INDUSTRIAL REPORTON

FORD MOTOR

CHAPTER 1

INTRODUCTION

Today’s society is warm with urbanization and demonstration effect. With a

view towards it, there are drastic changes coming up in all sectors even in the

automobile industries. The following information gives an insight about it.

In the present context the companies operate on the principle of natural

selection – “Survival Of The Fittest”. Only those companies will succeed which at

best match to the current environmental imperatives – those who can deliver what

people are ready to buy. But real marketing does not involve the art of selling what

the manufacturers make. Organizations gain market leadership by understanding

consumer needs and finding solutions that delight consumers. If customer value and

satisfaction are absent, no amount of promotion or selling can be compensate.

Hence the aim of marketing is to build and manage profitable customer relationship.

This is a part of the strategic marketing done by every company to achieve it

objectives and goals. To maximize the profits and longterm plans every organization

has to follow a strategic planning.

Marketing is much more than just an isolated business function – it is a

philosophy that guides the entire organization towards sensing, serving and

satisfying consumer needs. The marketing department cannot accomplish the

company’s customer relationship-building goals by itself. It must partner closely with

other departments in the company and with other organization throughout its entire

value – delivery network to provide superior customer value and satisfaction. Thus

marketing calls upon everyone in the organization to “think customer” and to do all

they can to help build and manage profitable customer relationship. Marketing is all

around us, and we need to know that it is not only used by manufacturing

companies, wholesaler and retailers, but also by all kinds of individuals and

organizations

There are four major, powerful themes that go to the heart of modern

marketing theory and practice, they are:

1. BUILDING AND MANAGING PORFITABLE CUSTOMER RELATIONSHIPS.

2. BUILDING AND MANAGING STRONG BRANDS.

3. HARNESSING NEW MARKETING TECHNOLOGIES IN THIS DIGITAL AGE.

4. MARKETING IN A SOCIALLY RESPONSIBLE WAY AROUND THE GLOBE.

What marketing is what it does and what it offers?

“Marketing is a social and managerial process whereby individual and groups

obtain what they need and want through creating and exchanging products and

value with others.”

“Marketing management is the process of planning and executing the

conception, pricing, promotion and distribution of ideas, goods and services to

create exchanges that satisfy individual and organizational goals.”

“Marketing offers some combination of products, services, information, or

experiences offered to a market to satisfy a need or want”

Marketing is an orderly and insightful process for thinking about and planning

for markets. The process starts with researching the market place to understand its

dynamics. The marketer uses research methodologies to identify opportunities, that

is, to find individuals all groups of people with unmeet needs or latent interest in

some products or service.

The marketing process consists of the following:

1. Analyzing marketing opportunities.

2. Developing marketing strategies.

3. Planning marketing programs

4. Managing the marketing efforts.

Before taking any decision and achieving the goals, it has to make

analysis of what to do, how to do, when to do, where to do and who is to do it.

This is nothing but strategic planning. Goals indicate what a business units

wants to achieve whereas strategy is how to get there.

Marketing strategies in simple terms are the complete and unbeatable plans

designed specifically for attaining the marketing objectives of the firm. Marketing

can be called as a game plan for achieving its goals. Strategy choice will depend

on whether the firm or the marketer plays the following roles:

Market leader

A challenger

A follower

A nicher

The identification of objectives, both in quantitative and qualitative terms, is an

essential backdrop to strategy formulation. Goals have a quality and time frame

attached to them. These are typically spelt out in terms of financial return, market

share, market presence, etc.

Thus, the concept of market oriented strategic planning arises with the link

between the products the link between the products the manufacturer is dealing in

and the market conditions. In this direction, our study deals only with the marketing

strategies i.e. promotional strategies of the Ford automotives.

OBJECTIVES

Primary Objective:

To know the influence of various Marketing Strategies, Promotional Activities

towards the customers of four wheelers(cars).

Secondary objective:

To know the effective factors for preferring 4 wheelers(CARS)

To know the factor of awareness of the cars.

To Study and analyze the Promotional Strategies of Ford

To know whether the customers are satisfied with the offers given by the

dealer.

To know which kind of offers can attract the new customers.

To find the area to be improved

To find out satisfaction of the customers.

To find the reasons for the dissatisfaction

To study the channel levels involved in the promotion of Ford

TO study and analyze the customer's perception regarding the

usefulness/utility of Ford cars.

TO study and analyze the distributors perception regarding the

promotional and distributional strategies of Ford.

INDUSTRIAL PROFILEINDUSTRIAL PROFILE

One of the fastest growing industries in the world is automobile industry. This

automobile industries even has its influence on the Indian market. Probably

automobile industries occupy a large market share in the worlds market as well as in

the Indian market. Nearly 18% of the total national income is being incurred from the

automobile industry. From this we can estimate how important is the automobile

industry in the improvement of GDP of a country. In India automobile industry has a

growth rate is at the average of 10-12%.

INDIAN AUTOMOBILE INDUSTRY SINCE 1947:INDIAN AUTOMOBILE INDUSTRY SINCE 1947:

Its fascinating drive through history, which begins as a story of isolation and

missed opportunities to one of huge potential and phenomenal growth.

India’s fixation with socialism and planned economies had a crippling impact

on the automotive industry in its formative years. The goal at that time for

independent India was self-sufficiency. Issues like quality and efficiency were simply

not considered.

Dependence of foreign technology was banned and manufacturers were

forced to localize their products; import substitution became the order of the day.

Though we learnt to localize, the cars we made were all outdated designs with little

or not improvements for decades. The automotive industry stagnated under the

government’s stifling restrictions and the Indian car buyer was saddled with cars of

appalling quality and even then there was a waiting list that at one point stretched to

eight years!

This attempt at self-reliance failed miserably because of the industry’s

isolation from the best technology. The Japanese and later Korean auto industries

were also highly protected in their formative years but they never shut the door on

technology. Instead, they relentlessly tapped the best talent pools in the world to

absorb the know-how to produce good cars.

One of the most important chapters in the Indian automotive industry’s history

was written by Maruti. It marked the Indian government getting into the far business

in the early 1980’s, a radical shift in thinking after decades of treating cars with

disdain. The Maruti 800 went on to become the staple car of India and put a nation

on wheels. This little car set a benchmark for price, size and quality and structured

India as small car market.

It wasn’t till 1993 that things really started to change for the Indian car buyer.

With the liberalization of the economy, a host of international carmakers rushed in.

But most of them were in for a shock as Indian customers rejected their product.

Indian customers refused to allow the glitter of prestigious brands blind them to the

outdated and overpriced products they were offered. The Indian consumer wanted

super value, and rewarded the brands that delivered it, handsomely. Hyundai and

Maruthi delivered, and profited.

The period also saw the emergence of the Indian players like Tata Motors and

Mahindra & Mahindra. They rose to the challenge of the MNC’s and responded

brilliantly with the Indica and the Scorpio. This was ironically due to the license raj

that forced Indian carmakers to be innovative and develop products frugally. India’s

frugal engineering skill has now caught the world’s imagination, and an increasing

number of carmakers are preparing to setup major capacities here.

India is changing. And changing fast. It’s moving forward. India’s largest-

selling car is not its cheapest car, the 800. It is the Alto. People’s aspirations are

rising and so are their mistakes, have got their finger on the pulse of the market. Get

the right product and the rewards are handsome.

The Indian auto industry is today bubbling with promise and confidence. It’s

been a long journey but to see where the Indian car industry is going. We have to

see where it has been.

AUTOMOBILE INDUSTRY IN PRE-INDEPENDENCE:

The first motorcar on the streets of India was seen in 1898, Bombay had it

first taxicabs by the turn of the century. In 1903, an American company began a

public taxi service with a fleet of 50 cars. For about 50 years after car arrived in

India, cars were directly imported.

Before World War I, around 40,000 motor vehicles were imported. During the

years between the wars, a small start for an automobile industry was made when

assembly plant were established in Bombay, Calcutta and Madras.

The import/assembly of vehicles grew consistently after the 1920s, crossing

30,000 units by 1930. It was during the end of the war that the importance of

establishing an indigenous automobile in India was realized. Premier Motors,

Hindustan Motors and Mahindra & Mahindra set up factories in the 1940s for

progressive manufacture rather than assembly from imported components. The cars

they chose to make were the latest in the world when they were introduced in India

in the formative years of the industry.

POST- INDEPENDENCE:

The government clamped down on imports and foreign investments.

Companies like GM and Ford packed their bags and left. India’s clock, thereafter,

stood still while the world raced on ahead. It would take nearly 50 years before the

Indian auto industry could catch up with the rest of the world again.

BROADBANDING ERA:

In January 1985, the government announced its famous ‘broad banding’

policy which gave new licenses to brad groups of automotive products such as two

and four-wheeled vehicles.

Through a liberal move, the licensing system was very much intact. A

manufacturer had to submit a phased-manufacturing programme to the Ministry of

Industry specifying the indigenization progress and allowing for almost complete

indigenization within five to seven years. The biggest hurdle was the foreign-

exchange clearance required for these projects. Except for MUL, which had direct

access to policy-makers, every other manufacturer still faced a series of obstacles.

Several new products were launched during this period. All three traditional

carmakers added new models to their ranges – Standard Motors returned to the car

business after 10 years, when in 1985 it introduced the Standard 2000, a Rover SD1

body with the old two-litre Vanguard engine. HM bought in a 1972 Vauxhall Victor in

1985, transplanted its ageing Ambassador engine into it and the Contessa was born.

THE BIRTH OF THE AMBASSADOR:

In 1957, a small tail fin was added on either side of the rear fenders, along

with a new, dimpled hood, and the car was re-christened the Ambassador Mark I.

The car cost Rs.17,000. In 1963, it underwent a frontal facelift with a closely

checkered grille and was named the Ambassador Mark II. It would be another 12

years before the Ambassador got a facelift. In 1975, another minor facelift to the

same grille and a much bigger frontal facelift turned out as the Mark III. The Mark IV,

launched in 1979, was the last of the Mark cars.

The Ambassador Nova was launched in 1990, followed by

Ambassador 1800 ISZ three years later. The Nova was the last Ambassador

powered by the 1489cc petrol engine. In 2004, HM launched the cosmetically-

revised Ambassador under the Avigo name. Designed by Mavendra Singh, the retro

look Avigo had classic touch internals like a centrally mounted console, beige-

colored seats and wood finish interiors.

THE CONTESSA YEARS:

The Hindustan Contessa, launched in 1982, was one of the few luxury cars

manufactured in the country in the 1980s and 1990s. It was based on the 1970s

vintage Vauxhall victor. While it was initially launched with the 1489cc engine found

in the Ambassador, the Contessa was soon given the Isuzu engines. There were

three versions of this car - 1.8GLX (Isuzu petrol), 2.0DLX (Isuzu diesel) and the rare

2.0T (Isuzu diesel, turbo). The last Contessa rolled out in 2002, phased out by the

demand for cheap Japanese cars.

Some of the leading Indian auto players in Indian automobile industry are:

Premier, Tata Mahindra and Mahindra Maruthi Hindustan motors

Premier:Premier:

The story of premier is the story of one mans vision, Seth Walchand

Hirachand. He not only give India its first car factory but also the country’s first

aircraft factory – Hindustan Aeronautics Limited and the country’s first modern ship

yard, Hindustan Shipyard Limited

Building India’s first auto factory

Seth Walchand Hirachand has first started the trails to establish an Indian car

manufacturing plant in Indian for which he went to U.S.A. where three largest car

manufacturing companies are located. He wants Indian company to be completely

independent, with Indian management capital and employees, paying royalty or

technology transfer payment to western countries.

After approaching General Motors they insisted on part ownership. Seth

Walchand then moved to second largest automaker Ford; Henry agreed, but

delegated the project to Ford of Canada, which refused. Finally the third largest

automaker Chrysler agreed and singed in an agreement in Bombay in 1940.

The arrival of FIAT:

In 1951, PAL singed up with Fiat to assemble the Fiat 500 in India. In 1952,

the tariff commission spelled out future for the auto industry – indigenize or get out.

Companies like Ford and GM, which had assembly operations in India, packed their

bags and went home. But fiat decided to stick it out and committed itself full-fledged

manufacture of the Millicento in 1954. In sep 1964, PAL and FIAT launched the Fiat

1100 DELITE in India.

The biggest customers for PAL’s were Bombay’s taxi drivers. The Padminies

were easy for maintenance in terms of spares and labour cost, low on running cost,

easy to drive and reasonably tough. It was everything that a taxi driver wants.

TATA Motors:TATA Motors:

Established in 1945, Telco or the Tata Engineering and Locomotive

Company, as its full name suggests, started out making steam locomotives for the

Indian Railways. Telco’s tryst with vehicle manufacture came in 1945 when it signed

a 15-year agreement with Daimler-Benz AG of Germany to manufacture commercial

vehicle. The director in charge from the Tata side was Sumant Moolgaonkar.

