Introduction
Today’s entrepreneur is facing the most informed consumer base in the history of marketing. This information makes the market extremely powerful and seen a shift of power from the marketer to the customer. Within the course of the 20 th century, the marketer had taken the decision from the consumer’s hands and developed the capability to make the consumer purchase any product the marketer deemed fit. This is because the marketer had absolute control of information and could, therefore, craft any narrative. Today’s marketer faces the information age consumer who knows so much, perhaps even too much and is, therefore,
very hard to sway. Instead of seeking to sway this very informed consumer, a change of tactics would be ideal. This change of tactics can include seeking to make what the consumer wants to buy, instead of seeking to make the consumer buy what the marketer is making. In this regard, the marketer can take advantage of the aspirations, desires and even vanities of the potential consumers to create a market niche that cannot fail.
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Overview of the Company
The phrase “A major firm in the USA…… ailing business” describes a great number of US manufacturers, a good example of them being Ford Motor Company (Ford Motors, 2017). The suitability of Ford Motors is, however, enhanced by the fact that for over a century, this company has marketed itself as a friend of the consumer, who includes the masses. Ford has also marketed itself as an ethical company with a conscientious management, which places doing right ahead of commercial interests. When Ford Company rolled out its manufacturing assembly, its management announced that the company intended to produce cars cheap enough to be purchased and managed by its own employees. This kind of operational philosophy endears a company to the populace by causing the populace to believe that the company is out to aid the downtrodden. Further, this reputation has abounded for over a century with Ford remaining as one of the best employers in the world (Ford Motors, 2017). Another important factor to the instant scenario is the reputation of Ford when it comes to environmental factors. When major manufacturers in general and particularly motor vehicle manufacturers are getting admonished by environmental organizations for kindred degradation, Ford has been receiving compliments. This aspect will form an integral part of the intended storyline and the product that goes with it.
Product and Product Philosophy
The philosophy upon which the product to be canvassed will be based is quite simple. Ford must find a problem among the masses then come up with the solution for the problem. Instead of Ford having to struggle to convince the populace to buy its product, the populace will be rushing to Ford as a savior, thus doing all the marketing for the company. The first step is finding a problem that the company can capitalize on. This problem is the scary environmental issues that have bedeviled 2017 America. For a start, the environment and environmental concerns made the headlines when the Trump administration signaled withdrawal from the Paris Accord (Yan, 2017). Whether one supported or opposed the move, environmental issues formed part of the discourse between Americans making it a prime subject. Soon, thereafter, the environment itself added its voice into the discourse through adverse climatic conditions. Few things get attention in America such as the death of Americans for unnatural reasons. This year, weather conditions have gone out of its way to kill and maim Americans as well as cause wanton destruction of poverty. Researchers are also warning that the worst is yet to come. Many Americans today are talking about the weather and getting more open to the concept of climate change (Yan, 2017). Many of these Americans feel that if there was something they would do to extenuate the situation, they would do it. All Ford needs to do is to provide something for America to do about the problem. This solution should come in the form of a cheap yet fuel-efficient car. The car should be cheap enough for the general service to afford, not hybrid since this is also a source of pollution, yet fuel efficient enough to leave a minute carbon dioxide footprint (Jones & Kammen, 2014).
Interaction of Resources between Households, Business, and Government
Perceived [Household] Needs
Cars have never been considered as a basic need, but in many cases, they should be. America had been going through a process of extreme urbanization for the most part of the 20 th century. This made the cities extremely congested and uninhabitable. The large estates and housing projects became an anathema to good living. This resulted in an exodus out of the cities and into the suburbs. It is this exodus that has made city dwellers have as much need for private transport as rural dwellers (Jones & Kammen, 2014). The demand for cars is, therefore, currently higher from a household perspective than it ever was. Further, the car is also having a higher usage than before hence fuel consumption is much higher. This means that families need cars just as they need to cut fuel costs. When this is added to the desire to conserve the environment, a great motivation to buy the cheap yet low fuel consumption vehicle is augmented.
Present Business Climate and performance
According to Bomey (2017), car sales in America hit their zenith in 2016 with over seventeen million vehicles sold in the United States. In 2017, however, vehicle sales began to plummet, more so in the sedan and smaller vehicles category. The market for larger vehicles has, however, continued to hold steady. The sudden and acute decline within the smaller cars market, coming hot on the heels of record sales means it is time for a change of tactics. This is more so because the decline in purchases cannot be matched with a decline in the need for cars in America. This would, therefore, be an ideal time for a major local manufacturer such as Ford to change its approach towards marketing. The business climate, therefore, favors the project.
