INTRODUCATION

Business Process Reengineering involves changes in structures and in processes within the business environment. The entire technological, human, and organizational dimensions may be changed in BPR. Information Technology plays a major role in Business Process Reengineering as it provides office automation, it allows the business to be conducted in different locations, provides flexibility in manufacturing, permits quicker delivery to customers and supports rapid and paperless transactions. In general it allows an efficient and effective change in the manner in which work is performed.

1.1 What is the Business Process Re-engineeringThe globalization of the economy and the liberalization of the trade markets have formulated new conditions in the market place which are characterized by instability and intensive competition in the business environment. Competition is continuously increasing with respect to price, quality and selection, service and promptness of delivery. Removal of barriers, international cooperation, technological innovations cause competition to intensify. All these changes impose the need for organizational transformation, where the entire processes, organization climate and organization structure are changed. Hammer and Champy provide the following definitions:Reengineering is the fundamental rethinking and

radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance such as cost, quality, service and speed.

Process is a structured, measured set of activities designed to produce a specified output for a particular customer or market. It implies a strong emphasis on how work is done within an organization. " (Davenport 1993).Each process is composed of related steps or activities that use people, information, and other resources to create value for customers as it is illustrated in the following example.

Business processes are characterized by three elements: the inputs, (data such customer inquiries or materials), the processing of the data or materials (which usually go through several stages and may necessary stops that turns out to be time and money consuming), and the outcome (the delivery of the expected result). The problematic part of the process is processing. Business process reengineering mainly intervenes in the processing part, which is reengineered in order to become less time and money consuming.

How can BPR be applied to an organization?When British Telecom had announced their Business Plan, all competitors were eager to find out who would be the new CEO of the organization. To the surprise of all the new CEO it was the customer. The company had decided to transform all the operations of the organization the way customers wanted them to operate. The most

important action in applying BPR is the company's strategic goal to provide customer oriented services. BPR is a technique used to implement this type of organizational structure.Having the management commitment for change, another very important factor for implementing BPR, is the enabling role of Information Technology. The way that businesses are organized around departments is very logical since, for instance, there were physical barriers in the communication of the accounting department with production department. (The warehouse could be in another location in the another part of the city). So it wasn't possible for a cross-functional team to communicate efficiently. In the 90s when telecommunication technologies were becoming abundant and low costing BPR was becoming a world-wide applicable managing technique for business upgrade, enabled by the technology. Employees can easily operate as a team using intranets/extarnets, workflow and groupware applications, eliminating distances. We can work together even though we are located in different places.

Empowering people. Empowerement means giving people the ability to do their work: the right information, the right tools, the right training, the right environment, and the authority they need. Information systems help empower people by providing information, tools and training.

Providing Information. Providing information to help people perform their work is a primary purpose of most information systems although they provide information in many different ways.

Some systems provide information that is essential in informing a business process, such as the prices used to create a customer’s bill at a restaurant. Other systems provide information that is potentially useful but can be used in a discretionary manner, such as medical history information that different doctors might use in different ways.

Providing Tools. In addition to providing the right information, empowering people means giving them the right tools. Consider the way planning analysts produce consolidated corporate plans based on plans of individual divisions and departmants. If the plans are submitted on paper, it is a major task to add up the numbers to determine the projected corporate bottom line. When the plan is changed during a negotiation process, the planning analyst has to recalculate the projected results. With the right tools, the numerical parts of the plans arrive in a consistent, electronic format prmitting consolidation by a computer. This leaves the analyst free to do the more productive work of analysing the quality of the plan.

Providing Training. Since information systems are designed to provide the information needed to support desired work practices, they are often used for training and learning. As shown by an expert system and a decision simulator, they sometimes provide new and unique training methods.IBM developed an expert system for fixing computer disk drives. The expert system was an

organized collection of the best knowledge about fixing these disk drives, and it fostered rapid and efficient training. Before the system was developed, technicians typically took between 1 and 16 months to become certified, but with the expert system, training time dropped 3 to 5 months.Eliminating Unproductive Uses of Time. Information systems can reduce the amount of time people waste doing unproductive work. A study of how professionals and managers at 15 leading U.S. corporations spent their time concluded that many professionals spent less than half of their work time on activities directly related to their functions. Although the primary function of salespeople is selling, the time breakdown for salespeople averaged 36 percent spent on prospecting and selling, 39 percent spent on prospectin an selling, 3 percent on servicing accouts, 19 percent on doing aministrtative chores, and 6 percent on training. Better use of information systems could save much of their unproductive time performing chores such as collecting product or pricing information, determining order status for a customer, resolving invoice discrepancies, and reporting of time and expenses.

Eliminating Uneccesary Paper. One common way to improve data processing is to eliminate unnecessary paper. Although paper is familiar and convenient for many purposes, it has major disadvantages. It is bulky, difficult to move from place to place, and extremely difficult to use for analysing large amounts of data. Storing data in computerized form takes much less physical space

and destroys fewer forests, but that is only the beginning. It makes data easier to analyze, easier to copy or transmit, and easier to display in a flexible format. Compare paper telephone bills with computerized bills for a large company. The paper bills identify calls but are virtually impossible to analyze for patterns of inefficient or excessive usage.

Eliminating Unnecessary Variations in the Procedures and Systems. In many companies, separate departments use different systems and procedures to perform essentially similar repetitive processes, such as paying employees, purchasing supplies, and keeping track of inveítories. Although these procedures may seem adequate from a totally local viewpoint, doing the same work in different ways is often inefficient in a global sense. Whenever the systems must change with new technology, new regulations, or new business issues, each separate system must be analysed separately, often by someone starting from scratch.

Minimizing the Burden of Record Keeping, Data Handling, and General Office Work. Since processing data is included in most jobs, improving the way people process data isan obvious place to look for information system applications. Focus on basic data processing tasks: Reducing the burden of record keeping means being more efficient and effective with the six components of data processing. Those components are capturing, transmitting, storing, retrieving, manipulating, and displaying data. Capture data automatically when generated: Capturing data automatically at the

time of data generation is especially important in minimizing the burden of record keeping.In depth, BPR assumes that the current processes in a business are inapplicable and suggest completely new processes to be implemented by starting over. Such a perspective enables the designers of business processes to disassociate themselves from today's process, and focus on a new process. The BPR characteristics - outcomes include the following:

Several jobs are combined into one. Decision-making becomes part of the job of employees (employee empowerment).

