Honda Marketing Plan

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Honda made its foray into Malaysia in the 1960s, appointing Kah Motors Sdn Bhd as its distributor. In 15 November 2000, Honda Motor Co. Ltd. of Japan partnered DRB-HICOM Berhad and Oriental Holdings Berhad to form Honda Malaysia Sdn Bhd. with a commitment to offer the “Highest Customer Satisfaction in Malaysia”. Honda Malaysia is growing rapidly whereby in 2003, the company set up a manufacturing plant in Pegoh, Malaka. Spread over 80 acres of land, the Pegoh Plant has a total built-up area of 13 acres and rolled out its first car, a CRV, in January 2003.
Honda Malaysia rides strongly on its slogan “The Power of Dreams”, expresses Honda’s ambition to realise and inspire extraordinary dreams through its innovations that enhance human mobility and benefits to the society. In addition, it is also to inspire Honda to move forward in the cars manufactures industries. Address : Head Office (Malacca Manufacturing Plant) : Honda Malaysia Sdn Bhd, HICOM Industrial Park Pegoh, : P. O. Box 70, 78000 Alor Gajah, Melaka. Malaysia : Sales and Marketing Office : Honda Malaysia Sdn Bhd, Lot 15, Jalan 13/6, : 46200 Petaling Jaya,Selangor Darul Ehsan
Telephone Website : 1800 88 2020 : www. honda. com. my Facsimile : 03 7954 8341 MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 3 Group 03 Season Long Project Honda Malaysia Sdn. Bhd. 2. COMPANY’S MISSION STATEMENTS “Maintaining a global viewpoint, we are dedicated to supplying products of the highest quality, yet at a reasonable price for worldwide customer satisfaction” Honda has a global mission for quality like every other car maker in the world. But Honda differentiates itself with principles of fresh ideas, youthfulness, harmony, and joy.
Based on our research and opinion Honda viewpoint is dedicated to supply their products of the highest quality at a reasonable price for Malaysian customer satisfaction. This statement can be supported based on our research whereby if the customer already bought a Honda product, there is no way for them to change to others especially local product, unless they go other segmentation of cars. The Honda Malaysia mission statement is officially referred to as the company principle, and it seemingly is no different to others company that manufactures and sells cars in the world. . PRODUCTS AND SERVICES Honda type of vehicles is extremely huge, however, the markets is divided in every country. There is a product released in certain countries, for example Honda NSX and Honda Life which is only in Japanese market. In addition, Honda also provide other services which is same as any other car manufacturing companies such as; car servicing and spare-part sales. Model Accord Type Sedan Description Designed to inspire consumers for greater heights. Its wide body, sleek lines and elegant interior reflects the well-rooted character.
With stylish additions to its already commanding presence, any consumer will feel more confident behind this luxury sedan. City Sedan Dynamic form the inside out, the all-new City is a class-leading performance, comfort, space and practically. The City is fuelled by the technology and performance with innovative technology. The City goes beyond the conventional wisdom of compact sedans with well thought out features. MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 4 Group 03 Season Long Project Honda Malaysia Sdn. Bhd.
Civic Civic Hybrid Sedan Sedan The best-selling model in the Honda line-up has received extensive makeover, now boasting an impressive array of innovations and safety features.. Comes in 2 types of model which gasoline and hybrid. CR-V SUV A special off road design philosophy made the CR-V what it is today – a combination of technical vision and creative enthusiasm. CR-Z Insight Hatchback Hatchback Sleek, sporty, aerodynamic and environmentally friendly car. The new Honda Insight Hybrid offers refined styling and functional elements both on the exterior and interior. Its improved 1. -litre i-VTEC+IMA Hybrid System delivers even better fuel economy and lower carbon emissions while offers an even safer ride with a host of exciting new features. Freed MPV The Honda Freed is about great innovations to accomplish about anything you want. This artistic curvy exterior can be used for aerodynamically on the open road and to carry more things around. Jazz Hatchback The new Honda Jazz accommodates all your needs in a truly advanced personal car. Boasting an optimum balance between a sporty exterior and a spacious cabin. Comes in 2 types of model which gasoline and hybrid.
