Tuesday, January 17, 2006

Ford Motor is finding its marketing way

The Ford Company has always been more sales-driven than marketing-driven.
Ford’s legacy (the invention of the auto assembly line) has been overshadowed by its “creative marketing.”
If we look at its branding, Ford went through the following slogans: “No Boundaries” which lasted less than 2 years; “If You Haven't Driven a Ford Lately, Look Again” which lasted 2 years and the current “Built for the Road Ahead.”
Ford changes or tinkers with its ad slogan and brand strategy every 18 months or so, as executives change jobs in and out of finance, operations, sales, and marketing.
But that is not the only reason – to quote the newly appointed President Mark Fields: “advertising and even brand strategy at Ford has been viewed as somewhat disposable.”

This resulted in one of Ford’s main problems: customers don’t seem to get what Ford passenger cars are all about anymore.
Especially the Ford Five Hundred sedan and Freestyle crossover SUV/wagon should have substantially replaced the Taurus.
These cars should have successfully competed with the Honda Accord and Toyota Camry, which have been the best selling four-door sedans in the U.S. for several years.
The failure of the Five Hundred and the Freestyle was not only due to poor branding, but also due to poor product quality.

As independant marketing consultant Dennis Keene, who works with consumer-product companies, phrased it: “These cars were exercises in packaging rather than design, and precisely reflect why Ford's designers need sustained brand strategies to guide them”.

Ford paid a hefty price for its poor marketing and branding – it affected the bottom line.
Year-over-year sales declined 9% in December 2005 - its fourth consecutive monthly drop. For the first time in 19 years, Chevrolet outsold Ford in 2005.
Ford saw its domestic market share fall to 15.6%, down almost five percentage points since 2001.
As a result, Ford stock closed at $8.01 a share on Jan. 4, almost half what it was when Bill Ford took over four years ago.

Ford realized that it had to shape up and get back on track.
The company had lost touch with its customers, more specifically its car customers.
Marketing cannot provide the proverbial silver bullet, but can formulate and implement a strategy to revitalize Ford's main brands of Ford, Lincoln, and Mercury, and a stronger emphasis on development of new products.

On January 23, Ford will announce a detailed plan for growth, dubbed “The Way Forward”, which will include positioning and branding the Ford Company as “American and innovative”. The company wants to capture American “values, culture, and optimism” in its designs.
On the product level, Ford is planning to launch new models in segments where the automaker has been largely absent.

Sales-driven Ford is smart to realize that marketing is the answer.
By analyzing its customers’ needs, adjusting existing products and developing new ones in accordance with the customers’ demands, Ford will (re)position and brand both the company and its products.
If Ford will be able to execute its new positioning, and put emphasize on marketing and branding, it will see its sales increase and (ceteris paribus) its stock go up.

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