Price of the car Customer Income Tastes and preferences Competitors Expectations Advertising
First B-segment compact car Designed keeping in mind the aspirations and needs of the young and ambitious Indian professional. For the middle-income group people.
On Road price is Rs. 4,30,000. Received more than 10,000 orders in less than one month Announced 1% hikeConclusion:This price rise is not a major one in magnitude but may impact sales of the Figo to a small percentage; hence the demand would not decrease with same factor as the increase in price.
The percentage change in quantity demanded caused by a 1 percent change in income. Preferred by service group and middle income group.Conclusion:The income and purchasing power of people is increasing, hence, demand will increase.
Competitors (substitutes) of Ford Figo:- Maruti Ritz :- Price: Rs. 4,71,000 Chevrolet Beat:- Price: Rs. 4,55,000 Volkswagen Polo:- Price: Rs. 5,28,000 Nissan Micra :- Price: Rs. 5,59,000Conclusion: An increase of price of any of the substitutes will increase the demand for Figo. The price rise of Figo by 1% is not a major one in magnitude but may impact sales of the Figo to a small percentage, but since the Ford Figo is not the only car with the increased prices, its not a major disadvantage as well
1. Income Effect Cost Price – Rs 3.7L to 5.6L GDP Growth - 7.5% 12th 5-year plan estimated growth rate – 9% Segmentation Upper Middle Class Lower High Class
2. Technology Increasing fuel prices Alternative fuels Hydrogen fuel cells Electric power Solar power Not-so significant effect on Ford Figo as the emergence of such technologies will only have an immediate impact on low cost segments where Tata Nano and Maruti Alto operates
3. Government Policies Tax on knocked-down products Ford Figo will not have any impact as it has its full fledged production facility operating out of India base Such a policy will affect only ultra premium sedan segment FDI FDI at automobile sector – 100% Impossible for any further increase Increased bureaucratic delays, corruption and lack of significant reform
4. Interest Rates Consecutive hikes in interest rates Interest rates on auto loans go up Figo has two options : Pass on the effect to the end consumers Bear the brunt by itself which will help to have a lead though the margins would slightly fall but only for a shorter period of time
Figo– a relatively new product Quantitative analysis not so apt Stress on qualitative analysis– expert opinion & market analysis Competitor plans– an indicator of broad future trends
Assumption– past trend will hold good for future as well Need strong database Equation of sales is arrived at by minimizing the sum squared deviations The projections for Ford Figo’s sales for the next two years exhibited in the attached excel.
Tie up with banks for easy procurement of loans Competitive market price Service network Complementary services and goodies Diesel variants Faster delivery to customers