Marketing Management in Australia

Questions: The final stage of the marketing audit is for you to evaluate how well the marketing mix of the organisation is performing for your chosen organisation. NB: as before, if you have a large range of product offerings, it is a good idea to focus on just one. Incorporating theoretical concepts into your discussion from chapters 7-14 and with the use of other theoretical sources and secondary research, please discuss the following: 1. Outline and describe the 8 marketing mix concepts theoretically and apply the components to one of your products offerings. As part of your application be sure to explain and evaluate all of the 8ps of marketing (product, prices, promotion, distribution, partnerships, people, processes and physical evidence). 2. Given your evaluation of your overall marketing strategies, the competition and broader contemporary issues facing marketers today, provide recommendations for your organisation. Your recommendations should focus on each of the 8ps and illustrate how contemporary issues may impact on your organisation and its marketing strategy. Answers: Introduction In Australia, Ford has more than 80 years of automotive manufacturing history in Australia. Their journey started when they the Ford vehicle was manufactured in the year of 1925. Among all other cars, Ford Falcon was continuously manufactured in Australia since its introduction in 1960 and became one of the leading cars of Australia (Ford.com.au2016). However, the scenario changed when Ford Territory won the Wheel Magazines car of the year of Australia and became the most popular SUV in the country. At that time, Ford was the leading car manufacturing organization in the country. However, according to Cavanaghand Freeman (2012), in the year of 2015, Ford lost its ground in the Australian vehicle industry as Toyota Corolla, Mazda 3, Toyota HiLux became the top three models of the country with 42,073, 38,644 and 35,161 selling sales records (Gmehlichand Jones2013). Only Ford vehicle that could make its presence in the top ten was Ford Ranger. However, as mentioned by Jrvinenet al. (201 2), Ford was considered as the biggest losers in the Australian vehicle industry after their sales went down to 11.6 percent in the year of 2016. However, the authority of the Ford is planning to gain their lost position with the help of Ranger as slowly, but steadily it is helping the organization to win back its popularity among the Australian consumers. This study will mainly focus on Ford Ranger and the marketing mix related to it. In spite of being the most modern Ford vehicle in Australia, the marketing mix strategies of the company still include some challenges and issues that is preventing the organization from defeating its rivals which are Isuzu, Lexus, Honda and Audi as per sales report and Toyota, Mazda, Holden and Hyundai as per overall popularity report (Gmehlichand Jones2013). 8ps of Marketing Mix of Ford Ranger Ford Ranger is the Ford's one of the most famous vehicles that fall under the light trucks category that helped the organization to gain a pre-tax profit of $US10.8billion from its global operations (Bopageand Sharma2014). However, in 2015, Ford Australia posted a loss of $191 million after sales plunged to a 48 years low (Crosbyet al. 2012). However, chief executive of Ford said that they are expecting to improve their sales based on Ford Ranger and its marketing mix strategies. Price Ford being one of the largest automakers in the world, has developed pricing strategy in a way that has played an important port in their objective of acquiring a superior position in the global vehicle industry. In order to make their organization hugely profitable company, Ford management decided to develop their pricing strategy based on the rival companys products that are in competition with Ford in the market. In Australia, under the Ford's competition pricing policy, it has taken sponsorship contracts without changing the selling prices of Ford Ranger (Ford.com.au2016). Average price of a Ford Ranger is $50,000; however, the cost entirely depends on the different models of the car as Ford Ranger XLS PX MkII has a price of $50,290, Ford Ranger XLT PX MkII has a price of $54,000, and Ford Ranger XL Hi-Rider PX has a price of $36,000 (Abetz2014). However, the issue that is faced by Ford Ranger is the comparatively low price offered by Toyota Corolla that gained the top position in Australian car market in the year of 2015. The highest price of a Toyota Corolla is $31,000 (Toyota Corolla ZR ZRE172R) and the lowest price is $19,000 (Toyota Corolla Ascent ZRE182R)(Ford.com.au2016). Another rival of Ford that is Mazda also offers cars at a price, which is lower than any model of Ford Ranger. Therefore, it can be said that the pricing strategy of Ford is currently not helping the organization to better its market position. On the other hand, Ford Ranger on which the organization is depending had already faced controversies in Australia when after promising that the car will be available at a price of $50,000, the organization