School of Business

Marketing Management

MKT-302

Group ProjectOn

Sports Utility Vehicles (SUVs)

Prepared For: Mr. Rumman Hassan

Date of Submission: 07 July, 2008

Prepared By

Name ID

Md. Zahirul Quiyum 0620369

Abdul Ali Razib

0610044

Letter of Transmittal

To,Rumman HassanCourse Instructor MKT-302School of BusinessIndependent University, Bangladesh

Subject: Submission of project report on SUVs Competitive strategies.

Dear Sir,We are very grateful to you for giving us such a wonderful opportunity for composing this project report on SUVs Competitive strategies. This assigned task has developed upon the interview we took and our knowledge based on this topic.

We have tried our best within our limitations to make this report useful one and undoubtedly completing this paper was worth the effort. Finally we would be highly oblige if you overlook the minor errors in the report and earnestly hope that you enjoy reading this report as much as we did while composting it.

Yours truly,

Md.Zahirul QuiyumID: 0620369

Abdul Ali RazibID: 0610044

Acknowledgement

This project report might not be possible without taking some helps

from the books and the internet. This report has been prepared by

group of 2 people as a part of the MKT-302 course requirement. It

is prepared after having extensive surveying and analysis.

We would specially like to thank:

Ahsan Habib , Client Relation Manager, Great Wall, Tejgaon, Dhaka.

Md.Shadijul Mosguk, Customer Care Manager, Mercedes-Benz,

Tejgaon, Dhaka.

Md. Asad-uz-zaman, MBA student, East West University.

Arefin Hossain Mridul, BBA Student, IUB.

For their valuable time and cooperation. Moreover we would like to

mention the name of Mr. Rumman Hassan, our course instructor for

his valuable time and suggestions as we have bothered him in time to

time. That’s why our true gratitude goes to Mr. Rumman Hassan for his

polite and kind cooperation and we hope him to have a very successful

and smooth career in future.

Table of Content

Chapter Contents

11 Executive SummaryExecutive Summary

22 IntroductionIntroduction

33 Current Market SituationCurrent Market Situation

44 Prices of DifferentPrices of Different

Companies SUVsCompanies SUVs

55 Competitive Strategies forCompetitive Strategies for

market leadermarket leader

66 Market ChallengersMarket Challengers

StrategiesStrategies

77 Market Follower StrategiesMarket Follower Strategies

88 Market Nicher StrategiesMarket Nicher Strategies

99 ConclusionConclusion

1010 ReferenceReference

1111 BibliographyBibliography

Executive SummaryExecutive Summary

A sport utility vehicle, or SUV is a generic specification for a passenger

vehicle which combines the towing capacity of a pickup truck with the

passenger-carrying space of a minivan or station wagon together with

on or off road ability. Most SUVs are designed with a roughly square

cross-section, an engine compartment, a combined passenger and

cargo compartment, and no dedicated trunk (i.e. a station wagon

body). Most mid-size and full-size SUVs have three rows of seats with a

cargo area directly behind the last row of seats. Compact SUVs and

mini SUVs may have five or fewer seats.

It is known in some countries as an "off-road vehicle" or "four-wheel

drive", often abbreviated to "4WD" or "4x4", pronounced "four-by-

four". However, not all SUVs have four-wheel drive capabilities.

Conversely, not all 4WD passenger vehicles are SUVs. Off-road vehicles

are a very different class of vehicles, being vehicles primarily built for

off-road use. Although some SUVs have off-road capabilities, this is

often a secondary role and they often do not have the ability to switch

between 2WD, 4WD high gearing and 4WD low gearing.

More recently, manufacturers have responded to buyers' complaints

that SUVs "drive like trucks" and demands for "car like ride" with a new

type of SUV. A new category, the crossover SUV uses car design and

components for lighter weight and better fuel efficiency, but is no

longer designed or recommended by the manufacturer for off-road

usage or towing.

