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NAME STUD NO GROUP SUBJECT 10) COURSE

: PARIMALA SARATHI MANNAVA : 7254 :P : MRPP AND MRM MODULE (3 AND : PGADMS

ACKNOWLEDGEMENTS

I would like to take this opportunity to thank Mr.Hassan Mahmood, our teacher who helped and guided us all through the assignment. His practical approaches to understanding various concepts of management have given me enough insight to understand the requirements of this assignment. I would like to tell my children that I am proud of them for not disturbing me all through the preparation of this project. Last but not the least my husband who supported me to successfully complete my commitment and helped me stay focussed.

ABSTRACT
This assignment helped to design a strategy for a new product to be launched for the Honda Motor Company (HMC)in the Automobile sector. The New product is name HONDA DREAMZ, with latest state of art look meeting consumer expectations in south East Asian countries Malaysia, Indonesia, Philippines and Thailand. It starts with the design of this new car to suit various conditions in the geographical area with a demographic segmentation in of marketing chosen to target customer base. Various tools and techniques are applied to come up with an action plan to launch the product with a timescales deadline created. From understanding the economy of these developing markets, targeting the working sector individuals, and working out various strategies for successful launch and succession of the new product is discussed.

Introduction
Honda Motor Company (HMC) is a popular Japan-based car company which has grown to become the worlds largest automobile and motorcycle manufacturer. It was established by Soichiro Honda in 1946. It first started producing automobiles in 1972 and since then have successfully produced variants of vehicles like the four door sedan, wagons, hatchbacks, coupe and the more recently the Hybrid. With a worldwide global network, they meet customer needs by manufacturing and marketing a large variety of products ranging from small engines, motorcycles to super speciality stylish sports car. This companys principles and philosophy according to Mr. Honda as articulated in 1954 are - "challenging spirit in the company principle: "Maintaining an international viewpoint, we are dedicated to supplying products of the highest efficiency yet at a reasonable price for worldwide customer satisfaction." Following this principle, the company continuously strives to attain consistent customer satisfaction by showing its presence in developing its brands in all major markets and gain new winnings in newer markets through localising sales and developing products / cars to meet local customers expectations in each particular market. This present New Product Development is such other venture proposal to capture the South East Asian market which includes Malaysia, Indonesia, Philippines and Thailand. With a competition from Toyota, Nissan, Proton, Suzuki, Daihatsu, Hyundai etc., Honda City bagged the Best model award beating the competition and aiming to reach greatest heights in automobile industry. http://www.strategy-business.com/article/13515?gko=ce6a5

Task 1.1
HMC has always made sure they practically work to meet their philosophical promises. They have always done a top-down approach in MODELING TOTAL COST where they first identified what the customer expects from them and price it and then decide and deduct their profit and then work the costs for chassis, engine etc., in such a way that, the customers always get the best while they understand the supplier costs and work around the statistics without penalising the customer or making change to customers promise. The suppliers of Honda have always described them as FAIR wherein they always strike a right balance between co-operating with suppliers and insuring competitive pricing. Their meticulous cost modelling, quality assurance and customer satisfaction have paved way for them to be leader. With changing trends and new cars in the market, the last one of Honda the Honda Civic Type R being released in sports style luxury model, they have realised a need to produce a car to suit the average house hold which forms the major percentage of total population due to the growing working class culture in SE Asia.

They have successfully launched and maintained their brand in almost all parts of the globe. Now concentrating on the south East Asian market where the marketability seems to be booming because of the growing/developing economies on this side of the world. Honda

http://www.marketoracle.co.uk/Article21838.html

Need: Please see the figures under which reveal the GDPs of these four countries. These
are the developing economies with great scope for automobile business. This is the reason why Hondas clear about its objectives to capture this astonishingly growing market. It has plans of widening operations in these south East Asian countries with a long term view, so has this proposal for a New Product Development has been prepared.

http://www.unhabitat.org/documents/WHD10/EN/Asia_Press_kits/Graphs_and_tables_Pk.pdf GDP growth (%) Indonesia Year 2005 Year 2006 Year 2007 Year 2008 Year 2009 Year 2010 Year 2011

Malaysia

Philippines

Thailand

5.69 5.5 6.35 6.01 4.55 5.5 6

5.3 5.8 6.2 4.6 -1.7 5.3 5.0

5.0 5.3 7.1 3.8 0.9 3.8 4.6

4.6 5.1 4.9 2.5 -2.3 4.0 4.5

30 25 20 Thailand 15 10 5 0 Year 2005 Year 2006 Year 2007 Year 2008 Year 2009 Year 2010 Year 2011 Philppines Malaysia Indonesia

Adapted from Source: Asian Development Outlook database.

