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Coastal Matrix – Environmental Analysis of Carolina Electric Boats
November 9th 2009
oastal
Team 9:
Brian Eber
Walter Gray
Zora Mravkova
Mike Ost
M
atrix
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Table of Contents:
1: Title
2: Table of Contents
3-6: Main Industry Features
6-9: Forces of Competition
9-10: Drivers of Change
10-11: Factors for successful competition
11: Industry Attractiveness
11-13: Competitor Analysis
14-15: Buyer/Customer Analysis
15-16: Client Analysis
16-18: Marketing Mix Audit
19: Positioning Map 1: Fishability vs. Durability
20: Positioning Map 2: Stability vs. Affordability
21: References
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Main Industry Features
Market Size and Growth Rate
The US boat building industry includes roughly 1,000 companies with combined annual
revenues of about $10 billion. Major companies include Brunswick, Genmar, and
Yamaha Motor Corporation, USA. The industry is concentrated: the largest 50
companies hold about 75 percent of the market share. Companies in the industry make
boats intended primarily for consumers' personal use.
The recreational Marine Industry has been under unprecedented pressure; the majority
of which began in late 2005. Initially, new boat sale declines were most pronounced in
Florida and California, two of the key boating states, but over time weakness has
spread to other markets across the country as the national economic situation
deteriorated. Boat sales have been hampered by consumers cutting back on
discretionary spending. The dramatic changes in the boat market in recent years were
not only in terms of market performance but also in the use of composite materials and
processing technologies. Understanding these changes would allow the manufacturers
to enhance their company's position in this market.
Industry data shows that more than 86% of boat show attendees were in the market to
buy a boat or currently owned a boat when they visited the show. Almost all recent
buyers have been to a boat show and 40% of new boat buyers either ordered their boat
at a show or bought it from a dealer they spoke with at a show.
The global demand for recreational boats is projected to grow at a 7% annual rate,
reaching $37.1 billion in annual sales by 2011. (marketresearch.com) Recreational
boats include inboard boats, outboard boats, stern drive boats, personal watercrafts,
sail boats and others. While boat sales continue to decline this year, the National
Marine Manufacturers Association has estimated the number of adults who went
boating last year was up almost 6% from the year before. Some research also shows
that outboard boats are the preferred type of boats in use.
Experts in the industry suggest that due to the strong linkage between the home-price
trends and the performance of the boat market; boat manufacturers should consider this
trend when planning their business. (BoatingIndustry.com) Data shows that the cities
least impacted by the declining real estate market are the ones where the boat markets
is currently the strongest. Marketing should be focused on those opportunity markets in
the short term and should be ready to shift focus if and when a rebound occurs in the
markets that were hardest hit.
Demand depends on growth in consumer income. Boat purchases are discretionary and
are dependent on consumer confidence in the economy and job market. The areas
significantly affected by the recession have the least boat purchases. The profitability of
individual companies is linked to manufacturing efficiencies. Large companies have
advantages in marketing and distribution. They have already established their name in
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the boating market and customers know where to find their products. Large companies
usually have experienced and skilled staff and have an established network of suppliers
and distributors.
The recreational boating industry represents a highly attractive opportunity for OEMs
(Original Equipment Manufacturers), material suppliers, engine suppliers and part
suppliers due to the size of the market and its prospects for further expansion.
On a global basis, North America represents the largest region in the world in total
recreational boat production but its growth in recent years was at most modest.
(marketresearch.com) Research reveals that Europe saw the highest growth rate during
the last 9 years as European-based boat makers were strategically more aggressive
and subsequently increased their market share significantly compared to
2000.(marketresearch.com) Growth was also driven by huge demand for luxury
cruisers and mega yachts outside of the United States. The Europe and Asia Pacific
region will provide the future growth for the boat market as sales will be bolstered by
continued economic growth in these regions.
The global demand for recreational boats doubled during the past decade. The industry
experts predict that for the next decade the Chinese recreational boat industry is going
to be the next booming consumer industry after real estate and housing. In terms of unit
shipment, North America is still the largest segment.
Peter Houseworth, Director of Client Services at Info-Link Technologies, a marine
market research firm and a ReelBoating.com member prepared the chart below
showing a more in-depth look at the current dislocation in the new boat market which
includes both recreational and non-recreational boats. It is expected that it will provide
an advanced measure of when the current inventory situation will begin to improve.
In terms of new boat sales, the left-hand axis plots the percentage change in unit sales
(based on a three-month moving average) for all Info-Link reporting states. The righthand axis plots the average days in inventory for vessels that were retailed during that
period. The average days in inventory is calculated based on when the boat was built
and when it was retailed to the end consumer.
