4.1    Core Product 5
  4.2    Actual Product 5
  4.3    Augmented Product 6
  5.1    Strengths 7
  5.2    Weaknesses 8


Figure 1 Three Levels of Product 4
Figure 2 Contribution of Honda to U.S. 7
Figure 3 Market Share 8

Table 1


Features of Honda Insight






The purpose of this report is to identify an industrial product and present its historical evolution from its inception till the current status of the product. The report will mainly contain information about Honda which has invested in the innovative new hybrid car. Moreover, the report will also cover the related trends of hybrid cars in business world. Through this report, the present day position of Honda’s leadership in the car manufacturing industry would be analyzed and the future predictions of hybrid cars’ success and development will be made.


2.0       BACKGROUND

As the world moved towards the 21st Century, the general public became more aware of the environmental risks and threat to the nature by the burning of hydrocarbons. The main reason for this was the educational awareness in the new generation about the effects of pollution on Earth. The other reason for this concern of environment was the clear signs of environmental disasters because of the careless burning of hydrocarbons in the industries, cars, homes and furnaces. These environmental disasters include the changes in climatic conditions in different parts of the world, the melting of ice caps and the increased rate of occurrences of natural disasters across the globe.

The idea of hybrid cars was to save the environment and do as little harm as possible. This was only possible through the use of electricity as fuel as it does not generate any pollution. However, the engines of the cars could not be completely switched to electricity, hence, the notion of hybrid cars came into existence which used electricity and gasoline both simultaneously as fuels. These cars give an extensive mileage and hence they create much less pollution than the traditional motor cars that used gasoline as the sole fuel for combustion.


In the 1970s, the theory of the environmentalist and a great scientist, Victor Wouk, about hybrid cars proved to be possible (Callery 6) and at the turn of 21st Century, the hybrid car idea was put to the everyday lives of the Americans. Had the government provided enough funding to this great scientist, the scholars only wonder what impact would it have had on the environment and how much cleaner the world would have been (Lavietes)? The main concern of the scientist was the growing problem of pollution and he developed a prototype of a hybrid car in 1974 (Callery 5), almost 40 years ago.


4.0       THE PRODUCT

The product is the hybrid car that gives an extended mileage on each gallon. Where the tradition gasoline fueled cars run 10 to 12 miles per gallon, these hybrid cars can give a mileage of up to 65 miles per gallon. According to, the test run of Honda Insight on the fast run, the experts recorded a mileage of around 40 miles per gallon (



Figure 1- Three Levels of Product (Kotler and Armstrong 206)


4.1       The Core Product

The core product is generally the benefit for which you are paying the price. It is not the physical product. It is the satisfaction and the need that it helps to fulfill. Without the core product, the overall product is not at all useful for the consumer. In the case of Honda Insight, the core product is the ease of travel and convenience with least impact on the environment. The consumers can travel with comfort and reach their destinations in much less time than by using cycle or by walk. Speed of the car is another core product which enables the consumers to travel quickly (Marketing Teacher).


4.2       Actual Product

The actual product consists of the physical design and tangible form of the product. Generally this includes the features, the brand name, quality, packaging and design (Kotler and Armstrong 206). However, the core product should be integrated with the actual product so that the consumer can derive the benefits from both. In the case of Honda Insight, the actual product is the use of hybrid fuels in combustion, the sleek design, brand name of Honda, quality check by the company and all the physical features of the car. However, the single greatest actual product for Honda Insight is the stretched mileage with the use of hybrid engine. Some of the actual features of the car that are listed on the official Honda website are presented in the following table:





1 Look Fast Aerodynamic Design
Futuristic Styling
Distinctive LED brake lights
2 Hybrid Inner Life Impressive audio system
Design of the seats for max space
Classy multi-informational display
3 Efficiency Einstein Boost fuel efficiency
Improved motor assist system
1.3 liter engine capacity

Table 1 – Features of Honda Insight (Source:


4.3       Augmented Product

According to Kotler, the augmented product is the set of additional services and warranty services that make the customers satisfied (Kotler and Armstrong 206). Honda is now providing a complete auto care solution to its customers in order to increase the sales and give its customers a peace of mind and satisfaction while purchasing a new car. According to the official Insight website by Honda, the Honda Care plan gives its customers 24-hour road side assistance, tire changing facility and towing service (American Honda Motor Co., Inc.). The car remains under warranty for a certain initial hundred miles. Under this period, if any problem is identified in the car by the driver, these problems will be fixed by Honda free of cost. Moreover, the first maintenance check and service visit for the new Honda Insight is free of cost. In the future, if any spare parts are needed by Insight owners, Honda promises to provide them genuine spare parts at the market rate. Also if the car is damaged in an accident, the repair shop at Honda will repair it for the customers charging the amount to the owner.


The company, which is developing the hybrid car Insight, is one of the best reputed car manufacturers in USA as well as the world. According to an article on Yahoo, the top ten lists of cars that mechanics hate includes four cars produced by Honda (Magliozzi and Magliozzi). The mechanics hate these cars because they rarely get broken and hence the owners have to seek a mechanic very infrequently.


5.1       Strengths

Honda has been a keen contributor to the American economy since the past 50 years. The company employs an approximate of 25, 000 American nationals across the country. Millions of people are employed by Honda indirectly, as the 600 suppliers of Honda employ these people. The brand image is very strong in the minds of competitors and the consumers also. Honda is every car now in many countries as it is found in many homes now.


Figure 2 – Contribution of Honda to U.S. (Center for Automotive Research iii)




5.2       Weaknesses

According to BusinessWeek online magazine, Honda is handicapped to North America as its 85% profits, which is the major chunk, is dependent upon the continent (BusinessWeek Online). If anything goes wrong with Honda in America, then the whole company will sink in a matter of days. Yet another dependency of Honda Corporation is on the two of its top sold sedans, Civic and Accord. The combined sales of these sedans make up the majority of sales for the company. Moreover, the company is not very successful in making a cut in luxurious car line. The perception of Honda brand is every home car and hence its image cannot match the image of Lexus or BMW. Even if the company does decide to enter the luxurious market, a major overhaul will be needed, as BusinessWeek suggests.



According to the Green Car Congress, the overall growth of hybrid cars in the United States is expected to be 3% in the year 2011. In 2006, the expected sales of hybrid cars were more than 200, 000 units. In 2011, the sale is expected to surpass 560, 000 units (Green Car Congress). Honda is gaining strength in the United States market for automobiles and its share in the hybrid market is expected to grow to 20%, whereas Toyota the major competitor is expected to hold a share of 40% in 2011. The market share standing of the three major competitors for hybrid cars in the United States is as follows:


Figure 3 – Market Share (

7.0       CONCLUSION

Honda is gaining new market share especially in the hybrid car market. According to many speculations and forecasts, one-fifth of the total hybrids sold in the next year will be Honda manufactured. The new model of Honda hybrid car, Insight is speculated to be sold the most as it has a high mileage and many experts have given A rating to the car.



















Works Cited and Consulted

American Honda Motor Co., Inc. Honda Care for new Vehicles. 2010. 4 October 2010 <;.

BusinessWeek Online. Handicapping Honda. 5 July 1999. 4 October 2010 <;.

Callery, S. Victor Wouk: The Father of the Hybrid Car. New York: Crabtree Publishing Company, 2009.

Center for Automotive Research. “CONTRIBUTION OF HONDA TO THE ECONOMIES OF SEVEN STATES AND THE UNITED STATES.” January 2009. 4 October 2010 <;.

Green Car Congress. J.D. Power: Hybrids to Top Out at 3% Share. 3 February 2005. 4 October 2010 <;. Mileage Loop: 2010 Honda Insight. 30 April 2009. 4 October 2010 <;.

Kotler, P. and G. Armstrong. Principles of Marketing. 12th Edition. Delhi: Dorling Kindersley (India) Pvt. Ltd., 2008.

Lavietes, S. Victor Wouk, 86, Dies; Built Early Hybrid Ca. 12 June 2005. 4 October 2010 <;.

Magliozzi, R. and T. Magliozzi. 10 Cars Mechanics Hate. 2010. 4 October 2010 <;.

Marketing Teacher. Three Levels of a Product. 2010. 4 October 2010 <;.

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