The Importance Of Marketing Audit: A Case Study Of Ford Motors

Four Primary Characteristics of a Marketing Audit

An American based manufacturer of the automobiles also known as the ford motor company claims to be the most worthy car brand in America and ranks at the position 5th in terms of the worldwide. The revenue generated by the company in the financial year 2017 is 156.8 billion dollars which was 3% more than the revenue generated in the year 2016 (Bak, 2003).   

The economic factor of the Ford Company is that the ford is performing in the countries like America, Brazil and India where the aptitude of the growth is far away when compared to the growth of the competitors. When the growth market is accelerated via GDP, the customers will reflect more attention towards the luxury transport. Changes in the oil prices will also result in the audit of the company (Lee, Nagy & Zimmerman, 2018).

Due to changes in the technological aspect the Ford motors has to face the great competition on most of the affairs such as sales percentage of the vehicles, amusement for the customers, automatic advancement in technology and a lot more. The ford motor focuses majorly on healthy supply series. It also gives a glance of the vehicle view and the designation in online through its website.

Due to political factors such as market prices, oil charges, the adjustment of the currency and denominations, are some of the factor that will affect the political scenario of the company. The audit of the political factors is necessary as the factors influence the working of the Ford Motors.

Social and cultural factors also play an important role in deriving the need for the audit of the statistics, policies, accurate market domain and assurance from the customers will enable the auditor to market the same.

Ford must keep an eye on the ecological factors and concerns to partly determine the conditions of the ford in the remote as well as the macro environment. The most significant factors which shall be audited are climate change, the emission of low carbons, and the declining of the oil reserves. Ford must emphasize the improvement of the product and the business innovation.

The Ford Motors has provided the opportunity to the customers to choose the interiors and the exteriors of the cars according to their preferences. While comparing the sales of the Toyota and the General Motors the sales of the company of the latter one is the highest, whereas in 2017 the Ford motors sold around 6607000 vehicles, throughout the world at the wholesale. It has a strong position in the field of the China’s automotive market.  The company currently sells the 18.4% of the vehicles (Kumar, 2015).

Overview of Ford Motors

In the year 2016 the market share of the Ford Motors is reflected through the pie chart below.

(Source: Cain, 2017)

From the above pie chart it can be analysed that the mid-size truck sales volume recorded the best annual results for the Ford F series in more than a decade and the sales picked up around 2.69 million units in 2016. The company’s market share had a range between the 9.32% to 15.56, meaning thereby capturing the major car market of the UK. After the year 2015 the Ford market maintained a major car share market and tends to be one of the leading brands. Ford’s highest market share was recorded in January which was 13.05% (Korhonen, 2016).

(Source: The statistics Portal, 2014)

Customers play a vital role in deciding the success factors of the Ford Motors, and through the customer analysis is able to segregate the market share for each segment. Customer analysis will enable the ford motors to formulate the new marketing strategies. The marketing environment audit also analyses the behaviour of the customers (Morris, 2016).

The main channels used for the distribution of the products are direct distribution to the customers (Byrnes, et al 2018). This revolutionary idea of selling the products directly to the customers saves the huge amount of cost to the company and it also provides a room for the interaction with the customers.

The suppliers of the Ford Motors are assembled to supply the raw material energy like steel aluminium. The power of the supplier is overall moderate and the For Motors purchases the key resources which are prevailing with the trends of the market (Josh, 2010)

Ford Motors Company is the 5^th largest automobile manufacturer in the market. Ford’s mission takes about “people working together for automotive leadership as a lean and global enterprise. The ford’s business missions are clearly stated in terms of the market orientation. The ford motor company’s current objective is to deliver the personal mobility around the world with the aim to be the global leader, total focus on the stakeholders and the lean business (Thompson., 2017).

The objectives of the company are to create a viable company in terms of the profitability and the growth of the company.

