Honda armoring
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Transcript of Honda armoring
FINAL PROJECTMARKETING STRATEGY
AND COMPETITIVE POSITIONING
METALHEADS
Honda’s Car Protection Facility
MARKETING PLAN
By: Sadiq 110034
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ACKNOWLEDGEMENT
I thank the Almighty for giving me the strength and vision to complete this report on time and
hopefully error free. I dedicate this work to my Friends, who have always been inspiring figures
in my life.
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EXECUTIVE SUMMARY
MetalHeads (Honda’s car protection facility) is a subsidiary of Honda that provides armored
services in Pakistan. Initially the company will serve customers owning Honda Accord and
Honda Civic. As the company mature with time it will offer the services to a broad range of
models. The services provided at MetalHeads are of high quality, providing the customer’s safe,
secure and comfortable journey by building a fort around their car i.e. by making their cars bullet
proofed.
The armored industry has not yet been introduced in Pakistan. People import armored vehicle
from international markets and pay huge sums of money. There is a high demand for armored
vehicles due to the growing terrorism and personal rivalries among the elite and upper social
classes. As there are no other companies offering these services in Pakistan, hence, there will be
no competition for MetalHeads in Pakistan. Due to this monopoly high profit margins can be
charged.
The vision of the company is to expand its workshop facilities to 22 major cities in Pakistan,
establish a research and development department which will search and develop new composite
materials which would be lighter in weight and more economical. MetalHeads also aims to
manufacture its own raw material required for the armoring vehicles.
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Table of Contents:
Acknowledgements........................................................................................................................................4
Executive Summary.......................................................................................................................................5..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5
Company Summary........................................................................................................................................7
Services..........................................................................................................................................................8..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5
Objectives.......................................................................................................................................................9..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5
Mission...........................................................................................................................................................9..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5
Keys to Success..............................................................................................................................................9..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5
Market Summary Analysis...........................................................................................................................10..........................................................................................................................................................................
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SWOT..........................................................................................................................................................11..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5
PEST............................................................................................................................................................12..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5
Market Segmentation...................................................................................................................................13..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5
Target Market Segmentation........................................................................................................................13..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5
Competitive Edge.........................................................................................................................................13..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5
Marketing Strategy.......................................................................................................................................14..........................................................................................................................................................................
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Sales Strategy...............................................................................................................................................14..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5
Sales Forecast.........................................................................................................................................15-16..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5
Management Summary................................................................................................................................17..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5
Personnel Summary.....................................................................................................................................17....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5
Budgeting.....................................................................................................................................................18..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5
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References....................................................................................................................................................19..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5
COMPANY SUMMARY
What we want to offer is something which would satisfy the second level of need for those who
are seeking safety in the current unsafe environment around us. It is merely impossible to have
an upper need satisfied without the satisfaction of lower level of needs. Safety, it is something
which every individual looks forward to; no matter the class or the income level, it is human
tendency to work hard to achieve a secured environment around him. He tries to protect himself
along with his love ones to the extreme of his capacities. MetalHeads would provide complete
service of bullet proofing of selected vehicles to a B6 ballistic protection.
At the start of the firm these services are restricted to certain models but as the company grows
the services would be applicable to more models. Currently, there is a huge market for this
business since there is no firm providing such services in Pakistan. There are many business
people and executives who demand such services constantly for their big fleet of vehicles.
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MetalHeads has a future vision of making these services affordable. MetalHeads would dedicate
its resources for research and development department to seek for new technology of composite
material. The Vision is also to have 180 degree vertical integration to be self-sufficient in all the
raw material required and with R&D advance the technology to make it more efficient and
effective.
COMPANY OWNERSHIP
MetalHeads would be a privately owned limited liability company working as a subsidiary of
Honda. The company would be administrated and owned by Honda and profits would be shared
equally among the partners and shareholders in terms of dividends.
SERVICES
MetalHeads would provide armoring vehicle service according to the international protection
criteria. MetalHeads workshop facility would be established near Tarnol on Fateh Jang road. The
protection service would be a complete transformation to ballistic proof vehicle. At the initial
stage MetalHeads would provide the services to only two selected vehicles. The two models of
vehicle include Honda Accord and Honda Civic. The complete armoring services include the
following tasks which would be provided by MetalHeads as a complete Package.
