Hondas Marketing Strategy Keeping Local Dealers in Business

Honda Corporation, like other car manufacturers, uses a manufacturing and dealership business model. In difficult economic times, the company’s sales can remain relatively stable across all dealerships, but many individual dealers are challenged to maintain inventory and overhead—thus challenging their ability to remain in business. This paper’s final section is intended to set forth the insights and lessons (learning) that I have gained as a result of the research and methodical application of the principles to the issues identified.From my experience, I have observed what can happen when a car manufacturer does not provide marketing resources and support to its dealerships. A local dealer has a very dependent relationship with its brand, and this goes beyond simply maintaining a sufficient inventory of new and used cars to meet local market demand. In times of economic uncertainty, the dealership can face solvency issues if it is not able to maintain a minimal level of sales. This requires effective marketing. even if consumers are spending less on vehicles, the marketing focus must shift to offer reasons why the vehicles (in this case, Honda) are excellent choices. Whether emphasizing fuel economy, safety, ease of maintenance, low cost, or quality, marketing must communicate that Honda is the solution to whatever problem the car-buying market is experiencing. The problems faced by local car dealers in these economic circumstances are straightforward: Low revenues also mean that marketing needs to be emphasized to increase sales volume—yet the cost-cutting usually begins with marketing as managers focus on operational efficiency and most consider marketing to be somewhat disposable (or at least less priority).

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