New Product Marketing Plan
This paper will focus on the development of a marketing strategy for a new product- Honda bicycle.
In the market analysis, I intend to assess both the future and current market(s), positioning competitive conditions and any regulatory concerns that may exist in United States as Honda Company ventures into introducing bicycles in America. The potential for our product which is bicycles consists of quite a large and wide range of individuals who love outdoor sporting as well as those who have an interest in biking as a sport. This is also applies to the avid riders. In other words, this group constitutes young people especially children who like to bike during their play time, those students who take on biking as their only means of transportation, and competitive riders as well as weekend riders.
Targeting may occur in two main phases. The first one concerns the single segment which consists of a single product. This is whereby a single product is targeted by a marketer and this takes place in a market that consists of many segments. On the other hand, the second phase relates to a situation whereby a single product is aimed at the available market segments as a whole by a marketer. In this case, less importance is placed on differentiation as compared to cost. In addition, there is also multi segment system of approach whereby different segments in the market are targeted by a marketer and this also includes various products that are differentiated (Baker, 2003).
The overall market for Honda is the United States’ market and company’s target includes young families, children and sports men and women. The current population of people who use bicycles is high in the United States and this size is constantly increasing. This therefore provides a good potential market for Honda bicycles that are about to be introduced. As concerns the socio-cultural characteristics, our target market consists of people who are open as regards their culture, beliefs, values and lifestyles. United States’ citizens once believed that those people who ride bicycles were mostly trouble makers; this belief has drastically changed since the inception of Honda Company. This therefore means that the target market is bound to perceive the introduction of Honda bicycles as a good thing.
As concerns, the economic background, the United States market consists of people who have above average earnings hence they are capable of purchasing these bicycles. This is also because they are likely to have disposable income. Moreover; the customer needs and requirements vary a lot. For instance, the primary needs for any children who might want to purchase bicycles concerns their safety, value and sound construction whereas a competitive circler will look for the product’s technological superiority, reliability and light-weight construction.
Our target market intends to have young adults who earn $ 35,000 as their annual incomes and the avid riders who have an annual income of $45,000 and above and they should be aged between the ages of 25-44 years. As per our surveys, our consumers will be willing to pay $ 410.What will drive the demand for our bicycles are the reasonable prices that we are about offer to our esteemed customers, our brand image and high quality products (bicycles).
Industry and Competitor Assessment.
The main competitors include Yamaha from Japan, Bajaj Auto, TVs-Suzuki and Harley Division (HD). Harley Division is a strong company that is financially stable besides its constant growth. In addition, HD offers-low cost and high quality goods, they posses a brand image which is strong and adaptable and lastly the company has a strong global marketing and distribution system. As a result of these factors, the competition has managed to satisfy the needs of our proposed targets.
The main competitive advantages that these competitors have include lower costs of goods that will enhance competition, mergers between them and this will adversely affect the current market share that Honda possess. These companies have established such a strong global competition because of the high quality and low priced goods that they offer. This also includes the brand images for their products which are also superior. Moreover, these companies offer advanced and high quality bicycles because they are knowledgeable on the greatest and current trends in the bicycle industry hence the ability to attract more customers both the old and the young population in United States.
The other competitive advantage concerns the location of the business and also the reputation that they hold for their products among the majority population in United States. For instance, Mountainmart is also threatening competitors in the biking industry since they often apply a huge discount structure and commodity approach for its various product line. However, despite its price advantage, Mountainmart doesn’t offer a high performance service as well as bike lines. In addition, its location is not convenient as it is located far away from students who constitute the main target market. As a result, it does not portray as much competition to either of its competitors.
However, Honda has also its own advantages that translate to its strengths giving the company a competitive edge over other business competitors. The company will produce and intends to offer a wide range of highly qualified bicycles which include comfort, mountain, children’s bicycles and hybrid. Since lifestyles are constantly changing, Honda Company is bound to offer a unique and healthy lifestyle with the current trend of bicycles that is bound to offer. Moreover, Honda also offers customer service which is excellent such as training, safety tips, instructions, repairs, bike fittings and proper use among others and this will be good aspect in tackling down our customers.
Customers are the focal point as concerns the purchasing of products that organizations worldwide promote, development, and price and distribute hence this call for proper definition of these products so as to enhance and maximize consumer satisfaction. Positioning as a concept has in the past and even today changed the available nature that relate to advertising. The starting point for positioning relates to a service, an institution or merchandise. Positioning entails making the product to appear in a person’s mind (Ries and Trout, 2001). Positioning is therefore effective when it takes place at the right time.
Getting into a person’s mind involves having the right messages fixed into people’s mind as this calls for an appreciation. Therefore our offering will be positioned through advertising so that people can be aware of the bicycles that we intend to introduce in the market. In advertising, enormous advantage is guaranteed for those products that are able to position themselves in the market as the first products hence it is essential to have very good products in the available particular fields in business.
The marketing strategy of Honda will constitute the four elements of the marketing mix which include product, price, distribution (place) and promotion so as to make effective management decisions in order to attain the stated objectives of the firm. They will be blended in an optimal manner by the firm with an objective of getting a positive response from the consumers of goods and services in the market. This is because these four variables play the vital role in the decision making process by management. Products could either be goods or services that are available for consumer consumption.
As concerns product decisions, the decisions that will be made may be based on appearance, service, function, warranty and packaging among others. Therefore the product decision at Honda will include differentiated products and different brands will be available for the bicycles. Honda intends to introduce bicycles that create a great appeal to the general public as well as the younger demographic hence creating a larger market share for the company (Gorchels, 2006).
As regards pricing decisions, the need could occur under a number of specific circumstances for different types of products and services. For an existing brand or product the decision can incorporate increases, reductions and holding price. The major circumstances in which pricing decisions need to be made are: new product introduction, changes in external circumstances e.g. competitive action in raising and lowering of prices, raw material tax or any duty changes in the market structure, as well as other internal changes arising from new products and new processes.
It is therefore vital for decisions made on pricing to consider the probable pricing and the profit margins of products. Discounts, financing and other various options such as licensing also constitute pricing decision. At Honda, pricing decisions and strategy, the decisions made will use the method of low-end targeting. This will enhance provision of these bicycles at lower prices so that everyone can afford to buy them (Gorchels, 2006).
Placement decisions are mostly linked to various marketing channels of distribution which often provide the means for transferring these products so that they can get to the specified customers. Decisions that concern distribution include logistics, channel member selection, levels of service and market coverage. Honda plans to have dealers who will be used to distribute the bicycles to various destinations. These networks of dealers will be placed in various destinations so that potential consumers can access these products, merchandise or accessories. The company also hopes to use promotions such as shows, public relations and marketing programs in its distribution decision (Minzburg & Quinn, 1991).
On the other hand, decisions that are made relating to selling and communication towards potential consumers are referred to as promotion decisions. These decisions require a breakeven analysis as these costs may be large. The promotion strategy at Honda will be based on brand image, advertisements and commercials that will be available to all. The most effective means of communication for our product (bicycles) is the mass media method of communication. This method enhances the rate at which we can connect with our target customers. Public relations will also be part of our promotion strategy. It is a purposeful form of communication directed towards the publics by the organization with the objective of developing good will (Cooper & Hiebing, 2004). Public relations is also future oriented and proactive hence the objective of maintaining and building an organization’s positive perception.
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Minzburg, H., & Quinn, B. (1991). The Strategy Process. Prentice Hall.
Ries, A., & Trout, J. (2001).Positioning: The Battle for your mind. McGraw-Hill