits, trade shows, event marketing, press release, social cause, founder or a celebrity personality, mobile phone marketing, etc, (Ahmed et al 2009).

BRAND STRATEGY

The Ford classified the brand names of midsize cars and SUVs by research techniques. Ford uses Umbrella branding which determines price and value (Ahmed et al 2009).

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MARKET SEGMENTATION, TARGETING AND POSITIONING Identify basis for segmenting market Market Segmentation Developing
MARKET SEGMENTATION, TARGETING AND POSITIONING Identify basis for segmenting market Market Segmentation Developing

MARKET SEGMENTATION, TARGETING AND POSITIONING

Identify basis for segmenting market

Market

Segmentation

Developing profile of resulting segments

Develop measures of segment attractiveness

Market Targeting

Select the target segment(s)

Develop positioning for each segement

Market

Positioning

Develop marketing mix for each segment

Figure 3.1.7 (Kotler 2007)

The Organisation’s first phase is choosing the value, the strategist "proceeds to segment the market, select the appropriate market target, and develop the offer's value positioning. The formula - segmentation, targeting, positioning (STP) - is the essence of strategic marketing." (Kotler 2007).

STRATEGIC MARKET SEGMENTATION

Market Segmentation is “dividing up a market into distinct groups that (1) Have common needs and (2) will respond similarly to a marketing action” (Roger et al 2005).

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The various types of segmentations are  Geographic segmentation  Demographic segmentation  Psychographic

The various types of segmentations are

Geographic segmentation

Demographic segmentation

Psychographic segmentation

Behavioral segmentation

 Psychographic segmentation  Behavioral segmentation Ford has mainly segmented the UK automobile market on

Ford has mainly segmented the UK automobile market on various basis which are the parts of above mentioned factors.

SEGMENTATION BASED ON AREAS/CITIES: Ford is mainly concentrating on the major cities like London, Birmingham, etc.

SEGMENTATION BASED ON AGE: Ford segmented the market based on the youth as it did in designing the cars for the youth and middle aged people.

SEGMENTATION BASED ON INCOME: Ford segmented based on the customer’s income .Fiesta and Focus is segmented for the upper middle class.

SEGMENTATION BASED ON BENEFITS PROVIDED: Distinctive benefits which will differentiate it from the competitors (Charles 2010).

MARKET TARGETING

Selecting the segments by evaluating the market segment attractiveness .

TARGET MARKETING

The segment with similar tastes and needs and company aims at providing the services on a profit base.

Ford is not just limited to one segment; it covers all segments through different models of cars. For example, Ford Fusion is mainly for Youth and society class people (Denise 2004).

MARKET POSITIONING

Place where a product occupies in the market relative to the competitive product.

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P RODUCT P OSITION How the customers define the product attributes relative to the competitors
P RODUCT P OSITION How the customers define the product attributes relative to the competitors

PRODUCT POSITION

How the customers define the product attributes relative to the competitors products. Ford positioned the different cars in different places to attract the customers from all parts. Ford could not position the Mondeo in a proper way that’s the reason the sales are less for that product.

PACKAGING

Cars are generally not packed as they don’t have much importance. Cars usually don’t get packed in a box, only if someone wants to gift it. Ford does not use packaging.

LABELING

Labeling will be a small brochure about the Car parts specifications, so that they can see how exactly the car works, and what and from where the parts are.

WARRANTIES

The warranty offered by Ford lasts for 1-10 years or 60,000-1, 00,000kms depending on the model (Ford 2010).

BCG Growth Share Matrix

depending on the model (Ford 2010). BCG Growth Share Matrix Figure 3.1.8 (Kotler 2007:149) Q UESTION

Figure 3.1.8 (Kotler 2007:149)

QUESTION MARKS: Market share will be high but the business share units will be less.

Need lots of cash to hold share of Market

Managerial decisions need to be Made on whether to drop or build up

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 Ford genuine parts and its brand come under this quadrant. D OGS : Degrade
 Ford genuine parts and its brand come under this quadrant. D OGS : Degrade

Ford genuine parts and its brand come under this quadrant.

DOGS: Degrade in business, market share and the products sales will also be less.

May be self sustaining cash sources

Not good bet on large cash sources

STARS: Market share and business grows as well as sales.

Heavily financed (loans; stocks; bonds) (Drummond 2004).

Ford motor crediting and finance comes under this quadrant.

CASH COWS: Company does not progress well though they is rise in sales and market share.

Less investment to hold market share…thereby producing lots of cash

TOTAL ASSET COMPARISON:

“Last avail year - 11 companies (100% = 13,759,770th GBP)

Peer group: Closest 10 companies for the Industry group based on Turnover for the last available

year.”

