car marketing in european market

MARKET STRATEGY

Energizer Motors Inc. is committed to delivering value to customers. The uniqueness of the value to the customers is differentiated with the extent of “Trust” that is built up right from the beginning and continues for the forthcoming decades as a treasure to both the organization and the customers.

Segmentation, Targeting and Market Positioning of Energizer Motors Inc.

Segmentation:

Usually, families seeking a car in Europe look for carrying capacity, fuel economy, safety features and accessibility. Young singles look for a car that is affordable, stylish, maneuverable and low in service costs.

Energizer motors inc. has strategically captured various market segments in order to cover the diversified European car market right from its inception, starting with city model and coming up with different variants.

Targeting:

Energizer motors inc. has targeted variety of customers ranging from 18 to 55 years of age with a whole lot of ranges incorporating city model, (Extrum) , a medium sized sedan, (Astron VT), Large car (Sports utility vehicle), Xcore and premium segment car incorporating all the luxury add ons XPremium and Xtasy.

In the European market, Russia offers the biggest growth potential for the luxury-car segment worldwide. Russia is poised to surpass Germany as Europe’s largest auto market by 2014, with sales rising to 3.4 million vehicles, according to the Russian Industry Ministry as more buyers choose upscale cars.

Positioning:

After establishing its position as a key car producer in European car market in City and Medium car segment, Energizer motors Inc. has further positioned itself as a brand synonymous with style, comfort and high-tech, foraying into large car segment. It has further entered into the niche market of Premium luxury car since 2010 and increased the market share from 1.2 to 4.5% in the forthcoming years.

Energizer Motors Inc.

With the rising costs of fuel, Energizer Motors has opted for the differentiated market strategy that enables it a positive edge over its competitors, thereby developing the most efficient fuel engines that attract the customers in the city and medium sized cars.

Growth philosophy at Energizer Motors Inc.

Putting the Customer First, to Make Better Cars:

EM Inc believes an attractive and appealing car is a car that is a joy to own, drive, and share good times in. It is exciting and fun for everyone on board.

For Energizer Motors to establish this solid foundation, it is important not only to strengthen technological development and productivity, but also to focus intently on the customer first. It has determined for making better cars through product-oriented management strengthened by market-oriented management.

Customer feedback is the key driver in all stages of EM’s value chain.


It is our emphasis on the customer First that will make it possible for us to create even more attractive and appealing cars.

KEY COMPETITIVE SCENARIO

The European Car market is very aggressive both in terms of quality deliverance and cost competitiveness.

Energizer Motors Inc., with its customer focused strategy has been able to continuously increase its market share in European car markets; however, it has been facing tough competition from its gigantic competitors X, Y and Z. The overall market share of Company X, Y and Z is 20%, 11% and 4.5%, whereas EM’s share is 5.5%.

In order to increase the market share, Energizer Motors has heavily invested in the Research and Development primarily focusing on

Lighter vehicle resulting in increased fuel efficiency. Lower emissions to control the Carbon emission Safer and comfortable driving Hi-tech Systems Improved body build of the car Stylish car with value for money. Improved customer service after sales

For the last 6 years, the market share of Energizer Motors has been increasing YoY showing the trust of the customers and willingness to own Energizers Motors products.

The rising costs of the basic raw materials and increased pressure of the suppliers for larger volumes favors the competitors due to their higher volumes, thereby pushing Energizers Motors under pricing pressure.

Energizer Motors inc. has come up with the pool of local suppliers in order to ensure quality supplies at highly competitive prices and continue its operations with improved performance and delivery. Also, with the differentiation strategy, Energizers Motors has further gained positive edge against its competitors by improved

Employee wages (620 Pounds/week against Average 550 pounds/week)


This has increased the employee retention thereby improving the employee value proposition (EVP) and hence the productivity. Also, the probability of strike is negated which further improves the overall performance of the Plants.

Training and development:

The employees have been sufficiently trained for the use of improved automation and incorporating new technologies and developments with a view to produce highly reliable cars, thereby reducing warranty and other claims.

