Introduction
Market segmentation helps in ensuring
the success of a marketing process. It matches the needs of the market to the
marketing initiatives of the company where products are availed to those who
need them the most (Kotler and Lane, 2010). Passenger vehicles can be categorised
under business products. As opposed to consumer products which are used by the
end user, business products are used for the production of goods and services
(Kotler and Lane, 2010). Passenger vehicles are therefore business products due
to the fact that they are primarily used to provide transportation services in
the market. Mazda is among the main players in the Australian automotive
industry with close competitors being Cruze, Toyota, Hyndai, Mercedes, Ford and
others (Sitecore, 2012). The company has an array of products which are
targeted at end consumers and business players with the company known to excel
in the sale of small vehicles which are very popular with end users in
Australia. In this paper, focus is mainly on passenger vehicles and it discusses
the target market, positioning of the brand, and value proposition of the
company.
Target market segmentation
A market segment can be defined as a
section of the market with characteristics that set them apart from the rest of
the market. The wisdom of segmentation is informed by the fact that 80% of
demand tends to be generated by 20% of the market (Kotler, 2010). This makes it
necessary to specifically target the 20% and ensure that marketing is
effective. Market segmentation can therefore be described as the process of
dividing the market into smaller segments based on certain criteria.
Segmentation serves a number of important functions which include the
generation of more precise marketing objectives, the generation of a highly
effective marketing program, improved allocation of resources and ultimately
leads to greater success in the marketing process (Pearce and Robinson, 2005).
The market for vehicles in Australia can
be divided into 2 major segments: direct consumers and the business segment.
The direct consumers are those who purchase vehicles for personal use. These
consumers tend to be of average to high income earners with high regard for
style, class and convenience (Zhong, 2011). They tend to embrace the cars
purchased as symbols of their personality and are therefore very keen on the
brand names and general outlook of the vehicles they purchase. A majority of
the direct customers have been embracing the sustainability agenda with focus
being turned towards brands that have pursued technological developments to introduce
efficient combustion systems that reduce the degree of exhaust emissions
(Deloitte, 2011). The same also applies to maintenance costs with most
consumers often seen to opt for vehicles whose quality is high and would therefore
not need frequent repairs. It is in line with this need that many vehicle
manufacturers offer warranties with Hyundai known to offer the longest warranty
in the market. The main preference in this category is for small vehicles with
a small section of the higher income earners opting for the top of the range
vehicles.
The business segment on the other hand
purchases vehicles for use in reproducing goods and services. Several
sub-segments could be identified with passenger businesses and cargo transport
businesses being the major sub-segments (Deloitte, 2011). The passenger
business segment is comprised of persons and business organisations that
provide passenger transport services. This could include taxi and car hire
companies, tours and travel businesses as well as regular commuter transport
systems (Federal Chamber of Automotive Industries, 2008). The main interest for
these companies is to purchase vehicles that provide benefits that resonate
well with the needs of the clients. Focus is on comfort, overall image and
durability. The reason why the transporters are in business is to make a
profit. This implies the need to ensure that the cost of operation is at the
bare minimum. This informs the rationale for opting for small vehicles for taxi
businesses. Where larger vehicles are to be used, the clients prefer to have
large vehicles to ensure that as many people as possible can be transported at
a time (Zhong, 2011). The business consumers tend to have a relatively high
purchasing power with progressive businesses often aiming at growing the size
of their fleets. Many of them would ordinarily want to have fleets from the
same brand or family with some of them opting to get into long term agreements
with the preferred vehicle manufacturers. This makes them a potent segment with
chances that an effective marketing campaign would be highly rewarding. Their
profitability goals also make them very keen on guarantees that assure them of
the quality of vehicles- or at the very least that they would not have to spend
unnecessarily on repairs and replacement of parts (Zhong, 2011). As has been
mentioned earlier, this segment is highly sensitive to the preferences of the
end consumer. Branding exercises should therefore be focused on ensuring that
the entire market is endeared to the brand.
Positioning matrix and evaluation
of competition
Positioning matrices help in identifying
the strengths and weaknesses of brands and therefore help in highlighting the
strategic positioning of a given brand. The brands under consideration in this
case are Hyundai, Mazda and Toyota. The positioning matrix is as below:
As can be seen from the figure above,
the price levels for the three products are almost at par. The prices for Mazda
and Hyundai are slightly higher than those for Toyota. The price in this case
includes both the cost of the products, the cost of maintenance and the fuel
consumption level (Federal Chamber of Automotive Industries, 2008). Analysts
have in many cases pointed out that Toyota’s cost of maintenance tends to be
lower than that of many of the available brands (Zhong, 2011). Toyota therefore
has an advantage as far as price is concerned. However, the price difference
can be overcome using good branding techniques.
In terms of sophistication, Mazda is
considered the trendiest and sophisticated of the three brands. The company therefore
has a good chance at capturing market share by highlighting on this
characteristic and portraying itself as the brand of the spirited and dynamic
members of the society. Hyundai on the other hand is considered to be a little
more sophisticated than Toyota and but less sophisticated than Mazda (Federal
Chamber of Automotive Industries, 2008). Toyota on the other hand is often
presented as simple and easy to maintain. This gives it the image of a simple
vehicle with very low levels of sophistication.
