How Does Mizuno Do It? Why Can't Everyone?

[ChetlovesMer]

Okay, let me start by saying I rarely complain about golf club pricing. Manufacturers can charge what ever the hell they want. It's my job to decide if its worth it or not. But I find this fascinating. My pops wanted a new Taylormade Milled Grind 2 wedge. (You know the one where the face rusts?) So we go online to order it. He likes the CP2 midsized grip. So we find out its an $11 upgrade to order the wedge with that grip. The actual grip itself only costs $8 dollars on the same website we were looking at. I told my dad order the club and the grip, I'd put it on for him. He can save 3 bucks. … He just looked at me like I was a crazy person. 

So, just for grins I'm like "Lets check out a Mizuno wedge". Sure enough, the brand new Mizuno T-20 wedge is not only 20 bucks less expensive, but it also allows you to choose any grip for no extra cost. So, my dad could order a Mizuno T-20 with the CP2 midsize grip he wants and not have to pay an upcharge. 

I told my dad he'd save 31 bucks by getting the Mizuno wedge. "You know, dad. 31 bucks could get you an extra dozen golf balls...." His response was "But the Mizuno won't rust." So, he went ahead and ordered the Taylormade with the CP2 midsize anyway. 

Again, this is NOT a complaint about golf club prices. After all my pops ordered a $181 wedge, and he's like a 30 something handicap. So, that's apparently what the market will bear. 

My first question: Is Mizuno the only company that doesn't charge for upgraded grips on clubs you order??? If so, why don't they market that a little more? I know when I got fit for my irons I found out Mizuno didn't charge an upgrade for any of the like 35 shaft options they had. Seems like with so many people I hear complaining about golf club pricing (again, not me), Mizuno could use this as a marketing feature. 

My second question: If Mizuno is the only one doing this, how do they do it? Are their clubs shipped over without grips on them and they wait until you order to put the grip on? Does everyone else ship clubs over with grips on them, and then they have to remove the "standard" grip and put a new one on??? I'm curious. 

[David in FL]

Maybe they’ve already built additional margin into the price of their wedges so that they can afford to provide upgrades free*.

 

*  It ain’t free...

 

[Patch]

Any successful company, that charges less for their merchandise, compared to other, same companies, is just a better managed company from the top employee down. 

Being in business is all about having a healthy return on investment. The "ROI". For every dollar invested, you want more than that dollar return in profit. Some companies need a higher ROI, than other, same companies to be successful. 

 

[saevel25]

5 hours ago, ChetlovesMer said:

My second question: If Mizuno is the only one doing this, how do they do it? Are their clubs shipped over without grips on them and they wait until you order to put the grip on? Does everyone else ship clubs over with grips on them, and then they have to remove the "standard" grip and put a new one on??? I'm curious. 

Their clubs are a bit more expensive for their standard options. You can find 2-3 blade irons that are cheaper than Mizuno. They are making up their cost there probably.

48 minutes ago, Patch said:

Any successful company, that charges less for their merchandise, compared to other, same companies, is just a better managed company from the top employee down.

Not true.

Branding matters a lot. Apple doesn't charges the cheapest phone out there. They price their phone were it hits their expectations.

People do not always go with the cheaper option. They did studies on people who buy cars and found they don't buy the cheapest. There is a sort of pride in owning a good car. So people will buy a car that fits their narrative they want to tell.

 

[klineka]

10 minutes ago, Patch said:

Any successful company, that charges less for their merchandise, compared to other, same companies, is just a better managed company from the top employee down. 

I wasn't a business major and have little to no experience in business/economics/sales/etc., but couldn't the argument be made that the company charging less for their merchandise isn't as well managed because they are pricing their product below market value without the guarantee that they will sell enough quantity to make up the difference in price so they could potentially be leaving additional profit on the table?

Let's say the market rate for a wedge is $100.

Company A sells 10 wedges in a year at market rate, and have a 10% profit margin, so they make $100 in profit.

Mizuno can produce theirs including whatever grip you want, shaft, etc for $80 and still has that same 10% profit margin, but they would have to sell 12.5 wedges to match that same $100 profit, but if Mizuno charged market rate of $100, then they would exceed that $100 profit if they sold just 4 wedges.

Obviously it's more complicated than this, but wouldn't that indicate that Mizuno isn't managed as well since they theoretically wouldn't be maximizing their profits?

[David in FL]

1 hour ago, Patch said:

Any successful company, that charges less for their merchandise, compared to other, same companies, is just a better managed company from the top employee down. 

 

Not necessarily true at all.    There could be a plethora of reasons. Manufacturing costs, transportation and logistics costs, as well as marketing and branding strategies are just a very few reasons.

