MARKETING GROUP ASSIGNMENT

Hussain Noor ( KR00 ) Syed Muhammad Zohaib (KR002646 ) Shoaib Manzoor ( KR00 ) Hira Azmat ( KR002639 )

Acknowledgements
We would like to thank God for granting us the strength, courage, will power and patience in each task, whether big or small, that has made this work possible. This work has been a taxing and laborious task for us and wouldnt have been possible without the help and support of we gained from each other and especially so from our lecturer (in the truest sense of the word), Ms. Kiran Akber Ali, who gave us both guidance and advice which have made our work possible. We are grateful for her help. We hope and pray that this report meets the requirements and criteria expected from us.

Table of Contents
S. No.
1 2 3 4 Marketing Strategies : 1. market segmentation 2. target marketing 3. market positioning and differentiation 4. the marketing mix 5 Major Aspects Of The Marketing Plan 21

TOPIC
Introduction Executive summary Situational Analysis : SWOT Analysis

Page No.
4 6 8 11

Goals Objectives
8

Strategy Financial Projections and Budget

25

Control and Evaluation

27

Introduction
A marketing plan is a blueprint that provides structures of a firms activities and, aptly so, includes the implementation and control of those activities. Major sections of a marketing plan would comprise of: 1. the executive summary 2. situation analysis 3. analysis of strengths and weaknesses, opportunities & threats 4. desired outcomes 5. marketing strategies 6. product/market match 7. controls and evaluation 8. financial projections

Keeping in mind that there are several different formats that can be used to describe the components of marketing plan, we have used the one you see here for our term report. The marketing strategy and its key elements are put down in writing in rather broad terms which are not suitable for implementation, neither are they meant to be. The marketing

plan is the action document. Developing a marketing plan is a creative effort to provide vision and direction for marketing implementation. This report provides a marketing plan developed for a new product about to be released into the market by the Toyota Company. It will be called the Toyota Carriage, a car designed for the working and middle class. The sales pitch here if you may, is that this car will be the cheapest car in Pakistan and will fulfill the commuting needs of people classified as the working and middle class of Pakistan who were, prior to the availability of this product, able to purchase a car. Current product introduction objectives and strategies emphasize the fact that its a car designed specifically to meet the bare needs of classes of society that have to rely on commuting means which are not exactly convenient (public transport services), safe (scooters, motorbikes, etc.), or even entirely consumer friendly in light of the aforementioned two when it comes to families (a classification which comprises a large number of people in Pakistan). Our focus lies in creating awareness among people that it is dangerous, and even illegal when it comes down to the law of the land to commute with a family on a two wheeler on the infamously lethal roads of Pakistans major cities. It might also be a good idea to inform potential customers about the benefits offered by the car and convince the consumers to buy the product.

Executive Summary
This marketing plan has been designed for the Toyota Carriage. The core benefit of this product is to provide a reasonably comfortable, safe and consumer-friendly commuting option in the form of this high value economy car which could be considered affordable by a majority of people belonging to the working and middle class segments of Pakistani society as its sales pitch claims of being the cheapest car in Pakistan will bear reasoning when it comes to pricing the different models of the Toyota Carriage upon its release. The challenge and, consequently, the objective of our plans would be to convince potential customers of the products superiority in value for money and features provided in contrast to both conventional alternatives and competition alike. Due to numerous economical factors over the past few years, the number of cars, and especially so, economy cars bought and sold in Pakistan has grown considerably resulting in the introduction and popularity of many car models by numerous companies that have learnt to take advantage of this new-found realization. It has been identified that the following variables will affect the purchase of Toyota Carriage: 6

1. Region 2. Density 3. Age 4. income group 5. education 6. lifestyle 7. personality 8. social class 9. user status

We combine these aforementioned variables and give them relative values in order to arrive at our target market. We then evaluate the segments and then decide how many and which ones to target. The appropriate market coverage strategies are then implemented in order to serve the respective segments.

