"If I asked my customers what they want, they simply would have said a faster horse.

" "People can have the Model T in any color-so long as it's black." -Henry Ford. Henry Ford was the founder of Ford Motor Company, today the worlds third largest automobile maker based on worldwide vehicles sale. Often called the Father of mass production, Henry Ford is credited for revolutionising the transportation industry and bringing inexpensive products to the mass due to his breakthroughs in mass production. In 1903, Ford proclaimed, "I will build a car for the great multitude." In October 1908, he did so, offering the famous Model T for $950. In the Model T's nineteen years of production, its price dipped as low as $280. Nearly 15,500,000 were sold in the United States alone. By 1918, half of the cars in America were Model Ts. The simple to use and easy to repair car was available at extremely low prices which propelled its success. The car was only available in black and Ford did not offer any alternative colour or model for 19 years, the Model A being launched in 1927. Henry Ford had completely shaken the transportation industry with his entire product line boasting of only one car with no variations. Ford ignored the differences in the segments of consumers, and chooses to aim a single product at all segments (the whole market). At this time Ford was the only car manufacturer that produced an affordable car for the people of the middle class, which resulted in mass consumption. To meet the growing demand for the Model T, the company opened a large factory at Highland Park, Michigan, in 1910. Here, Henry Ford combined precision manufacturing, standardized and interchangeable parts, a division of labor, and, in 1913, a continuous moving assembly line. Workers remained in place, adding one component to each automobile as it moved past them on the line. Delivery of parts by conveyor belt to the workers was carefully timed to keep the assembly line moving smoothly and efficiently. The introduction of the moving assembly line revolutionized automobile production by significantly reducing assembly time per vehicle, thus lowering costs. Ford's production of Model Ts made his company the largest automobile manufacturer in the world. Initially it took 14 hours to assemble a Model T car. By improving his mass production methods, Ford reduced this to 1 hour 33 minutes. Today, market segmentation and a host of products are usually available for every kind of product. However single products or small product lines have their pros too. One of them is efficiency, which can be illustrated by the Tmodel example. It helps developing the product rather than splitting efforts across multiple channels. The other important pro is focus. Without all the distractions of building, managing and selling multiple products, the finer

details of the main offering can be honed, making it much better than any others in the market. The question arises; can limited products be profitable for a company? The answer is yes, especially when targeted to average consumers and the following illustrations depict that. A similar model was followed by Maruti Suzuki in India decades later in the 1980s when Maruti Suzuki launched their version of the Peoples car, Maruti 800. It was the best selling car in India till the year 2004, enjoying domination for nearly two decades in the industry. It has sold about 25 lakh units over this period. India's protected market meant that until the early eighties Indians had essentially three model choices in terms of automobiles: the Morris Oxford derived Hindustan Ambassador, the Premier Padmini and the Gazel. With all three products obsolete, quality construction more of an afterthought and attributes like power, safety and comfort being last on a manufacturer's to-dolist, the Indian automobile industry was going through what might be termed its anthracite period in history. The Maruti 800, in 1983, marked the introduction of the modern automobile into the Indian passenger car market. People were awed by Japanese reliability, ease of operation, refinement and fuel efficiency - attributes that the small Indian passenger car industry, in 1983, was unable to provide. Till the year 1999 Maruti Suzuki had only three products to offer, the Maruti 800,Omni and the Gypsy. With a product line consisting of only three cars, Maruti targeted the first time car buyers and because of its low prices it made an excellent entry-level car. Some of the other reasons for the success of the 800 were the fact that the Maruti 800 was simple and basic and yet sophisticated enough to meet the requirements of safety and comfort. Due to these large sales volumes, today Maruti has the largest network of dealers in India, which means that its new products has the widest reach of any car manufacturer today. Another company we can take into consideration is Microsoft and its product Windows, a graphical user interface operating system. The first version of Windows was announced in November 1983, when Apple largely dominated the market. By introducing a product, which was available as a cheaper alternative to Apples Macintosh, Windows took a large portion of the market. Windows was only available in one variation without any hardware limitations like other rivals, thus making it popular amongst average consumers who were new to the computing world. Because, it was a single product and cheaper than the other competitive products, it became very successful especially after the launch of its third version, Windows 3.0 in 1990. The marketing strategy deployed by Microsoft here was affordability. Windows was more affordable and it was almost as feature rich as Apples Macintosh. By keeping the product line small and simple, it lessened consumer confusion and enabled people to buy Windows. As they used it for a number of years,

