The Benefits of Cycling: A Marketing Opportunity for Powerbike in Thailand - Term Paper Example

THE BENEFITS OF CYCLING: A MARKETING OPPORTUNITY FOR POWERBIKE IN THAILAND Table of Contents Table of Contents 2 Introduction 3 Products and Services4 Market Analysis 5 Demographic Segmentation 6 Psychographic Segmentation 8 Positioning Strategy 10 Market Opportunity in Bangkok 12 Conclusions 14 References 15 Bibliography 17 Introduction Cycling is considered to be the most economical as well as pollution free transportation. Cycling also offers high flexibility and increased mobility to a colossal group of population. Cycling is also popular among the group of people which could not afford a car. Therefore the companies involved in the business of cycling may get immensely benefitted. Power bike is one such company which is also associated with this business for a long period of time. Power bike is a small-sized family owned business organization engaged in the business of selling bicycles in Thailand. The bicycle retail shop is situated at Roi Et in Thailand and was founded in the year 2006. Power bike is already established as a successfully run business and is engaged in selling accessories related to bicycles and maintenance and repair of bicycles as well. Nui and Ning are presently the owners of Power bike. The business firm has in offer a wide range of bicycles to suit the needs and requirements of different types of customers. Recently Power bike is thinking of expanding its business to generate greater revenues and have a sustainable growth in future. In order to become successful in implementing its expansion strategy it needs to develop a strong marketing strategy for the same. The organization is also looking for the opportunity to establish its business in the market of Bangkok, the capital city of Thailand. The report will highlight the overview of the company and its product and services. Apart from that the report will also emphasize on the matters related to marketing opportunity of Power bike in Bangkok. The promotional policy and the positioning strategy will be also underlined in the project. Finally the report will give an insight of the Bangkok market and the favorable factors which can be used by the company in order to expand. Products and Services Powerbike has in offer a wide variety of products and services for its customers. The business firm primarily sells six types of different bicycles to suit the needs and requirements of its customers. They are: 1) Mountain bikes: These types of bicycles are mostly designed to be driven through any types of terrain because they are strongly built. The product is capable of managing any type of territory. It is specially designed for upward climbing and to handle rough surfaces of mountain. Especially the tires of the cycle were designed by employing superior technology in order to make sure that it do not gets wired out quickly. 2) Road bikes: These types of bicycles are characterized by having low weights and are mostly meant for racing purposes. The product is also designed for recreational purposes and to provide high performance. 3) Specific bikes for women: These types of bicycles are specially designed for women having ladies saddles fitted to them and comes in wide range of colors. The wide ranges of colors are mainly proposed to match the demands of female consumers. The product will also offer high comfort levels. 4) Childrens bikes: These types of bicycles are meant for children and come in different sizes. This is a very good option for the starters. This is mainly for the children’s of age group within 12. The bike is designed in such a way that the children’s who ride it will feel to be on an adventure trip. 5) Hybrid bikes: These types of bicycles are mostly meant for recreational purposes and commuting. It consists of blend of the features of the mountain bike as well as the road bike. Therefore it can be considered as a multipurpose bike. 6) BMX bikes: These are bicycle motocross bikes which are meant for street riding, dirt jumps and different kinds of bicycle stunts. The company also offers a wide range of services such as after sales servicing and repairing of the spoiled parts. Higher quality and affordable price is the sole criteria for the company in the process of its customer satisfaction. In addition to that the company also efficiently and economically carries out repairing jobs for making the bicycle to function securely. Market Analysis Detailed analysis of the consumer market for the products and services offered by a business organization is the key towards developing a successful marketing strategy of the organization through effective utilization of the available business opportunities of the business firm. The consumer market analysis of an organization can be considered to be a part of the extensive opportunity analysis of the business firm (Stevens, Sherwood, & Dunn, 1993, p.8). The first step towards identifying the target market for Powerbike would be segmentation of the market in Bangkok and its allied areas where the company wishes to set up a new