Steps in the processes are performed in natural order, and several jobs get done simultaneously. Processes have multiple versions. This enables the economies of scale that resultfrom mass production, yet allows customization of products and services. Work is performed where it makes the most sense. Controls and checks and other non-value-added work are minimized. Reconciliation is minimized by cutting back the number of external contact pointsand by creating business alliances. A single point of contact is provided to customers. A hybrid centralized/decentralized operation is used.

BPR is achieving dramatic performance improvements through radical change in organizational processes, rearchitecting of business and management processes. It involves the redrawing of organizational boundaries, the reconsideration of jobs, tasks, and skills. This

occurs with the creation and the use of models. Whether those be physical models, mathematical, computer or structural models, engineers build and analyze models to predict the performance of designs or to understand the behavior of devices. More specifically, BPR is defined as the use of scientific methods, models and tools to bring about the radical restructuring of an enterprise that result in significant improvements in performance.Redesign, retooling and reorchestrating form the key components of BPR that are essential for an organization to focus on the outcome that it needs to achieve. The outcome pursued should be an ambitious outcome (as for instance, are a 24 hour delivery to any customer anywhere in the world, approval of mortgage loans within 60 minutes of application, or ability to have on-line access to a patient's medical records no matter where they are in any major city in the world). These types of visionary goals require rethinking the way most organizations do business, careful redesign. They will additionally need very sophisticated supporting information systems and a transformation from a traditional organizational structure to a network type organization.In resuming, the whole process of BPR in order to achieve the above mentioned expected results is based on key steps-principles which include redesign, retool, and reorchestrate. Each step-principle embodies the actions and resources as presented in the table below.

1.2 Objectives of BPRWhen applying the BPR management technique to a business organization the implementation team effort is focused on the following objectives:

Customer focus. Customer service oriented processes aiming to eliminate customer complaints. Speed. Dramatic compression of the time it takes to complete a task for key business processes. For instance, if process before BPR had an average cycle time 5 hours, after BPR the average cycle time should be cut down to half an hour.

Compression. Cutting major tasks of cost and capital, throughout the value chain. Organizing the processes a company develops transparency throughout the operational level reducing cost. For instance the decision to buy a large amount of raw material at 50% discount is connected to eleven cross checkings in the organizational structure from cash flow, inventory, to production planning and marketing. These checkings become easily implemented within the cross-functional teams, optimizing the decision making and cutting operational cost.

Flexibility. Adaptive processes and structures to changing conditions and competition. Being closer to the customer the company can develop the awareness mechanisms to rapidly spot the weak points and adapt to new requirements of the market.

Quality. Obsession with the superior service and value to the customers. The level of quality is always the same controlled and monitored by the processes, and does not depend mainly on the person, who servicing the customer.

Innovation. Leadership through imaginative

change providing to organization competitive advantage.

Productivity. Improve drastically effectiveness and efficiency. In order to achieve the above mentioned adjectives the following BPR projectmethodology is proposed.

1.5 Characteristics of firms and service providersSeveral surveys and benchmarking findings reveal the essential role of consultants in the BPR process. Consultants' help and guidance may be extremely beneficial in all stages of the BPR procedure. This is due to the fact that consultants have the following attributes: They are objective and immune to internal politics. They have followed the process before.

They bring information and best practices from other companies. They are good communication paths between front line workers and customers, andthe leaders of the company or organization. Consultants, besides their beneficial qualities, can also unintentionally create barriersby: having the solution being viewed as "theirs" and not "yours", and taking too strong a lead role and disengaging the organization.The consultants may play different roles in the BPR procedure, and this is a matter for the company to decide always taking into account the organizations needs and the specific BPR approach chosen. The role of consultant may be: a strong facilitator and experienced practitioner

who brings a methodology withthem. a team member; can be an objective and unbiased contributor to the solution; a subject-matter expert with knowledge of performance levels and best practices ofsimilar organizations and processes; able to perform specific tasks for the team.

2 APPLICATION

2.1 Where the technique has being appliedMany public and private sector organizations and SMEs Word-wide had undergone major reengineering efforts. The technique was applied first to multinational cooperations, such as IBM, AT&T, SONY, GENERAL ELECTRIC, WALL MART, HEWLLET PACKARD, DEC, KRAFT FOODS having as a result major downsizing in their organizational structures.Later, the banking sector began to reengineer with a great degree of success such as CITIBANK , NORTHWESTERN BANK, BANK OF AMERICA and others. Major utility companies used reengineering as a technique to improve service like OTE, ELTA. BPR is also being used to change the organizational structure of public services. First the government cabinet of Egypt reengineered its

processes along with many Municipals in Europe. The public health sector is undergoing a major re-engineering in Europe using the CORBA methodology.As the technique was becoming well known to the business sector smaller enterprises were using the technique for organizational upgrade. Today most SMEs are investigating the re-engineering technique and a lot of them are applying re-engineering, since the technique is applicable and affordable to almost all SMEs. This is proved by the increasing demand for BPR consultants in Greece and worldwide.Most of the times re-engineering is applied as a "must" when innovative IT tools are introduced to SMEs. Tools such as SAP, BAAN and various ERP systems that promote the horizontal organizational structure are the vehicles for re-engineering the organizational structure in order to adapt to the horizontal operational subsystems of the tools. For the first time we can say " that IT does not only support management, IT changes the organizational structure". Today 120 businesses from small to medium size in Greece and thousands in Europe have installed such types of IT systems reengineering also their organizational structure.

2.2 Types of firms / organizations that BPR can be appliedBRP could by implemented to all firms (manufacturing firms, retailers, services, etc.) and public organizations that satisfy the following criteria:

Minimum Number of employees: 20 (at least 4 in management positions). Strong

management commitment to new ways of working and innovation.