Introduction

The world of business is moving more rapidly than ever. In order to

sustain and keep pace with these fast-changing scenarios, marketing is

one of the main weapons for the organizations. Marketing define the

process by which companies create value for customers and build

strong customer relationship in order to capture value from customers

in return. Any business organization that wants to earn a profit

definitely needs to create a customer value and satisfaction through a

lot of activities. These activities are a part of what marketing does for

an organization. In an old fashioned thinking many might think a Car

Manufacturer or Company doesn’t need any kind of marketing but this

certainly has changed in the 21st century. Especially the Car

Companies have changed the way we used to think as they are always

coming up with new ideas to improve customer satisfaction. Now days,

the competition is so intense that if a Car Company needs to survive

this competition they must have a very good marketing strategy. For

example, how many Car Companies had provided or there were any

company that provided online choice board to customers to design

their own car as they want. But now a days many car companies are

providing this type of services. They are providing post-purchase

services, guarantees and warrantees on parts of the car, customizing

car as the customer wants - sometimes the customer does not say to

do but they do to make customer delighted. The classic example could

be, a consumer bought a Mercedes-Benz car and when he was driving

to home he turned on the radio. He found that channel number 1 was

tuning to his favorite local news channel, next one was his favorite

song channel, next one was his daughter’s favorite and so on. The

service man tuned the car as consumers old car instead of asking to do

that. That made the consumer delighted and he will talk about

Mercedes-Benz favorably which would be a good advertisement for

Mercedes-Benz.

IN Bangladesh, there are many Car Companies and many of them

make and sell SUV. A sport utility vehicle, or SUV is a generic

specification for a passenger vehicle which combines the towing

capacity of a pickup truck with the passenger-carrying space of a

minivan or station wagon together with on or off road ability. And most

of them have improved their SUVs and made new versions of those or

launched as new modeled SUVs. So to attract and sell to new

customers and also to retain customers they need differentiated

marketing strategies.

Prices of Different CompaniesPrices of Different Companies

SUVsSUVs

No Company SUV Price Range (Taka)

1 Nissan Murano, Pathfinder,

Petrol, X trial

2 Mitsubishi Outlander, Nativa,

Pazero, Pazero Sports

4,800,000 to

6,500,000

3 Toyota Rav4, Fortuner, Prado,

Land Cruiser GH

3,500,000 to

9,000,000

4 Mercedes-Benz M-Class, Renton 23,000,000 to

30,000,000

5 BMW X5, X3 15,000,000 to

25,000,000

6 Great Wall Hover 900,000 to

2,600,000

7 Honda CR-V 2,5000,000 to

3,600,000

8 KIA Sportage 3,300,000+

9 Lexus ( Side

Brand of

Toyota)

LX470, Harrier 6,000,000+

10 Tata Safari, Sumo 2,800,000+

11 Maruti Suzuki Grand Vitara 2,700,000+

12 Mahindra Bolero 3,000,000+

13 Land Rover Range Rover

14 Hyundai Terratan 3,500,000+

Current Market SituationAt present, RANGS Limited (RL) is the market leader in the sales of

Sport Utility Vehicles or SUV, made by Mitsubishi Motor Corporation

(MMC). In the financial year 06-07, it has sold about 130 units of SUV,

which worth approximately TK. 52 corer. In the field of SUV’s, RANGS

Limited face challenges mainly from Navana Motors- which brings

Toyota made SUV’s & Pacific Motors- which brings Nissan made SUV’s.

Recently, though the government of Bangladesh is using Nissan Petrol,

Nissan Xtrial, Nissan Pathfinder and various Nissan’s automobiles as a

formal transport, recently Nissan has established itself as a closest

competitor of Mitsubishi. And RANGS had very successfully captured

the significant market share of the brand new vehicles in Bangladesh

Defence sector; it has enjoyed solid profitability over the past few

years, which enabled it to be financially strong company.

There are many other companies; Mercedes-Benz, BMW, Mahindra and

so on; who make and sell SUVs. All of these companies are now

concentrated on capturing market share of recondition market

segments.