Additional production- New factory with experienced manpower

With a view to create higher demand of the medium sized and premium cars, Energizer Motors Inc. has planned to open new factory with the existing experienced manpower and blend of the new recruits. This will provide opportunities to the existing employees to grow in the organization and will help in creating new jobs.


PRODUCT PROMOTION STRATEGY

Online and Social Media

Social Media and Online marketing is where the future lays for many large companies. Often seen as the best way to track and assess return-on-investment, online campaigns have grown year-over-year and have become the center of marketing budgets.

Over a third of EM’s impressions served over the past year were rich media display placements. EM’s online TV website moved its content under a new YouTube channel as well, branded as EM TV. Most of the videos ran under EM TV have also been featured on other channels as well, and they range from driving and racing footage, to product presentations and even EM enthusiasts segments. Our facebook fan page crossed 2.5 million likes last year.

Mobile

Ever since the iPhone/iPad has set a new standard in mobile and Smartphone devices, the mobile market has grown to impressive levels year-after-year. Mobile applications have become the driving factor behind phone sales and with hundreds of thousands of applications developed specifically for the iPhone and android, a new can of worms has opened: mobile advertising.

Seen as a direct connection to the customer, EM have developed specific applications for Apple products and recently, Android platform. These applications vary from video content, news, brand experiences and online magazines. The “Expression of Enthusiasm” app was one of the first EM apps to make it onto the iPhone platform and featured a 360 degree view of the New Xtasy performing a painting exercise in motion. EM is also developing an online racing game for android phones.

Magazine

Print magazines, while not as important as ten years ago, remain popular in marketing campaign. To promote the cars EM launched a series of spreads in January issues of


Conde Nast titles such as Bon Appétit, GQ, Vanity Fair, W and Wired.EM’s print focus has been centered around its Sport scar Experience Driving School.

Sponsorships

EURO Cup 2016 UEFA Champions League Youth Campaigns in European Colleges and universities


MARKET SEGMENTATION

Currently, EM is operating with a strong presence in all the segments i.e. CITY, MEDIUM, LARGE & LUXURY. Company is having a reasonable market share in these segments.

The Company is planning to expand by increasing its production volume in all segments. Along with this the company is coming with another model in luxury segment with SUV concept. The decision of coming up with a new model in the Luxury segment is backed by the over whelming response and market acceptance of the earlier Luxury car as well as overall market trend towards SUV.

The higher growth expectation in luxury segment along with higher profitability in this segment is also backing the decision of the company to launch a new car in this segment. The Company was able to sell its entire production in this segment. EM’s product quality in this segment is well established and has created significant demand for EM products in the market.

Market share at the end of sixth year:-

Segment City Medium Large Luxury

Market share 1.22 1.83 1.35 1.68

Expected Market Share: Projections for five years:-

Market Segment Year 01 Year 02 Year 03 Year 04 Year 05

City 1.67% 1.93% 2.18% 2.33% 2.68%

Medium 1.92% 2.12% 2.17% 2.25% 2.55%

Large 1.58% 1.93% 2.27% 2.63% 3.30%

Luxury 1.77% 2.39% 2.62% 3.15% 4.42%

STRATEGY


BUSINESS STRATEGY

We continue to focus on Medium & Luxury car segment, while offering products in most segments of the European passenger car market. We aim to achieve our principal objectives by pursuing the following business strategies:

Growth and enhance product range:

We intend to utilize EM’s expertise in small car technology to produce new variants of our existing models and to upgrade our products with contemporary technology and features.

Increase reach and penetration:

We plan to continue to utilize our extensive sales and service network to increase the reach, in terms of geographical spread by penetrating into new markets and increase sales volume of our products across the European Market.

Making arrangements for financing options:

We continue to seek opportunities to expand the size of the European car market by providing third party financing options. In this regard, we have recently entered into an agreement with Komercijalna Bank.

Continue to offer superior products at competitive product value:

Cost competitiveness will be our central strategy to expand the size of the market by offering competitively priced and high quality products.

