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Marketing Management (5565)
ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD (Department of Business Administration)
M>BA/M.PA Roll #
Q. 1 Distinguish business marketing from social marketing? How marketing strategies are differently formulated in these two approaches?
BUSINESS MARKETING is the practice of individuals, or organizations, including commercial businesses, governments and institutions, facilitating the sale of their products or services to other companies or organizations that in turn resell them, use them as components in products or services they offer, or use them to support their operations. Also known as industrial marketing, business marketing is also called business-to-business marketing, or B2B marketing, for short. There are three basic things to know in order to effectively grow and expand business. 1. Grow Business Organically 2. Importance of Defining Target 3. Know the Difference Between Marketing a Small Business vs. a Large Corporation. The essence of marketing is to understand customers’ needs and develop a plan that surrounds those needs. You can increase organic growth in four different ways. They include:
• • • •
Acquiring more customers Persuading each customer to buy more products Persuading each customer to buy more expensive products or up selling each customer Persuading each customer to buy more profitable products
All four of these increase revenue and profit. How can you use marketing to acquire more customers?
• • • •
Spend time researching and create a strategic marketing plan. Guide your product development to reach out to customers you aren't currently attracting. Price your products and services competitively. Develop your message and materials based on solution marketing.
SOCIAL MARKETING can be defined as the design, implementation and control of programmers calculated to influences the acceptability of social ideas and involving consideration of product planning, pricing, communication, distribution and marketing research. With the rapid growing marketing business, technology is playing a more important role in the demands of analyzing and utilizing the large scale information gathered from customers. To predict the consequent business strategy by using technology, it is required to evaluate the customer performance, discover the trends or patterns in customer behavior. For this purpose the in modern world using the technology at a maximum level by e-commerce, internet marketing and services etc. Even though in several developing countries,
SOCIAL MARKETING VS. BUSINESS MARKETING Business marketing is meant to sell a company to investors or financial backers, or key management personnel. Business plans are used to raise investment and loan funds and are typically for outside use (accountants, investors, IRS, bankers, and board members). Business marketing is typically broken down into five sections (the Company, Markets, Products/Services, Finance and Employees) regardless of the stage of your business (just starting, in the growth stage, or mature business). Social marketing are the blue prints to business success. They are the tools for internal planning and implementing a detailed method to making profitable sales and growing the business. NINE ELEMENTS OF A GOOD SOCIAL MARKETING 1. The Market Place 2. Market Strategy 3. Competitive Assessment 4. Marketing Systems 5. Budgets 6. Measuring Effectiveness 7. Executing the Marketing Plan 8. What Can Affect Your Marketing Plan? 9. Making Your Business Grow 1. The Market Place A. Overview of your company's approach to marketing and its history B. Mission Statement C. Products and Services offered, and the unique selling benefit to the buyer D. List the standards in the industry, new marketing ideas, and any emotional component of the product or service E. Sales cycles and products/services needed; life cycles of product F. The personnel needed and job descriptions 2. Market Strategy Who are your customers now, and who will your customers be in the future? Which customer is the best prospect? Do you sell to other businesses or organizations instead of directly to the public? In the Market Strategy you must provide evidence that the end-user needs your solution. Consider the consumer demands and response to their emotional and logical needs. • Segmentation: divide potential market into categories, items shared in common, or segments of an industry • Targeting: by geographic area, income, demographics, or specific unique characteristics of the potential customer • Positioning: key reasons a customer will buy your product/service 3. Competitive Assessment • Competitor's assessment: who, where, product lines, prices, employees, strengths, weakness, market share, market strategy and PSE • Information from personal observations and electronic media (database information, newspaper or other archives) • Set up information tracking on each competitor including ads, promotions, new hires • Their sales cycles, product life and inventory projections
Marketing Systems • Sales Style • Public Relations and Image: from PSE to community opinion, meeting and training staff • Advertising • Sales Promotions, event marketing, point of purchase tools, vendor support, sales displays and CO-OP advertising 5. Budgets Budgets are estimates tied to specific allocation of revenues. Unlike conventional financial statements, profit and loss and cash flow statements, there is no standardized format for a marketing budget, and yet, a budget is required to have a successful marketing plan. • Itemization of expected expenditures • Annual marketing budget • After the investment, compute the expected return 6. Measuring Effectiveness • Ask customers what brought them to your establishment • To keep valued customers, keep in touch with them 7. Executing the Marketing Plan A. Timing: for many types of products and services there are optimal times for selling B. Meet deadlines, plan every step of the project, and build in extra time C. Put employee tasks in writing with exact instructions and scheduled completion dates D. Specialized knowledge is required for each marketing task Hire professionals to help you save time, money and frustration. Every successful project must have the details worked out and be ready to present before the task is started. 8. Factors That Can Affect Your Marketing Plan Get the market research needed to plan for the unexpected. Computerized databases at the library or on the Internet can provide the answers you seek. Newspapers have archives to retrieve research on every subject. A. The economy B. Government policies, local and federal C. Cultural and social values D. Lifestyle trends E. Geography F. Technology G. Competition H. Location I. Employees J. Suppliers