Ford Company Limited 5.05 Jaguar Cars Limited (UK) 9.85 22.25 General motors UK 10.05 8.56
Ford Company Limited
5.05
Jaguar Cars Limited (UK)
9.85
22.25
General motors UK
10.05
8.56
BMW (UK) Manufacturing
Limited
Toyota Motor
Manufacturing(UK) Limited

Figure 3.1.9 (Fame 2009)

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ANSOFF MATRIX The Ansoff Matrix is a tool that helps businesses decides their product and

ANSOFF MATRIX

ANSOFF MATRIX The Ansoff Matrix is a tool that helps businesses decides their product and market

The Ansoff Matrix is a tool that helps businesses decides their product and market growth strategy. Ansoff’s product/market growth matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets (Lynch,

2003).

existing products in new or existing markets (Lynch, 2003). Figure 3.1.10 (CSS3 2010) Market Penetration: Stepping

Figure 3.1.10 (CSS3 2010)

Market Penetration: Stepping into new markets with the existing products (John 1999).

Product Development: The strategy here is to modify the existing products and develop the new products (John 1999).

Market Development: Moving the products to the new market (John 1999).

Diversification: Putting new products into new markets, organization may have risk at the earlier but later it proves better to get diversified (John 1999)

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NEW PRODUCT DEVELOPMENT Idea generation For new ideas and innovation, many companies use the Brain

NEW PRODUCT DEVELOPMENT

Idea generation

For new ideas and innovation, many companies use the Brain storming technique. And other ways of idea generation taken place through internal resources or external resources. Internal resources are like Scientists, Engineers, Marketers, Sales people and Designers. External resources are like Competitive products, Distributors, Customers, suppliers (Rainey 2005).

Screening

Distributors, Customers, suppliers (Rainey 2005). Screening New Product strategy Idea Generation Screening Concept

New Product strategy

suppliers (Rainey 2005). Screening New Product strategy Idea Generation Screening Concept Testing Business Analysis
Idea Generation
Idea Generation

Screening

Screening New Product strategy Idea Generation Screening Concept Testing Business Analysis Product Development Market

Concept Testing

Product strategy Idea Generation Screening Concept Testing Business Analysis Product Development Market Testing

Business Analysis

Idea Generation Screening Concept Testing Business Analysis Product Development Market Testing Commercialization This

Product Development

Concept Testing Business Analysis Product Development Market Testing Commercialization This stage includes

Market Testing

Testing Business Analysis Product Development Market Testing Commercialization This stage includes evaluating developed

Commercialization

This stage includes evaluating developed ideas in order Figure 3.1.11(Kotler 2004) to estimate the commercial value, how it helps to achieve organization goals and successive competitiveness. Few companies use predefined checklist for screening to make sure nothing can be missed from overlooking (Rainey 2005).

Concept Testing Accepted new product ideas are tested with potential customers so that at the initial stage organization can detect the customer perspective issues (Rainey 2005).

Business analysis: This is the stage where we can estimate the sales, costs and profit. This will sense the target market and its size, acceptance of new product over the years. Companies uses break even analysis for financial feasibility verification (Rainey 2005).

Product development: Here actual product will be developed and Product attributes discussed earlier like quality, features, style, and design are taken in to consideration (Luiz et al 2010, Rainey 2005).

Market Testing: Testing for customer acceptance. Released to test market and ask for test drives and ensure that customers experience and as per the feedback, rectifying the minor issues if any and get the final product ready (Rainey 2005).

Commercialization:-In This stage, product will be launched and taken marketing mix price, promotion and place decisions. Companies predict their sales and profit (Rainey 2005).

23

3.2 PRICE It is the value set for a product or a service offered by
3.2 PRICE It is the value set for a product or a service offered by

3.2 PRICE

It is the value set for a product or a service offered by an organization (Kotler 2004, Lazer 1971). Customers check the price and the services offered by the organization to buy a product. They just don’t respond to the price alone. Both internal and external factors are to be considered when setting the prices.

Internal Factors:

Marketing Objectives

Market positioning

Survival

Current profit maximization

Market share leadership

Product quality leadership

Marketing Mix Strategy

Target Costing

Non price position

Costs

Organizational considerations

External factors

The Market and Demand

o

Different types of market

o

Consumer perceptions of price and value

o

The price demand relationship

o

Competitor’s costs, price and offers

o

Other factors (Economic, Government, etc.)

demand relationship o Competitor’s costs, price and offers o Other factors (Economic, Government, etc.) 24

24

PRICING STRATEGY  Penetration pricing  Skimming pricing  Competition pricing  Product Line Pricing

PRICING STRATEGY

Penetration pricing

Skimming pricing

Competition pricing

Product Line Pricing

Bundle Pricing

Psychological pricing

Premium pricing

Optional pricing

pricing  Premium pricing  Optional pricing Ford follows different pricing strategy for its different

Ford follows different pricing strategy for its different product types, normally a new product launched is priced in a higher segment and gradually its price reduced depending upon the market position of the product. Mondeo failed in some parts because of the higher price.

PRICE SEGEMENTATION

Company

Economy

Mid-size

Luxury Segment MSRP in £

Super

Luxury

Segment MSRP

Segment MSRP

Segment MSRP

in £

in £

 

in £

Ford Motor Ltd.

 

17,700

27,950

27,678

27,575

Toyota Motor Ltd.

