Analyze the Reevaluating Union Trade Responses Essay
The following report shall analyse the importance of the implementation of the marketing philosophy and shall highlight the importance off this idea to be shared by all functions within the company including top management, finance, production right down to the customer service representatives. The report will also attempt to measure the degree and success of such an implementation with respect to the Ford Motor Co.
Henry Ford started his working life as an engineer for the Edison Lighting Company Detroit, in 1884. Ford by chance, came across a science journal written by Nicholas Otto, a German engineer who was developing the internal combustion engine. Ford became very interested, some say infatuated, and he decided to build his own. In the Following years Ford have become the worlds second largest car manufacturer in the world.
Until recent years the Ford Motor Co have famously used the production concept. An example of this is when “Henry Fords whole business philosophy was to protect the production of the Model T so that its costs could be reduced and in turn more people could afford it. He once joked you can have it in any colour as long as it was black.”(Kotler, 1996)
Since falling behind the Japanese manufacturers in customer focus and service terms, Ford have quickly changed their focus and concept and are attempting to implement an all pervading marketing philosophy in order to “win back the confidence of consumers”.
“Marketing must now pervade a business” entire operation to win the confidence of consumers”. (Jane Simms, Marketing Nov 23, 2000)
“The marketing concept provides a single prescription for running a business successfully. The consumer must be recognised and accepted as the focal point for all business activities and knowledge of consumer needs and wants should be a starting point for all major business decisions”. (Raymond and Barkinsale, corporate strategic planning and corporate marketing, Business Horizons, Vol 32, no3, 1989).
These definitions clearly indicate the pivotal role that a marketing philosophy and consumer focus play in the success of an organisation, if properly shared by all functions.
“The marketing philosophy can be expressed as the means of operating within an organizational philosophy, the philosophy will be regarded as the medium which governs all organizational life”. (Robert E. Morgan, Management decision, 1996).
This quote signifies how marketing can exist and operate as a company”s whole business philosophy. An example of a company who has begun to implement the marketing philosophy throughout all functions with considerable success is Ford Motor Co. After falling sales revenue due to focusing on production and finance orientations, Ford decided to become a market-oriented organisation.
“The market oriented firm is one which successfully applies the marketing concept. The term “market oriented” is preferred to “marketing oriented” as this highlights the organisational wide application“. (Sonny Nwanko, Journal of consumer marketing, Vol 12, Nov 1995).
Fords Application of the Marketing philosophy
Ford is zeroing in on the consumer and is currently in the first year of a five-year revitalisation plan to get back to basics and rebuild relationships with customers through the organization wide marketing philosophy.
According to Fords General marketing manager Daryl Hazel “our aim is to transform Ford from a solid performer as an automotive manufacturer to a superior performer as a customer focused company”.
Ford realise that their success in this proposed change:
“Depends on the degree of implementation of the marketing concept throughout the company”. (Bernard, 1987)
Ford is just one company who realise that the marketing must not be confined to the marketing department but must be organisational wide pervading all functions. Ford has used marketing for many years in the form of advertising and public relations. Now Ford are using the marketing discipline throughout the organisation they are achieving far better results. However, many companies struggle in implementing this concept due to a lack of understanding.
“Much of the confusion over the years in defining marketing and understanding the marketing concept results from a failure to make these three distinctions between marketing as a culture, as a strategy and as a tactic” (Webster, 1992)
This quote is referring to the error that many companies make that marketing is simply just advertising and selling rather than identifying the needs and wants of their customers and satisfying these desires through marketing information and strategies.
Ford have attempted to combat such errors by hiring more marketing people who understand these concepts and are able to clearly outline the company”s marketing objectives in order for all staff to understand these objectives, and in turn create satisfied customers. In order to satisfy these customers Ford must truly understand the psychological and social factors, which determines the customers” action.
“Market orientation is the organisation wide generation of market intelligence pertaining to current and future customer needs, dissemination of the intelligence across departments an organisation wide responsiveness to it”. (Kohli and Jaworski 1990)
This highlights that in order to maximise the relationship with a customer through marketing, a strong intelligence system must be developed to understand the current expectancy level of the customers.
To enable Ford to gain this information they conducted a market research survey of existing customers and discovered that after sales service was of paramount importance to their customers. Ford then devised and implemented a new customer service department, providing solutions and care to their customers. This came in the form of Ford Business Solutions allowing one point of contact for the customer without them being shunted around between departments looking for the appropriate member of staff to deal with their problem.
This allowed relationships between the company and customer to flourish. By significantly differentiating themselves from their competitors Ford have created outstanding value for their customers and also in turn they will find it easier to quickly anticipate their customers forthcoming needs due to the better understanding of the customer. This clearly illustrates the marketing philosophy permeating through the company and adheres to the following definition.
“Placing a major emphasis on the analysis of the target markets needs and wants, and delivering the desired satisfaction more efficiently and effectively than competitors”. (Kotler 1996).
The next step in the marketing objectives outlined by Ford was to assign brand managers to each product line. The main reason for this was to enable them to clearly understand the target market that a particular product line was aimed at, and in turn improve effectiveness and develop this consumer orientation accordingly.
“The necessity for firms to identify the basic customer needs and wants and define their product accordingly”(Levitt, 1960).
