Analysis of Marketing Strategy Plan for Honda for Upcoming Motorcycle Model

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Analysis of Marketing Strategy Plan for Honda for Upcoming Motorcycle Model

1.0 Introduction

[bookmark: _Toc36383668][bookmark: _Toc16449]The purpose of this report is to build a marketing strategy plan for Honda, for their upcoming motorcycle model CBR1000RR-R Fire blade. So, it can enter those target segments in which Honda can create Superior customer value and gain a competitive advantage over rivals.

1.1 Company Background

Honda Motors ltd , is a Japanese base company, established by Soichiro Honda in 1946, first started by producing combustion engines (Miller, 2008) then began manufacturing motorcycles with complete engine design in 1949, with the name of dreams by 1964 it becomes the biggest selling luxury motorcycle in the globe (Grant, 2003). The rapid growth of the company gives a benefit to competing with the other companies. There are some crucial values that hold the company through mission, vision, and also the Honda concept. In 1982 Honda founded its first US. Subsidiary by the name of American Honda company who also manufacture motorcycle. Honda has 368 subsidiaries by the end of 2018. By 2019 its production of motorcycles reaches up to 400 million. The overall motorcycle industry is estimated to increase by 9% per year from 2015 to 2020 for which a study has discovered that 75% of existing bike rider lovers would opt for luxury motorcycles that are more sophisticated (Global Motorcycle Infotainment System, 2016).

1.2 product offering

The Honda company mainly manufactures motorcycles and cars, but also further expands their products offering worldwide such as scooters, power equipment, engines, ATVs, and Gardening equipment. Honda has been engaged in artificial intelligence, such as robot study, and launched their ASIM robot in 2000. As there are other companies such as Toyota, Mercedes Benz, and Nissan, offering similar products in the identified target market. So, Honda motors develop the diversification products of Honda financial facilities. Now by 2020 Honda once again differentiated itself by launching the new sporty motorcycle model Honda Fireblade CBR1000RR-R and creating a new history of the born-to race. Honda invests 5% of its profit in R&D (Honda,n.d.).

2.0 Segmentation, Targeting, and positioning (STP)

The STP model is used to describe the target market suggested for Honda. So, in this case, Honda must carefully design their customer-driven marketing strategies that can help to develop a competitive advantage over competitors (Kotler, 2016).

2.1 Segmentation

Market segmentation is the process of identifying, evaluating, and choosing identical groups of individuals, regardless of whether they are buyers or not, with the intention of creating and implementing competitive strategies towards them ( Sarabia, 1996) customer attributes within each segment are distinct from those shared by other segments ( Recklies, 2018). As there is no one way of segmenting a market so marketers need to use various segmentation factors such as geography, demographics, psychographics, and behavior (FURSE, D.H. & GREENBERG, B.A., 1975)

Honda is offering one product type, to the market that its targets. For that cause, Honda uses more advanced methods that help in segmenting. First is grouping techniques are intended at clustering groups of buyers that are identical to their segmenting range into the same segments. Honda motors implement this method in every part of the world to measure demographic attributes which is one of the most repeatably used types of market segmentation (Beane, & Ennis, 1987).

For the CBR1000RR-R Fireblade model Honda can emphasize on factors such as income, wealth, and age. Firstly, income and wealth are factors that should be intimately observed because they will give the perception of the buying power of buyers.

The CBR1000RR-R Fireblade some consumers might find it expensive and those who have low discretionary salaries cannot buy it. Hence, it would be recommended for Honda to target medium to high-income buyers. Secondly, as product usage requires a certain age limit it’s the main key in promoting the products more so for this model.

For example, the sporty outlook of the CBR1000RR-R Fireblade motorcycle more probably appeals to the younger consumer the millennial in the age group of 20-30. Another method of dividing the target market is geographical, this is one of the most fundamental types of segmentation. It segments the target market based on region, population, or climate. A factor of geographic segmentation involves the region of the buyers.

This could play a crucial role in the victory of HondaCBR1000RR-R Fireblade as the survey has shown the ownership of motorcycles is more general in Asia and Europe, while it is uncommon in the Middle East and Africa (Poushter, 2018) The segmentation can also happen according to weather that various countries have. For example, in a few countries, there is excess rainfall, which makes the roads, slide and makes the traveling risk for motorcycles. Hence the possibility that the individual goes for motorcycles over the car is low. Even though Honda has created numerous safety characteristic that exists because of its electric system that assures safety, however of the climate affects the state of the roads.

