Marketing

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Table of Contents 1.0 Introduction .......................................................................................................................... 1 1.1 Objectives ......................................................................................................................... 1 1.2 Organisation Profile ......................................................................................................... 1 1.3 Methodology .................................................................................................................... 1 2.0 Organisation Orientation ...................................................................................................... 2 2.1 UML Orientation .............................................................................................................. 3 2.1.1 Structure..................................................................................................................... 3 2.1.2 System ....................................................................................................................... 3 2.1.3 Style ........................................................................................................................... 3 2.1.4 Staff ........................................................................................................................... 4 2.1.5 Skill............................................................................................................................ 4 2.1.6 Strategy ...................................................................................................................... 4 3.0 Managing Brands ................................................................................................................. 5 3.1 Corporate Brand ............................................................................................................... 5 3.2 UML – Managing brand and Brand focus ....................................................................... 5 4.0 UML methods of understanding market dynamics .............................................................. 6 5.0 UML new product development process ............................................................................. 9 5.1 Recommendation to improve ......................................................................................... 10 6.0 Conclusion ......................................................................................................................... 12 7.0 References .......................................................................................................................... 13 8.0 Appendix

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1.0 Introduction 1.1 Objectives

This report is mainly highlighting the following objectives:  Identify the Orientation prevail within the organisation and to explain steps that the organisation should follow to convert current orientation into marketing orientation.  Identify the process followed in managing brands within the organisation and access their brand focus.  Understand the methods that the organisation adopts to understand market dynamics.  Understand the new product development process followed in the organisation.

1.2 Organisation Profile

United Motors Lanka Plc (UML) is a corporate giant in the Sri Lankan automotive industry and is the sole distributor of Mitsubishi motor vehicles in Sri Lanka with sixty five years of excellence. Since its listing on the Colombo Stock Exchange in 1989 as a public quoted company UML has retained its focus on the core business of selling Mitsubishi vehicles and providing after sales services for Mitsubishi customers with high corporate recognition and customer reliance. Whilst United Motors Lanka PLC maintaining its position as the holding company has diversified its business portfolio to five subsidiary companies and a jointly controlled entity to withstand the volatility of the automotive industry across the globe.

(Refer Appendix 1)

1.3 Methodology The data has been collected through various internal and external sources such as Internet, annual reports, Interviews, etc; and analysis using both qualitative and quantitative methods.

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2.0 Organisation Orientation Values and overall performances of any organisation explain the orientation that prevails within particular organisation. This describes organisational key focus towards its operations.

In today‟s context most manufacturing base organisations are tend to be production oriented as well as cost oriented to improve their efficiency level while creating competitive advantage. At the same time service organisations and other sales base organisations mainly focus to create sales orientation and/or marketing orientation. Therefore any organisation can exhibit any one of a number of different orientations as follows.

 Production orientation  Cost orientation  Sales orientation  Marketing orientation

Production oriented organisations mainly focus its productivity in production process while ensuring quality and volume. Cost oriented organisations key focus is to maximise the profits while minimising cost. In fact sales oriented organisations more keen about sales turnover and its related aspects. In today‟s context marketing orientation become one of key factor to create competitive advantage. Marketing orientation is the process which the organisations achieve its customer satisfaction by closely examine their expectations effectively and efficiency within available limited resources.

In order to identify the orientation that exists within the United Motors Lanka Plc, we can use McKinsey “seven S” framework.

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2.1 UML Orientation

Source: Strategic Marketing Management by Richard M.S. Wilson & Colin Gillian

2.1.1 Structure UMLâ€&#x;s structure has nine hierarchies and power is distributed through formal authority, team work and delegation. All hierarchical layers are interrelated and interconnected in a process such as decision making. Especially situation like new service development, service quality assessments bottom level management involvement is high and service related customer feedback is highly concern.

2.1.2 System UMLâ€&#x;s systems are more customer centric, openness to change, search for better ways, speed of action, hard work with an aggressive determination and highest level of integrity to create optimum returns to its stake holders.

2.1.3 Style Top management of UML is always seeking opportunities to diversify its business activities while considering bottom level managers ideas and customer feedback.

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2.1.4 Staff Company consists with loyal employee base which facilitated by pleasant working environment and work life balance. Annual get together and award ceremonies such as “Technician of the month” are some of actions taken by UML to develop motivated customer oriented staff.

2.1.5 Skill Company have identified that the skilled labour is key factor in building customer approach business model. Therefore ongoing training and development programme are conducted by the company for each and every department. UML is recently offering repairing services for all hybrid vehicles is one result of proper parent company training programmes.

2.1.6 Strategy UML‟s strategy is to provide high quality products, services and transport solutions to their valued customers. Offering services such as leasing, hiring and introducing new product ranges through subsidiaries is a strategy adopted by UML to emerge as a total transport provider.

When considering practical application of McKinsey “seven S” framework related to United Motors Lanka Plc, it can be identify that the company orientation is more towards with market orientation.

