To what extent will revising the marketing mix of La Sovereign help improve its market share in the bicycle industry?

LA Sovereign was launched in October 2006 and is a first ever Joint Venture with a Thailand based company to sell bicycle parts in India. The scope of business is to supply world class bicycles to the market at competitive prices offering good quality. Recently, the sales of their bicycles are falling and they are unable to understand the reason for the reduction in demand. In this study, I will attempt to look if revising the marketing mix of La Sovereign would help improve its market share in the bicycle industry.

• Primary Research - Primary research will involve interviewing the Management (the Managing Director and the Marketing manager) to understand the marketing mix of the company. A survey will be conducted with the customers of bicycles to understand their needs and preferences.
• Secondary research - The websites of La sovereign, its competitors’ websites and other relevant websites, magazines, newspapers will be used to compare the marketing mix and the ways to revise the 4 Ps.

• La Sovereign Bicycles
• Marketing Manager
• Managing Director

Advantages of primary research and secondary research: Primary and secondary research will give an overview and broad idea of the company’s need for revising   its marketing mix in order to improve its market share in the bicycle industry. Primary data, specifically, will provide a high degree of accuracy by conducting Interview cum questionnaire which will give clear responses. The Marketing Manager will be interviewed to know about the marketing strategies which are already adopted by the business and to recommend revising of the 4 Ps. The Managing Director will be interviewed to know about the dynamics and corporate culture of the company and the need for revising marketing mix (Four P’s) of the company. Also customers will be observed on their buying behaviours.

Secondary data will provide a variety of perspectives on the need for revising the marketing mix of La Sovereign.

Disadvantages of primary research and secondary research: There may be limited access to primary and secondary research which will hinder my analysis of LA Sovereign and also because of time constraints and geographical barrier because of studying in a boarding school. Also the managers might not maintain confidentiality of data.

Anticipated Difficulties: Being in a Boarding school is a problem as it reduces time for collecting primary and secondary data but can be solved using Internet and   the company’s website. Language barriers might hamper effective communication with the customers. The questions will be explained in the local language. The time available during the breaks given by school will be fully utilized for the research purposes.

I take this opportunity to show my gratitude towards Mr. Harjeet Singh (Marketing Manager) and Mr. Rahul Kalra (Managing Director) for allowing me to produce this research paper. Thank you for providing me with intensive set of data of the business. I really appreciate the customers of La Sovereign who helped me to carry out my market research- providing an appropriate sample for my questionnaire. Further, I extend my courtesy to my Business Management facilitator and the IBDP Coordinator for their never ending support throughout the process of my research.

The bicycle importing company LA Sovereign was launched in October 2006 with the scope of supplying high quality bicycles to the Indian Market at competitive prices. The company, LA Sovereign, is the first ever Joint venture of an Indian-based company with a Thailand based company to sell bicycles and bicycle parts. Sovereign is a bicycle parts distribution group in India thus comes the name of the highly reputed brand LA Sovereign which was first established to sell bicycles only for the Indian market.

LA Sovereign ensured steps to remain competitive in the Indian Market   to attract more customers by offering them variety of bicycles. However, the companies marketing mix was not well organized. Through my research, I will discuss and analyse the improvements in the marketing mix to be taken by la Sovereign to increase its market share. This has therefore led me to the following research question.

Research Question: To what extent will revising the marketing mix of La Sovereign help improve its market share in the bicycle industry?

The methodology/procedure of the research involved primary and secondary data. Primary Data consisted of conducting an interview with the Managing Director and Marketing Manager of the company, LA Sovereign, to discuss the company’s marketing mix details and to compare it with the competitors marketing mix. A survey was conducted with the customers to understand their tastes and preferences.

However, conducting primary and secondary research presented another problem due to time constraint and also being a residential student restricted my access to company. Limited access to information gathered from primary and secondary research is another challenge as it will hinder and delay the analysis of my research. The data collected would have some element of bias. An attempt has to be made to maintain accuracy and answerability to stakeholders. If I had the chance of conducting the research again, I would conduct a focus group session with a group of customers to discuss their views on the topic. Detailed information about personal and group feelings, perceptions and opinions can be obtained by the focus groups and time and money can be saved compared to individual interviews.

