Final Marketing Report

8/8/2019 Final Marketing Report

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A Marketing Strategy Report On

BikeZone, Hinjewadi

MBA-IB 2009-11

Div. B

Prepared by:

Divya Bhatia (09020241071)

Hari G (09020241085)

Ankita Chhajlani (09020241104)

Soumya Chakrabarti (09020241109)

Sankar B (09020241115)

Biswajit Nag (09020241117)


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Dheeraj Sharma (09020241129)

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Table of Contents

Table of Contents ............................................................................................... 3

Executive Summary: .............................................................................................. 4

Situational Analysis: ............................................................................................... 5

CUSTOMERS ........................................................................................................... 5

COMPANY ............................................................................................................... 5

Competitive Scenario: ............................................................................................ 5

SWOT ANALYSIS ..................................................................................................... 7

Marketing Mix:....................................................................................................... 8

PLACE .................................................................................................................... 8

PRODUCT AND PRICE ............................................................................................. 9

PROMOTION ......................................................................................................... 11

BUSINESS OBJECTIVES SALES AND PROFITS ..................................................... 11

SEGMENTATION, TARGETING AND POSITIONING ................................................. 11

SEGMENTATION .................................................................................................. 11

TARGETING .......................................................................................................... 12

POSITIONING ........................................................................................................ 12

MARKETING STRATEGY DETAILS .......................................................................... 13

REFERENCES ........................................................................................................ 18

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Situational Analysis:

CUSTOMERSThe current set of customers includes bikes owned by people in the locality of Hinjewadi

village and the employees working in corporate in the MIDC industrial area. In the two years

of its operation in the current place, theBike Zone has had more than 2000 customers and half

of them are repeat customers for the enterprise. Average number of customers on a regular

day is around 25.

COMPANY

The company was started as a partnership firm and as a franchisee of Castrol. The total

capacity of the place is to service around 25 to 30 bikes everyday. There are nine employed

mechanics and one chief mechanic who take care of the operational aspects of the business.

Apart from this, there is one receptionist who takes care of the administrative functions of the

enterprise. The target for this marketing strategy is to improve the numbers further and get in

an average customer increase of ten customers per day.

TheBikeZone, which was started as a franchisee with Castrol is currently in a transformation

phase. It is set to becomeBikePoint, wherein the royalty payment that is currently made is not

needed, and they will be bound only by a contract for the amount of servicing oil target every

month.

Competitive Scenario:

As of now there are four major competitors to this business entity (BikeZone, Hinjewadi).

OEM DEALERSHIPS:

A new bike comes with at least one year of company warranty. This warranty also comes

with pre-decided number of free services (service vouchers). In order to be eligible for

availing the company warranty, the bike has to be serviced at specified intervals by a

company dealership only. This clause keeps the customers away from the multi brand

showrooms likeBikeZone.

For Example: Consider a bike with 6 years of lifetime which comes with OEM warranty of

1year. In this case the customer is bound to get his bike serviced at the company dealership

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only. And hence 16.66% of market share (lifetime is 100% market) goes straight to the OEM

dealerships. And it becomes difficult to attract the customers from OEM dealerships to

BikeZone.

ROAD SIDE MECHANICS:

Repairing bike does not require very hi-tech and costly instruments. A person having few

months of experience in repairing bike can start his own business with few basic tools on a

road-side.

As these road side mechanics need not to invest in facility and does not pay taxes (VAT, sales

tax, service tax etc.), they offer service at 5-10% discount compared to BikeZone. And as

customers from Hinjewadi village are highly price sensitive, they prefer going to road side

mechanics to save money. There are nearly 3-4 road side mechanics in Hinjewadi.

INDEPENDENT GARAGES:

These garages are mostly owned by ex employees of OEM dealerships. These people get

experience while working with OEMs, build contacts with suppliers of spare parts and poach

the mechanics of OEM dealerships.

These garages keep some inventory of spare parts, consumable like oil and grease and use the

open space in front of shop to repair/service the bikes. The USP of these garages is high up

time. They provide instant service. There are two independent garages in Hinjewadi.

SPURIOUS PART SELLERS:

Spurious parts are defined as locally manufactured or recycled and sold under brand names

(OEM, OSM and Alternate vendor), using third party intellectual property.

Again these spurious part sellers do not pay any VAT, sales tax. Because of this they are able

to offer the spare parts at huge discount (25-35%) to original parts. The price sensitive

customers prefer these spurious parts although they are of inferior quality.

