k10.Ipb Mktp Hatranle Assisnment1

8/13/2019 k10.Ipb Mktp Hatranle Assisnment1

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Table of Contents

Introduction: .......................................................................................................... 2

1.1 Review the changing perspective in Honda marketing planning................. 3

1.2 Evaluate Honda capability for planning its future market activity................. 9

1.3 Examine technique for organizational (Honda) auditing and for analyzing

external factors that affect marketing planning. ................................................ 16

1.4 Carry out organizational (Honda) auditing and analysis of external factors

that affecting the marketing planning in Vietnam. ............................................ 25

2.1 Assess the main barriers of marketing planning.......................................... 29

2.2 Examine how Honda Vietnam may overcome barriers to marketing

planning. ........................................................................................................... 31

Conclusion: .......................................................................................................... 33

References: .......................................................................................................... 34

Appendix: ............................................................................................................ 35


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Introduction:

Honda Motor Co., Ltd. (Honda or the company) is one of the leading manufacturers of

automobiles and motorcycles in the world. The company develops manufactures, and markets

automobiles, motorcycles, and power products. It primarily operates in North America, Asia, and

Europe. Honda is headquartered in Tokyo, Japan and employs 179,060 people. I am an assistant

research analyst working in a team for a marketing research firm in Vietnam. I am require to

provide to my team leaders (Tru and Tra) on the Barrier of Marketing planning in Honda for the

coming discussion with the client

Marketing planning is the logical sequence of events through a company to determine marketing

goals and develop a plan to achieve that goal.

I am an assistant research analyst working in a team for a marketing research firm in Vietnam. I

am requiring providing to my team leaders (Tru and Tra) on the following for the coming

discussion with the client (Business Development Manager reporting to the Marketing

Manager for Honda - Automobile {Vietnam}):

Tasks

Provide an audit report to aid in formulating a marketing plan for Honda (Automobile)

Vietnam base on the following below for the coming discussion:

Review the changing perspective in Honda marketing planning. Evaluate Honda capability for planning its future market activity Examine technique for organizational (Honda) auditing and for analyzing external factorsthat affect marketing planning Carry out organizational (Honda) auditing and analysis of external factors that affecting

the marketing planning in Vietnam

Provide slides (30 slides including tables, charts, accompanying notes, etc.) to be used asPresentations notes to the stakeholder on the following matter:

Assess the main barriers of marketing planning Examine how Honda Vietnam may overcome barriers to marketing planning


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1.1 Review the changing perspective in Honda marketing planning.

In order to understand about Honda perspectives, we have to study about the marketing evolution

because Honda company have been created long ago in the 50s when marketing have been

changes so far during that time.

(Richard T. Pascale, 1984)

As you can see the time when Honda Company has been establish, the marketing concept itself

is beginning to be clearer and then becoming one of the important factors of the company

success. Then from time to time it has been evolve into many different kinds with different

perspectives.

In the last 60 years marketing has revolve around 3 major disciplines: product management,

customer management, and brand management. Or to be more specific, the marketing concepts

evolved from a focus on product management in the 50s and 60s to a focus on customer

management in the 70s and 80s and then evolved again and added the discipline of brand

management in the 90s and 2000s. This are also the period of changing perspectives in HondaCompany for their marketing plan.


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(Phillip Kotler, 2010)

At first, during the period of marketing 1.0 (or 50s to 60s), Honda Company in this particular

time as apply this strategy into their domestic market (japan), they have developed huge

production volumes in small motorcycles.

For example: in 1959 American Honda Motor company has establish an American subsidiary,

with this policy of selling not primarily to confirmed motorcyclists but rather to members of the

general public who had never before given a second thought to a motorcycle.. Honda has

begun to push into the U.S market with the smallest, lightweight motorcycles, the company

product has sold for less than 250 dollar in retail compared to a thousand or 1500 dollar forbigger U.S or British machines. By that strategy Honda has superior to others competitors in

productivity. As evidence of Hondas strategy of taking position as low cost producer and

exploiting economies of scale, other source cite Hondas construction in 1959 of a plant to

manufacture 30,000 motorcycles per month well ahead of existing demand at the time, up until

then Hondas most popular model sold 2000-3000 units per month (Richard T. Pascale, 1984)

and also because of that strategy that makes Honda with 1959 sales of $55million become the

largest motorcycle producer in not only the US but also the world.

(Richard T. Pascale, 1984)


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During that period in the 50s to the 60s Honda has apply this strategy effectively with mass

buyers, mass production, with reasonable price, focusing on product function. The development

of product focus about body, color and style, enhance the reputation for the Company itself.

At the late 60s, Honda begun to produce automobile but also during this time was a time of

transparent between the marketing 1.0 period into the 2.0 period. During this time Honda has todeal with the sophisticated customers. The customers were raising the expectation because they

have expose into the world class service more and more every day and they can see through

marketing-speak, and they want transparency.

So Honda at that time also began to evolve and merge with the marketing 2.0 strategy and still

applying that strategy now. Making the diversity in their product, The company's popular

passenger car models include Legend, Accord, Inspire, Civic, Insight, City, Acura RL, Acura

TL, Acura TSX, Acura CSX, and CR-Z. Its popular multi-wagons, minivans, sport utility vehicle

models include Elysion, odyssey, Step Wagon, Stream, FREED, Airwave, Fit/Jazz, Fit/Jazz

Hybrid, Partner, Pilot, Ridgeline, CR-V, Element, Acura RDX, Acura MDX, and Acura ZDXAccord Crosstour. Hondas mini cars are marketed under Life, Zest, Vamos, and Acty models.

Honda has producing many kind of automobile to satisfy many types of customers with different

taste or purpose of use, from regular sedan or family cars to sport car or mini wagon.etc.

Same things go with the motorcycles business, when they producing many types of motorcycles

from: Waves Alpha, Waves 110 RSX for the low salary people to the Air blade, Leadetc. for

high salary people and SH 120cc, SH 150cc, Racing motorcycles with many types from touring,

adventure, cruiser, sport and super-sport types for rich people.

