19th Global marketing competition 2014- Spain
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Transcript of 19th Global marketing competition 2014- Spain
Global Marketing Competition 2014d
GIM MOTORS
PRESENTATION
2
1
2
3
MARKET ENTRY STRATEGY
KEY STRATEGIES AND COMPETITOR ANALYSIS
CORPORATE STRATEGY
AGENDA
4
5
AVOIDABLE SETBACKS
GLOBAL MARKETING COMPETITION 2014
FUTURE CHALLENGES
3
Corporate Strategy Inspiration
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
GLOBAL MARKETING COMPETITION 2014
Most ethical company for last five consecutive
years by Ethisphere
Institute
2nd largest US based automaker,
5th largest in Europe and 2nd largest in World
Sustainable Brand equity for over 100
years
Customer-Centric
Approach rather than just profit-oriented
4
Mission,Vision and Culture of GIM MOTORS
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
GLOBAL MARKETING COMPETITION 2014
Most admired by our customers, employees, business partners and shareholders for the experience and value they enjoy from being with us.
To be passionate in anticipating and providing the best vehicles and experiences that excite our customers globally
Integrity, Accountability, Customer, Innovation, Concern for environment, Passion for excellence
5
Our Corporate Strategy Guidelines at a Glance:
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
GLOBAL MARKETING COMPETITION 2014
Focus on developing cars at
a faster rate to serve every
market segment
Establish economies of scale with an emphasis
on profitability.
Focus heavily on market
penetration and product
development and diversification
Focus on minimizing the finished goods
inventory as much as possible by
understanding PLC
Focus on strong dealer
relationships for a long term
Using the advertising mediums
effectively to improve
awareness
6
Market Entry Strategy Inspiration
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks Detroit : The World’s
automobile capital
“Ford of Europe” Concept
Market Entry with hatchbacks for Europe
Market- Ford Escort, Ford Capri
Market Entry with Mercury
series in “midsize” and
“full-size” sedans
Different Market-
Different Series entry strategy
7
Entry level Strategy on Headquarters and Segments:
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
• Decision: Headquarters set-up in North America
• Reasons: Detroit, the motor city , where the big 3 are located, has world’s best suppliers so our purchase managers can negotiate better and keep close relations with suppliers. Our Marketing team can also have a close look at strategies which the big 3 follow. Also, the company got the best possible talent for headquarters.
• Cost of dismissing a production personnel were significantly low in NA market as compared to other two markets
• Explanation: As a rule of thumb,one person at headquarter is counted for every six workers in assembly plants.
Competitor’s Strategies: All other competitors were also headquartered in NA
8
Market Entry for Various segments Vs Our Competitors:
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
Decision : (Geographical segmentation)S1 and S2 in SE while S3 and S4 were manufactured in NA. As per Ford Strategy, we entered markets with separate series and aim was to maximise sales with one series in one market.
Reasons: Hatchbacks are in high demand in Europe while the American consumers are fond of Sedans
Explanation: Transportation cost per vehicle from plants to dealer points would have increased if vehicle was manufactured in region where the demand was low
9
Entry level strategy at a glance:
GLOBAL MARKETING COMPETITION 2014
Always have 8 models in market to give a wide range to customers across diesel and petrol variants.
Consistent high margins to dealers among competitors to push the product along with other advertising media engines.
Designs were chosen precisely surveying various vehicles in similar segments available in production country .
Consistent investment on market intelligence surveys.
Investment in racing team to have TOP OF MIND AWARENESS for corporate brand.
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
10
Production Organization Inspiration: Toyota Production System
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable SetbacksEliminate these wastes (Muda)
Waste of over production (largest waste)
Waste of time on hand (waiting) Waste of transportation Waste of processing itself Waste of stock at hand Waste of movement Waste of making defective
products
Underlying Principles
World’s largest
Production in cars
Design out Muri (overburden), Avoid Mura(inconsistency) and eliminate muda(waste)
Continuous improvement
Respect for individuals and teamwork
11
Production Organization:
GLOBAL MARKETING COMPETITION 2014
A unit in Production
Life cycle of the version
Design RatingsCompetitors
Full Capacity Utilization of Assembly Plants
Mapping demand for all versions for a car for TG
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
Employee Relations were given prime importance
12
Shifts Rationale:
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
Zero waste of production capability
13
Competitive Analysis of Shifts and Employee Relations
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
Year 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 829000
30000
31000
32000
33000
34000
35000
EMPLOYEE RELATIONS IN NA PLANTS
SALARY-NA1SALARY-NA2UNIVERSE AVG
Employee Motivation to
boost performance-Incentives of
15% for exceeding
10% targets
Shifts and Production capacity utilization
14
Pricing rationale:
GLOBAL MARKETING COMPETITION 2014
Cost Plus pricing
Based on lifecycle of the
product
Discounts based on previous year
sales
An eye on average and
competitor prices
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
15
Cost plus pricing Rationale
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
• Multiplication factor given to cover intangible costs such as Overheads, advertising, market research, R&D etc.
