Mazda Motor Corporation: Company Profile And Market Analysis

Mazda’s History and Global Operations

Discuss about the Market Analysis of Mazda Motor Corporation.

The Mazda Motor Corporation, commonly known as Mazda is a Japanese automaker industry based in Fuchu, Aki District in Japan. In 2015, the multinational company was assessed to be the fifteenth highest automaker in the world by its production. Jujiro Matsuda founded the company in the year 1920 and Mazda now ranges in its production of automobiles, light trucks and engines. The company has about more than 1,202,450 units and operates worldwide (Mazda.com, 2018). Mazda had come into operation with its first three wheeled trucks. The company evolved from being a machine tools manufacturing industry to vehicles with its introduction of the Mazda-Go auto rickshaw. It is equally engaged in Corporate Social responsibilities and has initiated the production of bio cars and other environmental concerning projects that has enhanced its position in the market.

In Singapore Mazda is one of the highest selling car brand. There has been increase of sales of 4% in the domestic market (Mazda.com.sg, 2018). The car company based in Asia has been giving special importance to the Singaporean market. This is mainly because the very diverse range of customer base in Singapore, and reaching a good volume of sales in Singapore essentially reflects the company’s growth in overall situation. Singapore is also is one of the most expensive countries in terms of owning a vehicle and arranging fuel. There are various regulations in the country including “Certificate of Entitlement (COE)”, and “Electronic Road Pricing”, which make it expensive to own a car in the country. However Mazda has steadily maintained its sales.

In the year 2015, Mazda has been reported to have produced nearly 1.5 million vehicles for selling them globally (Mazda.com, 2018). Mazda is the only brand that manufactures cars with the Wankel engine. The company is also pronounced in sponsoring for several sports teams both within the nation and abroad and adopts various campaigns and other measures to be recognized and preferred by the majority of the population. An analysis of the market structure would enable to depict the position of the company in the world as a whole.

The SWOT analysis of Mazda Motor Corporation helps to evaluate its position in the market that has been discussed below-

Strengths-

• The product features of Mazda have been very strong. With the best in class engine and the ease of use of the vehicles, Mazda has been widely preferred by people in Singapore (AutoIndustriya.com, 2018).
• The production efficiency and discipline in workplace of the industry has been very pleasing. Mazda works with its core values of hard work, innovation and streamlining costs that serve to be its strengths.
• With the productions along CSR activities such as the Bio cars and Skyactiv, Mazda has been engaging in optimal use of resources (Chen, Kim & Yamaguchi, 2014).
• Mazda functions with the prior concern of innovation and has been continuously producing vehicles in accordance to greater innovations that has been its major strength throughout.
• In 2016 Mazda has delivered a record profit in Singapore for the third consecutive time. The brand had sold 1.53 million cars in Singapore which is a big number. (Ju-Len, 2017)
• This proves that one of the strength of Mazda in Singapore is its increasing profits and large number of sales which is also increasing by the years.

Weaknesses-

• Mazda has not been able to establish itself as a major global player in the industry.
• The company has not been able to face any major success in recent times and has recalled about 2.3 million vehicles for problems and issues (Tsuneoka, 2018). Thus, many customers are switching to the other brands.
• The retention rate of Mazda is also significantly low. It has been found that out of every three customers of Mazda, two of them have switched to other brand.
• The marketing strategy of Mazda is weaker than the other important car companies in Singapore. In Singapore Toyota is doing a great job in terms of marketing and strategy.

Opportunities-

• There is a high demand for high performance SUVs that is an opportunity for Mazda to exploit well and render greater production and sale of its vehicles.
• The company can focus on its retention and repeat business opportunities, and capitalize in accordance to it.
• An improvement in roads and highways increases the scope for Mazda to introduce bigger cars in the emerging economies. This would bring more customers to the company enriching its overall profits (Semmens, Bras & Guldberg, 2014). Thus, better infrastructure serves to be an opportunity for the company that it can utilise largely.
• Ong Lay Ling who is the managing director of the group “Eurokars group” which is in charge of the brand in Singapore and its distribution has stated that the market share of the brand is presently 8 per cent. This shows an opportunity of steadiness and growth and the company has the opportunity to increase the sales (https://www.businesstimes.com.sg/hub/bt-motoring/mazdas-secret-plans-revealed).

Threats-

• Rising cost of fuel and materials serve to a major threat for the company that can negatively affect its business.
• High competition in the vehicle industry with companies such as Toyota, Honda and others also act as threats for the company.
• Change in preference of the consumers and brand switching is also a major threat for Mazda.
• The cost of maintaining a car in Singapore is relatively costlier than many other countries across Asia. The major reason is the various numbers of regulations and restrictions of owning a car in the country. “Certificate of Entitlement (COE), high custom duties, and road usage charges such as Electronic Road Pricing (ERP)” are some of the regulations that are there. This can reduce the sales of cars in the region.

Mazda Motor Corporation targets individuals who love to stay young and have good abilities to be expressive of their passion and self-confidence. It focuses on the people who love driving and are very passionate about cars. People from the lower middle class, middle class and upper class can afford the brand. In targeting the passionate drivers, Mazda tries to create an emotional engagement of them with the cars. It aims to attract the people from the age group 20 to late 50’s and the car making technology of the company has resulted in attracting 33% more customers that fit into its target physiographic profile (Mazda.com, 2018). The company presently targets the young people who seek sports car, with greater focus to the urban youth and upper middle class (Lobschat et al., 2013).

Mazda in the Singaporean Market

Mazda has been a preferred company by many people, however, tough competition from the companies like Toyota, Honda, Nissan Motors and Hyundai Motors serve to be major threats for the company in the Singaporean market (Maxcy & Silberston, 2017). The company is very much engaging in marketing strategies focussing greatly on promotional events and advertisements that highlight the brand. It has been focusing on digital marketing to increase sales. Auto shopping accounting to 75% is done online (Williamson et al., 2015). Thus, the company has increased its digital budget from 10% to 30%. It has been focussing on psychographics of customers and thus engage the right potential customers in the business. Marketing through social websites and media has also been very beneficial for Mazda to reach to the greater population and thus increase its market. However, promotional activities of the other brands also intervene in the successful operation of Mazda to a significant extent.

The PESTLE analysis of Mazda Motor Corporation discussed below provides the competitive advantage of the company (Acharya, 2014). The factors influencing the business are discussed below

In Singapore the political system is mainly oriented towards one or two party. The People’s Action Party split and the new party was formed known as the Socialist Front. Therefore the two major parties are loggerhead for winning the seats. However because of less number of political opinions there is lesser political risk factors. Therefore there is good possibility for the automobile industry to grow.

Singapore is emphasizing on vehicle emissions, fuel efficiency and safety means that Mazda has been focussing on for its innovations (Gokhberg & Meissner, 2013). Political stability of the nations affect the automobile industry as the government imposes taxes and other policies on their operation. In Singapore there are various permissions and registrations that are needed to be made in order to buy and run a vehicle.

Growth in economy always facilitates industries of all types. It can earn huge revenue and also increase the number of investors. This would result to a rapid growth of the company. Prices of the related commodities such as fuel also influence the company in its operational countries. Increase in price of them reduces the sale of the vehicles affecting the automobile industry extensively.

Singapore has a democratic free market economy. The development rate is very high as well. Among the ASEAN countries the per capita income is high. The competitive advantage within the country in the automobile sector is promising. The advantageous geographic location of the country makes it better for the country to grow even in slow times. The government plays active role by bringing investments, and this endeavour started from the 1960. Sometimes there is the problem of labour shortage, however supply of cheap labour from adjoining regions makes the country one of the preferred destinations of automobile industry.

The ministry of community development had been working since its formation, along with several voluntary organisations and the “Singapore Council of Social Services” to transform the social inequality into a stable structure. This has resulted in lessening of poverty rates and more number of people coming into the prosperous economic zone. The society of the country is highly diversified with people from various nationalities staying in the country. This makes it oone of the preferred destination of companies to introduce their product and understand its impact from various demographic segments.

Mazda’s Target Market and Marketing Strategies

Motorcar industry is highly in demand in Singapore and other countries where Mazda sells its vehicles. Thus, it gets the ready market in these places (Wilks & Wright 2016). Developed economies are able to afford the vehicles, however some countries that have a relatively low class population fail to afford the cars. Thus, Mazda focuses in investing in the developed countries with greater concern. Moreover, investors are also more in developed economies. The company also focuses on the priority of the customers differing in their preferences either to buy cheap cars or classy ones. Thus, it affects the business.

Technological advancement forces the automobile industries to innovate on regular basis. The car industries are engaging in production of eco-friendly vehicles that would not harm the environment. With technology, they are set to production with use of alternate energy sources such as solar power, fuel cell and others (Burns, 2013). Mazda has been also involved in such processes. The advancement in technology in the countries has also made the production process of Mazda and the other companies in the industry to initiate smooth, effective and faster production.

Starting from 1970’s the government of Singapore started showing interest in increasing labour skills and technological knowledge of the country. The doors were opened to private foreign investment through FDI and the country started encouraging the industries which are technologically sophisticated. This not only increased the possibility of heavy industrial sectors to expand but also increased the sales of technologically advanced goods including automobile in the following years. 1980’s saw increased investment on products like electronics, electrical, computers and computer peripherals and automotive components and peripherals.  

Legal obligations such as policies relating to environmental protection and others affect automobile industry. Mazda has been abiding by the legal rules and regulations of the countries in which it is operational.

In Singapore the government has set up the National Environmental Agency of Singapore under the “Environment Protection and Management Regulations (Vehicular Emissions)” which regulates the various emission standards. Apart from that the legislations that protect the consumer rights are “Sale of Goods Act” and the “Consumer Protection Act”. The companies have to pay Income Tax and the GST or Goods and Services Tax.

A harmful effect to the environment and nature through production processes and the final product of any industry degrades its fame and repute enormously. Mazda has been producing vehicles with greater concern to preserve the environment that has glorified its innovation process. Thus, it has been working with a significant concern for the environment that has led to its greater publicity and production.

In Singapore “The Ministry of Environment” and Anti-Pollution department strictly maintains environmental standards. Emission by the automobiles is one of the main source of air pollution in Singapore hence the government maintains strict standards. As previously mentioned “the National Environmental Agency of Singapore under the “Environment Protection and Management Regulations (Vehicular Emissions)” keeps track on the emission standard by the vehicles.

Mazda has been engaged more into a marketing process that was more company-centric. The company had less than 2% share of the global auto-sales and has faced various difficulties in the market (Mazda.com, 2018). The company relied more on TV advertising with no concern in digital investment. The company stressed on demographics more than psychographics that disabled the company to connect with the passionate customers. Mazda has been found in various events as sponsors to increase its marketing communications. However, it lacked banner ads and social media forecasting. It was only after the Great Recession hit that the company realised the need to strategise its marketing activities to be more pronounced in the economies (Lee & Berente, 2013).

Competitive Analysis: SWOT Analysis

The promotional objectives of the Mazda Motor Corporation are:

• To establish global company image that is yet to attain
• To become the leading automobile seller in Singapore
• To increase the sales by 10%
• To increase the brand awareness
• Target Market:

The target market of Mazda has been quite good compared to its operations. However, the company can target the women population and innovate with concern to their tastes. Women nowadays are engaging more into driving. Thus, production in accordance to their taste can enrich the company profits.

The promotional tools to widen the market of Mazda are:

• Digital technology- the use of mobile technology and internet is very essential for any industry to feature itself to the greater population (Amirkhanpour, Vrontis & Thrassou, 2014). The company can use online and e-mail marketing as promotional campaigns and communicate with the potential customers. Through the website information, it can promote the company and make the customers informed.
• Public relation tools- the company can employ PR techniques such as press releases, newsletters, reports and press conferences to make the brand more pronounced (Coombs & Holladay, 2013). The company can form alliance with the local papers in the region of its operations and also build relationships with TV channels to portray its business activities to the people in order to deviate from negative publicities and greater transparency in business operations.
• Events- the company has promotional opportunity by engaging in various events and community activities to gain the favour of the people in general (Tafesse, 2016). It must show its presence in local events, in malls, non-profit events, to have a goodwill that accelerates business.
• Print media- the printing and distribution of company magazines, catalogues, fliers and brochures of the brand would enable it to reach to the customers. Thus, it serves to be a promotional tool that is effective both in individual regions as well as in the global sphere.
• Billboards- LCD screens in the major cities and malls around the world and the mounting billboards advertising the new vehicles that the company produces is also effective in reaching the customers. It targets the potential customers and attracts them towards the vehicles to a good extent.

All these tools would help Mazda to expand the business with greater innovation and use of technologies. The promotional tools would help the company to meet its objectives through the SMART criteria (Miyakawa, 2017). It would help it to target the developing and developed economies and let it achieve its goals within a short span of time. It would also aid to establish its brand identity and thus proceed with all the strategies in a way so that its objectives are met.

In the present market situation where digitalisation has been rapidly spreading, media serves to be a very effective tool that helps to activate the promotional tools (Gao, Hensley & Zielke, 2014). The social media is a huge platform to reach the audience at large. Active engagement in social media sites such as face book, twitter, YouTube and others help the customers to have enough information about the vehicles that the company is going to or have produced. It also informs them about the events that the company is going to be a part of. Blogs on the new models declaring the unique features of the vehicles on social sites attract customers enormously. Thus, it serves to be a very effective marketing and promotional tool. The media also allow the company to have an all time access to customers and provide them with more information regarding the models or solve their queries, if any.

Mazda Motors can develop attractive media adverts to be distributed to regional media houses or newspapers. It can also introduce adverts that would be circulated globally. For example, with the introduction of the SUVs that is high in demand, Mazda can spread the message of travelling long distances that plays a very essential part and render a lifetime experience for every individual (Thoms & Holden, 2016). It also highlights the need to travel in groups that serves to be the rationale for selecting the brand. The emotional connect that Mazda stresses on enriches experience of the drivers and the people using the brand. Thus, spreading an emotional value to every customer that chooses Mazda is the core creative concept that every promotional tool would emphasize.

Main activities

MONTHS

1

2

3

4

5

6

7

8

9

10

11

12

Planning

·

·

Pitching in the ideas

·

·

Acceptance of the ideas

·

·

·

Cost evaluation

·

·

·

·

Agency selection

·

·

·

·

·

·

Creating Marketing Mix

·

·

·

·

Budget distribution

Final implementation of the plan

Table 1: Gantt chart

Promotional Tools	Costs/month ($)	Total ($) (12 months)
Digital technology	1000	12000
PR Tools	500	6000
Events	800	9600
Print Media	500	6000
Billboards	600	7200
	40,800

Table 2: Cost Breakdown Chart

In the proper promotional activities, the company must check whether all its campaigns are properly circulated without harming the sentiments of the people. It must not contain any thing that could lead to negative publicity (Rothaermel, 2015). It must also well research the market situation before promotion and deviate from wrong investments. Proper market research would enable the Mazda to evolve in the market in a systematic and effective way.

Analyzing the Singaporean Market: PESTLE Analysis

Conclusion:

From the entire analysis of the company, it can be concluded that Mazda Motor Corporation has the potential to evolve as a leading automobile industry in the world. With all the products it has launched and aims to launch in the future, the company works in accordance with the demands of the people. It also aims to proceed with a greater concern towards the society and the environment and has the ability to innovate more and proceed with its business. With effective measures and promotional tools, the company would be able to reach the heights and get the global appeal that it is yet to attain.

