Motosuit Marketing Audit

1MS Motosuit: Marketing Audit

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


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.html2 http://www.cim.co.uk/marketingplanningtool/tech/tech5.asp

http://www.cim.co.uk/marketingplanningtool/tech/tech5.asp

http://www.marketingteacher.com/lesson-store/lesson-marketing-audit.html


EXECUTIVE SUMARY


MAJOR ASSUMPTION


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.


TABLE 1

SUMMARY OF RATINGS

Audit Item Particulars Individual RatingOver-all Rating

Interpretation

1.00 2.00 3.00 4.00

Knowledge of the Market

KnowledgeCompletenessProductAverage

Channel of Distribution

EffectivenessEfficiencyAverage

Sales Force Management

EffectivenessEfficiencyProductivity

AverageCustomer Relations and After Sales

EffectivenessMotivationCustomer

SatisfactionAverage

Advertisement and Promotion

EffectivenessEfficiencyAverage

Pricing

EffectivenessCustomer

SatisfactionAverage

PackagingEffectiveness

CostsAverage


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)


and riding conditions. Shown below are the product’s

representations.

FIGURE 1

MS MOTOSUIT PRODUCT LINE4

Motorcycle seat covers

Back packs

Apparels4 www.msmotosuit.com


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.

Thongs T-Back Boy Cut Panty


AREA OF AUDIT : MARKETING

ITEM : KNOWLEDGE OF THE MARKET

RATING :

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.

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)

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.


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.


TABLE 2

NUMBER OF MOTORCYCLES IN CEBU, 20055

Number of Motorcycles

Percentage from the Total Number of

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.asphttp://www.abs-cbnnews.com/lifestyle/10/14/10/motorcycles-rule-philippine-roads

http://www.nscb.gov.ph/panguna.asp


TABLE 4

RATE OF INCREASE (2004- 2005)6

2004 (%) 2005 (%)

Growth Rate (%)

Percentage of Motorcycles from the Total Number of vehicles in the Philippines

41.4 46.9 5.5

6 http://www.nscb.gov.ph/panguna.asphttp://www.abs-cbnnews.com/lifestyle/10/14/10/motorcycles-rule-philippine-roads

http://www.nscb.gov.ph/panguna.asp


TABLE 5

COMPUTATION OF PAST DEMAND

Year Growth RateNumber of Motor Cycles in the Philippines

Useful Life of a Motorcycle Seat Cover

Average Actual

Demand per Year

2005 5.5 2,328,623 5 yrs 465,7252006 5.5 2,456,697 5 yrs 491,3392007 5.5 2,591,815 5 yrs 518,3632008 5.5 2,734,365 5 yrs 546,8732009 5.5 2,884,755 5 yrs 576,951


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.


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 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

Year

DEMAND(# of

motorcycles)

ASL(# of

motorcycles)

AGC(# of

motorcycles)

SSL(# of

motorcycles)

SPC(# of

motorcycles)

2005 465,7252006 491,3392007 518,3632008 546,8732009 576,9512010 497,743 608,683 603,246 608,4532011 504,147 642,161 631,045 641,4572012 510,551 677,480 658,844 675,9502013 516,954 714,741 686,642 711,9302014 523,358 754,052 714,441 749,398Standard Deviation

51,227.28 0.36 1,244.75 22.52

AGR 5.50% 1.26% 5.50% 4.32% 5.35%


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.


FIGURE 2

LINE FITTING OF PAST AND PROJECTED DEMAND


SUPPLIES

MS MOTOSUIT AND TOP THREE DIRECT COMPETITORS

TABLE 7

MS MOTOSUIT

YearSales/week

(# of motorcycles)

Sales/month(# of

motorcycles)

Sales/year(# of

motorcycles)

2010 ------ 2, 500 30, 000

TABLE 8

RIDE IT FOREVER

YearSales/week

(# of motorcycles)

Sales/month(# of

motorcycles)

Sales/year(# of

motorcycles)

2010 400 1,600 19,200

TABLE 9

OZ (ORIGINAL ZANDRO) RACING CORPORATION

YearSales/week

(# of motorcycles)

Sales/month(# of

motorcycles)

Sales/year(# of

motorcycles)

2010 400 1,600 19,200

TABLE 10

CHARLES RACING

YearSales/week

(# of motorcycles)

Sales/month(# of

motorcycles)

Sales/year(# of

motorcycles)

2010 200 800 9,600


SUPPLY COMPUTATION

PAST SUPPLY

TABLE 11

MS MOTOSUIT MANUFACTURING

YearGrowth Rate

Annual Sales(# of

motorcycles)

2005 43,1772006 5.5% 45,5522007 5.5% 48,0572008 5.5% 50,7002009 -30% 39,0002010 -30% 30,000

