Marketing Plan for Yamaha in Indonesia - Case Study Example

Marketing Plan for Yamaha in Indonesia Executive Summary Yamaha Indonesia failed to successfully launch Nouvo back in 2002. Failure of its launching was due to lack of sufficient information concerning the product preferences of its target consumers. To successfully launch Mio and re-launch Nouvo, the marketing manager of Yamaha Indonesia should conduct a specific market segmentation study in order to determine necessary information concerning its target consumers. Likewise, implementing an accurate and more effective product positioning is equally important in terms of making the brand Nouvo and Mio known to its target consumers. The company’s target consumers for Nouvo are young male individuals and young females for Mio. To deliver a good marketing message to its target consumers, Yamaha Indonesia should hire young influential male and female endorser. Together with the use of the company’s market positioning statement, the company will be able to accurately send its message across the different geographic market in Indonesia. As part of conducting a market segmentation study and developing a product positioning strategy, the company should make use of PEST framework in analyzing the market environment for automatic motorcycles. It is equally important for marketing managers to conduct a qualitative research study such as a one-on-one interview with its target consumers. The gathered information will be useful in terms of enabling the company product automatic motorcycle based on its target consumers’ specific needs and wants. Table of Contents Executive Summary ……………………………………………………………… 2 Table of Contents ………………………………………………………………… 3 I. Introduction ………………………………………………………………. 4 II. Summary of Yamaha Indonesia Case ……………………………………. 4 III. Initial Marketing Strategy of the Nouvo …………………………………. 5 IV. Market Environment Analysis .................................................................... 7 V. Proposed Marketing Plan for the Launching of Mio and Re-launching of the Nouvo …………………………………………….... 7 a. Market Segmentation ……………………………………………. 8 a.1 Demographic Segmentation …………………………… 8 a.2 Psychographic Segmentation ………………………….. 10 a.3 Geographic Segmentation ……………………………… 11 b. Target Positioning for Mio and Nouvo ………………………….. 11 VI. Yamaha Indonesia’s Consumer Behaviour ……………………………… 13 VII. Discussion ……………………………………………………………….. 14 VIII. Conclusion ……………………………………………………………….. 16 IX. Recommended Solutions ……………………………..………………….. 17 Table I – Market Segmentation of Nouvo and Mio ……………………………… 18 References ………………………………………………………………………. 20 – 21 Introduction In 2002, Yamaha Indonesia launched its first model of automatic motorcycle called Nouvo. However, the marketing strategies used in launching Nouvo was not effective in terms of convincing Indonesians to patronize Yamaha’s first automatic motorbike. Under the supervision of Dyonisius Bell – the vice president director of Yamaha Motor Kencana Indonesia, a new marketing plan which aimed to reposition and re-launch Nouvo and launch its second generation automatic motorcycle known as Mio in the local market was designed back in mid-2003 (Goodwin and Huan 2006, p. 2). Considering the case of Yamaha in Indonesia, this report will focus on discussing the strategies used by Yamaha upon positioning and launching its automatic motorcycles in Indonesia. Considering the case of Yamaha, the initial marketing of the Nouvo will be critically evaluated followed by providing a list of valid reasons and evidences that will why the initial marketing plan was ineffective in Indonesian motorcycle market. Based on the lessons learned from Nouvo, a marketing plan that covers the launching of the Mio and re-launching of the Nouvo will be provided in details. Summary of Yamaha Indonesia Case Back in 1955, Yamaha Motor Co. Ltd first operated in Japan. As of 2006, Yamaha manufacture its products around 35 countries worldwide. It was in 1974 when Yamaha Indonesia was established. Assuming that Indonesian market was ready to purchase an automatic motorcycle, Yamaha Indonesia first introduced Nouvo in late 1990s. Using heavy television, magazine, and giant billboard advertisements and promotional activities such as the Nouvo test ride campaign, special events, and exhibits at shopping malls and other public places, Nouvo was first launched in May 2002 (Goodwin and Huan 2006, p. 4). Despite the marketing strategy used in promoting Nouvo in Indonesian market, the sales of this product remained low. After conducting a consumer profile study, Yamaha adopted a two-fold strategy. First, Nouvo will be repositioned as “tough, powerful and practical bike for men” whereas Mio will be launched and positioned as “trendy and fun bike for female consumers” (Goodwin and Huan 2006, p. 2). Being the third largest manufacturer of motorbikes with 15.5% market share, the major competitors