Evaluation of Ford’s strategy in the small car market in France New Product Development. Approaches to New Product Development (NPD) can be divided into innovative strategies, and customer-responsive strategies. Innovative strategies results in a higher degree of (actual and often perceived) newness but involve higher R&D costs and risk. Customer-responsive strategies allow to cut development costs and time-to-launch; however, it might be difficult to achieve a differentiated position in a competitive market. Ford’s approach was that of a Reactor. It observed that it needed a new product to address new customer needs. However, instead of applying information on customer needs in the process of developing a new car, the customer perspective only emerged in the search of a target market. The customers’ opinion was polarized. Non-consideration of customer needs in the process of NPD results in a challenging positioning task. Physical products speak through their attributes to the customer – something that happens independent of positioning and advertising efforts. The success of positioning depends on how well the tangible attributes match with intangible benefits that the company wants its product to have. Ford attempted to create a car “that was out of the ordinary” for an “educated customer who is self-confident and rejects the commonplace”. Since customer research was conducted after product design the question is how Ford could know what the desired target customer wanted. The engineer might have had his thoughts about the realization but his ideas do not necessarily reflect those of future buyers. The highly successful Twingo might have been an influencing source in the development. The fact remains that the car was developed without a target customer in mind. That might be the reason why, despite its innovative styling attributes, Ford Ka could not alter consumer perceptions of what a small car can offer to the extent the Renault Twingo did. Cost saving and time pressure are viable arguments, but given the lifetime of a car – its facelifts included – it might have been profitable in the long run to invest into new technology to revolutionize the product in its core instead of only the packaging. The concept should not be influenced by existing technology – rather, the proper and accurate identification should be the primary objective. Since Ford did not start product development with the analysis of customer needs, on might argue its strategy is more driven by competitive behavior and success than it is by customer demand. While the wish to be competitive is at the heart of a company, it should not be a starting point for a new product strategy. After all, the customers are going to be the one who buy the product and not the competitors. Additionally, using competitors as an orientation for own strategy is in its part an imitation strategy which, in my opinion, will rarely result in a good differentiation argument. Car categories. Initially, Ford used product categorization buy size. In order to capture different customer needs, the existing categories were split into sub-categories. In my opinion, it is highly problematic to establish new categories by dividing existing categories into sub-categories. The sub-categories considered the different needs of customers but could not capture the overlaps between the old categories. Had Ford tried to establish completely new categories when it perceived the need for change, it might have been the first to do so and also might have been able to use this competitive advantage. Market segmentation. Consumer markets can be segmented by geographic, demographic, psychographic, and behavioral criteria. Ford used demographic variables to group small car buyers (A and B); the application of financial constraints and the presence of children in the household (household type, age) resulted in four target groups. This segmentation variable makes it easy to group customers, but lacks...
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