Current Situation- Market Analysis
 Market Definition: We plan on marketing our truck in the emerging alternatively fueled
Transport truck industry. More specifically the Business Class M2e hybrid-diesel truck
segment. Our product will be best suited for transport service companies that are that are
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looking to make an environmental impact and that are in need of more, (or newer)delivery
trucks. Our trucks are medium sized vehicles that are best over short to medium range
distances. Companies who use these vehicles will benefit most using them in heavy stop and go
traffic situations. This leads us to look at companies who operate in larger cities with this type of
traffic and who have these transportation and delivery requirements.
Market Size and Share: The global truck market is constantly growing with the increasing
demand for more transportation services. There is a growing demand for increased fuel
efficiency and a lower total cost of ownership. The global market for transportation vehicles is
expected to grow to around 33 million units by 2015. Freightliner accounts for roughly 2.7% of
the global market share in terms of all vehicle sales. Some major competitors in our market
include Mack, Volvo, Mercedes-Benz, Renault, and Mitsubishi Fuso.
Market Segmentation: The first segmentation we had to make to the market was by class of
truck, ours being a Business Class M2 transport truck. From there we plan to further segment
the market into two distinct groups; large companies that have a fleet of Business Class M2
trucks and smaller companies who are looking to build on, replace, or start an inventory of such
vehicles. Large companies like Coca-Cola, Fed-Ex and UPS have large fleets of transport vehicles
and are constantly increasing and upgrading their fleets. These companies represent a large
potential for revenue because of their high purchase volume and the opportunity for repeat
business. Small companies that have a small number of vehicles will also be marketed towards.
We feel with the new savings due to the technologies offered by our product and good loyalty
programs we can offer these companies an opportunity to lower their fuel costs and their
overall cost of ownership on their vehicles. This would allow these small companies to become
more successful, and potentially could increasing the volume of vehicles they use as their
business grows.
Market Trends: The transportation market is moving towards greener more environmentally
friendly fuel solutions because of new incoming government regulations that will restrict the
amount of pollution produced by these vehicles. Also the companies who utilize these vehicles
are constantly asking for a lower total cost of ownership on the life of their trucks. The total cost
of ownership of a truck is currently dominated by fuel and service repair costs. This directs the
market towards a trend of better fuel economy and greater vehicle durability. The impending
government regulations push the market towards developing alternative fuel consumption
methods.
Porter’s Five Forces Analysis:
- Threat of new entrants: Low- The threat of new entrants is low as the startup costs and
overhead to start a truck manufacturing company are extremely high.
- Threat of substitute products: High- The threat of substitute products is currently high as
there are many different options of trucks available to consumers. With the impending
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government regulations however, this will reduce the threat of substitute products moving
forward because companies know by a certain date they will have to be operating at, or
below the emission regulations being put into place. We plan to lower our threat of
substitute products by offering longer warranties to companies who make large volume
purchases and loyalty programs for repeat business.
Bargaining power of suppliers: High- The bargaining power of suppliers is high because there
are not many manufacturers of large, high powered diesel engines, or the smaller engines
that get coupled with hybrid technology for transport trucks. Therefore as a company we
only have a few places to get the power-plants for our trucks. We plan to reduce the power
of our suppliers by negotiating long term contracts with guaranteed purchase orders,
reducing some of the risk for our engine manufacturers and lowering our purchase price per
engine.
Bargaining power of consumers: Low- The bargaining power of our consumers is low
because ultimately we set the final price for our product. We are also offering longer
warranties than our competitors, and a loyalty program for return customers.
Competition level: High- The competition level of the transportation truck industry is very
high. As an illustration there are over 18 parent companies that make up the global market,
our parent company is the second largest worldwide and owns approximately 9.7% of the
total market share. Freightliner truck sales make up 2.7% of the global market share. The
competition level is high because many of these companies sell very similar products and
there are a limited number of buyers for this specific class of truck. Therefore companies
have to separate themselves using unique marketing plans and by being the first to the
market with any newly developed and fully tested new technologies.
Current Situation- Consumer Analysis
 Nature of Buying Decision: Our consumers will likely do a lot of research before making a
purchase. The large purchase price and long expected life of our products means consumers will
most likely be using our product for a very long time and depending on the size of their business
may be paying for the truck over an extended period as well. There are two main types of
purchases our consumers will make. One type is a large fleet purchase of 3 (or more vehicles).
The other main type of purchase will be made by a smaller company, or an owner-operator
perhaps, who is looking to purchase 1 to 2 vehicles at a time.
 Buyer Motivations: The market for transport trucking is constantly trying to lower fuel and
service costs as these are the two main contributors to the total cost of a vehicle over its
lifetime. Our consumers expect a vehicle that will be better on fuel, more dependable, and
overall a better tool for them to use on a day to day basis. Buyers will be motivated to purchase
our vehicle because of the savings they receive from better fuel consumption and better
durability. The greater durability means our vehicles will be in the shop less and on the road
more, generating revenue instead of costing you more.
 Loyalty Segments: For our larger companies looking to make fleet purchases of three or more
vehicles, we will be offering reduced fleet pricing and the more vehicles purchased the greater
the discount. Also for any single company that purchases 20 or more units at one time we will
increase the warranty period by a year on each vehicle purchased. For smaller companies
looking to purchase only 1 or 2 vehicles at a time, we have return loyalty rates. If a company
purchases a vehicle and comes back within 2 years to purchase another vehicle we will offer this
customer a reduction of 3% on the purchase price of the second vehicle.