Jazz Hybrid Hatchback Stream MPV Stream is a sporty vehicle that eliminates the stereotype of a family car, yet retains its versatility that’s suitable for any occasion. 7-seater capability, advanced drivability, low-slung styling, space and many safety features. Table 01: List of latest Honda cars in Malaysia for the year 2012. MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 5 Group 03 Season Long Project Honda Malaysia Sdn. Bhd. 4. LIST OF COMPETITORS Rivalry among the competitors is very strong is this industry.
The major competitors are so closely balanced that it increases the rivalry. The market segment and the position are almost same with Honda. The price, quality, durability, and many other aspects of different manufacturers are greatly taken into consideration when deciding what type of vehicle to purchase. Some of the biggest Honda Malaysia competitors are shown in table below. Manufacture Description Malaysian first automobile manufacturer having the entire segment in automobile market. Malaysia’s second largest automobile manufacturer after Proton and their main market segment in compact car.
Japan car manufacture and a Honda major competitor in the world market and they having the same market segment with Honda. Korean car manufacture had one of the biggest plans in the world at Busan. They also have the same market segment with Honda. One of famous continental car in Malaysia and the brand come from France. They market segment is Sedan, SUV, MPV, Spots and etc. or in others they have the same market segment with Honda. Table 02: List of Honda competitors Honda get 7% market share for overall sales in Malaysia last year (2011) and the number of sales keep increasing every year.
The position in market is in Sedan model where 60% of sales come from this type of car. Honda is the most innovative producer where every year it creating a new model to satisfy a consumer demands. Most of the young executive in Malaysia prefers Honda as their daily driving car. It’s because of their design are suitable with this young generation. MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 6 Group 03 Season Long Project Honda Malaysia Sdn. Bhd. 5. POSITITON IN MARKET The automobile industry has undergone many and rapid changes in the past two decades.
Notably, consumer preferences and environmental concerns shape the way the industry is doing. Four major Honda car models; City, Civic, Accord and CR-V, representing 94% of revenue in 2010, assembled at Malacca plant in Malaysia. The stylish, sporty and urban Civic premiums SUV, CR-V, are market leaders in their respective segments (non-national car segment) while the City remains a major contributor to overall sales by 45%. 2010 marked the beginning of the recovery from the recession of the automobile industry worldwide.
With the automobile industry in Malaysia recorded the highest amount of total industry pass 600,000 marks (605,156 units), Honda Malaysia recorded the highest sales volume at 44,486 units, representing a 15% growth year-on-year. This position Number Four brand in the country in terms of sales with a market share of 7. 4% and the number two with a market share of 18. 5% in the non-national car segment. 5. 1. COMPETITIVE ADVANTAGES a. Honda has complete set of broad range of automobile model that could serve and cater wide range of target market from young single carefree executive to family and high managerial post.
This gives advantage to Honda to serve wider market niche against in competitors especially against Proton, Perodua and Peugeot. b. Honda has known to be having efficient fuel consumption that gives their cars an added value against Proton and Peugeot. c. Honda is the first automobile company that announced/launched the hybrid car that run on both electric and fuel. This shows that Honda always on the move together with cutting edge technology. MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 7 Group 03 Season Long Project Honda Malaysia Sdn. Bhd.
THE MARKETING MIX: PRODUCT AND BRAND STRATERGIES 6. PRIMARY ATTRIBUTES There are two primary attributes to show where is the positioning of Honda compare to its competitors Proton, Toyota, Peugeot, Perodua, Lexus, Audi, Mercedes, BMW, Subaru, Mitsubishi and Hyundai. The attributes are technology and durability. The position map is drawn about the Honda and its competitors. Advance technology High durability Low durability Low technology Figure 01: The attributes of Honda positioning with the competitors MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia Group 03 Season Long Project Honda Malaysia Sdn. Bhd. 7. PRIMARY TARGET MARKET Model City Segment A “Family” range product targeted for mid-income young couples with 1 to 2 children or young executives. Civic An “Executive” range product targeted for mid-high income couples with 1 to 2 children or young executives. Accord CR-Z A “Luxury” range of product targeted for high-income professionals. A “Luxury Sporty” range of product targeted for high-income single professionals or young executives. Table 03: Primary target market of Honda cars 8.
