Marketing Plan For Hybrid Vehicle

Zulu Auto Inc. is a car manufacturing company that is based in Johannesburg, South Africa. For the past ten years, Zulu Inc. has been manufacturing and selling three major brands of cars, most of which are exported and sold abroad. As a result of the current green revolution which have the potential of increasing the demand for hybrid vehicles that will operate using car engines and batteries(Boschert,2007 pp.1-40), Zulu Inc.’s management made an executive decision to begin the production of plug-in hybrid vehicles. Zulu’s plug-in hybrid will have large batteries which can be re-charged by simply connecting it to common household electricity socket. The company plans to market their first proposed plug-in hybrid car, code named PH-15, to a designated target market within South Africa and to other potential customers in foreign countries.

For the first three years, Zulu Inc. plans to focus on market penetration and aggressive marketing of PH-15. This paper presented the details of the market opportunities and the marketing strategy which the company plans use in promoting and marketing PH-15. In the material that follows, emphasis will be on the following areas:

Strategic objectives;

Mission Statement;

Situational Analysis;

Marketing Strategies; and

Metrics and implementation control.

Strategic Objectives

The overall aim of Zulu Inc. is to make the marketing of PH-15 an enviable success. Hence the strategic objectives of the company with respect to PH-15 are to:

To build and successfully market unique cars and car products as well as provide superior services to the customers and other stakeholders;

To build and successfully market a world class plug-in hybrid vehicle that is both affordable and which does not pollute the environment;

To actively partake in the pursuit of a cleaner environment by producing plug-in hybrid vehicles that is not only attractive but also is easy as well as is fun to drive.

To increase our market share by producing and marketing plug-in vehicles that will satisfy the desires and the tastes of our customers.

Mission Statement

Zulu Inc. is convinced that, to their customers, having a good car is a symbol of freedom and personal achievement. The company is also aware that as the world population continues to increase, there will be an increase in the demand for affordable means of transportation which will be both efficient and environmentally friendly. Hence the company’s mission is to enrich the lives of our customers, shareholders, dealers and other stakeholders by building efficient and affordable cars that will meet this demand.

Having presented the above background, the specific strategies for achieving the above objectives and mission are presented below.

Situational Analysis

4.1Product Overview

PH-15 is the proposed plug-in hybrid electric car that will be manufactured by Zulu Inc. Like other plug-in hybrid cars, PH-15 will have an internal combustion engine that will run on gasoline and an electric motor. The electric motor will be powered through an electrical energy that will be generated using a battery. PH-15’s battery will be designed in such a way that, it will be large enough to permit the vehicle to move a large distance(say, about 100 miles) using electrical energy only after charging it from a grid that runs on electrical energy from a battery.

PH-15 will be propelled by a combination of battery and gasoline. It will be a series hybrid car where the main role of the electric motor will be to power the wheels of the vehicle; while the role of the gas will be to power the generator that will continuously recharging the battery. It is important to note here that for Zulu Inc. , the advent of PH-15 will be the dawning of a new era because there is a global demand for cars that are environmentally friendly. It is thus not surprising that many car manufacturers worldwide are increasingly researching on how to perfect on hybrid cars.

4.2Product Offering

PH-15 will have other facilities and features of any regular car. However, the additional features that will make it a unique vehicle include the following:

A satellite radio;

High intensity definition headlights;

A computer interface with an in-dash DVD player;

8-disk in-dash CD changer;

Sliding front seat;

6. In-line 4 cylinder turbocharged engine with 200 horsepower;

7. Six speed manual transmission;

8. Back-up sensors;

9. Lightweight high strength Polycarbonite windows; and so on.

The point to note here is that because the modern day car buyers are highly interested in cars that are both environmentally friendly while possessing features that will enhance luxury, safety and capability, PH-15 is expected to be a commercial success.

4.3 Market Segmentation and Market Size

Zulu Inc. is located in Johannesburg, South Africa. Johannesburg is a city whose population is about 3 million. Most of the residents work in banks, mining companies, hospitals, schools and colleges. A large proportion of the population is self-employed. This implies that there will be a huge market for PH-15. Broadly speaking, there is a huge demand for hybrid vehicle worldwide. Hence PH-15 is expected to sell well in the huge international market(Boschert 2007, pp. 1-40; Hybrid Cars, 2008; Dunlap 2010; Chambers, 2010; Live Science, 2008). The company will apply the principles of market segmentation by region(Griffin, 2008; Daft and Lane, 2010; ) to divide its potential market as follows: 10 per cent PH- 15 customers live in South Africa, 30 percent in Asia, 20 percent in Europe, and 40 percent in the United States. This customer demographic is presented in figure 1.

