Professional Documents
Culture Documents
Marketing Project On Suzuki
Marketing Project On Suzuki
Contents
Dedication..................................................................................................................................8
Acknowledgement......................................................................................................................9
Letter of Transmittal................................................................................................................10
EXECUTIVE Summary...........................................................................................................12
Demographics......................................................................................................................14
Economic Condition.............................................................................................................14
Technology...........................................................................................................................15
Market definition..................................................................................................................16
Market size...........................................................................................................................17
Market Segmentation...........................................................................................................17
Target Marketing..................................................................................................................17
Gender:.............................................................................................................................18
Income:.............................................................................................................................18
Family Size:.....................................................................................................................18
Age:..................................................................................................................................18
Occupational:...................................................................................................................18
Positioning............................................................................................................................18
Porter’s 5 Force....................................................................................................................19
4. Threat of substitutes.....................................................................................................20
Atlas Honda......................................................................................................................21
Toyota motor....................................................................................................................22
Hyundai motor.................................................................................................................22
Adams motors..................................................................................................................22
Competitor............................................................................................................................23
Atlas Honda......................................................................................................................23
Toyota motors..................................................................................................................24
Hyundai motors................................................................................................................25
Adam motors....................................................................................................................25
Market trends.......................................................................................................................26
Participants...........................................................................................................................29
Demographics......................................................................................................................30
Income..............................................................................................................................30
Family Size.......................................................................................................................30
Age...................................................................................................................................30
Occupational....................................................................................................................31
Psychographics.....................................................................................................................31
Social Class......................................................................................................................31
Life Style..........................................................................................................................31
Loyalty segments:................................................................................................................31
Company Resources.............................................................................................................32
Financial...............................................................................................................................32
People...................................................................................................................................33
Time.....................................................................................................................................33
Skills.....................................................................................................................................34
Our Vision............................................................................................................................34
Our Mission..........................................................................................................................34
Corporate objectives:...........................................................................................................35
financial objective:..............................................................................................................35
Marketing objective.............................................................................................................35
Corporate culture:.................................................................................................................36
SWOT Analysis.......................................................................................................................37
Strengths...............................................................................................................................37
OEM.................................................................................................................................37
CNG kit............................................................................................................................38
Mechanics........................................................................................................................38
Weakness..............................................................................................................................38
WTO—Deletion Program................................................................................................38
Input Cost.........................................................................................................................38
Protection Level...............................................................................................................38
Opportunities........................................................................................................................39
Baggage Fuel....................................................................................................................39
Threats..................................................................................................................................40
WTO—Parts Indigenization.............................................................................................40
Fuel Prices........................................................................................................................40
MARKETING MIX.................................................................................................................41
Product.....................................................................................................................................43
Introduction:.....................................................................................................................43
Maturity Stage..................................................................................................................44
Levels of Product.................................................................................................................45
Core Benefit.....................................................................................................................45
Actual Product..................................................................................................................45
Augmented Product..........................................................................................................45
Product Classification..........................................................................................................45
Consumer Product................................................................................................................46
Industrial Products...............................................................................................................48
Product Line.........................................................................................................................49
Brand Equity........................................................................................................................51
Automobiles.........................................................................................................................52
Specifications.......................................................................................................................54
Specifications.......................................................................................................................56
Specifications.......................................................................................................................58
Specifications.......................................................................................................................60
APV 1500cc(Imported)..................................................................................................61
Specifications.......................................................................................................................62
Bolan VAN......................................................................................................................63
Specifications.......................................................................................................................64
Specifications.......................................................................................................................66
History..................................................................................................................................67
Price......................................................................................................................................69
General Approaches.........................................................................................................70
Internal Factors.....................................................................................................................72
External Factors...................................................................................................................73
Market-Skimming Pricing................................................................................................76
Market-Penetration Pricing..............................................................................................76
Price-Adjustment Strategies.................................................................................................78
PLACEMENT..........................................................................................................................80
Channel Functions................................................................................................................81
Channel Levels.....................................................................................................................82
Channel Conflict..............................................................................................................83
Channel Dynamics...........................................................................................................85
Channel Design....................................................................................................................87
Channel Management...........................................................................................................88
Retailing Process..................................................................................................................89
Types of Retailing............................................................................................................89
Wholesaling Process............................................................................................................89
Why Wholesalers?...........................................................................................................90
Market Logistics...................................................................................................................90
OBJECTIVES..................................................................................................................90
Warehousing Decisions....................................................................................................91
Inventory Decisions.........................................................................................................91
Transportation Decisions.................................................................................................91
Promotion.............................................................................................................................91
Integrated Communication...................................................................................................92
Push strategy....................................................................................................................95
Pull strategy......................................................................................................................95
Bibliography.............................................................................................................................97
Dedication
Acknowledgement
Every word of praise and gratitude goes to Allah Almighty whose blessings and
bounties are innumerable to realize and count, and due respect to Holy
Prophet (peace be upon Him) who enables us to recognize our creator and
whose teachings are a role model for us to follow in the time of darkness and
despair.
Our extreme and heartiest thanks is for our Respected teacher, who guided us
so well at every stage of this project of Suzuki Motors when we could not
without his guidance the compilation of this report was not possible.
Letter of Transmittal
Mrs. Aaffia Khalid
Faculty Member
As you will see, we have given the profile and history of Suzuki Motors and its
future endeavors. After that we have discussed each P of the promotion mix in detail. At the
end, we have done a detailed SWOT analysis of Suzuki Motors explaining its strengths,
weaknesses, opportunities and threats.
