Thesis on (Daewoo Express Pakistan

)

Submitted by: Shahid Zaman Roll no # S-06-001 0334-8953309

Daewoo Express Pakistan
The role of marketing mix in the transportation industry

DEDICATION

“The Holly Prophet Mohammad (PBUH) from where all systems and standards for quality can be downloaded directly, which are applicable everywhere; from daily life to the dynamically changing business environment”. & “My Dear parents and Teachers who taught me the true meaning of life” And my dear friend Mohammad Makki, , Ozaif Malik, Asif Mehdi, Amin ul Hassan, Faisal Balakot, Fariha & Fatima _______________________________________

ABSTRACT

Transportation sector plays very vital role in the economic development of a country. Transport in Pakistan is extensive and varied but still in its developing stages. Thousands of people travel daily through public and private transport to reach their destination within the city and out of city. The most common mode of transportation in Pakistan is road. However the fleet of buses used tends to be in horrible shape and is not airconditioned. The people are suffering because of bad conditions of buses, rude behavior of conductors and others, huge frights, overloading on busses, delaying of buses and unavailability of conveyance. Pakistan’s current population is approximately 170million whereas the condition of transportation is not much satisfactory. However during the past few years there have been good improvements but yet not enough.

Daewoo express buss service is playing a very important and unique role in the overall transportation sector of Pakistan. Although Daewoo service is in a monopolistic position in the market, but the proposed study will address the concept of marketing mix and its implementation in view of Daewoo service. My findings suggest that thorough implementation and practice of marketing mix will add value to the service and further strengthen its position with respect to market share.

Table of Contents

Acknowledgements Abbreviations Abstract
CHAPTER 1 Introduction
1 Introduction
Outline of the Thesis

xi xii xiii
Page No.
01
05

CHAPTER 2 Background & History
2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 Background & history Daewoo Group Early History Established Joint Ventures in 1980s to Expand Outside Korea Late 1980s Crisis in Daewoo Shipbuilding Aggressive Overseas Expansion in the 1990s Pre-Millennium Collapse Daewoo in Pakistan Starting in Pakistan Management Departments Investment 06 06 07 08 11 12 15 17 18 18 19 19

CHAPTER 3 Methodology
3.1 Methodology 21

3.1.1 Philosophical approach 3.1.2 Research approach 3.1.3 Research design 3.1.4 Qualitative vs. quantitative approach 3.1.5 Case Study. 3.2 Data collection. 3.2.1 Primary data 3.2.2 Secondary data 3.2.3 Data analysis 3.3 Trustworthiness of research 3.3.1 Validity of research. 3.3.2 Reliability of research 3.3.3 Generalization 3.3.4 Limitations and strengths of methodological approach 3.4 3.5 Ethical considerations Summary of methodology

22 22 23 24 25 26 27 30 31 32 32 33 34 34 35 37

CHAPTER 4 Theoretical Framework
4.1.1 Defining Framework 4.1.2
4.1.3 4.1.4 4.1.5 4.2 4.3

38
39 Marketing
Marketing Mix Defining the Framework of Marketing Mix Basics in Marketing Mix

39
40 41 41 42 43 43 44

Principals of Marketing Mix Elements of Marketing Mix Framework 4.3.1 4.3.2 Price Product

4.3.3 Place 4.3.4 Promotion 4.4 The 7p Concept of Marketing Mix 4.4.1 People 4.4.2 Process 4.4.3 Physical (evidence) 4.5 Frameworks Strategies 4.5.1 Product Strategies

45 46 47 47 47 47 48 48

4.5.2 4.5.3 4.5.3 4.5.4 4.5.5

Product Decisions Pricing Strategies Types of Pricing Strategies Place Strategies Promotion Strategies

50 51 51 53
54

4.6

Push & Pull Strategies 4.6.1 Above a pull strategy (left) push strategy (right).

58

58

4.7

Summary of the Theoretical Framework

59

CHAPTER 5 Empirical Part
5.1 5.2 5.3 Daewoo Bus Service Customer Summary of the Empirical Part

61
62 78 91

CHAPTER 6 The Analysis
6.1 Marketing mix:

92
93

6.1.1 Price 6.1.2 Place: 6.1.3 Promotion:
6.1.4 Product 6.3 Summary of Analysis 6.3.1 Conclusion & suggestions 6.3.2 Future Research

93 96 98
101 104 105 106

References

107

List of Diagrams
Diagram 4.1 Diagram 4.2 Diagram 4.3 Diagram 4.4 Diagram 4.5 41 49 53 56 58

LIST OF CHARTS
Chart 1 Chart 2 Chart 3 Chart 4 Chart 5 Chart 6 Standard of busses Location of terminals Fairs Daewoo’s recognition Advertising and promotion Reasons of traveling 79 81 82 84 86 88

Chart 7

Fair of Daewoo

90

Acknowledgements

God Almighty is worthy of all acknowledgments………….. No one can say that I am perfect, everyone should admit that without the help of ALLAH and His people a man can’t get anything so I bow my head before almighty Allah with gratitude. I am also very much thankful and presents salute to many individuals who have helped me in shaping this research paper .I am also very much thankful to lot of former fellows and contemporary colleagues who took the time and trouble during the last few days to speak to me about the way this text could be further improved. I have no words to express my gratitude to my supervisor, Mr. Sardar Ejaz Ahmed, G. C. M. S Abbottabad, for his intellectual guidance, constructive suggestions, patience and wise comments without which it could have been rather difficult for me to complete this thesis. I highly appreciate the help and cooperation of the Mr. Aftaab Alam Daewoo Express Limited Pakistan Abbottabad terminal, Shafqat Mehmood and Sajid Pervaiz Daewoo Express Limited Lahore terminal for their support and collaboration. I also acknowledge the help of all government departments and public in collecting information / documents / data for this report. I wish to express my deepest and sincere appreciation to all my friends including Mohammad Makki, Ozaif Malik, Asif Mehdi, Faisal Balakot, Ameen ul Hassan, Maheen Jabbar, Fariha Khan, Sana Kanwal, and Fatima for their help, cooperation, and moral support. The last but not least, I would feel incomplete without thanking to my parents who pray for my brilliant success and bright future.

ABBREVIATIONS

CBS EBS FDI HRM DEP MNE

: : : : : :

City Buss Service Express Buss Service Foreign Direct Investment Human Resource Management Daewoo Express Pakistan Multinational Enterprise

1. INTRODUCTION
Transport in Pakistan is extensive and varied but still in its developing stages and serving a population of over 170 million people. Different modes of transportation such as air, rail, road, water are used for transportation of goods and people from one place to another. Rail services in Pakistan are provided by the state-run Pakistan Railway, under the supervision of the Ministry of Railways. The railway network comprises 8,163 km of which 1,676 mm (5 ft 6 in) (broad gauge) forms 7,718 km including 293 km of electrified track. Pakistan Railways carry 65 million passengers annually and daily operates 228 mails, express and passenger trains. Much of Pakistan's road network (National Highway) and Railway network were built before 1947, during the British Raj. In recent years, new National Highways have been built, with the addition of motorways. Airports and Seaports have been built within the last 30 years. Thousands of people travel daily through public and private transport to reach their destination within the city and out of city. Bus service in urban areas and between cities is well established with services run by both public and private sectors. Bus services like Daewoo Express, Kohistan, Khan Brothers, Skyway and Niazi Bus have set up modern intercity service in Pakistan which connects to most cities in Pakistan and runs 24 hours a day. Intercity buses tend to be more modern and well kept as compared to urban transport within cities which are also well established However the fleet of buses used tends to be in horrible shape and is not air-conditioned. And with the passage of time the fleet of these buses is becoming lesser as compared to

the increasing population of Pakistan. The people are suffering because of bad conditions of buses, rude behavior of conductors and others, huge frights, overloading on buses, delaying of buses and unavailability of conveyance.

Pakistanis make up 2.5 percent of the world’s population, which makes it the sixth most populous country and its population growth rate is still among the highest in the region. According to PCO (Pakistan Census Organization) in 2005 Pakistan’s population was 153.96 million and growth rate was 1.86. And the current population according to World Bank statistics is about 170 million. For such a big population which is increasing day by day very big and efficient transport network is required. It is widely acknowledged that transport has a crucial role to play in economic development. More specifically, it has been recognized that the provision of a high quality transport system is a necessary precondition for the full Participation of remote communities in the benefits of national development. Business development, education and health are too much dependent on transport. Pakistan’s major trade with China, Afghanistan, Iran and India is done through road and rail transport. So the development of transport industry for Pakistan is important from both aspects i.e. people transportation and trade. Tourism is the world’s third industry from revenue point of view. Despite having an image problem, hyped particularly in the West, and once alleged as one of the most dangerous countries in the world by the British magazine "The Economist", tourism is still a growing industry in Pakistan because of its diverse cultures, peoples and landscapes However, tourism is still limited because of the lack of proper infrastructure, the worsening transport and security situation in the country. The transport of Pakistan is going through stages of development and still needs more efforts to be done.

Problem Statement Marketing mix is very integral part of business strategies and big co. and MNEs pay special attention towards it. Companies develop marketing mix by considering different aspects like their own resources market opportunities competition and return on capital. The companies working in Pakistan and international level are not following the true concept of marketing mix. Daewoo is a big giant of Pakistan transport industry which is serving the transportation needs of Pakistan nation. Unfortunately Daewoo who is providing comfortable and luxurious journey facility is also not following the true concept of marketing mix. So for my thesis I have chosen the following problem statement. “Implementation of marketing mix concept in transportation sector & how it can add value to the sector” Purpose of Study My purposes of carrying out this research study are various with different reasons. The learning process must not stop it must continue and I found that the thesis writing is really helpful so I jumped into it to explore the world practically. I really wanted to learn the practical implementation of marketing theories in the field which became a big reason of writing this thesis. Marketing mix always fantasized me so I started this and thought through this research paper I will also be able to improve the transportation sector of Pakistan by giving suggestions to the apex management, that how implementation of marketing mix concept can be very beneficial for them. The most important purpose of this thesis was the completion of my master’s degree. Limitations During this research both the author and the thesis had some limitations. The thesis is focused on the Daewoo services and then its implementation of marketing mix. The company’s target market is upper middle class so lower class is neglected. Due to no tough competition the comparison became much difficult. The results of this research

paper can not be applied to all the market as it is focused on a certain class and company. Access to the company data and apex management was much difficult and at certain points impossible or restricted. This research has a large empirical data collection. I have analyzed the data and applied what was applicable to my problem-

statement. I have not been able to make use of the whole collection. This is a master thesis research study which is limited to a specific research period. Although my data collection is large and there are many questions that I want answered, I have to limit the research to follow the time aspect. If I had more time I could have done an even wider study and used a larger amount of my empirical data.

Outline of the Thesis
2. Methodology: Will provide an explanation of the scientific methods used when carrying out the research. 3. Background: This chapter will provide background material related to the Daewoo group, its history through decades. Then the arrival of Daewoo in Pakistan, its operations & other information related to its management and investment and its services for Pakistan’s Transport industry. 4. Theoretical Framework: The theories framed for giving the study a thorough understanding and a good foundation for analyzing the problem field are: Marketing mix 4 P’s  Marketing mix 4 P’s 5. Empirical Part: This chapter analyzes the concept of marketing mix implementation through collected primary data regarding the Daewoo Express Pakistan. The chapter is divided into Daewoo services and customer. 6. Analysis: This chapter analyses the empirical findings in view of the three marketing mix concepts discussed in chapter 4. Conclusion will answer the thesis’ problem statement.

The author will give suggestions for future research within this topic.

2. BACKGROUND AND HISTORY
2.1 Daewoo Group Daewoo Group was founded by Kim Woo Chuffing in March 1967. Daewoo's emergence was inseparable from South Korea's rapid transformation from an agrarian country, racked by a long history of hostile invasions and lacking essential resources, to a land where the centrally planned "economic miracle" has become a fact of life. South Korea entered the 1960s with a crippling trade deficit and a domestic market too poor to support indigenous industries. When Korea was divided by the Allies after World War II, the territory north of the 38th parallel inherited all of the country's natural resources. With a far stronger military force than its rivals in the South, North Korea waited less than two years after the withdrawal of U.S. peacekeeping troops to invade. Peace was eventually restored in 1953, but the fear of foreign invasion has remained with the South Koreans and, indeed, has acted as a powerful incentive in the search for economic prosperity. Daewoo means "Great Universe," and although the initial share capital of the company was a modest $18,000, Kim and his colleagues held great hopes for their business. At its peak, Daewoo was South Korea's fourth largest conglomerate, or chaebol, with principal operations in trading, motor vehicles, shipbuilding, heavy industry, aerospace, consumer electronics, telecommunications, and financial services. The company was comprised of 25 subsidiaries, linked together in a complicated system of cross holdings. The major company in the group was Daewoo Corporation, which was licensed as a general trading company (GTC) by the Korean government in 1975. GTCs were set up to promote exports, and license holders were required to establish offices abroad. Daewoo had a network of over 100 branches worldwide, with some 3,500 different products traded in

over 130 countries. In exchange for promoting Korean goods abroad, the Daewoo Corporation was able to finance its expansion through preferential loan agreements, reduced foreign exchange requirements, and improved government advice on exporting and marketing abroad.

However, Kim Woo Choong's global ambitions eventually overextended the company's resources, and by the late 1990s Daewoo was deep in debt, while Kim himself was being indicted on charges of corporate malfeasance. In 1999 the South Korean government issued an order to dismantle the chaebol, and the majority of the Daewoo Group's holdings were sold to other corporations. 2.2 Early History Beginning in 1962 the South Korean government instigated a series of five-year plans and forced the chaebols to aim for a number of basic objectives. In common with their Far East competitors, Hong Kong and Taiwan, South Korea's government relied on a strategy that focused attention on the importance of exports as the method to decrease the country's balance-of-trade gap and to strengthen domestic production. Daewoo began trading in 1967 at the start of the second five-year plan, and benefited from governmentsponsored cheap loans on borrowing for exports. The company chose to concentrate on the labor-intensive clothing and textile industries, this would provide relatively high profit margins while utilizing South Korea’s major asset, its large workforce. A factory was set up at Pusan and in 1990 3.6 million shirts were made there each month. Daewoo further contributed to the increases in South Korea's level of exports, which averaged 38.6 percent growth per annum during this period, by producing uncomplicated light manufacturing machines the construction of which, again, was labor intensive. The third and fourth phases of Korea's economic recovery ran from 1973 to 1981. The country's most significant resource, labor, was then in high demand, and as wages increased, competitors from Malaysia and Thailand began to erode Korea's comparative advantage in labor-intensive production. The government responded by concentrating on mechanical and electrical engineering, shipbuilding, petrochemicals, and construction.

This change in emphasis was designed to continue Korea's export-led expansion and to provide domestic industries with parts that previously had to be imported. A home-based defense industry was also a priority as plans were announced for the total withdrawal of U.S. peacekeeping forces.

