Ford Windstar


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Ford Windstar

  2. 2. SUMMARY <ul><li>Minivan history and development </li></ul><ul><li>Minivans  designed for families, for people with two or more children and who were tired of cramming into sedans for long and short-hour trips. </li></ul><ul><li>Minivan is divided into 2 categories: LWB and SWB . </li></ul><ul><li>It was first introduced by Dodge Caravan on 1983 and then followed by General Motors and Ford. </li></ul>
  3. 3. SUMMARY <ul><li>Ford Windstar </li></ul><ul><li>Ford Windstar was introduced in Canada in 1991. </li></ul><ul><li>Windstar was the first to be given 5 stars rating by NHTSA </li></ul><ul><li>Windstar is way back behind when it comes to introducing product innovations. </li></ul><ul><li> sliding fourth door </li></ul><ul><li> flip-fold seat </li></ul><ul><li>Quality problems and product recall. </li></ul><ul><li>Limited choice </li></ul>
  4. 4. Ford Windstar
  5. 5. Rivals Pontiac Montana Honda Odyssey Chevrolet Venture Grand Caravan Toyota Previa
  6. 6. SUMMARY <ul><li>Below Table 1 show % of market share in LWB </li></ul><ul><li>segment in 1999 and 2001 </li></ul>11% 3.3% Honda 27.4% 19% Grand Cadavan 14% 9% Pontiac Montana 30% 44% Windstar 2001 1999
  7. 7. <ul><li>Highlight of the case </li></ul>
  8. 8. Question 1: Assess the various promotional tactics available to Brian. Which one(s) make financial sense. Why? Ford Windstar
  9. 9. <ul><li>Brian Tafler had considered the followings:- </li></ul><ul><li>Direct Mail Campaign </li></ul><ul><li>Repositioning Through Advertising </li></ul><ul><li>Value Pricing </li></ul><ul><li>Sales Incentives </li></ul><ul><li>Leasing </li></ul><ul><li>Cash Offers </li></ul>
  10. 10. Direct Mail Campaign <ul><li>Lease Renewal Customers </li></ul><ul><li>Targeted to about 5000 customers </li></ul><ul><li>Highlighted the new features i.e Safety System and Family Entertainment System </li></ul><ul><li>Current Lease renewal Rate : 40% </li></ul><ul><li>Expected : 45 to 50% returning lease customers </li></ul><ul><li>Offered: $500 loyalty discount </li></ul>
  11. 11. Direct Mail Campaign (cont..) <ul><li>Potential New Customer </li></ul><ul><li>Focus – the customer who leased a minivan from other manufacturer </li></ul><ul><li>Offered - $500 switching incentive </li></ul><ul><li>Expected – 2 to 3% customer switched to Ford </li></ul>
  12. 12. Repositioning Through Advertisement <ul><li>Tier 1 </li></ul><ul><li>Manufacturer paid and control the advertising </li></ul><ul><li>Focused- Building brand image </li></ul><ul><li>Impact- can be seen after few years </li></ul><ul><li>Tier 2 </li></ul><ul><li>The dealer and manufacturer associates for the advertising </li></ul><ul><li>Focused- promoting particular brands within region and for short time. </li></ul><ul><li>Tier 3 </li></ul><ul><li>The dealer paid for the advertising </li></ul><ul><li>Focused- To attract customers with price, </li></ul><ul><li>promotion and incentives </li></ul>
  13. 13. Repositioning Through Advertisement (cont) <ul><li>Shortcoming of Tier1, 2 and 3 </li></ul><ul><li>Manufacturer focused on building brands, dealers interested in immediate sales </li></ul><ul><li>Cost of advertising/promotion of minivan increased i.e 10% since 1998 </li></ul><ul><li>Advertisement spending in Tier 1 and 2. </li></ul><ul><li>Tier 2- Price of LX model to fight the SWB market </li></ul><ul><li>Brian need to target customers by price oriented strategy or by image advertising . </li></ul>
