TT180908 Jimmy Koshy Marketing

MARKETING PLAN FOR NEW
COMPACT FUEL EFFICIENT CAR
BY HONDA MOTORS TO BE
MARKETED IN INDIA
Honda - Challenging the Limits.
EXECUTIVE SUMMARY
Globalization is the buzz word and has manifested itself by touching the lives
of all living across the globe. Of the innumerable advantages of globalization
one of prime importance is the increase in the purchasing power of the people.
The increased income has given purchasing power in the hands of the people
especially the citizens of the developing nations and hence the increase in
their standard of living. Standard of living is essentially associated with a
willingness to spend on the goods which are generally not considered
necessities. Our product that is “a car” is one of the desired purchases by
anyone who wants to move up the ladder and satisfy his emotive need.
It is also pertinent to mention at this point that in the current economic
scenario of rising fuel prices and mounting concern towards environment
degradation, no car manufacturer can undermine its importance. To develop
products which suit the customers need and as a part of Corporate Social
2
Responsibility it is the need of the hour to design and sell cars which are fuel
efficient.
From light trucks to minivans to sports cars, Honda continues to transform
original ideas into unique vehicles. Carrying the tradition further, this marketing
plan is designed to discuss the marketing of new fuel efficient car in of the
fastest growing passenger car market in the world i.e. India.
The following sections would take through the marketing plan for this car in
India, giving options to the customers under the Honda umbrella. The car
promises to be a “Value for money” proposition to the customers.
Honda’s fuel efficient car will be hatchback and will be sold in various color
variants to suit the tastes of customers across India. The car will be a compact
car and hence help in line filling since the company doesn’t have any car in
the mid sized segment of the product mix. The car would be exclusively made
& exported from India.
As elaborated in the report Indian consumers are value oriented and prefer
products which are environment friendly .The market segmentation would be
behavioral segmentation and the target market would be the value conscious
customers, primarily the middle class consumers and the car rental
companies.
3
The car would be 1200 cc, light in weight & compliant with the emission norms
set by then regulatory agencies. The company already has a strong
distribution network and would be using the same for the selling this car. The
reliance would be on television advertising and for promotion the company
would participate in auto exhibitions & give sponsorship. The company also
plans to use the automobile television shows to opine expert views. The
company plans to encourage test drives arranged by dealers and sub dealers
for word of mouth publicity.
4
SITUATION ANALYSIS FOR HONDA
MOTORS LIMITED
5
The Company
The history of the Honda Motor Company began with the vision of one man -
Soichiro Honda. His dream was personal mobility for everyone.
Soichiro Honda founded the Honda Motor Company in 1948.
SoichiroHonda
Founder, Honda Motor Co.
In the same year, he designed and engineered the first product of this
company - a 50 cc motorized bike on a bicycle frame - in his small shed at
Hamamatsu. Today, as the company celebrates its 50th Anniversary, Honda
is a global company with a global viewpoint and a five-region global strategy
that is reflected in a solid commitment to local markets and economies.
Honda's Global Vision
Soichiro's vision was international in character. His desire was to lead the
world in technology, and make a significant contribution to the creation of a
better society. As a result, most of the products that Honda developed started
out by making a difference. Whether it was the CVCC engine in the sixties or
the solar powered car of the nineties, they all sought to challenge and
overcome conventional wisdom.
6
Financial Highlights
Financial Data
Honda Motor Co., Ltd., and Subsidiaries, Year ended or at March 31
7
Operating Data
Years ended 31st March
Source:http://www.hondacarindia.com
Honda in India:
Honda had entered in India as Honda Seil Cars India Ltd., (HSCI) which was
set up in December 1995 as a joint venture between Honda Motor Co. Ltd.,
Japan and Seil Limited to manufacture passenger cars in India with a
commitment to providing Honda’s latest passenger car models and
8
technologies to the Indian customers. The company has brought about three
models in India - Honda City, Honda Accord, and Honda CR-V. Its first model
was launched in 1997. Honda Seil Cars India Ltd. is ISO 9002 & ISO 14001
certified.
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 success of City as well as all its
other models has led HSCI to become the leading premium car manufacturer
in India.
The total investment made by the company in India till date is Rs. 1620 crores,
further investment of Rs. 1000 crore is planned and being currently invested
for the coming second plant in Rajasthan. The company has a capacity of
manufacturing 100,000 cars.
HSCI’s state-of-the-art manufacturing unit was set up in 1997 at Greater
Noida, U.P with an investment of Rs. 450 crore. The green-field project is
spread across 150 acres of land (over 6,00,000 sq. m.).
9
Honda Seil Plant at Greater Noida , U.P.
The initial installed capacity of the plant was 30,000 cars per annum, which
was thereafter increased to 50,000 cars on a two-shift basis. The capacity has
further been enhanced to 1, 00,000 units annually in February 2008. Several
modifications were done by the company with the objective of offering higher
quality products to its customers, faster and quicker. The expansion process
also included expansion of the covered area in the plant, from 1,07,000 sq. m.
to 1,31,794 sq. m.
The company operates under the stringent standards of ISO 9001 for quality
management and ISO 14001 for environment management.
Market Share of Honda Seil Cars Limited:
The passenger car segment is dominated by one of the oldest players of
liberalized Indian car market viz. Maruti followed by the South Korean
manufacturer Hyundai Motors. Needless to say, that both the companies enjoy
10
first mover advantage and the associated benefits like economies of scale,
brand equity to name a few.
The following figures show a division of the market share as on 2007-08 (April
March) of the major car manufacturers in the Indian passenger car market:
Car Manufacturer Market Share (in %)

