Strategic Marketing Plan for "The Revival of Ambassador"

1. VIGNANA JYOTHI INSTITUTE OF MANAGEMENT
HYDERABAD
THE REVIVAL OF AMBASSADOR
HINDUSTAN MOTORS
SUBMITTED BY:
YASHMIN REVAWALA
143236

2. I
EXECUTIVE SUMMARY
The Ambassador was the first car to be made in India based on Britain’s Morris Oxford series of
cars by the Morris Motors. It was once a status symbol but it began losing its dominance in the
mid-1980s when Maruti Suzuki introduced its low-priced 800cc hatchback. In the fiscal year
ending March 2014, the company sold only 2,200 cars out of the 1.8 million cars sold in India that
year. Despite the fact that it had over 70% market share at a time, how did they lose their grip and
slip to a mere 0.12% market share?
It is important to understand the downfall of ambassador cars from once being the most lovable
passenger car to a taxi. The main objective of this report is to make strategic marketing plan for
reviving the old ambassador car once again into the minds of people.
The most relevant thing to carry out will be the segmentation of the population and based on it
selecting the target customers. The old ambassador and its new version i.e. AMBY will target
different customers based on the age differences. The USP of Ambassador cars have been its low
cost of ownership, sturdy build, large boot and cabin space and it will continued to have this USP
for the people who admires the previous built ambassadors.
The pricing of the all new ambassador have slightly increased by 2.33% and that of AMBY have
been priced at Rs.6,50,000 which is very affordable when compared to the pricing of its peers.
The promotion of all new ambassador will be a nostalgic approach to bring people close to their
past. Whereas the AMBY will be placed in a completely different way when compared to its other
models. The means which will be used for promotion activities will be television ads, press releases
and online advertising, advertising through mobile applications, events and trade shows.
The distribution and supply chain for ambassador and AMBY will be fully centralized and
integrated which will be supporting in carrying the needs of different customers with personal
attention. To cater to different needs of different customers, it is important to have specialization
in key areas for meeting the needs of the customers and to fulfill these gap it is necessary to partner
with company experienced in providing customized services to the customers. The company which
is identified for partnering is DC Design, a company which has already worked on the old model
of ambassador and thus they have idea of how to go about the customization. They can also identify
the feasibility of a new idea of the customers and respond to the customer quicker, thus maintaining
the USP of the company.
Based on the need of the company for higher promotional activities, highest budget is allocated to
SDA activities which in return will increase the brand equity of the company. The increase in

3. II
brand equity will benefit the company in term of sales and revenue and will also increase the
assurance level of the products of the company which will also support in increasing the future
value of the company.
According to the forecasting of the revenue and expenses, the company will start earning profits
from year 2017. It will also have an annual increase in revenue by 10%.

4. III
TABLE OF CONTENTS
EXECUTIVE SUMMARY ...........................................................................................................................I
INTRODUCTION ........................................................................................................................................1
TARGET CUSTOMERS..............................................................................................................................1
UNIQUE SELLING PROPOSITION (USP)................................................................................................2
PRICING STRATEGIES..............................................................................................................................2
POSITIONING & PROMOTIONS STRATEGIES .....................................................................................3
MARKETING MATERIAL.........................................................................................................................4
ONLINE MARKETING STRATEGIES......................................................................................................4
DISTRIBUTION & SUPPLY CHAIN STRATEGY ...................................................................................6
CONVERSION STRATEGIES....................................................................................................................7
JOINT VENTURES & PARTNERSHIPS ...................................................................................................7
REFERRAL STRATEGIES .........................................................................................................................8
STRATEGY FOR INCREASING TRANSACTION PRICES ....................................................................9
RETENTION STRATEGIES .....................................................................................................................10
FINANCIAL PROJECTIONS....................................................................................................................11
BIBILOGRAPHY.......................................................................................................................................12
APPENDIX.....................................................................................................................................................

