Strategic
Marketing
Plan
Capilano University
BMKT 161
June 18th 2013
Jaclyn Mansfield Luis Rincon
Garza. Camila Palma and
Vincent Lau
2
Index
1. Executive Summary ___________________________________________3
2. Strategic Focus and Plan ______________________________________3
A. Mission Statement ____________________________________________3
B. Corporate Goals_______________________________________________ 3
C. Core Competency and Sustainable
Competitive Analysis_______________________________________3-4
3. Situation Analysis____________________________________________________5
A. SWOT___________________________________________________5
B. Growth Strategies__________________________________________6
4. Marketing and Product Objectives_______________________________________6-7
A. Objectives________________________________________________6
B. Target Market_____________________________________________7
C. Points of Difference________________________________________8
D. Positioning_______________________________________________8
5. Marketing Program___________________________________________________8-14
A. Product Strategy___________________________________________8
i.
Detailed Description of Product
ii.
Branding
B. Pricing Strategy___________________________________________9-11
i.
Pricing Factors Considered
ii.
Pricing Objective
iii.
Any Special Adjustments
iv.
Quarterly Target Revenue
C. Distribution Strategy_______________________________________12
i.
Channels and Factors
ii.
Specific Location and Rationale
D. Promotional Strategy______________________________________12-14
i.
IMC objectives
ii.
Identify Target Audience
iii.
Allocate Budget
iv.
Design Promotional Program
v.
Provide Rationale
6. Budget_____________________________________________________________14-15
A. Year 1 Sales Projection______________________________________14
B. Operational Budget_________________________________________14-15
C. Promotional Budget________________________________________ 15
7. Evaluation and Control________________________________________________16
8. Appendix A_________________________________________________________17
Appendix B_________________________________________________________18
Appendix C _________________________________________________________19-23
Appendix D_________________________________________________________ 24
Appendix E_________________________________________________________ 25
9. References__________________________________________________________26
3
1. Executive Summary
Car2Go, a subsidiary of Daimler Group, aims to address the issues that modern North American
cities face by providing a car sharing organization with 443 cars and over 23,000 members in
Vancouver alone. The marketing plan that was developed for the company intends to make the
company grow by using the product development strategy, creating a bike sharing organization
to complement the current product offerings. The company believes on maintaining the quality
of life of its customers, therefore the new product will be offered as a bundle with only one
membership needed to use both services. This strategic plan will focus on developing awareness
among customers and also build long term brand loyalty with car2go products. This strategy will
be implemented by using offline and online advertising, personal selling and event marketing
and sponsorships approaches.
2. Strategic Focus and Plan
A. Mission Statement: To address the issues that modern North American cities face, including
alleviating congestion, reducing emissions, and maintaining quality of life. (From information
received from Corporate Communications Manager, car2go North America)
B. Corporate Goals: Car2Go currently has 23000 members in the Metro Vancouver area. One
goal is to increase membership numbers by 8,137 in the first year, (see 5b target market
calculations/quarterly revenue calculations). The new product goal is to be the number one
option in the market used by customers. Reach the $500,000 mark in revenue over the first 12
months.
4
C. Core Competency and Sustainable Competitive Advantage: The following information
obtained directly from Car2Go Communication Manager outlines the three competitive
advantages that set Car2Go apart from competitors:
By the Minute: Members pay only for the time they use the car, by the minute, with discounted
rates for hourly and daily use. There is no minimum amount of time that a car can be used —
whether a member needs a car for a few minutes or a few hours — members simply get in and
drive, for as long as they want without a mandatory return time or location. Parking,
fuel/recharging, maintenance and insurance are included at no additional cost, and there are no
annual or monthly fees.
On Demand: Members can use the first available car2go they find, via a smart phone app, the
car2go vehicle finder at car2go.com, by calling the customer call center, or by simply locating an
available car2go on the street. There is no need to make a reservation in advance because
