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Marketing Strategies of Nissan in Bangladesh

PROJECT REPORT On

Marketing Strategies of Nissan in Bangladesh Course: Organizational Behavior Section – D

Prepared For: Ms. RASHNNA TASNM Lecturer Dept. of Business Administration 1

AMERICAN INTERNATINAL UNIVERSITY OF BANGLADESH

Prepared By: Id # 10-17507-3

Rubiya rob Atm Rakib

Date of submission: December5, 2011 AMERICAN INTERNATIONAL UNIVERSITY OF BANGLADESH

December 5, 2011 Ms. Rashna Tasnim Lecturer Department of Business Administration American International University of Bangladesh 83/B,Road 4,Banani,Dkaha 1213. Subject: Submitting a report on “Marketing Strategies of Nissan in Bangladesh” Dear Madam, We the undersigned students of Organizational Behavior (BUS COM) are assigned to submit a report. Our report is on Marketing Strategies of Nissan in Bangladesh. We considered your remarks and instructions very carefully while preparing this report. We tried our best to follow your guideline, format and discipline. We tried to visualize all the areas related to this report. Cooperation among our group members was beyond the expectation. As a group, we shared our information, knowledge and skill with each other. We also used your lecture to fulfill your requirements. We would like to express our heartiest gratitude to you, for your tiresome effort for us, which provided us the opportunity to prepare our project. Thank you for your consideration. Sincerely Yours,

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________________________ Rubiya,rob ________________________ Atm Rakib ________________________ Akash…..

Table of Contents

Executive Summary

V 3

1.0 Introduction 1.2 SCOPE

01 01 01

1.3 Methodology

01

1.4 Limitation

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1.1 ORIGIN OF THE REPORT

2.0 Organizational Overview

02 02

2.1 Background of the company 2.2 Vision & Mission of Nissan

2.3Management Structure of Nissan 3.0 Nissan in Bangladesh 4.0 Segmentation, Targeting, Positioning 4.1 Segmentation according to income class 4.2 Differentiated marketing strategy for different target

03 03 05 06 06 07

market

4.3 Nissan ranks high in customer’s perception 5.0 Product portfolio of Nissan 6.0 Competitive pricing strategy of Nissan

7.0 The ways of reaching to the customer 8.0 Promotional activities of Nissan 9.0 Sales performance of Nissan in Bangladesh 10.0 Future plans of Nissan 11.0 Conclusion Bibliography

1.0 Introduction 1.1 Origin of the Report

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08 11 15 16 17 18 19 20 21

This Marketing Report was assigned to us by Kamrul Haque.Senior lecturer and course instructor of our MKT-101 (Principles of Marketing) course And he has a great consideration to make this Marketing Report.

1.2 Scope of the report As the topic of the Marketing Report suggests, the report would focus on the marketing efforts and activities of Nissan Motor Co. W e would like to mention here that this report is prepared in the context of Bangladesh and is based mainly on the activities of Pacific Motors Bangladesh Limited, which is the sole distributor of Nissan vehicles in Bangladesh. Although Pacific Motors deals in various product lines of Nissan, we will only focus on the Saloon Car, SUV and Sports Car categories and will only discuss about vehicles which are included in these categories. We will mainly illustrate on the Segmentation, Target Marketing and Positioning strategies and the Marketing Mix (Product, Price, Place and Promotion) of the company.

1.3 Methodology Nature of the report is Descriptive as well as Exploratory. Sources of information: Both Primary and Secondary information sources were used to complete this report. -Primary Source: Structured questionnaires were prepared for the interviewee. -Secondary sources: Secondary information was collected from the local and global web sites of the company.

1.4 Limitations While preparing this Marketing Report, we faced several limitations such as: -Lack of proper knowledge of the organizational personnel. -Lack of recent data & less information. -Shortage of adequate manpower. -The organizational web-sites are not standard.