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Market dynamics can vary substantially for individual boat brands, boat types and
market segments. A sustained return to higher new boat sales levels would require
improved consumer confidence as well as improved access to both wholesale and retail
credit.
Position in the Life Cycle
In comparison to the rest of the boating industry, this sector is relatively young and still
in the growth stages. This means that most of the competition for Carolina Electric
Boats are facing the same challenges and are approximately the same size. All electric
boat brands must first educate the customer on their product and then on the
advantages of their individual boat. The buyer must first decide to purchase an electric
boat before deciding which model best fits their needs. Having a product in such an
early stage in its life cycle requires all manufacturers to help the customer understand
the electric boat product.
While the recreational new boat sales were declining in the past years following the
decline in the housing market, the electric fishing boat segment in $1200 to $5000
range is still in the introduction phase of the product life cycle. This stage is usually
characterized with product line financial losses and weak competition. Revenues are
quickly eaten by continued product development, marketing and manufacturing costs.
This segment is still very new and fragmented and offers opportunities for new and
unique products. The marketing challenge in the start-up phase is to create product
awareness and get people to try the product. To achieve this the entrepreneurs will
have to find ways to make their offerings visible and deliver the message of the valuable
features of the boats to the right customers.
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Pace of Technological Change
There is no high technology in the manufacturing process; they simply apply the
technology in a unique way. There target segment is not those looking for high tech
usually high price latest and greatest technology. Carolina Electric boat is also targeting
a segment where there is not currently a lot of competition. It is using inexpensive eco
friendly materials which can be provided by different vendors. These factors position the
company for success in the long run once the customers are made aware of the product
durability and versatility.
Forces of Competition
Barriers to Entry and New Entrants:
The boating industry has numerous deterrents that dissuade new entrants competing
for market share. Boat manufacturing is an expensive endeavor that requires high initial
capital expenditures making it extremely tough for potential entrants with limited
resources. Existing firms have the advantage of economies of scale. Current boat
manufactures reap the benefits of economies of scale because they already have
manufacturing facilities established, distribution channels in place and have established
a brand reputation that carries significant weight when buyers are shopping. The new
firms must provide a superior product at a competitive price while building a reputable
name. Existing firms that have loyal customers are at an advantage because the
boating industry is a high involvement purchase which means that customers are more
likely to purchase familiar goods rather than the riskier lesser known good. Although
buyers may not incur switching costs when purchasing a new boat, the extremely high
brand loyalty keeps buyers purchasing the brand they are most familiar with. The
unfamiliarity can be partly overcome through a successful marketing and PR campaign;
however this takes time and considerable financial resources. Another factor that
causes this industry to be cost prohibitive is that technology, such as that of the boat
hull, is mostly proprietary information. If a firm wants to create their own boat or own
brand, it is necessary to create unique technology that differentiates their product from
the competition and doesn’t infringe on current patents.
Distribution channels are another barrier to entry. While this is not a primary barrier to
the industry, the shipping costs for a boat is substantial enough to either dilute profits or
add costs to the customers’ price and/or the manufacturers’ cost. When shipping or
delivery costs are added to the final bill customers will carefully consider their options
making sure they do not pay these fees if viable alternatives are available with less
expensive or no shipping. Existing firms that have established methods of distribution
are at an advantage because these costs are less significant to the manufacturer due to
economies of scale. Also, economies of scale will allow existing firms to purchase
supplies at a discount, offer a more attractive warranty, and compete on price if
necessary
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New entrants are unlikely to be a threat for the already established manufacturers. An
exception to this is when they target a market segment in which the existing products
are not as unique, high quality and competitive in price. A new entrant to the
recreational fishing boat industry segment would be a threat to the Carolina Electric
Boat product if they offer similar high quality fracture resistant trolling motor boat at a
cheaper price and through already familiar distribution channels to the consumers. A
large manufacture with established distribution channels, strong supply chain,
experienced workforce and efficient manufacturing process could pose a significant
threat if they choose to enter this market. Entering the fishing boat market segment
would not require as large of an investment when compared to the boating industry in
general and customers would not have very high switching costs. At present there isn’t
intense rivalry in this recreational boating segment and retaliation from existing
manufacturers is not expected.
Power of Buyers
The global economic crisis, the declining sales and revenues in the boating industry in
general gives more negotiating leverage to the buyers most of whom are price sensitive
and can pressure price reductions. The buyers have different powers in different
segments but in general there are fewer buyers and as a result the ones that are willing
to buy in these tough economic times are looking for more value in terms of price in
relation to quality products and services.