Well formed IT infrastructure (requirements are presented in paragraph 2.4). Business Process Reengineering could be applied to companies that confront problems such as the following:

High operational costs Low quality offered to customers

High level of ''bottleneck" processes at pick seasons Poor performance of middle level managers

Inappropriate distribution of resources and jobs in order to achieve maximumperformance, etc.

2.3 Duration and implementation cost of BPRDurationThe BPR technique, in general, is not a time consuming process. The duration of each BPR project varies from 6 -to 10 months. This variation relates to the kind of business and the extend to which BPR is going to be implemented. Moreover, it depends on the techniques and methodology that each consulting company (that usually participates in the procedure) is using. For instance, BPR HELLAS, using the RE-engineering Methodology Oriented towards Rapid Adaptation (REMORA) proposes the following time schedule: Implementation CostThe implementation of a BPR project consists of two stages: 1. The process management and redesign study and consulting stage. 2. The

implementation of the redesigned process using IT tools including employeetraining and introduction of the new processes to the company organizational structure.The cost of a BPR for projects applied to SMEs for selective processes varies depending on the complexity of the business environment and the number of processes for reengineering In general, the following cost is applicable for each stage.INNOREGIO project S. Zygiaris, Msc, BPR Engineer BPR Hellas SA

2.4 Conditions for implementation (infrastructures required etc.)Infrastructure requirements: An operating transactional and accounting computerized system inclosing thecommercial part of the transactions. A network that connects all key personnel. Workstations with Windows NT or Windows 1995 system or latest version. An exchange server (MS outlook, or MS back office or Lotus Notes)

2.5 European Organizations Supporting the Implementation of BPRThe importance and the need for Business Process Reengineering in the small and medium enterprises and to bigger companies as well, is great. The European Commission has acknowledged this situation and promotes BPR and supports the efforts of SMEs to proceed to reengineering. Under the ESPRIT and the latest IST programmes, there is a number of projects such as the COBRA (URL www.imsgrp,com), and ROCHADE (URL www.gsm.ch/rochade).BPR supporting organizations WARIA. The

Workflow And Reengineering International Association. URL http://www.waria.comBPRC. Business Processes Resource CentreURL:http://bprc.warwick.ac.uk/index.html

3 IMPLEMENTATION PROCEDURE OF BPR

3. 1 Steps / Phases of a BPR projectA BPR project consists of specific steps aiming to a successful outcome.. The necessary steps in a rapid re-engineering methodology are the following as they presented in figure

STEP ZERO - preparation and coordination of the project. Duration: Two days Participants: BPR team, BPR consultants.. Objectives: To establish a strong management support To explain to the members of the BPR implementation team the implementation details of the project and their role in the successful outcome in the BPR effort.Actions taken: Explain to the top-level management the necessity to commit to the BPR project. Allocate the most capable employees to the BPR implementation team and assignroles for each one of them.Run an 8-hour workshop having as participants the members of the BPR implementation team. The consultants will present the project step by step, as well as, the role of the implementation team in the success of the project.

STEP 1 - Business diagnosis & measurements.Duration: 4 weeks Participants: BPR team, BPR consultants, personnel involved with processes Objectives: To diagnose & identify problematic areas in the current processesTo measure the performance characteristics of the current processes based on measurable factors such as average cycle time, delays, number of mistakes or number of customer complaints.Actions taken: Diagram each process using a process management tool such as OPTIMA, ADONIS or BONAPART (see annex A-1). Record physical on the site measurements for each step of a process related to time, resources spent or efficiency (see annex A-3). Input all measurements in the process management tool for further evaluation and analysis. Identify added value processes that have a major impact on customer service.

STEP 2 - Selection of processes for change and modeling. Duration: 7 weeks

Participants: BPR team, BPR consultants. Objectives: To identify the strategic processes that are feasible to change To redesign and model the selected processes Actions taken: Set the characteristics of the processes that are more important to the organizational goals Based on the characteristics identify the processes that will change based on the added value they provide and their feasibility for change. (see annex A-3).

Redesign processes based on the characteristics that serve the organizational goals

Simulate the processes in running environment using the process management tool(see annex A-1) Model the new process using the diagramming tool of the process management tool

STEP 3 - Technical design of the solution. Duration: 10 weeks Participants: BPR team, BPR consultants, IT experts. Objectives: To automate modeled business processes (step 2) using networks and workflow tools To redesign and model the selected processes Actions taken: Establish network connections between process team members.Prepare intranet applications to exchange forms and documents between team members Prepare workflow application that will implement each step in the redesigned process automatically.(see annex A-2).

STEP 4 - Personnel adjustment & training. Duration: 10 weeks Participants: Process team members, process coordinator, trainers. Objectives: To train personnel in the new ways of working using IT in the redesigned processes. To redesign and model the selected processes Actions taken: Adjust each position according to skills needed in the new process. Provide training in the operation of new processes, so employees will feelcomfortable in the changing job environment

STEP 5 - Management of change & employee empowerment. Duration: 1 week Participants: BPR team, BPR consultants, process team, executive management. Objectives: To establish a positive attitude for the change between employees To minimize the resistance to change between employees by empowering theirposition based on performance appraisal and bonus systems.Actions taken:Establish executive management determination for change and determinate any attempts of resistance to change. Facilitate the change process outlining the positive effects of change

STEP 6 - Introduction of new processes into business operations. Duration: Day and time are set by executive management Participants: The whole business organization Objectives: To set the time and date of operating under the new processes, emphasizing the fact that working under the old processes is not an acceptable practice.

Actions taken:Prepare and test all background resources (IT, documents, equipment) Set time and date for operating under the new processes. Do not allow any non-conformities in the operations of new processes

STEP 7 - Continuous improvement. Duration:Runs dynamically and continuously after the

end of the project Participants: BPR implementation team Objectives: To capitalize from the BPR project and develop internal experts for other BPRprojectsActions taken: Periodically evaluate the performance of business processes Plan the time and the resources for the next reengineering project.

3.2 Partial techniques and tools included in each stepThe tools and techniques are explained in each step in paragraph 3.1 with related references to the annex.