This period was a shared birthing time for the Indian commercial vehicle

industry – Premier Automobiles in league with Chrysler, Hindustan Motors with

General Motors and Ashok Leyland with British Leyland – which all started truck

production around the same time.

Telco’s biggest triumph came in 1985 in the LCV segment. The Tata 407, a

brand new product from bumper to tail-light, was designed and marketed by Telco to

take on the technically superior Japanese products. The 407 immediately captured

70 per cent of the market.

The TATA SUMO, launched in 1994, turned out to be the success story of the

decade. The Sumo was conceptually a brilliant vehicle. And it was also a product of

the government’s eccentric excise duty regulations at that time.

1998 was a landmark year for Tata – it launched the Tata Safari. Unlike the

Sierra, Estate and Sumo that were designed and developed using rudimentary

manual methods, the Safari was made with modern manufacturing and design

processes to ensure new-found levels of quality and to take the company a step

closer to its ambition of becoming a global carmaker.

Yet, the most important landmark of 1998 was not the Safari. On 30

December 1998, Tata officially launched the much-awaited Indica. 2001 also saw

the company exit its joint venture with Daimler-Benz. In 2002, Tata launched the

Indigo saloon, based on the Indica platform. On 29 July 2003, J R D Tata’s birth

anniversary, the company was renamed Tata Motors Limited. The Tata juggernaut

continued to roll across the Indian auto industry with the launch of the Indigo Marina

in 2004.

MARUTHI:MARUTHI:

It began with the promise of being the ‘People’s Car’. The car never went into

production and the company went belly-up in 1977. Six years later, it rose like a

phoenix from the ashes and changed the Indian automotive sector forever. The

company – Maruthi Udyog Limited. The story of Maruthi dates back to the 1970’s.

Indira Gandhi was the prime minister of India. Her son, Sanjay Gandhi, envisioned

the manufactured of an indigenous cost-effective, low-maintenance compact car for

the Indian middle-class. The Cabinet passed a unanimous resolution for the

development and production of a ‘People’s Car’. The name of the car was chosen

as ‘Maruti’

MANAGEMENT PROFILE:MANAGEMENT PROFILE:

ARVIND MATHEW – Managing Director and President

Arvind Mathew is the Managing Director and President of Ford India. He took this position in August 2005.

 

LUCY MILLAR – Vice President, Finance & IT

Lucy is the Vice President of Finance and IT at Ford India. She took up this position in May 2005. She reports to Arvind Mathew, President and Managing Director, Ford India.

SCOTT McCORMACK – Vice President, Marketing, Sales & Service

Scott McCormack is the Vice President, Marketing, Sales and Service at Ford India. He took this position in July 2006. Scott reports to Arvind Mathew, President and

Managing Director, Ford India.

 NANCY REISIG – Vice President, Human Resources

Nancy Reisig is Vice President, Human Resources at Ford India. She took this position in March 2005. Nancy reports to Arvind Mathew, President and Managing Director, Ford India.

.

History

Henry Ford (ca. 1919)

Ford was launched in a converted factory in 1903 with $28,000 in cash from twelve

investors, most notably John Francis Dodge and Horace Elgin Dodge who would

later found the Dodge Brothers Motor Vehicle Company. During its early years, the

company produced just a few Model T's a day at its factory on Mack Avenue in

Detroit, Michigan. Groups of two or three men worked on each car from components

made to order by other companies. Henry Ford was 40 years old when he founded

the Ford Motor Company, which would go on to become one of the largest and most

profitable companies in the world, as well as being one of the few to survive the

Great Depression. The largest family-controlled company in the world, the Ford

Motor Company has been in continuous family control for over 100 years.

FORD IN INDIAFORD IN INDIA::

Ford started its innings with the Mahindra-Ford joint venture formed in 1994,

which produced the Escort out of M&M Nashik plant. After meeting initial success,

sales of the Escort was finally replaced by the Ikon in 1999.

The Ikon marked a new beginning for Ford in India. It rolled out of the

Marajmalaingar plant near Chennai and by now, the company had parted ways with

M&M and was renamed Ford India Ltd in 1998. The Ikon was the first model by a

multinational to be developed specifically for India. Though it was based on the

Fiesta, it was a unique body style and was offered and was offered with an option of

three engines, including a diesel. The car was a big hit. The Ikon underwent several

face-lifts and price cuts to keep demand high. However, fresher competition and a

reputation for high-maintenance saw sales gradually decline. After the arrival of the

modern and highly-capable Fiesta, another made-for-India car, with state-of-the-art

engines, the Ikon has been marginalized. The Fiesta has picked up where the Ikon

left and is selling well.

Though the Ikon and Fiesta have been the mainstays of Ford’s production in

India, the company has had limited success with other models. The Mondeo,

launched in 2001, was a very talented car by was simply not suited to Indian

conditions and earned a reputation for being exorbitant to maintain.

The Endeavour SUV was launched in early 2004 and has sold well for its

niche. The Endeavour has recently been upgraded in 2007 and this has boosted the

appeal of the big SUV. In 2004, Ford launched the Fusion, which has received a

lukewarm response though the recent diesel variant has perked up sales.

Fortune FordFortune Ford is an authorized dealer for Ford India Limited, who are one of

the leading manufacturers of top quality cars in India, with many variants in the

offering.

Fortune Ford is a 50:50% Joint Venture set up between two well known and

reputed families in Hyderabad, the Modis and the Babu Khans. Fortune Ford is a

blend of experience and youth. The experience and good will that Mr. Misbahuddin

Babu Khan and Mr. Pramod Modi enjoy blend very well with the youth and energy of

the youngsters Bashir, Ashish, Nirav and Siraj to make Fortune Ford a truly world

class Ford Dealership.

Fortune Ford markets and services the recently launched truly European

Ford Fiesta, the ever-popular Ford Ikon Flair, the No non-sense car Ford Fusion and

the macho SUV the Ford Endeavour through its sales and service outlets at

Hyderabad. The sales outlet is located strategically at Somajiguda next to Eanadu.

We have two service centers, one at Chapel Road, Abids opposite Stanley College

and other one at Fathebagh, Santhnagar. These centrally located outlets provide

convenient and easy access to both the proud owners as well as prospective buyers.

The workforce at Fortune Ford is committed to excellence in serving all esteemed

customers.

The Sales Team is made up of dedicated showroom and field executives who

are professionally trained by Ford India Limited. They are adept at guiding the

customer through the entire sales process right from assisting in the choice of model,

colour and features to lending a helping hand in providing attractive buyback options

and also arranging finance at competitive rates.

The Service Centre is armed with the state-of-the art equipment and is in-line

with Ford's exacting Global standards. The service team is technically qualified and

trained to analyze and provide solutions adhering to Quality Care, in order to satisfy

even the most demanding customers.

The Fortune Ford dealership maintains a high standard of excellence in

sales and services by sending its personnel for training on a regular basis to Ford

India Limited, to update them with the latest technological advances in the

automotive sphere.

FORD MISSION AND VISION

Mission

Metro Ford will strive to provide a pleasant buying experience to all our

prospective Customers, from the time he / she expresses the interest to

purchase a Ford Car till the Car of his / her choice is delivered in perfect

condition. To provide after-sales-service which is prompt, efficient, convenient

and reasonable to ensure Customer’s delight. To provide a congenial working

environment to all Employees along with fair compensation and other welfare

benefits.

Vision

Metro Ford will keep in pace with Growth Plan of Ford India in providing the

required Sales and Service infrastructure for the convenience of prospective

Customers. To achieve the Customer Satisfaction and Market Share

objectives of Ford India in the Segment and in the Areas of operation.

 

CHAPTER 2

SWOT ANALYSIS

Ford Motor Company (Ford) is one of the largest automotive manufacturers in theworld. The company's automotive vehicle brands include Aston Martin, Ford, Jaguar,Land Rover, Lincoln, Mazda, Mercury and Volvo. The company manufactures anddistributes automobiles in 200 markets across six continents. The Ford Asia, Africaand Ford Mazda operations recorded strong performance in fiscal 2005. Strong FordAsia, Africa and Ford Mazda could prove to be a significant revenue and profit driverin the coming years. Intense competition from Japanese companies, however, couldlead to further deterioration in the North American operations of Ford.

Strengths WeaknessesStrong Ford Asia, Africa and Ford Mazda operations Weakening North American automotive operations

Growing Ford Europe and PAG operations Tarnished brand image

Profitable financial services division Large unfunded pension and other obligationsOpportunities ThreatsThe way forward plan Rising raw material prices

Hybrid vehicles Increasing competition

Opportunities in India and China Low capital spending

Strengths

Strong Ford Asia, Africa and Ford Mazda operations

The Ford Asia, Africa and Ford Mazda operations recorded strong performance infiscal 2005. Revenues from Ford Asia, Africa and Ford Mazda reached $8,245 million

in 2005, up 18.5% over 2004. More importantly, this segment recorded an incomebefore taxes of $297 million in fiscal 2005, up from $82 million in fiscal 2004. StrongFord Asia, Africa and Ford Mazda could prove to be a significant revenue and profitdriver in the coming years.

Growing Ford Europe and PAG

The Ford Europe and Premier Automotive Group (PAG) recorded strong revenuegrowth in fiscal 2005. The Ford Europe and PAG primarily include the sale of Ford-brand vehicles in Europe and Turkey as well as sale of PAG brand vehicles (Volvo,Jaguar, Land Rover and Aston Martin). Revenues from Ford Europe and PAGreached $60,258 million in 2005, up 11.3% over 2004. Ford Europe and PAGaccounted for 34% of total revenues. Growing Ford Europe and PAG has enabled the company to offset revenue decline in the Americas division.Profitable financial services division The financial services division, Ford MotorCredit, is largely responsible for keeping the company afloat. In fiscal 2005, thefinancial servicesdivision has recorded income before taxes of $5,891 million, upfrom $5,008 million in fiscal 2004. In contrast, the automotive division recorded lossbefore taxesof $3,895 million in fiscal 2005, up from $155 million in fiscal 2004. As aresult, the company was able to record a net profit of $2,024 million in fiscal 2005. Inrecent years, the problems of automotive division have adversely affected the creditrating of the financial services division. This has forced the financial services divisionto resort to securitizing of retail auto loans, auto leases and lines of credit to cardealers on its books for raising money. As a result, revenues of this division have fallen in recent years. Yet financial services division continues to remain profitable. Ford Motor Credit continues to offset losses of the automotive operations and enablesthe company to remain in black.

Weaknesses

Weakening North American automotive operations

Ford's automotive operations in North America recorded a weak performance in fiscal2005. Revenues from automotive operations in North America fell by 2.4% toapproximately $80,600 million in fiscal 2005. Furthermore, automotive operations inNorth America recorded a loss before taxes of $2,500 million in fiscal 2005, ascompared to an income before taxes of $684 million in fiscal 2004.

The weakening of automotive operations in North America is due to competition fromJapanese companies and a market shift away from fuel-guzzling light trucks such assports utility vehicles toward more fuel efficient vehicles. Ford relies more on trucksales than other vehicle manufacturers. Truck sales accounted for 67.2% of its US

vehicle sales, whereas in case of most other vehicle manufacturers, truck salesaccount for only 56% of total vehicle sales. Stagnating truck sales in the US, onaccount of high fuel prices, has hurt Ford more than the others. Japanese competitorssuch as Toyota have also taken market share away from Ford. The company's shareof the US light vehicle market, the largest in North America, has fallen from 19.3% infiscal 2004 to 18.2% in fiscal 2005. Ford's automotive operations in North Americaaccounted for about 45.5% of total revenues in fiscal 2005. Any continued weakening of automotive operations in North America would adversely affect the financial and market position of the company.

replacing 13 million tires made by Bridgestone/Firestone. In 2001, Ford recalled newEscape sports utility vehicle five times in four months owing to quality issues DuringJanuary 2005, Ford recalled about 792,000 pickup trucks and sport utility vehiclesbecause of a fire risk from overheating of the speed control switch. According to aleading consumer magazine, an eight year old Toyota is as reliable as a three year old Ford with 54 problems per 100 vehicles. Tarnished brand image has negativelyimpacted Ford's sales in the US.

Large unfunded pension and other obligations

Ford has significant unfunded pension, health care and life insurance obligations. Bythe end of 2005, Ford's total pension obligations, including the US and non-US plans,totaled $74,595 million, while pension assets (US and non-US) totaled $63,784million, which resulted in unfunded pension obligations of $10,811 million. Total healthcare and life insurance obligations of Ford stood at $39,274 million at the end of 2005,while the plan assets stood at $6,497 million, resulting in unfunded health care and lifeinsurance obligations of $32,777 million. Unfunded pension, health care and lifeinsurance obligations would negatively impact the cash flow position of the company.