The strategies of the company are embedded in the company’s four point business strategy for achieving the success across the globe (Berman & Evans, 2015). The four point plan consists of the following strategies.

Factors Affecting the Company’s Marketing Strategy

The major strategy is to restructure the policy aggressively and to operate at the profitable level by catering the needs of the customers and to change according to the changes in the model mix (Wensley, 2016).

Ford’s second priority is to provide the excellence in the products and the services. Under the one Ford plan the products are the lifelines of the company and this helped the company to have the best product line up till now (Gallego-Álvarez, Segura & Martínez-Ferrero, 2015).

The next priority is to derive innovation in the creation and production of the products and the service. The technology is evolving and with the revolution the company is focusing mainly on the creation of the segments that are different from that of the competitors (Gonzalez, Hoffman & Ingram, 2014).

The company is running in the creating road value map since long. The ability of the Ford Motors to adopt with the changes prevailing in the market and to derive the best opportunities out of it is what makes the company one of the largest car selling brands.

While doing the audit of the Ford Motors organisational structure it can be observed that the structure is based on the needs of the business in the variant market conditions around the world. The main features of the Ford Motor’s organisational structure are to set up a corporate hierarchy and the divisions on the basis of the regions and the geographical distribution (Ford & Eisner, 2016). The global function groups are also altered. The ford motors possess the traditional corporate hierarchy in its organisational structure.

The marketing activities are optimally structured along the different lines and categories.

The Ford Motors fosters the functional efficiency and also supports the cultural and support innovation. The firm recognises the importance of the efficiency at the functional level to push the performance at the elevated level. It can be observed that Ford motor have introduced several training programs to pro forma of the organisational structure (Fine, 2017). This feature also supports the Ford’s generic strategy towards the broad differentiation. Though the product managers are able to perform at a consistent level, there is still some room for improvement. The profits are planned as per the strategies formed.

Furthering the company’s emphasis on innovation, Ford will continue to grow its presence in Silicon Valley by expanding its Palo Alto Research and Innovation Center with a new focus and expanded talent from different industries and backgrounds. Ford will remain a leader in technology and will continue to focus on the research and development of in-car connectivity and automated driving technologies, key components of Ford’s Blueprint for (Mobility Fetzer, 2017).

Financial Health, Distribution Channels, and Suppliers

The marketing system audit involves the procedure to know about the business in detail or to keep the business under the microscope.

A computer based automotive system has been installed to produce the technical information and for finding the upgrades of the data. The system is well accepted by the users of the Ford motors group and the information is highly secured and only authorised to the relevant users (Dunlap, 2016).

Ford Motor Company has designed, developed, and implemented a collective system of decision support tools, supply chain visualization methods, and optimization techniques to aid its planning and scheduling in a complex automotive manufacturing environment. Although originally developed particularly for stamping plants, the system can also be applied in other manufacturing environments where setup times play a dominant role (Baker, 2014). By enabling substantial improvements in workplace planning and production scheduling, the implementation of this system has resulted in significant reductions in premium freight charges, overtime wages, and inventory costs.

In light of the recent rebound in U.S. automotive manufacturing, Ford’s automation and networking plans are likely emblematic of manufacturing technology advances occurring throughout the U.S. automotive sector Vehicle sales are reaching a five-year high due to pent-up demand and easier credit (Denzin & Giardina, 2018). As a result of the booming U.S. auto business, he sees more “plants investing in modernization of their automation systems rather than just adding shifts and plants.

