Honda Atlas Marketing Plan

Pursuit of excellence, delivering high values to our customers offering them product with modern technology

Launching new Honda Pro-125 cc

Letter of Transmittal

Mr. Sohail Karman, May 29, 2015

Professor of Principle of Marketing

Visiting faculty, Ripha Int’l University

Rawalpindi

Subject: Submission of Final Assignment of Marketing

It is to certify that this Marketing Plan for launching new motorcycle “Pro 125” of Atlas Honda Ltd., Pakistan (AHL) taken as a final project of our Principle of Marketing MBA Course. This is solely work of our group members with details/citation attached to this plan.

Attached details are some past studies and news events, which helped us to combine all results together in this report and analyze our market before launching new product.

You can review survey and annexure of this marketing report to check our cited details and AHL objective from this new launch.

Thanks,

Submitted by

Haroon Ahmed CMS# 15404

Babar Bashir CSM# 15421

Bazgha Waqar CMS# 15579

Urooj Nisar CMS# 15607

Executive MBA

Ripha International University, Islamabad

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Table of Content

I. Executive Summary 03II. Introduction

a. Atlas Honda Overview 04b. Mission/Vision 05c. Group Organization Chart 06

III. Market Overview a. Global motorcycle Industry trend 07b. Pakistani Motorcycle Industry 08c. Automobile Industry in Pakistan 10d. Market Leader/Market Share 11e. Market Size Analysis 12

IV. SWOT Analysis 14V. PEST Analysis 16

VI. Customer Analysis 17VII. Marketing Objective and Strategies

a. Objective 18b. Characteristics of Product 18c. Market Potential 18d. Market Segmentation, Targeting and Positioning 19

VIII. Marketing Mix Strategy a. Product 21b. Price 27c. Promotion 28d. Place 31

IX. Implementation of Promotional Plan 34X. Objective of Promotional Activities 34

XI. Measurement Review and Control 35XII. References 36

XIII. Pro-forma Questionnaire 37XIV. Annexure Detail 39

a. Annex Ab. Annex Bc. Annex C

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Executive Summary

It’s very exciting to announce that Atlas Honda Ltd. Pakistan step in to new era of brining better technology for its customers. This in status quo a requirement to review existing products and market trend then capture share which is expected to be potential loss due current market conditions.

In this report first section overall talks about emerging changes in motorcycle industry and how local producers approved under PAMA being challenged. Atlas Honda with high share still pursues to bring innovation and save its interest in market.

We have shared PAMA statistical information and USAID survey on our industry to measure and analyze potential in our motorcycle industry also we did review Atlas Honda’s Annual report to review strategic goals to link those with SWOT/PEST Analysis in our report.

Customers are analyzed based on our survey, which results are attached in this report and on customer analysis basis we have launched new features of Pro-125 Honda.

Marketing Mix strategy will help reader to review existing product, pricing, placement and promotion also we have made new product promotional plan. Promotion Plan review and monitor will be spread over a 12 month period.

Atlas Honda Ltd., aim high in brining Hi-Technology with local labor to reduce cost. This will enable AHL to create jobs and reduced lesser price motorcycle to deliver.

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ATLAS HONDA Ltd. OVERVIEW [1]

Atlas Honda Ltd. (hereafter AHL) is joint venture between the Atlas Group and Honda Motor Co. Ltd., Japan. This company was created as a result of merger between Panjdarya Ltd. and Atlas Autos Ltd. in 1988, whereas both companies were established by Atlas Group.

AHL manufactures and markets Honda motorcycles in collaboration with Honda Motor Company. Few in-house partnerships with leading parts manufacturers like Showa Atsumitech, Nippon Denso and Toyo Denso are worth mentioning here and these partnerships are for Hi-tech components utilization.

Having said leading hi-tech and delivered in collaboration with external well-known firm Honda motorcycles are by far the largest selling motorcycles in the country with an unmatched reputation for high quality, reliability and after-sales-service.

AHL has undertaken to develop local manufacturing capabilities to the highest, economically feasible level. While a major role in localization has been assigned to vendor industries, Atlas has the country’s largest in-house manufacturing capability at its Karachi and Sheikhupura plants.

State of the Art technology used to support the production facilities, the company has established a Research and Development (R&D) wing and tool making facilities through CAD/CAM, which are growing rapidly in size and function as the company expands.

Joint Venture Expansions and Optimization of Research Practice

It’s worth mentioning here that Atlas has managed to execute 12 Joint Venture/Technical Assistance Agreements between local vendors and foreign manufacturers for transfer of technology. Besides, Atlas has directly executed 9 Joint Venture/Technical Assistance Agreements other than Honda.

AHL management is striving to modernize company operations by adapting applicable aspects of research and theory and more specifically, Honda’s unique philosophy of hard/soft technologies to the realities of Pakistani conditions. Company management structure, systems and processes are changed according to the demands of the customer, growth and new technology. Efforts are being made to develop participation at all levels of personnel in decision-making and a substantial and effective delegation has been established at levels where applicable. Various participation programs such as Ala Mayar Quality Circles movement, launched in 1985, are strongly encouraged to allow constructive self-expression and teamwork. The Company training and development programs encourage all members to develop themselves and contribute to their full potential.