Questionnaires were distributed to 40 customers to identify their tastes and preferences to the brand of La Sovereign bicycles and the level of satisfaction with the Product, Pricing, Promotional and Place strategies.

Out of the 40 respondents surveyed, 25 of them had a bicycle and this shows that people are still using bicycle because of the value it holds as an exercise and to reduce pollution.

Out of the 40 respondents surveyed, it was observed that most of them owned bicycles from Hercules (with a 40%) and La Sovereign was only opted by 20% of the customers. It was necessary to understand the reason behind the low % of La Sovereign buyers.

It was observed that 70% of the respondents were of the view that advertising is an important factor in selling bicycles. This is an important point to be considered by La Sovereign as it was mentioned by the Marketing Manager that they do not advertise much.

It was seen that 60% of the respondents bought the bicycle getting the information from social media and very few depended on magazines and the company websites. It is important for La Sovereign to advertise on the social media to get more customers.

It was observed that 65% of the respondents felt that the prices they paid were reasonable. La Sovereign can work on improving the quality and features of the bicycles and also offer competitive prices accordingly to attract customers.

It has been observed that the Hero Cycles Limited  has the largest market share about 42 % of the Indian bicycle market,  followed by Tube Investments of India ltd with a market share of 22%,

 Avon with a share of 17% and Atlas cycles ltd which has a market share of 10%, Rest of the 9% share is being occupied by other small players in the market. This shows that La Sovereign has to work towards revising its marketing mix to increase its market share in the bicycle industry.

Strengths

La Sovereign  supplies bicycle & Kids Toys of every High Quality & world class designs to the Indian consumer.  It has been in the Bicycle trade for the last 40 years . The designs of the bicycles are unique. The products are conforming to the world Quality standards & are available in latest design for all ages.

Weaknesses

It has been observed that there is no proper marketing strategy devised. Advertising is not done much in the form of Above-the-line promotion and Below-the-line promotion. They depend mostly on online sales. The marketing manager was of the opinion that they did not feel that adverting was very important. He felt that it is necessary to improve the product and La Sovereign was trying to be more Product-oriented than market-oriented. However, it has to be remembered that advertising is necessary to increase market share and to remain competitive in the bicycle industry.

Opportunities

Online buying has become a trend these days and most of the sales for La Sovereign are via online. The e-commerce has become an opportunity for La Sovereign and the demand for bicycles is growing which helps La Sovereign increase its sales revenue.

Threats

This competitive bicycle industry includes the major competitors Firefox, Fantom, Frog, Suncross and Unirox. La Sovereign has to keep on revising its marketing mix in order to increase its market share in the bicycle industry and compete with its rivals. Distribution of stores is not sufficient.

“The Ansoff growth matrix assists organizations to map strategic product market growth”.

Product Development Strategy: In this stage, new products are introduced into the existing markets. La Sovereign comes out with new features and products regularly. The brands of La Sovereign are X-Bicycle, Romet, Angry birds, La Neo and Infinite. For example, X-Bicycle brand comes with new varieties like Cleo 20” Girl, Xtreme boys 20”, Sleek, Cliff 26” single speed etc. All these have been the new products of La Sovereign. This is a low risk strategy however, it is important to conduct market research before introducing it in the market.

Market Development Strategy:  This strategy is also known as Market Extension. In this strategy, the business sells its existing products to new markets. This can be made possible through further market segmentation to help increase market share. La sovereign has extended its market to Thailand. LA THAILAND is a Thai company manufacturing Bicycles, Toys & Electric Vehicles for Asian, and European & American Market. La Sovereign is very successful in Thailand and therefore can try to expand to other countries to increase its market share. This is a medium risk growth strategy. However, the success of the product in one market does not necessarily guarantee its success in other markets.

