Professional Documents
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TOYOTA COROLLA
MARKETING CONCEPT
Marketing is the process associated with promotion for sale of goods
or services. It is considered a "social and managerial process by
which individuals and groups obtain what they need and want through
creating and exchanging products and values with others." It is an
integrated process through which companies create value for
customers and build strong customer relationships in order to capture
value from customers in return.
STRATEGIC PLANNING
Strategic planning is an organization's process of defining its
strategy, or direction, and making decisions on allocating its
resources to pursue this strategy, including its capital and people.
Various business analysis techniques can be used in strategic
planning, including SWOT analysis (Strengths, Weaknesses,
Opportunities, and Threats) PEST analysis (political, economic, social
and technological)
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Strategic planning is the formal consideration of an organization's
future course. All strategic planning deals with at least one of three
key questions:
1. "What do we do?"
2. "For whom do we do it?"
3. "How do we excel?"
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MARKETING PLANING
A marketing plan is a written document that details the necessary
actions to achieve one or more marketing objectives. It can be for a
product or service, a brand, or a product line. Marketing plans cover
between one and five years. A marketing plan may be part of an
overall business plan. Solid marketing strategy is the foundation of a
well-written marketing plan. While a marketing plan contains a list of
actions, a marketing plan without a sound strategic foundation is of
little use.
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regularly questioned, because the validity of the whole
marketing plan is reliant upon the accuracy of the input from
this system, and `garbage in, garbage out' applies with a
vengeance.
MARKET SITUATION
Current Market Situation
(i) REGIONAL MARKETS:
The auto market is one of the largest segments in world trade. The
annual size of automotive export trade in the world has grown to a
massive level of over US$ 600 billion, this account for about 10 per
cent of the world export. Changing models, improving fuel efficiency,
cutting costs and enhancing user comfort without compromising
quality are the most important challenges of the auto industry in a fast
globalizing world. Hence there is a need for exploring the industrial
complementarities in the region for better quality, favorable costs, fuel
efficiency and attractive designs. Therefore, the requirement of
information exchange in the region is much more pronounced now
than ever before for keeping the auto industry afloat and competitive.
The objective should not be only to understand each other’s
comparative advantage but also to explore mutual complementarities
as well as to build an early warning system on the trends in industry
and changes in user preference to brace for the challenges
confronting the auto industry. Mutual consultation among the
countries of the region therefore assumes the proportion of an
abiding imperative for regional capacity-building and preparing the
countries to meet the requirements of the new economy through
research, advisory services, information dissemination and exchange
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of country experiences, besides joint ventures and technology tie-
ups.
Pakistani market has lesser penetration for cars. Eight in every one
thousand in the country have the cars. The same figure is 10, 12 and
21 in every one thousand in India, China and Indonesia respectively.
This is also a fact that from 1993 to 2004 the car industry was
working below capacity as the car market had been staying below
50,000 units per annum. In the year 2005-06 the industry produced
49,656 units against its installed capacity of 108,000 units per year.
The total car production stood at 120,000 units in 2007-08 compared
to 80,000 units in the previous financial year. This indicates that the
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response was very quick. The car industry is on the track and it is
poised to produce a more than 215,000 units this fiscal.
So far, Pak Suzuki, Honda Atlas and Indus Motor have been
dominating the market, emergence of competition was experienced
by the entrance of Dewan Farooque, Daihatsu and Hyundai Motors in
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the market with a number of new product lines. This intense
competition has totally changed the paradigm of Auto Industry in
Pakistan. Pak Suzuki has been a sole market leader in assembling
800cc and 1000cc small passenger cars as well as 1000cc jeeps,
Potohar. In 1993, Toyota started its operation and in the proceeding
year 1994 Honda Atlas has commenced its operation in Pakistan as
the main competitors in 1300-2000cc segment but the Suzuki has an
edge over the market with 1300cc (Margalla) Baleno.
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The demand in the auto sector in Pakistan is skewed towards small
cars. Due to this trend Pak Suzuki Motors enjoys a monopoly in the
small-car market.
Product Situation
Toyota Corolla is the market leader in its class. Toyota Corolla is
manufactured both in Diesel and Petrol engines i.e. 2000cc diesel
and 1300cc and 1600cc petrol versions. Its main attributes are:
Competitive pricing.
