Escolar Documentos
Profissional Documentos
Cultura Documentos
This document discusses the marketing strategies for Ashok Leyland and its foray into small car
segement
Ashok Leyland is launching a new car with the name of ”Leyland next” and this document provide an
efficient and workable marketing plan for the product.
In India automobile industry is growing at a rapid pace. The demand for cars in India over time has
increased a lot due to growth of economy and stability of people economic condition. This has
attracted a number of producers towards the market. Leyland along with other producers like Toyota,
Suzuki and Honda etc. is a player in the automobile market.
Now Leyland has planned to launch a new car with significant innovations. For the success of the car
in industry a deep study and research has been undertaken to develop an effective and efficient plan.
Some of the important areas covered in this document while developing a Marketing Plan for the
selected company are:
• Marketing objectives
• Promotions strategies
• Pricing strategies
• Product strategies
• Distribution strategies.
Furthermore, action plan lays out successful implementation through monitoring has also been
included.
TABLE OF CONTENTS
Executive summary
Executive Summary..............................................................1
Table of Contents.................................................................2
3.1.1. Consumers..............................................................................................7
3.1.2. Competitors............................................................................................7
3.1.3. Intermediaries.........................................................................................7
3.1.4. Publics.....................................................................................................8
3.2.1.1. Education..........................................................................................8
3.2.1.2. Population........................................................................................8
4.6.1. Strengths..............................................................................................11
4.6.2. Weaknesses..........................................................................................11
4.6.3. Opportunities........................................................................................11
4.6.4. Threats..................................................................................................12
6.1 Pricing..........................................................................................................14
6.2 Promotion.....................................................................................................14
6.3 Distribution...................................................................................................14
9.1.1 Packaging...............................................................................................17
9.1.2 LabelLing................................................................................................17
9.4.2 Advertising.............................................................................................20
11.0 Budget........................................................................22
11.2.3 Sponsorships........................................................................................23
KBC.....................................................................................................................24
MUST CARS.........................................................................................................24
CAR MAX............................................................................................................24
Consumer Questionnaire.....................................................25
QUESTIONNAIRE ANALYSIS.................................................................................28
Analysis Summary..............................................................................................32
12.0 Bibliography................................................................33
Globalization of automotive industry accelerated exponentially after the 1980’s. This was due to the
construction of important overseas facilities and mergers alongside with improved production
techniques adopted by Japanese in the 1970’s.
By 2005, the industry’s global output touched 64.6 million vehicles. The auto market today is one of
the largest segments in world trade. Today the annual automotive exports have reached a level of $600
billion which accounts for 10% of the worlds export.
With increase awareness in consumers about potential hazards, automobile industries are in constant
competition with each other to produce a better vehicle for the right consumer. It is estimated that the
car industry will continue to prosper to increasing trends as national economies and population
increases. Mobility 2030, of the World Business Council for Sustainable Development, reported that
per capita mobility of china, Latin America, Russia and rest of Europe would double by 2030 to 5000-
14000 km per year. This will contribute to the automotive industry a big deal.
2
1.2. AUTOMOBILE INDUSTRY OVERVIEW OF INDIA
In India automobile industry is growing at a rapid pace. There have been huge demand for cars in India
over time but in the last few years due to improvement in economy of India this demand has increased
tremendously. Total number of automobiles in use today in India is 5 million. About two-third of the
market demand is being met currently by local production and imports from other countries and one-
third is left unmet.
So there is a huge gap in market demand and supply which is still there to be met. Major producers
currently in the market are Toyota, Suzuki, Leyland, Honda, Mitsubishi, Hyundai.
2
The government is also supporting the investors to invest in India this has attracted more producers of
cars to come in India and grasp market share from India automobile market.
2.1. INTRODUCTION 3
Leyland Motor Co. is one of the major heavy vehicles manufacturers in the world. Leyland Motor Co.
is in automobile industry for over 70 years. Leyland has spread out its manufacturing over all major
countries and territories of the world.
In India Leyland is operating with local brand name of Ashok Leyland Limited. In India Leyland’s net
sales for year ending 30th June 2006 were about Rs. 4 billion.
The significance of this is that Leyland aims to participate in the development and progress of society
through its business activities worldwide. This is only achieved through set of objectives that needs to
be focused and better implemented through effectiveness and efficiency.
