Market Analysis of Ford Motor Company

Introduction

Ford Motor Company is an American multinational automaker and founded by Henry Ford. Ford Motor Company has many product lines such as the Ford Fiesta, Ford Focus, Ford Escape, Ford Ranger and other Ford products. Ford Motor Company has many dealers in the world wide so that consumers can buy the car at their nearest place.

Research Objectives

For this essay, I am going to research how Ford Motor Company approach their target market, SWOT analysis, environmental forces and 4 elements of marketing mix to attract people to buy their products.

Target Market

The organization of FORD is using Differentiated Strategy in their businesses. This strategy is to targets two or more segments by developing marketing mix for each segment. FORD Motor Company designed to appeal to many different types of consumers and to satisfy many different needs in the form of economy cars, sports cars,

luxury cars, station wagons, vans, trucks, and so on. Now the latest cars that the company produce is FORD FIESTA, this car are focus on young people and ladies.

Segmentation variables

Segmentation variables used by FORD Motor Company are Geographic segmentation, Demographic segmentation, Psychographic segmentation and Behavioral segmentation. Ford automobile is mainly segmented to the United Kingdom automobile market industry but it also segmented to others country like Malaysia, Indonesia and so on to various basis which are the parts of above mentioned factors. The latest model FORD FIESTA is using Demographic Variables which is age, gender and income. It is because this model is focus for young people, ladies and average income consumer. In the other hand, FORD FIESTA also uses behaviorist variables with the benefit for safety and fuel efficiency.

Market Segment Profiles

FORD Motor Company profile offers a comprehensive analysis for the organization, it is business segments, and competitors. It used to analyze the business and marketing strategies adopted by the company, and to gain a competitive edge in the market industry. This profile also evaluates the strengths of the company and the opportunities present in the market. It is also involves analysis of the company at three levels – segments, organizational structure and ownership composition. Beside this, both business and geographic segments are analyzed along with their recent financial performance. It further discusses the major subsidiaries of the company and the recent merger & acquisitions. Most of the consumer for FORD Motor Company may choose our product because the organization has the needs of the consumers.

Evaluate Relevant Market Segment

The FORD organization is selling FORD FEISTA for a reasonable price. It is because this product has the necessary that are good for the consumers such as save fuel. This product is increasing the sale potential for the company. It also determines the market industry that the Ford Motor Company is segment to the right position for the product that the consumers are likely to buy this automobile for their daily use.

Target Markets

FORD Motor Company designed as the new model FORD FIESTA is target to young people and ladies. The young people that the organization focuses on 18-25years old which are teenagers and ladies with average income can affordable to purchase the cars. And this kind of model is suitable for those unmarried people because this car only have 5 seats that are not for a big size family. Therefore, this automobile size is average so it is suitable for those consumers that like middle size car.

SWOT ANALYSIS OF FORD

One tool marketers use to assess an organisation’s strengths weaknesses, opportunities, and threats.

Strengths

Strengths define as the competitive advantages or core competencies that given the organization an advantage in meeting the needs of its target markets. Ford automobile company is the one of the best known brand name in the world. Then, the brand is well-known in automobile industry and global markets due to huge marketing and advertising. Ford admits greater amount of customer loyalty and all its individual brands have been enjoying the benefits of the good reputation that they have through the quality makes and services. Ford is providing the consumer more variety of car and commercial vehicle. Some more, quality to ensure of Ford needs to be more complete and must be consistently monitored with permit standard to make certain no future faults and thereby to achieve customer satisfaction. Ford automobile company will maintain good relation with the employees by offering better work environment and competitive wages that are assert to recruits a qualified and skilled employee in all its functions. Otherwise, Ford is more concerned about the working environment and safety aspects of the employees. Furthermore, Ford always develops cars on standardized procedure and invested heavily in alternate fuel source. This manufacturing facilities operating its business more than thirty countries and enhances its manufacturing process at around ninety plants and facilities worldwide that is because operations and distribution efficiency of the Ford automobile company is the wealth.

Weaknesses

Weaknesses mean any limitations that a company faces in developing or implementing a marketing strategy. Ford’s automobile company brand image was harmed and the company has a lot of suffered due to products recalls. For example the Ford Focus recalls the car which has some problem. This has made a large cost to the company as well as harm the brand image and make a bad impact to Ford’s sales. Furthermore, Ford automobile company lack of design phase and innovative design structures on their new paddle of cars. This is because the technology not as well as other it will influence Ford to cause the low productivity. Thus Ford can overcome their weakness to achieve greatest of strengths. Apart of that, management is missing focus on some lines performance because Ford automobile company expands more business operations in diversified geographical areas. Next, Ford does not have an effective cost management system and have not taken considerable efforts to overcome. Ford has a small market share therefore the sale will decline the sales and also due to global recession in the world finance market. That is the reason for decline of sales. Another reason is Ford will manufacture the standard cars which are not able to cope up with current market automobile.

