Kwiggle Bikes: Marketing - Case Study Example

Kwiggle Bikes: Marketing Contents Contents 2 Introduction 3 Product Idea 3 Context Analysis 4 Preference s 4 Competitor Analysis 4 Macro Analysis 5 Objectives and Positioning 6 Marketing Communication Plan 6 Target Market and Positioning 7 Promotional Strategy 9 Digital Marketing 9 Public Relations 9 Advertising 9 Events and Trade Shows 10 Direct Marketing 10 Coordinated Communications Mix 10 Evaluation and Control 12 Summary 13 Introduction Marketing communication strategy is the way in which an organization successfully communicates and develops its marketing strategy. Marketing communication involves interaction between a variety of complex factors like market issues, human issues, corporate branding issues and organizational issues. Marketing communication strategies are developed with two main aims. The first one is to create brand value by communicating with the customers through methods like advertising to evoke feelings among customers, create vision and strengthen their value in the brand. The second purpose is to manipulate the behaviour of the customer in a way that they begin to behave in a particular way. The target audience is made to believe that they can be benefitted by purchasing the product in an attempt to make them purchase the product (Markwick and Fill, 1997). In order to execute an effective marketing communication strategy an organization needs to overcome multiple hurdles. It is important that the customers notice the message that the organization wants to deliver and additionally customers must understand the message completely to act accordingly. The purpose of this paper is to develop a marketing communication plan for Kwiggle Bikes by applying the marketing communications strategy plan developed by Fill. Kwiggle Bikes is planning to launch a revolutionary bike in the market that is packed with attractive features and benefits. The new bike is expected to be launched in the Eurobike exhibition in the latest year. According to Fill (2009) marketing communication plan helps in the delivering messages that can advise the customers and provide potential benefits to the stakeholders. Fill had provided a comprehensive planning framework that allows companies to adapt their marketing plans according to changes in market scenario. Product Idea Kwiggle Bike is a compact folding bike that has been designed by designed by Karstin Bettin. The bike is indeed an innovative one as it has been designed to be ridden in an erect position. The seat of the bike has the ability to rock from one side to other and the bike can be folded into a small structure. This allows the bike to be stashed even in a small suitcase as well and it weighs only around 7 kilograms. Context Analysis There are multiple facets of conducting a context analysis namely customer context, business context, internal context and external context. According to scholars context analysis can be broadly divided into internal and external factors where the company and product features constitute the internal factors and business environment and competitors can be considered as external factors. The attitude of customers is also highlighted in the context analysis to understand their decision making behaviour (Fill, 2009). Preference of Customers The bicycle industry of Europe has a long history and folding cycles is one of its major features. Europeans have often been found to cycle regularly to their workplace especially during the peak hours. The flexibility of the product has often invoked customers to use folding bicycles. U.K. for instance has been facing consistent growth of folding bicycles as consumers are preferring to use folding cycles because of the ease it eliminates the worry of finding spaces in parking lots of their destination. It has also been found that many commuters who had initially considered travelling by tube rail had switched over to using folding bikes due to their convenience (LSE, 2010). According to latest reports the sales of folding and city bikes has gone up and 248,600 units were sold in 2011. In the financial year of 2012-2013 the market share of folding bikes had increased by 9.5% (COLIPED, 2012). These figures indicate that the future prospects for Kwiggle look strong. Competitor Analysis Competitor analysis involves locating the major competitors of the company by applying both industry-based and market-based framework. There are both direct and indirect competitors for Kwiggle. According to industry estimates, the 26% cycling industry market share belongs to mobility bikes including folding bikes, 62% market share belongs to the leisure group industries and 12% belongs to the sports cycle category (COLIPED, 2012). Indirect competition of Kwiggle can come from Trekking bikes, BMX, EPAC and ATBs (COLIPED, 2012). Direct competition can come from Dahons, Brompton, Birdy and Bikerton to name a few. Dahons is the leading player in the folding bicycles industry and it had experienced robust growth in sales amounting to 32% in 2008 (The Independent, 2014). All these direct competitors provide folding compact bicycles to the customers in the market. Brompton H6L, for