STUDENT DECLARATION
CERTIFICATE BY GUIDE
ACKNOWLEDGEMENT
CHAPTER-1 INTRODUCTION
OBJECTIVE OF STUDY
RESEARCH METHDOLOGY OF STUDY
SAMPLE DESIGN
DATA
COLLECTION-
SECONDARY DATA
CHAPTER-2
COMPANY PROFILE
CHAPTER-3
HONDA MARKETING STATEGY
CHAPTER-4
DATA ANAYSIS AND INTERPERTATION
1
PRIMARY
&
CHAPTER-5
CONCLUSION & REFERENCES
ANNEXURE
STUDENT DECLARATION
I hereby declare that the project entitled Marketing Strategy of Honda under the guidance of
_____________________________ submitted in the partial fulfillment of degree of Bachelor of Business
Administration from TRINITY INSTITUTE OF PROFESSIONAL STUDIES , Dwarka ,New Delhi.
This is my original work and this project work has not formed the basis for the award of any Degree to the
best of my knowledge.
Place:
Date:
Certificate
This is to certify that project title Marketing Strategy of Honda is the original work of Harshit Goswami
of BBA 3rd Semester and has been duly completed under my guidance and supervision upto my satisfactory
level.
This work has been done in partial fulfillment of the requirement for the award of the degree of BBA from
TRINITY INSTITUTE OF PROFESSIONAL STUDIES and has not been submitted anywhere in any other
university for the award of any degree.
Acknowledgement
It is pleasure to acknowledge many people who knowingly and unwittingly helped me, to complete my
project. First of all let me praise god for all the blessings, which carried me through all those years.
First & foremost, I would like to express my regards to ________________for her constant encouragement
and support. I would also like to express my immense gratitude towards all the lecturers of our college for
providing the invaluable knowledge, guidance, encouragement extended during the completion of this
project.
I extend my sincere gratitude to all my teachers and guide who made unforgettable contribution. Due to their
sincere efforts I was able to excel in the work entrusted upon me.
CHAPTER 1
INTRODUCTION
RESEARCH
METHODOLOGY
Research is an art of scientific investigation. It refers to a search for knowledge. The advance Learner's
Dictionary English lay down the meaning of research as, "A careful investigation or inquiry especially
through search for new facts in any branch of knowledge."
Research Methodology is a way to systematically solve the research problem. the research begins its
formation when the problem or objective of the research is identified for which a research report is
conducted. The main objective for which this report is carried out is to find out " HONDA
MARKETING STRATEGY".
Exploratory Research :The objective of this project is to generate new ideas. An exploratory study in generally based on the
Primary data and Secondary data that is readily available. It does not have a formal and signed design as the
research may have to change his focus or direction, depending on the availability of new ideas and
relationship among variables
RESEARCH DESIGN
A research design is the arrangement of conditions for collection and analysis of data in a manner that aims
to combine relevance to the research purpose with economy in procedure. In fact, the research design is the
conceptual structure within which research is conducted; it constitutes the blue print for the collection,
measurement and analysis of data.
Different types of Research Design are as follows:1.
2.
3.
4.
In this report the exploratory research design is used to find out the "HONDA MARKETING
STRATEGY".
Sample Design
Sample Size:Questionnaire (Schedule) & Interview method
Out of the 100 respondents who were selected, 82 returned the questionnaires duly filled.
Sampling Method:In the present study, convenience sampling method has been used.
Data Collection Method:In dealing with any real life problem it is often found that data at hand are inadequate and hence, it becomes
necessary to collect data that are appropriate. There are several ways of collecting data which differ
considerably in context of a survey, data can be other resources at the disposal of the researcher.
Primary Data can be collected through various methods like:
Questionnaire method
Observation method
through Schedules
Interview method
In the present study Primary data is collected though Questionnaire cum Personal interview method.
Secondary data can be collected though various methods like:
Magazines
Newspapers
Websites
Books
Different Websites
Company Journals
Books
Data collecting through Questionnaire resulted in availability of the desired information but these were
useless these analyzed. various steps required for this purpose were editing, coding and tabulating.
Tabulating refers to bringing together similar data and compiling them in an accurate and meaningful
manner. In this present study the data collected by questionnaire was analyzed, interpreted with the
help of table, pie chart and bar diagram.
10
Chapter-2
INTRODUCTION
OF
COMPANY
11
Company Profile
As a young man, Honda's founder, Soichiro Honda had an interest in automobiles. He worked as a
mechanic at the Art Shokai garage, where he tuned cars and entered them in races. In 1937, with financing
from his acquaintance Kato Soichiro, Honda founded Tokai Seiki (Eastern Sea Precision Machine Company)
to make piston rings working out of the Art Shokai garage. After initial failures, Tokay Seiki won a contract
to supply piston rings to Toyota, but lost the contract due to the poor quality of their products. After
attending engineering school without graduating, and visiting factories around Japan to better understand
Toyota's quality control processes, by 1941 Honda was able to mass-produce piston rings acceptable to
Toyota, using an automated process that could employ even unskilled wartime labourers.
