The Positioning Strategy of the Power Bike Company - Research Paper Example

Introduction To begin with, it should be d that cycling is regarded as the best alternative for travelling and transportation. Regardless of thefew disadvantages, the key and minor advantages can be used as the effective marketing promotion tools, and, in accordance with the research by Bai and Newsom1, bicycles will never lose their target audience. This can be explained by the fact that bicycles are comparatively cheap, enduring, almost all-road vehicles that do not have age restrictions, can be used for transportation and recreation aims, as well as they are ecologically safe. Powerbike Company is aimed at conquering the leading position on the bicycle market in Thailand, and, considering the research results by De Chatel and Hunt (2003), it should be emphasized that the marketing opportunities are extremely favorable. The marketing strategy, in its turn, should be built on the principle that bicycle is the universal vehicle that is suitable for everyone. In the light of the fact that fossil fuels become more and more expensive, the Powerbike marketing strategy can create an effective promo campaign emphasizing the independence of these vehicles from oil and gas. As for the positioning strategy of the company, the emphasis should be made on cycling as sport and recreation activities, pointing out the availability these vehicles for the immense audience. Consequently, the marketing strategy should be segmented considering tastes, preferences, aims, and income levels of the audience. Considering the likelihood of occupying the service niche, the Powerbike needs to consider not only bike sales, but also rent, servicing (including preparing for cycling seasons, long journeys, etc), teaching, parking, etc. The possible variants are numerous, and each can be initiated for creating the devoted audience, and improving communication process with the customers. Target Audience The demographic and psychographic aspects of selling bicycles are mainly based on the general concepts of selling vehicles, however, some authors (Warr, 2004; Van Trung, 2008) emphasize the distinctions for the bicycle market and its target audience. Therefore, considering the necessity to penetrate the market, the Powerbike Company will have to target existing riders, as well as those who only plan to purchase their first bike. Potential and existing riders will require two different approaches towards the marketing strategy, as well as the positioning principles. The letter are the most demanding, however they are the key income source for bike shops2 as they constantly purchase lubricants, spare parts, consumables, or just require regular servicing. Additionally, they are more loyal and devoted in comparison with the potential riders.3 As it is stated by the market researchers (Magat and Moore, 2004) most riders can be regarded as potential consumers when they have to replace parts of their bikes (repair or upgrade), and in average, this happens once a year. As a rule, they have already made their choice concerning the shop, and they are reluctant for changing their preferences. This can be explained by the fact that most companies engaged in bike selling and servicing offer special bonuses for their consumers, they can offer test-rides, catalogues, exclusive servicing etc. The psychographic aspect of such consumers’ behavior is linked with the unwillingness to leave the comfort zone. Therefore, the Powerbike will have to focus on creating even more comfortable conditions for targeting this part of the audience. The psychographic factors for targeting potential riders should be based on key values that people pursue when they purchase their first “two wheels”. These are associated with comfort, availability of vehicles and parking for them, economy for transportation, health and recreation, etc. As for the demographic aspects of the target audience, it should be stated that it is not restricted. Bicycles are available for everyone regardless of gender, income level, religion, ethnic background etc. Considering the segmentation principles, the key demographic target audience sections are as follows: School-kids. They value the external look of the bicycle, and, mostly, do not care of the vehicle performance. Since the bikes for this audience are purchased by their parents, the key emphasis should be made on safety. Undergraduates. As a rule, they offer at least 25% of the annual turnover (Chen and Chen, 2010). Most of them do not require regular service, they do not purchase consumables, cycling clothes, and expensive equipment. Middle-income adults. Their part in the audience segmentation is 5% only; however, they are not reluctant in servicing their vehicles, often purchase additional accessories, clothes, and equipment. Additionally, they rarely ride alone. Sportsmen. This category involves riders of age 14-40, and, as a rule, bicycle sport clubs arrange special agreements with suppliers or manufacturers of the bikes, spare parts and accessories. Therefore, this segment of the target audience is the most desired, however, it is the hardest to hit. Considering marketing realities in Bangkok, where the main office is located, it should b stated that the overall population is approximately 9.3 million people, and at least 80% of these people may be regarded as the target audience for Powerbike. The population density is rather high, and all the residents are fed up with continuous traffic jams as well as lack of parking places, while bicycles will help to resolve this problem for thousands of people. Additionally, if the company arranges bike-rent service, this will increase the target audience of the company, as rental is popular among tourists. Therefore, those who are interested in recreational and sightseeing tourism will become the company’s customers. The general outline for the Powerbike Company’s target audience is as follows: these are health and environment conscious people, who do not have an opportunity or desire to travel by car or any other automotive vehicle. This audience needs bikes, spare parts, servicing, and accessories, since the complex service increases customers’ loyalty, as well as improves customer-care policy of the company. The company will have to assign the number one priority to the student audience, as they are regarded as the potential customers of the bike shops and services. Additionally, the university personnel also prefer getting to work and home by bicycle. The demographic image of the student audience is varying, therefore, there