This report provides failure analysis and lesson learned of a product of an automobile manufacturing company, called “Ford Edsel”. Method of analysis includes reasons behind the failure. Despite of big brand, why it turned up in to big fiasco and why it had to stop the manufacturing of “Edsel” within only 2 and half years. Ford took automobile’s one of the funniest pratfalls. Why? It was not that much bad car. But it suffered by company’s hyper-hype. Ford’s marketing strategy led the public to expect a very plutonium-powered wonder car; what they got was Mercury.
Research drawn attention to the fact that Edsel was introduced to fill the gap in market between Lincoln-mercury lines and Ford, where there wasn’t any gap and failed to do so with a loss of $250 million. It was a high priced car at the time of recession when people wanted to buy law priced car.
The report finds that company made many mistakes in terms of marketing, manufacturing and service after sell, which made negative impact on sell initially and then become reason for the death of Edsel. The report also finds that the market changed dramatically during the development process of Edsel.
It is recommended.
Rather than hunting for name of the product Ford should have concentrated to find right market.
A company, launching new product, should find what people want at what price range.
A company with well established marketing strength should capitalize it.
Quality matters a lot for a product like car.
This report will have glance into what actually happened with Edsel and how it could be avoided in future, thus giving an advantage to ABC limited for its product.
Introduction
The Edsel was introduced on 4th September 1957 by American motor company Ford. The name “Edsel” was decided in honor of company founder’s son “Edsel B. Ford”. The company started research and development of car in 1955 under name of “E-car”, which means experimental car [enotes.com]. Before launching of the car, the hype was created with add running, that pictured the car underscored with tag “Edsel is coming”. Also dealers had to keep car undercover as part marketing strategy. On the date of launching, record number of consumers flocked to dealership but went back without buying [Ervin]. Edsel provided many new features like “rolling dome” speedometer and push-button teletouch transmission and self adjusting breaks [enotes.com].
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It was expected to big success and car of century but unfortunately turned up in to a disaster. It was called as “the Titanic of automobiles” [Brand Failure]. It was introduced to fill the market gap between Mercury and ford, where there was not any gap. Because the price range for Mercury was from $2600 to $4400 and for Ford it was from $1900 to $3200, so there was not any gap [enotes.com]. Ford had projected 200000 of Edsel to be sold in US in the very first year of launching, but they could manage only 64000. That even felt in next year to 45000 [Trosclair] and then 19th November 1959, Edsel program had been ended. Within those years Edsel could manage only four models, citation and corsair which were based on the larger mercury plant and ford based ranger and pacer [enotes.com] for self survival.
Reasons behind failure of Edsel:-
Launching time:
The car was launched at wrong time and it went against the Edsel. Edsel was launched at time when US was passing through economic recession in late 1957. The car was introduced at time when market was trying to sell 1957 models at discounted prices [Trosclair].
When Ernest breech convinced the Ford management for medium priced market segment as it offered unexploited opportunity during early stage of development of the E-car in early 1950s [The auto editors], he was correct because it was sell of 2 million combined units by Pontiac, Dodge and Buick in 1955. But in 1957 during introduction of Edsel, due to the recession in US, market had dramatically changed towards small cars. And the market had focused on compact model cars. Except thunderbird and the Rambler, all cars had seen decrease in sell. In this situation instead of pushing law priced model pacer and ranger, Edsel put its luxury model citation and corsair in front [Ervin]. Also due to the recession people were buying more fuel efficient cars rather than high power car. And Edsel was a car with powerful engine and provided brisk acceleration, which required more fuel and in city condition they were providing very poor fuel economy. It can be imagine that how much, people wanted small car, as in 1960 ford sold 400,000 of small car Falcon [The auto editors].
Manufacturing
Ford launched Edsel as new division but there was not any manufacturing plant facility for Edsel and they relied on Ford division and Lincoln-Mercury division for production. As there was not any separate manufacturing plant, the other two divisions had little importance in success of Edsel. And also there was rumour in the Ford plant that they were intentionally forced to make Edsel. This can be easily seen as some cars were missing their parts even after reaching at dealers. And those people who bought an Edsel said that the car was plagued with trashy workmanship. Lots of the vehicles that screened up at the showroom had notes on them to the steering wheel written the parts not installed [Trosclair]. It was the biggest failure of Edsel that it didn’t have dedicated work force for its production [Tony].
