Week 10 Assignment: Situation Analysis

Who are the current customers/users? Include information related to demographics,
psychographics and buying behavior, price sensitivity, customer satisfaction and loyalty.
Demographically, Mazda Miata’s current customers are Baby Boomers and Generation Xers;
these are people born between 1946 and 1964 and 1965 to 1980, respectively (Zelenko, 2015).
Psychographically, these are people who share Mazda’s passion for driving; they appreciate the
difference between transportation and convenience and driving (WARC, 2017). Mazda Miata’s
customers’ love for driving translate into buying behavior that is characterized by brand loyalty.
In terms of price sensitivity, compared to the average motorist, Mazda Miata customers are
described as premium drivers. Here, it is worth noting that while most people define
“premium” as a higher price, for Mazda, “premium” is about the depth of the bond between
the company and its customers. Among other considerations, premium drivers like unique cars
with impeccable exterior styling and they only buy cars that are fun to drive. Given their brand
loyalty, it follows that Mazda Miata’s customers are likely highly satisfied with the car.

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What do the customers buy/use of value from the business?
While Mazda has several other models, it is likely that the company’s Mazda Miata customers
buy only that model from the company. This is because, with its two-seater capacity, the Mazda
Miata is not a practical car for the daily city commute, especially for people with families
(Zelenko, 2015). For this reason, people are likely to buy the Mazda Miata as a second, third or
fourth car, to be used primarily for the occasional road trip. As indicated above, Mazda Miata
customers value uniqueness, the quality of exterior styling and great performance that
translate into the car being fun to drive.
What changes can the company/brand expect in the future? How can the company/brand
better serve its customers?
In the future, the brand can expect its current main customers (Baby Boomers and Generation
Xers) to age out (Zelenko, 2015). That being the case, one of the brand’s main challenges is to
make itself attractive to younger generations, especially Millennials (people born between 1981
and 1996). The main challenge with Millennials is that, generally, unlike their parents, they do
not value driving as an experience; they are more concerned with being able to move from
point A to point B as conveniently as possible. Also, unlike their parents, they are less brand
loyal and more price sensitive.
List three opportunities you have identified in your personal assessment of the business.
Make sure to explain why you call each item an opportunity.

1. Driving as an experience: Mazda has the opportunity to teach younger generations
   something they do not know, but their parents knew: the difference between
   transportation and convenience and driving (Zelenko, 2015).
2. Find the premium drivers: Mazda has done an excellent job of quantifying premium
   drivers; in the U.S., for example, the company believes they make up 16% of all new
   drivers (WARC, 2017). The opportunity and challenge for the company are to locate
   them.
3. Immersive marketing: Mazda has the opportunity to locate at least part of the 16% by
   becoming more deeply rooted in motorsports.

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List three threats you have identified in your personal assessment of the business. Make sure
to explain why you call each item a threat.

1. An aging core market of Baby Boomers and Generation Xers: These generations are
   more resourced than the younger ones (Zelenko, 2015). The fact that they are aging and
   becoming less inclined to drive sports cars is a threat to Mazda’s financial health.
2. Competition: Mazda is not the only automaker with sports cars; there is considerable
   competition from other brands like Mercedes-Benz.
3. Millennials’ buying behavior, especially their price sensitivity: This does not auger well
   for Mazda Miata’ higher price point.
   Company
   Current State
   List three strengths you have identified in your personal assessment of the business. Make
   sure to explain why you call each item a strength.
4. Good sports performance at a reasonable price: The 2016 Mazda X-5 performs at par
   with the Porsche 911 4S (Zelenko, 2015). Yet, pricewise, the Porsche costs $120,000
   while the X-5 costs $30,000.
5. Customer-centered marketing: At least as far as the Mazda Miata is concerned, Mazda
   reports that it has transformed itself from a “company-centered” marketer to a
   “customer-centered” one.
6. A deep understanding of its customers: To better understand its core customers, the
   Mazda Miata has moved beyond demographics to analyze, psychographically, the kind
   of driver that would be thrilled by its car.
   List three weaknesses you have identified in your personal assessment of the business: Make
   sure to explain why you call each item a weakness.
7. An impractical option for families: Because of its two-seat capacity, the only way a
   family person can own a Mazda Miata is as a second car (Natasha, 2020).

