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8/2/2019 Final Mm Report
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ADAM-REVOX RELAUNCH REPORT 2011
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Marketing Relaunch Plan for:
ADAM-REVOX
Prepared by:
Saad Qamar Bhatti (12025)
Amar Lal (11779)
Syed Hakkas (9062)
Naveed Saleem (9184)
Date:
22nd
Dec 2011
IQRA UNIVERSITY IU
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Executive Summary.3
Company description..4
Mission/vision5
Goals6
Reasons of failure7
Swot analysis..9
Industry analysis.10
Competitive analysis10
Market product focus.11
Pod.11
Repositioning..12
Marketing program..12
Media strategies and tactics..13
Schedule14
Advertising.14
Launch budget..15
Pricing ..18
Manufacturing and operations.19
Risk analysis..20
Mitigation plan.21
Summary of pre and post launch activities22
Problems to be solves..23
Key benefits.23
Advertising budget.24
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Executive Summary:
Adam Motor Company has launched the Revox for Pakistani people, which is the cheapest
car in the Pakistan, and we also led to the other manufacturers to start production by
providing helpful plans for the cheap cars production. Companies like Toyota, Honda and
Suzuki are also interested in the production of the cheap cars, and they had tried to invest a
huge amount in Pakistan to make a new small, low cost car but they fail because of high
import tax rate. The growing competition, which has developed because of the large used
Japanese car market. This has enforced car suppliers to lower their prices and try to enlarge
cheaper cars that can compete with the low cost second hand vehicles. There areenvironmentally led legislations, which is forcing the size and shape of cars to change, the
demand and need of the customers are also the one of the reason behind this.
Motivation Behind the Scene:
Revox is a result of very hard work. We believe that it is going to fundamentally change the
way of Pakistani automobile sector.
REVOX is not just about low-cost, but it also serves the need of urban peoples.
The Adam Motor realized that for a poor country like Pakistan, there was a need of an ultra
low-cost product and they offered it by leveraging the power of technology.
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Company Description:
Company description is divided into two parts its previous situation and new descriptionafter relaunch predefined.
Previous situation:
Adam Revo is the project of Adamjee group of companies who also have many other
companies like Adamjee Insurance, Adamjee chemicals and Adamjee educational institutes.
Adam Revo considered being lowest cost car ever launched in Pakistan. With cost reducingstrategies it was Pakistans first car that was small in size and failed because of its low
quality equipment used in it.
Relaunch situation:
Now Revo is renamed at relaunch, its new name is Revox. Company is the same with changein strategies. Adamjee group of companies bring this project again in market after 6 years
with new financial budget of its own. They invested money for relaunch from its many other
businesses to bring the economical car to success and to make the life of people easy to
survive in this inflation time in the country.
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Mission/Vision:
Our mission is to offer quality cars, accessories and services at affordable prices that
our customers can easily manage to afforded and so that our customers receive the best value
for their money, and to be a customer service leader in the automobile industry by
establishing a loyal customer base through having customer-focused employees who
knowledge, and provide fast and efficient service. And our Vision is to exceed the
expectations of our customers by never allow them to be unsatisfied. And last but not the
least to maximize sales and profit and deliver sustainable growth year after year.
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Goals:
Non-financial Goals:
Our companys non-financial or strategic goals are, to compete with our competitors
(Suzuki, Mehran) with appropriate ratio and to capture an optimum level of market share.
Our primary goal would be to win the hearts of our customers by offering quality products.
Our goal is to provide maximum value to our customers which will be very beneficial for our
company/showrooms.
Financial Goals:
Our financial goals are to make profits by reducing cost of car and selling more cars in the
market in cheaper rates with respect to our competitor price and we will assure about the
good quality of cars in relaunch of REVOX. We would want to increase our sales to 20% a
year which will be our major financial goal. We will use advanced computer systems to
minimize our financial management costs. This will have a positive impact our profit.
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Reasons of Failure:
There are some main causes of failure of this project.
Political insecurity or Lack of funds:
As we know that inflation in Pakistan which is increasing day by day so there was no
proper funds for this company to support in terms of financial problems by the
government.
Low quality of engine and transmission imported from china:
Revo100% built with Pakistan made parts except engine and transmission, which is
Chinese technology and that technology was in the phase of development and still need to
go long way in order to meet other global OEMs quality.
Road grips of tyres:
The tyres grip was worst especially in highways which is the basic cause for bubbling on
the roads. The tyres which Revo was using was of very low quality and of low cost so
their complains were more.
Lower quality of plastic interior:
The plastic interior in cars should be very rigid as per consumers preferences. Revox
used very low quality material of plastic to cut down their cost.
Poor marketing strategies:
To combine all 4 ps of marketing strategies, it was obvious that Revo was not satisfying
the customer needs in any phase of product, price, promotion and place.
