Ford Motor Company Pricing and Distribution Strategy
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Ford Motor Company summary on its pricing strategies and distribution channels.
Do you believe these strategies are effectively reaching and serving the product's market segment?
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This very detailed solution provides a summary on Ford Motor Company's pricing strategies and distribution channels. It discusses if these strategies are effectively reaching and serving the product's market segment. Includes APA formatted references.
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Ford Motor Company's distribution channel is its retail network of authorized retailers. In 1998 Ford launched Ford Retail Network (later named Auto Collection) to test best practices for dealers and also to create an "alternative distribution channel to compete with new, publicly owned retail chains such as AutoNation" (Ford Motor Company, 2011). This was abandoned a few years later. In 1999 Ford attempted to sell off-lease vehicles online. This was forbidden by Texas, which forbids a manufacturer to act as a retailer. In response, Ford set up FordDirect.com as a joint venture with dealers. Dealers handled paperwork and delivered vehicles but customers negotiated prices online. FordDirect.com was "set up to refer leads to Ford dealers for a fee. Ford owned 20 percent of the venture, and dealers owned 80 percent. It generated 130,000 leads a month for dealers in 2002, up from 90,000 a month in 2001" (Harris, 2003). The company also uses a SmartOrder system among dealers to help better guide dealers on the vehicles that will sell the best, thus allowing dealers to fine-tune their inventory and avoid having cars sit, in need of discounting.
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