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3.0 Managing Brands A strong brand can establish a long-term vision for the company and craft the company‟s operation to meet that objective David (2004). A strategy based on a strong brand is likely to be sustainable because it creates barriers for the rivals. Below are the internal drivers which support for the emergence for a strong corporate brand.

Source: (Van Riel & Fombrun, 2007)

3.1 Corporate Brand Corporate brand consists of the features of an organization that creates associations with employees, investors, customers and the public whilst it‟s personalize the company to create value through company‟s strategic position, institutional activities, employees and product and service portfolios. Thus corporate brand can simply referrer to the total personality of an organization that makes it unique whilst relating to its stakeholder perceptions. ( Fombrun, 2007)

3.2 UML – Managing brand and Brand focus UML„s strength as a corporate brand derive from Mitsubishi‟s brand value. Mitsubishi has being the top of the mind brand in the local market by UML. Company achieved a world record for Mitsubishi by gaining 47% market share in the brand new Japanese vehicle market in 2001 (UML, 2009). This was the highest performance the brand “Mitsubishi” had achieved in the world. Company has an outstanding performance as the only company in Sri Lanka who has grown its bottom line by 40 % and ranked as one of the 100 most respected entities.

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The importance attributed to after sales services have boosted the UML‟s brand equity via reducing purchasing risk. In this view company established 6 branches selling genuine spare parts and over 250 dealer network across the country (UML, 2009). UML recognition by customers for quality products has enabled the company to charge premium prices while offering customers premium quality spare parts.

Company has successfully diversified into strategically related areas such as leasing, hiring and trade-in to provide total transport solutions to its customers with the vision to be the best company in Sri Lanka through diversification. Company adopts a brand strategy which is certified by the parent group to maintain its visibility within the group.

As foresaid endorsed brand strategy, establishment, quality existence, after sales service, and customer centric marketing approach are main segments of company brand management process which leads to enhance the brand equity of United Motors Plc.

4.0 UML methods of understanding market dynamics Under highly turbulent volatile competitive business environment, it is extremely important to understand market dynamics to gain competitive advantage. Market dynamics explain trends and changes available in the market which influence consumer‟s behaviour and perception. Therefore organisations tend to use various methods to build high understand about market dynamics such as continues research, market sensing, marketing audit, etc.

As a well establish Sri Lankan company, UML highly depend on marketing audit to analysing market dynamics. Company present high achievements, brand equity and customer centric decision processes are the main evidences which derived from effective marketing audit done continuously.

According to Kotler‟s view, marketing audit is a comprehensive, systematic, independent and periodic examination of a company‟s or business unit‟s – marketing environment, objectives, strategies and activities with a view to determining problem areas and opportunities and recommending a plan of action to prove the companies performances.(Kotler, 2007)

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In UML marketing audit is a part of management audit together with financial audit, personnel audit production audit and service audit. UML uses its marketing audit to analysing all external and internal factors in order to identify strength, weaknesses of the company and asses opportunities and threats available within the industry. UML marketing audit is the true starting point of the company for its strategic marketing process. Entire marketing audit of UML is basically implement to accomplish several key objectives such as to analysis internal and external environment of the company, evaluation of past performances and present activities and to identify future trends in the market. In order to achieve these task UML closely examine business environment which they operate, together with each and every marketing systems and activities perform by the company.

UML follow certain procedure to conduct its marketing audit for the purpose of understanding marketing dynamics. That‟s procedure as follows.

Asses marketing activities: Under these UML asses it‟s all current marketing activities include activities provide by other subsidiary and joint ventures such as TVS automotive, Orient Motor Company Ltd, etc. This contains following areas; 

Product related activities – Research, Quality control, Test marketing, Concept testing



Customer service activities – Technical support, Installation, Skill training, Complain handling



Pricing activities – Financing, Cost control

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Distribution – Availability of spare parts, Customer convenience asses, Channel efficiency

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Promotion – Public relation, Media

Apart from aforesaid asses areas, company closely examine ways of enhance supply chain efficiency and assessing additional marketing activities that customers need and expect.

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Review of standard procedures: This part of marketing audit enables company to review all its written and oral procedures exist for each marketing functions and assess whether those procedures are up to date and actually followed by employees.

Identify performance standards: This enable UML to identify how does each activity contribute to customer satisfaction within each marketing mix element, such as product, price, distribution, promotion, people, process, physical appearance. Furthermore this will evaluate the capabilities of the each activity towards achieving company goals and objectives. In same manner qualitative and quantitative standards of each activity highly assess.

Performance measurements: This enables UML to assess performances of each marketing activities using profit base, time base measurements, while evaluating how well performance monitored internally by managers and externally by customers.

Determining performance differentiation: From this UML compare company performances with industry performances while identifying products, services, geography and distribution channel differences with its competitors.

Determining differences in competitive programmes: This enables UML to evaluate insight of its competitors from analysing their strategies such as market development, product development, financing and administrative, etc.