Tokay Seiki was placed under control of the Ministry of Commerce and Industry (called the Ministry of
Munitions after 1943) at the start of World War II, and Soichiro Honda was demoted from president to senior
managing director after Toyota took a 40% stake in the company. Honda also aided the war effort by
assisting other companies in automating the production of military aircraft propellers. The relationships
Honda cultivated with personnel at Toyota, Nakajima Aircraft Company and the Imperial Japanese Navy
would be instrumental in the post-war period. A US B-29 bomber attack destroyed Tokay Seiki's Yamashita
plant in 1944, and the Itawa plant collapsed in the 1945 Mikawa earthquake, and Soichiro Honda sold the
salvageable remains of the company to Toyota after the war for 450,000, and used the proceeds to found the
Honda Technical Research Institute in October 1946. With a staff of 12 men working in a 16 m2 (170 sq ft)
shack, they built and sold improvised motorized bicycles, using a supply of 500 two-stroke 50 cc Tohatsu
war surplus radio generator engines. When the engines ran out, Honda began building their own copy of the
Tohatsu engine, and supplying these to customers to attach their bicycles.` This was the Honda Model A,
nicknamed the Bata Bata for the sound the engine made. In 1949, the Honda Technical Research Institute
was liquidated for 1,000,000, or about US$5,000 today; these funds were used to incorporate Honda Motor
Co., Ltd. At about the same time Honda hired engineer Kihachiro Kawashima, and Takeo Fujisawa who
provided indispensable business and marketing expertise to complement Soichiro Honda's technical bent.
The close partnership between Soichiro Honda and Fujisawa lasted until they stepped down together in
October 1973.
The first complete motorcycle, with both the frame and engine made by Honda, was the 1949 Model D, the
first Honda to go by the name Dream. Honda Motor Company grew in a short time to become the world's
largest manufacturer of motorcycles by 1964.
The first production automobile from Honda was the T360 mini pick-up truck, which went on sale in August
1963. Powered by a small 356-cc straight-4 gasoline engine, it was classified under the cheaper Kei car tax
12
bracket. The first production car from Honda was the S500 sports car, which followed the T360 into
production in October 1963. Its chain-driven rear wheels pointed to Honda's motorcycle origins.
The death of Soichiro Honda and the departure of Irimajiri, Honda found itself quickly being outpaced in
product development by other Japanese automakers and was caught off-guard by the truck and sport utility
vehicle boom of the 1990s, all which took a toll on the profitability of the company. Japanese media reported
in 1992 and 1993 that Honda was at serious risk of an unwanted and hostile takeover by Mitsubishi Motors,
who at the time was a larger automaker by volume and flush with profits from their successful Pajero and
Diamante.
Kawamoto acted quickly to change Honda's corporate culture, rushing through market-driven product
development that resulted in recreational vehicles such as the Odyssey and the CR-V, and a refocusing away
from some of the numerous sedans and coupes that were popular with Honda's engineers but not with the
buying public. The most shocking change to Honda came when Kawamoto ended Honda's successful
participation in Formula One after the 1992 season, citing costs in light of the takeover threat from
Mitsubishi as well as the desire to create a more environmentally-friendly company image.
Later, 1995 gave rise to the Honda Aircraft Company with the goal of producing jet aircraft under Honda's
name.
13
AUTOMOBILES
introduced in 1963. In 1965, Honda built a two-door commercial delivery van, called the Honda L700.
Honda's first four-door sedan was not the Accord, but the air-cooled, four-cylinder, gasoline-powered Honda
1300 in 1969. The Civic was a hatchback that gained wide popularity internationally, but it wasn't the first
two-door hatchback built. That was the Honda N360, another Kei car that was adapted for international sale
as the N600. The Civic, which appeared in 1972 and replaced the N600 also had a smaller sibling that
replaced the air-cooled N360, called the Honda Life that was water-cooled.
Honda produces Civic hybrid, a hybrid electric vehicle that competes with the Toyota Pries, and also
produces the Insight and CR-Z.
Motorcycles
'Honda is the largest motorcycle manufacturer in Japan and has been since it started production in 1955. At
its peak in 1982, Honda manufactured almost three million motorcycles annually. By 2006 this figure had
reduced to around 550,000 but was still higher than its three domestic competitors.
Power equipment
Production
started
in
1953
with
H-type
engine
(prior
to
motorcycle).
Honda power equipment reached record sales in 2007 with 6.4 million units. By 2010 (Fiscal year ended 31
March)
this figure had decreased to 4,7 million units. Cumulative production of power products has exceeded
85 million units (as of September 2008). Honda power equipment includes are Engine, Tiller, Lawn mower,
Robotic lawn mower, Riding mower, Trimmer, Mower, Blower, Sprayer, Hedge trimmer, Snow thrower,
Generator, welding power supply, Pumps etc.
Engines
Honda engines powered the entire 33-car starting field of the 2010 Indianapolis 500 and for the fifth
consecutive race, there were no engine-related retirements during the running of the Memorial Day Classic.
15
Honda, despite being known as an engine company, has never built a V8 for passenger vehicles. In the late
1990s, the company resisted considerable pressure from its American dealers for a V8 engine (which would
have seen use in top-of-the-line Honda SUVs and Acuras), with American Honda reportedly sending one
dealer a shipment of V8 beverages to silence them. Honda considered starting V8 production in the mid2000s for larger Acura sedans, a new version of the high end NSX sports car (which previously used DOHC
V6 engines with VTEC to achieve its high power output) and possible future ventures into the American
full-size truck and SUV segment for both the Acura and Honda brands, but this was cancelled in late 2008,
with Honda citing environmental and worldwide economic conditions as reasons for the termination of this
project.
