EXECUTIVE SUMMARY This document discusses the marketing strategies for Ashok Leyland and its foray into small car segement Ashok Leyland is launching a new car with the name of ”Leyland next” and this document provide an efficient and workable marketing plan for the product. In India automobile industry is growing at a rapid pace. The demand for cars in India over time has increased a lot due to growth of economy and stability of people economic condition. This has attracted a number of producers towards the market. Leyland along with other producers like Toyota, Suzuki and Honda etc. is a player in the automobile market. Now Leyland has planned to launch a new car with significant innovations. For the success of the car in industry a deep study and research has been undertaken to develop an effective and efficient plan. Some of the important areas covered in this document while developing a Marketing Plan for the selected company are: •
Discussion of the Industry
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Analysis of company’s position
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Marketing objectives
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Promotions strategies
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Pricing strategies
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Product strategies
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Distribution strategies.
Furthe Furthermo rmore, re, action action plan plan lays lays out succes successfu sfull implem implement entati ation on throug through h monito monitorin ring g has also also been been included.
TABLE OF CONTENTS Executive summary
Executive Summary....... .............. ............. .......... ........ ........ ........ ........ ........ ........ ........ ........ ........ ...... ..1 Table of Contents ....... .............. .............. ........... ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .... 2 1.1. Global Industry for Automobile .....................................................................5 .....................................................................5 1.2. Automobile Industry Overview of India .............................. ...................................... ................ ................ ..........6
2.0. Leyland: History ....... .............. .............. ............. ............. .............. ............ ......... ........ ........ ....... ... 6 2.1. Introduction ..................................................................................................6 2.2. Leyland’s Vision ............................................................................................6 2.3. Leyland’s Mission .........................................................................................7 .........................................................................................7
3.0. Leyland next: Marketing Marketin g Environment .... ........ ........ ........ ....... ...... ...... ...... .....7 3.1. Micro Environment................................................................ ........................................................................ ................ ................ ........7 7 3.1.1. Consumers .......................................................................... .................................................................................. ................ ............ ....7 3.1.2. Competitors........................................................... ................................................................... ................ ................ ................ ..........7 3.1.3. Intermediaries.............................................................................. ...................................................................................... ........... ...7 7 3.1.4. Publics............................................................................................ .................................................................................................... ..........8 3.2. Macro Environment.................................................................. .......................................................................... ................ ............. .....8 8 3.2.1. Demographic Environment......................................... ................................................. ................ ................ ............ ....8 8 3.2.1.1. Education Educa tion........................................................................... ................................................................................... ............... .......8 8 3.2.1.2. Population......................................................................... ................................................................................. ............... .......8 8 3.2.2 Economic Environment................................................. ......................................................... ................ ................ ........... ...8 8 3.2.3. Technological Environment............................................................ .................................................................... ..........8
4.0. Leyland next: Product Evaluation Eva luation.... ........ ........ ........ ........ ........ ........ ........ ...... ..10 4.1. Core, Actual and Augmented Product................................. ......................................... ................ ................ ........10 10 4.2. Consumer or Industrial Product? ................................................. ......................................................... ................ ........10 10
TABLE OF CONTENTS Executive summary
Executive Summary....... .............. ............. .......... ........ ........ ........ ........ ........ ........ ........ ........ ........ ...... ..1 Table of Contents ....... .............. .............. ........... ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .... 2 1.1. Global Industry for Automobile .....................................................................5 .....................................................................5 1.2. Automobile Industry Overview of India .............................. ...................................... ................ ................ ..........6
2.0. Leyland: History ....... .............. .............. ............. ............. .............. ............ ......... ........ ........ ....... ... 6 2.1. Introduction ..................................................................................................6 2.2. Leyland’s Vision ............................................................................................6 2.3. Leyland’s Mission .........................................................................................7 .........................................................................................7
3.0. Leyland next: Marketing Marketin g Environment .... ........ ........ ........ ....... ...... ...... ...... .....7 3.1. Micro Environment................................................................ ........................................................................ ................ ................ ........7 7 3.1.1. Consumers .......................................................................... .................................................................................. ................ ............ ....7 3.1.2. Competitors........................................................... ................................................................... ................ ................ ................ ..........7 3.1.3. Intermediaries.............................................................................. ...................................................................................... ........... ...7 7 3.1.4. Publics............................................................................................ .................................................................................................... ..........8 3.2. Macro Environment.................................................................. .......................................................................... ................ ............. .....8 8 3.2.1. Demographic Environment......................................... ................................................. ................ ................ ............ ....8 8 3.2.1.1. Education Educa tion........................................................................... ................................................................................... ............... .......8 8 3.2.1.2. Population......................................................................... ................................................................................. ............... .......8 8 3.2.2 Economic Environment................................................. ......................................................... ................ ................ ........... ...8 8 3.2.3. Technological Environment............................................................ .................................................................... ..........8
