The First Paradigm: Mass Production and Mass Marketing

The move towards mass marketing occurred in the U.S. in the first decade of the previous century. Henry Ford understood that the potential market for a means of transport affordable by the masses was enormous. Prices could be kept down by producing large volumes of identical cars, to take advantage of economies of scale and reduce product costs per unit. Mass production and mass marketing were born. With regard to marketing, Ford assumed that what the customer wanted was an affordable price. He recognised that this approach could lead to a downward spiral of lower costs allowing for lower prices, with the latter leading to greater volumes, which, in turn, would allow for even lower costs. Renown was guaranteed through the popular appeal of innovation in terms of both the production process (assembly line) and the product. However, Henry Ford ignored the drivers of change. He failed to understand that the rules for success were changing and to adapt his marketing strategies to the changes in consumers’ buying behaviour. Consumers were waiting for up-to-date models. He was so convinced of his choices that he persisted in using outdated production and marketing strategies. While other carmakers placed their bets on increasing wages among the population and on a growing interest in cars, Ford restricted his offering to a product for the masses sold at a low price. With this marketing strategy, he could not compete.