Daewoo moved into construction, serving the new village program and, in a farsighted move, the rapidly growing African and Middle Eastern markets. During this period Daewoo achieved its GTC status and received significant investment help from the South Korean government. Subsidized loans and strict import controls aroused the anger of competing nations, but the chaebols were in need of protectionist policies if they were to survive this period of world recession, triggered by the oil crisis of 1973. Government policy forced Daewoo into shipbuilding, an industry to which Hyundai and Samsung were more suited because of their greater expertise in heavy engineering. Kim's reluctance to take over the world's biggest dockyard, at Okpo, in 1980 was well documented, and his comment on the Korean government indicated a growing frustration as his entrepreneurial instinct was being stifled. "They tell you it's your duty and you have to do it even if there's no profit." Displaying characteristic vigor and enthusiasm, however, Kim soon saw Daewoo Shipbuilding and Heavy Machinery earn a reputation for competitively priced ships and oil rigs that were often delivered ahead of schedule. 2.3 Established Joint Ventures in 1980s to Expand Outside Korea The 1980s were a decade of liberalization for South Korea's economy. Small private companies were encouraged, and Daewoo was made to divest two of the textile companies that had contributed to its success. Protectionist import controls were relaxed, and the government no longer practiced positive discrimination towards the shipbuilding industry. These moves were instigated to ensure an efficient allocation of resources in a free market and to force the chaebols to be more aggressive in their dealings abroad.

The great change in attitude shown by the Korean government to the chaebols is best illustrated by the fate of one of Daewoo's competitors, the Kukje Group, which went into liquidation in 1985.

At that time the government saw the chaebols as barriers to economic efficiency and refused to supply Kukje with further credit. Small- and medium-sized companies were to be favored to ensure that the wealth in Korea's two industrial centers, Seoul and Pusan, eventually would be spread throughout the whole country. The only large industries to benefit from government support would be those that were internationally competitive and those that could further a more equitable distribution of income. Daewoo responded to the challenge by establishing a number of joint ventures with U.S. and European companies. Kim's philosophy for the 1980s was that finished products would eventually lose their national identity as countries cooperated in design and manufacturing before exporting the goods to a further country. In 1986 Daewoo Heavy Industries launched a $40 million Eurobond issue in order to expand exports of machine tools, defense products, and aerospace interests. The president of Daewoo Heavy Industries, Kyung Hoon Lee, hoped that the money would enable his company to move away from simply licensing products from abroad and to enter a new phase of complementary and long-term relationships with foreign companies. The 50/50 joint venture with Sikorsky Aerospace illustrated the benefits of operating in partnership with a U.S. company. Daewoo started by building S-76 helicopters from parts imported from the United States and gradually began to produce these parts in Korea. As the South Korean government had always regarded the defense industry as being of utmost importance, Daewoo received generous subsidies to establish new factories. By the end of 1988, Daewoo had enough confidence in the skills it had learned in the

Sikorsky project to announce that it was to begin work on civilian helicopters and airplanes, which would be considerably cheaper than those produced by their U.S. counterparts.

Daewoo used other methods to capture foreign markets. It had excellent experience in turning around faltering companies in Korea and was now, increasingly, applying this knowledge abroad. In 1986 Daewoo acquired a controlling interest in the U.S. ZyMOS Corporation as a means of gaining the technical knowledge necessary to expand its interests in semiconductor manufacturing and semiconductor design. Subsidiaries that actually produced goods abroad, rather than acting solely as sales agents, were also established. Daewoo added a microwave oven assembly plant in Lorraine, France, and set up a VCR manufacturing company in Northern Ireland. Signaling that South Korea's economic recovery was reaching completion, Daewoo began considering investment in countries such as Bangladesh and Indonesia, where textiles could be produced as cheaply as in Korea during the early 1960s. Other linkups included a deal with Caterpillar to export 100,000 forklifts by 1993, a marketing contract to sell IBM-compatible personal computers, and the production of parts for the European Airbus on behalf of British Aerospace. The mid-1980s saw an increased emphasis on the motor vehicle industry. Although the government, fearful of arousing protectionist sympathies in its foreign markets, was reticent in announcing its ambitions publicly, it was clear that South Korea was aiming to become one of the world's major car exporters before the end of the decade. In 1986 the Japanese yen appreciated 25 percent against the dollar, making Daewoo's already cheap exports even more attractive. Daewoo established a 50/50 joint venture with General Motors, called Daewoo Motor, to produce an internationally competitive small car as well as components for a number of General Motors's existing vehicles. Daewoo was not deterred by the difficulties inherent in setting up the required high-technology production

lines and relied on the experience gained in other parts of the group to construct sophisticated computer systems in a relatively short period of time.

The joint venture with General Motors was initially one of Daewoo's most profitable links with a foreign company. In 1987 247,000 Pontiac LeManses were built, and the car, based on a design by the German car giant Opel, was well received in the U.S. market. Demand for the LeMans and the slightly larger Oldsmobile Royale soon faltered, however, and there were rumors of friction between the management of the two companies. The venture was not as successful as Hyundai's foray into the international car market, and it appeared that Daewoo underestimated the sophistication and technical standards required by the U.S. car buyer.

2.4 Late 1980s Crisis in Daewoo Shipbuilding In 1989 heavy losses suffered by Daewoo Shipbuilding and Heavy Machinery made servicing the company's loans increasingly difficult. In an unprecedented demonstration against the traditional work ethic that had helped South Korea to economic prosperity, workers began an increasingly violent protest against years of long hours and low pay. The only solution available to Daewoo's management was to placate the workers with pay raises of more than 20 percent. The reliance on shipbuilding as a way of cementing South Korea's export-led recovery looked even more dangerous as the rapidly appreciating South Korean won made exports more expensive. Demand for Daewoo's ships remained constant but the company was forced to sell ships at a loss as a way of guaranteeing a steady supply of orders. The

situation was exacerbated by the bankruptcy of US Lines in 1986. A bad debt of $570 million marked the start of the crisis at the Okpo shipyard. The Ministry of Trade and Industry, however, was no longer willing to bail out one of its most reliable chaebols, which was suffering as a direct result of the Daewoo Shipbuilding and Heavy Machinery acquisition forced on it by the government.

Instead, the government promised a seven-year moratorium on Daewoo's debt to the Korean Development Bank and offered to provide a further W 150 billion in exchange for a number of contributions from the company. Daewoo would have to refinance the shipyards by selling off four subsidiaries, including the profitable Korea Steel Company and Daewoo Investment and Finance, as well as selling Daewoo Shipbuilding and Heavy Machinery's headquarters in Seoul. Subsidiaries were forced to raise W 85 billion on the Korean stock exchange, and Kim was ordered by the government to sell his W 150 billion investment in Daewoo Securities, the country's largest stockbroker. The government also ordered workers to curb their demands for wage increases and asked to see proof of improved management before the deal to help Daewoo was agreed to. Kim's response was typical of his personal style. He had already moved his office to the shipyard so that he could keep direct control of the worsening situation, and had begun to take tours around the premises by bicycle to ensure that he could implement changes and cut costs where necessary. By 1990 improvements at the shipyard were already visible, and by the mid-1990s Daewoo was one of the most efficient shipbuilders in the world and, with 10 percent of the global market, was also the world's leading shipbuilder. 2.5 Aggressive Overseas Expansion in the 1990s Daewoo entered the 1990s facing more problems than the downturn in the fortunes of its shipbuilding subsidiary. The company was highly leveraged, partly due to the ready availability of government loans, and was paying interest of W 300 million a day--about $500,000--on its debts. Daewoo had not marketed itself as well as competitors like

Hyundai and, as a consequence, suffered from the lack of a strong brand image. Its heavy industries were now operating in stagnant markets and expenditure on research and development had to be increased if internationally competitive new products were to be successfully introduced. Continuing workers' demonstrations and changes in government policy further added to Daewoo's worries.

The company also had to deal with the unraveling of its relationship with General Motors. Sales of LeMans had fallen to 39,081 in 1990, a 39 percent drop from the peak of 1988. When GM and Daewoo could not agree on a plan to revive the venture, GM sold its half of Daewoo Motor to Daewoo in 1992 for $170 million. As he had done in shipbuilding, Kim decided to take direct control of Daewoo Motor and quickly turned its fortunes around. He focused the company on improving the quality of its cars; added to the production lines were detailed checks at every step along the way and, for a one-year period, every Espero and Prince car made was taken on a grueling road test to identify problems. By 1993 Daewoo had regained the number two spot in the domestic car market, still trailing Hyundai but once again ahead of Kia, and by 1995 Daewoo Motor was making a slight profit. As he was turning Daewoo Motor around, Kim embarked on a risky strategy of overseas expansion, aggressively seeking out opportunities for both marketing and manufacturing Daewoo products in the United States, Europe, and less-developed countries. He committed more than $20 billion in numerous joint ventures and start-ups around the world. More than half of this money--$11 billion--was slated for Daewoo Motor ventures. In 1992 Daewoo entered into a joint venture with an automaker in Uzbekistan, which led to the opening in late 1995 of an $800 million plant capable of producing 200,000 compact cars annually by 2000. Some $250 million was spent to buy a state-owned carmaker in Romania, capable--after retooling--of making another 200,000 cars each year. In 1994

Daewoo Motor committed $1 billion to a joint venture in India. The following year, the company outbid General Motors itself to buy 60 percent of Poland's state-owned FSO carmaker for $1.1 billion. Manufacturing cars in these lesser-developed countries resulted in a lower-cost product that Kim hoped would succeed even in the brand-conscious West. Early indications were positive as Daewoo, in 1995, captured more than 1 percent of the British car market in the first month that it started selling Nexia and Espero sedans, exceeding its goal.

After gaining this toehold in Europe, Kim then planned to enter the U.S. market in either 1997 or 1998. But by placing manufacturing in such countries as Poland and India, Daewoo would also be well-positioned to sell the cars in these same countries, which were experiencing much higher growth in demand for new cars than Western Europe or the United States. Overall, Kim set goals of quadrupling auto output to a total of two million vehicles by 2000, and of becoming one of the world's top ten automakers. Automobiles, however, were not the only Daewoo product Kim aggressively moved overseas; consumer electronics became another key Daewoo transplant. But first, Daewoo Electronics revamped its product line. Quality problems had hampered sales of its higher-end electronics items, so Daewoo decided to focus on such lower-tech products as televisions, VCRs, and microwave ovens. It’s aggressive yet systematic approach to overseas expansion then followed; by 1996 Daewoo Electronics had 20 production subsidiaries outside South Korea, with plans for 16 more. Non-Korean production stood at 19 percent but was slated to be increased to 60 percent by 2000. Daewoo strategically chose one country within each major target region for most of its production facilities. Southeast Asia was based in Vietnam (where Daewoo was the single largest foreign investor); the Americas, Mexico; Central and Eastern Europe, Poland; and Western Europe, France. Daewoo nearly made a huge step forward in late 1996 when a deal was announced whereby Daewoo Electronics would buy Thomson Multimedia, based in France. The acquisition would have made Daewoo the

world's leading maker of televisions, but the deal was quickly scuttled after protests by French workers who were angered by the prospect of Thomson Multimedia falling into foreign hands. The importances of Daewoo’s moves in Europe, as well as the importance of Daewoo Motor, were shown in late 1995 when Kim moved to Vienna to concentrate solely on the Daewoo Group's overseas auto business

Placed at least temporarily in charge of the Daewoo Group was Kim's longtime ally, Yoon Young-Suk, who had headed up Daewoo Heavy Industries. Kim's move, however, fueled speculation that he was trying to distance himself from the ongoing corruption trials involving several heads of chaebol, as well as two former presidents of South Korea, Chun Doo Hwan and Roh Tae Woo. The chaebol leaders were accused of bribing Roh in an outgrowth of the overly cozy relationship between the Korean government and the chaebol. In late August 1996, eight of the chaebol leaders--including Kim--were found guilty of bribery; Kim was sentenced to two years in prison but immediately filed an appeal. The late 1990s and early 21st century were slated to be a critical period for Daewoo. In addition to Kim's bribery conviction and possible jail sentence, Daewoo (and other chaebol) faced the possibility that the Korean government would intervene to reduce the power of the chaebol, which were beginning to be seen as impediments to the country's economic progress. Korean reunification, which was sure to profoundly affect the entire nation's future, seemed ever more likely and Daewoo had in 1995 become the first South Korean company allowed to enter into joint ventures in the north. These prospects, combined with the company's massive commitment to overseas expansion and a continuing heavy debt load, added up to a very uncertain future for the Daewoo Group.

2.6 Pre-Millennium Collapse By the mid-1990s Daewoo was firmly entrenched in what Kim Woo Choong dubbed the "Vision 2000" plan, his ambitious program intended to position the company to become one of the top ten car manufacturers in the world. The company's expansion into Eastern Europe seemed savvy as the region's emerging democracies could provide the car manufacturer with cheap labor and as the market for affordable, utilitarian automobiles in the former Soviet Bloc was experiencing precipitous growth.

Indeed, in Poland alone, sales of cars and commercial vehicles were projected to reach 534,000 in 1997, up from 426,000 in 1996 and 296,000 in 1995. As late as March 1999, Daewoo was poised to overtake Fiat as the leading car manufacturer in the Polish market. By the end of the decade, however, it was becoming apparent that Mr. Kim had bitten off far more than his company could chew, as his plan to grab up market share at a loss and recuperate the investment later was not panning out. While the company was poised to meet its goal of manufacturing two million cars by 2000, the financial crisis of 1997-98 in developing countries had caused car sales to fall well short of projections, and none of Daewoo's foreign operations were actually turning a profit. Furthermore, Daewoo had accumulated colossal debt over the course of its overseas automotive expansion, which compromised the stability of its other operations, including shipbuilding. By July 1999, the company owed its creditors more than $50 billion. The company's perilous financial situation was further exacerbated by the recession that hit South Korea in 1998, the country's worst economic slump in nearly half a century. In spite of these warning signs, Mr. Kim did not desist from his aggressive acquisition strategy. While other chaebols had begun implementing measures to slow growth in the midst of the country's fiscal crisis, Kim Woo Choong persevered with his ill-advised program, acquiring 14 new companies and increasing the company's debt by 40 percent in 1998. In April 1998, recently elected South Korean President Kim Dae-Jung had pledged to be the first South Korean president to implement significant reform of the chaebol system.

As the country's most financially unstable chaebol, the Daewoo Group soon became a prime target for these reforms. On August 16, 1999, Daewoo's creditors announced a government-mandated plan to break up the company. Faced with bankruptcy, Kim Woo Choong agreed to step down as head of the Daewoo Group in November 1999, and the South Korean banks took control of the bulk of the chaebol's assets with plans to sell them off as quickly as possible.

In the aftermath of the company's collapse, charges of wide-ranging accounting fraud and embezzlement began to emerge, and Kim Woo Choong became a fugitive from justice, going into hiding in numerous countries, including Morocco, France, and the Sudan. In the early years of the 21st century, however, the South Korean government remained reluctant to pursue Mr. Kim, amid insinuations that it had been complicit in the reckless expansion policies through which Kim Woo Choong overextended the Daewoo Group so flagrantly. In a 2003 interview with Fortune magazine, Mr. Kim lamented his unrealistic ambitions to grow the Daewoo Group so quickly, but denied all charges of corruption in his business practices.

2.7 Daewoo in Pakistan As Daewoo has a name all over the world due to interest in automobiles, consumer goods, financial and securities, construction, engineering and trade sector, Daewoo is working for the last thirty years and their motto is “from tile till ship”. Daewoo, a top Korean company, emerged in Pakistan in 1993, when it sorts $1 billion in Lahore- Islamabad Motorway Project which was highly political in nature. Though it discouraged in getting more projects but with the re-election of Nawaz Sharif Government, Daewoo has come with its renewed commitments in taking part in development related activities.

