Automobile Industry – HONDA

Honda is a Japanese public multinational

conglomerate corporation primarily known as a
manufacturer of automobiles, motorcycles, and
power equipment. It is world’s largest motorcycle
manufacturer and one of the largest automobile
manufacturer. Its inception was on 1959. It is
headquartered on Tokyo, Japan. Thecompanyhas
assembly plants around the globe. American
Honda Motor Company which is based in
Torrance, California is another Honda subsidiary.
Apart from that Honda has motorcycle racing
division called Honda Racing Corporation
(HRC). They have Hero Honda Motorcycles in
India. The company also runs business innovation initiative called Honda Xcelerator, in
order to build relationships with innovators, partner with silicon valley startups and
entrepreneurs.

AUTOMOBILE INDUSTRY IN INDIA

Automobile industry is the key driver of any growing economy and plays a pivotal
role in country's rapid economic and industrial development. India became the fifth
largest auto market in 2019 with sales reaching to 3.81 million units. It was the
seventh largest manufacturer of commercial vehicles in 2019. India is also a
prominent auto exporter and has strong export growth expectations for the near
future. In addition, several initiatives by the Government of India and major
automobile players in the Indian market is expected to make India a leader in the two-
wheeler and four-wheeler market in the world by 2020. Due to its deep forward and
backward linkages with several key segments of the economy; automobile industry
has a strong multiplier effect and is capable of being the driver of economic growth.
The Indian automobile industry has made rapid strides since delicensing and opening
up of the sector in 1991. The passenger car industry was, however, delicensed in
1993. The industry contributes ~22% of India's manufacturing GDP (Gross Domestic

1
Product) and ~7% of India's overall GDP. The Indian automobile industry provides
direct employment to 1 million people and indirect employment to 18 million people
in the country. The Indian automobile industry, comprising passenger cars, two-
wheelers, threewheelers and commercial vehicles, is the seventh-largest in the world
with an annual production of 20.4 million vehicles, of which 2.9 million are exported.
Two-wheelers, being the most popular means of personal transport, alone account for
about 75% of the total automobile production in India, while passenger vehicles
account for nearly 16% of the production. However, owing to their lower sales
realisations, two wheelers account for only around 32% of the sales in terms of value
while passenger vehicles account for around 62% of the same. Commercial vehicles
are categorised into heavy, medium and light. They account for about 5% of the
market. Three wheelers are categorised into passenger carriers and goods carriers.
Three wheelers account for about 4% of the market in India. The passenger vehicles
are further categorised into passenger cars, utility vehicles and multi-purpose
vehicles. In the passenger car segment, India is mainly a small car market though mid
size and big car sale is continuously rising in recent years.

Some Government initiatives towards the automobile industry:

 Under Union Budget 2019-20, the Government announced to provide additional

income tax deduction of Rs 1.5 lakh (US$ 2,146) on the interest paid on the
loans taken to purchase EVs.
 The Government aims to develop India as a global manufacturing centre and a
Research and Development (R&D) hub.
 Under NATRiP, the Government of India is planning to set up R&D centres at a
total cost of US$ 388.5 million to enable the industry to be on par with global
standards
 The Ministry of Heavy Industries, Government of India has shortlisted 11 cities
in the country for introduction of EVs in their public transport systems under the
FAME (Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles
in India) scheme. The Government will also set up incubation centre for start-
ups working in the EVs space.
 In February 2019, the Government of India approved FAME-II scheme with a
fund requirement of Rs 10,000 crore (US$ 1.39 billion) for FY20-22.
HONDA CARS INDIA LTD. AND ITS ANALYSIS

Honda Cars India Ltd., (HCIL) is a leading manufacturer of premium cars in India. The
company was established in 1995 with a commitment to provide Honda’slatest passenger
car models and technologies, to the Indian customers. The company is a subsidiary of
Honda Motor Co. Ltd., Japan. HCIL'sfirst manufacturing unit wasset up at Greater Noida,
U.P in 1997. The green field project is spread across 150 acresand has an
annualproduction capacity of 120,000 units. HCIL's second plant in Tapukara is the first
car manufacturing plant in the state of Rajasthan. The state-of the art Power train and
Pressshop in Tapukara plant have been operational since September 2008. This facility is
spread over 450 acres and has an annual production capacity of 120,000 units. HCIL
started the production of cars from its Tapukara Plant from February 2014. This plant is
the culmination of thebest manufacturing know-how and practices gathered from
Honda'sglobal operations.

Honda has established its trustworthy journey in India for almost twenty years now. Inits
20 years’ journey, Honda 2Wheelers India has won nearly 200 prestigious recognitions for
its benchmark products, technology, manufacturing excellence, in addition to multiple
laurels like Most Trusted Two-Wheeler Brand.

