Micro Autos Ltd of Sri Lanka

1. 0 Introduction

Micro Vehicles Ltd was proven in Sri Lanka in 1999 by the information of Chairman/CEO of Micro Automobiles Ltd Dr. Lawrence Perera with the objective of introducing (manufacturing) low cost but high quality vehicles for the county. The motive became reality with the unveiling of the first car in 2003 that was well recognize and accepted by the world due to a lot of hard efforts on Research & Development that put-in over many years to make the company dream certainty and in the later stages Micro Vehicles Ltd located as National Car Manufacturer where they acquired the patent for small city autos too.

Further with the purpose of growing and growing the firms, Micro Autos Ltd developed different type of attractive vehicles which some are strictly produced in Sri Lanka among others which are constructed in Sri Lanka with the same purpose that they had earlier, which is processing low priced but high quality vehicles for the region. So when looking at the types of the vehicles which Micro presented Tractors, Pickup trucks, Light Trucks, Buses, MPVs, SUVs and Cars can be viewed as. Out of those product types the SUV section was the really attracted section by the almost all of the individuals in Sri Lanka where in fact the Micro Rexton II was popular product for the reason that SUV segment where it created hazard for other average SUV's in the market because of its less price (but high quality) compared with the other SUV's that produced by the primary SUV makers on the globe like Mitsubishi, Hyundai etc.

Further the government of Sri Lanka also gave great support to this company as it is a solely Sri Lankan business and government in a position to buy more vehicles from Micro Vehicles Ltd for authorities needs looked after resulted in increasing the profits of Micro Automobiles Ltd. As the demand rises for the Micro Rexton II they increased their creation to complement with the demand and also with the goal of getting into the Asian markets. For the they broaden their workshop areas and recruited more employees and let the employees focus on transfer basis like one set in place of individuals on day and the other set in place during the night.

So with the thought of the prior background or the milestones of the Micro Cars Ltd, the company it self able to consider on extending their business to Singapore by exporting the Micro Rexton II with the purpose of targeting it to the middle-upper category in the Singapore scheduled to numerous potential factors in relation to the conditions of Singapore and also with the expectation of fighting with other average SUV in Singapore because of the less price of the Micro Rexton II.

Therefore in order to determine the viability of exporting Micro Rexton II to Singapore a marketing audit will be bears out where it can help to get a concept about the various market conditions in the competitive market and its own potentials where it give clear view about both positive and negative aspects like whether it'll be survive or not. So after that, Micro Vehicles Ltd can decide whether to develop to Singapore or not.

Furthermore it also essential to perform Marketing Plan where it support to beat the negatives that happened in the marketing audit for the purpose of maximizing revenue with the including some areas like promotional mixture, budgets, revenue/loss statement and etc.

2. 0 The Product

Micro Automobiles Ltd is the only real pure Sri Lankan vehicle company in Sri Lanka that goes on continues improvement from the day it begins with increasing of its gains while making the general public more gratify by offering certifiable solutions to the touring needs of most middle-upper category Sri Lankans. With their success in the Sri Lankan market their next plan is to enter the Singapore car market by offering their most strike product in their record Micro Rexton II.

Actually before the name Rexton was origin from SsangYong Motors in Korea and later they made strategic alliance with capital investment of Mercedes-Benz AG to aid Engine & Transmission technologies.

When enough time goes on Ssang Yong SUV were introduce directly to Sri Lankan from Korea by Ssang Yong Motors as Ssang Yong Rexton which is the more aged version without any collaboration with a Sri Lankan opportunity. Anyway the older version was not very much popular and it was failed in Sri Lanka credited to some uncontrollable factors such as customer attitude that having on the Korean vehicles. But later Micro Vehicles Ltd made joint-hands with the Ssang Yong Motors Korea for the release of the Rexton II (newly version of Rexton) which was set up locally in Micro Cars Ltd workshop.

In regards to the level of the merchandise life routine of the Micro Rexton II, it is growth level in Sri Lanka. But when considering on the problem in Singapore the other SUV already on the market are in the maturity level. So therefore of that this is a good advantage for Micro Automobiles Ltd to enter into the Singapore market to change the current stage of PLC.

2. 1 Measure the product as an development as it is identified by the planned market

Basically this is the first-time that the Micro Automobiles Ltd is expanding their businesses out of their boundaries. No matter whether Micro was making huge income in the local market, but it can get negatively effected in overseas markets as the conditions won't be the same as locally this means your competition getting change from country to country. So that it can be high-risk up-to some degree due to the huge competition that getting to this newly product from major SUV automakers of the world.

With regard to the relative good thing about the Micro Rexton II over the other competitors, the SUV users can perceive the same advantages, benefits and features that available in other average SUVs in the Micro Rexton II as well. But everything aren't for high price like other competition brands but at fair price which is lower than the competitive SUVs. Also considering on the gas consumptions with other brands Micro Rexton II is more fuel efficient SUV with Diesel engine motor. But almost all of other SUVs are not in much gas efficient as those are with Petrol engines. (Other competitive SUVs can be purchased in Diesel motors too, but price is even higher than the typical petrol SUV prices. ) The unique design will give more prestigious outlook for the automobile than other brands do.

Also it's more suitable to the Asians and their beliefs as most of Asians choose their own country created vehicles or vehicles that manufactures of their region.

In relation to the complexity, there's no requirement to have special skills to operate a vehicle Micro Rexton II as it's the same way of generating other SUVs.

Further there's another benefit which is the Micro Rexton II can be purchased with minimum risk as it is recognize and certified SUV in Asia.

The observability of the product is high. Because you don't need to instruct to feel or go through the great things about the SUV. One you inside in it, that's all you need and you may have the difference of easy driving.

