The WRA Marketing Blog: Ford Motor Company’s marketing process

Between 1903 to 1908, Ford Motor Company founder Henry Ford and his engineers feverishly developed 19 different models of cars, in alphabetical order are named them as A to S. At the technical basis of these cars, the Ford Motor Company in October 1, 1908 launched the Model T; this kind of car made millions of Americans be fascinated to it. Before the Model T cars appeared to people’s eyes, the car factories are in manual production workshop-style. This mode of production makes the car very low yield, high cost. Early 20th century, the price of a car in the United States is about $ 4700, which is equivalent to the income of an average worker for several years. Henry Ford believed that the car market in order to be able to create huge profits into the market, we must change the cars’ price and make it be one kind of goods that ordinary people can afford, but in order to do this, low the price is the most significant key of it. Pipeline was originally used in the production of the Model T Henry Ford in 1913 at Ford's Highland Park factory first. At that time, other companies assemble the car needs more than 700 hours, while Ford needed only 12.5 hours. This makes the Model T Ford was pushed the market price into only $ 850, far below the market price. With the continuous improvement of the pipeline, ten years later, Ford's productivity increased to alarming levels: every 10 seconds to produce a car. At the same time, the market price of Ford's declining in 1910 dropped to $ 780, down to $ 690 in 1911, fell sharply in 1914 to $ 360, and finally down to $ 260. Ford's advanced production methods as it brings a great market advantage. In 1908, production of the Model T was 10,660, setting a record in the automotive industry; in 1915, Model T production reached 300,000, accounting for 70% to 80% of US total automobile output; to 1921, T - car production accounts for 56.6% of the world's total automobile output. Model T eventually yield more than 1500 million, Ford became the nation's largest car company. Model T to achieve great market success later, Henry Ford continue to improve production line, the potential for a single model of mass production to the extreme. By the mid-1920s, due to the surge in production, the US auto market has basically formed a buyer's market, road and traffic conditions have been greatly improved, although the Model T car are simple and cheap, it has been unable to meet consumer demand. Faced with the price advantage of Ford's cars, General Motors Corp turned to make a big fuss in the car's comfort, individuality and diversity, etc., in order to fight Ford, and they introduced a new car named Chevrolet. Then Chevrolet became very popular, and a serious impact on the market share of the Model T cars of Ford. However, faced with changes in the market, Ford still stubbornly adhered to the concept of production centers. He does not believe there are more economical than single species, high-volume, sophisticated division of labor, production lines, and more efficient production methods. He even willing to produce other colors other than black car, he declared: "No matter what color you need, Ford only have black".

Every time GM introduced a new product or a new model, the Ford always adhere to reduce prices to deal with. In 1926, Henry Ford made a last desperate effort; the Model T announced a sale. But this time, the price is no longer valid. Eventually, Ford had to admit defeat. In 1927, T car stopped production. Discontinued after the Model T, Ford faced product transition issues. However, for almost the last 30 years, Ford has produced only one model of this car, extremely difficult product transition, all of the equipment, technology can only be used for the production of the Model T. It is necessary under halted condition, spend a lot of money and time to fully update the equipment and technology. In 1927, Ford was forced to stop production, the recombinant production line, replace 15000 lathe, re-design and manufacture of machine tools 25000. By the time production of new models, Ford has dropped from the nation's largest car company a second. Rush new models to market, many of the components of the technology is not mature, coupled with the subsequent forced to replace the engine, Ford again had discontinued. General Motors Corp. and other competitors took the opportunity to seize the market. Until today, Ford was not able to regain its former status of the nation's largest car company.

Finally, the Model T outcome was embarrassing failure. In fact, Henry Ford interest in innovation has been to the old nor the recession, however, all his innovation hot Sui and capacity are reflected in the T-car, but rather the result can not accept any deviation from the "easy to use" the Features practices. This psychological feature is very common, especially those who have made remarkable achievements. Strengthening past success even solidify its successful model, making them overconfident and dedication, even ideological rigidity. Henry Ford can indeed be said to create a new era, but he also cannot stop the arrival of another new era.

------Zhenren Ruan