msmb manoj and rajlakshmi
TRANSCRIPT
PROJECT REPORT(BRAND AND MARKETING STRETAGY MANAGEMENT)
CASE:
RELAUNCHING A FAILED OR WEAK PRODUCT
SUBMITTED TO: PROF. ATANU ADHIKARI
SUBMITTED BY: MANOJ KUMAR & RAJ LAKSHMI SHUKLA
With the invention of the wheel in 4000 BC, man’s journey on the road of mechanized
transport had begun. Since then he continually sought to devise an automated, labor
saving machine to replace the horse. Innumerable attempts reached conclusion in the
early 1760s with the building of the first steam driven tractor by a French Captain,
Nicolas Jacob Cugnot. It was however left to Karl Benz and Gottlieb Damlier to produce
the first vehicles powered by the internal combustion engine in 1885. It was then that the
petrol engine was introduced, which made the car a practical and safe proposition. Then
onwards, it has been one big journey...on the roads
The automobile as we know it was not invented in a single day by a single inventor. The
history of the automobile reflects an evolution that took place worldwide. It is estimated
that over 100,000 patents created the modern automobile. However, we can point to the
many firsts that occurred along the way. Starting with the first theoretical plans for a
motor vehicle that had been drawn up by both Leonardo da Vinci and Isaac Newton.
In 1769, the very first self-propelled road vehicle was a military tractor invented by
French engineer and mechanic, Nicolas Joseph Cugnot (1725 - 1804). Cugnot used a
steam engine to power his vehicle, built under his instructions at the Paris Arsenal by
mechanic Brezin. It was used by the French Army to haul artillery at a whopping speed
of 2 1/2 mph on only three wheels. The vehicle had to stop every ten to fifteen minutes to
build up steam power. The steam engine and boiler were separate from the rest of the
vehicle and placed in the front (see engraving above). The following year (1770), Cugnot
built a steam-powered tricycle that carried four passengers.
In 1771, Cugnot drove one of his road vehicles into a stone wall, making Cugnot the first
person to get into a motor vehicle accident. This was the beginning of bad luck for the
inventor. After one of Cugnot's patrons died and the other was exiled, the money for
Cugnot's road vehicle experiments ended.
Steam engines powered cars by burning fuel that heated water in a boiler, creating steam
that expanded and pushed pistons that turned the crankshaft, which then turned the
wheels. During the early history of self-propelled vehicles - both road and railroad
vehicles were being developed with steam engines. (Cugnot also designed two steam
locomotives with engines that never worked well.) Steam engines added so much weight
to a vehicle that they proved a poor design for road vehicles; however, steam engines
were very successfully used in locomotives. Historians, who accept that early steam-
powered road vehicles were automobiles, feel that Nicolas Cugnot was the inventor of
the first automobile.
The automotive industry has certain trends it has to follow, just like fashion designers and
musical composers. In times of recession and decreasing sales there is less room to take
chances and manufacturers are prone to follow the common pattern as a safer bet rather
than releasing a controversial product or idea that might or might not be successful.
However throughout the automotive industry's history, great innovators have "boldly
gone where no man has gone before" to set new trends which have dynamically altered
the industry as a whole.
1880's & early 1900's
About hundred years ago
-The first motor car was imported
-Import duty on vehicles was introduced.
-Indian Great Royal Road was conceived.
First car brought in India by a princely ruler in 1898.
Simpson & Co established in 1840.
-They were the first to build a steam car and a steam bus, to attempt motor car
manufacture, to build and operate petrol driven passenger service and to
import American Chassis in India.
Railways first came to India in 1850's.
In 1865 Col. Rookes Crompton introduced public transport wagons strapped
to and pulled by imported steam road rollers called streamers. The maximum
speed of these buses was 33 kms. Per hour.
From 1888 Motors Spirit attracted a substantial import duty.
In 1919 at the end of the war, a large number of military vehicles came on the
roads.
In 1928 assembly of CKD Trucks and Cars was started by the wholly owned
Indian subsidiary of American General Motors in Bombay and in 1930-31 by
Canadian Ford Motors in Madras, Bombay and Calcutta In 1935 the proposals
of Sir M Visvesvaraya to set up an Automobile Industry were disallowed.
1942 Hindustan Motors Ltd incorporated and their first vehicle was made in
1950.
In 1944 Premier Automobiles Ltd incorporated and in 1947 their first vehicle
was produced.
In 1947 the Government of Bombay accepted a scheme of Bajaj Auto to
replace the cycle rickshaw by the auto and assembly started in a couple of
years under a license from Piaggio. Manufacturing Programme for the auto
and scooter was submitted in 1953 to the Tariff Commission and approved by
the Government in 1959.
In 1953 the Government decreed that only firms having a manufacturing
programme should be allowed to operate and mere assemblers of imported
CKD units be asked to terminate operations in three years.
Only seven firms namely Hindustan Motors Limited, Automobile Products of
India Limited, Ashok Leyland Limited, Standard Motors Products of India
Limited., Premier Automobiles Limited, Mahindra & Mahindra and TELCO
received approval. M&M was manufacturing jeeps. Few more companies
came up later.
Government continued with its protectionism policies towards the industry.
In 1956, Bajaj Tempo Ltd entered the Indian market with a programme of
manufacturing Commercial Vehicles, and Simpson for making engines.
1960's
In sixties 2 and 3 Wheeler segment established a foothold in the industry.