Carolina Electric Boat sees their customers among the recreational fishermen between
35 and 55 years old which can afford a high quality seamless fracture resistant boat
which is user friendly and can be transported easily.
Manufacturers who can provide differentiated quality products at a competitive price
usually do not have problems attracting buyers. The more expensive the boat is; the
more likely the buyers will be shopping around to make sure they are getting what they
want at a fair price. Highly profitable customers who are not strapped for cash are
generally less price sensitive.
Power of Suppliers
Companies depend on a wide range of suppliers for input. The suppliers are powerful if
they do not depend heavily on the industry for its revenues or if they serve many
industries and can play their customers to extract maximum profits. When switching
costs are high, industry participants find it very hard to negotiate with their suppliers.
Carolina Electric Boat is using recycled material for the hull. It is not expensive and can
be provided by different suppliers. The motors can also be provided potentially by other
companies. When the suppliers do not offer products that are differentiated they are not
in a powerful position.
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Threat of Substitutes
In the wake of the economic slowdown and global recession the recreational boating
industry is in danger of being substituted with cheaper outdoor sports like hiking,
kayaking, fishing, camping, tennis and golf. This is especially true for the more
expensive and requiring more maintenance type of boats.
The cheaper, easier to use and operate fishing boats are becoming more appealing
when financing is virtually nonexistent for luxury items like yachts and large boats. Small
boat manufacturing companies can compete by specializing in niche markets. Carolina
Electric Boat is manufacturing products for the recreational boat market in the segment
between $1200 and $5500 where there is not much competition. They are offering
unique products with patented technology that is high quality and will instantly connect
with the fishermen.
The graph below illustrates the percentage of people spending their free time in the
different types of competing outdoor activities.
According to the Market Data Book 2009 on Boating Industry boating ranks 10 th for
recreational participation in 2008. In general recreational boat purchases are
discretional and in hard economic times people can easily substitute an expensive
outdoor activity with a cheaper one without incurring any switching costs.
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Degree of Rivalry
Manufacturing costs, brand loyalty, distribution, sales chain, and price wars are all
significant barriers to entry that a new entrant must overcome. For a new manufacturer
to enter, it would be ideal to serve a niche sector of the market. This would allow them
to eliminate some of the barriers and compete with fewer firms that concentrate on their
area. Carolina Electric Boats is a prime example of this strategy. Boat companies like
Triton, Ranger, Regulator, Boston Whaler, and Carolina Skiff are all competing for
recreational fishermen; however the buyer of a Twin Troller X10 is not the same buyer
as a buyer looking for an inshore Triton bay boat or a Ranger bass boat. These are two
different sectors of the fishing boat industry. The degree of rivalry is extremely high
among boat manufactures in general but the degree of rivalry among electric fishing
boats, similar to the Twin Troller, is not as significant. Part of the reason rivalry in the
electric fishing boat sector is not as significant as other sectors of the boating industry is
because this segment of the boating industry is not yet well developed and in its
infancy. While many boat manufactures have experienced a significant decrease in
sales activity over the last 24 months, the more efficient and less expensive electric
boat has fared relatively well. In addition to the cost savings and eco-friendly design,
the electric boat sector is not saturated with competition.
Drivers of Change in the Competitive Conditions
In today’s flat world, there are several significant drivers of change that affect the
competitive conditions facing the electric boating industry. First of all, globalization
offers an advantage to young companies looking to compete for buyers. Globalization
expands the customer base, offers more resources for manufacturing, provides more
access to capital, and utilizes modern technology to the benefit of the firm. For a start
up electric boat company, venture capital is accessible outside the friends and family
circle. Skilled labor can be utilized all over the world at a significant discount to the
domestic cost. Parts used on the boat can be imported from various regions and not
necessarily manufactured and assembled in the parent companies’ facility. All of these
factors will help a young company compete by offering more options and better
solutions.
The internet and e-commerce also offers a tremendous advantage to a new boat
manufacture such as Carolina Electric Boats. Benefits go beyond expanding the
customer base and selling the product over the internet. While it is true that many
shoppers today use the internet to find a product at the lowest price, many shoppers
also use the internet for education. A new product, such as a battery powered electric
boat, without an established high level of brand loyalty, would be wise to use the
internet to provide a detailed description of the product. They should detail the
manufacturing, what the advantages, level of enjoyment and how it may meet the
buyer’s needs as an alternative product. After the customer feels confident that the
product is well manufactured, reliable, and a good value then the second advantage of
the internet can be utilized. The customer can purchase directly from the website. With
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such a high-involvement product most customers are going to want to physically touch
and see the boat before purchasing which they can’t do directly on a website. The
website can also direct the buyer to the most convenient sales outlet. Another
significant advantage the internet offers is from a marketing approach. Instead of
advertising in every outdoor or fishing publication or attending expensive trade shows,
the boating company can use search engines like Google and Yahoo to broadcast their
product to customers searching for small inshore fishing boats. This is cost efficient and
provides information to a targeted audience.
