Before conducting a market research study, many organizations have a preconceived notion of how the results will turn out. However, in most cases, market research presents feedback and insights that are unexpected.
Market research often provides unexpected insights. That's why good market research works - even when you think it doesn't. Our market research company shares an example from Ford to explain this exact sentiment.
Below, our market research company shares an example from Ford to explain this exact sentiment.
Here is the Story of the Ford Edsel
In the mid-1950s, the Ford Motor Company used the power of market research to produce a vehicle tailored to fit the desires of middle-class Americans.
To excite the public, Ford created a year-long ad campaign leading up to the release of the “car of the future,” the notorious Ford Edsel.
However, when consumers participated in a 10 year-long market research study that fueled the idea for the new dream car, the customers didn’t grasp the full concept of the vehicle, and as a result, it’s one of the ugliest poor-quality cars in automobile history.
💡💡 Fun fact: The Ford Edsel was named after Henry Ford's only child, Edsel Ford.
What Happened?
Over a span of 10 years, Ford spent a total of $250 million on developing the Edsel, which was supposed to revolutionize the automobile industry.
The “car of the future” had 18 different versions, it was marketed to match each owner’s personality, but unfortunately, Ford’s fantasy never came to fruition. In reality, this brand of car was overpriced; it underperformed and disappointed the masses, and I’ll tell you why.
There are two main questions to consider:
- Did Ford have the right idea?
- Why did Ford have the wrong approach?
Market research was still in the infancy phase during the time of the Edsel and provided the automotive company with inaccurate insights.
Ford had the right idea by incorporating focus groups, in-depth interviews, and introducing motivational research into perfecting the best car for the consumer. Still, the timing of the product was off, and the data did not match reality.
The researchers wanted to understand the consumer’s motivations to uncover answers to questions such as:
- What drives a person to buy a specific car?
- Why do customers choose one brand of vehicle over another?
- Why does the consumer purchase an automobile in the medium-price field?
- Why do individuals spend more capital on premium cars?
The automaker company was expected to sell over 200,000 Edsels in the first year on the market.
Ford sold less than half, and by 1959, it lost approximately $350 million on the infamous car, which prompted Ford to discontinue production and start from square one.
Even though the Edsel was an epic failure, Ford and other brands have a lot to learn from this experience.
What Went Wrong?
Wrong place, wrong time, wrong market.
Timing is everything! In the summer of 1957, after the release of the Edsel, the stock market plummeted, and Americans stopped by mid-priced vehicles and shifted their focus to surviving the economic crisis.
A year later, 1958 was declared the “worst year auto” since World War II; sales for automobiles continued to decline and so did the purchases for the Edsel.
During economic recessions, instead of buying gas-guzzling cars like the Ford Edsel, more people were purchasing cheaper, energy-efficient small-sized cars, such as the Volkswagen Beetle.
The market began to shift in the opposite direction of what the market researchers intended. This major shift in demand caused Ford to halt the Ford Edsel production indefinitely, but there is more to the story.
💡💡 Fun fact: Henry Ford’s son, the chairman of Ford Motor Company, Edsel Ford, strongly believed that the Volkswagen Beetle had no market in the U.S. Years later, he was proven wrong.
1. Low quality and poor performance
After years of researching the perfect car for Americans, Ford failed to add quality over quantity to the equation.
Ford’s intention was to push as many vehicles out as possible, despite the decrease in demand. Ford was ill-equip to live up to their own expectations.
When dealerships received the new car, it would often arrive with dissembled parts, and some parts would even be missing. This was because the Edsel didn’t have its own assembly unit at the Ford manufacturing plants and employees took little pride in building the vehicle.
Once the car was off the lot, many found that the Edsel had a multitude of maintenance problems. This prompted consumers to question Ford’s motives, and consumers refrained from purchasing the new Edsel.
2. Misguided research methodologies
In the 1950s, motivational research was gaining transition, and Ford used it to determine the Edsel’s personality to captivate consumers.
The research was also used to understand the consumers’ motivations and further predict their purchasing behavior.
Today, this type of research is often used for any significant product launch, but during the time of the Edsel, motivational research was not nearly as effective as it is today.
3. Flaws in the market research
The flaws in the market research include:
- At the time, motivational research wasn’t reliable enough to guide the decision-making of critical activities, such as product positioning.
- The research was biased, and the research team had preconceived outcomes that clouded their judgment before conducting the in-depth interviews.
- Two years before the product launch, the research offered insight into what the consumers wanted right at the time the research was conducted. However, the consumers’ needs shifted years after the data from the research was collected.
- The research focused on the car’s personality and style, but the style of the car was never revealed to the customers before the product was on the market. Knowing the car’s appearance would’ve been important because it would’ve gauged the customers’ impression of the vehicle.
- The goal was to market this car to middle-class American families, but once the car was released, the consumers did not understand who this car was for, and unfortunately, they could not find a use for it.
What Was Learned?
The future of the Ford Edsel was doomed from the start. With a tanking economy and an over-hyped marketing campaign fueled with misleading information, and outdated data, the Edsel was more of an American nightmare than the American dream.
Through this case study, many have learned that it is more important to rely on timely accurate research data than biased preconceived notions.
Fortunately, today, market research is more advanced than it was in the past. Therefore, using it to make important decisions is more effective and reliable than ever before.
💡💡 Fun fact: The story of the Ford Edsel is one of Bill Gates’s favorite case studies.
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