Adam Revo Relaunch Essay
Adam Revo Relaunch
First of all we would like to Thank ALMIGHTY, Who is the source of all our knowledge and wisdom. Then we would particularly like to thank our respected instructor Mr. Yasir Ali Somro for providing us the opportunity to look into various aspects of Marketing. His teaching is very informative and beneficial for us in future. He has been very helpful to us in making the project and in gaining further knowledge. Then thanks to our Parents, Friends and Colleagues in making of this project. Moreover we are thankful to all our group members who have coordinated and cooperated in the making of this report.
1. Company Description
The group was initiated by Sir Adamjee Haji Dawood (1880-1948) who also played a vibrant role in the birth of the state of Pakistan by acting as a financial advisor and supporter to Quaid-e-Azam Mohomed Ali Jinnah-the founding father of Pakistan. Sir Adamjee’s role as advisor gave birth to various economic institutions; the Muslim Commercial Bank (MCB), Orient Airways, and the Morning Star newspaper.
These were primarily established at the behest of Quaid-e-Azam Mohomed Ali Jinnah to win support of Muslims of Pakistan and facilitate them in migration to Pakistan during the partition of India in August 1947.
Adam Motor Co., an assembler of Chinese SUVs and pickup trucks in Pakistan introduced an indigenous automobile Called the Revo. It is a 3576 mm long hatchback, powered by either a 800 cc or a 1051 cc petrol engine, sourced from Wuling in China. Otherwise the car is built from local parts. Adam Revo was a city car made by the now defunct Adam Motor Company of Pakistan. It was the first car to be designed & assembled in Pakistan. The Revo is being assembled at a plant in Karachi owned by Adam Motors. And the engine and transmission systems have come from China. The company plans to make 5,000units a year
2. Reasons of failure
There are some main causes of failure of this project:
As world is a global village now so foreign brands are easily available in the market. People tend to prefer foreign companies over local companies. If you want to grow your local automotive industry then one must first give tax leverage to this industry to protect their companies or else foreign companies would run the domestic country down to nothing.
Lack of Government support
Former Prime Minister Shaukat Aziz inaugurated Revo’s plant in 2003, Aziz promised Feroz Khan, the maker of Revo, to buy his car for the government as it was the cheapest in the country. Feroz Khan did produce suffice to cater the needs of Government who decided to buy Adam Revo instead of Mehran. The government could have easily bought 5,000-10,000 cars a year but it never fulfilled its promise and that was one of the major reasons why the project collapsed.
Lack of funds
Due to interest of Prime Minister, Feroz Khan produces enough to carter the Government. When Government never fulfilled its promise, debt pilled up then company had to go bankrupt. There weren’t enough funds left to rejuvenate this company and to pay off its debt.
Road grip of tires
Tires used were of cheap quality, bumps and surface imperfections in the road results in inevitably reduced grip on the road which leads to a harsh ride.
People didn’t like cheap Speed-o-Meter of Adam Revo, which reminds drivers of 19s car. Now days where stylish cars are easily available, people didn’t like buying car which gives them the feel of driving any vintage car so they pay extra just to have car with a bit of pizzas by paying 45-75000 extra.
Lower Quality of interior plastic
The car wasn’t good enough. The cheap plastic interior and hideous looks were not up to the expectations of the potential buyers of car, who rather preferred a used car than an Adam Revo.
No Promotions/Advertising/Marketing plan
Effective way of selling your product is to advertise it through Ads, Campaign and promotions. Adam Revo didn’t do its advertising its product; therefore only small part of the total population was aware of Adam Revo, rest still get baffled when asked about Pakistan’s first car Revo. People weren’t aware of Adam Revo how could it have earned profit.
3. Strategic Focus and plan
Adam Motor Company’s mission is to introduce vehicles with maximum indigenization, to price our vehicles most competitively with reliable quality, to realize highest customer satisfaction through 3S facilities, to export and to be a responsible corporate citizen.
Pakistani car industry to reach greater heights and eventually compete with larger car companies, within Pakistan and internationally.
Core Competency and Sustainable Competitive Advantage
Adam Motors believe that given the right environment and training, their people can be the best in the world. They believe that all their products must contain high indigenization, reliable quality and excellent after sale service
Adam Motors will first try to capture market share by penetrating into market using Market-Penetration Strategy and to compete from well settled companies like SUZUKI, HONDA, TOYOTA, and CHEVERLOTE excreta. These companies are already offering good cars and have established there names in Automobile industry. To penetrate into market Adam has its advantage of low price. Its biggest competitor is Mehran (cash cow for SUZUKI) in 800cc. Adam still has 70 to 80000 price difference from it. This strategy is appropriate for Adam Motors as there is a demand and the customers are looking for bargains. Adam Revo has an affordable price which can penetrate deep into the market for middle class people.
After company increase its market share company can go for Product development strategy while developing new product for potential interest to its current markets. Once company establishes its reputation it can offer a new product in a new market by using diversification strategy.
