INTRODUCATION

Business Process Reengineering involves changes in structures and in processes within the business environment. The entire technological, human, and organizational dimensions may be changed in BPR. Information Technology plays a major role in Business Process Reengineering as it provides office automation, it allows the business to be conducted in different locations, provides flexibility in manufacturing, permits quicker delivery to customers and supports rapid and paperless transactions. In general it allows an efficient and effective change in the manner in which work is performed.

1.1 What is the Business Process Re-engineering
The globalization of the economy and the liberalization of the trade markets have formulated new conditions in the market place which are characterized by instability and intensive competition in the business environment. Competition is continuously increasing with respect to price, quality and selection, service and promptness of delivery. Removal of barriers, international cooperation, technological innovations cause competition to intensify. All these changes impose the need for organizational transformation, where the entire processes, organization climate and organization structure are changed. Hammer and Champy provide the following definitions:  Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance such as cost, quality, service and speed.  Process is a structured, measured set of activities designed to produce a specified output for a particular customer or market. It implies a strong emphasis on how work is done within an organization. " (Davenport 1993).

Each process is composed of related steps or activities that use people, information, and other resources to create value for customers as it is illustrated in the following example. Business processes are characterized by three elements: the inputs, (data such customer inquiries or materials), the processing of the data or materials (which usually go through several stages and may necessary stops that turns out to be time and money consuming), and the outcome (the delivery of the expected result). The problematic part of the process is processing. Business process reengineering mainly intervenes in the processing part, which is reengineered in order to become less time and money consuming.

How can BPR be applied to an organization? When British Telecom had announced their Business Plan, all competitors were eager to find out who would be the new CEO of the organization. To the surprise of all the new CEO it was the customer. The company had decided to transform all the operations of the organization the way customers wanted them to operate. The most important action in applying BPR is the company's strategic goal to provide customer oriented services. BPR is a technique used to implement this type of organizational structure. Having the management commitment for change, another very important factor for implementing BPR, is the enabling role of Information Technology. The way that businesses are organized around departments is very logical since, for instance, there were physical barriers in the communication of the accounting department with production department. (The warehouse could be in another location in the another part of the city). So it wasn't possible for a cross-functional team to communicate efficiently. In the 90s when telecommunication technologies were becoming abundant and low costing BPR was becoming a world-wide applicable managing technique for

business upgrade, enabled by the technology. Employees can easily operate as a team using intranets/extarnets, workflow and groupware applications, eliminating distances. We can work together even though we are located in different places.

Empowering people. Empowerement means giving people the ability to do their work: the right information, the right tools, the right training, the right environment, and the authority they need. Information systems help empower people by providing information, tools and training.

Providing Information. Providing information to help people perform their work is a primary purpose of most information systems although they provide information in many different ways. Some systems provide information that is essential in informing a business process, such as the prices used to create a customer¶s bill at a restaurant. Other systems provide information that is potentially useful but can be used in a discretionary manner, such as medical history information that different doctors might use in different ways. Providing Tools. In addition to providing the right information, empowering people means giving them the right tools. Consider the way planning analysts produce consolidated corporate plans based on plans of individual divisions and departmants. If the plans are submitted on paper, it is a major task to add up the numbers to determine the projected corporate bottom line. When the plan is changed during a negotiation process, the planning analyst has to recalculate the projected results. With the right tools, the numerical parts of the plans arrive in a consistent, electronic format prmitting consolidation by a computer. This leaves the analyst free to do the more productive work of analysing the quality of the plan.

Providing Training. Since information systems are designed to provide the information needed to support desired work practices, they are often used for training and learning. As shown by an expert system and a decision simulator, they sometimes provide new and unique training methods. IBM developed an expert system for fixing computer disk drives. The expert system was an organized collection of the best knowledge about fixing these disk drives, and it fostered rapid and efficient training. Before the system was developed, technicians typically took between 1 and 16 months to become certified, but with the expert system, training time dropped 3 to 5 months. Eliminating Unproductive Uses of Time. Information systems can reduce the amount of time people waste doing unproductive work. A study of how professionals and managers at 15 leading U.S. corporations spent their time concluded that many professionals spent less than half of their work time on activities directly related to their functions. Although the primary function of salespeople is selling, the time breakdown for salespeople averaged 36 percent spent on prospecting and selling, 39 percent spent on prospectin an selling, 3 percent on servicing accouts, 19 percent on doing aministrtative chores, and 6 percent on training. Better use of information systems could save much of their unproductive time performing chores such as collecting product or pricing information, determining order status for a customer, resolving invoice discrepancies, and reporting of time and expenses.

Eliminating Uneccesary Paper. One common way to improve data processing is to eliminate unnecessary paper. Although paper is familiar and convenient for many purposes, it has major disadvantages. It is bulky, difficult to move from place to place, and extremely difficult to use for analysing large amounts of data. Storing data in computerized form takes much less physical space and destroys fewer forests, but that is only the beginning. It makes data easier to analyze, easier to copy or

transmit, and easier to display in a flexible format. Compare paper telephone bills with computerized bills for a large company. The paper bills identify calls but are virtually impossible to analyze for patterns of inefficient or excessive usage.

Eliminating Unnecessary Variations in the Procedures and Systems. In many companies, separate departments use different systems and procedures to perform essentially similar repetitive processes, such as paying employees, purchasing supplies, and keeping track of inveítories. Although these procedures may seem adequate from a totally local viewpoint, doing the same work in different ways is often inefficient in a global sense. Whenever the systems must change with new technology, new regulations, or new business issues, each separate system must be analysed separately, often by someone starting from scratch. Minimizing the Burden of Record Keeping, Data Handling, and General Office Work. Since processing data is included in most jobs, improving the way people process data isan obvious place to look for information system applications. Focus on basic data processing tasks: Reducing the burden of record keeping means being more efficient and effective with the six components of data processing. Those components are capturing, transmitting, storing, retrieving, manipulating, and displaying data. Capture data automatically when generated: Capturing data automatically at the time of data generation is especially important in minimizing the burden of record keeping. In depth, BPR assumes that the current processes in a business are inapplicable and suggest completely new processes to be implemented by starting over. Such a perspective enables the designers of business processes to disassociate themselves from today's process, and focus on a new process. The BPR characteristics - outcomes include the following:

This enables the economies of scale that result from mass production. tasks. are a 24 hour delivery to any customer anywhere in the world. Redesign. the reconsideration of jobs. More specifically. yet allows customization of products and services.  Work is performed where it makes the most sense.  A hybrid centralized/decentralized operation is used.  A single point of contact is provided to customers.  Processes have multiple versions. This occurs with the creation and the use of models. BPR is achieving dramatic performance improvements through radical change in organizational processes.  Controls and checks and other non-value-added work are minimized. Whether those be physical models. models and tools to bring about the radical restructuring of an enterprise that result in significant improvements in performance. The outcome pursued should be an ambitious outcome (as for instance. mathematical. retooling and reorchestrating form the key components of BPR that are essential for an organization to focus on the outcome that it needs to achieve. and skills. It involves the redrawing of organizational boundaries. rearchitecting of business and management processes.  Reconciliation is minimized by cutting back the number of external contact points and by creating business alliances. . engineers build and analyze models to predict the performance of designs or to understand the behavior of devices. Steps in the processes are performed in natural order.  Decision-making becomes part of the job of employees (employee empowerment). computer or structural models. BPR is defined as the use of scientific methods.Several jobs are combined into one. and several jobs get done simultaneously.

careful redesign.approval of mortgage loans within 60 minutes of application. or ability to have on-line access to a patient's medical records no matter where they are in any major city in the world). . These checkings become easily implemented within the cross-functional teams. throughout the value chain. Cutting major tasks of cost and capital. Organizing the processes a company develops transparency throughout the operational level reducing cost. Customer service oriented processes aiming to eliminate customer complaints. after BPR the average cycle time should be cut down to half an hour. For instance the decision to buy a large amount of raw material at 50% discount is connected to eleven cross checkings in the organizational structure from cash flow. Speed. In resuming. Compression. 1. the whole process of BPR in order to achieve the above mentioned expected results is based on key stepsprinciples which include redesign. inventory. retool. They will additionally need very sophisticated supporting information systems and a transformation from a traditional organizational structure to a network type organization. and reorchestrate. Dramatic compression of the time it takes to complete a task for key business processes.2 Objectives of BPR When applying the BPR management technique to a business organization the implementation team effort is focused on the following objectives: Customer focus. Each step-principle embodies the actions and resources as presented in the table below. For instance. to production planning and marketing. optimizing the decision making and cutting operational cost. if process before BPR had an average cycle time 5 hours. These types of visionary goals require rethinking the way most organizations do business.

