History of the product within the industry:

Nissan Sunny sedan has a history of being one of the most preferred and sold cars in the industry after Toyota Corolla in Bangladesh. After Pacific Motors limited have launched it in Bangladesh it competed with the other brands like Toyota corolla, Mitsubishi lancer etc. in the same category (1300 c.c.). and in the higher category. Since it’s launching in the local market it has been able to generate a steadily increasing demand until it reached a high sales volume in 1993, although it did not achieve the highest sales volume. After that the sales volume in the local market started to decline due to the shifting customer demand toward reconditioned car up to present times.

History of the product within the firm:

Nissan Datsun was the first product, which was sold by Pacific Motors when it started business in Bangladesh. The model- Nissan Sunny was first introduced in 1982. Since then four versions of the car has been developed. The first model was Nissan Sunny B-11, which existed for five years from 1982-1985. The second model was the model B-12 (from 1986-1990). The next version B-13 was introduced in 1991 and was sold in Bangladesh till 1994. The presently existing model is B-14 it is the improved version of B-13.  After the introduction in 1982 the model Nissan was the most sold car by the firm among its other model. It is learned that about 80% of the sales revenue come from the sale of the Sunny model.

MISSION AND GOALS OF THE FIRM:

A)   Mission Statement:

“We desire to provide our partners in success mobility through safety, luxury, comfort, best fuel-efficiency and above all satisfaction.”

B)   Goal Statements:

1     Awareness of the product has to be increased

Awareness of the product will be increased through correct brand positioning supported by promotion. So far Pacific Motors has done little regard to positioning and promotion of the product.

2    Consequently gain a larger market share through the first goal

3     To add service extension to differentiate our product from the competitors

Due to the intensity of competition in the car market coupled with the sluggish economy of the country it is imperative to differentiate our product from the competitors. This will be achieved through service extension.

4    To incorporate a customer oriented attitude in overall activities of the firm

5     Above all increase profitability.

PRODUCT CATEGORY DEMAND ANALYSIS

Total Market Demand Analysis (for individual consumer)

Geographical Descriptor:

1. Region: Mainly in four metropolitan cities of Bangladesh, especially in Dhaka and Chittagong.
2. City size: 5 to 7 million
3. Climate: Generally hot and humid.
4. Density: Urban

Demographic descriptor:

1. Age:  35+
2. Family size: Normally 3 to 4 persons
3. Family life cycle: Married with children (normally 2)
4. Income: 10 to 15 laks and above
5. Occupation: Generally businessmen, people working in non-governmental organizations; and some foreigners working in various foreign institutions
6. Education: Generally graduate

Psychographic descriptor:

1. Social class: From upper middle class to upper uppers
2. Life style: Normally achievers and opinionated
3. Personality: Gregarious and ambitious

Purchase behavior pattern descriptor:

1. Purchase occasion: Special occasion.
2. Benefit sought: Service, quality, and economy.
3. User status: Regular user.
4. Usage rate: Medium users.
5. Loyalty status: Medium.
6. Attitude toward product: Generally positive.

Total Market Demand Analysis (for institutional customers)

Geographic Descriptors:

1. Region: Mainly in four metropolitan cities of Bangladesh, especially in Dhaka and Chittagong.
2. City size: 5 to 7 million
3. Climate: Generally hot and humid.
4. Density: Urban

Demographic Descriptors:

1. Organization: Government, NGOS, private firms and embassies.
2. Size: Medium to large organizations, which normally employ 50 to 100 and more people.
3. Nationality: There are some foreign diplomatic missions mainly Asian and African.

Psychographic Descriptors:

1. Status: Both profit and non-profit oriented organization.
2. Organization style: Generally formalized. Highly centralized in case of government.

Purchase behavior pattern descriptor:

1. Purchase occasion: Regular and special. For Bangladeshi government the purchase comes generally after the annual budget has been declared. In case of foreign missions purchases are made after 3-4 years.
2. Benefit sought: Quality, service and economy.
3. User status: Regular user.
4. Usage rate: Heavy users.
5. Loyalty Status: Medium.

COMPETITIVE ANALYSIS:

Product similarities with competitors:

1. Engine system: Nissan Sunny Sedan FE (our product) has similar piston displacement which is 1300 cc.
2. Brake: both the front/rear brakes have hydraulic ventilated disc/drum.
3. Fuel capacity: 50 liters.
4. Power steering.
5. Suspension: Strut-type suspension similar with those of MITSUBISHI-EL (1300 c.c.), Honda city (1300 c.c.).
6. Optional fittings: power window, stereo, auto door-lock controls.

