In today’s competitive world the topper is always doing something different from others or may be the same thing in a much more different way. The same logic goes for the business world too where the new competitors coming from everywhere and then the field of business, the company positioning should be strong enough to retain its position in business.
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In this assignment, I am launching a new car as a product for Honda Corporation Japan in four South East Asian countries such as Malaysia, Thailand, Philippines and Indonesia. A new product is developing with the preparation of project life cycle which is covered the needs, purpose, objectives and features of this car that can satisfy the potential customers of this market. Porter’s five forces model is discussed as a marketing analysis tools for getting the market information and competitive factors which would be done with the help of qualitative and quantitative research.
Primary and secondary data is collected from different sources to know the people’s expectations about the product. The required resources and their possible sources is also important part to discuss for developing the product in the market. Based on marketing tools and techniques, findings and recommendations are given for future project and benefits of this product.
Introduction
Honda Motor Company Ltd. Japan is the world’s biggest manufactures of automobiles and motorcycle products. This company was established in 1948 and the head office is located in Tokyo, Japan with 176,815 consolidated numbers of employees. Honda’s is involved in motorcycles, automobiles and power products as its chief products with the turnover of 8,579,174 million yens in the year of 2010.
Honda is a leading market player of wide variety automobiles products that is regularly creating new value, giving reasonable and highest quality products worldwide for satisfying the customers. (Honda, 2010)
The second generation FIT 1.3G Smart Selection
I am launching a new car for Honda Motor Co. Ltd. Japan in South East Asian market which covers four countries like Indonesia, Malaysia, Thailand and Philippines. The name of Honda’s new car is S-FIT (small) that is manufactured as per the road conditions, climate and structure of the market. This car will become and create need for the customers of this market. People of these countries will make a status their selves in the society and entered in the fashion of automobile products.
The purpose of launching this car is to provide a reasonable and quality car to satisfy the middle class customers and to create a competitive environment in the South East Asian market. This car will create a new revolution in the small automobile industry in this market.
Task – 1 (a)
New Product Development (NPD) –
In a business, NPD is the process to introduce or launch a new product and services in the market. This process is designed to test, develop and consider the feasibility of products that are new in market to guarantee the development and existence for the organization.
The NPD process is very crucial within the organization. The development of new product/service can be entirely new in the market, can be replaced with an existing products and old product can be again introduced, packaged & marketed in a different way.
Need for developing the product –
Honda Corporation’s new product is S-FIT car to be launching in 4 countries of SE-Asian market for capturing the consumers of middle & lower class segment because these countries are on developing stage and most of the consumers of middle & lower segments used only motorcycles. In India, Tata Motors launched and create a revolution by Nano a small car which captured the middle & lower class people and to compete with other small size car brands in the market.
The need to develop a new product is depend on the customer’s needs, demands and their other requirements. The main purpose and need of launching this car is to explore the new environment in the auto mobile sector where consumers will be able to buy this car at affordable price and get satisfy. The nature of market, climate and road conditions are not very well in these four countries like other countries of Japan, UK, USA, Germany etc. The nature of this market is highly diverse and that focused on the interior & exterior design, fuel consumption, engine economy and the maintenance of car.
Objectives –
Every organization set the objectives first before introducing a new product in the market and analysis of the market structure to become the growth and success of new product. As per my opinion there can be various objectives for Honda to launch a new S-FIT car in this market where I would like to list down some of them.
To addition of new product into company’s product portfolio
To get the advantages of new technologies and systems
To get the competitive advantages in the market
To increase the sales, profitability & market share of the company
To compete with the other competitors
To build the cash cows and stars for future
To fill the gap of small car segment in the market
To provide the highest quality product at affordable price
To meet the expectations of the customers and make them satisfy
To get the long-term benefits for the company
To get entered of new and to retain the existing customers in the market (tutor2u, 2010)
Features –
Honda is creative in auto-making that making cars for every lifestyle. I am focusing on designing this car as B-Segment in exterior and C-Segment in interior which is especially suits to the SE-Asian market people. Below are the features selected by me for small FIT car that will be surely fit/suit to the customers, road conditions and climate of SE-Asian countries.
