Powerbike in Thailand - Assignment Example

Powerbike in Thailand Introduction For any business to enter a market and maintain its niche therein, there are several factors that are involved and form a complex interplay. This means that before entering a new market, several factors that underpin the market forces of demand and supply must be brought into consideration. The same also means that such a business must take into consideration, incentives to trade, government policies and even infrastructure. The issue above is applicable to Powerbike which has been in operation, after it had been founded by the two siblings Nui and Ning. Powerbike deals in mountain bikes, women’s specific bikes, children’s bikes, road bikes, bicycle motocross (commonly known as BMX bikes) and hybrid bikes. This company intends to operate in Thailand, especially in its capital, Bangkok, having considered several factors as the rallying points towards Powerbike’s possible success. Some of these factors that Powerbike puts into consideration include Beijing’s demography, awareness on environmental safety and the government’s initiatives to entrench environmental safety, Thailand’s infrastructure, the dominant entrepreneurial predisposition that Thailand continues to inherit from its oriental culture and the extent of economic development in this country. Taking all the above factors into consideration are not only supposed to serve as possible indicators to Powerbike’s possible success, but the same are also to guide Powerbike’s marketing plan and thereby serving as the source of this business organization’s blueprint. While there are several alternatives that Powerbike can use as a means to positioning itself in the market, it is a weighty matter, considering that taking inappropriate positioning strategies in the market may result in the failure of this business and thereby dealing it a coup de grace. Some of the strategies that Powerbike may have to choose from when entering the market include specific demography, low-price strategy, strategic distribution, high-price distribution and affinity. 1. A Detailed Description of the Current Consumer Market for This Business, In Terms Of Demographics and Psychographics There are several factors that indicate the possible business success of powerbikes in Thailand. First, demographics favor the possibility of this voluminous amount of sales, since the market is actually the population itself. Concerns about pollution in Thailand are also bound to increase the sales for powerbikes. The extent of these concerns is seen in the fact that Thai government has gone past forming a full scale division for the purpose of abating pollution, to strengthen Rotary International and other nongovernmental organizations to ensure the distribution of bicycles in villages. This means that the consumer market is fully prepared, psychologically to start using powerbikes. The size and density of Thailand’s urban population guarantee powerbicycle a bigger market share, compared to other markets. For instance, powerbike’s headquarter is based in Roi Et, a city that has a population of 1.2 million people. In the same vein, Thailand’s capital and largest city, Bangkok brags of a population density that totals about 6.3 million. Areas that surround Bangkok form the greater Bangkok area, and have a population that is as large as 11.9 million. It is therefore lucid that powerbike can easily make big sales in the heart of Thailand and its surroundings. Generally, Thailand’s overall democracy can favor powerbike to a very great extent. Thailand in itself is an ethnic variegation which comprises the Chinese who make up14% of the population, Thai, 75% and others, 11%. The diversity of these ethnic groups means that Thailand is culturally variegated. The import of a culturally variegated market is powerbike is less likely to encounter cultural inhibitions, since cultural variegation equally indicates the presence of a cosmopolitan setting. Thailand also has a large population which will guarantee powerbike ready market. Thailand has a population of 67,091,089 people, according to 2012 estimates. Above all, it is undisputable that Thailand’s population structure will favor powerbike’s marketing success. Generally, the age between 1 and 14 years makes up 19.9% of the Thai population. This age bracket is an avid user of bicycles, because it comprises the energetic and the growing who love playing. This age group will see powerbike as an avenue for gaming. This is especially the case, given that the greater part of this age group is male. Male children in this group amount to 6,779,723, while girls total 6,466,625. Because of biological reasons, boys overshadow girls in outdoor games that require rigor like cycling. Conversely, the age bracket covering persons between 15 and 64 years accounts for 70.9% of the Thai population. Given that this age bracket contains the most energetic and economically constructive population. This rubric encapsulates those in the interschool transition stage, college going age, the job seeker, high school goers, and those in the job market and business sector. Given that it is this group that uses cycling the most for commercial or serious purposes the most, powerbike can rake in a lot of sales by targeting it. That this group forms the largest demographic bulk in Thailand is a valuable advantage for powerbike. This is because the group also contains those who have not obtained their driving licenses, either because they have not attained the legal age, or because of economic expedience. At the moment, this group of 15-64 years remains very promising since