4.0. Leyland next: Product Evaluation Eva luation.... ........ ........ ........ ........ ........ ........ ........ ...... ..10 4.1. Core, Actual and Augmented Product................................. ......................................... ................ ................ ........10 10 4.2. Consumer or Industrial Product? ................................................. ......................................................... ................ ........10 10
4.3. Convenience, Shopping, Special or Unsought Product ......................... ................................ .......10 10 4.4. Product Uses and Consumer Acceptance........................................... ................................................... ..........10 4.5. Distribution – Wide Spread or Not?.............................. ....................................... ................. ................ .............. ......11 11 4.6. SWOT Analysis........................................................... ................................................................... ................ ................ ................ ..........11 11 4.6.1. Strengths............................................................. ..................................................................... ................ ................ ................ ..........11 11 4.6.2. Weaknesses................................................................... ............................................................................ ................. .............. ......11 11 4.6.3. Opportunities.............................................................. ...................................................................... ................ ................ .......... ..11 4.6.4. Threats....................................................................................... ............................................................................................... ........... ...12 12
5.0 Consumer Evaluation ...... ............. .............. .............. ............. .......... ........ ........ ........ ........ .... 12 5.1 Type of Purchase Decision ..........................................................................12 ..........................................................................12 5.2 Consumption – consumer response............................. ..................................... ................ ................. ................ .......12 12 5.3 Quality, Comfort & Safety ................................................ ........................................................ ................ ................ ............ ....12 12 5.4 Customer Awareness and Brand Switching .......................................... .................................................. ........13 13 5.5 Brand Prospects -- Location and Influence ..................................................13 ..................................................13
6.0 Competitor Analysis....... ........... ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....... ...14 6.1 Pricing.............................................................................. ...................................................................................... ................ ................ ............ ....14 14 6.2 Promotion........................................................................................... ................................................................................................... .......... ..14 14 6.3 Distribution................................................................................................. ................................................................................................... ..14 14 6.4 Future Competitors and Replacement Products....................................... ........................................... ....14 14
7.0 Marketing Objectives Obje ctives....... ............. ............. .............. .............. .............. ........... ........ ........ .... 15 Goals and Objectives....................................................................................... .......................................................................................... ...15 15
8.0 Marketing Strategies ...... ............. .............. .............. ............. .......... ........ ........ ........ ........ .... 16 8.1 Target Market......................................................................................... ............................................................................................... ......16 8.2 Leyland next Target Market: Geographic Segment................................ ...................................... ......16 16 8.3 Leyland next Target Market: Psychographics............................................... ...............................................16 16 8.4 Leyland next Target Market: Demographics....................... ............................... ................ ................. .........16 16
9.0 Marketing Mix Strategies............................................... 17 9.1 Product Strategies........................................................................................17 9.1.1 Packaging...............................................................................................17 9.1.2 LabelLing................................................................................................17 9.1.3 Product Line...........................................................................................19 9.2 Pricing Strategies .........................................................................................19 9.3 Distribution Strategies.................................................................................19 9.4 Promotion Strategies....................................................................................20 9.4.1 Environment Research...........................................................................20 9.4.2 Advertising.............................................................................................20 9.5 Positioning Strategy.....................................................................................21
10.0 Evaluation, Monitoring and Control...............................21 11.0 Budget........................................................................ 22 11.1 Market Analysis Cost..................................................................................22 11.2 Questionnaire Cost .....................................................................................22 11.3 Advertising and promotional cost ...............................................................22 11.3.1 Advertising cost...................................................................................22 11.3.2 Promos Cost.........................................................................................23 11.2.3 Sponsorships........................................................................................23
Car Dealers Survey Summary............................................... 24 KBC.....................................................................................................................24 MUST CARS.........................................................................................................24 CAR MAX............................................................................................................24
Consumer Questionnaire .....................................................25 QUESTIONNAIRE ANALYSIS.................................................................................28 Analysis Summary..............................................................................................32
12.0 Bibliography ................................................................33
1.1. GLOBAL INDUSTRY FOR AUTOMOBILE 1 Automobile Industry is a business of manufacturing and selling vehicles. It has encouraged the expansion of road systems and allowing consumers to commute long distances. It has also allowed other industrial product to contribute as well, such as steel and thus is the key determinant for economic growth. Globalization of automotive industry accelerated exponentially after the 1980’s. This was due to the construction of important overseas facilities and mergers alongside with improved production techniques adopted by Japanese in the 1970’s. By 2005, the industry’s global output touched 64.6 million vehicles. The auto market today is one of the largest segments in world trade. Today the annual automotive exports have reached a level of $600 billion which accounts for 10% of the worlds export. With increase awareness in consumers about potential hazards, automobile industries are in constant competition with each other to produce a better vehicle for the right consumer. It is estimated that the car industry will continue to prosper to increasing trends as national economies and population increases. Mobility 2030, of the World Business Council for Sustainable Development, reported that per capita mobility of china, Latin America, Russia and rest of Europe would double by 2030 to 500014000 km per year. This will contribute to the automotive industry a big deal.
