Bài báo cáo: Marketing Plan Analysis – Honda Vietnam

Running head: MARKETING PLAN ANALYSIS – HONDA VIETNAM

Marketing Plan Analysis – Honda Vietnam
Group3:
Lưu Vũ Quỳnh Như, Lê Thị Phương Ngân, Phan Huỳnh Diễm Thảo, Vũ Kiều Trâm,
Phạm Xuân Phú, Yuuki Yazawa, Kanta Imanari
Principle of Marketing
December 9, 2015
Instructor: Dr. Nguyen Thi Mai Trang

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MARKETING PLAN ANALYSIS – HONDA VIETNAM

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TABLE OF CONTENTS
Executive Summary...........................................................................................................3
Introduction.......................................................................................................................4
The product – SHi 125/150...............................................................................................6
Microenvironment.............................................................................................................9
Company........................................................................................................................9
Suppliers......................................................................................................................15
Competitors..................................................................................................................16
Publics..........................................................................................................................19
Customers....................................................................................................................22
Macroenvironment..........................................................................................................24
Demographic factor.....................................................................................................24
Economic factor...........................................................................................................27
Natural factor...............................................................................................................32

Technological factor.....................................................................................................33
Political factor..............................................................................................................34
Cultural factor..............................................................................................................35
SWOT Analysis...............................................................................................................36
Recommendations...........................................................................................................41
Market development for high-income segment...........................................................42
Market development for foreigners.............................................................................44
The extension of customer services.............................................................................50
The problem of recall for SHi 125/150...........................................................................52
References.......................................................................................................................55


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Executive Summary
Honda is the most dominant company in the Vietnamese motorcycle market. Since it
entered to this market, its products have been loved by Vietnamese people, and most
Vietnamese have an experience to use a Honda’s motorcycle in their life. However,
Honda currently faces the huge problem: market saturation. As a result, there is a
necessity to find a new way to overcome this problem. Through this report, we firstly
analyze current market situation from macro and micro views. Then, we provide SWOT
analysis for Honda in Vietnam. We found several problems Honda currently possesses,
and also found several opportunities that would contribute to its further growth. Based
on our analysis, we suggest three recommendations for the marketing activities of SHi
125/150; market development for high-income segment; market development for
foreigners; and the extension of customer services. Finally, we briefly mention in the
problem Honda faces: the recall of SHi 125/150 and provide considerable solutions for
it. We hope our research and recommendation would be helpful to promote the sales of

SHi 125/150 in next year.


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Introduction
Company description
Honda is one of the greatest global company and famous for motorcycles and
cars. It has expanded its business operations through the world, and provides consumers
advanced-technological products at reasonable prices. Honda currently expands its
businesses to aircraft and robot industry, and seeks to improve itself continually for a
long time.
Honda history. Honda was established by Soichiro Honda in 1946, and started
manufacturing of motorcycles in Japan. Honda firstly expanded its business in the
United States in 1959, and has gradually expanded its business through the world. In
1963, Honda started the sales of cars, and from that time, has significantly expanded its
business from motorcycles, cars, to power equipment, aircrafts, and robots. Honda is
currently recognized globally, and becomes one of the greatest global company.
Honda in Vietnam. Honda entered to Vietnamese market in 1996. The first
plant in Vietnam was established in 1997 (B. Thi, & X. Thi, 2009), and Honda started
manufacturing at this time. However, before Honda entered to the Vietnamese
motorcycle market, Honda exported some motorcycles from other countries to Vietnam,
and therefore, Honda’s products were hugely recognized by Vietnamese consumers.