MARKETING STRATEGY FORMULATION OF BUSINESS MARKETING 4
Market segmentation is an essential factor for a successful marketing strategy. Being able to identify the different market groups allows a business to make better and more effective decisions in regard to advertising new products. This is the key to understanding the different wants and needs of different customers. Once you have categorized your market, you will then be able to formulate marketing activities that will ensure your targeted audience to know about the products or services you are offering and why they need them in their lives. This is achieved through the various forms of advertising. Since customers know exactly what they want and what will motivate them, you need to base your techniques on this fact. You have to make your targeted audience feel that they need to purchase whatever it is you are offering. New product launch In this highly competitive market, a business cannot afford to slack off and leave the competition without putting up a good fight. What your business was like a year or two ago may not be what it is right now. Gigantic changes are going on in the world and marketing strategies are no exemptions to that. Businesses should think outside the box. Observe who is doing better and then try to imitate them or better yet, outwit them. It will greatly benefit your company to do market research in order to determine your potential market and be able to make changes to your current marketing strategy. This is mainly done to draw uninterested customers to at least give your business a try. Your new product launch should make enough noise to ensure that it will remain in customer’s memories and entice them to really try it. With the various media available today, you can maximize your visibility by not limiting your business to one media. Turn your company around by doing a major brand makeover. If there are not a lot of people who are buying your product or service, then perhaps it is because they literally do not see you. This is not a time when businesses are allowed to sober down on marketing techniques just because the economy is going down. Once the economy gets back on track, chances are people will no longer remember those that were not visible in the market during this time. You have to make your business a household name for people to remember you long after this global recession is over.
Q. 2 Explain the role of marketing in relation to following sectors: (i) Agriculture Development and Farm Productivity (ii) Industrial and Entrepreneurial Growth 5
Export promotion and Tourism
AGRICULTURE DEVELOPMENT AND FARM PRODUCTIVITY Agricultural marketing covers the services involved in moving an agricultural product from the farm to the consumer. Numerous interconnected activities are involved in doing this, such as planning production, growing and harvesting, grading, packing, transport, storage, agro- and food processing, distribution, and sale. Such activities cannot take place without the exchange of information and are often heavily dependent on the availability of suitable finance. Marketing systems are dynamic; they are competitive and involve continuous change and improvement. Businesses that have lower costs, are more efficient, and can deliver quality products, are those that prosper. Those that have high costs, fail to adapt to changes in market demand, and provide poorer quality, are often forced out of business. Marketing has to be customer-oriented and has to provide the farmer, transporter, trader, processor, etc. with a profit. This requires those involved in marketing chains to understand buyer requirements, both in terms of product and business conditions. Support to developing countries with agricultural marketing development is carried out by various donor organizations. Activities include market information development, marketing extension, training in marketing and infrastructure development. Since the 1990s trends have seen the growing importance of supermarkets and a growing interest in contract farming, both of which impact significantly on the way in which marketing takes place. Improvement of marketing systems necessitates a strong private sector backed up by appropriate policy and legislative frameworks and effective government support services. Such services can include provision of market infrastructure, supply of market information, and agricultural extension services able to advise farmers on marketing. Training in marketing at all levels is also needed. One of many problems faced in agricultural marketing in developing countries is the latent hostility to the private sector and the lack of understanding of the role of the intermediary. For this reason “middleman” has become very much a pejorative word. Agricultural Development and Farm Productivity: Low farm productivity of many developing countries is often due to factors such as inefficient methods of irrigation, lack of mechanization in farming, inadequate supplies of fertilizer and natural disasters. But one fundamental problem which is not recognized is lack of marketing system.. Most of the farmers lack access to market system and thus lack both resources and incentives to modernize their production. Development of rural market system is of fundamental urgency in bringing about the necessary agricultural revolution. Proper incentives should exist for a subsistence farmer to produce more. The most basic incentives are his access to the national market. Marketing technology can play a major role in enabling this phase of institutional development. 6
