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Marketing, Pricing and Distribution of Datsun Go

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Neelutpal Saha
Neelutpal Saha

Marketing for latest vehicle Datsun Go launched by Nissan. The ppt contains various means of distribution and promotional strategies which can be used by Nissan

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Marketing, Pricing and Distribution of Datsun Go
• The Datsun brand dates back to the earliest days of Japanese car building. Datsun evolved to become an automaker recognized as Durable, Attractive and Trustworthy. More than 20 million Datsun vehicles were sold in 190 countries during its more than 50-year run. A brand supported and loved by many worldwide, this is the spirit the new Datsun brings to young risers. • The heritage and guiding principles are reflected in the badge of the Risers. Honoring the spirit of an earlier Datsun, the center portion retains the essence of the original logo. Surrounded by a hexagon inspired by shiny bolts, the rest of the badge conveys a modern robustness and the confidence to succeed in a new world. HISTORY OF DATSUN
HATCHBACKS
PEST
POLITICAL ENVIRONMENT • Indian Government has changed its role from controller to facilitator. • In 2002, Indian government formulated an auto policy which encouraged foreign equity investment up to 100%. • The liberalization steps have played an equally important role in bringing the Indian Automotive industry to great heights. • Institutionalization of automobile finance has further paved the way to sustain a long-term high growth for the industry.
ECONOMIC ENVIRONMENT • Rising GDP consecutively for the last 5 years. • Per capita Income is rising , which is affecting the segments of automobiles being ventured into. • There is cut Throat competition among many players in market. • Increasing urbanization of rural India also has given rise to increase in sales. • concept of service in auto industry has changed into customer care now.
SOCIAL ENVIRONMENT The demand of cars has been fueled by following factors :- • - Indian families are becoming increasingly nuclear • - Increasing Propensity to spend • - Increasing distances between work-place and residence • - Increase in percentage of working women has increased number of earning members in a family.
TECHNOLOGY ENVIRONMENT • Alternate Fuel: increasing use of CNG and LPG instead of conventional fuel. • Advent of Internet: The customer can now use the Internet to place the order and expect the manufacturer to fulfill his customized demand in the minimum time. • Electric Car: With technological advancements electrical car may emerge as a preferred option .
Page 9 STRENGTHS  The Datsun Go might be an all new car but it shares a lot of its underpinnings from established products from the Nissan's stable.  Dominated by the Marutis and Hyundai, especially in the budget segments, Nissan has endowed the Go with a 2 year-unlimited mileage warranty that is best-in-class.  To make the choice wider and provide an opportunity for customers to personalize their cars, Datsun will offer a wide variety of accessories  Datsun Go is produced locally in Chennai and Govt provides monetary assistance for manufacturing units. OPPORTUNITIES  Reduction in Excise duty  Rural demand is rising  Income level is at a constant increase. WEAKNESSES  Infrastructural setbacks  No stronghold yet for Nissan like India as compared to other brands  Too many taxes levied by government increase the cost of production  Low investments in Research and Development  Datsun in itself an unknown entity in the Indian Automobile industry THREATS  Increasing rates of interest  Too much competition  Rising cost of raw materials. S OW T Positive Negative Internal External
 Three cylinder, 796cc engine  maximum power of 47bhp@6,000rpm  maximum torque of 7kgm@3,500rpm.  Dimensions as 3395X1490 mm and a 2360mm wheelbase  Mileage - 21.1kmpl  Boot space - 210ltrs  Three-cylinder, 814cc engine  maximum power - 55bhp@5,500rpm  maximum torque - 7.6kgm@ 4,000rpm.  Dimensions as 3,495X1,550mm and a 2,380mm wheelbase  Mileage - 20.2kmpl  Boot space –215 ltrs  Three-cylinder, 1198cc engine  Maximum power of 67bhp@ 5,000rpm  Maximum torque - 10kgm@4,000rpm  Dimensions as 3,785X1,635mm and a 2,450mm wheelbase  Mileage – 20.6kmpl  Boot space - 265ltrs PERFECT COMPETITION ALTO-800 EON-SPORTS DATSUN GO
PRICING STRATEGY
