Honda Motors Company Marketing Plan - Case Study Example

Table of Contents Particulars Page No 1.0 Introduction 2 2.0 Brief about the Company 3 3.0 Current Marketing Environment 3 3.1 Competitors Analysis 4 3.2 Porter’s Five Force Model 5 3.3 Consumer Behaviour Analysis 6 4.0 Current Marketing Strategy 7 4.1 Targeted Market of Honda Outboard Motors 7 4.2 Marketing Mix of Honda Outboard Motors 8 5.0 Future Marketing Strategy/ Recommendations 10 6.0 Conclusion 11 7.0 References 12 1.0 Introduction This report has been drafted in a comprehensive manner to focus on the case study/ marketing report of Honda Outboard Motors. Honda Motors Company is certainly one of the best known and renowned companies in the list of automakers. It is currently regarded as the third largest automaker in Japan and is perhaps the world’s best motorcycle manufacturer. The company has also been successful in the manufacture of outboard engines and has focused exclusively on four stroke technology since the early 1960’s by creating a market of its own for a full size range of four stroke engines to its recent market of small range of PWC. This report looks to focus on three different aspects of Honda Outboard Motors marketing concepts. Initially the report looks to highlight upon the current marketing environment of Honda Outboard Motors where a clear discussion has been made in context to competitors analysis along with a discussion on Porter’s Five Force Model of Industry Competitiveness and a discussion on the consumer behaviour analysis of Honda Outboard Motors. The report than shifts to a more synchronised and minute learning of the current marketing strategies of Honda Outboard Motors where the report looks to highlight upon the targeted market of the company along with a discussion on the different elements of marketing mix to identify and discuss upon the future marketing strategies for Honda Outboard Motors. Finally the final part of the report makes a clear discussion of most justifiable and feasible marketing strategies which Honda Outboard Motors can look upon to ensure rapid growth and sustainable competitive development of its overall business. 2.0 Brief about the Company Honda Motors Company together with many subsidiaries engages itself in the development, manufacture and development of various motorcycles, automobiles, board engines and other power products with its business extended in North America, Europe, Asia and some other parts of the globe. The company was founded in the year 1940 and is based in Tokyo, Japan. The company is certainly the best rated in the manufacture of its various motorcycles in the category of business and commuter models including sports models etc. In the category of automobile it manufactures and develops products like passenger cars, minivans, mini cars, sports utility cars etc. The power product consists of portable generators, general purpose engines, water pumps, marine outboard engines etc. It is to be noted that this report specifically focuses on the outboard engines of its power product category. The company works with a global viewpoint of supplying products of the highest quality at a reasonable price and is aimed towards maximum customer satisfaction of its users. The company on a constant basis dreams to aspire itself and develop products with enhances mobility and benefits the society at large. 3.0 Current Marketing Environment The marketing environment holds significance importance in any industry and decides upon the strategic goals and achievements of organizational objectives. This part of the report looks to provide a clear understanding about the current marketing environment of Honda Outboard Motors and makes a discussion on the competitor’s analysis along with a discussion on the Porter’s Model of Five Forces of Competitive Rivalry and a discussion on the consumer behaviour analysis of Honda Outboard Motors. 3.1Competitors Analysis With more new entrants into the existing board engine industry competition has risen sharply. Honda Outboard Motors faces direct competition from its most fierce competitor Yamaha Outboards apart from other competitors like Suzuki Marine, Evinrude and a very recent entry of Seven Marine in 2010. Having a deeper look at the market share of these companies in terms of overall outboard industry dominance Yamaha Outboard seems to occupy the highest position by occupying about 37.9% of the total market share which is 31.2% for Honda Outboard Motors. The new entrant Seven Marine seems to work well occupying about 12% of the market share in a very short span of its business operations and emerging as a tough competitor for Honda Outboard Motors especially in the range of products like 2.3HP and 5 HP outboard motor engines. Apart from direct competition from the aforesaid outboard motors available in the market, Honda Outboard Motors further faces indirect competition from cheap Chinese products easily being imported from Asian Region all across the globe. Yamaha Outboards seems to be the most preferred brand owing to its latest use of technology and higher brand equity. Honda Outboard Motors certainly needs to ensure higher spending on its research and development field to develop better products and gain competitive advantage over its rivals to gain the top position in Outboard motors industry. Honda Outboard Motors apart from direct competitors and indirect competition from Chinese products faces another challenging threat from the abundance of second hand and reconditioned motors easy available in the market place. This motors acts as the most viable substitute for new outboard motors and significantly hampers the sales volume and profit generation emerging itself as yet another segment of competitor for Honda Outboard Motors. To further understand the current marketing environment of Honda Outboard Motors, Porter’s Five Force of Industry Competitiveness has been discussed as under. 