INS703

Ford Ka (C):

The Market Research Problem

07/2014-5066
The original case was prepared by Gigi Cothier under the supervision of Markus Christen and David Soberman,
Assistant Professors at INSEAD. The market research version was prepared by Markus Christen and David
Soberman, Assistant Professors at INSEAD, and Seh-Woong Chung, Assistant Professor at Singapore Management
University. It is intended to be used as a basis for class discussion rather than to illustrate either effective or
ineffective handling of an administrative situation. Although this case is based on a real life situation, some names
and figures have been disguised. The information in this case has been obtained from Ford France, public sources,
and industry interviews.

Additional material about INSEAD case studies (e.g., videos, spreadsheets, links) can be accessed at
cases.insead.edu.
Copyright © 2003 INSEAD
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This document is authorized for use only in Dr. Neeraj Anand's MBA -LSCM course at University of Petroleum & Energy Studies, from January 2017 to July 2017.
 In early 1997, Gilles Moynier was preparing to move to a new position at Ford France as
Regional Sales Director. Nicolas Wertans, an Insead alumnus, was about to take his place and
become Brand Manager of the Fiesta and the Ka. Moynier needed to brief him on the short
history of the Ka.

Ford had decided to segment the market attitudinally and chose Freedom Lovers and
Attention Seekers as the primary target markets for the Ka. The heart of the target was a
customer between 25 and 35 years old, urban, and with a strong inclination towards new
products and innovation. Additional research showed that this target customer was a heavy
consumer of movies and magazines but watched TV two times less often than the average
consumer. As a result, the launch campaign focused on cinema advertising and direct mail
campaigns based on subscription lists to certain magazines. The advertising campaign
developed by Ogilvy and Mather of France departed from traditional product-benefit oriented
communication and instead used strong emotional imagery to capture people’s attention. It
tried to relate the hedonistic or passionate relationship of the target customers to their
automobiles. For example, cinema advertisement showed futuristic, young professionals in
dream-like sequences demonstrating their obsession with the Ka. The tagline “On ne pense
Ka ça.” was a pun on “On ne pense qu’à ça”, which translates as “You can’t think about
anything else.” The campaign received a lot of praise from professionals and won several
awards. (See Exhibit 1 for a copy of a magazine ad).

Ford spent FF50 million on marketing communications for the launch in 1996, which was
comparable to other launches (e.g., “New” Fiesta, VW Polo and Citroen Saxo). At FF59,300
the Ka was priced below the Renault Twingo (FF62,300) and above the Peugeot 106
(FF55,900).

In Gilles Moynier’s opinion, the main difficulty of the attitudinal segmentation was that,

“When we decided to adopt an attitudinal segmentation, we did not really know

whether the target customers represented a large or small population, who they
were or how to recognise them.”

Moreover, assessing the success of the launch was not easy. The campaign attracted a great
deal of attention in the automotive press and the reaction from journalists was very positive.
Yet by the end of 1996, after a little less than three months of sales, Ford had sold only 4,147
units in France for a share of the small car market of about 1.8% for that period. This was well
below the sales forecast of 6,800 vehicles, which had been based on experience with the
launch of the “New” Fiesta.

According to Alain Jund, Director of Dealer Training at Ford France,

“The first buyers of the Ka were innovators, not necessarily young – people who
had the self-confidence to attract attention to themselves and were not buying
their first car.”

This was different from the group of customers that traditionally frequented Ford showrooms.
In fact, over half the Ka buyers had not previously been Ford customers. As one dealer
described them,

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This document is authorized for use only in Dr. Neeraj Anand's MBA -LSCM course at University of Petroleum & Energy Studies, from January 2017 to July 2017.
 “Typically they are wives of people in a higher socio-economic bracket than that
of our traditional customer. The style of the Ka has attracted a more exclusive,
professional customer who is prepared to buy a new product that attracts
attention.”

(Exhibit 2 provides information about the Ford Ka buyer).

In spite of the Ka’s ability to attract a different type of buyer – more exclusive, professional,
and wealthier – to Ford showrooms, sales performance of the Ka across France was very
uneven. In particular, Ford Ka sales fell short of expectations at many dealerships located in
upper middle class areas. The compensation of salespeople at most dealers in France was very
similar. Typically, it entailed a small base salary and commissions on actual sales.
Commissions were invariably proportional to the price of a vehicle sold. Moynier knew that
Nicolas Wertans would have to address the variability of sales performance across dealerships
to ensure the success of the Ka.

After six months of sales, the main challenge for Ford was to identify strategies that would
increase sales of the Ka. One of the problems Wertans would have to address was to resolve a
number of conflicting opinions within the Ka marketing team about what should be done.

Thierry Bonnet of Ogilvy and Mather was adamant that the advertising should continue in its
current form otherwise the Ka would lose its carefully conceived image:

“We will destroy everything that we have achieved with this car if we broaden the
campaign to appeal to other targets. People want to be sold a dream of something
different and that is what we have given them. A product-benefit campaign could
put us alongside many other small cars and the Ka might find it more difficult to
compete.”

Competition was expected to heat up with new entries (e.g., VW Lupo, Smart) and updated
products (e.g., Opel Corsa) scheduled to hit the market in the next few months.

Henri Godefroy, owner of the Argenteuil dealership, did not agree at all:

“Our initial advertising campaign was too esoteric for our customer base. The
campaign created an image risk for the Ka. There are certain customers who do
not feel comfortable in a car that would draw that much attention to them. What
we need now is a stripped-down version of the Ka without power steering which
we can price FF10,000 below the current price to attract new customers and
increase volume.”

Jean-Pierre Gaillot, who managed the Puteaux dealership, had a different opinion:

“I am not so sure that going down-market will allow us to increase sales volume
successfully. I think a better option is to focus and reach our current target more
effectively. I am selling the Ka with all the options, leather seats, air-conditioning
– you name it. I think we should build on our strengths and offer a convertible Ka.
It would be the only car in the Basic-B segment to offer a convertible model.”

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This document is authorized for use only in Dr. Neeraj Anand's MBA -LSCM course at University of Petroleum & Energy Studies, from January 2017 to July 2017.
 Exhibit 1
Copy of Magazine Launch Ad

Exhibit 2
Buyer Profile of the Ford Ka and Selected Competitors in 1997

Buyer/Household Ford Lancia Citroen Peugeot Rover Renault

Characteristic Ka Y10 Saxo 106 100 Twingo
Avg. Age (years) 44 45 50 48 46 46
Avg. Annual Income
268 310 198 200 210 240
(FF 000s)
Women (%) 59 60 44 52 62 55
University Graduates
36 56 32 32 40 39
(%)
Occupation (%)
Professional 12 14 6 4 1 12
Clerical 53 45 27 44 45 37
Manual Worker 4 5 14 10 3 12
Other 12 12 18 14 25 15
Retired 19 24 35 28 26 24

Source: Ford France.

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This document is authorized for use only in Dr. Neeraj Anand's MBA -LSCM course at University of Petroleum & Energy Studies, from January 2017 to July 2017.