M04MKT–PRINCIPLES OF MARKETING

GROUP ASSIGNMENT

ON

FORD MOTOR COMPANY UK

Submitted by:

Bhavani Jonna 2935007

Ezra Kumar 3077425
Karthik Shanmugam 2977269
Sangeetha Ravikumar 3081008
Saraswathi Pabbaraju 3014420

Date : 23-03-2010 Word Count : 8366

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TABLE OF CONTENTS

Introduction 3
Organization Orientation -------------------------------------------------- 4
Corporate Organization ------------------------------------------- 4
Product Orientation ------------------------------------------------ 5
Competitive Advantage 6
Potters Five forces analysis --------------------------------------- 9
Marketing Mix
Product 11
Product Services and Branding Strategy -------------------------------- 11
Product Mix -------------------------------------------------------------------- 13
Stages in developing product and service Attributes ---------------- 16
Branding ------------------------------------------------------------------------ 17
Market segmentation, targeting and positioning ----------------------- 18
BCG Growth Share Matrix ------------------------------------------------- 20
Ansoff Matrix ----------------------------------------------------------------- 22
New Product Development ------------------------------------------------ 23
Price
Pricing strategy --------------------------------------------------------------- 24
Price Segmentation --------------------------------------------------------- 25
Promotion Mix
Advertising -------------------------------------------------------------------- 25
Direct Marketing ------------------------------------------------------------- 27
Sales Promotion ------------------------------------------------------------- 29
Internet Marketing ----------------------------------------------------------- 31
Personal Selling / Publicity ------------------------------------------------ 32
Place ----------------------------------------------------------------------------------- 33
Impact of Marketing Mix -------------------------------------------------------------- 37
Swot Analysis --------------------------------------------------------------------------- 39
Pestel Analysis ------------------------------------------------------------------------- 42
Conclusions & Recommendations ------------------------------------------------ 47
References ------------------------------------------------------------------------------ 48

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1.INTRODUCTION

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

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

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

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

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

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

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

1. 1 ORGANIZATION ORIENTATION

1.1.1 CORPORATE ORGANIZATION

 A profit of around $1.06 billion was achieved by the Ford Europe in 2008, which was
the fifth year in a row of profits. Also it was the profit in the run of year-over-year as
this being the fourth with the first year of having a profit of more than $1billion since
1989.

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

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

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

 Though being given a second position to Volkswagen in Europe as a bestselling

brand, Ford has shown a constant increase in the market share.

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

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

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

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

 Fords confidence that it would emerge as a stronger and a more competitive

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

1.1.2 PRODUCT ORIENTATION

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

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

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

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

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

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

2. COMEPETITIVE ADVANTAGE

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

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

 Low-CO2 technology in vehicles is the new mantra that Ford is offering as an

environmentally advanced portfolio.

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

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

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

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

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

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

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Figure 2.0.0

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2.1 PORTER’S FIVE FORCES ANALYSIS:

COMPETITIVE RIVALRY

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

BARRIERS TO ENTRY

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

THREAT OF SUBSTITUTES:

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

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

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BUYER POWER:

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

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

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

SUPPLIER POWER:

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

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

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

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

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3. MARKETING MIX

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

Place

Product
Marketing Promotion
Mix

Price

Figure 3.0.0

3.1 PRODUCT, SERVICES AND BRANDING STRATEGY

3.1.1 PRODUCT

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

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LEVELS OF PRODUCTS:

Product Planners need to think on three levels:

1. Core Product: It is the base requirement of the customer. The organization must
specify the benefits offered by the product which is asked by the customer. (Kotler et
al 2004).

Core
Product

Actual
Product

Augmented
Product

Figure 3.1.1 (Kotler 2007)

2. Actual Product: The requirements of the customers are taken into the shape of the
product. All features of the product are taken into account and also the services needed to
provide for the customer (Kotler and Armstrong 2004).

3. Augmented Product: The product and the services are aligned to offer more benefits to
the customer (Kotler and Armstong 2004).