• Rebates worth 400-500 Euros were given for a period of 4-5 months post launch to keep consumer demand intact and get competitive advantage
16
Competitors Analysis of Pricing and Rebates Schemes
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
• Duration of rebates was kept competitive
• Competitors took an advantage by dropping the prices significantly and increasing the Rebate drastically(Team 3 and Team 6)
• Advertising spend(model-wise) was important for generating demand (Explained later)
17
Distribution : Dealer evolution Inspiration
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
Biggest Car dealer in US
Known for Strategic locations & good attitudes of
Sales Staff
Customer Service score is very high
Wide reach- 267 franchises in
around 15 states
18
Distribution : Dealer evolution
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
Strong Distribution Network in the Target Markets
Dealer Satisfaction
achieved with multiple
variants
Good Customer Service at the dealer
points
Competitive Dealer
Margins
19
Distribution Strategies: We V/s Our Competitors
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
Year 3 Year 4 Year 5 Year 6 Year 7 Year 80
500
1000
1500
2000
2500
1600 1650 1700 1750 1750 1700
501
1000 1000 900 850600 550
17002000
505 600 510 510 510 501
No of Dealers -NA Region
1 2 3 6
20
Distribution Strategies: We V/s Our Competitors
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
21
Product Development
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
Product Development
8 versions per model
Secondary Research on
Dimensions of models for
respective regions
Minimizing finished goods
inventory
No. of Diesel/Gasoline versions Based on demand of
engine type in a market
22
Competitors Vs Us in Product Development
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
23
Positioning
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
For our customers who are valuable than anything, GIM Motors Offers Automobile products and services which are superior to
others
Positioning Strategy-More
for More
Benefits Offered:
• Maximum Warranty Offered• Better Customer service at dealer
points• High number of dealer points in each
geographic location• Cashbacks on purchase for a longer
period compared to competitors
24
Market Penetration efforts:
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
Penetrating the maximum market
using the all-versions launch
strategy
An eye on the purchasing power
parity of the Target Segment
Snatching the Share from our competitors in the competing model by playing on prices and
promotions
25
Market Penetration efforts:
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
26
Market Penetration vs Our Competitors
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
Y3 Y4 Y5 Y6 Y7 Y80.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
100.00
Market Penetration in SE Market
1 2 3 6 Est. Companies
27
Promotional Strategies Inspiration: General Motors
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
Among top 5 Ad spenders in US and highest in automobile
3% Ad spending by
percentage of sales method
Less/stop spending on
mediums which cannot give sales-
GM stopped spending money on Facebook Ads
in 2012
1267.3
184.5175.8142.522.519.4
1337.2
AD SPEND BY GENERAL MOTORS
TV MAGAZINES INTERNET NEWSPAPERSRADIO OUTDOOR Mainstream Press
28
Promotional Strategies
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
Brand Ads according to
Target segment
Model advertising
keeping in mind competitor’s
spend in Target market
Always keep racing Car to build Top of
Mind awareness
Modification in advertising budget according to model
ratings and demand in market
after launch
Advertising Budget
allocated as 2-3% of Gross
sales(Percentage of sales method)
29
Media Vehicles Selection: Maximum Exposure in Target Market
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
30
Competitive Analysis on Ads Distribution
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks 1 2 3 60
500
1000
1500
2000
2500
3000
3500
Model S3-Number of ADs in NA Region
Year 3 Year 4 Year 5 Year 6 Year 7 Year 80
500
1000
1500
2000
2500
NA REGION INVESTMENT IN BRANDING-MAINSTREAM PRESS
1 2 3 6
31
Competitors at a glance
GLOBAL MARKETING COMPETITION 2014
Corporate Strategy
Key Strategies and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
•Mismanaged working capital leading to high interest expenses on overdraft amount
•Advertising spend was not mapped and budgeted properly
•Low investment in production capabilities
•Low design ratings leading to low demand generation
Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
-50000000000-40000000000-30000000000
-20000000000
-100000000000
1000000000020000000000
30000000000
Working Capital Management
1 2 3 6
32GLOBAL MARKETING COMPETITION 2014
Avoidable Setbacks
Corporate Strategy
Key Decisions and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
S4 Segment potential not tapped
Low Ratings as compared to other
segments- Car Design
Rating of S4A-6.33 Rating of S4B-5.05
Inventory Pile Up due to wrong
demand estimation
Our strategy of full capacity
utilization(Based on TPM) of plants didn’t worked well for this
segment
33GLOBAL MARKETING COMPETITION 2014
Avoidable Setbacks
Corporate Strategy
Key Decisions and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
Year 4 Year 5 Year 6 Year 7 Year 80
50000
100000
150000
200000
250000
300000
350000
400000
Sales of S4
Year 4 Year 5 Year 6 Year 7 Year 80
200000
400000
600000
800000
1000000
1200000
1400000
S4 Inventory
34GLOBAL MARKETING COMPETITION 2014
Avoidable Setbacks
Corporate Strategy
Key Decisions and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
Negative YOY Sales growth(Year 7 & Year 8)
Not Coming up with new models in year 7 and year 8 and using the same models for a long period of time for which prices were to be
reduced due to declining phase of life cycle of the model, hence sales were affected
Dealer satisfaction was affected in year 7 due to a large increase in dealer margin by our competitor and coming with good designs
35GLOBAL MARKETING COMPETITION 2014
Areas of Concern going further:
Corporate Strategy
Key Decisions and Competitor Analysis
Entry Strategy
Future Challenges
Avoidable Setbacks
New models in other segments shall also be launched at a faster phase to avoid impact of falling sales of models in mature/decline phase of
lifecycle
S4 Segment Penetration to be improved. Better Secondary research needs to be done before launching new S4 model
Dealer profitability has been affected in last 2 years leading to loss for the dealers leading to decreasing dealer satisfaction and hence
impacting sales.
Imitation of our strategies by competitors leading to low differentiation . E.g: Imitation of dealer margins by competitors – Focus on creating intangible diffrentiation
36
Thank You For Your Attention.