We pay our heartiest gratitude to Ma’am Aaffia Khalid to help us provide such a
base. It has been a great opportunity for us to improve and enhance our knowledge as well as
our learning capacities.
Sincerely Yours,
Qamar-Uz-Zaman (02093026)
EXECUTIVE
Summary
The purpose of this project is to study and develop deep insight into the
organization and have a practical experience of what is going on in the
market. In short, what the market really is.
Our project is all about the marketing mix and the detailed analysis of
the marketing insight of Suzuki Motors which is a very fascinating project.
In this project of ours we have sorted out the procedure how the company
does the purchase and sales and on various issues related to its processes.
We started with the history and then explained the segments and target
groups of the organization. Then we explained the product, price, placement
and promotion one by one in great detail with the help of pictures, list prices,
and much more.
Current Situation –
Analysis of Macro
Environment
Demographics
Society holds a global or summary belief that an organization is proper and worthy of
support. Suzuki takes pride in being the most trusted name all over Pakistan. Its
vehicles are regarded as a status symbol. It is the guiding principles of Suzuki which
has strongly developed trust in the people.
Economic Condition
Pakistan, an impoverished and underdeveloped country, has suffered from decades
of internal political disputes and external ongoing conflict with India. However,
IMF approved the government policies, encourages by different foreign assistance
and renewed access to global market since 2001.
By following these policies government succeed to reverse the situation of
economy during last five years.
Technology
Technological factor also very important and we haven’t control on it.
Technology is grooming with the passage of time. People also want that the
product that they have is full of technology. We never control on technology for
example you launched the product last year and your sale volume on that time is
very high but after sometime due to latest invention a lots of substitute exist in
market which affect on your business so you can’t hold on it.
Current situation of
market and market
analysis
Market definition
Marketing was defined according to its activities and utilities within the organization.
Therefore, different organizations and experts define it differently, as the viewed it
from different angle. The popular definitions of marketing are as follows...
The Webster's: definition goes like this: 1. The act of buying and selling in the
market. and 2. All business activity involved in the moving of goods from the
producer to the consumer, including selling, advertising, packaging, etc."
According to Philip Kotler and Gary Armstrong, two ideal marketing theorist,
“Marketing is a social and managerial process by which individuals and groups obtain
what they need and want through creating and exchanging products and value with
others.”
Market size
First half of the year was the worst. Sales volume during this period has
dropped by 53% compared to last period of last year. Second half was somewhat
better than first half year. As it was grew by 33% over the first half year.
The market size of Suzuki has marginal improved by 2% over the last year in
the organized sector. During the year 593,479 units were sold against 580,604 units
last year. During the first half year Demand was 25% lower than same period of last
year. However this loss of demand was offset by the increased demand latter half year.
Market Segmentation
Dividing a market into smaller groups with distinct needs,
or marketing mixes
Target Marketing
“
Dividing a market into groups based on variables such as age,
gender, family size, family life style, income, occupation, education,
religion, race, generation and nationality
or
Gender:
Suzuki has designed its Alto especially for females by giving it a
unique exterior and interior. It targeted women here.
Income:
Suzuki offers many different products in automobile product line to
make its product available for different income group people. It
targeted his market in all classes i.e. Middle ,Upper and Elite class.
Family Size:
Suzuki has launched Safari and APV to cover the consumer market of
people having big families. Here it targeted big families
Age:
SUZUKI particular products are popular with people of particular
age, i.e. swift and Liana for people 20-45 years old.
Occupational:
Products of SUZUKI are very popular among people belonging to
different occupation, i.e. Managers use Liana, Swift, farmers use
SUZUKI PICKUP, clerical staff use Alto.
Positioning
Small cars have been positioned in Pakistan as city cars, which are easy to
drive, give high mileage, with low operational cost and low price. Because of
the tremendous growth in the small car market, various global car
manufacturers are entering this market and thus leading to growing
competition. This has further led to each manufacturer positioning it, better
than the rest; by upgrading products, several versions, new technology giving
discounts & offers, better financing options.
Target customer –A first-time car buyer looking for the best affordable car in
the market .
Benefit –Good performance, good fuel economy. Good in price as well as
quality.
Value proposition (time of difference) –The trusted and reliable cars with
access to the largest service network and commanding the highest resale
value.
Positioning image – Worlds largest selling cars.
Porter’s 5 Force
The strategic business manager seeking to develop an edge over rival firms can use
this model to better understand the industry context in which the firm operates.
Here are the Porter’s 5 forces.
1. Potential new entrants
2. Bargaining power of buyers
3. Bargaining power of suppliers.
4. Threat of substitutes.
5. Industry Competition/rivalry between competitors.
service must be strong, and they must focus on offering consumers a product
with high durability and value.
4. Threat of substitutes
Consumer preference is changing (Mini cars are being
replaced by compact or midsized cars)
The company was incorporated on November --, 1992 and joint venture
agreement was signed on August ---, 1993. The ground breaking ceremony was
held on April 17, 1993 and within a record time of 11 months, construction and
erection of machinery was completed. The first car rolled off the assembly line
on May 26, 1994. Official inauguration was done by President of Pakistan, Sardar
Farooq Ahmad Khan Leghari. Mr.Kawamoto, President of Honda Motor Company
Limited Japan was also present to grace the occasion. The company is listed on
Karachi, Lahore and Islamabad Stock Exchanges.