1.2. AUTOMOBILE INDUSTRY OVERVIEW OF INDIA
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In India automobile industry is growing at a rapid pace. There have been huge demand for cars in India over time but in the last few years due to improvement in economy of India this demand has increased tremendously. Total number of automobiles in use today in India is 5 million. About two-third of the market demand is being met currently by local production and imports from other countries and onethird is left unmet. So there is a huge gap in market demand and supply which is still there to be met. Major producers currently in the market are Toyota, Suzuki, Leyland, Honda, Mitsubishi, Hyundai.
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The government is also supporting the investors to invest in India this has attracted more producers of cars to come in India and grasp market share from India automobile market.
2.0. LEYLAND: HISTORY 2.1. INTRODUCTION 3 Leyland Motor Co. is one of the major heavy vehicles manufacturers in the world. Leyland Motor Co. is in automobile industry for over 70 years. Leyland has spread out its manufacturing over all major countries and territories of the world. In India Leyland is operating with local brand name of Ashok Leyland Limited. In India Leyland’s net sales for year ending 30th June 2006 were about Rs. 4 billion.
2.2. LEYLAND’S VISION 4 Leyland’s vision is to enhance the quality and safety of travel and achieve customer satisfaction. Leyland focuses on maintain and implement better quality standards to ensure people with more comfortable and safe drive. There vision is expressed in their statement as: “Leyland-Enriching people’s Lives.” The significance of this is that Leyland aims to participate in the development and progress of society through its business activities worldwide. This is only achieved through set of objectives that needs to be focused and better implemented through effectiveness and efficiency.
2.3. LEYLAND’S MISSION 5 “Leyland provides unique and innovative automotive products and services that deliver superior measurable values to all stakeholders”
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3.0. LEYLAND NEXT : MARKETING E NVIRONMENT 3.1. MICRO ENVIRONMENT
3.1.1. CONSUMERS Consumers are the main target which needs to be understood and satisfied in the market. Their purchasing behavior will most likely be an impact affecting an organization in several unprecedented ways. It is important to understand their mindset patterns of purchasing a family car, the basic pattern includes affordability, fuel efficiency, safety and comfort giving the consumer a mood of acceptance and appreciation. The main focus of the Leyland will be the low level car owners and low income consumers. It will also target product to bike owners as they are very unsafe.
3.1.2. COMPETITORS With strong economic growth and government relaxation on taxes, several companies are emerging to establish their market position. Leyland next stands a good chance of competing with existing competitors as it has a built reputation in the market due to its better sevices and best of the products in heavy weight vehicles. Leyland will position the new product with features such attractive look-n-feel. Direct - competitors are Toyota and Suzuki which have substantial market share.
3.1.3. INTERMEDIARIES Leyland will adopt both distribution channels, direct and indirect. Intermediaries (i.e authorized dea lers of Leyland) are important, since indirect distribution of its product is carried out through them. This will help to further enhance the reach-ability of the car.
3.1.4. PUBLICS Publics are the general public who are involved in the reputation of Leyland and its products. Leyland has to provide several strategic approaches in order to stand out with the public opinions. Any critics against Leyland would impact the sales and repute. With such diverse culture, consumers are highly deterred with public opinions. This very thin line, the public offers, can effect production, distribution and diversification of Leyland. Leyland will have to stand out in their primary objective and not loose that position.
3.2. MACRO ENVIRONMENT 3.2.1. DEMOGRAPHIC ENVIRONMENT 3.2.1.1. Education The literacy rate of the country is increasing and as a result it has increased the consciousness in people about safety and quality of travel. People are now more sensitive about how safe and comfortable is the automobile they are using. With the increased awareness in people they have now shifted towards the automobiles which are according to safety standards and give more comfortable travel. This shift is also helping Leyland Motor Co.’s business as people are moving towards it.
3.2.1.2. Population Population of India is increasing at rapid pace and has touched the figures of 120 crores . This increase in population has also increased the number of buyers and expanded the market of automobiles. Requirement of more automobiles has grown. Automobile industry has also responded to this scenario. But there is still a huge gap between people demand and supply of cars. Leyland focuses on this gap and is trying to avail this opportunity to its best.