1. Engine bay protection including battery, radiator and reengineered air scoop.
2. Interior floor bomb blast protection and ballistic armored walls.
3. Bullet proof and ballistic windows.
4. Reinforced door hinges and alignment supports.
5. Run-flat wheel inserts to keep vehicle moving under attack.
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6. Complete ballistic armored firewall which provides maximum protection for vehicle
occupants.
7. Large ballistic armored firewall which provide maximum protection during assault.
Overlaps upholstered to match vehicle interior.
8. Suspension system reinforcement necessary to compensate for the additional weight.
MetalHeads would take 30 days to complete the services.
MetalHeads would follow the following plan for the specified 30 days to render the complete
armoring service:
• Striping of the interior of each car would take four days.
• Chassis analysis and kit assembly would take eight days.
• Fitting of kit inside the car would take five days.
• Fitting of the car interior would be completed in four days.
• Shocks and tires would be installed in one day.
• Testing of the car which includes waterproofing, checking the weight instability due
to ballistic steel plates and welding tested through Ultraviolet light will complete in
two days.
• Adjustments to the car’s weight would be done in a two days time period.
OBJECTIVES
1. MetalHeads aims to provide high quality armoring services to its customers and to
maintain long term profitable relationship.
2. MetalHeads looks forward to constantly grow the sales with time and maintain direct and
indirect costs.
3. After three years MetalHeads would offer armored service which would be applicable to
many vehicles.
MISSION
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Always striving to fulfill our clients and employees needs through clear communication,
teamwork and integrity, with the desire to provide superior quality, technologically advanced
protection and safety services.
KEYS TO SUCCESS
Keys to success for the company will include:
1. Maintaining a reputable and untarnished reputation in the community.
2. Quality care.
3. Competitive pricing.
4. After sales services.
5. Technologically advanced methods.
6. Skilled workforce.
MARKET ANALYSIS SUMMARY
Armored car service is a business that has become a necessity for those who belong to the upper
and upper middle social class. In Pakistan due to the high terrorism rate the selected market
segment is becoming more prone towards uncertain situations and has created a demand for
armored cars. The selected segment includes the rich people who are willing to pay a lot for their
security. There is no other firm which is providing these services in Pakistan the people who
demand these services have no option other than to import armored vehicles which costs them
220 to 250 percent more than what MetalHeads has forecasted. This would create a lot demand
for our services. We did a survey in HIT (heavy industries Taxila) as they are providing
armoring services to only the Government. The managing Director of HIT mentioned that
currently they are only armoring government vehicles and that there are many armed forces
vehicles listed in the waiting list of HIT to get bullet proofed. They do not entertain civilians
hence the businessmen, civilians, foreigners living in Pakistan and others have to import bullet
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proof cars from Dubai and other countries around the world which costs them more then what we
are offering here at MetalHeads.
As there is no other company in Pakistan providing such services so MetalHeads would have a
monopoly and no competition in Pakistan. This will increase the growth and profit margins of
MetalHeads and allow it to achieve maximum forecasted sales in the coming years.
SWOT ANALYSIS
The SWOT analysis of MetalHeads is discussed below:
Strengths
Honda is a reliable and well established brand name in Pakistan.
First company in Pakistan to offer armoring services.
Offered services are highly cost effective for customers.
Low bargaining power of customers.
Weaknesses
Lack of trust due to no previous experience.
No brand loyalty.
High dependency on suppliers.
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Opportunities
High demand rate.
Cheap skilled labor availability.
High growth in terrorism rate.
Threats
Government regulation.
High bargaining power of suppliers.
HIT may start civil vehicle armoring.
PEST ANALYSIS
Political Situation
• Political situation in Pakistan currently is uncertain. Such projects might face retaliation
from government institutions e.g. Heavy Industries Taxila is backed by the government
and that might serve as barrier for MetalHeads to easily break into the armoring services,
as these services are being provided by HIT but on limited basis.