The components of this strategy are:

Higher levels of localization Vendor participation in cost optimization Establishing new safety and product reliability standards Achieve further cost reduction through higher productivity Continuous improvement in product quality Customized options in luxury segments


Lower cost of ownership:

Through our business strategies, we seek to reduce the consumer’s cost of ownership of our cars, which comprises of the cost of purchase, higher fuel efficiency and low maintenance cost (special 3 year warranty period) including spare parts and repairs, during the life of the vehicle, insurance and resale value.

Green Initiatives

To strengthen our competitiveness in the European car industry, a recycling and reutilization project has been undertaken to ensure the channeling of large portion of production waste back into the process cycle

Define vehicle pollutant emissions, based on a thorough analysis, with the aim of delivering a timely reduction of CO2 emissions below 75g/km by 2015 as per European norms, hence, contributing to improved air quality.

Invest in developing fuel efficient and alternative/renewable fuel based car technologies like hybrid and solar power cars.

Research and Development (tapping the untapped potential)

EM has an aim to excel in making high performance cars in terms of fuel efficiency, greener fuels, lighter materials, style, safety and comfort.

With this aim in mind we have successfully completed the following R&D projects:

Completed Projects City Medium Large Luxury

Advanced Diesel Engine OnlineFuel Efficient Engine Online OnlineBreath analyzer interlock OnlineLow Emissions Online30% Lighter Car Online OnlineAccident prevention system 8th year 8th year OnlineEnergy recovery system 8th yearZero emission engine Online 8th yearAnti-theft tracking OnlineSmart noise insulation 8th yearFrost free windows OnlineImproved build quality Online Online Online Online


Alternative bio fuels 9th yearBetter electric car battery 9th year 9th yearHybrid Engine Technology 7th year

We have successfully incorporated the newly developed technologies through the above R&D projects in our existing product line, delivering high end cars in each segment to increase customer satisfaction. We have plans to increase our R&D spending by further investing extensively in the following projects, the cost and areas are shown in the following table

Projects City Medium Large Luxury

Aerodynamic remodeling 5.38 5.38Fuel saver start stop system 4.46Frost free windows 3.24Carbon Fiber bodywork 11.01‘Green’ painting process 6.36Light weight Ceramic bakes 5.08On board internet 1.83 1.83 1.83

Risk Factor

It is expected that uncertainty to be a cause of concern for European economy. There is a probability of decrease in the growth of car market in some of the European countries, which may impact the inventories of finished goods of our company and could also influence demand for cars and profitability.

However, in order to insulate our market share, we are penetrating our products into new and growth oriented markets by providing superior and fuel efficient range.


Warranty Plan

All new EM Vehicles are covered by a 3-year/120,000km warranty against manufacturing defects, bad workmanship, metallurgical defects and malfunctioning of systems and spares. In addition, most of our models are covered by a 12-year anti-corrosion warranty. This warranty will hold good provided the vehicle is serviced as per our servicing manual and genuine EM spares are used. This warranty comes along with each EM vehicle at no additional cost to customer.

Service Plan

EM AutoMotion

Peace of mind you can rely on:

At Energizer Motors, we believe that when you purchase a vehicle, you are not simply buying a car. Every Energizer Vehicle is manufactured with particular attention to detail, uncompromising care and an integrity you can trust.

With a choice of “AutoMotion Service Plan” and “AutoMotion Maintenance Plan”, you can rely on the fact that after driving off in your new car; it will be taken care of for years to come. That's peace of mind. AutoMotion Service Plan

A 5-year/90,000 km AutoMotion Service Plan is available at a pre negotiated highly competitive price on all EM vehicles. The EM AutoMotion Service Plan does more than cover scheduled vehicle servicing - it helps you to maintain a competitive resale value. Further this plan is extendable up to 180,000km, at an additional cost.

AutoMotion Maintenance Plan

A 5-year/60,000 km AutoMotion Maintenance Plan is available at a pre negotiated highly competitive price on all EM vehicles. The Maintenance Plan not only covers servicing costs, but also wear and tear items such as wiper blades or brake discs that are not usually covered by service plans.