instance provides features similar to that of Kwiggle and it is adaptable to any weather conditions. Raleigh Stowaway 3 is another specimen that comes with gears as well as luggage racks. Carrera Transport may also provide stiff competition to Kwiggle on the basis of its low price range and the light weight features. Similarly Tern Link P9 and Airnimal White Rhino are few of the other competitors. However, the folding bike to be launched by Kwiggle is superior compared to its peers in terms of weight and design (The Independent, 2014). The engineering of the bike is extremely innovative that has allowed it to be 60% smaller than its competitor. Macro Analysis The external context can be best captured by applying the framework developed by using Porter’s competitive forces. The influence of external factors on the marketing communication plan for Kwiggle bikes can be explained in the following manner: Bargaining power of buyers: The bargaining power of the buyers is moderate for folding bicycle industry. This is primarily because it will be difficult for the buyers to find alternatives for low-weight bicycles. The bicycle has been developed after four years of hard research which allows it to be folded into a structure so small that it can even be stashed under a desk. Bargaining power of the supplier: The bargaining power of the suppliers will be moderate in case of Kwiggle bikes. This is because the raw materials required to make the bike is not very complicated and raw materials can be easily imported from countries with low labour costs to keep the manufacturing costs under control. Threat of substitutes: Threat of substitutes is relatively high in the folding bicycle industry because there are quite a few numbers of players in the folding bicycles group that produces similar products. Close substitutes of products can be purchased from Bikerton, Brompton bicycle and Birdy to name a few (The Independent, 2014). Threat of new entrants: The threat of new entrants in the folding bikes industry is considerably high because the government of Europe has taken renewed interest to pump investment in the folding bicycle industry of Europe through Bike Intermodal (European Commission, 2014). Developments in the battery and motor technologies can lure new entrants in the market. Competitive Rivalry: Competitive rivalry in the folding bicycle industry is relatively high. In the German market trekking and city capture the largest market share making it difficult for others to compete. Competition can also be faced from other top competitors in the market whose bikes collapse to a range of 150-210 litres and weighs 12-15 kilograms (European Commission, 2014). Objectives and Positioning Researchers claim that the ideal time span for the corporate level planning is about five years. In this year it can be argued that Kwiggle has used a time span of almost four years to develop the idea of the new bike. Marketing planning however requires lesser time period of two to three years. Empirical studies have proved that U.K. retailers like Russell and Bromley, CWS and Marks and Spencer have used short-term PR objectives to market products. It was difficult to measure their long-term corporate communication (Smith, et al., 1999). This paper however focuses only on the marketing communication level strategies of one year time period. Marketing Communication Plan In order to develop marketing communication plan it is helpful to use the SWOT analysis to determine the present opportunities and challenges for the Kwiggle bikes. It has been observed that the use of situation analysis, which captures both the internal and the external characteristic of the firm, is the first step to develop a communication plan. Researchers have established that use of SWOT analysis can be considered as a starting point of strategic planning as it helps an organization to access its internal strengths and weakness and external opportunities and threats and allow managers to develop strategic plans (Olson, Slater and Hult, 2005). Strength: Kwiggle bikes have been able to create a considerable amount of interest among masses by offering its unique features. The manufacturers are confident that engineering of Kwiggle is a revolutionary one and it has been able to challenge the existing market leaders by the use of patented design elements in manufacturing. Weakness: The size of the company is very small which means it may be difficult for the company to support its marketing communication strategies with the help of financial resources. Additionally market leaders can easily copy the design of Kwiggle making it difficult for the company to compete with them. Opportunities: According to the report published by European Bicycle market, Germany represents a growing market for advanced technology bicycles. Germans are particularly very sensitive to use of advanced technologies in mobility transport which will provide ample opportunity for Kwiggle in future. Use of advanced technologies to improve speed and features in the future can help in generating higher sales. Furthermore the demand for folding bikes is consistently rising as suggested by the European