Asian Development Outlook 2010 http://www.adb.org/Documents/Books/ADO/2010/southeast-asia.pdf


The above charts emphasise the growing economy in these countries. Statistics reveal that more than 60% of the population in these areas is working class who would be a good target for the product planned to be launched. Further findings are discussed in Task 3.

Objectives:
To explore and flourish in newer segments of the markets around the world To meet customer expectations by providing supreme quality cars to reach all divisions of customers. To increase revenues, market share and profits in due course. To grow along with the growing south East Asian economy. To produce high-tech aerodynamic cars with state of the art feature. To produce environmentally safe driving experience. To become the No.1 in Automobile industry.

Specifications of

Honda Dreamz 1.5L Vtec(P)

Engine type : 4 Cylinders, 16 valve water cooler SOHC Capacity : 1496cc Max power : 121.3 bhp @6000 rpm Max Torque : 143 NM at 4800 rpm ABS dual airbags, Crash Test approved, 4 speeds automatic with super ECT and Gate Shifter with ultra seat and control technology. Price : $ 18787.00 Aerodynamic exterior Superior driving experience and comfortable interior.

Adapted from Honda Website

Task 1.b SWOT


Strengths Continuous Consumer Satisfaction have been the biggest strength. Customers get what they desire. Quality motor cars with fuel efficiency and least carbon emissions. Innovative and market leadership and reputation of world popular car producing company. Products made in accordance to suit different geographical locations Brand name, equity very strong its heritage

Weaknesses Expensive compare to competition Underpowered reputation

Opportunities Environmental benefits Alternative power sources used Economical cars for working class segment Low emission vehicles

Threats Competitors like Toyota, Hyundai, Ford many more Low price car producers Demand of compact cars

Other companies coming with cost effective ideas of lower emissions Government, taxes etc external effects

PORTERS FIVE FORCES


This analysis gives a much more focussed view of the strengths and weaknesses of a segment of market Bargaining (power of suppliers)

Suppliers have a very meagre bargaining power. There are so many firms supplying parts to produce automotives that these automobile companies may think that the suppliers hold a big power over them. In fact on the contrary, they hold very little power as companies are approached with so many suppliers, they have a wide choice hey can choose from. Each suppliers business strongly depends on a couple or more customers business. Even if one of these customers change the supplier, the suppliers get into big trouble. Even in Just -in-Time situations there is a tug of war. Threats (from the substitutes used in different technology) Other sources of fuel usage used like the natural gas, Electricity, Sun light etc., Similarity of products produced by other competitors, Alternative source of transport used by consumers, other segments.

Threat of New Entrants Slow sluggish economy is a big barrier for the cause. New entry involves hugs investment and expertise involving very high fixed costs which hamper their entry. Demand for automobiles is lower compared to the wide range of choice already available.

Bargaining ( power of Buyers) This industry is highly competitive. The buyers or customers do have some control over on the bargaining power. Honda is known to produce fuel efficient high quality cars. As there is an increase in fuel cost and the changes are economy, customers are seeking best for best price. This is a result of wide understanding of the world on saving nature and Go Green concept. Rivalry (Intensity among competitors)

Gas Crisis and Foreign trade have increased the intensity of rivalry. With competitors competing in producing cars of superior specifications, cut throat competition increasing leading to industry competitive rivalry. Price wars.

PEST Analysis
This analysis helps us understand the effect of external environment on HMC and its functions Political : The political situation of countries, Environment related rules and regulations operating, Regulations of international trade, laws relating to employment, Import export, Taxes and regulation concerning healthy competition and related rules. Legal rules and regulations concerning production of goods. Economic: Inflation, economy, growth, GDP, Buying power of customers, exchange rate, Taxes, Monetary policies of Government. Social : Tastes of customers, Fashions, Demographics and distribution of income, health concern, education and welfare concern, social status of consumers, stature, lifestyle and personal expectations. Technological : Innovations, Upgraded technologies, Government or industry trying to work on research and development, Changing technologies, speed of technology transfer, need to move with the moving trend of technology.