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3.1.2 Product Mix

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

Product Line Length

Cars Commercial Vehicles Automobiles Parts

Ka Panel Vans Ford Catalytic

Converter
Fiesta People Movers
Ford Front Window
Fusion Chassis Cab/OSS
Regulator
C-Max Pick-Ups
Ford Headlamp
Product Focus Double Cab-in Vans
Ford Corner Light
Line
Mondeo
Breadth Ford Rear View Mirror
S-Max
Ford Timing Belt
Kuga Cover

Focus

Coupé-Cabriolet
Figure
3.1.3(Ford Galaxy

2010) Focus RS

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PRODUCT DEPTH

COMMERCIAL VEHICLES

Chassis Dpuble Cab-

Panel Vans People Cab/OSS Pick-Ups in- Vans
Movers

New Fiesta Chassis Cab New Ranger regular Transit Double Cab-
Van New Tourneo
Connect Cab in-Van
Chassis
New Transit Connect Tourneo Double Cab New Ranger Super Cab

One-Stop Dropside
Transit Minibus New Ranger Double
Transit Van Cab
One-Stop- 1way
Tripper
New Ranger
Tripper
One-Stop-3way
Tripper

ig 3.1.4 (Ford 2010)

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CARS

Ka Fiesta Fusion C-Max Focus Mondeo S-Max Kuga Focus Galaxy

Coup’e-
Cabriolet
Style Edge Edge Zetec Edge
Studio Studio Style + Style CC-1
Zetec Zetec Titanium
Zetec Zetec
CC-2
Edge Zetec Zetec Zetec Zetec S Ghia Titanium
CC-3 Ghia
ECOneti Titaniu
Titanium Titanium c
Zetec Edge m
Titaniu
m Titaniu
Titanium m ECO
Titanium ST-2
Titanium
EConetic ST-3 X
Tattoo
Titanium
Zetec S X Sport
Grand
Prix
Titanium
Individual
Digital

Tattoo
Premium

Fig 3.1.5 (Ford 2010)

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

3.1.3 STAGES IN DEVELOPING PRODUCT AND SERVICE

ATTRIBUTES

Time

Figure 3.1.6 (Jobber 2007)

 Product Development Stage: The organization plans to develop a new product. It
aims at gaining profits for the company and retain the market place (Kotler and
Armstrong, 2004).
 Introduction Stage: Sales grow slowly at the introduction stage when a product is
new on the market and there is only a limited awareness of its existence. (The Times
2010).
 Growth Stage: Rapid changes in the product, entering to new markets, adding new
features, improving quality and substantial profit improvement (The Times 2010).
 Maturity Stage: In this stage the competitors enter the market and promote their own
products. This will reduce the rate of growth of sales (The Times 2010).
 Decline Stage: The market becomes saturated as there are too many firms
competing for customers. Organization will compete in a variety of ways and some
will drop out of the market. The sales come down and profits erode (The Times
2010).

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

PRODUCT ATTRIBUTES

 Product Quality
 Product Design
 Product Features (Luiz et al 2010).

SERVICES:
 Maintenance and vehicle repair services
 Financial services
 Retail financing
 Wholesale financing
 Third-party claim management services (Luiz et al 2010).

3.1.4 BRANDING

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

FORD BRANDS

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

BRAND STRATEGY

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

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MARKET SEGMENTATION, TARGETING AND POSITIONING

Identify basis for segmenting

market
Market
Segmentation
Developing profile of resulting
segments

Develop measures of segment

attractiveness
Market Targeting
Select the target segment(s)

Develop positioning for each

segement
Market
Positioning
Develop marketing mix for
each segment

Figure 3.1.7 (Kotler 2007)

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

STRATEGIC MARKET SEGMENTATION

Market Segmentation is “dividing up a market into distinct groups that

(1) Have common needs and
(2) will respond similarly to a marketing action” (Roger et al 2005).

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

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

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

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

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

SEGMENTATION BASED ON BENEFITS PROVIDED: Distinctive benefits which will differentiate it

from the competitors (Charles 2010).

MARKET TARGETING
Selecting the segments by evaluating the market segment attractiveness .

