marketing plan for metro bikes company (1)
TRANSCRIPT
MARKETING PLAN FOR METRO BIKES COMPANY
PRESENTED BY GROUP NO. 8JAPPREET S. BHATIA
ROHIT YADAVDEEPAK JAINDSB, VIPS-TC
PGDM 2014-16
CONTENTS • Part: 1 Executive Summery• Part: 2 Key Objectives • Part: 3 Situational Analysis• Product Market Analysis• Distribution Analysis• Competitor Analysis• Other Analysis• Part: 4 Strategy and objective • Marketing strategy• Marketing objectives• Part: 5 Marketing Mix • Market • Product• Promotion • Distribution • Pricing • Part: 6 Financial analysis Budget and analysis• Part: 7 Marketing Research and Risk analysis• Part: 8 Contingency Plan
EXECUTIVE SUMMARY• Indian Bicycle Industry is very large with India
producing almost 10% of total Bicycle production of the world and exporting around Rs. 200 million of it. Out of the complete sales of bicycle, around 13% is constituted by the kids segment with CAGR (Compounded Annual Growth Rate) of around 20%.
• With many brands present in the bicycle industry, a new approach towards marketing is needed and also to penetrate competitive market cost competitiveness is required.
• This report explains the Marketing plan for launching bicycles named as “Metro Bikes “ by exporting it in USA in coming three years.
KEY OBJECTIVES
• Continue to provide the high quality of sales and services. • Maintain a financially healthy business and validate the
trust and advocacy of other people in support of this business purchase.
• Achieve monthly and yearly sales equal to or better than the previous year .
• Aim to improve sales of bicycle specific garments and rainwear over the year.
• Focus marketing on new student influx to maintain current growth in sales and service revenue.
SITUATIONAL ANALYSIS
• We feel that Abbot Ville's demographic characteristics and location make it an ideal place to open a bicycle shop. The city has a large population of children and young adults, segments of the population that are heavy users of bicycles.
• Also, with a large state university only one mile away, we expect to attract a number of college customers. Abbot Ville has a population of approximately 31,473, with a median age of 36. However, Metro Bikes will consider the 145,917 people in and surrounding Abbot Ville as part of its overall target market
MARKET ANALYSIS• The U.S. bicycle industry was a 6$ billion industry in
2005 (this includes the retail value of bicycles, related parts, and accessories through all channels of distribution), selling approximately 19 million bicycles.
• Bicycling is an excellent cardiovascular exercise and a great stress reliever.
• A recent industry trade publication showed that 94.5% of those who ride bicycles do so for recreation or fitness. The sport is continuing to grow as more and more people become aware of its health benefits.
• The Bicycle industry and Metro bikes in particular, is positioned to cash in on this trend.
MARKET ANALYSIS CONTD...
• Metro bikes is a specialty bicycle retailer featuring high quality merchandise, and also offering additional customer services such as bike fitting, expert assembly, and repair.
• The industry is a seasonal business that can be impacted by poor weather conditions, as well as changes in the economy.
• Additionally, high oil and gas prices have increased the demand for bicycles nationwide as people look for more affordable means of transportation.
• Approximately 5.2% of those who ride bicycles do so as a means of transportation.
STP ANALYSIS
SEGMENTATION
TARGETING
POSITIONING
TARGET MARKET
The profile of the Metro bikes customer consists of the following geographic, demographic, psychographic, and behavior factors:
• Geographic• Our immediate geographic market is the Abbot Ville
area, USA with a population of 31,473. However, we will include the 145,917 people that make up the major population surrounding Abbot Ville, as part of our overall target area.