Maruti 47.3
Hyundai 25.5
Tata Motors 12.7
Honda Seil 4.2
GM 3.2
Ford 2.4
Mahindra Renault 1.8
Others 2.9
Source: Automotive Component Manufacturers Association of India
The above can illustrated by the following pie diagram:
11
market share(passenger cars) 2007-08
Maruti
26%
Hyundai
TataMotors
13%
HondaSeil
GM
4% Ford
47% 3%
2%
3% 2% MahindraRenault
Others
Marketing Objectives:
The marketing plan has been designed with the following market objectives:
First year Objectives: We are aiming for 6% market share of the Indian
market.
Second year Objectives: We are aiming for 10% market share of the
Indian market.
An important objective will be to establish a well-regarded brand name linked
to a meaningful positioning. The company will invest heavily in marketing to
create a memorable and distinctive brand image projecting innovation,
quality and value.
12
SWOT ANALYSIS
13
Strengths:
The Brand Image
Honda enjoys a reputed brand image everywhere in the global market. The
company is also rated high in the customer satisfaction index and has also
been the winner for customer satisfaction in India.
Technology
Honda has always believed in innovation. A late entrant in the car market, but
the company is known to deliver auto lineup for a world of diverse needs and
lifestyles, bringing the joy of driving and outdoor enjoyment to millions of
satisfied customers.
Environment friendly vehicles
The company has been manufacturing cars which run on alternate fuels like
diesel, natural gas, ethanol and also hybrid cars. The recent launch is also an
effort in this direction.
Strong R&D
Honda's outstanding R&D has introduced a long line of unique technological
achievements to the planet. These include the low-emission CVCC engine,
first to comply with the 1970 U.S. Clean Air Act; the VTEC power plant, which
uses variable valve control for high fuel efficiency and high performance; an
anti-lock braking system (ABS), which helps maintain vehicle stability in
emergency braking and many more.
14
Indigenization
The company believes in using the local raw material and having OEMs for
the cars. The indigenization helps the company to reduce the risk of exchange
rate fluctuations and also in maintaining a lean production facility. The Honda
City in India is manufactured with 79% indigenization level.
Weaknesses
Late entrant
The company has entered late in the Indian car market and lost on the first
movers advantage. The position of the company has however built up due to
excellent customer service and positive feedback of the customers.
No car in the mid segment
The Indian car market is largely dominated by the demand of mid segment
cars. The company’s product line does not have a car in this segment. This
means loss of potential consumers.
The new car in question would be a step in this direction & enable the
company to fill in this vacuum.
Commodity price risk
The car manufacturers are exposed to commodity price risks to higher costs
due to changes in prices of inputs such as steel, aluminum, plastics and
rubber, which go into the production of automobiles. In order to mitigate these
15
risks, the company continues to attempts to enter into long term contracts
based on its projections of prices.
Opportunity
Favorable government policy
The Indian government in the recent budget has given tax sops to the
manufacturers of small and mid sized cars as these are fuel efficient. This will
reduce the cost of production and the same benefit can be passed on to the
buyers in terms of lower price of car.
Economic growth
The Indian economy has been growing at an average of 8-8.5% per year for
the last few years. The growth percolates into the rising income of the people
and hence an increase in the demand for cars.
Young population
The majority of Indian population is in the young age group which would then
translate to be the future customers of the company.
Threats
Recessionary trend in the world economy
India is not insulated from the recent slowdown in the world economy. The
deceleration of growth will reduce the momentum of growth. It may also lead
to some effect on the aggregate demand.
Rising interest rates
16
Consumer loans are a preferred mode of financing and an increase in the rate
of interest may dampen the demand for loans and hence the demand for cars.
Rising fuel prices
An increase in the prices of fuel may reduce the demand for cars but since the
product being introduced is a fuel efficient the rising fuel price may not affect
the demand for this car.
Threat from competitors
The car industry has established players like Maruti, Hyundai and Tata Motors
who are operating in the mid sized segment and enjoy equally good brand
image with larger market share. The launch of Rs. 1 Lakh small car by Tata
Motors is also a threat to the company.
17
INDIAN CAR MARKET
 Facts of the market
 Profile of Indian Consumer
18
The automotive industry is one of the largest industries worldwide and in India
as well. The automotive sector drives upstream industries like steel, iron,
aluminum, rubber, plastics, glass and electronics, and downstream industries
like advertising & marketing, transport and insurance.
The automotive industry can be divided into five sectors:
• Passenger Cars
• Multi-Utility Vehicles (MUVs)
• Two-Wheelers
• Three-Wheelers
• Commercial Vehicles-Light Commercial Vehicles (LCVs) / Medium &
Heavy Commercial Vehicles (M &HCVs) Tractors 1
The Indian automotive industry has the potential to emerge as one of the
largest in the world. The country already ranks number two globally in the two-
wheeler segment, and is next only to China. It ranks 11 th in car production and
13th in commercial vehicle production globally. With growing industrial
production and increasing spending power of the Indian middle class
households, the country is expected to make it to the top five markets in cars
and commercial vehicles by 2020. Of the total sales, roughly 10 per cent is
contributed by exports to various countries.
1
http://www.gailonline.com/gailnewsite/mediacenter/reportsautoindustry.html
19
Source: SIAM
The cumulative growth of the Passenger Vehicles segment during April -
March 2007 was 20.70 percent. Passenger Cars grew by 22.01 percent, Utility
Vehicles by 13.21 percent and Multi Purpose Vehicles by 25.20 percent in FY
2006-07.
The following data gives the sales of automobiles in the last six financial
years. As indicated by the given data the sales of passenger vehicle i.e. the
cars has grown manifold. The growth in the passenger vehicle segment is the
maximum when compared with the growth of other categories of vehicles.
20
domestic sales of cars
2,000,000
no. of units
1,500,000
1,000,000
500,000
0
2002- 2003- 2004- 2005- 2006- 2007-
03 04 05 06 07 08
year
Data Source: SIAM.
A graphical representation of the total sale trend of passenger cars (including
domestic sale and exports) is given below:
trend of total passenger car sales
1,800,000
1,600,000
no. of units
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
3
8
-0
-0
-0
-0
-0
-0
2
7
0
0
0
0
0
2
years
Data Source: SIAM
The cumulative growth of the Passenger Vehicles segment during April
Data Source: SIAM.
21
Future Outlook of Indian Car Market:
The projected annual growth rate for demand of cars is expected to be above
9%. A survey conducted by NCAER shows that:
Source: http://www.fadaweb.com
The various factors contributing to the increase in demand of cars are:
• Rising income of the middle class in India.
• Booming market economy
• Favorable government policy
• Low penetration rate of cars
• Large population
• Impressive road development
• Growth in urbanization
22
PROFILE OF INDIAN CONSUMER
India is a vast country with a population of more than One Billion spread on a
land area of 3.29 million sq.km. Besides diversities in economic activities,
literacy level the striking diversity of Indian population and its behavior as a
consumer is due to religion, culture, social and demographic reasons.
Another important consideration is the age profile of the Indian population.
About 34% of the population is below the age of 15 years & roughly 40%
population is below the 24 years of age.93% of the population is below 60
years compared to 83% in USA.
Population Mix ( in 2000)

