Posted at 10.02.2018
Honda Motor Company, Ltd is a Japan base international company and named one of the world's leading automobiles and motorcycles manufacturing company (Yang, 1996). Honda is the largest manufacturer on the planet for motorcycles and internal ignition engines also measured by volume, and manufacture above 14 million internal ignition engines (Miller, 2008). According to literature, Japanese businesses usually dominate the Asian market with the most significant share; in addition follow the global ways of be considered a global firm. Firms like Honda Motor Company dominate the study across the manufacturing of automobile business and management disciplines. Honda is Japanese company using its many manufacturing plants throughout the world. The plants are located at Japan, United States, China, Pakistan, Canada, England, Belgium, Brazil, New Zealand, Indonesia, Thailand and Turkey. In 2007, Honda's net sales and operating revenue are:
This paper intends to present the research objectives of creating a new product for Honda Motor Company, while identifying, analyzing and assessing the critical indicators in three tasks of report, task 1 identify quite features of new product such as fuel, economy factor, suspension, engine capacity as well as size, form etc. which meets the expectations of the consumers in South Eastern-Asian Market, also conducting the market analysis, finding the milestones of the dates, presentation and preparation of your action arrange for completing the project of New Product Development, Options for Monitoring and Updating.
Second task of the report discusses the research into marketing field for the merchandise, calculating, agree and arrange for the top resources required for this development project, while adopting different research method, type of data, data analysis techniques, nature and types of resources used because of this project and other possible sources.
In third task, there is analysis of findings of appropriate tool and techniques, plan and development for the right marketing tactics for introducing New Product in South East Asian Market, further development of sufficient measures to monitor and measure the developmental progress. The report is concluded with a proposal and recommendation based on the findings identifying and justifying areas for future research.
Task 1: (a) Identify a research proposal/Identify the introduction of a new product, service or process in terms of overall profitability
Objective of the Production of New Car
First and the foremost objective of the development of product are to maintain the quality. When manufacturing and producing the new product, quality will be significant point of process that can meet the customers' expectation during buying car therefore quality is the target with the best significance.
The high productivity is the second main objective of the introduction of new product. The product will be produced for high and low wages countries with the higher level of comfort.
Flexibility is another essential objective of the development of new product, which refers to the potential to move fast and adequately towards unexpected changes in unstable markets.
Last but not least through the introduction of new product environmental sustainability would be ensured. For this purpose, you can find need of hard and strong efforts in the management of air and water pollutant materials.
The product aims to be provided into South East Asian market; and introduce a Honda product into market it needs to be researched thoroughly. The marketing research of this product involves using different models such as Porter's 5 Forces and PEST for Environmental Analysis for the merchandise. Marketing is an important component of the management and success of something largely is determined by the appropriate marketing strategy. The study study of the project involves finding the market environment for the new product and strategies that are required to be adopted for obtaining maximum market share in South East Asian automobile market.
The automobile market in South East Asia continued to grow since currency crisis. In 2005, aggregated demand in Indonesia, Malaysia, the Philippines, and Thailand is 2. 0 X I million units. Moreover, Japanese market has long history of manufacturing in the South East Parts of asia. The financial objective of the development of the new product is to fully capture the South East Asian market by offering a luxurious and comfortable car in lower market price that satisfies the demand of automobiles in the region. The business will incorporate the high quality material in the development of the new product with cost cutting.
The company is launching a fresh product; there is certainly need of improved and comprehensive sales and marketing support and campaign. The merchandise will be created for middle lower class customers with especial functional specification in size and module. The company offers lots of benefits in its new product to enhance the lifestyle degree of target customers. You will discover amount of options and show combinations available in the merchandise. The sales and marketing support and campaign efforts will be used to enumerate the costs and benefits associated with the new product based on a market and customer view and to extract an orderable marketing design strategy that enhances sales and marketing profit for the vehicles in the South East Asia. From the initiation till sale, manufacturers, retailers, suppliers and wholesalers will be involved.
