Table of Contents

Introduction: .......................................................................................................... 2 1.1 Review the changing perspective in Honda marketing planning. ................ 3 1.2 Evaluate Honda capability for planning its future market activity. ................ 9 1.3 Examine technique for organizational (Honda) auditing and for analyzing external factors that affect marketing planning. ................................................ 16 1.4 Carry out organizational (Honda) auditing and analysis of external factors that affecting the marketing planning in Vietnam. ............................................ 25 2.1 Assess the main barriers of marketing planning. ......................................... 29 2.2 Examine how Honda Vietnam may overcome barriers to marketing planning. ........................................................................................................... 31 Conclusion: .......................................................................................................... 33 References: .......................................................................................................... 34 Appendix: ............................................................................................................ 35

Introduction: Honda Motor Co., Ltd. (Honda or the company) is one of the leading manufacturers of automobiles and motorcycles in the world. The company develops manufactures, and markets automobiles, motorcycles, and power products. It primarily operates in North America, Asia, and Europe. Honda is headquartered in Tokyo, Japan and employs 179,060 people. I am an assistant research analyst working in a team for a marketing research firm in Vietnam. I am require to provide to my team leaders (Tru and Tra) on the Barrier of Marketing planning in Honda for the coming discussion with the client Marketing planning is the logical sequence of events through a company to determine marketing goals and develop a plan to achieve that goal. I am an assistant research analyst working in a team for a marketing research firm in Vietnam. I am requiring providing to my team leaders (Tru and Tra) on the following for the coming discussion with the client (Business Development Manager reporting to the Marketing Manager for Honda - Automobile {Vietnam}): Tasks Provide an audit report to aid in formulating a marketing plan for Honda (Automobile) Vietnam base on the following below for the coming discussion: Review the changing perspective in Honda marketing planning. Evaluate Honda capability for planning its future market activity Examine technique for organizational (Honda) auditing and for analyzing external factors that affect marketing planning Carry out organizational (Honda) auditing and analysis of external factors that affecting the marketing planning in Vietnam

Provide slides (30 slides including tables, charts, accompanying notes, etc.) to be used as Presentations notes to the stakeholder on the following matter: Assess the main barriers of marketing planning Examine how Honda Vietnam may overcome barriers to marketing planning

1.1 Review the changing perspective in Honda marketing planning. In order to understand about Honda perspectives, we have to study about the marketing evolution because Honda company have been created long ago in the 50s when marketing have been changes so far during that time.

(Richard T. Pascale, 1984) As you can see the time when Honda Company has been establish, the marketing concept itself is beginning to be clearer and then becoming one of the important factors of the company success. Then from time to time it has been evolve into many different kinds with different perspectives. In the last 60 years marketing has revolve around 3 major disciplines: product management, customer management, and brand management. Or to be more specific, the marketing concepts evolved from a focus on product management in the 50s and 60s to a focus on customer management in the 70s and 80s and then evolved again and added the discipline of brand management in the 90s and 2000s. This are also the period of changing perspectives in Honda Company for their marketing plan.

(Phillip Kotler, 2010) At first, during the period of marketing 1.0 (or 50s to 60s), Honda Company in this particular time as apply this strategy into their domestic market (japan), they have developed huge production volumes in small motorcycles. For example: in 1959 American Honda Motor company has establish an American subsidiary, with this policy of selling not primarily to confirmed motorcyclists but rather to members of the general public who had never before given a second thought to a motorcycle.. Honda has begun to push into the U.S market with the smallest, lightweight motorcycles, the company product has sold for less than 250 dollar in retail compared to a thousand or 1500 dollar for bigger U.S or British machines. By that strategy Honda has superior to others competitors in productivity. As evidence of Hondas strategy of taking position as low cost producer and exploiting economies of scale, other source cite Hondas construction in 1959 of a plant to manufacture 30,000 motorcycles per month well ahead of existing demand at the time, up until then Hondas most popular model sold 2000-3000 units per month (Richard T. Pascale, 1984) and also because of that strategy that makes Honda with 1959 sales of $55million become the largest motorcycle producer in not only the US but also the world.

(Richard T. Pascale, 1984)

During that period in the 50s to the 60s Honda has apply this strategy effectively with mass buyers, mass production, with reasonable price, focusing on product function. The development of product focus about body, color and style, enhance the reputation for the Company itself. At the late 60s, Honda begun to produce automobile but also during this time was a time of transparent between the marketing 1.0 period into the 2.0 period. During this time Honda has to deal with the sophisticated customers. The customers were raising the expectation because they have expose into the world class service more and more every day and they can see through marketing-speak, and they want transparency. So Honda at that time also began to evolve and merge with the marketing 2.0 strategy and still applying that strategy now. Making the diversity in their product, The company's popular passenger car models include Legend, Accord, Inspire, Civic, Insight, City, Acura RL, Acura TL, Acura TSX, Acura CSX, and CR-Z. Its popular multi-wagons, minivans, sport utility vehicle models include Elysion, odyssey, Step Wagon, Stream, FREED, Airwave, Fit/Jazz, Fit/Jazz Hybrid, Partner, Pilot, Ridgeline, CR-V, Element, Acura RDX, Acura MDX, and Acura ZDX Accord Crosstour. Hondas mini cars are marketed under Life, Zest, Vamos, and Acty models. Honda has producing many kind of automobile to satisfy many types of customers with different taste or purpose of use, from regular sedan or family cars to sport car or mini wagon.etc. Same things go with the motorcycles business, when they producing many types of motorcycles from: Waves Alpha, Waves 110 RSX for the low salary people to the Air blade, Leadetc. for high salary people and SH 120cc, SH 150cc, Racing motorcycles with many types from touring, adventure, cruiser, sport and super-sport types for rich people. This strategy has help Honda not only gaining market share and increase profit but also the diversity of product has help Honda to have more products to satisfy the customers with different age, gender, class, making Honda product become suitable with everyone. As for the brand, it certainly one of the important factors that can make the company stands out and makes the consumers recognize them. As for Honda, their brand name not only stand for the Company anymore but they stand for the quality of the products that Honda offers which is very reliable, thats what the consumers remembers about Honda. At this point Honda is partially apply the 3.0 marketing strategy because they have been conducting some program running along with their product to advertising it as well, such as the teaching program which teach the consumers not yet got the license to learn about the law, how to handle the vehicle itself. Honda also associates with some insurance companies and banks to provide the best service for their customers. But due to the nature of the business itself, the 3.0 marketing plan can only be apply partially, however Honda can may apply it in the future when the technology have are more advance and the electrical car or clean energy car has been produce and apply more.

