COMSATS Institute of Information and Technology Lahore

E- Business
Marketing Plan of Subhenoor Transportation

Submitted To:
Ms. Shumaila

(Lecturer)

Submitted By:
Aslam Javed Fa 09-MBA-024

Burair Haider Fa 09-MBA-033

COMSATS INSTITUTE OF INFORMATION AND TECHNOLOGY

LAHORE

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What is our idea?

We are working on new idea of providing road transport booking and other
facilities online. Major services will be provided online however telephone services will
also be available as per demand of customers. Vehicles (cars/vans/coasters etc.) Will
be outsourced. However we will hire our own drivers. In case of emergency, professional
drivers may be outsourced as well.

Company Ownership:
SUBHENOOR is founded and owned by Subhenoor Group.

Situation Analysis:

Subhenoor Transportation is entering in its first year of business. The basic

market need is for a professional, reliable, transportation service offering an
excellent experience at a reasonable price. There are three distinct segments that are in
need of these services: families, students and business travelers. Subhenoor will
meet the market need by offering a professional transportation service for different
areas.

Vision
Be the respectable and bright transporter among dark
sectors.

Mission

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The mission of Subhenoor Transportation is to provide

the customer the finest transportation service available at a
reasonable price.

Marketing Objectives:

• Steadily gain in market share.

• Increase repeat customers by 3% per quarter.
• Decrease customer acquisition costs, measured by a decrease in marketing costs
divided by the number of new customers.

Financial Objectives:

• Increase the profit margin by 4% per quarter.

• Decrease training costs of employees every two quarters while
simultaneously improving service quality.
• Decrease the operation costs of the rented vehicles through improved preventive
maintenance.

Service Offering:

Subhenoor provides a transportation solution for the different areas.

SUBHENOOR can provide travel on short notice if cars/vehicles are available, but they
generally work with a reservation system. A customer would call in advance and provide
SUBHENOOR with travel information. SUBHENOOR would schedule the pickup time
and then call and send an email to confirm the pickup. SUBHENOOR would meet the
customer outside of baggage Keys tothe
claim after Success
customer has picked up their luggage and
would drive them home.
The keys to success are the factors that make the
difference between a successful business and a failed
operation. Subhenoor's keys are:

Online access

Reliability

Convenience

Professionalism

Customer Loyalty 3
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Critical Issues:

Subhenoor is still in the exploratory stages as a service provider. The critical issues
that it faces are the following:

• To build a loyal customer base that regularly uses Subhenoor.

• To train the employee/drivers to offer outstanding service. This issue will be
addressed by developing a unique compensation structure that intensifies this
type of behavior.

Start-up Summary:
• SUBHENOOR' start-up costs will include all the equipment needed for the home-
based office, legal fees, website creation, and start-up advertising.
• The office equipment will be the largest chunk of the start-up expenses. This
equipment includes a computer system, printer, and office supplies. The
computer should have at least a 3 gigahertz Celeron/ Pentium processor, 1
gigabytes of RAM, 120 gigabyte hard drive, and a rewritable CD- ROM for
backing up the system. A DSL line will need to be set up as well. SUBHENOOR
will also need some mobile phones. The advantage of the cell phones is it allows
two way communication from the base to the cars/vehicles over cellular
frequencies but at a reduced rate.
• The office will need some furniture such as a desk, file cabinets. The legal fees
are used for the formation of the business as well as for reviewing/generating
standard client contracts.

Start-up Requirements

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Start-up Expenses
Legal Rs.3,000
Stationery etc. Rs.1000
Brochures Rs.1000
Office equipment Rs.500
Website creation Rs.3000
Computer System Rs.10,000
Total Start-up Expenses Rs.18,500

Market Analysis

Market Summary:

Subhenoor Transportation possesses good information about the market and

knows a great deal about the common attributes of the most prized and loyal customers.
Subhenoor will leverage this information to better understand who is served, their
specific needs, and how Subhenoor can best communicate with them.

Customers and their Needs:

Subhenoor Transportation is providing customers with a reliable, professional, airport

transportation service for families and business travelers. Subhenoor seeks to fulfill the
following benefits that are important to customers.