Government Regulations
Among the most significant elements of the US auto market is the issue of financing. Very few Americans fully own a new car with most of the purchases being made through financing arrangements. The most significant government regulation kindred thereto, therefore, relates to interests rates and financing regulation. For a start, the USA has a government that favors commerce in general and local manufacturing in particular (Moreno & Terwiesch, 2015). Secondly, America is facing a unique if not novel situation where it has a new government whose ratings are very low. It is almost impossible for this government to increase interest rates and very probable for it to lower them. Better financing terms through lower interest rates will result in better chances for the envisaged project.
Scarcity, Market Mechanisms, Price Elasticity, GDP, and Foreign Exchange
The US seldom faces a scarcity of motor vehicles based on the high volume of local manufacturers as well as a high focus by international players. However, this scarcity refers to general motor vehicles. There is a very high scarcity of the specific type of motor vehicle that is proposed for introduction in the instant project. Cheaper vehicles, in general, have a very high fuel consumption rate per mile traveled (Moreno & Terwiesch, 2015). Further, those vehicles specifically designed for lower fuel consumption are in hybrid format. This means that they come at a very high purchase price as well as a high maintenance cost. There is, therefore, a sufficient scarcity for a cheap, low consumption vehicle. From the perspective of market mechanisms, most motor vehicle purchases are made through financing instruments. Therefore, there is no need for an injection of a high amount of money into the economy to buoy car purchases hence market mechanisms will not be a hindrance. With regard to price elasticity, the envisaged product will be bringing to the market a common and necessary commodity but at an exponentially lower price. It will, therefore, be easier for the market to adjust to the new product than not to. According to CBNC (2017), GDP in America is on an upwards trend albeit on a slightly slower pace than in 2015 or 2016. This means that money is available but limited which favors a cheaper product. Foreign exchange is also a factor due to the necessity of imported raw materials. The dollar has depreciated more than it has appreciated in the international market a fact that does not favor importation of raw materials but will favor exportation of the finished product.
Trade and Productivity
The new product is designed to be cheaper than what is currently available in the market with profitability being based on sales volumes. This means that high volumes of the product will need to be manufactured for the process to be a success. Therefore, there shall be an increase in the purchase of raw materials and other components that contribute to the manufacturing of the product. The enhanced pecuniary activities will definitely spur a high exchange of monies which is bound to spur economic growth. Further, the need to sell higher volumes of the product will result in a higher level of kindred transactions. More Americans will be visiting more outlets. There will also be more financial instruments extended to a higher number of people, willing to purchase the cars. Therefore, the instant project will spur trade, productivity and by extension economic growth. This is as opposed to the current market outlook where Americans are mainly spending on SUVs and trucks according to Associated Press (2017). Albeit money is exchanging hands, it is only amongst smaller portions of the population with a smaller number of units being available in the market.
Unemployment, Inflation, and the Business Cycle
One of the most significant bearing factors in the success of the instant project is employment rates. The need for a motor vehicle as well as the ability to purchase one through financing or otherwise is directly proportional to employment rates in America. Based on Gillespie (2017), current unemployment rates exponentially favor the project. The rate of unemployment is at its lowest since 2001 when a terror attack changed the fortunes of the US economy. Further, even ardent government critics agree that this trend is going to hold in the coming years. More people will stand in need of cars due to the gaining of new or better jobs, a fact that favors higher sales for the proposed vehicle.
The USA is also enjoying a stint of lower inflation with the year ending August 2017 showing an inflation rate below 2%. When inflation is low, prices of most common products and necessities remain low, so does consumer anxiety. When consumers do not face urgent need or anxiety over basic needs, they are more inclined to invest and/or spend on secondary need such as buying a car or adding another car to their collection. Further, when inflation is low, it is easier to consider secondary factors such as the environment when making purchases (CBNC, 2017). All these are favorable for the instant project. Finally, the principal test for market cycles is the stock exchange. Based on recent activity in the America's main stock exchanges, the nation is headed for favorable economic times after suffering from the effects and after effects of the 2008 financial crisis. With low inflation and high employment rates, better times lie ahead for the nation’s economy as well as for the envisaged project.
