Introduction
Bajaj Motors is one of the largest and most competitive two wheeler manufacturing company of the world. It is present in over 50 countries all over the globe. The company is dominantly present in Africa and Latin America with increasing market share every year. Although Bajaj already exporting their product in Nigeria, but we think that they should plan to establish a manufacturing plant in that country.
Pro’s and Con’s of entering the market
➢ The two wheeler market runs on high economies of scale. So it is very essential to capture the mass target market. Else, huge loss may occur.
➢ The need for technical expertise is high.
➢ Owning a strong distribution network is important and is very costly.
➢ Suppliers of auto components are fragmented and are extremely critical for this industry since most of the component work will be outsourced. Proper supply chain management is a costly yet a critical need.
➢ The industry rivalry is extremely high with any product being matched in a few months by competitor. This instinct of the industry is primarily driven by the technical capabilities acquired over years of gestation under the technical collaboration with international players. As Bajaj, along with its competitors, such as Hero Honda, TVS, Yamaha, are active at multipoint competitions; it is likely for the competitors to enter if Bajaj is successful at Nigeria.
➢ Petrol prices are always fluctuating in Nigeria. But with the recent change in the policy to reduce the subsidy, the prices of petrol will remain constant at the current prices. This will have a positive effect on purchases of two wheelers.
➢ The second hand car prices of small cars have come down sharply in the recent past. This will shift the demand from higher-end two-wheelers to cars and affect the demand for two-wheelers negatively. A further drop in second-hand car prices will lead to pressure on the two-wheeler majors who plan to release higher-end scooters and motorcycles.
➢ Availability of credit purchase for vehicles has to be mandatory, as we oblige to maximize economies of scale.
The Global Economy
1. Macroeconomic Performance: Some macro–economic factors, which are relevant to our project, information have been provided in tables:
GDP (purchasing power parity):
$336.2 billion (2008 est.) $319.3 billion (2007 est.) $300.1 billion (2006 est.) note: data are in 2008 US dollars
GDP (official exchange rate):
$207.1 billion (2008 est.)
|Year |GDP – official exchange rate |
|2005 |$120.58 |
|2006 |$129.22 |
|2007 |$132.89 |
|2008 |$131.27 |
|2009 |$128.65 |
GDP - real growth rate:
5.3% (2008 est.)
|Year |GDP – real growth rate |Rank |Percent Change |Date of Information |
|2005 |6.20% |44 |-12.68% |2004 est. |
|2006 |6.90% |43 |11.29% |2005 est. |
|2007 |5.30% |90 |-23.19% |2006 est. |
|2008 |6.40% |66 |20.75% |2007 est. |
|2009 |5.30% |78 |-17.19% |2008 est. |
GDP - per capita (PPP):
|Year |GDP – per capita in US$/Year |
|2003 |$357.36 |
|2004 |$388.09 |
|2005 |$416.81 |
|2006 |$440.99 |
|2007 |$470.53 |
Labor force:
51.04 million (2008 est.)
|Year |Labor force |Rank |Percent Change |Date of Information |
|2005 |55,670,000 |9 |2.41 % |2004 est. |
|2006 |57,210,000 |9 |2.77 % |2005 est. |
|2007 |48,990,000 |9 |-14.37 % |2006 est. |
|2008 |50,130,000 |9 |2.33 % |2007 est. |
|2009 |51,040,000 |9 |1.82 % |2008 est. |
Unemployment rate:
4.9% (2007 est.)
|Year |Unemployment rate |Rank |Percent Change |Date of Information |
|2003 |28.00 % |30 | |1992 est. |
|2006 |2.90 % |27 |-89.64 % |2005 est. |
|2007 |5.80 % |65 |100.00 % |2006 est. |
|2008 |4.90 % |65 |-15.52 % |2007 est. |
|2009 |4.90 % |60 |0.00 % |2007 est. |
Population below poverty line:
70% (2007 est.)
Inflation rate (consumer prices):
11.6% (2008 est.)
5.4% (2007 est.)
|Year |Inflation rate (consumer prices) |Rank |Percent Change |Date of Information |
|2005 |16.50% |211 |19.57% |2004 est. |
|2006 |13.50% |204 |-18.18% |2005 est. |
|2007 |10.50% |192 |-22.22% |2006 est. |
|2008 |5.40% |131 |-48.57% |2007 est. |
|2009 |11.60% |166 |114.81% |2008 est. |
Industrial production growth rate:
2.8% (2008 est.)
|Year |Industrial production growth rate |Rank |Percent Change |Date of Information |
|2005 |1.80 % |132 |-21.74 % |2004 est. |
|2006 |3.80 % |90 |111.11 % |2005 est. |
|2007 |-1.60 % |157 |-142.11 % |2006 est. |
|2008 |3.20 % |115 |-300.00 % |2007 est. |
|2009 |2.80 % |88 |-12.50 % |2008 est. |
Current account balance:
$3.877 billion (2008 est.)
