Assignment 3 - Marketing Strategy PDF

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Assignment 3: Marketing strategy...

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MKT10007 – Fundamentals of Marketing Assignment 3: Marketing Strategy Megan Gibb 101339886 Learning Group13 Anna Campbell 9th September 2019

Executive Summary

Mazda is a Japan-based company involved in the manufacture and distribution of parts and vehicles. The company operates through four business segments, including, Japan, America, Europe, and Australia (The financial times 2019). The purpose of this report is to develop a marketing strategy for Mazda, and how the business plans to encourage consumers to purchase their products. It will help gain a greater appreciation of how Mazda operate, and the role that marketing plays in the automotive industry. There are three main sections in the report including; the marketplace and influencing factors, recommendations for additional market research, and consumer segmentation framework. Section one gains an understanding of the marketplace in which the automotive industry operates, and the factors that influence Mazda. The research in this report draws our attention to several findings of Mazda current market and the positioning of the Mazda CX-5. Mazda brand focus is to “Celebrate driving” and will continue to offer cars to consumers that are sustainable with the earth and society. Mazda is known for its family-friendly vehicles and can target a wide range of consumers with their current vehicles on offer. Mazda can identify customers with the right psychographics through segmentation and then target them across the internet. Include a storytelling video, where they upgrade from one Mazda to the next through the different stages of a consumer’s life. Mazda could explore additional marketing research to gain a further understanding of its consumers and competitors valuable business trends that they have not even thought about tapping into.

Table of Contents

Executive Summary…………………………………………………………………………1 Introduction…………………………………………………………………………………..2 Section 1: The Marketplace and Influencing Factors ………………….………………..3 Industry Overview …………… …………………………………………………….4 Key Competitors………….………………………………………………………….5 Other factors influencing the Industry …………………………………………….6 Section 2: Recommendations for additional market research.....………………………7 Key question & Why ..………………………………………………………………8 Methodology & Justification………………………………………………………..9 Section 3: Segmentation Framework…………………………………………………….10 Consumer Characteristics………………………………………………………...11 Segmentation Framework………………………………………………………..12 Segment Profiles…………………………………………………………………..13 Segment Attractiveness Profiles…………………………………………………14 Conclusion………………………………………………………………………………….15 Reference List………………………………………………………………………………16

Introduction

Mazda was founded in Japan in 1920 and launched its first passenger car in 1960 (History Channel 2019). Today Mazda is involved in the manufacture and distribution of parts and vehicles all over the world. The purpose of this report is to develop a marketing strategy for Mazda, and how the business plans to encourage consumers to purchase their vehicles and products. The main product that has been focused on throughout this report is the Mazda CX-5. There are three main sections explained in the report including; the marketplace and influencing factors, recommendations for additional market research, and consumer segmentation framework.

SECTION 1: The Marketplace & Influencing Factors

Industry Overview: Mazda Motor Corporation is an automotive manufacturer of cars, trucks, and commercial vehicles. They also manufacture gasoline reciprocating engines, diesel engines, rotary engines, as well as automatic and manual transmission vehicles (Marketline 2019). Operating in Japan, Mazda has recently been ranked 136 out of the top 2000 companies worldwide. In 2019, the company generated a total revenue of $3,077,049,000 including sales of vehicles, parts, finance and other revenue (Marketline 2019). The automotive industry is projected to have an annual growth of over 4.5%, bolstered by improving economic conditions.

VEHICLES

Aerospace

Automotive

Passenger

Commercial

4WD

Watercraf

Mini Vans

Pickup Trucks

SUVs

Figure: Industry Tree Diagram for Mazda Motor Corporation

Sedan

Sports Cars

Recent Trends that Impact the automotive Industry:

The automotive industry needs to be prepared to evolve rapidly as the traditional software development approach no longer fits into the industry. Over the next few years, cars will become a computer on wheels. Over the next 15 years, the amount of software in them is expected to triple. Manufacturers need to be able to address customer’s needs as quickly as they are evolving (Andriiuk 2019) prototype vehicles Cutting Edge Production: The software in car development can double the speed of new model manufacturing. For each model, BMW uses virtual validation and visual simulations to eliminate the need to produce prototype vehicles. Vehicle production can boost manufacturing productivity by 40 percent using artificial intelligence (Andriiuk 2019). This is a recommendation that Mazda needs to investigate as part of their marketing strategy. Environmental Friendliness: The popularity of electric vehicles and hybrid vehicles is increasing. As of today, there are more than 5.6 million electronic vehicles on the road. By the year 2030, it is estimated that fifty-five percent of all cars sold in Europe will be fully electric (Andriiuk 2019).

Key Competitors: 1. TOYOTA Toyota’s main incentive growth strategy is market penetration. This strategy focuses on attracting more customers to their current market for continued business growth. It offers products to every market including, SUVs, luxury vehicles, minivans, commercial vehicles and a lot more. It enables the company to maximise sales volumes, which ensures profits despite their low selling prices (Thompson 2017). Toyota already has a global presence, as such Toyota continues to grow by entering new markets as the economy and trends shift. This, in turn, continues to maximise the company’s global market presence (Thompson 2017). In 2019 Mazda and Toyota teamed up to make cars better. The plan is to enhance and complement each other’s products and technologies, to meet customer needs all around the world (Spencer Motors 2019). 2. HYUNDAI Hyundai is one of the largest automotive manufacturers in the world. They specialise in the production and sale of passenger cars, SUVs, buses and trucks. Hyundai head office is in South Korea and has a manufacturing presence in the US, China, India, Czech Republic, Turkey, Brazil, and Russia (Marketline 2019). Hyundai keys strategies include focusing on satisfying consumer needs through improvements in design, service, and product performance (Bhasin 2018). Hyundai uses psychographic and behavioural segmentation variables to segment the market in homogeneous groups. It is about to enter the premium segment through offerings in the new showroom set up i.e. Hyundai Motorstudio (Bhasin 2018). Mazda is currently in direct competition with Hyundai for the smaller vehicles but

insists they will not drop the price even though it would help their profitability (Car Sales 2018).

Table: Competitor Analysis P

Competitor 1

Competitor 2

Competitor 3

Brand + Sub-Brand

Mazda CX-5

Toyota RAV4

Hyundai Tucson

Brand Positioning

Zoom Zoom

Oh, what a feeling

Product specifications Place Price

2.5L Engine, 58 Litres, 7.4L / 100km, 6 speed manual transmission, petrol and diesel Mazda Dealership $41,070

2.5L Engine, 60 Litres, 8.5L / 100km, 6 speed manual or auto transmission, petrol or diesel, 4x4 Toyota Dealership $38,280

Promotion

Tv advertising, radio, magazines, show rooms, dealerships, North Melbourne Football club

Tv advertising, radio, magazines, show rooms, dealerships

Drive your way 2L Engine, 8 speed auto, 62 Litres, 6.4L / 100km, petrol or diesel, All wheel drive Hyundai Dealership $37,090 Tv advertising, radio, magazines, show rooms, dealerships, FIFA world cup

Advantages

Excellent engine performance, plenty of cargo and family space, Luxurious Interior, Excellent Safety Features and Ratings

Lots of storage, excellent interior, smooth to drive, Excellent safety rating

Top safety scores, Hightech safety features, Great Performance From 2.4 Litre Engine, Excellent value for Price

No Manual Transmission Option, expensive to purchase

RAV4 is slow to respond to accelerator inputs, the 2.5-liter four-cylinder produces just 203 horsepower and 184 pound-feet of torque

The Fuel Economy Could be Better, Poor Rear Visibility, Acceleration is slow and not nearly as good as the upgraded 2.4 litre engine

It's classy, high quality and comfortable.

It can tow and handle some offroad duties

The Tucson offers a better price and more features on the standard base model.

Disadvantages

Other important factors to prospective buyers

Data was current as of Saturday 7th September, 2019 Sources: Mazda (2019), Toyota (2019), Hyundai, (2019).

Other players of importance in the marketplace:

Bosch is one of the top automotive suppliers in the world and plays an important part in the marketplace for the Mazda CX-5. They are responsible for the supply and demand of the original automotive parts for most of the Mazda models. For example, ABS brakes, engine parts, traction control, sensors, and electronics. If this business relationship broke down, it would be detrimental to the production success of the Mazda range (Gelowicz & Stark 2019). The vehicles would no longer meet the safety regulations and ratings in the market. Bosch is playing an increasingly big role in the marketplace by developing new business models, especially regarding new mobility concepts to keep up with the recent trends. Mazda is working with Bosch to utilise their knowledge to add new features onto their range (Taylor 2017). Mazda could leverage off Bosch to gain a further understanding of what other vehicles are doing differently in the market to them and be able to capitalise on this. For example, what parts and products do Lexus use that Mazda could incorporate to make their vehicles better.

Other factors influencing the company:

Economic factors: The automotive industry has a huge impact on the world’s economy. The industry is dependent on

Rising income

the infrastructure of roads and fuel stations. If Australia keeps on investing in more public transit, then consumers will start to buy fewer cars (enotes 2019). Rises in interest rates or economic downturn also reduce car sales. Natural Factors: Car manufacturers found themselves confronted with tough targets to reduce greenhouse gas emissions and fossil fuel, so Mazda developed SkyActiv. Mazda embraced an affordable fix that has reduced the fuel consumption of Mazda’s product range by 30 percent (car sales 2011). Technological: Technology has come a long way over the past few years and has really affected the automotive industry and the way we look at vehicles. Artificial intelligence, selfdriving vehicles, and machine learning have a massive role in the future of the automotive industry. More manufacturers are looking at different ways they can incorporate this technology into their vehicles and manufacturing warehouses. Vehicles are becoming Internet devices which can connect to smartphones and take voice commands, changing the user interface. If Mazda doesn’t invest in these new trends, they will be left behind (Utermohlen 2018)

Urbanization

SECTION 2: Recommendations for additional market research

This section will identify any additional information that would be helpful for the purchase of the Mazda CX-5 Vehicle. Some questions that could be helpful to consider are: 1. Why would you choose a Mazda CX-5 over other SUVs? You want to find out what makes your car better than others, and what avenues you could explore to make the Mazda CX-5 the market leader. 2. Is the social and cultural aspect relevant? Mazda can learn how to engage with these consumers and leverage the power of what they’re saying about their brand amongst others in social spaces. 3. Do you offer finance options for your vehicles? With so many retailers offering buy now, pay later options Mazda can find alternative methods of payments for their vehicles to increase profitability.

Question 2 will provide Mazda’s marketing team with a good understanding of how they can engage with their consumers through different marketing platforms other than just TV or radio advertising. It will provide a good understanding of what consumers are really saying about the Mazda brand (Buss 2018). Amazon currently has more than three million Mazda owners in their database with an average rating of five stars. Consumers go to Google or Amazon to see what the impressions of vehicles are before purchasing. Investing in a Google or Amazon hub, Mazda will be able to leverage off what is being said to make its brand positioning better, which is a huge advantage in this industry.

If you want to be consumer-led, you need to be talking to the individuals. One way of doing this is through Kantar research. Focusing on current Mazda CX-5 owners, previous owners, and potential owners. You will need to target a younger, middle and older consumer base with different education and backgrounds. Kantar can also assist in exploring different elements of your business that makes you different from your competitors, it helps to grow your current brand (Buss 2018).

Example Sales satisfaction Table - Kantar: Marketing survey (Kantar 2019)

SECTION 3: Consumer Segmentation

The main function of the segmentation is for Mazda to design a selection of vehicles that can be sold to a range of different consumers. In the below segmentation table, there are three types: psychographic, behavioural, and demographic. Table: Consumer Characteristics Type of Characteristic Segmentation

Lifestyle and personality

Psychographic

Buying something on impulse

Behavioural

Focused on people

Demographic

Description Targeting consumers based on values and lifestyle Target customers based on purchase behaviours Target customers based on gender, social class, age and income

Why is this characteristic important to Mazda Mazda want consumers to love driving and love the brand they drive - Design a vehicle based on each life cycle you go through Database driven marketing that tracks consumer behaviour to determine his or her interests on current vehicles This is important to design a vehicle that targets a range of different audiences. For example, Mazda CX-5

Table: Consumer Segmentation – Psychographic for Mazda CX-5 Segments

Interests

Lifestyle

Motivates for purchase

Environmentally aware

Medium

High - need to be hybrid or electric vehicles

Medium-High

High - Impact vehicle has on environment High - Larger more comfortable cars for family

Family needs

Medium – Needs to be in the family budget

High - Vehicle for particular purpose

Medium - Social activity

Off Roaders

low-medium

To help Mazda engage with the right potential consumers, they leverage off an Oracle data management platform. This helps them to identify specific customers with the right psychographics and then target them across the web, including platforms such as Instagram

(Tode 2017). Since 2015, Mazda has attracted 33% more customers that fit its desired psychographic profile. These new tools are helping Mazda to tell a story to their consumers rather than just advertising through simple ads. They are taking consumers on a journey from one part of their life to the other. For example, first purchasing a Mazda 2 living a single life, to upgrading to a Mazda CX-5 when you have a family (Tode 2017). Measurable

Accessible The expected The size and regular usage purchasing of its car owner power. Found isn't directly through related to marketing location; research like therefore, each Surveys consumer's accessibility depends on other factors Evaluation

Substantial Mazda assume there is an active market for all levels of car users – Hence the reason you need a different model to target different consumers

Actionable Differentiable Mazda CX-5 Each segment has a can be customer with effectively different requirements. marketed to Mazda needs to market specific as to why their consumers. For products are better example, than other vehicles. highlighting its For example, how fuel fuel efficiency efficient does a vehicle and family need to be to purchase vehicles

Segment Profiles Description

Purchase Behaviour

Brand Preference

Environmentally Friendly

Buyer will research environmentally friendly vehicles to purchase. Avoiding any vehicles that will harm the environment This group prefers vehicles like Eco-Car Vehicles and ecofriendly features through the interior The Mazda CX-5 offers fuel efficiency

Family Needs

Off roaders

More likely to purchase a vehicle dependent on their family situation at the time. For example, they need to upgrade to a bigger vehicle

Will normally purchase a vehicle to be a part of a social situation with friends or family

SUV, Sedan or 7-seater vehicles that suite their family lifestyle. Prefer reliable, safety ratings and fuel-efficient vehicles

Most consumers will purchase based on other people influence or what they feel is the best brand from past experiences - For example Toyota or Ford being 4x4 and big brand off road vehicles

Segment Attractiveness Profiles Size and Growth  

Environmentally Friendly

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Small segment Global hybrid car market to grow 16.6% over period of 2018-2024. Mazda gasolineelectric technology helps save fuel compared to naturally aspirated engine

Structural Attractiveness  

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Family Needs



Large segment Lots of potential for growth Australia favourite medium size SUV

  

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Off Road

Small Segment Mazda are not due to release any further off-road vehicles in the next 2 years 

Company objectives and resources

Medium competitor in the current market – Could use improvement SKYACTIV reflects Mazda's aim to provide high levels of outstanding environmental and safety performance in its vehicles Idling stop systems save fuel by automatically shutting down the engine Brake energy regeneration systems convert a vehicle's kinetic energy into electricity as the car decelerate



Offering 4 different SUVs ranging from 5 seaters up to 7 seaters Awarded family car of the year in 2018 at driver’s choice awards The CX-5 has received more than 100 awards across the world (Marketline 2019)



Only has 2 vehicles available for off road use offering 4x4 capability compared to other competitors in the market – could use improvement in this area The likes of Ford, Toyota and Isuzu are biggest competitors

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It has a strong distribution network that includes services of dealers and suppliers. Economically friendly vehicles are displaye...