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BANKING ACADEMY, HANOI

BTEC HND BUSINESS (ACCOUNTING)


TAKE-HOME EXAM PAPER COVER SHEET
NAME OF STUDENT

(VN)

(ENG)

REGISTRATION NO.

Class: FO7

EXAM TITLE

Honda Vietnam Company: Segmentation, Targeting and Positioning

ASSIGNMENT NO

1 of 2 (Exam)

NAME OF ASSESSOR
DATE
TIME

Module Code: UNIT NO. 04


Module Title: MARKETING PRINCIPLES

Take home exam (redo)

Instructions:
Please read all questions carefully. Make sure you are answering the question
and providing a direct, concise answer. Write your name, class and student
registration number is on both the exam form and on your paper.

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Exam Received By:

FO7: MKT A1 (EXAM) QCF NOV 2014

Date:

Unit Outcomes
Outcome

Evidence for the


criteria

Feedback

Assessors decision
First
attempt

Understand
the concept
and
process of
marketing
LO1

Be able to use
the concepts
of
segmentation,
targeting
and
positioning
LO2

Explain the various


elements of the
marketing process

1.1

Evaluate the
benefits and costs of
a marketing
orientation for a
selected
organisation

1.2

Show macro and


micro environmental
factors which
influence marketing
decisions

2.1

Propose
segmentation criteria
to be used for
products in different
markets

2.2

Choose a targeting
strategy for a
selected product /
service

2.3

Demonstrate how
buyer behaviour
affects marketing
activities in different
buying situations

2.4

Propose new
positioning for a
selected
product/service

2.5

Internal
Verification

Rework

Pass
Grade Awarded
Referral

FO7: MKT A1 (EXAM) QCF NOV 2014

Outcome

Evidence for the


criteria

Feedback

Assessors decision
First
attempt

Internal
Verification

Rework

EXAM
Overall, youve:
passed:
all outcomes
1.1 / 1.2 / 2.1 / 2.2 / 2.3 / 2.4 / 2.5
referral:
all outcomes
1.1 / 1.2 / 2.1 / 2.2 / 2.3 / 2.4 / 2.5
Areas for improvement:
To achieve a pass, you need to meet all the requirements set in the assessment criteria
more relevant answer
better knowledge
more and better explanation
more organization specific examples
more analysis
more critical thinking
improve in your class attendance
put in more effort in your studies
do not plagiarize with same answer as another student in prepared notes
ASSESSOR SIGNATURE

DATE

/ 2015

NAME:

(Oral feedback was also provided)


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DATE

NAME :..............................................................................
FOR INTERNAL USE ONLY
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DATE

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FO7: MKT A1 (EXAM) QCF NOV 2014

CASE SCENARIO

COMPANY PROFILE: HONDA VIETNAM COMPANY


Honda Vietnam Company which was established in March 1996 with charter capital
of 62,900,000 million US dollars is a joint-venture of Honda Motor Co., Ltd (Japan),
Asian Honda Motor Co., Ltd (Thailand) and Vietnam Engine & Agricultural Machinery
Corporation. At early days, the company specialized in manufacturing and
assembling motorcycles. By 2005, Honda Vietnam received the adjustment
investment license in which automobile assembling was added to its business, it also
provides warranty services, repairs motorcycle and automobile. Honda motorcycles
and automobiles always take up the leading market shares for the high-class
motorcycle range in Vietnam making Honda to be the leading company in motorbike
industry
INTRODUCTION
Motorcycles are vehicles primarily important in Vietnam. Since Honda entered the
Vietnam market over 10 years ago, the company has continually invested to build
production infrastructure to meet the increasing demands of the market which is the
motor vehicle up nearly 90% in the large cities.
BRING TO THE HIGH-TECH MOTORCYCLES AND ENVIRONMENTALLY
FRIENDLY
- The first motorcycle plant
March 1998, Honda Vietnam inaugurated the first unit. Considered one of the
motorcycle manufacturing plant in the most modern in Southeast Asia, Vietnam's
factory Honda demonstrates serious intent investments and long-term Honda
Vietnam market.

Established: 1998.

Headquarters: Phuc Thang Phuc Yen, Vinh Phuc.

Investment capital: USD 290,427,084.

Labor: 3,560 people.

Capacity: 1 million units / year.

Honda Vietnam Company (HVN) is a joint venture consisting of 03 partners:

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Honda Motor Co. (Japan - 42%)


Asian Honda Motor Company (Thailand - 28%)
Dynamic Machine Corporation and Farm Machinery Vietnam - 30%)

The second motorcycle plant

To meet the growing needs of customers in Vietnam, Honda Vietnam has decided to
invest in expanding production, increasing production in Vietnam market. August
2008, second motorcycle factory specializing in the manufacture of scooters and
vehicles with a capacity of 500,000 luxury vehicles / year was inaugurated in
Vietnam. This special motorcycle factory 2nd factor is the "friendly environment
and people." Accordingly, this plant is based on a combination of harmony and most
affordable natural energy resources are: Wind, Light and Water.

