YikeBike Products - Report Example

YIKEBIKE REPORT School Executive Summary This report was commissioned to propose a promotionalplan during five months to increase Awareness, preference and purchases of YikeBike products which include three different models, and are fully customisable in colour, within Melbourne. Currently there are two similar products which can compete with the YikeBike; the GoCycle and Segway. The most important opportunity for YikeBike is its strategic location of its headquater in New Zealand compared to competitor’s headquarters location in UK for both GoCycle’s and US for Segway. According to the research, data shows the number of Victorians cycling per day increased by 32% from 1985/86 to 2011. Victorias population increased by 38% from 1986 to 2011 (4,019,478 to 5,547,527).The market is a consumer market; it is characterised with household consumption without motivation to make a profit. Demand is a Diffused Demand which means that Product differentiation is more costly and more difficult to communicate. As a result Segmentation Approach would be a suitable Target Market Approach aimed at designing a marketing mix that is more precise to the needs of individuals in the selected market segment. Concentration strategy was chosen for segmentation approach in which the YikeBike company directs its marketing efforts towards a single market segment through one marketing mix Niche market is recognised as a best solution for this situation. This strategy allows the company to specialise in a certain area and to compete with larger companies. Efficiency enables the company to attract a large portion of one section while controlling costs. Therefore, YikeBike can design a promotional message that communicates the benefits desired by a single specific segment. The report evaluates this range and concludes that it would be an ideal candidate to have two types of target markets and set SMART objects for each specific target in matter of conative, affective and cognitive. By considering SWOT analysis in one hand and objectives in the other hand five specific strategies proposed to achieve the mentioned objects. The budget consider for the promotional plan period including unforeseen is $30,000. Introduction This is a promotional plan spanning over six months to increase profits of Yikebike limited. Yikebike is a small company that originated in Christchurch New Zealand, it offers a folding electric bike with a radical new steering system. Yikebike was founded in mid-2009 by Grant Ryan and was designed by a team in New Zealand over a period of 5 years. It currently holds the world record for both, smallest and lightest electric folding bike weighing in at only 11.2 kilograms, and able to fit in to a carry bag once completely folded. We plan to import Yikebike in to Melbourne, Victoria, the reason for this is that one of its biggest competitors (Segway) is not street legal in Melbourne due to safety and power regulations. Our potential customers could be cyclists, motorcyclists, people who do not enjoy or cannot afford public transport, people who like to ride a bike but do not like to pedal, and even potentially police officers. Purpose of the plan The purpose of the plan is increasing the sale of Yikebike products during the six month promotional period which will start from the 1st of September 2014 and will finish on the 28th of February 2014. Scope Scope of the plan will be limited to: 1. Melbourne city 2. Victoria state which has 35.8% of related business of the Australia located there Methodology 1. Prepared template of marketing plan including both suitable questions based on 6W+1H (What, When, Where, Which, Who, Why and How) question. 2. Provided secondary and primary data by conducting research, recording qualitative and quantitative data about issues relating to marketing products and services 3. Analysed situation including Market Analysis, Environmental Analysis ,Company / Product Analysis, Customer Analysis, Competitor Analysis and SWOT Analysis by considering demographic, Political and Legal, Suppliers and Social/Cultural analysis and implementing the marketing mix concept, which is consist of: Place, Price, Product, Promotion, People 4. Used SWOT analysis to analyse market trends, growth, market size, market share, market competition 5. Determined market target 6. Defined market objectives 7. Purposed market strategy & also investigating the possibility of collaboration 8. Calculated budget by considering market’s norm Limitations Lack of official data and information about the customer demographics Lack of data regarding competitors Market Analysis In the past five years, cycling has undergone a boom in popularity across various demographics. Commuters have gradually moved towards cycling. Growth in popularity is not exclusive to the weekday commute, with consumers also increasingly taking up cycling for weekend recreation. Overall, the Bicycle Retailing and Repair industry in Australia is estimated to be worth $924.9 million in 2013-14 following compound annual growth of 3.7% over the past five years. Continued strong growth of 4.2% is forecast for the current year. Environmental Analysis Macro and Micro Economics effects on the industry and predictions Unemployment, layoffs, recession, high