2. 2 Major problems and resistances to product acceptance predicated on the preceding analysis.

  • Relative advantage - Quality and the condition of the Micro Rexton II is in competitive position weighed against other competitive SUVs. But the price of it is lower than the other competitive brands.
  • Compatibility - Micro Rexton II is really compatible to the Singapore and with Asian atmosphere as the SUV is from the same region.
  • Complexity - Actually it's the same way that people have to follow to work with (drive) the Rexton II and there no any special skills required as it super easy to drive with automatic transmission.
  • Trialability - Basically this can be purchases with lowest economic risk in relation to the other brand and also the market value or the used value reaches satisfactory range.
  • Observability - actually you don't have to be educating to feel the top features of the Rexton II. Because once you got involved with it, then you can feel it automatically.

3. 0 The Market

3. 1. 1 Geographical regions

Singapore is among the finest well-developed country in the world as well as in your community with well supervised stable overall economy. It included in Malaysia in one side and Indonesia from the other area where 50% lands are assumed as cities while the remaining part have reserved for plantations and other purposes. Individuals who live their also experiencing good standard life with majority of satisfactory income.

3. 1. 2 Forms of vehicles and communication available for the reason that region

Transportation

Transportation is one of the primary component for every single and every country no matter whether it is non-developed, expanding or developed country. Because it is rather important aspect for those countries to move from spot to another or even to send some stuff from one location to another and it will be function of quick access to seperate location where which links boundaries. Considering the conditions of Singapore with regards to the transportation aspects it's the county that own one of the rich transportation systems in your community. As a result of that, the people from all around the world use Singapore as an easy gain access to place and where in addition they use Singapore as transit place.

The types of travelling that available in Singapore the following.

Road transportation

Actually the on-ground transport or the road transportation is the most frequent cheapest mode travel method that available all around the world even in the indegent countries as well.

But in relation to the problem in Singapore this common method is using in very progress manner where they own some expressways that size 150 Km and other A-class highways. Quite simply these 3262 Km's are linking the Singapore from all around. All the busses, cars including taxies and other surface vehicles are surely got to utilize this method.

Rail Transport

Mainly the rail transport in Singapore can be categorized into two segments such as Mass swift transit (MRT) and Light rail transit (LRT) which totally consist of 138. 2 Km. The mass fast transit (MRT) happens to be working as four line travel system with total amount of 118. 6 Kilometres with the collection of 70 stations. Further the remaining light rail transit (LRT) is having 14 stations with length of 19. 6 Kilometres.

Ports and Harbors

There are totally 8 plug-ins in Singapore and most of the jacks which is 7 plug-ins are managing by the PSA International which previously names as Interface of Singapore Power. Further Singapore is well has learned for worlds busiest port "Jurong" which dealt with 1. 04 billion tons per season. (Appendix 2)

Air Transportation

In relation to aviation industry Singapore is assumed as aviation hub by civil aviation specialist of Singapore where relatively they labels the Singapore "Changi" airport terminal as the air-hub. Further there are 5 air bases in Singapore and also five airlines are operating in Singapore leading by the Singapore Airlines where it connects 70 cities around the world. Especially the "Changi" air port is consisting with 4 terminals with potential of controlling 64 million people each year.

Communication

As stated before Singapore is a well developed country generally in most areas plus they are very rich in technology sensible too. Because the majority of the scientific aspects are blessed or available in Singapore and all our minds would go to Singapore if we discusses some scientific aspect like cellular phone or gaming item. That's as a result of picture that they have buildup in scientific perspective within the last years. So credited the growth or richness of the technology also, they are equipped up with communication aspects too as there are direct linkage between your technology and the communication. Because some times we cannot even have the word communication with no technology. So with regard to the communication methods in Singapore pursuing items can be considered.

Telephones

Singapore is among the finest telecommunication providers in the world including SingTel and the Singapore Telecom. Currently they are jogging with1. 857 large numbers fixed lines. Just lately their facilitating their services in excellent manner by adding numerous additional options with their services.

Payphones (Open public phone booths)

Basically payphones can be categorized into to such a card-operated mobile phones and coin-operated phones. Both local and international call can be studied with the use of card-operated devices but only the local calls can be taken utilizing the coin operated devices. Usually these booths are positioned in busiest open public places like railway channels and bus puts a stop to.

Mobile phones

This is the easiest and common communication method in a country like Singapore due to its technological growth and richness. Not merely in Singapore but also in many countries throughout the world are use to have it or more more comfortable with it as a result of regular use than it. Further the cellular phone utilization is very abundant with Singapore where in fact the mobile phone services such as 3G, mobile internet and etc are controlling by SingTel or M1.

Internet

Internet also identical to the cell phones where it also frequently use by majority of folks in developed countries for their different kind of prospects like business needs, entertainment needs, educations needs and etc. Actually Singapore is the most wired location in Asia. As identical to mobile service providers, there mainly three internet companies in Singapore leading by the SingNet.

Broadcasting

In regards to the broadcasting in Singapore all the mass media station both Television set and Radio are owned by the federal government. All of the 7 television channels and 14 Radio stations are working by the MediaCorp. In addition to that it also available cable television and IPTV facility too.

Postal Services

This can be viewed as as one of the oldest communication methods of delivering stuffs. The expert for these services in Singapore is Singapore post Pvt Ltd where it manages wide selection of postal network, postal agencies and stamp vendors.

3. 1. 3 Consumer buying habits

Consumer buying habits is very important factor to be looked at in international marketing as the consumer tendencies is differing from market to advertise and also from country to country as well. So identifying different behavior of the various customers will be essential. Because then only the company will be able to deal with them favorably in the aim of achieving advantages to the business as the company will come up with different ways of handle the different people in various manner in a manner that satisfy both the customer and the business too.

