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Custom Powerbike Essay

Bicycling is the second most popular outdoor activity (Outdoor Foundation, 2010). The Asia-Pacific region represents the largest as well as the fastest growing bicycle market in the world. Established in 2006 by the siblings Ning and Nui, Powerbike,has become one of the most successful bicycles and accessories shops in the city of Roi Et in Thailand. The siblings’ commitment to offering quality products and services is what sets them apart from other companies in Asia.

Bicycle Consumer Market

Once viewed as an indispensable item, the bicycle has drastically lost its positions in the past few decades due to significant improvements in the living standards all over the world. Bicycles have become a lot less important in people’s day-to-day lives, which may result in a decrease in demand, thus causing a major transformation of the industry (Global Industry Analysts, Inc., 2010). In spite of that, the bicycle market was expected to recover in 2010 and experience a substantial growth in the ensuing years. The growth will be largely driven by eco-friendly characteristics, the surging popularity of cycling as a leisure activity, and also the growing number of fitness enthusiasts. Governments across the world also aid the bicycle industry in the form of various bicycle promotion policies and projects. Furthermore, the sharp increase in fuel prices is making people take up cycling for commuting over short distances in cities.

Adult bicycles constitute the largest product group within the global bicycle market. The sales of adult bicycles are expected to reach US $29.2 billion in 2012. Sports bicycles represent the fastest growing product group in the bicycle industry. The worldwide bicycle market is predicted to exceed US $77.7 billion by 2015. The Asia-Pacific region represents the biggest as well as the fastest growing bicycle market in the world, demonstrating a CAGR of more than 6.0 %.

In terms of demographic segmentation, the bicycle market is divided into several different groups based on and nationality of customers. The demographic variable is the most popular criteria used to identify various consumer groups. Partly, this is due to the fact that desires, preferences, and usage rates are closely related; and also because the demographic variable is easier to measure than any other types of variables. Of late, many researchers have also tried to segment the bicycle industry by using the generation gap.

According to the year-end data supplied by the Bicycle Product Suppliers Association, bike suppliers shipped over 2.65 million units to dealers worth a record $1.02 billion in 2010. This total represents a 5 percent growth in units compared to the year 2009, and is 7 percent more than the decade’s average of 2.46 million units. This is despite the fact that the year 2009 was plagued with shortages, as the season broke early in the spring. A lot of the increase in 2010 was due to 700c bikes (Wiebe, 2011). These bikes were sold mostly to the youth, specifically in the age group of 21-35. Road bike shipments went up by 17 percent, while hybridswent up by 13 percent, as compared to 2009. The greater mix of these higher-value bikes, which were mostly sold among the higher income group, drove the record sales.

In psychographic segmentation, customers are grouped into different groups, according to their life style or their personality. People who are in the same demographic group might show major differences in these psychographic features. Their lifestyles are formed in part because consumers are “money-constrained or time-constrained”. Hence, some firms will provide convenient services for these customers, such as providing bicycles and cycling services at low prices. Another aspect of the psychographic segmentation is personality. Customers might show a great variety of preferences, as they have different personalities. As a result, bicycle-manufacturing firms must add personality and services to their products in order to meet the needs of their customers. According to Layman (2009), there are four cycling personalities. The “No Way No How” group represents the one third of the world’s population that has no interest at all in biking. Even under the best conditions, they will not likely to cycle on a regular basis. The second group is the “Enthused and Confident”, who represent roughly seven percent of people that bike in the city. The third group is the “Strong and Fearless”, who cycle under all conditions. They represent about one per cent of the world’s population. And finally, the “Interested but Concerned” is the 60 some-odd percent of the world’s population who like the idea of cycling, because they know that it is good for their health and the environment. However, they will only do it if it is safe and comfortable like driving a car or travelling on a bus.

In conclusion, the current consumer market for bikes is growing, and this is partly caused by the growing traffic congestion, as well as increasing popularity of electric bikes. Therfore, Nui and Ning made the right choice by investing in Powerbike.            

Positioning Strategy for Powerbike

According to Bhasin (2010), positioning is the process whereby a brand (a service or product) is marketed with the aim of owning a differentiated and meaningful idea in the mind of a target audience. A positioning strategy is the image a company or an organization wants to create in the minds of their customers, and the picture that they want their customers to visualize in terms of what they offer in relation to any competition they may have or the market situation (Taha, 2004).

