Riding the wave

Ford’s David Mondragon and Dean Stoneley prep for record launch slate with sexy new models and global thinking.

For the first time in its Canadian history, Ford is on top. In April the automaker reported a 29.2% sales increase compared to Q1 2008, led by strong Taurus and F-150 sales. The 16 consecutive months of share increases Ford has enjoyed can be described as evidence of a groundswell of support for the original car company, a wave that the marketing team under VP marketing Dean Stoneley has been eager to communicate. Inspired by consumer feedback, branding campaign “Groundswell” introduces the new Ford of Canada as a technologically advanced, dare we say sexy car company, expressed with confidence and, yes, a hint of acknowledged surprise.
This year Ford will bring eight vehicles to market – more than any other automaker. Canadian president and CEO David Mondragon, who’s been at the helm for a year and a half, is going after the Canadian compact and sub-compact car markets, launching the 2011 Fiesta this month and the 2012 Focus later this year, a response to the demand for more fuel-efficient models already enjoying success in Europe and Asia and further differentiating the company from its beleaguered counterparts in Detroit and Japan.
For the Quebec auto show, Salon de l’auto de Quebec, this year, Ford left its best-selling trucks at home, presenting a lineup of smaller, sleeker vehicles that also includes the Taurus and the Fusion Hybrid. The democratic EcoBoost technology, which improves fuel economy by up to 20%, will be standard on half a million Ford, Lincoln and Mercury vehicles annually in North America during the next five years.
The Focus will be the first car launched under the One Ford global strategy – a single car for the world, brought simultaneously to all markets and with similarly collaborative marketing support.     
Strategy sat down with Mondragon and Stoneley to find out how they’ve gotten this far, and what’s coming next.

Group VP global marketing Jim Farley admitted recently that Ford had been losing market share for 14 straight years prior to 2008. Then in 2009 you reported a $1 billion US profit. That’s quite a turnaround. How did you do it?

Mondragon: In Canada, we were on a 10-year share decline, basically building vehicles that weren’t relevant in the Canadian market. Where the company really turned the tide of history was when we, driven by the CEO of Ford Motor Company (FMC) Alan Mulally, broke down the country barriers and defined FMC as a global company, not a regional company. He resculpted the landscape at Ford. We now see ourselves as a global enterprise, leveraging the best resources in every market across the world.
So in Canada, we’re bringing to market new vehicles that we might not have had the opportunity to before, vehicles that are truly relevant for the Canadian consumer. Not only will they be smaller and more fuel-efficient, but they will have world-class technology, quality and safety ratings.
Alan got funding in place for us to do the most difficult thing in a recessionary period, and that’s invest in your future. One of the key differences between Ford Motor Company and a lot of our competitors is that we invested very heavily over the past three years during the downturn in new product. That product was developed first and foremost by listening: hearing what consumers want, what they need and what they value in the marketplace.
If you look at turning points in the company, number one was leveraging global assets, producing vehicles that are more common in terms of their makeup worldwide. The new Focus that we start building at the end of the year, will have 80% commonality across the world. The new Fiesta will have 60% commonality. That not only gets us greater economies of scale, but it allows us to share technology to consumers across a wide spectrum of price [points].

How much share gain can you attribute to the fact that you maintained marketing spending levels through 2008 and 2009?

Dean Stoneley: We looked at the recession as an opportunity to show consumers that the reality was very different than the perception. We had this relentless focus on quality, on new products. All of the third-party rating agencies were recognizing Ford as the best in the industry. But consumers didn’t know that, and during the recession we had an opportunity to tell that story; we were able to grab hold of a larger share of voice [and] break through to consumers. We were able to leverage PR, which was very strong through last year and continues to be this year.
Also, it forced us, quite frankly, to focus our marketing efforts, because marketing is always on that fine line between an expense and an investment. In order to make it an investment during a time when budgets are being looked at very closely, it forced us to laser-focus on what we were going to do. So we probably did less; we took a wide strategy and zeroed in and spent the same money as planned – we didn’t pull back in investment, but everything became more focused on selling vehicles and changing perceptions.