The new product is the Civic Hybrid, it will be a joint project with Tsinghua University and Honda, the car sample has already been tested on the streets of Kaulalampoor as part of a study on fuel consumption. The introduction of new product is resulted as the superior fuel economy of Honda's IMA system. The engine functions in low speed valve with the help of the electric motor, giving it ability of strong acceleration. The brand new product has rapid acceleration and the engine can operate in broadband valve timing mode while the electric motor can be helpful because of this process, producing high result for strong acceleration. With fuel type Regular Gasoline Fuel to operate a vehicle 25 Miles 0. 50 gal costing only $1. 61 featuring improved suspension and the 1. 6 L (97. 6 cu in) DOHC ZC engine with the engine size 1 liter to 1 1. 4 liter.
The development of the new product is tested and after test is preparing to be made for South Eastern Asian market customers with low and medium income scale. For just about any manufacturing fault in the introduction of the new product, the business will be responsible also with the guarantee of six months. The introduction of new product will be direct sold to variety of dealers within Thailand, Malaysia, Indonesia and the Philippine. The clients are able to choose the product either directly from dealers or other market wholesalers.
In the manufacturing of the new product, there exists dependence on high-tech methods and processes. There are involved suppliers of steel and iron parts and other electronic instrumentation, who supply the components for assembling automobiles (Robertson, 1988). In order to make the new product a quality product there is give attention to the efficiency of the production that there is requirement of investing big amount into the development and improvement of the manufacturing process, research and technological creation of the production (Economist Intelligence Unit, 2000). To be able to manufacture the new product, there will be need of machines and tools, speed data creation and data management system software, high power computer, virtual manufacturing and supreme visualization techniques, and advanced building techniques (Maxton, 1994).
Engineering: To meet needs of the industry and of the customer of hybrid civic individual regular Research and Development program and practical development approach for product is conducted that meets the industry changes and customers' requirements. Product was created according to exact stipulation for customer applications employing up to date and hi-tech technology. Therefore the essentials of engineered quality are performed throughout the phase of designing, manufacturing, and customer support service.
Quality Assurance: To be able to assure the quality program, an excellent assurance program is developed particularly to meet the requirements of the product and customers. Moreover, the product quality assurance is in charge of meeting certain requirements and competent of supplying the mandatory credentials and records for first sample, production process, and post-production support. Quality Assurance is alone responsible to preserving the product quality throughout the life span of the product, with all the experienced skills in problem avoidance, analysis and solution techniques.
Laboratory Facilities: The assessment and analysis of steel prior to starting production will be done in laboratories to assure the manipulated chemistry stipulation, as well as metallurgical analysis of prepared products.
Manufacturing: The manufacturing of vehicle equipments and parts, a mechanical multi-station cold extrusion press, a complete selection of CNC lathes, and multi-spindle rotate machines will be utilized throughout the procedure. The used of fully mechanized or semi mechanized machines will depend on the requirements of the production of product. The finishing equipment is specifically designed for products polishing, circuiting and vibratory finishing machines will be utilized for the final preparation of most products prior plating.
Customer Satisfaction: you will see client satisfaction programs that are custom-made in line with the needs of automotive customers and manufacturer needs, the distribution networks. This support will be used to guarantee a target oriented manufacturing program making high levels of client satisfaction possible.
BNET dictionary explains the Marketing or Strategic Analysis as the procedure conducted to formulate strategy for the business enterprise environment within which an organization operates. There are some attributes of such marketing analysis such as through applying the marketing strategic tools, relevant data and information is discovered and evaluated that helps to formulate the strategy, secondly defining and analyzing the external and internal environment and finally range of analytical methods are used in the analysis such as SWOT, PEST and Porter's five forces analysis.
In order to analyze the market structure for the new product of Honda, Porter's 5 Forces Model will be utilized that will assist through identifying the competitive structure of the market for the product.
