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~ /JR - &>5-To t, m ~, T he M ustang Story Corporate Studies A College Study Resource Published By Educational Affairs Department. Ford Motor Company, Oearborn, Michigan has written a unique chapter in the history 0f a uto maki ng and marketing. With unprecedented success, the o riginal " pony car" captured the enthusiasm of what became known as the Mustang Gcneration . ca r buyers of every age who found in it both economy and style. ln fac t, it broke previous firstyear sales records with 418,8 12 units attitudes is the now-famous study made by Ford to d etermine whether college students considered bucket seats an impedimen t to romance. A survey of colleges in eight cities across the country indicated that 42 per cenl prefe rred bucket seats for first dates. But among couples " going steady, " only 15 per cent preferred bucket seats to the standard bench-type. M ustang II, introduced in 1974, represents anotber chapter in the industry, a car model

being reduced in size instcad o f enlarged. Where the first Mustang virtually neated a m arket for thc sporty compact car, tbe Muscang 11 was designed to answer the demands of buyers s till intcrested in a fine small car. O ther design preferences expressed by young peo ple included the sound of a high performance engine and the feeling of being close to the road . Youth , in sum, was casting a bal lot for a car with a sporty flair. T HE MUSTANG To u nderstand the phenomenal effect of the original tvl us ra ngon tbe car market, it is necessary to look at the sociological and economic developments of the early 60s that helpcd sbape its success. THE STATE OF Tl-ill MARKET First. the p roducts of the World War II baby boom were coming of buying age. Millions of young people would enter the automobile market as customers in the l 960s . ln fact, it was expected that shoppers in the 18 to 3-l- age range would account for more than 50 per cent o f thc increase in new car sales projected

for the coming decade. Beyond thal, they would account for the bulk of the buying in the used car market. Tt appeared inevitable chat youth would be a potent factor in the rnarkctplace. And research showed that youth would exercise an importanl influe nce in shaping car design. Young buyers. it was clear, had definite ideas about style and perfom1ance. Por example, 36 per cent of all persons under 25 1iked the ··four-o n-the-floor" feature- the four-speed floor shift. But among those over 25, only nine per cent wanced co sh ift gca rs. Bucket seats were a favoríte feaLt11 c among 35 per cent of thc young people, as against 13 per cent in the older group. The study procedures of market research are by their nature :-tatistical and scicntific. But rcsearchcrs are interested in more than cold figures Proo[ that market research is in sympathy with the warmer aspects of buyer Another important development affecting the rnarket was the trend toward higher education. Some

three-anda-half million sludents were enrolled in the countrys colleges in I 960, with the total expected to double by 1970. The new you ng buyer was going to be a better educated buyer. The significance of this d eveloprnent is shown in the correiation between education and car buying. CoUege-educa ted people buy cars at a markedly higher rate than non-college people. ln 1964, fo r example, 19 per cent of the US population had at least sorne college, yet this relatively small group purchased 46 per cent o f all the new cars sold in the country that year. l n addition, consumers as a whole wen>, h~coming increasingly sophisticatccl and discrirn inating through improved communications. including the pervasive influence of television A third phenomenon of the marketplace was thc explosion in the number of rnulliple-car buyers. ln 1959, one million U.S families owned two o r more cars Researchers felt certain that throughout the decade of the 1960s, the numbe r of multiple-car families

would increase steadily. Events proved the accuracy of the forecast ln 1964 the number of multiple-car owners topped 13 million. By 1967, two million American famili es owned, not just two. but three cars T hc increase in multiple-car ownersh ip was a natural result o[ the growing affiuenceof the nation. More people were enjoying higher incomcs. Markel rcsearch indicated that the number of people earníng higher incomes wo uld continue to increase, and thjs forecast also was bo m e out by events. Number Rcsea rch also s howcd that lhe in fluence of women \as a subslantial factor in the growing number of multiple-car ramilie.s since they generally made the most use or the second car. Ancl they wcrc fo rming deci<led opinions ahout what kind of car it should be- small and ma ncuvcrable. ont th at would handle and park easily, a small. spccializecl vehicle These, then. wcre the forces that were beginning to po in t a new dircction fo r car design, signs of a demand for ;1 car 1101