It is essential that Toyota Carriage be differentiated from the competitors products. The products position must be communicated and delivered to the heart and minds of the target consumers. Throughout the marketing process we will stick to our primary objective of increasing sales, earning high profits all the while keeping in mind the bare essentials of the product which is providing those with limited means a method of commute through the Toyota Carriage at affordable and competitive prices.

SWOT Analysis for the Toyota company:

Strengths New investment by Toyota in factories in the US and China saw 2005 profits rise, against the worldwide motor industry trend. Net profits rose 0.8% to 1.17 trillion yen ($11bn; 5.85bn), while sales were 7.3% higher at 18.55 trillion yen.

It can be argued that Toyota has the right mix of products for the markets that it serves.

Toyota is a good example of very focused segmentation, targeting and positioning in a number of countries.

In 2003 Toyota knocked its rivals Ford into third spot, to become the World's second largest carmaker with 6.78 million units. The company is still behind rivals General Motors with 8.59 million units in the same period. Toyota has a strong industry position. The company has diversified product range. The company has devised marketing techniques to identify and satisfy customer needs rather successfully in the past. Being the worlds second largest car manufacturer, its brand name is a well known and trusted household name. The Toyota brand has been compared to manufacturers of higher end vehicles in the market. Toyota believes in fast, inexpensive production. The company maximizes profit through efficient manufacturing approaches and has a commitment to lean manufacturing and quality. (e.g. Total Quality Management). Weaknesses

The world market for cars is in a state of over-supply and large global car manufacturers like Toyota have to work hard to gain and maintain market share.

Selling globally means Toyota is exposed to the fluctuating economic and political conditions of other markets.

The company needs to keep producing cars in order to retain its operational efficiency. Car plants represent a huge investment in the form of expensive fixed costs plus high costs of training and retention of labor. So if the car market experiences a down turn, the company could see an over capacity. If though, on the other hand the car market experiences an upturn, then the company may miss out on potential sales due to under capacity i.e. it takes precious time to accommodate. This is a typical problem with high volume car manufacturing.

Opportunities Lexus and Toyota now have a reputation for manufacturing environmentally friendly vehicles. Lexus has its RX 400h hybrid, and Toyota has its Prius. Both are based upon advanced technologies developed by their respective companies. Rocketing oil prices have seen sales of the new hybrid vehicles increase. Toyota too has sold its technology to other motor manufacturers. For instance, Ford has bought Toyota technology for its new Explorer SUV Hybrid. Such moves can only reaffirm Toyota's interest and investment in hybrid R&D.

Toyota is to target the 'urban youth' market. The company has launched its new Aygo, which is targeted at the streetwise youth market and captures (or attempts to) the nature of dance and DJ culture in a very competitive segment. The vehicle itself is a unique convertible, with models extending at their rear!

This segment is notorious for its narrow margins and branding difficulties.

10

Threats Product recalls are always a problem for vehicle manufacturers.

In 2005 the company had to recall 880,00 sports utility vehicles and pick up trucks due to faulty front suspension systems. Toyota did not g ive details of how much the recall would cost. The majority of affected vehicles were sold in the US, while the rest were sold in Japan, Europe and Australia. Toyota faces tremendous competitive rivalry in the car market. Competition is increasing almost daily, with new entrants coming into the market from China, South Korea and new plants in Eastern Europe. The company is also exposed to any movement in the price of raw materials such as rubber, steel and fuel. The key economies in the Pacific, the US and Europe also experience slow downs. These economic factors are potential threats for Toyota.

Marketing Strategies:
To understand the needs and wants of customers and satisfy them customer analysis is required. A company cannot satisfy all the consumers in a given market therefore the market must be divided into segments and the company should design strategies for profitably serving the chosen segments. This process essentially involves:

11

1. market segmentation 2. target marketing

3. market positioning and differentiation 4. the marketing mix

1. market segmentation
Markets consist of buyers who differ in one or more ways. Consumers can be grouped and served in various ways based on geographic, demographic, psychographic and behavioral factors. This process of dividing the market into distinct group of buyers is market segmentation. For achieving our goals in this manner, we have distributed the market of Pakistan into segments. Here the market has been divided in the following segments for the Toyota Carriage. Geographic City: Karachi, Islamabad, Lahore, Quetta, Hyderabad. Density: urban, suburban.

