Ford Marketing Plan 2013

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  • 1. 2013 Ford Edge Hybrid Jacquelyn Giardina, Chief Marketing Officer Chris Mowbray, VP Product Development Marjaun Bakhtiari, VP MKT Development Nicole Solano, Brand Manager Christina Keast, Director of Existing Research Elle How, Director of New Market Research MKT419 Professor Barretti Marketing Plan
  • 2. Table of Contents
  • 3. Executive Summary Page 1 Introduction Page X Company Description Page X Ford’s Values Page X Ford Today Page X Strategic Focus and Plan Page X Mission Page X One Team Page X One Plan Page X One Goal Page X Vision Page X Goals Page X Nonfinancial Page X Financial Page X Core Competencies Page X Situational Analysis Page X The Situational Analysis Page X Demands and Demand Trends Page X Technological Trends Page X Social and Cultural Factors Page X Demographics Page X Economic and Business Conditions Page X Legal Environment Page X Media Environment Page X SWOT Analysis Page X Strengths Page X Weaknesses Page X Opportunities Page X Threats Page X TOWS Analysis Page X Porter’s 5 Forces Page X The Industry Analysis Page X Current Standards Page X Current Industry Rankings Page X Future Industry Standards Page X The Competitor Analysis Page X Current Competitors Page X Future Competitors Page X The Company Analysis Page X Ford US Sales Page X Ford Focus Hybrid Page X Financial Help Page X The Future Page X The Customer Analysis Page X Current Page X Future Page X Product-Market Focus Page X Product Objectives Page X Features & Benefits Page X Marketing Objectives Page X Market 1 Page X Market 2 Page X Market 3 Page X Manufacturing Market Page X
  • 4. Page 1 Executive Summary
  • 5. Page 2 Introduction • Future consumer expectations • 2013 Hybrid Edge (name) • Features and benefits • Safety and efficiency • Ford’s goals for the Edge 2013 • 3 target markets Company Description Ford’s Values Ford Motor Company started out with Henry Ford’s passion of engineering and mechanics. Ford’s first leap into the world of automotive mechanics was in 1899 when he founded the Detroit Automobile Company, in Dearborn Michigan. It was not long after the Detroit Automobile Company failed that Ford founded the Ford Motor Company on June 16, 1903. What made Ford’s vision different from the other 87 car companies in the United States at the time was Fords understanding of the cultural impact automobiles will have on the society. Ford envisioned cars being an affordable item rather than a luxury in the near future by transforming the manufacturing process. The success of Ford Motor Company was because its’ strategy encompassed a new way of manufacturing called mass production, advancements in technology, the supply chain and most of all changes in lifestyle. Ford’s personal motto, “Help the Other Fellow”, affected his goals, work environment and the corporate strategy of the Ford Motor Company. Ford Today Today’s Ford embraces all of Henry Ford’s beliefs into its current corporate strategy. Ford is known for building the everyday man’s car focusing on reliability and quality. Ford is now a leader in innovation in the automobile industry right next to BMW. Energy efficient efforts, future safety features and technology advancements are all what makes Ford, Ford;
  • 6. Page 3 however, the cars are not all that have made Ford into the global enterprise it is today. Its’ constant effort into driving community through the Ford Motor Company Fund and Community Services is only one way Ford displays its involvement and values for a safe and healthy environment for the community to live in. Because Ford holds these values high in its’ corporate strategy, its research and advancement in safety and energy saving features are genuine and dependable. Strategic Focus and Plan As stated on the Ford Motor Company website: Mission One Team “People working together as a lean, global enterprise for automotive leadership, as measured by: Customer, Employee, Dealer, Investor, Supplier, Union/Council, and Community Satisfaction” One Plan • Aggressively restructure to operate profitably at the current demand and changing model mix • Accelerate development of new products our customers want and value • Finance our plan and improve our balance sheet • Work together effectively as one team One Goal “An exciting viable Ford delivering profitable growth for all” Vision Expected Behaviors Ford Functional and Technical Excellence • Know and have a passion for our business and our customers • Demonstrate and build functional and technical excellence • Ensure process discipline • Have a continuous improvement philosophy and practice
  • 7. Page 4 Own Working Together • Believe in skilled and motivated people working together • Include everyone; respect, listen to, help and appreciate others • Build strong relationships; be a team player; develop ourselves and others • Communicate clearly, concisely and candidly Role Model Ford Values • Show initiative, courage, integrity and good corporate citizenship • Improve quality, safety and sustainability • Have a can do, find a way attitude and emotional resilience • Enjoy the journey and each other; have fun – never at others’ expense Deliver Results • Deal positively with our business realities; develop compelling and comprehensive plans, while keeping an enterprise view • Set high expectations and inspire others • Make sound decisions using facts and data • Hold ourselves and others responsible and accountable for delivering results and satisfying our customers Goals For the 2013 Edge Hybrid, Ford strives to achieve the following goals. Nonfinancial Goals 1. Retain spot as global market leader with over 100 plants and 280,000 employees worldwide 2. Sustain profitability and rank as Number 1 US auto Company 3. Introduce 2013 Hybrid Edge into Chinese, European and US markets 4. Enter and increase manufacturing in India to lower plant costs 5. Build efficiency through better logistics, distribution and control 6. Succeed at all implementation factors 7. Build awareness and increase sales of all Ford Hybrid automobiles Financial Goals 1. Increase market share from 16.7% of the market to 20% by 2013 2. By 2013 Ford hybrid sales should increase over 100%; in 2009 Ford hybrid sales increased 73% 3. Sustain 50% increase of new car sales through 2013 (Ford increase new car sales of 40% on April 1, 2010)
  • 8. 4. Push industry hybrid sales to increase 10% annually 5. Ford Hybrid Edge & Fusion to see sales of 100,000 vehicles in each market by 2013 Core Competencies 1. Provide high quality automobiles for the average middle class citizen in the global market 2. Satisfy each customer’s need and demands with the right car and safety features 3. Continue to invest in safety features and environmental benefits 4. Deliver end product to consumers quicker by improving the distribution and manufacturing systems through implementing RFID and other technologies Situational Analysis The Situational Analysis Page 5 Demand and Demand Trends • Global climate change bringing pressure to automotive industry to make right decisions in emission level targets, R&D and manufacturing • Based on high cost, low profit margins • Many companies making Hybrid cars; Ford already having the Escape Hybrid • Uneven growth: demand for cars is growing in China, India, Eastern Europe • Markets in US, Western Europe, Japan are flat/ declining • Accelerated volatility: new cars that initially sell well may lose its ground within 2 years • Customers have more choices than before; less loyalty • In industry today must have higher degree of flexibility and responsiveness so suppliers can act quickly when volumes are not up to par Technological Trends • Advances in digital technology, wireless communication, processing technologies, and software have widened the dimensions of product development in the auto industry • Experience with DVD-based rear-seat entertainment, voice-based navigation, and satellite radio systems. • Power train, fuel combustion, crash protection, and the creation of a comfortable cabin and nearly wireless environment. Almost 100 sensors covering various car sections from under-the-engine hood to the exhaust stream ensure safe, clean, and economical vehicle operation (sensors account for almost 30 percent of the manufacturing cost of a car) • While the benefits of some electronics are as cost-saving modules for the parts they replace, some others such as voice recognition and night vision systems have obvious marketable advantages. • Using multimedia delivery platforms and user-friendly voice- and touch-screen-based human-machine interfaces. Provide entertainment to passengers / improve navigation by sharing data across components in the car • Advanced electronics also control a car’s subsystems to improve the driving experience or make the car more efficient.