Product differences with competitors:

1. Dimensions: Overall length, and height.
2. Impact Safety: Nissan has a very sophisticated impact safety mechanism. Designed with the aid of computers the body of the car is divided into two separate zones: a crushable zone that absorbs the impact of the collision, and a safety zone that acts as a protective shell around the occupants. For greater safety, the doors are also reinforced with side door beams designed to diffuse the force of impact over a wide area.
3. Anti-lock braking system: The brake fluid pressure is electronically adjusted, which ensures a safer braking.
4. High mounted stop lamp: This ensures safety by indicating the driver behind that the brakes are being applied.
5. Engine: The type of engine is 16 valve. Maximum output and maximum torque of the engine.
6. Body color: Range of color.

Competitive edge over the competitors:

1. Fuel Efficiency: Due to 16 valve engine Nissan has high fuel efficiency.
2. 2.   Safety: The safety mechanism in Nissan is very sophisticated as explained above.

STRATEGIES OF THE COMPETITORS:

Product strategies: Both the dealers Navana Limited (Toyota) and Rangs Limited (Mitsubishi) follow the strategy of introducing new model whenever the previous model experiences the decline stage of their life cycle. And this is done very rapidly as consumer taste and preference changes rapidly. Promotion of the brand name is also done extensively by both the firms. After sales service is also offered in order attract customer.

Pricing strategies: Both the firms follow the cost-plus pricing strategy.

Promotion strategies: Their strategy is to maintain and increase their brand image. They give a considerable amount of bribe to government officials to accept their tender. This is a strategy to keep their biggest purchaser always happy. This acts as an informal promotion.

Placement strategies: Their main strategy is to keep a very well trained sales force that would push their product and carry other marketing function to maximize their sales.

STRENGTHS AND WEAKNESSES:

Economic Analysis:

1. GNP at current  market price:- Tk.1623516 million
2. The current GDP Gross domestic product) at current price of our country is TK 1402 billion (US $ 33 billion).
3. Annual per capita GDP is US $ 265.
4. GDP growth rate at constant price 5.7 percent.
5. Industrial growth rate at constant price 3.3 percent.
6. Inflation rate 7 percent.
7. Investment rate 17.4 percent.
8. National savings rate 14.4 percent of GDP.
9. Exports US$ 4.418 billion.

10. Imports US$ 7.255 billion.

11. Consumer price index- 218.68

12. Economic cycle stage: Recession

13. Total population: 125.6 million

14. Urban population: 20% of total population

15. Internal rate of exchange:- US$ 1= TK. 50.60

LEGAL AND POLITICAL ANALYSIS:

Consumer ‘Rights’ Legislation: The current situation holds no strong legislation for the consumers regarding automobiles. The worst possible scenario is that the government will pass strong law to protect the consumer right. Most likely scenario is that it takes time to pass a new law. So the current situation will prevail for sometime.

Regulatory agencies: Currently there is a government controlled regulatory body, which issues registration and look after the fitness of automobiles. The worst possible scenario is that government will create new more powerful regulatory agencies to restrict the number of cars through increased tariffs and quality control. Most likely scenario is that such new regulatory bodies take time to be established.

Current domestic political climate: The current political climate is very unstable. It could turn worse if the political parties do not reach a consensus. Most likely the political parties will reach a consensus very soon.

Potential domestic political impact: Economy is in a sluggish state. It could further worsen due to the political unrest. It will take time to stimulate the economy.

Current international political climate: There has been violence in the recent WTO conference. Nations have not been able to reach a consensus. The worst possible scenario is that nations are unable to reach an agreement. This will continue for some time most likely. The trade war between Japan and United States has subsided for the time being. Worst scenario Japan raises tariff on U.S products followed by similar action from the U.S. Most likely they are to continue the present relationship.

SOCIAL ANALYSIS:

 Cultural values: In our country people hold high values for money and status. This could change and people may hold high values for education and knowledge for the better. Most likely scenario is that people will slowly change their values or never change at all.

Cross-cultural impact: We are being exposed to Indian and western values through satellite channels everyday. This may change our outlook toward Japanese product and shift it to Indian and western products. The young generations are taking the Indian and western cultures.

TECHNOLOGY ANALYSIS:

In Bangladesh there are few institutions associated with automobile. No institution is involved in any sort of research except one. BUET has developed a way to convert petrol run cars to use gas. All other is involved in the assembly of automobiles.

