Honda Final Report 2010 2

Final Report of Advertizing and Promotion of New Product

Final End Term Project Submitted in partial satisfaction of the requirements for

MKT-542

LAUNCH OF CBR – 150 EURO 2

By

Name Roll number

Ahsan Saeed 093109

Muhammad Asad Ullah 101408

Umair Gilani 093173

Naveed Anjum Basra 091416

Azhar Tufail Bhatti 093175

__________________________________________

Submitted to:

Project Facilitator and Respected Teacher: Mohammad Anis Sajid

& Respected guests

Seminars in Marketing

F IRST EXPERIENCE AT ATLAS HONDA

By

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AHSAN SAEED

093109__________________________________________

Acknowledgement


By

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AHSAN SAEED

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(In the name of Allah most merciful and beneficent).


By

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AHSAN SAEED

093109__________________________________________

“ Inspirat ion and Mot ivat ion always plays a key role in the success of

any project . ”


By

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AHSAN SAEED

093109__________________________________________


By

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AHSAN SAEED

093109__________________________________________

We are one of those few fortunate students whose path is

enl ightened by expert ise and competent guidance of our teachers,


By

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AHSAN SAEED

093109__________________________________________

parents and At las Honda Management for complet ing this Market ing

Project successful ly.


By

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AHSAN SAEED

093109__________________________________________

We are thankful to al l our respected teachers for making us capable

of doing this Project and providing us strong bases to enter the


By

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AHSAN SAEED

093109__________________________________________

professional wor ld. Last but not least . We are also grateful to Mr.

Rashin Amin (Company Secretary ) , Mr. Haf iz Waseem, Mr. Imran


By

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AHSAN SAEED

093109__________________________________________

Khan and Mr Adnan of At las Honda Limited and Sir Mohmmad Anis


By

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AHSAN SAEED

093109__________________________________________

Saj id who helped us to complete this Project and increased our

knowledge about Market ing and the corporate world.


By

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AHSAN SAEED

093109__________________________________________

Ahsan Saeed M. Asadullah Umair Gilani Naveed Anjum Azhar Tufail


By

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AHSAN SAEED

093109__________________________________________


By

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AHSAN SAEED

093109__________________________________________

Seminars in Marketing/Brand Management/Launch of CBR 150 Euro II

EXECUTIVE SUMMARY

In our Course Seminars in Marketing Mkt – 542

GROUP VI / MAY 2012


TABLE OF CONTENTS

INTERNSHIP OBJECTIVE SCOPE AND PURPOSE 1

Objective 1

Scope 1

Purpose 1

INTRODUCTION OF THE COMPANY 2

Vision 2

Mission 3

COMPANY HIERARCHY 4

COMPANY CULTURE 7

3 Joys and Respect for the individual 7

Merit, Equality and Diversity 7

Job Security and Sustainability 7

Social interaction and feeling of ownership 7

ATLAS HONDA LIMITED BY DEPARTMENTALIZATION 8

Human Resource Department 8

Administration 9

Corporate Affairs 10

Stores Department 10

Finance Department 11

Planning Production and Control (PPC) 12

Logistics/ Vendor Procurement 12

TABLE OF CONTENTS

GROUP VI / MAY 2012


Maintenance Department 13

Quality Assurance/Final Inspection 13

Casting Plant 14

Engine Plant 14

Assembly Plant 14

ED Paints: 15

Manufacturing Plant 15

Information Technology 15

Sales/Spare Parts/Inst. Sales 16

Services and customer care and training 16

JOB DESCRIPTION 17

Finance Executive of Sales 17

Finance Executive of Spare Parts Department (SPD) 17

Institutional Sales Executive 17

Finance Manager 18

S.W.O.T OF FINANCE DEPARTMENT OF ATLAS HONDA HEAD OFFICE 19

Strengths 19

Weaknesses 19

Opportunities 19

Threats 19

CONCLUSION 20

GROUP VI / MAY 2012


OBJECTIVE SCOPE AND PURPOSE

OBJECTIVE

Launch of a new product Honda CBR 150 Euro2. We have done extensive

marketing research and then designed CBR 150 Euro2. According to our

research and product we will try to design such a marketing promotion strategy

which will ensure maximum market penetration (coverage & awareness),

market share and sustainability of our market leader status, in line with the

company’s goals and current marketing strategy.