of Yamaha Indonesia includes Honda Motor Co. (63.1%) and Suzuki Motor Corporation (19.3%) among others (Goodwin and Huan 2006, p. 10). Honda and Suzuki Motor manufacture its motorcycles in Indonesia in order to meet the domestic demand and sell the motorbikes through private and independent dealers and sub-dealers. In the case of Yamaha Indonesia, the company was able to establish at least one main dealer in each of the 33 different provinces with almost 600 sub-dealers who are actively selling Yamaha motorcycles (Goodwin and Huan 2006, p. 3). Initial Marketing Strategy of the Nouvo Intended for male and female urban commuters with higher income, Yamaha Indonesia is designed and built with a 4-stroke engine and 115 cc engine and automatic transmission. Nouvo was designed with 16-inch wheels to enable the users pass through the rough roads (Goodwin and Huan 2006, p. 4). Under the leadership of Beti, Nouvo was launched in Indonesia using heaving advertising and promotional activities between May to September 2002. In order to strengthen the company’s brand portfolio, Yamaha Indonesia did not only use television advertisements but also print ads in magazine and large-scale billboards with Michael Owen as the preferred endorser. On top of these advertisements, the company also promoted the product by sponsoring a Nouvo test ride campaign, contest for dealers and repair shops, launching ceremony, press conference, exhibitions at shopping malls and other public places, live radio broadcasting, special events like football tournaments. The company even participated in motor shows (Goodwin and Huan 2006, p. 4). The problem with using the marketing tagline “Coba dulu, baru beli” or “try first, then buy” is that the use of this particular message does not persuade its target consumers to purchase the product (Goodwin and Huan 2006, pp. 4 – 5). Upon analyzing this particular positioning statement, the company is simply encouraging its target consumers to try Nouvo but not literally persuading this group of motor bikers to purchase Yamaha’s newly launched product. Yamaha also displayed 23 different Yamaha models on top of Nouvo in one of its showrooms (Goodwin and Huan 2006, p. 16). This particular marketing promotional activity was a wrong choice since its target consumers may simply end up purchasing one of Yamaha’s manual motorcycles. Likewise, the company should have used a young Indonesian celebrity endorser rather than an English professional football player who is currently playing as a striker for Manchester United (BBC News 2009). Basically, selecting a local and equally influential endorser is more effective in terms of persuading more Indonesians to purchase and invest on a new automatic motorcycle. Although strengthening the company’s brand portfolio is necessary in terms of increasing the company’s overall business profit and market share, the lack of focus in terms of selling Yamaha Indonesia’s Nouvo to its target consumers remain a problem. Since the company failed to address the specific needs of its target consumers, most male bikers perceive the product as something that signifies femininity. Since the specific male consumers’ personal concerns about the design and functions of automatic motorcycles were not carefully addressed, as much as 30% of Nouvo’s total users of Nouvo are female (Goodwin and Huan 2006, p. 5). Market Environment Analysis Market environment of motorcycle industry in Indonesia can be analyzed using the PEST analysis. Political factor does not affect the selling of automatic motorcycles in Indonesia since there is no strict policy concerning the selling of motorcycle. What significantly affects the selling of automatic motorcycle in Indonesia is the economic and socio-cultural environment (Lee and Carter 2005, pp. 40 – 52). Since majority of the motorcycle riders are those individuals who could not afford to purchase private cars, economic factors like high unemployment rate could significantly decrease the ability of Yamaha to sell expensive automatic motorcycles. Socio-cultural factors like the practice of conservatism among women could also affect the ability of the company to sell Mio to female market. With regards to technological factor, Yamaha is the first motorcycle company that manufactures and sell automatic motorcycle in Indonesia. This gives the company a competitive advantage to monopolize the market of automatic motorcycles (Goodwin and Huan 2006, p. 12). Proposed Marketing Plan for the Launching of Mio and Re-launching of the Nouvo Marketing is a very broad subject which aims to improve the company’s financial performance not only through selling and advertisements but also in finding ways to develop and establish a good relationship with the target customers (Lee and Carter 2005, p. 279, 296 ). Therefore, it is wrong to believe that the study of marketing is focused only on selling and advertising. Increasing