Final group report establishing an international marketing plan for honda to prnetrate vietnam market from 2021 to 2023

Currently, there are over 21 million motorcycles in circulation, with an average of four Vietnamese people per motorcycle and popular brand names such as Honda, Yamaha, Sym, and Suzuki..

HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES

- INFORMATION TECHNOLOGY FACULTY OF INTERNATIONAL BUSINESS ADMINISTRATION

FINAL GROUP REPORT

ESTABLISHING AN INTERNATIONAL MARKETING PLAN FOR HONDA TO PRNETRATE VIETNAM MARKET FROM 2021

TO 2023 Course: 2020 — 2021

HCMC, June /2021

Subject: International Marketing

TABLE OF CONTENT I0 (vi, 1/01 1

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7, Honda's stratepy to penetrate the Vietnamese market - c2 17 ri" số e RBBäAẽ sẽ 17 7.2 Differentiation strategy cocci ccc cc 012011121112 2021111 1112112011 1111111011 k ng kg 18

8 Marketing strategy concepts (Adaptation / Standardization, Adapted

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9, The International Marketing Objectives nh rang 19

10 Recommending International marketing strategy solutfion c 52-555: 20

Subject: International Marketing

1 Executive Summary

Motorcycles have recently become the most popular mode of transportation in Vietnam Currently, there are over 21 million motorcycles in circulation, with an average of four Vietnamese people per motorcycle and popular brand names such as Honda, Yamaha, Sym, and Suzuki , meeting approximately 90 percent of Vietnamese travel demand With the growth of the Vietnamese economy, the demand for motorbikes is increasing As a result, competition among motorcycle manufacturers in Vietnam is becoming increasingly fierce In order to attract customers while also satisfying their needs regarding product quality, reasonable price, fashion style, Motorcycle manufacturers have implemented numerous marketing strategies because marketing management is responsible for attracting and building relationships with customers by creating customer value and satisfaction so that the organization can sell as many products as possible and, more importantly, at a higher rate than its competitors However, it is difficult for any organization to create a successful marketing plan because the development of the marketing plan is influenced by situation analysis, which provides a collection of relevant market information at both the micro and macro levels of an organization

Among motorcycles makers, Honda Vietnam makes a huge effort to remain their brand name and ensure the quality of product with a reasonable price And it is said that Honda motorcycles always take up the leading market shares in Vietnam making Honda to be the leading company in motorbike industry Honda Vietnam, a company that primarily supplies motorbikes and cars in Vietnam, must be mentioned Honda has attracted a large number of customers and earned the trust of the entire country Honda is the market leader

in the Vietnamese motorcycle market Since its entry into this market, Honda's products have been well received by the Vietnamese people, and the majority of Vietnamese have had the opportunity to ride a Honda motorcycle at some point m their lives Honda’s history, Soichiro Honda founded Honda in 1946 and began manufacturing motorcycles in Japan Honda began expanding its business in the United States in 1959, and has since

gradually expanded throughout the world Honda began selling automobiles in 1963 and has since significantly expanded its business from motorcycles and automobiles to power equipment, aircraft, and robots Honda is now a globally recognized brand that has grown

to become one of the world's most powerful corporations In 1996, Honda entered the Vietnamese market The first plant in Vietnam was established in 1997 (B Thi, & X Thi 2009), and Honda started manufacturing at this time

2 Present Marketing Situation

Vietnamese people are certainly familiar with Honda-branded motorbikes, every 8 out of

10 vehicles carry this brand when on the road For this brand from the land of cherry blossoms — Honda is a motorbike company that understands the psychology of the countries they visit, especially in Vietnam, Honda has gained a huge market share Honda's products are famous for being durable and extremely good quality, hitting the hearts of Vietnamese people Some products can be mentioned such as: Wave, Future, Lead, AirBlade, etc., has gained a large number of users, loved and used by many people Honda's main marketing strategy is "Coverage to all generations" which has been implemented very well and very successfully in Vietnam

2.1 Hitting the customer’s psychology

Honda's current marketing strategy is very successful and more successful than competitors Honda comes from a country that is said to be "Meticulous to every detail”,

so as soon as it entered the Vietnamese market, Honda immediately won the hearts of customers Honda is very smart when understanding the psychology "Comfort is better than pride” of Vietnamese customers, so it hit that mentality That also shows Honda has researched very carefully before entering in this market Honda always tries its best to bring the highest quality products as well as longevity