  • 9. Social and Cultural Factors United States • The US has improved its focus on the environment, particularly in fuel emissions for many cars. The Obama CAFE Standards (Corporate Average Fuel Economy) was passed on May 19, 2009. The new national policy stresses an increase in fuel efficiency and limitations on greenhouse gas emissions for all light trucks and SUVs starting 2012. All car models from 2012-2016 will have to adhere to the policy of a fuel-economy standard average of 35.5mpg (39.9 mpg for cars and 30.0 mpg for light trucks and SUVs). By passing this new policy, it is expected to save the US 1.8 billion barrels of oil from 2012-2016, along with a 900 million metric ton reduction in C02 emissions---the equivalent of taking 177 million cars off the road (West 2). • Consumers are stressing the need for more Car Safety Features. Many American consumers are looking for more added car safety features for new vehicles. As a result, manufacturers are coming out with “collision mitigation systems” which are technologies that help drivers from hitting objects or help to avoid collisions (West 2). • The economy has taken a downturn, beginning in the fall of 2008. As a result, many Americans have focused more on staple needs and less on luxury items such as new cars. The unemployment rate is expected to remain high even by 2015 and this could affect car sales (Bradsher 2). China • In China, there is a rising middle class that can afford to purchase cars and other items. This is due in part of the increase in money and per capita experienced by the Chinese economy. A vast majority of individuals in China prefer to purchase SUVs or sport SUVs because it is a symbol of power and wealth. There was a 50% increase in sales for SUVs from the previous year (Stern 2). • The Chinese Government has increased the demand for cars by cutting taxes for new vehicle purchase and offering subsidies in rural areas to help mitigate the recession. Demographics • Focus more on China • Sold 23,616 units in China • Expanded growth in market will mean more prevalence in Chinese market
  • 10. • Over 4.1 million passenger cars sold in 2006; 25% growth increase in auto sales • Estimated 600 million middle class citizens in Chine by 2015 • Over 80% of middle class has 3,000 yuan or $440 USD • Annual income between 60,000 yuan – 500,000 yuan • Focus more on European markets Economic and Business Conditions China In recent years China has become the fastest and largest growing country and economy in the world after the Unite States. Over the past 30 years China’s GDP has grown over 10% and will continue on that rate for many more. There are still discrepancies between the social classes; finally the middle class is growing rapidly due to the industrial, agricultural and global growth of the country. Since the 70’s the country had put efforts forth to reform the economy such as foreign investments and permitting trade. With the three markets Ford is targeting for the Hybrid Sport Edge, China will be the economy whose purchasing power will be the highest. Europe Western Europe economy though was hit with the global recession has always been stable compared to Eastern Europe and many other countries. Countries such as the United Kingdom, Germany and Italy are currently battling inflation, rising prices for food, and energy and the unemployment rate is rising. By 2013, the economy should be turning around; however it is not likely that Europe will be in a much better place. This is all due to the sub-prime mortgage problem that started in the United States. United States For the past two years, the United States has been fighting the consequences of the schemes and lies of the subprime mortgage crisis that ended up hurting the global economy. Finally, the unemployment rate has started to drop, and the economy is slowly starting to turn
  • 11. around. The state of the automobile industry in 2013 will be at a similar point because the economy by then still will not have made a huge improvement. The gap between expansion and contraction in the US is growing even larger, meaning the economy is taking its time. Legal Environment Governments such as in the United States have now taken into consideration the importance of safety regulations and eco-friendly products. We have a social responsibility to take care of the environment and hybrid and electric cars are the answer. There will not be a significant gain in hybrid auto sales by 2013, however research has proven that within 10 to 20 years, individuals will come to realize the personal and environmental benefits of owning a hybrid vehicle. Media Environment • Automotive companies on average spend $50-$100 million on Page 6 marketing/advertising • Ford Spends about $80 million • Money goes towards Social websites, their website, print, television/commercials, radio, outdoor campaigns • Specific Media works with a number of Fortune 500 brands including seven of the top 10 companies. No other media company gives advertisers the ability to reach their target audience online with nearly 100% accuracy. • Specific Media is headquartered in Irvine, California, with offices in New York, San Francisco, Los Angles, Chicago, Dallas, Detroit, and Fort Lauderdale. SWOT Analysis Strengths • Wide geographic presence • Brand reputation • Strong portfolio of quality products Community Relations
  • 12. • Targets surrounding community (breast cancer awareness campaign was created where celebrities speak about how breast cancer affected them) • Takes strides to protect the environment; development of electric vehicle & efforts to increase fuel efficiency • Since September 11th attacks on America, ford and its employees have made extensive donations and held fundraisers and events by Ford in response. Employee Relations • Ford provides incentives for employees; ex: “Thumbie” award is given to employees demonstrating high personal commitment to their customers and community • Higher wages; hourly workers have wages between $19-26 an hour, skilled trade workers make $21-30 an hour • Company created Family Service and Learning Center program for Ford workers, family members and retirees, offering health classes, after –school tutoring and trips for seniors Investor Relations • Maintains high level of communication with its investors and potential investors • Accurately and honestly reports earnings and losses in ways easily accessible by the public via company Web site, mailings, and print materials by request Weaknesses Page 7 • Product recall • Declining operation margin • Declining market share in sector • Huge debts Employee Relations • The company will make buyout or early retirement offers to all 42,000 U.S. hourly workers • 50 percent of the payments that Ford is required to make into a union-run trust fund that will take over retiree health care expenses starting next year. The company owes the fund roughly $13.2 billion on a $23.7 billion liability. • Eliminated 2009 bonus • 30% pay cut for Mullaly and Ford Jr. Investors Relations
  • 13. • Results of recessing economy investors worried about slumping sales and profits, possible dividend cut, possibility of credit downgrade • Due to increase expenditures from recalls and severance packages shareholders not getting as big of return on investment in the company. Opportunities • Large potential in the emerging markets • Consumers seeking more American products • Outlook for hybrid and electronic vehicles • Increasing demand for fuel efficient • Restructured operations • Business abroad Threats • US economic slowdown discouraging people from buying cars • rising manpower costs • layoffs due to lower production levels keep raising concerns among employees about their job security • intense competition • reorganized Chrysler and GM • Ford will have tough time pleasing investors TOWS Analysis See Appendix A. Porter’s 5 Forces Page 8 Supplier Power –Medium • Mass production – high volume • No forward integration • High cost compared to total purchase in industry • Low/no switching costs Buyer Power – Medium • Consumer has some bargaining leverage • Available substitutes • Price sensitivity is common for Ford (no price sensitivity for BMW, high end brands) • Low volume; cars are investments; people don’t usually buy multiples
  • 14. Barriers to Entry – Medium • Difficulty entering into established industry • Currently numerous options for automobile customers Threat of Substitutes – High • Plenty of options in the car industry • Dependent on price performance • Dependent on customer loyalty Rivalry – High • Brandy identity and equity • Differentiation between competitors • Hybrid market growing • Industry is at maturity Page 9 The Industry Analysis Current Standards Although cars are becoming more fuel efficient, hybrids make up less than 3% of the market and consumers have shown little interest in buying them as of 2010. Automakers are appealing to customers by claiming a desire to reduce oil dependency and help the environment; however few consumers have take the hybrid plunge because of the upfront costs as well as the competition of low cost conventional gasoline engines. High gasoline prices influence consumers to purchase hybrid, for example when gasoline prices rose to over $4 per gallon, hybrid vehicles were in short supply. Several efforts have been made by the Obama administration to implement new standards and regulations for automakers. Presently fleets achieve 27.5 miles per gallon, however by 2016 they are required to achieve 35.5 miles per gallon in order to preserve resources and increase efficiency. Automakers must prepare to follow strict regulations regarding the environment and natural resources.