$2.203 billion (2007 est.)
|Year |Current account balance |Rank |Percent Change |Date of Information |
|2005 |$5,228,000,000 |28 |263.31 % |2004 est. |
|2006 |$12,590,000,000 |26 |7.06 % |2005 est. |
|2007 |$12,590,000,000 |21 |124.94 % |2006 est. |
|2008 |$2,514,000,000 |42 |-80.03 % |2007 est. |
|2009 |$4,847,000,000 |34 |92.80 % |2008 est. |
Exports:
$76.03 billion (2008 est.)
$61.82 billion (2007 est.)
|Year |Exports |Rank |Percent Change |Date of Information |
|2005 |$33,990,000,000 |44 |55.92 % |2004 est. |
|2006 |$52,160,000,000 |39 |53.46 % |2005 est. |
|2007 |$59,010,000,000 |40 |13.13 % |2006 est. |
|2008 |$61,790,000,000 |42 |4.71 % |2007 est. |
|2009 |$76,800,000,000 |42 |24.29 % |2008 est. |
Imports:
$46.3 billion (2008 est.)
$38.8 billion (2007 est.)
|Year |Imports |Rank |Percent Change |Date of Information |
|2005 |$17,140,000,000 |52 |17.88 % |2004 est. |
|2006 |$25,950,000,000 |50 |51.40 % |2005 est. |
|2007 |$25,100,000,000 |55 |-3.28 % |2006 est. |
|2008 |$38,500,000,000 |51 |53.39 % |2007 est. |
|2009 |$45,490,000,000 |51 |18.16 % |2008 est. |
Reserves of foreign exchange and gold:
$53 billion (31 December 2008 est.)
$51.33 billion (31 December 2007 est.)
|Year |Reserves of foreign exchange and gold|Rank |Percent Change |Date of Information |
|2005 |$14,710,000,000 |44 |106.37 % |2004 est. |
|2006 |$28,280,000,000 |31 |92.25 % |2005 est. |
|2007 |$42,970,000,000 |25 |51.94 % |2006 est. |
|2008 |$51,330,000,000 |27 |19.46 % |31 December 2007 est. |
|2009 |$60,120,000,000 |23 |17.12 % |31 December 2008 est. |
Oil - production:
|Year |Oil - Production |Rank |Percent Change |Date of Information |
|2005 |2,356,000 |10 |4.43 % |2004 est. |
|2006 |2,451,000 |9 |4.03 % |2005 est. |
|2007 |2,451,000 |11 |0.00 % |2005 est. |
|2008 |2,352,000 |12 |-4.04 % |2007 est. |
|2009 |2,352,000 |13 |0.00 % |2007 est. |
Natural gas - production:
|Year |Natural gas -production: |Rank |Percent Change |Date of Information |
|2005 |15,680,000,000 |29 |0.00 % |2001 est. |
|2006 |19,200,000,000 |28 |22.45 % |2003 est. |
|2007 |21,800,000,000 |26 |13.54 % |2004 est. |
|2008 |34,100,000,000 |22 |56.42 % |2007 est. |
|2009 |34,100,000,000 |22 |0.00 % |2007 est. |
Nigeria’s Economic Situation: Nigeria has one of the fastest growing economies in the world. Petroleum and oil resources play a large role in the Nigerian economy. The country is the 6th largest producer of petroleum in the world; it is the 8th largest exporter and has the 10th largest proven reserves. While the revenues made from oil provide the largest source of income for Nigeria, the country has become overly-dependent on its oil sector whereas other areas of the economy such as agriculture, palm oil production and coconut processing are in decline. Although the country is rich in natural resources, its economy cannot yet meet the basic needs of the people. Such disparity between the growth of the GDP and the increasing poverty is indicative of a skewed distribution of Nigeria’s wealth. About 64 per cent of households in Nigeria consider themselves to be poor while 32 per cent of households say their economic situation had worsened over a period of one year. Poverty still remains one of the most critical challenges facing the country and population growth rates have meant a steady increase in the number of poor.
Analysis of macroeconomic situation: From the above information, we can see that Nigeria’s macroeconomic situation has improved during the past five years. GDP (purchasing power parity), GDP – per capita, current account balance, natural gas, reserve of foreign exchanges export and import, increased. Oil production, labor force, unemployment rate, inflation rate has decreased during the past five years. GDP (Official exchange rate) and industrial production growth rate has fluctuated over past five years.