PRODUCT CATEGORIES (SEDAN) Model Accord Type Sedan Car Description Designed to inspire consumers for greater heights. Its wide body, sleek lines and elegant interior reflects the well-rooted character. With stylish additions to its already commanding presence, any consumer will feel more confident behind this luxury sedan. Target Market for Class A social grade, with buying power that appreciates cutting edge automobile technology Accord also provides spacious inner setting that provides comfort not only to the driver but also to the passengers. MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia Group 03 Season Long Project Honda Malaysia Sdn. Bhd. City Sedan Dynamic form the inside out, the all-new City is a class-leading performance, comfort, space and practically. The City is fuelled by the technology and performance with innovative technology. The City goes beyond the conventional wisdom of compact sedans with well thought out features. Usually preferred and well by young administrators managers as intermediate as young professionals. Civic Sedan/ Hybrid The best-selling model in the Honda line-up has received now extensive an makeover, boasting impressive array of innovations and safety features.
Civic also comes with Hybrid technology for those who appreciate the nature and excellent fuel preservation. Table 04: List of Honda focusing on sedan segmentation MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 10 Group 03 Season Long Project Honda Malaysia Sdn. Bhd. 9. PRODUCT MARKET GRID The Honda represents many different things to many different people, especially for those from the various facets of life. Product Variety/ Model Managers Executives Family Active Lifestyle, Young Drivers Eco Conscious Accord 1 3 3 3 3 Civic 3 1 3 1 1 LEGEND City 2 1 2 2 2
Table 05: Honda product market grid. 1. Most likely to buy 2 Most likely to be considered 10. STRATEGY OPPORTUNITIES Existing Product Existing Market New Product Attractive after sale services – Honda provide Provide and selling accessories to excellent no-question-ask after sale service to current client. The accessories include the customer that provide 5-years warranty the Spoiler, Chrome front grille, front with unlimited mileage with free labour charge and rear lower garnish, GPS, Provide safety driving course to their existing illuminated side steps and child seat customer for children safety starts with motorcycles
Low financing rate promotion to the potential Honda New Market buyers. The rate would be as low as 0. 88%. business and then with their expertise Stolen vehicle Recovery (SVR) system. It is a in engine combustion, they enter into tracking system and recovery service for Honda automobile business. cars 11. Table 06: Honda strategy opportunity for product and market MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 11 Group 03 Season Long Project Honda Malaysia Sdn. Bhd. 12. COMPETITIVE ADVANTAGES According to question 11 we should say YES.
As Proton and Produa are the biggest competitors to Honda by being No. 1 in the market, Honda product and marketing mix is a main focus for increasing the market share. Honda manager’s make different types of their product and improve it for example they change the interior design and safety in during the years. They have 4 types of Sedan now. In the other hand, product mix is helping Honda to increase sales. a. Innovative design – Honda usually has flaunted stylish curve and sleek interior design. Honda always known to have quality in the interior design material (for example window, steering, side window) b.
Fuel assumption – Most of Honda design has aerodynamic airflow design that reduces drag and hence improves in flue consumption and carbon emission. c. Cutting edge technology – Honda engine has always known to be among the most powerful engine made by Asian Cars. d. New technology (hybrid) – Honda began research into hybrid vehicles with a view to enhancing the fuel economy of gasoline engine automobiles to the highest degree possible. In December 2010, Honda launched the all-new Insight hybrid vehicle. Combining a newly developed 1. 3 L i-VTEC engine with IMA, the all-new Insight offered customers greatly enhanced real-world fuel economy.
In addition, the Ecological Drive Assist System (Eco Assist) helped customers realize the full benefits of Honda hybrid technology and further enhance full economy. MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 12 Group 03 Season Long Project Honda Malaysia Sdn. Bhd. THE MARKETING MIX: DISTRIBUTION (PLACES) STRATEGIES 13. HONDA DISTRIBUTION CHANNEL Marketing channels, or place in terms of the marketing mix, are the means by which interdependent organizations like Honda distribute their cars from their manufacturing plant to the consumers.
