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| MEDIA PLAN ASSIGNMENT
American Honda Motor Co./ Honda Civic Company BackgroundHonda is one of America’s biggest manufacturers of automobiles. 2005 marked Honda’s 45 years of sales in the United States AHMC began in 1959 in Los Angeles under the guidance of founder Soichiro Honda, a mechanical engineer who founded the Honda Motor Company in Japan in 1948. As of 2005 Honda’s United States Plants put together approximately 1.5 million Honda vehicles. AHMC markets many lines of autos in the US including Honda Accord, Civic, Pilot, CR-V, Element, and so one just to name a few. The Product: Honda Civic Honda Civic was introduced in 1972, and is currently assembled in the East Liberty, Ohio automobile plant. Honda cars are generally perceived as reliable, economical and remarkably fuel-efficient. IntelliChoice® honored the Civic with two Best Overall Value awards. And Kelley Blue Book calls it a Top Value Retainer. Honda claims, “A Civic is efficient and reliable; it'll run for a generation, and when you're ready to part with it, you'll be amazed at the resale value. Quick, agile and responsive, one drive in the Coupe will make you say "Why anything else?" According to Honda America Motors,“With our pioneering stratified-charged CVCC engines of the 1970’s, Honda has led the way in Earth-friendlier vehicles. Today, every Honda meets or surpasses Low-Emission Vehicle rules.” The Union of Concerned Scientist agrees by saying, “Honda is the cleanest car company by a large margin.” The crash test data posted by the U.S. government’s National Highway Traffic Safety Administration reveals a galaxy of 5-star ratings for Honda cars and trucks. In fact, five of Honda models to date-Accord Coupe, Civic Coupe, CR-V, Odyssey and Pilot-have earned the highest NHTSA crash-test ratings in frontal and side impact testing. And the Civic Coupe is still the only compact car to achieve this distinction.” Honda Civic comes in the following varieties –Coupe, Sedan, Si and Hybrid, with their prices ranging from high $10,000 to low $20,000. Seasonality of Sales (averaged for the past five years)
According to the research gathered by hondanews.com, sales of Honda Civic fluctuates slightly across seasons, with the highest sales in 2003 falling in the month of July and August. Distribution In the United States, the Civic is assembled in North America by American Honda Motor Co. It is distributed to consumers through a network of independently owned Honda dealerships across the country. Consumer In the past, Honda’s primary target has been men age 25-34. AHMC management wants to reevaluate and finetune their target strategy. The management thinks that with a refined target and advertising/media strategy, they can get the lost share of the market back. The Market and Competition The competition in the subcompact car market has intensified over the years. The subcompact car market is characterized by downward pressure on prices, upward pressure on marketing spending, increase in near-new (off-lease) vehicles, cost reduction efforts refocused on distribution channels. Honda Civic is faced with competition from automakers of both domestic and import cars. Honda Civic should compete for buyers who are also considering Ford Focus, Toyota Corolla, Nissan Sentra, Chevy Cavalier, Pontian Sunfire, Mazda Protégé, Hyundai Elantra, Volkswagen Golf, Mitshubishi Lancer, to name a few. Not long ago, the Honda Motor Company (HMC) appeared unbeatable with its long standing fleet of vehicles. However, as of late that is not the case. In April of 2004, the once overlooked Nissan, according to Businessweek, surpassed Honda as Japan’s second largest automobile manufacturer. For the past three or so years Honda passenger car sales have slumped in the U.S. largely due to the declining popularity of the Honda Civic. More and more of Honda’s consumers are opting for pickups, midsize SUV’s, wagon style crossover cars and other vehicles that are inundating the market, says the Los Angeles Times. Furthermore, Honda rivals like Nissan are launching new passenger vehicles in order to capture some of Honda’s customers who don’t want necessarily anything that Honda or Toyota offers. According to the Los Angeles Times, Honda is facing the likelihood of a third or fourth straight year with a decrease in sales and for that matter, Honda has increased its U.S. sale promotion budget, which includes more cash incentives. Although consumer rebates are prohibited, Honda offers dealers $400 for each civic they sell. They also offer low interest rates and lease terms. Honda has increased its advertising budget by 20 to 40% per year in the past couple of years. Promotions The Honda Civic Tour is the best-known promotion linked to the Civic brand. It is an annual concert tour, which was first introduced in to promote the Honda Civic, while also promoting emerging artists in the rock music scene. This promotion is designed to appeal to the younger, contemporary consumers, Honda targets with its Civic.. Other promotions Honda has used in the past include sponsoring such events as the Honda