Ford Motor Company of Australia Limited - Research Paper Example

Ford Motor Company of Australia Limited Your name Class Affiliation/ University Course name Professors’ name Date Market research brief To: The management, Ford Australia Company Limited From: Cheruiyot Kipkirui Mosonik, JIT Market Research Limited Date: 8Th April 2012. This is an invitation to propose for an integral study that will be conducted in your renowned organization. The brief is a detailed overview of the research, furnishing you with information that will form a basis for your response. This study is critical to your organization given that it will highlight area of deficiency in terms of marketing. I am looking forward to your feedback. Yours Sincerely, Cheruiyot Kipkirui Mosonik Market Research Manager 1. Background Ford Australia is engaged in producing Ford Falcon, a product that is exported to New Zealand and South Africa. Falcon is designed, engineered, and manufactured in Australia making up a local content of about 85%. Research and development facilities located at Geelong, Lara, and Broadmeadows pursues the task of designing and engineering Falcon. Technologically, Ford Australia is linked with other corporate facilities in Japan, Europe, and North America to facilitate effective manufacturing. Moreover, the company is continuously enhancing its brand through product development strategy and the use of new computer programs. In an article by Beissmann (2011), Ford’s intention to lay off its 240 workforce in Victoria and also reduce production by 20% was driven by deteriorating demand for locally manufactured Ford vehicles especially Falcon sedan. Beissmann (para 4) reiterated that sales level of Falcon had reduced by 40%. The researcher further stated that sales level of Falcon had consistently fallen from a high of 73,220 in 2003 to 33,941 in 2007 and even down to 30,000 in 2010. Other ford products like Falcon Ute and Territory follow suit. 2. Problem / Opportunity A marketing problem facing Ford Australia product is the deteriorating market share as consumers resort to imported models. This has caused a slump in Ford sales as consumers go for small imports. Bridie (2007) confirmed that demand for imported vehicles was increasing consequently taking over close to 80% market share in Australia. HoldonBarina, an imported product, managed to register the best sales figure. To outwit the competitor, Ford must make use of indigenous aspect of Ford and persuade consumers to buy the product. In the advertising strategy, Ford introduced the slogan “Go Further” (Spinks 2012).Apart from taking the brand to the global level, this slogan has been very instrumental in overcoming consumer restraint and doubt with respect to quality and performance of Ford cars. Whilst the slogan targeted company employees, it also persuaded customers to taste the quality of Ford. Previously, Australian Ford deployed “drive one and feel the difference” campaigns, which motivated customers to buy a Ford product and compare it with competitors in the market. Aside from the campaigns, Ford Australia carries out commercials in conjunction with Focus. The intention of these commercials is to highlight advantages of Ford products over other competitors. By conducting a research on Ford market, a marketer will be able to deduce areas that need improvements. Specifically, this research will seek to change psychological orientation of Australia Ford consumers such that they are able to see Ford as a good product. The symptom of current Ford Problem is the diminishing sales level of product. The second symptom is a fuel-sensitive consumer’s tendency to favour small and fuel efficient imported cars. This has led to an increased market share of imported vehicles, which is catastrophic to domestic products including Ford. By undertaking this researcher, a marketer will be able to derive ways of becoming a market leader in Australian automotive industry that is facing a strong rivalry. 3. Other areas of research brief Ford Falcon is an Australian brand with a local content of more than 85% (Agvulpes, n.d). Experiencing stiff competition from over 20 SUVs and declining sales, Ford is at its maturity stage. Generally, this product is experiencing tough economic times as Australian dollar gain strength against other leading currencies. Emergence of low-cost factorises in Asia has a damaging impact on Australian manufacturing. To differentiate itself from competitors in the market, ford manufactured Mondeo medium size car with its Ecoboost engine technology (Dowling, 2012). To add on this, Ford has already made arrangements to introduce four cylinder Ford Falcon engine, which has a fuel economy rating of 8.1L/100km (Dowling, para 3). This is a positive move given that a top selling Mazda3 small car consumes 8.2L/100km. Ford marketing strategy is to use expert knowledge in developing advertisements and TV commercials. Magazines are also deployed in Ford Australia marketing strategy. Through Australian Mustang and Ford Magazine, consumers view the product and can purchase the product. Efficiency of Australian Mustang and Ford Magazine is visible where an advertisement message can be changed following changes in price and market opportunities. Online advertisement is further deployed in a move to reach internet users. 