MARKETING PLAN ANALYSIS – HONDA VIETNAM

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Honda succeeded in taking a first mover advantage in Vietnam (B. Thi, & X. Thi, 2009),
so it has s strong power in this market. Initially, Honda focused on middle-income
segment to promote its motorcycles because people under this segment did not afford
Honda‘s products. Honda faced to the strong competition of ultra-low price models
manufactured by Chinese makers and lost huge market share at the beginning of 2000s
(Fujita, 2008), but Honda regained its market share by introducing the low-price brand.
“Wave Alpha” (Nguyen, 2006). This was significant change taken by Honda, and it
initiated to focus on low-income segment as well. Currently, Honda is a giant, sharing
around 70% of the Vietnamese motorcycle market, and Honda’s products are loved by
Vietnamese people.
Mission. The mission of Honda (2015) is “Maintaining a global viewpoint, we
are dedicated to supplying products of the highest quality, yet at a reasonable price for
worldwide customer satisfaction.”
About the report. This report mainly consists of four parts. First three parts:
Analysis of macro environment, microenvironment, and SWOT analysis, are analysis of
current market situation. Then, the recommendations for the marketing of SHi 125/150
model will be described based on the analysis of current market. Secondary resources
from Honda’s Website and some other sources such as academic journals and Websites


MARKETING PLAN ANALYSIS – HONDA VIETNAM

of public institutions are main sources of our research. We also conducted the
questionnaire on the Internet, and it also helps our research and supports our
recommendations.
Product Analyzing: SHi 125/150
Design
Very high-class design: based on the strong side of the SH brand in EU, SHi
125cc/150cc brings out the western design to Vietnamese consumer.

The Head: the head of the motorbike is crafted to its finest. The highlight part
is the headline, being covered chrome to show even more the high-quality of the
product.
16-inch stylist wheels: with light-weight but stable design. The wheel ensures
smooth and curve driving for the user.
The Body: Is design to bring out the sexy curve at every corner.
The Back: Fully equip with strong glass with highlighted pattern. Maximum
lighting to ensure the best quality.
The parameter: functional smart count clock, smart and scientific design.
The Engine. SHi runs on an innovative piece of technology, the eSP (enhance
Smart Power), which is a latest design for scooter. The engine has very small, but not
less powerful, smooth and quite travelling, very eco-friendly, by consume less gas.

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The gas-spraying mechanism is fully automated and control by the main
board, enhance the ability of the entire motorbike, minimize fuel consumption. Thus,
this contributes to less gas emissions from the motorcycle.
Idling Stop: System temporarily disconnect the motor, is a breakthrough new
technology in the motorcycle with the ability to save fuel efficient and environmentally
friendly. The system has the ability to automatically disconnect the motor, switch to
standby mode to save energy when the car stopped more than 3 seconds and restarts
smoothly when the driver throttle back and do not need to press the start button.
Technology Integration of Title ACG Vehicles capable of smooth start thanks
to integrated systems and generator startup, the maximum friction reduction, fuel

savings based on intelligent electronic mechanism. After turning off the engine, the relaunch is also very easy.
Less Friction Technology Designed to minimize the maximum friction, helps
the engine operate more smoothly.
Gas Evaporative Control System Fuel tank is equipped with system EVAPO
help minimize the evaporation of gasoline, which saves fuel efficient and
environmentally friendly.
Maximize Comfortability & Safety
SHi 125/150 promises to deliver the best driving experience there is.


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Main Container. U-box compartment is wider, can accommodate both the first
helmet 1 or 2 caps, thanks to the streamlined between the parts on the car that is
guaranteed to be the body slim.
Fuel Container. The gas tank designed with maximum volume and arranged in
the most reasonable way. Combined with the ability to excel in fuel economy, the new
SH lets users move farther in the distance.
On/Off switch Outriggers. Switches Side Stand shutdown instantly when
lowering the outriggers down. Only works when the engine side has gotten onto
outriggers. This helps users to not forget the legs brushing against parties before starting
the car.
Hydraulic-brake system. SHi 125/150 is equipped with a braking system
combines advanced hydraulics. In particular, the following disc brakes not only increase
a sense of stability and safety, but also provide strong braking force, continuous and
very balanced when braking.
Microenvironment
Company

Marketing mix (4Ps). In order to identify the strengths and weaknesses of
Honda itself, firstly, marketing mix which includes 4Ps: product, price, promotion,
place, should be analyzed.