How does “Groundswell” communicate this new confidence? How is the concept unique to Canada?

Stoneley: Everything in “Groundswell” really ladders up to our four pillars of quality, green, safe and smart, and that’s consistent with what’s being done elsewhere, such as the U.S.
The creative execution [by 23-year AOR Y&R Toronto] was unique to Canada, and the reason it was called “Groundswell” was no accident. We’d been doing a lot of consumer research, and as we told consumers about our quality, safety and technology, we saw this complete change in them, in terms of “Wow! I had no idea.” So we wanted to capture that. At the same time we were watching what was happening from a PR point of view in the market through the blogs where, as some of our competitors were taking government assistance or declaring bankruptcy and we were going our own path, there was this groundswell of support around Ford. People started paying attention, and there was this receptivity that maybe hadn’t been there before. People wanted to know, “Why is this company different, why are they having success?”
The genesis of the campaign was, how do we take that and relay that back to a larger audience? We purposely cast [real] people to tell that story; we wanted it to come from many voices. We didn’t want this to be Ford standing behind a podium.
Mondragon: If you think about the number one resource for any brand with regards to recommending their product, it’s a personal referral. So “Groundswell” has allowed Ford to unleash an army of ambassadors in the marketplace that are our customers. This new approach to marketing is unique for us, it’s not a traditional feature-benefit type of advertising message; it’s letting consumers tell the story.

Are you trying to broaden the appeal to demos such as first-time buyers, or put new emphasis on multicultural groups?

Stoneley: The ads are meant to connect with a broad range of consumers. In Quebec, for instance, we did completely separate casting, and the ads there have tested very well. We did cast specifically to create people that [consumers] would connect with, not your usual “commercial actor,” but people who were very real and authentic, so we did get a very broad range of ages and ethnicities, and I think it adds texture to the ads.

Dean, you said previously you were trying to see what Facebook would look like if you put it on television.

Stoneley: We really wanted to capture that essence. It was important that it came from consumers, because we talk in these ads about how our quality is on par with Honda and Toyota, which was different for us. When we did focus-group research and told customers that our quality was that good, they said to us, “If your quality is as good as Honda and Toyota, you should tell people that.” And that inspired us to do exactly that. So when I say “put Facebook on TV,” I would say, “and in print and in the digital space,” because we use that same execution of different voices.
Mondragon: The ads create a sense of believability and clarity for consumers. It’s positioning the company in a much different way than ever before. It doesn’t feel to consumers like we’re trying to sell anything, because we’re not, we’re trying to tell the Ford story. What happened when Ford didn’t take government loans is that we got on the conversation list at the dinner table, so consumers were willing to listen to something different from Ford, and this type of messaging allowed us to cut through the clutter.

What kind of research are you doing to listen to consumers, and have you made a significantly greater investment in research tools?

Stoneley: We’ve always invested quite significantly in research, so I would say we haven’t pulled back, it’s probably about the same, but we do everything from positioning research, ad tracking, purchase-funnel research in terms of brand opinions, brand awareness. I think it comes back to, again, as you go through a recession, when you’re in a fog, you fly by the instruments, and research has been a great resource for us to refine
our messaging.

How quickly are you responding?

Stoneley: Very quickly. The challenge is in the execution, and it depends on the medium. Digitally we can respond very quickly, TV by its nature tends to have long lead times. But getting the info is no longer the issue; the issue is trying to drink from a fire hose. You’ve got so much; how quickly can you knock that down and create strategies around it?
Mondragon: There are three levels of execution for us. There’s a corporate level that we can respond to maybe a little more nimbly. There’s also a tier two level, which is a market-area level throughout Canada; different regions of the country act differently and have different types of advertising elements. There’s a tier three level, which is what we call the dealership level; we have 500 dealership outlets in Canada when you add the full-blown dealerships and branches. So if we see a change or a shift and we embark on a new plan or strategy, we’ve got to make sure that all three tiers of our marketing message are aligned, so it takes a little longer to get that in place.

