Market, Product Category and Competitors - Bicycle HQ Carnegie - Case Study Example

Name Institution Professor Date Business Analysis of Bike Retailer: Bicycle-hq Carnegie For any retail business, strategizing on all its operations is always the key thing. The retail strategy should always be tied to the needs of the customer and to the general business strategies. The relationship created between the customer and the business should always be a long-term one to ensure that trust also lasts (Lee, 2012). The managers of such retailing business should as well resolve to marketing intelligence in a bid to fully and successfully implement the plans of the business and account for the organizational values of the business (Lee, 2012). The information got from a marketing intelligence helps the company to develop a competitive advantage in the market. Bicycle retail business is an example of a challenging kind of retail business. In Melbourne Australia, it has really grown because most commuters use bicycles in the city. The retail businesses do have a challenge in ensuring that the marketing strategies they have employed are profit-oriented. This would be followed by providing attractive offers on different range of products to ensure that customers are well taken care of. Migration of customers to other retailers is the greatest worry for such businesses. Therefore, strategies are also needed to help compete with their rivals. The retail businesses also need better pricing, distribution and promotional mix strategies. This paper is out to give an analysis of a bike retail business in Melbourne Australia. The focus is the Bicycle-hq Carnegie retail shop, which deals in the sales of bicycles and accessories. The analysis will include the marketing strategies, market description, pricing strategies, distribution strategies, offers and promotional mix of the retail shop. A Description of the Market, Product Category and Competitors Bicycle HQ Carnegie is one of the largest bicycle retailers in Melbourne. The shop stocks a wide range of Bikes that enables bicycle users in Melbourne to have a wide choice. The bicycles stocked at this shop are those that take care of all the paths, tracks and trails in the city. The major products they offer are bicycles and accessories at retail prices. The brands are such like Giant Anthem, Giant Trance, Giant Yukon, Giant Boulder and GT Avalanche mountain bikes and a limited range of Mongoose mountain bikes. The bikes are available at their shops in small or large sizes while others are full sizes. The major characteristic that gives the customer hope of getting a desired product is their deal in pushbikes. In terms of its market areas, the Bicycle HQ Carnegie is a new in this area of retail business. With its products and offers, the bicycle shop serves the eastern suburbs of Melbourne. This has been its major segment for its sales since the year 2009 when it was formed. This kind of wide market has been because of its close tie with a 25-year-old sister branch known as Ivanhoe Cycles. Bicycle HQ, deals in major brands that are majorly road bikes, racing bikes, kids bikes, mountain bikes, dual suspension mountain bikes, hybrid bikes, ladies bicycles, classic looking retro style bicycles, comfort bikes and commuter bikes. These are accompanied by a comprehensive range of parts and accessories along with cycle clothing, shoes and helmet. They have the ability to customize their products to fit customer needs. Some of the competitors of Bicycle HQ are like Port Melbourne Cycles, Melbourne bicycle centre and Jones cycles. The kind of bicycles offered by Bicycle-hq are those that provide comfort, speed or off-road adventure (White Pages para 1). For customers that need such, it will be an advantage to them. The company thus gives advice to customers on what they need in terms of models and sizes. In addition to these products and services, the Bicycle-hq workshop is operated by experienced competent staff who are able to service and repair bicycles and fit accessories or customize the bikes (White Pages para 3). The shops opens 7 days in the whole week to enable customers to conveniently buy and cycle (White Pages para 4). Marketing Strategy for Bicycle HQ (300) The need to compete effectively in the international markets has been staged by the open world economy (Doole & Lowe, 03). This has alerted managers all over the world that there is need to have good skills and aptitudes in order to fit and respond to customer tastes. This kind of change has also led to open access to internet, which is now connecting world economies (Doole & Lowe, 03). Bicycle HQ is not an exception. Based in Melbourne Australia, it has also been put in a position to respond to this pressure especially in out-doing its competitors in the sale of bicycles and accessories. Bicycle HQ resolved first to market segmentation, which involves sub-dividing the larger into smaller segments. Being that they have giant bikes to offer their customers, they first target the high class and sports customers in their sales. The main approach has been to target all kind