Establishing an International Marketing plan for Honda PDF

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HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES - INFORMATION TECHNOLOGY FACULTY OF INTERNATIONAL BUSINESS ADMINISTRATION ---------***--------FINAL GROUP REPORTESTABLISHING AN INTERNATIONAL MARKETING PLANFOR HONDA TO PRNETRATE VIETNAM MARKET FROM 2021TO 2023Course: 2020 – 2021HCMC, June /Subject: I...

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HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES - INFORMATION TECHNOLOGY FACULTY OF INTERNATIONAL BUSINESS ADMINISTRATION ---------***--------

FINAL GROUP REPORT

ESTABLISHING AN INTERNATIONAL MARKETING PLAN FOR HONDA TO PRNETRATE VIETNAM MARKET FROM 2021 TO 2023 Course: 2020 – 2021

HCMC, June /2021

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Subject: International Marketing

TABLE OF CONTENT 1. Executive Summary......................................................................................................1 2. Present Marketing Situation........................................................................................2 2.1 Hitting the customer’s psychology............................................................................2 2.2 Product variety..........................................................................................................3 2.3 Massive communication and promotions..................................................................3 2.4 “I love Vietnam” and sympathy from customers.......................................................4 3- International marketing macroenvironment..............................................................4 3.1 Political.....................................................................................................................5 3.2 Economic..................................................................................................................5 3.3 Social........................................................................................................................6 3.4 Technological............................................................................................................6 3.5 Environmental...........................................................................................................7 3.6 Legal.........................................................................................................................8 4. International marketing microenvironment...............................................................8 4.1 Competitive analysis.................................................................................................8 4.2 Suppliers.................................................................................................................10 4.3 Consumers...............................................................................................................10 5. SWOT Ananlysis.........................................................................................................11 5.1 Strengths..................................................................................................................11 5.2 Weaknesses..............................................................................................................12 5.3 Opportunities...........................................................................................................13 5.4 Threats..................................................................................................................... 13 6. International Strategic Planning of STP...................................................................14

6.1 Segmentation...........................................................................................................14 6.2 Targeting.................................................................................................................15 6.3 Positioning..............................................................................................................15 7. Honda's strategy to penetrate the Vietnamese market.............................................17 7.1 Low-cost strategy....................................................................................................17 7.2 Differentiation strategy............................................................................................18 8. Marketing strategy concepts (Adaptation / Standardization, Adapted standardization)..............................................................................................................19 9. The International Marketing Objectives...................................................................19 10. Recommending international marketing strategy solution....................................20

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Subject: International Marketing

1. Executive Summary Motorcycles have recently become the most popular mode of transportation in Vietnam. Currently, there are over 21 million motorcycles in circulation, with an average of four Vietnamese people per motorcycle and popular brand names such as Honda, Yamaha, Sym, and Suzuki..., meeting approximately 90 percent of Vietnamese travel demand. With the growth of the Vietnamese economy, the demand for motorbikes is increasing. As a result, competition among motorcycle manufacturers in Vietnam is becoming increasingly fierce. In order to attract customers while also satisfying their needs regarding product quality, reasonable price, fashion style,... Motorcycle manufacturers have implemented numerous marketing strategies because marketing management is responsible for attracting and building relationships with customers by creating customer value and satisfaction so that the organization can sell as many products as possible and, more importantly, at a higher rate than its competitors. However, it is difficult for any organization to create a successful marketing plan because the development of the marketing plan is influenced by situation analysis, which provides a collection of relevant market information at both the micro and macro levels of an organization. Among motorcycles makers, Honda Vietnam makes a huge effort to remain their brand name and ensure the quality of product with a reasonable price. And it is said that Honda motorcycles always take up the leading market shares in Vietnam making Honda to be the leading company in motorbike industry. Honda Vietnam, a company that primarily supplies motorbikes and cars in Vietnam, must be mentioned. Honda has attracted a large number of customers and earned the trust of the entire country. Honda is the market leader in the Vietnamese motorcycle market. Since its entry into this market, Honda's products have been well received by the Vietnamese people, and the majority of Vietnamese have had the opportunity to ride a Honda motorcycle at some point in their lives. Honda’s history, Soichiro Honda founded Honda in 1946 and began manufacturing motorcycles in Japan. Honda began expanding its business in the United States in 1959, and has since 1