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

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

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

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

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

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

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

BCG Growth Share Matrix

Figure 3.1.8 (Kotler 2007:149)

QUESTION MARKS: Market share will be high but the business share units will be less.
 Need lots of cash to hold share of Market
 Managerial decisions need to be Made on whether to drop or build up

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  Ford genuine parts and its brand come under this quadrant.

DOGS: Degrade in business, market share and the products sales will also be less.
 May be self sustaining cash sources
 Not good bet on large cash sources

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

 Heavily financed (loans; stocks; bonds) (Drummond 2004).
 Ford motor crediting and finance comes under this quadrant.

CASH COWS: Company does not progress well though they is rise in sales and market share.
 Less investment to hold market share…thereby producing lots of cash

TOTAL ASSET COMPARISON:

“Last avail year - 11 companies (100% = 13,759,770th GBP)
Peer group: Closest 10 companies for the Industry group based on Turnover for the last available
year.”

5.05 Ford Company Limited

9.85 22.25 Jaguar Cars Limited (UK)

10.05 General motors UK

8.56
BMW (UK) Manufacturing
Limited
Toyota Motor
Manufacturing(UK) Limited

Figure 3.1.9 (Fame 2009)

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ANSOFF MATRIX

The Ansoff Matrix is a tool that helps businesses decides their product and market growth
strategy. Ansoff’s product/market growth matrix suggests that a business’ attempts to grow
depend on whether it markets new or existing products in new or existing markets (Lynch,
2003).

Figure 3.1.10 (CSS3 2010)

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

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

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

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

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NEW PRODUCT DEVELOPMENT
Idea generation
New Product strategy

For new ideas and innovation, many companies

use the Brain storming technique. And other ways Idea Generation

of idea generation taken place through internal Screening

resources or external resources. Internal resources

Concept Testing
are like Scientists, Engineers, Marketers, Sales
Business Analysis
people and Designers. External resources are like
Competitive products, Distributors, Customers, Product Development

suppliers (Rainey 2005). Market Testing

Screening Commercialization

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

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

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

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

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

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

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

Internal Factors:

 Marketing Objectives
 Market positioning
 Survival
 Current profit maximization
 Market share leadership
 Product quality leadership

 Marketing Mix Strategy

 Target Costing
 Non price position
 Costs
 Organizational considerations

External factors

 The Market and Demand

o Different types of market
o Consumer perceptions of price and value
o The price demand relationship
o Competitor’s costs, price and offers
o Other factors (Economic, Government, etc.)

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PRICING STRATEGY

 Penetration pricing
 Skimming pricing
 Competition pricing
 Product Line Pricing
 Bundle Pricing
 Psychological pricing
 Premium pricing
 Optional pricing

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

PRICE SEGEMENTATION

Company Economy Mid-size Luxury Segment Super Luxury

Segment MSRP Segment MSRP MSRP in £ Segment MSRP
in £ in £ in £

Ford Motor Ltd. 17,700 27,950 27,678 27,575

Toyota Motor Ltd. 19,595 29,245 26,400 39,770

General Motors 24,250 31,740 42,080 61,345

Honda 15,655 19,110 26,800 36,780

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

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Ford adopted a competitive pricing strategy. Prices were fixed on the basis of the norms
prevailing in the international market. Also the prices offered by their competitors like Toyota,
Honda, Nissan, were kept in mind while deciding the prices.

Ford uses Value Pricing in which price is set in accordance with customer perceptions about
the value of the product/service.

PROMOTION MIX
This is a key component of marketing mix, is a concept of communicating with customers for
business. Communication involves various approaches like Advertising, Direct marketing,
sales promotion, internet marketing, personal selling, Public Relations. Combination of all
these key approaches called as promotion mix. Ruskin-Brown (2006:136) defined this as “A
number of promotional methods used in combination to promote a particular product through
communicating with individuals, groups and organizations”.