This strategy has help Honda not only gaining market share and increase profit but also thediversity of product has help Honda to have more products to satisfy the customers with different

age, gender, class, making Honda product become suitable with everyone.

As for the brand, it certainly one of the important factors that can make the company stands out

and makes the consumers recognize them. As for Honda, their brand name not only stand for the

Company anymore but they stand for the quality of the products that Honda offers which is very

reliable, thats what the consumers remembers about Honda. At this point Honda is pa rtially

apply the 3.0 marketing strategy because they have been conducting some program running

along with their product to advertising it as well, such as the teaching program which teach the

consumers not yet got the license to learn about the law, how to handle the vehicle itself. Hondaalso associates with some insurance companies and banks to provide the best service for their

customers. But due to the nature of the business itself, the 3.0 marketing plan can only be apply

partially, however Honda can may apply it in the future when the technology have are more

advance and the electrical car or clean energy car has been produce and apply more.


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Vietnamese Market:

In the early 90s, Honda has begun to advance to this market strongly and by the late 90s they

already have their first Motorcycle factory in Vietnam which provides the Vietnamese people

with mass production of small motorcycle with reasonable price applying the 1.0 marketing

planning at first but then they diversify the motorcycle into many types from times to times(apply the 2.0 strategy) to satisfy many kind of customers.

Then Honda have been permitted to conduct their own factory in 2005 to produce the

Automobile and by that time Vietnam also join the WTO making the business becomes easier for

the Honda to consume their product because at that time the needs for motorcycles have increase

and the people are demanding for the automobile with the reasonable price as well.

So by applying the similar strategy for the automobile just like I have mention above, Honda has

increase their market profit very fast. Because they have already create a good reputation among

the Vietnamese people by their good qualities and price for the motorcycles plus the marketingevents that they create in the school for children to learn about the laws in the late 90s and early

2000s have already put on these young customers mind about the Honda Products (suitable with

the 2.0 marketing plan and the Hondas slogan: Power of Dream). Furthermore, Honda comes

into the Automobile market with the 1.0 and 2.0 strategies at the same times which mean

diversify their products which can suit with any types of customers making it much easier for

this new sector to run.

Now in Vietnamese market, Honda have 4 types of Automobile introduce in this market, which

was CRV, City, Civic and Accord.

Consider the Vietnamese Population growth around 1million/ year combine with the annual

financial growth rates around 6 -8 % per year makes this become a highly potential market. Not

to mention the income around 200-400 USD/people/year making the Honda Automobile

becoming suitable for this market, not to mention the City income rates around 1000 2000

USD so it makes the Automobile of Honda not so far from the people in Vietnam in price, when

Honda already put out different types of Automobile with different price from low to high with

different model that can suit with different many types of customers.

New Honda City 2013 1.5MT price: 540 million VN

New Honda City 2013 1.5AT price: 580 million VN

New 2013 Honda Civic 1.8MT value: 725,000,000 VN

New Honda Civic 2013 1.8AT price: 780 million VN


New Honda CR-V 2013 2.0AT value: 998,000,000 VND


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New Honda CR-V 2013 2.4AT price: 1.140,000,000 VND

Honda Accord 2.4AT value: 1,435,000,000 VN


Recently, Honda have introduce the new City model in the Vietnamese market due to the

financial crisis impact in recent years making it harder for the Automobile to consume so now

theres more option for the people which can also help the company Automobile sector go

through this tough time.

As for the 3.0 strategy like I have mention before, Honda has apply the similar events for

Vietnamese market recently, but still due to the nature of the business (still causing toxic to the

nature). This strategy can only apply partially and in the future if Honda wants to apply it, they

need to research the new product which can reduce the toxic to the nature to the minimum.

Marketing-led and Market-led orientation:

Market-led orientation: its the company which focuses on the customer needs as the primary

drivers of organizational performance.

Marketing-led organization is basically led by the marketing department. Marketing orientation

might just refer to increased power for marketing personnel.

After all the analysis above we can clearly see that Honda was a Market-led Company which

driven by the needs of the customers. As for their marketing Strategy that I have analyzed above

it changing from time to time just for fitting the customers needs. Just like in the period of late

60s come to 70s when the demand of people are higher, Honda have choose to diversify theirproducts but not only in the motorcycles segment but also the Automobile segment to meet the

need of any customers.

Challenge of Market-led organization:

Sophisticated customers: Like I have already mentioned many times above. Honda also have to

deal with this problems because their customers from time to time are getting more and more

access into the different sources of information, service which result in the demand of

transparency in them.

New Competitors: From overseas or Reinventing the business. However Honda also needs to

take eyes upon the moves of the current competitors in all sectors because some of those

companies may have the new product that can change the tide of the games.

Hondas Competitors:


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Fiat S.p.A. Ford Motor Company

General Motors Corporation Harley-Davidson, Inc.

Isuzu Motors Limited Kawasaki Heavy Industries, Ltd.

Mazda Motor Corporation Mitsubishi Corporation

Nissan Motor Co., Ltd. PSA Peugeot Citroen S.A.

Renault S.A. Suzuki Motor Corporation

Toyota Motor Corporation Volkswagen AG

Yamaha Motor Co., Ltd. Audi AG

Subaru Hyundai Motor Co.

Bajaj Auto Ltd. TVS Motor Company Limited

Mahindra & Mahindra, Ltd. Bayerische Motoren Werke AG (BMW

Group)

Hero Honda Motors Limited Porsche Automobile Holding SE

New Types of organization: Outsourcing arrangements, collaborationetc.

New ways of doing business: Customers Specific marketing, Internet marketing.This part

Honda really do not need to pay much of their intention because most of this are already apply in

most of Honda Competitors and Honda itself.

Future orientation:

In this particular part, we only focus on the future of the Company, because just like any others

Company, Honda also need to consider their future as well, think of the perspectives of their

marketing strategy have to change to not.