Economic Situation
• Economic condition of Pakistan faces many difficulties. High dependency on foreign aid
and weak industrial output has brought the Pakistan’s rupee worth down drastically.
Commodity prices are therefore rising on daily basis and imports are imposed with heavy
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taxes. In this situation MetalHeads will have to find out ways to acquire raw material
from within the country to cut extra costs on imports.
Social Situation
• Investment in car armoring services should not be facing any hurdles from the country’s
social classes. But it could create inferiority complex among the classes who would not
be able to afford such expensive services. Secondly, it might raise issues related to the
environment and therefore environmentalists might take some action. MetalHeads will
have to portray itself as a company which provides protection, not just to the elite of the
country but in fact it is working to minimize the costs of such services (through R&D) so
that majority of the people could take afford such services.
Technological Situation
• Pakistan lacks proper infrastructure for such services to be fully operational. A lot of
training for the professionals would be necessary to work on such a project.
MARKET SEGMENTATION
On the basis of demographical, geographical, psychographic and behavioral factors we have
segmented our market into following segments:
There are no geographical boundaries to our segmentation but initially we will be focusing on
Pakistan only.
Area: Pakistan
Occupation: Businessmen, politicians, armed forces personals.
Life style: Landlords, VIP’s
Social class: Upper middle, upper and elite.
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TARGET MARKET SEGMENT STRATEGY
The target market for MetalHeads is all those who want to travel by road safe and secure and
those who are willing and able to get their cars bullet proofed. For the first three years the target
market is restricted to those who want to buy the services for Honda Accord and Honda Civic.
The target market chunk would be increased after three years when MetalHeads would offer the
services which would be applicable to many other models.
COMPETITIVE EDGE
In a myopic view MetalHeads is a monopoly for Pakistan. But in the broader vision the
completion lies with the international market. The primary competitive edge that MetalHeads has
is its affordable prices further more since it is established in Pakistan it would provide complete
after sales services for the targeted customers. MetalHeads will also provide life time warranty
for its services.
MARKETING STRATEGY
In order to market our services we will send brochures to the government offices, armed forces
and other political figures. We will also advertise in “Pakistan and gulf Economist” and other
business magazines to communicate our unique services to our target market. We will also use
direct marketing through our contacts and word-of-mouth marketing.
SALES STRATEGY
MetalHeads would sell their services by using the direct sale approach. The owners of the
company would personally contact all the customers in the target market to achieve the
forecasted sales. The heads would also use their personal contacts to communicate the
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advantages to create awareness among the customers. Furthermore a selling department would
provide all the necessary information in the market and create long term profitable relationship
with the existing customers and attract new ones to achieve long term sales growth.
SALES FORECAST
Direct unit costs reflect direct costs in producing the items but do not including labor and other
expenses for providing the service. The direct unit cost (only raw material) which will be
incurred by MetalHeads for the two initially selected models is as below.