  • 15. Ford increased their total sales by 34.4% from January 2009 to January 2010. With Toyota recalling many of their vehicles, once loyal customers are now open to the idea of change and are willing to step away from their once trusted brand. By capturing portion of Toyota’s lost sales (-8.7%), Ford now has the opportunity to retain these customers by providing quality products and reliable customer service. Although Ford has been the primary beneficiary of Toyota’s lost share, GM and Hyundai also launched several incentive Page 10 programs in order to convince Toyota buyers to switch brands. Current Industry Rankings See Appendix B. • January: Ford is the primary beneficiary of Toyota’s lost share • Ford, GM and Hyundai launched incentives in order to convince Toyota buyers to switch brands Future Industry Standards China Car sales in China for 2009 averaged to $13.6 million units. This number is comparably higher to United States car sales for 2009, which was only $10.4 million. Roughly, China sold approximately 76% more than US in 2009 (Guillame 2). Increase in sales is in relation to the Chinese Government’s cutting of taxes for vehicles while offering subsidies in rural areas to help mitigate the recession (“China on Track to Surpass US Sales”). Because of higher sales in 2009, it is expected that the top incumbents of the car industry will shift focus and continue to diversify geographically into China. Despite a higher expected growth rate for future years, there are many potential barriers to entry that inhibit car industry incumbents from successfully penetrating the market. For instance, China’s highways and roads are small and cramped. This could inhibit car sales progressive
  • 16. growth since crowded highways and gas emissions could deter customers from purchasing cars (Stern 1). Furthermore, to increase rivalry and competition within the market, local Chinese Car manufactures are looking to enter the Car Industry by providing Electric Cars (Bradsher 2). More importantly, the Chinese government is also setting up electric car charging stations in its key cities such as Beijing, Shanghai and Tianjin, while also providing Government subsidies and tax credit for consumers who purchasing alternative energy vehicles. Through these changes and incentives created by the Chinese government, it is apparent that they want to relinquish its dependency on oil and reduce urban pollution. Increase in new entrants can cause industry dynamism and stricter competition. Because all participants in the industry are similar in size and scale with higher fixed cost, this could lead to a potential price war if all industry participants increase. Europe The global financial crisis has impacted Europe’s mature car market and has led to declining sales for the entire automobile industry in Europe. Aid from government fleet renewal programs created in 2009 has led to resurgence in car purchases for countries such as France, UK, Italy, Spain and Germany. An example of these government incentives is UK’s “Bangers for cash” program. This program allows customers to donate their old automobiles for scrap page and in turn, will be given a 2,000 pounds decrease off of their latest car purchases. In fact, Germany, one of Europe’s largest car markets, saw a 29.8% decrease in sales during February 2010 because its government fleet incentive program titled “cash for clunkers” had expired during September 2009. Since then, sales have been gradually decreasing. In other countries such as France, UK, Spain and Italy, these incentive programs have not yet expired, and thus, Italy’s car
  • 17. registrations have increase 20.6%, France by 18.2%, UK 26.4% and Spain 47% (“European Car Sales, February 2010: Ouch”). Overall, these government incentives have pacified the demands of three most important stakeholders: the customer, the car manufacturers (automobile industry) and the government. By creating incentives that do not favor one specific car manufacturer; the government is helping all participants in the automobile industry. In turn, a rise in sales from these incentives may result in an increase of car manufacturing jobs within its respective countries, thus potentially increasing employment rate and future revenue generation through vehicle registration costs and employment tax to help further continue these government incentives in the future. Once these fleet renewal incentives expire for the upcoming years, consequences may prove to be detrimental, as represented in Germany’s expiration of the “cash for clunkers” program. However, continued Government Incentives for the following years, may prove to be helpful for the automobile industry in the long-run, since European markets are mature and customers are looking for more incentives to purchase vehicles. If not, car sales and car registrations for the European market may plummet, resulting in lack of growth for the entire automobile industry for the future. The Competitor Analysis Current Competitors General Motors (GM) has taken a different approach to pure electric cars. Their opinion is that drivers often travel beyond the range of electric cars, so they have developed the Volt. The Volt is powered by batteries, but also has a small gas tank for customers who want to drive on battery power for their daily commute, but also have the ability to travel longer distances if they desire. Although this unique concept would leave many consumers very satisfied, the $40,000
  • 18. price tag might prevent some from adopting this concept. GM has increased their sales by 12% from February 2009 to February 2010 and Thomas Stephens, GM’s Vice Chairman for Product Development is anticipating increased demand by 2020. By introducing this product in 2010, Stephens believes they will be more than adequately prepared for the predicted demand of 2020. Toyota has experienced a dramatic change in their overall sales due to the recent recalls and loss of trust in their brand. From February 2009 to February 2010, Toyota has already lost 9% of their sales. James Lentz, president of Toyota Motor Sales has described hybrids as the future “core technology of the entire industry”, and as a result Toyota plans to introduce hybrid power trains across much of its lineup. Although this could be an opportunity for Toyota to regain lost market share, it is unlikely that consumers will prefer Toyota after so much Page 12 trust has been lost. Honda recently introduced the “CR-Z coupe which will arrive at dealerships nationwide in several months. This sleek model offers consumer a “hybrid car that is both fun to drive had has very good fuel economy”, says Honda president, Takanobu Ito. In order to attract consumers, Honda hopes to make their future hybrid models attractive and advanced when compared to Toyota. For higher end consumers, Acura will also be developing a new hybrid model within the year. General Motors US Car and Light Truck Sales • February 2009: 126,170 • February 2010: 141,535 • 12% change Pure Electric Cars • Best in the US • Drivers often travel beyond the range of those cars
  • 19. • Developed the Volt • Powered by batteries, but also has a small gas tank • For customers who want to drive on battery power for their daily commute, but have the ability to go longer distances • $40,000 price could prevent some consumers from buying Page 13 • “If we’re going to have to be ready for the demand in 2020, we have to be out there by 2010 with the first generation” –Thomas Stephens, GM’s vice chairman for product development Toyota US Car and Light Truck Sales • February 2009: 109,582 • February 2010: 100,027 • -9% change Hybrids • Introduce hybrid power trains across much of it’s lineup • “Hybrids will become the core technology of the entire industry” –James Lentz, president of Toyota Motor Sales Honda US Car and Light Truck Sales • February 2009: 71,575 • February 2010: 80.671 • 13% change Competition with Toyota Page 14 • Hybrid market • Introduced “CR-Z coupe” which will arrive at dealership in several months • “This vehicle is reflecting our efforts to make a hybrid car that is both fun to drive and also has a very good fuel economy” Takanobu Ito, Honda President • Acura to develop hybrid model Future Competitors Realizing the surging amount of sales within the Chinese market from 2008 to 2009, many of Ford’s top competitors are also looking to expand and diversify into China. GM doubled sales in
  • 20. 2009 and sold nearly 1.29 million vehicles in China (Yan, Fang and Subler 3). Volkswagen has the highest market share in China, and closely following it is Buick with the second largest market. BMW is China’s fourth largest market and Ford is ranked 5th (“China on Track to Surpass US Sales”). Each company is expected to aggressively expand into the Chinese market within the next few years. All competitors must be wary and avoid potential market saturation of cars in China. Audi sold over 130,000 cars during 2009 in China and Audi’s executive board member in charge of sales and marketing expects selling 250,000 cars in China by 2012 and 2013. Audi is optimistic about their future in China because they are preparing to release newer models and increasing local production and expansion of dealership networks in China (“Audi Sees China Sales Surpassing Germany by 2013”). Other competitors Ford must take into consideration is Kia Motors. During the January-February 2010, Kia’s global sales have increased by 50.6% from last year’s sales, selling 293,659 units. In China, Kia sold 61,339 units—a 180.9% increase from 2009 January- February sales (“Kia Motors posts 39.5% increase in February Global sales”). The Company Analysis Current In 2006, Ford borrowed $24 billion, which gave them enough resources to prevent bankruptcies similar to GM and Chrysler. Changes in the number of jobs and factories have allowed Ford to better align production with demand, which has led to more efficient production and less wasted energy. Ford reported $1 billion in earnings in the 3rd quarter of 2009, which was their first profitable quarter in almost two years. By continuing to implement these changes and through accurate forecasting, Ford should expect to become consistently profitable by 2012.
