Final Term Paper

2009

Marketing Plan Chevy SRV Driving in comfort

Essentials of Marketing

Submitted To: Ms. Kanika Jhamb Submitted By: Rohan Kumar Sinha10803824S1804RS1804A10 08/12/2009

ACKNOWLEDGEMENT No task is a single man’s effort Co-operation and Co-ordination of various people at various places go into the successful implementation. It is a great pleasure to have opportunity to extend my heart-felt thanks to everybody who helped me through the successful completion of this project. It would be prudent to commence this term paper with a sincere tribute to all those who played an indispensable role in the accomplishment of this work and obliged whenever and wherever their able guidance was required. I would like to express my deep sense of gratitude to Ms. Kanika Jhamb, (Faculty guide) for providing me regular guidance, full cooperation, support and encouragement throughout the project. Under his experienced teaching and guidance, my knowledge has increased resulting in achieving better results.

Introduction to Term Paper: Creating a Marketing Plan for Charvolate “Chevy SRV” - Small Segment Car Defining Goals A marketing plan is a key component of a business plan, a document written by an individual or group of individuals interested in launching a new business. Creating a marketing plan allows me as a business owner to understand my customer base, to determine exactly how products or services will meet the needs of a customer base, and to devise promotional and sales strategies to target that specific market. My Marketing plans also help me to determine appropriate strategies for things like public relations campaigns designed to raise the general awareness level of a company or advertising efforts designed to position products and services as superior to those of competitors.

Conducting market research After preparing the business plan, one of the first things as a marketing plan developer, I have conduct market research. My Marketing plans include extensive information about target market, such as the existing size and the anticipated growth rate of the market and the level of demand for the product or service offered and positioning of my product. Marketing plans also quite often include descriptions of potential customers, including their gender, age, level of education, marital status, how they make purchases, and the reasons behind those purchases. Market research also includes a thorough analysis of competition, it also includes the require information regarding the strengths and weaknesses of rivals, as well as information about their market share, profitability, and pricing strategies.

Choosing marketing activities Once I have an understanding of the market I am targeting the marketing activities that will allow me to achieve my goals. Budget of the company is very important, so I have planned to spend a certain percentage of capital on marketing efforts. Along with traditional forms of advertising, such as television, radio, newspaper, and magazine advertisements, I also choose from less conventional promotional materials including online banner bars and buttons, as well as both print and online newsletters, and press releases. Regardless of the activities selected, "the major task in developing effective advertising is to make sure the ads reflect the specific marketing goals and objectives. To promote my brand, I will organize Trade show, seminars, special events, charitable activities, and even things like letterhead, business cards and strategic alliances with other firms, this is also a part of my marketing plan.

TABLE OF CONTENTS •

Acknowledgement

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Introduction of the company

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Profile of the company

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Environmental Policy

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Brand

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Some Interesting Facts About Chevy SRV

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Trend and Forces

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Situational Analysis

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Product Development

Idea Generation Screening Concept Development and Testing Business Analysis Product and Marketing Mix Development Market Testing Commercialization 

Comparison to competitors

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Marketing strategy

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Marketing mix

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Swot analysis

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Product pricing

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Promotion and advertisement

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Methods of advertising

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Logistic and supply chain

References

Introduction:

General Motors India Type

Wholly – owned subsidiary

Founded

1994

Headquarter

Halol, near Vadodara, Gujarat, India

Key People

Karl Slym – President and Managing Director

Industry

Automotive

Products

Automotive

Employees

3,500

Parent

General Motors

Website

www.generalmotorsindia.com

Chevrolet India Type

Division

Founded

1997

Founder(s)

General Motor India

Headquarters

India

Industry

Automotive

Product

Automobiles, Engines

Parent

General Motor India

Website

www.chevrolet.co.in

Profile: General Motors India Private Ltd. (GM India) is a wholly-owned subsidiary of General Motors Company that is engaged in the automobile business in India. The registered office of GM India is in Halol, near Vadodara, Gujarat. The company operates vehicle assembly plants in industrial parks in Halol and Talagaon, near Pune, Maharashtra, maintains a headquarters operation in Gurgaon, Haryana and a large technical center in Bangalore.