19,595

29,245

26,400

39,770

General Motors

 

24,250

31,740

42,080

61,345

Honda

15,655

19,110

26,800

36,780

Fig 3.2.2 (Ford 2010, Toyota 2010, GM 2010, Honda 2010)

25

Ford adopted a competitive pricing strategy. Prices were fixed on the basis of the norms
Ford adopted a competitive pricing strategy. Prices were fixed on the basis of the norms

Ford adopted a competitive pricing strategy. Prices were fixed on the basis of the norms

prevailing in the international market. Also the prices offered by their competitors like Toyota,

Honda, Nissan, were kept in mind while deciding the prices.

Ford uses Value Pricing in which price is set in accordance with customer perceptions about

the value of the product/service.

PROMOTION MIX

This is a key component of marketing mix, is a concept of communicating with customers for

business. Communication involves various approaches like Advertising, Direct marketing,

sales promotion, internet marketing, personal selling, Public Relations. Combination of all

these key approaches called as promotion mix. Ruskin-Brown (2006:136) defined this as “A

number of promotional methods used in combination to promote a particular product through

communicating with individuals, groups and organizations”.

Advertising Personal Selling Direct Promotion Mix Public Marketing Relations Sales Internet Promotion Marketing
Advertising
Personal
Selling
Direct
Promotion Mix
Public
Marketing
Relations
Sales
Internet
Promotion
Marketing

Figure 3.3.1

The main objectives of promotion are:

To bring the Product or service awareness to customers and persuade them to buy

To build/improve credibility

To successful launch a new product in existing market/promoting a existing product

in a new market

To increase the sales

26

Over the years, Ford continues to maintain their marketing edge over the competitors through different
Over the years, Ford continues to maintain their marketing edge over the competitors through different

Over the years, Ford continues to maintain their marketing edge over the competitors through different promotional strategies. Ford 2007, Ford is one of the top 20’s of highest media spend companies list. Due to recession and cost cutting factors, ford reduced their promotional budget and canceled all UK advertising until the conclusion of ’08. In 2009, recovery has been shown.

To sustain a leading position, ford initiated many campaigns and tied up with long lasting sponsorships and periodically conducted sport events. Along with all these, advertisements and logos with attractive strap lines, its fabulous designs and ads are giving an edge over competitor’s promotional activities.

Ford promotional strategy covers all of Europe and used both classifications of promotion – above the line promotion and below the line promotion. Above the line promotion are like mass and direct paid for like television, news papers, radio etc. below-the-line promotions are forms of non media advertising like sponsorships, exhibitions, discounts to dealers, sales promotion activities etc. UEFA sponsorship is a mix of both above and below promotions and throughout the game - Ads reinforced the Ford Brand. (The Times News paper, 2010)

ADVERTISING

The main concept of the advertising is to promote, to remind, to provide support for the sales force, to compete, to persuade of a product to the public. It plays a vital role in order to promote the brand or service and to improve the corporate image and sales. As Evans points out, apart from direct response ads, “Advertising cannot in and of itself cause sales. It can only help or contribute towards sales success” (Evans 1988:6).

In 2005, Ford started advertising with strap line ‘Feel the difference’ in order to create a brand for Ford of Europe. Later years conducted model-specific campaigns and different eye-catching ads with latest technologies and graphics. Ford Ad wins ‘Nielsen’s Auto Ad Of The Year Award 2009’ (Jimme, 2009). Ford also succeeded in The UEFA Champions League final break ads. This league was the most-watched annual sporting event in 2009. Ford advertises through attractive television ads, unique pictures in news papers, Design elevating model specific strap lines and logos, eye-catching posters in dealer show rooms and hoardings.

27

The Ford Britain Trust handles charitable requests received by the Company. This bags the customers
The Ford Britain Trust handles charitable requests received by the Company. This bags the customers
The Ford Britain Trust handles charitable requests received by the Company. This bags the customers

The Ford Britain Trust handles charitable requests received by the Company. This bags the

customers soft corner and credibility. (Marketing magazine 2009)

soft corner and credibility. ( Marketing magazine 2009) Ford latest ad for Ford Focus: “The TV,

Ford latest ad for Ford Focus:

“The TV, print and outdoor campaign, by Ogilvy Advertising, continues Ford's ongoing theme of ‘kinetic design' and the suggestion that Ford vehicles look as though they are in motion even

when stationary” (Marketing magazine

2009)

Fig 3.3.2

“Ford promotes Focus with interactive giant plasma ball” (Fiona Ramsay 2009)

2009) Fig 3.3.2 “Ford promotes Focus with interactive giant plasma ball” (Fiona Ramsay 2009) Fig 3.3.3

Fig 3.3.3

Fig 3.3.3

28

Direct Marketing This is aimed to establish the direct relationship with the organization target market

Direct Marketing

Direct Marketing This is aimed to establish the direct relationship with the organization target market customers.

This is aimed to establish the direct relationship with the organization target market customers. This can be a form of post, mail order, email, telephone calls and etc. Through this marketing strategy, Organization can obtain a long lasting customer relationship. In Sep ’2009, Director said that Ford recovered from the economic downturn mainly through direct marketing events. This includes of ‘mix of mails’ – Car information in mails and ‘world of urls’ – URLs for various cars to see and online ordering.