  • 21. Ford’s focus has shifted emphasis from trucks and SUV’s to cars and crossover vehicles. This conscious change has also caused them to drop luxury brands such as Land Rover, Jaguar and Aston Martin. These high end brands consumed Ford’s resources, distracted management and didn’t provide enough incentive to maintain. By understanding the consumer and focusing their attention on their needs and wants, Ford has successfully reinvented their brand to be quite desirable among consumers. Ford understands the importance of innovation and has made conscious efforts to keep ahead of their competitors. For example, an electronic version of the compact sedan “The Focus” is set to be introduced in 2011. Since there presently is not a large demand for electric vehicles, some companies may be hesitant to take the financial risk that is associated with developing a new vehicle. William C. Ford Jr., Ford’s Executive Chairman stated, “We don’t know what the market is going to be for electric vehicles….But we will be ready for the demand whatever it is, whether it becomes 10% or 90% of the market.” Ford is anticipating the needs of its customers and finding ways to provide quality and innovative products and implementing a global strategy by introducing an electric vehicle. Finally, Ford has initiated several changes in how they market vehicles. Diversity of marketing is created by the customers Ford wants to reach, rather than the differences in the vehicles. This allows for fewer advertising campaigns per product and creates a more tailored target market. Having a specific group of people to target improves your return on investment with advertising and also allows Ford. to make changes in their vehicles that will entice consumers to stay loyal to the brand. Ford US Sales US Car and Light Truck Sales
  • 22. Page 16 • February 2009: 99,050 • February 2010: 142,006 • (43% + change) Ford Focus Hybrid • Ford plans to build an electric version of the compact sedan: The Focus in 2011 • “We don’t know what the market is going to be for electric vehicles. A lot will depend on the ability of people to charge them at home, at work, at the mall. But we will be ready for the demand whatever it is, whether it becomes 10% or 90% of the market” – William C. Ford Jr. Ford’s executive chairman • “The Focus represents the first tangible evidence of a global strategy, for the first time, Ford is executing it and not just talking about it”. • Ford’s focus has shifted emphasis from trucks and SUV’s to cars and crossover vehicles • Dropped luxury brands such as: Land Rover, Jaguar and Aston Martin • Consuming Ford’s resources and distracting management • Initiating changes in how Ford markets vehicles • Typically have 20+ advertising campaigns  Ford Focus would have just 4 or 5 advertising strategies around the world  Diversity of the marketing is created by the customers Ford wants to reach, not by the differences in the vehicles Financial Help • 2006: borrowed $24 billion • Gave Ford enough resources to prevent bankruptcies similar to GM and Chrysler • Fewer jobs and factories to better align production with demand • Changes are starting to show in Ford’s bottom line • Ford reported $1 billion in earnings in the 3rd quarter of 2009 • First profitable quarter in almost two years Page 17  Mulally doesn’t expect Ford to become consistently profitable until 2011 The Future In 2009, Ford Sold 23,616 units in China. A continued growth sales in China makes Ford more willing to enter into the market more aggressively. In fact, Ford is finishing construction on a new unit car plant in the Western City of Chongqing, China, scheduled to start operations in 2012 (Yan, Fang, and Subler 2). A new manufacturing plant in China indicates Ford’s interest in expansion to this region, as well as a competitive advantage in its ability to supply cars to China
  • 23. at a faster rate. The speed in which Ford can produce and sell cars can give the company a competitive advantage. Lastly, Ford has highs of economic growth in lowering costs and attains higher prices for vehicles. Expected sales for 2010 are 12.5 million (Durbin and Krishner 2). A rise in sales within the European markets indicates Ford’s further expansion in these areas for the years to come. In its European markets, Ford sold 93,200 new vehicles across 19 countries in Europe, gaining a 1.8% increase in sales in comparison from last year’s sales. In Italy, Ford increased its market share to 10.1% and sold 22,000 vehicles. Ford is the market leader in Britain, Turkey, and Hungary. In France Ford’s sales grew by 17% and in Spain, 53%. If Ford continues to market its brand name consistently and, as a result, maintains their respective market share, then the European markets will be a lucrative source of revenue for the brand in the near future. By 2011, Ford will realize that it has to maintain its competitive advantage in these markets, specifically in UK and Italy. The Customer Analysis Current Ford has found success by expanding their product lines and targeting as many consumers as possible. This strategy allows them to appeal to customers in many age ranges, income ranges, lifestyles and demographics. With so many different models, Ford is able to target many different lifestyle preferences and capture the entire automotive market. Ford targets consumers ages 18-50 with an income of $30-$100K. Typically Ford is most appealing to the middle class consumer, but again, Ford offers a different model for every potential customer. Finally, Ford is perceived as an American icon, which influences consumer’s decision to buy and support their country.
  • 24. Page 18 Mercury is perceived to be more luxurious than Ford, offering smooth driving and a higher price tag. Mercury targets 35-50 year olds with an income of $60K-$100K. Mercury pays less attention to satisfying the needs of younger, more stylish consumers and instead targets consumers looking for a moderately priced vehicle with high end features. Although Toyota offers similar priced vehicles that attempt to target a large market as well, their recent loss of brand equity makes them less of a consumer for Ford. Ford could increase their market share by highlighting the safety of their vehicles and giving past Toyota customers the opportunity to trust Ford. Page 19 Future Currently, the Chinese per capita is increasing. In turn, this will lead to a decrease in price and an increase of income for Chinese Citizens. Because of this, a burgeoning middle class in China is rising with plenty of money to spend leisurely (“Emerging-Market Investors Bullish on China’s Middle Class”). In fact, car ownership in China doubled within the last five years and first time car buyers make up 4/5ths of the Chinese Market (Bradsher 3). In 2004, only 12% of the Chinese population owned cars and in 2009, 28% were car owners. It is expected that 50% of the Chinese Population will be car owners by 2015. Moreover, 35% of households recently polled in 2009 indicated that they “probably will” or “definitely will” buy a new car in the next few years, thus, increasing the amount of car owners in the future. The amount the Chinese citizens are willing to spend is also gradually increasing (Forbes.com Article 7 “Will Chinese Consumers keep buying cars?”). In 2004, consumers were only willing to spend 185,000 Yuan (an equivalent of $19,000) for a new car. In 2009, the average consumer was willing to spend 130,000 Yuan ($27,000) for a new car (Alberts 1). A gradual increase from 2004 to 2009 can only indicate a higher growth rate in the amount of
  • 25. money consumers are willing to spend for the next 5 years. Chinese citizens are not accustomed to cars with greater power and gasoline powered cars, but over the next few years, new gasoline mileage standard would require an 18% improvement in fuel economy in 2015. This means that from 2009 to 2015, the Chinese Government is expecting an influx of foreign cars (particularly from the US) to introduce cars with higher gasoline mileages and better fuel economy (Schmitt 2). Lastly, the US unemployment rate is still expected to be over 6% in 2015 (Chan 1). This in turn can affect US consumer’s ability to spend money on new cars. Furthermore, bad credit from the foreclosures various American’s are facing coupled with high unemployment rates will make it difficult for future customers to purchase new vehicles. Product-Market Focus Product Objectives Features & Benefits China: Ford Edge Sport Hybrid We want to make the driving experience of this car less work and more pleasurable! • Smaller Frame- make the driver feel more in control. o In China the average amount of kids per family is around 2. There is no need to have such large SUV’s like in the United States. Especially since the Chinese are not as safe conscious as the American people are. • Sporty frame- boost self confidence, increased status satisfaction o The Chinese value status a great deal. The majority of the population of China is around 33-34 years old. Among this population there are more men than women. With this in mind creating a sport version would appeal more to the males, which is a larger target. • Larger Stock Rims- makes the driver feel accomplished, flashy and alive. • Eye Catching Bright Colors (Red, Yellow, Green) - feeling vibrant, energized, unified and luxurious.