Honda primarily distributes through traditional automotive sales organization. Approximately 96% of Honda’s overseas sales are made through its local dealers. Sales of spare parts and after sales services are mainly provided through retail dealers. Lectures on service technology are provided for dealers regularly by Honda’s automobile sales operations. Figure 02: Honda distribution channel in Malaysia. (source: MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 13 Group 03 Season Long Project Honda Malaysia Sdn. Bhd. 14.
LOGISTIC The logistics of Honda is by truck, marine transportation and air transportation, different customer has different transportation. In addition, they separate the car into parts and transport them in bulk. Efforts made for improving transportation efficiency Year 1980 1997 Improvement of transportation Upsizing transportation vehicles Switching to transportation by ship for the delivery of automobiles to the Hokkaido and Tohoku regions 2000 Joint transportation with other companies (by ship and truck). Export of products from the ports nearest to the factories. 002 Further implementation of measures to reduce CO? emissions and the promotion of efforts to acquire ISO14001 certification Table 07: Honda history effort in improving transportation efficiency They do many things to improve their transportation efficiency. They reform the entire transportation system and combine different transportation method, and they reduce the energy loss through the optimization of transportation methods. In addition, they cooperate with transportation companies to reduce environmental impact. 14. 1. 3S CENTRE – SALES, SERVICES AND SPARE PARTS
Figure 07: Honda 3S – Sales, services and centre MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 14 Group 03 Season Long Project Honda Malaysia Sdn. Bhd. A full-fledged 3S Centre is a centre offering Sales, Services and Spare Parts under one roof. The 3S concept is an important component of Honda Malaysia’s policy of prioritising customer satisfaction while creating an enjoyable customer experience. Honda believes that when a purchase is made, a life-long relationship with the customer is forged.
Therefore, it is of utmost importance for Honda to nurture these relationships by providing consistent excellent services that are of the highest quality. It also reinforces Honda Malaysia’s goal to achieve Lifetime Ownership Loyalty among its customers. Optimization of transportation logistic LEGEND A. Production plant C A B B. Product control centre C. Direct transportation D. Transportation by ship E. Product control centre D E Dealer 14. 2. COMPONENT PARTS Honda retrieved most of its component part from its own subsidiary companies as tabulated in the table below; Company AIKITEC Ltd Asamagiken Co.
Subsidiary Ltd Atsumitec Co. , Affiliate Ltd Development, production and sales of automobile, motorcycle and general purpose machinery, change control systems, and engine mechanical parts. Category Co. Affiliate Activities Manufacture engine parts for automobile, parts of transmissions, parts for general purpose engines Molding and manufacturing of cast parts. MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 15 Group 03 Season Long Project Honda Malaysia Sdn. Bhd. Bestex Co. Ltd Kyoei Affiliate Design and manufacture ress dies, welding, grinding, planting, assemblies, cathodic painting, blow molding F. C. C. Co. Ltd Affiliate Manufacture of clutch systems and facings; molding and machining of plastics; manufacture of various specialized tools and dies. Goshi Giken Co. Subsidiary Ltd Manufacture mufflers, exhaust pipes, fuel tanks for motorcycle, under cover, sunroof for automobile, parts for power products. G-TEKT Corp. Affiliate Manufacturing and sales of auto body frame components, heavy gauge precision stamped parts, dies and welding equipment, etc. H-one CO. LTD Affiliate
Manufacture white body parts for automobile, design and manufacture press dies Honda Co. Ltd Elesys Subsidiary Manufacture automotive electronic safety systems Honda Foundry Subsidiary Co. Ltd Honda Lock Subsidiary Manufacture engine parts, classis components for automobile and motorcycle, aluminium alloy parts Manufacture sensors, mirror systems, door locks, entry systems, security systems for automobile. Mfg. Co. Ltd Table 08: List of Honda affiliate and subsidiary company. MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 6 Group 03 Season Long Project Honda Malaysia Sdn. Bhd. 15. PHYSICAL FACILITY Honda retailers are the physical store for represent the products. Physical store of Honda established around the world to have more face to face interactions with customers, and also Honda has many Physical stores in Malaysia. Location MALAYSIA Exterior Appearance Facilities • • • • • • • Usage of glass facade for Store Large place High tech interior design There is a great variety of car Using red logo Friendly staff Strong lighting and ventilation