gradually expanded throughout the world. Honda began selling automobiles in 1963 and has since significantly expanded its business from motorcycles and automobiles to power equipment, aircraft, and robots. Honda is now a globally recognized brand that has grown to become one of the world's most powerful corporations. In 1996, Honda entered the Vietnamese market. The first plant in Vietnam was established in 1997 (B. Thi, & X. Thi 2009), and Honda started manufacturing at this time. 2. Present Marketing Situation Vietnamese people are certainly familiar with Honda-branded motorbikes, every 8 out of 10 vehicles carry this brand when on the road. For this brand from the land of cherry blossoms – Honda is a motorbike company that understands the psychology of the countries they visit, especially in Vietnam, Honda has gained a huge market share. Honda's products are famous for being durable and extremely good quality, hitting the hearts of Vietnamese people. Some products can be mentioned such as: Wave, Future, Lead, AirBlade, etc., has gained a large number of users, loved and used by many people. Honda's main marketing strategy is "Coverage to all generations" which has been implemented very well and very successfully in Vietnam. 2.1 Hitting the customer’s psychology Honda's current marketing strategy is very successful and more successful than competitors. Honda comes from a country that is said to be "Meticulous to every detail", so as soon as it entered the Vietnamese market, Honda immediately won the hearts of customers. Honda is very smart when understanding the psychology "Comfort is better than pride" of Vietnamese customers, so it hit that mentality. That also shows Honda has researched very carefully before entering in this market. Honda always tries its best to bring the highest quality products as well as longevity. Besides, there is a huge demand for motorbikes in Vietnam. Just like natural needs such as food, clothing and shelter, means of transport are also indispensable for Vietnamese 2

people in today's life. Nowadays, motorbikes in Vietnam are a popular means of transport and also the main means of transportation of the people. A family has 2 - 3 motorbikes in the house. In addition, for the average income of Vietnamese people today, motorbike is the most suitable choice – it has a relatively affordable price in line with the average salary of Vietnamese people. In recent years, the motorcycle market has become more and more diverse in terms of models, the demand for changing has also increased significantly, but people still want reasonable prices and durability. Honda recognizes these trends and has also upgraded as well as producing new models. 2.2 Product variety As everyone knows, each Honda’s motorbike has different characteristics to suit all customer requirements. A typical example is the Wave motorbike – a long-term motorbike in Vietnam. For customers who prefer simple, unfussy designs, they choose Wave Alpha. In contrast, Wave S has a more powerful design and fuel-efficient, etc. Therefore, creating for users to have many choices in the same product line. In addition, Honda's product lines are also aimed at people with an average income, completely suitable for every Vietnamese people. Honda has motorcycles with an average price from 6 - 20 million VND, targeting low-income people who need a means of transportation or for a living (Wave, Future, etc.). The next segment is people with stable and fairly high incomes, or young people looking for their own style and showing personality. This segment includes both manual transmission and auto transmission motorcycle with prices ranging from 20 50 million VND (AirBlade, Lead, etc.). Besides, Honda also targets the high-end segment with luxurious, classy cars that also partly show their social status. These cars often cost over 50 million VND, for example: SH, Vario, PCX, etc. 2.3 Massive communication and promotions It is undeniable that Honda is a motorcycle brand that is very invested in advertising from television advertising to outside advertising. It is not difficult to come across advertisements for Honda's new models on the road, or simply propaganda about traffic 3

safety. Moreover, Honda's strength is advertising on television with images taken care of by Honda, hitting the psychology of young Vietnamese people. In addition to aggressive advertising, promotions are also Honda's strong point. This is also Honda's most successful promotional campaign. Honda always offers preferential prices when buying a car such as a free helmet, support for registration fees, and periodic maintenance at Honda centers without paying. This strategy is very satisfied with customers and it generates positive feedback from the public. 2.4 “I love Vietnam” and sympathy from customers “I love Vietnam” is the slogan of Honda Vietnam. Honda's motorbikes have been with Vietnamese people from the 70s to today's modern models. Not stopping there, Honda cooperated with a Vietnamese television station to launch a series of programs "I love Vietnam" with the aim of increasing traffic safety awareness in Vietnam. This program is widely spread on television and also on the Internet with great coverage nationwide. Honda wishes to be able to create sympathy with customers, increase reliability and "pin" in the subconscious about a clean brand, increasing the level of brand recognition. In short, Honda's marketing strategy focuses on many types of motorbikes to help Vietnamese customers have many choices. The early products are Honda Cub 50, Cub 70, Super Cub motorcycles, etc., have really conquered the trust of Vietnamese people with the quality and convenience of those products. Vietnamese customers know about motorbikes that are brought by Honda Corporation, even people call motorbikes is Honda. Honda motorcycles always give Vietnamese customers a sense of security, confidence in the quality and durability of the vehicle. Honda has completely conquered customers since participating in the research and market segmentation process, so that today Honda has captured a market share of more than 60% in Vietnam.

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3- International marketing macroenvironment PESTLE is a system or device used by advertisers to analyze natural external factors affecting a company. Its results are used to recognize the dangers and shortcomings of using SWOT analysis. 3.1 Political Today, the problem of traffic congestion at rush hour is always a painful problem in society. This problem is caused by many reasons, one of which is the excessive use of personal motorbikes and the low culture of motorbike riding. The government aims at policies ranging from restricting to banning the use of motorbikes. This policy has created great difficulties for the motorcycle industry in general and Honda company in particular. The Government and ministries in the fight against the COVID-19 pandemic understand the difficulty of businesses in this situation. Therefore, the government has issued timely support policies. The issuance of Decree 41/2020 / ND-CP on the extension and postponement of tax payment, land rent, production and business support and disbursement of public investment capital. In the coming time, the Government and ministries and branches will have similar and timely policies to be able to support businesses in difficult times (HondaVietNam, 2020). The timely support of the Government has helped Honda company somewhat reduce the burden when business is difficult during the Covid-19. 3.2 Economic Vietnam's economy continues to face many challenges in the context of the unusual development of the Covid-19 epidemic. Our country's economy is affected by many factors such as financial risks, the decline and shrinking of household and business income while increasing unemployment pressure, climate change, etc (Nguyen, 2021).