the company’s sales and profitability is a common goal of each business. Since all humans have their own specific needs and wants, the study of marketing should be focused on enabling Yamaha Indonesia address the individual concerns of its target consumers. To do so, the company should consider the product preferences of its target consumers which can be guided by carefully studying the marketing variables such as the product value, cost, customer(s) satisfaction, and market distribution. All these information is included in the study of marketing mix or the 4 P’s known as price, product, promotion (marketing communication), and place (distribution) (Kotler and Armstrong 1997, p. 52; McCarthy and Perreault 1993, p. 46; Stanton, Etzel and Walker 1991, p. 13). To enable Yamaha Indonesia to successfully identify the company’s target consumers, the marketing manager should divide its target consumers into subgroups (Rogers 2005, p. 15). Market segmentation is an important decision-making tool which could enable the marketing manager of Yamaha to develop strategic decisions based on the market segment analysis result. Dividing Yamaha’s target consumers can be done by conducting a market segmentation study which focuses on identifying and examining the market segment of consumers’ characteristics related to demographic, psychographic, and geographic factors (Lee and Carter 2005, pp. 107 – 109; Kotler 2000, p. 8, 263). Market Segmentation Demographic Segmentation Demographic segmentation actually examine variables related to the target consumers’ age, size of family, family life cycle, gender, income, occupation, educational attainment, religion, race, generation, nationality, and social class (Kotler 2000, pp. 263 – 266; Rogers 2005, p. 19). Specifically the socio-economic factors such as the family income, educational attainment, and occupational status determines the capability of the Yamaha Indonesia’s target consumers to purchase Yamaha’s automatic motorcycle (Rogers 2005, p. 22). With regards to gender, male target consumers are expected to purchae Nouvo whereas female target consumers are more likely to purchase Yamaha’s Mio. The use of motorcycle is more convenient and practical means of transportation for both professionals and non-professionals. For young professionals, the use of automatic motorcycle could provide them a more relaxing ride on their way to their meetings. Women can also enjoy the same benefits when traveling to school, shopping centers, workplaces, friend’s home, or social venues (Goodwin and Huan 2006, p. 6). Since most female considers riding motorcycles as unsafe, the company should include in its advertisement the practice of safety measures such as the use of helmets and other related gadgets. Likewise, it is necessary on the part of Yamaha Indonesia to educate the young female target market regarding the differences in the engine classifications. Considering the continuously increasing demand for motorcycles and the economic condition of the country, Yamaha Indonesia’s marketing manager should carefully analyze the demographic variables of its target buyers since this will somehow enable the company to have a clear vision on what its target consumers are expecting from the company. In line with this, the company should consider the cultural background and motorcycle buying behavior of Indonesian population. As a muslim country, it is men who normally makes decision for their family members (Goodwin and Huan 2006, p. 6). For this reason, 87% of the total Indonesian motorcycle customers are male and only 13% are female (Goodwin and Huan 2006, p. 9). To enable Yamaha Indonesia increase the sales of its Mio, the company should find a strategic way on how the company could gradually make women riding motorcycle acceptable to the public. For instance: One of the best ways to counteract the wrong perception that riding a motorcycle could break young women’s hymen, the company should design a wide chair suitable and more comfortable for women’s use. It is also necessary for Yamaha Indonesia to make use of young influencial female in Indonesia as a model for Mio (See Table I – Market Segment of Nouvo and Mio on page 18). Since not all individuals above the age of 16 are currently employed and/or receiving a high salary from their jobs, there will always be the need for Yamaha Indonesia to continue manufacturing affordable automatic motorcycle to enable the company capture a large portion of its target market. In line with this, individuals who personally consider the use of motorcycle as a necessity and has a limited income are most likely to purchase the simpliest and cheapest automatic motorcycle Yamaha Indonesia is offering the market. Therefore, the company should be able to extend credit lines for its target consumers in order to attract more buyers to purchase Nouvo and Mio (Goodwin and Huan 2006, p. 9). Regardless of