Chapter One Introduction

1.1 Research Background and Purpose

This paper is based on the analysis of Qingqi Company. It is a Chinese company thathas made investment in Pakistan in the automobile industry. In this research I will analysisthe problems of the company. These problems will be analyzed through marketing theoriesand literature. A brief overview of the auto industry in Pakistan is also given to provide aninsight about the auto sector. Moreover, this paper will highlight the investment of QingqiCompany in 1994 in Pakistan. It will show external factors that affect the company. Whatare the current challenges the company is facing? At the end, solutions will be provided toovercome the problems. To know the market and demands of customers is very important. Every yearhundreds of companies start operations in other countries. But to know about the marketand get success is the key for marketers.As a degree requirement for MBA, I selected Qingqi Company in Pakistan. I choosethis organization for my thesis and I will analyze it in prospective of marketing theories.The company is facing low sale volume and low market share problems.Basically it is a research report. All the data used in this research is secondary. Thissecondary data is gathered through articles, magazines, publications and agency statisticslike Engineering Development Board (EDB), Bureau of Statistics, Ministry of Trade andCommerce, and Ministry of Industries, State Bank of Pakistan and Board of Investment. Iread out articles in magazines, journals, or newspapers. I search on internet, anencyclopedia. I also even explore the Internet and World Wide Web for information. I alsouse my own books and books in the school libraries.

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1.2 Main Contents and Framework

This paper is divided into five chapters. The first chapter comprises of researchbackground and purpose, research methodology and innovative idea. This chapterhighlights the purpose of the study and research background. The second chapter dealswith three marketing theories and related literature. These theories are STP theory, Brandimage and 4Ps called marketing mix. Chapter three highlights the automobile industry ofPakistan. I included this chapter because Qingqi Company is operating in automobilesector. So for the best analysis it’s important to give some insight into the auto industry ofPakistan in which the company operates. After the industry analysis, the next chapterconcentrates on Qinqgi Company. In this fourth chapter, I will provide introduction to thecompany, strategies comparison and its SWOT analysis. After the industry analysis andanalysis of the company, next I will explore the problems that Qingqi Company is facing.In the last chapter, solutions and possible measures will be provided to overcome theseproblems.

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Chapter Two Theories and Literature

2.1 STP Model

The strategic marketing planning process starts from a mission and vision statement.Then companies select their target markets and then make specific marketing mix andpositioning. Kotler shows the organization as a delivery sequence and value creation chain.In its first step of choosing the values, the strategist "proceeds to segment the market,choose the proper market target, and build the value creation positioning. The whole modelor process of segmentation, targeting and positioning (STP) is the foundation of strategicmarketing."Stated by Porter, different marketing segments differ from each other in structuralattractiveness and requirements. This difference brings about two vital strategic questionsfor competitive advantages. These two questions are the determination of (a) How tocompete an industry and (b) where to focus strategies by creating barriers betweendifferent segments (Porter, 1985, p. 231).A firm can offer higher value to its customers through the segmentation of the marketand then developing a marketing mix. The marketing mix should be in accordance with thespecific needs and concerns of the selected segment. In other words, the firm createsdifferent market situation of monopolistic or oligopolistic nature through the utilization ofdifferent curves of demand for a particular category of product. (Porter, 1985). This is anextensive application of the theory of price discrimination from the field ofmicroeconomics. According to this, a firm seeks to charge the highest possible price thateach market segment is willing to pay. Therefore, the theory's reliance on price isbroadened to include all 4 P's of the marketing mix (Wilkie, 1990, P. 98).

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2.2 Brand and Image

According to the American Marketing Association (AMA), brand can be defined as:“A name, term, design, symbol, or any other feature that identifies one seller's good orservice as distinct from those of other sellers. Trademark is the legal term used for brand.A brand may identify one item, a family of items, or all items of that seller. If used for thefirm as a whole, the preferred term is trade name.” (Marketing Power – AmericanMarketing Association 2010).According to Timo Rope and Jari Mether, image is the combination of a person’sexperiences, beliefs, feelings, attitudes and knowledge towards something. In general,image is the perception in the mind of a person about something. An important attribute inan image is that it is always subjective and personal. It is not based on any objective truthbut is always based on a person’s attitudes and personal values. The image can be, forexample, a country image, a corporate image, or a brand image, to name a few. (Rope &Mether, 2001, 13 – 14, 18).The level to which a person likes a brand determines if the person buys it or not. Thereasons to favor a particular brand over other brands can be varied, and they are mostlyemotional and even irrational. We can say that in reality all the decisions that a personmakes are based on some sort of emotions. Based on this idea that all decision of humanare based on emotion, there is a well-known rule in the field of marketing: Everything isbought based on emotions, although a person repeatedly tries to clarify his decisions asrational, both to himself and to others. Therefore, it is important for a company to besuccessful in creating positive feelings and perception towards the brand, product orservice being marketed. (Rope & Mether 2001, 14 - 15)

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Chapter Three Automobile Industry Analysis.... 18

3.1 Pakistan Automobile Industry...... 18

3.1.1 General Introduction........18

3.1.2 Automotive Industry Analysis..... 20

3.2 Pest Analysis of Auto Industry in Pakistan.... 21

3.3 Porter's 5 Forces Model....24

Chapter Four Introduction and Analysis of the Company....28

4.1 General Introduction.........28

4.2 Comparative Analysis of the Marketing Strategies....31

4.3 SWOT Analysis.... 33

4.4 Problems Facing......... 35

Chapter Five Solutions and Recommendation......... 39

5.1 Proper Market Segmentaton.........39

5.2 Create New Brand Image....... 40

5.3 Promotion ..... 41

5.4 Introduce Sales Incentives......42

5.5 Upgrade Display & Service Centres........ 44

Chapter Five Solutions and Recommendations

5.1 Proper Market Segmentation and Positioning

The Qingqi Company can make segmentation of the market properly. Before marketsegmentation, it should know the demands of the customers or market that what theirdemands are and what the company is going to offer? Normally the people in Pakistan buymotorbikes for personal along for fashion and status in the society. Especially the youngpeople buy it for fashion. The company can segment the market and concentrate on youngpeople.According to the STP Model, the Qingqi Company may segment the market, evaluate,targeting and make positioning. The company needs to make a strategic decision about the type of image it wants tohave. This means choosing to focus on a corporate image, a brand image of a singleproduct or a combination of these. Usually in Pakistan market, both company image andproduct image can be created. As in case of Honda, its company image; however in case ofRavi-Piaggio, it’s the product image. So Qingqi’s management can decide to go on bycreating company’s new image or just a single product’s image.

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Conclusion

At the end of the thesis, it is concluded the Qingqi Company can take advantages ofthe growing market of Pakistan auto market by solving its problems. Qingqi Company isfacing tough competition from Japanese motorbikes manufacturers Honda, Yamaha andSuzuki and a local manufacturer Ravi. The decrease in sale of Qingi Company is due tolack of good brand image, lack of well managed distribution channels and dealership. Thecompany has to make efforts for making a good brand image by changing the mind ofcustomer towards fashion and status.Furthermore, the company has to select its target market by looking at the demands ofthe market. Qinqi Company has to change its strategy of being focused on low priceproducer. Most of the people buy high priced Honda and Yamaha motorbikes because itgives value of personality and status with good brands image. These competitors focus onthe customers and market demand more rather than its own strategies for markets. Thecompany has to concentrate on sale promotion by expanding distribution channels and canmake a good use of 4Ps.The key changes are making brand image, increasing distribution channels andtargeting young generation in Pakistan.

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Reference (omitted)