Introduction This project is about, the marketing strategies and tactics, developed for the motorcycle leasing facility

situated in Khan Market Attock City. This entrepreneurial expedition started its operations in 2006, as a partnership, between Mr. Mushtaq Hussain and Mr. Latifullah. The former was in the capacity of Chief Operations Officer, whilst the former was acting like a sleeping partner, the business went adequately, satisfactory during the first couple of years, when it made the net profit of 1 million and 1.5 million respectively, but the following years the profitability dropped substantially and ultimately the inevitable happened and the partnership was torn apart in first quarter of 2009, by the exit of sleeping partner, who pulled out the total amount of 37 million from the business, at this very time former COO, took charge of the firm converting it, into a sole proprietorship. Mr. Hussain thus had to invest round about 60 million in the business to cover up the withdrawn amount. The business model of the firm under study, is to retail, the product of Ghani Automobiles against some percentage of the sales as a commission. The deficit with the supplier was 800,000 on average for the opening two years, because, the payments were regular and therefore supply was stable, bur in the later part of 2008 the deficit started to mount, and by the initial period of 2009 it mounted to almost triple of its previous level, it is due to the conflicting interests of the partners. Somehow the legal procedure got, the two parties separated and then the business was converted into the sole ownership, but the daunting task of paying the deficit was facing the newly established management of Mr. Mushtaq Hussain and Mr. Ishtiaq Hussain, CEO and COO respectively, which they faced vigilantly and nullified the deficit through opening new branches in adjacent areas of the vicinity.

Customer Analysis This facility was fundamentally developed, to fulfill the, transportation, needs of the employees serving in Pakistan Airforce, in various factories at PAC Kamra base. There are major four sorts of customers in the vicinity of the firm, which are as follows Formal and Civilians serving in Kamra General Citizens of Attock City and adjacent areas

Motivation and Unmet Needs The most of the target segment, identified, are employees with fixed compensational allowances per month, therefore, they are usually unable to make a lump sum payment to acquire a vehicle, that is the core value of this firm, to provide these people with leasing facility, with down payment of a percentage of a total price and then a customer could make fixed payment at monthly basis. Competitor Analysis There are four major competitors of the firm under concern, which are Khan Autos Meharban Autos Honda and Yamaha

The strategic group mapping of the industry is mentioned next High Quality/ Differentiation Medium Quality/ Differentiation Reasonable Quality/Differentiation High Price Medium Price Honda/Yamaha Ghani Autos Low Price

Meharban/Khan

The following points are evident from the above map, which are Yamaha and Honda have established brand names and are charging premium, due to this competitive distinctive asset, therefore, they are pursuing higher degree of differentiation, their price range is from 75K, to 85K, on average. Ghani Autos is attempting, to pursue a best cost strategy, rather risky, but proven to be effective till now. The firms supplier is focusing on R and D, and attempting to provide desired features, with some degree of differentiation. On the other hand, Khan and Meharban autos are trying to attain a low cost strategy, and they are pretty much successful in this.

Competitors Internal Analysis Following are the SWOT analyses of the competitors mentioned previously Strengths and Weaknesses of Yamaha and Honda Strengths Established brand names Exceptional quality and mileage Customer Loyalty Resale market

Weaknesses High price not affordable for majority Lack of experienced and qualified management No proper MIS system

Strengths and Weaknesses of Ghani Autos Strengths Strong public relations in Attock Excellent product quality Motorcycle is 86 kg in weight Motor cycle does 85 km in a litre of petrol Spare parts are sold at 10% discount from market rate

The culture of the firm in this study is highly bureaucratic and the decision making is very centralized and there is no proper system of the performance, compensation and development opportunities are unavailable for the employees. There is a lack of job satisfaction in the employees, the consumer feedback system is also not developed properly. Weaknesses Management is centralized Furniture at showroom is not comfortable Low morale in employees, due to lack of reward Weak bargaining power with supplier No MIS system Marginal level of marketing Weak bargaining power with supplier