interest rates, economic fluctuations and technological changes. The economic and global business environment show that cycling is expected to grow . This is because cycling is cheap and affordable to most people. The recent global financial decline left many people with few finances and many are taking into cycling as a means of transport. SWOT Analysis Strengths Product: Smaller than others, more continent, lighter, best fold time, Portability is much better than others, built in lights Price: Cheaper than Segway 41% Promotion: YouTube channel; YikeBike benefits YouTube channel to demonstrate its strength and feature and functionality as a main communication channel. Place: Unique place; New Zealand the closest country to Australia while GoCycle headquarter located at YK and Segway is in US Weaknesses Product: the lowest range; the maximum range that Yike Bike can go is 28 Km while Segway can go 40km and Go Cycle can go 64km Price: More expensive than GoCycle 265$ Promotion: Nothing Place: There is no official agent in Victoria state and the only distribution channel is locate in NSW Opportunities Products: Illegal and dangerous use of Segway on public roads and footpaths is an opportunity for Yike-Bike to advertise, Promote and sell its product by lack of one of its competitors. At present, anyone riding a Segway in a public place could be fined $115 for driving an unregistered vehicle. Promotional activities: There are three major cycling events in Melbourne which are the best place to advertise and promote the Yike Bike there. Place: Cycling in Melbourne, Victoria is common for recreation, commuting and sport. The city has an extensive network of off-road bicycle paths, as well as designated bicycle lanes on many streets. There is an active cycling culture enhanced by a relatively flat topography, and a generally mild climate. Threats Product: Toyota is testing a new personal commuter vehicle that it hopes will revolutionize the way people get around. If successful this could increase competition. Place: Go-Cycle has a strong dealer in heart of Melbourne (Carlton Street) Target market for the new product. Target one Target market one is males and females between the ages of 18- 35, they don’t live more than 20km from Melbourne CBD, and are employees within the central business district. They earn more than $50,000 per year and enjoy cycling and other methods of economical personal transport. They also have a concern for the environment and have a desire to reduce their carbon footprint while traveling to and from work. There 25000 cyclists in Victoria by considering descriptors of bases that is set the amount of target would be 10000. Target two Target market Two are males and females between the ages of 36- 50, they live up to 50km from Melbourne CBD and are employees throughout the Greater Melbourne area. They earn more than $70,000 per year and will use the YikeBike for more recreational purposes. They enjoy cycling, and also share a concern for the environment. There 25000 cyclists in Victoria by considering descriptors of bases that is set the amount of target would be 5000. New product strategy of the company for the national market Illegal and dangerous use of Segway on public roads and footpaths is an opportunity for Yike-Bike to advertise, Promote and sell its product by lack of one of its competitors. At present, anyone riding a Segway in a public place could be fined $115 for driving an unregistered vehicle. There are three major cycling events in Melbourne which are the best place to advertise and promote the Yike Bike there. They are Around the Bay in a Day, Melbourne Cycling Festival and Ride to Work Day. Cycling in Melbourne, Victoria is common for recreation, commuting and sport. The city has an extensive network of off-road bicycle paths, as well as designated bicycle lanes on many streets. There is an active cycling culture enhanced by a relatively flat topography, and a generally mild climate. Placement and distribution of your new product in the national market Quantity: we will import 500 units of stock in to Australia, via a cargo ship. Storage: in order to store our stock we would have to hire a 550m2 which would cost approximately $75,000 per annum. Distribution channel: our main distribution channel would be a store in the Melbourne CBD, the reason we chose a store as our main point of distribution is, a majority of our products will be primarily used in the CBD, and also selling online would render importing the product mute. Services Offered Free shipping: For online orders we deliver the YikeBike to your door, the Air Freight (DAP) is fully cleared by customs and only requires your payment of the local Duty and VAT before your dreams are fulfilled. Free accessories: The additional accessories included in the package are there to ensure you continue to protect and covet your YikeBike. These include Carry bag, Custom stand, Fast charger and Shoulder strap. Warranty: all YikeBike’s come with a standard one year warranty Free colour choice:Colour your YikeBike to really stand out in the crowd. From stealth black to vibrant orange, pick the colour that suits your style.  