2.0 Organizational Overview 2.1 Background of the Company Nissan Motor Co., Ltd. which formerly marketed vehicles under the Datsun brand name is a Japanese automobile manufacturer. The company's main offices are located in the

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Ginza area of Chuo-ku, Tokyo, Japan. Nissan plans to move their headquarters to Yokohama, Kanagawa by 2010; the headquarters will start construction in 2007.Nissan is among the top three Asian rivals of the "big three" in the US. Nissan was first known as DATSUN. In 1914, the Kwaishinsha Motorcar Works, established three years earlier, in Azabu-Hiroo District in Tokyo, built the first DAT. The new car's name being the acronym of the company's partners' surnames:

Kenjiro Den Rokuro Aoyama Meitaro Takeuchi The Works was renamed to Kwaishinsha Motorcar Co. in 1918, and again, in 1925, to DAT Motorcar Co. In 1966, Nissan merged with the Prince Motor Company, bringing into its range more upmarket cars, including the Skyline and Gloria. The Prince name was eventually abandoned, with successive Skylines and Glorias bearing the Nissan name however, "Prince" is still used in names of certain Nissan dealers in Japan. Nissan would introduce a new luxury brand for the US market in the late 1980s called Infiniti.In the wake of the fuel crisis, Nissan became one of the world's largest exporters of automobiles and set up new factories in Mexico and Australia. The company became Nissan Motor Co., Ltd. on June 1, 1934, and was founded by Yoshisuke Aikawa. Nissan built trucks, airplanes, and engines for the Japanese military. Their main plant was moved to China after the land was captured by the military. The plant made machinery for the Japanese war effort until it was captured by American and Russian forces. For two years (1947 to 1948) the company was briefly called Nissan Heavy Industries Corp. Like Hino and Isuzu, but unlike Toyota, Nissan partnered with a European company to gain access to automobile and engine designs. Nissan chose Austin of the United Kingdom, which later became the British Motor Corporation. Nissan began building Austin 7s in 1930, though the legitimacy of their license is debated. The company soon began producing a variety of Austin-derived models like the original Austin A50-based Datsun 1000. These designs were apparently covered by a 1952-1960 license agreement between the companies. In order to overcome export tariffs and delivery costs to its European customers, Nissan contemplated establishing a plant inside Europe's borders. After an extensive review, Sunderland in United Kingdom was chosen due to the local availability of a highly skilled workforce and its position near major ports. The plant was completed in 1986 as the subsidiary Nissan Motor Manufacturing (UK) Ltd. Since then it has arisen to achieve the highly coveted title of being the most productive plant in Europe, and by 2007 will be producing 400,000 vehicles per year.

2.2 Vision and Mission of Nissan Vision: “NISSAN: Enriching people's lives” Mission: “Nissan provides unique and innovative automotive products and services that deliver superior measurable values to all stakeholders in alliance with Renault.”

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2.3 Management Structure of Nissan Behind each Nissan vehicle is a dedicated group of imaginative individuals setting new standards in the automotive industry, and beyond. NISSAN’s leadership team boasts backgrounds and talents as diverse and rich as Nissan's tradition.

Carlos Ghosn - President and Chief Executive Officer, Nissan Motor Co., Ltd.

Toshiyuki Shiga - Chief Operating Officer, Nissan Motor Co., Ltd

Itaru Koeda - Executive Vice President, Nissan Motor Co., Ltd. And Co-Chairman, Board of Directors

Tadao Takahashi - Executive Vice President, Nissan Motor Co., Ltd.

Hiroto Saikawa - Executive Vice President, Purchasing, Nissan Motor Co., Ltd.

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Mitsuhiko Yamashita - Executive Vice President, Research, Technology and Engineering, Nissan Motor Co., Ltd.

Carlos Tavares - Executive Vice President, Nissan Motor Co., Ltd.

Shiro Nakamura - Senior Vice President, Design Director, Nissan Motor Co., Ltd.

Brad Bradshaw - Senior Vice President, Sales and Marketing.