3.3 Related SoftwareThe are two categories of software used in implementing a BPR project 1. Process management tools, used for the design, performance evaluation of process (see annex A-1). 2. Workflow applications for implementing modeled processes (see annex A

FORD MOTOR VISIONThough Henry Ford was responsible for revolutionary advances in manufacturing it is not as often noted that the Ford Motor Company was an unusual leader in the establishment of American big business because of the firm's tightly-controlled and (by general big-business standards) under-capitalized nature. Ford's decision to adapt the assembly line notion to his own product met with enormous success and he was able to outstrip all his competitors very rapidly. The center of Ford's vision, however, was not the use of the assembly line but the idea that cars could belong to anyone and that he could produce and sell a practical, affordable vehicle in mass quantities. The combination of Ford's inventiveness and practicality with his own stubbornness and the skill of his colleagues made the company into a big business that did not, at first, fit the mold. The Ford company is a case study in the practicalities of manufacturing that, when combined with the opportunity to create a major new industry, made it possible to proceed in a different manner than many of the big businesses that emerged in the early part of the century.

Henry Ford (1863-1947) was a trained machinist who was fascinated by the new horseless carriages. He began to experiment with car building in the early 1890s and by 1896 he had built his first car. It was only the sixth gasoline-powered automobile to be built in America. Over the next six years Ford tried repeatedly to get his car into production. In which he would be able to put his own ideas to work. The Ford Motor Company was incorporated in 1903 "with an authorized capitalization of $150,000, all common stock, of which $100,000 was issued." Malcolmson

guaranteed production financing up to $3,000, which was an important incentive to other investors. There were ten other subscribers, most associated with Malcolmson. The Dodge brothers, John and Horace, paid their $5,000 subscriptions with promissory notes that were later paid off by the profits from Ford business obtained by their machine shop. James Couzens paid $1,000 in cash and signed a promissory note for $1,500. In all, the new company received only $28,000 in cash and, "according to a Ford publication issued in September, 1920, this was all the cash ever paid in on its capital stock." At the beginning the new company proceeded as all car makers did. Foundries produced the castings which were then tooled into individual parts. The parts were then assembled into components (such as magnetos) and finally there was "the assembly of thousands of parts and components into the motor vehicle." The production of parts and components was a capital-intensive undertaking and demand for luxury cars tended to suffer.” 

MISSION

Ford Motor Company is a worldwide leader in automotive and

automotive-related products and services as well as in newer industries

such as aerospace, communications and financial services. Our mission is

to improve continually our products and services to meet our customer’s

needs, allowing us to prosper as a business and to provide a reasonable

return for our stockholders, the owners of our business. The missions can

be listed as following:

Products : Our products are the end result of our efforts, and they

should be the best in serving our customers worldwide. As our

products are viewed, so are we viewed.

Profits : Profits are the ultimate measure of how efficiently we provide

customers with the best products for their needs. Profits are required

to survive and grow.

Customers are the focus of everything we do. Our work must be done

with our customers in mind, providing better products and services

than our competition.

Continuous improvement is essential to our success. We must strive

for excellence in everything we do: in our products, in their safety

and value, and in our services, our human relations, our

competitiveness and our profitability.

Employee involvement is our way of life. We are a team. We must

treat each other with trust and respect.

Dealers and suppliers are our partners. The Company must maintain

mutually beneficial relationships with dealers, suppliers and our

other business associates.

Integrity is never compromised. The conduct of our Company

worldwide must be pursued in a manner that is socially responsible

and commands respect for its integrity and for its positive

contributions to society. Our doors are open to men and women alike

without discrimination and without regard to ethnic origin or

personal beliefs.

ABOUT THE COMPANY

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 DaimlerChrvsler (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 Time 16, 1903. Ford now encompasses many global brands, including Lincoln and Mercury of the US, Jaguar and Land Rover of the ll K. and Volvo of Sweden. Ford also owns a one-third controlling interest in Mazda. [20] 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.

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.

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. STEVE BRIVLAN -- Country Manager, Ford Credit

Executive Summary

Ford Motor Company is currently trying to increase its global market share in automobile sales while facing slumping market share numbers in the United States.  This report examines the Ford company characteristics and how the company uses information systems in the business climate.  Ford believes that having solid relationships with their employees, dealers, suppliers, and stakeholders allows them to have an advantage over their competitors.  Healthy professional relationships are helpful to a company’s success but being able to attract customers to your products will increase sales.  Ford has recently introduced new vehicle architecture to try and attract new buyers.  The largest innovation for Ford has been the introduction of their Hybrid cars.  Ford reported an October sales drop of 23.5 percent as compared to a year ago.  The new measures Ford is taking with their automobile design are expected to help those numbers reverse in the future. 

            Ford sales have also under performed in the global markets although the company is taking steps to increase sales while reducing costs.  Ford has recently entered new markets, most of which are located in the Asian-Pacific region.  To reduce costs and increase knowledge of a region Ford uses small ERP systems that are less expensive and faster to implement than the larger ERP systems.  Failure to obtain a larger market share in foreign markets has hurt the company.  Ford got a late start entering the automobile market in China, compared to competitors, and now controls less than one percent of the market share.  To add to the situation the Chinese government has high taxes on automobiles that can increase the price up to 100 percent or more.  The future of Ford is headed towards a reported implementation of SAP throughout its North America organization.  The proper use of information systems by Ford will increase their ability to maintain a successful business in future years locally and globally.