Escorts and Ideal Jawa entered the field in the beginning of sixties.
Association of Indian Automobile Manufacturers formally established in
1960.
Standard Motors Products of India Ltd. moved over to the manufacture of
Light Commercial Vehicles in 1965.
1970's
Major factors affecting the industry's structure were the implementation of
MRTP Act, FERA and Oil Shocks of 1973 and 1979.
During this decade there was not much change in the four wheeler industry
except the entry of Sipani Automobiles in the small car market.
Oil Shock of 1973 quickened the process of dieselization of the Commercial
Vehicle segment.
Three other companies, namely, Kirloskar Ghatge Patil Auto Ltd, Indian
Automotive Ltd and Sen & Pandit Engg products Ltd entered the market
during 1971-75. They ultimately withdrew in early eighties.
During the seventies the economy was in bad shape. This and many specific
problems affected the Automobile Industry adversely.
1980's - The period of liberalized policy and intense competition
First phase of liberalisation announced.
Unfair practices of monopoly, oligopoly etc slowly disappeared.
Liberalisation of the protectionism policies of the Government.
Lots of new Foreign Collaborations came up in the eighties. Many companies
went in for Japanese collaborations.
Hindustan Motors Ltd. in collaboration with Isuzu of Japan introduced the
Isuzu truck in early eighties.
ALL entered into collaboration with Leyland Vehicles Ltd. for development
of integral buses and with Hino Motors of Japan for the manufacture of W
Series of Engines.
TELCO after the expiry of its contract with Daimler Benz, indigenously
improved the same Benz model and introduced it in the market.
Government approved four new firms in the LCV market, namely, DCM,
Eicher, Swaraj and Allwyn. They had collaborations with Japanese companies
namely, Toyota, Mitsubishi, Mazda and Nissan respectively.
In 1983 Maruti Udyog Ltd was started in collaboration with Suzuki, a
Japanese firm.
Other three Car manufacturers namely, Hindustan Motors Ltd., Premier
Automobiles Ltd., Standard Motor Production of India Ltd. also introduced
new models in the market.
At the time there were five Passenger Car manufacturers in India - Maruti
Udyog Ltd., Hindustan Motors Ltd., Premier Automobiles Ltd., Standard
Motor Production of India Ltd. and Sipani Automobiles.
Ashok Leyland Ltd. and TELCO were strong players in the Commercial
Vehicles sector.
In 1983-84 Bajaj Tempo Ltd. entered into a collaboration with Daimler-Benz
of Germany for manufacture of LCVs.
Important policy changes like relaxation in MRTP and FERA, delicensing of
some ancillary products, broad banding of the products, modifications in
licensing policy, concessions to private sector (both Indian and Foreign) and
foreign collaboration policy etc. resulted in higher growth / better
performance of the industry than in the earlier decades.
1990's
Mass Emission Norms were introduced for in 1991 for Petrol Vehicles and in
1992 for Diesel Vehicles.
In 1991 new Industrial Policy was announced. It was the death of the License
Raj and the Automobile Industry was allowed to expand.
Further tightening of Emission norms was done in 1996.
In 1997 National Highway Policy has been announced which will have a
positive impact on the Automobile Industry.
The Indian Automobile market in general and Passenger Cars in particular
have witnessed liberalisation. Many multinationals like Daewoo, Peugeot,
General Motors, Mercedes-Benz, Honda, Hyundai, Toyota, Volvo and Fiat
entered the market.
Various companies are coming up with state-of-art models of vehicles.
TELCO has diversified in Passenger Car segment with Indica.
Despite the adverse trend in the growth of the industry, it is resolutely trying to meet the
challenges. Various issues of critical importance to the industry are being dealt with
forcefully.
India is the second largest manufacturer of two-wheelers in the world. It stands next only
to Japan and China in terms of the number of two-wheelers produced and sold
respectively. India is one of the very few countries manufacturing three wheelers in the
world. It is the world's largest manufacturer and seller of three-wheelers. India’s
automobile sector consists of the passenger cars and utility vehicles, commercial vehicle,
two wheelers and tractors segment. The total market size of the auto sector in India is
approximately Rs 540 billion and has been growing at around 8 percent per annum for
the last few years. Since the last four to five years, the two wheelers segment has driven
the overall volume growth on account of the spurt in the sales of motorcycles.
The automobile industry is fairly concentrated, as in most of the segments two to three
players have cornered a major chunk of the total sales. For instance, in the two wheelers
segment, the sales volumes of Hero Honda, Bajaj Auto and TVS Motors constitute
around 80 percent of the total sales. The auto components industry on the other hand is
highly fragmented, though there are dominant players in some of the critical segments.
Given the high growth expectations and a liberal government policy, the investment
potential in the India auto sector is huge. CRIS INFAC is forecasting around 10% in two
wheelers. In the next 2-3 years, the two-wheeler industry is expected to attract investment
amounting to Rs 10 billion. The expected rise in income levels, wide choice of models
and easy availability of finance at low interest rates will drive growth in, two wheelers
growth, which is likely to marginally slow down, but still grow at an average annual
growth rate of around 16%.
DAZZLE POWER LTD
Company Profile:
NAME: Dazzle Power Ltd.