Growth of Honda Company in India

Matching its pace with The Power of Dreams of billion Indians, Honda has rapidly
expanded its sales and service network. Today, Honda 2wheelers India is reaching closer
to its customers and serving them through its 6,200+ customer touchpoints across India.
Also Honda carsales has seen a tremendousgrowth during thesesyears. The release of new
exoticmodels of cars at a reasonable rate and quality lots of customers areattracted
towards this brand. This helped Honda company to establish their position in India as one
of the trustworthy automobile company giving strong competition to other automobile
companies.
Looking at these figures(1) and (2) we will understand the growth rate of Honda in India.
Honda Cars India registered annual domestic sales of 183,787 units during FY18–19,
recording 8% growth over last financial year.The company had sold 170,026 units during
FY17-18. While, the company registered monthly domestic sales of 17,202 units in March
2019, as compared to 13,574 units in the corresponding month last year, registering a
growth of 27%. HCIL exported a total volume of 4,794 units during FY 18-19 with an
export of 38 units during the month of March 2019.The carmaker expanded its sales and
distribution network across the country during the fiscal year 2018-19 to 381 facilities in
264 cities.
The company is a 100% subsidiary of Honda and has renamed itself. It was formerly known as
Honda Siel Cars India Ltd. The company's first manufacturing unit is at Greater Noida and has been
operational since 1997. It was set up at an investment of more than 4.5 million INR initially. The
plant is spread over 150 acres. The initial capacity of this plant was 30,000 car per annum, but it was
later increased to 50,000 cars on a two shift basis. Now the capacity has been further increased to
100,000 units annually. This led to an increase in the covered area in the plant. They set up their
second plant in Rajasthan. The present models that are currently being produced are: Honda City,
Accord, Civic, Jazz, Brio, CR-V, Amaze, Mobilio, BR-V and WR-V. The company has 331
dealership outlets across 121 cities in about 20 states and 3 union territories of the country. They
have sold 189,062 units during their 2014-2015 period against 1, 34,399 units during the same period
a year ago. It recorded an increase of more than 44%. The Japanese carmaker, Honda, launched their
new compact SUV on the Jazz platform called WRV in the year 2017. The company has ended their
2017 March revenue and it touched 16,870 crore, first profit of 360 crore profit after six years loss
consecutively. Inventory turnover ratio of Honda Cars has been declining from the financial year
2008 to 2012 except the year 2010. During the year 2010, the ratio was comparatively high at 8.09
times indicating that the stock of the company is selling quickly. During the financial year 2012,
Honda Cars has lowest inventory turnover ratio of 4.91 times showing that the stock does not
sell quickly and remains lying in the godown this results in increased storage cost and other
expenses. Debtors’ turnover ratio of Honda Cars is showing a decreasing trend from the financial
year 2009 to 2012 which shows the decline in the speed with which the amount is being collected
from the debtors The more quickly the debtors pay, the less is the risk from bad debts, and so
lower the expense of collection and increase in the liquidity of the company. This is due to the
inefficient credit sales policy.

Fig 2: Sales of Honda cars from 2011-16

Fig 3: Different models of Honda car sales from 2011-2016
Rajesh Goel, Senior Vice President and Director, Sales and Marketing, Honda Cars India Ltd said,
"We have closed the financial year 2018-19 with a growth of 8%. Strong sales efforts from the
dealers and company during the prevailing tough market scenario resulted in this growth rate, which
is ahead of the industry. One of our growth drivers was the All New Amaze. The launch of our
global bestsellers Civic and CR-V reinforced Honda’s premium product line-up.”
While analyzing the growth we can see that Honda has a gradual increase in sales from
2011-2015 marking the highest in 2015 but on the year 2016 sales has been reduced and
this is due to the increase in number of sales of swift and desirefrom Marutiand also due
to the latest release of i10 range from Hyundai. But on later years of 2017,18,19 sales has
been increased but not reached the level of sales number in 2015. The increase in sales in
2015 is due to the release of Honda City new model which attracted lots of customers.
Second highest in sales is Indian orgin Honda Amaze sedan which was able to grab lot of
attention in the market. The plummeted sales has resulted in increase in themanufacturing
of these cars in the corresponding year but sales has been reduced.

