Case Study Mazda Motor Corporation Marketing Essay

Mazda Motor Corporation is one of the world’s leading car manufacturers with the total net sales in 2009 reaching a whopping 2,535.9 billion Yen. Mazda Motor Corporation was established in Japan in 1920, under the name, Toyo Cork Kogyo. Initially only dealing with the manufacturing of car parts, they have ventured out to the producing of commercial trucks, eventually proceeding on to the manufacturing of cars, which it is widely known for nowadays. As times passes, Mazda Motor Corporations has since successfully ventured out of Japan, conquering other parts of the world including Mexico, Italy, Thailand just to name a few, as well as establishing Research and Development sites in countries like Germany, China, and the United States of America.

Mazda Motor Corporation mainly cater to the needs of 2 different segments of consumers: Commercial consumers and Non-Commercial Consumers.

Vehicles under the Mazda E-series and Mazda BT-50 cater for commercial purposes. Examples of vehicles that fall under the above categories include pick-ups, lorries and vans which are most commonly used by companies for transporting of goods and materials etc.

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On the other hand, Mazda also cater to non commercial consumers and their vehicles are designed specifically to satisfy 2 groups of consumers: Family & PMET ( Professional, Managers, Executives and Technicians). Models such as Mazda 5 and Mazda 8 are MVPs (Multi Purpose Vehicles) which are well suited for large families while models like Mazda 3 & Mazda 6 are the typical family sedans suitable for smaller families. On the other hand, models like Mazda RX-8 and Mazda MX-5 offer a more sporty look and may seem to appeal more to young working professionals or PMETS. Mazda 2 & Mazda CX-7 are SUVs( Sports Utility Vehicles which are targeted towards sports enthusiasts.

The head office of Mazda Motor Corporation is located at 3-1 Shinchi, Fuchu-Cho, Aki-gun, Hiroshima, with different branches located at various parts of Japan like Osaka, Tokyo, Yamaguchi and many more to allow provide easy accessibility to consumers.

Mazda Motor Corporation has adopted a mixture of B2B (business to business), B2C (business to consumer) business model. The company has a wide range of products to cater to the needs of both commercial and non commercial consumers. By segmenting out their target consumers, Mazda will be able to spread out the risk of doing business should the sales in one market suffer. This strategy will also enable Mazda to reap the benefits of increasing its market share in both the commercial and non commercial segments.

Purchasing Strategies

Mazda Motor Corporation, despite being a car manufacturer, obtains their parts and materials from suppliers. The 3 main suppliers which they obtain essential parts includes: Kanto Yokokai (located in Kanto, Kansai and Tokai regions of Japan) and Nishi Nihon Yokokai (located in Chugoku, Shikoku and Kyushu regions of Japan). Mazda Motor Corporation obtains their necessary materials like plastic from Yoshinkai. However, the engines of all Mazda cars are manufactured by the company itself, instead of obtaining it from suppliers.

Parts for the car like screws and nuts are obtained from multiple suppliers. This allows the company to have a wider variety of choices to choose from since they are not limited to only one supplier. This provides them with flexibility as well as more bargaining power, which will allow them to obtain their necessary materials at the cheapest possible price. However, the materials used in the car manufacturing process are obtained from only one supplier. Though there is only a single supplier for the materials, Mazda Motor Corporation is also able to obtain the materials needed at a suitable price. This is due to the fact that Mazda Motor Corporation has chosen Yoshinkai as their sole supplier for materials. This will allow them to have special benefits since the honour of being the sole supplier of materials is given to Yoshinkai.

A few reasons why Mazda Motor Corporation has decided to buy the materials and parts instead of making it themselves is because of cost advantages, lack of expertise as well as the quality of the supplied items.

