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Ford Motor Company: Market Research

2718 words (11 pages) Essay in Business

08/02/20 Business Reference this

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Executive Summary

Ford Motor Company is a powerhouse of American-made vehicles and a market leader in the automaker industry. Ford’s brand image is built around rich tradition and the reputation of being a rugged, durable, and American-made car that people trust.  Ford Motor Company has been vastly successful in America and around the world over the past 100 years, manufacturing and selling quality cars, commercial vehicles and  trucks inline with these perceptions. However, over recent years, Ford has been faced with a new challenge, adapting and evolving with the digital age. 

Ball Busters have identified the decision problem of a decreasing revenue and market share over the past four years and subsequently, developed research questions which aim to help us understand aspects of the industry and Ford brand itself which may have impacted these measures.  We conducted both qualitative and quantitative research to provide us with primary data. Including a focus group interview, targeted at consumer attitudes towards of the Ford brand, the automobile industry and wider purchase inclinations and a Qualtrics survey, developed from the findings of the focus group to broaden the scope of answers to similar questions from consumers.

Through conducting research, collecting data and analyzing results; we were able to further investigate Ford’s decision problem.  Based on our finds, we have concluded that Ford holds a strong industry standing and their future is promising – provided that they adapt to changing technological demands of customers into the foreseeable future and remedy perception based discrepancies discussed in the report which follows.

Introduction

Ford Motor Company is an American brand that was founded by Henry Ford. Ford is one of the biggest producers of American-made cars in the world. Even though this is a plus, Ford company has seen the decline in revenue of the past couple years (Ford Motor Company Financials, 2019). This observable symptom is likely due to growth and advancements of competition within the industry.

Ball Busters chose to conduct market research to assess the feasibility of Ford finding success in soley producing Trucks and Mustangs going forward. Beyond this, we wanted to determine the impact technological advancements on consumers purchase decision industry related trends. The market place is both changing and growing and we identified the importance of examining this adjusted environment before making this decisions regarding the feasible of our proposed strategy (Newman, 2019). This lead us to develop the following additional research questions 1) What are consumers perceptions of Ford? 2) What is the demand for technological advancements in the future? And 3) What factors influence general automobile purchase inclinations? Through the analysis of the data we collected, we were able to answer these questions, make recommendations and draw conclusions about the position of Ford in the industry and whether it is feasible for them to only produce trucks and mustangs going forward.  Our findings are presented in the following report.

 

Background

Industry Trends

Automobiles have become a necessity for the everyday life in the 21st century. The ability to transport to any destination efficiently is a must. This includes safety, reliable, quality, and the added benefits the truck provides. The introduction of electric and hybrid cars have allowed the industry to become more environmentally friendly. Diesel engines pollute the environment which can turn off some potential customers. “In the trucking industry, electric and hybrid motors are something manufacturers prefer to avoid for production rather than encourage and are unlikely to be integrated in production in the near future” (Kiger, 2019). Consumers who have laborious job need a high towing capacity for their task at hand. They need a vehicle that will get the job done. Customers that are looking to buy a truck, mainly use it for towing, hauling, and the durability of the vehicle. The importance of the benefits sought is a key ignitive when marketing a new line of cars, trucks,SUVs, etc. The automotive industry has little growth over the past year and is expected to remain constant.

Market Share

Competitors

Vehicles that offer similar products as the Ford trucks include: Chevy Silverado, GMC Sierra, Ram 1500, and Toyota Tundra. The 2019 Chevy Silverado is the 2nd best selling truck behind the Ford F-150 model. The Silverado is a very durable car that consumers love. The maximum towing capacity of 12,500 pounds can allow the driver to haul heavy items that he/she may need (Amend, 2019). The Silverado has many technological advancements where Ford may be lacking.The average market price for a new 2019 Chevy Silverado starts at $41,684 (2019 Chevrolet Silverado 1500 TrueCar, 2019) .

Another contender that gives Ford a run for their money is GMC. The GMC is similar to the Ford with the same exterior finish. They both appear to be strong and very durable. The GMC Sierra is known for having the largest cab area making driving a lot more comfortable. GMC Sierra interior seems to have more detail than other trucks. One technological advancement GMC has adapted to the start stop engine. This engine stops at red lights to preserve gas and appear better for the environment (GMC , 2019). The fuel can last longer and is a benefit for the low gas mileage most trucks fail to overcome.