The above analytical tools give us an insight into various aspects that effect HMC. The SWOT analysis helps us understand the internal situations of Honda. About what is the competitive edge keeping in minds the various threads and weakness. While the PEST analysis makes sure the companys prepares itself in accordance to the changes of various regulations in the external environment which have a direct influence in the running of business. There are various policies to consider before any piece of decision is made in any direction of business. The porters five forces is an extensive analysis into the market in which HMC survives. It is a preparation in the battle of whos more powerful in terms of sale and customer satisfaction. With this exposure, the company should make sure that they consider all the above results while making an action plan for the new product development, monitor them and propose future research possibilities which by itself give them a capacity to work towards an ongoing future.

Task : 1(c) and (d)


HMC has been successfully designed and engineered a no. of attractive and efficient products till date. Honda (including the Acura division) has proved itself to be an outstanding performer since 1960. During 1970 till 1990s HMC produced more than 1milliond units of production leaving many other high-rated organizations like Toyota, Suzuki, Mazda, Nissan, and Daihatsu to follow the list after HMC. With a history like this and the demand, goodwill and reputation of producing highly efficient automobiles, HMC is looking to establish their market prominence in south-east Asia by producing Honda Dreamz. Dreamz as we called it has all for the consumer in that market is looking for. In a competitive market, NPD is suppose initially they could aim to target the existing customers, give them an enhanced version of the product for a lower price of competitive price, keeping in mind that the new product has all the features presently available in a selection of cars available in the market. Work on a highly competitive price and cost effective. Or Strategy B, where HMC producers a unique car, with uniquely exceptionally differentiated from other cars and trying to fit into the Hierarchy of cars. They

basically create a whole new segment or a new world of experience for all types of consumers. This is why this strategy can be called discrete mosaic while the first one is called the continuous spectrum. The new product targeted to be engineered is a mix of both the above strategies. With the reputation of its kind, while the customers are waiting for a new introduction of a car into this globally booming economy, where the need of more cars is increasing, with the results of working with the analytical tools mentioned under, this NPD has a very high possibility of success than risk. Also to remember that this is a new product in an existing market which itself indicated moderate risk. In this scenario, considering all the above facts an action plan is prepared which benchmarks the dates of achieving progress in the series of steps to happen for successful NPD. Timescales for each stage of action are mentioned aswel. According to the BCG model report, Honda is an expert in lines of product design and innovation and is happily willing to leave profitability to establish market osition and an increased customer base and achieve extremely low unit costs. This was the attitude when it spread in US and now lloking with a similar protocol to win the south-east asian market.

NEW PRODUCT DEVELOPMENT ACTION PLAN HONDA DREAMZ 1.5L VTEC (P) TO BE LAUNCHED IN OCT 2011

Key Activities (Milestones) Proposal Accepted Resources gathered and kick off date Prototype Production(including making,

Time-scale (Plan of action) Dec 2010 Jan 2011 Feb Apr2010

validating and testing parts on continuous process) Prototype produced by Final Pilot Engineering Sign Off Crash test Altitude test Suspension and Safety test Approval from authorities(team of Govt authorities, environmentalists, Board etc.,) Test Launch Launch of HONDA DREAMZ 1st June 2011 15th June 2011 Total 7 months Submission of the final report 12th May 2011 15th May 2011 18th May 2011 20th May 2011 24th May 2011 29th May 2011

Task 2(a.i)Research Methodology

This helps determined which kind of study is beneficial to get most of the information required to research on a given subject. In the present case, a Deductive research method in combination with a relational study will be most suitable. Reason being, he deductive method works from a more general to a much specific view and the relational study will help us analyse the relationship between two or more variables. Because this NPD aims at producing a car for the working class which constitutes to more than 60% of the total population. So, here from the choice of various types of cars to be produced, we narrow down to focus this particular segment of market, who can afford the car when finance is stretched suiting their salary criterion. Now, a relational study of competitive product to that of HMC will help understand what will make HMC lead the market or what will help HMC develop a competitive edge. Or in case of how

many people would be interested in this type of a car compared to the other. So, a deductive research method with relational study will be more focussed on the purpose.

Task 2(a.ii)
Data collected can be both Primary and secondary data. Primary source information collected in the form of a questionnaire being filled by a variety of people who will give sincere answers to close end questions. Or make cold phone calls to a large database of people and get their verbal questionnaire filled in. Secondary data sources can be from the following sources: The companys previous records. Information from various data information centres can be requested. Internet has a large variety of information which can be used to our requirement. Information requested from various dealers selling cars. Various automobile companies in competition to give their sale/market figures.

