Download A Review of Marketing Strategy of Motorcycle Products in Bangladesh

A review of Marketing strategy of motorcycle products in Bangladesh.
*Farooq Hossan *Issa Ahammad
Abstract
In Bangladesh extensive road network has been made in the rural areas as part of the infrastructural development. Motorcycle is used
as transportation which has increased the opportunity of motorcycle business in Bangladesh. About 100 companies are operating
their marketing activities in Bangladesh and they follow their own marketing strategies to capture the market share. Success of this
motorcycle business largely depends on the activities of the marketing division. To increase the sales of motorcycle and achieve target
sales, sales department maintain strong relationship with dealers- relationship marketing. For promoting brand and the companies’
image various promotional activities are conducted. The sales training department provides training facilities to make salespeople
skilled and knowledgeable. In Bangladesh motorcycle companies segment their market based on four segment variables – geographic,
demographic, psychographic and behavioral data. For targeting market mostly undifferentiated marketing strategy is followed. Yet
positioning the product is difficult, automobile companies differentiate the product for market positioning. Companies try to
differentiate the products through design, performance of the product, warranty, after sales service etc. In Bangladesh appropriate
application of the 4p’s is most significant. Price is an important factor directly related to market share and profit margin. To attract
large number of customers and to win the market share motorcycle companies adopt market penetration pricing strategy. When this
product reaches maturity stage and establishes as a brand then the companies raise their price and adjust with competitors’ price.
For expanding motorcycle market, companies conduct their promotional activities through advertising, incentive packages,
participation in exhibitions etc. Motorcycle distribution depends mainly on the dealers and distributors within the country. Major
dealers directly interact with the company’s sales executives (for purchasing motorcycles). Companies select distributors based on the
demand position, sales volume etc. Motorcycle companies also perform various social activities for upholding the image of the
company. They also set their sales target by using the marketing control process which in turn helps the companies to take corrective
actions to achieve their objectives.
Keywords: Marketing Strategy, Four P’s, Relationship marketing, Market Segmentation, Market Penetration, Market Positioning,
Maturity stage, Marketing Control process, Product differentiation, Marketing Information System (MIS), Target Sales, Target
Customers
Introduction
Bangladesh is high-dense country in the world. Total population of the country is near about 16 crores. Among total
population approximately 80 percent people live in the rural areas and depend on agriculture. As part of infrastructural
development in the country, an extensive road-network has been made in the rural areas creating opportunities for trade
and commerce. Because of its versatilities, motorcycle is one of the modes of transportation have increased causing a
significant growth in the motorcycle market in Bangladesh. To fulfill the demand of the customers several companies now
are marketing motorcycle. There are about 100 automobile companies are operating their marketing activities in
Bangladesh. Among them 10 – 12 companies are enjoying majority of the market share. These companies are following
marketing strategies of their own to capture the market share. Market share of these companies is gained and expanded by
following the four P’s (Product, Price, Place and Promotion) literally. The implementation of these four P’s is studied for
conceptualizing the marketing program of these companies. Among motor cycle companies Uttara motors ltd, Atlas BD,
TVS auto BD Ltd., Runner Automobiles Limited, Singer Bangladesh Ltd. and Walton are studied.
Objectives of the study
Marketing strategies have a significant role for gaining success in marketing. In motorcycle marketing in Bangladesh
different strategies of marketing followed by the companies has formed achievable marketing program. The broad
objective of the study is to conceptualize the marketing strategy of various motor cycle companies in Bangladesh. The
specific objectives are:
1. To find out a brief idea about motor-cycle market.
2. To understand the marketing strategies of motor-cycle companies.
* Senior Lecturer, Department of Business Administration, World University of Bangladesh
Methodology of the study
This is a literature based paper and therefore to conduct this study data were collected from secondary sources. The
sources are text books, brochures, booklets, printed material, articles, study reports, catalogs and annual reports of
motorcycle companies.
Marketing Division: Key to success
The secret of success of motorcycle marketing depends on marketing division’s activities. This division includes sales and
marketing, service, sales training, Marketing Information System (MIS), Field administration and commercial
departments. To generate sales of motorcycles in order to achieve target sales, sales-department maintains strong
relationship with the dealers, as companies believe in relationship marketing. Marketing executives and senior executives
of sales conduct extensive tours all over Bangladesh and keep all the market information up-to-date. To promote brand
and company image, sales department is involved in various promotional activities. To fulfill the customers’ needs,
service department ensures the service including spare parts replacement to all customers within 24 to 48 hours.
