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Running head: MARKETING PLAN ANALYSIS HONDA VIETNAM

Marketing Plan Analysis Honda Vietnam


Group3:
Lu V Qunh Nh, L Th Phng Ngn, Phan Hunh Dim Tho, V Kiu Trm,
Phm Xun Ph, Yuuki Yazawa, Kanta Imanari
Principle of Marketing
December 9, 2015
Instructor: Dr. Nguyen Thi Mai Trang

MARKETING PLAN ANALYSIS HONDA VIETNAM

TABLE OF CONTENTS
Executive Summary...........................................................................................................3
Introduction.......................................................................................................................4
The product SHi 125/150...............................................................................................6
Microenvironment.............................................................................................................9
Company........................................................................................................................9
Suppliers......................................................................................................................15
Competitors..................................................................................................................16
Publics..........................................................................................................................19
Customers....................................................................................................................22
Macroenvironment..........................................................................................................24
Demographic factor.....................................................................................................24
Economic factor...........................................................................................................27
Natural factor...............................................................................................................32
Technological factor.....................................................................................................33
Political factor..............................................................................................................34
Cultural factor..............................................................................................................35
SWOT Analysis...............................................................................................................36
Recommendations...........................................................................................................41
Market development for high-income segment...........................................................42
Market development for foreigners.............................................................................44
The extension of customer services.............................................................................50
The problem of recall for SHi 125/150...........................................................................52
References.......................................................................................................................55

MARKETING PLAN ANALYSIS HONDA VIETNAM

Executive Summary
Honda is the most dominant company in the Vietnamese motorcycle market. Since it
entered to this market, its products have been loved by Vietnamese people, and most
Vietnamese have an experience to use a Hondas motorcycle in their life. However,
Honda currently faces the huge problem: market saturation. As a result, there is a
necessity to find a new way to overcome this problem. Through this report, we firstly
analyze current market situation from macro and micro views. Then, we provide SWOT
analysis for Honda in Vietnam. We found several problems Honda currently possesses,
and also found several opportunities that would contribute to its further growth. Based
on our analysis, we suggest three recommendations for the marketing activities of SHi
125/150; market development for high-income segment; market development for
foreigners; and the extension of customer services. Finally, we briefly mention in the
problem Honda faces: the recall of SHi 125/150 and provide considerable solutions for
it. We hope our research and recommendation would be helpful to promote the sales of
SHi 125/150 in next year.

MARKETING PLAN ANALYSIS HONDA VIETNAM

Introduction
Company description
Honda is one of the greatest global company and famous for motorcycles and
cars. It has expanded its business operations through the world, and provides consumers
advanced-technological products at reasonable prices. Honda currently expands its
businesses to aircraft and robot industry, and seeks to improve itself continually for a
long time.
Honda history. Honda was established by Soichiro Honda in 1946, and started
manufacturing of motorcycles in Japan. Honda firstly expanded its business in the
United States in 1959, and has gradually expanded its business through the world. In
1963, Honda started the sales of cars, and from that time, has significantly expanded its
business from motorcycles, cars, to power equipment, aircrafts, and robots. Honda is
currently recognized globally, and becomes one of the greatest global company.
Honda in Vietnam. Honda entered to Vietnamese market in 1996. The first
plant in Vietnam was established in 1997 (B. Thi, & X. Thi, 2009), and Honda started
manufacturing at this time. However, before Honda entered to the Vietnamese
motorcycle market, Honda exported some motorcycles from other countries to Vietnam,
and therefore, Hondas products were hugely recognized by Vietnamese consumers.
Honda succeeded in taking a first mover advantage in Vietnam (B. Thi, & X. Thi, 2009),
so it has s strong power in this market. Initially, Honda focused on middle-income
segment to promote its motorcycles because people under this segment did not afford
Hondas products. Honda faced to the strong competition of ultra-low price models
manufactured by Chinese makers and lost huge market share at the beginning of 2000s
(Fujita, 2008), but Honda regained its market share by introducing the low-price brand.

MARKETING PLAN ANALYSIS HONDA VIETNAM

Wave Alpha (Nguyen, 2006). This was significant change taken by Honda, and it
initiated to focus on low-income segment as well. Currently, Honda is a giant, sharing
around 70% of the Vietnamese motorcycle market, and Hondas products are loved by
Vietnamese people.
Mission. The mission of Honda (2015) is Maintaining a global viewpoint, we
are dedicated to supplying products of the highest quality, yet at a reasonable price for
worldwide customer satisfaction.
About the report. This report mainly consists of four parts. First three parts:
Analysis of macro environment, microenvironment, and SWOT analysis, are analysis of
current market situation. Then, the recommendations for the marketing of SHi 125/150
model will be described based on the analysis of current market. Secondary resources
from Hondas Website and some other sources such as academic journals and Websites
of public institutions are main sources of our research. We also conducted the
questionnaire on the Internet, and it also helps our research and supports our
recommendations.
Product Analyzing: SHi 125/150
Design
Very high-class design: based on the strong side of the SH brand in EU, SHi
125cc/150cc brings out the western design to Vietnamese consumer.
The Head: the head of the motorbike is crafted to its finest. The highlight part
is the headline, being covered chrome to show even more the high-quality of the
product.
16-inch stylist wheels: with light-weight but stable design. The wheel ensures
smooth and curve driving for the user.

MARKETING PLAN ANALYSIS HONDA VIETNAM

The Body: Is design to bring out the sexy curve at every corner.
The Back: Fully equip with strong glass with highlighted pattern. Maximum
lighting to ensure the best quality.
The parameter: functional smart count clock, smart and scientific design.
The Engine. SHi runs on an innovative piece of technology, the eSP (enhance
Smart Power), which is a latest design for scooter. The engine has very small, but not
less powerful, smooth and quite travelling, very eco-friendly, by consume less gas.
The gas-spraying mechanism is fully automated and control by the main
board, enhance the ability of the entire motorbike, minimize fuel consumption. Thus,
this contributes to less gas emissions from the motorcycle.
Idling Stop: System temporarily disconnect the motor, is a breakthrough new
technology in the motorcycle with the ability to save fuel efficient and environmentally
friendly. The system has the ability to automatically disconnect the motor, switch to
standby mode to save energy when the car stopped more than 3 seconds and restarts
smoothly when the driver throttle back and do not need to press the start button.
Technology Integration of Title ACG Vehicles capable of smooth start thanks
to integrated systems and generator startup, the maximum friction reduction, fuel
savings based on intelligent electronic mechanism. After turning off the engine, the relaunch is also very easy.
Less Friction Technology Designed to minimize the maximum friction, helps
the engine operate more smoothly.
Gas Evaporative Control System Fuel tank is equipped with system EVAPO
help minimize the evaporation of gasoline, which saves fuel efficient and
environmentally friendly.

