HondaAccord EX Market Analysis
HondaAccord EX Market Analysis
TheHonda Accord EX is a car from the Japanese manufacturing companyHonda Motor Co. Limited. Honda is a diversified company manufacturingmotorcycles, automobiles, and power products. Honda Motors has aninternational presence with over 378 subsidiaries and 88 affiliatecompanies. In addition, Honda has manufacturing facilities locatedacross Asia, Europe, North America, South America, and itsheadquarters located in Tokyo Japan. Under the automobile segment,the company produces passenger cars and related parts, the passengercars consist mini and medium sized vehicles, commercial, and lightutility vehicles. The company’s hybrid vehicles run on dual systemsthat include gasoline and electric motors, whereby fuel cell vehiclesare run on hydrogen powered technology, with segment accounting forthe company’s 75% of its total net sales. Thus, this essay intendsto look at the Honda’s marketing analysis, with a focus on itsmarket mix, SWOT analysis, consumer behavior, and Branding strategyin relation to its consumer product the Honda Accord EX.
HondaMotor Company has been producing the Honda Accord since 1976, thevehicle is best known for its four-door sedan design, which has beentopping as best seller automobiles in the US market from the early1990s. Notably, the Accord is the first Japanese vehicle to beproduced in the US. Thus, the car has witnessed numerous successhaving sold over ten million vehicles, and past various road andsafety tests making one of the present day’s most reliable car. Theninth generation Honda Accord EX is the first Accord to use the Strutsuspensions since the one used in the second generation Accord. TheNew Accord offers the consumer a new direct injection 2.4 literengine, four cylinder engine rated at 185hp, 245 Nm of torque. Thecar comes with either a six speed manual gearbox or an automatictransmission gear box. The hybrid version of the Accord integrates a2 liter gasoline engine plus an electric motor and a lithium-ionbattery. The hybrid version of the Accord utilizes an automatictransmission system rating at 196hp 306 Nm torque. Both the hybridand non hybrid have been realized on the American market with thesport version of the Accord EX have 18-inch wheels and tires, a dualexhaust system, a spoiler, fog lighting and steering mounted paddleshifters (Edmunds, 2014).
HondaMotor Co. Limited has vast geographical reach on global bases,allowing the company to attain economies of scale and recognition ofits brands. This has come in handy for the new Honda Accord EX givingit quick recognition since it has a presence in the Americas, Europe,Asia, Middle East, Africa, and Oceania. In addition, Honda is veryexperienced I setting up operations overseas and doing furtherexpansions with relative ease. The vast worldwide presence as enabledthe company to be able to mitigate business risks of overdependenceon a single market.
Thecompany’s founder Soichiro Honda put forth a slogan ‘do notimitate’ has seen the company put forth great emphasis oninnovation as it is witnessed in the Honda Accord EX. The company hasroots in racing and has the reputation of being one of Japaneseearliest automotive manufacturer to have participated in the FormulaOne (F1) races, as such, the company has always put the developmentof its engines as top priority. This has lead the company’s HondaAccord EX engine to be a leading player in fuel efficient engines andhydrogen powered fuel cell technologies. The Accord EX is part of itsnext generation technologies titled ‘Earth Dreams Technology’,consisting of the next generation gasoline, diesel, and hybridengines.
Hondahas been faced with an inconsistent design strategy turning out to bethe company’s biggest challenge. The ninth generation whichencompasses the Accord EX design has been critiqued on the basis ofits design and weak interior design quality. Honda failed to leverageon its 8thgeneration Civic whose sleek design curves and interiors had beenreceived well in the US. Research has also shown that Honda hasfailed to perform exceptionally well in the European market due toits new design, the consumers in the European market seem to favorEuropean automobile manufactures designs such as BMW and Alfa Romeodue to their style in design rather than performance capacity (Honda,2014).