5. 1
INTRODUCTION
The Ambassador was the first car to be made in India based on Britain’s Morris Oxford series of
cars by the Morris Motors. It was once a status symbol but it began losing its dominance in the
mid-1980s when Maruti Suzuki introduced its low-priced 800cc hatchback. It lost further cachet
and market share when global automakers began setting up shop in India in the mid-1990s, offering
models with contemporary designs and technology. The Ambassador has remained the choice of
a dwindling share of bureaucrats and politicians, usually in white with a red beacon on top and a
chauffeur at the wheel.
In the fiscal year ending March 2014, the company sold only 2,200 cars out of the 1.8 million cars
sold in India that year. Despite the fact that it had over 70% market share at a time, how did they
lose their grip and slip to a mere 0.12% market share? Well, this is not the right question to be
asked instead how can it be revived again and get its market share back is the question which is to
be brainstormed.
TARGET CUSTOMERS
The target customers for ambassador car is divided into two categories i.e. people below 35 years
of age and people above 35 years of age.
The traditional designed ambassador car will target the people above the age of 35 years on the
basis of nostalgia.
The all new old aerodynamic design of ambassador will target the new generation i.e. the people
between the ages of 25-35 years.
1.28
Billion
• Total Population of India
663
Million
• Total Male Population in India
99.45
Million
• Total Male Population between the age of
25-35years i.e. 14.24%
232
Million
• Total Male Population above the age of 35
years i.e 34.99%

6. 2
UNIQUE SELLING PROPOSITION (USP)
The USP of Ambassador cars have been its low cost of ownership, sturdy build, large boot and
cabin space and will be continued to have this USP for the people who admires the previous built
ambassadors.
But to revive the ambassador cars it is also necessary to change its USP according to the
environment. The all new modern ambassadors will have the USP of sturdy build and space
along with the modern touch of technology and engineering craftsmanship.
First Indian car for first person and the people of India but this time with more power, more
style, more space and more yours.
PRICING STRATEGIES
The ambassador currently is available in Indian market starting with a price tag of Rs.5,21,000.
Out of which 50% i.e. Rs.2,60,500 is cost of manufacturing, 23.5% is selling expenses and the rest
26.5% is the production and corporate overhead including the profit of 2.5%.
For reviving the brand equity of ambassador, it is necessary to improve the engine performance,
design (aerodynamics) and also the interior of the car. It will be difficult to improve the car by
keeping the same price tag even after decreasing the profit associated with it.
The repositioning of the car will also impact the pricing of the car and thus the price of the car will
increase as compared to the previous pricing. But this shouldn’t been problem as the refined
engine, new design and the all new feature will contribute to the increase in price.
The price of all new ambassador will be Rs.5,33,125 (Ex-showroom price). The distribution of
different prices have been shown in the TABLE 1 (Appendix).
Similarly the price of AMBY i.e. Ambassador Version.02 will be Rs.6,50,000 (Ex-showroom
price). For distribution of different prices see TABLE 1 (Appendix)

7. 3
POSITIONING & PROMOTIONS STRATEGIES
All new Ambassador:
The target customers for the all new ambassador will be the people above the age of 25 years. But
the positioning of the ambassador will be different for the people between the ages of 25-35 years
to that of people above the age of 35 years.
 For the people between the ages of 25-35 years, the ambassador will be positioned as “THE
OLD IS NEW OLD” i.e. the old ambassador is not the same old ambassador but it still is
the old ambassador.
 For the people above the age of 35 years, the ambassador will be place as “THE KING OF
INDIAN ROAD IS BACK” i.e. the old admirable ambassador is back to rule the Indian
roads with the old memories. For this segment the positioning will be fully based on the
nostalgia.
The promotions strategy is successful only if it is able to communicate the message to the targeted
customer through different modes.
 For the all new ambassador, the modes of promotion will be television ads, press releases
and online advertising.
AMBY:
The target customers for AMBY will be the people below the age of 45 years and thus it is
important to make these customers feel the connection with AMBY.
The AMBY will be positioned in the minds of customers as “BOYS RIDE CARS BUT A MAN
RIDES MACHINES”
The promotional means to target these customers needs to be a modern and thus apart from the
means like television ads, press releases and online advertising, the advertising through mobile
applications, events and trade shows will also be used.