Demographic Age: 20-50 Family Size: 1-5

12

Family Life Cycle: Single, Married, Married With Children. Income: Rs. 20000 and over

Psychographic Social Class: Working Class, Lower Middle Class Lifestyle: strivers Behavioral Benefits: Economy, Convenience, Service User Status: Non User, Potential User Readiness Stage: Unaware, Aware, Interested

According to geographic segmentation we segment our market on the basis of region and density. As we cannot cater to everyone in the market we define key regions where the product has the potential to acquire a considerable market share. Toyota Carriage is mainly designed for working people with commuting needs along the lines of getting to work or taking the family out for a ride but cannot afford a car yet. Such people can commonly be found in cities so we will segment the market into the major cities of Pakistan. Other ways in which we have segmented the market is density-wise. Urban dwellers and people living in the suburbs are the main market for us as these people have to commute to and from work on public transport, two wheelers and/or carpool which are 13

all not exactly a convenient means of transport. These people will definitely be looking to purchase a car at an affordable price. Demographic segmentation divides the market into groups based on variables such as: Age Gender family size family life cycle education occupation income religion race nationality

Toyota Carriage is segmented demographically into age, family size, family life cycle and income. Consumers between the ages of 20-50 are our target because these are the ones who most probably go to work and so require a car which is economical. According to family size this car is designed for an individual as well as for the whole family not bigger than 5 people as the car can seat four adults or two adults and three kids. Demographically the market has also been segmented according to the family life cycle which includes singles, married people and married with children. But the most important segmentation is income wise. This car is designed for the working and middle class who commute through public transport or two wheelers, as they dont have a high income to afford a car. This car is intended for people on a low income and especially those who have a family and therefore require a car. As people in the same demographic group can have very different psychographic makeup hence we use psychographic segmentation. Using psychographic segmentation we have 14

segmented buyers on the basis of social class and lifestyle. Toyota Carriage is more likely to appeal to consumers belonging to the working and middle class. These are average pay white and blue collar workers who want to have the lifestyle of the upper class and so they have a lust for products which develop their image. As going on public transport or scooters does not presents a good image so they will buy the Toyota Carriage which is a better option, is more convenient to use and very affordable. According to lifestyles the market segment we are targeting is the strivers. They are people with an active lifestyle and not so much free time. They are motivated to succeed in their career and personal life. They aspire to a higher level of income, social status, career success. They are interested in changing styles and trends and feel that appearance is important. That is why owning a car is important for them. And as the Toyota Carriage is very inexpensive they will definitely go for it. Lastly the behavioral segmentation of Toyota Carriage is made. Behavioral segmentation divides the buyers into groups based on their knowledge, attitudes, uses or responses to a product. Behavioral segmentation of Toyota Carriage is done on the basis of benefits, user status and readiness stage. The benefits the product can give are economy, service and convenience. Customers of Toyota Carriage will have a economic car and it will be convenient for them to drive the car for travel purpose. The customers will also receive after sales service from the dealers. According to the user status the market is segmented into non user and potential user. We have to aware the non users and to inform the potential user about the benefits of the car so they buy it. The market is also segmented according to readiness stage. We will target the unaware consumers and make them aware about this product. We will motivate the aware and interested consumers to use the product as it will be beneficial for them.

2. target marketing

15

A target market consists of a set of buyers who share common needs or characteristics that the company decides to serve. We have already divided the market into segments but now we need to evaluate the various segments identified above in order to decide how many and which ones to target. After combining the appropriate variables we arrive at a market segment with a high growth rate. The factors that affect the long run structural attractiveness are in our favor because there are very few competitors, meaning there are very few substitute products available. Our target market is the working and middle class who are not earning too much but want to have a better lifestyle and status in society. We have planned to use a differentiated marketing coverage strategy. We are going to focus on several market segments. The differentiated marketing strategy is highly profitable for us. Through the differentiated marketing strategy we hope to achieve a strong market position because we know the needs of our consumers and also have knowledge about the segments specified, and so are able to earn a high rate of return on the investment.