If Mazda Motor Corporation, a car manufacturing company, were to venture into the production of their own required parts and materials, the company will not be focused on car manufacturing but on other areas like manufacturing of metal for example. This will be expensive for the company since they would have to spend more money to research on the steps needed to carry this out since there is a lack of knowledge in this area. Even if this research is a success and the company managed to produce the items needed, the quality may not be as good as that of which are obtained from their suppliers, who are more experienced. This may also cause Mazda Motor Corporation to lose their identity as a leading car manufacturer as consumers might be confused as to whether Mazda Motor Corporation is a car manufacturer or a manufacturer of materials and parts.

There are certain areas which Mazda Motor Corporation looks out for while deciding which supplier to purchase their parts and materials for. These areas are quality of the delivered items, time for delivery of the materials and cost of these materials.

All if not most companies operate for one common aim, which is to make profit. Mazda Motor Corporation is no exception. Thus, it is essential for the company to obtain the materials needed at the cheapest price available without compromising the quality of the materials. This will allow their budget to be lowered, which will eventually lead to a higher profit gain as compared to when the company purchase the same materials, with the same quality at a higher price. The time at which the materials are delivered is equally important as well. If the materials ordered are delivered late, this may lead to a delay of production, which may lead to a loss of profit for the company. In worse case scenarios, the company may have to compensate their customers if production is halted because of this delay.

Mazda Motor Corporation also adopts the Make-To-Stock strategy for its operations. This is due to the fact that the company is churning out the same few models of cars in a huge volume. Thus, by adopting this strategy, the company is able to meets its production target and satisfaction of the majority of its customers can be guaranteed. The low manufacturing costs also allows the company to make a profit as well.

However, the company also utilises the Make-To-Order Strategy. This can be seen in the customization option which Mazda Motor Corporation offers to customers who wishes to customize their cars. This provides a wider range of product options to customers and not limiting them to purchasing cars which are already made.

Order Management

Mazda Motor Corporation has showrooms located in its head office as well as in many other regions around the country, be it in Japan, where their main head office is located, or in other countries which Mazda Motor Corporation has ventured into. Interested customers can either walk-in to any of their showrooms, where a sales associate will assist them in choosing a suitable car for them, or an appointment can be made beforehand either through telephone or email. Once the customer has chosen their desired car, an order form will be filled in, which will be entered into their system later on. An invoice will then be issued to the customer. The order will be passed on the head office, where the staff will check with their records to see if there are still stock available. If not, they will check if production for that particular car has been scheduled. Otherwise, a delivery order will be given to the distribution centre where the car will be picked by the staff according to details on the picking list. Transport will be arranged to deliver the car to the selected venue where the customer will collect it. This venue will either be at the warehouse, or the service centre since the showroom may not have enough space to store the cars.

Mazda Motor Corporation, at the moment, only handles sales of its cars at their showroom and not through other channels like email or telephone calls.

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Inventory Management

Mazda Motor Corporation has developed its own inventory management system called the “Mazda Materials Management Planning”, also known as M3P in the auto industry. This system allows the company to have efficient control over its stocks and inventory levels, which in turn will allow the company to have increased efficiency in meeting demands in production level.

Alongside with M3P, Mazda Motor Corporation has also utilised the point of sale system, also known widely as POS, to complement their self produced inventory management system. POS allows the automation of inventory control in a bid to increase the work efficiency of the staff to allow them to obtain all the information required so as to handle customers’ needs without much difficulty. In the long run, the high efficiency of the staff will allow the company to bring in more revenue since the company will have made a name for themselves due to their high work efficiency rate.

M3P also allows the company to have better demand forecast. This will allow the company to predict and plan and schedule order of parts and materials needed so as to continue productions and ensure that there are no unexpected halt to production plans because of insufficient inventory levels. Delivery time can also be further enhanced through the utilisation of this system. In turn, this will help improve satisfaction in customers and allow Mazda Motor Corporation to build up its reputation of having an organized and well-planned system to manage both the company’s as well as the customers’ needs.