Opportunities

The way forward plan

In the beginning of 2006, Ford launched a restructuring plan to improve theperformance of its automotive business in North America. This plan aims to make

theNorth American business more customer-focused, product-driven and efficient. TheNorth American capacity is likely to be realigned to match demand, with 14manufacturing facilities to be idled, resulting in significant cost savings and reducedemployment of 25,000-30,000 employees. Capacity will be reduced by 1.2 millionunits, or 26% by 2008, which represents a majority of actions within the restructuringplan's 2006-2012 period. 'The way forward plan' focuses on restoring Ford's NorthAmerican automotive operations to profitability by 2008.

Hybrid vehicles

By 2010, more than half of Ford, Lincoln and Mercury products are expected to switchover to hybrid electric engines. Ford is planning to expand its capacity to produce upto a quarter of a million hybrid vehicles a year. Demand for hybrid vehicles isincreasing worldwide owing to stringent emission standards, higher fuel prices andgrowing environment-consciousness. Hybrid engines are more fuel efficient and lesspolluting than conventional gasoline and diesel engines. Ford's focus on hybridelectric vehicles could help in turning around its North American operations.

Ford reinforced its commitment to the Indian market during 2005 by launching theFord Fiesta. While in China, Ford sales were up 46% in 2005. China and India areexpected to drive global demand for light vehicles through much of this decade. Lightvehicle production in China is expected to increase from 4.3 million units in 2005 to7.7 million units in 2010 while light vehicle production in India is forecast to increasefrom 1.4 million units to 2.5 million units during the same period. Growing vehiclemarkets in India and China would provide an opportunity for the company to diversifyits revenues.

Threats

Rising raw material prices

Steel prices, after declining by about 30% in 2005, have stabilized, but could rise tohigher levels if industry consolidation continues. The price of hot rolled steel coil rosefrom $386 per ton in January 2004 to a high of $653 per ton in November 2004 andthereafter fell to a low of $493 per ton in July 2005 owing to de-stocking in inventoriesand changeover of China from a net importer to a net exporter. Since then steel priceshave stabilized and recovered some of the lost ground. Hot rolled coil prices

averaged$579 a ton during the first four months of 2006. Demand outlook for steel hasstrengthened in recent months owing to pick up in global industrial production andrestocking due to low inventory levels. Hot rolled coil prices are expected to average$572 a ton in 2006. Ongoing industry consolidation in the steel industry, however,could push prices to higher levels. In June 2006, for instance, Arcelor merged withMittal Steel to form the largest steel company in the world. High crude oil prices havealso led to an increase in polymer prices. Plastic materials are used extensively in the automotive industry. Oil prices reached as high as $78.4 a barrel during July 2006. Recovering steel prices and rising polymer prices could adversely affect thecompany's profit margins.

Increasing competition Ford's market share in the US light vehicle market has declined from 22.8% in 2001 to 18.2% in 2005 thanks to competition from Japanese companies among other reasons. Ford is facing intense competition from Japanese vehicle manufacturers such as Toyota and Honda. Toyota's share of US light vehicle market has risen from 10% in 2001 to 13% in 2005, while Honda's share has improved from 6.9% in 2001 to 8.4% in 2005. Nissan, another Japanese competitor, improved its market share from 4.1% to 6.2% during the same period. After establishing a strong market position in the passenger cars segment, Japanese companies are now eyeing the lucrative light trucks segment. Toyota, for instance, is aggressively pursuing market share in the light trucks segment through its Tundra range of trucks.

Japanese companies could lead to further deterioration in the North Americanoperations of Ford. Low capital spending Ford's capital spending, including research and development expenditure, is lower than its competitors, which could affect its competitiveness going forward. In 2005, Ford's capital spending was $1,766 per vehicle, as compared to Honda's $3,193 per vehicle and Toyota's $2,937 per vehicle. Consequently, Ford would be able to replace only 59% of its existing vehicle range with new models during 2006-2009, while Honda would replace 93% of its existing vehicle range with new models during the same period. Toyota, meanwhile, is poised to replace 90% of its existing product range during 2006-2009. An aging vehicle range would adversely affect growth prospects of Ford.

CHAPTER 3

Marketing strategy and analysisMarketing strategy and analysis:

A marketing strategy is a process that can allow an organization to

concentrate its limited resources on the greatest opportunities to increase sales and

achieve a sustainable competitive advantage.

Any organization that wants to exchange its products or services in the market

place successfully should have a Strategic Marketing plan to guide the allocation of

its resources. A strategic marketing plan usually evolves from an organization’s

overall corporate strategy and serves as a guide for specific marketing programs and

policies. Marketing strategy is based on a situation analysis- a detailed assessment

of the current marketing conditions facing the company, its product lines, or its

individual brands. From this situation analysis, a firm develops an understanding of

the market and the various opportunities it offers, the competition and the market

segments or target markets the company wishes to pursue.

Marketing strategy is the complete and unbeatable plan, designed specifically

for attaining the marketing objectives of the firm/business unit. The marketing

objectives indicate what the firm wants to achieve; the marketing strategy provides

the design for achieving them.

For example, if the marketing objectives of a business unit stipulate that next

year, it should achieve a sales revenue of Rs. 1,000 crore and a net profit of 15

percent of sales revenue, it is the job of marketing strategy to indicate how and

wherefrom this sale and profit will come, which product lines/products/brands will

accomplish this task and how.

Marketing strategy forms an integral part of marketing planning. A marketing

strategy is most effective when it is an integral component of corporate strategy,

defining how the organization will successfully engage customers, prospects, and

competitors in the market arena. It is partially derived from broader corporate

strategies, corporate missions, and corporate goals. As the customer constitutes the

source of a company's revenue, marketing strategy is closely linked with sales. A key

component of marketing strategy is often to keep marketing in line with a company's

overarching mission statement.

MARKETING AND PROMOTIONS PROCESS MODEL:

Development of marketing program requires an in-depth analysis of the

market. This analysis may make extensive use of market research as an input into

the planning process.

Marketing

Strategy and Target marketing Market planning analysis process program development target market

promot-ion to

final buyer

Opportunity analysis

Competitive analysis

Target

Product decisions

Pricing decisions

Channel of distribution decisions

Promotional decisions

AdvertisingDirect

marketingInteractive

marketingSales

promotionPublicity and

public relations

Personal selling

Ultimate consumer

Consumers Businesses

Identifying markets

Market segmentation

Purchase

Promotion to trade

This input, in turn, provides the basis for the development of marketing

strategies in regard to product, pricing, distribution and promotion decisions. Each of

these steps requires a detailed analysis, since this plan serves as the road map to

follow in achieving marketing goals. Once the detailed market analysis has been

completed and marketing objectives have been established, each element in the

market mix must contribute to a comprehensive integrated marketing program. Of

course, the promotional program element must be combined with all other program

elements in such a way as to achieve maximum impact.

Formulating the marketing strategy:

Basically, formulation of marketing strategy consists of three main tasks:

1. Selecting the target market,

2. Positioning the offer,

3. Assembling the marketing mix.

This implies that the essence of the marketing strategy of a firm for a

given

product or brand can be grasped from the target market chosen, the way it is

positioned and how the marketing mix is organized. The target market shows to

whom the unit intends to sell the products; positioning and marketing mix together

Opportunity analysis

Competitive analysis

Target

Product decisions

Pricing decisions

Channel of distribution decisions

Promotional decisions

AdvertisingDirect

marketingInteractive

marketingSales

promotionPublicity and

public relations

Personal selling

Selecting & Target

marketing

Positioning through marketing

strategies

Resellers

show how and using what uniqueness or distinction, the unit intends to sell. The

three together constitute the marketing strategy platform of the given product.

SELECTING THE TARGET MARKET:SELECTING THE TARGET MARKET:

To say that target market selection is a part of marketing strategy

development is just stating the obvious. It does not fully bring out the import of the

inseparable likage between the two. When the selection of the target market is over,

an important part of the marketing strategy of the product is determined, defined and

expressed.

Marketing targeting simply means choosing one’s target market. It needs to

be clarified at the outset that market targeting is not synonymous with market

segmentation. Segmentation is actually tee prelude to target market selection. One

has to carry out several tasks besides segmentation before choosing the target

market.

Through segmentation, a firm divides the market into many segments. But all

these segments need not form its target market. Target market signifies only those

segments that it wants to adopt as its market. A selection is thus involved in it.

Marketing segmentation is a process that throws up not one but several

market segments. There may be segments that are sizeable and the ones that are

not so sizeable. There may be segments assuring immediate profits and the ones

that call for heavy investments in market development. There may also be segments

that show great potential, but display tough barriers to entry. As such, the question,

which segment/segments, the firm should select as its target market, assumes

crucial importance.

STRATEGIC MARKET SEGMENTATION:

Market Segmentation is “dividing up a market into distinct groups that (1) have

common needs and (2) will respond similarly to a marketing action”, which was said

by Eric N.Berkowitz, Roger A.Kerin, and William Redulius.

The Segmentation process involves five distinct steps:

Finding ways to group consumers according to their needs.

Finding ways to group the marketing actions – usually the products offered –

available to the organization.

Developing a market-product grid to relate the market segments to the firm’s

products or actions.

Selecting the target segments toward which the firm directs its marketing

actions.

Taking marketing actions to reach target segments.

Markets can be segmented using several relevant bases. For example,

demographic characteristics of consumers, such as age, sex, income/purchasing

capacity, education level etc, form one base for segmentation. Geographic

characteristics constitute another; and buying behavior of the consumers forms yet

another base.

The various types of segmentations are

Geographic segmentation

Demographic segmentation

Psychographic segmentation

Buyer behavior

Benefits segmentation

Volume of purchase segmentation

POSITIONING:POSITIONING:

Positioning is a platform for the brand. It facilitates the brand to get through to

the target consumers.

It is defined as “the art and science of fitting the product or service to one or

more segments of the broad market in such a way as to set it meaningfully apart

from competition.”

Positioning is the act of fixing the locus of the product offer in the minds of the

target consumers. In positioning, the firm decides how and around what parameters,

the product offer has to be placed before the target consumers. The significance of

product positioning can be easily understood from David Ogilvy’s words: “The

results of your campaign depends less on how we write your advertising than on how

your product is positioned”.

Definitions of product positioning:

Sengupta, in his book Brand Positioning says, “ The aim of product positioning is

to create a perception for our brand in the prospect’s mind so that it stands apart

from competing brands… we must cover that space in the consumer’s mind as if we

had won a long-term lease. We must find a strong position in that mind and sit on

it….”

Micheal Rothschild, in his book Marketing Communications – From

Fundamentals to Strategies says, “Positioning refers to the place a brand occupies

in the mind in relation to a given product class. This place was originally a product-

related concept…. Concerning market structure. The concept now refers to the

place that the brand holds in the consumer’s mind related to perceptions and

preferences”.

Developing a Positioning Strategy:

To create a position for a product or service, Trout and Ries suggest that

managers ask them selves six basic questions.

1. What position, if any, do we already have in the prospect’s mind?

2. What position do we want to own?

3. What companies must be outgunned if we are to establish that position?

4. Do we have enough marketing money to occupy and hold the position?

5. Do we have the guts to stick with one consistent positioning strategy?

6. Does our creative approach match our positioning strategy?

PRODUCT POSITIONING AND BRAND POSITIONING:

It is essential to understand the relationship between products positioning and

brand positioning. Though in discussions, the two terms are synonymously and

interchangeable used, technically they are different.

Product positioning denotes the specific product category/product class in

which the given product is opting to compete. And brand positioning denotes the

positioning of the brand viz-a viz the competing brands in the chosen product

category.

It is evident that for any product, before entering the market it has to

sequentially carry out the two exercises, product positioning and brand positioning.

In the first step, the product category where the new entrant should enter and

compete, i.e. against what all products it has to compete, has to be decided. In this

step, it is the broad function that the product is trying to serve that matters. This

choice of product category will decide the nature of the competition the product is

going to face. Once product category positioning is decided, the position for the new

entrant against competing brands in the chosen product category has to be analyzed

and fixed.

ISSUES IN PRODUCT POSITIONING:

Where is the new offer going to compete? As what?

Which product function/customer need is it trying to meet?

What other product categories serve this need? In other words, what

are the substitute products that serve the same need?

Where is the real gap, where is such a new offer most welcome and

wanted by the market?

What are company’s competencies to fight here?

ISSUES IN BRAND POSITIONING:

In deciding the Brand positioning, the issues are:

Which are the competing brands in the chosen product category?

What are the unique claims/strengths of the various brands?

What position do they enjoy in consumer’s evaluation and perception?

What is the most favoured position…? And yet vacant?

Can the new brand claim the needed distinction and take the position

and satisfy the need?

The major dimension of marketing strategy relates to positioning of the offer.

The firm has already selected the target market and decided its basic offer. Now,

what is the conjunction between these two entities? How do they get connected?

What is the interface?

In other words.

What is the locus the firm seeks among the customers in the chosen targer market

with its offering?

