Clive's Response to Sandeep - Term Paper Example

An Individual Report and a Marketing Plan ID 19714 Order No. 267184 14 January 2009 Acknowledgements Table of Contents: Introduction: Given the global environmental issues and the problems pertaining to cost & availability of Petroleum, the world is looking forward to adopt alternate means of fuel in transportation that possess low emissions & ensures lower consumption of natural resources and is available at affordable prices. In this context, hybrid cars were tested on the roads whereby a different market of such cars is already established. Hybrid cars commonly use two types of engines - internal combustion engines (most commonly petrol driven but Diesel variants are also introduced) and electric motors that are powered by internal batteries. The electric motors based drive is suitable for low speed driving and hence is suitable for city roads while the petrol based drive is suitable for high speed rides on highways. The combustion engines charge the batteries during the ride and hence external charging is not required. Hybrid cars have been accepted by the customers because of the option of petrol based engine within the car although the cost is substantially high. However, fully electric cars (also called econocars) have not yet picked up markets because they cannot be driven at high speeds and the infrastructure supporting charging outlets is still not adequate. However, its market is expected to pickup substantially in light of latest technology innovations, tax savings, environment awareness programmes, and subsidization by government. This paper presents a marketing plan for econocar pertaining to the case study of Tomoco taking into account impacting factors like changing global dynamics in econocars, technology innovations, distribution networks, support networks (like charging outlets), grid capacity & availability, government support (subsidiaries, tax exemptions, value added services, local environmental laws, etc) and above all, change in user perceptions. [GreenCarSite, 2008; Domain-b.com, 2005; Indiacar.net, 2007; Frost & Sullivan Press Release 2003] Task 1 - Clive's Response to Sandeep: The offer by Sandeep qualifies as social engineering attack on the employee of another organization to acquire confidential & commercially sensitive information of that organization which may be including their intellectual property rights (IPR). First & Foremost, this is an unethical gesture and hence no organization in this world should indulge into such activities. Secondly, if the organization (Ishimuru in this case study) files a lawsuit against the company indulging into the social engineering activity (Tomoco in this case study) as per the clauses against breach of confidentiality/trade secrets/Intellectual Property Rights as applicable in the legal system of the country, the global reputation of Tomoco would be at a serious stake whereby damages can be irreparable. Every country has own rules & regulations for protection of business secret information, trade secrets, commercially sensitive information & intellectual property rights of the companies operating within the political territory of the nation. Such information can only be disclosed against non-disclosure agreements (within the business contracts or else signed separately) that are enforceable within the jurisdiction where the agreements are being executed. Such agreements are not only signed with the suppliers or third parties but are also signed internally within the organization as a part of employment agreements with every employee and the articles of memorandum for the management & the board members. By invoking a social engineering attack on the employee of an organization to provoke him/her to divulge secrets, the attacking organization is actually causing a breach of the confidentiality or non-disclosure agreements between the employee and his/her employer. In UK the "law of breach of confidence" & "law of confidence" and in the US the "law of Intellectual Property" & "law of patents" are incorporated to protect the rights of an original process, design or invention (appropriate registrations required) such that a duty of confidentiality is imposed on a person who is involved in the process development, design or invention. The protection is provided to the registrant till the time the same is discovered by another inventor separately by virtue of original efforts. If a breach is proved, the internal person as well as the external person/organization forcing the internal person to divulge confidential details can be sued in the court which can result into Financial as well as Reputational impacts. Having said the above, the expert from another company can be hired to support an original effort to develop similar technologies without using the processes/designs/innovations that are the intellectual property or confidential information of the previous organization of the expert. There is a very thin line in demonstrating this compliance. Practically, the new employer can ensure that no document, codes, figures, diagrams, charts, etc. prepared, reviewed & published in the previous organization of the expert should be reused (whether in hard or soft copy format) even if the expert has documented them himself/herself. In this case study, Clive can agree to hire Vijay with the condition that Vijay will strictly work as an expert applying original efforts to develop econocar batteries for Tomoco and will not divulge any design, innovation, process or any related details of Ishimuru in the process of delivering his duties for Tomoco. In fact, it would be wise to sign such an agreement in writing and also keep enough evidence handy (with the help of a lawyer specialising in Intellectual Property Rights) to protect the organization against an event of lawsuit filed by Ishimuru. [http://slcc.strath.ac.uk/scotslawcourse/ip/ip/boc/conf.html, 2008; Pate, R Hewitt, 2005; UK Intellectual Property Office, 2008] Task 2 - Draft Marketing Plan for the launch of Econocar: As Clive rightfully acknowledges this is one of the toughest marketing