MARKETING PLAN ANALYSIS – HONDA VIETNAM

Product: Honda has a variety of brands to cover the variety of its market
segment. Each product will be introduced in order.
 SH mode 125cc (7 colors)
Price

Standard:

49,990,000 VND

Fashion:

50,490,000 VND

Personalized:

50,490,000 NVD

 SH 125i / 150i (5 colors)
Price

125cc:

66,990,000 VND

150cc:

80,990,000 VND

 MSX 125cc (4 colors)
Price

59,990,000 VND

 PCX 125cc (6 colors)
Price

Advanced:

54,490,000 VND

Standard:

51,990,000 VND

 Air Blade 125cc (11 colors)
Price

Standard:

37,990,000 VND

Premium:

39.990.000 VND

Magnetic Paint: 40,990,000 VND
 LEAD 125cc (7 colors)
Price

Advanced:

38,490,000 VND

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MARKETING PLAN ANALYSIS – HONDA VIETNAM

Standard:

37,490,000 VND

 VISION 110cc (6 colors)
Price

29,990,000 VND

 Future 125cc (6 colors)
Price

Electronic fuel injection: 30,990,000 VND
Electronic fuel injection: 29,990,000 VND
Carburetor:

25,500,000 VND

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MARKETING PLAN ANALYSIS – HONDA VIETNAM

 Wave RSX 110cc (8 colors)
Price

Electronic fuel injection: 23,990,000 VND
Carburetors:

21,990,000 VND

 BLADE 110cc (9 colors)
Price

18,100,000 VND
19,100,000 VND
20,600,000 VND

 Super Dream 110cc (3 colors)
Price

Brown:

18,700,000 VND

Black & Gold:

18,990,000 VND

 Wave Alpha (5 colors)
Price

16,990,000 VND

According to this product range, it is revealed that Honda thinks the usage of its
products as a mean of transportation rather than as an enjoyment. Also, there are more
color variation in lower price models than in higher price models. In addition, lower
price models design for younger people in terms of product style.
Price: According to the above information about products, the price of its
products range from 16,990,000 to 80,990,000 VND. Accordingly, Honda focuses on
various market segment from lower income to relatively higher income. Honda has

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mainly focused on the middle-income segment, but because of the emergence of ultralow price models produced by Chinese makers in the market, it expands its market
segment to lower-income segment as well by introducing Wave Alpha. Nevertheless the
purchase of motorbikes is big deals for Vietnamese consumers because their average
income is around 40 million VND, Honda successes to capture various market segment
due to its strong brand power.
Promotion: Honda has been famous because of its excellent customer services

both before and after purchase. This creates great customer value and strong brand
image though the Vietnamese market. In terms of advertisings, even though Honda has
variety of channels to advertise its products such as YouTube channel, and own Website,
its advertisings are general and not differentiated with its competitors. Therefore, there
are necessities to create the ads focusing on specific feature of products or having huge
impact on consumers’ mind. Honda engages in various CSR activities such as
supporting education, environmental conservation, and doing charity activities. In
addition, Honda strongly encourages safety driving in Vietnam. Because of heavy traffic
situation, Honda thinks that Vietnamese people should know how to drive more safely
and efficiently. Honda launched “safety driving project”, and it provides safety
education in its own training center and local community. Due to these its activities,


MARKETING PLAN ANALYSIS – HONDA VIETNAM

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Honda succeed in building strongly positive reputation among Vietnamese people.
Place: Honda has its own dealers or dealers under its name in all provinces in
Vietnam. This enables customers to easily access to a dealer near their location.
Accordingly, consumers can easily go to a dealer when they have a problem with their
motorcycles, and excellent services in each dealer strength customer’s loyalty to Honda.
This strong combination, easy access and excellent customer services, contributes to
creating great customer equity and is the source of its strong brand image.
Marketing strategy. In order to identify the marketing strategies, two
questions must be referred: “Which customers will be served?” and “How will a
company serve?” Honda’s marketing strategies will be analyzed as following the
textbook.
Segmentation: At first, basically Vietnamese people, except some rich people,
think about a motorcycle as a mean of transportation rather than the thing showing their

status. In addition, Vietnamese people most care about price when they buy a
motorcycle (Q & Me, 2014). Accordingly, Honda chooses income segmentation as a
basic strategy of market segmentation.
Targeting: The prices of its products range from 80,990,000 VND to
16,990,000 VND, and therefore, its market segment varies from high to low income


