Essay on "Ford Motor Company Competes in the Automobile"

Essay 4 pages (1258 words) Sources: 2 Style: Harvard

[EXCERPT] . . . .

Ford Motor Company competes in the automobile manufacturing and marketing business. Competition in this industry is intense for several reasons, and because of this Ford must compete both on price and on innovation. Ford markets a wide range of passenger vehicles and as a result segments the market extensively. Each product is built based on market research to meet the needs of particular segments. This requires a strong marketing effort, in part because product development itself must be driven by market research. Ford is also beginning to move towards building the Ford brand overall, after a time when the company focused on marketing each car individually.

There are several keys to success for Ford. They must develop innovative attractive products that consumers want. They must be able to produce and distribute their vehicles in a cost-effective manner and sell sufficient volumes to cover fixed costs. Currently, Ford's breakeven point is $359 billion, and they are only selling $146 billion. Thus, the company is losing billions of dollars each year. To address this, management has embarked on an aggressive program to increase sales, improve margins and reduce costs. There are several critical issues facing Ford at present, including the economy, Ford's finances and its pension debt obligations.

Ford's marketing mix has traditionally been focused on distribution and sales, through its dealer networks. The company has shifted in recent years, however, towards stronger branding, increased research and has placed more emphasis on other aspects of the marketing function. The dealer network remains critical, however, not just for distribution but also as a source of feedback. Ford also makes extensive use of traditional feedback and market research techniques in order to assist in product development and the development of advertising campaigns.

Ford has also shifted some of its controls, in order that once-regional marketing efforts are more global in nature. The company has also brought its dealer networks into the marketing plan, after years of relatively acrimonious relationship with that key stakeholder. The company's marketing, however, remains geographically focused in its structure, something they will need to alleviate in order to truly become global. However, there is little flexibility for Ford due to their financial circumstances. As such, the new strategy is without any evidence of contingency planning.

5.0 Controls

Ford has revamped the corporate controls on its marketing program. Prior to this year, the company had very little global control of marketing. Each region put together its down marketing strategy. One of the outcomes of this was that products developed for one region often did not translate well to other regions. In effect, Ford had to duplicate its efforts for every region in the world. In recent years, the company has been moving forward with the 'One Ford' initiative that, in part, is designed to eliminate some of this needless duplication.

To this end, the firm has created the position of Director of Global Marketing, Sales and Service Operations, under the VP of Marketing and Communications (Reuters, 2009). This role was established as a control mechanism to bring more consistency to Ford's global marketing strategies. Agencies within Ford's marketing apparatus will be integrated to bring control closer to Detroit than it has been in the past.

As another point of control, the company has brought in outsiders to head its marketing division in recent years. The last two VPs of Marketing both came from Toyota (Gardner, 2009). The shift to outsiders is an attempt to break the familial corporate culture at the company. The instillation of new ideas and methods brings more accountability to Ford's marketing division. This is integral to their plans because they are moving away from operational structures, at least in terms of marketing, that have stood for decades. The old system may have been too… READ MORE

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