marketing plan to launch a car in pakistan

8/4/2019 marketing plan to launch a car in pakistan

1/28

MARKETING

GROUP ASSIGNMENT

Hussain Noor ( KR00 )

Syed Muhammad Zohaib (KR002646 )

Shoaib Manzoor ( KR00 )

Hira Azmat ( KR002639 )


2/28

AcknowledgementsWe would like to thank God for granting us the strength, courage, will power and patience in

each task, whether big or small, that has made this work possible.

This work has been a taxing and laborious task for us and wouldnt have been possible

without the help and support of we gained from each other and especially so from our

lecturer (in the truest sense of the word), Ms. Kiran Akber Ali, who gave us both

guidance and advice which have made our work possible. We are grateful for her help.

We hope and pray that this report meets the requirements and criteria expected from us.

2


3/28

Table of Contents

S. No. TOPIC Page No.1 Introduction 4

2 Executive summary 6

3 Situational Analysis : SWOT Analysis 8

4

Marketing Strategies :

1. market segmentation2. target marketing

3. market positioning and differentiation

4. the marketing mix

11

5 Major Aspects Of The Marketing Plan

Goals

Objectives

Strategy

21

8 Financial Projections and Budget 25

9 Control and Evaluation 27

3


4/28

Introduction

A marketing plan is a blueprint that provides structures of a firms activities and, aptly so,

includes the implementation and control of those activities.

Major sections of a marketing plan would comprise of:

1. the executive summary

2. situation analysis

3. analysis of strengths and weaknesses, opportunities & threats

4. desired outcomes

5. marketing strategies

6. product/market match

7. controls and evaluation

8. financial projections

Keeping in mind that there are several different formats that can be used to describe thecomponents of marketing plan, we have used the one you see here for our term report.

The marketing strategy and its key elements are put down in writing in rather broad terms

which are not suitable for implementation, neither are they meant to be. The marketing

4


5/28

plan is the action document. Developing a marketing plan is a creative effort to provide

vision and direction for marketing implementation.

This report provides a marketing plan developed for a new product about to be released

into the market by the Toyota Company. It will be called the Toyota Carriage, a car

designed for the working and middle class. The sales pitch here if you may, is that this

car will be the cheapest car in Pakistan and will fulfill the commuting needs of people

classified as the working and middle class of Pakistan who were, prior to the availability

of this product, able to purchase a car. Current product introduction objectives and

strategies emphasize the fact that its a car designed specifically to meet the bare needs of

classes of society that have to rely on commuting means which are not exactly convenient

(public transport services), safe (scooters, motorbikes, etc.), or even entirely consumer

friendly in light of the aforementioned two when it comes to families (a classification

which comprises a large number of people in Pakistan).

Our focus lies in creating awareness among people that it is dangerous, and even illegal

when it comes down to the law of the land to commute with a family on a two wheeler

on the infamously lethal roads of Pakistans major cities. It might also be a good idea to

inform potential customers about the benefits offered by the car and convince the

consumers to buy the product.

5


6/28

Executive Summary

This marketing plan has been designed forthe Toyota Carriage. The core benefit of this

product is to provide a reasonably comfortable, safe and consumer-friendly commuting

option in the form of this high value economy car which could be considered affordable

by a majority of people belonging to the working and middle class segments of Pakistani

society as its sales pitch claims of being the cheapest car in Pakistan will bear

reasoning when it comes to pricing the different models of the Toyota Carriage upon its

release. The challenge and, consequently, the objective of our plans would be to convince

potential customers of the products superiority in value for money and features provided

in contrast to both conventional alternatives and competition alike.

Due to numerous economical factors over the past few years, the number of cars, and

especially so, economy cars bought and sold in Pakistan has grown considerably resulting

in the introduction and popularity of many car models by numerous companies that have

learnt to take advantage of this new-found realization.

It has been identified that the following variables will affect the purchase of Toyota

Carriage:

6


7/28

1. Region

2. Density

3. Age

4. income group

5. education

6. lifestyle

7. personality

8. social class

9. user status

We combine these aforementioned variables and give them relative values in order to

arrive at our target market. We then evaluate the segments and then decide how many and

which ones to target. The appropriate market coverage strategies are then implemented in

order to serve the respective segments.

