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Ford’s Pricing Strategy.

Extracts from this document...

Introduction

Ford’s Pricing Strategy.

Background

Ford Motor Company may be the world's No. 1auto makers, but they seem to have run out of gas in Europe. They are steadily losing market share and are marginally profitable at best. Ford showed just how bad things were on February 18th when it launched a drastic restructuring programme. This resulted in layoffs and plant closings, the company also slashed its European production capacity by up to 25%--or 525,000 cars a year.

Fords Aim

We are a global, diverse family with a proud heritage passionately committed to providing outstanding products and services that improve people's lives.
Our Values. The customer is number one. We do the right thing for our people, our environment and our society.

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Middle


Declining profits and market share


It's about time Ford attacked its cost problems. The company earned only $28 million in the region last year on sales of $30 billion, while its market share fell to 9.5%, from 11.7% in 1995. This result suggests that Ford have a profit problem of serious magnitude. Ford has the capacity to make about 2.25 million vehicles in Europe but sold only 1.7 million there last year.

How to gain success

A key to cutting the increasing loss will be to cut 1,500 jobs at its largest British plant in Dagenham, where it makes the Fiesta, and

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Conclusion

The company has also spent an estimated £400,000 on newspaper advertisements to try and promote the car and brand and attract new customers.

New Pricing Strategy

Due to the overwhelming pressure faced in the ever-growing car market ford have reluctantly been forced to produce a new pricing strategy. This has now meant that they have been forced to reduced prices in Britain aligning them somewhat to those prices experienced on the continent.

Conclusion

A change in pricing sttaretgy for ford seems long overdue as the company has to in some way stop its falling market share.


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