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Ford aims for drivers' hearts as well as minds

Mark Simpson has been marketing director for Ford of Britain for just over a year and has played a major role in forcing the success of the brand further ahead of rivals.

Ford took a market share of 15.04% in 2008 and has been running at 16% in November this year. The margin over Vauxhall, its closest rival, grew from 1.21 points of market share last year to 3.89 this year in the 11 months to the end of November.

When Simpson took charge of marketing for Ford in the UK at the end of 2008, his task was simply expressed. The company had to get back to making money. There had to be growth. Complexity had to be removed.

It did all three. The extraordinary job was the removal of complexity. Ford of Britain took out 98% of orderable combinations of features for their cars. It has transformed the issues of stocking and finding the precise combinations that the customer wants. It is also far more likely that the used version of exactly what a customer wants can be found.

Next up was price. Though engines and transmissions are made in the UK, most of the car is costed in Euros. With the depreciation of sterling against Euro, costs rose by 30%.

Mercifully, cost was sliding down the list of important issues for Ford. First, there was a succession of new models that were very well received and which started with the smallest – the Ka and the Fiesta.

Then there was scrappage which Ford handled well, emphasising the saving rather than the price. They got 11.7% of the market, which is short of the established Ford share of 15%, but not bad considering the cheapest Ka was £9,000 and the cheapest Fiesta was £11,000. Kia and Hyundai, meanwhile, were producing the cars with a price beginning with a five.

But the vital change that Ford is making is that which is Simpson’s responsibility. He is repositioning Ford as an emotional purchase rather than a value product and he is fully supported by the people who make the cars.

“A car is not a rational purchase. It is emotional. We want to be the brand that people want rather than the car they settle for. We work with the slogan ‘making the exclusive inclusive’.

“We identify the common needs, the things that people all like to see on their cars as standard equipment – headlights that come on when they are needed; windscreens that clear when they need clearing; heaters that get the car to 23 degrees when you ask for 23 degrees; a phone that dials home when you say: “Dial home”.

“All our adverts are now tested for their cognitive power and their emotional power by Bath University. Ads that just feature benefits are nonsense. They don’t work.

“In the pub, you have to have some reasons to tell people about why you bought the car. And you will list what features it has. But that is not why you bought it. You bought it because of the way it looks.

“Once you have a brand that people like they tend to forgive you. We are not German, we are not cold. We do have all the technology but we will get that emotional content as well.

“We will bring the stuff that people do not expect.”

It’s all getting more complicated under the One Ford strategy that means that all products made throughout Ford are made with common attributes and can be sold anywhere. For example, the Valencia-built Fiesta will sell in Australia.

“The majority of the global industry is centred on the sort of cars built in Europe,” said Simpson.

“There is a lot of new product in 2010 – cars that Ford has not done before.

“My role is to generate the interest and then teach the dealers how to convert it. No-one wants to walk in a showroom and find that no-one is fully informed on the cars that are coming.”

Ford of Britain has got momentum and new confidence. All that remains to be seen is whether it can become profitable and a sustainable business. 

Ford UK records £113m pre-tax profit

Ford’s British operation are having a very difficult time financially because of the shift in Euro-Sterling exchange which has lifted the company’s operating costs by 30%.

It paid no dividend to the parent company last year, according to figures filed at Companies House.

Given the difficulties Ford US has experienced in its home market, that is an indication of how hard the recession and its consequences have been for Ford UK.

But it did manage to keep out of the red. It recorded a pre-tax profit of £113 million which was a margin on sales of just 1.2%. In fact, the profit was better than the 2007 calendar year result of £28 million.

Though profitable, the UK company ended the year worth less than nothing – with net liabilities of £207 million. Last year there was a final positive figure for shareholders’ funds of £478 million.

That seems to have happened as a result of moving cash off-balance sheet.

Notes to the accounts say that Ford UK “manages cash by cash-pooling with Dearborn.” There is then a reassurance that “the risk to group liability is remote.”

Ford did not hold back on research and development. The figures show that £415m was spent last year, compared with £366m in 2007, which is a rise of 13%. Ford is now wedded to faster product renewal and vows not to cut new product budgets.

Mark Simpson CV

  • Appointed marketing director Ford of Britain October 2008.
  • Born in Bradford.
  • University at what was then Huddersfield Polytechnic, one of only two places in the UK where it was possible to study marketing and engineering.
  • Joined Ford truck parts in 1985
  • Joined Ford of Europe parts and service in Germany in a marketing role in 1989. (‘exciting times with the fall of the Berlin wall”).
  • Took a field course in the UK in 1992. Became district parts and service manager. Then set up a fleet business centre in Byfleet.
  • In 1996, at the age of 33, became managing director for Ford Hungary for two years. “We invested a lot and took market share of 5% to 12%. Competitors then were Suzuki, Daewoo and Opel. The task was to sell on value for money, and grow share.”
  • In 1998, he went to Detroit to work on product for the global market division. He worked in the cab-forward truck business.
  • “In those years – in the late 90s – gas was 85 cents a gallon and we introduced trucks and SUVs. The trucks were for the men, but then we put a box on the back and invented the Explorer that was the height of cool. It was the start of the dotcom boom and delivery companies needed very different trucks for home delivery to the ones that they had for long-distance trucking. Ford made $10bn in 1999.”
  • Went to New York to be regional manager for Lincoln Mercury before getting back to the UK in 2002 to be manager of vehicle and derivative programming, with the job of planning the monthly production cycle worldwide at all the plants.

 

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