What's more, the AutoMotion Maintenance Plan also covers mechanical and electrical breakdowns should they occur within the duration of the plan, with an assurance that only genuine EM parts are fitted during the lifetime of the plan.

Maintain your car’s resale value

Every EM vehicle owner can be sure that the vehicle, whilst covered by the EM AutoMotion Service Plan or AutoMotion Maintenance Plan, will be maintained by qualified technical staff within the EM Dealers network. The customer will have a complete service history from our Dealer, which helps him to maintain its resale value.


SWOT Analysis: EM Inc.

STRENGTHS WEAKNESS

Investors friendly – has distributed dividend on a sustained basis despite market turbulence

Market value increased over six fold in six years

Strong market presence in all segments

Very high production to sales ratio - Production to Sales ratio more than 80% last six years and in 3 years out of 6, it is more than 100%

Product offer maximum features in each category – premium feel to the buyer irrespective of segment

Focus on R&D – 18 projects under development, another 18 online

Sustained drive towards green cars

Expertise in energy efficient diesel engines

Strong financials

High skill level, well paid and highly motivated workforce – very low levels of strikes / absenteeism

Comparatively Low market Share.

Small presence in Luxury segment

OPPORTUNITIES THREATS


Emerging markets - nations coming out of socio economic crises

High success ratio of past R&D projects provides larger platform for undertaking R&D projects relating to new technologies/developments.

Increasing tightness in environmental regulations for emissions – being the leading investing company in Green technologies, will put EM far ahead of competitors.

With the market growth, demand for skilled manpower will be high and availability low – having motivated and skilled workforce will lead to low attrition and enable utilization of own skilled workforce to train new workforce

Higher liquidity and cash reserves – ready for expansion/ acquisition of companies to gain market share

General slow growth projected for European markets in segments other than Luxury

Pace of growth of commercial market for new technologies like hybrid, electric cars may not be commensurate with the investments company has made for these developments

Macro economic uncertainties in the European region may impact overall growth of the European car market.


ASSUMPTIONS

1) Inflation:-

Year 01:- 2%Year 02:- 1.9%Year 03:- 1.8%Year 04:- 1.9%Year 05:- 2%

2) Automobile market growth (Segment wise):-

Market Segment Year 01 Year 02 Year 03 Year 04 Year 05

City 8% 2% -3% 4% 9%

Medium 5% 1% -3% 2% 5%

Large 5% 2% -2% 1% 5%

Luxury 13% 11% 2% 9% 11%

3) Credit terms:-

Credit on Material & Supplies: - 30 DaysCredit to Customers and Dealers: - 30 Days

4) Stock Upkeep Cost:-

Upkeep Cost is 15% of the Prime Cost of Production (based on past experience).

5) Material cost:-

Material cost is calculated as Cost of Raw material, cost of Options and Design adjusted for inflation in respective years.

6) Labour cost:-


As a trend shown from the past experiences of Our Company, labour productivity can be maintained as follow, by providing an increase in weekly wages and putting more efforts and expenditure on Training the labour force.

Year 01 Year 02 Year 03 Year 04 Year 05

Weekly wages £680 £700 £720 £740 £760

Labour Productivity:-

City: - 80 Cars per Worker annuallyMedium: - 58.33 Cars per worker annuallyLarge: - 50 Cars per Worker AnnuallyLuxury: - 10.59 Cars per Worker AnnuallyStrike Days:- 2 days annually

7) Fixed Overheads:-

The Fixed overheads are taken as follows (based on past experience)10% of Wages Bill + 5% of Op. Value of FA + 7.5% of Raw material cost

8) Dividend policy:-

As evident from our legacy, we have always kept on increasing dividend payout to our investors, and the company has proposed to maintain the same trend to provide dividend to investors in an increasing trend in line with profits of the company.

Year 01 Year 02 Year 03 Year 04 Year 05Dividend Payout

(% of PAT)3% 4% 4% 5% 5%


car marketing in european market

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