Ford Ka:
The Market Research Problem (B)
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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Two weeks after presenting their initial results, Matthew Sell and Jeff Nash of Goldfarb
Market Research returned to the Ford offices to present the final results from the market
research study. Matthew Sell started his presentation with,
“The motto for the Ka from day one has been ‘Not business as usual’ and the
consumer research we have conducted seems to justify this approach. First, we
find that respondents seem to have fairly strong responses to the Ford Ka concept.
As a result, we present results based on three distinct groups of respondents:
“Choosers” who put Ford Ka in their top three choices, “Non-Choosers” who
put the Ford Ka in their bottom three choices and the final group that rates Ford
Ka in their middle four choices.”
(The demographic characteristics of these three groups are presented in Exhibit 1).
Perceptual Map
“From the survey results we developed a series of maps using multidimensional
scaling analysis (Exhibit 2). These maps show the position of the different cars
relative to each other for both “Choosers” and “Non-Choosers”.
Goldfarb named the axis by using the adjectives associated with each car by “Choosers” and
“Non-Choosers” provided in the preliminary report. From these maps we can see that
“Choosers” perceive the Ka to be similar to the Renault Twingo and the Opel Tigra, namely
youthful, exciting, and futuristic. “Non-Choosers” also perceive it to be youthful. But they
also believe that the Ka is poorly constructed and have a less positive perception than do
“Choosers”. Interestingly, the Nissan Micra and the Fiat Cinquecento were the least preferred
cars by all types of respondents and for “Non-Choosers” only the Ka, the Nissan Micra and
the Fiat Cinquecento are in the upper part of the perceptual map.
Segmentation
After the presentation, Gilles Moynier sat back in his chair. The market research provided a
lot of information but no clear answer about who the target customers should be. As a result
of the excitement the Ka project generated at Ford, everyone had something to say and they
made sure that Gilles knew about it.
As if he needed a reminder of the fact that time was running short, Marie-Louise, his assistant,
walked in and asked him when he would have a draft of his presentation ready for her to
prepare. Not having a clear answer for her, Gilles decided to see what she thought about the
Ka:
“Marie-Louise, since everyone here seems to have a view on the subject, who do
you think would be the typical Ka buyer?”
She was taken aback – it was rare that her opinion was sought in marketing decisions.
“Well, it seems to me that this is Ford’s real chance to attract women buyers. I
have never wanted to browse in a Ford showroom before, but the Ka is the first
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model that might tempt me. I think single working women would really be
attracted to this car.”
Gilles smiled. A gender segmentation of the market was what he and his marketing team were
arguing for. He had already thought of a folding shopping caddy that could be wheeled
straight out of the supermarket and into the boot of the Ka. There were solid reasons for
market segmentation by gender. A majority of “Choosers” were female. In 1996, 38% of all
cars in France were driven by women and three out of every 10 car buyers were women. In
addition, 44% of women car buyers interviewed said the reason they bought their current car
was that it was a small car for urban driving as opposed to 25% of men interviewed. However
Ford’s advertising agency in France, Ogilvy and Mather, was concerned that this approach
had already been taken by the Peugeot 106 and would be unoriginal.
Instead, the advertising agency was arguing for an attitudinal segmentation of the market. In
other words, it felt that the market should be segmented according to consumer life-styles and
behaviour. From the market research, Goldfarb had identified four attitudinal segments: (i)
Freedom Lovers – described as outgoing, social and active; (ii) Attention Seekers –
innovators, opinion leaders and flashy; (iii) Sensible Classics – responsible, risk-averse,
traditionalists; and (iv) No-nonsense Neutrals – brand wary, TV watchers, unenthusiastic
consumers. These segments emerged from the cluster analysis of different statements taken in
the survey. Exhibit 3 shows the overall choice pattern for the four clusters of the Ford Ka.
Exhibit 4 provides a demographic profile of the four clusters.
The agency argued that the targets for the Ka should be the first two groups, who would help
act as ambassadors to “Sensible Classics”. As Thierry Bonnet of Ogilvy and Mather had
argued so forcefully,
“This is Ford’s big chance to make an impact with some ground-breaking
campaigns. The Ka is made for design-conscious consumers who want to be
looked at. We must make sure they look at us by the creativity of our marketing
and advertising.”
Gilles felt nervous. He could see advertising budgets soaring in an attempt to attract an
elusive “attitudinal target” and he could predict senior management’s reaction to this kind of
segmentation scheme.