of customers by selling bikes according to their purposes. For example, they sell road bikes and mountain bikes (Bicycle Network Australia). Their market has also been segmented along gender lines in that they also have ladies and children's bikes (Bicycle Network Australia). One major thing that influences the buying behaviour of customers is health issues. However, there have been initiatives that have at one point changed the buying behaviour of customers in Melbourne. A recent launch of cycling strategy by the government has promoted great sales for Bicycle HQ (Bicycle Network Victoria). In a bid to fight environmental issues as well as health issues, the state government has gone into funding of this Darebin Bridge Project. The motive was taken after it came out that Melbourne has the largest number of cyclists and the state wanted to take a lead in this affair (Bicycle Network Victoria). The Bicycle HQ had resolved to internet advertisements to market its products. This has involved the formation of their own websites and other sites like in the Yellow pages to help their customers get information on their products. The advertisements involve photos of current bicycles in the market and their prices together with the features that make them unique. They have also resorted to allowing customers to create accounts with them for frequent updates with an assurance of privacy protection. Still, the retailers have joined social networks like Facebook in order to effectively get feedback from their customers. Offers Provided by Bicycle HQ (500) In order to effectively compete with its competitors, Bicycle HQ offers workshop facilities to its customers. These include carrying out routine checks, repairs and full maintenance services like rebuilding wheels and rear suspension units (Bicycle Network Australia). They services bicycles 2-3 days but are also able to repairs on the spot in certain circumstances (Bicycle Network Australia). They also customise their products by building bikes on order so that the customer finds exactly what he/she wanted. This work is normally affected by a group of experienced staff in a workshop. Bicycle-hq sells the following giant brands: Giant anthem, Giant Trance, Giant Yukon, Giant Boulder and GT Avalanche (Bicycle-hq Carnegie para 2). Not only does the bike shop provide these models but it also provides hundreds of mountain bikes with older models being given a 40% discount off the price (Bicycle-hq Carnegie para 2). In the recent, there have been some discount offers for bikes and other accessories. For the bikes, the discount has been on at least every model. For example, Giant Pre Bike Balance bike was recently introduced to help children gain enjoyment of cycling at an earlier age; the bike now goes for $ 119.00 down from $ 215.00. The AFL Kids Bikes (Western Bulldogs 16inch) now have a price of $ 119.00 down from $129.00. The Mongoose Program Dirt BMX Bike 2012 now goes for $ 229.00 as opposed to the earlier price, which was $ 349.00. The Mongoose Capture Freestyle BMX 2012, which was earlier retailing at $399.00, now retails at $299.00. The ladies categories have not been left out in these offers. The relatively short frame, light and black in the pedal brake Mongoose Blaze BMX was once retailing at $299.00 but now retails at $ 249.00. One major observation that one can make is that all the products of Bicycle-hq have had a drop in price, a measure seen as out to outdo its competitors. In addition, the bikes for boys and children seem to have been focused on most. The discounts have not been on bikes only but also on accessories. For example, the Tioga Windproof Vest made of a wind resistant fabric and has the ability to keep one warm on the cold mornings was once retailing at $79.00 but now goes at $39.00 (Bicycle-hq Carnegie 01). The sigma 1106 computer, which can perform a number of diverse functions and has a clear display, goes for $45.00 down from $ 55.00 (Bicycle-hq Carnegie 01). Ronde Madison Short Gloves can be found in different varieties all costing $ 19.00 down from $ 29.00 (Bicycle-HQ carnergie, para 1). Ravx Flash Super Red weighing 23gms now costs $28.00 down from $ 38.00 (Bicycle-HQ, Cargenie, para 02). Netti Sun Pro Arm Warmers made of Nylon with reflective logos and rubber grippers go for $ 30.00 from $ 38.00 (Bicycle HQ Carnegie para 3). Another special offer for the women segment is the reduced prices for Women Sugoi Tactic Cycling Jersey which has come down to $ 49.00 from $79.00 (Bicycle-hq Carnegie para 7). Similarly, Mens Sugoi Evolution Cycling has come down to $49.00 from $98.00 (Bicycle-hq Carnegie para 8). Pricing Strategy for Bicycle HQ (350) Pricing is a very vital element when it comes to marketing a product because in one way or another, it affects other features like product features, channel decisions and promotions (NetMBA.com). A good pricing strategy is often arrived at once a marketing strategy has been developed. This would involve a market analysis, segmentation, positioning, making marketing mix decisions, estimating the demand curve, calculating fixed and variable