3.2.2 ECONOMIC ENVIRONMENT With the rapid growth of national economy purchase power of people has also increased. Also the priorities have changed a lot. The affordability of cars has improved and this resulted in huge increase in the sales of cars. This provides Leyland an opportunity to jump into market with strong impact and grab a major share in automobile industry.
3.2.3. TECHNOLOGICAL ENVIRONMENT Rapid improvement and advancements in technology impacts the automobile industry a great deal. It impacts the manufacturing, assembling and furbishing of automobiles. New technological advancements pace up the operations; results in more rapid production of cars. Technological improvements also impact Leyland’s operations a great deal and forces towards technological shift. Leyland keeps on improving its technological structure with time and has to continue its strategy of regular improvements.
4.0. LEYLAND NEXT : PRODUCT EVALUATION 4.1. CORE, ACTUAL AND AUGMENTED PRODUCT •
The Core Product is an easily affordable Vehicle for consumers.
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The Actual Product is “ Leyland next ” car which is a new launch of Leyland. It provides its users with an affordable choice to buy and ensures a safe and comfortable travel.
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The Augmented Product is the added features this car provides to its buyers. Major add-on features Leyland next provides to its buyers are : o
1 year parts and service warranty.
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Integrated Tracking System.
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Highly attractive design.
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CNG installed in car for user convenience.
4.2. CONSUMER OR INDUSTRIAL PRODUCT? “Leyland next” comes under the category of consumer products as it is designed and launched for the
satisfaction and facility of individual or family users of middle class and low-earning income population.
4.3. CONVENIENCE, SHOPPING, SPECIAL OR UNSOUGHT PRODUCT “ Leyland next ” is a shopping product, as there is high involvement of buyers while buying cars. They want more information about the product and also this is not daily purchase or frequent purchase product. There is a huge demand of affordable and safe automobiles in the market. Getting a comfortable travel facility has become a desire of every person as frequency of travel has increased a lot. “Leyland next” will provide users will all three major factors in demand for automobiles i.e. economy, comfort, safety.
4.4. PRODUCT USES AND CONSUMER ACCEPTANCE The consumer acceptance for this car will be highly as people are becoming more and more sensitive towards traveling. People now prefer cars which are more comfortable and look attractive. Economic strengthening of the country has also improved the economic condition of people resulting in more
demand of automobiles. Therefore there is a huge gap in market and Leyland next through its low pricing, more safety and comfort will get huge consumer acceptance.
4.5. DISTRIBUTION – WIDE SPREAD OR NOT? Distribution of “Leyland next” will be widespread as Leyland want to reach all the major areas of the country. It will be launched in almost all the states .
4.6. SWOT ANALYSIS 4.6.1. STRENGTHS Following are some of the major strengths of company: •
Brand image of Ashok Leyland Limited.
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Variety of Automobiles being produced.
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Local Production of cars / low cost of production.
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Financially Leyland is a strong company.
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High Quality products.
4.6.2. WEAKNESSES Following are some of the weaknesses of the Product and company: •
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Currently Leyland has low share in market. Leyland next is currently being launched in two varieties only.
Leyland has small distribution network currently.
4.6.3. OPPORTUNITIES Following are some of the opportunities which Leyland can avail in future to increase its market share: •
Increased awareness of people.
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Improved economic condition of people.
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Increased population/consumption
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Increased media influence on people.
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Increased market demand.
4.6.4. THREATS Following are some of the threats which may be faced in the future: •
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High competition in the market. New Entrants can also add to the competition. Presence of other brands in the market and their infrastructure.
5.0 CONSUMER EVALUATION 5.1 TYPE OF PURCHASE DECISION Automobile industry has a number of producers already in market including Leyland, Leyland next will introduce a new image of the company and will most likely attract consumers as it will be a customized model for the people. Since any consumer will be a long lasting relationship, it is important that it stands out in front of its competitors and has a competitive edge. There will be high involvement of user as it has to make a big purchase decision and also there are competitors like Suzuki and Toyota etc. giving services to people; so this purchase behavior will be categorized as Dissonance-Reducing Buyer behavior.
5.2 CONSUMPTION – CONSUMER RESPONSE Commute has become a necessity and more roads infrastructure has been established. More people are interested in purchasing as their needs and interests increases. As competition is on the rise so public is more informed about cars. They are more conscious about the safety and economic features of the car. This awareness and consciousness is increasing the buying and there is already a gap in market so production of Leyland next will be tremendous.