2. The naira (sign: ₦; code: NGN) is the currency of Nigeria. It is subdivided into 100 kobo. The Central Bank of Nigeria (CBN) is the sole issuer of legal tender money throughout the Federation. The naira was introduced in 1973, replacing the pound at a rate of 2 naira = 1 pound. This made Nigeria the last country to abandon the £sd currency system. The naira was scheduled for redenomination in August 2008, although this has now been cancelled by President (Alhaji Umaru Musa Yar'Adua), with 100 old naira to become 1 new naira. The Nigerian Central Bank has stated that it will make the naira fully convertible against foreign currencies by 2009. Currently, the amount of foreign currency is regulated through weekly auctions, while the Central Bank sets the exchange rate.
This table shows the historical value of one U.S. Dollar in Nigerian naira:
|Date |Naira per US $ |
|1998 |21.89 (84.70 PM) |
|1999 |21.89 (88-90 PM) |
|2000 |85.98 (105.00 PM) |
|2001 |99-106 (104-122 PM) |
|2002 |109-113 (122-140 PM) |
3. Pricing Implication: The Nigerian market is dominated by very cheap and poor quality products. Seventy per cent of motor cycles are used as taxis in Nigeria where people want a strong motor cycle with a long seat. So our company’s pricing implication will be charging a low price to our customer as it is a poor country and people don’t have sufficient money to spend on high price products.
4. Nigeria is a member of WTO. As a member of WTO Nigeria, it enjoys the benefit of free trade with its member countries. The WTO’s global system lowers trade barriers through negotiation and applies the principle of non-discrimination. The result is reduced costs of production (because imports used in production are cheaper) and reduced prices of finished goods and services, which will help our company to gain competitive advantage. This will lead our company to be profitable in the international market. WTO’s rules try to tackle the quota, for example restricting imports or exports to no more than a specific amount each year. As a member of WTO, our company will enjoy sufficient export of our product which will help to increase our company’s revenue. These are all beneficial for our company.
Cultural and Social Forces
1. In Nigeria, 50% people are Muslim, 40% people are Christian and other 10% are indigenous beliefs. As we are establishing Bajaj manufacturing plant in Nigeria, religion will not affect the marketing of our product.
2. Nigeria has the largest population of any African country. Nigeria's population was estimated at more than 123 million people. At about 345 people per square mile, it is also the most densely populated country in Africa. Nearly one in six Africans is a Nigerian. Despite the rampages of AIDS, Nigeria's population continues to grow at about 2.6 percent each year. Since Nigeria is a highly populated country (almost every family contains four to five family members), two-wheeler Bajaj motor-vehicle is not suitable for bigger household. However, three-wheeler Bajaj motor-vehicle is appropriate for them. Moreover the Nigerian population is very young. Nearly 45 percent of its people are under age fourteen. As a result most of the people are not eligible to drive a motorcycle. Therefore family organization may affect the marketing of our product.
3. Nigeria’s literacy rate is 68 %( age 15 and over can read and write). Education will not affect the marketing of our product. Because, to operate a motorcycle knowledge of basic driving skill is sufficient which they can learn easily from any driving school.
4. Hofstede Score:
|PDI |IDV |UAI |
|77 |20 |54 |
Nigeria’s PDI (Power Distance Index) score is very high which means Nigeria’s culture tends to be hierarchical and value power and social status. In contrast, Nigeria’s IDV (Individualism/ Collective Index) is very low which indicate that Nigeria’s culture reflect a “we” mentality and generally subjugate the individual to the group. Nigeria’s UAI (Uncertainty Avoidance Index) is moderate.
Political and Regulatory Climate
1. Nigeria is a Federal Republic modeled after the United States, with executive power exercised by the president and with overtones of the Westminster System model in the composition and management of the upper and lower houses of the bicameral legislature. The current president of Nigeria is Umaru Musa Yar'Adua who was elected in 2007. The president presides as both Chief of State and Head of Government and is elected by popular vote to a maximum of two four-year terms. The president's power is checked by a Senate and a House of Representatives, which are combined in a bicameral body called the National Assembly. The House contains 360 seats and the number of seats per state is determined by population.
Nigerian government is very much open to free enterprise and foreign participation in its market. A publication by the Federal Military Government (1989), Four Years of the Babangida Administration, summarized the priority issues of Nigerian foreign policy: the abolition of apartheid in South Africa; the enhancement of Nigeria's relations with member countries of the European Economic Community (EEC), the United States, the Soviet Union, and with other major industrialized countries to increase the flow of foreign investments and capital into Nigeria.
2. Nigeria is not currently embargoed or boycotted by any country. In the reality, the government welcomes foreign investment.