8. 4
MARKETING MATERIAL
Marketing material plays crucial role in branding the company, thus it is also essential for reviving
the ambassador. The different marketing material which have been used for branding are corporate
identity package, Website and Banners.
Expect the website which is also not very attractive and updated, other marketing material are
generally used by every company and thus it is important to upgrade them.
The website is the first marketing material which will be updated and upgraded which will act as
the primary material for branding. The blogs, direct mail and kiosk will also be used as the
marketing material for branding the ambassador in this era of internet.
ONLINE MARKETING STRATEGIES
Figure 1: Online Marketing Strategies
In today era of internet, if the marketing is not done online than a huge opportunity is missed. To
cater to the needs of customer as well as to position the ambassador in the mind of customer it is
essential to do online marketing.
ONLINE
MARKETING
STRATEGY
Search
Engine
Optimization
Social Media
Marketing
Traffic
Building
Blogging
Online
Advertising
Search
Engine
Marketing
Mobile
Application
Marketing
Email
Marketing

9. 5
1. Search Engine Optimization:
SEO is the most famous online marketing strategy used which will be basically
used for maximizing the number of visitors to website by ensuring that the site
appears high on the list of results returned by a search engine.
2. Social Media Marketing:
In this marketing strategy, the social media sites like Facebook, LinkedIn, twitter,
video sites like YouTube etc. will be used for advertisement and promotions.
3. Online Advertising:
Advertising on the popular relevant site which are connected to the automobile like
cardekho.com, carwale.com etc. will give greater exposer to the advertisement.
4. Mobile Application Marketing:
Marketing through mobile application will give greater penetration into the market
as 140 million people in India have smart phones which will make it the most
effective means of marketing.
5. Email Marketing:
Marketing through email has been in used for past few years and with increase in
the penetration of internet and increase in the number of smartphone users it make
sense to market through emails.

10. 6
DISTRIBUTION & SUPPLY CHAIN STRATEGY
Figure 2: Supply Chain for Hindustan Motors
The supply chain for ambassador starts once the order is given by the customer till the product is
delivered to the customer.
Once the order is placed by the customer through dealer or directly through online, a centralized
system will record all the order and forward the order to purchase department as well as to the
manufacturing unit i.e. factory. When the orders are received by the purchase department it
monitors the availability of the materials required for manufacturing and if the materials are not
enough it will place a purchase order to the supplier. The order received at the factory is schedule
and a delivery time of the product is sent back to the centralized system for intimating the delivery
period of the product to the customers.
The scheduling and sequencing of the order is carried out in the factory and finally the product is
manufactured. As the order is placed by the purchase department when the inventory of material
or parts decreases to certain level, is arrived at the factory and thus the manufacturing of the
product continues. Once the product is ready it is transported to dealers or to warehouses.
If the customer has placed an order for customized product the semi-finished good is transported
to the customize center where the product is customized according to the requirement of the
customers. The product is than pass on to the customer directly or through dealers.

11. 7
CONVERSION STRATEGIES
Conversion marketing refers to tactics that encourage customers to take specific action, like
“converting” a person browsing the website into a purchaser of the product or service.
The different conversion strategies which will be used are:
1. Mapping the sales process
Creating a process which maps the step by step processes required to convert the
enquiries into sales. It will also tracks the actions taken to prepare for each sale;
how to overcome concerns; build trust; understand the buyer’s goals, needs and
wants; creating certainty that the product or service meets their needs; overcome
their fear of making the wrong decision; officially confirm the sale and seeing that
the buyer is truly satisfied.
2. Increasing sales skills
One of the most immediate ways of leveraging the business is to continuously train
the entire staff in non-manipulative, strategic selling principles, methods and
understandings. Effective selling is not just a matter of learning a sales spiel or
having the gift of the gab. The finest sales people in the world are helpful, not
pushy. They believe in their product and make meaningful recommendations and
suggestions based on their personal experience of what actually works. They
provide the buyer with the information they need to make an informed decision and
they know how and when to ask for the order! By training everyone in these skills,
we can the massive compounding impact on the sales.
JOINT VENTURES & PARTNERSHIPS
In order to provide the customer the option of customization of the
car, it is necessary that the promise is made and the quality of the
product also remains the same.
It is difficult to cater to the different needs of different customers and still maintain the economy
of scale. If the needs of the customers are limited to some extent it can be archived through mass
customization but in this case the customer is given full liberty of customizing their can along with
the assurance of quality.
For this the company needs to partner with a well-known and reliable company like DC Design.
The partnership will benefit both the companies i.e. HM will be benefited the intellectual