DEMOGRAPHICS AND PSYCHOGRAPHICS
• Demographics
Our general target market is male and female age 6-65, but we have segmented our market into two smaller and more identifiable groups:
• 1. Families with children that have an average income of $35,000 or higher
• 2. The avid rider, male and female, age 21-44 with an average income of $45,000 or higher
• Psychographics• Health and fitness is a priority• Enjoys being outdoors and staying physically active
BEHAVIOURS
• He or she reads one or more of the following magazines:• Sports Illustrated, Mountain Biking Weekly, Biking for the
Family, Serious Cycling
Behaviors
• Regularly shop at sporting goods stores• Enjoy reading the sports section of the newspaper• Shop at high end retailers with higher quality merchandise• Watch sports on TV and listen to sports radio• Works out at local gym or health center
SEGMENTATION
• The Indian bicycle market comprises two segments:
“standards” and “specials”. Standards are the workhorses of the rural economy. These cheap and rugged bicycles have remained unchanged for decades. The specials or “fancy” segment comprises new generation bicycles, which are more expensive. Differentiation is the name of the game here.
POSITIONING
• Metro Bikes Co.’s location, atmosphere and activities position it as the only bike shop in town who takes care of the students. Through discount programs, student financing, recycled packaging, sales promotions and colored employee shirts in the university colors, Metro Bikes Co. will succeed in its endeavor .
• On a global level, Metro Bikes Co. distinguishes itself from the competition by providing a full service bike shop with expert sales staff, along with the most technologically advanced bicycle offerings.
PORTERS’ ANALYSIS OF BICYCLE INDUSTRY
Rivalry among Existing Competitors
• Main competitors include Hero Cycles, Firefox, Atlas Cycles
• It has long history and established significant market size
• Increasing rivalry expected as more firms enter the attractive market (both domestic and foreign import).
Threat of New Entrants
• Expectation of long term demand for bicycles for kids segment remain strong
• However, increased competition into the market from imports from the China makes it less profitable for
new entrants
Threat of Substitutes
• Kids Bicycles are common and range in prices
PORTERS’ ANALYSIS OF BICYCLE INDUSTRY
• Different styles and makes are widely available through many outlets
• Alternative recreational equipment widely available
Bargaining Power of Buyers
• Buyers demand depends on discretionary income for recreational equipment
• Variety of distribution channels
• Higher income households comprises a major portion of the market
• Buyers demand depends on level of real disposable income and health of household
Bargaining Power of Suppliers
• Primary Assembly unit is located in Ludhiana so the supplies of raw materials in assembling the cycles
take less time.
SWOT ANALYSIS STRENGTHS • Biking is a simple, low-impact means of exercise, which
people of all ages can enjoy• Provides excellent customer service including: bike
fittings, training and instruction on proper use, safety tips and repair
• Sells a wide variety of bicycle accessories and parts
THREATS• online bicycle sales as well as catalogue sales and service• Price pressure from mass merchants and large discount
chains• Fluctuations in the economy that affect discretionary
spending
SWOT ANALYSIS
WEAKNESSES• Prices are relatively high• Challenges of the seasonality of the business• Access to Capital
OPPORTUNITIES• Increasing trend of active lifestyle• Area is experiencing population growth• Local university located 3 miles from retail store
COMPETITOR ANALYSIS
• The domestic bicycle industry is oligopolistic in nature, dominated as it is by three organized players: Hero Cycles Limited (Hero), Tube Investments of India Limited (TI) and Atlas Cycles (Haryana) Limited (Atlas). These players account for over 90% of the country’s total bicycle sales.
• Fringe players include Avon Cycles and Hamilton.
While TI is the clear market leader in the specials segment, Hero, which is also the largest bicycle producer in the world, is a clear leader in the standards and in the overall domestic market.
MARKETING OBJECTIVES • As we are a new company, Metro Bike’s first
marketing objective will be to get information about our products and services out to our customers.
• Our second objective will be to develop strong brand name recognition and loyalty among these customers.
• Our third marketing objective will be to increase yearly sales by 5%.
• Our marketing strategy is based on becoming the resource of choice for local bicycle users.
• Our strategy is based on superior performance in the following areas: product selection, product quality, and customer service (including repairs and tune-ups).