Outside the automobile industry BUET, Dhaka University, and BCSIR often carries out experiment to develop devices to store the sun’s energy.

Foreign countries are actively involved in the research regarding automobiles. Famous MIT is trying to develop an intelligent car, which will have a centrally located microprocessor to control almost every activities of the car. Many other universities, private organizations and the car manufacturers are working relentlessly to develop an ultimate fuel-efficient engine.

Outside the car industry efforts are underway to generate power from cold fusion. This will revolutionize the way we obtain energy. Solar driven cars is being developed to counter the possible energy shortage of the world.

OPPORTUNITY AND THREATS TO THE FIRM (BASED ON EXTERNAL ANAYSIS):-

OPPORTUNITIES:

1. Privatization of transportation: In recent time there has been an increase in cab service. This is a growing business and is likely to grow further. As it grows there will be an increased demand in new cars.

2. Special Occasions: From time to time Bangladesh hosts international events for example the coming NAM summit in 2001. The government purchases cars in large number during such events.

3. Economic development: As the overall economy of the country is improving the standard of living of people and the disposable income will increase. More and more people will purchase cars as a mode of transportation.

4. Environmental issues: Nissan has the best fuel-efficient engine in the market. As people become more aware of a safe unpolluted environment they will look for fuel-efficient cars.

5. Service extension: Through service extension the product can be made more appealing to the consumer. Mobile repairing unit and credit facilities are some service extension.

6.Substitution of petrol: Bangladesh is rich in natural gas. If in future time gas run cars become popular in Bangladesh Pacific Motor has to take the initiatives to respond to the demand by modifying the product effectively and efficiently.

THREATS:

1.   Implementation of GATT: the implementation of GATT agreement in year 2005 will open up the market, as a result this will bring in more competitors from other countries especially from Europe and the United States.

 2.   Political Instability: Due to political instability economic development will be hampered which will in turn affect the purchasing power of the people. This may result in decline in sales.

 3.   Fluctuation of Exchange rate: Due to fluctuation of international exchange rate sometimes it is very difficult to maintain a stable price. Sometimes fluctuation may result in loss for the firm.

 4.   Tougher Government Regulation: If government increases tariff on automobiles this will affect the price. Many people will refrain from buying cars and will wait for a lower price, which will result in decrease in sales.

 5. Competition from reconditioned cars: Bangladesh market is flooded reconditioned cars and they offer almost the same features but at a lower price.

FORECASTING MARKET POTENTIAL:

PRODUCT LIFE CYCLE AND SALES TREND ANALYSIS:

STAGE-3: PLC STAGE-

RATIONALE FOR YOUR JUDGEMENT:

The product is in decline stage of the life cycle as it is experiencing a decline sales trend. The product showed a steady sales growth rate in the early 1990’s. Its sales was highest in 1993 (425 unit) and then the sale volume declined to the present year. In order to counter it introduction of the new model of this brand is a must

GENERAL STRATEGIES OF THE FIRM:

General strategies of the firm:

1)    To develop an organized marketing department in order to carry out the various marketing activities effectively and efficiently.

2) To enhance the image of the firm and the brand name through effective promotion.

Functional area general strategies:

Finance:  To maintain a strong financial base to carry activities of the firm to counter any move from the competitors.

Human Resource Management: To train up a well-groomed sales force in technical and marketing skills and provide them with incentives so that they can stimulate sales.

Marketing: To develop a promotion mix that will be effective in increasing the brand image of the product.

PRODUCT STRATEGIES, ACTION PLANS AND ASSESSMENTS

PRODUCT STRATEGIES, ACTION PLANS AND ASSESSMENTS

Product component descriptions/examples

Planned product modification/changes and the rationale

All of the above product modification has been identified after comparing Sedan FE’s competitors. Since Pacific Motors is the authorized dealer and not the manufacturer it can only inform the manufacturer of the new features and their demand. The cost of such modification is up to the manufacturer.

Apart from the product modifications brought about we like to propose some new additions. Every product has some service components and we like to propose some in case of our product.

1. Provide mobile service unit: This will include a 24 hours mobile service unit which when called upon will go to our customer and try to fix the problem, of course within the city limits. The mobile unit will be equipped to repair problems; otherwise it will refer our customer to our service center if the problem cannot be solved. In Bangladesh till today no one has offered such service.

Rationale: No one has offered such services till now. This will also act as a promotion of Nissan.

