Company Analysis Essay on Honda: Issues That Affect the Consumer Behavior Towards the Honda Accord Models

2021-06-17 08:08:29
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Wesleyan University
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Report
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Honda is a Japanese public multinational company that manufactures automobiles, aircraft and motorcycles. The Honda Accord model has been dominating the market since 1976. This report seeks to establish different issues that affect the consumer behavior towards the Honda Accord models produced by Honda. The company creates new generation Honda Accord models that are environmentally friendly because they have low emissions compared to other competing companies. The Honda Accord brand has been able to sell over 10.9 million units since the inception of the brand in 1976. The organization continues to enjoy significant market control and success, but the onset of competition is a significant challenge for the organization. The organization has experienced good consumer response over the years and continue to make reasonable profits and entry to new markets especially in Africa. Honda was founded by Takeo Fujisawa and Soichiro Honda in 1946, and it is headquartered in Tokyo Japan (Lacetera & Sydnor, 2012).

Situation Analysis: Company PESTLE and SWOT analysis

Honda has continued to enjoy significance market dominance and continues to expand to new markets due to its Honda Accord models. The company, Honda Accord models, have smooth and quiet engines which show superior engineering quality and standards. In addition to the prowess of the organization Honda Accord products also have superior comfort and convenient in terms of fuel consumption which has over the years been the reason behind its growing market and consumer numbers. However, the product consumers have complained about the poor product acceleration compared to other Honda products in the market (Sheldon et al. 2017).

Pestle Analysis

A PESTLE analysis seeks to develop an analysis of the environment in which an organization operates. PESTLE analysis establishes the political, economic, social, legal and environmental factors that affect the operations of an organization and the consumer behavior (Steenkamp, 2017).

Political factors

There is growing pressure from governments and political bodies on automobile organizations such as Honda to reduce the number of their production due to the need to minimize automobile negative effect on the environment. Honda is bound to reduce the number of production as established by the legislature and also invest in products and research to create emission free products. This political pressure affects the organization ability to meet the growing consumer demand for Honda products especially in Africa and Asia. The growing research costs are reflected in the prices of the company products which has had a negative effect on the organization product demand due to the rising product prices. Political pressure in American market due to the Obama led legislation to reduce the importation of vehicles that emit gasses that are detrimental to the environmental advances aimed at reducing global warming. Word governments and lobbyists are phasing out automobiles and motorcycles that use gas and emphasizing on automobiles that use green energy. This has negative implications on Honda since it has to invest more on research to create better environmental friendly vehicles. The organization has been able to invest in the production of hybrid cars which are in high demand in Chinese and European markets (Jindal et al. 2016).

Economic factors

The economic environment has the significant effect on the consumer behavior. The economic environment affects the pricing of Honda products and also credit availability for the consumers to purchase Honda Accord. Different economic factors have different effects on the demand for Honda products, and the strategy that Honda will establish will significantly affect the overall consumer behavior. The growing oil prices have significantly reduced the demand for Honda automobiles and motorcycles as consumers increasing demand for hybrid automobile technology. Honda will be required to increase its production of hybrid vehicles which are more eco-friendly in the current economic environment. It is important for Honda to invest in research to create Honda Accord models that are less costly as the prices of Hybrid vehicles continue to increase as well as the demand (Lacetera & Sydnor, 2012).

Social factors

Social and demographic factors continue to change, and Honda needs to adopt to consumer characteristics in European, Asian and African markets. The growing demand of Honda Accord models on a global scale requires the organization to create vehicle systems that can be personalized and customized in accordance to the consumer social background. Social factors also affect the image of an organization which can affect the organization sales and products demand by the consumers. The ability of Honda to invest in the community in healthcare research and other social institutions will significantly have a positive impact on the organization products future demand (Toda, 2016).

Technological factors

Technology is a basic factor that can affect the consumer behavior of automobile consumers. Consumers are significant technology oriented in different markets as they demand and purchase latest car navigation technology as well as hybrid technology vehicles. Honda needs to invest more to improve the safety and comfort of their vehicles with new technological systems to shift the consumer demand and behavior to their favor. Honda new vehicle and motorcycle models are installed with satellite navigation system which has helped increase demand for their products as well as competitive advantage in the market. Consumer behavior has also shifted to safety as consumers seek sophisticated technological systems to improve safety and stability of the vehicles. Honda has developed iv-tech technology which has significantly reduced environmental pollution and has also improved the vehicle torque and fuel economy in the new models.

