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Honda - Presentation Transcript
1.
o Payam Ansari
o Liew Soo Ting,Christie
o Khor Siu Gek
o Mohammad Gholamzade

Multimedia University, Malaysia

2. A Brief History
o Founded : September 24, 1948
o Headquarters : Tokyo, Japan
o Key people :Soichiro Honda, Founder Takeo Fukui, CEO
o Industry : Automobile & Truck manufacturer & Motorcycle
o Revenue : $94.24 billion USD (2007)
o Net income : $5.0 billion USD (2006)
o Employees :167,231 (2007)

Video

3. Environmental Analysis
o P OLITICAL
 Legislation
 Environment
 Company Cars
 Taxes and Duty
 Subsidies
4.
o Legislation
o - 1966 : The first safety act (The National Traffic and Motor Vehicle Safety Act)
o - 1970 : Clean Air Act that demanded a 90% decrease in automobile emission
within the next six years.
o - 1975 : all automobiles had to meet a standard of fuel consumption.
o - 1992 : installation of front airbags. (Motor Vehicles and Passenger Car Bodies,
2004)
o -…

Environmental Analysis - Political

5.
o Taxes & Duties
 o ( Road tax to be directly linked to amount of emissions.)
o Subsidies
o (e.g. Government protection for Renault,
o Peugeot and Fiat)

Environmental Analysis - Political

6.
o E conomic
o - The automobile industry has a huge impact on the countries’ economy.
o The study conducted by The University of Michigan and the Center for
Automotive Research shows:
o - This industry is the major user of computer chips, textiles, aluminum, copper,
steel, iron, lead, plastics, vinyl, and rubber.
o - For every autoworker there are seven other jobs created in other industries.
o - In 2001, the total sales of automobiles were 3.7% of the nation’s GDP.

Environmental Analysis

7. On the other hand - Excess supply (due to foreign imports) has led to spending heavily on
marketing and new product design. - Oil crisis & economic situation of some European
countries have made a new increasing market for small and fuel-efficient cars.
Environmental Analysis- Economic
8. Environmental Analysis
o S ociocultural
o - Today’s society judges people on the type of car you drive!
o e.g. :
o A mini van driver is perceived as a soccer mom! Or a Lexus driver is thought to
be wealthy.
o - Another aspect is the environmental concerns for the need of fuel-efficient
vehicles.
9. Environmental Analysis
o T echnology
o - The most important technology affected auto industry is the Internet.
o A study showed that 60% of the buyers referred to the internet before making
their purchases and out of that 60%, 88% went to the auto websites before going
and taking a test drive.
o - Business-to-business marketplaces opportunities ( more efficiency & lower
costs)
o - Increasing concerns for the economy & global warming with the help of modern
technologies resulted to the invention of Hybrid vehicles.
10. Environmental Analysis
o G lobal
 o - New trade association that created The Alliance of Automobile Manufacturers
( created by GM, Ford , D.Chrysler, BMW, VW, Volvo, Toyota, Mazda &
Nissan)
o - M&As started in the late 1990s. E.g. :
 Daimler-Benz merged with Chrysler.
 Daimlerchrysler acquired major share of Mitsubishi.
 GM became the controlling shareholder of Fiat & Saab.
 Ford acquired Volvo, Jaguar & major share of Mazda.
 Renault became the controlling shareholder of Nissan.

Video

11. Industry Analysis

o Threat of New Entrants : LOW
o Barriers to entry:
o - The industry is very mature & has successfully reached economies of scale.
o - It needs an incredible amount of capital. (either for manufacturing or R&D)
o - Difficult to access to distribution channels.
o - Difficult to exit (ESCAPE)!
12. Industry Analysis
o Bargaining Power of Supplier : LOW
o - Large number of suppliers
o - Low switching cost
o - No threat of forward integration
13. Industry Analysis
o Bargaining Power of Buyers :
o Moderately High
o - Low switching cost
o - Large number of buyers & concentrated sellers
o But
o - The buyers aren’t large & few in number.
14. Industry Analysis
o Threat of Substitute Product : LOW
o - There are not many substitute products for automobiles.
o - Substitutes products all depend on the geographic location of the consumer.
o E.g. in New York a car isn’t necessary but in Cyberjaya it is!
15. Industry Analysis
o Intensity of rivalry among the Competition :
o Very High
o - For an industry like automobile industry this amount of companies is high.
o - Degree of differentiation is not very high. ( comparing all companies together)
o - The level of fixed-cost is very high
16. Marketing Strategy Products Automobiles, trucks, motorcycles, scooters, ATVs,
electrical generators, robotics, marine equipment, jets and jet engines, and lawn and
garden equipment.
17. European Market Four large European markets : 1. UK ( 20 models) 2. Germany (16
models) 3. Italy (11 models) 4. France (9 models)
18. Global Supply Network of Autos
19. Pricing Strategy
o Honda is attempting to price its products at similar level to that of the
competition.
20. Distribution Channels
o Image of Honda’s vehicles & motorcycles in Europe is aligned together.
o Honda’s vehicles are distributed at the same locations that their motorcycles are.
21. Promotion Mix
o The promotion of Honda’s products is
o essentially the same throughout Europe ( whether in France, Italy, Germany or
UK )
o The company spends very little time & Money in promotion.
o Relied on word of mouth & its websites.
22. Organizational Analysis
23. Organizational Analysis
24. Organizational Analysis
25. Major Problems
o Failed to understand European culture
o Automobile industry in the mature stage of life cycle
 Oversupply of motor vehicles
 Fierce competition from foreign and local manufacturers
 Result: Poor market share and decline in sales
o Weak brand image in European market
 Difficulty in penetrating in luxury markets
26. Brand Image in Europe Honda Daewoo Hyundai Toyota Audi Volvo Peugeot BMW
DMC Fiat GM, Ford VW Renault Low High High Brand Image Breadth of product
27.
o Treated Europe as one single market
 Failed to truly understand the culture of Europe
o Italy and France
o Slow to adopt Internet
o Germany & Scandinavian

High Context Low Context

28. Low context High context Contextual Background of Various Countries Japanese
Arabian Latin American Spanish Italian English (UK) French English (US) Scandinavian
German Swiss EXPLICIT IMPLICIT
29. Marketing Mix Problems
o Ineffective advertising strategies / tactics:
  Standardized advertising campaign
 Minimal attention on marketing & promotion
 Solely depends on the success of F1 racing and word-of-mouth
 Insufficient in Europe market
 Universal website (informative)
 Honda Jazz’s website
30. Marketing Mix Problems
o Standardized distribution
o Narrow product line
 Lack of market sensitivity (diesel cars)
o Late-mover expansion in European market
31. Recommendation
o Varies marketing mix strategies across national borders due to differences in
buying behaviour and habits
o Marketing strategy plan should be revised
 Develop according to the nation’s culture
 Market segmentation according to high or low context culture
32. Recommendation
o Expand its sales and production in order
o to survive in global scale competition
 Fully utilize the technologies capabilities (core competency)
o Tackle market by manufacturing more low-emission CO2 vehicles and offering
more motor vehicle models (diesel cars)
33. Recommendation
o Allocate more resources to change brand perception (enhance brand awareness)
o Customize advertising based on style and image
o Employ PR campaign, road shows, printed and broadcast media
o Informative advertising

High Context Low Context