Strategic Marketing: Ford's Market Entry in China for Electric Bicycle

This report discusses Ford's market entry in China for electric bicycle through strategic marketing. It includes a PESTLE analysis, market-entry methods, market segmentation, and Porter's generic strategy.

Strategic Marketing
1

TABLE OF CONTENT
Introduction .....................................................................................................................................3
MAIN BODY...................................................................................................................................3
PESTLE Analysis-.......................................................................................................................3
Market-entry Methods.................................................................................................................5
Market segmentation and targeting-............................................................................................7
Porter's generic strategy-..............................................................................................................8
Conclusion ....................................................................................................................................10
REFERENCES..............................................................................................................................11
2

Introduction
Strategic marketing refers to the procedure of making strategies within the present
marketing plan to maximize the revenue of the company (Hansen and et. al, 2018). It is the
method which is being adopted by any company so that they can differentiate themselves from
the competitors. In this report a company called Ford Motor has been discussed. Ford Motor
company is an American multinational auto maker and this company sells auto-mobiles and
commercial vehicles. This report states about entrants of Ford in China by introducing electric
bicycle. This report contains Pestle analysis and also defines the threats which Ford can face in
new market for the new product. Although different modes of market entry is being discussed in
this report. Market segmentation and targeting for the electric bicycle is also described in this
report. Porter's generic strategy is also mentioned in this report.
MAIN BODY
PESTLE Analysis-
Political-
China is having simple governmental policies and legal infrastructure. Due to which
organizations like Ford can efficiently perform the legal operations like registration of new
product or services to the law enforcement authorities within the country. This becomes more
significant due to the fact the since China is not having a democratically appointed government
which is often being changes on an scheduled interval within China (Pant, Kaura, 2020). Due to
which the governmental policies also remain unchanged, as compared to the democratic
countries. Therefore operations within the country are also not being changes on an scheduled
basis because of which companies manage to achieve simplicity in strategy development due to
which high work productivity.
Ford is an multinational organization which tend to provide its services all across the
globe. Due to which changing international politics often tend to affect the organizational
working. This becomes significant due to the fact that China is tended to have boarder issues
with its neighbouring countries (Pandey, 2020). Due to which Chinese government may
suddenly changes the legal policies within the country. Due to this Ford may have to face sudden
3

changes in the governmental policies which will make a direct significant impact upon the
organizational working within China.
Economical-
Due to the impact of COVID-19 several cases of job loss can be seen within China
because of which the buying capability of the segmented customer base of Ford is being affected,
within the country. Due to this the company has to ensure that pricing which is being established
on the organizational product is affected. Therefore, company may have to establish low pricing
on the product placement because of which organizational profit margin will be affected. This
has to be done because due to lack of source of income the Chinese customers are not being able
to make purchases.
China's market is full of some of the biggest market competitors because of which Ford
have to use appropriate pricing strategy (Capuder and et.al, 2020). Through which a large
segment of customers can be attracted toward the company by which high sales can be achieved.
But also at the same time company has to ensure that it is able to achieve high returns through its
investments. By which company can achieve ensure that it is able to achieve efficient economic
growth.
Social-
China is having a large customer base for electric vehicles thus developing products as
per customer preferences. Company can ensure that it is able to achieve high level of customer
engagement. This becomes significant due to that fact that Chinese people tend to utilize electric
bicycles as compared to cars, therefore sales of electric bicycles is higher within China. This is
important because in order to achieve high sales company has to ensure that it is able to develop
positive image in front of the customers and is able to achieve high brand awareness. This
becomes important because the segmented customer base of the Ford electric vehicle is the
younger generation and budget customers. Due to which ford has to ensure that organizational
advertisement is developed such that it is able to attract new customer towards the organization.
Technological-
Since ford tend to enter into the China's market for its electric bicycle. Due to which it is
very important for the organization that it is able to achieve the appropriate raw material for the
development of batteries. Due to which easy availability of Lithium Ion for battery for the
4