Opportunities

Opportunities know as a favorable condition in the environment that could produce rewards for the organization if acted upon properly. Ford has to expand more option in designing the cars and commercial vehicles are expected to switch toward hybrid electric engines due to the petroleum. Hence, Ford can build the car that run on electricity that form of energy outside the petrol and diesel and to promote pass through to the future opportunities that will be increasing. Ford has a chance to become more environment friendly company with cleaner engine emissions because hybrid engines are more fuel efficient less pollute than conventional gasoline and diesel engines. Ford has a great opportunity to produce fuel efficient cars and commercial vehicles. On the other way, Ford has one more option in designing the cars and commercial vehicle based on electric engine. The Ford automobile industry is having one more fuel efficient types whereas cars can run on renewable energies like solar power and bio fuels. This can help the company to become pioneers in the industry. The Ford’s car is providing the facilities based on the travel habits of the whole family. By the other way, the Ford car also is medium cost car which can be giving affordable by the medium class people.

Threats

Threats are the meaning for a conditions or barriers that may prevent the organization from reaching its objectives. The cost of petroleum is rising day by day and remains to be in the state of uncertainly so that electric drive vehicle that is the reason will be in high demand. On the other hand, the Ford growth and development may effect by high-speed growth in amount of competitors in this automobile industry. The main competitors of Ford are Nissan, Honda, Toyota, and so on. They have also threatened Ford’s market share. Besides this, Ford’s capital spending is indeed lower than the competitor. The reason is this capital spending has included the research development expenditure which could influence the company from going ahead. If other automobile manufacturers have new ideas, program and new technology appear, that is also one of the threats to Ford Company. Therefore the economy depression also will influence the consumer ability of buying. Thus, the amount of sales will decline.

ENVIRONMENTAL FORCES

Competitors

FORD view environmental forces as uncontrollable and maintain passive and reactive to the environment. In the automobile market, FORD is facing many competitors like TOYOTA, HONDA and NISSAN. Competitors are affecting the FORD Company by reducing the sales rate. In this situation, FORD is producing a new model car which is FORD FIESTA this season of car is focus to attract young people and ladies. Not only that but FORD Motor Company also focused on creating a strong business plan that produce great products that contribute to this new generation. As part of organization plan, the company may continue to press forward to globalize automobiles platforms that can be adapted to meet specific regional needs. Flexible manufacturing capabilities allow us to bring products to market with greater speed and efficiency than ever before.

The marketers define the FORD companies as an oligopoly competition in the market structure because in the market there are many substitutes available but only one company offerings for another.

Political Forces

FORD, along with other major automakers and the United Auto Workers (UAW), opposed a congressional bill to raise the average fuel economy standards to 35 miles per gallon by 2013. The organization believe that this would harm the SUV, pickup, and minivan industry. Political factors it may also influence the strategic planning of Ford Motor since government rules and regulations are concerned with the production of more eco-friendly automobiles in the daily function of the company. Due to the environmental concerns, the industry has to abide with the regulations aimed for reducing the pollution levels. In the other hand, non-compliance attracts heavy fines, which prove costly to the company. Not only that this regulations may also drive Ford to manufacture environmentally friendly and fuel-efficient cars to save the environment. In this situation, governments in a bid to lower the unemployment rate discourage Ford Motors from fully automating its operation, which would otherwise take up local jobs.

Economic force

As vehicle industry provide luxury product and services, the economy well being plays an important role in determining the demand for vehicle. During the economic prosperity, since there is significant increase purchasing power in people, usually they are willing to spend on purchase on new vehicle. Marketer often expands their product during in this economic stage. However, when there is happening recession it will cause a high unemployment rate in economy. People will start to spend less on luxury product such as vehicle or house. In this stage, people only will purchase the product that are necessary or might choose to buy second hand vehicle only. New vehicle not be the first choice for people to consider. Therefore, Vehicle Company usually will produce less vehicle in the economic. Meanwhile, rising petrol prices make more expensive for customer to drive petrol fuelled car. This reason might encouraged consumers inclined to change their vehicle which operate using diesel.

Social-cultural force

Cars usually are viewed as a status symbol by people around the world. A person’s influence and political status is reviewed by vehicle brands they hold. A person who sitting a luxury car can show his was having a higher status compared to other. Therefore, Ford intended to produce luxury cars due to growing demand on its brand and due to the increasing celebrities and other delicate.