Innovation. Consultants' help and guidance may be extremely beneficial in all stages of the BPR procedure. Productivity.  They are good communication paths between front line workers and customers. besides their beneficial qualities. Improve drastically effectiveness and efficiency.  Consultants. and the leaders of the company or organization. .  They have followed the process before.  They bring information and best practices from other companies. can also unintentionally create barriers by: having the solution being viewed as "theirs" and not "yours". Being closer to the customer the company can develop the awareness mechanisms to rapidly spot the weak points and adapt to new requirements of the market. In order to achieve the above mentioned adjectives the following BPR project methodology is proposed. Adaptive processes and structures to changing conditions and competition. Quality. who servicing the customer.5 Characteristics of firms and service providers Several surveys and benchmarking findings reveal the essential role of consultants in the BPR process. This is due to the fact that consultants have the following attributes:  They are objective and immune to internal politics. Obsession with the superior service and value to the customers.Flexibility. Leadership through imaginative change providing to organization competitive advantage. The level of quality is always the same controlled and monitored by the processes. 1. and does not depend mainly on the person.

 a team member. Major utility companies used reengineering as a technique to improve service . DEC. AT&T. KRAFT FOODS having as a result major downsizing in their organizational structures. The role of consultant may be:  a strong facilitator and experienced practitioner who brings a methodology with them. The technique was applied first to multinational cooperations. and this is a matter for the company to decide always taking into account the organizations needs and the specific BPR approach chosen. NORTHWESTERN BANK. GENERAL ELECTRIC. The consultants may play different roles in the BPR procedure. such as IBM. 2 APPLICATION 2. can be an objective and unbiased contributor to the solution. the banking sector began to reengineer with a great degree of success such as CITIBANK . SONY. able to perform specific tasks for the team. BANK OF AMERICA and others. WALL MART. HEWLLET PACKARD. Later.and taking too strong a lead role and disengaging the organization.  a subject-matter expert with knowledge of performance levels and best practices of similar organizations and processes.1 Where the technique has being applied Many public and private sector organizations and SMEs Wordwide had undergone major reengineering efforts.

 Strong management commitment to new ways of working and innovation. BAAN and various ERP systems that promote the horizontal organizational structure are the vehicles for re-engineering the organizational structure in order to adapt to the horizontal operational subsystems of the tools. ELTA. For the first time we can say " that IT does not only support management. Today 120 businesses from small to medium size in Greece and thousands in Europe have installed such types of IT systems reengineering also their organizational structure. Tools such as SAP. since the technique is applicable and affordable to almost all SMEs. The public health sector is undergoing a major re-engineering in Europe using the CORBA methodology. IT changes the organizational structure". services. retailers. First the government cabinet of Egypt reengineered its processes along with many Municipals in Europe.) and public organizations that satisfy the following criteria:    Minimum Number of employees: 20 (at least 4 in management positions). Business Process Reengineering could be applied to companies that confront problems such as the following:  . As the technique was becoming well known to the business sector smaller enterprises were using the technique for organizational upgrade. This is proved by the increasing demand for BPR consultants in Greece and worldwide.like OTE. Most of the times re-engineering is applied as a "must" when innovative IT tools are introduced to SMEs. etc.4). Today most SMEs are investigating the re-engineering technique and a lot of them are applying reengineering. BPR is also being used to change the organizational structure of public services. 2.  Well formed IT infrastructure (requirements are presented in paragraph 2.2 Types of firms / organizations that BPR can be applied BRP could by implemented to all firms (manufacturing firms.

Msc. etc. is not a time consuming process. BPR HELLAS. it depends on the techniques and methodology that each consulting company (that usually participates in the procedure) is using.  2. The process management and redesign study and consulting stage. The cost of a BPR for projects applied to SMEs for selective processes varies depending on the complexity of the business environment and the number of processes for reengineering In general. Moreover. the following cost is applicable for each stage.3 Duration and implementation cost of BPR Duration The BPR technique. The implementation of the redesigned process using IT tools including employee training and introduction of the new processes to the company organizational structure. The duration of each BPR project varies from 6 -to 10 months.High operational costs   Low quality offered to customers  High level of ''bottleneck" processes at pick seasons  Poor performance of middle level managers   Inappropriate distribution of resources and jobs in order to achieve maximum performance. using the RE-engineering Methodology Oriented towards Rapid Adaptation (REMORA) proposes the following time schedule: Implementation Cost The implementation of a BPR project consists of two stages: 1. INNOREGIO project S. Zygiaris. For instance. BPR Engineer BPR Hellas SA 2. in general.4 Conditions for implementation (infrastructures required etc. 2. This variation relates to the kind of business and the extend to which BPR is going to be implemented.) .

is great.warwick.. and ROCHADE (URL www. Objectives:  To establish a strong management support . The necessary steps in a rapid re-engineering methodology are the following as they presented in figure STEP ZERO .com).com BPRC.  A network that connects all key personnel. Business Processes Resource CentreURL:http://bprc. Under the ESPRIT and the latest IST programmes.html 3 IMPLEMENTATION PROCEDURE OF BPR 3.gsm.  An exchange server (MS outlook.imsgrp.5 European Organizations Supporting the Implementation of BPR The importance and the need for Business Process Reengineering in the small and medium enterprises and to bigger companies as well. 1 Steps / Phases of a BPR project A BPR project consists of specific steps aiming to a successful outcome. there is a number of projects such as the COBRA (URL www.preparation and coordination of the project.Infrastructure requirements: An operating transactional and accounting computerized system inclosing the commercial part of the transactions. URL http://www. Duration: Two days Participants: BPR team.. The Workflow And Reengineering International Association. The European Commission has acknowledged this situation and promotes BPR and supports the efforts of SMEs to proceed to reengineering.uk/index.ch/rochade). BPR supporting organizations WARIA. BPR consultants. or MS back office or Lotus Notes) 2.  Workstations with Windows NT or Windows 1995 system or latest version.ac.waria.

Objectives:  To identify the strategic processes that are feasible to change . BPR consultants. STEP 1 . Duration: 7 weeks Participants: BPR team. delays. To explain to the members of the BPR implementation team the implementation details of the project and their role in the successful outcome in the BPR effort. the role of the implementation team in the success of the project. STEP 2 .  Identify added value processes that have a major impact on customer service.  Allocate the most capable employees to the BPR implementation team and assign roles for each one of them.  Record physical on the site measurements for each step of a process related to time.Run an 8-hour workshop having as participants the members of the BPR implementation team. ADONIS or BONAPART (see annex A-1).Business diagnosis & measurements. as well as. resources spent or efficiency (see annex A-3). personnel involved with processes Objectives: To diagnose & identify problematic areas in the current processes To measure the performance characteristics of the current processes based on measurable factors such as average cycle time. Actions taken:  Diagram each process using a process management tool such as OPTIMA. BPR consultants. Actions taken:  Explain to the top-level management the necessity to commit to the BPR project. Duration: 4 weeks Participants: BPR team. The consultants will present the project step by step.  Input all measurements in the process management tool for further evaluation and analysis.Selection of processes for change and modeling. number of mistakes or number of customer complaints.

Provide training in the operation of new processes. process coordinator. Objectives:  To automate modeled business processes (step 2) using networks and workflow tools  To redesign and model the selected processes Actions taken:  Establish network connections between process team members.Personnel adjustment & training.(see annex A-2). Objectives:  To train personnel in the new ways of working using IT in the redesigned processes. Prepare intranet applications to exchange forms and documents between team members  Prepare workflow application that will implement each step in the redesigned process automatically. STEP 4 . BPR consultants. To redesign and model the selected processes Actions taken:  Adjust each position according to skills needed in the new process. Duration: 10 weeks Participants: Process team members. To redesign and model the selected processes Actions taken:  Set the characteristics of the processes that are more important to the organizational goals  Based on the characteristics identify the processes that will change based on the added value they provide and their feasibility for change. (see annex A-3). IT experts.  Redesign processes based on the characteristics that serve the organizational goals Simulate the processes in running environment using the process management tool (see annex A-1)  Model the new process using the diagramming tool of the process management tool STEP 3 . trainers. Duration: 10 weeks Participants: BPR team.Technical design of the solution. so employees will feel comfortable in the changing job environment .

documents.  Facilitate the change process outlining the positive effects of change STEP 6 . Duration: Day and time are set by executive management Participants: The whole business organization Objectives:  To set the time and date of operating under the new processes.Continuous improvement. BPR consultants. Duration: Runs . Do not allow any non-conformities in the operations of new processes STEP 7 . emphasizing the fact that working under the old processes is not an acceptable practice. executive management.Introduction of new processes into business operations. Actions taken: Establish executive management determination for change and determinate any attempts of resistance to change. equipment) Set time and date for operating under the new processes. Duration: 1 week Participants: BPR team.Management of change & employee empowerment. process team.STEP 5 . Objectives:  To establish a positive attitude for the change between employees To minimize the resistance to change between employees by empowering their position based on performance appraisal and bonus systems. Actions taken:    Prepare and test all background resources (IT.