2(a.iii)
Information thus collected from various sources, needs to be analysed to arrive at a conclusion to understand the strategy for the new product introduction or development. Both Quantitative and qualitative data analysis tools can be used in this case. Quantitative to analysis mathematical comparison of figures. These tools are Percentages, Ratio Analysis, mean, median, mode, standard deviation, hypothesis, probability etc., For example to work of the GDP of a group of nations. Now the qualitative analysis helps us understand how the future could be, based on historical data. Depending on market behaviour in a certain market with a certain financial conditions, how did the consumers react? This could be collected as secondary source collected data. However, these results help us understand what changes once made will help us progress and how and by what time. Results from survey research can be analysed when all data is put together. For example, for the present new product, if a survey is conducted on 5000 people, out of which 2000 are happy to buy that kind of a product, 1800 say that they are not interested, and 1200 people say they may or may not (who still are treated positive and can be gradually convinced and are considered as prospective customers. In this case 40% is a substantial percent of market if high probability that

they can buy the car, while 24% is still potential customers who may be converted into realistic customers in future. All the data thus collected gets presented in a form which is most adaptable and understandable easily. Ideally in the form of bar charts or graphs with supportive literature to explain the outcome of the analysis conducted.

Task 2 (b)
A project requires various resources to implement. Economy: Every organizations economic view is that to make profits primarily while the rest of the conditions can only be secondary. They mainly focus on how well capital, human resources and material can be combined to get the maximum returns. The main philosophy behind this is while the owner of the company benefits, the whole community benefits and moves a step ahead with him. Efficiency and Effectiveness: In large industry, expensive machinery is installed for production purpose. If such machinery is not used at its best and left unused in times, it is a mere waste of investment or resource. And, this is how efficiency is determined, which will directly affect the profits of a company. Similar norms apply in case of suppliers and every business where the core is operations needs to maintain their efficiency. Cost Dimensions: Cost is a very common term in every business. Any kind of efforts made to save costs help retain profits which can be re-invested in business. Cost effective proposals cutting down all kinds of wastage need to be strictly followed. Cost cutting should be a continuous process, however, to an extent where it doesnt have a negative effect on business. For example: Cutting hours works by staff to cut cost could have adverse effects on production and employee morale which will directly bring down production, profits and reputation of the company. Premises: This resource has various dimensions. Location of the plant/premises, layout, security, locality of the premises, Health and Safety, Costs, Sixe, Tenure and accessibility for people etc., Considering these facts a rental or lease agreement should be most suitable as buying will block long term investment. Accessing funds: It is important to determine how much capital or money would be required in which part of the organization and will the organization be able to generate the same? Depending

on the kind of business expansion in general and new product development is specific, an analysis onto how available are the funds is imperative. Overheads: Costs can be divided into two types. One is the direct costs which are in simple words the costs that pertain directly to Human resource, machinery, premises or any other expense in specific. Where overheads are are other incidental costs incurred for maintenance of the direct costs. E.g. rent for premises, electricity charges, heating etc., they dont change with the change in the amount of production. Machinery and Equipment: Required to perform the operation for which the business or organization is established. Examples could be machines for production, computers and other office products. Funds / Capital: The money required to start up and run a business is a primary resource. The establishment, running, producing and operating of business activity needs capital. The other terms used in relative are costs. Human Resources: The people employees to perform job in the company are the companys Human Resources which are one of the important input a business needs. Could be people from any department or any position in the organizational structure. Training and Development: A programme well planned for employees and managers make them aware of their role in the company and what is expected of them and will give them an insight into the companys business aspects. A continuous training and development programme for all employees will keep them connected together and with the company equally keep them motivated and gives them a feeling of belonging to the company. Regular job evaluations and appraisals need to be carried out. Workforce planning is a fundamental planning tool. This planning starts with analysing projected supply of work force. Then a regular forecast being made on future requirement. Then compare the skills and expertise required for the jobs to b performed to that of what is possessed by the employees at the moment. Prepare a strategic plan to fill in gaps of lack of expertise or surplus skills to arrive at balance and complete jobs successfully in time. Contingency / back up plans: These plans can be implemented in emergency situations where the original plan needs to be collapsed or withdrawn. In short, Physical Resources, Financial resources, Human Resources, T&D (Training and Development Resources), Maintenance resources.