High reliability.
Easy availability of spare-parts.
High goodwill.
Aggressive styling.
After sales services.
Swift distribution channels.
High resale value.
• Decent safety features.
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Toyota Corolla is the market leader in the 1300cc and higher
engines.
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cars. Toyota Corolla is considered to be the most successful car in
Pakistan.
Exterior- L x
4530 x 1705 x 1480
W X H (mm)
Exterior- L x
1915 x 1430 x 1230
W x H (mm)
Wheelbase
2600
(mm)
Minimum
Turning 4.9 m
Radius
Engine Type 2NZ-FE 1 ZZ-FE 2C
Engine
Displacement 1299 1794 1975
(cc)
Fuel System EFI VVTi Fuel Injection
Max.Output 60K KW @
100kw@6000 rpm 53 kw @4600 rpm
(SAE-NET) 6000 rpm
Max.Torque 119 Nm
171 Nm @4200 rpm 131 Nm@ 2800rpm
(SAE-NET) @4400 rpm
Transmission 5 M/T 5 M/T 4 A/T W / OD 5 M/T
ECT Switch X X X 0 X X
ABS with
Brakes Ventilated Ventilated
ABS with Brake Assist Brake
(FR/RR) Disc/Disc Disc/Disc
Assist
Suspension Leading Arm, McPherson Strut Coil Spring/ETA Torsion Beam,
(FR/RR) McPherson Strut Coil Spring
Stabilizer Bar Front/Rear
Steering
Power
System
175/70
Tires 175/70 R14 185/65 R14 185/65 R14
R14
Fuel Cut
X X 0 0 X 0
System
Exterior
Antenna Glass Embedded Print Antenna
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Bumpers Coloured
Front Head
4 Lamp Multi-reflector
Lamps
Rear Lamps LED (Light Emitting Diode) Type
Power
Door Mirrors Manual Power (Colored) Manual
(Colored)
Door Sash
0 0 0 0 0 0
Black
Var-
Front Wipers Intermittent Var-Intermittent Intermittent
Intermittent
Fog Lamps X X 0 0 X 0
High-
mounted Stop X 0 0 0 X 0
Lamp
Laminated/
tinted 0 0 0 0 0 0
Windscreen
Mud Flaps Colored
Black Colored (RR only) Black
(FR/RR) (RR only)
RR Garnish Colored
Side Impact
0 0 0 0 0 0
Bars
Side
Protection Black Chrome Black Chrome
Molding
Side skirts X X 0 (Colored) X 0 (Colored)
Wheel Caps full
Wheel Rim Steel
Interior
Air
0 0 0 0 0 0
Conditioner
Cassette
Player
0
W/AM/FM 0
0 0 0 (with Mp3
Radio (with Mp3 CD Player)
CD Player)
(Remote
Control)
Central Door
X 0 0 0 X 0
Locking
Digital Clock 0 0 0 0 0 0
Digital Trip
0 0 0 0 0 0
Meter
Door Trim Semi Fabric
Foot Rest 0 0 0 0 0 0
Heater 0 0 0 0 0 0
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Key
Reminder 0 0 0 0 0 0
Warning
Leather Gear
X X 0 0 X 0
Shift Knob
Light on
0 0 0 0 0 0
Warning
Optitron
X X 0 0 X 0
Meter
Power
X 0 0 0 X 0
Windows
Reverse
X X X 0 X X
Gear Warning
0
RR Seat Arm
X X 0 (with Cup Holder) X (with Cup
Rest (Center)
Holder)
RR Console W/2 Level
W/Lid W/Lid W/2 Level Lid (F) W/Lid
Box Lid (F)
RR Head
Adjustable
Rest
Roof Lining Molded
Seat Belt
3 Point ELR x 2 (W / Adjustable Anchorage)
(FR)
3
point
3 Point ELR
ELR
Seat Belt 3 Point ELR x 2, x2,
X x 2, X
(RR) Lap Type x 1 Lap Type
Lap
x1
Type
x1
Seat Material Fabric
Shift Position
X X X 0 X X
Indicator
Speaker 2 4 6 2 6
SRS Air Bag 0
X X 0 (Electronic) 0
(Drive) (Electronic)
Steering 4 Spoke
3 Spoke 4 Spoke Leather 3 Spoke
Wheel Leather
Sun visor D + P W/Mirror and Card Holder
Tachometer 0 0 0 0 X 0
Tilt Steering 0 0 0 0 0 0
Trunk Lamp 0 0 0 0 0 0
Wood Grain
X X 0 0 X 0
Finish
Wood Grain
Finish on Arm X X 0 0 X 0
Rest
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PERFORMANCE
VVT-I (Variable Valve Timing - intelligent)
The powerful 1.8 liter VVT-i engine offers smooth and seamless
delivery of power, thanks to optimal timing achieved by using
Toyota's proprietary VVT-i (Variable Valve Timing - intelligent)
technology
SAFETY
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designed to dispense impact energy through the rest of the structure,
while keeping the reinforcement cabin intact, protecting passengers.