How would the firm want the consumer to view and receive the offer?

These are the issues the firm has to grapple with in positioning. And, while

formulating the marketing mix too, the firm will agitate over these issues. The

Product Differentiation and Positioning discusses the multifarious issues involved in

the subject.

PRODUCT REPOSITIONING :

Products do undergo ‘repositioning’ as they go along their life cycle. In some

cases, even products that are fairing well are repositioned. This is done mainly to

enlarge the reach of the product offer and to increase the sale of the product by

appealing to a wider target market. The product is provided with some new features

or it is associated with some new target segments.

PROMOTIONAL DECISIONS:

Promotion has been defined as the coordination of all seller initiated efforts to

set up channels of information and persuasion in order to sell goods and services or

promote an idea. While implicit communication occurs through the various elements

of the marketing mix, most of an organization’s communications with the market The

basic tools used to accomplish an organization’s communication objectives are often

referred to as the promotional mix.

The promotional mixThe promotional mix

Advertising:

Advertising is defined as any paid form of non personal communication about

an organization, product, service, or idea by an identified sponsor. The paid aspect

of this definition reflects the fact that the space or time for an advertising message

generally must be bought. An occasional exception to this is the public service

announcement, whose advertising space or time is donated by the media.

Advertising is the best-known and most widely discussed form of promotion,

probably because of its pervasiveness. It is also very important promotional tool,

particularly for companies, whose products and services are targeted at mass

consumer markets.

It is a very cost-effective method for communicating with large audiences. It

can be used to create brand images and symbolic appeals for a company or brand.

Direct Marketing:

One of the fastest-growing sectors of the U.S. economy is direct

marketing, in which organizations communicate directly with target customers to

generate a response and a transaction. It has become such an integral part of the

IMC program of many organizations and often involves separate objectives, budgets,

and strategies, we view direct marketing as a component of the promotional mix.

Direct Marketing is much more than direct mail and mail order catalogs. It

involves a variety of activities, including database management, direct selling,

telemarketing and direct response ads through direct mail, the Internet, and various

broadcast and print media.

One of the major tools of direct marketing is direct response advertising,

whereby a product is promoted through an ad that encourages the consumer to

purchase directly from the manufacturer.

Advertising Direct marketing

Interactive/

internet marketing

Sales promotion

Publicity/

Public relations

Personal selling

Interactive/Internet Marketing:

Interactive media allow for the back-and-forth flow of information whereby

users can participate in and modify the form and content of the information they

receive in real time. Unlike traditional forms of marketing communications such as

advertising, which are one-way in nature, the new media allow users to perform a

variety of functions such as receive and alter information and images, make

inquiries, respond to questions and of course make purchases. In addition to the

Internet, other forms of interactive media include CD-ROMs, Kiosks, and interactive

television.

Sales Promotion:

The next variable in the promotional mix is sales promotion, which is generally

defined as those marketing activities that provide extra value or incentives to the

sales force, the distributors, or the ultimate consumer and can stimulate immediate

sales, sales promotion is generally broken into two major categories:

Consumer-oriented and

Trade-oriented activities

Consumer-oriented sales promotion is targeted to the ultimate user of a

product or service and includes couponing, sampling, premiums, rebates,

contests, sweepstakes, and various point-of-purchase materials.

Trade-oriented sales promotions are targeted towards marketing

intermediaries such as wholesalers, distributors and retailers.

Publicity/Public Relations:

Publicity refers to non personal communications regarding an organization,

product, service, or idea not directly paid for or run under identified sponsorship. It

usually comes in the form of a news story, editorial or announcement about an

organization and its products and services. Like advertising, publicity is not directly

paid for by the company.

An advantage of publicity over other forms of promotion is its credibility.

Another advantage of publicity is its low cost, since the company is not paying its

time or space in a mass medium such as TV, radio or newspapers.

Public relations are defined as “the management function which evaluates

public attitudes, identifies the policies and procedures of an individual or organization

with the public interests and executes a program of action to earn public

understanding and acceptance”. Public relations generally have a broader objective

than publicity, as its purpose is to establish and maintain a positive image of the

company among its various publics.

Personal Selling:

It is a form of person-to-person communication in which a seller attempts to

assist and persuade prospective buyers to purchase the company’s product or

service or to act on an idea. Unlike advertising, personal selling involves direct

contact between buyer and seller, either face-to-face or through some form of

telecommunications such as telephone sales. Personal selling involves more

immediate and precise feedback because the impact of the sales presentation can

generally be assessed from the customer’s reactions.

ASSEMBLING THE MARKETING MIXASSEMBLING THE MARKETING MIX:

Assembling the marketing mix means assembling the four Ps of marketing in

the best possible combination. Involved in this process are the choice of the

appropriate marketing activities and the allocation of the appropriate marketing

effort/resources to each one of them. The firm has to find out how it can generate

the targeted sales and profit. It considers different marketing mixes with varying

levels of expenditure on each marketing activity and tries to figure out the

effectiveness of different combinations in terms of the possible sales and profits. It

then chooses the combination/mix of products, price, place and promotion that is

best according to its judgment.

Since marketing is essentially an interaction between the marketing mix and

environmental variable, and since the latter and non-controllable, marketing

becomes synonymous with assembling and managing the marketing mix. Of course,

while assembling the marketing mix, the marketing manager will take due note of the

environmental variables. Not only will he take due not of them, he will ensure that

his marketing mix suits the environmental variables. And, its it factor that renders tha

task much more complex.

MARKEGING MIX: THE SOLE VEHICLE FOR CREATING AND DELIVERING CONSUMER VALUE

The four elements mentioned above- product, distribution, promotion and

pricing constitute the marketing mix of the firm. The marketing mix is the sole

vehicle for creating and delivering customer value.

It can be easily seen that all activities and programmes, which a marketer

designs and caries out in his effort at winning customers, relate to one or the other of

the above four elements- product, place, promotion and pricing. It can also be seen

that in each of these elements, there are several sub-elements. For example,

packaging is one of the sub-elements of product and warehousing is one of the sub-

elements of distribution.

The Four Ps of Marketing:

It was James Culliton, a noted marketing expert, who coined the expression

marketing mix and described the marketing manager as a mixer of ingredients. To

quote him, `The marketing man is a decider and an artist – a mixer of ingredients,

who sometimes follows a recipe developed by others and sometimes prepare his

own recipe. And, sometimes he adapts his recipe to the ingredients that are readily

available and sometimes invents some new ingredients, or, experiments with

ingredients as no one else has tried before.

Subsequently, Niel H.Borden, another noted marketing expert, popularized

the concept of marketing mix.

It was Jerome McCarthy, the well-known American professor of marketing,

who first described the marketing mix in terms of the four Ps. He classified the

marketing mix variables under four heads, each beginning with the alphabet “P”.

Product

Place

Price

Promotion

McCarthy has provided an easy-to-remember description of the marketing mix

variables. Over the years, the terms – Marketing mix and Four Ps of marketing

have come to be used synonymously.

Assembling and managing the marketing mix is the crux of the marketing

task. And, it is through the marketing mix that the marketing manager achieves

the marketing objectives.

MARKETING STRATEGIES FALL UNDER TWO CATEGORIES:

We have seen that target market selection, positioning and marketing

mix formulation together constitute marketing strategy. We have also seen that a

firm can assemble the marketing mix elements in many different ways, depending on

the relative weightage it assigns to the different elements. The scope to carve out

different combinations is, in fact immense. As a result, business firms are able to

employ an abundance of strategies and strategy stances in their relentless race to

stay ahead of competition. However, a close scrutiny will reveal that all these

strategies can be fitted into two broad categories

1. PRICE ORIENTED MARKETING STRATEGY

2. DIFFERENTIATION ORIENTED MARKETING STRATEGY

In other words, there are only two broad routes available for forging marketing

strategies: any strategy has to be ultimately either a price-oriented strategy or a

differentiation-oriented strategy.

PRICE ORIENTED MARKETING STRATEGYPRICE ORIENTED MARKETING STRATEGY:

Firms taking to the price route in marketing strategy compete on the strength

of pricing. They use price as their competitive lever. They juggle the price of their

product to suit the prevailing competitive reality. They can afford to offer lower prices

and still make the targeted profits. They elbow out competition with the cushion they

enjoy in the matter of pricing.

Price route requires cost leadership, evidently, a firm opting for the price route

will have to have a substantial cost advantage in their operations. It should be

enjoying an overall cost leadership in the given industry and its lower cost should

enable it to secure above average returns inspite of strong competition. The cost

advantage can emanate from different factors like, scale economies, earlyu entry, a

large market share built over a period of time, locational advantage, or synergy

among the different businesses. The firms whole strategy, in fact will revolve around

building such cost advantage.

To successfully practice a price-led strategy, a firm should have consciously

taken to the idea sufficiently early in its evolutionary process and prepared itself for

adopting such a strategy.

DIFFERENTIATION ORIENTED MARKETING STRATEGYDIFFERENTIATION ORIENTED MARKETING STRATEGY:

The differentiation route of strategy revolves around aspects other than price.

It works on the principle that a firm can make its offer distinctive from all competing

offers and win through the distinctiveness. And, a firm adopting such route can price

its product on the perceived value of the attributes of the offer and not necessarily on

competition-parity basis.

Maximum scope for exploiting differentiation remains with the product. While

all the 4Ps of marketing are important elements from the point of view of strategy,

the other Ps normally go as elaborations of the offer, while the product forms its

core.

Product differentiation is of vital importance in product management and has

great potential in forgoing successful marketing strategies.

The product can be differentiated along two major planks:

1. Tangible product attributes and functions,

2. Intangible characteristics and emotional associations.

The tangible product attributes and functions are

Differentiation based on ingredients,

Differentiation based on functional value,

Differentiation based on additional features,

Packaging contributing to differentiation,

Differentiation based on Quality, Operational Efficiency, Technology, Service.

EFFECTIVE SALES PROMOTION:EFFECTIVE SALES PROMOTION:

Sales promotion consists of diverse collection of incentive tools mostly

short term, designed to stimulate quicker and greater purchase of particular

products of services by the consumer. Sales promotion is the only method that

makes use of incentives to complete the push-pull promotional strategy of

motivating the sale force, the dealer and the consumer in transacting a sale.

PPrice-Offs Offer:rice-Offs Offer:

Price-off offers refers to offering the product at lower than the normal price.

This encourages immediate sales, attracts non-users, induces product trail and

counters competition.

Premium:Premium:

Premium refers to the offer of an article of merchandise as an incentive

in or to sell the product.

Coupons:Coupons:

In order to encourage product trail, stimulate re-purchase rate and build

loyalty through news papaers.

Dealer stock display contestsDealer stock display contests:

It is a type of point of purchase advertising which uses the show

windows of the dealer for providing exposure to the sponsor’s products.

Dealer participating enthusiastically and creatively are awarded

DEFENDING MARKET SHAREDEFENDING MARKET SHARE:

While trying to expand total market size, the dominant firm must continuously

defend it current business against rival attacks. This step is very much essential for

the market leader firm because the challenger firms are constantly to exploit the

weaknesses of the leader firms.

EXPANDING MARKET SHAREEXPANDING MARKET SHARE:

Market leaders can improve their profitability by increasing their market share.

But for few market leaders whose share in the total market is insignificantly high, the

expansion of market share n the total market may be proved both as expensive and

risky. Therefore it is better for such leader firms in spending their time in building up

the market size rather than expanding the market share. The reason for this action

may be attributed to two factors:

1. The market leader firms might attract the provisions of various anti-trust

legislations. The rival competitors will try to force the Government to bring

legislations against the “MONOPOLISATION”

2. The second reason being the economic factors. The cost of making further

gains in the market share after a large share has been achieved may rise

fast and reduce the profit margin.

HARASSMENT STRATEGY:HARASSMENT STRATEGY:

The market leader firm will resort to an harassment strategy in order to

promote its market share. As a part of this strategy, the leader form might approach

the suppliers and threaten to reduce its purchases. If the latter supply the upstart

firm, sometimes it might put pressure on distributors not to carry the competitors

product. The salesman of leader firm might speak negatively about competitors. It

may also try to hire away the better executives of an aggressive firm. Sometimes,

the market leader firm will try to restrain these competitions through legal devices. It

might push legislation that would be more unfavorable to the competitors than to

itself.

The aim of defensive strategy is to reduce the profitability of attack, divert

attacks to less threatening areas, and lessen the intensity of attack. Any attack is

likely to hurt profits. But the defender’s form and speed of response can make an

important difference in the profit consequences.

There are 6 defense strategies that a dominant firm can use:

1.1. Position DefensePosition Defense ::

The basic idea of defense is to build an impregnable fortification around one’s

territory.

2.2. Flank Defense:Flank Defense:

The market leader should not only guard its territory but also erect outposts to

protect

a weak front or possibly serve as an invasion base for counter attacking.