Cycling Industry report. Threats: At present the German market is heavily dominated by the presence of city bikes and trekking bikes. Thus market penetration of Kwiggle may be difficult initially. Additionally, folding bikes are les popular among cyclists in the cycling industry making it increasingly difficult for Kwiggle’s easy market penetration. Target Market and Positioning The market targetting of Kwiggle Bikes can be done on the basis of age, income and lifestyle of individuals. Primary target market: The primary target market comprises college and university students, schools students, professionals who commute daily to their work places and health-concerned people. The light weight of the vehicle makes it a convenient mode of transport for any person learning to ride bicycles. Secondary target market: Secondary target market primarily comprises customers who already own folding bikes but are not happy with their present product. Market researchers have established that this group can be termed as “Brand Switchers” and it is difficult to convert them into loyal customers (Bamert and Wehrli, 2005). Market positioning of Kwiggle bikes can be done by using the framework developed by Gutman (1982) known as Means-End Chain framework. Based on this framework, market positioning can be done either at a psychological level or functional level. Psychological Level: Customers can improve their social image by using the latest design folding bikes. This bike is weighs only 7.5 kilograms whereas most of its peer competitors lie in the range of 12-15 kilograms. Owning the new bikes can boost the style quotient of the new generation. Customers can also be influenced about the eco-friendly nature of the bikes. Functional Level: There are multiple features of Kwiggle that can provide benefits to customers like its light weight, small collapsible structure and medical advantages. For instance, the bike provides added medical benefits to customers in the form of doing back exercises and shoulder tension releasing exercises. It can act as a perfect mode of transit for the European roads. According to Fill (2009) goals of an organization can only be described as broad statements by which an organization can achieve its mission whereas objectives are quantifiable versions of goals and they describe specific outcomes of mission. Objectives are best described through a SMART (Specific, Measurable, Achievable, Realistic and Time Specific) framework. Researchers have pointed out that the use of both SWOT and SMART objectives makes the planning process highly transparent by providing it with a robust framework. Specific: It has been observed that mobility vehicles represent 26% of total sales. Kwiggle can be expected to achieve market penetration of 6 % by the end of the first year based on the marketing communication plan that has been developed for the company. Measurable: Two parameters will be employed to measure the objectives namely sales volume and market share. Rising sales volume and market share can be taken as a proxy to measure the progress. Achievable: Based on the external factors like rising demand for folding bikes and unique product offering of Kwiggle it can be argued that the objectives are achievable. Realistic: The objective is realistic because the company is investing 5 million in the promotional activities which is bound to create brand value for the product and significant customer interest. Time-Bound: The objectives are time bound because it is expected to be achieved within one year from Jan 2015 to Dec 2015. Promotional Strategy According to scholars marketing promotional mix can be broadly bifurcated into categories namely push strategies and pull strategies. In push strategy the manufacturers promotes the product to the wholesalers and the wholesaler in turn promotes the product to the retailers. In the final step retailers promotes the product to the consumers. Pull strategy is completely opposite in which the promotional efforts are directed to the consumers and the consumer demand sets in the process of distribution (Mohr and Nevin, 1990). This paper suggests a pull marketing promotion by investing heavily on the advertising and promotional campaign. The promotional plan of Kwiggle bikes can be divided into five broad categories. They are online and digital marketing, public relations, advertising, direct marketing and events and trade showing. Digital Marketing Digital marketing can be done with the help of three ways namely by using social media, blogs and mobile applications. Facebook, Twitter, Google+ can be used as platforms to promote the new bike and its features. Updates from the company website and value proposition of Kwiggle bikes can be broadcasted on youtube. Mobile applications for easy purchase of the bike can be launched to promote popularity. Additionally, blogs by influential bloggers and innovation leaders about the advantages of Kwiggle can enhance the popularity of the bike. Public Relations Eminent scholars have pointed out that public relations is a very powerful promotional mix as they serve the dual purpose of promotion and defence of the product along with the interaction with