Lucas Moto

Company Overview

Rahimafrooz is one of the leading companies in Bangladesh concentrating energy sector. Founded by Late A C Abdur Rahim who overcame numerous challenges and obstacles to become one of the most accomplished entrepreneurs of this country. By the early 1940s, Mr. Rahim started small scale commercial trading on his own which later was formally incorporated on April 15, 1954 as Rahimafrooz & Co. Till date; Rahimafrooz Group commemorates this as its Foundation Day. Todays Rahimafrooz is a dream that Mr. A C Abdur Rahim turned into reality. The business growth, the social commitment, and the great diversity in todays Rahimafrooz are the outcome of one lifetime of hard work and compassion from Mr. Rahim. Over the decades, Rahimafrooz has grown in size, scale, and diversity. The Group today has Eight Operating Companies (SBUs), a few other business ventures, and a not for profit social enterprise. As of 2013, the Group currently employs more than three thousand people directly and a further twenty thousand indirectly as suppliers contractors, dealers and retailers. Rahimafrooz operates in four broad segments Storage Power, Automotive & Electronics, Energy and Retail. We have strengthened our market leadership at home while reaching out to international markets. Ranging from automotive aftermarket products, energy and power solutions, to a world class retail chain the team at Rahimafrooz is committed to ensuring the best in quality standards and living the Groups five core values Integrity, Excellence, Customer Delight , Innovation and Inspiring People. Rahimafrooz has been a partner in the development journey of this nation for more than fifty-five years now that set itself the highest standards in responsible corporate behavior and our passion for success is aligned with the development of the country. The group is committed to playing a leading role in driving growth, prosperity, ethical values and social responsibility and continues to serve our customers through unparalleled quality excellence and service superiority. Success of this business has been complemented by its commitment to the environment, society and community.At Rahimafrooz, motto is enriching lives with your trust!

Symptoms

Though Rahimafrooz is a profitable company but it is having less sales figures in some of its product line especially in the motorcycle accessories section. Most notably, a motorcycle battery branded under Lucas Moto is reporting fewer sales comparing offerings from competitors. The recent sales figures show many symptoms of the existence of a problem that is causing this unexpected outcome. The key symptoms that the company is witnessing are Lower sales figures Existing customers are switching to competitors products Number of new customers are comparatively fewer Distributors are not placing orders on large scale Retailers are not placing new orders

Problem

The symptoms clearly indicate that there is a problem in the marketing mix (4p).

Hypothesis

1. HA: Marketing mix (4p) was not conducted properly (Defining the problem).Purpose: The product lacks features, pricing is not competitive comparing offerings from competitors, regional sales points are selling the product at different prices, product has no effective promotional activities to capture market share.2. HA: Target market has better offerings from competitors (Describe). Purpose: As the competitors are selling similar products at lower price so they were able to capture noticeable portion of the market. But as Lucas Moto battery has offerings that are not making itself a better option than others so the product is facing threats.3. HA: Pricing is not done in accordance with market and regional sales points (Describe). Purpose: The price is not competitive with its competitors. Moreover, price of Lucas Moto battery is different in different parts of Bangladesh which is causing confusion among the prospective buyers about quality and they are raising questions about the justification of such pricing.4. HA: Branding is necessary especially improvement in packaging can represent the brand value properly and increase brand equity (Solve).Purpose: Proper execution of marketing mix can solve the existing problem and holistic marketing can pave the way.5. HA: Promotional activities can endure the way of receiving higher sales figures (Solve).Purpose: Once the customers will be seeing a lot of promotions from Lucas Moto, they will eventually start buying the product more than before and also refer the product to their close ones and create more prospective buyers.