On July 14, 1994, car bookings started at six dealerships in Karachi, Lahore, and
Islamabad. Since then the Dealerships Network has expanded and now the
company has sixteen 3S (Sales, Service and Spare Parts) and thirty 2S (Service
and Spare Parts) Pitstops network in all major cities of Pakistan.
Since the commencement of production in 1994, the company has produced and
sold more than 150,000 cars till Oct, 2008.
Toyota motor
Toyota Motor Introduction Toyota Motor Corporation is one of the world‘s leading automakers,
offering a full
range of models, from mini vehicles to large trucks. Global sales of its Toyota and
Lexus brands, combined with those of Daihatsu and Hino, totaled 6.78 million
units in CY2003*. Besides its own 12 plants and 11 manufacturing subsidiaries
and affiliates in Japan, Toyota has 45 manufacturing companies in 26
countries/locations, which produce Lexus- and Toyota-brand vehicles and
components. As of March 2003, Toyota employs 264,000 people worldwide (on a
consolidated basis), and markets vehicles in more than 140 countries. Automotive
business, including sales finance, accounts for more than 90% of the company's
total sales, which came to a consolidated ¥16.05 trillion in the fiscal year to March
2003. Diversified operations include telecommunications, prefabricated housing
Hyundai motor
The Hyundai Atos (also known as Amica and Santro Xing) is a city car produced by the Hyundai.
The original Atos was introduced in 1997. In 1999, it was joined by the less controversially styled
Autos Prime. It uses the G4HC Epsilon straight-4 engine. The mkII version comes with a 1086 cc
G4HG engine.
While most markets have phased out this model in favors of the new Hyundai i10, it is still
being manufactured in India, where it
The Santro was launched in Pakistan in 2000. As of December 2009, Pakistan is the only
country where the first generation autos is still being sold and the model has received no
upgrade
Adams motors
Adam Motor Company, Ltd. was an automobile manufacturer based in Karachi, Pakistan.
They were notable for producing the Revo, which was Pakistan's first indigenously designed
car. Production ceased in 2006 and their assets were put up for sale.
Initially Adam Motor was involved in assembling light trucks from Chinese components,
followed by a four-wheel drive sports utility vehicle.
40%
Atlas Honda motors
Toyota motors
Hyundai motors
Adam motors
49%
1 . Honda in Pakistan has a lower sale value than Suzuki and Toyota.
2. Its Distribution Centers are less people of Lower Class are unwilling
to buy it because of its image as high status car .
3.Honda’s are expensive to buy and maintain then its counterpart
rivals .
“It faces a long road in gaining trust and making ways to
remove the image that Honda’s are unreliable cars”
Toyota motors
STRENGTHS
1.
Toyota has become the generic name in the Pakistan market. Whenever the company
launches the new car in the market it has always the great support of the already market
orientation so the car introduced by it easily covers the introduction stage. People have a lot of
trust for their name and this is why Toyota is the leader in automobile industry.
2.
Toyota has a great strength for its 2.OD car, Toyota is the hot selling diesel engine car in
Pakistan and is the only company offering the diesel engine in this category of cars.
3.
The important edge over the company editors are the ample availability of the spare parts in the
markets. The price of spare parts is comparatively low and availability all over the country has
proved to be beneficial for the company.
4.
Toyota is a financially strong company. This can be seen by analysis of the
financial reports of the previous years.
5.
Toyota vehicles have got a much stronger resale value than other car in
Pakistan. This is why people prefer to buy a Toyota.
6.
Toyota vehicles are made according to the Pakistani environment. No doubt
the other cars are available but Toyota has an edge because it has learnt various conditions of the
Pakistan environment and people. So new additions
Toyota is the only company having the most sophisticated network of dealerships where
customers are treated by professional dealers. There are seventeen dealers in Pakistan where
sales, service and spare parts are offered, leading to convenience for the customers.
There are some weaknesses in the dealership network. The dealers sometimes tend to
deviate from the recommended course of action and principles of Toyota. This results in
customers complaints sometimes.
3.
The company is besieged with internal operating problems which are not very serious.
Because of dependency on Toyota’s principles delivery of cars is done after 4-6 months. This
is because CKD kits are ordered four months before and once they arrive from Japan,
assembly and delivery takes some more time.
4.
A lot of effort is pull into the sales forecasting because of the changing political and economic
scenarios. For this reasons inventory has to be kept low.
5.
The company feels that one weakness is the changing policies of the government and also the
30% cash L/c margin. This has lead to an adverse environment.
Hyundai motors
Strength
It has Strong domestic market
Weakness
It has no new Design
It has no innovations
Adam motors
Strengths
Adam motors is market leader in Automobile Industry with high market share.
Adam motors produce low price car with low fuel consumption.
Adam Motors Limited is India’s largest automobile company, with revenues of Rs.
35651.48 crores (USD 8.8 billion) in 2007-08.
The company’s dealership, sales, services and spare parts network comprises over 3500
touch points.
Adam Motors has been aggressively acquiring foreign brands to increase its global
presence.
weakness
Return on Investment on ADAM motors shares in low.
Adam has not got a foothold in the luxury car segment in its domestic market.