TARGET AUDIENCE Indian Middle Class Lower income and middle income buyers (People looking for value for money) First Time Buyers Generation Y! (age group:20-30)
What should be the selling price? Datsun which is a new entity in the Indian Automobile Industry is keeping its price far less than the average selling price of vehicles in India. They are definitely priced right in the segment of hatchbacks in India. Hatchback Sales For Month of February 2014 Brand Price Volume Value Alto 245917 24623 6055214291 Swift 458181 19099 8750798919 Wagon R 360895 12674 4573983230 i10 grand 525743 10576 5560257968 Celerio 390000 7323 2855970000 Eon 283377 7312 2072052624 i20 481094 4292 2064855448 i10 375792 4041 1518575472 Santro 365958 4002 1464563916 Indica+vista 467440 3781 1767390640 Total 97723 36683662508 Average Selling price 3,75,384
Markup Pricing Strategy: Cost Plus Unit Cost of a car = (Fixed Cost + Variable Cost)/Sales • Here fixed cost includes raw material, manufacturing cost, etc. • Whereas variable cost will include distribution cost, cost of sales. • Calculate a target ROI feasible to sustain in the industry • Markup Price = Unit Cost/(1-ROI) Suppose the Unit Cost of the car is Rs 2,50,000 and the ROI is 20% • Therefore , – Markup Price = 2,50,000/(1-0.2) = 2,50,000/0.8 = 3, 12, 500
Datsun Go to be launched within a price range of 3-4 Lakhs • Datsun Go is likely to commence its Indian innings with three trim levels (D, A and T). The entry level variant, with a price tag of INR 3 lakhs, will be sold alongside the a middle-variant, priced around INR 3.5 lakh, and a top-end variant with a price tag of INR 3.8 lakhs • They want to build an image for this new entrant in Indian Automobile industry • They are very aggressive and will keep price less than the competition • They are manufacturing the cars at Chennai Plant so cost of production is low. • They want to pull in more volume even at less margins • They want to fill up the gap that was existing in the market • They want to provide their entire range of cars within the range of consumers
Distribution Strategy of Datsun Go Under
Changing Automobile Industry
Drivers behind distribution process• The decline in profits on new cars has forced dealers to make up the shortfall by looking at what many have historically considered "filler" businesses: parts and service, used cars, financing and insurance, and fleets. The problem is that a conventional dealership is not necessarily positioned well to conduct all of these businesses because of their different economics, bases of competition and consumer purchasing patterns.
Types of Channel in Automobile Industry • General distributors are large nationwide distributing firms operating with logistics and warehouse capabilities. As stockholding resellers they receive imported goods from suppliers, stock them and distribute them. • Management of sub-tier distributors is quite diverse. A common practice imposes annual sales targets on them to ensure minimum sales through each tier-1 or city dealer. These dealers typically receive bonuses of 1-2% for meeting their targets. They are further divided in two parts: • Tier-1 dealers who operate on a state level, meaning they cover one to a few states. They are the “go-to” choice for most general distributors and are easily available in most regions • City dealers are the second type of sub-tier dealers in this market. City dealers are less focused than their larger counterparts and try to sell a large variety of products to cities within their footprint. This category typically includes stockholding resellers and those without stock as well as agents working on behalf of upper-tier distributors.
Features of the channels
Present Distribution System of Nissan Chennai Central India Hover Mumbai New Delhi Kolkata
Nissan Showrooms • Currently Nissan has in total 141 either purely sales or sales plus Service centres spread all over India
Distribution Channels suggested by us NissanChannel 1 same as earlier diagram
Description of the Channels• Channel I represents the manufacturers' exclusive sales organization • Channel III refers to independent dealers. Recently the third channel has been substantially growing in the Indian Auto superstores and networks of distributors have mushroomed • With the emergence of the Web a new channel has been established. Auto manufacturers are setting up virtual showrooms and exclusive dealers are using the Web to offer information and new services.
