Final Project - Honda Brio Sedan

MARKETING PLAN FOR

HONDA BRIO SEDAN

Presented By:

Sneha Raina – 9Pritesh Salian – 30

Mayank Mehta – 49Ananya Kumar – 71Ashwin Verma – 106

Indian Automobile Industry Largest 3 wheeler market

in the world 2nd largest 2 wheeler

market in the world 7th largest Passenger car

market in Asia & 10th Largest in the world

5th largest commercial vehicle market in the world

Population of automobiles in India more than 110 million and growing at the rate of 12% p.a.

Passenger Vehicles Market

Passenger car sales increased by 4.24 %

Passenger cars are expected to grow at 10-12%

The passenger vehicle market of India will cross Japan by 2017-18

India’s passenger vehicle production projections:2010-2.6 million2015-5.1 million2020-9.7 million

Factors Contributing To Growth Of PV’s

Passenger Car Penetration In India

Sedan Market in India

•Second largest by volume

•Car sales grew by only 2.8% in May, citing high fuel prices and interest rates on retail loans

•Sedan segment has grown by 37% in May this year

•Entry level and mid-size sedan cars priced between R6 lakh and 10 lakh are one of the fastest growing categories in cars

• Diesel variants continue to grow at healthy double digit levels

Target Market Demographics Honda has 6 models in its portfolio Brio, Jazz, City, Civic,

Accord, CR-V Honda has segmented its market in a way that its Accord

& CR-V is for Elite class, Honda Civic for Upper Middle class, Honda City, Brio and Jazz for only Middle class

Demographic: 30 -50 years old M/F; Social Class AB; Single and Married

Inclined towards younger buyers Lifestyle: Working class, Established in work and has

buying power, fairly successful, wants value for money and prestige in what they drive

Behavior Factors: Replaces car every 5-7 years, Efficient fuel consumption

SWOT ANALYSIS

Strengths: Strong Brand Equity Loyalty rate of 62% Annual advertising Budget: $700-800

Million. Honda Brio (Hatchback): One of the best

selling cars in India Premium products

SWOT ANALYSIS

Weaknesses: High cost structure Relies heavily on Civic and Accord

(Sedans) which contributes 55% to the total sales

Depends on North America for 85% of its profits

Honda Brio sedan only the first Honda car to have a diesel engine

SWOT ANALYSIS

Opportunities: Cater to the middle class segment of

customers Extend the existing variants to Diesel

engines Launch a Hybrid version Enter emerging markets

SWOT ANALYSIS

Threats: Strong competition from the existing

players like Maruti Suzuki, Hyundai etc. Rising fuel prices Growing popularity of Hybrid/Fuel

efficient cars. Government policies for the Automobile

sector

Product Details

Type: Sedan

Expected Launch in India: Fourth Quarter, 2012

Fuel type: Diesel

Seating Capacity: 5

Product Details

Distribution: Distribution through a network of 137

authorised dealership facilities in 85 cities.Target Audience: Middle and upper middle class. Competitive

pricing.Services: Honda dealership centres are based on the

"3S Facility" format, offering complete range of Sales, Service and Spares services to its customers.

Marketing Strategy

Mission: Support the current sales To enter the entry level sedan

(C1)segment sedan market To enter the diesel segment Increase the market share Target the untapped market

Marketing Objectives

Increase the market share in Sedan segment.

Increase the total number of units sold.

Total Units sold are less due to absence of mid-segment sedans.

Source: motorbeam.com

Marketing Objectives

Increasing customer base by entering Diesel segment.

Increase the overall market share from 4.86% to 10%.