0-15 years 15-59 years 60+ years
India 34 59 7
USA 21 62 16
China 25 65 10
Source: UN,CLSA & International data of the US Census Bureau
Therefore companies in all areas of business find the Indian market highly
potential for years.
Another striking feature on the Indian market is the burgeoning middle class. It
is roughly estimated that Indian middle class population is 250-280 million.
The Indian middle class is educated & have sufficient disposable income to
purchase branded consumer goods and expensive products and services.
23
According to a National Sample Survey Organization study, Indians today
believe in living life in style. The demand for cars and motor bikes has also
seen substantial increases over 11 years. About 4.6% of urban households
owned motor cars in 2004- ’05 as compared to 1.2% in 1993- ’94 while the
figure for rural households went up from 0.2% to 0.8%.
24
CONSUMER BUYING BEHAVIOUR
25
For any marketing person, understanding consumer buying behavior is an
essential criterion for marketing efforts and programs. Honda is launching a
mid sized fuel efficient car in India so it is imperative to understand how do
consumers take the purchase decision of a car and who are the participants in
this buying decision.
As elaborated above, Indian car market is in its growth stage and the income
of the Indian consumer, particularly the middle class, is rising. A closer look at
the Indian consumers shows the following characteristics:
Value Orientation2: Indian customers are highly judicious, educated and well
informed. They are price sensitive and put a lot of emphasis on value for
money. The Indian consumers are noted for the high degree of value
orientation. Such orientation to value has labeled Indians as one of the most
discerning consumers in the world.
Family Influence2: Indian consumers have a high degree of family orientation.
This orientation in fact, extends to the extended family and friends as well.
Brands with identities that support family values tend to be popular and
accepted easily in the Indian market. Indian consumers are also associated
with values of nurturing, care and affection. These values are far more
dominant that values of ambition and achievement. Product which
communicate feelings and emotions gel with the Indian consumers.
26
Economic circumstances2: The middle class segment is the reflection of the