race, profession, educational attainment; nationality, religion and/or social class; the target consumer for Nouvo and Mio are young male and female Indonesians who are accustomed of riding motorcycle respectively. One of the major variable that could affect the purchasing behaviour of Yamaha Indonesia’s target consumer is related to each individual’s financial capability to purchase automatic motorcycle. Psychographics Segmentation When it comes to psychographic segmentation, Yamaha Indonesia’s marketing manager should examine its target buyers’ lifestyle, personality and values (Kotler 2000, pp. 266 – 267). Upon analyzing the case of Yamaha Indonesia, the lifestyle of its target buyers are socially active and outgoing young male and female motorcycle riders. Aside from having a positive attitude and buying behaviour on modern motorcycle technology, the personality of these individuals are expected to be price conscious, compulsive buying attitude, and are technology inclined. (See Table I – Market Segment of Nouvo and Mio on page 18) Geographic Segmentation Geographic segmentation basically enable Yamaha’s marketing managers to divide the target market based on geographic units such as the nations, states, regions, countries, cities, local government areas, or community area (Kotler 2000, p. 263; Rogers 2005, p. 24). Regardless of the metro size, Yamaha Indonesia’s Nouvo and Mio will be distributed throughout the five major islands and 33 different provinces. Depending on the monthly and annual sales performance in each region, Yamaha Indonesia’s sales and marketing manager is expected to conduct further market study in order to determine the rough estimated demand for Yamaha’s Nouvo and Mio within the urban, suburban or rural areas of Indonesia. (See Table I – Market Segment of Nouvo and Mio on page 19) Targeting and Positioning for Mio and Nouvo The 7 steps of product positioning suggested by Mullins et al. (2008, pp. 195 – 207) serves as a step-by-step guide on how marketing managers could successfully position the company’s product and services in its target market. This particular marketing guidelines inform the company’s marketing managers on how Yamaha Indonesia could effectively convert the available market information into useful data which will guide them to know more about the company’s target market. Product positioning is all about positioning the company’s product on the mind of the company’s target consumers (Myron and Truax 1996). In line with this, Yamaha Indonesia could effectively position Nouvo and Mio based on the products’ attributes, price and quality, product application, product users, considering its competitors’ product, price, and services, and as a solution (Mullins et al. 2008, p. 198; Myron and Truax, 1996). When it comes to the use of these variables, it is important to chose only one or two positioning methods since using more than two variables could only cause the company’s target consumers to be confused on what the company is trying to communicate with them with regards to a product (Mullins et al. 2008, p. 199). In general, marketing managers can develop a product positioning strategy based on the preferred combination of attributes to meet the expectations of the product end-users (Mullins et al. 2008, p. 203). Since the most common concerns of the average and lower market consumers are product quality and price, it is best to combine information related to the quality and other related product attributes with the importance of selling Nouvo and Mio at a reasonable market price in the case of Yamaha Indonesia. Considering the importance of selecting a few product positioning variables, Yamaha Indonesia should concentrate on positioning and targeting Nouvo as a better choice for men with higher income level who prefers stronger, tougher motorcycle image within the automatic motorcycle category whereas the marketing of Mio should focus on targeting women and positioning the product as the first brand and first choice of automatic motorcycle with feminine image particularly to younger riders and urban commuters (Goodwin and Huan 2006, p. 5). Targeting the young male and female motorcycle riders to patronize Yamaha’s Nouvo and Mio is a good strategy because of the strict traditional Muslim culture that goes around in Indonesia. Since the young individuals (Senior high students) are more inclined to try new things, it would be easier on the part of Yamaha Indonesia to consider this group of individuals as the company’s target consumers for Nouvo and Mio. Since it is highly recommended to position Nouvo and Mio based on price and product attributes, it is necessary to convince Yamaha Indonesia’s target consumers that the use of automatic motorcycle is practical, modern, and more convenient than the use of the manual motorcycle at a reasonable market price (Goodwin and Huan 2006, p. 5). When positioning Nouvo and