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AHL is playing a pioneering role in creating conditions for easy and confident use of motorcycles all over the country. A vast and growing network of over 1600 sales service and spare parts dealers has been established. In order to back up this system, Atlas has set up Warranty & Training Centers (WTC) in Karachi and Lahore which provide several courses of varying duration and complexity for motorcycle mechanics and users each year. Mobile training facilities take the latest know-how, technology and maintenance of motorcycles to major rural and urban centers around the country.

VISION & MISSION

Vision

Market leader in the motorcycle Industry in emerging global competitive center of production and exports.

Mission

A dynamic growth oriented company through market leadership, excellence in quality and service and maximizing export, ensuring attractive returns to equity holders, rewarding associates according to their ability and performance, fostering a network of engineers and researchers ensuing unique contribution to the development of the industry, customer satisfaction and protection of the environment by producing emission friendly green products as a good corporate citizen fulfilling its social responsibilities in all respects.

Quality Policy

Commitment to provide high quality motorcycles & parts Right work in first attempt and on time Maintain and continuously improve quality Training of manpower and acquisition of latest technology Safe, clean and healthy environment Market leadership and prosperity for all

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Membership of Industry & Associations [2]

Pakistan Automotive Manufacturers Association. Marketing Association of Pakistan. Management Association of Pakistan. Lahore, Karachi and Overseas Chamber of Commerce & Industry. Sheikhupura Chamber of Commerce & Industry.

Group Organization Chart

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Market Overview

This section of report will enable us to understand industry production and sales capacity inside our local market which will measure size and additionally market share report and penetration of other producers challenging local market and trends and capturing market with enhanced features of motorcycles.

GLOBAL MARKET TREND [11]

Global motorcycle production increased from 30 million units in 2004 to 40 million units in 2005 with China alone producing 17 million units. The second largest producer was India with 7.7 million units while Pakistan came at number seven with a production of 751,000 motorcycles or about 2% of the global total.

The World market for motorcycles is dominated by the Japanese brands, namely Honda, Suzuki, Yamaha and Kawasaki. Although Japan itself produced only 700,000 motorcycles, its brands with strong presence in the Low Cost Countries (LCC) like China, India, Indonesia, Thailand etc., control 50% of the world market. This is also part our PEST Analysis, which we will discuss later in this report.

Even in China where the local Chinese brands control more than two thirds of the market, the basic designs are still modeled round the popular Japanese models. Indian companies like Hero Honda and TVS rely heavily on their Japanese partners for basic designs and model innovations. This is perhaps because of the fact that R&D for the industry is both expensive and time consuming. The Japanese manufacturers named above have both the financial muscle as well as the technical capability to undertake the required R&D.

Honda’s commitment to invest more in significant sized motorcycle market [3]

Pakistan will be among Top-5 Producers of Motorcycle; this was claimed in 2012 by Senior Managing Director of Honda Motor Company Japan. At that time Honda increased its production capacity with investment of 35 million more to flourish existing Motorcycles industry among other challengers to take competitive advantage of market leadership and deliver more for to keep capturing market share of 83%. This trend from global and Pakistani industry reflects how Atlas Honda being challenged and strategy of Honda to maintain growth share.

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Pakistani Industry Trends

In Pakistan, motorcycle assembly started in 1964 when the local Atlas Group started assembling Honda motorcycles in Karachi. Currently in addition to Honda, the other Japanese brands being manufactured in Pakistan include Yamaha and Suzuki. The most successful design among the Japanese brands has been the Honda 70CC which enjoys tremendous popularity on account of its fuel economy, resale and low maintenance features, which we will further explore in SWOT Analysis.

The Pakistan Automotive Manufacturers Association (PAMA) was formed in 1984. Initially three motorcycle OEMs namely Atlas Honda, Dawood Yamaha and Suzuki Motorcycles Pakistan became PAMA members. The other founding members of PAMA were OEMs manufacturing Passenger Cars, Tractors, Light Commercial Vehicles (LCV’s), Truck & Bus manufacturers etc. In the 1990’s, three more OEMs joined PAMA, these were Fateh Motors, Pakistan Cycle Industrial Cooperative Society Limited and Siagol QINGQI Motors Ltd (subsequently renamed QINGQI Motors Ltd.).

The Non-Japanese OEMs entered the Pakistani market in the late 1990’s by introducing clones of the popular Honda 70CC motorcycle using critical parts and components imported from China. For the basic frame and other low tech parts they used the local vendors (part suppliers) whose development had been facilitated by the Government of Pakistan’s indigenization / localization programs for the motorcycle industry. Other than the original 3 Non-Japanese OEMs who became PAMA members, the new entrants preferred to form their own trade bodies and as such are referred to in this study as Non-PAMA members.