Impact of Covid-19 and National Lockdown in Honda Company and its

sales
The COVID-19 outbreak has impacted the automobile industry in a very drastic manner.
Thesales of productshasreduced tremendously and theirrevenueand contributiontowards
national GDP has affected. Lots of customers during pre Covid scenario was ready to buy
a new car or changing their pre-owned cars but after the national lockdown has been
declared almost all technical jobs are switched to work from home and home quarantine
was suggested for national safety. But another part is that dueto norms of socialdistancing
and ensuring safety control measures usage of public transport will be minimized and this
will work in the favour of automobile companies. This will change the mindset of lots of
people and many will opt for individual cars for their family.
Honda Cars India Ltd (HCIL) has reported a 96.72 per cent decline in domestic sales to
375 units in May amid the coronavirus-induced lockdown and operationalrestrictions. The
company had sold 11,442 units in the domestic market in May 2019, HCIL said in a
statement. Due to this unprecedented COVID-19 scenario there was difficulty in
manufacturing as well as sales but the company and its dealer network have been
responding in the best possible manner. Also since corona outbreak in China supply of
raw materials was also difficult.
During May, after roll-out of several relaxations from central and state governments, the
company focused on re-opening of its network while ensuring strict adherence to the
sanitisation, safety and distancing guidelines for COVID-19 prevention. Even though the
cases has been increasing day by day thecountry’seconomy should grow as fast as
possible because it cannot withstand a drastic loss so due to theses relaxation thedealers
havenow been able to operationalise almost 280 facilities pan-India. As a result of these
actionsthe companywas able to deliver more than 1900 units to its customers. The
domesticwholesale on the month of June was quite limited due to the negligible
inventory available at the factory before the lockdown. But gradually Honda company
can regains its pace in the market.
But when the post COVID scenario was analyzed it was found that for most of the
customers online is the stand-out preferred mode of enquiry generation, communication
with dealers or distributors and negotiations regarding payments. Almost 37 percentage of
of buyers want to purchase in hatchback segment, which promises high bounce-back for
this segment. So from this we can predict that hatchback cars of Honda like Jazz, Brio, W-
RV can expect increase in their sales volume post COVID. The test drives of cars are
preferred at customer’s home or workplace, virtual experience still not favourable . Also
delivery at dealership is a diminishing trend because customers choosing convenience
over celebration.
So as an initiative Honda has launched an online sales platform to help customers manage
their purchases without visiting a dealership. The company's 'Honda from Home' initiative
allows customers to browse through the product options, select their preferred dealership
and proceed to book their car online. The platform, which has been designed to simplify
the booking process by offering round-the-clock access from any location, will soon be
integrated with company's pan-India dealerships.

MARKETING MIX AND MARKETING STRATEGIES

Marketing strategy helps companies achieve business goals & objectives, and marketing
mix (4Ps) is the widely used framework to define the strategies. The four P’s of marketing
mix are place, promotion, product, price.
HONDA PRODUCT MIX:
The first impression about every company is its product. The survival of every company
depends on its quality as well as the quantity of its product. The marketing mix product
strategy for Honda covers all aspects of the business as follows. The looks of the Honda
cars are stunning or in other words we can say that it is an outstanding design amongits
competitors. The looks of the Honda cars are stunning or in other words we can say that it
is an outstanding design among its competitors. Automobile: Honda manufactures
passenger cars, mini-vehicles and light trucks. Honda’s Passenger car models are Accord,
Accord Hybrid, Accord Plug-in Hybrid, Accord Tourer, Amaze, Brio, Brio Amaze, Brio
Satya, City, Civic, Civic Tourer, CRIDER, CR-Z, Fit/Jazz, Fit/Jazz Hybrid, Fit Shuttle, Fit
Shuttle Hybrid, Freed, Honda Mobilio, Insight, Jade, Spirior, Stream, Acura ILX, Acura
RLX, Acura TL, Acura TSX. Light trucksmanufactured by thecompanyincludeCrosstour,
CR-V, Elysion, Odyssey, Pilot, Ridgeline, Step WGN, VEZEL, VEZEL Hybrid, Acura
MDX, Acura RDX. The company also offers mini vehicles, including Acty, Life, N-Box,
N-Box +, N-ONE, N-WGN, Vamos. I-VTECengine, Smoothest enginewidely spaced gear
ratios, Paddle shift, Ride and Handling, Independent suspension on the front, Wheel base
,ABS, Dual air bags and EBD are the standard parameters of its product.
 Fig 4 – Honda updating existing model

Honda has received several prestigious awards and recognitions from several agencies for its
innovative products. Its Honda Accord sedan has won several awards and recognitions apart
from the North American car of the year award for 2018. Motor week also recognised Honda
Accord as the best family Sedan and Kelly Book recognised it for best resale value. Honda’s
other models also received several similar awards from several agencies. Honda Civic was
recognises as the best small car by Motorweek. 2018’s Best Buy Small car award was given to
Honda Civic by The Kelly Blue Book. KBB has also recognised Honda as the best overall
brand. Honda is one of the leading and most successful automotive brands of this world whose
several models are popular globally. However, the credit of its success goes to several things
like successful marketing and technological innovation. The brand uses several channels for
marketing of its brand apart from the traditional methods. Not just print and television
advertising, the brand also advertises its products and models on digital channels and promotes
its brand using sponsorships. 21st century has brought heavy competition to the automotive
industry and brands must invest in marketing so as to remain competitive. However, not just
great marketing, it is also important to build a great brand image to remain popular and for
successful marketing in the modern world. Honda Accord has ample passenger space and
excellent finish in both the interior and exterior departments. Its all-around sporty finish ensures
that the Honda Accord is able to maintain high resale value. The mileage of Honda City ranges
from 17.8 Kmpl to 24.1 Kmpl. The claimed ARAI mileage of City Petrol Manual is 17.8 Kmpl
and for the City Diesel Manual is 24.1 Kmpl. In automatic, the claimed ARAI mileage of City
Petrol is 18.4 Kmpl.
Honda automobiles use gasoline, diesel gasoline-electric hybrid and alternate fuel such as
ethanol, natural gas and fuel cell engines. Honda cars cater to different needs and
preferences of various segments of the markets. The motorcycles use use internal
combustion engines which are developed by Honda itself. Honda also offers all-terrain
vehicles (ATVs) and multi utility vehicles (MUVs).