Steven R. Lambert - President and CEO, NMAC

3.0 Nissan in Bangladesh 8

3.1 Pacific Motor Representative of Nissan in Bangladesh In 1966-1977(August) Nissan brought into Pakistan by Eastern Automobiles LTD After 1977 when East Pakistan and West Pakistan was divided into two parts then it was named Pacific Motors which is now in Bangladesh. The first car which was brought to Bangladesh was the DATSUN BLUE BIRD. It was 1200cc.After 1976 the name changes to NISSAN. The meaning NISSAN means SUN. Pacific Motors, the sole distributor of Nissan cars in Bangladesh, offers a wide selection of Nissan models. Its product line includes Sunny, Cefiro, X-Trail, Patrol, Pickup, Urvan, 350Z and Infiniti. Pacific Motors places great importance on "Heart to Heart" communication with its customers. Its goal is complete customer satisfaction in both sales and service. To achieve its goal, Pacific Motors has invested generously in infrastructure to provide unparalleled customer service. It has built up a state of the art showroom and world-class service center. Very recently, an agreement of Distributorship Appointment and Assembly Plant Setup has been signed between Nissan diesel Motor Co. Ltd., Japan and Pacific Motors Ltd. Pacific Motors was awarded twice by Nissan for achieving the highest market share in Bangladesh

3.2 Management Hierarchy of Pacific Motors Chairperson – M.A. Morshed Khan (Former Minister) Managing Director – Faisal Morshed Khan Executive Vice President – A. Jamil Siddque

4.0 Segmentation, Targeting, Positioning: 9

4.1 Segmentation According to Income Class Market Segmentation is the process of dividing a market into smaller groups of buyers with distinct needs, characteristics or behaviors who might require separate products or marketing mixes. Segmentation can be based upon different variables such as: geographic, demographic, psychographic, behavioral etc. Pacific Motors, the authorized distributor of NISSAN cars in Bangladesh, has segmented the car market based on demographic variables. It has classified them in three major categories: 1. 2. 3.

Upper income group (Luxury class) Middle income group (Executive class) Lower income group (Economy class)

4.2 Differentiated Marketing Strategy for Different Target Market

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Target Marketing is the process of evaluating each market segment’s attractiveness and selecting one or more segments to serve. After segmenting the market into the three categories mentioned above, Pacific Motors has decided to go after the potential customers in all three segments. It has adopted a differentiated marketing strategy and introduced separate cars with distinct features appropriate for each target segment. To avoid Cannibalism and excessive marketing costs, Pacific Motors has not crowded the product lines with several cars for the same target segment.

Target Market Category

Product Category Saloon Car

SUV

Sports Car

Luxury Class

-

Petrol, Murano

350Z

Executive Class

Cefiro

Pathfinder

-

Economy Class

Sunny

X-Trail

-

Table# 1.1: Categorized market offerings of Pacific Motors for each of its target segments.

Table# 1.1 Categorizes the different cars offered by Pacific Motors for each of it s target consumer groups. As per the scope of the report, we will only discuss about the offerings of NISSAN in the three automobile categories: Saloon car, SUV and Sports car.

4.3 Nissan Ranks High in Customer’s Perception

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Positioning is the arrangement for a product to occupy a clear, distinctive and desirable Place in the minds of the target consumers relative to competing products. In other words, ‘Positioning’ is the act of designing the company’s offer and image so that the target consumer understands and appreciates what the company stands for in relation to its competition.

In modern times, the SUV class has become quite a popular one and it is not only useful in rugged terrains and rough roads of Bangladesh, but also it signifies status and social class in the Bangladeshi society. As a result, several well established motor companies have brought their wide range of SUVs in the Bangladeshi market and Nissan is not lagging behind. Currently, Nissan offers three SUVs in Bangladesh and compared to others, according to the perceptual mapping model their standing is like this:

4.3.1 Perceptual Map for SUVs:

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Like everywhere else, saloon cars are the most commonly used vehicle for private transportation. So this product line is the focus of every major automobile manufacturer. Pacific Motors has introduced two NISSAN saloon cars for Bangladeshi market: Sunny and Cefiro. According to the perceptual mapping model their standing compared to competing products is like this:

4.3.2 Perceptual Map for Saloon Cars:

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The trend of riding sports cars in urban areas is relatively new, especially in Bangladesh. The market for this type of products is still quite narrow. But young people from the welloff families are getting highly interested and the auto companies are sensing a lucrative potential market in this sector. NISSAN has launched its stylish 350z sports car in Bangladesh recently. According to the perceptual mapping model, its standing compared to competing products is like this:

4.3.3 Perceptual Map for Sports Car:

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5.0 Product Portfolio of Nissan A Product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a need or a want. The basic products of NISSAN are its vehicles. These products are augmented by various services that Pacific Motors provides for its customers. Nissan has a varied range of products. Starting from 1300cc and up to 4000cc they have different types of vehicles to satisfy their customers according to their needs. The list of NISSAN vehicles that Pacific Motors has introduced in Bangladeshi market is given below. As per the scope of the report, we have considered only the models which are included in the Sedan Car, SUV and Sports Car categories.