SCOPE

Scope of our project lies within the geographical boundaries of Pakistan. Our

focus will be on the launch of new product. Honda CBR 150 Euro 2. Keep are

new marketing strategy in line with the company’s current marketing strategy.

PURPOSE

To design a successful marketing campaign, which will ensure the best launch of our product and facilitate our objectives of the project. (maximum market penetration, coverage & awareness, market share and sustainability of our market leader status).

This Project should give us a detailed view about our new launch strategies, Promotion techniques, promotion budget allocation and evaluation techniques.

GROUP VI / MAY 2012 ~ 1 ~


INTRODUCTION OF THE COMPANY

ATLAS HONDA LIMITED (AHL) was incorporated by the name of Atlas Autos as public limited company in 1962 and today AHL is the outcome of slow and steady, unremitting and consistent evolution, spanning to almost a period of five decades. AHL has been working in close collaboration with Honda Motor Company limited Japan to provide its customer high quality of products and services and maintaining its position as a market leader. ATLAS HONDA LIMITED (AHL) is a joint venture between the Atlas Group and Honda Motor Co. Ltd., Japan. The company was created by the merger of Panjdarya Limited and Atlas Autos Ltd. in 1988. Both these motorcycle manufacturing concerns were established by the Atlas Group

VISION

Market Leader in motorcycle industry

as a global competitive center of

Production and exports.

AHL manufactures and markets Honda motorcycles in collaboration with Honda Motor Company. The Company also manufactures various hi-tech components in-house in collaboration with leading parts manufacturers like Showa Atsumitech, Nippon Denso and Toyo Denso. Honda motorcycles are by far the largest selling motorcycles in the country with an unmatched reputation for high quality, reliability and after-sales-service.

Atlas Honda Limited does not cater local market but also exports to a few neighboring countries like Bangladesh, Sri Lanka, Middle East, Nepal and Afghanistan. The company has not just met the quality standards of its customers but has always been focusing on the quality and compliance standards for its stake holders. AHL has won many awards through ICAP, ICMAP and KSE. It also acquired ISO 14001-2004 Environment Certification to help develop and green society. It implements SAP, the leading ERP system to provide the company a great competitive edge by cumulating all the company’s departments under one centralized system.

AHL has undertaken to develop local manufacturing capabilities to the highest, economically feasible level. While a major role in localization has been assigned to vendor industries, Atlas has the country’s largest in-house manufacturing capability at its Karachi and Sheikhupura plants. To support the production facilities, the company has established an R&D wing and tool making facilities through CAD/CAM which are growing rapidly in size and function as the company expands. Atlas has managed to execute 12 Joint Venture/Technical Assistance Agreements between local vendors and



foreign manufacturers for transfer of technology. Besides, Atlas has directly executed 9 Joint Venture/Technical Assistance Agreements other than Honda.

ATLAS HONDA LIMITED (AHL) is a part of Atlas Group of Companies having 12 more sister companies. The Board of Directors includes the extraordinary Mr. Yusuf Shirazi as a Chairman; the man himself is the founder member of organizations like KSE, LSE and ICCI. The present CEO of the company is Mr. Saquib H. Shirazi, who is member of board multiple other well-known companies.

MISSION

A dynamic growth oriented company through market leadership, excellence in quality

and

Service and maximizing export, ensuring attractive returns to equity holders,

Rewarding associates according to their ability and performance,

Fostering a network of engineers and researchers

Ensuing unique contribution to the development of the industry,

Customer satisfaction and protection of the environment by producing emission friendly

Green products as a good corporate citizen fulfilling its social responsibilities in all

respects.



COMPANY HIERARCHY


BOARD OF DIRECTORS

HISAO

KOBAYASHI

DIRECTOR

KOJI

TAKAMATSU

DIRECTOR

NURUL

HODA

DIRECTOR

SANAULLA

H

QURESHI

DIRECTOR

SHERALI

MUNDRWALA

DIRECTOR

TAKASHI

NAGAI

DIRECTOR

YUSUF H. SHIRAZI

CHAIRMAN

RASHID AMIN

COMPANY SECRETARY

SAQUIB H. SHIRAZI

C.E.O.



