Tuesday 25 November 2008

Ignoring the consumer usually is not the brightest strategy

It is often rightfully considered when of the most powerful industries in the World. Detroit motorbusiness generates anually a higher income than a wide number of independent and sovereign countries all over the World. But what it seemed like a rocksolid business, is now trembling and asking for (the U.S. much hated) governmental hand.

A crutial mistake that lead to this situation was a classical one. And one we all wouldn't be expecting of such giants - but maybe thats what traditionally happens to giants, they grow so much that they lose sight from who buys their products.

The Big-Three Detroit automakers (Ford, General Motors and Chrysler) have lost their consumer focus. It is as simple as that. They thought they could control the market, the cars people would demand forever, ignoring the World that was evolving around them, like shuting themselves from whatever happened out there. Well that wasn't true, and now Detroit is learning the lesson.

You can't really ignore consumers. Detroit has gone after a model of creating people's demand for their products, and ignoring trends that influenced what people wanted from their cars. It would come on a time when consumers would become more and more sensible to environmental issues, more and more cash strapped to ignore that their cars costed a fortune just to fill the gas tank (of increasingly high-priced petrol, due to oil supply shortage and increasing demand). You couldn't think that you could drive demand forever for big gas-guzzlers in front of consumers eyes and sharpen their teeth for the cars they made - not the cars people would want to buy!

And you can't ignore competition. Especially when they have heard consumers. Especially when European and Japonese car makers are selling cars in the U.S. that they know are right in terms of marketing trend and people will demand in the medium term (when they realize those cars cost less, are better quality-built and more fuel consumption efficient ones).

Detroit has always been an inspiration for marketeers all over the World, with Henry Ford leading the pack of brilliancy in building a great industry from realising what the consumers really demanded. Now, the U.S. automakers are again presenting and remembering a valuable lesson the marketing World shouldn't forget.

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