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Poor back up service:
Back up services like after delivery services and cost charged services of Revo servicecenters was not up to the mark. Many clients complained about that facility which they
should be availed.
Poor positioning:
Revo create very bad image in the customer mind by reducing the quality for cutting the
cost and the car did not get much ability to survive in critical stages. It was the most less
expensive car at its time but the low quality of its made its bad image in people mind.
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SWOT Analysis:
Strength:
Luxurious car interior
Good distribution channels
Low fuel consumption
Easy availability of spare parts
Weakness:
New Entrance in the marketplace
Limited Finances
Highly Competitive environment
Opportunity:
Extra market can be captured by introducing more models.
Threat:
Competition from other manufacturers mainly Japanese and Korean car-makers.
High oil prices resulting in decrease in demand.
Global inflation due to increase in population
Increase in demand of other cars may result in downward.
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Industry Analysis:
Now days the scope of automobile industry in Pakistan have increased than past several
years because of many new designs and luxuries of people. The purchasing power of people
has increased due to inflation and more resources in car industry. The other automobile
companies in Pakistan are Suzuki motors, Indus motors and Honda. Our direct competitor is
Suzuki (Mehran). In future Toyota Indus motors can be our competitor but we are initially
focusing on economic car.
Competitor Analysis:
Automobile Industry in Pakistan is in maturity level. There are many Brands in automobile
industry competing in Pakistan. Our major competitor is Suzuki which has average goodwill
after Honda and Toyota. Imported cars are also in trend in Pakistan but are of very high
prices. The pricing of our main competitor is very high whereas we have kept it less than
their prices. Other competitors include Suzuki (Alto) and Hundai (coure) which are small
cars and of high prices. Our competitive advantage is that we offer low prices for our newproduct in the market which obviously create good sales as per our expectations.
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Market Product Focus:
Target Market:-
Target audience:
We have done strategies for mass marketing in Pakistan. Our target market is;
- Low income or middle class families.
- Companies for giving cars to their employees. Job oriented people so according to this
strategy we must gain market strength in the mind of middle class people.
Point of Difference:
Our car is economical and is the best choice for small families, for the people those want to
switch away from the motorbikes to the cars and the people those want to up-grade
themselves with respect to ever changing environment.
We are providing high quality engine transmission and good quality body parts of Revoxwith low cost as compare to our competitor prices, this will be the point of difference of
Revox.
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Repositioning:
As Adam Revox is a city car made by Adam Motor Company for the people of Pakistan, It isthe first economical car to be designed and assembled in Pakistan. As the production was
entirely done in Pakistan so its overall cost is also set accordance to the buying power, as our
previous model stopped due to unavailability of funds and lack of government support. We
are again entering in the market with sufficient fund forecasted by our financial department.
We offer two variants CNG Revox and without CNG Revox, equipped with two different
Chinese made engines; the Revox 800cc (0.8L) and Revox 800cc CNG (with 50 kg slender) .
The Revox was envisaged to be 20% cheaper than its close competitor, mainly the Mehran
800, which dominates Pakistan's automobile industry.
Marketing Program:
Product:
We are launching the 800cc Car named Revox. We also have attractive new colors like,
serene white, rouge red and aqua blue. In future we are thinking about many other attractive
new colors in the market which will be very new in Pakistani market.
Price:
We have based our prices by keeping in view our competitors. To penetrate into the market
the price of our product is less than our competitors.
Place:-
In start we have franchises in the top 5 cities in Pakistan. We are also launching the
Company Operated Sales and service centers in these cities that deal directly with
these franchises and supply them the parts. We are also providing the common auto
spare parts to the other retailers in the city.
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Promotion:-
We will use Electronic and Print media both to promote our products. Our ads will air on
some notable TV channels and newspapers. The promotion details are mentioned in the
advertising budget section of our report.
MEDIA STRATEGY AND TACTICS
We will use different advertisement media such as
1. Print Ad
2. Electronic Media
3. Personal Selling
4. Direct Marketing
Print Media:
For print media we will use following newspapers and magazines.
Newspapers: Dawn, Jang, Business Recorder
Magazines: Herald, Business week
Electronic Media:
This media will also be used when we launch our product country wide we have decided to
play our advertisement on following channels. Geo, Ptv, Star Plus at prime times
Timings and Schedule of Ads on TV 30 seconds ad to play on TV. We have decided to play
total 18 ads per day according to the following schedule.
Personal Selling:
For this type of promotion we will recruit enthusiastic experience and
combative persons. We will use combination of commission and fixed salary for their
compensation and their performance will be evaluated on fortnight basis. Only progressive
sale will be encourage to retain. The company will pay Rs: 10000 per month at fix salary and
rupee 5000 on selling on each car.
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Direct Marketing:
We are also providing the leasing facilities to our potential customers on easy term and
conditions.