Ford uses the selective customer’s repository for direct marketing, where company send the direct mails to customers with the new vehicle or additional services information (Deliver magazine 2009). Ford devised off with a book – ‘Generations’ in which they captured more than 43,000 existing customers fondest Ford memories (Williams 2010). The below picture was a direct marketing mail of ford in 2009 which shows about where they stand on in 2010 and along with the mail, order instructions supplied on so that directly customer can buy.

stand on in 2010 and along with the mail, order instructions supplied on so that directly

Fig 3.3.4

29

SALES PROMOTION This is specific to short term period and improves the sales of a

SALES PROMOTION

SALES PROMOTION This is specific to short term period and improves the sales of a product

This is specific to short term period and improves the sales of a product by providing special offers to attract customers, dealers (Terence, 1993). Special offers related to customers are discounts, price deals, premium offers etc. As part of Sales promotion, dealers or merchandisers will get different promotional offers such as point-of-sale displays, leaflets and product literature. These offers ensure that merchandisers display the products in proper way which means in attractive and easily accessible manner (Pickton, 2005) .

Ford follows a very successful way of sales promotional methods for immediate market penetration of new products or products for which sales to be improved. Ford categorizes the customers in different segments in order to achieve sales objectives and provide promotional offers to them as shown in the Table 3.3.1.

Retail Customers:

 

Car Promotions

Who

maintain

car

for

personal

Accessory Promotions

usage

Service Promotions

Insurance Promotions

Mobility Customers:

 

Best buy offers

who are ready to buy cars with the acceptance of mobility scheme in which conditions are amended any moment.

Business

and

Commercial

Car promotions

vehicle users

 
 

Commercial vehicle promotions

Contract hire promotions

Larger Fleet Customers:

 

Less market price

who

operate

more

number

of

vehicles

 

Table 3.3.1

30

INTERNET MARKETING Internet marketing is the best and cheapest way to attract the customers. Internet
INTERNET MARKETING Internet marketing is the best and cheapest way to attract the customers. Internet

INTERNET MARKETING

Internet marketing is the best and cheapest way to attract the customers. Internet is the only place where the global exposure can be achieved easily. This can defined as: “Achieving marketing objectives through applying digital technologies” (Chaffey et. Al, 2006).

Ford provides interactive access over the web and it offers customers to choose their vehicles with variety of flexible options. Ford utilizes contests, blogs, social networking websites like face book, twitter and orkut etc for internet ads. Ford official website is well designed for vehicle customization and obtaining features, latest news, offers and also includes inspiring pictures and movies. Customers will receive an email with advertisements, new offers as soon as they get registered in Ford website. The below picture is about new ford G-series.

new offers as soon as they get registered in Ford website. The below picture is about

Fig 3.3.5

31

PERSONAL SELLING This is an approach to maintain a good rapport with customers for purpose

PERSONAL SELLING

PERSONAL SELLING This is an approach to maintain a good rapport with customers for purpose of

This is an approach to maintain a good rapport with customers for purpose of making sales. Personal selling will be dealt by the sales team on behalf of an Organization. Personal selling is very useful for the products which are complicated to self analyse and understand. Ford products do not have any difficulties to reach the customers and bring them to live about product. In Ford, There are sales and marketing teams who take care of product and offers promoting activities.

PUBLIC RELATIONS / PUBLICITY

“Public relations is the art and social science of analysing trends, predicting their consequences, counselling organisation leaders and implementing planned programmes of action which will serve both the organisation’s and the public interest” (Wilcox et al. 2003:6).

Ford boost up their sales through publicity with sponsorship Activities, Events and contests.

SPONSERSHIP Ford company’s sponsors carefully with selected brand for long lasting relationship. “Edinburgh Tattoo”, ”Talk Sport”, “Sky Sports”, “Disneyland Paris” are the current sponsorships of Ford.

Ford has three years journey with official supplier to the Edinburgh Tattoo. They sponsor tickets in affordable prices in order to sustain the shows towering standards and also to upholding the show for upcoming generations.“Disneyland Paris” are the current sponsorships of Ford. As Ford is an official dealer to Disneyland

As Ford is an official dealer to Disneyland Resort Paris, it plies support vehicles to the theme park, in revisit ford provides a lots of extraordinary packages, which they often offer missing in price draws & competitions.and also to upholding the show for upcoming generations. Sponsorship with UEFA champions association, Ford is

Sponsorship with UEFA champions association, Ford is also a title sponsors to Talksport’s for the football shows holding on Tuesday and Wednesday.they often offer missing in price draws & competitions. Ford is sustaining 15 years rapport with

Ford is sustaining 15 years rapport with Sky Sports, as they are much interested in the football show. Indeed, Ford launched both new models Mondeo and Kuga in the final show of the UEFA champions League, through the advertisement break. (FordFord is also a title sponsors to Talksport’s for the football shows holding on Tuesday and

2010)

32

Press Releases: Press releases help to improve credibility and bring the awareness to public about
Press Releases: Press releases help to improve credibility and bring the awareness to public about

Press Releases:

Press releases help to improve credibility and bring the awareness to public about the current activities and future prospects of an organization. Ford recent press release about novel low carbon vehicle project bagged the financial support from government and successfully grabbed the public attention. Also government chains Ford's main travel to low carbon vehicles.

