Ford Motors

Akshay Kumar
I MBA, Logistics and Supply Chain Management,
College of Management and Commerce, Srinivas University, Mangalore, India
Email: akshaybalmatta47@gmail.com

ABSTRACT

The paper is about Ford Company which is an organization in the United States of
America.There is an introduction which briefly outlines the facts about the company at
hand. It also gives details about the automobile industry. The company history
thereafter falls clearly showing the progress that the organization has made all over the
years. There is also a clear explanation on the impacts of demand and supply of the
products that the organization is dealing in. in the price elasticity of demand; we try to
establish whether or not the firm price of the products does have an influence in the
demand of the same product. Cost of production section tries to explain the various
costs that the organization incurs in order to come up with the product. Competitive
advantage section shows the specific traits that make Ford’s product attractive to
consumers.
Entry barrier explains the factors that hinder new firm from entering the industry while
competitor shows the various competitors that fight with Ford for the market. A
conclusion is given at the end which gives recommendations as well as future
prediction.

Keywords: Customer service, Transportation, Material handling, Inventory

management, Order processing, Delivery, SWOT analysis.

1. Introduction :

In 1769, a French engineer by the name of Nicolas J. Cugnot invented the first
automobile to run on roads. This automobile, in fact, was a self-powered, three-
wheeled, military tractor that made the use of a steam engine. The range of the
automobile, however, was very brief and at the most, it could only run at a stretch for
fifteen minutes. In addition, these automobiles were not fit for the roads as the steam
engines made them very heavy and large, and required ample starting time. Oliver
Evans was the first to design a steam engine driven automobile in the U.S.

A Scotsman, Robert Anderson, was the first to invent an electric carriage between 1832
and 1839. However, Thomas Davenport of the U.S.A. and Scotsman Robert Davidson
were amongst the first to invent more applicable automobiles, making use of non-
rechargeable electric batteries in 1842. Development of roads made travelling
comfortable and as a result, the short ranged, electric battery driven automobiles were
no longer the best option for travelling over longer distances.

The Automobile Industry finally came of age with Henry Ford in 1914 for the bulk
production of cars. This led to the development of the industry and it first began in the
assembly lines of his car factory. The several methods adopted by Ford, made the new
invention (that is, the car) popular amongst the rich as well as the masses.

2. Objectives :

The study has been undertaken with the main objective to know the satisfaction level of
the consumer with the products and after sale services of the vehicles. The other
specific objectives are:
● To know the level of customer satisfaction with the services provided by Pearl
Ford, kernel.
● To study the opinion of the owners of cars regarding its features like mileage,
price etc.
● To study the effect of advertisement on the customers to promote the product
● To give suggestions to improve customer satisfaction

3. Research Methodology :

Research is a careful investigation or inquiry especially through search for new facts in
a branch of knowledge: market research specifies the information. Required to address
these issues: designs the method for collecting information: manages and implements
the data collection process, analyses the results and communicates the finding and their
implications. Research problem is the one which requires a researcher to find out the
best solution for the given problem, that is to find out the course of action, the action the
objectives can be obtained optimally in the context of a given environment. This chapter
aims to understand research methodology establishing a framework of evaluation and
re-evaluation of primary and secondary research. The techniques and concepts used
during primary research in order to arrive at findings,which are also dealt with and lead
to a logical deduction towards the analysis and results.

3.1.TYPE OF RESEARCH DESIGN:

EXPLORATORY CUM DESCRIPTIVE RESEARCH

The research I conducted is exploratory as well as descriptive. Exploratory research

involved collection of data from primary and secondary sources.

Data Collection: - The objectives of the project are such that both primary and
secondary data is required to achieve them. So both primary and secondary data was
used for the project. The mode of collecting primary data is personal interview and
sources of secondary data are various magazines, books, newspapers, & websites etc.

1. Primary Data: The primary data was collected to measure the vehicles coming for
repair in the workshop and their frequency of coming. The primary data was collected
by means of personal interview and analysis was done on the basis of response
received from the customers. The interview has been conducted in such a manner that
the consumer’s satisfaction level can be measured and the consumer can enter his
responses easily.

2. Secondary Data: The purpose of collecting secondary data was to achieve the
objective of studying the recent trends and developments taking place in cargo vehicles.

4.Concept Identification

As organizations become increasingly customer focused and driven by demand, the

need to gain customer loyalty and retain their loyalty is critical. Customer satisfaction is
the most effective way to achieve customer loyalty. Customer satisfaction and customer
loyalty share many similar traits. Customer value is the customer’s perception of the
ratio of benefits to what he or she gives to obtain those benefits. The customer Value
Triad is a framework used to understand what it is that customers want. The framework
consists of three parts: (1) perceived product quality, (2) value based pricing, and (3)
perceived service quality. Customers are satisfied, when value meets or exceeds
expectations. If their expectations of value are not met, there is no chance of satisfying
them. Figuring out what the customers want, however, is a difficult and complex
process. To be able to create and deliver customer value is important to understand its
components. On the most basic level, value from a customer’s perspective is the ratio of
benefits to the risks being taken while buying the product.