Robots
Aircraft
Honda has also pioneered new technology in its HA-420 HondaJet, manufactured by its subsidiary Honda
Aircraft Company, which allows new levels of reduced drag, increased aerodynamics and fuel efficiency
thus reducing operating costs.
16
Solar cells
Honda's solar cell subsidiary company Honda Soltec (Headquarters: Kikuchi-gun, Kumamoto; President and
CEO: Akio Kazusa) started sales throughout Japan of thin-film solar cells for public and industrial use on 24
October 2008, after selling solar cells for residential use since October 2007. Honda announced in the end of
October 2013 that Honda Soltec would cease the business operation except for support for existing
customers in Spring 2014 and the subsidiary would be dissolved.
Mountain bikes
Honda has also built a downhill racing bicycle known as the Honda RN-01. It is not available for sale to the
public. The bike has a gearbox, which replaces the standard derailleur found on most bikes.
Motorsports
Honda has been active in motorsports, like Motorcycle Grand Prix, Superbike racing and others.
Automobile
Honda Racing F1
17
Honda returned to Formula One in 1983, initially with another Formula Two partner, the Spirit team, before
switching abruptly to Williams in 1984. In the late 1980s and early 1990s, Honda powered cars won six
consecutive Formula One Constructors Championships. WilliamsF1 won the crown in 1986 and 1987.
Honda switched allegiance again in 1988. New partners Team McLaren won the title in 1988, 1989, 1990
and 1991. Honda withdrew from Formula One at the end of 1992, although the related Mugen-Honda
company maintained a presence up to the end of 1999, winning four races with Ligier and Jordan Grand
Prix.
It was announced on 5 December 2008, that Honda would be exiting Formula One with immediate effect
due to the 2008 global economic crisis. The team was sold to former team principal Ross Brawn, renamed
Brawn GP and subsequently Mercedes.
Honda became an official works team in the British Touring Car Championship in 2010.
Honda made an official announcement on 16 May 2013 that it will re-enter Formula One racing in 2015 as
an engine supplier to the McLaren team.
Motorcycles
Main article: Honda Racing Corporation
allow Mike Hailwood to claim their first Grand Prix victories in the 125 and 250 cc classes. Hailwood would
later pick up their first Senior TT wins in 1966 and 1967. Honda's race bikes were known for their "sleek &
stylish design" and exotic engine configurations, such as the 5-cylinder, 22,000 rpm, 125 cc bike and their 6cylinder 250 cc and 297 cc bikes.
Compressed natural gas:- The Honda Civic GX is the only purpose-built natural gas vehicle (NGV)
commercially available in some parts of the U.S. The Honda Civic GX first appeared in 1998 as a factorymodified Civic LX that had been designed to run exclusively on compressed natural gas.
Flexible-fuel
Honda's Brazilian subsidiary launched flexible-fuel versions for the Honda Civic and Honda Fit in late 2006.
Hybrid electric
In late 1999, Honda launched the first commercial hybrid electric car sold in the U.S. market, the Honda
Insight, just one month before the introduction of the Toyota Prius, and initially sold for US$20,000. The
first-generation Insight was produced from 2000 to 2006 and had a fuel economy of 70 miles per US gallon
19
(3.4 L/100 km; 84 mpg-imp) for the EPA's highway rating, the most fuel-efficient mass-produced car at the
time. Total global sales for the Insight amounted to only around 18,000 vehicles.
Marketing
Japan
International efforts
In 2003, Honda released its Cog advertisement in the UK and on the Internet. To make the ad, the engineers
at Honda constructed a Rube Goldberg Machine made entirely out of car parts from a Honda Accord
Touring. To the chagrin of the engineers at Honda, all the parts were taken from two of only six handassembled pre-production models of the Accord. The advertisement depicted a single cog which sets off a
20
chain of events that ends with the Honda Accord moving and Garrison Keillor speaking the tagline, "Isn't it
nice when things just... work?" It took 606 takes to get it perfect.
In December 2005, Honda released The Impossible Dream a two-minute panoramic advertisement filmed in
New Zealand, Japan and Argentina which illustrates the founder's dream to build performance vehicles.
In 2006, Honda released its Choir advertisement, for the UK and the internet. This had a 60-person choir
who sang the car noises as film of the Honda Civic are shown.
In May 2007, focuses on their strengths in racing and the use of the Red H badge a symbol of what is
termed as "Hondamentalism". The campaign highlights the lengths that Honda engineers go to in order to
get the most out of an engine, whether it is for bikes, cars, powerboats even lawnmowers. Honda released
its Hondamentalism campaign.
Sports
In Australia, Honda advertised heavily during most motor racing telecasts, and was the official sponsor of
the 2006 FIA Formula 1 telecast on broadcaster channel "Ten". In fact, it was the only manufacturer
involved in the 2006 Indy Racing League season. In a series of adverts promoting the history of Honda's
racing heritage, Honda claimed it "built" cars that won 72 Formula 1 Grand Prix. Skeptics have accused
Honda of interpreting its racing history rather liberally, saying that virtually all of the 72 victories were
achieved by Honda powered (engined) machines, whereas the cars themselves were designed and built by
Lotus F1, Williams F1, and McLaren F1 teams, respectively. However, former and current staff of the
McLaren F1 team have reiterated that Honda contributed more than just engines and provided various
chassis, tooling, and aerodynamic parts as well as funding.
