Marketing Plan for Manchester E-Bike Inc - Essay Example

Marketing Plan: Manchester e-bike Inc Introduction This marketing plan will examine the e-bikes venture by Manchester e-bikes Inc. in Market Street, Manchester City. Global warming is causing many threats to the living organisms and harm to the environment. Organisations should realise the importance of dealing in eco-friendly products. This realisation will go an extra mile in reducing the effects of global warming. E-bike is an eco-friendly product because it has a zero CO2 emission, and it has efficiently converted the human force into proposed force. An electric bike (e-bike) is a bicycle with an electric motor that supports pedalling. According to Walker (2009), in 2012, over 20,000 e-bikes were sold in United Kingdom. Support for greener transport continues to grow thus making e-bikes become a trend, and giving a higher advantage to the stockers of e-bikes. This is a marketing plan in the field of sustainable mobility. The success factor in electric bicycle is that it has several benefits in comparison to conventional forms of individual mobility. E-bikes business has been selected because electric bicycles mitigate accessibility problems and reducing energy use and most relevant emissions of commuter traffic. These issues are the success factors of Manchester e-bikes Inc. because e-bikes will reduce environmental degradation, as well as offer cheap transport options. This plan focuses on the company’s growth strategy, suggesting ways in which Manchester e-bikes Inc. can build a large customer base, develop products that are differentiated from the already existing brands in the market. This plan will also provide information regarding the external environment in which the Company will operate in order to provide it with a good startup strategy. Since Manchester e-bikes Inc. will market its products directly to its customers, it is considered a business-to-customer (B2C) marketer. 1.1. Business Overview Objectives Manchester e-bikes Inc. has set the following objectives to be fulfilled in the first three years: Establish working relationships with several assembly materials suppliers and at the same time negotiate the best possible purchasing terms. Build a strong brand identity as the leading provider of e-bikes in Manchester City. Build strong and good relations with customers in order to create strong sales volume. 1.2. Mission Statement Aim of the Marketing Plan This marketing plan seeks to promote consumer awareness of the e-bikes and to motivate and entice them to purchase e-bikes. An outline of the strategies through which the e-bikes will be marketed will be given in this marketing plan. A substantial research will be undertaken in order to develop viable assessments that will help Manchester e-bike Inc. to determine the marketing and image branding direction for their products. 2. Situational Analysis: Macro and Micro Analysis 2.1. PESTLE Analysis Every business is rooted in a particular macro environment. An instrument that is used to scan the macro environment is the PESTLE analysis (Andler 2008, p. 197-198). This analysis will be conducted in consideration of the political environment, economic environment, technological, and social environment. The focus will be on Manchester City e-bikes industry. 2.1.1. Political Environment Politically, United Kingdom has stable governments; therefore, the country is politically stable to support businesses. The e-bike industry is an emerging industry worldwide. In United Kingdom, the development of e-bike industry is rapid. The UK government policy is of great influence on the economy. Therefore, Manchester e-bikes Inc. has to design right business strategies in order to build and increase its competitive advantage. 2.1.2. Economic Environment United Kingdom was not spared by the economic recession that was brought by US sub-prime crisis. Most of the population is middle-income earners; therefore, the company can target this group with fair priced e-bikes. 2.1.3. Social Environment Socially, United Kingdom comprises lower class and middle-class people. Most of them are employed in businesses as well as in the service sector. 2.1.4. Technological Environment In the United Kingdom, Bike manufacturers focus mainly on technical innovation. In order to develop the best models, the e-bike companies invest greatly in research and development strategies in order to gain higher market share. 2.1.5. Legal Environment United Kingdom has a strong legal system that addresses all legal-related business issues and disputes. The e-bike industry is not so regulated; therefore, Manchester e-bike Inc. will have a favourable business environment to operate in. 2.2. Porter Five Forces To make a proper analysis of the Manchester City e-bikes industry and the competition in the Manchester markets it is necessary to analyse the Manchester e-bike sector with Porter Five Force Model. 2.2.1. Bargaining Power of Suppliers The presence of various e-bike manufacturers in the United Kingdom has brought about high supplier competition. However, the Market Street area of Manchester City does not have an e-bike outlet. Manchester e-bike will need to focus on differentiation strategies although the competition is low in this area in order to discourage other potential entrants. 