NATIONAL UNIVERSITY OF THE WEST

DEGREE IN ADMINISTRATION
Strategic marketing

First Rate SA – Legnano Motorcycles

Teachers
 Charlemagne Peace
 Cleres Benito

Members
 Augustus Florence
 Benitez Hugo
 Daiana Staff
 Gomez Esteban
 Granara Emmanuel

November
Year 2017
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 INTRODUCTION

Currently, there are many markets where companies are facing declining demand and growing
competitive pressure. In such a difficult environment, maintaining and caring for stable relationships
with clients plays a fundamental role. This has led to quality of service and customer satisfaction being
a main part of business objectives, considering that satisfied customers are normally loyal and
profitable. This statement is especially relevant in the automotive sector, where the high level of
competitiveness makes customer satisfaction the key to customer loyalty.
Nowadays, in the world of commerce and marketing, it is very important to know sales
management, but, at the same time, the post-sales process must be known and taken care of, since the
service offered to the client must be provided in any circumstance and not end at the time of sale.
Apart from the benefits of providing impeccable customer service, we will ensure that the
customer is satisfied, increasing the chances of keeping them interested and visiting us again.
After-sales service is one of the advantages that companies have that allows the client to
differentiate them from others; With this service, the company is concerned about whether the good or
service has generated sufficient customer satisfaction or, in turn, new alternatives or promotions are
presented to them to use or consume the product.
Considering the above, the main objective of this research work, through a marketing strategy, is
to improve the quality of post-sales customer service of a company dedicated to the manufacture and
sale of motorcycles, in order to improve the perception of the end customer, increase sales of your
products, create customer loyalty and thus achieve profitable sustainable relationships over time.

DEVELOPMENT

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First Rate Historical Review. SA

First Rate SA is a company with purely national capital, which was born in 1996 as a new
venture by Méndez Collado, a firm that has still been active in other areas and countries for more than
60 years. Since 2006, it has been developing an important industrial project for the manufacture of
Legnano brand motor vehicles, in its 11,000 square meter plant, located in the town of La Tablada.
Legnano is a historic Italian wheeled brand, which had a great diffusion in Argentina at the end
of the 1950s, with its 49 cc models equipped with a Demm engine and three-speed transmission.
According to Daniel Tigani, industrial manager, since 2009, the First Rate SA project has been
consolidated in the production of Legnano motorcycles, training its personnel and launching the
assembly line and its testing line, of the latest technology, with the capacity to produce 40,000
motorcycles per year.

Marketing Strategy applied to First Rate SA

Marketing strategy has to do with a logic with which the company hopes to create value for the
customer and achieve profitable relationships with them. In this case, our marketing strategy is aimed
at creating a network of After-Sales service providers close to our areas of greatest influence, bringing
together technicians who will provide official service for the preventive and corrective maintenance of
the motorcycles sold. This action is linked to reducing the costs involved in moving a motorcycle from
the interior of the country to Buenos Aires every time one requires mechanical service, since the
validity of the warranty is subject to the correct performance of both maintenance and/or repairs that
are currently only carried out at the company's only headquarters in the town of Tablada, province of
BS.AS.
With this strategy we hope to reduce operating costs, maintain customer loyalty and reach new
customers since we understand the importance for them of having quick and satisfactory responses to
possible requests.
Legnano is a brand that has many customers, especially in the interior of the country. Being able
to provide after-sales service will then guarantee that customers feel even more satisfied with the
product they have. In order to carry it out, the organization has an internet portal where clients can
consult where to go if they need the service. This portal will speed up the intervention of the vehicle,
guaranteeing a response from the company after the sale.
Our strategy will be of the Pull type since it contemplates actions aimed at communicating the
service that will be provided to customers after the purchase and not so much at “pressuring” the
consumer to purchase a certain product. What the marketing Pull does not create is knowledge, it
consists of attracting customers who were previously interested in the product in question. That is what
we hope with our after-sales service to convince customers who are interested in Legnano motorcycles.
of buying them with the confidence of having representatives nearby who, in the event of any
inconvenience, will respond for the company.
Situation analysis

The well-known SWOT analysis (or SWOT, for its acronym: weaknesses, threats, strengths and
opportunities), is a situational analysis tool that allows us to understand the situation of the product or

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service in its environment, since it analyzes both factors, internal and the external ones. That is why we
have used this tool as a way to know the status of Legnano.