Features of Honda S-FIT car –
Engine –
2 cylinder rear engine
36 BHP
935cc
1.3-litre i-DSI Diesel engines to reduce the CO2 emissions and enhanced fuel efficiency
Gears – 5 speed manual gears
4 seats and 4 doors
Tubeless tyres
Air bags for front seats
Manual assisted windows and steering
Brakes – Disc in front and drums in rear
Fuel capacity – Gross is 36 litre where 6 litre is reserved
Fuel economy – 22 km per litre and up to 25 km/-litre on highway
Dimension –
Length – 3.3m
Height – 1.5m
Width – 1.6m
Speed – Top speed 110 kmph
No CD/FM radio, ABS brakes, central locking, air conditioning, remote locks, power steering, power windows
3 years warranty (Honda, 2010)
Task -1 (b)
Market structure analysis –
“Market structure analysis can be described with reference to different characteristics of a market, including its size and value, the number of providers and their market share, consumer and business purchasing behaviour, and growth forecasts. The description also includes a demographic and regional breakdown of providers and customers and an analysis of pricing structures.” (BNET, 2010)
Tools –
There are several different tools available to analysis the market structure. Market structure of an industry can be analysing with the help of using Porter’s 5 Forces Model. Porter’s model is perhaps one of the best suitable tools using in business strategies. So I would like to describe about the 5 forces model of Michael Porter.
“Porter’s five forces analysis should reveal major differences within overly broad industries that will indicate the need to adjust industry boundaries or strategies”. (Porter, 2008)
Bargaining power of buyers –
Customers/buyers have the strong power to bargain with the companies. Customers are able to negotiate with product’s prices cut down and decrease the profits of companies. They can force the companies to provide better product & service at affordable prices because different companies & product already exist in the market and customers has different choices to buy the products in the market. Buyers can switch to other companies product who gives them quality products at reasonable prices.
Bargaining power of suppliers –
The strong power of suppliers is also challenging for the organization because suppliers conclude the terms & conditions in the business. Suppliers are the backbone of business that provides the raw materials and component as an input. The cost of raw materials should be low to get more profit in the business. This is very difficult to switch the suppliers in the market because the alternative option may be expensive and can’t provide the best inputs to the organization.
Threats of new entrants –
There are so many barriers exist in the market which affects the introduction of new product and services. The entry of new products is very difficult when there are so many companies exist with the existing products in the market. High cost & investment is required for marketing of the new products and to get entered in the market. The existing firms have good understanding and industrial experience to give the high level of loyalty to its customers.
[Figure-1.b: Porter’s 5 forces model]
Threats of substitute products –
This threat measure the switching power of buyers from one product to another product. This threat depends on the cost and alternatives or similar products which satisfied the relatively needs & demand of the customer. Any new product can be easily entered in the market with the similar features and buyers can easily switch to alternatives. This threat can create high competition or rivalry between the organizations and within the industry.
Competitive industry rivalry –
This considers the competition between current/existing organizations. The high degree of competition creates the difficulties for existing companies to gain the more profits. The rivalry will be high when the large number of companies/firms opposing and providing same products and services to the customers. In the automobile industry, there are various rivals for Honda like – Mercedes, BMW, Maruti, Skoda, Toyota, Tata and Walks Wagon etc. who are making challenging competition in the market.
However, Porter’s model act a major role to examine, analysis and understand the competitive market environment and strategies for introducing or launching of new product in the market.
Task -1 (c)
“Defining a project is a process of selection and reduction of the ideas and perspectives of those involved into a set of clearly defined objectives, key success criteria and evaluated risks. The definition should include a statement of the business need that the project seeks to address and the description of the product, service or deliverable business objectives that will be its output.” (Spottydog, 2010)
This study of this project is to develop a new product of Honda S-FIT car in the SE-Asian market. I need to do a market survey and analysis from where I can understand the idea and concept to develop the product with the prior resources. After implementation & construction of the project/product I will handover it to the management or organization.
Project Life Cycle –
[1] Concept & Initiation
This is the first initial stage of a project life cycle by which the concept and idea would generate and specify the accomplishment of the project. This stage considers on four initial important phases to develop the product.
Idea Generation
Idea Screening
Idea Selection
Cost & Benefit Analysis
The main objective of this stage is to study and estimate the market opportunities about the projected product.