released the car at a driving price of $57,000 (Weiss2014). Therefore, it is important that Ford must make changes in their pricing strategy; however, they will have to keep the quality same. Product All the Ford products are localized and are developed with a concept to match the local conditions that depend on durability and less maintenance cost. In Australia, fuel prices are at record highs, which have increased the total amount that is, spend by the customers in the transportation system. Total expenditure rose 3.3 percent and it is expected that it will rise to 59 percent (Dyrud2016). That is the reason that consumers are Australia now prefers to select smaller vehicles rather than SUVs and light trucks. However, an interesting exception is noticed in the automotive industry of Australia which states that in spite of this increasing cost, the sales of luxury SUVs and light trucks were up by 62 percent (Weiss2014). Therefore, it can be said that the decision of Ford management to launch Ford Ranger in the country was a perfect decision as they are trying to gain their position in the Australian market. However, as a product, Ford has received several complaints against their Ford Ranger model. One of the major problems of Ford Ranger is its variable pressure on oil pump in the 3.2-turbo diesel engines (Zaheeruddin2015). Those engines are unable to re-prime themselves and distribute oil pressure if they are left to drain for more than 10 minutes during the time of oil change. This causes engine failure and the engineers of Ford still do not know how to solve this problem. On the other hand, the car also has problems of uneven braking, indigent traction and transmission problems (Wuet al. 2015). Place As an industry, Australian automotive industry is quite productive for can manufacturing organizations after internationals manufacturers opened their plants in the country since the 20th century (Emmons2015). However, recently some external factors are creating an impact on the competitiveness of the Automotive Manufacturing Industry of Australia. Some of those factors are mentioned below, A significant strength of Australian currency has led to a reduction of in the cost of imported vehicles. This has contributed to weakening in the relative cost of competitiveness of a locally developed vehicle of approximately $5000 versus an imported vehicle (CarAdvice.com.au2016). On the other hand, local manufacturers are also sustaining increased cost for purchases of their raw materials such as steel, aluminum and petrochemical based products because of the resources boom. Another major factor that is creating a negative impact on the automotive industry of Australia is the increase in oil prices over the past 18 months (Dowling2016). This has affected the consumer confidence and as a result, they are shifting away from larger size vehicle products of Australia, which might affect the sales of Ford Ranger. Australian vehicle industry is one of the most competitive markets in the world with more than 50 well-known brands that are offering over 350 models (Weiss2014). This is the reason that each brand can only claim a lower average volume regarding sales. The critical part for Ford is this situation will stay in the Australian vehicle industry, as new models and brands including some models from China are ready to enter the market. On the other hand, brands such as Tesla that manufacture environment-friendly electric cars is also planning to enter the Australian market, which would possess the biggest threat for Ford Ranger. Promotion In order to gain a competitive advantage over its rivals, Ford has implemented an aggressive marketing strategy with the objective to build a long-lasting relationship with its previous and loyal customers as well as new potential customers (Ford.com.au2016). Fords primary promotional strategy related to Ford Ranger entirely depends on the activity of the management, which is sponsoring various sporting events to highlight the brand (Weiss2014). This marketing strategy of Ford is however not new as they were seen to sponsor UEFA Champions League and soared its brand name and image high in the eyes of fans. In Australia, the organization is sponsoring the local league to exhibit their model Ranger in the country. This strategy of Ford has helped them to an extent as slowly but steadily the organization is improving their sales in the country. In spite of focusing on sponsorship strategies, Ford has never overlooked the advantages of visual media such as internet and television. The organization has successfully promoted their vehicle Ford Ranger on various social media sites such as Facebook and Twitter. Agents or sales personnel are used to persuade buyers at Ford dealership and other venues of Australia. In some cases, Ford also uses direct selling strategies to communicate with the corporate clients who lease vehicles from the firm. Distribution strategy A large network of Original Equipment (OE) supplies that includes more than 1000 suppliers across Australia supports Ford Australia. The organization is