Audi - For Merge1

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Type: Private company

Industry: Automotive industry

Founded: Zwickau, Germany (16 July 1909)

Founder: August Horch

Headquarters: Ingolstadt, Germany

Number of locations Production locations: Germany: Ingolstadt & NeckarsulmHungary: Gyr Belgium: BrusselsChina: ChangchunIndia: AurangabadBrazil: Curitiba

Area served WorldwideKey people Rupert Stadler

Chairman of the Board of Management,

Wolfgang Egger Head of Design

Products: Automobiles, Engines

Production output 1,143,902 units (2010)(only Audi brand)

Revenue ¼35.441 billion (2010)(US$52.57 billion USD)(including subsidiaries)

Profit ¼1.850 billion (2009)(US$2.74 billion USD)

Total assets: ¼16.832 billion (2009)(US$25 billion USD)

Total equity: ¼3.451 billion (2009)(US$5.12 billion USD)



Employees: 46,372 (2009)

Parent: Volkswagen Group

Subsidiaries

y Audi do Brasil e Cia (Curitiba, Brazil)y Audi Hungaria Motor Kft. (Györ, Hungary)y Audi Senna Ltda. (Brazil)y Automobili Lamborghini Holding S.p.A (Sant'Agata Bolognese, Italy)y Autogerma S.p.A. (Verona, Italy)y quattro GmbH (Neckarsulm, Germany)

Website: www.audi.com



Audi: the number one premium brand

The debate on climate change, the future availability of fossil fuels and social megatrends suchas increasing urbanization are presenting new issues of interest to customers. In the light of thesechanges, the Audi Group placed its core brand Audi on a more future-proof footing in the 2010

fiscal year through Strategy 2020. With its vision of ³Audi: the number one premium brand,´ ithas set itself the goal of taking on the lead role in the premium segment worldwide. The goals of Strategy 2020 focus on lasting corporate success, underpinned by sustainable actions. The AudiGroup therefore regards it as a self-evident aspect of corporate responsibility that it takes accountof the issues of ecology and social responsibility when defining the strategic direction of its core business.

Mission: ³To delight customers worldwide´

The mission statement ³We delight customers worldwide´ is at the very core of the Company¶sdrive to become the number one in the premium segment. This means in practice that the Audi brand offers its customers emotional, technologically advanced products that are particularlysophisticated and reliabe. The brand with the four rings furthermore intends to delight itscustomers with the best brand experience available ± hard evidence of the Audi brand values³sophisticated,´ ³progressive´ and ³sporty´ is provided at every point of contact with thecustomer.



A highlight of 2010 for the Audi brand was the innovative market launch of the Audi A1. Aswell as making intensive use of the Internet and social media channels, it set up the ³A1 City´world of discovery at Munich Airport. Between June and October 2010 the public was given theopportunity for an in-depth encounter with the new model. With the aid of the new showroomconfigurator, those interested were quickly able to configure their personalized A1 on large-

dimension flat screens, giving them lifelike, three-dimensional impressions of their chosenversion. Product and investment decisions likewise focus on delivering customer benefit. Their successful implementation hinges on the employees, who demonstrate immense expertise, agilityand passion for the products of the Audi brand.

Superior financial strength

In keeping with a value-oriented corporate management approach, growth only meets the premium standards of the Audi Group if it is simultaneously profitable. It therefore remains akey focus of Strategy 2020 that qualitative growth is a priority strategic corporate goal. Long-term superior financial strength can be achieved above all through effective and efficient

structures and processes, the ongoing optimization of costs and systematic investmentmanagement. A high level of self-financing furthermore helps to preserve the Audi Group¶sability to invest and act. The aim therefore remains to cover investment from self-generated cashflow.

Continuous growth

The basis for continuous growth is the Audi brand¶s attractive product range, to which numerousnew models were again added in the 2010 fiscal year as part of the long-term model initiative.The new Audi A8 as well as the Audi A1 and A7 Sportback models are delighting customers

with their emotional design, sportiness, efficiency and everyday suitability. The market launch of the ultra-sporty models S5 Sportback, RS 5 Coupé and R8 Spyder as well as improved versionsof the Audi A3 and Audi TT car lines were also part of the stunning new product portfolio. Themodel range of the Audi brand will continue to grow ± it is set to reach 42 models by 2015.

The Company intends to achieve a delivery volume of 1.5 million vehicles of the Audi brand by2015. The Audi Group will continue to place the focus on quality alongside continuity of growth.In order to realize its growth plans, the Company is furthermore stepping up its activities ininternational auto markets. The Audi Group is thus steadily expanding its production network and increasing the number of dealer and service outlets in important sales markets.

Image leaderA strong brand is the basis for lasting success. The Audi Group is therefore eager to keepsteadily improving its image position above all through the Audi brand¶s attractive productrange, and to establish an emotional bond between its customers and the brand. The public¶senthusiasm for the Audi brand and its products was again reflected in numerous national andinternational awards in the 2010 fiscal year.



Most attractive employer

Steadily improving its appeal as an employer is of particular strategic importance to the AudiGroup, because the Company is reliant both now and in the future on having well-qualified,dedicated employees if it is to realize its strategic goal of becoming the number one premium

brand.

As well as being able to offer them challenging tasks, the Audi Group provides its personnelwith attractive working conditions, commensurate pay and high job security. Regular internalsurveys of the workforce confirm a high level of employee satisfaction. Numerous externalsurveys have additionally confirmed the high appeal of the Audi Group as an employer.