those without driving licenses are automatically confined to cycling. This serves as a source of bumper harvest for powerbike. This swelling population density that characterizes Bangkok and its outskirts has always been concomitant to congestion. This same congestion culturally has been prolific in shoring up massive traffic jams, especially during rush hours. As Thailand’s population continues to grow and gravitate towards city or urban life, it is becoming increasingly common to find commuters gridlocked in traffic, during night and daytime. Introducing powerbikes as a way of alleviating the perennial stress that is traffic snarl-ups will go a long way in guaranteeing more sales. The possibility of introducing powerbikes as a possible solution to traffic congestion is also poised to be a success, given the industrious mien that Thais possess. Because of their industriousness, Thais loathe wasting time in traffic. Powerbikes are bound to be embraced en masse as the solution to this needless waste of time. Likewise, most of the universities and colleges in Thailand are in Bangkok and its outskirts. This again can easily be translated into an added advantage by powerbike since students in tertiary levels of learning are young and energetic enough to cycle. In fact, the demand for powerbike is bound to be spurred on by infrastructural designs and arrangements in Thai universities. Buildings and lecture halls in high institutions of learning in Thai are widely spaced. Thus, when moving from one lecture hall to another, students have almost always been compelled to run or walk briskly. This leaves them too tired and sun-burnt for evening lectures. Powerbike can serve as the most plausible solution to this setback that undermines learning in Thai universities and colleges (Humphrey, H. 2001.. That the Thai population is ripe and ready to provide powerbike with ready market is a matter that is underscored by the fame that cycling enjoys in Thailand. Partly, this entrenchment of the culture of cycling is a matter has been brought about through state intervention. The government for instance in 2010 boosted the Bangkok Cycling Tours which was operating under the aegis of the Tourism Authority of Thailand. This was followed by the No Child without a Bicycle campaign in 2007, as a campaign that ensured that as many Thai children as possible owned a bicycle. This 2007 campaign was aimed at assuaging student tardiness in schools and promoting health among these students. These two values would be realized as children cycled to school, in lieu of trekking barefoot. This development underscores the extent to which the Thai population has become acculturated towards cycling. This culture will make it easier for powerbike to penetrate Thai market and to curve itself a niche therein. Likewise, the government also encourages tourists to acquaint themselves with bicycle transport, since this will help them experience the indigenous culture and to view the landscape and beautiful natural sights firsthand. 2. Appropriate Positioning Strategy for Powerbike and an Example of the Body Copy for a Piece of Advertising In order to carry out tenable and effective market segmentation, it is important that Powerbike first identifies a desired section or segment of the market. Going about this approach will portend, analyzing the conditions prevalent in the market and then choosing a strategy that will be both beneficial to the firm, its policy, vision, mission and goals and most compatible with the firm’s marketing strategy. This may leave Powerbike considering diverse options such as low-price strategy, specific demography, high-price strategy, affinity and strategic distribution. When going about market segmentation, it is best that Powerbike realizes that low-price strategy will not be very beneficial due to the presence of other competitors. Above all, the need for Powerbike to break even may be frustrated since low-price strategies needs to take time before any fruit is borne. Conversely, adopting a high-price strategy may also not help Powerbike realize sustainable gain due to the presence of many competitors. Powerbike may forfeit clients to other competitors who may down their prices as a way of increasing the volume of their sales. Likewise, using strategic distribution may not be effective since there are other competitors that entered the market before Powerbike. It may take more than just strategic distribution for Powerbike to penetrate the market and to stabilize itself in the market. The fact that the Thai population is variegated also makes it hard for Powerbike to make an affinity between its products and the population. This deals affinity as Powerbike’s most appropriate positioning strategy. When determining the quality of the market that is supportive of Powerbike’s marketing strategy, it is important that the needs of the market are identified. This will leave the company with the knowledge that the bracket between 1 and 61 s the most needful, as long as market segmentation is concerned. After singling out this bracket, Powerbike must use advertising as a way of penetrating the market. The use of advertising in turn should be also segmented to target the infant, the teenage, the college-goers, the middle age and the mature adult below the age of 61. When advertising for the infant, matters such as safety, durability and availability of spare parts should be emphasized. Conversely, when airing advertisements aimed at college-goers and his contemporary, qualities such as speed, vestiges of technological advancements (such as power gears) and sleek appearance must be highlighted. The