• Convenience: Having the transportation ready to pick up the traveler has

significant value.
• Reliability: A lack of reliability for any leg of the journey is an easy way to ruin a
vacation/trip.
• Professionalism: The targeted customers have a high expectation for customer
service and Subhenoor intends to exceed these expectations.

Market Trends:

Within the last five years, the transportation industry has seen the trend of
customers moving from driving themselves to the to utilizing other forms of
transportation such as public transportation and other private transportation services.
Tour of families/private firms/ educational institutes also rely on private transportation
services.

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Market Growth:

The growth rate for the transportation sector has been 4% for the last three years
and is forecasted to reach 5.6% for the next four years. (Not exact figure)

The increase in growth is forecasted due to several factors:

• An increase in business travel.

• Increased problems associated with driving and parking automobiles.
• The recognition of the ever-decreasing amount of free time, and the time that is
saved by utilizing a transportation service.
• Increased tours of educational tours for informatory and entertainment purposes.

Marketing Strategy:

SUBHENOOR's marketing/sales strategy will address each of our three segmented

targeted groups:

Families/individuals/Educational Institutes:

SUBHENOOR will be using advertisements (both traditional and online) as a way

to increase visibility for the company. The advertisements will be placed in the the
local newspaper with the highest readership level in the area. The ads will appear in
the weekly travel section. Subhenoor will also be working with community groups,
school, colleges and universties to build up a network of users. SUBHENOOR
believes that working with these groups will provide them with a steady flow of
customers. Additionally, since a lot of these groups are close knit among members,
referrals will be quite powerful when they are coming from a member who already has
established a trust bond with the other organizational member.

Business Travelers:

SUBHENOOR will be contacting the travel department of many of the different

companies in Lahore that have employees who are traveling frequently and tell them
about SUBHENOOR's service and offer them an introductory discount. This will be an
important segment to win over, as companies routinely have employees traveling
throughout the year. Businesses are also valuable because once the initial contact is
made, the relationship can be turned into a steady stream of business. Additionally,
there will be advertisements targeted for this market segment. The ads will appear in
the Business Journal of Lahore as well as the business section of the papers.

Target Marketing:

The customers can be divided into three groups: families/individuals on pleasure

trips, educational institutes and business travelers.

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The first and second group is taking a trip for pleasure and will either be an individual or
a family/group. This group does not typically mind paying a bit more for a solution that
takes care of their transportation. Since they are on vacation, they appreciate having a
service that gets them to the in a seamless way so they do not have to worry about
anything. All they have to do is make the reservation and show up at the arranged
pickup point.

The third group is the business traveler. With SUBHENOOR, there is a transportation
service that functions like a luxury (they can pre-schedule pick up dates and be taken
directly home/office) but without the overly fancy car and the high price. As companies
are always looking at ways to cut costs, SUBHENOOR offers a very reasonable solution
in terms of comfort and cost.

Positioning:

SUBHENOOR will position itself as a professional, reliable transportation service

with affordable rates. SUBHENOOR will achieve the desired positioning by leveraging its
competitive edge.

SUBHENOOR' competitive advantage will be based on an incentive system that

rewards the driver economically when they achieve good service, develop repeat
customers and act in a team fashion instead of competing against other company
drivers. This incentive system will reward drivers when:

Strategy Pyramids:

The single objective for Subhenoor is to position itself as the market leading ride
service. The marketing strategy will seek to first create customer awareness regarding
Subhenoor and its services offered, develop its customer base, and work toward
building strong customer loyalty and new customer referrals.

The message that Subhenoor seeks to communicate is that it offers luxury

service without a luxury price. This will appeal to both business travelers as well as
families. This message will be communicated through a variety of methods. The first
method of communication will be advertisements through internet. The second method
of communication will be visibility generated through relationships cultivated with
organizations. The last method of communication will be networking with different
companies.

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SWOT Analysis
The following SWOT analysis captures the key strengths and weaknesses within
the company, and describes the opportunities and threats facing Subhenoor.

Strengths:

• Well-trained employees.
• An innovative compensation system that prizes customer satisfaction, customer
referrals, and repeat business.
• A strong, market-driven business model.
• Well educated and energetic spirits.