As part of its marketing campaign, Honda is an official partner and sponsor of the National Hockey League,
Honda also sponsors The Honda Classic golf tournament and is a sponsor of Major League Soccer.
Honda will sponsoring La Liga club Valencia CF starting from 2014-15 season. Valencia CF will carry
Honda Cars Valencia insignia at their football kits.
21
Chapter-3
MARKETING
STRATEGIES
22
MARKETING STRATEGY:
To make the brand a business asset, marketing activity was needed to make people feel good about owning a
Honda. Given where their current perceptions were languishing, this demanded making them radically
revalue the brand. It called for marketing activity that was part of a long-term commitment.
Honda's official slogan is "The Power of Dreams", however it has never used this to sell their products. It
was Mr. Honda's belief that well built products will sell themselves. Many of Honda's most remarkable
advertising campaigns have been released for the UK market, and have not been broadcast in North America
except on the internet. In 2003, Honda released its Cog advertisement in the UK and on the Internet. To
make the ad, the engineers at Honda constructed a Rube Goldberg Machine made entirely out of car parts
from the Honda Accord. To the despair of the engineers at Honda, all the parts were taken from two of only
six hand assembled pre-production models of the Accord. The ad depicted a single cog which sets off a chain
of events that ends with the Honda Accord moving and Garrison Keller speaking the tagline, "Isn't it nice
when things just... work?" It took 606 takes to get it perfect. In 2004, they produced the Hate Something
advert, which is still shown on British television now, usually immediately followed by a shortened version
of the 2005/2006 Impossible Dream advert. In 2006, Honda released its Choir advertisement, for the UK and
the internet. This featured a 60-person choir who sang the car noises as film of the Honda Civic are shown.
In December 2005, Honda released The Impossible Dream a two-minute panoramic advertisement filmed in
New Zealand, Japan and Argentina which illustrates the founder's dream to build performance vehicles.
While singing The Impossible Dream (The Quest), a man reaches for his racing helmet, leaves his trailer on
a mini bike, then rides a succession of vintage Honda vehicles; a motorcycle, then a car, then a powerboat,
then goes over a waterfall only to reappear piloting a hot air balloon, with Garrison Keillor saying "I couldn't
have put it better myself" as the song ends. The song is from the 1960s musical "Man Of La Mancha", sung
by Andy Williams.
In Australia, Honda advertised heavily during most motor racing telecasts, and were the official sponsor of
the 2006 FIA Formula 1 telecast on broadcaster channel "Ten". In fact, they were the only manufacturer
involved in the 2006 Indy Racing League season. In a series of adverts promoting the history of Honda's
racing heritage, Honda claimed they "built" cars that won 72 Formula 1 Grand Prix. Detractors scoffed and
called it "false advertising", saying that nearly all those victories were claimed by Honda powered (engined)
machines, with the cars themselves designed and built by Lotus F1, Williams F1 and McLaren F1 teams
respectively. However, former and current staff of the McLaren F1 team have repeatedly proclaimed that
Honda contributed more than just engines and provided various chassis, tooling and aerodynamic parts as
well as funding. Ayrton Senna, arguably the greatest F1 driver of all time, repeatedly stated that Honda
probably played the most significant role in his three world championships. He had immense respect for
founder, Soichiro Honda and had a good relationship with Nobuhiko Kawamoto, the chairman of Honda at
that time. Senna once called Honda "the greatest company in the world".
23
For the last several years, during model close-out sales for the current year before the start of the new model
year, Honda's advertising has featured an animated character known simply as Mr. Opportunity, voiced by
Rob Paulsen. The casual looking man talks about various deals offered by Honda and ends with the phrase
"I'm Mr. Opportunity, and I'm knockin'", followed by him then him "knocking" on the television screen or
"thumping" the speaker at the end of radio ads. Also, commercials for Honda's international hatchback, the
Jazz, are parodies of well-known pop culture images such as Tetris and Thomas The Tank Engine.
As part of their marketing campaign, Honda is an official partner and sponsor of Major League Soccer. In
late 2006 Honda released an ad with ASIMO exploring a museum, looking at the exhibits with almost childlike wonderment (spreading out its arms in the aerospace exhibit, waving hello to an astronaut suit that
resembles him, etc.), while Garrison Keillor ruminates on progress. It concludes with the tagline: "More
forwards please". Honda also sponsored ITV's coverage of Formula One in the UK for 2007. However they
have announced they will not continue in 2008 due to the sponsorship price requested by ITV being too
high.
In May 2007, focuses on their strengths in racing and the use of the Red H badge a symbol of what is
termed as "Hondamentalism". The campaign highlights the lengths that Honda engineers go to in order to
get the most out of an engine, whether it is for bikes, cars, powerboats even lawnmowers. Honda released
its Hondamentalism campaign. In the TV spot, Garrison Keillor says, "An engineer once said to build
something great is like swimming in honey." while Honda engineers in white suits walk and run towards a
great light, battling strong winds and flying debris, holding on to anything that will keep them from being
blown away. Finally one of the engineers walks towards a red light, his hand outstretched. A web address is
shown for the Hondamentalism website. The digital campaign aims to show how visitors to the site share
many of the Hondamentalist characteristics.