  • 26. o In China Red, Yellow and Green are very important colors. Red stands for “good luck, dignity, and mystery”, Yellow/Gold stands for “unity and wealth”, and Green (like the color of Jade) stands for “heavenly and vitality”. The bright colors will directly reflect the sporty frame of the vehicle. • Larger exhaust tip- feeling sporty, quick. • Power Windows- makes the driver feel they have the power, relaxed and in control. o Equipped with child safety lock. Worry free drivers. • Leather Seats- luxury feature that will make the driver feel accomplished. o 2 toned: tan with black trim for sporty look. • Air Conditioning- feeling cool, refreshed and comfortable. o Dual regulation; front and back, for ultimate comfort. • IPad- makes the driver feel at ease, fun, comfortable, and not lost. o Built in high tech touch screen IPad into the dashboard. Brings fun to navigating and allows the driver to search using Google maps GPS etc. • Car Phone- feeling productive and accessible. o Makes the driver feel safe while talking on the phone. Provides increased alertness of the road while driving and talking. Driver is able to keep 2 hands on the wheel while still talking. • 4 doors • AdvanceTrac® w/RSC® (Roll Stability Control)- safety feature • Side Impact Airbags- feeling safe and secure. o Feeling protected and at ease knowing that your family and friends are protected also. • Fold-flat passenger and standard 2nd row fold flat seats- o Provides the driver with flexibility and availability. Knowing that there is enough room for luggage and equipment is a good thing. • Dual Sunroof- feeling fun o Bringing light into the car makes you feel stylish and free. Children love it because it is fun and drivers love it because it eliminates that boxed in feeling.
  • 27. All features from here on were inspired by this article. http://www.surfersam.com/articles/new-car-features.htm • ABS Breaks- feeling safe and in control o ABS prevents the wheels from locking up by applying intermittent brake pressure, giving the driver a feeling of more control. • Center Console charging dock- feeling luxurious and privileged o Now there is no need to plug in your electronics to charge them, this 6in x 6in platform provides Bluetooth power, providing you with the comfort of always knowing you’re connected and always having the juice in your phone for emergency calls. • Tire Pressure Update- feeling alert and aware o Dashboard light that alerts the driver when the tire pressure is out of the specified range. • “Run-Flat tires”- feeling safe and comforted o Run-Flat tires will keep their shape for up to 50 miles, even when there is no air in them. You will not have to worry about changing your tires in the pouring rain or on a dangerous highway. • Backup assistance camera- feeling comforted and assisted o “The camera projects the image of what’s behind the car onto the dashboard navigation screen.” • On Star Assistance- never feeling alone o Locked your keys out of the car? On-Star will locate where your vehicle is and provide support. On-Star will provide support for everyday problems that drivers may encounter on their journey. • Keyless ignition- feeling secure and at ease o Easy and fun. As long as your key is located inside the vehicle the car will allow you to push start. Without the key, the push start will not work, providing security for possible theft. • 2 USB Ports in dash o Turns the Edge into a very functional and convenient vehicle. • Rain Sensing Wipers- easy o Windshield will sense liquid and send an alert to the wipers to turn on. The harder it rains the faster the sensor will send the message for the wipers to move faster. No more struggling to find the wiper button, making the experience of driving the Edge more at ease and fun with innovations.
  • 28. • Lane Departure Warning System- feeling alerted and comforted o Picture sensing located in the headlights of the Edge, which transfers to the steering wheel so that when the Edge starts to veer out of the lane the steering wheel will vibrate, alerting the driver. • Cold & Heated Cup Holders- feeling pampered o Never have an issue again with your coffee going cold, or your cold drinks getting warm. With a touch of a red or blue button you can keep your drinks at the right temperature, keeping you fully satisfied. Marketing Objectives Ford’s marketing intent is to capitalize on safety and efficiency and provide the global markets with awareness and interest of their new hybrid vehicles to ultimately influence trial and action. As a result, an increase in global market share and brand equity will provide Ford with increased revenues and leverage against Toyota and their hybrid campaign. Below is the current state of Ford’s growth the past four years and shows where Ford should capitalize its efforts. *From Business Monitor International Market 1: China
  • 29. China’s government and economy is in the best shape that it has ever been in. A reflection upon this economy brings relatively healthy demand. China’s government also creates sales cut taxes and subsidies to replace older vehicles. In fact China has outsold the US in Ford vehicles in the first four months of the 2009 fiscal year totaling 197,212 vehicles. Our macro- goal is to gain a relatively strong market share against our main competition. Page 20 Market 2: Germany, Italy, United Kingdom Current Top European Markets. We will continue to expand the product line by introducing new hybrid models to Ford’s current markets in Europe, more specifically Italy, United Kingdom, and Europe’s number one market Germany. In March 2009, Ford’s sales grew 39.6 percent to 28,300 units, whereas sales in Italy, Europe’s second largest market, grew 21.7 percent to 23,800 units. With this brand equity in place we can focus on a strategic marketing mix for the new hybrid line. Market 3: United States The economic crises in 2008 resulted in a major credit crunch causing the United States economy to fall into a recession. With high unemployment and low average income, this economy is not ideal to market full fledge with this type of higher priced vehicle. Although a small amount of the budget will focus on the US consumers who can personally afford it. Ford has the highest brand equity in the United States and there is potential for a rebound in sales in the years to come. Promotional strategies and tactics will be creative and focus more towards
  • 30. deep discounts and incentive promotions. Most of our focus for the United Page 21 States is to Advertise with consumer and retail promotions. For market share see Appendix C. Manufacturing Market: India Although India is one of the largest populated countries in the world, there are political issues getting in the way of a suppressed economy. Although since the economic liberalization in 1991 there has been a gradual decrease of restrictions on the industry. This creates an ease from barriers for exporting and importing vehicles that are manufactured in this country. Manufacturing in India would also be cheaper and more appropriate since the main market focus is in Europe and China. Target Markets The Primary Target Market in China is 21-50 year old male or female in the burgeoning middle class with a steady source of income between 60,000 RMB/yuan – 500,000 RMB/yuan and a disposable income of 22,000 RMB/yuan per household. These individuals can either be single or already starting a family. The Ford Edge will appeal to these intended customers because of its rugged exterior, small frame, sleek look and American Brand Name. Primary Target Market in the UK, Germany and Italy are 21-50 year old male or female, lower to upper middle class who are single or want to start a family soon. These individuals want a small SUV that is economically friendly and affordable. Primary Target Market in the United States is 21-50 year old male or female in the upper to lower middle class brackets with a steady flow of income between $40,000-$75000+ and are either single or starting a family. These individuals are college educated who live in urban cities with an active lifestyle.
  • 31. Points of Difference Positioning Brands Ford • American icon • Different model vehicle for every price, style, efficiency, work load, gas mileage or muscle • Typically priced for middle class consumer • Target age: 18-50 • Target income: $30-$100K Mercury • More luxurious than Ford brand • Smooth driving • Target Age: 35-50 • Target Income: $60-100K Volvo • Geared toward safety conscious consumer • Family vehicle • Offer solidity and reliability • Target income: $60-100+K Lincoln • Sophistication and comfort Marketing Program Marketing Tactics Product Strategy Features/Benefits: This rugged, small framed American brand name SUV is equipped with a sophisticated safety system while still maintaining the sleek and sporty look. Drivers will feel safe, stylish and fun. The Ford Edge brings more pleasure to driving than any other vehicle on the market.
