To meet current demand, Ford considered investing in additional capacity to build more Mustangs… Executives decides against it to avoid getting stuck with too much capacity should demand slack off after a year or two.
If I were a share holder or an analyst, I’d be unhappy about this. Ford is leaving value on the table. And they are doing so, apparently, because they cannot predict demand a year or two down the road.
If I were a share holder or an analyst, I would say, "Predicting demand? Isn’t this what we pay you for? Haven’t you just declared yourself unfit for office?"
Anyone who hasn’t been living in North Korea the last couple of years knows that muscle cars are back. Even Hollywood got the news and managed to make a lot of money with a couple of pictures staring Vin Diesel. Mr. Diesel can’t act to save his life (or a picture) but then he didn’t have to. In fact, the real stars of The Fast and the Furious and XXX were the cars Mr. Diesel drove.
This is marketing for free. Contemporary culture in its wisdom and for its own particular reasons decided that cars were BACK. In other words, Detroit just got a great big gift.
But to ride the trend, Detroit must know the trend. And to know the trend Detroit must bridge the gap between kids racing in the streets and Detroit marketing executives. From an anthropological point of view, it’s hard to imagine two worlds more disparate. Men of middle age living in the leafy, gracious suburbs of Detroit (grosse point blank) versus kids working two jobs to race one car late, late at night in warehouse districts where leaves are not allowed. There is a vast cultural difference between them.
But the good news: bridging the gap is easy. The important thing: never use cool hunters, or a member of the car community. The trick: put on your dumbest, more conservative suit. Borrow the stupidest car you can find. A K-car would be an excellent choice. Get up at 2:00 in the morning, go to a warehouse district and listen for loud engines. Find the race, approach someone, and pepper them with questions.
You will be met with ridicule. This is good.
Ethnography begins with an act of humility and the declaration of igorance. The respondent will mock you at first and then something remarkable happens. When they see that you are not going to cut and run, that you are so sincere about finding out about what they know, you are prepared to endure a massive loss of face to do so, they will take you in, sit you down, and tell you all about it.
Clearly, this is only the first step. It remains to talk to everyone else in the diffusion chain about newly muscular cars. This will tell us which and how much of the innovations of the early adopter will come in from the margin to transform the tastes and preferences of more mainstream players. And this will tell us whether demand is sufficient to warrant expanding our production numbers for the next couple of years.
And this is a very good thing, because, frankly, I think share holders and analysts are watching.
Boudette, Neal. E. 2005. Muscle Cars Make a Comeback. Wall Street Journal. June 16, 2005, pp. D1, D3.