Competition Analysis

Direct Competitors

Verito

EtiosDzire

Indigo Manza

Attributes and Pricing

Maruti Suzuki Dzire Toyota Etios Tata Manza

Engine Petrol Diesel Petrol Diesel Petrol Diesel

1.3 litre 85.8bhp AlTec32 engine

1.3 litre 73.9bhp DDiS engine w/ Common Rail multi injection technology

1.5-litre 88.7bhp 16Valve Petrol Engine

1.4-litre 68bhp 8V SOHC Diesel Engine

1.4-litre 4 cylinder 88.8bhp, MPFI, Petrol With Intelligent Port Resizing

1.3-litre 88.8bhp 16V Common Rail Diesel Engine

Price Rs 5,13,270* Rs 6,25,429* Rs.5,41,185* Rs 6,73,507* Rs 5,89,898* Rs 6,65,650*

*Ex – Showroom Mumbai

Approach Observed - Value Based Pricing

Indirect Competitors

Price - Rs 5,81,882* - Rs 7,36,439*

Price - Rs 5,06,000* - Rs 6,43,639*

*Ex – Showroom Mumbai

Current Target Markets

Mid Size Hatchback (B2 Segment) Brio

Premium Hatchback (B2 Segment) Jazz

Mid Size Sedan (C2 Segment) City

Luxury Sedan (D2 Segment) Accord

Compact Luxury SUV (D2 Segment) CRV

Positioning

EarlierPositioning Based on Pricing

PresentPositioning Based on Competitors

Marketing Mix

ProductBrio Sedan

Based On

Petrol

Displacement 1198cc, i-VTEC

Maximum Power 88 Bhp @ 6000 rpm

Maximum Torque 109 Nm @ 4600 rpm

Diesel

Displacement 1198cc, i-DTEC

Maximum Power 70 Bhp @ 4500 rpm

Maximum Torque 170 Nm @ 2000 rpm

The Brio Platform

Price

Petrol Honda Brio sedan E MT – Rs. 5, 15, 000 Honda Brio sedan S MT – Rs. 5, 67, 000 Honda Brio S Option MT – Rs. 6, 60, 000

Diesel Honda Brio sedan E MT Diesel – Rs. 6, 15, 000 Honda Brio sedan S MT Diesel – Rs. 6, 79, 000 Honda Brio S Option MT Diesel – Rs. 7, 60, 000

Promotion

1) Television:- 20 repetitions per day for the first 3

months across 5 channels. Around 10 repetitions for the next three

months across 5 channels.2) Radio:- 10 repetitions for 3 months across 4

channels.3) Hoardings:- 200 hoardings for 3 months across 20

cities.

Place

Current Dealership Network

Strategy

Pull – Push Strategy

SALES FORECAST

Sedan Segment grew by 37% in May, 2012

Entry level Sedan grew by 40% Share of Diesel cars in the entry level

Sedan segment grew from 60% to 85% C1 Sedan segment is expected to grow

by 28% Sales forecast accounting for 8-10% of

the C1 segment

BREAK EVEN ANALYSIS

0 10000 20000 30000 400000

50000

100000

150000

200000

250000

Break Even Chart

RevenueTotal Cost

No. of Units

Sale

s V

alu

e

3721.73 Mil-lion

5838

Excel Working

BREAK EVEN CALCULATION Contribution Margin Ratio = Selling

Price Per Unit – Variable Cost Per Unit/Selling Price Per Unit*100=637500-385000/637500*100=39.61%

Break Even Sales = Fixed Cost / Contribution Margin Ratio=14742/39.61%=Rs 3721.73 Millions or 5838 units

Remuneration

The remuneration offered in Honda Cars India may differ on the basis of various attributes such as candidates’ qualification, experience, job profile, and so on. Generally speaking, the pay scale offered by the Automobile Sector is comparatively better when compared to the other sectors. The B.Tech / B.E in Automobile Engineering graduates can earn a good salary in the starting stage itself. The average monthly income for them would be around Rs. 20,000/- and the salary will rise after the training

period.

Honda Hiring

As a strategy for hiring, more than 80 percent of Honda hiring is of fresher or people with less than five years of experience.