2.2 Identification of target market & reasoning

Target marketing is the process of accessing all market segments and selecting the segment that is most profitable and appealing to the company to enter with their specific products or service (Law, 2016). Based on the above analyses, the most appealing target market would be the demographic segment. Demographic segmentation is one of the simplest methods to arrange people into groups and also it can be measured more exactly compared to other segmentation variables (Schiffman, & Wisenblit, 2014).

The First reason behind choosing the demographics is that is not difficult to identify the target market segment as it can be known in terms of buyers’ age, income, gender, social class and religion (Schiffman, & Wisenblit, 2014). Honda aims to target eco-friendly middle-high income gainers who are youth.

The Second, justification for choosing the demographic segment is because it is a considerable segment. The demographic segment is significant in size to uphold the resources to be an effective target. For instance, in Malaysia, there are a total of 14.8 million enrolled vehicles in the year 2005 lots of them are motorcycles (Hays, 2015).

The third reason for selecting a demographic segment is that it is persistent and growing. For instance, the motorcycle industry is anticipated to increase by 9% per year from 2015 to 2020 (Global Motorcycle Infotainment System, 2016). However, in China, research supported by National geographic in 2009, demonstrated that consumer interest is growing to be environmentally friendly in comparison to the past years ( Kan, 2010). Based on the information that the demographic segment is consistent and growing, this will assist the marketers of Honda to prevent any uncertain market trends and have cause to anticipate the demand for motorcycles.

The last justification for choosing the demographic segment is because it is appropriate to the company objectives and resources. For instance, Honda is targeting medium to high-income buyers as the company is manufacturing lavish motorcycle models which are high-priced. A company should select a market segment that matches the Firms long-term objective (Plengdut, 2017).

In a nutshell, Honda has a market segment that is acknowledged, considerable, consistent, increasing, reachable, and appropriate to its resources and goals.

2.3 Positioning

Positioning is the process of arranging the company offering to take a clear and different place in the target market,s mind ( Kotler, 2000).

Honda positioning map

High price

Honda

High-quality low quality

Low price

Fig 1 Diagram of Honda positioning (Hamza, Rana,2019)

Honda kept the global viewpoint in positioning itself. As the company believes in supplying quality offerings, so Honda can charge a reasonable price for its Worldwide customer satisfaction. (Global Honda,2010).

In a nutshell, there are many benefits of STP, Firstly of all, it helps the companies to obtain an excellent understanding of the customers needs and wants as well as a competitor, and tailored their marketing programs according to it (Camerilli, 2016).On the other side, it has drawback also if there is extra segments it will not lead to excellent financial performance and homogeneity also be exceeded(Hunt,&Arnett, 2004).

3.0 Marketing Mix

3.1 Product

Motorcycles are often seen, as exposing riders to a greater amount of danger and a higher possibility of injuries or even died in relation to driving a car (Huber, 2017). Even an elevated death number is not sufficient to dissuade people from purchasing a motorcycle. While keeping in mind these numbers, Honda Motors has taken measures in ensuring less danger of accidents and death when customers ride motorcycles. Every CBR1000RR-R Fireblade motorcycle model comes equipped with safety features such as an Anti-lock braking system (ABS), and mechanical stability control (MSC) system. A secure motorcycle does not mean that it functions slow, as Honda always put a performance on the top. Even when manufacturing and designing CBR1000RR-R Fireblade motorcycles. Honda is offering this model in two electronic variants as CBR1000RR-R Fireblade and another is CBR1000RR-R Fireblade SP. Both will be accessible in two color designs HRC- motivated Grand Prix red and Matte pearl black. It is developed with the most powerful embedded four-cylinder engine that Honda has ever developed. Honda uses the same bore and stroke as it for RC213V-S. This CBR1000RR-R Fireblade provides the full power of 160KW at 14500rpm, a high torque of 113Nm at 12500pm(Honda,2019).

