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

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.

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.