So in relation to the product-use patterns in Singapore it be based upon the type of the merchandise like be it a FMCG (fast moving consumer good) or whether its luxurious product. Normally they are employing FMCG's on daily basis because of their regular needs while they use their luxurious goods occasionally. But sometimes our product like Micro Rexton II can be use sometimes and for the daily purposes as well because of its dependability factors.

With regard to the product features personal preferences, the FMCG products are prefer by the majority of people in Singapore plus they have a tendency to buy those in multiple packages. With regard to the luxurious product, most them tend to go for new models periodically.

So even as we are considering on our suggested product the Micro Rexton II, it will be a luxurious product. So the people in Singapore tend to utilize this or likes to experience it due to its attractive unique design and other substantial factors like fuel efficiency and the purchase price affordability.

The shopping patterns also may differ according to the location. However in Singapore lots of goods can be found under one roof top. But something like automobile wont be able to find in keeping places. Normally those are positioned in special attracted places like showrooms. So we Micro autos Ltd also located the recently Micro Rexton II in our showroom in Singapore which named as Micro Cars International (Pvt)Ltd a completely held subsidiary of the mother company in Sri Lanka and also completely coordination by Micro Vehicles Ltd in Sri Lanka.

3. 1. 4 Syndication of the product

Micro Automobiles International (Pvt) Ltd is mainly targeting on the end consumers in Singapore that slipping under middle-upper course. Basically the business/procedures in the Singapore is mainly take care of by the mother company Micro Vehicles Ltd. But anticipated for some factors like less knowledge about ruling, taxing, clearing and other kind of local types of procedures, we Micro Autos Ltd appoint an agent for Micro Vehicles International (Pvt) Ltd to get things done in Singapore such as some responsibilities like vehicle clearing from the slots, taxation, enrollment and etc behalf of Micro Vehicles International (Pvt) Ltd in Singapore. But all the key work that affect on the functions or the center value of the business of Micro Cars International (Pvt) Ltd will immediately handle by mom company Micro Cars Ltd and with supportiveness of the appointed agent. Considering on the distribution channel Micro Automobiles International (Pvt) Ltd is not much engage in distributing it in Singapore as it is not FMCG product but a luxurious product. Because people who needs it'll come for an inspection and we are welcoming these to come and check it inside our showroom in Singapore.

3. 1. 5 Advertising and promotion

Advertising and advertising should be there in the action to attain the customer awareness towards the merchandise. The usage of the several advertising and promotional tools may rely upon the kind of the product. In order the Micro Rexton II is concentrating on on the finish consumers we straight communicate to the end consumers through our adverts and other promotional campaigns.

With regard to the advertising methods that may be use to market Micro Rexton II we can advertise in some electronic medias like Tv set and internet. Further with the print media it can be publish on vehicle magazines and sports activities magazines.

Also in the promotional methods it can propose to provide basic first free service for fist 100 customers. In addition to that we are expecting take part in the industry events and motor vehicle shows by exhibiting their newly Micro Rexton II.

3. 1. 6 Costs strategy

Customary mark-ups

The customary mark-ups will be be based upon expectation of the company this means will depend on the total amount that they want to earn from each product.

So Micro automobiles Ltd also having different mark-ups with regards to the project where it will differ from project to job depending on its characteristics and the goals.

According to the project of exporting Micro Rexton II Micro Autos Ltd could keep 23. 5%.

3. 2 Comparative competitors to Micro Rexton II in Singapore

There will be huge competition for Micro Rexton II in Singapore at the initial stage of these expanding method that will come-in from the other average SUV manufacturers on the planet such as Mitsubishi, Nissan, Hyundai and Suzuki. The at length information or the evaluation between each mentioned competitors the following.

Competitor's products as follows.

Make

Model

Mitsubishi

Outlander

Nissan

X-TRAIL

Hyundai

SantaFe

Suzuki

Grand Vitara

The features of the all above models can be seen at the appendix 3.

Competitor's prices are as follows

Make

Model

Price (USD)

Mitsubishi

Outlander

92000

Nissan

X-TRAIL

100000

Hyundai

SantaFe

78000

Suzuki

Grand Vitara

87000

When we considering about the advertising and promotional methods, all these companies are in the aim of providing luxurious products to the market. So as a result of that most the competitors are using general advertising and promotional methods which some advertising methods such as Tv set advertisements, internet advertising campaign, bill boards, mags when using discounting programs and trade show special offers as promotional methods.

Further with regard to their circulation channels almost all of them are doing their businesses through their realtors in Singapore where in fact the agents have the full right to take care of most of businesses within the united states.

3. 3 Federal involvement in the marketplace

Development or the development of a any kind of company can be achieve easily up-to some degree, if the federal government of that specific country is assisting on the operation by giving tons of benefits from the government area.

Further especially in the international businesses, essentially there will be the least two countries engage in that process to get some good thing (goods or services) into the country (importing) or presenting it right out of the country (exporting). So if the both governments are in positive function to help on these to gain advantages of both countries, then it'll be a really good thrust for a corporation to operate there businesses in abroad with less obstructions.

In addition compared to that there must be procedure that should follow by every single company who enters to the Singapore for his or her ventures. Some of these briefly explained rules are as follows.

Any company will come to a finish whether to increase their businesses to international or not, by looking at the results that they gain through their different studies that they done in relation to specific industry where they hoping to increase.