Protect the Past Create the Future

Continue with their current products (updatingit)

Re-engineering current processes of strategiesContinue to diversify their product, withfrequent updating engine, design.Follow the current rules of the industryOperating efficiencyApply pricing strategy for suitable market(because we are in the crisis times so apply thisstrategy for suitable product with suitable

Creating a new product, developing a new kindof automobile using converted energy or other

kind of energy ( this was already done but thefact was it never actually applicable widely soit still not enough attraction and the using theelectrical energy are still not really possible formost markets. So research a new type ofenergy applicable to the product may be thebest way)


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market can increase the company profit)Continue gaining market-share, protecting the1st position in some market.

Regenerating core strategies (focusing onresearch the new types of convertible energyand product that can use it)Making or re-arrange the rules of theindustry(By completing the new product can

make Honda changing the rules of the industryitself, making others competitors has to focuson create the new product when Honda is onthe ways of dominating the market)Creating new sources of competitive advantageoutrun the others competitors

Dominate the market.

The current position and strategy of Honda are still protect the Past but Hondas have enough

resources and with the advance of technology these days, I think Honda need begin to thinkabout creating a new product which can help them change the games. Because the technologies

are advancing faster every day and many companies (Hondas competitors) are studying and

researching this field in order to create a new type of product. So Honda also needs to think

about creating their future as well if they want to dominate the market, whether its Vietnamese

market or others Market.

1.2 Evaluate Honda capability for planning its future market activity.

Gap analysis:

Before analyze and evaluate the capability of Honda in carry out the planning we have to

understand what will be the different in Honda current state and when the plan being

successfully completes.

The Gap is different between the current states of the company compares to the plan. By analyze

this we can measure the needed resources quire to complete the plan and also the capabilities of

the Company itself.

(Class notes)


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By combining this Gap analysis with the capabilities assessment of the company, we can know

what Honda needed to complete the plan.

First, in order to evaluate the capabilities for planning of Honda we have to take a look at the

resources of the Company itself.

The resources are including the Tangible, Intangible assets and the Human.

In the Tangible assets: it has the physical assets such as building, machinery, land, cash, and

inventory.etc.

Intangible assets include non-physical assets like brand or good will and copyrightsetc.

Human resources are referring to the knowledge, skills, motivation and capacity for collaboration

of Honda employees.

(Class notes)

Tangible: Its containing the financial and physical assets

Financial:

12 months

ended

Mar 31,

2013

Mar

31,

2012

Mar 31,

2011

Mar 31,

2010

Mar 31,

2009

Mar 31,

2008

Net sales and

other operating

revenue

104,906 96,704 107,479 92,210 101,916 119,801

Net income 4,170 2,702 6,777 3,038 1,537 6,262


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Mar 31,

2013

Mar

31,

2012

Mar 31,

2011

Mar 31,

2010

Mar 31,

2009

Mar 31,

2008

Return on

Sales

Gross profitmargin

25.64% 25.52% 27.30% 25.23% 25.89% 28.82%

Operating

profit margin5.52% 2.91% 6.38% 4.24% 1.89% 7.94%

Net profit

margin3.72% 2.66% 5.98% 3.13% 1.37% 5.00%

Return on

Investment

Return on

equity (ROE)7.29% 4.80% 12.00% 6.20% 3.42% 13.20%

Return on

assets (ROA)2.69% 1.80% 4.62% 2.31% 1.16% 4.76%

114,321

95,844

85,559

100,582

90,297

98,956

6,2621,537 3,038

6,7772,702 4,1700

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Jan 1,

2008

Jan 1,

2009

Jan 1,

2010

Jan 1,

2011

Jan 1,

2012

Jan 1,

2013

Net sales and other operating

revenue, excluding financeincome of finance subsidiaries

Net income


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This financial record show we that Honda income and revenue still increase over the years it

only drop in 2 years 2012 and 2009 due to the financial crisis that happen during that time. This

information alone also tell us that the company are in the stable state with powerful financial

resources and the company itself can use it in other purpose such as maintenance, updating

technology or develop new product, which help the company to increase the competitiveness in

the future.

Physical Assets: according to the scenario, Hondas operating through a global network of with

383 subsidiaries and 91 affiliates all over the world. They already have a factory in Vinh Phucwhich contains 3 different manufacturing sectors. In those 3 sectors, 2 of them are operating or

manufacturing the motorcycles and the other one is manufacturing the Automobile. This factory

alone can help Honda to makes their product become more familiar with their brand and images.

Furthermore, Honda also operating on many others place in the world with many others factories

with modern technology and machinery which assure the working condition of the employees

and the quality of the products. Each of the sectors has its own headquarters so that the Company

can know about the local trend and choose the suitable plan and products for each sector.

Intangible: its consists of the brand, goodwill, culture and value.

- Brand image/good will:Honda is one of the big brands in the field of Motorcycles andAutomobile. They already operated in the late 50s, so they have plenty of experience to

run the business in many different markets. Not to mention the evolve of the skillful and

experienced staff, modern technology, facility and machinery from time to time making

the Company itself are really reliable. In Vietnam, people already know about the Honda

brand in the 80s and become popular in the 90s then even more so when they established

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Jan 1,

2008

Jan 1,

2009

Jan 1,

2010

Jan 1,

2011

Jan 1,

2012

Jan 1,

2013

Gross profit margin

Operating profit margin

Net profit margin

Return on equity (ROE)

Return on assets (ROA)


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the factory here, which making their products available here in Vietnam with cheaper

price and making their brand image in Vietnam bigger plus their position in the world

business are also really high with the 4th most popular Car brand in the world and

56/100th world largest co-operation. Making their brand becoming really close and

reliable with the local consumers like in the Motorcycles fields, Honda have the biggest

market share and everyone in Vietnam know about Honda and probably most of them

will choose Honda brand over others.

- Culture/value: Quality and service of Honda is at the top, the company alwaysguaranteed the commitment of the staff in working and service for the customers, because

the working condition of the employees are always at its best so with the comfortable

working environment making the employees really commit with their work, treated the

customers with integrity and commitment. The quality of Honda products are at its best

because Honda is always focusing on the quality of the products first and they also

become famous with it. Usually the Honda products can use 1.5 times longer than theothers brand, which really fit with the Vietnamese culture and the good services that

Honda offering to the customers making all of these are their distinct advantages which

need to be maintain.