curri:ntly avail ablc. lt was obvious that no ordinarv car would satisfv this new markel. T wo criteria must b~ mer. Fin;t the ~ar wou ld have to be novcl in design with an exceptio nally attractivc " personality." Second. the price would havc to be with in the rcach of the new young buyers whose sophis ticatecl tastes tended to nutrnn their relatively moclest means. CREATING A CAR Codc Name : Mustang At about th c ti rne these factors began to emerge as sign ificant marketing considerations, a small task force of Flird designers, t!ngineers and product planners set down the conccpt of a fo rward-[ooking cxperimental spo rts car wilh the c0t.lc name Mustang T heir concept was a purc spo rts car, a two-seatcr, designed with no thought to mass-ma rket a ppcal. Research ancl sales expe riencc alr~ady had shown that a two-passenger vchicle, evcn a successful one, would !ind only a limited markel in thc Unitcd States. A prototype of lhc Mustang exhibited at the Watkins Glen

Grand Prix in the fali of 1962 c rcatcd phenomenal exc itement. People poured from the stands to surrou nd thc car. Subseguent showi11g:-, al culkgt: campust:s across rhe country drew crowds of e nth usiastic admirers. Ford planners now felt certain they cou ld gi ve the designers and engineers a clear direction. T he stud ies that had been undertaken and thc response to the first Mustang incl icatcd that the right course was to capture the fla ir and tlavor of the Muslang in a four-seater that cou ld be eithcr a persona! or a family car. Time was a critícal factor. The Worlds Fair which was to open in New York in April. 1964 would provide a.dramatic showcase for the p remiere showing of the new car. A n unofficial cleadline was set fo r thac rendezvous Less than 22 rnonths remained in which to arrive at fin al engineering <.lecisions and a final design model co arrange for plant, equ iprnen t and supply sources, and to create advertising and promotional plans. Marketi ng studies

con tin ued. When a manufacturer pioneers a major new product, the substantial risk involved can be minimized only by close and continuous analysis of market trencls. Throughout 1962, thc facto rs atfecting buyi ng altitucles lowa rd such a car as Mustang First /l/11stw1g ? rod11crio11 lvfo,l,,/-/ 964 ;:.:-- :=:;:-----,, -. --=f-!lilllCl:l!ac~~ -~.~-·· ··~ 1~ ~ . . . 7-7 . 1 . • ~ . . . had becn given close evaluntion . Design alternativcs, optim um size, performance characteristics. probable salcs and the sourccs of those sales, came under intcnsc stucly. ln lhc su mmer of 1962. market su rvcys foc used on package sizcs to detcrmi ne which rnight be the most appcaling interior a rrangement. As thc interior was designed ami rcdesigned, new sales volu me estimates were rnade, and trends in the markel wcre o hse rvcd carfully to make sure the assumptions o n which the Mustang was being created would rcmain valid. An unprecedented crnsh program was unde rlaken

to arrive at an early design solution. Designers of the Corporate Projccts Studio, the Ford Studio ancl tbc LincolnMercury Studio were g iven package dimensions and asked to cngagc in open competition, with an outside lim it of two weeks to present clay moclels o f tbeir design ideas. The cleadline of two weeks fo r a clay was revolutionary The challengc sent a wave of enthusiasm through the studios. Two weeks later, scven design cntries were reviewed. Several of thcm could have been winners in any o ther competition. Yet onc of the seven stood out distinctly The glances of Ford Motor Company top management camc back again and again to a litlle white car with red whecls produccd by thc Ford Studio. Thc car was distinguished by an air of sporty poise Ford marketing experts invitcd selccted groups of potential buyers to view the seven proposals. Careful rcadings were ta ken of buyer rcactions, ín the greatest deta il possible. and a thoro ugh analysis was made o f the opinions exp

ressed. The extremely favorable response to the Ford Studio entry confirrned the conviction of Ford planncrs that a car with this flavor a nd these featu res could supply what thc market lacked. The decis ion was made to build the Mustang. Tt would be a first-class product in a ll respects-quality. fittings, ap pcarance and performance. A decision made early in the d cvclo pment stages stipulated a wide sclcctio n of options a nd engines, so the Mustang could satisfy a wicle variety of tastes. One added featurc was to be the new Ford 289 cubic im:h engine. This was smal l and light with an unusually high horsepowcr-to-wcight ratio achieved through thin-walled gray iron casting tech niques. T he luxu ry buyers wi th the means to satisfy their wishes coulcl transform the car to thcir liking with a wide selcction o f extras . At thc samc timc, the young buyer with limited means would be complet.ely satisfied with thc standard Musta ng, becausc of its ai r of discriminaling sportiness.

