Marketing Communication Strategy: Kwiggle Bikes - Case Study Example

CASE STUDY – KWIGGLE BIKES Marketing Communications plan Introduction The German bike maker Kwiggle Bike GmbH run by KarstinBettin has designed very compact and functional multi-purpose folding bike, suitable for people of different ages and different constitutions. The company has made a strategic decision to launch this bike in the UK market. However, excellent physical characteristics of the bike are not enough for the project to be successful. It requires a through and critical analysis of the cycling industry and segment in the UK, accompanied with effective marketing communications plan. The aim of this report is to develop marketing communications plan for newly developed product Kwiggle Bike for a launch in 2015 in the UK market. In order to develop effective marketing communications plan for 12 month period from January to December 2015 the Kwiggle Bike GmbH has budgeted £5million. For justifying the value proposition of marketing communication plan and ensuring the maximum return for the Kwiggle Bike GmbH investment in new product, there will be used the Fill framework accompanied with the analysis of the UK’s market and industry trend analysis. 2. Marketing Communication Planning Framework In order to develop effective marketing communication plan for launching Kwiggle®Bike in the UK market in 2015 there was used the Fill Framework. Visual illustration of this framework is given below, followed by more detailed overview of each component of the marketing communication planning framework with reference to the Kwiggle®Bike case. Figure1: The marketing communications planning framework (Source: Fill 2013, 161). 2.1. The Context Analysis Context analysis is one of the basic elements of the Fill framework, which is aimed to help managers to identify and analyze the key communication drivers that are significant for the specific company or product. Context analysis is comprised of three major elements, such as: external, internal and market environments (Fill 2013). Analysis of both internal and external factors is crucial for developing effective marketing communication plan as it helps to identify the opportunities and potential challenges. In case of the Kwiggle®Bike, context analysis will cover only three major areas: product analysis (internal influences), competitor analysis and segment analysis (market influences). 2.1.1. Product Analysis The German bike maker Kwiggle Bike GmbH run by KarstinBettin has designed “the most compact folded bike in the world” (Kwiggle-bike.de, 2014, n.p.). The weight of the bike is 7 kg and its size it 60% smaller than the size of the bike of the closest competitor. Despite its small sizes and weight, the bike is designed to support a rider who weights up to 100kg. Another unique selling point of this vehicle is its capability to fit the specifications for the airline hand luggage. The Kwiggle®Bike has 4, 5-7,5 meters of development and can be folded in less than 10 seconds (Kwiggle-bike.de, 2014).Therefore, this is especially attractive feature for active people who like travelling. One more feature of the Kwiggle Bike, which differentiates it from the competitors, is the seating of the bike. The design of the seating encourages an upright position for the rider due to its flexibility and wiggling capability. Thus, the bike enables the rider to reduce the tension in the neck and shoulder area, and supports the mobility of back, which makes the bike suitable for back exercises and outdoor fitness (Kwiggle-bike.de, 2014). As it is summarized on the website of the company: “Kwiggle®Bike is the only bicycle in the world featuring the unique combination of drivability, compactness and weight” (Kwiggle-bike.de, 2014, n.d.). Kwiggle®Bike is positioned on the company’s website “as one bike suitable for all” due to its adjustable seat device. Due to the characteristics of the Kwiggle®Bike which enable everybody to use this vehicle, the marketing communication plan should target a broad audience of potential users. Unfortunately, the price for the Kwiggle®Bike is not known, and lack of this information will impose limitations on the current report and marketing communication planning process. 