4. Target Market In terms of demography, this research will cover male and female between the age of 28 and 50 years. Psychographics indicate consumers are increasingly demanding fuel-efficient vehicles owing to rising price of fuel and environmental concerns. The price of fuel, which dropped from $4.11 per gallon in July 2008 to $3.42 per gallon in November 2011, is a specific variable influencing psychology of consumers. The anticipation that the price of gasoline will increase in the future is a motivating factor for consumer to demand small, fuel-efficient, and hybrid vehicles. 5. Additional information The critical information required by management is how to increase sales of Ford Australia through improved marketing strategies. This information will be reported to Ford Management in three phases: qualitative, quantitative, and the whole report. The proposed budget and time schedule for the research is as follows: Budget brief It is estimated that the project will cost $5000, a value that cannot be exceeded. A breakdown of how this fund is distributed will be reflected in the proposal. The proposal therefore illustrates how $5000 is allocated to both staff time and direct cost. Timeline overview Date Activity 10th May 2011 Proposal deadline 16th May, 2012 Project confirmed and go-ahead given 18th May, 2012 Project begins 1st July 2012 Presentation to Ford Management Contact for project management Cheruiyot Kipkirui Mosonik Market Research Manager JIT Research Limited Mobile 020-8110687 e-mail: jitcheru@jit.co.uk Stage B: Research Proposal 1. Research objectives Determine attitude of customers towards Ford Australia Determine whether features of ford vehicles are satisfactory. Determine whether customers are aware of promotion covering Ford Product and effectiveness of those promotions in passing a message. Determine customer loyalty and their possibility of switching to other models such as Toyota brands. Determine intention to buy a Ford brand Understand demography of current customers Understand effectiveness of current ford advertisement 2. Reporting requirements In the first instance, an interim presentation will be made to discuss qualitative data. This will be followed by a quantitative presentation. Later on, all findings will be compiled and a PowerPoint created ready for presentation. At an extra cost, individual members will be presented with copies of research findings. 3. Required materials Laptop USB Pen and papers Recorder Printer 4. Proposed cost of the research including time for staff is tabulated below. Item Estimate amount $ Writing materials Voice recorder (for interview) Laptop (for to researching secondary data, typing and writing research) USB (Store data as back up) Printer Other supplementary expenses (travelling, calling, emailing etc) Staff time 100 200 400 20 100 50 3,410 Total 4,280 Proposed time schedule of the project Vital step Week Submit proposal 10th May 2012 Approval of proposal 16th May 2012 Project begins 18th May 2012 Design questionnaire May 18thto 23rd 2012 Submitting questionnaire May 24th to 31 June 2012 Interviewing June 2nd 9th 2012 Tabulation of data June 10th to 17th 2012 Analysis of Data and write report June 18th to25th 2012 Presentation to Ford Australian management July 1st 5. Staff and responsibilities is attached as Appendix 3 6. Indication of information that will be collected Effectiveness of current advertisement used Customer demand or willingness to buy Ford vehicle Features that customer like about Ford Age that a customer want to buy a car 7. Sample group will be obtained through random sampling in the states of Australian Capital Territory, New South Wales, Northern territory, Queensland, and South Australia. Assessment Task 2: Constructing a Survey The survey will be in form of questionnaire and oral interview comprising of seven specific questions along with multiple choices. It is appropriate to use a questionnaire in collecting data. This will entail distributing questionnaires to 100people aged 28 - 50 years in Australian Capital Territory, New South Wales, Northern territory, Queensland, and South Australia. The questionnaire will investigate the following questions: Do customers encounter Ford Motor Vehicle advertisement? Do customers like