Executive Summary
The Honda Fit, as a Japanese car, is very successful and has a huge market presence in Japan, but is lacking that market presence in the U.S. Since 25-34 year-olds are environmentally conscious and adventure-seekers we are marketing the Honda Fit as a fuel-efficient, fun to drive, compact car.
We conducted research on our target market of 25-34 year-old adults in the U.S. and how to make our product more prevalent in their everyday lives. Our primary research showed a large problem was lack of product awareness within our target market. We decided the solution to this problem would be to increase our share of voice in the U.S. advertising market. This increased share of voice would help increase brand awareness and address negative perceptions about the product, such as aesthetic imperfections.
America’s 25-34 year-olds are largely concentrated in urban areas such as New York, Los Angeles, and Chicago. We chose these large cities as spot markets with the bulk of our campaign being national.
Although our competitors have larger advertising budgets we pinpointed weaknesses in their marketing plans and used media they overlooked. We found that through guerilla marketing with video games we could reach a large segment of our target audience that traditional media might not reach. Our research showed a large portion of our target audience chooses to play video games over watching TV in their spare time. Our guerilla marketing tactics could reach these people.
To reach the bulk of our target audience we used traditional media including TV, internet, newspapers and magazines since these are very popular among our target market.
As an underdog in our share of voice our main goal of the campaign is to reach 75% of our target audience over the next year. Through our combination of TV, outdoor, internet, newspapers, magazines and guerilla marketing we are confident we will exceed our goal of 75% reach within our target market.
Situation Analysis
Team F(it) conducted research to learn and gather insights about 25-34-year-olds in America and the subcompact car market. We established the following objectives:
• To learn about our target audience, adults 25-34 year olds
• To understand how our target audience likes and dislikes about the product
• To increase product awareness
• To create a media plan that will effectively reach our target audience
• To learn how our competitors market their respective products
Fig.1 Age groups living in the United States
Primary Research
• Surveys
◦ Administered 52 surveys to achieve information regarding the Honda Fit image and perception, purchasing behavior, and lifestyle (attitudes, interests, habits, etc.)
• Interview of Honda Salespeople
◦ Interviewed multiple Honda salespeople in Honda dealerships to attain information about the sales, strengths and weaknesses, and consumer purchasing patterns
Secondary Research
• Demographic and Psychographic Data
◦ Researched secondary demographic and psychographic data from consumer research companies such as SRDS and credible websites such as USCensus.gov
• Media Data
◦ Received secondary media data, such as frequency, reach, cost, and viewership of various mediums from MRI+, Kantar Media, and Ad$pender.
• Internet Sources
◦ Obtained further information from credible websites (such as CIA Factbook, TVB.org, and Honda.com)
• Findings
◦ Our target market is American adults aged 25-34.
◦ They constitute approximately 40.5 million of the total population and make up 13.4% of the US population.
◦ Our client’s advertising budget is a fraction of that of its competitors.
Consumer Insights
Education
In our target market, there are a significant amount of undergraduates and other students in the process of earning a degree. According to the National Center for Educational Statistics:
‣ Total in age-group that graduated high school: 84.9%
‣ Total in age-group with university degrees: 34.9%
‣ Total in age-group with post graduate degrees: 5.7%
Culture
• Societal Consciousness
◦ “It’s not your father’s car,” - Automotive ad meant to target 25-34 year-olds that typically don’t want to shop where their parents shop to avoid looking too mature. The 25-34 age group also does not want to purchase from places crowded with teens, and look too young.
• Environmental Consciousness
◦ The 25-34 age group has a high awareness and concern for the environment. They are beginning to think of the environment for future generations and their children.
• Economical Consciousness
◦ The 25-34 age group is consuming youthful pursuits such as music, gaming, and the internet just like the younger generations, but they are more confident and gravitate towards higher quality, premium, understated and luxurious brands in an attempt to confirm their identity.
Usage, Purchase Behavior, & Perception
‣ 89% of American households own at least one car.
‣ Americans bought over 5.4 million new cars in 2009.
‣ Americans aged 25-34 are 68% more likely to go for a small, foreign-made car. (marketresearch.com)
‣ Young Americans view qualities such as fuel economy, safety, and performance as important factors when deciding which new compact car to purchase.
