Marketing Plan for Honda Civic - Case Study Example

Executive summary This marketing plan for Honda seeks to outline the strategies that can be implemented by the company to market its Honda Civic hybrid car that is powered by gas. This plan mainly looks at the communication strategies that ought to be implemented by the organization in order to appeal to the interests of the targeted audiences. There are different promotional tools strategies like advertising, PR and promotion that can be integrated by the organization in order to attract as many customers as possible. Thus, this report has been specifically designed to outline the overall marketing plan for Honda in order to improve its operations which have been declining during the recent past years. Table of contents 1.0 Introduction 3 2.0 Current marketing situation 3 2.1 Financial situation 4 2.2 Market description 5 2.3 Product review 6 2.4 Competitive review 7 2.5 Channel and logistics review 8 3.0 SWOT analysis 8 4.0 Objectives and issues 10 4.1 First year objectives 10 4.2 Second year objectives 11 4.3 Issues 11 5.0 Marketing strategy 12 5.1 Positioning 12 5.2 Product strategy 12 5.3 Pricing 12 5.4 Distribution strategy 13 5.5 Marketing communication strategy 13 5.6 Marketing research 14 6.0 Action programs 15 6.1 Design the message 15 6.2 Implement the marketing strategy 15 7.0 Budgets 16 8.0 Controls 16 Conclusion 17 References 18 Table 1: Five year financial overview for Honda 5 1.0 Introduction Marketing plays a pivotal role in as far as the success or failure of a particular market offering is concerned. The advent of new information and communication technology has significantly improved the marketing landscape and it can be seen that the marketers who are concerned about the success of their organizations often use integrated marketing communication. The success of an organization depends with the marketing plan in place hence the reason why Honda ought to revisit its marketing plan in order to revitalise its operations particularly the performance of the Honda Civic. A marketing plan can be described as “a concept that recognises the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines such as advertising, personal selling, sales promotion, direct marketing, public relations, sponsorship,” (Cant, 2000 p.285). This helps the organization to integrate its marketing activities so that a clear, consistent and compelling message about the product being offered by the company is delivered to the targeted people. Kotler & Armstrong (2004) also suggest that a clear marketing plan helps the company to reinforce its image through timely delivery of corporate messages as well as positioning of the product offered. As such, Honda’s marketing plan ought to include effective use of disciplines such as advertising, personal selling, public relations, direct marketing as well as sales promotion. In this particular case, the aim of the marketing plan is to turn around the fortunes of the company through offering the Honda Civic brand to the targeted customers. The marketing plan for Honda is comprised of different segments. 2.0 Current marketing situation This section of the marketing plan looks at the current marketing situation of the organization. This section mainly looks at the following components of the marketing activities of the organization: financial situation, market description, product review, competitive review as well as channels and logistics review. The review of the current marketing situation helps the company to make informed decisions in as far as development of a marketing plan for its Honda Civic model is concerned. This can also help to improve the operations of the company during the period it introduces this new brand to the customers. 2.1 Financial situation The financial statement of Honda shows that its revenue has been decreasing within the last five years except in 2010. According to Redmayne Bently (2013), Honda’s revenue continued to decline especially in 2009 due to the global economic recession that affected most parts of the world. The Growth Rate was -25%. However, in 2011 the global economic rebound witnessed a profit increase for the company. For example the profit margin for Honda in 2011 to 2012 increased from 6.5T (yen) to 5.92T (yen). However, the earthquake and Tsunami in North Eastern Japan and the flooding in Thailand disrupted parts supplies and production for all Japanese automakers in 2008/9 fiscal years. The financial performance of Honda has also been impacted by the slow sales of Japanese cars in China. Overally, it can be seen that Honda witnessed a decline in revenue over a five year period from 2008 to 2012 as shown on the table below. Table 1: Five-year financial overview for Honda at end of year 2008 2009 2010 2011 2012 Stock Price $18 $33 $38 $27 $35 Revenue( JPY) 12T 10.01T 8.58T 8.94T 7.95T Profits(JPY) 953109M 189643M 363775M 569775M 231364M Profit Margin 5.00% 1.37% 3.13% 5.98% 2.66% Growth Rate -14% -25% -16% 13% -14% (http://www.redmayne.co.uk/research/securitydetails/financials.htm?tkr=HNDA) 2.2 Market description Established on September 24, 1948, Honda