true Indian culture. They are traditional in their outlook, cautious in their
approach towards purchases; spend more time with family than in partying
and focus more on savings than spending. Slow in decision making, they seek
a lot of information before making any purchase. They look for durability and
functionality but at the same time are also image conscious.
Beliefs & Attitude2: Indian consumer buying behavior is influenced by

freebies. Freebies are consumer products given free of charge as gifts to
purchases of selected products above a certain value.
Environmental awareness2: The environmental awareness in India has

started affecting marketing of products based upon their eco-friendliness. In
general, Indian consumers are likely to buy environmentally responsible
products and packs.
Reliance on finance: Almost 85% of the cars purchased by Indians are

financed by loans from the banks & NBFCs.
Decision making process:

Purchase of a car in India is still considered a major decision because unlike
US, family members generally don’t have separate cars & is infrequently
purchased. The decision to purchase a car is high involvement, expensive and
is a self expressive product hence, is the buying process exhibits a
dissonance reducing buying behavior.
The purchase decision is hugely influenced by others in the family and the
reference group. An Indian consumer would go in the detailed study of the
product and consult his reference group before making a decision to purchase
any brand of car.
2
Product Market Study: Consumer Behavior In India , Matrade Chennai, October 2005.
27
Essentially he would look for the following features in the car to take a
purchase decision:
 Price of the car in consideration and other competitors brands

