Edmunds' Analysis: Ford Lags in Shopping Consideration
April 18, 2007

If you watched American Idol this week, you might have seen two new ads for the Ford Edge. The commercials were directed by Pulitzer Prize winning writer/director David Mamet.

Using Mamet’s signature for dark imagery and fast-paced dialogue, the spots feature two men sitting, each in a Ford Edge. Talking out their windows, they boast the Edge is quieter than a Lexus RX 350 and quicker than a BMW X5.

The ads -- Mamet's first -- are Ford’s latest attempt to draw attention to its vehicles and convince consumers to put Ford vehicles on their shopping lists.

An analysis of March shopping consideration trends by Edmunds.com’s AutoObserver shows Ford has much room for improvement in that regard.

Ford's newest models, including the Edge and Fusion, run midpack among vehicles considered by shoppers within their segments. Ford’s Mustang and F-150 pickup top their segments for shopper consideration. But Lincoln and Mercury vehicles barely generate a blip on shopper radar screens.

Ford’s Strongest Suit: Mustang, F-150

Let’s start with the good news.

Shopper consideration for the iconic Mustang and F-Series pickup truck are Ford’s strongest suits. (Shopper consideration is expressed as a percentage of visitors to that specific model on Edmunds.com of the total number of visitors to that vehicle segment.)

The Mustang was the No. 1 shopped vehicle in the sports car category in March –- and Ford’s only model in a No. 1 spot. Of sports car shoppers, 14.4 percent considered the Mustang. Ford’s only other vehicle on the list of 30 sports cars –- the Shelby GT500 –- was 10th.

The Chevrolet Corvette, with 11.7 percent, followed the Mustang. The Mazda MX-5 Miata, Nissan 350Z, Porsche 911, Pontiac Solstice, Saturn Sky, BMW Z4 and Mazda RX-8, all of which had consideration percentages in the single digits, rounded out the top 10 list.

The F-150, the nation’s best-selling vehicle for three decades, ranked 3rd among large trucks considered by shoppers. The F-250/F-350 models took 5th place.

The ranking among the top three large trucks considered by shoppers was a tight race: No. 1 Toyota Tundra, 24 percent; No. 2 Chevrolet Silverado, 22.4 percent; and No. 3 Ford F-150, 20.2 percent. The remaining eight entries had less than 11 percent consideration rates.

New Models: Middle of the Pack

Ford claims its “Fusion Challenge” ad campaign drove Fusion sales to their record level in March, up 48 percent from a year ago. The Fusion Challenge ads focus on two consumer events held with subscribers of Car and Driver and Road & Track. In those events, subscribers test-drove the Fusion and its competitors. They, of course, conclude the Fusion V6 all-wheel drive is better than the Honda Accord and Toyota Camry V6 models in “styling, “handling” and is “fun to drive.”

Still, the Fusion’s shopping consideration doesn’t come close to that of the Accord, Camry or Nissan Altima, for that matter. In the midsize/large car category, the Fusion ranked No. 9 for consideration among the 35 cars in the segment. The Fusion was considered by 4.7 percent of the segment’s visitors. That put the Fusion in the middle of the crowded midpack.

Meantime, the Honda Accord, Toyota Camry and Nissan Altima ranked one, two and three, respectively, with double-digit consideration percentages; the Accord was considered by 17.3 percent of segment shoppers.

Much farther down the list were the Ford Five Hundred (to be renamed the Taurus for 2008) and Mercury Milan (the sibling of the Fusion), at No. 23 and No. 24, respectively. Their consideration percentages were a scant 2.0 percent and 1.8 percent, respectively. Even lower were the Mercury Montego (to be renamed the Sable for 2008) at No. 29, the Mercury Grand Marquis at No. 33 and the Ford Crown Victoria at No. 34. All three had less than 1 percent consideration, which ranked them just above the dead-last Kia Amanti.

As for small cars, the newly freshened Ford Focus received  the most shopper consideration of any domestic small car. The Focus came in a No. 9 among the 29 cars. No small car came close to rivaling the No. 1 Honda Civic. Of small-car shoppers, 22.5 percent considered the Civic. The Focus had 4.8 percent shopping consideration.