2.1.2. Competitor Analysis Fill (2013) explains that there are several groups of market influences, which have significant influence on marketing communications, including: competitors, intermediaries, marketing research agencies and media houses, customers and network stakeholders. In case of the Kwiggle®Bike, the focus is made on competitor analysis and analysis of the biking segment in the UK. While planning to enter the UK market, it is crucial to understand the existing competition in the segment of folded bikes. There are many different models of the folded bikes that already have gained their popularity among the UK customers. Below is provided a comparative table of several key models of the folded bikes with the brief overview of the promotion activities used by each company. Model Special features Price Promotion activities Brompton H6L -The H-type handlebars; -Mudguards – for different weather types; -Six gears- for most terrains £995 Eurobike Show Interbike Outdoor Demo Interbike Expo NYCeWheels (Brompton Bicycle, 2014) Raleigh Stowaway 3 -ideal for taking on holiday or commuting; -highly affordable; - simple and effective gears; -decent luggage back; -easy-to-use folding mechanism £300 Amazon.com; E-bay Youtube.com; Team Raleigh races in different locations; Raleigh demo events (Raleigh.co.uk, 2014) Dahon Jifo -folded and unfolded in a matter of seconds -lightweight and compact -not for long distances £599,99 YouTube channel Cycling Magazine Cycling Plus Magazine Equinox Magazine The Wall Street Journal (ITMS GmbH, 2014) Carrera Transport -relatively low price; -lightweight for an easy and fast ride; -suitable for all types of terrains due to 8-speed gearing system £299 Auto Express Youtube, Facebook, PinInterest, Google+ (Halfords.com, 2014) Tern Link P9 -durable components; -balance between price and quality; -highly responsive brakes (Hilpern 2013) £550 Evans Cycles NYCeWheels YouTube (YouTube 2014) Table 1: Competitor’s overview – folded bikes 2.1.3. Segment Analysis UK’s cycling industry has demonstrated significant growth over the past few years. Thus, for example, in 2010 there were sold 3,7m bikes across the UK (28 per cent increase in volume of cycle sales), and the number of people cycling daily has increased up to 22,000 (Gross Cycling Report 2011). According to the Gross Cycling Report (2011), the UK’s market involves approximately 13m adult cyclists, which represent 27% of the overall UK’s population. The UK cycling market can be segmented based on gender, age, and lifestyle characteristics. Nowadays, men dominate cycling industry in UK, generating over 70% of all bicycle trips (Gross Cycling Report 2011). Cycling segments In addition to the basic characteristics such as gender and age, the UK’s cycling population can be sub-segmented based on the number of trips made per year. There are three major categories based on the frequency of cycling trips: 1) Frequent cyclists: cycling once per week or more 2) Occasional cyclists: infrequent cycling; 3) Regular cyclists: cycling 12 or more times/year (Gross Cycling Report 2011). The UK’s cycling population can be sub-segmented based on the number of trips made per year. Thus, for example: regular cyclists comprise about 33% (approximately 4, 3 m); occasional cyclists comprise about 41% (approximately 5, 4m), and frequent cyclists comprise about 26% (approximately 3, 5 m) (Gross Cycling Report 2011). The graphical illustration of this segmentation is presented in Figure 2. Figure 2. Segmentation of cyclists in the UK market Another way of segmenting cycling population is based on the lifestyles of the users. There are identified four major categories, including: Family – parents with children cycling together Recreational users – cycling for sightseeing, exercising, and enjoyment Commuters – cycling as alternative mode of transport Enthusiasts – cycle for sport or passion (Gross Cycling Report 2011) The proportion of the UK’s population based on the above described sub-segmentation is presented in cross-table below. Sub-Segment Occasional Cyclist Regular Cyclist Frequent Cyclist Family 30% 15% 2% Recreational User 70% 37% 5% Commuter - 40% 43% Enthusiast - 8% 50% Table 2: Sub-Segmentation of the UK’s cycling population (Source: Gross Cycling Report 2011). While the Kwiggle®Bike is positioned by the company as “one bike for all” and therefore, everyone in the above listed segments should be targeted during the development of the marketing communication plan, it is important to note that commuters tend to invest more in folding bicycles comparing to other categories of cyclists (Gross Cycling Report 2011). 