PROMOTIONAL STRATEGY
Advertising-  Display at major Corporate hubs (ex DLF Cyber City), Malls, window displays  Billboards near highways, major streets catering to lot of traffic, bus stands  Digital Marketing campaigns targeted at the youth  Press Advertising and Television Ads  TBWA Worldwide will lead all the communications for the return of Nissan's Datsun brand that will be launched in India, Indonesia and Russia in 2014.  Open up new showrooms at prime locations TBWA is an Advertising agency. It was founded in 1970 in Paris, France, as a merger between Tragos American Management, Bonnange French Marketing, Wiesendanger Swiss Creation, and Ajroldi Italian Client Services Public Relations-  By collecting and highlighting testimonials of buyers  By co-sponsoring events like IPL 2014  By choosing a brand ambassador who match the people’s perception of young and dynamic, ex Shikhar Dhawan  By announcing Consumer contest like making a slogan for the car
Sales Promotion-  By offering good discounts (limited/tempting price offers) on pre-bookings on first come first serve basis  Exchange offer with old cars  By tie-up with banks for providing loans on lesser EMIs  By offering free servicing for the first two years  By offering free insurance for the initial buyers.  By making paperwork involved hassle-free  Datsun offers 2-years unlimited mileage warranty- offered on the Go is best-in-class. Trade Promotion-  By announcing some competition internally for the trade channels Sales-force Promotion-  By giving better commission to the sales-force involved when purchase is made by the consumer.
The car is targeted at the rising middle class of India and it is important for us to create awareness. We will expose Datsun Go through a large-scale ground marketing activity as discussed… We are in the Marketing War Battle Field and confident our operation “Go Datsun Go” will be an phenomenal success Steering team- Neelutpal Saha Tarun Kumar Chandrakant Rai S.Ashwath Venkatesh
Thank You !

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Marketing, Pricing and Distribution of Datsun Go

  • 2. • The Datsun brand dates back to the earliest days of Japanese car building. Datsun evolved to become an automaker recognized as Durable, Attractive and Trustworthy. More than 20 million Datsun vehicles were sold in 190 countries during its more than 50-year run. A brand supported and loved by many worldwide, this is the spirit the new Datsun brings to young risers. • The heritage and guiding principles are reflected in the badge of the Risers. Honoring the spirit of an earlier Datsun, the center portion retains the essence of the original logo. Surrounded by a hexagon inspired by shiny bolts, the rest of the badge conveys a modern robustness and the confidence to succeed in a new world. HISTORY OF DATSUN
  • 5. POLITICAL ENVIRONMENT • Indian Government has changed its role from controller to facilitator. • In 2002, Indian government formulated an auto policy which encouraged foreign equity investment up to 100%. • The liberalization steps have played an equally important role in bringing the Indian Automotive industry to great heights. • Institutionalization of automobile finance has further paved the way to sustain a long-term high growth for the industry.
  • 6. ECONOMIC ENVIRONMENT • Rising GDP consecutively for the last 5 years. • Per capita Income is rising , which is affecting the segments of automobiles being ventured into. • There is cut Throat competition among many players in market. • Increasing urbanization of rural India also has given rise to increase in sales. • concept of service in auto industry has changed into customer care now.
  • 7. SOCIAL ENVIRONMENT The demand of cars has been fueled by following factors :- • - Indian families are becoming increasingly nuclear • - Increasing Propensity to spend • - Increasing distances between work-place and residence • - Increase in percentage of working women has increased number of earning members in a family.
  • 8. TECHNOLOGY ENVIRONMENT • Alternate Fuel: increasing use of CNG and LPG instead of conventional fuel. • Advent of Internet: The customer can now use the Internet to place the order and expect the manufacturer to fulfill his customized demand in the minimum time. • Electric Car: With technological advancements electrical car may emerge as a preferred option .