Motor specialises in manufacturing and selling automobiles to different parts of the world. As of March 31 2012, the company had a capital of $86 billion, 187,094 employees and 378 subsidiaries around the world (AutofairHonda, 2012). Honda specifically focuses on economic cars which have low prices and they are comprised of a fuel consumption system that is user friendly. Honda has significantly contributed towards the growth and development of the automobile industry across the whole globe. The company offers a wide range of vehicles models. About 70 % of the automobile sales are in Japan while only 30% of the vehicles manufactured are exported to more than twenty countries across the globe. Honda has different models of automobiles which include the following: Accord, CR-V, and Civic, Crosscourt for example. Honda uses advanced technology in manufacturing its automobiles which make the safe and it is one of the first companies to pass the US Clean Air Act. The other types of technologically advanced cars that are made by Honda include the following: Hybrid, Fuel Cell, Electric and Natural Gas. Honda’s cars are very popular among different people in the world as a result of the fact that they are economic and they are environmental friendly. 2.3 Product review According to AutofairHonda (2011), the 2011 Honda Civic GX uses natural gas and it does not use fossil fuels like other conventional vehicles. Civic Hybrid includes the following brands: Civic Sedan and Civic Coupe, high-performance Civic Si Coupe, gasoline-electric Civic Hybrid, Civic Natural Gas and Civic HF with a lithium-ion battery for the first time on a Honda hybrid vehicle. For instance, the Civic Hybrid has an EPA-estimated fuel economy rating of 44 mpg city, 44 mpg highway and 44 mpg city/highway combined. This makes it the most fuel-efficient vehicle. This model car was developed after realising that automobiles were significantly contributing to greenhouse gas emissions that contribute to the destruction of the environment. One good thing about the Honda Civic 2011 for example is that it is classified as a luxury vehicle which is environmental friendly and it appeals to the interests of a unique segment of customers hence the reason why a clear and concise marketing plan for Honda ought to be developed in order to stimulate sales. Thus, according to Jessica Fini, the Senior Environmental Specialist with Honda (2011), Honda Civic GX was designed so that it could appeal to the interests of a specific segment that is distinct. The picture below shows an example of 2011 Honda Civic GX Natural gas vehicle. Indeed, this is a very attractive vehicle that appeals to the interests of as many customers as possible across the globe. This model vehicle has unique features that make it distinct from other vehicles that are offered by the other players in this particular industry. 2011 Honda Civic GX Natural gas vehicle 2.4 Competitive review Honda faces competition from other established players in the motor industry such as Mercedes - Benz, BMW, Audi and Toyota. Of notable concern is the fact that all of the above mentioned actors in this sector have Hybrid vehicles especially Toyota Hybrid. As a result of the fact that Toyotas product positioning is same with Honda given that both of them build economic Hybrid cars, it can be seen that this poses a threat to Honda’s viability. For instance, Honda and Toyota are pioneers of hybrid cars which entails that competition is large in the hybrid motor sector. For example, Honda Civic Hybrid and Camry hybrid are two models of vehicles that directly compete with each other in the motor industry. Competition is intense in this particular sector of the market. 2.5 Channels and logistics review The company uses different channels to distribute and market its vehicles to different targeted customers. For instance, cars are distributed through Honda Car Dealers in different parts of the globe where the company operates. The other marketing communication tool that is used by the company is Honda Prius website. This specially designed website is used to communicate with all the customers and it can also be used to facilitate business. The company also uses advertising and direct marketing to attract the customers to buy the vehicles it offers. The company also uses the strategy of convening automotive conferences as well as exhibits to appeal to the interests of many people who may buy the vehicles. Since automobiles are difficult to move, there are shipped directly to the dealers across the world. This makes the vehicles easily accessible to the potential buyers across the globe. 