members have unrestricted and unlimited access to car2go vehicles 24 hours a day, seven days a
week.
Free Floating: Members can pick up and drop off any car2go anywhere within the car2go Home
Area — in any legal on-street parking space, including metered, non-metered and residential
neighborhoods parking spaces. Members do not need to drive the car back to its original location
or commit to a predetermined amount of time. They can simply drive the car for as long as they
need it, park the car at their individual destination, end the rental by swiping the card on the
windshield reader, and instantly the car becomes available for the next member to use.
5
3. Situation Analysis
A. SWOT
For the complete SWOT analysis table, see appendix A
Strengths
Technological:
-Produces zero local gas emissions
-GPS available to all car
-Services can be accessed online
Weaknesses
Operation area:
-Not enough parking spots available for customers
Vehicle:
-Only one type of car offered
-Can only fit two people at the same time|
Opportunities
-Vancouver project on being Greenest city for 2020
-Raises environmental awareness from the media
Threats:
-Nonexistent electric vehicle target laws that align with economic objectives on BC
-Competitor offer more vehicles
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B. Growth Strategies
a) Market Penetration: A way in which Car2Go can expand using market penetration is to offer
discounts and special introduction rates in order to attract more customers. The issue with this
strategy is that it will not generate the desired revenue.
b) Product Development: Car2Go could follow product development by introducing a new
service such as a bike co-op in Metro Vancouver which could be bundled with the current car
sharing network membership in order.
c) Market Development: Market development for Car2Go could involve expanding into other
cities in British Columbia. This strategy is not recommended because of small populations in
other cities, and less dense populations.
d) Diversification: Not applicable.
The strategy chosen is product development and the plan is to create a bike sharing program
within Metro Vancouver. This strategy is in line with Car2Go’s mission statement of alleviating
congestion, reducing emissions, and maintaining quality of life. At the same time this strategy
meets the new objectives proposed by the company.
4. Marketing and Product Objectives
A. Objectives: To introduce a new product (bike2go) bike sharing to the already
developed market of Metro Vancouver before the City of Vancouver or other possible
competitors to gain the first mover advantage. At the same time one of the marketing goals is to
have the number one market share for the future in this growing industry and to create long term
brand loyalty with the customers.
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B. Target Market
Geographic: This product will be tested in the smaller market of downtown Vancouver which
has a current population of 54,690 people with the population of West End that has 44,543
people. (See appendix B)
If this is successful and meets the marketing goals and objectives, the bike sharing will expand
to other areas around Metro Vancouver, focusing on densely populated urban areas, with flatter
areas being preferable. A Translink document shows that one of the major issues facing biking in
British Columbia are hilly regions, so Car2Go’s bike sharing should focus on flatter areas.
Psychographic: The psychographic groups that the bike sharing will focus on are Strivers,
Experiencers, and Achievers. At the same time the company is going to focus on people with an
active lifestyle that considers biking as an alternative for transportation.
Demographics:
Aged 18-35, which is similar to the Car2Go current demographic
Single/Married without kids
Educated
Students
Focus on:
According to research conducted on cycling in Vancouver by Translink, these trends in the
population exist:
Infrequent cyclists (9%), cycle at least once per year
Occasional cyclists (13%), cycle one to three times per month.
Potential cyclists (19%), who do not currently cycle but are interested in taking up cycling.
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C. Points of Difference: The new product will be promoted as a bundle; the car and
bike are included in the membership. For example, our customers can bike one way and use the
car the on the other. The bike is also going to charge per minute, whereas competition coming in
is charging large fee per month. Accessibility with apps and other technology, which make it
easier to find and book a bike.
D. Positioning: The new product will be positioned as leader in the market. By offering
car and bike at the same time will create an impact on the existing and new customers by
referring to our brand the most convenient one in the industry. The price factor will also support
the product image by charging per minute.
5. Marketing Program
A. Product Strategy
i.
Detailed Description of Product
