Marketing Management KIA Spectra Report
Group Members: Saadat Khaleeque Sabeeh Haseeb M. Ilyas Muaaz Ghaznavi Presented To:
Ms. Huma Maqsood
Salman Faiz Muhammad Najeeb Ammar Warraich
Corporate History:
KIA is a Korean based company, specializes in automobile manufacturing. It started its operations in bicycle and motor bikes manufacturing. It soon expanded its functions to the manufacturing of Pick-ups and small trucks. It entered into the car market in 1986. “KIA Pride” was one of the star products and earned high fame for the company in late 80’s. It has two manufacturing plants in Korea and shares are mostly owned by public. In Pakistan, Deewan Motors holds the dealership of KIA cars and Pick-ups and also runs an assembly plant in Sajawal, Karachi. The company went bank crept in 1996; therefore it was acquired by another top performer of automobile industry Hyundai. From there onwards, KIA Company has been working under the management of Hyundai Company. Reason of introducing this product:
KIA Spectra was introduced in Pakistani market in year 2000. The main reason of introducing this car was that, in Pakistan it was the HONDA and Toyota that were having monopoly in the segment of 1300cc cars and above than that. Suzuki hadn’t come up with “Suzuki Baleno” that time. So there was huge space available for any competitor to enter this monopoly. Deewan group took the initiative and introduced “Kia Spectra” with the same specifications as that of Honda and Toyota and at lower prices. “Kia Spectra” was market oriented product…HOW?
The marketing concept holds that the key to achieving organizational goals consists of the company’s being more effective than competitors in creating, delivering and communicating superior customer value to its chosen target markets. The Deewan group understood the market need and respond very positively to it. Though there wasn’t high level of innovation involved in introducing KIA Spectra but delivering customers the best, as compared to its competitors, it was Relative marketing approach followed by the innovators.
Marketing Environment Demographics:
KIA Spectra is a luxurious car. Age: More than 35 years. Income: More than 1 million rupees per year. Gender: Male Occupation: Office employees and businessmen. Economic Conditions 1.) Social / Culture Changes:
People like that car whose spare parts are easily available in the market. KIA Spectra was the first car to enter the 1300cc market after Honda and Toyota. As a new product in the market its spare parts were only available with the authorized KIA dealers. This was the thing that customer didn’t want, purchasing expensive spare parts just because they were not available at local automobile markets. The use of alternative parts instead of genuine one didn’t met the requirements of Spectra. Therefore, a common phenomenon still seen on present markets is that, a vehicle whose spare parts are not available in local market, customers bad opinion will never let that brand flourish. The second point was that the fuel consumption of spectra was very high. It consumed approximately 1 liter for 6.5 kilometers, whereas, TOYOTA mileage is 13 km in 1 liter and HONDA travels approximately 9-10 km in 1 liter so with this comparison people get back to HONDA and TOYOTA as these two were more economical than SPECTRA. 2.) Economic Environment: a.) Industrializing Economies: Pakistan’s economy is an industrializing economy, since the rich class and the upper-middle class demands new type of goods. 3.) Political and Legal forces:
Marketing decisions are strongly affected by developments in the political and legal environment.
There’s less of tariff and other tax barriers presently, as they were few years back. So importing of cars and their spare parts are not as expensive as before. However, these policies are changed and revised with the every new annual budget. One of the legal restrictions on car manufacturers from government of Pakistan is that all manufacturers can import up to 60% of vehicle’s parts, and the remaining 40% of car’s accessories will have to be bought from the local vendors. Now, this policy has dual effect. On one hand it promotes the local vendors and a source of growth for the domestic automobile sector but on the other hand multinational companies like KIA and Toyota complaints regularly of lack of quality standards in the locally made materials. This lack in quality standardization was a big factor in failure of KIA Spectra. The locally made radiator fan, fan belts, seat covers and other engine parts didn’t match the specification of Spectra, hence the after purchase feedback of consumer was really hurting for the company.
Technology:
The KIA Company makes the best international quality standard cars, and for that they continuously keep on updating the technology, according to requirements. KIA Spectra had the most competitive technology of “Electronic Fuel Injection” system. It was so uniquely assembled in the car, that it didn’t need any manual inspection. The entire engine’s tuning job was performed by connecting a lap top with the engine sensors. Now this was such a high-level technology that an ordinary road side mechanic won’t be able to understand or would be unable to seek out even if a minor problem in the engine. The lack of knowledge of road side mechanics due to illiteracy and less awareness resulted in an overall disliking towards this model. Countries like Pakistan, where people are less concerned about the maintenance of their vehicles from the authorized workshops, companies must be very selective while bringing in new technology to its customers. Though the technology used in Spectra was perfect, it was just the inability of mechanics that rose rumors of car’s failure in the automobile sector.