Competitive Strategies for

Market Leader

As a market leader in Bangladesh, Mitsubishi plays a important role in

the industry and in their target markets. It has the largest market

share of SUV market segment, and usually leads the other firms in

price changes, new-product introductions, distribution coverage, and

promotional intensity. It has created a distinct position in consumes’

minds.

The trend analysis of the last two financial year’s sale show that, the

demand for SUV is again increasing after a set-back of the previous

couple of years. So, there are enough opportunities to grab a bigger

share of the SUV market. Strengthening the sales of pre-owned SUV

can be a good strategy to target middle-class customers. This will also

result in more visibility on the road. There is possibility of motivating

and facilitating private customers to buy used Mitsubishi SUV’s by

arranging a used car sale initially every month then even as frequent

as every week. If a Mitsubishi Club can be introduced, R.L. will be able

to build a system to communicate with its customers, listen to them,

respond to their requirement, learn the down side of its operation,

make improvement, create brand loyalty etc, which should help to

capture and retain substantial amount of market share of SUV’s.

Mitsubishi SUV Sales Trend

Year 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07

Units

Sold

75 85 24 172 172 202 128 130

Sales Trend of SUV

0

50

100

150

200

250

1

Year

Un

its

sold

1999-2000

2000-2001

2001-2002

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

At present the competition among the automobile dealers is very

extensive. For the last 5 years the competition is growing steeply by

introducing category wise vehicles with a very competitive price and

services along with aggressive sales & marketing activities. In SUV,

Pajero significantly leads its number one position with a very good

reputation to its users. But Rangs Limited is in setback with mid size

SUV.

A product innovation may come along and hurt the leader. The leader

might spend conservatively whereas a challenger spends liberally

(Nissan has already attacked by capturing the government segment).

The leader might misjudge its competition and find itself left behind

(Mitsubishi has lost market share of government segment because it

didn’t succeed to manage the political condition in the favor of them).

The leader must need to spend much on product research and product

development to hold its position.

Remaining number one, Mitsubishi calls for action on three fronts:

1. Expanding the total market: After capturing large number of

market share, Mitsubishi is now trying to expand its total market

in various ways:

Mitsubishi is searching for new users in existing markets by

promoting, offering financial benefits, offering new features,

colors, tests drive and so on.

It is also trying to find new market segments for its current

products and is offering its products to discover new market

segments.

RL gets benefited from the image of RANGS. Moreover,

Mitsubishi itself is a global giant. The sign of RANGS and

Mitsubishi Diamond sign are very popular. RANGS is also the

distributor of Daimler-Chrysler with its brand Mercedes-Benz.

It is also launched its new branches for convenience of

consumers.

RL carries wide product line of brand new cars in Bangladesh.

Unlike, the importers of Hyundai, KIA, Daihatsu and some other

international brands, RL competes in every category. Mostly, RL

competes in SUV, sedan and truck category in defence tender.

It arranges and participates in car fares to advertise and

reposition its products.

For years, Pajero is considered the status of prestige to not only

the rich, but also the political figures and high Govt. officials. It

can be said that despite the recent competition from Toyota

Prado for the preferred luxury SUV, Pajero remains the desired

one.

It is trying to discover new ways to increase its products usages.

It also decorated and also aware to decorate its branch

showrooms attractively and it also manages its all product

models in the showroom showcases. It has attractively decorated

the main branch in Tejgaon.

Mitsubishi is considered a good quality car. It lacks visibility

which Toyota enjoys, it suffers from more price than Nissan, but

technically it is as good as any car.

2. Defending market share: While trying to expand its market

share, Mitsubishi is also trying to defend its market share. It must

defend against Nissan, Toyota as these are the main challengers.

The most constructive way to defend its market share, Mitsubishi

tries to serve superior value to the customers and it also does

proactive marketing as Mercedes-Benz. It produces efficient,

reliable and durable parts of the SUV and assembles accurately

to gain more brand equity and retain and capture customers.

It mainly concentrates on providing high fuel efficiency, sought

features and possible maximum acceleration in its SUVs.

Because it has own distribution network, it can distribute its

products more efficiently and effectively.