3.3. Preemptive DefensePreemptive Defense ::

A more aggressive defense maneuver is to launch an attack on the enemy

before the

enemy starts its offense against the leader. Preemptive defense assumes that an

ounce of prevention is worth more than a pound of cure.

4. Counteroffensive DefenseCounteroffensive Defense :

Most market leaders, when attacked will respond counterattack. The leader

cannot

remain passive in the face of a competitor’s price cut, promotion blitz, product

improvement, or sales territory invasion. The leader has the strategic choice of

meeting the attacker frontally, maneuvering against the attacker’s flank, or launching

a princer movement to cut off the attacking formation from their base operation.

5.5. Mobile Defense:Mobile Defense:

Mobile defense involves more than the leader aggressively defending it

territory. In

mobile defense, the leader stretches it domain over new territories than serve as

future centers for defense and offense.

6. Contraction defenseContraction defense :

Large companies recognize that they can no longer defend all the territory.

Their

focus are spread too thin, and competitors are nibbling away on several funds. The

best course of action then appears to be planned contraction (also called strategic

withdrawal).

INNOVATION STRATEGY:INNOVATION STRATEGY:

The market leader may innovate several strategies in respect of new product

ideas, customer services, means of distribution, cost cutting discovery. In addition

to these, a leader may discourage its competition particularly challenge firm.

FORTIFICATION STRATEGY:FORTIFICATION STRATEGY:

In order to protect its market share, the market leader may try to keep it

product prices reasonable in relation to the perceived valued of the offer and

competitors offer. The leader produces it brand in a variety of sizes and firms.

CONFRONTATION STRATEGYCONFRONTATION STRATEGY:

If leader firm faces an extremely aggressive challenger, whose actions

demand a quick and direct response. In such a situation, the market leader will

engage any promotional war, engaging in a massive promotional expenditure that

the aggressive challenger cannot match. The leader firm may engage in the price

war whenever a new challenger is considering to enter in its market. This strategy

will frighten the potential competitions and make then to withdraw from entering the

market.

MARKETING STRATEGIES OF FORD:MARKETING STRATEGIES OF FORD:

Product differentiation based on operational efficiency:

FORD EXCELLING THROUGH SERVICE: Ford tries to differentiate its offer

on the plank of service. It has gone in for a new norm in customer service: “fix it

right-the first time-on time”. Ford is also supplying videotapes showing how

repairs have to be done.

Adopting Offer to Suit Target Segment:

Ford modifies its models for India:

Ford modified its models for the Indian target segments as shown below:

Higher ground clearance to make the car more compatible to the rougher road

surface in India.

Stiffer rear springs to enable negotiating the ubiquitous patholes on Indian roads.

Changes in cooling requirement, with greater airflow to the rear.

Higher resistance to dust.

Compatibility of engine with the quality of fuel available in India.

Location of horn buttons on the steering vehicles. (As the India motorist uses the

horn more frequently, for cars sold in India, the horn buttons are kept on the

steering wheel and not on a lever on the side as in the models sold in Europe.)

Strategic segmentation of cars:

The Ford in India has launched the car only for few segment of people.

The segmentation of car buyers based on price preferences are

Family car segment: These cars forms a reasonably sizeable segment of the

market (around 15 percent).

Preferred price range is from 5 lakh to 6 lakh.

‘FORD IKON’ AND ‘FORD FUSION’ come under this type of segment.

Premium car segment: This segment represents buyers who need a real

world-class car and are willing to pay the due price.

Preferred price range starts from 8 lakh to 12 lakh.

‘FORD FIESTA’, ‘FORD MONDEO’ come under this segment of cars.

SUV segment: The buyers of this segment like to have a big vehicles.

And these cars are also useful for sport riding and even on hill areas. There body is

designed similar to offroad vehicles, which can withstand to Indian roads.

‘FORD ENDEAVOUR’ occupies this segment.

Strategic Promotions by FORD:

Ford follows the promotions at two levels, they a

1) Promotions of product directly by the manufacturer.

2) Promotions at dealer level.

In the first step the products of vehicles manufactured by the Ford Automotives are

directly promoted by the manufacturer by himself. He follows many promotional

strategies like

1. Advertising through television and newspaper.

2. Internet or interactive marketing.

3. Direct marketing.

In the second step the dealer of the vehicles promotes the vehicles.

The various promotional strategies followed by the Fortune Ford at dealer are

1. Advertising though news papers, radios, palm plates. In this all the features of

the product and its prices are given in detail to the customer.

2. In televisions the scrolling are given about the product and its features.

Hoardings:

A heavy picture of the product which comprises of its attributes and special features

are displayed on the roadsides in the form of hoardings. It is a bit expensive strategy

but attracts many people who pass by that roadside.

This type of advertisement is prepared for those segments of people who

cannot afford their time in reading newspapers and watching televisions. While

travelling from their home to office, moving on their business activities they may

watch these hoardings. These hoarding are especially setup at the road signal

stops.

Maintaining Data Bank:

In this the dealer collects personal/bio-data(address and contact number) of

many people from various organizations and different sector who are ready to buy

the vehicles and who change the vehicles regularly.

These people are met-in person or contacted through their contact number.

The various new features and new offers regarding the vehicles are advocated to

them and are given discounts on group purchase of vehicles, i.e. if 5 or more friends

in the group purchase the cars at a time then they are given special discounts on the

vehicles.

Free Insurance:

The Fortune Ford gives a special offer of free insurance on the purchase of

each vehicle to its new customers.

Relationship Marketing:

Fortune Ford pays a special attention towards its old customers. To retain the

old and existing customers it conducts a corporate meet at a luxurious hotel. The

event aims at knowing the problems of the customers regarding the vehicles and

also service feedback.

In this way it maintains an effective relationship with the customers and gains

the reputation and goodwill in the minds of the customers.

Sales Promotion:

The sales promotion is done in the fortune ford at three levels:

1. Showroom sales: In this the customers walk in to the showrooms to know

about the details of the product. Specially trained sales executives who are

present in the showrooms give a detailed explanation about the product to the

customers.

Sales executives give a detailed note on the products features, various offers

given by the manufacturer and also by the dealer to the customer and enhances

the sales of the vehicles.

2. Corporate sales: A special team of sales executives are sent to some big

corporate sectors and there they personally meet the heads of the organizations

like C.E.O’s, Managers etc., and explain about the vehicles and the offers and

special schemes provided by the dealer to them on bulk purchase of the

vehicles and try to promote the sales of the vehicles.

3. Field sales: The sales executives conduct some events with the corporate

working people and try to demonstrate the product features and its benefits and

try to promote the product and increase its sales.

Conducting Customer Delight Program:

This is a unique program conducted by the Fortune Ford. This is a program

conducted to retain the old customers of the Ford. The old customers of the

Fortune Ford are meet personally and they are requested to give their feedback by

filling in the questionnaire which is specially prepared for them. In this

questionnaire their problems regarding the vehicle and also their post sale service

experience are taken. If there exists any problem, then the Fortune Ford service

men try to resolve the problems of their customers as soon as possible and makes

the customer satisfied.

This is a technique to attract the new customers by satisfying the old

customers and gaining goodwill in the market.

STRATEGIC SALES STANDARDS:

Fortune Ford maintains strategic sales standards in the following manner.

The Sales faculty is clean, tidy and inviting, making customers comfortable

while purchasing products and availing services.

Customers are courteously acknowledged within two minutes of their arrival

and are advised that a Sales Consultant will be available upon request.

The Sales Consultant’s appearance and dress will be of the highest

standards.

An advisory relationship is established between the customer and the Sales

Consultant who listens to the customer, identifies their needs and ensures

that they are met.

A pleasant, non-pressured purchase experience will be provided during which

a thorough demonstration of the vehicle features and benefits will be made.

A test drive will be offered to all customers.

Using a check list, the Sales Consultant delivers the vehicle in perfect

condition when promised.

Customers will be contacted within one week after delivery to ensure total

satisfaction.

MAINTAINING SERVICE STANDARDS:

An efficient service facility allows a customer to avail all the service

provided by Fortune Ford, in a clean and welcoming environment.

An appointment is available within 5 working days of the customer’s

request.

Customers are courteously acknowledged within two minutes of their

arrival and the write-up will begin with five minutes.

Service needs are courteously identified, accurately recorded on the repair

order and verified with the customer.

The vehicle is serviced right on the first visit.

The vehicle is ready on the agreed upon time.

A through explanation of work done, warranty coverage and charges is

given to the customer.

All service repair work will be followed up within five working days.

Each vehicle will be washed before being returned to the customer.

EXTENDED WARRANTY:

Fortune Ford gives an extended warranty to its customers where there will be an extended time duration in the warranty.

What is Extended Warranty? Factory Warranty covers only for a specific period of time/mileage. After the factory warranty expires, customer is exposed to the risk of parts

failures. This is applicable for any machine/equipment/vehicle.

Extended Warranty:

Is an extension of Factory Warranty Offers almost similar coverage as Factory Warranty Comes with a time-bound (eg. 1yr/2yrs but unlimited mileage cap) Covers all Mechanical and Electrical Failures Covers labour

Why is extended warranty needed?

Offers peace of mind motoring Protects against unexpected and non-budgeted expenses Can be transferred, hence increases the resale value.

What does it NOT cover?

Does not cover wear and tear of parts Does not cover scheduled service items Does not cover accident repairs

Benefits to customer

Protection from manufacturing and material defects Car can be repaired at any Ford out let across the country Unlimited number of claims No excess to pay One up-front payment only Inflation protection from rising costs of parts and labour All repairs carried out by qualified Ford technicians Warranty can be transferred when vehicle is sold – better resale value Total peace of mind

TOTAL MAINTENANCE PLAN

What is Total Maintenance Plan?

Cost of ownership is the key factor while considering vehicle purchases As part of regular maintenance, customers spend on

a) Maintenance parts that are to be replace at specific intervalsb) Replacement of worn out partsc) Labour charge for the above

A comprehensive maintenance plan by Ford will serve as a good tool to improve the service experience and minimize concerns on cost of ownership of the vehicle

Total Maintenance Plan (TMP) is a complete service solution provided to the customer. This enables the customer to have total peace of mind in the form of a “Maintenance Holiday”

What does it cover?

Scheduled servicing like Engine Oil change, Fuel filter, Oil filter, Spark plugs etc.

Non-scheduled maintenance like Brake Pads/Shoes, Brake Discs, Clutch Plates, Lower Suspension Arms, Shock Absorbers etc..

Mechanical/Electrical repairs Labour for all the above

What does it NOT cover?

Accident repairs Tyres

Fuel

Benefits to the customer

Total peace of mind Fixed price for next 2 to 3 years Increased residual value of the car Only Ford genuine parts are used Can avail this service across the country at all Ford authorized outlets Transferable Incase of total loss, can be cancelled Ford factory backed programme Diagnosis/repairs as per recommended standards and practices Vehicles serviced by Ford trained and certified technicians

RESEARCH METHODOLOGIES AND LIMITATIONS:

MARKETING RESEARCH :

Definition of marketing research research as approved as by the board of

directors of the association of American marketing association is:

“Marketing research is the function which links the customer and public to the

marketer through information – information used to identity and define marketing

opportunities and problems generate define and understanding of marketing as

process”.

Simply, marketing research is the systematic design collection analysis and

reporting of data finding relevant to a specific marketing situation facing the

company. Carefully planning through all stages of the research is a necessity.

Objectivity in research is all-important. The heart of scientific method is the

objective gathering of the information.

The function as marketing research with in the company as to provide the

information and analytical necessary for effective.

Planning of the future marketing activity.

Control of the marketing operation in the present.

Evaluation of marketing results.

A research may under take any of the three types of research investigation

depending upon the problem. These type of research included:

1. Basic research

2. Applied research

3. Designated Fact Gathering

BASIC RESEARCH:

It is also known as the pure fundamental research, which refers to those

studies, sole purpose of which is the discovery of new information. It is conducted to

extend the horizons on given area of knowledge with no immediate application to

existing problems.

APPLIED RESEARCH:

It is attempt to apply the various marketing technique, which have been

developed as research, first and later on they become applied research techniques.

It is on attempt to apply the basic principles and existing knowledge for the purpose

of solving operational problems.

DESIGNATED FACT GATHERING:

It refers to a research where the investigation attempts to gather some pre-

determined data.

STEPS IN MARKETING RESEARCH:

Marketing research process can be out through following steps.

Define the problems and research objectives

Develops the research plan

Collect the information

Analysis and interpretation

Present the finding.

RESEARCH METHOD:

It must be classified on the basis of the major purpose of the investigation. In

this problem description studies have been undertaken, as the objective of the

project is to conduct the market shares study to determine the share of market

received by the company to the competitor.

DATA COLLECTION:

The information needed to further proceed had been collected through

primary and secondary data.

PRIMARY DATA:

It consists of information collected for the specific purpose, survey research

was used and he all the details of Ford and their competitors were contacted.