Product Mix of NISSAN For Bangladeshi Market

Sedan Car Sunny

SUV

Sports Car

Petrol 350Z

Cefiro

Pathfinder Murano X-Trail

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5.1 Saloon Cars:

Product Name: NISSAN SUNNY Engine: 1300/1600cc Price: 12.75/14.75 lakh (BDT)

Product Name: NISSAN CEFIRO Engine: 2300cc Price: 33 lakh (BDT)

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5.2 Sports Car:

Product Name: NISSAN 350Z Engine: 3500cc Price: 35 lakh (BDT)

5.3 SUV Model:

Product Name: NISSAN PETROL Engine: 4000cc Price: 65/48/45 lakh (BDT)

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Product Name: NISSAN PATHFINDER Engine: 4000cc Price: 55 lakh (BDT)

Product Name: NISSAN MURANO Engine: 2500cc Price: 36 lakh (BDT)

Product Name: NISSAN X-TRAIL Engine: 2500cc Price: 29 lakh (BDT)

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6.0 Competitive Pricing Strategy of Nissan Price is the amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service. Pricing for brand new Nissan cars depend on many variables. Firstly most of the time price depends on government tax. If tax rate gets higher, prices will also increase. Secondly, economic growth is another big reason for high price. If the countries economic growth goes down then price may increase. At that time it is very difficult to control the price. Pricing control also depends on international currency like dollar. After analyzing all these things pacific motors set affordable price to the customer. To compete with strong competitors like Toyota and Mitsubishi, Nissan offers its customers more benefits for equal/less price. In this way, it aims to earn higher total profit through maximizing total sales by lowering marginal profit. Almost 60% of the total sales of NISSAN vehicles in Bangladesh are to the government. In these cases, they offer bulk –buying discount if the government buys a lot of vehicles at a time. Pacific Motors is also looking for bringing vehicles which are assembled in Malaysia and Singapore to offer cheaper price to their customers. The prices of the vehicles of Nissan in Saloon Car, SUV and Sports Car categories are illustrated in the table below:

Product Category

Model

Sedan Car

Sunny

SUV

Cefiro Petrol

Sports

Pathfinder Murano X-trail 350Z

Version & Engine Maximum Retail Displacement Price (Tk-in (c.c.) lakhs) FE - 1300 EX- 1600 230JM- 2300 AGL - 4000 GL - 4000 DX - 4000 4000 2500 2500 3500

12.75 14.75 33 65 48 45 55 36 29 35

7.0 The Ways of Reaching to the Customer 19

Pacific Motors is situated in Gulshan Tejgaon Link Road. The show room is situated in such a place where the communication system is very good. The service centre is situated just behind the showroom. There are also other showrooms like TOYOTA, BMW, MERCEDES, and VOLVO etc. When customers are buying cars they can easily go to other showrooms and compare the vehicles. Nissan distributes their automobiles all over the world from Japan. Pacific Motors is the main importer for brand new Nissan in Bangladesh. Pacific motors import brand new Nissan vehicles directly from Japan and stores those cars in their own big warehouse at Kalurghat, Chittagong which has a maximum capacity of containing 300-400 cars at a time .Pacific motor’s main sales center is located in Tejgaon commercial area, Dhaka. After getting order they bring their cars from the warehouse to their sales center. Recently, Pacific motors has inaugurated their second showroom in Agrabad, Chittagong to serve the rapidly growing customer market in Chittagong better.