History: General Motors began doing business in India in 1928, assembling Chevrolet cars, trucks and buses, but ceased its assembly operations in 1954. GM continued with tie-ups with Hindustan Motors to build Bedford trucks, Vauxhall cars, Allison Transmissions and off-road equipment. In 1994 General Motors India was formed as a joint venture, owned 50 percent by Hindustan Motors and 50 percent by General Motors, to produce and sell Opel branded vehicles. GM bought out the Hindustan Motors interest in 1999. GM India continued to produce Opel cars at the Halol facility until 2003, when it started production of Chevrolet vehicles at that location. In 2000, GM India moved its headquarters to Gurgaon. In 2003, the company opened its technical center operations in Bangalore, which included research and development and vehicle engineering activities. The technical center operations were expanded to include purchasing and financial support services for General Motors operations located outside of India (2006), vehicle engine and transmission design and engineering (2007) and a vehicle design studio (2007). GM India began construction of a second vehicle assembly plant in Talagaon in 2006, which began production of Chevrolet vehicles in September 2008. Like most other automotive companies in India, GM India appoints independently owned dealers to sales, service and market vehicles that it produces. As of August 2008, managed the Chevrolet dealership network (including export dealers located in Nepal, Bangladesh, Sri Lanka and Bhutan) from its headquarters in Gurgaon, and regional zone offices in Mumbai, Kolkata and Chennai.

GM India also sells parts and services to independent vehicle maintenance providers under the AC Delco brand.

Environmental Policy: As a responsible corporate citizen, General Motors is dedicated to protecting human health, natural resources and the global environment. This dedication reaches further than compliance with the law to encompass the integration of sound environmental practices into our business decisions. The following environmental principles provide guidance to General Motors personnel worldwide in the conduct of their daily business practices. 1. We are committed to actions to restore and preserve the environment. 2. We are committed to reducing waste and pollutants, conserving resources and recycling materials at every stage of the product life cycle. 3. We will continue to participate actively in educating the public regarding environmental conservation. 4. We will continue to pursue vigorously the development and implementation of technologies for minimizing pollutant emissions. 5. We will continue to work with all government entities for the development of technically sound and financially responsible environmental laws and regulations. 6. We will continually assess the impact of our plants and products on the environment and the communities, in which we live and operate, with a goal of continuous improvement.

Brand: Chevy SRV

Chevy or Chevrolet SRV (Sport Recreation Vehicle) is one of General Motor's latest plunges in the Indian automotive sector. SRV's unique feature is its premium five-door hatchback complimenting the sporty touch. An instant hit among design-oriented car connoisseurs,

Chevy SRV boast of well coordinated contemporary Italian designs re engineered for Indian. The model is built on the CHEVY platform where it is identical to CHEVY's every feature.  With an adequate 185 mm ground clearance, the model has 1,598cc, 16V, DOHC, VGIS (variable geometry intake system) engine types.  All these help in offering a voluminous 101 PS peak power at 5,800 rpm and a maximum torque of 140Nm at 4,500 rpm.  No doubt with a sturdy carcass, the model enables an absolute flex-free, stable ride at high speeds.  The cabin is practical and roomy with firm, supportive seats; a four-spoke steering wheel (non-adjustable); a simple, uncluttered dashboard and centre console. A 60-40 split-folding rear seatback translates into more space to accommodate more cargo. Fit and finish is good, but one expects more amenities from a car at this price tag.  Standard interior features include a digital clock, height-adjustable driver's seat, splitfolding rear seat, and rear seat armrest with cup holder, cooled glove box, sunglass holder, clutch footrest, rear wiper, rear defogger with timer and a 6-speaker system.

Other Features: The varied characteristics which compliment the latest model Chevrolet SRV are abundant in nature. These are: •

VGIS engine

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Robust acceleration

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Roomy interior

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Front fog lamps

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Central locking

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Driver side airbag

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60:40 Split folding rear seats

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Power windows

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Rear-seat armrest with cup holders

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Electrically operated ORVMs

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Six speakers

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Driver's side sunglass holder

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Floor console with lid and armrest

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Cooled glove box

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Pricey for its segment

Some interesting facts about Chevy SRV: 

Designed by the renowned Italian designer, Giorgetto Giugiaro, Chevy SRV is as handsome as it gets.

