MARKETING PROJECT ON HONDA SIEL CARS INDIA LTD.

(HSCI)

Submitted by:
AKASH CHAUDHARY (12DM013) ASHISH SHAH (12DM038) DHRUV NIGAM (12DM049) GAURAV MUTEJA (12DM052) ISHAAN SHARMA (12DM056) KANWAR YUDHABHEY SINGH (12DM063)

Under the guidance of:

Prof. Dhruva Chak

About the Company

Honda Siel Cars India Ltd., (HSCI) is a leading manufacturer of premium cars in India which was established with a commitment to provide Hondas latest passenger car models and technologies, to the Indian customers. The company is a subsidiary of Honda Motor Co. Ltd., Japan. HSCI was incorporated in 1995 as a joint venture between Honda Motor Co. Ltd., Japan and the Siddharth Shriram Group. Recently in August 2012 the Siddharth Shriram-led Usha International Ltd (UIL), sold its entire 3.16% stake in Honda Siel Cars India Ltd., (HSCI) Honda Siel Cars India Ltd., (HSCI) will be a 100% subsidiary of Honda Motor Co. Ltd. The process of changing the companys name and other formalities will be completed over the next few months.

Honda Motor Co. Ltd., Japan:

Honda Motor Company, Ltd. is a Japanese public multinational corporation primarily known as a manufacturer of automobiles and motorcycles.Honda was founded in 1948 by Soichiro Honda and Takeo Fujisawa. The company started off by developing an automated process to produce piston rings. Today the companys products in clude: automobiles, motorcycles, scooters, electrical generators, water pumps, robotics, aircraft, and all terrain vehicles.

Vision: Respect for the individual. The Three Joys.

"Respect for the Individual" reflects the companys desire to respect the unique character and ability of each individual person, trusting each other as equal partners in order to do the best in every situation. Based on this, "The Three Joys" vision of the company came into existence. Honda believes that the joy of producing is a joy known only to the engineer. When that product is of superior quality, the society welcomes it and the joy of that engineer cannot be surpassed.

The second joy belongs to the person who sells the product. Honda is a manufacturing company. When the product is of high quality, its performance is superior and its price is reasonable. The third joy belongs to the person who buys the product. It is the fairest determiner of the products value. It is neither the manufacturer nor the dealer that best knows the value of the product and passes final judgment on it. Rather, it is the consumer who purchases the product in his daily life. There is happiness in thinking, "Oh, Im so glad I bought this." This joy is the garland that is placed upon the products value.

Mission (Company Principle):

Maintaining a global viewpoint, we are dedicated to supplying products of the highest quality, at a reasonable price for worldwide customer satisfaction. The companys mission is to fortify its position in the global market by focussing on quality and cost efficiency.

Honda Siel Cars India Ltd.s Product Range:

The companys product range include Honda Brio, Honda Jazz, Honda City, Honda Civic and Honda Accord which are produced at the Greater Noida facility. The CR-V is imported from Japan as a Completely Built Unit. Hondas models are strongly associated with advanced design and technology, apart from the established qualities of durability, reliability and fuel-efficiency.

Honda City:
Launched in 1998 in the Indian automobile market, Honda City has achieved milestone sales with 50,000 units sold just in one year of its launch. It has been a prestigious brand in India and has also been awarded as the 'Car of the Year'. Moreover, it has consistently maintained its sales figures and continues to woo car lovers with its effective pricing and additional features that keep adding to the class of sedan. Honda City is currently available in four major variants, out of which automatic transmission is available in City V and City Exclusive. All these variants come with same 1.5 L (SOHC) 4 Cylinder, 16 Valve i-VTEC, 1497cc engine. As a part of company's policy safety and security features have not been compromised and remain same throughout all the variants.

External Marketing
STP
Segmentation: The process of marketing starts by dividing the overall market into segments in order to identify a potential group of buyers. This is the process of segmentation. This segmentation can be done in a number of ways depending on the suitability for the company. Honda has decided to segment the overall market in India on the basis of their disposable income for Honda City. Targeting: Once the segments have been identified the company identifies the segments which present the greatest opportunity keeping in view its future prospects. This is the next process of targeting. The segment that Honda is targeting comprises of individuals who have an average income of Rs.1 - Rs.1.5 lakhs per month. These individuals are usually middle level executives who are perceived to be well settled, technology savvy & ecologically conscious. They have a settled lifestyle and now have the means to indulge in some much deserved quality products. Positioning: Honda has positioned its car Honda City as an Affordable Premium Car . This is done so as to bring a feeling of pride and exclusivity in the minds of their customers . Honda says exclusivity has a price attached to it . This is the reason for which their products are sold at a bit higher price than the products of their competitors in accordance with their well established high brand image.