Year of establishment: 2008

Headquarters: Phuc Thang Phuc Yen, Vinh Phuc

Capital investment: $ 65 million

Labor: 1,375 people

Capacity: 500,000 units / year

Up to the present time, the total production capacity of the second motorcycle plant
is 1.5 million vehicles / year, bringing Honda Vietnam has become one of the plant's
largest motorcycle manufacturer in the region and world.

Automotive manufacturing plants

-Year of establishment: 2005

- Headquarters: Phuc Thang Phuc Yen, Vinh Phuc

- Capital investment: Approximately $ 60 million

- Area: 17.000m2

- Labour: 408 people

- Capacity: 10,000 units / year

Automotive manufacturing plant is equipped with machinery and equipment similar to


Honda plants in other countries with special importance criteria of quality, safety and
environmental friendliness. Moreover, the plant is equipped with the engine
assembly line with the desired localization step automotive products.
COMPANYS OBJECTIVE
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"Maintaining an international viewpoint, we are dedicated to supplying products of


the highest efficiency, yet at reasonable prices, for worldwide customer satisfaction."
(1956)
VISION STATEMENT
To become a company that society wants to exist.
MISSION STATEMENT
To enrich the social, economic and educational well-being of communities and
society through corporate and individual participation. Honda Vietnam's activities
have been oriented toward the community since establishment.
A HOLISTIC MARKETING ORIENTATION AND CUSTOMER VALUE
A Holistic Marketing Orientation can also help capture customer value. Holistic
marketing can be expressed as integrating the value exploration, value creation and
value delivery.
- Value exploration
Honda explores the value for customers by using their capabilities. They research on
the cognitive space of customer. They follow the trends and current market structure
for their products.
- Value creation
For value creation Honda understands the customer wants and benefits. And utilizes
their core competencies and made hybrid and fuel efficient cars.
- Value delivery
Honda internal resource management, business partnership management and
customer relationship management allows the company to discover how its customer
behave and what they need or want. For high value delivery Honda made customer
and service centers in 911 countries.

MACRO ENVIRONMENTAL FACTORS IN VIETNAM FOR AUTOMOTIVE


INDUSTRY
-

Vietnam is the next investment destination for many: Does this hold true for
the automotive and auto parts industry?

Increasing political and exchange-rate stability, along with promising gross domestic
product growth have catapulted Vietnam to the top of many investors agendas
.
On Jan 11, 2007, Vietnam became the 50th member of the World Trade Organization,
six years after China gained membership. Vietnams acceptance into the WTO
validated its global economic viability and left many people asking, Is Vietnam the
next China? Vietnams recently transformed and relatively young stock markets
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currently offer some of the worlds highest returns, with the market index
skyrocketing from just over 300 points in early 2006 to well beyond 1,000 points by
years end.
.
But what does rapid economic growth mean to the domestic automotive and auto
parts industry? Will Vietnam replicate the success China enjoyed in the automotive
industry after joining the WTO? For the intrepid, Vietnam does offer possible medium
to long-term opportunities. However, the Vietnamese automotive industry is
still in an early developmental stage and significant challenges remain.
- The Vietnamese automotive industry
The automotive industry in Vietnam is relatively young. Before 1992, most vehicles
were procured by the government and imported from the former USSR and other
Eastern-bloc countries
In 1986, the Vietnamese government initiated a set of policy changes to stimulate
and liberalize the economy, known as the Doimoi (or renovation) policy. While the
Communist Party remained in control of the political system, the government
incorporated elements of capitalism, granting auto assembly licenses to more than
30 regional assemblers. These included state-owned enterprises, local Vietnamese
companies, joint ventures and foreign-owned original equipment manufacturers
(OEMs). Complete knock-down (known as CKD) assembly began in 1995, with
Mitsubishi, Toyota and Isuzu becoming some of the first global OEMs in Vietnam
.
A decade later, Japanese auto assemblers have proved there is still a long way to go
in order to achieve economies of scale in automobile production in Vietnam.
In recent years, new automobile sales in Vietnam have slowed. Among the factors
affecting sales are:
- Consumer preferences for motor bikes - automobiles are too expensive for
many Vietnamese;
- Better and more roads are needed;
- Parking is scarce;
- Tax policy
Recent economic growth has been strong. GDP rose 6-8 percent from 1997 to 2004,
8.1 percent in 2005 and 8.1 percent in 2006.
With this boom and stock market development, the local automotive industry boom
and stock market development, the local automotive industry expects to reap
significant benefits, but an overall strong economy has not yet translated into
automotive success.
- High ownership of motorcycles in Vietnam
Seven years ago, low-cost Chinese-made motorcycles took Vietnam by storm, taking
substantial market share from the Japanese market leader.
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Sluggish automobile sales growth in Vietnam does not come as a surprise when the
following factors are considered:
- Underdeveloped infrastructure
- High taxes
- Low per capita income
- Removal of pre-owned car ban
One indication of whether an emerging economy has transformed itself from
agriculture-based to manufacturing-based (or experienced export-led expansion), is
the growth of automobile sales compared with the growth of motorcycle sales.
The ownership ratio of motorcycles to cars in Vietnam is one of the highest in the
world and continues to rise. The number of motorcycles is expected to double
within the next 15 years, according to Vietnams current motorcycle master plan
demand forecast.
By comparison, passenger car ownership levels in Vietnam are among the lowest in
the Asia Pacific region, with15 units per 1,000 people in 2004. This is an indicator of
tremendous untapped market potential.