 Operating cost i.e. fuel efficiency & cost of spares
 Brand image of the company
 Performance of the other brand of the similar company
 After sales service provided by the dealer network.
28
SEGMENTATION, TARGETING &
POSITIONING
29
Market Segmentation
The Indian passenger car industry has undergone a drastic change in terms of
customer perception as well as technology. From an extreme perception of
cars being an ultimate luxury, today it is probably acquired the status of
necessity to the common man.
The Indian car market is in its growing stage and has been classified mostly
on price and the product features. There has hardly been any kind of
segmentation on psychographic or behavioral parameters as seen in
developed car markets.3
The Indian car market can be segmented broadly in the following heads:
• Budget Car Segment: Over 60 % of the market, preferred price range
below Rs. 3 lakhs. Entry level car Maruti 800 and Alto and soon to be
launched Nano.
• Compact Car Segment: Around 15 % of the market. Preferred price
range: between Rs. 3 lakhs and Rs. 6 lakhs. Like Swift, Santro, Wagon
R, Indica, Hyundai Getz.
• Family Car Segment: Around 10 % of the market. Preferred price
range: between Rs. 6 lakhs and Rs. 8 lakhs like Maruti Esteem, Honda
City, CRV, Toyota Innova, Hyundai Accent .

3
Mukherjee A, “The Indian Automobile Industry: Speeding Into the Future?” Indian Institute of
Management , Calcutta.
30
• Premium Car Segment: Real world-class car and people who are ready
to pay for it. Preferred price range: flexible but around Rs. 10 lakhs is
acceptable price like Hyundai Sonata, Mitsubishi Lancer, Audi 1800.
• Super Luxury Saloon: A tiny segment like Mercedes Benz E 229, E-
250, Rover Montego, Audi 6, BMW.
The market segmentation for the car would be a behavioral segmentation with
basis on behavioral variables like benefits of the product, usage rate and
attitude. The stress would be on the value seeking segment of the market with
more usage of cars for work or pleasure.
The Indian consumer is family oriented and puts a lot of stress on the fuel
efficiency of the cars. The product would be catering to the segment of the
market which is value oriented, makes a purchase decision based not only on
the price of the car but the operating cost of the vehicle. The car has a seating
capacity of 5, hence would be preferred by the family oriented middle class
segment of the Indian market.
Target Market
The car under consideration would fall in the compact car segment and the
targeted buyers would be households who prefer cars with less operating cost.
The economy class segment consists of almost 80% of the passenger car
market in India.
31
The competing factors for the car would be the fuel efficiency and the price of
the car along with the manufacturing expertise of Honda. The company would
also promote the ease of availability & economical cost of the spare parts of
the car.
The company intends to target the value conscious middle class segment that
looks for value for money with comfortable ride. The company would also
targets the working women who spend their precious time in commuting by
public transport.
For its corporate sales the company is targeting car rental services who rent
their cars to the middle level employees of organizations for business travel
and the tourists within the city and for short distances. The company would
follow a combined target market approach to gain a good market position in
the chosen market.
Positioning
The brand would be positioned as an environmental friendly vehicle with low
operating cost. The stress would be on the mileage of the car and also on the
size which will allow easy maneuverability on the crowded Indian roads. The
company intends to position the car with the catch phrase:
“More for less- unmatched quality with unmatched price.”
32
Honda would also cash on its corporate image of superior after sale service to
further strengthen its position in the mind of the consumers.
33
PRODUCT PLANNNG &
DEVELOPMENT
34
The product in consideration is a fuel efficient car falling in the compact
segment of the Indian car market. The car should deliver its promise of being
a fuel efficient vehicle. The product hence has been developed with
aerodynamics which gives unmatched mileage of the car.
Car would be light weight, which would also increase the fuel efficiency.
However the company would also consider the safety of passengers & would
not sacrificed in this process.
Engine downsizing to around 1.2 liters will be done so that lesser CO2
emissions are made from the car. This would also help to take the tax sops
offered by the Government of India to manufacturers of cars with less horse
power.
The car would be assembled at the Greater Noida plant of the company which
will help to utilize the installed capacity of the plant. The engine would be CKD
imported from Honda Japan. The company also proposes to have solar
chargeable head & tail lights of the car.
The car will also have a 3 year warranty with free vehicle service provided for
first year. The company also proposes to introduce a CNG model in near
future.
35
Product features:
Technical Specifications
Make Honda Fuel efficiency 25 kmpl
Model Fuel efficient model Fuel Type Petrol(CNG version
later)
All aluminum Fuel capacity 35 liters
Body Type
Hatchback
Number of Doors 4 Capacity 1200 cc
Seating Capacity 05 Air conditioners Power saving AC.
Safety Seat Belts ,Anti Lights Solar chargeable
Braking system lights
Child safety Lock,
Day Night inside
rear view mirror( in
all models)
Fog Lamps, Air
Bags, Collapsible
Steering(in higher
versions)
Speed Maximum speed of Colors Red, White &
110 kmph Silver.(Metallic
Colors available in
higher versions)
Euro-IV, Bharat Overall length 3500 mm
Emission Norms
Stage-III compliant
36
PRODUCT MIX
The product mix can be explained as the total range of products that the
company has on offer to the customers in different markets. The product mix
37
of a company can be described to have width and depth. The width of the
product mix refers to how many product lines are present in the company
activity. The depth of the product mix refers to the number of products offered
by the company within each product line.
Product Mix of Honda Globally
Product Width
Prod
uct
Cars Motorcycles Power products Technology
Dept CRV Super cub Generators ASIMO
h
Civic CZ-i 110 Land mowers Aircraft engines
Civic Hybrid Click-I Electric Four wheeler scooters Honda Jet
Accord Dio Z4 Water Pumps Multiview camera
Outboard engines
Product mix of Honda Seil in India:
Product width is only consisting of cars in the Joint Venture of Honda with Seil.
The Motor cycle and the power business are separate companies with
different partners.
Product depth: Total range of products offered in the product line is:
MODELS OF HONDA MOTORS CARS