1 with related references to the annex. Workflow applications for implementing modeled processes (see annex A . 3. Process management tools.2 Partial techniques and tools included in each step The tools and techniques are explained in each step in paragraph 3. 2. 3.3 Related Software The are two categories of software used in implementing a BPR project 1.dynamically and continuously after the end of the project Participants: BPR implementation team Objectives:  To capitalize from the BPR project and develop internal experts for other BPR projects Actions taken:  Periodically evaluate the performance of business processes  Plan the time and the resources for the next reengineering project. performance evaluation of process (see annex A-1). used for the design.

Over the next six years Ford tried repeatedly to get his car into production.000 subscriptions with promissory notes that were later paid off by the profits from Ford business obtained by their machine shop. James Couzens paid $1. The combination of Ford's inventiveness and practicality with his own stubbornness and the skill of his colleagues made the company into a big business that did not. The Ford company is a case study in the practicalities of manufacturing that. at first. however. whi ch was an important incentive to other investors. made it possible to proceed in a different manner than many of the big businesses that emerged in the early part of the century.000. fit the mold.000 was issued.000 in cash and signed a promissory note for $1. "according to a Ford publication issued in September." Malcolmson guaranteed production financing up to $3. Henry Ford (1863-1947) was a trained machinist who was fascinated by the new horseless carriages.500. The Ford Motor Company was incorporated in 1903 "with an authorized capitalization of $150. 1920. He began to experiment with car building in the early 1890s and by 1896 he had built his first car. The center of Ford's vision. There were ten other subscribers. when combined with the opportunity to c reate a major new industry. was not the use of the assembly line but the idea that cars could belong to anyone and that he could produce and sell a practical. affordable vehicle in mass quantities. this was all the ca sh ever . It was only the sixth gasoline-powered automobile to be built in America.FORD MOTOR VISION Though Henry Ford was responsible for revolutionary advances in manufacturing it is not as often noted that the Ford Motor Company was an unusual leader in the establishment of American big business because of the firm's tightly-controlled and (by general big-business standards) under-capitalized nature.000. Ford's decision to adapt the assembly line notion to his own product met with enormous success and he was able to outstrip all his competitors very rapidly. all common stock. In all. most associated with Malcolmson. paid their $5. of which $100. John and Horace. The Dodge brothers.000 in cash and. the new company received only $28. In wh ich he would be able to put his own ideas to work.

our human relations.´ MISSION Ford Motor Company is a worldwide leader in automotive and automotive-related products and services as well as in newer industries such as aerospace. The missions can be listed as following: y Products: Our products are the end result of our efforts. our competitiveness and our profitability. Profits are required to survive and grow. y Continuous improvement is essential to our success. As our products are viewed. in their safety and value." At the beginning the new company proceeded as all car makers did. providing better products and services than our competition . The parts were then assembled into components (such as magnetos) and fina lly there was "the assembly of thousands of parts and components into the motor vehicle. so are we viewed. the owners of our business. communications and financial services. y Profits: Profits are the ultimate measure of how efficiently we provide customers with the best products for their needs. ." The production of parts and components was a capital -intensive undertaking and demand for luxury cars tended to suffer. Foundries produced the castings which were then tooled into individual parts. allowing us to prosper as a business and to provide a reasonable return for our stockholders. Our mission is to improve continually our products and services to meet our customer¶s needs.paid in on its capital stock. y Customers are the focus of everything we do. Our work must be done with our customers in mind. and in our services. and they should be the best in serving our customers worldwide. We must strive for excellence in everything we do: in our products.

The conduct of our Company worldwide must be pursued in a manner that is socially responsible and commands respect for its integrity and for its positive contributions to society. y Integrity is never compromised.y Employee involvement is our way of life. . We must treat each other with trust and respect. We are a team. y Dealers and suppliers are our partners. suppliers and our other business associates. The Company must maintain mutually beneficial relationships with dealers . Our doors are open to men and women alike without discrimination and without regard to ethnic origin or personal beliefs.

In 2006. including Lincoln and Mercury of the US. [20] Ford has been one of the world¶s ten largest corporations by revenue and in 1999 ranked as one of the world¶s most profitable corporations. behind General Motors (24.6 million automobiles. and Volvo of Sweden. Ford introduced methods for large -scale manufacturing of cars and large scale management of an industrial workforce.000 employees at about 100 plants and facilities worldwide. Henry Ford¶s combination of highly efficient factories. Ford was the second-ranked automaker in the US with a 17.4%) and DaimlerChrvsler (14. 1903.4%). especially elaborately engineered manufacturing sequences typified by moving assembly lines. a suburb of Detroit the automaker was founded by Henry Ford and incorporated in Time 16. Ford had more quality awards from J. In 2006. Ford produced about 6. highly paid workers. and the number two automaker worldwide. Based in Dearborn.1 billion. based on global revenues of $160.5% market share. Ford was also the seventh-ranked American-based company in the 2007 Fortune 500 list. In 2007. Ford now encompasses many global brands.D Power than any other automaker. .ABOUT THE COMPANY Ford Motor Company is an American multinational corporation_and the world¶s third largest automaker based on worldwide vehicle sales. and low prices revolutionized manufacturing and came to be known around the world as Fordism by 1914. Michigan. and employed about 280.6%) but ahead of Toyota (15. Jaguar and Land Rover of the ll K. Ford also owns a one-third controlling interest in Mazda.

Ford India. Presi dent and Managing Director. Nancy reports to Arvind Mathew. Supply and Total Value Management . Sales & Service Scott McCormack is the Vice President. Marketing. He took this position in July 2006. SANDIP SANYAL ² Vice President.ARVIND MATHEW ² Managing Director and President Arvind Mathew is the Managing Director and President of Ford India. She reports to Arvind Mathew. Scott reports to Arvind Mathew. President and Managing Director. Human Resources Nancy Reisig is Vice President. SCOTT McCORMACK ² Vice President. Ford India. He took this position in August 2005. Finance & IT Lucy is the Vice President of Finance and IT at Ford India. Ford India. NANCY REISIG ² Vice President. She took this position in March 2005. LUCY MILLAR ² Vice President. Human Resources at Ford India. Marketing. Sales and Service at Ford India. She took up this position in May 2005. President and Managing Director.

Failure to obtain a larger market share in foreign markets has hurt the company. Ford Credit Executive Summary Ford Motor Company is currently trying to increase its global market share in automobile sales while facing slumping market share numbers in the United States. and now controls less than one percent of the market share. Ford got a late start entering the automobile market in China. Supply and Total Value Management (TVM) at Ford India. To add to the situation the Chinese government has high taxes on automobiles that can increase the price up to 100 percent or more. Sandip reports to Arvind Ma thew. President and Managing Director. dealers.Sandip Sanyal is the Vice President. To reduce costs and increase knowledge of a region Ford uses small ERP systems that are less expensive and faster to implement than the larger ERP systems. most of which are located in the Asian-Pacific region.5 percent as compared to a year ago. The largest innovation for Ford has been the introduction of their Hybrid cars. He took this position in September 2005. Ford believes that having solid relationships with their employees. Ford has recently entered new markets. The new measures Ford is taking with their automobile design are expected to help those numbers reverse in the future. Healthy professional relationships are helpful to a company¶s success but being able to attract customers to your products will increase sales. Ford India. suppliers. and stakeholders allows them to have an advantage over their competitors. Ford sales have also under performed in the global markets although the company is taking steps to increase sales while reducin g costs. The future of Ford is . Ford has recently introduced new vehicle architecture to try and attract new buyers. STEVE BRIVLAN -. Ford reported an October sales drop of 23. compared to competitors. This report examines the Ford company characteristics and how the company uses information systems in the business climate.Country Manager.