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The most winning aspect of Chevy SRV's exterior is unmistakably it rear side.

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There is a circular-themed tail lamp below which lies the extra-large rear bumper embellished with twin reflectors. The proud logo of GM sits proudly in the centre of the hatch door imparting a touch of sporty look to the car.

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Some of the safety features of Chevy SRV  The body of Chevy SRV resembles a cocoon made of high-tension steel; also there is steel crash bars located at strategic places.  There are crumble zones located at the rear and the front sides.  There is a collapsible steering which reduces chances of frontal injuries to the driver in the event of an accident.

Technical Specifications of Chevy SRV1. EngineEngine Type Max. power (PS/rpm) Max. torque (Nm/rpm) Transmission

1598cc, 16V DOHC, VGIS petrol 101/5800 140/4500 5 speed manual

2. SuspensionFront Rear Shock absorbers front & rear Wheels and tyres

McPherson struts McPherson struts with dual link Twin tube gas pressure strut 185/65 R14 steel

3. DimensionsLength x width x height (mm) Wheelbase (mm) Ground clearance (mm)

4295 x 1725 x 1445 2600 185

Trends and Forces: Commodity Prices Play an Integral Role in GM's Cost of Goods 1. Steel: One of the main ingredients in cars is steel, so increases in steel prices reduce

GM's margins. GM cannot easily substitute another material for steel to reduce its costs, unlike almost any other input into car production, even labour. 2. Aluminium: Aluminium also affect GM's margins as this metal is also a significant

production input, accounting for around 300 pounds of a new car's weight. 3. Oil prices: Increasing gasoline prices inflate the day-to-day cost of car ownership.

Since consumers buy cars only infrequently, rising oil prices have only a limited impact on year-to-year car sales, but over time they cut into the industry's sales. Although oil prices have recently moderated they will likely remain definitive in the future as the global economy recovers. 4. Amidst Government Pressure, GM has geared its Vehicles toward Fuel Efficiency.

Situational Analysis: Industry Analysis 

Threat of new entrants: The threat of new entrants is low in the automobile industry since the industry is very mature and has reached great economies of scale. Some common entry barriers new automobile manufacturer’s face include insufficient startup capital, difficulty accessing distribution channels, lack of dealership availability, and extensive research and development costs necessary for product innovation.

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Power of suppliers: The bargaining power of suppliers is very low in the automobile industry as they saturate the automotive market. There are many more automotive part suppliers in relation to automobile manufacturers; thus, giving manufacturers the power to switch suppliers if necessary.

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Power of Buyers: The bargaining power of buyers is relatively high in the automobile industry because individual consumers purchase the majority of the industry’s output, which constitutes the largest source of revenue. Therefore, manufacturers must recognize consumer needs and wants, and conform to changing consumer trends in order to boost sales volume.

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Availability of substitutes: The availability of substitutes in the automotive industry is moderately low. Possible alternatives to automotive transportation include walking, riding a bike, or access to public transportation such as a bus, subway or train. The availability of such alternatives depends heavily upon the geographic location of the consumer. In cities such as Chicago or New York City, a car is not necessary due to easy subway access; however, a non-urban dweller may seek automobile access as a more viable means of transportation.

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Competitive Rivalry: Competition within the automotive industry is very strong due to a lack of product differentiation and opportunities. All manufacturers produce similar products, cars, trucks, or SUV’s; thus, making price, quality and durability, the primary and weak basis for differentiation. In attempts to increase sales and gain more market share, automobile companies often use comparative advertising to emphasize areas where it outperforms its competitors.

Competitive Analysis The automobile industry is highly competitive. The Indian automobile industry is dominated by what’s known as the ‘Big Three’: Suzuki, Tata Motors, and Hyundai Motors. The two largest foreign competitors include both Toyota and Honda. General Motors, once the leading car manufacturer in the industry, is now struggling to keep up with competition. Since Tata’s introduction of the Nano, an innovative low price small car, many other manufacturers followed suit changing the direction of the automobile industry (Bajaj-Ronalt Small Car in 2011).