“Government to support with £360 million in loan guarantees, Six projects worth more than £1.5 billion across four Ford sites, Investment to safeguard around 2,800 skilled workers” (Energy Saving Trust 2010).

Predominantly Ford Company gets benefits from advertising and sales promotions. The current promotional strategy enables Ford to stand on their leading position in UK market. Brand name and buzz marketing word of mouth are giving little push into recent Ford sales.

3.4 PLACE

This is one of the traditional elements of marketing mix. Place is all about how the product reach the customers at right location at right time (Brassington and Pettitt, 2006:519). Place or Distribution is very essential in order to meet the sales objectives. The barrier between production and consumption is called as Distribution channel. There are different Layers in distribution channel which perform a different activity to bring the product to final customer. Each layer is called as channel level. The intermediaries (channel levels) are

AGENTS AND BROKERS: People who own the authority in legal from the producer.

WHOLESALERS: People who interacts with retailers.

DISTRIBUTORS AND DEALERS: People who interact with customers and may provide additional benefits.

RETAILERS: People who communicates to customer directly.

In Business, the main distribution channels are Business to consumer (B2C) distribution for consumer goods, Business to Business (B2B) distribution for business goods and business to consumer or business for service goods.

33

B2C Distribution channel – Consumer Goods Figure 3.4.1 As mentioned in above figure 3.4.1, channel

B2C Distribution channel – Consumer Goods

B2C Distribution channel – Consumer Goods Figure 3.4.1 As mentioned in above figure 3.4.1, channel 1
B2C Distribution channel – Consumer Goods Figure 3.4.1 As mentioned in above figure 3.4.1, channel 1
B2C Distribution channel – Consumer Goods Figure 3.4.1 As mentioned in above figure 3.4.1, channel 1
B2C Distribution channel – Consumer Goods Figure 3.4.1 As mentioned in above figure 3.4.1, channel 1
B2C Distribution channel – Consumer Goods Figure 3.4.1 As mentioned in above figure 3.4.1, channel 1

Figure 3.4.1

As mentioned in above figure 3.4.1, channel 1 represents direct marketing channel. Remaining channels represent indirect marketing channels.

In channel 1, there is no intermediary level exist. Producer directly sells goods to customer.

Channel 2 is the one which is currently ford is following. Vehicles that are manufactured at manufacturing units of Ford are distributed to dealers through road or train transportation. Consumers can buy the cars directly from the dealer’s show room.

Channel 3 and 4 are about the distribution through wholesaler and/or retailer. This approach followed in Retail industry.

Apart from this, Ford is following different distribution channels for Ford Fleet - Automotive Remarketing Services (ARS) - which are internet auctions and on the ground auctions. At each auction, there are full time employees from the Ford motor company and they helped in auction and providing utmost support to ARS customers. These customers will be benefited with less market price which is due to company doesn’t have any documentation and administration costs. Since this is an auction process and takes immediate handover of vehicle, Ford provides all verification systems are readily available at auction place.

34

B2B distribution channel – Business Goods Business to business communication channel doesn’t consist of retailer

B2B distribution channel – Business Goods

B2B distribution channel – Business Goods Business to business communication channel doesn’t consist of retailer

Business to business communication channel doesn’t consist of retailer intermediary level and final products reaches for business clients. Channel levels appeared as in the mentioned below diagram.

Channel levels appeared as in the mentioned below diagram. Figure 3.4.2 Distribution channel for Service Goods
Channel levels appeared as in the mentioned below diagram. Figure 3.4.2 Distribution channel for Service Goods
Channel levels appeared as in the mentioned below diagram. Figure 3.4.2 Distribution channel for Service Goods

Figure 3.4.2

Distribution channel for Service Goods

This distribution channel represents service providers to consumer in order to deliver their services or goods. Ford fleet offers services for remarketing vehicles which is using the below distribution channel 2. Where agents have the rights to issue their affordable services to clients and ensuring they are holding the flow of customers.

rights to issue their affordable services to clients and ensuring they are holding the flow of
rights to issue their affordable services to clients and ensuring they are holding the flow of

Figure 3.4.3

35

Channel membership – Market coverage : There are three categories of distribution options - Intensive,

Channel membership Market coverage:

Channel membership – Market coverage : There are three categories of distribution options - Intensive, selective

There are three categories of distribution options - Intensive, selective and exclusive distribution.

Through this, as many as possible outlets can be placed for a

product. Since Ford aimed for medium segment market, it follows intensive distribution.( Ford, 2010)

Intensive distribution:

Selective Distribution: In a particular geographical area, distribution through a selective set of outlets rather than everywhere.

Exclusive Distribution:

area.

Distribution through a single outlet for a particular geographical

In the UK, FORD is the market leader over the last 25 years. It is operating with around seven locations and over 500 dealerships. And also it is having several large plants where it manufactures vehicles, engines and transmissions and also parts and components. Ford in Britain, in total 35000 people employed in its dealers like product development, manufacturing, service roles, sales and marketing.