HONDA PRICE MIX:

Honda has cars which target every segment of the market. Honda has hatchbacks, sedans,
luxury sedans and SUVs. Hence, the pricing strategy in the marketing mix of Honda
is based on various parameters like competition, segment, features etc. These automobiles
target customers from low middle income level to high income level. Dealerships
have limited flexibility over pricing. Prices are determined by Honda and dealers enter
into contracts with them. Base prices around the world are similar and fluctuationsmay be
due to currency, taxes and other similar factors. Honda Motorcycles also have
awiderangeand cater to different segments of the market. Honda uses economies of scale
tomeet growing demand at affordable prices especially in emerging economies such as
India, Brazil and Thailand. Honda builds huge manufacturing hubs in developing
countries and exports the bikes in developed countries where cost of production is
higher. Honda also provides luxury bikes and sports bikes which are priced at the higher
end. Honda cars are costlier than the other cars in the same segment. It targets the people
who need an outstanding car in the segment in the case of design, comfort, quality and
innovation.

HONDA CARS IN INDIA PRICE RANGE MILEAGE

OF MODELS

Honda City Rs.9.29 - 9.99 Lakh 17.4 kmpl- Petrol

4th
Generation
Honda City Rs.10.89 - 14.64 Lakh 17.8 to 24.1 kmpl –
petrol/diesel

Honda Amaze Rs.6.17 - 9.99 Lakh 18.3 to 24.7 kmpl –

petrol/diesel

Honda Civic Rs.17.93 - 22.34 Lakh 16.5 to 23.9 kmpl –

petrol/diesel
Honda Jazz Rs.7.49 - 9.73 Lakh 16.6 to 17.1 kmpl -
petrol
Honda WR-V Rs.8.49 - 10.99 Lakh 16.5 to 23.7 kmpl –
petrol/diesel
 Honda CR-V Rs.28.27 Lakh 14.4 kmpl- Petrol
Honda HR-V Rs. 14.0 Lakh Upcoming 2021
Honda Brio 2021 Rs. 5.0 Lakh Upcoming 2021

HONDA PLACE MIX:

The Honda City, its first offering introduced in 1997, revolutionized the Indian passenger
car market and has ever since been recognized as an engineering marvel in the
Indian automobile industry. The company has a capacity of manufacturing 100,000 cars.
The manufacturing facility of Honda India is in Noida, U.P, and coming second plant in
Rajasthan. As of 2008 the capacity of the plant was 100000 and it hasbeen ableto increase
its capacity ever since. HSCI currently produces the All-New City, Civic and Accord
models in India and the premium SUV, CR-V is sold as a fully imported unit from Japan.
Sales and distribution - 94 facilities and in 57 cities and 51 Exclusive Dealership. HSCI
dealerships are based on the “3S Facility” (Sales, Service, Spares) format, offering
complete range of services to its customers. Having established itself as a leading brand in
the metros, the company is now focusing on increasing its presence in tier-II towns and
cities and plans to increase its dealership network to more than 100 by theend of 2008-09
fiscal year.
The company is targeting 100 dealer outlets across India by 2009, as per their
expansion strategy which is based on the ‘1 dealer per 1000 cars’ formula. It has a large
manufacturing plant in Gujarat also.
 Fig 5 and 6 : Manufacturing plant in Gujarat.

HONDA PROMOTION MIX:

Honda has cars which target every segment of the market. Honda has hatchbacks, sedans,
luxury sedans and SUVs. Hence, the pricing strategy in the marketing mix of Honda
is based on various parameters like competition, segment, features etc. These automobiles
target customers from low middle-income level to high income level. Dealerships
have limited flexibility over pricing. Prices are determined by Honda and dealers enter
into contracts with them. Base prices around the world are similar and fluctuationsmay be
due to currency, taxes and other similar factors. Honda Motorcycles also have
awiderangeand cater to different segments of the market. Honda uses economies of scale
tomeet growing demand at affordable prices especially in emerging economies such as
India, Brazil and Thailand. Honda builds huge manufacturing hubs in developing
countries and exports the bikes in developed countries where cost of production is
higher. Honda also provides luxury bikes and sports bikes which are priced at the higher
end.