MODEL TYPE
38
Accord Premium
• Accord VTi – L M/T
• Accord VTi – L A/T
• Accord V6
City Zx Premium
• City ZX EXI
• City ZX GXI (CVT)
• City ZX VTEC
Honda Civic Premium
• Civic 1.8V MT
• Civic 1.8V AT
• Civic 1.8S MT
• Civic 1.8S AT
Honda CRV SUV
• Honda City CRV - Manual
• Honda City CRV - Automatic
Source:http://www.hondacarindia.com
The new fuel efficient car would fall in the Car business of the company. The
introduction of fuel efficient car in the compact segment would help the
39
company in product line filling as there is no car offered by Honda in this
segment of the Indian car market.
40
DISTRIBUTION CHANNELS
The organizations produce goods with the objective of selling them.
Distribution channels can be defined as external source utilities for effective
distribution of goods and services using transport facilities, warehouse,
41
manpower and creation of middlemen and facilitators to carry such activities in
close coordination with the manufacturer.
The company intends to use its existing distribution network for sale of the
cars. The distribution network of Honda in India consists of four channel
members:
STOCKIST
DEALERS
SUB DEALERS
BOOKING AGENTS
• The Stockist represents 3 to 4 districts in a State.
• The Dealer represents a district or main City.
• The Sub-Dealer represents a particular area or group of small cities.
• The booking agents are individuals working on freelance basis
The company intends to have stockist to reduce the delivery time to the
customers. Since the car would be manufactured at the Greater Noida pant
42
and the customers would be based all across the country the delivery time
would be faster
The tasks and responsibilities of Channel members are:
 Transport: The stockist would be responsible for transporting
goods and services to the markets
 Storage: The stockists, dealers and sub dealers would be
maintaining the inventory of goods in safe place.
 Promotion: The activity of advertising for informing & creating
general awareness & influencing purchases by customers would
be primarily of dealers, sub dealers and booking agents.
 Relationship: The competitive environment relies heavily on
relationship marketing. The relationship with customers is of
utmost importance and the dealers, sub dealers and booking
agents would also be responsible for customer retention and
development.
Choice of dealers:
The appointment of dealers shall be based on many parameters such as:
• Experience
• Financial Position
• Space( area for proposed showroom)
43
• Past performance
• Location of proposed dealership
• Plans for future
• Working hands.
Honda Seil Cars India has a strong sales and distribution network spread
across the country. The network includes 87 facilities in 53 cities. HSCI
dealerships are based on the “3S Facility” (Sales, Service, Spares)
format, offering complete range of services to its customers.4
The company gives some commission to the channel partners along the
distribution channel. It also gives incentives to them if they sell more products.
This way, the distribution and marketing of the product takes care of itself to
some extent.
4
www.hondacarindia.com
44
ADVERTISEMENT, SALES &