MARKETING PLAN ANALYSIS HONDA VIETNAM

Maximize Comfortability & Safety


SHi 125/150 promises to deliver the best driving experience there is.
Main Container. U-box compartment is wider, can accommodate both the first
helmet 1 or 2 caps, thanks to the streamlined between the parts on the car that is
guaranteed to be the body slim.
Fuel Container. The gas tank designed with maximum volume and arranged in
the most reasonable way. Combined with the ability to excel in fuel economy, the new
SH lets users move farther in the distance.
On/Off switch Outriggers. Switches Side Stand shutdown instantly when
lowering the outriggers down. Only works when the engine side has gotten onto
outriggers. This helps users to not forget the legs brushing against parties before starting
the car.
Hydraulic-brake system. SHi 125/150 is equipped with a braking system
combines advanced hydraulics. In particular, the following disc brakes not only increase
a sense of stability and safety, but also provide strong braking force, continuous and
very balanced when braking.
Microenvironment
Company
Marketing mix (4Ps). In order to identify the strengths and weaknesses of
Honda itself, firstly, marketing mix which includes 4Ps: product, price, promotion,
place, should be analyzed.
Product: Honda has a variety of brands to cover the variety of its market
segment. Each product will be introduced in order.
SH mode 125cc (7 colors)

MARKETING PLAN ANALYSIS HONDA VIETNAM

Price

Standard:

49,990,000 VND

Fashion:

50,490,000 VND

Personalized:

50,490,000 NVD

SH 125i / 150i (5 colors)


Price

125cc:

66,990,000 VND

150cc:

80,990,000 VND

MSX 125cc (4 colors)


Price

59,990,000 VND

PCX 125cc (6 colors)


Price

Advanced:

54,490,000 VND

Standard:

51,990,000 VND

Air Blade 125cc (11 colors)


Price

Standard:

37,990,000 VND

Premium:

39.990.000 VND

Magnetic Paint: 40,990,000 VND


LEAD 125cc (7 colors)
Price

Advanced:

38,490,000 VND

Standard:

37,490,000 VND

VISION 110cc (6 colors)


Price

29,990,000 VND

Future 125cc (6 colors)


Price

Electronic fuel injection: 30,990,000 VND


Electronic fuel injection: 29,990,000 VND

MARKETING PLAN ANALYSIS HONDA VIETNAM

Carburetor:

25,500,000 VND

MARKETING PLAN ANALYSIS HONDA VIETNAM

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Wave RSX 110cc (8 colors)


Price

Electronic fuel injection: 23,990,000 VND


Carburetors:

21,990,000 VND

BLADE 110cc (9 colors)


Price

18,100,000 VND
19,100,000 VND
20,600,000 VND

Super Dream 110cc (3 colors)


Price

Brown:

18,700,000 VND

Black & Gold:

18,990,000 VND

Wave Alpha (5 colors)


Price

16,990,000 VND

According to this product range, it is revealed that Honda thinks the usage of its
products as a mean of transportation rather than as an enjoyment. Also, there are more
color variation in lower price models than in higher price models. In addition, lower
price models design for younger people in terms of product style.
Price: According to the above information about products, the price of its
products range from 16,990,000 to 80,990,000 VND. Accordingly, Honda focuses on
various market segment from lower income to relatively higher income. Honda has
mainly focused on the middle-income segment, but because of the emergence of ultralow price models produced by Chinese makers in the market, it expands its market
segment to lower-income segment as well by introducing Wave Alpha. Nevertheless the

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purchase of motorbikes is big deals for Vietnamese consumers because their average
income is around 40 million VND, Honda successes to capture various market segment
due to its strong brand power.
Promotion: Honda has been famous because of its excellent customer services
both before and after purchase. This creates great customer value and strong brand
image though the Vietnamese market. In terms of advertisings, even though Honda has
variety of channels to advertise its products such as YouTube channel, and own Website,
its advertisings are general and not differentiated with its competitors. Therefore, there
are necessities to create the ads focusing on specific feature of products or having huge
impact on consumers mind. Honda engages in various CSR activities such as
supporting education, environmental conservation, and doing charity activities. In
addition, Honda strongly encourages safety driving in Vietnam. Because of heavy traffic
situation, Honda thinks that Vietnamese people should know how to drive more safely
and efficiently. Honda launched safety driving project, and it provides safety
education in its own training center and local community. Due to these its activities,
Honda succeed in building strongly positive reputation among Vietnamese people.
Place: Honda has its own dealers or dealers under its name in all provinces in
Vietnam. This enables customers to easily access to a dealer near their location.
Accordingly, consumers can easily go to a dealer when they have a problem with their
motorcycles, and excellent services in each dealer strength customers loyalty to Honda.
This strong combination, easy access and excellent customer services, contributes to
creating great customer equity and is the source of its strong brand image.
Marketing strategy. In order to identify the marketing strategies, two
questions must be referred: Which customers will be served? and How will a

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company serve? Hondas marketing strategies will be analyzed as following the


textbook.
Segmentation: At first, basically Vietnamese people, except some rich people,
think about a motorcycle as a mean of transportation rather than the thing showing their
status. In addition, Vietnamese people most care about price when they buy a
motorcycle (Q & Me, 2014). Accordingly, Honda chooses income segmentation as a
basic strategy of market segmentation.
Targeting: The prices of its products range from 80,990,000 VND to
16,990,000 VND, and therefore, its market segment varies from high to low income
segment. Accordingly, Honda uses differentiated marketing, and each brand focuses on
each market segment in order to cover various market segment.
Differentiation and positioning: Honda differentiate its products based on two
ways of differentiations. At first, Honda differentiates itself by using its brand image.
Vietnamese people have recognized Hondas products are high quality and durable for a
long time, and therefore, this is the most influential differentiation in Vietnamese
market. In addition, Honda has a lot of dealers in Vietnam, and this contributes to its
service differentiation. Customers easily access to a dealer near their location, and get a
services both before and after they purchase its products.
In terms of positioning, Hondas position in the market varies the brand to
brand. Wave provides consumers only basic functions that required to drive at relatively
lower price, so this is the same for less strategy. On the other hand, SH provides high
quality at higher price, so it is more for more strategy. In addition, some other brands
provide relatively good functions and quality at normal price, so these would be more
for the same strategy.

