Study Questions for McCraw’s “Henry Ford, Alfred Sloan, and the Three Phases of Marketing”
1)Why did the American market for automobiles expand so much during the twentieth century?
It expanded due to
- population growth
- the increase of purchasing power by consumers as rich countries became richer
- the creation of the idea of mass production with the assembly line that the number of automobiles to be
produced to be increased tenfold
- market demand was there
2)What were the three phases of marketing that developed in the United States during the twentieth
Phase 1 – Market Fragmentation: businesses sold and produced small volumes, stayed within a small
geographic area, most products sold were commodities,transportation and information was both slow and
expensive, and there was a high margin for every unit.
Phase 2 – Product Configuration : business begin to produce high volume of units cauing low margin for
eveyr unit, the introduction of branded products that hold a national mass market from the cheaper and
fastr flow of information and transportation.
Phase 3 – Market Segmentation : businesses produce a variety of brands with each brand having its own
market segment, the volume produces so high that economies of scale possible with marketing abd
manufacturing adding to the global market that company has created hrough various demographic and
psychographic segments, and due to enhanced research capabilities there is that more precise
segmentation which allows businesses to fight for market through value pricing
3)Describe the life of Henry Ford and explain some of his groundbreaking innovations in the
automobile business. What failures did Ford experience in his life?
Henry Ford’s life was both eccentric and ground breaking. He grew up on a farm with little
education, and it was in his 3 attempt of a company that the Ford Motor Company succeeded. He
worked very well with machines and has a intuitive instinct as to how they worked.
Grounding innovations included his idea for mass production that led to the assembly line, and
that reduced the amount of labour tenfold. His Model T was a huge innovation as it had everything a
consumer would want, light, strong, small, while maitnaing a good price.
Failrures experiences I his life included his inability to move with the changing market. He failed
to see that consumers wanted more than just one car, but looked for variety (colour, size, style) but could
not get past the idea of standardization. He was also sort of a control freak, unable to levy any
responsibility to anyone else thus putting the entire fate of the company in his head. Failed to look out for
the competition, and mistake in taking the company private at a time where the economy was bad. He
overestimated consumer demand but producing more than the demand and creating a inefficient
relationship with his dealers. Other failures included: the