ford advertisement? Is the advertisement message clear? Do owners of Ford car like the vehicle? What are the products that customers are likely to switch to i.e. within the Ford range or to other products like General Motors and Toyota products? Are customers willing to buy Ford vehicle? At what age is a customer planning to buy a vehicle? What are the features in vehicles that give satisfaction? Response will be placed in Lekert scale for analysis. To minimise on costs, seven closed-ended questions have been chosen which will take a maximum of 10 minutes as shown in Appendix 1. These questions are structured with predefined answers and will be conducted through face-to-face, telephone, and self-completion. Dichotomous questions are also part of the questionnaire with two possible responses. Making use of open-ended structure will be considered depending on type of question. The output of this questionnaire is quantitative data. Interview will also be conducted given its ability to guide the discussions back on track. The interviews will be unstructured and channelled towards people in offices who own cars. Interview questions are structured in open-ended form as shown in Appendix 2. The choice of interviewee will be based on random selection and seek to explore lifestyles and age of Ford customers. These specific variables i.e. lifestyles and ages often call for rephrasing when asking questions. Successful completion of the interview gives rise to qualitative data. Ford Motor Company of Australia Limited A report to Ford Australia management regarding effectiveness of its marketing strategy Submitted July 1 2012 Cheruiyot Kipkirui Mosonik Market Research Manager JIT Research Limited Table of Contents Executive Summary 16 Background 16 Methodology 17 Results 17 Analysis of research findings 19 Recommendations based on research findings 21 Areas that need further research 22 Time and Cost Analysis 22 Conclusion 23 Bibliography 25 Appendices 26 Executive Summary The aim of this report was to investigate whether customers are aware of Ford product, what they like about the product, and ford advertisement that they have encountered. The outcome revealed ways of improving demand for Ford vehicles through enhancing advertisement. A survey on customer exposure to different Ford advertisement was conducted. This survey exemplified that majority of people is exposed to print media and TV commercials. The report concludes Ford Australia has not done enough to market its products. It is therefore recommended that more road shows and exhibitions should be conducted with a view of informing the customers of Ford range of products. The second recommendation is to differentiate customers according to their car usage and present a product that meets them at their point of need. Background Ford Australia is a local product designed, engineered, and built in Australia. A marketing problem facing Ford Australia product is the deteriorating market share as consumers resort to imported models. This has caused a slump in Ford sales as consumers go for small imports. The basis of this shift in consumer preferences is exposure to conflicting market information in addition to rising price of petrol and preferences for small and light vehicles. In the same vein, Australian consumers often encounter competing advertisement messages from Japanese Toyota vehicles and U.S. General Motor’s vehicles. Methodology This study was conducted by using questionnaires and interviews. 100 questionnaires were distributed randomly in Australian Capital Territory, New South Wales, Northern territory, Queensland, and South Australia. Questionnaire collection boxes were placed in various shopping malls for five days. At the same time, questions contained in the questionnaire were only seven and people could easily fill them and submit. To examine attitude of customers towards Ford vehicles, 50 people were interviewed orally in the five states and the result assessed for similarity. Results The response rate to questionnaire was 75% and the result was codified and tabulated in the table below. Result of questionnaire was examined in terms of advert clarity, captivating, and innovativeness. Ford advertisement Strongly agree% Agree % Disagree % Strongly disagree% Advert message is clear Advert message is innovative Captivating advert (use of graphic) 35 25 25 4 65 50 55 7 10 6 3 15 This allowed the research to deduce areas that need more attention. Qualitative data was collected in form of questionnaire and interviews that sort to assess customer choice of vehicle and other variables. This has been recorded and attached as appendix 1 and 2. Secondary data collected Vehicle features: The first secondary source is data that showed increasing features of vehicles. This data was