Honda case midterm study

Course title : Marketing Management

Date : 8th August 2020

Student Name Intake

Ahmed Abdelmoez Mohamed GD-IM24

Ahmed Salah Mohamed GD-IM24
Assem Elsayed Mohamed GD-IM24
Mohamed Alaaeldin Mohamed GD-IM24
Mohamed Galal Mohamed GD-IM24
Q1:What would be the effect on ICII’s image and legacy if we import Chinese
products with no maintenance, no after-sale service nor warranty?

A1:
 First, ICII biggest import operation is Honda with 24% total sales, so the image of ICII
represented by delivering products with high quality and durability, so if we import Chinese
products with no maintenance and no warranty, we will risk losing class A customers during
reaching class B&C, and it will affect the company’s reputation and image initially or at
the beginning.
 But if we can be able to clarify to the A customers that it will be a separate product lines
and we continue to give them the high quality services, we can re stabilize our image again.
 For example: MG Motor is a british automotive company, it turns now to be the largest
importer of Chinese made cars versions in UK and begin to enter to the Egypt market, I
think there is no bad effect on the reputation of the MG brand after being some versions
manufactured in china

Q2: If we import Chinese products, what would be our competitive advantage that
would lead us to significantly increase our market share and strongly compete with
the already existing Chinese brands?

A2:
The competitive advantage will be
 the creation of a diversified portfolio of the products.
 we can go and enlarge our target market and increase our segments and move from
concentrated (niche) marketing to differentiated (segmented) marketing and compete
with the chines products in their pool and gain and save our declining MS.
 we will be the only company that has the brand image with the Chinese products offering
(new branding)

Q3:If we become OEM for Honda, at what price could we offer our products while
providing the same Honda quality?

A3:
 As the market is growing and the some customers (B&C) perceive value as low price
penetration strategy is the best to use in the situation, setting low price will lead to reach a
wide fraction of the market .
 the price will be lower than the imported goods by 18% (10% sales taxes, 5% customs fees,
3% clearance expenses), then labor and manufacturing cost will decrease to another 20%,
so the expected to be total price decreasing by 40%
 Q4:What are the pros and cons of each strategy?

A4:
For the importation of the Chinese products
Swot analysis:

Strengths:
Cheaper.
 Easy to promote (because dealers profit
more from Chinese products).
 Increasing the diversity (increasing the
product line width and depth.
Weaknesses:
 Low quality products.
 We can't provide warranty or maintenance.
 Customers already complain about the
quality and some of them promise to try to
buy our high quality products.

Opportunities: Threats:
 No need to maximize the dealers profits  Jeopardize our company's brand image and
by squeezing our profit to let the high reputation.
quality product on the shelf.  Risking of losing class A customers.
 Increasing and saving the declining MS
and compete with the Chinese products
competitors in their pool.
 Converting our target market from
concentrated (niche) market to
differentiated (segmented) market.
 Serve the class B&C customers that
couldn't afford our products before.

For the OEM products

Swot analysis:

Strengths:
 The same high quality with a lower
price(reduction in the production costs).
 Flexibility in the distribution (distribution
channels are more streamlined).
Weaknesses:
 The quality of the Egyptian manufacturing
isn't the same as the original country.

Opportunities:
 We have already big service centers (coupling
& assemply) that considered a good base for a
production plant.
Threats:
 May cause a cannibalization of the Honda
products and decrease it's sales.
 The newly manufactured products replaced
the old ones.
Q5: As the market is in the growth stage, which strategy should the company
adopt?
A5:
Regarding BCG-Matrix for anayzing current situation , Honda products falls in the Question Mark
quadrant where the market has a high growth rate and Honda has a low market share. Usually
question marks are risky as it needs a lot of expenditure and results are not guaranteed.

At the same time and regarding Ansoff matrix , Product development seems to be the best solution
for ICII ,introducing the Chinese products ( a new product) to the existing market would be the best
strategy.

Q6:On the long run, when the market reached maturity, what should ICII do?
A6:
ICII should consider the option of being OEM for Honda , giving them the opportunity to serve the
med-tier that no company has paid attention to. Being OEM for Honda would allow ICII to satisfy
those customers that need a good quality , after sales services in addition to reasonable price.