  • 32. Target: China- 21-50 M/F, income 60,000 yuan – 500,000 yuan UK/Italy/Germany- 21-50 M/F new family owners United States- 21-50 M/F $40,000-$75,000 Product Role: Destination purchase The purchase of this medium to high priced vehicle is a big decision with many pre and post buying behaviors that come into play. Our job is to satisfy all these behaviors to make sure the customer is fully satisfied with their destination decision. Segmentation Analysis: ID: Transportation vehicle Segments: SUV, Truck, Car, Sub-Segment: Ford, GMC, Toyota Quality Segments: Good, Better, Best Price Strategy Pricing Objectives – US, China, Europe Analyze pricing situation Select Pricing Strategy Determine Prices and Policies Placement Strategy The primary way to purchase the Ford Edge is through local Ford dealerships. These dealerships should be placed in areas that are easily accessible and recognizable to interested customers. For customers that are loyal to Ford but are not aware of the Edge, the car should be strategically
  • 33. placed and displayed on-top of a stand inside and/or outside with special signs surrounding it in order to extenuate its presence and draw customers to it. Promotion Strategy The Ford Edge is a top quality automobile that offers a variety of features and benefits to its customer/owner. In order to convey these benefits and to attract the intended target markets in China, UK, Italy, Germany and US, a common marketing theme displaying the Ford Edge in “Edgy Situations” will be implemented. This marketing theme will be prevalent in all markets to provide consistency for the media strategy. Although Ford will be marketing to different countries with different cultures, the “Edgy Situations” conveyed through the media vehicles will be universal situations most individuals can relate to. The underlying goal for the Edgy Situation Promotion Strategy is to inform customers that the Ford Edge is the solution to the difficult situation at hand and he/she will be able to complete the task using the Edge, no matter how hopeless the situation appears to be. The media vehicles used to promote the Edgy Situation strategy will be TV, radio, print, outdoors, and events. *We will mainly focus on the Chinese market in terms of media vehicles and messages being used. It is our largest target market, and should be paid close attention to for Ford’s entrance into a new market. TV Television is the largest mass media vehicle used today all over the world. It would be in our best interest to partner with the CCTV (Chinese Central Television) to broadcast our advertisements. CCTV has 19 channels, 1 billion viewers and is the major television broadcaster in China. CQBS (Chongqing Broadcasting Group) is another large broadcasting service that is carried out into urban areas throughout China and available nationwide. In order to reach the people of Hong Kong we would have to partner with ATV (Asia Television Limited), TVB (Television Broadcasts Limited) and Cable TV Hong Kong. This would allow us to reach out to roughly 7 million people. The HKBN (Hong Kong Broadband Network) is said to be the most upcoming network in Hong Kong possible reaching up to 90%
  • 34. of all households. This network will be closely monitored to make sure it does thrive over the next few years, if so our presence will be on that network. To utilize this mass media vehicle, we will broadcast different commercials in different regions (markets) but the message will remain consistent as mentioned in the promotion strategy. In order to create awareness within the Chinese market, we will have to use a celebrity icon many Chinese citizens idolize and have that celebrity stuck in an “Edgy Situation”. One of the commercials we will use in China, will involve NBA Basketball player Yao Ming. Yao Ming has gained wide popularity in China and the Chinese people in China enjoy watching American NBA Basketball. As such, using Yao Ming will immediately attract Chinese viewers to stay and watch the commercial, as opposed to switching the channel. To remain consistent with our marketing strategy, our advertisement will have Yao Ming visiting some friends in a distant Chinese village. Soon, an old man comes through and tells Yao Ming that he is late for his basketball game. Looking at his watch, Yao Ming digs the keys out of his pockets and runs to his Ford Edge, conveniently parked in front of the door. He hops into the car and starts to drive to the stadium. Yao Ming will then be driving in a rugged terrain in order to display the rigidity of the Ford Edge. While he’s driving, a cut scene displaying the basketball stadium appears and the announcers are beginning to call the names of the players. It will then cut back to Yao Ming stepping on the peddle and hurrying to the basketball game. A cut scene occurs again where the announcers are calling Yao Ming’s name and the fans are yelling to support him, but he has not appeared and the fans start to get quiet and wonder where he is. The announcers will then say his name again, and out of the locker room comes Yao Ming in his Ford Edge driving up to center court with the spotlight on the Ford Edge while the fans continue to cheer. Yao Ming will then step out of the Ford Edge and wave to his fans while the tag line appears near the end. The “Edgy Situation” displayed in that commercial was Yao Ming being late to his important game. He needed to get to the game quickly, safely and most importantly, be able to drive fast in China’s rugged terrain. The solution to his problem and dilemma was Ford Edge. The Edge allowed him to drive through China easily and arrive in style.
  • 35. Print Although print is a dying industry, we would like to put some of our budget towards it to capture the most of our target market as possible. Magazines like Forbes, Time and Motor-Trend are the issues of choice. These titles will bring in the most Gross Rating Points when it comes to reach and frequency. Our strategy is to make sure that our advertisements are 4 colored full page ads that are found on the back cover of the magazines, this is the most viewed page besides the cover. We will implement a diverse set of messages that will directly reflect the lifestyle that our target market personifies in each country. For example, in China we will create messages that will seem innovative and luxurious whereas in the European countries we can create messages that further reveal the sporty and green look of Ford. To remain consistent with our “Edgy Situation” campaign, a print advertisement showing the Ford Edge driving on the edge of the cliff will be shown in order to capture the customer’s attention. The cliff’s edge will vary depending on the market we chose to display that ad. For example, in Ireland (UK market), we will show the Ford Edge driving on the Edge of the Cliffs of Moher, an iconic cliff for the Irish people, and certainly most recognizable by many tourists. Radio There are over 3,000 radio stations in China that broadcast a total of 200 hours per day. We believe that a 30 second pre-recorded commercial that is put on a rotator is a viable option for this specific media vehicle. A more natural flowing advertisement could be from DJ live product shout outs. This seems live and more realistic. Radio is slowly dwindling towards satellite and HD radio which is great for our pre-recordings, which are easily transferable to the desired radio type. Events Sponsorship of events is a great way to really get customers to see the real personality of Ford and what they are all about. These sponsorships will reveal to our target market that we believe in the same values as them. These events can really solidify the potential customers purchase. A very different yet interesting idea that we feel will work well is opening our manufacturing doors for all potential buyers to walk in and see how the vehicles are made and tested to industry and more importantly Ford’s
  • 36. standards. Having this option would really make the customer feel warm and confident about how their vehicle has been made. Sponsorship of certain sporting events such as the NBA finals would provide a huge return on investment between all the viewers in the United States, and more importantly, China. One way Ford can encourage interested customers to try the Ford Edge is to provide “trial cars.” Tourists or anyone in need of a car can easily go to a local Ford Dealership and rent a Ford Edge for a maximum of 30 days. By allowing rentals of the Edge, customers who rent the car will gain familiarity and comfort with the Ford Edge. In turn, this familiarity will propel customer’s to purchase the Ford Edge after experiencing the various benefits the car has to offer. Finally, the famous key contest is always a great way to bring customers into the dealership. Ford will start a mini campaign where they mail out cut out shaped keys to all of our target market potential customers. These customers have the option to come into the dealership with that key and try to open any of the new Ford Edge models on the floor to see if it opens. If so, the car is theirs as long as they meet contest requirements. Outdoors Billboards and Transit advertisements would be most useful in Hong Kong. China has one of the best public transportation systems, which the majority of the population rely on. What this means is that commuters have to ride the trains and subways twice usually from Monday – Friday. This gives us 10 opportunities per week per public transportation rider to reach them. This is a very large frequency base that we can capture to really generate awareness and interest of the new Ford Edge Hybrid. These print advertisements will be watered down screenshots of our commercials that explain the edginess of the Ford Edge Hybrid. The unexpected situations will get the viewer wondering why the car is parked in the middle of a basketball court. Using modeled screenshots of Yao Ming standing next to the car would be a viable option. The popularity of Yao Ming alone in China will attract viewers to these ads. Exclusive billboards can be placed in the middle of Hong Kong, which is larger than Times Square. This action packed, technology based electronic billboard can show a quick video clip of the commercials made. By doing this we can change up some of the messages while still keeping the consistent theme.