Particulars	31st December 2017	31st December 2016
Gross profit Margin	9.82%	10.83%
Operating profit margin	3.31%	4.02%
Net profit margin	5.20%	3.33%
Return on Equity	21.79%	15.73%
Return on Assets	2.96%	1.99%

Gross profit Margin	The gross profit of the Ford Motor’s Company has deteriorated form the previous year as compared. The profitability margin is 4.85%. This is much higher than the consumer cyclical sector and significantly higher than that of the car.
Operating profit margin	Ford’s motor operating profit margin has been improved as compared to the previous year but yet not increased overall. The ford mustang has been the major contributor in improving the operating profit margin.
Net profit margin	The net profit margin would have reached almost double this year in reflection of the last year. The reason behind the long jump is the increase in the sales volume and the selling units of the commercial vehicles and the SUV’s (Olson, 2015).
Return on Equity	The return on equity is sound and the analysts also recommend to buy the shares of the company as it would give a higher rate of dividend in the upcoming years due to the establishment of the new projects of the ford motors.
Return on Assets	The return on assets has reshaped as compared to the previous year due to market conditions and the utilisation of the assets.

In case of the trucks, the company redesigned the F 150 model and coated with the aluminium body. Ford has claimed a 1.3% share in the market in its segment against the competitors such as Chevrolet Silverado and FCA’s Ram 1500. The transaction price of the F series leads the segment by $6500 per vehicle because of range variants like King Ranch and Platinum (Stock Analysis, 2018).

In case of the SUV’s it has been observed that the company is relocating the capita; of wporth $7 billion form the car segment to the SUV segment.

According to the Ford- battery electric vehicles are more than a different power train. The have entirely mould the life of the consumers who have not driven the battery electric vehicles ever. The BEV product can be continued if the manufacturing plan is set up properly. The floor space for the assembly of the final operations will decrease the capital investment by 50%. Also a 30% improvement in the efficiency of the labour will enable the redeployment of the employees to focus on other jobs apart from the assembly of the other operations (Corten, Steijvers & Lybaert, 2018).

Objectives and Strategies of Ford Motors

Commercial vehicles are the line which covers the full brand demand in the US covering the class 1 to class 7. Currently it has a share of the 39% of the commercial vehicle market. Form the marketing audit it can be found out that the company claims to have sold the more commercial vehicles than the total volume sold by the three consecutive competitors in combination (Al Fahad, Al Mahmud, Miah & Islam, 2015).

The net profit for the second quarter 2017 has improved from the previous year.

The present model is a bit bearish and the revenue of the ford company have been increasing and the profitability of the company is accelerating at a greater pace which is near to the margin projection of 7%. Due to consolidation of the platforms and cost cutting in the Europe the margin is set against the 7% (Annual Reports.com, 2018). The feature of the facility of the loans to the customers enabled the company to spur the demand. It has been observed that the investments as any cash outflow is considered only to boost the profitability of the future to stabilise the cash spent on the mergers and the acquisitions and cash value of the stocks. The lending of money by the Ford Group is so much that the profits earned by the owner are actually distributed in the form of the cash flows and along with the sales. It has also been checked that the whether the loans taken by the ford company are paid in instalments equally (Phillips, 2014).

Cost wise the Ford motors Group has continued to reduce the manufacturing capacity as there was a slowdown in sales of the vehicles. Many of the brands have stopped making investments during the slowdown and ford has revamped its Valencia plant into one of the most advanced plant along with the high level of productivity. Ford’s innovative agreement runs from 2017 to 2022 which will reshape the Germany plant and enables it to be more efficient while cutting down the costs in the (Europe Shore, et al 2015).

Also it has been observed that the prices of the Aluminium have risen by 22% as compared to the previous year and nearly 12% since December 2017. On the other hand the price of steel has also escalated by 8% in observation to the previous year. The capacity of the use of the aluminium by the ford motors is generally high than that of its competitors. Ford F-series trucks is one of the products that consumes the large scale of the aluminium (Carey, 2018).

Ford Motors in the Global Market

One of the features adopted by the Ford Motors is to place a heavy rubber bladder inside the gas in the interior of the tank so that the fuel shall not spill when the tank gets rupture. The total cost to installation and purchase is approximately $5.07 per car. There were certain limits set such as not to exceed the cost by $2000 and the weight shall not be more than 2000 pounds (Annual Reports.com, 2018).