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Honda's Vietnam market capacity in 2020 will reach more than 3.2 million vehicles, down about 3.1% compared to the previous period. In which, the company's sales reached nearly 2.6 million vehicles, up 0.5% compared to 2019. The market share reached 79.7%. In 2021, due to the impact of Covid-19, people will lose their jobs, mainly spending on necessary products, so the motorcycle market's output will be affected quite a lot (HondaVietNam, 2020). The market demand for motorcycles has decreased. This has a significant impact on the company's annual motorcycle consumption. 3.3 Social The vast majority of Vietnamese people, after a period of attachment to the use of motorbikes, form a motorcycle culture. Nowadays, wherever they go near or far, they use motorbikes, do not like to walk, do not like to use alternative means. Therefore, the demand for buying and using motorbikes in Vietnam still tends to continue to grow. Nowadays, Vietnamese consumers is to prioritize using genuine products with guaranteed quality, and do not like using Chinese goods. This is a favorable condition to eliminate Chinese Honda manufacturers from the country, and at the same time reduce competitors in this market. The increasing situation of air pollution has caused the management agencies to come up with many solutions to control emissions into the environment for both cars and motorbikes. Therefore, more and more people are choosing electric cars to replace traditional Honda cars by modern technology and minimizing negative impacts on the environment (Autobikes, 2020). Traditional vehicles have higher operating costs than electric vehicles including fuel and repair costs. The future trend of vehicle transformation could create a new era for electric vehicles. This will hinder the development of the domestic motorcycle industry. However, long distance travel between the two places still requires the use of motorbikes, because electric vehicles need to be charged and cannot go far.

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3.4 Technological Today's technology is developing more and more advertising products, the function of the product must also change in a more technological way. Honda Company has continuously launched models that apply modern technologies such as bluetooth connection with My Honda + application, new generation intelligent engine eSP +, torque control system, the Honda SMART Key smart lock system has helped to perfect the products. At the same time, satisfy the increasing demand of customers to experience new products integrated with technology (HondaVietnam, 2020). Honda Company is one of the pioneer manufacturers in technological innovation, applying modern technologies to its products. As social networking and e-commerce channels develop day by day, it is easier to advertise products to consumers via Facebook, Tiktok, Youtube, etc. In November 2019 Honda officially kicked off the series of event "Ho Chi Minh City Balloon - Honda Always for You" in 4 big cities such as Ho Chi Minh City, Can Tho, Da Nang and Hanoi. With the participation of many famous singers, it has attracted a lot of young customers to participate and experience, both advertise products and gain trust from customers. Young people are a big potential Honda customer. Honda has adopted technology to bring its product information to customers in the fastest and most effective way. 3.5 Environmental During the time of social distancing to combat the COVID-19 pandemic, pollution indicators have dropped significantly. This proves that car exhaust is a source of environmental pollution. In the near future, the Department of Transport of Ho Chi Minh City will make a proposal to the City People's Committee on a roadmap to control motorcycle emissions in the near future (Dung, 2020). Understanding the problem, Honda has integrated for its products technology to limit CO2 emissions, both saving raw materials and meeting the needs of environmental protection for customers.

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Competition "Eco-driving with fuel economy" with the effect "How many kilometers can you go with 1 liter of gasoline?" held in August 2020, the competition attracted 189 teams competing in the general circle. The contest is a place for young people to think creatively, exchange and learn about techniques and technologies, and put ideas into practice (HondaVietnam, 2020). This helps the company to come up with ideas within the limit of equipment equipment from motor vehicles, promoting the movement of energy saving and environmental protection. Implement social activities that both contribute to environmental protection and promote the development of the brand name and enhance the company's reputation. 3.6 Legal Our country has joined the convention on intellectual property rights, but the accompanying legal system is still not effective and complete. Therefore, stealing ideas and copying product designs in our country is still too common. On the motorcycle market today, it is easy to see some cases of copying the product models of famous car manufacturers and selling them at a cheaper price than the real thing. The lack of completeness in the laws related to intellectual property rights, causes great difficulties for companies producing mainstream products, leads to loss of product value and damages the company's reputation. 4. International marketing microenvironment 4.1 Competitive analysis Competition is an unavoidable issue in a market economy that every corporation must deal with. Regardless of the industry in which a company operates, competition is an unavoidable part of its existence and development, and Honda Vietnam is no exceptionIn recent years, a large number of suppliers of cars and motorcycles in Vietnam have emerged, d...