Better technology, in addition to the advantages of the internet and e-commerce, can
save the manufacturer money on parts, replacement costs, warranty claims and
distribution costs. With technological advances in quality and service, customer’s
expectations also increase. It is imperative for a new start-up manufacturing firm to
take advantage of what technology can offer. Technology gives the firm options.
Whether a change will be made every time a new technology becomes available isn’t as
important as making the decision based on all the factors such as what their competition
is offering, cost of the new technology and how will it differentiate them.
Factors for Successful Competition
When considering the factors for successful competition it is important to analyze the
desired end result and what steps are necessary to achieve the desired result. If the
manufacturers goal is to provide a high quality boat at a fair market value price and be a
leader in sales volume then it must be competitive at all levels of the business chain.
The first area would be manufacturing. This would include gathering cost-efficient yet
reliable parts, manufacturing the boat hull with a sturdy material, and assembling the
unit without incurring unneeded expenses. If manufacturing costs are significantly
higher than the competition and the product is highly comparable, the firm will have
trouble selling the unit at a higher price and reap less benefit matching or lowering the
price. If your manufacturing costs are significantly lower than the competition, it would
also be critical that an inferior product is not offered at a similar price because the
quality will not match up.
A company must follow the current trends while still being innovative and forward
looking. This applies to design, functionality and performance. In today’s environment
where buyers have so many options and alternatives it is extremely important to stay
current with market trends. Buyers want modern yet practical design. Appearance is
very important to most demographics, so regardless of whether the boat manufacturer
is producing a high end bass boat or a less expensive electric boat, the hull design,
shape and color are very important to the buyer. This also applies to the functionality of
the boat. Depending on the depth of the water, environment the user operates in, and
primary use of the boat, the manufacturer’s responsibility is to provide up-to-date
functional features that offer competitive advantages and/or comparables to the
alternatives. As performance expectations change the manufacturer should cater to the
buyers’ preferences. A prime example could be safety over speed or maneuverability.
This could obviously affect the design but also provides the manufacturer a unique
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selling feature and point of differentiation. All the pros and cons would need to be
assessed to determine the best route to take.
Meeting customer needs and establishing a reputable brand name is a very important
factor for competition. Often companies compete solely on brand name linking that to
performance. Therefore, if the boat manufacturer can perform well by meeting or
exceeding expectations and establish credibility it will make the fourth and final
competitive factor much easier to gain advantage. Sales strategy is an area that all
product oriented companies compete. This includes the marketing approach,
distribution method, point of sale venue and pricing model. For a new product, like the
Twin Troller, creating a marketing approach that is both educational and appealing will
help build credibility and drive traffic to the retail outlets. As mentioned before, this is a
high involvement purchase that needs an educated sales staff to inform the buyer of the
advantages and points of differentiation. Having a competitive distribution chain will
provide a cost advantage to the buyer thus providing the manufacturer a high probability
of successfully winning the competitive nature of this industry.
Industry's Attractiveness
This boating industry in general offers many opportunities for success. Due to the
current trends in the boating industry, the current economic situation, and the
demographers’ projections on future migration towards water; a less expensive, more
user-friendly and efficient boat fits both current and future buyers’ needs. As more baby
boomers retire and look to pursue their hobbies the customer pool will continue to
increase. Another factor making this industry attractive is the variety of uses for these
boats without much modification to the design. Once brand identity is established, other
uses can be introduced without incurring significant costs. The number one challenge is
product awareness which can be overcome though satisfied customers and a focused
marketing campaign. Most likely the key attractiveness feature is the position in the life
cycle the industry is in. As previously mentioned the Electric Boat Industry is in its infant
stage allowing new entrants the opportunity to develop their brand and establish
themselves in an industry with less competition and huge potential for future growth.
Competitor Analysis
The Twin Troller X10 is an electric, plastic, pontoon boat with hands free controls
designed for fishing protected waters. The boat has a very unique set of features
making it stand out from the crowd including two integrated electric motors recessed
into the pontoons, patented continuously variable foot controls, and an unsinkable
seamless roto-molded hull. Currently no other manufacturer is producing a small
electric boat package. Therefore, it can be said that the Twin Troller X10 is in a class
by itself. However, there are many alternative competitors producing small boats
intended primarily for fishing. Electric trolling motors or gasoline outboards can be
purchased separately and added to these boats. Table 1 in Appendix A. contains a
Feature Strategy Matrix outlining the main features of several key competitors.
