Marketing of Honda motorcycles
Marketing of Honda motorcyclesMarketing of Honda motorcycles in the USA
The American Honda Motor Company was established as a subsidiary
by Honda in 1959. During the 1960's the type of motorcycles
brought by Americans underwent a major change. Motorcycle
registrations increased by over 800,000 in five years from 1960.
In the early 60's the major competitors were Haley - Davidson of
U.S.A, BSA, Triumph and Norton of the UK and Motto - Guzzi of
Italy. Harley-Davidson had the largest market share with sales in
1959 totalling a6.6 million dollars. Many of the motorcycles
produced were large and bulky and this led to the image of the
motorcycle rider as being one who wore a leather jacket and went
out to cause trouble.
The Boston Consulting Group ( BCG ) report was initiated by the
British government to study the decline in British motorcycle
companies around the world, especially in the USA where sales had
dropped from 49% in 1959 to 9% in 1973. The two key factors the
report identified was the market share loss and profitability
declines an the scale economy disadvantages in technology,
distribution, and manufacturing. The BCG report showed that
success of the Japanese manufacturers started with the growth of
their own domestic markets. The high production for domestic
demand led to Honda experiencing economies of scale as the cost
of producing motorbikes declined with the level of output. This
provided Honda to achieve a highly competitive cost position
which they used to penetrate into the US market. " The basic
philosophy of the Japanese manufacture is that high volumes per
model provide the potential for high productivity as a result of
using capital intensive and highly automated techniques. Their
marketing strategies are therefore directed towards developing
these high model volumes, hence the careful attention that we
have observed them giving to growth and market
share." (BCG p.59 ).
The report goes on to show how Honda built up engineering
competencies through the innovation of Mr Honda. The company also
moved away from other companies who relied upon distributors to
sell their bikes when the company set up its headquarters in the
west coast of America. The BCG found that the motorcycles
available before Honda entered the market were for limited group
of people such as the police, army etc. But Honda had a "policy
of selling, not primarily to confirmed motorcyclists but rather
to members of the general public who had never before given a
second thought to a motorcycle"( SP p.116 ). The small,
lightweight Honda Supercub sold at under 250 dollars compared to
the bigger American or British machines which were retailing at
around 1000 to 1500 dollars. In 1960 Honda's research team...
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