As part of supply chain management, Ford follows efficient approaches like Just in Time (JIT) – “which is aimed to obtain low-cost high quality products and on-time production as well as eliminating waste and stagnant stock” (Svensson, 2001). Through JIT, Ford is achieving the highest efficiency in car manufacturing industry. Ford mainly using roads and trains transportation for distribution of manufactured vehicles to its dealers. Since dealers have the locality specific strengths to obtain customers, ford is using dealers as an intermediary for the distribution. Ford follows the distribution channel as shown in the below figure 3.4.4.

36

Figure 3.4.4 : Ford Distribution Channel IMPACT OF MARKETING MIX ON THE ORGANISATION Sales from
Figure 3.4.4 : Ford Distribution Channel IMPACT OF MARKETING MIX ON THE ORGANISATION Sales from
Figure 3.4.4 : Ford Distribution Channel IMPACT OF MARKETING MIX ON THE ORGANISATION Sales from

Figure 3.4.4 : Ford Distribution Channel

IMPACT OF MARKETING MIX ON THE ORGANISATION

Sales from Existing Customers Customer Retention Sales from New Customers Sales from lost Customers Customer
Sales from Existing
Customers
Customer Retention
Sales from New
Customers
Sales from lost
Customers
Customer
Acquisition
Sales from Lost
Customers
Customers Customer Acquisition Sales from Lost Customers Marketing Mix Impacts on Own Sales Competitor’s Sales

Marketing Mix

Impacts on

Own Sales

Competitor’s

Sales

Fig 3.5.0 (Douchlas 2010, Relchheld 2010)

37

Customer will have lifelong tie with the organization. Organizations maintains its reputation not just by
Customer will have lifelong tie with the organization. Organizations maintains its reputation not just by

Customer will have lifelong tie with the organization. Organizations maintains its reputation not just by giving good services and products, it deals with how the customers. The organization should give more than what the customers expect from them not only in the form of services and products. The customers more attract to the brand name of the Ford and they are maintain that standards throughout the year (Douglas 2010).

Organization aims at expanding the profits they get from customers to gain the business units (Reichheld 1996).

Ford’s product mix strategy involves in introducing new or modified products in the market this is resulting in a positive way to some extent by providing profit to the company. Ford got competitive advantage and has gained the market share.

Ford’s prices the products based the segments and also take products specifications into consideration. This is illustrated in the Price category Fig 3.2.2. But compared with competitor’s products, ford has priced high to some segment products.

Ford is promoting well and by sponsoring to the events, it is gaining more and more attention. It associates its brands with these kinds of activities to promote their products.

Ford has very strong placement strategy. This has its presence globally; it manufactures and distributes automobiles across six continents with 90 plants worldwide. It is place well to get a positive impact.

38

4.0 SWOT ANALYSIS S TRENGTHS • Ford admits greater amount of customer loyalty, and all

4.0 SWOT ANALYSIS

STRENGTHS

4.0 SWOT ANALYSIS S TRENGTHS • Ford admits greater amount of customer loyalty, and all its

• Ford admits greater amount of customer loyalty, and all its individual brands have been

enjoying the benefits of the good reputation that they have through the quality makes and services. They have brands and models of cars to appeal to every kind of demographic group, and simply cater for the needs and wants of consumers.

• Ford uses a unique concept of virtual assembly lines in their models through which they

were able to re-use the same spare in their diversified model of cars. This enables ford to lessen cost on production of new spares and compete market price.

• European market share of ford remained constant over the last five years averaging over

10 per cent, ford UK’s share recently increased by 1.2 percent, compared with March 2008

of 15.5 per cent. Ford's growing popularity among private buyers drove total car share to

16.7.

• Ford outsold 142,285 sales in February compared with GM’s 141,951 this was the first month that Ford achieved such a rival since 1998 (BBC News 2008)

WEAKNESSES

• Ford does not have an effective cost management system and have not taken considerable efforts to overcome since they believed paying premiums in single supplier model.

• Ford does not concentrate and invest much for design phase and eventually lacking in innovative design structures on their new paddle of cars.

• Quality assurance of ford seems to be not in control which resulted in recalling thousands

of cars and expensive repair operations, stating to that in 2002, Ford and Bridgestone experienced a faulty tyre scandal which caused a two billion dollar loss (BBC, January 2002)

• Ford has kept increasing the productivity, while on the other decreasing the cost and

simultaneously counting the No of employees’ exit, which lessons the employee loyalty towards the company.

39

O PPORTUNITIES • Ford producing vehicles that runs on different forms of energy other than
O PPORTUNITIES • Ford producing vehicles that runs on different forms of energy other than

OPPORTUNITIES

O PPORTUNITIES • Ford producing vehicles that runs on different forms of energy other than petrol

• Ford producing vehicles that runs on different forms of energy other

than petrol and diesel can help the company to become pioneers in the industry.

• Nowadays replacing the old cars for the new ones in the market is

increasing in number, knowing the customers up to date data and consistent follow up of owners’ minutiae would enable the company to maintain customer cycle.

would enable the company to maintain customer cycle. • Women’s Demand for cars is mounting year
would enable the company to maintain customer cycle. • Women’s Demand for cars is mounting year

• Women’s Demand for cars is mounting year by year and so as the

overall demand for cars is mounting which turns to be a positive sign not only for Ford, the automobile company but for the entire automotive industry.

