Marketing 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 ...

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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 ...

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redefining that market by putting up the nicest
people image and exploiting its comparative advantage via aggressive
advertising and pricing.

Pascale tends to disagree on many points of the BCG report. The report
suggests that there was a smooth entry into the U.S market which led to an
instant success. Pascale argues that Honda entered the American market at
the end of the motorcycle trade season showing their impotence to carry
out research in the new market. As they entered the market at the wrong
time sales were not as good as they should have been and any success was
not going to be instantaneous. Pascale also criticises the assumption
that Honda was superior to other competitors ...

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Added: 9/13/2005 02:10:42 AM
Category: Economics
Words: 1670
Pages: 7

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