SECTION A [40 MARKS] Answer ALL the questions in this section. QUESTION 1 (40 Marks) Read the article below and answer ALL questions that follow. Ford SAs woes continue as it recalls more than 4500 Kuga SUVs in SA One death and 48 reported fires (Ford confirms 46). Eleven of those in the past month one of the hottest festive periods on record. Mechanically the issue appears to be simple: insufficient cooling to prevent material warping of the engines aluminium cylinder head, which cracks, leaking oil into a terrifyingly hot engine compartment, resulting predictably in fire. The issue is not new allegedly. Insurance companies supposedly have records of Kuga fires dating back to 2014. The Kugas affected are all the original 2012-2014 cars and specifically, the 1.6 Eco Boost derivatives, only. None of the revised Kugas, launched in 2014, have self-immolated, nor any of the 2012-2014 cars powered by engines other than the 1.6 turbocharged petrol. If Ford knew of this issue, its inaction is perverse corporate negligence. Or worse: wilful ignorance. Its a proud company. Ford. The only American auto brand not to be financially rescued and recapitalised by the Obama government after the 2008 financial crisis, the brands current global product portfolio is arguably superior to either of its American rivals: General Motors or Chrysler. Hence its success. The man who digitised the modern flight cockpit with Boeings 767, Alan Mulally, had done what only an engineer - and not an accountant - could, as CEO of an enormous automotive company. Mulally revitalised Ford, enabling record sales and robust profitability by investing in design and engineering, instead of foolish focus groups and flimsy marketing, during his tenure; which ended, ironically, in 2014. That Fords products have caused a fatality and flamed fear into their South Africa owners, will deeply grate his engineering ethic. Firstly and as a fundamental departure point, fire, in a car with recommended fluid levels and attached ancillaries, can never be user error. Fords official South African fire sample totals 46 vehicles from 4556 Kugas identified for recall. Thats negligibly less than 1% - and way too much. Would you fly in a plane that had a 1% operational service record of setting itself on fire? Quite. The notion of these fires being due to South Africas warm climate status is ridiculous. The Kugas not sold in America, where states such as Arizona, Nevada, New Mexico and Texas produce summer temperatures to rival and best our most scorching days, but it does retail in Australia. Which is similarly hot and dusty, to South Africa. To blame climate is unacceptable. Thats akin to a Comrades marathon contestant blaming their sub-par performance on heat, whilst hundreds of fellow competitors finish? Train harder. Be smarter. And this is the issue. The regrettably one. Unwrap the Comrades training metaphor and youll correctly deduce Im referring to R&D testing. And the automotive world, much like you and I, have become slaves to an absolute authority of the algorithm. Traditionally, teams of engineers spent years driving evolution mules (development prototypes) in the harshest environments, logging exhaustive hours at the helm. Abusing and cycling components until they failed in actual, compounding, road conditions. Not anymore. -II- 2 Like far too much of our modern lived experience, computer simulated endurance testing saves an immense amount of time, by substituting reality for artificial intelligence. And the shorter your R&D timetable is, with less physical costing (the logistics of moving and sustaining test teams the world over), the quicker a brand can access the market with new product. Its the consumer electronics model, and its terribly ill-suited when applied to something as complex as a car or aviation. Fords not the first company having marketed product given to conflagration. The most iconic of all automotive brands, Ferrari, recalled its 458 in 2010 after a few too many of these were destroyed by engine fires. Consider that these were multi-million Rand supercars, the absolute pinnacle of engineering, built by hand, in a factory which shares facilities with the most successful F1 team of all time. The cause - A special adhesive glue in the 458s wheel arches, which didnt react quite in the manner intended when exposed to heat from the rather cosy proximity of its 4.5-litre V8s exhaust. These are the calibre of issues that should be identified with endurance testing: 100 000km of actual distance logged some will say suffered - by test teams in extreme Arctic and desert environments. An accelerated computer modelled testing programme will not yield these faults. If Kugas are overheating in South Africa, and cracking cylinder heads, to my mind there can only be three causes. 