Vietnamese Market: In the early 90s, Honda has begun to advance to this market strongly and by the late 90s they already have their first Motorcycle factory in Vietnam which provides the Vietnamese people with mass production of small motorcycle with reasonable price applying the 1.0 marketing planning at first but then they diversify the motorcycle into many types from times to times (apply the 2.0 strategy) to satisfy many kind of customers. Then Honda have been permitted to conduct their own factory in 2005 to produce the Automobile and by that time Vietnam also join the WTO making the business becomes easier for the Honda to consume their product because at that time the needs for motorcycles have increase and the people are demanding for the automobile with the reasonable price as well. So by applying the similar strategy for the automobile just like I have mention above, Honda has increase their market profit very fast. Because they have already create a good reputation among the Vietnamese people by their good qualities and price for the motorcycles plus the marketing events that they create in the school for children to learn about the laws in the late 90s and early 2000s have already put on these young customers mind about the Honda Products (suitable with the 2.0 marketing plan and the Hondas slogan: Power of Dream). Furthermore, Honda comes into the Automobile market with the 1.0 and 2.0 strategies at the same times which mean diversify their products which can suit with any types of customers making it much easier for this new sector to run. Now in Vietnamese market, Honda have 4 types of Automobile introduce in this market, which was CRV, City, Civic and Accord. Consider the Vietnamese Population growth around 1million/ year combine with the annual financial growth rates around 6 -8 % per year makes this become a highly potential market. Not to mention the income around 200-400 USD/people/year making the Honda Automobile becoming suitable for this market, not to mention the City income rates around 1000 2000 USD so it makes the Automobile of Honda not so far from the people in Vietnam in price, when Honda already put out different types of Automobile with different price from low to high with different model that can suit with different many types of customers. New Honda City 2013 1.5MT price: 540 million VN New Honda City 2013 1.5AT price: 580 million VN New 2013 Honda Civic 1.8MT value: 725,000,000 VN New Honda Civic 2013 1.8AT price: 780 million VN New Honda Civic 2013 2.0AT price: 860 million VN New Honda CR-V 2013 2.0AT value: 998,000,000 VND

New Honda CR-V 2013 2.4AT price: 1.140,000,000 VND Honda Accord 2.4AT value: 1,435,000,000 VN Honda Accord 3.5AT value: 1,780,000,000 VN Recently, Honda have introduce the new City model in the Vietnamese market due to the financial crisis impact in recent years making it harder for the Automobile to consume so now theres more option for the people which can also help the company Automobile sector go through this tough time. As for the 3.0 strategy like I have mention before, Honda has apply the similar events for Vietnamese market recently, but still due to the nature of the business (still causing toxic to the nature). This strategy can only apply partially and in the future if Honda wants to apply it, they need to research the new product which can reduce the toxic to the nature to the minimum. Marketing-led and Market-led orientation: Market-led orientation: its the company which focuses on the customer needs as the primary drivers of organizational performance. Marketing-led organization is basically led by the marketing department. Marketing orientation might just refer to increased power for marketing personnel. After all the analysis above we can clearly see that Honda was a Market-led Company which driven by the needs of the customers. As for their marketing Strategy that I have analyzed above it changing from time to time just for fitting the customers needs. Just like in the period of late 60s come to 70s when the demand of people are higher, Honda have choose to diversify their products but not only in the motorcycles segment but also the Automobile segment to meet the need of any customers.

Challenge of Market-led organization: Sophisticated customers: Like I have already mentioned many times above. Honda also have to deal with this problems because their customers from time to time are getting more and more access into the different sources of information, service which result in the demand of transparency in them. New Competitors: From overseas or Reinventing the business. However Honda also needs to take eyes upon the moves of the current competitors in all sectors because some of those companies may have the new product that can change the tide of the games. Hondas Competitors:

Fiat S.p.A. General Motors Corporation Isuzu Motors Limited Mazda Motor Corporation Nissan Motor Co., Ltd. Renault S.A. Toyota Motor Corporation Yamaha Motor Co., Ltd. Subaru Bajaj Auto Ltd. Mahindra & Mahindra, Ltd.

Ford Motor Company Harley-Davidson, Inc. Kawasaki Heavy Industries, Ltd. Mitsubishi Corporation PSA Peugeot Citroen S.A. Suzuki Motor Corporation Volkswagen AG Audi AG Hyundai Motor Co. TVS Motor Company Limited Bayerische Motoren Werke AG (BMW Group) Porsche Automobile Holding SE

Hero Honda Motors Limited

New Types of organization: Outsourcing arrangements, collaborationetc. New ways of doing business: Customers Specific marketing, Internet marketing.This part Honda really do not need to pay much of their intention because most of this are already apply in most of Honda Competitors and Honda itself. Future orientation: In this particular part, we only focus on the future of the Company, because just like any others Company, Honda also need to consider their future as well, think of the perspectives of their marketing strategy have to change to not. Protect the Past Continue with their current products (updating it) Re-engineering current processes of strategies Continue to diversify their product, with frequent updating engine, design. Follow the current rules of the industry Operating efficiency Apply pricing strategy for suitable market (because we are in the crisis times so apply this strategy for suitable product with suitable Create the Future Creating a new product, developing a new kind of automobile using converted energy or other kind of energy ( this was already done but the fact was it never actually applicable widely so it still not enough attraction and the using the electrical energy are still not really possible for most markets. So research a new type of energy applicable to the product may be the best way)