Porter Generic Strategies
When it comes to market Revo, Overall cost leadership Strategy is appropriate for Adam Motors to gain market. Adam Motors is considered to be lowest cost producer within industry. And there advantage over Mehran makes is highly affordable for the middle class people and giving company a competitive advantage over other automobile companies. 4. Situation Analysis
The only Pakistani manufacturer:
The plant can produce up to 7000-10000 cars per year.
Adam Revo, Pakistan’s first automobile manufacturing industry having largest manufacturing facilities with an annual production capacity of 70,000 – 10,000 vehicles. The vehicles produced include cars, small vans, Pickups and Cargo vans. With proper management and effective marketing Adam Motor’s Revo can manufacture suffice to carter the demand and can hold more than 50% of Market Share. Low – priced car.
Adam Motor’s Revo biggest strength is its low price 70,000 to 85,000 cheaper than Suzuki’s Mehran which makes this car highly affordable. With Government intervention this company can cater enough of the population. Excellence in installation of CNG kits
Adam Motors have an enormous experience in the field of CNG/LPG. CNG kits installed in Adam Motors cars make it fuel efficient car with globally acclaimed CNG components installed. Impeccable increase in petrol prices is making implausible for middle class people to afford the overhauling cost of the car. Providing CNG kits will raise the bar for the industry to new greater heights.
Poor after sale service.
After sales services is considered to be and integral part of customer services and a key determinant of customer satisfaction; while this may seem obvious but it’s not often done. Unfortunately, lack of emphasis on after sales services was observed, due to lack of resources and improper after sales services planning. Low Resale Value
Revo was the Pakistan’s first car to make out to roads and had to face criticism. As a first company the quality of car and its parts used were not as good as it should have been which cause its unpopularity and its image had to taste dust therefore, when it comes to resale value the owner easily can lose 70,000 or more on selling. Pakistani buyers are cautious buyers who give the vehicle’s resale more importance. Competing in Pakistan only
Growing up among some of the world’s biggest company like Honda, Suzuki, and Toyota is really hard job to do. With competitor having better resources, better research facilities and established brand name, it gets hard to compete.
Low consumer awareness
Since advertising and promotion directly relates to consumer awareness. One of the main reasons Revo didn’t survived was people weren’t aware of the Revo. Advertising and promotion are useful factors in creating awareness among the consumer. Unfortunately Adam Motors didn’t indulge themselves in of the marketing. Lack of advanced technology.
Advanced technology is competitive advantage. Unfortunately Adam Motors don’t posses modern technology which surely is Adam Motors biggest weakness. Adam Motors is competing with companies who posses advanced technology and have moved from traditional fuel cars to hybrid and electric cars. Unattractive structure.
Revo looks was a major issue for buyer. It’s resembles to the three-wheeler china van. The shape of the car made it look quite ridiculous and unattractive. Poor material was been used in exterior and interior of the car. Adam Motor’s should have put more thought into the design and quality of the car. Opportunity:
Capturing the market of low income people.
Pakistan’s major part of population falls under category of middle class, lower middle class and lower class. To capture the people who have low purchasing power company must focus on the affordability of the product. Revo is cheap car even cheaper then Mehran. People with low income can easily afford this car and it’s overhauling expenses. People who have bikes and want a cheap spacious car to enjoy ride with their families can easily afford this fuel-efficient and cheap car. Enter in the market of 1300 cc cars.
After getting its market share and reputation, Adam Revo can go for opportunity to capture market with 1300cc car and other models. As the only competitor in producing cheap 1300cc car is Suzuki who have been failed trying different variation in their 1300cc model cars. Large market size to operate.
Demand of cheap cars in Pakistan is very high. There’s no second thought to it. Majority of Pakistan’s population belong to classes who can not afford luxurious cars and are interested in cheap, fuel- efficient cars. There is big market for there car if they plan well and market there product efficiently they can target large market size. Economy of Pakistan.
Growing local industry can ultimately benefit economy of Pakistan. Developing good reputation will induce other companies to make investment in Pakistan my doing joint venture production. Export Revo can also give benefit to Pakistan’s economy. Threats:
Competitors (Pak Suzuki)
Currently Pak Suzuki is largest car assembler and market leader in Pakistan automobile market. Pak Suzuki has more than 60% of the market share. Having effective after sales service and wide spread network of show rooms and EFI technology surely is Adam biggest competitor. Market perception.
The perception of consumer of Adam’s Motors is that they provide cheap car with low quality. As long as Revo don’t take steps to induce people that there product are best use of their money, whatever car they come up with will not going to be accepted by the consumer. Load shedding of CNG in Pakistan.
Load shedding of CNG is one of the big problems in Pakistan and company like Adam Motor who are totally dependent upon CNG as this is one of the main reason which makes this car overhauling expenses affordable. Sharp Increase in price of Raw Material.
Increase in price of everything due to inflation is also a threat e. The cost raw material and labor have also increased which will result in expensive product making it unaffordable for consumer of low income. Ambiguity in political issue.