Personal Advertising
Selling

Promotion Mix Direct

Public
Marketing
Relations

Sales
Internet
Promotion
Marketing

Figure 3.3.1
The main objectives of promotion are:
 To bring the Product or service awareness to customers and persuade them to buy
 To build/improve credibility
 To successful launch a new product in existing market/promoting a existing product
in a new market
 To increase the sales

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

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

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

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

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

27
The Ford Britain Trust handles charitable requests received by the Company. This bags the
customers soft corner and credibility. (Marketing magazine 2009)

Ford latest ad for Ford Focus:

“The TV, print and outdoor campaign,
by Ogilvy Advertising, continues Ford's
ongoing theme of ‘kinetic design' and
the suggestion that Ford vehicles look
as though they are in motion even
when stationary” (Marketing magazine
2009)

Fig 3.3.2

“Ford promotes Focus with interactive giant

plasma ball” (Fiona Ramsay 2009)

Fig 3.3.3
Fig 3.3.3

28
Direct Marketing

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

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

Fig 3.3.4

29
SALES PROMOTION

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

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

Who maintain car for personal Accessory Promotions

usage
Service Promotions

Insurance Promotions

Mobility Customers: Best buy offers

who are ready to buy cars with the

acceptance of mobility scheme in
which conditions are amended any
moment.

Business and Commercial Car promotions

vehicle users
Commercial vehicle promotions

Contract hire promotions

Larger Fleet Customers: Less market price

who operate more number of

vehicles

Table 3.3.1

30
INTERNET MARKETING
Internet marketing is the best and cheapest way to attract the customers. Internet is the only
place where the global exposure can be achieved easily. This can defined as: “Achieving
marketing objectives through applying digital technologies” (Chaffey et. Al, 2006).

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

Fig 3.3.5

31
PERSONAL SELLING
This is an approach to maintain a good rapport with customers for purpose of making sales.
Personal selling will be dealt by the sales team on behalf of an Organization. Personal
selling is very useful for the products which are complicated to self analyse and understand.
Ford products do not have any difficulties to reach the customers and bring them to live
about product. In Ford, There are sales and marketing teams who take care of product and
offers promoting activities.

PUBLIC RELATIONS / PUBLICITY

“Public relations is the art and social science of analysing trends, predicting their
consequences, counselling organisation leaders and implementing planned programmes of
action which will serve both the organisation’s and the public interest” (Wilcox et al. 2003:6).
Ford boost up their sales through publicity with sponsorship Activities, Events and
contests.

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

Ford has three years journey with official supplier to the Edinburgh Tattoo. They
sponsor tickets in affordable prices in order to sustain the shows towering standards
and also to upholding the show for upcoming generations.

As Ford is an official dealer to Disneyland Resort Paris, it plies support vehicles to

the theme park, in revisit ford provides a lots of extraordinary packages, which they
often offer missing in price draws & competitions.

Sponsorship with UEFA champions association, Ford is also a title sponsors to

Talksport’s for the football shows holding on Tuesday and Wednesday.

Ford is sustaining 15 years rapport with Sky Sports, as they are much interested in
the football show. Indeed, Ford launched both new models Mondeo and Kuga in the
final show of the UEFA champions League, through the advertisement break. (Ford
2010)

32
Press Releases:
Press releases help to improve credibility and bring the awareness to public about the
current activities and future prospects of an organization. Ford recent press release about
novel low carbon vehicle project bagged the financial support from government and
successfully grabbed the public attention. Also government chains Ford's main travel to low
carbon vehicles.

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

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

3.4 PLACE

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

 AGENTS AND BROKERS: People who own the authority in legal from the producer.
 WHOLESALERS: People who interacts with retailers.
 DISTRIBUTORS AND DEALERS: People who interact with customers and may
provide additional benefits.
 RETAILERS: People who communicates to customer directly.

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

33
B2C Distribution channel – Consumer Goods

Figure 3.4.1

As mentioned in above figure 3.4.1, channel 1 represents direct marketing channel.

Remaining channels represent indirect marketing channels.

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

customer.
 Channel 2 is the one which is currently ford is following. Vehicles that are
manufactured at manufacturing units of Ford are distributed to dealers through road
or train transportation. Consumers can buy the cars directly from the dealer’s show
room.
 Channel 3 and 4 are about the distribution through wholesaler and/or retailer. This
approach followed in Retail industry.