PRICES
Competitors Situation
SUZUKI MOTORS:
Pak Suzuki’s sales during FY08 portrayed 31 per cent upsurge. Sales
figures of Pak Suzuki Motor’s during FY08 posted sanguine growth at
31 per cent to 99,104 units compared to 75,720 units during FY07.
On MoM(month to month) basis, sales figures increased by 3.9 per
cent to 11,247 units during June compared to 10,824 units in May
2006. Pak Suzuki is the market leader in the 1000cc and lower
segment of cars with sales of Suzuki Mehran, Suzuki Alto and
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Suzuki Cultus at 35,982 units, 16,823 units and 21,390 units
respectively. The company has replaced Suzuki Baleno with Suzuki
Liana during the period and the product is getting acceptance in the
market. Sales figures of Suzuki Liana remained on the ascending
trend with 1,535 units during June compared to 1,187 units in May.
Honda:
Dewan's presence in the market will give the major move to the auto
industry in Pakistan. The intense competition will give the benefit to
the potential buyer in the market.
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During FY08, Hyundai Shahzore’s sales stood at 9,234 units, 15 per
cent higher compared to 8,012 units previously. On the other hand,
Hyundai Santro’s sales remained almost intact at 7,031 units during
FY08 as against 7,009 units last year due to intense competition from
small imported cars.
Daihatsu:
Daihatsu, another new player in the market with its Cuore 850 cc,
increased the competition in the market . Daihatsu and Indus Motor
signed an agreement to launch the Coure in market. The project
worth Rs 750 million was developed at Port Qasim between Daihatsu
and Indus Motor to produce Coure. Daihatsu also heated up the
competition in small car segments.
Suzuki for the first time faces competition in small car business. It is
for the first time that Daihatsu will produce its car in Toyota Plant in
Karachi. The assembly plant of Daihatsu has the capacity to produce
10,000 Cuore cars in the year. But the expected level of output in
future will be some about 5000 cars in the starting year of its
operation.
Distribution Situation
Toyota's corporate philosophy revolves around customer satisfaction,
which is symbolized in the 3S Concept. Toyota is the Pioneer in the
3S System, which offers Sales, Service and Spare Parts all from the
same facility.
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IMC's dealerships are equipped with Toyota and Daihatsu special
Service Tools (SSTs), modern state-of-the-art computerized auto
servicing and diagnostic equipment. The repair jobs are under taken
by trained and qualified staff. Service staff training and development
are always a priority at Indus Motors.
Karachi (7), Quetta (1), Multan (2), Lahore (6), Faisalabad (1),
Sargodha (1), Mirpur AK (1), Rawalpindi (1), Islamabad (2), DI Khan
(1), Peshawar (1), Mardan (1), 25 Dealers in 14 Cities.
• Engine Analyzers
• Computerized 4 wheel alignment equipment
• Paint Booths
• Special Service Tools
• 2 Post Auto Lifts
• Wheel Balancer
• Frame Aligner (some dealers)
• Wide Range of Garage Equipment
• Body Repairing Equipment
• Electrical Service Equipment
• Other computerized Equipment and Testers
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growth of over 6.5 percent for the last two consecutive financial
years.
