26 Oct Why Market Intelligence Matters
Lessons learned from the Ford Edsel
By David Steiner, President and CEO, D+R International
Often, in order to look towards the future, you need to look at the past. What worked, what didn’t work and why not? While there are countless historic examples of market research that have gone awry, the Ford Edsel is an iconic example of how one manufacturer’s perception of the market was quite different than that of the end user.
In the 1950s, Ford was developing the next great ‘thing,’ the Ford Edsel. Touted as the car of the future, the Edsel ended up being a costly flop. Why? While the reasons are many, a reliance on gut instinct rather than market research played a big role. According to Bill Gates, co-founder of Microsoft, “It wasn’t because the car was overly poll-tested; it was because Ford’s executives only pretended to be acting on what the polls said.”
Similar to the Ford executives who developed the Edsel, many manufacturers rely on their gut instincts to develop new products. That isn’t always a bad thing. Some of the best ideas are based on intuitions. However, the differentiator between a successful new product and a failure is utilizing solid market intelligence to back up your instincts.
Market intelligence: the game changer
Shifting gears, today’s manufacturers have a wealth of market data that is available to them. In fact, data is everywhere. However, not all data is created equal and finding the ‘golden nugget’ isn’t always evident. While accurate market intelligence gives you decision making power, inaccurate market intelligence could end up costing your company millions.
Three lessons learned from the Ford Edsel
- Find the right data: When Ford began doing research for the development of the Edsel, they focused their attention on mid-priced cars and overlooked researching compact vehicles. By the time the Edsel was introduced, compact cars were in demand. In order to properly evaluate market demands your data needs to be accurate, up-to-date, accessible and relevant to your specific industry.
- Listen to the data: While Ford polled car shoppers to assess buyer trends and preferences, they disregarded much of the data they collected. When you listen to your data you can evaluate your market share, make data-driven decisions about resource allocation and align your product strategy with market developments.
- Utilize trend analysis: What will your market look like in the future? Data trend analysis takes a look at industry data over time to identify any consistent results. That data is then used to predict what might happen in the future. While this technology was not available when the Edsel was being developed, trend analysis could have foretold Ford executives that the car industry was headed toward a slowdown—just as they released the model.
Having the right information leads to smart business decisions. That’s where we can help. D+R International is a leading analyst of confidential market data. Along with market research and partnering initiatives, D+R offers DRIVE, a business intelligence tool designed to deliver the most current and actionable market data at the national and regional level. DRIVE’s data can be used to evaluate market share, assess sales performance, run more precise market projection models or develop tailored marketing campaigns to accurately target customers in high-growth regions. To learn more about how we can help you make sense of your data, or to learn more DRIVE, contact D+R International today.