Cost leaders
Product with a social image in .
constant growth. Inefficient Post-Sale Service
Domestic manufacturing Market positioning
production
Good quality in relation to the
price

Consumer programs.
Closing of markets
Low maintenance cost compared
Economic crisis.
to other means of transportation
Aggressive competition.

 Strengths.
Leaders in cost: Motorcycles are distinguished by their impressive quality with prices highly
affordable by the end consumer.
Constantly growing social image: Legnano is concerned about having motorcycles with a highly
updated design.
Nationally manufactured production: It is imposed because it is a product that also produces
genuine work, providing job opportunities to the local economy.
Good quality for the price: Motorcycles have a long useful life.

 Weaknesses.
Inefficient After-sales Service: The transportation and repair times required for the intervention
of units give a negative image of the services compared to our competitors.
Market positioning: little presence of the brand in the market, lack of dissemination of the
product.

 Opportunities.

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 Consumption promotion program: Government actions such as Now 18, Now 12, provide a great
advantage in nationally manufactured vehicles since consumers can access vehicles with a unique
benefit of purchasing them in 12 or 18 installments with a surcharge of 12 % of the list price.
Low maintenance cost compared to other means of transportation: Compared to other products
on the market, such as cars and trucks, motorcycles have the great advantage of achieving independent
mobility for a truly differentiated maintenance cost. Not only is it possible to almost triple the number
of kilometers traveled for the same liter of fuel, but also the costs for accessories, spare parts and
covers, and tolls are much lower.

 Threats.
Closing of markets: There is a project where an attempt will be made to force manufacturers to
incorporate 30% of vehicle parts with nationally produced parts, the vast majority of which are
imported due to the low costs compared to national suppliers.
Economic crisis: Our products are essential, in the event of a crisis the impact on sales would be
direct.
Aggressive competition: The association of top brands responds by lowering prices in order to
displace the competition.

Macro environment

To know the current situation, it is necessary to analyze the external forces that are not
controllable by the company:

 Political
It is the role that governments play in the performance of everything that can affect business
performance, in our case the sale of motorcycles is favored by the consumption promotion program
that allows consumers to obtain a third-necessity good with ease and with a payment term with
minimal interest.

 Economic
Consumer behavior patterns are affected by the local economy. Although the economy is down,
the possibility of making an investment purchase of a vehicle with such a low interest rate continues to
be attractive, allowing the consumer pay a monthly fee for the good that is equivalent to the cost of
transportation that would be incurred by public transportation. One of the main factors why many
choose to purchase a motorcycle.

 Socio-Demographic.

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 Today people prefer motorcycles, it is a comfortable and safe means to move from one place to
another, saving time and even money. These advantages are enough for people to rule out the use of
buses, considered slow and uncomfortable.
According to data from the Directorate of the National Automotive Regime, dependent on
Industry and Commerce, motorcycle production between January and June of this year reached 45,994
units. 85% of the motorcycle market in the country corresponds to national companies. Seven out of
ten motorcycles are sold in rural areas, where there is a shortage or absence of public transportation.

 Technological.
To adjust to market demands, it is necessary to aim for high production capacities of vehicles
with the latest technology that offers intensive control over the quality of the products. Motorcycles are
units that must meet the highest safety requirements.

Marketing Mix

 Product.
The company presents its models Legnano Monza 150cc
(Cruiser), Legnano Capri110cc (Street), Legnano Verona 125cc
(Cub), Legnano Milano 150cc (Cub) with good performance in the
city, with low fuel consumption, with excellent maneuverability in its
driving and with components that are easy to replace on the market.