MANAGEMENT COMMITTEE

JAVED AFGANI

G.M. Marketing

KOJI TAKAMATS

U

G.M. R&D

M. KHALID

AZIZ

G.M. Plants

AMIR ALI BAWA

G.M.Plann&Comerrc

ial

SHAKEEL MIRZA

G.M. Supply Chain

AFAQ AHMED

G.M. R&D and

Projects

SAQUIB H. SHIRAZI

C.E.O.

SULTAN AHMED

G.M.Quality Assurance

HISAO KOBAYASH

I Vice President Technical

SOHAIL AHMED

C.F.O.

NURUL HUDA

Vice President

MKT

MUSTAQ ALAM

G.M. I.T.

RAZI UR RAHMAN

G.M. H.R.


COMPANY CULTURE

The company has a very strong organizational culture. AHL is always concerned about improving the organizational behavior and enhance its Ethical standards. Some of its cultural development policy and procedures are as follows.

3 Joys and Respect for the individual

Atlas Honda Ltd. operates under the basic principles of "Respect for the individual" and "The Three Joys" - commonly expressed as The Joy of Buying, The Joy of Selling and The Joy of Creating.

ATLAS HONDA LIMITED BY DEPARTMENTALIZATION

AHL organizational structure has following main departments that came into my observation during my internship.

Human Resource Department Administration Corporate Affairs Stores Finance PPC Logistics/ Vendor Procurement Maintenance QA/ Final Inspection Casting Plant Engine Plant Assembly Plant Manufacturing Plant IT Sales/ Spare Parts/ Institution Sales Service /Customer Care & Training



S.W.O.T OF ATLAS HONDA

STRENGTHS The SAP system software provides Atlas Honda a centralized database

system which provide one click excess to reports no matter where; Lahore Karachi or Sheikhupura. It also integrates Sales, Finance, Supply chain and dispatch department effectively.

Qualified and well trained staff Biggest sales network Best production plant in Pakistan Financial strong Biggest market share People trusted products High quality products Customer care Customized products Brand image Availability of spare parts throughout Pakistan Best logistics ISO certified Highest resale value High after sale services

WEAKNESSES Poor interaction with end user (final Customer). Dealers are still able to black market products. High price products Political instability Low per caspita income Less overhead of competitors Increasing oil prices High inflation Honda is expensive to buy and maintain then its counterpart rivals.

OPPORTUNITIES



Currently dealing in CD 70, CG 125(Deluxe and normal) and CD100 can improve its market line and introduce new functions like self-start etc.

The bottle neck is the supply not demand and increase in capacity will directly affect revenue.

Industry expansion Technology redesign Strong Position Market Integration opening up Opportunity growing in other countries Newly developed Areas/Markets (e.g. Gawader) Favorable govt. policies Big Market Economy is expanding Karachi, a segment which has tremendous potential for growth and

profitability

THREATS More than 80 % of parts are manufactured in Pakistan therefore any change

in government policy and taxes directly affect cost. All plants are working at full capacity on 24 hours basis and still markets

demand cannot be fulfilled. Chinese cheaper products challenges Strong competition from competitors in near future Instability of Government High rate of Taxation Bad infrastructure



Company Goals

Increase Customer Making Brand Perception as a “TOP OF MIND” Increase distribution Recruit New Distribution New Town Openings

Core Competency

As being leader in the market our core competency is quality. We are producing 98% parts used in motor bikes within the country with great ease.

Competitive Advantage

The Company will strive to establish strengthened relationship with suppliers and

distributors for the satisfaction of customers’ standard.



Major Competitor

External Competitors:

Suzuki Yamaha Kawasaki Pak hero Metro Eagle Diamond Treat

Internal Competitors:

Honda CD70 Honda CG125 Honda CD100 Honda CG 125 Deluxe

GROUP VI / MAY 2012 ~ 10 ~


Customer Analysis

Honda is providing an ease in handling convenience to the customers. In this fast paced life, time is getting shorter and shrinking. People’s life style is changing towards CONVENIENCE IN HANDLING. Buying cost may be not much important for some people then the retaining cost. Honda sales and service centers throughout the country gives high quality of services to their valued customers at normal cost and with genuine spare parts easily available at any town of a city.

