honda amaze

Running Head: UNDERSTANDING AND EXECUTING EFFECTIVE CUSTOMER COMMUNICATIONi

DEEPESH ISSAC GUNIKA KOCHAR JATIN LUTHRA KANIKANAVPREET SINGH

Table of Contents

EXECUTIVE SUMMARY vi1 INTRODUCTION 1

1.1 Company Profile1.2 Features

1.2.1Design 1.2.2 Cabin 1.2.3 New Engine

11234

2 LITERATURE REVIEW 53 METHODOLOGY

3.1 Market Research3.2 SPSS Analysis

667

4 FINDINGS4.1 Sales Network4.2 Growth and Market Research4.3 Competitive Fators4.4 SWOT Analysis

889910

5 CONCLUSION5.1 BCG Matrix Analysis5.2 Marketing Strategy5.3 Segmentation, Targeting and Positioning5.4 Point of Parity5.5 Price5.6 Status in Company’s Brand Portfolio

13131517181919

6 RECOMMENDATIONS6.1 SPSS Output Analysis

2324

7 BIBLIOGRAPHY 26

Running Head: UNDERSTANDING AND EXECUTING EFFECTIVE CUSTOMER COMMUNICATIONii

Executive Summary

This analysis focuses on the growth, future prospects and competitor analysis of the diesel variant of the newly launched sedan, Honda Amaze. The automotive industry is massive, competitive, and it is expected to undergo major restructuring in the near future due to globalization and decreasing oil reserves due to which the demand for petrol substitutes could rise and hence the demand for diesel engines and that too efficient ones.

The report begins with defining the features of the new sedan and what all changes have been brought in the technology by Honda to improve the efficiency and mileage of the car. This is followed by defining the methodology which has been used in the report to conclude and support the argument that how the sedan is better than its competitive models. The methodology adopted for the analysis uses the statistical techniques which have been applied on the market survey conducted on a sample. Various other qualitative tools have used to support the conclusions drawn from the techniques.

Honda Amaze was marketed successfully because of the already existing sale network of HCIL which has helped it to compete against the top selling sedan in its segment i.e. Swift Dzire. This has also helped Amaze in capturing a larger market share even though the market was experiencing a slowdown due to various macro economic factors. Furthermore Honda’s efficient diesel engine is another factor that has boosted the sales of the new sedan.

Even though Honda Amaze is successfully capturing the market there is a scope of improvement that can be implemented by finding the gaps because of which a SWOT analysis was also carried out. Apart from SWOT the BCG matrix helps in identifying the current stage in which the product is and has helped Honda to implement the various strategies that help a product to progress through various stages of its life cycle.

The research paper also provides an insight of the various marketing strategies adopted by Honda to target the right set of customers and follow the promotion strategies

Running Head: UNDERSTANDING AND EXECUTING EFFECTIVE CUSTOMER COMMUNICATIONiii

accordingly which can further help in increasing the market share of Amaze and can generate more revenue.

Finally the statistical tools have helped in analyzing the data and to suggest

recommendations based on the customer perspective.

Running Head: UNDERSTANDING AND EXECUTING EFFECTIVE CUSTOMER COMMUNICATION1

Introduction

Retailing is a distribution channel in which a retailer (reseller) is selling goods to the final

consumer which were bought from a manufacturer/supplier/distributor, without bringing

any significant changes to the characteristic of the goods.

Retailing has been beneficial to both the producers and the consumers. If it has helped the

producers to reach their target markets then it has also helped the consumers by providing

them with the opportunity to purchase wide variety of products from convenient

locations. Retailing can be classified into two categories named as unorganized retail and

organized retail.

Source: CRISIL Research

Unorganized Retail

Goods sold by small retailers under the traditional formats like kirana shops, kiosks and

vendors refer to as unorganized retailing.

Organized Retail

When consumers can buy goods from a similar purchase environment across more than

one physical location can be referred to as organized retailing.

levels of organized retail.

Following are the three levels at which organized retail can operate:


Level I: Specialty stores catering to a particular category of products like food and grocery, apparel and accessories, footwear, home decor and furnishing, etc.

Level II: A departmental store, supermarket or a hypermarket catering to two or more category of products mentioned in the above list.

Level III: A mall which is agglomeration of departmental stores, supermarkets and specialty stores.