same qualities can be detailed for products aimed at the middle-aged. For aging adults, safety must be emphasized. Because advertising is to help Powerbike inform the market of its arrival and continued presence in the market, appropriate technology may now be used to suit the needs and qualities of these ages. This will have Powerbike making its bicycles, motorbikes and tricycles in a way that suits the needs of these different age groups. As a way of diffusing risk in the market, Powerbike may supplement these age-specific products to target a special group which is the handicap. Goods and services meant for the handicap will help Powerbike maintain a more humane mien, while also helping it attenuate the limitations that come with product specialization and specification. When trying to communicate the essential benefits it is likely to inject into the market, or bequeath its potential customers, it is very important that powerbike uses specific demography. This means that when seeking to make, sell and determine the price of its products, subtle or covert messages should be sent to the market, to the effect that a given demography is the main target. Likewise, it is important that all efforts that are to be geared towards public advertising, promotions and public relations have to target a given section of Thailand’s demography. Because of the nature of Powerbike, the age group that should be targeted is the one falling between 1 and 64 years. This is because it is this group that for a myriad of reasons cycles the most. The need to use specific demographic position is underscored by the futility that accosts attempts to be all things to everyone. Likewise, failing to use the low price strategy may prove to be counterproductive for Powerbike, since it will mean that Powerbike’s scope of operation will have been widened. A wider scope of operation will mean higher costs of operation, high employee turnover (due to the need to higher more employees to meet the wider scope of operation), inefficiency in accurately meeting the desires of the market (since the market will be wide and variegated) and a wider competitive front. For instance, the aforementioned operational scope is likely to be attenuated since Powerbike will have rid itself of the need to introduce designs that are suitable for those who are past 61. On the other hand, using specific demography as appropriate positioning strategy has a lot of values that can benefit Powerbike. First, Powerbike is bound to realize a larger market share because it will have narrowed down the segment of the market that it is targeting. The import behind this development is that with market segmentation, the scope of competition is narrowed, due to fewer competitors. Particularly, there is no doubt that Powerbike is bound to encounter competition in Thai market, since cycling is not new in Thailand. However, immediately it targets the age bracket between 1 and 64, Powerbike is likely have its own unique and sizeable market share (Carilus and Michal, 2009, 19). Another value that Powerbike is likely to realize after it carries its market segmentation is increase in the demand of its merchandise. This is because, using and targeting special demography as a form of appropriate positioning will compel Powerbike to repackage and brand its products in a manner that will be attractive to and suitable for the infant, the teenage, the youthful and mature adults. It is this packaging and branding that helps organizations to maintain a touch of uniqueness and thereby putting Powerbike in its own class. This aspect of uniqueness will enforce customer loyalty and increase the demand of the same product, but the same characteristic is likely to help Powerbike increase the price of its products due to this increased demand and customer loyalty. 3. The Likelihood of This Enterprise Moving To Service the Business Market in Bangkok There is every reason to indicate that Powerbike will move to service the business market in Bangkok. First, it is important to note that the owners of Powerbike are businesspersons and siblings, Nui and Ning. It is very unlikely that Nui and Ning as businesspeople will open a business that is meant to ease and promote transportation, and leave out of total consideration, Thailand’s business fraternity. Partly, this is because, Powerbike is a locally run family business in Thailand and is therefore advantaged with knowledge on the relationship between Thailand’s transport system and entrepreneurial sector therein. Secondly, Nui and Ning are well acquainted with the nature and underpinnings of Thailand entrepreneurship, being possessors of Marketing and Accounting degrees from universities in Australia and Thailand. This means that Nui and Ning are both innovators and businesspeople who can harness and integrate the synergies of their Powerbike business to serve the business sector in Thailand. The large population in Bangkok is likely to also push Powerbike into serving Bangkok’s business market. Despite Thailand having been devolved to an extent of having two special administrative districts (Bangkok and Pattaya), yet Bangkok remains hugely crowded, partly because it has a status of a province. Another reason for Bangkok’s high population density is its status as Thailand’s administrative and economic capital. It is this denseness in population distribution that has always characterized Bangkok with both diurnal and nocturnal traffic jams. It is for this reason that the business sector in Bangkok may see in Powerbike, a solution to this double-faced problem that is a waster of business time and resources. The