  • 37. People Strategy An essential part of the marketing P’s is the use of the precise staff and community. Consumers as well as future employers make judgments on service based on their interaction with the people we have chosen to staff our company with. For this reason we believe that staffing the office with experts on the culture, rules, regulation, and customs on the countries that we would like to expand to. This mean staffing the company with people who have major in the cultural and business aspect of these specific company, people who have had extended expertise’s, knowledge and background doing business in that country. Staff should have the appropriate interpersonal skills, attitude, and service knowledge to provide the service that consumers are paying for. Process Strategy Page 22 Because the Ford Edge is expensive, it is considered a destination item. Destination items are products customers spend time thinking and doing research on that specific product before purchasing it. In order for consumers to even begin thinking of purchasing the Ford Edge, he or she must be made aware of its existence and later gain interest in the benefits the Edge can give. During trial and action stages, the consumer must be able to test drive the Ford Edge found at a local Ford Dealership in the area. Trying the Ford Edge is a crucial step for the consumer because he or she will actually get to drive the car and experience it. As such, trial incentives like the one stated under the media vehicle “events” must be implemented in order to make the consumer want to test drive the Edge and keep it. Once the consumer decides to purchase the product, retention services must be made to ensure that the
  • 38. consumer is happy with his/her purchase and more importantly, make sure that the consumer remains loyal to the Ford Brand. Physical Evidence Strategy The physical evidence includes the tangible aspects of the product and/or service. After purchasing the Ford Edge, not only will the customer have the actual car itself, but he or she will receive the proof of purchase (receipt), the car manual, warranty information and most importantly, the car keys. These tangible items help to make the purchaser feel empowered and provide a confirmation of ownership. Financial Data and Projections Past Sales Revenue 4th Quarter 2009 Revenue See Appendix D. Past Income Statements See Appendix E. Future Sales Projection After analyzing the 2010 First Quarter results, Ford has shown a vast improvement of a 25% increase in sales and feels very confident that from here on out the company will be profitable and successful. A 25% increase is extremely large, yet Ford has not forgotten that it will be a slow process and recovery for them and the rest of the auto industry to catch up (WSJ Market Watch). There still are concerns for high material and manufacturing costs; however this does not reflect the 2010 first quarter sales of $14.1 billion in North America, compared to last year’s 10.0 billion. Ford of Europe has also seen a definite increase with a profit of $107 million compared to 2009’s loss of $585 million. Therefore, the volume forecast for 2010 in Europe is now 15
  • 39. million units instead of 13.5 million; this is due to the strong first quarter results. Similar to Europe, Asia currently has a pre-tax operating profit of $23 million unlike the 2009 loss of $97 million (Pope 1). In particular, China alone had an outrageous jump of 84% in its sales from last year (Media.Ford.com). With the promotion of the Ford Edge Hybrid in our target markets of China, Europe and the United States, and with the slow improvement of the global economy, Ford’s projections for 2013 will be profitable, but not dramatic. Based on this analysis, see Appendix F attached for future projections. Implementation and Control Implementation Get the finished product to the market as soon as possible! • Manufacturing plant in China and India will help tremendously. Create a program that makes it easier and affordable for customers to take home a ford vehicle. • Can be determined at the dealer level. Although provide overall guidelines as to what the dealer can and cannot do in terms of contracts. Improve customer service. • Make sure that the unhappy customers feel warm and comfortable about their purchase. Increase support team in all regions of business. • We will offer manufacturer's rebates as a matter of policy; customer service will be executed at the dealer level within corporate guidelines. Tailor specific features to regional markets. • Manufacturing plants in India and China will have slightly different processes for a slightly different car model. • Regional suppliers
  • 40. Look for specific government programs supporting car purchases. • China subsidizes fuel costs on a massive scale. This drives the costs down and makes cars affordable for consumers with less money. • Most European countries have high taxes on petroleum, and have Page 23 strong transportation systems. Find a way to get around this. Press releases and future hype. • Talent and outreach team to increase Word of Mouth about the new and upcoming Ford Edge Hybrid. Tailoring specific marketing campaigns to different regions. • Partnering with local advertising agencies to deliver a relevant message and media vehicle to the target market of that specific region. • Allocate advertisement budget based on the projected regional sales. Use Global pricing. One price around the world adjusted for PPP. • Most viable way to obtain the most customers. This will help us learn the elasticity of the demand in different cultures and target markets, which will ultimately provide us with a better insight on the level of brand equity in each region. Acquire facilitators. • Financial institutions • Insurance companies Car rebates. • Managed at a dealer level but overlooked by Corporate. Warranty services and financing.
  • 41. • Managed at a dealer level but overlooked by Corporate. IMC scheduling, Promotion timing, event planning. • Media scheduling Control Sustain great communication with the intermediaries in the supply chain. • Weekly video conferences from major players in the process. • This will provide feedback at a quicker rate, giving Ford the opportunity to capitalize early and effectively on resolving the problem. Low cost means lower price for customers. • Manager in control of lean production, making sure that costs are as low as possible, if not providing insight to new low cost and efficient equipment. Monitor weekly reports to make sure we are on track to hit our monthly goal of sales and profit. Stay in line with government regulations. Quality control facilities. Crucial testing. • Crash rating • Break testing • Steering testing • Fuel efficiency testing Secure manufacturing plants
  • 42. • Strategically place manufacturing plants in convenient areas of distribution, cost, and regulations. Obtain licenses and permits. • Governmental, environmental, economical, business, manufacturing, engineering. Strict Recruiting & Hiring Process. • Let the applicants know that Ford takes pride in everything they do. Quality workmanship and loyalty is a must. • Provide training at the dealer and corporate level. Staff motivation. • Create a Ford exclusive club which hosts all Ford employees from the dealer and corporate level to attend large parties. • Generous benefits and stocks offered to all Ford employees. Inventory control and organization of firm’s resources. • Acquire and Enterprise Resource Planning system which enables the company to integrate all the functions of the business from accounting to distribution. Costly although the system provides a quicker and more efficient business. This system allows all company information to be revealed in real time. • RFID (Radio Frequency Identification Tags) will be placed on all sizeable unfinished products. Provides a tracking report that allows us to make sure we know where all our materials are at all times. • Ford dealers can access the ERP system creating requests for parts. • Storage warehouses can be strategically placed and used for organizational purposes and convenience. • Collaboration with UPS, or FEDEX. • Provide varying lead times depending on demand for the product in that specific region.