Besides, there is a huge demand for motorbikes in Vietnam Just like natural needs such as food, clothing and shelter, means of transport are also indispensable for Vietnamese

people in today's life Nowadays, motorbikes in Vietnam are a popular means of transport and also the main means of transportation of the people A family has 2 - 3 motorbikes in the house In addition, for the average income of Vietnamese people today, motorbike is the most suitable choice — it has a relatively affordable price in line with the average salary of Vietnamese people In recent years, the motorcycle market has become more and more diverse in terms of models, the demand for changing has also increased

significantly, but people still want reasonable prices and durability Honda recognizes these trends and has also upgraded as well as producing new models

2.2 Product variety

As everyone knows, each Honda’s motorbike has different characteristics to suit all customer requirements A typical example is the Wave motorbike — a long-term motorbike

in Vietnam For customers who prefer simple, unfussy designs, they choose Wave Alpha

In contrast, Wave S has a more powerful design and fuel-efficient, etc Therefore, creating for users to have many choices in the same product line In addition, Honda's product lines are also armed at people with an average income, completely suitable for every Vietnamese people Honda has motorcycles with an average price from 6 - 20 million VND, targeting low-income people who need a means of transportation or for a living (Wave, Future, etc.) The next segment is people with stable and fairly high incomes, or young people looking for their own style and showing personality This segment includes both manual transmission and auto transmission motorcycle with prices ranging from 20 -

50 million VND (AirBlade, Lead, etc.) Besides, Honda also targets the high-end segment with luxurious, classy cars that also partly show their social status These cars often cost over 50 million VND, for example: SH, Vario, PCX, etc

2.3 Massive communication and promotions

It is undeniable that Honda is a motorcycle brand that is very invested in advertising from television advertising to outside advertising It is not difficult to come across

advertisements for Honda's new models on the road, or simply propaganda about traffic

safety Moreover, Honda's strength is advertising on television with images taken care of

by Honda, hitting the psychology of young Vietnamese people In addition to aggressive advertising, promotions are also Honda's strong point This 1s also Honda's most successful promotional campaign Honda always offers preferential prices when buying a car such as a free helmet, support for registration fees, and periodic maintenance at Honda centers without paying This strategy is very satisfied with customers and it generates positive feedback from the public

2.4 “1 love Vietnam” and sympathy from customers

“T love Vietnam” is the slogan of Honda Vietnam Honda's motorbikes have been with Vietnamese people from the 70s to today's modern models Not stopping there, Honda cooperated with a Vietnamese television station to launch a series of programs "I love Vietnam" with the aim of increasing traffic safety awareness in Vietnam This program is widely spread on television and also on the Internet with great coverage nationwide Honda wishes to be able to create sympathy with customers, increase reliability and "pin"

in the subconscious about a clean brand, increasing the level of brand recognition

In short, Honda's marketing strategy focuses on many types of motorbikes to help Vietnamese customers have many choices The early products are Honda Cub 50, Cub 70, Super Cub motorcycles, etc., have really conquered the trust of Vietnamese people with the quality and convenience of those products Vietnamese customers know about motorbikes that are brought by Honda Corporation, even people call motorbikes is Honda Honda motorcycles always give Vietnamese customers a sense of security, confidence in the quality and durability of the vehicle Honda has completely conquered customers since participating in the research and market segmentation process, so that today Honda has captured a market share of more than 60% in Vietnam

3- International marketing macroenvironment

PESTLE is a system or device used by advertisers to analyze natural external factors affecting a company Its results are used to recognize the dangers and shortcomings of using SWOT analysis

3.1 Political

Today, the problem of traffic congestion at rush hour is always a painful problem in society This problem is caused by many reasons, one of which is the excessive use of personal motorbikes and the low culture of motorbike riding The government aims at policies ranging from restricting to banning the use of motorbikes This policy has created great difficulties for the motorcycle industry in general and Honda company in particular The Government and ministries in the fight against the COVID-19 pandemic understand the difficulty of businesses in this situation Therefore, the government has issued timely support policies The issuance of Decree 41/2020 / ND-CP on the extension and postponement of tax payment, land rent, production and business support and disbursement of public investment capital In the coming time, the Government and ministries and branches will have similar and timely policies to be able to support businesses in difficult times (HondaVietNam, 2020) The timely support of the

Government has helped Honda company somewhat reduce the burden when business is difficult during the Covid-19

3.2 Economic

Vietnam's economy continues to face many challenges in the context of the unusual development of the Covid-19 epidemic Our country's economy is affected by many factors such as financial risks, the decline and shrinking of household and business income while increasing unemployment pressure, climate change, etc (Nguyen, 2021)