5.Marketing Strategy

5.1.An Insight
According to Harold E Edmondson “ Customer Satisfaction” seems to appear in print
more frequently than any other catch phrase used to describe a new found magic for
industrial success. Before we proceed into the study of the dynamics of Customer
Satisfaction it is important to know about who a customer is and what satisfaction really
means.

1.Customer

The question of defining who your customers are seems fairly easy particularly if you
have segmented your market properly and understand who you are trying to satisfy.
However subtlety that frequently goes undetected by many firms is that the customer
set can be divided into two parts, the apparent customer and the user. The apparent
customer is the person or group of people who 25 decide what product to buy and
basically have control over the purse strings. The user is a person or group who
physically uses the product or is the direct recipient of a service.

2.Customer satisfaction

As in defining the customer above, defining satisfaction also appears simple. However
as with customers there is a subtlety that needs addressing. Satisfaction by most
definitions simply means meeting the customer’s requirement.

Customer satisfaction is a concept that more and more companies are putting at the
heart of their strategy, but for this to be successful they’re needs to be clarity about what
customer satisfaction means and what needs to happen to drive improvement. Without
this, there is a risk that customer satisfaction becomes little more than a good intention,
with confused objectives failing to address the real issues for customers, one helpful
way to look at the problem is to rephrase the objectives: set the sights on helping the
customers meet their goals

Customer satisfaction can be defined in many different ways. Finding the right way for a
company depends on understanding your customer and on having a clear vision of the
role that customer satisfaction is to play in the strategy. For example, a focus on
customer satisfaction can work alongside existing segmentations to support revenue
generation from high value customers or it can be a company-wide objective rooted in
the brand values. For the former, it may be sufficient to focus on improving customer
service, but for the latter a broader definition of customer satisfaction is necessary,
closer akin to corporate reputation.
Whatever the strategy for customer satisfaction, it must at least include getting the
basics right. Failing to achieve this can destroy the reputation as well as losing valuable
customers. Every customer, regardless of their economic worth to the business, has the
power to influence – positively or negatively – a company’s reputation. Once the
objectives for the customer satisfaction strategy are defined there are a number of steps
we can take to make sure the focus on customer satisfaction is effective.

5.2.Building a company around Customer Satisfaction

With the increase in customer’s demands and competition it has become a lot more
important to base the entire company on customer service. When doing this one must
first realize that every member of an organization plays an active role in customer
service. This includes both external customers and internal customers within a company

Customer focused organizations focus both on customer satisfaction and profit.

Achieving customer satisfaction generates profit 9. In these organizations top
management has frequent contacts with external customers. The top management uses
consultative, participative, and supportive management styles to get through to the
customer. The staff focuses all of its attention on satisfying the customer’s needs.
However, the management’s job is to provide the staff with support necessary to
achieve these goals. The other department and staff in the organization that do not
have direct contact with the external customers deal exclusively with internal customer
satisfaction.

5.3.The Influence of the salesperson in Customer Satisfaction

In an article titled, “The influence of salesperson selling behavior on customer

satisfaction with products,” Brent G.Goff and James S. Boles examine the effects of
non-product related construction on customer satisfaction with major retail purchases
such as automobiles. The article states that salesperson’s selling orientation- customer
orientation (SOCO) will affect not only consumer satisfaction with the salesperson and
dealer, but also indirectly, satisfaction with the product or manufacturer

In the perspectives of both the retailer and the manufacturer, customer satisfaction
represents an important issue because it relates to several desirable outcomes.
Customer satisfaction leads to future purchases, and repeated purchases of the same
product from the same source. In other words, it helps a firm retain its present
customers and build loyalty. By helping a buyer obtain product information and
providing guidelines about what should be expected during the buying process and use
of a product, a salesperson may influence customer expectations concerning the
product. Thereby this may reduce the likelihood of dissatisfaction (Grewal and Sharma,
1991). A successful salesperson tailors to the needs of each individual customer. By
being customer-oriented, a salesperson is likely to identify with the needs of the
customer, enabling the salesperson to match his or her presentation to those
requirements of the customer.

5.4.Internal marketing

Successful companies make every effort to ensure satisfaction to their customer by

focusing all organizational efforts of the company on providing superior customer
service. By doing this these companies hope to retain their existing customers and
attract new ones. Only angle of customer satisfaction commonly overlooked is the
internal aspect.

The internal customer or employee plays a vital role in achieving customer satisfaction
and loyalty. Some firm’s do not understand that the treatment of internal customers
becomes the external customers’ perception of the company. A firm’s employees or
other departments within the organization make up its internal customers. Their job
performance affects the firm’s ability to deliver superior product and customer service
(Boone and Kurtz, 1999). When a firm’s employees are happy at work, their overall
attitude and performance towards the customer enhances tremendously. Internal
marketing helps members or employees of an organization understand and fulfill their
roles in implementing its marketing strategy. Internal marketing not only keeps
employees happy, it also shows them how their actions affect the firm’s ability to
achieve customer satisfaction.