Market trends
The market trends of Suzuki are listed below:
SALIENT FEATURES:
Increasing young population
Changing lifestyle
GDP growth
Current situation –
Consumer Analysis
Natrure of the buying analysis
“ In consumer marketing the relationship between a buyer and a seller is non-personal. Consumers
change their purchasing habits frequently and the buying decisions are always based on physiological,
� melding the user's criteria with the spoken or unspoken company/group criteria,
� the company's needs (or family's needs, etc.) in general and in specific,
Participants
To make this project we make research and surveys and then we get the participants.The
participants of suzuki is as follows:
1: Suzuki Mehran is usually bought by female, teenagers, students and middle class. As it is
economical and unmatched fuel efficiency.
2: Suzuki Liana is usually used by family and business class. As it is a luxury car and can be
found in 1300cc and 1600cc
3: Suzuki Swift is usually used by youngster and teenagers. As it is innovator, unique and
stylish car.
4: Suzuki Ravi is usually used by farmers and transportation of goods. As Suzuki Ravi is the
veritable cargo vehicle with an amazing capacity for load-bearing and durability
5: Suzuki Bolan van is usually used by the school van drivers for pick and drop of students.
Suzuki Bolan Hi-roof gives you everything you ever wanted in a van. It has tough engine to
carry large loads and plenty of room for passengers to enjoy a comfortable day long ride.
6: Suzuki Alto is usually used by business workers, employees and women like that car. As it
Smooth-riding comfort, Functional and easy to use, Sharp looks, Offering maximum
efficiency and powered by a 1.0-litre engine delivering peppy acceleration and responsive
performance, the Alto fully responds to today’s driving needs in smart and stylish fashion.
7: Suzuki APV is usually used by big families as it has large capacity. It has Heavy engine to
carry load, usually used for long drive.
8: Suzuki cultus is most selling car of Suzuki. As it is universal car used
by middle class. Suzuki Cultus assures everyone, exceptional value and quality.
Demographics
Gender
Suzuki ALTO is especially for females as it giving them a unique exterior and interior.
Income
Suzuki Mehran, Alto, Cultus are used by middle class and Suzuki Liana, Swift are used by
upper class.
Family Size
Suzuki Bolan and APV is used by market of people having big families.
Age
Suzuki particular products are popular with people of particular age, i.e. Cultus and Liana for
people 20-45 years old.
Occupational
Products of Suzuki are very popular among people belonging to different occupation, i.e.
Managers use Liana, farmers use Ravi, clerical staff use Alto.
Psychographics
Social Class
Suzuki’s all products offered in Pakistan are for lower uppers, upper middle, and middle
class.
Life Style
Suzuki’s automobile models are for people of different of life styles, i.e. Liana for achievers,
Mehran for survivors.
Consumer expect after sale service and maintenance from the company. And company
provide and treat them well.
Loyalty segments:
Suzuki’s customers are loyal to it as it gives good service and its cars are for all segments.
For example Suzuki APV is for big families and customer with big family is loyal to this car.
Suzuki Mehran is for middle class and students so people related to this class are loyal to the
company.
Current situation –
internal
Company Resources
Financial
To check the financial position of the business we must have
balance sheet to recognize its current position.
Suzuki has largest market share and have largest market growth in
Pakistan.
As shown in Balance sheet below its assets in 2000 were 3458.2
and in 2009 its assets increased to 10043.8
People
Suzuki's people are its strength; they believe in investing in their people to bring out the best
in them. Each Suzuki member lives each Suzuki moment with customer orientation, positive
attitude and the drive to excel. People and employees of Suzuki are well-educated, very
efficient and very good in making customer relationship. Suzuki proud of its people.
Time
Suzuki is using the method “Just-in-time”. Just-in-time (JIT) is a management
philosophy that strives to eliminate
sources of manufacturing waste by producing the right part in the right place
at the right time. Waste results from any activity that adds cost without
adding value, such as moving and storing. JIT (also known as lean
production or stockless production) should improve profits and return on
investment by reducing inventory levels (increasing the inventory turnover
rate), reducing variability, improving product quality, reducing production
and delivery lead times, and reducing other costs (such as those associated
with machine setup and equipment breakdown). In a JIT system,
underutilized (excess) capacity is used instead of buffer inventories to hedge
against problems that may arise. So Suzuki’s customers are loyal to it.
Skills
Suzuki’s people have great skills of marketing. As they
Our Mission
Corporate objectives:
provide high quality reliable and comfortable cars
financial objective:
Suzuki,s financial objectives are to make money.
Marketing objective
main objective is world domination,with regard to supplying cars.
. To increase market share - If a firm is able to increase its market share, it shows that it is
winning customers from its competitors; so many businesses have increasing market share as
one of their key aims.
. To improve the quality of the product or service - In most markets, customers have a choice
about the product or service that they use. If the quality of a product is not as good as that of
its competitors it is likely to loose market share.
Enhancement of Finance
Increase in Responsibilities
Corporate culture:
Corporate culture is the collective behavior of people using common
corporate vision, goals, shared values, beliefs, habits, working language,
systems, and symbols. It is interwoven with processes, technologies, learning
and significant events. In addition, different individuals bring to the workplace
their own uniqueness, knowledge, and ethnic culture. So corporate culture
encompasses moral, social, and behavioral norms of your organization based
on the values, beliefs, attitudes, and priorities of its members.
Corporate culture can be transformed, but leadership to sustain anything that
sweeping has to come from "the top."