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Competitor: Pelican International
Pelican International is a major competitor in the small, low cost, boat market, producing
multiple plastic boat designs distributed at large retail stores such as Dicks, and WalMart. The Bass Raider 10 closely resembles the styling and layout of the Twin Troller
X10 and retails for under $800. This boat does not include a motor, but a trolling motor
can be purchased separately at the same store for approximately $200, for a complete
package price of just under $1000.00. The size, capacity, and overall features are very
similar between the Bass Raider and the Twin Troller. However, the Twin Troller is
manufactured using a roto-molding process, which produces a stronger more durable
product, and the Twin Troller has hands free controls to improve the overall fishability of
the boat. Cost and retail distributions are the two largest advantages for Pelican boats.
Competitor: KL Industries
KL Industries also produces multiple lightweight, low cost plastic boats distributed at
large retail stores. KL Industries business model and product offerings closely resemble
that of Pelican international. The Sportsman Fishing Boat is also a plastic pontoon boat
closely resembling the Twin Troller X10 but is shorter by 1.5 ft and retails for under
$800. This boat does not include a motor, but a trolling motor can be purchased
separately at the same store for approximately $200, for a complete package price of
just under $1000.00. Like the Pelican product offerings KL industry falls short on
strength and durability, but has the advantage of cost and retail distribution.
Competitor: Hobie Marine
Fishing kayaks have recently become the largest growing segment of the boating
industry. Hobie Marine is one of the largest manufactures of sit on top kayaks and has
developed a pedal drive system they call the Mirage Drive. This feature was created so
that fisherman can have their hands free to fish while controlling the boat. This is
similar to the idea behind the Twin Troller X10, except the drive is operator powered
rather than electric powered. The Hobie kayaks are also Roto-molded the same way as
the Twin Troller X10. The Hobie Mirage Outfitter is a 2-seat kayak, which is almost 13 ft
long and 3 feet wide. The Kayaks are sold through a dealer network and Mirage
Outfitter can be purchased for $2,500.00. Hobie’s greatest competitive advantage over
the Twin Troller is brand recognition. Hobie has been considered the industry leaders
for over 40 years in sailing catamarans, and more recently fishing kayaks. Hobie has a
strong reputation for building a high quality product. However, the Twin Troller utilizes
the same production process, as Hobie and quality should be considered equally as
high.
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Hobie Mirage
Outfitter
Tracker 1032
Riveted Jon
PELICAN
BASS RAIDER
8
SPORTSMAN
FISHING
BOAT
KL
INDUSTRIES
FEATURES
KL
INDUSTRIES
BASS
TENDER
CAROLINA
EL. BOATS
Appendix A Table 1. Feature Strategy Matrix
10 ft
10 ft 2 in
8 ft 5 in
7 ft 11 in
10 ft
12 ft 8 inches
WIDTH
48 in
55 in
48 in
48 in
45 inches
33 inches
WEIGHT
175 lbs
165 lbs
100 lbs
90 lbs
80 lbs
72 lbs
LOAD
CAPACITY
585 lbs
474 lbs
550 lbs
500 lbs
320lbs
450 lbs
ELECTRIC
POWER
two 36 lbs thrust
trolling motors
built in mount,
motors not
included
Pre wired for
electric trolling
motor, motors not
included
Built dual
mounts motors
not included
Electric or gas
power up to 3 hp
Human peddle
Power, or
traditional
paddles
AVER. BATTERY
LIFE
6-8 hrs per
charge, batteries
not included
Batteries not
included
Batteries not
included
Batteries not
included
Batteries not
included
Not Applicable
HULL
stable pontoon
Mono-hull
Pontoon
Pontoon
Flat bottom
Kayak
SEATS
2 ergonomic,
removable
2 swivel
2 adjustable
removable
2 contour
swivel
2 bench
2 adjustable
COLORS
blue, green, tan
Green/gray
Gray/black
Green
Green
Blue yellow red
wht
LIST PRICE
$2,395.00
$1499.99
$769.99
$599.00
$549
$2500.00
DELIVERY
$195 -$250
$55
$139.00
MATERIAL
polyethylene
resin
polyethylene
polyethylene
RAM-X ™
Aluminum Alloy
polyethylene
resin
TARGET
CONSUMER
Bass anglers
Bass Anglers
Bass Anglers
Bass Anglers
Fishing and
hunting
Recreation,
fishing
DISTRIBUTION
Online/Dealers
Retail Chains
Retail Chains
Retail Chains
Bass Pro Shops
Dealers
STRENGTHS
stable hull, high
quality
manufacturing,
hands free
control
Live well, nav.