assumed to invest more than $545 million to purchase components, materials, and services from its local suppliers (Ford.com.au2016). A table is mentioned below to exhibit some key local component suppliers for Ford Ranger, Primary Suppliers for Ford Australia EGR Plastics External decoration of the vehicle Futuris Internal decoration of the vehicle Robert Bosch Braking system and chassis Walker Emission controller and exhaust Continental Panel of instruments Sumitomo Aust Electrical equipment and components Dana Chassis Table 1: Distributors of Ford in Australia (Sources: Dyrud2016) According to Dyrud (2016), the distribution of vehicles, replacement parts and technical and service equipment of Ford is done by a network of more than 200 independently owned dealerships that are located in 286 locations around Australia. More than 7,000 people are employed in those dealerships (Jainand Roy2016). The organization has also implemented web-based video communication methods to interact with employees regarding employee training sessions. Physical Evidence of Ford Australia The scientists once said that after the event of Armageddon, the only thing that will survive in the world would be cockroaches. However, according to Jainand Roy (2016), the chances are high that some of Ford Rangers would survive too. Especially in Australia, people are swapping their big sedans and wagons for SUVs and big 4x4 Utes (Deliaand Newstead2015). Dual can Utes are capable of serving as a workhorse during the week and a family freighter on the weekend. In this scenario, Toyota's Hilux has topped the sales charts several number of times; however, Ford's Ranger is slowly but steadily gained its position in the market. The interior design of the Ranger got four and a half star from the users because of its standard equipment, infotainment, and cargo volume. The vehicle includes cloth seat trim, radar cruise control, limiters regarding speed, parental lock system by MyKey, leather steering wheel and gear knob with a double reconfigurable 4.2-inch instrument cluster that makes the vehicle quite attractive for the customers (Zaheeruddin2015). In infotainment system, the vehicle includes 8.0-inch sync two touch screen that also has voice control, AM/FM/DAB radio, audio with six speakers, Aus and USB input and satellite navigation (Ford.com.au2016). Ford Ranger also got good ratings because of its on road performances because of its superior engine and transmission. The vehicle includes a 1467kW/470 Nm 3.2 liter five-cylinder turbo diesel. Six-speed automatic dual range 4x4 equipment handle its communication (Ford.com.au2016). Its suspension has double wishbone front with leaf spring rear. The steering system is assisted electrically with a turning circle of 12.7m (Dowling2016). Besides these facilities, Ranger has the biggest engine it its class. This engine also has more than four cylinders that make it one of the unique engines in its class. It provides 148kW at 3000 rpm and 480 Nm between 1750 and 2500 rpm (Emmons2015). However, it is already mentioned that some of the customers revealed some issues in its transmission and braking capabilities. It is said that the car is unable to stay under control while running on wet roads which are a risk for the customers. Partnership Recently, one of the leading internet radio services organization which is Pandora Internet Radio has developed a collaboration with Ford Australia. This step is described as a key milestone, which will help the vehicle organization to expand its business across the local automotive market of Australia. Right after the partnership, the system provided by Pandora is available in the models of Ford such as Fiesta, Focus, Ranger and Transit (Jrvinenet al. 2012). The Director of Business Development Rick Gleave said that by adding Pandora is Ford Ranger; the customers will be able to continue enjoying the services of Pandora no matter where they are traveling. Pandora is an application that will allow the drivers to use a voice-activated technology to connect with their favorite smartphone applicants while driving (Roosand O'Connor2015). The Pandora system will allow the drivers to reply entirely on voice, as the system will lock the phone automatically. Before this, Mazda had a partnership with Ford, who acquired a stake of 7% in the year of 1979. Until 1996, the organization claimed almost 34% of Mazda (Cavanaghand Freeman2012). Currently, Ford has 2.1% of Mazda's stock and severing most production as well as development ties (Wuet al. 2015). The reason behind this partnership is different for the two companies. For Mazda, they can access advanced technologies from Toyota and Ford has deep pockets, it will also help Mazda to fund its products. On the other hand, Ford has signed this partnership to access the team of Mazda engineers who are exceptionally talented and gave an underpowered car such Mazda 6 an excellent dynamics and surprising elegance. Process The process of Ford's customer care services mostly depends on its customersaskford.com. Therefore, they are planning to make the website more