Usage of outer store space to show portfolio Japan • • • • • • Large place High tech interior design Using red logo Friendly and patient staff Strong lighting and ventilation Usage of outer store space to show portfolio Usage of glass facade for Store North America • • • • • Large place High tech interior design Using blue logo Friendly and Patient staff There is a great variety of car Strong lighting and ventilation MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 17 Group 03 Season Long Project Honda Malaysia Sdn. Bhd. UK • • • • • • • • Having a motorbikes accessories store within the showroom Booking a test drive Usage of glass facade for Store Large place High tech interior design Using red logo Friendly and patient staff there is a great variety of car Strong lighting and ventilation Usage of outer store space to show portfolio Table 09: List of Honda physical facility – worldwide 16. COMPETITIVE ADVANTAGES – distribution channels Honda implemented the indirect marketing channel strategy to bring their product to the customer. Honda uses intermediate channel between the manufacturer and customers.
Same goes to Toyota, Hyundai, Peugeot, Perodua and Proton. However, on some ground, YES, Honda does have competitive advantage over its competitors: a. Fix sales deals – In Toyota, distribution strategy, their dealers have a free ground to make independent decision on the business strategy of Toyota including the pricing. In Honda there is no mark-up pricing by the authorized dealers. This gives advantage to Honda to monitor and control their business strategy accordingly. b. Independent local retailer as distributor – Honda does not have single distribution entity to market their products in Malaysia.
Honda usually authorized local independent retailers to distribute their products. All Honda authorized dealers and their outlets are well established in the immediate vicinity or area of the target market segments. These give advantage to Honda to focus more on selling the products of MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 18 Group 03 Season Long Project Honda Malaysia Sdn. Bhd. local demands. Whereas in Malaysia, Toyota distribute their vehicle through UMW Toyota Sdn. Bhd. UMW Toyota will further distribute Toyota product to the retailers.
Thus their product availability is limited to the type of cars available in the distributor’s area. c. Corporate authorization – Vehicles sells in their retailers have the advantage of direct corporate authorities’ inspections. This is to keep a check on the efficiency of the channel the company has the following authorities to exercise and keep the process in track with the organizational objective. Whereas for Toyota, the authorities’ inspection is based on the call of the distributors for the retailers. d. Wide coverage on retailers – Honda has wide retailers’ location, located across Malaysia.
There are 62 Honda sales retailers across Malaysia, against 32 for Perodua and only 21 sales branches for Peugeot. This increased the product accessibility towards reaching the customers. MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 19 Group 03 Season Long Project Honda Malaysia Sdn. Bhd. THE MARKETING MIX: PROMOTION STRATEGIES 17. PROMOTIONAL MIX An effective promotional mix is the critical part of virtually all marketing strategies. Designing an effective promotional involves a number of strategic decisions s target audience, objectives of company’s promotion effort, nature of the product, stages in the product lifecycle and amount of money available for promotion. So, the promotion mix is the organization’s combination of the following elements which help the company to achieve its marketing objectives. Sales Promotion e-Marketing Promotion Sponsorship & Event Marketing Public Relation & Publicity Advertisement Figure 08: Promotional mix use for Honda Malaysia. 17. 1. SALES PROMOTION Sales promotion is initiative undertaken by Honda Malaysia to promote an increase in sales, usage or trial of their product or service.