2.2.2. Bargaining Power of Customers The bargaining power of the customers in Manchester area may be high because the switching cost is low, and there are many suppliers in the United Kingdom. Due to the large number of e-bike retailers, the buyers are very sensitive to the price changes of the bikes offered by these companies. According to Samuel and Douglas (2006, p. 329), differentiation is the key aspect for attracting the attention of customers in the UK cycle industry. 2.2.3. Threat of Substitute Products The various e-bike products in the future can pose a threat to Manchester e-bikes and hence the Company should keep on innovating new bikes. 2.2.4. Threat of New Entrants The new entrants in Manchester City e-bike market may pose a threat because they may bring in fierce marketing strategies and low pricing strategies to capture the Manchester e-bike market. Manchester e-bike Inc. should conduct a proper competitive analysis of the potential entrants and develop effective marketing strategies to counter the challenge. 2.3. Segmentation 2.3.1. Positioning strategy The shop is well positioned to attain its main aim of becoming a pioneer in this area. It can easily become a market leader by offering e-bikes to the young e-bike enthusiasts and the other target groups identified earlier in this paper. The firm will offer a wide range of e-bikes that will address the needs and requirements of all its customers. Its focus is to target all age group requirements. The firm will have five different bikes styling to cater for a wide range of customers needs. These brands are Touring, Dyna, Softail, V-Rod, and Sportster. 2.3.1.1. Customised e-bikes This group of e-bikes will be customised to meet the unique customer needs. The Company will conduct time-to-time analysis to establish the designs that customers like. The firm will have in place a designing team that will maintain a constant touch with the customers either physically or through the internet. 2.3.2. Branding Strategies Brand strategies of the organisation act as its communication tool to the customers on how the brand is positioned. Manchester e-bikes Inc intends to design bikes that will give their customers a sense of pride. The Company will use the segmentation strategy to divide the Manchester e-bike market into different segments such as baby boomers and young generations. The Company’s focus is not to capture the market using low price strategies nor through cost leadership. Rather, the company’s focus is to maintain its brand image and doing premium pricing for its products. After a five years period, the firm will increase its product mix. It will also launch new e-bike models to provide a wide range of options to its customers. The Company will incorporate a PLC (Product Life Cycle) analysis in its branding strategy in order to identify the bikes that are not favoured by customers and phase them out. The PLC will also help the company to promote the e-bikes that have high customer liking and promote them with effective marketing strategies. The organisation must focus on retaining its brand image in future (Tsa, Liang and Liu 2007, p. 10). However, the organisation must pay attention to quality and innovation. 2.4. Target Market By focusing on commitment to service and quality human health, Manchester e-bikes Inc intends to implement a niche differentiation strategy in a diverse marketplace. It will build its ability to differentiate its products in order to have superior annual returns. Its target market consists of commuters, elders, and people suffering from obesity. According to Leeds (2010), 62 percent of Britons are either overweight or obese. E-bikes offer benefits that will help minimise these problems. E-bikes offer a better alternative to public transport. The commuters will achieve two objectives by using e-bikes. First, they will engage themselves in a physical activity as well as reduce their transport expenses. According to WHO (2011), inactive people should start with small amounts of physical exercises and gradually increase the intensity with time. This makes e-bikes the best option for this group of people. The population in UK is ageing, and it is important to treat the 65+ people with care in order to improve their health. E-bikes can be one of the greatest means of keeping the elderly healthy. Riding a bike more regularly reduces the chances of suffering from diseases such as obesity and other chronic diseases. Manchester e-bikes Inc. will target these groups of people. 3. Marketing Marketing entails the management practice identifying, anticipating and supplying customer needs in a profitably manner (Gay, Charlesworth and Esen 2007). Marketing includes many interconnected and interdependent activities. The marketing mix is the way in which the organisation attempts to mix actions productively. Manchester e-bike Inc. will focus on all the 7Ps in order to deliver quality value and to increase its competitive advantage. Marketing includes many interconnected activities. Through a marketing mix, an organisation mixes these actions productively. 3.1. Marketing Objectives According to McDonald (2002, p.101), marketing goals encompass the firm’s aspirations including increasing awareness and sales of the firm’s business. Manchester e-bikes Inc. will establish a business of providing cheap transport and promoting the health of Manchester City residents through their products. Manchester e-bikes Inc. should establish an objective to achieve growth in net profit by at least 50% annually for the upcoming five years after start-up. To accomplish its marketing objectives, Manchester e-bikes Inc. intends to develop benchmarks to measure progress. These objectives will be regularly reviewed in order to offer corrective actions in time. The major marketing objective is to understand the needs of the customers and satisfy them accordingly. The benchmarks will be determined through marketing research and Manchester e-bikes Inc. marketing information system. The Company will seek to maximise its sales and revenues all seasons round. 