EXECUTIVE SUMMARY

Purpose:
Today lots of competition in two-wheeler industries
Faced by marketer, so every marketer must be know the
consumer preference about two-wheeler and provide
them their want. This research measures the different
components of consumer preference, which are help and
provide guidance to those decisions.
Research Objectives:
To find out the attribute which are consider by consumer
whilepurchase two-wheeler.
To determine the perception of consumer about different
Hero Honda two-wheeler.
To know the image of Hero-Honda in the mind of
consumer.
To determine the degree of association between the
different Hero
Honda two-wheeler models and demographic variables
with respect to satisfaction.
Design/Methodology/Approach:
This is carried out using descriptive research design
incorporating quantitative survey of 180 respondents in
Navsari city. Each respondent
was personally contacted to fill up the questionnaire.
Data analysis involved of chi-square analysis tool and t-
test for conducting inferential statistics. SPSS software
was used to facilitate data analysis.
Findings:
 Out of 180 respondents 127 respondents already have
two-wheeler, 53 have no two-wheeler it means they first
prefer Hero Honda. out of 127, 36 have Hero-Honda it
means they are loyal towards Hero-Honda, and other 91
want to change their two-wheeler.
 Most of respondents are not desire stylish and stunning
look, more mileage, less weight & more warranty.
 Most of respondents want to have powerful two-
wheeler in affordable price. They also desire better
service from dealer.
 Most of respondents perceived that Hero-Honda gives
stylish &stunning look, less maintenance, more powerful,
and dealer gives more warranty.
 Most of respondents perceived that Hero-Honda is not
affordable price and their dealer not give better service.
 There is significant association between age & model,
income & model, occupation & model, and also
education & model.
 There is strong relation between education & model,
and income & model.
 There is no strong relation between age & model, and
occupation & model.
Recommendations:
 According to respondents Hero-Honda’s dealer not
provide better service, so dealer should have to train
service provider so that they courteous with their
customers.
 Most of customer can desire better service from dealer,
so company can suggest dealers to improve their service
and also guideline about service improvement, otherwise
directly impact on sells.
 Most of customer can desire two-wheeler more
powerful in affordable price, so marketer can consider
those points and improve technology and tri to satisfy
customer’s desire want.
 Dealer communicates with customer and gives
awareness about unique features of Hero-Honda and also
solves their confusion & misunderstanding because most
of people have not aware about their unique features.
 Here, that their strong relation between income and
model & education and model. So, marketer considers
those points and gives advertisement which influences
more those consumers.

INTRODUCTION:

Honda has been the world's largest motorcycle

manufacturer since 1959, as well as the world's largest
manufacturer of internal combustion engines measured
by volume, producing more than 14 million internal
combustion engines each year. Honda surpassed Nissan
in 2001 to become the second-largest Japanese
automobile manufacturer. As of August 2008, Honda
surpassed Chrysler as the fourth largest automobile
manufacturer in the United States. Honda is the sixth
largest automobile manufacturer in the world.

Honda was the first Japanese automobile manufacturer

to release a dedicated luxury brand, Acura, in 1986. Aside
from their core automobile and motorcycle businesses,
Honda also manufactures garden equipment, marine
engines, personal watercraft and power generators,
amongst others. Since 1986, Honda has been involved
with artificial intelligence/robotics research and released
their ASIM Robot in 2000. They have also ventured into
aerospace with the establishment of GE Honda Aero
Engines in 2004 and the Honda HA-420 Honda Jet,
scheduled to be released in 2011. Honda spends about
5% of its revenues into R&D.
Honda Mission and Vision
Statements Analysis:
Honda Mission:
Honda mission statement is “maintaining a global
viewpoint, we are dedicated to supplying products of the
highest quality, yet at a reasonable price for worldwide
customer satisfaction.” The statement shows that the
value of the products that the company supplies top the
list of its priorities. It has the following main parts:

Improvement of life
Improving affordability
Honda is a company that has revolutionized the design of
automobiles and other power equipment through the
new inventions it has been gradually rolling over the
years. The company has also raised the quality bar
considering how much it emphasizes on both aesthetic
appeal and safety. In fact, it is already looking to launch a
collusion-free future. Despite the impressive quality,
Honda offers its products at incredibly affordable rates.
This explains why its brand is rapidly drawing attention
globally.

