“A PROJECT OF MARKETING PLAN”
PROF. DR. NADEEM AHMAD BASHIR
MAZHAR HUSSAIN I.D # 023111 ABDUL HAFEEZ I.D# 023117 MUDASSAR HAMEED I.D # 023392 MUHAMMAD NADEEM AHMAD I.D # 023114
Institute Of Management Sciences Lahore
To the people who have worked tediously through the ages to uphold the principles of determination, commitment and devotion for the sake of humanity.
ACKNOWLEDGEMENT We wish wish to place place on reco record rd our our inde indebt bted edne ness ss to the the follo followi wing ng peop people le for for the the continuous support we received during the process of compilation of this report.
In particular to Dr. Nadeem Ahmad Bashir, our teacher, for his unrelenting interest, keeping constant contacts and help that he gave during the process.
We are also thankful to Daewoo people for providing material relating to this report.
TABLE OF CONTENTS 1. Executive Summary
1
2. Daewoo International Corporation
2
Introduction General Information Company Chronology Departments Management
3. Daewoo in Pakistan
6
Introduction Why Daewoo in Pakistan? Start in Pakistan Investment
4. Services
8
5. Special Features
9
6. SWOT Analysis
10
7. Marketing Plan
11
• • • • •
Mission statement People vision Marketing objectives Target market Market positioning
8. Marketing Mix • • • •
13
Product Place Promotion Price
9. Conclusion & Recommendations
15
Executive Summary
The The Diag Diagno nost stic ic stud study y on Daew Daewoo oo Expr Expres ess s Bus Bus Serv Servic ice e is inde indeed ed an inform informati ative ve one. one. Daewoo Daewoo came came into into Pakist Pakistan an for the the constr construct uction ion of Motorway [M-2] Project. Then they were asked to operate their Inter City Bus Service Service that that was from Lahore Lahore to Islama Islamabad bad.. The govern governmen mentt of Pakistan proposed this, on November 11 1999, Daewoo started Inter City Bus Service with a fleet of initially 20 buses, which was from Railway Station Lahore to Choongi Amar Sadhoo. Then they gradually increased their fleet and currently they are operating with 70 buses. Daewoo is facing severe competition with Niazi Express. Other franchise companies like New Khan Metro, Premier are also indirect competitors of Daewoo. As far as the financial situation of Daewoo is concerned, it had to bear a large number of losses in its first two years of operations. But, it is the growth phase. This can be judged from the fact that the percentage of net loss was greater than 20 buses, and it reduced as the number of buses increased to 70. So we can say that Daewoo, though now not financially soun sound, d, has has a stro strong ng tend tenden ency cy and and in the the near near futu future re it will will be a profitable profitable enterprise. enterprise. Express Express Bus Service started working from 1998 with 40 buses and now they are at 64 and also profitable. Daewoo operates in the kind of industry where the entry barriers are high. The reasons being a large amount of investment, equipment and network are required. The major weakness in the Daewoo Express and City Bus Services is that their network is not extensive enough to accommodate most areas. Even Daewoo City Buses are too much crowded. An increase in the number of routes and buses especially in the Daewoo City Bus Service Department is the best way of tackling this situation.
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DAEWOO INTERNATIONAL CORPORATION Introduction A locomotive for national economic development since its founding in 1967 1967 as Daewo Daewoo o Indust Industria riall Co., Co., Ltd., Ltd., today’ today’s s “Daewo “Daewoo o Intern Internat ation ional al Corporation” is the new vanguard of Korean Trade. The company played a leading role in overcoming economic crisis in 1998 by achieving top results in export and trading surplus. Throughout its long history, the company also played a major role as a vanguard in non-governmental diplomacy.
The
company’s
dynamic
trade
policies
led
to
the
esta establ blish ishme ment nt of dipl diplom omat atic ic ties ties with with 13 nati nation ons s as well well as to the the expansion of export markets by setting up Korea’s first trade branch office in 37 countries. Daewoo Corporation was reorganized into three new new
com compani panies es
Int Interna ernattiona ionall
in
order rder
Corp Corpo orati ration on
to in
norm ormaliz lize trade rade,,
all
oper peratio ations ns::
Daew Daewo oo
Daewo aewoo o
Engin nginee eeri rin ng
and
Construction Co., Ltd., in construction and Daewoo Co. in others. Having normalized operations, Daewoo International is leaping into the new millennium with more than three decades of international international marketing expertise, international trading man power, high quality products and all inclusive domestic and international sales networks. With such reliable qualifications, the company looks forward to positioning itself as a truly global leader in world trade. With With its its own own dist distin inct ctiv ive e tech techno nolo logy gy and and deve develo lopm pmen entt capa capabi bili liti ties es,, Daew Daewoo oo inte intern rnat atio iona nall has been been,, for for more more than than thre three e deca decade des, s, a worldwide
name
for
fine
quality
products.