Levels of retail:

Source: CRISIL Research

The project will cover analysis of the concerned brand – its growth, market share,

competitors, customers’ perception, opportunities/threats, status in the company’s brand

portfolio, strategies for future growth, etc.

Company Profile


Reliance Retail India Ltd., (HCIL) is a leading manufacturer of premium cars in India. The company was established in 1995 with a commitment to provide Honda’s latest passenger car models and technologies, to the Indian customers. The company is a subsidiary of Honda Motor Co. Ltd., Japan.

Features of Honda Amaze


source: https://www.hondacarindia.com/

design.

This latest addition to the Honda India family hit the roads in April 2013. And in ad dition to the new one-and-half litre, i-DTEC diesel engine, it also sports a slightly retuned version of the 1.2-litre petrol engine that is currently being offered in the Brio.

The Amaze, is already new, though it is based on the Brio or is rather a clone with a big boot. But when Honda took a bunch of Indian journalists to test drive the Amaze at its test facility in Motegi Japan, the focus was more on the fact that it will be the new diesel engine version. Rightfully so, after all Honda will finally crack the sub-four-metre and sub-1.5-litre diesel engine category, taking on competitors like the Maruti Suzuki Swift DZire and the Tata Indigo CS.

The real story of the Amaze’s design starts once you walk past the B-pillar. The rest of the front is identical to the Brio. The rear half of the Amaze is all new. Unlike the Brio’s near parallel to the road roof, the Amaze’s roof slopes gradually down where it meets the rear glass and then slopes sharply down to the boot lid. The boot lid itself is typically stubby and ends abruptly, a characteristic of most sub-four-metre sedans.

But the best part of the Amaze is that the design doesn’t give it an ungainly stance. There still seems to be a certain planned, purposeful flourish to the design. Aiding this visual perception is the addition of a second belt-line that starts where the first fades and then merges neatly into the tail lamp. At the rear, the tail-lamps are adequately large to abet the healthy sedan look. There are a few obvious design cues that have been taken from the current City and its Arrow Shot form.


The rear door design has changed in the Amaze compared to the Brio, due to the new roof and rear design. There is also the addition of a quarter glass at the rear. The stubby lid hides a massive boot for a sub-four-metre sedan.

cabin.


Overall, the Amaze’s cab-forward design is still very hatch-like from the front, but some clever lines at the sides and some key design elements at the rear manage to make it much less cumbersome than the Suzuki Swift DZire. But much of its dimensions and design have been chosen to eventually benefit in improving the practicality of the car for the user.

Take, for example, the fact that the wheelbase has been enhanced by 60mm to 2,405mm compared to the Brio’s 2,345mm. The Amaze’s total length is 3,990mm, width is 1,680mm and overall height is 1,500mm. The increased dimensions go on to improve the space inside the Amaze’s cabin.

It is difficult to fully appreciate the amount of legroom and knee room that Honda engineers have managed to liberate from the increased wheelbase until you sit at the rear bench of the new car. With a six-footer at the wheel, there was still room for the rear passenger of average build to sit more than comfortably, without his knees scrapping the front bucket seats back rest.


The cabin of the Amaze is, however, a very familiar place. Most of the interior is borrowed from the Brio hatch. But you can expect differentiators like better upholstery, a different interior colour-theme combo, some chrome bits thrown in and maybe some more storage options. The rear bench squabs may also be angled differently to enable a more relaxed sitting posture.

The rest of the Amaze is likely to be shared, common parts from the Brio. That should enable Honda to save on costs and keep the price of the new sedan competitive.

new engine.

Honda’s 1.5-litre i-DTEC motor for India uses the same architecture as the 1.6 (recently launched in Europe) and comes with the same sophisticated hardware to reduce weight and friction. The only differences are that the Indian version has a smaller, fixed-geometry turbo (FGT) and no Diesel Particulate Filter (DPF), which is not needed in India. The 1498cc motor shares its pistons with the 1.6 (the bore is the same) and hence it is only the stroke that has been reduced to bring the capacity below the critical 1.5-litre mark (to qualify as a small car engine and gain excise benefits). Honda claims this engine is the lightest diesel in its class and a host of weight-saving features have been used, like a thin-walled aluminum block, an aluminium head and lightweight cast-iron cylinder liners.

Because it's an all-aluminum diesel, significant countermeasures were needed to cut down on noise. Honda has stiffened the crankcase and opted for liquid-filled engine



mounts to reduce vibrations, but despite these tweaks, the engine remains is far from the most silent in its class.