So by pursuing that treatment Micro Automobiles Ltd has decided to increase their businesses to Singapore by bringing out their unique product Micro Rexton II to the Singapore market through Micro Autos International (Pvt) Ltd especially to the people in middle-upper course who tend to use average SUVs. So in the beginning they need to register their business (Micro Automobiles International (Pvt) Ltd) as an organization under the required power in Singapore which called as "Accounting and Corporate Regulatory Specialist of Singapor (ACRA)".

Then they need to active their custom accounts under the Singapore customs for relevant monitoring and other processes of the traditions authority.

Further they'll be able to get a special permit (if required) because of their own taxes benefits in Singapore after complete understanding and finalizing negotiations between the two governments. Then you will see taxes benefits for product (Micro Rexton II) under this job in Singapore and the federal government of Sri Lanka can offer some reasonable tax produces for Singapore jobs in Sri Lanka.

In regards to this matter the government of Singapore comes to understanding with the Sri Lankan federal to charge 10% of custom duty in Singapore instead of charging 20% whilst having 2% GST instead of having 7%.

Additionally as stated in the last stages, the federal government of Sri Lanka is obviously behind the Micro Cars Ltd and their proposed subsidiary Micro Cars International (Pvt) Ltd by giving them the utmost support and benefits that can provide by the government side due to the nationality atmosphere of the business as the business is totally localize venture where the money won't go out of the county. Especially on doing this the government of Sri Lanka will never charge any duty on this task which is exporting the Micro Rexton II to Singapore.

So due to the taxes benefits that the Micro Vehicles Ltd getting from the both federal because of their export they will be in a position to offer Micro Rexton II at really affordable price to the Singapore market which is big frustration for other SUV competition in Singapore.

PART Two

Preliminary Marketing Plan

Executive summary

The primary marketing plan is the key part of the report where it covers major areas of the expansion process such as promotional mix, distribution, price determinations and the budgets.

Basically it start with the main goals that has targeted on specific target market of middle-upper category in the purpose of creating brand consciousness by fulfilling the trendy vacationing needs of the people in Singapore.

The usage of promotion mix is good stands in relation to operations where the company affinity for using such press tools like electronic digital media for Television advertisements, internet advisements as well as for the electronic expenses planks while they tend to use print media like news papers, newspapers and billboards. Further it also involvement in personnel selling where they specifically focusing on on the corporate customers. In addition to that they are focusing in participating for industry events by showing their vehicle too.

The travelling between two countries will be achieved by the ocean transportation method where it begins from Colombo dock to the destination slot "Jurong" in Singapore.

There are special file to be shown at the destination port such as Exhaust emission test survey, Windscreen test survey, Vehicle data greeting card, Vehicle subscription documents and Manufacture's notice to confirm the particular date of production as this can be an automobile travelling and these report are in addition to the basic documents such as bill of lading, dock receipt, commercial invoice and assertion of origins.

Basically all the key operations handle by the special inner management team which appointed by the mother company and also the company has appointed an agent for the intended purpose of handling localize jobs.

Regarding the taxes in Singapore perspective the federal government of Singapore along with Singapore customs fee 10% custom responsibilities based on the worthiness of the merchandise while they ask for 2% GST based on CIF value.

Regarding the repayment methods, the business concentration is to go with consignment method which will be an edge for Micro Vehicles International (Pvt) Ltd.

According to the present position of the company they can be well establish and strong in their productions, financial, marketing and etc.

4. 0 Primary Marketing Plan

4. 1 Marketing Objectives

  • Most of the SUVs in Singapore are highly expensive and augmented. But demand has not gone down within the last couple of years even its expensive, therefore showing extensively border SUV will create more demand to Micro Rexton II due to its comparably good deal, economies of range and low labor cost.
  • Current communal situation and demand for products in Singapore is vastly attached with fashion and new craze and then the interpersonal demand will match with the latest border design of the Micro Rexton II.
  • One of the other objectives is to creating a higher amount of customer profit markup in comparison to other competitors.
  • Expand the brand recognition through out the world using a country like Singapore will be ideal as it known as a traveler's heaven and a small business hub.
  • Achieve more benefits from a country like Singapore, where it offers more benefits to private business sector of the country in the mean time they getting their own benefits.

Target Market

Unlikely in Sri Lanka, gender will not play a major role when buying a vehicle in a country like Singapore because of their westernization cultural affects and the level of educated people. Therefore promoting even a SUV will not limited to males but will reach every magnitude possible. After undergoing several analysts & studies it is decided to market Micro Rexton II to middle-upper income earners in the Singapore. Main assumption to focus on specially compared to that group is that, it is expected that to the people income earners understand the product as a value for money product. Because buying diesel ingestion SUV is perceived as a very prestigious behavior.

Even though target market consists of the customers who are affordable to the merchandise, Micro Cars Ltd feels on future prospective customers as well.

Expected sales and profits

Basically this will be based upon the power of capturing the marketplace and exactly how its capture the market especially in a country like Singapore where in times a huge competition among SUV creators going on. And yes it depend on the way the Micro Rexton II will promote itself to the market and exactly how it can surpass the others rivals promoting patterns in order to get more concerns of the individuals towards Micro Rexton II. Capturing the clients at the fist level is insufficient but need to keep it continuously.

So based on the findings that we made through our studies we expect that you will see 200 models of sales per calendar year and planning on USD 20 millions profit.

Market penetration and coverage

As Micro Autos International (Pvt) Ltd planning to establish their showroom in the administrative centre city of Singapore, it'll be much convenient for the kids to get started on and continue the marketing process. As almost all of the merchandising activities are centralized to the capital city, creating the original demand and maintaining would be benefited from the positioning advantage. To be able to penetrate the marketplace extensive examination of existing competition and their primary competencies are highly required. Because capturing the marketplace in a highly competitive environment would be very hard and competitive. Therefore well organized designs and quality control tools also will play a significant role when penetrating the marketplace.