The Ford Motor Company is an ever-changing business that tries to stay ahead of its competitors in America and at the global level.  Ford’s mission is to build great products, strong business and a better world.  To accomplish that mission the Ford Company believes that not just quality and cost awareness are the only things that matter, but also a solid relationship with their employees, dealers, suppliers, and every Ford stakeholder (Ford motor company, 2004).  With these ideals Ford is proud to be a company with family-based values that allows Ford to have a competitive advantage over its competitors.  With this competitive advantage Ford believes that everything they do affects the people they serve from quality and safety of their products to the social and environmental impact on their customers every day lives.  The strategy for Ford will be to continue to deliver exciting new products, improve quality and customer satisfaction, improve market share and revenue in all regions, and improve results at all automotive operations.  To accomplish this strategy Ford has put pressure on senior leaders to develop a true family culture.  To do that the Ford company will have to cultivate a workplace that: attracts and retains the best people, allow them to work at full potential, encourage continuous development and mutual benefit, and promote teamwork while embracing differences and diversity.            The keys to Ford’s strength are the products.  There were forty new products in one year, because of their new realigned vehicle architecture.  This allows Ford to produce a greater variety of attractive and competitive vehicles with more shared components and less complexity (Ford motor company, 2004).  But the biggest innovation for Ford is the hybrid.  Ford can take advantage of this because they have their own patented hybrid technology and proprietary drive system and

electronic controls.  Many competitors have not even considered hybrids and when they do Ford will already be a step ahead of them.  Currently, Ford offers the Escape Hybrid which has seventy-five percent better fuel economies, especially in the city.  Plus, the Escape Hybrid can do anything the regular Escape can do and has the same features.  In the next three years Ford plans on releasing four more hybrids.  Ford also has a service for their customers, the Ford Motor Credit Company, which offers many competitive ways for their customers to own Ford vehicles.  It’s the only product that does not have wheels and it’s the finishing piece to Ford’s core businesses.  (Ford motor company, 2004)            Ford North America holds half of Ford’s volume worldwide, but their market share was down from 20.5% in 2003 to 19.3% in 2004.  Ford is committed in the year 2005 to raise the market share in Europe, South America, and Asia.  To do this Ford must still be focused on America and Europe, and start to set up markets in other countries like China that are just starting to make an impact on the world market.  Right now North America and Europe account for two-thirds of today’s market, but by 2014 it will only account for half of the world markets (Ford motor company, 2004).  Ford has made gains in other areas as well; net income where Ford had an improvement of $2.992 billion from 2003, total sales and revenue were up $7.3 billion from 2003, also worldwide vehicle unit sales and European market share were up from 2003 (Ford motor company, 2004).             Technology and information systems are very important to the Ford Company.  Because of Ford’s global scale, information needs to be timely so managers can make important decisions.  With the addition of technology, Ford can make better products at a cheaper price; meanwhile it makes the infrastructure of Ford that much more complicated.    Ford tries to introduce new technologies so that environmental and safety features can be added to vehicles before law requires them.  One way technology and information systems are helping Ford is in the manufacturing of the vehicles.  In established markets such as Europe, North America and Japan, Ford has plants with flexible manufacturing, that allows Ford to produce a number of different vehicles in a single location.  It enables Ford to add a vehicle line or change over to a new model by reprogramming, rather than retooling, the vast machinery involved (Ford motor company, 2004).  Ford continues to be a leader in automotive technology and information systems, and will continue to forge ahead to create better quality products.

As the World’s second largest vehicle maker and the World’s largest truck producer Ford Motor Company must be able to maintain global market share while keeping the global company connected through company intranets and extranets.  Ford Motor Company recently reported

a drop in automobile sales of 23 percent.  If Ford is going to turn in better numbers in car sales it will have to be an increase in sales not only in America but globally.            While operating a business over multiple continents, in multiple languages, and across multiple time zones Ford is trying to keep the company focused on delivering greater value to its customers.  To keep the organization and its employees connected over large distances Ford is using a system called eRoom.  This technology allows Ford teams to work collaboratively over the Web to connect resources and people.  The result of Ford using this system has lead to cost savings in the following areas: time savings, reduced IT costs, and reduced co-location costs.  Time is saved using eRoom through increased data sharing and the ability to access documents faster.  Replacing many Ford departmental websites with eRoom will reduce IT costs by doing away with IT overhead associated with building and maintaining those websites.  Reduced co-location costs will be made through reduced travel costs, video-conferencing costs, and reduced information transmission costs.  These reduced costs and the increase in information accessibility are the result of one of the key ways Ford is continuing to compete globally.            Ford is also implementing smaller ERP systems in regions where they have just recently entered the market.  Ford China’s IT infrastructure is based on a small ERP from QAD Inc. called Mfg/Pro. This ERP is Ford’s standard program for all new markets.  Extensions to the standard ERP software make it possible for Ford to comply with foreign practices and government mandated financial statements. Each time a system is deployed in a new market the company gains valuable experience and knowledge that helps the company in future deployments in other new markets.  The implementation of a smaller ERP results in quick installation, lower costs than a large ERP, and quick knowledge into the new market.  This small ERP system is another factor for Ford’s global success.            No matter what measures any company that competes globally uses to increase its competitiveness there are also factors that present problems.  A couple such factors lie in the Asian market that is expected to have an increase in the global automobile market share.  Problems with Ford entering this market share include China’s recently flat market for automobiles, a focus on the development in housing instead of roads, and government vehicle taxes.  The vehicle taxes are so high that they can raise the price of an automobile 100% or more.  Any shift in priorities or lift of government constraint is labeled as an educated guess.  Although Ford is now competing in the Chinese market their late start, compared to

other competitors already in the market, has left the company with less one percent of the market share.            The recent drop in sales of 23 percent reported in October of 2005 as compared to a year ago is, in part, a result of increased gasoline prices.  The price increase has pushed new car buyers towards buying more fuel-efficient cars.  November sales are expected to drop as much as 15 percent which would imply that more recent drops in fuel prices have apparently failed to turn around Ford’s sales numbers.  On the other side of the equation the reducing market share for Ford has been offset by an increase of U.S. market share by Toyota.  The future of Ford Motor Company’s success strongly relies on the company increasing market share globally while keeping their sales consistent in the U.S.             There are many determining factors when it comes to running a successful company. Those factors are production, management, office, and sales/marketing.  You need efficient information and knowledge to keep these elements of the company running smoothly.  It is very important to have departments that concentrate heavily on a daily basis to improving the output to lead to better production and marketing strategies.  Sales marketing is all about how you present your product and will it reach the public with a positive influence.  This is the key to keeping your company running and continuing to excel and compete against others.  You need knowledge and information about what the people want to get your product out there so it will be known.  People need to be aware of the product so they have an urgency to buy it.  Information is power and is the key to running the best possible company that you can run. With loads of information gives you an edge on the competition.  Production, management, office, and sales marketing go hand in hand you need specific and current information to keep these departments running smoothly.  Knowledge is the key with the right information you can keep all of your departments on the right path. 

