Research Proposal

Strategic Marketing

Strategic Marketing

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Table of ContentsIntroduction......................................................................................................................................3Research Aim...................................................................................................................................3Research Objectives.........................................................................................................................3Research Questions..........................................................................................................................4Research Background......................................................................................................................4Preliminary Literature Review........................................................................................................5

Definition of Culture.............................................................................................................5 Definition of Marketing Strategy..........................................................................................5 Cross Cultural Issues............................................................................................................5 Marketing approaches and Strategies...................................................................................6

Information Needs...........................................................................................................................9Research Methodology..................................................................................................................10

Primary Research:...............................................................................................................11 Secondary Research:...........................................................................................................11

Sample Selection and Size.............................................................................................................11Approach to Data Analysis............................................................................................................11Data Validity and Reliability.........................................................................................................12Anticipated Outcomes...................................................................................................................13Limitations of Research.................................................................................................................14Ethical Issues.................................................................................................................................14References......................................................................................................................................15

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Introduction

The research topic is “Cross cultural differences and Marketing strategies of Honda Motors in

different countries”.

This research paper will investigate the marketing strategies used by Honda in positioning their

brand in different countries of the globe. Marketing strategies of Honda in China, UK and USA

will be analyzed. These three regions of the world have got a lot of importance as business is

becoming more global. When companies start operating globally there are number of factors they

have to keep under consideration that can further lead them to success or failure. Cross cultural

issues are one of the important factors. As marketing activities are more related to the likes,

dislikes and psychological factors of targeted customers; it is hence very necessary to understand

and explore the cultural values, norms and rituals of customers. Not only cultural differences but

micro, macroeconomic and technological factors effects the strategies and business needs.

The paper will study in detail the difference in marketing strategies due to change in

environmental factors of countries. Along with marketing strategies, operations of Honda in said

countries shall also be examined.

Research Aim The aim of this research is to “Identify and compare the Cross cultural difference affecting

marketing strategies of Honda in different regions”.

Research ObjectivesThe research objectives are following:

1. To identify the performance marketing techniques used by Honda in China, USA and

UK.

2. To analyse and compare the cross cultural differences, which can affect on marketing

techniques.

3. To investigate effects of globalization on marketing techniques.

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Research QuestionsThis research paper assumes to investigate;

1. What are the cultural and economical differences of UK, USA and China markets and

how they affect marketing techniques of multinational companies?

2. What different approaches are used by Honda for promoting its brand in three

different regions of the world?

Research Background Marketing is a combination of art and science, managers have to come up with creative and

innovative ideas and bundle them with intensive market research to mitigate risk factor that

arises due to innovation. World has become a global village that has enabled companies to

operate without any limitation of geographical boundaries. Globalization can either be an

opportunity or challenge. These factors can only be managed with intense market research and

ultimately developing tactical marketing strategy (Gilbert, 2010).

In developed countries, markets are becoming very saturated so it is important for multinationals

to tap the markets that have some gaps. Multinational corporations (MNCs) have moved towards

emerging economies such as India, Indonesia, Brazil, China, and Mexico, as key locations for

future growth (London and Hart, 2004).

Today studying economic and political conditions are not enough to start business

internationally, cross cultural issues have got significant importance. To operate successfully in

any country it is important to keep their cultural values in mind while developing organizational

human resource plan, production or marketing plan. Family structures, educational structures,

religious organizations, associations, forms of government, work organizations, law, literature,

settlement patterns, and buildings. All of these reflect common beliefs that derive from the

common culture (Obonyo, 2007). Keeping under consideration these concepts further research

will be conducted.

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Preliminary Literature Review

Definition of Culture

Culture is defined by Hofstede as follows:

“Culture is the collective programming of the mind, which distinguishes the

members of one category of people from another” (Hofstede, 2001).

Pearson further explains this when he says that culture consists in those patterns relative to

behaviours and the products of human action which may be inherited, that is, passed on from

generation to generation independently of the biological genes. It means culture is a collective

programme of mind relating to human behaviours, which may be inherited or learned in the early

age. Culture cannot be change in any circumstances but it creates a great effect on an

individual’s thinking, actions and performance.

Definition of Marketing Strategy

“A marketing strategy is a process that can allow an organization to concentrate its limited

resources on the greatest opportunities to increase sales and achieve a sustainable competitive

advantage. A marketing strategy should be centred on the key concept that customer satisfaction

is the main goal”. Source: www.selfgrowth.com

“A marketing strategy is a process or model to allow a company or organization to focus limited

resources on the best opportunities to increase sales and thereby achieve a sustainable

competitive advantage”. Source: www.easy-marketing-strategies.com

Cross Cultural Issues

Cross cultural issues are the conflicts arise due to difference in the values, norms and cognition

process of the residents of one particular society from those of other. Cross cultural differences

are mostly measured by identifying degree of individualism vs. collectivism, cooperation,

uncertainty avoidance, conflict resolution, work group characteristics and motivational factors.