PROMOTERS: MANOJ KUMAR AND RAJ LAKSHMI SHUKLA
PRODUCT: Unique Battery Operated Bikes, Environmental Friendly
PROPOSED MODELS: Electro Scooty
Electro Scooty
PROJECT: New indigenously developed battery operated Two – Wheelers for the first
time in India which will save petrol and is pollution free.
Introduction
Founded and headquartered in New Delhi, India, Dazzle Ltd. Company is setting up an
auto project for manufacturing of an innovative and conceptual product viz Electric
Motor Bike. The project will have great significance in the present day context of
increasing pollution due to auto emission and is expected to create a revolution in the
Indian automobile market.
Its products manufacturing will commence in Haryana. Dazzle Ltd. is entering the Indian
market with the aim of establishing its brands as a necessity for the Indian buyers.
The company will follow a strategic positioning approach for the target market. Dazzle
Ltd. has kept into account the income & behavioral factor of the Indian buyers while
designing the product. It is important for the company to understand the consumer
behavior before it goes into such a market. The Indian consumer for the first time will
have a premium product which is eco-friendly and affordable.
Business strategy
Our business strategy will include the determination of the most beneficial product
market in term of establishing itself in this new product segment. The most important
factor for the success of Dazzle Ltd. brand is the perception of the consumer and to what
extent it can build a positive image in the consumer’s mind. The intensity of the business
environment, the sustainable competitive advantage of a quality product will give it a
strong base to build the market.
It is important for us to adopt a different strategy for the Indian market since it is
composed of quality buyers as well as those who will buy for their family. Thus, we shall
introduce some new strategies so as to establish our self in the Indian market and develop
a strong customer base.
The Model used for preparing the marketing strategy by DAZZLE LTD. in the
Indian Market
Product Range
External Analysis
Competitors Analysis
Internal Analysis
Environment Analysis
Marketing Strategies
Future Plans
Conclusion
The first growth vector will involves gaining penetration with the existing product-
market – Dazzle Ltd. will attempt to attract customers from competitors through its
strategic positioning and will establish strong brand equity.
The second growth vector will involves product expansion while staying in the current
market. Dazzle Ltd. will then offer a new product. It will be aimed not only for the
existing market but also for the price conscious segment.
The third growth vector will apply the same products to the new markets.
The fourth growth vector will be to diversify into new product markets. We shall
concentrate on the second growth vector and study the strategy with respect to the two
wheeler market.
The Indian market with its vast size and demand base offers great opportunities to
marketers. Two-thirds of countries consumers live in rural areas and almost half of the
national income is generated here. It is only natural that rural markets form an important
part of the total market of India though the urban market is increasing drastically. Our
nation is classified in around 450 districts, and approximately 630000 villages, which can
be sorted in different parameters such as literacy levels, accessibility, income levels,
penetration, distances from nearest towns, etc.
The rural bazaar is booming beyond everyone's expectation. This has been primarily
attributed to a spurt in the purchasing capacity of farmers now enjoying an increasing
marketable surplus of farm produce. In addition, an estimated induction of Rs 140 billion
in the rural sector through the government's rural development schemes in the Seventh
Plan and about Rs 300 billion in the Eighth Plan is also believed to have significantly
contributed to the rapid growth in demand. The high incomes combined with low cost of
living in the villages have meant more money to spend. And with the market providing
those options, trends and tastes are also changing.
Thus, Dazzle Ltd. has decided to enter this market with the basic idea of tapping the
Indian lower middle class which had established itself as a huge untapped market in the
perceptions of a lot of national & multinational players who were then trying forays into
the Indian market.
Keeping all this in mind Dazzle Ltd. will launch its ELECTRO range of two wheelers
addressing the Indian palate with the first time ever product launched specifically for a
local rural & urban market to some extent. Dazzle Ltd. will position on pricing and its all-
pervasive cheap plank. The Electro Bike MLX will be priced at Rs. 40000 especially
meant for guys segment, Electro Scooty will be priced around Rs. 25000 designed
exclusively for girls, veterans and middle-aged and Electro Rick will be introduced as a
product for public transport at a later stage. Dazzle Ltd. through this product range will
try to make its presence on the Indian Rural & Urban market by positioning its product as
a Eco-Friendly, Affordable & Comfortable Bike.
Benefits sought:
‘Customer is the profit, everything else is the overhead’
The basic contention of people has been price and safety. People prefer bikes which
provide healthy drive with proper comfort and good looks along with a reasonable price
and not just the Brand name. The product still has a long way to go before it proves to be
a success.
The customer buys the product as per the benefits he/she gets out of the deal. The
company has to sell the advantages of the product as per the benefits for the consumer,
keeping either the price as the distinguishing factor or the quality as perceived by the
consumer.
NEED OF COMPARISION
Consumer Mindset
The consumers always have a different loyalty status for different brands.
Sometimes they buy some brand due to the price or sometimes due to the features.
Studying the consumer’s mindset is of vital importance as perception of
individuals at the buying stage of various brands is unpredictable and ever
changing.
Market Share
The market share of the players in the two wheeler auto market needs to be
studied to know which company is in the booming stage and which company is in
its closure stage. Also the advertisement and promotional share needs to be
studied. Thus, market share helps us know the current market leader and market
follower so that our company can develop an efficient marketing strategy for its
product range after analyzing the current market player’s position.
SWOT Analysis
The SWOT Analysis i.e. the Analysis of the Strengths, Weaknesses,
Opportunities and Threats of the company products and its competitors at a
glance. It needs to be compared to get an overall analysis of all the major
companies and to know the company having better strengths, more opportunities
and on the other hand the company having more of weaknesses and threats.