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 car makers 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. .

aintenance 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. 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 segmTHE

The Car that changed India: The Maruti 800 was essentially a Suzuki SS80, which was called the Fronte in Japan and A/tom most of the other markets. The 796cc, in-line, three-cylinder power plant produced 39.5bhp at 5500rpm.

Maruti marked the beginning of a revolution in the Indian automobile industry. The Maruti 800, with its compact size, nimble handling and perky engine, offered the Indian motorist a cheaper, friendlier alternative. On l4LhDecember 1983, Harpal Singh became Maruti’s first customer as he received the keys of his Maruti 800 car from Prime Minister Indira Gandhi. The car cost Rs.48,000. The new Maruti, launched in June 1986, cost approximately Rs 15,000 more than the outgoing model.

FORD PRODUCTS

FORD IKON

SPECIFICATIONS

Engine Ikon 1.3 Rocam Ikon 1.4 DuraTorq TDCi

Type 4-In-line 4 in-Line

Fuel System SEFITDCi common

rail

Displacement (cc) 1297 1399

Compression Ratio 10.2 : 1 18.0 : 1

Max. Power (ps/rpm) 70PS/5500 68PS/4000

Max. Torque (nm/rpm) 105/2500 160/2000

Emission Stage Bharat stage III Bharat stage III

Transmission type 5 Speed manual 5 Speed manual

FORD ENDEAVOUR

Engine Endeavour 3.0L 4x4

Endeavour 2.5L 4x2

Type

3.0 Litre TDCi with Variable

Geometry Turbocharger

(VGT)

2.5 Litre TDCi with Variable

Geometry Turbocharger

(VGT)

Displacement (cc) 2953 2499

Max. Power (ps/rpm)156 PS (115 Kw)

@ 3200rpm143 PS (105 Kw)

@ 3500rpm

Max. Torque (nm/rpm)380 Nm (38.7

kgm) @ 2500rpm

330 Nm (33.7 kgm) @ 1800rpm

ValveDOHC, 16

ValvesDOHC, 16

Valves

Fuel SystemDirect injection

common railDirect injection

common rail

Transmission Endeavour 3.0L 4x4

Endeavour 2.5L 4x2

Transmission5 speed

Automatic5 speed manual

4x4 TransferElectric Shift on

FlyN/A

FORD FIESTA

SUSPENSION

1.6 Duratec

Exi

Fiesta 1.6 Duratec

Exi Limited

1.6 Duratec

Zxi

1.6 Duratec

Sxi

Front Independent

McPherson struts

with offset coil spring /

twin tube gas

damper units & lower L-arms with optimised

bushes mounted

on seperate cross-

member with

stabiliser bar. Dual-

Independent

McPherson struts

with offset coil spring /

twin tube gas

damper units & lower L-arms with optimised

bushes mounted

on seperate cross-

member with

stabiliser bar. Dual-

Independent

McPherson struts

with offset coil spring /

twin tube gas

damper units & lower L-arms with optimised

bushes mounted

on seperate cross-

member with

stabiliser bar. Dual-

Independent

McPherson struts

with offset coil spring /

twin tube gas

damper units & lower L-arms with optimised

bushes mounted

on seperate cross-

member with

stabiliser bar. Dual-

path body mounts.

path body mounts.

path body mounts.

path body mounts.

Rear

Semi-independent heavy

duty twist-

beam with low

package height coil

springs & seperate twin tube dampers. Dual-path

body mounts.

Semi-independent heavy

duty twist-

beam with low

package height

coil springs & seperate twin tube dampers. Dual-path

body mounts.

Semi-independent heavy

duty twist-

beam with low

package height coil

springs & seperate twin tube dampers. Dual-path

body mounts.

Semi-independent heavy

duty twist-

beam with low

package height coil

springs & seperate twin tube dampers. Dual-path

body mounts.

Shock absorbers (Front & Rear)

Gas Filled Gas Filled Gas Filled Gas Filled

BRAKES 1.6 Duratec

Exi

Fiesta 1.6 Duratec

Exi Limited

1.6 Duratec

Zxi

1.6 Duratec

Sxi

FrontVentilated

DiscsVentilated Discs

Ventilated Discs

Ventilated Discs

RearSelf

Adjusting Drums

Self Adjusting

Drums

Self Adjusting

Drums

Self Adjusting

Drums

FORD FIGO

ENGINE 1.2 Duratec Petrol LXI

1.2 Duratec Petrol EXI

1.2 Duratec Petrol ZXI

1.2 Duratec Petrol

Titanium

Displacement (cc)

1196 1196 1196 1196

Type16V

DOHC16V

DOHC16V

DOHC16V

DOHC

Fuel system SEFI SEFI SEFI SEFI

Max. power (ps(kw)/rpm)

71 (52.4) @ 6,250

71 (52.4) @ 6,250

71 (52.4) @ 6,250

71 (52.4) @ 6,250

Max. torque (nm(kg-m)/rpm)

102(10.4) @ 4,000

102(10.4) @ 4,000

102(10.4) @ 4,000

102(10.4) @ 4,000

SUSPENSION 1.2 Duratec Petrol LXI

1.2 Duratec Petrol EXI

1.2 Duratec Petrol ZXI

1.2 Duratec Petrol

Titanium

Front Independent McPherson strut with

Independent McPherson strut with

Independent McPherson strut with

Independent McPherson strut with

dual path mounts

dual path mounts

dual path mounts

dual path mounts

Rear

Semi-Independent twist beam, Coil springs

Semi-Independent twist beam, Coil springs

Semi-Independent twist beam, Coil springs

Semi-Independent twist beam, Coil springs

SteeringHydraulic

power assisted

Hydraulic power

assisted

Hydraulic power

assisted

Hydraulic power

assisted

BRAKES 1.2 Duratec Petrol LXI

1.2 Duratec Petrol EXI

1.2 Duratec Petrol ZXI

1.2 Duratec Petrol

Titanium

FrontVentilated

DiscVentilate

d DiscVentilated

DiscVentilated

Disc

Rear Drum Drum Drum Drum

CONCLUSION

FORD HAS PROVIDES A WIDE RANGE OF CARS IN THE INDIAN MARKETS AS MENTIONED ABOVE, IT HAS TARGETTED THE INDIAN MARKET WITH A PURCHASING POWER OF APPROX. 4.75 LAKHS.CONSIDERING THE INDIAN MARKET TYPE WHERE THE CONSUMERS CAN BE SUB- DIVIDED IN VARIOUS CATEGORIES DEPENDING ON THEIR INCOME BRACKETS STARTING ROM APPROX 1 LAKH TO ANY AMOUNT. BUT THE CONSUMERS ARE MAINLY CONCENTRATED IN THE 2.75 TO 20 LAKHS BRACKET WHICH HAS BEEN PAID A SERIOUS AMOUNT OF ATTENTION BY THE FORD MARKETING TEAM THUS, FOCUSING ON THE CUSTOMER’S DESIRED WANTS AND RELATED PRODUCTS IN THE INDIAN MARKET SCENARIO.

