Marketing Strategy of TVs Motors

Marketing Strategy of TVs ridesTVS labor keep follow is Indias third largest manufacturer and community had made conquest in their shoemakers last ten familys. TVS achieved legion(predicate) awards for their quality of wargons, customer satisfaction and for their engine room. This paper analyzing the establishments respective(a) strategies models as sound as describes the fiscal statement analysis for last five year. Analyzed how the fraternity reached the current position and described the recomm destroyations for TVS go Company.IntroductionAn organizational study is conducted to have a clear and proper understanding of the organizations basic structure, coordination and functioning at all(prenominal) levels. Every organization involves in identifying and coordinating the work that being performed and delegates authority and responsibilities. Organizations ar always looked as a social entity directing towards designated goals that are designed as coordinated activ ity and structured deliberately linking to external environment. In a country like India which has seen an industrial revolution in last couple of decades, bringing large international corporate and industries to the country any organization would require fortified organizational functioning to compete with other industries in the market paving way to success and preferences to the organization. My organization study involves research on dissimilar departments to understand their functions within and their purposes. I have withal assay to bring out the achievements of the organization so far and how it competes with its competitors. It was also main(prenominal) for me to study how they progress towards their mission and vision of the organization. Before doing a study on any organization it was important to have compassion on the concepts, principles and requisites of the organizations.Concepts of an organizationEvery organization involves in a process of identifying and grou ping the work that has to be done. It defines and delegates the authority and responsibility to every individual or sphere. It establishes strong relationship with its employees to accomplish its objectives and performing work efficiently.PrinciplesPrinciples are tailored on theoretical cornerstone on which the strategies of the organization is built or framed. in that respect are several fundamental principles there are to be followed in developing an organization strong and efficiently. Some of them areUnity of objectiveUnity of commandSpecificationSpan of controlCo-ordinationExceptionFlexibilityCommunicationSimplicityEfficiencyREQUSITIESThe objectives of the organization are to be candid and clear and the organizations understanding their capacity in achieving them.All activities within the organization are implemented efficiently and easily.Proper coordination on all activities that being executed.Communication system inside the organization should be direct and effective.Shou ld be complete with all essential activities being put into action.There should be reasonable span of control at all levelsWherever required, provision is to be available for expansionDefined procedures are to be followed on all functions of the organizationOrganization should always aim at promoting morality of its employeesProper diversion on authority and responsibility is requiredBusiness schemeTVS motors which originates from Trichur Vengaram Sundaram Iyengar motors is one among the leading cycle company in India .it is the third largest two-wheeler manufacturer company in India and among the top ten in the world. It holds annual revenue of much than than $ 1 billion .Its a flagship company with TVS group USA with 4$ billion. It strives and thrives in manufacturing innovative and pioneer products. TVS emphasizes on tack togethering saucily products with its refreshing product introduction (NPI) aggroup of approximately 300 engineers who stand at forefront in executing s trategic visions for the organization for its new products. Though these products are positive domestically it collaborates with globally technical ren accepted partners. It aims to introduce six to ten products every year to address broad-based requirements of the market.Bike for AnyoneTVS travels aims at introducing wide range products thats suits the require of all two wheeler riders. It holds products from mopeds to racing motorcycles. The prices of these motorcycles are also affordable and reasonable to suit financial status of middle and upper middle build bulk in India. It was also the first motorcycle company in India to launch mopeds that were easily affordable to labor and wager groups of India.Penchant for QualityTVS Motor has established four manufacturing plants located at Mysore, Hosur, Himachal Pradesh and one in Indonesia. The company is more consistent on its quality of its products so far. The vehicles were long lasting and reliable. pattern at the HelmStreng th of the organization lies in its design and development of its new products, the company launched seven products on the same day in 1997, qualification it all the first automotive company to do so. They aim at developing superior customer satisfaction. TVS presents quality vehicles to meet ever changing subscribe to of its customer and market, the company already holds 15 million customers on road.HistoryThe company was founded by Trichur Vengaram Sundarm Iyangar. He initially started on