Procluctio n commitrncnts wcre maclc. a imed at bringing o ut "Job fii," thc lirst production unit by March 1 1964. Tbe Specifications Specifications for the ncw car gradually evolved fro m the accumulntecl rcscarch data. Wc igh t: no t more chnn 2.500 lbs Length: not morc than 180 inches Engine: peppy six-cylinder, o ptional V -8. Seatin g: four pnssengers, with buckcl scats anJ other sporty Louches Personalily: demure enough for church-going. racy enough for the dragstrip. modish cnough for 1he country club. Succcss ín developing a ncw car h ingcs o n predict ing three years ahead what consumers will want at a giell time, as well as on taking into acco unL what compctitivc companies will be doing to satisty that wanl. Assumi ng that thc rescarchers wcre corrcct in thcir prcd ictio ns of a spccific markel c.lemand could Ford design and procluce a car in time to takc advan tagc or that new dcmand? If so, would it attract buyers in thc facc of lhe ncw entries thm compelitive

companies mighl prod11ce? Thcse were not exceptional questions. Th ese are the same questions Detroit must race a ncl answcr every model year. Continuing Analysis of the M arket Throughout 1963 eva luation of mark et factors co ntinucd. The probablc impact of tlie Mustangs featur~s on prospective new car buyers was rechcckcd. Pricing studies werc made in early sp ring, rechecked ín midsurnmer. ln the fali a special dcsi1,TI cl inic was hcld to rechcck design clecisions. There was eviclence that the Mustang 111ipJ1! have a wider market tha n was a t first conceived. T hc ca r was cleveloped prima rily to satisfy thc young adult b11yer and the multiple-car markel, but il proved to be exciting to other kincls of prospects, too . Many couples wi 1h young children al their hccls wcre taking long. slow looks at expcrimental cars such as thc first Mustang which were being displayed at auto shows. Accord ingly, a special probe was made into a new arca o f prospcclivc buycrs. When a protoL)

pe o f the car was rcady. invitations were exten<led to 52 cou ples who had pre-teenagc ch ildren a ncl who uwnecl a single starnJanl-sizc a utomubile . T hese wcre pcúple for whom thc 1vl 11stang was nol originally planncd. Thcy came ro thc Design Center s howronm in small groups to sec the car. 3 R eactio n was spontaneously enthusiastic, but the viewers agreed a mong lhemselves that th e car was impractical for them . A p henomenon occurred, ho wever, whe n the p rice o f the car was discussed. Asked to estimate the price, most cou ples overshot the mark by morc tha n a thousand dollars. On hearing the actual price. lhey u11dcrwcnt a strnnge transformation of vicwpo int Husbands and wives went back for a sccond Jook at lhe ívl us tang. and without exception began to find reasons w hy this cnr really would be p ractical for them aft~ r all. This a nd other studics p inpointed the buying attitudes row:.ird wh ich a n e ffec tive m arketing cam paign could be ai med . The

clcments were ready-made The public had a l ready pl acec.l a stam p of approval on the sporty s tyli ng o f thc M uslang. The ca r h ad a " performance" look, a road-h ugging stance lhat ass u red viewers it would handle well. s tcer and pa rk casily Couples with c hildren m ígh t o n fi rst sight question the praclicality of the vehicle fo r the m; but, o n discoveri ng the u nexp ected low price. they wou ld put their wits to work to find reasons wily the purchase was feasible. Marketing strategy was workcd out accordingly, to take fu ll advancng.c of these buying attitudes ln add ition. it was dccided to stress t he M ustangs "C rsatility. The w ide range of o ptions avail able on the car prov ided a vehicl e that could be custom tailored to the luxury, sports or economy-oriented b uyer. Thus the base of the cars appeal was broadencd. THE INTRODUCTION The Mustang was to be introd uced to the public on Apri l 17. 1964 su111t: three years after the planning of the