market can increase the company profit) Regenerating core strategies (focusing on Continue gaining market-share, protecting the research the new types of convertible energy 1st position in some market. and product that can use it) Making or re-arrange the rules of the industry(By completing the new product can make Honda changing the rules of the industry itself, making others competitors has to focus on create the new product when Honda is on the ways of dominating the market) Creating new sources of competitive advantage outrun the others competitors Dominate the market. The current position and strategy of Honda are still protect the Past but Hondas have enough resources and with the advance of technology these days, I think Honda need begin to think about creating a new product which can help them change the games. Because the technologies are advancing faster every day and many companies (Hondas competitors) are studying and researching this field in order to create a new type of product. So Honda also needs to think about creating their future as well if they want to dominate the market, whether its Viet namese market or others Market. 1.2 Evaluate Honda capability for planning its future market activity. Gap analysis: Before analyze and evaluate the capability of Honda in carry out the planning we have to understand what will be the different in Honda current state and when the plan being successfully completes. The Gap is different between the current states of the company compares to the plan. By analyze this we can measure the needed resources quire to complete the plan and also the capabilities of the Company itself.

(Class notes)

By combining this Gap analysis with the capabilities assessment of the company, we can know what Honda needed to complete the plan. First, in order to evaluate the capabilities for planning of Honda we have to take a look at the resources of the Company itself. The resources are including the Tangible, Intangible assets and the Human. In the Tangible assets: it has the physical assets such as building, machinery, land, cash, and inventory.etc. Intangible assets include non-physical assets like brand or good will and copyrightsetc. Human resources are referring to the knowledge, skills, motivation and capacity for collaboration of Honda employees.

(Class notes) Tangible: Its containing the financial and physical assets Financial: Mar 12 months Mar 31, 31, ended 2013 2012 Net sales and other operating 104,906 96,704 revenue Net income 4,170 2,702 Mar 2011 107,479 6,777 31, Mar 2010 92,210 3,038 31, Mar 2009 101,916 1,537 31, Mar 2008 119,801 6,262 31,

Mar Mar 31, 31, 2013 2012 Return on Sales Gross profit margin Operating profit margin Net profit margin Return on Investment Return on equity (ROE) Return on assets (ROA)

Mar 2011

31, Mar 2010

31, Mar 2009

31, Mar 2008

31,

25.64% 5.52% 3.72%

25.52% 27.30% 2.91% 2.66% 6.38% 5.98%

25.23% 4.24% 3.13%

25.89% 1.89% 1.37%

28.82% 7.94% 5.00%

7.29% 2.69%

4.80% 1.80%

12.00% 4.62%

6.20% 2.31%

3.42% 1.16%

13.20% 4.76%

140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 6,262 Jan 1, 2008 1,537 Jan 1, 2009 3,038 Jan 1, 2010 6,777 Jan 1, 2011 2,702 Jan 1, 2012 4,170 Jan 1, 2013

114,321 95,844 85,559 100,582 90,297 Net sales and other operating revenue, excluding finance income of finance subsidiaries Net income 98,956

35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Jan 1, 2008 Jan 1, 2009 Jan 1, 2010 Jan 1, 2011 Jan 1, 2012 Jan 1, 2013 Gross profit margin Operating profit margin Net profit margin Return on equity (ROE) Return on assets (ROA)

This financial record show we that Honda income and revenue still increase over the years it only drop in 2 years 2012 and 2009 due to the financial crisis that happen during that time. This information alone also tell us that the company are in the stable state with powerful financial resources and the company itself can use it in other purpose such as maintenance, updating technology or develop new product, which help the company to increase the competitiveness in the future. Physical Assets: according to the scenario, Hondas operating through a global network of with 383 subsidiaries and 91 affiliates all over the world. They already have a factory in Vinh Phuc which contains 3 different manufacturing sectors. In those 3 sectors, 2 of them are operating or manufacturing the motorcycles and the other one is manufacturing the Automobile. This factory alone can help Honda to makes their product become more familiar with their brand and images. Furthermore, Honda also operating on many others place in the world with many others factories with modern technology and machinery which assure the working condition of the employees and the quality of the products. Each of the sectors has its own headquarters so that the Company can know about the local trend and choose the suitable plan and products for each sector. Intangible: its consists of the brand, goodwill, culture and value. Brand image/good will: Honda is one of the big brands in the field of Motorcycles and Automobile. They already operated in the late 50s, so they have plenty of experience to run the business in many different markets. Not to mention the evolve of the skillful and experienced staff, modern technology, facility and machinery from time to time making the Company itself are really reliable. In Vietnam, people already know about the Honda brand in the 80s and become popular in the 90s then even more so when they established

the factory here, which making their products available here in Vietnam with cheaper price and making their brand image in Vietnam bigger plus their position in the world business are also really high with the 4th most popular Car brand in the world and 56/100th world largest co-operation. Making their brand becoming really close and reliable with the local consumers like in the Motorcycles fields, Honda have the biggest market share and everyone in Vietnam know about Honda and probably most of them will choose Honda brand over others. Culture/value: Quality and service of Honda is at the top, the company always guaranteed the commitment of the staff in working and service for the customers, because the working condition of the employees are always at its best so with the comfortable working environment making the employees really commit with their work, treated the customers with integrity and commitment. The quality of Honda products are at its best because Honda is always focusing on the quality of the products first and they also become famous with it. Usually the Honda products can use 1.5 times longer than the others brand, which really fit with the Vietnamese culture and the good services that Honda offering to the customers making all of these are their distinct advantages which need to be maintain.

Human: its containing the knowledge, skills, motivation and team-work of the staff. Knowledge: Hondas staff are well trained and carefully selected through the selecting process, not to mention the training program that they had for the new employees to strengthen their knowledge and skills as well.

(Honda annual report, 2012) Skills: different skills set are require in different position but the employees skills are always require to meet some certain requirement to maintain their position and to gain higher position they need to get more experience and other skills which suitable with that position. Motivation: Hondas policies are really fair with their employees when they have the clear promoting policy and requirement for each position. The working condition are always being maintain at highest quality to assure the comfortable of the employees and the bonus are given in specific events and times which motivate the employees a lots. Many discount and special treatment with the employees, who buy the company products, combine with the allowance for the contribution in ideas or feedback of the employees making Honda Company become more equal.