The auto manufacturing industry is considered to be highly capital and labor intensive. Themajor osts for producing and selling automobiles include:

y Labor - While machines and robots are playing a greater role in manufacturing vehicles,there are still substantial labor costs in designing and engineering automobiles.

y

Materials - Everything from steel, aluminum, dashboards, seats, tires, etc. are purchasedfrom suppliers.y Advertising - Each year automakers spend billions on print and broadcast advertising;

furthermore, they spent large amounts of money on market research to anticipateconsumer trends and preferences.

The auto market is thought to be made primarily of automakers, but auto parts makes upanother lucrative sector of the market. The major areas of auto parts manufacturing are:

y Original Equipment Manufacturers (OEMs) - The big auto manufacturers do producesome of their own parts, but they can't produce every part and component that goes into a

new vehicle. Companies in this industry manufacture everything from door handles toseats.y R eplacement Parts Production and Distribution - These are the parts that are replaced

after the purchase of a vehicle. Air filters, oil filters and replacement lights are examplesof products from this area of the sector.

y R ubber Fabrication - This includes everything from tires, hoses, belts, etc.

In the auto industry, a large proportion of revenue comes from selling automobiles. The partsmarket, however, is even more lucrative. For example, a new car might cost $18,000 to buy, butif you bought, from the automaker, all the parts needed to construct that car, it would cost 300-400% more.

Over and above the labor and material costs we mentioned above, there are other developmentsin the automobile industry that you must consider when analyzing an automobile company.Globalization, the tendency of world investment and businesses to move from national anddomestic markets to a worldwide environment, is a huge factor affecting the auto market. Morethan ever, it is becoming easier for foreign automakers to enter the North American market.

Competition is the other factor that takes its toll on the auto industry; we will discuss this in moredetail below under the Porter's 5 forces analysis

K ey Players

Two of the largest foreign car manufacturers are:

y Toyota Motor Coy Honda Motor Co

K ey R atios/Terms

Fleet Sales: Traditionally, these are high-volume sales designated to come from large



companies and government agencies. These sales are almost always at discount prices. In the past several years, auto makers have been extending fleet sales to small businesses and other associations.

Seasonally Adjusted Annual Rate of Sales (SAAR): Most auto makers experience increased

sales during the second quarter (April to June), and sales tend to be sluggish between November and January. For this reason, it is important to compare sales figures to the same period of the previous year. Sales Reports: M any of the large auto makers release their preliminary sales figures from the previous month on a monthly basis. This can give you an indication of the current trends in theindustry.

Day Sales Inventory = Average InventoryAverage Daily Sales

The sales reports (discussed above) are released monthly. Most automakers try to make

dealerships hold 60 days worth of inventory on their lots. Watch out if sales inventory climbssignificantly above 60 days worth. Sales fluctuate month-to-month, but you shouldn't seesustained periods of high inventory.

Analyst Insight

Automobiles depend heavily on consumer trends and tastes. While car companies do sell a large proportion of vehicles to businesses and car rental companies (fleet sales), consumer sales is thelargest source of revenue. For this reason, taking consumer and business confidence intoaccount should be a higher priority than considering the regular factors like earnings growthand debt load.

Another limitation of analyzing an automaker is taking a look at whether a company is planningmakeovers or complete redesigns. Every year, car companies update their cars. This is a part of normal operations, but there can be a problem when a company decides to significantly changethe design of a car. These changes can cause massive delays and glitches, which result inincreased costs and slower revenue growth. While a new design may pay off significantly in thelong run, it's always a risky proposition.

For parts suppliers, the life span of an automobile is very important. The longer a car staysoperational, the greater the need for replacement parts. On the other hand, new parts are lastinglonger, which is great for consumers, but is not such good news for parts makers. When, for example, most car makers moved from using rolled steel to stainless steel, the change extended

the life of parts by several years.

A significant portion of an automaker's revenue comes from the services it offers with the newvehicle. Offering lower financial rates than financial institutions, the car company makes a profiton financing. Extended warranties also factor into the bottom line.

Greater emphasis on leasing has also helped increase revenues. The advantage of leasing is that it



eases consumer fears about resale value, and it makes the car sound more affordable. From amaker's perspective, leasing is a great way to hide the true price of the vehicle through financingcosts. Car companies, then, are able to push more cars through. Unfortunately, profiting onleasing is not as easy as it sounds. Leasing requires the automakers to accurately judge the valueof their vehicles at the end of the lease, otherwise they may actually lose money. If you think

about it, the automaker will lose money on the lease if they give the car a high salvage value. Acar with a low salvage value at the end of the lease will simply be bought by the consumer andflipped for a profit.

Porter's 5 Forces Analysis

1. Threat of New Entrants. It's true that the average person can't come along and startmanufacturing automobiles. There is a big threat of new entrants because there is a bigmarket and no one here to manufacture.

2. Power of Suppliers. The automobile supply business is quite fragmented (there are manyfirms who can buy spare parts). Many suppliers rely on one or two automakers to buy a

majority of their parts. If an automaker decided to switch suppliers, it could bedevastating to the previous supplier's business. As a result, suppliers are extremelysusceptible to the demands and requirements of the automobile manufacturer and holdvery little power.

3. Power of Buyers. Historically, the bargaining power of automakers went unchallenged.Suzuki consumer became disappointed with many of the products being offered bycertain automakers and began looking for alternatives, namely Toyota and Honda etc. Onthe other hand, while consumers are very price sensitive, they don't have much buying power as they never purchase huge volumes of cars.

4. Availability of Substitutes. Be careful and thorough when analyzing this factor, we arenot just talking about the threat of someone buying a different car. We need to also look at the likelihood of people taking the bus, train or airplane to their destination. The higher the cost of operating a vehicle, the more likely people will seek alternative transportationoptions. The price of gasoline has a large effect on consumer¶s decisions to buy vehicles.SUV¶s and sport utility vehicles have higher profit margins, but they also consume highfuel as compared to smaller sedans and smaller SUV¶s. When determining theavailability of substitutes we should also consider time, money, personal preference andconvenience in the auto travel industry. Then decide if one car maker poses a big threatas a substitute.