What room for growth is there for Ford in the Quebec market?

Mondragon: Great question. If you look at the marketplace in Canada, our share is 15%. In Quebec and Vancouver, our share is only 10%. Now that share is up two full points in the last two years in those markets, so good growth, but still not anywhere near the potential of the marketplace and the reason why is we’ve been a niche player at best with our vehicle lineup.
As we bring to market the B car (Fiesta) and the C car (Focus) in four- and five-door models, we will have a new position in those marketplaces; we’ll be a stronger competitor and much more relevant to the consumer. We’re also looking at those marketplaces to expand our footprint. We plan to add dealership outlets in a time when the
industry is contracting.

Ford globally has allocated one of every four dollars to digital. How are you rethinking media planning in Canada, and what percentage of the budget here is going online? Is it increasing?

Stoneley: It is. We’ve been shifting our budget into the online space the last three years, and quite significantly. We’re starting to lay out plans and invest more in social media. We’ve made investments into Ford.ca, to make it much easier for consumers to navigate, even right down to the transactional ability to shop for a vehicle: consumers can go in, they can request a quote, they can spec a vehicle exactly how they want and request a quote from dealers. Our dealers all have a mobile leads application now that works on their BlackBerrys, and we have a very high response rate where dealers will respond within 15 minutes to quote them a price, talk about features, have them come in for a test drive. So we’re really investing in the digital space.
This isn’t new for you; you’ve been leveraging Web 2.0 technologies for several years.
Stoneley: Yes, we were the first company to put Yahoo! Answers right within our site and we still have that today, so you can get Yahoo! ratings on any one of our vehicles. It’s full transparency: whatever customers say about one of our vehicles or however they rate it, it’s right on our website.
Mondragon: The challenge is the fragmentation of media channels. Social media is taking it to a new level. So it’s going to take more investment, because that’s where our consumers are, and especially as we embark on this new era of letting the consumer be the ambassador for our brand, you’ve got to tap into the bloggers, you’ve got to tap into people on Facebook and MySpace.
I think the long-term question will be the viability of traditional TV advertising. As you see technology evolve and DVRs starting to be smarter, giving people the ability to zap commercials, you’ve got to get to a new level of integration with your product. American Idol is a good example where we don’t run traditional commercials [but rather] we integrate our product into the show. I think you’ll see brands like ours making a lot more investment in the future in that integrated space.

Speaking of social media, “Fiesta Movement” got a lot of coverage in the U.S. [The campaign invited 100 twentysomethings to live with the car and then share their experiences online.] Anything similar planned for Canada?

Stoneley: In respect to Fiesta, we did get good spillover from “Fiesta Movement,” especially at the launch of it, when they were recruiting the Fiesta agents, and that’s where there’s a real opportunity for us to start behaving like a global company. Frankly, it doesn’t make sense to try to replicate it in Canada, because there really is no border.     Now, we did do a “Follow the Fiesta” program in Canada, so we had a website combined with events in major cities across the country, and the response we got from that was huge: 103,000 people to date have opted in and want more info on Fiesta. The awareness and the hype around this car, so far ahead of its actual launch date, is the highest we’ve seen of any vehicle, so we’ve made some great progress.

Tell us about the One Ford program and how that will apply to marketing in Canada.

Mondragon: It’s not anything that is here today and gone tomorrow. It’s more of a philosophy now, it’s very well inbred, it’s worldwide. It’s first about aggressively restructuring the company, which we have done, and we’ve shown that we can be profitable with industry levels that are far less than where they have been traditionally.
And the other part about our One Plan philosophy was to accelerate the development of new products that customers want, and that’s what you’re seeing in Canada and worldwide as we bring vehicles to market that are not only commonized across the world but have greater value and affordability.
If you look at our share of the industry in Canada, we’ve gone from 12% in 2008 to 15% last year, and this year we’re already running at about 15.5%. A point of [share] in Canada is worth 15,000 units at retail, so these are substantial moves. In an industry like the auto industry, you usually claw and fight for a tenth of a share, so these were substantial moves, based on the strength of our product line across the country.

