Beruflich Dokumente
Kultur Dokumente
Internship Report
Company understanding
Study of possible reason of sales
decline
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Submitted by
Qazi Zohaib Aqil
Shabih Ahmed
Acknowledgement
Highly indebted to Atlas Honda Rawalpindi for giving opportunity to intern. Also the names worth
mentioning in making this internship appointment come true which includes Faiza Ahmed, Tuba, and
Riaz Ahmed.
My mentors at Atlas Honda Muhammad Rafi and Rizvi Sab.
Marketing department colleagues, Taimour, Saad Paracha, Zaigham Aziz, Saqulain, and worth
mentioning Bilal Bhai for their continuous guide lines, exceptional behavior, brotherhood and care. I
pray all the best for their careers.
Last but not the least my beloved wife in helping me editing this document.
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Contents
Acknowledgement ......................................................................................................................................... i
Company history ........................................................................................................................................... 1
Products ........................................................................................................................................................ 1
Company Strategy ......................................................................................................................................... 2
Understanding the market & the target market .......................................................................................... 3
From 2S to 5S dealers and Dealerships......................................................................................................... 4
The Marketing Research ............................................................................................................................... 5
The Marketing Research ............................................................................................................................... 7
Comparison of Honda with Chinese on basic attributes .............................................................................. 7
Histograms and Crosstabs for Analysis ....................................................................................................... 11
Recommendations ...................................................................................................................................... 15
Exhibits ........................................................................................................................................................ 18
Exhibit1 ................................................................................................................................................... 18
Exhibit 2 .................................................................................................................................................. 19
Exhibit 3 .................................................................................................................................................. 20
Questionnaire ............................................................................................................................................. 20
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Company history
In 1963 Yousef S. Shirazi found Atlas investments with the capital of PKR 500000. He ran in a contract
with Honda Motor Company Japan, later forming Atlas Honda which by the end of year ending in 201314 had a Assets of PKR 14.3 billion. (Exhibit 1)
Since its inception it has launched legendary models in motor cycles and established a nationwide
integrated network of dealerships which retailed Atlas Honda's motorbikes.
Amongst its motor bikes CD-70 and CG-125, named based on their engine have been called the
"legendary motorcycles" and are still in production. CG-125 engine was launched in 1985 and is its
technology is still popular among consumers and with small changes in vinyl, head light, indicator
designs and muffler, sold mostly in a celebrated red and Black color. CD-70 Model is the most fuel
efficient, with performance of almost 80 Km in one liter of gasoline/petrol (Exhibit 2).
Products
Products classification by engine type (figure 1)
70 cc
CD-70
100 cc
Pridor
CDDream
125 cc
Racing
Category
CG-125
CBR-150
CGDream
CBR-500
Deluxe
Test
Market
Wave110
Figure 1: Products
Engine type
Description
CD-70
CD-Dream
Pridor
CG-125
It is the most liked high speed and performance street bike comes with
Page 1
Engine type
Description
A robust engine in a red and black color. Also known as power machine.
CG-Dream
Deluxe
CBR-150
CBR-500
Wave-110
Company Strategy
The companys strategy for the time period 1962-1999 can be seen as focusing on
Product and
Place
Oriented and the then business volumes were fluctuating 80000- 100000 units yearly.
In the year 2000, Saqib Shirazi become the CEO of Atlas Honda an enthusiastic Harvard MBA defining
new frontiers for the company abolishing the old fashions which according to him pendulum like
swinging sales volume between 80-100K. To increase the sales volume he proposed cutting the cost per
unit of motorcycle. The following steps were taken to cut the cost
a) Production of imported parts were localized.
b) Costly parts made by vendor were to be reduced in price while equally ensuring good quality by
I.
Improving the process technology
II.