[2] Design & Development –
This second stage is explained about the first designing of the proposed product and after that development of the product according the plan of the project. The designed product goes for the product and market testing after the development. This stage combines some different phases which help to design, develop and testing of the product.
Product Design
Prototype/ Product Development
Product Testing
Market Testing
http://www.maxwideman.com/papers/managing/F1_PLC-4BasicPh.gif
[Figure 1.1: Typical four stage Project Life Cycle (Max’s, 2000)]
[3] Implementation & Construction –
The third stage of a project life cycle examined the implementation of the planned product by doing test marketing and getting feedback of first wave from the market. The feedback from market gives the opportunity to analysis the unacceptable variable and taking action to make the product according the needs of the customers. This stage includes two phases like-
Test Marketing
Feedback from Market
[4] Commission & Handover –
The last stage of project life cycle defines that the proposed product has completed, developed and ready to launch in the market. So the new product must be handover to the marketing & operations department of the company to commercialization the finished product in the market.
The above figure shows the four separated typical phase’s project life cycle and lists the probable actions to be done in every phase. The separated phases relate with the key points for the decision-making control.
Project Implementation (Gantt chart) –
“NPD is a process which is designed to develop, test and consider the viability of products which are new to the market in order to ensure the growth or survival of the organisation.” (Tutor2u, 2010)
S. No.
Milestones
Time
Week
1
2
3
4
5
6
7
8
9
10
11
12
13
14
1
Initial Discussion
1
2
Idea Generation
2
3
Idea Screening
1
4
Idea Selection
1
5
Product Design
1
6
Prototype
2
7
Product Testing
1
8
Market Testing
1
9
Test Marketing
1
10
Market Feedback
1
11
Commercialization
2
[Figure 1.2: Gantt chart with milestones and time period]
The implementation of this project is depends on all the activities discussed above in project life cycle four phases. The below chart (figure 1.2) is showing every activity or milestones of project life cycle with the estimate times (week) by which this project will be complete. This chart helps to understand that how much time would be taking by each activity to finish the project or development of the new product.
Task -1 (d)
Methods for developing NPD
There are four types of methods available for developing a new product.
[1] Offensive Method –
This method is legally defined that gives the proper directions towards developing the product. This method is easy to apply in the organization. This method helps to develop the R&D process, financial measurement earlier to the product launching. It also serves some strategies for the development of new product.
[2] Defensive Method –
In the defensive method of NPD process, the product can be develop and launched by doing specific amendment in the market environment. This is a cheaper but risky method to apply in the organization. The strategies used in this method with the changes of market can take place in customer’s demand and in technology.
[3] Imitative Method –
As per Imitative method, A product can be develop and launch by copying to another companies product which is already exist in the market. However, this method can be an illegal and against to the legislation. This is the cheap and easy procedure to develop a new product. Almost companies are using this strategy without paying any extra expenditure on different process and saves time & money.
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[4] Traditional Method – This is going through process in which companies don’t want to make any changes in the existing product and just consider on the current product. Company don’t make any changes on the product and technology because of customer’s perceptions and satisfaction towards product. Due to customer’s nature, company’s sale can be decreased by doing or making any amendments in the product.
NPD process & action plan –
The process and action plan of NPD is the step to step procedure in which idea and concept of a new product is generating by the management. The process is going through different phases for the final completion of the product and to reach in the market.
Idea Generation –
An idea and innovation is the first and vital step to develop a product. The idea can be come through internal source like employee’s suggestions and on the other side idea can be taken as an external source like market research, surveys, and competitor’s product and by taking feedback from the market or customers.
Idea Screening –
Idea screening is the next process of project life cycle and NPD process by which the generated idea should be implementing or not is considers by the management. The product benefits, production/implementation cost and organization’s future profits also identifies & discussed in this stage.
Idea Selection –
The selection of idea will be taken by the management after consideration of idea screening. This stage includes the advantages of new product and considers the financial viability of the product for the organization. Company also think about the brand image of new product and how beneficial it would be for the organization.
Product Design –
The product is designed as per the latest trend or fashion because the attraction of product is very important for the customer’s point of view and this is the positive point to increase the sale of the product. Product’s design must be developing as per the customer’s choice and should be like by the customers.