Weaknesses:

• A lack of brand equity because of the start-up nature of this organization.

• The inability to raise large amounts of capital.
• The difficulty to find above average employees.

Opportunities:

• Participation in a high-demand industry.

• Increased profits as operating efficiencies are gained.
• Steady future demand.

Threats:

• Future/potential competition from a franchise from another market.

• Some sort of shattering event that has a significant, negative effect on the travel
industry.
• Unexpected governmental regulation of the transportation industry.
• Increasing fuel prices.

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PEST Analysis

Political:

Politics has much impact on a business, because frequent change in the

government policies or frequent change of government will affect the business in
the following ways such as:

• G.S.T

• import duty

• freight charges

• excise duty etc

Our business can also be affected by un- stability or any kind of strikes.

Economical:
In economic crisis as we all know that when inflation increase then it
causes to reduce the purchasing power of people and in crisis every business
has to suffer a lot or it persuades to conduct business at breakeven point for a
short period of time to survive in the market. Our business also has some threats
but due to competitive prices we have somehow a better ability to survive in bad
conditions.

Sociological:

Social factors also affect the level of consumption of services. Because

due to special events alike marriages and in spring seasons sale can be grow
well. This is due to special bookings for,

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• Tours

• marriage

• conferences(out of the city)

• Parties etc.

Technological:

Technology has great importance in this era where we stand today, that’s
why we also focus on to provide online services. Technology plays a very
important role and provides the certain benefits to customer

• Easy access to our products and services

• Facility of customization

• Make order online

• Make payment by sitting at home

Vehicles are known by their models so it is crucial to provide better models

for travel.

Competition
This area currently has several competing transportation systems:

• Public Transportation: Several companies are providing rapid transit service to

the customers. While this is an inexpensive alternative, there are several
disadvantages. The service commonly does not run all hours of the night. The
rapid transit also requires you to manage all of your luggage yourself.

• Taxi Service: Taxis do provide service to and from the, however, you cannot
book the trip in advance, forcing you to call them right before you want to travel.
The level of service is inconsistent from taxi service to taxi service as well as from
occasion to occasion. Taxis can also be quite expensive if you are going out to
the suburbs.

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• Parking: Parking in big cities is a big problem in these days. Driving yourself
has the advantage of not having to deal with anyone else; however, there is
always the risk of damage to your car when it is parked at the parking.

• Shuttle Service: This option packs people into a van and takes them to the
destinations. This is a less expensive option; however, it takes longer to make the
commute due to the other customers that are traveling with you. Additionally, you
lose out on the personalized service relative to private service.

Buying Pattern:

The buying patterns of these services vary based on the length of the trip, who is
paying for it, and if it is a last minute or planned trip. The longer the trip, the more
economical a transportation option is relative to parking. A large percentage of business
travelers use an upscale transportation solution. Many firms also facilitate their
employees with regular pick and drop. If the trip is planned at the last minute, taxi
service might be the only option for someone to drive you; however, Shbhenoor will offer
last minute rides if cars are available.

Marketing Mix
Subhenoor’s marketing mix is comprised of the following approaches to pricing,
distribution, advertising and promotion, and customer service.

Product:
It is a service business and has discussed above.

Pricing:

The pricing model will be based on a per-trip rate with a slight discount offered for
round trip service.

PRICING STRATEGY:

Prices are settled according to market's price. But we tried to set the prices
that really valuable against money.

SALE PRICE:

Sale price are different and vary from trip to trip.

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PAYMENT TERMS:

In COMFORT EXPRESS’s Payments will made by following modes:

• By cash

• Online by credit/debit card

• 10% advance and remaining 90% may be collected during the tour or right
at the end of tour

PLACEMENT
LOCATION

• Mainly working on net however a home base office will also be

added.

• Customer can contact us from any place of Lahore.

DISTRIBUTION CHANNEL (DIRECT)

Vehicle will be provided at required place.

PROMOTION
Promotion and Advertising: Subhenoor will use various activities to achieve
positioning and visibility including advertisements and strategic relationships.