Task 2(c)
Sources of Resources: Physical Resources: Can be the Assets already owned by the company or acquired on lease or rental basis for a purpose. Financial resources: Here is a huge variety. This resource can be raised in the form of Equity by issuing shares and invest share capital in business which in case of HMC is the primary financial source apart from various kinds of borrowing such as very-long term, long term or short term loans acquired from banks and other kind of financial institutions. Retained profit could be another. Human Resources: HMC advertises job through various outlets. Through their job websites, through job centres, through professional recruitment agencies to fill in specific technical skills, private consultants etc., they even conduct various yearly job fares where they get a number of prospective applicants actively seeking employment. Training and Development: This resource can be provided in two kinds. 1. By having an inhouse team of trainers who generally work in collaboration with Human Resources. These trainers conduct Inductions for new employees and training and refresher programmes for existing employees. Technical training is provided by company employed technical experts who directly are involved in business. 2. The other way would be an external agency involved in training the employees from on various Jobs or subjects. In case of HMC both the kinds of training and development activities are performed depending on the skills required to be gained. Maintenance Resources: Maintenance, Artisans, administration and relative departmental people are recruited by the Human Resource Department in the company or Job centres or agents of job markets to fill in vacancies from time to time.

Task 3 Marketing plan for NPD in HONDA MOTOR COMPANY

Every aspect in the world starts with a simple idea. Which gradually takes shape of reality when fuelled with the resources required for it? The whole process of NPD is divided into 7 steps, which are detailed below Idea Generation: Behind every successful product, there would always be many ideas included and discarded. Companies encourage large number of ideas innovative, to finally come up with the best one which emerges as a new product. Its a continuous process and systematic. Idea Screening: As this stage the various available ideas are trouble-shouted. All technical and related experts sit together in this operation and decide the pros and cons of each idea. They dissect it rigorously till they are all or on majority convinced that the idea decided is feasible enough, practical enough reasonably enough and is in line with the companys mission and strategy. Concept Development and Testing: At this stage there is much focussed research and analysis and formal evaluations are conducted based on customer information. . At this stage the consumer is given with a product proposed to launch. Then the attitudes and response of the consumer are analysed

http://www.referenceforbusiness.com/management/Mar-No/New-Product-Development.html Business Analysis: The fourth stage is the business analysis. Till this stage the whole process of new product development s only on paper. Till this stage there is only a little investment made. At this stage the marketing and manufacturing costs are analysed. If the product has limited potential for profit or success commercially, the idea of pursuing this project is dropped. Competition, investment needed and profitability are the other elements.

Prototype Development: This is the place where the costs for making the product start building. In all cases, a lot of emphasis is made on the first 4 steps where most of the proposals reach a point of rejection, unless they have a viable point to continue with. At this stage the product is actually made according to the requirements of the customer. Quality Function Deployment (QFD) could be included by some companies at this stage. QFD basically helps to make product depending on specific customer requirements like versatility, low maintenance etc.

Test Marketing: At this point the product is tested in simulated environment. Products that dont perform well at this stage get discarded. Commercialization: This is a stage where the highest risk is taken, the product is actually introduced and the level of risk is as high as the investment. Cross functional co-ordination should be considered here.

Factors influencing NPD: Organizational structure, Leadership and Teamwork: Organization structure, team mates and the correct leadership has enormous effect on NPD. A Structure that promotes information exchange, material and decision making and is directional in approach to lead the whole project becomes very essential. In launching NPD, the management can provide career advancing for exceptional leaders with entrepreneur skills and encourage all employees to feel equally a part of the NPD and give their best. Leadership has tremendous effect on NPD. They the motivators of the troop. Creativity and problem solving skills are a prerequisite in NPD as there could be resistance or there could be a lot of time consumed in adapting to the new development. Experience: In NPD helps new performances. Style of Management: With the introducing of NPD. Successful companies not only change their structure to fit into the current scenario, but also tailor their approach towards new opportunities on products. Resources: Adequate available resources for the NPD, senior management is highly concerned in every step taken at this point as it has a direct effect on the performance. Improving Speed, Efficiency and Quality:

Tools and Techniques


4 Ps Marketing mix Have four components of marketing plan. The four Ps are the elements of marketing which are, Price, Place Product, Promotion.

Product

A product is an object that can be physically touched (tangible) manufactured as pre-decided.