car began. T he long lead-time required in the a utomotive indust ry. from conception of a car to public inrroclucrion day. is a measure of how essential it is to determine thc needs of the market several years in ad vance. T he M ustangs special preview for the press, four days beforc publ ic introd uction, was made against the qriking setting o f the Ford Pavilion at the New York \o rld "s Fair. The prcss showing proved to be a hístorymak ing debut a nd reaction was uniformly enthusiastic F ollcnving the showing of the car, 124 reporters wcre pa ired o ff in Mustangs and given a set of road rally instructions that took them 750 miles to D etroit. The o rigi nal e nthusiasm aroused by the showing in th e F ord Pavilion was increased by the driving experience on the highways. and subseque ntly expressed in warm terms in the w ritten reports of the correspondents. Time and Nc1 ,·.rn·eek carried simu ltaneous cover stories Life, Look. Esquire US News 0 11d World R eport and o

ther top-flight publications carried editorial spreads. The p ress as a whol e was u nusually genero us in praise of the Mustang. Another history-making "first" took place on the night of April 16. For the first time, a majo r automotive manufacturer sponsored simultaneous programs on three m ajo r television nc tworks. M ustangs image was projccted into 29 mill ion ho m es d uring prime viewing time. The next day, Mustang announcement ads ran in more than 2,600 newspapers in a pproxímately 2,200 markets. T he ads were, ín effect, special invitations to the buyers for whom the car had been created. l n newspapers, in womens pages, in 24 of the top nationallycirc ulated magazines these invitatio ns were extended to young people, yo ung marricds, sophísticates, o lder groups slill young at heart and the millions of fam ilies witb two o r m ore cars. A mark~li ng program was planned for each of these types of buyers. T o generate mass cnthusiasm, il was considcred vital to

expose the car q uickly to as many people as possible. Since the entire public could not come to the car, the car was taken to the public . City dwellers saw Mustangs at more than 70 high-traffic metropolitan locations throughout the United States. Air travelers saw Mustangs in 15 major a irport termin als from New Y o rk to San Francisco. P eople on the go on the road saw Mustangs racing toward them fro m billboards in morc tha n 170 important markets. The suggested retail price was prominently featured on the boards, as it was in all introductory Mustang ad vertisin g, in order to position lhe new car immediately within the automotíve market. To gain furthcr swifl exposure, various types of promotional tie-ins were executed. One hu nd red H oliday Inns displayed Mustangs in their lobbies o r near their main entrances. Four top TV shows used Mustangs as prizes on their programs. M any other companies used the car as prizes in their promotional campaigns, adding to the pulling power o

f their p romotions, and simultaneously addíng to t.he cars public exposure On the day of pu blic introduction, dealer showrooms sparkled w ith a gala atmosphere stimul ated by special Mustang pictures, wall poste rs and window trim. T he theme was simple and forceful: the "unexpected. Potential buyers were pleased by th e Mustangs sporty flair and intrigued by its u nexpectedly low price. There was im mediate evidence that the marketing concepts behind the M ustang were directly on target. Streams o f visitors came to see, and o rder. the new car At various dcalcrs hips throughout the nation some startling incidents took place. A San Francisco truck driver, apparently thrown into a trance by the sight of the car. could not take his eyes away, and drove his truck straight through the showroom window. A Chicago dealer had to lock the doors of the Mustangs in his showroom because so many people were tryíng to crowd into the cars at once they were in danger of injuring

themselves. A Pitt,;burgh dealer with a M ustang up on a wash rack cou ld not get the car down because of the crowd of people pressing below. One of the most emotional of all reactions occurred at a dealership where fifteen compcting customers tried to bid on the same Mustang. T hc succcssful buyer insisted on sleeping in his new car, " . so they wont sell it out from under me before my check clears in the morning." T he favorable rcaction on Introduction D ay carried over and was stro ngly sustained. Within four months more than 100,000 Mustangs had been sold, and the car had taken its place a mong the to p five automobiles in sales vol ume. The ma rket that had been Iooking for a specialized car had found it. Tlill MUSTANG BUYER F rom the marketing viewpoint, it now was essential to lcarn everything possible about the average M ustang buyer. Information on buyers was needed in order to gauge the fu ll potential of the new market that had been created , a nd to assure that