The product will be a hybrid bike which is suitable for both use on the road and on mild trails.
The model selected will be the Raleigh Bicycles Detour 2.5 that has a cost of $350. This bike
features and OS steel hybrid frame, an OS steel threaded fork, Weinmann CN520 rims, and a
Shimano 21 speed drivetrain. Raleigh manufactures its bikes from Pacific Cycles, a Taiwan
bicycle manufacturing company based in Hein Wu, Taiwan. Pacific Cycles is not only known as
a bicycle factory but as an international designer workshop which provides R&D facilities for
over 40 renowned brands worldwide and a factory that specializes in quality, high end products
for niche markets.
In Vancouver, Car2Go currently has 23,000 members and 443 cars. This means that the ratio of
members to cars is 51.92 members to car. With this product, Car2go should focus on keeping
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the same ratio of members to cars from Car2Go and apply that to bikes. With objectives of
signing up 8,137 members in the first year (See 5b), this means that Car2Go needs to purchase
approximately 156 bicycles. Without any fleet discount, this would be a cost to Car2go of:
156 bicycles x $350/bicycle = $54,600
B. Pricing Strategy
i. Pricing Factors Considered
In pricing the bike rentals, we need to consider several factors including:
1) The Competition’s Pricing:
Competitor
Price/hr
Price/all day
Stanley Park Cycle
4.75
20.00
for non electric bikes
8 hours MAX
10.95
43.81
for non electric bikes
between open and
Bicycle Sports Pacific
closing
Bayshore Rentals
6.00 for non electric
23.80
bikes
8 hours MAX
We need to ensure that it will be more cost effective for Car2Go members to use the bike share
program than renting bikes from the many rental shops around downtown Vancouver. However,
the ease of picking up a bicycle whenever it is needed without having to go through the process
of renting from a shop every time can allow the price to be a small amount higher than some
competitors.
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2) Direct Competition from government’s Bike Sharing initiative.
According to the city of Vancouver’s transportation director Jerry Dobrovolny, The city of
Vancouver is planning on implementing a bike sharing initiative by Spring 2013 with 1500 bikes
and 125 stations in Downtown Vancouver (Cole, 2012).
This bike sharing initiative will be priced as follows:
Time
Price
First 30 minutes
free
30-60 minutes
$1.50
61-90 minutes
$4.00
Every subsequent 30 minutes
$8.00/30 minutes additional
The pricing scheme of the city of Vancouver is aimed towards short term bike rentals, since the
price increases dramatically after 90 minutes of bicycling.
3)Cost of renting car with Car2Go
The bike rental per minute fee must be cheaper than renting a car with Car2Go, otherwise
members would be more inclined to rent a car. The current rate to rent a car with Car2Go is
$0.38/minute.
ii. Pricing Objectives
1) Purchasing price plus maintenance cost: The bikes will be purchased for $350 and the
expected maintenance cost will be $58 in a year.
2) Sales Revenue: The price needs to be high enough to reach the $500,000 mark for the first
year in operation
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3) Social Responsibility: The price needs to be moderate to go in line with the company’s
mission about caring about the quality of life of people.
-iv. Quarterly Revenues
We will increase the membership fee by 15% to $40.25/year.
The usage fee will be a flat rate of $0.10/minute. This is equivalent to $6.00/hour. This is
competitive with bike rental stores, and is more long rental friendly than the rates with the
proposed Vancouver bike sharing initiative.
With our target market of the Translink identified Occasional, Infrequent, and potential cyclists,
we can calculate the following quarterly revenues:
To see calculations determining quarterly revenues, see Appendix C
First Quarter:
Total Expected First Quarter Revenue: $267,094.25
Second Quarter:
Total Expected Second Quarter Revenue: $133,522.5
Third Quarter:
Total Expected Third Quarter Revenue: $66,761.25
Fourth Quarter:
Total Expected Fourth Quarter Revenue: $66,761.25
Total Expected Revenue For First 12 Months: $534,139.25
C. Distribution (Place) Strategy
The distribution for the business product will consist only in a three way transaction: From the
manufacturer to bike2go and from bike2go to the customer.
12
Bike2go will use in part multichannel marketing approach by letting the online users to book the
bike and by being able to tracking it. At the same time there will be a physical place and that is
the locations where the customer can pick up the bicycle and return it. The channel design
considerations that were looked at was that Car2go undertakes an approach of picking up the car
from any location and bike2go will already have established points. We also looked at where it
will be best to serve the needs of the target market and that is why the small downtown and west
area were chosen.
D. Promotional Strategy
1) IMC objectives:
The first objective of the integrated marketing communications is promoting brand awareness of
Car2Go in order to let the target market more aware of the brand and what the organization
offers.
Within the first six months, Car2Go aims to increase brand awareness by 15%. This will be
measured through surveying people in the target market area.
The second objective of the integrated marketing communications is to promote brand loyalty.
Within the first six months, Car2Go aims to increase revenue by 10% of the existing customer
base, and increase return customers by 10% in the same time period.
The third objective of the integrated marketing communications is to increase sales by the
amount listed in section 5d.
2)Target Audience: The target audience is infrequent cyclists, occasional cyclists, and potential
cyclists who live in downtown Vancouver and the West End. See appendix
13
3)Allocate Budget and Design Promotional Program:
Type
Time Period
Price
Advertising:
8 weeks
$5,700
8 weeks
$14,000
Advertising:
20 weeks
$11,192
Metro News Vancouver 1/3 page full colour ad – pricing
(2time/week)
Canada Line Backlit Station Posters (at 5 stations) – see
pricing information in appendix D image
Advertising:
Translink Downtown Vancouver Tradtional King (10 buses) –
see pricing information in appendix E image
information from
http://longislandmarketingblog.com/advertise-in-metronewspaper/
Event Marketing And Sponsorship:
N/A
$3,000
N/A
$3000
2 weeks
$5000
1 month
$8000
T-Shirts: We will give out free tshirts to people in Downtown
Vancouver with the Car2Go and Bike2Go names. This is a
cost effective way of getting brand awareness to increase. We
will have a budget of $3,000 for the tshirts.
Advertising:
Fliers: Car2Go will create fliers to hand out at events and on
the street with information about the new product. We will
have a budget of $3000 for the fliers
Personal Selling:
Have a team of salespeople in Downtown Vancouver signing
up people who pass by on the street.
Advertising:
Special promotions. These special promotions include hiding
event tickets around Vancouver and providing clues on social
media pages in order to get people to view websites.
14
5) Rationale
The budget of $50,000 for one year of promotions was found to be a small amount, so this
strategy decided to opt for creative and cheap promotions. This includes generating interest in
the organization by offering free t-shirts to people with the Car2Go and Bike2Go logos, and
special promotions to encourage people to visit social media sites already established such as
facebook and twitter. Although initially media such as television and radio advertising were
considered, through research it was determined that due to financial restraints, this is not a viable
option.
6. Budget
A. Year 1 Sales Projection
(From 5b):
The Year 1 Sales Projection from this expansion is: $973,225.25
B. Operational Budget for Incremental, Growth Related Business
Bike Cost:
From 5a, the cost of purchasing the bikes will be: $54,600
Station Cost:
According to Capital Bikeshare in Virginia, the costs associated with building stations are as
follows:
Station Type
Cost
Station with 11
$40,209
docks
15
Station with 15
$48,387
docks
Station with 19
$56,565
docks
With 156 bikes, the stations required will be
5 x 11 docks (in less popular areas) = $201,045
5x 15 docks (in medium popular areas) = $241,935
2x 19 docks (in most popular areas) = $113,130
This gives a total of 168 docks with a total cost of $556,110
Salaries
Since this is an expansion of the already existing Car2Go, it is recommended that two jobs be
created to work solely on the Bike2Go expansion, with salaries of :
2x $75,000/year = $150,000
Total Budget for year 1: $760,710
Total Revenue for Year 1: $973,225.25
Total Profit for Year 1: $ 212,515.25
Promotional Budget
See section 5d. The promotional budget uses all $50,000 of the budget given for the first year. It
focuses on advertising and personal selling and it excludes television and radio. It also takes
advantage of already existing Facebook page of car2go to promote bike2go and a twitter account
will be created for free.
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7. Evaluation and Control
In order to evaluate whether the strategic marketing plan is generating the desired revenue,
awareness and attracting customer’s two strategies are going to be implemented in order to
evaluate it:
1) A lateral dashboard focused on the marketing section will be developed in order to track
gross views which will include bike2go website, YouTube and Facebook page, and connections
which refers to subscribers and fans and their respective comments. By using this tool the
company will be able to measure and keep track of the marketing objectives such as brand
loyalty among customers and market share. (Cormier, 2012)
2) The company will generate monthly financial reports in order to obtain an idea whether the
revenue goals per quarter are going to be achieved, and in case they are not to start acting on the
deviations.
17
Appendix A
Strengths