Economic Analysis Since the Recession of August-September, 2008, the nation’s economy suffered from a drastic decline in consumer spending. However, the overall economy is now on the rise and continues to remain strong. In addition to the other economic improvements, petrol prices have fallen almost $50 to $60 per barrel since early August 08 to August 09. Since the boom in the economy, GM has gradually started making more profit. GM’s India reported a record growth of 15% in vehicle sales, the sales for 2009 are 7413 units compared to 6465 units in 2008 (General Motors Corporation, 2009). And over the past five years, the global

automotive industry has continually risen year-to-year growing approximately 15% from 2004-2009 (General Motors Corporation, 2009).

Social Analysis For many years, the baby boomer generation has been the primary target market for automobile manufacturers. However, as this generation nears retirement, and is spending less money, automakers are shifting their focus to younger generations; generation Y in particular. This generation is reaching a point of greater financial stability; thus, contributing greatly to the amount of consumer spending on luxury products such as automobiles. According to analysts, it is projected by 2011 generation X and generation Y combined will account for roughly 40% of total vehicle sales. Consumer trends are also shifting from oversized passenger vehicles, such as trucks and SUV’s, to smaller more economic, fuel efficient automobiles. Therefore, marketing efforts must shift to meet changing consumer demands. Such marketing efforts, however, depend heavily on geographic location of the consumer. For example, marketing a convertible in a cold climate is not as economical as marketing it in a warmer climate; therefore, the company’s marketing mix must be adjusted accordingly to geographic conditions.

PRODUCT DEVELOPMENT

Idea Generation The first step of new product development requires gathering ideas to be evaluated as potential product options. For many companies idea generation is an ongoing process with contributions from inside and outside the organization. Many market research techniques are used to encourage ideas including: running focus groups with consumers, channel members, and the company’s sales force; encouraging customer comments etc.

Screening In Step 2 the ideas generated in Step 1 are critically evaluated by company personnel to isolate the most attractive options. Depending on the number of ideas, screening may be done in rounds with the first round involving company executives judging the feasibility of ideas while successive rounds may utilize more advanced research techniques. In this point our company screens out the idea of developing the new product. Acceptable ideas move on to the next step.

Concept development and testing

With a few ideas in hand the marketer now attempts to obtain initial feedback from customers, distributors and its own employees. Generally, focus groups are convened where the ideas are presented to a group, often in the form of concept board presentations (i.e., storyboards) and not in actual working form. During focus groups with customers the marketer seeks information that may include: likes and dislike of the concept; level of interest in purchasing the product; frequency of purchase and price.

Business and analysis At this point in the new product development process the marketer has reduced a potentially large number of ideas down to one or two options. Now in Step 4 the process becomes very dependent on market research as efforts are made to analyze the viability of the product ideas. Much effort is directed at both internal research, such as discussions with production and purchasing personnel, and external marketing research, such as customer and distributor surveys, secondary research, and competitor analysis.

Product and marketing mix development Ideas passing through business analysis are given serious consideration for development. Companies direct their research and development teams to construct an initial design or prototype of the idea. Marketers also begin to construct a marketing plan for the product. Once the prototype is ready the marketer seeks customer input. In addition to gaining customer feedback, this step is used to gauge the feasibility of large-scale, cost effective production for manufactured products.

Market testing Products surviving to Step 6 are ready to be tested as real products. In some cases the marketer accepts what was learned from concept testing and skips over market testing to launch the idea as a fully marketed product. But other companies may seek more input from a larger group before moving to commercialization. The most common type of market testing makes the product available to a selective small segment of the target market (e.g., one city), which is exposed to the full marketing effort as they would be to any product they could purchase.

Commercialization If market testing displays promising results the product is ready to be introduced to a wider market. Some firms introduce or roll-out the product in waves with parts of the market receiving the product on different schedules. This allows the company to ramp up production

in a more controlled way and to fine tune the marketing mix as the product is distributed to new areas.