Print and Television advertising:

Honda has brought several attractive product models to the market. It has also used asmart
marketing strategy with focus upon creating a reliable image and trust among the
customers. It uses both traditional and digital methods of promotion to promote its brand
and products. The ‘Power of Dreams’ slogan features across Honda’s advertising and
promotion campaigns and events. The brand has set a vision 2030 for itself which is going
to guide its business strategy in the near term. Advertising has always been a key
component of Honda’s marketing and promotional strategy. The brand has always spent
heavily on promoting its car and bike models in local markets. Whether it is the Honda
City, Civic or Honda CBR bikes, they are always promoted heavily in newspapers
and magazine advertisements. Auto magazines, auto blogs and other websites
dedicated to automobile industry also feature articles on Honda and its products
regularly. Being a leading vehicle brand, Honda finds mention in news and media
regularly. Television advertisements are also a major method of promotion for the Honda
products. The ads of its beautiful family cars are promoted through creative television
ads. For example, the Honda Fit Sport advertisement highlighting interior space of the
model.

Fig 7 and 8: newspaper advertisement of Honda cars in India

Sponsorship and partnership with key personalities:

Apart from television and print ads, digital advertisements have also become an important
part of Honda’s advertising and promotion strategy. Digital advertising has become
important for every automotive brand because avery large number of customers are found
online most of the time. Not just in terms of marketing, but production, supply chain as
well as distribution too, theseautomotivebrandsareinvesting heavily in digitaltechnology.
However, Honda’s marketing strategy is not limited to just promotionsand advertising but
the brand also promotes itself through sponsorship of key sports events and social
initiatives. It sponsors a wide range of initiatives in Ireland and across the world to
support communities and charities as well as sporting events and personalities.
Akshay Kumar is the brand ambassador of Honda motorcycles.

Corporate Social Responsibilities of Honda:

The Company is hereby devoted to direct its CSR resources, to a reasonable extent,for
improving the quality of life of the people by focusing on the social causes, including but
not limited to the following areas:

i. Eradicating hunger, poverty and malnutrition, promoting health care including

preventive health care and sanitation, including contribution to the Swacch Bharat
Kosh set-up by the Central Government for the promotion of sanitation and
making available safe drinking water.
ii. Promoting education, including special education and employment enhancing
vocation skills especially among children, women, elderly, and thedifferently
abled and livelihood enhancement projects.
iii. Promoting gender equality, empowering women, setting up homes and hostels for
women and orphans; setting up old age homes, day care centres and such other
facilities for senior citizens and measures for reducing inequalities faced by
socially and economically backward groups.
iv. Ensuring environmental sustainability, ecological balance, protection of flora and
fauna, animal welfare, agroforestry, conservation of natural resources and
maintaining quality of soil, air and water, including contribution to the Clean
Ganga Fund set-up by the Central Government for rejuvenation of river Ganga.
v. Protection of national heritage, art and culture including restoration of
buildingsand sites of historical importanceand works of art; setting up public
libraries; promotion and development of traditional arts and handicrafts.
vi. Measures for the benefit of armed forces veterans, war widows and their
dependents.
vii. Training to promote rural sports, nationally recognized sports, Paralympic sports
and Olympic sports.
viii. Contribution to the Prime Minister's National Relief Fund or any other fund set up
by the Central Government for socio-economic development and relief and welfare
of the Scheduled Castes, the Scheduled Tribes, and other backward classes,
minorities and women.
ix. Contributions or funds provided to technology incubators located within academic
institutions which are approved by the Central Government.
x. Rural Development Projects; and
xi. Slum area development
xii. Activities related to promotion of road safety as suggested wide General Circular
No. 21/2014 dated 18.06.2014 issued by Ministry of Corporate Affairs.

SOURCE OF MARKET INFORMATION AND INTELLIGENCE

A) INTERNAL SOURCES:
Internal sources are the sources where we get the information within the organization. In
the case of HONDA company by looking at the company sales record we can know the
information regarding which model sold the most. In certain cases internal sources are
indispensable without which the researcher cannot obtain desired results. Internalsources
includeaccounting information (Trading Profit & Loss A/c and Balance Sheets of
different years), salesmen’s reports, statistics in relation to advertisement expenditure,
transportation costs etc. Information from internal sources is easily available and no
financial burden is involved in gathering theinformation.