obtained from VFacts report (2011, p. 13) and is tabulated in the table below. Table 1 Greater Vehicle Feature Levels 1995 Ford Falcon GLi 2002 Ford Falcon Forte ABS Brakes: Air Conditioning: Airbag: Audio: Windows: Wheels: Option Option Driver Radio/ Cassette Manual 15’’ Standard Standard Driver and passenger AM/ FM CD Stereo Front Power 16’’ Source: VFacts report (2011) Affordability increased from 44 weeks work in 1995 to 38 weeks in 2002 (VFacts report, 2011, pp. 12) Table 2: Demand for fuel efficient and environmentally friendly vehicles Sales (YTD March) Honda Insight (hybrid) Toyota Prius (hybrid) Ford Falcon (dedicated LPG) 2 49 942 Source: VFACTS Report (2011, pp. 14) Table 3: Sale of new vehicles in various Australian states in 2011 and 2010 Market 2011 2010 AUSTRALIAN CAPITAL TERRITORY NEW SOUTH WALES NORTHERN TERRITORY QUEENSLAND SOUTH AUSTRALIA TASMANIA VICTORIA WESTERN AUSTRALIA 1,358 26,608 808 17972 5041 1439 22996 8974 1311 24451 717 15922 4974 1477 22829 9244 Total 85196 80925 Analysis of research findings Lekert scale shows that there is room for improvement with respect to advertisement and the accompanying messages. The primary data attached as appendix 1 and 2 brings to light three issues that can be classified as trend in Australian motor vehicle industry. First is the increasing sensitivity of consumers towards fuel-efficient vehicles shown by VFACTS Report (2011, pp. 14). The anticipation that the price of gasoline will increase in the future is a motivating factor for consumer to demand fuel-efficient and hybrid vehicles. High demand for latest technology and increased safety forms the basis of consumers purchasing a vehicle. Notwithstanding the fact that manufacturers invest in research and development to come up with new products, they have not succeeded in keeping pace with the rate of technological change. In-vehicle telematics that guarantees instant safety, security, and communication is a technological advancement that will assist a driver when driving around. Table one above shows increasing features of Ford Falcon vehicle. In 1995, Ford Falcon GLi had limited features compared with Ford Falcon Forte of 2002. Besides, VFactsreports (pp. 12) indicated increased affordability amongst Australians. This is confirmed by the statistic that Australians take fewer weeks’ work to buy a vehicle. Specifically, Ford falcon now takes 38 weeks work contrary to 44 weeks work registered in 1995 (VFacts report, p.12). This affordability is supported by emergence of low cost vehicles and rising competition in automotive marketing that follows diversity in brands. Table 2 shows an increasing demand for fuel efficient and environmentally friendly vehicles. Insight and Prius are petrol vehicles emitting a higher percentage of carbon while Ford Falcon is dedicated LPG car. Besides environmental harm caused by Insight and Prius, these vehicles are also more expensive as compared with Ford Falcon. This explains a high sales level of Ford Falcon. Table 3 exemplifies the fact that demands for new vehicles increased from 80,925 to 85,196. The reason behind this increased sale is an improving economy, which avails higher disposable income. At the same time, consumers are finding pleasure in buying new arrivals that comes with innovative features as shown in table two. Recommendations based on research findings The first recommendation is for marketing department to intensify promotion of Ford Australia products through road shows and exhibitions while giving a very clear account of distinctive features of the various range of ford vehicle. This will be done by forming new partnerships with advertisers in unsaturated markets within various states of Australia. The partners will revamp the business in addition to presenting Ford range of products in a creative way. A technical advertising team needs to be formed to look into issues that arise following conflicting messages that reaches culturally diverse and globalized Australian society. Apparently, messages contained in the advertisement should have the cultural outlook of local community. Secondly is to concentrate advertisement messages on features that motivate customers into buying a car i.e. fuel efficiency, innovative and technologically advanced Ford vehicles. Vehicles are trendy in nature and Ford must be marketed while adhering to this trend otherwise it will be very difficult to make sales. Technology is driving the present society and Ford marketers ought to pay attention to these features in order to differentiate itself from other cars in the market. This is also in response to the fact that Toyota and General Motors are moving fast to introduce their own range of innovative and technologically advanced products. Toyota for example introduced into the market gasoline-electric