The corporate culture of Suzuki is “fosters flexibility and innovation”
Summary of situation
Analysis
SWOT Analysis
Strengths
Increasing Demand for Cars
In Pakistan context there are 9 cars in 1,000 persons which is one of the lowest in the
emerging economies which itself speaks of high potential of growth in the auto sector and
more so in the car production.
Rising per capita income with changing demographic distribution and an anticipated
influx of 30 to 40 million young people in the economically active workforce in the next few
years provides a stimulus to the industry to expand and grow.
OEM
The local OEM of Pakistan is well equipped with enough advance technology and
skilled labor to produce parts according to the desired quality of any foreign company.
CNG kit
The advantage of buying local assembled cars is that they comes with factory fitted
CNG kits at the times when the prices of fuel rising at higher pace internationally.
Mechanics
For local assembled cars mechanics are readily available in market and much cheaper
so the buyer has not to worry about any problem that can occur in the car in long term
whereas the availability for imported cars is a bigger issue for the owners and if somehow
they are able to find one then the mechanics charges much higher than actually it should be
charged.
Weakness
WTO—Deletion Program
THE World Trade Organization (WTO) has rejected Pakistan’s request for the
extension of the deletion program which enabled it to lay down the condition of the local
content requirement (LCR). Under LCR, the automobile and other engineering industry was
required to use locally manufactured parts and accessories in terms of government’s deletion
policy. The condition of the LCR was an aberration to the Clause 5.2 of the WTO Agreement
on Trade Related Investment Measures (TRIMs), Article III–-National Treatment under the
GATT, 1994.
WTO’s decision for not extending its deletion program / LCR condition has varied
impact on Pakistan’s vendor industry, automobile assemblers, car users and the government.
Input Cost
In Pakistan as the inflation is increasing so as the input costs and for manufacturers it
is becoming harder to produce at lower cost. Increasing cost of energy and its unreliable and
inconsistent supply adds up the cost of manufacturing and wastage of resources. It is
estimated that by the year 2012, auto industry consumption of electricity will cross 500 – 600
MW from around 250 - 300 MW, as of now.
Protection Level
Before the TBS was introduced the auto industry was well protected by the
government but now as the import of CKD and CBU is liberalized the protection level to
industry by government is decreased.
In Pakistan conventional machines are not able to meet the precision manufacturing
and the available labor is not familiar with modern technology it caused by lack of
coordination and linkages with Government/Semi Government Supporting Bodies and
Technical Training Institutes
Opportunities
Baggage Fuel
As the fuel prices are rising in world Pakistan should switch to Ethanol Fuel as Brazil
is using. Ethanol Fuel is produced by Molasses. Pakistan is one of the country which
produces good quantity of molasses but the engines of the local cars do not support ethanol so
Pakistan should acquire the Technology to produce ethanol compatible cars. In Brazil they
use 90% Ethanol and 10% petroleum whereas Pakistani cars with default engines can afford
only 3% Ethanol.
Threats
WTO—Parts Indigenization
SMUGGLING OF AUTO PARTS
The auto industry is generally faced by multiplicity of taxes; the presumptive tax
regime has led to increase in prices of imported inputs and the finished goods. Component
manufacturers are struggling to compete with under-invoicing, miss declaration and
smuggling. Import of used parts is still continuing at a large scale. Smuggling, under-
invoicing and dumping of auto parts
Fuel Prices
According to the authorities the fuel prices which currently are Rs 68.8 and are going to
increase by more Rs. 6 by the end of Feb 1,2010.
MARKETING MIX
A Marketing mix is the division of groups to make a particular product by pricing, product,
branding, place, and quality. Although some Day1 marketers have added other P's, such as
personnel, packaging and physical evidence, the fundamentals of marketing typically
identifies the four P's of the marketing mix as referring to:
"Marketing Mix" is set of correlated tools that work together to achieve company's
objectives, they are: product, price, promotion, place.
The set of controllable tactical marketing tools, product, price,place and promotion - that the
firm blends to produce the response it wants in the target market:
attached. This category has grown each year for the past decade while most other
forms have suffered. It is the only form of advertising that targets all five senses and
has the recipient thanking the giver. Public relations are where the communication is
not directly paid for and includes press releases, sponsorship deals, exhibitions,
conferences, seminars or trade fairs and events. Word of mouth is any apparently
informal communication about the product by ordinary individuals, satisfied
customers or people specifically engaged to create word of mouth momentum. Sales
staff often plays an important role in word of mouth and Public Relations
Marketing strategy-
current and the
proposal
Product
PRODUCT LIFE CYCLE
Introduction:
As a new product much time will be spent by the
organization to create awareness of it presence
amongst its target market. Profits are negative or
low because of this reason.
Growth:
Levels of Product
There are three levels of product.
Core Benefit
Actual Product
Augmented Product
Core Benefit
The most basic level is the core benefit, which addresses the
question What is the buyer really buying? When designing the
product Suzuki marketers first define the core benefits or services
that its consumer seeks.
Actual Product
At the second level, product planners must turn the core benefit into
an actual product. Suzuki marketers develop product features,
design, a quality level, a brand name etc.
Augmented Product
Finally, product planners must built an augmented product around
the core benefit and actual product by offering additional consumer
services and benefits.
Product Classification
Products fall into two broad classes based on the type of consumers that use them.
