Different Target Marketing Strategies - Ford Edge - Essay Example

? Analyse a company and introduce a new product Table of Contents Executive Summary 4 Introduction 4 Mission ment 5 Financial ment 5 Marketing Research 9 Marketing Mix 10 Example 12 Summary 13 PESTLE Analysis 13 Summary 14 SWOT Analysis 15 New Product 18 Business Objective 19 Business Strategy Boston 21 Consumer Behaviour 21 Initiator 22 Influencer 22 Buyer 22 User 22 Example 22 Market Segmentation 22 Targeting 23 Different Target Marketing Strategies 23 Positioning 24 Recommendations 25 References 26 Appendix 28 Executive Summary Ford Edge Hybrid is a Gasoline Electric Hybrid model. The company is looking to launch the product in United States, China and Europe. The company should adopt price skimming strategy for US, China, Europe. Business environment includes both internal and external forces that directly or indirectly influence the modus operand of the organization. The external environmental factors or the macro factors include uncontrollable factors such as the Political, Economic, Social, Technological, Legal and Environmental factors (Porter, 2008, p.221). Ford should pay close attention to these factors while formulating business in domestic as well as foreign countries. The company is likely to adopt focused target marketing strategy by targeting the 21-50 age group people having middle to income living in the urban cities. Introduction A marketing plan is a significant part of an overall business plan. A well structured marketing strategy is the base of a well-written marketing plan (Westwood, 2002, p.3). A marketing plan includes a list of several actions. Without a sound strategic establishment marketing plan is ineffective. A good marketing plan is important in business as it helps to control the overall business and helps the business to steer towards profit. The purpose of a marketing plan is to set the direction for a business in order to promote it. Moreover, a well-written marketing plan helps to build a customer base and determine opportunities in order to make profit (Csb, 2011, p.63). Ford Motor Company is an American multinational automaker headquartered in Dearborn. The organization was founded in the year 1903. The organization used to sell commercial vehicles and automobiles under the brand name of Ford and luxury cars under the brand name Lincoln. Employee strength of this organization is more than 164,000. The aim and objective of Ford motor company is to sell automobiles and make the customers satisfied. Moreover, they tend to make profit for all the stakeholders. Therefore, they can provide jobs for thousands of workers. Qualified and standard young and middle aged people are the significant eligible customers of Ford motor company. It is world’s third largest automobile company operating in US, Europe and the countries of Asia Pacific. Mission Statement Mission statement of a company contains the aims and value of an organization. The mission statement of Ford Motor Company is that the organization is a global and diverse family with a pompous heritage. The organization has passionately committed to offering outstanding goods and services (Ford, 2013, p.1). Financial Statement A financial statement is a recognized record of financial activities of a business. For an organization or business enterprise, all the appropriate financial information is used to present in a structured formulation in order to make people easily understand are called as financial statement (Palepu, 2007, p.6). A financial statement offers different kind of financial information to the investors and creditors. It helps them to evaluate the financial stability and performance of an organization. Ford Motor Company has reported a pre-tax profit of 1.7 billion US dollar in 2012. In 2012 the sales of Ford Motor Company went up by 7% comparing to the year 2011. Total 1.14 million vehicles have been sold. The US sales number in 2012 was 2,250,165 (Finance, 2013, p.1). The Financial Statement for Ford Motor Company in the year 2012 has been highlighted below. Income Statement (Finance, 2013, p.1). Balance Sheet (Finance, 2013, p.1). Cash Flow (Finance, 2013, p.1). Marketing Research A marketing research is the function that connects the customers to the marketers through the information used to identify the market opportunities and problems. Generally, the marketing research is a systematic devise and reporting of data verdict to a precise situation facing by any organization (Kotler, 2009, p.57). It plans future marketing activity, controls marketing operation and evaluates the marketing results. Ford motor company used to satisfy their customers through seer quality of vehicles and cars with effective customer service. The automobile market is very much competitive. Therefore, Ford is trying to introduce a new eco-friendly vehicle. An organization used to collect information and data in primary research for the specific purpose of survey research, while the secondary research helps to collect data and information that has been already existed in somewhere having been gathered or collected for another research (Kolb, 2008, p.71). Marketing Mix Marketing mix can be defined as a set of elements that the company manage or control to the fullest possible advantage for the marketing purpose. Neil Borden termed these elements as the marketing mix (Kotler, 2009, p.44). During the early 1960’s Mr. Borden suggested 12 key elements that companies should take under consideration while formulating the marketing plan. Later E. Jerome McCarthy outlined the marketing mix to the 4 