Institutional access to the national marketing system could be accomplished as an independent task or as part of a major social developmental action. The marketing system could be a part of community centre which offers a variety of services social, economic and educational to its residents. ROLE OF MARKETING INDUSTRIAL AND ENTREPRENEURIAL GROWTH The Role of Marketing in Economic Growth: Marketing plays a vital role in economic growth in the present global world. It ensures the planned economic growth in the developing economy where the scarcity of goods, services, ideas and excessive unemployment, thereby marketing efforts are needed for mobilization of economic resources for additional production of ideas, goods and services resulting in greater employment. Marketing stimulates the aggregate demand thereby enlarges the size of market. Marketing in basic industries, agriculture, mining and plantation industries helps in distribution of output without which there is no possibility of mobilization of goods and services which is the key point for economic growth. These industries are the back bone of economic growth. It also accelerates the process of monetizing the economy which in turn facilitates the transfer of investible resources. It helps in discovery of entrepreneurial talent. Intermediate industrial goods and Semi-industrial products etc. essentially marketed for industrial purpose in order to develop the industrial sector with a view to economic growth. In Export trade and services like tourism and baking marketing plays eminent role in order to grow the economy. With the rapid growing marketing business, technology is playing a more important role in the demands of analyzing and utilizing the large scale information gathered from customers. To predict the consequent business strategy by using technology, it is required to evaluate the customer performance, discover the trends or patterns in customer behavior. For this purpose the in modern world using the technology at a maximum level by e-commerce, internet marketing and services etc. Even though in several developing countries, Government involves in marketing efforts in order to provide equitable distribution at minimum social costs by setting ceiling and floor prices of foods grains and industrial raw materials, setting maximum whole sale and retail prices of scarce consumer products etc. which ensures the smooth flow of essential goods and even influencing the decisions pertaining to distribution and advertising. Even though the economic recession affects the market at a larger extent, it plays major role in economic growth. The end result will be the maximization of growth of the economy in order to provide higher standard of living for all and the development of a economic levels of the people that fosters entrepreneurialism
Industrial and Entrepreneurial Growth: Many developing nations in their quest for industrial growth have imported sophisticated intensive technology from the West. This has put an enormous burden on the nation's scarce foreign exchange. In this process the technological and capital needs of small industries have been largely neglected. In this respect developing nations may take lesson from both Japan and the United States where small businesses constitute a large part of their industry. Some nations have encouraged the building of factories in the rural sector. This strategy often proved to be uneconomical as the job skills demanded by these factories are quite alien to the technical skills the rural community can offer or can be trained for. Industrial development has to be tied to the local community. In developing countries where high technology investments are prominent, the operation of these enterprises has suffered from managerial problems. A nation's demands for management professionals will grow as it proceeds to industrialize, and the supply of talent should keep up with the projected growth patterns. New entrepreneurs can be produced and existing entrepreneurs can be stimulated to greater efforts in their business through training. Marketing professionals may take an active role in entrepreneurial development programmers. It is relatively easy to provide technological assistance to an entrepreneur than marketing assistance. Marketing skills are sorely needed for successful entrepreneurship. Organizations dealing with entrepreneurial training should have marketing professionals on their staff to train the potential entrepreneur. THE IMPORTANCE OF MARKETING IN THE TOURISM SECTOR The industry of tourism and hospitality is one of the most important of the world economy. It is estimated that the tourism industry holds about 10% of workforce worldwide, reaching 18% in Europe. Calculations and estimates of aggregate economic significance of tourism show a weight ratio of the sector's total of up to 14% in 2000, while forecasts for 2010 see the weight of the sector to rise to 15% abundant. Tourism Marketing The tourism marketing is the application of the principles and techniques of marketing to the general field of tourism. The marketing is a natural complement to the marketing and tourism can be defined as a systematic strategy, built on the needs and expectations of the market, to optimize the use by local authorities, the factors and elements that contribute to the enhancement of attractions and tourist services, or offered by a given territory. Territorial Marketing Territorial Marketing is a complement of broad and general marketing of tourism. This framework aims to provide professional and technical bases necessary to move effectively in the modern tourist market, dominated by the question, in which the success and survival of the flow from its ability to understand and conquer the consumer to understand the needs and satisfy them better, but better than the competition. 8
RECREATION AND TOURISM MARKETING A product can be "ideas, goods, or services." Since tourism is primarily a service based industry, the principal products provided by recreation/tourism (R/T) businesses are recreational experiences and hospitality. These are intangible products and more difficult to market than tangible products such as automobiles. The intangible nature of services makes quality control difficult but crucial. It also makes it more difficult for potential customers to evaluate and compare service offerings. In addition, instead of moving the product to the customer, the customer must travel to the product (area/community). Travel is a significant portion of the time and money spent in association with recreational and tourism experiences and is a major factor in people's decisions on whether or not to visit your business or community. As an industry, tourism has many components comprising the overall "travel experience." Along with transportation, it includes such things as accommodations, food and beverage services, shops, entertainment, aesthetics and special events. It is rare for one business to provide the variety of activities or facilities tourists need or desire. This adds to the difficulty of maintaining and controlling the quality of the experience. To overcome this hurdle, tourism related businesses, agencies, and organizations need to work together to package and promote tourism opportunities in their areas and align their efforts to assure consistency in product quality.