This idea has been clearly illustrated in the tactics employed by the brand managers of Ford. The customers who buy different products require different features and benefits from them and the brand managers at Ford must try to understand this and differentiate their product from similar products offered by competitors. An example of this within Ford is what added extras now come as standard with the product due to the customers needs and expectations escalating. Air conditioning, air bags, power steering and A.B.S. are features, which would have been paid for as extras only a few years ago, are now however appearing on the standard model of most of the Ford cars. This indicates that the brand managers, manufacturing team and the product development staff are effectively utilizing the marketing concept.
“We have had some very innovative ideas and campaigns as a result of having people focus on a particular market”. (Hazel, Marketing manager Ford).
The production and design team were also educated in the marketing concept to ensure this newly adopted marketing philosophy reached all functions of the business. By introducing the production and design team to strategies such as market research they were able to understand the customer they were designing and building the product for.
Through this research it was discovered that the customer no longer wanted the box shaped cars which the majority of car manufacturers were producing, but the consumers were beginning to desire a more aero dynamic look. Ford was able to react extremely quickly to this by releasing models such as the Ford KA and the Ford Focus. Older models such as the Ford Fiesta were rejuvenated and also giving a new aero dynamic shape.
“This promotes a more pragmatic assessment of the market place – one which is likely to reveal the customer as being at the heart of the organisations strategy process – a partner of the organisation”. (Nwanko, 1995).
“A truly high profile customer oriented organisation will, for example define its product in customer specific terms”. (Nwanko, 1995).
Ford achieved this through the launch of a customer magazine. The Ford magazine plays a pivotal role in the development of customer loyalty and prospecting programme to cement and improve Fords position as the United Kingdoms number one car manufacturer. The marketing philosophy is the major focus within the magazine; this is highlighted in a study using 40 focus groups concentrating on the target audiences and to create a reader empathy with a major feature on “Why I love my Ford” a photojournalism essay rare in such customer magazines. This allows Ford to build strong relationships with the customers.
Ford has also understood that measuring the satisfaction of the customers is a key element in the marketing philosophy. Therefore in addition to the thoughts on the product survey they have introduced a satisfaction and service experience survey. Studies are done as early as 90 days and as long as four years after the initial purchase. This definitely implies that Ford are beginning to successfully implement and understand the importance of this concept and how all departments have a part to play. Ford brand sales and service satisfaction continues to improve every month and so far in 2002, both measures are indicating an all time high.
This would clearly indicate that there is a certain degree of success with the introduction of the marketing philosophy and highlights the importance of it being shared by all functions in customer terms. Internal and third party measures of satisfaction provided by Ford credit and Hertz are also tracked. The customer in the provider contract category in a 2001 consumer financing study rated Ford credit highest. Internal satisfaction studies showed 84 percent of customers who finance or lease with Ford credit were completely or very satisfied and 90 percent would recommend Ford credit to friends and family members.
With the introduction of such ventures throughout the organisation it would appear Ford have a high degree of implementation of the marketing philosophy through all functions within the organisation.
“The marketing philosophy focuses directly on three key issues of customer orientation, integrated effort and profit direction”. (McGee and Spiro, 1998)
This quote highlights the three key aspects of the marketing philosophy and it would appear that Ford have adhered to this basic framework, although it is imperative that Ford do not rest on their laurels and must continue to develop this philosophy to maintain market share or achieve potential growth.
The aim must be to move to the next level of connecting with customers, and how they can introduce the new products they are launching to them. One key tactic, which would allow Ford to do this would be to attempt through marketing communications to latch onto a few small differences between their own products and the products offered by competitors and advertise these differences heavily.
Managers at Ford must also continue to be aware of the crucial role that market research can play in the company achieving this customer orientation. The role of market research in a customer orientation context is of extreme importance. It is imperative that Ford continue to constantly conduct market research in order to identify new and existing customers and their needs, help to set performance indicators, and in monitoring the companies” performance progress and finally to gain the information to help with the successful introduction of any changes. Such a process would ensure the continued development of the marketing philosophy through the organisation. If Ford can do this they will continue to be successful in the implementation of the marketing philosophy.
“Research indicates that companies which focus on boosting loyalty among customers and staff will reap the long term benefits”. (Donkin, 1997)
Ford must also understand that to achieve this the top level management must be focused on the marketing orientation.
“The pursuit of customer driven goals requires, first and foremost, a customer oriented attitude on the part of the organisations top leaders and customer driven organisational systems”. (Felton, 1959)
Therefore top management must be aware that to effectively implement this marketers should be leading cross functional teams to ensure this pan company marketing works as these marketers would ensure the following was properly managed:
“Customer focused techniques such as total customer experience and customer relationship management and correctly measuring every part of the organisation was evaluated against what it has contributed to these factors”. (Simms, 2000).
“Strategic customer orientation management presents a new opportunity for organisations and should be regarded as a positive and competitive marketing tool. A way forward is for managers to pay serious attention to the internal dynamics of the organisation: systems and structure, which were supportive of, and well attained to an overall culture of customer orientation” (Nwanko, 1995)
Ford are a company who seem to have understood this idea and set up a structure which allows support for all functions of the organisation to optimise the results of the customer orientation and hopefully gain new customers through this and retain existing customers in order to expand the business.
It is clear that Ford have had considerable success due to implementing the marketing philosophy throughout all internal functions of the organisation functions, however they must continue to develop this using the recommendations previously made. Constant monitoring of customers and their needs and wants in conjunction with analysing the actions of competitors is imperative for Ford to maintain or grow their market share .If Ford can do this they will have achieved their ambition of transforming from a solid performer as an automotive manufacturer to a superior performer as a customer focused company.