Also of interest is the fact that the engine has been designed to accommodate a variable-geometry turbo (VGT), so you can expect a more powerful version of this engine to power the next-generation City too.

Literature Review

The automobile industry has come of age, literally. From the Maruti 800 and the

Ambassador some 30 years back to the Honda Civic,Honda Amaze or the Swift Dzire

now, the industry in India has passed one milestone after another. There were, of course,

the ubiquitous Maruti Zen and Honda City in the ’80s, the Mruti Esteem in the early ’90s,

and the Hyundai Santro in 2000, that were harbingers of modern four-wheeler dreams.

Trends past and present make evident that cars just can’t be kept off roads in India. It is

now growing at a compound annual growth rate of 15-17% over the last few years.

The major set of reforms was launched in the year 1991 in response to the

macroeconomic crisis faced by the economy. The industrial policies shifted from a

regime of regulation and tight control to a more liberalised and competitive era. Two

major results of policy changes during these years in two-wheeler industry were that the

1.) Weaker players died out giving way to the new entrants and superior products and

2.) A sizeable increase in number of brands entered the market that compelled the firms

to compete on the basis of product attributes.

The four-wheeler industry in the country today is witnessing an increased number of

players with several brands and new technology.

This is indeed significant keeping in mind the fact that the company had actually faded

away after the introduction of higher fuel-efficient diesel engines and gradually it started


losing out to other competitors offering diesel engines that were giving almost double the

mileage and this had led to a fall in the market share of Reliance Retail by 2.46% in

2012-13 but new technology products from Honda and the brand value attached to them

helped the segment revive. Since then, there has been no looking back. Today, the

segment accounts for 12.84% of the total four-wheeler sales in the country.

“The booming economy has led to new trends. With a high degree of urbanisation, the

growing number of nuclear families and more females going out to work, a majority of

the old-age people and both working and college-going females now prefer convenient

and fuel efficient cars that can be used by all members of a family. This has led to the

boom in the segment. Earlier, scooters were largely driven by males. Cities where

distances are huge, where public transport are not so well developed and where people

seek value for money, diesel engines are doing good business. Diesel engine sedan cars

have a very negligible market in rural India unlike MUVs that are in huge demand there.

With higher delinquencies in rural areas of Uttar Pradesh, Punjab, parts of Rajasthan and

Gujarat, banks have either partially or completely withdrawn from these markets,

resulting in a dip in sales. This is contrary to sedan cars that are in demand in the urban

and semi-urban areas or A-class and B-class cities, and where finances continue to be

available. Hence, the segment has been witnessing a positive growth over the whole of

last year.

Methodology

The scope of the project included analysis of the market to study the future prospects of the newly launched Honda amaze including competitor analysis. The following methodology of market research was implemented and the results were analyzed using SPSS to support the conclusions give relevant recommendations based on the findings.

Market Research


The objective is to understand the customer perception regarding Honda Amaze and the effect of competitors on its sales.

To know customer perception and the preference for Honda Amaze and its immediate competitors a marketing research survey was conducted. The respondents for this survey were the customers who either own a Honda Amaze car or any other Sedan class car in Delhi. The survey also included some respondents who have good knowledge of the automobile industry, particularly cars.

In total, 150 responses were collected and varied responses were obtained from them. Some primary data was also collected from the customers about Honda Amaze and the features they like the most and the drawbacks associated with the car.

SPSS analysis

Effect size statistics provide an indication of the magnitude of the differences between your groups (not just whether the difference could have occurred by chance). There are a number of different effect size statistics, the most commonly used being eta squared. Eta squared can range from 0 to 1 and represents the proportion of variance in the dependent variable that is explained by the independent (group) variable. SPSS does not provide eta squared values for t-tests. However it can be calculated using the information provided in the output. The procedure for calculating eta squared is provided below. The formula for eta squared is as follows:

Eta squared = t*t / t*t + (N1 + N2 – 2)

Any value for Eta squared above 0.14 has a large effect on the dependent variable.

Other than this various other qualitative analysis such SWOT and BCG matrix were

performed.


Findings

Sales Network

Reliance Retail India Ltd., (HCIL) has a strong sales and distribution network spread across the country. The network includes 157 authorized dealership facilities in 100 cities. HCIL dealerships are based on the "3S Facility" format, offering complete range of Sales, Service and Spares services to its customers.