development of battery will be highly efficient for Ford. This happens because Lithium Ion is
most suitable for the battery development because of which. Through this easy availability
organizational expenditures made on the transportation of the raw material is often being
reduced.
Easy availability of the machinery and infrastructure to charge the electric vehicle is also
an important fact which the company often faces. Since China is having a large customer base of
electric vehicles. Therefore by having an pre-installed infrastructure of the electric vehicles Ford
can ensure that infrastructure installation cost is reduced for the organization.
Legal-
China is having a simple legal legislation because of which it has managed to attract wide
range of different companies towards itself. Through this it tends to ensure that it is able to
attract different type of international organizational towards itself. This happened because due to
high availability of different type of companies the product manufacturing cost is reduced (Liu
and et.al, 2018). Therefore since Ford tend to enter within the market of China thus company is
empowered by the local government to develop direct contact and fulfil the legal requirements.
This is an important fact for the company because if the legal legislations often tend to
change then it will make negative impact upon the organizational working of the company. This
happens because organizations have to develop their working strategy as per the legal laws. It is
important because if the company is not able to develop its working as per the governmental
criteria then company may have to pay legal penalties. Which will affect the company's
economic growth and with that will make negative impact upon customer's level of engagement
with the company.
Environmental-
Organizations, has to ensure that it is able to play its role in social welfare activities and
due to which often tend to perform CSR activities. This is important for organizations like Ford
because in order to increase customer's high level of engagement with the company. Ford to
ensure that social welfare activities are being done through this it can develop a positive image in
front of the customers. This can also be used as an traditional tool for company to promote itself.
Therefore this is effective but also on the other hand this increases organizational expenditures.
5

Market-entry Methods
Organizations like Ford tend to increase their geographic area due to increasing market
competition and in order to achieve high sales. Through increasing the geographic reach,
company make sure that it is able to achieve diversity in its customer base by which sales can be
increased. Following are the different market-entry methods by which organizations can develop
their appearance in the desired area.
Joint Ventures-
Joint venture is the particular type of organizational partnership in which a third
independent organizational is being developed. Since, a new company is being developed by two
of the existing market companies due to which it is highly cost-efficient (Bai, McColl and
Moore, 2017). This is often being made for increasing the geographic reach of the company into
a new market place. This will be highly productivity for Ford because company tend to enter into
the market of China for its electric vehicles. Due to this by developing a joint venture it can
minimize the expenditures which has to be done for the installation of the appropriate
infrastructure for the new product. This will highly effective for Ford because through joint
ventures like this it can ensure that it is able to implement information sharing as well. By which
appropriate steps can be taken for the achievement of desired target.
Franchising-
Franchising is the organizational activity through which it can achieve rapid expansion at
different geographic location. This is highly efficient for the organizations in which the
customers are aware of the organizational offering through which it tend to ensure that it is able
to achieve high level of organizational sales. This will be useful for the Ford because since
company is having a high brand awareness thus company may use this to establish multiple
stores through which high sales can be achieved.
Buying a company-
This is highly effective market entering method for organizations like Ford within the
marketplace like China. In this strategy company tend to buy a existing market company within
the local market and then on of the products. Once the company is able to sell its products
directly to the specific market segment then on that basis the company tend to use the pre-
installed organizational network of the existing market company (Jin and Hurd, 2018). This is an
6

effective way because since company is able to achieve the pre-installed network. Therefore the
time consumption on the installation will be reduced by which organizations can quickly
establish their operations. With that company can also achieve an proper detailed underpinning
about the local market and on that basis it can improvise its operations accordingly.
Recommendation-
From the above analysis it will be recommended that Ford may use Joint Venture as an
entry method because the company tend to provide electric vehicles to the customers. Due to
which company may need to achieve a detailed underpinning about the customer's buying
preferences. Through this it can ensure that it is able to make appropriate changes in the
developed product. Through which it can ensure that customers are empowered to develop a
direct contact with the organization.
This is effective working measure but also on the other hand to company has to ensure
that as per the Cross-border e-commerce (CBEC) law of China. External companies from outside
the china have to pay high taxes to the government due to which their profit margin is reduced.
With that the Chinese lawsuit tend to restrict external companies to own more than 50% of the
shares to the Chinese companies. Through this step the Chinese government tend to ensure high
control within its geographic reach (Bench, 2020).
With that company also has to make sure that it is able to expend its reach to the
customers are different geographic locations by which organizational sales can be increased.
Thus it is very important for the organization that it is able to use the pre-installed infrastructure
of the company by which chances of goal achievement will be increased.
Market segmentation and targeting-
Market place is fill with the customers with different requirements due to which
organizations have to implement market segmentation. Through which it tend to identify the
specific customers segments for the organizational product offering. In order to achieve high
profitability market is being segmented on the basis of different factors. Following are the
different types of segmentation.
Demographic segmentation-
It is the type of market segmentation in which the market is being segmented on the basis
of age, gender, income and other factors. This becomes important because with the changes in
7