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Suppliers
When Honda entered to the Vietnamese market, it relied its components on
Japanese and Thailand manufactures in order to sustain its high quality products.
However, at the beginning of 2000s, many Chinese makers entered to the Vietnamese
market with ultra-low price motorcycles, and therefore, Honda was required to launch
low-price model brand to compete with these Chinese competitors. Accordingly, Honda
initiated to depend on local manufactures to produce non-core components to reduce the
production cost of its motorbike (Nguyen, 2006). This hugely contributed to reducing
the costs, and Honda succeeded in introducing Wave Alpha to the market. Although
Wave Alpha has become popular product in Vietnam, Honda faced a new problem
related to suppliers. The Vietnamese government set the requirement of local content
ratio, and as a result, Honda must have expanded its local suppliers (B. Thi, & X. Thi,
2009). In order to deal with this requirement, Honda has invested in and worked closely
with local manufactures to improve their quality management and productivity for a
long term, and currently its local content ratio is more than 90%. The components of
some brands, such as SH mode and Air Blade, are produced more than 95% in Vietnam
(Motorbike manufactures, 2013). Accordingly, it is revealed that Honda now has good
relationships with its local suppliers, and this is one of the strengths for it to sustain its
higher market share in the Vietnamese market.
Competitors
In Vietnam, 95% of market share is accounted by 5 companies; Honda,
YAMAHA, Suzuki, SYM, Piaggio. Honda has about 60% of market share. Although it
is decreasing slowly nowadays. Characteristics of Hondas products are unbreakable,

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high quality and performance, and easy to use. Thus, its main competitors would be
YAMAHA and Suzuki because both company have similar product quality with Honda.
Piaggio and SYM are just small competitors because their market share is small, and
their product concept is different from Hondas one.
YAMAHA. Yamahas motorcycle has high performance and quality as same as
Honda. It cooperates with Toyota in terms of engine technology, and the ability of
production and technique are excellent. YAMAHA has 20% of market share in the
Vietnamese motorcycle industry; therefore, it is the 2nd largest market share. The
variety of YAMAHAs motorcycles is as same as Honda since it has 11 brands of
products. However, YAMAHAs price range is lower than Honda. Even though Honda
currently provides low-price brand such as Wave, its price range relatively higher than
YAMAHAs products. On the other hand, YAMAHA makes effort to reduce average
price of products. In addition, YAMAHAs motorcycles are focused on sporty driving.
Its design is beautiful and sophisticated.
According to YAMAHA annual report (2012), YAMAHAs marketing strategy
in Vietnam is trying to enhance brand power and expand market share. Products are
based on low-fuel consumption engine. It will also increase the variety of products in
terms of development and designing for attracting more Vietnamese consumers.
Recently, the rise in oil price makes YAMAHA focus on low-fuel consumption engine
in order to respond to customers needs. Also it is for expanding the market share.
Suzuki. Suzukis motorcycle also has good quality and performance closed to
Honda and YAMAHA. However it completely devotes its effort to reduce cost of
production, and also sells products at low price. In addition, its product design is
unique. Suzuki has 6% of market share; the marketing strategy of Suzuki is compete

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with other companies with its low price to expand its own market share. For achieving
low price motorcycles, Suzuki decreases the number of brands; it now provides only 8
brands and concentrate to produce only narrow range of products. Moreover, Suzuki
usually use colored materials in order to reduce the production cost while other
companies usually use non-colored materials and color these materials by themselves.
Product Comparison. As it was mentioned above, SHi 125/150 provides high
technology, great quality, and eco-friendliness to consumers. Comparing with
YAMAHA NM-X, SHi 125/150 still has advantages in terms of these functions. This
comparison clearly indicates that Honda SHi 125/150 is better than YAMAHA NM-X
except the design because it depends on personal favor.
The reason why we choose YAMAHA NM-X as a comparing product is that
price is close to Honda SHi since the price of NM-X is 80,000,000 VND while SHi is
80,990,000 VND. Also, these products target the same market segment; both of these
focus on upper-income class. Actually the design of these motorcycles are different in
terms of for female or male. However, in this comparison, it would not be considerable
problem.
Firstly, we focus on fuel capacity. Large fuel capacity means consumers can
drive longer distance. A motorcycle is necessary goods to live in Vietnam. Thus, fuel
capacity is an important criterion to use conveniently and comfortably. NM-Xs fuel
capacity is 6.6L while SHis fuel capacity is 7.5L. It shows SHi is better than NM-X in
terms of fuel capacity. Secondly, we make a comparison in terms of fuel consumption.
That connects to two results: reducing cost and protecting environment. In other words,
good fuel consumption helps to reduce cost for oil, and reducing oil consumption
contributes to protecting the environment.

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Public
Financial publics.
Number of shares
held
(thousands)

Individual or Organization

Percentage of total
shares outstanding
(%)

Japan Trustee Services Bank, Ltd.


(Trust Account)

104,755

5.8

Moxley & Co

83,945

4.7

The Master Trust Bank of Japan, Ltd.


(Trust Account)

70,922

3.9

State Street Bank and Trust Company


505223

52,503

2.9

Meiji
Yasuda
Company

51,199

2.8

State Street Bank and Trust Company

43,820

2.4

Tokyo Marine &


Insurance Co., Ltd.

42,553

2.4

The Bank of Tokyo-Mitsubishi UFJ,


Ltd.

36,686

2.0

Nippon Life Insurance Company

27,066

1.5

Mitsui Sumitomo Insurance Co., Ltd.

25,739

1.4

Life

Insurance

Nichido

Fire

Media publics. Honda has many different media channel in hand, such as:

www.youtube.com/user/HondaVideo
hondanews.com/channels/
corporate.honda.com/press
world.honda.com World News News Releases

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There are also many other showroom, news-coverage, newspaper ad which are devoted
for Honda.
Public Relations (PR). Strategize, plan & execute PR activities for assigned
project (minimum 3) from pre-launch, launch to sustenance phase: Press Materials
Preparation, Monitor media coverage for each projects executed., Evaluation (PDCA)
on projects executed, Budget monitoring for each project, Support Internal
Communications, Support ad-hoc events/projects, Pitch & arrange media test drive,
Handle all media enquiries, Monitor & analyze media exposure trend for Honda &
competitors.
Local public. Honda supports a broad range of community-based
environmental education, preservation and restoration efforts. That means were
providing grants, products, and in some cases, the support of hundreds of Honda
volunteers. Whether its cleaning beaches, restoring wetlands, greening urban areas, or
engaging students in field-science research, we believe in caring for the environments in
which we work and live. As the leading company in producing motorcycle in Vietnam,
Honda Vietnam always hold up activities to encourage and show people how to drive
safely. Since 2004, the Ti Yu Vit Nam programs, has been certified and cooperated
by the Committee of the National Traffic Safety, Police Department Road and Honda,
have been aired for 10 years. Over time the, the program has make an impact upon the
people all around the country with many successes bring positive effect for local people
General public. Beside having responsibility with manufacturing, producing and
especially ensuring safety environment, Honda also commits to contributing for the
general community, such as raising fund for the education, charity work and
environmental program: The top 10 youngest innovator, the award for successful