 Price.
Prices range between 18,000 and 29,000 final pesos, accessible for the market we are targeting in
terms of purchasing power of the potential buyer.

 Square.
We focus on positioning our stores in household goods stores and motorcycle dealerships where
we have representation close to train stations or public transport stops, very populated and busy, where
we can attract the buyers we are looking for, since the greatest number circulate. public towards their
jobs and may see the option of gaining time and autonomy through our products as tempting.

 Promotion.
Legnano usually does sports sponsorship (road tourism and low-displacement motorcycle
racing), with a strong presence in television media.

Michael Porter Cross

To continue with the diagnosis, we must delve into the competitive process, in order to discover
the main sources of competitive pressure and how powerful each of them is. According to the theory

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developed by Michael Porter, the state of competition in an industry is a combination of five forces.
The weaker these forces are, the greater the opportunities for superior performance. The key is to
position the company in a situation in the market in which it can defend itself against these forces or
influence them in its favor.

 Rivalry between companies in the sector : It is a market of imperfect competition, specifically

monopolistic competition, so the degree of rivalry is greater. Legnano competes in the market
with second line brands such as Zanella, Motomel, Mondial. Therefore, greater efforts must be
made to maintain the position in the market, and to achieve this, advertising battles with the
competition will have to be carried out to differentiate products, compete on product prices,
create new products, improve customer service. , etc.

 Bargaining power with customers : Customers have important bargaining power since they have
different purchasing alternatives for their products, which puts them in an advantageous situation
when talking about prices. The main clients that Legnano has to date are dealerships and home
goods houses.

 Bargaining power of suppliers : The bargaining power of suppliers with the organization is quite
significant since they have a very high number of clients and their productive capacity is very
large, which places them in a privileged position in the chain. in the ability to determine the
fundamental costs to offer the product; They require high quantities to be able to have a good
market price. We have suppliers such as DZE for various electronic components, Pirelli who
provides us with the tires necessary to assemble the motorcycles, Corven, for shock absorbers,
and IBASA for the screws and washers necessary to use in the production line.

 Threat of substitute products: To close the analysis of the forces that influence the level of
competition in the industry, it is important to identify the position of substitute products. A
substitute product is one that can perform the same function as another already existing on the
market. Those products that would work as a substitute for Legnano motorcycles will be electric
bicycles, motorized bicycles, and electric motorcycles.

 Potential entry of new competitors : We can name some entry barriers that potential competitors
must overcome, so it will not be easy for them to enter the market. In principle, the manufacture
of motorcycles requires a large initial capital investment. Infrastructure, cutting-edge technology,
specialized personnel. Being an economy of scale, production volumes impact efficiency; Thus,
it occurs when production costs decrease with increasing quantities produced.
Companies that express their willingness to enter into the production of motorcycles must
present a manufacturing program.
They must obtain the Motorcycle Import Certificate (CIM) which will be required exclusively
for applications for definitive import destination for consumption.
The units must be approved and manufacturers are required to incorporate and approve the ISO
9001 quality management system.

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 In order for new vehicles to circulate on public roads, automotive companies must obtain a
Model Configuration License (LCM) that guarantees compliance with safety conditions.

Potential Competitors
Automotive
Suppliers

Competitors in the sector

Suppliers Zanella Customers

World
DZE electronic components. Dealers
Pirelli tires. Motomel
Home Goods House
Corven shock absorbers.
IBASA screws, washers.
Existing rivalry between competitors

Substitute Product
Electric bicycle
Motor bike

BCG MATRIX
In the 1970s The Boston Consulting Group developed a graphical method to analyze the growth
and participation of a portfolio of products or business units in the market. This graph is known as the
BCG MATRIX, and it allows you to analyze and make decisions about the need to invest or not in a
product and the choice of the most convenient strategy to follow for each product.

