MS Motosuit: Marketing Audit 1

SCOPE OF MARKETING AUDIT

• Introduction

• Executive Summary

• Major Assumption

• Product Description

• Knowledge of the Market

• Basis for Demand Computation

• Basis for Supply Computation

• Market Share

• Product Planning

• Channel of Distribution

• Customer Relation and After-Sales Service

• Promotional Programs

• Pricing

• Sales Force Management

• Packaging

• Summary of Results and Findings

MS Motosuit: Marketing Audit 2
 MS Motosuit: Marketing Audit 3

INTRODUCTION

In making a good company study, marketing audit is one

of the bases to consider. Marketing audit is a fundamental

part of the marketing planning process. It is conducted not

only at the beginning of the process, but also at a series

of points during the implementation of the plan.1

The marketing audit has certain similarities to a

financial audit in that it is a review or appraisal of your

existing marketing activities.2 Carrying out the marketing

audit provides the opportunity to review and appraise your

whole marketing activity, enabling you to assess past and

present performance as well as to provide the basis for

evaluating possible future courses of action. The business

environment is constantly changing. The marketing audit

should be used as a reference tool, with constant updates

reflecting changes in the external environment and your own

internal business experiences.

1
http://www.marketingteacher.com/lesson-store/lesson-marketing-audit.html
2
http://www.cim.co.uk/marketingplanningtool/tech/tech5.asp
 MS Motosuit: Marketing Audit 4

EXECUTIVE SUMARY
 MS Motosuit: Marketing Audit 5

MAJOR ASSUMPTION
 MS Motosuit: Marketing Audit 6

DEFINITION OF RATINGS

S- Satisfactory (3.26 – 4.0)

These items represent the strong points of an

enterprise. Attention to these points is to be maintained

as long- term issue.

R- Reasonable (2.51 – 3.25)

Prevailing conditions are such that improvement cannot

be expected to lead immediately to tangible result as

compared to the effort to be made.

ID- Improvement Desirable (1.76 – 2.50)

Improvements are expected to result in cost savings,

additional or tangible result.

IN- Improvement Necessary (1.0 – 1.75)

An immediate action is considered urgent.

 MS Motosuit: Marketing Audit 7

TABLE 1

SUMMARY OF RATINGS

Over-all
Audit Item Particulars Individual Rating Interpretation
Rating
1.00 2.00 3.00 4.00
Knowledge
Knowledge of the Completeness
Market Product
Average
Effectiveness
Channel of
Efficiency
Distribution
Average
Effectiveness
Sales Force Efficiency
Management Productivity
Average
Customer Relations Effectiveness
and After Sales Motivation
Customer
Satisfaction
Average
Effectiveness
Advertisement and
Efficiency
Promotion
Average
Effectiveness
Customer
Pricing
Satisfaction
Average
Effectiveness
Packaging Costs
Average
 MS Motosuit: Marketing Audit 8

PRODUCT DESCRIPTION

Product could be a good, idea, method, information,

object, service, and many more. An end result of a process

that most closely meets the requirements of a particular

market or segment and yield enough profit to justify its

continued existence.3

For the subject company, MS MOTOSUIT brand has now

become the most recognized and best selling brand of

durable motorcycle seat cover in the Philippines today.

These seat covers are the result of years of hard work in

finding the best design, comfort and durability for one’s

riding experience.

MS MOTOSUIT is also in developing bar pads, dual seat

assembly and apparels for high intensity, physically

demanding world of motorcycle enthusiasts. Through

organizing and working closely with the best riders in the

history of motocross racing, the company has researched and

developed race accessories, seat covers and clothing that

provides riders with maximum comfort and performance. For

more than a decade MS MOTOSUIT has created the best

motorcycle apparel and seat cover in the Philippines, which

is able to withstand the elements and the torturous racing

3
(http://www.businessdictionary.com/definition/product.html)
 MS Motosuit: Marketing Audit 9

and riding conditions. Shown below are the product’s

representations.

FIGURE 1

MS MOTOSUIT PRODUCT LINE4

Motorcycle seat covers

Back packs

Apparels
4
www.msmotosuit.com
 MS Motosuit: Marketing Audit 10

The main product line of MS Motosuit is motorcycle

seat covers of different styles and design. For this study,

the proponents will focus only on the motorcycle seat

covers as the subject of the study.

 MS Motosuit: Marketing Audit 11

AREA OF AUDIT : MARKETING

ITEM : KNOWLEDGE OF THE MARKET

RATINGThongs : T-Back Boy Cut Panty

I. FINDINGS

A. STRENGTH (S)

• The company is the first to manufacture motorcycle

seat covers here in the Philippines since year

2000.