(Honda annual report, 2012) Team-work/Capacity for collaboration: This is one of the requirement for the employees in the Company because without team-work the employees itself cannot work well at their position because its all link together in 1 whole system which related to each other and helping each other from time to time. So this was very important that any employees need to learn how to work with others and capable of doing that freely and willingly.

Limiting Factors: This is referring to the things that can effect on grow of the company and its profitability. Honda may adversely affected by the market conditions: this can be shown in the recent years in the Automobile business in Vietnam when the crisis hit the market the Automobile business has to sustain some loss and the demand for both Motorcycles and Automobile have decline greatly. Technological competition: this is the result of the advance in technological world which causing the technological competition between Honda and others company in engineetc. Making the risk of outdating the technology in Honda or cost of maintain the technology updated. Products design: in this part was about the design of the Honda product because Honda unlike the others competitors are focusing on the design part too much to get it outstanding but Honda focus more on the quality and the neat of the products for users so it causing the products design are not outstanding the others competitors. Necessary investment on the equipment or updated: like I have already mention the cost of the new equipment or updating it are always need to be consider due to the evolve in the technology world.

1.3 Examine technique for organizational (Honda) auditing and for analyzing external factors that affect marketing planning. There are plenty of technique that can be used for organizational auditing and analyzing the external factors that can affect the marketing planning of Honda. However, I have pick out 3 most common techniques to analyze it. Those techniques were: SWOT analysis, STEEPLED analysis and Porter 5 forces analysis. 1. SWOT analysis is basically a method use for evaluate the strengths, weaknesses, opportunities, and threats. This information can then show us the competitiveness of the company in the market. 2. STEEPLED analysis is a method that widely used to analyze the macro environment and giving them the overview about it. The factors of this method include: Social, technology, economic, environment, political, legal, ethical and demographic. 3. Porter 5 forces are a framework to analyze the business and develop strategic plan. There are 5 forces that can influence that industry such as: Threat of new entrance, Supplier power, Buyer power, Threat of substitutes and competitive rivalries. Method SWOT Advantage Provide a look upon the external and internal of the company that helps Honda to make alteration and make some focus point. Exploring Honda strengths, weaknesses so that the organization can focus upon their strong side to accentuate the business and knowing what to improve for bettering efficiency of Hondas business. Acknowledge about the opportunities and threats provide Honda better perspectives about the risk that can harm them and where to advance their resources and stay on top of the games. Honda cans easily setting objectives and goals clearly for their strategic planning based on these information. SWOT alone does not require a large knowledge and skills to make but it still sum up numerous amount of information that can be useful for Honda. Disadvantage Its really unilateral look that can miss guild the Company and result in the operating in the wrong section with the wrong method. Its only one of the common analytical model, so Honda still need to do more research to handle more complex situation that makes this model can be miss guild somehow and it do need more work in order to apply it into the company itself. It can be done by many people but only few of them have a close look about the company operation and knowledge to analyze it carefully so if the company use the wrong person to do this. It can cost them a lot of time and effort because that information is not really reliable.

Its not cost much for Honda to conduct this. It need frequently update so that the effectiveness of the information can be assure It take times to collect all the needed information to analyze. Not to mention it need to go through many analytical steps and review to gives the best results. The information management become really difficult for the staff to handle because it contain large amount and really hard to assess and charaterize it. Because of the huge amount of information and analysis makes this method can be missleading or misunderstanding. Porter 5 force Helping Honda understand both strength Market structures were seen as and their current competitive position relatively static. and the strength of a position that the Pace of change is more rapid now a company is considering moving into. day compares to when this method Clear understand about strength and have been conduct. wheres your power lies, Honda can It only provides Honda a limited look take fair advantage of strength, improve of their environment. weakness and avoid the risks. It does not consider the non-market Identify the whether the new products, forces service or business have the potential to Mostly applicable for analyze the be profitable or not. simple market structure but not the complex one. STEEPLED It gives Honda a closer look at the macro environment, business opportunities and others perspectives. Show Honda the potential risks and minize them. Help Honda to conduct a policy that can makes the company run better

Application to Honda: SWOT analysis:

Strength

Weaknesses

Opportunities

Threats

a. Strength: Honda is one of the most popular brand in the world, it has been listed number 4th in the Automobile brand with the value approximately $14.2 billion in Brandz top 100 conduct in 2011, with the overall ranking of 56 on top 100 list. Its strong brand image gives them the advantage to gain higher revenue and growth in both domestic and international market. Honda also have a large network throughout the entire world, with the network of 770 retail dealers (2180 shops) in Japan alone and 1,300 dealers in the US; 1,370 dealers in Asia (excluding Japan); and 1,600 dealers in Europe. So due to the strong brand image the company has been able to put out their product into many places with many factories and distribution channel. Honda main products were Automobile and Motorcycles, both achieved a large amount of sales figures: 3,512,000 units of Automobiles and 11,445,000 units of motorcycles worldwide. In term of geography, the 2 largest consume areas for Automobile were North America with 41.5% and 28.7% in Asia (excluding Japan). About the Motorcycles the largest sales comes from the Asia with 80.2 % (excluding Japan). Through this figure we can clearly listed out the potential market for Honda business and the extensive production and distribution network have enhance the global reach of Honda. Honda Company also focusing on the R&D development, in fact they have spent around $5.7 million on R&D. We can see that Honda is pushing the research and development in order to maintain the competitiveness of them and catch up with the changes of technology now a day. In the Automobile business, Honda have develop and upgrading the safety performance and also try to address the environment issues by its technology.