the car was an enduring concept and not a passing fancy. Statistics traced a significant picture. T he average age of Mustang buyers was 31, with more than balf of them in the 20 to 34 age bracket. These facts helped confirm the early predictio ns of markel studies on the growing importa nce of young people as prospective buyers. O n the other hand . it was reassuring to note that about 16 per cent of Mustang buyers were between 45 a nd 54. This was clear indicatio n that the attraction of the car was not li mited to the younger set. As the slatistics accumulated, it became apparent that mo re than 40 per cent of all Mustang buyers were in the $5.000-to-$ l 0,000 income bracket, suggesting thal the advcrtisí ng themc of " unexpected price" had been effective. At the other end of the range, it was notable that almost 15 per cent of a ll buyers h ad incomes of $1 S.OOO or morc per year Clearly, something besides thc low price d rcw thesc customers to the Mustang. Nearly

two-thirds of the early Mustang buyers were married. proving that the main support of thc car was not coming from thc young bachelors of either scx. F ifty-two per cent of a ll Mustang owners had some college education, a nd another 38 per cent were high school graduates. Jn o ther words, thc Mustang was drawing its support frorn the segme nt of the population with the greatest stabili ty, the m ost secure purch:1si ng power. The future of M usta ng lookcd brigh t In addition to learn ing who the M ustang buyers wcre and what they were like, it was imporrant from the marketing viewpoint to ascertain exac tly wha t they were buyi ng. P a rt of the o riginal marketing strategy had blcn to broaden the appcal of the car by providin g a wiúe array of options which wo uld make ü possiblc for the buyer to cuslom-tailor the ca r to individual tastc. T hl buyer cou ld begin wilh the low-cosl econo my model a nd add the appropriate optíons to create a rally-type sports car or a luxury

Mustang. T he facts showed th at c ustome rs we re c nthus iastic about the options. E ighty-fivc per cent of a ll lvfusiangs sold were equipped with white sidewall tires, 80 per cent with radios, 71 per cent with cight-cyl inder engines. 50 per cent with au tomatic transmissions a nd 10 per cent with lhe "Rallye P ack," designed specially for the customer who d rove a car more "for the fun of it" than for utility. The decision to make a variety o f options available was vindicated in the marketplace. The M ustang was indeed appeal ing to a wide variety of owners. Tt was obvious that the car had a roused a strong ernotional attachment in aJI types of car buyers, even though its original target was a particu lar segrnent of the markct. CHANGES By March, 1966, the m illionth Mus tang had been sold . By Novem ber of that yea r, sales had passcd the one-and-a-quarter million mark. Mustang was the thi rd best-sell ing car ín the industry at that time. However, the

introduction of a successful car lcaves the manufacture r littl e room fo r compl acency . E ven th c establish menl of a new ma rkct carries no guarantee that the pioncer will continue to e njoy a hold on thc market he created. Buying a ttitudes change The needs and desires of car fanciers changc . Competitors arc studying these trcnds, and their designers a re constantly at work to produce a model that will attract the eye a nd the o rders of car buyers. So, in thc years after public introcluction, Mustnng underwcnt a series of changes in size, a ppearance a nd basic appeal , with a wider rangc of models . Thc first fastb ack was ollered iu Septembcr of the int roduction yca r. Jn 1969, the luxury Gra nde ancl thc Mach I highlighting the sporty, perfornrnncc aspect, wcrc introduced 5 M11sta11g fi Productio11 Modd- 1974 R(,~,s 30:2 an<l Boss 351 . performance cars, appearcd i11 1970 anJ 1971. rcspcctively; the Boss 429 became thc ··ultimate" car fo r many drag strip