COMPETITORS STRATEGY
The Indian automobile market is currently estimated at a modest Rs. 504bn. It is
projected to grow at 16% annually.
The Hero Honda dominates the market with a combined share of 48% it a veritable giant
in the industry. TVS and Bajaj Auto are tied at 23% each according to ORG estimates.
The present market for two wheeler is segmented mainly on the bases of income and
lifestyle. Where Honda and Yamaha cater to the premium class, Hero Honda cater to the
popular class, Bajaj and TVS cater to the popular and economy class respectively.
HERO HONDA
Launch : What started out as a Joint Venture between Hero Group, the world's largest
bicycle manufacturers and the Honda Motor Company of Japan, has today become the
World's single largest two-wheeler Company. Coming into existence on January 19,
1984, Hero Honda Motors Limited gave India nothing less than a revolution on two-
wheels, made even more famous by the 'Fill it - Shut it - Forget it ' campaign. Driven by
the trust of over 5 million customers, the Hero Honda product range today commands a
market share of 48% making it a veritable giant in the industry. Add to that technological
excellence, an expansive dealer network, and reliable after sales service, and you have
one of the most customer- friendly companies.
Target: The target group of Hero Honda is different for its different bike ranges.
Product: Splender plus, Karizma, Passion Plus, CD Dawn and various other models.
Positioning:- Designed with your comfort in mind, with a contoured low-slung seat,
specially designed handlebar and a strong double-cradled tubular frame. The bikes by
Hero Honda epitomizes riding pleasure. Truly, the limousine of Indian two wheelers.
Differentiation: Better or wider distribution: the distribution network of the splendor plus
is excellent example. Their distribution divided into four zones.
Price:-
Price Range
Prices (in Rupees)
Bike Ex. Showroom Price On Road Price
CD DAWN 30,899 34,912
PASSION PLUS DRUM 43,816 47,920
SPLENDER PLUS DRUM 42,351 46,328
KARIZMA 74,292 81,049
Place:- It distribution channel is one of the largest with distributers spread all over the
country having more than 500 service stations.
Promotions:- Hero Honda has roped in film actor Hrithik Roshan, Captain of Indian
Cricket team Sourav Ganguly, Mohammad Kaif, Harbhajan Singh, Zaheer Khan, Yuvraj
Singh and Virender Sehwag as its brand ambassadors.
They will endorse the company products, attend corporate and brand events and help
promote its "We Care" campaign comprising safety riding, environment and friendliness.
BAJAJ AUTO
Launch: Bajaj Auto Ltd was incorporated in 1945 as Bachraj Trading Corporation.
Initially it started by assembling two and three wheelers in collaboration with Piaggio of
Italy. After the expiry of the agreement in 1971 the two and three wheelers acquired the
brand name of Bajaj. Bajaj Auto's two vehicle manufacturing plants are spread over 1
500 acres in two cities, produce a vehicle every 17 seconds and employ over 18 000
people.
Target: Bajaj Auto cater to the popular and economy class respectively.
Product: Chetak, Pulsar, Eliminator etc.
Positioning: It is a value that makes Bajaj worthy of credibility through integrity, of trust
through sensitivity and of loyalty through interdependence.
Price:
Price Range
Prices (in Rupees)
Bike Ex. Showroom Price On Road Price
Bajaj Chetak 30,899 34,912
Pulsar DTS-i 52345 55750
Bajaj Eliminator 67245 72344
Differentiation:: Better value for the consumers money (passport schemes ): additional
facilities are given to the customers like issuing passports and giving free insurance.
More dependable product and service.
MARKET SHARE OF THE COMPETITORS
Dazzle Ltd. does not come in this graph because it’s a new entrant in to the two wheeler
segment of the automobile industry.
The major players in the domestic two-wheeler industry have announced robust growth in
volumes for the month of December 2004. The total motorcycle sales of the top three
players registered a 54.1% yoy growth to 437,974 units. The major contributor to the
growth was Bajaj Auto, which registered a 100.7% yoy growth in volumes for
motorcycles.
Bajaj Auto
Table: December month volumes
Dec-04 Dec-03 yoy (%) April - Dec 04 April - Dec 03 Yoy (%)
Motorcycle 143,727 71,623 100.7 1,053,566 760,658 38.5
Total two wheeler 154,101 85,086 81.1 1,178,017 956,188 23.2
Three-wheeler 14,705 21,483 (31.6) 168,260 168,745 (0.3)
Total Vehicles 168,806 106,569 58.4 1,346,277 1,124,933 19.7
Table: Motorcycle sales
2004 Growth (%)
90,532 27.4
87,663 0.5
97,595 18.7
103,260 32.4
106,745 39.6
126,420 32.1
143,491 34.0
154,137 68.9
143,727 100.7
Although Bajaj Auto registered a 100.7% yoy growth in motorcycle sales, the volumes
declined by 6.8% on a month on month (mom) basis. The cumulative motorcycle sales
have crossed the one million mark and registered a 38.5% yoy growth to 1,053,566 units.
All three Bajaj motorcycles - CT100, Discover DTS-I and Pulsar DTS-I - are leaders in
their respective segments. The three-wheeler sales decreased substantially by 31.6% yoy
to 14,705 units and on a cumulative basis, the sales were almost flat at 168,260 units.
