Jump to content
ChetlovesMer

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

41 posts / 2777 viewsLast Reply

Recommended Posts

56 minutes ago, ChetlovesMer said:

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. 

I think you're overthinking it. Mizuno is providing a service to their customers, one that probably cuts into their profit margins, but that's a choice on their part.

I don't know or think they have some kind of production advantage that allows them to sell their clubs cheaper than other OEMs. If anything, if their production process is smaller they're not as able to take advantage of economy of scale as a larger company producing more clubs.

But remember Mizuno is a giant sports equipment company and golf is only a small part of that. It's possible they don't need to or want to nickel and dime the consumer as part of their brand image or whatever.

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

Want to hide this ad? Register for free today!

23 minutes ago, ChetlovesMer said:

Not sure you are looking at the whole picture

I am looking at the whole pic. It was just my guess at what their thinking could be.

I run a mfg plants that makes and sells 2000+ diff part nos. All kinds of diff value/volume models. So I understand mfg/retail P/L a bit. 

27 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.

Exactly. Pricing not necessarily related to cost.

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

7 minutes ago, GolfLug said:

I am looking at the whole pic. It was just my guess at what their thinking could be.

I run a mfg plants that makes and sells 2000+ diff part nos. All kinds of diff value/volume models. So I understand mfg/retail P/L a bit. 

Didn't mean to insult you. Just offering other ways to get to the same idea. 

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

3 minutes ago, ChetlovesMer said:

Didn't mean to insult you. Just offering other ways to get to the same idea. 

Oh no worries. Didn't think you were at all..😊

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

I can only go by expirience. I owned, and managed a construction company for over 30+ years. 

We made it through 3 recessions, (one being closer to a depression) where other companies like mine folded up. I even bought two of them. Most of the ones that folded were the higher end companies.

We were not one of the higher end companies. Far from it.

Good upper, middle, and lower management decisions got us through the rough times, without layoffs, lowering  benefits, while still making decent profits. 

I agree that "The Brand" has a lot to do with a company's success. In our case, our brand was quality work at affordable prices. That, and we stood behind our work 100%. That was our reputation.

A little off topic, but indulge me this little story. My wife and took 30 day vacation. While I was gone, I left a guy in charge of things. He was new, but someone I trusted. It was my deal that when gone, I would leave different people in charge. To get expirience. Not a problem as my secretary ran the place even when I was there anyways.

When I got back, going through paperwork, I find an invoice where I purchased 50 galvanized trash cans, and 20 metal toilets from a local supply house. I was not in the toilet, and trash can business. 

Seems we were doing some dirt work for the state of California. My guy, while meeting with their guy, found out they needed these items.  My guy determined he could supply the items much cheaper than what their guy was going to purchase them for, from another vendor. My guy basically doubled the price for a decent profit margin. 

I had a talk with my guy. Gave him a pat on the back, that it was a sound management practice. Then I told him to never do it again. 

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

5 minutes ago, Patch said:

Gave him a pat on the back, that it was a sound management practice. Then I told him to never do it again. 

😊

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

So I contacted Mizuno via email. I just asked them why they have the no-upcharge policy. Here's what they said: 

"Thank you for contacting Mizuno USA.  The no up charge policy is something we pioneered back in about 2013.  The reason why we do this is because we do not want price to influence your buying decision as opposed too what shaft performs the best for you.  We would rather have you go with the shaft you are fit to, rather than cost playing a factor in the decision making process.  As of late this is changing as are we are offering a few shafts at an up charge but a majority of the shafts we offer will not cost an extra penny on top of the sticker price.  Please if you have any additional questions, feel free to reply.  Hope you enjoy your Hot Metal Pro's and have a good weekend!"

Sounds like their thinking that if you get the "right" shaft/grip, the clubs will perform better and you'll be happier with your purchase and more likely to purchase more Mizuno product. 

Also sounds like their are a few, perhaps super expensive shafts that they will have to charge more for. I can tell you when I was getting fit about a month ago, there were literally like 35 or more shafts that did NOT have any upcharge, and none of the grips had an up-charge. 

 

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

8 minutes ago, ChetlovesMer said:

So I contacted Mizuno via email. I just asked them why they have the no-upcharge policy. Here's what they said: 

"Thank you for contacting Mizuno USA.  The no up charge policy is something we pioneered back in about 2013.  The reason why we do this is because we do not want price to influence your buying decision as opposed too what shaft performs the best for you.  We would rather have you go with the shaft you are fit to, rather than cost playing a factor in the decision making process.  As of late this is changing as are we are offering a few shafts at an up charge but a majority of the shafts we offer will not cost an extra penny on top of the sticker price.  Please if you have any additional questions, feel free to reply.  Hope you enjoy your Hot Metal Pro's and have a good weekend!"