4. 2 Product adaptation or modification

This is an exclusive product where that the new version of the Rexton which is named as Micro Rexton II was only available in Sri Lanka but no somewhere else. Because the appearance and the other comparative products of the Rexton II is totally different from the sooner Rexton which is obtainable all around the world. That's because, it's totally built in Sri Lanka with locally produced items where only the engine and the transmitting having from Korea. So we can suppose Rexton II as a distinctive product that available in Sri Lanka.

Basically the key advantage to Micro Autos Ltd is the price advantage that they can gain in Singapore marketplaces as the Micro Rexton II can be offered at fewer prices set alongside the other average SUV in the precise range.

Also the majority of the elements of the Micro Rexton II such as body of the automobile, mirrors, chairs, and silicone components like the tires are completely manufactured in Sri Lanka and additional they are wishing to add/replace more locally produced components to it to be able to obtain additional revenue for the united states.

The features and the specification of the Micro Rexton II can be seen in appendix 4.

4. 3 Advertising mix

In relation to the exportation of Micro Rexton II to Singapore an intensive promotional marketing campaign will be conduct to be able to capture the precise target market in the purpose of increasing demand by conveying the great things about this new Micro Rexton II to the customers.

4. 3. 1 Advertising

The objectives of the advertising campaign will be to create knowing of the people also to make them more appealing by performing creative methods.

Media mix

There are various kinds of advertising methods available on the market, but all are not relevant to every single service or product, which means selecting the advertising methods are depending on nature of the product and specified marketplace. Because the usage of different marketing depends on the nature or category of folks.

Therefore a lavish product like Micro Rexton II where its targeted on the middle-upper class people need to have very professional attractive advertising campaign through in Singapore. So in order to achieve the specified goals, Micro Cars International (Pvt) Ltd through coordination of the mother company are determined to work with both electronic digital and print advertising for its advertising campaign.

In regards to the electronic media it has decided to use TV advertisements especially during prime-time programs (at night) through a few of five popular Television set programs in Singapore such as Route 5, Channel 8, Channel U, OKTO, Channel News Asia in the aim of catching the public. Because basically that will be the best time to catch the majority of people who within our targeted category.

Further it also use internet advertising on some top five busiest sites in Singapore and this will be one of the most beneficial method scheduled to high internet literacy rate in Singapore.

In addition compared to that it'll be using one of the very most popular and attractive method in every about the world which is digital bill board. This is for the capturing of busiest people in Singapore who always travel especially at nigh. Because this technique could be more attractive at nigh due to its high contrast and we are looking to locate two electronic digital billboards at busiest locations in Singapore.

We also use some of print multimedia such as information papers and periodicals too.

With regard to the news papers we have selected three of most selling professional media papers in Singapore to create the Micro Rexton II ad which are the news paperwork who most tend to buy by out targeted middle-upper category such as Straits Times, New Newspaper and Business Times.

Furthermore we have been targeting on individuals who tend to read periodicals and we've decides to market on three top automotive mags like Top Equipment, Vehicle Car and EVO Journal and two other trade newspapers in Singapore such as Stuff Singapore and LIFE-STYLE.

Also as well as the electric billboards which pointed out prior, we also expecting to located four other different charge boards of all ideal locations.

4. 3. 2 Sales promotions

We are also in the necessity of executing a promotional advertising campaign in client satisfaction point of view with some targets such as

  • To boost the amount of sales
  • To encourage customers for buying of this product
  • To create dedicated customer base

According to our discounting program we are providing basic free fist service to first 100 customers and in addition compared to that we are preparing to screen our Micro Rexton II in all trade shows and motor vehicle shows in Singapore.

4. 3. 3 Personal selling

This is a method that people can use to market our vehicle personally to some specific group of people while it permitting us to provide them the genuine experience and feeling of our new Micro Rexton II.

In regards to this method our plan is to engage with the organization people. So for our particular team has decided to go to reputed companies to present this vehicle to them and by enough time we have plan to brief them about all relevant factors about the Micro Rexton II through power-point demonstration. Further we also prepared to show them the vehicles in physical form and keen to provide them the test run at the same time to get and feel their own experience about the Micro Rexton II.

4. 4 Circulation: from origins to destination

Consideration on the circulation is a essential factor for just about any businesses even it's something oriented business as this is where they deliver their services or goods to the required interested party. So that it would be more important in international marketing too where a company working with the abroad.

When concentrating on the current business which is the enlargement of the Micro Automobiles Ltd to Singapore with launching their Micro Rexton II through their subsidiary in Singapore known as as Micro Cars International (Pvt) Ltd, there are two mediums of travel are available between your two countries such as air vehicles and sea vehicles. So we need to choose either air vehicles or sea travelling for the exportation process of the Micro Rexton II from Sri Lanka to Singapore.

After the concerning on the majority of factors, specially such as the nature of the good (Micro Rexton II) it is essential to look for sea vehicles as it's the setting that more suits to transport heavy good and and yes it will be more cost effective when compare to the other available method air transportation which very costly than the ocean transportation. So with the use of sea transport method, the company can gain additional expense gain which indirectly results keeping the full total last cost of the vehicle low, where they get an possibility to create price competition among other SUV rivals in Singapore.

4. 4. 1 Dock selection

The origin dock would be the Colombo dock in Sri Lanka which administered jointly by the Dock Authority-Sri Lanka and Sri Lanka Customs. Actually this is the slot that use for almost all of both domestic and international commercialization purposes where located in the centre of Colombo. Basically as mentioned before, the task shop of the Micro Cars Ltd is situated at Peliyagoda a place where that close by the Colombo slot and as consequence of that transportation cost which have to invest to bring vehicles to the Colombo jacks by the automobile service providers will be minimize.