5
3.0. LEYLAND NEXT: MARKETING ENVIRONMENT
3.1.1. CONSUMERS
Consumers are the main target which needs to be understood and satisfied in the market. Their
purchasing behavior will most likely be an impact affecting an organization in several unprecedented
ways. It is important to understand their mindset patterns of purchasing a family car, the basic pattern
includes affordability, fuel efficiency, safety and comfort giving the consumer a mood of acceptance
and appreciation. The main focus of the Leyland will be the low level car owners and low income
consumers. It will also target product to bike owners as they are very unsafe.
3.1.2. COMPETITORS
With strong economic growth and government relaxation on taxes, several companies are emerging to
establish their market position. Leyland next stands a good chance of competing with existing
competitors as it has a built reputation in the market due to its better sevices and best of the products in
heavy weight vehicles. Leyland will position the new product with features such attractive look-n-feel.
Direct - competitors are Toyota and Suzuki which have substantial market share.
3.1.3. INTERMEDIARIES
Leyland will adopt both distribution channels, direct and indirect. Intermediaries (i.e authorized dealers
of Leyland) are important, since indirect distribution of its product is carried out through them. This
will help to further enhance the reach-ability of the car.
3.1.4. PUBLICS
Publics are the general public who are involved in the reputation of Leyland and its products. Leyland
has to provide several strategic approaches in order to stand out with the public opinions. Any critics
against Leyland would impact the sales and repute. With such diverse culture, consumers are highly
deterred with public opinions. This very thin line, the public offers, can effect production, distribution
and diversification of Leyland. Leyland will have to stand out in their primary objective and not loose
that position.
3.2. MACRO ENVIRONMENT
3.2.1. DEMOGRAPHIC ENVIRONMENT
3.2.1.1. Education
The literacy rate of the country is increasing and as a result it has increased the consciousness in people
about safety and quality of travel. People are now more sensitive about how safe and comfortable is the
automobile they are using. With the increased awareness in people they have now shifted towards the
automobiles which are according to safety standards and give more comfortable travel. This shift is
also helping Leyland Motor Co.’s business as people are moving towards it.
3.2.1.2. Population
Population of India is increasing at rapid pace and has touched the figures of 120 crores . This increase
in population has also increased the number of buyers and expanded the market of automobiles.
Requirement of more automobiles has grown. Automobile industry has also responded to this scenario.
But there is still a huge gap between people demand and supply of cars. Leyland focuses on this gap
and is trying to avail this opportunity to its best.
• The Actual Product is “Leyland next” car which is a new launch of Leyland. It provides its users
with an affordable choice to buy and ensures a safe and comfortable travel.
• The Augmented Product is the added features this car provides to its buyers. Major add-on
features Leyland next provides to its buyers are :
4.6.2. WEAKNESSES
Following are some of the weaknesses of the Product and company:
4.6.3. OPPORTUNITIES
Following are some of the opportunities which Leyland can avail in future to increase its market share:
• Increased population/consumption
6.1 PRICING
As making cars more affordable is the major objective of launching this car therefore the prices of this
car are kept lower than that of all the current competitors in the market. This will help grasping larger
market share and compete well in market.
6.2 PROMOTION
Major competitors of “Leyland next” like Toyota and Suzuki and Maruti, are spending huge revenue
on promotion of their brand and products. Leyland will also make extensive effort and heavy
investment on creating awareness about “Leyland next” in market. Promotion of “Leyland next” will
be done at nation wide scale as Leyland aims at targeting all major areas of country.
6.3 DISTRIBUTION
Leyland has currently distribution setup in the major divisional headquarters only but the competitors
specially; Toyota and Suzuki has a wider network. There presence in more areas than Leyland is
giving tough competition to Leyland. For Leyland next , Ashok Leyland Limited will come up with a
new strategy of distribution to reach all those areas where there they are not currently present.
For “Leyland next” we’ll define performance parameters and baseline in light of Leyland’s vision to
achieve customer satisfaction. Also the growth of automobile industry in India and increase in demand
of automobiles is kept under consideration.
• Target middle class and low earning income class specially by providing them an affordable
option.
• Create awareness among target audience. Use excessive advertising especially using media
preferred by the target market.
• Use unique features like good design, low prices and comfortable environment to create attraction
towards product.
