Economics assignment on: Cycling

IntroductionCycling provides everybody an economic as well as independent means of travel for all those people who might have restrictions with other means of travel. Cycling has offered high levels of mobility to the various groups such as low income groups, low car rates, unemployed people, all those who do not have a driving license.

There are various benefits of cycling which have been discussed in this report. They are as follows:

Þ    Health benefits: Cycling has been termed to be one of the most effective exercises for the human beings. Based upon the professionals, it has been seen that cycling for approximately 30 minutes every day would be quite beneficial. This would provide better health, etc.

Þ    Environmental benefits:Þ    Social benefits: The social benefits attached to cycling refer to the affordability factor. There are only 10% of the world populations who can afford car & therefore the usability Bike can be seen in a much effective manner.

Power Bike has been referred to as a bicycle retailer which was established in the year 2006 originated in Thailand. Power bike has been rendered to as a family owned business which is operated & regarded as one of the premier retail cycle shops at Roi Et. A. This report takes into consideration the various a detailed description of the current consumer market for this business, focusing on demographics and psychographics. It also highlights the various positioning strategies which shall be used by Power Bikes in order to perceive as well as portray a picture in the minds of the consumers.

Q1. Give a detailed description of the current consumer market for this business, focusing on demographics        and psychographics.

Ans1. While crafting the business, the organization shall have a well understanding regarding its target audience. In order to understand the target audience, the enterprise should divide the entire market on the basis of two parts i.e. demographics & psychographics. This would help in order to determine clearly the type of products or service which needs to be served along with the tactics which shall be kept in mind.Some of the marketers would convert the entire market into various subsets which would help them in order to pass on the message to each & every person involved. It is quite an important task for the customers to have an in depth knowledge regarding its customers. This would help in order to have a big picture regarding the potential customers. For example, in case of Power Bikes different types of bicycles are being offered to the target audience. Therefore, the retailers shall take into consideration the various aspects which would help to attract the target audience. Hence, many lucrative aspects shall be highlighted over the web which would attract the target audience towards them.  Some of the main target audience which is attached with Power Bikes is females, young children, racers, mountaineers, etc (Kotler, Gregor & Rodgers, 2010).

As the boundaries between categories begin to blur, and consumers no longer like to be singled out based on income, gender, ethnicity or education, one of the keys to keeping your marketing cutting-edge is customization, and personalization–essentially letting your customer know you think of them as an individual and understand their lifestyle. If you don’t speak to their lifestyle, a customer will tune you out. Get a firm grasp on the lifestyles of the five very distinct generations:

Based upon the demographics & psychographics the consumer market can be divided into the following heads. They are discussed as under:

Þ    Gen I: Gen I also known as Gen Z refers to the young generation or the children (young boomers). They refer to the main class which is being catered by Power Bikes. Since, this section of the market is quite young; marketing as well as demographics theories are still in the development process. This generation has been borne along with the internet era which would take up different types of technology. This market segment would be mainly interested in such type of a product.

Þ    Gen Y: Gen Y refers to the target audience ranging from age group 9 – 27 years. It has been well stated from one of the research done by the University of Michigan, that 11% – 20% people prefer using this mode of transport as compared to the other means. The disposable income of the parents of the boomers is quite high that, they are willing to buy such type of bikes or bicycle for their kids. Kids belonging to this age group have grown up with the rise in the technology therefore; such type of market segment is quite reluctant in buying such type of bikes (Zeithaml & Bitner, 2003). It has been seen that, Gen Y likes using various innovative approaches & use out of the box things as compared to the normal things. Such type of consumers believes in out box thinking as well as tries new things.Þ     Gen X: The next best generation this would be interested in this type of an innovative venture. Approximately, 44 million Gen Xers are there in this world who is earning quite high as well as buying goods or commodities at a higher rate. They are tech savvy & love to buying innovative things. Such type of customers is high on education as well as knowledge front. They are quite independent & know what to buy when to buy and how to buy. They generally attach high levels of value along with the product (Kotler, Gregor & Rodgers, 2010).