STP – Segmentation, Targeting, Positioning

Segmentation

The main reason why we have Segmentation is because we have so many types of customers.

The reason why Segmentation has become important in teaching and learning about marketing is because these groups of different customers have:   1. become more numerous, we have many more types of segments   2. The differences among groups have become more distinct   3. The groups have become large in number

Criteria for Segmentation - things you have to think about in order to decide if a potential group is worthwhile being considered a "segment"

1. Homogenous  - are the people in the proposed segment all similar without too many differences - you could say right handed people is a segment, but.... if half the right handed people were women, and half were men, then this might not work if the gender also was an issue. 

2. Heterogeneous - the people between the segments should be very different - right handed and left handed might not be worthwhile if you are talking about a market segment for a product like pull-on boots

3. Substantial - the people in the segment should be large enough in number to be worthwhile - right handed men might be a large enough segment - right handed men, who wear glasses, and speak Spanish and right motorcycles might be too small - the group has to be large enough to "generate sufficient sales volume at a low enough cost to result in a profit " says Sommers 10th Ed. 

4. Competition Sommers 10th Ed. suggests that a company should target segments "where the number of competitors and their size are such that the firm is able to compete effectively"  example - some people buy trucks, some SUVs and some cars and some mini-vans - some companies have a product segment devoted to truck buyers, like Ford - car companies, like Nissan and Toyota might be advised to avoid selling trucks in North America because the competition is intense and they might not make a profit.

5. Resources Sommers 10th Ed. suggests that a company should make sure the segment relates to the resources of the company. If the company can mfg. variations to fit its key demographics, great, but it should not take on additional demographics if it does not have the capability example - a lingerie company taking on plus sizes - which would mean reconfiguring the fabric pattern cut-out which would effect fabric cost, waste amounts, etc. 

.

Targeting

Ford Motor Company President and CEO Alan Mulally revealed the much-anticipated new car to be produced in India. Called the

new Ford Figo, the car was unveiled at a press event in Delhi as a major addition to the Ford India brand portfolio.

Mulally’s visit underscores the strategic importance of India in Ford’s future plans. He stated the new Ford Figo is designed and engineered to compete in the heart of the domestic India car market.

The new Ford Figo will be manufactured at Ford’s expanded integrated manufacturing facility near Chennai, which is undergoing a $500 million transformation to become a regional centre of excellence for Ford small car production.

The importance of Ford Figo extends beyond India’s borders. Ford’s investment in its Chennai plant gears it for eco-friendly volume production and positions Ford India to become a major export producer.

DELHI, India, Sept. 23, 2009 – India’s role as an important player in the future of Ford Motor Company’s international strategy was underscored today when the company’s President and CEO, Alan Mulally, unveiled an all-new car targeting the heart of the Indian car market – the new Ford Figo.

The Ford Figo, a new nameplate and a fresh face on the Indian market, signals Ford’s intention to compete in India’s largest and most important small car market segment.

Ford Figo is the result of a significant Ford investment commitment to expand its plant near Chennai for volume production as a small-car centre of excellence regionally. Ford’s $500 million investment has doubled the plant’s production capacity to 200,000 units per year and introduces major advances in high-quality automation and innovative, eco-friendly production techniques.

“Our exciting new Ford Figo shows how serious we are about India,” Mulally said. “It reflects our commitment to compete with great products in all segments of this car market. We are confident the Ford Figo will be a product that Indian consumers really want and value.”

Ford Figo is designed and engineered to compete in India’s small car segment, which accounts for more than 70 percent of the new vehicle market. It leverages Ford’s small-car platform architecture, sharing underlying technology with the Ford Fiesta, already familiar to Indian drivers.

Positioning

Ford unveiled its 2010 product lineup, which includes the return of the Taurus sedan, a restyled Ford Flex crossover with its patented EcoBoost engine, a high-performance version of its popular F-150 pickup truck, and restyled Lincoln MKS and MKT vehicles.

On his blog, www.autoextremist.com, Detroit-based automotive industry analyst Peter DeLorenzo wrote about Ford’s unveiling of its product mix to a group of automotive journalists.

“It became quickly apparent to everyone that this company is more than just on the move, they are aggressively boosting their presence in the market with an array of impressive products that will transform the company,” DeLorenzo wrote. “Over the next 18 months, Ford will have the freshest, most contemporary lineup in the business and the newest fleet of vehicles — in terms of age — on the road.”

That product lineup “is going to pay off big-time” for Ford, DeLorenzo wrote.

They also have scaled back manufacturing operations to align supply with demand and have taken steps to create a global manufacturing platform that will allow the company to use common technology and suppliers for vehicle offerings worldwide.

Ford reported that it had a profit of $2.3 billion in the second quarter, compared with a loss of $8.7 billion a year earlier.

Revenue for the period declined 40 percent, to $27.2 billion from $41.1 billion a year earlier.

Ford and its competitors must aim at a moving target in trying to figure out what will sell. Consumer demands shift continuously, depending on the state of the economy and changes in fuel prices.

“The days of selling 400,000 or 500,000 units of any vehicle, except maybe the F-150, are over,” Hinrichs said. “Now we need to figure out how to make the same money selling lower volumes. The best way to do that is to go after a number of smaller niches.”