The major factors that really revolutionized the market are the
introduction of bank leasing and financing at a larger scale than
imagined. Flushed with liquidity, the banks also enhanced their credit
disbursement to the private sector at very low mark up rate. Similarly,
the economic condition of the people has improved to some extent
and they also went for buying cars. There was also a surge in
remittances of expatriate Pakistanis since 2001. With these
developments the passenger cars demand has increased thus
resulting in a gap between supply and demand. This problem has
perturbed a large segment of society. However, the prime victim of
this episode is itself the car industry of Pakistan. There has been
consistent criticism of the car manufacturers at every possible level
despite the fact that this increase in demand is actually offering a
unique opportunity for them to penetrate in the market.
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06. The government says that the import of used cars has been
facilitated only for the overseas Pakistanis. But the fact remains
otherwise if properly analyzed. Numbers of auto dealers are openly
trading imported used cars and in some cases massive under
invoicing is resorted to.
During July 2005 until May 2006, 34,723 vehicles have entered
Pakistan, which indicates a 225% rise as compared to the previous
fiscal year in which only 19,658 vehicles were imported. This
alarming trend is setting off warning signals for the local automakers
who were disheartened by the budget and the government’s
allowance in facilitating a new tax regime for the new admissions in
the auto sector.
The local auto industry sees the new budget as a move by the
government in discouraging the local car makers as the new policies
will lead them to eventually scrap their capacity enhancement plans.
These figures reveal that the import of cars facilitated not the middle
class but the elite segment of society.
This small majority who prefer the cars are not concerned about the
cost or the availability of the spare parts in the local market. The local
auto sector has repeatedly reminded the government that the
facilities which are being offered under various schemes are
continuously being violated by dealers and non- genuine buyers who
sell these used cars which are in reality imported by overseas
Pakistanis and are in fact breaking the law as these vehicles are only
to be used by members of family.
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Here one must know that import is done of some vehicles, which are
not suitable for the roads of Pakistan. They are also not fit as far as
the fuel specification generally being observed in the country. Most of
expatriates are exploited by the used car dealers as service and back
up facility remain unavailable in the market.
On the other hand this could give really a very serious blow to the
local industry’s growth prospects in the long run. Over 400,000
people are employed by the car industry. Their employment could be
at risk due to import of used cars which offers no employment. Unlike
the imports, with the local manufacturing the technology is also
transferred.
The significant aspect of this episode is that the import of used cars is
contributing much to the rising trade deficit, which has touched an
alarming level in the current financial year. The used car import is
capital intensive business. The local manufacturing leads the country
self-reliance and other option will leave the country dependent on
foreign sources.
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underpowered, fuel efficient car is required. This would not only
require lesser fuel intake but will also be comparatively cheaper.
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development. Approach is fast-track. The policy focus is shifting to
the provision of the following requirements; namely:
• Upgrading technologies
• Enhanced productivity
• Well-trained manpower
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SWOT ANALYSIS
Strengths
Competitive pricing.
High market share.
High durability.
Easy availability of spare parts.
Aerodynamic body shape.
Elegant body features.
Comfortable ride.
Luxurious car interior.
High goodwill.
Prestigious car history.
Good resale value.
Swift distribution channels.
Updated safety features (Air-bags, seat-belts, ABS braking,
Safety beams etc.)
• Low fuel consumption
• As production of vehicle is based on foreign joint ventures of
Japanese origin, the product quality is of international standard.
Weaknesses
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People often criticize the breaking of the car although that
braking system of the car has been updated to ABS but still the
body rolls when the brakes are applied at high speed.
The cheesy of the car is not stable while doing high-speed
sharp turns.
The body of the car is too heavy.
The rims and tires of the car are not impressive.
• The cars steering is a bit light and the driver cannot feel the
road.
Opportunities
Making a sporty version of the car just like the CIVIC TYPE-R,
this is the faster racing version of HONDA CIVIC having 200bhp
and a sports body frame.
Extra market can be captured by introducing Company fitted
CNG Kitts in the car.
Threats
Swift competition from other manufacturers’ mainly Japanese
and Korean car-makers.
High oil prices resulting in decrease in demand of fuel thirsty
sedans. But the fuel Consumption of Toyota Corolla is fairly
decent.
Global inflation due to increase in population and high oil prices
may result in decrease in demand of sedans.
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Increase in demand of other cars may result in downward trend
of the brands goodwill.