Comparison to competitors: Due to GM's global presence and diversity of products, the company competes in one way or another with every mass auto producer. GM continues to spend heavily on traditional advertising (including billboards and movie placements), unlike many of its lighter Asian competitors. Yet the biggest threat is still from foreign companies. The influx of foreign cars into the Indian market has had huge ramifications for the Big Three. The old method of keeping the Big Three in check, by demanding steep concessions whenever a clear leader seemed to emerge, worked both to placate workers and to maintain balance in the Indian auto industry. However, foreign companies now account for more than half of the Indian auto market. Foreign companies like Toyota and Honda are poised to dominate the mainstream, small- to medium-sized car market with their flexibility, cheaper prices, and early investments in fuel efficiency. Cars like the highly successful Tata Nano are a big challenge for GM. GM will also have to fight the newcomers in small car segment.

MARKETING STRATEGIES A. General marketing strategy 1. Niche/mainstream positioning strategy The main focus of niche positioning would be placed on consumers who are concerned about the features and comfort. The benefits would includeOne, by targeting the segment of consumers who are price conscious; Chevrolet would be able to charge premium prices. Two, Chevrolet would be able to differentiate the Precision car from other cars, because of Precision’s technological superiority over the other cars already in the market. Three, it is safe to say that, if costs were to decrease then it enables Chevrolet to reduce the losses of Precision if it were not successful.

2. Product differentiation strategy By differentiating a product, it creates a difference that sets certain products apart from other products, and also targets certain market segments. Chevrolet will need a product

differentiation strategy that will make the car unique from all other cars already available in the market. The company will also need a strategy that will appease to certain consumer segments. By coming up with this strategy, it in return will cause Chevrolet to increase profits and market share. The main area of this strategy’s focus should be placed on the design and features of the car.

3. Price/quality differentiation strategy Our main focus here is on the customers. We want them to be able to get the most for their money. By producing a superior car, that offers more qualities than the other car available in the market, at or around the same price as the competition, consumers will hopefully want to purchase the Precision car over the others. There will be more qualities offered at affordable charge. The price of the car if positioned as a mainstream product will have to be equivalent to the prices of the other cars already available on the market. If the Precision car is profitable and there is a high percentage of consumer demand, then Chevrolet might want to consider increasing the price of the car by a small margin.

4. Mission marketing strategy Chevrolet’s mission strategy is to be successful in the Indian Car market, and hope the car is not a failure. They will strive to gain a competitive advantage over other companies, while producing a profit, and satisfying the wants and needs of buyers. A goal of Chevrolet is for the car to add utility or value to its consumer’s lives.

Marketing Mix:  Product: General Motors have established a reputable name in the automotive

industry, which is widely recognized for both reliability and affordability. If GM restructures, consumers may start to view the company as undependable and lose trust if they see GM as a declining company. On the other hand, corporate restructuring could result in a new brand image that increases sales because consumers are more drawn to General Motors knowing new and more qualified employees have been hired.  Price:

Price is an important component in consumers’ assessment of value. Consumers often seek reasonable cost in relation to quality; GM offers fair prices and maximum quality. Price will not likely be affected by corporate restructuring. If corporate restructuring costs the company substantial capital then car prices may rise; however, if General Motors can maintain the brand image it has established for itself,

then consumers will continue to believe that the product is worth the financial sacrifice.  Place: Place is important in business because the product must to be easily accessible

to consumers. Corporate restructuring would not affect where GM dealerships are located, just the distribution of manufacturing lines; therefore, it would not significantly affect profit loss or gain.  Promotion: A company cannot sell a product if they do not competitively advertise

in magazines, television commercials, billboards, or other forms of media. The advertisements must cater to an appeal and convince the consumer they need to product being advertised. If General Motors advertises its automobiles as coming from a newly restructured corporation, GM can convince customers the product is improving along with internal company motives.

SWOT ANALYSIS: Strengths:  Different types of products  Reliable and hygienic products  Easy availability of products at genuine prices

Weaknesses:  Its competitors  Small cars within Chevrolet’s company

Opportunities:  New channels of distribution  Internet marketing and sales

Threats:  Exploration of world market  High level competition

PRODUCT PRICING: Competitive and related product We will undoubtedly look to market competitors for indications of how price should be set. For many marketers of consumer products researching competitive pricing is relatively easy, particularly when Internet search tools are used. Price analysis can be somewhat more complicated for products sold to the business market since final price may be affected by a number of factors including if competitors allow customers to negotiate their final price. Analysis of competition will include pricing by direct competitors, related products and primary products. •

Direct Competitor Pricing – Almost all marketing decisions, including pricing, will include an evaluation of competitors’ offerings. The impact of this information on the actual setting of price will depend on the competitive nature of the market. Marketers must not only research competitive prices but must also pay close attention to how these companies will respond to the marketer’s pricing decisions.