It is essential that Toyota Carriagebe differentiated from the competitors products. Theproducts position must be communicated and delivered to the heart and minds of the

target consumers. Throughout the marketing process we will stick to our primary

objective of increasing sales, earning high profits all the while keeping in mind the bare

essentials of the product which is providing those with limited means a method of

commute through the Toyota Carriage at affordable and competitive prices.

7


8/28

SWOT Analysisfor the Toyota company:

Strengths

New investment by Toyota in factories in the US and China saw 2005 profits rise,

against the worldwide motor industry trend. Net profits rose 0.8% to 1.17 trillion yen

($11bn; 5.85bn), while sales were 7.3% higher at 18.55 trillion yen.

8


9/28

It can be argued that Toyota has the right mix of products for the markets that it

serves.

Toyota is a good example of very focused segmentation, targeting and positioning

in a number of countries.

In 2003 Toyota knocked its rivals Ford into third spot, to become the World's second

largest carmaker with 6.78 million units. The company is still behind rivals General

Motors with 8.59 million units in the same period.

Toyota has a strong industry position.

The company has diversified product range.

The company has devised marketing techniques to identify and satisfy customer

needs rather successfully in the past.

Being the worlds second largest car manufacturer, its brand name is a well

known and trusted household name. The Toyota brand has been compared to

manufacturers of higher end vehicles in the market.

Toyota believes in fast, inexpensive production. The company maximizes profit

through efficient manufacturing approaches and has a commitment to lean

manufacturing and quality. (e.g. Total Quality Management).

Weaknesses

The world market for cars is in a state of over-supply and large global car

manufacturers like Toyota have to work hard to gain and maintain market

share.

Selling globally means Toyota is exposed to the fluctuating economic and

political conditions of other markets.

9


10/28

The company needs to keep producing cars in order to retain its

operational efficiency. Car plants represent a huge investment in the form

of expensive fixed costs plus high costs of training and retention of labor.

So if the car market experiences a down turn, the company could see an

over capacity. If though, on the other hand the car market experiences an

upturn, then the company may miss out on potential sales due to under

capacity i.e. it takes precious time to accommodate. This is a typical

problem with high volume car manufacturing.

Opportunities

Lexus and Toyota now have a reputation for manufacturing environmentally

friendly vehicles. Lexus has its RX 400h hybrid, and Toyota has its Prius. Both

are based upon advanced technologies developed by their respective companies.

Rocketing oil prices have seen sales of the new hybrid vehicles increase. Toyota

too has sold its technology to other motor manufacturers. For instance, Ford has

bought Toyota technology for its new Explorer SUV Hybrid. Such moves can

only reaffirm Toyota's interest and investment in hybrid R&D.

Toyota is to target the 'urban youth' market. The company has launched its new

Aygo, which is targeted at the streetwise youth market and captures (or attempts

to) the nature of dance and DJ culture in a very competitive segment. The vehicle

itself is a unique convertible, with models extending at their rear!

This segment is notorious for its narrow margins and branding difficulties.

10


11/28

Threats

Product recalls are always a problem for vehicle manufacturers.

In 2005 the company had to recall 880,00 sports utility vehicles and pick up trucks due

to faulty front suspension systems. Toyota did not g ive details of how much the recall

would cost. The majority of affected vehicles were sold in the US, while the rest were

sold in Japan, Europe and Australia.

Toyota faces tremendous competitive rivalry in the car market. Competition is

increasing almost daily, with new entrants coming into the market from China,

South Korea and new plants in Eastern Europe.

The company is also exposed to any movement in the price of raw materials such

as rubber, steel and fuel.

The key economies in the Pacific, the US and Europe also experience slow

downs. These economic factors are potential threats for Toyota.