drivers and fans. Thi: Mu!-.t111~ acwa lly i11spired an entirely new kind of car compctitin11 call cd ·Trans Am," whe re the car line ra1hcr than tbc J river is awarded the charnpionship. ~ lustang won Trans Am competitions in 1966 and 1967. l3ctween I 965 :rncl 1973, thc car gained over 600 pounds anJ more tha n a foot in lcngth. And, beginning in 196 7. sa lcs of Muslang began to decline A lso. the lcttcrs Fo rd was receiving from consumers about Mustn ng had n decis ive change o f tone-thcy wcre ,tii! ··Jove lctlers," as Lhcy had been from the start, but thc wrircr~ hegan to express growing disench antment with the increases in tbc sizc of the car. ln May. 1968 Anna tvluccioli a F o rd stockholder, thc lloor at thc Com pany"s annual stockholder meeting: anú madc n sim ilnr complaint : 1-!0l ·· 1 have a "65 M ustang and I clon t likc whats k 1ppcni11g. They·rc blo wing them up Why cant you just lcavé a sports ca r small? T mean you keep blowing them

up and sta~ting anoth cr little o ne, blo w 1ha r o nc up and start anothcr one. I mcan \ hy don·l you jus1 leave them?" Commenrs such as these. the decline in Mustangs popularity. a nd thc growing sales of luxury small cars bei ng im po rlcc.J from Europe and Japan were straws in the wind. These facto rs were noted carefully by Ford 111a11agcmen t. and in pa rticular by Lee A Iacocca, thcn Eccu tivc V icc T>rcsident of Ford North Amcrican Automo1ive Opcrations. C redited with being "father" of thc o riginal Mustang, lacocca was named Company Prcsident in 1970. After carcf-ul study and much discussion. the decisio n was made in 1969 to makc an entire ncw car line out of Lhe Mustang. As Jacocca put it, " Trying to please onc segment of the Mustang market that wan ted the car b igger, we were losing the much larger majority of original Mustang lovers who didn t want it c hanged . the market never lefl us. The original Mustang buyer is stilJ there, still wan

ting a good fitt/e car. We w alkecl away from the market." MUSTANG II Wliat are buyers looking for? D eciding that thc Mustang did indeed need to be changed was considcrably easier than clctem1ining what kind o f new car shou ld be offcred. Scvcral factors in the ncw car ma rkct of the late 60s and carly 70s shaped the design and appeal of what woulcl eventually be callcd Mustang TI: - the small car segment o f thc m arkel grew f rom 23% in l 964 to 40 % in thc early 70s. -sales of subco mpacts doubled between 1967 a nd 1972. - 1972 markcd thc firsl sales decline for ernnnmy imports, but l11x11ry impon s wcrc cnjoying reco rdbreaking popularity. - sporty compacts (Mustang and the competitors it drcw, Firebird, Chargcr, Camaro and Javel in. for example) were becoming less popu lar, wh ile sporty .mbcompacts were c njoying growing salcs; this was true especiall y with the under-35 age group, a group that was increasing its percentage of the total number of buyers. - Ford

executivcs saw s igns that thc car buyer of thc 7o·s was morc concerned about quality cons tructio n than were b uyers of the 50-s and 60s. The ncw Mustang. then, would have to combi nc the luxury and high q uality look and fe.el of a big ca r with the conven ience of thc ncw, popular small cars, s pecific ally the subcompact. To achievc a totally new look for the car, lacocca tu rned to the Gh ia design studio and carrozzeda in Turin , ltaly. a house that has produced car bodies and prototypcs fo r Rolls R oyce, Alfa R omeo, Maserati and others. a nd is now owned by Ford Motor Company Wichin a few months, Ghia dcsigners p roduccd two prototypes, a fastback and a notchback (the traditional sq uared-off roof) . Having two actu al ca rs to examinc in such a short ti mc gave the design program a good head start, and thc Ghia models were very iníluen tial on the final car design. In fact, Lhe top-of-the-line Mustan g ll for 1974 was called Ghia. Thc Companys design studios in Dearbo rn

al ready had been wo rking at design possibilities. a nd some of their later models werc inspired by the Gh ia entries. Aftcr several consumer reaction clinics, a fastback design by o ne of the Ford s tud ios was identified as the most promising. Howevcr, favo rable response to a notchback model at s uch a cl inic in San Francisco indicatcd that thc notchback dicl indeed have an " audicncc," and plans were made to markel the car in both body types. rnterior design and detailed engineering began "Fits and finishes" As the dcvelo pment of thc car progressed. eff orts were made to ensure that it would have min imu m NVH, auwmo1ive shorthand fo r no isc, vibration and harshness. The ca rs isolated sub-frame, front suspension and cnginc mo unting system thal rcduced thc vib ration common to 4-cylinder engines bccamc particular poin ts of pride a mtrng Mustang 1l engineers. lt was decided early tha t the car should offer tbe levei of soun<l-deadening common on