• The company exists for almost 10 years since they

legally registered their business from the year

2000.

• During the first 5 years of its operation, the

company has able to monopolize the entire

Philippine market in terms of motorcycle seat

cover.

• The company caters different dealers in the Luzon,

Visayas and Mindanao region.

• The company has able to establish connection with

motorcycle company here in the Philippines.

• The company has three stores here in the Visayas,

particularly in Mandaue City, Jones, and Tabugon,

Cebu.
 MS Motosuit: Marketing Audit 12

• The company is manufacturing quality products.

• The company has good relationship with their

suppliers.

• The company is aware of their lean and peak

periods.

• The company has been able to determine some of

their direct competitors.

• The company has set their target sales of no less

than 1000 pcs of set covers per month.

B. WEAKNESS(ES)

• The company was not able to identify some of their

competitors especially those small competitors.

• Due to high competition, the company is

experiencing a decrease in their demand.

C. OPPORTUNITY(IES)

• Expanding their market outside the Philippines

Visayas and Mindanao.

D. THREAT(S)

• Sales might decrease due to lots of competitors.

• Expansion of major competitors.

• Decrease in the demand of the product due to

customer preferences.

II. PROPOSED OPTION(S)

 MS Motosuit: Marketing Audit 13

• Maintain and improve the strong points.

• Maintain a good relationship with the suppliers.

• Create other store outlets in Luzon and Mindanao.

• Expand the target market as to outside of the

Philippines.

III. BENEFIT(S)

• Having a good relationship with the suppliers,

thus practicing a supply chain management will

ensure that the company will receive a quality raw

materials from their suppliers. In terms of

delivery, it would be in time and problems will be

avoided. Thus, their supplier will be loyal to the

company.

• By expanding their target market in Luzon and

Mindanao area and outside of the country, this

will give the company a wider coverage of

customers, increase the company’s sales thus

having good profitability.

 MS Motosuit: Marketing Audit 14

BASIS FOR DEMAND COMPUTATION

The demand of this study focuses on the number of

motorcycles all over the Philippines since MS Motosuit is

catering the regions of Luzon, Visayas and Mindanao.

The proponents had identified the number of

motorcycles registered in the Land Transportation Office.

Though the internet, the proponents had able to identify

the total number of motorcycles here in Cebu and its

percentage from the total number of motorcycles in the

Philippines in 2005. Using the principle of ratio and

proportion, the proponents computed the estimated number of

motorcycles all over the Philippines in 2005.

The proponents had also able to gather information on

the percentage of motorcycles from the total number of

vehicles in the Philippines in the years 2004 and 2005.

Using this data, the proponents computed the rate of

increase in the number of motorcycles in the Philippines

from 2004 up to 2005.

Using the estimated rate of increase in the number of

motorcycles in the Philippines, the proponents projected

the past and future demand.

 MS Motosuit: Marketing Audit 15

TABLE 2

NUMBER OF MOTORCYCLES IN CEBU, 20055

Percentage from the

Number of Total Number of
Motorcycles Motorcycles in the
Philippines (%)

123,417 5.3

TABLE 3

TOTAL NUMBER OF MOTORCYCLES IN THE PHILIPPINES

Year Number of Motorcycles

2005 2,328,623

COMPUTATION:

Let x = Total Number of Motorcycles in the Philippines

123, 417 : 0.053 = x : 1

X = 2, 328, 623

5
http://www.nscb.gov.ph/panguna.asp
http://www.abs-cbnnews.com/lifestyle/10/14/10/motorcycles-rule-philippine-roads
 MS Motosuit: Marketing Audit 16

TABLE 4

RATE OF INCREASE (2004- 2005)6

Growth Rate
2004 (%) 2005 (%)
(%)
Percentage of Motorcycles from the Total Number
41.4 46.9 5.5
of vehicles in the Philippines

6
http://www.nscb.gov.ph/panguna.asp
http://www.abs-cbnnews.com/lifestyle/10/14/10/motorcycles-rule-philippine-roads
 MS Motosuit: Marketing Audit 17

TABLE 5

COMPUTATION OF PAST DEMAND

Average
Number of Motor Useful Life of
Actual
Year Growth Rate Cycles in the a Motorcycle
Demand per
Philippines Seat Cover
Year
2005 5.5 2,328,623 5 yrs 465,725
2006 5.5 2,456,697 5 yrs 491,339
2007 5.5 2,591,815 5 yrs 518,363
2008 5.5 2,734,365 5 yrs 546,873
2009 5.5 2,884,755 5 yrs 576,951
 MS Motosuit: Marketing Audit 18

DEMAND ANALYSIS

The demand computation depicted on the table above is

increasing respectively starting from the year 2005 until

2009. The management makes sure that their product

distributed to the customer is durable enough in order to

get their trust.

