Ford Motor Company - Contemporary Thinking in Marketing Referral Package - Case Study Example

• Contemporary Thinking in Marketing Referral Package
• Introduction

The intensive competition in today’s business world has led to the development of various strategies by the contemporary firms, so that they are able to sustain themselves in the quest of earning greater market share. Many companies have resort to formulation of strategies that could contribute to the competitive advantage of the firms through collaborative partnering with the suppliers and purchasers (Williams, 2012). Scholars have noticed that most of the transactions between economic agents are non-market exchanges but are a part of an existing relationship between a seller and a purchaser (Williams, 2012). The foundation of marketing or business relationships’ success is how well a company is able to understand their customers and their expectation for their purchased products. There are various factors that affect marketing relationship such as price of a product, quality standards and consistency of providing good sales and after- sales services (Williams, 2012). There can be a number of contact points between a buyer and a seller but all those contact point result in strengthening the bond between them. Many researchers has commented about the benefits of marketing relationships such as, it has been identified as the mode of preserving and enhancing the value of intangible assets (say, goodwill) that is very useful in management of tangible assets (Williams, 2012). This also ensures that a company is able to gain customers’ loyalty and greater share of market in the long-run.

In the report, Ford Motor Company has been chosen to illustrate the value of successful marketing relationship. Ford is the second largest automobile manufacturer in the United States (US) and fifth-largest in the world (Ford, 2016). The success of the company is well known and it has come far since “Industrial Revolution”. Ford is guided by the vision of people working together as a lean, global enterprise in order to add value to people’s lives through automotive and mobility leadership (Ford, 2016). The report focuses on how Ford is building marketing relationship with its target audience to improve its revenue and ensuring further growth in future.

Ford’s branding of Cars

A brand position statement is regarded as the guiding principle with which a particular brand communicates to the customers with pride. Such “tag lines” provide the objective of a brand and it changes with time along with the change in goals of the concerned company. When a brand statement is clear, it helps the workers as well as managers of the firm to evaluate their performance towards attainment of a central strategy (Shimp, 2008).

In 1990, Ford had the brand statement of “Quality is Job 1. Its Working” which depicted that the objective of Ford was to provide quality as their first and foremost target. The same message was communicated to all levels of Ford’s employees internally while consumers came to be known what they were supposed to expect from their products (Annual Report, 2015).

The company has published its market research for the first time in 2013 through which they also upheld their view with which they were trying to gain brand leadership. The research consisted Ford’s management saying that the social contact known to the world has been broken and people are getting cheated resulting in the creation of mistrust against corporations, media and even against some of the governmental bodies.

Currently, the brand statement of Ford is “Go further”. In the competitive business, Ford has chosen the strategy to manufacture cars and trucks as smart digital machines. This is because, Ford understood customers’ loyalty can be won by providing value in product and service through integrity. They are operating with objective of providing cars and trucks which can be fuel efficient, within the budget of the customers, sleek in design and releasing minimum emission.

The main target under the strategy of “Go Further” is to introduce electrification in Ford’s products. With the new brand statement, the company wanted to make buyers understand that they are now prioritising future and the production of new fuel efficient automobiles will help the consumers to go further into the future. Ford’s manufacturing is totally based in USA (United States of America) and have already produced some hybrid, plug-in and electric cars. Apart from that, Ford has also improved its conventional cars with the installation of “Eco-boost” engine.

Figure 1: Ford's way to "Go Further"

(Source: Ford, 2016)

Consumers’ awareness regarding the price rise of the conventional automobiles owing to the increasing trend in the prices of bio-fuels has been the driving force towards electrification of cars. Their market research has revealed that more than 65% of the population within the age group of 18 to 65 years are anticipating the climatic change to influence gasoline prices. The majority opinion is inclined towards sustainable way of commutation; hence, they have learned the need to remain competitive by manufacturing cost-effective and environmentally compliant automobiles. However, the company is engaging in the production of electric cars not only because it is beneficial for the society, but also they can reduce per unit cost of production and enjoy economies of scale. The CEO of Ford is well aware of the company’s corporate social responsibility (CSR) and is using consumer favouritism towards ‘green practices’ to increase Ford’s sales revenue.

• Marketing Communication of Ford

The marketing communication can be defined as all the messages and media that are deployed by a company in order to communicate with the target market. The components of marketing communication include marketing campaigns, packaging, advertisement, branding, packaging, online promotions and websites for selling and other services. However, the target of these entire medium is to provide a clear message to the customers in order to allure them to purchase more of a company’s products (Jefkins, 2012). Customers receive lots of information and decide to select one of the substitutes. However, in order to direct towards any particular product, the information conveyed by the company needs to be simple and easy to understand what benefit they will receive by the consumption of the concerned products.