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 The BCG Matrix is a quadrant that is structured in two axes, one vertical (indicates the growth of
the product in the market) and the other horizontal (defines market participation or share). Each of the
four parts shows a type of product, or business unit, which is represented by a figure:

 Estrella (Legnano Monza 150cc - Cruiser): This product has great growth and market share, since
it is a midpoint between a Street motorcycle and a Custom, unique in the local market, offering
all the features and luxury details of the custom ones but with an agile design for everyday use in
vehicular traffic. It has alloy wheels, front disc brake, 5-speed gearbox, dashboard with gear
indicator, 150cc engine.

 Question (Legnano Capri 110cc – Street): This product is in a growth phase, it is being introduced
into the market so we consider that its future is uncertain, it is a low consumption motorcycle,
alloy wheels, front disc brake , 5-speed box, centrifugal clutch, gear indicator, and a state-of-the-
art design.

 Dairy Cow (Legnano Verona 125cc – Cub): It is a product already consolidated in the market and
has a stable sales volume. It is a Premium Cub, it is a low-consumption motorcycle, alloy
wheels, front disc brake, 5-speed gearbox, centrifugal clutch, gear indicator and is differentiated
by having a powerful 125cc engine.

 Dog (Legnano Milano 150cc – Cub): This product has a low market share and a decrease in its
level of growth, it is a Street type motorcycle that has alloy wheels, front disc brake, 5-speed
gearbox, gear indicator and a classic design, authentic and a noble work motorcycle.

The quality of Legnano motorcycles is notable, especially for the knowledgeable consumer,
when comparing them with their direct competitors because the brand has a prestige for its long useful
life.

Star Question mark

LegnanoMonza 150cc (Cruiser)
LegnanoCapri110cc (Street)

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 Milk cow Dog
LegnanoVerona 125cc(Cub) LegnanoMilano 150cc (Cub)

Strategic Marketing Process oriented to the company First Rate SA

To create value for the company First Rate SA, we carry out the segmentation process, the target
market and the positioning of the company.

Segmentation
Once the opportunities and threats have been defined with the analysis of the external
environment, and the strengths and weaknesses with the internal analysis, it is time to decide in which
market segment(s) we are going to compete, who will be our target audience and with what products or
services. We will satisfy your needs.
Unlike the SWOT analysis (weaknesses, threats, strengths and opportunities), which is carried
out to define the company's global strategy and which divides the global market into product-markets,
market research has more specific objectives: it analyzes the diversity of existing needs within each of
the market products (market segmentation).
Markets are made up of buyers, and buyers differ from each other in one or more ways. They
may differ in their desires, resources, geographic location, purchasing attitudes, and purchasing
practices. Through market segmentation, companies divide large heterogeneous markets into smaller

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and more homogeneous segments, with common needs and characteristics, in order to apply the most
appropriate marketing strategies.
There is no single way to segment a market. The marketer has to try different segmentation
variables independently or together to find the best way to conceive the market structure. Customers
can be segmented and served in various ways based on geographic factors, which consists of dividing
the market into different geographic units such as countries, regions, states, provinces, municipalities,
or even demographic neighborhoods, which divides a certain market. into groups based on variables
such as age, gender, family size, family life cycle, income, profession, education, religion, race,
generation and nationality, psychographic, based to the division of a market into different groups based
on their social class, their lifestyle or the characteristics of their personality, and behavioral or based on
the behavior that refers to that Division of a market into groups based on knowledge, attitudes, use and
response of consumers to a product.
In order to divide the total market into smaller groups with homogeneous characteristics,
Legnano uses the following segmentation criteria:
 Demographic: Since it is aimed at the male audience between 18 and 40 years of age.
 Psychographic: Working class, middle class, lower-middle class
 Geographic: Argentina, province of Santa Fe, Córdoba, Chaco, Misiones, Entre Ríos, Salta,
Corrientes, Mendoza, Santiago del Estero, San Juan, Catamarca. Southeast of the province of
Buenos Aires, Atlantic Coast, Bahía Blanca

Market choice
With respect to market selection we can say that it has to do with buyers who have common
needs or characteristics. To choose the market we analyze the different market strategies:
 Non-selective or undifferentiated : The undifferentiated approach is an approach to selecting the
target group that is based on the conception of a product with broad acceptance in the market as a
whole, regardless of factors such as age, gender or place of residence. With this approach we try
to cover many different social groups and the number of potential clients is very high. The main
difficulty is developing attractive and effective marketing campaigns for very different people.