There are several approaches that Powerbike may take to positioning strategies.

The first approach consists in using Customer Benefits or Product Characteristics as a positioning strategy, which will focus on the characteristics of the customer benefits or the product. For example, some prefer motorbikes for fuel economy, others for power and looks and others for their durability. The second approach uses pricing as a positioning strategy, whereby brands charge to cover high costs and make the consumers believe that the product is of high quality. The third approach lies in using a position strategy based on use or application, whereby Powerbike might introduce new uses of the product, which will automatically expand its market. The fourth approach uses a positioning strategy that is based on product process, whereby Powerbike may associate their products with their users or classes of users. For instance, they might use university students as models in their advertisements. This will influence the product image in the sense that the bikes sold by Powerbike will appeal to the youth, and particularly to university students. The fifth approach the siblings may use relies on a positioning strategy that is based on product class, whereby Powerbike may have to make some critical positioning decisions. The sixth approach is to use a positioning strategy that is based on cultural symbols, whereby they might use deeply entrenched cultural symbols in order to differentiate their brands from those of competitors. And the seventh approach will enable them use a positioning strategy that is based on competitors, whereby reference to competitors might be the dominant aspect of the firm’s positioning strategies, in that the siblings’ company might use either the same positioning strategies that are being used by their competitors or they might opt to use a different strategy by basing it on that of their competitors’.

Out of all the available choices, the best strategy approach for Powerbike is to never compete on price. Instead of getting involved in a pricing war with their competitors in Thailand, which they will most likely end up losing, Ning and her brother Nui should outperform their competitors in other areas. To do this, they should offer expert advice by sharing their knowledge on everything related to bicycles, such as: what to do if a bicycle is giving problems; what sort of bicycle is the best suited to a certain type of individual like women, children, hikers, families etc.; whether to buy or lease a bicycle; whether to invest in a high-quality bicycle or just a normal one; how to properly maintain a bike, so that it lasts for a long time. Most competitors do not do this very well, so this will be a good chance for the siblings. Another way they can achieve this is by having intimate relationships with their customers. They may do this by personally engaging their customers. Here, they ought to ask their customers exactly what they are looking for in a bike, and if there is any way they can help them further. Most of the big competitors do not know their customers well because they fail to use this information. Nui and Ning can get to know their customers by sending them birthday cards or V.I.P. customers Christmas ornaments decorated with their logo to promote a special holiday sale. Their bigger competitors cannot replicate their success, because they will not be able to have the same kind of relationship with their customers, especially around seasonal events, such as holidays and birthdays. By establishing intimate relationship with their customers, Nui and Ning will enable their customers to feel like they can talk to them about anything related to bikes, and hence they chances of them moving to other competitors will become very slim or non-existent. The third way that Nui and Ning can rise above their competition without engaging in price wars is by offering a unique experience. The siblings can achieve this by offering something different in terms of services or promotions. For instance, they may arrange tours that mostly involve cycling. Here, they might collaborate with a travel company and provide bikes in order to give a guided tour of a certain region in the country. This will be highly beneficial to them, as other than their regular customers, such as university students and people who want to avoid traffic, they will also be attracting both local and international tourists, thus increasing their sales, enhancing their reputation, and making a bigger name for their business in the process. They may also give their customers some little extras they cannot find anywhere else, such as offering them free coffee and pastries in their business lobby or offering extended delivery hours that do not conflict with their customers’ schedules. They may also advertise their products and services through their official website. This will enable them to reach all tech-savvy persons and provide them with as much information about Powerbike as possible, all without having to leave the comfort of their homes or their cyber café. If they launch online transactions by shipping bikes to people who order them from a remote location, such as a distant part of the country, they will increase their reach even further. Online shopping has proved to be very convenient for a lot of people, and Thailand is no different. To achieve all this, the siblings ought to seek an expert to help them design a branded Web presence. They should continue to use e-mail marketing to give their customers special incentives, such as holiday giveaways or even online-only sale events, to visit their website. This is an enormous opportunity for the siblings to be a local/regional online service that nobody else can possibly match. The fourth way that Nui and Ning can rise above their competition without engaging in price wars is by outdesigning the competition. The future belongs to small, fast, innovative and design-friendly companies that make use of their creative abilities to impress their clients and to make them memorable. Nui and Ning can make their bike business stand out from the crowd by having a special logo designed. The best way for the siblings to outperform their competitors in this area is to enlist the services of professional graphic designers or technology experts. This will give their business a sense of familiarity and identity, especially if their logo is easy to remember. As a result, they will be able to attract more customers, especially if they associate the logo with quality products and services. A fifth way that the siblings can rise above their competition without engaging in price wars is through becoming stars of the community. We are all aware of successful businesses operating in our communities, whereby the brand or the owner has become a community star. All the people know their names and what they stand for. One way Nui and Ning can do this is through involving themselves as well as their bike business in community events. They should become sponsors of a community festival or even donate some of their bicycles to a charity auction. By getting their business identity out into the streets of their neighborhood, Nui and Ning will locally become the “go-to” option. The sixth way that Nui and Ning may rise above their competition without engaging in price wars is by consulting demographics and future trends to build their positioning. Every business that looks to redefine its position ought to understand demographics as well as future trends. They should also make sure that their new strategy will work today as well as in the future. As a result, this will be able to keep ahead of the curve, especially when it comes to their business’s identity. For instance, electric bikes are quite possibly the future of bicycles. An ”Electric Two-Wheel Vehicles” report by Pike Research company forecasted that over 466 million electric bicycles and motorcycles would be sold throughout the world between 2010 and 2016. This represents an almost 10% compound annual growth rate. In this day, one in 7 bicycles that are sold is battery-assisted (Pike Research, 2010).The Asia Pacific region in general, dominates and will also continue to dominate the international two-wheeled electric vehicle market, as it is predicted to garner more than 95% of sales during the next six years. Hence, if the siblings take advantage of this opportunity, they will be able to future-proof their business, as well as show that they can be trendy. The seventh way that Nui and Ning may rise above their competition without engaging in price wars is by stealing niche business customers from their biggest competitors. The siblings may steal customers from their biggest competitors by becoming local experts in that niche. They cannot be challenged if they are known as “the” local experts in everything that is related to bikes. The more passionate and knowledgeable they are about their business, the more people will trust their information and services, and especially when the siblings become more familiar with their community than huge corporations in Bangkok.

