Critical Evaluation Of The Marketing Strategy Business Essay Example

other financial aspects to understand where the company stands. This information is typically presented as a situational analysis.

In addition to internal factors, businesses also operate within a global environment that is influenced by various external factors including societal dynamics, technological advancements,economic conditions environmental concerns,political situations,and legal regulations. Therefore,it is vital for companies to gather and analyze external information about the business environment while preparing a marketing plan. This allows them to be aware of market opportunities and threats. External information is analyzed and presented as a STEEPLE analysis within the marketing strategy framework.

Honda consistently discloses its financial information in annual business reports as part of its marketing strategy.This allows the company to effectively track market trends and differentiate itself from other manufacturersHonda practices transparency to enhance credibility and establish new targets. They analyze market risks including loss of consumer confidence, fuel price increases, shifts in customer preferences, and financial crises. The prices of cars, bikes, and power products are volatile due to changes in duties, import regulations, taxes, supply shortages, and material costs. Currency fluctuations also impact Honda's operations as it purchases materials and sells products internationally. These fluctuations can affect pricing policies for the company. Additionally, Honda faces risks related to currency hedging and involvement rates. Environmental and governmental regulations regarding climate change apply to the industries for cars, bikes, and power merchandise. To protect its growth and operations,Honda relies on preserving its intellectual property rights through numerous patents as infringements could negatively impact the company's operations. In its decision-making process for developing marketing strategies and establishing new targets,Honda integrates both internal and external information.Honda's marketing and organizational strategies revolve around various aspects, including

research and development, production efficiency, product line expansion, sales efficiency improvement, enhanced product quality for customer demand satisfaction, safer technology development, greener technology for environmental protection, and strengthening social reputation and community communication. These objectives are crucial for Honda's overall strategy.

The organizational structure of Honda can be analyzed at five strategic levels. The first level is the enterprise strategy which focuses on placing the customer at the center of their strategies. This customer-centric approach is evident in Honda's Mission Statement that emphasizes delivering high-quality products at a reasonable price to achieve worldwide customer satisfaction.

The marketing strategy incorporates the development of higher-quality products with safer technology. At the corporate strategy level, Honda aims to expand its business for higher profits and competitive advantage over rivals. To achieve this goal, Honda has successfully established new divisions for power products and other financial businesses while also incorporating an expanded product line into its marketing strategy.

Despite challenges such as USD depreciation, rising oil prices, and political recessions, Honda has achieved great success through its involvement in research and development (R) within their business strategy.Honda is committed to investing in research and development (R) to create advanced technology for fuel-efficient vehicles. Their global operations are divided into six administrative regions, following their corporate principle of "Respect for the Individual." Honda empowers and involves employees in forward-looking plans for each region, trusting them with local direction and sales operations.

To enhance their social reputation, Honda prioritizes customer satisfaction as a key aspect of their marketing strategy. They aim to exceed customer satisfaction by focusing on "The Three Joy" philosophy - the joy of buying, selling, and producing. This goal is achieved through

improved product quality and bolstering social reputation.

Incorporating tactical decisions into their marketing planning requires an understanding of global business environments. To assess how external environmental factors influence their marketing planning process, Honda conducts a STEEPLE analysis. These factors include economic stagnation, recession, rising fuel expenses, changing customer preferences, and the financial crisis which have caused a decrease in consumer confidence in the market.

In order to support customers and other departments within the business effectively, Honda has decided to establish a new financial division.In today's rapidly evolving technological era, it is crucial for manufacturers like Honda to stay updated with the latest advancements in order to remain competitive. As a result, Honda must adopt innovative technologies that are more cost-effective for the future. The high fuel costs of traditional vehicles have made them uncompetitive, prompting Honda to invest in research and development for cars equipped with new renewable technologies.

The global economy has been affected by the US financial crisis, leading to a decline in car sales. This, coupled with recessionary conditions and increasing gasoline prices, has resulted in a decrease in demand for cars. To address this situation, Honda is focusing on developing smaller and more fuel-efficient vehicles.

Currency fluctuations have also impacted Honda's procurement and sales processes with foreign countries. In an effort to mitigate losses incurred from these fluctuations, Honda is taking steps to diversify its financial sectors.