Presently there are 43 OEMs producing various brands of motorcycles. Out of these 6 are PAMA members and the remaining 37 Non-PAMA members. The Engineering Development Board (EDB) issues licenses to the OEMs for undertaking assembly operations. The Pakistan Standards & Quality Control Authority (PSQCA) is responsible for monitoring the production of quality products by the OEMs. As such both the EDB and the PSQCA play an important role in the establishment, licensing and monitoring of the technical operations of the motorcycle assemblers.

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Pakistan is challenged by local producers and country like China and India with fast paced growing motorcycle industry, there is very lenient policy for importing those motorcycles and issuance of business establishing prospects.

Per capita income is very important for the development of the automotive industry as it makes the automotive sector more competitive when the economic situation is not so good. High economic growth increases the living standard of people, which creates more demand for higher end vehicles like cars. In Pakistan gross domestic product per capita stood at $1,290 (bureau of statistics), which is much lower as compared to the developed nations. The shift from motorcycles to cars in Pakistani market will start becoming visible when per capita income will touch $3,000 to $4,000 marks. At that stage the motorcycle market will also shift from a necessity market somewhat a pleasure or sports oriented market. This transformation will start bringing in higher cc motorcycles into Pakistani market. [9]

Data published [8] in 2013 shows that Pakistan motorcycle market is growing at the rate of 15% annually. This is a good stagnant growth visualized the importance of presence of the local assemblers. Their role is appreciable, starting with raw hand “unorganized way” and changed the scenario into “organized industry”. When we see few years back Atlas Honda was selling 100,000 bikes a year, now in present scenario top five local assemblers are selling more than hundred thousand bikes an year with the comparable and acceptable technology.

The industry specialist visualizing that in coming years the advance technologies will also introduce on fast track in the country. As usual the major technology inventors would be the Japanese companies (JVs); Honda, Yamaha and Suzuki and the same will be followed by the local assemblers with Chinese collaborations. Here we have a proved example of India; the local players are as strong as the Japanese companies. Although we know that India has 6 times bigger motorcycle market as compared to us and their local companies have enough revenue for spending on the research and development and they are heartedly doing this activity with the world over collaborations. As a whole Pakistan motorcycle market has a clear bright future and it is foreseen that some more serious assembler cum manufacturers will join this industry with new technologies.

Pakistan motorcycle market has so far 3 type of buyers; (forget about failure intra transport systems) the best thing is local assemblers they are really appreciated in contributing the small budget bikes.

- Needy with small budget; - Needy with appropriate budget; - Leisure with high end budget.

The needy with small budgets are 60% and that are hit to local bikes. The needy but with the appropriate budget are 38%, go for Japanese JV bikes starting from 70,000/- and 2% buying are high end and for leisure. That is why we see the 84% selling bike is 70cc, 11% is 125cc and very

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unfortunate only 5% is 100cc. So we need good products in 100cc, rest assure it would be accepted.

In future we will continue to write various topics of marketing and sales, finance, management and HR and also the importance of planning in a business, the application will defiantly help in making good to best business practices.

We will review first Pakistan’s automobile industry and capacity of Production and potential Sales figure from each of listed member of association; also we will relate these with our market leader AHL Share, Size and Trend.

Automobile Industry of Pakistan [4]

Study of Year 2012 reflects that the existing population of automotive vehicles in Pakistan is 3.9 million. The annual demand is estimated at 300,000, two thirds of which is being met from local sources and imports and the remaining one third is left unmet. The market value of automotive vehicles in dollar terms is estimated at more than 1 billion, out of which import constitutes

around US$ 200 million. The aftermarket of auto parts is estimated at US$ 500 million, imports and local production taken together.

Pakistan’s strength of production elements lies in its vast reservoir of land, labor and even capital. But technology and purchasing power of the consumers are its major weaknesses. Technology requirements are being met by joint ventures and technology tie-ups with foreign players in automotive sector. Japanese, Korean and European entrepreneurs have invested almost US$ 1.5 billion in Pakistan’s automotive sector. The local investment in the automotive sector is approximately US$ 1 billion.

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Market Leader Atlas Honda Ltd. and it’s Market Share

The motorcycle industry in Pakistan has recorded strong growth over the past decade, mainly due to increased urbanization and induction of many new players in the market who are manufacturing and providing motorbikes at much cheaper prices, but nobody has been able to beat the market leader, Atlas Honda.

Despite tough competition, Atlas Honda, a sister concern of Atlas group of companies, enjoys the lead in its 70cc and 125cc segment. Although the company faced lesser sales initially after other companies entered the two-wheeler market, the cheaper bikes helped Atlas Honda to once again boost its sales graph. We will review 70cc market segmentation further in Segmentation but this remained strong Cash-Generating Product so far.

The company, which has invested to expand its production capacity up to 500,000 units in Year-2013, is now planning to further expand its premises adjacent to the Sheikhupura factory, but this time for painting spares and accommodating the products of vendors, who are doing business with the company worth Rs20 billion annually. Present market share earlier said is of YoY 524,935 units and 2013-14 financial year they have produced 639,066 units and sold 639,499 units which is record high percentage among leading other manufacturers.