Human:its containing the knowledge, skills, motivation and team-work of the staff.

- Knowledge: Hondas staff are well trained and carefully selected through the selectingprocess, not to mention the training program that they had for the new employees to

strengthen their knowledge and skills as well.


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(Honda annual report, 2012)

- Skills: different skills set are require in different position but the employees skills arealways require to meet some certain requirement to maintain their position and to gain

higher position they need to get more experience and other skills which suitable with that

position.

- Motivation: Hondas policies are really fair with their employees when they have theclear promoting policy and requirement for each position. The working condition are

always being maintain at highest quality to assure the comfortable of the employees and

the bonus are given in specific events and times which motivate the employees a lots.

Many discount and special treatment with the employees, who buy the company

products, combine with the allowance for the contribution in ideas or feedback of the

employees making Honda Company become more equal.


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(Honda annual report, 2012)- Team-work/Capacity for collaboration: This is one of the requirement for the

employees in the Company because without team-work the employees itself cannot work

well at their position because its all link together in 1 whole system which related to

each other and helping each other from time to time. So this was very important that any

employees need to learn how to work with others and capable of doing that freely and

willingly.

Limiting Factors:This is referring to the things that can effect on grow of the company and its

profitability.

Honda may adversely affected by the market conditions: this can be shown in the recent years in

the Automobile business in Vietnam when the crisis hit the market the Automobile business has

to sustain some loss and the demand for both Motorcycles and Automobile have decline greatly.

Technological competition: this is the result of the advance in technological world which causing

the technological competition between Honda and others company in engineetc. Making the

risk of outdating the technology in Honda or cost of maintain the technology updated.

Products design: in this part was about the design of the Honda product because Honda unlike

the others competitors are focusing on the design part too much to get it outstanding but Honda

focus more on the quality and the neat of the products for users so it causing the products design

are not outstanding the others competitors.

Necessary investment on the equipment or updated: like I have already mention the cost of the

new equipment or updating it are always need to be consider due to the evolve in the technology

world.


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1.3 Examine technique for organizational (Honda) auditing and for analyzing external

factors that affect marketing planning.There are plenty of technique that can be used for organizational auditing and analyzing the

external factors that can affect the marketing planning of Honda. However, I have pick out 3

most common techniques to analyze it. Those techniques were: SWOT analysis, STEEPLED

analysis and Porter 5 forces analysis.

1. SWOT analysis is basically a method use for evaluate the strengths, weaknesses,opportunities, and threats. This information can then show us the competitiveness of the

company in the market.

2. STEEPLED analysis is a method that widely used to analyze the macro environment andgiving them the overview about it. The factors of this method include: Social, technology,economic, environment, political, legal, ethical and demographic.

3. Porter 5 forces are a framework to analyze the business and develop strategic plan. Thereare 5 forces that can influence that industry such as: Threat of new entrance, Supplier

power, Buyer power, Threat of substitutes and competitive rivalries.

Method Advantage Disadvantage

SWOT Provide a look upon the external andinternal of the company that helpsHonda to make alteration and makesome focus point.

Exploring Honda strengths, weaknessesso that the organization can focus upontheir strong side to accentuate thebusiness and knowing what to improvefor bettering efficiency of Hondas

business.Acknowledge about the opportunitiesand threats provide Honda betterperspectives about the risk that can harmthem and where to advance theirresources and stay on top of the games.

Honda cans easily setting objectives andgoals clearly for their strategic planningbased on these information.SWOT alone does not require a largeknowledge and skills to make but it stillsum up numerous amount ofinformation that can be useful forHonda.

Its really unilateral look that canmiss guild the Company and result inthe operating in the wrong sectionwith the wrong method.

Its only one of the commonanalytical model, so Honda still needto do more research to handle morecomplex situation that makes thismodel can be miss guild somehowand it do need more work in order toapply it into the company itself.It can be done by many people butonly few of them have a close lookabout the company operation andknowledge to analyze it carefully so

if the company use the wrong personto do this. It can cost them a lot oftime and effort because thatinformation is not really reliable.


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Its not cost much for Honda to conduct

this.

STEEPLED It gives Honda a closer look at themacro environment, business

opportunities and others perspectives.Show Honda the potential risks andminize them.Help Honda to conduct a policy that canmakes the company run better

It need frequently update so that theeffectiveness of the information can

be assureIt take times to collect all the neededinformation to analyze. Not tomention it need to go through manyanalytical steps and review to givesthe best results.The information management becomereally difficult for the staff to handlebecause it contain large amount andreally hard to assess and charaterizeit.

Because of the huge amount ofinformation and analysis makes thismethod can be missleading ormisunderstanding.

Porter 5 force Helping Honda understand both strengthand their current competitive positionand the strength of a position that thecompany is considering moving into.Clear understand about strength andwheres your power lies, Honda cantake fair advantage of strength, improve

weakness and avoid the risks.Identify the whether the new products,service or business have the potential tobe profitable or not.

Market structures were seen asrelatively static.Pace of change is more rapid now aday compares to when this methodhave been conduct.It only provides Honda a limited lookof their environment.

It does not consider the non-marketforcesMostly applicable for analyze thesimple market structure but not thecomplex one.


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Application to Honda:

SWOT analysis:

a. Strength:Honda is one of the most popular brand in the world, it has been listed number 4th in the

Automobile brand with the value approximately $14.2 billion in Brandz top 100 conduct in 2011,

with the overall ranking of 56 on top 100 list. Its strong brand image gives them the advantage to

gain higher revenue and growth in both domestic and international market. Honda also have a

large network throughout the entire world, with the network of 770 retail dealers (2180 shops) in

Japan alone and 1,300 dealers in the US; 1,370 dealers in Asia (excluding Japan); and 1,600

dealers in Europe. So due to the strong brand image the company has been able to put out theirproduct into many places with many factories and distribution channel.

Honda main products were Automobile and Motorcycles, both achieved a large amount of sales

figures: 3,512,000 units of Automobiles and 11,445,000 units of motorcycles worldwide. In term

of geography, the 2 largest consume areas for Automobile were North America with 41.5% and

28.7% in Asia (excluding Japan). About the Motorcycles the largest sales comes from the Asia

with 80.2 % (excluding Japan). Through this figure we can clearly listed out the potential market

for Honda business and the extensive production and distribution network have enhance the

global reach of Honda.

