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This report aims to provide analysis of the marketing environment of the UK motor vehicle industry. Ford’s marketing response to this environment is discussed. The second part of the report aims to segment the market, primarily using benefit segmentation. Finally, Ford’s brand is analysed, using BMW as a comparison.

Industry Overview

The brand leaders in the motor vehicle industry are:

  1. Ford
  2. Vauxhall
  3. Peugeot
  4. Renault
  5. Volkswagen

The main additional brands are Volvo, Citroen, Mazda, BMW, Nissan, Land Rover, Audi and Skoda (Competition Commission, 2000).

Environmental Factors

PEST Analysis

The PEST model is used to analyse recent developments in the UK motor vehicle industry environment. PEST is a method of analysing the macroenvironment in four distinct categories; political, economic, social and technological.

In April 2002 there was a fundamental change in the way company cars are taxed to help protect the environment. Linking the tax charge to the car’s exhaust emissions rewards cleaner, more fuel-efficient cars. This is in contrast to the previous tax breaks for large amounts of mileage in a company car. This has led to consumers who are buying a car largely for business-use to consider the tax liable as an additional criterion. The policy change was as a result of an increasing interest in environmental issues.

Recently the internet has become the facilitator of change in auto retailing. The increasing popularity of internet buying and selling is due to the perceived benefits of convenience and time saving. Waldron (1998), cited in Hoofer & Urban (1999), has estimated that 300,000 new and used vehicle sales were “transacted” on the Internet in 1997. In addition J.D. Power and Associates, Inc. reported that 16% of new car buyers used the web for shopping in 1997, up from 10% the pervious year (Armstrong and Kerwin, 1998).

Women now buy more than forty per cent of cars in the UK, and have a major say in the decision making process of many more vehicles (Auto Industry Statistics, 2001). A report in the publication Motor Industry Management, says that women are better at shopping and tend to be much more aware of prices – as well as being more capable of identifying best buys. Land Rover has introduced a ‘Women’s Panel’ into the development process, to ensure the views of female customers are being fully considered at every stage of development (Car Pages, 2005).

Safety has been a major focus of technological advances in the motor vehicle industry. A number of vehicles come with front and rear sensing technology. This technology alerts drivers to solid that are located anywhere near the vehicle’s bumpers. Adaptive headlights, integrated with the vehicle’s speed and the steering system, aid night driving by adjusting to changing conditions. Automatic sensor window wipers work in a similar way.

Ford’s Response

Ford has responded to these changes in its macroenvironment by adapting its marketing to suit specific trends identified.

Ford forged a partnership with Breakthrough Breast Cancer in 1999 and through a variety of campaigns and initiatives under the ‘Drive Towards a Cure’ banner, has raised money for the charity (Ford, 2005). This campaign clearly targets the increasing number of female car buyers.

Ford has also responded to the increasing number of women drivers by developing an innovative marketing campaign. In 2004 Ford commissioned British novelist Carole Matthews to include a Ford Fiesta in her book – The Sweetest Taboo (BBC News, 2004).