How is that applying to marketing?

Stoneley: In the past, we’ve been a real regional company. And the world has changed, consumer expectations have changed, now people know what small cars we sell in the U.K. or Spain or Asia, and so the idea of having these regional programs no longer makes sense. As we start introducing global vehicles, the next-generation Focus will be the exact same car, whether you’re in Japan or Europe or Canada, so in terms of marketing we’ve embraced the same philosophy, which is no longer acting just as a regional company but acting as a global company.
Mondragon: I would add that from a strategic standpoint and a marketing standpoint. We can get a higher value creative that we can bring to market at a lower cost, and it really lets us focus our attention on executional plans here. We’re very dependent on our dealer partners to execute our plans, and we just finished a three-week tour across the country, meeting with dealers and synching up our plans – where are we at, where are we going and how are we going to get there – so we’re all in unison as we move our business forward.

What room does that leave for Canadian-only marketing?

Mondragon: I’m not saying that we wouldn’t have an in-country solution for our marketing and advertising. If you look at all our merchandising, we call it tier two activity, which is our retail activity, that’s all in-country, we develop it, plan it and execute it here. You can’t commonize that across countries, because there are different market conditions, and the competitive pressures in markets change greatly region by region. Now as you go up a level to tier one, we are able to leverage some of the photography, some of the shooting, but it doesn’t mean that we’re just taking a vanilla approach to national advertising campaigns, and I think “Groundswell” is evidence of the fact that that’s not what we do.

How is the Canadian marketing team with your agency contributing to this global structure?

Stoneley: We’re already planning our advertising and communications for these global products. For the next-generation Focus, which will be a global launch, our team here was involved in brainstorming and hothouse sessions, along with teams from the U.K., Stockholm and the U.S. That was held in Toronto, so all of those global teams locked themselves into a facility for a week and worked together.
Mondragon: The nice thing is that countries across the world are talking. We’re going to leverage some work that’s done in the U.K. for Fiesta launch advertising. For Focus we’ll leverage the global advertising platform. So again, it goes back to greater economies of scale, but also to a level of work that we wouldn’t be able, quite frankly, to afford individually here in this market.
Stoneley: We’re not saying that for a launch of a global vehicle there’s going to be one TV ad for the whole world. There might be three or four vs. when there would have been 20 or 25. There are still some regional differences, and the key is that we’re consistent in terms of the brand: what does a brand like Ford Focus stand for globally? That brand may wear different clothes in one market vs. another, in terms of how we show that face to the market, but in its essence it’ll be consistent, and we haven’t always been there, so that’s a big opportunity.

You have eight new entries coming to Canada this year.

Mondragon: When you add it up, that’s a ton of new product to bring to market at any given time, anywhere in the world. It’s going to create a lot of challenges from a marketing and messaging standpoint, because we have to have a platform that we can feed all of these brand products and features and benefits into. I think our “Groundswell” and our “Groundswell 2.0,” where we’re going next, is going to be a good platform to build upon.

Can you tell us anything about that?

Stoneley: The opportunity for us is to get a little deeper with emotional connections. If we look at the last 18 months through the recession through our ad tracking, consumers behave differently; they get into a more rational space, and ads that are wonderfully creative but sort of obtuse don’t tend to score well in that environment. As the economy is coming back, I think there’s an opportunity for us to turn that dial.
Mondragon: This is where Ford is really going to differentiate itself in the marketplace. If you look at the vehicles we’re bringing to market, they’re small cars: Fiesta’s a B car, Focus is a C car, and we have a great preponderance of vehicles coming to market in the B and C classifications.
If you look at a lot of vehicles in that space, they’re very utilitarian, they’re bland. It’s almost a generic population of vehicles, no matter if you’re looking at Toyotas or Hondas or GMs or Chryslers. The opportunity we have is to expand on this emotional presence in the marketplace with our new vehicles. They’re kinetically designed. When you look at our Fiesta, when you look at our Focus, it makes your heart pump, it’s exciting – we have some sex appeal back in our vehicle lineup. This whole new direction with “Groundswell 2.0” is going to let us tap into a space we haven’t lived in before.

