Hearing From Honda

The following are excerpts from a recent interview with John P Fulcher, senior manager, Honda Marine, which has been edited for brevity and clarity. The full text of the interview — which also included Steve Bailey, vice president, Honda Power Equipment Division — is available on www.boatingindustry.com under Web exclusives.

As the first outboard builder to introduce four-stroke technology, Honda Marine has had a presence in the marine market for more than 40 years. But for most of that time, it has quietly gone about its business, keeping a relatively low profile in the boating media.

In 2006, the company decided to raise that profile, inviting the marine press to Georgia’s Lake Lanier for the launch of its new BF90 and BF75 outboard motors. During that event, Boating Industry sat down with Honda Marine’s Senior Manager John P. Fulcher to learn more about the company’s culture, how it operates and where it believes the marine industry is headed.

Boating Industry – You’ve said Honda Marine wants to focus more on the U.S. market than it has before. What are you going to do differently?

FulcherA couple of things. One is our overall strategy and looking at, with [the new 75 hp and 90 hp engines Honda introduced at the event] we really feel there’s an opportunity to get more market share, and we’re really focusing on the mid-range motors. Then, with the fact that we’re getting a lot more receptivity to our motors with certain boat builders, we’re really focusing on some key segments to grow our business.

So with the support of R&D and executive management included, we feel we can go after the market through our dealer network and through our key boat builders and expand our business.

Boating Industry – You mentioned that sales at Honda Marine are up in 2006, whereas a lot of companies had more of a flat year. Can you characterize 2006 for Honda, is it a lot better or up only slightly?

FulcherActually it’s better and there are a couple of things. One is, I think, our reach with the ‘Proven’ [ad] campaign, working with the key boat builders and getting our awareness out at the boat shows early and in the magazines, doing some joint promotions.

But one of the key things we’ve really been harping on is working on customer satisfaction issues. We have an operational checklist the district managers go through with the dealers, working with the dealers, and really getting the processes down and learning from that.

I really feel like how we’re going to differentiate ourselves, and we’ve done this in other industries, is the whole customer experience. I just recently had a board meeting for Discover Boating and they brought that up again about the support and helping the dealers get certified.

A store that has policies and procedures in place and respects and motivates their employees, that’s a powerful tool. That can have an advantage in downtimes and uptimes. So what I’m looking at is trying to get as many of our dealers certified as possible, and then using the dealers that are certified as word of mouth. But I also want to make sure that we support the program.

I think the whole industry needs to be revolutionized a little bit relative to other industries and I think [certification] will be very helpful in putting the emphasis on customer treatment, retention and satisfaction.
One of the things we’re focusing on this year and in our future strategy is using that as a differentiator. But we need to put some things in place. We put in the 5-year warranty, that’s been a big help and why our business is up.

I like to know ‘OK, did the initiative work?’ So what we do is we survey customers to find out, ‘OK, was that a differentiator?’ We talked to our dealers. And we found out that the 5-year warranty was a big differentiator. It really shows support from the dealer and us as the manufacturer, that we stand behind our products and don’t nickel and dime you for a $25 deductible, or we don’t cover this or cover that.

It’s the same on day one as it is in the fifth year. People appreciate that the Honda brand stands behind its products. So I think that has helped us a lot, too.

Boating Industry – Are you optimistic about the economic climate over the next year or two as far as continuing to be able to grow and increase sales?

FulcherA couple of things. Gas prices came down and the interest rate moderated. Coming from the boat builders, and the advantage I have is talking to the board members at Discover Boating and I get a sense of what they think the market is, and also talking to the dealers because they have to buy boats for their inventory.

I think, overall, they are positively optimistic, especially with the gas prices and the general economy, the consumer price index and the interest rate. I think they feel there will be a resurgence as long as some of the key indicators don’t start to decline.

Boating Industry – Suzuki has introduced a 300-hp engine. Do you also see the potential in building larger horsepower engines, or does Honda have a different philosophy as far as engine size?

FulcherI think there is potential in larger horsepower, certainly, if you look at the industry statistics. In our case, with where we are, we feel midrange makes a lot of sense. It’s a broader segment, and there’s more growth opportunity from 40 hp to 225 hp, we feel as a company.

That’s not to say that we’re not looking at that opportunity. That would be naïve. But we feel that midrange, and also broadening our overall experience with the boat manufacturers and really being known for saltwater and getting that recognition, is important. We’ve earned respect, and we’re going to grow that opportunity. [Larger horsepower engines] is something we are looking at and not something we’re naively going to turn down as an opportunity.

Boating Industry – You’ve said Honda will be introducing four new models in the next five years. Does that include the 75/90 models you recently launched?

Fulcher — What we’re trying to do is set the stage for Honda Marine’s growth and 75/90 — and it’s not just me saying this but listening to the comments from others — will set the stage for other models being best in class, both in terms of design and technology and also fuel efficiency.
But each of the new models that we do, that’s going to kind of set the benchmark of expanding our opportunities through our new models, new platforms. And we’re going to go for the volume motors. That’s where we want to go, that’s where the boat builders want us to go and that’s where the customers want us to go.

Boating Industry – What else do you want people to know about Honda?

FulcherI think the passion. We have a passion for the marine business, and we’re going to be successful. We’re going to study things for maybe a little longer than some people want, but we’re committed to being successful in the marketplace and helping our dealers and our boat builders grow their businesses.

I think Honda Marine is going to be a powerful force in the industry, and I think customers are going to speak highly of our products.

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