These all variables differentiate one society from the other (Hofstede, 2001).

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Marketing approaches and Strategies

There are different marketing approaches that organizational adopt when they are operating

internationally. Three major approaches are consumer oriented approach, competitor oriented

approach and trade oriented approach. Under consumer oriented approach two strategies can be

adopted; differentiated and undifferentiated marketing. Differentiated marketing focuses on the

variances found in the behavior and needs of target market. Undifferentiated marketing focuses

more on the common characteristics on the target customers. Second approach deals with the

competition, marketers make strategies based on the competition prevailing in the industry. Third

approach is focused on intermediaries and distribution channel (Riege and Perry, 1998).

There are different marketing approaches that organizational adopt when they are operating

internationally. Three major approaches are consumer oriented approach, competitor oriented

approach and trade oriented approach. Under consumer oriented approach two strategies can be

adopted; differentiated and undifferentiated marketing. Differentiated marketing focuses on the

variances found in the behavior and needs of target market.

In 1959, he opened the American Honda Motor Company, so he could fulfill his dream of

building a high performance motorcycle and marketing it globally.

The discussion below briefly emphasizes on the strategy used by Honda to gain entry into the US

motorcycle market.

During 1970s and 1980s, Japanese automobile industry penetrated European markets very

aggressively and achieved success. Strategic management researchers and consultants used to

claim that this success has been derived from their theories and strong connectivity with practical

implementations. In 1975 Boston Consulting group did in-depth analysis on Honda strategic

management style and implementation of marketing strategies in US, Japan and European

markets. In UK; Honda did bear with the financial losses to gain market share and to penetrate

into motorcycle market. In this way they produced large number and took benefit out of

economies of scales and with more units sold the level of revenue and profitability improved a

lot. Honda is referred as a market creator in US and elsewhere, with its production capabilities

and promotional activities it progressed at large level (Mair, 1999).

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In the 1950's, US market was very limited and lead by brands like Harley Davidson, Indian, and

imports like Triumph and Moto Guzzi. Motorbike riders were generally seen as outsiders, clad in

leather jackets and riding in packs to terrorize small towns, an image played up by Hollywood.

Further, Japanese products with funny names were looked upon suspiciously by American

consumers, much as Chinese ones are today. Over the time Honda has achieved major market

share in US motorbike market with its opportunist strategy and investment in production at large

level (Richardson, 2011).

US Honda Motor is making perfect the art of coping with a mass of major introductions coming

this year but without substantially more ad money to boast about it. When American Honda's

new fiscal year kicks in today, ad budgets are expected to be flat from last year, so the carmaker

will have to make the same amount of dollars go farther to accommodate all the new products

from its Honda Division. The traditionally lean-running American Honda will rely on the

momentum it has gained from several years of record sales (Lillie, 2002).

A much battered automobile industry enjoyed a significant rebound in 2010 through the fall of

2011—a sharp and welcome contrast to its state during 2008 and 2009. In the U.S. and around

the world, the recession that started near the end of 2007 had a profound impact on the

automobile industry. America’s car and light truck market dropped dramatically in 2008, to

approximately 13.2 million units sold for the year, down by about 2.9 million from the number

of units sold in 2007. In 2009, the market was much worse, with sales for the year totaling 10.4

million units. About 690,000 of those sales were made with the stimulus of a “cash for clunkers”

program paid for with federal dollars. This was easily the worst year in decades for the car

business, with two giant manufacturers filing for bankruptcy, GM and Chrysler, while a large

number of dealerships, suppliers, parts manufacturers and other auto-related businesses also

failed. By 2011, Chrysler was 50% owned by Italian car maker Fiat, thanks to agreements and

financing that had enabled Chrysler to exit bankruptcy. GM was 61% owned by the U.S. federal

government.

Estimates of the worldwide automobile market vary substantially from one source to another.

Scotiabank Group estimated that 60.13 million new cars and light trucks would be sold globally

during 2011, up from 53.96 million in 2010 and only 50.50 million during 2009. As of mid-

2011, Scotiabank’s analysts found that sales were growing at particularly rapid rates in emerging

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nations such as India (with 2 million units sold forecast for 2011, doubling since 2006), Brazil,

Chile and Russia. Brazil, enjoying exceptional economic growth, may become the world’s third-

largest car market by 2016 or so, surpassing Germany, and topped only by China and the U.S.

U.S. car and light truck sales will total from 12.2 to 13.0 million units for 2011 provided the

economy does not slow significantly during the final quarter of the year. This would represent

good growth from 11.55 million units during 2010.

