Strategies That Ford Uses to Appeal to Different Consumers

Ford Motor Company: New Car Sales

Q1. Provide a description of the product/service and a brief history of the firm. When was Ford established, where, how many different Fords automobiles are there, what are sales revenue?

Ford Motor Company was established in 1903, 117 years ago. The founder was Henry Ford and headquarters were set up in Dearborn, Michigan. In Detroit, Ford began producing its first automobiles. Its first big successes were the Model T (1910-1927) and the Model A (1927-1931). In 2019, Ford sold 5.4 million vehicles to dealers and distributors around the world (Statista, 2020). Ford currently has 28 different models in production, ranging from the Ford Fiesta to the Ford Medium Duty Truck. Some of its most popular models, however, are the F-150, the Mustang, the Explorer, and the Focus. In short, Ford has something for every type of consumer: the sports car lover, the truck enthusiast, the cost-conscious commuter, the SUV driver, and so on. Compared to other brands, Ford holds up well and is very competitive.

Ford’s vehicles appeal to a range of consumers. Consumers interested in specialty vehicles will be interested in the F-Series trucks or the Mustang. Those interested in SUVs will look into Ford’s SUV production line. Those interested in sedans will look at the Focus. Ford is also venturing into the EV space with its Mach-E Mustang, which uses a battery-powered motor. Thus, Ford has created a line of products meant to satisfy different types of consumers.

Q2. Describe and discuss the cultural, social, personal, and psychological factors that influence the purchase of the Ford vehicles.

The cultural factors that influence the purchase of Ford vehicles are related to utility (what the purpose of the vehicle is), class status (what the vehicle says about the individual), and principles (Is the vehicle good for the environment? Is it American-made? Is it the best in its class?). The social factors that influence the purchase of Ford vehicles include what one’s social circle is doing. For instance, if one works in construction or lives in the rural US, it is more likely that such a person will be influenced by peers to buy a Ford F-Series.

If a person has friends who are into racing, the Mustang will likely have some appeal. If a person has friends who are into economy class sedans, the Focus or Fiesta will be seen as appealing. If a person’s clique is interested in EVs, the Mach-E will have appeal. Personal factors that influence the decisions include how much one is willing to spend, what one likes based on one’s own personal tastes—speed (Mustang), room for a family (SUV), hauling (truck), economy (sedan). Psychological factors that influence the purchase of the Ford vehicles include issues such as what one is looking address in one’s own mind—something about one’s identity, about one’s ambitions, about one’s sense of direction in life; is one dealing with a mid-life crisis and in need of a Mustang, or is one trying to be more practical and thrifty and thus purchase a Fiesta? The psychology of the consumer of Ford vehicles depends also upon their social environment and whether buying a car is something to be seen as compulsive or impulsive or rather something that is more thoughtful (Neuner, Raab & Reisch, 2005).

Q3. Explain the needs that are met for each of Ford’s target markets.

With the Fiesta, Ford is targeting young people and ladies, who want practicality, no frills, and affordability (Beirao & Cabral, 2007). With the Focus, it is a similar target market, though the needs of the consumer who would buy the Focus are going to be driven more towards the need to be able to fit multiple people in the car without difficulty while also being able to conserve on gas. The needs of those who would be in the target market for the Mustang are going to center on having something fun, sporty, compact and attractive to drive. The needs of those in the target market for an SUV are going to relate to the desire for comfort, security, and room for small ones or for luggage for long trips. The needs of those in the target market for the Mach-E are going to be related to the desire to have the latest in electronic performance automotives, battery tech, and concern for the environment or cost-efficiency. The needs of those in the target market for the F-Series are going to be related to issues of dependability, strength, endurance, and lifting abilities.

For this reason, Ford is able to address the needs of numerous target markets by providing numerous different types of vehicles. Each vehicle is sensitive to the particular needs of the target market—whether it is young Millennials looking for a practical, first-time buy, or older construction workers looking for the best truck on the market. Ford understands its consumers and knows what to give to them.

Q4. Explain how potential global markets will be evaluated for potential entry. Discuss the most likely mode or modes of global market entry.

Global markets have already been evaluated for potential entry by virtually every industry, as sales plateau in the developed world. Producers are looking at China and India and Africa because the populations here are so large. India and China alone have the biggest populations on the planet; however, they are both extremely nationalistic and the people there are more likely to buy from a local producer than from an international car maker like Ford (Ishii, 2009; Varman & Belk, 2009).

Thus, when it comes to evaluating markets for potential industry, Ford is looking at a number of factors: what are competitors doing in the target market? What are the consumers looking for in terms of a car or truck that Ford can satisfy? What are the costs associated with shipping or building products in the target market? For example, BMW builds some cars in South Africa and this allows the company to service that region. Ford has plants in South America, Europe, and Asia. Where it does not have much of anything happening is northern Africa. It does have two plants in South Africa, but Africa has a large population, and Ford could consider Nigeria for a potential market as the nation is on an economic rise in recent years.

Another part of the problem is that though Ford would be seen as a foreign brand, it does not have the luxury status that other foreign brands have, such as BMW or Mercedes. For Ford to be appealing in Asia or Africa, therefore, it would have to be appealing against the locally produced cars, such as Tata Motors in India. Yet Tata has such a big following in India and is so affordable that Ford would have to differentiate itself by emphasizing quality. Unfortunately, the quality of Ford craftsmanship and service has dropped off in recent years and it is no longer a point which Ford can rely upon to build brand equity. Ford must therefore evaluate global markets by assessing whether it has the resources to adapt its products to meet the local needs of the consumers in that region.

Q5. Describe the variables (demographic, psychographic, and behavioral) used to segment the firm’s target markets. Explain how the Ford evaluates the attractiveness of each identified market segment.

The variables used to segment the firm’s target markets are age, gender, region, interests (hobbies), education, work, personality, values, opinions, attitudes, beliefs, lifestyles, purchase behavior, brand loyalty, frequency of purchase (whether the person would be up for a lease or not), benefits the person requires. Ford must look at all these variables when it designs a product model for a specific target market. Ford evaluates the attractiveness of each identified market segment by conducting a simple cost-benefit analysis: Can the company create a product and sell it to that market segment at a reasonable cost and stand to make a reasonable profit? Would the product scale across segments? These are the questions the company would ask when evaluating the attractiveness of a market segment.