  • 43. Economic Order Quantity Model, Material Requirements planning, scheduling. PERT Diagram. • Project management team, making sure budget is allocated correctly and timing is par. Gantt Chart. • Provides the company with an outlook of their best resources and where they need to expand or improve. Basically a report to help Ford further their innovations and success. Crisis management plan. • Lengthy document that states what the company is going to do in terms of a crisis. • Internal Crisis • External Crisis Summary
  • 44. References Alberts, Hana R. “Will Chinese Consuers Keep Buying Cars.” Forbes 12 Jan. 2010: n. pag. Web. 17 Apr. 2010. <http://www.forbes.com/‌/‌/‌/sales-geely-volvo-business-autos-china.html>. “Audi Sees China Sales Surpassing Germany by 2013.” AutoSpies 28 Oct. 2009: n. pag. Web. 17 Apr. 2010. <http://www.autospies.com//Sees-China-Sales-Surpassing-Germany- by-2013-49218/>. Bradsher, Keith. “China Vies to Be World’s Leader in Electric Cars.” New York Times 2 Apr. 2009: n. pag. Web. 17 Apr. 2010. <http://www.nytimes.com/‌/‌/‌///‌electric.html?_r=1>. Chan, Sewell. “Obama Advisers Predict Unemployment of 8.2% by 2012.” The New York Times 12 Feb. 2010: n. pag. Web. 17 Apr. 2010. <http://www.nytimes.com/‌/‌/‌///‌usecon.html>. “ChinaLuxCultureBiz.” Wordpress. N.p., 21 Oct. 2009. Web. 17 Apr. 2010. <http://chinaluxculturebiz.wordpress.com/‌/‌/‌/market-investors-bullish-on-chinas-middle- class/>. “China on Track to Surpass U.S. in Sales This Year.” Auto Observer. N.p., 13 Oct. 2009. Web. 17 Apr. 2010. <http://www.autoobserver.com/‌/‌/on-track-to-surpass-us-in-sales-this- year.html>. Durbin, Dee-Ann, and Tom Krisher. “Popular cars and lower costs help Ford make first Annual profit in 4 years.” MSN. The Associated Press, 28 Jan. 2010. Web. 17 Apr. 2010. <http:// money.ca.msn.com///news/.aspx?cp-documentid=23347001>. “Gains in Italy, Spain and France Drive Ford Europe Sales Up In February.” Media Ford . Ford , 15 Mar. 2010. Web. 17 Apr. 2010. <http://media.ford.com//.htm>. Guillame, Gilles. “China car Sales top US.” Reuters.com 11 Jan. 2010: 1. Web. 17 Apr. 2010. <Guillaume, Gilles. “China Car Sales top U.S..” Reuters 11/‌/‌. . 24/ ‌/‌http://www.reuters.com//OV20100302.>. “Kia Motors posts 39.5% increase in February Global Sales.” Press Release: Page 24 n. pag. Web. 17 Apr. 2010. <http://www.zawya.com/.cfm//%20Motors %20posts%2039.5%25%20increase%20in%20February%20global %20sales>. Layton, Jeff. “2010 trends: high-tech toys, safety features, enhanced eco-consciousness.” NWAutos. N.p., 17 Jan. 2010. Web. 17 Apr. 2010. <http://blog.nwautos.com/‌/ ‌/‌_trendspotting_high-tech_toys_safety_features_enhanced_eco-consciousness.html>. Madeira, Walt. “Government Incentive Programs Kick-Start Demand.” CSM Worldwide 2009: n. pag. Web. 17 Apr. 2010. <http://www.csmauto.com///‌/‌/+Incentive+Programs>.
  • 45. Martinez, Nate. “Ford to Ship Canadian-Built Edge to China in 2010; Expects Huge Segment Growth.” Motor Trend . N.p., 25 Mar. 2010. Web. 17 Apr. 2010. <http://wot.motortrend.com/‌/news/to-ship-canadian-built-edge-to-china-in-2010-expects- huge-segment-growth/.html>. Schmitt, Bertel. “The China Syndrome: 50 Million Cars A Year?” The Truth About Cars. N.p., 5 Feb. 2010. Web. 17 Apr. 2010. <http://www.thetruthaboutcars.com/china-syndrome-50- million-cars-a-year/>. “European Car Sales, February 2010: Ouch.” The Truth About Cars. N.p., 16 Mar. 2010. Web. 17 Apr. 2010. <http://www.thetruthaboutcars.com/car-sales-february-2010-ouch/>. Stern, Perry. “China and Cars.” Editorial. MSN Autos Jan. 2010: n. page. Web. 17 Apr. 2010. <http://editorial.autos.msn.com/.aspx?cp-documentid=483055>. West, Larry. “The Obama Administration’s CAFE Standards .” About.com. N.p., n.d. Web. 17 Apr. 2010. <http://environment.about.com////sets-new-fuel-efficiency-standards.htm>. Yan, Fang, and Jason Subler. “Ford to outpace China market in 2010; sales strong ‘09.” Reuters 7 Jan. 2010: n. pag. Web. 17 Apr. 2010. <http://www.reuters.com//A1BQ20100111>.
  • 46. Appendices
  • 47. Page i Appendix A TOWS Analysis External Opportunities External Threats -Large potential in emerging markets -Global recession -Consumers seeking more American -Rising manpower costs products -Layoffs due to lower production -Outlook for hybrid and electronic vehicles -Intense competition -Increasing demand for fuel efficient -Reorganized Chrysler and GM -Restructured operations -Tough time pleasing investors -Business abroad -Continuous changes in fuel prices - Eco-friendly and green movement -Government regulations abroad -Variation in currency rates Internal Strengths Strengths/Opportunities (SO) Strengths/Threats (ST) -Wide geographic presence -Take advantage of Ford’s strong brand -Show consumers the benefit of reputation and wide geographic presence Ford’s product compared to other -Brand reputation & loyalty and enter emerging markets competition -Strong quality products -Continue making energy efficient cars -Take advantage of alliances and if such as hybrids hoping to lead in the Ford has to lay off people maybe have -2008, produced 5.532 million automotive industry (in US and abroad) job lined up for some of them with automobiles/ employed Suzuki and Isuzu 213,000 employees -Alliances with Suzuki/ Isuzu Internal Weaknesses Weaknesses/Opportunities (WO) Weaknesses/Threats (WT) -Product recall -Focus on improving Ford constantly -Initiate manufacturing in low cost making fuel efficient cars/hybrids countries -Declining operation margin -Focus on what consumers want in order -No more recalls! -Declining market share in to increase market share and avoid debt sector -Adjust pricing accordingly i - Excess debt - Government regulations -Increasing gross margin.
  • 48. Page ii Appendix B Industry Rankings Rankings Big Seven
  • 49. Page iii Appendix C United States Market Share
  • 50. Page iv Appendix D North America Revenue Europe Revenue Page iv Asia Pacific (India) Revenue
  • 51. Full Year 2009 Revenue Appendix E
  • 52. Past Income Statements (in thousands) Past Balance Sheets (in thousands)
  • 53. Past Cash Flow (in thousands)
  • 54. * All numbers are from Yahoo Finance.
  • 55. Appendix F 2013 Projections 2013 Income Statement Period Ending December 31, 2013 Total Revenue 159,312,000 Cost of Revenue 134,744,000 Gross Profit 24,568,000 Operating Expenses Research and Development Selling General and Administrative 18,370,000 Non Recurring 1,100,000 Others 800,000 Total Operating Expenses 20,270,000 Operating Income 4,298,000 Income from Continuing Operation Total Other Income/Expenses Net 8,386,000 EBIT 12,684,000 Interest Expense 8,788,000 Income Before Tax 3,896,000 Income Tax Expense 76,000 Minority Interest -283,000 Net Income From Continuing Ops 3,689,000 Non Recurring Events Discontinued Operations 7,000 Extraordinary Items Effect of Accounting Change Other Items Net Income 3,696,000 Preferred Stock and Other Adjustments Net Income Applicable to Common Shares 3,696,000 2013 Total Company Revenue Total Company Full Year Revenue 2013 (in millions) North America 68,097 South America 9752 Europe 44339 Asia 10278 Volvo 10,501 Total Ongoing Automotive 142,967 Jaguar Land Rover 0 Total Automotive 142,967 Financial Services 16,345 Total Company 159,312