Concerning about the option of slot in Singapore there are totally 8 jacks such known as as Brani, Cosco-PSA, Jurong, Keppel, Pasir Panjang, Pasir Panjang Wareves, Sembawang and Tanjong Pajar.

But the most popular, busiest slot in Singapore is Jurong where it uses for commercial purposes with the ability of handling huge number of responsibilities. So Micro Vehicles Ltd will dispatch their vehicles to Jurong from the Colombo port.

4. 4. 2 Function selection: advantages and disadvantages

Road transportation

Actually this is most basic method of travel and most of companies like this for their travel need to provide their goods to the clients or to any given location.

According to the project (expansion of Micro Vehicles Ltd to Singapore) this transport method is using frequently both in Sri Lanka and Singapore for taking the vehicles to the foundation ports and to take the vehicles to the warehouse/showroom from the vacation spot dock. Further they are using car carriers for this transport method.

This kind of method will be best for fast delivery needs within short distance and and yes it will be really affordable.

But some times it could be delay of providing due to bad weather conditions, break-down of the carrier and because of traffic jams.

Rail transportation

Basically rail highway are available in Singapore and those rail highways are in supreme benchmarks for vehicles needs. But if we take the situation in Singapore as possible they aren't much concern in using rail highways because of their goods delivering operations due to the size of their country. Further according to the product that people exporting (Micro Rexton II) we are not in a position to use rail roads as it is not a good setting to transports vehicles.

Sea transportation

This is the mode that use by the majority of ventures for his or her import/export purposes. Importing/exporting goods by ships may use pots if not there's option of sending the nice in the dispatch with out launching it into a pot. For that we now have ships available specialised for vehicle travel.

This mode gives lots of advantages to the projects for vehicles of heavy items like vehicles and also it is ideal to move non-perishable goods.

But there are a few disadvantages to like it can get wait due to inclement weather and etc.

Air transportation

This mode is ideal to transport the light goods that are in popular and also it is the best option for ventures that are in need of delivering goods to abroad immediately with their customers or brokers within limited time frame.

So it could be use to gives goods to abroad quickly. But this can be change due to flight delays and inclement weather.

4. 4. 3 Packing

There's deal contain in almost all of products nowadays except for some welfare products. Because package makes the merchandise better in lots of ways like it makes the merchandise attractive. Not only it creates attractive but also it brings about easy handling in loading, unloading and keeping. But not all plans are same which means all packages are not easy to handle. So the presentation should be a pack that can handle easily. Also the presentation shouldn't be much heavy as the shipping chargers are with regards to the weight and the volume of the product. Therefore it must consider on that as well to be able to reduce the transport chargers. Further the product packaging depends on the type of the merchandise like a package deal can be including with the FMCG product and also with some heavy goods as well.

But it hardly ever applies to car. Due to that Micro Rexton II does not have any special packaging for his or her vehicles such as real wood box presentation. So Micro Rexton II directly loading into special area of the ship where in fact the area that is specially for vehicle transportation.

Marking and labeling regulations

Marking and labeling rules is must in almost all of countries. Because it easy for product recognition and handling. Because after the shipment is came to the dock then the customs and the relevant expert will be able to manage it easily without time consuming and also the receivers can identify their products as well. So we use special software/form which called as "DECLARATION OF FACTS FOR AUTOMOBILES" to be producing at the Jurong slot Singapore as attached in the appendix 5.

Containerization

Containerization means the process of packing or loading the products into the box for travelling. But as mentioned before Micro Rexton II will not use any special product packaging or pots for the transport although it will insert into special area of the ship which is ideal for vehicle transport where it blocked the automobile in the precise location to stop the movements that may appear during travelling.

4. 4. 4 Documents required

All the success of the international marketing like the transfer/export process is with regards to the correct documentation posting between the relevant parties. Within an transfer/export process, many types of documentation are posting by both governments or the relevant specialists like traditions. So there must be correct method to earn all the required documents by the exporter and also it's a must to show all required documents to the regulators at the vacation spot. Failing to handover those documents to the mandatory authority will bring about delays in clearing process and sometimes the products can be rejecting by the traditions at the destination port.

Actually there is no any clear chop treatment to earn this documents and also no any concrete plan for the mandatory documents. Which means the file that required by the government bodies varies from country to country and interface to dock as well.

But according to the project the following document are needed by the Singapore authorities and port specialist including traditions for the exporting of Micro Rexton II from Sri Lanka.

Bill of lading

Bill of lading is the report or a contract between your shipper (shipping company) and the carrier who transport the precise good to the interface. This can be give by the carrier to the shipper to recognize receipt of the goods including its destination. Some times the carrier or the transporter and the owner of the products may be two different celebrations plus some times it could be the same. With regards to the Micro Automobiles Ltd this two celebrations will be the same. Because normally there's independent transport department in Micro Cars Ltd where they use to move their vehicles by special vehicle providers occasionally. So in a situation like this Micro Cars Ltd engage as both owner and carrier as well.

Dock receipt

Dock receipt is concern by the shipper (sea carrier) to identify that the goods are received from the home carrier to the slot. This will transfer the responsibility of goods from local carrier to the shipper which goods will be ready to export.

Commercial invoice

This is a file that prepare by the owner (retailer/ Micro Cars Ltd) showing to the relevant specialists of Singapore about the exact value of the goods for the clear estimation of customs duties and taxes (GST). This will include the unit price as well as the full total cost of the items.