Vendor to vendor improvements in communication and synergy was developing by Atlas
Honda. In short enhanced the whole supply chain network of vendor to Atlas by
developing a better horizontal integration.
c) Brand image
It then comes to reduce the price of
motorcycle to make it affordable for the
consumers but it left the company with
option to reduce the quality of the product
which is not acceptable by company. Hence
the quality is sustained with no decrease in
quality for this leasing policy was
introduced and which promoted dealers to
make their dealerships a 5S dealership.
d) Aggressive leasing
If we see GDP per capita it is increasing and is recorded at US$ 806 for the year 2013
compared to US$ 772 for 2012 in Pakistan (Exhibit3). Yet the income of $806 annually is
not sufficient to buy Atlas motorcycle on full payment by masses at large. Since the
lowest price of Honda CD-70 is PKR. 69,500 which equal to US$705 (1US$= 98.5). Hence
leasing can make Honda bike available to masses at ease.
As a result of above mentioned changes by the year ending 2002-2003 Atlas Honda broke the pendulum
shift and sold more than 100,000 motorcycles for the first time in history. Along with these changes the
price of Honda CD-70 was reduced to PKR 58,000 than PKR 68,000 and price of Honda CG-125 to PKR
72,000 than PKR 78,000 and a boom is seen in sales.
Firstly it was believed that the Chinese competition will give a tough time to Honda but it proved itself
beneficial for Atlas Honda for the following reasons
The reason that Chinese motorcycle lacked in good quality, no availability of spare parts, no after sales
services and shortly lived companies such as Hero etc. made in consumers mind a bad brand image for
the Chinese motorcycles. Once consumer base increase for motorcycles and especially for good quality
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motorcycle the only choice they were left with was good quality and affordable motorbike a resultant of
which was increase in Hondas sale.
Product
Parts
Policy of
lease and
Exhange
Place
Person
The change in business models really impacted and boosted the sales. One good example could be that
during our internship we visited several dealers in Rawalpindi region. Honda Auto who is the 1S dealer
of Honda that is they only sale new Honda motorcycle compared to them is Khawaja Autos on the same
Muree Road Rawalpindi who are 5S dealers adopted the new business model and have a really good
sales as compare to 1S dealer because of the spare parts business they own, the leasing policy they have
and the better leadership.
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celebrity motorcycle model there is CG-125 as it meets the performance required for hilly and rocky
terrain.
The Marketing Research
Along with visit to dealerships that Atlas Honda has created we also conducted a market survey based
on random sample of 49 people using questionnaires (Exhibit 4). The survey helped in looking at various
aspects the consumers have in the mind for both Honda and Chinese motorcycles.
Comparison of Honda with Chinese on basic attributes
To Study the basic attribute we have listed down some basic attributes on which we have asked the
consumer about Honda and Chinese user on following building block attributes
1.
2.
3.
4.
5.
6.
Price
Durability
Design
Brand image
Performance
Maintenance
We have asked users of Honda and Chinese motorcycles the relative importance they give to each of the
above-mentioned attributes and how they see for each Honda and Chinese motor bike individually. The
question 11 and 12 help us to develop the following Multi-Dimensional Scales.
How to read this table and graph
To see how much the above-mentioned attributes are important we have used the following scale
Serial No.
1
2
3
4
Scale
Not Important
Below Average Importance
Average Importance
Above Average Importance
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HONDA
CHINESE
Relative
importance price
Honda user
Relative
importance price
Chinese user
Honda
price
3.391304
Chinese
3.673913
3.369565
3.627907
the actual points where these motorcycles stand in consumers mindsets in the red ovals and are also the
averages of the consumer preferences.
In the graph below relative importance points and price comparison points both actual point of Honda
and Chinese are above ideal points. In the current case it represents that both have a good pricing
strategy and in this case the Chinese have a relatively good pricing compared to Honda.
Easy scale to read
Serial No. Distance from the relative importance point
1
Above
2
Below
Remarks
Good/Favorable
Bad/Not Favorable
3.673913043
3.627906977
3.65
3.6
HONDA
CHINESE
3.55
3.5
Relative importance
Honda
3.45
3.4
3.391304348
3.369565217
3.35
0
Relative importance
Chinese
4.434783
5
CHINESE
Relative
importance
Honda
Relative
importance
Chinese
2.717391
4.434782609
3.71791
3.704545455
4
3
3.717391
CHINESE
2.717391304
2
3.704545
HONDA
Relative importance
Honda
1
0
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Relative importance
Chinese
In this graph it is quite clear that Honda score far more in durability than Chinese motorcycle as actual
point is way above the ideal point which is a good indicator for Honda.