3. Market Positioning and Differentiation

A product's position is the way the product is defined by consumers on important attributes and the place the product occupies in consumer's mind relative to competing products. As consumers are overloaded with information about different products they organize products and companies and position them in their minds. A brand must adopt a positioning strategy designed to serve the needs and wants of its target market. We plan to differentiate our product through product differentiation. Toyota Carriage is different from other cars in the market because it's available at a cheap and affordable price. It is positioned in the minds of consumers as a car which offers high value at a lower cost. Our product is highly affordable and convenient and the after sales services we provide to our customers make the product more lucrative. As we have very few 16

competitors and there products are expensive than the Toyota Carriage we are expecting a competitive advantage over our competitors. The full positioning of a brand is called the brand's value proposition. It is the answer to the customer's question" Why should I buy your brand?" Our value proposition hinges on low price and high economic value. To position the Toyota Carriage we will use Less for Much Less positioning strategy. Consumers get lesser benefits as compared to other products in the market but they will get them at a much lesser price as compared to the products of the competitors. The benefits provided by the Toyota Carriage are fewer than those provided by the competitors but the price of the Toyota Carriage is much cheaper than other cars in market. Therefore our car has a unique position in the market. The other benefit we have is quality. Carriage is launched by Toyota which is a trusted brand. Japanese cars especially Toyota cars have a good image in the minds of consumers. As we are launching a car by Toyota it means we are providing a good quality car to customers at a reasonable cost.

4. The Marketing Mix

The marketing mix is the set of controllable, tactical marketing tools that the firm blends to produce response it wants in the target market. The many possibilities can be collected into four groups of variables known as the "four Ps": product, price, place and promotion. The marketing mix for Toyota Carriage is given as under.

PRODUCT Toyota Carriage is a proposed city car. A small, affordable, rear-engine, four-passenger car aimed primarily at the Pakistani market. It is manufactured by Toyota and is a 4-door Hatchback. The length of the car is 120 inches, the width 60 inches and height 62 inches. 17

The fuel capacity of the car is 15 liters. The body is made of sheet-metal and plastic. The car can have a maximum speed of 75 km/hour. The four-door car has a 33bhp, 624cc, engine at the rear. It has no air conditioning, no electric windows and no power steering, but has capacity to seat five people. The car will be available in five different colors i.e. red, yellow, black, white and blue and so there will be more variety to choose from. The car is very economic as compared to the other cars in the market. This car is safe, affordable and designed to meet all safety standards and emissions laws. Initially about 100,000 models will be made, with an expected annual demand of half a million cars. We will provide after sales service to our customers. For this we have carefully selected dealers who will inform people about the car and will provide assistance to them after the purchase of the car. They will provide good quality service to the customers. In the future additional features will also be introduced in the car making it more worthwhile for the consumer to buy the Toyota Carriage. The quality of the car will be further improved.

PRICE For the first year of the introduction of the product we will use the market-penetration pricing strategy. We will set a low initial price in order to enter the market quickly and deeply. In first year we want to attract a large number of buyers and a large market share. Since Toyota Carriage is a new product we have kept the prices low so we have a great number of sales. The high sales volume results in falling costs, which will allow the company to cut its price even further. The general pricing approach used will be cost plus pricing where we add a markup of 40% to the cost of the product. The total cost for a Toyota Carriage is Rs.72 825. After adding the 40% markup we get a price of Rs.1 01 955. This is the price on which we will sell the car to our dealers. The dealers will further apply a markup of 20% which will make the price of the car Rs.1 22 346. As a result the consumer will get the Toyota Carriage at a price of Rs.1 22 346 which will be the cheapest priced car in Pakistan.