General Motors is the market leader in the automotive industry with a market share of 16.5%. Toyota is closely behind with a market share of 14.7%. Behind Toyota, Ford comes in 3rd place securing a good capture of the market. (U.S. automotive market share 2018 | Statista , 2019). Differentiating from these other competitors is crucial. Technological advancements in automobiles today seems to be a driving factor. Ford has a chance of capturing the #1 market leader but the most importantly they need to watch their competitors. Understanding what your competitor is doing allows the company to engage what they are lacking.

Ford Motor Company Background

Founded in 1903 by Henry Ford, Ford vehicles were the first car to ever be invented. They are known for being American-made and their stable affordable pricing. Ford produces cars a numerous amounts vehicles from sudans, SUVs, trucks, and sport cars.Ford has existed for 115 years, longer than any other automotive company (Ford , 2019) .

Target Markets

Primary Market- Middle-aged Laborious Men (35-45)

Market Size: 32,536,336

Psychographic Values:

●       A reliable truck that is not just for driving but can tow and store items

●       A quality truck that shows their rugged personality

Secondary Market- Middle aged Family with Active Lifestyles Women (35-45)

Market Size: 30,536,336

Psychographic Values:

●       A truck that can protect their family in emergency of an accident

●       The ability to keep up with a high pace lifestyle

Ford’s Financial Performs

Research Methods

The Focus Group interview took place February 21st at 9:30 AM in the USF Library. This interview was conducted in a private study room and involved 5 members of our group, one of which was the mediator. The advantages of this research type was that is provided us with rich qualitative data and developed ideas which have our eventual quantitative data direction. The option to express more than a set of options gave deeper insights into perception, opinions and feelings towards our research questions. The disadvantages were that not all members were not in the target market. All members were between the age of 19-22. One possible bias which is important to acknowledge is groupthink; the phenomenon where group members bounce off the same idea and new views are not mentioned.  This is not conducive to creativity and individuality in a group settings – however, it is difficult to measure the actual impact it has on subjects in a study.

 Our quantitative method of research was a survey which we created and then distributed through social media. This data collection method is referred to as convenience sampling, which can lead to sampling error. Convenience sampling occurs when you ask people that are close to you to collect data. This can lead to participants possessing similar characteristics and thus not representative of the true population. This creates trends of similarities that may not correlate with the data provided.

Data from both the focus group and survey is primary data, collected first hand by us, the researchers. The advantages of primary data is that it is tailored the specific research problem we stated above and therefore, is better suited to help us solve the questions we have.

Results

 

Focus Group:

       Consumers have an overall negative attitude towards Ford as a company

In our focus group interview, everyone that took part knew and understood Ford Motor Company, however no one really had a strong connection to the company.  The general consensus from the group was that they knew Ford to be a tough and reliable car or truck, as advertised, but did not know Ford to be revolutionary but more traditional, instead.  Most of the group participants had a parent or a grandparent that drove a Ford car at sometime in their life, but no participant had driven one themselves.  In fact, one participant who was not from America stated that they would rather purchase a car that was not American made.  We found that based on where the consumer is from and the opinions that the consumer is surrounded by can influence a decision or attitude towards a company.

       Technology is important to consumers

Every participant in the focus group agreed that technology is necessary in modern day cars.  Because of the technological advancements of the digital age, it is impossible to not incorporate such feature into vehicles.  Technology is valued not only for entertainment and comfort, but also for the wider safety and performance of the driving experience.  Participants stated that the features which they look for most in a new cars included, bluetooth speakers, backup cameras, and park assist.  People generally newest and most up-to-date technology, therefore, Ford needs constantly adapt and innovate in order to keep up with the rapid progression of the digital age.

       Consumers have a positive attitude towards autonomous vehicles but negative attitude about Ford autonomous vehicles.

