Ford Ka

The Ford Ka case introduces the fundamental problem of market segmentation and target selection. Ford’s problem does not fit the ‘textbook’ segmentation process since it developed the Ka before determining a target market for it. However, this is frequently the case, for example, when a firm copies a successful product idea (like Ford did) or wants to introduce an existing product in a new market to expand its geographical coverage. The case illustrates that even in this situation, market segmentation and target selection are fundamental to a product’s success.

The following questions should help you to analyze the case. 1. How did Ford (and car manufacturers in general) segment the overall car market? What was the typical small car marketing strategy in the past? Using production costs and price( income and age Small cars sold to younger, lower income buyers Large cars to older, wealthier buyers and families

1980s and 1990s environmental and demographic changes affected the French car market increased road congestion and problem with parking ( more people attracted towards smaller cars lower fuel consumption another factor attracting consumers to smaller cars

Also average size of households declined to less than 3( increasing feasibility of small cars as a primary source of family transportation Rise in number of working women ( increasing women buyers

In the past the product categorization was based on car size, engine output an price of a car

2. Why did Ford develop the Ka? Is the existing segmentation approach still applicable?

In response to the changes in small car market ( where people wanted cars based on their needs and price was no longer the most important factor People wanted features similar to larger models ( improved safety features (airbags), robustness, more space/functionality, power steering, great performance

Ka was developed to compete