2.2. Promotional Goals & Positioning Marketing Communication has for key tasks, which help companies to achieve their corporate goals. One of the key tasks is to inform and make potential customers aware about the company’s products or services offered (Fill 2013). The second task of the marketing communication is to persuade both current and potential customers for buying/using certain product/service. The third task is to reinforce customer’s experiences about specific product/service or brand. Finally, the fourth task of the marketing communications is to differentiate the product/service in the markets where there is little to separate competing products and brands (Fill 2013, 14). In case of the Kwiggle Bike, the first, the second and the fourth tasks of the marketing communication can be applied, as the product is absolutely new on the UK market, and there is no customers’ experience yet. Therefore, the objectives of the marketing communication plan for Kwiggle Bike can be formulated in the following way: Objective 1: to inform and make potential customers aware about the Kwiggle Bike, its availability and unique characteristics; Objective 2: to encourage potential customers for further positive purchase related behavior towards the Kwiggle Bike; Objective 3: to differentiate the Kwiggle Bike from other folding bikes available on the market (Fill 2013) In addition to defining promotion/marketing objectives, Fill (1999, 510) suggests that they should be formulated in a SMART way, which means that the objectives should be: Specific, Measurable, Achievable, Realistic and Targeted & Timed. Objective Specific Measurable Achievable Realistic Targeted & Timed #1 (% of the market share) 01.01.2015- 31.12.2015 #2 Sales revenues Volumes/ROI Sales/sales enquiries 01.01.2015- 31.12.2015 #3 Surveys 01.01.2015- 31.12.2015 Table 3. SMART goals for Kwiggle®Bike 2.3. Promotional Strategy or Marketing Communication Strategy Promotional strategy for the Kwiggle Bike is developed based on the market research provided in the Context analysis section of the report. The company is planning to invest £5million to the marketing communication activities aimed to promote the Kwiggle Bike for the most effective launch of the product in 2015 in the UK market. Fill framework implies three major promotional strategies, including: pull, push, and profile (Fill 2013), whereas: Pull strategies focus on influencing end-user consumers (b2b and consumers); Push strategies focus on influencing marketing channel buyers; Profile strategies focus on influencing a wide range of shareholders, which vary from customers to government bodies (Fill 2013, 151). 2.4. Coordinated communications mix In case of the Kwiggle Bike the focus will be made on push and pull strategies, as both they are more fitting to the goals set by the company. Based on the promotional objectives and context analysis the following methods of marketing communication were chosen: Public Relations Direct Advertising Events and Exhibitions Digital Marketing Public Relations Public Relations practice will enable the company to establish and maintain understanding between the organization and its target audience and broader public. Stakeholder audience for the public relations efforts will be potential customers of the Kwiggle Bike. As it has been already discussed in the customer segmentation analysis section, the company should target several different segments with different needs. Therefore, the sources for PR activities also should be chosen with a consideration of the segment analysis results. Among various PR frameworks available, the framework of the press agentry/publicity model is considered to be the most appropriate for the Kwiggle Bike case. As Fill explains, “The essence of this approach is that communication is used as a form of propaganda. That is, the communication flow is essentially one-way, and the content is not bound to be strictly truthful as the objective is to convince the receiver of a new idea or offering” (2013, 449). As the competitors’ analysis has shown, the UK’s market is already filled with light and compact folding bikes. Therefore, the focus should be made also on the other aspects and unique characteristics of the bike. The PR activity should aggressively target segment of commuters. Thus, there was adjusted a PR plan comprised of the following methods: press releases, interviews, publicity and events. Direct Advertising Direct advertising methods will include: print advertisement, inserts, outdoor advertising. Print advertisement will enable the company to emphasize the growing popularity of folding bikes in the UK and to increase awareness about the Kwiggle Bike among the potential customers. The advertisement will be given in both industry specific magazines and journals, such as: Cycling Magazine, Cycling Plus Magazine, Equinox Magazine, Auto Express and in popular magazines and