3.2 Porter’s Five Force Model Michael Porter has developed the Fiver Force Model which helps to analyze an industry’s internal and external environment along with competitive rivalry to better understand the industry context in which the firm operates. A detailed study of Honda Outboard Motors current marketing environment is discussed as under. Threat of New Entrants The threat of new entrants can be ranged from medium to low in terms of outboard motors industry owing to high initial investment and already existing brands and products available in the market. However, very recently a new entrant named Seven Marine has entered the industry and has been successful in capturing a good position of the overall market share making it more lucrative for more new entrants into the industry and making the existing competition more intense. Threat of Substitutes Threat from Substitutes is on the higher side for Honda Outboard Motors owing to rising competition from direct rivals and abundance of second hand and repaired motors available in the market. Furthermore, the cheaper Chinese products have been successful in ensuring a steady supply of products in the overall global market of outboard motors industry. Bargaining Power of Buyers The bargaining power of buyers again can be ranged from medium to high owing to easy switching of the consumers to other preferred brands over Honda Outboard Motors and easy substitutes available in the form of duplicated and repaired motors in the market. Bargaining Power of Suppliers Suppliers Bargaining power is considerably low in the outboard motors industry as the number of suppliers has been rising significantly over the years. Furthermore, the market have been flooded with repaired motors along with duplicated cheap Chinese products making the supply of products on the higher side in comparison to its demand constraints. Rivalry among Existing Competitors Rivalry among existing competitors for Honda Outboard Motors is again on the higher side owing to similar products and strategy being deployed by its near rivals in terms of quality, price, innovation, promotion, differentiation, cost leadership and focus on a narrow segment of consumers. Product differentiation is a difficult issue in the current marketing scenario of outboard motors. Thus we see that the Porter’s Five Force Model provides a clear picture of the industry competitiveness of Honda Outboard Motors and its current marketing environment in which the firm operates. 3.3 Consumer Behaviour Analysis Consumers play the most important role in any industry and outboard motors are no different from the same. The consumer behaviour of Honda Outboard Motors is an important element to critically identify and understand the current marketing environment of the company. Looking minutely at the consumer behaviour of Honda Outboard Motors the consumer exhibits a shift from high quality products to be more lured by the cheap quality Chinese products. The consumers have become more price-sensitive and demand for technology driven products has rise significantly which has been more intensely dealt by rivals like Yamaha Outboard Motors. The real demand for outboard motors depends upon the consumer purchasing fishing boats which has rise significantly thereby attracting better marketing opportunities for Honda Outboard Motors. Brand equity and brand preference is another area which decides upon the buying behaviour of consumers of outboard motors. Honda Motors already have been successful in creating a benchmark of its own in the automobile industry and can certainly use the same to its own advantage to boost up the sales of Honda Outboard Motors. 4.0 Current Marketing Strategy This segment of the report looks to focus upon the current marketing strategy of Honda Outboard Motors along with a discussion on the targeted market and marketing mix of the company. 4.1Targeted Market of Honda Outboard Motors Honda Outboard Motors look to target a narrow segment of the customer pyramid where the main consumers constitute potential customers more likely to buy fishing boats. With further growing segments like pontoons and aluminium fishing boats and Honda Outboard Motors looking to target the same the company has higher probability of boosting up the sales of its outboard motors. Honda Outboard Motors to further substantiate its outboard motors business looks to promote, expand, develop and target the environment friendly 4-stroke large outboard motors. In addition to the same, its targeted market includes strategy of strengthening its collaboration with boat builders. Recently Honda Outboard Motors to maintain and increase its market share in exclusive targeted developing counties of America, Europe and Asia has introduced the new 4-stroke model and enhanced service activities to pinpoint and fulfil the local market needs. In a bid to further expand its business and ensure a better positioning of its products along with larger targeted market shall look upon to focus upon the related rigging business which includes sale of parts and accessories used for mounting outboard motors on boats. 