The Boston Matrix is a model which helps businesses analyse their portfolio of businesses and brands.

Market growth: Is the market in which La Sovereign is selling bicycles growing quickly, slowly, or not at all?

Market share: Does La Sovereign have a high or a low share of the current market?

Cash Cows

These are products with a high-market-share in a slow-growing market. La Neo is a Cash cow as it has a high market share of 60% and the amount it generates is made available to invest on other products.

Stars

These are products with a high-market-share in a growth market. The products such as X-Bicycle and Angry birds are Star products of La Sovereign as they generate the maximum amount of money for the business. La Sovereign tends to invest more money and develop and promote these products.

Dogs

These are products with a low market share in low-growth markets. The company does not have any products in this category.

Question Marks

These are products with a low market share in a high-growth market. La Sovereign has no question mark products in its portfolio as of now.

However, the BCG matrix neglects the effects of synergies between business units; high market share is not the only success factor and Sometimes dogs can earn even more cash as cash cows.

Now that I have looked at the product portfolio of La Sovereign, I will be analyzing the marketing Mix of La Sovereign to understand the ways of reaching the customers with the right product, charging the right price, various ways of promoting the product and at the right place to increase market share.

It is a right combination of the four P’s( product, price, promotion and place ).  It is important for La Sovereign to understand the right marketing mix to increase its market share in the bicycle industry.

Product: They are the tangible good or an intangible service which might meet the demand of the customers. La Sovereign is popular for the style of bicycles that they sell. La Sovereign has been successful in producing high quality bicycles at a reasonable cost, hence achieving high profits. The brands of La Sovereign are X-Bicycle, Romet, Angry birds, La Neo and Infinite. For example, X-Bicycle brand comes with new varieties like Cleo 20” Girl, Xtreme boys 20”, Sleek, Cliff 26” single speed etc. All of the mentioned products have been very successful in India and Thailand. Companies such as Firefox, Fantom, Frog, Suncross and Unirox are coming up with better features. However, La Sovereign is known for its quality bicycles.

Price: The La Sovereign Bicycles are known for their quality bicycles and the added features. They charge a high price relative to their competitors. For example, La –Sovereign 26 inches 21 speed bicycle costs INR 16,999 whereas a Hero Eagle costs is priced at only INR 11,999. Charging very high prices has led to low profits in the long run. However, La Sovereign could adopt promotional pricing which would help increase market share.

Promotion: When it comes to promoting their business, La Sovereign does not invest only 2% of the expenses on advertising. However, they do conduct events as promotional strategies in various places such as schools etc. La Sovereign could adopt Above-the-Line and Below-the-line promotional strategies to attract more customers. They could spend more on advertising through the social media etc.They could adopt viral marketing and guerilla marketing, which focuses on taking the consumer by surprise to make a big impression about the product. The website of the company could also be modified according to the website of Firefox, which is more attractive and informative.

Place: Their products are sold mostly in Ludhiana, Punjab in their stores. The bicycles are found online on Amazon where customers can easily read the features and reviews and purchase the bicycle online. It was also mentioned in the interview that the customer orders are taken and delivery takes place  without delay.

This research essay attempted to answer the question “To what extent will revising the marketing mix of La Sovereign help increase its market share in the bicycle industry?

Analysing the SWOT analysis supported me in finding the internal and external factors that are affecting La Sovereign. La Sovereign should focus on investing in advertisements to increase market share.

Furthermore, the market share analysis gave an insight of the different bicycle companies in the industry. It was seen that the competitors of La Sovereign are involved in different promotional strategies which should be used by  La Sovereign due to the growing competition.

From the Ansoff Matrix, it was seen that by having geared bicycles and other features, they were able to attract customers of the teenage groups. However, they should also try to enter   new markets to increase its market share which is a cause of concern for them.