Bargaining Power of Customers
Southeast Asian market has been dominated by two Japanese automobile leaders Toyota and Honda, but after the entry of other competitors such as South Korea, North America, and Europe, provides more competitive market as it offers the customers with more choices on products. Moreover, Southeast Parts of asia Malaysia and Thailand are those countries where there is monopoly of local automobile manufacturers and local manufacturers are much self sufficient in satisfying the needs of customers. In such market situation and tough competitive market, the neighborhood customers will prefer to choose the local market product due to higher price of foreign product manufacturers. Even though Southeast Asian market is highly competitive, Honda Motor Company with its different brand has maintained the competitiveness of the market having unique pricing positioning.
Bargaining Power of Suppliers
Honda Motor depends upon number of suppliers for the supply of materials and equipments. For the development of new product Honda will purchase materials, other equipments and important parts required for the manufacturing, from many of its suppliers, and depend upon some particular suppliers for specific material and equipments that'll be important to use in the manufacturing of the new product. However, the potential of Honda to transport on with acquired supplies in efficient and affordable way will be difficult and you will be affected by lots of factors, even though many of these are from the control of Honda. These elements will be the suppliers' capability to providing a regular source of supply and Honda's capacity to fight with other users in acquiring the supplies. As a result, Honda can lose its key supplier and it can in particular impact the product manufacturing and raise the costs of the merchandise.
Threat of New Entrants
However, automobile industry is already slow in conditions of state of economy and region like Southeast Asia where there are already local and foreigner automobile manufacturer it is difficult to survive. Alternatively, Honda Motor Company has already been present in the spot with its different other products, the development of new product will create more competitive advantage for the business preventing the threat of new entrants. Besides, you can find wide selection of options for customers with the production of products of different company; the decline in demand can cause the merchandise go fail in terms of high sale.
Threat of Substitute Product
Since the creation of automobile and automobile industry, there's been volume of researches designed to find the substitute of product such as use of natural gas, water, Sunlight, Vegetable oil, and Ethanol in the auto. The continuous research and invention using sunlight and others can cause threat to the new product.
Nature of Revelry/Competition among competitors
With the growing trend of globalization variety of companies is mixed up in market share of global market working in several markets. The globe automobile industry is also influenced by expanded global competition. Southeast Asian market possesses a distinctive place due to nature of automobile market with local and foreign automobile manufacturers providing competitive advantage to the customers. Japanese automobile firms Toyota and Honda will be the best rival in Southeast Asia; moreover, other local manufacturers such as Thailand and Malaysia are laterally create the competitiveness in the market.
PESTEL Framework for the New Product of Honda:
The political conditions in virtually any country affect the strategy and pricing policy of a product of company. The political condition in the Southeast Asia is definitely of diverse nature, and due to diversified nature, the level of political stability is different in several countries. The taxation and pricing is modified by the local government and political figure affect the strategy of a company. The requirement of energy in Southeast Asia in transport sector is 24 % of total share energy consumption and in 2000 the full total consumption for transport sector has accounted for 70 %70 %. Because of high consumption of automobile and low consumption in the manufacturing of the automobile product, the tax charges on the full total sales of product are reduced the local market of Southeast Asia.
Southeast Asian transformation into global economic has provided it opportunity that affect the local economy of the spot. These economical global transformations have changed the institutional governance and organizational structures of the neighborhood economy today. Today automobile market of Southeast Asia with the two Japanese rivalries is world's most divergent market. The neighborhood automobile market of Southeast Asia fundamentally recognizes national business systems along with globalization tendencies making multiple possibilities and opportunities through the participation of global automobile actors in globalization.