Vietnam motorbike market slump to continue

A saturated market and general tightening of belts again drove motorbike sales
down, forcing Honda and other leading brands to sell at below cost last year.
Industry insiders said the market has been gloomy despite various promotions and
discounts even during peak sales seasons like the New Year and the start of new
school year, pushing sales down to 2.79 million motorbikes in 2013, down 10 percent
year-on-year.
Sales had fallen by 6.6 percent in 2012.
A report from the General Department of Customs showed that the number of
motorbikes imported fell by half to 18,866 units and by 40 percent in value to less
than US$42.3 million.

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Major foreign companies like Honda, Yamaha, SYM, Suzuki, and Piaggio have a
total capacity of more than five million units a year in Vietnam, besides which some
Vietnamese companies too manufacture motorbikes.
Kiyokazu Sasabe, deputy general director of Honda Vietnam, was quoted as
saying by Thoi bao Kinh te Saigon (Saigon Times) Online newspaper that his
company's two factories in the northern province of Vinh Phuc had to lay off 500
employees last year as did its competitors.
The companies say profits, if any, now come from repairs, replacements, and sale of
parts.
Many shops selling imported motorbikes in Ho Chi Minh City have closed down.
They said the economic situation is the major factor when people decide to buy
a motorbike, but admitted the market has almost reached saturation point.
The less important players have been developing niche markets to avoid
competition.
MARKET SEGMENTATION
Suzuki, Yamaha, and SYM last year launched many sports and below-50-cc models,
segments ignored by Honda, which dominates the market with a more than 60
percent share.
They also offer smaller, cheaper models for students and housewives, and fuelefficient vehicles.

POSITIONING MAP
The position of Honda Lead is good when compare with Elizabeth, Click and Cuxi.
Its price is higher than Elizabeth, Click and Yamaha Cuxi but the quality is the
highest.

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DRIVING OUT
Insiders said 2014 is likely to be another difficult year with competition being harsher
than ever.
Masayuki Igarashi, general director of Honda Vietnam, said the economic indicators
do not seem bright yet, so the motorbike market will surely continue to be difficult.
He expected the company to sell 1.8-1.9 million motorbikes, the same as last year.
But the company would not cut back on production and instead would use Vietnam
as an export base.
It has decided to open its third factory -- in Ha Nam Province near Hanoi -- this year,
a year later than planned. The factory will have a capacity of 500,000 motorbikes a
year and is expected to produce 10,000-15,000 motorbikes in the first year.
Igarashi said the difficult economy would keep the Vietnamese currency stable, an
export advantage.
Businesses will surely boost their exports and turn Vietnam into a motorbike
manufacturing center in Asia.
Honda plans to take more of its luxury models to the US and Europe.
A Piaggio Vietnam source also said the company is eyeing new markets.
But insiders admitted exports would not be easy since producers in other Asian
countries like India, China, and Indonesia are also gearing for export.

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Source:
http://www.scribd.com/doc/67069257/Marketing-Analysis-Honda#download
http://www.honda.com.vn/vn/gioi-thieu/gioi-thieu-chung/
http://corporate.honda.com/america/philanthropy.aspx?id=philanthropy_overview
http://www.history.com/this-day-in-history/honda-motor-company-is-incorporated
http://www.slideshare.net/SuhaibTariq/honda-assignment
http://pwc.blogs.com/files/vietnam.pdf
http://www.thanhniennews.com/business/vietnam-motorbike-market-slump-tocontinue-23874.html
http://www.scribd.com/doc/62148429/Buyer-Behaviors-Product-Analysis-YamahaCuxi#download
Visit Hondas website: http://www.honda.com.vn/

Role
You are a member of the market analysis division reporting to the Product Manager
for Honda Motors Co Ltd. You are asked to look into the marketing aspects of Honda
motorbikes on the following and to compile a report to be table for discussion:

Explain the various elements of the marketing process

(1.1)

Evaluate the benefits and costs of a marketing orientation

(1.2)

Show macro and micro environmental factors which influence marketing


decisions
(2.1)

Propose segmentation criteria to be used for products in different markets (2.2)

Choose a targeting strategy for Honda motorbikes

Demonstrate how buyer behaviour affects marketing activities in different buying


situations
(2.4)

Propose new positioning for Honda Motorbikes

(2.3)

(2.5)

GRADING
Pass

is achieved by meeting all the requirements defined in the assessment


criteria.

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--- End of Exam Paper ---

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