Ford can take advantage of this because they have their own patented hybrid technology and proprietary drive system and electronic controls.headed towards a reported implementation of SAP throughout its North America organization. With these ideals Ford is proud to be a company with family-based values that allows Ford to have a competitive advantage over its competitors. Ford offers the Escape Hybrid which has seventy-five percent better fuel economies. Many competitors have not even considered hybrids and when they do Ford will already be a step ahead of them. strong business and a better world. which offers many competitive ways for their customers to own Ford vehicles. especially in the city. dealers. To accomplish that mission the Ford Company believes that not just quality and cost awareness are the only things that matter. The proper use of information systems by Ford will increase their ability to maintain a successful business in future years locally and globally. improve quality and customer satisfaction. because of their new realigned vehicle architecture. There were forty new products in one year. Ford also has a service for their customers. Ford¶s mission is to build great products. encourage continuous development and mutual benefit. Currently. (Ford motor company. To do that the Ford company will have to cultivate a workplace that: attracts and retains the best people. and improve results at all automotive operations. Plus. improve market share and revenue in all regions. 2004). allow them to work at full potential. suppliers. the Ford Motor Credit Company. It¶s the only product that does not have wheels and it¶s the finishing piece to Ford¶s core businesses. But the biggest innovation for Ford is the hybrid. and promote teamwork while embracing differences and diversity. To accomplish this strategy Ford has put pressure on senior leaders to develop a true family culture. The strategy for Ford will be to continue to deliver exciting new products. In the next three years Ford plans on releasing four more hybrids. 2004). The keys to Ford¶s strength are the products. With this competitive advantage Ford believes that everything they do affects the people they serve from quality and safety of their products to the social and environmental impact on their customers every day lives. 2004) . This allows Ford to produce a greater variety of attractive and competitive vehicles with more shared c omponents and less complexity (Ford motor company. the Escape Hybrid can do anything the regular Escape can do and has the same features. but also a solid relationship with their employees. The Ford Motor Company is an ever -changing business that tries to stay ahead of its competitors in America and at the global level. and every Ford stakeholder (Ford motor company.

2004). To do this Ford must still be focused on America and Europe. in multiple languages. 2004). South America. Ford has plants with flexible manufacturing. If Ford is going to turn in better numbers in car sales it will have to be an increase in sales not only in America but globally. As the World¶s second largest vehicle maker and the World¶s largest truck producer Ford Motor Company must be able to maintain global market share while keeping the global compa ny connected through company intranets and extranets.Ford North America holds half of Ford¶s volume worldwide.3 billion from 2003. Because of Ford¶s global scale. but their market share was down from 20. and Asia. Ford Motor Company recently reported a drop in automobile sales of 23 percent.5% in 2003 to 19. Ford has made gains in other areas as well. One way technology and information systems are helping Ford is in the manufacturing of the vehicles. and across multiple time zones Ford is trying to keep the company focused on delivering greater value to its customers. North America and Japan. Technology and information systems are very important to the Ford Company. and will continue to forge ahead to create better quality products. The result of Ford using this system has lead to cost savings in the followin g . Ford continues to be a leader in automotive technology and informatio n systems. net income where Ford had an improvement of $2. While operating a business over multiple continents. also worldwide vehicle unit sales and European market share were up from 2003 (Ford motor company.3% in 2004. meanwhile it makes the infrastructure of Ford that much more complicated. but by 2014 it will only account for half of the world markets (Ford motor company. Right now North America and Europe account for two-thirds of today¶s market. that allows Ford to produce a number of different vehicles in a single location. To keep the organization and its emplo yees connected over large distances Ford is using a system called eRoom. With the addition of technology. 2004). information needs to be timely so managers can make important decisions. the vast machinery involved (Ford motor company. total sales and revenue were up $7. Ford is committed in the year 2005 to raise the market share in Europe. In established markets such as Europe. rather than retooling. It enables Ford to add a vehicle line or change over to a new model by reprogramming. This technology allows Ford teams to work collaboratively over the Web to connect resources and people. Ford can make better p roducts at a cheaper price. and start to set up markets in other countries li ke China that are just starting to make an impact on the world market.992 billion from 2003. Ford tries to introduce new technologies so that environmental and safety features can be added to vehicles before law requires them.

These reduced costs and the increa se in information accessibility are the result of one of the key ways Ford is continuing to compete globally. On the other side of the equation the reducing market share for Ford has been offset by an increase of U. in part. Problems with Ford entering this market share include China¶s recently flat market for automobiles. a result of increased gasoline prices.S. compared to other competitors already in the market. lower costs than a large ERP. has left the company with less one percent of the market share. Each time a system is deployed in a new market the company gains valuable experience and knowledge that helps the company in future deployments in other new markets. reduced IT costs. The recent drop in sales of 23 percent reported in October of 2005 as compared to a year ago is. This small ERP system is another factor for Ford¶s global success. This ERP is Ford¶s standard program for all new markets. No matter what measures any company that competes globally uses to increase its competitiveness there are also factors that present problems. A couple such factors lie in the Asian market that is expected to have an increase in the global automobile market share. The future of Ford Motor . and government vehicle taxes. a focus on the development in housing instead of roads. video-conferencing costs. Any shift in priorities or lift of government constraint is labeled as an educated gue ss. Reduced co-location costs will be made through reduced travel costs. market share by Toyota. The vehicle taxes are so high that they can raise the price of an automobile 100% or more. The implementation of a smaller ERP results in quick installation. Ford is also implementing smaller ERP systems in regions where they have just recently entered the market. Replacing many Ford departmental websites with eRoom will reduce IT costs by doing away with IT overhead associated with building and maintaining those websites. called Mfg/Pro. The price increase has pushed new car buyers towards buying more fuel-efficient cars.areas: time savings. Time is saved using eRoom through increased data sharing and the ability to access documents faster. and reduced co -location costs. November sales are expected to drop as much as 15 percent which would imply that more recent drops in fuel prices have apparently failed to turn around Ford¶s sales numbers. and reduced information transmission costs. and quick knowledge into the new market. Extensions to the standard ERP software make it possible for Ford to comply with foreign practices and government mandated financial statem ents. Although Ford is now competing in the Chinese market their late start. Ford China¶s IT infrastructure is based on a small ERP from QAD Inc.

Get the right product and the rewards are handsome. There are many determining factors when it comes to running a successful company. management. management. Those factors are productio n. Sales marketing is all about how you present your product and will it reach the public with a positive influence. Production. India is changing.S. Information is power and is the key to running the best possible company that you can run. the 800. . and Mahindra & Mahindra. It is very important to have departments that concentrate heavily on a daily basis to improving the output to lead to better production and marketing strategies. office. It is the Alto. and sales/marketing. It¶s moving forward. It¶s been a long journey but to see where the Indian car industry is going. India¶s largest-selling car is not its cheapest car. have got their finger on the pulse of the market.Company¶s success strongly relies on the company increasing market share globally while keeping their sales consistent in the U. And changing fast. and an increasing number of carmakers are preparing to setup major capacities here. This is the key to keeping your company running and continuing to excel and compete against others. It was everything that a taxi driver wants. They rose to the challenge of the MNC¶s and responded brilliantly with the Indica and the Scorpio. low on running cost. This was ironically due to the license raj that forced Indian car makers to be innovative and develop products frugally. You need knowledge and information about what the people want to get your product out there so it will be known. People¶s aspirations are rising and so are their mistakes. Knowledge is the key with the right information you can keep all of your departments on the right path. . easy to drive and reasonably tough. With loads of information gives you an edge on the competition. You need efficient information and knowledge to keep these elements of the company running smoothly. office. The Indian auto industry is today bubbling with promise and confidence. India¶s frugal engineerin g skill has now caught the world¶s imagination. aintenance in terms of spares and labour cost. People need to be aware of the product so they have an urgency to buy it. We have to see where it has been. and sales marketing go hand in hand you need specific and current information to keep these departments running smoothly.

nimble handling and perky engine. On l4LhDecember 1983. as its full name suggests. which was called the Fronte in Japan and A/tom most of the other markets. The Maruti 800. friendlier alternative.Established in 1945. Telco or the Tata Engineering and Locomotive Company. three-cylinder power plant produced 39. started out making steam locomotives for the Indian Railways.000 more than the outgoing model. with its compact size.48. The new Maruti. Hindustan Motors with General Motors and Ashok Leyland with British Leyland ² which all started truck production around the same time. cost approximately Rs 15. in-line. Telco¶s biggest triumph came in 1985 in the LCV segm THE The Car that changed India: The Maruti 800 was essentially a Suzuki SS80. This period was a shared birthing time for the Indian commercial vehicle industry ² Premier Automobiles in league with Chrysler.000. The director in charge from the Tata side was Sumant Moolgaonkar. offered the Indian motorist a cheaper. Maruti marked the beginning of a revolution in the Indian automobile industry. Harpal Singh became Maruti¶s first customer as he received the keys of his Maruti 800 car from Prime Minister Indira Gandhi.5bhp at 5500rpm. Telco¶s tryst with vehicle manufacture came in 1945 when it signed a 15 -year agreement with Daimler-Benz AG of Germany to manufacture commercial vehicle. The car cost Rs. launched in June 1986. FORD PRODUCTS . The 796cc.