3. Like in many other African societies, prebendalism and extremely excessive corruption continue to constitute major challenges to Nigeria, as vote rigging and other means of coercion are practiced by all major parties in order to remain competitive. Years of military dictatorship, corruption, political instability and poor governance have meant insufficient investments in the country’s infrastructure and basic services. Corruption is one of the principal challenges in Nigeria, raising the cost and risk of doing business in the country and making the country unattractive to investors. The Government has been exerting conscious efforts to combat corruption, first with the passing of the anti-corruption bill and then via establishment of the Independent Corrupt Practices Commission and the Economic and Financial Crimes Commission. However, we can say that the country was politically risky till 1995 due to military government. But now the political situation is somewhat moderate. Government give guarantee to foreign investors that confiscation, expropriation and domestication will not occur. In India, there are several political risks. Government can impose tax on our investment because local currencies are going outside the country and loosing of potential job opportunity may occur. Government might want the company to invest in India rather than in Nigeria. Conversely, if the Indian government finds the FDI profitable then they might even reduce the tax. Occasionally they provide different types of subsidies. Sometimes, political and social activist of India can interrupt the normal flow of trade.
Global Markets
Type of target market
At the beginning, we shall only target the general consumers. As motorbikes are personally used, it is opt to best suit the mass population. We have a plan to launch three wheelers vehicles later and for that, business market needs to be concentrated. If the initial plans work accordingly, we shall try to sell our two wheelers to the Government of Nigeria, for military purpose or for the police force.
The target market
Our target market shall include the young, middle aged men and women. Muscle bikes such as Bajaj Pulsar will be mainly targeted to the young generation such as 18-35. Fuel efficient two wheelers will be targeted for the middle aged working class. And two wheeler scooters will basically be for women aged within 18-45.
Impact of the Informal sectors
The informal sector will play a very insignificant role in affecting our plans to establish and be a successful two wheeler manufacturing plant of Bajaj Motors. The parts of our motorbikes will be assembled before it is sent to the target market. So the chance for our parts to be available in the black market is not that huge. And if copies are made of our product, it shall be easily identifiable for the customers to detect which one is the original Bajaj, due to unique design and technology.
Marketing to business
Personal selling and printing media might just be helpful while Bajaj Motors will be marketed for business purpose. As we will be targeting to achieve economies of scale, discounts can be provided in purchasing of large volume of the product.
Legal guarantees have been provided by the Nigerian Government that no FDI company has to face expropriation or nationalization. This is strictly observed by The Nigerian Investment Promotion Commission (“NIPC”). It serves as a one-stop government approval agency to promote, encourage, co-ordinate, monitor and provide necessary assistance and guidance for the establishment of enterprises in Nigeria. Still concern is present for facing corruptive activities by the Government. Extortion can be provided as the motorbike manufacturing plant will be large enough to bear.
Global competitors
Global and Local competitors
The major global competitors are Hero Honda, TVS, and Yamaha. Including Bajaj, these four companies conduct businesses through multipoint competition. All of these companies do export their two wheelers to Nigeria. There is no local manufacturer in Nigeria. This industry is still basically import oriented. Other brands of two wheelers include some Chinese bikes such as Xinfu, Rocket, etc.
Strengths of the competitors are mentioned below:
✓ Hero Honda has a better brand value than Bajaj. ✓ Yamaha India has a global brand name, which is much familiar compared to Bajaj. Their technology is based on the world renowned Japanese two wheeler manufacturer Yamaha.
Weaknesses of the competitors are –
✓ If Bajaj can develop the two wheeler plant, the global competitors will be lacking in terms of cost and distribution. ✓ The Chinese competitors can be easily driven away as Bajaj is far better in quality compared to the Chinese ones. And the price for both the brands is quite similar.
Attitude toward competition
We intend to do monopoly business at the beginning, as currently there is no Nigeria based two wheeler manufacturer in the country. So competition is not focused primarily in our project. And even if others try to enter by following us, we will create barriers to entry through market penetration strategy.
Effect of Country of origin
The country of origin has a high probability to play a determinant role for our product. Unluckily, it seems to have negative impact on our product. Indian two wheelers are very popular and highly rated by the consumers of South-east Asia, but it is not that familiar in the countries of Africa.
The SWOT analysis for Bajaj Motors in Nigeria is –
Strengths
• A team of highly experienced management personnel
• Product design and development capabilities
• Extensive focus upon Research and Development as Bajaj does in the domestic market of India
• Widespread distribution network all over the world
• High performance products across all categories
• Great financial support network with linkages with multinational banks as ICICI Bank
Weaknesses
•Bajaj still has no established brand to match Hero Honda's Splendor in commuter segment. This can be a crucial factor in marketing two wheelers in Nigeria as it is still a developing country
• Lack of experience in dealing business globally, as handling objections and dealing directly from the host country
• It is not a globally recognizable brand (unlike the Joint Venture partner Kawasaki)
Opportunities
• Growth in the number of middle class people in Nigeria can be utilized as currently they largely depend upon Motor bikes for transportation
• The Government is likely to be quite supportive as they encourage investment in the country
• A 20% tax credit can be achieved if minimum raw materials are used from the local resources. Tax can also be reduced for five years if local human resources are trained and appointed
• Growing world demand for entry-level motorcycles especially in emerging markets as Nigeria can be optimized
Threats
• The competition catches-up any new innovation in no time
• Threat of cheap imported motorcycles from China can be vital, if the consumers of Nigeria is very much price sensitive
• Profit Margins may get narrowed if the dilemma related to country of origin is not removed
Strategy to adopt in facing global and local competition
We recommend approving communication adoption strategy to face both the type of competition. The technical quality is more than competitive comparing to the current situation of Nigeria. But communication options should be thoroughly assessed before sending the product to the market.
