Ford's Market Segmentation

Recently, my marketing class covered a topic known as market segmentation. Market segmentation involves grouping potential buyers who have common needs and will respond similarly to marketing action. Market segmentation is important for companies to do because it allows them to group people with similar consumption behavior. This can then help the company make specific marketing programs, and even make specific products and services that apply to different market segments.

A company that does a good job segmenting their markets is Ford. Ford is classified as a company that has multiple products and multiple market segments. Ford has a wide variety of vehicles, including pickup trucks, sedans, minivans, and SUVS. Ford has developed a wide variety of vehicles to cover a wide range of market segments. Ford doesn’t just want to capture one group of car buyers, but rather as many as they can. And because Ford is aware of their market segments, they can market their products differently. You can clearly see the difference between a Ford truck advertisement and a Ford Focus advertisement. This is because Ford recognizes that the people who often buy these different products are in different market segments.

Above is a commercial for a Ford F150. Clearly, it is marketed towards a very different market segment than other ford vehicles. The truck is described as tough, durable, and strong. The advertisement also centers around a man who is using power tools and doing other hard labor. Clearly, this commercial is targeted towards a hard-working male in his 30s-50s who needs a truck to do hard work.

Here, we have a Ford Focus commercial. This commercial highlights the Focus’s fuel efficiency, fast acceleration, and high-tech display. It is clear that this commercial targets a different segment than the F150 commercial. Perhaps this segment targets young adults who want a flashy yet fuel efficient vehicle.

Another concept we covered recently in my marketing class was a concept called cannibalization. Cannibalization occurs when new products steal customers and sales from previous products. This happens pretty frequently, and it is a natural process when developing new products. Recently, Ford has realized that their Explorer SUV and Focus-C models have been cannibalizing older products like the Ford fiesta and the Ford Edge. The link below is an article that gives more information about Ford vehicles be cannibalized.

http://wardsauto.com/industry/newer-ford-models-cannibalizing-sales-older-siblings

This could be the result of a few possibilities. One possibility is that consumers want to buy newer products because they see them as better than the older models. Or, Ford users now have different preferences for their vehicles, perhaps better gas mileage or a more spacious vehicle. No matter the reason, Ford’s older models are being cannibalized for their newer models. Although this isn’t a terrible thing, Ford could do a few things to increase their sales. They could lower prices, or add more benefits for the models that are losing sales. Or, they could simply focus more on their products that are doing better. Either way, Ford must recognize how consumer behavior in their different market segments have changed over time.

Works Cited:

http://wardsauto.com/industry/newer-ford-models-cannibalizing-sales-older-siblings

https://www.youtube.com/watch?v=fURcgb1BGmA

https://www.youtube.com/watch?v=DNRFjBGf_uY

http://politicaledu.org/index.php/2017/01/03/trump-and-ford/