Spurious parts pose much greater threat (competition) to the multi brand service centres like

BikeZone. Kindly refer to the graph below. (Reference IMaCS Study)

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SWOT ANALYSIS

Strengths

1. Servicing for all kinds of two wheelers

2. Brand name ofCastrol

3. Large target segment to get customers

from

Weakness

1. Employees in corporate being highest

among the customers, the repeat

customer from employees is hindered by

transfer / re-shifting of employees

2. The location of the enterprise as such is

an advantage, but since the service center

is located further away from the roadside,

visibility of the shop becomes almost Nil

and it necessitates use of bill boards to

make it visible for other passers-by.

Opportunities

1. Potential customers from corporate

2. Potential to increase number of bikes

serviced without any major

infrastructural and labour investments

3. Potential to tap into the market of fleet

owners

Threats

1. With the additional customers, the

working capital needed also increases.

The current level is close to four lacs per

month and there are no Bank credits that

are used.

2. Competitors (as explained in Competitive

scenario)

3. Perception of service provided as a

branded service (from Castrol) and hence

being costly

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Figures indicate

market size in Rs crores


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Marketing Mix:

PLACE

Location: The business enterprise is run in a central location in Hinjewadi chowk and

is an ideal spot for the business. It is at the intersection of the Phase I and Phase II of the

Hinjewadi MIDC. The traffic in this part of the city is increasingly high due to the large

number of corporate companies coming up in the region and having the service center at this

location is a prime advantage. It also provides opportunities for expanding the business

through sales promotional activities. More on these will be covered in the detailed marketing

strategy.

Coverage: The coverage of the business again depends on the customers coming in.As of now, most of the people come from the Hinjewadi village, the corporate employees

who have offices in the Phase I and Phase II. So, the ideal coverage is restricted to this.

Channels: The channel of selling, in our case a service provided, starts only after the

vehicle comes into the service station. The authorized spare parts are the ones used and the

oil used for all servicing done is from Castrol. After the in house servicing, the bike gets

delivered. There is no other channel for the business activity as such.

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PRODUCT AND PRICE

The service of two wheelers involves many different categorizations. The servicing is

done for all kinds of bikes and these are packaged too. The customers usually are explained

about these when they come for a servicing and then the particular package is provided.

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Apart from service offerings as a package, there is also individual servicing done like:

Bike Beautification Cleaning, glazing and wax application @ Rs. 150/-

Battery Maintenance @ Rs.40/-

Carburettor Maintenance @ Rs.80/-

Clutch Overhauling @ Rs.275/-

CVT Overhauling @ Rs.275/-

Disk Brake Overhaul @ Rs.275/-

Front Suspension @ Rs.300/-

Clutch wire replacement @ Rs.30/-

Accelerator Cable replacement @ Rs.40/-

Brake shoes Replacement @ Rs.50/-

Speedometer maintenance @ Rs.35/- etc.

As far as the service mix is concerned, it is in the category - Major Service with

accompanying minor goods. The minor goods include selling of merchandise from Castrol,

spare parts, etc. Quality is of most important for any service enterprise and the same applies

for a bike service center also. On these lines, it is ensured that the oil being used by Bike

Zone is only that of Castrol, which is known for its reliability. Design, Features, Brand Name,

Packaging, Sizes, services, warranties, returns

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They form the biggest chunk of availers of this service. They are not permanent customers as

many of them either get transferred to other cities frequently or drop out of the firm to join

some other firm which is not in this location.

2) Students of Colleges aroung SIC, I2IT, Indira College, etc.

They form the next biggest segment. There are some students who even after leaving their

college visit BikeZone for servicing their two-wheelers because of service loyalty which has

been built over time.

3) Villagers

The villagers living in this area are carrying out various small businesses in and around the

Hinjewadi Chowk. They also have servicing needs for their vehicles.

4) Fleet owners

Certain food joints in Hinjewadi own a fleet of two-wheelers who also have continuous

servicing requirements.

TARGETING

All the bike owners in the segment mentioned above is our target segment and our market

strategies are applicable to all.

POSITIONING

BikeZone has positioned itself as a quality service provider which charges its services at a

premium due to the quality offering. It will still continue with this positioning.

Keeping in mind the target customers, who will want to have a quality offering and who wish

to pay a premium for quality offered, this positioning is only to be continued further.

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MARKETING STRATEGY DETAILS

The proposed core marketing strategies have been derived from the service differentiators.

Service differentiators

Ordering Ease :

WHAT THEY DO:

As such placing the order to avail the service, is being done by the customer mostly

manually, and in certain cases on phone.

WHAT WE PROPOSE THEM TO DO:

It would be of utmost relevance for them to go online with respect to placing orders, as the

largest chunk of their customers belong to employees of firms in the IT Park. For this,

maintaining a website is advisable.

This will bear an expense of close to Rs.10000/- for creation and maintenance of the page.

It will have a yearly expense of Rs.4000/- for owning the webpage URL and a further

expense of close to 2000/- per month for information updates.