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engineer and scientist, the raising fund for poor but hard-worked student, the Fund for
victim of the 9th storm, Ngy hi trng rng
Internal public. Benefits of Employment: Honda Associates are our most
valuable asset and Honda offers a wide range of benefits to meet the needs of our
diverse workforce. The type and scope of benefits vary by company and location.
Honda Philosophy: The Honda Philosophy has guided our direction, and
continues to serve as the basis for our daily activities. At the core of the Honda
Philosophy is the concept of "Respect for the Individual." This means that we recognize
and respect individual differences in one another, that we treat each other fairly, and that
we establish relationships built on mutual trust. By doing this we encourage each
Associate to think creatively and show individual initiative and judgment.
Commitment to Inclusion and Diversity: Honda is committed to bringing
together a diverse group of Associates, dealers and suppliers to foster the kind of
innovation and vitality that enables us to achieve our dream of creating products and
technologies that make people's lives better. In this spirit, every Honda Associate and
business partner is expected to embrace and actively support diversity and the cultural
richness and advantages it provides.
Corporate Social Responsibility: Honda has a long-standing commitment to be
"a company that society wants to exist." Honda is working to address the world's
environmental challenges through a comprehensive approach for the near and longer
terms. Read about these programs. Honda is also engaged in a broad range of activities
that support and give back to the communities where we work and live.

Consumers

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Consumer markets. Honda main goal is to provide high quality transportation


for Vietnam with reasonable price
Business markets. Here are some Honda suppliers, like, Keihin Corp (Fuel
system), Showa Corp (Steering system), Shumito wiring system, Ltd, NOK Corp,
Nihon Plast, Nippon Seiki.
Reseller market. Beside from official distributing channel, there are also
retailers who purchased product at profit point, such as dealer, automobile specialist,
approved body shop.
International markets. Continental Expansion North, South, and Central
America American Honda Motor (AH) was established in Los Angeles in June 1959,
marking the start of Honda's expansion overseas. The quest was to find a market for
motorcycles and to win the satisfaction of American consumers, and so through the
efforts of AH a sales network was created. Honda established offices in Singapore and
Malaysia in 1963, actively preparing for entry into the growing Southeast Asian market.
Honda established Asian Honda, a company for motorcycle and power products sales, in
Bangkok, Thailand, in October 1964. In April 1965, Thai Honda Manufacturing (TH), a
production base for motorcycles and general-purpose engines, was established for local
production.
Macro Environment
Demographic factor
Demographic changes have significant impacts on the social and economic
performances of countries, regions, and the whole world (Giang & Pfau, 2008).
Therefore, deep understanding of the population trend is an advantage in promoting
sales.

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Nowadays, motorcycle is considered as the most common means of transport in


Vietnam, especially in Ho Chi Minh City. In average, there are 2 to 3 motorcycles in
each house in Vietnam. Therefore, Vietnam has a large motorbike-consumption.

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(United Nations, Department of Economic and Social Affairs, Population


Division (2015). World Population Prospects: The 2015 Revision.)
Two graphs above show the comparison between the population in 1950 and in
2015. As it can be seen from the graphs, the population increases considerably
throughout the period. The population of Vietnam is estimated around 90.73 million in
2014 (The World Bank), and is predicted to continuously rise in the next few years. In
addition, UNFPA Vietnam (2015) describes the structure of population in Vietnam as
following:
Vietnam has gone through dramatic changes in population structure. The
number of people under the age of 15 has fallen substantially, while the
number of people of working age (15 to 64 years old) has increased. Because
of this, Vietnam is now in a period known as the golden population structure.

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Besides, level of education is grown slightly which has led to the rise in income and
living standard of people living in Vietnam. Accordingly, it can be predicted that people
would be more quality-conscious rather than price-conscious. Moreover, Vietnam has
unequal distribution of population. People are moving from the countryside to cities.
Therefore, companies should understand these differences between rural and urban area,
and implement effective strategies to distribute their offerings through the country.
Turning to gender, nowadays, women tends to be independent because they
desire the same rights as men. Therefore, the number of women who makes their own
living is going up sharply. This has led to the increase on the consumption of relatively
expensive products. However, women have different eyes on fashion and they pay much
more attention on the outlook than men. That is why marketers have to make sure to
provide various design in their offerings. On the other hand, men usually tend to be
more quality-conscious such as technology rather than design, so marketers should also
find the ways to emphasize qualitative attractiveness.
Economic factor
Economic environment affects consumer buying power and spending patterns.
The research is about Honda motorcycle, on the other hand, it is examined all factors
which are involved in economic environment that influence the sales of motorbikes in
Vietnam. In fact, Vietnam is a developing country in the process of industrialization and
modernization, and therefore, many economic factors have recently changed. The aim
of the economic environment research is to help analyzing the entire market thoroughly
to understand how the market recently runs. Therefore, rich information should be
carefully examined to take the best strategy. This research covers four parts belonging to
the economic environment.

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Inflation rate. Firstly, inflation rate in two countries, Japan and Vietnam, are
analyzed. Japan, the founder of Honda, will be considered at first. In fact, the statistic
shows that from April to July in 2015, the inflation rate of Japan went down from 0.6 to
0.2. It will cause that many products prices decrease or stay constantly, and the cost of
materials usage in making motorcycles will follow similar way. This may impact on the
price of the final products. Beside, when motorbikes are delivered as export products to
Vietnam, this price may be reduced. However, the motorcycle market usually stays
stably, so its price tends to stay constantly. Therefore, the motorcycle producers likely
increase the quantity of motorbikes instead of changing the prices of products. Next, the
inflation rate of Vietnam is examined. It has also gradually decreased through every
month, the information indicates that from April to August in 2015, the rate had
decreased from 0.99 to 0.61, and the statistic predicts that it will continuously decline.
This part includes Vietnams inflation rate because there are two kinds of motorcycles,
one is assembled in Japan and another is assembled in Vietnam. However, the reason for
mentioning in the inflation rate in Vietnam is that only few percent of domestic
production accounts for high-value components of vehicles. Components manufactured
in Vietnam are mostly simple spare parts such as seat belts, seats, and wire. The rest of
the critical equipment with high technological content mostly imported from other
countries. The increase in the inflation rate likely leads to the increase in the sales of
products.
Consumer spending. Consumer spending in Vietnam is the other crucial part.
According to IECONOMICS (2015), from 2013 to 2014, Vietnamese consumer
spending increased from 2,331,160.5 billion VND to 2,591,337 billion VND, and it
continuously increases to 2,644,079.0125 billion VND in 2015. The forecast shows that