Consumers have an overall positive attitude towards the autonomous vehicles of the future.  Tesla and other companies are paving the way and making themselves known as the front-runner in the industry of technology.  Consumers are excited for this new wave of technology, however, Ford has some catching up to do if they want to stay relevant.  Consumers trust companies like Tesla to produce these self-driving vehicles because these companies are proven and known for their technologically minded vehicles.  Ford however, is not renowned for innovation or technology and, therefore, people are less likely to trust autonomous vehicles produced by Ford.  Our findings showed that Ford could produce an autonomous vehicle in the future, but it would have to be after other companies have had success with self-driving cars.

Survey Findings:

Participates view the quality, technology, and appearance of Ford to be negative. By viewing these trends in what consumers’ want, Ford and position a new stance.

Customers who won Ford have the highest rates of their parents owning Ford over any other brand. This says something about the influences of parents.

This show the likelihood of people purchasing an autonomous car by Ford. Participates were very unlikely to do purchase.

Ford ranked the least popular brand amongst 6 different options of other truck brands specifically. These options contained GMC, Chevy, Dodge, Toyota, and Honda.

Consumers are using their vehicles are transportation to work more than any other activity. Ford trucks and Mustangs are geared towards outdoor and social activities.

Conclusions and Recommendations

This research project has lead us to making several conclusions and recommendations which Ford should consider when designing, manufacturing and marketing vehicles in the future.  We found that customers perceive Ford as being American-made, reliable and durable, however, lacking in technological advancement . In the digital age, technology related features are strong drivers for consumers when making vehicle related purchase decision. It enhances the quality of the driving experience, adds comfort and improving safety and performance substantially.  From our study, we observed that respondents value features such as bluetooth, backup cameras, and parking assist most in vehicles they purchase. Therefore, we recommend that Ford invests in developing and implementing features such as these in there 2020 models and beyond to satisfy the changing needs of the target market.  Consumers want the driving experience and feeling safe while doing so; technology has the potential to benefit Ford and help improve upon their existing level of quality and appearance. If they do not adapt accordingly, we foresee that competitors who evolve with the digital age will become more of a threat to Ford and their market share.

Our second recommendation Ford aims to create positive perceptions by moving away from the traditional truck and expanding its investment into the development of different models.  Although this is what Ford is known for, it can keep that image while at the same time making revolutionary changes to its product line.  With the company specializing in Trucks, SUVs, and Mustangs in the beginning of 2020, this would be a great time for Ford to focus on improving external features such as better quality suspension, coil overs, and handling.  They can bring in better features to the driving aspect of the car so it can be a more comfortable and enjoyable ride.  Internally, Ford should focus on adding technology features that customers can customize and have fun with.  Example may include automatic seat and mirror adjusters, advanced touch screens with smartphone connectivity, and more comfortable seating.

References

  • 2019 Chevrolet Silverado 1500 Prices, Reviews & Incentives | TrueCar. (2019). Retrieved from https://www.truecar.com/prices-new/chevrolet/silverado-1500-pricing/
  • Amend, J. (2019). Chevy Silverado Marketing Conjures Up Familiar Themes. Retrieved from https://www.wardsauto.com/industry/chevy-silverado-marketing-conjures-familiar-themes
  • Ford – New Cars, Trucks, SUVs, Crossovers & Hybrids | Vehicles Built Just for You‎ | Ford.com. (2019). Retrieved from https://www.ford.com/
  • Ford Motor Company – Financials. (2019). Retrieved from https://shareholder.ford.com/investors/financials/annual-reports/default.aspx
  • Kiger, P. (2019). The Trucking Industry Is Gradually Embracing Autonomous Vehicles. Retrieved from https://auto.howstuffworks.com/tech-transport/autonomous-vehicles-trucking-industry-trends.htm
  • Newman, D. (2019). Top 6 Digital Transformation Trends In The Automotive Industry. Retrieved from https://www.forbes.com/sites/danielnewman/2017/07/25/top-6-digital-transformation-trends-in-automotive/#2a91583554e1
  • Trucks, SUVs, Crossovers, & Vans | 2018 GMC Lineup. (2019). Retrieved from https://www.gmc.com/
  • U.S. automotive market share 2018 | Statista. (2019). Retrieved from https://www.statista.com/statistics/343162/market-share-of-major-car-manufacturers-in-the-united-states/
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