Classic, Honda Campus All-Star Championship, and the City of Los Angeles Marathon. In recent years, Honda has relied more on sales promotion offering price breaks through its local dealerships,. In the past couple of years, Honda spent approximately $60 million annually for its Civic line. Realizing the need and importance of strong advertising presence, HMA wants to increase its budget to $80 for the upcoming year. Marketing Plans and Objectives The major goals of the AHMC marketing plan for Civic is to To position Honda Civic as the best in the category To maintain the current consumers and expand the target to include those targeted previously To increase the share of the compact car market by two percent by the end of the campaign year To boost Honda Civic US sales by the end of the campaign year. Other marketing key elements may be summarized as: every marketing communications effort consistent with brand identity advertising effort front loaded to build sales momentum brand communications on air all year to build the brand nationally (making visible Corolla benefits) resources concentrated in top markets use of innovative promotions and direct marketing programs Consumer Information and Advertising StrategyThe AHMC management believes that the advertising campaign should be directed not only at the current customers of theirs but at other prospective buyers. (For further information on consumer demography, refer to MRI data – it will be on reserve as soon as the recent data become available) Also, observe their advertising campaign to learn about the creative strategy and requirements. Special PromotionBesides those discussed earlier, you are required to discuss consumer promotion ideas and strategies that you need to incorporate with your media efforts. Advertising Budget & Campaign Period The advertising media appropriation for Honda Civic is $80million for the one-year period, beginning January 1, 2007. These funds are solely for consumer advertising media expenditures. Other expenses that AHMC will incur in the campaign include such things as production and talent expenses, but these are not charged to the media budget. The cost of promotion itself (e.g., incentives and rebates) is NOT part of your budget, but any media used to carry the promotional offers are to be budgeted. [NOTE: Your media plan is exclusively for Civic; all of your objectives, and the $80 million budget, are for this one brand only; the only consideration of other Honda brands is that you do not take away market share from them. Also, Civic should avoid direct competition with other Honda brands Trade advertising and other promotion strategies can be suggested, but you are not to budget for trade promotion and advertising, or the like. (i.e., $80 million is solely for consumer media, both traditional and non-traditional media). General Direction and Plan InstructionsOne of your first tasks in developing this media plan for Honda Civic will be to do secondary library research for further information on the industry/competition, the company, the product, and the consumer (do Internet, Lexus/Nexus library search in the library). You also should carefully assess the retail situation and dig out any helpful information by visiting dealerships that carry Honda Civic as well as those that carry the competitors’ cars. In the development of your media plan, you probably will want to refer to “Media Plan Checklist” (GS 28) for general instruction. Refer also to GS 26 & 27 for writing media objectives and planning media strategy. Your assignment includes not only making decisions but also gathering and analyzing any additional, relevant data (about the industry, competition, the consumer, etc.). Also, unlike in the intro media class, you are required to make tactical decisions, run the computer analysis and show flowchart summarizing the cost and scheduling of ads. This report is being made to the AHMC marketing and advertising directors and the brand manager of Accent. As such, it must be professionally presented. Be careful about detail and, where applicable, indicate the sources of information. Where important facts are not available to you from secondary research, you may make assumptions as long as they are realistic (by making an assumption you are letting the reader know that a particular piece of information is important, even though you don't have the precise facts!). Make sure you include a Table of Contents and Executive Summary, followed by Introduction/Overview. The report must be presented in a logical and organized manner; it must be typed (double-space, 12 points type, ....except EXECUTIVE SUMMARY can be single-spaced); use tables, charts, and graphs where useful for effective communication. An exact "length" for the plan cannot be specified, but a typical media plan (of this sort) likely would be 30- 40 pages, double-space, including text, tables, figures, and computer output. Please turn in two hard copies of your plan as well as a computer diskette containing your plan file. GOOD LUCK!!! Download 33.26 Kb. Share with your friends:
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