Weaknesses

Technological

Produces zero local gas emissions

Monitored by EcoSore App a tool
Operating area
 It is only offered in Vancouver
and North Vancouver.
 Not enough parking spots
developed by which helps to determine
available for customers
the environmental impact

Services can be accessed online, mobile,
application.


GPS available in all cars.
Vehicle
 Only offers one type of car
 Lack of storage space
Flexibility
 Can only fit two people at a

Convenient for one way trip

Charge by minute

No monthly payments

Park anywhere in service area
time.

Service
a. Customer can only be booked
within thirty minutes prior the
trip
Opportunities
Threats



Vancouver’s project on being Greenest
or regulations that align with
City in the world for 2020.
environmental and economic objectives
Raised environmental awareness from
on BC.
the media


Other modes of transportation
British Columbia government
available: Walking, public transit, and
initiatives and funding to provide more
cycling
electric vehicles and electric chargers.

Nonexistent electric vehicle target laws

Competitors offer more vehicle
Vancouver’s second highest fuel tax in
options: Zipcar (8), modo (4),Rental
North America increases car sharing
Car (10+)
services
18
Appendix B
According to information from the Vancity Buzz in 2011, the populations from zone 1 and
zone 2 from the map below are:
Population of Downtown Vancouver: 54,690
Population of West End: 44,543
Total market population: 54,690 + 44,543 = 99,233
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Appendix C
First Quarter:
Target
Total in Zone 1 and Zone 2
10% of Target
Infrequent Cyclists (9 % of
8,931
893
12,900
1,290
18,854
1,886
40,685
4,069
population)
Occasional Cyclists (13% of
population)
Potential Cyclists (19% of
population)
Total:
The goal for the first quarter is to sign up 4,069 new members. This will cause an increase
in revenue based on membership fees alone of
$40.25 x 4,069 = $163,777.25
Target
Number of
Approximate
Total Usage
Members
Usage/person for 3
hours
months
Infrequent Cyclists (9
893
1.5 hrs
1,339.5
1290
5 hrs
6,450
1,886
5 hrs
9,430
4,069
11.5
17,219.5
% of population)
Occasional Cyclists
(13% of population)
Potential Cyclists
(19% of population)
Total:
Revenue generated by usage fees in the first quarter will be $0.10x (17219.5 hours x 60
minutes/hour) = $103,317
20
Total Expected First Quarter Revenue: $267,094.25
Second Quarter:
The goal for the second quarter is to sign up an additional 5% of our target market (which
will be 15% total including the first quarter).
Target
Total in Zone 1 and Zone 2
5% of Target
Infrequent Cyclists (9 % of
8,931
446
12,900
645
18,854
943
40,685
2,034
population)
Occasional Cyclists (13% of
population)
Potential Cyclists (19% of
population)
Total:
The goal for the second quarter is to sign up 2,034 new members. This will cause an
increase in revenue based on membership fees alone of $40.25 x 2,034 = $81,868.5
Target
Number of
Approximate
Total Usage
Members
Usage/person for 3
hours
months
Infrequent Cyclists (9
446
1.5 hrs
669
645
5 hrs
3,225
943
5 hrs
4,715
2,034
11.5
8,609
% of population)
Occasional Cyclists
(13% of population)
Potential Cyclists
(19% of population)
Total:
21
Revenue generated by usage fees in the second quarter will be $0.10 x (8,609 hours x 60
minutes/hours) + usage fees of customers signed up in first quarter ($103,317) = $154,971
Total Expected Second Quarter Revenue: $236,839.50
Third Quarter:
The goal for the third quarter is to sign up an additional 2.5% of our target market (which
will be 17.5% total including the first and second quarter).
Target
Total in Zone 1 and Zone 2
2.5% of Target
Infrequent Cyclists (9 % of
8,931
223
12,900
323
18,854
471
40,685
1,017
population)
Occasional Cyclists (13% of
population)
Potential Cyclists (19% of
population)
Total:
The goal for the third quarter is to sign up 1,017 new members. This will cause an increase
in revenue based on membership fees alone of
$40.25 x 1,017 = $40,934.25
Target
Number of
Approximate