Vision Statement:
Honda vision statement is “to serve people worldwide
with the joy of expanding their life’s potential – Lead the
advancement of mobility and enable people everywhere
in the world to improve their daily lives.” The company
has been pioneering designs that improve mobility not
only in driving and riding but also in flying and walking.
This is what this statement represents. It can be split into
two parts:

Lead in mobility advancements

Global reach
In the first part, Honda shows its prowess by heavily
investing in the innovation to constantly bring its
customers new value in the market. It ensures that all its
products meet specific criteria for environmental
sustainability, safety, as well as other crucial features. The
ability of Honda to recognize different regional needs and
tailoring its products to meet all these expectations has
expanded its markets beyond Japan making it a global
company as shown by the second part of its vision
statement.

SWOT analysis of Honda:

Competence in engine manufacturing -
company’s core product.

All Honda’s businesses are built around the engines - its

core product. The company’s first engines were built for
motorcycles and power equipment, but were later
produced for cars and marine vehicles. Honda is the
world’s largest engine manufacturer, which produced
over 27 million units of engines for automotive,
motorcycle, marine, and power equipment products, in
2015.[3]

The company has lots of experience in manufacturing

quality and well-performing engines. Its engines are
praised for their durability, easiness to start, quietness,
fuel efficiency and reliability. According to Reliability
Index,[4] Honda’s car engines are some the most reliable
in the industry.

Engines are the key to motor products and the company’s

competence in manufacturing engines is a competitive
advantage few rivals can match.
Diversified product portfolio:

Honda operates 4 different divisions.

Motorcycle business (12.3% revenue)
Automobile business (72.8% revenue)
Power product and other business (2.3% revenue)
Financial Services (12.6% revenue)
Honda offers many products to consumers including
engines, cars, motorcycles, jets, robots, generators,
lawnmowers, water pumps, as well as many other power
equipment products. While the cars generate the most
revenue for Honda, its overall product portfolio is fairly
diversified, when compared to Volkswagen, Toyota,
General Motors, or Briggs and Stratton (in an engine
industry).
Figure 1. Percentage of Sales Revenue by Business
Honda's revenue breakdown by business segment.
Honda earns 72.8% of its revenue through automotive
business. Source: Honda’s Financial Report.

3. Dominance in motorcycle and engine industries

leading to a high brand awareness Honda is a huge
company dominating in most of the markets it operates
in, including engines and motorcycles.

The company is the leading manufacturer of small,

general-purpose engines for commercial, rental industry,
and consumer applications.[5] Honda is also the leading
global manufacturer of motorcycles having 22.1% of the
total market share in the first half of 2016.[1] Company’s
dominance in both of these markets have increased its
brand recognition and reputation.

According to Interbrand [6] and Forbes,[7] Honda is the

21st and 23rd most valuable brand in the world, worth
US$22.1 billion and US$25.2 billion, respectively. Brand
value is closely related to brand awareness and its
reputation and only few other companies, such as Toyota,
BMW and Mercedes-Benz, can compare with Honda in
terms of a brand value.

4. Strong position in Asia’s motorcycle markets:

Motorcycle business generates 12.3% of total Honda’s

sales and is the third largest revenue group for the
company. The company has sold 17,592 units of
motorcycles and all-terrain vehicles in 2016 alone and
captured 22.1% of the world’s motorcycle market in the
first half of 2016.

Asia is the main geographic segment for Honda’s

motorcycle business, where the company has sold 15.1
million units or over 88.7% of its total motorcycles,
generating ¥1,107.6 billion in revenue.