Difficulties like the depreciation of the rupee have increased the import costs. Besides

this, HONDA had only petrol models in the market. So, when petrol prices increased, it

affected their operations tremendously. Therefore, in the last few years, they have been

focusing on the development of diesel models, starting with the Amaze.

Moreover Honda has seen its market share nearly halve over the last five years. With the

newly-launched Amaze sedan now counting for nearly 70 per cent of the company’s sales

in India, the car-maker’s counter-attack has just begun.

Honda Amaze was developed following extensive surveys in India on customer's needs

and requirements setting new benchmarks in the industry in terms of design, packaging,

cabin comfort, and fuel-efficiency."

In order to meet the growing customer demand and reduce the waiting period for Amaze,

Reliance Retail India recently announced that it will commence the third shift of

production at Greater Noida plant from November of 2013.

Pitted against Maruti Suzuki's top selling sedan Swift Dzire, Amaze has managed to chip

into the share of the market leader a wee bit. Amaze averaged about 5,500 to 6,000 units

a month, in the same period, Maruti Suzuki is learnt to have sold about 70,000 to 80,000

units of Dzire. The average monthly sales of Dzire have come down by about 1,000 to

1,500

http://economictimes.indiatimes.com/maruti-suzuki-india-ltd/stocks/companyid-11890.cms


Growth and Market Share

Honda Amaze is one of the very few bright spots in the falling Indian Passenger Vehicle

market, which posted its 8th consecutive month of decline in July. The overall market

declined by 7.49% to 7.93 lakh units in April to July of 2013

Reliance Retail India grew by 64.95% in April to July period selling 40,350 vehicles. The

company's market share in the compact car space has more than doubled to 12.84%. And

its overall passenger vehicle market share has has risen from 16,000 to 16,500 units.

With the Amaze, Honda has managed to reach out to the new customer base. Out of the

total Amaze customer base, more than 80% are first time Honda buyers.

Market share calculated for June 2013, Amaze holds 14.32% of Market share. It sold

4965 units. While its competitors Maruti Suzuki Dzire had 49.61%, Tata Indigo eCS

32.10% and Mahindra Verito Vibe 3.97% of the market share of total Mid-Size Sedan

segment. Amaze accounts for 72% approximately of the total sales of Honda as

calculated in August.

Honda has sold about 4 million cars globally in the last fiscal, which ended this March.

The President has announced that this will be increased up to 6 million in the fiscal year

ending March 2017. And, the increase comes from emerging markets, which include

India. Therefore, in that sense, the contribution of the Indian market to Honda’s global

strategy will be increased tremendously.

Competitive Factors

Honda's game changer model and its first diesel product, Amaze would be country's most

fuel efficient car with a mileage of 25.6 kilometers/ litre.

The four diesel options come in priced band of Rs.5.99-7.60 lakh, while the six petrol

trims would be available at Rs.4.99-7.50 lakh. The petrol option has a 1.2 litre i-VTEC

http://economictimes.indiatimes.com/topic/market%20share


engine. Its manual transmission delivers a fuel economy of 18 km/litre, while the

automatic offers 15.5 km in every litre.

Amaze is Honda's first diesel car developed for the Indian market. It would directly

compete with the segment leader DZire from Maruti Suzuki, which is priced between

Rs.4.92 lakh to Rs.7.5 lakh. Maruti sells around 16,000 DZire every month, which is also

available in both diesel and petrol.

Reliance Retail India President and CEO H Kanayama said that Amaze is the most

strategic models developed by the company for Indian and has the potential to become its

largest selling model given the customers preference shifting towards diesel fuel.

Amaze has an advantage of 1.5 litre all aluminum diesel engine, the biggest in its

segment that would deliver class leading 100ps of power output, much higher than

Maruti's Dzire 1.3 litre diesel engine.

The car would be available across 150 retail outlets of Honda spread over 97 cities in

India. The company is targeting a large pie of customers upgrading from hatchbacks like

Hyundai i20 and Maruti Swift along with the status conscious sedan vying younger lot.

SWOT Analysis

strength.

1. diversified product portfolio.

Honda unlike many other automotive companies does not focus only on selling vehicles.

It is the largest producer of the engines and motorcycles as well. Therefore, the product is

not as susceptible as its competitors are to market cycles or technology disruptions.