higher-priccd cars, along with rack-a nd-pinion stccring for positive and quick stct:ring action. A power o ption witb rack-andp inion stecring never bcfore a ltered o n a n Americanmadc car wa<; approved ln addition, Mustang 11 would fcature the first engine built to metric speciticalions in the U.S A special "fits and finis hes" task forcc was assigned to e nsure tha t the productio n cars would be buil t w ith precision-the watch word fo r M ustang JT bccam e " jewel-like ." PRESENTING A NEW IMAGE As with the original Mustang, consumer groups who rcviewed Mustang TI gucsscd its price as much higher th a n the basic price the Com pany actually planncd . Po tential buyer studies conducted by the Company and its ad vcrtis ing agencies identificd Lhe p robable Mus ttrnf! fi buyer as a middle-income, suburban A merican. a young person who would be concerned with qualityh andling. workmansh ip, economy valuc for the moncy - but one also in te rcstcd in the levei

of lux ury thac is traditional in expensive Ame rican cars , attractivc design and the plcasure of driving a fine car. Based on thc profile of expected buyers, m arketing strategy was developed to associate Musta ng 11 with style and quality. It was learned that the demograph ics of custorners at the major shop ping malls througho u t the count ry closely paraUelcd the profi le-for its fo rmai introduction, the car was dis played at a number of thesc enclosed malls, with the display hosts and hostesscs wearing the latest in clothing fa shion . The car also was displayed at 13 major U.S ai rports and a Mustang Il was awarded as a prize in the U.S Tennis O pen . was fcatured in ski magazines and at ski cquipme nt shows, to capital izc 011 thc populariLy and image of that sport. lc Musta ng lls were provided lo 100 U.S colleges and u niversities that ofTer marketing studies programs, and prizes were awarded to thc studcnt groups prcpari11g thc bcst advertising and marketing

recommen<la tio ns for the car. This exposed M ustang 11 to large numbcrs of people in the youth markel. Cornmcrcials on top-rated television s hows heralJed thc c ars introductio n, and advertise1111::nts in la rf!t.: circula tion magazines and ncwspapers added to the marketing mom enwm . Autom otivt! writcrs were gicn Mustang Irs to Lest-clrive and review in their publications. Prior to introduc tio n, spccial traini ng films on handling Mustang 11 salcs had b ccn prcparcd a11d d istributed to dca lership salcsmen, ami ad vertisi ng kits lli p ro rno te "Hornctown Foru·• h ad becn made available to thc dcalers. 10 The ini lial ad vertising for Lh t: <.:u1 appeucd Jircctl) thc luxury tastcs of the projccted buyer- c mphasizing 7 that lht: ca r was a complctdy ncw and diffcre nLMuslang, Iha t it was s rnall , a nJ that it o fferecl the mos t advanced cnginccring features as wcll as comfort and co n venience wuchcs-a ll LO su it rhe --ca rget" market establisbed

b y thc Comp any Juring thc ca rs deve lop me nt. However, sales of the car cluring its firs t few weeks at the Jca le rshi ps werc discou ragingly low. Q uick studíes of the siluation were lau rt c hecl. a nd the major cause o[ the lagging sa lcs was discove red. Assu ming thai Mustang Lls many luxury optional fcatures a nd the higher- priced Ghia modc l would be popul a r with the target market, 1he Cl)mpany had d isLrib utcd lo ils dealcrs loo many Ghias and o ther modcls hcavi ly eq ui p ped with o ptions . Small cars gene ra lly are associa ted with lower prices ; co püsition thc ncw car properly in the marke tplace, morc or tbc basic. lowcr- priced models wo uld have to be made ,1vai lable al the dealershi ps. As it was, cus101111: rs arriving a L lhcir d ealersh ips freq uently had diflicully nnd ing a basc modcl lo cxamine o r test-drive , and the p riccs t>f thc heav ily-equ ipped models o ften we re beyo nd rhdr cxpeccations. Two s teps we re taken im media lely to