[Sandy Divot]

I have posted before that I switched to graphite this year due to a bit of arthritis in my hands. I had played Ping irons since the mid 80s, but switched to Mizuno this year because of the shaft choices with no upcharge. I got Recoil 95 stiff, and they would have cost + $30 per club in Pings. I also got the CP2 grips at no additional charge. I'm not too familiar with the Mizuno woods and hybrids, but, I believe, they probably have my iron business.

[70sSanO]

My guess is that Mizuno sells a ton more baseball and softball bats than Taylormade.

John

[billchao]

Mizuno doesn't pay nearly as much for advertising and endorsements as Taylormade. That being said, it's likely just a business decision. Mizuno offers more options without a surcharge than Taylormade does.

[ChetlovesMer]

15 minutes ago, billchao said:

Mizuno doesn't pay nearly as much for advertising and endorsements as Taylormade. That being said, it's likely just a business decision. Mizuno offers more options without a surcharge than Taylormade does.

Just for grins I checked out other companies options. Everyone except Mizuno, charges for upgraded shafts and grips. Hell, even Wilson charges more for "non-stock" shafts and grips. 

Is Mizuno doing us a favor? 

Are they missing out on potential revenue?

Or is it possible they use a different process when you order custom clubs?

I do know when I ordered my custom fit set of Mizuno irons, I played with them less than 5 days after ordering them. My buddy waited almost 5 weeks for his custom fit clubs. 

[billchao]

11 minutes ago, ChetlovesMer said:

Just for grins I checked out other companies options. Everyone except Mizuno, charges for upgraded shafts and grips. Hell, even Wilson charges more for "non-stock" shafts and grips. 

Is Mizuno doing us a favor? 

I don't know. Like I said, it's likely they as a company decided they wanted to provide that service rather than maximize margins on every order.

11 minutes ago, ChetlovesMer said:

Are they missing out on potential revenue?

Absolutely. If they're not charging fees for things people are willing to pay for, they're leaving money on the table.

12 minutes ago, ChetlovesMer said:

Or is it possible they use a different process when you order custom clubs?

Ancient Japanese samurai sword forging and efficiency secrets, I'm sure 😜

[ChetlovesMer]

22 minutes ago, billchao said:

Ancient Japanese samurai sword forging and efficiency secrets, I'm sure 😜

That made me laugh out loud. 
But actually I was thinking more along the lines of how Toyota had the highest profit margin of any car manufacturer by like 3 fold in the 80's. 
They figured out the "One-piece-flow", Kan-Ban systems, JIT delivery of components etc... That's why everyone in any-kind of manufacturing in the 90's had to read "The Toyota Manufacturing Principles" Book. 

Maybe Mizuno builds their clubs with one-piece-flow and everyone else batch builds their clubs... I'm totally guessing here of course. 

[GolfLug]

I don't think it's about how they are able to it as much as why do they do it.

IMO there are two ways to make 50 bucks in profit. Sell 5 items for 10$ in profit or 10 items for $5. I guess Mizuno thinks they are better off with the later math.

It's always some kinda value/volume balance perception I think.

Edited September 6, 2019 by GolfLug

[ChetlovesMer]

20 minutes ago, GolfLug said:

I don't think it's about how they are able to it as much as why do they do it.

IMO there are two ways to make 50 bucks in profit. Sell 5 items for 10$ in profit or 10 items for $5. I guess Mizuno thinks they are better off with the later math.

It's always some kinda value/volume balance perception I think.

Not sure you are looking at the whole picture? You could sell 5 items with a sell price of $50 and a cost of goods sold at $40. Or sell 5 items with a sell price off $40 and a cost of goods sold of $30.. 

Because, I can't get Mizunos numbers like you can Callaway or Taylormade, it's hard to know if they are taking less profit, trying to sell more. Or if they are selling the same amount, (or even possibly fewer) with lower cost of goods sold. 

[iacas]

Or they could be selling less and making less on each club, too.

They've priced it where they think they should. That's all we can know.

[ChetlovesMer]

3 minutes ago, iacas said:

Or they could be selling less and making less on each club, too.

They've priced it where they think they should. That's all we can know.

Technically, they'd be selling FEWER (clubs) and making less (money) on each club. 

But only a real jerk would respond with such a comment. So, pretend I didn't mention it. 

[iacas]

3 minutes ago, ChetlovesMer said:

Technically, they'd be selling FEWER (clubs) and making less (money) on each club. 

But only a real jerk would respond with such a comment. So, pretend I didn't mention it. 

Maybe the first word I was going to use was (inventory). You can sell or move "less" inventory. You don't move "fewer" inventory. 🙂

[ChetlovesMer]

1 minute ago, iacas said:

Maybe the first word I was going to use was (inventory). You can sell or move "less" inventory. You don't move "fewer" inventory. 🙂

Hmm.... sounds suspicious. But I guess I'll give you the benefit of the doubt.