2. huge investments in R&D.

Honda’s investments in R&D reach as much as 5% of revenue. The business relies on

these investments to achieve competitive advantage through various technologies, such

as improved vehicle painting process, new hydrogen and hybrid engines or new welding

technologies


3. strong brand image.

Honda has a reputation for producing the best quality engines around the world. The

company’s brand was the 21st most valuable brand in the world valued at $17 billion and

was only behind Toyota, Mercedes-Benz and BMW. Hence Amaze has the backing of

the highly valued brand image of HONDA, giving it leverage to make a place for itself in

the market.

weakness.

1. weak position in Europe automotive market..

Honda holds a very weak position in the Europe’s automotive market and has maintained

only 1.1% market share in 2012. Although, Europe’s market share is declining at the

moment and many companies experience losses, the market is huge and firms can benefit

from the economies of scale.

2. economic factors.

Economic slowdown pressure clearly weighs heavy on car sales as the festive cheer failed to add much fervor to demand, dampened by high interest rates and uncertain economic climate.

Till there is a decrease in interest rates for corporate or retail credits, financing rates will remain high for auto customers which is a cause of concern.

The adverse market conditions due to high interest rates and inflation continued to pose challenges for growth

opportunities.

1. increasing fuel prices.


Honda’s strong emphasis on engineering fuel-efficient vehicles (Honda Insight and

Honda Civic) with flexible fuel, hybrid and hydrogen engines will pay off due to

increasing fuel prices.

2. growing global demand for environment friendly vehicles.

The declining levels of fossil fuel sources and the rising CO2 emissions became a major

concern for many people and many governments. Therefore, ecologically friendly cars,

powered by hybrid, hydrogen or flexible fuel engines became very popular. The market

for such cars was $33 billion in 2010. Honda’s focus on hybrid and hydrogen fueled

engines is a great opportunity to capture the market share for this new demand.

3. growth through acquisitions.

Honda amaze could greatly benefit from strategic partnerships or acquisitions of smaller

competitors. The business would add new brands to its portfolio, achieve greater

economies of scale and would benefit from synergies between different firms.

threats.

1. intense competition.

Honda amaze faces more intense competition than ever. New small entrants are

disrupting the market with their capabilities in producing electric vehicles or alternative

fuel engines. Big companies are restructuring themselves to become more efficient. As a

result, firms like Honda are suffering from competition from both big and small players.

2. decreasing fuel prices.

Some analysts forecast that future fuel prices will drop due to extraction of shale gas.

This would negatively influence the image of Amaze because the company is focusing on

hydrogen fuel, hybrid and flexible fuel engine cars, which are not so attractive to

consumers when fuel prices are low.

3. rising raw material prices.


Metals are the main raw materials used in vehicle and motorcycle manufacturing and the

rising price of the raw metals raises overall production costs for Honda amaze.

4. natural disasters.

Honda has manufacturing facilities in Japan, Thailand, China and Malaysia. These

countries, including others, are often subject to natural disasters that disrupt

manufacturing in the facilities and decrease Honda’s production volumes.

5. strong yen.

Honda earns most of its profits outside Japan and appreciating yen poses a great threat to

Honda’s profits.

Conclusion

BCG Matrix Analysis for Honda Amaze

The Boston Consulting Group (BCG) Matrix is a simple tool to assess a company’s position in terms of its product range. It helps a company think about its products and services and make decisions about which it should keep, which it should let go and which it should invest in further.

question marks.

Question marks are products that grow rapidly and as a result consume large amounts of cash, but because they have low market shares they don’t generate much cash. The result is a large net cash consumption. A question mark has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows. If it doesn’t become a market leader it will become a dog when market growth declines. Question marks need to be analyzed carefully to determine if they are worth the investment required to grow market share.


stars.

Stars generate large sums of cash because of their strong relative market share, but also consume large amounts of cash because of their high growth rate. So the cash being spent and brought in approximately nets out. If a star can maintain its large market share it will become a cash cow when the market growth rate declines

dogs.

Dogs have a low market share and a low growth rate and neither generate nor consume a large amount of cash. However, dogs are cash traps because of the money tied up in a business that has little potential. Such businesses are candidates for divestiture.

cash cows.

As leaders in a mature market, cash cows exhibit a return on assets that is greater than the market growth rate – so they generate more cash than they consume. These units should be ‘milked’ extracting the profits and investing as little as possible. They provide the cash required to turn question marks into market leaders.