 Selective or differentiated: The selective or differentiated approach tries to define the target
market of a product by selecting a few groups of consumers with characteristics that make them
ideal to become loyal consumers. The effort focuses on creating links between the product, the
company and consumers. The selective approach involves a detailed description of the target
group, especially the needs, tastes and habits of its members that make them favorable to
purchasing the product.

 Focused on marketing: Here a single group of consumers is identified with a high probability of
generating sufficient sales for the marketing of a product to be profitable. It may involve the
search for a new or underexploited market niche or the development of goods and services
specially designed to meet demands that are not satisfied by competing companies.

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 We consider that, in terms of the market, the life cycle of the motorcycles and the existing
competencies in the organization, the market strategy to be used is the non-selective or undifferentiated
type since it is a motorcycle that, compared to the price of other , it is very accessible.

Positioning
Brand positioning has to do with the space that the product occupies in the minds of consumers
compared to its competitors. To correctly establish our positioning strategy, we took into account some
aspects such as the attributes that provide value to consumers, our current positioning and that of our
competition, and the positioning we aspire to and its viability .
The main marketing strategies on brand positioning are:
 Benefit: It is based on positioning the product for the benefit it offers.
 Quality/Price: Seeks to offer the highest possible quality at a competitive price or position itself
for high or low prices.
 Attributes: It is about positioning the product by the attributes it offers.
 Use/Application: Another option is to position yourself based on the use or application that can
be given to the product.
 Categories: Position as leader in a product category.
 Competitor: Compare our attributes with those of other competitors.

We are going to differentiate ourselves through the after-sales service that will be provided to
customers and we are going to achieve positioning through quality and price, for this we analyze our
main competitors with respect to the prices they manage in the market, and We compare them with
ours, from there we conclude that Legnano's are reasonable and below those of the competition|

The following table shows the market share that Legnano has with respect to other brands,
occupying a number 10 position in the ranking.

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 COMPETITOR PRICES
MOTOMEL 150 $ 24.700
ZANELLA STYLER CRUISER 150 $ 28.000
GILERA 150 $ 29.000
WARRIOR 150 $ 29.800
HONDA CG 150 $ 42.000
YAMAHA 150 $ 48.000

LEGNANO 150 CRUISER PRICE $21,000

This observation that we made comparing the price of the motorcycle that Legnano sells with
other brands in the same category shows us that the price is relatively low compared to the rest of our
competition, it is that point where we will try to seek positioning.

Product dimensions and their relationship with Maslow's Pyramid

Maslow's pyramid

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 Marketing consists of a set of activities that seek to satisfy the needs and desires of the markets
but also of the customers.
Needs can be related to basic satisfactions, although they can also have to do with more specific
satisfactions. Not all needs have to be essential for subsistence.
A tool that will help us understand the needs of the market will be Maslow's Pyramid.
Abraham Maslow (American psychologist) proposes a theory that we know as Maslow's pyramid
or hierarchy of human needs in his work: “A Theory of Human Motivation”
The theory proposes a hierarchy of needs and factors that influence the motivation of human
beings, and in this theory Maslow defends that as basic needs are satisfied, speaking of the lowest part
of the pyramid, human beings develop more needs and desires. elevated speaking of the highest part of
the pyramid; This means that if we satisfy our most basic needs, others will arise that will change or
modify our behavior.
The hierarchy of needs is described as a five-level pyramid; Physiological, Security, Affiliation,
Esteem and Self-actualization.

 Basic Needs : They are the only ones inherent to the person, basic for the survival of the
individual. They are those of a physiological nature, that is, hunger, thirst, activity, sex, etc.