Inthe recent years the company has conducted recalls on their productsincluding the Accord EX on a worldwide basis due to faults associatedwith airbags the vehicles. In the US alone the company recalled over649,000 vehicles in 2013 due to various mechanical problems suchthose related to the driveshaft, wiring issues, and struts (Honda,2014). This recalls have affected the brand image and the safety ofthe company’s cars consequently affecting the sale of the HondaAccord EX in the European and American markets.
Despitethe fact that the traditional markets have been Japan and NorthAmerica, the emerging markets have contributed positively to mark anincrease in sales and revenues collected from the sale the Accord EXallowing the continued growth of the market. Up-and-coming marketslike India are likely to have an increase in demand for automobiles,which plans to capitalize on the opportunity to expand its sales toallow further growth and promotion of its brand image (Honda, 2013).
Takinginto account the ever rising fuel costs and stricter regulations,consumers have turned to paying greater attention to the fuel economyof the vehicle. Honda has capitalized on this issue in its line ofthe Honda Accord EX, employing fuel efficiency technologies, such asthe electrical and hybrid system engines. In addition, Honda is theleading player in the field of green technologies making the companywell positioned to deal with the current and upcoming changes (Honda,2014).
Hondahas opportunities to increase its network of joint ventures fromthose already existing in America and establish new ones in emergingcountries such as China and India in addition, it should alsoconsider joint ventures with European partners. Partnering with theEuropean companies will enable Honda to leverage on designing skillsand diesel engine technologies from its partners while in return itoffers its expertise in terms of hybrid engines, reliability, andsafety mechanism it utilizes in the different models (Jones et al,2008).
Hondaoperates in an extremely competitive environment, with many differentplayers in the market. Traditionally, Honda would face competitionfrom home automakers such as Nissan and Toyota, however, of latecompetition has increased especially from the Korean manufacturerssuch Hyundai and Kia. The Korean competitors are having introducedprice wars proving to cheaper than Honda consequently affecting thesale volumes of its new brand the Honda Accord EX. In addition,Hyundai have been named to be the most fuel efficient brand in theUS, a position previously held by Honda.
Inthe emerging markets there is an increased pressure from low costplayers such as Tata offering competition from the small to themedium automobile market segments. Consumers in the up-and-comingmarkets are overlooking the superiority of Honda cars in terms ofperformance and technology and going for the cheaper brands from thecompetition with weaker technologies thus, choosing to focus on price(Honda, 2008).
Theglobal economy might have recovered from the Lehman shock crisissince 2008, the recent ongoing European crisis have the potential todestabilize the economy recovery. Should the European debt spread tovarious key economies such that of the US, it will likely affect thesale of vehicles largely.
Hondamotors hold a strong marketing mix because of its dynamic due to itsdynamic use of the product marketing mix concept. Thus, this sectionfocuses on the different marketing mix employed by Honda motors(Jones 2008).
Theavailable car models include the Honda Accord EX, Honda Accord 2008,Honda Civic Hybrid, and Honda CR-V to mention but a few. The productslooks/ features is stunning having an outstanding design incomparison to the competition. The vehicles interior are brilliantlydesigned, bearing a multidimensional dash all steering wheels comewith audio controls, they have an iPod connection music system,comfortable leather seats, and safety features such as air bags.
Whenit comes to engine, gearbox, and performance, Honda motors come withthe latest I-VTEC engines, smoothest engines with widely spaced gearratios, paddle shifts, independent suspension for the front end ofthe car, wheelbase, ABS breaking system, dual airbags, and anavigation system come as stand features for Honda (Edmunds, 2014).
TheHonda Accord EX 2.4 liter, direct gasoline injection engine goes foran average of $21,996 from the factory. The car has True Car priceflexibility score of 78, translating to mean a new car buyer has thepotential to negotiate on the price. However, it has been noted thatHonda cars rate a bit higher in price in comparison to cars in thesame segment this is because Honda targets people looking for anoutstanding car in case of design, comfort, quality, and innovation(Honda, 2014).
