Hero Honda Essay Sample
- Word count: 2888
- Category: innovation
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Hero Honda Essay Sample
Honda is headquartered in Minato, Tokyo, Japan. The company has assembly plants around the globe. These plants are located in China, the United States, Pakistan, Canada, England, Japan, Belgium, Brazil, New Zealand, Indonesia, India, Thailand, Turkey and Perú. The company’s car models include the Accord, CR-V, Civic, Element, and Ridgeline, as well as gasoline-electric hybrid versions of the Civic and Accord. Honda’s line of motorcycles includes everything from scooters to superbikes. Honda is a company that meets and often exceeds the expectations of car buyers. Honda is one of the most interesting carmakers out there today with a strong devotion to their independence. Even without the deep pockets of other major players like GM and Ford, Honda continues to be innovative and they keep the pressure on major players in the automotive industry.
Honda Motor Company is a Japanese multinational corporation primarily known as a manufacturer of automobiles and motorcycles. Honda has been the world’s largest motorcycle manufacturer since 1959, as well as the world’s largest manufacturer of internal combustion engines measured by volume, producing more than 14 million internal combustion engines each year. Honda is the sixth largest automobile manufacturer in the world. Honda was the first Japanese automobile manufacturer to release a dedicated luxury brand, Acura, in 1986. Aside from their core automobile and motorcycle businesses, Honda also manufactures garden equipment, marine engines, personal watercraft and power generators, amongst others. Since 1986, Honda has been involved with artificial intelligence/robotics research and released their ASIMO robot in 2000.
In order to identify oppurtunities and threats, a company must begin with a thorough understanding of the marketing environment in which the firm operates in. The environment of a company constitutes all the internal as well as external forces that have an existing impact on the business. Thought these factors vary depending on the specific company, they can de divided into 2 broad categories. Micro environment components which include the complany, suppliers, intermediaries, customer market, competitors and public. The macro environmental factors are : demographic, economics, natural, technological, political and cultural forces. The micro environment consists of factors within the company that have an influence on the running and operactions of the company. Micro environment influences the organization directly. The factors or an element in an organization’s immediate area of operations that affects its performance and decision-making freedom is called as Micro Environment. These factors include competitors, customers, suppliers, employees and the general public. The above mentioned factors are explained below.
Honda has been successful in the market carving itself a well defined place in the motor market and not as well satisfying its customers but attracting more as the years go by. The company continuously keeps itself upbreast in the market developing and innovating its products as the marketing environment so changes. It has managed to develop and mantain a strong customer loyalty base network. Upgradations of features, new creative designs have been reasons to its successfull and replinishing growth. A key element in Honda’s success is its commitment to designing, engineering and building cars in all regions of the world.
Q1. Elaborately explain micro and macro environment with appropriate examples.
Honda micro environment:
Micro environment influences the organization directly. The factors or an element in an organization’s immediate area of operations that affects its performance and decision-making freedom is called as Micro Environment. These factors include competitors, customers, suppliers, employees and the general public. The above mentioned factors are explained below. Customers:
Organisations survive on the basis of meeting the needs, wants and providing benefits for their customers. Failure to do so will result in a failed business strategy. Customers are obviously the key to sales. Managers must monitor customer needs and try to anticipate how these will develop so that they can meet these requirements effectively now and in the future. Many firms are also trying to develop relationships with customers to help ensure they come back time and time again. Honda aims at deletoping a good customer relationship. In order to achieve this, it better tries to understand the needs and wants of its customers and aims to satisfy them to its highest possibilty. Customer feedback helps in increasing their product development as they get to find out the difference between what their cutomers expect and what the have to offer. To be a market leader and satisfy it’s customers, the company has a few major objectives. They include improving the quality and effectiveness for the customers to be happy with their product. Also to minimize costs and increase productivity. Suppliers:
Increase in raw material prices will have a knock on effect on the marketing mix strategy of an organisation. Prices may be forced up as a result. Closer supplier relationships are one way of ensuring competitive and quality products for an organisation. Firms must decide on issues such as who to use to supply them, on the responsibility it takes for these suppliers and on the terms and conditions it adopts. Toyota takes the long veiw with is suppliers. It understands its suppliers cost structures in detail and agrees to price at such a cost that even the suppliers make a profit. It tracks suppliers issues and expects suppliers to learn from mistakes as easily as it does. Toyota takes all the efforts to establish a good relationship with its suppliers so that the business could be carried on profitably with no loopholes or consequences. Competitors
The success and behaviour of any business will depend on the degree of competition in its market. The name of the game in marketing is differentiation. What benefit can the organisation offer which is better than their competitors? Competitor analysis and monitoring is crucial if an organisation is to maintain its position within the market. The five forces that shape the degree of market competition operating within an organization’s micro environment are
a)Rivalry among existing organization.
b) Relative power of customers.
c) Relative power of suppliers.
d) Threat of new entrants.
e) Threat of new substitutes
Honda faces competition with other automobile industries in the market. Some include Toyota, Suzuki, Audi, Chevrolet etc.