Asia-Pacific region, which includes such countries as

China, India, Vietnam, Thailand, the Philippines,
Malaysia, Indonesia, Australia and Japan, is the largest
motorcycle region in the world and Honda’s strong
position in it is a powerful competitive advantage.
Weaknesses:
1. Dependence on North America to generate most of the
revenue

Honda depends on North America region, which mainly

includes the U.S. and Canada, to generate 55.6% of the
company’s total revenue.

Figure 2. Percentage of Sales Revenue by Region Honda's

revenue breakdown by geographic area. Honda earns
55.6% of its revenue in North America alone.
Source: Honda’s Financial Report.

Honda’s reliance on North America grew from 49.3% of

the total sales in 2014 to 55.6% of the total sales in 2016.
At the moment, North America is the main driver behind
company’s growth where the motorcycle revenue grew
20% and the automobile revenue grew by 19%.
Nonetheless, the U.S. and Canada are saturated markets
and Honda will find it hard to maintain the same level of
growth in these markets.The company is also becoming
more vulnerable to overall negative changes in North
America’s markets.

2. Low investments in research and development (R&D)

leading to fewer innovative products Honda has spent
US$5.4 billion for R&D in 2015. This amounted to 4.5% of
the company’s total revenue.

Low investments in R&D lead to fewer innovative

products and significantly undermine the company’s
abilities to compete in the future. The company should
focus its US$5.4 billion R&D investments to certain areas
(like Hyundai does), which would erase company’s low
R&D budget disadvantage and would result in innovative
products.

Opportunities:
1. Increasing government regulations
Many governments around the world are committed to
reducing the greenhouse gas emissions and are
encouraging fuel efficiency initiatives. Such
environmental initiatives may increase production costs
for the car manufacturers and these costs will be either
passed to price sensitive consumers or will decrease the
company’s profits. Honda may take advantage of this by
introducing more car models running only Hydrogen fuel
cells and bypassing all the government regulations
associated with the greenhouse gas emissions.

2. Improving U.S. economy:

Signs of an improving economy and rising consumer

confidence have been reflected in the strongest increase
in new vehicle sales for more than a decade in the U.S.
market. 17.5 million new units were sold in 2015, a 5.7%
increase over 2014. Interest rates in the U.S. have been
low for several years and are forecast to remain that way
for the foreseeable future. In such economic conditions,
Honda has an opportunity to capture higher market
share and increase sales in the U.S. automotive market.
3. Timing and frequency of new model releases:

The market share of the automotive companies is

significantly impacted by the timing and frequency of
new model releases. Historically, new models have
tended to have major upgrades every 4 or 5 years with
only minor modifications in between. However, due to
the rising consumer expectations in relation to in-car
technology and the competitive nature of the industry,
there is an argument to release upgraded models more
frequently. Honda is well-positioned to be able to do this.

4. Low fuel prices are increasing the demand for

pickup trucks and SUVs:

Currently, fuel prices are the lowest in a decade. Such

situation has encouraged consumers to buy big fuel-
inefficient vehicles such as SUVs and pickup trucks.
Traditionally, Honda’s main focus was on smaller cars like
Honda Civic and sedans such as Honda Accord, but in the
current situation, where fuel prices are low, the company
has introduced its next generation pickup truck Ridgeline
and redesigned its CR-V sport utility vehicle to meet the
demand for the bigger vehicles.

The trend of low fuel prices is likely to stay and Honda

should introduce more models of pickup trucks and SUVs
to take an advantage of the growing market for these
vehicles and to increase company’s profitability.

Threats:
1. Increased competition

Honda is faced with an ever increased competition from

the traditional automotive companies, the new players
and saturation of its main markets. In Asia, the
company’s key motorcycle region, markets are nearly
saturated. In 2016, Honda’s motorcycle revenue grew by
only 5.4% in Asia, compared to 20.3% growth in North
America region. The company faces many new entrants
in India and China, which offer similar quality
motorcycles and scooters for lower price than Honda.
Honda’s automotive business is also experiencing the
slowing growth of the automotive markets and the
increased competition from the new Chinese
manufacturers. The company’s international rivals, such
as Toyota, Ford, General Motors, Volkswagen and
Hyundai, all have larger budgets and could use them to
aggressively take market share from Honda.

