Introduction and Overview
Honda Motor Co. Ltd. was incorporated in 1948 and originally manufactured and sold motorcycles (Whiston, 2012). Today, Honda is known for its manufacturing of many items – motorcycles, power products, engines (boat, generators and lawnmowers); and even private jets and robots (Whiston, 2012). For purposes of this research, however, we'll focus on Honda's auto-manufacturing abilities. During fiscal year 2012, Honda sold 15.7 million cars and motorcycles; automobiles constitute a little more than 70% of the company's revenue (Whiston, 2012). Honda has developed over the years. There are a wide varity of products avalialabe that serve many different purposes from the small general purpose engines to specialty custom made sport cars and now scooters. Honda has a earned the company a very good reputation from customers all over the world. From when the company was established until now, Honda has be on the leading edge by creating new value and offering many different products of high quality at a family friendly price, for its worldwide customer satisfaction. Honda is certainly on the list of many consumers, especially as we'll see in this paper, consumers are interested in reliability, quality and fuel efficiency. The problem Honda faces, however, is that it's seen as a "practical" car, one that someone will buy to save gas or to ensure safety in a crash This is something that has been pounded into consumers' heads, as many Honda ads in the past have touted its high quality ratings in crash tests. What Honda is missing, however, is the "coolness" factor. It can't even embrace the "tree-hugging" picture which would be a natural with its fuel efficiency, as Toyota's Prius and the electric cars (think Chevy Volt and Nissan Leaf) have already taken on that visual. The trick here is to brand Honda as an up-and-coming, gotta-have car, while not taking away from its well-known attributes, namely fuel efficiency and reliability. One can make the argument that younger, hipper people are into saving money on gas and a quality car. But most younger drivers are into style, as much as they're into safety and fuel efficiency.
Based on Demographics segmentation, Honda’s target customers are * Gender: Male and Female.
* Age/Generation: 30-50 years old and “Generation X”. * Place: Available in dealers nationwide.
* Social class: Social class AB.
* Status: Single and Married.
Focusing on Psychographics segmentation, VAL’S survey shows Honda’s key consumer group is Achievers. They have goal-oriented lifestyles and a deep commitment to career and family. So, their social lives reflect outer- directed factors. And it is organized around family, their place of worship, and work. Now, Honda has a good corporate image that is high quality, reasonable, family-friendly or centered your life style. We consider this positive image is really effective for their target consumers. Behavioral segmentation shows Honda’s target customer tend to replace their car every 5 to 7 years, monthly amortization of 15 to 20K, good ride, efficient fuel consumption. Competition
The auto industry is highly competitive and extremely cyclical (Whiston, 2012). Furthermore, in places like the United States, fuel-efficiency laws will raise vehicle prices for consumers (Whiston, 2012). Furthermore, auto manufacturing is very capital-intensive, with large fixed costs ,meaning an definite impact on profits, even when there are small changes in demand (Whiston, 2012). Adding to Honda's problem is that, as a Japanese automaker, it's at the mercy of a strong yen – a strong yen means it costs more for the company to make its product. Added to this issue is that Honda isn't the only game in town. It operates head-to-head with another Japanese competitor; Toyota Motor Corp. It also must compete against Germany's best and brightest, such as Daimler AG and Mercedes-Benz, and Detroit, where Ford Motor Co. is becoming a viable...
References: Rechtin, M. (2012, September 17). At American Honda, Storytelilng Takes a Front Seat. Automotive News , p. 22.
Taylor, D. (2010, April 30). Banama-bama, Fo Honda . . . In Brand-Name Game, Honda has Style. Central Penn Business Journal , p. 19.
Vara, S. (2012, January 27). Honda Targets Life Stages with New Leap List Campaign. Retrieved February 5, 2013, from Kherize Five Advertising & Marketing: http://kherize5.com/honda-targets-life-stages-with-new-leap-list-campaign/.
Whiston, D. (2012, October 31). Honda Motor Co. Ltd. Retrieved February 5, 2013, from Morningstar Investment Research Center: http://library.morningstar.com/Stock/stock-analyst-report?t=HMC®ion=USA&culture=en-US.
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