Dawoo Marketing Plan

“A PROJECT OF MARKETING PLAN”

PRE SE NTE D T O PROF. DR. NADEEM AHMAD BASHIR

PR ES ENT ED BY MAZHAR HUSSAIN I.D # 023111

ABDUL HAFEEZ I.D# 023117

MUDASSAR HAMEED I.D # 023392

MUHAMMAD NADEEM AHMAD I.D # 023114

Institute Of Management Sciences Lahore

To the people who have worked tediously through the ages to uphold the principles of determination, commitment and devotion for the sake of humanity.

ACKNOWLEDGEMENT We wish to place on record our indebtedness to the following people for the continuous support we received during the process of compilation of this report.

In particular to Dr. Nadeem Ahmad Bashir, our teacher, for his unrelenting interest, keeping constant contacts and help that he gave during the process.

We are also thankful to Daewoo people for providing material relating to this report.

TABLE OF CONTENTS 1. Executive Summary

1

2. Daewoo International Corporation

2

    

Introduction General Information Company Chronology Departments Management

3. Daewoo in Pakistan    

6

Introduction Why Daewoo in Pakistan? Start in Pakistan Investment

4. Services

8

5. Special Features

9

6. SWOT Analysis

10

7. Marketing Plan

11

• • • • •

Mission statement People vision Marketing objectives Target market Market positioning

8. Marketing Mix • • • •

13

Product Place Promotion Price

9. Conclusion & Recommendations

15

Executive Summary

The Diagnostic study on Daewoo Express Bus Service is indeed an informative one. Daewoo came into Pakistan for the construction of Motorway [M-2] Project. Then they were asked to operate their Inter City Bus Service that was from Lahore to Islamabad. The government of Pakistan proposed this, on November 11 1999, Daewoo started Inter City Bus Service with a fleet of initially 20 buses, which was from Railway Station Lahore to Choongi Amar Sadhoo. Then they gradually increased their fleet and currently they are operating with 70 buses. Daewoo is facing severe competition with Niazi Express. Other franchise companies like New Khan Metro, Premier are also indirect competitors of Daewoo. As far as the financial situation of Daewoo is concerned, it had to bear a large number of losses in its first two years of operations. But, it is the growth phase. This can be judged from the fact that the percentage of net loss was greater than 20 buses, and it reduced as the number of buses increased to 70. So we can say that Daewoo, though now not financially sound, has a strong tendency and in the near future it will be a profitable enterprise. Express Bus Service started working from 1998 with 40 buses and now they are at 64 and also profitable. Daewoo operates in the kind of industry where the entry barriers are high. The reasons being a large amount of investment, equipment and network are required. The major weakness in the Daewoo Express and City Bus Services is that their network is not extensive enough to accommodate most areas. Even Daewoo City Buses are too much crowded. An increase in the number of routes and buses especially in the Daewoo City Bus Service Department is the best way of tackling this situation. -1-

DAEWOO INTERNATIONAL CORPORATION Introduction A locomotive for national economic development since its founding in 1967 as Daewoo Industrial Co., Ltd., today’s “Daewoo International Corporation” is the new vanguard of Korean Trade. The company played a leading role in overcoming economic crisis in 1998 by achieving top results in export and trading surplus. Throughout its long history, the company also played a major role as a vanguard in non-governmental diplomacy.

The

company’s

dynamic

trade

policies

led

to

the

establishment of diplomatic ties with 13 nations as well as to the expansion of export markets by setting up Korea’s first trade branch office in 37 countries. Daewoo Corporation was reorganized into three new

companies

International

in

order

Corporation

to

normalize

in

trade,

all

Daewoo

operations:

Daewoo

Engineering

and

Construction Co., Ltd., in construction and Daewoo Co. in others. Having normalized operations, Daewoo International is leaping into the new millennium with more than three decades of international marketing expertise, international trading man power, high quality products and all inclusive domestic and international sales networks. With such reliable qualifications, the company looks forward to positioning itself as a truly global leader in world trade. With its own distinctive technology and development capabilities, Daewoo international has been, for more than three decades, a worldwide

name

for

fine

quality

products.

Now,

with

new

environmentally friendly materials, the company augmented its renown and

reliability

in

material

for

footwear,

garments,

car

interiors

components and miscellaneous goods. First in Korea to acquire ISO 9002

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and QS 9000 quality certification in its field, the company continues to expand its global exports and develop new trade strategies. With its solid capabilities in manufacturing technology and improvements in both process and quality, Daewoo International is steeping into the new millennium with top competitiveness, top products, and top services.