Global Marketing Research
1. There are many sources that provide detailed descriptions about the economic, political, social-cultural, and legal environment of Nigeria. Some of them are as follows:
• http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/NIGERIAEXTN/0,,menuPK:368906~pagePK:141132~piPK:141107~theSitePK:368896,00.html
• http://www.iri.org/africa/nigeria.asp
• http://www.onlinenigeria.com/economics/
• http://socyberty.com/social-sciences/how-culture-affects-the-socio-economic-and-political-growth-in-nigeria/
• http://en.wikipedia.org/wiki/Economy_of_Nigeria
• http://www.historycentral.com/NationbyNation/Nigeria/Economy.html
• http://www.pri-center.com/country/country_specific.cfm?countrynum=149
• http://www.estandardsforum.org/nigeria/standards
• http://www.ondd.be/webondd/Website.nsf/AllWeb/Nigeria?OpenDocument&Disp=1&Language=en
• http://www.iss.co.za/Af/profiles/Nigeria/Economy.html
2. The country’s census data is available on the internet which are probably sponsored by a local government agency called National Population Commission of Nigeria, the web link is www.population.gov.ng/, but unfortunately we could not access them. However, much information is available on the other websites which are available in English. World Bank and IMF websites were very helpful to find out different facts about the country.
Nigeria has a history of problems with data collection. Results of the first post-independence census conducted in 1962 were withdrawn. The reliability of the 1963 census has been questioned. The results of the 1973 census were discredited and never saw the light of day, and no census was conducted in 1981. The census in 1991 was questioned because of questions on religion and ethnicity being dropped. The latest data available is from the March 2006 census which has detailed information about many issues like where are most Muslims living or where are most Christians living, which region is densely populated and so on.
3. The socio-cultural factors that researchers should consider as well as the relevance of the 2007 National Code for Health Research Ethics in enforcing researchers' compliance with ethical standards in informed consent process. Researchers are expected to be sensitive to the many sources of exploitable vulnerability in those whose participation they invite. The failure to give attention to peculiar socio-cultural factors influencing the process of informed consent in Nigeria might have contributed to the failure of many investigators to apply and conform to related local and international research regulations. Genuine respect for human dignity requires deeper understanding of patients' values, culture, family and community. Nigeria is socio-culturally diverse in terms of language, religion, economy, and traditions. Investigators require adequate familiarity with the local socio-cultural characteristics in order to meaningfully communicate the research purpose and method upon which free and informed consent is based. The centrality of informed consent in socio-behavioral and health related researches cannot be over emphasized. Negotiating informed consent with the designated authorities in human research with non-western populations requires investigators to move beyond narrow definitions of personhood, autonomy, and “self” determination. Without these, researchers' efforts would be mere exploitation and abuse of fellow human beings.
4. Since Nigeria has a diversified language, religion, economy, and traditions, the available data may affect the process of selecting a sample. The market researchers could train their field workers, use experienced interpreters if necessary to remove the risk.
5. There are many global and local market research companies available to conduct primary research in Nigeria. Some of them are mentioned below:
• International Development Research Centre: The International Development Research Centre (IDRC) is a Crown corporation created by the Parliament of Canada in 1970 to help developing countries use science and technology to find practical, long-term solutions to the social, economic, and environmental problems they face. Their support is directed toward creating a local research community whose work will build healthier, more equitable, and more prosperous societies.
• Reliant Research & Resources Consulting: They are into the business of marketing research focusing on providing thorough consumer understanding and market information, since we know that these are fundamental needs of clients/users of market research information. The organization is committed to providing that quality service that gives our business an edge and advantage in the ever changing business market. It is a consumer and market research expert company noted for quality and quick services. Their research team is made up of highly experienced and dedicated marketing professionals with several years of expertise in market research.
• Research Marketing Services (RMS) is the leading Market Research Agency in West and Central Africa. For over 27 years they have provided value added solutions in quantitative, qualitative, technical and field research methods to world-class organizations. Their in-depth understanding of African markets will allow us to conduct market research in over 26 countries including Nigeria, Ghana, Ivory Coast, Cameroun, Senegal, Kenya and DRC providing unparalleled service to a diverse client base.