12. 8
properties of the company whereas DC Design will get a chance to expand into the Indian
automobile market.
The main reason for choosing DC Design for partnership is that the company has already worked
on the old model of ambassador and thus they have idea of how to go about the customization.
They can also identify the feasibility of a new idea of the customers and respond to the customer
quicker, thus maintaining the USP of the company.
REFERRAL STRATEGIES
Referral marketing is spreading the word about a product or service through a business existing
customers, rather than traditional advertising.
The referral marketing strategy for ambassador can be:
1. Online Video Referral:
People are watching and sharing online video content at an increasing rate. Thus
simply providing Internet users with video content will allow them to organically
share the brand messages across their networks.
One of the greatest advantages of online video is its shareability. If we create
quality, entertaining content, people will want to share it with friends and family.
This simple act of sharing becomes an indirect referral for the brand or product.
Online video referral is really an optimal solution for increasing referrals.
2. Referral Rewards Program:
According to The New York Times, 65% of new business comes from referrals and
Nielsen reports that people are four times more likely to buy when referred by a
friend. So why not reward the existing customer base for referring friends and
family?
The reward program under this strategy will give a free service to the customer for
referring to a friend, relatives or family members which in return will not be bigger
numbers in cost.

13. 9
STRATEGY FOR INCREASING TRANSACTION PRICES
Growing the business by increasing the number of clients alone, is the most expensive, demanding
and time consuming option available. The cost of selling the customer more is inconsequential in
comparison.
Increasing both the number of clients and the average amount each client spends on each
transaction they do, we can increase the transaction price using the following strategies:
1. Up-selling & Cross selling:
Offering extra value or a better deal right at the point of sale, when the customers
are at their most receptive, is one of the easiest and most effective ways of instantly
improving the size and profitability of the sales. Up-selling is getting the customers
to buy a better, more expensive or more sophisticated product that genuinely adds
value to their transaction. For instance, we will offer an accessories package along
with the ambassador in order to give more feature to the customers.
Cross-selling is getting the customers to buy an additional product or service that
will give them a superior outcome like extended warranty package, break down
pick-ups etc. If we make a worthwhile offer to our customers, 30-50% will normally
say yes and virtually every penny of the extra profit goes right to the bottom line
because it requires no more time and effort and there is no additional cost of sale to
reach the customer.
2. Bundling the products:
Product bundling is when two or more products are combined as a salable package.
In our case, the bundling of the product can be based on the demand of the
customers.
For example: If most of the customers coming for purchasing the ambassador, they
look for tires of a specific company. From this we can identify the wants of the
customers and provide them with a bundle package which will cost them less as
compared to the individual product, adding value to the customers and also to the
company in term of increase in sales.