Statement of origin

This document is for the purpose of identifying the origin of the product. As stated prior the government of Sri Lanka and the government of Singapore attended to a final decision (agreement in good beliefs) to give some duty benefits upon this Sri Lankan product Micro Rexton II in Singapore while Sri Lanka supplying some taxes benefits for some Singapore projects in Sri Lanka. So corresponding to that arrangement, the Singapore administration has only agreed to give that specific duty benefits only for the said job which is exporting Micro Rexton II. So because of this of that the federal government of Singapore need to recognize whether the product (Micro Rexton II) is actually Sri Lankan created one or not. So for that they need the mandatory recognition from the relevant power in Sri Lanka to evidence the originality of the product.

Special documentation

In addition to the above mentioned document the federal government of Singapore or the Singapore customs need even more documents that regard to the automobile industry as follows.

  • Exhaust emission test report
  • Windscreen test report
  • Vehicle data card
  • Vehicle registration documents
  • Manufacture's letter to confirm the day of manufacture

4. 4. 5 Insurance claims

In relation to the insurance claims the responsible party for insurance cases either may be importer or exporter which depends on the word of sales. In international marketing all the procedures such as exporting and importing should be done in an doubt environment. So because of that reason the company doesn't know very well what will happen next which is beyond their fair control. So the best way to be rid from those uncertainties is by having a relevant insurance policy. Because from the great weapon for both importers and exporters to be rid from the losses that they arise because of the uncertainty which beyond their control. Especially in the operations of launching, unloading and stocking, the products can be destruction due to harsh handling. Further the product can also be damage due to bad whether if not some time the merchandise may totally get lost in situation where ship get sunk due to bad whether conditions. So in times such as this having and insurance policy will be vital for exporters/importers continuity and for their own safeguard.

With respect to the job of exporting Micro Rexton II to Singapore, the business Micro Car Ltd is applies to the marine insurance as the business only using sea travel for their exporting.

Focusing on the insurance companies in Sri Lanka there are extensive in both private and government sector. However the most experience insurance provider with a great track record is in government sector which brands as Sri Lanka Insurance Company. Also Micro Car Ltd from the day its start they are really consulting with the same company (Sri Lanka Insurance Corporation) where in fact the company is exclusive insurance customer that managing all the insurance jobs of the Micro Car Ltd. It's because with their (Sri Lanka Insurance Firm) flexibility in many areas specially in their rates and also due to the Sri Lankan nationality of the Sri Lanka Insurance. So Micro Car Ltd consulting the Sri Lanka Insurance because of this job as well with the marine insurance.

4. 4. 6 Freight forwarder

Freight forwarder is an agent who works behalf of the exporters for the travelling of the products from the origin port to the destination port. Using a freight forwarder will be an edge for the companies as all the companies doesn't know the complete import/export process wonderfully. So in a situation like this it is ideal to hire and freight forwarder because they are well experience with the complete transfer/export process flawlessly including the required documents and the price for import/export procedures.

So quite simply as identical to the insurance, Micro Car Ltd using their existing shipping client (McLerens Shipping Small) as shipment needs provider for this task of exporting Micro Rexton II to Singapore because of their versatile rate and etc.

4. 5 Route of Circulation (micro evaluation)

Import export agents

As mentioned in the earlier most of the key functions of the abroad company (Micro Automobiles International (Pvt) Ltd) is immediately handle and coordinate by the mom company (Micro Automobiles Ltd) by the specialized internal management team of the mom company which aimed by the Chairman/CEO of the Micro Vehicles Ltd Dr. Lawrence Perera that was appointed by the director plank of the mom company.

But some duties in regards to to the neighborhood system of Singapore will feel inconvenient for the management team. Sometimes it may be in a position to get the items done by a local's person very easily with les hurdles as the local people are convenient with their own system in Singapore. In order result of that an agent will appoint with limited power to take care of the localize duties such as company sign up, obtaining relevant approvals, emphasizing localize guidelines & restrictions, taxation guidelines, vehicle clearing processors at the interface media controlling for the advertisements and special offers.

4. 6 Price determination

4. 6. 1 Cost of shipment

Regarding the shipping and delivery cost that the Micro Autos Ltd must incur for the exporting of Micro Rexton II will depend on the charges of the shipping firms as their charges can vary greatly from company to another. But as mentioned in the last times, Micro Automobiles Ltd in poison to deal with their existing shipping agent of the business McLarens Shipment Ltd. So in line with the transport chargers of the McLarens Shipping Ltd you will be charged USD 500 per each device/vehicle for the sea transport from Colombo port to Jurong port in Singapore.

4. 6. 2 Travelling cost

In relation to this project, transportation cost will arise in 2 times where initially transportation cost that incur when the vehicles are delivering from the work shop of Micro Automobiles Ltd at Peliyagoda to the Colombo dock by transport division of the Micro Autos Ltd by using special vehicles service providers. Then again a transport cost will incur in Singapore to consider the vehicles from Jurong dock in Singapore to the showroom of Micro Automobiles International (Pvt) Ltd.

Actually the special vehicle providers are in the ability of carrying vehicles in very safest way capable of having five vehicles at a time.

So for the delivery procedure for vehicles to the Colombo slot from the Micro work shop, the move division of Micro Automobiles Ltd has make an estimation where it will cost USD 100 for every trip. As stated earlier these service providers are capable of holding five vehicles at a time. So predicated on that information, Micro Autos Ltd estimate that you will be charged USD 100 to deliver every five vehicles this means each vehicles cost USD 20.