B) EXTERNAL SOURCES:
In order to study marketing problems in detail the need of external sources of marketing
research arises. External sources are of immense importance and utility in case where
research needs detailed and thorough investigation. External sources data can be divided
with two categories (a) Primary data (b) Secondary data.
I. PRIMARY DATA: This refers to the information collected by the researcher from
original sources. It is not a published data; it has to be gathered by the researcher
himself by tapping various resources. Primary data is usually collected forspecific
purposes. The main sources from where primary data can be obtained are (a)
Salesmen (b) Dealers; (c) Consumers etc. It is a very slow process of collecting
data and involves huge costs. But results obtained fromthisdataareoriginaland
tend to be more accurate and reliable.

a) Salesman: Salesmen are the most important source of providing first hand
information. They are appointed by the owners for thesaleand promotion of
its products. They have a direct link with the consumers understand tastes,
preferences and buying habits of the consumers.
 They can also know about the dealer’s reaction (especially of retailers)
towards the firm’s products by taking into consideration price, design,
packaging and size etc. of the product. The marketing manager may direct
the salesmen to prepare periodical reports containing the information
collected by them. The information collected in this manner is original and
more meaningful. This will further enhance the morale of salesmen as they
feel that they are contributing towards the formulation of marketing policies
of the organisation. But sometimes information provided by salesmen is not
accurate and upto the mark. The salesmen are not properly trained and do
not know the methodology to collect the information properly.

b) Dealers: This is another source of collecting primary data. Valuable

information can be collected with regard to demand of the product from
retailers. Information about the marketing policies of competitors can also
be gathered from the dealers. It has been observed that sometimes this
method does not prove to be fruitful as dealers do not keep proper records
and they do not want to waste their time in supplying information.

c) Consumers: This source of collecting primary data is of great importance.

Representative samples of consumers may be selected for conducting
thorough investigation with regard to price, quality and use of theproduct.
This method of collection data is very reliable as it establishes direct
link between producer and the consumer.

II. SECONDARY DATA: Secondary data is already existing which has been
collected and published by some individuals or institutions. This data is available
at a very low cost and it requires lesser time to collect it. The major sources of
Secondary data are :-

a) Periodicals and Newspapers:

Business magazines and journals published periodically contain data which is very
useful for marketing research; Newspapers such as Economic Times and Financial
Express also contain data regarding business trends and market reports. Important
trade journals are Industrial Times, Commerce, Capital, Market, Indian Finance,
Business India, Business World and others.

b) Govt. Publications and Reports:

There are innumerable publications brought by Central and State Govts, which
contain valuable data for conducting marketing research. Census reports of the
Government of India, Publications of Planning Commission; periodicalpublication
such as Indian Review, various markets bulletins.
Reserve Bank of India bulletin, publication of the Statistical Departments of various
State Govts., supply valuable information extensively used in marketing research.

c) Trade Associations:
Various trade associations like Chambers of Commerce, Export Promotion Council
etc, publish useful data which is of immense help to the res warmer.

d) Published Surveys Of Markets:

This is another useful source of supplying secondary data. Market surveys and
reports are important instruments in the hands of researcher for conducting
marketing research. These are published by business houses or
independentresearch organisations. These pertain to specific lines of products.

e) Foreign Govts, And International Agencies:

Publications of foreign Govts, with regard to trade and other important aspects of
economy of respective countries and information published by UNO, ILO, IBRD
(International Bank for Reconstruction and Development) serve useful purpose in
making comparison of Indian conditions prevailing in other countries of the world.

f) Other Sources:
Besides the above mentioned sources of marketing research, there are many other
sources of supplying secondary data e.g., colleges and universities stock exchanges
and commodity exchanges, specialised libraries’, internal sources such as sales and
purchase records, salesman, reports, sales orders, customer complaints and records
of other companies.
The secondary data collected from above mentioned sources suffer from certain
limitations. The basis undertaken by different agencies for collecting data maynot
be comparable. In other words, uniform basis may not be adopted for data
collection. The data may be based on incomplete records under secondary source;
data is collected for purposes other than marketing research.

CONSUMER PREFERENCE – FRIEDMAN RANK TEST

Preference Strongly Agree Neither Disagree Strongly Rank Rank

Agree Agree or Disagree value
Disagree
Look and 166 65 29 0.00 0.00 12.27 1
style (63.80) (25) (11.20)
Transmission 165 43 23 19 10 11.61 2
(63.50) (16.50) (8.80) (7.40) (3.80)
Fuel 135 80 37 8 0.00 11.05 5
consumption (51.90) (30.80) (14.20) (3.10)
Seating 118 74 43 15 10 9.98 11
capacity (45.40) (28.50) (16.50) (5.80) (3.80)
Riding 79 65 48 34 34 7.69 18
comfort (30.40) (25.00) (18.40) (13.10) (13.10)
Safety 75 78 47 31 29 7.86 17
Features (28.80) (30.00) (18.10) (11.90) (11.20)
Suitable to 121 101 34 4 0.00 10.83 6
Indian Roads (46.50) (38.80) (13.10) (1.60)
 Speed 114 89 41 11 5 10.13 10
(43.90) (34.20) (15.80) (4.20) (1.90)
Shock 120 95 27 14 4 10.53 9
absorber (46.20) (36.50) (10.40) (5.40) (1.50)
Tyre mileage 124 88 30 14 4 10.63 7
(47.70) (33.80) (11.50) (5.50) (1.50)
Braking 98 82 48 22 10 9.34 13
efficiency (37.70) (31.50) (18.50) (8.50) (3.80)
Low smoke 109 84 40 21 6 9.76 12
emissions (41.90) (32.30) (15.40) (8.10) (2.30)
Number of 93 79 57 23 8 8.95 16
service (35.80) (30.40) (21.90) (8.90) (3.10)
stations
Low 139 91 20 9 1 11.36 4
maintenance (53.50) (35.00) (7.70) (3.50) (.30)
cost
Cost of 101 80 39 25 15 9.20 14
spares (38.80) (30.80) (15.00) (9.60) (5.80)
Warranty 76 68 49 38 29 7.65 19
period (29.20) (26.20) (18.80) (14.60) (11.20)
High resale 98 76 43 24 19 9.02 15
value (37.70) (29.20) (16.50) (9.20) (7.40)
Availability 138 96 26 0.00 0.00 11.53 3
of spares (53.10) (36.90) (10.00)