In the first phase, company would import buses from Korea and intends to invest $60 million in its transport venture which would have 600 buses fleet in total. Company source says that it is also considering installing a bus assembling plant to take part in the massive demand of passenger transport. The company commenced its business on December 10, 1997 after obtaining certificate for commencement of business from registrar of companies, Lahore. Daewoo Pakistan Motorway Services Ltd. was incorporated as a public ltd. company on October 23, 1997. The object of the company was to provide services on Lahore- Islamabad motorway.

Daewoo Pakistan Express Bus Services Ltd. was incorporated as a public ltd. company by shares with the object of engaging in transportation business. Their detailed description activities are:  To plan, survey, design, finance, construct, own, operate and maintain bus services.  To carry on the business of transport of goods, mails, passengers, animals from place to place either by air, by land or sea whether in airplanes, motor-vehicles, cars, ships or in any manner what so ever.  To indulge in higher transportation services in all the parts of the world. 2.8 Starting in Pakistan In May 1999, Daewoo signed memorandum of understanding with the Government of Punjab at Seoul, Korea to operate 1500 buses in Pakistan out of which 700 buses were proposed to be operated in Punjab whereas 800 buses in Sind. It was also agreed that government would provide the requested funds for this project from outstanding payment on the construction of Lahore-Islamabad Motorway Project. Anyhow, this agreement could not be materialized and due to the certain reasons and eventually Daewoo had to arrange funds for import of 50 buses through financial institutions and those maintain its commitments made with the citizens of Pakistan.

To operate the city bus in Lahore, a franchise agreement was signed on August 3, 1999 between Daewoo and Lahore Regional Transport Authority, Government of Punjab. 2.9 Management Daewoo Express Pakistan is headed by chief executive officer C.I.Kim. G.M is 2nd in command after chief executive. Mr. Sheikh Munawar Saeed is G.M of Daewoo Express Pakistan. While Mr. Khuram Mirza is D.G.M of the company.

2.10 Departments The Company has many departments like operation, Finance, Admin, HR, Training, Workshop, Cargo, Logistics etc

2.11 Investment To commence its business on January 12, 1998, after obtaining certificate for commencement of business from Registrar of Companies, Lahore, the company has planned an initial equity investment of US $ 1 million. The total cost of the project has been estimated at $ 6.526 million, which the company proposes to finance, by equity investment of $ 5.095 million and by loan arrangements of $ 1.431 million. In this project, as well, Daewoo wants 100% equity in the project instead of 60% allowed.

3. METHODOLOGY

In this chapter I will present the scientific methods that have been used when carrying out this research. First I will discuss my philosophical approach, social constructivism. In view of this position, I will explain my chosen research approach, qualitative research, and clarify the meaning of a case study. Further, there will be given a description of the chosen methods for data collection in this research. At the end there will be given a validity and reliability analysis of my data collection and data analysis.

3.1 Methodology Methodology is about organizing research activity and is according to Silverman (1993) seen as a general approach to conducting a study of a research topic (Easterby-Smith et al, 2006).Methodologies are neither good nor bad, but more or less adequate under specific conditions in order to achieve a goal (Hellevik 1980). “Knowing what you want to find out leads inexorably to the question of how you will get that information.” (Miles and Huberman 1984:42, in Silverman 2005) How to design and conduct a research in practice is influenced by many factors and according to Yin (1994) the choice of method is often a result of how the problem is formalized. Easterby-Smith et al. (2006) state that when conducting a research as part of a Master degree, it is usually best to implement a flexible research strategy. The research is a learning process and along the way obstacles will be met and mistakes will be made. This master thesis has followed the author’ advice and looks at a case study consisting of different meetings, questionnaires to describe and understand how the marketing mix can

affect Daewoo services and Pakistan transport sector. In this case study I want to see Implementation of marketing mix concept in transportation sector& how it can add value to the sector this implies to analyze the importance of marketing mix for transport sector in Pakistan and specially Daewoo. This implies to analyze the concept of marketing mix to see if it is effective and if there is anything that can be done to make it more rewarding for the transport sector in Pakistan. This is done by analyzing the problem statement by applying marketing mix concept, and its true implementation to interpreted data from interviews, questionnaires and other research done in relation to the case study, and then draw conclusions.

3.1.1 Philosophical approach How my research problem is framed will, inevitably reflect a commitment to a particular model of how the world works (Silverman, 2005). There are different philosophical positions and methods on how social science research should be conducted. The two traditional contrasting views are positivism and social constructivism. In a positivist point of view the reality is external and objective, and should therefore be considered through objective research methods. This can be done by looking at different parts of a phenomena and consider them as independent variables. To best understand the information and problems collected, they should be measured quantitatively (EasterbySmith et al. 2002). My research is comparable to a social constructivist view. A social constructivist focuses on how people share experiences and interprets the world in their own way. This view emphasis how people have different meanings and perceptions, and have a special consideration towards how people communicate and the complexity of a ‘whole’ situation (Easterby-Smith et al. 2006). The case study in this research interprets these experiences. The aim of my research and other constructivist analysis is to raise human interest and increase general understanding of a certain issue (Easterby-Smith et al. 2006) 3.1.2 Research approach

There are two general approaches to research, inductive and deductive research approaches (Spens et al, 2005; Hyde, 2000). An inductive process wants to derive a generalization or a theory for a topic through conducted research. This type of research is also called grounded theory (Easterby-Smith et al, 2006). The deductive approach is a theory testing process, starting with a recognized theory and then trying to see if the theory applies to the research that are being conducted (Hyde, 2000). This approach might be quite time consuming and the researched material must be able to verify or reject the hypothesis that has been presented (Easterby-Smith et al, 2006). A deductive research approach has been chosen to shed light on the problem statement and reach the proper conclusions to my problem statement. The thesis will first present some background research done prior to the primary data collection. A background study have given the researches a good basis for the further research to make own conclusions. I have, as researcher, provided background research on the issues related to Daewoo’s company business and transport development in the Pakistan. In addition I have studied a broad theoretical framework within marketing mix and Implementation of marketing mix concept in transportation sector. This has been done without making too many pre-assumptions to the research area before starting my research. Further I have conducted interviews which have been used as primary data collection. My empirical research data has then been analyzed relative to my theoretical framework. This analysis will then be summarized and provides the basis for my conclusions to my deductive research process. 3.1.3 Research design According to Easterby-Smith et al. (2006) research design is about organizing research activities in ways that are most likely to achieve the research aims. I can choose between exploratory, descriptive and explainable (casual) research designs. The choice of design depends on the research question (Jacobsen 2000).

A descriptive approach will be taken to address my problem statement. This study will try to understand and describe/analyze how the marketing mix in the Daewoo services and see how marketing mix can add value to the transportation sector. This will be done by analyzing my case study, the interviews conducted and the questionnaires. During these interviews, many opposing interests and views were expressed. There fore it is essential for me to describe what has been stated by the different participants without expressing judgment. This will ensure the best empirical data and also further analysis.

Strauss et al. (1998) recommend researchers to do some prior research before doing their own, as this will give the researcher some precautions to what is already out there and what is not. When a background study is done the researcher has a good basis for further research, where the researcher can make own findings and later conclusions. This thesis has been written while the researcher have been studying and also traveling throughout Pakistan via different transport companies’ vehicles. This traveling experience and business studies has really given great strength to the thesis. traveling experience made the author to choose this topic for the thesis. These different factors have also greatly contributed to my choice of problem statement for my thesis. 3.1.4 Qualitative vs. quantitative approach As social constructivists I have chosen a research based on qualitative methods to address my research problem (Easterby-Smith et al. 2006). A qualitative research is based on analytical generalization, rather than quantitative and statistical research (Yin, 1994). The

Quantitative research is seen together with the positivist paradigm where reality is objective and should be measured through objective methods (Easterby-Smith et al. 2006). Van Maanen (1983:9) defines qualitative method as: “… An array of interpretative techniques which seeks to describe, decode, translate and otherwise come to terms with the meaning, not the frequency, of certain more or less naturally phenomena in the social world.” When the research problems are complex like this study, involving human and organizational interaction, qualitative methods are favored because of the rich explanations they provide (Skrtic, 1995). This study’s aim is to gain understanding and insight into the marketing mix and its role in the Daewoo services and Pakistan transport sector, and therefore use qualitative methods to solve my problem statement in this thesis. When conducting a qualitative study, the researchers put themselves into the situations rather than laboratories to explore the phenomena they are studying (Marshall et al. 1999). Marshall’s argument is applicable to this research. The qualitative approach as well as this thesis put emphasis on exploring the ‘why’ in addition to the ‘what’ and ‘how’ in theoretical questions (Saunders et al. 2003; Phillips and Pugh 1987). To in best possible way answer these questions I will use a case study approach which will be examined further below. 3.1.5 Case Study According to Marshall et al (1999) a case study is usually the generally strategy when the study is focusing on culture and civilization, whether this is an organization or a group. These kinds of studies try hard to get a holistic understanding of the activities of the participants in a real-life context. The case study is a research strategy that encounters many areas a quantitative analysis can not. By looking at specific organizations in their

own environment dealing with actual incidents, the research becomes highly significant (Stake, 1995). My case study reflects these definitions above. The case study chosen for this proposed research is about Daewoo bus service further more the concept of marketing mix, and its implementation in Daewoo service. Daewoo and concerns towards its possible future scope in the Pakistan. I analyze the actual ongoing practice of marketing concepts and this requires an understanding of the situation where various organizations and people express their issues related to the marketing theories and concepts. The author believes that the case study will give him an understanding for human experience and a holistic picture of the situation, while at the same time try to recognize a cause and effect relationship of the situation (Stake, 1995).

It is important to know that a case study is not a sampling research; cases are done to maximize the learning in the available time period for the study (Tellis, 1997). The author through this study tries to analyze it to create an understanding of the marketing mix implementation on Daewoo services and Pakistan’s transport sector. I will not compare different companies or try to generalize my study to a broader group. In addition I hope to add guidelines and course of action to what is already studied through previous research and theories. There are a number of critics towards the case study research method. Some think that a case study represents an unscientific method, as they take an unusual approach to research. Others argue that the studies can not be properly analyzed and therefore can not be seen as a research method (Easterby-Smith et al, 2006). Yin (1981) expresses the opposite, that case studies have the same degree of validity as other positivist methods. He states that case material can be systematically presented both within-case and crosscase. Internal evidence, explanations and meaningful events can be a basis for this systematic presentation (Yin, 1981). Being aware of these critics and the methodological disadvantages of case studies, I have decided to use this research method. I believe it will increase my understanding and knowledge about the topic I am enlightening, and helping

me analyze and answer my problem statement. As stated by Yin (1984) case studies have the ability to generate answers to “how” and “why” questions, like this thesis. Case studies, like my research, are multi-perspective. To get an in-depth understanding of my case in need to collect views from many people and passengers from the transport sector involved in addition to analyze the workshop as a whole. 3.2 Data collection As stated earlier various data has been collected to undertake a thorough research of my problem statement. Both primary and secondary data has been gathered. Primary data is first hand data that have been collected especially for this research.

Secondary data has been collected for other purpose, but can still provide this research with valuable information (Saunders et al 2003). Since I have chosen a deductive research approach, the secondary data will be the theory I use for my theory testing process of my empirical data. 3.2.1 Primary data Primary data represents the main data collection of this research. This data has been collected and analyzed on behalf of the problem statement in the thesis. Main sources of primary data collection in my study have been the different terminals of Daewoo i.e. Lahore and Abbottabad. I have also conducted in-depth follow-up interviews with selected officials of transport companies in the Pakistan that I met during my visits. Interviews are conversing interchange of views on a mutual interest area between two people (Kvale, 1996). In-depth means to get a very detailed knowledge about the issue that I am interested (Wengraf, 2001). For this particular research getting detailed knowledge and shared experience from the respondents are of high importance to get results that are credible.

I conducted several interviews and survey with passengers traveling in different transport companies of Pakistan. I wanted to get views of transport companies and the marketing mix implementation, in regards to the possible future transport activity in Pakistan. When deciding respondents among the different people I met was based on their interest to my thesis and their knowledge about the transport business. In addition I selected the interviewees to get all diverse views and meanings of the topic and give me broad information about my problem statement. My respondents for the research study were: 1. Aftaab Alam 2. Taimoor 3. Shafqat Mehmood 4. Sajid Pervaiz 5. Marium Daewoo Express Abbottabad Daewoo Express Lahore Daewoo Express Lahore Daewoo Express Lahore Daewoo Express Lahore

Carrying out face-to-face interviews makes it easier to understand the social contact between the respondent and us as researcher. This will in addition make it easier to achieve a good and relevant interview (Easterby-Smith et al. 2002). The most interesting interviewee that I came in contact with and whom I wanted to interview further was contacted when I was in Lahore. This was an informal interview where the focus was to get information about the marketing mix implementation in Daewoo Services. In addition I collected information on how the marketing mix is developed. According to Jones (1985) the reason for conducting interviews that are qualitative is to get an understanding of the constructed reality to the respondents. With their personal values and beliefs they have constructed their own reality and opinions about situations. It is therefore important for me as interviewer to structure the interviews in order to obtain this information most correctly (Jones, 1985 cited in Easterby-Smith et al. 2002).

When conducting the face to face interviews with the different respondents, a certain number of questions was presented beforehand and used as a guide through the interviews. The questions asked were open ended, so that they required more than a ‘yes’ or ‘no’ answer. This ensures that the respondent gives more thorough explanation and more information about the issues talked about. In addition to the main questions I asked other questions during the interview to get a clear understanding of the answers, and also to follow up on other areas that I thought were interesting. This loose structure is called semi-structured interviews. The interview guide is designed to have an amount of questions arranged in advance, but to a degree still be open (Wengraf, 2001). This structure gave me the chance to have a more open and natural conversation with the respondents. In-depth interviews give opportunities to more easily adjust my questions if it is necessary to clear doubts and make sure that the questions are understood (EasterbySmith et al. 2002). As I had already met my interviewees in my visit to Daewoo earlier and had heard them talk at the terminal, I managed to hold a good interaction during the interview. I felt that the communication during the interview was good and that I did not miss out on too much. When a respondent needs to answer with more than a short answer, it will reveal more feelings and opinions, which was exactly what I was after (Easterby-Smith et al. 2002). To obtain trust before and during the interview it is important for me as interviewer to familiarize myself with my respondents’ organization and their activities (Easterby-Smith et al. 2002). I knowing that there are strong opinions regarding marketing mix, I provided my respondents an explanation of my thesis together with the interview guide before the scheduled interviews, hoping to obtain trust and explain my objective interest in the issues. In addition I sent all respondents a transcribed version of the interviews afterwards to clarify any misunderstandings and offered a copy of or thesis when it is finished.

According to Easterby-Smit et al. (2002) having the talent to recognize what is relevant when conducting interviews, how to be understanding, and in the end being able to remember the information obtained, is of significance to make detailed notes afterwards. To guarantee that no information got lost or was forgotten, I wrote all the information in key points on paper. Some are afraid that things said in interviews will end up in the wrong hands, or might get interpreted and used in the wrong way (Easterby-Smith et al. 2002). There was given a guarantee to my interviewees that things like that would not happen. Transcripts of the interviews also helped ensure this.