Furthermore, like I have already listed and mention above about the company profit, revenueetc. The figures show that Honda was a strong company with reliable assets and continue to making profit from time to time. b. Weaknesses: Because of the mass production and many factories around the world, its likely that they have to face the errors or defects part of the products in the produce procedures. For example, in January 2011, the company recalled 2,277 Accord 4-cylinder and CR-V vehicles to replace an electrical wire harness coupler in the engine compartment. In February 2011, Honda recalled 693,497 vehicles worldwide due to defective parts that could stall the engine and cause problems restarting in certain models. So when the defects happen during the production process it will cause Honda a huge amount of money to get it back and they can also lose some customers due to this incidence. In summary, Honda need to solve this problem very soon if they still want to increase the sales and gain more attention from customers. c. Opportunities: According to the record of the general statistic office Vietnamese current populations was around 88 million and have an increase around 1% each year, with more than 52% in the working age. Make Vietnam market is one of the potential market for Honda plus the marketing strategy of Honda 10years ago promoting their image through teaching law at school make the most of the people in Vietnam right now acknowledge about their brand, which is a huge advantage for Honda to introduce their brand and get the people attention. Vietnam GAP growths are stable compares to others country with 5.3% in 2009, 6.8% in 2010, 5.8% in 2011 and 5.03 in 2012 and the Income per capita was around 1500 USD/person/year. The population in geography was 30% on city and 70% on rural areas, which can help Honda to analyze the different segment and come up with different strategy.

GDP
8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2009 2010 2011 2012 5.30% 6.80% 5.80% 5.03% GDP Linear (GDP)

Furthermore, Vietnam has already joined the WTO, the governments are now encouraged the foreign investment, mass media, internetetc. are all developed which make it easier for Honda to advertise their products. d. Threats: The Automobile industry is very competitive and it also means that Honda have to faces many strong competitors from automotive manufacturer in its various market. The competition between the different players can automatically enhance the capabilities in the context of continuing globalization and consolidation in the automotive industry worldwide. Factors affecting competition include product quality and features, the amount of time necessary for the innovation and development, pricing, reliability, safety, fuel economy, service customer service, and financial terms. There are some of companys strong competitors including Ford, Volkswagen, Audi, Hyundai, Porsche, Ferrari, Toyota, BMW, Nissan, among others. The design of Hondas product are really limited due to the fierce competitive in the market makes Honda have to choose to focus on a specific types of product and they choose to develop good engine with fair design but it cannot satisfy many others customers taste (some of them like sport or luxury.etc.). These are also requiring the competition in term of technology, products quality and features, fuel consumptionetc. which makes Honda really hard to characterize each one of it and focus on certain factors. Also, with large distribution channel and scatter all across the world making it hard for Honda to learn about each sector which has different trend and different types of

product. These also make Honda subject to the changes in market environment and financial crisis or other uncontrollable phenomenon and can be easily vulnerable and suffer huge lost by it. SWOT Matrix: Opportunities Threats Strengths S-O strategies S-T strategies Weaknesses W-O strategies W-T strategies

S-O strategies: This strategy is about pursuit the opportunities that fit with the company strength. In case of Honda, their Strength was the strong brand image that most of the Vietnamese people have already known and the reasonable price that their product offers. The population in the city many be much more less than the rural areas but according to the GSO 10 city in Vietnam have dominate nearly 60% of the total income of the country so the people in these cities can afford the Automobile made by Honda. Furthermore, Honda have newly introduce the City model of automobile which cheaper than the others product of Honda but it still have good engine and fair design which suitable with many average class in Vietnam. W-O Strategies: this basically the strategy to overcome the weaknesses to pursue the opportunities. Honda product may not good with the design but it has the convenience and the quality plus, the main politics central of Vietnam was Hanoi and this was one of the main segments of Honda. These people are really consider about the function or quality that Honda famous about, because most of the people who cares about the status are the youngster or really rich people which is not the target of Honda. But most of Honda target was the people who work in the government or Middle-class men or slightly higher which have the desire to buy cars that convenience going with family .etc. which really suit with Honda product. S-T strategies: Like I have already mentioned before. Honda Company may vulnerable to the impact of crisis or other types of nature causes. But the fact is they have strong brand and already have specific targeted segments combine with the good technology and being research and develop all the times. Making them will stand strong and rise when those impacts is overs. In fact it has been proved when the revenue recently that I have conduct above show that Honda have gain profit and the CPI of Vietnamese people have also increase in mid-2012 to 2013. W-T strategies: For instance, in the future Honda can introduce new product just like they have done with the City model during the time of crisis with low price. The new product can have new kind of design that can help the customers have more choice and draw up more customers with different taste that Honda fail to satisfy before.

STEEPLED analysis: STEEPED components Social Application to Honda Honda operating many places across the world so they have to handle the culture diversity and learn about the lifestyle in each different region and consider what products will fit with each region. For instance, in Vietnam the Northern people and Southern people have different lifestyle and status. The north people are all about the status when in the South they are more about the functionality. Northern people are earned 10 but only spend 1 when the Southern on the other hand earn 10 and spend 11. Because of the nature in Southern part was about the entertainment and economic, when Northern on the others hand are about politics. So Honda have to considers the different in lifestyle and potential to making the right move in the market, consider carefully which product should go to which market. Honda also needs to know about the differences between urban areas and rural areas and its income before selling their products. Vietnam market with the tendency prefers Motorcycles over Automobile so Honda also needs to learn about the customers segments as well. The technological factors play a big role in the Automobile business. Although Honda have spent a lot of money in the Research & Development. They already have the modern technology and the product that can meet its requirement but due to the advance of technological world, Honda still needs to pay attention at this part at all time. According to Honda main website, they are now have been developing Cutting-edge technology to maximize the space and making the consumers more comfortable with their products. Hondas also famous about the Fuel Injection system, which can help their products minimize the use of fuel and still maintain the performance of the products. Through this technology, Honda also develop a product friendly with environment recently and they are still doing the research in order to upgrade their product to be more friendly with the environment which can win the heart of anyone and any government. Honda have to pay attention on the GDP and income per capita of the Vietnamese market and people because by looking at that figure Honda can estimate the standard living of people in Vietnam. Then come up with different pricing strategy that can effect on the consumer attention. But Honda also has learned about the inflation rates, tax rates or CPI of Vietnamese market. To Consider the fact about Vietnam current situation and Vietnamese people current state, whether they can afford the company product or not, the making plan on the how to encounter with this problem and how to making it better in the future. For example: according to the GSO the inflation rates of Vietnam recent years were: 6.52% in 2009, 11.75% in 2010, 18.13% in 2011, and 6.81% in