Employing the correct staff and keeping these staff motivated is an essential part of the strategic planning process of an organisation. Training and development plays an essential role particular in service sector marketing in-order to gain a competitive edge. Employees represent the organisation and hence they must be well aware of everything happening in the organisation and must be able to contribute well to the achievement of goals in the organisation. The employees of honda need to be well informed about the various cars in their company. They need to be adequately equipped with knowledge so as to answer any questions that the potential buyers may have about the product. They need to deliver the exact information. Failiure of which may affect the sales.
A public is any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives. A company should prepare a marketing plan for all of their major publics as well as their customer markets. Honda has a good image in front of its public. A good image will always help to improve the goodwill and long term reputation of the company hence retaining its existing buyers as well as attracting new ones to the company.
Honda macro environment
The major, external and uncontrollable factors that influences an organization’s decision making and affect its performance and strategies is called as a Macro environment. These factors include the demographics, legal and political conditions, economic conditions, socio cultural factors, technological factors, natural environment etc. The above mentioned factors are explained below. Economic :
As we know demand is defined as Desire for a product backed by willingness and ability to pay. Thus it is not only the people but also their ability to buy a product is vital for a marketer. Ability to pay can be measured in terms of Income distribution, economic condition of the nation, credit availability. Honda’s economic element involves wealth production, distribution andconsumption. Honda capitalist economy is functioning and handles allits market growth and consumption. It also maintain and supervision of its market shares and production with reference of consumption. Technological :
It is technology that changes every fortnight. Obsolesce has become faster than it is spelt. Thus a marketer must be aware of recent technological updates. Being technologically upgraded and using the latest technology provides competitive advantage over the competitors. Honda is very advance in its technology as was the first to introduce automatic shifting gear system. Honda is excelling due to its high technology in market. Hero Honda committed at all levels to achieve high quality in anything they do, mainly in their products and services which will meet and exceed customer’s growing aspiration through- * Innovation in products processes and services.
* Continuous improvement in our total quality management systems. * Teamwork and responsibility
Legal political :
It consists of Government Regulations, policies, social groups etc. Any kind of business must be abided by the legal policies of the nation. The Law is for the purpose of protecting customers from exploitation by the business man, to protect interest of society and also to protect companies from unfair competition. There are various kinds of laws in India like Consumer Protection Act, Environment protection Act Indian Contract Act, Competition Law etc. Apart from this every citizen is required to be abided by the Indian Constitution. Honda is required to follow and practice the laws so imposed in the country. It produces and manufacrues its products in accordance with there laws. Honda has to follow all legal and government system. Example, the company was imposed by government of Pakistan to purchase auto parts from local vendors to some extent. Government implies tax legislation system on Honda as well. Demographic:
Demographic, as the name signifies is related to population and population mix. It is people who make market. It is they who contribute to demand and also it is manpower which helps in produce and supply. Thus as a marketer, on must understand the demographics on the nation and also due to globalisation, global population also influences the decisions. Hero Honda auto mobile change various management strategies use different strategies related age, gender, categories in society (income of society). The company has to keep in mind the different frameworks of each subdivided group while manufacturing its products. It serves to satisfy the needs and wants from all the different groups adequately. Environmental :
Every business has a reponsibilty of contributing to the soceity or environment it is a part of. It uses the various resources of the environment, thus it needs to give back to it as well by providing good products to the people, conserving and protecting various resources and by not polluting it. Hero Honda environmental awareness of our employees and dealers , while promoting their involvement in ensuring noise environmental management. Institutionalise resource conservation,in particular, in the areas of oil, water, electrical energy, paints and chemicals. fulfil with allapplicable environmental legislation and also controlling their environmental discharges. Cultural:
Culture is set of beliefs and customs pertinent in a society. For Instance McDonalds had to stop its products containing Beef as cow is regarded as goddess in India Honda respects the culture and customs of every nation and community and contributes to the economic and social development through corporate activities in the communities. Honda believes in honouring the language and culture of every nation and undertake open and fair corporate activities to be a good corporate citizen of the world.