New companies, such as Tesla and even Google, which

tries to build self-driving cars are also threatening the
traditional automotive industry. The competition is
further fueled by the fact that the global automotive
production capacity far exceeds the demand. In 2015,
there was an estimated global excess production capacity
of 31 million units.

2. Rising Japanese Yen exchange rates

More than 88% of Honda’s revenue come from

international markets, which means that the company
has to convert foreign currencies to Japanese Yen in
order to calculate its revenues and send the profits back
to Japan. Currency rates are volatile and the company’s
profits and revenue highly depend on the fluctuating
exchange rates. The company cannot control the
currency exchange rates, therefore it is at risk, if Japanese
Yen exchange rates would start to rise. In such case, the
company’s profits would decrease significantly. The
company itself identifies this as a key threat that will
negatively affect the company over the next few years.

3. Natural disasters

Honda has manufacturing facilities in Japan, Thailand,

China and Indonesia. These countries, including others,
are often subject to natural disasters that disrupt
manufacturing processes and result in lower production
volumes and profits.

Honda PESTLE Analysis:

PESTLE analysis is a framework which is imperative for

companies such as Honda, as it helps to understand
market dynamics & improve its business continuously.
PESTLE analysis is also referred to as PESTEL analysis.
Let us start the Honda PESTLE Analysis:
Political Factors:
The political factors in the Honda PESTLE Analysis can be
explained as follows:
Honda operates across various countries across the
world. The reason for both its growth and restrictions
faced, in the governments in the various countries. The
various political influences that affect the interests of the
company need to be monitored and controlled. Though
Honda does not have its own internal political party
lobbying committee, it does exhibit a certain level of
influence on certain governments. The reduction in the
corporate taxes in India, the upcoming development in
African countries, benefits the company, while the trade
between China and the US, the changing tariffs of import
and export across various countries, have a negative
impact on the company’s profit generation. With countries
moving towards a sustainable environment, and reduction
of pollution various governments across the world have
taken up curbing the use of individual vehicles by various
policies. The use of odd and even vehicle number scheme
in Delhi is an example. This factor had a significant effect
on the sales of the vehicle. With countries promoting
battery-driven cars, the company has to buckle up to gain
the lead in the field of battery-driven cars. To gain a
breakthrough and develop cutting edge technology the
company will have to invest more in research and
development. Certain governments have invested huge
amounts in the R&D of hybrid vehicles. Since Honda
already produces hybrids, this is a good place for the
company to expand.

Economic Factors:
The various automobile types produced by the company
are perceived differently in different regions of the world.
With scooters being considered a luxury item in
international markets eg. In Europe, they are very
common in Asian markets. India is the largest market in
Asia for two-wheelers. Honda should consider the
economic conditions prevailing in the country when
launching a new vehicle and also control the pricing of
the existing vehicles. In a period of a low rise in income,
luxury products like a car in India are facing a slowdown.
The sales are expected to increase once the economy
stabilizes. Similarly, with situations like Brexit create
tension and affect the currency exchange rate. In such
cases, the company loses out on profitability even if the
sale is constant. To keep up with the changing trend,
Honda has decided to work on economic and eco-friendly
vehicles worldwide. With a rise in the prices of petrol and
diesel, the company might see a drop in sales. To avoid
this the company must focus on developing new vehicles
with more sustainable and cheaper fuel to gain a majority
in the market.
Social Factors:

The consumers of the various automobile produced by

the company seek different things. The range provided by
the company in terms of satisfying its customers is
impressive. This importance given to the consumer has
been depicted by the company over the years of its
existence. Various social stigma have been eradicated
allowing newer opportunities for the company. An
example of the same is women being allowed to drive in
Saudi Arabia, thus opening up new opportunities for the
company. The company has launched various high-end
two-wheelers across the world but has stuck to entry-
level two-wheelers in India. Based on customer demand,
Honda has finally decided to expand its market in India
by launching various advanced bikes into the market by
the end of 2019. With more and more people willing to
buy electric vehicles, Honda has a good opportunity to
expand its market by utilizing renewable energy to run its
automobiles. The company is thinking about venturing
into electric scooters. Though it may seem risky initially,
but for a company like Honda it will be easier to convince
the customer to invest a little more for the betterment of
the society as a whole. The company has been working
on manufacturing cars indigenously for regions that do
not believe much in an imported car, eg. The UK. Honda
uses English majorly to remove the language barriers
worldwide.

Technological Factors:

With the world getting more advanced day by day, Honda

has put in great efforts to stay up with the changing
trends. The company installed GPS in its latest models. It
has come up with new iv technology which is an
upgraded version of its v-tech engines. This will help the
company make its contribution towards reducing the
amount of carbon in the atmosphere. In India, Honda has
used its advanced technology to release the new BS6
compliant Activa. Its new scooter to be launched is the
Genio. It boasts the use of various leading technologies in
the construction of the two-wheeler. Honda believes in
creating a one of a kind experience for the consumers
and thus tries to fulfill all the needs of the consumers.

With an increase in the need to switch to renewable

energy sources, Honda has utilizes proximately 60% of
the total energy required for manufacturing from
renewable sources, thus itself promoting the need for
people to switch.

Legal Factors:

When a company like Honda works across various

countries, there are various legalities it needs to follow.
There are various environmental laws that change, which
affects the production of automobiles. An example of this
is the shift in India from BS4 to BS6. Though the change
was spread across a period of time, it was still a drastic
one for the company. In many countries, the rules for
hybrid and completely electric vehicles have not yet been
defined appropriately which poses a further threat to the
company. A change in any of the legalities, will lead to
the implementation of major changes and thus affect the
profitability as well as the day to day operations of the
company. To avoid being sued the company needs to
keep a tab on the quality of all automobiles it produces.
Such was the case when the company had to recall 50000
of its two-wheelers, on grounds of faulty breaks. Beyond
the legal difficulties faced, Honda also needs to work on
the pricing policy according to the different countries it
operates in. It also needs to keep a tab on the policies
related to the working hours of the employees as well as
minimum wages it needs to provide to its employees
working in these countries.

Environmental Factors:

To respond to the changing climate, the company has

established various policies and programs across the
world. The Sustainability statement of the company
states “Realizing the joy and freedom of mobility and a
sustainable society where people can enjoy life” and
strives to achieve it. The company is moving forward
through its initiatives to create a zero-impact society. By
aiming to cut total corporate CO2 emissions to half by
2050, Honda will continue its activities to reduce CO2
“using science-based target setting”. Honda is working to
achieve its Product CO2 Emissions Reduction Targets by
2020 and wish to reduce the intensity of pollution
created by motorcycles, automobiles and power products
worldwide by 30%. Honda actively promotes its
electrified products and wishes to convert two-thirds of
its fleet to electric by 2030. Honda believes in the
efficient utilization of resources. The use and depletion of
rare-earth metals, used in various processes, depicts a
major problem for the industry. Thus Honda promotes
the 3R’s of reduce, reuse and recycle throughout its
empire. Honda is also making efforts to reduce the use of
water in its processes.

To save the atmosphere, the company has managed to

create more efficient engines that carry out combustion
in a better manner. Honda faces the risk of changing
environmental policies across the various countries of the
World. But till the company keeps a track of
sustainability, it will be safe from any sort of legal work.
To conclude, the above Honda PESTLE Analysis highlights
the various elements which impact its business
performance. This understanding helps to evaluate the
criticality of external business factors for any brand.