costs, understanding environmental factors and lastly setting pricing objectives (NetMBA.com). The ability of Bicycle HQ to make sales has been attributed to the pricing strategy they have put in place. A close look at its marketing strategy has integrated elements like convenience, customer satisfaction and specialty. The pricing strategy they have employed stands out in Melbourne because they have been able to identify their potential buyers, competitors and as well have known the threats that surround the substitution of a product. The kinds of models they sell are so unique that the customers do not easily confuse them with their competitors' products. The safety of the consumer is guaranteed the sense that sales of a bicycle are accompanied by other important accessories like helmets. The pricing of the bicycles has been done with the comparison between the level of demand and the level of supply because the cycling projects that are being launched in Melbourne are influence the demand curve in a way. As well, their pricing strategy does not leave out the fact that Bicyle HQ is a profit making organization. Therefore, the strategy is ensuring that it takes on the customer’s needs as well as attracting profits for the business. One major thing that Bicycle HQ needs to put into consideration is that the pricing strategy should also be guided by customer views, response and satisfaction. In addition, the pricing strategy should be built on the willingness of the consumers to buy the products. A major strength that Bicycle HQ has is that its pricing strategy is value-based. Therefore, a high price bicycle would guarantee a high quality and valuable bicycle. Distribution Strategy for Bicycle HQ (250) Distribution can be viewed as getting products from the manufacturer to the consumer or customers (Rogers, 79). The channel by which it reaches the consumer is the point when it comes to the concept of a distribution strategy. Retailers are always considered the final members in the consumer distribution channel and it is them whose purchase the product to resell to consumers (Hennessey et. al., 374). For a business retailer dealing in bicycles, the cyclist is the consumer and thus ensures that the right good are purchased for the cyclist. This normally involves purchasing the right item from the central store and bringing it down to the retail shop. The specific item to be brought, with the accurate quantities, is one of the challenges in retail operation (Lamba, 311). The major strategies for retailers mostly are the push and pull strategies. The push strategy is always dependent on the level of demand in the market. If the demand is high, the retailer may need to push for more stock in the stores. This is an example of a strategy employed by Bicycle-hq especially during a promotion period for cycling competitions and club promotion. The pull distribution strategy is generated at the store level based on the demand data captured by the point of sales terminals (Lamba, 311). Promotional Mix for Bicycle HQ The concept of promotional mix involves elements like advertisement, personal selling, public relations, direct marketing and sales promotion. When the elements are assembled together, they provide a high level of marketing communication mix for a company. This choice of this mix depends on the objectives of a firm as it varies from one company to the other. Whatever choice the company makes, the marketing and promotional mix should be able to integrate healthy relationships. One way of encouraging consumers for Bicycle HQ is to advise on the need to remain healthy by cycling as a way of commuting. Looking at their products and initiatives, this kind of message is in their efforts to enhance public relations. The business advertises its products through television networks and even the use of social media like Facebook and Twitter where they send photos of the bicycles to their already existing customers. In their websites, they post a list of new arrivals together with their details of features and prices for the customers to see. In addition to this, they have posted in their website that In a bid to do personal selling of the products, the Bicycle HQ has set up a mechanism of reaching out for its already existing customers. This has been done by creating an account for every customer in the company's website. The program is set in such a way that the customer gets certain personal details of the customer to help them provide them with basic information on the best services (Bicycle-hq Carnergie para 5). Such information makes them make informed decisions on website development as well as marketing. Through it, they are able to oblige the request of customers on products and services (Bicycle-hq Carnergie para 5). The personal selling in this case is based on the website for the Bicycle HQ retailers. The business executes this style by ensuring that the customers have the details of the product as well as its major value. In public relations, a company should always rely on the workers to pass the message they have to the customers. The same has been happening