Marketing Strategies:

To understand the needs and wants of customers and satisfy them customer analysis is

required. A company cannot satisfy all the consumers in a given market therefore the

market must be divided into segments and the company should design strategies for

profitably serving the chosen segments. This process essentially involves:

11


12/28

1. market segmentation

2. target marketing

3. market positioning and differentiation

4. the marketing mix

1. market segmentation

Markets consist of buyers who differ in one or more ways. Consumers can be grouped

and served in various ways based on geographic, demographic, psychographic and

behavioral factors. This process of dividing the market into distinct group of buyers is

market segmentation.

For achieving our goals in this manner, we have distributed the market of Pakistan into

segments. Here the market has been divided in the following segments for the Toyota

Carriage.

Geographic

City: Karachi, Islamabad, Lahore, Quetta, Hyderabad.

Density: urban, suburban.

Demographic

Age: 20-50

Family Size: 1-5

12


13/28

Family Life Cycle: Single, Married, Married With Children.

Income: Rs. 20000 and over

Psychographic

Social Class: Working Class, Lower Middle Class

Lifestyle: strivers

Behavioral

Benefits: Economy, Convenience, Service

User Status: Non User, Potential User

Readiness Stage: Unaware, Aware, Interested

According to geographic segmentation we segment our market on the basis of region and

density. As we cannot cater to everyone in the market we define key regions where the

product has the potential to acquire a considerable market share. Toyota Carriage is

mainly designed for working people with commuting needs along the lines of getting to

work or taking the family out for a ride but cannot afford a car yet. Such people can

commonly be found in cities so we will segment the market into the major cities of

Pakistan. Other ways in which we have segmented the market is density-wise. Urban

dwellers and people living in the suburbs are the main market for us as these people have

to commute to and from work on public transport, two wheelers and/or carpool which are

13


14/28

all not exactly a convenient means of transport. These people will definitely be looking to

purchase a car at an affordable price.

Demographic segmentation divides the market into groups based on variables such as:

Age

Gender

family size

family life cycle

education

occupation

income

religion

race

nationality

Toyota Carriage is segmented demographically into age, family size, family life cycle

and income. Consumers between the ages of 20-50 are our target because these are the

ones who most probably go to work and so require a car which is economical. According

to family size this car is designed for an individual as well as for the whole family not

bigger than 5 people as the car can seat four adults or two adults and three kids.

Demographically the market has also been segmented according to the family life cycle

which includes singles, married people and married with children. But the most important

segmentation is income wise. This car is designed for the working and middle class who

commute through public transport or two wheelers, as they dont have a high income to

afford a car. This car is intended for people on a low income and especially those who

have a family and therefore require a car.

As people in the same demographic group can have very different psychographic makeup

hence we use psychographic segmentation. Using psychographic segmentation we have

14


15/28

segmented buyers on the basis of social class and lifestyle. Toyota Carriageis more likely

to appeal to consumers belonging to the working and middle class. These are average pay

white and blue collar workers who want to have the lifestyle of the upper class and so

they have a lust for products which develop their image. As going on public transport or

scooters does not presents a good image so they will buy the Toyota Carriage which is a

better option, is more convenient to use and very affordable. According to lifestyles the

market segment we are targeting is the strivers. They are people with an active lifestyle

and not so much free time. They are motivated to succeed in their career and personal

life. They aspire to a higher level of income, social status, career success. They are

interested in changing styles and trends and feel that appearance is important. That is why

owning a car is important for them. And as the Toyota Carriage is very inexpensive they

will definitely go for it.

Lastly the behavioral segmentation of Toyota Carriage is made. Behavioral

segmentation divides the buyers into groups based on their knowledge, attitudes, uses or

responses to a product. Behavioral segmentation of Toyota Carriage is done on the basis

of benefits, user status and readiness stage. The benefits the product can give are

economy, service and convenience. Customers of Toyota Carriage will have a economic

car and it will be convenient for them to drive the car for travel purpose. The customers

will also receive after sales service from the dealers. According to the user status the

market is segmented into non user and potential user. We have to aware the non users and

to inform the potential user about the benefits of the car so they buy it. The market is also

segmented according to readiness stage. We will target the unaware consumers and make

them aware about this product. We will motivate the aware and interested consumers to

use the product as it will be beneficial for them.