Throughout the year mobile service teams, which are formed with well experienced and professional engineers and
mechanics, are providing service in different areas of the country with company’s own transport and technical hands as
per service calendar. The mobile service team ensures warranty for 2 to 3 years for the engine and one year for other
components and arrange on the spot replacement of parts. There are sales training department in these companies. Sales
forces who are engaged in motorcycle marketing must be well skilled and knowledgeable. To make the sales people well
skilled, they have to go to through an extensive training. During this training, they have to know about their customers,
their products and have to gather a vast knowledge about selling skill. Sales training department is responsible to make
fresh graduates/masters eligible for this post. MIS department plays a vital role in the marketing division. This department
collects data from the field regarding market share, competitors’ activities, sales of products and necessary marketing
information. They analyze the data and provide necessary information about present, past and future marketing strategy of
these companies. Field administration department is responsible to maintain all types of administrative activities of field
forces. Commercial department plays a pivotal role for these companies to import the product and components in the right
time through maintaining all rules and regulations that are prevailing in this connection.
Segmenting, targeting and positioning – Gaining customers.
Market segmentation involves dividing a market into smaller groups of buyers with distinct needs, characteristics or
behaviors who might require separate products or marketing mix 1. In Bangladesh, for motorcycle marketing automobile
companies are segmenting their market based on all four types of segmenting variables i.e. market is segmented on the
basis of geographic, demographic, psychographic and behavioral data. A target market consists of a set of buyers who
share common needs or characteristics that the company decides to serve.2 For targeting market; mostly undifferentiated
(Mass) marketing strategy is followed here. In some cases several companies also follow the differentiated (segmented)
marketing strategy.
A product’s position is the way the product is defined by consumers on important attributes – the place the product
occupies in consumers’ minds relative to competing products.3 Positioning of automobile products to the customers’ mind
is very difficult. Because, same generic are marketed by a large number of companies. Companies are trying to create
competitive advantages to make the position in the customers mind. Price, quality and design are used for making the
competitive advantage.
Numerous differentiation tools practiced by the automobile companies.
Differentiation is the act of designing a set of meaningful differences to distinguish the company’s offering from
competitors’ offerings4. Automobile companies differentiate the market through differential tools. In motorcycle market
product differentiation is very difficult because the products are durable but more or less homogeneous. Yet companies
offer some differentiations of products like design, feature and performance of the product. They are trying to ensure
better services to the customers. They provide services to the customers which will be different from the competitors in
some extent. Providing services are replacement of damaged product, broken spare-parts and ensuring quick supply
through own distribution channel. Companies are providing after-sales-services for bonding and strengthening the
customer relationship. For this purpose they have experienced technical team which is generally headed by a General
Manger. They foster various mobile service teams operating in different part of Bangladesh. Every team follows a yearly
service calendar. Service mobile teams ensure warranty. Warranty replacements are made within 48 hours. Every
automobile company, operating in Bangladesh, has a central workshop to ensure the after-sales-service to the customers.
Companies are offering personnel differentiation from their competitors to attract their customers. They are recruiting
competent and responsible personnel. As a result, they have qualified management and they are providing training
facilities to the personnel in modern and well communication system. Every company has a well-equipped distribution
channel by which it can serve its customers through velocity. Performance of an automobile company highly depends on
its distribution channel. The companies are trying to take the competitive advantages through fruitful distribution channel.
Application of 4p’s
In the competitive situation among the automobile companies in Bangladesh appropriate application of 4p’s is the most
significant. Price is extremely important in marketing competition. Competitors can easily measure and observe price and
respond quickly to price changes. Product, promotion and distribution cost in the marketing mix directly affect the price5.
Price is an important factor that directly related to its market share and profit margin. To attract a large number of
customers quickly and to win a large market share, new motorcycle companies follow the market penetration pricing
strategy. According to this strategy the companies set a low initial price to penetrate into the market quickly and deeply
with high quality. After a certain period this product goes to maturity phase and establish as a brand in the market. Then
the companies raise their price to adjust with the competitors’ price. When the products are well accepted by the
customers and if the product quality rise, some companies follow the psychological pricing. Under this strategy marketing
management believes that customers usually perceive high priced products as having higher quality. Some companies
have a good corporate image in the automobile market. These companies do not follow penetration strategy. In pricing
motorcycle they set a competitive price directly with the help of corporate image.
Promotion is communicating information between seller and potential buyer or others in the channel to influence
attitudes and behavior6. For expanding the motorcycle market automobile companies conduct their promotional activities
through advertising, incentive packages, yearly calendar and participation in exhibition and dealer conference. For the
advertising purpose these companies provide signboard for dealer showroom. Advertisement on billboard and overheads
is also sponsored by these companies. As advertising media newspaper and magazine are used to inform, perused and
remind the customers about the product by these marketers. Signboard, billboard and overheads are also used as the
outdoor advertising media. Incentive package, yearly calendar, participation in exhibition and dealer conference is used as
the sales promotion tools here. Companies offer a very attractive incentive package to their dealers. Yearly and pocket
calendars play a vital role as specialty advertising. To motivate and help the salespersons’ participation in exhibition by
automobile companies is very much significant. Arranging very colorful and charming dealer conference is helpful to
expand the market of motorcycle.
