Edsel Case Study Part 1: A ‘star’ is born

What does the writer mean by 'market segmentation' and how does this relate to Ford and the Edsel? Definition Which market segments does the case study talk about? How were these segments relevant to Ford? Market segmentation refers to the division of a market into customers who have similar wants or needs. Ford identified that most of the cars they sold were to families in lower income groups. They wished to create a product which existing Ford customers could identify with a higher income group as their wealth increased.

How would you describe Ford's research? What type of market research did Ford conduct? What format did this take? What sort of data was collected? Ford conducted primary research. They had access to quantitative data relating to sales and customer profile (or demographic) and carried out a survey of 800 people to collect qualitative data.

What possible problems can you identify in Ford's market research? Data bias? Sample size? Relevance? Attitude? Although Ford’s quantitative data was probably relevant, qualitative data from potential customers was limited to the 800 people surveyed. Given the size and diversity of the USA, this sample may not have been representative unless Ford used quota sampling. Data bias seems very likely. The breadth of questions asked may indicate a lack of relevance – it is not clear how a choice of cocktail might relate to a car purchase. Ford also demonstrated that they would ignore research if they did not agree with its conclusions.

How was product design influenced by market segmentation? Physical appearance (product differentiation)? Product development (new gadgets)? The Edsel needed to appear quite different in appearance from other Ford cars, and reflect the appearance of cars such as the Buick, so that its status could be easily identified. The front grille is the most apparent feature of cars in the higher priced group. Many of the technological innovations were related to ‘simplicity’ or ‘ease’ that might be associated with the lifestyle of a wealthier group of customers.

Discuss how well Ford applied marketing strategy during this period. Corporate objectives and marketing objectives Change Objectivity Ford’s corporate strategy of increasing productions by expanding into higher price bands clearly led their marketing objectives. Their strategy involved penetration pricing and product differentiation in an attempt to achieve a significant market share of a new market segment. However, corporate politics appears to have over-ridden objectivity and there is no evidence to suggest that plans were being reviewed in light of economic or social change.