Ford Motor Company Elasticity/Consumer Behavior and Market Competitiveness
Consumer behavior or elasticity is a consumer’s response to a change in price of a good or service. Consumer behavior allows a consumer to rank and prioritize purchases according to their elasticity of certain goods and their dependence on others (Managerial Economics, 2010). When consumers recognize a change in price and respond strongly, they can adjust their consumption and therefore have their demand for that item become elastic. Automobiles tend to have elasticity in them in regards to make, model, and features that the consumer is willing to pay for. Basic models and good fuel mileage become important as income goes down and elasticity for automobiles goes up. Merriam-Webster defines competition in business as "the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms." In a market with a declining demand for luxury items, such as vehicles, automobile makers must stay on top by enacting initiatives that will attract consumers. The following analysis will show how Ford has used consumer behavior/elasticity to create a product line that not only meets customer demand, but has given Ford the competitive edge in the auto industry.
They are called the “Big Three” of the automotive industry; Ford, General Motors, and Chrysler. While GM and Chrysler flounder financially, Ford continues on a progressively successful road. This is based on smart managerial decision making processes and creative marketing techniques. Consumers are voting with their money and in an unstable economy, Ford has quickly become the vehicle of the people, while the other two fight to survive. Ford has decoded the key of elasticity and consumer behavior to again become a formidable competitor in the automobile industry. Ford’s characteristics of reliability, fuel economy, and “world class dependability” have made it easy for consumers to choose Ford (Valdes-Depena 2010). Ford’s strategic decision making has increased
They are called the “Big Three” of the automotive industry; Ford, General Motors, and Chrysler. While GM and Chrysler flounder financially, Ford continues on a progressively successful road. This is based on smart managerial decision making processes and creative marketing techniques. Consumers are voting with their money and in an unstable economy, Ford has quickly become the vehicle of the people, while the other two fight to survive. Ford has decoded the key of elasticity and consumer behavior to again become a formidable competitor in the automobile industry. Ford’s characteristics of reliability, fuel economy, and “world class dependability” have made it easy for consumers to choose Ford (Valdes-Depena 2010). Ford’s strategic decision making has increased
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