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General Information

Name of the company CEO

Daewoo International Corporation Lee Tae-Young 541 5- Ga

Address

Namdaemunno, Chung Gu, Seoul, Korea, G.P.O Box 2810 082+2-759-2114

Phone

+82+2-753-9489

Fax

Company Chronology

Mar. 22, 1967 Jan. 1, 1982 1998 Number of staff: Overseas network: Branch offices:

Major business areas:

Organization

Established as Daewoo Industrial Co., Ltd Merged with Daewoo Development Co., Ltd; Ranked first in Korea in exports and trade surplus Approx. 9000 Subsidiaries: 70 49 International Trading, Overseas Resources Development, Domestic and Overseas Investment Business Overseas Projects, etc. 10 Division, 51 teams

Departments  Corporate Restructuring  Finance

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 International finance and overseas management  Office of management  Staff of legal affairs

Management With 30 years of experience, Daewoo’s Management Development Center recently introduced new visions to foster personal efficiency and advancement. The center is initiating a number of systematic new programs for employees, as well as innovative steps as the leading of training facilities, operation of consignment training, and public lectures.

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Daewoo in Pakistan Introduction As Daewoo has a name all over the world due to interest in automobiles, consumer goods, financial and securities, construction, engineering and trade sector, Daewoo is working for the last thirty years and their motto is “from tile till ship”. Daewoo, a top Korean company, emerged in Pakistan in 1993, when it sort $1 billion in Lahore- Islamabad Motorway Project which was highly political in nature. Though it discouraged in getting more projects but with the re-election of Nawaz Sharif Government, Daewoo has come with its renewed commitments in taking part in development related activities. In the first phase, company would import buses from Korea and intends to invest $60 million in its transport venture which would have 600 buses fleet in total. Company source says that it is also considering installing a bus assembling plant to take part in the massive demand of passenger transport. The company commenced its business on December 10, 1997 after obtaining certificate for commencement of business from registrar of companies, Lahore. Daewoo Pakistan Motorway Services Ltd. was incorporated as a public ltd. company on October 23, 1997. The object of the company was to provide services on Lahore- Islamabad motorway. Daewoo Pakistan Express Bus Services Ltd. was incorporated as a public ltd. company by shares with the object of engaging in transportation business. Their detailed description activities are:  To plan, survey, design, finance, construct, own, operate and maintain bus services.

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 To carry on the business of transport of goods, mails, passengers, animals from place to place either by air, by land or sea whether in airplanes, motor-vehicles, cars, ships or in any manner what so ever.  To indulge in higher transportation services in all the parts of the world.

Starting in Pakistan In May 1999, Daewoo signed memorandum of understanding with the Government of Punjab at Seoul, Korea to operate 1500 buses in Pakistan out of which 700 buses were proposed to be operated in Punjab whereas 800 buses in Sind. It was also agreed that government would provide the requested funds for this project from outstanding payment on the construction of LahoreIslamabad Motorway Project. Anyhow, this agreement could not be materialized and due to the certain reasons and eventually Daewoo had to arrange funds for import of 50 buses through financial institutions and those maintain its commitments made with the citizens of Pakistan. To operate the city bus in Lahore, a franchise agreement was signed on August 3, 1999 between Daewoo and Lahore Regional Transport Authority, Government of Punjab.

Investment To commence its business on January 12, 1998, after obtaining certificate for commencement of business from Registrar of Companies, Lahore, the company has planned an initial equity investment of US $ 1 million. The total cost of the project has been estimated at $ 6.526 million, which the company proposes to finance, by equity investment of -7-

$ 5.095 million and by loan arrangements of $ 1.431 million. In this project, as well, Daewoo wants 100% equity in the project instead of 60% allowed.

Services There are two types of services that Daewoo is providing in Pakistan which are as follows: 1. Express Bus Service 2. City Bus Service

Express Bus Service This is the inter-city bus service of Daewoo International Corporation in Pakistan. Major routes  Lahore - Islamabad  Lahore - Multan  Lahore - Sargodha  Lahore - Faisalabad  Rawalpindi - Murree [wagon]  Lahore - Peshawer

City Bus Service

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This is the intra-city service of Daewoo International Corporation in Lahore, Pakistan. This department offers an extensive transportation network within Lahore through a fleet of 70 buses. Daewoo is also considering the launch of this service in other metropolitans such as Karachi.

Special Features [Daewoo Express] It provides its services from cities to cities comparatively to the other companies, Daewoo

aims

to provide

following

services

for their

customers:  Smooth drive with reclining seats  Refreshment  Audio/Video entertainment  Centrally heated and air-conditioned  Reservation facilities  Pick and drop facilities  Punctual departures and arrivals  24 hour service  Computerized ticketing  Courteous hostesses  Armed security guards  Cargo service  Expert drivers All these points are advantages for Daewoo over all the other transportation companies in Pakistan.