Marketing Objective
✔ Increase market share among Americans aged 25-34. We want the Honda Fit to be more visible to our target market.
✔ Increase sales figures among Americans aged 25-34.
✔ Increase brand awareness among Americans aged 25-34.
Industry Analysis
In the United States, 89% of households own cars. This indicates that the sales and usage of vehicles is extremely high. Accordingly, the market is extremely competitive. Several major corporations are competing for this large consumer base. Honda, Toyota, Ford, Mazda, Nissan, and Hyundai are the most popular subcompact car manufacturers.
Fig.2 Competitive Analysis Of Leading Brands
Competitive Analysis
Fig. 2 compares Honda with its competitors in the hatchback market. All brands market their respective products as being fuel-efficient and sporty.
The Honda Fit stands out from the competition by focusing on being a high quality product with a youthful attitude. The most expensive of all, Honda appeals to their customer’s emotions rather than relying on logic.
The Toyota Yaris stands out from the competition by marketing themselves as an extremely affordable, yet still unique and cool. They highlight their price, which is the lowest on the market.
The Ford Fiesta stands out from the competition in that it is also marketed towards families. For example, in commercials, the Fiesta uses the car’s large interior to comfortably seat children instead of friends. They do these commercials much, much more often than their competitors, using their enormous advertising budget to advertise their extensive line of models, which is the largest among all others.
Mazda stands out from the competition by highlighting their reputation as a company that produces cars that are fun to drive. This is evident with their tagline, “Zoom Zoom. Concentrated.”
SWOT Analysis
Fig.3 2010 Share of Voice
Media Plan Overview
The following media plan is a comprehensive plan covering many different mediums that reaches a significant portion of the American population.
Media Expenditure
As can be seen from Figure 3, Honda spent little on advertising in 2010. Ford, on the other hand, spent a massive amount on advertising, and has the largest SOV in nearly every category. Nissan expended their entire advertising budget on internet ads, gaining the largest SOV in that category. Hyundai also spent their entire budget on internet advertising, but their budget was only enough to give them a 2.8% SOV. Mazda spread their modestly-sized advertising budget over several types of media. Toyota spent less overall, but were also more selective when choosing which media to utilize.
Fig.4 2010 US Media Expenditure by Product
Geography
Objective & Strategy
• We are primarily looking to concentrate our advertising efforts through national media, as our target market is spread over the entire country.
• We are secondarily looking to concentrate our advertising efforts in the ten cities with the largest populations of our target market - New York, Los Angeles, Chicago, Dallas, Philadelphia, Atlanta, Houston, Washington D.C., Boston, and San Francisco. These cities alone comprise 13.1% of our total target market population.
Fig.5 Map of Spot Markets
Target Audience & Media Mix Objective
• Our target audience is American adults between the ages of 25-34.
• The goal is to increase awareness of the Honda Fit amongst this age group.
• The media mix that will be used is composed of TV, internet, magazines, newspapers, outdoor, and guerilla marketing.
Target Audience & Media Mix Strategies
Television
TV has the highest reach of any media with 90% of American adults. (Obtained from TVB) Because of this high reach and high cost for ad placement, a significant part of the budget will be allocated here. To target our specific audience, we will place ads in the following vehicles:
• American Idol
◦ American Idol is an immensely successful reality television singing competition that commands a viewership of over 20 million nightly.
• Dancing With the Stars
◦ Dancing with the Stars is also an incredibly successful reality television competition that averages just fewer than 20 million viewers per show.
•The Daily Show with Jon Stewart
◦ The Daily Show is an affordable way to reach a large amount of educated adults in our target audience. Viewership averages roughly 1.5 million, nightly.
Outdoor
Outdoor media is location-specific, and can be placed in areas that the target audience frequent in their daily lives. Outdoor vehicles are also easily visible and noticed, and attract attention better than most other vehicles. The outdoor ads will be placed in our spot market cities. These cities have the highest populations of our target market, and will be most effective for minimal cost.