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

34
B2B distribution channel – Business Goods

Business to business communication channel doesn’t consist of retailer intermediary level

and final products reaches for business clients. Channel levels appeared as in the
mentioned below diagram.

Figure 3.4.2

Distribution channel for Service Goods

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

Figure 3.4.3

35
Channel membership – Market coverage:

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

Intensive distribution: Through this, as many as possible outlets can be placed for a
product. Since Ford aimed for medium segment market, it follows intensive distribution.(
Ford, 2010)

Selective Distribution: In a particular geographical area, distribution through a selective

set of outlets rather than everywhere.

Exclusive Distribution: Distribution through a single outlet for a particular geographical

area.

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

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

36
 Figure 3.4.4 : Ford Distribution Channel

IMPACT OF MARKETING MIX ON THE ORGANISATION

Sales from Existing

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

Fig 3.5.0 (Douchlas 2010, Relchheld 2010)

37
Customer will have lifelong tie with the organization. Organizations maintains its reputation
not just by giving good services and products, it deals with how the customers. The
organization should give more than what the customers expect from them not only in the
form of services and products. The customers more attract to the brand name of the Ford
and they are maintain that standards throughout the year (Douglas 2010).

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

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

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

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

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

38
4.0 SWOT ANALYSIS

STRENGTHS

• Ford admits greater amount of customer loyalty, and all its individual brands have been
enjoying the benefits of the good reputation that they have through the quality makes and
services. They have brands and models of cars to appeal to every kind of demographic
group, and simply cater for the needs and wants of consumers.

• Ford uses a unique concept of virtual assembly lines in their models through which they
were able to re-use the same spare in their diversified model of cars. This enables ford to
lessen cost on production of new spares and compete market price.

• European market share of ford remained constant over the last five years averaging over
10 per cent, ford UK’s share recently increased by 1.2 percent, compared with March 2008
of 15.5 per cent. Ford's growing popularity among private buyers drove total car share to
16.7.

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

WEAKNESSES

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

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

• Quality assurance of ford seems to be not in control which resulted in recalling thousands
of cars and expensive repair operations, stating to that in 2002, Ford and Bridgestone
experienced a faulty tyre scandal which caused a two billion dollar loss (BBC, January 2002)

• Ford has kept increasing the productivity, while on the other decreasing the cost and
simultaneously counting the No of employees’ exit, which lessons the employee loyalty
towards the company.

39
OPPORTUNITIES

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

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

• Nowadays replacing the old cars for the new ones in the market is
increasing in number, knowing the customers up to date data and consistent
follow up of owners’ minutiae would enable the company to maintain
customer cycle.

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

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

• Ford to expand electric and hybrid range of cars to Europe from

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

THREATS

• carbon dioxide emissions from the burning of oil and gas causes severe effects on
climate change and threatens virtually every segment of the biosphere and human society,
further increase in gasoline prices keeps the automotive industry uncertain of future
innovations and its success.

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

40
• Although global warming turning out to be a greatest threat and individual use of
automotive vehicles increases the risk further, the cars and other private vehicles are a part
of basic necessity on a common man’s view. Therefore it is believed that no real threat of
substitutes exists today, but it is believed that choosing other forms of transport such as
bicycles, public transport’s and sharing mobility would soon be imported in to the minds of
people.

STRENGTHS WEAKNESS

OPPORTUNITIES THREATS

Weakness -> Strength

Figure 4.1 SWOT ANAYSIS OF FORD

Weakness -> Strengths

 Ford is lacking in new design and innovative structures which can be resolved by
investing more funds in to design phase, recruiting and training design engineers and
thus ford can overcome their weakness to achieve greatest of strengths.

 Quality assurance of ford needs to be more intact and must be consistently

monitored with pre-meant standards to make certain no future faults and thereby
attaining customer satisfaction.

41
Threats -> Opportunities

 The price of gas and oil is increasing day by day and remains to be in the state of
uncertainty and therefore electric drive vehicles will be in high demand. Ford can
build cars that run on electricity and other forms of energy to promote and adopt to
the future opportunities that will arise.