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SWOT Analysis

Strengths

Weaknesses

1. Brand name 2. Unique Service 3. State-of –the-art equipment 4. Professional management

1. Lack of an extensive transport network

5. Trendsetters

2. Over crowding of vehicles

[in transportation]

3. Insufficient marketing

6. High traveler satisfaction

intelligence

7. Extensive Employee Training Program

Opportunities

Threats 1. Well established competitors

1. More buses, routes and a

2. Government policies

greater range of transport

3. Fluctuation in fuel prices

network

4. Up coming companies

2. Better management of

5. Intensive disturbances on the

available resources

roads

3. Innovative Marketing

6. Non-availability of spare parts

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MARKETING PLAN BUSINESS MISSION “We envision growing in the shortest possible time into number one traveling company in Pakistan with the unique ability to meet the needs of consumers of every age group for facility and pleasure through development of highest quality and customer-care services.”

PEOPLE VISION We envision the company to develop an extremely motivated and professionally trained work force, which would drive growth through innovation and renovation.

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MARKETING OBJECTIVES

The fiscal and political policies and economical conditions of the government and its efforts are creating a generally business friendly environment are likely to help in the economic turn around. The international community is supplementing these efforts to overcome economic difficulties. These indicators are holding out the hope that the year 2004 may be better for business. However, it is early to say with any finality how business will develop, given certain uncertainties that still prevail. On our part we are confident that we will maintain our growth momentum and perform well in the coming year. Our focus will remain on a long-term view of the business, quality consciousness and efficiency through innovation and renovation in all areas of operation.

TARGET MARKRT Our target customers are middle and upper class citizens who think time is more precious than money and sufferings of using conventional traveling medias.

MARKET POSITIONING We want positioning our company as the company, providing comfortable traveling experience with a nice cooperative and friendly staff.

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MARKETING MIX PRODUCT Daewoo will provide traveling services using innovative techniques and modern technologies with a friendly and gentle environment.

PLACE The company will make sure that service is available throughout the country at all the suitable locations.

PROMOTION Effective marketing remains the hallmark of Daewoo as a company involved in supplying services with a great emphasis on effective long-term strategies. Its services (traveling, pick & drop, cargo etc) will be promoted through out the country using a network of busstations. It will ensure consistent and balanced growth, despite adverse market conditions. As a result, Daewoo will enjoy an extremely high degree of recognition and reliability, which has earned leadership positions for most of its services. Its more and more branches will be initiated in other cities where demanded.

PRICE After developing their pricing structures and strategies, companies often face situations in which they must initiate price changes or respond to price changed by competitors. In some cases, the company may find it desirable to initiate either a price cut or a price increase. In both cases, it must anticipate possible customers and competitor reactions.

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Several situations may lead the firm to consider setting its price. One such circumstance is excess capacity: In this case, the firm needs more, business and cannot get it through increased improvement or other measures. It may drop its "follow-the-leader pricing"— charging about the same price as its leading competitor—and aggressively cut prices to boost profit. A successful price increase can greatly increase profits. For example, if the company's profit margin is 3 percent of fare, 1 % price increase will increase profits by 33 percent if fare volume is unaffected.

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Conclusion and Recommendations

1. Daewoo is an international brand and through its high quality and exclusive services, it has gained a good repute in the local transport business. But it has been seen that Daewoo Corporation has not lived up to its name as far as the establishment of an extensive transport network is concerned. Passengers in most areas of Punjab and in all the other provinces of Pakistan have no access to the Daewoo Bus Services. There is also a great need for an inter city transport network of Daewoo in metropolitans such as Karachi, Rawalpindi and Faisalabad etc.  This problem can be dealt with by increasing the no. of inter city and intra city routes and buses as well as increasing the range of transport services. 2. It has recently been observed that following a tremendous growth in the number of passengers, Daewoo Intra City Bus Service has suffered great over-crowding which has deteriorated the standard of comfort claimed by the company.  One probable solution to this problem is again an increase in the no. of transport vehicles and routes. Moreover, a better handling and management of the present bus routes and the number of buses can also lead to a more pleasant situation. 3.

I was quite shocked to know in my meeting with Executives of Finance and Marketing of Daewoo, Pakistan that no advertising

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campaign has ever been launched to highlight the comparative superiority

of

the

company

over

its

local

competitors.

Consequently, a large proportion of consumers remain unaware of the great facilities afforded by the bus service.

 Therefore, advertisement is a feasible and necessary way for the bus service to attract passengers who are unfamiliar of the high class and uniquely elegant transportation experience- offered by Daewoo- and hesitate when spending on the comparatively high Daewoo bus fair.

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