E BOOK (WOON ZENG QUAN)

I N D I V I D U A L A S S I G N M E N T 2
HONDA















ALL YOU NEED TO KNOW ABOUT THE PRICING
































HONDA W H A T M A K E H O N D A S U C C E S S ?





PRICING COMPETITIVE ADVANTAGES
SWOT ANALYSIS


STRATEGY P R C I N G S T R A T E G I E S








MARKET VALUE BASED PRICING
COMPETITION BASED PRICING

PENETRATION STRATEGY
DIFFERENTIATION STRATEGY
L E T T H E R A C E B E G I N




T H E P O W E R O F D R E A M

ABOUT US












A U T H O R W O O N Z E N G Q U A N A 1 8 H A 0 2 6 9





LECTURER DR. MAZILAH BINTI ABDULLAH


















ADDRESSES






S u l t a n I b r a h i m C h a n c e l l e r y B u i l d i n g , J a l a n I m a n ,
8 1 3 1 0 S k u d a i , J o h o r


T e l : + 6 0 7 - 5 5 3 3 3 3 3 .

E m a i l : c o r p o r a t e @ u t m . m y .

ABOUT HONDA
















H o n d a m o t o r C o , l t d a j a p a n e s e M u l t i n a t i o n a l
Honda Mission Statement
C o r p o r a t i o n , k n o w n a s a m a n u f a c t u r e r o f a u t o m o b i l e s
a n d m o t o r c y c l e s . H o n d a f o u n d e d i n H a m a m a t s u ,
“ A d y n a m i c g r o w t h o r i e n t e d c o m p a n y t h r o u g h m a r k e t
J a p a n a n d S o i c h i r o H o n d a , a n d T a k e o F u j i w a r a a r e t h e
l e a d e r s h i p , e x c e l l e n c e i n q u a l i t y a n d s e r v i c e a n d
f o u n d e r s . T h e y p r o d u c e m a n y t y p e o f p r o d u c t s s u c h
m a x i m i z i n g e x p o r t , e n s u r i n g a t t r a c t i v e r e t u r n s t o
a s a u t o m o b i l e s , m o t o r c y c l e s , p o w e r e q u i p m e n t ,
e q u i t y h o l d e r s , r e w a r d i n g a s s o c i a t e s a c c o r d i n g t o
e n g i n e s , r o b o t s , a i r c r a f t a n d m o u n t a i n b i k e s . T h e f i r s t
t h e i r a b i l i t y a n d p e r f o r m a n c e , f o s t e r i n g a n e t w o r k o f
c o m p l e t e m o t o r c y c l e m a d e b y H o n d a a n d H o n d a
e n g i n e e r s a n d r e s e a r c h e r s e n s u i n g u n i q u e
n a m e i t a s D r e a m . I n 1 9 6 4 , H o n d a M o t o r C o m p a n y
c o n t r i b u t i o n t o t h e d e v e l o p m e n t o f t h e i n d u s t r y ,
g r e w i n a s h o r t t i m e t o b e c o m e t h e w o r l d ' s l a r g e s t
c u s t o m e r s a t i s f a c t i o n a n d p r o t e c t i o n o f t h e
m a n u f a c t u r e r o f m o t o r c y c l e s .
e n v i r o n m e n t b y p r o d u c i n g e m i s s i o n f r i e n d l y g r e e n

p r o d u c t s a s a g o o d c o r p o r a t e c i t i z e n f u l f i l l i n g i t s
I n t h e s e a r e a s , w e w i l l b r i n g t h e u n i v e r s a l p a s s i o n o f
s o c i a l r e s p o n s i b i l i t i e s i n a l l r e s p e c t s . ”
H o n d a t o “ s e r v e p e o p l e w o r l d w i d e w i t h t h e j o y o f
e x p a n d i n g t h e i r l i f e ’ s p o t e n t i a l . ” A n d t o w a r d t h i s e n d ,
H o n d a V a l u e s
w e w i l l “ l e a d t h e a d v a n c e m e n t o f m o b i l i t y a n d e n a b l e
> T h e H o n d a P h i l o s o p h y
p e o p l e e v e r y w h e r e i n t h e w o r l d t o i m p r o v e t h e i r d a i l y
> T o t a l Q u a l i t y M a n a g e m e n t
l i v e s . ” T h i s i s o u r 2 0 3 0 V i s i o n S t a t e m e n t .
> N e w H o n d a C i r c l e s