Advertising
Public relations:
ADAM Revox is the product of ADAMJEE Ltd. and it is the renowned company in
Pakistan, its PR coverage already exists in Pakistani market and for relaunch REVOX car,
we will promote public activities to increase our PR.
Advertising:
Innovation lies in reaching the right customers always and communicating in a simple and
effective manner. We will advertise and create awareness for our valued customer through
electronic and print media and also run campaign for promotion and publicity of our product
through lucky draws in shopping malls and car displays in malls.
Trade shows:
We will proud to include our car in any car trade show to create more awareness among
people.
Direct marketing:
We will do direct marketing by making effective website and ads on other popular websites
in Pakistan, also by emailing, mobile messaging ,fliers , catalogue distribution, promotional
letters , outdoor advertising especially for companies.
Web marketing:
Our own special designed site will be our first priority of web marketing for our product andfurther we will advertise on many popular websites of Pakistan, and also spread e-mails to
random email ids for direct web marketing.
Web sales:
We will design our website in such a way that customer will have each and every detail
about the product at their home. We will launch first time in Pakistan online selling of Revo
car by just clicking one button.
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Launch Budget
Cost multiplier for components manufactured internally = 100/45 = 2.22.
Cost multiplier for outsourced components = 100/(45 + 7 + 6.7 + 5 + 6) = 1.455.
Table 1 Manufacturers Suggested Retail Price
Cost Category Cost Contributor Relative to Cost of
Vehicle Manufacturing
Share of
ADC
(%)
Vehicle
Manufacturing
Cost of Manufacture 193500 45%
Production Overhead Warranty,
R&D/Engineering,
Depreciation and
Amortization
30100
28810
21500
7%
6.7%
5%
company Overhead Corporate Overhead,
Retirement and
Health
25800 6%
Selling Distribution,
Marketing, Dealer
Support, and DealerDiscount
107500 25%
Sum of Costs 407210 94.7
Profit Profit 22790 5.3
Total Contribution to
ADC
430,000 100%
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Table 2 Cost Breakdown Presentation
Cost Category Cost Contributor Price Relative to
Cost of Vehicle
Manufacturing
Share of
ADC
(%)
Vehicle Manufacturing Material Cost,
Manufacturing Assembly
Labor and Other
Manufacturing Costs
5.59
13.76
13%
32%
Fixed Cost Transportation/Warranty,R&D, Pension and Health
Care,Engineering,
Depreciation and
Amortization, Advertising,
and Overhead
3.012.881
3.44
1.419
1.72
7%6.7%
8%
3.3%
4%
Selling Dealer markup,
Price Discount
4.3
2.15
10%
5%
Sum of Costs 38.27 89%
Profit Automobile Profit 4.73 11%Total Contribution to
ADC
43.00 100%
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Q1 Q2 Q3 Q4
Advertising 11 million 10.4 million 9.6 million 7 million
Web 2.3 million 2.3 million 1.9 million 1.5 million
Direct Marketing 4.9 million 4.5 million 4 million 3.3 million
Events 3.2 million 2.7 million 2.1 million 3 million
Sales Tools 4 million 3.5 million 3.9 million 4 million
Electricity and Gasutility
5.5 million 4 million 4 million 4 million
Total cost forecasted 30.9 million 27.4 million 25.5 million 22.8 million
Fixed Cost 325 million 325 million 325 million 325 million
Variable Cost 470 million 560 million 590 million 520 million
Total 825.9 million 912.4 million 940.5 million 867.8 million
Cars to be
manufactured
2000 units 2250 units 2500 units 2100 units
Cost of producing one
unit
4,12,950 4,05,511 3,76,200 4,13,238
Expected Profit 17050 * 2000 24489 * 2250 53800 * 2500 16762 * 2100
Total profit 34,100,000 55,100,250 1,34,500,000 35,200,200
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Pricing
We will be using two types of pricing strategies:
Price penetration:
At the relaunch of Revox we will be using price penetration strategy and compete with our
competitor with advantage of less price from them.
Cost plus pricing:
We are charging less profit as compare to our competitors and we have strong staff at all
fields who always works for cut down the extra prices from where it possible.
Identification Price
Revox 80s 4,30,000
Revox 80+ (withCNGoption) 4,85,000
http://en.wikipedia.org/wiki/Compressed_natural_gashttp://en.wikipedia.org/wiki/Compressed_natural_gashttp://en.wikipedia.org/wiki/Compressed_natural_gashttp://en.wikipedia.org/wiki/Compressed_natural_gas8/2/2019 Final Mm Report
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Marketing Organization
The current marketing situation on a daily and monthly basis is to analyze trends and identifysources of business growth. Owner is on hand daily to insure customer service. Our services
include products of the highest quality and a prompt response to feedback from customers
and clients. Our extensive and highly detailed financial statements, produced monthly, have
enabled us to stay competitive and exploit presented opportunities. Copies of our financial
statements are available upon request.