FORD IKON SPECIFICATIONS Engine Type Fuel System Displacement (cc) Compression Ratio Max.3 Rocam 4-In-line SEFI 1297 10.2 : 1 70PS/5500 105/2500 Bharat stage III 5 Speed manual Ikon 1. Torque (nm/rpm) Emission Stage Transmission type Ikon 1.0 : 1 68PS/4000 160/2000 Bharat stage III 5 Speed manual FORD ENDEAVOUR .4 DuraTorq TDCi 4 in-Line TDCi common rail 1399 18. Power (ps/rpm) Max.

0 Litre TDCi with Variable Geometry Turbocharger (VGT) 2953 2. Torque (nm/rpm) Valve Fuel System Transmission Endeavour 3.7 kgm) @ 2500rpm DOHC.5L 4x4 4x2 5 speed Automatic Electric Shift on Fly 5 speed manual N/A Transmission 4x4 Transfer FORD FIESTA .7 kgm) @ 1800rpm DOHC.0L Endeavour 2. 16 Valves Direct injection common rail 330 Nm (33.5 Litre TDCi with Variable Geometry Turbocharger (VGT) 2499 Type Displacement (cc) Max.5L 4x4 4x2 3. 16 Valves Direct injection common rail Max.0L Endeavour 2.Engine Endeavour 3. Power (ps/rpm) 156 PS (115 Kw) 143 PS (105 Kw) @ 3200rpm @ 3500rpm 380 Nm (38.

Independent Independent McPherson McPherson struts with struts with offset coil offset coil spring / spring / twin tube twin tube gas damper gas damper units & units & lower Llower Larms with arms with optimised optimised bushes bushes mounted on mounted on seperate seperate crosscrossmember member with with stabiliser stabiliser bar.6 Duratec Exi Limited Independent McPherson struts with offset coil spring / twin tube gas damper units & lower Larms with optimised bushes mounted on seperate crossmember with stabiliser bar. Dualpath body mounts. Rear SemiSemiSemiSemiindependent independent independent independent heavy duty heavy duty heavy duty heavy duty twist-beam twist-beam twist-beam twist-beam with low with low with low with low package package package package .6 Duratec 1. mounts.6 Duratec Zxi Sxi Front Independent McPherson struts with offset coil spring / twin tube gas damper units & lower Larms with optimised bushes mounted on seperate crossmember with stabiliser bar. Dualpath body mounts. Dualpath body path body mounts.SUSPENSION 1. Dualbar.6 Duratec Exi Fiesta 1. 1.

6 Duratec Exi Limited 1.6 Duratec Exi height coil springs & seperate twin tube dampers.height coil springs & seperate twin tube dampers. Dual-path body mounts. Gas Filled Fiesta 1. Gas Filled height coil springs & seperate twin tube dampers.6 Duratec Zxi 1. Shock absorbers (Front & Rear) BRAKES Gas Filled 1.6 Duratec Sxi Front Ventilated Ventilated Ventilated Ventilated Discs Discs Discs Discs Self Adjusting Drums Self Adjusting Drums Self Adjusting Drums Self Adjusting Drums Rear FORD FIGO . Dual-path body mounts. Gas Filled height coil springs & seperate twin tube dampers. Dual-path body mounts. Dual-path body mounts.

4) 102(10.250 1.000 @ 4.2 Duratec 1. twist beam.250 Displacement (cc) Type Fuel system Max.4) @ 6.2 Duratec Petrol Titanium 1196 16V DOHC SEFI 71 (52. torque (nm(kgm)/rpm) 102(10.000 SUSPENSION 1. Coil springs Coil springs Coil springs Coil springs Front Rear .250 1.4) @ 6.2 Duratec Petrol EXI 1196 16V DOHC SEFI 71 (52. twist beam.2 Duratec 1.4) @ 4. twist beam. power (ps(kw)/rpm) Max.4) @ 6.2 Duratec Petrol LXI 1196 16V DOHC SEFI 71 (52.2 Duratec Petrol LXI Petrol EXI Petrol ZXI Petrol Titanium Independent Independent Independent Independent McPherson McPherson McPherson McPherson strut with strut with strut with strut with dual path dual path dual path dual path mounts mounts mounts mounts SemiSemiSemiSemiIndependent Independent Independent Independent twist beam.4) 102(10.250 1.000 @ 4.2 Duratec 1.2 Duratec Petrol ZXI 1196 16V DOHC SEFI 71 (52.4) 102(10.000 @ 4.4) @ 6.ENGINE 1.

CONSIDERING THE INDIAN MARKET TYPE WHERE THE CONSUMERS CAN BE SUB.2 Duratec Petrol EXI Hydraulic power assisted Hydraulic power assisted 1. BUT THE CONSUMERS ARE MAINLY CONCENTRATED IN THE 2.DIVIDED IN VARIOUS CATEGORIES DEPENDING ON THEIR INCOME BRACKETS STARTING ROM APPROX 1 LAKH TO ANY AMOUNT.75 LAKHS. Targeting.Steering BRAKES Hydraulic power assisted 1. IT HAS TARGETTED THE INDIAN MARKET WITH A PURCHASING POWER OF APPROX.2 Duratec Petrol Titanium Front Rear Ventilated Ventilated Ventilated Ventilated Disc Disc Disc Disc Drum Drum Drum Drum CONCLUSION FORD HAS PROVIDES A WIDE RANGE OF CARS IN THE INDIAN MARKETS AS MENTIONED ABOVE. 4.2 Duratec Petrol LXI Hydraulic power assisted 1. STP ± Segmentation. FOCUSING ON THE CUSTOMER¶S DESIRED WANTS AND RELATED PRODUCTS IN THE INDIAN MARKET SCENARIO.2 Duratec Petrol ZXI 1. Positioning Segmentation .75 TO 20 LAKHS BRACKET WHICH HAS BEEN PAID A SERIOUS AMOUNT OF ATTENTION BY THE FORD MARKETING TEAM THUS.

are the people in the proposed segment all similar without too many differences .the group has to be large enough to "generate sufficient sales volume at a low enough cost to result in a profit " says Sommers 10th Ed.right handed and left handed might not be worthwhile if you are talking about a market segment for a product like pull -on boots 3.things you have to think about in order to decide if a potential group is worthwhile being considered a "segment" 1..you could say right handed people is a segment. some SUVs and some cars and some mini -vans ..The main reason why we have Segmentation is because we have so many types of customers. Homogenous .. and speak Spanish and right motorcycles might be too small . and half were men. but. Competition Sommers 10th Ed. become more numerous.some people buy trucks. then this might not work if the gender also was an issue.the people in the segment should be large enough in number to be wor thwhile . who wear glasses. we have many more types of segments 2. if half the right handed people were women. The reason why Segmentation has become important in teaching and learning about marketing is because these groups of different customers have: 1. 4.right handed men might be a large enough segment . The groups have become large in number Criteria for Segmentation . suggests that a company should target segments "where the number of competitors and their size are such that the firm is able to compete effectively" example . Heterogeneous .the people between the segments should be very different . Substantial . 2.right handed men. The differences among groups have become more d istinct 3.

the car was unveiled at a press event in Delhi as a major addition to the Ford India brand portfolio. .which would mean reconfiguring the fabric pattern cut-out which would effect fabric cost. Called the new Ford Figo. 5.some companies have a product segment devoted to truck buyers. waste amounts.car companies.. If the company can mfg. He stated the new Ford Figo is designed and engineered to compete in the heart of the domestic India car market. great. Targeting y y y Ford Motor Company President and CEO Alan Mulally revealed the much-anticipated new car to be produced in India. like Ford . Mulally¶s visit underscores the strategic importance of India in Ford¶s future plans. suggests that a company should make sure the segment relates to the resources of the company. variations to fit its key demographics. but it should not take on additional demographics if it does not have the capability example . like Nissan and Toyota might be advised to avoid selling trucks in North America because the competition is int ense and they might not make a profit. etc. The new Ford Figo will be manufactured at Ford¶s expanded integrated manufacturing facility near Chennai.a lingerie company taking on plus sizes . which is . Resources Sommers 10th Ed.