plans for a company that has not yet started manufacturing it and possesses no idea of what its market looks like. Moreover, this concept is still a novel idea in most parts of the world but a real customer acceptance is yet to emerge. Most of the customers still have the image of the Electric cars as being like "Golf Carts". Moreover, it should be kept in mind that Electric Cars would be positioned directly in competition with the cars with Internal Combustion (IC) engines whereby some of the advantages of Electric cars that would be used to market them will be challenged by some of their disadvantages against the IC engines - the prominent one being speed & pickup. As rightly pointed out in this case study, India is among the first few countries to develop their own Electric Cars and hence the country has some original know how about them and the related battery technologies. The Reva make of Electric cars is already having good acceptance in the southern cities of India and is a premium globally recognised electric car already. They have entered Japan already after obtaining government approval to market electric cars in Japan who themselves are planning big way to manufacture & launch electric cars. US & UK already have developed markets for Electric Cars. [Frost & Sullivan Press Release, 2008); Domain-b.com (2005); Green Tech Gazette, 2008; GreenCarSite, 2008] The car markets have been hit very badly due to stagnation and the current economic crisis. Car sales in US have declined by 36% percent as reported by Platinum Today and markets in other developed economies like UK & Canada have also witnessed similar plunges (UK car sales declined by 38% as reported by thisismoney.co.uk and Canada car sales declined by 21% in December 2008). [Platinum Today, 2009; Praet, Nicolas Van, 2009; Daily Mail, 2008] The first question that arises in mind that is - why would customers accept Electric Cars against IC cars in the kind of markets that are witnessed today' Further to this the question that needs to be answered is why some Asian countries have originally developed electric cars much ahead of US, UK & Europe' The answer lies in the clue that Electric cars are being introduced to solve some teething problems that these countries have been facing which is now witnessed by the US, UK & Europe as well. We hereby summarize these problem areas: (a) Congestions - A number of cities in Asia are heavily congested thus making a heavily powered IC engine based car absolutely useless. The speeds do not cross 20 to 30 miles an hour and in this process huge amount of fuel is wasted. (b) Pollution - Almost all the cities in Asia are witnessing heavy pollution due to vehicle emissions. (c) Cost of Fuel - Many countries in Asia are required to fulfil most of their fuel requirements through imports from oil rich countries. (d) Commitment to Global Environment Protection to reduce Global Warming. (e) Customer flexibility - Customers are more flexible to accept new technologies in these countries if clear price advantage is presented. On the other hand, there are some challenges in launching Electric cars as well: (a) The Electric car technology has not yet matured to high consumer readiness levels (b) The Electric cars are expected to load the grid of a country heavily (c) The current speed & pickup that they possess makes them not so suitable for motorways or highways (d) A large number of Electric charging stations would need to be established (e) Support & maintenance networks are not up to the mark. (f) Supplier network is not yet built adequately [Center for Environmental Law Education, Research & Advocacy, 2007; Business Wire, 2006; Frost and Sullivan Press Release, 2003; Diesel Progress Magazine, 2008; Green Tech Gazette, 2008; GreenCarSite, 2008; Northeast Pennsylvania Business Journal, 2008] However, the good news is that the challenges are getting eased out amidst commitments by a number of manufacturers and governments. "In the next ten years (by 2017) the annual battery market turnover for powering cars is expected to reach USD 1.5-2 billion." said Suba Swaminathan (2007), team leader of the North American Energy & Power Systems Group at Frost and Sullivan in Stafford. Based on the above understanding the marketing plan of Electric Cars is presented as below: (a) Branding: It is recommended that Tomoco doesn't get into standardized global branding as it may not work in many markets of the world. Modern global markets are driven by strong localization factors in respective countries which may differ substantially. Example, high commitment to environment may work better than cost saving benefits in markets having rich consumers. In this context, Tomoco shall hire local branding professionals in respective countries and establish a localized image that shall work well in competition with the local players. (b) Choice of Markets: The countries having stringent environment laws (like permissible emission limits) would be chosen in the first place. This will ensure that Government will support the suppliers of environment friendly cars. The countries having stringent emission standards are the US, UK, and a number of Asian Countries. Europe has been defining emission standards used by a number of countries worldwide (Euro1, Euro2, Euro3 and now Euro4). European Council has proposed latest strict carbon emission limits but eight countries within Europe have revolted probably because a number of current models sold by manufacturers will not meet the standard. Launch in these countries will ensure an upper hand because the vehicles with lower emission levels have chance of higher acceptance. Moreover, Tomoco can join the environmental protection programmes in these countries to ensure that the organization is branded to have strong commitments to environment protection. Joining such campaigns may ensure strong rapport with the Government Machinery, Communities and Special Interest Groups which may boost substantial acceptance of the products. This may also ensure that some Government sponsored incentives or subsidies can be availed thus reducing the cost