18

Promotion
Modern marketing calls for more than just developing a good product, pricing it attractively and making it available to target customers. Companies must also communicate their message with the customers and what they communicate should not be left to chance. For most companies, the question is not whether to communicate, but how much to spend and what media to use. First of all we need to decide on the basic message content that will produce the desired response. The message should relate to the audiences self interest and show that the product will produce the claimed benefits, for e.g. product quality and performance. Yet, it must be catchy, or atleast a little bit clever, something capable of being retained despite the slightest amount of attention paid. A few ideas that could be decided upon are:

Carriage The not so common car for the common Reliability,Ttrust, Safety, Valueall within your reach now. carriage, the car for everyone.

One of the most difficult decisions in marketing is to decide how much to spend on promotion. In the first year of launch we shall carry out aggressive promotion in order to capture the larger part of the market. After that we intend to follow the objective-andtask method whereby the company sets its promotion budget based on what it wants to accomplish with promotion. We will employ various communication channels to make people aware of our product -its features and its application.

Television:

19

TV advertisements are the most important way to convey our message to consumers. Therefore advertisements will be made for the consumers which will not just serve to make people aware of the new car in town but urge them to buy the Toyota Carriage. The advertisements should show in moderate detail the benefits of the Toyota Carriage. The TV ads will be displayed on the major channels which are seen by most of our target market like Geo, Express News, ARY etc. By this medium after two months we will have successfully created awareness for our product. In this way we will develop a feeling for the experience that the product offers.

Billboards and Posters: The advertisements will be used to make people aware that something new is about to arrive. Catchy captions will be placed on these billboards to get people to notice it. This will build anticipation in the potential customers. We plan to keep these teasers running on display for an estimated 4 weeks. After this time duration we will place more descriptive and informative advertisements on the billboards that talk about the actual product and the benefits of using the product. These billboards will be located in the major cities.

Magazines: In order to inform everyone about the new launched car we will give ads in magazines like Sunday Magazine, Akhbaar-e-Jahan, Time, Extra, Herald, etc. The magazines will feature full-page length color advertisements with greater detail about the features of the product along with its costs, design and features.

Newspapers: The newspaper advertisements will feature appropriate sized advertisements like quarter page as well as full-page length color advertisements and they will appear with an interval of a week. They will clearly state the message to be conveyed to the 20

potential customers. The newspapers will be Jang, Express News, Dawn, The News, etc.

Place
Distribution channels are basically a means of getting the product from the manufacturer to the final customer. In the case of our product we will use well known Toyota showrooms and Toyota dealers who are already selling our products to sell the Carriage to the customers. We will be using dealers in major cities like Karachi, Lahore, Quetta and Islamabad to make our product available to the consumers. We will have a direct link with the dealers. Moreover a sales representative from the company will visit the showrooms and dealers on a regular basis. Our dealers will also provide after sales service to the customers. In this way we will have more profitable relationship with the customers.

Major Aspects Of The Marketing Plan

Goals:

21

The decision by a potential customer to purchase Toyota Carriage can be broken up into a series of yes or no questions devised for goal setting purposes. These are as follow: Step1: Is the customer aware of Toyota Carriage? Yes: Proceed to step 2. No: Customer must be educated about Toyota Carriage . Step 2: Does the customer understand the benefits of Toyota Carriage? Yes: Proceed to step 3. No: Customer must be educated about the benefits of Toyota Carriage. Step 3: Does the customer see the price/ benefit ratio as a good value? Yes: Proceed to step 4. No: Customer must be educated on the value of Toyota Carriage.

Step 4: Will the customer purchase the product? Yes: A sale has been made and the objective achieved. No: Any remaining obstacles must be removed.

The goal of this plan is to realize, view and consequently remove all obstacles that lie in a customers way of making a buying decision for the product.

22

Objectives:

To achieve the aforementioned goals we have to establish certain objectives:

Objective 1: Increase customer awareness of Toyota Carriage. This applies especially to those customers who have no information or awareness whatsoever of the products existence. This objective will aim to achieve our first goal as listed above.