India. Ford¶s investment in its Chennai plant gears it for eco-friendly volume production and positions Ford India to become a major export producer. Alan Mulally. which accounts for more than 70 percent of the new vehicle market. sharing underlying technology with the Ford Fiesta. Sept.undergoing a $500 million transformation to become a regional centre of excellence for Ford small car production. Ford¶s $500 million investment has doubled the plant¶s production capacity to 200. ³Our exciting new Ford Figo shows how serious we are about India. a new nameplate and a fresh face on the Indian market. eco -friendly production techniques. DELHI. It leverages Ford¶s small-car platform architecture.000 units per year and introduces major advances in high-quality automation and innovative. ³It reflects our commitment to compete with great products in all segments of this car market. already familiar to Indian drivers. signals Ford¶s intention to compete in India¶s largest and most important small car market segment.´ Ford Figo is designed and engineered to compete in India ¶s small car segment. unveiled an all-new car targeting the heart of the Indian car market ± the new Ford Figo. . We are confident the Ford Figo will be a product that Indian consumers really want and value. The Ford Figo. 23.´ Mulally said. 2009 ± India¶s role as an important player in the future of Ford Motor Company¶s international strategy was underscored today when the company¶s President and CEO. y The importance of Ford Figo extends beyond India¶s borders. Ford Figo is the result of a significant Ford investment commitment to expand its plant near Chennai for volume production as a small -car centre of excellence regionally.

Ford will have the freshest. which includes the return of the Taurus sedan. most contemporary lineup in the business and the newest fleet of vehicles ² in terms of age ² on the road.com.autoextremist. and restyled Lincoln MKS and MKT vehicles. a restyled Ford Flex crossover with its patented EcoBoost engine. On his blog. they are aggressively boosting their presence in the market with an array of impressive products that will transform the company. ³It became quickly apparent to everyone that this company is more than just on the move. a high-performance version of its popular F-150 pickup truck.Positioning Ford unveiled its 2010 product lineup. ³Over the next 18 months.´ DeLorenzo wrote. Detroit-based automotive industry analyst Peter DeLorenzo wrote about Ford¶s unveiling of its product mix to a group of automotive journalists. www.´ .

Revenue for the period declined 40 percent. DeLorenzo wrote. They also have scaled back manufacturing operations to align supply with demand and have taken steps to create a global manufacturing platform that will allow the company to use common technology and suppliers for vehicle offerings worldwide.´ SWOT ANALYSIS Strengths -4th on the Fortune 500 List (U. compared with a loss of $8.S.000 or 500. Ford reported that it had a profit of $2. depending on the state of the economy and changes in fuel prices.2 billion from $41.7 billion a year earlier.000 units of any vehicle. Ford and its competitors must aim at a moving target in trying to figure out what will sell. are over. Consumer demands shift continuously. only) -4th on the Global 500 List -39th on the Best Companies for Minorities List .´ Hinrichs said. except maybe the F-150. both from a product standpoint and a reputation standpoint. to $27. ³The days of selling 400.3 billion in the second quarter. ³Now we need to figure out how to make the same money selling lower volumes.´ ³Ford¶s in a pretty good position.1 billion a year earlier.That product lineup ³is going to pay off big-time´ for Ford. The best way to do that is to go after a number of smaller niches.

Electricity.70.1 Billion -$13 Billion on Acquisitions -$3. Water .Gave Generously after the September 11 Attacks . Lowest In Years -CEO Jacques Nasser and Chairman Bill Ford Jr. Sunlight.-One of world¶s best known brands -Their Web strategy has cut car build costs by as much as $380 per car -Have already invested heavily in alternate fuel sources -Ford are seen as supportive eg . -Internal strife will hurt the company. NASCAR.Support Racing Teams. Ethanol. could not get along Leading to Bill Ford taking over as CEO -Cash Reserves Have Sunk to $4. Vegetable oil. Threats -Competition is huge.Give Generously to Help Fight Breast Cancer . "boring " Opportunities -Have a chance to become more environmentally friendly with cleaner engine emissions and by working with environmental groups to help clean the environment -Ford have already started investing in Solar Power .5 Billion to Cover Tire Recalls -Sometimes seen as "safe".and have a chance to become a market leader -They can use their Web strategy to cut costs further -They can take advantage of their perceived generosity by giving to more charities and using the fact in their targeted advertising. -Threat of substitute products such as Natural gas. Formula One Etc Weaknesses -Firestone Tire recalls caused Stock Price to Suffer--$14.

the marketing strategy provides the design for achieving them. It is partially derived from broader corporate strategies. defining how the organization will successfully engage customers.-Intensity of Rivalry among competitors worldwide -Worldwide markets threatened due to t he "War on Terrorism" MARKETING STRATEGY OF FORD A marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. 1. marketing strategy is closely linked with sales. its product lines. corporate missions. it is the job of marketing strategy to indicate how and wherefrom this sale and profit will come. the competition and the market segments or target markets the company wishes to pursue. A key component of marketing strategy is often to keep marketing in line with a company¶s overarching mission statement. designed specifically for attaining the marke ting objectives of the firm/business unit. Marketing strategy is the complete and unbeatable plan. A strategic marketing plan usually evolves from an organization¶s overall corporate strategy and serves as a guide for specific marketing programs and policies.000 crore and a net profit of 15 percent of sales revenue. Any organization that wants to exchange its products or services in the market place successfully should have a Strategic Marketing plan to guide the allocation of its resources. Marketing strategy is based on a situation analysis. The marketing objectives indicate what the firm wants to achieve. prospects. it should achieve a sales revenue of Rs. and corporate goals. A marketing strategy is most effective when it is an integral component of corporate strategy.a detailed assessment of the current marketing conditions facing the company. . if the marketing objectives of a business unit stipulate that next year. As the customer constitutes the source of a company¶s revenue. For example. and competitors in the market arena. which product lines/products/brands will accomplish this task and how. a firm develops an understanding of the market and the various opportunities it oilers. Marketing strategy forms an integral part of marketing planning. or its individual brands. From this situation analysis.

7. Of course.Public relations 20. Product Opportunity 8. Ultimate consumer 12.Target marketing 10.PROCESS MARKETING AND PROMOTIONS MODEL: Development of marketing program requires an in -depth analysis of the market. Buyer 11. distribution and promotion decisions. Marketing Strategy and Target marketing Market planning analysis process program development target market 1. Target marketing 4.Direct marketing 17.Promotion to trade Resellers . the promotional program element must be combined with all other program elements in such a way as to achieve maximum impact.Market segmentation 3.Interactive marketing 18.Advertising 16. Channel 14.Competitive analysis 9. Once the detailed market analysis has been completed and marketing objectives have been established. Positioning through marketing strategies 5. This analysis may make extensive use of market research as an input into the planning process. Pricing decisions 6.Personal Purchase 21. Each of these steps requires a detailed analysis. in mm. Identifying markets 2. provides the basis for the development of marketing strategies in regard to product.distributi on promotion to final This input. each element in the market mix must contribute to a comprehensive integrated marketing program. Promotional decisions 15.Consumers Businesses 13. pricing. since this plan serves as the road map to follow in achieving marketing goals.Sales promotion 19.

It needs to be clarified at the outset that market targeting is not synonymous with market segmentation. The target market shows to whom the unit intends to sell the products. assumes crucial importance. Positioning the offer. 3. a firm divides the market into many segments. There may be segments assuring immediate profits and the ones that call for heavy investments in market development. Assembling the marketing mix. A selection is thus involved in it. Targ et market signifies only those segments that it wants to adopt as its market.Formulating the marketing strategy: Basically. an important part of the marketing stra tegy of the product is determined. 2. There may also be segments that show great potential. The three together constitute the marketing strategy platform of the given product. but display tough barriers to entry. which segment/segments. the firm should select as its target market. Segmentation is actually tee prelude to target market selection. the way it is positioned and how the marketing mix is organized. the unit intends to sell. Marketing segmentation is a process that throws up not one but several market segments. It does not fully bring out the import of the inseparable linkage between the two. One has to carry out several tasks besides segmentation before choosing the target market. When the selection of the target market is over. the question. formulation of marketing strategy consists of three main tasks: 1. STRATEGIC MARKET SEGMENTATION: . As such. Selecting the target market. Marketing targeting simply means choosing one¶s target market. SELECTING THE TARGET MARKET: To say that target market selection is a part of marketing strategy development is just stating the obvious. This implies that the essence of the marketing strategy of a firm for a given product or brand can be grasped from the target market chosen. Through segmentation. But all these segments need not form its target market. p ositioning and marketing mix together show how and using what uniqueness or distinction. There may be segments that are sizeable and the ones that are not so sizeable. defined and expressed.