Now,
with
new
environmentally friendly materials, the company augmented its renown and and reli reliab abil ilit ity y
in mate materi rial al for for foot footwe wear ar,,
garm garmen ents ts,,
car car
inte interi rior ors s
components and miscellaneous goods. First in Korea to acquire ISO 9002
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and QS 9000 quality certification in its field, the company continues to expand its global exports and develop new trade strategies. With its solid capabi capabilit lities ies in manu manufac factur turing ing techn technolo ology gy and improv improveme ements nts in both both proces process s and and qu quali ality, ty, Daewoo Daewoo Intern Internati ationa onall is steepi steeping ng into into the new new millennium with top competitiveness, top products, and top services.
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General Information
Name of the company CEO
Daewoo International Corporation Lee Tae-Young Tae-Young 541 5- Ga
Address
Namdaemunno, Chung Gu, Seoul, Korea, G.P.O Box 2810
082+2-759-2114
Phone
+82+2-753-9489
Fax
Company Chronology
Mar. Mar. 22, 1967 Jan. 1, 1982 1998 Number of staff: Overseas network: Branch offices:
Major business areas:
Organization
Established as Daewoo Industrial Co., Ltd Merged with Daewoo Development Co., Ltd; Ranked first in Korea in exports and trade surplus Approx. 9000 Subsidiaries: 70 49 International Trading, Overseas Resources Development, Domestic and Overseas Investment Business Overseas Projects, etc. 10 Division, 51 teams
Departments
Corporate Restructuring
Finance
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International International finance and overseas management
Office of management
Staff of legal affairs
Management With 30 years years of experience, Daewoo’s Management Development Center rece recent ntly ly intr introd oduc uced ed new new visi vision ons s to foste fosterr pers person onal al effic efficie ienc ncy y and and adva advanc ncem emen ent. t. The The cent center er is init initia iati ting ng a numb number er of syst system emat atic ic new new programs for employees, as well as innovative steps as the leading of training facilities, operation of consignment training, and public lectures.
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Daewoo in Pakistan Introduction As Daewoo has a name all over the world due to interest in automobiles, consumer goods, financial and securities, construction, engineering and trade sector, Daewoo is working for the last thirty years and their motto is “from tile till ship”. Daewoo, a top Korean company, emerged in Pakistan in 1993, when it sort $1 billion in Lahore- Islamabad Motorway Project which was highly political in nature. Though it discouraged in getting more projects but with the re-election of Nawaz Sharif Government, Daewoo has come with its renewed commitments in taking part in development related activities. In the first phase, company would import buses from Korea and intends to invest $60 million in its transport venture which would have 600 buses fleet in total. Company source says that it is also considering installing a bus assembling plant to take part in the massive demand of passenger transport. The The compan company y comme commence nced d its busine business ss on Decemb December er 10, 1997 1997 after after obtain obtaining ing certif certifica icate te for comme commence ncemen mentt of busine business ss from from regist registrar rar of comp compan anie ies, s, Laho Lahore re.. Daew Daewoo oo Paki Pakist stan an Moto Motorw rway ay Serv Servic ices es Ltd. Ltd. was was incorporated as a public ltd. company on October 23, 1997. The object of the company was to provide services on Lahore- Islamabad motorway. Daewoo Pakistan Express Bus Services Ltd. was incorporated as a public ltd. company by shares with the object of engaging in transportation business. Their detailed description activities are:
To plan, plan, survey survey,, design design,, finan finance, ce, constr construct uct,, own, own, operat operate e and maintain bus services.
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To carry on the business of transport of goods, mails, passengers, animals from place to place either by air, by land or sea whether in airplanes, motor-vehicles, cars, ships or in any manner what so ever.
To indulge in higher transportation services in all the parts of the world.