4.4Market Share and Competitor Analysis

As was noted above, the demand for hybrid vehicles, especially the plug-in type, is growing every year. As a result of this many car manufacturing companies have shown keen interest in satisfying this demand thereby creating a large competitive market(McCardell, 2011; O’Dell, 2009; Matthews, 2011; Internet Brand, 2010). Some of the company’s major competitors and their share of the market are shown in figure 2. Because PH-15 project is perceived by Zulu Inc.’s management to have a great potential for expansion, the company plans to attain a sustainable competitive advantage in the industry by using effecting marketing strategies, which will be explained later in this report.

4.5 SWOT Analysis

The company will apply SWOT analysis to evaluate the strengths, the weakness, the opportunities and the threats(Griffin, 2008 pp. 67-88; Applegate and Johnson, 2007; Mandura, 2007; Nwankwo and Gbadamosi, 2011) of the PH-15 project. The SWOT analysis of the project is presented on the table 1 below. The company believed that by focusing on its

Table 1 – The SWOT Analysis of PH-15

Strengths

1. Fast Delivery

2. Gasoline can be used to charge the battery

3. Easy credit to resume production

Weakness

1. Limited energy content in the battery

2. Customer factor, there is a possibility that customers may sometimes forget to recharge their cars.

Opportunities

1. High demand for hybrid cars

2. Government’s keen interest to support the development of hybrid vehicles

3. Huge market

Threats

1. The market for hybrid vehicles is still a conservative one. Some people still mistrust hybrid cars.

2. Risk for technology lock-in

3. Standardization problems

Strengths and opportunities, it can mitigate or overcome its weaknesses and threats.

4.6PEST

4.6.1Political

Political environment has a large affect on everything these days, especially on automotive industry .The political environment consists of laws, government agencies, and force groups that pressure and limit a range of organizations and individuals in a given society. Increasing legislation, changing government agency enforcement, and increasing the emphasis on ethics and socially responsible actions all contribute to factors that play a role in the political environment. Furthermore countries like china and UK are environment friendly and they already supporting the trend of protecting the plant which will give good opportunity for PH-15 to enter their market.

4.6.2 Economic

Economic aspects have a great affect also on PH-15 in the Macro-environment. The economic environment consist of elements that influence customer purchasing power and spending types, so ZULU must pay very close attention to major trends and consumers spending types in order to penetrate their hybrid- plug car. For example customer began to feel the increase in their spending on gasoline. As more money has to be spent elsewhere, there is less money available for gasoline fees.

4.6.3Social

The culture environment is made up institutions and other forces that influence society’s value, perceptions, preferences, and behaviors. Hybrid- plug car has became a big division of people with environment friendly culture as well as it became as a almost a status symbol for those kind of people.

4.6.4Technology

Technology is a main force that is continually changing our environment. Big opportunity crop everyday for PH-15 in the technology environment, as PH-15 equipped with computer interface with an in-dash DVD player, 8-disk in-dash CD changer, GPS, and many other amenities. All these items have become very popular amongst customer and proven to be relatively inexpensive way to attract customers.

Strategy

5.1 Segmentation

Market segmentation and customer targeting is significantly important for ZULU hybrid-plug car

Geographic segmentation :

Age group: 18-60 years old

People already low fuel low emission car.

Families with high income

5.2 Pricing strategy

A price coming at $ 30,000 will be very key for PH-15 to be able to position the Hybrid-plug car where they want, as well as they have to be aggressive in their pricing in order to make it affordable for buyer and to gain the most of the market share in the competitive market

5.3 Product brand positioning

PH-15 Hybrid-plug is a luxury car with price range starting from $ 30,000. The most prominent competitor is GM Volt (Figure 2 ) whose price tends to be higher than PH-15. Perception map will demonstrate the brand positioning.