Questionnaires

1. Do you think that marketing was not conducted properly?i.Strongly Negative ii.Negative iii.Neither Neg. nor Pos. iv.Positive v.Strongly Positive2. Do you think that the Rahimafrooz has better offerings than its competitors?i.Strongly Negative ii.Negative iii.Neither Neg. nor Pos. iv.Positive v.Strongly Positive

3. Do you think that the pricing matters are not done in accordance with market?

i.Strongly Negative ii.Negative iii.Neither Neg. nor Pos. iv.Positive v.Strongly Positive

4. Do you think that branding improvement cannot solve the problem properly?i.Strongly Negative ii.Negative iii.Neither Neg. nor Pos. iv.Positive v.Strongly Positive

5. Can the promotional activities of Rahimafrooz make dramatic changes in sales figures?i.Strongly Negative ii.Negative iii.Neither Neg. nor Pos. iv.Positive v.Strongly Positive

Here the value of the question number 1, 3 and 5 are,i.Strongly Negative = 1ii.Negative = 2iii.Neither Neg. nor Pos. = 3 iv.Positive = 4v.Strongly Positive= 5

To avoid questioner bias we turn the question, that's why the value of the question number 2 and 4 has changed,i. Strongly Negative = 5ii.Negative = 4iii.Neither Neg. nor Pos. = 3 iv.Positive = 2v.Strongly Positive= 1

Target Population

Our target population is reseller of motor-cycle battery in Bangladesh.The main reason behind this decision is, motor-cycle battery resellers have better knowledge about both the customers and the products. They also know about substitute products and competitors offerings to both the customers and distribution channel. As they are the ultimate source of all the information we need to complete the research/survey so it increases the chance of providing more correctness of this research than any other source of information.Sampling Frame

The sample frame of this study has considered reseller who sells Lucas Battery with other brand battery. The population has defined as resellers who keep Lucas Battery with other branded battery in their inventory for selling to the end users. The Collection of data survey was conducted in March 7-March 25, 2013.We will collect our data from those motorcycle accessories sellers who are selling Lucas Battery with other motorcycle battery in different parts of Dhaka area.Sampling Method

Our sampling method is Stratified Random Sampling. The stratified probability sampling approach is selected for this study.

Sample Size Selection

Our sample size is 30. Surveys have conducted throughout Dhaka city.Test Statistics & Analysis

Hypothesis Testing

1. HA: Marketing mix (4p) was not conducted properlyHO: Marketing mix (4p) was conducted properly

*In a 5 point scale, X= 3.97,N=30,SD=1.098,=3Tcal = (x - )/ (SD/) = (3.97-3)/ (1.098/ 5.48) =4.84

With degree of freedom, D.F. = (n-1) = (30-1) = 29

At 5% level of confidence, the value of T in T-Distribution table (As we are looking for one tail value) is: t0.025 =2.045 Since TcalTtab, we would reject the null hypothesis.So at 5% level of confidence, we can say that, marketing mix (4p) was not conducted properly

2. HA: Target market has better offerings from competitorsH0: Target market doesnt have better offerings from competitors

*In a 5 point scale, X= 3.97,N = 30,SD=1.097,=3Tcal = ( x - )/(SD/) = (3.97-3)/(1.097/ 5.48)=4.85

With degree of freedom, D.F. = (n-1) = (30-1) = 29

At 5% level of confidence, the value of T in T-Distribution table (As we are looking for one tail value) is: t0.025 =2.045.Since TcalTtab, we would reject the null hypothesis.So at 5% level of confidence, we can say that, Target market has better offerings from competitors

3. HA: Pricing is not done in accordance with market and regional sales pointsH0: Pricing is done in accordance with market and regional sales points*In a 5 point scale, X= 3.67,N = 30,SD=1.37,=3Tcal = (x - )/ (SD/) = (3.67-3)/ (1.37/ 5.48) =2.68

With degree of freedom, D.F. = (n-1) = (30-1) = 29

At 5% level of confidence, the value of T in T-Distribution table (As we are looking for one tail value) is: t0.025 =2.045Since TcalTtab, we would reject the null hypothesis.So at 5% level of confidence, Pricing is not done in accordance with market and regional sales points

4. HA: Branding is necessary especially improvement in packaging can represent the brand value properly and increase brand equityH0: Branding is not necessary especially in packaging*In a 5 point scale, X= 3.87,N = 30,SD=1.22,=3Tcal = ( x - )/(SD/) = (3.87-3)/(1.22/ 5.48)=3.91