The survey showed that most of the people relied on social media. Hence it is important that La Sovereign should focus more on advertising using the social media. Finally, the marketing mix analysis gave an overview of the 4 Ps that are adopted by La Sovereign. It is recommended that they should conduct more research on the customers to know their tastes and preferences and introduce new bicycles based on the research. They could adopt promotional pricing strategies and adopt guerilla marketing which could attract more customers, thereby increasing market share. Viral marketing could also be a good option for them to adopt to sell more and increase the market share in the bicycle industry. The website of La Sovereign could be made more appealing. However, data can be biased even after conclusion and recommendations and unanswered question.

Can La Sovereign afford to implement the marketing strategies suggested in the research paper?

“Hero Cycles Largest Market Share 42 % of the Indian Bicycle Market.” MYREALITY.In, Real Estate, Share Market, Mutual Fund, Insurance, 16 Mar.

2014, https://www.myreality.in/2014/03/hero-cycles-largest-market-share-42-of.html. Accessed 3^rd July 2019

“Events.” LA SOVEREIGN Bicycles, la-sovereign.com/events/.

“High End Bikes, Imported Mountain Geared BMX Kids MTB Road Bikes: La Sovereign.” LA SOVEREIGN Bicycles, la-sovereign.com/. Accessed  6^th July 2019

“Using SWOT Analysis to Plan an Uncertain Future and Increase Organizational Effectiveness.” Nexight Group,

https://nexightgroup.com/using-swot-analysis-to-plan-an-uncertain-future-and-increase-organizational-effectiveness/ Accessed date 6^th July 2019

“The Ansoff Model.” Smart Insights, 26 June 2019,

https://www.smartinsights.com/marketing-planning/create-a-marketing-plan/ansoff-model/ Accessed date 10^th July 2019

https://expertprogrammanagement.com/2011/04/bcg-matrix-boston-matrix/ Accessed 12^th June 2019

Question 1 - Could you please give me a brief overview of your company?

Answer 1 - LA Sovereign is the first ever joint venture of an Indian company with a Thailand based company, launched in October 2006,supplying high quality bicycles to Indian Market

Question 2 - Who are the main rivals/competitors in the bicycle brand?

Answer 2 - This competitive bicycle industry includes the major competitors Firefox, Fantom, Frog, Suncross and Unirox.

Question 3 - How do you fix your prices? What are the product features? How do you bring new products in the market? What are the Promotion strategies used by your company? Where do you sell the bicycles?

Answer 3 - We fix the prices by calculating a % of margin on the cost price of the bicycles. We advertise very little as our products are in demand and we conduct events at different places. The bicycles are sold in showrooms.

Question 4 - Do you have any future big plans?

Answer 4 - We are planning to improve our product mix and include more products in our product portfolio but we have not decided yet. We need to conduct market research before taking any decisions.

Question 5 - Which products in your product portfolio are with high market share and high market share?

Answer 5 - The products X-Bicycle and Angry birds are in the growth market.

Question 6 - How do we know that the products X-Bicycle and Angry birds are in the growth market?

Answer 6 - The products X-Bicycle and Angry birds are in the growth market with a high market share because they are very successful among the other products and they generate high amounts of cash for our business.

Question 7 - What is the market share of your product, La Neo?

Answer 7 - The market share of La Neo is around 60%.  X-Bicycle and Angry birds have a market share of 65% and 70% respectively.

Question 1 -  How long have you been working in with La Sovereign?

Answer 1 - It’s been 10 years since   I have been working in this company. I am very satisfied with the growth opportunities in La Sovereign.

Question 2 - What are the marketing strategies adopted by the company?

Answer 2 - We make sure that the Product, Price, Promotion and Place is planned well before introducing a new product. We do not spend much in advertising. We only conduct events such as racing of bicycles etc.  People can buy the bicycles in stores and online on Amazon.

Question 3 - What after-sales service do you offer?

Answer 3 - We try to contact the customers through the Email or other contact details that they give us. We also provide them with warranty services.

Question 4 - Which products in your company  have a high market share and high market growth?

Answer 4 - The five main products X-bicycle, Romet, Angry birds, La neo and infinite have a high market share and high market growth at La Sovereign.