Honda Company also focusing on the R&D development, in fact they have spent around $5.7

million on R&D. We can see that Honda is pushing the research and development in order to

maintain the competitiveness of them and catch up with the changes of technology now a day. In

the Automobile business, Honda have develop and upgrading the safety performance and also try

to address the environment issues by its technology.

Strength Weaknesses

Opportunities Threats


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Furthermore, like I have already listed and mention above about the company profit,

revenueetc. The figures show that Honda was a strong company with reliable assets and

continue to making profit from time to time.

b. Weaknesses:Because of the mass production and many factories around the world, its likely that they have to

face the errors or defects part of the products in the produce procedures. For example, in January

2011, the company recalled 2,277 Accord 4-cylinder and CR-V vehicles to replace an electrical

wire harness coupler in the engine compartment. In February 2011, Honda recalled 693,497

vehicles worldwide due to defective parts that could stall the engine and cause problems

restarting in certain models. So when the defects happen during the production process it will

cause Honda a huge amount of money to get it back and they can also lose some customers due

to this incidence. In summary, Honda need to solve this problem very soon if they still want to

increase the sales and gain more attention from customers.

c. Opportunities:According to the record of the general statistic office Vietnamese current populations was around

88 million and have an increase around 1% each year, with more than 52% in the working age.

Make Vietnam market is one of the potential market for Honda plus the marketing strategy of

Honda 10years ago promoting their image through teaching law at school make the most of the

people in Vietnam right now acknowledge about their brand, which is a huge advantage for

Honda to introduce their brand and get the people attention.

Vietnam GAP growths are stable compares to others country with 5.3% in 2009, 6.8% in 2010,

5.8% in 2011 and 5.03 in 2012 and the Income per capita was around 1500 USD/person/year.

The population in geography was 30% on city and 70% on rural areas, which can help Honda to

analyze the different segment and come up with different strategy.


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Furthermore, Vietnam has already joined the WTO, the governments are now encouraged the

foreign investment, mass media, internetetc. are all developed which make it easier for Honda

to advertise their products.

d. Threats:The Automobile industry is very competitive and it also means that Honda have to faces many

strong competitors from automotive manufacturer in its various market. The competition

between the different players can automatically enhance the capabilities in the context ofcontinuing globalization and consolidation in the automotive industry worldwide. Factors

affecting competition include product quality and features, the amount of time necessary for the

innovation and development, pricing, reliability, safety, fuel economy, service customer service,

and financial terms. There are some of companys strong competitors including Ford,

Volkswagen, Audi, Hyundai, Porsche, Ferrari, Toyota, BMW, Nissan, among others.

The design of Hondas product are really limited due to the fierce competitive in the market

makes Honda have to choose to focus on a specific types of product and they choose to develop

good engine with fair design but it cannot satisfy many others customers taste (some of them like

sport or luxury.etc.).

These are also requiring the competition in term of technology, products quality and features,

fuel consumptionetc. which makes Honda really hard to characterize each one of it and focus

on certain factors. Also, with large distribution channel and scatter all across the world making it

hard for Honda to learn about each sector which has different trend and different types of

5.30%

6.80%

5.80%

5.03%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

2009 2010 2011 2012

GDP

GDP

Linear (GDP)


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product. These also make Honda subject to the changes in market environment and financial

crisis or other uncontrollable phenomenon and can be easily vulnerable and suffer huge lost by it.

SWOT Matrix:

Strengths WeaknessesOpportunities S-O strategies W-O strategies

Threats S-T strategies W-T strategies

S-O strategies: This strategy is about pursuit the opportunities that fit with the company strength.

In case of Honda, their Strength was the strong brand image that most of the Vietnamese people

have already known and the reasonable price that their product offers. The population in the city

many be much more less than the rural areas but according to the GSO 10 city in Vietnam have

dominate nearly 60% of the total income of the country so the people in these cities can afford

the Automobile made by Honda. Furthermore, Honda have newly introduce the City model of

automobile which cheaper than the others product of Honda but it still have good engine and fair

design which suitable with many average class in Vietnam.

W-O Strategies: this basically the strategy to overcome the weaknesses to pursue the

opportunities.

Honda product may not good with the design but it has the convenience and the quality plus, the

main politics central of Vietnam was Hanoi and this was one of the main segments of Honda.

These people are really consider about the function or quality that Honda famous about, because

most of the people who cares about the status are the youngster or really rich people which is not

the target of Honda. But most of Honda target was the people who work in the government orMiddle-class men or slightly higher which have the desire to buy cars that convenience going

with family .etc. which really suit with Honda product.

S-T strategies:Like I have already mentioned before. Honda Company may vulnerable to the

impact of crisis or other types of nature causes. But the fact is they have strong brand and already

have specific targeted segments combine with the good technology and being research and

develop all the times. Making them will stand strong and rise when those impacts is overs. In

fact it has been proved when the revenue recently that I have conduct above show that Honda

have gain profit and the CPI of Vietnamese people have also increase in mid-2012 to 2013.

W-T strategies:For instance, in the future Honda can introduce new product just like they have

done with the City model during the time of crisis with low price. The new product can have new

kind of design that can help the customers have more choice and draw up more customers with

different taste that Honda fail to satisfy before.


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STEEPLED analysis:

STEEPEDcomponents

Application to Honda

Social Honda operating many places across the world so they have to handle the

culture diversity and learn about the lifestyle in each different region andconsider what products will fit with each region. For instance, in Vietnamthe Northern people and Southern people have different lifestyle and status.The north people are all about the status when in the South they are moreabout the functionality.Northern people are earned 10 but only spend 1 when the Southern on theother hand earn 10 and spend 11. Because of the nature in Southern part wasabout the entertainment and economic, when Northern on the others handare about politics. So Honda have to considers the different in lifestyle andpotential to making the right move in the market, consider carefully whichproduct should go to which market.Honda also needs to know about the differences between urban areas andrural areas and its income before selling their products. Vietnam marketwith the tendency prefers Motorcycles over Automobile so Honda alsoneeds to learn about the customers segments as well.

