Market forecast for Ford Mid-Size SUV
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This document provides a market forecast for Ford's 2015 midsize SUV models. It analyzed sales data from 2010-2014 to predict the overall midsize SUV market size in 2015 and Ford's expected market share. Regression models were used to forecast that the 2015 market could range from 10.86 to 12.21 million vehicles. Ford's market share was predicted to increase from 29% in 2014 to 31.55% in 2015. The document recommends Ford increase prices and advertising spending to boost their share compared to competitors like GMC, Honda, and Toyota. Limitations in variables and expense data are also noted.
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Market forecast for Ford Mid-Size SUV
- 1. + 2015 Ford Midsize SUV Market Forecast Abigale Wu / Audrey Huang/ Juilong Wang/ Lina Yang
- 2. + Outline Objective Market Introduction Methodology Findings Recommendations Limitations
- 3. + Objective The objective is to help the marketing managers of Ford forecast the market share of its upgraded 2015 models- Edge, Flex, and Explorer in U.S market in 2015. Two step: Predict the size of mid-sized SUV market in 2015. Predict the share of Ford in the mid-sized SUV market in 2015.
- 5. + 2014 Midsize SUV Market Share FORD 29% GMC 7% HONDA 9% HYUDAI 9% JEEP 15% MAZDA 1% NISSAN 11% TOYOTA 19%
- 6. + Midsize SUV Sale 2010-2014 0 50000 100000 150000 200000 250000 300000 350000 400000 2010 2011 2012 2013 2014 ford GMC honda Hyudai jeep mazda nissan toyota
- 7. + Methodology Data collection 1) Sales figures for each brand 2) Car attributes, price and customer rating 3) Selling expenses for each brand 4) Us population and inflation rate Distribution Chart Monthly car sales figures Regression Model Forecast for 2015 market size 1) Correlation for variables 2) Minimized SSE by Solver Market Share Model 1) Calculate market share for 2010-2013 as calibration 2) Predict market share for 2014 as validation and calculate MAPE 3) Use 2015 predicted market size to calculate market share in 2015
- 8. + Finding – Distribution chart 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014 Monthly Sale Monthly sale
- 9. + Finding – 2015 Market Size Forecast Regression Model: Variables Best Conservative Worst Inflation rate 2.52 2.1 1.68 Population growth rate 0.87% 0.73% 0.58% From the coefficient, inflation and population has positive impact on market size. Best and worst forecast for the variables below: Market Size =−54.47+0.02195ln(Inflation)+11.8624ln(Population)
- 10. + Finding – Market Size Forecast 1194006 1221269 1246536 1086285 1086285 1086285 1000000 1050000 1100000 1150000 1200000 1250000 1300000 Worst Regular Best 2015Market Size 2014Market Size
- 11. + Finding – Marketing Share Forecast Variable Ford GMC Honda Hyudai Jeep Mazda Nissan Toyota bo 0.0000 0.2658 0.0498 0.1027 0.1466 0.0449 0.0290 0.0497 b(ln_price) 0.1327 1.0309 -0.7357 0.0597 -0.6308 -1.0053 -0.4015 -0.6750 b(liter) -6.1431 1.1147 -0.0758 -5.3076 -0.4172 -0.1024 -0.1433 -0.5304 b(seats) 0.1196 1.8296 -0.3310 -2.9378 0.0752 -0.2597 -0.3464 -0.0379 b(ln_weight) -0.1337 1.3674 -0.3506 -0.1350 -0.7138 -0.3179 -0.9856 -0.1221 b(customer) -0.1666 -6.1946 0.0462 2.0247 -0.3007 -0.3393 -0.3810 -0.6372 b(ln_selling) 0.6203 -0.8303 -0.4246 0.0074 -0.0856 -0.0856 0.1092 -0.1398 Coefficient table for market share model: GMC got most positive impact from variables - Price, Liter, Seats, Weight
- 12. + Finding – Brand Sales Forecast 0 100000 200000 300000 400000 500000 600000 700000 Ford GMC Honda Hyudai Jeep Mazda Nissan Toyota worst regular best
- 13. + Finding – Market Share Changes 2015 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% Ford GMC Honda Hyudai Jeep Mazda Nissan Toyota 2014 2015
- 14. + Findings – Market Share 31.55% 19.51% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% Ford 2014 2015 12%
- 15. + Recommendations Higher the price of its mid-sized SUV and increase its selling expense (advertisement) to increase its market share. Rolling out model with 7 seats may be a more profitable option for Ford. Rolling out new models with smaller engine size and lighter curb weight may help Ford to increase its market share.
- 16. + Model limitation With overfull variables for car’s attribute, we have difficulty to put all of them into our regression model and market share model. Due to the financial reports from companies are annual and global based, we could not obtain the monthly and national data for the Marketing and Advertising expenses.
- 17. + Thank you!
Editor's Notes
- Hi, welcome to the 2015 Market forecast for ford midsize SUV presentation I’m Audrey, we also have Abigale, Juilong and Lina in our team
- The outline for today’s presentation will be
- Frist, let me start with our objective We want to help the marketing managers of ford to forecse the market share of its updated 2015 models in US market We will first predict the size of mid-sized SUV in 2015 And then we will predict the market share of Ford in 2015 Before we enter into our methodology, let me introduce the overall midsize SUV market for you
- In the midsize SUV market, ford has 7 competitors There are
- The market share in 2014 for this 8 brands shows in the pie chart As you can see, ford got 29% of market share last year And Toyota is in the second place which took 19% of market
- This slide shows yearly sale for the midsize SUV You can notice that Ford got little decrease from 2013 to 2014 after understanding the overall market for midsize SUV, we can start our methodology
- In our first finding is from distribution chart. In this chart shows monthly midsize SUV slaes in 2014 As you can see,the trend is stable and mature So we decided to use regression model for our project And we will first calculate category size and then run the market share model
- For the market size forecast model the equation shows that inflation and population have positive impact on the market size So We decided to use these two variables to express our best and worst practice You can see in the table below
- The result shows that our forecast market size for 2015 is around 1,221,269 cars that will be sold in this market And the best and worst market size also showed in this chart
- From the market share model, the coefficient we got showed below GMC got most positive impact from all the variables For ford, price, number of seats, and selling expenses have poistive impact but engine type , curb weight and customer rating got negative impact to the brand
- As I mentioned from our coefficient table, GMC got most positive impact from variables So GMC got the highest sales number in our 2015 forecasting
- In the forecast market share, GMC also got the huge increase in the market share compare to 2014
- For ford, it got 12% decrease from 2014 to 2015 In the 2015, ford will take only 19.51% from midsize SUV market.
- In order to let ford return to the first place Here are our recommedations 1. In general, Ford can higher the price of its mid-sized SUV and increase its selling expense (advertisement) to increase its market share. 2. For model design, since the engine size and curb weight both have negative impact on market share, rolling out new models with smaller engine size and lighter curb weight may help Ford to increase its market share. 3. Ford have rolled out mid-sized SUV with 5-7 seats. Since the number of seats also has positive impact on market share for Ford, rolling out model with 7 seats may be a more profitable option for Ford.
- 1. With overfull variables for car’s attribute, we have difficulty to put all of them into our regression model and market share model. Hence, we select variables that customers will care most when they are purchasing the car, but the risk will happen if they also consider other attributes in about the car. 2. Due to the financial reports from companies are annual and global based, we could not obtain the monthly and national data for the Marketing and Advertising expenses. In the model, we could only put annual and global expense in selling, operating and administration expenses.
- Thank you for your lisitning, wish you still have a good mood to vote for our presentation! Have a nice day!