P’s of marketing mix. Element Definition Importance Case Specific Application Product Product can be defined as anything that satisfies the demand of the customers. It covers both goods and services. It is the most integral part of the whole exchange process. Without product there would be very little scope for the whole marketing process. Ford Edge Hybrid; Gasoline Electric Hybrid model. Price Pricing can be defined as something that a customer has to give up in order to acquire a product or service. To sell a product a company must fix a price. Pricing strategy can provide the company important competitive leverage. Mainly using price skimming strategy for US, China, Europe. Place It is the process by which the company sets up the distribution channel. Company must select the distribution channel to reach the target market. segment. Mainly through local car dealerships as well as online medium to reach. the customers directly. Promotion Promotion is the way to convey the product attributes to the consumers. Different elements of the promotional mix are Advertisement, Sales Promotion, Public Relation, Personal Selling, Direct Marketing. Promotion is used by companies to generate awareness and demand. Use of Advertisements in various mediums including TV, radio, print as well as digital medium. Use of sales promotions to motivate the buyers. The company should also use trade promotions to motivate the local dealers as part of the push strategy. Example Product: Ford Edge Hybrid Price: Price skimming strategy targeted towards people belonging to the middle to high income group in US, China, Europe. Place: Place stands for the distribution network of the company such as the dealers, retailers, wholesalers, etc. In this case the company may decide to sell products by the help of local dealers. Promotion: The elements of promotional mix include advertisement, sales promotion, personal selling, Public relations and direct marketing. In case the company can use ads in different mediums such TV, print, radio, online, sales promotion can be used to increase sales in a short period of time. The company may use sales promotion by providing extra products along with the actual product or may decide to reduce the price of the car during special events and occasions (McDaniel, 1998, p.5). Company can also use loyalty schemes to build up long-term relations with the public. The company also may use internet to reach the customers directly as a part of the direct marketing strategy. Sales person of the company can also reach the customers or motivate the customers coming to the showrooms to buy the cars through personal selling (Goudge, 2006, p.148). Summary Marketing mix is a set of elements that the company can use to achieve the marketing objectives. It includes product, price, place and promotion. For Ford Edge Hybrid the company should adopt price skimming strategy; advertisement and sales promotion should be used to generate awareness, demand and increase sales. Local dealership along with the digital medium can be used to setup a convenient and cost effective distribution channel. PESTLE Analysis Business environment includes both internal and external forces that directly or indirectly influence the modus operand of the organization. The external environmental factors or the macro factors include uncontrollable factors that influence the decision making of an organization. Organization cannot control these factors, hence, a business unit can adapt to such factors. These factors include Political, Economic, Social, Technological, Legal and Environmental ones. Element Case Specific Application Political The European and US governments have always been opened to investments related to industry. China is also looking to shed the traditional protective and secretive nature and have started to welcome investments from foreign companies for investment. Economic Great Market opportunity in China as its economy has emerged as one of the growing. On the other hand the Europe and US have been hit by the economic slowdown. Social Both Europe and US citizens have fascination for cars. Although China is going through a paradigm of shift, it is believed that still the social issues in China are believed to be quite critical. Therefore Ford should respect the social values of the Chinese people and act accordingly. Technological Advancement in the digital and wireless technology, communication and processing technology provides great opportunity to Ford both in case of production and marketing. Legal US, European and Chinese governments have taken the importance of safety regulation, consumer protection and ecofriendly technologies into account. Environmental Governments as well as consumers welcome companies providing greener products. This provides a great opportunity for Ford as it is a hybrid model between the gasoline and electric and focused upon low carbon emission. Summary Europe, United Sates and also the Chinese governments are welcoming investments to setup industry. The US and Europe have been hit badly by the economic downturn but China has emerged as one of the most emerging economies. People and the governments of US and Europe are a lot more open-minded than that of the people in China. Hence, the social and cultural values of China must be respected. Technological advancement provides a lot of business opportunities to the company. All the three governments have taken safety and environmental regulations in to account. SWOT Analysis SWOT analysis is a typical strategic planning mode that used to evaluate internal strength, weakness and