5.3 QUALITY, COMFORT & SAFETY Ashok Leyland Limited is working in collaboration with its mother company in Japan, Leyland motor Co. Thus it has an international image in local market & public mind stands on good grounds when considering Quality, comfort and Design. The new image will provide a new quality, price and comfort pattern which will be very favorable to consumers. Since consumers relationship is going to last, it is important that these variables are constantly improved. Leyland next will be affordable most of all, and safety should be first priority so that the consumer’s first impact would be that this is a car for my
family. Design will be unique from the rest of its competitors and will be designed after evaluating customer buying patterns.
5.4 CUSTOMER AWARENESS AND BRAND SWITCHING Since this is a high value purchase, it is most likely that the brand loyal consumers are loyal to the company and believe that the Leyland products are much better than others. The new car will attract our existing customers as it will contain additional unique features. Leyland next aim is to capture the new market of its level and provide its existing customer a new opportunity to experience a new ride experience. Leyland will provide unique differentiated points to create awareness and presentations proving the consumers the advantages and luxury it can provide to a small family. With increase in awareness in consumer minds, it is imperative that safety features are emphasized and provide core values which the consumers like to see.
5.5 BRAND PROSPECTS -- LOCATION AND INFLUENCE In India, 33% of the population is living below the poverty level and very less no of peop[le comes under elite class. Therefore Leyland next will provide a very different level of customization to different locations which will be favorable to low-income families. Most of them travel by bikes and buses. Leyland will introduce a better shift to its new car which is Compaq, secure and most economical.
6.0 COMPETITOR A NALYSIS Major competitors of “Leyland next” are Suzuki, Toyota, Hyundai and Maruti. All products of these companies of same size and capacity will give tough competition to “Leyland next ”.
6.1 PRICING As making cars more affordable is the major objective of launching this car therefore the prices of this car are kept lower than that of all the current competitors in the market. This will help grasping larger market share and compete well in market. •
CNG plus AC car will be available at Rs. 3, 50,000 only.
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Only AC car will be available at Rs. 3, 15,000 only.
6.2 PROMOTION Major competitors of “ Leyland next” like Toyota and Suzuki and Maruti, are spending huge revenue on promotion of their brand and products. Leyland will also make extensive effort and heavy investment on creating awareness about “ Leyland next” in market. Promotion of “Leyland next” will be done at nation wide scale as Leyland aims at targeting all major areas of country.
6.3 DISTRIBUTION Leyland has currently distribution setup in the major divisional headquarters only but the competitors specially; Toyota and Suzuki has a wider network. There presence in more areas than Leyland is giving tough competition to Leyland. For Leyland next , Ashok Leyland Limited will come up with a new strategy of distribution to reach all those areas where there they are not currently present.
6.4 FUTURE COMPETITORS AND R EPLACEMENT PRODUCTS In future the most effective competitor for “Leyland next” can be a small car from Honda Limited. Honda is a large car manufacturing company but not currently producing small cars in India. Therefore a step of producing small cars by Honda can give tough time to Leyland next. Leyland should develop strategy to cope with the situation if Honda also jumps into the market with small cars for consumers.as now Honda and fiat has introduced small cars in India.
7.0 MARKETING OBJECTIVES The goals and objectives of the marketing plan are usually defined under the light of certain performance indicators which are related to the probable increase in growth, sales and performance levels in terms of increasing overall company revenues and image. Marketing objectives leads to the increased sales if they are clear and understandable For “Leyland next” we’ll define performance parameters and baseline in light of Leyland’s vision to achieve customer satisfaction. Also the growth of automobile industry in India and increase in demand of automobiles is kept under consideration.
GOALS AND OBJECTIVES •
Capture at least 25% of market share for small cars in defined Target market.
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Occupy good position in the market following Suzuki Motor Company.
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Target middle class and low earning income class specially by providing them an affordable option.
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Create awareness among target audience. Use excessive advertising especially using media preferred by the target market.
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Use unique features like good design, low prices and comfortable environment to create attraction towards product.
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Create product belonging and position among buyer’s mind.
8.0 MARKETING STRATEGIES This section of the plan basically outlines Leyland’s plan to achieve its objectives that are mentioned above as well, it is the most essential part of the marketing plan.
8.1 TARGET MARKET Leyland nexc target market will be the low-level income group, middle class and bike owners. Bike owners are the most critical as large number of consumer currently in India travel through bikes. Safety hazards of this type are tremendous considering the increasing number of accidents that occur due to unsafe bikes. With constant awareness and education about Leyland affordability and safety features, this type of group could be acquired resulting in increase of brand loyal consumers. People are more aware and therefore, they are constantly more particular when deciding which car to purchase. With strategic advertisement, consumers can be attracted with its latest features and a new image Leyland will provide to owners.
