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This report highlighted the importance of marketing. It says marketing research is crucial for the companies, especially for those who follow the B2C approach. In order to compete in the rapidly changing automobile market, a company has to carry out an authentic market research. This report outlined the marketing strategies and other aspects related to marketing in the context of Hybrid Cars of Ford Australia.Ford Motor Company of Australia Limited is the Australian subsidiary of Ford Motor Company which is a US-based automobile maker.the company is planning to launch its hybrid cars all over the world. The company is all set to launch its two most advanced hybrid cars, namely 2018 C-Max Hybrid and Fusion Hybrid in Australia. The report elaborated on the 5Cs concept of the company. In addition to this, it also discussed the marketing research towards customer satisfaction, role of distributors, and threats from competitors. Apart from this, the report also outlined the marketing strategy followed by Ford. Furthermore, the 7Ps of marketing strategy was elaborated. Before the conclusion, some challenges and recommendations were listed down in the context of Ford.
Marketing is the backbone of every business and is crucial for creating, keeping, and satisfying customers. It helps the business to generate values by aligning the products with the demands of the customer. This report will highlight the marketing strategies and other aspects related to marketing in the context of Hybrid Cars of Ford Australia.It will discuss the 5Cs concept of the company. In addition to this, the report will talk about the marketing research towards customer satisfaction, role of distributors, and threats from competitors. Apart from this, the report will also outline the marketing strategy followed by Ford. Furthermore, the 7Ps of marketing strategy will also be elaborated. Before the conclusion, some challenges and recommendations will also be listed down in the context of Ford only.
Ford Motor Company of Australia Limited is the Australian subsidiary of Ford Motor Company which is a US-based automobile maker. The company employs more than 220,000 people worldwide. The company set up its Australian headquarter in March 1925 at Geelong. The first Australian car model launched by Ford was Model-T and in the next seven years, the company introduced two new model in the Australian Automobile Market that was Model A and V8. Recently, the company is planning to launch its hybrid cars all over the world. In February 2013, the company came up with Ford Fusion Hybrid in the USA which runs on gasoline and electricity as well. The company is all set to launch its two most advanced hybrid cars, namely 2018 C-Max Hybrid and Fusion Hybrid in Australia.
The vision of Ford highlights three major aspects:-
- Lean Business
- Emphasis on Stakeholders
- Global Leadership
It says “people working together as a lean and global enterprise for automotive leadership.”
The mission statement is“One team. One plan. One goal.”
Tagline- “Go Further”
Talking about the company’s marketing strategy, Ford employs a differentiated targeting strategy, wherein it serves specified segments of Automobile consumers with a specific product. Ford understands the ever-changing demands of the customers. Therefore, it used a mix of geographic, demographic, psychographic segmentation variable so as to fulfil the ever-changing demands of customers.
Here, both internal and external business environment is analysed by applying different analysis model. In the case of Ford, SWOT analysis tools and PESTLE model is applied to analyse internal and external conditions respectively.
Strength: The brand value of Ford is over $19 billion, strong R&D, more than 38000 patents, efficient hybrid technology for cars and other heavy-duty vehicles, and large product portfolio.
Weaknesses: Weak performance in the emerging market, recent product failure caused a decrease in market share.
Opportunities: With its hybrid cars, Ford is planning to expand into a new market and penetrate the existing ones. There is a high demand for hybrid cars globally and governments are also providing incentives to the company to encourage the use of hybrid cars. Apart from this, Ford enjoys the global automotive opportunity as it is currently growing at a rate of 6% by 2019.
Threats:The major threats to the company is the environmental regulations, the recession the global economy, competition from General Motors, Toyota, Chevrolet, Honda, etc. In addition to this, the standardization problems, and high risk of locking in the technology also exist.
PESTLE Analysis of Ford
Political factors: Automobile market and industries are greatly affected by the political policies, instability, government regulations, force groups, etc. These factors put a huge pressure on the companies including Ford.
Economic Factors: These factors have a large potential to make Ford's manufacturing capabilities upside down. Factors like inflation rate, growth rate, the rise in income, unemployment, ROI, cost of fuel for the car, and technology cost, etc., severely affect the revenue of the company.
Social Factors: Cultural environment plays a great influencing factor in the marketing strategy of the company. Since Ford is about to launch its environment-friendly hybrid cars in Australia. People's inclination and acceptance is an important factor behind the success of this product.
Technology Factors: Rapidly changing technology affects Ford's operation severely. These factors include the increase in the use of mobile computing, limited availability of funds to purchase advanced technology, increasing usage of online services.
Legal Factors: The effects of macro-environment on the functioning of Ford is very huge. Sometimes legal disputes may cost the company a fortune. The legal regulations and policies are already defined by each country and if Ford does not follow them, then it may face legal actions.