Table5.1Relative market share of Honda Amaze Table5.2 Rate of Car Industry Growth

June 2013 19%

July 2013 24%

August 2013 24.5%

Sept 2013 22.2%

Oct 2013 28.5%

June 2013 --

July 2013 1.4 %

August 2013 -6.35%

Sept 2013 -6.78%

Oct 2013 8.74%


After the launch of Honda Amaze in April, 2013, its market share is increasing every month from last 6 months and the overall industry growth is declining except for the month of October, due to the effect of festive season. We can categorize Honda Amaze as a Cash Cow for the Honda Company as it exhibit a return on assets that is greater than the market growth rate – so it generates more cash than it consumes. Honda should leverage on this aspect of Honda Amaze as it is a profit making product for Honda and should work on to retain its market share.

Marketing StrategyTo reduce the influence of the exchange rate fluctuation, HONDA had to accelerate

localization. In fact, in some models HONDA has achieved around 90 per cent

localization.

HONDAs strategy, globally, is to bring out whatever model the customer would like to

have. They don’t really adopt the ‘wait and watch’ model. From an India stand point, it

seems like that they have taken such an action.

Generally there is a comparison between Japanese manufacturers, mainly Suzuki and

HONDA. HONDA mainly went into advanced markets such as the U.S. and Europe, and

in some of these markets, the ratio of diesel to petrol cars is almost negligible. Therefore,

they focused only on petrol engine models, especially in the last ten years. The global

trend has also curved towards more eco-friendly technology.


Suzuki focused on the Indian customer market, they decided not to compete with other

Japanese manufacturers. They started operations 30 years ago, and pulled off a great

success. Therefore, it isn’t surprising that Suzuki makes diesel models which are a great

hit here.

The characteristics of the Indian market are unique. Nearly 50 per cent of cars sold are

diesel. Nearly 50 per cent is in the hatchback range, and so on. HONDA is used to bigger

engines and petrol models.

Honda noticed that it hadn’t realized its full potential in the blossoming Indian market so

it re-formulated its promotion strategies in India. Marketing tactics were planned again to

make them in congruence with the Indian market.

The advertising and marketing strategy were developed so as keeping in mind the media

exposure pattern, expectations, preferences, social and cultural set-up. Initially decisions

were largely driven by Japanese expats whose understanding of India and Indians was

often poor. This was quite evident from the fact that print media was thought to be the

most effective tool as well as the ads were in English. Though other media channels like

TV were utilized but they too had ads which were not compatible with Indian masses.

The ads usually had an indifferent feel to them with non-Indian models driving plush

looking cars in tall skyscrapers backgrounds.

The resultant of this though research is the new Honda Amaze ad campaign which has

kite flying, Holi colours and India Gate thrown in. The potential of television to influence

a typical Indian family has been tapped keeping in mind the vast language preferences of

socially and culturally hugely diverse populations.

The basic goal of advertising has been accomplished to familiarize the targeted audience

with the product and pass on a friendly vibe so as make it appear desirable as well as at

the same achievable. This is quite evident from new Honda Amaze ad which portrays the

car as something that’s been designed in accordance with Indian cultural make-up as well

as lures them to a socially accepted state which could be reached by acquiring it.

Marketing Strategy of Honda Amaze:

The success of any product is based on how effective marketing and advertising strategy

it adopts. Honda amaze adopts a marketing campaign of targeting its customers by

printing advertisements containing tagline “Ordinary is out, Amazing is in.” through


which the company is trying to tell its customers that you can get amazing features even

at lower prices.

Brand Image: The brand Honda speaks for itself and its Japanese automobile engineering

which is known for superlative excellence. The company has great innovation ability and

the customers really feel pleasure in driving Amaze.

Segmentation, Targeting and Positioning

targeting and segmentation.

demographic segmentation.

age and life cycle stage.

Honda Amaze E MT diesel: Young age group between 21-25. (Basic

model and fuel efficient).

Corporate executive’s age group between 25-35.

income.

Medium: Amaze is Honda’s first car targeted at the middle income group of the

indian population. As this segment of the indian population is currently showing

positive growth, this can help Honda grab a larger market share.

psychographic segmentation.

life style.


Honda Amaze is targeting middle class segment by providing stylish design and

looks, at an affordable price.