Some of the sales promotions will be done MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 20 Group 03 Season Long Project Honda Malaysia Sdn. Bhd. by physical elements, but usually they will digital promotion (ie: facebook and website) as their tools since it is covered wide markets. In HONDA major promotional tools are as follows: • • • • • • • Product warranties Point of purchase displays and demonstrations Adequacy of repair facility Customer service follow ups Service packages for customers Events related to customer prizes Free check-up campaigns on regular basis
The warranty is normally given for one year or on 20,000 kilometres drive, which comes earlier. This warranty is based on the parts replacement. The demonstrations are also given to the customer in order to aware about the product’s exclusive features. 17. 2. SPONSORSHIP AND EVENT MARKETING Honda Malaysia is involved with sponsorship and event marketing in their business method for communicating and marketing with the aim to increased the brand awareness and image, as well as increasing the their sales. 17. 2. 1. MALAYSIA SUPER GT
MALAYSIA SUPER GT is a world class motorsport event featuring high octane action and carnival atmosphere for a long lasting appeal. It also allows its Honda to have strong association and an emotional connection with the attendance at the track. Giving exposure and an unforgettable moment to their lives, creating firm brand recognition into their minds. SUPER GT provides a solid marketing platform for Honda via these activities: • • Pre, During, and Post Event Brand & Product Exposure Sales and Marketing Opportunities 21 MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia
Group 03 Season Long Project Honda Malaysia Sdn. Bhd. • • Customer and Business Relationship Management Collaboration Opportunities OWNER’S CLUB SPONSORSHIP 17. 2. 2. By sponsoring the owners club, Honda is able to have partners that will act as free marketers for Honda. What really makes up a consumer’s mind is not only simple but also free: a word-of-mouth recommendation from a trusted source, in this case the Honda Club Owners. As these owners overwhelmed by product choices tune out the ever-growing barrage of traditional marketing, word of mouth cuts through the noise quickly and effectively. 7. 2. 3. PRODUCT LAUNCHING Honda will always create crowd through their product launching create awareness on their products. Usually Honda will always receive booking through these events. Figure 08: Promotional mix use for Honda Malaysia MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 22 Group 03 Season Long Project Honda Malaysia Sdn. Bhd. 17. 2. 4. OWNER’S CLUB SPONSORSHIP By sponsoring the owners club, Honda is able to have partners that will act as free marketers for Honda.
What really makes up a consumer’s mind is not only simple but also free: a word-of-mouth recommendation from a trusted source, in this case the Honda Club Owners. As these owners overwhelmed by product choices tune out the ever-growing barrage of traditional marketing, word of mouth cuts through the noise quickly and effectively. 17. 3. ADVERTISMENT The marketing department of the distributors holds HONDA’S advertising. Every distributor is responsible for its own advertising program. Advertising plays a very significant role in the promotion of new product. It’s usually more attractive than the other promotional campaigns.
There are different forms of advertisements that a company performs according to the nature of the target market. The purpose of advertising is to introduce the customer by the new product and to give the information about the existing product. 17. 4. PUBLIC RELATION AND PUBLICITY At Honda Malaysia the PR department monitors the attitude of the organization’s public relations and distributes information to build good will. The PR departments spend time counselling top management to adopt positive programs and to eliminate questionable practices so that negative publicity does not arise in the first place.
The PR department established by the distributors receives complaints from the customers and then these complaints are transferred to the HAC head office so that suitable actions are taken by the company in order to resolve customer’s problems. Honda Malaysia is engaged in different programs to promote the sales through public relations. For public relations they participate in different types of programs to increase the interest of public and to introduce their now product via these promotional campaigns. MRC1313 Marketing Management Master of Business Administration University of Technology Malaysia 23
Group 03 Season Long Project Honda Malaysia Sdn. Bhd. 17. 5. eMARKETING Figure 08: Promotional mix use for Honda Malaysia Currently, Honda heavily relies on e-Marketing through its official websites. Various information can be found in the websites (Honda retail dealers, spare parts info, price, etc. ) In a recent study of the best automotive manufacturer websites, Honda scored the highest with 836 points out of a possible 1,000. JD Power and Associate’s study concluded that Honda’s website was well-suited to providing information to new vehicle buyers. The survey evaluated 34 manufacturer websites for speed, appearance, navigation,

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