An example of a body copy that Nui and Ning may use is: “To get a good quality bike, you usually have to look long and hard for a reliable shop. Not so with Powerbike. Our organization offers you the best quality bicycles that you can order from the comfort of your home. We offer professional advice, services and repairs on anything bike-related. If you have any questions about bikes, we will always be happy to answer them. And whatever type of bike you want, we have it.”

In conclusion, focusing on an appropriate positioning strategy instead of engaging in price wars is the best way for Powerbike to move forward and expand.

Powerbike Gaining a Foothold in the Bangkok Market

There are several reasons why Powerbike has a very good chance of gaining a foothold in the Bangkok market. First, Nui and Ning offer a wide range of services, such as selling children, women and motorcross bikes, repairing bikes, and providing expert services. Being a one-stop shop for everything bike-related enables them to stand out from other competitor .Customers will appreciate this, and as a result, the company will gain a lot of customers. Second, the fact that they have succeeded in their town will underscore their good reputation, and go down well with the potential Bangkok customers, as they will know what to expect from Powerbike. Third, there is still a need for more bike companies in Bangkok with its population of over 6.3 million people. The demand for bikes will, therefore, increase, especially due to increasing traffic congestion in the city.

Taking into consideration all the three factors, it is highly recommended that Nui and Ning invest in Bangkok. This will enable them to increase their sales and get an even larger number of customers than they had in the city of Roi Et. In time, they could possibly even expand to other cities, or even countries, such as China.

In conclusion, Powerbike is a growing business that has a lot of potential. It has a high chance of becoming successful, especially due to the fact that they offer a wide range of services in addition to selling bikes. The current consumer market supports their growth, too. If they follow an appropriate positioning strategy, it is a highly likely that Powerbike will become successful. There are no guarantees, of course, but internal and external factors seem to support the growth of this particular business. 

Code: Sample20

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