Automobiles

Honda's global lineup consists of the Fit, Civic, Accord,

Insight, CR-V, and Odyssey. An early proponent of
developing vehicles to cater to different needs and
markets worldwide, Honda's lineup varies by country and
may feature vehicles exclusive to that region. A few
examples are the latest Acura TL luxury sedan and the
Ridgeline, Honda's first light-duty uni-body pickup truck.
Both were engineered primarily in North America and are
exclusively produced and sold there.

The Civic is a line of compact cars developed and

manufactured by Honda. In North America, the Civic is
the second-longest continuously running nameplate from
a Japanese manufacturer, only its perennial rival, the
Toyota Corolla, introduced in 1968, has been in
production longer. The Civic, along with the Accord and
Prelude, comprised Honda's vehicles sold in North
America until the 1990s, when the model lineup was
expanded. Having gone through several generational
changes, the Civic has become larger and more
upmarket, and it currently slots between the Fit and
Accord.

Honda increased global production in September 2008 to

meet demand for small cars in the U.S. and emerging
markets. The company is shuffling U.S. production to
keep factories busy and boost car output, while building
fewer minivans and sport utility vehicles as light truck
sales fall.

Honda produces Civic hybrid, a hybrid electric vehicle

that competes with the Toyota Prius, and also produces
the Insight and CR-Z Its first entrance into the pickup
segment, the light duty Ridgeline, won Truck of the Year
from Motor Trend magazine in 2006. Also in 2006, the
redesigned Civic won Car of the Year from the magazine,
giving Honda a rare double win of Motor Trend honors.

Motorcycles:
Honda is the largest motorcycle manufacturer in Japan
and has been since it started production in 1955. At its
peak in 1982, Honda manufactured almost 3 million
motorcycles annually. By 2006 this figure had reduced to
around 550,000 but was still higher than its three
domestic competitors.

During the 1960s, when it was a small manufacturer,

Honda broke out of the Japanese motorcycle market and
began exporting to the U.S. Taking Honda's story as an
archetype of the smaller manufacturer entering a new
market already occupied by highly dominant competitors,
the story of their market entry, and their subsequent
huge success in the U.S. and around the world, has been
the subject of some academic controversy. Competing
explanations have been advanced to explain Honda's
strategy and the reasons for their success.

The first of these explanations was put forward when, in

1975, Boston Consulting Group (BCG) was commissioned
by the UK government to write a report explaining why
and how the British motorcycle industry had been out-
competed by its Japanese competitors. The report
concluded that the Japanese firms, including Honda, had
sought a very high scale of production (they had made a
large number of motorbikes) in order to benefit from
economies of scale and learning curve effects. It blamed
the decline of the British motorcycle industry on the
failure of British managers to invest enough in their
businesses to profit from economies of scale and scope.
Motorsports:

Honda has been active in motorsports, like Motorcycle

Grand Prix, Superbike racing and others.

Automobiles
Honda entered Formula One as a constructor for the first
time in the 1964 season at the German Grand Prix with
Ronnie Bucknum at the wheel. 1965 saw the addition of
Richie Ginther to the team, who scored Honda's first
point at the Belgian Grand Prix, and Honda's first win at
the Mexican Grand Prix. 1967 saw their next win at the
Italian Grand Prix with John Surtees as their driver. In
1968, Jo Schlesser was killed in a Honda RA302 at the
French Grand Prix. This racing tragedy, coupled with their
commercial difficulties selling automobiles in the United
States, prompted Honda to withdraw from all
international motorsport that year.
After a learning year in 1965, Honda-powered Brabhams
dominated the 1966 French Formula Two championship
in the hands of Jack Brabhamand Denny Hulme. As there
was no European Championship that season, this was the
top F2 championship that year. In the early 1980s Honda
returned to F2, supplying engines to Ron Tauranac's Ralt
team. Tauranac had designed the Brabham cars for their
earlier involvement. They were again extremely
successful. In a related exercise, John Judd's Engine
Developments Company produced a turbo "Brabham-
Honda" engine for use in IndyCar racing. It won only one
race, in 1988 for Bobby Rahal at Pocono.