will be an opportunity to offer a wide range of products and services: for recreational riders, for sportsmen and extreme lover, for girls, and for those who appreciate comfort and elegance in bikes, clothes, and accessories. Positioning Strategy First, the positioning strategy outline requires detailed classification of the goods and services that are offered by the company. Considering the fact that bike industry involves a wide range of products and possible services, the product segmentation within the company is the most important aspect of the marketing strategy, as well as the positioning principles. Therefore, the range of products that are offered by the Powerbike Company is as follows: Mountain bikes. Up to 70% of the bike market is filled with the mountain bikes, since these are the most universal two-wheeled vehicles. Mountain bikes are endurable, all-road, and, as a rule, not difficult for servicing. The positioning strategy will be based on freedom and simplicity. The customer should have an impression of a reliable friend that will bear mud, dirt, sand, water, dust and so on, since these are the natural environment for this semi-wild species of bikes. Road bikes. They are not so widely popular as the previous category; however, road bikes are preferred by sportsmen, as well as recreation riders. The positioning strategy will be based on the association with slim, speedy, and a bit obstinate horse. These bikes are for those who appreciate accuracy, cleanliness, and elegance in quick motion. Lady’s bikes. The key difference of these models is in the frame size and construction, as traditional frames are not suitable for riding in a skirt. Additionally, these models are featured with the wide variety of colors, and may be equipped with specific saddle, as well as a front basket for a purse. Ladies do not need speed, power, and so on. They require comfort, elegance, and reliability. Children’s bikes. The construction of these bikes is similar to mountain bikes for adults, with the only distinction in size. These bikes will be positioned as suitable companions for games, growth, and physical development of the younger riders. BMX bikes. Since, these are bikes for dirt jumps, street riding, and racing, the positioning strategy should emphasize its savage character, necessity to tame the beast, and stay careful. Regardless of the bike types, the positioning strategy will vary depending on the aims and purposes of the customers. Therefore, the classification will stay the same: potential riders, who do not have a bike, and experienced riders who are focused on recreation, sport, or transportation. In accordance with the research by Chen and Chen4 new customers (or potential riders) are the most challenging for market researchers. The positioning strategy requires essential imagination and fantasy, since the company will have to act like a fish to attract a whale. The positioning strategy for new customers should be based on their own preferences, while a person who does not have a bike (but wishes to purchase one) wants to have something reliable, comparatively cheap, suitable for novices, and non-demanding in servicing. That is why most bike companies offer ready solutions for novices that contain the cheapest spare parts. These bikes will endure all the faults and experiments of a novice, and they will not require frequent servicing. These features should be emphasized while performing a positioning strategy. The rest of the audience segments will have to be shown what they wish to see. Hence, recreational riders do not want to hear about classy spare parts, the features of adjusting breaks, gears, or wheel forks. Their aim is to ride and treadle, enjoying the views and the road surface. Sport riders need the highest performance of their horses; hence, they will not be satisfied with the standard kits with the cheapest spare parts. On the contrary, they will purchase additional high quality equipment, accessories, clothes, and consumables. The retail sales of the bikes, parts, and accessories should be the part of the integrated positioning strategy; however, these aspects should be separated from each other. On addition to the positioning of selling bikes, it should be stated that the company will have to include additional services for the original marketing and advertising plan. Therefore, the company may offer bike rental. Hence, the customers should be offered an alternative: “you can purchase it, or rent. But you will not be able to part with it”. If the company offers used bikes sales, as a service for those who purchase a new vehicle, the positioning strategy should involve the opportunity “not to shoot a deceased horse, but exchange it for a new one”. Selling accessories requires additional emphasis and the comfort, additional features and functions that are required by all riders. In fact, it does not require such imagination as positioning strategy for selling bicycles; however, the customers need to know that they can find anything they may need during a ride. These are locks, speedometers, seats for ladies or kids, helms, bags, lights and so on. In fact, it is impossible to offer everything, therefore, the absence of some specific goods can be turned into a competitive advantage: “the Powerbike carefully choose only those goods that are required by our customers”. The lacking goods may be delivered by request, or even added to the regular stock if the demand is high. Clothing may be regarded as the most demanding segment of the retail process. Considering the fact that clothing has to suit and match the customer, it should be made of high quality materials that can protect from overheating, and overcooling. Since the variety of clothes even larger than spare parts and accessories together, the company can make emphasis on the customized orders in accordance with the customers’ preferences. Parts segment is the most unique aspect of the positioning strategy. On the one hand, riders need parts, consumables, and service materials like cables, hoses, chains, etc. On the other hand, it is senseless to launch a separate marketing campaign for retailing spare parts and consumables, since those riders who prefer paying for service do not know the advantages of high-class gears, while those who repair and service their bikes by themselves know these advantages very well. They just need to know where the parts can be purchased. Moving to Service Sector The likelihood of moving to the service sector is quite credible, however, the success of such moving depends on several factors: Range of services