5. Competitive R ivalry. Highly competitive industries generally earn low returns becausethe cost of competition is high. The auto industry is considered to be an oligopoly, whichhelps to minimize the effects of price-based competition. The automakers understand that price-based competition does not necessarily lead to increases in the size of themarketplace; historically they have tried to avoid price-based competition, but morerecently the competition has increased rebates, preferred financing and long-termwarranties have helped to pull strategy in customers, but they also put pressure on the profit margins for vehicle sales.



SITUATION ANALYSIS:

It is the first step in developing a marketing plan. The main purpose of this analysis is to discover the distributiontrends, company¶s product and most importantly the situation of the markets in which the company has decided tocompete in.

It includes the following two steps:

Internal analysis

External analysis

i. Micro environment

ii. Macro environment

Internal Analysis:

Market Share: Audi is an exceptionally renowned brand when we talk about vehicles or automobile industry. Audilaunched many models keeping in mind the preferences of its customers.

Customers¶ Loyalty: Audi has been serving its customers since long and now at this point of time has made its mark in attracting quite a large number of loyal customers. So Colgate Palmolive has succeeded in making quite a largenumber of loyal customers by fulfilling their demands up to their perceived value and expectation.

Market attractiveness: Following figure illustrates the market attractiveness for Colgate Palmolive. This can help ingaining an idea about the acceptance of the new product which is Colgate Junior. External Analysis

Macro: The macro environment consists of larger societal forces that affect the micro environment includingdemographic, economic, natural, technological, political and cultural forces.

PEST Analysis:

Political Factors: Political factors play a vital role for the business prevailing in the country. If the government isinactive then the company advances at a standard rate but the other way round, a drastic fall can be seen. As weknow that our Pakistan¶s politicl environment is unexpected some time they promote industrial sector andsometimes not. Our target market is not only pakistan, we can create the luxuary cars to the Middle east market. Butwe can see the red tape barriers in creating a production plant.

Economical Factors: Another imporatant external force that directly affects our decisions is the economic variation.If a country experiences inflation then it will have a negative impact on the businesses running in that country. Soour product is directly influenced by this factor. This factor negatively effect on our production and sales.

Socio-cultural factors: The main forces affecting decisions about our product are the social and cultural factors.Before taking any decision we have to keep in mind the specific cultural key factors for our survival in the industry

because people will repel the product that their culture do not prefer.



Technological factors: Technolgy is a factor whose value cannot be ignored. Technologies vary with the passage of time in all industries. We also make our techniques and methodologies up to date for keeping our product preferablein the market. For example we will provide fool proof security systems for cars, we can produce low emissionvehicles especially for pakistani automobile users.

Micro: The micro environment consists of the factors close to the company that affect its ability to serve its

customers the company, suppliers, marketing intermediaries, customer markets, competitors and publics.

Porter¶s 5 Forces:

Competitive Rivalry (High): Our competing firms include Toyota and Honda which are in this field and pursuing thesame purpose.

Threat of Entrants(High): As the international market is rapidly growing so there is always a threat that newcompanies are going to jump into this industry for pursuing the same objective.

Threat of substitute(Low): Threat of substitute is quite low because most of the people prefer using toothpastesinstead of going for toothpowders or herbal stems for dental cleansing and there are not many subsitutes in themarket for toothpastes.

Bargaining Power of Suppliers(Low): Bargaining power of suppliers will be quite low because colgate is a leading brand so suppliers wish to maintain stability in delivering their raw matarial to the firm without fluctuating the prices.

Bargaining Power of Buyers(Low): It is quite low because there are not many substitutes in the market to which theconsumer can switch. The prices are fixed and customers are not provided with enough opportunity to alter theconsistent prices.

SWOT Analysis:

Strengths:

The strength of Colgate is as follows:-

Qualified sales staff

Strong financial backup

Luxuary Cars

First time in the Pakistani market we are going to introduce the Luxuary cars. It will provide you the maximum

comfort in your journey.

Maximum Protection

We will provide the maximum protection to our customers, that makes their journey safer and easier. We also produce Bullet proof cars on the demand of customer.

Friendly Environment



Audi makes a user friendly cars that a user easily understand nad and utilize its maximum functoins.

Weaknesses:

Due to high rate of taxes our prices are higher

Giant competitors like Toyota and Honda.

OPPORTUNITIES:

In the Opportunities of the Audi AG are«

Large investment:-

High investment is the biggest Opportunity for the Audi AG.

Intensive distribution:-

As the car is daily useable so the company is using intensive distribution which provides an Opportunity for thecompany that the aou car brands available at every shop and due to this the sales of the company is increasing day

by day.

Stable economic conditions:- Stable economic conditions boost the growth of the product.

Globalization:- As the world is becoming a global village, so taking it as an opportunity we can consider it to be a prospect for Colgate orange.

Technology:- Technology is at its bang.

Threats:

In the threats that Colgate Orange feels there are «

Chances of Failure:-

As the company is new in the market, may be the people accept the new taste in toothpaste field or may be reject thenew product. The company has no idea about its chances of success. Also the company has an idea that may be this

product is failed in earning the market share oral care field because there are usually 90% chances of failure of new product in the market. It¶s the threat for the company that disturbs the company management.

Competitors:-

In Pakistan there are many companies in the field of toothpaste manufacturing so there is a huge rate of competitionin the market. Some international companies are also offering their products of this category. China is also offeringtheir products at lesser price so this is another threat for the Colgate-Palmolive company and also for their productthat is Colgate Orange.