Honda's Vietnam market capacity in 2020 will reach more than 3.2 million vehicles, down about 3.1% compared to the previous period In which, the company's sales reached nearly 2.6 million vehicles, up 0.5% compared to 2019 The market share reached 79.7%

In 2021, due to the impact of Covid-19, people will lose their jobs, mainly spending on necessary products, so the motorcycle market's output will be affected quite a lot (HondaVietNam, 2020) The market demand for motorcycles has decreased This has a significant impact on the company's annual motorcycle consumption

3.3 Social

The vast majority of Vietnamese people, after a period of attachment to the use of motorbikes, form a motorcycle culture Nowadays, wherever they go near or far, they use motorbikes, do not like to walk, do not like to use alternative means Therefore, the demand for buying and using motorbikes in Vietnam still tends to continue to grow Nowadays, Vietnamese consumers is to prioritize using genuine products with guaranteed quality, and do not like using Chinese goods This is a favorable condition to eliminate Chinese Honda manufacturers from the country, and at the same time reduce competitors in this market

The increasing situation of air pollution has caused the management agencies to come

up with many solutions to control emissions into the environment for both cars and motorbikes Therefore, more and more people are choosing electric cars to replace traditional Honda cars by modern technology and minimizing negative impacts on the environment (Autobikes, 2020) Traditional vehicles have higher operating costs than electric vehicles including fuel and repair costs The future trend of vehicle transformation could create a new era for electric vehicles This will hinder the development of the domestic motorcycle industry However, long distance travel between the two places still requires the use of motorbikes, because electric vehicles need to be charged and cannot go

far

3.4 Technological

Today's technology is developing more and more advertising products, the function of the product must also change in a more technological way Honda Company has continuously launched models that apply modern technologies such as bluetooth connection with My Honda + application, new generation intelligent engine eSP +, torque control system, the Honda SMART Key smart lock system has helped to perfect the products At the same time, satisfy the increasing demand of customers to experience new products integrated with technology (HondaVietnam, 2020) Honda Company is one of the pioneer manufacturers in technological innovation, applying modern technologies to its products

As social networking and e-commerce channels develop day by day, it is easier to advertise products to consumers via Facebook, Tiktok, Youtube, etc In November 2019 Honda officially kicked off the series of event "Ho Chi Minh City Balloon - Honda Always for You" in 4 big cities such as Ho Chi Minh City, Can Tho, Da Nang and Hanoi With the participation of many famous singers, it has attracted a lot of young customers to participate and experience, both advertise products and gain trust from customers Young people are a big potential Honda customer Honda has adopted technology to bring its product information to customers in the fastest and most effective way

3.5 Environmental

During the time of social distancing to combat the COVID-19 pandemic, pollution indicators have dropped significantly This proves that car exhaust is a source of environmental pollution In the near future, the Department of Transport of Ho Chi Minh City will make a proposal to the City People's Committee on a roadmap to control motorcycle emissions in the near future (Dung, 2020) Understanding the problem, Honda has integrated for its products technology to limit CO2 emissions, both saving raw materials and meeting the needs of environmental protection for customers

Competition "Eco-driving with fuel economy” with the effect "How many kilometers can you go with | liter of gasoline?” held in August 2020, the competition attracted 189 teams competing in the general circle The contest is a place for young people to think creatively, exchange and learn about techniques and technologies, and put ideas into practice (HondaVietnam, 2020) This helps the company to come up with ideas within the limit of equipment equipment from motor vehicles, promoting the movement of energy saving and environmental protection Implement social activities that both contribute to environmental protection and promote the development of the brand name and enhance the company's reputation

3.6 Legal

Our country has joined the convention on intellectual property rights, but the accompanying legal system is still not effective and complete Therefore, stealing ideas and copying product designs in our country is still too common On the motorcycle market today, it is easy to see some cases of copying the product models of famous car manufacturers and selling them at a cheaper price than the real thing The lack of completeness in the laws related to intellectual property rights, causes great difficulties for companies producing mainstream products, leads to loss of product value and damages the company's reputation

4 International marketing microenvironment

4.1 Competitive analysis

Competition is an unavoidable issue in a market economy that every corporation must deal with Regardless of the industry in which a company operates, competition is an unavoidable part of its existence and development, and Honda Vietnam 1s no exceptionIn recent years, a large number of suppliers of cars and motorcycles in Vietnam have emerged, demonstrating their own strengths and gradually gaining business credibility due to the high quality and variety of their products According to Ngoc (2018) in Vietnam, 95% of the market is dominated by Honda, YAMAHA, Suzuki, SYM, and

