FINAL PROJECTMARKETING STRATEGY

AND COMPETITIVE POSITIONING

METALHEADS

Honda’s Car Protection Facility

MARKETING PLAN

By: Sadiq 110034

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ACKNOWLEDGEMENT

I thank the Almighty for giving me the strength and vision to complete this report on time and

hopefully error free. I dedicate this work to my Friends, who have always been inspiring figures

in my life.

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EXECUTIVE SUMMARY

MetalHeads (Honda’s car protection facility) is a subsidiary of Honda that provides armored

services in Pakistan. Initially the company will serve customers owning Honda Accord and

Honda Civic. As the company mature with time it will offer the services to a broad range of

models. The services provided at MetalHeads are of high quality, providing the customer’s safe,

secure and comfortable journey by building a fort around their car i.e. by making their cars bullet

proofed.

The armored industry has not yet been introduced in Pakistan. People import armored vehicle

from international markets and pay huge sums of money. There is a high demand for armored

vehicles due to the growing terrorism and personal rivalries among the elite and upper social

classes. As there are no other companies offering these services in Pakistan, hence, there will be

no competition for MetalHeads in Pakistan. Due to this monopoly high profit margins can be

charged.

The vision of the company is to expand its workshop facilities to 22 major cities in Pakistan,

establish a research and development department which will search and develop new composite

materials which would be lighter in weight and more economical. MetalHeads also aims to

manufacture its own raw material required for the armoring vehicles.

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Table of Contents:

Acknowledgements........................................................................................................................................4

Executive Summary.......................................................................................................................................5..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5

Company Summary........................................................................................................................................7

Services..........................................................................................................................................................8..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5

Objectives.......................................................................................................................................................9..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5

Mission...........................................................................................................................................................9..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5

Keys to Success..............................................................................................................................................9..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5

Market Summary Analysis...........................................................................................................................10..........................................................................................................................................................................

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SWOT..........................................................................................................................................................11..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5

PEST............................................................................................................................................................12..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5

Market Segmentation...................................................................................................................................13..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5

Target Market Segmentation........................................................................................................................13..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5

Competitive Edge.........................................................................................................................................13..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5

Marketing Strategy.......................................................................................................................................14..........................................................................................................................................................................

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Sales Strategy...............................................................................................................................................14..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5

Sales Forecast.........................................................................................................................................15-16..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5

Management Summary................................................................................................................................17..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5

Personnel Summary.....................................................................................................................................17....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5

Budgeting.....................................................................................................................................................18..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5

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References....................................................................................................................................................19..........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5

COMPANY SUMMARY

What we want to offer is something which would satisfy the second level of need for those who

are seeking safety in the current unsafe environment around us. It is merely impossible to have

an upper need satisfied without the satisfaction of lower level of needs. Safety, it is something

which every individual looks forward to; no matter the class or the income level, it is human

tendency to work hard to achieve a secured environment around him. He tries to protect himself

along with his love ones to the extreme of his capacities. MetalHeads would provide complete

service of bullet proofing of selected vehicles to a B6 ballistic protection.

At the start of the firm these services are restricted to certain models but as the company grows

the services would be applicable to more models. Currently, there is a huge market for this

business since there is no firm providing such services in Pakistan. There are many business

people and executives who demand such services constantly for their big fleet of vehicles.

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MetalHeads has a future vision of making these services affordable. MetalHeads would dedicate

its resources for research and development department to seek for new technology of composite

material. The Vision is also to have 180 degree vertical integration to be self-sufficient in all the

raw material required and with R&D advance the technology to make it more efficient and

effective.

COMPANY OWNERSHIP

MetalHeads would be a privately owned limited liability company working as a subsidiary of

Honda. The company would be administrated and owned by Honda and profits would be shared

equally among the partners and shareholders in terms of dividends.

SERVICES

MetalHeads would provide armoring vehicle service according to the international protection

criteria. MetalHeads workshop facility would be established near Tarnol on Fateh Jang road. The

protection service would be a complete transformation to ballistic proof vehicle. At the initial

stage MetalHeads would provide the services to only two selected vehicles. The two models of

vehicle include Honda Accord and Honda Civic. The complete armoring services include the

following tasks which would be provided by MetalHeads as a complete Package.