Consumer Product
Industrial Product
Consumer Product
Product bought by final consumer for personal
consumption is a consumer product
Lahore business school
45
Marketers usually classify these products further based on how consumers go about buying
them. It includes:
Convenience Product
Shopping Products
Specialty Products
Unsought Products
Industrial Products
Product Attributes
These include:
Quality
Features
Style
Design
Branding
A name, term, sign, symbol, or design, or a combination of these that identifies
the product or services of one seller or group of sellers and differentiates them
from those of competitors is referred as a Brand ex “SUZUKI MOTORS” and
the process is called branding.
Product Line
A group of products that are closely related because
they function in a similar manner, are sold to the same
customer groups, are marketed through the same types
of outlets, or fall within given price range
The major product line decisions involve:
Product Line Length
Product Line Stretching
Upward
Downward
Both ways
Product Line Filling
Brand Equity
The positive differential effect that knowing
the brand name has on customer response to
the product or service
Automobiles
Motorcycle
All-Terrain Vehicles (ATVs)
Outboard Marine Engines
Internal Combustion Engines
Automobiles
Motorcycles
A utomobiles
Specifications
Specifications
Specifications
Mehran 800 cc
Unrivalled in its class, Mehran is Pakistan’s largest selling car.
More smart features like
Head turning lamp
Matching front grill
Two spoke steering wheel gives it the tidy look
Functional economy, peak performance or unmatched fuel
efficiency, Mehran VXR is the leader
Specifications
APV 1500cc(Imported)
The New APV gives you everything you ever wanted in your
vehicle
Spacious interior for comfort
Tough engine to carry large loads
Plenty of room for passengers to enjoy a comfortable day long ride.
Specifications
Bolan VAN
The Suzuki Bolan Hi-roof gives you everything you ever wanted in a van
Spacious interior for comfort
Tough engine to carry large loads
Plenty of room for passengers to enjoy a comfortable day long ride
Air-conditioned model (dual thrust) has been recently introduced
Specifications
Specifications
Recent Launch
History
With success stories in countries across the globe, the new Suzuki Swift
has embarked its journey in Pakistan. From the very beginning of the new
Swift’s development programme, a dedicated team of Suzuki designers and
engineers collaborated extensively with automotive professionals and motoring
enthusiasts in pursuit of Suzuki’s best compact car ever. Suzuki on track of its
radical programme of innovation, to reaffirm and strengthen Suzuki’s position
as a leader and innovator in compact car segment and to yield vehicles that
embody unique position of company being market leader in automobile
industry. In pursuit of this and satisfying market need of a compact car with
latest technology; Suzuki Engineers went into relentless effort to come up with
new Suzuki Swift and modify it according to the needs and requirement of
Pakistani customer. New Suzuki Swift has short yet impeccable history of
Success, rewards and accolades.
Price
The amount of money charged for a
product or service, or the sum of the values
that consumers exchange for the benefits
of having or using the product or service
the product or service
Considerations in Setting Price
The price the company charges falls somewhere between one that is too high to
produce any demand and one that is too low to produce a profit. Customer oriented pricing
involves understanding how much value consumers place on the benefits they receive from
the product and setting a price that captures this value.
General Approaches
Value Based Pricing
SUZUKI MOTORS uses both cost-based and value based pricing for
its various products.
Types of Cost
Fixed cost – Cost that do not vary with production or sales level
Variable cost – Costs that vary directly with the level of production
Total cost – The sum of the fixed and variable costs for any given level of
production
Cost-Plus Pricing
Break-Even Analysis
Cost-Plus Pricing
Adding a standard markup to the cost of the product
¿ Cost
Unit Cost =Variable Cost +
Unit Sales
Unit Cost
Markup Price=
(1−Desired Return on Sales)
Break-Even Analysis
Setting prices to break even on the costs of making and marketing a
product; or setting prices to make a target profit
¿ Cost
Break E ven Volume=
Price−Variable Cost
Internal Factors
Customer perceptions of value set upper limit for prices and costs set
lower limit. Internal factors affecting pricing include the company’s overall
marketing strategy, objectives, and marketing mix, as well as other
organizational considerations.
Target Costing
PAK SUZUKI MOTORS set prices with consultation with its parent company in Japan.
External Factors
External factors include the nature of the market and demand, competitors’
strategies and prices, and other environmental factors. High taxes imposed by
the government on this industry are one of the major external factors.
The Market and Demand
Competitor’s Strategies and Prices
Economic Conditions
Resellers
Government
Social Concerns
Pure Competition
The market which consists of many buyers and sellers trading
in a uniform commodity
Suzuki Motors does not prevail in such type of market because it offers
different products ranging from very expensive products to reasonable products
and it mainly focuses the middle and upper class.
Monopolistic Competition
The market consists of buyers and sellers who trade over a range of
prices rather than a single market price
Suzuki Motors does not prevail in such type of market because it offers
different products ranging from very expensive products to reasonable products
and it mainly focuses the middle and upper class.
Oligopolistic Competition
The market consists of a few sellers who are highly sensitive to each other’s
pricing and marketing strategies
Suzuki Motors prevail in such type of market because it offers different products
ranging from very expensive products to reasonable products and it mainly focuses the
middle and upper class.
Pure Monopoly
The market consists of a single seller
Suzuki Motors does not prevail in such type of market because it offers different
products ranging from very expensive products to reasonable products and it mainly focuses
the middle and upper class.