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segment. Accordingly, Honda uses differentiated marketing, and each brand focuses on
each market segment in order to cover various market segment.
Differentiation and positioning: Honda differentiate its products based on two
ways of differentiations. At first, Honda differentiates itself by using its brand image.
Vietnamese people have recognized Honda’s products are high quality and durable for a
long time, and therefore, this is the most influential differentiation in Vietnamese
market. In addition, Honda has a lot of dealers in Vietnam, and this contributes to its
service differentiation. Customers easily access to a dealer near their location, and get a
services both before and after they purchase its products.
In terms of positioning, Honda’s position in the market varies the brand to
brand. Wave provides consumers only basic functions that required to drive at relatively
lower price, so this is the same for less strategy. On the other hand, SH provides high
quality at higher price, so it is more for more strategy. In addition, some other brands
provide relatively good functions and quality at normal price, so these would be more
for the same strategy.

Suppliers
When Honda entered to the Vietnamese market, it relied its components on
Japanese and Thailand manufactures in order to sustain its high quality products.

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However, at the beginning of 2000s, many Chinese makers entered to the Vietnamese
market with ultra-low price motorcycles, and therefore, Honda was required to launch
low-price model brand to compete with these Chinese competitors. Accordingly, Honda
initiated to depend on local manufactures to produce non-core components to reduce the
production cost of its motorbike (Nguyen, 2006). This hugely contributed to reducing
the costs, and Honda succeeded in introducing Wave Alpha to the market. Although
Wave Alpha has become popular product in Vietnam, Honda faced a new problem
related to suppliers. The Vietnamese government set the requirement of local content
ratio, and as a result, Honda must have expanded its local suppliers (B. Thi, & X. Thi,
2009). In order to deal with this requirement, Honda has invested in and worked closely
with local manufactures to improve their quality management and productivity for a
long term, and currently its local content ratio is more than 90%. The components of
some brands, such as SH mode and Air Blade, are produced more than 95% in Vietnam
(“Motorbike manufactures”, 2013). Accordingly, it is revealed that Honda now has good
relationships with its local suppliers, and this is one of the strengths for it to sustain its
higher market share in the Vietnamese market.
Competitors
In Vietnam, 95% of market share is accounted by 5 companies; Honda,


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YAMAHA, Suzuki, SYM, Piaggio. Honda has about 60% of market share. Although it
is decreasing slowly nowadays. Characteristics of Honda’s products are unbreakable,
high quality and performance, and easy to use. Thus, its main competitors would be
YAMAHA and Suzuki because both company have similar product quality with Honda.
Piaggio and SYM are just small competitors because their market share is small, and
their product concept is different from Honda’s one.
YAMAHA. Yamaha’s motorcycle has high performance and quality as same as
Honda. It cooperates with Toyota in terms of engine technology, and the ability of
production and technique are excellent. YAMAHA has 20% of market share in the
Vietnamese motorcycle industry; therefore, it is the 2nd largest market share. The
variety of YAMAHA’s motorcycles is as same as Honda since it has 11 brands of
products. However, YAMAHA’s price range is lower than Honda. Even though Honda
currently provides low-price brand such as Wave, its price range relatively higher than
YAMAHA’s products. On the other hand, YAMAHA makes effort to reduce average
price of products. In addition, YAMAHA’s motorcycles are focused on sporty driving.
Its design is beautiful and sophisticated.
According to YAMAHA annual report (2012), YAMAHA’s marketing strategy
in Vietnam is trying to enhance brand power and expand market share. Products are