transport business retentiveness large fleet of buses, trucks under the urinate of southern roadways limited. later on the company spread its wings on motorcar sector, including insurance, finance, two wheelers manufacturing components, and tires. It is combined with 33 companies of its own to bring a turn all everyplace of nearly 3 billion USD. On 1978 the company started plant at Hosur to manufacture mopeds as a new division. Later the company collaborated with Suzuki on 1982 on a joint v enture to obtain speck impression on its customers.Major Milestone social class by Year1978 TVS Motors was started as a new division of TVS.1982 Incorporated as Indians motors. It collaborated with Suzuki motors.1984 59,400,000 divisions were issued on which 7, 00,000 overlaps Sundaram Clayton ltd, Chennai.70,000 Anusha investments20, 00,000-Suzuki motors2, 20,000 -Employees and business associates29, 70,000- public1985 incorporated Lakshmi Auto Company6 for Manufacturing infections and critical engine parts.1986 company name was changed from Indo Suzuki motors to TVS Suzuki motors1990 launched 34cc Miniped1997 set up auto ancillary estate at Mysore and Hosur1998 RS 1,000 crore mark in 1997-1988 introduced first four stroke vehicle in the country2003 save share of 35% of share in motorcycle division, Recorded 31% developing on its gross revenue. Company introduced racing bikes that were tested in Asian circuits.2006 positive new president2007 launched 7 motorcycles on the s ame day making a mark in history2010 Launched Indias first auto clutch motorcycle in Chandigarh.TVS Michael porters competitive force modelThe strategy is create by Michael porter which describes the external factors affecting the organization. The TVS analysis is as followsSupplier PowerAlthough TVS has been a prominent supplier for economic class customers in two wheelers market, here we take the authority of the suppliers for TVS to analyze. The Supplier market for TVS is tallly fragmented and the possibility for reverse integration is also naughty which has restrained the power of the suppliers. TVS engages with several local suppliers for their spares and parts for their automobiles manufacturing. The entry of many new small scale manufacturers has also contributed to the eudaimonia of large automobile manufacturers like TVS to source their Spares and parts at a very optimal price. This clearly indicates the low supplier power.Buyer PowerBuyers power in two wheelers fa brication is more as the product diversity and brands available in the market are exceptionally high. Buyers directly are demanding and precise on their needs for the money they pay. They are looking for the brand that offers better pricing and technology which has shadowed the customer loyalty for any brand today which is the most expressiond threat by TVS.Threat of SubstitutesThreat from substitutes is quite low when compared to other forces since market seems only to grow and mature every day. scarce when looked bolt down the line we could anticipate a threat from the dramatically escalating petrol cost which might cause customers to switch to economic diesel cars. As sound maturement environmental concerns has also brought in bicycles and battery two wheelers that might pose a threat in future to TVS.Intensity of Rivalry ii wheelers industry is most known for the competitive market and rivalry. Two wheeler brands like Bajaj, Honda and Yamaha have come up with variant pr oduct line and technology targeting the customer segment of age group 20 to 30 years who are more fascinated to sporty two wheelers. But TVS has very less(prenominal) sporty models available for customers to choose that has restrained power of the brand over the most targeted customer segment by its competitors. Although TVS has a better power over the mid aged economic class customer segment, competitors now are increasing their focus on taking over it too.Barriers to New EntrantsNew entrants face a moderate barrier in penetrating the market since it is consolidated by few and strong suppliers. As the market size of the two wheelers industry is big and requires a strong footprint with high capital investment, new entrants find it difficult to fit themselves among the market front-runners. Thus TVS is not susceptible to threats from the new entrants to the industry.TVS Motors market shareThe market share of all Two-wheeler is affected by various inflation, rise in petrol price and i nterest rate. Automobile industry had unexpected growth around 15% is due(p) supported by various external factor like urban development, developed public transportation, financial purchases and Two-wheeler penetration into various region. Hero Honda dominated in the market by 55% (2011-2012) in last five quarters.Market Share with competitors April Feb. 2011Source TVS Motor CompanyFinancial performanceDetails/Year2011-122010-1120090102008-092007-08Sales other income*71486324448537413310 clear before interest, depreciation, amortization and tax*520491304247219Profit before tax316248763135Profit after tax249195883132Net fixed assets107899598310361043Share capital4848242424Reserves and surplus1122952842786798Net worth1170999835735769Total borrowings*8317681003906666Earnings per share (Rs.)5.244.101.860.660.67Dividend per share (Rs.)1.301.101.200.700.70Book value per share (Rs.)24.3820.8117.4015.3216.02EBITDA/turnover (%)7.37.46.86.66.6Profit before tax/turnover (%)4.43.91.70.81.1Re turn on capital employed (%)1916.48.05.62.8Return on net worth (%)23.021.311.24.14.1Source TVS Motor CompanyThe company achieved the annual sales of two million as growth of 32% by selling 1.52 million units last year. The company made their growth in all three segment as Executive as 26%, Economy as 12% and Premium as 38% for the year of 2011. When compared with 2010, there is incrementd in sale of fixed asset in 2011. On 2011 fiscal year TVS Motors acquires assets increasing the liquidatory assets to 1.70 crores. Due to increase in RD expenses hang in sales and investment in manufacturing sector increased the companys liabilities to 950.49 crores. Companys capital expenditure was 91.63 crores in year 2011. In the year 2011 current ratio stands at 0.17 while the debt ratio is at 0.98%. The cash ratio is 1.4 times than old as the number proves that the companys stable but if the ratios are not improved over years the companys long time sustainability will be at jeopardy.Operatio nal analysisSWOT AnalysisStrengthsTVS is an International player with brand equity and plays important occasion in Indian two wheeler markets.RD department team gives them a leading edge in markets technology development finishing various segments like moped, motor cycle and icebreaker. These differences make the products attractive for people of all ages.TVS has a wide spread of distribution network and numerous service centers covering all regions of its service areas which provide a unique service to its customers.TVS groups have 40,000 knowledgeable, experienced and skilled employees providing service to more than 15 million customers in India. denote with brand ambassadors and attracting people with more promotional activities.Products with low price, high fuel economy, eco friendly less emission and unique design with its competitors.WeaknessesDespite exporting products to various countries worldwide, its not a globally recognizable brand yet.Lack of competitive tribute bi kes to attract the riders in the market. Most of the RD resources used in economy and executive products shading the premium segment.OpportunitiesOne of the fastest growing automobile providers in India.Export is limited and the international market is untouched which gives a versatile probability to explore and establish international market.More movement in higher-end model and more young generation are motivated towards motorcycle.ThreatsHeavy competition from other competitors and from other international brand i.e. importing of cheap motorcycle from china.Gradual increase in fuel price, Decrease in car prices, policies and increase in taxes will affect margin for dealer as well as customer.Improving public transport will have an effect on the automobile sales.Spare parts are expensive which increases the maintenance cost.TOWS hyaloplasm AnalysisSWOT and TOWS are acronyms to each other, where as strength and weaknesses comes under internal environment. Opportunities and threat s are comes under the external environment. But for practical study, TOWS describes internal environment and SWOT describes external environment.StrengthTVS is International player with brand equity and plays important role in Indian two wheeler markets.Excellent RD work of products and different products in various segments like moped, motor cycle and scooter. These differences make attraction to people from different age.TVS had wide spread distribution network and numerous service centers which make easy for people.TVS groups have more than 15 million customers and knowledgeable, experienced, skilled 40,000 employees. advertising with brand ambassadors and attracting people with more promotional activities.Products with low price, fuel economy, less emission and excellent design when compared to other company.Weaknesses horizontal though exporting to various countries, it is not globally recognizable brand.Fail to cover premium segment bikes and their segments are only for middle class customers.OpportunitiesOne of the fastest growing segments in India is automobile segment.Export is limited and untouched international market.More movement in higher-end model and more young generation are motivated towards motorcycle.SOTVS had unbeatable sales in moped and scooter. (S1O1)They had 3500 dealer for making sales and giving excellent service to customers.TVS maintains its brand image by designing products for all customers from low income to high income people. (S4O3)Employed more engineers in RD to bring their designing performance and development in all categories.TVS has ratio in debt equity is 0.1.WOEven though it is not globally recognized, TVS made an excellent land mark in India. (W1O2)TVS need more concentration in premium vehicles because sales of premium vehicles are growing in recent years. (W2O3)Market share is reducing when compared to last few years.ThreatsHeavy competition from other competitors and from other international brand i.e. importing of cheap motorcycle from china.Gradual increase in fuel price, policies and increase in taxes will affect margin for dealer as well as customer.Improving public transport will have an effect on the automobile sales.Spare parts are costlier.STAutomobile is one of the growing sectors in the world, so it is golden opportunity to come forward in global market. (S1T1)TVS need more concentration in RD to improve the use of individual(prenominal) transportation. (S2T3)WTTVS has other competitors in two wheeler segment, which is the main