Targets young corporate executives who prefer to travel in a sedan than a hatch-

back car.

behavioral segmentation.

People who are very particular about quality and fuel efficiency.

Since Honda is known for its quality products, people will be pleased to buy

amaze which excels in quality adding with fuel efficiency.

positioning.

“Ordinary is out AMAZING is in.”

Points of difference: Amaze is differentiated from its competitors on the basis of

it QUALITY and the BRAND IMAGE of Honda which gives it an upper hand as

a majority of customers already have a very positive perception of Honda.

Japanese engineering known for its perfection.

Points of Parity

High mileage as compared to competitors.

Price

• Honda Amaze followed penetrative pricing strategy during its launch. With

Amaze being a sub 4 m car, thus enjoying close to 12 % excise benefit, 80%


expected indigenization and opportunity of a larger market size supported the

initial penetrative launch pricing strategy.

• Honda management has priced the Amaze Diesel around 6.50 to 6.75 lakh for its

starting model.

• Initially the company was more focused on quality and not on cost. Therefore it

left no room to maneuver when it came to pricing. But to survive in the current

market scenario and competitive pricing, Honda plans to utilize its second plant in

Tapukara in Rajasthan, to make critical engine parts and body shells to control

price and keep costs low.

• The aggressive pricing strategy of Honda Amaze places it a bit higher than other

existing cars in the same segment.

• With the aim to get the cost right it is leveraging price synergies with the Brio

hatchback, the firm’s cheapest vehicle in the globe, to take some immediate

interest of the Indian client.

Status in Company’s Brand Portfolio

Amaze, coming at a time when the Indian auto market was not in the best of health, or spirit, the Amaze marked a brave step ahead for Honda. And at a time when it had suspended the production of Jazz until the new model arrived. The Civic is also no longer produced, leaving Honda to sell in the Indian market the City, CR-V, Accord, Brio, and now the Amaze. Except the City and the Brio, the Accord and CR-V are not exactly volume drivers for the company, which has come to have two manufacturing facilities in India, at Greater Noida near Delhi, and Tapukara near Alwar. Having a manufacturing capacity of 1.2 lakh units, the company planned to produce between 4,000 and 5,000 Amaze cars per month. Expecting to sell 50,000 units in FY14, the Amaze could change the fortunes of Honda's car business in India.

Honda’s stellar image in India was first affected by the miscalculated positioning for Jazz. The lackluster initial market performance of the premium hatch making it seem like Honda had made its first wrong call after having made years of error-free judgements about what suits the Indian market.

Then, last year, the tsunami in Japan and the floods in Thailand dealt a double whammy to Honda’s Indian operations, dependent as it is for sourcing key parts that go into its cars


here. So, last year was tough for Reliance Retail India and its performance showed in the number of customers that walked away frustrated because they couldn’t wait for the many months before the promised delivery could be made by the local dealer.

But, the company’s operations have returned back to normal and production has limped back up since. However, there has been one other deficiency in Honda’s portfolio in India – a very key ingredient for success in today’s skewed market scenario. And, that is a diesel engine in its most vital models.

Honda has always meant petrol for Indian car buyers and that hasn’t stopped them from buying cars such as the CR-V or the Accord. But with the overwhelming majority of small car buyers now choosing diesel over petrol and Honda increasingly relying on its hatches for volumes, a diesel engine in its grasp is being sorely missed.

Which is your favorite sedan class car in price range of 5 to 8 lakhs?

Out of 150 respondents, 48 percent of respondents prefer Honda amaze over other sedan class cars in the price range of 5 to 8 lakhs. Maruti Suzuki Swift Dzire emerged as the only significant competitor for Honda Amaze. If we talk about sales, Swift Dzire tops the list but after the launch of Honda Amaze in April, 2013, Honda Amaze acquired a significant market share in India after Maruti Suzuki Swift Dzire.

Which variant of Honda Amaze would you like to buy considering both the price of car and the cost of fuel?

Giving respondents the choice for diesel and petrol version, around 74 percent of respondents would prefer diesel version over petrol version due to low cost of fuel. The respondents were given the freedom to consider both the price of the car (which is 1 lakh more for the diesel version) and the cost of the fuel while answering this question.

9%

27%

27%

12%

24%

Preference

Price

Design

Mileage

Honda's Brand Name

Interiors and Space


Which feature would you concentrate most on, while buying Honda Amaze?