Q2. Elaborate on the product marketing strategies with suitable examples. Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. Marketing strategy is a method of focusing an organization’s energies and resources on acourse of action which can lead to increased sales and dominance of a targeted marketniche. A marketing strategy combines product development, promotion, distribution, pricing, relationship management and other elements; identifies the firm’s marketinggoals, and explains how they will be achieved, ideally within a stated timeframe. A marketing strategy can serve as the foundation of a marketing plan. A strategy consists of a well thought out series of tactics to make a marketing plan moreeffective.
Marketing strategies serve as the fundamental underpinning by marketing plansdesigned to fill market needs and reach marketing objectives. Plans and objectives aregenerally tested for measurable results. A marketing strategy often integrates an organization’s marketing goals, policies, andaction sequences (tactics) into a cohesive whole. Many companies cascade a strategy throughout an organization, by creating strategy tactics that then become strategy goals for the next level or group. Each group is expected to take that strategy goal and develop a set of tactics to achieve that goal. This is why it is important to make each strategy goal measurable. Marketing strategy involves careful scanning of the internal and external environments which are summarized in a SWOT analysis Internal environmental factors include the marketing mix. plus performance analysis and strategic constraints.
External environmental factors include customer analysis, competitor analysis, target market, analysis, as well as evaluation of any elements of the technological, economic, cultural or political/legal environment likely to impact success. A key component of marketing strategy is often to keep marketing in line with a company’s overarching mission statement. Honda was following a strategy of developing region by region. Over a period of four to five years they moved from the west coast of America to the east coast. The report suggests thatthere was a smooth entry into the U.S market which led to a success.
Honda proved to do well even during recession by following a very successful strategy of brand building and new launches at the right time. Honda maintained its image by providing good models like Passion and Splendor. These 2 models remained main contributors of Honda in the past years.
Q3. Explain the diffusions of innovation and adoption on innovations. Diffusion of Innovations is a theory that seeks to explain how, why, and at what rate new ideas and technology spread through cultures. The theory that every market has groups of customers who differ in their readiness and willingness to adopt a new product is called the diffusion of innovation theory. And, that an innovative product spreads or diffuses through a market not in one straight course but in successive, overlapping waves. Most populations show the following pattern in the adoption of new consumer goods: innovators (2 percent of population), early adopters (14 percent), early majority (34 percent), late majority (34 percent), and laggards (16 percent). See also adoption process. This extension of the product life cycle was developed by Everett M. Rogers in 1962 and simply looks who adopts products at the different stages of the life cycle.
An innovation, simply put, is “an idea perceived as new by the individual.” An innovation is an idea, practice, or object that is perceived as new by an individual or other unit of adoption. The characteristics of an innovation, as perceived by the members of a social system, determine its rate of adoption. The four main elements in the diffusion of new ideas are:
* The innovation
* Communication channels
* The social system
1. The innovation
The innovation, to spread and be adopted should show the characteristics which determine an innovation’s rate of adoption are: * Relative advantage
* Observability to those people within the social system. 2. Communication
Communication is the process by which participants create and share information with one another in order to reach a mutual understanding. A communication channel is the means by which messages get from one individual to another. Most individuals evaluate an innovation, not on the basis of scientific research by experts, but through the subjective evaluations of near-peers who have adopted the innovation.
Time dimension is involved in diffusion in three ways:
First, time is involved in the innovation-decision process. The innovationdecision process is the mental process through which an individual (or other decisionmaking unit) passes from first knowledge of an innovation to forming an attitude toward the innovation, to a decision to adopt or reject, to implementation of the new idea, and to confirmation of this decision. The second way in which time is involved in diffusion is in the innovativeness ofan individual or other unit of adoption. Innovativeness is the degree to which an individual or other unit of adoption is relatively earlier in adopting new ideas than other members of a social system The third way in which time is involved in diffusion is in rate of adoption. The rate of adoption is the relative speed with which an innovation is adopted by members of a social system.
4. Social system
The fourth main element in the diffusion of new ideas is the social system. A social system is defined as a set of interrelated units that are engaged in joint problem-solving to accomplish a common goal. The members or units of a social system may be individuals, informal groups, organizations, and/or subsystems. The social system constitutes a boundary within which an innovation diffuses. How the system’s social structure affects diffusion has been studied.
http://a.parsons.edu/~limam240/thesis/documents/Diffusion_of_Innovations.pdf http://www.scribd.com/doc/51726190/Micro-and-macro-environment-of-hero-Honda http://www.managementparadise.com/forums/marketing-management/1369-marketing-strategies-honda.html