Technological

Economic

Environment

Political

Legal

Ethical

Demographic

2012. By looking at this combine with the others sources of information we can know that the inflation rates are suffering the impact of the financial crisis and in 2012 the government have already balance it, which can be result in the increase in the consumption of people (CPI). According to the GSO, the CPI in mid- 2012 have raise above average for the last 3 years and this was a good sign telling Honda that this Market is on the ways of gaining back their growth rates. The environment in Vietnam that can affect Honda was the flood that can happen every year making it impossible for deliver the products and that time. So Honda needs to acknowledge the flooding time and the place that usually suffer it. Making the backup plant for transportation or delivering schedule. Honda also needs to look at the Vietnam terrain to be able to produce their products suitable with the terrain in Vietnam, avoid the low chassis that usually cannot move freely in the Vietnam road. The political central in Vietnam was the Capital city Hanoi. Most of the political activities are being run in this particular city so while develop their products Honda also need to focus on this city and advertise here, making eventsetc. to gain the government support or attention. Recent years when Vietnam and Japan already in a close business relationship and even closer when Vietnam joined the WTO. Vietnam also uses the ODA funds of Japan so that also means the operation of Honda in Vietnam are more and easier than it is before. Not to mention the recent issues with China having both Japan and Vietnam rage about the China government action which result in the Japan draw many of their project and funds out of China and invest it in Vietnam, strengthen the relationship between 2 country which helping the Honda gain more competitive advantage over other foreign competitors. Vietnam already opens up the market but the government is still a communist party so the government itself has a really big effect upon the market. Honda need to pay attention and maintain the relationship with the government in case of any policy has been publishing that can effect on Honda. In the Automobile sectors the importing tax policy of automobile into Vietnam is still very high so Honda still need to develop their product in the factory that they already have here better than importing and may be considering expand the Automobile factory more. Honda has created the comfortable working environment for their employees. Treating them with dignity and not only that they have also treated their employees fairly by allow the employees to have contribution, ideas or feedback to the company. Combine with trick training program, clear promotion policy. Hondas products are now have reduce the fuel put out into the environment and they are more and more responsible by invest in research the friendly environment products/fuels that can protect not only the people but also the environment as well. This is the divide into different segment or to be more specific: age, gender, incomeetc. These are the things that differentiate the customers of Honda

into different types that suitable for different products. For example, with age, young people have the tendency on sport design and cheap price, with good engine. This people suitable with the Waves products in the motorcycles sectors and about the Automobile if they can afford it, they can have some things that consider more about the design like a civic. But remember that most of the people that can afford the car in Vietnam were not youngster but the people already have stable job and paycheck, most of them buy the Honda product because of the quality and the good engine that the company provides. But some of them prefer the design; this was the segment that needs to be differentiated. Porter 5 forces:

(Michael E. Porter, 1979) Threat of substitution This can be consider as a low threats because Honda already have many kinds of products that can satisfy with many types of customers like I have already mention before. Moreover, this substitute if it has would be a complete new kind of product that can change the tide of the games a new substitution for Automobile which means using different kind of fuel.etc. This likely to happen because now Honda already research a lot about to have a new kind of product like that and the others has to but in the near future that kind of product will not likely to occur. This referring to the new competitors that can penetrate the market

Threat of New entrance

Bargaining power of suppliers

Bargaining power of Customers

Rivalry among currently competitors

and take over the market share by its product. But this was really difficult because now in the Vietnam market, both Automobile and Motorcycles business are already saturation and the same goes with others market in the world. Honda already have the stable sources of supply and Car manufacturer industry is quite big and the feature of the product which has been develop by others (outsourcing) can be easily get due to the high demand of the market making many organization work in this field. But in order to make sure the production rates, Honda still need to assure about the supply sources. The Vietnam market now has much different car manufacturer company and the competitions here are very high. So the customers have many choice to choose from but this was also the problem for Honda because there are so many product in the market that they have to compete so they cannot deal with all of them but only focusing on produce some of the products that they can see fit with the income and the culture of Vietnam people, which means there are a lot of others customers with different taste that Honda cannot cover. As I have already mention before the competition in this market were very high. Because each of the manufacturer have focusing on specific types of products but not cover too many of them to avoid the possible lost and every companies want to do their best to gain more market share or profit than the others making it hard for everyone. . For instance, these are some of the Honda Current competitors Toyota, Ford, General Motors, Volkswagen A, Yamaha Motor Co., Ltd.Audi AG, Subaru, Hyundai Motor Co.,Bajaj Auto Ltd.,TVS Motor Company Limited,Mahindra & Mahindra, Ltd. Bayerische Motoren Werke AG (BMW Group). All of these companies are always keep innovation, evolve a research to stay effective and competitive in this market.

1.4 Carry out organizational (Honda) auditing and analysis of external factors that affecting the marketing planning in Vietnam. The marketing audit is basically the examination of the companys marketing environments and activities to find out whats wrong with it and what were its opportunities and how to improve it. Its an extensive, systematic, independence and regular examination process of a companys marketing activities. Honda also needs this process to assess their marketing plan and improve it, make it work effectively and efficiently. Marketing audit contains the following components:

Micro and Macro marketing environment Marketing strategies Marketing systems Marketing organization Marketing function