Moreover, it was clearly shown that there are number

of motorists wants to innovate their motorcycles by putting

accessories on it since it doesn’t only looks fashionable

but also it will add elegance as well. Furthermore, MS

Motosuit Manufacturing produces seat covers to provide

customers’ needs and as well as to satisfy them. Thus, the

increase in demand every year only proves that there is an

increase in motorcycle users as well.

The above demand table restrains 5 years as useful

life of the seat covers based on the company’s view.

Therefore, the proponents divided the number of motorcycles

in the Philippines for every year which will now obtain the

demand’s value.
 MS Motosuit: Marketing Audit 19

DEMAND METHODS OF PROJECTIONS

After computing the average demand per year as

presented in the previous tables, the 5-year projection of

demand from 2010-2014 can be computed. The proponents used

the four methods of projection which are:

• Arithmetic Straight Line (SSL)

• Arithmetic Geometric Curve (AGC)

• Statistical Straight Line (SSL)

• Statistical Parabolic Curve (SPC)

These four methods will give different results. In

selecting the best method to be used, the proponents

considered the following aspects.

• Standard Deviation

• Average Growth Rate

• Principle of Conservatism

For the standard deviation, the proponents considered

the method that has the smallest standard deviation, for it

may have the smallest tendency to have a discrepancy in the

results. Another consideration is the average growth rate,

in which, the smallest growth rate must be the best choice.

The law of conservatism among the average growth rate of

the four methods must also be considered. The best method

 MS Motosuit: Marketing Audit 20

must gave an average growth rate which is very close or

equal to the growth rate of the past data.

TABLE 6

PAST AND PROJECTED DEMAND SUMMARY

SSL
DEMAND ASL AGC SPC
(# of
(# of (# of (# of (# of
Year motorcycle
motorcycle motorcycle motorcycle motorcycle
s)
s) s) s) s)
2005 465,725
2006 491,339
2007 518,363
2008 546,873
2009 576,951
2010 497,743 608,683 603,246 608,453
2011 504,147 642,161 631,045 641,457
2012 510,551 677,480 658,844 675,950
2013 516,954 714,741 686,642 711,930
2014 523,358 754,052 714,441 749,398
Stand
ard
51,227.28 0.36 1,244.75 22.52
Devia
tion
AGR 5.50% 1.26% 5.50% 4.32% 5.35%
 MS Motosuit: Marketing Audit 21

PAST AND PROJECT DEMAND ANALYSIS

The table projected above shows the computation of the

different methods of projection which will be used so that

the demand for the next years of the company’s operation

will be projected and presumed.

However, the above computation shows that AGC

(Arithmetic Geometric Curve) is the chosen method to be

used by the proponents since it has obtained the three

requirements in selecting the best method of projection.

Hence, it has the lowest standard deviation obtained, it

conforms the law of conservatism, and finally, though it

has the highest growth rate attained yet, the value is the

nearest so as to its past demand’s growth rate is concerned.

 MS Motosuit: Marketing Audit 22

FIGURE 2

LINE FITTING OF PAST AND PROJECTED DEMAND

 MS Motosuit: Marketing Audit 23

SUPPLIES

MS MOTOSUIT AND TOP THREE DIRECT COMPETITORS

TABLE 7

MS MOTOSUIT
Sales/week Sales/month Sales/year
Year (# of (# of (# of
motorcycles) motorcycles) motorcycles)
2010 ------ 2, 500 30, 000

TABLE 8

RIDE IT FOREVER
Sales/week Sales/month Sales/year
Year (# of (# of (# of
motorcycles) motorcycles) motorcycles)
2010 400 1,600 19,200

TABLE 9

OZ (ORIGINAL ZANDRO) RACING CORPORATION

Sales/week Sales/month Sales/year
Year (# of (# of (# of
motorcycles) motorcycles) motorcycles)
2010 400 1,600 19,200

TABLE 10

CHARLES RACING
Sales/week Sales/month Sales/year
Year (# of (# of (# of
motorcycles) motorcycles) motorcycles)
2010 200 800 9,600
 MS Motosuit: Marketing Audit 24

SUPPLY COMPUTATION

PAST SUPPLY

TABLE 11

MS MOTOSUIT MANUFACTURING

Annual Sales
Growth
Year (# of
Rate
motorcycles)
2005 43,177
2006 5.5% 45,552
2007 5.5% 48,057
2008 5.5% 50,700
2009 -30% 39,000
2010 -30% 30,000