Now we compare the Design factor
Honda
Chinese
Design
4
HONDA
CHINESE
Relative
importance
Honda
Relative
importance
Chinese
3.891304
HONDA
3.9
3.434783
3.891304348
3.8
CHINESE
3.7
3.6
3.521739
3.52173913 3.545454545
3.5
3.545455
3.434782609
3.4
0
Relative importance
Honda
Relative importance
Chinese
In design consumers have a very high likelihood for Hondas design as compared to Chinese
counterparts.
Honda
Chinese
Brand Image
HONDA
CHINESE
Relative
importance
Honda
Relative
importance
Chinese
4.521739
2.804348
3.76087
3.75
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
4.52173913
3.760865
HONDA
3.75
2.804347826
CHINESE
Relative importance
Honda
Relative importance
Chinese
Consumers have a high value for Hondas brand image and are not satisfied from Chinese counterpart.
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Honda
Chinese
Performance
HONDA
CHINESE
Relative
importance
Honda
Relative
importance
Chinese
4.086957
3.152174
3.695652
3.636364
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
4.086956522
3.695652174
3.636363636
3.152173913
HONDA
CHINESE
Relative importance
Honda
Relative importance
Chinese
0.5
1.5
2.5
Consumers have a strong opinion that Honda has a better performance than Chinese counterparts.
Honda
Chinese
Maintenance
HONDA
CHINESE
Relative
importance
Honda
Relative
importance
Chinese
3.847826
3
3.456522
3.522727
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
3.847826087
3.456521739
3.522727273
3
HONDA
CHINESE
Relative importance
Honda
Relative importance
Chinese
0.5
1.5
2.5
Both the user of Honda agreed to this point Honda has lower maintenance cost as compared to Chinese
motorcycles.
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Both the chart and cross tab represent the maintenance cost and the time of usage of Honda motorcycle by the Honda user. It is quiet true that overwhelmingly the response is the Honda motorcycles
maintenance cost is very low but the 7 cases of High maintenance cost 1 case of very high is also
alarming.
Histogram and Crosstab For Chinese
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This result shows that the users of Chinese motorcycle have low maintenance cost too. Among the
random sample only one case of Chinese motorbike user have claimed that it is a very high maintenance
bike.
Brand Awareness of new models
The given below comparison shows the consumer responses for the newly launched bike of Honda
family the CD-Dream and the CG-Dream.
From the table above it is clear that 62.5% of respondents of the survey are yet unaware of the quality
of the CD-Dream among them 35.4% are Honda users. This means that they are unaware of the launch
of CD-Dream itself. A mass promotion is required for these two machines as they lack in awareness so
far.
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The awareness level about CG-Dream in among Honda users is even worse about 37.5% users of Honda
are not aware that anything/product as Honda CG-Dream exist in market. Also, overall level of
unawareness is 62.5% equal to that of CD-Dream.
The need of a new bike
We have also run a factor analysis to study the consumer mindset. Based on building blocks of
1.
2.
3.
4.
5.
6.
Price
Durability
Design
Brand image
Performance
Maintenance
The need of factor analysis is that it helps in identifying new market or products required in market. The
rotation we set to obtain this was varimax. This varimax rotation was required as it amplifies the
variances among characteristics, which in our cases are the above-mentioned six building blocks hence,
helping in making excellent factors.
It proved out to be very beneficial and is supportive of the Hondas new launch of CD-Dream and CGDream. The component 1 and component 2 are the existing market of motorbike where component 1 is
Honda and Component 2 is Chinese motorbike. We ran a factor analysis in which we tried to find out
that consumer is demanding a new motorbike that should have
1. Price equal to Honda motorcycle. Price [Honda], which is .800, is its representation and Price
[Chinese] -.575 is its strong opposition.
2. Also consumer wants a Design to be like Chinese bikes that are stylish too.
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new shape and design. Some promotional rally can be arranged to promote these new shape.
Also it market will develop in long run since youth is more prone toward new designs.
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7) It was found that there is no specific location based criterion for establishing a new dealership.
