Task 2

MARKET RESEARCH
Market research is the critical tool to derive the maximum advantage over the competitor from the same market. The main advantage of doing the market research is the it helps to find out the important information like market trend, market need, size of the market, future opportunities and competition. The research in the automobile industry is very vital and expensive since the auto mobile industry is changing rapidly in the case demands according to the trends in a worldwide demand. When we closely analysing the automobile industry the trends can be pointed out like the frequent merging, outsourcing, off shoring etc. The component design of the most of the countries in this field is now been outsourced to the countries which the labour and the row material cost is less. Another important trend we can observe in the auto mobile industry is that the popular auto makers are now expanding their business to the provide the financial service to their buyers. In the case of the south East Asia countries also this modern trends are dominated in the changing scenario of the market trends. In the field of the technology the Morden technology like hybrid and green technology, clean diesel, fuel cell technology etc are the areas the motor companies focusing and researching on. The skyrocketing price of the gas is the main challenge the companies facing in today business environment. Improved technology for the fuel efficiency and environmental care are the most effective business strategy for increasing the market share in the south East Asian courtiers. The market in the south east Asian countries becoming saturation rapidly. Even the used care business chains are establishing their business chains all over the globe due to the globalisation. Another major factor which has influenced the automotive industry is the E commerce. Being one of most important e marketing trends e commerce can play a vital role in the marketing and sales sector of auto mobile manufacturing industry. The internet is becoming the first option of the customers to get the information and making the purchasing decisions. For example the online site Autobtel helps to direct the customers to the dealer, but at the same time the site act like making bids on the financing and insurance business of the car manufactures to increase the level of competition in the market. Since the basic principle is that the lower price and the higher

quality will enhance the customer to buy the product, companies have to consider a lot of things in the market trough the market research. These include the adoption of the different cost effective techniques and methods which should be effective in compelling the customers to buy the new car in the market. (Alacrastore,2009)

MARKET RESEARCH METHODS

There are two main types of methods in the market research they are inductive and deductive method. These two methods are use full in different satiations, because one is the reciprocal of the other. The following is the detailed description of these two methods. DEDUCTIVE METHOD OF RESEARCH

In this method of research approach the reasoning is moving from more general to the particular and specific factors. This is the top to down approach in a manner. At first we will gather the theory about the topic under consideration first and then the formulation of the hypothesis is the next step. Thus we can narrow down the topic by the testing of the hypothesis weather it is true or false. By the effective data collection methods we collect data and observations to analyze the hypothesis. This may lead the researcher o final state in which we can confirm the result with the original theory. (Lancaster, 2005 ,p.46) INDUCTIVE RESEARCH METHOD

The inductive method is the opposite way of deductive method of progressing the research. The reasoning of this type of approach is moving from a more specific observation to broader idea or theories. So this approach can be also called the bottom up approach. The first step is we bring the specify theory we want to study on and measure it by identifying the regularities and patterns. Formulates the hypothesis that we can explore the specific information. Finally ends the research in much general theories or conclusions. (Social research methods, n.d) These two methods of research give feels and advantages when we are conducting the research. Choosing the right method according to the requirements is critical for the effective market research. For example the inductive method of approach wide ended and can be considered as exploratory type of research. but in the case of deductive approach the research is more narrow and involves the testing and conforming of the hypothesis. The combination of two approaches is more effective infact most of the social research is done through the combined approach. For the market analysis of the placing of new cars in the market the combination of the inductive and deductive method will be more beneficial.

QUANTITATIVE AND QUALITATIVE DATA ANALYSIS

An effective data collection process may deliver both numerical figure and literal information. For getting the right information required for the research we need to analyze the data with the right data analysis techniques. Normally the data logic, number and the changing static data can be considered as the quantitative data. In this more precise convergent reasoning is good rather the divergent reasoning. But the data deals with the words, emotions, feelings, experience, colour, interpretations etc and all things which cannot be quantified can be considered as the qualitative data. (Hague ,2009, p.59)

Some of the traditional quantitative data collection methods are survey, questionnaire etc through which the behaviour of a whole population can be derived from a smaller group. The process is called the sampling, but a sample should be selected in such a way that it should represent the whole population we want to research on. (Asia market research, 2000) By the effective utilization of these techniques the market research can be framed out in such a way that we can understand and measure the complexity of human behaviour (customer).