the selected working procedure also tend to make impact upon the customer's buying procedure
(Qu, Qu and Chen, 2018). This can be seen in the case of changes in income in which the
customers from the higher class of the society tend to ensure that they are able to achieve rare
products. Due to which often tend to pay higher price for the rarity, thus by establishing premium
pricing customers of the higher class can be attracted towards the organization.
Psycho-graphic segmentation-
In this type of market segmentation market place is being segregated on the basis of the
buying procedure of the customers. This segmentation is done on the basis of customer's
lifestyle, hobbies, life goals and many more. This is an important step through which the
targetted customers can be identified. Thus once Ford is able to identify the targetted market
audience within China. Then on that basis company can develop its advertising strategy such that
the targeted customer base can be attracted towards the company. This will be highly efficient
for Ford because the targetted customer base for the electric vehicle which the Ford tend o
introduce in the market of China. Therefore the targetted customer base of the organization
would be the customers of the economic class due to product's affordability.
Geographic segmentation-
Geographic market segmentation is the type of market segmentation process in which the
market place is being divided on the basis of geographic areas. This done because of the changes
in lifestyle which happens due to changes in the cultural heritage of different locations. It can be
seen in the differentiation of lifestyle at urban and rural due to which customer's buying process
is also being affected (Shao, Chen, Li and Yang, 2019). This is important type of market
segmentation for Ford because company tend to introduce electric vehicle to the China. In order
to achieve high return of investment organizational strategies have to be established in heavily
crowded locations. Therefore customers of the urban location will be the targetted audience for
the company. This also becomes significant due to the fact that company have to establish an
complete infrastructure for the installation of the electric vehicles. Due to which it may have to
face high expenditures to establish infrastructure at the rural location because of which urban
location is often being used.
8

Porter's generic strategy-
Porter's generic strategy is the organizational activity through which it tend to pursue its
strategies through which company assures that it is able to achieve a competitive edge.
Following are the different approaches of the company.
Cost leadership-
Cost leadership is the organizational step through which the company tend to provide low
pricing then compared to the other market competitions. Through which it tends to assure that it
is able to influences customers that they can achieve best in class product at minimum
expenditures. This is important step through which the company tend to ensure that it is able to
achieve high level of brand awareness and with high sales can also be achieved. This is achieved
because in order to achieve efficient economic growth company has to ensure that high sales are
being achieved. This is an effective way but on the other hand company has to achieve efficient
profit margin organization has to achieve high sales. Through which the high returns can be
achieved by which the chances of goal achievement will also be increased.
Differentiation-
This is the organizational strategy in which the company tend to identify customer
requirements and then on that basis product is being developed. Through this approach company
ensure that it is able to develop new and rare product by which high pricing can be set. This is an
highly effective way because by developing new product company can attract the customers
from the higher class of the society. This happens because of their engagement in utilizing the
rare product and have a luxury lifestyle, therefore premium pricing can be established. Premium
pricing will be highly effective for the organization because through this pricing strategy
organizational expenditures made for the development of product can be efficiently fulfilled.
This is highly effective because since the product is being developed according to the specific
customer's requirements due to which high level of customer engagement can be achieved
(Hansen and et.al, 2018). This is beneficial for the organization because it is able to ensure
customer that company is able to fulfil their requirements because of which their level of
engagement with the company is also being increased.
Cost Focus-
9