form one base for segmentation. Geographic characteristics constitute another. and William Redulius. The significance of product positioning can be easily understood from David Ogilvy¶s words: ³The results of your campaign depends less on how we write your advertising than on how your product is positioned´. Finding ways to group the marketing action s ² usually the products offered ² available to the organization. The Segmentation process involves five distinct steps: Finding ways to group consumers according to their needs. 3. 2. Definitions of product positioning: Sengupta. in his book Brand Positioning says. For example.Taking marketing actions to reach target segments. income/purchasing capacity.Kerin. 1. In positioning. education level etc. and buying behavior of the consumers forms yet another base. such as age. The various types of segmentations are ‡ Geographic segmentation ‡ Demographic segmentation ‡ Psychographic segmentation ‡ Buyer behavior ‡ Benefits segmentation ‡ Volume of purchase segmentation Positioning is a platform for the brand.´ Positioning is the act of fixing the locus of the product offer in the min ds of the target consumers.Market Segmentation is ³dividing up a market into distinct groups that (1) have common needs and (2) will respond similarly to a marketing action´. demographic characteristics of consumers. the product offer has to be placed before the target consumers. It is defined as ³the art and science of fitting the product or service to one or more segments of the broad market in such a way as to set it meaningfully apart from competition. which was said by Eric N Berkowitz. Roger A. ³The aim of product positioning is to create a perception for our brand in the prospect¶s mind . sex. Markets can be segmented using several relevant bases. the firm decides how and around what parameters.Developing a market-product grid to relate the market segments to the firm¶s products or actions. It facilitates the brand to get through to the target consumers.Selecting the target segments toward which the firm directs its marketing actions.

We must find a strong position in that mind and sit on it.. 1.. In the first step. What position.so that it stands apart from competing brands. i. Do we have the guts to stick with one consistent positioning strategy? 6. Product positioning denotes the specific product category/product class in which the given product is opting to compete. Does our creative approach match our positioning strategy? PRODUCT POSITIONING AND BRAND POSITIONING: It is essential to understand the relationship between products positioning and brand positioning. In this step.. The concept now refers to the place that the brand holds in the consume r¶s mind related to perceptions and preferences´. And brand positioning denotes the positioning of the brand viz-a viz the competing brands in the chosen product category.. do we already have in the prospect¶s mind? 2. if any.. What companies must be outgunned if we are to establish that position? 4. Do we have enough marketing money to occupy and hold the position? 5. the two terms are synonymously and interchangeable used. before entering the market it has to sequentially carry out the two exercises. Once product category positioning is decided. against what all products it has to compete. the position for the new entrant against competing brands in the chosen product category has to be analyzed and fixed. Concerning market structure. What position do we want to own? 3. in his book Marketing Communications ² From Fundamentals to Strategies says. Though in discussions.. Trout and Ries suggest that managers ask them selves six basic questions. Developing a Positioning Strategy: To create a position for a product or service. the product category where the new entrant should enter and compete. . product positioning and brand positioning.´ Michael Rothschild. has to be decided. This choice of product categ ory will decide the nature of the competition the product is going to face. technically they are different. ³Positioning refers to the place a brand occupies in the mind in relation to a given product class.. This place was originally a product-related concept. it is the broad function that the product is trying to serve that matters..e. It is evident that for any product. we must cover that space in the consumer¶s mind as if we had won a long-term lease.

The Product Differentiation and Positioning discusses the multifarious i ssues involved in the subject. The product is provided with some new features or it is . the firm will agitate over these issues. even products that are fairing well are repositioned.Which are the competing brands in the chosen product category? What are the unique claims/strengths of the various brands? .. where is such a new offer most welcome and wanted by the market? -What are company¶s competencies to fight here? ISSUES IN BRAND POSITIONING: In deciding the Brand positioning.Can the new brand claim the needed distinction and take the position and satisfy the need? The major dimension of marketing strategy relates to positioning of the offer. This is done mainly to enlarge the reach of the product offer and to increase the sale of the product by appealing to a wider target market. PRODUCT REPOSITIONING: Products do undergo µrepositioning¶ as they go along their life cycle. Now. while formulating the marketing mix too.? And yet vacant? . the issues are: . what are the substitute products that serve the same need? -Where is the real gap. what is the conjunction between these two entities? How do they get connected? What is the interface? In other words.Which product function/customer need is it trying to meet? -What other product categories serve this need? In other words.What position do they enjoy in consumer¶s evaluation and perception? What is the most favoured position.. In some cases. The firm has already selected the target market and decided its basic offer. What is the locus the firm seeks among the customers in the chosen target market with its offering? How would the firm want the consumer to view and receive the offer? These are the issues the firm has to grapple with in positioning.ISSUES IN PRODUCT POSITIONING: Where is the new offer going to compete? . And.

we view direct marketing as a component of the promotional mix. and strategies. It has become such an integral part of the IMC program of many organizations and often involves separate objectives. probably because of its pervasiveness. While implicit communication occurs through the various elements of the marketing mix.S. It is a very cost-effective method for communicating with large audiences. One of the major tools of direct marketing is direct response advertising. or idea by an identified sponsor.associated with some new target segments. in which organizations communicate directly with target customers to generate a response and a transaction. The paid aspect of this definition reflects the fact that the space or time for an advertising message generally must be bought. PROMOTIONAL DECISIONS: Promotion has been defined as the coordinatio n of all seller initiated efforts to set up channels of information and persuasion in order to sell goods and services or promote an idea. economy is direct marketing. particularly for companies. It is also very important promotional tool. telemarketing and direct response ads through direct mail. the Internet. and various broadcast and print media. Advertising is the best-known and most widely discussed form of promotion. whose products and services are targeted at mass consumer markets. An occasional exception to this is the public service announcement. whose advertising space or time is donated by the media. service. whereby a product is promoted through an ad that . including database management. product. It involves a variety of activities. budgets. Direct Marketing is much more than direct mail and mail order catalogs. Direct Marketing: One of the fastest-growing sectors of the U. It can be used to create brand images and symbolic appeals for a company or brand. most of an organization¶s com munications with the market The basic tools used to Accomplish an organization¶s communication objectives are often referred to as the Promotional mix. direct selling. The promotional mix Advertise in Direct Interactive Sales Publicity/ marketing promotion Public ‡ internet facilities Advertising: Personal selling Advertising is defined as any paid form of non personal communication about an organization.

or the ultimate consumer and can stimulate immediate s ales. the distributors. distributors and retailers. which is generally defined as those marketing activities that provide extra value or incentives to the sales force. the new media allow users to perform a variety o f functions such as receive and alter information and images. Public relations are defined as ³the management function which evaluates public attitudes. sweepstakes. or idea not directly paid for or run under identified sponsorship. Unlike traditional forms of marketing communications such as advertising. Public relations generally have a broader objective than publicity. and various point -of-purchase materials. r ebates. premiums. It usually comes in the form of a news story. product. Trade-oriented sales promotions are targeted towards marketing intermediaries such as wholesalers. Like advertising. In addition to the Internet. publicity is not directly paid for by the company. Kiosks. Personal Selling: . which are one -way in nature. and interactive television. editorial or announcement about an organization and its products and services. Publicity/Public Relations: Publicity refers to non personal communications regarding an organization. since the company is not paying its time or space in a mas s medium such as TV. Interactive/Internet Marketing: Interactive media allow for the back-and-forth flow of information whereby users can participate in and modify the form and content of the information they receive in real time. make inquiries. An advantage of publicity over other fo rms of promotion is its credibility. radio or newspapers. as its purpose is to establish and maintain a positive image of the company among its various publics. respond to questions and of course make purchases. other forms of interactive media include CD ROMs. sales promotion is generally broken into two major categories: Consumer-oriented and Trade-oriented activities Consumer-oriented sales promotion is targeted to the ultimate user of a product or service and includes couponing.encourages the consumer to purchase directly from the manufacturer. identifies the policies and procedures of an individual or organization with the public interests and executes a program o f action to earn public understanding and acceptance´. Sales Promotion: The next variable in the promotional mix is sales promotion. sampling. contests. Another advantage of publicity is its low cost. service.