PRODUCT DEVELOPMENT: RESOURCES ALLOCATION

In the development of a new project the main goal at the primitive stage will be the effective resources allocation because this is an important factor determines the profit of the new project. For example the most efficient allocation of resources can be defined as the distribution of available resources in such a way that all resources are fully utilized and there are increasing return to the scale . For this the formulation of a Resource management category is important in an organisation. Since in the current business environment the resource is limited even though the human needs are unlimited, the effective utilization is good for the organization and the man kind as well. Well the main four factors in the production are the labour, land, capital and entrepreneur the resource required can also be classified into three they are, Human resources Land resources Investment resources

The most important factor in allocating this resource is that how resource management strategy is employed? the combination of the resource also shows the effectives of the resource allocation strategy of the company. Through this the organisation can get the maximum output and profit. The marginal productivity of the recourses should be keep in mind in order to get the maximum profit margin. For example if the marginal productivity of all the resources are effectively set and same then the output from the production will be high. The decision making regarding the resource allocation is the next critical factor should be under consideration. If the manager assigned to the task should carefully observe all the process and take decisions if the cost can be saved without losing the quality of the products. Thus the process can be making

more productive to the availability of the resources. The time management of the professionals also plays a vital role in the effective resource allocation to the project. (Latest business updates, n.d.)

PRODUCT LIFE CYCLE MANAGEMENT

Normally in the case of the new product development the product life cycle can be used for analysing the maturity stage of the product. For getting sustainable revenue from the product also to ensure the growth of the product in the market the life cycle model is a useful tool. More likely it also give the important information that which stage of the product will gave the maximum response and profit from the market. The whole life of a product can be classified into four stages they are

INTRODUCTION STAGE In the introduction stage of the product the values like sales, sales growth, profit, market share etc will be very small. In the case of the competition also their will be little or no competition. For all kind of product the primary aim or goal in the introduction stage is the capture of more market share to establish the product in the market. The substantial cost related to the market research and other introductory promotional activities can also be a factor to the reduced revenue

at the introductory stage. In the case of Honda the cost for the development of the new technologies to the product will also add up with this stage expenses. For the effective introduction the Honda car in the market the following factors should be under consideration. The pricing strategy of the product should be skimming or price penetration so that product can capture some market first. Since the competitors are less this can be effectively implemented. The R & D department should concentrate more on the basic technology which can develop the product quality level and features. The normal marketing campaigns of Honda can be utilized for this purpose and should be aimed at the early adaptors.
GROWTH STAGE This is the stage in which the public will get more awareness and information about the product. The benefits of the product is analysed by the customers and the company will get the sales growth in this stage. The demand to the product will increase if the product successfully completed the introduction stage. The profit and the sale volume of the product will increase with the market share of the product. The competition is the growth stage of the product will be comparatively less. But the price competition will increase the market expenditure

The product development should be effective so that the product quality and other additional qualities can be added to improve the benefits and demand in the market. If the demand of the product increases the price can be increased slowly, but the competition should be considered. More distribution channels should be added to meet the increased demand.

MATURITY STAGE This is the stage most of the company looking for. When the product reaches the maturity stage the markets of the product become stabilised. Even though the growth of the product slows in this ate the company can make more profit from this stage. The primary objective of the company at this stage is to maintain or defend the market and there by maximise the project. The pricing strategy can be more liberal due to the increased competition. So the price of the product can be reduce a little to defend the market against the competition. The expenditure company spends on the research and development can be minimised at this stage.

Product differentiation: Because of the increased competition the product should be differentiated form the main competitors. Since Honda is the strong brand the brand name can be utilized.

Pricing can be still reduced to defend the competition. More incentives should be offered to the distribution of the products.

DECLINE STAGE In the decline state of the product the profit and the sales of the product will starts decline. The market share of the company will also reduce. The main reason behind this may be market saturated or may be because the trend or the demands in the market change. The pricing strategy can be redesign to save the product. Task 3 BCG MATRIX Since each stage in the life cycle of the product represent different risk levels and return the organisation should maintain a balanced performance to coordinate all the operational activities. Especially in the case of new product introduction it takes some resources and effort to market it and create efficient distribution channels. For this entire purpose BCG matrix can be used as an effective analyzing tool to understand more about the current status of the company. In the case of Honda the automotive industry is in the star section. So the investment opportunity is open so that the new project can be promote new product in order to main the growth and market of the company. (Stone, 2001,p.56) By including the new feature according to the new demand the production of the product can be maintained. The market can be change, new market development. Reduce the market expenditure by increasing the loyalty.