Objective 2: Increase awareness in the minds of potential customers who perhaps dont yet understand or realize the benefits and value of Toyota Carriage. Examples of such cases are where an individual or group just doesnt distinguish the car from other similar ones out there in market within the same price bracket enough to vouch in favor of it. In other cases people might just prefer another brand or model altogether or even just not see the point of shelling out the extra buck to buy a car and switch to personal transportation from public. Achievement of this objective will mean steps 2 and 3 have been completed from our list of goals.

Strategy:

To accomplish the objectives we outlined for ourselves, geographic, demographic, psychographic and behavioral information which weve gathered must be used to develop a target customer profile. A promotional campaign could then be developed with a certain relevant theme in mind which appeals to or catches the eye of people who match the criteria of the said customer profile. 23

As mentioned before in this report, a huge part of our strategy centers on product differentiation, whereby we differentiate our physical product from competition and alternatives alike. This is certainly possible in the case of Toyota Carriage, mainly due to the fact that the Carriage will be the cheapest economy car in the country upon its release into the economy car market.

Image differentiation techniques must include relating the benefits of Toyota Carriage to the target customers that suit the profile criteria as laid down in our target customer profile.

This strategy can and will be implemented through four main channels: 1. Creative television advertisements designed to appeal to the target market. 2. Frequent advertisements in the newspaper and magazines to persuade the customer. 3. Billboards and posters will be used in the metropolitan areas to keep reminding the customer. The advertisements will be used to make people aware that something new is about to arrive. Catchy captions will be placed on these billboards to get people to notice it.

The promotional campaign will create brand and benefits awareness for Toyota Carriage right from scratch. The final result of which will hopefully be increased trial and subsequent sales.

24

25

Financial Projections And Budget

The following costs are estimates based on rates we have gathered from different sources of media management.

Media Channel Television Billboards Magazines Newspapers TOTAL

Per Unit Cost in No. of Units Rs. 10000000 2000000 250000 200000 15 50 50 100

Total Budgeted Cost in Rs. 150000000 100000000 12500000 20000000 282500000

From the budget above we expect our total promotional expenditures to be around Rs. 10750000. The per unit production cost is Rs. 70000 per car. Our initial estimate of production is around 100,000 cars a year. That brings the total production cost to Rs. 7000000000. The promotional costs are approximately 282500000. In order to find the per unit cost of selling a car we add the annual promotional and production costs and divide the result by the number of cars produced annually:

Rs. 7000000000 + Rs. 282500000 = Rs. 7282500000

Rs. 7282500000 / 100000 = Rs. 72825 per unit

26

We have the total costs of producing a car. Now we will simply add a markup to the cost price of the packet to arrive at the retail price. Now we can add a 40% markup:

Rs. 72825 * (40 / 100) = 29130

Rs. 72825 + Rs. 29130 = Rs. 101955 The total price after adding the markup is Rs. 101955 for a car. While the total cost for a car is Rs. 72825 per car. In the first year if our promotion strategies are successful the expected sales will be 100000 cars. This means in the first year we will have revenue of Rs. 10195500000 and our costs will be 7282500000. Thus we will earn a profit of Rs. 2913000000.

This is a satisfactory return given that our product will be the first of its kind in the market. This level of profitability has only been possible because of the strong marketing program that has been developed to provide Toyota Carriage with the promotional support that it requires.

27

Control And Evaluation

It is vital to monitor and measure the results of the plan at various different stages. To determine the product launchs success in achieving the objectives of increased awareness and intention to purchase, the following steps will be taken.

1. Closely observe sales and potential customer traffic during the product launch to mark the initial response about the product. 2. A survey should be conducted about whether or not people have heard about the product. If they have heard about it have they made the purchase or not. If they have purchased it did they like the results or not. 3. Have ghost customers ask car dealers questions about the product. In this way any misconception about the product will be removed before they spread too far. 4. Compare the campaign measurement results with the campaign expenditures to determine the success of the overall marketing effort.

28