Figure 4.2 (High Gear 2010)

4.1 PESTEL ANALYSIS

POLITICAL FACTORS

• Automotive funds and concessions have been reduced to recent heavy recession hit
the world economy from which the European economy is still hard trying to recover (MSNBC
2010).

• The economic recession and financial crisis in Europe 2008 adversely affected and
recorded the least automotive sales year in UK; Ford posted a $129 million loss in the third
quarter and said since the last 25 years. Further ford eliminated another 2,260 jobs and
burnt through $7.7 billion in cash (Ford Media 2008).

42
ECONOMIC FACTORS

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

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

• Rising petrol prices make it more expensive for consumers to drive petrol fuelled cars
which consequently means that consumers are inclined to change their cars which operate
using diesel. (The Guardian 2005)

 Ford being one of the biggest automation manufacturers in Europe reduced the
production of cars due to financial crisis engulfed the continent. In spite of the global
economic recession ford does not anticipate a liquidity crisis in 2009.

• Ford’s SUV’s (Sport Utility Vehicle) and heavy trucks sales declined substantially due
to steep increase fuel prices, in order to that the share price of Ford has also realized a
downfall (Reuters 2005).

• Steady rise in demand for the cars manufactured in Asian market led the ford to fight
against their selling price by reducing cost involved in production and sustain their brand
name by offering the ideal quality and customer satisfaction.

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

SOCIAL FACTORS

• Cars are viewed as a status symbol by people around the world. A person’s influence
and political status is reviewed by vehicle brands they hold. Ford produces a range of
business class cars to captivate the Hi-End
business society UK market.

 Ford intended to produce luxury cars due

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

43
 Ford has competitive edge over attracting the women for the cars designed
specifically for women by women designers in stereotypical view points (Ford 2007).

TECHNOLOGICAL FACTORS

 Industry-leading levels of new technologies and convenience safety features are at

its best in Ford’s 2010 paddle of cars.

 Technological advancements are inevitable for automotive industry in order to

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

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

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

 Ford’s new and improved 2.0-liter, 4-cylinder EcoBoost engine to be launched to

drive the upcoming year.

 Ford to introduce 30 new powertrain actions globally in 2010.

 Ford strives to improve quality with virtual technology in their vehicles that provides
real benefits including reduction in injuries, improving quality and thus helping the company
to become pioneers.

44
 Ford Focus BEV Prototype Technical Data

Battery Technology Lithium Ion

Battery Capacity 23 kWh

Charging time 6-8 hours (230 V grid)

Electric motor Permanent-magnet motor

Max Power 100 kW

Max Torque 320 Nm

Top speed 136 km/h (85 mph)

Range 120 km (75 miles)

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

ENVIRONMENTAL FACTORS

 Ford based in UK dealing with a powertrains project in

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

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

45
 Ford concentrates on The Focus BEV prototypes which are to be used for the UK
program is based on the current European Ford Focus and will use a new all-electric
powertrain, provided by strategic supplier Magna.

 The all electric powertrain technology is based on development for Ford's next-
generation global C-car architecture and the same will be launched as the Focus Electric in
North America in 2011 (Ford news 2010).

LEGAL FACTORS

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

46
CONCLUSIONS
Ford has been the pioneer in the automotive industry in order to sustain their leadership and
to match the requirements of the future needs and updated technologies with eco friendly
approach, ford has planned to manufacture and promote electric cars on a large scale in EU,
though the concept of electric cars is eco-friendly and being encouraged by the people, it
has a major drawback of charging the battery on the go. Following are the conclusions
drawn from the marketing mix.

Ford is spending more on advertising as a result sales came down in 2008.

Prices mounted up by Ford because of recession and the competitors products.
Ford fusion and Focus sales increased gradually.
Ford is a massive success for its kinetic design.
Ford’s sale jumped 43% ahead of GM this month.
Government sanctioned the amount of £2.3billion for Ford its low carbon vehicle
strategy.
Geneva motor show got a good response for C-Max and Grand C-Max.

RECOMMENDATIONS

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

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

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

47
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