retail bicycle office. Market segmentation is considered to be a procedure of identification of the various user groups within a particular market. These market groups are again characterized of being the major target group of the business firm and they would be offered with different types products of the organization (Croft, 1994, p.1). Proper segmentation of the market would help the firm to offer a particular type of product to a homogeneous group of consumers who would have similar needs and requirements. This would ensure that the firm is able to satisfy its consumers to a greater extent by offering them with what they need. In turn that would mean better utilization of resources of the firm. Market segmentation will also help the firm to have a competitive advantage in the market. Segmentation of market of the consumers primarily consists of five forms. They are: a) Demographic, b) Psychographic, c) Geographic, d) Volume and e) Benefit (Gitman, & McDaniel, 2008, p.299). In case of Powerbike, it would be beneficial for the company if the consumer market segmentation is done on the basis of demographic and psychographic characteristics. The major competitors of the company include La sovereign company and big bike. Both the companies’ offers a wide range of products and services. LA SOVEREIGN Bicycles offers different types of bikes such as men’s bicycle, kids bicycle and women’s bicycle. Among the categories there are different variants as well. The company also provides a range of services such as repairing and replacement of the damaged parts (La Sovereign, n.d.). Demographic Segmentation Demographic segmentation usually segments the market into various factors such as age, gender, income, education, etc. It is also considered as the most accepted and popular way of market segmentation. The fundamental rationales towards its high usage by the companies are cost effectiveness, ease of access and the factors are also easily quantifiable (Botha, Strydom & Brink, 2005, p.66). In the context of the case Power bike manufactures and markets 6 types of different product. Therefore among the six products the company may deploy demographic segmentation for children bikes, women specific bikes and road bikes. Age: The market segmentation could be done based on different products catering to consumers falling under different age groups. The children bicycles could be offered to consumers in the age group of 6 to 12 years. The road bikes could be offered mostly to the consumers in the age group of 13 to 25 years. It is so because road bikes are bicycles which are meant for racing and teenagers which mostly fall in this age group would be mostly interested in riding racing bicycles. Apart from teenagers adults up to age of 25 may also generate interest in riding the road bikes. The road bikes can be interestingly segmented also for the senior citizens. Since the bike is also meant for recreational purposes, therefore it can be easily targeted for the senior citizens who are health conscious and makes use of cycles to keep themselves fit. Hence for the age group of 60-65 road bikes can be an exact solution. Gender: Market segmentation can be also carried out on the basis of gender. As in this case the business firm offers women specific bikes which are mainly intended for the female consumers. Since bikes are hugely popular among the female population in Thailand, the company can get huge benefits out of it. The specialty of the bike is that it is principally designed for girls and will offer huge comforts. The bike is also available in different colors in order to suit the needs of mass. Psychographic Segmentation Psychographic segmentation tries to amalgamate demographics and psychology in order to segment the market. Therefore it hugely assists in the process of understanding the consumer behavior. The major factors for segmenting the market on the basis of psychograph are interest, activities, values & attitudes, personality traits, standard of living or by blending of all mentioned factors (Sargeant & Shang, 2010, psychographic segmentation). Consequently in the framework of the project, the company manufactures and markets mountain bikes, hybrid bikes and bicycle motocross bikes which can be segmented by employing psychographic segmentation technique. Lifestyle: The market can be segmented on the basis of lifestyle or the standard of living. In the lifestyle category there are persons who fall in the group of adventurous, experimenters and different other terms. Therefore the company can segment its mountain bikes for the adventure seekers. The adventure seekers would be most likely to exhibit fearless and courageous attitude. Hence the specially designed bike for riding in mountains will precisely suit the needs of adventure seekers. There are also a group of people exists in the society who likes to accomplish adventures actions but for any reason they could not fulfill it. They may get motivated to do such action either by watching others or from the word of mouth, but out of fear or time constraints they are unable to do it. However they can