Hero Honda
Table: Motorcycle sales
Nos 2004 2003 Growth (%)
April 196,024 134,318 45.9
May 212,177 163,582 29.7
June 200,922 160,889 24.9
July 205,654 143,141 43.7
August 191,635 145,730 31.5
September 217,507 157,583 38.0
October 245,475 207,472 18.3
November 232,021 203,995 18.3
December 230,751 160,191 44.0
Hero Honda registered a 44% yoy growth in motorcycle sales. However, on a mom basis,
the volumes declined marginally by 0.5%. On a cumulative basis, the company witnessed
a 31% yoy growth to 1,935,981 units.
TVS Motors
Table: Motorcycle sales
Nos 2004 2003 Growth (%)
April 46,881 58,291 (19.6)
May 43,180 63,973 (32.5)
June 48,159 56,444 (14.7)
July 52,958 57,227 (7.5)
August 49020 62234 (21.2)
September 59,172 64,958 (8.9)
October 74,683 61,777 20.9
November 65,066 48,052 35.4
December 63,496 52,464 21.0
Table: Scooterettes sales
Nos 2004 2003 Growth (%)
April 15,172 9,880 53.6
May 17,321 14,334 20.8
June 22,339 14,403 55.1
July 22,501 19,249 16.9
August 18576 17446 6.5
September 23,150 18,201 27.2
October 21,291 20,779 2.5
November 20,466 16,803 21.8
December 14,866 13,671 8.7
Table: Moped sales
Nos 2004 2003 Growth (%)
April 18,979 16,576 14.5
May 20,394 17,896 14.0
June 21,447 21,192 1.2
July 24,765 21,137 17.2
August 21904 21640 1.2
September 22,515 22,830 (1.4)
October 21,722 21,752 (0.1)
November 22,118 20,601 7.4
December 18,524 18,171 1.9
TVS Motors reported a strong 21% yoy increase in motorcycle sales. However, on a
mom basis, the volumes declined by 2.4%. Mopeds and scooterettes segments registered
8.7% and 1.9% yoy increase in volumes respectively. However, the volumes for both the
segments declined by 27.4% and 16.3% respectively on a mom basis. On a cumulative
basis, the motorcycle segment witnessed a fall of 4.3% yoy, scooterettes segment saw an
increase of 21.4% yoy and the moped segment witnessed 5.8% yoy increase.
In the motorcycle segment, TVS Victor GLX 125cc and TVS Centra have witnessed
steady growth and the new TVS Victor GX 110cc has received excellent response across
the country. In the scooterettes segment, TVS Scooty Pep received yet another accolade
by winning the outstanding design award in the two-wheeler category in the recently
concluded Business World – NID Design Excellence Awards 2004.
The above present market analysis shows that there is a huge scope and expansion growth
for the major players as well as the new entrants in the two wheeler segment. So, on this
basis also, our company, DAZZLE LTD has decided to launch two wheelers running on
batteries.
High initial launch cost
There is a large front-ended investment made in new products including cost of product
development, market research, test marketing and most importantly its launch. To create
awareness and develop franchise for a new brand requires enormous initial expenditure is
required on launch advertisements, free samples and product promotions. Launch costs
are as high as 50-100% of revenue in the first year and these costs progressively reduce
as the brand matures, gains consumer acceptance and turnover rises. For established
brands, advertisement expenditure varies from 5 - 12% depending on the categories. It is
common to give occasional push by re-launches, which involves repositioning of brands
with sizable marketing support.
Marketing driven
In relative terms, marketing function has greater importance in the automobile industry.
The players have to reach out to mass population and compete with several other brands.
The perceived differences are greater than the real differences in the product.
Market research
Customers purchase decisions are based on perceptions about brands. They also keep on
changing with fashion, income and changes in lifestyle. Unlike industrial products, it is
difficult to differentiate products on technical or functional grounds. With increasing
competition, companies spend enormous sums on product launches. Market research and
test marketing become inevitable. The business rests on the two aspects that are brand
equity and distribution network.
Brand equity
Brand equity refers to the intangible asset in the form of brand names. The consumer's
loyalty for a particular brand is due to the perception that the product has distinctively
superior and consistent quality, satisfies his/ her specific needs and provides better value
for money than other competing brands. A successful brand generates strong cash flow
which enables the owner of the brand to reinvest a part of it in the form of aggressive
advertisement/ promotion to reinforce the perceived superiority of the brand. The worth
of a brand is manifested in the consumer's insistence on a particular brand or willingness
to pay a price premium for the preferred brand.
Distribution network
In this sector, one of the most critical success factors is the ability to build, develop, and
maintain a robust distribution network. Availability near the customer is vital for wider
penetration as most products are high value products. It takes enormous time and effort to
build a chain of stockiest, retailers; dealers etc and establish their loyalties. There are
entry barriers for a new entrant as a new product is typically slow moving and has lesser
consumer demand. Therefore dealers/ retailers are reluctant to allocate resources and
time. Established players use their clout to inhibit new entrants. However, when a product
offers a strong breakthrough, equity build up rapidly and so does the distribution
network.