Quality of interviews is always an issue, as to whether or not the interviewee has answered everything truthfully. This will be a risk that I as researcher have to take into consideration when analyzing the data. Outside factors that can destruct an interview situation is questions related to reliability, validity and interviewer and interviewee biases (Saunders 2003). I will discuss questions concerning trustworthiness of my research later in this chapter. From primary data to empirical research when all conducted interviews were transcribed. I believe it is of importance to provide the readers of this thesis the same experience as I had. There fore I have also focused on recapturing the atmosphere present during the interview when writing the empirical chapter. This has been done by using several quotes to state the different viewpoints, in addition to explanations along the way. These quotes and explanation gives also a good analysis of the strong opinions. Capturing this experience and atmosphere will give an impression of how the interview was carried out. This will provide the reader with a better understanding when analyzing Daewoo service and implementation of marketing mix. 3.2.2 Secondary data

Secondary data is, as explained in the introduction of this section, a variety of information that has been analyzed for a different purpose than this thesis. The data therefore needs to be reanalyzed to comply with the research related to the thesis (Saunders et al. 2003). Secondary data can be both quantitative and qualitative. The data is, as by the name, a second choice data, that needs to be in addition to the primary data. Academic books, peer viewed articles, case studies and other types of surveys are examples of data that is regarded as secondary data (Saunders et al, 2003). Secondary data has been a major information source when doing the preliminary study, to get an overview of my research topic, formalizing my research question and lay the basis for my theory framework. In this process I used academic literature, online articles, web pages, former lectures from GCMS Abbottabad and more. My concern the first month was related to how I would collect my secondary data not being connected to any University library. I was highly depended on access to online articles until I found Public Library Abbottabad, Cantonment Library Abbottabad, Army station Library Abbottabad. These Libraries have given us access to academic literature related to business and marketing theories during my business Management studies in these last four years, I have actively followed both my studies and new changes in transport sector. Pakistani and international media channels and regularly been updated on transport development activities in Pakistan. In addition I have had lectures related to my topic of interest. Through my work I have gained knowledge and understanding of transport business, marketing strategies and many more. Disadvantages with using secondary data are that it is not made for the same purpose as my thesis, and therefore do not reflect the correct need. A question about reliability must also be asked and will together with primary data collection be discussed later in the chapter. 3.2.3 Data analysis

Qualitative data are very complex and bound to the situation. This makes it difficult to analyze and to put it into a composition that will give a result that will convince the readers (Easterby-Smith et al., 2002). There are two very different ways of analyzing qualitative data, content analysis and grounded analysis. In a content analysis the researcher analyze the information by statistics and numbers, while in grounded analysis perception and experience are important to get a holistic analysis (Easterby-Smith et al., 2002). As mentioned earlier my studies are based on qualitative case studies where knowledge and experiences from the phenomena are collected. And therefore the analysis of the data has been a grounded analysis. Doing this kind of analysis, means analyzing the frequent and opposing patterns from the data collection which provide the basis for my further understanding of the subject (Easterby-Smith et al., 2002).

My empirical data has, as explained earlier in this chapter, focused on the marketing mix’ issues and concerns towards its potential application in Pakistan, and also towards the transport sector. These views have through my deductive research approach been tested against my secondary data in a theory testing process. The theoretical framework is based on marketing mix and theory. The results of my analysis are presented in a conclusion, where I show how the theory and empirical data cohere and contrast. In the conclusion there is also given suggestions on how to better the transport business and services, based on my theoretical data and findings. 3.3 Trustworthiness of research According to Easterby-Smith et al. (2002) validity and reliability are technical languages that are being used to look at researchers’ problems concerning whether or not their studies can stand up against the world’s investigation. In a social constructivist research like mine, there are often reluctance on how to relate the research results to the question of validity and reliability. This is because the information that I have gathered only mean acceptance of one single truth. The research must have the power to convince the public

that the results from the study are serious and will therefore get more acceptances over time. According to Yin (1994) to be able to deal with these two questions of validity and reliability me as researcher should construct the case over time and depend on analytical generalizations. I have done my best to conform to these advises from Yin. 3.3.1 Validity of research The question about validity asks whether the study is a correct interpretation of the reality and experiences of the people in the research situation (Easterby-Smith et al., 2002). The validity questions the arguments the researcher use to justify their conclusions in their thesis, based on how the collected data and theory have been collected and analyzed (Wengraf, 2001). To ensure validity it is important to look at the conducted interviews, how they have been carried out and analyzed, as this is where researcher can make wrong interpretations. Hammersley (1992) claim that views concerning a subject are individual and ‘live” within the person. A researcher can only get a rough understanding of these views (in Flick, 2002). To be able to increase the validity of my interviews, I tried to find out if it is possible to safeguard a degree of legitimacy during the interviews. After conducting and transcribing my interviews I sent the transcript back to the respondents to get feedback and to ensure that nothing was misinterpreted. According to Dann (1990) this is known as communicative validity (Dann, 1990 cited in Flick, 2002). Considering secondary data I have, as social constructionists, been critical in regards to the degree of validity.

3.3.2 Reliability of research The question of reliability is harder to prove when using qualitative as opposed to quantitative data. The researcher can interpret the data in his or her own way, and gather the data through their own methods. There are on the other hand various methods researcher can use to ensure the reliability of their data collection. Easterby-Smith (2000) emphasizes transparency as means when interpreting the raw data. In addition the researcher should consider the degree of consistency that can be reached

when different observers look at and interpret the same data (Silverman, 1993). Le Compte and Goetz (1982) call this external and internal reliability. External reliability can be attained by providing clear documentation of all used sources and background for study, and thereby ensuring transparency (Le Compte and Goetz, 1982). As researcher I have been thorough and consistent with referencing throughout the research and analyzing process to document my data collection. To make sure that I have the right theory basis in my secondary data collection, a thorough research has been done to ensure that I have the accurate knowledgebase for my theoretical framework. All interviews in the research have been written down on paper. Internal reliability refers to the degree other observers can attain the same findings and conclusions when given the same set of data.

Through the gathering and interpreting the primary data I have been very consistent to keep an objective standpoint. This research has been particularly interesting because I as researcher have been standing in the middle in regards to my own point of view. I believe that through the whole process of researching and conducting interviews, to further enhance the level of reliability the thesis has been discussed with co-workers here at HBW resources in Houston, as well reviewed by my supervisor in Abbottabad.

3.3.3 Generalization Generalization of a case study is done through theoretical concepts from secondary data and not statistical data (Easterby-Smith et al. 2002). How I chose my respondents are of importance to how, and if, generalization can be made. My selection of respondents in this research has been segmented through known groups. They have been carefully selected in regards to their knowledge to make sure that I have a broad empirical foundation for my analysis. I can not make any assumptions towards if my study is a truly generalized research. However, due to my carefully selected respondents and I

believe that I have a broad selection of empirical data that give a realistic view of my chosen area of research. 3.3.4 Limitations and strengths of methodological approach According to Easterby-Smith et al. (2002) the social constructionists, like us, provide a way of collecting data that are natural rather than artificial. In addition to this I have also had the ability to look at changes over a time period, to understand different interviewees’ meanings and views on my research topic and been able to list their ideas, as they appear. According to Easterby-Smith et al. (2002) new theories can therefore more easily be found and contributed in the research. This depends of course on the time period of the research. A social constructionist research method can have a long data collection process and take up a great amount of resources in terms of time and sometimes also money.

The analysis of the data after the gathering can be a difficult process and is very dependent on good knowledge and interpretation of me as researcher (Easterby-Smith et al. 2002) As mentioned earlier, my primary data has been collected through interviews and observation. This way of collecting data have allowed me to be flexible and efficient since the gathering has been done effectively. The rest of my data collection was done by conducting several in-debt interviews. This was somewhat time consuming as all the interviews needed transcribing and after that an approval from the interviewees. A strength with using interviews as a research method is that it can lead to data of high quality on the complex of the problem (Easterby-Smith et al. 2002). My interviews were short and concise which gave me all the information I needed to answer my research problem in best possible way. This has helped me during interpreting my data and analyzing it, as I already have an understanding of the participants’ viewpoints. A weakness to a social constructivist

design is that my data is qualitative. These sources of data can be unmanageable and difficult to measure and compare. Interviews can be one of the best ways to collect knowledge about a researched topic, but at the same time the researcher must be careful with ensuring the truthfulness of the information given by the interviewee and also the individual opinions that is being given (Easterby-Smith et al. 2002). 3.4 Ethical considerations “The social investigator must sort his values and obligations and weigh them repeatedly throughout the research process. In a democratic society, he cannot impose one fixed code on multiple conflicting codes” (Dalton 1964, in Easterby- Smith et al., 2002: 77)

According to Punch (1986) qualitative methods often have a discussion related to research ethics. These issues often occur from conflicts between professional and personal interests. One issue is that in interview situations the researcher has control over what to collect of information and how to interpret it (Easterby-Smith et al. 2002). Me as researcher is in a powerful position in relation to the respondents when collecting the data through interviewing according to Easterby-Smith et al. (2002). I was fully aware that my respondents had different perceptions regarding the issue of marketing mix and its implementation in Pakistan and gave a thorough explanation about and reason for my research before conducting the interviews. I believe that limited most of the potential for an ethical conflict. I have also chosen a neutral standpoint towards this topic, as I think that will give the most reliable research and also be the most ethical way of doing research on this topic. Most of the ethical issues researcher face in his studies are unclear and of small scale. Because of this, it is important that I reflect, think and try to be critical to my research in relation to ethics and politics according to Mason (1996) (Easterby-Smith et al. 2002). As

I have stated numerous times in this chapter, my respondents have various and also opposing views of my research topic. I there fore believe that to ensure a good research it was in my best interest to take a neutral stand towards this subject. This has given me a chance to see the dialogue from an outsiders point of view and ensured a critical research were all views have been documented. Three principles to guide ethical choices are according to Miles and Huberman (1994) that the reflections during my research, are to have mutual respect for respondents, no coercion and no manipulation. Last but not least I need to be supportive for democratic morality and institutions.

Summary This chapter has presented the scientific methods used when carrying out this thesis. The philosophical approach, social constructivism, has been discussed. Further the chapter has provided explanations of the chosen research approach and how both primary and secondary data was collected. In the end the author has discussed the trustworthiness of the research by analyzing the validity and reliability of the data collection and analysis.

4. THEORETICAL FRAMEWORK
The theoretical framework covers three different theories which will provide different approaches to the topic and problem statement in this research. In this chapter the different concepts of marketing mix will be explained. In the beginning the marketing mix which consists of four P’s are explained. Later the strategies involved in the marketing mix and its P’s will be detailed. The marketing mix modern form which consists of seven P’s will also be mentioned here. Together, these concepts and theories will give a holistic perspective of the thesis’ problem field on Implementation of marketing mix concept in transportation sector & how it can add value to the sector.

4.1

Framework of Marketing Mix

To understand the entire phenomenon of the framework of marketing mix, one has to go through the sequential definition and the understanding of basic concepts of prominent terminologies used as the foundation to build the blocks of the whole scenario. In the next step the framework modeling, the elements of marketing mix, their foundation and strategies, would complete the mechanism of their implementation and usage by the businesses. The following would probably serve the purpose only when started by the definitions of terminologies.

4.1.1

Defining Framework

The term "Framework" is defined as Broad overview,outline , or skeleton of interlinked items which supports a particular approach to a specific objective, and serves as a guide that can be modified as required by adding or deleting items.

It could also be presented as: A set of assumptions, concepts, values, and practices that constitutes a way of viewing reality. Or A fundamental structure, as for a written work.

4.1.2

Marketing

Marketing is the process by which companies determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It is an integrated process through which companies create value for customers and build strong customer relationship in order to capture value from customers in return.

Marketing is used to identify the customer, to keep the customer, and to satisfy the customer. With the customer as the focus of its activities, it can be concluded that marketing management is one of the major components of business management. The evolution of marketing was caused due to mature markets and overcapacities in the last 23 centuries. Companies then shifted the focus from production to the customer in order to stay profitable.

The term marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions. It proposes that in order to satisfy its organizational objectives, an organization should anticipate the needs and wants of consumers and satisfy these more effectively than competitors. The term marketing has changed and evolved over a period of time, today marketing is based around providing continual benefits to the customer, these benefits will be provided and a transactional exchange will take place.

4.1.3

Marketing Mix

The term "marketing mix" was first used in 1953 when Neil Borden, in his American Marketing Association presidential address, took the recipe idea one step further and coined the term "marketing-mix". A prominent marketer, E. Jerome McCarthy, proposed a 4 P classification in 1960, which has seen wide use. When marketing their products, the firms need to create a smart mix of:     The right products Sold at right place In a right place Using the most suitable promotions.

This is what simply termed as marketing mix.

Diagram 4.1

Product

Price

Target Market

Place

Promotion

4.1.4

Defining the Framework of Marketing Mix

Marketing Mix Framework is a dedicated business strategy applied for the longevity and profitability of the product or service, by the marketing department.

4.1.5

Basics in Marketing Mix

To create the right marketing mix, businesses have to meet the following conditions:  The product has to have the right features - for example, it must look good and work well.

The price must be right. Consumer will need to buy in large numbers to produce a healthy profit. The goods must be in the right place at the right time. Making sure that the goods arrive when and where they are wanted is an important operation.

The target group needs to be made aware of the existence and availability of the product through promotion. Successful promotion helps a firm to spread costs over a larger output.

4.2

Principals of Marketing Mix

The marketing mix principles (also known as the 4 P’s.) are used by business as tools to assist them in pursuing their objectives. The marketing mix principles are controllable variables, which have to be carefully managed and must meet the needs of the defined target group. The marketing mix is apart of the organizations planning process and consists of analyzing the defined:  How will you design, package and add value to the product. Product strategies.    What pricing strategy is appropriate to use Price strategies? Where will the firm locate? Place strategies. How will the firm promote its product Promotion strategies?

The term "marketing mix" became popularized after Neil H. Borden published his 1964 article, The Concept of the Marketing Mix. Borden began using the term in his teaching in the late 1940's after James Culliton had described the marketing manager as a "mixer of ingredients". The ingredients in Borden's marketing mix included product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis. E. Jerome

McCarthy later grouped these ingredients into the four categories that today are known as the 4 P's of marketing.

4.3

Elements of Marketing Mix Framework

Marketing decisions generally fall into the following four controllable categories:
• • • •

Product Price Place (distribution) Promotion

These four P's are the parameters that the marketing manager can control, subject to the internal and external constraints of the marketing environment. The goal is to make decisions that center the four P's on the customers in the target market in order to create perceived value and generate a positive response.

4.3.1

Product “Defining the characteristics of your product or service to meet the customer’s needs” According to McCarthy

A tangible object or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units Intangible products are service based like the tourism industry & the hotel industry or codes-based products like cell phone load and credits.

Typical examples of a mass produced tangible object are the motor car and the disposable razor. A less obvious but ubiquitous mass produced service is a computer operating system. Packaging also needs to be taken into consideration.

The term "product" refers to tangible, physical products as well as services. Here are some examples of the product decisions to be made:
• • • • • • • • •

Brand name Functionality Styling Quality Safety Packaging Repairs and Support Warranty Accessories and service Price “Deciding on a pricing strategy. Even if you decide not to charge for a service, it is useful to realize that this is still a pricing strategy. Identifying the total cost to the user (which is likely to be higher than the charge you make) is a part of the price element.” According to McCarthy

4.3.2

The price is the amount a customer pays for the product. It is determined by a number of factors including market share, competition, material costs, product identity and the customer's perceived value of the product. The business may increase or decrease the price of product if other stores have the same product.