Senior management was risk-averse and felt that a traditional demographic segmentation
should be used. As they had pointed out, small cars remained a first-time buyer’s step on the
car-buying ladder. Age, income and household size remained the key factors defining
customer segments and the target groups should be working singles, first-time buyers and
multi-car households. They brushed away the fact that reaction amongst these groups in the
focus group sessions had been mixed.
“We are not trying to obtain Renault’s market share in France but a third of that
figure. We know how to target these segments, we have done it before and it
works.”
Gilles Moynier had heard a different opinion from dealers in the Ford network. As Jean-Pierre
Gaillot, manager of a dealership in Puteaux, a wealthy Parisian suburb put it,
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“We do not need fancy, esoteric advertising campaigns to sell the Ka. We know
the needs of our customers and we need a city car that competes directly with the
Renault Twingo, Nissan Micra and Peugeot 106. Segmentation based on which
car a customer already owns and the targeting of Twingo buyers will enable us to
achieve our commercial objectives. These customers can be reached via direct
mailing.”
This was a traditional method of car marketing and it presented many opportunities for direct
marketing since, in France, mailing lists of car owners by model and brand were readily
available. The problem that Gilles could see with this kind of approach was that current
Twingo buyers might now be looking to buy a C or D category car if their needs had evolved
with time. Furthermore, many of these customers might be reluctant to buy a non-French
brand.
Which of these different segmentation approaches and targeting strategies should he use or
had he failed to consider a more appropriate segmentation? How should he compare the
different segmentation approaches? It was clear that Ford had developed the Ka before
researching consumer needs, so he needed to find consumers whose needs the Ka could meet.
This was certainly a different exercise from the marketing he had learnt in business school.
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Exhibit 1
Demographics of Ford Ka Choosers and Non-Choosers1
a) ‘Gender’ Cross-Tabulation
Group
*
Gender Choosers Non-Choosers Middle Total
Male 46.6%** 50.0% 64.5% 52.0%
**
Female 53.4% 50.0% 35.5% 48.0%
Total 46.4% 28.8% 24.8% 100.0%
*
The effect of Gender is marginally significant (p < 0.1).
**
To be read as “46.6% of those who put the Ford Ka among their top three choices were male and
53.4% were female.”
b) ‘Age’ Cross-Tabulation
Group
*
Age Choosers Non-Choosers Middle Total
≤ 24 8.6% 4.2% 17.7% 9.6%
25 – 29 15.5% 18.1% 19.4% 17.2%
30 – 34 19.8% 16.7% 19.4% 18.8%
35 – 39 9.5% 15.3% 14.5% 12.4%
40 – 44 31.0% 20.8% 19.4% 25.2%
≥ 45 15.5% 25.0% 9.7% 16.8%
*
The effect of Age is marginally significant (p < 0.1).
c) ‘Marital Status’ Cross-Tabulation
Group
*
Marital Status Choosers Non-Choosers Middle Total
Married 56.9% 47.2% 43.5% 50.8%
Living Together 12.1% 8.3% 12.9% 11.2%
Single 31.0% 44.4% 43.5% 38.0%
*
The effect of Marital Status is not significant.
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Exhibit 1 (Cont’d)
d) ‘Children in Household’ Cross-Tabulation
Group
Number of Total
Children* Choosers Non-Choosers Middle
0 53.4% 62.5% 66.1% 59.2%
1 25.0% 16.7% 11.3% 19.2%
≥2 21.6% 20.8% 22.6% 21.6%
*
The effect of the Number of Children is not significant.
e) ‘First Car Purchase’ Cross-Tabulation
Group
First Car Total
Purchase* Choosers Non-Choosers Middle
Yes 11.2% 11.1% 25.8% 14.8%
No 88.8% 88.9% 74.2% 85.2%
*
The effect of First Car Purchase is significant (p < 0.05).
f) ‘Income’ Cross-Tabulation
Group
Household Total
Income (FF)* Choosers Non- Middle
Choosers
< 100K 9.5% 6.9% 11.3% 9.2%
100K – 150K 16.4% 20.8% 19.4% 18.4%
150K – 200K 15.5% 22.2% 19.4% 18.4%
200K – 250K 16.4% 22.2% 17.7% 18.4%
250K- 300K 24.1% 16.7% 17.7% 20.4%
> 300K 18.1% 11.1% 14.5% 15.2%
*
The effect of Household Income is not significant.
1
“Choosers” = respondents who put the Ford Ka among their top three choices of the list of ten cars;
“Non-Choosers” = respondents who put the Ford Ka among their bottom three choices of the list of
ten cars:
”Middle” = other respondents.
n = 250 respondents.
Source: Ford France.