14. 10
RETENTION STRATEGIES
Customer Retention Strategy
There are many strategies which can be used for customer retention but the best strategy and the
easiest one is to grow the customers is not to lose them. To maintain the existing customers and to
attract new customer following strategies will be used.
1. Reducing Attrition:
It is important to make the customers feel the connection with the company. This
in order will help the customers as well the company to serve the customers better
and will also help in improving the services. It will also be on the company’s part
to identify the needs and wants of the customers and address to the complaint
received quickly in order to maintain the relation with the customers.
In automobile industry, it is crucial to understand that the after sales services is
what the customers gives 2nd
priority and thus our understanding of this priority
will help as in reducing the attrition of the customers.
2. Bring back the lost sheep:
There’s little point in dedicating massive resources to generating new customers
when 25-60% of the dormant customers will be receptive to our attempts to
regenerate their business if you approach them the right way, with the right offer.
Reactivating customers who already know us and our product is one of the easiest,
quickest ways to increase your revenues. Re-contacting and reminding them of our
existence, finding out why they’re no longer buying, overcoming their objections
and demonstrating that we still value and respect them will usually result in a
tremendous bounty of sales and drastically increased revenues and will also lead to
some of the best and most loyal customers.
3. Extraordinary Customer Service
The never-ending pursuit of excellence to keep customers so satisfied that they tell
others how well they were treated when doing business with us. Moving the product
or service we deliver into the realm of the extraordinary by delivering higher than
expected levels of service to each and every customer.
Key facets include: dedication to customer satisfaction by every employee;
providing immediate response; going above and beyond the call of duty; consistent
on-time delivery; delivering what we promise before AND after the sale; a zero-
defects and error-free-delivery process and recruiting outstanding people to deliver
our customer service. Extraordinary service builds fortunes in repeat customers,
whereas poor service will drive the customers to the competitors.

15. 11
FINANCIAL PROJECTIONS
The financial projection of Hindustan Motors from 2015 to 2020 is shown below.
Table 1: Financial Projections from FY 2015-2020
INCOME STATEMENT OF HINDUSTAN MOTORS
In Rs. Cr.
2015-2016 2016-2017E 2017-2018E 2018-2019E 2019-2020E
Income 236.6 260.3 286.3 314.9 346.4
Expenses:
Cost of Raw material &
components consumed
90.5 99.6 109.5 120.5 132.5
Finance Cost 18.3 19.2 20.2 21.2 22.2
Employee Benefit Expenses 46.2 48.5 50.9 53.5 56.2
Depreciation & Amortization
Expense
10.8 11.3 11.9 12.5 13.1
Selling, distribution &
Administration Expense
118.3 85.0 80.0 81.4 85.5
Total Expenses 284.1 263.6 272.5 289.0 309.5
Profit -47.50 -3.34 13.78 25.91 36.93
 Hindustan Motors already owns a factory in Uttarpara, West Bengal which is now
shutdown but when looking from the financial perspective it reduces the initial investment
required for setting up a new business. It also reduces the fixed cost which in return will
help in faster breakeven.
 In the FY 2015-2016, the SDA expenses are the highest which indicates that the company
will be aggressive in promoting itself which will in return improve branding of the
company.
 Initially the company will manufacture only 2000 ambassadors and 2000 AMBY and will
gradually increase the production as the demand increases.
 From the projection of the company’s sales and profit making ability, it will have a positive
profit in the FY 2017-2018.

16. 12
BIBILOGRAPHY
Primary Sources:
Santanu Banerjee, Telephonic Interview, August 8, 2015
Secondary Sources:
Web Sites:
 http://www.hindmotor.com/
 www.capitalline.in
 http://marketingwizdom.com/
 http://wheniwork.com/

17. APPENDIX
TABLE 1
PRICING STRATEGY
Cost Category Cost Contributor
Old Ambassador
All New
Ambassador
AMBY
Share
(%)
Amount
(Rs.)
Share
(%)
Amount
(Rs.)
Share
(%)
Amount
(Rs.)
Vehicle
Manufacturing
Cost of Manufacture 50 260500 46.9 250000 50.0 325000
Production
Overhead
Warranty 5 26050 4.7 25000 4.6 30000
R&D/Engineering 6.5 33865 6.6 35000 7.7 50000
Depreciation and
Amortization
5.5 28655 5.4 28655 4.4 28655
Corporate
Overhead
Corporate Overhead,
Retirement and
Health
7 36470 6.8 36470 5.6 36470
Selling
Distribution,
Marketing, Dealer
Support, and Dealer
Discount
23.5 122435 28.1 150000 26.2 170000
Sum of Costs 97.5 507975 98.5 525125 98.5 640125
Margin 2.5 13025 1.5 8000 1.5 9875
Price 100 521000 100 533125 100 650000