make use of the adventure equipments if they can employ it in a risk free zone. Such is the case of a hybrid bike. This bike is meant for those people who feels like to have adventure in the own place. The bike is designed like a mountain bike but also has the functionalities of a road bike. Therefore the mentioned group can easily satisfy their needs with this particular offering from the company. Furthermore it is also factual that the number of customer who belongs to this category will be very less and therefore the company can use premium pricing to avail benefits out of it. Activity & Interest: The market can also be segmented on the basis of the individual activities and interest. Individuals exhibit different kinds of interest and like to perform different kind of activities. In the context of the company the product bicycle motocross (BMX) bike is to be mainly targeted to the group of people who demonstrates signs of different activates and interests such as street riding, dirt jumps, poker runs, slow cycles and different other cycling stunts. BMX is the appropriate product to demonstrate their skills in the streets or wherever they will be performing their stunts. The company has adopted various differentiation strategies in order to create a core competency. Some of the significant core competences or differentiations are as follows: The company ensures fast delivery of the cycles after the servicing. The staffs also portray friendliness towards the customers so as to increase the customer experiences. The mechanics are highly qualified as well as trained properly. The service stations are also well equipped thereby ensuring quicker repairing and servicing jobs. Pricing is also another factor which is of utmost importance to the company. The company prices its products in such a manner so that it remains affordable to its target segments. Positioning Strategy Positioning can be defined as the method of positioning the product into the minds of the consumers. Positioning is mainly carried out to convey the target customer about a particular feature of the product. However there are also other reasons for positioning. In other words it is simply an act of designing the products of the company so as to ensure that the product occupies a desired position in the minds of the consumer. The best method of conveying the target customer about the product positioning is advertisement. For example Volvo has successfully positioned itself as one of the safest cars of the world (Lilien & Rangaswamy, 2004, p.117). Automatically Volvo comes in mind when person thinks about a car which is safe. Whenever a person thinks of a lavish car Mercedes comes into his mind. These are some of the examples of successful positioning. Positioning is also referred to as the strategies which a firm develops in order to distinguish its product from the competitors. To cite an example KFC tries to distinguish its foods by amalgamating a variety of spices. Now in the context of the company and according to its product it is recommended that they may use different type of positioning strategies in order to position the products. Therefore the positioning strategies which can be adopted by the company include positioning based on features and positioning based on pricing. Since the company maintains an affordable price for the products, therefore positioning based on pricing is a good option which can be practiced. Being a low priced product the positioning will reveal that the product offers value (Lamb, Hair & McDaniel, 2011, p.136). The next positioning which can also prove to be a valuable and significant way is positioning based on products attributes and features. Given the fact that the company has a wide range of products with various features and application, it can be easily positioned on the basis of its features. Apart from the mentioned positioning strategies the company may use one more interesting positioning strategy i.e. positioning based on benefits sought. This positioning strategy will provide more insights about the needs and demands of its customers (Kotler & Scheff, 1997, p.117). The most important part after the positioning strategy comes in the form of the promotional strategies adopted by the company. Promotional strategy plays the most effective role in order to convey the positioning statement to the consumers. Hence the strategy which is to be put into action must be appropriately evaluated. This will also ensure that the target customers are reached via the chosen medium. The promotional strategy which can be adopted by the company in order to reach the target audience is demonstrated below. The company can use Television and news paper for promoting its product. Since newspaper and Television offers a mass reach it will help out in serving the purpose. Moreover Television and newspaper will also support the company to grab new markets which is not possible through other platforms. The next recommendation for the company is that they can appoint a brand ambassador for the company who will help to connect with the audience in a much effective