Unstable political conditions.



OBJECTIVES:

Objectives provide the basis for any firm to stand. Every firm, before being a part of any industry, plans on what itactually wants to achieve. These objectives are very important and help the management as well as the staff to seehow they can get what they want over a specifis period of time. These objectives must be SMART enough to work upon. SMART stands for:

1. Specific ± Objectives should specify what you actually want to achieve.

2. Measurable ± You should be able to measure whether the objectives are being met or not.

3. Achievable ± The objectives you set should be achievable and attainable.

4. Realistic ± Keeping in mind your resources, it should be realistic to achieve the predefined objectives.

5. Time ± When you are suppose to achieve the objectives. (Time duration)

Objectives of Colgate Junior:

We will create 50% awareness of our product to the target customers in 3 months.

Increase the net profit to more than 25% of the sales by the end of 2009.

To gain 10% of the market share by the mid of 2009.

To introduce our product also in Sindh and NWFP somewhere around 2010.



MARKETING STRATEGY:

Strategy is a decision which will affect all the subsequent tactics. Marketing strategies are the means by whichobjectives will be achieved. It reflects the company¶s best opinion as to how it can most profitably apply its skillsand resources in the marketplace. Marketing strategy is the broad statement of the way in which the organizationsets out to achieve these objectives. Included within this would be a series of decisions on the markets in which the

organization will operate the type of product it will offer and the basis of the competitive stances. Strategies endowus with a broad direction directing the way through which we can achieve the desired position or objectives.

It includes:

Market Segmentation

Market Targeting

Market Positioning

Market Segmentation:

Markets consist of buyers and buyers differ in one or more ways. They may differ in wants, resources, locations, buying attitudes and buying practices. Dividing a market into smaller groups of buyers with distinct needs,characteristics or behaviors who might require separate products or marketing mixes. This is what we call marketsegmentation.

To target the market in a better way, we have divided our market on the basis of following four variables:-



Geographic

Demographic

Psychographic

Behavioral

Geographic

We have divided Pakistan in four segments on the basis of provinces. But our targeted segment will be the biggestProvince of Pakistan, Punjab keeping in mind the factor of population. As Punjab is the biggest province accordingto population (as depicted in the subsequent pie chart) so we will start our business from Punjab. We have selectedPunjab for different reasons. One major reason has been mentioned earlier that Punjab is the biggest province of Pakistan and this is the safest market to do business. Some other reasons are that Punjab is the most prospered anddeveloped province and there are much developed cities than other provinces like Lahore, Multan and Faisalabad,Islamabad and Rawalpindi etc. With the passage of time we will expand our business all over the country.

Ref:- Web1

Demographic

The basic selected variable from demographic segmentation is age. Our product (Colgate Junior) is specificallymanufactured for kids. This is the reason why we will target kids from 4 to 9 years of age. As mentioned earlier, the

product is designed keeping in mind the younger population nevertheless people ranking above the age limit canalso utilize our product as it is not a detrimental product.

Psychographic

Psychographic segmentation has been done on the basis of social class. Middle class and High class will be targeted because our product will not be within the means of middle class society. We will specifically design our marketing

strategy according to our selected segments.

Behavioral

According to a national survey by Colgate Palmolive in 1999 only 16% of the total population of Pakistan had beenusing toothpastes as a mean of daily oral cleansing. Since now toothpaste is a product which is not used occasionallyin urban areas round the country. People use toothpastes daily and their attitude towards toothpaste is quite positive

because dentists advise to clean teeth after every meal and at least twice a day for healthy teeth. Kids are speciallyadvised to use toothpaste because of different reasons. So to attract the kids towards toothpaste we are introducingorange flavor of Colgate (as orange flavor proved to be the most demanding in accordance with our survey).

Ref: See Index

Market Targeting:

Market segmentation reveals the firm¶s market segment opportunities. The firm now has to evaluate the varioussegments and decide how many and which segments it can serve best. A target market consists of a set of buyerswho share common needs or characteristics that the company decides to serve. Target marketing can be carried outat several different levels. The company can target very broadly (undifferentiated marketing), very narrowly (micromarketing) or somewhere in between (differentiated or concentrated marketing).



Colgate Palmolive is serving customers through ³Differentiated Marketing´. Using different flavors and alterations,it has focused on people with different age groups and with different preferences. For example colgate launched aflavor of miswak for people who preferred miswak to paste thereby attracting new customers having differentattitude towards a product.

Colgate Junior by Colgate Palmolive is now planning to be part of the besieged customer group (children). It is

basically an orange cooling crystal gel that is specifically manufactured for kids standing somewhere between 4 to 9years. Kids of this age group normally do not like brushing their teeth. This flavor is preferred by the majority of kids (as stated in the market research) so they would love to try this new tasty toothpaste.

Market positioning:

Market positioning involves the way a product is defined by customers on important attributes. It is the place the product occupies in consumer¶s minds relative to competing products. The core strategy is the matching of companystrengths and market opportunities and has two components:

Identification of group of customers to whom the company can clearly show it has a differential advantage.

The firm needs to position its offerings in the customer¶s mind.

Our first priority is to maintain the good image of our brand in the mind of our customers by introducing a new product of an equivalent quality. We have to position our product in market in a way that can attract more loyalcustomers.

Positioning Statement:

Perceptual Map:

In planning the positioning strategies, marketers often prepare perceptual positioning maps, which show consumers perception of their brands versus competing products on important buying dimensions.

Here we can show our position by this graph. We want our customers to retain their belief that we provide themquality products within their budgets as we believe quality never goes out of style and though we never compromise

on quality. The graph stated below depicts some of the main pursuers in the market.