8.2 LEYLAND NEXT TARGET MARKET: GEOGRAPHIC SEGMENT The major concern of Leyland next is to capture all the district headquarters of the country resulting in its coverage of almost all over the country.
8.3 LEYLAND NEXT TARGET MARKET: PSYCHOGRAPHICS With new image Leyland next will provide to its buyers, owners will feel more confident and proud considering that Leyland is an international organization with strong background resulting driving Leyland next a status symbol. Also safety and comfort are big factors of considerations in a consumers mind so Leyland by focusing on these factors will attract safety and comfort conscious people. Seeing its potential, consumers will most likely shift to Leyland next .
8.4 LEYLAND NEXT TARGET MARKET: DEMOGRAPHICS Primary Target market belongs to middle class, upper middle class and low earning income people in society, falling in income bracket of below Rs. 50,000. Also the target will be people from 25 - 60year old who are major automobile buyers.
9.0 MARKETING MIX STRATEGIES “Leyland next’s” marketing efforts will be based on the priority of expanding its market share and
increase the brand loyalty among buyer’s by achieving customer satisfaction. Leyland is launching “Leyland next” at this particular time because of boom in the automobile industry in India. The demand of cars for private usage is increasing a great deal but there are a few car production companies currently in the market. Leyland feels that there is a very good opportunity to jump into the market at this time with a quality product and grasp a major share in market.
9.1 PRODUCT STRATEGIES The name of the car will be “Leyland next”. It should be a highly quality product focusing on
three important parameters of economy, safety and comfort to compete the major competitors in the market i.e. Suzuki and Toyota.
9.1.1 PACKAGING Leyland next will be built on one standard size. It will be available in both color types i.e. Metallic and Non-Metallic. The color range will be 5 major colors red, white, black, blue and green with capacity to increase other colors on demand. The design of the car will be smooth and catchy.
Imp. Recommendations •
The shape of the car should be kept different from the shape of competitor’s products.
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The design of the car is recommended to be kept innovative and unique in order to attract customers.
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The design should also be kept on improving on regular basis.
9.1.2 LABELLING The Label of car presents only basic information about the car i.e. brand name and car name.
Imp. Recommendations The name of the car proposed is “ Leyland next”. The name represents innovation and movement ahead as is the plan to move the car ahead of its competitors in aspects like Affordability, comfort, design and
safety. The label of the car should be innovative and attractive. The fonts used should be decent and attractive. Only precise text should be presented.
9.1.3 PRODUCT LINE Leyland next will be available in two major types of cars:
1. Leyland next CNG/AC 2. Leyland next AC
Imp. Recommendations It is recommended both products should be launched simultaneously with major production and share to CNG car as demand of CNG is much more than that of simple car. After three months time a survey should be conducted to judge customer’s response to the car.
9.2 PRICING STRATEGIES The price of the cars will be as following: •
Leyland next CNG/AC
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Leyland next AC
------------- Rs. 3,50,000/----------------Rs. 3,15,000/-
Imp. Recommendations The price of the car should be kept lesser than the competitors as Leyland next’s major objective is providing economical car to users. Also the target market of the car is Middle and low income class so it should be kept in their affordability. This is accomplished by reducing the overhead costs like OWN payment etc. by developing efficient distribution mechanism.
9.3 DISTRIBUTION STRATEGIES Basically there are two types of distribution channels available: Direct distribution and In-direct distribution
Recommendations Leyland next will adopt both distribution channels for d istribution of car. Use of Direct Channel: Leyland has its showrooms in major divisional headquarters; at these stations
Leyland next will use its direct distribution channel. Also it is recommended to increase the direct distribution coverage area by setting up showrooms in more areas to have better control over distribution.
Use of In-direct Channel: In those areas where Leyland doesn’t have its showrooms it will use its
chain of authorized dealers to sell out its cars in these areas.
9.4 PROMOTION STRATEGIES Promotion is one of the most important factors of marketing; it is done to affect the consumer behavior in order to achieve sales and increase product image. In promotion the major task is to make consumers aware of the product and to attract consumer towards the product by highlighting the advantages of the product. Also it keep consumers aware and well informed about product’s features and improvements.
Recommendations •
Leyland can use electronic and print media to advertise about its car.
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Leyland can advertise on billboards, flex signs, bus boards, telemarketing etc.
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Special advertisement campaigns can be launched e.g. seminars, road shows publications etc. to create awareness about Leyland next.
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Leyland will sponsor special events like concerts etc. to introduce the car to public.