The growing global markets that exist in Southeast Asia market has been the international tendencies provide immense opportunities for the global players furthermore there may be more increasing awareness of globalization particularly for important actors in automobile industry of Southeast Asian business systems. While using evolutionary perspective, the new changes in the Southeast Asian market with the emergence of Korean and Chinese automobile company lead to dynamic monetary changes in the auto industry. The merging market of automobile in Thailand is a good example of the globalization and economic growth in the automobile industry as it grew large and showed robust growth even during recession and political turmoil in the united states.
The Southeast Asian countries are together ASEAN forming integration to assist in different spheres such as economics, social and environmental issues. You will find apparent social distinctions one of the countries of Southeast Asian countries; it is informative to understand that some significant diversities one of the Southeast Asian social, specifically considering occurring inevitably in the same fundamental directions in an identical ways.
In Malaysia, there have been ethnic rivalries and an ethnic assenting action policy. Far away like Thailand where Japanese intervention is larger the neighborhood community, to limit the control of ethnic Chinese by encouraging the policy makers to encourage the foreign investors, thus the control of ethnic Chinese was decreased. In Malaysia there can be an important role of FDI (Foreign direct investment) that is available for the political motivation. Malaysia and Thailand, with the major market share in automobile industry are socially different and exceptional; moreover, these exceptions are attributed with the political and financial considerations.
The research in neuro-scientific science and technology has remarkably increased because the revolution in neuro-scientific technology was improved in your community. Along with the diverse nature of automobile market in Southeast Asia, different automobile companies are keen to do research and then for product development using Information and communication technology and other new systems. However, consequently of competitive market in the regions firms are determine to invest a big amount of the revenue in the study and product development which research and development prevent any new entrants in the auto industry in the Southeast Asian market.
The environmental pollution made by the transpiration and automobile vehicles have grown to be the central attention of the governments in Southeast Asia and it has been observing specifically in Thailand where government has passed a regulation according to which no such transportation is allowed to be bought from Bangkok. Furthermore, Malaysian government has also taken step to enhance the environment transparency through imposing law for using less polluted transportation means.
There are certain rule and regulation about the marketing laws and laws on environmental issues in the countries of Southeast Asia. Specifically in Thailand, government appears to upgrade the automobile industry by amending and forming new industrial laws such as Thai government has formulated such policies that attract the foreign inventers in the united states to talk about market competitiveness. Moreover, through the policies government has successfully persuaded international investors, automobile assemblers, to serve in the neighborhood industry and providing them with appropriate market conditions to be successful. Alternatively, Thailand does not have any local car maker which gives immense opportunity to invest in the automobile manufacturing in Thailand as government policies are flexible to provide possibility to foreign company.
Investing in Thai market is also efficient because country with high demand of car and less supply of needs seeks further growth and development. In addition, Thai government also offers sufficient support to industry by means of offering tax incentives and various other dimensions as this industry are contributing greatly to the neighborhood economy of Thailand.
For the manufacturing of the new product, the company will at first step manufacture original equipments and motor vehicle parts.
Car Manufacturing Process
Manufacturing of Motor Part
1st October till
(d) Using an appropriate method of presentation, prepare an action arrange for completing the project of New Product Development. Your plan must include Options for Monitoring and Updating (3. 1c)
Action Arrange for Completing the Project
In order to complete the project on time, every step of car manufacturing process must be performed appropriately on time. The procedure of car manufacturing such as Manufacturing of Motor Part, Chassis, Body, Paint and Interior will be done according to outputs.
Outputs of the report will be the milestone dates according to which project will be completed within 3 days.
Human resourcing plan identifies prepare the workforce who is going to work on the project. The workforce will be prepared prior to the project is initiated, all recruitment, hiring and assigning of work will be done additionally. In this regard, the point of the number of staff and workforce is important to appropriately calculate.
The working timing and working hours are the detrimental point to completing a project. Work will be done during 5 business days, and there are 40 hours available to work on the project.
Execution of Action Plan
To carry out the above mentioned action plan there is certainly need of resourcing people, time, space and equipment related to project.