Our product can be placed in the first quadrant, being superior in quality. As far as price is concerned, to someextent it is more than the competitors and can be considered as slightly more than the average prices. We canwitness from the above graph that close-up and pepsodent are the close competitors of Colgate, having slightly less

prices than Colgate.



Differentiation:

Our competitive advantage is superior quality of fruity crystal gel toothpaste with maximum calcium and fluoride.

As currently we are in die slowly stage. Due to having the edge of strong brand name the range of products isalready efficient. This strong image is enabling our product to win the confidence of target market and increase itseffectiveness in a short span.

And the combination of both effectiveness & efficient will drive our product to the target box (thriving).

BCG Matrix:

The BCG Matrix was created by the´ The Boston Consulting Group´ (BCG) and it became one of the most well-known portfolio management decision making tools in the early 1970's. It is based on the product life cycle theory,

and it is used to prioritize the product portfolio in a company or department. There are two dimensions - marketshare and market growth. The basis idea in using the Matrix is that the higher the market share a product has, thehigher the growth rate and the faster the market for that product grows.

Ref: Web 2

In the above illustration, we prospect our product Colgate Junior to be in QUESTION MARK box. As the product is being launched by a company already running successfully in oral care industry i-e Colgate Palmolive, so the product has intensive growth rate and market acceptability. As far as market share is concerned, a newly introduced



product will have a low market share but with the passage of time Colgate Junior will gain rigorous sales throughour promotional strategies. At that echelon, we will be moving towards the star box. So STAR will be our ultimateand prior location.

Briefly, the strategy would be intensive cash investment to keep the product on the track and then transforming the product to the maximum revenue generator. . The profit share will increase parallel to the ratio of growth. Time is

the main factor to gain require target of market share & growth. As a result of 'economies of scale' (a basicassumption of the BCG matrix), it is assumed that these earnings will grow faster the higher the share.

Ansoff's product/market expansion grid:

In this grid strategies are made on the basis of products and markets.

We will adopt the product development strategy because we are launching a new product for existing market, as themarket for kids already exists.

Product development strategy:

Developing new products for existing market is product development as shown in the above table. Productdevelopment includes modified or new product to current market. Our new product (Colgate Junior) is a producttargeting an existing market (kids market). We are offering new flavor with the new style in toothpaste. Our toothpaste also contains ingredients (maximum calcium and fluoride) which are good for the strength and shine of teeth. As kids usually don¶t like to brush teeth which is a problem for the parents, that's why our product is designedaccordingly that will attract kids and urge them to use toothpaste daily. We have selected orange flavor because lotsof kids prefer orange flavor (as stated in our market research) in their candies, jellies etc.

Pull Strategy:

Colgate Junior will implement pull strategy in order to be a magnet for customers. This will be done through strongadvertisement and awareness strategies. Magazines, newspapers, billboards and cable networks are considered to

play an imperative role for this purpose. This scheme will pull the tendency and demand from the consumers. We

will also focus on arranging events for kids like drawing competitions, puppet shows and color festivals for kids as amean of promoting Colgate Junior.

Push strategy on the other hand can also serve the same purpose of promotion. By giving special considerations tothe retailers, we can push our product to the end consumers. But the main focus will definitely be on pull strategy i-eto urge the consumers for the demand of the specific product and thus making loyal customers for the brand.

Competitive moves:

There are four competitive moves:

Market leader

Market challenger

Market follower

Market nicher

Our firm is the market leader so we will adopt market leader strategies.



Market leader:

We will expand our market with the time. We will launch our product (Colgate Junior) in the other provinces of Pakistan like Sindh and N.W.F.P as stated in our objectives.

Customer satisfaction is a key parameter that makes protecting market share possible. It indicates possible

weaknesses in operations and addresses areas where to charge. Measuring customer satisfaction is thereforeimportant task of marketing department of the company. Other important task is to benchmark competitors, and tryto find out how they tempt customers, what will be their following moves and implement lucrative moves first. Sowe will provide value to our current customers to retain them because the customers are big assets of a firm. We willalso analyze the competitor's strategies, what they are offering to their customers and how they tempt their customers.

Competitive Positioning Strategy:

Consumers typically choose products and services that give them the greatest value. Thus marketers should positiontheir brands on the key benefits that they offer relative to competing brands. There are many competitors in themarket but our close competitors are Close-up, Pepsodent and Medicam toothpaste. They are also providing goodquality pastes but our competitive edge is superior quality fruity crystal gel with maximum calcium and fluoride.

This will distinguish our product from our competitors. Our overall positioning will be MORE FOR MORE. ³Morefor more´ positioning involves providing the most upscale product and charging a higher price to cover the higher costs. Colgate Junior will be a high priced and a high quality paste whose price corresponds substantially with itsquality. This product will give prestige to the buyer and a satisfaction of using a desirable brand. Using superior quality in association with this strategy also symbolizes status and life style. Often the price difference exceeds theactual increment in quality.



TACTICS:

Tactics include all the techniques and methodologies used to achieve the objectives. More precisely, the way we canget a hold on our objectives and provide the details of strategies via individual tactical tools.

It includes Marketing Mix which is stated as follows:

Marketing Mix:

Price:

Price has been a major factor, affecting the buyer¶s choice. Price is the only element in the marketing mix that produces revenues as our required audiences are kids so our price range will be according to the quantity and size of the tube. We will set prices of our product by taking into account all internal factors including marketing objectives,marketing mix strategy, costs etc and external factors including nature of the market and demand, competition andsome other environmental factors like economy and governmental issues. The price varies as we are launching our

product in three sizes occupying our targeted consumers. The product will consist of a 30g, 50g and 70g tube.