to market and the cost of the product itself. Finally, Tomoco shall choose those countries that have sufficient capacity in their power grids to accommodate substantial number of electric cars. US Grid is already capable of powering 180 million electric cars while UK grid doesn't require much expansion even if the entire country is flooded with electric cars. Countries in Asia, however, are going to face crunch in their power capacities as there seems to be no firm plan to expand grids to accommodate econocars except India who have entered into agreement with USA for deploying domestic Nuclear Power Stations. [Diesel Progress Magazine, 2008; Green Tech Gazette, 2008; GreenCarSite, 2008; Moresco, Justin, 2008; Center for Environmental Law Education, Research & Advocacy, 2007; Thomas, Justin, 2006; Shibler, Ann. 2007; Grover, Sami. 2008] (c) Advertising Campaigns: The organization shall invest in the local advertisement media like local radio, television, newspaper & magazines, exhibitions, trade fairs, direct mailers, pamphlets and the advertisement boards of the Government & special interest groups pertaining to environment protection. The company shall indulge into propagating messages of environment protection to the locals and shall publish white papers & journals through locally popular libraries & databases. Locals would be hired to ensure that the native languages can be used as much as possible in addition to the English language. (d) Service Stations and Charging Outlets: In the countries where Tomoco has direct service stations, battery charging stations shall be deployed. Tomoco shall launch a scheme whereby a car will not be required to charge the internal battery rather can exchange their discharged battery with fully charged ones within five minutes if the battery owner can show a proof that it is less than three years old. Moreover, Tomoco will introduce battery charging stations at all gas stations of the cities of launch irrespective of whether a direct service station is available or not. Tomoco shall build local franchisees to establish showrooms & service stations for Econocars in the countries where direct presence is not possible in near future. Finally, Tomoco shall plant self service battery charging outlets at auxiliary locations as well like parking lots, eateries along highways, parking in hotels, offices & shopping malls, etc. All such self service battery charging outlets shall have credit card swiping machines such that a nominal charge can be levied for the charging of batteries. These outlets will prominently display the Tomoco brand and its value. (e) Choice of Customers: The organization shall very carefully target customers in respective countries and design respective slogans to attract them. In some classes, customers are rich and will not bother to get attracted to cost benefits - they would love to continue with cars with IC engine running on Petrol or Diesel. Hence, the customers in these countries will have to be shown long term benefits in terms of benefits to the local environment & health and also long term compliance to the emission regulations that are getting stringent day by day. In the cost conscious classes, customers will be shown major cost benefits like per mile economy, lower operating & running costs, lower maintenance charges, lower costs of spare parts, etc. [Green Tech Gazette, 2008; GreenCarSite, 2008] (f) Collaboration with Battery Manufacturers: While Tomoco can plan to develop the battery technology and start manufacturing the same, it is not wise to get into this activity at the beginning itself. Hence, Tomoco shall collaborate with some of the largest battery manufacturers like Intel, Sanyo, LG Chemicals, Panasonic, Lithium Technology, etc. The econocars are driven by the Lithium Ion batteries that enable longer usage after full charge. Intel is a leader in econocar batteries that generated whopping revenue of $38.33 billion in 2007 and has spent $5.76 billion in R&D in the same year. The R&D efforts of such technology giants can be utilized for the benefit of Tomoco such that in the initial stage, Tomoco can focus on assembling the car itself rather than manufacturing batteries. Some battery manufacturers like Lithium Technology Corporation (LTC) have already established their presence in the HEVs (Hybrid Electric Vehicles), PHEVs (Plug-in Hybrid Electric Vehicles) in addition to Electric Vehicles. [Fehrenbacher, Katie, 2008; Business Wire, 2006] Conclusion: Econocars are the vehicles of future as they are going to contribute to the safety of environment considerably. They have been at conceptual stage for quite some time but now the world is witness their realization as a number of car manufacturers have committed to the econocar manufacturing. The primary factors that are boosting the econocar markets are environment issues, fuel cost, stricter regulations on emissions, lower cost of running, improving support networks, government commitment in many countries, technology innovations and improving supplier network. In this context, the marketing strategy of Tomoco in this case study has been presented for their forthcoming econocar launches keeping in perspective choice of markets that are getting more suitable for econocars amidst government commitments, environment laws, supplier network, infrastructure, grid capacity and consumer acceptance. Reference List: Cars and Light-Duty Trucks-California. Emission Standards: USA: Cars and Light-Duty Trucks - California. Emission Standards ' United States. Diesel Progress Magazine (2008). Retrieved on 13 January 2008. Available at http://www.dieselnet.com/standards/us/ld_ca.php. Confidential Information. Retrieved on 13 January 2009. 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UK and Australia Launching Electric Car Infrastructure. Green Tech Gazette (2008). Retrieved on 13 January 2009. Available at http://www.greentechgazette.com/index.php/electric-vehicles/uk-and-australia-launching-electric-car-infrastructure/. US sales decline by 36% in December to round off tough 2008. Platinum Today (2009). Johnson Matthey. US. Read More