TABLE 12

RIDE IT FOREVER

Annual Sales
Growth
Year (# of
Rate
motorcycles)
2005 14,691
2006 5.5% 15,499
2007 5.5% 16,351
2008 5.5% 17,250
2009 5.5% 18,199
2010 5.5% 19,200
 MS Motosuit: Marketing Audit 25

Continuation of Past Supply

TABLE 13

OZ (ORIGINAL ZANDRO) RACING

Annual Sales
Growth
Year (# of
Rate
motorcycles)
2005 14,691
2006 5.5% 15,499
2007 5.5% 16,351
2008 5.5% 17,250
2009 5.5% 18,199
2010 5.5% 19,200

TABLE 14

CHARLES RACING

Annual Sales
Growth
Year (# of
Rate
motorcycles)
2005 7,345
2006 5.5% 7,749
2007 5.5% 8,175
2008 5.5% 8,625
2009 5.5% 9,100
2010 5.5% 9,600
 MS Motosuit: Marketing Audit 26

TABLE 15

TOTAL SUPPLY

Name of Company
Total
MS Ride It Charles Total (# Others (#
OZ Racing Supply (#
Motosuit Forever Racing (# of of
Year (# of of
(# of (# of of Motorcycle Motorcycle
Motorcycle Motorcycle
Motorcycle Motorcycle Motorcycle s) s)
s) s)
s) s) s)
200 43,177 14,691 14,691 7,345 79,903 319,613 399,516
5
200 45,552 15,499 15,499 7,749 84,298 337,192 421,490
6
200 48,057 16,351 16,351 8,175 88,934 355,737 444,672
7
200 50,700 17,250 17,250 8,625 93,826 375,303 469,129
8
200 39,000 18,199 18,199 9,100 84,498 337,991 422,488
9
MS Motosuit: Marketing Audit 27
 MS Motosuit: Marketing Audit 28

TABLE 16

PAST AND PROJECTED SUPPLY SUMMARY

SUPPLY ASL AGC SSL SPC

Year # of # of # of # of # of
Motorcycles Motorcycles Motorcycles Motorcycles Motorcycles
2005
399,516
2006
421,490
2007
444,672
2008
469,129
2009
422,488
2010 426,983 429,415 459,534 391,557
2011 432,476 436,455 468,892 332,939
2012 437,970 443,611 478,250 254,899
2013 443,463 450,884 487,608 157,438
2014 448,956 458,276 496,967 40,554
Standard
Deviation 29,199.72 30,036.57 19,585.71 10,934.14
AGR 1.64% 1.26% 1.64% 1.98% -37.72%
 MS Motosuit: Marketing Audit 29

PAST AND PROJECTED SUPPLY ANALYSIS

Table 16 shows the summary of the past and projected

supply of the subject company and all the identified

competitors in the Philippines using the four methods of

projection.

Factors such as standard deviation, average growth

rate, and law of conservatism were the basis of choosing

the appropriate method. Each of the method was computed and

evaluated.

Among the four methods, Arithmetic Geometric Curve or

AGC was chosen. Although it yields the largest value of

standard deviation doesn’t mean that it has the least

undesirable results compare to the other three methods for

factors such as law of conservatism and average growth rate

were still to be considered. Next to evaluate is the

principle of law of conservatism whether the value is equal

or lesser than the annual growth rate or AGR of the past

supply. As observed, AGC gives the equal value of 1.64% to

the annual growth rate of the past supply of motorcycle

seat cover. For the last factor, the annual growth rate,

the least value of AGR the better. AGC gives the second

least positive value of AGR among the Arithmetic Straight

Line or ASL and Statistical Straight Line or SSL.

 MS Motosuit: Marketing Audit 30

Among the four methods of projection, Arithmetic

Geometric Curve or AGC qualifies to the factors that the

proponents will consider upon choosing the fitted method of

projection. Summing up, the Arithmetic Geometric Curve

(AGC) has the largest value of standard deviation, is equal

to the annual growth rate of the past demand, and the

second least positive value of annual growth rate.

Therefore, the best method for the projected demand would

be the AGC according to the proponents’ perception. The

characteristic of the AGC is that it is progressively

increasing. The curve will always increase and there will

never be a point that it will decrease. Relating to the

computed figure, the study is all about the motorcycle seat

cover, changing the seat cover of the motorcycle may not be

a necessity for every motorcycle drivers but the usefulness

of the seat cover will always decline in due time so

replacement of the item take place. And since the number of

motorcycles in the Philippines rapidly increases, the

demand for the Motorcycle seat cover also increases.

