SWOT Analysis of Honda Motor Company Ltd - Case Study Example

Car Manufacturer’s . Student’s Name: Grade course Tutor’s Name Date: Stage 1 Honda Motor Company Ltd was founded by one engineer called Honda Soichiro who started a technical research institute in 1946. The research institute was to develop small combustion engines. It came to be Honda Motor Company in 1948 and it started producing motorcycles in the following year. By 1959 it was one of the largest motorcycle selling companies. The company headquarters are in Tokyo, Japan. The company even opened American branch to cater for its growing market in the United States. In 1963 the company started producing automobiles that were very efficient for their customers use. Honda is the major exporter of automobiles and motorcycles mostly to the United States and other parts of the world (Honda, 2013). The organization operates in motorcycle and automobiles that are efficient for customers use. Therefore, this report will dwell on the company’s production of the motorcycles and their marketing so as to win the market share. The major competitors of the Honda Company in the motorcycle market include General motors that have taken the largest share of the market. Another competitor is the Toyota Corporation which has taken the second largest share of the market. This has made the company to be the third company in this line of production. Strengths: Large market share. Honda Company has the largest market share in the world, and it has different branches in various parts of the country, and globally. This gives the customers an advantage of accessing the products from any branch which is nearest to them. The large market share makes it more favourable to customers in world as compared to other companies with a small market share, as the customers are not required to travel far so as to access the services, but they can just go to the nearest one. Weaknesses: High operating costs. The large market share of the airline requires many employees to manage and provide services in the different branches of the airline. Salary and wage bills are very high for this company as most of its revenue is channeled towards that, and it would otherwise have been used to conduct research in order to improve the customers’ services. This puts some other airline companies at an advantage in case they can be able to urgently meet the demands and preferences of the customers. Companies that can meet all the customers’ preferences and demands as they arise, and urgently, tend to attract customers the more, and make them loyal, unlike the ones which cannot. Stage 2 Market segmentation It is a process by which a large market is subdivided into small units so as to allow better marketing related to need and wants of the customers. This will help the companies to capture and target different groups of customers (Bui, 2007). This helps the company to deal will a small market share at a time because no company is big to cover the whole market. Therefore, it is important for the company to undertake market segmentation because it will reach out the most people in the market. The company should undertake market segmentation so as to get the best out of the market. The company can take any form of market segmentation either concentrated or differentiated. In this case Honda should undertake concentrated market strategy because it will help sell many products which are similar. In concentrated market all customers are treated in the same way. Customer Demographics The international business community is the target market for this marketing plan because the company has not been performing well in this sector. The demographic of the international business community is that it mainly comprises people those who are aged 30 years and above both men and women. These include business owners, sales people and managers of the big companies in the world. These people come from all over the world and especially from the major countries of the world mainly in Europe and the USA other leading world economies. This target market has grown fond of motorcycles services because they use the motorcycles to travel around the world to make business deals and transactions. Therefore, they are frequent customers to the company services and highly value the services and the quality of the services they pay for. Stage 3 Product This is a commodity to be marketed. It has to satisfy customers need. A product must add value to a customer. Products are either tangible or intangible (Belch, 2009). Tangible products are those one can touch and feel them, for example, Honda Company tangibles are the motorcycles and automobiles they produce and sell. Intangible goods are those that cannot be touched or seen an example of the company’s intangible product is the services they produce. Honda has been in the market so it does not require to introduce new products but to innovate, so as to improve their products. Honda should take advantage of their already established brand name to exploit the international market. The company should exploit the already experienced employees in a positive way to achieve the best results and be the market leader in the motorcycle and automobile industry. The company should also ensure their many products complement each other in the market. The company’s product should be clearly labeled so that customers can easily identify them. This will enable them penetrate the international market with less difficulty. The product cycle is the process a product goes through before it reaches decline in its market. The product cycle has three phases the growth phase, the maturity and the decline phase where the product attracts low sales. The product life cycle of a product determines how long the company will be in the products market because as the products reaches its final stage the company is selling very few products and earning less profits or even earning losses. The company’s product Honda motorcycle is in the maturity stage and therefore, the company should invest in research and development so as to ensure the product lives in the market for a very long time without reaching the stage of decline. Branding is the way the company works to ensure its product is presented and looks unique as compared to the products of other companies. This may be use of logos, name, phrase, design or even a motto to ensure the product is unique in the market. Branding