  • 9. Page 9 STRENGTHS  The Datsun Go might be an all new car but it shares a lot of its underpinnings from established products from the Nissan's stable.  Dominated by the Marutis and Hyundai, especially in the budget segments, Nissan has endowed the Go with a 2 year-unlimited mileage warranty that is best-in-class.  To make the choice wider and provide an opportunity for customers to personalize their cars, Datsun will offer a wide variety of accessories  Datsun Go is produced locally in Chennai and Govt provides monetary assistance for manufacturing units. OPPORTUNITIES  Reduction in Excise duty  Rural demand is rising  Income level is at a constant increase. WEAKNESSES  Infrastructural setbacks  No stronghold yet for Nissan like India as compared to other brands  Too many taxes levied by government increase the cost of production  Low investments in Research and Development  Datsun in itself an unknown entity in the Indian Automobile industry THREATS  Increasing rates of interest  Too much competition  Rising cost of raw materials. S OW T Positive Negative Internal External
  • 10.  Three cylinder, 796cc engine  maximum power of 47bhp@6,000rpm  maximum torque of 7kgm@3,500rpm.  Dimensions as 3395X1490 mm and a 2360mm wheelbase  Mileage - 21.1kmpl  Boot space - 210ltrs  Three-cylinder, 814cc engine  maximum power - 55bhp@5,500rpm  maximum torque - 7.6kgm@ 4,000rpm.  Dimensions as 3,495X1,550mm and a 2,380mm wheelbase  Mileage - 20.2kmpl  Boot space –215 ltrs  Three-cylinder, 1198cc engine  Maximum power of 67bhp@ 5,000rpm  Maximum torque - 10kgm@4,000rpm  Dimensions as 3,785X1,635mm and a 2,450mm wheelbase  Mileage – 20.6kmpl  Boot space - 265ltrs PERFECT COMPETITION ALTO-800 EON-SPORTS DATSUN GO
  • 12. TARGET AUDIENCE Indian Middle Class Lower income and middle income buyers (People looking for value for money) First Time Buyers Generation Y! (age group:20-30)
  • 13. What should be the selling price? Datsun which is a new entity in the Indian Automobile Industry is keeping its price far less than the average selling price of vehicles in India. They are definitely priced right in the segment of hatchbacks in India. Hatchback Sales For Month of February 2014 Brand Price Volume Value Alto 245917 24623 6055214291 Swift 458181 19099 8750798919 Wagon R 360895 12674 4573983230 i10 grand 525743 10576 5560257968 Celerio 390000 7323 2855970000 Eon 283377 7312 2072052624 i20 481094 4292 2064855448 i10 375792 4041 1518575472 Santro 365958 4002 1464563916 Indica+vista 467440 3781 1767390640 Total 97723 36683662508 Average Selling price 3,75,384
  • 14. Markup Pricing Strategy: Cost Plus Unit Cost of a car = (Fixed Cost + Variable Cost)/Sales • Here fixed cost includes raw material, manufacturing cost, etc. • Whereas variable cost will include distribution cost, cost of sales. • Calculate a target ROI feasible to sustain in the industry • Markup Price = Unit Cost/(1-ROI) Suppose the Unit Cost of the car is Rs 2,50,000 and the ROI is 20% • Therefore , – Markup Price = 2,50,000/(1-0.2) = 2,50,000/0.8 = 3, 12, 500
  • 15. Datsun Go to be launched within a price range of 3-4 Lakhs • Datsun Go is likely to commence its Indian innings with three trim levels (D, A and T). The entry level variant, with a price tag of INR 3 lakhs, will be sold alongside the a middle-variant, priced around INR 3.5 lakh, and a top-end variant with a price tag of INR 3.8 lakhs • They want to build an image for this new entrant in Indian Automobile industry • They are very aggressive and will keep price less than the competition • They are manufacturing the cars at Chennai Plant so cost of production is low. • They want to pull in more volume even at less margins • They want to fill up the gap that was existing in the market • They want to provide their entire range of cars within the range of consumers
  • 16. Distribution Strategy of Datsun Go Under
  • 18. Drivers behind distribution process• The decline in profits on new cars has forced dealers to make up the shortfall by looking at what many have historically considered "filler" businesses: parts and service, used cars, financing and insurance, and fleets. The problem is that a conventional dealership is not necessarily positioned well to conduct all of these businesses because of their different economics, bases of competition and consumer purchasing patterns.