rectify the situa1i-1n. rvtustang 11 advcrtising was mo dified to emphasize chc low base price of Lhe ca r- under $3,000- and production p lans were rcviscd LO su pply d ealers with more of the basc mode ls. lt was lcarncd a lso lhat initial advertising for the car did nol s tress adequalely the new s ize of Mustang , and that was corrected. W ith thesc ch a nges in e ffecl, a gratifyi ng upswi ng in sales took place. A llhough Mustang II did not approach the initi al succcss of its p redeccssor, more than 285 ,9 00 Musrangs wc rc sold d uri ng lhc 1974 modcl ycar, rcp rcs~n l ing a 135 % increase ovcr Mustang sales du ring the 19 73 mndel year. The modcl brcakout at the end of the first model ye ar showed that 47.2 % o f lhe Musta ng Ils snkl wcre lhc base two-doo r model, 19.5 % the Mustang 2 -p lus-2 halchback, 10. 9% the spo rty Mach I, and 22.) % thc top-of-t he-line G hia Sales results ind icated tha l the 197 4 Mustang II had srrong appcal among yo ung, well-educated a nd

we]lpaid rnnsumers. Ea rly buyer surveys showed that 28 % nf thc 1974 Mustang ll o wners had completed some college, 26% were ín the 20-24 age b rackeL, 3 1 % were in technica l or professiona l fi elds and J l % earned from $~0.000-$25 OOO per year Of the Mustang 11 buyers, 61 % were married , 3 3 % had no c hild ren. 58 % h ad vacatio ned by car in Lhe US tir C an ada ín thc 12 mo nths prior to the ir car purchase, and 63 % owncd two o r mo rc c ars afte r their purchase of a Mustang II. T he median agc o f the l 974 Mustang TT b uyer was 2 8, media n income $ 16 ,053 , and average number o f years of ed ucation was 14. One factor affecting the sales o f Mustang 11 was unfo resee n by the C o mpa ny. indeed, by the countrythe oil embargo by p roducing nations of the Middle E ast a ncl subseq uenl fuel s hortages suffe red in the U.S Por the initia l target market o f M ustang U , fuel economy was not a prime co ncern . However, a s the fuel situation wo rsen ed, co nsumer studies

showed that Mu stang II was perceived b y the public as a particularly good "buy" in terms of gas mileage. The C o mpany did advertise fu el economy test run results for its small cars, includ ing M ustang 11 , during the " l D id nt Know T hat" tcl evision campaign, b ut advertising for the M ustang II alone d id not capital ize on the fu el sho rtage as a selli ng point. Yet, the o il embargo d id help to boost M ustang II sales thro ugh the model year . T he dr.velo pment of Mustang TI re presented a reversal of the tradi liona l price-siz e relatio nship -that is, bigger cars being mo re lu xurious ancl expensive. Tt stepped away fro m the tradit ion o f small cars being spartan in co mfort a nd style, and with its wide o p tion avail ability, offered thc consumer indiv idua lized luxury in a conven ie nt size. A t the begi nning of lhe 1975 model year, competitive veh icles a lready were appearing o n th e new car scene. MUSTANG : A ST UD Y JN BUS IN ESS

Essentially, the story of th e Mustang is the st0ry of busi ness invcstments c a rrying eleme n ts of substantial ri:;k- the first car crca ti ng a specific ma rkel out of the general inte rests of co nsu mers, the second respo ndi ng to fa irly weU-d efincd buyer de mands. While each car has its u n iq ue points, both represent the strenu ous efforts of a b usiness e nterp rise Lo satisfy the wa nts of tbe buying public. l n the automotive ind us try, the customa ry threeyear develo pmental pcriod fo r a new model car makes it impera tive Ihat the demands of th e evcntual cuslümer be a nticipated and id cn tified accurately a nd well in adva nce. J n th e end, the c ustomc rs must be convinced or rhey cannot be sold. Whe n they a re sa tisfied with a producc, it is because the tatai effort in design, engineering, productio n and promolion remained o n target all the way. l n thc last analysis, the customer is the judge The Musta ng meL this test with ou ts ta nd ing successthe

popularity of Mustang II ind icates th at the Company madc a second good d ecision, this time in changing the car