The key differences between the two accounts of Honda’s entry into the US motorcycle market

The two accounts of how Honda entered into US motorcycle market differ in numerous ways.

There are two approaches to strategies were used by Honda to enter the US market, the Boston

Consulting Group (BCG) report clearly shows a deliberate approach to Honda’s strategy in

entering the US motorcycle market.

Honda is a brand known for its quality and innovation. Honda was never into an aggressive

promotional activities but the company always tried to maintain the quality and created a brand

image by providing better customer service. Honda car like Honda city is the largest seller in the

segment and ranked fourth position in passenger car segment.

Considering the advertisement, Honda has been very careful and precise in their advertisements.

Honda always projected their image as most reliable brand, advanced technology, eco friendly

cars. Even considering the television commercials, Honda promoted their hybrid car that runs

without gasoline and emits water as the bye product rather than advertising the specific brands

existing in the market. The ad was more concentrated to the company’s technological

advancements and eco friendly image which differentiated Honda from the competitors.

Operating worldwide, one mistake in any kind of strategy: Enterprise, Corporation, Business, till

Operational, and Individual will lead to huge influence to the whole company in the future.

That‘s why the evaluations and controls system of Honda are much attached special important in.

In strategic level, outside directors and corporate auditors are appointed to the Board of Directors

and the board of Auditors to ensure objective control of the company‘s management. Honda also

has an operating officer system, aimed at strengthening both the execution of business operations

at the regional and local levels and the supervision by the Board of Directors. All of these

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endeavors is to maximize the flexibility in which Honda‘s directors respond to changes in the

operating environment, also keep the whole company going in the right track with the rapid

changes in the world nowadays. The control system of the company used to ensure desired

outcomes are also effective and efficient used. With the Internal Control System Fundamental

Position and Implementation Status, Honda‘s control systems focus on a lot of dimensions on its

operational level. First, with Basic Position, the company‘s divisions are under the guidance of

their respective corporate officers. The systems are placed to ensure a systematic approach to

compliance and risk management.

Honda promoted their products in majority print media (Majority advertisements come in

magazines and national news papers). The customers were always aware of the company policies

of providing latest technology and upgrading whenever necessary and also remodeling the entire

model after certain period of time. Honda City the company had remodeled it thrice till the

inception. Honda always tried to create a surprise element during the launch of every model. The

company plans to stage road shows, to display vehicles in the pavilions during various college

festivals and exhibition. Source: www.marketing91.com

Information NeedsInformation needs are critical to understand for any research project. They refer to the

informational requirements of the research in order to study the objectives. The cause of failure

for many research projects is inadequate understanding of information needs. Assessing the

information needs is essential to meet the aim of the research. It is important to understand what

the information needs are and to do this first we need to look at the objectives of the research.

Information needs are defined by Ashill and Jobber (2001) as the user specifications of

information characteristics involved in information seeking, and refer to those qualities of

information perceived by managers to be useful to facilitate their decision making.

This research process will begin with recognising is there a need for specific information.

Following this recognition, a plan to resolve and meet the information need would be

constructed.

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The primary information need for the completion of this research will be identifying the

marketing approaches which are adopted by Honda Motors in three different countries, UK,

USA and China. The information on the common marketing strategies and their utilization will

be found through different sources e.g. online resources, books and academic journals.

It is also important for this research to have the cultural understanding of all sample countries

China, USA and UK therefore it is vital to discover the cultural difference, management

behaviours and approaches to marketing management methods in their cultures. These cultural

differences would be identifies and evaluated using Hofstede’s cultural dimensions. Evaluating

macroeconomic, microeconomic and socio political factors in these countries is also very

significant since companies operating globally need to have grasp on these variables to make

better investment decisions.

Honda Motors sales and revenue volumes in all three countries shall also be reviewed and this

information will be extracted from the annual reports of Honda.

Research MethodologyThe research design has been formulated according to the research objectives. The research is

designed to illustrate the cultural issues which are affecting the marketing strategies of HONDA

Motors. Due to the investigative nature of the study, the qualitative data collection method will

be used for this research. This will involve the use of qualitative data gathered through primary

research such as interviews, documents, and participant observation data, to understand and

explain the Honda marketing strategies and techniques.

Collection of primary data from three geographically distant countries is very costly and time

taking process that can be done after identifying sponsor for this research. For the time being,

data from Honda official website, annual reports and already done research papers shall be

extracted and compiled for a better analysis.

Qualitative research method enfolds various advantages like it provides direct information about

behaviour of individuals and groups, permit evaluator to enter into understand situation, provide

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good opportunity to explore unanticipated outcomes and exists in flexible and unstructured

settings (Mayoux, 2001).