In this type of organizational strategy company tend to narrow its targeted customer base
segment and with that low pricing on the product placement is being established. Through this
approach company ensure that specific customer base is being attracted towards the organization
due to which the company tend to reduce pricing on its products (Chinese, 2019). This is
important step due to the fact that since concentrated efforts are being made for the achievement
of the specific customer base. Therefore, company also tend to provide creative customer
attracting offers through which new customers can be attracted towards the
Differentiation focus-
This is the organizational strategy in which it tend to analyse the customer requirements
of the specific market group. Than on that basis develop organizational working accordingly by
which the desired targeted market audience can be attracted towards the organization. Thus in
order to increase the overall organizational sales company tend to implement creative cost
reduction methods. Through which the customers can be ensured that they are able to achieve
high level of brand awareness. Through this strategy company tend to ensure customers that it is
able to fulfil their requirements by which customer's loyalty towards the organization can be
increased.
Recommended strategy-
Since Ford tend to enter into new market of China because of which company has to
ensure that it is able to achieve high level of customer engagement. Due to which it will be
highly efficient for the company that it tend to implement Cost leadership because since China's
market is full with some of the biggest market competitors. Due to which by providing quality
products at low pricing company tend to empower customers to develop direct contact with the
organization by which it can achieve high sales. This also becomes significant due to the fact that
company has to ensure that it is able to attract wide range of customer's towards the company by
which it can implement diversity in its customer base. It is important because by attracting wide
range of customers company can ensure that it is able to provide products such that high sales
can be achieved.
It is important because company has to make sure that it is able to achieve a efficient
economical growth and by having a large customer base it can ensure that it is having
organizational sales. Through which it can make appropriate improvisations in its working
10

process as per the organizational requirements and current market trends by which the chances of
goal achievement for the organization will be increased.
Conclusion
After analysing the entire report it can be concluded that it speaks about introducing new
product in the new market. This report includes Pestle analysis about the company which helps
them to what factors are affecting the profitability and sales of then company. Apart from this.
Various modes of market entry which is suitable for the company. The concept of market
segmentation and targeting have been explained in this report which helps the company to know
whom they have to target for the product, and also company can evaluate its potential customers.
At the end this report speaks about the porters generic strategy through which the company can
gain competitive edge in the market.
11

REFERENCES
Books & Journals
Bai, H., McColl, J. and Moore, C., 2017. Luxury retailers’ entry and expansion strategies in
China. International Journal of Retail & Distribution Management.
Capuder, T. and et.al, 2020. Review of challenges and assessment of electric vehicles integration
policy goals: Integrated risk analysis approach. International Journal of Electrical
Power & Energy Systems. 119. p.105894.
Chinese, E.V., 2019. THE CHINA ELECTRIC VEHICLE INDUSTRY. Strategic Finance.
Hansen and et. al, 2018. Strategic marketing in the global forest industries.
Jin, H. and Hurd, F., 2018. Exploring the impact of digital platforms on SME
internationalization: New Zealand SMEs use of the Alibaba platform for Chinese market
entry. Journal of Asia-Pacific Business. 19(2). pp.72-95.
Jussani, A.C., Wright, J.T.C. and Ibusuki, U., 2017. Battery global value chain and its
technological challenges for electric vehicle mobility. RAI Revista de Administração e
Inovação. 14(4). pp.333-338.
Liu, F. and et.al, 2018. China’s electric vehicle deployment: Energy and greenhouse gas
emission impacts. Energies. 11(12). p.3353.
Qu, Y., Qu, H. and Chen, G., 2018. Market segmentation for a leverage revitalization of China’s
inbound tourism: the case of US leisure tourists. Current Issues in Tourism. 21(6).
pp.646-662.
Shao, S., Chen, Y., Li, K. and Yang, L., 2019. Market segmentation and urban CO2 emissions in
China: Evidence from the Yangtze River Delta region. Journal of environmental
management. 248. p.109324.
Varadarajan, R., 2019. Theoretical underpinnings of research in strategic marketing: a
commentary. Journal of the Academy of Marketing Science.47(1). pp.30-36.
Online References
Bench, J., Why China Deals Don't get done, 2020 [Online]. Available
through:<https://harrisbricken.com/chinalawblog/why-china-deals-dont-get-done/>
Pandey, U., The India-China Boarder Question: An Analysis of International Law and State
Practices, 2020 [Online]. Available through:<https://www.orfonline.org/research/the-
india-china-border-question/>
Pant, H., Kaura, V., China factor in domestic politics, 2020 [Online]. Available
through:<https://www.orfonline.org/research/china-factor-in-domestic-politics-68541/>
Roos, M., China: Cross-border e-commerce (CBEC) regulations for Chinese consumers, 2019
[online]. Available through:<https://www.mondaq.com/china/international-trade-
investment/806136/cross-border-e-commerce-cbec-regulations-for-chinese-consumers>
12