Technological The technological factors play a big role in the Automobile business.Although Honda have spent a lot of money in the Research & Development.They already have the modern technology and the product that can meet itsrequirement but due to the advance of technological world, Honda stillneeds to pay attention at this part at all time.According to Honda main website, they are now have been developingCutting-edge technology to maximize the space and making the consumersmore comfortable with their products.Hondas also famous about the Fuel Injection system, which can help their

products minimize the use of fuel and still maintain the performance of theproducts.Through this technology, Honda also develop a product friendly withenvironment recently and they are still doing the research in order toupgrade their product to be more friendly with the environment which canwin the heart of anyone and any government.

Economic Honda have to pay attention on the GDP and income per capita of theVietnamese market and people because by looking at that figure Honda canestimate the standard living of people in Vietnam. Then come up withdifferent pricing strategy that can effect on the consumer attention. ButHonda also has learned about the inflation rates, tax rates or CPI ofVietnamese market. To Consider the fact about Vietnam current situationand Vietnamese people current state, whether they can afford the companyproduct or not, the making plan on the how to encounter with this problemand how to making it better in the future.For example: according to the GSO the inflation rates of Vietnam recentyears were: 6.52% in 2009, 11.75% in 2010, 18.13% in 2011, and 6.81% in


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2012. By looking at this combine with the others sources of information wecan know that the inflation rates are suffering the impact of the financialcrisis and in 2012 the government have already balance it, which can beresult in the increase in the consumption of people (CPI). According to theGSO, the CPI in mid- 2012 have raise above average for the last 3 years and

this was a good sign telling Honda that this Market is on the ways ofgaining back their growth rates.

Environment The environment in Vietnam that can affect Honda was the flood that canhappen every year making it impossible for deliver the products and thattime. So Honda needs to acknowledge the flooding time and the place thatusually suffer it. Making the backup plant for transportation or deliveringschedule. Honda also needs to look at the Vietnam terrain to be able toproduce their products suitable with the terrain in Vietnam, avoid the lowchassis that usually cannot move freely in the Vietnam road.

Political The political central in Vietnam was the Capital city Hanoi. Most of thepolitical activities are being run in this particular city so while develop their

products Honda also need to focus on this city and advertise here, makingeventsetc. to gain the government support or attention. Recent years whenVietnam and Japan already in a close business relationship and even closerwhen Vietnam joined the WTO. Vietnam also uses the ODA funds of Japanso that also means the operation of Honda in Vietnam are more and easierthan it is before. Not to mention the recent issues with China having bothJapan and Vietnam rage about the China government action which result inthe Japan draw many of their project and funds out of China and invest it inVietnam, strengthen the relationship between 2 country which helping theHonda gain more competitive advantage over other foreign competitors.

Legal Vietnam already opens up the market but the government is still a

communist party so the government itself has a really big effect upon themarket. Honda need to pay attention and maintain the relationship with thegovernment in case of any policy has been publishing that can effect onHonda.In the Automobile sectors the importing tax policy of automobile intoVietnam is still very high so Honda still need to develop their product in thefactory that they already have here better than importing and may beconsidering expand the Automobile factory more.

Ethical Honda has created the comfortable working environment for theiremployees. Treating them with dignity and not only that they have alsotreated their employees fairly by allow the employees to have contribution,

ideas or feedback to the company. Combine with trick training program,clear promotion policy.Hondas products are now have reduce the fuel put out into the environment

and they are more and more responsible by invest in research the friendlyenvironment products/fuels that can protect not only the people but also theenvironment as well.

Demographic This is the divide into different segment or to be more specific: age, gender,incomeetc. These are the things that differentiate the customers of Honda


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into different types that suitable for different products. For example, withage, young people have the tendency on sport design and cheap price, withgood engine. This people suitable with the Waves products in themotorcycles sectors and about the Automobile if they can afford it, they canhave some things that consider more about the design like a civic. But

remember that most of the people that can afford the car in Vietnam werenot youngster but the people already have stable job and paycheck, most ofthem buy the Honda product because of the quality and the good engine thatthe company provides. But some of them prefer the design; this was thesegment that needs to be differentiated.

Porter 5 forces:

(Michael E. Porter, 1979)

Threat of substitution This can be consider as a low threats because Honda already havemany kinds of products that can satisfy with many types ofcustomers like I have already mention before. Moreover, thissubstitute if it has would be a complete new kind of product thatcan change the tide of the games a new substitution for Automobilewhich means using different kind of fuel.etc. This likely to

happen because now Honda already research a lot about to have anew kind of product like that and the others has to but in the nearfuture that kind of product will not likely to occur.

Threat of New entrance This referring to the new competitors that can penetrate the market


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and take over the market share by its product. But this was reallydifficult because now in the Vietnam market, both Automobile andMotorcycles business are already saturation and the same goes withothers market in the world.

Bargaining power of

suppliers

Honda already have the stable sources of supply and Car

manufacturer industry is quite big and the feature of the productwhich has been develop by others (outsourcing) can be easily getdue to the high demand of the market making many organizationwork in this field.But in order to make sure the production rates, Honda still need toassure about the supply sources.

Bargaining power ofCustomers

The Vietnam market now has much different car manufacturercompany and the competitions here are very high. So the customershave many choice to choose from but this was also the problem forHonda because there are so many product in the market that theyhave to compete so they cannot deal with all of them but only

focusing on produce some of the products that they can see fit withthe income and the culture of Vietnam people, which means thereare a lot of others customers with different taste that Honda cannotcover.

Rivalry among currentlycompetitors

As I have already mention before the competition in this marketwere very high. Because each of the manufacturer have focusing onspecific types of products but not cover too many of them to avoidthe possible lost and every companies want to do their best to gainmore market share or profit than the others making it hard foreveryone. . For instance, these are some of the Honda Currentcompetitors Toyota, Ford, General Motors, Volkswagen A, Yamaha

Motor Co., Ltd.Audi AG, Subaru, Hyundai Motor Co.,Bajaj AutoLtd.,TVS Motor Company Limited,Mahindra & Mahindra, Ltd.Bayerische Motoren Werke AG (BMW Group). All of thesecompanies are always keep innovation, evolve a research to stayeffective and competitive in this market.