With growing global concern over climate change, green marketing has emerged as a significant trend in the business world. Consequently, environmental and social issues have become strategic priorities for all companies, including Honda. In response to this demand, Honda is prioritizing the development of greener technologies such as

low emission vehicles, hybrids, and fuel cell vehiclesThe imposition of import taxes creates a legal barrier for car sales, as government taxes can potentially double or triple the price of cars. Additionally, regulations on emissions levels, fuel efficiency, noise pollution, safety standards, harmful substances control, and pollutant levels are becoming stricter and more expensive to comply with. However, some governments offer tax subsidies for low emission and green technologies. By incorporating these advancements into its marketing plan,Honda can gain a competitive edge in the business environment analyzed through Porter's Five Forces model.

The existence of substitute products may lead customers to switch to alternatives if prices increase. Moreover,in today's business landscape,it is relatively easy for competitors to replicate stylish designs. Hence,Honda must maintain its quality standards while offering reasonable pricing.To protect local businesses from foreign competition,laws are in place that restrict foreign companies from entering the market.The entry of new competitors can also reduce profits.Therefore,Honda needs to review its pricing policies or explore innovative solutions in order to remain competitive.Rivalry among existing competitors is crucial within the car industry,and Honda must fiercely compete with Toyota Motors Corp., Ford Motor Co., and General Motors.Honda maintains its leading edge by prioritizing research and development to keep up with the latest technology. Building strong relationships with customers is crucial for success, so Honda integrates social reputation enhancement and communication into its marketing program. Moreover, Honda sources materials from global suppliers who also serve other car manufacturers. They ensure competitive pricing by maintaining a steady demand for their suppliers while emphasizing "Respect for the Individual" in their marketing program.

To stay current in the IT sector, Honda has implemented e-business strategies.

This includes creating a website that allows modern interaction and expands their market reach. The website provides 24/7 access to information about Honda's company profiles, history, and financial data. Additionally, they use the website as a platform to publish annual reports and promote their products.

Honda focuses on developing high-quality yet affordable products. They utilize e-business strategies effectively to reach their target market. Furthermore, they conduct objective reviews of inquiries regarding selling plans for new products or services.

The ultimate goal is to create a marketing strategy either for a new product or service from an automaker or for an existing car in a familiar market.Honda's strategy involves market segmentation, target market selection, differentiation, and positioning of their offering in customers' minds. It also includes setting marketing objectives, developing a marketing mix for new products or services, stating the costs involved in the marketing strategy, and expectations for return on investment. Honda introduces this strategy based on their principles of "Respect for the Individual" and "The Three Joys" which encompass buying, selling, and creating. Additionally, Honda has gained a strong reputation for producing high-quality products and innovative solutions in green technologies such as hybrid engines powered by natural gas, fuel cell technology, bio-diesel fuels,and ethanol.

As part of their strategies to promote eco-driving and educate clients about green engine efficiency while ensuring safe driving practices aligned with Honda's manufacturing principles - they plan to establish a non-traditional driving school called "The Fourth Joy" or "The Joy of Driving". This driving school will focus on teaching basic driving techniques with an emphasis on eco-driving. The aim is to foster a deeper understanding among clients about Honda's commitment to sustainability.

To

ensure quality experiences for clients at this driving school and generate marginal profit to sustain the service - Honda plans to utilize a well-structured database. Understanding market needs is crucial, therefore Honda may introduce this service initially in countries where it already has branches.The driving school aims to attract customers by providing high-quality lessons and using the latest car models. The target market for this service includes individuals aged 18-45, primarily working-class people who aspire to learn how to drive and own a car. To test the viability of this service, it will be launched as a pilot project in two regions: North America and Europe. These regions were chosen based on their market potential and challenges presented by competition. Market analysis indicates that the service has high attractiveness due to increasing costs associated with driving school lessons, such as rising gasoline prices, insurance premiums, and vehicle part prices. Limited alternative options also contribute to customers having to pay higher costs. As a result, there is significant potential in the market for this specific service.In terms of competition analysis, driving school services in Mauritius and Asian countries are primarily provided by individual teachers. However, in Europe and North America, both individual instructors and small companies offer driving lessons. Honda has an advantage because of its existing infrastructure and resources. This makes it easy for them to enter the market as there is a high market appeal and increasing demand.

To attract customers, Honda should provide certain value-added elements such as teaching eco-driving techniques, educating customers on the efficiency of green engines, allowing them to drive the latest car models, hiring highly skilled driving instructors, offering price

discounts compared to the average market price, giving customers the option to choose their preferred car model, providing benefits such as insurance discounts, delivering personalized services,and being flexible with scheduling. Additionally,a certificate of completion for eco-driving techniques would be issued.