3.0 SWOT analysis for Honda SWOT stands for strengths, weaknesses, opportunities as well as threats and these are internal as well as external factors that affect the operations of a given organization Strydom, 2004). The section below carries a SWOT analysis for Honda in a bid to make informed decisions in as far as the marketing plan for the company is concerned. Strengths The main strength for Honda is that it is renowned for making a wide range of popular vehicle brands to different customers across the globe. The other strength of the organization is that it manufactures efficient vehicles which use natural gasoline that is widely available in different states especially in the US. The other strength of Honda is that it has been named for the seventh straight year in a row as the “Greenest vehicle of the year” by the American Council for an Energy Efficient (ACEEE) (AutoFairHonda, 2011). This has helped the company to grab a large market share since it is in a better position to create trust among its targeted customers who have developed loyalty as a result of the fact that they gain value for their money. Weaknesses The main weakness of Honda is that the price of the new Honda Civic GX is beyond the reach of many people. For instance, this model vehicle is priced at $26, 155 and this price is beyond the reach of many people (Consumer News, 2011). The price of this particular model car deters the would be buyers since they may not be in a position to fork out such a large amount of money against other pressing financial problems. This means that only the rich and affluent people can afford to buy the Honda Civic. Honda Civic has also been criticised for having a numb steering wheel. This weakness ought to be addressed in order for the car to attract as many customers as possible. Opportunities Since Honda has been voted the greenest vehicle by ACEE, it can harness on this opportunity since there is growing concern across the globe for motor industries to manufacture cars that are environmental friendly. The other opportunity for Honda is to capitalise on its innovative strategy through manufacturing energy saving vehicles since these are increasingly attracting a lot of customers across the globe. Emerging markets in strong economies like China also serve as a great opportunity for the company since it capitalise on these new markets to boost its sales. Threats Competition in the automobile industry is the major threat to Honda. There are rival players in this industry and these include Toyota, Mercedes Benz, BMW, Audi and Nissan among others. These players also manufacture state-of-the-art vehicles which also attract a large number of customers. For instance, Toyota and Chrysler also manufacture hybrid vehicles and these are in direct competition with Honda’s hybrid car. This entails that these actors in the automobile industry are competing for the same customers and this is the reason why a strong marketing plan ought to be implemented. Competition can threaten the viability of the company if a holistic approach is not taken by the company involved. 4.0 Objectives and issues The main objective of a marketing plan is to identify the target audience and to shape a well coordinated promotional program to obtain the desired audience response (Kotler & Armstrong, 2004). Therefore, this section of the paper outlines the main objectives of the marketing plan for Honda. 4.1 First objective The first year objective for Honda is to focus on overcoming immediate awareness, image or preference problems in the targeted market due to the fact that the Honda Civic is till new in the market and it is comprised of unique features that may not be readily understood by the customers. Since there are different customers targeted, it will be imperative for Honda to design its communication so that it suits the interests of different segments as well as individual customers. Thus, the primary focus for the company is to put measures that are designed to reach the targeted consumers so that they can generate knowledge about this particular brand which is still very new to the market. People ought to generate awareness of this product so that they can respond to the new offering in the market. 4.2 Second year objective The second year objective is to promote the brand so that it becomes deeply entrenched in the market. Promotion in this case should be used to emphasise the benefits that are likely to be obtained from using the Honda Civic such as efficiency and the environmental friendliness features that characterise the car. This can be done through providing all the information about the vehicle so that people can make meaningful decisions when they decide to purchase this particular car. This can also help to build a strong customer base for the company which can improve its performance in terms of the sales of the cars to different customers. 4.3 Issues The likely issues that are likely to be encountered in this marketing plan are related to the aspect of pricing. Some people may not be able to afford the vehicles of this type since they are specialty cars. Therefore, constant reviews ought to be taken so as to address this problem. The other issue that can be encountered is related to lack of information about the Honda Civic by the people in different markets. Different forms of communication media such as the internet will be used in order to address this particular problem awareness campaigns ought to be implemented in order to attract as many customers as possible so that the Honda Civic can be a success in the market. 