Retooling its Cool: Honda looking to marketing to help it attract and keep buyers
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Retooling its Cool: Honda looking to marketing to help it attract and keep buyers
Retooling its Cool: Honda looking to marketing to help it attract and keep buyers
JEAN HALLIDAY | Advertising Age
Posted Date: 4/8/05
A Honda owner who unveiled a souped-up Civic at a tuner event last year got a distinctive reception. The crowd booed.
The Civic is the signature model of American Honda Motor Co. Inc. It was once the most popular car among tuners. But not just the youngest buyers are turning away from the automaker.
>>> A study by J.D. Power and Associates measured owner satisfaction last year with new vehicles' design, content and performance. Honda finished 21st among automakers, down from 15th in 2003.
>>> Loyalty - measured by the percentage of Honda owners who stick with the brand when they buy new vehicles - fell to 55.2 percent last year. The loyalty rate was 57.1 percent in 2003, another Power study found.
>>> The brand ranked below the industry average last year and in 2003 for owner satisfaction with the new-vehicle purchase experience at its dealerships.
>>> The median age of Honda owners rose to 45 in 2004 from 43 a year earlier, according to the Strategic Vision auto consulting firm in Tustin, Calif.
Tough rivals
Once known for engineering excellence, Honda faces strong competition from Nissan North America Inc. and Mazda North American Operations.
"Honda has to fight on more fronts than before," says Doug Scott, a vice president of the NOP World Automotive consulting firm in Southfield, Mich.
Critics assail what they call Honda's overly conservative styling and marketing. The automaker has "definitely lost its mojo," says Todd Turner, president of the CarConcepts consulting firm in Thousand Oaks, Calif.
John Mendel, Honda's new senior vice president of operations, identifies his priority as "making Honda cool again."
Mendel joined Honda last year from Mazda. He oversees product planning, advertising, marketing, distribution and public relations for both Honda Division and the Acura Division.
Some Honda executives insist the company is not struggling. They note the brand recorded its ninth straight year of higher annual U.S. sales in 2004. But only an aggressive sales event in December allowed Honda Division to eke out a 1.4 percent gain in annual sales, to 1.19 million vehicles. Honda Division's U.S. sales in the first two months of 2005 were 10.6 percent lower than in the year-ago period.
Honda's progress will depend heavily on whether it can attract and keep young buyers. It struck out with its boxy Element SUV, which it introduced in 2002 and aimed at men under 25, analysts say.
"The demographic for the Element didn't hit what it was supposed to," says Ron Theis, a Honda dealer in Corvallis, Ore. "For us, it's more popular with 40-to-60-year-olds."
Tuners shun the current-generation Civic because its suspension makes it harder for them to customize the car. Mendel concedes Honda "lost that kind of emotional click" with the car. But he vows to recapture it with the next-generation Civic that is coming this fall.
Tuners, Mendel adds, should be "quite pleased" with the two-door Civic Si. He says the Si "promises to be the fastest, most powerful and fun-to-drive" version of the Civic since the Si model debuted in 1986. Civic buyers now are in their late 30s or early 40s, says Art Spinella, president of CNW Marketing/Research Inc. in Bandon, Ore. Years ago the buyers tended to be in their late 20s or early 30s, Spinella says, but Honda products have gotten "really expensive."
Cranking it up
In February, Honda increased prices by an average of $150 for its 2005 models except the Element, Civic LX SE coupe and Insight hybrid coupe. The automaker cited higher operating costs, rising steel prices and currency exchange rate factors.
Honda has been reluctant to offer discounts on its vehicles. In January, Honda's average incentive was $551 per vehicle, compared with the industry average of $2,412, according to the automotive Web site Edmunds.com.
Observers of the company say Mendel needs to cut loose with Honda's marketing.
"We have always probably been a little too humble," says Eric Conn, Honda's assistant vice president of auto advertising. "We're not really screamers. We need to crank it up a little."
Analyst Turner says Honda's decades of success created complacency. He adds: "Honda feels that it doesn't need to sell itself."
JEAN HALLIDAY | Advertising Age
Posted Date: 4/8/05
A Honda owner who unveiled a souped-up Civic at a tuner event last year got a distinctive reception. The crowd booed.
The Civic is the signature model of American Honda Motor Co. Inc. It was once the most popular car among tuners. But not just the youngest buyers are turning away from the automaker.
>>> A study by J.D. Power and Associates measured owner satisfaction last year with new vehicles' design, content and performance. Honda finished 21st among automakers, down from 15th in 2003.
>>> Loyalty - measured by the percentage of Honda owners who stick with the brand when they buy new vehicles - fell to 55.2 percent last year. The loyalty rate was 57.1 percent in 2003, another Power study found.
>>> The brand ranked below the industry average last year and in 2003 for owner satisfaction with the new-vehicle purchase experience at its dealerships.
>>> The median age of Honda owners rose to 45 in 2004 from 43 a year earlier, according to the Strategic Vision auto consulting firm in Tustin, Calif.
Tough rivals
Once known for engineering excellence, Honda faces strong competition from Nissan North America Inc. and Mazda North American Operations.
"Honda has to fight on more fronts than before," says Doug Scott, a vice president of the NOP World Automotive consulting firm in Southfield, Mich.
Critics assail what they call Honda's overly conservative styling and marketing. The automaker has "definitely lost its mojo," says Todd Turner, president of the CarConcepts consulting firm in Thousand Oaks, Calif.