Newspapers
Newspapers reach 39% of Americans. Because a large percentage of its readers fall into our target market, and it is one of a few national newspapers, we have chosen to advertise in USA Today.
Magazines
Magazines reach 29% of American adults, and are known for high pass-along readership rates. We have chosen two national magazines to advertise in. Since we are targeting adults in general, not one particular sex, we are going to advertise in two magazines that each command large readership numbers from their respective gender audience.
• Cosmopolitan
◦ The women's magazine that reaches the largest number of women our target audience.
• Maxim
◦ This magazine reaches the largest amount of men in our target audience.
Internet
Internet is the second highest medium for American adults after television, reaching 67.5% of American adults daily. Facebook is hugely popular among our target audience and very easy to use as an advertising tool since you can tell it exactly what demographics you are targeting and it will appear on the sidebar of their home screen once on the website.
Guerilla Marketing
Guerilla marketing will be a successful advertising medium for the Honda Fit because it is marketed as a fun, futuristic, cool car. We thought new, futuristic marketing techniques would work well. Guerilla marketing is also extremely effective because you can get maximum results from minimal resources.
We will pick two malls from each of the top five spot markets and have a Honda Fit on display with simulated driving in it. Through this idea, we are attempting to get our target audience to see the Honda Fit and give them the opportunity to go for a “test drive” without having to go to a dealership. With guerilla marketing, we plan to reach parts of our audience that may not have been looking to buy a car immediately.
Scheduling Objective
Scheduling: Pulsing
• Cycle 1: July, August, September
• Cycle 2: October, November, December
• Cycle 3: January, February, March
• Cycle 4: April, May, June
During the campaign, advertising will begin with a heavy spending quarter during cycle 1, which will mark the beginning of the second-largest advertising campaign in its product category. Advertising will be lighter during cycle 3, mainly due to television shows not being on air.
The following table summarizes the media mix and the costs.
Fig.6 Media Plan Table
Reach/Frequency & GRP Objective
Achieve 80% reach during the beginning of the campaign. Reach will range from 70-75% over the life of the campaign. The minimum effective frequency per cycle would be 3. The goal of the guerilla advertising would be to get approximately 5,000 of the target audience to participate.
Scheduling Strategy
Television
TV will be used in all four advertising cycles. TV will be increased in cycle 2 and 4 because Dancing with the Stars is scheduled to air during these months. The ads in cycle 1 will concentrate on building brand recognition, to increase the effectiveness of the ads during the rest of the campaign. Television is a vital part of achieving the goal of 75% reach.
Internet
Internet advertising will be used during all four cycles. Like TV, it will be a crucial part of reaching 75% of our target market, which is spread across the country. The entire budget for internet advertising will be used to purchase banner advertisements on the ubiquitous social networking website, Facebook. Over 80% of our target market has a Facebook account.
Outdoor
Outdoor advertising, like guerilla marketing, will only be used during the first cycle. It is a crucial part of the blitzkrieg-style month of July intended to increase brand recognition. The billboards used will only be placed in the ten cities with the largest target market populations.
Guerilla
Guerilla marketing will be used only in cycle 1, during the first month. Cycle 1 has the largest budget, and will reach the largest audience. Promoting the Fit in this way at a later date would decrease the effectiveness, as the audience will have seen ads for it already.
Newspaper
Newspapers will be used in two advertising cycles, the second and the fourth. These two opposing cycles were selected to extend the amount of time they would be viewed by the audience. They are in the opposite cycles as the magazine ads, and are intended to balance out the budget, keeping the minds of the audience on the product consistently.
Magazine
Magazines will be used in two advertising cycles, the first and the third. These two opposing cycles were selected to extend the amount of time they would be viewed by the audience. There will only be one advertisement per month, on the back of the magazine. This keeps costs down, but increases the effectiveness of the advertisement, where it will be viewed in waiting rooms, libraries, etc.
Fig.7 Media Plan Timeline
Budgeting
To achieve increased awareness among the target market and a larger share of voice, a large budget is required. Our aim is to position the Honda Fit as a well-known option in the subcompact car market. This goal is the reason why we have a budget as large as $25,000,000.
Fig.8 Media Plan Budget
Fig.9 Media Plan Flowchart