• Ford to expand electric and hybrid range of cars to

2011.Ford has big plans for electrification of its fleet over the and while most of the emphasis has been on North America will be joining on in near 2011 (Green Automotive 2010)

will be joining on in near 2011 (Green Automotive 2010) Europe from next so far, Europe

Europe from

next

so far, Europe

decade,

THREATS

• carbon dioxide emissions from the burning of oil and gas causes severe effects on

climate change and threatens virtually every segment of the biosphere and human society, further increase in gasoline prices keeps the automotive industry uncertain of future innovations and its success.

• Ford has implemented its manufacturing plant in the Asian market that has

considerable growth and expectation for the future which is a great threat for export market of “ford in UK”. Increase in demand for the Japanese cars also on the rise unless ford hard try to overcome these weaknesses, ford may lose its market share to the growing automotive firms.

40

• Although global warming turning out to be a greatest threat and individual use of
• Although global warming turning out to be a greatest threat and individual use of

• Although global warming turning out to be a greatest threat and individual use of automotive vehicles increases the risk further, the cars and other private vehicles are a part of basic necessity on a common man’s view. Therefore it is believed that no real threat of substitutes exists today, but it is believed that choosing other forms of transport such as bicycles, public transport’s and sharing mobility would soon be imported in to the minds of people.

STRENGTHS WEAKNESS OPPORTUNITIES THREATS Weakness -> Strength
STRENGTHS
WEAKNESS
OPPORTUNITIES
THREATS
Weakness -> Strength

Figure 4.1 SWOT ANAYSIS OF FORD

Weakness -> Strengths  Ford is lacking in new design and innovative structures which can
Weakness -> Strengths
 Ford is lacking in new design and innovative structures which can be resolved by
investing more funds in to design phase, recruiting and training design engineers and
thus ford can overcome their weakness to achieve greatest of strengths.
 Quality assurance of ford needs to be more intact and must be consistently
monitored with pre-meant standards to make certain no future faults and thereby
attaining customer satisfaction.

41

Threats -> Opportunities  The price of gas and oil is increasing day by day
Threats -> Opportunities  The price of gas and oil is increasing day by day
Threats -> Opportunities  The price of gas and oil is increasing day by day
Threats -> Opportunities
 The price of gas and oil is increasing day by day and remains to be in the state of
uncertainty and therefore electric drive vehicles will be in high demand. Ford can
build cars that run on electricity and other forms of energy to promote and adopt to
the future opportunities that will arise.
and adopt to the future opportunities that will arise. Figure 4.2 (High Gear 2010) 4.1 PESTEL

Figure 4.2 (High Gear 2010)

4.1 PESTEL ANALYSIS

POLITICAL FACTORS

• Automotive funds and concessions have been reduced to recent heavy recession hit

the world economy from which the European economy is still hard trying to recover (MSNBC

2010).

The economic recession and financial crisis in Europe 2008 adversely affected and

recorded the least automotive sales year in UK; Ford posted a $129 million loss in the third

quarter and said since the last 25 years. Further ford eliminated another 2,260 jobs and burnt through $7.7 billion in cash (Ford Media 2008).

42

E CONOMIC F ACTORS  Ford’s improved fuel economy vehicles will be approximately increased by

ECONOMIC FACTORS

E CONOMIC F ACTORS  Ford’s improved fuel economy vehicles will be approximately increased by 20

Ford’s improved fuel economy vehicles will be approximately increased by 20

percent through the end of 2010 compared to 2005, and the same will be increased by 35 percent by 2015(MSNBC 2010)

• Rising petrol prices make it more expensive for consumers to drive petrol fuelled cars

which consequently means that consumers are inclined to change their cars which operate using diesel. (The Guardian 2005)

Ford being one of the biggest automation manufacturers in Europe reduced the

production of cars due to financial crisis engulfed the continent. In spite of the global economic recession ford does not anticipate a liquidity crisis in 2009.

• Ford’s SUV’s (Sport Utility Vehicle) and heavy trucks sales declined substantially due

to steep increase fuel prices, in order to that the share price of Ford has also realized a downfall (Reuters 2005).

• Steady rise in demand for the cars manufactured in Asian market led the ford to fight

against their selling price by reducing cost involved in production and sustain their brand name by offering the ideal quality and customer satisfaction.

Ford deploys 850 job cuts in UK in an attempt to save the cash flow due to intensifying economic crisis by holding up the launch of its new transit (Feb 6 th 2009, By:

Matt Brogan).

SOCIAL FACTORS

• Cars are viewed as a status symbol by people around the world. A person’s influence

and political status is reviewed by vehicle brands they hold. Ford produces a range of business class cars to captivate the Hi-End business society UK market.

cars to captivate the Hi-End business society UK market.  Ford intended to produce luxury cars

Ford intended to produce luxury cars due

to growing demand on its brand and due to the increasing celebrities and other delicates with in UK.