6.SWOT Analysis

6.1.Strengths

● Ford Motors recorded the strongest as well as effective operation performance in

2010
● It has a strong brand portfolio.
● Has a wide network of distributors and dealers.
● High employee productivity.

6.2.Weakness

● It has a very small share of the market which results in a great loss to the
company.
 ● Due to Product recalls, Ford’s brand image was also harmed and thus the
company suffered a lot.
● Declining operating efficiency and weak returns.
● It have a very small share market

6.3.Opportunities

● It is termed as environment friendly.

● Various products were predicted to switch towards the hybrid electric engines.
● Well researched programs are under consideration in order to gain more
popularity.
● Restructuring plan was launched in order to improve the performance.

6.4.Threats
● Rising oil prices are one of the major contributors towards the loss of the
company.
● Rise in competition is one of the major threats towards the productivity of the
company.
● Working with different techniques is one of the major threats.
● Rising raw material prices.

7.Findings

1. The proportion of customers who like the ‘service’ factor in their Ford vehicle the
most is extremely low (only 10%). This clearly indicates the dissatisfaction level
of customers with the service of Ford vehicles.
2. However among other variables, the brand name is liked the most, followed by
the comfort factor. Many of the Ford customers buy the cars because of the
trusted brand name. This gives us an insight of the relationship between the
company and the customers.
3. The after sale services don’t please the customers much. The extremely satisfied
customers were as low as 12%. The highest proportion of customers consisted of
moderately satisfied customers constituting 50%
4. Interestingly 82% of customers prefer only authorized Ford dealers for getting
their Ford vehicle serviced which is inspiring.
5. Regarding the preference of customers relating to the vehicle they want to buy,
Ford Figo tops the list among other cars.
 6. Notably, a significant proportion of people attach comfort features with the
Company’s cars. So the Company can advantageously position its products to
the comfort seeking group of people.
7. Extensive advertisement has helped the Company to popularize its brand name
among the people.
8. Majority of the customers (45%) are visiting Pearl Ford from six months to one
year, this is followed by one to two year old customers of Ford.
9. But unfortunately, the proportion of customers who have been visiting this
agency for more than two years is very low (only 13%). This shows that the
majority of customers sell their Ford vehicle and shift their preference to other
brands after around 2 years.
10. Majority of the customers are satisfied with the procedure of the service, but still
the proportion of customers who want change in the procedure is as high as
43%. This calls for better strategic planning.
11. The timeliness issue is complained by 62% of customers during the servicing of
the vehicles, followed by 23% customers who have customer relationship issues.
12. In maintaining good customer relationships, the majority (58%) rated the
company as average.
13. Around 55% of the respondents were not satisfied with the service charges.

7.Suggestions

1. Pearl Ford must address the timeliness issue during servicing the vehicles.
2. Strategies on Customer Relationship Management need to be framed and
implemented.
3. Pearl Ford should reduce the service charges, as more than half of the
respondents find them to be unreasonable.
4. The after sale services need to be improved
5. Since the majority of customers sell their Ford vehicle and shift their preference
to other brands after around 2 years, the company should seriously take this fact
into consideration.
6. Changes need to be incorporated in the procedure of the service.

8.Conclusion

In the nutshell, it can be concluded that the brand name rules the heart of the
customers. Ford Fiesta is my most favorite car among other Ford vehicles.
Unfortunately, the majority of customers sell their Ford vehicle and shift their preference
to other brands after around 2 years. This indicates poor strategic planning. The after
sale services of the dealer also need improvements. The dealer should seriously take
this into consideration for its long run survival and success. Strategies need to be
formulated to have an edge over the competitors.

Ford is one of the top car brands in the world and customers attach expectations with it.
However, not most of the customers are pleased with its services. The company needs
to keep in mind that the customer is the king, and his satisfaction should be the topmost
priority of the company. But the revelations of the research don’t present a very good
picture. I hope the company draws benefits from this report and understands the value
of perception of its esteemed customers and make the required improvements.

9.References

● www.Fordmotors.com
● www.autocar.com
● www.overdrive.in
● http://bhagatgroup.com/Ford-index.htm
● Magazines- Autocar India, Topgear, WhatCar, Car n Style
● Newspapers- Economic Times Zigwheels
● Journals- India Overdrive, Fastrack
● https://www.penskelogistics.com/pdfs/01_ford_case_study_updated.pdf
● http://plm.gsrti.com/downloads/Siemens-PLM-Ford-Motor-Company.pdf
● https://pdfcoffee.com/ford-case-study-brief-pdf-free.html
● https://www.ischool.berkeley.edu/sites/default/files/projects/w201-
lisakirchrdadaresearchdesigncasestudy.pdf