Available sizes Prices

30g Rs 20

50g Rs 35

70g Rs 50

New Product Pricing Strategy:

New product pricing strategy includes all the possible ways through which a product can be made more adoptableand affordable by the customers. We can either go for market penetration or market skimming strategy. In market

penetration the producers set low prices of the product in order to penetrate the market. Through this way the product can attract a large number of buyers and can raise the potential of winning a lump of market share. Incontrary to it, market skimming demands a high price for the new product in order to put on more revenues. Both thestrategies are adoptable while keeping in mind the pre-defined objectives of the firm.

Market Skimming Strategy:

In our case, the product Colgate Junior is an extension of renowned and famous toothpaste manufacturer¶s, ColgatePalmolive Ltd that has pre-occupied the desired position in the mind of its target customers. So charging high for thenew product will be more suitable as they are also producing a high quality product with an aim of earningmaximum revenue from the target customers. The company decides to adopt this strategy for the impediment of newentrants in the market thus reducing the threat of new entrants.

Value Based Pricing:

An increasing number of companies are basing their prices on the product¶s perceived value. Value based pricinguses buyers¶ perception of value not the seller¶s cost, as the key to pricing. Value based pricing means that themarketer cannot design a product and marketing program and then set the price. Price is considered along with other marketing mix variables before the marketing program is set.

Colgate Junior is going to set its target price based on customer perceptions of the product value. The target valueand price will then drive our decision about product design and what cost can be incurred. As a result, our pricingwill begin with analyzing consumer needs and value perceptions and price will be set to match the consumers¶

perceived value, keeping in mind the fact that ³good value´ is not the same as ³low price´.

Geographical Pricing:

A company must decide how to price its product for customers located in different parts of country or world.Deciding whether the company should risk losing the business of more distant customers by charging them higher

prices to cover the higher shipping costs or it should charge all customers the same prices regardless of location.

We can price the customers in all the following possible ways:

y College Scholarship

y Home Care

y Home Cares

y Degree Program

y Degree Programs



FOB-origin pricing

Uniform delivered pricing

Zone pricing

Basing-point pricing

Freight-absorption pricing

Colgate Junior is supposed to offer through Uniform delivered pricing scheme.

Uniform delivered pricing:

Colgate Junior has a uniform delivered pricing strategy in which it charges the same price for all customers,regardless of their location. The company offers the same fixed price for the product in all regions of Punjab. The

product will be offered throughout Punjab including Lahore, Faisalabad, Islamabad, Rawalpindi and Multan. Even if we boost our distribution and availability to other provinces, even then the strategy of uniform delivered pricing will

remain corresponding.

Product:

Parents are very conscious about the quality of the product that their children are suppose to use, keeping in view therequirements of parents and our besieged age group of the audience we have to retain the competence of qualitymeanwhile making the product colorful, flavored and eye catching for the targeted kids. It will be a symmetric

packing range in three sizes making it more adoptable and affordable for people concerning our focused incomelevel assortment.

Ref: Web 3

Core Product:

Our core product is the orange gel with cooling crystals, in the tube. The hub benefits are stated as follows:

Prevent Tooth Cavities

Prevent Exposed Root Cavities

Fight Against Bad Breath

Reduce Plaque

Reduce Gum Problems

Strengthen Weak Tooth Enamel

Remove Stains

.



Actual Product:

Brand name: Our brand name is Colgate Junior® that is in line with Colgate Palmolive.

Quality: We are determined in providing the brand, assuring quality and affordability to the major sector of thecountry, initially to the major sector of Punjab. The quality is the factor that cannot be compromised in anycondition as the leading brand of Colgate assures the best quality paste to its customers.

Design and style: The design and style of Colgate junior are set to be quite appealing and catchy for kids. Kids areusually more attracted towards colors and cartoons. So keeping in mind this fact, colgate junior has been associated

with most preferred cartoon character Tom & Jerry as preferred by the majority in research. So the product isconsidered to be pleasing for kids through unique design and style.

Features: The toothpaste is manufactured as an orange gel with cooling crystals and enclosed in an attractive tube.

Packaging: The packaging is made very attractive as the product is specifically designed for children so packagingis given special consideration so it may prove appealing to the target consumers.

Augmented Product:

It includes the classification of our product, website address and helpline number or U.A.N number for assistanceand after sales services. Web site address of Colgate Palmolive is www.colgate.com.pk and the helpline number is(92-21) 5698000, 5685867. After sales services include the responsibility of replacing the damaged or expired piece

from the customer. If we consider the categorization of our product then it falls in the category of staples inConvenience Products.

Branding: A brand is a name, term, sign, symbol, design or a combination of these, intended to identify the goods or services of one seller or group of sellers and to differentiate them from the competitors. Branding has become sostrong that hardly anything goes unbranded.

Brand name: The name of the brand is Colgate Junior® proposed by Colgate Palmolive.

Brand Sponsorship: Colgate Junior is a Manufacturer¶s Brand (National Brand) because Colgate is distributing its product with its own brand name as created and owned by Colgate Palmolive itself and can be available at generalstores, key outlets (walking stores) and karyana stores.

Packaging and labeling: Orange gel paste is enclosed in a very attractive tube. Labeling includes the brand name, benefits, ingredients, address of the firm and expiry date.

Place:

Placement plays a vital role in the life cycle of product so we will place our product at:



Departmental stores

Shopping malls

Target retailers

As we already have a very strong distribution network of other products of same brand so we will use the samedistribution channel and network that is considered to be a very strong key factor in distribution procedures.

Distribution:

Marketing Channel or distribution decisions are among the most important decisions that management faces anddirectly affects many other marketing decisions.