Technology force

New technologies and convenience safety features are at its best in Ford’s 2010 paddle of cars. Technological advancements are inevitable for automotive industry in order to compete with competitors and to become pioneers in the industry by enriching new technologies. After Ford’s new and improved 2.0-liter, 4-cylinder Eco Boost engine to be launched to drive the upcoming year, Ford also introduce 30 new power train actions globally in 2010. In case, Ford strives to improve quality with virtual technology in their vehicles that provides real benefits including reduction in injuries, improving quality. Thus, this all technology is helping the company to become pioneers. Ford also produces a middle size car and convenience safety cars for ladies. Besides that, Ford has competitive edge over attracting the women for the cars designed specifically for women by women designers in stereotypical view points.

Legal and Regulatory Forces

Ford Motor Company in relation to the Environmental Protection Agency adheres to the legal aspects of environmental scanning. Ford Motor Company accepts an award on March 2007 by the Environmental Protection Agency, Energy Star 2007 Partner of the Year Award in Energy Management. The company is the first automobile company manufacturer have been awarded prize for two years in a row. The award has come to be presented by the company’s commitment is to increase energy efficiency and reduce greenhouse gas emissions from all institutions of society. In this situation, the Ford Company is following the laws and regulation for producing a vehicle. The organization is the responsible use of resources and energy Efficiency. The leadership are recognizes that the legislation on environmental protection is of great importance and encourages the use of Environmental Scanning in the right direction for the future success.

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PRODUCT STRATEGIES AT FORD

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

Brand Strategy

The Ford classified the brand names of midsize cars, elegant and generous by research techniques. Ford uses blue oval that Ford branding which determines price and value. The Ford oval is proud and historic symbol for Ford Motor Company and one of the most recognized trademarks in the world. This logo is the blue oval that Ford released in 2003 in honour of the 100 years Ford Motor Company had been around. It was named the “Centennial Blue Oval”.

Packaging

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

Labelling

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

Product Design and Features

The Ford Fiesta has a Kinetic design. This design is ensure the smoother ride with minimal noise, vibration and harshness. In this product have many features, such as Ti-VCT Engine (Twin Independent Variable Camshaft Timing), 6-Speed Power shift Automatic Transmission, Electronic Stability Programme (ESP) with Traction Control System (TCS), Bluetooth with voice control, fuel efficiency, seductive centre console and easy fuel.

Product Support Services

FORD Motor Company represents Ford Fiesta with better services and warranty. Ford Fiesta is given 3 years warranty, this warranty is only valid on the condition that the vehicle service as per recommended in the owner’s manual at an Authorized Ford Service Centre. Additional wear & tear items are not listed will be charged accordingly. Besides that, customers are entitled for the free service at 10,000 km intervals starting from 10,000 km till 60,000 km. The Coverage includes Engine oil and filter changes, Multi-Point Inspections, Replacement of brake pads and linings when worn, shock absorber replacements-is faulty, Spark plugs, Engine belts, Engine hoses, Wiper blades, Powerful Protection for Your Ford Vehicle. Tyres originally installed on Ford the vehicle are warranted separately by the concerned manufacturer and not by Sime Darby Auto Conne Xion. Battery failure within the first 3 years or 100,000 km, whichever comes first, will be covered under warranty. Ford Parts and Accessories Warranty are require 1 year or 20,000 km, whichever comes first and MUST be purchased and serviced by an Authorized Ford Dealer.

FORD'S PROMOTION STRATEGIES

Ford has use difference promotional strategies to maintain their marketing edge over the competitors. Ford is the one of the top 20th of the highest media spend companies list. During the recession, the Ford starting to cut cost to reduced their promotional budget and cancelled all the promotion advertising. Ford organized a lot of campaigns and tied up with the long lasting sponsorships and regular to conducted sport events. The advertisements and logos with attractive strap line, amazing designs and advertisement are giving edge over competitors activities. Ford promotional strategy have classifications 2 type of promotion such as above the line promotion and below the line promotion. Above the line promotion are like mass media such as television , news papers , radio and so on . Below the line promotion is non-media advertisement like sponsorship, show, discounts to dealers and sales promotion activities .

Advertising

The main purpose of the advertising is to promote and support for the sales force to persuade the product to the public .Advertising is playing the important role to a company because it use to promote the brand or service and to improve the corporate image and sales. Advertising only can help toward the sales success. Ford started advertising with strap line “Feel the difference” in order to create a brand for Ford of Europe. Ford advertisement through attractive, unique pictures in news papers.

Personal Selling

This is the way to maintain the good relationship with customers to keep on the sales of the marketing. Personal selling is very useful for products which are complicated to self analyze and understand. Ford product does not have any difficulties to the customers. There are two teams to take care of product and offers other promoting activities which is sales and marketing teams.

Public Relations/ Publicity

Public relation is referring to the non-personal communication such as art and social science of analyzing trends, foresee their outcome. The public and organization’s is serve by the counseling leader and the implementing planned. Then Ford through the publicity to boots up their sales by sponsorship Activities contest and other event.