The major problems faced while marketing in the Indian market:
a. Underdeveloped People and Underdeveloped Markets:
The number of people below poverty line has not decreased in any appreciable
manner. Thus underdeveloped people and consequently underdeveloped market by
and large characterize the Indian markets.
b. Many Languages and Dialects:
The number of languages and dialects vary widely from state to state, region to region
and probably from district to district. The messages have to be delivered in the local
languages and dialects. Even though the numbers of recognized languages are only
16, the dialects are estimated to be around 850.
c. Dispersed Market:
Areas are scattered and it is next to impossible to ensure the availability of a brand all
over the country. Seven Indian states account for 76% of the country’s retail outlets,
the total number of which is placed at around 3.7 million. Advertising in such a
highly heterogeneous market, which is widely spread, is very expensive.
d. Prevalence of spurious brands and seasonal demand: -
For any branded product there are a multitude of ‘local variants’, which are cheaper,
and, therefore, more desirable to mass.
e. Different way of thinking: -
There is a vast difference in the lifestyles of the people. The kind of choices of brands
that an urban customer enjoys is different from the choices available to the rural
customer. The rural customer usually has 2 or 3 brands to choose from whereas the
urban one has multiple choices. The difference is also in the way of thinking. The
rural customer has a fairly simple thinking as compared to the urban counterpart.
The concept is to make the product different from those of its competitor. When we look
at the Indian two wheeler market we see that the leaders Hero Honda has constantly
maintained its market leadership by constantly differentiating on the basis of newer
products, newer slogans like “Jet Set Go”
And coming up with line extensions with regular frequency. The only alternative for
Dazzle Ltd. to survive in this industry will be to differentiate itself. This differentiation
could be on the basis of the marketing mix. (Product, Price, Promotion, Place) Thus, as
per the different factors of marketing mix 4 Different strategies are made to market in the
developing cities in India.
Product Based Marketing Strategy
A. Product Quality:
Dazzle Ltd. will put forward itself to the customer as a product of superior quality
with features like eco-friendly, no harmful gas emission because it is totally battery
operated and at a reasonable price. Dazzle Ltd. will adopt a twofold strategy. One will
be to introduce a new product in the market, which is priced less than its present
brand of two wheelers like TVS, Bajaj & Hero Honda, and will lead ad campaigns so
that the customer can perceive it as a superior & reliable product. This strategy will
be suited to Dazzle Ltd. since in the automobile battery market, (batteries) is already
seen as a premium product. Looking at the level of success of this particular strategy,
Dazzle Ltd. will go for line extensions at a later stage. The point to be noted here is
that a quality strategy need not be looked at as a small competitor's strategy rather it is
an investment for the long run.
The other strategy will be to hold on to its present brand of batteries. If we critically
examine the success of Hero Honda in recent times we find that it is largely due to its
Splendor model, which is targeted at the lower middle class segment.
B. Product Features:
Pollution noise free two – wheeler
Economical: Rs. 3 -7 per 100 kms.
No diesel or petrol required.
Price range: Rs. 25000 – 40000/- (Inclusive of Tax)
Extremely safe and reliable to drive.
No PUC required.
Battery design: Indigenous and full charge in 60 mins.
Built in Charger
C. Brand Name:
The name of a company will also help to differentiate itself and build image in the
long run. When Dazzle Ltd. will first come to the Indian market as a electronic
battery operated two wheeler manufacturer it will try to use its international name to
pierce the Indian market and revolutionize the two wheeler market. This has been
hardly been the case in the launch of the motorcycle segment. Dazzle Ltd. will
leverage on its international name in order to attain competencies.
D. Product Varieties
Dazzle Ltd. will launch its ELECTRO range of two wheelers addressing the Indian
palate with the first time ever product launched specifically for a local rural & urban
market to some extent. Dazzle Ltd. will position on pricing and its all-pervasive
cheap plank. The Electro Bike MLX will be priced at Rs. 23000-24000 especially
meant for guys segment, Electro Scooty will be priced around Rs. 21000 designed
exclusively for girls, veterans and middleaged and Electro Rick will be introduced as
a product for public transport..
Price Based Marketing Strategy
As Dazzle Ltd. will be introducing 2 variety of bike, Electro Bike MLX meant for
guys segment and Electro Scooty designed exclusively for girls, veterans and
middleaged, discounts will be given to the buyers on cash purchases.
Promotion Based Marketing Strategy
To derive success in the Automobile two wheeler segment it is important to have a
good after sales service channel. Infact a good service channel guarantees a good
reach to the customer which is so vital to derive profits. When we look at the key
success factor that drove Hero Honda & Bajaj, it has been its after sale service.
Geographic Segmentation:
Segmentation of Dazzle Ltd. is done considering the consumer market. The major
markets in India for two – wheeler across all segments is constituted by the western,
Northern & Southern Region. In terms of weight age, the largest sales came from North,
West, South & East respectively according to ORG Estimates.
The leading States in India in terms of two – wheeler population are Gujurat,
Maharashtra, U.P, A.P, M.P, Punjab, Delhi & Rajasthan.
In the past, the Western region (Gujurat & Maharashtra) accounted for motor cycle sales
of approximate 8.39 lakh nos.
Vasai is a major industrial zone of Western Maharashtra & is well connected by rail and
road which is beneficial for procurement of raw materials and marketing of finished
goods and cheap availability of man power.
Due to the above pros, the product has been segmented on the basis of location. Our plant
will be located at Vasai, Maharashtra.
Electro Bike MLX
Electro Bike MLX is specially designed for the Male Customer Group aged between
15 – 40 years due to the following features:
More Milage
Low maintenance
Economical: Rs. 3 -7 per 100 kms
No diesel or petrol required.