Channel level: Our product will follow a chain in which from the manufacturers (Colgate Palmolive), the productgoes straight to the ware houses of distributors then to the respective zones (separations made by Colgate Palmolivefor the ease of distribution to multiple cities). Then after pricing, the product goes to the shops (retailers) and finallyto the customers and end consumers.

Manufacturer Ware house Retailer Consumer

Conventional marketing channel: We will have a conventional marketing channel since we have a distributionchannel structure in which Colgate Palmolive places its products in the shops of retailers or sales them to thewholesalers and they do not work like a single team.

Type of distribution: Colgate Junior is dealing with a few authorized dealers. As the number of authorized dealers is9 so it follows Selective Distribution Channel. We have two distribution channels in rawalpindi, 1 in Islamabad, 1 inmultan, 4 in Lahore and 1 in faisalabad. Above mentioned only the authorized distributors are allowed to deal withColgate Palmolive and henceforth with Colgate junior for the sake of distribution.

Promotion:

The promotional strategy which Colgate Junior will adopt to cop up with the competitive market would be firstly tofocus on awareness of the new product. This would be done by placing stalls and counters of Colgate Junior 30gtube free of cost, outside the schools. Then next step would be promotion through magazines, newspapers,

billboards, pamphlets, T.V channels along with buntings in the shops. Making attractive T.V advertisements woulddefinitely attract and urge children to try it because of its catchy appearance. We would focus on increasing the saleswith the passage of time to gain control on the besieged chunk of market share. More precisely:

Our first and foremost objective is to provide market awareness to our target customers.

Power of advertisement while using both media (Print & Tele).

Use of cartoon characters which are favorite in kids like Tom & Jerry, Snoopy etc (It will be decided on the basisof market research).

Also to offer free samples to the target consumers to check the quality of offered product that is substantially high.

Promotional mix:



We are supposed to use the following steps in our promotional mix:

Advertising

Personal Selling

Public Relations

Sales Promotion

Direct Marketing

Advertisement:

We will advertise our product through television, billboards, magazines, newspapers and brochures.

Bill Boards:

We will also advertise our product through billboard because the kids who watch our ads on television when theywill watch our value added product on billboards they will definitely enforce their parents to buy it for them.

Television:

We will advertise our product on local area cable network because it is the most effective way to get the attention of the kids, after that we will switch towards the advertisement on famous television channels including Geo, Aag andPTV. We will run our commercial ads especially during the intervals of cartoons and children concerning serials or in times when children can almost certainly watch TV.

Newspapers & magazines:

We will also advertise our product in newspapers and magazines using interesting and appealing pictures of their favorite cartoon characters so that more kids can be made aware of our product. The most preferable magazineswould be Aurora, Blaze and Review through which we are suppose to publish our advertisements. Newspaperswhich are selected for this purpose are Dawn and Din newspapers.

ADVERTISING BUDGET:

TVC & Radio Media Plan

Station Timings Launch Cost per Diem Duration Total Cost

PTV

Home 7am ± 10 am

5pm ± 7pm

10pm ± 12am



Octobe 1st Rs.195,000 15 days

(every other day) Rs. 2,925,000

ARY

Digital 1am ± 8 am

6pm ± 7pm

9pm ± 11pm October 1st Rs.155,500 15 days


Geo Ent 8am ± 10 am

8pm ± 9pm

10pm ± 12am October 1st Rs.170,500 15 days


Aaj Ent

7am ± 10 am

5pm ± 7pm

10pm ± 12am

October 1st Rs.75000 15days


Total Rs 9,015,000

FM 101 KHI, ISD, FSD, PES, LHR 7am ± 10am

9pm ± 10pm

October 1st Rs.10,000 15days

(every other day) Rs. 150,000

FM

89 KHI, LHR, FSD 8am ± 9am

10pm± 11pm



October 1st Rs.4200 15days

(every other day) Rs.63,000

Total Rs 213,000

Newspaper & Magazine Media Plan

Periodical Launch Cost \ week Duration Total Cost

Jang October 1st Rs.16,045 6 months Rs.385,080

The News October 1st Rs.8,930 6 months Rs.214,320

Dawn October 1st Rs.17,500 6 months Rs.420,000

Jang Mag October 1st Rs.4,745 6 months Rs.113,880

Akhbare jahan October 1st Rs.6000 6 months Rs.144,000

Aurora October 1st Rs.20,000(per 14 days) 6 months Rs.240,000

Dawn magazine October 1st Rs. 6000 6 months Rs.144,000

Total Rs 1,661,280

Billboard Media Plan

Type Location Launch Cost per Month Duration Total Cost

Hoardings Kalma Chowk October 1st Rs.39600 12 months Rs.457200

Hoardings Ferozepur Road October 1st Rs.39600 12 months Rs.457200

Hoardings Blue area

islamabad October 1st Rs 45000 12 months Rs.540000

Hoardings f-10 sector

islamabad October 1st Rs.45000 12 months Rs.540000

Hoardings Tariq road

Karachi October 1st Rs.60000 12 months Rs.720000

Hoardings Sadar

karachi October 1st Rs.60000 12 months Rs.720000



Hoardings D ± ground October 1st Rs. 32000 12 months Rs.384000

Hoardings Peshawar cantonment october 1st Rs.35000 12 months Rs.420000

Total cost Rs.528000 12 months Rs.4,238,400

Personal Selling: This scheme will be applied in the introductory phase. The introductory phase. The product will beavailable on doorstep for making more and more people customary of this new product and people would test the

product without going to the shops. This technique would also influence those who did not catch free samples due tosome reason.