“In the last decade, the motorcycle industry of Pakistan posted a solid growth of 35%, in which 70cc bikes accounted for 80% of the total bikes produced,” said Afaq Ahmad, General Manager Research and Development Atlas Honda, while talking to a group of journalists who visited the company’s production plant at Sheikhupura.

According to Ahmad, the company produced one million bikes since its inauguration in 1962 to 2002.

According to Ahmad, the market share of 70cc bikes is shrinking and demand for more powerful bikes is on the rise mainly due to the interest of younger generation in powerful bikes coupled with rising demand from urban cities. Atlas Honda is still a major market player, currently enjoying 47% of the market share in all categories due to induction of Japanese technology. [7]

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Production and Sales according to Pakistan Automotive Manufacturers Association   (PAMA) [5]

According to Sales and Production report Year 2013-14 from member association of Pakistan Automobile Manufacturing Association our recently market share reflects that Honda is having 83% of overall market share [Annex-A] From same source it’s found that Year-over-Year Sales and Production both standing 85% in motorcycle industry.

Companies Production Sales

Honda 639066 639499

DYL Motorcycles 11842 12138

Suzuki 24501 24356

Sohrab 5305 4817

Sohrab Triwheeler 900 900

Qingqi 26727 26322

Hero 11525 11511

Ravi 21848 22425

Sazgar 13414 13107

Habib 16379 16971

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- QINGQI and Suzuki with just 3% of market share each. - DYL Motorcycles and Habib have 2% market share each.- Competitor in gaining rest of market share is from few China manufactured motorcycles

and other Non-PAMA listed/associated manufacturers, we will further explore this competition is SWOT analysis of this market plan

- Around 69 different manufacturers in Pakistan overall compared all together. Honda

standing on the Top amongst all those competitors. United with 215,897 units produced

chasing Honda, Super Power standing 3rd in production with 2013-14 production of

114,158 units. [10]

AHL is being challenged by Yamaha mostly in terms of overall market share but with recent

news they will be more focusing in Pakistani market as they remained a little bit out from

competitive market. As a plan of bringing themselves back in this industry of Pakistani

motorcycle, they are aiming to Produce 400,000 units annual by 2020. [6]

SWOT ANALYSIS [12]

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Strengths:

Biggest sale network and market share State of the art production plant in Karachi & Sheikhupura Healthy financial position in terms of Profitability and

Earning Per share Debt Free financed projects due sound Profitability Qualified and well trained staff also Lahore and Karachi well

equipped training centers High Quality & People Trusted Products ISO Certified Good resale value of all its products Customer Care Customized products Brand Image Easy availability of Spare parts Best delivery system of products e.g. (Transportations)

Weaknesses

Commodity price volatility and exchange rate fluctuation Volatile Export market Political instability Limited availability of credit to final customers Less overhead rates of competitors Increasing Prices of Oil

Opportunities

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Industry expansion Technology upgrading Strong Position Rising demand Emerging youth population

Installment programs

Newly developed Areas/Markets (e.g. Gawader)

Favorable govt. policies

Big Market

Economy is expanding

Threats

Chinese cheaper products challenges Free Trade & WTO Strong competition from competitors Instability of Government High rate of Taxation Constant devaluation of Pak Rupee against foreign

currencies Continue high inflation affecting customer purchasing

power

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PEST ANALYSIS

In such a competitive environment where technological improvements are on its peak and most of massive producers of motorcycle making new technology at cheaper in price and more attractive in terms of quality and reliability.

It’s also very much directly linked with earlier shared study of USAID that less per capita income of country reflects lesser or cheaper transport being used by people of that country, more per capita will urge them to buy more expensive rides and also companies to segment those countries with expensive products.

- POLITICAL

Since motorbike industry is emerging industry and significant percentage of total economy depends upon Atlas Honda Industry. Government should always make favorable policies for the company. So its demand is upwards and it keeps challenging other new entering firms of motorcycle manufacturing. Also it should be necessary to have PAMA membership as Atlas Honda is already member. Hi-tech JV will remain in country as long as political and trade agreements being flourished.

- ECONOMIC

As per study conducted by USAID, our country majority population can only afford motorcycle in Rural and Urban. This is because of low per capita income of under developed nation but somehow demand of certain new featured product is primarily relevant to taste and fashion or depending on buying power too, which in our case youngsters are admiring our new featured bikes regardless of price being considered as prime factor.

- SOCIAL

Atlas Honda Ltd has focused youngsters as well as people with low income perfectly by offering them stylish and economically better vehicles. Reliability and after sale of product is important, which socially become word of mouth and Atlas Honda has proven to be good partner for this.

- TECNOLOGICAL

All new companies are bringing in new technology and Atlas Honda is competing with those manufacturers’ by continuously making changes into product and brining new functions and features to fascinate it’s users to keep capturing existing big market share.

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CUSTOMER Analysis

As a part of our research, we surveyed on social media and also in our surrounding with open opportunity to give answer to questions available in Questionnaire section of this report.