3.2. Value proposition E-bikes will help the users to spend less on transportation, gym and other physical activities costs. It will make the residents healthier while saving up time that they can be held up in traffic. E-bikes have a motor feature that can enable consumers to arrive at work or school fresh and not sweaty. The customer gets all the above benefits and he/she also helps in the preservation of the environment. 3.3. Marketing Mix 3.3.1. Price According to Kotler (2007), price is the cost of producing, promoting and delivering the goods charged by the organisation. This is the money paid by the customer to buy a certain good or service. It is also stated to be the cost in terms of effort and time spent. Manchester e-bikes models will not be priced too high in order not to scare the consumers; neither will they be priced too low not to induce doubt about the quality of the products. 3.3.2. Product It is a tangible good or service offered by an organisation to satisfy a want or a need. Kotler et al. (2006) defined it as something presented to the market for consideration, purchase, use, or consumption. A product is, of course, the key component of service. A consumer does not buy an item for its features alone, but he wants a solution to his need. The attributes of an organisation’s products that include quality, brand name, complexity and newness directly affect the behaviour of a consumer. 3.3.2.1. Product characteristics An electric bike (e-bike) is a bicycle with an electric motor that supports pedaling. This motor is powered by a battery. With the same amount of energy from the cyclist, an e-bike can attain a higher speed compared to a conventional bike. However, an electric bike has a higher weight than a conventional bike because of the battery weight. The competition is high because many firms are offering the same product. Therefore, the market for e-bikes is becoming crowded. However, there is no e-bike dealer/shop located in Market Street, Manchester. Bike shops are located in areas such as Castle Street, Church Street, Hilton Street, and Whittle Street among others. The ‘Sport’ model of e-bike is customisable and can fit every individual customer’s preferences. The product comes in different colors, and a customer can select the product according to his taste. According to Holt (2004, p. 59) success is achievable when brands perform identity myths that address the anxieties of the community. As long as the product can smooth these tensions, it can achieve success. In this case, tensions are environmental concerns, health concerns such as heart and lung disease, and unpredictable gas prices. The marketing strategy should, therefore, focus more on advising the customers on how the ‘Sport’ e-bike can help in addressing these tensions. The main objective of the marketing strategy will be to address the anxieties of the target customers. The marketing strategy is going to focus more on the emotional factors rather than technical factors. The selected e-bike has a catchy and easily distinguishable name, “sport”. There are many benefits that are attached to sports especially those that concern a person’s health. This product helps in reducing the health risks such as lung and heart problems. It also helps in reduction of obesity rate. The assumption will be that; a large part of consumers who will hear about this product will be roused to purchase it in order to obtain these benefits. However, e-bike can be disadvantageous in some cases because it can only carry a limited amount of weight and may not address some obese cases. Therefore, Manchester e-bikes Inc. will have to select sturdier e-bikes that have the highest weight-carrying capacity. 3.3.3. Place This is the location or distribution channel through which the service is delivered. According to Kotler and Armstrong (2006), place is a set of mutually dependent channels involved in the process of availing a product to consumers. Customers will also appreciate the convenience of ordering e-bikes at all times, 24 hours per day and seven days per week through Manchester e-bike Inc. Website. Through this website, they will be able to order e-bikes of their choice. 3.3.4. Promotion Promotion is the vehicle that is employed to get people to know more about the organisation’s product or service. Currently, the most utilized medium of promotion is online. The activities of promotion include public relations, word-of-mouth promotion, point-of-sale displays and public relations. According to Jones (2007), promotion closes the information gap between would-be buyers and would-be sellers. Promotion is a communications tool that Manchester e-bike Inc. will use to market e-bikes in the City; not only to notify customers but also to interact with them for long-term benefits. The primary purpose of the promotion will be to communicate with the customers. Currently, the most utilised medium of promotion is online. Manchester e-bike Inc. intends to utilise the online channel as its promotion strategy. There are other promotional strategies it can use since its short-term target in not far-fetched. Manchester e-bike Inc. can use print materials such as brochures and flyers that can be distributed to commuters, high school students, and college and university students. They can also be distributed to the low and middle-income earners in different organisations. Manchester e-bike Inc. can offer special discounts to the first few buyers. Advertisement can also be done on television and radios. 