Group Paper ASB-3103 Marketing Strategy and Management Introduction Honda’s product portfolio Honda has offered products that supplement the lifestyles of their consumers around the globe. They have been producing motorcycles for more than 60 years now and are world’s top leading motorcycle manufacturer in terms of the number of units sold. According to the official Honda Motorcycles website, Honda has manufactured a total of 200 million motorcycles as of 2008. Page 1 of 7 Group Paper Honda manufactures 10 different types of motorcycles. • • • • • • • • • Adventure Cruiser Off Road Roadsport Scooters Sports Tourers Supersports Touring Traditional 125cc Honda provides dynamic support to establish a leading suite of proprietary products tailored specifically for their customer needs. Honda motorcycles simple products which are easily obtained by Honda’s nationwide dealerships. They are affordable and Honda has introduced low and high version of motorcycles for each model to meet diverse consumer requirements. Honda produces its motorcycles in many parts of the world. Hence, motorcycle development is designed to meet regional market characteristics and customer tastes.
Honda’s Competitive Environment Honda operates in a competitive environment; they have many key competitors including Triumph, Yamaha, Suzuki, BMW, Kawasaki and Ducati. A variety of competitors means more choice for the consumer. Recently Triumph has fought back at Honda and many top market manufacturers, by earning a larger UK market share than them, at 17%. Honda’s annual report of 2007, which compares Honda’s sales to other competitors, shows that although the market share fluctuates from month to month, Honda regularly has approximately half of it. This shows their strong presence in the motorcycle/moped market.
Honda’s motorcycle competitive positioning in comparison to their main competitors’ production levels in Japan in September 2010 are as follows: Honda – 18,333 units Suzuki – 12,154 units Yamaha – 15,774 units Kawasaki – 11,635 units This shows they are the biggest manufacturing motorcycle company, and that the others have now formed what is known as a strategic group, who target the same market as Honda, and strive to be Page 2 of 7 Group Paper more successful. Looking specifically at the moped market Honda(1) is compared below to Yamaha(3) and vesper(2). ee diagram below; ( taken from ASB 3103- Marketing Audit 1. ppt2010. ppt) Honda’s External Environment Honda’s motorcycles are surrounded by a macro environment which comprises of external forces that are continuously changing and influencing the company in different ways. The external forces can be summarised within a PESTLE analysis, which focuses on factors within the external business environment. Political forces: UK government proposal to limit the number of cars being sold would increase the manufacturing of motorcycles.
Economic forces: ? The exchange rate of the Pound to Yen – the weakness of the Yen makes Honda expensive in the UK. The price of petrol and diesel has been increasing for a number of years, hence, mopeds have great fuel economy so the demand has increased. ? Page 3 of 7 Group Paper Social and cultural: Motorcycles have a faster turnaround for commuting, particularly in cities with the urban congestion. Technological: As Honda is one of the leading manufacturers of motorcycles it has large investment in technological development.
Motorcycle fatality rates per unit are higher than that in automobiles, because of this there is a big emphasis on technological advances in safety. Legal: You must be 16 years of age to ride a moped and 17 years of age to ride a motorcycle on the road. It is also a requirement to hold a driving licence which allows you to ride motorcycles – category A. Environmental: Honda has promoted its products towards being ‘green’. They have pressured to include a catalytic converter to reduce nitrogen oxide emissions as a part of green movement.
Honda’s Current Strengths and Weaknesses Strengths: ? Technical Excellence: Honda has managed to stay on top of the market with their powerful yet light weight engines and with the new launch of the dual clutch. Efficient Value Chain: They react quickly to the current market situation and revise market plans and design problems. Low Cost-High Value Quality Position: Honda pride themselves in manufacturing high quality products at low cost which makes it affordable to customers and cheaper than their competitors.
Strong Brand Name: Honda has a very strong recognised brand name. ? ? ? ? Location Advantage: especially in the UK, Honda has gained access to the domestic market and the government is proposing to limit the number of cars being sold this act would increase the manufacturing and sales of motorcycles and specially mopped since it is cost effective and convenient. Weaknesses: ? Strategic Alliances: Honda has to build strategic alliances with their competitors in other to stay ahead of the market so as not to lose their customers. Page 4 of 7
Group Paper ? Striking a Balance: Honda would have to find a balance between future research and current profit. No Effective Management: It depends solely on entry into the market first and organising later strategy for new market penetration. Sparse Dealer Network: Since Honda doesn’t manufacture and sell only in Japan, it has a sparse network dealer across the world especially the USA and now the UK. The problem associated is that exchange rate can influence Honda’s production overseas. ? ? Swot Analysis Conclusion: Honda Future Challenges
Honda must create competitive advantage by constantly adapting to and instigating change and innovations. Honda will lose its competitive edge and the ability to command price and share premiums if the company allows its competitors to duplicate or counter its innovative abilities. With being environmental friendly on the up rise in recent years, creating environmental friendly products and remaining profitable and staying true its key philosophy will be a challenge for Honda in years to come. Page 5 of 7 Group Paper Honda Future Marketing Strategy
With competition from other Japanese manufactures and other foreign competitors, Honda must strive globally to survive locally. The best way to hold their competitors at bay respectively is by attacking them on global level and local level; this will only work if Honda takes advantages of their competitors stretched resources. The following are marketing strategies that could be used: ? Collaboration with Competitors: Honda must collaborate with their competitors that have complementary skills, or between distributor or manufactures in similar markets.
Product Innovation: Honda must create a product that pushes boundaries in their market by creating better energy efficient motorcycles than their competitors. Products for Global Acceptance: Honda must create better motorcycles that influence consumers and competitor’s behaviour by creating technologically advanced products. ? ? As a result of this report, it is vital to say that Honda practices relationship marketing strategy as they take in general feedback from their customer.
This shows that they are focusing on customer satisfaction and needs, to provide Honda with valuable source of information for decision making. References: ? ? ? ? ? Baker M. J, 2000, Marketing Strategy and Management, Third edition, Macmillan Press, London. Kotler P, Kevin Lane Keller, Mairead Brady, Malcolme Goodman, Torben Hansen, Marketing Management, 2009, 13th Edition, Prentice Hall, London. www. wikipedia. org/wiki/motorcycle_safety, 2010. Accessed on 02/12/2010 www. dealernews. om, Accessed on 01/12/2010 ww1. honda. co. uk/motorcycles, Accessed on 02/12/2010 Page 6 of 7 Group Paper ? http://www. guardian. co. uk/business/2010/nov/12/triumph-winner-motorcycle-market. Accessed on 02/12/2010 ? http://www. webbikeworld. com/motorcycle-news/statistics/motorcycle-sales-statistics. html Accessed on 03/12/10 ? ? http://world. honda. com/investors/annualreport/2007/05. html, Accessed on 02/12/10. Slide 18, ASB3103MarketingAudit1. ppt2010 (Power Point). Page 7 of 7