“Ford’s in a pretty good position, both from a product standpoint and a reputation standpoint,”

SWOT ANALYSIS

Strengths

-4th on the Fortune 500 List (U.S. only)-4th on the Global 500 List-39th on the Best Companies for Minorities List-One of world’s best known brands

-Their Web strategy has cut car build costs by as much as $380 per car-Have already invested heavily in alternate fuel sources-Ford are seen as supportive eg - Gave Generously after the September 11 Attacks - Give Generously to Help Fight Breast Cancer - Support Racing Teams, NASCAR, Formula One Etc

Weaknesses

-Firestone Tire recalls caused Stock Price to Suffer--$14.70, LowestIn Years-CEO Jacques Nasser and Chairman Bill Ford Jr. could not get alongLeading to Bill Ford taking over as CEO-Cash Reserves Have Sunk to $4.1 Billion-$13 Billion on Acquisitions-$3.5 Billion to Cover Tire Recalls-Sometimes seen as "safe", "boring"

Opportunities

-Have a chance to become more environmentally friendly with cleanerengine emissions and by working with environmental groups to helpclean the environment-Ford have already started investing in Solar Power ,and have a chanceto become a market leader-They can use their Web strategy to cut costs further-They can take advantage of their perceived generosity by giving tomore charities and using the fact in their targeted advertising.

Threats

-Competition is huge.-Internal strife will hurt the company.-Threat of substitute products such as Natural gas, Electricity,Ethanol, Vegetable oil, Sunlight, Water-Intensity of Rivalry among competitors worldwide

-Worldwide markets threatened due to the "War on Terrorism"

MARKETING STRATEGY OF FORD

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 oilers, 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.

PROCESS MARKETING AND PROMOTIONS 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

1. Identifying markets 2.Market segmentation 3. Target marketing 4. Positioning through marketing strategies 5. Pricing decisions 6.distributi on promotion to final This input, in mm, 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. 7. Product Opportunity 8.Competitive analysis 9.Target marketing 10. Buyer 11. Ultimate consumer 12.Consumers Businesses 13. Channel 14. Promotional decisions 15.Advertising 16.Direct marketing 17.Interactive marketing 18.Sales promotion 19.Public relations 20.Personal Purchase 21.Promotion to trade Resellers

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 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:

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 linkage 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. 1.Developing a market-product grid to relate the market segments to the firm’s products or actions. 2.Selecting the target segments toward which the firm directs its marketing actions. 3.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 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....” Michael 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? - 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 target 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 mix Advertise in Direct Interactive Sales Publicity/ marketing promotion Public • internet facilities

Advertising:

Personal selling 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. 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 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 note of them, he will ensure that his marketing mix suits the environmental variables. And, it’s factors that renders that 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 prepares 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 McCarthyhas 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. 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 in spite of strong competition. The cost advantage can emanate from different factors like, scale economies, early 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. 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, n Differentiation based on Quality, Operational Efficiency, Technology, and Service. Digital Marketing is the practice of promoting products and services using digital distribution channels to reach consumers in a timely, relevant, personal and cost-effective manner. Whilst digital marketing does include many of the techniques and practices contained within the category of Internet Marketing, it extends beyond this by including other channels with which to reach people that do not require the use of The Internet. As a result of this non-reliance on the Internet, the field of digital marketing includes a whole host of elements such as mobile phones, sms/mms, display / banner ads and digital outdoor. Word of mouth, is a reference to the passing of information by verbal means, especially recommendations, but also general information, in an informal, person-to-

person manner. Word of mouth is typically considered a face-to-face spoken communication, although phone conversations, text messages sent via SMS and web dialogue, such as online profile pages, blog posts, message board threads, instant messages and emails are often now included in the definition of word of mouth. There is some overlap in meaning between word of mouth and the following: rumor, gossip, innuendo, and hearsay; however word of mouth is more commonly used to describe positive information being spread rather than negative, although this is not always the case. Word-of-mouth promotion, also known as buzz marketing and viral advertising, is highly valued by advertisers. It is believed that this form of communication has valuable source credibility. Research points to individuals being more inclined to believe WOMM than more formal forms of promotion methods; the receiver of word-of-mouth referrals tends to believe that the communicator is speaking honestly and is unlikely to have an ulterior motive (i.e. they are not receiving an incentive for their referrals). In order to Promote and manage word-of mouth communications, marketers use publicity techniques as well as viral marketing methods to achieve desired behavioral response. Influencer marketing is increasingly used to seed WOMM by targeting key individuals that have authority and a high number of personal connections. It is an advanced form of word of mouth marketing (WOMM) in which companies develop customers who believe so strongly in a particular product or service that they freely try to convince others to buy and use it. The customers become voluntary advocates, actively spreading the word on behalf of the company. Evangelism literally comes from the three words of ‘bringing good news’ and the marketing term justly draws from the religious sense, as consumers are literally driven by their beliefs in a product or service, which they preach in an attempt to convert others. 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. 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 refers to the offer of an article of merchandise as an incentive in or to sell the product.

CONCLUSION

Although Ford Motor Company is one of the largest companies in the world, we canstill attribute accounting trends to some of the key events in Ford's history.In 1990, Ford acquired Jaguar Cars, Ltd. Jaguar was a company sufferingterrible loses due to poor quality, and lack of sales. Jaguar has been in theblack since Ford purchased them until 1994. It is important to note that Ford'snet income trend from 1991 to 1995 illustrates this. In 1992, the Ford Taurusbecame the number one selling car in the United States, which helped increase1992 net earnings, and in 1994 the Ford Falcon was the top selling car inAustralia, helping maintain the trend of increasing net income. It is importantto note that Ford's net income has increased from 1991 to 1994, and thendecreased in 1995. There are several possible causes for this change in thetrend. In 1995, Ford acquired 20% equity in a major Chinese truck manufacturer,and launched several new vehicles; including the Ford Contour, Ford Mondeo,Mercury Mystique, Ford F-150, and Ford Taurus. These additional investments andexpenses help explain the decrease in net income in 1995. Overall, the companyhas done well, and with reorganization in 1996 to decrease spending and increaseefficiency, Ford is striving for future periods of growth.