Lack of mission statement

Strengths and Weaknesses of Khan Motors / Meharban Autos Strengths Access to the lower priced suppliers Excellent financial position Experience and expertise in spare parts and maintenance Technical expertise Strong bargaining power with suppliers

Weaknesses Lack of scientific management Decreasing customer loyalty, due to absence of customer relationship management

Market and Environmental Analysis Entire business environment of Pakistan is going through shekels, so it is no different for the automobile industry, the increasing tax rates, terrorism and ever growing inflation left the impact on the business condition in this industry as well. The industry is growing rapidly though, but it has an immense requirement of investment in the initial stage, so the entry and exit barriers are high, therefore the profitability decreases and the distressed businesses keep on fighting in the market, because of tremendous financial and credibility loss attached with the painful withdrawal. The technological orientation is almost absent in the top management of these businesses, they are governed by retired army personnel or self trained mechanics, that is the sole reason, of their failure to understand and comprehend modern management, which primarily revolves around a machine called computer, which they cannot operate and also discourage its use. There is no expansion oriented mindset in this industry, the people are doing businesses the old fashion way, no long term planning is done, even proper accounting cycle is rare to find in this industry. There are untapped markets segments present in the industry, but due to lacking analytical skills, in the top management this industry, they are remaining untouched for a very long time, that are Growing number of students and professionals in schools and colleges in adjacent areas Increasing number of migrants from different cities of Pakistan

The industry, trend is shifting focus, towards quality, rather, than price and there is a growing concern in the customers, about the higher maintenance cost of the bikes available at a lower cost, therefore, they are interested in the purchase of differentiated product, with acceptable quality, another trend, we came across, is the limited buying power of the customer, which doies not allow, him to purchase the highly differentiated and quality product such as Yamaha and Honda, therefore the ideal product in the market, is Ghani bikes, but the problem of supply fluctuation is almost destroying the firm, because every now and then the showrooms are vacant, causing the customer dissatisfaction to increase and the profitability and good will of the company to decrease. Alternative distribution channel, we identified, is not a viable one in this setting, that is the internet, but majority of the people, we are dealing with; most of the time are computer illiterate, making it very difficult to utilize this distribution channel effectively. The Current Key Success Factors in this industry are Technical expertise Ability to differentiate Customer focus Departmentalization

The Future Key Success Factors are Creative marketing Employee performance management Training and development especially in IT

In our understanding the need for IT and Computer training would become necessary in this industry, in coming few years, because, this trend is growing extensively in the surrounding and supporting industries. Opportunities People are going abroad, which is increasing their disposable income Population of Attock is growing 12% annually New schools and colleges are opening, increasing the demand for bikes in students Demand for Bikes is increasing 6.5% semi annually, due to poor transportation facilities Possessing a bike is considered stylish among young people

Threats Main competitor is offering product at low price People are switching to cars, due to dangers in biking Taxation on imports are increasing by 3% annually Rising petrol prices currently at 86 Rs./ liter Barriers to entry in motorcycle industry are lowering, due new Chinese brands

Business Portfolio The current portfolio of the business, comprises of two major departments, which are highly interlinked with one another, which are as follows Sales department for Motor bikes Maintenance and spare parts

The first department under consideration is, the fundamental function of the, business, selling the bikes and then booking the payments of the customers, also receiving instalments from the customers as well. This functional department contains the sales force of two personnel, who are majorly responsible for dealing the customers and their grievance, as well. The investment level is mentioned above in the introduction section The other department, is concerned, with the maintenance and tuning of the bikes which are being sold, thus providing after sales services, while the investment in this area is around 150,000 initially. Strategy Development This business concerned, in this brief report, is targeting to achieve the best cost strategy and develop a competitive advantage in the marketplace. The competencies, necessary for the attainment of this goal are as follows Ability to differentiate the product, fairly, with mostly acceptable features in the product The capability to receive, process and make necessary modifications in the product, in the light of the customer feedback The offering of customization in the product, according to the various needs and wants of the customers The initiation of computerized, integrated and coordinated supply chain management, among various similar facilities in the nearby areas is imperative, to the success in the marketplace