Major Advantages: Booking online

Providing updated information online

Along with the web pages, having a Facebook account for publicity is suggested. This is

specifically keeping in mind the potential customers who are tech savvy and spending most

of their time on computers / internet.

It would be of relevance for the owner to maintain a Facebook account and let customers

place order there. The promotion has to be accordingly changed where not the website, but

the Facebook account has to be highlighted.

2) Delivery :

WHAT THEY DO:

The firm has established a delivery radius of its own, within which free pickup / drop is done.

But, this does not cover all the potential firms from where customers can pour in.


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Rather than sticking to just customers who are working in Phase-1, the services can be

extended to customers of Phase-2 as well. This has the advantage of attracting corporate

employees, encouraging them to leave the bike for service in the morning and get the same in

the evening when they leave. This will especially work once the booking online system is

implemented.

3) Customer Consulting :

WHAT THEY DO:

Those who come under the target customers of the firm are employees of firms in the IT

Park. Most of them are in their early working days, aged in the age group of 21-35, who own

only two-wheelers. For them, their 2-wheeler is nothing less than their baby. So, it would also

be of relevance to apprise the customers of the condition of their vehicle and provide them

with detailed answers to whatever they ask.

For instance, customers need to be told that replacing their spark plug with a new one, would

cost them only Rs.70, but in the long run, it would lead to saving a lot of fuel consumption.This kind of consultancy would only help in increasing the customers loyalty towards the

service provider.


The customers who would possibly order the service online must be provided this

consultancy on phone, immediately after the vehicle is received by the service provider. If a

detailed consultancy has to be provided, the they must float a mail to the customer, for which

BikeZone must note the e-mail id of the customer while taking the order. Earlier, when the

orders used to be on phone, Bikezone would only do the servicing and not provide a detailed

analysis of what is good for them and what needs to be done.

Apart from the above core strategies, we propose several other strategies as under.

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1) Second hand bikes

There is a tremendous market opportunity in the area of Hinjewadi for second hand bikes. We

propose a lateral marketing strategy through this.

If original MRP of a bike = Rs.50000

Resale value = Rs.30000

Margin charged by BikeZone @ 2.5%= Rs.750

So, BikeZone would have to sell the bike at Rs.(30000+750)=Rs.30750

BikeZone can offer to renovate the bike, the cost of which would be charged over and

above this Rs.30750, the margin of which would also depend on the kind of renovation done.

BikeZone would also offer to perform the task of transfer of ownership. That would cost

them around Rs.250, so the selling price for the bike would now be around = Rs.

(30750+250)=Rs.31000.

Now while selling this, BikeZone would have to offer a 3-month free service offering. This is

in consonance with a 1-year free service provided on sale of new bikes. This would cost Bike

Zone around Rs.150 (sale price of this service is Rs.255). So, on a margin of Rs.750, if this

cost is incurred, then also a margin of Rs.(750-150)=Rs.600 would be achieved.

This is a lateral strategy because it is imperative that the customers who will buy this secondhand bike would take up the free servicing provided within a 3-month period and that would

be the chance for BikeZone to attract them with their expertise in quality servicing.

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2) Corporate Club

Castrol currently provides membership to specific customers to avail specialized servicing

facilities. As per this plan, a customer can get his bike serviced by experienced mechanics

using hi-tech equipment. He can watch his bike being serviced while he can relax in a

comfortable air-conditioned lounge area. Following are the highlights of this programme:

But, BikeZone at Hinjewadi doesnt follow this programme because he doesnt have a proper

place to build an air-conditioned lounge.

We recommend him to remove the condition of providing a AC relaxation area. He can

provide the service under this programme with the same discounts. We also recommend him

to target this programme only to customers of major IT firms in this area, possibly only

Infosys, Wipro and CTS(because they have the bulk potential customers) for the first six

months and based on the success of this programme , repeat it for other large firms in the next

period.

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3) Food joints providing delivery services

In Hinjewadi, Dominos Pizza and McDonalds are prime food delivery service providers.

McDonalds has in all 3 bikes and Dominos Pizza has in all 10 bikes in operation. BikeZone

needs to target them right away, provide them with the same set of facilities as provided in

the Club membership programme, but no membership fees needs to be paid.

4) Tie up with Corporates

Most of the corporate have tie up with consumable goods shops and eateries that help them in

increasing their customer base by offering a discount. The same can be used by BikeZone as

well. A discount of 10% will incur an expense equivalent to the royalty that is currently being

paid to Castrol. Once the conversion to BikePoint happens, this royalty payment does not

exist and can be used for offering the corporate discount.

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REFERENCES

1) CastrolBikeZone owners Mr. Arun and Mr. Buchade

Phone: 020-22934400

9011084822

9011084823

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Final Marketing Report

Documents

Transcript of Final Marketing Report