Demographics

Honda’s Customers are: Students (Between the age group 18 to 26) Professionals & Youngsters (Between the age 26 to 35)

Social Class

Honda’s Customers belongs to the following social class :

ACC-A (Upper Upper) ACC-C (Upper Middle)

Our slogan

For Honda to remain Honda, and for everyone to realize their aspirations, we must

believe in "The Power of Dreams"

GROUP VI / MAY 2012 ~ 11 ~


PORTFOLIO ANALYSIS

A portfolio analysis method that evaluates the company’s strategic business units in A portfolio analysis method that evaluates the company’s strategic business units in terms of its market share. SBUs are classified as star, cash cow , question mark and terms of its market share. SBUs are classified as star, cash cow , question mark and dog.Using dog.Using Boston Consulting Group (BCG} Boston Consulting Group (BCG} approachapproach, , a company classified its SBUs a company classified its SBUs or products according to growth share matrix.or products according to growth share matrix.

Vertical axis-market growth rate provides a measure of market attractiveness.Vertical axis-market growth rate provides a measure of market attractiveness.

Horizontal axis- relative market share serve as a measure of company strength inHorizontal axis- relative market share serve as a measure of company strength in the market.the market.

GROUP VI / MAY 2012 ~ 12 ~

BCG MATRIXRelative market share

HIGH

LOWH

IGHLOW

Mark

et

gro

wth

ra

te


Stars

Stars are high growth. High market share businesses or products. Company send Stars are high growth. High market share businesses or products. Company send lot of resources to make them cash cow.lot of resources to make them cash cow.

CG 125 is the star product of atlas Honda in Pakistan.

Question Mark

Question mark is high growth but low share businesses or products. These products Question mark is high growth but low share businesses or products. These products are introductory stage.are introductory stage.

CBR 150 EURO 2 will be the question mark product of Atlas Honda. CBR 150 EURO 2 will be the question mark product of Atlas Honda.

Cash CowCash Cows are low growth, high businesses or products. Company cost is less and Cash Cows are low growth, high businesses or products. Company cost is less and profit margin is high, because brand is strong position in target market.profit margin is high, because brand is strong position in target market.

CD 70 is currently the cash cow of Atlas Honda. CD 70 is currently the cash cow of Atlas Honda.

Dog

Dogs are low-growth, low share businesses or products Dogs are low-growth, low share businesses or products

CD 100 is the dog product of Honda Atlas Pakistan.CD 100 is the dog product of Honda Atlas Pakistan.

GROUP VI / MAY 2012 ~ 13 ~


NEW PRODUCT DEVELOPMENT

• New Product Development Process:

– Stage 1: Idea Generation

• Internal idea sources:

– R & D

• External idea sources:

Customers, competitors, distributors, suppliers– Stage 2: Idea Screening

• Product development costs increase substantially in later stages.

• Ideas are evaluated against criteria; most are eliminated.

– Stage 3: Concept Development and Testing

• Product concepts provide detailed versions of new product ideas.

• Concept tests ask target consumers to evaluate product concepts.

– Stage 4: Marketing Strategy Development

• Strategy statements describe:

– target market, product positioning, and sales, share, and profit goals for the first few years, Pest analysis, segmentation, targeting, positioning, differentiation ,customer needs and wants, social, cultural, ethics,

– Product price, distribution, and marketing budget for the first year.

– Long-run sales and profit goals and the marketing mix strategy.

GROUP VI / MAY 2012 ~ 14 ~


GROUP VI / MAY 2012 ~ 15 ~


Stage 5: Business Analysis• Sales, cost, and profit projections

– Stage 6: Product Development

• Prototype development and testing

– Stage 7: Test Marketing

Alpha testing and Beta testing

Stage 8: Commercialization

On special event such as 14 August, 23rd March etc.

