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Marketing Analysis of Ford's Edsel and Mustang

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Essay title: Marketing Analysis of Ford's Edsel and Mustang

Ford Motor Company brought Edsel on the market in the late 1950s. Although it took 10 years of careful planning, Edsel represents Ford’s major failure with a 200 million dollars loss for the company. However, 4 years after Ford discontinues Edsel, the company introduced Mustang, which recorded 1.1 billion profits one year after its market launch. In order to understand the causes for Ford’s both failure and success, we will explore the company’s marketing strategy and the external environments that affected the company.

After a failure to assess the market in the 1920s, Ford lost a huge market share against General Motors. This is due to many reasons, but mostly because of bad planning and research. The company also didn’t have many sorts of their product on the market; meanwhile, General Motors offered a fancier alternative, which appealed to the public. Ford’s consumers were not satisfied; as a matter of fact, only 26% stayed with Ford.

As it was mentioned, Edsel resulted from a 10 year planning. This planning included consumer research and market research, which brought the idea of a personalized car. Ford also better defined its target market. The company wanted to target young professionals and families with a product that would reflect the driver’s status. The result was Edsel.

Edsel sales were far from expected; Ford lost 100 million dollars on the original investment and another 100 million dollars on operating losses. A major cause is the economic depression after the stock market collapsed in 1957. This economic situation brought an imminent change in consumer preferences. Since Edsel was seen as a big car, middle-income oriented, people turned to Ford’s competition, which offered economy cars. Besides the economic environment, the political environment also added to Edsel’s failure: in 1957, the Automobile Manufacturers Association signed an agreement against advertising power and performance, or this is what Edsel was all about, power and performance. Furthermore, the social aspect was also hostile against powerful cars; negative articles and books regarding “power merchands” were frequent during that time.

Internal deficiencies were also present: first of all, Edsel wasn’t an attracting name for a car. Timing was also a problem; Ford took too much time to launch Edsel on the market. There is also a questioning about the validity of the company’s marketing research, and if the target market was best served. The product had problems consisting of styling- a vertical grille on the hood- and it also encountered quality problems because production was rushed in order for Edsel

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