Ford's new chief walking a tricky high wire
By Ian Porter | theage.com.au | 04 March
New Ford Australia chief Bill Osborne faces a daunting challenge - building on the company's traditional blue-collar customer base by adding customers who have never considered buying a Ford.
He wants to increase the emotional appeal of Fords and not just rely on a value proposition. It will be a tricky balancing act, perhaps more familiar to a high-wire artist.
At the same time he will have to wrestle with the reduced circumstances of all local car makers, whose manufacturing operations have shrunk as demand has moved to other types of vehicles.
There may be hope in that regard as the latest survey of Australian manufacturers shows that demand rose in February for the first time in three years.
The performance of manufacturing index compiled by the Australian Industry Group and PricewaterhouseCoopers showed a rise of 2.2 points, which pushed the index past the break-even point to 51.4, meaning that, overall, manufacturing output expanded.
Mr Osborne is aware that the future of Ford's Australian manufacturing rests on the company's mainstay, the Falcon, even though the company plans to start making the Focus small car at its Broadmeadows plant from 2011.
"I don't think we have the right spread of customers in Australia," Mr Osborne said after unveiling Ford's stand at the Melbourne International Motor Show. He conceded that the Ford Blue Oval logo was seen as a blue-collar brand.
"Yes, and we have to figure out a way not to walk away from those customers," he said. "That's not the objective. The objective is to extend the brand beyond those customers. And that will be a bit of a challenge."
If Ford gets it wrong, the plan could misfire badly.
"In marketing terms, it is far easier to abandon one customer and target another than it is to extend the brand from one customer to another," Mr Osborne said.
It was crucial, he said, that Ford had widened its product range outside its traditional Falcon by adding European models such as the Mondeo, the Focus and the Fiesta.
"If you position yourself too narrowly, you are at risk of the market walking away from you," he said.
The sudden fall in large-car sales from 2003 showed how dependent Ford had been on the Falcon. Having put new products into the showrooms, Ford now had to entice people who had not bought a Ford before.
"Now we have to reposition our brand in line with the product offering and make ourselves more relevant to a broader range of people," he said.
Mr Osborne said Ford aimed to create a more emotional link with customers, to wins hearts and minds and get away from just offering value.
The traditional sources of brand power for established car makers like Ford had been severely eroded in recent times, he said.
"Consumers traditionally used brands for three reasons," he said. "One was to reduce their search costs. Two was to reduce risk when a purchase was considered risky. Three, they used them to express themselves."
He said the first two reasons for relying on a brand had basically disappeared.
"You can get on the internet and search any dealer's inventory anywhere now at no cost," he said. "And the purchase of a vehicle is not as risky as it used to be. I defy you to buy a bad vehicle in today's market."
And that just left the third reason, selling cars that express a person's character, preference or desires.
"The only power left for an auto brand is to build that emotional connection so that people want to use your brand to express themselves and who they are," Mr Osborne said.
This was why Ford dropped the old Falcon nameplates — Futura, Fairmont and Fairmont Ghia — from the range when it unveiled the FG Falcon.
"The launch of the Falcon is a great opportunity for us to take a fresh look at the Ford brand and try to re-establish ourselves," he said. "That is what we have done with the Falcon line-up.
"We have got an all-new G6 series that aims for a different sport of emotional connection with the consumer."
First published by TheAge.com.au on March 04 2008
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