Lower prices of Korean car manufacturers may be a threat in
the future. But presently Korean cars are not making a big impact
in the market because of reliability and resale problems.
• Currently Pak Suzuki is posing a threat as Pak Suzuki is
producing cheap cars and is targeting the lower-middle and
middle income group consumers.
• Permission given by the Government to the overseas
Pakistanis to import used cars in Pakistan.
Issue analysis
Main issues concerning the Toyota Corolla are:
a) Should it develop a Sports version of the car, like in the case of
Honda making CIVIC TYPE-R to complement Honda CIVIC?
b) Should company fitted CNG kits be introduced in the cars?
c) Should it increase its prices?
OBJECTIVES
To obtain the production target of 29,000 units (current: 25,100)
by the end of year.
To increase market share from 25% to 29%.
To achieve internal growth rate of 50%.
To increase brand awareness among consumers target market.
To earn rate of return on investment (ROI) of 10%.
Produce net profit of 2.14 billion with a target net profit margin
of 6%.
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To increase sales volume from current 24,344 units to about
27,000 units annually.
MARKETING STRATEGY
Product Development:
Pricing Strategy:
The prices of the present Corolla should be reassessed for the 1.8
Corolla Altis VVT-i (Manual and automatic) units which are the front
line competitors to the new Honda Civic 2006.
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The prices for the above model should be increased up to a minimum
of Rs. 30,000 because of the following reasons:
The new Honda Civic is charging from Rs. 1.32 million to 1.5
million, whereas Corolla being the market leader is charging
from Rs. 1.22 million to 1.31 million (Corolla Altis M/T 1.8L
and Corolla Altis A/T 1.8L) respectively.
As the demand for Toyota Corolla is considerably more than
the supply, thus, an increase in prices will not harm the current
demand.
Due to double-digit growth in inflation and subsequent increase
in production costs.
ACTION PROGRAMS
To increase its sales revenue and to achieve the production target of
52,000 units by the end of the year, the company should take the
following steps:
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PROJECTED FINANCIAL STATEMENTS
(Rupees '000’)
June March
30,2009 31,2008
ASSETS
NON-CURRENT ASSETS
Fixed assets 1,630,541 1,484,672
Long-term loans 2,631 1,462
Long-term deposits 5,163 5,181
Finance under musharika arrangements 9,503 7,986
1,647,838 1,499,301
CURRENT ASSETS
Stores and spares 278,355 200,256
Stock-in-trade 5,361,489 4,142,145
Trade debts 1,740,247 1,139,092
Current maturity of finance under musharika 3,589 5,844
arrangements
Loans and advances 1,051,100 448,039
Short-term prepayments 310,938 49,044
Accrued mark-up 191,302 98,356
Other receivables 2,414,822 1,620,686
Taxation - net - -
Cash and bank balances 15,206,585 9,639,674
26,558427 17,343,136
TOTAL ASSETS 28,206,265 18,842,437
EQUITY
SHARE CAPITAL
Authorized capital 1,000,000 1,000,000
100,000,000 (June 30, 2007:100,000,000)
Ordinary shares of Rs 10 each
Issued, subscribed and paid-up capital 786,000 786,000
Reserves 8,325,895 4,613,023
9,111,895 5,399,023
LIABILITIES
NON-CURRENT LIABILITIES
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Liabilities against assets subject to finance lease 877,378 7,883
Deferred taxation 55,556 58,469
932,934 66,352
CURRENT LIABILITIES
Trade and other payables 3,702,338 2,834,543
Advances from customers and dealers 14,056,681 10,290,208
Accrued mark-up 56,361 28,110
Current portion of liabilities against assets subject 4,386 5,552
to finance lease
Taxation- Net 347,160 218,649
(Rupees '000’)
June March
30,2009 31,2008
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INDUS MOTOR COMPANY LIMITED
CASH FLOW STATEMENT
FOR THE YEAR ENDED JUNE30, 2009
(Rupees '000’)
June March
30,2009 31,2008
CASH FLOWS FROM OPERATING ACTIVITIES
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Controls/Feedback
The goals and objectives that are set out and the targets mentioned
in Projected Financial Statements should be evaluated at every
stage. Necessary corrective measures should be taken if any
deviation is found from the predetermined benchmarks.
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