Coursework Header Sheet

157099-127

Course MARK1107: Mktg Principles & Planning Course School/Level BU/UG

Coursework Individual Assignment Assessment Weight 40.00%
Tutor I Whitten, JF Stubbs Submission Deadline 10/12/2009

Coursework is receipted on the understanding that it is the student's own work and that it has not,
in whole or part, been presented elsewhere for assessment. Where material has been used from
other sources it has been properly acknowledged in accordance with the University's Regulations
regarding Cheating and Plagiarism.

000557760 Justina Markauskaite

Tutor's comments

Grade Awarded___________ For Office Use Only__________ Final Grade_________

Moderation required: yes/no Tutor______________________ Date _______________

1
 Content

1.Introduction 3
2. SWOT 4-6
3. Honda B2B and B2C 7
4. Pest analyses on UK car industry 8-10
Summary
References

2
 UK car sales
Honda
Report covers

• Introduction to UK cars industry

• Introduction to Honda
• Honda’s place in UK market
• Swot analysis
• Pest Analysis
• Honda B2B
• Honda B2C

UK cars industry

UK is world’s leading engine producer. Every year about 3 million engines and one and a
half million cars are made and produced by UK’s manufacturers what appears as a 10.6% of
all UK exports and each year it converts to 52 billion pounds, moreover, cars industry in the
UK accounts about 180,000 work places in automotive manufacturing and more than 640,000
in vehicles trade, supply, servicing, yearly. Furthermore, 2008 in Great Britain were
registered 2,131,795 new cars what leads UK in to the fifth place word wise by new cars
registration. In terms of new cars producing in Europe, United Kingdom is the fourth largest
supplier and the biggest vehicles producers in UK are Nissan, BMW MINI, Honda, Toyota
and Land Rover (SMMT, 2009).

1.Introduction to Honda

3
Honda “The Power of Dreams”

“We see the world not as it is, but as it could be. We see the world through the eyes of
dreamers. Because we are a company founded by a dreamer and we are a company built on
dreams” (American Honda Motor Co.,2009). This is how Honda presents itself to customers
nowadays.

Honda is the biggest manufacturer of internal combustion engines in the world. Moreover,
Honda Motors is well known for producing full range of cars, motorcycles, generators, boat
motors, watercrafts, lawn mowers, water pumps .Honda produces cars as Civic ,Accord, CR-
V, Odyssey, the Camry and many others. This Company was established by Soichiro Honda
in the 1940s and has grown into 8th biggest automobile manufacturer in the world.

In United Kingdom Honda first established in 1961 with its head office in London, however,
Honda of the UK Manufacturing Ltd. was established in 1985 and started to operate just in
1986. After 3 years UK’s car market found out about Accord. Now Honda Motors Ltd. is one
of the biggest cars producers in UK with UK’s market share of 4.36% (Adams,2009).

2.Swot analysis

According to Mifflin(2009) Swot analysis is a strategic planning tool in which an

organization, business plan, or project is evaluated by analyzing its strengths, weaknesses,
opportunities, and threats. The analysis is designed to identify the important factors affecting
the achievement of an objective.

2
Honda strengths
Honda is considered as a reliable, high quality company which provides top class cars and
motors all other the world. Honda is global company within 134 production facilities in 28
countries what makes company so atracttives, besides as long as customers satisfaction is
considered Honda as a global company can communicate with is’s customers more, can
better understand particular country’s market (Kingston,2009). Moreover, varaiety of
production is another very inportant aspect of comany as company provides 18 models of
cars including Civic, Accord, Pilot, Citroen, CR-V, Element, Crosstour, Clarity, Insight,
Oddysey, Ridgeline. Furthermore, Honda has research and developing centres in 15 countries
(including UK) with a staff of 30, in the last financial year it delivered more than 22,000
training days to staff from Honda’s dealer networks and Honda
Associates(Kingston,2009).Besides, Honda presents itself as environmental friendly company
and tries to reduce CO2 emissions from all Honda’s cars.

Honda weaknesses

First of all, Honda has poor promotion campaign comparing with other cars producers in UK and all
around the world. Honda’s website does not provide much information about history of Honda,
Management system, any useful dates and you can find some difficulties in using website overall as a
conception of Honda’s official UK website is pretty difficult understand. Moreover, most of all
Hondas advertisements on TV are pretty average and do not attract people’s attention as last Honda
Accord Commercial 2008 on youtube.com was viewed by 27,540 visitors while BMW 3-series
commercial 2008 was watched by 143,288 youtube.com users and Audi R8 commercial 2008 was
seen by 681,522 viewers (Youtube,2008). However, poor presentation is not the only problem of
Honda as in terms of considering quality of cars we can find some minuses as well. First of all, the
quality of metal used in Honda’s cars is not the best quality as it’s easy to damage it is very light so
it’s easy to slide down of the road when the road is wet or slippery, besides Honda’s could be easily
turn over. So it leads the fact that cars of Honda are not very safe.

Opportunities
Most of the people do not imagine their lives without cars anymore, this is why, auto market is full fill
with hundreds of cars models. However, cars are getting old, start to cause problems, broke and are
replaced with new cars, so they can always find opportunity to present new car to the market. Besides
cars as clothes have its fashion tendencies, what this season is on the top next season could be
considered as old fashioned, so some of the people are linked to change their cars often. Furthermore,
schemes as Scrappage is another good opportunity for car producers as Honda to sell its products, as

1
Scrappage schemes created by UK government provides opportunity to get 2000 pound on your new
car when you trade it your 10 years or older car which you owned not less than 12 months (UK Car
Scrappage Scheme, 2009)

Threats
Honda has pretty stable place in UK‘s market, however, if new manufacturers would start up their
business or competitors would start aggressive promotion campaigns Honda sales could suffer.
Moreover, two years ago world started to feel economic slowdown and market has not recovered yet
so it may have affect on Honda’s volume of sales too. In this difficult period of time for worlds
economic all costs likely to increase in this case fuel, diesel, and gas prices may increase as long as
roads fees and other car services and it may have influence on car sales.