For example, a motor car produced is a tangible product while the service delivered by airlines cannot be touched physically, so is intangible. There are three different levels in describing tangible products which are the core product which is the benefit one derives from buying a product. In this case the comfort of travelling experienced by an individual when he buys a HMC car and this level is the intangible one. The second one is the physical product itself which is tangible. The third one is the augmented product which is a non physical one but comes as an added-value to the care. Example Warranty.

In case of HMC, the various products or variety of cars produced are Honda CRZ Sport, Honda Civic, Honda Jazz, Honda Accord, Honda Hybrid, Honda CR-Z, Honda Insight etc., Another tool for evaluating the product is the Product Life Cycle (PLC).

Price Price of a product is determined by many factors like share in the market costs of material incurred, operating cost, competition, perceived value of the product etc., in simple words it is the amount of money a customer pays to take his car home. In case of situations where the same product is available elsewhere, price variations come in. Prices vary within various products available in HMC Place

Place is a place where the product is available to buy. It could be either physical stores which are the places where the product are kept / held physically like a dealers place or a virtual store on the internet.

In case of HMC, Honda cars are available everywhere around the globe. Promotion The last P is Promotion. The explains about how communication about the product has spread in the market. It could be one to one selling or an advertisement on internet or newspapers or direct mail or trade fairs or shows or on other media. In case of HMC, promotions are advertised in various media sources like televisions, newspapers, motor shows or trade fairs, brand promotion etc.,

NPD Honda Dreamz 4Ps Product Honda Dreamz 1.5 VTEC (p) A third generation car with exotic looks, design and aerodynamic outlook. Interiors are comfortably designed with CD player /music system and comfortable seating and adjustable seats. All-in-all designed to suit the climatic conditions and roads and transport system of south East Asian market. Price - $28787.00 competitive when compared to the cars produced by other companies and definitely has a value for money product for the segment of market. Place Malaysia, Indonesia, Thailand, Philippines. HMC has business tie-ups in all these four south East Asian countries with various dealers who sell on behalf of them. They are localised centres with after sales and service facilities of customers. The authorised showrooms with hold the cars put up for sale. Promotion Compared to other competitors like Ford, HMC will make a silent launch of its product. Television, Hoardings, New papers, Motor shows, walk-ins at the shops and on website. The main concept here will be to promote the technical advancements HMC has been providing from time to time. Majority adverts will be in print media like the magazines and local newspapers. Business magazines at the reach of working class people.

http://retailbrains.blogspot.com/2009/03/marketing-mix-adopted-by-honda-siel.html

Ansoff Matrix

Adapted from www.tutor2u.net The Ansoff matrix was developed by Igor Ansoff and is a very useful technique in theory and practice of marketing strategy. It plays a vital role in deciding where the new product is categorised in. The speciality of this matrix is that it not only analyses opportunities for growth but also prepares to think in lines of risks as well as returns. This framework helps planning growth opportunities. There are basically two dimensions to this market Products and Markets. The generic strategy of growth can be explained as Market Penetration Where more goods of the same kind are sold to the same old customers. Market Development Where existing goods are introduced in a new customers for sale. Market Diversification - Where new products are launched in new customers in new markets. Product Development Where new products are offered to existing customers. In the case of Honda Dreams, its a new product in an existing market, so, falls under the Product Development category. Risk Factor Under market penetration, the customer already knows the product, it is local to him and he would at any point of time turn to buy it so there is very little risk involved. Unlike Diversification market, where everything is a fresh start. On the other hand Market development and Product Development have moderate risks, if implemented and targeted in the correct market, could be very successful. In the case of Honda Dreamz a new product comes into the market in the form of

New product to replace older ones. More innovation into market Product improvement and extension of line. Higher quality level goods complementing existing ones. With a company like HMC, with world renowned Research and Development facilities, new product is implemented when the market is growing, or a very rapid change in demands for newer cars, or existing brands like Honda have a strong hold or when the competition has highly competitive cars up for sale. MARKET SEGMENTATION The next question that comes to mind is where should we or whom should we sell the product to? And, the reason why this kind of question need to be understood Is in order to avoid waiting resources diverted for NPD, to target that segment that is most profitable, avoid redundancies in any segment and get maximum response. On what basis is Market Segmentation done there are various types of market segmentation which dissect the market according to different criteria. The criterion into which the new product most fits should be the target market. Segmentation based on Geographic location: This kind of segmentation applies on the basis of the location where the customers physically exist, within those boundaries. The following points to be considered Where does the customer reside? If it easy to promote the product there without any limitations? Whats the size of the country, its weather conditions, population and its density? These elements are seriously considered for Geographic Segmentation. Demographic Segmentation: Under this kind of segmentation certain specific characteristics or quality in general population are considered. What age group do the consumers belong to? What are their incomes like and what are the occupations they are under? What is the quality of their education and size of the family? Which religions do they follow and what language do they speak? Psychographic Segmentation: This kind of segmentation is very helpful in devising successful strategies in marketing. It emphasizes completely on customers perspective. What are the attitudes of the customers and their life style? The general personality traits of the customers must be kept in mind. The hobbies of the selling company are also important. Segmentation based on behavior: Here, based on previous behavior patterns of consumers, the future response for the new product are determined. Brand loyalty, satisfaction, benefits for