JOHNATHAN YARKONY

CONTENTS












































INTRODUCTION 5


ENVIRONMENT FACTOR 6


VALUE BASED PRICING 10


SWOT ANALYSIS STRATEGY 11


DIFFERENTATION STRATEGY 12

SUGGESTION FOR PROTON AUTOMOBILE MANUFACTURER 13


CONCLUSION 14

REFERENCES 15

PRESENTATION VIDEO 16

INTRODUCTION















































I a s a r e s e a r c h e r h a d c h o o s e also perform well in motorcycles,

robot, aircraft, ATV, solar cells and
H o n d a M o t o r C o m p a n y , L t d . a
other garden equipment as well.
m a n u f a c t u r e r o f a u t o m o b i l e s ,
m o t o r c y c l e s , a n d p o w e r

e q u i p m e n t i n J a p a n f o r m y
Price is the value that is put to a
f u t u r e r e s e a r c h . H o n d a c o m p a n y
product or service and is the result of
i s o n e o f t h e w o r l d ’ s l a r g e s t
a complex set of calculations,
m a n u f a c t u r e r o f i n t e r n a l
research and understanding and risk
c o m b u s t i o n e n g i n e a n d i s t h e
taking ability. A pricing strategy takes
s e c o n d l a r g e s t J a p a n e s e into account segments, ability to pay,
market conditions, competitor
a u t o m o b i l e m a n u f a c t u r e r
actions, trade margins and input
n o w a d a y s .
costs, among the others. It is
targeted at the defined customers
H o n d a w a s t h e f i r s t i n j a p a n t o
and against competitors.
l a u n c h a l u x u r y b r a n d , A c u r a

w h e n 1 9 8 6 . M o r e o v e r , H o n d a

ENVIRONMENT




FACTOR














Honda as the market-leading brands are In this globalized era, sometimes it is not
easy to differentiate between two similar
always under pressure of competitive
pricing. Honda always being competed by
products that are made by different
other famous brands such as Toyota,
nations. However, some differences are
Mazda, Nissan, Hyundai and so on. These
never disappear, and some differences
brands are had always using the parity
such as styling performance, safety issues
pricing to fight with each other.
and etc. All these car makers produce
Automobile has many type of segment,
different value to their customer but they
such as micro cars, A segment, B segment,
have a little edge between them. They
C segment, D segment, E segment, MPV,
offered high quality products and
luxury cars, sport cars and others. Each
services such as smart technology,
segment has different pricing. For
performance, styling, safety and so on.
example, Honda civic and Toyota Corrolla
are under C segment.
While I doing the research on Honda car

pricing strategies, I do study on others car
According annual report 2008 from
Honda, today Honda by offering different price too, such as Toyota. Price of a car
will affected by rate of foreign exchange,
types of product is one of the strong rivals
for another manufacturer like Toyota and
government policies as well, such as tax.
Nissan. Honda reported 1% sale
increasewhile other competitors such as

Toyota reported double-digit losses.

Recently, our Prime Minister Earlier today, and costs for Honda. Honda as a global
Prime Minister Tan Sri Muhyiddin Yassin companies also face a big challenges of

announced a new economic stimulus the increases and decreases of the
plan, called Penjana, which includes currency value.

measures to help the automotive sector,
specifically in promoting new car sales. Honda do a lot of analyzing on market and
These include a 100% sales tax exemption implement the best strategic to prevent

on locally-assembled (CKD) models and any loss and keep maintain their
50% on fully-imported (CBU) models from competitive advantages in the

June 15 until December 31, 2020. marketplace. Honda Malaysia unlikely to
Moreover, since Honda sales their raises car prices in 2017, even though its

products and services worldwide and
profits margin could be negatively
Honda using an ethnocentric pricing affected by Asean currencies’ slump

strategies. Global pricing is too
against the US dollar, slowing domestic
complicated compared to domestics economies growth and persistently weak
pricing due to the currency fluctuation in
consumer sentiment. Honda’s chief
different countries. Therefore, if we need
executive officer (CEO) and chief
to analyze an organization’s performance,
operations officer, Shugo Watanabe said
global pricing has to use the ethnocentric,
they might suffer moving forward in terms
polycentric, and geocentric pricing
of sales margin. But for now, there is no
strategies.
‘panic situation’ in the Malaysian market.
The country still registers a strong GDP
After the research, I found that Honda
(gross domestic product), crude oil prices
pricing strategy is based on an
are stabilizing and the country’s trade
ethnocentric pricing strategy. This
balance is still healthy.
strategy is demand for the price of a
specific merchandise to be similar all over
the world. When organization practices

this method, it relinquishes some
prospects to set higher prices in nations

where an inferior pricing is required.
However, this global pricing strategy will

bring a currency fluctuation. Changes in
currency value bring an impact on profit

Competitive





based pricing










Honda using competitive based price pricing to compete with the others. If
compare with Honda city and Toyota Vios. Honda city sold Rm78, 500 but
Toyota Vios sold RM 76, 101. Honda sells more expensive than Toyota, but

based on the user rating Honda’s rating is 3.9/5 and Toyota get 3.7/5. However,
people paids on Honda city due to its high quality’s comfortable, safety and

more stylish. Both of them use the parity pricing strategy, their set the price
almost same. Therefore, Honda create a lot of competitive advantages. Honda

can survive and success in these competition because Honda has competitive
advantage and using SWOT analysis to set the price of their products and

services.