No PUC required.
Battery design: Indigenous and full charge in 60 mins.
Built in Charger
Electro Scooty
Electro Scooty is specially designed for the Female Customer Group aged between
18 – 35 years due to the following features:
Light Weight
Extremely safe and reliable to drive.
Front & Rear Hand Brakes
Side Stand
Low maintenance
Auto Start
Pollution noise free two – wheeler
Comfortable Seating Arrangement
Thus, Dazzle Ltd has its target group as 18-40 i.e. the youngsters as well the middle aged
people. Since all the other products have their target group as 25 and above, Dazzle Ltd.
will face less competition in the youngster group. It is providing Indians with new funky
colours which are specially meant for youngsters as now Indian youngsters are shifting
towards western culture. The target group being youngsters the product will enjoy good
market share as it is the product with current trends taken into consideration.
The company is trying to position its product in the minds of the customer as a product,
which is fashion oriented as well as economical and is safe to use.
The tag line of Dazzle Ltd. is “Making Dreams Come Alive.....”.
The Website will be www.edazzle.com
And Logo would be:
Connecting E.V. (Electro Vehicles)
Maintenance
Proper care & maintenance are paramount for trouble free operation & optimum
performance for every Motorcycle.
Dazzle Ltd. offers 6 free services on its motorcycles. The customers must avail these
services after purchase within a year or as per the below mentioned km range, whichever
is earlier:
First Free service By 500km
Second Free service 500-1500 km
Third Free service 1500-3500 km
Fourth Free service 3500-6500 km
Fifth Free service 6500-9500 km
Sixth Free service 9500-11500 km
During the second year, one can with additional pay of Rs. 5000/- take an AMC, wherein
if any part of the bike is damaged it will be replaced by the company for free.
Company’s estimated working life of battery is from 2 ½ - 3 years depending on usage.
It is as simple as recharging mobile phones. All that is required is a 3 pin domestic
electric point. Just plug in the cord and switch on the electricity and the battery gets
recharged automatically. The company is building a network of charging stations in the
near future.
Safety Measures
Bike would be traceable with an in built censor in case of emergency and thus even if
bikes are stolen; there is no need to worry. It has a password protection and if in case it is
forgotten by the customer, just by a call on the helpline and the password would be
delivered according to the customer’s choice as soon as possible.
Customers will be educated on Safe Riding techniques through various audio visual aids.
Safety Instructors will be imparting riding skills as well as education to the customers.
Spares - Features & Benefits
The performance and safety of a bike not only depends on the world-class design and
workmanship assured by Dazzle Ltd. but also on the parts being used in the assembly
line.
Even the finest components manufactured need replacement from time to time. And to
ensure the continued impeccable performance of your vehicle, the spare parts should also
be made and replaced as good as the components fitted by Dazzle Ltd.
To ensure this, we manufacture and procure the replacement parts according to the
specifications and standards set by us.
As a responsible Hero Honda bike owner, we will recommend our customers for their
safety, long life and high performance of bike, to use only Dazzle Ltd. made genuine
parts.
Dazzle Ltd. would be economically priced, stylishly designed, has low running cost, has
good battery capacity and well-developed electronics technology.
25-80 kms on single charge.
No tune ups.
One year guarantee
Easy recharging
Pollution noise free two – wheeler
Economical: Rs. 3 -7 per 100 kms.
No diesel or petrol required.
Price range: Rs. 25000 – 40000/- (Inclusive of Tax)
Extremely safe and reliable to drive.
No PUC required.
Battery design: Indigenous and full charge in 60 mins.
Built in Charger
More Milage
Low maintenance
Light Weight
Comfortable Seating Arrangement
Push promotion strategy involves getting the retailers/dealers to vouch for your product
by giving them larger profit margins and giving them incentives for the number of sales
of your product that are made from their shops/showrooms.
Pull promotion strategy involves promoting your product on a very large scale and
making it visible on the market, thus raising the customers curiosity about the product
and hence inducing them to buy it.
We will give all the retailers/direct-dealers a good profit margin than our competitors are
providing them but not at the initial stage because we are focusing to attract our target
market using diversified means of promotions and advanced technology to our customers
at reasonable price. We will also give them incentives for vouching for our product at a
later stage as we settle down in the market. Hence we have decided not to go for push
promotion strategy at present but instead we have decided to go for pull promotion
strategy.
Road Shows: The company plans to stage road shows, to display vehicles in the
pavilions during various college festivals, like Malhar, Space, Indigo, Bhavams
etc. These vehicles will appeal to youngsters more.
Television advertisements: Advertisements to promote and market our product
will be shown on leading television channels. Major music and sports channels
will promote ECECTRO BIKE MLX as they will reach out to the youth while our
ELECTRO SCOOTY meant especially for female riders will be promoted
through Star, Zee, Sony and Doordarshan etc as it has more female viewers.
Radio is the medium with the widest coverage. Studies have recently shown high
levels of exposure to radio broadcasting both within urban and rural areas,
whether or not listeners actually own a set. Many people listen to other people's
radios or hear them in public places. So radio announcements will be made and
advertisements will be announced on the radio about the product features and
price, qualities, etc.
Print Ads: Daily advertisements in leading newspapers and magazines will be
used to promote the product. Leaflets at the initial stage will be distributed at
railway stations, malls, college areas and various other locations.