Lights, 7 hp
rating, price
Price, light
weight
Price, light
weight
Cheaper, gas or
electric, low
maintenance,
metal
Easy to transport,
no maintenance,
fitness, can fish
and kayak with
peddle power
WEAKNESSES
expensive
no pedals
no pedals
no pedals
Low capacity
Can get wet
Cheap, low
maintenance, all
purpose boat
Easy to use,
fitness, easy to
store
LENGTH
focus on the
quality,
versatility, create
STRATEGY
a need with the
customer for
high quality
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Buyer/Customer Analysis
The electric boat market is not yet well defined and still in its infancy but has the
potential to target a wide demographic. The variety and features of these products can
cater to all types of boat lovers, fisherman, vacationers, retirees and professionals.
Typically the buyer of an electric boat is looking for more tranquility than the larger
gasoline or diesel powered boats and appreciates the pleasures of a day on the water
without all of the headaches associated such as: gas cans, oil issues, hard to start
engines, and increasingly expensive fuel. The owners of electric boats are also aware
of the environmental issues associated with marine engines, which according to US
EPA is a major source of environmental damage. The electric boat made by Carolina
Electric Boat Company currently serves a small niche of the boating community, with
their buyers looking for a product that is designed as a functional fishing boat, capable
of navigating very shallow water, environmentally friendly, recreationally enjoyable and
more stable than the alternatives listed in the previous section.
According to the National Survey of Fishing, Hunting, and Wildlife Associated
Recreation, almost 30 million Americans 16 years old and older went fishing in 2006. In
2008 over 792,000 short-term licenses were purchased in NC alone, this number
excludes life time licenses. These numbers along with trend studies also show that
while fishing participation has been declining since 2001, fishing with family or friends
have doubled between 1980 and 2006 from 19% to 40% while fishing for relaxation has
increased from 14% in 1980 to 26% in 2006. This is particularly good data for Carolina
Electric Boats because their vessel is suited for two anglers and makes the fishing
experience very relaxing with the hands free control. The controls on this boat allow the
user to fully operate this boat with two foot pedals. The boat has the capability of
driving forward or reverse, and turning in a full circle, which allows for better
maneuverability in shallow water or tightly confined areas. This design of this model
makes it extremely safe and easy to operate which is attractive to all levels of boaters.
Another advantage and primary reason that the Twin Troller X10 adds to a fisherman’s
relaxation is this boat has virtually zero maintenance involved. There are no oil
changes required, no parts to replace, no expensive electronics that can break and no
cosmetic details that require hours of attention. Additionally, the fracture resistant hull
makes the boat extremely durable. Fishermen today want a boat that is reliable, easy
to use and easy to clean, which the Twin Troller offers. Being a boat that weighs less
than 300 pounds, it is easy to transport and store. Many families today live in planned
communities that prohibit you from leaving your boat in the driveway. This boat can be
stored in the garage and easily transported with a dolly and pickup truck.
Anglers in general tend to be avid outdoor recreationists. They enjoy participating in a
wide array of outdoor activities such as boating, hunting, camping, wildlife watching, and
hiking. This boat will not disturb the water or vegetation like a typical marine engine
would and owners can avoid the splashing of paddles experienced in canoeing and
kayaking with this boat. This technique allows owners a quieter and more natural
approach to wildlife and fishing areas.
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The majority of anglers tend to be male with 59% of freshwater anglers being male. A
higher proportion of freshwater anglers come from rural areas than do saltwater anglers,
while a higher proportion of saltwater anglers tend to have a higher income. Due to
boat size and dimensions and power restrictions, Carolina Electric Boats is better suited
for freshwater lakes, rivers, ponds and reservoirs. According to this data, men from
rural areas that enjoy outdoor activities are the ideal target group. Fishing however
tends to be a seasonal hobby and buyer show more interest in this boat during the
spring, early summer and fall. Typically during the colder winter months, activity will
decrease and sales will decline. This seasonality gives Carolina Electric Boat an
extraordinary opportunity to expand into other markets.