We were focused to understand our customers existing needs being satisfied by Atlas Honda Ltd. and other competitors. Also we pursued towards what they need more or felt deprived of which we can deliver them in shape of our new product which here is “Pro 125”.

Graphical presentation of survey attached in Annex-B

- Most of motorcycles users from Age Bracket 26-35 years.- Our majority respondents were from urban area but we found this is significantly popular

ride in rural areas too as they use to travel from rural areas to other small nearest rural areas for job, study visit or business purpose.

- Users of motorcycle are either students with less concerned about Price of motorcycle but need better function and stylish design which can appeal them a lot. Other users of our motorcycle are working professionals with little extensive use or daily travel is comparatively higher than others and need economical ride.

- Majority of our respondent use to ride between travel bracket of 21 km to 45 km, which reflects if they are using our cash generating motorcycle (CD 70) then they are consuming < 7 liters of fuel weekly whereas if they are using high power engine like Deluxe 125 then this most probably would be more than 15 liters of fuel.

- Majority people opted for new features in our product and users of existing product are mid-range income which is 50,000 PKR. They according to their taste can opt for new feature motorcycle as Price is not impacting them a lot if competitive features are delivered.

- Honda stayed on the top and this in fact proving our market share and challengers are mostly in today’s market are

o Urban Yamaha, Suzuki

o Rural its mostly China and local manufacturer’s

- Our Cash Cow CD 70 is mostly used ride and also widely being used in both rural and urban by users of this ride who travels in middle bracket of our survey.

- New features admired from our survey will be discussed in Objective and Strategy section later in this report with plan what we are focusing and what we will still leave.

- Overall surveys results reflect that we can launch our new product with features enabling them not switch other competitors and analysis of overall satisfaction is favorable in return. Find out more details in Annex-B at the end of this report.

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Marketing Objective and Strategies

As a part of our vision and mission to serve our customers best, Atlas Honda Limited establishes strategic goals for its long-term relationship with existing and prospects customers and delivering Quality product.

Setting Marketing Objective

Grow market share and retain market leader status Sales growth with new feature offered Innovative Product Awareness among existing and prospects

Characteristics of Product

With an extensive study and survey we conducted. We are proudly announcing new features of Honda Pro-125.

Self Starter Tubeless Tyre and Alloy rim Multi-function Digital instrument cluster with Trip, Gear and Fuel Display Ergonomic Seat Water proof Utility box for valuables with 2x USB charging ports Built-in Tracking System Wind-screen detachable Fog Light and Auto-adjustable beam of headlight

Market Potential

Here in our existing motorcycle market, where new producers are bringing in lot functions, we will gain attention of our customers a lot with high market share and new features.

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- Our recent 5 gear first Pakistan based manufactured bike admired a lot because several non-local producers were offering this in their product.

- Likewise, we have now offered few features those are very common and low cost available in China produced bikes but country’s own produced bike won’t have those functions. This potential is there which Atlas Honda can get benefited.

Market Segmentation, Targeted and Positioning

This new product is segmented to users of motorcycle, who actually seek variety and quality

with enhanced features “Behavioral Data” will segment variable in this case as buyers have

different behaviors and preferences over needs/desire they want to get answered/satisfied from

our offered product. [Annex-C]

- From demographic variable point of view, youngsters need a more comfortable start

rather than old kick start bikes, as our competitors were offering and we have seen a huge

percentage of response for this. Self starter now would be challenging for all other local

producers mainly but now China producers are not the only producer offering this

differentiating feature.

- More stylish and appealing Alloy rims with Tubeless Tyre have its own feature from

Social and Reliability front.

o Alloy rim not only look dashing but also any sort of cloth will not roped inside it.

This has been seen major accidental reason in Pakistan where Dupata being roped

inside rim and causes serious injury/life loss. To better function our mudguard

design is slightly changed with new dynamics which will enable this function

working perfectly fine.

o Tubeless Tyre is being segmented in market of those users who travel more like

21-45 km daily and tired of Tyre puncture hazards causing delays to their work.

- Our targeted users who prefer China and local produced bike because they introduce

small function like Water resistant box, USB ports and Digital meter which actually not

adding much cost but differentiating product from other.

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We have taken certain features out of our consideration this year but our few upcoming versions

would definitely focus on those features, which our users have admired like bringing in

EFI

GPS Navigation

ABS Breaks

Bigger Engine

Our new motorcycle likewise our existing product would be available to all our Sales centers.

This time, we are positioning this motorcycle more for bigger cities like Lahore, Karachi,

Peshawar and Rawalpindi/Islamabad as this will be little high in cost compared to Deluxe 125.

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Marketing mix strategy

T h e   m a r k e t i n g   t e a m   r i g h t l y   t a k e s p r i de i n a ch i ev ing an a l l t ime h igh s a l e s . The r ea l a ch i evemen t o f t he company has been in shouldering its responsibility as the market leader in the growth of the total motorcycle i n d u s t r y .   A t l a s   H o n d a   h a s   t a k e n some tough decisions in enhancing t he t o t a l cu s tomer ba se a s we l l a s dealing with the threat of the less organized sector. On the achievement of the landmark, Atlas Honda with the support of its large supplier network readjusted its prices to pass on the benefit to  its customers.