Leyland is launching “Leyland next” at this particular time because of boom in the automobile
industry in India. The demand of cars for private usage is increasing a great deal but there are a
few car production companies currently in the market. Leyland feels that there is a very good
opportunity to jump into the market at this time with a quality product and grasp a major share in
market.
9.1.1 PACKAGING
Leyland next will be built on one standard size. It will be available in both color types i.e. Metallic and
Non-Metallic. The color range will be 5 major colors red, white, black, blue and green with capacity to
increase other colors on demand. The design of the car will be smooth and catchy.
Imp. Recommendations
• The shape of the car should be kept different from the shape of competitor’s products.
• The design of the car is recommended to be kept innovative and unique in order to attract
customers.
9.1.2 LABELLING
The Label of car presents only basic information about the car i.e. brand name and car name.
Imp. Recommendations
The name of the car proposed is “Leyland next”. The name represents innovation and movement ahead
as is the plan to move the car ahead of its competitors in aspects like Affordability, comfort, design and
safety. The label of the car should be innovative and attractive. The fonts used should be decent and
attractive. Only precise text should be presented.
9.1.3 PRODUCT LINE
Leyland next will be available in two major types of cars:
2. Leyland next AC
Imp. Recommendations
It is recommended both products should be launched simultaneously with major production and share
to CNG car as demand of CNG is much more than that of simple car. After three months time a survey
should be conducted to judge customer’s response to the car.
Imp. Recommendations
The price of the car should be kept lesser than the competitors as Leyland next’s major objective is
providing economical car to users. Also the target market of the car is Middle and low income class so
it should be kept in their affordability. This is accomplished by reducing the overhead costs like OWN
payment etc. by developing efficient distribution mechanism.
Recommendations
Leyland next will adopt both distribution channels for distribution of car.
Use of Direct Channel: Leyland has its showrooms in major divisional headquarters; at these stations
Leyland next will use its direct distribution channel. Also it is recommended to increase the direct
distribution coverage area by setting up showrooms in more areas to have better control over
distribution.
Use of In-direct Channel: In those areas where Leyland doesn’t have its showrooms it will use its
chain of authorized dealers to sell out its cars in these areas.
Recommendations
• Leyland can use electronic and print media to advertise about its car.
• Leyland can advertise on billboards, flex signs, bus boards, telemarketing etc.
• Special advertisement campaigns can be launched e.g. seminars, road shows publications etc. to
create awareness about Leyland next.
• Leyland will sponsor special events like concerts etc. to introduce the car to public.
9.4.2 ADVERTISING
To advertise the product better and create awareness about product; Leyland will use different
advertisement methods to approach the consumers. The diversity of advertisement channels will help
in reaching the masses of different mindsets.
• leyland will use print and electronic media to introduce the product to consumers.
The goal of the marketing plan is to outline the strategies, tactics, and programs that will make the
sales goals outlined in the Leyland next business plan a reality by the end of the season.
The monthly and the annual revenue generation, then the amount of expenses incurred in a month or
in a year, then the increased level of customer satisfaction and ensuring the brand loyalty..
For complying with these scenarios the advertising efforts made by the company, strength of the
distribution channels, launch of the new products and the pricing will be measured. The possible
increase in growth of the target market also depends all these efforts made by Leyland next.
The people who are responsible for the monitoring and control of the marketing plan involves, the
Marketing Executives, Sales Managers, Media Managers, Market Research Departments, and the
Production Managers.
Some activities must be carried out for precisely and closely evaluating the effectiveness of the
strategies and tactics for example the gathering and structuring of data regarding market, product,
consumers and the pricing trends, then the generation of daily sales report should be maintained and
then in the end continuous reconfirming of the marketing budget and activities by the managers of
different divisions.
11.0 BUDGET
As Leyland has a tough competition with some big names like Suzuki and Toyota so there is need of
strong financial support to all marketing activities. Leyland has allocated initially Rs. 30 millions for
the marketing of Leyland next.
This amount will be further sub-allocated to different areas. Rs. 15 millions has been allocated to the
budget of initial cost for the marketing analysis and all activities of advertising and promotion during
first quarter of the year. For the continuity of the promotional and advertisement activities Rs. 15
millions has been sub-allocated for each quarter over the years as Rs. 5 million per quarter.
• These allocations of finances can be altered with respect to the future requirements
The further subdivision of this cost is given below in table 1.3 in Appendix B.