In Pakistan the ambiguity in political issue is very high. Every now and then we get strangled by the strike conducted by different political parties making it very difficult for industry to match the quota. Sometimes even worker don’t come to work which increases the cost of production and delay in delivery.
Internal Strengths and Weaknesses
It offers Fuel-efficient highly affordable Chinese made engines car which are 10% to 15% cheaper than other local competitors. As demand of cheap cars is so high in Pakistan, providing cheap cars to consumer so could get their needs satisfied.
The key marketing objective of the company is to become the segment leader in 800 cc market It is the main concern to market the Adam’s Dreamer at an economical price, which would give a competitive edge. To duly anticipate in maintaining quality benchmark by maintaining the efficiency of automobile production unit by continuous research and development program, keeping in view the customer’s needs and a sound distribution system to attain the max of customer satisfaction. Adam Motor intention is to attain an increase in share of the urban population consisting of Karachi, Lahore, and Islamabad as well as in rural areas of Pakistan in automobile industry. The duly purpose to attain this target by direct frontal assault on the market and to re-launch the brand on a higher scale to eliminate the resistance from small competitors and taking on competition directly.
Company strives for skilled entities who value time and quality as crucial assets.
Research and Development (R & D)
External Opportunities and Threats
Consumer/Social: Today, companies recognize that they cannot appeal to each and every buyer in the market place… The reason of this problem is that buyers are too numerous, too widely scattered and too much wearied in their needs and buying practices; therefore, to reach the right person who is definitely a potential customer of your product is very difficult.
Competitive: For the newly launched automobile company it is very challenging to get even very small shares of the automobile market when the giants like TOYOTA, SUZUKI etc. are already capturing the major market.
Paksitan’s first car
Competing with other
Prime Minister Nawaz Sharif, Known for his decisions which helps economy of the country to grow. Providing subsidy to industrial sector will definitely help industry like ADAM COMPANY to grow. This is an opportunity was the company to go for this opportunity.
Competitor Analysis (Porter 5 Forces Model, Defense Strategy, Attack Strategy) Company Analysis
Customer Analysis (Segmentation/Targeting)
5. Market-Product Focus
Marketing and Product Objectives
The car’s target audience was envisaged to be Pakistan’s middle class car buyer. The company had planned to export the car in the future to other countries as well.
Points of Parity (POP), Points of Difference (POD)
6. Marketing Program
Product Strategy/ Branding Strategy, BCG Matrix
Price Strategy: The price of Adams Revo was low as compared with the competitors but the features of the car were not up to the standard of the competitors therefore to compete with the competitors it is essential for the company to change the price in order to change its design to get profits. The increase in price should be less than the competitors price in
order to maintain the market reputation of having a low priced car. People were seen to be satisfied with the price of the car, however, the major reasons which caused the car to flop were the low quality, performance style as well as the lack of promotion, therefore it is required by the company to reposition its product and promote it. The repositioning of the product and the promotional advertisement will increase the cost of the car which may result in the increase of prices. The price offer by the company is almost 20% less than its major competitor Suzuki Mehran. The company can afford an increase in price to a level which is less than Mehran in order to reposition its product Promotion Strategy: For repositioning first we will redesign the promotion mix to inform customers about the attributes, features of the Adam’s Dreamer along with its emphasis on life style and technical expertise.
Pull strategy will be used for the promotion to build up consumer demand. If the strategy is successful, customers will ask dealers for Dreamer and dealers will ask Adam’s Motors to produce more. Sales promotion is one of the ways to encourage sales of our new Adam’s Dreamer. The company can give discounts on conducting different car fairs or in the exhibitions. They can offer discounts sales to different car rental organizations or the transport departments of different companies, by doing this Dreamer can achieve road presence which can broaden the future sales of Adam’s Dreamer Place (Distribution Strategy): Our market segmentation reveals that The Company’s product Adam’s DREAMER is not for the superior class, that is, upper-upper but also not for the upper-lower class of the country. The Adams Dreamer is basically for the, upper-middle class, Middle class and lower-middle class of the country The smaller areas of the country are the major place for the middle class of society. In order to reach the every middle class consumer of the country the Adam’s DREAMER must be available in all the seller cities of each province. Therefore Adams Dreamer dealership must be in
Sialkot, Multan (PUNJAB)
Gigot (KHYBER PAKHTUNKHUA)
The semi-urban cities of the country are the major place for the lower-Middle class of society. In order to reach the every lower class consumer of the country the Adam’s DREAMER must be available in all the small cities of each province. Therefore Adams Dreamer must be in
Okara, Sahiwal, MianwaliPUNJAB
Abottabad KHYBER PAKHTUNKHUA
Company has a nonexistent demand and Latent demand. As marketing and promotion of Adam Revo was never have attempted. They share a strong need for the product which is cheap and can satisfy there needs but due non marketing strategy people were unaware of the product which causes non existent demand.
8. Evaluation and Control
As per the survey done by the general public, the evaluation result was in favor of re-launching the car but there were few amendment needed to be made, for example the interior part and as well as engine including the suspension of the car.