Price

Design

Mileage

Honda's Brand Name

interiors and space

0% 5% 10% 15% 20% 25% 30%

Respondents gave almost equal weightage to the mileage, design, interiors and space for choosing Honda Amaze as one of the option. This gives a clue to the company that they should concentrate on the mileage, design and interiors for improving their market share and go ahead of Maruti Suzuki Swift Dzire in providing the right value proposition to the customers.

From where did you come to know about Honda Amaze?

64%

3%2%

21%

10%

Medium of Advertising

Advertisements in newspa-pers,TV and magazinesEvents like Auto ExpoOnineFriends and relativesOthers


This question tells answers the medium of advertising used by Honda to market Honda Amaze. This also gives a view of their marketing strategy. Honda generally concentrates on advertisements in TV, newspapers and magazines. Word of mouth is also playing its role for Honda.

Due to Honda’s Brand value, the new features and the first ever diesel variant by Honda amaze makes it a talk of the town. The percentage of people gaining knowledge about Honda amaze through web is very less. So Honda should also take online marketing as another tool for the promotion and marketing of Honda Amaze.

source: http:// www.google.com

Some of the advertisements in newspapers and magazines


Recommendations

A market survey was conducted and the respondents were asked about their general perception about the various attributes of Honda amaze and what all features of Honda Amaze motivates them to buy Honda Amaze. The factors which were taken into consideration were:

Value for money Looks and design Interiors After sales services

They were asked to rate Honda amaze on these parameters on a scale of 1 to 5, 1 being the lowest and 5 being the highest. By using statistical tools such as SPSS the following points have been recommended to HCIL.

The following three factors have been analyzed:

Looks and Design Interiors After sales services

It was observed that these factors affect the’ Value for Money’ for Honda Amaze. T-Test was conducted using ‘Value for Money’ as the test variable and ‘Looks and Design’, ‘Interiors’ and ‘After Sales Service’ as grouping variables (one at a time).

SPSS output analysis

‘Value for money’ affected by’ Looks and design’.

T value =2.884


Eta squared=0.115

It can be concluded that the looks and design of Honda Amaze has a large effect on its value for money. Looks and design is therefore a very good deciding factor for customers to buy Honda amaze.

‘Value for money’ affected by’ Interiors’.

T value =0.919

Eta squared=0.013

The interiors of Honda Amaze do not have a significant effect on its value for money. People do not pay a lot of attention on the Interiors of the Honda Amaze, so Honda Amaze should market their Interiors in the advertisements to leverage on it.

‘Value for money’ affected by ‘After sales service’.

T value =1.341

Eta squared=0.027

So it can be conclude that the after sales services of Honda Amaze have a moderate effect on its value for money. Honda Amaze should improve in their after sales services by opening more service centers, faster delivery of cars etc.

What more features would you like to have in Honda Amaze?

The respondents were asked about the new features they want to have in Honda amaze. The options given to them were:

More colour variants


Improved mileage

Enhanced sporty looks

Engine upgrade

Others

3%

22%

56%

16%

3%

New features

More colour variantsImproved MileageEnhanced Sporty looksEngine upgradeothers

Around 56 percent of respondents opted for enhanced sporty looks. Honda should focus on improving the looks and design of Honda Amaze to increase its value proposition. Honda should incur more cost on R&D to come up with new sporty looks and improved mileage in near future to increase its customer base and attain a brand positioning as that of Honda City.

Bibliography

Kotler, P. et al. (2009). Marketing management: A South Asian Perspective. New Delhi: Pearson Publications.

Thakkar, K. (2013, August 29). Honda sells 30,000 units of Amaze since launch.


http://articles.economictimes.indiatimes.com/2013-08-29/news/41582232_1_honda-amaze-honda-cars-india-ltd-swift-dzire

Reliance Retail India Ltd. (2014). Retrieved from http://www.hondacarindia.com/

Muralidhar, S. (2012, November 26). Honda Amaze Review http://www.thehindubusinessline.com/features/smartbuy/automobiles/honda-amaze-review/article4137215.ece

http://www.thehindubusinessline.com/features/smartbuy/automobiles/honda-amaze-review/article4137215.ece

http://www.thehindubusinessline.com/features/smartbuy/automobiles/honda-amaze-review/article4137215.ece

http://www.hondacarindia.com/



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