Core Value Proposition The core value proposition of the product of the firm under study, is to differentiate the product from others on the basis of differentiation and quality within the cost barriers to maximize the profitability. The main purpose is to balance out the, benefits and cost to attain the ultimate purpose of the business the key differentiating features of the product are The ability to cover 85 Km in one litre of petrol on average This bike is heavy compare to similar products, offering better road grip Due to advanced Chinese technology, the engine has an ability to vent out the wastage, causing the engine life to increase The capability of the motor bike to take the load of 25 Kg, makes it ideal for commercial use.

Porter Five Forces Model for Auto Industry in Attock The following are the brief descriptions of each force specified, by Michael Porter, in 1970s Rivalry among the Competitors The, rivalry among the competitors is high in this particular, industry, because of the fact, that the entry and exit barriers are high, therefore, the number of rivals is limited and few, therefore, the rivalry is fundamentally based on the price and there is a low degree of the differentiation, the high stakes riding on the exit and loss of substantial investment induces the weak and struggling competitors, stay in the market and fight it out remaining in the market, impacting the dent on the profitability of the follow competitors, therefore the rivalry is increasing and the profitability is decreasing in the industry overall. Availability of the Substitute Products The economic availability of the all types of the cars, with the bank leasing services, caused a great negative impact on the motorcycle industry, by diminishing the demand of the product under study; the main reasons of this development are as follows The trend of fear, growing in parents regarding dangers of bike riding High prices of petrol High maintenance cost associated with the bikes Lack of enough seating capacity Growing number of individuals per family

Technological Situation The technological orientation is almost absent in the top management of these businesses, they are governed by retired army personnel or self trained mechanics, that is the soul reason, of their failure to understand and comprehend modern management, which primarily revolves around a machine called computer, which they cannot operate and also discourage its use. There is no expansion oriented mindset in this industry, the people are doing businesses the old fashion way, no long term planning is done, even proper accounting cycle is rare to find in this industry. The industry are very obsolete, in the continuum of the technological, growth, the drawbacks of the industry, are as follows The is no digital integration, among different outlets of the supply chain of the business we are studying The ability to understand the future implication of current decision is lacking

Bargaining Power of Suppliers The bargaining power of the suppliers are often high in the financially intensified industry, because all of the products are coming from few but huge and powerful companies, which are having a substantial, margins riding on the sales, therefore, the retailers are in the weak position and are directed, about the different policies of the business. The case with the industry understudy is also no different, with the above discussion. In the future the power of the supplier will going to increase, in the future, bercause of the following reasons Inability of the retailers to build a backward integration, due to immense investment requirement Growing inflation will rise the prices, so that the margins of the suppliers will rise Absence of strategic decision making on the behalf of the top management of these business will only increase the strategic influence of supplier in the business

Bargaining Power of Customers The bargaining power of the customers is also on the rise, because of the introduction, of economic motorbikes of the Chinese origin, because they are now enjoying, more choice at reasonable prices, so the switching cost is also, dropping for the customer, therefore, it is becoming tough for the businesses, to retain valuable customers, and the profitability is also, diminishing due to this fact.

Recommendations The recommendations are as follows The Ghani Autos should, integrate backward, to increase, their bargaining power, with the supplier The digital integration and supply chain management is necessary The decision making must be decentralized, because the front line employees are in the direct relation, with the customers and can educate us about consumer behavior The compensation and performance management should be linked with the performance, MBO may be useful The proper computerized costing and accounting cycle must be maintained and uit is very imperative to run different statistical procedures to determine demand