3.3.5. Physical Evidence The image portrayed to customers has to be evidenced by physical materials. A manual with detailed information and contact number will also accompany the product. The product will also have a sticker bearing the logo and the contact numbers. In order to enhance the physical evidence, Manchester e-bike Inc. will also design t-shirts that bear the brand’s name and logo on them. This will offer free advertising whenever the customer wears the t-shirt. 3.3.6. People Manchester e-bike Inc. must seek ways of keeping the customers’ relations intact. Therefore, the firm must allow direct and voluntary feedback from its customers. 3.3.7. Process Process is a particular technique of action or a sequence of procedures normally involving several steps that repeatedly have to take place in a diverse cycle. 4. Marketing Mix in different Context(B2B) If Manchester e-bike Inc were to engage in a B2B business, the marketing strategy would be completely different because the scenario is different from that one of a B2C business. If Manchester e-bike Inc was to engage in B2B business it would be required to make adjustments. In B2B market, customers tend to be more rational. In a B2C market, customers purchase what they want whereas in B2B market, customers tend to purchase what they need. Target Market In B2B, the target market changes from the individual customer to corporate customer. An individual customer will usually purchase one unit of e-bike whereas a corporate customer will purchase volumes of e-bikes. Manchester e-bikes will target firms that are located in areas and countries where the surrounding population’s probability to use e-bikes is high. For example, China may offer Manchester e-bikes the largest market for its products. Segmentation In B2B marketing, Manchester e-bikes Inc will have to change its strategies. Many aspects are going to change such as customer needs, demands and behaviour. Manchester Bikes will have to understand that every customer is unique. The needs of an individual customer will differ with the needs of a corporate customer. Due to tasks that are connected to marketing management, the customers should be assorted according to certain market segments. The market segmentation is very important in B2B marketing. The differentiation of products is very little in B2B marketing. Manchester Bikes Inc. is likely to segment its market according to the needs and requirements of each and every market. It will have to expand its product range to satisfy the wide market. Different corporate customers will demand different products according to the needs of their specific markets. 4.1 Plan marketing mixes for a different segment in consumer markets  i. It would be required to have high volumes of bikes than in B2B business setting. ii. B2B organisations behave differently when buying. Decisions to buy are made by a group of people and decisions are specification-driven. Therefore, Manchester e-bike Inc would have to satisfy this requirement. iii. It would be required to change its promotion strategies. For example, B2B companies avoid using mass media to promote their brands. iv. The entire marketing process for B2B business is complex compared to B2C business. Table 1 Differences between B2B and B2C Marketing Mix Differences based on characteristics B2B Marketing B2C Marketing Volume of sales is high Volume of sales is low The purchase of products is much riskier The purchase is low riskier Avoid mass media when promoting brands Use mass media to promote their brands Target Audience Enterprises End User Target Market Size Smaller Large Differences based on pricing process Unit prices are not necessary Unit prices are necessary Prices are not the same for each product Prices can be the same Differences based on consumer behaviour Consumer decision is rational Consumer decision is emotional Consumer specify what they want Consumer demand has variety Conclusion Though B2B marketing is considered to be the modern foundation of businesses, the key foundation to B2B business is B2C. Both marketing avenues have different characteristics, however, firms such as Manchester Bikes Inc can maximise its competitive advantage by employing B2C marketing to its local area and B2B marketing in its globalisation strategy. Manchester e-bike’s success in the local market will greatly contribute to the success in the global market. E-bikes business was selected because electric bicycles were found to be the ideal products in the Manchester City as well as in other global markets. They were popular with Manchester residents because of their ability to mitigate accessibility problems and reduce energy use. These issues are the success factors of Manchester e-bikes Inc. because e-bikes will reduce environmental degradation, as well as offer cheap transport options. The best approach that Manchester e-bike Inc can use is to start a B2C and expand itself to a B2C serving the global community and at the same time increasing its profitability. 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