The main objective of selling this new service is to promote the concept of "The Joy of Driving" and encourage eco-driving practices and safe driving techniques.Additionally,it aims to raise awareness about the benefits and efficiency of green engines by showcasing newly released green cars and establishing a strong brand recognition that captures a new market share.The launch of Honda's eco-driving school is a strategic marketing strategy to promote their green automobiles and future developments. The target market for this initiative includes individuals seeking driving lessons, as they are more likely to be interested in purchasing a car. It is a psychological phenomenon that people tend to choose products they are familiar with and have knowledge about. Additionally, the first car someone drives often becomes their preferred choice, especially if it is a recent model. The eco-driving school benefits from Honda's strong brand recognition and advocates for an affordable high-quality service while aligning with people's desire to contribute to environmental preservation.

Upon completing the driving program at the eco-driving school, customers receive certification in eco-driving and develop an appreciation for green engines. The pricing strategy employed for this service primarily aims at promoting Honda's green vehicles. A portion of the budget will cover the extra costs of operating the driving school instead of heavily investing in traditional advertising methods like print designs, billboards, or car forums. This cost-saving approach includes utilizing the same building structure and using recently

developed cars for showroom and test drives. The enrollment fees and maintenance costs for test drives will be minimal compared to the vehicle used.Honda's financial and insurance business will cover the cost of insurance at no extra charge, as part of their casual business. The driving instructors at the school are trained staff members of Honda who have also received basic customer relation training. To ensure safety, an additional braking system will be installed in the school's driving cars. Honda's existing resources allow for a 25% discount on the price to enter the market. The price may vary for those interested in learning to drive luxury or higher class vehicles, but it remains below average market price. Customers can be picked up at Honda's showrooms, giving them a chance to see new releases and experience Honda's unique approach. Driving lessons take place on public roads and major parking areas commonly used by individual driving schools with no additional costs except for road registration fees.

Promotion efforts for the eco-driving school aim to reach target customers (age group 18-45) through popular platforms like facebook.com. Free networking installations will be provided on this website as many potential customers are connected through it. Additionally, advertisements will be placed on radio and in car magazines. Quiz competitions on Honda Green Technology will be organized to generate public interest and attract a specific customer base interested in green technologies. Winners of these quizzes will be selected as clients for batch consumptionHonda's experienced staff in customer care and public relations will support this initiative. Additionally, driving teachers within the company may receive additional training. Honda's quality management system already has established processes

for handling various aspects of customer reservations, quote preparation, vehicle delivery tracking, tax handling, and payment systems. These existing IT installations can also be used for the eco-driving school.

Furthermore, Honda can create a virtual business unit dedicated to scheduling and processing payments for online driving lessons. Clients who successfully complete the program will receive a certification in eco-driving as well as recognition for using green engines. This tangible element adds value to their development at Honda.

The SWOT analysis highlights several strengths of Honda, including brand recognition, competitive pricing, infrastructure and car availability, human competencies availability, and alliances with eco-diesel fuel companies. However, weaknesses such as an unknown market for profit generation and an entrance strategy into new markets need consideration.

The text also identifies various opportunities such as increasing demand in a lucrative market, government subsidies for eco-automobiles and spare parts, and potential free promotion of Honda products.The text highlights the importance of addressing legal compliance, patents, and potential competitors. It also discusses cost considerations and return on investment to suggest tailored marketing strategies based on specific goals. In terms of pricing strategy mentioned earlier in the text, setting up an eco-driving school can be achieved with minimal investment. This service could potentially be covered under advertising expenses by reallocating funds from less effective advertising activities. Implementing an eco-driving school would not only serve as a cost-free way for Honda to conduct advertising campaigns but also build better relationships with the public and provide valuable customer data for future developments.

3.0 Mentions

RDI Managing Marketing Management Resources Course (2010)
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Thomson South-Western
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Kassaye, W.W. (2001), Green quandary, Marketing Intelligence

The text below includes information about the source of a marketing planning document as well as links to Honda's official website, annual report CSR report and a specific marketing strategy for the "FCX" Clarity.
Source: Planning Vol.19 No.6 Kotler, P (2006) Marketing Management 12th Edition Prentice HallWebsite Links:
- Honda Official Website: hypertext transfer protocol: //world.honda.com
- Honda Annual Report 2010
- Honda CSR Report 2007

Marketing Strategy by Rohit Sharma:
- "FCX" Clarity