Personal selling involves more immediate and precise feedback because the impact of the sales presentation can generally be assessed from the customer¶s reactions. Unlike advertising. Not only will he take due note of them. either face-toface or through some form of telecommunications such as telephone sales. personal selling involves direct contact between buyer and sell er. promotion and pricing constitute the marketing mix of the firm. It can be easily seen that all activities and progr ammes. packaging is one of the sub -elements of product and warehousing is one of the sub-elements of distribution. It then chooses the combination/mix of products. . Of course. µThe marketing man is a decider and an artist ² a mixer of ingredients. To quote him. place and promotion that is best according to its judgment. For example. Since marketing is essentially an interaction between the marketing mix and environmental variable. which a marketer designs and caries out in his effort at winning customers. It can also be seen that in each of these elements.It is a form of person-to-person communication in which a seller attempts to assist and persuade prospective buyers to purchase the company¶s product or service or to act on an idea. The firm has to find out how it can generate the targeted sales and profit. distribution. The Four Ps of Marketing: It was James Culliton. Involved in this process are the choice of the appropriate marketing activities and the allocation of the appropriate marketing effort/resources to ea ch one of them. The marketing mix is the sole vehicle for creating and delivering customer value. there are several sub-elements. a noted marketing expert. price. And. the marketing manager will take due note of the environmental variables. MARKEGING MIX: THE SOLE VEHICLE FOR CREATING AND DELIVERING CONSUMER VALUE The four elements mentioned above . it ¶s factors that renders that task much more complex. he will ensure that his marketing mix suits the environmental variables. and since the latter and non -controllable. marketing becomes synonymous with assembling and managing the marketing mix. It considers different marketing mixes with varying levels of expenditure on each marketing activity and tries to figure out the effectiveness of different combinations in terms of the possible sales and profits. Assembling the marketing mix means assembling the four Ps of marketing in the best possible combination. place. promotion and pricing.product. who sometimes follows a recipe. relate to one or the other of the above four elements . who coined the expression marketing mix and described the marketing manager as a mixer of ingredients.product. while assembling the marketing mix.

developed by others and sometimes prepares his own recipe. Borden. they elbow out competition with the cushion they enjoy in the matter of pricing. or. MARKETING STRATEGIES FALL UNDER TWO CATEGORIES: We have seen that target market selection. popularized the concept of mar keting mix. Over the years. However. the well-known American professor of marketing. As a result. And. We have also seen that a firm can assemble the marketing mix elements in many different ways. It was Jerome McCarthy. And. in fact immense. They can afford to offer lower prices and still make the targeted profits. it is through the marketing mix that the marketing manager achieves the marketing objectives. who first described the marketing mix in terms of the four Ps. experiments with ingredients as no one else has tried before. PRICE ORIENTED MARKETING STRATEGY 2. Firms taking to the price route in marketing strategy compete on the strength of pricing. DIFFERENTIATION ORIENTED MARKETING STRATEGY In other words. Price route requires cost leadership. sometimes he adapts his recipe to the ingredients that are readily available and sometimes invents some new ingredients. They juggle the price of their product to suit the prevailing competitive reality. there are only two broad routes available for forging marketing strategies: any strategy has to be ultimately either a priceoriented strategy or a differentiation-oriented strategy. positioning and market ing mix formulation together constitute marketing strategy. another noted marketing expert. evidently. business firms are able to employ an abundance of strategies and strategy stances in their relentless race to stay ahead of competition. ‡ Product ‡ Place ‡ Price ‡ Promotion McCarthyhas provided an easy-to-remember description of the marketing mix variables. He classified the marketing mix variables under four heads. a close scrutiny will reveal that all these strategies can be fitted into two broad categories 1. Subsequently. They use price as their competitive lever. a firm opting for the price . the terms ² Marketing mix and Four Ps of marketing have come to be used synonymously. Niel H. Assembling and managing the marketi ng mix is the crux of the marketing task. each beginning with the alphabet ³P´. depending on the relative weightage it assigns to the different elements. The scope to carve out diffe rent combinations is.

a firm adopting such route can price its product on the perceived value of the attributes of the offer and not necessarily on competition -parity basis. a large market share built over a period of time. As a result of this non -reliance on the Internet. Packaging contributing to differentiation. a firm should have consciously taken to the idea sufficiently early in its evolutionary process and prepared itself for adopting such a strategy. The cost advantage can emanate from different factors like. person-to- . 2. Differentiation based on functional value. It should be enjoying an overall cost leadership in the given industry and its lower cost should enable it to secure above average returns in spite of strong competition. Product differentiation is of vital importance in product management and has great potential in forgoing succ essful marketing strategies. Digital Marketing is the practice of promoting products and services using digital distribution channels to reach consumers in a timely. While all the 4Ps of marketing are important elements from the point of view of strategy. And. scale economies. The firms whole strategy. especially recommendations. but also general information. or synergy among the differe nt businesses. it extends beyond this by including other channels with which to reach people that do not require the use of The Internet. the field of digital marketing includes a whole host of elements such as mobile phones. and Service. Whilst digital marketing does include many of the techniques and practices contained within the category of Internet Marketing. while the product forms its core. The differentiation route of strategy revolves around aspects other than price. Word of mouth. in an informal. the other Ps normally go as elaborations of the offer. locational advantage. sms/mms. Intangible characteristics and emotional associations. Tangible product attributes and functions. relevant. n Differentiation based on Quality. It works on the principle that a firm can make its offer distinctive from all competing offers and win through the distinctiveness.route will have to have a substantial cost advantage in their operations. display / banner ads and digital outdoor. personal and cost-effective manner. Operational Efficiency. Technology. Maximum scope for exploiting differentiation remains with the product. in fact will revolve around building such cost advantage. The product can be differentiated along two major planks: 1. Differentiation based on additional features. To successfully practice a price-led strategy. The tangible product attributes and functions are Differentiation based on ingredients. early entry. is a reference to the passing of information by verbal means.

although this is not always the case. the receiver of wordof-mouth referrals tends to believe that the communicator is speaking honestly and is unlikely to have an ulterior motive (i. although phone conversations.person manner. It is an advanced form of word of mouth marketing (WOMM) in which companies develop customers who believe so strongly in a particular product or service that they freely try to convince others to buy and use it. It is believed that this form of communication has valuable source credibility. Sales promotion is the only method that makes use of incentives to complete the push-pull promotional strategy of motivating the sale force. Premium refers to the offer of an article of merchandise as an incentive in or to sell the product.e. Influencer marketing is increasingly used to seed WOMM by targeting key individuals that have authority and a high number of personal connections. induces product trail and counters competition. In order to Promote and manage word-of mouth communications. There is some overlap in meaning between word of mouth and the following: rumor. Word-of-mouth promotion. actively spreading the word on behalf of the company. the dealer and the consumer in transacting a sale. innuendo. which they preach in an attempt to convert others. gossip. text messages sent via SMS and web dialogue. they are not receiving an incentive for their referrals). marketers use publicity techniques as well as viral marketing methods to achieve desired behavioral response. message board threads. The customers become voluntary advocates. Research points to individuals being more inclined to believe WOMM than more formal forms of promotion methods. Evangelism literally comes from the three words of µbringing good news¶ and the marketing term justly draws from the religious sense. attracts non-users. such as online profile pages. and hearsay. Word of mouth is typically considered a face-to-face spoken communication. however word of mouth is more commonly used to describe positive information being spread rather than negative. designed to stimulate quicker and greater purchase of particular products of services by the consumer. blog posts. Sales promotion consists of diverse collection of incentive tools mostly short term. as consumers are literally driven by their beliefs in a product or service. instant messages and emails are often now included in the definition of word of mouth. This encourages immediate sales. also known as buzz marketing and viral advertising. is highly valued by advertisers. Price-off offers refers to offering the product at lower than the normal price. CONCLUSION .

Jaguar has been in the black since Ford purchased them until 1994. These additional investments and expenses help explain the decrease in net income in 1995. we can still attribute accounting trends to some of the key events in Ford's history. Ford is striving for future periods of growth. the company has done well. Ford F-150. Ford acquired Jaguar Cars. and in 1994 the Ford Falcon was the top selling car in Australia. Ford Mondeo. which helped increase 1992 net earnings. and with reorganization in 1996 to decrease spending and increase efficiency. and lack of sales. Mercury Mystique. and Ford Taurus. . In 1992. In 1995. It is important to note that Ford's net income has increased from 1991 to 1994. In 1990. Overall. helping maintain the trend of increasing net income. There are several possible causes for this change in the trend. and then decreased in 1995. Jaguar was a company suffering terrible loses due to poor quality. It is important to note that Ford's net income trend from 1991 to 1995 illustrates this.Although Ford Motor Company is one of the largest companies in the world. the Ford Taurus became the number one selling car in the United States. Ltd. and launched several new vehicles. Ford acquired 20% equity in a major Chinese truck manufacturer. including the Ford Contour.

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