2
3. Honda B2B and B2C

Honda B2B
Business to business

According to Honda’s official homepage if you looking for the car to cover your business
needs Honda is company you can stick with, as it understands that different business has
different needs and provides opportunity to choose car which covers your needs best, as
Honda UK are able to produce tailored cars, motorcycles for emergency services including
police, fire brigades, hospitals, Government Agencies and other departments. Besides Honda
provides wide range payment system and apply discounts. For business Honda provides two
opportunities one is two own the car another is to hire the car. If your company decided to
own a car Honda gives you 3 opportunities hire purchase (deposit→ monthly payments→
Customer pays the option to purchase), lease purchase (deposit→ monthly payments→
Customer pays final payment and option to purchase fee plus owns the car) PCP (Honda
Aspirations) (deposit→ monthly payments→ part exchange/keep/return car).However, If
company decided to hire care it can choose one of the two options, finance lease or contract
hire (Honda Finance Europe, 2005).

Honda B2C
Business to customer

In terms that Honda is global company with its apartments all around the world company can
get in touch with its customers easily, last year 160,000 Honda Associates helped more than
23 million consumers all around the world, besides Honda keeps policy to get into
community where company operates and that, in my opinion, helps Honda to understand
particular country’s market and different nation’s needs much better. Moreover, Honda works
with charities as Ben, NSPCC, Woodland Trust, Slough Mencap, Thames Hospice Care and
Child Bereavement Charity what makes company more attractive. Furthermore, Honda
provides wide payment system for individuals as well.

2
 Monthly Payment

4.Pest analyses on UK car industry

tical Factors Economic factors

s Stability of Economic
Unemployment and labour supply
ernment Car maintaining costs
ronmental regulations

Social-cultural factors Technological Factors

Cars Culture Research and Development activity
Population Safety
Fashion tendencies

Economic factors

Like all sectors the automotive industry is going through the difficult time. As a result of the
existing economic climate and weak consumer confidence demand, for vehicles has fallen
massively all over the UK. In 2008 the sales have gone down by 8% (economy whatch.com
2009) new vehicles sales has seen even bigger hit. According to marxist.com (2009) Honda
sales decreased by 37.7% compared to December 2007. This crisis affecting company
revenue as well as its employees, many of them are in danger of losing the job.

Honda stopped production at its Swindon outlet during April and May 2009. This has been
done in response to decreasing demand of vehicles among consumers across Europe.
However, for now they managed to save their employees for redundancy.

2
Political factors
Although automotive sector has been hit hardly by economic crises is not all bad news for
Honda as UK government are trying to help this sector by introducing various programs in
order to encourage new cars sales. The scrapping scheme was launched by the Labour
government and it benefits the owners of cars and small vans registered before 29 February
2000. Single 10 year old or older vehicle can be replaced in at participating dealers for a
£2,000 “scrap page” allowance against a brand new unregistered car or van up to 3,500 kg.
(UK Car scramppage sheme,2009).

Supporting the automotive industry include guarantees to unlock loans of up to £1.3bn from
the European Investment Bank, as well as a further £1bn in UK government loans, to fund
investment in greener vehicles.

The Department of Innovation, Universities and Skills is also prepared to increase funding to
help train carmakers' employees from £65m to £100m (bbc.com online, 2009).

After all UK Government are supporting automotive industry by providing the loans and
funds as well introducing favourable laws.

Technological Factors
Auto sector is very competitive and companies are trying to win the customers by introducing
newest technologies in their vehicles. Not only that, government plays big role in
encouraging new technologies introduction that would help to save environment as well.

UK drivers are offered up to £5000 funds to purchase hybrid and electric vehicles. All in total
UK Government is investing around £400 million in order to encourage the development,
manufacture and usage of ultra-low carbon cars. Honda are using successfully this
government support and introducing new hybrid, low carbon car.

At last, technology changing dramatically auto industry, and its believed that with
government support we will see low carbon cars as a major in the near future, so in order to
survive in this tough market Honda has to keep up with the changing technology and
government requirements.

Social-cultural factors
According to statistics in UK nowadays live more than 65, 000, 00 million people from
different countries and back grounds. This melt pot has huge impact on UK’s car industry and

1
sale, as different people has different needs and requirements. Besides, our culture, fashion
understanding and life style have influence on our car choose too.

Summary

2
UK is one of the leading cars and engines producers in the world more over every year more
than 2,000,000 new cars in UK are registered. UK’s car manufacturers annually export more
than 1,500,000 cars to Europe and other countries. The main UK cars manufactures are
Nissan, Toyota, BMW, Land Rover and Honda. Every year Honda UK produce about
240,000 cars and more than 200,000 engines, overall Honda is leading company in terms of
engines producing. As Swot analysis showed Honda have much more strengths as quality of
cars, customer’s satisfaction, environmental activities, new technologies provided in cars and
skilled employees. However, Honda in my opinion should improve its advertising campaign
together with its website and maybe replace metal in the cars and applied more safety
systems. Moreover, my further research showed that Honda has ability to deal with customers
and businesses in the same level; nevertheless I would suggest paying more attention to B2C
marketing as this market is more perspective. This is very important as auto sector has
been hit hardly by economic crises and although UK government are trying to help this
industry by introducing various programs in order to encourage new sales, in my view Honda
has to keep up with the changing technology and government requirements to survive this
though market.

2
1