9.4.1 ENVIRONMENT R ESEARCH An extensive market research will be conducted to have better idea about consumers’ perception about Leyland and its competitors. For this purpose Leyland will acquire services of marketing and research agencies to better analyze market environment. This will enable Leyland to learn about the consumers’ behavior, how they perceive us and compare with the competitor. The media of the advertising a product is always chosen after the market environment research to get knowledge that if the target audience is interested in that mode of advertisement or not
9.4.2 ADVERTISING To advertise the product better and create awareness about product; Leyland will use different advertisement methods to approach the consumers. The diversity of advertisement channels will help in reaching the masses of different mindsets. Following Advertisement methods will be used: •
leyland will use print and electronic media to introduce the product to consumers.
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Special events will be sponsored by Leyland.
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Use of Billboards, flex signs etc for massive introduction of car’s launch. Special road shows and displays will be set at dealers outlets. Prize contest will be conducted to attract people towards the car.
9.5 POSITIONING STRATEGY Leyland next will use the image of LEYLAND MOTOR CO. and hope that it will attract the customers towards the car. Also Leyland next’s extensive marketing with focus on its special features like economy, safety and comfort will draw attention of buyers and create room for the product in the market
10.0 EVALUATION, MONITORING AND CONTROL The goal of the marketing plan is to outline the strategies, tactics, and programs that will make the sales goals outlined in the Leyland next business plan a reality by the end of the season. The monthly and the annual revenue generation, then the amount of expenses incurred in a month or in a year, then the increased level of customer satisfaction and ensuring the brand loyalty.. For complying with these scenarios the advertising efforts made by the company, strength of the distribution channels, launch of the new products and the pricing will be measured. The possible
increase in growth of the target market also depends all these efforts made by Leyland next . The people who are responsible for the monitoring and control of the marketing plan involves, the Marketing Executives, Sales Managers, Media Managers, Market Research Departments, and the Production Managers. Some activities must be carried out for precisely and closely evaluating the effectiveness of the strategies and tactics for example the gathering and structuring of data regarding market, product, consumers and the pricing trends, then the generation of daily sales report should be maintained and then in the end continuous reconfirming of the marketing budget and activities by the managers of different divisions.
11.0 BUDGET As Leyland has a tough competition with some big names like Suzuki and Toyota so there is need of strong financial support to all marketing activities. Leyland has allocated initially Rs. 30 millions for the marketing of Leyland next . This amount will be further sub-allocated to different areas. Rs. 15 millions has been allocated to the budget of initial cost for the marketing analysis and all activities of advertising and promotion during first quarter of the year. For the continuity of the promotional and advertisement activities Rs. 15 millions has been sub-allocated for each quarter over the years as Rs. 5 million per quarter. •
These allocations of finances can be altered with respect to the future requirements
11.1 MARKET ANALYSIS COST Leyland’s marketing department includes professionals for market analysis, competitor analysis, etc. These people are advised to do their best and for more extensive approach. Leyland has also acquired the services of marketing research and analysis agencies for better approach and more in-depth research. The cost estimated for market research is Rs. 2 million.
11.2 QUESTIONNAIRE COST Leyland’s has conducted an extensive questionnaire with general public to have better idea about the mindset and understanding of general public. This survey costs for its development, execution and then process of interpretation. Cost estimated for this survey is Rs. 1 million. The further subdivision of this cost is given below in table 1.3 in Appendix B.
11.3 ADVERTISING AND PROMOTIONAL COST The cost allocated for advertising and promotion is Rs. 12 million. This cost is allocated to the areas of advertisements, sponsorships, promos, etc.
11.3.1 ADVERTISING COST Advertising costs includes advertisement on electronic media, print media (news papers, magazines, etc.), billboards, road shows, displays etc. etc. These all activities have been allocated Rs. 8 million.
11.3.2 PROMOS COST Promo cost includes the cost of handouts; information books, prize contests etc. these all promo activities will cost around Rs. 2 million.
11.2.3 SPONSORSHIPS Leyland will sponsor different events like concerts, seminars and other social activities etc. to promote the car in masses and attract people. This sponsorship of a chain of activities over time will cost about to Rs. 2 million
CAR DEALERS SURVEY SUMMARY
KBC Maruti Suzuki and hyundai are enjoying the most market share in India with about 55% and 35% jointly respectively. Maruti is successful due to its local production and economical cars but they have major problem of sustainability and designs of their cars. Hyundai is enjoying good market share because of good quality and extensive production. If Leyland is launching new car and want to grasp market share then it has to focus on designs of cars and also provide more affordable option to buyers. Also Hyundai and Maruti do good marketing and to beat them Leyland must develop efficient marketing strategy.