in Bicycle HQ as its workers ensure that before a consumer goes with a product, he/she has learnt more than he/she wanted to know. This strategy normally requires that the workers be in close contact with the customers always. In enhancing its sales, the retailers also ensure they first retain their potential customers. The Bicycle-hq promotes its sales by lowering prices of accessories. For example, Ronde Madison Short Gloves can be found in different varieties all costing $ 19.00 down from $ 29.00 (Bicycle-HQ carnergie, para 1). Ravx Flash Super Red weighing 23gms now costs $28.00 down from $ 38.00 (Bicycle-HQ, Cargenie, para 02). Netti Sun Pro Arm Warmers made of Nylon with reflective logos and rubber grippers go for $ 30.00 from $ 38.00 (Bicycle HQ Carnegie para 3). Another special offer to promote sales especially for the women segment is the reduced prices for Women Sugoi Tactic Cycling Jersey which has come down to $ 49.00 from $79.00 (Bicycle-hq Carnegie para 7). Similarly, Men’s Sugoi Evolution Cycling has come down to $49.00 from $98.00 (Bicycle-hq Carnegie para 8). In direct marketing, the retailers use their local expert Joe Kenwright to know more about their products. Joe is an automotive writer and keen cyclists in Melbourne; he is normally sent out to test the products and report back to let the retailers know the greatness of the product (Bicycle-hq Carnegie, para 1). In this, he has ever given reviews for products like Lights Cygo Re-chargeable (1), Road TCR Advanced (0) and Road Bike carbon Sport (1) (Bicycle-hq Carnegie para 1). Conclusion Bicycle-hq Carnegie has the pride of offering to its customers, the best of giant bicycles ranging from kids bicycles to boys and even women’s bicycles. Even though the shop might not reach out for the whole Australia, there are certain clubs in Victoria that have helped promoting the retail business of Bicycle-hq Carnegie. This is because the clubs get most of their best cycling models from the shops of Bicycle-hq. In terms of the market that they enjoy, Bicycle-hq controls the eastern suburbs of Melbourne and therefore has a wide enough market for its products. The market segmentation has also been done along age and gender lines with offers for each group being available. The offers that have been there include discounts on the retail prices of some Bikes. For example, AFL Kids Bikes (Western Bulldogs 16inch) now has a price of $ 119.00 down from $129.00. The offers are not restricted to bikes only but are also stretching out to accessories as well. For example, a special offer to promote sales especially for the women segment is the reduced prices for Women Sugoi Tactic Cycling Jersey which has come down to $ 49.00 from $79.00 (Bicycle-hq Carnegie para 7). The advertisement for Bicycle-hq is one that goes online through websites and social media like Facebook. In addition to that, copies of the latest adverts for the retail shop show heaps of special offers and normally have a voucher to redeem the high prices. The major strength that ensures that the retail shop boosts its sales. The promotional mix and pricing is full of attractive packages and distribution is very efficient. The retail shop through its business activities demonstrates that it is profit-oriented as well as out to realize customer satisfaction. The major thing that boosts the Bicycle-hq is its ability to protect the customer information that it does collect. Through their personalized accounts, the customers do feel secure to share information with the retailers on the kind of gods they want. The Bicycle-hq gather information to help them understand the target audience; oblige to the customer's requests for specific products and services. In addition to that, the information helps them to make informed decisions on how to improve their websites development and customize the advertising content. Lastly, they use such information to inform their customers on new and special offers on products. Work Cited: Bicycle-hq Carnegie. Sales Items. Web, 2012 Accessed on 12th January 2013. Bicycle-hq Carnegie. Bike Sales. Web, 2012 < http://www.bicyclehq.com.au/index.php> Accessed on12th January 2013 Bicycle-hq Carnegie. Product Reviews. Web, 2012 < http://www.bicyclehq.com.au/product-reviews/cat_97.html> Accessed on 12 January 2013 Bicycle-hq Carnegie. Advertisements. Web, 2012 Accessed on 12th January 2013. Bicycle-hq Carnegie. Service centre: Bicycle Service and repair. Web, 2012 Accessed on 12th January, 2013. Bicycle-hq Carnegie. Privacy Policy. Web, 2012 < http://www.bicyclehq.com.au/privacy-policy/info_4.html> Accessed on 12th January, 2013. Lee, Yang-Im. Retail marketing strategy: The role of marketing intelligence, relationship marketing and trust. Emerald, Journal of Marketing Practice: Applied Marketing Science: Emerald Group Publishing Limited, Volume 24 Issue 7, 2012 Hennessey, David. Global market. London: Cengage learning. Lamba. The Art of Retailing (Book+ CD). London: Cengage Learning. Rogers, Clark Stuart. Marketing Strategies, Tactics, and Techniques: A Handbook for practitioners. New York: Cengage Learning. Read More