The BCG matrix us created by the Boston Consulting Group in 1970 based on the product life cycle theory. The two main dimensions represent in the BCG matrix is the market share and market growth. The basis of the tool is that if market share and the growth of the product is high then the product will be in the star position of the graph.(decide guide, n.d.) Cash Cow: This indicates the high market share and the low market growth section of the BCG matrix. In this stage the investment should be low in order to increase the profit of the business. Since the company need not invest more in the product and can reduce the investment in the product promotion and development. Dogs: This the end stage of a product by which both the market growth and the market share are minimum. We can liquidate the business if the product could not develop. Stars: the most optimum position in the BCG matrix in which the market share and the market growth is high. The investment will be high in this case because the organisation may be the market leader. Since the product in its high growth rate the organization should main the market share and generate the cash from the market as well. Question Mark: This part is a high growth section but the market share of the product or the organization is low. So in effect the cash flow will be less but the demand of the product will be

increasing. By the help of the effective management strategies we can turn thus stage into the star section of the BCG matrix.

ANSOFF MATRIX STRATEGIC PLANNING

In 1957 the Harvard Business Review published the Ansoff matrix for the first time. Through the Ansoff matrix the organization can select their strategy and understand the requirement to launch their products in the simplest form. According to Macmillan the starategic choice of a company denotes the choice to the implementation. So the strategy formulation can be the core to the success and failure of product. (Macmillan, 2000). The Ansoff matrix helps the organisation in setting the strategy for developing the product in current and future business environment. (Bennett, 1994). This includes the four main strategies they are, market development, market penetration, product development and diversification.

MARKET PENETRATION The company implements this strategy when the market and the product are the existing one. in this case the competition in the market is very high the organization have to penetrate the market through their polices. The customers of the product will also be existing and can be implemented if the company want increase the sales volume without changing the market and the product. This can be done in three different ways. By developing the product, quality, features, attracting

more customers and non users, increase the service. But in the current case Honda is placing a new product in the existing market so this is not the right strategy to implement. PRODUCT DEVELOPMENT This is the right strategy to implement when the company is introducing a new product to the market. This helps to keep the brand name of the company as a product innovator. Strategy an be effective to utilize the capacity of the product. The company should focous on the factors like Evaluate the customer feedback of the previous products and decide the selling price according to the competition and feedback. Proper and accurate forecasting of the market and sales volume of the product. Evaluate the breakeven point of the project and also the profitability.

In the case of Honda the new car is the new product and the South East Asian market is the existing market. So the right strategy to implement is the product development strategy. MARKET DEVELOPMENT The market development strategy is implementing when the company is planning to expand the business to a new customer base normally a different geographical area. The product of the company will exist but they want to market the product to different market may be because the product market is saturated in the current market. In the case of many international companies they implement this strategy to expand their business the new international market (Christensen, 2005). Since in this case the project is new and the market is existing and this strategy cannot be implemented in this specific case. DIVERSIFICATION The diversification strategy is in the sense that if the company is diversifying the product. It can be the introductory state of a company or if a company moving out of its current product and market to a new market with a new product. The risk in the diversification strategy is high, even though this strategy can be effectively implemented to generate high income.

REFERENCE AND BIBLIOGRAPHY

Thomas ,R , 1993 , New product development: Managing and Forecasting for Strategic Success, Jhon Willy & sons. Hague ,P .2002 , Market research: a guide to planning, methodology & evaluation , British library cataloguing publications. Lancaster , G . 2005, Research methods in management: a concise introduction to Research, Book Aid International. Stone , P. 2001 , Make marketing work for you: boost your profits with proven marketing techniques , British library Publication. Mercer , D. 2002 , Marketing , Black Well Publications, United States of America. (Ansoff 171) Marker research World . n.d . Market research , ,[online] Available from URL: http://www.marketresearchworld.net/ (Retrieved on 21/10/10).

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Asian Market Research ,n.d. , auto mobile industry Asia , ,[online] Available from URL: http://www.asiamarketresearch.com/columns/market5.htm (Retrieved on 03/11/10).

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