5.0 Marketing strategy Different marketing strategies will be implemented in order to improve the performance of the brand in the market. This section of the plan outlines the marketing strategies that can be implemented in order to improve the viability of Honda. 5.1 Positioning of Honda Civic The Honda Civic GX belongs to the luxury vehicle category which mainly targets people who have interests in fashionable vehicles that are also energy savers. This vehicle should be positioned in such a way that it specifically targets people who are concerned about protecting the environment. This vehicle should also be targeted at people who are rich especially the affluent age group between the ages of 25 and 45 as observed by (AutoFairHonda, 2011). Honda Civic GX is a niche vehicle that is intended to appeal to the interests of a clearly distinct segment of the population. 5.2 Product strategy The rational appeal strategy should be used in the case of Honda Civic Natural Gas car. The rational appeal relates to the audience’s self interest and they show that the product will produce the desired benefits to all the customers who purchase the product (Kotler & Armstrong, 2004). The product should be presented in such a way that the message says all about it. For instance, the message should reflect that the product is comprised of good quality, it is valuable and it offers excellence performance. This will help the organization to appeal to the interests of many customers. 5.3 Pricing A holistic approach ought to be taken when setting the price of the Honda Civic. Indeed, it is a unique vehicle but the issue is that it has to be priced within reasonable limits that may not deter the customers from purchasing this model vehicle. The level of income of the targeted people ought to be established so as to allow the company to make meaningful decisions with regards to the issue of pricing. Market forces such as the price of similar vehicles ought to be established as well since this can help the company to make realistic prices for this particular brand. 5.4 Distribution strategy In order to reach a wide number of customers, Honda ought to use dealers who will sell as well as distribute the cars to different customers. The advantage of using dealers is that they are located closer to the people. Since they specialise in selling cars, they are in a position to convince the targeted people so that they can buy the market offering. The dealers can also negotiate on behalf of the company which helps it to focus on its core business. In this case, Honda can focus on its core business it delegates the dealers to distribute the vehicles to different places around the globe. 5.5 Marketing communication strategy In this case, Honda should use integrated marketing communication strategy. According to Kotler & Armstrong (2004) the concept of integrated marketing communications is related to a situation where the company ought to blend the promotion tools so as to come up with a promotion mix. Honda should utilize advertising, personal selling, public relations as well as direct marketing. The main advantage of advertising is that it can reach large masses of geographically dispersed people and the message is repetitive. This helps to reinforce the message about a certain product among people in different areas. Personal selling is another effective strategy that can be used by Honda since it can be used to appeal directly to the people. According to Strydom (2004), this marketing strategy is used to build customer preferences and actions. Since Honda Civic GX is a new offering in the market, personal selling can be effectively used to influence customer preferences since the sellers of the brand will be in a position to interact directly with the customers. This also helps the sellers to convince the customers to buy the brand since the can explain the benefits of buying the car. Public relations is another effective marketing strategy that can be implemented by Honda so as to help it to attract more customers. This strategy is concerned with presenting a good image of the organization so that it can appeal to the interests of the customers. The channel of communication is also very important in this case since it is used to convey the message to the targeted people. For instance, the internet can be used to perform various marketing activities of the company since it can reach a wide range of people from diverse backgrounds. The internet is also fast and it enables the marketers to provide feedback to the customers. Television is the other effective channel that can be used for marketing communication since it is a very common form of media among different people across the globe. The print media can also be used to convey marketing messages to different people across the globe. 