MUST CARS Due to increase in economic activity in the country, demand of automobiles especially cars for private use have increased hugely. Currently Maruti is enjoying the major share in the market due its affordable cars, availability of spare parts and good marketing. Maruti is dominating the market but there are a lot of problems which are being faced by users. Especially the week areas are design and safety standards. If Leyland wants to compete with Maruti in the market and break into its dominance it should provide buyers with highly excellent designs of cars and also cars which are safe and comfortable to travel.
CAR MAX The most important parameters while buying cars a buyer looks for are its Price, Safety standards, Design of car and how much comfortable the vehicle is. Currently some of the cars implemented the design, safety, comfort standards are very expensive and huge market share goes to those cars which are less standardized but are cheap. Leyland can stand in market and be successful if it make an ideal
combination of Affordability, design, safety, comfort and make a better and cheap product for buyers. Currently less quality cars of Maruti are enjoying bulk of market share due to lack of better options available in market. Leyland is currently not so much successful in Indiai market but they can improve their position by focusing at this area and developing effective marketing strategy to break the influence of Maruti and Hyundai.
CONSUMER QUESTIONNAIRE What is your Gender ?
a. Male b. Female
What is your age?
a. 18-25 b. 25-35 c. 35 and above
What is your income ?
a. Below 50,000 b. Above 50,000
What comes to your mind when you think about Leyland ?
a. Affordable Cars
b. High quality Cars c. Trust Worthy d. Expensive Cars e. Safety f. High brand image
Do you own a car ?
a. Yes
b. No
If yes, which car do you prefer ?
a.Maruti b.Tata
c.
Others, please specify …………….
Do you prefer public transport to private cars ?
a. Yes b. No
Are you satisfied with safety of cars already in market ?
a. Yes b. No
What is your major preference when buying a car?
a. Price b. Safety c. Comfort d. Design e. Other please specify ……….
What power of car do you prefer?
a. 800 cc b. 1000 cc c. 1200 cc or more
What type of color you like?
a. Non-Metallic b. Metallic How satisfied are you with prices of cars in market ?
a. Satisfied
b. Not - Satisfied c. Neutral
How much are you willing to pay for 1000 cc. Cars ?
a. Rs. 300, 000/-
to Rs. 450, 000/-
b. Rs. 450, 000/-
or more.
If one of the companies plans to launch a new car of great design, safety, comfort and affordable which one you will prefer?
a. Toyota b. Maruti c. Leyland d. Local companies
e.
Other please specify
What influences your buying decision? a. TV ad b. Magazine c. Word of mouth d. Bill board e. Other, Please specify ………………..
QUESTIONNAIRE ANALYSIS Gender 60 e 50 g a % 40
30 20 10 0 Male
Female Gender Type
Income 70 60 50 e 40 g a %30
20 10 0 Below 50000
A bov e 50000 Income grou
Age Group 45 40 35 30 e 25 g a %20 15 10 5 0 18-25
25-40
40-60
Age Grouping
Above 60
Are you satisfied with safety of cars already in Market? 80 70 60 e 50 g a % 40
30 20 10 0 Yes
No
What is your major preference when buying cars? 60 50 40 e g a 30 %
20 10 0 Price
Safety
Comfort
Design
Other
W hat power of car do you prefer? 60 50 40 e g a 30 %
20 10 0 800 cc
1000 cc
1200 cc or more
What type of color you prefer? 70 60 50 e 40 g a %30
20 10 0 Non-Metallic
Metallic
How satisfied are you with prices of cars in market? 60 50 40 e g a 30 %
20 10 0 Satisfied
Not-Satisfied
Neutral
How much are you willing to pay for 100 0 cc Car? 90 80 70 60 50
e g a %40
30 20 10 0 3,00,000 - 4,50,000
4,50,000 or more
If any one of the comp any launches a car whichone you will prefer? 35 30 25 e 20 g a %15
10 5 0 Toyota
Suzuki
Nissan
Local Companies
Other
What influences your buying decision? 45 40 35 30 e 25 g a 20 % 15 10 5 0 TV ad
Magazine
Word of Mouth
Billboards
Other
ANALYSIS SUMMARY According to survey people with an income bracket less than Rs. 50,000 per month prefers buying small cars for their private use. A large percentage of people prefer buying their own cars then to use public transport but most of them are not satisfied with the safety standards of the cars in the market. According to survey the most important considerations by a buyer of car are price, safety, comfort and design with price having major influence. About 65% of the people surveyed were of age group 25 to 60 who are the major buyers. Most of the buyers are not satisfied with the prices of the cars and are willing to buy 1000 cc. cars for Rs. 3,00,000 to Rs. 4,50,000 but most of the cars in the market get more out of them as they are expensive. They consider Maruti and Hyundai successful in launching a car. People seem to be more highly influenced by the TV ads and billboards.