2. target marketing

15


16/28

A target market consists of a set of buyers who share common needs or characteristics

that the company decides to serve. We have already divided the market into segments but

now we need to evaluate the various segments identified above in order to decide how

many and which ones to target. After combining the appropriate variables we arrive at a

market segment with a high growth rate. The factors that affect the long run structural

attractiveness are in our favor because there are very few competitors, meaning there are

very few substitute products available. Our target market is the working and middle class

who are not earning too much but want to have a better lifestyle and status in society.

We have planned to use a differentiated marketing coverage strategy. We are going to

focus on several market segments. The differentiated marketing strategy is highly

profitable for us. Through the differentiated marketing strategy we hope to achieve a

strong market position because we know the needs of our consumers and also have

knowledge about the segments specified, and so are able to earn a high rate of return on

the investment.

3. Market Positioning and Differentiation

A product's position is the way the product is defined by consumers on important

attributes and the place the product occupies in consumer's mind relative to competing

products. As consumers are overloaded with information about different products they

organize products and companies and position them in their minds. A brand must adopt a

positioning strategy designed to serve the needs and wants of its target market.

We plan to differentiate our product through product differentiation. Toyota Carriage is

different from other cars in the market because it's available at a cheap and affordable

price. It is positioned in the minds of consumers as a car which offers high value at a

lower cost. Our product is highly affordable and convenient and the after sales services

we provide to our customers make the product more lucrative. As we have very few

16


17/28

competitors and there products are expensive than the Toyota Carriage we are expecting

a competitive advantage over our competitors.

The full positioning of a brand is called the brand's value proposition. It is the answer to

the customer's question" Why should I buy your brand?" Our value proposition hinges on

low price and high economic value. To position the Toyota Carriage we will use Less for

Much Less positioning strategy. Consumers get lesser benefits as compared to other

products in the market but they will get them at a much lesser price as compared to the

products of the competitors. The benefits provided by the Toyota Carriage are fewer than

those provided by the competitors but the price of the Toyota Carriage is much cheaper

than other cars in market. Therefore our car has a unique position in the market.

The other benefit we have is quality. Carriage is launched by Toyota which is a trusted

brand. Japanese cars especially Toyota cars have a good image in the minds of

consumers. As we are launching a car by Toyota it means we are providing a good

quality car to customers at a reasonable cost.

4. The Marketing Mix

The marketing mix is the set of controllable, tactical marketing tools that the firm blends

to produce response it wants in the target market. The many possibilities can be collected

into four groups of variables known as the "fourPs": product, price, place and

promotion. The marketing mix for Toyota Carriage is given as under.

PRODUCT

Toyota Carriage is a proposed city car. A small, affordable, rear-engine, four-passenger

car aimed primarily at the Pakistani market. It is manufactured by Toyota and is a 4-door

Hatchback. The length of the car is 120 inches, the width 60 inches and height 62 inches.

17


18/28

The fuel capacity of the car is 15 liters. The body is made of sheet-metal and plastic. The

car can have a maximum speed of 75 km/hour. The four-door car has a 33bhp, 624cc,

engine at the rear. It has no air conditioning, no electric windows and no power steering,

but has capacity to seat five people. The car will be available in five different colors i.e.

red, yellow, black, white and blue and so there will be more variety to choose from. The

car is very economic as compared to the other cars in the market. This car is safe,

affordable and designed to meet all safety standards and emissions laws. Initially about

100,000 models will be made, with an expected annual demand of half a million cars.

We will provide after sales service to our customers. For this we have carefully selected

dealers who will inform people about the car and will provide assistance to them after the

purchase of the car. They will provide good quality service to the customers.

In the future additional features will also be introduced in the car making it more

worthwhile for the consumer to buy the Toyota Carriage. The quality of the car will be

further improved.

PRICE

For the first year of the introduction of the product we will use the market-penetrationpricing strategy. We will set a low initial price in order to enter the market quickly and

deeply. In first year we want to attract a large number of buyers and a large market share.