Regarding the travelling cost in Singapore (Jurong port-Singapore to showroom of Micro Cars International (Pvt) Ltd) the process will be same and it'll cost USD 200 for every single trip with the collection of five vehicles which means each vehicle cost USD 40.

4. 6. 3 Handling expenses

Basically here the handling expenditures mean the collection of launching, unloading and storing charges at the jacks. As same in the transport here also appear two handling expense where one at the Colombo Dock and the other in the Jurong port-Singapore. Based on the chargers of both jacks Micro Vehicles Ltd will incur USD 150 per product/vehicle in Sri Lanka while incur USD 300 per product/vehicle in Singapore.

4. 6. 4 Insurance cost

Considering on the insurance cost Sri Lanka Insurance Company Ltd, an exclusive insurance customer of the Micro Cars Ltd has proposed an acceptable rate with regards to their marine insurance for the automobiles that exports to the Singapore. The rate is 0. 5 % based on the Sri Lankan Value of the automobile. So it will be nearly USD 225 insurance cost per vehicle as the automobile values in Sri Lanka is USD 45000.

4. 6. 5 Custom duties

Focusing on the custom obligations it will cost USD 50 at the Colombo port per device/vehicle although it will be 10% in Singapore which predicated on the valuation by the Singapore traditions.

4. 6. 6 Import fees and value-added tax

Concentrating on the excess taxes, there are no any additional taxes that should be incur by Micro Automobiles Ltd in Sri Lanka for this task of exporting Micro Rexton II to Singapore due to the encouragement of Micro Automobiles Ltd by the government and to give greater chance for this Sri Lankan enterprise to set-up better price competition amongst others. As a result of that Micro Automobiles Ltd get an possibility to export their models for the very same price decide by them in Sri Lanka as there's no taxation specifically for this exporting models.

But in Singapore you will see cost of 2% for the CIF value.

4. 7 Conditions of sale

FOB

Technically it means "Free up to speed" where in fact the compilation cost of goods, vehicles and insurance cost from the manufacturer to the foundation port with inclusion of storing and loading charges.

This term of deal is definitely an advantage for owner as he only has to incur the price up-to the operation in the foundation port which means he'll not be in charge of loss or injuries from then on.

But in purchasers perspective it'll be a drawback for hi as he must incur cost if the products are reduction or destroyed.

CIF

This means "cost, insurance, freight" where the vendor will incur all the cost from carrying goods form the business to the vacation spot port. Almost any cost regarding the losses or damagers will copy to the buyer. But in CIF retailers are equipped with the sea insurance to reduce the buyer's dangers.

This will appear an advantage for owner from one area as he helps to protect from the losses and dames by the help of sea insurance. But it also will be disadvantage for seller as he has to spend some additional expense for the potential risks that can occur during transport.

C&F

This means the "cost and freight" where it offers the full total cost of the goods and transport chargers to the vacation spot port.

In relation to the said job of exporting the Micro Rexton II to Singapore there's specific taxation treatment which control by the government of Singapore and Singapore traditions. Further according to the understanding and the arrangement between the two government authorities there's flexible duty procedure is keeping for Micro Rexton II.

So you will see a custom responsibility of 10% for the value of the automobile whilst having 2% GST on CIF including unloading and holding cost.

4. 8 Ways of payment

There are some payment methods that may be chosen with regards to the nature of the business and the as with regards to the potential of paying to the other get together. So there may be methods such as cash in advance, open account, consignment sales and notice of credit.

Basically based on the nature of this project, this is a business or deal between mom company (Micro Vehicles Ltd) and its own subsidiary (Micro Automobiles International (Pvt) Ltd) where in fact the subsidiary also managing directly by the management team of the mom company. So there will be no mistrust between your two companies because of their payments.

Therefore it is all set for the consignment method where in fact the Micro Vehicles International (Pvt) Ltd in Singapore only has to pay to Micro Automobiles Ltd once they sold the vehicles and the payments should be achieved on monthly basis.

5. 0 Expert forma financial statement and budgets

Marketing budget

Cost of the Micro Rexton II in Sri Lanka = USD 45000

Cost of the Micro Rexton II in Singapore after incur all the expenses in Singapore as follows

Description

Cost in USD

Total cost of the vehicles (At Sri Lanka)

9000000

Research & Development

5000

Transportation cost

12000

Handling cost

90000

Insurance cost

45000

Shipping cost

100000

Custom duties

910000

GST on CIF

182900

Salary

72600

Promotion cost

32020

Showroom charges

60000

Electricity & water

9000

Telephone

1800

Other

1000

Total

10521320

So predicated on the expense of the machine in Singapore the company has made a decision to sell it at USD 65000 which really is a excellent rate compared to other average SUV prices on the market where other SUV starting there prices bare minimum at USD 78000.

Annual revenue and loss affirmation for Micro Cars International (Pvt) Ltd for the entire year ending 31st December 2010

Description

USD

USD

Sales

13000000

Cost of the goods

9000000

Gross profit

4000000

Expenses

Research & Development

5000

Transportation cost

12000

Handling cost

90000

Insurance cost

45000

Shipping cost

100000

Custom duties

910000

GST on CIF

182900

Salary

72600

Promotion cost

32020

Showroom charges

60000

Electricity & water

9000

Telephone

1800

Other

1000

Total expenses

-1521320

Net profit

2478680

Promotion cost (Advertising, Offers, Personnel selling

So the final cost advertising will be

TV advertisements

3500

Internet advertisements

6000

Electronic billboards

8000

News papers

1440

Magazines

1080

Billboards

8000

Free servicing cost

3000

Trade

1000

Total

32020

6. 0 Tool requirements

Micro Automobiles Ltd is a company with lots of great milestones that going with great track record with their functions in Sri Lanka

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