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Exhibit 2
Perceptual Maps1
a) Ford Ka ‘Choosers’
Futuristic
1.5
Fiat500 Twingo
Ka
0.5 Micra
Youthful
Outdated
Corsa
P106
-0.5 Tigra
Fiesta
Rav4
Polo
-1.5
-2.5 -1.5 -0.5 0.5 1.5 2.5
Ugly
b) Ford Ka ‘Non-Choosers’
Flimsy
1.5
Fiat500
Ka
Micra
0.5
Youthful
Outdated
Fiesta
Corsa Twingo
-0.5 Tigra
P106 Rav4
Polo
-1.5
-2.5 -1.5 -0.5 0.5 1.5 2.5
Safe
1
Perceptual maps are based on Euclidean distance model from multidimensional scaling.
Source: Ford France.
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Exhibit 3
Reactions to the Ford Ka by Attitude Segment1
60%
50% 78 75 65 32
40%
Respondents
30%
20%
10%
0%
Attention Sensible No Nonsense Freedom
Seekers Classics Neutrals Lovers
Ka Choosers Middle Ka Non-Choosers
1
Numbers in boxes indicate the number of respondents assigned to the respective segment.
Source: Ford France.
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Exhibit 4
Demographic Characteristics of Attitude Segments1
a) ‘Gender’ Cross-Tabulation
Attitude Segment
Attention Sensible No Nonsense Freedom Total
Gender* Seekers Classics Neutrals Lovers
Male 59.0%** 57.3% 38.5% 50.0% 52.0%
**
Female 41.0% 42.7% 61.5% 50.0% 48.0%
Total 31.2% 30.0% 26.0% 12.8% 100.0%
*
The effect of Gender is marginally significant (p < 0.1).
**
To be read as “59.0% of those who were categorized as ‘Attention Seekers’ were male
and 41.0% were female.”
b) ‘Age’ Cross-Tabulation
Attitude Segment
Attention Sensible No Nonsense Freedom Total
Age* Seekers Classics Neutrals Lovers
≤ 24 7.7% 10.7% 9.2% 12.5% 9.6%
25 – 29 19.2% 17.3% 12.3% 21.9% 17.2%
30 – 34 14.1% 24.0% 21.5% 12.5% 18.8%
35 – 39 17.9% 13.3% 4.6% 12.5% 12.4%
40 – 44 20.5% 20.0% 33.8% 31.3% 25.2%
≥ 45 20.5% 14.7% 18.5% 9.4% 16.8%
*
The effect of Age is not significant.
c) ‘Marital Status’ Cross-Tabulation
Attitude Segment
Attention Sensible No Nonsense Freedom Total
Marital Status* Seekers Classics Neutrals Lovers
Married 53.8% 46.7% 50.8% 53.1% 50.8%
Living Together 10.3% 14.7% 9.2% 9.4% 11.2%
Single 35.9% 38.7% 40.0% 37.5% 38.0%
*
The effect of Marital Status is not significant.
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Exhibit 4 (Cont’d)
d) ‘Children in Household’ Cross-Tabulation
Attitude Segment
Number of Attention Sensible No Nonsense Freedom Total
Children* Seekers Classics Neutrals Lovers
0 60.3% 62.7% 58.5% 50.0% 59.2%
1 23.1% 18.7% 12.3% 25.0% 19.2%
≥2 16.7% 18.7% 29.2% 25.0% 21.6%
*
The effect of Number of Children is not significant.
e) ‘First Car Purchase’ Cross-Tabulation
Attitude Segment
First Car Attention Sensible No Nonsense Freedom Total
Purchase* Seekers Classics Neutrals Lovers
Yes 12.8% 18.7% 13.8% 12.5% 14.8%
No 87.2% 81.3% 86.2% 87.5% 85.2%
*
The effect of First Car Purchase is not significant.
f) ‘Income’ Cross-Tabulation
Attitude Segment
Household Attention Sensible No Nonsense Freedom Total
Income (FF)* Seekers Classics Neutrals Lovers
< 100K 6.4% 8.0% 10.8% 15.6% 9.2%
100K – 150K 19.2% 12.0% 23.1% 21.9% 18.4%
150K – 200K 16.7% 18.7% 24.6% 9.4% 18.4%
200K – 250K 20.5% 17.3% 18.5% 15.6% 18.4%
250K- 300K 23.1% 24.0% 15.4% 15.6% 20.4%
> 300K 14.1% 20.0% 7.7% 21.9% 15.2%
*
The effect of Household Income is not significant.
Source: Ford France.
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