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based on low-fuel consumption engine. It will also increase the variety of products in
terms of development and designing for attracting more Vietnamese consumers.
Recently, the rise in oil price makes YAMAHA focus on low-fuel consumption engine
in order to respond to customers’ needs. Also it is for expanding the market share.
Suzuki. Suzuki’s motorcycle also has good quality and performance closed to
Honda and YAMAHA. However it completely devotes its effort to reduce cost of

production, and also sells products at low price. In addition, its product design is unique.
Suzuki has 6% of market share; the marketing strategy of Suzuki is compete with other
companies with its low price to expand its own market share. For achieving low price
motorcycles, Suzuki decreases the number of brands; it now provides only 8 brands and
concentrate to produce only narrow range of products. Moreover, Suzuki usually use
colored materials in order to reduce the production cost while other companies usually
use non-colored materials and color these materials by themselves.
Product Comparison. As it was mentioned above, SHi 125/150 provides high
technology, great quality, and eco-friendliness to consumers. Comparing with
YAMAHA NM-X, SHi 125/150 still has advantages in terms of these functions. This
comparison clearly indicates that Honda SHi 125/150 is better than YAMAHA NM-X
except the design because it depends on personal favor.


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The reason why we choose YAMAHA NM-X as a comparing product is that
price is close to Honda SHi since the price of NM-X is 80,000,000 VND while SHi is
80,990,000 VND. Also, these products target the same market segment; both of these
focus on upper-income class. Actually the design of these motorcycles are different in
terms of for female or male. However, in this comparison, it would not be considerable
problem.
Firstly, we focus on fuel capacity. Large fuel capacity means consumers can
drive longer distance. A motorcycle is necessary goods to live in Vietnam. Thus, fuel
capacity is an important criterion to use conveniently and comfortably. NM-X’s fuel
capacity is 6.6L while SHi’s fuel capacity is 7.5L. It shows SHi is better than NM-X in
terms of fuel capacity. Secondly, we make a comparison in terms of fuel consumption.
That connects to two results: reducing cost and protecting environment. In other words,

good fuel consumption helps to reduce cost for oil, and reducing oil consumption
contributes to protecting the environment.
Public
Financial publics.

Individual or Organization

Number of shares
held
(thousands)

Percentage
of
total
shares
outstanding (%)


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Japan Trustee Services Bank, Ltd.
(Trust Account)

104,755

5.8

Moxley & Co

83,945

4.7

The Master Trust Bank of Japan, Ltd.
(Trust Account)

70,922

3.9

State Street Bank and Trust Company
505223

52,503

2.9

Meiji Yasuda Life Insurance Company

51,199

2.8

State Street Bank and Trust Company

43,820

2.4

Tokyo Marine &
Insurance Co., Ltd.

42,553

2.4

The Bank of Tokyo-Mitsubishi UFJ,
Ltd.

36,686

2.0

Nippon Life Insurance Company

27,066

1.5

Mitsui Sumitomo Insurance Co., Ltd.

25,739

1.4

Nichido

Fire

Media publics. Honda has many different media channel in hand, such as:





www.youtube.com/user/HondaVideo
hondanews.com/channels/
corporate.honda.com/press
world.honda.com › World News › News Releases


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There are also many other showroom, news-coverage, newspaper ad which are devoted
for Honda.
Public Relations (PR). Strategize, plan & execute PR activities for assigned
project (minimum 3) from pre-launch, launch to sustenance phase: Press Materials
Preparation, Monitor media coverage for each projects executed., Evaluation (PDCA)
on projects executed, Budget monitoring for each project, Support Internal
Communications, Support ad-hoc events/projects, Pitch & arrange media test drive,
Handle all media enquiries, Monitor & analyze media exposure trend for Honda &
competitors.
Local public. Honda supports a broad range of community-based
environmental education, preservation and restoration efforts. That means we’re
providing grants, products, and in some cases, the support of hundreds of Honda
volunteers. Whether it’s cleaning beaches, restoring wetlands, greening urban areas, or

engaging students in field-science research, we believe in caring for the environments in
which we work and live. As the leading company in producing motorcycle in Vietnam,
Honda Vietnam always hold up activities to encourage and show people how to drive
safely. Since 2004, the “Tôi Yêu Việt Nam” programs, has been certified and cooperated
by the Committee of the National Traffic Safety, Police Department Road and Honda,