TABLE 12

RIDE IT FOREVER

YearGrowth Rate

Annual Sales(# of

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


Continuation of Past Supply

TABLE 13

OZ (ORIGINAL ZANDRO) RACING

YearGrowth Rate

Annual Sales(# of

motorcycles)

2005 14,6912006 5.5% 15,4992007 5.5% 16,3512008 5.5% 17,2502009 5.5% 18,1992010 5.5% 19,200

TABLE 14

CHARLES RACING

YearGrowth Rate

Annual Sales(# of

motorcycles)

2005 7,3452006 5.5% 7,7492007 5.5% 8,1752008 5.5% 8,6252009 5.5% 9,1002010 5.5% 9,600


TABLE 15

TOTAL SUPPLY

Year

Name of CompanyTotal (#

of Motorcycle

s)

Others (# of

Motorcycles)

Total Supply (#

of Motorcycle

s)

MS Motosuit (# of

Motorcycles)

Ride It Forever (# of

Motorcycles)

OZ Racing (# of

Motorcycles)

Charles Racing (#

of Motorcycle

s)2005 43,177 14,691 14,691 7,345 79,903 319,613 399,516

2006 45,552 15,499 15,499 7,749 84,298 337,192 421,490

2007 48,057 16,351 16,351 8,175 88,934 355,737 444,672

2008 50,700 17,250 17,250 8,625 93,826 375,303 469,129

2009 39,000 18,199 18,199 9,100 84,498 337,991 422,488


TABLE 16

PAST AND PROJECTED SUPPLY SUMMARY

Year SUPPLY# of

Motorcycles

ASL # of

Motorcycles

AGC# of

Motorcycles

SSL # of

Motorcycles

SPC# of

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%


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.


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.


FIGURE 3

LINE FITTING OF PAST AND PROJECTED SUPPLY


PAST DEMAND AND PAST SUPPLY GAP

TABLE 17

PAST DEMAND AND SUPPLY

YEARPAST DEMAND

(# of motorcycle)

PAST SUPPLY(# of

motorcycle)

MARKET GAP(# of

motorcycle)

% MARKET GAP

(# of motorcycle)

2005 465,725 399,516 66,208 14.222006 491,339 421,490 69,850 14.222007 518,363 444,672 73,691 14.222008 546,873 469,129 77,744 14.222009 576,951 422,488 154,463 26.77

FIGURE 4

PAST DEMAND AND SUPPLY GRAPH


PAST DEMAND AND SUPPLY ANALYSIS


PROJECTED DEMAND AND PROJECTED SUPPLY GAP

TABLE 18

PROJECTED DEMAND AND SUPPLY

YEARPROJECTED DEMAND

PROJECTED SUPPLY

MARKET GAP

% MARKET GAP

2010 608,683 429,415 179,268 29.452011 642,161 436,455 205,706 32.032012 677,480 443,611 233,869 34.522013 714,741 450,884 263,857 36.922014 754,052 458,276 295,775 39.22

FIGURE 5

PROJECTED DEMAND AND SUPPLY GRAPH


PROJECTED DEMAND AND SUPPLY GAP ANALYSIS


TABLE 19

2009 MARKET SHARE

NAME OF COMAPNY

ANNUAL DEMAND (# of

motorcycles)

ANNUAL SUPPLY (# of

motorcycles)

MARKET SHARE

MS MOTOSUIT

576,951 39,000 6.76

RIDE IT FOREVER

576,951 18,199 3.15

OZ RACING 576,951 18,199 3.15CHARLES RACING

576,951 9,100 1.58

MARKET GAP 576,951 154,463 26.77OTHERS 576,951 492,453 85.35

FIGURE 6

2009 MARKET SHARE PIE CHART


2009 MARKET SHARE ANALYSIS


TABLE 20

2011 MARKET SHARE

NAME OF COMAPNY

ANNUAL DEMAND (# of

motorcycles)

ANNUAL SUPPLY (# of

motorcycles)

MARKET SHARE

MS MOTOSUIT 642,161 43,408 6.76RIDE IT FOREVER

642,161 20,256 3.15

OZ RACING 642,161 20,256 3.15CHARLES RACING

642,161 10,128 1.58

MARKET GAP 642,161 205,706 32.03OTHERS 642,161 111,658 17.39

FIGURE 7

2011 MARKET SHARE PIE CHART


2011 MARKET SHARE ANALYSIS



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


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

Foxracing

Flowtech

LIST OF INDIRECT COMPETITORS


Honda

Yamaha

Suzuki

Kawasaki

Skygo

Rusi

Loncin

Jianshe

Kymco

Motostar

Sunriser

Documents

Motosuit Marketing Audit