Some examples of pricing decisions to be made include:

Pricing strategy (skim, penetration, etc.)

• • • • • • •

Suggested retail price Volume discounts and wholesale pricing Cash and early payment discounts Seasonal pricing Bundling Price flexibility Price discrimination Place “This includes advertising, personal selling (e.g. attending exhibitions), sales promotions (e.g. special offers), and atmospherics (creating the right impression through the working environment). Public Relations are included within Promotion by many marketing people (though PR people tend to see it as a separate discipline).” According to McCarthy

4.3.3

Place represents the location where a product can be purchased. It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet. Distribution is about getting the products to the customer. Some examples of distribution decisions include:
• • • •

Distribution channels Market coverage (inclusive, selective, or exclusive distribution) Specific channel members Inventory management

• •

Warehousing Distribution centers

• • •

Order processing Transportation Reverse logistics Promotion “Place or distribution. Looking at location (e.g. of a library) and where a service is delivered (e.g. are search results delivered to the user's desktop, office, pigeonhole - or do they have to collect them)” According to McCarthy

4.3.4

It represents all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements: advertising, public relations, word of mouth and point of sale. A certain amount of crossover occurs when promotion uses the four principal elements together, which is common in film promotion. Advertising covers any communication that is paid for, from cinema commercials, radio and Internet adverts through print media and billboards. 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 communication decisions include:
• • •

Promotional strategy (push, pull, etc.) Advertising Personal selling & sales force

• •

Sales promotions Public relations & publicity

Marketing communications budget

4.4

The 7p Concept of Marketing Mix

Marketing professionals and specialist use many tactics to attract and retain their customers. These activities comprise of different concepts, the most important one being the marketing mix. The two concepts for marketing mix: 4P and 7P. It is essential to balance the 4Ps or the 7Ps of the marketing mix. The concept of 4Ps has been long used for the product industry while the latter has emerged as a successful proposition for the services industry. All the other elements represents the same scenario, instead the modern researcher included following three components to enrich the phenomenon. 4.4.1 People - People refer to the customers, employees, management and everybody

else involved in it. It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands. 4.4.2 Process - It refers to the methods and process of providing a service and is hence

essential to have a thorough knowledge on whether the services are helpful to the customers, if they are provided in time, if the customers are informed in hand about the services and many such things. 4.4.3 Physical (evidence) - It refers to the experience of using a product or service.

When a service goes out to the customer, it is essential that you help him see what he is buying or not. For example- brochures, pamphlets etc serve this purpose.

4.5

Frameworks Strategies

The frameworks encompass and largely relied on the makeup and implementation of the strategies under its each of element. Different business designs theses strategies according to their own specific needs and nature of offers along with the prevailing conditions in the market, in the light of which the decisions are taken Following, is the principal draft of these strategies and decisions. 4.5.1 Product Strategies

When an organization introduces a product into a market they must ask themselves a number of questions.     Who is the product aimed at? What benefit will they expect? How do they plan to position the product within the market? What differential advantage will the product offer over their competitors?

One must remember that Marketing is fundamentally about providing the correct bundle of benefits to the end user, hence the saying ‘Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer. Philip Kotler in Principles of Marketing devised a very interesting concept of benefit building with a product.

Diagram 4.2

Kotler suggested that a product should be viewed in three levels. Level 1: Core Product: memories. Level 2 Actual Product: All cameras capture memories. The aim is to ensure that What is the core benefit your product offers? Customers

who purchase a camera are buying more then just a camera they are purchasing

your potential customers purchase your one. The strategy at this level involves organizations branding, adding features and benefits to ensure that their product offers a differential advantage from their competitors. Level 3: Augmented product: What additional non-tangible benefits can you

offer? Competition at this level is based around after sales service, warranties, delivery and so on. John Lewis a retail departmental store offers free five year guarantee on purchases of their Television sets, this gives their `customers the additional benefit of peace of mind over the five years should their purchase develop a fault.

4.5.2

Product Decisions

When placing a product within a market many factors and decisions have to be taken into consideration. These include: a) Product design: b) Product quality: product offers. c) Product features: What features will you add that may increase the benefit offered to your target market? Will the organization use a discriminatory pricing policy for offering these additional benefits? d) Branding: One of the most important decisions a marketing manager can make is about branding. The value of brands in today’s environment is phenomenal. Brands have the power of instant sales; they convey a message of confidence, quality and reliability to their target market. Brands have to be managed well, as some brands can be cash cows for organizations. In many organizations they are represented by brand managers, who have high resources to ensure their success within the market. A brand is a tool which is used by an organization to differentiate itself from competitors. Ask yourself what is the value of a pair of Nike trainers without the brand or the logo? How does your perception change? Internet branding is now becoming an essential part of the branding strategy game. Generic names like Bank.com and Business.com have been sold for £m’s. Will the design be the selling point for the organization as Quality has to consistent with other elements of the

we have seen with the IMAC, the new VW Beetle or the Dyson vacuum cleaner. marketing mix. A premium based pricing strategy has to reflect the quality a

4.5.3

Pricing Strategies

Pricing is one of the most important elements of the marketing mix, as it is the only mix, which generates a turnover for the organization. The remaining 3 P’s are the variable cost for the organization. It costs to produce and design a product; it costs to distribute a product and costs to promote it. Price must support these elements of the mix. Pricing is difficult and must reflect supply and demand relationship. Pricing a product too high or too low could mean a loss of sales for the organization. Pricing should take into account the following factors:      Fixed and variable costs. Competition Company objectives Proposed positioning strategies. Target group and willingness to pay.

4.5.3

Types of Pricing Strategies

An organization can adopt a number of pricing strategies. The pricing strategies are based much on what objectives the company has set itself to achieve. a) Penetration Pricing: Where the organization sets a low price to increase sales and market share. b) Skimming Pricing: The organization sets an initial high price and then slowly lowers the price to make the product available to a wider market. The objective is to skim profits of the market layer by layer. c) Competition Pricing: Setting a price in comparison with competitors. d) Product Line Pricing: Pricing different products within the same product range at different price points.

An example would be a video manufacturer offering different video recorders with different features at different prices. The greater the features and the benefit obtained the greater the consumer will pay. This form of price discrimination assists the company in maximizing turnover and profits. e) Bundle Pricing: The organization bundles a group of products at a reduced price. f) Psychological Pricing: The seller here will consider the psychology of price and the positioning of price within the market place. The seller will therefore charge 99p instead £1 or $199 instead of $200 g) Premium Pricing: The price set is high to reflect the exclusiveness of the product. An example of products using this strategy would be Harrods, first class airline services, Porsche etc. h) Optional Pricing: The organization sells optional extras along with the product to maximize its turnover. This strategy is used commonly within the car industry.

Diagram 4.3

Penetration Pricing Skimming Pricing Competition Pricing Pricing Strategies Product Line Pricing Bundle Pricing Premium Pricing Optional Pricing

4.5.4

Place Strategies

This refers to how an organization will distribute the product or service they are offering to the end user. The organization must distribute the product to the user at the right place at the right time. Efficient and effective distribution is important if the organization is to meet its overall marketing objectives. If an organization underestimate demand and customers cannot purchase products because of it, profitability will be affected. a) What channel of distribution will be used? Two types of channel of distribution methods are available. Indirect distribution involves distributing your product by the use of an intermediary for example a manufacturer selling to a wholesaler and then on to the retailer.

Direct distribution involves distributing direct from a manufacturer to the consumer For example Dell Computers providing directly to its target customers. The advantage of direct distribution is that it gives a manufacturer complete control over their product.

4.5.5

Promotion Strategies

A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market an organizations promotional strategy can consist of: a) Advertising: Any non personal paid form of communication using any form of mass media. b) Public relations: Public relations involve developing positive relationships with the organization media public. The art of good public relations is not only to obtain favorable publicity within the media, but it is also involves being able to handle successfully negative attention. c) Sales promotion: It is commonly used to obtain an increase in sales short term. It can involve using money off coupons or special offers. d) Personal selling: Selling a product or service one to one is called personal selling.

e) Word of mouth: The passing of information from person to person is word of mouth. Originally the term referred specifically to oral communication (literally words from the mouth), but now includes any type of human communication, such as face-to-face, telephone, email, and text message. f) Direct Mail: Is the sending publicity material to recipients of postal mail. There has been a massive growth in direct mail campaigns over the last 5 years. Organizations can pay thousands of pounds for databases, which contain names and addresses of potential customers. Direct mail allows an organization to use their resources more effectively by allowing them to send publicity material to a named person within their target segment. By personalizing advertising, response rates increase thus increasing the chance of improving sales.

Diagram 4.4

Promotional Mix

Advertising

Public relations

Sales promotion

Personal selling

Direct Mail

Internet Marketing

G) Message & Media Strategy An effective communication campaign should comprise of a well thought out message strategy. What message are you trying to put across to your target audience? How will you deliver that message? Will it be through the appropriate use of branding? Logos or slogan design? The message should reinforce the benefit of the product and should also help the company in developing the positioning strategy of the product. Companies with effective message strategies include: Media strategy refers to how the organization is going to deliver their message. What aspects of the promotional mix will the company use to deliver their message strategy. Where will they promote? Clearly the company must take into account the readership and general behavior of their target audience before they select their media strategy.

What newspapers does their target market read? What TV programmers do they watch? Effective targeting of their media campaign could save the company on valuable financial resources.

h) Internet Promotion The development of the World Wide Web has changed the business environment forever. Dot com fever has taken the industry and stock markets by storm. The e-commerce revolution promises to deliver a more efficient way of conducting business. Shoppers can now purchase from the comfort of their home 24 hours a day 7 days a week. Owning a website is a now a crucial ingredient to the marketing mix strategy of an organization. Consumers can now obtain instant information on products or services to aid them in their crucial purchase decision. Sony Japan took pre-orders of their popular Play station 2 console over the net, which topped a 1 million after a few days, European football stars are now issuing press releases over the web with the sites registered under their own names. Hit rates are phenomenal. Advertisers have now moved their money over to the internet as customers are on average spending more time online then watching TV. Popular ways to advertise seem to be with banners and pop ups.

4.6

Push & Pull Strategies

Diagram 4.5 Pull Strategy Push Strategy

Manufacturer

Manufacturer

Wholesaler

Wholesaler

Retailer Consumer

Retailer

Consumer

4.6.1

Above a pull strategy (left) push strategy (right).

Communication by the manufacturer is not only directed towards consumers to create demand. A push strategy is where the manufacturer concentrates some of their marketing effort on promoting their product to retailers to convince them to stock the product. A combination of promotional mix strategies are used at this stage aimed at the retailer including personal selling, and direct mail. The product is pushed onto the retailer, hence the name. A pull strategy is based around the manufacturer promoting their product amongst the target market to create demand. Consumers pull the product through the distribution channel forcing the wholesaler and retailer to stock it, hence the name pull strategy. Organizations tend to use both push and pull strategies to create demand from retailers and consumers.

4.7 Summary The essence of the above mentioned discussion lies inside the operational mechanism of the framework of marketing mix, which is a set of assumptions, concepts, values, and practices that constitutes a way of viewing reality. This skeletal structure encompasses the four basic and three advance elements, constituting the theoretical plan of usage of marketing mix strategies. The elements enlisted, concerned with the designs and characteristics of the product, followed by the fair price structured in a smart enough way to bring the business and customers in a win-win relationship. The availability of the fairly priced product in the right place and at the right time along with the expansion of the product benefits to the maximum volume of peoples is at the heart of the theoretical framework of the marketing mix. The addition of the advance elements make it more functional by involving in it the considerations of the people's around like the, employees & management and the ways they use to provide services to the customers to lockup in their memories for long through the provision of visible evidence of the services made. In the light of these components, the strategies are designed to get into the actual implementation of the framework and make it lucrative for the company. The product strategies are aimed to decide on the issues of its customer oriented design, quality, and establishment of brand name, whereby the pricing strategies decides on the way of entering the product in an already saturated market successfully. The upcoming portion discusses the best suited channel to introduce and handover the products to the end user. The promotional plans mostly outline the business development in the new and unexplored potential markets and customers to increase the volume and time of products sustainability in the competition. The processes and evidential components are probably aimed at positive enhancement of the product life cycle over a larger Spain.

The modern means of promoting and distributing the products through the direct marketing and the internet services has brought about a drastic alteration in the marketing concerns of the business. The marketing is now a more active, fast; challenging and more obviously, fruit bearing for the business then in the past. “There is nothing as practical as good theory” (Kurt Lewin, 1951:169)

5. EMPIRICAL PART
In this chapter an analysis of the implementation of marketing mix will be presented. This part of the thesis provides the research with empirical findings to see how the Daewoo and the customers respond to its services. The analysis highlights the participants’ conversation and statements that are applicable to the thesis’ problem field. I have divided my empirical data into two categories the first one is Daewoo and the second is customers.

5.1 Daewoo Bus Service

Various interviews were conducted in order to collect the data to understand the importance of marketing mix. Different question were asked to various respondents on price, promotion, place, name, distinguished features, employee hiring policy, CBS, EBS future plans, peoples response to Daewoo which resulted in very useful information for my research paper.

One of the respondent when asked about the pricing evaluation, he related it to the prices of fuel, distance and destination. “The fair rates of Daewoo Express are determined on the basis of diesel prices and the mileage that the Daewoo bus covers from the terminal to its destination.” (Taimoor, Daewoo, Lahore 2010) In response to his above answer the author asked him that the other companies who are also operating in transport sector also cover the same mileage and running transport with the same diesel rates then why Daewoo’s rates are double in comparison with other’s fair rates. It was argued by respondent that to keep the standard of service up to the expectations of customers. “We are the only one category ‘A’ company doing operations in Pakistan’s transport sector. And being the category ‘A’ company we have to also fulfill the standards of category ‘A’ so there are other costs that contribute to the fair rates and as a result our fair rates are high.”

Furthermore management also accepted their monopolistic position in the market, which they are enjoying from the beginning and make them easy to determine the prices with keeping competitive edge. “We are the only company who is providing journey facility with comfort and luxury so we have a monopoly and enjoying this state. He also said at a moment that fair rates are self determined.” (Taimoor, Daewoo, Lahore 2010) In addition prices are determined also by the consumption behavior of the particular location’s customers. Because income level and consumption behavior always varies region to region. It could be due to business activities, earning powers or social / cultural behavior. “When we open a new terminal than we measure the paying capacity of that city’s people and then we set the fair rates in accordance to that.” (Taimoor, Daewoo, Lahore 2010) Customers are always price conscious, so it have always huge chances to lose the market share if the prices have always rapid increase, as we have observed in case of Daewoo. But due to its monopolistic position which the company is pretty much enjoying and a unique facility makes their customer loyal. The Daewoo’s customers don’t move to any other option because they are loyal to them, according to Taimoor. They travel in Daewoo Express not because of comfort and luxury but many other benefits that only Daewoo is offering. The customers’ loyalty depends on the standard of service provided by any particular company. Daewoo service strongly believes in their uniqueness and their commitment towards customer satisfaction.

