Honda Accord vs. Toyota Camry
Product Paper
MKTG 3832
Fall 2013
Prepared by:
Samantha Watkins
Alexandra Zelmat
Students
Table of Contents
Product Description
Target Market
Other Competitors
Product Pricing
Product Placement and Personal Selling
Product Life Cycle Stage
Promotion
Types of promotion
Social Media
Sponsorship and Philanthropy
Publicity
SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
Conclusion
Works Cited
Figure 1: 2014 Toyota Camry (izmocars, 2014_toyota_camry_angularfront.jpg)
Figure 2: 2014 Honda Accord (izmocars, 2014_honda_accord_sdn_angularfront.jpg)
Honda Accord vs. Toyota Camry
Product Description
The automotive industry is highly competitive, with multiple, well-known brands competing for limited market share. New automobiles are sold almost exclusively through licensed dealers with both manufacturer support and restrictions. Fractional gains in market share are big business, particularly in the mid-size sedan class that contains both the Honda Accord and the Toyota Camry.
The sedan class is defined as cars with a three-box section: one section containing the engine, one section containing the passenger compartment, and one section containing the trunk. (Browne 3) These mid-size sedans, the Accord and Camry, are targeted at middle-income families. There is generally room for four to five passengers, and the price-point is kept to a reasonable and affordable amount.
Target Market
The target market for both the Accord and the Camry is the middle-income consumer with a small family. The Accord and Camry both have two seats in front and room for up to three passengers in the rear seat. Neither car is designed for sport driving, but both are offered in 4-cylinder and 6-cylinder models. Both are also available as hybrid, gas-electric versions.
When looking at both cars, one notices that styling is very similar. There are touches of sporty styling that would appeal to the younger consumer, but the cars keep this to a minimum in order to look sensible and reliable. This target consumer market wants to hold onto that youthful image, but in a practical way that meets the needs of their growing family.
Other Competitors
As noted above, this is a highly competitive industry with strong competition in each class of automobile and some cross-competing between classes. In the mid-size sedan market, we can divide the direct competitors of these two vehicles into the foreign and domestic brands. The foreign brand competitors for mid-size sedan are the Hyundai Sonata, the Mazda MX6, the Nissan Altima, the Volkswagen Passat, the Kia Optima, and the Subaru Legacy. In domestic brands, the competitors are the Ford Fusion, the Chevy Malibu, the Chrysler 200, and the Dodge Avenger.
There is some competition with other classes of cars, such as the larger and smaller size sedans, mini-vans, small SUV’s and luxury mid-size sedans, but since the price point is often the primary factor in narrowing car searches when researching a purchase and these other classes are significantly different in price, these competitors will be ignored for the purposes of this analysis. Additionally, there is a fairly large difference in price between the traditional gas engine models and the hybrid or full-electric versions of these sedans. For the purposes of this assignment, we will focus on the similarities and differences in the marketing strategies for the traditional gas models and the overall model marketing.
Product Pricing
The Accord and Camry have very similar pricing strategies. The base pricing for the 2013 Honda Accord starts at around $21,000 and the base pricing for the 2013 Toyota Camry starts at around $22,000. The gas mileage for the Accord is 26 mpg in the city and 35 mpg on the highway, with a combined mpg of 29. The Camry gas mileage is only slightly lower, with 25 mpg in the city, 35 mpg on the highway and 28 mpg combined. (US EPA) The EPA estimates that the cost of gas for a year for the Accord and the Camry will be over $2,000 less than the average vehicle, which suggests that fuel economy is likely to be a big factor for the cost-conscious buyer. (US EPA)
Given the target market of middle-income families, we can expect Toyota and Honda to continue to keep the price range for these two vehicles tightly controlled in order to continue to appeal to this target market. Even with added features and top-of-the-line models, the Honda Accord tops out at around $33,000 and the Toyota Camry at $30,000 for the traditional gas models. (US EPA)
Product Placement and Personal Selling
Similar to nearly all car brands, both Toyota and Honda allow new cars to be sold at a selective distribution of dealers in each geographical region. Several dealers in one market can be direct competitors with each other for the same brands. Additionally, a single dealer owner can have multiple dealership brands under one company. A dealer could own both a Honda dealership and a Toyota dealership and may be in direct competition with themselves. Some dealers market this a competitive advantage, however. They advertise to consumers that they have a wider selection due to the multiple brands in a single location or in close proximity that allow the buyer to comparison shop.