Primary Research:

The primary research will be carried out through performing a survey of marketing strategies and

approaches of Honda motors in three countries. The qualitative method will be used for the

survey. The data will be collected through interviews with Honda professional. The interviews

are dependent on the availability of marketing managers, it is very difficult to physically go there

and interview them so telephonic interviews will be a source.

Secondary Research:

The secondary research will be desk based research. It will be done through academic journals,

textbooks, articles and other online resources. Most of the research will base on secondary data in

the form of research articles, annual reports of Honda. Standard marketing techniques adopted but

automobile makers will be discussed in comparison with Honda. Marketing approach will also be

taped. Secondary research will study the Hofstede’s cultural dimensions of all three countries. It

will also examine the role of cultural differences in marketing strategy development as well as

issues of cultural fit.

Sample Selection and SizeThe sample for the primary research would be marketing managers of Honda in UK, USA and

China which are involved within the company’s marketing strategy formulation.

Sample size can never be defined as enough. The size of sample in this particular case will be

based on availability and willingness of employees and managers to take part in the survey. The

minimum target is two people from the management. There will be an attempt to get as many

participants as possible.

Approach to Data AnalysisQualitative data is hard to analyse, the interviewer can easily misinterpret what interviewee say

However, the analysis of the objectives suggests the qualitative research method; including

interviews, observations and document analysis. To avoid the confusion and misinterpretations

the interview notes would be taken. Moreover, the interview questions will be straightforward

and close-ended mainly however some open-ended questions may be asked as well. And

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interviews may be recorded as well with the approval of interviewee. Therefore, it will become

convenient to analyse the data.

Most of the research will base on secondary data in the form of research articles, annual reports

of Honda. Standard marketing techniques adopted but automobile makers will be discussed in

comparison with Honda. Marketing approach will also be taped. Secondary research will study

the Hofstede’s cultural dimensions of all three countries. It will also examine the role of cultural

differences in marketing strategy development as well as issues of cultural fit.

Data Validity and ReliabilityThe validity of the data is the most important issue within any research project. Designing of the

questionnaire for interviews reflects upon the data validity, if the questions which will be asked

did not give an appropriate answer, which satisfied the research needs it will be worthless to ask.

The questions will be designed to achieve the legitimacy of data and will be straight forward and

relevant to the research objectives.

The interviews will be recorded with approval of interviewee to avoid any misinterpretation of

the data in case of interviewees protest the interview notes would be taken. The report of

interviews would be sent out to interviewees to read and finalise their views. To avoid the

unclear answers the close-ended questions would be used during interviews where appropriate as

they provide precise and adequate data. To make sure the questions are clear for readers to

understand they will be pre-tested by a group of five people.

Standard marketing techniques adopted but automobile makers will be discussed in comparison

with Honda. Marketing approach will also be taped. Secondary research will study the

Hofstede’s cultural dimensions of all three countries. It will also examine the role of cultural

differences in marketing strategy development as well as issues of cultural fit.

As mentioned above, mostly research will base on secondary data because of geographical

distance. But interviews will be taken from the concerned authorities. In this case the interview

questionnaire will be adopted so that its validity test like Cronbach Alpha coefficient would not

be require to perform again.

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Anticipated OutcomesThis research will be a critical evaluation since the marketing strategies of Honda for three

countries will be analyzed in the light of cross cultural differences in three different three

countries. It is proposed to structure the data collection and also the comparison and analysis of

research findings using the following key areas of evaluation and using Hofstede’s cultural

dimensions. Therefore, the results of the project will be presented covering the following areas of

evaluation:

Marketing Approach and strategies.

Impact of cross cultural differences on marketing technique of Honda motors.

Macroeconomic and microeconomic factors effecting business decisions.

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Limitations of ResearchThe research is designed for the limited study. It will only look into impacts of cultural

differences on marketing approaches and techniques. Macroeconomic and microeconomic

factors of these countries will also be analyzed but not in-depth.

Research method also has some constraints as should be based on in-depth interviews of

marketing executives, face to face interviews are very important for collecting better

information. Due to geographical distance from these countries it is very difficult to physically

visit them. Sample of marketing managers is also limited.

Moreover, the research will focus on the cultural issues using Hofstede’s cultural dimensions

which are affecting marketing strategy and not the impacts of cultural differences affecting other

areas of business like strategic management that is a wide area of research. There is a time and

budget limit for this research therefore, this it will use only a small number of representatives

and will assume the views of the rest will be similar.

The scope of the research is not very broad. The research will be done only in UK, USA and

China only and other branches of the company in other countries will not be included in the

survey therefore, it will be a limited research and results obtained from the research would be

limited as well.

Ethical Issues Ethical issues in research arise when data is manipulated and false interpretations are drawn from

the interviews and data. This probability will be minimized using recorded interviews and

approval from authorities. Moreover social setup has also maintained at natural level. This

research will not raise any ethical issues. As it will be derived from the existing research.

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