hybrid automotive that culminated to millions of sales in 2010. Areas that need further research After conducting this research, areas that need further studies surfaced and include the following: a. The effect of road structure on vehicle sales b. The impact of vehicle parts on buyer behaviour. c. Relationship between vehicle model and road accidents Time and Cost Analysis All events were conducted within the proposed time schedule. However, there was a slight variance in cost of research as indicated below: Direct expenses Estimate Proposed amount $ Actual Variance Writing materials Voice recorder (for interview) Laptop (for to researching secondary data, typing and writing research) USB (Store data as back up) Other supplementary expenses (travelling, calling, emailing etc.) Printer 100 200 400 20 50 100 300 350 500 20 75 100 +200 +150 +100 0 15 0 Total Direct expenses 770 1245 475 Staff Cheruiyot Kipkirui Mosonik 1000 1000 Kris Kubasu 600 600 Geoffrey Kipng’eno 500 500 Mark Henry 400 400 Roberto Carlos 450 450 Mwanaisha Danielson 460 460 Total staff time 3410 3410 Total expenses 4280 4755 475 Conclusion This paper carried out a research on customer awareness of Ford product, what they like about the product, and ford advertisement that they have encountered. The result of the research illuminated ways of improving demand for Ford vehicles through enhanced advertisement. A survey on customer exposure to Ford advertisement was conducted. The report noted that Ford Australia has to reshape its promotion strategies such that market shape is improved. The report recommended more road shows and exhibitions to be conducted with a view of informing the customers of Ford range of products. The second recommendation is to differentiate customers according to their car usage and present a product that meets them at their point of need i.e. customised product advertisement. Bibliography Agvulpes. n.d. Ford Motor Company in Australia.Retrieved April 7, 2012, from http://agvulpes.hubpages.com/hub/Ford-Motor-Company-in-Australia. Beissmann, T 2012. Ford Australia cuts jobs, production as Falcon sales dive. Retrieved April 7, 2012, from http://www.caradvice.com.au/115148/ford-australia- cuts-jobs-production-as-falcon-sales-dive/. Bridie. S 2007. Australian car sales slump as buyers go for imports. Retrieved April 7, 2012, from http://www.theage.com.au/articles/2007/01/04/1167777218377.html?from=top5. Dowling, J 2012. Four-cylinder Falcon uses less fuel than Mazda3.Retrieved April 7, 2012, from http://news.drive.com.au/drive/motor-news/fourcylinder-falcon-uses- less-fuel-than-mazda3-20120201-1qsne.html. Spinks, J 2012.Holden goes better, but Ford will go further. Retrieved April 7, 2012, from http://www.caradvice.com.au/162960/holden-goes-better-but-ford-will-go- further/. Appendices Appendix 1: Questionnaire Question 1 Do you usually encounter Ford Motor Vehicle advertisement? Yes No If yes, please state the media of the advertisement.  Magazines TV Billboards Newspaper Question 2 Do you own Ford range of cars? Yes No If yes, state the model of Ford car. If no state the other type of vehicle. Ford KA Ford Laser Ford Falcon Question 3 Which range of Fordvehicle are you likely to buy next? Ford Falcon Ford Territory Other Question 4 Are you likely to buy Ford as a second vehicle or not? Yes No Question 5 At what age are you likely to buy a vehicle? 35 40 45 Question 6 Do you love innovative vehicles with technologically advanced features? Yes No Question 7 What is your income range? $ 200-600 $600-1000 $1000-above Appendix 2: Interview questions Question 1 Please describe for me the model of your car, date you bought it, and your age when you were buying the car. I bought my Ford Territory car in 2011 when I was 35 years old. Question 2 Why did you buy the vehicle? (For family usage, business purposes, lifestyle, travel to work etc). Response: I bought my car for personal usage i.e. going to work and family usage. Question 3 What factors did you consider when you bought your car? (Fuel consumption, light weight, speed, internal features, new model in town, colour, space, electronic devices etc). Response: I am very sensitive to how my car consumes fuel. Secondly is the comfort that I derive from using the car. I also value technologically advanced vehicles. Appendix 3: Staff and responsibilities Staff Rank and duties CheruiyotKipkiruiMosonik Project manager Manager meeting Ensure smooth running of project Kris Kubasu Survey Supervisor Schedule surveys Ensure collection of data and market information Geoffrey Kipng’eno Project research Collect data evaluate data Chepkemoi Henry Data analyst assess and evaluate data Roberto Carlos Editor edit and review project Mwanaisha Danielson Computer specialist Offer computer support services Read More