Þ    Women & the greatest Generation: Women & the greatest generation refer to one of the most dynamic             market segments. This segment takes into consideration the working women or the pregnant ladies or the women class. For women class specific bikes have been designed taking into consideration the color patterns, paddles, deigns, frame sizes, etc. The bikes designed for the female section are quite less in weight. This makes them feel comfortable (Zeithaml & Bitner, 2003). For the greatest generation, Power Bikes have a range of road bikes which fits into the budget as well as have been considered to be one of the most comfortable bikes on the road. Most of the doctors ask the greatest generation to practice cycling till the time they are comfortable with it. Power bikes provide the greatest generations with quality as well comfortable bikes at quite a reasonable rates (Kotler, Gregor & Rodgers, 2010). The power bikes cover all types of functions keeping in mind the safety as well as the reliability of the product. It’s a mistake to think octogenarians aren’t using the internet. Based upon one of the surveys conducted by US Census Bureau it has been reported that, approximately over $7 billion of amount has been invested by the people above 65 of age (Kotler, Gregor & Rodgers, 2010).

Þ    Boomers: Baby Boomers refer to the last type of market segmentation which would lead to high levels of sales of Power Bikes. It has been state that, on an average there are $400 billion boomers within this world. In this stage of life, the target audience would be willing to buy Power bikes for their pregnant wives, kids or children, married females, etc. It is noticed that, between the years 2005 – 2030 there would be 60 grown up groups constituting 80% of the entire population. This generation mainly takes into consideration a complex play up with the members of the youth (Zeithaml & Bitner, 2003).

Q2. Consider an appropriate positioning strategy for Power bikes and give an example of the body copy for a piece of advertising.

Ans2.

Positioning strategies have been referred to as strategies which would be developed in order to convince the target audience to buy a particular product. It shall be taken into consideration by Power bikes to highlight the various attributes of the product, applications, competition & the types of customers which are attached towards the same. The various attributes mentioned above provide different types positioning strategies which would help in the achievement of the objectives as well as create a picture in the minds of the customers. Some of the positioning strategies which shall be taken into consideration by Power bikes are as follows:Þ    Product characteristics, benefits as positioning strategies: The first positioning strategy which shall be taken into consideration by Power Bikes is to focus upon the key attributes or characteristics of the object. Some of the characteristics which shall be taken into consideration with respect to Power Bikes refer to durability, economical, reliability, etc. Power bikes have been referred to as an organization which provides wide varieties of cycles for those people who love to ride a bicycle. They offer different types of cycles for all types of riders taking in consideration the needs of the customers. Power Bikes shall take into consideration, the durability & the style factor due t which the customers would be willing to buy the same at the reasonable price. Sometimes it has been noticed that, Power Bikes is positioned along with the various other bikes or cycles available in the market with similar kind of characteristics. Hence, Power Bikes hall focus upon various different product characteristics which would help in order to portray a better picture as compared to the other objects. This would help in order to provide better communication amongst the various target audiences (Zeithaml & Bitner, 2003).

Þ    Price plays a key role in positioning strategy: With respect to Power Bikes, price would be referred to as one of the most crucial aspects which shall be taken into consideration. Price attached with a particular object would have a direct relation with the levels of sales for that object. In order to understand the same, we shall take an example i.e. when one enters a cycle retail shop, the customer would find different types of cycles with different price tag attached to it. The prices for the cycle would range from 500 Baht – 2000 Baht (Smith, 2007). As soon as the customer looks for a 500 Baht cycle, he/she says the durability & the quality attached with this cycle is not good. This is because it is perceived by most of the people that, most of the expensive objects are priced at a higher rate as compared to the cheaper ones. Therefore, it must be regarded that positioning with the help of price shall be taken into consideration. The price tag along with a given product would help in order to see the different features, services & the performance attached to it. Hence, it must be regarded that Power Bikes shall have a price which would provide the customers with better service & high quality (Kotler, Gregor & Rodgers, 2010).

Þ    Use ability as a positioning strategy: Power Bike shall be positioned in the minds of the customers with the help of the various uses attached to it. It must be seen that, the prices attached with the same shall provide a detailed justification in regards to the use ability. The use ability factor attached with Power Bike can be seen with respect to the different types of bikes available for the different types of the riders. Power bike sells a wide variety of bikes or bicycles which suit as well as cater to the need of the customers. the sue ability of the same can be seen with the help of mountain bikes, bikes especially designed for women, road bikes, BMX bikes, hybrid bikes, children bikes, etc. Hence, positioning for each category of the product shall be done with the help of different type’s strategies which would cater to the specific needs of the same (Porter, 2006).