1. Fords metallurgists have failed miserably in producing a quality aluminium cylinder head. 2. Or its electronic engineers have misunderstood their mechanical colleagues and incorrectly calibrated the engine control units, encumbering their ability to correctly gauge and react with fan speed and fluid flow to intense external temperatures. 3. Troublingly, the only other reason I can imagine, is that Kugas have been filled with substandard coolant, but these fluids are obsessively graded and validated, so to have such an unnatural distribution of failures is beyond the control factor of any statistical analysis. I fear its an instance of failed engineering, within either the cooling system circulation or its control module. This is brutally upsetting for a company which prides itself on that: engineering cars in the best possible manner, at a fair price. Fords options are limited and for Kuga customers I fear its not going to be a happy ownership experience. Residual values will plummet, so if you bought one on residual, in future youll know what its like to sell an Indian car if youre the first owner. The possibility of buy-backs or exchanges are slim, though in the case of an irreducibly life-threatening hazard such as fire, I cannot imagine this being a customer expectation too high. Truly. Corporate communication is being opaque, but this is the way of the trade. I doubt Ford knowns how, at this very moment, to fix the problem, a deduction not too generous in any scope of interpretation. If you noted the number of times Ford South Africa boss, Jeff Nemeth, mentioned the difficulty of harvesting data on the issue, due to most data (the engine) being destroyed in the fires, the double-speak was very much Orwellian for we dont know. Hes correct, the date source has melted. But its also his cars which are setting themselves on fire, and handsomely his problem, not his customers. Many years ago Toyota faced a fearsome customer revolt and government inquiry in the United States relating to a perceived safety issue with its cars, which had claimed lives. At the time, I thought it was unreasonable and that the issue was driver error. This was vindicated in time by a United States Department of Transport investigation. -II- 3 With Fords far too hot South African Kugas I feel quite differently. Your car incinerating you is an awful prospect. Ferrari owners wouldnt accept it. It cost Ferrari R4.5bn to correct the 458 issue. For those 4556 South African Kuga 1.6 Eco Boost owners, it should be no different, there can be no cost equation counterbalancing their right to safe mobility. They paid good money, expecting a great experience, perhaps on the advice of motoring journalists such as myself - who had judged the Kuga a quality vehicle. Source: http://www.wheels24.co.za 1.1 As a market researcher at Ford, develop a detailed research proposal to address the problems identified in the case study: (30 marks) a. Define the problem at Ford, the decision alternatives, and the research objectives b. Indicate most appropriate research approach o Data sources o Research approach o Research instrument o Sampling plan Sampling unit Sample size Sampling procedure c. Indicate how sample will be collected d. Indicate how the information collected will be analysed e. Present relevant findings f. Indicate decisions marketing managers need to make 1.2 Develop a PR Strategy to address the current situation Ford is facing. (10 marks) SECTION B [60 MARKS] Answer ANY THREE (3) questions in this section. QUESTION 2 (20 Marks) Upon your recent visit to Daruma (Restaurant) your waitress had a poor attitude and acted as though she was doing you a favour. She informed you that hot beverages could not be made as the kettle was broken, but as you looked around other waiters and waitresses were serving their patrons tea etc. When you asked your waitress to explain some of the dishes you were informed that the menu is self-explanatory. Propose to Daruma as to how the SERVQUAL framework can be used to improve service quality delivery. QUESTION 3 (20 Marks) Using McDonalds (Food Outlet) perform a Pestle analysis and assess the factors McDonalds should consider prior to making business decisions. (Illustrate your response in a table format.) -II- 4 QUESTION 4 (20 Marks) Indicate how Pizza Hut (Pizzeria) can implement the Porters value chain model to deliver value to their customers. QUESTION 5 (20 Marks) Discuss how Netflix (Entertainment company specialising in streaming media and video on- demand online and DVD by mail. It has also expanded into film and television production as well as online distribution) can maximise their customers lifetime value.