MARKETING STRATEGY
Our marketing strategy seeks to optimize our advantage of prime location We want customers to see us as part of their daily experience, and a shop they can depend on for quick repair and maintenance service.
PRODUCT STRATEGY
• Product Strategy- Metro Bikes Co. will sell two types of high quality and high performance bicycles:
1) Comfort bikes geared toward the recreational user,
2) Youth bikes for kids 6 and older.
Metro Bikes Co. will carry 5 brands of bicycles: Trek, Specialized, Giant, Raleigh America, and Hero Bikes, all of which are top sellers in the specialty retail market
PRICING AND PLACE STRATEGY
• Pricing Strategy- • Product and service pricing is based on offering high value to our
customers. • The price range for tune-ups and repairs will vary accordingly, but the
following is a list of price ranges for our two types of bicycles:
• Comfort - $150 to $500• Youth - $125 to $400
• Place/Location Strategy- • All products will be distributed through the retail store located at the
corner of heavily traveled Main Street and Bourne Avenue in downtown Abbotville.
• All repairs and service will be provided at this location. • However, we will create a website for our business that will allow users to
contact the store and view our complete list of products and services.
PROMOTION STRATEGY
• Promotion Strategy- We will market our business using the following mediums: television, radio, and newspaper advertisements, business website, printed promotional materials.
• Our television and radio advertisements will be aired on local stations.
• We will place newspaper advertisements in two of the local papers and the local university’s paper.
• Our website will be up and running by opening day. • We will also utilize print advertisements such as fliers
and post cards to promote special sales events.
DISTRIBUTION CHANNELS
• Bicycle sales are accomplished in this country through five primary and distinct channels of distribution — specialty bicycle retailers, mass merchants, full-line sporting goods stores, outdoor specialty stores, and "other," which is comprised of a mixture of retailers (including Internet sales).
• Department, discount and chain toy stores (mass merchants) sell mostly price-oriented products.
FINANCIALS/BUDGET PLAN IN Rs.
• Research Costs Total 378002.00
• Communications Costs Total 641250.00
• Networking Costs Total 6350.00
• Promotions Costs Total 557500.00
• Advertising Costs Total 369100.00
• Public Relations Costs Total 160000.00
• Meal Costs Subtotal 37950.00
• List Service Costs Subtotal 77700.00
• Audio/Visual Services Subtotal 17870.00
• Additional Costs Subtotal 21695.00
• ESTIMATED MARKETING GRAND 22,67,417.00
•
MARK UP PRICE
• MARK UP PRICE• Market Suggested Retailer Price $.480.00 • Retailers Mark Up Price (25%) $.120.00 • Wholesaler Price $ . 300.00 • Manufacturers Mark Up Price (10%) $ .25.00 • Manufacturers Cost $ 250.00
• Total Investment = $ 2,50,0 0,000
• Total Production in One Year = 1, 00,000 Units
• Fixed Cost = 40% of Investment = $ 10,00,000
MARKETING RESEARCH
• As part of their philosophy of listening to the consumer and serving their needs, Metro Bikes Co. will conduct a survey on campus asking students questions about their biking preferences, how often they ride, why they ride, and what appeals to them when choosing a bike vendor.
• These questions should help the Metro Bikess Co. gain a better understanding of the concerns and attitudes of the student market
RISK ANALYSIS• The first risk is competition with HERO Bikes and
ATLAS Bikes and others. • Another risk is the possibility of the expansion
plans being delayed. • One last risk is the possibility of a new parking deck
being built on campus within the next school year. This deck would significantly reduce the parking restrictions placed on the freshman population. If the proposal for this deck is approved and built, the concept of segmenting the student market to focus on freshmen will no longer be valid.
CONTINGENCY PLAN
Single Segment
Targeting Other Segment
Diversifying Worldwide
REFERENCES
• Philip Kotler- Marketing Management
• Business Plan Generation Model
• www.entreprenuership.com
• www.bplans.com
• www.Canvasbm.com
THANK YOU