Q. 3 How service marketing is different from product marketing? What are the various elements of a marketing strategy required to successfully market a service? Explain in detail. SERVICES MARKETING is marketing based on relationship and value. It may be used to market a service or a product. Marketing a service-base business is different from marketing a product-base business. There are several major differences, including: 1. The buyer purchases are intangible 2. The service may be based on the reputation of a single person 9
3. It's more difficult to compare the quality of similar services 4. The buyer cannot return the service Service Marketing has been relatively gaining ground in the overall spectrum of educational marketing as developed economies move farther away from industrial importance to service oriented economies. What is marketing? Marketing is the flow of goods and services from the producer to consumer. It is based on relationship and value. In common parlance it is the distribution and sale of goods and services. Marketing can be differentiated as: • Marketing of products • Marketing of services. Marketing includes the services of all those indulged may it be then the wholesaler retailer, Warehouse keeper, transport etc. In this modern age of competition marketing of a product or service plays a key role. It is estimated that almost 50% of the price paid for a commodity goes to the marketing of the product. Marketing is now said to be a term which has no particular definition as the definitions change everyday. The product or service that people purchase is meant to be a solution to some problem, which may be simple or it could be serious problem. The job of marketing is to give to the customer something that is wanted and it may require attracting people to seek a particular solution that is a product or service. There must also be consistent follow-up action that will keep the customer informed about the benefits of the product or service being marketed. Thus, the main difference between marketing products or services is that there is much more personal contact required when marketing a service as compared with marketing products. Marketing services may require meeting the customer in a face-to-face basis, or it may mean contacting prospective customers over the telephone. Once marketing efforts get good prospective clients who are coupled with follow-up action, the chances of converting a good percentage of these prospective customers into paying customers will greatly improve and there will be no real perceivable difference between marketing a product or service except perhaps the amount of personal contact made with the customer while marketing product or service Marketing products and services can have many similarities as well as differences. Products and services benefit from adding trust and name recognition into the marketing materials, but products can be impulse purchases whereas services need time for delivery. There are several differences between marketing products and services, most of which center on relationship building. TRUST Entrepreneur magazine says in a service-based business, "you are the product." In other words, you have to sell confidence and trust in yourself, and your ability to perform the services as described. When marketing a service, you need to instill trust and confidence in your abilities because instead of receiving a tangible product in exchange for money, the customer receives a promised result. 10
TIME Selling a service also means you're selling your time. When you sell a product, there is time invested to create or acquire the product and then it is sold again and again without further time invested. Services by their very nature are time-intensive activities because there is no way to continue providing a service without continuing to invest time performing the service. Time is an important part of marketing a service because if you promise results within a given time frame, you must be certain you're able to deliver while still managing and providing services for others. You must be able to effectively estimate and manage the time needed for providing services to clients. DELIVERABILITY When you're marketing products, you can give customers a delivery date estimate if they're ordering online or through the mail, and they can walk out the door with the product in hand if they buy it in your brick and mortar store. Services must be created after they're ordered, and delivery times will vary. The challenge with marketing services is being able to convince customers that you can and will deliver quality results within a given period of time. Usually service marketing materials have testimonials and case studies from other satisfied clients that work to prove you're able to deliver on the promises in your marketing materials. WANTS AND NEEDS Many products can be marketed in ways that trigger impulse buying. If someone sees a pair of shoes, she can suddenly decide to buy them whether they're needed or not. She may justify the purchase by claiming they needed dress shoes for a special occasion, but in reality she gave in to a want instead. Services are rarely impulse buys, but the marketing materials can help buyers justify the want or need by explaining the benefits the customer will receive from buying the service. A lawn care service for example, can include convenience and free time as part of their marketing materials, to persuade buyers to sign up. RELATIONSHIPS Marketing a service-based business relies more on building a relationship than marketing products does. Some relationship building is done with product marketing--particularly branding and name recognition--but it's not as important a part of the overall marketing process for service-based businesses. When services build up trust and reliability with clients, they gain relationships that can continue earning them money for years to come. FOUR FACTORS THAT DISTINGUISH SERVICES MARKETING It's been called "selling the invisible"-delivering intangible services as a core "product" offering. But invisibility, or intangibility, is just one factor that distinguishes services marketing from product marketing. Along with inseparability, variability, and perish ability, these four characteristics affect the way clients behave during the buying process and the way organizations must interact with them. Differences between service marketing and product marketing 11
1. When you are marketing a service, you are really marketing relationship and value. This relationship and value needs to be marketed differently than if you are marketing actual products. 2. Another major difference between marketing services and marketing products is that when a buyer purchases a service, the buyer is purchasing something that is intangible, instead of a tangible product, like a computer or a sprinkler system or a web page. 3. Consumers' concept of a service is often times based on just the reputation of only one single person. Instead of building a reputation based on the quality of a number of different products, a service is built on how well a particular person delivers on a service, such as how well a stock advisor does with your stock portfolio. 4. It is pretty easy to compare the quality of different products. It's easy for you to see if one computer works more quickly than another computer, or if one TV has a better picture than another picture, or if your child can break a toy more easily than another toy. However, it is much more difficult to compare the quality of similar services that are provided. 5. Products are returnable. However, services are not returnable. How to market services Generally speaking, marketing a product requires what are known as the "4 P's": Product, Price, Place, and Promotion. Marketing a service adds three more "P's" to the traditional "4 P's": People, Physical evidence, and Process. Service marketing also includes marketing what is known as the services cape, which is the aesthetics of your business place: the outside of your business building, the inside of your business building, and the way that the employees look.