Public Relations: Public relations undoubtedly play a vital role in the acceptability of any product by the general public. Its all about setting a perception necessarily positive, in the minds of people whether they are presently our customers or the other way round. Colgate junior has decided to trail for a certain amount of revenue in specifiedtime period and has decided to donate 9% of the total revenue to charity organizations earned per annum by theteam.

Sales Promotion: Sales promotion is made in order to intensify the boost of sales. It can be done in a variety of ways. We can offer short term incentives in order to break through the market and making the sales even bigger insize. We can also offer complementary products like tooth brush with the sale of a 50g pack after achieving thedesired sales. Another way can be giving discounts or providing more of the product in the same price. Sales canalso be promoted by giving free samples of the 30g pack to specific locations like schools etc.

Direct Marketing: Direct marketing can be considered very important in a way because it helps in maintaining goodrelations with the customers. Advertisements on the other hand, undoubtedly play a vital role in creating theawareness or interest of the product but they only convey what a product actually is in a short span of time.Customers normally want to know more about the specifications and characteristics of the product and this could bedone through providing the customer with the proper channel that they can use to interact with the company. Themedium used for this can be either through billboards or directly mailing the cutomers.



Actions:

After making the strategies and managing the tactics. We will put them into action and try implementing themefficiently to carry out the maximum result. We will put our all strategies and tactics into action by using the

following

Project Management

Schedules and Deadlines

Budget Allocation

Project Management

Organizational Chart

There is a hierarchy of our organization in which CEO of the organization will lead the four directors of thecompany from different departments. As the marketing is our concern so we will describe the marketing departmentand we will put our stated strategies into action. Miss Novera Ilyas is a director of the marketing department and issupervising the marketing department. She will give the instructions to her subordinates that how to achieve the goaland implement the strategies and tactics. Mr. Mubeen Liaquat is a General Manger of the marketing department. Hewill Monitor the proceeding that is the department achieving its desired goals or not? If not then GM will have tochange his plan by consultation with the higher authorities. Miss Shoa Khan and Messieurs Ali and Sohaib are themarketing managers assisting Mubeen Liaquat in managing the marketing activities of the organization to get theobjectives set by the higher authorities. The company has a very strict quality control department which seekscomplete customer satisfaction .The quality control department principal job is to ensure that our customers receive

prompt, courteous, professional service with the highest quality workmanship. Colgate Junior service network willcheck the performance of the organization that is the company getting its desired customer response? Is it getting theloyal customers?

Schedules and Deadlines:

Colgate Junior project management team is very concerned with the timely completion of the tasks and goals whichthey have set for themselves. For creating brand awareness, company will start its campaign on TV by 20th of January for seven days a week at least one month. Billboards will be placed on Liberty and Feroz Pur road by the25th of January for one month till 25th of February. The distribution of the pamphlets at traffic signals will start on27th of January. Colgate Junior will arrange a puppet show at different schools to attract kids. The first show will be



at Lahore Grammar School (Model town) on 27th of February. Colgate Junior will announce its annual report on31st of December to attract the customers by showing our increase sales.

Budget Allocation:

Our budget for Lahore branch is 2000000 per month and for Faisalabad, Islamabad, Rawalpindi and Multan branch

is 1500000 each. This budget includes expenses like building rent, salaries of our artisans, utility bills, officesupplies, vehicles maintenance and fuel, promotion or advertisement and etc. Our total budget per month isRs.6500000 with the annual budget of Rs.78000000 (PKR 78million). 50% of this budget goes to Marketing.

Further Allocation of Marketing Budget:

50% of the marketing budget is allocated for Promotion, which is affordable for us.

20% for distribution along with vehicle fuel expenses.

15% for office supplies.

15% for Research and Development

Distribution of promotional Budget:

Distribution is as follows:

45% for advertisement

25% for Sales Promotion

10% for Public Relations

10% for Direct Marketing



CONTROL:

To keep an eye on our tasks and procedures, controls are used. They make us sure whether we are doing things in aright way or not. It involves measuring, monitoring, reviewing, updating and modifications in our performedschemes and procedures.

To see things in accordance with what was planned, we will take the following control procedures.



Monitoring

Marketing department will manage a monitoring team which will check the performance periodically. We willarrange a general body meeting by inviting different departments like Marketing, Finance, R n D managers in whichwe will see that have they achieved their desired target. And we will also try to figure out our mistakes. Themonitoring team will also check that is the plan working or not if not then what should be done. There could be two

possibilities, first one that the firm may switch to plan B or may they update their plan.

Media Plan

As we know that advertisement is a best way to get the attention of the customers. As customers are a big asset of afirm so if a firm will not get loyal customers then firm will be in a great loss. So to get the awareness of our productamong the customers We have made a media plan including TV ads, Newspaper ads Billboards, Pamphlets and wewill review that are those planned activities getting the required costumer response or not. Our plan includes that,are our ads suitable to target market or not? We will control all the plan and try to get the best response from our customers.

Updating Plan

The company will keep a regular check on the market and record any change in the market trends. Firm will create acommittee who will check the market trends periodically and will update its plan according to the market trends andchanging behavior of its customers. The marketing department will specially update its advertisement plan, becauseadvertisement is a basic tool to get customers awareness as mentioned earlier.

Measuring Objectives

From business point of view objectives are the one of the most important things. So if a business has to survive in

the market they have to measure their objectives by time. Suppose if a company does not measure its objectives for along time then, how it can be determined that business is going in a right direction or no? That¶s why our board of directors will review the goals and objectives of the company periodically. If the company is not achieving itsobjectives then board of directors will figure out the problems and they will try to sort out the solution. If thecompany is achieving its objectives then board of director will set new goals for the coming years. Measuringobjectives is much more important for us than some other company because our product is new and we have to getcustomer satisfaction and to create awareness among the customers which is an essential part of our objectives toachieve.

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