11.2.3 SPONSORSHIPS
Leyland will sponsor different events like concerts, seminars and other social activities etc. to promote
the car in masses and attract people. This sponsorship of a chain of activities over time will cost about
to Rs. 2 million
CAR DEALERS SURVEY SUMMARY
KBC
Maruti Suzuki and hyundai are enjoying the most market share in India with about 55% and 35%
jointly respectively. Maruti is successful due to its local production and economical cars but they have
major problem of sustainability and designs of their cars. Hyundai is enjoying good market share
because of good quality and extensive production. If Leyland is launching new car and want to grasp
market share then it has to focus on designs of cars and also provide more affordable option to buyers.
Also Hyundai and Maruti do good marketing and to beat them Leyland must develop efficient
marketing strategy.
MUST CARS
Due to increase in economic activity in the country, demand of automobiles especially cars for private
use have increased hugely. Currently Maruti is enjoying the major share in the market due its
affordable cars, availability of spare parts and good marketing. Maruti is dominating the market but
there are a lot of problems which are being faced by users. Especially the week areas are design and
safety standards. If Leyland wants to compete with Maruti in the market and break into its dominance
it should provide buyers with highly excellent designs of cars and also cars which are safe and
comfortable to travel.
CAR MAX
The most important parameters while buying cars a buyer looks for are its Price, Safety standards,
Design of car and how much comfortable the vehicle is. Currently some of the cars implemented the
design, safety, comfort standards are very expensive and huge market share goes to those cars which
are less standardized but are cheap. Leyland can stand in market and be successful if it make an ideal
combination of Affordability, design, safety, comfort and make a better and cheap product for buyers.
Currently less quality cars of Maruti are enjoying bulk of market share due to lack of better options
available in market. Leyland is currently not so much successful in Indiai market but they can improve
their position by focusing at this area and developing effective marketing strategy to break the
influence of Maruti and Hyundai.
CONSUMER QUESTIONNAIRE
a. 800 cc
b. 1000 cc
c. 1200 cc or more
a. Satisfied
b. Not - Satisfied
c. Neutral
How much are you willing to pay for 1000 cc. Cars?
If one of the companies plans to launch a new car of great design, safety, comfort and affordable
which one you will prefer?
a. Toyota
b. Maruti
c. Leyland
d. Local companies
Gender
60
50
%age
40
30
20
10
0
Male Female
Gender Type
Income
70
60
50
40
%age
30
20
10
0
Below 50000 A bov e 50000
Incom e group
Age Group
45
40
35
30
25
%age
20
15
10
5
0
18-25 25-40 40-60 Above 60
Age Grouping
Are you satisfied with safety of cars
already in Market?
80
70
60
50
%age
40
30
20
10
0
Yes No
50
40
%age
30
20
10
0
Price Safety Comfort Design Other
What power of car do you prefer?
60
50
40
%age
30
20
10
0
800 cc 1000 cc 1200 cc or more
70
60
50
40
%age
30
20
10
0
Non-Metallic Metallic
50
40
%age
30
20
10
0
Satisfied Not-Satisfied Neutral
How much are you willing to pay for
1000 cc Car?
90
80
70
60
50
%age
40
30
20
10
0
3,00,000 - 4,50,000 4,50,000 or more
15
10
5
0
Toyota Suzuki Nissan Local Other
Companies
25
20
15
10
5
0
TV ad Magazine Word of Billboards Other
Mouth
ANALYSIS SUMMARY
According to survey people with an income bracket less than Rs. 50,000 per month prefers buying
small cars for their private use. A large percentage of people prefer buying their own cars then to use
public transport but most of them are not satisfied with the safety standards of the cars in the market.
According to survey the most important considerations by a buyer of car are price, safety, comfort and
design with price having major influence. About 65% of the people surveyed were of age group 25 to
60 who are the major buyers.
Most of the buyers are not satisfied with the prices of the cars and are willing to buy 1000 cc. cars for
Rs. 3,00,000 to Rs. 4,50,000 but most of the cars in the market get more out of them as they are
expensive. They consider Maruti and Hyundai successful in launching a car. People seem to be more
highly influenced by the TV ads and billboards.
12.0 BIBLIOGRAPHY
SAMUEL, B. (2003). Marketing for Beginners . Pearson Education . 2nd Edition. Boston.
ALBERTO, J. (2005). Strategy Moves . Pearson Education . 1st Edition. New York.