43

 Ford has competitive edge over attracting the women for the cars designed specifically for
 Ford has competitive edge over attracting the women for the cars designed specifically for

Ford has competitive edge over attracting the women for the cars designed

specifically for women by women designers in stereotypical view points (Ford 2007).

TECHNOLOGICAL FACTORS

Industry-leading levels of new technologies and convenience safety features are at its best in Ford’s 2010 paddle of cars.

features are at its best in Ford’s 2010 paddle of cars.  Technological advancements are inevitable

Technological advancements are inevitable for automotive industry in order to

compete the competitors and to become pioneers in the industry by enriching new technologies

According to studies on environmental factors fuel in the world is expected to

evaporate due to excessive burning of fuel and oil through vehicles and on usage of industrial machines, automotive firms like ford needs to concentrate on technologies that use other forms of energy (BBC June 2004).

Ford’s new and improved 2.0-liter, 4-cylinder EcoBoost engine to be launched to drive the upcoming year.

Ford to introduce 30 new powertrain actions globally in 2010.

Ford strives to improve quality with virtual technology in their vehicles that provides

real benefits including reduction in injuries, improving quality and thus helping the company to become pioneers.

44

  Ford Focus BEV Prototype Technical Data Battery Technology Lithium Ion Battery Capacity   23
  Ford Focus BEV Prototype Technical Data Battery Technology Lithium Ion Battery Capacity   23
 
 

Ford Focus BEV Prototype Technical Data

Battery Technology

Lithium Ion

Battery Capacity

 

23 kWh

Charging time

6-8 hours (230 V grid)

Electric motor

Permanent-magnet motor

Max Power

100

kW

Max Torque

320

Nm

Top speed

136

km/h (85 mph)

Range

120

km (75 miles)

Ford of Europe puts second European battery electric vehicle test fleet on the road (Ford Press Releases 2010).

ENVIRONMENTAL FACTORS

Ford based in UK dealing with a powertrains project in

which Ford will provide ten Ford Transits into which UK-based Smith Electric Vehicles (SEV) will install their pure battery-electric powertrains. SEV to market these vehicles as the Smith Edison for UK and European operators since 2007



Ford and SEV together will be building seven transit panel vans and two transit buses for shuttle services, Ford will remain to be the primary maintenance, service vendor and will transits will be mostly used in rural areas through the project period.

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 Ford concentrates on The Focus BEV prototypes which are to be used for the
 Ford concentrates on The Focus BEV prototypes which are to be used for the

Ford concentrates on The Focus BEV prototypes which are to be used for the UK

program is based on the current European Ford Focus and will use a new all-electric powertrain, provided by strategic supplier Magna.

The all electric powertrain technology is based on development for Ford's next-

generation global C-car architecture and the same will be launched as the Focus Electric in North America in 2011 (Ford news 2010).

LEGAL FACTORS

In order to increase the production with considerable reduction in cost and to be competitive in the industry, automobile companies have started implementing robotic machines to build cars, which resulted in drastic decrease of human force and salary cuts. However trade unions in EU made it difficult for car firms to dismiss their employees, in order to protect themselves from such a setback individual firms like Ford and GM have started making deals with trade unions in order to protect themselves.

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CONCLUSIONS Ford has been the pioneer in the automotive industry in order to sustain their
CONCLUSIONS Ford has been the pioneer in the automotive industry in order to sustain their

CONCLUSIONS

Ford has been the pioneer in the automotive industry in order to sustain their leadership and to match the requirements of the future needs and updated technologies with eco friendly approach, ford has planned to manufacture and promote electric cars on a large scale in EU, though the concept of electric cars is eco-friendly and being encouraged by the people, it has a major drawback of charging the battery on the go. Following are the conclusions drawn from the marketing mix.

Ford is spending more on advertising as a result sales came down in 2008.Following are the conclusions drawn from the marketing mix. Prices mounted up by Ford because of

Prices mounted up by Ford because of recession and the competitors products.more on advertising as a result sales came down in 2008. Ford fusion and Focus sales

Ford fusion and Focus sales increased gradually.by Ford because of recession and the competitors products. Ford is a massive success for its

Ford is a massive success for its kinetic design.products. Ford fusion and Focus sales increased gradually. Ford’s sale jumped 43% ahead of GM this

Ford’s sale jumped 43% ahead of GM this month.gradually. Ford is a massive success for its kinetic design. Government sanctioned the amount of £2.3billion

Government sanctioned the amount of £2.3billion for Ford its low carbon vehicle strategy.design. Ford’s sale jumped 43% ahead of GM this month. Geneva motor show got a good

Geneva motor show got a good response for C-Max and Grand C-Max.of £2.3billion for Ford its low carbon vehicle strategy. RECOMMENDATIONS Ford should focus more on its

RECOMMENDATIONS

Ford should focus more on its designs by encouraging its designers and rewarding them to come up with newer efficient models. They should

Ford should be able to sustain its customers by marketing in wider range. They could link up with T.V. shows and advertise on their upcoming models.

To overcome the above mentioned drawback and to run a profitable business, Ford could possibly start a project of charging stations similar to petrol stations which would facilitate their customers to utilize the station for charging their car batteries for free and other company cars for a price. This project would be both profitable and eco-friendly.

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