Economic Conditions
Economic conditions can have a strong impact on the firm’s pricing
strategies. Economic factors such as boom or recession, inflation, and interest
rates affect pricing decisions because they affect both consumer perceptions of
the product’s price and value and the costs of producing a product.
Resellers
The company must also consider what impact its prices will have on other
parties in its environment. How will resellers react to various prices? The
company should set prices that give resellers a fair profit, encourage their
support, and help them to sell the product effectively.
Government
The government is another important external influence on pricing
decisions. Pricing decisions are subject to an incredibly complex set of
customer, company, competitive and environmental forces.
Social Concerns
In setting prices, a company’s short term sales, market share, and profit
goals may have to be tempered by broader societal considerations.
Market-Skimming Pricing
Market-Penetration Pricing
Market-Skimming Pricing
Approach under which a producer sets a high price for a new high-end product or a
uniquely differentiated technical product is called price skimming. Its objective is to 'skim'
maximum revenue from the market before substitutes products appear. After that is
accomplished, the producer can lower the price drastically to capture the low-end buyers and
to thwart the copycat competitors.
In its initial phases, sets up high prices, in order to "skim" the revenue layer by layer
from the market. It is normally suitable for situations when the quality and image of the
product justify and support the premium price, when an adequate number of buyers are
willing to buy the product at the proposed premium price by the company. Market skimming
is also suitable when the cost of production of a small volume of products is not that
high. Lastly, market skimming is applicable when the competitors of the product are
incapable of accessing the market conveniently.
Market-Penetration Pricing
Strategy adopted for quickly achieving a high volume of sales and deep market-
penetration of a new product. Under this approach, a product is widely promoted and its
introductory-price is kept comparatively lower. This strategy is based on the assumption that
are as follows:
This pricing strategy involves setting a low initial price in the attempt of
penetrating the market on a quick yet productive basis in order to win a large
chunk of the market share. In contrast to market skimming, market penetration
works when the market of the respective product is highly price sensitive or the
production and distribution costs share an inverse relationship with the sales
volume. Another suitable situation for market penetration would be when low
price plays a prime role in defeating and keeping out the competition.
Price-Adjustment Strategies
Strategy Description
Discount and Reducing prices to reward
customer responses such as
allowance pricing
paying early or promoting the
product
Segmented pricing Adjusting prices to allow for
differences in customers,
products, or locations
Psychological Adjusting prices for
psychological effect
pricing
Promotional pricing Temporarily reducing prices
to increase short run sales
Geographical Adjusting prices to account
for the geographic location of
pricing
customers
Dynamic pricing Adjusting prices continually
to meet the characteristics
and needs of individual
customers and situations
International Adjusting prices for
international markets
pricing
Discounts and
allowances
Discounts and allowances are reductions to a basic price of goods or services.
2/10 net 30 - this means the buyer must pay within 30 days of
the invoice date, but will receive a 2% discount if they pay
within 10 days of the invoice date.
3/7 EOM - this means the buyer will receive a cash discount of
3% if the bill is paid within 7 days after the end of the month
indicated on the invoice date. If an invoice is received on or
before the 25th day of the month, payment is due on the 7th day
of the next calendar month. If a proper invoice is received after
the 25th day of the month, payment is due on the 7th day of the
second calendar month.
3/7 EOM net 30 - this means the buyer must pay within 30 days
of the invoice date, but will receive a 3% discount if they pay
within 7 days after the end of the month indicated on the invoice
date. If an invoice is received on or before the 25th day of the
month, payment is due on the 7th day of the next calendar
month. If a proper invoice is received after the 25th day of the
month, payment is due on the 7th day of the second calendar
month.
2/15 net 40 ROG - this means the buyer must pay within 40
days of receipt of goods, but will receive a 2% discount if paid
PLACEMENT
A set of interdependent organization that
help make a product or services available
for use or consumption by the consumer or
business user
Every other P is affected by channel decision. Today, companies are using
multiple channels in a bid to woo customer.
Suzuki Motors has designed its distribution channels very strongly which is
the main cause of its success. The imaginative distribution systems of Suzuki
Motors have helped them in gaining competitive advantage.
Channel Functions
To gather information about potential and current customers ,Competitors
, etc
To develop and disseminate persuasive communication about an offer to
stimulate purchasing.
To reach agreement on price and other terms so that transfer of ownership
can be affected.
To place orders with manufacturer.
To finance inventories at different levels.
To provide storage/movement.
To ensure payment.
Suzuki Motors perform all these function of distribution to get the success
in the modern era. This is one of the main reasons of its success and Suzuki
Motors always try their best to satisfy all the needs and want of their
customers.
Channel Levels
A layer of Suzuki intermediaries that performs some work in brining
the product and its ownership closer to the final buyer is the channel
level. The number of Suzuki intermediary levels indicates the length
of a channel. There are two type of channels
Direct Marketing Channel
Indirect Marketing Channel
Marketing channels of Suzuki Motors consist of firms that have partnered for their
common good
Each channel member of Suzuki Motors depends on the others
Each channel member of Suzuki Motors plays a specialized role in the channel
The overall channel success of Suzuki Motors depends on the success of individual
channel success
Channel Conflict
Disagreement among marketing channel members
on goals and roles-who should do what and for
what rewards is called channel conflict.
The disagreement over goals, roles and rewards among different channels
of Suzuki Motors sometimes generate channel conflict.
Horizontal conflict of Suzuki Motors- conflicts occurs among firms at
the same level of the channel of Suzuki.