  14. 14. Value Pricing <ul><li>Tier 1 Advertising </li></ul><ul><li>Bundled attractive features </li></ul><ul><li>No charge for Family Entertainment Systems worth $1500 in its Sport, SEL and Limited </li></ul><ul><li>Rivals- offered the features for top-of-line models </li></ul><ul><li>Improve the selling of vehicle mixed. </li></ul>
  15. 15. Sales Incentives <ul><li>To trigger sales </li></ul><ul><li>Benefits the buyer of subvented lease or financing rates, cash-backs and other discounts. </li></ul><ul><li>Incentives offered by domestic manufacturers were higher than imports. </li></ul>
  16. 16. Leasing <ul><li>In 2002- 55% sales of Windstar in Canada were lease. </li></ul><ul><li>Ford offered 24 to 36 months rates </li></ul><ul><li>Windstar offered 48 to 60 months rates </li></ul><ul><li>Rivals-GM & Chrysler offered 24, 36 and 48 months rate. Imports – none. </li></ul><ul><li>General Motor Acceptance and Ford Credit provides attractive lease and financing options </li></ul><ul><li>Interest rate charged to customers – 0 to 2% </li></ul>
  17. 17. Leasing (cont) <ul><li>Longer lease- lower monthly outlay </li></ul><ul><li>Shortcoming- customers will not be back almost 12 to 24 months. </li></ul><ul><li>Customer satisfaction was lower after 3 or 4 years </li></ul><ul><li>Benefits – sales mix would be larger proportion to lease. </li></ul>
  18. 18. Cash Offers <ul><li>Cash discount offered to buyer and salesperson </li></ul><ul><li>Cash $2000 on Windstar purchased </li></ul><ul><li>Red Carpet Lease Cash- $500 cash on Windstar lease </li></ul><ul><li>Renewal Offer - $1000 cash on returning lease </li></ul><ul><li>Christmas Bonus- $500 cash to purchase and lease in December </li></ul><ul><li>Sales person incentive-$100 for every vehicle sold in 30 days </li></ul><ul><li>Period Golf Vacation- for top salesperson in each region </li></ul><ul><li>Produced- 2% of volume in next 3 months </li></ul>
  19. 19. Financial Sense <ul><li>Brian should considered : </li></ul><ul><li>Repositioning Trough Advertisement by using structure Tier 2. </li></ul><ul><li>Value pricing </li></ul><ul><li>Leasing </li></ul><ul><li>Cash Offers </li></ul>
  20. 20. Repositioning Trough Advertisement by using structure Tier 2 <ul><li>Associated manufacturer and dealers, cost will be shared by them </li></ul><ul><li>Promoting Windstar and price promotion </li></ul><ul><li>Attacking region by region and also globally. </li></ul>
  21. 21. Value Pricing <ul><li>Create excitement by creating the value package </li></ul><ul><li>Also can be swap in Tier 2 advertising instead of Tier 1. </li></ul><ul><li>Improve sales mix </li></ul>
  22. 22. Leasing <ul><li>55 % Windstar in Canada were leases </li></ul><ul><li>Offered longer lease rate . Up to 60 months </li></ul><ul><li>Will lower customer monthly outlay </li></ul><ul><li>Lower interest rate- 2% </li></ul><ul><li>Sales mix will be larger in proportion </li></ul>
  23. 23. Cash Offers <ul><li>Cash discount to buyer/salesperson </li></ul><ul><li>Increased in volume in next 3 months </li></ul><ul><li>70% of non-leased vehicles were financed. </li></ul><ul><li>Each $1000- will produce additional 2% in volume. </li></ul>
  24. 24. Ford Windstar Question 2: Assess the alternatives in terms of their attractiveness to target consumers and the effect on the Ford Windstar brand?