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it will increase to 2,789,285.4888 billion VND within next two years. Because of the
increase in consumer spending, it indicates that Vietnamese people recently tend to
spend more. The market encourages people to spend as well as their ability to do it.
Based on this information, producers could decide to increase the production of
products and focus strongly on Vietnamese market as the destination of export.
The level of income. The next part is the level of income. This is the important
part because from this database, marketers could briefly understand about the change in
consumer behavior and buying power. According to the World Bank, the level of
income has gradually increased every year. The Gross Domestic Product per capita in
Vietnam marked $2052.3 in 2015. Beside, an average cost of a motorcycle selling in
Vietnam varies from $800 to $900. Basically, Vietnamese people could buy a motorbike
by themselves with one or two year saving. Consequently, the level of income is
predicted to increase in the future, so not only Honda but also the other companies
likely produce and export more motorcycles in order to increase their revenue as well as
profit. Moreover, Vietnamese market is still a potential market to invest and develop
motorcycle industry.
Global effect. The last factors should be considered is the global affects.
According to Mr. Kurokawa Kengo, the CEO of Asia Plus Inc., stated that middle and
affluent class (MAC), that means the middle income class and wealthy people, is one of
terminologies when we discuss business opportunities in developing countries like
Vietnam. According to Boston Consulting Group, households whose income are 15
million VND or more will be belonged to the middle-income class, and households
whose income are from 30 million VND or more would be classified into high-income
class. In Vietnam, the number of MAC is about 12 million in 2012, and it is expected to

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reach 33 million people by 2020. Because of the increase in the number of wealthy
people, it will lead demand increase for relatively expensive products to support
businesses position and standing in the society.
However, becoming a member of the World Trade Organization (WTO)
promotes Vietnam's economy to develop deeper and wider in the global economy. The
opportunity to take advantage of external resources accelerates the process of
industrialization and modernization in Vietnam. Additionally, Vietnam has already set a
target in 2020 to basically become an industrialized toward modernized country.
Furthermore, there is another potential segment in Vietnamese market: the foreign
workers who work and live in Vietnam for long period of time. The market in Vietnam
basically grows slightly, and it creates great opportunities for international companies.
Especially, after Doi Moi in 1986, the Vietnamese economy greatly step into a higher
level and grow better and faster. Before 1986, Vietnam strictly treated foreigners when
they came to Vietnam for working or living. We can see the results what has changed a
lot after Doi Moi policy, and obviously the growth in economic leads a lot of
foreigners to come to Vietnam, some of them come for working and others for living
and getting married. Consequently, because there are many opportunities for
international companies to invest in the Vietnamese market, a huge number of foreign
labors are working in Vietnam.
To sum up this part, the Vietnamese market is likely a potential market for
many firms to invest in and make profits. On the other hand, motorcycle industry would
be saturated and therefore, it is necessity that each company tries to find a new and
potential market. However, marketers must consider not only the good sides but also the
bad sides of the market in order to make the best decisions for their company.

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Natural factor
Increasing the number of vehicles leads the air pollution in the city. In many
big cities, air pollution becomes a hot issue. Traffic jam results in more exhaust fume
then it makes the atmosphere stuffy. Vietnam is ranked the fourth in the world because
of the amount of motorcycle with 37 million (Alarming air pollution, 2015). The most
pollution areas in Vietnam are Hanoi and Ho Chi Minh City. According to Prof. Dr. Le
Huy Ba, Director of the Institute for Science, Technology and Environmental
Management in Ho Chi Minh City University of Industry, every day in the city around 5
million vehicles circulating along the main road of 500 sq. kilometer of the city have
made air pollution levels even more serious (Oanh, 2013)
There are many projects of government which are contributed to reducing the
pollution such as: imposing heavy tax on vehicles to reduce the amount of purchasing
motorbikes, encouraging the development of vehicles using clean energy, calling for the
aware of citizen about protecting the environment. Accordingly, motorcycle companies
has been required to produce more environmental-conscious products, and this is a
current trend of the entire industry in Vietnam.

Technological factor
Technology factors has been changing rapidly, so every company has to adapt to
these changes for survival. It creates new market and opportunities for marketers.
Technology is the important elements of the macro environment. Advance in
technologies improves the product and improve the marketability of the product as well.

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The birth of new technology increases the competition of new products


compared to the traditional ones. New technology pushes enterprises to change to
increase competitive abilities. The technology create conditions to produce cheaper
product with high quality, which will be able to satisfy customers and contribute to
increasing the sales.
Natural resources and people are key elements of technology factor. Based on
this, the company brings out many product to meet their need. In motorcycle industry
people care about save energy to save money and reduce the exhaust fume to protect the
environment.
Another technology is communication technology. Access to the internet helps
connect consumers to communities in the globe; therefore, products can be known fast
and easily. It helps businesses to increase their sales and exchanges of goods and
services. It provides consumers opportunities to access to shopping in another way:
online shopping.
Political factor
Vietnam is considered as one of the most stabilizing political environments in
the world, and also as a comfortable and safe environment for enterprises to invest in.
Law on Investment and Law on Enterprises become effective from June 1, 2006, which
facilitate the expansion of the business freedom, attract private investment,
strengthening post-inspected mechanism and create a fair-play field for all economic
sectors.
Accession to the WTO in 2007 had a strong reform on the tax policies of
Vietnam. There are 812 tariff lines to be cut, which has reduced many procedures in
order to create favorable conditions for businesses. According to WTO commitments,

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28

since May 31, 2007, Vietnam must remove discriminatory rules for import, distribution
and use of motorcycles with engine capacity of 175 cubic centimeters or more. Import
tariffs for motorcycles have dropped from 100%, by the time of accession, to 70% in
2012, spare parts of all kinds fell from 50% to 35-45% by 2010. At the same time, since
January 1, 2009 Vietnam must let foreign enterprises import and distribute imported
motorcycles directly into the domestic market. Import duties have reduced, therefore,
domestic enterprises should actively linked with each other to improve competing
capability. The abolition of the preferential import tariffs at the rate of localization has
made it difficult for enterprises which produce and trade motorcycles but this is the
objective requirements of integration and market development, and as well as support
tools for businesses.
The government has used tax incentives for priority sectors such as
engineering, manufacturing, and thence it will indirectly support the motorcycle
industry with low entry price components and the reimbursement of income tax if the
companies use profits to invest in technology and developing the motorcycle.
Sociocultural factor
According to the report of Ministry of Transport on July, 2011, the population
of Vietnam was 90,549,390 people, ranking 14th in the world, with the population
density is not evenly distributed in the provinces across the country. Especially the
population concentrated mainly in the big and crowded cities, such as Hanoi and Ho Chi
Minh City. Vietnamese family is usually a traditional household with 2-3 generations
including grandparents, parents and children, which also affect much on the demand for
motorcycles. Buying a vehicle in a family has a lot of comments given by the