drawback for them.Cost of spare parts and their products are high when compared to other company. (W2T4)TVS BCG Growth Share MatrixThe BCG Growth-Share Matrix is a planning model in which business is divided into four major based on market growth and market share. The growth share in this table positions the two major things of profitability.Star(Scooter)Question mark(New motorcycle and new scooter)Cash cow(Moped)Dog(Motorcycles)StarStar denotes high market growth and high market share in the industry. This position defends when the organization invest large amount in this segment. There is fall down in the growth when compared to last year, so this is the reason scooter comes under star category. It will turn into cash cow when there is gradual increase in coming years.Cash cowCash cow denotes low market growth and high market share in the industry. In moped sector it is the major contribution to the market share because moped have more advantages like low cost when compared to other moped manufacturing company. Handling is very naive and this is more preferred by small traders. Teenagers are using this vehicle as an entry point for them. This dominates in the position of cash cow because increase in the growth of sales in every year.Question markQuestion mark denotes high market growth and low market share. In this category, there are two things to be considered as invest greatly in the products or to clear up this products. The co mpany launches new TVS Flame which gets more drawbacks in the market and the company planned to launch the product with redesign. Company had greater growth in the scooter segment, so they launched electric scooter due to increase in the fuel price. But the product is failed due to some motor problems. So company need to invest in them for increase in market growth, this is the reason that these products comes under the question mark.DogDog denotes low market growth as well as low market share in the industry. In this segment, the motorcycle is divided into three categories as economy segment which had increase in 2% when compared to last year. In executive segment, decrease in 1% when compared to last year. But in premium segment, there is no increment or decrement when compared to last year. Market share came down when compared to last year, so this is the main reason that motorcycle comes under the category of dog.Marketing, Financial and RD StrategiesMarketing strategyThe compan y volume growth increased generally from the year of 2010-2011, but the company does not have similar growth in last year of 2011-2012. The company had huge demand in moped, scooter and only in premium motor cycle so these are volume break drivers in TVS motor company. The company is planning to build key model brand, so company had planned to have sustain success in their products like Star, Victor and Apache. These products had made brand image to maintain its success and these success made the company to introduce the new products in the market. These are key volume drivers and their focus to sustain their growth of the company.TVS motors have intractable to launch seven new vehicles at a time in the year of 2007, so this will make the company as a young multinational company. This makes work for continues three years to rollout all these seven products at a time. Within these seven vehicles, four of them are two-wheelers and three are passenger three-wheeler vehicles. These p roducts are various technologies, design and new engine. TVS introduced CCVTi engine which reduce carbon-dioxide and reduce the monoxide by 70% which make green revolution and also introducing Fuel injection technology which consumes less fuel. TVS motors first introduce the electric scooter due to increase in fuel price in India. These are marketing strategies to cover mood of people.TVS continuous improvement in quality of products resulted in winning various quality awards which brings more value for the customers. TVS offers 5-year warranty for Star vehicles, which gives customers more preference. These customer satisfaction and quality are the one of major role for marketing strategy. TVS dealers are using their own individual promotion plans to the final debaseers. The company advertises to the customers to provide offers to buy products where dealers provide with sale promotion to the product now. The company offering more promotional plan such as exchange offer, finance co nveniences to the customers, unloosen services, follow-up customer for their services and complaints and other festival offers. These are various marketing strategy promotions to customers for buying the products and giving excellent service to their products to have free burning growth in market place.Financial strategyTVS records the sale of 154,647 unit in appalling 2012 and 194,898 units in August 2011, whereas for Two-wheeler sales records 150,740 units in August 2012 and 190,184 units of sales in August 2011. In domestic sector, TVS records about 135,513 units in August 2012 against 163,705 units in August 2011. In motorcycle sector, TVS records 53,673 units in August 2012 against 77,726 units in August 2011. In scooter segment, records 38,193 units in August 2012 against 52,253 units in August 2011. From this analysis, there is gradual decrease in the sales of all sectors including moped, motorcycle and scooters. Company exports 17,934 units in August 2012 against 29,984 un its in August 2011. In Three-wheelers, company