Marketing environment: These factors I have already analyze above in the SWOT analysis, STEEPLED and Porter 5 forces. It already contains the needed information and analysis about the Hondas marketing environment. Marketing Strategy Audit: First of all, we need to review the marketing objectives of Honda Automobile in Vietnam market. The 1st marketing policy objectives and policy that Honda has apply in Vietnam market was the Product marketing (marketing 1.0) just like I have mention above. These objectives of Honda divided into 4 parts: - Diversify the products, price in all segments of the market - Constantly changing the design, color and model. - Maintain and up hold the reputation, quality of Hondas products - Committed that the product will be friendly with the environment In the 1st objectives, diversify the products; Hondas have put out a good marketing strategy (objectives) in order to renew themselves, increase the sales, expanding the market share and increase the competitiveness of them. Making the Automobile products can fit with many type of age, gender, financial situation of many families. Combine with the design, color and model has been constantly changes, create more choice for the customers. This strategy here is quite good and work well in the Vietnamese market because the main objectives of the Company was to sales and infiltrated the Automobile industry of Vietnam more, increase the market share of Honda Automobile in this market. This strategy certainly has some good effect upon the main objectives and help Honda to achieve the main objectives faster. The next strategy of Honda was the pricing strategy. Ever since Honda Automobile comes into Vietnam market, Honda has introduced many new car models, upgrading the old model and always ahead of the sales in Vietnam market. This success not only comes from the products strategy but also rely on the valuation technique Honda. The Honda products always getting evaluated with the right price with most of their customers, from the popular product meets the essential needs to go to the high quality products with a very

high price in order to satisfy demand, reflecting the level of the user. Hondas pricing strategy was aiming at their targeted consumers, which is the middle-class people. These people were the main customers of the company throughout all these years. However, Honda not going to stop at this point, they already have the high class products imported from the other country to penetrate the high-class people, who are willing to pay a substantial amount of money for what they want. The Honda's pricing strategy is extremely correct and the most obvious proof that they had been in Vietnam for a long time, after many years of business, Honda never become an old brand that the company continues to grow, even on an accounting for more market share. Even in the time of crisis, when their products cannot sales as much as it was before, they have immediately introduce the new kind of product (City model) with the low prices and still have fair model, many option colors, lower the consumption level of fuel, which really suitable for the time of crisis. In summary, the marketing objectives and strategy of Honda are going into the right ways which can help them a lot in complete the main objectives is to gain more market share become the 1st in Automobile just like in Motorcycles. Marketing systems: this was about the procedures to form a marketing plans and how Honda manage and control of these plans. First in order to form marketing plans, Hondas going to need to information of the market and related information. So basically the marketing information system here is a management information system (MIS) designed to support marketing decision making.

Marketing Planning

Distribute information

Assess the information needs

Analyze the given information

Internal Database

Marketing Research

Marketing Intelligence

Market environment

After evaluate and characterizing the information in market, it will be distributing not only for the marketing departments but also others departments within the company as well. Because it just like I have already analyze, marketing cannot be isolated with the company or others departments. Then it comes to the planning system which contains the process of implementing the marketing plans/strategy. Its related with the corporate objectives and business-level objectives as well, because in order to make a marketing plan that can really help the Company, it has to link with the corporate objectives and different business level objectives to come up with the proper plans and objectives of its own.

Corporate mission statement (qualitative and philosophical)

Corporate (business) objectives (Quantifies and operationalises with the mission statement) Funcitonal Objectives (marketing) (Quantiative, measurables)

After conduct and link the marketing objectives and plan with the overall objectives. Honda also needs to formulate them for specific market situations, link them with the market trends, customers and other internal sources. Then comes to the last part which was controlling and implementing the marketing plans, in this part Honda need to supervise, control and making proper alteration if possible when the marketing plan is being implemented to assure the marketing plan can reach its objectives. Marketing organization:

This part was to assess the capability of organization to implement the plan. Like I have already mentioned and analyze many times above, Honda using market-led marketing plan which driven by the customers and its Honda aim to satisfy the customers as well. Furthermore, Honda brand was very strong in Vietnam market making it qualify enough to implement the plan, not to mention the strong financial assets, incomesetc. of the company itself making it sufficient to carry out the plan, with the well trained staff, with knowledge of the market and experienced. Hondas fully capable of carry out the marketing plan. Marketing function: Hondas marketing plan function was to gives the customers the satisfy with fully access with the different types of Automobile with different prices from low to high comes with different version and color, model. These products like I have mention before, is made specifically for certain kind of customers. Each of these products has been suitable with different kind of customers. New Honda City 2013 1.5MT price: 540 million VN New Honda City 2013 1.5AT price: 580 million VN New 2013 Honda Civic 1.8MT value: 725,000,000 VN New Honda Civic 2013 1.8AT price: 780 million VN New Honda Civic 2013 2.0AT price: 860 million VN New Honda CR-V 2013 2.0AT value: 998,000,000 VND New Honda CR-V 2013 2.4AT price: 1.140,000,000 VND Honda Accord 2.4AT value: 1,435,000,000 VN Honda Accord 3.5AT value: 1,780,000,000 VN The new City has been introduced recently due to financial crisis. So this product has given out into the Vietnam market in order to satisfy the customers in hard time like this. The manufacturing system and distribution channel of Honda was very good and with stores channel all over the country, Honda can assure the products sources for Vietnam market. 2.1 Assess the main barriers of marketing planning. Barrier Confusing tactic and strategy This referring to the misunderstanding between 2 concept tactics and strategy. The strategy here is about the global plan to reach the longterm goal while the tactics is a short-term plan This can be sometimes confusing because of the similarities between them although they may look different but the fact is they all have the common goals that are why they can be easily confuse. For example: Strategy is connect with customers while they comes to the store and increase sales Tactic: offering location based mobile apps on top three