Þ    Product process attached to the positioning strategy: Lastly, the positioning strategy for Power Bikes shall take into consideration the product process i.e. the class of people who are using the same. Based upon the demographics as well as psychographics market segmentation of the customer’s base, it has been regarded that there is a large population which uses this mode of transport. In this type of case, the main expectation would be to take into consideration the personality of the object which would reflect the characteristics as well as the personality of the users. In most of the cases, the organization needs to reposition its advertisements based upon the needs of the customers as well as the class of customers dealing with. Such type of repositioning would help in order to increase & enhance the market share of the same (Kotler, Gregor & Rodgers, 2010).

Þ    Product class as a positioning strategy: The product class shall also be kept in mind while positioning a particular product. Power Bikes shall keep in mind the product class of the same. This means that, a different type of strategy shall be made so as to position the same amongst the bicycle market. The positioning shall be done keeping in mind the three aspects such as health, social & environmental benefits. This would mainly aim at the promotion of the bicycle as a mode of transport an alternative for motorized travel (Porter, 2005).

Þ    Cultural symbol as a positioning strategy: It has been seen that, these days many advertisers use different types of symbols which would help in order to differentiate one product from another. Therefore, the main task would be to identify something which is quite meaningful as well as helps to differentiate from its immediate competitors. This would be regarded as one of the major positioning strategies which shall help Power Bikes to make an individual identity amongst the entire target audience. This separate entity would help the customers to have a fair picture in their mind regarding the product, its attributes, objects, etc (Maine, 2010).

Þ    Competition as a positioning strategy: This refers to the last type of positioning strategy which might be taken into consideration by Power Bikes in order to cater to the rising needs of the same. Competition has been referred to as one of the most important factor which shall be taken into consideration by the sellers in order to succeed within the market place. In this case, Power Bikes shall either use a different strategy or copy an existing strategy which is being used by one of its immediate competitors. Power Bikes shall frame a strategy which shall highlight the positive health aspects attached with the use of the same. Power bikes attaches itself three types of benefit such as health, environmental as well as social benefits. The advertisements shall be framed in a manner which would highlight the affordability factor attached with Power Bikes bicycles. This would help to increase the levels of sales as compared to other means of transport such as cars, scooters, etc.

Q3. What is the likelihood of this enterprise moving to service the business market in Bangkok? Explain you answer.

Ans3. Bangkok has been referred to as a market which would provide better business options for the companies such as Power Bikes. In order to start up a business in any other country, fair planning as well as expenses shall be taken into consideration. This would help in order to take up different types of decisions in a well defined manner (Kotler & Armstrong, 2010).Location has been referred to as one of the most crucial aspects for any retail industry to grow & expand its operations. Bangkok would be referred to as one of the regions in Asia which would be apt in terms of bicycle business.

Some of the basic reasons to locate the bicycle business operations in Bangkok have been discussed in this section of the report. They are as under:

Þ    Bangkok is the capital of one of the largest city i.e. Thailand. It has an average population of 6.34 million people. The cost to owe a bicycle is quite low in Bangkok therefore majority of the people plan to owe a bicycle as compared to any other means of transport.

Þ    Bangkok has been promoted as the “City of cycling” by the Tourism Authority of Thailand. It has been seen that, in Bangkok “no child is seen without a Bicycle”. Power bikes have high levels of growth opportunity in Bangkok. Cycling tours have become more prominent in Bangkok as compared to any other means of travel (Henry, n.d).

Þ    The majority of Thai universities have been located around the capital. The Power Bike would be used by the university students to come & go from their home till the college. This would also take into consideration the health benefits, environmental benefits & social benefits. Cycling has been termed to be one of the most effective exercises for the human beings. Based upon the professionals, it has been seen that cycling for approximately 30 minutes every day would be quite beneficial. This would provide better health, etc. The social benefits attached to cycling refer to the affordability factor. There are only 10% of the world populations who can afford car & therefore the usability Bike can be seen in a much effective manner (Abhijeet, 2008).

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