they got used to the interface and started buying its newest versions instead of trying out other alternatives. Similar to the strategy adopted by Ford for Model T, Microsoft offered only one product at a time, which made it the unrivaled leader in the Personal computers industry. Today, Microsoft has about 78% of the market share (statistic by W3Counter). It is difficult to imagine Microsoft would have had such success in the market if it sold many similar products at once, as it would cause confusion amongst the customers who were unaware of the prospect of the product. The other major product offered by Microsoft was its suite of applications called Microsoft Office. Till the year 2001, these were the only two products sold by Microsoft. Like Model T by Ford Motors, this completely revolutionised the computer industry and these two products were a major source of profit for the company making it one of the largest companies in the world. To cite a more recent illustration, we can consider the iPod by Apple Inc. Apple launched the iPod in the year 2001. Initially when it was launched, it was available only in one variation and one colour, white. The iPod was hugely successful from the start as it was not only a niche product, but it was also affordable by the average customers. Because Apple had a small product portfolio, it allowed them to concentrate and focus on the iPod largely and hence improve it greatly to suit customer needs. By restricting too many models of it being available it allowed consumers a variation only in space. Due to this strategy, the iPods sales surpassed any other competitors and allowed Apple to earn huge profits. Here also, the model followed is similar to the one followed by Henry Ford for Model T. The number of products offered by Apple was small but the affordability of the iPod with the average consumers of USA made it a market success. Apple followed the same strategy with the launch of the iPhone years later in 2007. The iPhone was only available in one variation unlike other phone manufacturers like Blackberry and Nokia who had more than a dozen models. Despite being a single product, it managed to become a huge success even though it was highly priced. However, it was seen that the average consumers were willing to spend more for simplicity and better functionality. Thus today the iPhone earns about 77% of the entire smartphone market profits even though it ships only 6% of all mobile devices. Companies like Samsung and HTC have a much larger product portfolio but their profits are lower than that of Apple. In the year 2010, Apple launched the iPad a tablet computing device. Once again, the iPad was offered only in one variation and is regarded as one of the most successful consumer products in history. Today Apple is the biggest company in the world by market capitalisation. It has a very small product line compared to the other technological companies consisting of the Macintosh (Personal Computer), the iPod(portable music player), the iPhone (smartphone) and the iPad(tablet).

Another company known for having huge success with a limited product line is Crocs Inc. Crocs is a shoe manufacturing company, which produces only one kind of trademark shoes. Unlike other manufacturers, Crocs does not have lots of different designs but instead focuses only on one style. These shoes have brought Crocs Inc. great success with over a 100 million shoes being sold till date. Illycaff SpA, the espresso coffee maker from northern Italy is another example, which shows that limited products can lead to high profitability. It has been based in Trieste, on the Adriatic. This port city is a centre for the coffee trade and it was here, in 1933, that a Hungarian emigrant called Francesco Illy started a coffee trading company.Since then Illy has grown to become perhaps the foremost of all coffee brands. Today it supplies many of the finest restaurants, cafes and hotels all over the globe. It sells just one superlative blend, made up of 100 per cent Arabica beans, the most subtle and aromatic of coffee beans. Others flog many different blends and products. At Illy they concentrate on making sure their single espresso blend is always the finest, while converting more customers to its merits. It is a relatively small competitor beside industry giants like Lavazza or Nestl, but most experts agree that no one matches Illy's coffee for consistency and quality. Another international company is the Economist Group, a British winner. Its principal eponymous title has been published continuously in London since 1843. It was founded to participate in "a severe contest between intelligence, which presses forward, and an unworthy, timid ignorance obstructing our progress". The flagship magazine remains its single key product and has recently climbed to an all-time circulation high of more than 1m copies a week in around 50 countries. Despite a prolonged media recession in recent times, during the past five years the firm has grown operating margins from less than 8 per cent in 2001 to almost 14 per cent in 2005, when profits reached a record 27 million pounds on revenues of 197 million pounds. During that period net assets trebled and earnings per share doubled. Henry Fords Model T and its mass production model has paved a way for companies to use one product to derive huge profits from limited product offerings. However, arguments can be made that consumer diversity is increasing rapidly and firms are seeking differentiate their products relative to competitors. Some people are of the opinion that the this model of Henry Ford where the homogeneous markets were conquered with his mass production of one model of car cannot be successful anymore, mass customisation is the new need. However as seen from the examples above, limited products can be a profitable option for companies, if the target market is average customer.

SIDHESH GANERIWALA
ROLL NO. 273 ROOM NO. 14 SUBJECT: Principles of Marketing
TOPIC: Henry Fords Model of Limited Products can be a profitable option for market segmentation targeted to the average customer. Elucidate the statement with suitable examples.

BIBLIOGRAPHY
Steve Jobs by Walter Isaacson Inside Apple by Adam Lashinsky http://www.just-auto.com/analysis/indias-evergreen-maruti-800_id86229.aspx http://blog.vovici.com/blog/bid/25609/Henry-Ford-on-Market-Research http://www.hfmgv.org/exhibits/hf/ http://www.spartacus.schoolnet.co.uk/USAford.htm http://www.modelt.ca/background.html http://www.microsoft.com/about/companyinformation/visitorcenter/timeline.htm http://www.investopedia.com/financial-edge/1010/Companies-Built-On-A-SingleProduct.aspx#axzz232JGLvON http://www.foreseechange.com/mktseg.htm http://www.telegraph.co.uk/finance/2920588/A-single-product-company-canconquer-the-whole-world.html http://www.readwriteweb.com/start/2011/04/the-pros-and-cons-of-selling-oneproduct.php http://www.edibleapple.com/2009/02/03/why-a-simple-product-line-is-integral-toapples-success/ http://www.macgasm.net/2012/08/07/apples-smartphone-profits-continue-to-takethe-lead-despite-samsung-selling-more-smartphone-units/ http://www.appleinsider.com/articles/12/08/08/apple_takes_over_one_third_us_smar tphone_marketshare_tops_samsung.html