that the company is able to offer, including the demand of these services on the market, as well as the opportunity to separate these services from bike sales. Competitive advantages of the Powerbike. It is evident, that if the company is able to attract customers who needs to purchase vehicles or accessories, it will be able to offer attractive services for riders. Therefore, the services that can be offered are divided into two categories: purchase related, and unrelated services. This means that some services are offered automatically when a bike is sold: Guarantee service or tune up Repairs Changing lubricants, frameset repairs, adjustments, etc Installation of the accessories and equipment Replacements of the worn-out parts and accessories In other words, these services are possible only when a bike is purchased. Another segment of services is offered to those who do not have a bike, or does not require service: Bike rental, including test drives of new models and parts Arranging recreational or tourist tours for riders Bike parking or seasonal storage Teaching novices to ride, or to repair and service their bikes In fact, most services do not require qualified personnel or additional equipment, however, the customers need to know the opportunities that are offered. Therefore, the Powerbike has perfect chances to move to the service market segment, if it is able to hit its target audience in sales segment. The competitive advantages of the company will be helpful for defining the attractiveness of the company for the target audience, as well as outlining the likelihood of targeting the service segment of the bike market. In general, the Powerbike Company is regarded as the retail company that offers bike, components, clothes, accessories, and some additional services for bike owners. It is not a mass retailer, therefore, it can not offer lower prices in comparison with other specialized shops, as most of them offer the lowest possible prices on the market (Michman, 2003). If the company is planning to open an office in Bangkok, the location will be an essential competitive advantage, as they will be able to cover at least 9 million target audience (including the population of the suburbs and tourists). Additionally, the essential part of the audience involves students and university personnel; therefore, the office can be a part of the campus. This will simplify the customer care relations, as the students will have access for bike service due to its comfortable location. Additionally, the students and staff will be able to get quick service while they are on their studies, which will improve customers’ loyalty. Considering the Powerbike’s Roi Et experience, it should be emphasized that the company’s personnel is highly passionate about bicycles, therefore, the services that will be offered to customers are performed by friendly, highly knowledgeable and experienced personnel. In accordance with the research by Michman (2003), the bike industry is not potential from the enrichment perspective. Only those who passionately love bikes and freedom one can get from a bike can run a bike business: That kind of passion and commitment comes across to customers when they find a sales person who can fit them to a bicycle so they feel comfortable and want to ride it. Someone who recognizes you and remembers your name is a welcome feature at a specialty store. (Michman, 2003, p. 176) In the light of this fact, it should be emphasized that the actual importance in analyzing competitive advantages should be attributed to the ability to hit and keep the audience. Powerbike has perfect chances to move to the service sector since its Roi Et audience is highly devoted. The company will be able to reach the same results in Bangkok; however, considering its confidence to the customers, as well as the professionalism and passion the company works with, services may become the key aspect of Powerbike Company’s business in Bangkok. On the other hand, the company will have to adjust a perfectly tuned-up supply chain, as modern bikes can not be subjected to primitive handicraft service and repairs, while installation, servicing and adjustment of the spare parts and components require specific equipment and experience. This means that regardless of the passionate attitude of the personnel towards their obligations, the company will have to take care of adjusting business contacts with other retailers and suppliers in order to offer quick and professional assistance to their customers. As it is stated by Chen and Chen (2010), poorly arranged supply chain management kills all the potential that passion and experience creates. Therefore, the Powerbike Company will have to consider arranging a supply exchange network, for increasing the capacities and potentials of the Powerbike itself, as well as small companies all over Thailand and Bangkok in particular. Conclusion The Powerbike Company is a highly competitive and potential participant of the bike industry sector in Thailand. Considering its experience in Roi Et, opening a shop in Bangkok may be regarded as a highly successful idea that will help to cover the 9 million target audience of residents and tourists in Bangkok. As for the demographic potential of the target audience, it should be stated that the company has an opportunity to cover all the possible segments of bike riders, as well as offer additional services for them. In the light of the fact that the competitive advantages of the company are obvious, the positioning strategy of the Powerbike will be based on the exclusive features of the vehicles that are required by every particular segment of the target audience. Reference List Bai, L., & Newsom, P. 2010. Optimizing the Advertising Budget for a Regional Business: the Case of Cycle World. Journal of the International Academy for Case Studies, 16(1), 73 Chen, J., & Chen, I. 2010. Quality Performance Indices Construction of Bicycle Components Manufacturing Industry Using a Fuzzy Analytical Hierarchy Process. Journal of International Business Research, 9(1), 29 De Chatel, F., & Hunt, R. 2003. Retailisation: The Here, There and Everywhere of Retail. London: Europa. Magat, W. A., & Moore, M. J. 2004. Consumer Product Safety Regulation in the United States and the United Kingdom: The Case of Bicycles. Rand Journal of Economics, 27(1), 148-164. Michman, R. D. 2003. Lifestyle Market Segmentation. New York: Praeger. Van Trung, N. 2008. The Bicycle. Bulletin of Concerned Asian Scholars, 10(4), 55-59. Warr, P. (Ed.). 2004. Thailand beyond the Crisis. London: Routledge. Read More