Sales Promotion

The dealer giving some special offer of the product to attract the custom and also improve the sales .The example of special offers related to customers such as discounts, premium offers, free gifts price deals and so on. Some of the dealers and merchandisers will get different promotional offers such as point of sale displays. These offers are ensure for the dealers and the merchandisers use the proper way to promote the product. Ford has followed a very successful way of sales promotional to promote the new products which the sales will be improved. Ford has categorizes the customers into different segments in order to achieve the sales objectives by provided promotional offers to the customers.

DISTRIBUTION STRATEGIES OF FORD

Distribution strategies are (Kurtz, 2010, p46) to ensure that consumers find their products in the proper quantities at the right times and places.

Marketing Channel Distribution

For the marketing channel selection, Ford Motor Company uses this channel as follow:

Producer  Dealers  Consumers

Vehicles that are manufactured at Ford factories are distributed to dealers through road or train transportation. Consumers can buy the cars directly at the dealer’s show room.

Intensity of Market Coverage

There are 3 types of intensity of market coverage, which are intensive distribution, selective distribution and exclusive distribution. Pride and Ferrell (2010, p400) state that intensive distribution uses all available outlets for distributing a product. Selective distribution uses only some available outlets in an area to distribute a product. Ford use exclusive distribution which is use only one outlet in a relatively large geographic. Exclusive distribution is suitable for products purchased infrequently, consumed over a long period of time, or required service or information to fit them to buyers’ needs. Ford Fiesta is a luxury automobile and only available in a select dealers’ show room.

Supply Chain Management

Supply chain management (Pride & Ferrell, 2010, p388) is a set of approaches used to integrate the functions of operations management, logistics management, supply management and marketing channel management so products are produced and distributed, in the right quantities to the right locations and at the right time. Ford Motor Company has its own manufacturer to produce vehicle parts and combine it into a car. The Ford car will be sent through road transportation and train transportation to the dealer.

Channel Management Issues

Now Ford can sell the product through online. However, consumer cannot do the test drive through website. So, it is a weakness of online selling the car.

FORD'S PRICING STRATEGIES

All of the element in the marketing mix, price is the only one to generates revenue. The other elements generate only cost. The profitability of a company is determined by the price and the competition in the market contributes the maximum to the important of pricing. Ford has implemented their own pricing strategies which is more demand or market based pricing oriented. Ford has use new strategies call ” Blue Tag, is expending from its large car to the small car range. The price reductions are between 6%-15% on the Ford Fiesta.

Price objectives and basis

The price objectives are the goals which are described the organization to achieve which through pricing effort. The pricing objectives are included marketing objectives and marketing mix strategies. Pricing basis is the initial price of a good and it is without any extra charges. The will be increase when the more specification of the car, the more the price basis of Ford product. The marketing objectives have included marketing position, survival, current profit maximization, market share leadership, and product quality leadership. Then, marketing mix strategies is target costing, non-price position, cost, and organizational considerations.

New product pricing strategies

Setting the base price for a new product is a necessary part of formulating a marketing strategy and is one of the most fundamental decisions in the marketing mix. The Ford Motor Company is setting two types of price which is price skimming and penetration pricing in the market industry. Price skimming is about the high possible price that people afford to pay for the product and penetration pricing is to competing brands and gain a significant market shares. For example, Ford Fiesta is committed for consumer’s safety like airbag, including our efforts to deliver top crash test ratings that customers look to when choosing new vehicle. So the company set a reasonable price for this model toward consumer.

Promotional pricing strategies

Price, as an ingredient in the marketing mix, is often coordinated with promotion. The two variables sometimes are so interrelated the pricing policy is promotion-oriented. The Ford automobile company makes promotion for the latest model Fiesta. For example, Ford promote like cash rebate for sale to attract more customers. Beside this, consumers will have a chance to get an iPhone4 and iPod as a reward when the consumers purchase this model automobile. By using this kind of promotion, it has been able to sell this model more than other competitors.

Pricing issues

Ford automobile may face many pricing issues like the price of materials that used to produce the cars. If the materials price is rising, it will lower the profit for the companies. On the other hand, the demand in market industry it also affects the price, if the demand for Ford Fiesta is high therefore price will increase.

CONCLUSION

Limitation

The Ford product is expensive and only available for higher income people. The design of car is not beautiful compare to other competitor car.

Recommendation

Ford Motor Company can produce the car which is suitable for average income and lower income people. Ford Motor Company can try to create new design for the new car and try to post it online to let consumer vote.

Conclusion

Ford product have few target markets and we have do some research of how Ford Motor Company use SWOT analysis to sell their product. We also know how Ford Motor Company uses 4 elements of marketing mix to sell the product to the customer.