the customers (Kotler and Armstrong, 2005). Public relations of Kwiggle bikes can be improved by using updating press releases, special editorial columns and press kits. Advertising Above the line advertising of Kwiggle bikes will comprise TV commercials, print medium and celebrity promotion measures. Advertisement will also be done with the help of billboards and posters. The use of billboards will be done in the popular places of the city with maximum gatherings to ensure that the message is clearly visible to everyone. Posters will be used in the subways and public transit vehicles like buses to maximize the visibility. Use of radio can also be a popular medium of promoting the product and finally leading newspapers of the city will be used extensively to promote the product launch. Events and Trade Shows Trade fairs can be used to communicate the value proposition of Kwiggle to attract customers. Audio visual conferences and signage and collateral can also be used to promote Kwiggle. Trade shows can be excellent platforms for showcasing products as they are frequented by both buyers and merchants. Direct Marketing Direct marketing of the product can be done through customer surveys and online mail programs. Interacting directly with the customers in the form of communicating about the product features and price and benefits offered can help in establishing a sustainable customer base for the company. Coordinated Communications Mix Evaluation and Control Evaluation of marketing plans is extremely important to ensure that the desired goals set at the beginning are met. Monitoring activities can be considered as a type of evaluation schedule which helps in verification of the action plans. It also helps in ensuring that the marketing strategies are met in terms of sales and profit figures. In case of Kwiggle bikes the following evaluation and control strategies can be implemented. Return on Investment: According to Richter (2012) return on investment is one of the easiest measures to track business targets. This can be easily estimated by calculating the amount of investment made in the campaigning efforts and the profits earned from them. Breakdown of components of various expenditure components and calculating returns from them by the end of stipulated time period is done to measure the return on investment. Analysis of Sales Figure: Periodical analysis of sales figures say monthly or quarterly or half-yearly will help to keep track of the upward or downward trend of organizational sales. If there is little or no deviation from the forecasted sales figures then it implies that the plan is advancing according to anticipation. However, if there is deviation between the forecasted sales and actual sales by more than 25% then promotional activities may have to be modified to improve sales. Market expense to sales ratio: Researchers have claimed that there are five components of measuring the market to sales ratio namely size of sales force to sales, ratio of sales promotion to actual sales, sales administration to sales, research in marketing to sales and cost of advertising to sales (Richter, 2012). Close monitoring of these ratios can help in monitoring the effectiveness of marketing communication goals. Market Share analysis: The following formula can be used by the company to study the market share analysis (Richter, T., 2012): Total market share = customer penetration x customer loyalty x customer selectivity x price selectivity Continuous monitoring of the market share can help in realizing whether the set objective of 6% can be achieved or not. Customer Feedback: Direct interaction with the customers based on social media and blogging sites, conducting online customer survey and obtaining feedback from walk-in-customers can act as a qualitative measure of receiving feedback and modifying product for further customer satisfaction. Summary This paper attempted to prepare the marketing communication budget of Kwiggle bikes. The total investment made was of £5million. Based on the present market scenario it is suggested that Kwiggle mainly relies on the pull marketing strategies to convey its message to customers. The details of the marketing budget have been provided in the previous section. It can be expected that maximum return to investment can be obtained by following the marketing communication activities that has been devised for Kwiggle. Evaluation strategies like Return on Investment, Analysis of sales figure, market expense to sales ratio, market share analysis and customer feedback has also been discussed to measure any possible fluctuation from the desired scenario. Reference List Bamert, T. and Wehrli, H. P., 2005. Service quality as an important dimension of brand equity in Swiss services industries. Managing Service Quality, 15(2), pp. 132-41. COLIPED, 2012. European bicycle market. Industry & market profile. [pdf] COLBI. Available at: < http://www.coliped.com/docs/issuu/European%20Bicycle%20Market%20&%20Industry%20Profile%20-%20Edition%202012.pdf > [Accessed 29 August 2014]. European Commission, 2014. Giving folding bikes the push they need. 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