Q. 4 Discuss the components of marketing mix in marketing planning. You can quote the example of any marketing oriented firm operating in Pakistan in support of your answer. The marketing mix is probably the most famous marketing term. Its elements are the basic, tactical components of a marketing plan. Also known as the Four P's, the marketing mix elements are price, place, product, and promotion. Processes essentially have inputs, throughputs and outputs (or outcomes). Marketing adds value to each of the stages 12
1. PRODUCT. The Product area is concerned with developing the right "product" for the target market. This offering may involve a physical good, a service, or a blend of both. Keep in mind that Product is not limited to "physical good". 2. PLACE. Place is concerned with all the decisions involved in getting the "right" product to the target market's Place. A product isn't much good to a customer if it isn't available when and where it's wanted. A product reaches customers through a channel of distribution. (A channel of distribution is any series of firms - or individuals - from producer to final user or consumer.) 3. PROMOTION. The third P - is concerned with telling the target market about the "right" product. Promotion includes personal selling, mass selling, and sales promotion. It is the marketing manager's job to blend these methods. 4. PRICE. In addition to developing the right Product, Place, and Promotion, marketing managers must also decide the right Price. In setting a price, they must consider the kind of competition in the target market - and the cost of the whole marketing mix. They must also try to estimate customer reaction to possible prices.
HONDA ATLAS MARKETING MIX:
Marketing mix elements or 4p’s strategy of marketing is the essence of any business same like this strategy of marketing mix apply in top listed automobile company overall the world Honda atlas these key elements of marketing mix make the difference between Honda atlas and other Motors Company in this aspect Honda atlas also comes up with a strategy to figure out which strategy is best for them given the objectives and resources. As we know the marketing mix is composed of four key elements to execute or examine for marketing campaigns. Honda atlas has been enhancing their outcomes and marketing value by implementing the right combination of the four P’s. The “Four P’s” of marketing are: product, price, placement, and promotion. PRODUCT: Honda Atlas has competitive edge to its competitors in term of product line. Honda Atlas has been producing wide variety of product. Honda Atlas’ product line is divided by manufacturing of bikes, generators, Water pumps, brush cutters, petrol engines. These all product are in number of series like in bikes series they manufacturing Honda CDI70, Honda CD100, Honda CG125, and Honda Delux125. In bikes segment Honda at No. 1 position. Same as other product line except in car manufacturing. The Honda atlas has also one of the product line in car series is Honda City, MT, AT etc, PRICE: 13
Honda Atlas Brand (Honda City) has become an attraction in the eyes of many auto Pakistani customers. Honda Atlas. Indus Motors Company is very conscious about Price and Quality; they built its reputation not only by producing high quality vehicles also at affordable prices. Toyota Corolla (GLI) current price is Rs. 1,389,000 and Honda City (AT) current Price is Rs. 1,439,000. At this point we can easily understand that the price of Honda city is higher than Toyota Corolla means Honda City is an expensive car more than Toyota Corolla. However, it is Indus Motors Company’s effectiveness in targeting consumers' needs and wants that has pushed them to the top. Honda Atlas is profitability and to consistently increase efficiency in their product line. The traditional pricing strategy of Honda Atlas is formulated into the cost + profit = selling price. The reason behind this strategy is that When Honda Atlas makes changes and improvements, cost of production increases causing the selling prices to go higher. Honda Atlas does not want to cut their targeted return and therefore the costs are passed on to the consumer to maintain their profit margin. PLACE / PHYSICAL DISTRIBUTION: The next important part to comparison is the place or Physical Distribution. It is the way of facilitate customers and make more convenient for customers Honda Atlas applying selling strategy by authorized Dealers. Honda Atlas Network of dealership has expanded and now company has sixteen 3S (Sales, Service and Spare Parts) and thirty 2S (Service and Spare Parts) Pit stops network in all major cities of Pakistan. In Karachi Aspect, Honda Atlas has four Dealers of car market rather, PROMOTION: Indus Motors Company and Honda Atlas (Pakistan) always strive to give outstanding service to valued customers. In addition to providing regular service to customers, companies also regularly conducts Service Campaigns, to facilitate customer's need for service. This has given to customers’ absolute confidence in Toyota Corolla and Honda City cars. Honda also participates in promotion of that product. But as Honda Atlas has a wide Verity of Product line, they rapidly and quickly promote products more than Indus Motors. Promotion of Honda products has been depend on nature of product because Honda Atlas as we know that a wide range and variety of products as we discussed about the series, for example Honda wants to promote its bike product for that company may use Publicity like street banners, showroom display, announcement in newspapers, catalog, broachers, public market display, and many other option may applicable. A customer oriented atmosphere usually results in customers that are more satisfied, do less complaining and are more pleasant to serve. This helps build employee morale, their desire to provide good service and their efficiency. For example, a company like Savor foods is constantly developing new ice cream - the product element is the new product itself, getting the price right involves examining customer perceptions and rival products as well as costs of manufacture, promotion involves engaging in a range of promotional activities e.g. competitions, product tasting etc, and place involves using the best possible channels of distribution .The product is the central point on which marketing energy 14