4 Ps
Product: Honda aims at maintaining the quality and exclusivity of their product. This is the reason why these areas are dealt with utmost importance to ensure the standard of their brand image. According to them, its a feeling of pride when you drive a Honda City. Price: Keeping in view their targeted potential buyers, Honda City is a bit expensive car due to its premium quality and exclusivity. These are the two reasons for which a buyer would be more than happy to associate himself with the Honda family without giving much attention to the price he is paying

Promotion: In order to promote Honda City, Honda came up with some brilliant ideas to capture the minds of their targeted buyers. They observed the happenings in the day-to-day life of the targeted buyers alongwith the main work places. Right from the newspaper which he reads like TOI to the premium radio channels like Radio Mirchi, the main route to their workplaces they travel through like Nehru Place, Kalkaji, Noida-Greater Noida Expressway to the news channel he watches like NDTV and finally to the magazines he reads like Readers Digest and India Today and then they projected their advertisements everywhere. Place: Honda focused only on the metros and major two-tier cities such as Chandigarh, Jabalpur, Surat, Pune, etc. They carried out detailed study of the peoples income bracket living in these cities and found that a big chunk of population was earning more than 1-1.5 lakhs per month.

3 Cs
Customer: Customers are influenced by Hondas City fuel performance, luxurious interiors and obviously the brand name . Customers see Honda City as a car providing them with comfort, exclusivity and peace of mind.

Company: Honda is a global company with a global viewpoint that is reflected in a solid commitment to local markets and economies. However, the most enduring challenge of Honda City has been to satisfy the ever-changing needs of their customers. This is the essential spirit of Honda. In order to entertain their interests of its employees, Honda provide easy loan facilities.

Competitor: Honda City faces stiff competition with some big names in the market such as Hyundai Verna, Volkswagen Vento and Ford Fiesta in building small petrol engines with efficient profiles . These engines are made keeping their performance in the following three key areas: The cars performance in terms of fuel efficiency Delivery/guarantee of quality and reliability Research and Development into the Hybrid Technology

Internal Marketing
Internal marketing acts as part of the marketing strategy with the employees themselves whom are termed internal customers. It is used as a philosophy for managing the firms human resources based on a marketing perspective to build internal competencies for external success. Honda tries to market itself among its employees by using following techniques: Providing easy loan facilities to the employees to encourage the sale among internal prospects. Honda has the policy of giving discounts to employees on purchase of its cars so as to build strong employee relationship within the company. To publicise and increase the know how in internal environment the marketing department market itself among different departments (finance, production etc.) by using various techniques like spreading e-mails, employees training programs.

Distribution Channels
Honda Siel Cars India has a strong sales and distribution network spread across the country. The network includes 137 Honda Exclusive Authorized Dealerships in 85 cities. All HSCI dealerships are based on the "3S Facility" (Sales, Service, Spares) format offering complete range of services to its customers. Its 3S shows that the ONE STOP SOLUTION for all your needs related to a car purchase, finance, insurance, and after sales services. Beginning from giving a good value for your used car to helping you select your new car to fitting it with accessories to match your taste, finance requirements, RTO, insurance, preventive maintenance, regular and free service, accident repairs, roadside assistance, Dealer One 2 One, ALL UNDER ONE ROOF JUST A PHONE CALL AWAY!