In Gujar Khan two of the Atlas Honda dealerships are in vicinity of 500 meter which demoralized
one dealership since the new dealership is setup in closed vicinity. Knowing the fact that if some
area has growth or potential and needs a new dealership it must be well taken care of that
setup of new dealership must not affect the existing dealership.
8) Retail price ret must be maintained in all the areas to promote health competition.
9) A fatwa must be decreed from a well acknowledge religious scholars mentioning leasing being
done at Atlas Hondas dealership are according to Islamic Sharia and practices.
10) Retail price must be revised. It must give sufficient space to dealerships to give discounts while
equally ensuring profits for themselves for spot sales. The Retail price must be set as
We believe if above mentioned recommendations are well taken care off can help Honda in increasing
sales, and developing a synergy with dealers. Both these will help Atlas Honda in short run as well as the
long run strategies.
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Exhibits
Exhibit1
Page 18
Exhibit 2
Exhibit 3
Page 19
Exhibit 4
Questionnaire
Questionnaire- Motorbike
This questionnaire is collection of data for market research project on motorcycles business in Pakistan.
All the information collected will be kept secured and can possibly be published or reproduced for
academic purpose sole at Karachi School for Business and Leadership, Karachi.
Q1) which motorcycle are you using currently, specify with name
a. Honda(_________________)
b. Chinese(_________________)
Q2) when purchased it was a
a. New motorbike
b. Used/Second hand motorbike
Q3) when did you purchase you motorcycle?
a. Three months or less
b. 6 months or less
c. 1 year ago
d. 2 years ago
e. More than 2 years
Satisfaction
Q3) Maintenance cost of my bike is
Very low
Low
High
Very high
Q4) keeping in view your current pocket size which one would you buy?
a. Honda CD-70
b. Honda CG-125
c. Honda Pridor
d. Honda CD-Dream
e. Honda CG-Dream
f. Honda Deluxe
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Q6) Do you think Chinese motorbikes are in a strong competition with Honda Motorcycles?
a. Yes
b. No
Quality is equal to
other bikes(Chinese)
Quality is better
than other bikes
CD-70
CG-125
Pridor
CD-Dream
CG-Dream
Deluxe
Q9) when purchasing new HONDA motor bike, rate the following,
I will get pre-purchase information about motorbike from
a. Visiting website of the motorbike company
Not at all
May be not
Neutral
May be yes
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Almost always
Don't
know
May be not
Neutral
May be yes
Almost always
Neutral
May be yes
Almost always
Neutral
May be yes
Almost always
c. Consult a Mechanic
Not at all
May be not
May be not
Q10) when purchasing new Chinese motor bike, rate the following,
I will get pre-purchase information about motorbike from
b. Visiting website of the motorbike company
Not at all
May be not
Neutral
May be yes
Almost always
May be not
Neutral
May be yes
Almost always
Neutral
May be yes
Almost always
Neutral
May be yes
Almost always
e. Consult a Mechanic
Not at all
f.
May be not
May be not
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Not Important
Below Average
Importance
Average
Importance
Price
Durability
Variety
Design
Brand Image
Performance
(0-60 km/h in less
time)
Maintenance
Price
Honda
Very bad
Bad
Neutral
Good
Very good
Chinese
Very bad
Bad
Neutral
Good
Very good
Honda
Very bad
Bad
Neutral
Good
Very good
Chinese
Very bad
Bad
Neutral
Good
Very good
Honda
Very bad
Bad
Neutral
Good
Very good
Chinese
Very bad
Bad
Neutral
Good
Very good
Honda
Very bad
Bad
Neutral
Good
Very good
Chinese
Very bad
Bad
Neutral
Good
Very good
Very bad
Bad
Neutral
Good
Very good
Durability
Variety
Design
Brand Image
Honda
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Above Average
Importance
Chinese
Very bad
Bad
Neutral
Good
Very good
Very bad
Bad
Neutral
Good
Very good
Chinese
Very bad
Bad
Neutral
Good
Very good
Maintenance
Honda
Very bad
Bad
Neutral
Good
Very good
Chinese
Very bad
Bad
Neutral
Good
Very good
Thank you
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