  25. 25. Windstar and Safety <ul><li>SAFETY </li></ul><ul><ul><li>Important element of the Windstar </li></ul></ul><ul><ul><ul><li>5-star rating by NHTSA </li></ul></ul></ul><ul><ul><ul><li>Led the industry </li></ul></ul></ul><ul><ul><ul><li>Personal Safety System (PSS) </li></ul></ul></ul><ul><ul><li>Important consideration for families </li></ul></ul>
  26. 26. Purchase Consideration 14 Important Attributes * *change over time
  27. 27. Top 3 Reasons For Purchase     32%   30%     30% MPV 44%       28% 33%     Sienna 50%     21%   39%     Odyssey 28% 28% 27% Caravan 28%   29%       22%   Montana 30%   42%         23% Venture 28% 25% 34%           Windstar Reliability Value for Money Price / Deal Overall Quality Safety OEM's Reputation Fuel Economy Seating Capacity  
  28. 28. Performance of Windstar Not Translated into Higher Market Share <ul><li>Value for money </li></ul><ul><ul><li>Windstar – 40% </li></ul></ul><ul><ul><li>Leader’s score – 50% </li></ul></ul><ul><li>Windstar performance is far behind the market leader in term of the price & value for money </li></ul>
  29. 29. Performance of Windstar Not Translated into Higher Market Share <ul><li>Value for money </li></ul><ul><li>Innovative Ideas </li></ul><ul><li>Easy to convert for people or cargo </li></ul><ul><li>Have luxurious interior finish </li></ul><ul><li>Proud to own </li></ul><ul><li>Meets the needs of you & your family </li></ul><ul><li>Provide peace of mind </li></ul><ul><li>Dependable </li></ul><ul><li>Superior ride </li></ul><ul><li>Safety </li></ul><ul><li>Power to keep you out of harm’s way </li></ul><ul><li>Versatile </li></ul><ul><li>Distinctive styling </li></ul><ul><li>Drive like a car </li></ul>Lacking: Leading:
  30. 30. Buying Process <ul><li>Consideration Phase </li></ul><ul><ul><li>Image and brand perception </li></ul></ul><ul><li>Active Shopping Phase </li></ul><ul><ul><li>Image and Features </li></ul></ul><ul><li>Buying Phase </li></ul><ul><ul><li>Features and Price </li></ul></ul>
  31. 31. Consumer Behavior <ul><li>Definition: </li></ul><ul><ul><li>The study on how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experience to satisfy their needs and wants. </li></ul></ul>
  32. 32. Consumer Behavior What Influences Consumer Behavior? <ul><li>Cultural factors </li></ul><ul><li>Social factors </li></ul><ul><ul><li>Reference groups </li></ul></ul><ul><ul><li>Family </li></ul></ul><ul><ul><li>Roles and statuses </li></ul></ul><ul><li>Personal Factors </li></ul><ul><ul><li>Age </li></ul></ul><ul><ul><li>Occupation </li></ul></ul><ul><ul><li>Personality </li></ul></ul><ul><ul><li>Lifestyle </li></ul></ul>
  33. 33. Analyzing Consumer Markets The Aim of Marketing <ul><li>Meet and satisfy target customer’s needs and wants </li></ul><ul><li>Understand important attributes in making purchase decision </li></ul>
  34. 34. Minivan Buyers 19% 12% > 65 40% 47% 35 - 49 2001 1998 Age Group
  35. 35. Reasons of Purchase Price / Deal / Value 43% 40% > 65 57% 55% < 35 2001 1998 Age Group
  36. 36. Target Market vs Population Decline in The Minivan Sales Population: 35-49 age group >> 65+
  37. 37. Question 3: Develop a promotional plan for the Windstar to carry the brand to the introduction in the fall of 2003 Ford Windstar
  38. 38. Brand <ul><li>Brand is name , sign , and symbol design to identify goods services of seller and differentiate from competitors. </li></ul><ul><li>A brand is the marketers promise to deliver predictable product/service performance </li></ul><ul><li>To create brand value  convince the customer of meaningful differences among brands (related to attributes of product). </li></ul>