A team leader is an important component that leads the project, to complete this project according to schedule a team leader will be appointed. The selection of a team leader will be achieved very carefully based on the dependence on the project.
The duration of the manufacturing of the project is 3 days.
A team coordinator will be appointed who will be responsible for organizing and facilitating team meetings and managing the team communications.
Action Plan Focus:
Before starting a process team will communicate to focus on within the next 12 hours
Issue will be selected to create an energy and sense of mission within the team.
Every important point of meeting will be recorded that is provided in "Team Planning Session 1. "
Monitoring and updating is obviously an important step of performing a project. The purpose of monitoring a project is to judge the procedure and time management. There are different methods of monitoring and updating a project such as reports, diaries, finances and meetings.
For monitoring and updating the development project of new product for Honda, reporting is the most appropriate method because reports are neither too much time nor are they aimless. Through writing report outcomes of specific objective can certainly be evaluated.
Expenditure planning is important to take into consideration for monitoring the financial accounts. Through financing method internal financing and external financing the spearhead of most project development and financial benefits related to project can be monitored and evaluated.
There are number of staff required for different field of the project such as Engineers, Lab chemist, technical workforce, Assemblers and fabricators, Commercial and commercial designers, Drafters, Electricians, Engineering technicians, Industrial machinery mechanics and millwrights, Industrial production managers, Machine setters, operators, and tenders-metal and plastic, Machinists, Material moving occupations, Painting and coating workers, construction and maintenance, Tool and die makers, Welding, soldering, and brazing workers. Prior starting the work, the workforce will be trained for focusing on the project efficiently. Staff will be paid for attending the training sessions, and besides that trainers will be from the organizations using their company fields of specialization. The business will provide meals, transportation, and lodging to trainee and trainers both. The total cost of meal, lodging and transport is 2, 330. 73 USD with 233, 073. 08 USD costs on the salary.
c. Explain the Possible Resources of those Resources
The resources necessary for the manufacturing of automobile car includes labors, recycleables, equipment, space, and budget cost. The budget cost of this project will be sponsored by Honda Motor Company of Japan, the space for manufacturing the automobile you can find need of space and automobile manufacturing plant, and this project can be executed in one of those countries where Honda has its automobile manufacturing plant such as Pakistan, United States of America, Malaysia, Japan, China, Canada, England, Belgium, Brazil, New Zealand, Indonesia, Thailand and Turkey (Yip, 2000). Manufacturing another plant will increase the cost of the project as building a car plant will definitely cost $560 million about 50 % of manufacturing facilities of comparable size. Therefore project will be executed in two different countries Thailand and Indonesia because these two countries already have automobile manufacturing plants and will be the countries where product must be sold. For other countries such as Philippine and Malaysia, the auto plants can be built-in these countries for the ease of manufacturing. Labors will be hired because of this project at the area of automobile manufacturing. For hiring the staff, the assistance of third party can be taken for the ease of services to be done. You will find good markets in Japan and China for equipments and other recycleables. Besides Taiwan also provide automobile manufacturing tools and equipments and equipments can be purchased from any of mentioned countries (Tsutsui, 2001).
Task 3: Present and measure the findings in regards to to the original proposal/Plan and agree the implementation of the merchandise, service or process and the measures for monitoring and evaluating success.
a. Using appropriate tools and techniques plan and develop an appropriate marketing
strategy because of this Introduction of New Product in South East Asian Market. (10. 3b)
Marketing strategy is defined to implement the principles to capture the prospective market. In the market Southeast Asia, consumers recognize the consumption of improved fuel economy and reduced exhaust gas. According to the demand of consumers, Honda has planned to introduce such vehicle that is fuel economy and reduced emissions. Honda intends to introduce civic hybrid vehicles to the Southeast Asian market. In 2000, the civic Hybrid car has already been introduced in USA with cool features designed according to it environment and consumers' demand. The civic hybrid was successful and has increased over 570 percent. Today, in USA hybrid vehicles hold a 1% market share with three the latest models of of hybrid vehicles (Alexander, 2009).