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29

differences of opinion and generation. Older people often focus on security and lowest
cost, but the young people tend to care about the color, style and features of the vehicle.
SWOT Analysis
Based on our analysis of current market conditions in previous two parts, we
can itemize potential SWOT factors below. There are various factors that affect to
Hondas activities. In this part, we itemize various SWOT factors first, then describe
some key factors that hugely influence on the marketing strategies we recommend later.
Key factors are depicted in the chart below.

Strengths.
Product variation
Wide price range
Color variation (for some brands, especially in lower price models)
Excellent sales services
Various CSR activities

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30

Good access to dealers (Many dealers in Vietnam)


Variety of target segments
Strong brand recognition: High quality, durability
The increase in the production capacity established the third plant in Vietnam
High local content ratio
The good distribution of products lower-price models in mountain areas and
higher-price model in urban area
Wide range of media channel good for advertisings
Advanced technology PGMFI, and idling stop system
Since Honda succeeds in dominating in the market, there are many strengths that
support its success in the Vietnamese market. We point out two strengths: strong brand
power and advanced technology. With no doubt, Honda the strongest brand in this
market; all Vietnamese people know Honda, and they trust its products are high quality.
Therefore, this is the great advantage when it promotes the sales of motorcycles. Honda
can use its name as a good source to convince consumers, and it should utilize the name
to create a positive reputation through the entire market. In addition, especially for SHi
125/150, advanced technology such as PGMFI and idling stop system should be
emphasized through the promotion campaign. Since this is the reason SHi 125/150 is
the expensive brand, Honda must appeal these advanced technology and justify the
higher price.
Weaknesses.
General advertisings
Too much focus on low-price products: Wave Alpha etc.

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Honda is the successful company in Vietnam, so there are not so much weaknesses it
possesses. However, we point out two weaknesses: general advertisings and huge
reliance on low-price model. At first, especially for SHi 125/150, Honda does not take
good advertising strategy to promote the sales of this model. Its advertising is too
general; therefore, it does not succeed in promoting this brand broadly. Moreover,
Honda hugely relies its sales on low-price model: Wave and Super Dream. According to
the market research conducted by Asia Plus Inc. (2014), more than 50% of motorcycle
users in Vietnam use these two models. On the other hand, the sales of SHi 125/150
does not grow ideally, so there is a necessity to change its promotion for SHi 125/150.

Opportunities.
Large market the popularity of motorbike
The increase in population
The increase in the number of people of working age
The growth of education level the increase in the quality-conscious consumers
The rise in income and living standard
The independence of women
The importance of relationship among Vietnamese people
High level of air pollution to introduce the eco-friendly model
The increase in the number of foreign workers in Vietnam
Since Vietnam has significantly grown recent few years, there are various opportunities
in this market. Firstly, as following the growth of economy, the income level has grown
dramatically. This makes consumers affordable to purchase more expensive products

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32

compared to they were in few years ago; this leads to the increase in consumer
spending. In addition, the growth of education level also positively impacts on the sales
of Hondas products. Education helps consumers to be more quality-conscious rather
than price-conscious, especially for a large purchase such as motorcycles or
smartphones. Accordingly, Honda would be able to justify high price charged to
products by emphasizing those high quality and durability. Furthermore, air pollution in
Vietnam might also be an opportunity to promote eco-friendly products. Many
researches showed that the level of air pollution in Vietnam is serious level, and there is
a necessity to deal with this problem. Therefore, the sales of eco-friendly products
would increase if consumers are environmental-conscious. Finally, the increase in the
number of foreign workers might be able to create a new market in Vietnam. Since the
government implemented doi moi policy, many foreign companies have invested in
Vietnamese market because of its great potential of growth. This leads to increase the
number of foreign workers working in Vietnam. Hence, this is also one of the
opportunities to expand the market and increase the sales of products.
Threats.
Saturated market the demand decline in 13% in 2013 and the decline in sales in
Vietnamese market
Alternatives from competitors
Finally, we point out two threats Honda currently faces: market saturation and the
increase in the number of competing products. The biggest problem Honda faces is
market saturation. According to Honda (2014), the demand for motorcycles in the
Vietnamese market decline in roughly 13% compared to the previous year. This
negatively impact on the sales of motorcycles in the entire market. Therefore, Honda

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33

must deal with this problem by finding a new way. Honda might be able to launch a new
campaign to promote the sales, or to find a new market where it has never focused on.
In addition, the increase in the number of competing products and alternatives from
competitors is another threat Honda should react. Recently, other competitors slightly
increase the market share. Honda still has a huge market share in the market, but the
growth of competitors might be a threat in the future.
To sum up this part, even though Honda is dominant in the market, it also
possesses weaknesses and faces threats which it must deal with. Honda can increase its
sales by overcoming its weaknesses; it should boost the sales of high-price model either.
Honda should deal with the saturated market since this will influence on the sales for a
long term. Accordingly, based on the SWOT factors we presented in this part, we will
make three recommendations for Hondas marketing strategy to increase the sales of
SHi 125/150 in next part.
Recommendations
Based on our analysis mentioned above, we recommends three marketing
strategies for the sales of SHi 125/150; market development for high-income segment;
market development for foreigners staying in Vietnam; and the extension of customer
services.
Market development for high-income segment
SHi 125/150 is known as one of the most valuable motorcycle brands of
Honda. Therefore, our first recommendation is target to people with high income, who
afford the chosen product. Going with this target segment is a challenge for Honda that
people with high income tends to have many options in choosing a means of
transportation. However, we believe that this is not impossible if we deeply understand