1. Engine bay protection including battery, radiator and reengineered air scoop.

2. Interior floor bomb blast protection and ballistic armored walls.

3. Bullet proof and ballistic windows.

4. Reinforced door hinges and alignment supports.

5. Run-flat wheel inserts to keep vehicle moving under attack.

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6. Complete ballistic armored firewall which provides maximum protection for vehicle

occupants.

7. Large ballistic armored firewall which provide maximum protection during assault.

Overlaps upholstered to match vehicle interior.

8. Suspension system reinforcement necessary to compensate for the additional weight.

MetalHeads would take 30 days to complete the services.

MetalHeads would follow the following plan for the specified 30 days to render the complete

armoring service:

• Striping of the interior of each car would take four days.

• Chassis analysis and kit assembly would take eight days.

• Fitting of kit inside the car would take five days.

• Fitting of the car interior would be completed in four days.

• Shocks and tires would be installed in one day.

• Testing of the car which includes waterproofing, checking the weight instability due

to ballistic steel plates and welding tested through Ultraviolet light will complete in

two days.

• Adjustments to the car’s weight would be done in a two days time period.

OBJECTIVES

1. MetalHeads aims to provide high quality armoring services to its customers and to

maintain long term profitable relationship.

2. MetalHeads looks forward to constantly grow the sales with time and maintain direct and

indirect costs.

3. After three years MetalHeads would offer armored service which would be applicable to

many vehicles.

MISSION

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Always striving to fulfill our clients and employees needs through clear communication,

teamwork and integrity, with the desire to provide superior quality, technologically advanced

protection and safety services.

KEYS TO SUCCESS

Keys to success for the company will include:

1. Maintaining a reputable and untarnished reputation in the community.

2. Quality care.

3. Competitive pricing.

4. After sales services.

5. Technologically advanced methods.

6. Skilled workforce.

MARKET ANALYSIS SUMMARY

Armored car service is a business that has become a necessity for those who belong to the upper

and upper middle social class. In Pakistan due to the high terrorism rate the selected market

segment is becoming more prone towards uncertain situations and has created a demand for

armored cars. The selected segment includes the rich people who are willing to pay a lot for their

security. There is no other firm which is providing these services in Pakistan the people who

demand these services have no option other than to import armored vehicles which costs them

220 to 250 percent more than what MetalHeads has forecasted. This would create a lot demand

for our services. We did a survey in HIT (heavy industries Taxila) as they are providing

armoring services to only the Government. The managing Director of HIT mentioned that

currently they are only armoring government vehicles and that there are many armed forces

vehicles listed in the waiting list of HIT to get bullet proofed. They do not entertain civilians

hence the businessmen, civilians, foreigners living in Pakistan and others have to import bullet

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proof cars from Dubai and other countries around the world which costs them more then what we

are offering here at MetalHeads.

As there is no other company in Pakistan providing such services so MetalHeads would have a

monopoly and no competition in Pakistan. This will increase the growth and profit margins of

MetalHeads and allow it to achieve maximum forecasted sales in the coming years.

SWOT ANALYSIS

The SWOT analysis of MetalHeads is discussed below:

Strengths

Honda is a reliable and well established brand name in Pakistan.

First company in Pakistan to offer armoring services.

Offered services are highly cost effective for customers.

Low bargaining power of customers.

Weaknesses

Lack of trust due to no previous experience.

No brand loyalty.

High dependency on suppliers.

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Opportunities

High demand rate.

Cheap skilled labor availability.

High growth in terrorism rate.

Threats

Government regulation.

High bargaining power of suppliers.

HIT may start civil vehicle armoring.

PEST ANALYSIS

Political Situation

• Political situation in Pakistan currently is uncertain. Such projects might face retaliation

from government institutions e.g. Heavy Industries Taxila is backed by the government

and that might serve as barrier for MetalHeads to easily break into the armoring services,

as these services are being provided by HIT but on limited basis.

