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_gas


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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/=

Documents

Final Mm Report