Honda Pay Scale Executive- Approx 4,10,000 to 4,44,000 includes Bonus Warehouse Executive- 3,70,000 to 4,20,000 plus around

70,000 as Bonus Senior Executive-3,70,000 to 4,20,000 plus around 24,000

as Bonus Exclusive Dealer Trainer-4,06,000 to 5,00,000 plus around

16,000 as Bonus Most Popular States for Dealership are kerala and

Maharashtra for Honda Cars

QCC

Quality Circles are (informal) groups of employees who voluntarily meet together on a regular basis to identify, define, analyze and solve work related problems.

Usually the members of a particular team (quality circle) should be from the same work area or who do similar work so that the problems they select will be familiar to all of them. In addition, interdepartmental or cross functional quality circles may also be formed.

An ideal size of quality circle is seven to eight members. But the number of members in a quality circle can vary.

Objectives of Quality Circles Promote job involvement

Create problem solving capability

Improve communication

Promote leadership qualities

Promote personal development

Improve morale through closer identity of employee objectives with organization's objectives

Kaizen Method

Helpful For Global Company

Localisation

Suggestions for Improvement

GET PROGRAM

Structured job rotation program for multi-skilling

Training at our overseas facilities for technical skills transfer

Assignments with expats for know-how learning

Assigning expats as Project members or leaders for important company wide projects

Sending people to work in overseas factories for two to three years to develop managerial skills, cross cultural experiences and developing leadership skills besides regular skill enhancement

Honda’s Philosophy

Respect for individual

Creation of three joys

Equality, initiative and trust

e.g.-Honda has common canteens, locker rooms, and uniforms, which at an external level give a feeling of oneness

On-the-Chance training

Higher levels of engagement

Process of giving calculated and pre-planned chances in the way of projects and assignments away from normal work.

Helps in honing skills and uncovering potentials that were previously unknown

Employees are encouraged to reach out to the management with various solutions about what they feel will work rather than asking them what needs to be done

Honda’s Guiding Principals Transparency in our decision making processes and consensus in reaching

decisions that impact our associates Pursuing ‘equality’  in our dealings, systems and processes that reduce the

perceived "divide" between the management and line associates Constant communication with union and also associates on the shop floor

through daily morning meetings , joint welfare committee meetings [ e.g. canteen, transport, insurance etc.], regular union-management interface, joint participation in CSR activities and community service etc.

Speed in resolving grievances and personal related issues One-on-one interactions of selected Vice President level staff with the

unions for sharing business outlook, challenges, priorities, cost data etc. and also hearing the concerns and priorities of the shop floor associates

Giving a clear career path to our line associates to graduate on to supervisory and managerial positions within the company. Today, Honda have more than 70 people who have graduated on to positions of Team Leaders and above. While it may seem like a very simple concept, but before such transitions, Honda also take them through a well-structured program that includes exposure to relevant skills, training in personality grooming, English, Computer skills, data analysis etc

Executive Selection Scheme

Honda motors has always strived towards excellence both in its efforts towards total integration as well as in recognising its talented employees. The Company is constantly creating prestigious programmes to reward and retain its outstanding employees.

IESS is a fast track programme for accelerated growth of high potential .

The selection involves a 3 stage process:* Written Test* Power Interview* Assessment Centre

Short-listed candidates are required to go through an interview with the executive directors.

They are promoted to Manager's level thereby saving almost 10 to 13 years of work time.

Honda- Contingency

Honda is ready to face the cyclic changes that are here to stay.

Today it may be petrol price hike or the adverse exchange

rate impact. It is very important that corporations build internal constitutions

that are more resilient to wide fluctuations in their business fortunes, are agile, and more predictive than being reactive and have lean operations

Regular communication with stakeholders, including employees is the key to managing anxieties during lean phases of business cycle, undue expectations during good times and fear and rumors during bad times.

Being honest and upright with clear sharing of information at all times by the management goes a long way in soothing such anxieties.

THANK YOU