Survey research is the approached gathering description and information.

CONTACTED METHOD:

The information was solicited by administering structured questionnaire to the

customer and dealers, thus getting to know directly from the dealers their sales

before and after sales service.

SECONDARY DATA COLLECTION:

The secondary data consists of information that already existing somewhere

having been collected for another purpose. Any researcher begins the research

work by first going through secondary data. Secondary data includes the information

available with company. It may be the findings of research previously done in the

field. Secondary data can also be collected from the magazines, news papers,

internet other service conducted by researchers.

METHODS OF DATA COLLECTION:

The basic method adopted in conducting the study is a structured

questionnaire. Questionnaire is administered on the sample respondents. How ever

there are certain cases where personal interactive method is followed with

customers to find the satisfaction level.

The Car that changed India:

The Maruthi 800 was essentially a Suzuki SS80, which was called the Fronte

in Japan and Alto in most of the other markets. The 796cc, in-line, three-cylinder

power plant produced 39.5bhp at 5500rpm.

Maruthi marked the beginning of a revolution in the Indian automobile

industry. The Maruthi 800, with its compact size, nimble handling and perky engine,

offered the Indian motorist a cheaper, friendlier alternative. On 14 th December 1983,

Harpal Singh became Maruthi’s first customer as he received the keys of his Maruthi

800 car from Prime Minister Indira Gandhi. The car cost Rs.48,000. The new

Maruthi, launched in June 1986, cost approximately Rs 15,000 more than the

outgoing model.

The new Maruthi:

In 2005, Maruthi launched the Swift, for the first time in its 20-year history.

The Swift signaled the importance of the Indian market in the world. A team of

engineers from Maruthi worked on the design of the Swift in Hamamatsu, Suzuki’s

headquarters in Japan.

Model Year of launching

Maruthi 800 1983

Maruthi Omni 1984

Maruthi Gypsy 1985

Maruthi 1000 1990

Maruthi Zen 1993

Maruthi Esteem 1994

Maruthi Baleno 1999

Maruthi Wagon R 1999

Maruthi Alto 2000

Maruthi Versa 2001

Maruthi Swift 2005

Maruthi Zen Estilo 2006

Maruthi SX4 2007

Maruthi Suzuki Grand Vitara 2007

The other cars which have their share in the Indian Auto Mobile

industry are :

The Indian auto industry has exploded in the last 14 years. And car markers

are learning some very hard truths. While the economic reforms process was kicked

of f in 1991, it was only in 1993 that the automobile industry was finally delicensed

and the restrictions were removed.

Between 1993 and 95, government regulations limited a foreign company’s

stake to a maximum of 51 percent of the equity. Hence the only method of entry for

an MNC then was through a joint venture with a local partner. The most preferred

partner was an existing automaker. In 1994-95 saw the announcement of quite a

few JV’s.

Premier and Peugeot to form PAL-Peugeot.

GM and CK Birla to form GM India.

Mercedes Benz and Tata Motors.

M&M and Ford to form Mahindra-Ford India.

In 1995, the government announced its decision to allow foreign auto

companies to enter with a 100% stake or wholly-owned subsidiaries. This changed

the dynamics of joint ventures in India.

The other automobile industries which play a crucial role in the Indian automobile

industry are:

Daewoo Motors India.

General Motors India

Mercedes-Benz

Hyundai Motors

Honda SIEL

Toyota

Skoda India

Ford Motor CompanyFord Motor Company

Type Public (NYSE: F)

Founded June 17, 1903

Founder Henry Ford

Headquarters Dearborn, Michigan, USA

Area served Worldwide

Key peopleWilliam Clay Ford, Jr - Executive ChairmanAlan Mulally - President, CEO

Industry Automotive

Products Automotive goods and services

Revenue US$120.1 billion (2006) [1]

Operating income

US$-15.0 billion (2006)[1]

Net income US$-12.6 billion (2006)[1]

Employees 283,000 (2007)[2]

Divisions

Ford CreditFord divisionLincolnMercuryPremier Automotive Group

Subsidiaries

Automotive Components HoldingsJaguarLand RoverVolvo (cars only)

Slogan

Bold MovesHave you driven a Ford

lately?Built Ford Tough

Built for Life in CanadaFeel the difference

Make Everyday Exciting

Website www.ford.com

Ford Motor Company is an American multinational corporation and the world's third

largest automaker based on worldwide vehicle sales.

In 2006, Ford was the second-ranked automaker in the US with a 17.5%

market share, behind General Motors (24.6%) but ahead of Toyota (15.4%) and

DaimlerChrysler (14.4%). Ford was also the seventh-ranked American-based

company in the 2007 Fortune 500 list, based on global revenues of $160.1 billion. In

2006, Ford produced about 6.6 million automobiles, and employed about 280,000

employees at about 100 plants and facilities worldwide. In 2007, Ford had more

quality awards from J.D Power than any other automaker.

Based in Dearborn, Michigan, a suburb of Detroit, the automaker was founded

by Henry Ford and incorporated in June 16, 1903. Ford now encompasses many

global brands, including Lincoln and Mercury of the US, Jaguar and Land Rover of

the UK, and Volvo of Sweden. Ford also owns a one-third controlling interest in

Mazda.

Ford has been one of the world's ten largest corporations by revenue and in

1999 ranked as one of the world's most profitable corporations, and the number two

automaker worldwide.

Ford introduced methods for large-scale manufacturing of cars and large-

scale management of an industrial workforce, especially elaborately engineered

manufacturing sequences typified by moving assembly lines. Henry Ford's

combination of highly efficient factories, highly paid workers, and low prices

revolutionized manufacturing and came to be known around the world as Fordism by

1914.

SHOWROOM

We have 5000 sft centrally air conditioned showroom, located in the heart of the city

in Somajiguda, adjacent to Eenadu office and just opp. to Khairtabad RTA. This

makes convenient for almost every one residing in and around Hyderabad and

Secunderabad.

The facilities offered from the showroom are :

1. Very easy finance facility with in-house finance team to cater to your every car

finance requirements. All the leading finance counters are available like ICICI,

HDFC, KOTAK, SUNDARAM, SBI, etc.

2. Exchange offer for any of your used car. Free spot evaluation for any usedcar.          

3. Professionally trained and courteous sales staff to take care of every relevant

needs of the customers.

4. Ford preferred insurance for cashless transactions in the event of claims. Special

offers on Insurance renewals. You can also renew your insurance by just making call

to our Service marketing help line 9848885962.

5.Full range of Ford cars with all colors and models to choose from.

6. A good stock of Ford genuine accessories to make your Ford ownership more

delightful and safe.

7. A well maintained fleet of test drive cars to give you the feel and experience the

drive dynamics on actual driving conditions before take the purchase decisions. You

can call our sales help line for test drive or fill the on-line test drive requisition form.

Significant milestonesSignificant milestones

The first Indian built Ford Escort rolled off the assembly line in 1996.

The Company was able to deliver Ford Escorts in seven major cities

simultaneously, in just a month after booking.

The Special Value Pack program was launched in 1997, with commemorative

'Freedom', followed by the petrol and diesel driven 'Anniversary'. Recent

SVPs have included the Orion, Alpha and Sport - E.

Ford Escort won the J D Power Award in India Quality Survey in 1997.

Ford topped the Customer Satisfaction Index (CSI) ratings in 1997 and 1998,

in the Customer Satisfaction Survey.

QualityCare, Ford's branded service initiative, provides car owners with

superior services at its dealership countrywide.

The new, integrated manufacturing plant was dedicated in March 1999, where

FORD IKON is manufactured.

Ford India launched Ford Assured on April 24 2000, a new initiative to buy

and sell used cars of all makes.

On September 11, 2000. Ford India launched the Ford IKON SXi – the stylish ‘josh’ machine

Ford India has started exporting Ford IKON

2001 Ford India launched the Ford Mondeo.

2002

Ford India show cases a wide spectrum of exciting cars at the Auto Expo Ford India Limited announced a strategic partnership with Hindustan Motors

Limited (HML). Certified QS 9000: 1998, 3rd edition on March 21, 2002 Ford India received

the QS 9000 award from TÜV Süddeutschland. New Ikon Variant 1.6 EXi was launched

2003:

The New Ford Ikon NXT launched - The Next Level of Josh. Adding Refinement to Josh- Ford India launches Ikon NXT ‘Finesse.’ Ford Celebrates Centennial in India. Ford India launches Ikon NXT SXi. Ford India Ranks Highest in J.D. Power India Sales Satisfaction Study. Ford launches Ikon Flair at Rs. 4.95 Lakhs.

2004: Autocar SUV of the Year – Winner Ford Endeavour.

2007:

FORD Motor Company of Southern Africa achieves three wins and two seconds on this year total economy run

DOE AWARDS FORD two grants for vehicle fuel efficiency research . FORD MONDEO IS AUTO EXPRESS car of the year. LAND ROVER DISCOVERY 3 scoops category win at TOWCAR AWARDS

2007 FORD MONDEO is the Caravan Club TOWCAR of the year 2008 . 

SANDIP SANYAL – Vice President, Supply and Total Value Management

Sandip Sanyal is the Vice President, Supply and Total Value Management (TVM) at Ford India. He took this position in September 2005. Sandip reports to Arvind Mathew, President and Managing Director, Ford India.

CHAPTER 4CHAPTER 4

ORGANIZATIONAL STRUCTUR

organigational structure refers to the way that an organization arranges people

and jobs so that its work can be performed and its goals can be met. When a

work group is very small and face-to-face communication is frequent, formal

structure may be unnecessary, but in a larger organization decisions have to be

made about the delegation of various tasks. Thus, procedures are established

that assign responsibilities for various functions. It is these decisions that

determine the organizational structure.

In an organization of any size or complexity, employees' responsibilities typically are

defined by what they do, who they report to, and for managers, who reports to them.

Over time these definitions are assigned to positions in the organization rather than

to specific individuals. The relationships among these positions are illustrated

graphically in an organizational chart (see Figures 1a and 1b). The best

organizational structure for any organization depends on many factors including the

work it does; its size in terms of employees, revenue, and the geographic dispersion

of its facilities; and the range of its businesses (the degree to which it is diversified

across markets).

There are multiple structural variations that organizations can take on, but there are

a few basic principles that apply and a small number of common patterns. The

following sections explain these patterns and provide the historical context from

which some of them arose. The first section addresses organizational structure in the

twentieth century. The second section provides additional details of traditional,

vertically-arranged organizational structures. This is followed by descriptions of

several alternate organizational structures including those arranged by product,

function, and geographical or product markets. Next is a discussion of combination

structures, or matrix organizations. The discussion concludes by addressing

emerging and potential future organizational structures.

ORGANIZATIONAL STRUCTURE

DURING THE TWENTIETH CENTURY

Understanding the historical context from which some of today's organizational

structures have developed helps to explain why some structures are the way they

are. For instance, why are the old, but still operational steel mills such as U.S. Steel

and Bethlehem Steel structured using vertical hierarchies? Why are newer steel

mini-mills such as Chaparral Steel structured more horizontally, capitalizing on the

innovativeness of their employees? Part of the reason, as this section discusses, is

that organizational structure has a certain inertia—the idea borrowed from physics

and chemistry that something in motion tends to continue on that same path.

Changing an organization's structure is a daunting managerial task, and the

immensity of such a project is at least partly responsible for why organizational

structures change infrequently.

At the beginning of the twentieth century the United States business sector was

thriving. Industry was shifting from job-shop manufacturing to mass production, and

thinkers like Frederick Taylor in the United States and Henri Fayol in France studied

the new systems and developed principles to determine how to structure

organizations for the greatest efficiency and productivity, which in their view was very

much like a machine. Even before this, German sociologist and engineer Max Weber

had concluded that when societies embrace capitalism, bureaucracy is the inevitable

result. Yet, because his writings were not translated into English until 1949, Weber's

work had little influence on American management practice until the middle of the

twentieth century.

Management thought during this period was influenced by Weber's ideas of

bureaucracy, where power is ascribed to positions rather than to the individuals

holding those positions. It also was influenced by Taylor's scientific management, or

the "one best way" to accomplish a task using scientifically-determined studies of

time and motion. Also influential were Fayol's ideas of invoking unity within the chain-

of-command, authority, discipline, task specialization, and other aspects of

organizational power and job separation. This created the context for vertically-

structured organizations characterized by distinct job classifications and top-down

authority structures, or what became known as the traditional or classical

organizational structure.

Job specialization, a hierarchical reporting structure through a tightly-knit chain-of-

command, and the subordination of individual interests to the superordinate goals of

the organization combined to result in organizations arranged by functional

departments with order and discipline maintained by rules, regulations, and standard

operating procedures. This classical view, or bureaucratic structure, of organizations

was the dominant pattern as small organizations grew increasingly larger during the

economic boom that occurred from the 1900s until the Great Depression of the

1930s. Henry Ford's plants were typical of this

Figure 1a

Organizational Structure

growth, as the emerging Ford Motor Company grew into the largest U.S. automaker

by the 1920s.

