The following essay covers the behind the curtain action that goes into the successful production and sale of a product in relation to Ford Motor Company. Ford Motors Company, one of the greatest automobile manufacturers in the world, has been in the business of manufacturing vehicles and motor parts in response to various consumer needs.
The material herein looks into exactly what goes into their successful production and how they have remained relevant ever since Ford Motors Company was established in late 19th century. It explains what influences the decisions they make and why they have found success in expanding and increasing their target markets.
Ford Motor Company is a multinational automaker based in Michigan, USA. It is involved with large-scale manufacture of cars and employs a large workforce. It has large manufacturing operations in various developed countries. Ford Motor Company has been a large car manufacturer with plans underway to produce electric vehicles as well as hydrogen fuelled vehicles. They have been known to improve their products over time. For example plans of producing more fuel efficient cars are underway.
History of Ford Motor Company
Henry Ford was born in what is today Dearborn Michigan in July 1863. At age sixteen he left home for Detroit city where he worked as an apprentice machinist for three years. Over the next few years he worked occasionally in a Detroit factory besides operating and repairing steam engines and helping with farm work at home. He married in 1888 and began to run a saw mill.
In 1891 he became an engineer with Edison Illuminating Company where he was promoted to Chief engineer in 1893. He then began experimenting on internal combustion engines and in 1896 he came up with his own self propelled vehicle, the Quadri-cycle. As such he was one of the pioneers of the motorist generation.
Henry Ford incorporated the Ford Motor Company in 1903 after two failed attempts at establishing an automobile manufacturing company. He was the vice-president and chief engineer of the company. His big break came in 1908 when he introduced the Model T. It was a huge success and by 1918 fifty percent of the cars in America were Model Ts. Ford Motor Company became the largest automobile manufacturer worldwide greatly due to its manufacture of the Model T. (Banham, 2002)
The company has grown massively since then to this day.
Ford Motor Company Products
Ford Motor Company is the fifth largest automaker in the world and the second biggest in the United States of America. Ford mainly manufactures automobiles (cars) and motor parts. Their products are stylish and possess quality performance motor parts. Among the popular products are ford power train products. These include remanufactured gas and engine assemblies, driver train components, transmission components, engine components and clutch kits.
Ford also manufactures accessories for the purposes of personalizing their cars. Accessories range from electronics, bed products, interior, exterior, appearance, wheels and air conditioning all in a wide range of variety. Maintenance appliances like chemicals and lubricants including coolers lubricants and cleaners are another major production by Ford Motor Company.
Ford products include the parts that are finally assembled to make a vehicle and parts that are related to vehicle maintenance. All parts ranging from hoses, fuel pumps switches, starters, steering, spark plugs ignition, belts brakes that are required during the usage of a vehicle are part of Ford products.
The main products however are cars, that is, trucks, SUVs, Hybrids and Crossovers and cars. Their more popular brands are the Mercury, The Lincoln and the Volvo.
Ford has manufactured a wide variety of automobiles to suit as many consumers, demographic and personal needs as possible. Different Ford car models target different age groups, income ranges, lifestyles and demographic areas. They also base their variations on different workloads, efficiency and performance and style.
Their variation in accordance to different consumer needs, tastes and preferences has been their best marketing strategy so far. They have catered for consumer preferences in relation to performance, price and style.
Another marketing strategy that has worked for them is manufacturing different brands each unique in its personality to cater for different target markets. This way they outshine other companies that only produce one brand that targets a specific target market.
Ford invests heavily on research and advertising and responds positively to the feedback. They stay updated on changing market trends, change in tastes and preferences and consumer’s satisfaction or dissatisfaction with their products. As a result they understand different levels of demand in different demographic areas and are able to supply accordingly.
Ford in general views every person as a potential client. Their products are designed to suit most if not all consumer needs, be it price, style, performance or quality.
The marketing mix strategy
In general Ford has made perfect use of the marketing mix strategy popularly known as the 4 Ps of marketing. These four Ps stand for product, price, place and promotion which is what the various brands and models by Ford Motor Company is about. These are the four crucial ingredients in Sales and Marketing.