The following year, at the beginning of 2008, Honda release it's latest advert - the Problem Playground. The
advert outlines Honda's environmental responsibility, demonstrating a hybrid engine, more efficient solar
panels and the FCX Clarity, a hydrogen powered car. The 90 second advert features large scale puzzles,
involving Rubik's cubes, large shapes and a 3-dimensional puzzle. On 29 May 2008, Honda - in partnership
with Channel 4 - broadcast a live advertisement. It showed skydivers jumping from an aeroplane over Spain
and forming the letters H, O, N, D and A in mid-air. This live advertisement is generally agreed to be the first
of its kind on British television.
Within the longer-term objective was the fundamental and immediate-term one of selling more cars - be that
existing models or launching new ones. This was not to be a separate exercise, it needed to be central to the
whole strategy. The task was certainly challenging. As in many sectors, car customers are decreasingly loyal
and increasingly discerning. This is escalating the cost of retaining owners and acquiring new ones. It gets
harder car marketing has to shout through ever-growing noise, to be heard by an audience whose
24
willingness to listen is ever-waning. As a result, the quality of communications from car manufacturers has
progressed a lot in the last couple of years. In the old days it used to be rubbish. Its not now. Its harder to
cut through than ever. So much for the sympathy vote - what could the marketing team actually do to get the
brand spotted across the crowded room? They identified the necessity to:
Develop truly brave and different communications in order to get noticed.
Involve all stakeholders in the business, ensuring no opportunity was missed to make people
radically revalue Honda and feel better about owning one.
The Power of Dreams. What does that mean exactly? Or even roughly? It sounds like a cheesy self-help
book by Doctor Marybeth P. Scrimshanker. Or worse - one of those empty global corporation slogans. In
fact, this was a global corporation slogan - for Honda - and the Indian marketing teams first instinct was to
hope that if they ignored it for long enough, it might go away. In rummaging for insights that might bring
about a revaluation of Honda, a crucial breakthrough was made by Hondas advertising agency. At first you
couldnt see it for looking. The breakthrough came with the realisation that something internal could be used
as the external solution. The Power of Dreams was true to the spirit of how the corporation thought and
acted.
A full appreciation of the potency of Hondas DNA turned to frustration that it wasnt
understood outside. And so the marketing strategy was born; to expose the inner truth about Honda. No
global focus groups scavenging for consumer insights along with the other car manufacturers. No marketing
awaydays to retrofit a brand vision to customer needs. Instead, the confidence to believe that telling people
the truth about Hondaness would do the job. The job being to make them revalue the brand and feel better
about owning one. In other words, to make them want a Honda. Actually, not in other words those are the
exact words.
India is the most exciting auto market in Asia. It has great potential for growth," Tatsuhiro Oyama, chief
executive of Bangkok-based Asian Honda Motor Co, said at the new plant in Greater Noida. It is building a
new plant in the western state of Rajasthan that will add 60,000 units by the last quarter of 2009, officials
said.
Honda expects to sell 68,000 cars in India during the current fiscal year ending in March.The Society of
Indian Automobile Manufacturers (SIAM) expects a 14 percent growth in sales of passenger vehicles in
2007/08, from about 1.4 million sold in the previous year. Passenger vehicles comprise cars, utility vehicles
and multi-purpose vehicles. SIAM does not have projections for car sales, but Mukherji said nearly 1.1
million were sold last year. "We forecast the passenger car market to grow 16 percent in 2008/09, with the
premium car segment to grow more or less at the same pace," said Jnaneswar Sen, senior general manager,
marketing at Honda's Indian unit. In January, Honda had said it would bring to India a hybrid version of the
Civic in 2008, and launch the compact Jazz car by end-2009.
25
Multidomestic Strategy
Local markets are linked within a region
Gives top priority to local responsiveness interests and preferences.
A form of the differentiation strategy
Not limited to large multinationals
Transnational/Global Strategy
Gives two goals top priority:
seek location advantages
gain economic efficiencies from worldwide networks
Benefits
Cost reductions
Higher quality of products
Customer satisfaction can obtain and service product anywhere
Increased competitive power
International Strategy
26
A compromise approach
Global products, similar marketing techniques worldwide
Upstream and support activities remain concentrated at home country
Participation Strategies
The choice of how to enter each international market
1. Exporting
2. Licensing
3. Strategic alliances
4. Foreign direct investment
Honda introduced the hybrid Honda Insight in 1999, a two-seater targeted at tech-lovers. The initial
marketing strategy for the Honda Insight included a small budget for national television and Internet
advertising, most of which was spent on educational and promotional materials for dealers to present
regionally to local media. Currently, the Honda Insight is a small proportion of Hondas vehicle offerings: it
sells about 80-100 units per month in the U.S..
The Civic Hybrid, a sedan seating five, has taken off, experiencing a 59% increase from 2002 to 2003. It is
now the top-selling hybrid vehicle in the U.S. Hondas objective in creating the Civic Hybrid was to produce
a mainstream five-passenger sedan with superior fuel economy and solid performance that was as easy to
use as a conventional car.
