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-engineering

The 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 result
from 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 points
and 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 BPR

When 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 project
methodology is proposed.

1.5 Characteristics of firms and service providers

Several 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, and
the leaders of the company or organization.
 Consultants, besides their beneficial qualities, can also
unintentionally create barriers
by: 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 with
them.
 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 of
similar organizations and processes; able to perform specific
tasks for the team.

2 APPLICATION

2.1 Where the technique has being applied

Many 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 applied

BRP 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 maximum
performance, etc.

2.3 Duration and implementation cost of BPR

Duration
The 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 Cost
The 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 employee
training 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 the
commercial 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 BPR
The 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.com
BPRC. Business Processes Resource
CentreURL:http://bprc.warwick.ac.uk/index.html

3 IMPLEMENTATION PROCEDURE OF BPR

3. 1 Steps / Phases of a BPR project

A 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 assign
roles 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 processes
To 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 feel
comfortable 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 their
position 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 BPR
projects
Actions 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 step

The tools and techniques are explained in each step in paragraph
3.1 with related references to the annex.

3.3 Related Software

The 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
VISION
Though 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
TDCi common
Fuel System SEFI
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 Endeavour 2.5L
4x4 4x2
3.0 Litre TDCi 2.5 Litre TDCi
with Variable with Variable
Type Geometry Geometry
Turbocharger Turbocharger
(VGT) (VGT)
Displacement (cc) 2953 2499
156 PS (115 Kw) 143 PS (105 Kw)
Max. Power (ps/rpm)
@ 3200rpm @ 3500rpm
380 Nm (38.7 330 Nm (33.7
Max. Torque (nm/rpm) kgm) @ kgm) @
2500rpm 1800rpm
DOHC, 16 DOHC, 16
Valve
Valves Valves
Direct injection Direct injection
Fuel System
common rail common rail
Transmission Endeavour 3.0L Endeavour 2.5L
4x4 4x2
5 speed
Transmission 5 speed manual
Automatic
Electric Shift on
4x4 Transfer N/A
Fly

FORD FIESTA
SUSPENSI 1.6 Fiesta 1.6 1.6 1.6
ON Duratec Duratec Duratec Duratec
Exi Exi Zxi Sxi
Limited
Independe Independe Independe Independe
nt nt nt nt
McPherso McPherso McPherso McPherso
n struts n struts n struts n struts
with with with with
offset coil offset coil offset coil offset coil
spring / spring / spring / spring /
twin tube twin tube twin tube twin tube
gas gas gas gas
damper damper damper damper
units & units & units & units &
lower L- lower L- lower L- lower L-
Front arms with arms with arms with arms with
optimised optimised optimised optimised
bushes bushes bushes bushes
mounted mounted mounted mounted
on on on on
seperate seperate seperate seperate
cross- cross- cross- cross-
member member member member
with with with with
stabiliser stabiliser stabiliser stabiliser
bar. Dual- bar. Dual- bar. Dual- bar. Dual-
path body path body path body path body
mounts. mounts. mounts. mounts.
Rear Semi- Semi- Semi- Semi-
independe independe independe independe
 nt heavy nt heavy nt heavy nt heavy
duty duty duty duty
twist- twist- twist- twist-
beam with beam with beam with beam with
low low low low
package package package package
height height height height
coil coil coil coil
springs & springs & springs & springs &
seperate seperate seperate seperate
twin tube twin tube twin tube twin tube
dampers. dampers. dampers. dampers.
Dual-path Dual-path Dual-path Dual-path
body body body body
mounts. mounts. mounts. mounts.
Shock
absorbers
Gas Filled Gas Filled Gas Filled Gas Filled
(Front &
Rear)
BRAKES 1.6 Fiesta 1.6 1.6 1.6
Duratec Duratec Duratec Duratec
Exi Exi Zxi Sxi
Limited
Ventilate Ventilated Ventilate Ventilated
Front
d Discs Discs d Discs Discs
Self Self Self Self
Rear Adjusting Adjusting Adjusting Adjusting
Drums Drums Drums Drums
FORD FIGO

ENGINE 1.2 1.2 1.2 1.2

Duratec Duratec Duratec Duratec
Petrol Petrol Petrol Petrol
LXI EXI ZXI Titanium
Displacement
1196 1196 1196 1196
(cc)
16V 16V 16V 16V
Type
DOHC DOHC DOHC DOHC
Fuel system SEFI SEFI SEFI SEFI
Max. power 71 (52.4) 71 (52.4) 71 (52.4) 71 (52.4)
(ps(kw)/rpm) @ 6,250 @ 6,250 @ 6,250 @ 6,250
Max. torque
102(10.4) 102(10.4) 102(10.4) 102(10.4)
(nm(kg-
@ 4,000 @ 4,000 @ 4,000 @ 4,000
m)/rpm)
SUSPENSIO 1.2 Duratec 1.2 Duratec 1.2 Duratec 1.2 Duratec
N Petrol LXI Petrol EXI Petrol ZXI Petrol
Titanium
Independent Independent Independent Independent
McPherson McPherson McPherson McPherson
Front strut with strut with strut with strut with
dual path dual path dual path dual path
mounts mounts mounts mounts
Rear Semi- Semi- Semi- Semi-
 Independent Independent Independent Independent
twist beam, twist beam, twist beam, twist beam,
Coil springs Coil springs Coil springs Coil springs
Hydraulic Hydraulic Hydraulic Hydraulic
Steering power power power power
assisted assisted assisted assisted
BRAKES 1.2 1.2 1.2 1.2
Duratec Duratec Duratec Duratec
Petrol Petrol Petrol Petrol
LXI EXI ZXI Titanium
Ventilate Ventilated Ventilate Ventilated
Front
d Disc Disc d Disc 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, Lowest

In Years
-CEO Jacques Nasser and Chairman Bill Ford Jr. could not get along
Leading 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 cleaner

engine emissions and by working with environmental groups to help
clean the environment
-Ford have already started investing in Solar Power ,and have a chance
to become a market leader
-They can use their Web strategy to cut costs further
-They can take advantage of their perceived generosity by giving to
more 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 can
still attribute accounting trends to some of the key events in Ford's
history.
In 1990, Ford acquired Jaguar Cars, Ltd. Jaguar was a company
suffering
terrible loses due to poor quality, and lack of sales. Jaguar has
been in the
black since Ford purchased them until 1994. It is important to note
that Ford's
net income trend from 1991 to 1995 illustrates this. In 1992, the
Ford Taurus
became the number one selling car in the United States, which
helped increase
1992 net earnings, and in 1994 the Ford Falcon was the top selling
car in
Australia, helping maintain the trend of increasing net income. It is
important
to note that Ford's net income has increased from 1991 to 1994,
and then
decreased in 1995. There are several possible causes for this
change in the
trend. 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 and
expenses help explain the decrease in net income in 1995.
Overall, the company
has done well, and with reorganization in 1996 to decrease
spending and increase
efficiency, Ford is striving for future periods of growth.