  • 19. Types of Channel in Automobile Industry • General distributors are large nationwide distributing firms operating with logistics and warehouse capabilities. As stockholding resellers they receive imported goods from suppliers, stock them and distribute them. • Management of sub-tier distributors is quite diverse. A common practice imposes annual sales targets on them to ensure minimum sales through each tier-1 or city dealer. These dealers typically receive bonuses of 1-2% for meeting their targets. They are further divided in two parts: • Tier-1 dealers who operate on a state level, meaning they cover one to a few states. They are the “go-to” choice for most general distributors and are easily available in most regions • City dealers are the second type of sub-tier dealers in this market. City dealers are less focused than their larger counterparts and try to sell a large variety of products to cities within their footprint. This category typically includes stockholding resellers and those without stock as well as agents working on behalf of upper-tier distributors.
  • 20. Features of the channels
  • 21. Present Distribution System of Nissan Chennai Central India Hover Mumbai New Delhi Kolkata
  • 22. Nissan Showrooms • Currently Nissan has in total 141 either purely sales or sales plus Service centres spread all over India
  • 23. Distribution Channels suggested by us NissanChannel 1 same as earlier diagram
  • 24. Description of the Channels• Channel I represents the manufacturers' exclusive sales organization • Channel III refers to independent dealers. Recently the third channel has been substantially growing in the Indian Auto superstores and networks of distributors have mushroomed • With the emergence of the Web a new channel has been established. Auto manufacturers are setting up virtual showrooms and exclusive dealers are using the Web to offer information and new services.
  • 26. Advertising-  Display at major Corporate hubs (ex DLF Cyber City), Malls, window displays  Billboards near highways, major streets catering to lot of traffic, bus stands  Digital Marketing campaigns targeted at the youth  Press Advertising and Television Ads  TBWA Worldwide will lead all the communications for the return of Nissan's Datsun brand that will be launched in India, Indonesia and Russia in 2014.  Open up new showrooms at prime locations TBWA is an Advertising agency. It was founded in 1970 in Paris, France, as a merger between Tragos American Management, Bonnange French Marketing, Wiesendanger Swiss Creation, and Ajroldi Italian Client Services Public Relations-  By collecting and highlighting testimonials of buyers  By co-sponsoring events like IPL 2014  By choosing a brand ambassador who match the people’s perception of young and dynamic, ex Shikhar Dhawan  By announcing Consumer contest like making a slogan for the car
  • 27. Sales Promotion-  By offering good discounts (limited/tempting price offers) on pre-bookings on first come first serve basis  Exchange offer with old cars  By tie-up with banks for providing loans on lesser EMIs  By offering free servicing for the first two years  By offering free insurance for the initial buyers.  By making paperwork involved hassle-free  Datsun offers 2-years unlimited mileage warranty- offered on the Go is best-in-class. Trade Promotion-  By announcing some competition internally for the trade channels Sales-force Promotion-  By giving better commission to the sales-force involved when purchase is made by the consumer.
  • 28. The car is targeted at the rising middle class of India and it is important for us to create awareness. We will expose Datsun Go through a large-scale ground marketing activity as discussed… We are in the Marketing War Battle Field and confident our operation “Go Datsun Go” will be an phenomenal success Steering team- Neelutpal Saha Tarun Kumar Chandrakant Rai S.Ashwath Venkatesh