Environmental Factors: As discussed earlier, the environmental policies of a country affect the selection of a location for setting up the manufacturing plant. These policies are associated with the factors, such as climate change, trend of low carbon emission, and declining fossil fuel reserves.
2. The concept of 5C's
The 5C’s are quite effective in sound decision-making and constructing a well-structured marketing strategy and plan. Ford can use this approach in analysing 5 key areas that are essential for making marketing decisions for its hybrid cars in Australian automobile market (Cavusgil, et.al, 2014).
- Customer:Here, the company identifies the needs of a particular customer segment that Ford is trying to satisfy. These needs can be determined by a rigorous market research, quantity and frequency of purchasing, retail channel, customer needs based on ever-changing trends.
- Company:Here, it is determined that whether Ford has enough potential to cater to those needs of the customers. The product line and technical resources would be analysed. The manager would analyze the micro-environment using SWOT analysis technique and macro-environment using Porter's five force model. This can be called a situational analysis of both the internal and external environment.
- Competition:The competing firms can eat up the consumer base, thereby affecting the revenue of the firm hugely. Ford should first identify and understand the risk associated with the competition. It needs to understand their policies and marketing strategy. This would help in gaining an edge over them.
- Collaborators:These are the crucial assistance that a company gets externally. These can be the supplier, investors, distributors, and another third party that can help the company in achieving its goals.
- Context:In this stage, various limitations and their root cause are determined. The cause can be related to fields, such as political, economic, social, technology, environment, and legal. To understand the context, PESTLE analysis is done which has already been done here.
3. Marketing research and intelligence towards
Marketing research is crucial for the companies, especially for those who follow the B2C approach. Ford directly sales its cars to the customers. Therefore, in order to compete in the rapidly changing automobile market, Ford has to carry out an authentic market research. The aim of marketing research are (Looand Leung, 2016):-
- To develop products and build brand awareness in the target market.
- To increase and sustain the sales from the targeted audience.
- To cater to the rising demand of the hybrid cars in the Australian market
- To identify the potential competitors and their risks.
- To understand the role of the supplier and distributors.
Customer satisfaction is crucial for the Ford to gain an edge in the automobile market and to maintain a long-term health of the company. Customer satisfaction leads to customer retention. According to the Harvard Business Review, if customer retention rate of any organisation increases by 5%, then it would result in an increase of profits by 25 to 95%. Market research helps in understanding the customer's ever-changing demands and their special needs. With the knowledge of customer’s demand, Ford can tailor the hybrid car design and services to fit in the consumer’s preferences.
3.2 Threats from competitors
Market research also helps in assessing the key competitors. They have the strong powers to influence the customers as their perceptions are dynamic and can be influenced by the whole automobile market. Therefore, it is crucial for the Ford to carry out competitive analysis. For this purpose, Ford can refer to various real-world case studies, company profiles, and market reports. Market research helps the company to determine various important industry opportunities and standards that can provide it with a leading edge while designing hybrid cars. Once this is done, the company would have a top-notch quality perspective of the business (Osterwalder, et.al, 2014).
3.3 Revolution on the business
Market research helps in identifying the areas of improvements for the organisation. Hybrid cars concept is in high demand among the target markets. Ford has to provide a unique element that distinguishes its cars from that of the competitors. When it knows and understands the factors that are most sought-after by the customers, it can able to deliver them. Once all of this knowledge is with the company, it can focus on developing strategies in order to deliver them and make changes in the bottom line (Solomon, et.al, 2014). This would help in engaging the customers and make a long-term impact on the success of Ford’s marketing strategies.
3.4 Role of distributors
Marketing research can help in exploring and linking the distributors and the organisation. Producing large of a number of hybrid cars would be of no use if the company fails in making their products absorb in the market. Market research can serve the various purpose in the context of the distributors. The first and foremost is that research helps in identifying the suitable location of the outlet (Karunakaran and Vadivelu, 2016). The second is shaping and improvising the image of the store. The third is the distribution and reduction of cost associated with the operation of the store. In addition to this, the store also helps in the analysis of merchandise-line.
4. Marketing strategy
The overall purpose of marketing strategy developed by Ford is to achieve the basic marketing objectives in order to have earned high revenue and achieve greater market share from 2018 C-Max Hybrid and Fusion Hybrid. The marketing mix should aim at delivering the right product, at the right price, in the right place by making use of the apt promotion (Baker, 2014).
4.1 Target market
While developing the concept of manufacturing thehybrid cars that are eco-friendly, the company simultaneously decides the target audience. The overall aim is to serve the customer at the fullest by satisfying their needs and gain maximum profit. The company has bifurcated the target market into the primary, secondary, and tertiary target (Ferrell and Hartline, 2012). In the primary target, the company has placed a rich and elite class who are willing to spend any amount to buy new cars. In the secondary target, the company has identified those people who are able to purchase new cars but they seek products within their pre-defined budgets. These people are the major patrons of Ford. They need hybrid cars to fulfil their travel needs. Tertiary targets are characterised by the lower middle-class people who are seeking budget-friendly cars for their daily travel needs.