With degree of freedom, D.F. = (n-1) = (30-1) = 29

At 5% level of confidence, the value of T in T-Distribution table (As we are looking for one tail value) is: t0.025 =2.045Since TcalTtab, we would reject the null hypothesis.So at 5% level of confidence, we can say that, Branding is necessary especially improvement in packaging can represent the brand value properly and increase brand equity

5. HA: Promotional activities can endure the way of receiving higher sales figuresH0: Promotional activities cannot result higher sales figures*In a 5 point scale, X= 3.83,N = 30,SD=1.23,=3Tcal = ( x - )/(SD/) = (3.83-3)/(1.23/ 5.48)=3.7

With degree of freedom, D.F. = (n-1) = (30-1) = 29At 5% level of confidence, the value of T in T-Distribution table (As we are looking for one tail value) is: t0.025 =2.045Since TcalTtab, we would reject the null hypothesis.So at 5% level of confidence, we can say that, Promotional activities can endure the way of receiving higher sales figures.Promotional Benefits

We also found that if the resellers are offered gifts along with a particular number of purchased batteries, they have promised to recommend Lucas Moto to their customers and help increase the sales. A pilot survey has conducted considering umbrella as a gift on every 100 unit purchase of Lucas Moto and the results helping increase sales are

Umbrella Units (x)Sales Increase (y)(In Crores of Taka)xyx2y2

12214

23649

3412916

45201625

56302536

x= 15y= 20xy= 70 x2= 55 y2= 90

Here, ; Now, y=a+bx b= b= b= And, a = = = 4.75

Findings

After analyzing all the statistical data, it is now a clear picture which finds the followings:

1. The entire null hypothesis has been proved as wrong.2. It also means that the entire hypothesis that was formulated at the beginning is proved to be correct.3. There is indeed some lacking in marketing mix which resulted shorter sales than expected.4. It is now clear that competitor and their products are currently providing better offerings to both the resellers and end users, which resulted higher sales for them but unfortunately not for Rahimafrooz.5. Pricing strategies failed to position the Lucas Moto battery against its competitors. Both the resellers and end users are getting better options from competitors.6. Packaging has failed to attract the potential customers as it is not attractive enough to get the attention in a crowded environment. Sample population observed such expression from customers.7. Lucas Moto is not providing any promotions to the resellers as well as end users, a method which the competitors use to exploit as their advantage and provide promotions to increase sales.

Recommendations

Now, in order to increase sales figures up to the expectations, we strongly suggest taking the following measures to be in effect as soon as possible:1. Product should be attractive and should separate itself from competitors offerings. A unique stylish shape of battery suitable to fit the battery casing should solve this easily.2. Competitors are providing battery acid separately which is welcomed by distribution channel though it is completely against the law and regulations as misuse of such chemical is noticeable. Rahimafrooz should setup one service center in every district to counter the balance while obeying the law.3. Pricing differs in various parts of the country due to transportation costs but customers get confused when they find same battery priced differently in different parts. We should select a rounded figure to be effective as fixed price in every districts of the country.4. Branding department should conduct extensive research on product color, packaging and every single matter related with branding so ensure that the final product is visually attractive enough to get the attention of potential customers at first glance.5. Rahimafrooz should provide promotional objects as a part of promotional campaign to keep in touch with resellers and end users. An umbrella for resellers for every 100 unit battery order or a cap for customers with a brand new battery purchase could definitely work very effectively.Conclusion

There is no doubt that an improper planning and execution of marketing mix failed to achieve the expected sales of Lucas Moto. However, if the findings are observed carefully and recommendations are executed properly, that previous scenario could be a history. Lucas Moto has the potential to achieve the expected results and it is time to act now before its too late to have an effect.Bibliography & References

1. Rahimafrooz Website (2013) About Us. [Online] Available from: http://www.rahimafrooz.com/OurGroup/AboutUs/tabid/62/Default.aspx [Accessed: 21 February 2013]2. Lucas Batteries Website (2013) UK Home. [Online] Available from: www.lucas-batteries-online.co.uk/ [Accessed: 02 April 2013]3. Microsoft Office Website (2013) T Test. [Online] Available from: office.microsoft.com/en-001/excel-help/ttest-HP005209325.aspx [Accessed: 02 April 2013]