8.0 Promotional Activities of Nissan 20

Like any prominent company of the corporate world, Pacific Motors Bangladesh has its very own business promotional strategy and methods. Being a profit making business, their main goal is to maximize their sales in order to earn maximum profit. However, they are fully aware about business ethics and consciously avoid all types of illegal and unethical promotion, over-aggressive marketing. • Although Nissan has a wide range of vehicles, Pacific Motors have promoted Nissan Sunny – a mid range saloon car, as their main workhorse to gain market share and earn profit. Though ‘Sunny’ has been present in Bangladesh for a long time, Pacific Motors have successfully turned it into a very popular car from 2001. Nissan mainly promote this car for the middle class people. To promote the car they give many facilities to the customers. For example: After the first 1500 km.: They give free car servicing, including free Mobil and tuning services. After the first 5000 km.: They give free car servicing, including free fuel filter and Mobil. After the first 10000 km.: They give free car servicing, including free Mobil, fuel filters and tuning services. They give similar promotional offers for their other types of vehicles also. • Moreover, if anyone purchases 5 cars or more at a time, then the company gives him/her special discounts. For example: if someone buys 5 cars and the usual price of each car is BDT 1200000, they give discount to the customer and sell the cars at BDT 1150000 per car. •

Nissan price their car very sensibly. For example: the price of one of the models of Nissan Sunny is about BDT 1200000, where as Toyota sells their car of equivalent model and level at BDT 1400000.

•

The company always follow positive marketing. For this reason, when they sell their vehicles they don’t mark out the negative aspects of the vehicles of the competing company. Instead they just try to convince the potential customer by notifying them about the advantages of buying Nissan car. They just compare their high class services with the services provided by other companies.

•

For promotion, they don’t give advertisements on television, newspaper or on any billboards in Bangladesh. They have already achieved a considerable amount of brand image and that is a plus point for them. For promoting their product they participate in international trade fair. When launching a new product, they organise a attractive ‘new product launching ceremony’. Recently they participated in a motor fair held in the China- Bangladesh friendship convention centre.

9.0 Sales Performance of Nissan in Bangladesh 21

Every year, Pacific Motors Bangladesh sets precise sales targets for the next year at the time of their annual budget. Their sales targets are generally quite ambitious and higher than the target of the previous year. They only set somewhat lower targets when they forecast a chance of major future disturbance in car sales like – political conflicts, national elections, natural disasters etc. They precisely sets high sales targets because, they don’t want to make profits only but plans to become the ultimate market leader in the car market of Bangladesh. But even after setting such ambitious targets, like any successful company they almost always meet their annual targets every year or reach a number very close to it. For example: In 2004: the annual sales target of pacific motors was to sell 1000 vehicles. They sold 864 vehicles. In 2005: the annual sales target of pacific motors was to sell 1200 vehicles. They sold 1180 vehicles. In 2006: the annual target is 1000 vehicles. From 1st of January to 13th of November they have sold 830 vehicles.

1400 1200 1000 800

Target Sales

600 400 200 0

2004

2005

2006

10.0 Future plans of Nissan 22

Now Nissan is at second position in Bangladesh in the business of selling brand new vehicles. But they are not at all satisfied with their success. In very near future, like in a year or two, they want to take the 1st position. Right now they are analysing their sales record of the previous years and the current year and over viewing their overall marketing strategy. After this, they will set a standard marketing plan for the next year in order to reach their ultimate goal. In the mean time they plan to launch 2 new models of Nissan sunny and a brand new model of luxury sports car.

11.0 Conclusion 23

From the topics discussed in the preceding chapters it becomes very clear to us that Nissan holds quite a favorable position in the consumers’ mind. Nissan is very tactfully promoting its product in Bangladesh. Nissan has done considerable amount of research to analyze the consumer profile of Bangladeshi market. At present it is trying to attract the attention of the younger generation. Nissan is facing strong competition mainly from Toyota and Mitsubishi. Nissan is trying to position itself in the higher end of Bangladeshi market. The way Nissan is trying to position and promote itself is quite logical and major success of Nissan can be expected in the days to come.

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Bibliography

List of Reference: 25

www.nissan-global.com http://en.wikipedia.org/wiki/Nissan www.nissan.co.uk www.vintageperformance.com www.autos.com

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