Since Toyota Carriage is a new product we have kept the prices low so we have a great

number of sales. The high sales volume results in falling costs, which will allow the

company to cut its price even further.

The general pricing approach used will be cost plus pricing where we add a markup of

40% to the cost of the product. The total cost for a Toyota Carriage is Rs.72 825. After

adding the 40% markup we get a price of Rs.1 01 955. This is the price on which we will

sell the car to our dealers. The dealers will further apply a markup of 20% which will

make the price of the car Rs.1 22 346. As a result the consumer will get the Toyota

Carriage at a price of Rs.1 22 346 which will be the cheapest priced car in Pakistan.

18


19/28

Promotion

Modern marketing calls for more than just developing a good product, pricing it

attractively and making it available to target customers. Companies must also

communicate their message with the customers and what they communicate should not

be left to chance. For most companies, the question is not whether to communicate, but

how much to spend and what media to use.

First of all we need to decide on the basic message content that will produce the desired

response. The message should relate to the audiences self interest and show that the

product will produce the claimed benefits, for e.g. product quality and performance.

Yet, it must be catchy, or atleast a little bit clever, something capable of being retained

despite the slightest amount of attention paid. A few ideas that could be decided upon are:

Carriage The not so common car for the common

Reliability,Ttrust, Safety, Valueall within your reach now.

carriage, the car for everyone.

One of the most difficult decisions in marketing is to decide how much to spend on

promotion. In the first year of launch we shall carry out aggressive promotion in order to

capture the larger part of the market. After that we intend to follow the objective-and-

task method whereby the company sets its promotion budget based on what it wants to

accomplish with promotion.

We will employ various communication channels to make people aware of our product

-its features and its application.

Television:

19


20/28

TV advertisements are the most important way to convey our message to consumers.

Therefore advertisements will be made for the consumers which will not just serve to

make people aware of the new car in town but urge them to buy the Toyota Carriage.

The advertisements should show in moderate detail the benefits of the Toyota

Carriage. The TV ads will be displayed on the major channels which are seen by most

of our target market like Geo, Express News, ARY etc.

By this medium after two months we will have successfully created awareness for our

product. In this way we will develop a feeling for the experience that the product

offers.

Billboards and Posters:

The advertisements will be used to make people aware that something new is about to

arrive. Catchy captions will be placed on these billboards to get people to notice it.

This will build anticipation in the potential customers. We plan to keep these teasers

running on display for an estimated 4 weeks. After this time duration we will place

more descriptive and informative advertisements on the billboards that talk about the

actual product and the benefits of using the product. These billboards will be located

in the major cities.

Magazines:

In order to inform everyone about the new launched car we will give ads in

magazines like Sunday Magazine, Akhbaar-e-Jahan, Time, Extra, Herald, etc. The

magazines will feature full-page length color advertisements with greater detail about

the features of the product along with its costs, design and features.

Newspapers:

The newspaper advertisements will feature appropriate sized advertisements like

quarter page as well as full-page length color advertisements and they will appear

with an interval of a week. They will clearly state the message to be conveyed to the

20


21/28

potential customers. The newspapers will be Jang, Express News, Dawn, The News,

etc.

Place

Distribution channels are basically a means of getting the product from the manufacturer

to the final customer. In the case of our product we will use well known Toyota

showrooms and Toyota dealers who are already selling our products to sell the Carriage

to the customers. We will be using dealers in major cities like Karachi, Lahore, Quetta

and Islamabad to make our product available to the consumers. We will have a direct link

with the dealers. Moreover a sales representative from the company will visit theshowrooms and dealers on a regular basis. Our dealers will also provide after sales

service to the customers. In this way we will have more profitable relationship with the

customers.

Major Aspects Of The Marketing Plan

Goals:

21


22/28

The decision by a potential customer to purchase Toyota Carriage can be broken

up into a series of yes or no questions devised for goal setting purposes. These are

as follow:

Step1: Is the customer aware of Toyota Carriage?