1. Provide credit facilities: Pacific Motors can provide credit facilities to cuss. For example due to privatization of the transport sector cab services have appeared in Dhaka. Due to this the demand for new cars has increased. Pacific motors should give credit facilities to such entrepreneurs on easy terms.

Rationale: This will act as a good promotion and help stimulate the sales. It will make away for many people to purchase who cannot pay at once.

1. Increase the number of authorized spare parts dealer: Till now Pacific Motors provides the larger portion of the spare parts available in the market. In the interest of the customers some shops near Magbazar and Banglamotor should be authorized to sell Nissan spare parts.

Rationale: This will promote the Nissan brand name and bring convenience for the end-users.

Anticipated competitors action and reaction due to implementation of our product strategy and action plans:

1)    Competitor may introduce its new model prior to the launching of the firm’s own model.

2)    Competitor can also extend their service offering.

3)    They might decrease their price.

Contingency plan for competitor actions:

1)    To high light the benefits that our product has over the competitor’s product.

2)    Promotional mix should be modified for maximum reach.

3)    To counter price decrease, our price should not be decreased consequently, but service offer and optional fitting addition should be emphasized.

PRICING STRATEGIES, ACTION PLANS AND ASSESMENT

Before stating the pricing strategies of the firm it is necessary to look at how pricing is done in case of automobiles. All the new car dealers in Bangladesh use the cost-plus pricing method. This is due to the fact that dealers are not the manufacturers. So whatever the cost, which include the actual cost of making the car, the shipping cost and the tariff charged by the government, the dealers add certain percentage to it and set the price.

As we develop the pricing strategy for Nissan Sunny Sedan FE we must consider some factors which may have bearing on its price.

1. The recent economic downturn in the Asia Pacific region has affected the car market in this region. Consumers are spending less and less amount of money. So the market for cars has declined considerably. In Bangladesh Nissan Sunny Sedan has lost a significant share of its market.

1. Competition also plays a vital role in the pricing strategy. In recent times Mitsubishi has gained a large portion of the market share with its lower prices. This has made the car market very competitive.

1. The influx of reconditioned cars in Bangladesh has changed the market for new cars. When consumers compare the features of the reconditioned cars with our product they might feel that they are paying more for more or less the same features.

1. There have been a number of international car manufacturers who have setup their own production plants in India. These car manufacturers will be producing cars at lower costs. As a result there will be cars available at lower prices with more or less the same features. For example Honda City.

Pricing Strategy:The general pricing strategy of the firm should be to follow a ‘Going Rate’ strategy with a reasonable profit margin. This will especially be helpful during the economic downturn and will bring Nissan’s price closer to its competitor Mitsubishi. As for the reconditioned cars this price strategy should be supported by effective promotional activities to inform the customers of the benefits of owning a new car.

For institutional buyers Pacific Motors should follow different strategy. Pacific should lower the profit margin for each unit, even if it is lower than the going-rate. Though the profit per unit is low, due to large number of cars purchased by institution the total profit will be substantial.

Action Plan: Review current market sale trend and sale prospect for the next six months. If the sale of product is desirable at the current price and if there are possible expected sales at the same rate then the price should be kept as it is. At the same time promotional activities of the firm should be increased in order to counter any sales decrease. As for institutional buyers, their budget should be reviewed to determine whether they are able to buy at the current price.

Evaluation criteria: Current and forecasted sales.

PRICING STRATEGY AND ACTION PLANS

Pricing Objectives: –

1. Maximize long-term profit.
2. Enhance the image of the firm and its offerings.
3. Growth of the firm.
4. Market share goals (increase).

External environmental influences to be considered when developing the firm’s pricing policy.

THE USUAL TYPE OF INDUSTRY PRICING POLICY WITH EXAMPLES

.

The new automobile car dealers in Bangladesh follow the cost-plus pricing method. This is due to the fact that dealers are not the manufacturers. So whatever the cost, which include the actual cost of making the car, the shipping cost and the tariff charged by the government, the dealers add certain percentage (usually 5% or above) to it and set the price. The dealers usually keep a profit of Tk.50 to 70 thousand after paying all the costs of imports.

For example, Pacific motors ltd. after paying the import duty

Are Prices Bundled or Unbundled:

The price of the product is unbundled i.e. the price of the car only without any optional fittings. If the consumer asks for optional fittings (stereo, power window, headrest, and wheel cap etc.) then the cost of the fittings and the installation cost is added to the car’s price.

The industry speed, frequency and rationale for price changes made in the industry.