4.2 Marketing Mix of Honda Outboard Motors Marketing mix is an important element of marketing which focuses on the 4P’s of marketing i.e. Product, Place, Price and Promotional strategies. The marketing mix of Honda Outboard Motors along with marketing strategies has been discussed as under. Product Honda Motors is the global leader in the manufacture of automobiles and develops and produces seven different kinds of Honda product lines which includes Automobiles, Acura Automobiles, Power sports, Honda Jet, Honda Marine, Board engines and other Power products. Honda Outboard Motors is further categorised in manufacturing, developing and distribution of products like Portable outboards (2.3HP, 5HP, 8-9.9 HP,15-20HP), Mid-range Outboards (23-30HP, 40-50HP, 60HP, 75-90HP) and High Power Outboards (135-150HP, 200-225HP, 250HP). One of its latest developments in the field of Outboard Motors is the 4-Stroke Honda Outboard Motors. Currently Honda offers 4-Stroke outboard motors ranging from 2.3HP to 350HP making its differentiated and competitive with other similar products available in the market. Furthermore the products are developed to ensure high quality performance with limited and life time guarantees and warrantees along with continuous innovation and up-gradation of its products by the use of latest technological advancements. Place Honda Outboard Motors has been successful in creating a niche market of its own and operates widely in regions of Europe, America and Asian countries. The company has recently made an attempt to cover the potential Australian markets with its high quality 4-stroke Outboard Motors which has been developed strictly to abide by the emission standards at international level. Rigorous marketing attempts has been directed to ensure a steady supply of its products and further expansion strategies in form of new mergers and acquisitions along with subsidiaries have been created to tap the potential outboard motors market on a global basis. Promotion Honda is a name known and recognized for its high end quality products and continuous innovations by use of latest technological advancements. Honda Outboard Motors never looks towards an aggressive promotional activity but rather tries to maintain its superior quality and created brand image by ensuring highest and maximal customer service to generate maximum customer satisfaction. Considering various promotional tools, advertisement has been extensively used by Honda Outboard Motors to keep its potential customers aware of the latest technological advancements in its outboard motors. Majority of its advertisements are done through print media in the form of magazines and commercial newspaper. Sponsoring water sport events has been one of the most successful tools for Honda Outboard Motors for promotion of its products and services. The company further plans to engage itself in road shows along with demonstrating its products in exhibitions and festival marts. Commercial television advertisements are also used as promotional tools for its latest 4-Stroke outboard motor engines. Price Honda Outboard Motors are priced on basis of competitive pricing strategies where prices are set on basis of competitor pricing along with market demand of products and services. The prices are so set as to justify its value of use and create value addition to its products and services. Different models of outboard motors are priced differently for example, its portable outboard motors currently uses a market penetration strategy where prices are kept low whereas its latest 4-Stroke Outboard engines with international standards of meeting environment friendly products is more like to indulge in a price-skimming strategy. 5.0 Future Marketing Strategy/ Recommendations Honda Outboard Motors has been successful in its division of manufacturing, developing and distribution of outboard engines in a narrow market segment of its own. The company can certainly look upon the following future marketing strategy and recommendations to emerge as the global leader in outboard motors. Honda Outboard Motors should look to concentrate on future business strategy which is aimed towards sustained growth in its financial performance and changing its business environment. Honda Outboard Motors should concentrate on three main areas to ensure superior high quality outboard motors which match with the abundant cheap Chinese products and other substitutes available in the market place along with a strict abidance to the international emission standards. Advancement of environmental technologies. Launching of small sized high power outboard engines equipped with IMA system to be the first of its kind so as to gain a sustainable differentiated advantage. Advanced, high-output and compact outboards for fishing boats and new models of hybrid models of boats. It should further look towards fuel efficiency of gasoline outboard engines by focusing on technological advancement and develops models equipped with smaller diesel engines. Strengthening manufacturing systems and capabilities: Honda Outboard Motors should focus on domestic production technology with up gradation to accommodate production of small to medium sized low priced fuel efficient outboard engines and support functions strengthening of production outside Japan by entering into new mergers and acquisitions with smaller players in the marketplace. Furthermore expansion should be done both geographically and in the product lines to ensure higher superior products. Strengthening business operations in emerging markets particularly in Southeast Asia and increasing local sourcing of components to localize outboard productions can help the company to lower cost and emerge as an effective competitor to the cheap Chinese and repaired outboard motors. Further marketing strategies should be revised and redesigned on regular basis to cater the market needs and demands. 6.0 Conclusion The report looks to highlights upon the current marketing environment of Honda Outboard Motors where a competitor analysis along with consumer analysis has been highlighted to focus upon the current and develop future marketing strategies. The report also provides an understanding of the marketing mix of Honda Outboard Motors along with most feasible and viable future recommendations to ensure sustainable growth and development of the overall business of Honda Outboard Motors. 7.0 References Read More