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US:Ford's New Drive: Marketing

Business Week Online
By David Kiley

Ford's New Drive: Marketing

New President Mark Fields is determined to make the brand appeal to buyers again. How high are the stakes? "The clock is ticking," he says

Mark Fields had a message when he took over as President of Ford Motor's North and South American operations last September: "Change or die," he would tell his colleagues. Among them was his new boss, family heir Bill Ford, who assumed the role of CEO in October, 2001, in an effort to turn around the company's sagging fortunes.

Today, Ford (F ) is still trying to engineer a turnaround -- and Fields is Bill Ford's field general. On Jan. 4, the carmaker posted a year-over-year sales decline of 9% in December -- its fourth consecutive monthly drop despite this being new-car season. For 2005, Chevrolet outsold Ford for the first time in 19 years. Ford's domestic market share has fallen to 15.6%, down almost five percentage points since 2001. And Ford stock closed at $8.01 a share on Jan. 4, almost half what it was when Bill Ford took over four years ago.

Fields, 43, meant his warning back in October, and means it now, he told an audience at the Greater Los Angeles Auto Show on Jan. 4. He explained he had delivered a similar warning to Japanese auto maker Mazda five years ago, when he ran its struggling global operations for Ford, which holds a controlling stake. He has certainly been consistent: "It's time to take back our future. And the clock is ticking," he told the auto show crowd.

NEW TWIST. Fields is a relative newcomer at the tightly knit Ford Motor, where turnover in the executive ranks is low compared to many other corporations -- he has been at the company a mere 17 years. Fields has also run Ford Europe and the company's Premier Auto Group, which includes Volvo, Jaguar, Land Rover, and Aston Martin.

On Jan. 23, Ford will announce a detailed plan for growth, dubbed "The Way Forward," which will include plant closings, the discontinuation of some models, and staffing cuts, Fields revealed. All those things were part of the Bill Ford-led turnaround plan launched in January, 2002, which hasn't produced strong enough results.

But the latest effort has one new twist -- a strategy to revitalize Ford's main brands of Ford, Lincoln, and Mercury, and a stronger emphasis on development of new products. Fields, in fact, is the first executive at Ford in modern memory who has brought "a true marketing mindset to the top of the company," as Ford's chief North American designer, Peter Horbury, puts it.

SLOGAN ROTATION. In truth, Ford has always been a more sales-driven company than most. "It has always been a move-the-metal company," says Fields, even if its legacy as having invented the auto assembly line has sometimes obscured its marketing creativity.

Ford changes or tinkers with its ad slogan and brand strategy every 18 months or so, as executives change jobs in and out of finance, operations, sales, and marketing. The exception is "Built Ford Tough," which has successfully sustained the truck business as a familiar positioning for many years.

But the company has struggled with promoting the car side of Ford's business. Its current slogan, "Built for the Road Ahead," followed the balky, "If You Haven't Driven a Ford Lately, Look Again," which lasted two years and followed "No Boundaries," which lasted less than two years. "Advertising and even brand strategy at Ford has been viewed as somewhat disposable," worries one insider, who sees Fields' reemphasis on marketing as a positive step.

CAR PROBLEMS. With CEO Bill Ford concentrated on revitalizing the product lineup, now marketing and product design have to work together, Horbury says, so the Ford brands register strongly with customers once more. "You would be hard pressed, I think, to find a link that connects Ford cars and trucks together in the consumer's mind, or to pin down what Ford cars stand for, and we're out to change that," he adds.

While the redesign of Ford's F-Series pickup, launched in 2004, has been well-received and has boosted sales, and the redesigned Mustang has been a huge hit with no incentives needed to sell it, the Ford Five Hundred sedan and Freestyle crossover SUV/wagon have been disappointments.

The problem: Customers don't seem to get what Ford passenger cars are all about anymore. These cars were meant to substantially replace the Taurus and compete against the Honda Accord and Toyota Camry, which have been the best selling four-door sedans in the U.S. for several years.

FLAG WAVING. The Five Hundred has been criticized for being underpowered and derivative of the late 1990s Volkswagen Passat. The Freestyle crossover entered a hot category -- car-based SUVs -- for the 2005 model year, but its styling and lack of power was so poorly received that Ford has already announced it will be replaced in just a couple of years.

"Those cars were exercises in packaging rather than design, and precisely reflect why Ford's designers need sustained brand strategies to guide them," says marketing con******t Dennis Keene, who works with consumer-product companies on design strategies. Fields doesn't disagree with that. "What ails us? It goes beyond economics…we lost our way. We lost touch with our customers, particularly our car customers." And Fields says once new brand strategies are locked in, they won't change quarter to quarter if sales lag. "You can't manage brands like that, looking for a silver bullet from marketing."

At the top of his agenda is a focus on branding Ford as "American and innovative." Internally, says Fields, the language guiding designers and marketing staff is "Red, White, & Bold." Ford is not out to play a jingoistic "pro-American" card in its communication, says Horbury, but rather capture American "values, culture, and optimism" in its designs. He points to the new Ford Fusion four-door sedan, especially its tailored body-panel creases and toothy, bold, front-end grille.

AIMING AT THE LOW END. Then, Ford will launch new models in segments where the auto maker has been largely absent, Fields says. The new Ford Edge, for example, to be unveiled next week at The North American International Auto Show in Detroit, is a continuation of the visual design theme set forth in the Fusion. The vehicle, Ford hopes, will make up for scant demand for the Freestyle when it goes on sale in late 2006.

Ford has long had only one entry-level line of cars in its Focus lineup. Fields says the company is determined to bring out a lower-cost model, priced between $9,000 and $13,000 in the U.S., so Ford can compete against inexpensive Korean -- and soon, Chinese -- imports that are selling well to young buyers.

That surely means manufacturing these cars and importing them from a cheaper labor market like South America or Asia. "Small is big in America -- particularly among the under-30 set," Fields says, adding that Ford will show a bold design for a small car next week at the Detroit show.

"ON THE OFFENSIVE." In the BusinessWeek/Interbrand 2005 ranking of The Top 100 Global Brands, Ford fell 9% in global brand value, and it trails rival companies Toyota (TM ), BMW (BMW ), and Honda (HMC ). Fields says he believes Ford can turn that around, and he points to other companies, like Motorola (MOT ) and Apple (AAPL ), which have successfully rebuilt their rankings.

"Apple and Motorola went on the offensive. They redefined themselves, they refocused on their brands, and they connected like never before with more customers," says Fields. That will require quite a bit of change, all right. But for Ford, the alternatives are all unacceptable.

My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....
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