This new civic hybrid is likely to be sold in Southeast Asian market having specific environmental features; moreover, Southeast Asian automobile market has enough potential with the increasing demand of cars.
Environmental consideration is becoming an important part car manufacturing and influencing the automobile manufacturing and other managerial decisions. The introduction of new product aims to build up an eco-friendly product according to requirements of environment (Abele et al, 2005). Therefore, the marketing strategy of the new product will be influenced by this factor creating an organizational cultural focusing on environmentally friendly issues.
Five P's represents marketing model used as marketing mix to describe the techniques and mixture for a brand. Five P's are Product, Price, Place, Promotion and People (Kerin, 2008).
Product: The brand new product offered by Honda is a civic hybrid is to be introduced in the Southeast Asian market.
Price: The price tag on the product is set as18, 030. 21 USD.
Place: The place of selling is Southeast Parts of asia viz. , Thailand, Malaysia, Philippines and Indonesia.
Promotion: There would be wide range of promotion used for the advertisement of this new product. Customers will be approached through different method of media such as TV commercial, Internet advertisement, and advertisement direct to consumers.
People: The appointment of staff for this project will be significant because their skills and talent will be incorporated into the product. Therefore, it will ensure that competent and skilled folks are hired on merit base.
b. Develop appropriate measures to monitor and evaluate the marketing Progress
The marketing strategy may be accomplished by evaluating the marketing process properly.
Formally there are two marketing evaluating tools used for controlling the marketing strategy implementation. The foremost is the formal marketing control and second is the external marketing controls (Kotler et al, 2008). The action taken before the implementation of the marketing strategies is formal and input controls and output controls. The output controls are used to ensure that outcomes are achieved with the expected results of implementing the online marketing strategy (Brassington & Pettitt, 2006). There are different measures taken up to evaluate and control the marketing implementation; for the implementation of marketing strategy of new product of Honda, the actions will be required to evaluate the implementation are as follow:
Identification of performance measures of every marketing activities
Internal and time base analysis of marketing activities
Monitoring of performance by management
Monitoring of customers' perception about the performance of marketing implementation (Ferrell & Hartline, 2008).
(c) As a result of Market Analysis in Task 1, what were your findings about the market potential in South East Asian Market?
There are quantity of competition in Southeast Asian market and Honda also possesses a substantial place in the auto market of Southeast Parts of asia. The amount of competitors may cause considerable obstacle to increase sale of the new product but Thailand could be perceived as enriched market due to number of reasons such as existence of Honda and other Japanese firm Toyota which has been competitor of Honda will generate good marketing advantage with one leading competitor who is also competing Honda far away. The supplying of raw material and other equipments are significantly in good hand as Honda has been given amount of suppliers plus some particular suppliers. In respect to suppliers Honda will have advantage to meet its timeline to complete the manufacturing process. Other than this, the constant changing market rates of raw materials can create problem for introducing the merchandise with the high sale expectation if rates of fuel is high in international market. In addition, growing economic condition and stable political scenario provides Honda to enter into market with new product. The legal attributes of Southeast Asian market are significantly competent to upgrade the automobile industry with flexible laws and regulation that induce the investors to enter into industry. Honda has good opportunity to launch new product for Southeast Asian market because it is already familiar with the environmental factors.
(d) Propose Recommendations based on the Findings which identify and justify areas for future research.
The findings of the study are very beneficial to analyze the future development of product in the Southeast Asian market of automobile industry. Marketing is the essential area for any product, and findings of this research study suggest that market analysis of Southeast Asian market needs to be further researched as Southeast Asian markets are enriched and have potential to survive even into economical turmoil situation or recession. Furthermore, competitive environment created due to amounts of rivals and options for consumers make the neighborhood industry to invite the foreign investors that can contribute in the economy of local market.