Mio, it is important to write an effective positioning statement or value proposition to guide the company in terms of developing effective marketing strategy for these two automatic motorcycles (Mullins et al. 2008, pp. 206 – 207; Myron and Truax 1996). Yamaha Indonesia can use positioning statement like “Nouvo – A Tough and Powerful Bike for Men” and “The First Brand to Care About Women with Mio” accordingly (Goodwin and Huan 2006, p. 5). In general, changing these positioning statement could cause confusion on the company’s target audiences. As soon as the company has publicly announced these two positioning statement, Myron and Truax (1996) suggested that the company “should never change it unless there is a significant changes in the market condition”. The use of these positioning statement is crucial to the success of the company since these statements could enable Yamaha Indonesia effectively and emotionally communicate Nouvo and Mio with their target consumers. Likewise, establishing a positioning statement will enable the company to have a clear and better perception on how these two motorcycles will be percieved by its target market. Therefore, it would be easier for the company to create and maintain a competitive edge over similar products offered by its competitors (Myron and Truax, 1996). Yamaha Indonesia’s Consumer Behaviour Consumer behaviour of Yamaha Indonesia’s target consumers highly depends on how the company could satisfy the specific needs and wants of its target customers. Aside from the fact that having strong brand equity positively affects consumers’ buying behaviour (Yoo et al. 2000; Pitta and Katsanis 1995; Barwise 1993), developing effective marketing communication strategies for Yamaha Indonesia is equally important when it comes to developing a positive relationship between the company and its target consumers. Since organizational culture could significantly affect consumers’ behaviour (Lee and Carter 2005, p. 73), Hoegl and Gemuenden (2001) suggested the need to make full use of the available marketing communication tools in terms of developing a customer value. Since open communication plays an important role in a successful marketing communication, Yamaha Indonesia’s marketing managers should understand the basic structure of communication channel as well as the relevance of an effective communication style. Aside from the use of traditional marketing communication techniques such as the typical face-to-face communication or public relations (Fulk, Schmitz, and Steinfield 1990, pp. 117 – 140), Yamaha Indonesia’s marketing manager should consider integrating the traditional marketing communication strategies with modern ones particularly the use of the online marketing (Misloski 2005). This particular marketing communication tool will enable the company reach out for young individuals who are willing to try new and modern technology. Discussion Most of the marketing managers who are able to develop effective marketing management campaign believe that the key to increase the consumers’ choice in terms of consumption categories is highly dependent on the managers’ ability to: (1) analyze and interpret the market segmentation; (2) utilize the concept of marketing mix when positioning the company’s product and services in its chosen domestic and international markets; as well as (3) the ability of the managers to persuade its target consumers to purchase the company’s product and services with the use of marketing communication. With the use of these marketing tools, it would be easier for Yamaha Indonesia’s marketing manager to identify the product preferences of its target consumers. Aside from considering market segmentation as one of the best marketing strategies today, market segmentation is considered as a powerful marketing tool in terms of enabling Yamaha Indonesia innovate new automatic motorcycle designs, engine type and size, engine transmission and other added features based on the specific needs and wants of its target consumers. Based on information gathered with regards to Yamaha Indonesia’s target buyers, it would be so much easier on the part of the company to launch its Mio and re-launch its Nouvo to enable the company start capturing as much market share as possible. For this reason, the ability of Yamaha Indonesia’s marketing manager to accurately determine the specific needs and wants of their target consumers within each particular geographic region is important since this information will enable the company to have a competitive edge against Honda and Suzuki. Since product, price, promotion, and place (4 P’s) is inter-related with one another, Yamaha Indonesia’s marketing manager should carefully analyze each variable in relation to the other variables of the marketing mix. When necessary, marketing managers of Yamaha Indonesia could effectively increase the company’s profitability by creating