Products
Rover’s products are designed to appeal to different sectors of the market. One such sector is for four wheel drive vehicles. ‘Land Rover’ was engineered to meet the needs of those who needed to travel across rough terrain. The product’s practical and durable characteristics are important for its appeal to customers who need an off-road vehicle.
Some of the characteristics of the off-road vehicle are continued in other models to target a different sector of the market. For example the feature of a high suspension (to travel over rough ground) could be used to increase the feeling of superiority and reflect power and success satisfying the drivers self-esteem needs. Rover has been successful in marketing this concept and producing off road vehicles that appeal to professional executives.
There are several models of car targeting the market for family and executive cars. These models’ design features differentiate them from other makes of car. A range of technological features are incorporated into these cars to satisfy what customers have come to expect from any new car.
Distribution
Rover uses a network of dealers to distribute its vehicles to customers. Dealers purchase the right to sell and provide services for vehicles manufactured by Rover. To maintain standards of service technicians working at dealerships are compelled to acquire a national qualification and attend regular training courses to keep up-to-date with the technology incorporated into Rover’s cars.
Ford Motor Company
Ford is a multinational company engaged in manufacturing and marketing in many countries around the world. The company’s global marketing approach is developed at its headquarters in Detroit, USA. Its overseas subsidiaries then create their own marketing strategy, for the market they operate in, which supports the global plan.
Ford has seen its European market diminish over the past several years as a result of high costs and low sales which have been eroded by fierce competition mainly from Japanese car manufacturers. Ford has reacted by implementing a plan to re-organise its global strategy called ‘Ford 2000’. Instead of plants manufacturing all models of cars for their market vehicle centres are being established to build a limited range of models for the world market. The organisational structure will change from organisation by function to teams working on models of car. It is envisaged that these changes will reduce production costs and overcome horizontal communication barriers.
The market
Whereas Rover targets the higher end of segments within the car market and stresses quality as a justification for charging higher prices, Ford’s products appeal to the middle market segment. Ford’s advertisements tend to stress the fuel efficiency of its vehicles and the incorporation of technological features which are found in higher priced competitors products. Consumers are less affluent so credit facilities are important to fund purchases.
In 1995 both Rover and Ford made a net loss on their UK operations. Ford’s losses amounted to around *1222 million pounds and its UK market share was *221.1%. Rover’s losses were *1174 million pounds and its UK market share was *212.3%.
Since Ford made such a large loss compared to Rover despite having a much larger market share it may suggest that sales and market share maximisation are prime marketing objectives.
Positioning
Positioning refers to the way in which customers’ perceive a company’s product in relation to those of its competitors. Business can influence this perception by adjusting the marketing mix and thereby to – to some extent – influence the customers purchasing decision.
We have already identified some of Rover’s methods of positioning its products. For example Rover’s cars have a unique design do differentiate it from other makes and a brand name distinguishes Rover’s products from that of competitors. By adjusting the other elements within the marketing mix Rover has attempted to create a favourable and positive association (in the minds of customers) of the brand name and levels of high quality and commitment which supports the company’s efforts in targeting the upper end of the market.
The use of such branding to position the product will be beneficial in maintaining sales when substitutes appear on the market – usually during the maturity phase of the product’s life cycle. An example of this in the case of Rover can be seen with ‘Land Rover’. Its initial success has left Rover with a positive reputation for building such vehicles enabling Rover to hold and even increase its market share despite substitutes (such as Jeep and Ford’s Maverick) appearing in the market place. As can be seen from this brief discussion of branding, positioning is dependant upon the consistent composition of elements within the marketing mix to convey and re-enforce the image or message the company wishes to convey.
The Ford Motor Company’s vehicles are carried under an umbrella brand which tends to be associated with averageness. Every car owner has either owned or known someone that has owned a Ford car at some time in his/her life. The brand has therefore become a generic losing its value – similar to Bic which is often used to refer to a biro and hover to refer to a vacuum cleaner, so Ford is sometimes used to refer to the average car. Ford’s products are usually perceived as being reliable and good value for money and so attract customers located within the middle of the market in terms of their purchasing power and behaviour.
Ford has existed for a long time and the original objective of its founder to produce a car that everyone could afford may create an association, in the minds, of potential customers, of its products being cheap and practical. In the market for higher quality products the name may adversely affect the company’s ability to compete since the marketing mix is not consistent – high price, high quality of product, intensive promotions, a brand name which conveys values for money and low costs conflicting messages! To secure a significant share of the market for high quality, luxury vehicles Ford would need to change either the brand name or the concept it conveys to customers.
Perceptual Map
The relative positions of the vehicles offered by Rover Group and the Ford Motor Company are illustrated via the perceptual map below:
BIBLIOGRAPHY
Marketing, 10 Feb 94, BMW Turns The Niche Into Mass Market, G Chapman
Mintel Market Intelligence, The Dynamics Of The Car Market, Jul 96
*1 Figures taken from Marketing Periodical, 1994
*2 Figures are for UK market share, provided by Mintel Market Intelligence