SWOT Analysis
STRENGTHS:
Honda City was first launched in 1998 in India and since then it has successfully launched three models. Company has become a familiar brand name among consumers and has even earned the reputation of producing high quality products. Car has a new design and has won many awards for initial quality and satisfaction. Companys high learning curve and strong research and development has afforded them competitiveness in quality products. Honda has recently devised 'Auto Terrace' to organise its used car market. This service allows customers to exchange their existing cars (any make and model) with a brand new Honda City. One can also buy pre-owned City car with Honda's certificate of warranty. This has really helped the company to reinvigorate relationships with the existing users. WEAKNESS: Price of Honda City is higher than its competitors which reduces the areas for competitive advantage for the company. Absence of the diesel version is another big issue of concern for the company which can impact its market share. OPPORTUNITY: There is a huge opportunity for the company outside the tier 1 cities. Company can make a long term strategy for the neglected and the untapped segments by introducing new versions of City priced at a lower cost. The company can undertake product expansion through entering in to the taxi/cab market and by introducing diesel variants. THREATS: Biggest threat for the company is the dieselization of the market. With the absence of any diesel variant company can lose its market share to diesel cars like Verna and Vento. Its price is another big issue of concern as consumers still believes it to be overpriced. Company should work on its pricing strategy again and see if there is any possibility to reduce the price. Brand is reaching its maturity stage in many markets which are another big threat. Company should work on how to reinvigorate relationship with the majority of its existing customers and should follow a proper marketing strategy to catch the attention of its existing customers and give them a better value added products as compared to their competitors.

Sales
As per Honda Siel Cars India Ltd. the sales of Honda City witnessed a major fall in volumes. The sales figures for the month of July 2012 were 1,843 units as compared to an impressive 4,092 units for the corresponding month in the year 2011. This was an overall decrease of 54.96%. However the sales of Honda City grew at an impressive 64.99% for the month of February 2012 in comparison with the same month in the previous year.. February 2011 3,668 Honda City July 2011 4,092 July 2012 1,843 Year on Growth (54.96)% Year February 2012 6,052 Year on Growth 64.99% Year

Budget Forecast 2012-13

Financial Expenses Marketing=49 cores Events like free driving, Advertising Hoardings trade fares, Greenery Events Program sponsors like research program in IIT others

5200 crores

Miscellaneous like making bags, cups, rallies

5151 crores

12 crores

21 crores

11 crores

2 crores

5 crores

Sales Turnover=6,000-7,000 crores Total sales=85,000 units Honda city sales=32,000 units Total sales (Break even)=60,000-70,000 units

Recommendations

Marketing Strategy: The company can opt for penetration pricing in order to capture a larger market share. This can be done through rapid technological development and new innovations in which they can develop new products which are low priced and through this it can cater to the needs of other segments also. Product Development Strategy: Since Honda Siel Cars India is having a strong edge in Research and development, therefore they can focus on this to come up with newer and newer products as per the customers requirements. Advertising and Promotion Strategy: They can use the pull strategy in order to attract more customers through offers and lower price models. The Brand promotions can be done through using the distribution network. Research and Development: They should continue to follow the same strategy in research and development as they are following now i.e. continuously investing in R&D and keep coming up with new innovations and products so as to maintain their leadership position in R&D.

 Operational Strategy: In this they can go for modular manufacturing strategy i.e. preassembled sub assemblies .The parts of the car can be made and stored in different units. As per the order of the customer a group of workers can assemble the cars at a high speed mode and can make the car available within the short period of time. This will enable the company to follow and enhance Just in Time approach. Diesel Variant: Petrol price hike is steep and therefore demand for petrol vehicles will further shed, leading to diesel car demand hike. Keeping this in mind the carmakers should launch there diesel variant as soon as possible. Offer More Than Just Cosmetic Changes: With the cosmetic changes, City is now looking killer for sure but under the hood, it is still same as it was. No change in engine whatsoever has been done, so it means City will now offer more premium looks than premium feel. Untapped Potential in Luxury Segement: Indias luxury market is very hot and no company can afford to miss this opportunity. Honda has some of the worlds best luxury cars like Crosstour and Accura which can compete with likes of Mercedes and BMW. Compete in Hatch Back Segment: Hatchback is the biggest and most competitive segment in India. Brio and Jazz are the only cars by Honda competing in this market. Honda should launch more cars for this segment at competitive price in order to capture more market share.

References
Vivek Anand Singh (Marketing Communication) Honda Siel Cars India Ltd., Plot No.A-1, Sector-40/41, Surajpur- Kasna Road, Greater Noida, Industrial Development Area, UP-201306 E-mail: vasingh@hondacarindia.com Mob: +91-9871722558 Rahul Garg (Purchase Department) Honda Siel Cars India Ltd., Plot No.A-1, Sector-40/41, Surajpur- Kasna Road, Greater Noida, Industrial Development Area, UP-201306 Mob: +91-9873488858 www.autoworld.com Blog Archive: History of the Honda City www.artrade.com www.cardekho.com