The product usually refers to anything produced with the purpose of consumer satisfaction. It therefore has to take into consideration the consumer’s need, taste and preference. This is the most important component of this marketing strategy as it is the reason for the strategy in the first place. The product therefore has to be innovatively and tastefully packaged as it is considered the ‘bait’ of the company. It has to appeal to consumers physically and spark their interest when they first encounter it. Ford has taken care of this by tasteful branding and quality production.
Price here is used to refer to the amount of money a consumer is willing to spend on a product. Price determination usually is the hardest of the four Ps. Price determination takes into consideration cost of production, price of related products, geographical location, the target market’s living standards etc. Ford has dealt with this issue creatively by ranging their prices in accordance to brand and model to cater for different income groups.
Place involves the distribution process from the point of production to final consumption by the consumer. It involves availing the right product at the right place at the right time and at the right quantities. The point here is to avail the product to the consumer when it is needed and whichever distribution channel that is used is based on this consideration. Ford deals with this by being strategically located worldwide in most if not all major cities and responding fast to consumer needs when they arise.
Promotion involves publicizing the product and creating awareness on the availability and function of the product. Promotion is essential in providing information on the product and in ‘wowing’ consumers. The most obvious way would be advertising the product. However other ways such as free samples, pamphlets and coupons, and open days are essential especially for new potential consumers. Packaging is also a popular way of promotion. Ford has successfully created awareness on their multiple products through advertising and differentiated packaging.
Challanges with the marketing mix strategy
It is a major challenge to use the right blend of the four ingredients of marketing in the marketing mix strategy. This strategy is especially useful for new products. It however does not cater for change in consumer taste and preferences, competition and emergence of equally good or better substitutes. The success of this strategy is based on a couple of assumptions that may or may not be the case. One assumption is that the market does not change especially in taste and preferences. This assumption more than any other cannot be constant. Change in market trends is actually what is constant.
Producing quality products that are consumer pocket friendly as well as profitable to the producer is a difficult balance to strike. A lot of things are taken into consideration besides production cost and mark up. Prices of substitutes, demographic location and consumer purchasing power have to be taken into consideration. Price determination usually is the hardest to arrive at since it is a major determinant of whether or not sales and profits are maximized especially when introducing a new product to the market.
The idea of selling more at a cheaper price most of the time does not work especially if production is quality. Tough decisions regarding price have to be made eventually and arriving at a constant price takes time.
Improvement on price strategy
An important step towards determining price is conducting thorough research over a period of time. The research should shed light on how much consumers in different age groups and of different living standards are willing to spend on quality products. Usually it is very detailed with issues like what level of quality they are willing to forego in order to pay less, or how much income they are willing to sacrifice to buy quality products. It also indicates what target markets are indifferent to performance and quality as compared to price and vice versa. (Didd, 1996)
The truth is it is not possible to have a universally acceptable price to every consumer, but it is possible to find a combination that works for the company. For example a company may consider lowering a considerably valuable quality product to a lower price to attract low income earners. This may work if they accept the price or may not work if they do not consider it low enough to spend on in which case the producer is better off retaining high prices and targeting high income earners who are willing to pay.
However, this can only be determined through research.
A lot of strategy goes into maintaining and growing a company’s profitability and in remaining relevant in the market. The obvious production, marketing, selling and logistics strategies are important but the challenge is in the detail. Details such as price determination, target markets and maintaining relevance in a consumer market are the trick. Finding the right profitability versus risk ratio is also important.
For a company like Ford Motor Company to get to where it is today a lot of marketing and operational strategy has been applied. It is imperative to sustain this position which is not easy, what with the ever changing marketing trends, economic fluctuations and increased competition. It calls for improved technology every short while and manpower improvement over time. Ford has managed to sustain quality production over the years, improvement with changing market trends, company overall growth over time and relevance in the market through the years. Seeing as change is the only constant in business and life in general, it is important that a company be able to adapt accordingly by always being flexible and better still a step ahead.
Ford Motor Company has managed to deliver in tune with need and utility over the years despite emergence of numerous substitutes, and with correct strategy should not find it difficult to stay afloat.