Who are you trying to reach?

Mondragon: We’re trying to reach everyone. Who doesn’t have emotional appeal? You want to have an emotional connection with your vehicle. It’s an extension of who you are, so we really need to foster that relationship with our vehicles and our customer, and that’s another way you really can ensure long-term loyalty to the brand.
We have that connection in a different way with our truck buyers and Ford is known as the greatest truck company in the world, but what we want to be known for going forward, and our biggest challenge, is to be known as the greatest car company in the world. The vehicles we bring to market are world class in terms of quality, safety, technology and fuel economy. The Fusion is a great example, now in its fourth year, it’s the number one seller. It outsells Camry; it outsells Accord, perennial leaders in the marketplace. We’ve got the product; we’ve got the lineup that can challenge the market space.

Are you investing more heavily in test-drive programs and auto show events here in Canada?

Mondragon: Yes and yes. The auto shows are a very unique opportunity. What other industry do you have where people actually pay to come and look at your product? So the auto shows to me are the greatest venue for us as a manufacturer to make positive and long-lasting impressions with consumers, and let them browse, let them research, let them find new products in a free, open environment that is stress-free. It’s a space that we are definitely investing more and more in over time.
Stoneley: In our Montreal show and our Toronto show, we had a car boutique concept this year, which was kind of a show within a show. We really wanted to signal a change in the market.
Test drive programs is another thing we strongly believe in. We all know that schools are often underfunded in their efforts to support sports teams and other extracurricular activities. Many of our dealers across Canada are working with their local high school on a Drive One 4 UR School event – where each test-drive of a Ford or Lincoln vehicle will result in a donation. Our Ford and Lincoln dealers are an integral part of their communities. This program is yet another way they connect, while getting consumers behind the wheel to experience our vehicles.

And what about your electric car coming next year?

Mondragon: We are developing an electric vehicle with Magna; they’ve got a long history in that technology. But we’re also developing more hybrids, and we’ve got hydrogen vehicles on the road; I think we have 20 Escape plug-in vehicles on the road in the U.S. We have a wide range of sustainable vehicles in our lineup today, and we’re testing all that technology as we go forward.
Short term, we’ve doubled our hybrid production this year over last year; we have another hybrid coming to market this year, the Lincoln MKZ. The next evolution is obviously electric vehicles, and there’s a lot of work that has to happen in terms of bringing that sustainable offering to market. One of the biggest things is developing infrastructure across the country, if not the world.

David, you’ve been here for 18 months now. What’s your greatest achievement thus far?

Mondragon: I am proud of the continuity that we have with our team internally and with our dealers. That level of communication and the fact that we are synched up at all times in terms of our plans and our executional strategy has allowed us to make great gains in the marketplace. We’ve got our One Ford plan, and we’re all moving down the road together.

What do you hope to achieve next?
Mondragon: We are number one today, and it’s the first time in our history we’ve been number one, so that’s a big accomplishment, but it’s not our goal. Our goal is a sustainable, viable, profitable future for Ford, our employees and our dealers. So while leadership races are nice, our goal is clearly not to be number one but to have our sales growth and our sales plans be sustainable and for us to be profitable long term.

I can hardly believe I’m talking to a car company.
Mondragon: Well, a lot has changed over the last decade, and the reality is that if that’s not the number one focus for an automotive manufacturer then you might not be around for another 100 years. We’ve got a 100-year history in Canada, and we plan to be around for another 100.