Vertical conflict of Suzuki Motors- conflicts between different levels of the same channel
of Suzuki.
Causes of Conflicts
Main causes of conflicts in Suzuki Distribution Process are:
Goal incompatibility
Unclear roles and rights
Differences in perceptions
Cooptation
Joint membership in and between trade association
Solutions to Conflict
When conflict is acute, there are three solutions:-
Diplomacy
Mediation
Arbitration
Diplomacy
Each side sends a person /group to meet with its counterpart to resolve conflict
Mediation
Resorting to a neutral third party who is skilled in conciliating their interests
Arbitration
When two parties agree to present their argument to 1 or more arbitrators and
accept their decision as final and binding
Channel Dynamics
Suzuki uses following types of marketing channels:
retailers act as a unified system. One channel member owns the others, has
contracts with them, or has so much power that they all corporate.
Types of VMSs
Corporate VMS
Contractual VMS
Administered VMS
Corporate VMS
A vertical marketing system that combines successive stages of
production and distribution under single ownership – channel leadership is
established through common ownership.
Contractual VMS
A vertical marketing system in which independent firms at different levels of
production and distribution join together through contracts to obtain more economies or sales
impact than they could achieve alone. A contractual VMS in which a channel member called
a franchiser, links several stages in the production process is called a franchise organization.
Administered VMS
A vertical marketing system that coordinates successive stages of production and
distribution, not through common ownership or contractual ties, but through the size and
power of one of the parties is called administered VMS.
Suzuki Motors has mainly focused on this channel because it is considered to be best
for automobiles companies and also give a lot of benefits.
Benefits
Important benefits of multichannel marketing systems are:
Channel Design
The channel design decisions include:
Analyzing customer needs
Establishing Channel Objectives
Types of intermediaries
Number of marketing intermediaries
Terms and Conditions
Types of Intermediaries
A firm should identify the types of channel members available to carry out its channel work.
Suzuki Motors uses the strategy of exclusive distribution for automobiles and
motorcycles but there is a room for selective distribution for motorcycles.
Channel Management
Selecting channel members – financial market reputation , servicing ability
Training channel members – esp. , dealers , salesman
Evaluating channel members – carrot/stick
Modifying channel arrangement – effecting changes when necessary.
Retailing Process
All activities involved in selling goods or services directly to find customer for
personal, non - business use. Any organizing selling to find customer is retailing.
Types of Retailing
Specialty stores
Department stores
Supermarket
Convenience store
Discount Store
Off Price Retailer
Hyper markets
Catalog Showroom
Wholesaling Process
Wholesaling process includes all activities involved in selling goods/services to those
who buy for resale or business use and excludes manufacturers, farmers, retailers, etc.
Why Wholesalers?
More contacts/rapport
More assortments
Customer benefit from bulk sales/buying
Warehousing
Transportation
Financing
Risk sharing
Market information
Market Logistics
Deciding on company value proposition to consumer
Deciding on best channel design / network to reach customer
Operational excellence in sales forecast, warehouse, management, transportation, and material
management.
Implementing Solution with Best MIS, equipment, policies, and procedures.
OBJECTIVES
M= T + FW +VW + S
M= Total logistics cost of system
OBJECTIVES = MINIMIZE M
Market Logistics Decisions
The marketing logistics of marketing logistics decisions of Suzuki Motors include:
Warehousing Decisions
Company must decide on number of inventory stocking locations. To reduce warehousing
and inventory stocking duplication costs the Suzuki Motors may centralize its inventory in
one place and use fast transportation to fulfill orders. Trend is “automated” warehousing
where computers handle everything and issuing invoices.
Inventory Decisions
When to order (reorder point)
How much to order
Inventory carrying cost
Just in Time
Transportation Decisions
There are six types of transportation system in Pakistan – Rail, Air, truck, waterway, pipeline
and internet
Promotion
A company’s total promotion mix also called
its marketing communication mix consist of
the specific blend of
ADVERTISING is any paid form of non-personal presentation and promotion
of ideas, goods or services by an identified sponsor.
Integrated Communication
Carefully integrating and co-coordinating the
companies many communication channels to
deliver a clear consistent and a compelling
message about the organization and its
products.
What do they read/attend/listen to/log onto? How much of your dissemination might
be simply word of mouth and networking at particular events? If that works for you, fantastic;
don’t discount it! Equally, other partners can help your message get across and often even
strengthen it.
5. What bite-sized messages can you break your themes down to?
Don’t confuse through making a message too complex or irrelevant. Are the end-users
really going to need to know all about how the technology works? Focus on what each person
needs to know and tell them simply and succinctly. Avoid jargon and too much background.
If people want that they can get it later. Less is more, as long as less gets to the point!
7. And finally
Map all these back to objectives and main themes – keep it focused on the end goals!
Suggestion and
recommendations
World trade organization (WTO) has rejected their program of deletion. We
suggest they must start an alternative program for extension of their
growth. So that their market growth and market share do not declined. To
reduce their input cost they must use other methods for producing
resources so that they can lower their cost of production. They must make
trust with government so that government give them security and
protection. They must train their workers to use innovations and new
technology as workforce is backbone of the company. We recommended
them that they must increase their production and give more beautiful and
heart touching look to the car with good system and service.
Bibliography
www.paksuzuki.com
www.google.com
www.informaworld.com
www.pama.com