  39. 39. Brand Asset Valuator (BAV) <ul><li>Provides comparative measures of the brand equity of thousands of brands across hundreds of different categories. </li></ul><ul><li>Based (BAV), there are 4 components of brand equity </li></ul><ul><ul><li>Differentiation –the degree to which a brand is seen as different from others. </li></ul></ul>
  40. 40. Brand Asset Evaluator (BAV) <ul><ul><li>Relevance -the breadth of a brand’s appeal. </li></ul></ul><ul><ul><li>Esteem –how well the brand is regarded and respected. </li></ul></ul><ul><ul><li>Knowledge –how familiar and intimate consumers are with the brand </li></ul></ul>
  41. 41. <ul><li>Differentiation + Relevance = Brand Strength </li></ul><ul><li>(Point to brand’s future value, rather than reflecting its past) </li></ul><ul><li>Esteem + Knowledge = Brand Stature </li></ul><ul><li>(More to a ‘report card’ on past performance) </li></ul>Brand Asset Valuator (BAV)
  42. 42. High percentage of minivans buyers are aware with this brand since it is an old player in the industry. HIGH Knowledge Windstar is respected as it is a major player in minivan industry however, recently, it is regarded as a low quality minivan. LOW Esteem Windstar is popular with safety features but safety is not the most important feature that customers seek for. LOW Relevance There are many newcomers entering into the competition offering customers various options. LOW Differentiation Windstar’s performance Components
  43. 43. High Low Low Low Declining Brands High High High High Leadership Low Low Low High Strong New Brands Low Low Low Low New Brands Knowledge Esteem Relevance Differentiation
  44. 44. Brand Revitalization <ul><li>Changes in consumer tastes and preferences, the emergence of new competitors could affect the fortune of a brand. </li></ul><ul><li>In Ford Windstar case  have fallen on hard times because of emergence of various competitors. </li></ul><ul><li>What Ford can do  whether to retain the same positioning or to create a new positioning. </li></ul><ul><li>Ford Windstar has to really understand what its sources of brand equity were </li></ul>
  45. 45. What Windstar can do? <ul><li>i) Expand depth, breadth of brand awareness by improving brand recall and recognition in purchase or consumption. </li></ul><ul><li>ii) Improve strength, favourability and uniqueness of brand associations </li></ul>
  46. 46. <ul><li>Brand elements  the devices that identify and differentiate brand. </li></ul><ul><li>Safety- one of the safest minivans </li></ul><ul><li>Value- good value for money </li></ul><ul><li>Brand Promise  the marketer’s vision of what the brand must be and do for consumers. </li></ul><ul><li>Alert today: Alive tomorrow . </li></ul>
  47. 47. Promotional Plan <ul><li>Objectives: </li></ul><ul><ul><li>Reverse a decline and put Windstar on the path to regain market share and restoring its brand image. </li></ul></ul><ul><ul><li>ii) To carry Ford Windstar’s brand image as the safest minivan with good values </li></ul></ul><ul><li>promotional plan divisions: </li></ul><ul><ul><li>public relations </li></ul></ul><ul><ul><li>advertising </li></ul></ul><ul><ul><li>direct marketing </li></ul></ul><ul><ul><li>Promotion & optional feature pricing </li></ul></ul>
  48. 48. Public Relation <ul><li>Public relations are very believable and seem more real to readers than ads do . </li></ul><ul><li>The activities : </li></ul><ul><ul><li>Media relation campaign on safety </li></ul></ul><ul><ul><li>Auto show with concentrations on Alert today. Alive tomorrow </li></ul></ul>
  49. 49. Public Relation (contd) <ul><ul><li>Publication, such as newsletters, trade journals and books about safety </li></ul></ul><ul><ul><li>Public speaking and conference </li></ul></ul><ul><ul><li>Sponsorship for special event/ sponsor to produce road safety advertisement. </li></ul></ul><ul><ul><li>Organize fairs (eg: safety first fair) </li></ul></ul>