The digitally active world has also encouraged Ford to step up and enter the virtual world of connectivity. The company has focused its production towards automobile considering the changing preference of the current generation because they will form the largest section of future demand. Ford’s strategy of producing economy cars is the perfect example of the company’s prime target to be the Gen-Y according to the opinion of Lisa Schoder, the global small-car marketing manager of Ford. The preferred medium of communication of this section of the population is internet and hence it was only a matter of time for Ford to choose social media as one of the chosen platform of communication. The rejuvenation of Ford’s product line was also a revealed in its social media account.

Ford’s social website allows the customers to come in direct conversation with employees of the company and there is provision for feedback from the customers. It also acts as the platform of promoting new products. Customers can share their experiences of owning Ford cars. The governance of Ford keeps customer interaction as real as possible because they feel that they are accountable to the shareholders and stakeholders (Ford Sustainability Report, 2014a).

Ford has presence in Facebook, LinkedIn, Instagram, Twitter and Google+ profiles. The company maintains consistency in all these social platforms, for example, blue is used as a colour theme and the brand statement can be perceived in hashtag which is uniform across all the social profiles. The advertisement page of Ford consisted of images of their new cars but social websites also reflect their accountability towards maintaining social responsibility and the strength of Ford’s cars are depicted against most exotic landscapes. The management of Ford also keeps a page featuring Ford’s old models. The content of Ford’s social pages is updated on a daily basis. This helps in keeping consumers’ interest glued to the brand and create new customers (Target Marketing, 2016).

One concern that can be sighted is that there is no connection between social media accounts and the website. This does not allow the consumers who are browsing the specifications of Ford cars to directly place an order for a new car on the spot. The social accounts do not contain any direct link to the website. Social media accounts of the company only serve the purpose of making consumers aware but Ford should include a redirect link to utilise the opportunities of increasing its sale.

Relationship Marketing of Ford

Relationship marketing is one of the important facets of customer relationship management (CRM) that concentrates on the long-term customer loyalty to enhance its sales rather than accomplishment of short term objectives like, individual sales, customer acquisition etc. (Brink and Berndt, 2008).

Ford has understood the importance of customers’ preference in making a product success. The company has a dedicated team to analyse customers’ feedback. The information regarding the complaint of a customer or the knowledge of an individual’s satisfaction from purchasing a product is as good as obtaining what he or she actually requires in a product. The marketing mix of Ford helps it reach to its target customers. Ford being an automobile company has varied target audience because the company produces family cars, economy cars, next generation electric and hybrid cars and trucks. Currently, the focus of the company has been towards on the sustainability and production has been transformed according to the customer preference. However, apart from cars and trucks, Ford is also engaged in manufacturing of buses, tractors, automotive parts/components, financial services, vehicle leasing. This diverse manufacturing of Ford allows the company to reach to all levels of consumers (Pearson Canada, 2014).

Ford is not leaving any opportunity unturned and thus, distribution of ford comprises dealerships, stores (selling cars and auto parts), the website (where any customer can buys cars as well as its parts) and financing (offices of Ford Motor Credit Company and dealers are also authorized for extending financial services). The company is engaged in direct sale with its business clients and for the rest of the masses, it uses all marketing communication techniques such as, advertising, promotional discounts and customer profiling to cater personal needs of each customer. The website and social media presence helps a lot in this regard. Ford in order to ensure long term customer engagement offers two types of pricing strategies; market- orientation pricing strategy and premium pricing strategy. In the market orientation pricing strategy, Ford fixes the prices after analyzing the market conditions and in this, the company considers various aspects like, competitions, price of substitutes available in the market, customers’ willingness to pay for their products (Annual Report, 2015). The company usually applies such pricing strategy upon sedans and trucks because these two categories face maximum competition and has the largest share of consumers. The premium pricing is applied to Ford’s luxury cars i.e. Lincoln automobiles. The organisation uses different pricing strategy to secure more number of consumers.

Ford finds it most important to ensure continuous interaction with the customers (Target Marketing, 2016). Marketing experts employed by the company are engaged in intensive research which are then analysed to get knowledge about their potential customers and how much value they attach to their purchase. This easy communication is facilitated by the website of Ford where they can directly contact the dealers and other services such as configuration pricing, financial services are rendered. This helps in building trust upon the brand. One of the most important things is to get the information when a customer is actually in the market to purchase a car. There are statistical estimations but the correct expectation can only be set when a consumer confirms about his or her purchasing decision. Hence Ford, like other automobile companies appoints executives with whom customers can directly engage in dialogues and further strengthen the relationship between them (Brink and Berndt, 2008).