According Ansoff, market penetration is For cars made in 2019, the total savings
one of the four growth strategies of the start at RM4,000 for the Honda HR-V and
Product-Market Growth Matrix. Market RM4,500 for the CR-V. The Jazz

penetration occurs when a company hatchback gets RM5,000 while its B-
penetrates a market in which current or segment sedan sister City gets RM6,000

similar products already exist. Market off. The Odyssey MPV, a CBU import,
penetration also known as the way to also gets RM6,000 cashback. Honda
also offers installation and other
achieve this is by gaining competitors'
customers. Honda has developed this payment plans at its showrooms or
strategies by promote the products though through car dealers to motivate

consumers to purchase its vehicles.
marketing channel. Honda allows
Existing owners of Honda products are
consumers to walk into its showrooms and
motivated to purchase newer models of
test drive their vehicles to experience what
the products they own (Johnson, 2005).
their products and services provided.
The various products the company
Besides they also provided discount for
offers are also improved over time to
their customer to increase sales. For
match consumer needs. The company
example, Honda ‘3onus’ March Special.
already holds a large share of the
Honda Malaysia is having the ‘3onus’
various markets it operates in creating a
March Special promo combining a “Thank
tough environment for the competitors.
You Bonus” with March rebates and a
These efforts help ensure continuous
RM500 petrol card or cash option. Add all
sales.
up and you’ll arrive at cash savings of up to
RM10,000. 2019 and 2020 models are
available, with better deals for the former,

naturally.

Value Based pricing










Moreover, the award and
recognitions also help with the
Customer Value-Based Pricing. Honda
glowing the popularity of a brand.
use customer based pricing strategy
Honda receives many awards and
that is dictated by the perceived value
of a consumer and the price of the recognitions of several agencies for
product must be chosen before the its innovation products. In 2019,

product and marketing program is in Honda receives five best resale
production. One type of value-based value awards from Kelly blue book.

pricing is good-value pricing. Good- Which is:
value pricing is characterized by

“offering the right combination of 2019 Honda Insight: Hybrid
quality and good service at a fair price” Car
(Kotler & Armstrong, 2012, p.292). 2019 Honda Civic: Compact

Honda provide a convenience and Car
comfortable car for their customer 2019 Honda HR-V:

which matches the value of their Subcompact SUV/Crossover
products. Honda not just produce one
2019 Honda Odyssey: Minivan
type of car, they do provide many type 2019 Honda Ridgeline: Resale

of cars which will requiring the needs
Value
of the markets. For example, Honda

also offers Honda accord, Acura (luxury
Therefore, their customer will think
cars) at an affordable price, making it
that Honda is more reliability, and
convenient for its consumer. However,
they wouldn’t lose too many value
Honda car also had different safety
of their products. This will make the
system such as: Safety Sensing Suite,
Honda less worries about of their
Road Departure Mitigation System,
competitors. Honda does not using
Lane Keeping Assist System and
any competitive based pricing to
Collision Mitigation Braking System. All
face with their competitors. They
of the values are matches with the
put more effort in their products
price of the products.
value, fulfill the customer needs.

Honda motors is the eight largest
SWOT ANALYSIS manufacturer of Automobiles. It has a

STRATEGY strong and localized product portfolio

and it has been able to achieve these

heights is because of its focus on R&D
and its manpower employed in R&D.
Hence Honda is always coming up
Honda applied Strengths-Weaknesses-
with elegant and efficient designs
Opportunities-Threats (SWOT) Matrix to
which are a hit in the market. Besides,
be one step ahead of the market and
Honda has high technology products,
hence the company has rarely suffered
they keep produce high technology
in its decade’s long tenure.
products to survive among its
competitive environment.



Honda have brand equity for many
years. Honda produce many type of

automobile such as Honda Accord,
Civic and BR-v. That most loved by
their customer.



Furthermore, Honda product portfolio.

It has many types of cars and other
automobiles and it is into power

equipment like generators, and
manufactures high quality engines.



As can be seen from above, due to its
manufacturing advantage, Honda has

a major market share in most of the
products that it manufactures.