John Mendel, Honda's new senior vice president of operations, identifies his priority as "making Honda cool again."
Mendel joined Honda last year from Mazda. He oversees product planning, advertising, marketing, distribution and public relations for both Honda Division and the Acura Division.
Some Honda executives insist the company is not struggling. They note the brand recorded its ninth straight year of higher annual U.S. sales in 2004. But only an aggressive sales event in December allowed Honda Division to eke out a 1.4 percent gain in annual sales, to 1.19 million vehicles. Honda Division's U.S. sales in the first two months of 2005 were 10.6 percent lower than in the year-ago period.
Honda's progress will depend heavily on whether it can attract and keep young buyers. It struck out with its boxy Element SUV, which it introduced in 2002 and aimed at men under 25, analysts say.
"The demographic for the Element didn't hit what it was supposed to," says Ron Theis, a Honda dealer in Corvallis, Ore. "For us, it's more popular with 40-to-60-year-olds."
Tuners shun the current-generation Civic because its suspension makes it harder for them to customize the car. Mendel concedes Honda "lost that kind of emotional click" with the car. But he vows to recapture it with the next-generation Civic that is coming this fall.
Tuners, Mendel adds, should be "quite pleased" with the two-door Civic Si. He says the Si "promises to be the fastest, most powerful and fun-to-drive" version of the Civic since the Si model debuted in 1986. Civic buyers now are in their late 30s or early 40s, says Art Spinella, president of CNW Marketing/Research Inc. in Bandon, Ore. Years ago the buyers tended to be in their late 20s or early 30s, Spinella says, but Honda products have gotten "really expensive."
Cranking it up
In February, Honda increased prices by an average of $150 for its 2005 models except the Element, Civic LX SE coupe and Insight hybrid coupe. The automaker cited higher operating costs, rising steel prices and currency exchange rate factors.
Honda has been reluctant to offer discounts on its vehicles. In January, Honda's average incentive was $551 per vehicle, compared with the industry average of $2,412, according to the automotive Web site Edmunds.com.
Observers of the company say Mendel needs to cut loose with Honda's marketing.
"We have always probably been a little too humble," says Eric Conn, Honda's assistant vice president of auto advertising. "We're not really screamers. We need to crank it up a little."
Analyst Turner says Honda's decades of success created complacency. He adds: "Honda feels that it doesn't need to sell itself."
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Back in the day, Honda has nice styling and the sportiest ride of the "economy" cars. Now Nissan is upping hp, which doesn't impress me, personally, but does impress a lot of hp-freaks. Mazda has fantastic handling and has added styling panache, while Honda has become more bland, bloated, and conservative. I think I'll always be partial to a couple of companies, like MB and Honda, but both have hit some slumps. Nothing they can't work themselves out of, but both have serious issues they need to address. The Accord hasn't looked good since like '94, and I know the whole brouhaha with the suspension in the latest Civic (which I think looks quite attractive) killed it for the tuner crowd (although I thought Honda was tired of being associated with that crowd anyway).
Anyway, it seems like in terms of nice blends of price, reliability, and handling (not necessarily tops in anything, but winners in overall packages), Mazda and Infiniti are churning out winner after winner. I don't like the new look of the MX-5 (Miata), but I wouldn't mind having a garage consisting of the M45, current Miata, and a Mazda3 hatch (even though it's FWD).
Just noticed that last part where it says, "Honda doesn't feel it needs to sell itself." Maybe that's a good image to attempt to project, but it's never a good idea to actually implement. If they aren't selling themselves with ostentatious ads, they'd better be doing something else active to try to promote their brand in the public's eyes.
Anyway, it seems like in terms of nice blends of price, reliability, and handling (not necessarily tops in anything, but winners in overall packages), Mazda and Infiniti are churning out winner after winner. I don't like the new look of the MX-5 (Miata), but I wouldn't mind having a garage consisting of the M45, current Miata, and a Mazda3 hatch (even though it's FWD).
Just noticed that last part where it says, "Honda doesn't feel it needs to sell itself." Maybe that's a good image to attempt to project, but it's never a good idea to actually implement. If they aren't selling themselves with ostentatious ads, they'd better be doing something else active to try to promote their brand in the public's eyes.
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Once known for engineering excellence, Honda faces strong competition from Nissan North America Inc. and Mazda North American Operations.
Interestingly, Acura is going like gangbusters. They finally seem to have put together a portfolio of nice-looking, nice-performing, nicely-equipped cars that undercut THEIR competition by thousands.
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It could very well be that the popularity of Hondas as peaked. I think the current gen Accord looks good (compared to the '98-'02 model). The Civic sedan looks sharp, but the coupe's front end looks so boring. The Element has too much plastic on it, which is a turn off (isn't that why 4Runners all come w/ body-colored fender flares now??). The CRV is doing well, 'cause it's a very good little SUV w/ a surprising peppy engine. The Pilot is big and popular. The S2000 is a nice car but too expensive to bring in volume sales. Odyssey has all the bells and whistles that moms need. IMO, they've lost their "sporting" image. That's the image I used to get when I hear "Honda". I think killing the Prelude was a big loss, but the car's price was going higher & higher, w/ modest amenities and performance. I'd have the RSX badged w/ an "H", if they're not going to ressurect the Prelude. HFP packages should have decent looking rims and be available in more boyd colors. Color combos are not that plentiful w/ Honda, which is a huge decision factor for lots of people, especially the "younger crowd".
I'm sure Honda will bounce back somehow.
I'm sure Honda will bounce back somehow.
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