Economic Situation

• Economic condition of Pakistan faces many difficulties. High dependency on foreign aid

and weak industrial output has brought the Pakistan’s rupee worth down drastically.

Commodity prices are therefore rising on daily basis and imports are imposed with heavy

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taxes. In this situation MetalHeads will have to find out ways to acquire raw material

from within the country to cut extra costs on imports.

Social Situation

• Investment in car armoring services should not be facing any hurdles from the country’s

social classes. But it could create inferiority complex among the classes who would not

be able to afford such expensive services. Secondly, it might raise issues related to the

environment and therefore environmentalists might take some action. MetalHeads will

have to portray itself as a company which provides protection, not just to the elite of the

country but in fact it is working to minimize the costs of such services (through R&D) so

that majority of the people could take afford such services.

Technological Situation

• Pakistan lacks proper infrastructure for such services to be fully operational. A lot of

training for the professionals would be necessary to work on such a project.

MARKET SEGMENTATION

On the basis of demographical, geographical, psychographic and behavioral factors we have

segmented our market into following segments:

There are no geographical boundaries to our segmentation but initially we will be focusing on

Pakistan only.

Area: Pakistan

Occupation: Businessmen, politicians, armed forces personals.

Life style: Landlords, VIP’s

Social class: Upper middle, upper and elite.

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TARGET MARKET SEGMENT STRATEGY

The target market for MetalHeads is all those who want to travel by road safe and secure and

those who are willing and able to get their cars bullet proofed. For the first three years the target

market is restricted to those who want to buy the services for Honda Accord and Honda Civic.

The target market chunk would be increased after three years when MetalHeads would offer the

services which would be applicable to many other models.

COMPETITIVE EDGE

In a myopic view MetalHeads is a monopoly for Pakistan. But in the broader vision the

completion lies with the international market. The primary competitive edge that MetalHeads has

is its affordable prices further more since it is established in Pakistan it would provide complete

after sales services for the targeted customers. MetalHeads will also provide life time warranty

for its services.

MARKETING STRATEGY

In order to market our services we will send brochures to the government offices, armed forces

and other political figures. We will also advertise in “Pakistan and gulf Economist” and other

business magazines to communicate our unique services to our target market. We will also use

direct marketing through our contacts and word-of-mouth marketing.

SALES STRATEGY

MetalHeads would sell their services by using the direct sale approach. The owners of the

company would personally contact all the customers in the target market to achieve the

forecasted sales. The heads would also use their personal contacts to communicate the

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advantages to create awareness among the customers. Furthermore a selling department would

provide all the necessary information in the market and create long term profitable relationship

with the existing customers and attract new ones to achieve long term sales growth.

SALES FORECAST

Direct unit costs reflect direct costs in producing the items but do not including labor and other

expenses for providing the service. The direct unit cost (only raw material) which will be

incurred by MetalHeads for the two initially selected models is as below.

1. Honda Accord

Sr. No Part description Unit Price Quantity Total Price

1 Armox 500 B6 Armored steel

plates ( size 5x2 meter )

Rs. 350,100 4 Rs. 1,400,400

2 Armass B6 bullet proof glass - Complete set Rs. 1,100,000

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3 Bilstein heavy duty Shocks Rs. 17,500 4 Rs. 70,000

4 Firestone Run flat tires Rs. 15,000 4 Rs. 60,000

5 Firestone Run flat inserts Rs. 7,000 4 Rs. 28,000

Rs. 2,65,8400

Table: 1

2. Honda Civic

Sr. No Part description Unit Price Quantity Total Price

1 Armox 500 B6 Armored steel

plates ( size 5x2 meter )