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have been aired for 10 years. Over time the, the program has make an impact upon the
people all around the country with many successes bring positive effect for local people
General public. Beside having responsibility with manufacturing, producing and
especially ensuring safety environment, Honda also commits to contributing for the
general community, such as raising fund for the education, charity work and
environmental program: The top 10 youngest innovator, the award for successful
engineer and scientist, the raising fund for poor but hard-worked student, the Fund for
victim of the 9th storm, “Ngảy hội trồng rừng”
Internal public. Benefits of Employment: Honda Associates are our most
valuable asset and Honda offers a wide range of benefits to meet the needs of our
diverse workforce. The type and scope of benefits vary by company and location.
Honda Philosophy: The Honda Philosophy has guided our direction, and
continues to serve as the basis for our daily activities. At the core of the Honda
Philosophy is the concept of "Respect for the Individual." This means that we recognize
and respect individual differences in one another, that we treat each other fairly, and that
we establish relationships built on mutual trust. By doing this we encourage each
Associate to think creatively and show individual initiative and judgment.

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Commitment to Inclusion and Diversity: Honda is committed to bringing
together a diverse group of Associates, dealers and suppliers to foster the kind of
innovation and vitality that enables us to achieve our dream of creating products and
technologies that make people's lives better. In this spirit, every Honda Associate and
business partner is expected to embrace and actively support diversity and the cultural
richness and advantages it provides.
Corporate Social Responsibility: Honda has a long-standing commitment to be
"a company that society wants to exist." Honda is working to address the world's
environmental challenges through a comprehensive approach for the near and longer
terms. Read about these programs. Honda is also engaged in a broad range of activities
that support and give back to the communities where we work and live.

Consumers
Consumer markets. Honda main goal is to provide high quality transportation
for Vietnam with reasonable price
Business markets. Here are some Honda suppliers, like, Keihin Corp (Fuel
system), Showa Corp (Steering system), Shumito wiring system, Ltd, NOK Corp,
Nihon Plast, Nippon Seiki.


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Reseller market. Beside from official distributing channel, there are also
retailers who purchased product at profit point, such as dealer, automobile specialist,

approved body shop.
International markets. Continental Expansion – North, South, and Central
America American Honda Motor (AH) was established in Los Angeles in June 1959,
marking the start of Honda's expansion overseas. The quest was to find a market for
motorcycles and to win the satisfaction of American consumers, and so through the
efforts of AH a sales network was created. Honda established offices in Singapore and
Malaysia in 1963, actively preparing for entry into the growing Southeast Asian market.
Honda established Asian Honda, a company for motorcycle and power products sales,
in Bangkok, Thailand, in October 1964. In April 1965, Thai Honda Manufacturing
(TH), a production base for motorcycles and general-purpose engines, was established
for local production.
Macro Environment
Demographic factor
Demographic changes have significant impacts on the social and economic
performances of countries, regions, and the whole world (Giang & Pfau, 2008).


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Therefore, deep understanding of the population trend is an advantage in promoting
sales.
Nowadays, motorcycle is considered as the most common means of transport in
Vietnam, especially in Ho Chi Minh City. In average, there are 2 to 3 motorcycles in
each house in Vietnam. Therefore, Vietnam has a large motorbike-consumption.


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(United Nations, Department of Economic and Social Affairs, Population
Division (2015). World Population Prospects: The 2015 Revision.)
Two graphs above show the comparison between the population in 1950 and in
2015. As it can be seen from the graphs, the population increases considerably
throughout the period. The population of Vietnam is estimated around 90.73 million in
2014 (The World Bank), and is predicted to continuously rise in the next few years. In
addition, UNFPA Vietnam (2015) describes the structure of population in Vietnam as
following: