The American Honda Corporation

The American Honda Corporation began as a small motorcycle company in 1959. Today, Honda is a top manufacturer of motorcycles, power equipment, ATVs, generators, marine engines, and automobiles. From the first Honda vehicle, the S500, released in Japan to today's top-selling Accord and Civic, Honda is one of the world's leading manufacturers in the automobile industry. In 1967, auto production began in the Suzuka factory. In 1972, the Honda Civic debuts and by 1977, the Civic ranks first in United States fuel-economy tests for the fourth consecutive year. The Honda Prelude debuts in 1978, followed by the most profitable Honda Accord in 1982. In 1986, Honda introduces its luxury line, Acura. By 1990, the Honda Accord becomes the best-selling car model in the United States and wins the fifth consecutive 1st ranking in the J.D. Power and Associates Consumer Satisfaction Index.

Honda Motor Corporation's basic philosophy of making products acceptable in international markets has led the Company and its subsidiaries' unique business development since its early days. As customer acceptance of Honda products in key markets increases, this philosophy has expanded to a basic business strategy of making products wherever they are being sold in quantity. Through this approach, Honda has been able to contribute to the economic welfare of a number of countries that produce Hondas. An example of Honda's commitment to the people and countries in which its products are sold is Honda of America Manufacturing, Incorporated, in Marysville, Ohio.

Because of successful marketing relationships with customers, Honda has gained a great reputation for itself. It has created a unique development and manufacturing capability producing a variety of consumer products built around compact, high-performance engines. By developing, manufacturing, and supplying 'quality' products, using local resources, and reinvesting capital, Honda fulfills its goal of being a responsible and contributing corporation.

Honda always finds a way to delight its customers, be it the gas efficient hybrid vehicle or the launching of scooters in India; there is always something new to make Honda customers proud of the company. Honda realizes the need for achieving cost leadership and often devises ways to delight its suppliers, but it is usually difficult to find the right vendor. Honda tries hard to build a long-term relationship. In order to sustain long-term relationships, most suppliers are inter-linked with Honda. While some companies try to make the payment procedure complex, with the underlying intention of delaying the payment, Honda is trying to come up with procedures so that payment can be expedited. Such activities undertaken by the company makes it an ideal customer in the eyes of the suppliers who reciprocate by providing the best of their products and services at the lowest possible price. The symbiotic relationship results in fruitful association for both (Sharma 1).

Relationship marketing, itself, centers on all marketing activities directed toward establishing, developing, and maintaining successful exchanges with customers. It is crucial to maintain positive relationships with the customer and the manufacturer of the product, because loyal customers tend to be more profitable to keep than those who are price-sensitive and see little difference among competing products. Also, a company that is successful usually has strong relationships with customers, making it hard for any other competitor to penetrate the interests of the customer. For example, Honda spends more than $5 billion annually for materials and components from three hundred suppliers. The expenditures by the three hundred member purchasing staff at Honda of America represent eighty percent of the firm's annual sales. Each sector of the chain is involved in manufacturing the product, the marketing techniques, delivery, and customer service support after the initial sale. If any of these factors were affected, so will the success of the popular products within the corporation (Hoffman et al 174).

Since the typical industrial corporation spends over half its sales revenues on industrial purchasing, supplier management has been recognized as crucial to the firm's competitiveness, likewise with the Honda Corporation. Honda invests so mush to ensure the very best in quality, that the supply-in-demand must be more than expected to ensure a profit. The automobile industry is a good way to look at the traditional and relationship models of the buyer-supplier relationships (Kim and Michell 119). Several factors