Mission of the Company:
The mission of Dewan Mushtaq Group is to be the finest Organization, and to conduct business responsibly in a straightforward way. Our basic aim is to benefit the customers, employees and shareholders, and to fulfill our commitments to the society. Our hallmark is honesty, initaitive and teamwork of our people, and our ability to respond effectively to change on all aspects of life including technology, culture and environment. We will create a work environment, which motivates, recognizes, and rewards achievements at all levels of the organization, because IN ALLAH WE TRUST & IN PEOPLE WE BELIEVE
We will always conduct ourselves with integrity and strive to be the best Marketing Objectives:
Hyundai Motor Company has been continuously focusing on improving the Customer Satisfaction in order to achieve the objective of entering the Global Top 5 automakers.
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The Product Quality
Hyundai Motor Company has been operating the Overseas Service Quality Center (OSQC) since 1999 in order to improve the product quality. The OSQC allowed us to receive and process realtime field quality information reports through the Internet from all around the globe. This operation is being an incredible source-power in enhancing our product quality and the results are being shown to the world with the recent Initial Quality Study (IQS) survey and consumer reports
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The CS oriented Service Operation
In order to jump up the quality of its service to the next level, Hyundai Motor Company has concentrated on CS oriented After-Sales support. Hyundai Motor Company has developed a new service program and dedicated many efforts on supporting CS oriented Service Operation to the Distributors such as service clinic, assistance to set-up for newly initiated markets and service vehicles for customers. •
High Quality Service
High service quality can be represented by speedy work, reliable servicing and sincere attitude to the customers. All these can be achieved by well-trained service staff working in a well-equipped workshop. This is why training the technicians and providing them the best work environment is so important. Marketing research
1.) Observational Research KIA motors conducted research by observational method, the company representatives simply observed the market, pointed out the market need compared with each and every aspect of the product demanded by the customers, observed what exactly their customer want, their need…. 2.) Survey Research KIA conducted survey through questionnaires and informal interviews. Questionnaires were distributed in different offices and open market and Bazars. They went out in the market to know people’s likings and disliking. 3.) Experimental Research KIA offered their customers a 2o minutes test drive before making their mind whether they want to buy it or not, whether they are comfortable with their newly launched SPECTRA. This way includes in the experimental research because by doing this KIA can get feed back from the customers on the spot, and they can improve their product on the very right time
Research Methods
1.) Questionnaire KIA SPECTRA conducted their feed back by giving questionnaires to collect the primary data from the people. They carefully developed, tested and debugged the questionnaire before they are administrated on large scale. In questionnaires they included both open ended and close ended questions. Close ended questions helped them to find out the specific information of the target market. They gave questionnaires at office areas and get the feed back in positive result but it was failed due to side line workers and roadside workshop. 2.) Story telling When the customers came to Showroom for inspection and maintenance of car, they use to tell that their experience of taking their car to a local mechanic. The complaint of inability of local mechanics to handle KIA’s latest technology was a regular story from customers for DEEWAN Management. Spectra’s fuel consumption was very high. One of their customer shared its experience of Spectra with one of DEEWAN’s manager in these words, “If you want to buy Spectra then you should have your own petrol pump”. Target Market of Spectra: 1.) Segmentation Demographic: KIA Spectra was a luxurious car. The age group that catered was more than 35 years who had income of more than 1 million rupees per year. Males were the major customers the occupation of the customer was Office employees and businessmen. 2.) Segmentation Strategies Niche Market: KIA Spectra observed in the market, the prices of Honda and Toyota cars were very high so they realized that there was demand in the market to come up with such a luxurious car offering lower price than Honda and Toyota so they launched Spectra.
Product development process
KIA imports the free parts of Spectra from Korea and assembles them in Sajawal Karachi then the next step is to take a test drive to be assure to car’s 100% performance. The car which clears this test gets approved with a PDI stamp. Then the next step is to send cars to distributors in different cities, from the distribution centre the car is sold to the end consumer. Import of car parts Assembly of parts in Karachi Test Drive PDI approval car send to distributor sells in the market Consumer property.
Branding policy
Spectra is sub-brand of KIA. KIA’s line extension includes the following brands. • • • • • • • • • •
Sedona Sorento Sportage Rondo Amanti Optima Spectra Spectra5 Rio Rio5
Brand Mix: the brand mix comprising of three brands that were been introduced in Pakistan. • •
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KIA Sportage KIA Classic KIA Spectra
In Pakistan the License has been given to Deewan Farooq Group that they can manufacture three products of KIA, so it is a licensed product.
Product Positioning Map
As you can see in the above mentioned positioning map you can evaluate that Honda and Toyota lies in the1st quadrant that lies among high specifications and high price that indicates that Toyota has luxurious cars but offering high prices for their cars, however Spectra lies in the 4 th quadrant that indicates the lower price with high specified cars, Spectra came in the market with lower price but with luxurious cars as in the competition with Honda and Toyota.