3.2 price

The CBR1000RR-R Firebladewill cost between Rm 91,999, and Rm 114,999 in Malaysia for instance, but its different from country to country. The company uses the premier positioning against its rivals. At this price level, Honda thinks that its products are worthy to charge higher than its competitors as it uses the best features the industry has to cater at a reasonable price for this category of motorcycle and can simply match and outperform its rivals. The Company also firmly believes that because of its unique attributes it will be the best seller in the industry (Honda Global, 2019).

3.4 place

Honda Motors intends to have its own service centers, in every capital of each country across the world, in order to reach its customers. Where they market their products and customers can come and familiarize themselves in the environment of Honda Motors, by testing the bikes rides before buying. The staff has been highly trained to provide a high standard of work that generates quality products. Honda motors have distributed plants internationally that best helps to work with the retailer’s indirect distribution channels to sell their products that’s how Honda decreases cost and saving can be passed on to its customers ( Honda,n.d.).

3.5 Promotion

Honda Motors advertise CBR1000RR-R Fireblade as broadly as possible, Honda can hold events locally to advertise the CBR1000RR-R Firebladein either their service centers or main shopping malls. Honda can also advertise this new model by having displays in few hit movies as hero vehicles of the said movie. Honda should advertise this bike model in sports events by supporting some sporting teams. Honda should promote this in lifestyle magazines as well as newspapers with the intention to sell this product to customers in their 20s,30s and 40s who have the desire for motorbikes along with sufficient income. Honda motors use a utilitarian method for advertisement, which is obtained by giving customers the chance to for a test ride their products and then make their mind on purchasing based on the happiness the products brings to them (Darmadi,2014).

4.0 branding

Honda adopts a brand positioning strategy over the years to establish strong brand equity. Honda has successfully positioned their brand in the mind of the target customers at three levels as at lowest level, Honda place the brand on product qualities by providing most powerful engines and unique safety features in both motorbikes and cars. But attributes alone are not enough for customers they want more in terms of product benefits. So, Honda goes beyond the characteristics and come up with an eco-friendly and low-emission system in its products. As Honda is one of the strong brands so it will not stop until the benefit positioning. Honda also position itself at an emotional level by connecting customers on powerful belief and values the brand holds such as using the concept of power of dreams those dreams go on as Honda brings them to life and move the community forward (Honda official portal,2012).

5.0 Marketing Audit

Today, companies such as Honda in this case realize the significance of marketing audits, which allow them to evaluate the external and internal environment and also enable them to plan appropriate marketing strategies to consider these environments (Chiril & Funar 2010).

5.1 External environment analysis

5.2 Swot

By looking at Swot analysis of Honda we are analyzing the internal factors such as strengths and weaknesses as well as external factors like a threat and opportunities it faces in the market environment.

Strength

Honda is one of the leading producers of motorcycles and automobiles in the globe, furthermore, the company has earned recognition for being consistent in building competencies in design and production over its rival product offering, which help Honda to be steady in its sales over the past year (Honda annual report,2010).

Weakness

Although a broad geographical presence, Honda is heavily relying on a single area which may hamper the company’s sale in a situation of economic downfall. Secondly, its harder for Honda to keep their cost low on non-luxury products compared to other manufacturers models (Honda, 2012).

Opportunities

As Honda recorded a huge sale all over the world so it intends to grow its production volume as it expects increasing demands for its products in the developing markets of South America and Latin America. In the coming future Honda is planning to set up plants in Canada and US and also further committed to developing a sophisticated production system by lowering its environmental footprint (Honda annual report, 2010).

Threat

There are many factors that have a negative effect on Honda’s operations such as when there is an economic downfall the fuel price automatically increases which may cause loss of customers for Honda. Secondly, Honda is facing threats from the breach of environmental regulations (Honda annual report, 2019).

5.3 Competitors Analysis

Honda faces strong competition in the automobile and motorcycle industry, from the top domestic player like Toyota, Nissan Motors, and Suzuki. The other rivals include Hyundai motors US-based Ford as we Europe BMW, Fiat, and Volkswagen. Although Toyota is the main rival of Honda that holds the world automotive industry market share of 10.24% against Honda who is only able to capture 5.46% (Statistics, 2019) Another basic rival is Nissan motors a Japan-based holds market share of 5.15%.

6.0 Conclusion

Overall Honda Motors should provide more innovative products to decrease human problems in their life. Life without Honda, has no meaning, stay with Honda dreamers comes real.

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