Media Plan For Launch of CBR 150 Euro II:

Market Analysis of new product:Honda occupies the major portion of market share, giving coverage across whole Pakistan. Being a market leader. The new product launched is intended to occupy the Gap in market for bigger bikes.

Internal analysis:

Strengths:

The main benefit to the new launched CBR 150 is the current image of Atlas Honda as the most advance technological manufacturer. It also has a huge competitive advantage of its already created goodwill in the market, being a market leader in motorbike industry of Pakistan.

The product features of new CBR 150 are the competitive advantage:

150 cc CBR Euro 2 technology. Ignition start 5 gears transmission Muscular attractive modern design Rear disc Brakes Mileage (60km/liter) Environment friendly exhaust emissions

GROUP VI / MAY 2012 ~ 16 ~


Availability in different range of colors ( metallic black ,metallic gray, metallic red ,metallic golden)

Economical and affordable

Weakness:

The main weakness in the new product before launch is it lies in the question mark category of BCG matrix and will require the expensive resources of the company which could be allocated to its star products.

External Analysis:

Opportunities:

The product is in new market space with growth opportunities, only single direct competitor exists to which Honda has a technological and quality over run. Limits are stretched to new technological advancements in motorbike engines in existing market.

Threats:Low cost Chinese models and local brands are threats to the new product.

Target market:

Our target market will be age group of 18-45 including medium and upper classes.

Target audience:

Our target audience will be students, professionals, bikers, speed lovers, urban areas and people of northern areas where CG 125 hold better ground than CD 70 and competitors like Suzuki are trying to penetrate in existing market Gap.

Media Objectives:

Reach: our focus group will be male gender and target audience will be people including sport lovers, thrill lovers, action films fans, reality shows audience, news audience and youth oriented TV shows.

Coverage: our coverage will be throughout Pakistan including all major cities and urban areas. Prime target will be provincial capitals.

Awareness: awareness will be created about the distinctive and competitive technological features of the new Honda CBR 150 (i.e. its new robust sound, Speed, Economy aero dynamic

GROUP VI / MAY 2012 ~ 17 ~


muscular design, environment friendly exhaust, and introduction of rear disk breaks for the the first time in Pakistan).

Trial: 2 years old license holder can have trials of the product at the specified 5S classified distributers.

Media Strategy and Implementation:

Media mix: Following medium will be used to generate awareness among target segment

Newspaper AdvertisementsTV commercialsBroachersEvent sponsorshipsHoardingsShop boards and displaysInternet

NEWS PAPER ADVERTISING:

DAWN NEWS PAPER

We will advertise in DAWN as follow as our product is a high involvement product and dawn has the most vast reach with in the country target mostly middle upper and upper classes.

GROUP VI / MAY 2012 ~ 18 ~


Half page ad charges is 1087500 once time*2 SUNDAYS during 2nd quarter =2175000 on first page and other quarters budget similar rates with different schedule.

JUNG NEWS PAPER

The reach of JUNG new paper is maximum at Sunday therefore we will also advertise our product in JUNG Sunday newpaper.

Half page ad charges is 865900/- one time*6 SUNDAYS during 2nd quarter =5195400/- on second page.

Broadcast Media:We have selected the following channels for broadcast media.

GROUP VI / MAY 2012 ~ 19 ~


PTVPTV have a maximum coverage across the Pakistan there we will be targeting our customers through ptv at prime time mentioned below.

Our ad will be on-air before specified program @178150*2=356300 per minute. Our ad will be run for consecutive 15 days. Our ad will be on air during prime time (7.45pm to 9.00pm].

The total amount of 1st quarter of ptv can varies because is depends upon length of ad

GEO TVDue to maximum cable viewership we have selected GEO TV to target our customers.

Per minute rate on GEO TV is Rs.637200 during prime time (8.00pm to 9.00pm}. Our ad will be run consecutive 15 days. The total amount of 1st quarter of GEO TV can varies because it depends upon length of

ad that means 637200 per min charge *15 days =Rs 9558000/-

RADIORadio stations mentioned below will be used as according to their coverage and popularity.

GROUP VI / MAY 2012 ~ 20 ~


At radio Rs 1100 per sec is charged. Our ad will be run for 30days. Total cost will be Rs.1980000/- Fm station 89.00,91.00,100.00 will be used.