Design and Infrastructure:-
People thought there was incredible, completely new is upcoming. But that was actually just one more 1958 car. It had additional gadgets and gizmos on it but it was nothing that lived up to the excitement. The car was such a power full that it can easily speed up to 70 miles / hour. But the hood ornament may fly off at that speed. The car was designed with many new features and in fact it had such amazing features like self adjusting breaks but among them many mechanics were not able to repair the new automatic transmission with center push button in the steering wheel frightened some drivers. Because of this after some months of launch people were going even more away from Edsel [Trosclair].
Brand matters:-
As Edsel was a part of Ford motor company, people were fond of to call it as “Ford Edsel”. But the word Ford was not appeared on the car anywhere on it. The company could not use well recognised and established marketing power of Ford. Instead of using already established dealers of Ford or Mercury, they made a new chain of dealers to sell Edsel [Ervin] and to increase the no of Ford’s dealers to 10000 [Haig].
Company’s internal politics:-
When wrong politics come in company, it can destroy good ideas. Same thing happened with Edsel. McNamara, who helped company to survive after war, had a sizeable power at ford and he became main part of this politics in company. McNamara wanted to consolidate Mercury & Lincoln and Edsel with the M-E-L division. He manoeuvred for elimination of the idea making Edsel’s inner body using inner body structure of Ford for 1959. He also convinced Ford’s management and Henry Ford Î to stop production of Edsel.
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Lack of Quality:-
Due to poor quality control and misunderstanding with company’s other model, there were mechanical damage in Edsel range. Workers assembling Mercury and Ford had to change all tools and part bins for extra Edsel even after their quota of regular hours had been finished. And it has been proved that desired quality of Edsel model was difficult to achieve in those plants.
Lesson learned from Edsel:-
Hyping an unproven product is a mistake – A spokesperson should never allow building up hype for untested, unproven, unseen product by company. It might possible that it make a negative impact on people’s mind expecting something distinct and don’t get that much different.
Right research is important – Ford wasted money and time for wrong market research. Instead of searching for name, they could have concentrated on finding that whether there was market or not. As it curved out, the market didn’t even exist where they spent millions. Researchers have to find the market in which the product is to be sold. Targeted marketing is very important. Research should be focused to customer-centric and not product-centric focused.
Importance of price and launching time – price should be according to the brand and the launching time. It can be too high or too law. Ford launched expensive product in recession time, when people wanted something lower priced.
Quality matters – when it comes to the car, quality is most important thing. In fact it is matter of survival. Good quality is always been ahead for success of any product, which Edsel didn’t have.
Appearance of product – look of the product is core factor, which makes a brand different from other brand. This can be seen in case of coca-cola, the bottle shape helped it to be a big brand. Edsel was not a good looking car and front view was so bad that some people called it toilet seat.
Manufacturing – If a new product like car is being launched by a big company to make as success of the decade or century, then it is better to build up it in its own manufacturing plant. Because if it is being produced in some other product’s plant then it might happen that those employee can’t use their skill for making other product. This can be turned in to bad quality of product.
References –
Brand Failure – The Ford Edsel, 2006, retrieved on 22nd march 2011 from, http://brandfailures.blogspot.com/2006/11/ford-edsel.html
Enotes.com, retrieved on 20th march 2011 from, http://www.enotes.com/topic/Edsel
Ervin Kathleen A., 2002, failure magazine – Edsel – an auto biography, retrieved on 21st march 2011 from, http://failuremag.com/index.php/feature/article/edsel_an_auto_biography/
Haig matt, 2003, Brand failure – the truth about the 100 biggest branding mistakes of all time, Kogan page limited, pg. 16-23
The Auto Editor of Consumer Guide, 2006, Encyclopedia of American Cars: A Comprehensive History of the American Automakers from 1930 to Today. Publications International Ltd. p. 374
Tony and Michele hamer, The Edsel – A Legacy of Failure, abpot.com guide, retrieved on 21st march 2011 from, http://classiccars.about.com/od/classiccarsaz/a/Edsel.htm
Trosclair Carroll 2007, suite101com – Ford’s Edsel Car -The Big Fin Failure of the 50s, retrieved on 20th march 2011 from, http://www.suite101.com/content/edsel-fords-fabulous-57-failure-a30989
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