customers, profits possible, how often the product would be used and finally the level of income of the customer. In the present case, the Psychographic segmentation is the most suitable. http://www.buzzle.com/articles/market-segmentation-analysis.html
Stakeholder Analysis: Analysing how the stakeholders would respond to the NPD is crucial. Their acceptance drives the project roll faster. With minimal resistance, the team and concentrate on the operational side of the project. The various stakeholders that would be effected would be the employees, financial companies or banks, Shareholders, the government of the countries involved, capital market etc., Since 1980s there has been tremendous importance given to people resources. This has led to the organizations to continuously invest of developing this resource.

Cost Margins and Cost benefit Analysis (CBA): This is a widely used technique which decides whether a certain action is beneficial to perform or no. It simply calculates the total benefits derived when a certain action is performed, an estimate is made. From which the total costs incurred is subtracted. For a new product development to work, initially at least the direct costs should be covered. Over a long term all costs should be covered and should generate profit. Profit margin calculations are of three types, which are self explanatory 1. Direct cost margin = sales price total direct costs 2. Break even vol = (fixed costs / direct cost margin %)/selling price 3. Break - even price = direct costs / unit +fixed costs / volume When price is set at break even, it will give zero profit. But at least theres no money lost on sale. However still is not a desirable result at all the investment and work put in is still not paid off. Profit price = direct costs / unit + (fixed costs +desired profit) / volume. This is when profits are made. Its not imperative to question can if we can still sell the new product at this price and still be competitive in the market? If the answer to this question is no then cut down the costs and desired profits otherwise concentrate on products that have a better profit margin. Budgeting and Cash flow: Budget is a way expenditure is constrained. It predicts on how much a certain of activities could cost. It is a consolidated figure of all costs incurred in the whole process of NPD. There are different kinds of budgets organizations produce. Either short term constant budgets or long-term variable budget. The accurate information available for the project plus the information of possible expenditure, both in accuracy determine budget.

The management always aims to relate requirement of resources to the corporate goal of the organization. Meetings conducted for decision making, general co-ordination for budget planning and these relative activities encourage co-operation between all functionalities, motivates them to work together in teams for a common goal.

Task 3(b) Measures to monitor and evaluate progress


AT all crucial points during NPD a thorough monitoring is essential. During implementation process a market testing or pilot testing is conducted before the product is ready for release in the market. This basically is a simple exercise where a questionnaire is filled in with simple questions to answer and indentify the existing problems or recognise possible problems in course. Any leading questions answered need more checks. Leadership: Helps develop maintain a progression of inspiring vision and influences individuals to feel that they have a positive power to use. The leader has a very important role to play. Starting from setting goals to working towards achieving them, he needs to make sure that relationship in and outside the organization lead to an effective organizational performance. Team building, Motivation and Delegation: The project manager/team manager has the authority to distribute his work load in a team and gradually help the subordinated acquire the ability to grow professionally and work individual with an aim of complete satisfaction on both sides. It also paves way to team building and helps team members stay motivated, focussed, feel belongingness towards the organization and a joint attempt made to achieve goals. Stages Breakdown: In a large project the total activities are split into stages of performance in order to differentiate between the activities and be clear of what is expected of whom and by when. The most commonly used Product life cycle is Concept, Requirements, Architectural design, detailed design, Coding and development, Testing and implementation. Gantt chart: They are a pictorial representation of scheduling of tasks performed. This helps the project manager understand the progression in each stage. A sample Gantt chart for the present NPD could be like this -

Gantt chart Dec-10 Proposal Accepted Resources gathered and kick off Prototype production Final Pilot signing off Crash Test Altitude test Suspension and Safety Test Approvals from Authorities Test Launch Jan-11 Feb-11 Mar-11 Apr-11 May-11 June11