Social Media and Internet:

It is strongly recommended that Honda must have effective web presence in this interactive world .To promote the entire site, an online marketing program must be launched. A comprehensive, highly targeted group of destination web sites must be chosen for the program. The web site should be registered with yahoo search portal. And a number of tactical elements will help drive online awareness and inquiries into the program including:

Online newsletters Banner advertising Search engine registration Web site links Facebook and on line newspaper JUNG and THE NEWS. Separate Web page for Honda CBR 150 Euro 2 at Honda official Website. A free Flash race game containing Honda CBR for facebook (downloadable) will be

introduced.

GROUP VI / MAY 2012 ~ 21 ~


Outdoor Advertisement:

our outdoor advertisement will contain:

Billboards. Neon signs at Universities,, colleges & offices cafeteria Flag banners at our showrooms

GROUP VI / MAY 2012 ~ 22 ~


Sales promotion tools

Following sales promotion tools will be used:

Sales presentations Sales support programs Free Helmet with every Bike for customers Safety.

Target Market Coverage:

Target market will be covered through two channels one is through Dealership Sales and second is direct selling to companies (Police, Army, CSD, TCS) Institutional Sales.

Reach vs frequency:

Our coverage will be across the nation focusing to provide us maximum reach.Whereas frequency of our ATL’s will be maximum that our budget allows in first month later on our on air display frequency will be decided on our competitors’ response.

Creativity and Aesthetics:

Aesthetics of our Media Ads will be power, speed, muscularity, safety, state of art product design.Our Ad campaign will show a satisfying customer mood depicting achievement of its dreams, focusing on its new competitive features.Product nature of CBR 150 is Masculine giving a power full exterior look with shiny body paint, fiber side covers, big 17 inch rims and stylish silencer.

GROUP VI / MAY 2012 ~ 23 ~


Budget consideration:

BUDGETING

2nd Quarter2012

3rd Quarter2012

4th Quarter2012

1st Quarter2013

TOTAL

PTV 5344500 5344500 10689000

GEO TV 9558000 9558000

RADIO 1980000 1575900 3555900

JUNG NEWS PAPER APER

5195400 1731800 865900 7793100

DAWN NEWS PAPER

2175000 1087500 1087500 2175000 6525000

SPONSORSHIP PROGARMES

2860000 1578000 4438000

BILL BOARDS 3000000 2575000 1570000 7145000

BANNERS 2000000 1050000 875900 475700 4401600

Interner( Facebook and online newspapers)

5268000(pre-launch for facebook)

No additional cost for website and game



TOTAL 37,380,900 8,020,200 2,829,300 11,143,200 59,373,600

Financial Analysis of 1st quarter and Evaluation plan of Promotion:

Actual cost per bike = 146560/- including sales tax.Selling price per bike = 166000/-Profit margin = 19460/- per bikeExpected sales1st month 30,000 bikes2nd month 25,000 bikes3rd month 25,000 bikesTotal 80,000 bikes SP/Bike x Rs166,000SR 13,280,000,000 ( sales revenue of first quarter for CBR 150 Euro 2)

Total cost of 1st quarter = 112560 x 80000 bikes = 9,004,800,000/-Total revenue

GROUP VI / MAY 2012 ~ 24 ~


PERCENTAGE OF PROMOTION MIX

Total promotional budget…………………..62 Million Rupees

Advertising……………………………….. 60%

Sales Promotion………………………….. 20%

Direct Marketing…………………………. 5%

Personal Selling………………………….. 5%

Public Relations……………………………10%

3Ps of Brand (promises, perceptions and Personality) of Honda

AD ANALYSIS

GROUP VI / MAY 2012 ~ 25 ~


MARKET STRATEGY

UNDIFFERENTIATED

TARGET MARKETRIDERS, STUDENTS, BUSSINESS CASS

POSITIONING APPROACHPOWER OF RIDER

AD APPEALEMOTIONAL, FEATURES,

EXECUTION STYLESLICE OF LIFE

GROUP VI / MAY 2012 ~ 26 ~

Honda Final Report 2010 2

Documents

Transcript of Honda Final Report 2010 2