Sounds like their thinking that if you get the "right" shaft/grip, the clubs will perform better and you'll be happier with your purchase and more likely to purchase more Mizuno product. 

Also sounds like their are a few, perhaps super expensive shafts that they will have to charge more for. I can tell you when I was getting fit about a month ago, there were literally like 35 or more shafts that did NOT have any upcharge, and none of the grips had an up-charge. 

As I thought, it's a service thing.

Though I noticed they conspicuously left out the ancient Japanese secrets.

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

6 hours ago, billchao said:

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.

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

I am not sure they aren't maximizing profit.  There are two schools of thought in business.  High margin and low volume versus Low margin and high volume.  Maybe Mizuno is going for high volume to offset their low margin.  Now admittedly, they don't sell a huge amount in other markets, but they are big in Japan.

Share this post


Link to post
Share on other sites

On 9/7/2019 at 4:26 AM, billchao said:

That's not what I wrote.

My bad if I misinterpreted it, but when you say they are leaving money on the table, I figured it meant they weren't maximising profit 🤷‍♀️

Share this post


Link to post
Share on other sites

1 hour ago, pganapathy said:

My bad if I misinterpreted it, but when you say they are leaving money on the table, I figured it meant they weren't maximising profit 🤷‍♀️

I wrote "maximizing margins [sic] on every order." That's not the same thing as maximizing profit. You yourself pointed out that high volume sales at low margin is a viable strategy.

And the simple answer is they are leaving money on the table if they're giving something away somebody was willing to give them $5 for.

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

3 hours ago, billchao said:

I wrote "maximizing margins [sic] on every order." That's not the same thing as maximizing profit. You yourself pointed out that high volume sales at low margin is a viable strategy.

And the simple answer is they are leaving money on the table if they're giving something away somebody was willing to give them $5 for.

The way I look at it is that they are choosing lower margins (in this case giving up the $5 that somebody would pay for a grip) in order to increase volumes.  If you could get the same set of golf clubs for 400 or 500, wouldn't you pay less.

Share this post


Link to post
Share on other sites

When I mention selling more baseball and softball bats, I was a bit serious. 

Mizuno is a world wide sporting goods manufacturer.  Even though they are a corporation they don’t answer to a parent company, unlike some other manufacturers.  They were not an apparel company that added equipment at a later date.

If Mizuno makes less margin on certain items it’s their prerogative, not some investment company looking over their shoulder screaming shareholder value.

John

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

23 hours ago, 70sSanO said:

If Mizuno makes less margin on certain items it’s their prerogative, not some investment company looking over their shoulder screaming shareholder value.

I think you are kind of on to something here, John. Without turning this into an MBA class, I've worked for a huge publicly traded company and there were a ton of advantages to that. However, there were a number of times when I was there when it felt like we were mortgaging our future just to keep shareholders happy for the current quarter or even fiscal year. 

Today I work for a much smaller privately held company. We often will give up some margin for the short run to build customer loyalty for the long run. Seems to me that's what Mizuno is doing. I mean they claimed as much in their response to my email. They are "buying" loyal customers. 

When I was earning my MBA I remember a class in which we talked about how it's 10-50% as expensive to retain a customer (depending on many factors) as it is to earn a new customer. My experience has certainly taught me that although the actual number is debatable to concept is true. Seems Mizuno is trying to retain customers. 

I can tell you it worked with me. My new irons are the first Mizuno clubs I've ever owned. As of now though, if I need other clubs, I'll DEFINITELY give Mizuno the first shot. For example, when it comes time for new wedges, I'll test their wedges vs my tried and true Vokeys. 

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

When I read through golf forums I see great loyalty towards Mizuno, probably more noticeable than with any other manufacturer.  Simple things like eliminating upcharges whenever reasonable possible might be a big part of that loyalty.  So they spend an extra buck per grip for the iron set you buy this year, but you come back specifically to Mizuno for your next set of irons, even 5 years down the road.  Their couple of buck worth of grips is well worth it.

And just now I realized that @ChetlovesMer beat me to this.

Share this post


Link to post
Share on other sites
Awards, Achievements, and Accolades

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.




×
×
  • Create New...

Important Information

Welcome to TST! Signing up is free, and you'll see fewer ads and can talk with fellow golf enthusiasts! By using TST, you agree to our Terms of Use, our Privacy Policy, and our Guidelines.

The popup will be closed in 10 seconds...