In contrast with Toyotas efforts to position its hybrid sedan as a unique product initially geared towards
technophiles and then move on to pursuing the early majority, Honda introduced the Civic hybrid as a
product to appeal directly to the mass market, as the traditional version of the Honda Civic is the best selling
compact car in America. By leveraging its existing Civic brand, Honda produced a hybrid product that
included many of the features that consumers had grown to expect, thereby positioning the car as a standard
Civic with the added benefits of increased gas mileage and environmental friendliness. Because of this
existing brand equity and differential targeting, Honda did little to link the Insight to the Civic Hybrid.
More hybrid vehicles are due out later in 2004. Honda is rolling out a hybrid Accord and Toyota will be
producing a Highlander and Lexus RX 400. American manufacturers will begin offering hybrid versions of
popular truck/SUV models, with GM introducing the Chevy Silverado, GMC Sierra, and Dodge Ram Pickup
and Ford rolling out the Ford Escape (SUV) Hybrid.
Direct Exporting
More aggressive
Brand Voice
It sounds simple - just tell people the truth about Honda. Only, it wasnt. Hondas culture is one of rich
diversity and nuance. It would be doing it a disservice to boil it down to a couple of adjectives in the centre
of a brand onion. The multidimensionality of Honda is what makes it what it is. It would have been wrong to
ignore some of those shades, just for the sake of marketing simplicity. To build a brand with scale and
emotional depth required embracing and then communicating the whole culture.
28
A new tool was needed to paint a full portrait of Honda. Traditional tools would only allow for the capture of
some of the parts, rather than the sum of the parts. It needed to be a tool that would help all stakeholders
understand and feel Hondaness, and so serve as the springboard for all communications going forward.
Research showed that even Honda owners - the most important stakeholders of all had little familiarity
with Honda culture. They loved their cars but it was a case of, erm The Power of What, did you say? The
marketing team therefore hit upon the notion of creating something that could be put into the glove-box of
every new Honda. This was The Book of Dreams.
The Book of Dreams was constructed around Honda reality, and imaginatively defined a unique brand voice
for it. Crucially, it was much more than just a tone-of-voice to shove at the end of communications briefs. It
was the brief itself. It illuminated the Honda philosophy and way of behaving, whilst creating for the brand a
distinctive look, feel and even a vocabulary.
The process was a bit different from normal. Central to the books development was the teams
determination to merge creative strategy with execution. Subtle moments that create great communications
normally come from tonnes of decisions made in the execution phase. As such, the integration of what we
say and how we say it, early in the process, was fundamental to the books value. Indeed, such was its
value that The Book of Dreams provided the strategic and creative communications platform for two years.
German engineering prevails in the executive car sector. With the Accord, the challenge was to talk about the
engines engineering in a way that would make people feel the Hondaness captured in the book - imaginative
and innovative but human and optimistic. A sort of warm engineering. The diversity of Honda demanded
producing a body of diverse creative approaches, all knitted together with the newly defined Honda brand
voice. Above-the-line, this meant getting this voice across whilst making heroes of a wide range of vehicles,
technology and philosophy.
By 2003, the stats showed that Honda was on the top of a lot more minds than it had been before the
campaign began. Familiarity with the brand had also improved - so people claimed to know more about
Honda. The next link in the chain was vital. The whole strategy was based on the belief that making people
know more about Honda would lead to them wanting one. As the chart shows, this was achieved to the tune
of a 36% increase in desire, and blow-outs being almost halved.
29
Graphs 2.1
But what about Honda owners? This wasnt one of those marketing briefs with mustnt alienate current
users on it. The communications needed to do more than that - they had to make owners proud to say I
drive a Honda. Tracking amongst owners demonstrated improved familiarity with Honda and considerably
greater desire to have one for their next car.
Graphs 2.2
More specific shifts in brand image were also measured. Data from before the re-launch wasnt available,
unfortunately, so the following chart shows changes between post-re-launch and the end of 2007.
30
Graphs 2.3
PR tracking showed that the campaign generated much improved press coverage for Honda City. There was
increased volume of the very good kind of PR. In addition, there was a very positive impact on very
positive impact scores (a calculation which factors in everything from circulation to article size to page
location).
So the brand measures were showing that the communications were making people feel better about Honda.
So far so good. That was just the fluffy stuff though. Important fluff, of course, but was this brand
revaluation getting people to actually do anything?
Graphs 2.4
31
Getting people to visit your website or give you a call is hard enough, but getting them to take the time and
trouble to go to your showrooms is even tougher. The campaign persuaded more people to do just that.
Graphs 2.5
Not only were more people going to these dealerships, but after the campaign launch, a higher percentage of
those trips led to a sale. The dealers, who had been brought into the whole Power of Dreams programme,
were clearly doing a great job. Plus, people were walking into dealerships feeling better about owning a
Honda, and so more of them came out holding the keys to one. The combination of more showroom traffic
and higher conversion rates naturally led to a significant increase in total Honda sales. Honda had sold
66,981 cars in the year up to the campaign launch. By the end of 2007, the annual figure had risen to 81,858.
Thats an increase of 22%.
There were a number of success stories from individual models. The Honda CR-V was one such case.