It produces a full line of construction equipment to enable

customers to do one stop buying. Like alliance with bank,

insurance company to provide customers car loans, insurances

within its branch.

It also defends its product by occupying and maintaining the

most desirable market space in the minds of the consumers.

It erects outposts, such as it consists of a multitude of

independent companies such as- in Banking & Security industry,

The Bank of Tokyo-Mitsubishi UFJ, Ltd; in Chemical industry,

Asahi Glass Co., Ltd and so on.

By improving or innovating products in each or within some

years, it counterattacks against other competitors who launched

a new or improved relative products.

Mitsubishi also contracts its old obsolete products and applied

resources to new product development fields which may be a

good defense to survive and also to hold the position in the

market.

3. Expanding market Share: Mitsubishi improves their

profitability by increasing their market share. Each year it

reintroduces its product by developing its SUVs. It makes them

more fuel efficient, increased engine performance, added more

features and promotes customers to buy and use these products.

It is also trying to gain more production efficiency to reduce its

cost and to offer products at a much lower price.

Market Challengers StrategiesSHIFT_. A single word that captures the passion and commitment has

driven Nissan. “Everything we touch, we shift. And everything we shift,

we make better.”

Toyota, Nissan, Mercedes-Benz, Honda, KIA, BMW, Great Wall, Suzuki,

Mahindra, Subaru, Cherry, Chevrolet, Land-Rover, Naza, Hyundai, Ford,

and Porsche and so on; these all firms are market challengers. They

can attack the leader and other competitors in an aggressive bid for

further market share.

Many market challengers have gained the ground or even overtake the

leader. Nissan might want to capture more market share of other

competitors and the position of Mitsubishi. Not only Nissan but also all

challengers want to capture more and large portion of market share

and to become as a market leader. For doing that, every challenger

does some attack strategies.

1. Defining the strategic objective and opponent(s): Every

company in the

Industry has established strategic objectives and identified its

opponents. Mercedes-Benz has already started to develop a product

which will be launched in 2009 and will capture the recondition market

share. Although BMW has high performable engine and high quality

SUVs, because the price of its products are too high than others; like

Toyota, Mitsubishi, Nissan, that it does not succeed to capture market

share as much as Nissan, Toyota and some others. It has launched

SUVs; BMW X5, BMW X3; in Bangladesh which price are more than

20,000,000 taka.

Toyota and Nissan are so close to Mitsubishi. Toyota has captured a

large market share in the industry than others in Bangladesh, but in

the sells of SUV Mitsubishi is the Market leader. Toyota has launched

direct attack against Mitsubishi through offering new SUVs- Toyota

Rav4, Toyota Fortuner, Toyota Prado and Toyota Land Cruiser GH. They

offered these SUVs at more low prices than Mitsubishi. The range of

the price is 2,500,000-9,000,000 taka.

There are also other companies who are also launching continuously

new products and other attacks that create a great difficulty for the

market leader and also for other competitors in the industry.

Honda, Mercedes-Benz, BMW, Toyota, Mazda and others; all are

attacking also one another’s to attract and gain others customers.

They also launching attack against weak companies, such as- Great

Wall, Cherry, to gobble up and capture their customers.

2. Choosing A General Attack Strategies: The challengers can

also launch

attacks against leader or other competitors by using attack strategies.

Toyota launches attacks against competitors through using flank

strategies. For example, it offers fuel efficient, low priced, limited

featured, better assembled and spare parts availability SUVs where

Mercedes-Benz has high quality, high performable and larger amount

of featured, luxurious and highly priced SUVs. So middle class people

obviously consider Toyota to buy because may have not ability or if

they have, they don’t want to spend huge amount of money on buying

Mercedes M-Class. And may be wanted a low maintaining cost and fuel

efficient SUV.

In the past, Volvo had launched an encirclement attack against all

large companies by positioning their product in the minds of

consumers as safest and durable. They have captured a wide slice of

the competitors’ territory through this blitz.