ensures that the company get loyal customers by differentiating its products from those of the competitors. The company uses manufacturer branding as opposed to private labels this helps the company protect itself from fake brand names. The company ensures that all its products have the brand name and all other features that help customers to identify the products. The company has adapted this strategy to ensure that no counterfeit products find their way in the market. This ensures that the company protects its customers and its name in the market. The company has adapted this strategy so as to create loyalty among the customers. The company greatest offer is the brand name and the company also offers support services to their customers. Brand name has helped a lot of customers because they only need to remember the brand name rather than the products specifications which can be very complicated. Stage 4 Price This is the second component of the market mix. This is the value by which a consumer is to pay for a product. The price is very important because it determines the company sales and profits. Prices should be competitive (Belch, 2009). Honda should have a reasonable price so as to penetrate the market. There are different types of pricing, which Honda, can use to set their price. They include price skimming, price penetration and neutral pricing (Egan, 2009). The company, since it is new in the international market should use market penetration. This will help them attract customers. In setting, the price elasticity of commodities should be considered. In Honda case, a slight increase in price would lead to loss of customers to competitors’ goods. They should also consider referencing and differential values of purchasing. Reference value is where a consumer considers prices of competitor goods before purchasing therefore Honda should have a price which is slightly lower to those of other companies (Honda, 2013). The price, which is set, for a certain product should complement those of other products by the company. The company can also involve discounts and offer them as part of its pricing, so as to penetrate the market. The company should also ensure its prices are fairly distributed and are maintained (Fraser, 2007). The company should invest in training agents who are well informed about the products and their prices. The company’s pricing ensures that the company is within other companies range and does ensure that the company gets its market share without straining its resources. The company should works towards making their prices similar to other companies in the industry because this will attract increased customers and sales. This will help the company market itself through its support service program which is its competitive advantage (Bradley 2004). The company pricing strategy should take into consideration its costs in production and its operating costs so as to give the best results from the market. The company prices should not be very high so as to ensure that they do not push away customers. The company uses reference pricing because it was to be in the same price range with other competitors. This ensures that the market leaders do not out cut the Honda Company out of the market. Stage 5 Place This refers to where a customer can get the product, and how a product reaches the selling point. The place where the consumer gets the product should be convenient. The customer should be able to get the commodity whenever they like, therefore, the company should introduce channels by which a customer can make an order (Belch, 2009). They can also introduce retail and wholesale shops to serve their customers conveniently. The company should ensure that they are covering each and every place. They should also consider their demand in relation with their production. The products at the store should be of sufficient quantities so as to satisfy customer needs. The company should also put into consideration storage, inventory and distribution which it should ensure are at an acceptable level. The company should work towards turning its weakness of high pricing into strength through offering high quality services at the most frequent times for the customers at all their destinations. This will be through increased distribution through opening of other branches and selling outlets (Belch, 2009). The company uses intensive distribution so as to ensure that most of the company’s customers get the preferred products. Intensive distribution ensures that the company covers the whole market as opposed to selective distribution which is discriminative. This distribution strategy is very convenient to the customers because the company ensures that the products are near the customer. The customers can easily access the products whenever they need from the nearest stores. This convenience wins more customers for the company. People This concept refers to each and every person who is involved in production and selling of the product. The company should ensure employees are well trained and have the right information about the product. This will help create a positive impression about the company together with the products. The company’s reputation and success depends on how the staff handles the customers. The staff should provide after sales assistance to customers. This will enable the company increase its popularity among customers. The management should show the staff that they are important, so as work towards achieving the objectives of the company (Belch, 2009). The staff can also give advice to customers, and this will help the company penetrate the market. The employees of the company should make the customers feel they are important. The success of the company depends on those people who are involved in the marketing and selling process (Egan, 2007). The company can also have a customer care desk to handle customers complains and compliments. This will show the customers their importance, and will aid the company to win and penetrate the market. The company can also issue catalogues and sales reports to help them purchase what they want (Honda, 2013). Stage 6 Promotion Promotion is the art of making people aware of a company’s product and where they can get them. It is the most visible form of marketing, and it is the one most people recognize and identify (Egan, 2007). It takes different forms, which include advertising, branding, corporate