Awareness overtook that for Freelander - the sector leader - and sales growth was considerable and
sustained. The evidence was there to vindicate the thinking of the marketing strategy. Telling people the truth
about Honda, communicated in the right way, made them feel better about the brand. A better feeling about
the brand led to their greater desire to own a Honda car. This increased desire translated into increased
action; 22% more signing on the dotted line-type action, to be precise.
In a market where you have to run really really fast just to stand still, any growth at all could be regarded as
successful. 22% growth represents a lot more than standing still. Marketing communications were created
that were not only different for the category, but different for any category. That differentiation was delivered
with a relevance that successfully argued the truth of Hondas case. The communications were provably
noticed and acted upon. This is a story about confidence. Not about coming across as confident, but rather
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about a having the conviction to behave differently. I t s a story about having the intuitive confidence to
believe that simply communicating a companys culture can be persuasive. Perhaps more importantly, it s a
story about having the confidence to communicate that culture with unique creative bravery.
Rebates are only a small portion of the marketing activities that are used to increase the sales of new cars.
They are the most well known but not necessarily the most effective incentives. Honda has never played the
rebate game. That doesn't mean that they don't have marketing programs to move the metal when necessary.
Honda's two main incentive programs are sub vented financing and discounted leases. A sub vented
financing program is where the distributor buys down the interest rate on the life of a loan to make the
monthly payments more affordable to the buyer. For example, if the going rate on a 6 year car loan is 6.9%,
Honda may buy it down to 2.9% by using marketing money to pay the other 4% interest fees. Similarly, with
discounted leases, Honda may apply marketing monies to the lease costs to make a car that typically leases
for $249 per month available for a discounted lease rate of $199 per month. In either case, the interest rate or
the price of the car did not drop; Honda used its marketing funds to make the monthly payment more
affordable and to make the deal more attractive to the customer. In addition to these two marketing
strategies, Honda often pays incentives to the dealers on a per car sold or aggregate sales amount so that the
dealer will reduce the price of the car to the customer to move the product. They also pay money to the sales
peope at the dealership as a bonus for specific units sold above and beyond what the dealer pays them. They
may also offer the salesperson an entry into a cash bonus lottery for each Ridgeline sold that guarantees them
a minimum amount per Ridgeline but a chance to win much more in order to get the sales consultants to
promote the slower moving models. Automotive incentives are an industry in and of themselves. These are
not the only ways that are used to increase sales but they are the most popular ones used by Honda instead of
using rebates.
Honda is exploring the option of producing the 3.8-metre-long Jazz with a sub-1.2-litre engine to meet the
new small car criteria and avail of the resulting 8 percent excise benefit. Honda has announced aggressive
expansion plans that could see the Japanese automaker triple its car sales volume in India from 50,000 units
a year to 150,000 units by 2010. The importance of the Indian market was emphasized by Takeo Fukui,
Hondas global chief, who flew down to India to launch the much-awaited Civic. Fukui openly remarked
that India in the long term was a better bet for Honda than China, which makes it the most important market
in the region with the highest growth potential. Underlying Hondas commitment to India is the companys
50 percent market share of the seven-million-strong two-wheeler market. In fact, India is the largest twowheeler market in the world for Honda.
The Civic is Hondas most important model after the highly successful City and comes at a crucial time to
plug the wide gap that existed between the City and Accord. Honda is confident of selling over 1,000 units a
month and is poised to snatch market share from the Civics' arch rival, the Toyota Corolla. However, like
every other manufacturer, Honda knows that growth in India can only come with small cars and the
company announced that it is investigating a new model below the City. Fukui hinted that there could be two
33
models below the City; possibly the Jazz based on the City platform, which Honda has been considering for
a while now and a smaller hatchback.
34
Chapter-4
DATA ANALYSIS
AND
INTERPRETATION
35
22 percent
Graphs 4.1
INTERPRETATION:
As predicted, it is the brand Maruti which dominates the Indian car market, followed by TATA and Santro.
Honda constitutes a significant partner in the car market in India.
2. Are you satisfied with your present car?
(a) Yes ----------------------
67 per cent
(b) No -----------------------
33 per cent
Graphs 4.5
36
INTERPRETATION:
The satisfaction rate among the customer regarding their present car is at the comfort level of 67 per cent.
The rest 33 per cent is a potential market for the other companies to penetrate into this.
42 percent
11 percent
21 percent
12 percent
14 percent
Graphs 4.2
INTERPRETATION:
In this study, It is observed that 42% Maruti, 11% Santro, 21% Tata, 12% Honda, 14% others cars have been
used by users in the past & mostly users satisfied with Maruti cars.
4. What are the factors that influenced you to buy your present car?
(a) Features and Design ------------------------
35 per cent
10 per cent
28 per cent
15 per cent
12 per cent
37
Graphs 4.3
INTERPRETATION:
Designing and features of the car accompanied with the safety and comfort measures and the affordable cost
are the factors which went for the car to be bought by the customers.
5. Have you used Honda earlier?
(a) Yes ----------------------
25 per cent
(b) No -----------------------
75 per cent
Graphs 4.4
INTERPRETATION:
75 per cent of the users had not experienced Honda driving earlier ?
