Ford Ka
Professor Andrés Musalem
Marketing Management
Fuqua School of Business
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Postcript
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Let’s start with a few questions:
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Which segmentation did they use?
Who did they target?
How?
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Postscript
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Approach
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Ford pursued an attitudinal segmentation
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Leading Gilles Moynier to note
“… When we decided to adopt an attitudinal
segmentation we did not really know whether the
target customers represented a large or small
population, who they were, or how to recognize them.”
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Target segment(s): Freedom Lovers and
Attention Seekers
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Media: Cinema advertising and direct mail
based on magazine subscriptions.
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Postscript
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Other elements of marketing mix
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Price
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Advertising
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FF 59,300 (Twingo FF 62,300; Peugeot 106 FF 55,900)
Budget = FF 50 million (in line with Fiesta)
Strong emotional images in message
Distribution
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Dealers had difficulty understanding the segmentation
scheme
Led to uneven sales performance in France as dealers
tried up-sell these new, relatively wealthy customers
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Postscript
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Sales
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Initial quarter = 4,200 units in France (short of 6,800
forecast based on Fiesta)
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By 1998 = 266,000 units (for all of Europe)
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Best selling car in its category in Europe
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Did especially well in the UK (no competition from Twingo)
By 2001 < 200,000 units
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Some “wear out” in initial position as competitors launched
new brands, updated older versions
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Fashionable image tiring a little
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Ford Europe also doing poorly at this point
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Takeaways
1. Marketing Management Framework:
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Before making marketing recommendations, we need to
become experts about the customers, the company and its
competition.
2. Market segmentation  Product categorization
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Products can always be categorized based on physical
attributes, but that categorization need not “line up” with actual
market segments
3. As markets change, so should your segmentation
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Changes in what drives customer needs and preferences
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Changes in competitive offerings / targeting
4. “Benefit segmentation”
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Needs are often the most insightful basis for segmentation
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But needs do not always correspond to observable
characteristics. Problem: implementation !
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Why did we discuss this case?
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Introduce the basic framework: 3Cs and 4Ps.
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3Cs: Customer, Company & Competition
4Ps: Product, Price, Promotion and Place (distribution)
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Consider marketing in a non-US setting.
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Introduce key concepts about customer
segmentation, targeting and promotions.
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Discuss the issues that arise in implementation
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Appendix
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Requirements for a useful
segmentation scheme
Effectiveness:
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Distinct
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Relevant
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3.
Similar within groups, different across groups?
Are the differences relevant for the decision at hand?
Sizable/Profitable
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Is there sufficient business potential to warrant special attention?
Ease of implementation:
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Measurable
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2.
Can you describe and quantify segment membership in general?
Accessible/actionable:
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Can you identify and address segment members in a targeted way?
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