MANUFACTURER
DEALER
CONSUMER
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RISK ANALYSIS:
As Revox become flop car in peoples mind and to make it successful there are many riskfactors we must have to face and due to rebuild the position of the car in customer mind its
not an easy task. Following are the brief description about the risk involved in launching the
Revox.
Risk Description:
Now a days we know that there are many economical and those cars which are highly
reputed in the market specially from the middle class and lower middle class point of view
such as Mehran 800 cc which is very successful from the start so if we talk about the Revo it
becomes flop because of their poor quality of engine and transmission which is considered
to be the most important thing in every car so the risk involved that we are launching again
this car with lots of good changes such as high and improved quality of engine and
transmission which is also import from china but a 10 times better than the previous one
which is cost quite high due to inflation and improved quality and we decide to make the car
price as little bit change at the first time to rebuild the position in customer mind and give a
chance to those who are new to purchase the new car.
Alternative:
As there is a risk involved in it so in case of any complain in engine or transmission by the
customer we make an alternative to give new engine or transmission if we find some big
default in the car so that our customer should not feel bad in solution to this problem.
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Mitigation Plan:
Following are the steps which must be taken to mitigate the risk:
Make sure the car engine is reliable in terms of any problem which was held in
previous car.
Try to forecast the reputation of the car in the future.
Minimize the potential impact of threat and warning.
According to these steps we are trying to relocate our car before launching that reduce
the severity of exposure to risk.
Launch Status Communication Plan:
The communication plan is quite different from the previous plan through which we can
highlight some of the changes that help us to market our product in the market in the pre and
post launch activities we can see the difference .
Summary of Pre and Post launch activities:
Previous Activities:
Revox at the time of its launching gather market not very good because the communication
plan by the marketers and other executives are:
They focus on quantity to be produced :
They thought that as it was a reasonable price car so they dont want to choose
specific location for that car.
They highly depended on future income because of reasonable price and new
innovation by Pakistan automobile.
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Summary:
At the time of its launching the marketers didnt focus to control the production but they
focus on unit to be sold and the production of the unit which can be solved through
forecasting .Many of the executive thought that the was in reasonable price and people
should easily afford it to solve their transportation problem and due to this they dont gather
a proper information regarding the target audience and specially the location in which they
could make profit more than all over Karachi. As Revox is economical and full luxury car so
people dont hesitate to buy it because it is the new innovation by the Pakistan automobile.
Relaunch Activities:
After recognizing the mistakes in the past we are going to come up with many potential
activities that create the strength of Revox.
Summary:
At the first stage we are trying to choose the location specially in Karachi for job
peoples and make a contract with the companies so the companies should offer the
new Revox to their employees and due to this the market strength of revo become
better and people should aware of the car because specially if we talk about now a
days so mehran took place in job status people.
Problems to be solved:
Low quality engine and transmission
Low quality interior
Brakes and accelerator starts malfunctioning.
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Key benefits that solved the problem:
Good quality engine and transmission will be imported from china. Reliable breaks system
Improved plastic that used in interior.
Competitive background:
Suzuki is the leading name in small commercial vehicles and
passenger cars. Suzuki commenced its operation by assembling small 800 cc cars.Suzuki has been so far a sole leader in 800cc and1000cc passenger cars as well as
1000cc jeep Potohar. But the emergence of so many competitors in the market will
definitely trigger a very hard time to Pak Suzuki. Suzuki has launched Mehran 800cc,
Cultus 1000cc, Baleno 1.3 & 1.6 Eli and Gxi, Bolan van & Ravi pickup800cc and
Potohar jeep. Pak Suzukis sales during FY08 portrayed 31 per cent upsurge.
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ADVERTISING BUDGET
PRINT MEDIA
Newspaper Advertisements
to be published
Rate of
15x4
Newspaper
Rate of
18x3
Newspaper
Total Cost
News
Paper
DawnOnce in a week
for 2 months
61,700 81,950 Rs. 1,43,650
TELEVISION MEDIA
ChannelsNumber of
Advertisements
per day
TimingsCost Of Each
Advertisement Total Cost
GEO
NEWS /
GEO
SUPER
411:45/ 07:35
/09:05/ 11:20
Rs.12,760 Rs. 51,040
SAMMA
TV 6 10:35/ 01:10/
06:03/ 07:42/
08:36/ 09:30
Rs.12,760 Rs. 76,560
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BILLBOARDS
Place Size Rent per month Printing and
other expenses
Korangi road
,DHA
25x45 Rs. 418,000/= Rs. 38,450/=
Sharah-e-Faisal 30x50 Rs. 549,000/= Rs. 36,700/=