38
6. If you are Honda user , would you like to go for a Honda car again?
(a) Yes ----------------------
78 per cent
(b) No -----------------------
22 per cent
Graphs 4.6
INTERPRETATION:
This is one good news for Honda as 78 per cent of the respondents opined that given a choice, they would
opt for a Honda car.
40 per cent
06 per cent
23 per cent
18 per cent
13 per cent
39
Graphs 4.7
INTERPRETATION:
Cost and mileage are the two basic reasons for the customers to be diverted from Honda choice.
8. At what period you would like to replace your old car or buy a new car
(a) 0 2 years ----------------------------
15 per cent
22 per cent
25 per cent
28 per cent
40
Graphs 4.8
INTERPRETATION:
Most of the people use their cars for 4 to 6 years before replacing them with a new car.
9. What source of information you looked out for in order to gather data about various cars available
in the market? You can choose more than one option, if applicable.
(a) Newspaper and Magazine ---------------------------
84 per cent
76 per cent
94 per cent
56 per cent
21 per cent
05 per cent
41
Graphs 4.9
INTERPRETATION:
The study has reveled that the customers depend on various multi media publicity measures to gather their
information before finalizing on a car. The word of mouth publicity has a significant role to play here and
this directly related to satisfaction of the existing customers.
70 per cent
21 per cent
04 per cent
05 per cent
42
Graphs 4.10
43
CHAPTER -5
CONCLUSION
44
While India isnt the most competitive market in terms of number of players, it is perhaps the worlds most
price-competitive one. Its a much protected market, and highly strategic because of this huge countrys
potential. Due to the high import taxes, you cannot import finished vehicles unless they are near-luxury cars.
However, to achieve long-term growth and sustainability in a market like India, you clearly cannot sell high
volumes unless you manufacture locally.
In the car world, the B and C segments still have the biggest growth potential. We will be facing Korean and
other Japanese competitors at first, but also going up against strong local manufacturers that have been in
business for decades. The market leader holds a 50 percent share and imposes pricing pressure on the other
players. For near-luxury cars the market is much more open, but the volumes are smallbetween 1,000 and
10,000 cars annually, even with four or five cars in your portfolio. You can begin building your brand
strategy and image with near-luxury models, but that wont build a complete and profitable business. At
some point you need to push the higher-volume cars by making them locally.
The growth in exports will be much steeper than for domestic sales, so initially the company is planning to
use Chennai for exports. Their strategy is to pursue a two-step manufacturing approach, starting with one
dedicated line at a plant capacity of 30 jobs per hour, which translates into 180,000 units per year. If
everything goes well, they will go up to 45 or even 60 jobs per hour within three or four years. Although our
plans for using India as an export base arent finalized, potential targets are mature markets such as Europe,
the U.S. and Japan.
Honda will be entering a new price band through India. If they are frugal in the way they engineer,
manufacture, and distribute their cars, they can compete effectively with their competitors. That means
leveraging the multiplier effect by combining excellent design-to-cost engineering with a well-designed
supplier footprint, the most economical marketing and sales activityin terms of fixed market expenses and
direct incentivesand great logistics. In the entry-car world, only the people who excel in all those areas can
survive. Using the local supplier base is cost-competitive, and for vehicles sold locally, youre decreasing the
currency risk between your revenue footprint and your expense footprint. Thats why its so important to
45
work with local people, and avoid shadow localizationjust assembling parts from abroad. Their dealership
strategy is to build a dedicated Honda network without buying the assets, so they are going to be making
deals with specific partners that will own those dealerships. To meet their projected growth in India during
the next decade, they will need to grow their dealer network significantly. The Company wants to hedge the
business risk in India by having one partner for manufacturing and a different one for distribution, because
understanding local business practices and labor regulations, as well as managing union relationships and
media relationships, are specific skills. Using India as an LCC or leading competitive country is a huge
challenge. First it needs to have a localization rate of 90 percent or higher. Thats possible if the powertrain
is localizedat least the assembly and some core parts. Second, procure parts from the local supplier base.
Third, dont just throw the specs on the table and ask your suppliers to build. That means leveraging the
skills of their engineers, who will continue to shift their mindset. To compete successfully in India, they
need to redesign their vehicle parts to adjust for local factory tools, the local way of doing things, and even
different materials.
46
REFERENCE
47
BOOKS REFERRED TO
1. Structural Configuration and Strategic Investments
2. Indian Automobile Industry: Patterns of Expansion, Entry and Performance
3. Structural analysis of the Indian Automobile Industry
4. INFAC Cars Industry Report on Indian passenger car market
5. Entry Strategies in Emerging Economies: The Case of the Indian Automobile Industry
SITES REFERRED TO
(i).
www.Wikipedia.com
(ii).
www.autointell-news.com
(iii).
www.hondasielcarsindialtd.com
48
ANNEXURE
49
Yes
(b)
No
Cost
(b)
(c)
Mileage
(d)
Other factors
(e)
8. At what period you would like to replace your old car or buy a new car
(a)
0 2 years
(b)
2 4 years
(c)
4 6 years
(d)
6 & above
(e)
9. What source of information you looked out for in order to gather data about various cars available
in the market? You can choose more than one option, if applicable.
(a)
(b)
Dealer Recommendation
(c)
(d)
(e)
Others
(f)
51