1.4 Carry out organizational (Honda) auditing and analysis of external factors that

affecting the marketing planning in Vietnam.

The marketing audit is basically the examination of the companys marketing environments and

activities to find out whats wrong with it and what were its opportunities and how to improve it.

Its an extensive, systematic, independence and regular examination process of a companysmarketing activities.

Honda also needs this process to assess their marketing plan and improve it, make it work

effectively and efficiently.

Marketing audit contains the following components:


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high price in order to satisfy demand, reflecting the level of the user. Hondas pricing strategy

was aiming at their targeted consumers, which is the middle-class people. These people were the

main customers of the company throughout all these years. However, Honda not going to stop at

this point, they already have the high class products imported from the other country to penetrate

the high-class people, who are willing to pay a substantial amount of money for what they want.

The Honda's pricing strategy is extremely correct and the most obvious proof that they had been

in Vietnam for a long time, after many years of business, Honda never become an old brand that

the company continues to grow, even on an accounting for more market share. Even in the time

of crisis, when their products cannot sales as much as it was before, they have immediately

introduce the new kind of product (City model) with the low prices and still have fair model,

many option colors, lower the consumption level of fuel, which really suitable for the time of

crisis.

In summary, the marketing objectives and strategy of Honda are going into the right ways which

can help them a lot in complete the main objectives is to gain more market share become the 1st

in Automobile just like in Motorcycles.

Marketing systems:this was about the procedures to form a marketing plans and how Honda

manage and control of these plans.

First in order to form marketing plans, Hondas going to need to information of the market and

related information. So basically the marketing information system here is a management

information system (MIS) designed to support marketing decision making.

Marketing Planning

Distribute

information

Assess the

information needs

Analyze the given

information

Internal Database

Marketing

Research

Marketing

Intelligence

Market environment


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After evaluate and characterizing the information in market, it will be distributing not only for

the marketing departments but also others departments within the company as well. Because itjust like I have already analyze, marketing cannot be isolated with the company or others

departments.

Then it comes to the planning system which contains the process of implementing the marketing

plans/strategy. Its related with the corporate objectives and business-level objectives as well,

because in order to make a marketing plan that can really help the Company, it has to link with

the corporate objectives and different business level objectives to come up with the proper plans

and objectives of its own.

After conduct and link the marketing objectives and plan with the overall objectives. Honda also

needs to formulate them for specific market situations, link them with the market trends,

customers and other internal sources. Then comes to the last part which was controlling and

implementing the marketing plans, in this part Honda need to supervise, control and making

proper alteration if possible when the marketing plan is being implemented to assure the

marketing plan can reach its objectives.

Marketing organization:

Corporate mission statement (qualitative

and philosophical)

Corporate (business) objectives

(Quantifies and operationalises with the

mission statement)

Funcitonal Objectives (marketing)

(Quantiative, measurables)


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This part was to assess the capability of organization to implement the plan. Like I have already

mentioned and analyze many times above, Honda using market-led marketing plan which driven

by the customers and its Honda aim to satisfy the customers as well. Furthermore, Honda brand

was very strong in Vietnam market making it qualify enough to implement the plan, not to

mention the strong financial assets, incomesetc. of the company itself making it sufficient to

carry out the plan, with the well trained staff, with knowledge of the market and experienced.

Hondas fully capable of carry out the marketing plan.

Marketing function: Hondas marketing plan function was to gives the customers the satisfy

with fully access with the different types of Automobile with different prices from low to high

comes with different version and color, model. These products like I have mention before, is

made specifically for certain kind of customers. Each of these products has been suitable with

different kind of customers.

New Honda City 2013 1.5MT price: 540 million VN

New Honda City 2013 1.5AT price: 580 million VNNew 2013 Honda Civic 1.8MT value: 725,000,000 VN



New Honda CR-V 2013 2.0AT value: 998,000,000 VND

New Honda CR-V 2013 2.4AT price: 1.140,000,000 VND



The new City has been introduced recently due to financial crisis. So this product has given out

into the Vietnam market in order to satisfy the customers in hard time like this. Themanufacturing system and distribution channel of Honda was very good and with stores channel

all over the country, Honda can assure the products sources for Vietnam market.

2.1 Assess the main barriers of marketing planning.

Barrier

Confusing tactic and strategy This referring to the misunderstanding between 2 concepttactics and strategy.The strategy here is about the global plan to reach the long-term goal while the tactics is a short-term planThis can be sometimes confusing because of the similaritiesbetween them although they may look different but the fact isthey all have the common goals that are why they can beeasily confuse.For example:Strategy is connect with customers while they comes to thestore and increase salesTactic: offering location based mobile apps on top three


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platforms; provide more option for the customers.

Isolation of the marketingfunction

This is referring to the disconnected of the marketingdepartment or marketing with others part of the companywhich result in the poor marketing planning and workingbecause theres no connection between the company

activities and the marketing activities.For example: the marketing department of Honda does notwork with any other department want to promote the SH 150iwhen the market segment are for the low income people thatonly prefer Dream or Waves 110

Confusing marketing functionwith concept

This happen when the marketing concept being confuseswith its function. It happen because of the concept ofmarketing that we thought is only about the advertisingproduct or promoting brand image while the marketingfunction is much more than that. Its containing the

promotion, pricing, financing, distributing, and information

gathering.etc. many more which means much morecomplex than the concept.

Organizational barriers This was about the lack of viable business model orplanning, structuresetc. which can cause Honda cannot

function well with the market and cannot reflect it and tallthey have was just the function department with no relatedwith market.Organization structure cannot reflecting the market itselfmaking it hard to know about their activities and just workthrough the pointless function departments.

Lack of in-depth analysis These happen when Honda company conducts a plan and

analyze the information not deep enough to making somereasonable consideration. Being easily deceived ormisleading by that information or by the environment itself.