must focus. Finding out how to make the product, setting up the production line, providing the finance and manufacturing the product are not the responsibility of the marketing function. However, it is concerned with what the product means to the customer. Marketing therefore plays a key role in determining such aspects as:
The appearance of the product - in line with the requirements of the market The function of the product - products must address the needs of customers as identified through market research.
The product range and how it is used is a function of the marketing mix. The range may be broadened or a brand may be extended for tactical reasons, such as matching competition or catering for seasonal fluctuations. Alternatively, a product may be repositioned to make it more acceptable for a new group of consumers as part of a long-term plan.
Q. 5 While conducting a research on “Brand Loyalty towards Automobile” what would you select as your population element, sample size, sampling type and instrument and why?
Brand loyalty, in marketing, consists of a consumer's commitment to repurchase or otherwise continue using the brand and can be demonstrated by repeated buying of a product or service. Brand loyalty is more than simple repurchasing, however. Customers may repurchase a brand due to situational constraints (such as vendor lock-in), a lack of viable alternatives, or out of convenience.] Such loyalty is referred to as "spurious loyalty". True brand loyalty exists when customers have a high relative attitude toward the brand which is then exhibited through repurchase behavior. This type of loyalty can be a great asset to the firm: customers are willing to pay higher prices, they may cost less to serve, and can bring new customers to the firm. For example, if Mohsin has brand loyalty to Company A he will purchase Company A's products even if Company B's are cheaper and/or of a higher quality Common perception about Toyota Corolla and Honda City is that both companies have been fulfilling the perceive value of the customer, the price paid is much reliable against the value, in my research work;
Toyota Corolla and Honda City fulfill the whole of the customer’s need as they want in every of aspect but customer had already mindset about the price of both different Brand that these cars providing luxurious, reliable, and durable Facilities which other Car manufacturer are not much able to provide at competitive price. Toyota Indus and Honda atlas has been producing luxurious car its time where as customer will be aware to the Toyota and Honda Car with reference to those brand, these brands penetrated in customer’s mind so Toyota and Honda has been getting a place in car market.
INTRODUCTION OF THE ORGANIZATION’S BUSINESS SECTOR: Toyota Motors produces an estimated eight million vehicles per year, about a million fewer than the number produced by General Motors (world largest automobile Company) The company dominates its home market, with about 40% of all new cars registered in 2004 being Toyotas. The Indus Motors Company’s Philosophy "Do the right thing for the company, its employees, the customer and the society as a whole." Present Status: IMC on achieving the milestone of over 50,000 vehicle sales in the year 2010 and appreciated the company for increasing its production capacity to meet the demand for its vehicles. Toyota's ongoing commitment and support to IMC for further expanding production facilities and acknowledged the efforts of the Indus Team for continuously improving their skills and their efforts for building quality cars. Indus Motors Company has been impressive 1400 sq meters Training Center, which will provide core trainings as well as multi-skill development. Cumulatively, since inception, over a million men-hours of training had been done by Indus to enhance the capabilities of its team. The sales and production of Indus Motor’s Toyota and Daihatsu brands for the year ended June 30, 2008 were 50,802 units and 48,222 units respectively which is a new record compared to last year’s figures of 50,557 units and 47,821 units respectively. The company’s sales revenue increased to Rs 41 billion, up 6% over Rs. 39 billion; with the after tax profit of Rs 2.3 billion, as compared to Rs 2.7 billion achieved during the year ended June 30, 2007. Earnings per share decreased to Rs 29.15, as compared to Rs. 34.93 in the previous year. Nationwide sales of locally assembled passenger cars and light commercial vehicles (LCV) that had previously grown continuously over the last five years declined by 8% to 187,412 units from 204,212 units sold in 2006-07. Production in the industry also declined to 187,644 units for the period ended June 30, 08, down 5.7% over 198,986 units last year. Although there has been a decrease in the import of used cars from 28,493 units in 2006-07 to 13,145 units in 2007-08, they still continue to impede growth of the auto industry. The Board of Directors appreciated the Company’s performance and declared a final cash dividend of Rs 6.5 per share, making for a total of Rs 10.5 per share during the year. The total dividend paid for the same period last year was Rs 13 per share. LIST OF COMPETITORS: Here is the list of competitors regarding Pakistani environment and my target companies also apart of this competition so these competitors are listed below:
1. 2. 3. 4. 5. 6.