PROMOTION
45
It is said “Advertising is telling & selling.” The company would adopt an
integrated marketing communication strategy. This would allow potential
consumers to develop a relationship at their own pace. All marketing
communications would feature the unique advantage of low operational and
maintenance cost. The punch line of the product would be “More for less-
unmatched quality with unmatched price.”
The media planning would be the following:
• Television: It is shown by research that nearly 70% of the TV
advertisements are of consumer goods. To build awareness of the car
& reaching the target market, exploiting the dynamic nature of TV 60%
of the budget would be spend on TV advertising. For the campaign 60,
40 & 10 second spots will be used.
• Press: 25% of the budget would be dedicated to press. It would help in
substantiating the campaign theme by dramatizing the benefits of
specific innovative features using double pace spreads.
• Outdoor advertising: 10% of the budget would be on outdoor
advertising. It is one of the highly visible mass medium and would be
used for name & image identification and also create broad awareness
of the product. The hoardings would be set up in the major arteries of
the cities, petrol pumps and on the highways.
• Direct mail: To provide dealer’s customers & prospects in advance
information of the car and provide them a chance to test drive the new
46
fuel efficient car, 5% of the budget is planned for this method of
advertising.
The sales promotion would be more by way of publicity. The Indian consumer
seeks extensive information before making a purchase decision for a car. The
company would hence exploit this area and create awareness & interest
through popular auto shows telecasted on TV and through write ups in popular
motoring periodicals such as BS Motoring, Automobiles Today.
The company would also gift the car as the prize for the winners of many
realty shows on Indian television like Indian Idol (Indian version of American
Idol). This would ensure the company to introduce the car in the Indian market
and also would be a kind of public test for the performance.
Brochures & booklets highlighting the product features would be printed and
stocked with the dealers, retail battery outlets and kiosks at malls would also
be erected to explain the customers about the features and handle additional
information sought.
47
CONCLUSION
48
The preceding sections of the report highlight the fact that cars have become
a vital part of a city dweller in India. The demand for cars is growing at an
excellent rate and as compared to the developed nations the penetration rate
of passenger cars in India is very low.
The studies have also found that the Indian consumer looks for those products
which fulfill his control needs. Apart from good resale value and easy
maintenance; they seek durable engine and extra seating capacity which
being offered by the car. These functional benefits are built in the car. The car
is also environment friendly with low CO2 emissions and solar chargeable
lights.
Honda has an advantage as people are already aware of the brand pedigree
and associate it with technology/engineering. The target market seeks
credibility in advertising, and fuel-efficiency is relatively more important to
them. Hence the product would satisfy the needs of the target customers. The
product would help the company to increase its market share as a compact
fuel efficient car.
BIBLIOGRAPHY
49
Auto industry in India, (online) available on http://www.gailonline.com viewed

on 22nd September, 2008.
Automotive Mission Plan 2006-16, Ministry of Heavy Industry & Public

Enterprises, Government of India.
Bose B, Marketing Management (Text & Cases), (2007), HPH, New Delhi
Car statistics, (online) available on http://www.siamindia.com/scripts/press-

august-2001.aspx viewed on 21st September, 2008
Data of passenger car industry, (online) available on http://www.siam.com

viewed on 20th September, 2008.
Honda motors (online) available on, http://www.hondacarindia.com viewed on

19thSeptember, 2008.
Indian Passenger Car vehicle industry, (online) available on

http://www.tatamotors.com viewed on 20th September, 2008.
Kotler. P, Marketing Management, (2006), 12th ed., Prentice Hall Inc. , U.S.A.
Mukherjee A, “The Indian Automobile Industry: Speeding Into the Future?”

