What Is Marketing? Ford Cars Go in for a Service

FORD CARS GO IN FOR A SERVICE

To many people, cars come pretty close to the goods dominant extreme of a goods–services continuum. They are produced in factories from the combination of thousands of components, and to most people the physical properties of a car can readily be assessed. But recent experience from the car sector suggests that car manufacturers may be rather more enthusiastic to describe themselves as service oriented companies.

The days are long gone when a car manufacturer would sell a car on the strength of its design features, and then forget about the customer until the time came to replace the car three years later. Car manufacturers have realized that car buyers seek more than the tangible offering—important though that is. Over time, they have moved increasingly into services in an attempt to gain a larger share of car buyers' wallets.

In the UK, Ford has led the way in many aspects of this increasing service orientation. It saw an opportunity in the 1970s with the liberalization of consumer credit regulations to offer car buyers loan facilities with which to make their car purchase. Not only did this make it easier for middle income groups to buy its cars, it also allowed Ford to retain the margins which would otherwise have gone to banks who were the main alternative source of car loan finance. Ford Motor Credit has become a licensed credit broker and a major profit centre within the company.

The next major attempt to gain a greater share of car buyers' wallets came through offering extended warranties on the cars it sold. Traditionally, new cars had come with just twelve months warranty, but Ford realized that many buyers wanted to buy peace of mind that they were not going to face unexpected repair bills after their initial warranty had expired. Increased competition from Japanese importers, and the improving reliability of its new cars encouraged this development.

By the mid 1990s, Ford came round to the view that many of...