Summary
Recent annulment of the Honda Accord hybrid is one of the greatest marketing failures to have ever occurred in the automobile industry for the last five years. Honda stopped selling its Accord hybrid arguing that the car had not been doing well in the market relative to hybrid cars manufactured by Toyota.
The Accord hybrid was the company’s most powerful and efficient hybrid car. Numerous factors contributed to the failure. The engineers failed to consider customers’ needs when developing the vehicle. Besides, the company operated on assumptions, which made it hard to market the car. This made it hard for Honda to compete with Toyota in the industry.
Honda’s marketing mistake
One of the greatest marketing mistakes that Honda committed when selling Honda Accord hybrid is failure to come up with a strong marketing mix. Customer analysis is critical in helping a company to come up with products that suit all customers’ needs.
A company may come up with a ‘good’ product, but fail to attract customers due to the product not meeting one or some of the customers’ needs (Goldberg, 2003). The same case happened to Honda Company. The company manufactured Honda Accord hybrid based on assumptions. It did not take time to conduct market analysis to determine what its target customers preferred. Eventually, the company came up with a hybrid car that focused on fuel and power efficiency and ignored other critical aspects like environmental conservation.
Additionally, the company assumed that since the hybrid car recorded high showroom traffic, it could market itself. Hence, it did little to market the car. Being a new product, Honda required carrying out promotional campaign to make customers aware of the car and its advantages. This would have helped the company to increase its sales volume and customer share.
Customers can hardly purchase a product if they do not know about its benefits (Zou & Cavusgil, 2002). Honda made the mistake of not coming up with promotional campaign to help customers distinguish its car from those sold by Toyota, Ford, General Motors and other automobile companies. Hence, customers continued purchasing Toyota’s hybrid cars since they could not understand the benefits of purchasing Accord hybrid.
Possible changes
Product
To attract customers, Honda ought to make numerous changes on the car as well as on its marketing strategy. One of the factors that made Accord hybrid fail to attract many customers is failure to consider environmental conservation when manufacturing it. Hence, rather than coming up with an energy efficient car, the company needs to develop a car that is environmental conscious. Majority of consumers now prefers driving environmentally friendly cars.
Therefore, the company ought to modify the Accord hybrid to be more environmental conscious. Toyota Prius has been doing well in the market for a long time. One of the factors that make this brand excel is that it is environmentally friendly. Many customers prefer buying Toyota Prius because it makes them feel to participate in conserving the environment. This indicates that customers prefer associating with brands that are environmental conscious.
Besides developing an environmentally friendly hybrid car, Honda requires positioning its product uniquely. The company ought to come up with a unique design for the car as well as a unique name. The uniqueness would attract many customers. Presently, Honda Accord hybrid is not unique, and many customers do not distinguish it from others cars in the market.
Developing a unique car and using a unique name for the hybrid car would lead to many customers purchasing the car (Goldberg, 2003). Many customers prefer trying new and unique products. The products make them appear exceptional and sophisticated. Therefore, using a unique name and design would help Honda to increase the sales volume of its hybrid car.
Marketing strategy
Apart from making changes on the product, Honda also needs to make changes on its marketing strategy. One of the factors that made the Honda Accord hybrid fail to attract many customers is lack of market research. The company ought to conduct a market analysis to identify customers’ needs.
Had the company conducted a market analysis, it would have made sure that it factored in environmental issues when manufacturing the hybrid car. Additionally, market analysis would help the company to identify the potential markets; therefore, target those particular markets (Zou & Cavusgil, 2002).
Another initiative that the company ought to take to enhance performance of Honda Accord hybrid in the market is coming up with strong public relations and promotional campaign. Public relations campaigns help to create a positive brand image in the mind of potential customers (Zou & Cavusgil, 2002). Failure to carry out public relations and promotional campaigns made it hard for customers to distinguish Accord hybrid from other brands.
Thus, for Honda to boost its sales volume, it needs to carry out promotional and advertising campaigns. This will go a long way towards assisting customers to distinguish Accord hybrid from Toyota Prius and other hybrid cars. Therefore, rather than assuming that the high showroom traffic that Accord hybrid records will translate into sales, Honda needs to come up with an aggressive advertising and promotional campaign.
References
Goldberg, P. (2003). Product differentiation and oligopoly in international markets: the case of the U.S. automobile industry. Pinelopi Koujianou Goldberg Econometrica, 63(4), 891-951.
Zou, S. & Cavusgil, T. (2002). The GMS: a broad conceptualization of global marketing strategy and its effect on firm performance. Journal of Marketing, 66(4), 40-56.