The Great Depression temporarily stifled U.S. economic growth, but organizations

that survived emerged with their vertically-oriented, bureaucratic structures intact as

public attention shifted to World War II. Postwar rebuilding reignited economic

growth, powering organizations that survived the Great Depression toward

increasing size in terms of sales revenue, employees, and geographic dispersion.

Along with increasing growth, however, came increasing complexity. Problems in

U.S. business structures became apparent and new ideas began to appear. Studies

of employee motivation raised questions about the traditional model. The "one best

way" to do a job gradually disappeared as the dominant logic. It was replaced by

concerns that traditional organizational structures might prevent, rather than help,

promote creativity and innovation—both of which were necessary as the century

wore on and pressures to compete globally mounted.

TRADITIONAL ORGANIZATIONAL

STRUCTURE

While the previous section explained the emergence of the traditional organizational

structure, this section provides additional detail regarding how this affected the

practice of management. The structure of every organization is unique in some

respects, but all organizational structures develop or are consciously designed to

enable the organization to accomplish its work. Typically, the structure of an

organization evolves as the organization grows and changes over time.

Researchers generally identify four basic decisions that managers have to make as

they develop an organizational structure, although they may not be explicitly aware

of these decisions. First, the organization's work must be divided into specific jobs.

This is referred to as the division of labor. Second, unless the organization is very

small, the jobs must be grouped in some way, which is called departmentalization.

Third, the number of people and jobs that are to be grouped together must be

decided. This is related to the number of people that are to be managed by one

person, or the span of control—the number of employees reporting to a single

manager. Fourth, the way decision-making authority is to be distributed must be

determined.

In making each of these design decisions, a range of choices are possible. At one

end of the spectrum, jobs are highly specialized with employees performing a narrow

range of activities, while at the other end of the spectrum employees perform a

variety of tasks. In

Figure 1b

Organizational Structure

traditional bureaucratic structures, there is a tendency to increase task specialization

as the organization grows larger. In grouping jobs into departments, the manager

must decide the basis on which to group them. The most common basis, at least

until the last few decades, was by function. For example, all accounting jobs in the

organization can be grouped into an accounting department, all engineers can be

grouped into an engineering department, and so on. The size of the groupings also

can range from small to large depending on the number of people the managers

supervise. The degree to which authority is distributed throughout the organization

can vary as well, but traditionally structured organizations typically vest final

decision-making authority by those highest in the vertically structured hierarchy.

Even as pressures to include employees in decision-making increased during the

1950s and 1960s, final decisions usually were made by top management. The

traditional model of organizational structure is thus characterized by high job

specialization, functional departments, narrow spans of control, and centralized

authority. Such a structure has been referred to as traditional, classical, bureaucratic,

formal, mechanistic, or command and control. A structure formed by choices at the

opposite end of the spectrum for each design decision is called unstructured,

informal, or organic.

The traditional model of organizational structure is easily represented in a graphical

form by an organizational chart. It is a hierarchical or pyramidal structure with a

president or other executive at the top, a small number of vice presidents or senior

managers under the president, and several layers of management below this, with

the majority of employees at the bottom of the pyramid. The number of management

layers depends largely on the size of the organization. The jobs in the traditional

organizational structure usually are grouped by function into departments such as

accounting, sales, human resources, and so. Figures 1a and 1b illustrate such an

organization grouped by functional areas of operations, marketing and finance.

BASIS FOR DEPARTMENTALIZATION

As noted in the previous section, many organizations group jobs in various ways in

different parts of the organization, but the basis that is used at the highest level plays

a fundamental role in shaping the organization. There are four commonly used

bases.

FUNCTIONAL DEPARTMENTALIZATION.

Every organization of a given type must perform certain jobs in order do its work. For

example, key functions of a manufacturing company include production, purchasing,

marketing, accounting, and personnel. The functions of a hospital include surgery,

psychiatry, nursing, housekeeping, and billing. Using such functions as the basis for

structuring the organization may, in some instances, have the advantage of

efficiency. Grouping jobs that require the same knowledge, skills, and resources

allows them to be done efficiently and promotes the development of greater

expertise. A disadvantage of functional groupings is that people with the same skills

and knowledge may develop a narrow departmental focus and have difficulty

appreciating any other view of what is important to the organization; in this case,

organizational goals may be sacrificed in favor of departmental goals. In addition,

coordination of work across functional boundaries can become a difficult

management challenge, especially as the organization grows in size and spreads to

multiple geographical locations.

GEOGRAPHIC DEPARTMENTALIZATION.

Organizations that are spread over a wide area may find advantages in organizing

along geographic lines so that all the activities performed in a region are managed

together. In a large organization, simple physical separation makes centralized

coordination more difficult. Also, important characteristics of a region may make it

advantageous to promote a local focus. For example, marketing a product in

Western Europe may have different requirements than marketing the same product

in Southeast Asia. Companies that market products globally sometimes adopt a

geographic structure. In addition, experience gained in a regional division is often

excellent training for management at higher levels.

PRODUCT DEPARTMENTALIZATION.

Large, diversified companies are often organized according to product. All the

activities necessary to produce and market a product or group of similar products are

grouped together. In such an arrangement, the top manager of the product group

typically has considerable autonomy over the operation. The advantage of this type

of structure is that the personnel in the group can focus on the particular needs of

their product line and become experts in its development, production, and

distribution. A disadvantage, at least in terms of larger organizations, is the

duplication of resources. Each product group requires most of the functional areas

such as finance, marketing, production, and other functions. The top leadership of

the organization must decide how much redundancy it can afford.

CUSTOMER/MARKET DEPARTMENTALIZATION.

An organization may find it advantageous to organize according to the types of

customers it serves. For example, a distribution company that sells to consumers,

government clients, large businesses, and small businesses may decide to base its

primary divisions on these different markets. Its personnel can then become

proficient in meeting the needs of these different customers. In the same way, an

organization that provides services such as accounting or consulting may group its

personnel according to these types of customers. Figure 2 depicts an organization

grouped by customers and markets.

Figure 2

Customer/Market Organization

Figure 3

Matrix Structure

MATRIX ORGANIZATIONAL STRUCTURE

Some organizations find that none of the afore-mentioned structures meet their

needs. One approach that attempts to overcome the inadequacies is the matrix

structure, which is the combination of two or more different structures. Functional

departmentalization commonly is combined with product groups on a project basis.

For example, a product group wants to develop a new addition to its line; for this

project, it obtains personnel from functional departments such as research,

engineering, production, and marketing. These personnel then work under the

manager of the product group for the duration of the project, which can vary greatly.

These personnel are responsible to two managers (as shown in Figure 3).

One advantage of a matrix structure is that it facilitates the use of highly specialized

staff and equipment. Rather than duplicating functions as would be done in a simple

product department structure, resources are shared as needed. In some cases,

highly specialized staff may divide their time among more than one project. In

addition, maintaining functional departments promotes functional expertise, while at

the same time working in project groups with experts from other functions fosters

cross-fertilization of ideas.

The disadvantages of a matrix organization arise from the dual reporting

structure. The organization's top management must take particular care to

establish proper procedures for the development of projects and to keep

communication channels clear so that potential conflicts do not arise and

hinder organizational functioning. In theory at least, top management is

responsible for arbitrating such conflicts, but in practice power struggles

between the functional and product manager can prevent successful

implementation of matrix structural arrangements. Besides the

product/function matrix, other bases can be related in a matrix. Large

multinational corporations that use a matrix structure most commonly combine

product groups with geographic units. Product managers have global

responsibility for the development, manufacturing, and distribution of their own

product or service line, while managers of geographic regions have

responsibility for the success of the business in their regions.

STRATEGIC BUSINESS UNITS

As corporations become very large they often restructure

as a means of revitalizing the organization. Growth of a business often is

accompanied by a growth in bureaucracy, as positions are created to facilitate

developing needs or opportunities. Continued changes in the organization or in the

external business environment may make this bureaucracy a hindrance rather than a

help, not simply because of the size or complexity of the organization but also

because of a sluggish bureaucratic way of thinking. One approach to encourage new

ways of thinking and acting is to reorganize parts of the company into largely

autonomous groups,

Figure 4

SBU Structure

called strategic business units (SBUs). Such units generally are set up like separate

companies, with full profit and loss responsibility invested in the top management of

the unit—often the president of the unit and/or a senior vice president of the larger

corporation. This manager is responsible to the top management of the corporation.

This arrangement can be seen as taking any of the aforementioned

departmentalization schemes one step further. The SBUs might be based on product

lines, geographic markets, or other differentiating factors. Figure 4 depicts SBUs

organized by geographic area.

EMERGING TRENDS

IN ORGANIZATIONAL STRUCTURE

Except for the matrix organization, all the structures described above focus on the

vertical organization; that is, who reports to whom, who has responsibility and

authority for what parts of the organization, and so on. Such vertical integration is

sometimes necessary, but may be a hindrance in rapidly changing environments. A

detailed organizational chart of a large corporation structured on the traditional

model would show many layers of managers; decision making flows vertically up and

down the layers, but mostly downward. In general terms, this is an issue of

interdependence.

In any organization, the different people and functions do not operate completely

independently. To a greater or lesser degree, all parts of the organization need each

other. Important developments in organizational design in the last few decades of the

twentieth century and the early part of the twenty-first century have been attempts to

understand the nature of interdependence and improve the functioning of

organizations in respect to this factor. One approach is to flatten the organization, to

develop the horizontal connections and de-emphasize vertical reporting

relationships. At times, this involves simply eliminating layers of middle

management. For example, some Japanese companies—even very large

manufacturing firms—have only four levels of management: top management, plant

management, department management, and section management. Some U.S.

companies also have drastically reduced the number of managers as part of a

downsizing strategy; not just to reduce salary expense, but also to streamline the

organization in order to improve communication and decision making.

In a virtual sense, technology is another means of flattening the organization. The

use of computer networks and software designed to facilitate group work within an

organization can speed communications and decision making. Even more effective

is the use of intranets to make company information readily accessible throughout

the organization. The rapid rise of such technology has made virtual organizations

and boundarlyless organizations possible, where managers, technicians, suppliers,

distributors, and customers connect digitally rather than physically.

A different perspective on the issue of interdependence can be seen by comparing

the organic model of organization with the mechanistic model. The traditional,

mechanistic structure is characterized as highly complex because of its emphasis on

job specialization, highly formalized emphasis on definite procedures and protocols,

and centralized authority and accountability. Yet, despite the advantages of

coordination that these structures present, they may hinder tasks that are

interdependent. In contrast, the organic model of organization is relatively simple

because it de-emphasizes job specialization, is relatively informal, and decentralizes

authority. Decision-making and goal-setting processes are shared at all levels, and

communication ideally flows more freely throughout the organization.

A common way that modern business organizations move toward the organic model

is by the implementation of various kinds of teams. Some organizations establish

self-directed work teams as the basic production group. Examples include production

cells in a manufacturing firm or customer service teams in an insurance company. At

other organizational levels, cross-functional teams may be established, either on an

ad hoc basis (e.g., for problem solving) or on a permanent basis as the regular

means of conducting the organization's work. Aid Association for Lutherans is a large

insurance organization that has adopted the self-directed work team approach. Part

of the impetus toward the organic model is the belief that this kind of structure is

more effective for employee motivation. Various studies have suggested that steps

such as expanding the scope of jobs, involving workers in problem solving and

planning, and fostering open communications bring greater job satisfaction and

better performance.

Saturn Corporation, a subsidiary of General Motors (GM), emphasizes horizontal

organization. It was started with a "clean sheet of paper," with the intention to learn

and incorporate the best in business practices in order to be a successful U.S. auto

manufacturer. The organizational structure that it adopted is described as a set of

nested circles, rather than a pyramid. At the center is the self-directed production

cell, called a Work Unit. These teams make most, if not all, decisions that affect only

team members. Several such teams make up a wider circle called a Work Unit

Module. Representatives from each team form the decision circle of the module,

which makes decisions affecting more than one team or other modules. A number of

modules form a Business Team, of which there are three in manufacturing. Leaders

from the modules form the decision circle of the Business Team. Representatives of

each Business Team form the Manufacturing Action Council, which oversees

manufacturing. At all levels, decision making is done on a consensus basis, at least

in theory. The president of Saturn, finally, reports to GM headquarters.

THE FUTURE

Industry consolidation—creating huge global corporations through joint ventures,

mergers, alliances, and other kinds of interorganizational cooperative efforts—has

become increasingly important in the twenty-first century. Among organizations of all

sizes, concepts such as agile manufacturing, just-in-time inventory management,

and ambidextrous organizations are impacting managers' thinking about their

organizational structure. Indeed, few leaders were likely to blindly implement the

traditional hierarchical structure common in the first half of the century. The first half

of the twentieth century was dominated by the one-size-fits-all traditional structure.