Operations Planning

Mazda Motor Corporation carried out long-range operation planning with the assistance of M3P. M3P, when coupled with all the different statistics of inventory management, provides a rather accurate forecast which allows it to handle supply and demand to meet its various needs. This allows the company to have detailed demand forecasts of up to a year, which enables them to have proper planning of their production schedules. This will give the company to have sufficient time to resolve any issues which they might encounter in the areas of outsourcing of their materials, expansion of the company and other various aspects.

With all the above carried out, Materials Requirement Planning (MRP) is also carried out thereafter. Mazda Motor Corporations plans all the different parts of the car which will be produced. This allows the company to have a schedule at which a particular car should be completed, together with all the materials needed and whether there is a need to order these materials should there not be enough in the inventory. By doing so, the company will be able to meet all, if not most of their sales order.

Customer Relationship Management

Like most companies, Mazda Motor Corporation takes great pride in building up a good relationship between customers and the company. The company itself sees a need to have a common understanding with its customers. This is one of the reasons why the company has come up with an approach to ensure customer satisfaction.

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The company believe in providing different appealing products to customers. Quality of the product is also ensured in order to maintain the reputation of one of the leading car manufacturers in Japan. Efficient after-sales service is also provided to make sure that customers are being taken care of even after a purchase has been made. The company believes that by understanding the various needs and wants of their customers, the company will then be able to improve and make changes to better suit the customers’ needs.

Mazda Motor Corporation is also open to comments and suggestions from its customers through its call centre. The call centre handles inquiries, complaints as well as suggestion from its customers. Besides through the call centre, customers are also able to provide their input through the Mazda Motor Corporation website on the “Inquiries” page. The company takes all these input seriously. By doing so, they are able to make changes to keep up with the customers’ needs. This in turn, will allow the customers’ to feel that the company is doing their best to serve the customers and ultimately, allow them to have a good impression of the company. Mazda Motor Corporation will then be able to ensure a never ending flow of customers, which allows more generation of profit for the company.

Purchasing Strategies

Mazda Motor Corporation purchases its parts from multiple suppliers, but only a single supplier for its materials. On the surface, this may not be a problem to the company as of now. However, with only a single supplier for its materials, Mazda may end up being on the losing end in the event if the supplier is to increase price in order to gain more profit, seeing that they are the only sole supplier of the materials.

If such a situation happens, the company will have to raise their budget to accommodate the sudden hike in price, which will in turn reduce their total earnings. In worse cases, if the company is unable to come to terms with their supplier, productions will have to be halted and production schedules will be delayed. This will cause the company to be unable to meet the demands of customers and the company may have to pay a large sum of money as compensation.

A sudden shortage of materials from its suppliers may also cause the company to put their production plans on halt since there are insufficient materials. Time will then be wasted in order to source for another supplier to obtain the necessary materials.

To solve this problem, Mazda Motor Corporation can outsource for a second supplier for its materials. By having a second supplier, the company will have a backup option should they be unable to obtain their materials from one of its suppliers. This will also allow the company to have greater bargaining power to obtain the materials at a lower cost since there are now competitions between the two suppliers.

Order Management

Customer’s purchase of cars in Mazda Motor Corporation is done on-site, which means that all orders are handled in the show rooms of the company. Since no orders can be done online or through phone calls, the company will lose business to its competitors in the auto industry who may have started accepting orders online or via phone calls. This, in the long run, will cause the company to lose its reputable position as one of the leading car manufacturers in Japan and ultimately, reducing profits for the company.

Thus, a solution can be devised to solve this problem. Firstly, the company adopt the idea of e-commerce by having an online order system. This allows customers to make purchases online, anywhere 24/7. With such an approach, the company will be updated with technology trends and yet carry out business at the same time, killing two birds with one stone. A user-friendly e-commerce website can be incorporated into the current website of the company. This will allow the company to have a website with multiple usability. Customers can view available products and if they are interested, make purchases online. With such convenience, customers’ satisfaction is sure to be guaranteed as they are able to buy their desire car through a hassle-free process.