5.6 Marketing research The success of any organization mainly depends with the quality of information about the customers it possesses. This information can be obtained through carrying out market research which is specifically concerned with gathering information about the needs and interests of the customers. Essentially, the aim of any business is to fulfil the needs and interests of the customers. The internet can be used to conduct market research where social websites like Face Book can be used to gather the views of the targeted customers. The main advantage of this strategy is that it can reach a wide range of people from different parts of the globe. Focus groups can also be used to obtain information about the needs of the customers. This can help the company to customise its vehicles so that they satisfy the needs of the customers. 6.0 Action programs In order to fully implement the envisaged marketing plan for Honda, there are different action plans that need to be taken into consideration. It is imperative for the organization to design the message and this is followed by various promotional strategies that are meant to ensure that the message achieves its desired goals. 6.1 Design the message As a point of departure, it is imperative for Honda to design a message that is likely to appeal to the customers. The message strategy should show the uniqueness of the brand so that it can help to distinguish the vehicle from all other cars that are manufactured by other companies. For instance, the message can be as follows: Experience great quality and design of your dream car: Honda Civic. This message sums up the special features of the vehicle. For instance, it emphasises on great quality and design which is likely to appeal to many people. People need to know special features of a vehicle before they make a decision to buy it and this should be the first action plan by the company to make sure that they provide the relevant information about the car to the targeted audiences. 6.2 Implement the marketing strategy In order to implement the marketing plan, various promotional strategies can be used to entice the buyers to try this unique brand. It is important use an integrated marketing strategy that blends all marketing communication tools such as the internet, television as well as print media. It is also important to interact directly with the customers as well as giving them the opportunity to test the vehicle if they are interested in buying it. It is also important to lower the price of the vehicle given that it is still new in the market. Lower prices are likely to attract more customers and this can help the company to gain a competitive advantage over other rival players in the automobile industry. 7.0 Budgets The budget has to be set on the basis of the projected sales of the Honda Civic. For instance, a budget of $3 million can be set over a period of two years to implement a marketing plan since this brand is still new in the market. This budget will encompass different aspects of marketing such as personal selling, advertising, promotion as well as public relations. These strategies are likely to raise awareness among the customers so that they can try the new offering in the market. 8.0 Controls Kotler & Armstrong (2004) posit to the effect that marketers ought to carry out post testing measures after the implementation of the marketing plan so as to establish if it has been a success. A critical analysis of the sales volumes of the vehicles ought to be regularly taken during the period of implementing the marketing plan so as to enable the marketers to make necessary changes should the need arise. The response by the customers to the marketing plan ought to shape the overall strategy of the organization so as to be in a position to gain a large market share in the automobile industry. As a control measure, the company should monitor the feedback given by the consumers and they should respond accordingly so as to be in a position to establish a long lasting relationship with them. 8.0 Conclusion In conclusion, it can be said that the success of designing and implementing a marketing plan largely depends on the company’s ability to identify the targeted customers. In case of Honda Civic, there is need for the marketers to segment the market on the basis of psycho demographic segmentation since it mainly targets the rich and affluent people. It is also important to tailor the message in such a way that it appeals to the targeted people. It is also important to identify the channels of communication so as to be in a position to reach the desired audiences. References Armstrong, G. & Kotler P. (1996) Principles of Marketing, 7th Edition. London. Englewood Cliffs: Prentice Hall. Autofairhonda (2011). 2011 Honda Civic GX Natural Gas Vehicle. Viewed from: . Consumer News (September 30, 2011). New Honda Civic Natural Gas to sell for $26, 155. Viewed from: . Kotler, P. & Armstrong, G. (2004). Principles of Marketing. Upper Saddle River: NJ. Pearson Education. Kotler, P. (1999). Kotler on Marketing: How to create, win and dominate Markets. London. Free press. Lancaster G. & Reynolds P. (1999), Introduction to Marketing: A step by step Guide to all the tools of Marketing, Kogan Page Porter, M.E. (1985). Competitive Advantage; Creating and Sustaining Superior Performance. New York: The Free Press. Strydom J. (2004). Introduction to marketing.3rd Edition. Cape Town: CT, JUTA. Redmayne Bently (2013). Honda Motor Co. Ltd. Viewed from: . Read More