POSITIONING A PRODUCT LINE
This case was written by Professors George E. Belch and Michael A. Belch. It is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation.
The case was compiled from published sources.
Mazda has been selling cars and trucks in the highly competitive U.S. market for more than three decades. The company’s various models have always received high marks from consumers in areas such as styling, performance, reliability, and value. Sporty models such as the rotary engine RX-7, which was introduced in 1978 and was Mazda’s signature car for many years, and the Miata roadster helped the company sell nearly 400,000 cars and trucks per year in the U.S. throughout the decade of the ‘80s and into the early ‘90s. However, during the mid ‘90s Mazda embarked on an expansion program in an attempt to compete directly with Honda, Toyota and Nissan. This plan included the introduction of five new models in less than a year that resulted in a lack of focus in the company’s marketing and advertising plans. From 1994 to 1997 Mazda’s U.S. sales declined by 33 percent and reached their lowest level in 15 years as the various models were positioned primarily on the basis of value for the money. When the new president took over Mazda North American Operations in early 1997, he found an inefficient company with an image that was bouncing all around. Most of the advertising for the various Mazda models touted the prices and functional features of the cars with little attention being given to image and positioning. A change in marketing strategy as well as advertising philosophy was clearly needed if Mazda was to regain its strong position in the U.S. market.
The Road to...