Environmental factors

Environmental factors are a significant consideration in the design and creation of future Honda Accord models. Honda has invested significantly in new engine technology as well as the creation of hybrid Honda Accord models to ease the growing debate on climate change and global warming. Previous Honda Accord models did not incorporate new the new iv-tech engines which led to a negative consumer response especially with the growing demand for environmentally friendly engine technology. It is important for Honda to place significant emphasis on developing a hybrid Honda Accord to meet the growing demand for more environmentally friendly models (Sheldon et al. 2017).

Legal factors

Legal policies have been instigated by political pressure on the legislature to create policies that curb the growing global warming. Government new legislations on taxes has the significant effect on Honda Accord prices which affects consumer demand due to the increase in prices of these units. Honda has to strategize on avenues of reducing the production cost of Honda Accord to make sure they reach the market with fair prices.

Target Market Description

Understanding the market and the market characteristics are key to understanding the consumer behavior and the market that an organization can strategically target for a certain product. Mid-sized sedan market is the primary target market for the new Honda Accord models. To recapture the American market share which is the largest and the most competitive the Honda Accord 2013 model has been redesigned with a new generation engine and transmission which are aimed at improving the efficiency of the car will be a significant consumer demand drive in the United States mid-sized sedan market. However, the growing competition from Volkswagen, Kia and Hyundai sedan designs has made it difficult for Honda to recapture the American market (Rodriguez de Rivera Cremades, 2017).

Target market decision making

Decision making regarding the target market to sell products is very important and also influences the characteristics of the final product. Honda has studied the American market closely to identify the characteristics of competing for sedan cars to improve Honda Accord to meet the prevailing market needs.

Decision-Making Process: 1. Need Recognition

Consumer behavior significantly depends on the need of the consumers which are determined by the prevailing economic, political and social factors. The target market was chosen due to the growing demand of sedan model automobile in the United States compared to the other European and Asian markets. Honda Accord is advertised as a family wagon which is in great demand in the American market because it has a big carrying capacity and engine power (Adnan et al. 2016).

Decision-Making Process: 2. Information Search

Social media is a significance source of information for many consumers; media advertisements have also been able to penetrate the market. Most Americans are using social media to communicate and share new information which makes it a prime source of information regarding the best performing sedans in the market. Social media, therefore, can damage or sell the image of organization products. Most of the consumers can find compelling information on products through social media which will affect their purchase decisions and choice.

Decision-Making Process: 3. Evaluation of Alternatives

The evaluation of alternatives is important in consumer decision making. There are many competing vehicle models that Honda Accord has to outdo before a consumer decision settles on this vehicle. The alternatives are made regarding the technology used to create the vehicle engine, the price and also the efficiency of the vehicle. The main competing alternative against Honda Accord includes; Hyundai Sonata GLS and Toyota Camry sedans. There is the need for Honda to improve the fuel efficiency and price compatibility to increase the demand for Honda Accord models (KUMAR & GURU, 2016).

Decision-Making Process: 4. Purchase Decision

The decision to purchase a Honda Accord model is largely based on the superior engine performance of the car as well as its fuel efficiency. The American market also has attributed the model purchase decision on the comfort and reliability of the model compared to other competing models in the market.

Decision-Making Process: 5. Post-Purchase Evaluation

Post purchase evaluation is a significant contributor to the positive consumer response and behavior that Honda Accord enjoys in the American market despite the competing alternatives to the model. Honda Accord financing deals and incentives are significance source of the model competitive advantage. The sales people follows up on the client after two weeks to ensure the vehicle is functioning well as to seek information from the consumers. The model price also comes in inclusion a protection package of 979 dollars (Adnan et al. 2016).

Social Influences on Honda Accord consumer behavior

Social influences are significant in consumer decision making; social factors are the prevailing conditions and events where the consumers live in and have the ability to affect the consumer preferences (Blawatt, 2016).

Reference group

A reference group refers to the individuals who a consumer would like to be associated with. Most consumers want to be identified in groups which have significant effect on the consumer decision making. Most of the consumers in the American market want to be associated with the popular culture as well as celebrities.

Roles and status

The individual role and status in the community also affect the consumers of Honda Accord models. Most of the families in America are inclined to like the Honda Accord sedan because it is spacious for a big family and also provides desired comfort. There is high demand in middle-cla...

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