The model for new car selling relies mostly on personal selling once the buyer gets to the dealership. So car dealers use relationship development and consumer education as primary tools in closing the sale. As we will discuss later, the marketing strategies of the auto dealer and the brand focus on branding, selling points and features, but rarely do consumers come to the dealership prepared to make an immediate purchase. The dealer sales person is vital to completing the transaction. That being said, more and more consumers are doing extensive research prior to purchase and some are even completing the transaction completely through online portals, which may radically alter the car-buying market in the United States.
Product Life Cycle Stage
Both the Camry and the Accord have been on the market for many years. They cycle between the maturity phase and some growth phase as they introduce remodeled versions of the cars and new enhancements. The Toyota Camry was first introduced in the United States in 1983 and quickly gained in popularity. By 1997, it was the number 1 selling car in the US and has remained in that position for nearly every year since. (Toyota, Camry) The Honda Accord follows in a close second in sales. The Honda Accord was introduced in 1976 and showed strong sales in the first decades, despite being a foreign brand. (Honda, Accord Heritage)
Many redesigns over the ensuing decades have kept both the Accord and Camry in line with consumer expectations for styling, safety and performance. Additionally, both cars have incorporated new technologies including computer systems, navigation, and other high-tech enhancements. Both models are also offered in hybrid gas-electric models as well. Toyota and Honda both recognized the consumer demand and that costs to create these models had dropped enough to put this technology into the Camry and Accord platforms. The Accord hybrid was introduced in 2005. (Honda, Accord Heritage) The Toyota Camry was made available in a hybrid model in 2007. (Toyota, Camry)
Promotion
Since the purchase of a new car is a major investment, consumers need considerable amounts of information in order to make these purchase decisions. Both Honda and Toyota cover a wide range of promotional efforts in many styles, formats and with varying focuses in order to maximize target market reach. The marketing strategies of both companies is quite similar.
Major branding is done by the manufacturers in television, radio, internet and social media. In smaller amounts, some outdoor advertising and co-branding sponsorships. Local dealers utilize television, radio, newspapers and some direct marketing such as mail, flyers, coupons and contesting. In addition, both manufacturers offer co-operative advertising reimbursement. Co-op advertising is where the manufacturer reimburses the local dealer for some part of the advertising expense when the dealer advertising conforms to co-op guidelines. This usually involves mentioning the brand, incentives and taglines. This allows the dealers to leverage their advertising budgets to greater effect and allows the manufacturer to gain more local-market focused branding.
As an example, Honda offers dealers a 50% reimbursement of expenses, and requires that ads contain the mention of ‘Honda’ a specified number of times, meet minimum pricing guidelines, and stick to approved formats and media. Dealers are then required to submit documentation both before and after the media is placed to prove they have met the guidelines. (American Honda Motor Co., Inc) Toyota’s program would have similar guidelines and requirements.
Types of promotion
Television advertisements for both the Accord and the Camry focus on the styling and versatility of the vehicles. Commercials are done in hip styles with modern and upbeat designs in keeping with the focus on the young consumer. A recent commercial for the 2013 Honda Accord called ‘We Know You’ focused on the idea that the Accord is an integral part of the buyer’s daily life and that Honda is a consumer-focused brand. (We Know You)The 2014 Toyota Camry commercial ‘Remote’ starts off with mentioning the best-selling status of the Camry and then how others compare themselves to the Camry. The personality in the commercial mentions owners who have had multiple Camry’s, which indicates both reliability and loyalty for return purchases. It ends by insinuating that you already know the best choice to make and it’s the Camry. (Remote) Television commercials are about the same length as radio commercials, but include visual information that radio commercials cannot provide, allowing television advertising to focus more on details, product specifics and positioning against competitors.
Radio advertising for both models can be broken down into the two major focuses of purpose. One is for branding. Since both products have been on the market for lengthy time periods and the radio medium does not give as much information to the consumer, the primary focus of the branding radio commercials is most likely to keep the brand top-of-mind. The second purpose is to drive consumers to the point-of-purchase location: the dealership. Since car purchases are high-involvement, and high-risk, the personal selling of the dealership sales staff can greatly influence the information gathering stage as well as the conversion to sale through relationship-building and management.
Both Honda and Toyota use some types of outdoor and direct marketing campaigns. Most of this is likely to be done by local dealership marketing staff as these all involve larger amounts of cost for more limited return. However, these methods can be personalized and marketed to more focused market segments to pull in the local consumer.
Social Media
By far the biggest change in marketing for both Honda and Toyota in the last decade has been the transition to social media marketing. Both companies have Facebook and Twitter accounts. Honda’s Facebook account ( has over 3 million likes. The page is well-designed and appeals to the young and socially-connected consumer. There are stories from Honda owners and pictures of concept cars. Honda’s Twitter account (@Honda) has links to incentives and contests as well as Honda social and philanthropic initiatives. The Facebook and Twitter accounts for Honda seem to be focused on consumer engagement and product awareness. Additionally, Honda’s current tagline: “Start Something Special” (Rechtin)is prominently featured as a hash-tag: #StartSomething. The use of multiple hashtags points to Honda’s desire to engage the consumer watcher to participate in the conversation.
Toyota’s new tagline is “Let’s Go Places”. (Advertising Age) This is prominently featured on the Toyota Facebook page ( The Facebook page is bright and engaging and features links to commercials, incentives such as Black Friday deals, and the cars in everyday-locations. Toyota’s page has more than 1.7 million ‘likes’ and significant comments on articles. What is missing when compared to Honda’s Facebook site are the stories from consumers. Toyota’s Twitter account (@Toyota) features the same articles and links as the Facebook page. Toyota has a similar use of hashtags, but the lack of differentiation between the Facebook content and Twitter content suggests that Toyota does not see these two sites as targeting different market segments.
Sponsorship and Philanthropy
Lastly, both brands use sponsorship and philanthropy to round out their promotional mix. Honda sponsors the Honda Classic PGA Tour event, the Anaheim Ducks hockey team, and the Rose Parade. (American Honda Motor Co., Inc.) Honda also has several philanthropic foundations, including the American Honda Foundation which provides grants to community and youth organizations. (American Honda Motor Co., Inc.) Toyota has similar initiatives, such as the Toyota USA Foundation that works to fund programs for K-12 education. (Toyota) Toyota also sponsor sporting events, including soccer and track & field. (Toyota Global)
Publicity
All car brands rely on publicity to enhance their selling and marketing points. A variety of consumer guides, websites, reviewers and product testers are available. Of course, two of those are the EPA, that regulates and tests gas mileage and standards (US Environmental Protection Agency), and the Federal Trade Commission, which enforces consumer protection laws, as well as fair and truthful advertising standards. (Federal Trade Commission)
One of the most well-known consumer rating sources is the Consumer Reports guide which is published regularly and is considered a reliable source of product testing and grading. Cars are rated for safety and reliability, fuel economy and pricing. (Consumer Reports) There are a number of other ratings available from consumer groups, for profit companies, bloggers, television shows and individual consumers. A wide variety of comparison videos can also be found on social media sites like YouTube. Since these types of publicity are not managed by either Honda or Toyota, the consumers place more trust in them as unbiased resources of information gathering. What may not be apparent is that both Toyota and Honda often provide free cars to these prominent ratings agencies, television review shows and prominent social media reviewers for review purposes. That is likely to create some bias on the part of the reviewer.
SWOT Analysis
The SWOT analysis looks at the strengths, weaknesses, opportunities and threats that face a company or product. Both the Honda Accord and the Toyota Camry have very similar characteristics in terms of market positioning, product features, market segmentation and pricing. This makes the analysis nearly identical for both.
Strengths
The Accord and Camry both have strong records of consistent sales, market share and market domination in their class. Both are from well-known brands with a reputation for well-made cars with consistent features and reliability. Redesigns, innovations and adaptations like the hybrid model happen regularly and help reinvigorate consumer interest and sales. Honda released a redesign of the Accord in 2013 that it hopes will turn around some small decline in market share since 2009. (Reuters) However, the Accord still remains a top-seller for Honda in this class of mid-sized sedans.
Both companies recognize the importance of these models in their product line and consistently advertise for branding, to inform new consumers entering the target market and to keep hold of their existing market share. Camry has been the best-selling car in the U.S. for more than 10 consecutive years. (Toyota USA Newsroom)
Weaknesses
The Camry and the Accord are both ‘foreign’ car models, despite the fact that both are manufactured in the United States. Toyota manufacturers the Camry in Georgetown, Kentucky. (Toyota USA Newsroom) Honda has a number of manufacturing facilities in the U.S. and has several webpages dedicated to showing the job growth and economic impact of their manufacturing in the U.S. (Honda in America) However, both companies have to use significant advertising spending to inform consumers of these facts. The made in America label can be an important decision factor for American consumers. Honda and Toyota have used this advertising a positioning to try to overcome the image and stigma of being a foreign car-maker.