Indus Motors (Toyota) Honda Atlas Pak Suzuki Dewan Motors Nissan Ghandhara Other China Brand Competitors
These are the top listed companies those are the competitors of each others. Most top of the list in competition are Toyota, Honda and Suzuki. These three companies respectively market share in the market some competitive advantages gain by third one company like Pak Suzuki producing 800cc cars, in Pakistan automobile market. IMPLICATION OF TOYOTA MOTORS MARKETING MIX: Indus Motors Company (IMC) as second largest company in Pakistan, we must need to understand the implication of marketing mix because as much as any company gain competitive achievement in market, same direction company has face more difficulty to more grow up business and to maintain sustainability. Toyota Marketing Mix 4 P'S: Indus Motors Company comes up with a strategy to figure out which strategy is best for them given the objectives and resources. They must also consider the strengths and weaknesses of the company as well as opportunities and threats. To enhance the aptitude of the companies, a marketing strategy is introduced. The marketing strategy will create lucrative marketing mixes for defined target markets.
: Product: The Toyota corolla has been achieving success in term of brand since 1970 in Pakistan when the Toyota corolla were not manufactured in Pakistan but at the import basis this brand very tremendously took palace in the Pakistan auto market. The most famous models was Corolla 1976, 1978, 1986 and many list of the yearly series of the models that still consider as powerful and memorable brand. Toyota Corolla assembling, progressive manufacturing and marketing of Toyota vehicles in Pakistan since July 01, 1990. Through the gaining advantage of prepared loyal customers before starting production of Toyota corolla brand in the Pakistan they did not need to much hard struggle to give awareness and make customers because the customers already well known about the product as compare to other companies. Toyota Corolla is well standardize product in the market and its current products are XLI, GLI, 2.OD, and ALTIS Cruisetronic in each of the product they providing features, reliability and upgrading to make more loyal customer and providing more satisfaction to customers . PRICE: Toyota has become an attraction in the eyes of many auto consumers worldwide. Toyota has built its reputation not only by producing high quality vehicles at affordable prices, but the brand and marketing skills they use through tactful pricing strategies. Toyota has differentiated their prices from the traditional pricing set up of many of the other automobile makers. However, it is their effectiveness in targeting consumers' needs and wants that has pushed them to the top. Toyota believes the role of purchasing is through long term and stable production of quality products at the lowest price in a fast and timely manner. The main objective of administering prices within any company in the automobile industry is profitability and to consistently increase efficiency in their product
line. Toyota takes on slightly different approach for pricing strategy with a sale - oriented objective. Although the variables are the same, the formula is adjusted strategically into the selling price - cost = profit. Indus Motors Company believes that its markets and consumers is what determine the selling price. Waste elimination is given top priority which reduces cost and by continuously reducing these types of costs, it will result in persevering the company's profit growth. Physical Distribution/ Place: Place is another important element to keep focus very carefully. Toyota corolla as Well Established and well known in over all world the one factor of that reason is that they apply strategy with authentication and Very genuinely. The Toyota Indus have approximately Twenty Eight dealers in over all Pakistan and Seven Dealers existing in Karachi they Distributed in four dimension namely Eastern Motors, Western Motors, Northern Motors, and Southern Motors and other three Dealers are engaged in different location each Zone partially cover whole of the Karachi. This competitive advantage goes to the Toyota Indus Motors regarding place because in the Pakistan they have largest range of Dealership. It is apart of the marketing strategy which they want to keep close to customers and try to over come the distance between them and customers they also try to make product more conveniently available for customer. Promotion: Promotion is the next most important element of marketing mix without this element marketing mix may never completed not only this the business can affected just because of this arena. Indus Motors Company has been applying promotion strategies in many ways, by ads, Giant Billboards at Bypass and super highway, Sponsors in Games, participation in exhibitions, Display centers, Display in big Public market (as Indus Motors Company did in Pak Tower three year later which they display by new trend that the car was in space that was a unique way of promotion), The Development of top quality logo and photography which can be used in ads, brochures, name cards, etc. Toyota also Taking advantage through advancement of technology in which, they promote via emails, web banners on famous and expensive sites of internet, etc, Participate as a part of Pakistani society in this aspects open institutes, establish Hospitals, social walk and many aspect which Indus motors company contribute shoulder to shoulder in these social activities also give support to Indus Motors to promote its Product. The aim is to make a place in customers’ mind that they are being with them. Indus Motors participate in maximum tools of promotion as some mentioned above because Indus motors believed that provide more and more information to customers to achieve attractiveness.