 MS Motosuit: Marketing Audit 31

FIGURE 3

LINE FITTING OF PAST AND PROJECTED SUPPLY

 MS Motosuit: Marketing Audit 32

PAST DEMAND AND PAST SUPPLY GAP

TABLE 17

PAST DEMAND AND SUPPLY

% MARKET
PAST DEMAND PAST SUPPLY MARKET GAP
GAP
YEAR (# of (# of (# of
(# of
motorcycle) motorcycle) motorcycle)
motorcycle)
2005 465,725 399,516 66,208 14.22
2006 491,339 421,490 69,850 14.22
2007 518,363 444,672 73,691 14.22
2008 546,873 469,129 77,744 14.22
2009 576,951 422,488 154,463 26.77

FIGURE 4

PAST DEMAND AND SUPPLY GRAPH

 MS Motosuit: Marketing Audit 33

PAST DEMAND AND SUPPLY ANALYSIS

 MS Motosuit: Marketing Audit 34

PROJECTED DEMAND AND PROJECTED SUPPLY GAP

TABLE 18

PROJECTED DEMAND AND SUPPLY

%
PROJECTED PROJECTED MARKET
YEAR MARKET
DEMAND SUPPLY GAP
GAP
2010 608,683 429,415 179,268 29.45
2011 642,161 436,455 205,706 32.03
2012 677,480 443,611 233,869 34.52
2013 714,741 450,884 263,857 36.92
2014 754,052 458,276 295,775 39.22

FIGURE 5

PROJECTED DEMAND AND SUPPLY GRAPH

 MS Motosuit: Marketing Audit 35

PROJECTED DEMAND AND SUPPLY GAP ANALYSIS

 MS Motosuit: Marketing Audit 36

TABLE 19

2009 MARKET SHARE

ANNUAL DEMAND ANNUAL SUPPLY

NAME OF MARKET
(# of (# of
COMAPNY SHARE
motorcycles) motorcycles)

MS
576,951 39,000 6.76
MOTOSUIT
RIDE IT
576,951 18,199 3.15
FOREVER
OZ RACING 576,951 18,199 3.15
CHARLES
576,951 9,100 1.58
RACING
MARKET GAP 576,951 154,463 26.77
OTHERS 576,951 492,453 85.35

FIGURE 6

2009 MARKET SHARE PIE CHART

 MS Motosuit: Marketing Audit 37

2009 MARKET SHARE ANALYSIS

 MS Motosuit: Marketing Audit 38

TABLE 20

2011 MARKET SHARE

ANNUAL DEMAND ANNUAL SUPPLY

NAME OF MARKET
(# of (# of
COMAPNY SHARE
motorcycles) motorcycles)

MS MOTOSUIT 642,161 43,408 6.76

RIDE IT
642,161 20,256 3.15
FOREVER
OZ RACING 642,161 20,256 3.15
CHARLES
642,161 10,128 1.58
RACING
MARKET GAP 642,161 205,706 32.03
OTHERS 642,161 111,658 17.39

FIGURE 7

2011 MARKET SHARE PIE CHART

 MS Motosuit: Marketing Audit 39

2011 MARKET SHARE ANALYSIS

MS Motosuit: Marketing Audit 40
 MS Motosuit: Marketing Audit 41

MAJOR COMPETITORS

Company name: Original Zandro Racing Corporation

or Ozracing

Address: 479 Archbishop Reyes Avenue

Cebu City Philippines 6000

Contact #: (032) 234 - 4868

Company name: Charles Racing

Address: 87-A Borromeo Street

Cebu City 6000

Contact #: (032) 235 - 4557

Company name: Ride – It Forever

Address: 77/12 Moo 16,

Tambon Tha Pha Pong district,

Ratchaburi 70110.

Contact #: (032) 268 - 5111

 MS Motosuit: Marketing Audit 42

LIST OF DIRECT COMPETITORS

 OZracing

 Ride – It Forever

 Charles Racing

 NXTracing

 RUdesign

 Monster Energy

 Repsol

 Brembo

 DBS

 Motormate

 CArera

 XML

 Skydrive

 Roadrunner

 Xracing

 Tarsier Graphics

 Motosports

 Motorstar

 Motorace
 MS Motosuit: Marketing Audit 43

 Foxracing

 Flowtech

LIST OF INDIRECT COMPETITORS

 Honda

 Yamaha

 Suzuki

 Kawasaki

 Skygo

 Rusi

 Loncin

 Jianshe

 Kymco

 Motostar

 Sunriser