manner. Some of the eminent personalities can be chosen as the face of the company. The final promotional strategy that can be implemented is the participation of the company in different trade fairs. Participation in trade fairs will increase the significance of the company and will also help in the positioning process. In this process the company can also offer free trials to the customers. Body Copy Body copy can be referred to as the main transcript of a printed advertisement and provide ample content on the page (Costello, 2012, p.133). Body copy mainly performs two functions, the first job is to create interest in the minds of the people and the other job is to make sure that the reader remembers the name of the advertised product. It often happens that a user remembers the advertisement but could not remember the product; hence a body copy must be written in such a way that the user also remembers about the product. In the context of the project body copy can be:- POWER F-U-L BIKE As the name suggests ‘power bike’, yes it’s true we offer power to the bike. Market Opportunity in Bangkok It is very much important for a company to expand its business geographically in order to get more customers and generate more revenue. Therefore the company should expand its business in Bangkok. The expansion can be accomplished by opening retail outlets and a branch office. However it should be noted that in order operate the retail store in a profitable manner, location plays an important part. Location is also considered to be of paramount importance. The factors which should be assessed prior taking the decision of expansion to Bangkok is the facilities offered by the place. There are also different factors which must be thoroughly measured. The most important factors are logistics facility, market structure, market saturation, competitors, local laws and other external factors. However after studying about Bangkok the following are the findings:- Bangkok is the largest and the capital city of Thailand and also has a high density of population. Therefore the company can easily avail the opportunity of targeting the mass population of Bangkok as its customer. Furthermore as the cost of owning a bike is also low it can target the lower middle class population as well. Bangkok is also popular for its huge traffic jams, so the people of Bangkok may highly prefer bicycle as the way of transportation. Cycle tourism is enormously popular in Bangkok. The tourism authority of Thailand (TAT) is actively promoting cycle tours in Bangkok. Other government initiatives such as no child without a bicycle which is meant for helping the students to reach school via bicycle and not walk bare footed. Such initiatives represent huge opportunities for the company. Furthermore most of the universities in Thailand are located close to Bangkok; therefore college students can also be targeted. Therefore on a whole Bangkok offers favorable factors for the company to carry out the business. Hence it is recommended that the company must expand to Bangkok. Conclusions Power bike is a bicycle retailing company which is based in Thailand. The company offers a range of products and services. The company mainly manufactures bikes for mountain riding, racing and for recreational purposes. The report was about the segmentation, targeting and positioning of Power bike and also to look after the opportunities of the company towards its expansion in Bangkok. Therefore after conducting all the required researches it can be concluded that the Power Bike must expand to Bangkok as it offers all the favorable condition for a cycle retailing company. Moreover with the expansion the company will be able to generate new customers and earn more revenue. References Botha, J., Strydom, J., & Brink, A., 2005. Introduction to Marketing. Cape Town: Juta and Company Ltd. Costello, V., 2012. Multimedia Foundations: Core Concepts for Digital Design. Massachusetts: Focal Press. Croft, M. J., 1994. Market Segmentation: A Step-By-Step Guide to Profitable New Business. London: Routledge. Gitman, L. J., & McDaniel, C., 2008. The Future of Business: The Essentials. 4th Ed. Connecticut: Cengage Learning. Kotler, P., & Scheff, J., 1997. Standing Room Only: Strategies for Marketing the Performing Arts. Boston: Harvard Business Press. La Sovereign, No Date. Mountain Bikes boys. [Online] Available at: [Accessed 07 June 2012]. Lamb, C. W., Hair, H. F., & McDaniel, C., 2011. MKTG 5. Connecticut: Cengage Learning. Lilien, G. L., & Rangaswamy, A., 2004. Marketing Engineering: Computer-assisted Marketing Analysis and Planning. Pennsylvania: DecisionPro. Sargeant, A., & Shang, J., 2010. Fundraising Principles and Practice. New Jersey: John Wiley & Sons. Stevens, R. E., Sherwood, P. K., & Dunn, J. P., 1993. Market Analysis: Assessing Your Business Opportunities. NY: The Haworth Press, Inc. Bibliography Ries, 2003. Positioning: The Battle for Your Mind. New Delhi: Tata McGraw-Hill Education. Weinstein, A., 2004. Handbook of Market Segmentation: Strategic Targeting for Business and Technology Firms. London: Routledge. Read More