“We take care of our customer from the time he reaches the terminal and throughout the journey until we drop him to his destination. We provide him respect, comfort, luxury, safety, environment, refreshment and everything that is required to make his journey the most memorable one. We also take feed back from our customers and try to fulfill if there are any deficiencies.” (Shafqat Mehmood, Daewoo, Lahore 2010) When respondent was asked about the financial burden that customer have to face by the increase in price, replied that they inform the customers before they make any changes in the fair rates. They inform customers by their call service whenever they call for booking or reservation of their seats about the change in the fair rates. They also display the changes in fair rates before they implement or apply. Whereas if you look at other companies who are working in the transport sector they don’t do such type of activity. As discussed earlier that customers have power and behavior to move to another service or product supplier if the prices have been increased or if they if they are paying more than their desired or satisfaction level. But in case of Daewoo it’s pretty different and opposite, due to its sole unique and monopolistic position in transportation sector “Our customers are loyal and they don’t worry about the rates they just want comfort and luxury which we are offering them. But yea sure you are right that we loose customers but that in percentage is very low so they don’t affect our business. And we have to increase the rates of fairs in response to the changes in diesel rates. He also mentioned that when we started our business in Pakistan the diesel was of 20rupees back in 1998 and now its 70rupees. We are still charging less in comparison with the changes in diesel rates.” (Shafqat Mehmood, Daewoo, Lahore 2010) These were the few questions that the researcher asked regarding the pricing strategy and the management of the Daewoo Express shed light on it in this way.

Daewoo is a service based industry and has been serving Pakistan’s transport industry since 1997. And it has not served the people of Pakistan but also has created a good image in the market as well. On my question that what services Daewoo is providing to the citizens of Pakistan replied basically we are providing transportation services. “Daewoo express Pakistan is providing three basic transportation services which include express bus service. City bus service, shuttle service and cargo also.” (Aftaab Alam, Daewoo, Abbottabad, 2010) Promotion and advertising are very important part of marketing strategy and result in increase of profits and sales. Not only has this it also resulted in the recognition and positioning of the products or services of the company. If we look at the multinational companies operating in Pakistan and abroad they do a huge spending on their advertising and promotion. The author asked few questions to the management of Daewoo Express regarding advertising and promotional strategies of the company here is detail of that conversation. We haven’t seen much promotion and advertising by the company why is it so “Yes we don’t do so much advertising and promotion because there is no competitor in the market so people know us that only we are here. So we don’t need any promotion and advertising.” (Shafqat Mehmood, Daewoo, Lahore 2010) The researcher asked the terminal manger Abbottabad that why your company doesn’t do extensive promotion and advertising through electronic and print media and very less advertising is seen because it’s the only company who is providing this kind of services he said

“Yes the company is not doing too much advertising and promotion but whenever we start any new route or terminal we advertise it through cable TV and billboards. When we launched our service from Abbottabad to Karachi we advertised it through cable TV Abbottabad.” (Aftaab Alam, Daewoo, Abbottabad, 2010) When the respondent was asked that what the advertising strategies that Daewoo has adopted are, replied they are using all the means to advertise and promote their company. “We do advertising and promotional efforts through TV, cable TV, billboards" And as this is the age of information and internet so we are also using the internet to advertise and promote our company. He mentioned that whenever we launch any new route or terminal we give its full detail in pictures and as well as in literature on our website www.sammidaewoo.com.pk.He also mentioned that when Daewoo started its operations in Pakistan back in 1993 at that time we created a website of Daewoo which includes all details of Daewoo M2 Project and the name of this website is www.daewoo.com.pk.” (Shafqat Mehmood, Daewoo, Lahore 2010) When the researcher asked that don’t you think that if you spend some more money on advertising and promotion it can bring more customers to Daewoo and business also replied no people are already aware of Daewoo Express and they have attracted the potential customers and they have been successful to retain them because of their best services according to Shafqat Mehmood. During this research the researcher was quite astonished to see that the pure marketing and business concepts that he has studied during his academic session are not being practiced in the market in its pure form. However, those concepts are being used in the market but with a different style and partially.

Daewoo has no competitor in the market and has its monopoly which makes it less proactive and all the other companies operating in Pakistan lie below category A “No we are the only one Category ‘A’ company operating in Pakistan and no one else. So we don’t have any competitor in the market.” (Shafqat Mehmood, Daewoo, Lahore 2010) Place has always great importance not only for the company but for the customers as well. And the location of a company’s store or service provider must be launched by considering factors that can affect the performance of the company and Daewoo has always considered these factors. On the question that how you decide that in this city we should open our terminal, what are those elements? The Daewoo Company analyzes the condition of roads, their services in near areas and also sees the feedback that they received from their customers and demand that they should operate in which particular cities.” According to Taimoor then they take any decision. When I asked the in charge survey Lahore that how you decide that in this city Daewoo should start its terminal he said “There are many determinants on the basis of which we decide that we should start our services in this city. We find out the population that city and its neighboring cities as well, standard of living, lifestyle, source of income of people of that area, which transport companies are operating in that area, AC and non AC service providers, any airports or sea ports. We analyze all these factors and then we create a feasibility report and if we find it profitable we go for it other wise we don’t start our operations in that city.” (Sajid Pervaiz, Daewoo, Lahore 2010)

Every company’s ultimate objective is to earn maximum profit and expand its business as much as possible. Daewoo started operating in Pakistan’s transport sector by providing transport facilities to the citizens of Pakistan from Lahore to Islamabad initially in 1990s. The company’s plan was to operate 1500 buses in Pakistan out of which 700 buses were proposed to be operated in Punjab whereas 800 buses in Sind. Somehow it didn’t happen according to the plan. Now the company is operating in three provinces of Pakistan but the number of cities in which it is operating is very less. The company’s plan was to launch most possible locations of Pakistan. “The company will make sure that service is available throughout the country at all the suitable locations. So we will never stop until we open our terminals and provide services to the people of Pakistan at all possible locations.” (Sajid Pervaiz, Daewoo, Lahore 2010) When the author asked in response to the above question then why you are not operating in Balochistan Province he replied until now they are operating in all provinces of Pakistan except Balochistan but are planning and looking forward to start their operations there also. But they are not operating there since now because the security conditions of Balochistan are not much good and the risk factor is very high according to the respondent. “We are not operating in Balochistan because it is far from other provinces and the cities are also scattered & at great distances from each other. The security conditions of Balochistan are not favorable but it is getting better with the passage of time and we are creating feasibility report to start operations in Quetta. So soon we will start our operations in the fourth province of Pakistan.” (Taimoor, Daewoo, Lahore 2010)

Shift in the place causes many problems even in the documents. Suppose if a company or retailer who has advertised himself in the PTCL’s directory and he shifts to another place then his address will not be changed until the republication of the directory next year. Another problem is many customers who don’t often visit the store or office or service center they get in real trouble and also they have to waste a lot of time in finding the new location. If such issues are not permanently addressed then it causes great loss to the company. On my question that why you Daewoo shifted its terminal in Islamabad from F8 TO G6, and how you informed customers regarding this shift in place

“The shift in the place was due to some internal company reasons .we informed the customers 1 week before shifting from F7 to G6 by displaying information on Daewoo terminal Islamabad. We also informed customers who through our call center service those who inquire us regarding advance ticketing and reservation and timing of busses.” (Taimoor, Daewoo, Lahore 2010) On response to the above question the researcher asked him what about the inconvenience that the customers have suffered due to your shift in place from F7 to G6 Islamabad replied, the experience of shift in place they knew people have suffered a lot. In future they will try their best not to make any changes in the terminal place. However, if they make any shift in place they will inform the people through TV and other sources of information also so that people don’t suffer because of such act according to Shafqat Mehmood.

Tourism is the world’s third biggest industry according to revenue generation and Pakistan has huge potential for the tourism industry. Pakistan is enriched with the beautiful natural locations, glaciers, different weathers, world famous spots, different cultures, historical locations and ancient civilizations. If this area will be exploited may generate high revenue both for the Pakistan and the company who will take this opportunity.

The author inquired that Daewoo Express is not working to provide services to the citizens of Pakistan for tourism by running special busses for them

“Tourism is not the part of our goals. We are providing transport services to northern areas like Muzafarabad, swat and hill points like Murree. We are operating with heavy busses whereas this kind of activity requires small vehicles and resort facility. This requires huge facility. Even though this is a good opportunity and can create high profits but the government is not even much interested in developing the tourism industry. Other factors are political instability, security risk, bad condition of roads as well.” (Sajid Pervaiz, Daewoo, Lahore 2010) There were certain moments in the history of Daewoo’s business in Pakistan when the operations were stopped due to different reasons. Daewoo stopped its services in Swat last year because of security risks.

The security risks due to terrorism attacks and later on due to army operation against terrorism. But now from February 2010 have again started its services there in Swat after the assurance of government and Army in terms of security. Working in Muzafarabad was also disturbed due to earthquake but after the collapse of terminal in earthquake 2005 Daewoo didn’t restart its services there. And up till now haven’t started operations there because now even the people of Muzafarbad are not rehabilitated there properly. But as soon as the conditions become favorable the services will be again provided to the citizens. Daewoo opened its terminal in Abbottabad and not in Mansehra even though it is big city than Abbottabad “Mansehra is less developed and the source of income of people and standard of living is also low in comparison with Abbottabad. And if we look at Mansehra it is a little away from major cities like Lahore and Islamabad then Abbottabad. And journey time also becomes more so we opened our main terminal in Abbottabad and launched shuttle services for Mansehra. This solved our all issues and as a result we preferred Abbottabad over Mansehra.” (Aftaab Alam, Daewoo, Abbottabad, 2010) These were the few questions that the author of this thesis asked to the management of Daewoo express so the place strategy of Daewoo could be understood. Busses are the very main element of transport business and the customer’s satisfaction is 70% dependent on the condition, mechanism and environment of the busses. Daewoo has very strictly considered this factor and has tried its best to provide the best it can to the citizens of Pakistan. Apart from this the company has also tried to use the modern technology and techniques to satisfy the customer’s needs.

“We have the very modern and air conditioned busses equipped with monitoring cameras, computerized system to regulate the buss environment. We are the only company in Pakistan that is providing the computerized and telephonic system for the booking and reservation of tickets.” (Sajid Pervaiz, Daewoo, Lahore 2010) On the query that how you decide that which buss should run through which terminal the respondent answered, the company first checks the condition of roads and then it decides the busses. All buss are running through every terminal except the premium plus which runs only on motor way. And for shuttle service small vehicles are used which provides pick and drop facility to the customers who live in the neighboring areas of the terminal like Mansehra to Abbottabad according to Aftaab Alam There are two types of services that Daewoo is providing in Pakistan which includes Express Bus Service and City Bus Service. Initially it started inter city bus service in Lahore and then some other major cities of Punjab like Gujranwala. But the fleet of CBS is very less as compared to the people’s demand and as a result the busses are over crowded. When the author asked a question regarding the city bus service that why they are over crowded and the busses are less as compared to the demand he said “The city busses are usually over crowded throughout the world. And yes the demand is for more busses and we are working on it. We started city buss service with a fleet of initially 20 buses, which was from Railway Station Lahore to Choongi Amar Sadhoo. Then we gradually increased our fleet and currently we are operating with 80 buses. The percentage increase in the fleet of busses is quite less in comparison with the demand but there are many reasons behind it.” (Sajid Pervaiz, Daewoo, Lahore 2010)

The percentage increase in the fleet of CBS (city buss service) is very less as compared to the EBS (Express buss service) because Daewoo has been suffering approx 5 million losses every month from the CBS (city buss service). The CBS (city buss service) is surviving because it is supported by earning of the EBS (Express buss service). Daewoo Express is suffering losses because CBS (city buss service) covers more mileage, consumes more diesel and requires more maintenance as compared to EBS (Express buss service) and is charging very low fairs as compared to the expenses. In cities either the government operates its own transportation busses or it gives subsidies to the private companies who are operating. “In overall world that government gives subsidy to the companies who run CBS (city buss service). And the government of Pakistan is not giving us any subsidy so we are in loss. Since we have started our CBS (city buss service) we received subsidy only once. We are suffering losses from CBS (city buss service) and the government of is not providing any subsidy. So these are the few reasons because of which we are neither increasing CBS (city buss service) in other cities nor neither increasing our fleet of CBS (city buss service). “ (Sajid Pervaiz, Daewoo, Lahore 2010) The government and the political parties always affect each and every activity of the country and business specially. If the government is in favor of the companies or the business community the business will grow and the FDI (Foreign direct investment) will also be encouraged. In certain cases the government supports the household business and country’s own companies which is another strategy. These different strategies have different results which affect the business and the general people as well. The government instability is a very big problem of Pakistan because democracy has been never very strong in Pakistan. The changes in the government also happens with the passage of time and sometimes very rapidly. In Pakistan very few governments have been able to complete their full duration of government.

Whenever a new government takes over it has different policies as compared to the early government so that makes the business go in trouble. Sometimes the governments even don’t fulfill the commitments made by them. This change in government policies and non-fulfillment of the commitments has also affected the Daewoo. “In case of Daewoo the government is not too much supportive from the beginning since we started our operations in Pakistan and another factor is government instability which has been always a big problem for us. Because In the beginning the government committed that it will provide the requested funds for the transport development project from outstanding payment on the construction of Lahore-Islamabad Motorway Project. Well, this agreement could not be fulfilled due to the many reasons and finally Daewoo had to arrange funds for import of 50 buses through financial institutions so that the commitments made with the people of Pakistan could be fulfilled. But by The Grace Of All Mighty Allah we have managed to serve the needs of the people of Pakistan and our company is in good financial position but if the government provides us more support we will be able to serve in much more better way.” (Sajid Pervaiz, Daewoo, Lahore 2010) On the question that some people have complains regarding the stops that EBS does one responded replied, EBS stops only once or twice or moreover thrice during its journey only for the facility of people, and if someone has complains that the bus didn’t stop on their call the crew is allowed to stop in case of any emergency only at safe spot. If it is passing through any risky area then it will not stop until if finds any safe place and this is only for the customer’s safety and convenience. People are the main source of an organization which can take it to the super heights and even can sink it in deep losses. In early times there was not much concentration on the hiring process of employees and their training and development.

But now a day there is a separate field of studies called HRM which purely deals with the hiring process, evaluation of employees and their training and development. Every big organization of the world and Pakistan has now a separate department which deals with the employees issues from hiring to firing. But the HRM strategies and policies vary from organization to organization and also the size of the department. And similarly the hiring process varies also according to the needs of the organization and nature of the organization as well. Like some companies do hiring only through the reference groups because of the nature and level of the secrecy of the organization. “Daewoo Express has a separate HRM department which handles with the human resource. We advertise the required jobs in the newspaper and then our H.R department carries out the whole hiring process. During this process of hiring the company has a strict policy in which the education, abilities, attitude towards the job and communication skills are not compromises at all. We hire, train and retain the employees because Daewoo believes that loyal, honest and competent people are the biggest asset of the organization.” (Sajid Pervaiz, Daewoo, Lahore 2010) Training and development is really beneficial because it makes them much capable so that they could deal with the modern needs of the time & organization as well. The Daewoo Express also carries out the training & development of its employees because Daewoo believes in not only the improvement of the company but its employees as well. The company arranges on job and off job training for approximately all their employees on annual and bi annual basis. And all along with this the evaluation of employees also continues so that they could serve the Pakistani nation in the best way according to Aftaab Alam.