Repairs: if any damages occur to the product, YikeBike Ltd will repair it for a cost. Promotional strategy for the new product in the national market According to external factors (Opportunity and threats) which mentioned in the SWOT analysis before and considering seriousness of impact and the probability of occurrence following objectives designed to deal with mentioned situations. Furthermore to improve the attainability and reality of the objectives internal factors which are weaknesses and strength has been concerned for each target market. Target market one Objective one Increase awareness of target market one from 100 people to 200 people during the promotional plan period. (4 times) Objective two Increase liking of the products from 50 to 100 people amongst target market one (2 times). Target market two Objective three Increase sales of YikeBikes among target market two from 5% to 10% (250 to 500 people) Proposed Marketing Strategy Strategy one for objective one Sponsorship of the three major cycling events in Melbourne during the promotional period is been considered as a marketing strategy. This will cost approximately $500 for each event. Strategy two for objective two Conducting free trial events at federation square during the promotional period using five YikeBikes including Carbon, Fusion, and Synergy bikes, and distributing 10% discount coupons for customers who have had a trial on the bikes. Strategy three for objective three: Identifying five major bike retailers within Melbourne who would be willing to enter into a six month partnership contract and have 50% of the profits and be given two YikeBikes each as a trial. In return it would provide us with an established customer base and a good reputation for our product. Retail market for the new product in the national market The Australian population grew by 58% between 1986 and 2006 and the daily average number of bicycle trips grew by only 21%, representing a net decline in cycling.Two national surveys of cycling in Australia were examined. The earlier survey was The Day to Day Travel in Australia 1985-86 (CR69) survey, which examined travel modes among Australians aged nine years and above. The 1985/86 survey results are the earliest known detailed national count of bicycle use. The CR69 survey was a geographically stratified, random sample of households throughout Australia. For a randomly chosen day in the year-long survey period, details of all trips made by all members of the selected household were collected by a self-completed, mail questionnaire. It was conducted by data analysts INSTAT Australia Pty Ltd for the Australian Federal Office of Road Safety and produced a final dataset of 145,000 trips by 45,000 people from 18,000 households. Data for 2011 are from the 2011 Australian Cycling Participation survey which was conducted in March and April 2011 and is the official baseline data source for the Australian Government’s National Cycling Strategy 2011-2016. The 2011 survey was by telephone and contains details of trips by 24,858 people of all ages from 9,661 households across Australia. The average daily trips by bicycle were estimated, to compare with the earlier national survey.Total population levels for Australia and for each state and territory from the Australian Bureau of Statistics population Census data for the years 1986 and 2006 were examined. The Australian population aged nine years and over grew by 58.4% between 1986 and 2006 and the daily average number of bicycle trips grew by only 20.9%, representing a net decline in cycling. These results are conservative. The data from 1985 were standardized to the smaller census population of 1981, and the 2011 survey reported the highest levels of participation in any Australian survey of cycling participation. Other data support the conclusion that there is no national increase in cycling participation. The proportion of Australian workers riding a bicycle to work from 1986 to 2006 (measured every five years in the Census) has been largely unchanged at about 1% of journeys. It is important to note that there has been an increase in the absolute number of Australians cycling. Observations of more people cycling and increases in the number of bicycles sold are correct. The need for more bicycle lanes and paths is still a priority to cater for the increased number of people cycling. However, compared to 1985/86, if there was the same rate of bicycle trips as in 1985/86, there would be between a half a million to a million more people cycling today Conclusion It was found out that the most important opportunity for YikeBike is the headquarters located in New Zealand. The research draws attention to the fact that the population of cyclists is increasing in Melbourne, according to the research, data shows the number of Victorians cycling per day increased by 32% from 1985/86 to 2011. Victorias population increased by 38% from 1986 to 2011 (4,019,478 to 5,547,527). The consumer market present Yikebike with a perfect market to make maximum sales. Demand patterns are a Diffused Demand which means that Product differentiation is more costly and more difficult to communicate. The report evaluates this range and concludes that it would be an ideal candidate to have two types of target markets and set SMART objects for each specific target market. 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