1. Honda Accord
Sr. No Part description Unit Price Quantity Total Price
1 Armox 500 B6 Armored steel
plates ( size 5x2 meter )
Rs. 350,100 4 Rs. 1,400,400
2 Armass B6 bullet proof glass - Complete set Rs. 1,100,000
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3 Bilstein heavy duty Shocks Rs. 17,500 4 Rs. 70,000
4 Firestone Run flat tires Rs. 15,000 4 Rs. 60,000
5 Firestone Run flat inserts Rs. 7,000 4 Rs. 28,000
Rs. 2,65,8400
Table: 1
2. Honda Civic
Sr. No Part description Unit Price Quantity Total Price
1 Armox 500 B6 Armored steel
plates ( size 5x2 meter )
Rs. 220,100 4 Rs. 880,400
2 Armass B6 bullet proof glass - Complete set Rs. 800,000
3 Bilstein heavy duty Shocks Rs. 14,000 4 Rs. 56,000
4 Firestone Run flat tires Rs. 15,000 4 Rs. 60,000
5 Firestone Run flat inserts Rs. 7,000 4 Rs. 28,000
Rs. 1,824,400
Table: 2
Sales ForecastUnit Sales Year 1 Year 2 Year 3Honda Accord 35 37 40Honda Civic 18 21 23Total Unit Sales 53 68 63Unit Prices Year 1 Year 2 Year 3Honda Accord Rs. 2,658,400 Rs. 2,658,400 Rs. 2,658,400Honda Civic Rs. 1,824,400 Rs. 1,824,400 Rs. 1,824,400Sales Year 1 Year 2 Year 3Honda Accord Rs. 93,044,000 Rs. 98,360,800 Rs. 106,336,000
Honda Civic Rs. 32,839,200 Rs. 38,312,400 Rs. 41,961,200Total Sales Rs. 1,258,832,00 Rs. 1,366,732,00 Rs. 14,829,7200
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Direct Unit Costs Year 1 Year 2 Year 3Honda Accord Rs. 2,000,000 Rs. 2,000,000 Rs. 2,000,000Honda Civic Rs. 1,000,000 Rs. 1,000,000 Rs. 1,000,000Direct Cost of Sales Year 1 Year 2 Year 3Honda Accord Rs.70,000,000 Rs.74,000,000 Rs.80,000,000Honda Civic Rs. 1,800,000 Rs. 2,100,000 Rs. 2,300,000Subtotal Direct Cost of Sales
Rs. 71,800,000 Rs. 76,100,000 Rs. 82,300,000
Table: 3
Year 1 Year 2 Year 30
20,000,00040,000,00060,000,00080,000,000
100,000,000120,000,000140,000,000160,000,000
Honda CivicHonda Accord
Graph: 1 ‘Sale by Yea
MANAGEMENT SUMMARY
MetalHeads would be comprised of 20 employees out of which five would be responsible for the
complete management of the company. Four managers who are also the owner's of the company
would dedicate their 50 percent of time to the administrative matters and in the future it would be
reduced after forming a complete Administrative department. The last manager would be the
manager of sales department with team of three employees working under the sales manager.
Most of the sales would be through personal selling and the sales manager would be responsible
for making the forecasted sales. Other employees include two automobile fitters, five welders,
two mechanics and one electrician all these employees would be professional technicians; they
are responsible for converting an ordinary vehicle into armored protected vehicle and these
employees would be supervised in detail by two Techtronic Engineers.
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PERSONNEL PLAN
For the first year all of the operations and administrative issues would be handled by the owners
of the company. All the experience acquired in the first year would be recorded and with the help
of all those experiences an administration department would be established in the 2nd year with
proper job descriptions. After establishing the administration department the administrative
burden would decrease from the owners and will allow them to focus on creating sales for the
company.
The production employees would be supervised and closely monitored by two supervisors to
ensure the quality of the services. All the employees and the owners of the company would work
for 48 hours a week.
BUDGETING
Start-up Funding Start-up Expenses to Fund Rs. 390,000 Start-up Assets to Fund Rs. 17,640,000 Total Funding Required Rs. 18,030,000 Assets Non-cash Assets from Start-up Rs. 20,640,000 Cash Requirements from Start-up Rs. 2,000,000 Additional Cash Raised Rs. 1,970,000 Cash Balance on Starting Date Rs. 3,970,000 Total Assets Rs. 24,610,000 Liabilities and Capital Liabilities
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Current Borrowing Rs. 0 Long-term Liabilities Rs. 0 Other Current Liabilities (interest-free) Rs. 0 Total Liabilities Rs. 0 Capital Planned Investment Owners (Honda) Rs. 20,000,000 Investor Rs. 0 Additional Investment Requirement Rs. 0 Total Planned Investment Rs. 20,000,000
Loss at Start-up (Start-up Expenses) (Rs. 390,000) Total Capital Rs. 19,610,000 Total Capital and Liabilities Rs. 19,610,000 Total Funding Rs. 20,000,000
REFERENCES
High Protection Company 2011, USA, Build your own armored car, viewed 12 April 2011,
< http://www.highprotectioncompany.com/>
Honda Motors 2011, Pakistan, viewed on 12 April 2011,
<http://www.honda.com.pk/>
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