identity, special offers and exhibitions among others. It is a form of communication by the company to its customers. Promotion entails on telling the customer about the benefits of the product rather than its features. It must attract the attention of the customer; therefore, it should be appealing and have a message which is consistent. The message in promotional materials should be easy to understand. It should strongly show and give the customer a reason for buying from Honda and not competing firms. The company should also ensure there is clear communication between the management and employees. The employees should have the correct information about the products of the company. This will make employee feel recognized and will work towards success of the company; therefore, they will let the customers know about the product and buy it. Integrated Management Communication is the businesses deliver messages to their customers so as to let them know about the businesses services and goods. It is the process that enables the companies to plan, execute and monitor their advertisements and informative messages that promote customers relations. Apart from advertisement IMC uses tools such as sales promotion, actual selling, trade fairs, public relations, direct selling among others. The IMC tools are aimed promoting brand names and products of the product. The company has been using sales promotion and advertisement as its promotion strategies. The tool has an advantage to the business because they can apply business price discrimination. This will increase companies’ profits because sellers can even sell at a lower price without incurring any losses. It is a tool that can be used by business to influence consumer behaviour the reason behind this is that a sales promotion is aimed at different purpose, for example, the one of increasing customers can be very beneficial to the company. The company benefits from strategies of sales promotion and they include price discrimination; is a method that allows businesses to apply different prices on the same commodity to different target areas. This is mainly based on the price sensitivity of customers at a particular area. The businesses which apply the method use coupon and special prices to attract price sensitive customers. The companies also use a method of reducing their prices. The method is very effective because it attracts customers from all the target customers. Another method of sales promotion is coupons customers are attracted to business by reduced price offers. The coupons are found in magazines, newspapers while other companies distribute them to their customers. Another method is the pack, where the company gives an extra product to customers for purchasing a particular commodity without charging them. The companies may also use free gifts together with a purchased product this helps increase the sales because customers prefer buying the commodity offering the free gift. The companies can also use free mail-ins, in this method a customer has to make a number of purchases and keeps the receipt with them. After they acquire a given number of purchases they redeem them for a particular amount of the product. Other methods under sales promotion are self-liquidating offers and competitions and contests. The company uses internet marketing. The internet gives organisations an opportunity of developing true communication between the public and the organisations, and terms like dialogic and dialogue are becoming more rampant in describing practical and ethical approaches to communications in industry and academia. This is done as public relations research and theory move towards a communication model of two- way, which are related. Researchers recommend that online strategies ought to be an essential part of practitioners’ store, and a comprehensive set of perfect practices should be created by a practitioner. This is possible by combining online strategies together with traditional public relations. Taylor and Kent are the ones behind the theory of dialogical theory of public relations. This theory expresses the principles of communications between publics and organisations, based on relational communication theory, which argues that open discourse and honesty are very central and vital to key relationships. Dialogic communication framework has also been suggested, a framework through which the degree to which website is used by organisations to ease the dialogue with their public, can be measured by researchers. This framework has been applied to a number of organisational types, and these include, activist organisations, non-profit organisations, congressional offices, as well as universities and colleges. The interesting thing is that the degree to which agencies of public relations use their own websites to engage in the dialogic communication is yet to be explored. Exploring it is worthwhile to pursue due to the following reasons; analyzing websites of agencies ought to provide an indication of the dialogic website strategies communication popularity among agencies. At the same time, it would suggest the degree at which academic recommendations has entered the public relations field. Secondly, the study of agencies interaction with clients or more so potential clients and in a public medium is valuable. This is because, client- agency relationship might require a different website communication strategies set and not what is already suggested research of previous dialogic communication. Since agencies that have higher billings are usually larger, it is suggested that their websites also have different features. Recent research done on dialogical communication framework shows that it should be updated to include and capture the social media, since the social media captures a large population. References Belch, G.E. (2009). Advertisement and Promotion: An Integrated Marketing and Communication Perspective. Sydney: McGraw-Hill. Buil, I., Chernatony, L., and Hem, L.(2009). Brand extension strategies: perceived fit brand type and culture influences. European Journal of Marketing, 43(11/12), pp.1300-1324. Egan, J., (2007). Marketing communications. London: Thomson Learning. Fraser, L., Merrilees, B., and Wright, O., (2007). Power and Control in the Franchise Network: An Investigation of Ex-Franchisees and Brand Piracy. Journal of Marketing Management 23(9-10), pp.1037-1054. Honda. (2013). Toyota. (2013). Read More