Case Study 5.4 Hondajets: Honda enters the small-sized business jet market

Honda Motor Co. is a Japanese multinational corpo- are used in a variety of products requiring such ration primarily known as a manufacturer of cars and engines (motorcycles, jet skis, lawn mowers, etc.). motorcycles. At the same time, it is world famous Now Honda has also pioneered new technology in for its core competency in small engines, which its HondaJet, manufactured by its subsidiary Honda

Chapter 5 Global marketing research 201

Aircraft Company, which allows increased aerody-namics and fuel efficiency thus reducing operating costs. The Honda Aircraft was formed as a separate entity in August 2006 under the leadership of pres-ident and CEO Michimasa Fujino. The corporate headquarters are located at the Piedmont Triad International Airport in Greensboro, North Carolina, where the prototype HondaJet was also developed and flight tested. The company received more than 100 orders for the seven-seater jet in three days when it began taking orders in 2006, promising a quieter engine, 20 per cent better fuel economy over competing models and operational costs of two-thirds or less. The jet is powered by a pair of fuel-ef-ficient turbofan jet engines, which were developed under a joint venture between Honda and General Electric. The 13-meter-long Hondalet is priced at around US$S million. The only problem for Honda Aircraft Company was to get final approval to sell and fly the aircraft officially. In April 2015 Honda got US approval to go ahead with the final tests of its HondaJet, before generating real revenues. The people behind the HondaJet are optimistic and hope to gain one-third of the market for these small-sized business jets (up to ten seats). That was equal to around 100 HondaJets per year In 2019 Honda Aircraft Company planned to deliver around 80 aircrafts to the key markets in the United States, Europe and Asia.

The Hondalet Source: Yuya Shino/REUTERS.

Questions

1. Which demand factors will influence future sales of business jets in general?

2. How could Honda Aircraft Company estimate the future total market for these small-sized business jets (total number of small business jets sold per year)?

3. Which screening criteria would you recommend Honda Aircraft Company to use in order to find the most attractive markets (countries) for their small business jets in the International Market Selection (IMS) process?

4. What kind of market research (primary and/or secondary) would you recommend Honda Aircraft Company to do, in order to use this input for its decision about IMS?