2. Daewoo Motors
D A E W O O I S G O O D AT M A K I N G C A R S , B U T
R O T T E N AT M A R K E T I N G T H E M .
- A N A U T O M O B I L E I N D U S T R Y A N A LY S T, 2 0 0 0

3. Contents
 Background of the Company
 Daewoo Overseas
 Models
 Strategies
 Segmentation & Positioning
 Distribution Channel
 Promotional Activities
 Reasons for Failure
 The Bad Part
 Graph
 Market Share
 SWOT Analysis
 Marketing Mix
 Our Recommendations

4. Background to the Company
 Founded in 1967 in Korea it was a part of Daewoo group
 In 2001 had its operations in 123 countries
 Basically a company which exported readymade garments
to US
 Later diversified into trading, construction, automotive,
etc
 Automotive became one the most important ventures
 In 1977 entered into joint venture with General motors but
conflicts arouse

5. Daewoo Overseas
 In 1991 Daewoo bought out 50% stake in the venture for 50
billion
 Faced tough competition in European and US market it looked
to diversify it into eastern Europe, Latin America and Asia
 Took over 50% equity held by Japans' Toyota in DCM-
TOYOTA
 Renamed it as Daewoo motors India ltd
 Overseas investment on borrowed funds
 In 2000, co’s labor union refused to accept a restructuring plan
for the company
 Daewoo was declared bankrupt

6. Models

7. Strategies
 They borrowed foreign debts for further expansion
 Introduced the concept of direct selling
 Price competitiveness and attractive servicing and
warranty offers gave rise to good demand in the
international market.
 They also introduced heavy discount to attract global
customers
 Entered the small car segment to attract more customers
with Matiz.

8. Segmentation & Positioning
 Did not consider itself worthy to challenge Maruti in small car
segment
 There were not enough players in the mid-size segment, Daewoo
thought that it would stand a fair chance in capturing this
segment.
 Daewoo found the mid size market more alluring.
 Daewoo could not visualize that the small sized segment would
grow at a faster pace than the segment it decided to enter in.
 The mid-sized segment got crowded with players like Opel,
Maruti, Honda and Daewoo itself.

9. Distribution Channel
 Introduced the concept of direct selling
 It has around 110 dealers all over india.
 Over 100 Authorized Service Centers to cover the entire country.
 Appointed 14 exclusive LCV dealers across the country to take
care of sales and service requirements.

10. Promotional Activities
 In 1995 Daewoo came up with Diwali bonanza scheme
 Reduced the finance rates to 14.33%
 Discount of 10% was given
 Test drive scheme in April 1997
 VAL-YOU Campaign

11. Reasons for failure
 Positioning was hit by the stiff competitors.
 Daewoo's dealers began offering discounts & became a discount
brand.
 Its Marketshare in the mid-size segment came down from a high
of 29 per cent in 1996-97 to 13 percent in 1998-99.
 Daewoo's had created a “perception problem”.
 Lack of Vision and proper market survey.
 Took huge debts to expand the automobile business.
 Did not react to customer complaints
 Tried to tackle this problem through its sales staff but they were
also not properly trained

12. The Bad Part
 70000 customers cancelled there booking
 Predicted an annual turnover of 10 billion and 20000 cars but
managed 6.05 billion and 9044 cars.
 Feb 1998, 9006 cars were sold again a decline of 41%
 Next year reduced by 50 %
 Recorded a loss of 351.4 million in 6 months as sales also
declined to 1.22 billion from 2.7
 It is not necessary that tried and trusted formula in one country
will work in every country.

13. Graph

14. Market Share

15. Where Was Daewoo ?????
Dumped Without A Funeral Ceremony

16. SWOT ANALYSIS
STRENGTHS WEAKNESSES
•Strong brand portfolio •Huge debts
•Huge market share •Aggressive expansion
•Quality products •No training to sales staff
•Technology potential •Lack of proper marketing
•State of art plant strategies
•Huge discounts
OPPORTUNITIES THREATS
•Few players in mid-size segment •Well established competitors
•Regional Tie Ups •Fluctuation in price of fuel and raw
•Tapping untapped market materials
•Government policies

17. Our recommendations
MARKETING MIX
BRAND IMAGE/CUSTOMER SATISFACTION
SEGMENTATION
DISTRIBUTION CHANNEL
PRICING

18. MARKETING MIX
 PRODUCT
 Provide services using innovative techniques and modern technologies
with a friendly and gentle environment.
 PLACE
 Make sure that service is available throughout the country at all
locations.
 PROMOTION
 Effective marketing remains the hallmark
 Involved in supplying services with a great emphasis on effective long-
term strategies.
 Services should be promoted through out the country.
 Consistent and balanced growth, despite adverse market conditions.
 Enjoy an extremely high degree of recognition and reliability,
 Leadership positions for most of its services.
 PRICE
 The company may find it desirable to initiate either a price cut or a price
increase.
 It must anticipate possible customers and competitor reactions.

19. Brand Image/Customer Satisfaction
 What is Brand Image?
 Rebuilding the Image.(Add Emotional Value)
 Creating the Buzz.
 Specialised technical Support Team.
 Customisation of Cars.
 Get the People Involved.(Your Company Your Car).
 Proposed Name Phoenix- Rise From Ashes.

20. Segmentation
 What is Segmentation?
 Targeting Youth & working Class.
 Primary Targets should Be the Metro Cities.
 Cautious & One Step Approach.

21. Distribution Channel Pricing
 Localisation  Prove –not a Price Tag.
 Small – 3 to 4 Lacs
 Short and Effective  Sedan – 4.2 to 5 Lacs.
 Attract Dealership

22. Any Questions????
Thank you