Initially Daewoo stepped in Pakistan’s construction industry and then with the consent of the government of Pakistan it started its operations in the transport sector as well. Later on another company Sammi Corporation joined Daewoo Pakistan and the company name became Sammi Daewoo Express. Then the name again became Daewoo Express. Earlier I saw at the terminals and other stops and also on busses Sammi Daewoo Express and now it’s only Daewoo why is it so “First Daewoo the famous Korean company started its operations in Pakistan then later Sammi joined the Daewoo Company. And now the Sammi is planning to do business in Pakistan’s logistics and construction sector so this is the reason behind this whole activity. So now the name is again Daewoo Express.” (Shafqat Mehmood, Daewoo, Lahore 2010) Daewoo is offering many distinguished features which are the reason of its superb success and market leader. And when someone in Pakistan talks about the best service provider in the transport sector the first name that comes to your mind is Daewoo Express. Its distinguished features are smooth drive with reclining seats, refreshment, audio/video entertainment, centrally heated and air-conditioned, reservation facilities, pick and drop facilities, punctual departures and arrivals, 24 hour service, computerized ticketing, courteous hostesses, armed security guards, cargo service, expert drivers. The author asked the in your point of view what is the best feature of Daewoo Express Pakistan replied though every feature of Daewoo Express Pakistan the best but the feature that attracts the major customers is our punctuality according to different official of Daewoo Express Pakistan. During my conversation with the different officials of Daewoo Express Pakistan they said people call Daewoo a blessing especially families that earlier we used to worry about our kids but after the wonderful services of Daewoo Express Pakistan we feel our families and kids secure while they are traveling through Daewoo.

“Some years back the people of Abbottabad didn’t let their children and daughters travel alone but after experiencing the Daewoo services now they don’t worry while their children and daughters traveling alone. And this is only because of the dedication of our team which we are proud of.” (Aftaab Alam, Daewoo, Abbottabad, 2010)

5.2 Customer Customer is the part of business which is directly affected by the organizational strategies. So the feedback of customers has always great value. Daewoo Express Pakistan is service based industry and in case of service industry you get the response very quickly just after the delivery of services but something remains unsaid so the formal feedback is highly necessary for it. While doing my research it was very necessary to take the point of view of the other side also after management which is customer. Survey is a series of verbal questions or a questionnaire used to gather data about consumer attitudes or behavior. So To know the views of the customers of Daewoo express Pakistan a survey had been conducted. This survey was based on questions that were focused on the Daewoo’s service, pricing, promotion, crew of Daewoo and place. This survey had not been conducted not only on the terminals of Daewoo but also from outside through people who travel through Daewoo. Online survey was also conducted so that maximum feedback regarding my case study could be generated. While carrying out this survey the researcher had tried his best to make sure that only those people should answer who have traveled through Daewoo express so that the objective of this survey may not be affected. Most of the questions were asked in the form of yes/no, satisfied/dissatisfied, increase/decrease, and some were descriptive. Carrying out this survey has been very beneficial because through this the feedback of the ultimate customer was recorded and measured. The customers really appreciated this effort and took part in this survey very energetically. Through this feed back the problems of the customers and their suggestion for Daewoo Express have also been collected.

The survey conducted to know the customer point of view regarding the marketing mix is detailed under with some descriptive questions as well that were asked. 1 Are you satisfied with the standard of busses?
Percentage Yes No 83.3% 16.7%

2

Are the busses meeting the modern needs of passengers?
Percentage Yes No 83.3% 16.7%

The busses are the transport vehicles of Daewoo by which the customers reach their destination. They must be of such a standard that they could meet the needs of the passengers. However, 75.0% said that the standard of the busses is up to the standard and 25.0% said no its not.

Here is diagrammatical presentation of the question that is the standard of busses up to the mark or not.

3 Are the terminals of Daewoo Express Pakistan at convenient and at easily accessible location?
Percentage Yes No 75.0% 25.0%

When the passengers were asked that are the busses meeting the modern needs of the customers replied, yes they are up to the standard and meeting their needs. However, there are some suggestions if implemented will provide more comfort and ease to the customers. They said some improvements like health Care facility and toilet facility must be adopted for easy use of people as in Europe. This will not only provide more ease to the customers but will also help in removing complain specially those people who have some medical problem. According to statistics 83.3% said the busses are meeting the modern needs of customers and 16.7% said no. The terminals of Daewoo Express are the spots from where the busses start their journey. People get there as individuals or in groups and then after the arrival of the passengers the buss starts its journey and reaches at its destiny means next terminal Usually Daewoo has one terminal in a city and people get there. when the customers were asked that are the terminals at convenient and at easily accessible location responded that in small cities like Abbottabad it is at convenient location but at big cities like Lahore, Rawalpindi they are not at convenient location because the whole city is served by only one terminal so that becomes a problem. And some customers said that sometimes we even don’t travel through Daewoo just because its terminal is far away from our home. So they said there should be something to overcome their problems.

According to statistics of the survey 75.00% people said yes and 25.00% said no the terminals are not at convenient and at easily accessible locations. The next question asked to the customers asked was mentioned below and its answer was recorded descriptively. 4 Do you have any problem regarding the terminal of Daewoo Express? If yes then what is it?

The Daewoo bus stops once in the journey far short distance locations and they have any issue regarding this. Many people said that they had very bad experiences related to this rule that the buss will stop only once or twice during the journey, some mentioned that they were having some kidney pain, some said that they had some disease and no medicine but after their many requests to the crew they didn’t responded well and denied to stop. The crew argued that they are ordered not to make any more stops then the officially decided. 5 Do you think you are getting enough services for which you are paying?
Percentage Yes No 62.5% 37.5%

6

Do you receive information regarding the increase or decrease in fair?

Percentage Yes No 12.5% 87.5%

The customers when asked about that do you think you are getting enough services for which you are paying their answers were not much satisfactory for Daewoo. About 62.5% customers said yes they think that the Daewoo is providing enough services in response to what they are paying and 37.5% said it’s not enough or in other words the services are less and the fairs are high. When the customers were asked that do you receive the information regarding the increase or decrease of the fair they said no we know it suddenly when we are asked to pay? Here is diagrammatical presentation of their answer.

So 87.50% said they don’t receive the information regarding the increase or decrease of the fair and only 12.50% said they receive the information of increase or decrease of fair. The next questions asked were regarding the fairs, Daewoo and its advertising and promotional efforts.

7

Do you think the fairs of Daewoo Express Pakistan are justified?

Percentage Yes No 58.3% 41.7%

8

How u came to knew about Daewoo Express Pakistan?
Percentage TV Cable TV Newspaper Friends and family 4.17 4.17 8.3 83.3

9

Do you think if Daewoo Express Pakistan does more advertising and promotion it can get more customers?
Percentage Yes No 70.8% 29.2%

The customers had a mix response when asked that are the fairs of Daewoo justified or not. Out of 100% about 58.3% customers yes its justified and 41.7% said no its not justifies. However when they were asked that Do you think if Daewoo Express Pakistan does more advertising and promotion it can get more customers, 70.8% said yes definitely it can and 29.2% said no its not like that. Now here is diagrammatical presentation of how the customers of Daewoo express Pakistan came to knew about its services.

Out of 100% 4.17% customers said they came to knew about Daewoo via TV, 4.17% customers said via Cable TV, 8.33% customers they became aware of Daewoo via newspaper and 83.33% customers said they came to knew Daewoo Express Pakistan through their friends and family. 11 Do you think Daewoo Express is doing enough advertising and promotion? Percentage Yes No 16.7% 83.3%

12

Have you seen any advertisement or promotion of Daewoo Express Pakistan, if yes then on which of the following?

Percentage

TV Cable TV Newspaper Billboards

4.2 12.5 50.0 33.3

13

Is the crew of Daewoo Express courteous and friendly?

Percentage Yes No 91.7% 8.3%

In service industry the human resource is the biggest factor that can affect the business. Similarly one of the biggest reasons of Daewoo’s success is its human resource. The customers really appreciated their behavior and good manners. But many people mentioned that the crew is good but the terminal staff is not good and sometimes they don’t respect the customers and treat them as beggars. Some customers said that they don’t treat well if the customer is an illiterate person. Some mentioned that they show good behavior with the locals but don’t treat well the others. So they advised that there should be some check and balance on their behavior specially when there are more customers. 91.7% customers think that the crew of Daewoo is courteous and 8.3% think that the crew is not friendly and courteous

Promotion and advertising are very important part of marketing strategy and result in increase of profits and sales. Not only has this it also resulted in the recognition and positioning of the products or services of the company. It has been observed that Daewoo Express Pakistan is not doing too much advertising and promotion. When the customers were asked that do you think that Daewoo is doing enough advertising and promotion? 16.7% customers said yes it is doing enough advertising and promotion while 83.3% customers said that Daewoo is not doing enough advertising and promotion. For advertising and promotion different mediums can be used like TV, cable TV, newspaper and billboards etc. here is statistical representation that how many customers have seen the Daewoo’s advertisement on which medium. It was found that most of the customers approximately 50.0% customers saw Daewoo’s advertisement on newspaper. 14 Is Daewoo Express Pakistan's standard increasing or decreasing?

Percentag e Increasing Decreasing 70.8 29.2

15

You travel in Daewoo Express Pakistan because of which reason?

Percentage
Comfort Luxury Punctuality Status Symbol 54.2 4.2 37.5 4.2

16

Is refreshment of good quality?
Percentag e

Yes No

33.3% 66.7%

The first and difficult step of business is to create customers and good image in the market and than it’s more difficult to maintain it. When the customers were asked that is the standard of Daewoo increasing or decreasing, 70.8% customers said it’s increasing and 29.2% said decreasing. Refreshment is very interesting feature of Daewoo Express Pakistan and many people after sitting in the buss start waiting for refreshment. Apart from this some people like it and some don’t like it. During the survey when the customers were asked is refreshment of good quality or not, 33.3% said it’s of good quality and 66.7% said not of good quality.

Customers travel in Daewoo because of which reason here is its representation in the pie chart.

So majority people travel in Daewoo because of comfort and secondly because of punctuality. 17 What u like best about Daewoo express?

People first use a product or service then if they get satisfied they use it further for any good reason or benefit that they get from it. Different people have different perceptions regarding a product or service. When the customers of Daewoo were asked what you like best about it they gave different reasons answers. Majority customers said they like its punctuality, some said the comfort that it provides. Some said they like the dealing of crew and the management with customers. Some said that it’s the best among the available options of transport. Some said that its other services are awesome which you don’t get anywhere.

Among last questions asked to customers were the following. 18 What is the unique service of Daewoo Express Pakistan in your view?
Percentag e Security Punctuality Comfort Luxury 20.8 50.0 12.5 12.5

19

What you say about the fair of Daewoo Express Pakistan?
Percentag e

No changes should be made Increase the fair Decrease the fair

26.1 8.7 65.2

Fairs are the main source of revenue for the Daewoo express Pakistan and its rates are quite high as compared to the other transport companies operating in Pakistan. When the customers were asked that what your point of view is regarding the fairs of the Daewoo replied, the fairs are quite high and it’s increasing day by day. The fair must be decreased because it’s totally unjustified

Daewoo Pakistan has many unique features because of which the customers got attracted and then became a loyal customer of it. When the customers were asked what is the unique feature of Daewoo in your point of view, 20.8% said security, 50.0 said punctuality, 12.5% said comfort and 12.5% said luxury. At the end the researcher asked what suggestions you want to give to the Daewoo’s management they gave following suggestions. The customers suggested increasing security, cleanliness and quality of services. Some suggested to open terminals in cities like Quetta, district Khairpur, Wah Cantt, Jamshoro etc. some suggested please open your terminal at university areas. Some suggested that make your cargo service more effective. A large group of people asked to reduce fair rates because it’s increasing day by day and many customers left Daewoo because of this reason. People also suggested that the refreshment should be improved and majority don’t like the chips and cold drink. They said the past refreshment which included sandwiches and drinks was much better than this refreshment. Minimize fair for middle class and improve food quality and also reduce panic situation in bus terminals. Some said that Daewoo is renowned for punctuality and comfort, so as you are charging extra fare, so keep that two tools for customers to retain market share.

5.3 Summary

This chapter has provided the thesis with empirical data to shed light on the research’s problem field. This data have been based on the marketing mix. The material have been gathered through interviews and surveys based on marketing mix concept divided into two categories Daewoo services and customers to better provide a good structure in addition to mapping marketing mix related to views and statements that will be of interest in the final task of this research; The Analysis. The authors hope that the reader has gotten a good perceptive of the marketing mix and have gained an impression of the authors’ experience during these interviews and surveys based on marketing mix.

6. THE ANALYSIS

In this concluding chapter the empirical data will be analyzed in view of the theoretical framework from chapter 4. This final analysis will provide the thesis with a research that will in the end lead to the answer of the problem statement. Here the empirical data gathered during this research will be analyzed against the concept of marketing mix. The analysis is divided into four parts where empirical data will be analyzed and discussed up against the 4 P’s of marketing mix. Through a careful analysis based on the three theories the problem statement will be answered. In the end recommendations to future research will be given.

6.1 Marketing mix:

Before undertaking a thorough analysis of the empirical data applied to the main theoretical framework, a brief explanation of the marketing mix is mentioned below. “Marketing Mix s a dedicated business strategy applied for the longevity and profitability of the product or service, by the marketing department.” The whole concept of marketing mix revolves around the P’s some authors said 4 P’s and some say 7 P’s. And now with the passage of time the number of P’s in the marketing mix is increasing due to the complex and competitive environment of the business. Marketing mix is the core concept of marketing and marketing is incomplete without it. Daewoo express Pakistan is serving the Pakistani nation for their transport needs and is offering the best services. However nothing is ideal and flawless so it is. The Daewoo has a separate department of marketing which deals with the marketing strategies of the company. They say that they pay special concentration to the marketing mix. In this chapter the pure theoretical concept of marketing mix will be compared with the empirical findings. 6.1.1 Price: In this chapter the implementation of marketing mix is analyzed on the basis of marketing mix theoretical framework. Price is one of the key elements of marketing mix or in other words you can say that marketing mix concept is incomplete without the price. Different companies, organizations and institutes adopt different pricing strategies for their products and services. “Deciding on a pricing strategy. Even if you decide not to charge for a service, it is useful to realize that this is still a pricing strategy. Identifying the total cost to the user (which is likely to be higher than the charge you make) is a part of the price element.” According to McCarthy Price is defined as:

“The price is the amount a customer pays for the product. It is determined by a number of factors including market share, competition, material costs, product identity and the customer's perceived value of the product. The business may increase or decrease the price of product if other stores have the same product.” Pricing is one of the most important elements of the marketing mix, as it is the only mix, which generates a turnover for the organization. The remaining 3 P’s are the variable cost for the organization. It costs to produce and design a product; it costs to distribute a product and costs to promote it. Price must support these elements of the mix. Pricing is difficult and must reflect supply and demand relationship. Pricing a product too high or too low could mean a loss of sales for the organization According to above statements pricing a product too high or too low could mean a loss of sales for the organization. The consumers of Daewoo Express Pakistan also say that the increase in the fairs of busses is decreasing the number of customers. They said as the fairs are increasing day by day many customers have shifted to other transport options. Majority of the customers suggested decreasing the fair rates. When the survey was conducted regarding the services of Daewoo Express and the customers what you say about the fair of Daewoo? In response to it 62.5% customers said the fair should decrease, 8.7% customers said the fair should increase and 6% said there should be no change in the fair rates. Whereas the Daewoo management says our customers are quality conscious not price conscious. They don’t care of the price that they are paying for these service they want only good services. The survey conducted regarding the fair rates of Daewoo proved that people want decrease in the fair rates.