2005, Indian Institute of Management , Calcutta.
Matrade, Product Market Study: Consumer Behavior In India, October 2005,

Chennai.
Dr. Misra M, Customer Segment Research and Its Role in Designing Sales
Promotion Programme for Small Car Industry in India Volume XXXVII •
Number 10 • October 2007, Indian Journal of Marketing.
Passenger car industry in India, (online) available on http://www.fadaweb.com/

viewed on 22nd September, 2008.
Perreault.W, McCarthy.E, Basic Marketing: A Global –Managerial Approach.

15th Ed. TMH.
Peter.J & Olson J., Consumer Behavior & Marketing Strategy,(2005) 7th Ed.
Mc.Graw Hill.
Renganathan. R, Consumer Markets and Buyer Behavior of Cars, Volume

XXXV • Number 4 April 2005, Indian Journal of Marketing.
Status of Indian Auto industry, available online,

www.acmainfo.com/docmgr/Status_of_Auto_Industry/Status_Indian_Auto_I
ndustry.pdf viewed on 20th September, 2008.
50
51

TT180908 Jimmy Koshy Marketing

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

TT180908 Jimmy Koshy Marketing

Uploaded by

Copyright:

Available Formats

MARKETING PLAN FOR NEW

COMPACT FUEL EFFICIENT CAR

of all living across the globe. Of the innumerable advantages of globalization

their standard of living. Standard of living is essentially associated with a

willingness to spend on the goods which are generally not considered

necessities. Our product that is “a car” is one of the desired purchases by

It is also pertinent to mention at this point that in the current economic

scenario of rising fuel prices and mounting concern towards environment

degradation, no car manufacturer can undermine its importance. To develop

From light trucks to minivans to sports cars, Honda continues to transform

fastest growing passenger car market in the world i.e. India.

promises to be a “Value for money” proposition to the customers.

& exported from India.

products which are environment friendly .The market segmentation would be

set by then regulatory agencies. The company already has a strong

reliance would be on television advertising and for promotion the company

for word of mouth publicity.

SITUATION ANALYSIS FOR HONDA

Soichiro Honda. His dream was personal mobility for everyone.

Soichiro Honda founded the Honda Motor Company in 1948.

Founder, Honda Motor Co.

company - a 50 cc motorized bike on a bicycle frame - in his small shed at

Hamamatsu. Today, as the company celebrates its 50th Anniversary, Honda

is a global company with a global viewpoint and a five-region global strategy

that is reflected in a solid commitment to local markets and economies.

Honda's Global Vision

world in technology, and make a significant contribution to the creation of a

overcome conventional wisdom.

Honda Motor Co., Ltd., and Subsidiaries, Year ended or at March 31

Years ended 31st March

Japan and Seil Limited to manufacture passenger cars in India with a

commitment to providing Honda’s latest passenger car models and

manufacturing 100,000 cars.

HSCI’s state-of-the-art manufacturing unit was set up in 1997 at Greater

spread across 150 acres of land (over 6,00,000 sq. m.).

Honda Seil Plant at Greater Noida , U.P.

further been enhanced to 1, 00,000 units annually in February 2008. Several

management and ISO 14001 for environment management.

Market Share of Honda Seil Cars Limited:

The passenger car segment is dominated by one of the oldest players of

brand equity to name a few.

Car Manufacturer Market Share (in %)

Source: Automotive Component Manufacturers Association of India

The above can illustrated by the following pie diagram:

market share(passenger cars) 2007-08

An important objective will be to establish a well-regarded brand name linked

to a meaningful positioning. The company will invest heavily in marketing to

create a memorable and distinctive brand image projecting innovation,

quality and value.

The Brand Image

been the winner for customer satisfaction in India.

lifestyles, bringing the joy of driving and outdoor enjoyment to millions of

Environment friendly vehicles

effort in this direction.

Honda's outstanding R&D has introduced a long line of unique technological

achievements to the planet. These include the low-emission CVCC engine,

anti-lock braking system (ABS), which helps maintain vehicle stability in

emergency braking and many more.

City in India is manufactured with 79% indigenization level.

excellent customer service and positive feedback of the customers.

No car in the mid segment

means loss of potential consumers.

company to fill in this vacuum.