Product development/prototype –
The development of product is complete after the accomplishment of above stages. The product will be present in the targeted market. The proposed product has to complete the above stages accordingly to develop and go for product testing by the management.
Idea Generation
Idea Screening
Idea Selection
Product Design
Product Development
Product Testing
Commercialization
Test Marketing
Market Testing
[Figure 1.3: Action Plan & process of NPD]
Product Testing –
The product can be tested internally and externally of the organization. Product testing is required before implementation and launching the product. NPD team scrutinizes and tests all the features and activities of the product for the successful development and presentation in the market.
Market Testing –
The new product is distributed to the suppliers and customers to get feedback about the product. Company can get the customers views, suggestions and response to test the product’s performance. If customers are not satisfied and response is negative then the product will go back again for further process and market testing.
Test Marketing –
The new product will be launched and presented in targeted area for market testing. The marketing mix strategy will be helpful to monitor the product in that particular area or region. After testing the product it would be finalized that the product is ready for final launch or not and if some changes required so can be done before the product presenting to the overall market.
Commercialization –
The finished product will be handover to marketing department for the distribution in the market through its suppliers. The product will be commercialized for advertising, marketing and selling in the market. Company will get the competitive advantage after the successful development of the product into the market.
Task – 2 (a)
Market Research –
“Market Research is a systematic, objective collection and analysis of data about a particular target market, competition, and/or environment. It always incorporates some form of data collection whether it is secondary research (often referred to as desk research) or primary research which is collected direct from a respondent.” (DJS, 2009)
The purpose of doing market research is to investigate the customer’s needs, cut the risk of product and to forecasting of future trend and fashion of the related product.
Research Methodology –
A Research is a systematic and diligent investigation or search to determine the facts, ideas, theories, concepts and application etc. of the particular research. Methodology is the procedure of methods that followed with specific discipline for constitute success.
A proper research methodology provides the detailed information of market environment, trend or fashion and customer’s perception about the product. I found that this product is necessary to develop to the SE-Asian market people because this kind of car wasn’t launched by any company so that Honda can create the need of this car in this segment of market.
Types of Research –
Two types of research methodology can be used to launch a new product in the market are discussing below –
[1] Qualitative Research –
This type of method is used to investigate the different characteristics, behaviour, attitude, nature, life style, culture, aspirations and values of different people. This method is an in-depth study to understand the human behaviour and aims that administers such kind of behaviour.
For my product, this method helped me to understand the nature and behaviour of this market’s people and which kind of car is required in these four countries. As these are the developing countries so this car is targeting to only medium and low class people. They can afford & buy this car and can maintain a status in their social life.
[2] Quantitative Research –
This method determines on the analysis and collection of data & statistics. The interviews, case studies, questionnaire and focus groups are less considered in this method. This is totally realistic method of research based on true presentation data, statistical tables, charts, graphs etc.
This method helped me to know the past facts, figures and status of other automobile companies in this market. In which I just came to understand the competitive prices & profits of other products.
Types of Data –
The data can be collected in two forms in a research methodology such as –
[1] Primary Data –
In primary data, customer’s feedback should be taken before launching the product. A questionnaire is prepared in a proper format and style to gather the information by doing interviews. This research will help me to investigate the customer’s views and suggestions about this car in this market with the using of some questions such as –
What type of car they people want?
Which kind of facilities they are looking in this car?
How much money they can spend for this car?
Individual survey – Individual survey can be done by appointing any individual person from automobile industry or non-business people for collecting the information regarding this product.
These kinds of questions would help me to give some direction and getting people’s opinion about their needs and demands by market research.
[2] Secondary Data –
In secondary data, data is collected through different sources like – internet, media, books, newspapers and journals etc. This type of data helped me to know the details of competitor’s product and strategies where I could develop my product well effective from my competitors.
Online survey – This survey is made for online users by uploading a questionnaire on online websites of the company and some other different links. Rating method is prepared in this survey to categorize the different people suggestions.
Mail survey – The mail survey of research is done when mails or letters are sending door to door to every type of person to understand the opinion of this product.
I found that all the surveys were effective to give the feedback, views and suggestions for launching of this product.
Data analysis techniques –
Data analysis is a procedure of transforming, inspecting, modelling and cleaning the data with useful views, information, suggestions and decision making. In this analysis have different approaches and techniques in different business domains.
