Peds Inc.

1 EXECUTIVE SUMMARY 4

2 CURRENT SITUATION AND TRENDS 5

2.1 The Bicycle Market 5

Micro Level Analysis on the Market Side 5

2.2 Marketing Research and Forecasting 5

2.3 Market Segmentation 7

Segmenting Demographically 7

Segmenting Geographically 7

Conclusions of the Market Segmentation 7

2.4 Analysis of the Competion 8

Porter’s Five Forces to assess Industry Attractiveness 8

Micro Level Analysis on the Industry Side 11

2.5 Analysis of the Macro environment 11

Demographic Environment 11

Sociocultural Environment 12

Economic Environment 13

Regulatory Environment 14

2.6 Customer Analysis 14

High-involvement customers 14

Low-involvement customers 15

Conclusions of the Customer Analysis 16

3 KEY ISSUES - OPPORTUNITIES, THREATS, STRENGTHS, AND WEAKNESSES 16

Opportunities 16

Threats 16

Strengths 16

Weaknesses 17

4 MARKETING OBJECTIVES 17

5 MARKETING STRATEGY 18

6 ACTION PLANS 19

6.1 The Target Market Peds Inc. should pursue 19

6.2 Product Decisions 19

Dimensions of Quality for Peds Inc.’s products: 20

6.3 Pricing Decisions 22

6.4 Distribution Channel Decisions 24

6.5 Integrated Promotion Decisions 25

7 BUDGET FOR PEDS INC.’S MARKETING MIX 27

8 PROJECTED PROFIT-AND-LOSS STATEMENT 28

9 CONTROLS 28

10 CONTINGENCY PLANS 28

SOURCES CITED 30

1 Executive Summary

This marketing plan for Peds Inc. will suggest how the company should work in its business environment to be successful. It consists of an analysis of the current situation and trends, the analysis of key issues regarding opportunities, threats, strengths, and weaknesses, the marketing objectives for Peds Inc., the marketing strategy the company should pursue, and action plans that include specific actions that are to be taken with respect to each of the 4 Ps. The plan also shows a projected profit-and-loss statement, control mechanisms and in case the whole marketing plan does not work out I designed a contingency plan.

The analysis of the current situation and trends shows that the bicycle market in the Triangle area is attractive. The industry Peds Inc. will be doing business in is rather unattractive. The marketing research shows that there is potential for a bicycle shop even if profit margins are relatively low. The market segmentation showed that the most interesting segments for Peds Inc. are the upscale customers but also students who are more interested in midlevel products with reasonable prices. The analysis of the competition makes clear that the industry is rather unfavourable for Peds Inc.. By analyzing the key issues it became obvious that Peds Inc. does have opportunities and strengths but it also has to be aware of the threats and its weaknesses. The marketing plan gives suggestions about what to do in case those threats occur.

The marketing objectives for Peds Inc. are a sales revenue of $300.000, a profit of $15.000, and a market share of 3%. Peds Inc. will try to reach these objectives by pursuing a product differentiation strategy. Chris will offer superior products and services to differentiate from his competitors. The action plans will show how to make use of the 4 Ps to guarantee a good fit with the strategy in order to reach the company’s goals.

The budget section shows that Chris can spend $50.000 on promotions and suggests what he should spend that money on. The projected profit-and-loss statement shows that if the assumptions were made right Chris can expect a profit of about $17.000 which would be a satisfying result for the first year in business. The control section shows that Chris has to monitor Peds Inc.’s cash flow closely to make sure that he can react quickly if changes in the strategy are needed.

The final part of the marketing plan is a contingency plan that suggests an alternative strategy in case the differentiation strategy does not work out. In this case Chris should switch to a focus strategy to avoid competition.

2 Current Situation and Trends

2.1 The Bicycle Market

Micro Level Analysis on the Market Side

The analysis of the sociocultural environment which will be discussed later will show that there is an established customer need for fitness and health care but there are no clearly identifiable target customers for the bicycle industry. People’s need is to keep themselves fit and riding the bike is only one way to satisfy this need. People who want to use the bike to travel within short distances or who are involved in the competitive bike sport are a clearly identifiable set of target customers. From the health and fitness perspective one cannot say that riding a bike provides a customer benefit that other solutions do not. Therefore, it is not unlikely that customers buy other solutions. Of course there are no substitute products for customers who are into competitive bike sports. The bike as a means of transportation could also be substituted by motorbikes.

Looking at the target segments one can clearly say that there’s a great growth potential. The analysis of