Download - Ford Auto Collection
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MARKETING MANAGEMENT CASE STUDY :
Auto CollectionFord’s Better Idea for Selling Cars
and Trucks
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Ford Motor Company
• 4th largest auto maker founded by Henry Ford in 1903
• Ford Motors- strong market position
• 1990s- Lowest costs & high quality in the US Automobile industry
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Industry scenario prior to Auto Collection
• Customers dissatisfied with the process of buying a vehicle; sellers didn’t pay heed to the customer’s needs.
• Sales people had tactics to lure customers into paying more.
• Limited usage of Ford dealerships for non warranty repairs.
• Sales strategy of Saturn(division of GM) was different from it’s competitors.
• Customers were unhappy with Ford’s dealerships and Ford’s ability to change dealer’s behaviour was limited.
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Auto Collection and its emergence
• Consolidating Ford dealers in a market in a single liability company(FIECo).
• Objectives• Cost reduction
• Service enhancement
• Brands•Ford
•Lincoln
•Mercury
•Mazda and Jaguar (occasionally)
• Also on agenda: Satellite light-service-only locations(garages)
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Operating Model adopted by Ford
1. IT/ Technology :a) Development of an intranet.b) Construction of customer loyalty database.c) Prediction system for vehicle sales.
2. Organisation Structure : a) Each location had a head sales manager and head service manager.b) Sales and service managers reported to central collection management.
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Central Collection Management
Collection head of
sales
Collection head of service
Chief Executive
Officer
Chief Operating
OfficerHR Coordinator
Chief Financial Officer
c) Role of Collection Management was to:i. Oversee Operationsii. Create Strategyiii. Facilitate sharing of information across the locations
3. HR :d) Selecting appropriate individuals and putting them in the right positions.e) Training programme.f) HR managers tried to influence change among the employees.
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4. Marketing :a) Initial focus of marketing was introducing the Auto Collection
concept and explain its benefits; Current plans included base of written materials and media communication and more targeted campaigns.
b) Website for each Auto Collection.c) Development of customer relationship centres.
5. Other changes:a) Price: One price selling. No negotiations.b) Processes: Low pressure sales; Everything was to be customer
friendly.c) Compensation: Based on number of vehicles sold, not profit made
on price of each vehicle.d) Costs: Savings from economies of scale; increase in cost due to
increase in employee benefits.
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Changes
Radical
• Dramatic change- sales & profits declined
• Quick; but high risk
• If benefits highlighted effectively-- will create a bigger pool of prospective buyers.
Evolutionary• 3- step process
• Slow & steady; less risk; time-consuming
• Reduced market resistance
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Introduction of Auto Collection has made Ford market responsive
Scenario Before Response through Auto Collection
Customers were dissatisfied with the process Efforts to increase customer satisfaction by of buying a vehicle. charging fair prices, providing better services etc.
Customers usually didn’t find what they were Greater selection; customers had various looking for . brands and options to choose from
People rarely used Ford Dealerships for Services were promised to be customerservicing their vehicles . needs driven low pressure.
Customers were usually confused by quoting ‘One price policy’ was now adopted.a low price in advertisements.
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Karishma Sehgal
Sunayana Sen
Thank You