4.2 Value proposition
The value proposition is the assurance that a company provides to its customers regarding the delivery of the value to them. The statement contains the benefits a company is offering its customers. In addition to this, it also states why the company is best to deliver the project. The importance of value proposition from the company's perspective is that it helps the company to grow its business (Im, et.al, 2016). Ford can grab the attention of the target audience because they could identify the benefits to the customer. Having a well-written value proposition can have many benefits:-
- It helps in the development of a strong understanding between the organisation and customers.
- It helps in making a differential line between the rivals and competitors.
- It assists the business organisation to gain market share in the market.
- It helps the company to improvise its operational efficiency.
It is very important for the company to understand their marketing value proposition and try to make it easy to understand, simple, and less confusing. For this purpose, the company should be able to defend its statement.
4.3 Market position
Market positioning is the wittiest way to make a brand to be first in mind. It cannot happen overnight as this requires a deep and sensibly correct strategy. Even if the concept of hybrid cars that runs on fuel as well as on electricity is not new, Ford has to take care of the unique element in its products (Armstrong, et.al, 2014). It is more of a strategic attitude that should be supported by the entire organisation. Market positioning is all about how the customer will perceive the hybrid cars. With the help of market positioning, an organisation can differentiate itself and its products from that of the rival firms. If a customer rightly perceived Ford, then the company need not make many efforts convincing the customer why its products are better than the peers.
5. Marketing tactics
To promote its hybrid car and penetrate the Australian automobile market, Ford is all set to make use of three marketing tactics, promotion strategy, pricing strategy, and product strategy (Khan, 2014).
Ford would be promoting the strong features of its hybrid cars and making use of these strengths to create opportunities by entering the market. For promotional purposes, the organisation would be using Newspaper, radio, TV, and print media to spread the awareness among the customers about the hybrid cars and how they can benefit in reducing the pollution level. Ford would try to connect with the customer with an emotional approach. Apart from this strategy, the company can also make use of social media platforms for promoting its product. It can post ads on YouTube, Twitter, Instagram, etc., and it requires very less expenditure in contrast to traditional media. In addition to this, Ford would also be making arrangements of hassle-free loans to purchase hybrid cars and that too at a minimal interest rate. This way the company can increase its sales and revenue.
Pricing Strategy: Pricing strategy is also one of the famous tactics B2C organisations often used. Ford is well-known for offering quality services and products that too at a reasonable cost. The company is outsourcing some of its spare parts in order to optimise the cost. This would help Ford to make hybrid cars at a much lower price than its competitors. This way the company can reduce its prices and gain increase its market share. Apart from this, the company is working hard to build a strong network of small suppliers in order get good quality of material that too at a reasonable price.
Ford is known for its product strategy all around the world. The company works really hard on product development and innovation & maintenance. Some of the product strategies Ford uses are:-
- Free maintenance and servicing of hybrid cars in order to attract more and more audience.
- 24x7 free emergency assistance and mechanic on-call services for Ford customers only (Leff, et.al, 2014).
- Providing them with genuine and friendly services.
6. Challenges in the marketing study
- One of the common problem associated with the market study is to decide the methodologies for data collection. One can do it by using social media platforms, collecting feedback from customers (Grönroos, 2013).
- Data collected from the marketing study may have some biasedness.
- Another problem is privacy and security issues. The secondary data is to be taken from government authorities which they may deny due to security issues.
- Lack of integrity of the data collected from the marketing studies.
- Data quality is another issue associated with the market study.
7. Recommendations and conclusion
- While launching the hybrid cars in the Australian Automobile market, Ford should consider the middle-income group people to be the target audience. It should be tailored according to the needs of such an economic class.
- Instead of delivering the cars through the dealers or agents, the company should encourage direct dealing with customers.
- Carrying out R&D in order to update the products and make them eco-friendly and cost-effective.
- The company should emphasise more on "one product one price" approach. This would improve the company's image.
- For cost-cutting, the company should make use of old cars and recycle them to produce new hybrid cars. This way the company can manufacture new cars at a lower rate and can offer the same at a lower price to the customer.
Here, the importance of the marketing strategies and other aspects related to marketing in the context of Hybrid Cars of Ford Australiawas outlined. The report elaborated on the 5Cs concept of the company. In addition to this, it also discussed the marketing research towards customer satisfaction, role of distributors, and threats from competitors. Apart from this, the report also outlined the marketing strategy followed by Ford. Furthermore, the 7Ps of marketing strategy was elaborated. Before the conclusion, some challenges and recommendations were listed down in the context of Ford.
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