Marketing Plan of Honda's New Bike - Case Study Example

MARKETING PLAN JJ BIKES Table of Contents Page 0 3 2.0 Introduction 4 2 ST1300 4 3.0 Situation Analysis 4 3.1 Macro Environment 5 3.2 Market Demographics 6 3.3 Market Needs 7 3.4 SWOT Analysis 7 4.0 Marketing Strategies 8 4.1 Marketing Objectives 8 4.2 Financial Objectives 9 4.3 Target Marketing 9 4.4 Positioning 9 4.5 Services and Service Marketing 10 4.6 Pricing 10 4.7 Promotion 10 4.8 Product 11 4.9 Channels of Distribution 11 5.0 Conclusions 11 6.0 Bibliography 12 1 Abstract Honda’s new bike called the ST1300 has been described and the marketing plan for the same has been discussed with the aim of selling 15000 units in the first year. The marketing strategy targets the mid-level segment which is the most paying segment of all and is also cost conscious. The ST1300 is aimed at them as Honda considers it most suitable for them. A PEST and a SWOT analysis have been included to explain the external and internal factors that can and will affect this marketing plan. It has been found that both are favourable and there is no real threat and the launch and marketing should be successful subject to following the marketing plan. 2.0 Introduction JJ Bikes (JJB) was established 5 years back. Initially the business was commenced from an old car showroom in London suitably converted into a Motorbike showroom. Now they have 10 showrooms in London, Manchester and Glasgow. It had acquired the exclusive agency for UK from Honda, a leading Bike manufacturer. A new Bike called ST1300 from the Honda stable will be launched in the UK market from its showrooms in two months time and a Marketing Plan is being devised for this purpose. 2.1 ST1300 The ST1300™ was created for riders who love performance as much as they love a day in the saddle. Touring features include full-coverage bodywork, three-way adjustable riders seat, large detachable saddlebags and an electric, push-button adjustable windscreen. Performance features include a powerful, liquid-cooled 1261cc V-4 engine with Programmed Fuel Injection in an aluminium frame that combines excellent handling and superb riding comfort. Linked braking is standard, and theres even an optional Anti-lock Braking System available. Its the best sport-touring bike on the road. (Honda) 3.0 Situation Analysis JJB marketing manager is required to work out a Marketing Plan along with the Honda Sales Manager. This is then to be submitted to the Honda Sales & Marketing Director. The prerequisite to this effort is the study of various internal and external factors that will affect this launch. Honda expects to sell 15000 bikes in the first year and have allocated a budget of £ One Million for a wide variety of publicity and promotion campaigns. JJB is expected to pitch in with its own advertising blitz with another £ 200,000. 3.1 Macro Environment The external environment, also known as the Macro environment is comprised of factors that are beyond the control of the company. This comes out very well when a PEST analysis is conducted. PEST stands for Political, Economical, Socio-cultural and Technological factors. PEST Analysis Political Analysis. There is one factor that can restrict the growth of JJB. The Green Movement is dead against pollution and as such wants restrictions placed on fuel guzzling and carbon producing vehicles. This has put a lot of pressure on the government who is compelled to bring out legislation to add taxes as a deterrent as well as to lay down very strict environmental standards that lead to increase in costs Economic Analysis. Bikers are usually from several segments; those who have just got employed, are single or just married, and those middle aged persons whose children are economically independent and wish to be re-born bikers. They also can be those who cannot afford to use their cars for travelling to the city due to restrictions but can afford to have a bike as a second vehicle. Apart from these other bikers are teenagers who have just come of age who usually cannot afford expensive bikes and go for inexpensive or second hand bikes... Socio-cultural Analysis. An upcoming segment is the women bikers who opt for light bikes. They are no longer inhibited and are not averse to enter the otherwise largely male dominated mode of transport and fun. Technological Analysis. There has been a vast improvement in technology which has made bikes trouble free and more easy to use. The technical improvements have made it possible to make riding more comfortable and fuel efficiency has increased affordability. (PEST) It can bee seen from the PEST analysis that external factors are generally in favour of increase in business. The Green movement is not really a deterrent as the carbon emission is less in bikes and much more in cars. Also congestions in the cities have also made bikes a more attractive proposition. With economic upliftment and additional employment opportunities the biking industry is poised for further growth. The introduction of scooters and lighter bikes is helpful in adding women to the list of bikers and the utility value is enhancing the overall market. 3.2 Market Demographics The market for bikers is divided into several segments. These are as described as under: Age Group Demography Need Preference 18-21 Newly Employed Newly Married Single Fun Performance Conveyance Medium Range and High Featured Bikes 22-35 Mid-Level Executives City Travelling Medium Range 36-55 High Paid Executives Casual Travel Fun High End Bikes Classics 3.3 Market Needs With growing employability the need for transport and fun is on the rise. This augurs well for the transport industry in general. Since the younger population is becoming mobile due to spread of the economy, bikes have a huge demand due to their manoeuvrability and moderate prices as compared to four wheelers. There is room for expansion in business. 3.4 SWOT Analysis A SWOT analysis offers the management a quick review of the status to arrive at fast decisions. SWOT means strengths, weaknesses, opportunities and threats. This is the Swot analysis of JJB. Strengths 1. JJB Image 2. Exclusivity as Honda Dealer 3. Accessories available 4. Service and Spares Weaknesses 1. Three outlets only Opportunities 1. Expanding Market 2. Tie-up with Race Tracks 3. Training facilities 4. Special section for women Threats 1. Other competitors with more outlets 2. Service Stations offering Service/Spares (Value based Management) The Swot analysis also points to the fact that to convert the threat into opportunity lies in adding more showrooms or to have sub-dealers across UK to reach a wider audience. 