journals read by general public (The Wall Street Journal and some others). Inserts also will be placed in the journals and newspapers, which are read by a broad category of readers. The method of print advertising is mainly targeting the commuters’ segment –workers who might consider folding bike as an appropriate alternative to other vehicles. Outdoor advertisement will attract both potential and current users and will increase awareness about the Kwiggle Bike among the UK’s citizens. Events, Exhibitions, and Sponsorship It is critical to participate in various cycling events and exhibitions that will take place in the UK during January-December 2015. The key events, such as: The London Bike Sow (12-15 Feb, 2015) (Thelondonbikeshow.co.uk, 2014). Participation in such type of events will enable the company to establish relationships with potential trading partners and develop b2b format of business. Also, potential customers will have a chance to see the vehicle and to test it which is much more effective way of advertisement. The company may consider some sponsorship opportunities, which will definitely increase the recognition of the brand and loyalty of the customers (Smith & Zook, 2011). Sponsorship activity will help the company to achieve its objectives, namely: to increase awareness; improve relationships with many different publics; increase sales; build database; create a platform for new promotional material, etc. (Smith & Zook, 2011, 349). Internet Marketing Presence online is a vital element of the marketing communication plan practically for every business, as the modern society literally “lives” in online environment. It is critical to establish and to maintain online presence in key social networks such as Facebook, PinInterest, Twitter, and Youtube (Smith & Zook, 2011). Usage of the Youtube channel will enable the company to demonstrate all the unique features of the Kwiggle Bike to a broad audience and to achieve the objective #3 – to differentiate the product from the competitors. Also, it would be useful to take active participation on thematic forums and other online platforms where cycling and folded bikes are discussed. Marketing Communication Budget for the Kwiggle Bike will be allocated in the following way: 2.5. Scheduling and Resources Resources’ planning is an integral part of the marketing communication planning process as it enables the management to evaluate the resources necessary for the implementation of the plan (Fill 2013). Fill (2013) stresses that these resources are referred not only to the financial resources allocated for the given project, but also to the time and human resources. Scheduling element implies the deployment of the marketing communication methods and the media (Fill 2013). The detailed scheduling of marketing communication activities is presented in Appendix. 2.6. Evaluation & Control Evaluation and Control is the final element of the Fill framework, however it does not imply marketing communication activities and therefore is not covered in this report (Fill 2013). However, this element is crucial for evaluating the effectiveness of the overall marketing communication plan and each separate marketing communication activity. Evaluation and controlling stage should be carefully planned as it provides business owners with the information, which could be used for development of further campaigns. In the case of the Kwiggle Bike, there were three major marketing communication objectives, including the following: to inform and make potential customers aware about the Kwiggle Bike, its availability and unique characteristics; to encourage potential customers for further positive purchase related behavior towards the Kwiggle Bike; to differentiate the Kwiggle Bike from other folding bikes available on the market (Fill 2013). In order to evaluate and control the extent to which these objectives have been achieved, it is necessary to set clear and measurable sales-related targets, listed before (for example: market share %, sales revenues, ROI, volumes, profitability). At this stage it is impossible to identify those targets as financial information of the company is not available at this stage. Conclusion The aim of this report was to develop marketing communications plan for newly developed product Kwiggle Bike for a launch in 2015 in the UK market. For justifying the value proposition of marketing communication plan and ensuring the maximum return for the Kwiggle Bike GmbH investment in new product, there was used the Fill framework accompanied with the analysis of the UK’s market and