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our target consumer and make an appropriate marketing plan to promote SHi 125/150 to
them.
Reasons to choose this market. There are two reasons why we choose this
target market. First of all, we would like to take advantage of changes in the economics
of Ho Chi Minh City. According to economic analysis, there has been a growth in the
level of income of Vietnamese people, especially people living in Ho Chi Minh City.
Therefore, the consumer is more likely to be convinced by showing them benefits that
they can get by buying this brand. In other words, people with high income feel easier
to spend large money on something than few years ago.
The other reason for choosing this market is because well-off people tend to
want to get attention from others by showing off. They usually want big houses and
luxury clothes, and a vehicle is not an exception. Although there was a decline in the
demand of motorcycles in Vietnam (Honda, 2014) and today more and more people like
to have a car instead of a motorcycle, we believe that we can take this challenge and
turn it into an advantage in our advertising strategy.
Advertising strategy. In order to solve the problem we have mentioned below
and to promote SHi 125/150 to our target segment, the first thing we need to do is
showing our consumer the reality. The reality we would like to mention is about the
traffic jam. Nowadays, traffic jam is at the alert rate. It can occur anytime and at
anywhere. Moreover, the street system in Ho Chi Minh City consists of many small
streets. Therefore, it is extremely difficult for people to travel round the city with a car
instead of a motorcycle. This reality is an advantage for Honda to get back its consumer,
especially its potential consumers for SHi 125/150.
Another strategy we use in advertising SHi 125/150 is showing the benefits that our

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35

product can provide to the consumer, especially in saving fuel and also contributing to
the environment, in order to distract the problem with pricing. Honda should focus on
its modern and helpful technologies which are PMG-FI, IDLING stop and the most
significant is the smart key, which is first used in motorcycle market in Ho Chi Minh
City. These technologies should be stand out in our advertising in order to grab the
attention of its target consumers. Furthermore, focusing on the design and color variety
are also useful ways to attract our consumer. Because our target consumer is high class
people, therefore; they pay lots of attention in the design.
According to the advertising strategy, we recommend three methods to promote
SHi 125/150 to our target consumers. First, Honda should promote on advertising on
newspaper, online website, and television. These things are too common in advertising.
However, these are extremely effective ways to boost our sale because people with high
income, especially business people, usually update news in those channels. The second
suggestion is about the display of SHi 125/150 in our showrooms. We should make sure
places for SH 125/150 to stand out and express the luxurious image in order to get
attention from people. Finally, we should take advantage in being sponsor in business
events so as to advertise its product to the target market.
Market development for foreigners
Since the decline in the demand for motorcycles in Vietnam; the demand
decline in roughly 13% in 2013 (Honda, 2014), Honda must seek the market which can
cover the sales decrease in the entire market. Honda is dominant in the Vietnamese
market, and this means that Honda must find the market that it has not focused on ever.
Therefore, we suggest the market development for foreigners staying in Vietnam, both
foreign workers and people who decide to settle in Vietnam, as a new, niche market to

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promote SHi 125/150. This is not enough large market to cover the sales decrease in the
entire market, but this market would be highly profitable if Honda can succeed in
promoting SHi 125/150, the most expensive brand.
Reasons to choose this market. There are mainly three reasons why we
choose this market to promote SHi 125/150. Firstly, as it was mentioned above, the
Vietnamese motorcycle market has gradually been saturated, and actually the demand
for motorcycles decreases continually. Therefore, Honda must find a new market to
promote its brands. There is a good opportunity that might be a good market for Honda.
Since the government implemented doi moi, it has strongly encouraged foreign direct
investment (FDI) from other countries. In addition, the rapid economic growth makes
Vietnam a potential business field for foreign companies. Accordingly, many foreign
companies start their businesses in Vietnam, and this leads the increase in the number of
foreign workers in Vietnam. In fact, we can see a lot of foreigners in daily life, and this
is also an evidence that supports many foreigners are staying in Vietnam. Hence, the
current increase in the number of foreigners in Vietnam creates a niche market that
enables Honda to promote SHi 125/150. Furthermore, we assume that there is no strong
competition in this market since main competitors: YAMAHA, Suzuki, Piaggio, and
San Young Motor, do not provide the website in English. Websites are crucial sources to
communicate with consumers and provide large amount of information. No English
websites mean nobody focuses on this niche market; thus, this market would be
potential without any strong competitors.
Secondly, motorcycle is necessary to live in Vietnam as a main transportation,
and foreign workers also realize it within few weeks after they come to Vietnam.
Because usually foreign workers work in another country from three to five years or

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more than five years, so they would have the strong demands for a motorcycle. This is
an intrinsic demand derived from consumers themselves; therefore, this is a potential
opportunity to promote the sales of motorcycles. Finally, foreigners simply more afford
the high-price model than Vietnamese consumers. Since they work in another country,
their salary is much higher than when they work in the original country. In addition, the
living expenses is much lower in Vietnam than in other countries, so they are relatively
able to spend a large amount of money in Vietnam. In short, these three reasons would
support our recommendation to develop a market in a new demographic segment:
foreigners staying in Vietnam.
Advertising strategy. In order to promote the sales of SHi 125/150 to
foreigners, at first, Honda must get their attention to this brand. Through the process to
get an attention from the target segment, we recommend to use the burner
advertisements on the Website. Specifically, because most of our target is foreign
workers, Honda should put burners on news Website that foreigners use to check the
daily news in Vietnam. For example, VnExpress and Thanh Nien News are famous
news websites that are frequently visited by foreigners. Checking daily news is a daily
routine for workers, and therefore, most of our targets habitually visit these websites.
Therefore, these websites enable Honda to expose our targets to burner advertisements,
and this encourages unconscious learning about SHi 125/150. Our target unconsciously
learn the existence of this brand through vising these websites, and this would be an
advantage when Honda promotes the sales of this brand.
Secondly, Honda should put the advertisements on magazines and guidebooks
about Vietnam to get an interest from foreigners. These are also potential sources to
expose foreigners to the advertisements because people visit to another country

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definitely check the information about that country, and the demand for motorcycles
occur within few weeks after they come to Vietnam. This indicates that foreigners who
come to Vietnam check the information about Vietnam when the demand for a
motorcycle occurs in their mind. Therefore, Honda can provide the information about
the brand at the good time by putting advertisements on these sources. The
advertisements should include two information: the necessity of motorcycles in the
Vietnamese life and the attractiveness of SHi 125/150. The former information supports
to strength their recognition that a motorcycle is necessary to live in Vietnam. The latter
information affects them to put SHi 125/150 in their consideration sets. This step helps
increase the recognition of the brand, and this would work positively when the targets
seriously consider the purchase of a motorcycle. When they step in the process of
information search, they start search about the brand that is in their consideration sets.
Therefore, this step is important to get an interest for the brand from foreigners, and this
connects to enhance the effectiveness of next step.
Finally, Honda must create the attractive website to promote the sales of SHi
125/150. After Honda succeeded in getting the interest from the targets, they visit the
website to research further information about the brand. As the major promise, Honda
must provide the website in English. There is no function that can translate all
information in the website to English. Therefore, Honda must equip the translation
function in its website. Then, in order to convince the targets to purchase the brand,
Honda should combine three types of appeals effectively. At first, because consumers
usually involve in extended purchase decision process when they choose a motorcycle,
rational appeals are effective. Honda should appeal the important product attributes and
the benefits consumer can gain by purchasing the brand. In addition, emotional appeals

