Marketing setback: causes, impacts, and recovery strategies

Marketing Setback

Ford Motor Company: Marketing setback

The Ford Motor Company, like all American car makers, has been increasingly beset by a series of marketing and public relations setbacks. Recently, even when going to congress to make an appeal for a financial bail-out of the American auto industry, Ford, like Chrysler and General Motors, made a gaffe when its Chief Executive Officer (CEO) took a separate private jet to congress, to plead poverty, showing a flagrant disregard for both cash and the use of fossil fuels (Currie 2008).

Ford has shown a deaf ear to marketing trends over the past few years, not the least of which is exhibited by the company's reliance on vehicles that use large amounts of gas per mile. Despite the economic downturn, as late as in October of 2008, Ford was still touting vehicles like it 'crossover' the Flex "possibly the most recognizable vehicle in Ford's stable other than the Mustang," otherwise known as "The Maxi Cooper" in because of its large, boxy appearance (Bray 2008). It was marketed as a 'fun' vehicle: "For people in search of stimulation" rather than people seeking fuel efficiency (Warner 2008).

However, what is particularly tragic about Ford is that, unlike the other major American car companies, it did seem to exhibit the desire to change. Its CEO William Clay Ford Jr. drove a hybrid truck and in 2000 Clay resolved to raise the fuel economy standards for Ford SUVs by 25% within five years. He was an environmentalist who said he believed in the reality of global climate change and created a 'green' assembly plant design. However, the "25% by 2005" marketing campaign, in the eyes of Jim Schroer, then Ford's global marketing chief seemed cost-ineffective and unlikely to raise consumer demand for Ford cars and trucks. "Oh boy, that's not going to happen,'" he said regarding American consumers altering their buying habits. (Warner 2008) "Sure, Ford knew what it would take -- the necessary technologies, such as ultralight carbon-fiber parts and advanced electronics, had all been tested by its labs -- but adding those features would cost more, and Schroer didn't think American consumers would put up with that" -- the "25 by 5" slogan was abandoned because of its price tag until now (Warner 2008). Now "battered by soaring gas prices and plummeting sales" Ford has been "forced to slash production of the trucks that have been its lifeblood -- from half of its vehicles today (and 70% in 2005) to a projected "one-third by 2012" (Warner 2008). Congress is calling for Ford along with the other American car companies demanding a bailout to show a real commitment to raising fuel economy standards and creating a leaner, meaner production machine.

Ford must point to its previous good-faith attempts to raise fuel standards to support its calls for government assistance. Many point to previous CEO Bill Ford's inability to sell his vision to other members of the company: "no matter his personal convictions, Bill Ford had neither the operational skills nor the management talent to make his green aspirations a reality. Instead, the chairman tried to tack environmental changes onto a business model focused obsessively on bigger, badder trucks -- 'Built Ford Tough'" (Warner 2008). Ford's image remained consistent on 'toughness' and focused on short-term consumer demand for large vehicles. The large "Flex" was sold on its hipness, not on fuel economy, meanwhile the company's plants focused on a single type of vehicle, making introducing smaller models increasingly difficult and costly when consumer demand dropped for large vehicles.