TheHonda Accord EX first offering as the 9thgeneration was introduced in 2013, in the US and Japanrevolutionizing the upcoming markets. The new Honda Accord EX hasbeen referred to be a marvel of engineering. The US and Japanese eachhas a capacity of manufacturing over 100, 000 vehicles. Honda hascoupled this strong sales and distribution networks with its 94facilities 57 different cities, and it has 51 exclusive dealershipsin the US alone. In addition, the different dealerships are involvedwith sales, servicing, and spares making them what Honda calls the 3sfacilities (Honda, 2013).
TheHonda Accord EX is being promoted on Honda established brand name inquality and innovation. The company has never engaged in anyaggressive promotional strategies but it always tries to project itsimage as offering quality and it has gone further to create a brandimage by providing offering a better customer service. When it comesto advertisements, Honda has been very keen trying to project theirimage as the most reliable brand in the market. When it comes to TVcommercials, Honda promotes the hybrid environmental friendlyvehicles that run without gasoline and emit water as a bye productrather focusing on advertising a specific brand that exist in themarket. Thus, Honda focuses its advertisements more on technologicaladvancements differentiating Honda from the competition (Honda,2013).
Throughthe advertisements, the customer is always aware of the company’spolicy to produce new technologies, reliable brand, and eco friendlycars (Porter, 2008). Recently, Honda has used road shows displayingvehicles in pavilions during different college festivals. PreviouslyHonda has won awards in such categories as Reliable Brand andEnvironmental Friendly.
Hondahas focused on technological advancements and safety in the brandpromotions. For instance, they have tried a pair of inline fours andnew V6 engine that has promised both better performance and anincreased fuel economy. A 2.4 liter inline four with 177 hp poweringthe LX trims, and they have installed a more powerful version on theHonda Accord EX cranking 190 hp, bearing a 3.5 liter V6 producing 268hp the Accord EX trims. The consumer is also offered differentchoices when it comes to the transmission, either six speeds manualor automatic (Tschirky et al, 2000).
Thestrict regulations put in by different governments across the worldare working in line with Honda’ branding strategy, whereby Honda isfocusing more hybrid cars with zero emissions thus, proving to beenvironmental friendly. In addition, Honda is focusing on hydrogenpowered fuel cell technologies as a new line of branding theirvehicles engines. Thus, Honda has termed this next generationbranding technology move the ‘Earth Dream Technology’ entailingnext generation gasoline, diesel, and hybrid engines.
Consumersin the developing markets are overlooking factors that previouslydetermined choice in purchasing quality and performance and in theirplace laying their focus on price only. This is lowering the volumeof sales for Honda in the developing markets (Hill & Jones,2007). Considering the unstable fuel prices and stricter regulations,buyers are now focusing more on fuel economy of the vehicle. Thus,consumers are now interested in fuel efficient technologies such asthe electronic and hybrid systems that have been labeled as greentechnologies. Additionally, consumers are more focused on a vehiclesdesign, that is, how it looks in the interior and how it is shaped inthe outside, they are applied to by stylish design that look posh,sporty, and luxurious. A combination of all acquired consumerbehaviors from research is enabling Honda to improve its nextgeneration vehicles that are environmental friendly, yet stylish,luxurious, reliable, and offering high safety standards (Tschirky etal, 2000).
HondaMotors Company has seen success and expansion in sales and presenceacross the globe aided by its strong marketing strategy backed bystrong engineering capacities placing huge emphasis on innovation.These has helped the company to be a leading player in the naturallyaspired engines, in fuel efficient engines, and in hydrogen poweredfuel cell technologies. A combination of these technologies has madeHonda’s product superior than the competition’s as it is evidentwith its Honda Accord EX in terms of performance, technology, fuelefficiency, style, and safety which are what the 21 century consumeris interested in. For the sake of future growth Honda need to focusmore in design, in additional to which they can form a joint venturewith different motoring companies to share and learn technologies andtrends in the motoring industry.
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