References:

Acharya, C. (2014). Study on Macro Analysis of Automobile Industry with special focus on Four Wheeler Segment.

Amirkhanpour, M., Vrontis, D., & Thrassou, A. (2014). Mobile marketing: a contemporary strategic perspective. International Journal of Technology Marketing 5, 9(3), 252-269.

AutoIndustriya.com. (2018). Mazda’s Vision Coupe concept proves that simplicity is sexy – Auto Industry News. [online] Available at: https://www.autoindustriya.com/auto-industry-news/mazda-s-vision-coupe-concept-proves-that-simplicity-is-sexy.html [Accessed 9 Apr. 2018].

Burns, L. D. (2013). Sustainable mobility: a vision of our transport future. Nature, 497(7448), 181.

Chen, W. M., Kim, H., & Yamaguchi, H. (2014). Renewable energy in eastern Asia: Renewable energy policy review and comparative SWOT analysis for promoting renewable energy in Japan, South Korea, and Taiwan. Energy Policy, 74, 319-329.

Coombs, W. T., & Holladay, S. J. (2013). It’s not just PR: Public relations in society. John Wiley & Sons.

Gao, P., Hensley, R., & Zielke, A. (2014). A road map to the future for the auto industry. McKinsey Quarterly, Oct.

Gokhberg, L., & Meissner, D. (2013). Innovation: superpowered invention. Nature, 501(7467), 313.

Ju-Len, L. (2017). Mazda’s secret plans revealed. The Business Times. Retrieved 19 April 2018, from https://www.businesstimes.com.sg/hub/bt-motoring/mazdas-secret-plans-revealed

Lee, J., & Berente, N. (2013). The era of incremental change in the technology innovation life cycle: An analysis of the automotive emission control industry. Research Policy, 42(8), 1469-1481.

Lobschat, L., Zinnbauer, M. A., Pallas, F., & Joachimsthaler, E. (2013). Why social currency becomes a key driver of a firm’s brand equity–insights from the automotive industry. Long Range Planning, 46(1-2), 125-148.

Maxcy, G., & Silberston, A. (2017). The motor industry (Vol. 5). Taylor & Francis.

Mazda.com. (2018). MAZDA MOTOR CORPORATION GLOBAL WEBSITE. [online] Available at: https://www.mazda.com/ [Accessed 9 Apr. 2018].

Mazda.com.sg. (2018). Cars | Mazda Singapore. Mazda.com.sg. Retrieved 19 April 2018, from https://www.mazda.com.sg/cars/

Miyakawa, Y. (2017). The transformation of the Japanese motor vehicle industry and its role in the world: industrial restructuring and technical evolution. In Restructuring the Global Automobile Industry (pp. 88-113). Routledge.

Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.

Semmens, J., Bras, B., & Guldberg, T. (2014). Vehicle manufacturing water use and consumption: an analysis based on data in automotive manufacturers’ sustainability reports. The International Journal of Life Cycle Assessment, 19(1), 246-256.

Tafesse, W. (2016). Conceptualization of brand experience in an event marketing context. Journal of Promotion Management, 22(1), 34-48.

Thoms, D., & Holden, L. (2016). The motor car and popular culture in the twentieth century. Routledge.

Tsuneoka, C. (2018). Mazda to Recall 2.3 Million Vehicles. [online] WSJ. Available at: https://www.wsj.com/articles/mazda-to-recall-2-3-million-vehicles-1472713300 [Accessed 9 Apr. 2018].

Wilks, S., & Wright, M. (Eds.). (2016). The promotion and regulation of industry in Japan. Springer.

Williamson, D., Cooke, P., Jenkins, W., & Moreton, K. M. (2013). Strategic management and business analysis. Routledge.