The fishing segment of the outdoor recreation industry is the primary initial market for
Carolina Electric Boats, however there are buyers from other areas that this boat could
attract. Because of the design and capability of the Twin Troller X10, duck hunting
would be a logical expansion. This boat would satisfy their needs to travel safely,
transport equipment, and fetch ducks once shot. This could all be accomplished with
very few modifications. Another area of expansion to consider area electric boat only
lake communities, and government agencies, such as Department of Natural
Resources, that focus their work on and around water are a few new areas that could
be explored. Obviously, electric only boating communities advocate environment
stewardship, so with some design changes, Carolina Electric Boats could offer a leisure
boat for 2-4 people. One approach to introduce the boats to these neighborhoods
would be a partnership with the sales office to offer a boat as a buying incentive. If the
realty company is making a $500,000 sale then a $2,500 gift is not out of the question.
Once introduced, the product could really take off and more owners would want to enjoy
the same benefits of boating in their backyard.
Client Analysis
Carolina Electric Boats is seeking to position themselves and their product in an area
that no other boat currently fits. Their initial customer segment is the recreational fisher
and the recreational inshore boater. These customers, the ROTO-Mold Construction of
the boat hull and the recessed trolling motors in the boat positions the boat in a high
quality/durable category and uniquely positions it as environmentally and eco-friendly.
By having the electric motors recessed there is no disturbance of wild life from noise
and no harsh propeller motion going through the water cutting into vegetation. The
recessed motors also allow the consumers to go in and out of shallow water that they
were not previously capable of. By having two motors the maneuverability is also
increased in comparison to single trolling motors offered by competitors. The consumer
will be able to do a full 360 degree turn with this boat and better navigate through tight
spaces that other boats could not. The highly durable ROTO-Mold construction will give
consumers the reassurance that they are in an essentially "unbreakable" boat.
Alternative plastic boats have the potential to crack from wear or impact and/or be cut
by sharp objects leading to a sinking boat. With the product from Carolina Electric
boats, the consumer could drill a hole straight through the hull and it still will not sink.
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Carolina Electric Boats patented foot pedals are used for steering and are unique in
comparison to all other fishing boats. The consumer will have full use of both hands
while fishing or doing other activities leading to greater efficiency and enjoyment. With
other boats using outboard trolling motors the consumer needs to steer with their hands
and this position puts them in a less desirable and less efficient position to fish.
Carolina Electric Boats has a new and unique boat that doesn't currently have
documented consumer perception and is best compared against other categories of
small recreational boats rather than individual companies for positioning. Positioning
Map 1 shows perceived durability and fishability for Aluminum John Boats; Sit on top
Kayaks, Plastic Pontoon boats and plastic mono-hull boats. Carolina Electric Boats is
looking to position itself in the black hole where consumers would see it as highly
fishable and extremely durable. Positioning Map 2 shows the perceived stability and
affordability of the above mentioned boats. Here again Carolina Electric Boats is
seeking to position itself as extremely stable and highly affordable.
Carolina Electric Boats is currently targeting recreational and serious fishers in the
$1,250-$5,000 small boat segment that value quality and enjoyment by designing an
extremely durable product with a unique layout and unique controls that will add to the
consumers’ enjoyment of the product.
Positioning Statement
For sportsman and inshore boaters who desire a stable, versatile, durable, low
maintenance, boat, the Twin Troller X10 is the only hands free electric boat that
provides these features because The Twin Troller X10 is made by sportsman for
sportsman.
Marketing Mix Audit
Carolina Electric Boats currently offers one electric boat Model, the Twin Troller X10, as
their introduction into the Recreational Electric Boat industry. The company does not
have a variety of products and are concentrating on their first model as a base to
expand upon for future less expensive/capable and more expensive/function-rich
models. As mentioned previously, the electric boat industry is in its infancy and one of
the goals of Carolina Electric Boats is to promote electric boats as a new industry while
staging their initial model as the standard to compare all other electric boats. The Twin
Troller X10 is built to be durable, high in quality and efficient in function. Since the
electric boating industry is so young, Carolina Electric Boats is in a strategically
advantageous position whereas there is minimal competition from other electric boat
companies and they can concentrate or building their brand and value at the earliest
stage in this niche industry lifecycle.
The product is already differentiated from other boats utilizing an electric trolling motor.
The boat uses two trolling motors compared to the majority of the competitors only
using one. These trolling motors are recessed in the hull allowing the boat to navigate
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in waters less than 10” in depth. The trolling motors are operated independently by
Carolina Electric Boat’s trademarked foot pedal steering. This technology sets them
apart from competitors and allows the user to operate the boat without using their
hands. This is a valuable feature for their fishermen target market that will have full use
of their hands which will increase enjoyment on the water. The seat railing offered is
top of the line in the industry allowing for high quality seats and will give the most
comfort to the user in turn increasing enjoyment. The hull itself is created using unique
roto-mold technology that makes the boat virtually unsinkable. The firm’s product
development concentrates on product dependability, quality and enjoyment of the end
user. By concentrating on all these factors the firm is adding value in the eyes of the
consumer when compared to alternatives and working diligently to convey and inform
potential buyers and dealers.
