Multinational Business Organizations operate in a very complex domestic and global marketing environment. This marketing environment is influenced by a large number of factors that are not within the control of the organizations. The environment produces both threats and opportunities. In today’s highly competitive global economy companies need to understand the impact of these environmental forces and proactively influence such forces wherever possible. They need to evolve suitable marketing strategies to minimize the threats and take advantage of the opportunities.
The major factors influencing the environment are the economic forces, socio-cultural forces, political-legal forces and competition. The automotive industry is operating in a very rapidly changing environment in which the most important social, environmental and economic challenges are global in scope and are completely interconnected. Ford Motor Company Based in Detroit, USA, Ford Motor Company is an American multinational corporation and is the world’s third largest automobile manufacturing company.
It manufactures and distributes automobiles in 200 markets across six continents. The company has around 300,000 employees and 108 plants worldwide. The company’s core and affiliated brands include Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. The economic factor has a critical impact on both the domestic and global marketing decisions of Ford Motor Company. In the US the rich have gone richer, the middle class has shrunk and the poor have remained poor. The growing upper class provides a huge opportunity for the luxury cars of Ford Motors.
The middle class though comfortable is seeking more value for money cars. The company is facing different economic situations in different countries in which it operates. A number of countries in central Europe, Latin America and Asia have experienced rapid economic growth. These countries generally recognized as the big emerging markets (BEMs) include Argentina, Brazil, China, India, Mexico, Poland, South Africa and Turkey. These economies provide huge opportunity for Ford Motors.
Marketing decisions are also strongly influenced by the political-legal forces. The United States enforces a number of trade polices and regulations through a number of enforcement agencies like Federal Trade Commission, Federal Communication Commission, Federal Energy Regulatory Commission, Consumer Product Safety Commission and the Environmental Protection Agency. The laws coupled with the discretionary power of the agencies have an impact on the way Ford Motors develops, communicates and markets its products.
In the international scenario the marketing decisions of Ford will be impacted by the nature of the governments and their political thinking in the individual countries. For example China and India are the emerging economies for Ford Motor Company. China has a communist regime with a concept of social equality and favors very affordable vehicles to ensure large-scale ownership. India has a more stabe democratic government, which is favorable towards an open economy providing an opportunity for Ford to market its range of products in diverse segments.
Cultural factors have a major influence on consumer behavior and hence marketing decisions, as culture is the most fundamental determinant of person’s wants and behavior. For example young American consumers don’t care much whether the Ford brands are manufactured in US but they definitely care about ethics and environment and expect the Ford brands to symbolize ethics and care for the environment. Surprisingly young Indians care more about the brands symbolizing Indian traditions impacting the marketing communication decisions of Ford.
Technology is the most dramatic force shaping today’s business environment and is characterized by constant rapid change. Technological innovation at Ford Motor Company is the core strategy for satisfying diverse and changing needs of the global consumers and achieving sustained growth in profitability. The growth and development in technologies including hybrids, clean diesels, advanced engine and transmission technologies, fuel cells and hydrogen internal combustion engines has had a major impact on the product mix decisions at Ford Motors.
The company has launched the Mercury Mariner Hybrid in the US. It plans to launch Ford, Jaguar, Land Rover and Volvo brands in the UK with hybrid technologies. It has introduced flexible fuel vehicles in Germany, France, Spain, Netherlands and Ireland. The development in Information Technology has supported the development of blind spot information to enhance consumer safety. The growing consumer awareness of the social, environmental and ethical issues has had a major impact on marketing strategies at Ford Motors.
Its product innovations now need to address issues such as climate change, energy security, noise and innovative use of renewable resources and material for sustained competitive advantage. The company is leveraging flexible technologies to reduce fuel use and greenhouse emissions of Ford vehicles. The company has initiated a program named ‘Greener Miles’ to help the customers calculate the amount of carbon dioxide emissions they generate annually and purchase offsets that support renewable energy projects.
It has initiated “eco-driving” approach in Germany to improve fuel economy by up to 25%. The company has several projects in partnership with NP to develop effective ways to reduce greenhouse and other emissions. Ford Motor Company needs to understand and respond proactively to the various environmental factors having an impact on its business and evolve suitable marketing strategies for its competitive advantage in the ever changing domestic and global markets.