industry trend analysis. External analysis has shown the UK’s cycling market has a significant potential for growth despite the fierce competition in the segment of the folded bikes. In order to succeed with the launch of the Kwiggle Bike there was developed a marketing communication plan, comprised of the usage of the following methods: PR, direct advertisement, events & exhibitions, and digital marketing. Combination of this marketing mix will enable the company to communicate the information and unique selling points of the Kwiggle Bike to different segments of the target audience, varying from families and recreational users to commuters and enthusiasts. Increased awareness and recognition of the brand generated with the help of the marketing communication tools will lead to increase sales of the Kwiggle Bike. Recommendations In addition to the recommendations given in the previous sections related specifically to the marketing communication plan there are some recommendations, which the company’s management should take into consideration. Having carried out the review of the current company’s website it is highly recommended to make the website more user-friendly and add more information about the company. Also, it is recommended to add price information on the Kwiggle Bike and enable potential customer to make online purchases. While implementing marketing communication plan it is recommended to track the results of each marketing communication activity. For this purpose, management of the company should set specific and measurable goals, and then to compare actual versus planned results. In case of necessity, some marketing communication channels could be adjusted to the changes of market demand. References Brompton Bicycle, 2014. ‘Brompton Bicycle | Folding bikes, folding bicycles from Brompton Bicycle. [online]. Available at: http://brompton.com/ Fill, C. 1999. ‘Marketing Communications: context, contents and strategies. 2nd Edition. Prentice Hall Europe. Fill, C. 2013, ‘Marketing communications: brands, experiences, and participation’. 6th Ediiton. Pearson Education Ltd. Gross Cycling Report, 2011. ‘The British Cycling Economy’. [online] Available at: https://corporate.sky.com/documents/pdf/press_releases/2011/the_british_cycling_economy Hilpern, K. 2013, ‘The 10 Best folding bikes’. [online] The Independent. Available at: http://www.independent.co.uk/life-style/the-10-best-folding-bikes-8683766.html ITMS GmbH, 2014, DAHON Bikes: 2000-Present. [online] Dahon.com. Available at: http://dahon.com/mainnav/archives-media-clippings/2000-present.html Kwiggle-bike.de, 2014. Kwiggle Bikes. [online] Available at: http://www.kwiggle-bike.de/dasbike_en.html Raleigh.co.uk, 2014. Raleigh News. [online] Available at: http://www.raleigh.co.uk/EventsCalendar/ Smith, P., & Zook, Z. 2011. Marketing communications (1st ed.). London: Kogan Page. Thelondonbikeshow.co.uk, 2014. The London Bike Show. [online] Available at: http://www.thelondonbikeshow.co.uk YouTube, 2014. Tern Link P9 Folding Bike Review. [online] Available at: https://www.youtube.com/watch?v=A3DwLVAaYz4 Jan15 Feb15 March15 Apr15 May15 June15 July15 Aug15 Sept15 Oct15 Nov15 Dec15 Public Relations                           Press Releases 5000 10000 10000 10000 15000 15000 15000 15000 15000 12000 11000 10000 143000 Interviews 2000 2000 4000 4000 4000 4000 4000 4000 3000 2000 2000 2000 37000 Publicity and events 4000 6000 10000 30000 40000 40000 40000 40000 30000 30000 30000 20000 320000 TOTAL                         500000 Direct Advertisement Print Ads 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 480000 Inserts 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 240000 Outdoor Ads 70000 70000 70000 70000 70000 70000 70000 70000 70000 70000 70000 70000 720000 TOTAL                         1440000 Events & Exhibitions 100000 200000 300000 350000 400000 400000 200000 20000 200000 100000 100000 100000 2470000 TOTAL                         2470000 Digital Marketing 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 120000 Website Development 40000 40000 10000 5000 5000 5000 5000 5000 15000 5000 5000 5000 145000 Hosting 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000 Google Ads 5000 5000 8000 8000 8000 8000 8000 5000 5000 5000 5000 5000 75000 Search Engine Optim. 2000 2000 3000 3000 3000 3000 3000 3000 3000 2000 2000 2000 31000 Blogs/Forums 1000 1000 1500 1500 1500 1250 1000 1000 1000 750 750 750 13000 Social Media 7000 7000 8000 8000 8000 8000 7000 7000 5000 5000 5000 5000 80000 TOTAL                         500000 TOTAL EXPENSES                         4910000 Read More