The major strategic attack by which Toyota has captured the most of

the market share of overall sells in Bangladesh is Bypass attack. Those

market segments whose were avoided by large companies; BMW,

Mercedes-Benz; was concentrated by Toyota and by gaining reliability

and popularity from those segments it has become the number one.

Every company executes guerrilla warfare against each others. All of

the companies are intensively active to find a gap so that they can use

it as an opportunity.

3. Choosing a specific attack Strategies: Every company also

does some more specific strategies.

Almost all companies promote price discount for their products. This

type of promotion mainly offers at any special day or occasions.

Toyota, Mercedes-Benz, Great Wall and so on also offers low price

products to increase market share and also attract and capture

competitors customers.

Mainly Mercedes-Benz, BMW, Volvo, Land- Rover offers prestige goods.

These products help companies to position their products in the

consumer’s minds.

Almost every companies; BMW, Nissan, Toyota and so on; offer a larger

product variety to influence and to give option to customers to choice

their preferable products.

Almost every company in the industry executes marketing research to

innovate new products that can satisfy consumer’s needs more

efficiently.

High quality product manufacture companies always search for new

ways to reduce their manufacturing costs to offer their products at

lower price to the consumers.

Almost all companies do intensive advertising promotion for their

products.

Market Followers Strategies

In this entire industry, there is no market follower. Because all

companies in Bangladesh, instead of manufacturing they import SUVs

from their parent countries, so they do not imitate anything from other

competitors. They shift their SUV prices by observing their competitors

but do not match it because the parent country’s dealers are

determined the price.

Market-Nicher StrategiesIn this industry, there does not have any niche. Because to enter and

survive in this industry, a firm requires a huge amount of financial

funds, any small firm does not want to enter this market segments and

so the existing firms do not offer any specific SUVs for any specific

community or group.

ConclusionThe automobile industry in Bangladesh is resembled as differentiated

oligopoly competition. This industry has a limited number of

companies, high entry and exit barriers because of high capital

requirements, intense competition and so on. To capture more market

share and attract new customers, it requires huge promotional

activities, so cost of running activities in this industry is high. The

market segments of SUVs are highly unattractive too because of

numerous, strong and aggressive competitors. Reasonable duty

structure, CNG facility, change in life style of middle class & upper

middle class family will make these segments more attractive as well

as competitive. The big company Mercedes-Benz has provided high

quality SUVs and services. Its SUVs are capable to perform better,

comfortable driving, luxurious, high engine performance and swiftness.

But they are dominated by Mitsubishi Motor Corporation, Toyota and

Nissan because of comparatively high price and less fuel efficiency.

Referencehttp://en.wikipedia.org/wiki/Suvhttp://www.automobilemag.com/used_car_pictures/05/suvs/mitsubishi/index.htmlhttp://www.automobilemag.com/used_car_pictures/05/suvs/bmw/index.htmlhttp://www.automobilemag.com/used_car_pictures/05/suvs/honda/index.htmlhttp://www.automobilemag.com/used_car_pictures/05/suvs/nissan/index.htmlhttp://www.automobilemag.com/used_car_pictures/05/suvs/toyota/index.htmlhttp://www.automobilemag.com/used_car_pictures/05/suvs/mercedes_benz/index.htmlhttp://www.automobilemag.com/used_car_pictures/05/suvs/mazda/index.htmlhttp://en.wikipedia.org/wiki/Nissan#Alliance_with_Renaulthttp://en.wikipedia.org/wiki/Nissanhttp://www.automobilemag.com/used_car_pictures/05/suvs/lexus/index.htmlhttp://www.toyota.com/about/our_business/at_a_glance/index.htmlhttp://www.nissanusa.com/about/http://www.toyota.com/about/our_business/at_a_glance/index.htmlhttp://www.mitsubishi.com/e/group/about.htmlhttp://www.nissanusa.com/about/heritage/the-early-days.htmlhttp://www.mitsubishi.com/php/users/category_result_industry.php?gyousyu_id=0006&lang=1http://www.mitsubishi.com/php/users/category_search.php?lang=1

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