Starting in Pakistan In May 1999, Daewoo signed memorandum of understanding with the Government of Punjab at Seoul, Korea to operate 1500 buses in Pakistan out of which 700 buses were proposed to be operated in Punjab whereas 800 buses in Sind. It was also agreed that government would provide the requested funds for this project from outstanding payment on the construction of LahoreIslam Islamaba abad d Motorw Motorway ay Projec Project. t. Anyho Anyhow, w, this this agree agreemen mentt could could not be materialized and due to the certain reasons and eventually Daewoo had to arrange funds for import of 50 buses through financial institutions and those maintain its commitments made with the citizens of Pakistan. To operate the city bus in Lahore, a franchise agreement was signed on Augu Au gust st 3, 1999 1999 betw betwee een n Daew Daewoo oo and and Laho Lahore re Regi Region onal al Tran Transp spor ortt Authority, Government of Punjab.
Investment To To comm commen ence ce its its busi busine ness ss on Janu Januar ary y 12, 12, 1998 1998,, afte afterr obta obtain inin ing g certificate for commencement of business from Registrar of Companies, Lahore, the company has planned an initial equity investment of US $ 1 million. The total cost of the project has been estimated at $ 6.526 million, which the company proposes to finance, by equity investment of -7-
$ 5.095 million and by loan arrangements of $ 1.431 million. In this project, as well, Daewoo wants 100% equity in the project instead of 60% allowed.
Services There are two types of services that Daewoo is providing in Pakistan which are as follows: 1. Expres Express s Bus Bus Servi Service ce 2. Ci City ty Bus Servi Service ce
Express Bus Service This is the inter-city bus service of Daewoo International Corporation in Pakistan. Major routes
Lahore - Islamabad
Lahore - Multan
Lahore - Sargodha
Lahore - Faisalabad
Rawalpindi - Murree [wagon]
Lahore - Peshawer
City Bus Service
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This This is the intraintra-cit city y servic service e of Daewoo Daewoo Intern Internati ationa onall Corpor Corporat ation ion in Lahore, Lahore, Pakistan Pakistan.. This department department offers offers an extensive extensive transport transportatio ation n network within Lahore through a fleet of 70 buses. Daew Daewo oo is also cons consiideri derin ng the lau launch of this serv serviice in othe otherr metropolitans such as Karachi.
Special Features [Daewoo Express ] It provides its services from cities to cities comparatively to the other comp compan anie ies, s, Daew Daewoo oo aims aims to prov provid ide e foll follow owin ing g serv servic ices es for for thei theirr customers:
Smooth drive with reclining seats
Refreshment
Audio/Video entertainment
Centrally heated and air-conditioned air-conditioned
Reservation facilities
Pick and drop facilities
Punctual departures and arrivals
24 hour service
Computerized Computerized ticketing
Courteous hostesses
Armed security guards
Cargo service
Expert drivers
All All these ese poi points nts are adv advant antages ages for for Daewo aewoo o over ver all the the other ther transportation companies in Pakistan.
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SWOT Analysis
Strengths
Weaknesses
1. Bran Brand d name name 2. Uniq Unique ue Serv Servic ice e 3. StateState-of of –the-ar –the-artt equipme equipment nt 4. Profes Professio sional nal man manage agemen mentt
1. Lack of an extensive extensive transport transport network
5. Tren Trends dset ette ters rs
2. Over Over crowd crowding ing of vehi vehicle cles s
[in transportation] transportation]
3. Insuff Insuffici icient ent market marketing ing
6. High High travel traveler er satisf satisfact action ion
intelligence
7. Extensi Extensive ve Employe Employee e Training Training Program
Opportunities
Threats 1. Well Well establis established hed compet competito itors rs
1. More More buses buses,, rout routes es and and a
2. Govern Governmen mentt polici policies es
greater range of transport
3. Fluctu Fluctuat ation ion in in fuel fuel prices prices
network
4. Up comin coming g com compan panies ies
2. Better Better manag manageme ement nt of
5. Intens Intensive ive distu disturba rbance nces s on the
available resources
roads
3. Innova Innovativ tive e Mar Market keting ing
6. Non-avai Non-availabi lability lity of spare spare parts parts
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MARKETING PLAN
BUSINESS MISSION envision growing growing in the shortest shortest possible possible time time into number one traveli traveling ng “We envision company in Pakistan with the unique ability to meet the needs of consumers of every age group for facility and pleasure through development of highest quality and customer-care services.”