Isolation of the marketing function

Confusing marketing function with concept

Organizational barriers

Lack of in-depth analysis

Confusion between process and output

Lack of knowledge and skills

Lack of Systematic approach

platforms; provide more option for the customers. This is referring to the disconnected of the marketing department or marketing with others part of the company which result in the poor marketing planning and working because theres no connection between the company activities and the marketing activities. For example: the marketing department of Honda does not work with any other department want to promote the SH 150i when the market segment are for the low income people that only prefer Dream or Waves 110 This happen when the marketing concept being confuses with its function. It happen because of the concept of marketing that we thought is only about the advertising product or promoting brand image while the marketing function is much more than that. Its containing the promotion, pricing, financing, distributing, and information gathering.etc. many more which means much more complex than the concept. This was about the lack of viable business model or planning, structuresetc. which can cause Honda cannot function well with the market and cannot reflect it and tall they have was just the function department with no related with market. Organization structure cannot reflecting the market itself making it hard to know about their activities and just work through the pointless function departments. These happen when Honda company conducts a plan and analyze the information not deep enough to making some reasonable consideration. Being easily deceived or misleading by that information or by the environment itself. The processes here were the ways of how things get done or how Honda would have carried it or work it. When on the other hand output was the result of the process itself. We can understand it like this the first things we need was the input processoutput This was also referring to the information gathering systems or many others kind of systems that can be confuse with. This is about the Human resources of the Company (Honda) when they are incapable of carry out the task due to the experiences that they have is not enough or the skills, knowledge they have not sufficient to carry out the task. This happen when the employees of the company are not well trained or not being verify thoroughly. In all Company or organization, they all need a system to control things from the inside or the procedures of how to carry out the worketc. without any specific procedure the

Failure to priorities objectives

Hostile corporate culture

work itself cannot be carry out due to the chaos in the that occur because it does not have any procedures and lets things work freely without control. The company objectives work as the guiding star for the company to follow without any objectives the company will not function because theres no specific aim to head to and no work was given due to the objectives not being priorities and making the loss and impact for the organization as well as the resources that require to complete that objectives. This is referring to the fight and disagreement that occur within the company. Making department and people incapable of working together as a whole but they begin to work alone and try to pull each other to the ground which can make the Organization suffer many losses.

2.2 Examine how Honda Vietnam may overcome barriers to marketing planning. Barrier How to overcome Confusing tactic and strategy First, Honda company need to develop a strategic plan then develops the lower level operational plan. The tactics need to be specify or directive and clearly demonstrate how the staff of the company will jointly achieve the strategy. Isolation of the marketing Honda need to makes the marketing related with the company function departments and objectives, functions etc. so that the marketing can work effectively. The most important things it makes the marketing function close with the customers that it can draw the customers attention and still related with the company. Confusing marketing Honda need to look at the whole organization, not just some pure function with concept activities set only. But it need to be market-focused, relating to many activities and work in the organization itself. Avoid the confusing between these 2 and to be able to do that Honda need to clarify these 2 and take a look at the real function and activities that it carry outs not just doing things according to the concept. Organizational barriers Honda function and structure should being build up to work with the marketplace as a whole because without the good structure. The company only working through the departments and its function which cannot reflect the market and cannot connect with it and results in bankruptcy and loss are inevitable. Lack of in-depth analysis Honda should analyze the information related to the market deeply, also analyze their plan to penetrate the market or deliver new products deeply because it can assure that all the risks, opportunities.etc. are being consider and it actually a plan that

Confusion between process and output

Lack of knowledge and skills

Lack of Systematic approach

Failure to priorities objectives

Hostile corporate culture

already being taking many consideration and can work thoroughly. Or in other words, making an effectives marketing audit to get to know the market, their current stateetc. In order to avoid the confusion in this factors. Honda needs to clarify the characteristics of these components. For example: with the SWOT analysis, the information that Honda can gather was the input, the step to process those information and characterize is the process and the last one was the final analysis which was the output. Honda need to get their eyes on the staff, making sure that the staff/employees was qualify to handle their position. The verification part need to be done closely and good. Then the training program needs to be conduct and analyze thoroughly so that the Employees can actually gain and be better after the training programs. Ensure that the people related to the business have the knowledge and skills to handle the task. In order to prevent this or overcome it, Honda need to conduct a set of written procedures that cover all issues in all areas of the business. By this ways the control and authorities, function,. Of each department, people.etc. of the company being control and work systematically. Honda needs to analyze the impact of those objectives and then evaluate them. What will be the resources that its require, how bad was the impact of them? Then making some adjustment in the company function that makes sure it works according to the objectives and follow it. First the employees need to participate in the company works and support the leaders. Then the leaders itself need to motivate and straighten things out with the staff so that they can work together without any hostility.

Conclusion: I am an assistant research analyst working in a team for a marketing research firm in Vietnam. I am complete the requirement to provide to my team leaders (Tru and Tra) on the following for the coming discussion with the client (Business Development Manager reporting to the Marketing Manager for Honda - Automobile {Vietnam}): Tasks Provide an audit report to aid in formulating a marketing plan for Honda (Automobile) Vietnam base on the following below for the coming discussion: Review the changing perspective in Honda marketing planning. Evaluate Honda capability for planning its future market activity Examine technique for organizational (Honda) auditing and for analyzing external factors that affect marketing planning Carry out organizational (Honda) auditing and analysis of external factors that affecting the marketing planning in Vietnam

Provide slides (30 slides including tables, charts, accompanying notes, etc.) to be used as Presentations notes to the stakeholder on the following matter: Assess the main barriers of marketing planning Examine how Honda Vietnam may overcome barriers to marketing planning

References:

Class Notes
Honda Motor Co., Ltd.. (2012). Honda annual report. Available: http://113.171.224.206/videoplayer/honda2012ar-alle.pdf?ich_u_r_i=cdc7b92f948a37e0515ff38d439961b4&ich_s_t_a_r_t=0&ich_e_n_d=0&ich _k_e_y=1345088912750063402401&ich_t_y_p_e=1&ich_d_i_s_k_i_d=9&ich_u_n. Last accessed 12th Aug 2013. Michael E. Porte. (1979). Porter's Five Forces. Available: http://vectorstudy.com/management-theories/porters-five-forces. Last accessed 12th Aug 2013. Phillip Kotler. (2010). Marketing 3.0. Available: https://www.inkling.com/read/marketing-3philip-kotler-1st/chapter-1/table-1-1. Last accessed 12th Aug 2013. Richard T. Pascale. (1984). Perspectives on Strategy: The Real Story Behind Honda's Success. Available: https://faculty.fuqua.duke.edu/~charlesw/s591/BocconiDuke/Papers/new_C12/perspectivesonstrategy.pdf. Last accessed 12th Aug 2013.

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