When it comes to quality, none of the
brands has a clear advantage over the others. Mazda and Toyota have been in the
market for long and have been able to prove their quality over time. Hyundai on
the other hand has had image issues as far as quality is concerned. It has
traditionally been regarded as a low quality product and they have in recent
years been working hard to reverse this image (Deloitte, 2011). The efforts to
reverse the image range from the adjustment of prices to be at par or slightly
higher with comparable brands, and introducing longer than average warranties.
Hyundai currently has a warranty of 5 years with the underlying message being
that the manufacturers are so confident of the quality of their products that
they are willing to provide such a generous guarantee.
Consumer profile
A typical consumer in the business
segment would be a businessman with one or more vehicles dedicated to serving passengers.
He is likely to have the requisite purchasing power with sufficient funds for
investment or with adequate access to credit facilities. He is therefore very
potent. The consumer under consideration is an objective consumer: he evaluates
the quality of products critically before making a decision on what to
purchase. He is also very aware of what his prospective passengers would like
to use from time to time. This makes him very aware of the brand image of
various car manufacturers in the market. His purchasing decision is therefore
likely to favour the brands that he finds to be popular with his clients.
This is also a consumer with an eye on
the bottom-line. He is preoccupied with the prospect of making as much profits
as he can under the circumstances. He therefore takes note of fuel consumption
rates, maintenance costs and the availability of warranties that could help in
cushioning him against certain expenses. The businessman in question is also
conscious of the fact that he should build his brand diligently and this would
probably imply the need to ensure that his fleet comes with the same
specifications. He is therefore likely to make most of his purchases from the
preferred brand. He is therefore a very potent client who is likely to generate
more revenues for the selected car manufacturer for a relatively long period of
time.
Value proposition
The value proposition should take into
account the characteristics of the target consumer and bring out an
advertisement message that creates the maximum effect on them. To begin with,
the quality of Mazda brand is assured. Its quality is as high as that of other
reputable brands in the market and this element is crucial to the average
consumer (Deloitte, 2011). The message to the consumer should therefore
emphasise on the fact that the quality of the vehicles is above board and that
the maintenance costs would be very low as a result of this. The second aspect
relates to pricing. Mazda’s prices are slightly higher than Hyundai’s and
Toyota’s. Consumers tend to be sensitive on prices unless they can find a
justification for spending the extra cash. By emphasising on quality, the price
difference becomes insignificant. Emphasis should be laid on the fact that the
brand provides value for money. Such an approach would divert attention from
price and instead emphasise that quality and other qualities associated with
the brand are worth every cent spent on it.
It is also important to take note of the
fact that the target consumers would want to purchase what is popular with
their passengers (Zhong, 2011). This requires that the brand be popular in the
whole market and have a unique relationship with all consumers in the market.
To ensure that the brand can establish a relationship with the market, there
should be a significant on product intangible attributes of the vehicles.
Product intangible attributes are those that cannot be linked directly to a
product (Pearce and Robinson, 2005). They tend to acquire some level of human
attributes hence constituting brand personality. Mazda can highlight the fact
that their products are trendy. This makes them suitable for persons who believe
that they to be sophisticated, high spirited and generally very dynamic. By
connecting the personality to the product, the brand would be able to establish
a unique relationship between the products and the consumers and this would go
a long way in building brand loyalty and subsequently contribute to sustained
growth.
Conclusion
Market segmentation for passenger
vehicles identifies passenger service businesses and entrepreneurs as the
primary target market for their brands. These consumers tend to not only be
keen on quality and cost of maintenance of vehicles: they are also keen on
capturing the imagination of their clients. This means that a businessman in
the industry is likely to prioritise brands that are very popular with their
passengers. Given that Mazda’s have the required quality, and that their prices
are fair when compared to competitors such as Hyundai and Toyota; their chances
of success lie in establishing a relationship with the market. This can be done
very successfully by building a brand personality which portrays the business
as trendy and dynamic and thereby attract customers who have or like such a
personality.
References
Federal Chamber of Automotive Industries, (2008). Submission to the Review of Australia’s
Automotive Industry. Retrieved March 28, 2012 from:
http://www.fcai.com.au/library/FCAI_FINAL_SUBMISSION.pdf
Mazda Motor Corporation, (2012). Brand Strategy. Retrieved March 28, 2012
from: http://www.mazda.com/profile/vision/brand.html
Deloitte, (2011). Motor Industry: Australian Industry Overview 2011. Retrieved March
28, 2012 from: http://www.pickles.com.au/idc/groups/public/documents/webcontent/live-001379.pdf
Zhong, W., 2011. Toyota
attempts to rebuild its image. Retrieved March 28, 2012 from:
http://media.angelfire.lycos.com/3206841/1713918.pdf
Kotler, P., and Lane,
K.K., (2006). Marketing Management. 12th Ed. Pearson Education: Prentice
Hall
Pearce, J., and Robinson, R., (2005). Strategic Management. 9th
Edition. New York: McGraw-Hill
Kotler, P., (2010). A framework for marketing management.
Upper Saddle River, N.J: Pearson
Sitecore, (2012). Mazda Australia. Retrieved March 28, 2012 from:
http://www.sitecore.net/Customers/Selected-Customers/Consumer-Goods/Mazda-Australia.aspx
No comments:
Post a Comment