High Cost

PH-15

High quality

Low cost

Low quality

5.4 Market Growth

Achieving Market growth would be applied by expanding PH-15 international like entering the UK market. So ZULU should increase their market share is its existing market for. Ansoff Matrix is demonstrating the market growth

EXISTING PRODUCT

NEW PRODUCT

NEW MARKET

PD1, YD20

PH-15

EXISTING

MARKET

South Africa , Nigeria ,Morocco

UK, Asia, US

Implementation

6.1 Implementation Plan

Table 2 below described the implementation plan for the PH-15 project. The company’s management believed that by following this plan, it will attain its mission and objectives within a reasonable period of time.

Table 2 – PH-15 Project Marketing Plan

Deliverable

Timeline

Who is Responsible?

1. Collect, Analyze and evaluate customer demographics in South Africa, Europe, Asia and America

3 months(by June, 2011)

Research and Marketing Department

2. Develop customer attraction and retention strategies

3 months(by June, 2011)

Research and Marketing Department

3.Conduct Market Research and start all forms of advertisements.

3 months(by June, 2011)

Research and Marketing Department

4. Start production of PH-15 and introduce the car to the market.

6 months(by October, 2011)

Engineering/Production Department and Marketing Department

6.2 Pricing

The strategy of pricing need to be smart, Hybrid-plug vehicle is an attractive idea but ZUZL need to convince the customer. In the sealing of PH-15 ZUZL should follow the philosophy of Best price, instead of setting a higher price an expect buyer to negotiate for lower price ZUZL should offer PH-15 at the best price they are willing to sell. As well as present one package price i.e. offer fully equipped vehicle at a convinced price so that customer will not need to pay extra for other feature

6.3Promotional Strategy

ZUZL’s promotional strategy should be based on advertising mainly. This type of promotional activity will increases PH-15 brand awareness and informs customers about vehicle’s developments and price levels. Promotional activities on the Internet provide great potential in attracting customers. Provide sells is key approaches to apply this plan.

Twitter: launching interactive session with the existing and potential customers to reach their need and satisfaction.

Facebook : improve customers relationship By providing an official facebook page to keep the customer updated with all the coming news and events.

YouTube: As You Tube is considered to be the world’s best video platform, presenting short film to introduce PH-15 style and design will be effective

6.4 Product Life Cycle

After 2 years from the luanch of ph-15 the sells are likley to tend to be lower. In the process of product life cycle PH15 reaches its maturety stage

.

Figure. Product Life cycle (Marketingteacher, 2010)

Evaluation of Results

The PH-15 project can be considered successful if the following situations occur:

PH-15 acceptance rate increases by at least 80 per cent within the first three year;

The market share grows by at least 30 per cent annually;

The sales revenue from the project grows consistently by at least 40 percent within the next three years;

The company’s return on investment(ROI) becomes at least 30 percent within the first three years;

The cash flow from the project becomes more adequate to fund further growth.

7.1 Customer satisfaction

Introduce PH-15 to the UK must be carefully monitored and measured. Customer satisfaction is very important in the automotive sector. In order to measure it, the company must spot customer expectations. On the market, ZUZL must analyze its customers’ expectations by conducting a series of surveys. These surveys should be directed to customers and to the sales force.

7.2Budget

The company plan to spend as much as $2,000,000 in marketing PH-15. This money will be spent in the following areas: market research, public relations campaign, advertisements (TV, internet, radio, and newspapers and magazines) and promotion. The breakdown of the expenditures to be made in these areas is shown in figure 3.

As shown in figure 3 above, 70 per cent of this amount will be spent on advertisements, 10 per cent on market research, 10 per cent on public relations, and the remaining 10 per cent on sales promotion. The company believes that this strategy will help the product in not only to penetrate the market quicker, but also to attain a competitive advantage in the industry.

7.3Sales Forecast

The following graphs indicate PH-15 sales forecast for the next 3 years.

Figure (4) domestic sales forecast

Figure (5) UK sales forecast

Conclusion

This marketing plan contains the strategies which will enable Zulu Inc. to successfully introduce their proposed plug-in hybrid car, namely, the PH-15. With the growing demand for hybrid cars worldwide, the company’s management believes that the introduction of PH-15 will be a step in the right direction. As a concluding remark, it will be necessary to note that by following the directions presented in this paper, the company can successfully execute the PH-15 project as well as attain a competitive advantage in the industry.