external opportunities and threats involved in a business venture or project (Kotler, 2009, p.163). Here the SWOT analysis has been implemented in terms of Ford motor company. Strengths Strong brand name and high brand image. High brand reputation and wide geographic presence. High portfolio of quality products. Strong community relation and adequate corporate and social responsibility. Healthy employee-management relationship. Maintains a high level relationship with its investors. Weaknesses Declining operation margin and market share within the industry. Inadequate product recall. Huge debt. 30% pay cut off for the junior employees has reduced the motivation level of the subordinates. Shareholders are not getting expected return due to increasing expenditure. Effect of global recessions is worrying the investors have to invest in the company. Opportunities Outlook for electronic and hybrid vehicle. Growing global market and restructured operations. Increasing global demand for fuel efficient cars in order to overcome the problems like rapid price hike of fuel. Large potential in the promising market place. Consumers are tending to buy more American vehicles. Threats Rising labour cost. Global economic slowdown is preventing the buyers to buy a car. High competition within the industry. Increasing fuel price globally. Lower production level creating concerns among the employees about the job security. The competitors of Ford Edge Hybrid are Toyota FJ Cruiser, Toyota Venza LE and Kia Sorento EX. These are mid-size crossover SUV. In the year 2012, total 13,656 Toyota FJ cruisers have been sold in US and total sales of Toyota Venza in US was 43,906. SWOT Analysis of Toyota Strengths Adequate work and organizational culture. In terms of production and sales, Toyota is the industry leader. Leading brand in green car development. Strong brand portfolio and high brand reputation. Weaknesses Huge recall. In adequate presence in growing and emerging market. Opportunities High fuel price and positive attitude towards green strategy and vehicles. Changing customer’s needs and demands. Achieving growth through acquisitions. Threats High fuel price and changed emission standards. Increasing raw material prices. High competition and natural disaster. SWOT Analysis of Kia Sorento EX Strengths High brand image and online marketing capability. Distribution and operation efficiency. Paradigm factories with high technology. Strong relationship with high profile car accessories organizations. Weaknesses Limited developed service station. Low productivity. Opportunities Environmentally fuel resources. Introduction of newly developed warehouses for the hybrid cars. Threats High raw material price. Limited capital spending and rapid growth of potential competitors. Summary There are several potential competitors of Ford Motor Company, such as Toyota, Kia, Honda, Hyundai and many more. There are several inner strengths and weakness of Ford, but threats like increasing oil price and competition in global market are the biggest concern for Ford Motor Company (Henry, 2008, p.91). New Product Ford is going to introduce new Ford Edge. It is a small framed, rugged SUV with a sophisticated safety system maintaining the sporty and sleek look. This car is a hybrid version of gasoline and electric. The organization has introduced this car in order to sustain against environmental threats and overcome challenges like increasing petrol and diesel price. The competitors of this car are Toyota FJ Cruiser, Toyota Venza LE and Kia Sorento EX. The organization should market its new product through online and print media promotion, rally and promotional campaigning. Summary Ford Edge is a small framed, rugged SUV with a sophisticated safety system maintaining the sporty and sleek look, which is a hybrid version of Gasoline and electric. The organization has to face huge competition from the competitors like Toyota and Kia. Business Objective Since last 5 years the organization has achieved a negative growth due to huge competition within the market. AIM Ford Motor Company’s marketing target is to capitalize on the efficiency and safety and offer the global market place with interest and awareness of their newly developed hybrid car in order to influence trial as well as action. Objective Through the newly developed product they are expecting that they would achieve 15% more profit in 2014 comparing to the current year, which is the short term objective of the company. They are trying to achieve 25% more growth in next five years; this is their long term objective. SMART SMART is a key performance indicator that guides the people in an organization when they used to set business objectives (Figure 2). A smart objective is Specific, Measurable, Achievable, Realistic and Time Scaled. S The objective of Ford Edge is very much clear and Specific. M The objective is measurable as according to the objective the organization is expecting 15% profit in next year. A The objective is achievable as the current need and trend of people is shifting towards these kinds of green vehicles. R The estimated and set objective is very much realistic. Attaining 15% growth in next year with new effective product can be gettable. T Trying to achieve 25% growth in next five year is a reasonable target. As the organization already has skilled employees and the managers organize training programmes, therefore, it is feasible that the objective is very much measurable and can be obtained within next five years. Business Strategy Boston A business strategy is a long term plan of action planned in order