Ford has a quite range of the products and an impressive line of new cars. Ford cars generally offer the most of what the customers demand such as the economy, technology, average per mile, safety and the outstanding performance (Solomon, 2016). The innovative design along with the interiors is what makes it different from the similar products of the different companies. For example the Ford fiesta is having the trimmed seats which provide the additional comfort to the customers; on the other hand Ford focus is available with the active park assistance.

Regardless of the Ford CUV or SUV model, the models are capable convenient and versatile. They provide the extreme power and facility to the customers. As it continues expanding in new regions, Ford is aggressively moving to match production to growing customer demand and achieve benefits of global scale. In addition, by 2020, the company projects its breakeven volume will be two-thirds of its wholesale volume.

The prices of the Ford Motors vary depending upon the market. Ford applies basically two strategies which are Market oriented strategy and the premium pricing strategy. Ford applies this pricing strategy for most of its products such as sedans and trucks and the premium strategy is allowed for Lincoln automobiles which come under the category of the luxury line of the ford.

The distribution channels used by the ford motors is mainly through direct customer selling however, the main places used for the distribution of the products are dealerships, auto parts and stores, ford’s official website and ford’s motor credit company. In addition, customers can access the firm’s financial services at the Ford Motor Credit Company offices or through personnel at the dealerships. This element of the marketing mix shows Ford’s strategy that utilizes different company-owned facilities and third parties to generate sales.

Ford Motor Company advances its items through the majority of the regular strategies. The exercises used to advance merchandise and enterprises are considered in this component of the promoting blend through advertising, personal selling, promotion through sales, public relations and lastly direct selling (Sun, Alles & Vasarhelyi, 2015). The special discounts and schemes are communicated to the customers who are registered and associated with the company.

Organizational Structure of Ford Motors

The objectives of the sales force are to determine the behaviour of the external market and the movement of the forces. The sales force of the Ford motors is large enough to accomplish the objectives of the company. Since the company is large the organisation of the force is bit unrealistic yet the proper experts are hired for each department. The number of sales manager has increased by 10% as compared to the previous year and the adequate policies are formed for the purpose of the incentives and reward.

From the above marketing audits it can be recommended in the form of the short term plans and the long term plans. The short term plans that the company shall adopt to improve the efficiency in the market is to keep a check on the stock market. According to the latest consensus, 32% of the analysts have given the option to buy while the remaining 56% hold the neutral choices. To improve the market share the company shall introduce the additional SUV’s which are the customer’s first choice (Fletcher, 2016).

Secondly ford motors shall improve the operating margin of the company and the follow of the strategy of the One Ford is aggressively into the light. This way the company will be able to grow the volume and the revenue and generate the positive automated cash flows.

The focus shall also be on satisfying the preferences of the customers by introducing new themes and designs. The after sale services shall be given on time after reengineering its processes and improving the existing procedures.

A proper inventory system shall be maintained to avoid the variance of the supply and demand curve of the company (Stock Analysis, 2018). Ford should constantly monitor the breakeven point and in order to reduce the company shall set an appropriate pricing strategy, a proper margin analysis shall be done and a close attention on the potential products shall be considered to push the sales of the company. The fixed costs shall be reviewed and the possibility of the reduction level in the variable costs will help the company to get a high operating leverage over its competitors.

Long term plans

Lincoln line up of the Ford motors shall be removed from the list. It isn’t the plausible moment for the line-up that is so struggling and the credibility of the product is decreasing which ultimately lowers down the brand value of the group.

Marketing System Audit

Ford Motors Groups has to identify some of the strategic moves to improve the transaction price and the margins. The ford shall continue to sell the vehicles into higher value channels. The ford shall focus on more profitable channels which will help in dealing with the residual margins and the investments from the sick products shall be transferred to the potential ones. Further, Ford Motors Group shall also focus on its commercial vehicles to ensure that the costs are low and the automaker is able to grow its pre-tax profits.

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