ADVERTISEMENT:

Advertisements are made by:

• LOCAL CABLE NETWORK

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• MAGAZINES

• BILLBOARDS

• INTERNET

• NEWSPAPER

• OTHER WEBSITES

• BUSINESS MAGAZINES

• FM CHANNEL OF LAHORE CHAMBER OF COMMERCE

PROMOTION PROGRAM:

Promotional programs are used to increase the sale level, so we will do:

• Discounts

• Gifts

10 % of total sale is maintained for advertisement.

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Marketing Research:

Subhenoor Transportation used a survey to gain insight into prospective

customer’s preferences, needs and desires. The surveys were given out to travelers at
different bus and taxi stands. The surveys were composed of a total of 10 questions.
The number of questions was kept low to encourage people to complete the survey.

The careful construction of surveys is imperative to achieve a statistically significant

results that are meaningful. A total of 200 questionnaires were handed out and 59 were
returned completed, a fairly high return rate.

The results of the survey ultimately served two functions:

1. Confirm/validate previously held assumptions about usage of online resources for

travelling.
2. Provide insight into prospective customer’s preferences and thought processes.

The surveys provided enough amount of information for both functions. Due to the
large amount of information that was mined, Subhenoor plans to conduct more primary
research in coming months.

Financials, Budgets, and Forecasts:

This section will offer a financial overview of Subhenoor Transportation as it

relates to the marketing activities. Subhenoor will address break-even analysis, sales
forecasts, expense forecasts, and how they link to the marketing strategy.

Break-even Analysis:

The break-even analysis indicates that Rs. 195,500 is needed in monthly revenue
to reach the break-even point.

Break-even Analysis

Monthly Revenue Break- Rs. 295,500

even

Assumptions:
Average Percent Variable 70%
Cost
Estimated Monthly Fixed 10%
Cost

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Sales Forecast:

The first month will be spent setting up the business. By month two the business office
will be in order and SUBHENOOR will have been working with associations to create
visibility for the company. SUBHENOOR will have two drivers and will be paying them a
base monthly wage on the assumption that it wants to have the drivers ready when fares
come up.

Month three will see an increase in fares and things will be getting busy. Business will
continue to grow and by month five a third driver will be brought on board. It will not be
until month 11 that a fourth driver will be hired.

Sales Forecast

Month 1 Month 2 Month 3

Sales
Families/individuals/ Rs.92,887 Rs.145,885 Rs.169,874
Edu. Institutes
Business travelers Rs.73,455 Rs.136,874 Rs.149,874
Total Sales Rs.166,342 Rs.282,759 Rs.319,748

Expense Forecast:
The marketing expenses are to budget so that they are higher than normal during the
first quarter. This elevated amount is budgeted to achieve initial presence and visibility
during the first four months of this start-up operation. The second and third quarter will
show a general decrease in expenses, returning to normal levels after the initial spike.
The last quarter will see a spike in expenses, a recognition that this is the time that has
the most travel occurring. The expense forecast will serve as a tool to keep the
department on target and provide indicators when a modification or correction must be
made for the implementation of the marketing plan.

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Management Issues
Controls:

The purpose of Subhenoor Transportation’s marketing plan is to serve as a

guide or road map for the organization. The following areas will be monitored to
gauge performance.

• Revenue: monthly and annual.

• Expenses: monthly and annual.
• Repeat customer rate (a relative comparison to the total amount of business).
• Customer satisfaction: determined through the mining of opinions from after-
service questionnaires/feedback forms.

Contingency Planning/Difficulties and Risks:

• Over-reliance on a few suppliers.
• Over-reliance on key staff.
• Over-reliance on a small customer base.
• Customer bad debts leading to cash flow problems.
• Partnership difficulties.
• Security issues.
• Lack of resources at key stages of development.
• Problems generating a sufficiently large customer base.
• The entry of a well-financed competitor with a similar business model.
• Customer's perception that Subhenoor does not offer a value-added service.

Worst Case Scenarios Include:

• Determining that the business cannot support itself.

• Having to liquidate equipment to cover liabilities.

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• Entirely too optimistic sales forecasts.

References:

• http://www.mplans.com
• Wikipedia