The motorcycle distribution mainly depends on the dealers and distributor within the country. The major dealers interact
directly with the companies’ sales executives for purchasing the motorcycle. Then they distribute motorcycles amongst
wholesalers who in turn sell those to retailer. However, in this market it is very difficult to demarcate between wholesalers
and retailers as most of the wholesalers also do retailing very often as per demand. That means in this market wholesalers
are also retailers in the same time.
Manufacturer
(Sales executives)
Dealer
Wholesaler
Retailer
Consumer
Marketing channel of motorcycle (Traditional).
Manufacturer
(Sales executives)
Dealer
Wholesaler
& Retailer
Marketing channel of motorcycle marketing (Exceptional)
Figure 1: Two types of marketing channel of motorcycle marketing
Consumer
In the marketing channel, companies select the distributors based on demand position, sales-volume consideration and
dealer’s sales capacity. Companies are having defined classification of the dealer depending upon his location, area of
operation, profile of business, sales volume, degree of exclusivity etc. In accordance to the classification, dealer will get
the benefit with respect to price (discounting structure) and delivery. A crucial balancing is also required amongst the
dealer in terms of pricing so that big dealers cannot sale the product at a lower price to a small dealer in another location
and in the process disturbing the whole networking concept. This phenomenon may be described with an example
considering its importance in maintaining the channel.
Social activities by the automobile companies
For creating and upholding the image of the company and its product social activities, part of the public relation activities,
play a pivotal role. Public relations (PR) involve a variety of programs designed to promote or protect a company’s image
or its individual products7. From the literature review it has been observed that automobile companies are involved in
different social activities such as giving stipend to poor-meritorious students and distributing relief among the people
affected by natural calamities.
Marketing control in process
Marketing control is the evaluation of the marketing strategy and taking corrective actions. In Bangladesh automobile
companies follow four steps of marketing control process which is as follows:
Set Goals
Measure Performance
What Companies
want to Achieve?
What is
happening?
Performance Evaluation
Why is it
Happening ?
Taking Corrective Actions
What should
companies do about
it?
Figure 2: Marketing control process in motorcycle companies.
In every month companies set their sales target to achieve. If the companies fail to achieve its target in a month, the target
is revised in the next month. This controlling system helps the companies to take corrective actions instant to achieve the
objectives.
Conclusion
Every company has their own marketing strategy. Companies have their own skilled sales force headed by the head of
marketing to increase sales. Companies that can make the effective application of four P’s will gain a greater market share
and survive in the long run. They position their products in the customers’ mind by creating competitive advantages
through price, quality, design etc. Market differentiation is done by the companies through features, design, performance,
conformance, price, skilled–knowledgeable and competent personnel, and advertising in various media. For expanding
their market share they apply the tools as offering incentive packages, exhibition, and dealer conferences. In near future
motorcycle companies operating in Bangladesh perhaps will be able to export their products in overseas market if they
continue their application of marketing strategies effectively and smoothly.
Recommendations
1. Since the companies believe in relationship marketing, they should maintain a good relation with the customers to
increase sales.
2. Companies should be more aggressive in advertisement, especially in electronics media.
3. Companies should differentiate the products from the competitors. Innovation should be emphasized because of the
presence of various generic products of motorcycle.
4. Companies must take up-dated and latest technologies for gaining competitive advantages and following innovation.
5. After-sales-service ought to be quality service; extended guarantee period and repair-time should be minimized.
6. Companies should also take necessary steps so that the products are checked before they reach to the hands of the
customers. Once the defective products reach the hands of the customers it will hamper companies’ image even with
guarantee.
7. Companies must be careful in selecting dealers for making the distribution channel smooth and strong.
8. Companies should get feedback regularly from the marketing team and adjust their plans accordingly.
References:
1. Kotler Philip and Armstrong Gary, Principles of Marketing, 12 th Ed., P – 184
2. op. cite. Philip to Gary, p. 195
3. op. cite. Philip to Gary, p. 203
4. Kotler Philip, Marketing Management, 10 th Edition (Millennium edition), September 1999, p. 287
5. E. Mason Ralph, Mink Rath Patricia, W. Husted Stewart and L. Lynch Richard, Marketing –
Practices and Principles, 5th ed. P -270
6. D. Perrault jr. William and McCarthy E. Jerome, Basic Marketing – A global managerial approach, 12th
Ed. P – 420.
7. op. cite. Philip, p. 605