product awareness. This can be done when the company directly addressed the need for product modification based on the product design and product classification as preferred by its target consumers. Likewise, determining the reasonable market price of its automatic motorcycles should also be considered when designing automatic motorcycles. Conclusion Huge business opportunity lies behind the ability of the company to convince the public to use automatic motorcycles more than the traditional manual motorcycles. For this reason, it is a challenge on the part of Yamaha Indonesia’s marketing manager to satisfy the specific needs and wants of its target customers. The target consumer for Nouvo and Mio are young male and female Indonesians who are accustomed of riding motorcycle respectively. To be able to effectively convince more people to purchase Nouvo and Mio, the marketing managers should be familiar with the basic marketing concepts and its functions in order to accurately identify the product preferences of its target consumers in terms of the product quality, design, market price, and services offered by the company. Since there is no single marketing concept that could make marketing managers meet the specific demand of its target buyers, marketing managers should make use of several marketing theories and concepts in order to achieve a better marketing result. Conducting market segmentation enables the company to learn more about the specific needs and preferences of its target consumers whereas product positioning is one of the most important marketing concepts that will enable Beti to effectively capture the interest and attention of its target consumers. Since market positioning is one of the secret behind the success of a business, Yamaha Indonesia should position accurately position Nouvo and Mio as a preferred choice for automatic motorcycles accordingly. By effectively positioning Yamaha Indonesia’s Nouvo and Mio within the domestic motorcycle industry, the company will be able to attract the attention of its target consumers. Eventually, getting Yamaha Indonesia’s target consumers to patronize these products will increase the company’s profitability and share in the local market. Recommended Solutions The marketing manager of Yamaha Indonesia should conduct a qualitative online research study and/or a one-on-one interview with its target consumers in order to learn more about the product preferences of the company’s target consumers (Mullins et al. 2008, p. 199; (Lee and Carter 2005, pp. 467 – 468). In line with this, the use of quantitative and qualitative survey result will enable the marketing managers develop effective marketing strategic plan that could satisfy the specific needs and wants of its target consumers. *** End *** References Barwise, P. T. (1993). Brand Equity: Snark or Boojum? International Journal of Research in Marketing , Vol. 10, pp. 93 - 104. BBC News. (2009, July 3). Retrieved June 14, 2010, from Owen completes switch to Man Utd: http://news.bbc.co.uk/sport2/hi/football/teams/m/man_utd/8131801.stm. Fulk, J., Schmitz, J., and Steinfield, C. (1990). A Social Influence Model of Technology Use’ in ‘Organizations and Communication Technology’ (Eds) Janet Fulk and Charles Steinfield. Sage. Goodwin, N., and Huan, H. D. (2006). Yamaha Indonesia (A): Positioning and Launching Automatic Motorcycles in Indonesia. Richard Ivey School of Business. Hoegl, M., and Gemuenden, H. (2001). Teamwork Quality and the Success of Innovative Projects: A Theoretical Concept and Empirical Evidence. Organization Science , Vol. 12, No. 4, pp. 435 - 450. Kotler, P. (2000). Marketing Management - International Edition - The Millennium Edition. Upper Saddle River, New Jersey: Prentice Hall International, Inc. Lee, K., and Carter, S. (2005). Global Marketing Management. Oxford University Press. Misloski, W. (2005). Marketing's Neo-Reneissance: An Opportunity for Tomorrow's Multi-Channel Integrated Marketer. Journal of Integrated Marketing Communications , pp. 17 - 25. Mullins, J. W., Walker, O. C., and Boyd, J. (2008). Marketing Management: A Strategic Decision-Making Approach. 6th Ed. McGraw Hill. Myron, M. R., and Truax, P. L. (1996, November 8). Denver Business Journal. Retrieved June 14, 2010, from Marketing for Small Business: Product's Positioning Vital to Getting Noticed: http://denver.bizjournals.com/denver/stories/1996/11/11/smallb6.html. Pitta, D. A., and Katsanis, L. P. (1995). Understanding Brand Equity for Successful Brand Extension. Journal of Consumer Marketing , Vol. 12, No. 4, pp. 51 - 64. Rogers, E. (2005). Learner's Resource: Certificate IV in Business (Marketing) Profile the Market. Melbourne: Australian Training Products Ltd. Yoo, B., Donthu, N., and Lee, S. (2000). An examination of Selected Marketing Mix Elements and Brand Equity. Journal of the Academy of Marketing Science , Vol. 28, No. 2, pp. 195 - 211. Read More