With gas prices soaring and consumers believing they will continue at high levels, small cars are gaining more consumer attention and more sales. That magnifies a glaring issue Ford is stuck with for a couple years: it has only one entry in the small-car category, that being the Focus.

At the same time, many Ford competitors, both big and small volume ones, have multiple small-car entries. Ford’s archrival, Toyota, has the Corolla, the Prius and the Yaris in the small-car segment, all of which are in the top 10 of shopper consideration for the segment. Smaller-volume Honda has two entries: the Civic and the Fit.

Ford boasts the Edge represents the automaker’s best launch of any recently introduced Ford, including the successful Fusion. Yet, it ranked No. 8 in consideration among the 15 crossovers in the category, putting it exactly in the middle of the pack with consideration of 9 percent of segment shoppers.

General Motors’ new crossovers led the segment. The Saturn Outlook ranked No. 1 and its sibling, the GMC Acadia, was No. 2, both with 17-plus percent consideration. Honda, Mazda and Toyota models were in the top 10. The only other Ford entry in the category, the Ford Freestyle, ranked No. 14, second to the bottom just ahead of the Buick Rendezvous, with 3.5 percent consideration.

SUVs: Mixed Bag

Ford’s forte has been in sport-utilities, a major generator of sales and profits. Indeed, the

Ford Explorer was the third most shopped midsize SUV in the category of 14 models. Of midsize SUV shoppers, 14.5 percent considered the Explorer. Only the No. 1 Toyota 4Runner with 23.4 percent and No. 2 Jeep Grand Cherokee, with 18 percent, surpassed the Explorer.

However, the Ford Explorer Sport Trac and the Explorer’s fraternal twin, the Mercury Mountaineer, were No. 11 and No. 12 with single-digit percentages.

Ford didn’t fare as well in the large SUV category. GM dominated the eight-model segment: the Chevrolet Tahoe was No. 1 with 46.7 percent of shoppers considering; the GMC Yukon was No. 2 and the Chevrolet Suburban was No. 5. Ford’s Expedition was No. 4, but the long-wheelbase Expedition EL was at the bottom of the list with only 3.8 percent consideration.

As for small SUVs, the Ford Escape was No. 7 on the list of 29 models. But with 6.4 percent consideration, it was in a very crowded midfield of the rankings. By comparison, the Honda CR-V was No. 1 with nearly 20 percent consideration, followed by the Toyota RAV4 with 13.3 percent consideration.

The Escape Hybrid was No. 18. The Mercury Mariner came in No. 14; the Mariner Hybrid was precisely last on the list.

Lincoln and Mercury: Weak Spots

Despite putting brand new products and substantial marketing resources into its flagship luxury brand, Lincoln models received little consideration by shoppers.

Lincoln’s newest models had the best showing of all Lincolns. In the luxury-car segment, the MKZ, formerly known as the Zephyr, ranked 14th among 45 models in consideration with 3.5 percent of segment shoppers considering it. The only other domestic make to surpass the MKZ was the Cadillac CTS in the No. 10 spot with 4.1 percent consideration. The Town Car came in at a distant 39 with 1.1 percent consideration.

Still, as is the case with a number of Ford vehicles, the MKZ was in a crowded middle of the pack. Consider the No. 1 shopped BMW 3 Series had 16.8 percent of the segment shoppers looking at it; the Infiniti G35 and Acura TL also had double-digit consideration numbers.

Turning to luxury SUVs, the new Lincoln MKX, which replaced the Aviator, ranked 15th in consideration with 4.9 percent. But compare that with the top three contenders: the No. 1 Acura MDX with 15.9 percent; the No. 2 BMW X5 with 11.3 percent; and the Lexus RX 350 with 11.2 percent.

Way down the list were the Lincoln Navigator at No. 22 with 2.4 percent consideration, the Mark LT at No. 28 and Navigator L at No. 29. Those models were only slightly ahead of the Hummer H2 SUT and Lexus RX 330, which has been replaced by the RX 350.

Calls for Ford to dump the Mercury would be justified based on shopping consideration rankings: the Mountaineer came in 12th among 14 midsize SUVs; the Mariner and its hybrid version ranked 14 and 29 (last) of 29 small SUVs; Mercury’s midsize Milan and large Montego and Grand Marquis, ranked 24, 29 and 33 among 35 midsize and large cars.