PEOPLE VISION We envision the company to develop an extremely motivated and professionally trained work force, which would drive growth through innovation and renovation.
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MARKETING OBJECTIVES
The fiscal and political policies and economical conditions of the government and its efforts are creating a generally business friendly environment are likely to help in the economic turn around. The international community is supplementing these efforts to overcome overcome economic economic difficul difficulties. ties. These indicators indicators are holding holding out the hope that the year 2004 may be better for business. However, it is early to say with any finality how business will develop, given certain uncertainties that still prevail. On our part we are confident that we will maintain our growth momentum and perform well in the coming year. Our focus will remain on a long-term view of the business, quality consciousness and efficiency through innovation and renovation in all areas of operation.
TARGET MARKRT
Our target customers are middle and upper class citizens who think time is more precious than money and sufferings of using conventional traveling medias.
MARKET POSITIONING We want positioning our o ur company as the company, company, providing comfortable co mfortable traveling experience with a nice cooperative and friendly staff.
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MARKETING MIX PRODUCT Daewoo will provide traveling services using innovative techniques and modern technologies with a friendly and gentle environment.
PLACE The company will make sure that service is available throughout the country at all the suitable locations.
PROMOTION Effective marketing remains the hallmark of Daewoo as a company involved in supplying services with a great emphasis on effective long-term strategies. Its services (traveling, pick & drop, cargo etc) will be promoted through out the country using a network of busstations. It will ensure consistent and balanced growth, despite adverse market conditions. As a result, Daewoo will enjoy an extremely high degree of recognition and reliability, which has earned leadership positions for most of its services. Its more and more branches will be initiated in other cities where demanded.
PRICE After developing their pricing structures and strategies, companies often face situations in which they must initiate price changes or respond to price changed by competitors. In some cases, the company may find it desirable to initiate either a price cut or a price increase. In both cases, it must anticipate p ossible customers and competitor reactions.
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Several situations may lead the firm to consider setting its price. One such circumstance is excess capacity: In this case, the firm needs more, business and cannot get it through increased improvement or other measures. It may drop its "follow-the-leader pricing"— charging charging about the same price as its leading competitor—and competitor—and aggressively aggressively cut prices to boost profit. A successful price increase can greatly increase profits. For example, if the company's profit margin is 3 percent of fare, 1 % price increase will increase profits by 33 percent if fare volume is unaffected.
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Conclusion and Recommendations
1. Daewoo Daewoo is an internatio international nal brand brand and through through its high qualit quality y and excl exclus usiv ive e serv servic ices es,, it has has gain gained ed a good good repu repute te in the the loca locall transport business. But it has been seen that Daewoo Corporation has not lived up to its name as far as the establishment of an extens extensive ive transp transport ort networ network k is concer concerned ned.. Passen Passenger gers s in most most areas of Punjab and in all the other provinces of Pakistan have no access to the Daewoo Bus Services. There is also a great need for an inter city transport network of Daewoo in metropolitans such as Karachi, Rawalpindi and Faisalabad etc.
This problem can be dealt with by increasing the no. of inter city and intra city routes and buses as well as increasing the range of transport services.
2. It has recently recently been observed that following following a tremendous tremendous growth in the number of passengers, Daewoo Intra City Bus Service has suffered great over-crowding which has deteriorated the standard of comfort claimed by the company.
One probable solution to this problem is again an increase in the no. of transport vehicles and routes. Moreover, a better handling and management of the present bus routes and the number of buses can also lead to a more pleasant situation.
3.
I was quite quite shocked shocked to know know in my meeting meeting with with Executi Executives ves of Finance and Marketing of Daewoo, Pakistan that no advertising
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campai campaign gn has has ever been been laun launche ched d to highli highlight ght the compar comparati ative ve superiority
of
the
company
over
its
local
competitors.
Consequently, a large proportion of consumers remain unaware of the great facilities afforded by the bus service.
Therefore, advertisement is a feasible and necessary way for the bus service to attract passengers who are unfamiliar of the high class and uniquely elegant transportation experience- offered by Daewoo- and hesitate when spending on the comparatively high Daewoo bus fair.
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