• Market Research Consultancy: Their expertise and passion lies in their foolproof methods of data collection, analysis and interpretation that consistently yield reliable information for sound management decision making. Their qualitative research aims at gaining insight into consumer motivation and behavior, with respect to the meaning they ascribe to products and brands. Their affiliation with censydiam enables them to deliver world class qualitative research to their numerous local and international clients.
Global Market Participation
1. The land of Nigeria is characterized by the presence of various ethnic tribal groups which contribute to the distinct identity of the country. With the presence of more than 250 linguistic groups, the cultural diversity of the country is a huge asset which is definitely hard to ignore. The Hausa-Fulani are dominant in the northern part, the Igbo in the southeast, the Yoruba in the southwest and the Benin tribes are prominent in the western part of the country. Different religious accumulations have resided in the land of Nigeria since many years, however Islam religion continues to pre dominate the especially in the northern part of the country. Christianity is widely practiced in the south and south-eastern part of Nigeria. The major ethnic groups also continue to exercise a formidable influence over the demography of the country.
However, the Nigerian market is dominated by very cheap and poor quality products. Seventy per cent of motor cycles are used as taxis in Nigeria where people want a strong motor cycle with a long seat. So, the company launched the Boxer S - a new avatar of the Boxer we used to sell in India. The company launched the product in July 2006 and it now sells 5,000 a month. The selling point in Nigeria is the Bajaj brand which offers high quality, high reliability and high fuel efficiency.
2. Because of all the above mentioned facts, we may find it reasonable in future research to think regionally. In many countries of Africa, motorcycles are used for commercial purpose. Since the market size will increase rapidly, building more manufacturing and assembly plant in different African counties might turn out to be beneficial.
3. The total area of Nigeria is 923,768 km². 910,768 km² of that is land, while water takes up 13 000 km². Nigeria's total boundaries are 4 047 km in length. The countries it borders account for most of this. The border with Benin is 773 km, with Cameroon is 1,690 km, Chad's is 87 km, and Niger's is 1,497 km. Nigeria's coastline is 853 km.
4. Despite the wide variety of cultures in West Africa, from Nigeria through to Senegal, there are general similarities in dress, cuisine, music and culture that are not shared extensively with groups outside the geographic region. Islam is the predominant historical religion of the West African interior and the far west coast of the continent; Christianity is the predominant religion in coastal regions of Nigeria, Ghana, and Cote d'Ivoire; and elements of indigenous religions are practiced throughout. Mbalax, Highlife, Fuji and Afrobeat are all modern musical genres which enjoin listeners in this region. A typical formal attire worn in this region is the flowing Boubou (also known as Agbada and Babariga), which has its origins in the clothing of nobility of various West African empires in the 12th century.
5. Nigeria is a member of the ECOWAS or Economic Community of West African States. It is a regional group of fifteen West African countries, founded on May 28, 1975, with the signing of the Treaty of Lagos. Its mission is to promote economic integration. It was founded to achieve "collective self-sufficiency" for the member states by means of economic and monetary union creating a single large trading bloc. The very slow progress towards this aim meant that the treaty was revised in Cotonou on July 24, 1993, towards a looser collaboration. The ECOWAS Secretariat and the Fund for Cooperation, Compensation and Development are its two main institutions to implement policies. The ECOWAS Fund was transformed into the ECOWAS Bank for Investment and Development in 2001. ECOWAS is one of the pillars of the African Economic Community. The current President of the Commission is Dr. Mohamed Ibn Chambas. The current chairman is President Umaru Yar'Adua of Nigeria. It operates officially in three coequal languages (French, English, and Portuguese).
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Global Market Entry Strategies
1. Bajaj is at present exporting to 50 countries that includes many regions in South America, Africa and Asia. Countries such as Brazil, Peru, Sudan, Nigeria, Indonesia, Iran, Sri Lanka and Bangladesh are some of the mentionable names. The direct exporting process in used by the organization.
They have 3 manufacturing plant all operating from their own country at Waluj, Chakan and Pantnagar. However, they have PT Bajaj Indonesia (PT BAI), which was incorporated in 2006-07 in Indonesia, and Bajaj Auto International Holdings BV (BAIH BV), incorporated in 2007-08, in Netherlands.
They usually sell their product under the Bajaj brand. The only exception is Kawasaki with whom they are enjoying a long-standing relationship. In some markets like the Philippines, Kawasaki sells Bajaj products under the Bajaj brand and also sells Bajaj motor cycles in some Latin American markets as Kawasaki.
Bajaj do not have any e-business web-sites. Though, their website www.bajajauto.com has a lot of information about their products.
2. Since Bajaj is already engaged in direct exporting, they would avoid indirect exporting. Besides that, this would not be cost effective.
There is no expertise licensee for manufacturing Bajaj products at Nigeria as they are import-based nation of this product. So licensing is not advisable.
We are trying to launch a manufacturing plant in Nigeria so franchising is not an appropriate option.