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Piaggio Honda controls approximately 60% of the market Regardless of the fact that it is gradually decreasing these days Honda products are unbreakable, of high quality and performance, and are simple to use As a result, its main competitors would be YAMAHA and Suzuki, both of which have comparable product quality to Honda Piaggio and SYM are only minor rivals because their market share is small and their product concept differs from Honda's

e Yamaha — direct competitors

Yamaha's motorcycles have the same high performance and quality as Honda's It collaborates with Toyota on engine technology, and its production and technique capabilities are exceptional YAMAHA has a 20% market share in the Vietnamese motorcycle industry, making it the second largest market share YAMAHA's motorcycle lineup is as diverse as Honda's, with 11 product lines YAMAHA, on the other hand, has a lower price range than Honda Despite the fact that Honda currently offers low-cost brands such as Wave, its prices are significantly higher than those of YAMAHA YAMAHA, on the other hand, makes an effort to reduce the average price of its products Furthermore, YAMAHA motorcycles are designed for sporty driving It has a lovely and sophisticated design

According to YAMAHA annual report (2012), YAMAHA's marketing strategy in Vietnam aims to increase brand power and market share The products are powered by a low-fuel- consumption engine It will also broaden the range of products available in terms of development and design in order to attract more Vietnamese customers Recently, the rise

in oil prices has prompted YAMAHA to focus on low-fuel consumption engines in order

to meet the needs of its customers It is also for increasing market share

¢ Other competitors

-SYM

By online financial journal (PV, 2013) in 1992, San Yang began their investment in Vietnam under the name VMEP in 1992 San Yang Motor Taiwan Company, which is affiliated with Chinfon Corporation, has decided to break through by launching a global campaign with the SYM brand since 1996, and its products are now available in a variety

of countries SYM manufactures two types of motorcycles: Cub (Angel, Magic, Star, Amigo, Bonus, and Hasky) and Scooter ( Attila, Excel, HD, GTS) In 2009, SYM held a 9% market share in the motorcycle industry In terms of marketing strategy, SYM uses a dealer channel that spans the entire country; they used a sale promotion in which customers were given helmets as a gift, and they held the event "SYM 10 Years of Establishment." SYM has become one of the most anticipated brands in the motorcycle market due to its high quality and credibility, as well as its continuous innovation

- Piaggio

Despite the fact that Piaggo entered the Vietnamese market relatively late, this brand focuses primarily on the luxury scooter market segment Piaggo has quickly occupied this segment with well-designed and luxurious products, and has become a strong and direct competitor of Honda Viet Nam in a specific market segment (Thanh Hao, 2020)

4.2 Suppliers

When Honda entered the Vietnamese market, it relied on Japanese and Thai manufacturers to maintain its high-quality products However, at the beginning of the 2000s, many Chinese manufacturers entered the Vietnamese market with ultra-low price motorcycles, forcing Honda to launch a low-price model brand in order to compete with these Chinese competitors As a result, Honda began to rely on local manufacturers to produce non-core components in order to reduce the production cost of its motorcycle (Duc Tiep, 2006) This significantly reduced costs, and Honda was successful in introducing Wave Alpha to the market Despite the fact that Wave Alpha has become a popular product in Vietnam, Honda encountered a new supplier issue As a result of the

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Vietnamese government's requirement for a certain percentage of local content, Honda must have expanded its local suppliers To meet this requirement, Honda has long invested in and collaborated with local manufacturers to improve their quality management and productivity, and its current local content ratio is more than 90% Some brands, such as SH mode and Air Blade, manufacture more than 95% of their components

in Vietnam ("Motorbike Manufacturers", 2013) As a result, it has been revealed that Honda now has good relationships with its local suppliers, which is one of its strengths in maintaining its larger market share in the Vietnamese market

4.3 Consumers

e¢ Consumer markets

Honda's main goal is to provide high-quality transportation at a reasonable price for Vietnam's business markets According to financial magazine ("Nha cung cấp chính của Honda", 2021) Keihin Corp (Fuel system), Showa Corp (Steering system), Shumito wiring system, Ltd, NOK Corp, Nihon Plast, Nippon Seiki are some Honda suppliers

in Singapore and Malaysia, actively preparing for entry into the expanding Southeast Asian market In October 1964, Honda established Asian Honda, a company for the sale

of motorcycles and power products in Bangkok, Thailand Thai Honda Manufacturing

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