When people were asked that do you think you are getting enough services for which you are paying? 62.5% customers said yes its justified and 37.5 % said its not justified. “An organization can adopt a number of pricing strategies. The pricing strategies are based much on what objectives the company has set itself to achieve”. There are different strategies that one can adopt which includes penetration, skimming, competition pricing, product line pricing, bundle pricing, psychological pricing, premium pricing, optional pricing. According to the Daewoo management their prices are determined on the basis of their costs and also self determined. They are charging high fairs because they are having monopoly and they don’t have any competitor. They say that they determine the buying power of the customers but they are concentrating only on the upper class and ignoring the middle class. This has been analyzed through the survey conducted because 70% customers said the fair must be decreased and 30% said that there should be no change in the fairs. When setting the price the organization or the individual has to make some other pricing decisions also which includes suggested retail price, volume discounts, wholesale pricing, early payment discounts, seasonal pricing, bundling price, flexibility, and price discrimination. There are no discounts provided by the Daewoo according to the feedback of people. The Daewoo express is just operating at standard fairs and not providing any discounts to anyone. When the customers were asked that any suggestions that they want to give to the management the mostly given suggestion was that it should decrease the fair rates. The right pricing strategy leads to the success of the business and bad pricing strategy just destroys the business.

6.1.2 Place: “Place or distribution. Looking at location and where a service is delivered.” According to McCarthy “Place represents the location where a product can be purchased. It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet.” The Daewoo Company carries out special research to determine the place and city for their terminal. There are many determinants on the basis of which they decide that they should start their services in which city. It includes population of city, neighboring cities as well, standard of living, lifestyle, source of income of people of that area etc. They also advertise when opening a new terminal so that people may come to know about their launch of services. Most of the customers are satisfied with the location of the terminal but some people have some reservations regarding it. The terminals in small cites are easily accessible and at convenient place according to the customers but the terminals are not convenient and at easy accessible locations for all the customers. So the customers have also suggested solving this issue. According the survey conducted 75% customers said that the Daewoo terminal is at convenient and at easily accessible location while 25% customers said its not. “This refers to how an organization will distribute the product or service they are offering to the end user. The organization must distribute the product to the user at the right place at the right time. Efficient and effective distribution is important if the organization is to meet its overall marketing objectives. If an organization underestimates demand and customers cannot purchase products because of it, profitability will be affected.”

Daewoo has its own terminals in the three provinces of Pakistan and soon going to operate in Balochistan as well. According to Daewoo Express the Company will make sure that service is available throughout the country at all the suitable locations. It will never stop until they open their terminals and provide services to the people of Pakistan at all possible locations. The customers responded to the survey and suggested that the company should start new terminals in different city of Pakistan specially Sindh. And the people of Balochistan are also ready to welcome Daewoo Express. People also suggested that there should be more improvement in cleanliness and security at the terminal. There should be maps within the big cities to guide people about the Daewoo terminal. Because in big city everyone is not aware of the whole city like in small cities. According to the survey conducted 75% customers said that the Daewoo terminal is at convenient and at easily accessible location while 25% customers said its not. Distribution is about getting the products to the customer. Some examples of distribution decisions include:
• • • • • • • • •

Distribution channels Market coverage (inclusive, selective, or exclusive distribution) Specific channel members Inventory management Warehousing Distribution centers Order processing Transportation Reverse logistics

The distribution channels of Daewoo Express are company owned. It is providing services through its different terminals in the cities of Pakistan. And as for as the market share is concerned it is concentrating on exclusive and selective market share because its target market is upper middle class. There whole strategies are prepared according to the wishes and needs of upper middle class. This was my analysis on the basis of the empirical data and theoretical framework

6.1.3 Promotion: “This includes advertising, personal selling (e.g. attending exhibitions), sales promotions (e.g. special offers), and atmospherics (creating the right impression through the working environment). Public Relations are included within Promotion by many marketing people (though PR people tend to see it as a separate discipline).” According to McCarthy “It represents all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements: advertising, public relations, word of mouth and point of sale.” The above definitions explain the importance of promotion and also the means which can be use to promote a product, service, company or an individual. Here the promotional efforts of the Daewoo Express will be analyzed that how much it has focused on this P of marketing mix. However, when the author was carrying out the empirical findings the Daewoo management said we don’t do too much advertising and promotion. Here the response of the customers will also be mentioned that what they said regarding the promotional efforts of Daewoo Express. But before analyzing it lets looks at the various strategies by which the promotional efforts can be done.

A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organizations promotional strategy can consist of: advertising, public relations, sales promotion, personal selling, personal selling, word of mouth, direct mail From the statement “successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market” it becomes very clear that the business is incomplete without the promotional efforts. The customer will be attracted towards the product or service only when he will be aware of its good and distinguished features. Now each strategy of the promotion will be analyzes against the Daewoo’s promotional strategies. Advertising: Any non personal paid form of communication using any form of mass media. Daewoo uses the cable TV and billboards only when it starts its operations in a new city or when it launches a new route. And it uses newspaper also when required specially for recruitment purpose. The customers in response to the advertising strategy said that they rarely see Daewoo’s advertisement on the TV either its satellite TV or cable TV however they have seen its advertisements on newspaper and billboard. According to the survey conducted 50% customers said that they have seen the advertisement on newspaper, 33% on billboards, 13% on cable TV and 4.2% on TV. Public relations: Public relations Involves developing positive relationships with the organization media public. The art of good public relations is not only to obtain favorable publicity within the media, but it is also involves being able to handle successfully negative attention.

Daewoo Express is not doing any kind of Public relations promotion. They just have a good image in the mind of people and media because they are the only company who is offering something different than the other companies. And as for handling the negative attention we haven’t seen any activity. The reason is only they are ignoring the most important P of marketing mix. Sales promotion: It is commonly used to obtain an increase in sales short term. It can

involve using money off coupons or special offers. The Daewoo Express is operating standard fair rates so the customers are attracted just as normal customers. They are not offering any incentives which could increase their sales. Not offering any discounts or packages for regular customers. Through the survey it was found that people suggested the management of Daewoo Express should offer some discounts specially concession for the students. Personal selling: Selling a product or service one to one is called personal selling.

The Daewoo express is offering only its services at its terminal and standard services. Word of mouth: The passing of information from person to person is word of mouth. Originally the term referred specifically to oral communication (literally words from the mouth), but now includes any type of human communication, such as face-to-face, telephone, email, and text messaging. 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 As mentioned in my empirical findings the Daewoo Express is not doing much advertising. The only thing that is working for Daewoo Express as a promotional tool is the word of mouth. Its sales staff is also working as world of mouth.

The customers of Daewoo gossip about its services with their friends and family. According to the survey conducted when customers of Daewoo Express Pakistan were asked how they came to knew about Daewoo, 83.3% customers said friends & family, 8.3 % customers said newspaper, 4.2% said cable TV and 4.2% said TV. Direct Mail: Is the sending of publicity material to recipients of postal mail? There has been a massive growth in direct mail campaigns over the last 5 years. Organizations can pay thousands of pounds for databases, which contain names and addresses of potential customers. Direct mail allows an organization to use their resources more effectively by allowing them to send publicity material to a named person within their target segment. By personalizing advertising, response rates increase thus increasing the chance of improving sales. Daewoo is not at all sending any publicity material to the potential customers. This was found during my conversation with the Daewoo management, also through the survey and interaction with the customers of Daewoo Express.

6.1.4 Product: “Defining the characteristics of your product or service to meet the customer’s needs.” According to McCarthy “A tangible object or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units. Intangible products are service based like the industry, transport industry & the hotel industry or codes-based products like cell phone load and credits.”

The term "product" refers to tangible, physical products as well as services. Here are some examples of the product decisions to be made: Now before analyzing the Daewoo’s product or services, some things have to be cleared. Daewoo Pakistan is a service based company which is operating in Pakistan for providing transport facilities to the people of Pakistan. Daewoo Pakistan is offering three services in Pakistan which includes  Express bus Service  City bus service  Shuttle service When an organization introduces a product into a market they must ask themselves a number of questions.     Who is the product aimed at? What benefit will they expect? How do they plan to position the product within the market? What differential advantage will the product offer over their competitors?

One must remember that Marketing is fundamentally about providing the correct bundle of benefits to the end user, hence the saying ‘Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer. According to Daewoo Pakistan there customer is upper middle class. They expect good and timely services with some extra advantages. They planned to position the market and the company as number one in Pakistan. And somehow they managed to do so and they are offering number of differential services like refreshment, pick and drop facilities, punctual departures and arrivals, courteous hostesses and armed security guards. So as far the product strategies are concerned they are trying to fulfill it by their best efforts.

According to the survey conducted people just want some more busses because they have to wait a lot and sometime have to cancel their trip due to no seat available. Especially city buss service is seriously affected. People want Daewoo in more cities of Pakistan to start its services. And people also want that in busses there should be availability of toilet and health care facility. Philip Kotler in Principles of Marketing devised a very interesting concept of benefit building with a product Kotler’s concept of benefit building with the product Kotler suggested that a product should be viewed in three levels. Here Daewoo’s products will be analyzed under the kotler’s concept of benefit building with the product. Level 1: Core Product: the level one concentrates on the core benefits of the

product. The core product of Daewoo is to provide transport facility out of city which it is achieving through the Express bus service. It concentrates on providing scheduled journey facility. Level 2 Actual Product: The strategy at this level involves

organizations branding, adding features and benefits to ensure that their product offers a differential advantage from their competitors. Daewoo is offering extra features like refreshment pick and drop facilities, punctual departures and arrivals, courteous hostesses and armed security guards which others are not offering and as a result people travel through Daewoo. Level 3: Augmented product: the third level of the Kotler’s concept of benefit

building with the product concentrates on what additional non-tangible benefits can offer. Daewoo cares about its customers even after the end of the journey. If due to any negligence on the behalf of Daewoo Pakistan any delay occurred in the timing of departure or arrival the fairs are either fully returned or some percentage of it. And its customers will not be left helpless they will be fully facilitated.

6.2 Summary of Analysis In this summary the main findings in the various sections have been highlighted. Afterwards, the summary provides a section where the separate findings are seen together, so that the reader can fully understand the purpose of the analysis. It has been found through this chapter that Daewoo is not fully utilizing all the P’s of marketing mix. The company services are really good, however the cleanliness, health and especially refreshment area needs some improvements. The terminals the company has opened in most cities of Pakistan are at ideal locations except the big cities. The supply and demand is also not fully met because the customers have to wait for the next bus because usually the busses are already full. The pricing policy of Daewoo is not too much effective because its fairs are too high as compared to the other transport companies in Pakistan like Niazi have expanded their business in Lahore because their fairs are low but services are not as good as Daewoo’s. So if Daewoo does any change in its pricing policy in comparison with the other companies it can definitely earn more profit and expand its business. Then comes the main flaws of Daewoo Express Pakistan, its network is not much extensive and it has underestimated its competitors like Niazi Express and Abdullah Travels. The Daewoo is required to open its new terminals in the other cities of Pakistan and Balochistan Province. The company has neglected the most important P of marketing mix Promotion. The company is not doing any kind of advertising and promotion to attract the new customers. As Daewoo is not too old in the transport industry and it has to attract those customers who are using other transport companies due to low fairs or due to their loyalty with them.

6.2.1 Conclusion & suggestions Through this summary of the analysis, the authors have elaborated an answer to the thesis problem statement. “Implementation of marketing mix concept in transportation sector & how it can add value to the sector” By the conducted research author unveiled that by the implementation of the concept of marketing mix, it can surely add value to their operations and further more increase the company's profit In this research paper the shortcomings in the implementation of marketing mix have been shown through the empirical data. If Daewoo reduces its fair rates and increase its advertising and promotional efforts then its customers can increase at least 30%. Now as the researcher has investigated this case study he has some suggestions for the Daewoo Express Pakistan No doubt the customers are quality conscious but at the same time they are price conscious as well. So if Daewoo decreases its fairs then it can definitely attract a huge number of customers. And it must reconsider its pricing policy The company must offer some packages to the customers, discounts to regular customers, concession for the students and special offer for senior citizens. This will not only increase business, the customer loyalty but also will cause an increase in the word of mouth. In big cities like Lahore and Islamabad it should increase the number of terminals. It should also display city maps identifying the location of Daewoo Express terminal.

The company should advertise and promote its services so that those customers who are not aware of the unique services of Daewoo could be attracted. Daewoo should start special colorful busses for the events of Basant and Eid festivals because people will be more attracted towards it as they have to travel but then they will travel through Daewoo rather then anything els The tourism service is an opportunity which is yet not explored so if Daewoo steps into this it can definitely bring some fruitful results. The company should offer full package trips to the customers they will definitely catch such offer. The reason is this people want to explore beautiful places and historical locations but people don’t want to go alone. By this offer they will definitely come because Daewoo is already famous for its comfortable and secure journey.

6.2.2 Future Research During this research there has been collected numerous empirical data. Due to the time limit of this thesis, the author has not been able to use everything that has been collected. I therefore hope this material can be used in future research. In future the study can be carried out on the 7P’s of marketing mix.

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Appendix A • • • • • • • • • • • • • • • How you set your price? Do you set your price according to class? Don’t you think increase in your fair rates makes your customers to move to adopt other transport companies? We haven’t seen much advertisng and promotion of Daewoo Express Pakistan, why? Do you think increase in promotion can bring more customers? How you decide that in this city you should open the terminal? Will you open terminals in other cities of Pakistan? Why are you not working in Balochistan? Why don’t you start offering tourism services to the people of Pakistan? What are the unique techniques and technologies that you are using in your busses? How you decide that this bus should be operated through this terminal and which not? What is your hiring policy? Do you have any training and development policy for your employees? Is the govt favorable for your business? Why you are not expanding your city bus services in other cities of Pakistan?

Appendix B • • • • • • • • • • • • • • • • • • • • • Are you satisfied with the standard of busses? Are the busses meeting the modern needs of passengers? Are the terminals of Daewoo Express at convenient and at easily accessible location? Do you have any problem regarding the terminal of Daewoo Express? If yes then what is it? Do you have any suggestion regarding the stops at which it stops. If yes then what? Do you think you are getting enough services for which you are paying? Do you receive information regarding the increase or decrease in fair? If yes then how? Do you think the fairs of Daewoo Express are justified if not then why? How u came to knew about Daewoo Express? Do you think if Daewoo Express does more advertising and promotion it can get more customers? Do you receive info regarding new services of Daewoo Express in time? Do you think Daewoo Express is doing enough advertising and promotion? Have you seen any advertisement or promotion of Daewoo Express, if yes then on cable TV, Satellite TV, Billboards or Newspapers? Is the crew of Daewoo Express courteous and friendly? Is the crew of Daewoo well educated according to their job? What was your bad experience with the crew of Daewoo Express? Is Daewoo’s standard increasing or decreasing? Any suggestions you want to give to Daewoo Express’s management? You travel in Daewoo because of which reason? Is refreshment of good quality if not then why? Is the environment of Daewoo Express gentle and friendly?

• • • •

What is lacking in Daewoo express services? Any drawback of Daewoo express? What u like best about Daewoo express? What is the unique service of Daewoo Express in your view?

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