Total Usage
Members
Usage/person for 3
hours
months
Infrequent Cyclists (9
223
1.5 hrs
334.50
323
5 hrs
1,615
% of population)
Occasional Cyclists
(13% of population)
22
Potential Cyclists
471
5 hrs
2,355
1,017
11.5
4,304.50
(19% of population)
Total:
Revenue generated by usage fees in the third quarter will be
$0.10 x (4,304.5 hours x 60 minutes/hour) + usage fees of customers signed up in first and
second quarters= $180,798
Total Expected Third Quarter Revenue: $221,732.25
Fourth Quarter:
The goal for the fourth quarter is to sign up an additional 2.5% of our target market (which
will be 20% total including the three previous quarters).
Target
Total in Zone 1 and Zone 2
2.5% of Target
Infrequent Cyclists (9 % of
8,931
223
12,900
323
18,854
471
40,685
1,017
population)
Occasional Cyclists (13% of
population)
Potential Cyclists (19% of
population)
Total:
The goal for the fourth quarter is to sign up 1,017 new members. This will cause an
increase in revenue based on membership fees alone of
$40.25 x 1,017 = $40,934.25
Target
Number of
Approximate
Total Usage
23
Members
Usage/person for 3
hours
months
Infrequent Cyclists (9
223
1.5 hrs
334.50
323
5 hrs
1,615
471
5 hrs
2,355
1,017
11.5
4,304.50
% of population)
Occasional Cyclists
(13% of population)
Potential Cyclists
(19% of population)
Total:
Revenue generated by usage fees in the fourth quarter will be
$0.10 x (4,304.5 hours x 60 minutes/hour) +usage fees of members signed up in first three
quarters= $206,625
Total Expected Fourth Quarter Revenue: $247,559.25
Total Expected Revenue For First 12 Months: $973,225.25
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Appendix D
25
Appendix E
26
Works Cited
Bikes and Rates. (2013). Retrieved 06 10, 2013, from Spokes Bicycle Rentals:
http://www.spokesbicyclerentals.com/bikes-and-rates/
BIZMAP. (2009). Downtown Vancouver (DVBIA) Neighbourhood Profile. Retrieved 06 10,
2013, from Vancouver Economic:
http://www.vancouvereconomic.com/userfiles/downtown-neighbourhood.pdf
Cole, Y. (2012, June 13). Vancouver Public Bike-Share System Expected To Launch in Spring
2013. Retrieved June 9, 2013, from Georgia Straight:
http://www.straight.com/news/vancouver-public-bike-share-system-expected-launchspring-2013
Cormier, J. (2012, 05 31). The Truth About Social Media Measurement & Marketing
Dashboards. Retrieved 06 10, 2013, from Search Engine Watch:
http://searchenginewatch.com/article/2181104/The-Truth-About-Social-MediaMeasurement-Marketing-Dashboards
Kurtzleben, D. (2012, 04 17). Bike Sharing Systems Aren't Trying to Peddle for Profit.
Retrieved 06 10, 2013, from USNews:
http://www.usnews.com/news/articles/2012/04/17/bike-sharing-systems-arent-tryingto-peddle-for-profit
Lamar Transit Advertising. (2013, 04 25). Vancouver,BC-Rates. Retrieved 06 10, 2013, from
Lamar: http://links.lamar.com/2013TransitRates/2013_BC_Vancouver_CanadaLine.pdf
Rental Bikes. (2009). Retrieved 06 10, 2013, from Stanley Park Cycle:
http://www.stanleyparkcycle.com/rental_bikes.html
The Public Relations and Marketing Group. (2012, 09 25). Advertise in Metro Newspaper.
Retrieved 06 10, 2013, from PRMG: http://longislandmarketingblog.com/advertise-inmetro-newspaper/
Translink. (2011). Cycling For Everyone - A Regional Cycling Strategy For Metro Vancouver.
Vancouver.
Vancity Buzz. (2012, 05 07). Vancouver Neighbourhood Population Census 2011. Retrieved
06 10, 2013, from Vancity Buzz: http://www.vancitybuzz.com/2012/05/vancouverneighbourhood-population-census-2011/
27
In this group project, all four members contributed evenly to the marketing plan. We met
twice during every week and every Sunday for 3 hours each time to work on the project as
a group.
It is hard to say which group member worked on which part of the project, because most of
the work was done in a group. Individual work was done on a couple parts of the project
including the quarterly revenues (Camila and Jaclyn), the powerpoint (Vincent), and the
formatting and final touches (Luis). Overall, everyone in the group was satisfied with all
other group members.