sold 4,714 units in August 2011 but it decreased to 3,907 units in August 2012. From the fundamental, the company fails to compete with the previous year of same month.Research and development (RD)The company has a strong research and development (RD) department, supported with state of the art aiding technologies. Their in-house world class scrutiny facility gives them a unique environment for testing the engines noise, vibration and harshness (NVH) and life time warranty testing. To they are supported with modern computers for developing impregnable design as well as for developing new innovation in the products. The team has been concentrating on eco-friendly products for a decade helping the fact of global climatic changes and increases of carbon dioxide release into the environment. They succeeded by out coming with a high fuel economy, reusable parts and low emissions hybrid products. Their automatic transmission technology for scooters is widely credited crosswise the world due their very low emission and fuel economy. TVS RD department published 81 papers placing and they developed various products with this research and they are successfully running in the road. For national and international conferences, RD published around 81 technical papers.Joint venture and repute chainTVS has joint venture with Japaneses company Suzuki with whom it shares their technology, design and manufacture for two-wheeler under the banner TVS-Suzuki. TVS-Suzuki manufactured various products including Samurai, Shogun and Fiero. Due to the rising disputes and low profit margins TVS decided to break their collaboration with Suzuki. In 2011, companies came to an agreement, as per the company was renamed as TVS Motors and Suzuki promised not to enter Indian market for minimum period of 30 months. This decision by TVS motors allowed them to operate independently and proves to be effective as their profit increased noticeably. TV S Motors invested heavily in RD to launch new products with new technology and succeeded making TVS a highly recognized brand. After three years Suzuki entered Indian market and became one of the top five Two-wheeler Company in India.The value chain for the Two-wheeler company has many value chain partners including manufacturing, dealers (outlets include sales and service), financial agents, support services, advertising, contracts, transportation and more. The value chain for TVS Motors will act like one team and they aim for success. The company has appraisal agencies, call centre, collection agencies and dealer management system to get daily updates from dealers and maintain a global communication across their value chain partners. TVS has plans to implement Information Technology across the value chains, to reduce the delays and lags in communication between the value chain dealers. This IT adoption to the company will significantly increase the customer satisfaction, timely se rvice and a well structured management.Business performanceThe overall Two-wheeler sales is decreased to 5% due to absences of executive segment motorcycle, whereas scooter and moped segment increased by 10% in their sales growth. The company achieved all time high sales in export of 2.70 lakh in 2011-2012. Three-wheeler sales also increased slightly from 0.39 lakh to 0.40 lakh in 2011-2012. Spare parts also increased to 29% sales. TVS Wego had a huge growth of 60% in the scooter segment.These vehicles are distributed around 3500 dealer in India they are authorized for some(prenominal) sales and services. TVS is continuously seeking for opening new dealerships to increase the growth of sales. The export sales are grown 51% where as domestic sales decline by 35% in the Three-wheeler market. There is large number of competitors in exporting, so company takes advantages of providing quality products as well as providing new market line for domestic market. For reducing the material co st and input material cost, company is using value engineering and global sourcing projects. TVS is using total quality management (TQM) as a cornerstone from 1987. So that company created manually called TVS Way and won award for national and state level competition.Recommendations and ImplementationsReferencesTVS Motor Company. From http//www.tvsmotor.in/tvsbrief.aspTVS Motor Company. From http//www.tvsmotor.in/tvs-rd.aspTVS Motor Company. From http//www.tvsmotor.in/global.aspTVS Motor Company. From http//www.tvsmotor.in/investor.aspTVS Motor Company. Annual Report. From http//www.tvsmotor.in/pdf/19th-Annual-Report-2010-2011.pdfTVS Motor Company. From http//www.tvsmotor.in/investor-news-home.aspIndian Infoline. TVS Motor Company Ltd. From http//www.indiainfoline.com/Markets/Company/Background/Company-Profile/TVS-Motor-Company-Ltd/532343Business Line. TVS Motor seeks early end to licence pact with Suzuki. From http//www.thehindubusinessline.in/2001/12/29/stories/022907za.htm The Financial Express. TVS reaps Business Benefits through SAP. From http//www.financialexpress.com/news/tvs-reaps-business-benefits-through-sap/60168/2Live Mint. TVS Motor changes financing strategy. From http//www.livemint.com/Money/uW1yXkCG0HsTBLIjI5rHKL/TVS-Motor-changes-financing-strategy.htmlMoney Control. TVS Motor Company. From http//www.moneycontrol.com/company-facts/tvsmotorcompany/history/TVSTVSIndian Two-Wheeler Industry. From http//www.icra.in/Files/ticker/Indian%202W%20Industry,%20Update,%20Feb%202012.pdf (Retrieved on Feb 2012)