Workshops and seminars: Workshops and seminars will be held in colleges to
make people aware about the companies past performance and product features,
its affordability and usage, vast distribution network. Road shows will be
conducted where free trials of the bike would be given.
Banners, neon signs: Hoardings, banners, neon signs will be displayed at clubs,
discs, outside theatres and shops to promote our range of bikes.
Booklets and pamphlets: Booklets will be kept at bike showrooms, retail battery
outlets, etc for the customer to read. These booklets will provide information
about our company, the products offered which suits the customers need
accordingly.
After sales service: The after sales service will add into the appeal for the
Electric Vehicles (E.V.S). First of all, these are maintenance free vehicles. There
is one-year guarantee. Moreover, most of the spare parts are non-corrosive (made
of plastic) and easily available in the market. The company itself provides the
vital parts. The company has developed vendors to manufacture these parts as per
the company’s standard, quality and design. So there will be steady supply of
spare parts to the customer’ s satisfaction. At every dealer counter, full fledged
after sales service has been committed. The vehicles are warranted for one year
from the date of delivery.
It will have a venture with Bharat petroleum. At all the leading BPCL pumps we
will arrange for charging batteries for customers who wish to travel more
kilometer but is left with less power.
Charging would be done at a very nominal charge and the customer has to give
his old battery for charging and take away the spare battery which is kept charged
and continue with his journey without any trouble. But while returning he will
have to return the spare battery and take away his own old battery completely
charged. All this data and check up will be totally computerized and once the
customer exchanges his battery at one of the petroleum outlets of Dazzle Ltd., and
wishes to exchange the battery again at another outlet, all information will be
properly noted down in the computer.
DISTRIBUTION CHANNEL
The Stockist will represent 3 to 4 districts in a State.
The Dealer will represent a district or main City.
The Sub-Dealer shall represent a particular area or taluka.\
The booking agents will be individuals working on freelance basis.\
STOCKIST
DEALERS DEALERS
SUB DEALERSSUB DEALERS
BOOKING AGENTSBOOKING AGENTS
The pricing strategy adopted by Dazzle Ltd. for its two wheeler electronic bikes is
PENETRATION PRICING because it is a total new brand, which is entering a market,
which is already facing immense competition. And breaking this competition and
attracting new requires quality product at low price. Hence our product will be priced low
which will be economical and will encourage new buyers. Hence we have adopted the
penetration pricing method for capturing market share and establishing ourselves in the
market.
The Actual Cost of Production of our ELECTRO BIKE MLX
Our Manufacturing cost Rs. 20000/-
------------------------
The profit earned
By Manufacturer is: 75% (i.e. 15000)
------------------------
Retailer’s buys
From manufacturer is: Rs. 35000/-
------------------------
The margin to
Retailers is: 14.5 %
------------------------
Market cost of
the Product: Rs. 40,000/-
The Actual Cost of Production of our ELECTRO SCOOTY
Our Manufactuing cost Rs. 16700/-
------------------------
The profit earned
By Manufacturer is: 31.75% (i.e. 5302.259)
------------------------
Retailer’s buys
From manufacturer is: Rs. 22002.25/-
------------------------
The margin to
Retailers is: 13.62% (i.e. 2997)
------------------------
Market cost of
the Product: Rs. 25,000/-
Dazzle Ltd. will establish its marketing network in the states of Maharashtra, Gujrat
Rajasthan, Madhya Pradesh, Rajasthan, Chattishgarh and Goa in the future. It will then
gradually extend to all the other states in vector two of its project as detailed in the
Product Market Daigram.
Segmentation of Dazzle Ltd. is done considering the consumer market. The major
markets in India for two – wheeler across all segments is constituted by the western,
Northern & Southern Region. In terms of weight age, the largest sales came from North,
West, South & East respectively according to ORG Estimates.
The leading States in India in terms of two – wheeler population are Gujurat,
Maharashtra, U.P, A.P, M.P, Punjab, Delhi & Rajasthan.
Vasai is a major industrial zone of Western Maharashtra & is well connected by rail and
road which is beneficial for procurement of raw materials and marketing of finished
goods and cheap availability of man power.
Due to the above pros, the product has been segmented on the basis of location. Our plant
will be located at Vasai, Maharashtra.
Strengths:
Fixed capital cost of ownership
Minimum recurring expenses.
Convenience of use
Instant appeal to young fraternity in terms of design
Maintenance free and low wear and tear
Pollution free-noise and air (environmental friendly)
Contributing to national objective and saving
Weaknesses:
Inoperative in areas where power is unavailable.
Travel distance restricted to Km per charge
Battery replacement after 300 cycles of operation.
Opportunities:
Reduction in oil imports
Solar power stations for battery charging.
Light weight plastic grid battery will have an international market.
Export potential.
Threats:
Reaction or competition from existing manufacturers of two wheelers.
Automobiles have become an indispensable part of our lives, an extension of the human
body that provides us faster, cheaper and more convenient mobility every passing day.
Behind this betterment go the efforts of those in the industry, in the form of improvement
through technological research. What actually lie behind this betterment of the
automobiles are the opinions, requirements, likes and dislikes of those who use these
vehicles.
These wheeled machines affect our lives in ways more than one. Numerous surveys and
research are conducted throughout the world every now and then to reveal one or the
other aspect of automobiles, be it about the pollution caused due to vehicle population in
cities, or rising motor accidents and causes, vehicular technology, alternative medicine
and so on.