Product

Maintaining a global viewpoint, we are dedicated to supplying products of the highest quality yet at a reasonable price for worldwide customer satisfaction. During the year 2006, the company launched new models. In the 125cc segment Honda CG-125 Deluxe was launched. Modern styling, added power and a disk brake function have made it the choice purchase for a selected segment that was looking for added value in the existing popular CG-125. In addition to this, the regular CG 125 also underwent a Minor Model Change (MMC) which proved to be huge success. A 53 growth in sales on year to year basis in the 125 cc category is a testament to the success of the new model and the CG-125 MMC. The MMC has been a major success and Honda CD-70 is the best selling motorcycle in the market with sales of over 300,000 annually. A 25 % increase to last year is a measure of popularity of this model.

Variety

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CBR SERIES HEAVY BIKE…!

HONDA CD 70 HONDA CD 100 HONDA CG 125

Quality

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Design

Honda launched different design for each bike:o Honda CD 70

o Honda CG 125

o Honda CD 100

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Features

HONDA CD 70

Honda CD 70 is the No. 1 choice in motorcycles. In addition to its established superiority in terms of great speed and fuel economy, the Honda CD 70 is presented with special features;

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Advance Japanese technology along with beautiful design- 3 years engine warranty and New eye catching graphics style- Aerodynamic shape - New Design Seat and Rear Cowl - Petrol Tank with 9 Liter Capacity - Latest Switch Assembly (controlled with left hand)- Strong Side Cover with Lock - Non-asbestos Eco-friendly Brakes- Super economy power - Smoke-free 4-Stroke engine - High resale value - Excellent petrol average makes - Easily available spare parts

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Honda CG 125

Honda CG 125 is the ideal combination of elegance and power. Its speed and performance symbolizes the true essence of modern life. It has following features;

- 125 cc 4-stroke engine - 11-Horse Power - Low fuel consumption. - CDI Ignition System - 12-volt battery (instead of 6-volt). - Brighter Headlight and indicators - Euro II engine power- Elegant Front Light & New shape for back light- Stylish Speedometer with Economy Zone- Ideal for

o High speed

o Long runs

o Rough pathways.

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HONDA CD 100

Honda Motorcycles are defined by Quality, Performance, Speed, Economy Petrol and Re-sale Value. All these have managed to successfully bag your trust on the New Honda CD100.

It is a stunning result of advanced Japanese technology and right up there as an outstanding performer representing all the qualities that make Honda motorcycles so special.

- Engine 4-Stroke OHV air-cooled single cylinder- Eco-no power 4-stroke engine- Transmission 4-speed constant mesh- Final Drive Roller Chain- Fuel tank capacity 9.7 liters (reserve 1.5 liters)

- 65 KM in 1L. Fuel Efficiency- Modern value added design fuel cock- New carburetor, immediate start with stable idling and optimum acceleration- Fuel gauge indicator

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Honda Deluxe 125

- Blending the Euro II technology- Graphics-matching petrol tank and Eco-friendly- Side cover and rear cowl- RPM display plus fuel gauge indicator installed in speedometer- Low carbon exhausting 125cc bike comes with 4-stroke OHV engine- 5-speed manual transmission- 160km/h top speed and Services

Price

PRICE Analysis of Honda and its close largest competitor Atlas Honda products are well known due to its quality and reliability. Company commitment is not to just sale products for profits but quality which enables us to win the confidents of people and customer satisfaction.

Following are our prices of our products.

Sr. No BRAND CC PRICE HONDA (RS) PRICE YAMAHA (RS)

1 CD 70 63,500 48,5002 CD 100 84,000 72,500-640003 CG 125 102,000 950004 CBR 500 1,250,000 N/A

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Promotion

The company focuses on its promotion campaign very seriously. There are several internal and external programs to increase its sale. INTERNAL PROGRAMS

Service Development Department The company has made Service Development Department, which is responsible for the co-ordination with dealers and training of mechanics. Department conducts massive campaigns to familiarize and train the service and sales dealers about the technical features of new models. In 2006, there were different training programs. These attended by 931 Service dealers, 80 Antenna dealers and 3650 Honda 4 stroke mechanics. Moreover, 296 sales dealer’s staff and 85 Marketing staff of AHI were familiarized with the features of new models. The company is mostly using push strategy to promote its motorcycles.

As CD-100 is their new product to promote it they force the dealers to keep a CD-100 bike with them so that when customers come they offer him to try the new bike.

The company is offering package to dealers that for every ’x’ bikes of CD 70 or CG 125 you have to take “y” bikes of CD 100. This also forces the dealers to try to sell this new product.

Dealer Promotion For the promotion of its dealers the company arranges meetings and buffet dinners. One promotion activity was held on 27th of April 2006 in Mughal-e-Azam near university campus.