visible and user-friendly (Ford.com.au2016). Currently, the website offers a form to the visitors that the organization is planning to change. The authority of Ford is going to implement a click-to-call feature that will allow the visitors to click a button on the website, type in their phone number and receive a call from an agent within 30 seconds (Dowling2016). Through this method, the organization is also planning to educate the customers so that they can find information on the website on their own every time they visit it. The primary reason behind this is to reduce the number of incoming calls from the customers, which will reduce their call center costs. Recommendation Currently, Ford is offering quite high prices for its models in Australia. However, the price of Ranger is high as the vehicle is equipped with high quality accessories including an engine of four cylinders. The car has also equipped with Pandora, which allows the drivers to listen to anything they like by using voice-activated procedures. In spite of having these features, if the customers think that the car is over price then it is because of the faulty advertisement strategy of the company. Ford must advertise its vehicle in a way so that customers can understand that the organization gives value to their money and is selling something better than other vehicles, which is leading them to charge a high price. Some Chinese vehicles such as Cherry are planning to enter the Australian market with superior quality and low prices. On the other hand, Tesla is also planning to enter the Australian market with their fully electric vehicles. Therefore, it is recommended that Ford will have to either reduced the prices of their vehicles or will have to start manufacturing electric vehicles. However, it will not be easy for Ford to reduce the prices of its vehicles, especially for Ford Ranger it is nearly impossible to the cut the prices. The vehicle organization can only reduce the prices if they can reduce the number of distributors. Currently, Ford collects different parts from different organizations which are a cost effective process. If the organization can share hands with one organization that will provide more than one parts for the cars of Ford, it is expected that they will gain more discount from the organization which will help them to reduce the drive away price of their vehicles. According to the engineers at Ford, Ranger is one of the unique cars in its class and is manufactured to provide great driving performances. However, some of the customers are severely unsatisfied with the services of the vehicles as it contents transmission problems including braking issues and engine breakdown problems. In a competitive market of Australia, if Ford does not take proper steps to enhance their vehicle, the chances are high that they will lose more market share in 2016. The authority of Ford successfully implemented most of the advertising strategies in Australia in order to gain customer attention. However, they have neglected one of the most productive advertisement strategies which are celebrity endorsement. In recent years, celebrity endorsement has become very popular strategy as people have adopted a characteristic of following the lifestyles of the celebrities without even reviewing the capability of the products. Therefore, it is highly recommended that Ford can use famous movie launches and celebrity endorsement strategies to improve the brand image among the customers. The organization has implemented a customer service strategy which will help the customers to learn and to operate customer service website without seeking help from the support agents. This strategy is stated as a productive strategy as the company will be able to reduce their costs related to call center if the number of calls is kept to a minimum. However, none of the customers will be happy to operate a site on their own when they are here to discuss a problem they are facing in their vehicles. Therefore, the chances are medium that customers will be offended for this strategy. It is recommended that organization must help the customers by appointing an agent for them every time they ask for help. Conclusion Ford Australia was known as one of the most iconic and vintage vehicle organization in the country. However, it has lost its market position as companies like Toyota and Mazda has attracted more customers through their low pricing strategy. After describing the 8Ps of marketing of Ford, it is found that the management of Ford has successfully implemented most of the strategies in the market of Australia. Only the pricing strategy, distributor strategy and product quality strategies are causing problems for the vehicle organization. Therefore, the authority must focus on these factors immediately if they want to win back their lost market position the high time. References Abetz, P., 2014. Australian manufacturing: How Australia can rebuild its car industry.News Weekly, (2929), p.7. Acharya, V.V., Schaefer, S. and Zhang, Y., 2015. 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