INDUSTRY INTERFACE WITH THE MARKETING

EXECUTIVE – HONDA MOTORS INDIA LTD.
Customer’s preferencetowardsdepends on look and style, transmission, availability
of spares. Hence, manufacturers should introduce new model cars in accordance
with anticipation of customers. Further, manufacturersareadvised to introduce cars
which offers more mileage and of eco-friendly, thereby the manufacturers can
withstand in the market for the longer period of time. The demand for smallcar
segment is increasing because of the growing number of nuclear families as well
as parking problems. Hence the manufacturers should find out the needs, wants,
tastes and preferences of the consumers in order to design the products. The
respondents perceive that driving comfort and fuel economy are the most important
features of the passenger car followed by availability of spare partsand price of the
car, thus the manufacturers should design the product giving maximum weight age
to these factors. As the cost of fuel is high, the car manufacturing companies
should achieve the fuel efficiency. So the manufacturers of car should involve
such production design and system to withstand and avoid morefuelconsumption.
This will help consumers to stick on to the specific brand without more utilization
about the products.
SEGMENTATION OF HONDA

Common definition market, which means economic that’s approach customers in terms of people to
find a goods or services they want, while segmentation is processes dividing specific part into many
parts of some things. Market segmentation is mean an organization target its product, services, or
ideas only to specific groups of consumers rather than to everybody, even if it means that other
consumers who don’t belong to this target market isn’t attracted to it. Honda company has taregeted
three major part of market segmentation that is include demographic, behavioral, and psychographic
segmentation. Demographic segmentation is based on age, income, family size and socio- economic
status, etc. this segmentation identify the type and assume that consumer with similar demographic
will exhibit similar characteristics purchasing patterns, motivation, and interest.

Clustering Techniques are aimed at clustering group customers that are similar on their
segmenting dimension into homogenous segments. Honda Motor uses this technique to measure the
demographic characteristics, the important of different needs, attitude toward the products and
past buying behaviour. Most of the city in India has different insights about the product and price.
The diversity can ease us as marketing to collect their feedback and it will turn up a better
marketing strategies. A hypothetical example that can be analyzed is when consumers/customers
in Town A and Town B shared their experiences about using a Honda product Car into our
customers’ forum. The data obtained further used to measure the customers’ behaviour.

Customer Database can focus the efforts of marketing managers. The variation of the
clustering approach is based on customer relations management. Honda Motor authorized dealers
could use the database from previous customers to segmenting the information. For instance, the
dealers can send latest information to previous customers or invited the clustered high-class
group for a selective product when there is a new product that is likely to be launched. As
technology plays as an important role for gaining database, it can make more easily for us to establish
great communications with the customers by sending email, brochures either through their inbox
email or regular mail.

TARGETING OF HONDA

Target marketing has a very wide segment where Honda Motor can attain big amount of profits in a
large market. In this case, we focus on some specific target markets so that we can develop a
marketing mix to satisfy customers. Bearing in mind, it will reluctantly face direct competitors as
such when we only focus on specific target markets. Hence, as Marketing Managers we are probably
not going to decrease our price. we are not going to decrease our published price but change the
marketing strategy by giving additional package, it can be merchandise products or offering bonus
coupon for free sales service within certain time or giving extra time after sales service. Developing
marketing mix can be performed in many ways because every products might have different features.
As the previous illustrations showed that customer service levels before or after sales can be
adjusted. Honda is rather confident to break the market competition by using advertising media to
influence our target markets’ perception. The benefit from using advertising media is mass selling-
communicate with large numbers of potential customers at the same time. It frequently happens that
Honda is using a sort of mass selling to which some of organizations use company’s property for
their every day of operation, it is aimed for a publicity where we do not have to pay any penny for
such an advertising.