By implementing the above solution, Mazda Motor Corporation will be able to portray themselves as a company that is able to accept changes to satisfy customers’ needs and keep their reputation as one of the leading car manufacturers in Japan.

Inventory Management

As mentioned in earlier parts of the report, Mazda Motor Corporation utilises their own unique inventory system, M3P to handle its inventory. Though this system has been said to aid the company in controlling its inventory levels to meet production demands, it is not entirely perfect.

The reason being, any program, no matter how good it is, will bound to fail at times. Since Mazda Motor Corporation relies heavily on M3P to handle its inventory, there will be major problems should the system were to malfunction at any one point of time. Inventory levels will then not be updated and the company may miscalculate its production schedules. This may cause all productions to be affected. Demands will also not be met and it will affect the entire operations of the company.

Another reason is that inventory levels in the system may not be updated real-time. This is a serious issue to the staff of Mazda Motor Corporation, The staff will not be able to gauge accurately whether there is a need to replenish its stocks since the inventory levels is not accurate. This might then lead to a shortage in supply of stocks, affecting the operation of the company.

One measure which the company can undertake would be to have sufficient safety stock at any one point of time. Thus, if M3P were to fail because of any unexpected errors at any one point of time, there will still be enough safety stocks to provide “temporary relief” if there should be any miscalculations of inventory levels due to the system fault.

Operations Planning

Mazda Motor Corporation, with the help of its inventory management system M3P, plans its operations on a long term basis. This, on the surface may look impressive as it portrays the image that the company is able to do this because of their great foresight. However, though plans may be carried out beforehand, there might be certain unexpected situations that may occur in between. For example, the company may undergo acquisition by other company for commercial purposes. This may result in major changes in operations of the company. Suppliers may not be willing to supply necessary resources to the company, which may affect productions and delivery of goods to customers. Late delivery of goods will not only cause the company to incur additional costs, it will also affect customer relationship and the company’s reputation may also be at risk.

This problem is not difficult to solve. Mazda Motor Corporation can still have long term planning done ahead of time with the forecast predicted through the usage of M3P. However, backup plans should be done alongside with all its future plans and schedules. This will allow the company to have different alternatives when they are faced with an unexpected situation or emergency. The company will thus be able to have well-planned schedules and not worry if any problems will affect its operations since they have backup plans for insurance.

Customer Service Relation

Having good relations with customers is one of the values which Mazda Motor Corporation possesses. This is why the company has set up a call centre with around 50 staff to respond to any calls with questions regarding various issues. An inquiry page has also been set up to allow customers to enter all their queries for an answer online, on the Mazda Motor Corporation homepage. However, there might be certain questions which may be complicated and the staff may take more time to respond to these questions. Though there may be similar questions asked before, not all staff members may be aware of these questions and the solutions to it. Thus, the response time may be reduced greatly and the work speed may not be as efficient as expected. It will also pose a problem should there not be enough staff to entertain queries from customers since there is only 50 staff to handle all this questions.

Thus, besides adding on to the inquiry page on the homepage of Mazda Motor Corporation, the company can also make use of the latest social networking tools. One example would be the use of Facebook. The company interact with customers with this. Customers will also be able to inquire about certain things by posting a comment on the page. This way, if the staffs of Mazda Motor Corporation are unable to provide a response to the customer quickly, there might be other people who will be able to answer these questions. One advantage of this is that customers are able to connect with other customers and not only the company itself. This will allow them to exchange information needed and ease the burden on staffs handling these inquiries, though this does not mean that the staff will not be responding to any questions posed by customers. This form of connection between customers will allow experience to be shared among each other as well.

Besides helping to improve customer relationship, social networking can be a way for Mazda Motor Corporation to provide updates to its customers. This can include events or promotions. Thus, this form of interaction will be beneficial in helping bridging the gap between customers and the company.