Project manager keeps reviewing the chart with an intention to speed up the development process. He also conducts various meetings from time to time to make sure all functions are working at their best and help provide support to the various departments if necessary.
Quality Control and Analysis: The project manager should make sure all through the project that the product meets all the quality and safety standards. This team should make sure they are in conformance of what they promised in terms of Appearance, Reliability, Durability and recovery step Auditing: Auditing prepares organization to be proactive. It finds whats wrong today and makes sure future problems dont occur. Auditing can be arranged internally by a team of members allocated to do that or by an external company or contractor fills in this job. Time Management, Meetings, and Deadlines: As mentioned during the Gantt chart, the project manager monitors all through to make sure the deadlines are met and no time is wasted during development.

Task 3(c) - Finding


As you know, Im a fan of emerging markets and a big proponent of exchange trades funds (ETFs). They fit together almost perfectly. Today I want to focus on one fast-growing region that is getting more and more attention as Western economies crumble: Southeast Asia. As youll see, ETFs give you some exciting new ways to get involved in this booming part of the world says Mr.Ron Rowland a stock-market analyst says in a discussion on Profit from booming South East Asian Economies with ETFs on the 12th Aug 2010.His analysis is based on the potential south east Asia holds for the world market. With huge population, natural resources in abundance, excellent location strategically with critical shipping connecting directly from all over the world has pushed their growing economy. With a benefit of being in the proximity of the giant dynamic economy- china. For example, with population more than 240 million and a wide region of land mass, its economy is growing astonishingly with great help from the crude oil. Similar stories on Thailand and Philippines holding long-term prospects. Coming to Malaysia, now grown into a modern industrial exporter from being mining and agricultural based. Its believed this market is growing far faster than the US. http://www.marketoracle.co.uk/Article21838.html With the backgrounds Task 1, need and objective, this report is a proposal made to the Board of directors with for a New Product which shall be called Honda Dreamz. Small dynamic car to suit road and traffic conditions of South East Asia, nurtured to meet the weather conditions and meeting the environmental safety conditions with lower carbon emissions and recycling of production waste in according to the Government regulations in individual countries under the patch.

Pascale's "Honda Effect" According to Pascale [1984: 51], the BCG portrait of Honda
exemplifies the strategy' model. Honda is portrayed as a firm dedicated to being the low price producer, utilizing its dominant market position in Japan to force entry into the U.S. market, expanding that market by redefining a leisure class ("Nicest People") segment, and exploiting its comparative advantage via aggressive pricing and advertising

Task 3(d) Recommendations

Based on the same research mentioned above, it can be concluded that not just the four countries mentioned for the launch, in fact, the whole continent is a growing economic power which has already to some extent and in future will gain attention from all over the world in terms of all kinds of trade. So, coming to the automobile needs, at this point the need for an average consumer has been address by Honda. And even in the present NPD more focus is on the working middle class to the upper middle class. With the rate at which economic growth is influencing the individual lifestyles, their salaries, their savings etc., it is evident that HMC could be looking to a challenging future in this part of the world. Unique product to meet high profile customer should be the next project in line as the individual earning power, GDP finally per-capita income in these countries is on an increasing trend

Bibliography
RDA reference material level 7 Diploma in Management Studies 2007
Pascale, Richard T., "Perspectives on Strategy: The Real Story Behind Honda's Success," California Management Review, 26, 1984, pp. 47-72. Rumelt, Richard P. "Evaluation of Strategy: Theory and Models." In Schendel, Dan E. and Charles W. Hofer, eds., Strategic Management: A New View of Business Policy and Planning, Boston: Little Brown, 1979, pp. 196-211.

http://www.strategy-business.com/article/13515?gko=ce6a5 http://www.marketoracle.co.uk/Article21838.html http://www.buzzle.com/articles/market-segmentation-analysis.html www.tutor2u.net http://www.unhabitat.org/documents/WHD10/EN/Asia_Press_kits/Graphs_and_tables_Pk.pdf

http://www.referenceforbusiness.com/management/Mar-No/New-Product-Development.html http://retailbrains.blogspot.com/2009/03/marketing-mix-adopted-by-honda-siel.html
http://world.honda.com/ http://www.honda.co.th/th/index.php http://www.honda.com.my/

http://www.honda-indonesia.com/ http://www.anderson.ucla.edu/faculty/dick.rumelt/Docs/Papers/HONDA.pdf