 Security Needs : The creation and maintenance of a situation of order and security is sought.
They are some like stability and protection. Related to physical security, a job or employment,
income.
 Social Needs : These are those that are related to the need for integration, acceptance, company,
and social participation. We will be talking about communication needs, establishing work and
family groups, and belonging needs.

 Self-Esteem Needs : Known as ego or recognition needs. Both from others, such as having
success, prestige, feeling appreciated, status, as well as a need for self-worth and self-respect.

 Self-Actualization Needs : Also called self-improvement or personal satisfaction needs. Level of

complete harmony and happiness.

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Product dimensions
Following Philip Kotler we can distinguish five dimensions of products. Each new level
increases the value of the product for the customer.
 Basic: Consumers buy products to obtain a certain basic benefit.
 Generic: These are the characteristics of the generic product. Example: all motorcycles have a
handlebar, frame, two wheels, seat, brakes, and footrests.
 Expected: They include the expectations of the
 Increased: Companies try to differentiate their product from those of the competition. Adding
features, accessories or services allows us to sell a differentiated product instead of a generic or
undifferentiated product.
 Potential: What remains to be done to attract customers and retain them over time.

Based on Maslow's Pyramid, we conclude that Legnano focuses on meeting the need for
Recognition.
Recognition will be our basic product dimension and our expected product dimension will be
that the Legnano motorcycle is different from the rest of the environment.
Our clients look for a certain distinction, they feel that by purchasing Legnano, they will be more
recognized and admired by the environment. They feel that they will be valued more.
Now, in order to compete in the market, customer expectations must be exceeded and that is why
Legnano incorporates attributes into the product that are capable of destructuring the customer.
These attributes will be part of our augmented dimension . In the case of our motorcycles, the
gear indicators, fuel level indicators, RPM indicators, and disc brakes will be the main part of the
product.
To sustain a company over time, we need profitable relationships that are sustainable over time,
having clients from the “long-term” concept. Here we refer to the potential dimension of the product.
The improvements and additions that the product can add in the future and that manage to maintain a
relationship with the customer over time. To meet this objective, Legnano will extend a network of
After-Sales service providers, so that users can acquire the best preventive and corrective maintenance
service for their vehicles, guaranteeing users 12 months or 120,000 KM of effective warranty.

Ansoff Matrix - Growth Strategies

The Ansoff Matrix , also known as the Product-Market Matrix, is one of the main business
strategy and strategic marketing tools. It was created by Igorr Ansoff (Russian mathematician and
economist) in 1957, and it allows determining the strategic direction of growth of a company.
It determines the possible product/market combinations on which the company can base its
future development.

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Market Penetration Strategy.
We are seeking to achieve a greater market share (higher sales), improving the after-sales service
of our current products in the markets in which we are already operating, for which we will carry out
actions that allow us to achieve customer loyalty and ensure the possibility of future sales.
Our after-sales service consists of continuing to offer personalized attention after the sale has
been made, it will allow us to directly reduce costs, in addition to being a great option for approaching
the client. As well also:
 Create brand loyalty, as it will give customers the assurance that Legnano is willing to help them
even after the sale is made.
 The satisfaction of our clients will give us better advertising.
 Provide support (help and maintenance of our products) in different regions of the country.
 Ensure users effective compliance with warranty terms.

CONCLUSION
Vehicles are one of the most used means of transportation in our country by citizens, hence the
importance of carrying out the necessary services and repairs so that customers can have their product
in optimal conditions.
For Legnano, the after-sales service area is of vital importance since it is the area that supports
the product after the sale is made, it is there where the good attention that must be provided to the
customer in said area is a fundamental basis for the profitability of the business.
Although our brand is not yet well known in the local market, Pcia. from BS.AS, the after-sales
service offered will guarantee the company to attract more customers with the security and confidence
that the purchase of motorcycles implies.

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 An advantage that Legnano has, unlike the competition, is the price and quality it offers, that is
what we will work on to obtain recognition that will be accompanied by after-sales service.
We hope that sales will increase as our service is promoted.

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