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Related Product Pricing - Products that offer new ways for solving customer needs

may look to pricing of products that customers are currently using even though these other products may not appear to be direct competitors.

Government Regulation: We must be aware of regulations that impact how price is set in the markets in which their products are sold. These regulations are primarily government enacted meaning that there may be legal ramifications if the rules are not followed. Price regulations can come from any level of government and vary widely in their requirements. Finally, when selling beyond their home market, we must recognize that local regulations may make pricing decisions different for each market. This is particularly a concern when

selling to international markets where failure to consider regulations can lead to severe penalties. Consequently marketers must have a clear understanding of regulations in each market they serve.

PROMOTION AND ADVERTISEMENT Product advertising is the promotion of products through a variety of media. Advertising campaigns for products have been criticized for customers and are regulated to ensure they meet defined standards. These rules vary from country to country, with all advertisements directed to consumers banned in some countries.

Campaign intentions: As with all advertising campaigns the intention is to sell a company's product. Adverts for different types of products such as health care products, personal care products etc. frequently promote the sale not just of one individual item but an entire range.

Target audience: Product advertising campaigns may be targeted to middle class and low level consumers, with different methods for each. Marketing towards people is intended to make them believe that the product would be beneficial for them.

Methods of advertising Common methods of advertising include: •

Television commercial campaigns

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Hoardings

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Online marketing

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Trade Fairs

Many companies use different methods for advertising their product. We choose two major sources for advertising; one is television because television has been one of the most

important media for marketing products and in these people sees television and second is hoardings campaign which gives proper and full information regarding the product.

LOGISTIC AND SUPPLY CHAIN The goal of supply chain is to link the market place, the distribution network, the manufacturing process and the procurement activity in such a way that customers are serviced at higher levels and yet at a lower total cost. When we create a logistics strategy it is defining the service levels at which our logistics organization is at its most cost effective. Because supply chains are constantly changing and evolving, we may develop a number of logistics strategies for specific product lines, specific countries or specific customers. We can start to develop a logistics strategy by looking at four distinct levels of our logistics organization. •

Strategic: By examining the objectives and strategic supply chain decisions, the logistics strategy should review how our logistics organization contributes to those high-level objectives.

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Structural: The logistics strategy should examine the structural issues of the logistics organization, such as the optimum number of warehouses and distribution centres or what products should be produced at a specific manufacturing plant.

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Functional: Any strategy should review how each separate function in the logistics organization is to achieve functional excellence.

Implementation: The key to developing a successful logistics strategy is how it is to be implemented across the organization. The plan for implementation will include development or configuration of an information system, introduction of new policies and procedures and the development of a change management plan.

Conclusion and Recommendation: Conclusion

To conclude, it is quite apparent that General Motors (Chevrolet) has been consistently trying to develop new operations by which they can better the company as a whole. With problems of a potential merger it has become more and more prevalent that General Motors must start acting versus waiting to act. The company has been promoting Flexible Fuel Vehicles, which has been somewhat beneficial to its sales but also to its public image. Consumers are purchasing “green” products and General Motors has been trying to follow this trend. In conjunction with the development of “green” products, General Motors is also currently undergoing corporate restructuring. In efforts to remove company debt, GM has implemented a three-year restructuring strategy. The strategy includes: the closure of nearly a dozen manufacturing plants, making substantial job cuts, introducing new automobile lines, and redeveloping General Motor’s overall marketing strategy. In order for GM to remain competitive in the automobile industry, such a strategy is necessary. Recommendation The recommended strategy is that General Motors needs to implement in order increase its market share. The Indian car industry is increasing in sales by each year and General Motor’s competitors are capitalizing on it. If GM can switch its strategy to implement fuel-efficient vehicles into its product line then consumers will realize GM’s social responsibility towards the environment. This strategy will help GM effectively compete with competitors in the future.

References: www.generalmotorsindia.com www.google.com www.chevrolet.in www.capitaline.com