There are very few assembly plants in Nigeria which are mainly China based. We do not intend to make acquisition of these plants because it does not satisfy our purpose of manufacturing. If we assemble parts of the two and three-wheelers from India, the cost after assembling the product will still be high compared to manufacturing in the host country.
The labor market for a wholly owned subsidiary would be unskilled from the technological point. This can be a critical factor for the company, since technological know-how is an essential part of our process.
3. A wholly owned subsidiary with a plan to merge with a reputed local organization or the government is recommended. This shall help us to control and reduce the cost of production for our products. Merging with a local company or the government shall give the customers a flavor of nationalization, which can be beneficial for our brand image.
Global Product strategies
1. Bajaj Motors Limited is ISO 9001:2000 certified & recommended for TS-16949, ISO-14001 certifications from TUV GmBH, Germany.
Yes, Nigeria is a member of the ISO enlisted countries. The Standards Organization of Nigeria (SON) was established by an Enabling Act Number 56 of December 1971.
2. No, there is no such requirement for testing, packaging or labeling of our product.
3. Although Nigeria lies wholly within the tropical zone, there are wide climatic variations in different regions of the country. Near the coast, the seasons are not sharply defined. Temperatures rarely exceed 32° C but humidity is very high and nights are hot. Inland, there are two distinct seasons: a wet season from April to October, with generally lower temperatures, and a dry season from November to March, with midday temperatures that surpass 38° C but relatively cool nights, dropping as low as 12° C On the Jos Plateau, temperatures are more moderate. Average rainfall along the coast varies from about 180 cm in the west to about 430 cm in certain parts of the east. Inland, it decreases to around 130 cm over most of central Nigeria and only 50 cm in the extreme north. Two principal wind currents affect Nigeria. The Harmattan, from the northeast, is hot and dry and carries a reddish dust from the desert; it causes high temperatures during the day and cool nights. The southwest wind brings cloudy and rainy weather. Nigeria has a fairly extensive infrastructure of roads, railroads, airports, and communication networks. The road system is by far the most important element in the country's transportation network, carrying about 95 percent of all the nation's goods and passengers. Currently, many of the roads are in disrepair because of poor maintenance and years of heavy traffic.
Due to the hideous conditions of the road system, two wheelers and three wheeler vehicle are the most preferred mode of transportation for the general people of the country. Even in the urban and the rural areas, two wheelers are used as a public mode of transportation by Nigerians.
A chart is displayed of the per year income level of the Nigerian people:
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4. Among the Muslims of Nigeria, Sharia law is widely dominant. So it would be quite impossible to market “Scooty”, which are two wheelers for women, due to the restrictions of religion. Our brand extension gets a road block due to this.
5. In Nigeria, Bajaj items are situated in the growth stage. Nigeria is a land of opportunity for the organization. During the year 2008-09, the company achieved 91% growth in this region. Establishment of a manufacturing plant can enhance the opportunity of the mother company in terms of sales volume, market share, company portfolio etc. The company would have the benefit of reduced cost due to vanishing of taxes regarding export, lower distribution costs for the neighboring countries etc that will eventually lead to reduction in the cost per unit. This will enable the organization to adopt market penetration strategy since the competitors will still be import oriented.
6. Nigerian government is planning to link the economies of up to six ECOWAS member states as a single market in the near future. One implication of this development would be that companies operating in the single market will require adequate IP rights protection throughout the region to combat dilution of product/brand names. Most of the ECOWAS member countries are signatories to international conventions on IP rights, and as can be expected, statutes applicable within the region will need certain adjustments in order to achieve an acceptable level of standardization, or at least similarity, throughout the single market. The introduction of intellectual property protection in Nigeria will be a huge encouragement for the organization to operate without any worry of being duplicated in terms of design, logo, slogan, brand name etc.
Their threats can be reduced through patent of their technology i.e. DTSi technology, copyright their brand elements etc.
7. Since Bajaj is a well known brand name and many people have positive impression about the quality of their two-wheelers, the actual brand name, i.e. Bajaj is more advisable to use for future perspective.
It is already a global brand name.
Global promotional strategies
Personal selling and telemarketing wouldn’t be the appropriate approaches to promote the motorbikes of Bajaj. Personal selling is very expensive and time consuming. By telemarketing, it would be hard to identify a potential group of prospects.
Buzz marketing, or word of mouth, can be effective for promotional activities. Dialogues can be given in ads; stars of the media world can work as brand ambassadors. This will create interest in the mind of the Nigerian people, and their speech shall lead to effective buzz marketing.
In Nigeria, only a portion of the population uses the internet. So e-marketing may just fail to capture attention. But it can be used to play the role as a supporting approach to promote Bajaj motorbikes.