4.0 Marketing Strategies A proper segmentation will help in defining the target customers. Once this is done the sections in the showroom should be designed to suit the tastes of the buyers. Further the sales staff should be recruited and trained to handle each segment according to their preferences and tastes. Internal ambience should match the needs of the customers. Externally advertisement and publicity would be organised according to targeted segments. Bike Magazines are very popular and favourable write-ups are needed to be given about JJB at frequent intervals announcing new arrivals, schemes and offers to entice customers. It is also advisable to enter into competitive racing under JJB and Honda banner to promote the name and build customer recall. Training facilities should be enhanced and assistance given to new comers in obtaining Licence from Authority. 4.1 Marketing Objectives The Marketing Objective is to have a Plan that is both achievable and measurable. The targets are to be set for each move or action, both financially and in terms of other resource allocation like personnel. The measurability can be gauges by giving it a time frame with set conditions of money and material resources. The marketing objectives section will indicate targets to be achieved across several marketing decision areas.  Marketing success can be measured on several non-financial market metrics. (How to write a Marketing Plan) 4.2 Financial Objectives JJB should allocate the amount of £ 200,000 on external marketing plan and £ 50,000 on the internal plan. The external plan includes expenditure on market research to segment and target the market and customers engage advertising agencies and models for reaching the intended target market and to locate and spend on areas like training and brand promotions through participation in racetrack events. The internal expenditure is to be mostly on educating the employees and training staff on how to handle the customers for maximum effect. 4.3 Target Marketing This is part of segmentation of the market and will deal with how to research the needs of the customer of the targeted segment. There is need to find out the customer buying pattern and behaviour pattern which will eventually categorize the size of the market. This will help in finalizing the quantum of product range that will be projected for sales. 4.4 Positioning In marketing positioning has come to mean the process by which attempt is made to create an image or identity in the minds of their target market for its brand and range of products, or the organization itself. The aim is to develop a perception in the mind of the target market about the brand and image. For this purpose the marketing division plans advertising, promotions, publicity and other similar methods to create this impression in the hope that whenever the customer thinks of the product or item the name of the company or its brand is instantly recalled in their mind. 4.5 Services and Service Marketing Servicing plays a vital role and this should be enhanced with the latest machinery and equipment for both fast and quality service. It is also recommended that this aspect of business should be highlighted with sales as well as otherwise communicated to both customers and non-customers. This will lead to adding customers as those who come for service only will be attracted for their next purchase by the quality of service provided. Service also includes sales of spares and it is a profit centre by itself and therefore needs special attention and competitive pricing. It is further suggested that with every sale a few free services should be thrown in to retain the customer. 4.6 Pricing While pricing has to be aggressive yet they must not be ridiculously reduced as they contribute to the bottom line. The price marking should be near about that offered by competition and instead of reducing prices it is advisable to give extra attention to quality and some extra accessories that will attract the customer and retain his loyalty for the future. An incentive scheme or a prize winning lottery scheme is also advised. Magnet has been priced at £ 3,000 which is very near the prices offered by competition for similar features like Ducati, Harley Davidson, Kawasaki. Suzuki,Yamaha, BMW, Piaggio and Peugeot. 4.7 Promotion There is a difference between promotion and publicity. Promotion is best achieved through organizing sales, road shows or by participation in third party events like race track appearances, exhibitions and sometimes by involving in charity or similar events that give great exposure to the company or the product. 4.8 Product The product is the central point of the whole marketing effort. The ST1300 has excellent features and is aimed at the Mid-level Executive segment which is the highest paying segment of the market. It has performance as well as excellent pricing in its favour. 4.9 Channels of Distribution Sub-dealerships for JJB would be an ideal situation where the company can cater on a wider geography without having to invest in resources. For a small price ST1300 can be sold to a wider audience for a small commission. JJB should target to have at least 20 more showrooms selling the ST1300 to achieve the sales target. 5.0 Conclusions The outlined plan is quite in line with the strategic moves of the company and should be fruitful in the short term. In the long run, the results will be able to define more areas that will require attention to get more mileage out of such future plans. 6.0 Bibliography Dibb, Simkin and Bradley, The Marketing Planning Workbook published in 1996 by Thomson (London). Honda ST1300 technical details available at: http://powersports.honda.com/2008models/#ST1300 How to write a Marketing Plan available at: http://www.knowthis.com/tutorials/marketing/marketingplan1/10.htm PEST Analysis available at: http://www.marketingteacher.com/Lessons/lesson_PEST.htm Value based Management available at http://www.valuebasedmanagement.net/methods_swot_analysis.html Read More