The price changes depend on:

1. Exchange rate: the international exchange rate between Japanese yen and American dollar affects the price of Japanese car. So a price increase in Japan usually increase the import cost of cars by the firm and ultimately the firm has to increase its price. The frequency of change depends on the frequency of the change in exchange rate.
2. Government policy: the government policy regarding import of motor vehicle affects the price of motor vehicle. The frequency of this policy change (mainly increase in import duty) usually takes place at the beginning of each national budget period.
3. Technological development: new developments in automobile technology affect the price change. The advent of new technology being incorporated in the firm’s product will increase its price.
4. Price and availability of spare parts: the price and availability of the spare parts often force the firm to increase or decrease its price.

CRITERIA FOR YOUR PLANNED ADJUSTMENTS.

END-USER DISCOUNTS AND ALLOWENCES:

Institutional: – discount on the total bid price.

Individual buyers: – discount on bundled offers.

TIMING AND MAGNITUDE OF THE ADJUSTMENT (S)

The discount for institutional buyers should be announced during the submission of the tender. It should be 2 to 3 % discounts. As for individual  buyers discount on bundled offer should be let known during the sale and should not be more than 2%.

List competitor’s action/reactions you anticipate due to the implementation of your pricing strategy and action plans.

• Service extension.
• Increased promotion
• Bundle offer.

Contingency plan for competitor actions.

• Improve and extension of our service.
• Increase promotion e.g. advertising.
• Increase additional features in our product- offer more optional features.

PLACEMENT STRATEGIES, ACTION PLANS AND ASSESMENT

STRATEGIES (RANK ORDER) AND ACTION PLANS PER STRATEGY  

1. To develop a marketing plan which include forecasting and market intelligence. This important to keep track of the competitors. Action plan is to employ a person who will be given the responsibility of the market intelligence. This post will be separate from the sales force.

1. To train the sales force and management to develop customer oriented attitudes. At present there is not any formal training for the sales force. The action plan is to setup a training program which will put emphasis technical and communicational skills

1. To appoint some authorized spare parts dealer. At present Pacific Motors provide a major portion of the spare parts. Although spare parts are available in spare parts shops around Dhaka.

1. To go into cooperative advertisements with the spare parts retailers. Action plan is to first identify the retailers who already deal with Nissan spare parts and then to develop a promotional plan for them.

PLACEMENT STRATEGIES, ACTION PLANS AND ASSESMENT

PRODUCT PLACEMENT TASKS NEEDED AND ABILITY TO BE PROVIDED BY THIS FIRM AND/OR BY OTHER ORGANIZATION

MANAGEMENT EXPERTISE INDICATOR:

         KNOWLEDGEABLE ABOUT END-USERS: Since there is not an organized marketing department the management has a moderate idea of the end-users.

SALES FORCE PROFESSIONALISM:

         TRANING AND RETRAINING: There is some technical training program for sales force. Some of the sales person are sent abroad to attend international automobile shows based on their performance at home.

          ASSITANCE PROVIDED TO RETAIL CUSTOMERS: Current sales force provides information about the product during purchase- mainly about the major features of the product, but lack insight.

PROMOTION CAMPAIGN PLAN:

Specify the overall theme of your promotion campaign

The firm is customer oriented because our product provides the benefits such as luxury, comfort, economy and safety desired by the end-users and also we care for the customer after purchase.

PROMOTION CAMPAIGN PLAN:

Objective task method

PROMOTION CAMPAIGN PLAN:

Annual schedule of activities:

1. 1.   Individual market: There is no particular pattern of sales in the individual automobile consumer market. Therefore promotion campaign should be scheduled all the year round. Advertisements in widely read magazines should be given as a constantly reminder, and monthly advertisements in national dailies.

1. 2.   Institutional market: institutional buyer usually make the purchase just before and after the national budget because the funds are allocated to the institution (mainly in governments institution) after the budget, and this fund has to be spent before the end of this budget period. So promotion activities have to be directed to these institution in the second and third quarter of the budget year.

PROMOTION CAMPAIGN PLAN:

End-users

Sales persons/spare parts distributor or seller

Public relational activities:

Publicity

1. News release:

a)    Product: Introduction of new model through a launching ceremony.

b)   Company: Sponsorship of any social events such as Environment cleaning program.

c)    Personnel: Member of the firm traveling abroad for training on latest automobile technology.

1. News worthy events

Special events and participation:

1)    Sponsored vents

1. Games: Games such as tennis, soccer etc.

2. Automobile shows: Till this day there has not been a automobile show held in Bangladesh. This will help to promote the brand name.