Statistical Data Analysis –
There is a technique of statistical data analysis in which the part of research considers as data analysis part. This technique helps to examine the hypotheses, research question of the particular research. The statistical data analysis can be categorized in four forms such as –
Data Inspection
Initial Data Analysis
Main Data Analysis
Final Data Analysis
In this technique, firstly the data is inspected and cleaned for the possible correction. Another important stage is initial data analysis where the quality, measurements and transformations of data is assessed and checked. Now the data is presented as main data analysis for the particular research and finally the main data is implemented for the further process of new product development.
Task -2 (b)
Resources –
“Resources can be described as a person, asset, material or capital which can be used to accomplish a goal.” (InvestorWords, 2010)
Every organization needs various resources to developing and introduction of a new product in the marketplace. I will also require several resources to introducing S-FIT car for Honda Corporation in SE-Asian market for the potential customers. So following are the main resources describes –
Financial Resources –
Finance is the primary needs of every organization. Money is required as a financial resource for manufacturing and developing the product. Every organization will have to arrange money to run & operating the business process. Without having proper finance business can’t be operate, develop, grow and established.
Human Resources –
Man power/labour/workers/employees as a human resource are the important part of every organization. Human resources are required for doing every activity in the business and without having man power business can’t be run. People are required in each department of business like marketing, operations, manufacturing, research & development etc.
Physical Resources –
Physical resources or infrastructure are required for establishing the business. It includes building, land, machinery, equipment, logistic, furniture and other tangible resources. All are the essentials elements for starting/beginning a business. Each department has different process and systems which requires different kinds of physical resources to operate the business activities.
Technology –
Today’s world has converted into technological edge. Honda is a leading market player in automobiles and worldwide famous for using new technological products. This product is totally depend on technologies because without using the new technologies in the business and this product cannot be succeed in the market and can’t be able to make competitive environment.
Material –
Materials are the essential resources for every business and product. For developing a car I will have to buy different kind of technical parts from suppliers and also some assembled parts from other companies. Appropriate raw material is required for launching a good product in the market. As Honda used highest quality of raw material because if the quality of raw material is good then It would be possible to make a high quality product.
Information (R&D) –
I will have to do research of the market where I will understand the needs and demands of the customers. The market information, competitor’s knowledge and their products is the part of doing proper research and development. Everything would be possible by doing market survey, making relationship through meetings with clients/customers. The appropriate research of the product and market will help for developing a good product.
So, above are the vital and necessary resources required for the development of a new product and with these resources I would be able to make and launch a new car for Honda Corporation.
Task – 2 (c)
Possible sources of resource –
I have discussed about the required resources for developing the car and now I will have to understand that what would be the possible sources to make arrangement of the above discussed resources. I will have to analysis and understand the applicable & required sources of business resources by which I can make a new car for SE-Asian market’s potential customers.
Source for Human resources –
Human resource or people can be arranged and used by two possible sources in the organization as giving below –
Internal source – Human resource can be managed by recruiting people as per the company’s recruitment policy or procedures. People can be hiring by existing employee’s references and by posting jobs on company’s online website. This is the cheap source to recruit the people for the organization.
External source – This source helps to manage the human resource by outside recruitment agencies, advertising, outside referrals, employment newspapers. People can be recruiting on temporary or contract basis depend on the project’s duration. Sometimes they can be taken as permanent employees in the organization.
Source for Financial resources –
The sources of finance can be arranged by financial institutions, stakeholders, banks, share, investments, and debentures. I can lend the money from all of these possible sources at any time. These sources can also be of two types –
Short term – Short term finance can be arranged by shareholders, debentures, retained profits, personal savings and by stakeholders money. This is the good source to cover the day to day expenses in the business or for the operating activities. None or very low interest is required to pay on short-term arrangement of finance.
Long term – Banks and financial institutions are the best possible source that provides the money for long term. We can borrow the money or can get the loan up-to 25 years or more than period of time, funds can be easily and securely arranged by these two possible sources and we can used this money on purchasing of fixed assets for the setup of the organization.
Sources for Technology –
This product is totally depending on technologies so in the market so many companies available who offers the full of quality services to the customers. I can use the technologies from the companies who are purely involved in giving technological services. The ap
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