Rs. 220,100 4 Rs. 880,400

2 Armass B6 bullet proof glass - Complete set Rs. 800,000

3 Bilstein heavy duty Shocks Rs. 14,000 4 Rs. 56,000

4 Firestone Run flat tires Rs. 15,000 4 Rs. 60,000

5 Firestone Run flat inserts Rs. 7,000 4 Rs. 28,000

Rs. 1,824,400

Table: 2

Sales ForecastUnit Sales Year 1 Year 2 Year 3Honda Accord 35 37 40Honda Civic 18 21 23Total Unit Sales 53 68 63Unit Prices Year 1 Year 2 Year 3Honda Accord Rs. 2,658,400 Rs. 2,658,400 Rs. 2,658,400Honda Civic Rs. 1,824,400 Rs. 1,824,400 Rs. 1,824,400Sales Year 1 Year 2 Year 3Honda Accord Rs. 93,044,000 Rs. 98,360,800 Rs. 106,336,000

Honda Civic Rs. 32,839,200 Rs. 38,312,400 Rs. 41,961,200Total Sales Rs. 1,258,832,00 Rs. 1,366,732,00 Rs. 14,829,7200

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Direct Unit Costs Year 1 Year 2 Year 3Honda Accord Rs. 2,000,000 Rs. 2,000,000 Rs. 2,000,000Honda Civic Rs. 1,000,000 Rs. 1,000,000 Rs. 1,000,000Direct Cost of Sales Year 1 Year 2 Year 3Honda Accord Rs.70,000,000 Rs.74,000,000 Rs.80,000,000Honda Civic Rs. 1,800,000 Rs. 2,100,000 Rs. 2,300,000Subtotal Direct Cost of Sales

Rs. 71,800,000 Rs. 76,100,000 Rs. 82,300,000

Table: 3

Year 1 Year 2 Year 30

20,000,00040,000,00060,000,00080,000,000

100,000,000120,000,000140,000,000160,000,000

Honda CivicHonda Accord

Graph: 1 ‘Sale by Yea

MANAGEMENT SUMMARY

MetalHeads would be comprised of 20 employees out of which five would be responsible for the

complete management of the company. Four managers who are also the owner's of the company

would dedicate their 50 percent of time to the administrative matters and in the future it would be

reduced after forming a complete Administrative department. The last manager would be the

manager of sales department with team of three employees working under the sales manager.

Most of the sales would be through personal selling and the sales manager would be responsible

for making the forecasted sales. Other employees include two automobile fitters, five welders,

two mechanics and one electrician all these employees would be professional technicians; they

are responsible for converting an ordinary vehicle into armored protected vehicle and these

employees would be supervised in detail by two Techtronic Engineers.

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PERSONNEL PLAN

For the first year all of the operations and administrative issues would be handled by the owners

of the company. All the experience acquired in the first year would be recorded and with the help

of all those experiences an administration department would be established in the 2nd year with

proper job descriptions. After establishing the administration department the administrative

burden would decrease from the owners and will allow them to focus on creating sales for the

company.

The production employees would be supervised and closely monitored by two supervisors to

ensure the quality of the services. All the employees and the owners of the company would work

for 48 hours a week.

BUDGETING

Start-up Funding Start-up Expenses to Fund Rs. 390,000 Start-up Assets to Fund Rs. 17,640,000 Total Funding Required Rs. 18,030,000 Assets Non-cash Assets from Start-up Rs. 20,640,000 Cash Requirements from Start-up Rs. 2,000,000 Additional Cash Raised Rs. 1,970,000 Cash Balance on Starting Date Rs. 3,970,000 Total Assets Rs. 24,610,000 Liabilities and Capital Liabilities

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Current Borrowing Rs. 0 Long-term Liabilities Rs. 0 Other Current Liabilities (interest-free) Rs. 0 Total Liabilities Rs. 0 Capital Planned Investment Owners (Honda) Rs. 20,000,000 Investor Rs. 0 Additional Investment Requirement Rs. 0 Total Planned Investment Rs. 20,000,000

Loss at Start-up (Start-up Expenses) (Rs. 390,000) Total Capital Rs. 19,610,000 Total Capital and Liabilities Rs. 19,610,000 Total Funding Rs. 20,000,000

REFERENCES

High Protection Company 2011, USA, Build your own armored car, viewed 12 April 2011,

< http://www.highprotectioncompany.com/>

Honda Motors 2011, Pakistan, viewed on 12 April 2011,

<http://www.honda.com.pk/>

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