Brand Loyalty of TOYOTA COROLLA: In the customer perspective I found the conclusion or result that customers are mostly focused on three basic things through they create difference between Toyota Corolla and other Cars. The basic differentiated key elements are Interior, Exterior, and engine Performance of the car. The Toyota Corolla is one of the best selling cars in the world and in Pakistan perspective they are well mind reader of the customers. It gets good gas mileage, has high scores for reliability, and yet is still affordable by most new car buyers. But of course, the Corolla hasn't gotten where it is by sitting on its laurels and the 2009 model is no different. And for the first time, Toyota offers a navigation system as an option on all models. Leather upholstery is an option that is available on the Toyota chain of models.
In terms of driving; the Corolla's handling is solid. The ride is smooth and fairly quiet, even when confronted with dips and bounces. It has a tight turning radius and excellent brake-pedal modulation. That being said, the Corolla isn't intended for avid "driving enthusiasts", although the XRS is a definite step up in performance. The newest Corolla has again been upgraded with more available power, more standard safety features, and fresh styling. For 2009 Corolla offers five trim levels versus the three for the 2008 model year. Base, LE, new XLE, and sporty S models are equipped with a 132-horsepower 1.8-liter 4-cylinder engine, replacing the 126-hp 1.8-liter 4-cylinder. The top-line XRS model gets a 158-horsepower, 2.4-liter 4cylinder. While a manual transmission is standard, the optional automatic transmission is a 4-speed on all the Corollas except the XRS, which gets a 5-speed. The XRS also gets 17-inch wheels and 4-wheel disc brakes. The other models get either 15 or 16-inch wheels and rear drum brakes. Available safety features include anti-lock brakes, an anti-skid system, traction control, front side airbags, and curtain side airbags. TOYOTA COROLLA PERFORMANCE: CHARACTERISTICS, FEATURES AND
EXTERIOR: First element of the customer and Toyota perspective is the exterior in which the shape of the car is most importantly count in customer perspective admiration is a compliment that every eye will carry when it looks up to customer. Be in command of a vehicle that inspires customer to go far ahead of prevalent standards of pride & prestige. The new ALTIS Cruisetronic follows a new ‘Wide & Low’ design concept, with a significantly wider body, wider tread, and a bolder look. The dynamic proportions and the deeply contoured body refine the aerodynamics and overall stability of the car. Innovative press lines and sweep cut pillars bring motion in the car even while it is parked. The sporty front headlamps express assertiveness, and the tail lamps blend in with the bumper conveying balance in design. INTERIOR: Toyota corolla manufacturing has been always very conscious in customer perception as I mentioned above that they always try to capture customer’s perception than convert it into reality one of the factor is the Interior. The desire to challenge convention, stretch our own confines & move ahead of everything that limits us is natural to you. Take the seat that gives you a sense of unrestricted freedom. The interior of the Altis Cruisetronic is based in a new Grege color scheme, which conveys a sense of balance and harmony. Ergonomically designed, the interior promises maximum comfort during travel. Subtle but significant refinements in the Altis Cruisetronic delight you from the moment you enter the car. Illuminated entry, plush leather seats, flat rear floor and electric power steering are to name just a few of these refinements. DATA COLLECTION TOOLS:
There are two sources for the data collection, primary and secondary sources: Primary Source: Primary sources are original works of research or raw data without interpretation or pronouncement that represents an official opinion or position. Primary research is based on interviews conducted and information gathered through questionnaires by various people and analysts.. Secondary Sources: Secondary sources are interpretations of primary data. Secondary research includes information from magazines, internet, encyclopedia, books, newspaper articles, etc. I conducted secondary research from Internet, Journals, magazines, newspaper, etc. DATA PROCESSING AND ANALYSIS The data processing and analysis is the focal point of results which we able to understand about right or wrong, good or bad, like dislike etc. the data processing and analysis tool is very essential to find out the result in good manner I will recommend the tool of SPSS 17.0 this tool will help me in analysis data that I have been gathering from the different sources then put them in the computer system program and then by computerized process it will provide me results for my research and it is enough for my research which I have need to go through processes. The data gathered through the primary and secondary sources will be analyzed by qualitative methods.. The other mathematical tools like graphs, bar diagrams, pie charts and line diagrams will also be used for the deep and comprehensive analysis of the data.
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