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2. Design and performance shortcomings: These include inadequate headroom for tall
   drivers, very little trunk space for luggage, not being fast enough for a sports car, and
   unsuitable for winter driving among others.
3. A poor reputation: The car is largely seen as a seen sports car for women, a perception
   that puts off male drivers.
   Future State
   How can the company/brand improve its weaknesses and maintain or grow its strengths?
   Suggest how the company/brand can improve upon the things it does well and not so well.
   The Mazda Miata could improve its market position by working on the weaknesses identified
   above while growing its strengths. Arguably, the brand’s biggest challenge here is changing its
   perception as a women’s sports car. The design and performance-related shortcomings, on the
   other hand, are easier to address. Meanwhile, the brand should translate its strength of deep
   customer understanding into actual customers.
   Collaborators
   Discuss the company/brand’s current partnerships. Create a new partnership you think
   maybe a good for the business or brand to undertake and discuss why you suggest this
   partnership.
4. Since 2012, Mazda has been partnering with Fiat for the Miata, a partnership that has
   made it possible for the Miata to survive to date (Payne, 2016) . Given the model’s low
   production (just 15,000 cars a year) and the car’s bespoke platform (not shared by any
   other Mazda model), the Miata’s business case for its continued production was
   questionable until the Fiat partnership.
5. Future partnership opportunities: Because the Mazda Miata has realized the potential
   of motorsports in helping the brand meet its ideal customers, the brand should consider
   partnering with leading motorsports in the U.S. like the Indianapolis 500 and NASCAR.
   Competitors
   Who are the main competitors to your chosen brand or company? Label and discuss the top
   three competitors and why you consider them a competitor.

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1. Mercedes-Benz SL: Being a roadster, the Mercedes-Benz SL is a direct competitor of the
   Mazda Miata. Unlike Miata, the SL has the distinct advantage of Mercedes-Benz’s global
   brand recognition.
2. Aston Martin Vantage: Aston Martin may not be as well-known as Mercedes-Benz. Yet,
   the Aston Martin Vantage beats both the Miata and the SL on top speed: 190mph versus
   Miata’s 135 mph and SL’s 155 mph (Natasha, 2020).
3. Tesla Roadster: With a top speed of 250 mph, this all-electric roadster is the fastest.
   Also, because it is all-electric, the Tesla Roadster is likely to win the hearts of the more
   environmentally conscious lovers of sports cars.
   Recommendations
   Based upon the analysis, you just completed in this worksheet, what are three key
   recommendations you could pass along to management regarding the future direction of the
   company you selected? Discuss why you have created these strategies, why you think they
   should be undertaken, and how they would work for the business.
4. Aggressively pursue Millennials: This is important if the Mazda Miata is going to
   continue to be financially viable. It is also urgent considering that the model’s current
   market is aging.
5. Address the car’s weaknesses identified above and improve its reputation: This
   intervention is important too if the company is competing favorably against its direct
   competitors identified above.
6. Enter new strategic partnerships: Mazda Miata should seek to embed itself more deeply
   into motorsports. These events have the potential to bring the brand into direct contact
   with future customers.

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References

Natasha, B. (2020, June 24). The Most Glaring Problems With The Mazda MX5 Miata. Retrieved
from Hot Cars: https://www.hotcars.com/the-most-glaring-problems-with-the-mazda-
mx5-miata/
Payne, H. (2016, June 20). How Fiat saved Mazda’s Miata. Retrieved from The Detroit News:
https://www.detroitnews.com/story/business/autos/chrysler/2016/06/20/payne-fiat-
saved-mazdas-miata/86161468/
WARC. (2017, March 6). Mazda targets ‘premium’ drivers. Retrieved from WARC:
https://www.warc.com/newsandopinion/news/mazda-targets-premium-drivers/en-
gb/38301
Zelenko, M. (2015, September 1). The 2016 Miata: three days with the people’s roadster.
Retrieved from The Verge: https://www.theverge.com/2015/9/1/9231691/new-2016-
mazda-mx-5-miata-video