corollary to this above problem is that the spirit of diligence is prevalent in the oriental culture which Thailand happens to be part of. In light of this fact, as the economic hub of Thailand, time wasted in Bangkok’s traffic jams are highly loathed especially by businesspeople and Powerbike may just move in to take advantage of this state of things. Powerbikes bikes can circumvent or wade through traffic congestion, and hence helping redeem time. The fact that Powerbike offers different ranges of bikes also increases the likelihood of it deciding to serve Thai business sector. Powerbike mountain bikes for instance give businesses in Bangkok’s outskirts an alternative and tenable means of transport since most businesses that are located in rural Thailand are small scale. The small scale nature of many businesses in Bangkok is concomitant to low income earnings. These low income earnings on the other hand constrain businesses from the use of vehicles. The foregoing means that these Powerbike mountain bikes can go a long way in providing a very appropriate, affordable and convenient means f transport. Likewise, the convenient aspect of these mountain bikes is seen in the ragged and undeveloped terrain and relatively narrow footpaths that are found in Bangkok’s outskirts. In the same vein, since vehicular modes of transport cannot be used to traverse Bangkok’s crowded footpaths, these mountain bikes may serve as the best means of transportation. Powerbike may therefore consider this factor in the long run. In a closely related wavelength, it is important to note that although Thailand can brag of a GDP that is as high as 601 US dollars, yet there are low income earners therein. Thai population that lives below the poverty line accounts for 8.1% of the country’s total population, according to 2009 estimates. Likewise, the country continually sustains unemployment rate of 0.8%, according to 2010 estimates. The gravity behind this development underscores a significant presence of low income earners who are largely unemployed. This means that this group mainly involves itself in small businesses as a means to a living. Not only are economic compunctions playing a key role in keeping these people from the use of motor vehicles, but the same convinces them of the needlessness of striving to obtain driving licenses. Thus, Powerbike can bridge this economic rift for these low income earning businesspersons (Chittithaworn, 2011, 185). It is also a fact that being the administrative and economic capital of Thailand, Bangkok has the highest count of business statistics therein, than any other province or city. This means that in Bangkok, all the incentives to trade such as insurance, banking, dense transport, security and communication networks and an enlightened population abound. Since these auxiliaries to trade have enabled commercialism in Bangkok to thrive, it is very reasonable that Powerbike may consider serving the business sector in this capital. The infrastructure that complements Bangkok may also encourage Powerbike to consider serving Bangkok’s business sector. There are several institutions of higher learning such as colleges and universities in Bangkok. This guarantees a beehive of business activities in Bangkok as entrepreneurs will seek to meet the needs of these centers of academics. Some of the enterprises whose livelihood will have been necessitated by these centers of learning include food, catering and accommodation services, bookshops and stationery outlets, recreational centers and entertainment joints, fashion and design outlets and transport business. All these may need to expend the services of Nui and Ning’s Powerbike. Many businesses in the meantime are aiming at going green, abating the dangers of greenhouse effects and observing corporate social responsibility. That the problem of air pollution has become an issue in Thailand is a matter that is well elucidated by not only Bangkok being heavily industrialized, but by the Government of Thailand’s initiatives to promote cycling. This was for instance seen when the Tourism Authority of Thailand promoted the Bangkok Cycling Tours under the auspices of the government in 2010. Before that, the government had instituted the No Child without a Bicycle campaign, in 2007, in liaison with Rotary Down Under. In respect to the foregoing, it may b expedient for businesses to adopt cycling as an environmentally friendly mode of transport. This may help Powerbike to quickly invade Bangkok business market and to consolidate its stay therein. The import of this development is that not all these environmental safety awareness programs and promotions were being carried out in Bangkok, meaning that awareness on environmental safety is very much alive among the Bangkok business fraternity. References Chittithaworn, C. et al. 2011. Factors Affecting Business Success of Small & Medium Enterprises (SMEs) in Thailand. Asian Social Science, 7 (5), 180-190. Carilus, J. & Michal, P. 2009. Corporate Social Responsibility in Thailand. Realising sustainable success in Southeast Asia, 21 (13), 19. Humphrey, H. 2001. Entering the Thai Business Market. Journal of Thailand Businesses, 36 (12), 11-27. Jo, H. & Harjoto, M. 2012. The Causal Effect of Corporate Governance on Corporate Social Responsibility. Journal of Business Ethics, 106 (1), 53-72. Ngaochay, T & Walsh, J. 2011. Paths to Success for 7-Eleven in Thailand. Information Management & Business Review, 3 (1), 17. Simone, D. 2008. Thailand Business Opportunities. Journal of Thailand Businesses, 35 (2), 199-207. Thailand Tourism Report. 2012. SWOT Analysis. 2 (2), 6-9. Read More