The early twenty-first century has been dominated by the thinking that changing

organizational structures, while still a monumental managerial challenge, can be a

necessary condition for competitive success.

CHAPTER 5

RECOMMENDATION

Ford 2004 MY Engine Oil RecommendationsMost EnginesSAE 5W-20 engine oil is recommended.Only use oils "Certified For Gasoline Engines" by the American Petroleum Institute(API). To protect your engine's warranty use Motorcraft SAE 5W-20 or an equivalentSAE 5W-20 oil meeting Ford specification WSS-M2C153-H. SAE 5W-20 oil providesoptimum fuel economy and durability performance meeting all requirements foryour vehicle's engine.Do not use supplemental engine oil additives, cleaners or other engine treatments.They are unnecessary and could lead to engine damage that is not covered by Fordwarranty.Change your engine oil according to the appropriate schedule listed in the ScheduledMaintenance Guide.2.0L Zetec HP and 4.0L EnginesLook for this certification trademark.SAE 5W-30 engine oil is recommended.Only use oils "Certified For Gasoline Engines" by the American Petroleum Institute(API). To protect your engine's warranty use Motorcraft SAE 5W-30 or an equivalentSAE 5W-30 oil meeting Ford specification WSS-M2C205-A.Do not use supplemental engine oil additives, cleaners or other engine treatments.They are unnecessary and could lead to engine damage that is not covered by Fordwarranty.Change your engine oil according to the appropriate schedule listed in the ScheduledMaintenance Guide.ENGINEERING MATERIAL SPECIFICATIONMaterial Name Specification NumberOIL, ENGINE, ILSAC GF-3, SAE 5W-20, WSS-M2C153-HSERVICE FILL1. SCOPEThis material specification defines the minimum acceptable performance requirementsand physical/chemical properties of engine oils to be used in Ford Motor Companyvehicles.2. APPLICATIONThis material is used for lubrication of gasoline engines. This specification was releasedoriginally for service fill engine oils meeting the 2001 model vehicle requirements.Sections titled QUALITY SYSTEM REQUIREMENTS, SUPPLIER'S RESPONSIBILITY,and APPROVAL OF MATERIALS apply only to engine oils supplied directly to FordMotor Company and it's affiliates.3. REQUIREMENTS

Material specification requirements are to be used for initial qualification of materials.3.1 QUALITY SYSTEM REQUIREMENTSMaterial suppliers and part producers must conform to the Company's QualitySystem Requirements.3.2 PERFORMANCEShall be licensed to display the API Certification Mark and meet all therequirements of the “ILSAC Minimum Performance Standard for Passenger CarEngine Oils GF-3” (October 2000) with the following exceptions:3.2.1 This requirement changes the ILSAC GF-3 ASTM Sequence IIIF testperformance criteria to the following:`ASTM Sequence IIIE Test Performance shall meetconducted double length all specifications of(128 hrs) with no oil the 64 hr test with thechange during test. following changes:Viscosity Increase at 40 °C 200% maxAverage Piston Varnish 8.4 minORDate Action Revisions2001 01 12 Revised M. J. Riley2000 04 10 Activated M. J. RileyENGINEERING MATERIAL SPECIFICATION WSS-M2C153-HASTM Sequence IIIF Test Performance shall meetconducted double length all specifications of(160 hrs) with no oil the 80 hr test with thechange during test. following change:Viscosity Increase at 40 °C 200% max3.2.2 High Temperature Deposits, mg 30 max(TEOST MHT-4)3.2.3 ASTM Sequence VE meeting requirements of ILSAC GF-2 may beconducted to replace the ASTM Sequence IVA and Sequence VG tests.3.2.4 ASTM L-38 meeting requirements of ILSAC GF-2 may be conducted toreplace ASTM Sequence VIII.All required engine tests shall be conducted in accordance with the mostrecently approved procedures as described in ASTM Special TechnicalPublication 315 and the applicable ASTM Standards Research Reportsand Information Letters. All tests under surveillance by ASTM must beconducted using test equipment monitored by and calibrated to therequirements of the ASTM Test Monitoring Center.3.3 PHYSICAL/CHEMICAL PROPERTIES3.3.1 Copper Corrosion, max 1b (Dark Orange)(ASTM D 130 or ISO 2160,3 hrs at 100 °C)3.3.2 Physical Appearance and OdorShall be clear and bright with no objectionable odor.3.3.3 ContaminantsShall be free of carcinogens, toxins, metals not removed in refining orfrom previous use.3.4 QUALIFICATIONIt is the supplier's responsibility to have the technical evidence and

documentation certifying that a given formulation (base oil/additive combination)meets all requirements described in this specification.No base stock interchange (BOI) or viscosity grade read across (VGRA) ispermitted to approve engine oils to this specification.The affected Ford Fuels and Lubricants Engineering activity reserves the right torequest certification documentation from any company claiming to meet thisspecification.ENGINEERING MATERIAL SPECIFICATION WSS-M2C153-H3.5 SUPPLIER'S RESPONSIBILITYAll materials supplied to this specification must be equivalent in all characteristicsto the material upon which approval was originally granted.Prior to making any changes to the material originally approved under thisspecification, whether or not such changes affect the material's ability to meet thespecification requirements, the Supplier shall notify the affected Purchasing, andMaterials Engineering activities (with reasons) of the proposed changes. Uponnotification of the Company, further instructions will be provided.Note: Suppliers should be prepared to provide test data and samplesdemonstrating compliance to this specification, if requested.Substance restrictions imposed by regulations or Company direction applies tothe materials addressed by this document. The restrictions are identified inRestricted Substance Management Standard WSS-M99P9999-A1.4. APPROVAL OF MATERIALSThis specification is intended to define the performance and/or properties of finishedparts or systems of combined materials. An Engineering Material Approved Sourcelisting is not applicable for this specification. Product Engineering materials referencedin this document and/or the affected engineering drawing, which require priorEngineering approval, are shown in the Engineering Material Approved Source Listunder the specification cited.ENGINEERING MATERIAL SPECIFICATIONMaterial Name Specification NumberOIL, ENGINE, ILSAC GF-3, SERVICE FILL WSS-M2C205-A1. SCOPEThis material specification defines the minimum acceptable performance requirements andphysical/chemical properties of engine oils to be used in Ford Motor Company vehicles.2. APPLICATIONThis material is used for lubrication of gasoline engines. This specification was released originallyfor service fill engine oils meeting the 2002 model vehicle requirements for viscosity grades otherthan SAE 5W-20. Sections titled QUALITY SYSTEM REQUIREMENTS, SUPPLIER'SRESPONSIBILITY, and APPROVAL OF MATERIALS apply only to engine oils supplied directly toFord Motor Company and it's affiliates.3. REQUIREMENTSMaterial specification requirements are to be used for initial qualification of materials.3.1 QUALITY SYSTEM

Material suppliers and part producers must conform to the Company's Quality Systemrequirements.3.2 PERFORMANCEShall meet all the requirements of "The ILSAC GF-3 Minimum Performance Standard ForPassenger Car Engine Oils" and shall be licensed to display the API Certification Mark.3.3 PHYSICAL/CHEMICAL PROPERTIES3.3.1 Copper Corrosion, max 1b (Dark Orange)(ASTM D 130 or ISO 2160, 3 h at 100 C)3.3.2 Physical Appearance and OdorShall be clear and bright with no objectionable odor.3.3.3 ContaminantsShall be free of carcinogens, toxins, metals from refining or previous use.Date Action Revisions2001 03 13 Activated M. J. RileyENGINEERING MATERIAL SPECIFICATION WSS-M2C205-A3.4 QUALIFICATIONIt is the supplier's responsibility to have the technical evidence and documentationcertifying that a given formulation (base oil/ additive combination) meets all requirementsdescribed in this specification.The affected Ford Fuels and Lubricants Engineering activity reserves the right to requestcertification documentation from any company claiming to meet this specification.3.5 SUPPLIER'S RESPONSIBILITYAll materials supplied to this specification must be equivalent in all characteristicsto the material upon which approval was originally granted.Prior to making any changes to the material originally approved under thisspecification, whether or not such changes affect the material's ability to meet thespecification requirements, the Supplier shall notify the affected Purchasing, andMaterials Engineering activities (with reasons) of the proposed changes. Uponnotification of the Company, further instructions will be provided.Note: Suppliers should be prepared to provide test data and samplesdemonstrating compliance to this specification, if requested.Substance restrictions imposed by regulations or Company direction applies tothe materials addressed by this document. The restrictions are identified inRestricted Substance Management Standard WSS-M99P9999-A1.4. APPROVAL OF MATERIALSThis specification is intended to define the performance and/or properties of finished parts orsystems of combined materials. An Engineering Material Approved Source listing is notapplicable for this specification. Product Engineering materials referenced in this documentand/or the affected engineering drawing, which require prior Engineering approval, are shown inthe Engineering Material Approved Source List under the specification cited.Ford 2004 MY Regular Fuel Recommendation

Choosing the right fuelUse only UNLEADED FUEL. The use of leaded fuel is prohibitedby law and could damage your vehicle.Your vehicle was not designed to use fuel or fuel additives withmetallic compounds, including manganese-based additives.Studies indicate that these additives can cause your vehicle'semission control system to deteriorate more rapidly. In Canada,many fuels contain metallic additives, but fuels free of suchadditives may be available; check with your local fuel dealer.Do not use fuel containing methanol. It can damage critical fuelsystem components.Repairs to correct the effects of using a fuel for which your vehiclewas not designed may not be covered by your warranty.Octane recommendationsYour vehicle is designed to use“Regular” unleaded gasoline withpump (R+M)/2 octane rating of 87.We do not recommend the use ofgasolines labeled as “Regular” thatare sold with octane ratings of86 or lower in high altitude areas.Do not be concerned if your engine sometimes knocks lightly.However, if it knocks heavily under most driving conditions whileyou are using fuel with the recommended octane rating, see yourdealer or a qualified service technician to prevent any enginedamage.Fuel qualityIf you are experiencing starting, rough idle or hesitationdriveability problems during a cold start, try a different brand of“Regular” unleaded gasoline. “Premium” unleaded gasoline is notrecommended because it may cause these problems to becomemore pronounced. If the problems persist, see your dealer or aqualified service technician.It should not be necessary to add any aftermarket products toyour fuel tank if you continue to use high quality fuel of therecommended octane rating. Aftermarket products could causedamage to the fuel system. Repairs to correct the effects of usingan aftermarket product in your fuel may not be covered by yourwarranty.Many of the world’s automakers approved the World-wide FuelCharter that recommends gasoline specifications to provideimproved performance and emission control system protection foryour vehicle. Gasolines that meet the World-wide Fuel Chartershould be used when available. Ask your fuel supplierabout gasolines that meet the World-wide Fuel Charter.Cleaner AirFord endorses the use of reformulated "cleaner-burning" gasolinesto improve air.

VALUABLE SUGGESTIONS GIVEN BY FORD CUSTOMERS:VALUABLE SUGGESTIONS GIVEN BY FORD CUSTOMERS:

Please try to increase the number of Service centers.

Keep Service Stations at main locations of the city, like Banjara Hills,

Jubilee Hills, Begumpet etc., where many customers feel it easy to go to

service centers.

There is no proper response from the service men at service station.

Please recruit efficient service men in the service centers.

The service men in the service centers are unable to understand the

problems told by us, and they are not resolving the cars problems.

Provide information on service and mileage regularly.

Please provide information about new cars along with their price lists at

least once in 6 months.

Advertisements through televisions can influence many categories of

people. So try to concentrate on this segment. We don’t see or find much

of the Ford car advertisements in T.V except Fiesta.

Try to provide financial facility at 0% interest.

Customer should be educated about the maintenance of the vehicle. i.e.

maintenance tips should be provided.

Mileage of the cars is not up to the expectations.

Mileage of Fiesta is very worst its giving only 9 to 11 Kms per liter. Please

try to rectify it.

The quality of the sun proof coating used is of very low quality, vehicle

colour is getting shaded very quickly.

Please send the specially appointed feed back taking staff on Sunday

evenings only.

The sales people present in the showroom respond to us properly when

we come to purchase a new car, but they do not respond when we come

to tell our problems regarding the cars.

CHAPTER 6CHAPTER 6

BIBLIOGRAPHYSBIBLIOGRAPHYS

REFERANCE BOOKS:

MARKETING MANAGEMENT V.S.RAMASWAMY AND S.NAMAKUMARI

ADVERTISING AND PROMOTIONS GEORGE E.BELCH &

MICHAEL A. BELCH

WEBLIOGRAPHY::

www.fordindia.com

www.fortuneford.com

www.wikipedia.com

www.google.com

AUTO MAGAZINES:

AUTOCAR

OVERDRIVE