The Twin Troller X10 is priced at $2,395.00 and includes the boat hull, trolling motors,
patented pedal controls and seat rails. The purchaser would only have to install a
standard marine battery and choose the seat they prefer to start enjoying their
purchase. Other firm’s products range in price from $550 on up. (Refer back to
Appendix A) Most of the other options are not complete packages and don’t offer the
trolling motor and the trolling motor has to be mounted outboard and operated with the
users’ hands. The value and product differentiation are used to warrant the price
difference.
Carolina Electric Boats sells both through their own website and authorized dealers.
They do not discount their product as to protect their dealers and keep their product
viewed as high quality and a good value for the price. On a sale from their website the
company can expect to make 50% of the profit while sales to dealers they make the
other 50% profit. The price was determined based on costs and where they want to
position themselves in the market. Carolina Electric Boats is more focused on providing
quality and developing value for their product.
The price range they are in qualifies them as an impulse buy for many buyers. Unlike
the larger boat industry where involvement is extremely high due to high price; a buyer
of this product may buy this with less hesitation. The Consumers in this industry tend to
be recreational fishermen between the ages of 35 and 55. This target market is likely to
purchase this as a recreational vessel and will see the value in the product.
Carolina Electric Boats utilizes a two pronged approach for the sale and distribution of
the Twin Troller X10. The primary distribution method is an independent dealer network
consisting of 31 separate dealers located in 15 states. The dealers are local
independently owned retail locations specializing in a variety of segments including
sporting goods, bait and tackle, marine supply, guns and hunting, camping, and boat
dealerships. Each dealer operates under a dealer agreement in which 50% of the
profits of each sale go to the dealer and the other 50% go Carolina Electric Boats.
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The secondary distribution method is factory direct through the company’s website. The
advantage of website sales is that Carolina Electric Boats does not have to share any of
the profits. However, because a boat is a high involvement product most customers
considering buying a Twin Troller X10 would prefer to see the boat in person and ask
questions to the dealer rather than purchase one sight unseen through a website.
The recreational boating market in general is quite mature. However, both electric
boats and roto-molded boats are in the introduction stage of the product lifestyle. This
means the most important goals are to build awareness of the product and its benefits,
encourage industry support and encourage new customer trials. By encouraging dealer
growth and advertising directly to potential customers, Carolina Electric Boat utilizes a
push and pull approach to try and achieve these goals.
Carolina Electric Boats primary method of promotion is both industry and consumer
based trade shows. Boat and outdoor shows are extremely popular in the boating and
fishing market segment. Most boat shows take place in the colder off season when
boaters are looking forward to the upcoming spring and gives customers an opportunity
to see and touch the latest’s designs from many manufactures all in one location. This
is a means of promotion which can be extremely productive because it is focused on the
segment who is most interested in purchasing a boat. In addition it aids in product
awareness and allows for new customer trials without them having to commit to a
purchase. In addition to consumer based trade shows, Carolina Electric Boats also
attends industry trade shows in an effort to obtain more local dealers to distribute the
Twin Troller X10.
Carolina Electric boat maintains a high quality web page and runs commercials on
fishing shows on the Fox Sports South cable network. The message Carolina Boats
communicates to its potential customers is the Twin Troller X10 is a small, extremely
stable easy to transport, easy to fish from, very maneuverable, electric boat. The catch
phrase is, “Think Small, Fish Big”. However, one message the company falls short on
communicating is the durability and quality of construction the Twin Troller X10 has
when compared to its competitor’s low cost plastic boats. The quality of construction
due to the roto-molded construction is a significant aspect of differentiation. The
durability as a result of this manufacturing method is a driving factor in the cost
difference between a roto-molded and thermoformed boat. It is critical to communicate
this differentiating feature to the customer.
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Positioning Map 1
20
Positioning Map 2
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References
1. Lucintel. "Global Recreational Boating Industry Analysis and Forecast 2006-2011."
Marketresearch.com. Marketresearch.com, 1 Oct. 2006. Web.
<http://www.marketresearch.com/product/display.asp?productid=1391569>.
2. Hughes, John L. "Home Price trends and the Boat Market" Boating-industry.com. Marine Matrix.
Web.
3. "The Retail Boat Market." Boating industry.com. NMMA 2008 Boating Abstract Data
Market Data Book 2009. Web.
4. Houseworth, Peter. "Leading Indicator May signal Turnaround." Boating
industry.com. Market Data Book 2009. Web.