Yes: Proceed to step 2.

No: Customer must be educated about Toyota Carriage

.

Step 2: Does the customer understand the benefits of Toyota Carriage?


No: Customer must be educated about the benefits of Toyota Carriage.

Step 3: Does the customer see the price/ benefit ratio as a good value?


No: Customer must be educated on the value of Toyota Carriage.

Step 4: Will the customer purchase the product?

Yes: A sale has been made and the objective achieved.

No: Any remaining obstacles must be removed.

The goal of this plan is to realize, view and consequently remove all obstacles that lie in a

customers way of making a buying decision for the product.

22


23/28


24/28

As mentioned before in this report, a huge part of our strategy centers on product

differentiation, whereby we differentiate our physical product from competition and

alternatives alike. This is certainly possible in the case of Toyota Carriage, mainly due tothe fact that the Carriage will be the cheapest economy car in the country upon its release

into the economy car market.

Image differentiation techniques must include relating the benefits of Toyota Carriage

to the target customers that suit the profile criteria as laid down in our target customer

profile.

This strategy can and will be implemented through four main channels:

1. Creative television advertisements designed to appeal to the target market.

2. Frequent advertisements in the newspaper and magazines to persuade the

customer.

3. Billboards and posters will be used in the metropolitan areas to keep reminding

the customer. The advertisements will be used to make people aware that

something new is about to arrive. Catchy captions will be placed on these

billboards to get people to notice it.

The promotional campaign will create brand and benefits awareness for Toyota Carriage

right from scratch. The final result of which will hopefully be increased trial and

subsequent sales.

24


25/28

25


26/28

Financial Projections And Budget

The following costs are estimates based on rates we have gathered from different sources

of media management.

Media Channel Per Unit Cost in

Rs.

No. of Units Total Budgeted

Cost in Rs.

Television 10000000 15 150000000

Billboards 2000000 50 100000000

Magazines 250000 50 12500000

Newspapers 200000 100 20000000

TOTAL 282500000

From the budget above we expect our total promotional expenditures to be around Rs.

10750000. The per unit production cost is Rs. 70000 per car. Our initial estimate of

production is around 100,000 cars a year. That brings the total production cost to

Rs. 7000000000. The promotional costs are approximately 282500000. In order to find

the per unit cost of selling a car we add the annual promotional and production costs and

divide the result by the number of cars produced annually:

Rs. 7000000000 + Rs. 282500000 = Rs. 7282500000

Rs. 7282500000 / 100000 = Rs. 72825 per unit

26


27/28

We have the total costs of producing a car. Now we will simply add a markup to the cost

price of the packet to arrive at the retail price. Now we can add a 40% markup:

Rs. 72825 * (40 / 100) = 29130

Rs. 72825 + Rs. 29130 = Rs. 101955

The total price after adding the markup is Rs. 101955 for a car. While the total cost for a

car is Rs. 72825 per car. In the first year if our promotion strategies are successful the

expected sales will be 100000 cars. This means in the first year we will have revenue of

Rs. 10195500000 and our costs will be 7282500000. Thus we will earn a profit of Rs.

2913000000.

This is a satisfactory return given that our product will be the first of its kind in the

market. This level of profitability has only been possible because of the strong marketing

program that has been developed to provide Toyota Carriage with the promotional

support that it requires.

27


28/28

Control And Evaluation

It is vital to monitor and measure the results of the plan at various different stages. To

determine the product launchs success in achieving the objectives of increased

awareness and intention to purchase, the following steps will be taken.

1. Closely observe sales and potential customer traffic during the product launch

to mark the initial response about the product.

2. A survey should be conducted about whether or not people have heard about

the product. If they have heard about it have they made the purchase or not. If

they have purchased it did they like the results or not.

3. Have ghost customers ask car dealers questions about the product. In this way

any misconception about the product will be removed before they spread too

far.

4. Compare the campaign measurement results with the campaign expenditures to

determine the success of the overall marketing effort.

marketing plan to launch a car in pakistan

Documents

Transcript of marketing plan to launch a car in pakistan