• Customer Profiling by Ford

Ford believes that they can only remain in the competitive market only if they are able to cope up with continuously evolving demands of the consumers as they are the source of revenue for the firm. The marketing experts are always keeping a close watch over the changing global patterns so that the management at Ford can have a varied, comprehensive perspective on the purchasing trends of the existing consumers and how their future buying decisions can be affected with changes in social, political and environmental circumstances. Both internal and external experts work jointly to analyse these trends and transpire the concerned knowledge throughout the marketing, product design and other operation management departments so that future manufacturing of the products are aligned to the latest technological developments and complies to the preference of the consumers.

The marketing experts have the responsibility of preparing “Brand DNA” “target customer profile” for each new product and brand. The information captured in brand DNA and customer profiles are not only the demographic data (age, gender, income, etc.) but goes beyond to record their likes and dislikes, their preference in music, their hobbies, their favourite shopping destinations and their regular commutation patterns. All these data get processed in the product research and development so that Ford engineers can come up with products that satisfy all the needs of the customers (Ford Sustainability Report, 2014b).

Figure 2: Ford's Customers' Profiling

(Source: Author’s Creation)

The customer profiling is done on a country specific level where customers’ psychological traits and the values that they attached to daily purchasing decisions are recorded. This is necessary for Ford to understand and develop cars that will be able to cater greater customers across wide range of global markets. Ford has a dedicated office that is responsible for tracking changing trends in the social, political, technological, economic and environmental platforms. It was the report of this team based on which Ford shifted its brand statement and objective towards greener and socially responsible production. The insight about Ford’s research is available in the “Looking further with Ford” report (Ford Trend Report, 2015).

Survival in the modern world necessitates multi-tasking since people are getting busier day by day. This shift in the life style has provided the idea of installation of hands-free music and call receiving technology in the cars known as “Sync with Applink”. Ford’s “MyKey Do Not Disturb” allows the driver to prevent any incoming call or message texts while in motion. The interaction with customers over social media and the browsing history on the website helps marketing analysts to form accurate estimation of their target audience (Ford Sustainability Report, 2014b). However, it is difficult to get correct information from the social activities of the potential customers because online personas of people can be different form real life because of many fake accounts on internet platforms. On the other hand, it is also true that more detailed preferential information about their choices are available on the social accounts of people owing to the growing popularity of social media.

Figure 3: Ford's Projected Revenue and Profit Estimates

(Source: Ford, 2016)

• Conclusion

Ford has come a long way and to ensure a continual of the success spree, the company has given substantial importance to the customer relation and their preferences. Their competitiveness depends on the value they provide for customer’s money. Hence, they have appointed a dedicated team to research on the market conditions and customers’ reaction in regards to those changes so than such informations can be analysed to profile them. This customer profiling helps in product designing.

The company has offered various platforms in the social media to keep themselves connected to the potential customers and answer their queries. This helps Ford in building strong marketing relationships with their target customer. Ford has adapted to the changing technological patterns in the production process and design of the products to appeal more customers across varied global markets. In order to continue the successful journey, Ford needs to continue its interaction with the customers so that not only people get their desired features in automobiles, but also to gain more revenue from extended market opportunities.

• Reference List

Annual Report, 2015. Ford. [online] Available at: < http://corporate.ford.com/annual-reports/2015/index.html > [Accessed 7 July 2016].

Brink, A. and Berndt, A., 2008. Relationship Marketing and Customer Relationship Management. Cape Town: Juta and Company Ltd.

Ford Sustainability Report, 2014a. Governance. [online] Available at: < http://corporate.ford.com/microsites/sustainability-report-2013-14/blueprint-governance.html > [Accessed 7 July 2016].

Ford Sustainability Report, 2014b. Understanding Customer Needs. [online] Available at: < http://corporate.ford.com/microsites/sustainability-report-2013-14/people-customers-needs.html > [Accessed 7 July 2016].

Ford Trend Report, 2015. Looking Forward with Ford 2015. [PDF] Available at: < https://www.at.ford.com/content/dam/atford/archive/2014_NA/Dec/Ford-2015-TrendReportBook.pdf > [Accessed 7 July 2016].

Ford, 2016. Our Company. [online] Available at: <https://corporate.ford.com/company.html > [Accessed 7 July 2016].

Jefkins, F., 2012. Modern Marketing Communications. Berlin: Springer Science & Business Media.

Pearson Canada, 2014. Market Segmentation and Target Marketing. [PDF] Available at: <http://www.pearsoncanada.ca/media/highered-showcase/multi-product-showcase/tuckwell-think-ch06.pdf > [Accessed 7 July 2016].

Shimp, T.A., 2008. Advertising Promotion and Other Aspects of Integrated Marketing Communications. Boston: Cengage Learning.

Target Marketing, 2016. Cover Story: The Social Network Star. [online] Available at: < http://www.targetmarketingmag.com/article/ford-motor-co-uses-social-media-listen-engage-customers/> [Accessed 7 July 2016].

Williams, K.C., 2012. Core qualities of successful marketing relationships. Journal of Management and marketing Research, 10, p.1.