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5.0 UML new product development process

UML new product development process is bringing up a new product or service to the market. This process is important and company following each approach in an order since the each stage indicates the information input and decision making to make successful new products. The stages of the new product development process are; 1. Idea Generation 2. Business Analysis 3. Commercialisation

Idea Generation This is the first stage of the UML new product development process where ideas are generated by using the appropriate techniques. This is an ongoing process where company get inside and outside contribution. Many new businesses came in to existence due to the ideas generated. Therefore idea generation and management are important to retain good corporate health. Many sources are used to encourage ideas including internal sources like research and development, design, marketing and sales, production and customer services and also external sources like customers, suppliers, competitors and secondary sources

Business Analysis All new product ideas generated from new product development process moves on to the business analysis stage. In business analysis, demand, cost, sales and profitability is been calculated. In this stage company consider all PESTEL factors of external environment. For example economic situation and its effects will have a straight impact on the projected sales apart from the product category which will have an impact from external environmental factors such as inflation, exchange rate and macroeconomic condition. (Refer Appendix 2)

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Commercialisation The importance of having a proper product mix is crucial for a product or service to be commercialized, especially to target for the first time. If this is done correctly, UML highly believe that they can capture their potential customers. All promotion strategy, price strategy, distribution strategy and even the product strategy are carefully made under this stage of new product development.

5.1 Recommendation to improve

Aforesaid UML new production process can improve by modify those stages in order to improve effectiveness and efficiency. Therefore following process can adopt by UML as a modification of current process.

Idea Generation

Idea Screening

1. Concept Development 2. and 3.

Testing

4. Business Analysis

6. Commercialization

5.

Test Marketing

Development

Apart from the all current new product development stages of the process, following additional steps can be added into current process in order to improve the quality of final output.

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Idea Screening It is an evaluation stage which filters the generated ideas. While evaluating, the poor ideas will be dropped and the acceptable ideas will follow the next stages. As per our collection of ideas we evaluate the company strengths, weaknesses, opportunities and threats. The evaluation mainly highlighted the company objectives, target market segment, financial investment, competition and return on investment.

Concept testing Concept test evaluate new product idea by using methods such as marketing audit, research etc. This will useful for company to evaluate customer response for the certain new product or service.

Therefore this provides a chance to deliver certain new product or service to the customer without failure while fulfilling customer satisfaction.

Test marketing The people perception, attitudes and values are varying from different industry. Therefore company should need to get proper understand about UML consumers and provide superior service for them because we dealing with B2B and B2C both markets. This is not an easy task because make some mistake should be make big lost.

Commercialisation It is a process of organising organizational 7Pâ€&#x;s (for service) or 4 Pâ€&#x;s (for product) regarding new product or service. This contains all promotion strategy, price strategy, distribution strategy and even the product strategy.

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6.0 Conclusion United Motors Lanka Plc (UML) is a corporate giant in the Sri Lankan automotive industry and is the sole distributor of Mitsubishi motor vehicles in Sri Lanka with sixty five years of excellence. Mitsubishi brand is the flagship brand of United Motors Lanka PLC, the sole distributor of Mitsubishi. Thus UML‟s brand identity stems from Mitsubishi‟s reputation and brand value. UML has positioned a well established corporate brand in the Sri Lankan automotive industry with guaranteed high quality performance.

Implement of McKinsey “seven S” framework, identified that UML is a marketing oriented organisation with several core values such as reliability, trust, credibility and responsibility.

In order to deal with never lasting change marketing dynamics company highly rely on market audit which consist of several steps. Furthermore it is identified that the UML new product development process is consist of main three stages which can further improve by adding certain new stages. This will leads to improve effectiveness and efficiency level of introducing new product or service to its customers which is a critical factor to face high competition.

(Word Count: 2558)

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7.0 References 

David. A. Aaker (2004). Strategic Marketing Management. 6th (ed). NY: John Wiley & Sons

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Ferrell O C & Hartline (2005). Marketing Strategy. 3rd (ed). Thomson Learning,

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Fombrun, C J & Riel, C B M Van (2004). Fame and fortune: How successful companies build Winning Reputation. Upper Saddle River, Pearson education: NJ.

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Fombrun, C J (1996). Reputation: Realizing the value from the Corporate Brand.

Harvard Business School press: Boston

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Kotler, P., Keller, K., Koshy, A., and Jha, M (2007). Marketing Management - A South Asian Perspective, 12th (ed). Prentice Hall, USA

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Riel C B M Van & Fombrun, C J (2007). Essentials of corporate communication: Implementing practices for effective Reputation Management. Routledge: Abingdon

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United Motors Lanka PLC (2009) Annual Report 2008/2009.

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United Motors Lanka PLC : http://www.unitedmotors.lk/ [ retrieved on 15 May 2011]

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Wilson R M S & Gilligan C (2005). Strategic Marketing Management: Planning, Implementation and Control.2nd (ed). Butterworth-Heinemann, UK

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