Confusion between process andoutput

The processes here were the ways of how things get done orhow Honda would have carried it or work it. When on theother hand output was the result of the process itself.We can understand it like this the first things we need wasthe inputprocessoutputThis was also referring to the information gathering systemsor many others kind of systems that can be confuse with.

Lack of knowledge and skills This is about the Human resources of the Company (Honda)

when they are incapable of carry out the task due to theexperiences that they have is not enough or the skills,knowledge they have not sufficient to carry out the task. Thishappen when the employees of the company are not welltrained or not being verify thoroughly.

Lack of Systematic approach In all Company or organization, they all need a system tocontrol things from the inside or the procedures of how tocarry out the worketc. without any specific procedure the


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work itself cannot be carry out due to the chaos in the thatoccur because it does not have any procedures and lets thingswork freely without control.

Failure to priorities objectives The company objectives work as the guiding star for thecompany to follow without any objectives the company will

not function because theres no specific aim to head to andno work was given due to the objectives not being prioritiesand making the loss and impact for the organization as wellas the resources that require to complete that objectives.

Hostile corporate culture This is referring to the fight and disagreement that occurwithin the company. Making department and peopleincapable of working together as a whole but they begin towork alone and try to pull each other to the ground which canmake the Organization suffer many losses.

2.2 Examine how Honda Vietnam may overcome barriers to marketing planning.

Barrier How to overcome

Confusing tactic and strategy First, Honda company need to develop a strategic plan thendevelops the lower level operational plan. The tactics need to bespecify or directive and clearly demonstrate how the staff of thecompany will jointly achieve the strategy.

Isolation of the marketingfunction

Honda need to makes the marketing related with the companydepartments and objectives, functions etc. so that the

marketing can work effectively. The most important things it

makes the marketing function close with the customers that itcan draw the customers attention and still related with thecompany.

Confusing marketingfunction with concept

Honda need to look at the whole organization, not just some pureactivities set only. But it need to be market-focused, relating tomany activities and work in the organization itself.Avoid the confusing between these 2 and to be able to do thatHonda need to clarify these 2 and take a look at the real functionand activities that it carry outs not just doing things according tothe concept.

Organizational barriers Honda function and structure should being build up to work with

the marketplace as a whole because without the good structure.The company only working through the departments and itsfunction which cannot reflect the market and cannot connectwith it and results in bankruptcy and loss are inevitable.

Lack of in-depth analysis Honda should analyze the information related to the marketdeeply, also analyze their plan to penetrate the market or delivernew products deeply because it can assure that all the risks,opportunities.etc. are being consider and it actually a plan that


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already being taking many consideration and can workthoroughly. Or in other words, making an effectives marketingaudit to get to know the market, their current stateetc.

Confusion between processand output

In order to avoid the confusion in this factors. Honda needs toclarify the characteristics of these components. For example:

with the SWOT analysis, the information that Honda can gatherwas the input, the step to process those information andcharacterize is the process and the last one was the final

analysis which was the output.

Lack of knowledge and skills Honda need to get their eyes on the staff, making sure that thestaff/employees was qualify to handle their position. Theverification part need to be done closely and good. Then thetraining program needs to be conduct and analyze thoroughly sothat the Employees can actually gain and be better after thetraining programs. Ensure that the people related to the businesshave the knowledge and skills to handle the task.

Lack of Systematic approach In order to prevent this or overcome it, Honda need to conduct aset of written procedures that cover all issues in all areas of thebusiness. By this ways the control and authorities, function,.

Of each department, people.etc. of the company being controland work systematically.

Failure to prioritiesobjectives

Honda needs to analyze the impact of those objectives and thenevaluate them. What will be the resources that its require, how

bad was the impact of them?Then making some adjustment in the company function thatmakes sure it works according to the objectives and follow it.

Hostile corporate culture First the employees need to participate in the company works

and support the leaders. Then the leaders itself need to motivateand straighten things out with the staff so that they can worktogether without any hostility.


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Conclusion:

I am an assistant research analyst working in a team for a marketing research firm in Vietnam. I

am complete the requirement to provide to my team leaders (Tru and Tra) on the following for

the coming discussion with the client (Business Development Manager reporting to the

Marketing Manager for Honda - Automobile {Vietnam}):

Tasks

Provide an audit report to aid in formulating a marketing plan for Honda (Automobile)

Vietnam base on the following below for the coming discussion:

Review the changing perspective in Honda marketing planning. Evaluate Honda capability for planning its future market activity Examine technique for organizational (Honda) auditing and for analyzing external factors

that affect marketing planning

Carry out organizational (Honda) auditing and analysis of external factors that affectingthe marketing planning in Vietnam

Provide slides (30 slides including tables, charts, accompanying notes, etc.) to be used asPresentations notes to the stakeholder on thefollowing matter:

Assess the main barriers of marketing planning Examine how Honda Vietnam may overcome barriers to marketing planning


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References:

Class Notes

Honda Motor Co., Ltd.. (2012). Honda annual report.Available:

http://113.171.224.206/videoplayer/honda2012ar-all-

e.pdf?ich_u_r_i=cdc7b92f948a37e0515ff38d439961b4&ich_s_t_a_r_t=0&ich_e_n_d=0&ich

_k_e_y=1345088912750063402401&ich_t_y_p_e=1&ich_d_i_s_k_i_d=9&ich_u_n. Last

accessed 12th Aug 2013.

Michael E. Porte. (1979). Porter's Five Forces.Available:

http://vectorstudy.com/management-theories/porters-five-forces. Last accessed 12th Aug

2013.

Phillip Kotler. (2010). Marketing 3.0.Available: https://www.inkling.com/read/marketing-3-

philip-kotler-1st/chapter-1/table-1-1. Last accessed 12th Aug 2013.

Richard T. Pascale. (1984). Perspectives on Strategy: The Real Story Behind Honda's

Success.Available: https://faculty.fuqua.duke.edu/~charlesw/s591/Bocconi-

Duke/Papers/new_C12/perspectivesonstrategy.pdf. Last accessed 12th Aug 2013.


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Appendix:


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