  50. 50. Advertising <ul><li>Advertising can reach masses of geographically dispersed buyers at a low cost per exposure </li></ul><ul><li>Advertising is also very expressive as it allows the company to dramatize its products </li></ul>
  51. 51. Advertising (contd) <ul><li>Tier 1 advertising which the manufacture paid for and controlled all the advertising. </li></ul><ul><li>The advertising was focused on building brand image. </li></ul><ul><li>The advertisements will be divided into various types: </li></ul><ul><ul><li>Broadcast on radio and TV </li></ul></ul><ul><ul><li>Outdoor advertising- billboards </li></ul></ul><ul><ul><li>Print in magazines and newspaper. </li></ul></ul>
  52. 52. Direct Marketing <ul><li>A message that is normally directed to a specific person </li></ul><ul><li>Direct mail to specific customers: </li></ul><ul><ul><li>lease renewal customers </li></ul></ul><ul><ul><li>potential new customers </li></ul></ul><ul><ul><li>customers who have road accident’s experience  This is to approach road accident victims which we </li></ul></ul><ul><ul><li>assume to be more safety conscious . </li></ul></ul><ul><li>Send to potential customers: </li></ul><ul><ul><li>Flyers </li></ul></ul>Newsletter <ul><ul><li>Posters </li></ul></ul>Brochure
  53. 53. Value For Money <ul><li>Safety  Insufficient </li></ul><ul><li>Improve ‘value for money’ attribute </li></ul><ul><li>Customer value product by  </li></ul><ul><ul><li>Features </li></ul></ul><ul><ul><li>Quality </li></ul></ul><ul><ul><li>Price </li></ul></ul>
  54. 54. Ford Windstar must… <ul><li>Enhance the manufacturing process </li></ul><ul><li>Add new features for the new model </li></ul><ul><li>i) Offering various models of Windstar </li></ul><ul><li> Eg: LWB, SWB, limited edition, sports edition and etc. </li></ul><ul><li>ii) Offering new features </li></ul><ul><ul><li>flip-fold back seat </li></ul></ul><ul><ul><li>back-seat video entertainment system </li></ul></ul><ul><ul><li>seatback grocery hooks added to rear bench </li></ul></ul>
  55. 55. Ford Windstar must…(contd) <ul><li>2. Add new features for the new model (contd) </li></ul><ul><li>iii) Offering new safety features </li></ul><ul><ul><li>low tyre pressure warning </li></ul></ul><ul><ul><li>censors deployed the dashboard airbags according to crash severity and the front occupants </li></ul></ul><ul><ul><li>A strobe light in the driver’s outside mirror to warn approaching traffic that the left-slide sliding door was open </li></ul></ul><ul><ul><li>A rear- brake and reduced engine power to enhance control in turns </li></ul></ul>
  56. 56. Ford Windstar must…(contd) <ul><li>3. Adopt optional feature pricing </li></ul><ul><li>- offer optional products, features and services along with main product </li></ul><ul><li>i) Second-row bucket seats with a rear-seat video entertainment system </li></ul><ul><li>ii) Removable back-seat video entertainment system </li></ul><ul><li>iii) Extended warranty </li></ul><ul><li>iv) Electric window control </li></ul><ul><li>v) Light dimmers </li></ul><ul><li>vi) Antiskid system (safety feature) </li></ul>
  57. 57. Conclusion <ul><li>Ford Windstar should take more aggressive actions in order to regain its market share and improve their brand image. </li></ul><ul><li>Ford should educate their customers on the importance of safety in a way to increase their favorability towards safety attribute </li></ul><ul><li>Ford also should improve their quality problems and innovative features in order to compete with the emergence of wild competitors. </li></ul>