Technicians Training For the promotion of its products the company has trained 7000 mechanics. These mechanics are not only providing repairing services to the people but also publicize the products of company by word of mouth.

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EXTERNAL PROGRAMSHonda Company organizes different types of promotion activities, some of them are following; For the promotion of its products the company arranges rallies.

Advertising Print media The company is giving different types of commercials on different print periodicals.

Some are following;

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Personal selling, Sales promotion and Public relations

PLACE

Atlas Honda has developed Pakistan’s largest after sale services network. The company has made its 1 to 5 S dealers throughout the country. These 5S stands for

Sales

Services

Spare Parts

Second Hand Exchange

Special Sales (credit)

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According to the company these are not the simple selling points but these are the complete HONDA Company. The company has made Dealer Development Department, which is responsible for the co-ordination with dealers and training of mechanics. The year 2006 saw improvement in almost all the major marketing areas. The 5‘S’ dealer network was further expanded dealers have upgraded their dealerships to a modern, global standard. The resultant image enhancement in the eyes of the public has generated more customers for the company. The effective media promotion has made your company and its products household names. The recall value of the promotion has been rated as one of the highest ever. This policy has further cemented the value of the product and a greater number of first time users are now Atlas Honda customers.

Channels Coverage

Atlas Honda has Pakistan’s biggest sales network. The company focused all over the Pakistan, they sale their products by their authorized dealers.

Delivery System Since Honda Company established, company has given the contract to Saleem Raza Goods Transports Co. for delivering their products to their sales points. They have very good relation with the company and they are contributing their best in growth of company.

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LocationsSHEKHUPURA PLANT

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The company was created by the merge of Panjdarya Limited and Atlas Autos Ltd. in 1988. Both these motorcycle manufacturing concerns were established by the Atlas Group. Atlas Honda Limited manufactures and markets Honda motorcycles in collaboration with Honda Motor Company. The Company also manufactures various hi-tech components in-house in collaboration with leading parts manufacturers like Showa, Atsumitech, Nippon Denso and Toyo Denso. Honda motorcycles are by far the largest selling motorcycles in the country with an unmatched reputation for high quality, reliability and after-sales-service.

KARACHI PLANT

Atlas has undertaken to develop local manufacturing capabilities to the highest, economically feasible level. While a major role in localization has been assigned to

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vendor industries, Atlas has the country’s largest in-house manufacturing capability at its Karachi and Sheikhupura plants. To support the production facilities, the company has established an R&D wing and tool making facilities through CDA & CAM, which are growing rapidly in size and function as the company expands. Atlas has managed to execute 14 Joint Venture/Technical Assistance Agreements between local vendors and foreign manufacturers for transfer of technology. Atlas Honda is playing a pioneering role in creating conditions for easy and confident use of motorcycles all over the country. A vast and growing network of over 1600 motorcycles sales service and spare parts dealers has been established. In order to back up this system, Atlas has set up Technical Training Centers in Karachi and Lahore, which provide several courses of varying duration and complexity for motorcycle mechanics and users each year. Mobile training facilities take the latest know-how, technology and maintenance of motorcycles to major rural and urban centers around the country.

TransportationSince Honda Company established, company has given the contract to Saleem Raza Goods Transports Co. for delivering their products to their sales points. They have very good relation with the company and they are contributing their best in growth of company.

Implementation of Promotional Plan

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As a part of our marketing promotional plan, we will utilize certain well-known channels to reach out our existing and potential customers. Overall Marketing Promotional Plan for “Pro-125 Honda” will comprise of 1 Year time frame and different intervals to measure linked Key Performance Indicators and smooth execution of plan.

Promotional Plan for Year-2015-16

Annex-D includes all details, which I’m summarizing here.

- Electronic Media which is fastest way to communicating message and majority of country’s population widely using this medium. We will have TV commercial running in different timing on different channels.

- We in order to deliver best to our customers always prefer to maintain good relationships with our Dealers and our strong delivery network is primarily factor of our success. We will set sales target for them and in return as always rewards are there for high achievers in today’s performance based philosophy.

- Billboards, Promotions in big shopping malls in collaboration with other vendors and Social media which will remain consistent throughout year with following;

o Promotion of this new Pro-125

o Concept for next and what we can add in this Pro-125 more and this will remind

our customers about us

Objectives of each promotional activity

As said earlier, we will have linked performance goals to each activity and successful execution of promotional activity will have directly linked whether we met our objectives or not.

- Awareness among customers that Honda also delivering new Technology- Brand awareness that Honda Pro-125 is Product Width of existing line, which enabling

them all targeted teenagers affording business or working class to deliver Quality tech which most of our competitors are giving them

- Encourage existing users to shift demand from traditional Honda 125 and Deluxe to this new shape enhanced tech motorcycle so that Atlas Honda can lead Pakistani market towards new era of stylish bikes which look like replica of Heavy bikes.

- Increase sales and targeting customers, which we have loose due to few China and other local manufacturers’ intervention in market.