Classical and Keynesian economics and Aggregate Supply and Demand
Under classical economics, the economy of a nation is looked at from a long run perspective without factoring the ups and downs occasioned through external intervention. These external interventions , more so those by government policy are factored within the Keynesian economic assessment. The classical assessment of the US economy shows a general upward trend based on contemporary parameters (Conerly, 2016). Generally, the US economy is very resilient and tends towards positive growth unless affected by adverse external factors. Among the external factors of highest impact is the advent of wars where the USA plays an active role. It is now over a decade since America commenced an active war, yet circumstances that can lead to the same have been coming and going. Therefore, the classical perspective is positive. The Keynesian perspective is, however, more positive than the classical. This is because the current US presidency not only understands economic issues but also has a great vested interest in making the US economy better. Their policies will, therefore, be geared towards this. This means that the short-run aggregate supply (SAS) will reduce, while long-run aggregate supply (LAS) will continue appreciating resulting in a stronger economy within which the envisaged project will thrive. A better economy means an injection of a higher amount of money into the economy which will enhance demand, which in turn will affect supply. LAS is, however, crucial for the development of a car and the production system thereof is expensive. It, therefore, necessitates a long-term economic outlook for a determination to be made. With the economy doing well and destined to do even better, the outlook is positive for the envisaged project.
Conclusion
Business environments are highly dynamic more so in modern times when consumers have gathered so much power through information. Rigidity, even for a well-established company such as Ford Motors can, therefore, be detrimental. This will call for a change of approach and perspective. Base on the analysis above, the best way is to make the products adjust to the markets rather than use marketing skills to try and make the market adjust to the product. The car industry in the USA is doing well with the last few years being record-breaking in car volumes. However, the focus is moving away from smaller cars towards larger cars. This is also a place of high competition. Ford can, however, take advantage of the current panic kindred to global warming to create its own car market niche. This is the niche of Americans who desire to do something about runaway pollution by buying energy efficient motor vehicles. These market has been hampered by the high cost of buying and running energy efficient vehicle. A cheaper yet energy efficient vehicle would be most agreeable to this group. The market dynamics and economic factors shows a good economic environment today and a projected improvement of the same in future. The instant investment would, therefore, not only encounter success but also help propel the nation out of its current decline.
References
Associated Press. (2017, January 04). 2016 U.S. auto sales set a new record high, led by SUVs. Retrieved September 22, 2017, from http://www.latimes.com/business/autos/la-fi- hy -auto-sales-20170104-story.html
Bomey, N. (2017, July 03). U.S. auto sales receding: Cars ailing, crossovers booming . Retrieved September 22, 2017, from https://www.usatoday.com/story/money/cars/2017/07/03/june-2017-auto-sales/447511001/
CBNC. (2017, July 28). US second quarter GDP meets expectations . Retrieved September 22, 2017, from https://www.cnbc.com/2017/07/28/2q-2017-us-gdp.html
Conerly, B. (2016, September 16). U.S. Economic Forecast 2017-2018: Mild Rebound. Retrieved September 22, 2017, from https://www.forbes.com/sites/billconerly/2016/09/16/u-s-economic-forecast-2017-2018-mild-rebound/#2d49c6dc5337
Ford Motors. (2017). Ford motor company overall sales down 7.5 percent in July, driven largely by lower fleet sales . Retrieved September 22, 2017, from https://media.ford.com/content/fordmedia/fna/us/en/news/2017/08/01/july-17-sales.html
Gillespie, P (2017, June 02). U.S. unemployment hits lowest level since 2001 . Retrieved September 22, 2017, from http://money.cnn.com/2017/06/02/news/economy/may-jobs-report-us-economy/index.html
Jones, C., & Kammen, D. M. (2014). Spatial distribution of US household carbon footprints reveals suburbanization undermines greenhouse gas benefits of urban population density. Environmental Science & Technology , 48 (2), 895-902
Moreno, A., & Terwiesch, C. (2015). Pricing and production flexibility: An empirical analysis of the US automotive industry. Manufacturing & Service Operations Management , 17 (4), 428-444
Yan, H. (2017, September 18). Maria, following Irma's path, is now a Category 1 hurricane. Retrieved September 22, 2017, from http://edition.cnn.com/2017/09/17/americas/atlantic-storms- jose -lee-maria/index.html
