Monday, November 26, 2007

Ford Pinto - The barbeque that seats four


Marketing classes have helped me look at things a little differently this year, and one of the main themes running through all the courses this year are to look at what effect any major decision a company has to make will have on its long term brand image.
A story I heard in one class this week really drove home the importance of having someone make sure that any decision made keeps that long term brand image in mind.

This may not be entirely accurate but I looked this up and for the most part the general story is fairly accurate. In the late 60s the car manufacturer Ford sold a model of car called the Pinto. It was found out after 11million units of production that the Pinto had a problem... a fairly major problem.
It seems that due to a fault in the way the car was designed when it was impacted form the rear...it burst into a ball of fire on wheels, usually killing or chargrilling those inside.

The Ford board of directors faced a costly recall of all 11million units to repair this fault and was like to cost them in the region of $150m to sort out.
HOWEVER... the geniuses on the board came up with a much better decision, it was estimated that although the fault would probably kill a FEW people, the lawsuits were more than likely going to be in the well below the $100m region, so pretty logical, rational and profitable decision eh.

Well this information was leaked (click on the pic) and when the public caught wind of this it did massive amounts of damage to the Ford brand image and caused many people who were loyal to the brand switch to competitors next time they bought a car rather than stay with the company responsible for "the barbecue that seats four"
One good example of what happens when you lets Finance people steer the ship!
A good comparative example to a brand is a person, you build up a relationship with them and have certain ways you view them, and then you find out that your friend/acquaintance was willing to kill you... your opinion of them may change...

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