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Measurement review and control

Review and measurement is closely related to what we set to achieve. We will actively measure followings;

- Customer Satisfaction o Regular Survey from customers on PAKWHEEL.com and other social media

websites used for motorcycle sale/purchase o Regular Market Research about our launched product while personal selling or

selling at our designated sales/dealers center. o Direct dial up free number would be available for all our customers to deliver us

feedback and complaint registration- Quality

o According PSQCA deliver all technology and keep measuring pros and cons of

product delivered - Sales/Revenue Growth

o Regular, which is monthly regional sales/revenue figures, would help us to

analyze growth. Sales will be further bifurcated into 70cc, 125 old and new model among

different geographies

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References

1. Introduction of ABL is taken from its website publically available and reviewed and arranged accordingly in relevancy point. http://atlashonda.com.pk/corporate/company/

2. Domestic membership of platforms, which is value addition for AHL to strengthen its position and following rules set from regulators. http://atlashonda.com.pk/corporate/company/

3. Honda claimed to bring Pakistan in Top-5 nations with high producers of Motorcycle. http://greenwhite.org/blog/2012/11/05/pakistan-will-be-amongst-top-5-motorcycle-producers-and-exporters-in-a-few-years/

4. Automotive Association of Pakistan 2012 study showing Population and investment in this industry. http://vustudents.ning.com/m/group/discussion?id=3783342%3ATopic%3A1135935

5. PAMA Production and Sales report Yearly and Monthly both. http://www.pama.org.pk/statistical-information/sales-production/monthly-sales-production http://www.pama.org.pk/statistical-information/historical-information/annual-sales-production

6. Yamaha Expansion and revival in Pakistani market. This will be also challenging for AHL in motorcycle industry of Pakistan. http://tribune.com.pk/story/876873/investment-yamaha-resumes-assembly-in-pakistan/

7. Honda market share and growth shrinkage of 70cc motorcycles. http://tribune.com.pk/story/639464/profile-motorcycle-giant-planning-to-expand/

8. Annual Growth and Market Potential or Size. http://mobileworld.com.pk/2013/05/pakistan-motorcycle-market/#.VV-cgU-qrCt

9. Per Capita is important for growth and creating more size in market of motorcycles. http://archives.dailytimes.com.pk/business/10-Oct-2013/motorcycle-industry-repositioning-itself-atlas-honda

10. Motorcycle Production in Pakistan 2013-14 including all PAMA and Non-PAMA members in Pakistan. http://www.pakwheels.com/forums/bikes-3-wheelers/249068-motorcycle-production-pakistan-july-june-2013-14-a

11. USAID Study “Motorcycle Industry in Pakistan: Problems & Prospects”12. Annual Report reflects SWOT analysis of AHL.

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Questionnaire Title : A Budding Motorcycle Company

Survey Description: This survey is being conducted to review motorcycle customer interest and potential improvements, which our customer focuses on. We adhere to focus on what our customers are interested and envision to bring positive changes in our existing product.

1. Which age group do you belong to?a. 18 to 25b. 26 to 35c. 35 and above

2. Which Province you belongs to?a. Punjabb. Sindhc. Baluchistan d. KPKe. Gilgit/Baltistanf. AJKg. Federal Territory

3. Are you living in Urban or Rural?a. Ruralb. Urban

4. Which of the following best describes your current occupation?a. Private Employmentb. Government Employmentc. Studentd. Businessman

5. How long you daily travel? a. 1 km to 20 kmb. 21 km to 35 kmc. 36 km to 45 kmd. 46 km to 60 kme. More than 60 km

6. What is your approximate monthly income?a. 10000 to 25000b. 26000 to 35000c. 36000 to 50000d. 51000 to 75000e. 76000 and above

7. Which company's motorbike you are currently using?a. Hondab. Yamahac. Suzukid. Other

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8. What is the engine capacity of your bike?a. 70 ccb. 100 ccc. 125 ccd. 150 cc

9. Choose features from list, which you would like to see in upcoming brand of motorcycle. You can choose multiples.

o Electronic Fuel Injection

o Tubeless Tyre and Alloy rims

o Ergonomic Seat

o Multi-Function Digital Instrument cluster with Trip, Gear and Fuel Display

o Waterproof Utility Box for valuables with 2x USB charging ports

o Wind Screen

o Self Starter

o Built-in Tracking System

o Other (Specify in text box)

10. Rate, on the following parameters, your current motorcycle:

Existing broader category Mark "x" in relevant category for each row onceMore Favorable

Favorable Neutral Unfavorable

Extremely Unfavorable

Cost Price          Market Depreciation          Reliability          Running Expenses          Comfort, Performance, Sex Appeal

         

Service and Spares Availability

         

Overall Satisfaction          

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Other Relevant Information

Annex A: Production and Sales Figures of Pakistan Motorcycle industry as per given details by Pakistan Automotive Manufacturing Association.

Annex B: All Questionnaire results with statistical comparison between available choices.

Annex C: Article on Motorcycle industry of Bangladesh and understanding of Segmentation, Positioning.

Annex D: Promotional Plans

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