Honda's strategic objective of using this
Honda using SWOT analysis to
strategy is to differentiate by embedding
implemented the most suitable for their
the innovation and address their
long run’s business in future. However,
consumers’ growing health concerns. For
SWOT analysis strategic is most
example, Honda has extended its product
common method that been used by
line after studying the consumers’
every manufacturer in marketplace. The
changing interests to differentiate itself
main point is the way of Honda to face
from competitors and expand the scope
with the strong competitors in
of opportunities within the industry. The
marketplace.
combination of the differentiation and

cost leadership has helped Honda build a
Honda designing and producing
strong and loyal customer base.
vehicles based on local conditions and
consumer behavior. Honda use
Through differentiation strategy, Honda
localization strategy for combining the
positions its product offerings in a way to
engineering, design, and manufacturing
stand out and be different from the
function in each of its large local
available alternatives. Being the
facilities. Therefore, all industrial
experienced brand with strong foothold,
companies keep R&D and other design
the company uses differentiation as a tool
function close to home, where they can
to reduce the pressure by other brands.
be managed by executives who are
Heavy investment in marketing,
miles removed from local preferences
advertisement and celebrity endorsement
and circumstances.
is made just to differentiate the Honda
Differentiation strategy from other brands.




Moreover, the company offers a wide
variety of flavors to match the unique taste
needs of consumers. It uses innovation as

a tool to offer differentiated augmented
The adoption of differentiation strategy allows
services that may delight the customers
Honda to expand the customer base by
and increase their preference of Honda
emphasizing over the unique product features.
over other brands.

Suggestion FOR








In here, I think Proton in Malaysia can
In my opinion, I suggest that Proton
prefer to use Honda pricing strategy.
should change their cost based
Proton can considered as one of the
pricing to customer value based
failure company due to inconsistency of
pricing. It because Proton should
sales. Recently, Proton sales drop 41%
improve their products quality rather
again in March 2020 and add on
than using the low cost materials to
February 2020 sales which drop 67%.
build their products. Proton are
Proton said that it affected by Movement
generally considered as value for
Control Order (MCO), which affected all
money. However, this does not
its sales outlets have to closure since
helps proton to earn more money in
March 18.
future. Proton set the price too low
and they lack of money to do
Based on all of the article online, I as a
research and development.
researcher can’t find any evidence why

the sales drop from February 2020.
Therefore, Proton can’t develop a
However, Proton said that they had a
product that are able to attract
confidence to overcome the crisis as
customers in marketplace. The low
they focused on their long term goals.
cost materials costs the cars that

produce are not durability and make
Therefore, I think Proton can referred to
Proton loss competitive in market.
Honda pricing strategy in their future.
Proton should cooperate which
Proton have a lot of competitors too in
Europe manufacturer to produce
Malaysia. Perodua, second national car
more performance and high speed
manufacturer in Malaysia is the best
vehicles to beat his competitors in
example of their competitors. Perodua
foreign market. This is because
are more competitive in local market,
Perodua still unable produce a very
because Perodua is one of the sub
high performance cars nowadays.
company which under Daihatsu Motor.
With the high quality products,
They have more advance technologies if
Proton are able to earned more
compare with Proton.
capital to keep improving through

Research and Development (R&D).

Proton can offers more types of vehicles to Since, Proton have lower tax

expanding their market. Proton can shifted advantages, i'm personally very
themselves out of the box such as hope that Proton can be smart at
produce, motorbikes, and trucks. These pricing and able to produce a

innovation will able to bring more profit for competitive products among
Proton. If Proton able to expand the markets. With the smart pricing

market, local customer will had more strategy, Proton are able to
opportunities to choose local brand increases their product lines, and

manufacturer due to lower price and taxes. able to do research and
development(R&D) in the future.
For example, Honda CR-V compare with

Proton x70. Both of them are SUV.
conclusion
However, Proton X70 is cheaper than

Honda Cr-V. But, unfortunately, the Proton
X70 is available in only one engine option,
According Wikipedia, pricing is one
and that’s a 1.8-litre TGDi petrol mill. One
of the activity of a business sets the
can choose between 2WD and 4WD. But
price at which it will sell its products
Honda offers the CR-V in two engine
and services, and may be part of the
options. One is the bigger 2.0-litre SOHC i-
business's marketing plan. In setting
VTEC mill that produces 154 PS at 6500
prices, the business will take into
rpm along with a maximum torque of 189
account the price at which it could
Nm at 4300 rpm. Next is a 1.5-litre DOHC
acquire the goods, the
VTEC TURBO unit churning out 193 PS at
manufacturing cost, the
5600 rpm and a peak torque of 243 Nm at
marketplace, competition, market
2000-5000 rpm. Both these mills are
condition, brand, and quality of
mated to a Continuous Variable
product.
Transmission (cvt).
Therefore, implemented a suitable
In this case, i think that Proton can improve
pricing strategy will make sure the
their engine and provide more options to
business long run. Honda used a lot
their customer. However, i think Proton can
of pricing strategy to maintain their
learned from Honda which provided more
business suceess. Therefore, we
options for customers, improve the
can summaries that pricing is a
quality. of automobiles and services.By this
practical matter because a company
innovation, Proton can applied skimming cannot succeed if we do not earn
pricing strategy in their new technology enough to cover costs to innovate

and products. and production.

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divided-over-nap2020

presentation







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