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can reinforce consumers willingness to purchase this brand. Honda must maintain the
sophisticated image of this brand, so SHi 125/150 must be presented as a cool
motorcycle to motivate foreigners to buy the brand. Furthermore, in this case, empathy
with their experiences is also effective as an emotional appeal. Most foreigners
especially from developed countries feel the air in Vietnam is extremely bad when they
come there for the first time. In fact, the Japanese students felt a heavier air when they
breathe in the first few weeks. Honda can empathize with this experience, and this
contributes to strengthening the influence of moral appeal. As a moral appeal, Honda
must emphasize the eco-friendliness of this brand, and appeal that it is necessary to
reduce CO2 emissions in Vietnam. Obviously, many research showed that Vietnam is
one of the polluted country in terms of air, and emissions from motorcycles counts for
70% of air pollution in Vietnam. Accordingly, there is a great necessity to introduce ecofriendly motorcycle in the Vietnamese market; hence, this moral appeal is effective to
convince the targets. Moreover, foreigners, especially from Western countries, tend to
be more environmental conscious, and this is another reason that supports the
effectiveness of moral appeal for foreigners.
Through the advertising strategy, we suggest three ways and steps to attract
foreigners staying in Vietnam. Firstly, Honda should get an attention from the targets by
using banners in news Websites. Secondly, Honda should put advertisements in
magazines and guidebooks about Vietnam, and this is a step to make them interested in
the brand. Finally, Honda must convince customers on its website by providing the
website in English and using the combination of three types of appeals. We hope this is
the best process to attract foreigners to purchase SHi 125/150, and therefore, this is our
recommendation for the market development for foreigners staying in Vietnam.

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The extension of customer service


Our final recommendation is the extension of customer service. In this part, we
suggest two ways to extend the customer services. In the last two recommendations, we
suggested that Honda should strongly promote the sales of SHi 125/150 for people who
afford this high-price brand: high-income segment and foreigners. SHi 125/ 150 is the
most expensive brand in the Hondas product lineup, and this indicates this brand would
be high quality and perform better than other brands. In order to strength this
recognition among consumers, we suggest the extension of warranty for SHi 125/150 to
three years, one year longer than other brands; Honda provides two years or 20.000 km
warranty for every product. This helps to make consumers recognize more strongly SHi
125/150 as high-quality and durable brand, and increase the possibility that SHi 125/150
would be in consumers consideration sets when they think the purchase of a
motorcycle. This also works to differentiate SHi 125/150 from other brands, and
contributes to increasing its value among consumers. As a result, this extension of
warranty also helps to promote the sales of SHi 125/150.
Finally, we suggest Honda should promote the sales of SHi 125/150 by helping
the consumers to afford it. Accordingly, we suggest a special deal for the purchase of
SHi 125/150; Honda accounts for the interest of loans to make a purchase of SHi
125/150; consumers can purchase it with zero interest. This enables consumers to
decide to purchase SHi 125/150 since the interest of loans is one of the burdens for
consumers when they make a big purchase. This is a not significantly big deal for
consumers, but this would be one of the sources that pushes consumers to make a
purchase decision. There are two benefits by offering this deal to consumers. Firstly, for
Honda itself, it can offer the discount without changing the price. Sometimes changing

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the price might damage the brand image; especially SHi 125/150 is the luxurious
product. Therefore, this is a good strategy for Honda to attract consumers without
harming the image of brand. Secondly, for consumers, simply they have to pay less for
purchasing SHi 125/150. This is obviously a good deal for consumers: thus, this can
promote the sales of SHi 125/150.
To sum up our recommendations, we mainly make three recommendations:
market development for high-income segment, foreigners, and the extension of
customer services. At first, Honda should strongly promote SHi 125/150 to high-income
segment. In addition, foreign workers in Vietnam now create a small but attractive
market; therefore, Honda should attract foreign workers to increase the sales of SHi
125/150. Finally, Honda should provide special deals for SHi125/150. The extension of
warranty to three years helps to reinforce customers perception for this brand.
Furthermore, zero interest for the purchase of this brand will hugely affect consumers
purchase decisions. Accordingly, by implementing our three recommendations in next
year, Honda can increase the sales of SHi 125/150. We hope these our recommendations
will be helpful for Honda to increase its sales in next year.
The problem of recall for SHi 125/150
According to Vnexpress.net and Thanhnien.com.vn, on October 26th, Honda
official announced that it recognized the problem with the smart-key; smart-key turned
off automatically after 10 minute rather than 10 days. Honda official urged the
customers to go to Hondas workshop to fix it. With every motorbike, customer could
get free oil change. On November 25th, the government required Honda to recall all
fault products, because it is against the rule for fault advertising product. There has been
no official news from Honda yet.

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Immediate deals for SHi 125/150 users


Honda should focus how the customer will travel during the repairing time.
Accordingly, it should try to provide transportation for everyone while minimizing their
cost. There are 2 ways Honda can do this.
Plan A. Honda can cooperate with grab-taxi or grab-bike, to provide free of
charge taxi drive for customers with a distance (like only limited in the city). Since
Grab-Taxi and -bike is very cheap in Vietnam, they had excellent variety of car or
motorbike at their use, and this is a very effective way to improve both companies
images.
Plan B. Honda can provide gas coupon (like 500 thousand VND), to provide
their gas consumption while consumers use other form of transportation. Since the
amount of cost will be easier to predict and more controllable and these are still in
reasonable cost, this plan would be actionable. It can keep the customers happy because
the gas price is really high.

Deals after the problem is resolved


To show apology for consumers and stimulate the sales after this case, Honda
can use this action plan.
Plan: Honda should open more events, like A day with Honda. This event can
demonstrate SHi 125/150 is still a very high-quality product, and can provide best
driving experience. Furthermore, this helps to show that consumers trusts are still in the
right place.

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In summary, since Honda has the problem that it must address as soon as
possible, we suggested both immediate deals and after deals to maintain consumers
trust for Honda itself. This was the fault of Honda; therefore, it must deal with the
problem as quickly as it can. If Honda will fail to deal with this problem properly, this
will hugely affect the sales of all products Honda provide in the market. Accordingly,
we hope that our recommendation of the deals for this problem will be also helpful for
Honda to resolve this problem.

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