to achieve set of objectives and goals (Kotler, 2009, p.177). Target market for the newly developed Ford Edge is the people who are environment concerned. The market is highly competitive. There are potential competitors, such as Toyota FJ Cruiser, Toyota Venza LE and Kia Sorento EX who can take away the market share of Ford (First-Thoughts, 2013, p.1). The existing products of Ford are Ford Fiesta, Ford Endeavour etc. Ansoff Matrix is a marketing planning tool that helps the company to determine the product strategy and growth strategy of the company. This market growth matrix suggests that, an organization tries to grow its business depending upon the existing or new products of an organization. While analyzing the Ansoff matrix in terms of Ford Edge, the existing product in the new market would be this Ford Edge (Figure 1). They have applied product diversification strategy in order to fulfil the market needs in present scenario. Consumer Behaviour Consumer is someone that buys the end product. In this case the probable consumers looking to buy the product would be belonging to the age group of 21-50 ranging from middle to high income group. Initiator It is the person that identifies the need and provides suggestion to a buy a particular product or service Influencer It is the person than influences the buyer to make the final product choice Buyer This is the person who makes entrance in to the final transaction or gets involved in the actual physical activity of making the purchase decision. User It refers to the person who actually consumes the product. Example A small kindergarten girl has to purchase crayons for the class Initiator: Girl. Influencer: Teacher or classmates. Buyer: Parents or Siblings. User: Girl Herself. Market Segmentation Market segmentation is a process that defines a large homogenous market into identifiable segments having similar wants, needs and demand characteristics (Kotler, 2009, p.201). There are four major types of market segmentation, such as Geographic, Psychographic, Behavioural and Positive segmentation. According to the case of Ford Edge people of US always try to consume Ford cars as the brand is an American Icon. 70% people have positive mindset about the consumption of Ford vehicles. The product in-built attributes, eco-friendly segmentation and reasonable price will attract the people who fall in behavioural segmentation. Targeting Target market can be defined as the market segment that the company is planning to sell the product (Kotler, 2009, p.208). Target market is the segment that the company has identified as the most likely customers for the proposed product. Target marketing looks to provide marketing mix to different customer groups Different Target Marketing Strategies Undifferentiated Marketing: One Marketing Mix for whole market Concentrated Marketing: One marketing Mix for one market segment only Differentiated Marketing: Different marketing Mix for different market segments Ford Motors Company is going to launch the product in three different countries. Based on the product description is proposed that the company follows the focused or concentrated target marketing strategy. Country Target Market Segment China 21 – 50 years old male or female belonging to the middle income to high income group( 60,000 RMB/yuan to 500,000 RMB/yuan) Europe (Germany and Italy) 21 – 50 years old male or female belonging to the middle income to high income group; people who are single and on the verge of beginning a new family. Such people may want small and fashionable SUV at affordable prices. US 21 – 50 years old male or female belonging to the middle income to high income group ($40,000-$75000 plus). Just like Europe these people may want small and fashionable SUV at affordable prices. These people are usually likely to have formal college educations living in urban cities with very active life styles. Positioning Positioning is a marketing strategy that targets to formulate the brand dwell in a distinct position, in the customer’s mind and relative to its competitors (Kotler, 2009, p.81). Ford Edge is a newly developed vehicle by Ford. The brand name ford is an American Icon. They have different model car for every style, price, and work load and gas mileage. Ford Edge is a hybrid version of gasoline and electric (Sdsu, 2008, p.1). The target customer of this car is middle class consumers aged between 18 and 50. The target customers are environmental conscious. Recommendations Based on the above analysis it is recommended that the company should adopt price skimming strategy. Local dealership and online marketing should be used to reach the customers. The company should rely on advertisement in the initial part and the use sales and trade promotions to push the sales. The company should keep the macro environmental factors in mind, especially the political and social system of China. The company should adopt focused or concentrated marketing strategy. The ideal target market segment should include people belonging to the age group of 21-50 and having middle tot higher income group. References Csb, 2011. Writing a Marketing Plan. [Pdf]. Available at: . [Accessed on April 17, 2013]. Finance, 2013. Ford Motor's CEO Discusses Q4 2012 Results - Earnings Call Transcrip.[online]. Available at: < http://finance.yahoo.com/news/ford-motors-ceo-discusses-q4-234014290.html>. [Accessed on April 16, 2013]. First-Thoughts, 2013. Toyota Sienna. [Online]. 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Appendix Figure 1: Ansoff Matrix (Tutor2u, 2012, p.1) Figure 2: SMART Theory (Psu, 2011, p.1) Read More