With shopping consideration numbers in the low single digits, the Mercury brand and its models hardly register with shoppers.

The Solution: Marketing and Product

To his credit, Ford CEO Alan Mulally, on the job since last fall, acknowledges his top priority is marketing that will convince shoppers to consider Ford products.

In interviews, Mulally admits Ford marketing needs help. “A very high priority for us is to really increase our marketing presence.... We've got great products. It's time to sell them," Mulally said in an interview recently with the Detroit Free Press.

While Mulally insists he stands behind his current North American marketing team, he could shake up the marketing ranks and he may, at last, fill a position for a global marketing director.

Current Ford marketing folks and Ford’s advertising agencies obviously are getting the message: they must do something –- and do something fast and different. Within the last few months, Ford has taken several actions on the advertising and marketing fronts:

* it launched the Mamet-directed advertisements, developed by its ad agency J. Walter Thompson, for the Ford Edge. Ford leveraged the massive audience for American Idol, for which Ford is the sole automotive sponsor, as the stage for the ads’ debut;

* it partnered with Mike Rowe, creator and star of the Discovery Channel’s Dirty Jobs to promote the Ford F-150’s advantages over its competitors, notably the Toyota Tundra;

* it expanded its Fusion Challenge ads;

* it is airing two spots for the Expedition that use humor to highlight the SUV’s easy-to-use, flexible seats.

In addition, Ford would do well to end its reputation of short-lived vehicles and short-lived vehicle names. Unless the dirt-low price is too good to pass up, shoppers won’t consider a vehicle that has no future. Resale values, a high priority with Ford these days, depend on a vehicle’s longevity. Ford would do well to name its vehicles, stick with those names and let consumers know they’ll be around for a while.

Ford’s list of blundering examples, hopefully from which it has learned, is long:

* The Zephyr name lasted only a year on Lincoln’s new sedan when it was traded in for MKZ;

* Ford had barely launched the Freestyle when the company  was said it was to be discontinued in a couple years, stalling sales and resale value. Now it is being named the Taurus X. But with two other crossovers, the Edge and the upcoming Flex (previously known as the Fairlane concept), its future is iffy;

* Ford renamed its minivans, seemingly for naught. Name changes didn’t disguise product inferiority and led to Ford dropping minivans altogether;

* And then there’s the controversial renaming of the Ford Five Hundred and Mercury Montego to the Ford Taurus and Mercury Sable. The validity of that move remains to be seen.

On the product front, Ford faces some challenges. Its new models are solid entries but aren’t head-and-shoulders above its competitors nor are they irresistibly unique, as the Flex promises it could be.

“The Edge is a solid competitor in the crossover segment, but not class leading or groundbreaking,” notes Edmunds.com analyst Alex Rosten. “Similarly, the Ford Fusion was comparable to the previous-generation Camry and current Accord, but the new Camry blows it out of the water, and the new Accord looks to do the same.”

Automotive enthusiasts have long complained Ford doesn’t have the same Focus in the U.S. as the highly successfully, and critically acclaimed one Ford sells in Europe. “Ford lacks an extremely competitive subcompact,” says Edmunds’ Rosten. “The recent freshening doesn’t put the Focus on par with the imports.”

What’s puzzling, adds Rosten, is why Ford doesn’t leverage its global resources in small cars in the way it does with the Mazda 6 and Fusion/Milan/MKZ, which share architecture.

“Ford has a great platform for compact cars. The C1 is used for the Volvo S40, the Mazda 3 and the European Focus. If Ford ever figures out how to use that platform for Ford-branded small cars sold in the U.S., it has a slam dunk,” says Rosten.

Rosten concludes: “With Ford’s damaged brand image, it must sell better vehicles for less money. It needs to offer innovative and marketable must-have features, such as Chrysler has done with the minivan Stow 'n Go seats, to differentiate itself from the competition.”

Then, maybe, Ford will be able to attract shoppers to its showrooms, the first step in making the sale.

Posted by Michelle Krebs at 7:33 AM under Analysis , Ford , News | Comments (4) | digg this | Seed Newsvine