POSITIONING OF HONDA

In positioning the brand Honda City in the luxury car segment, the company has adopted an
integrated strategy consisting of positioning by product attribute and benefit, price-quality, product
class / category in which the brand operates, corporate identity of Honda, target audience, brand
personality, competitors and. based on emotions of customers. The company agreed that it has also
incorporated the strategy of commercial positioning. The company is of the opinion that the strategy
to position the brand has been selected mainly on the basis of own initiative of the company,
however competitors marketing strategy and need of customers have also been examined thoroughly
in deciding on the positioning strategy of the brand.

As Honda City was the first brand the' company launched in Indian market, HSCI focused functional
and emotional parameters to attract larger section of customers. Positioning of the brand focused the
product design both exterior and interior, the safety aspects, comfort and driving pleasure ofthe users,
durability, value for money and above all assurance from Honda. Among the emotional parameters,
the company stressed on the ideological parameter of concern for ecology, the psychology of
personal satisfaction, sociological aspect of life-style of consumers, friendship, group identity, the
technological leadership and corporate image of Honda.

Honda City was positioned with the brand slogan of ‘Setting the Standard’. In the brand slogan and
positioning statement of the car, the company stressed on innovation of Honda Motor Company and
the performance of the car. It states, one continues to get the best on power, fuel efficiency and
emission norms and gives the performance that people expect from Honda. The 16 valve VTEC
engine (Variable Valve Timing and Lift Electronic System) that perform like two engines in a single
body, bums fuel completely, perfectly and delivers unlimited power throughout the entire RPM
range. The engine produces 90-100 BHP power, the highest on Indian road with lowest fuel
consumption. It is an environment friendly vehicle, the emission level not only 77 per cent better
than EUR.O-I, but also 60 per cent better than EURO-II norms. It is a blend of latest aerodynamic
styling and Honda's innovative engine technology. A tapering, low sloping, sporty look bonnet, large
multi-reflector headlights and taillights that wrap around the sides, its beautifully contoured bumpers
attract all eyes and new plush interior that spell comfort all the way. The innovation and customer
satisfaction set the standard of the car. It is an example of technological challenges to conventional
wisdom. The industry positioned Honda City in the luxury car segment following a large number of
strategies comprising of product attribute and benefit, price-quality, product class / category, target
audience and commercial positioning. It also associated the emotions of Honda Corporation, brand
personality and customer satisfaction. The brand slogan and 4-61 positioning statement of the car
tried to emphasis the parameters of product design and styling, safely of the passengers, comfort and
driving pleasure, durability, value for money and the assurance of the company to meet the future
requirements of the customers. Among the emotional aspects, the company focused on ideological
parameter of ecological concern, psyche of personal satisfaction, life-style, group identity, leadership
and corporate image of Honda Corporation. The message communicated to the customers had
positive impact on customers attitude and this led to buying behaviour.

SWOT ANALYSIS OF HONDA MOTORS

Strengths:

 Honda is the sixth largest automobile manufacturer in

the world selling cars in over a 100 countries.
 Excellent branding, advertising and after sales
servicing
 Honda has over 180,000 employees globally
 Production System that is refined over the years
along with High and powerful research and
development R&D
 High brand equity and brand loyalty amongst
customers
 Honda has a strong presence in motorsports like F1
 Eco-friendly Honda Prius enhanced the brand image
 The brand has excellent marketing and advertising campaigns across the world.

Weakness:

 Intense competition in the automobile segment means limited market share growth.

 Honda had to recall a few of their models for corrective measures which caused a lot of hue
and cry.

Opportunities:

 Developing hybrid Honda cars and fuel efficient cars for the future.

 Tapping emerging markets across the world and building a global brand.

 Fast growing automobile market can be used by Honda to increase their business.

Threats:

 Government policies for the automobile sector across the world can hurt international
business of Honda cars.

 Ever increasing fuel prices.

 Honda's business can be affected by intense competition from global automobile brands.

 Substitute modes of public transport like buses, metro trains etc…

 Fig 9. Comparison of Honda Cars Ltd with its competitors.

FUTURE SCOPE OF HONDA IN INDIA

The future of the automotive industry on a global scale is going towards zero tailpipe emissions due
to the rising concern for the environment. Which is why carmakers are looking at fully electric
vehicles and Honda Motor Company has also announced that they will be investing heavily in the
green technology for cars of the future. Not only that, the company also stated the fully electric cars
would also be completely autonomous allowing the driver to, according to the Japanese carmaker,
sleep in the car. While the idea may seem to be far-fetched, the fact of the matter remains that not
just India, but the world is moving towards a sustainable solution for mobility. The dependency of
non-renewable sources such as petrol and diesel will eventually diminish. According to the
recent statement made by Honda Motor Company to Reuters, the company will introduce level 4
autonomous driving in their cars by 2025 and market a vehicle that can drive by itself on
highways by 2020.

Autonomous cars will not just improve the productivity of a person as he or she can focus more
on productive things rather than driving, but also reduce fatigue of a person behind the wheel.
However, the plethora of sensors, cameras and the presence of artificial intelligence capable
enough to make this technology mainstream will take a considerable amount of time,
particularly for a market like India.