For sales promotion, Cost and quality will be given primary focus. As the people of Nigeria are very price sensitive and quality of the motorbikes can help to differentiate it from the competitors. Discounts can be provided to distributors as trade promotions. And for consumer promotion-
➢ A free helmet, ➢ 3 or 4 years of free after sales service ➢ A one year warranty to repair or replace any parts of the motor vehicle. ➢ Financial support to purchase motor bikes ( i.e. loan and credit facilities)
This can be helpful to change the behavior of Nigerian customers towards India based Bajaj motors.
For developing and maintaining public relations, we recommend to
• Do fund raising activities for causes ( i.e. fighting AIDS, helping victims of natural disasters, etc) • Contribute a percentage of sales to various economic and social causes. • Publish Annual reports. • And Press conferences.
All these activities shall help Bajaj to be a part of the life of Nigerian people. As building public relations make the ”public” feel that the company is here to help, not only just to sell.
Global advertisements
Yes, in a very competitive industry as the two-wheeler, advertisement plays a significant role in the purchase decisions of the users. Customers have to provide quite a large sum of money to purchase a motorbike. And the manufacturers need to do various types of advertisements to pursue them to buy their product.
Advertisement is essential for selling motor vehicles of Bajaj to an African country like Nigeria. As people intend to have complex buying behavior while purchasing a two wheeler motor vehicle, they need to be aware of detailed information about the product. And as it’s country of origin is far away at India, makes it more vital to advertise its products.
Local and international agencies
One of the biggest local and international advertisement agencies of Nigeria are - Insight-Grey, Centrespread FCB, Rosabel Leo Burnett, SO &U Saatchi and Saatchi, DDB Lagos, Lowe Hintas, Prima Garnet Ogilvy and STB McCann .
The pros and cons of using a local agency instead of an international one are –
• The local firms may connect to the customers easily. • Cultural values will not be troubled • It is less costly than an international ad agency. • Fewer barriers will be faced in advertising activities. • Lack of experience in the global market may disrupt the brand reputation. • A chance to improper brand positioning.
Availability of Media
The electronic and the print media- both are available at Nigeria. Ads shall be provided to the Nigerian public and private television channels. And the elite brands ( i.e Bajaj Pulsar 180-250cc, Bajaj Kawasaki Ninja,etc) shall only be telecasted in the televisions. Newspapers and magazines can be used to promote the commuter/economical bikes of Bajaj( i.e Bajaj Platina, CT 100,etc)
Ad regulations
The advertisement regulations or act which is to be mandatory in Nigeria are:
• Unfair or Deceptive Trade Practices: general and private consumers, to commence lawsuits over false or deceptive advertisements, or other unfair and injurious consumer practices. • Truth in Lending Act: home mortgages, student financial aid, and credit cards, for example—is an area fraught with complicated finance terms, and Congress has designed laws requiring lenders to fully disclose and explain those terms to potential borrowers. • Warranties: are promises by a manufacturer, made to the consumer purchasing the manufacturer's product. • Consumer Remedies: For example, in the case of a false advertisement, a common remedy is the FTC-ordered removal of the offensive advertisements from the media. In other circumstances, consumers may be entitled to money damages, costs, and attorneys' fees. The advertisement regulations are some basic acts which are followed by Bajaj Motors in India. There are no complex laws for advertisements which might just be harmful for our company.
Effect of culture to advertisement
The Nigerians are very proud of their culture and the political history. But their acceptance level for others cultures are quite significant. So the advertisements telecasted by us wouldn’t be that much of a problem.
Most of the population of Nigeria follows Christianity and Islam as their religion. There are three major tribes in Nigeria (Hausa, Ibo and Yoruba). So the advertisements should be approved by the beliefs of the religions and tribes.
Our recommendations
• To implement the project successfully, Bajaj has to make its employees go through extensive training programs; can last for more than a year. As the employees need to be expertise in technological aspects. • The company can try to change the religious point of view, women not driving scooties. Large awareness and promotional campaigns can be undertaken to change the mentality. But carefulness is a must. Changing the religious perspective can create negative impact about the company image, even end with violence. • If Bajaj gets lucrative result in selling the two wheelers, it can then focus on three wheelers, and next to marketing automobiles. • The market can be extended from Nigeria to other African regions. This can work as a competitive priority in facing companies like Hero Honda, their main rival. • Achieving support from the Nigerian government is a must; along with it Bajaj Motors should convince their home country government about their investment. the Indian government can provide subsidies which later can be utilized through remmitance.
The Conclusion
Although there are a few down sights in investing linear to our proposed project, the opportunities that come up with it simply outstands the negative impacts. If Bajaj analyzes the project more thoroughly with great anticipation and invest, it can change whole scenario of the African region. More multinationals will be motivated to enter, and the standard of living of the people shall improve, who are considered to be less fortunate.
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• http://www.123independenceday.com/nigeria/demography.html[pic] 