Folding Bikes Exam Prep
Aims and Objectives:
For The Bicycle Shop to be the market leader in Folding bikes
3 SMART objectives (JUSTIFY EACH ONE):
Increase sales revenue by 15% within 3 weeks
7% increase of low-income (any type of customer) customers in the shop in the next 2
weeks
15% increase of folding bikes in the shop within the next month
Market data:
Bike market in the UK is estimated to be worth around £1.5 billion, and it has been growing
around 5% per year for the past few years and it is anticipated to grow even more.
Estimated 2,500 bike shops in the UK. Independents represent the majority of the UK bike
market, other than a few small chain retailers and Halfords.
Number of small independent bike retailers is estimated to have fallen by around 10% during
the last 12 months.
Halfords dominates the UK bike market with the biggest market share of 26%. Because
there are two related markets in the bike market (the sale of bike part accessories and cycle
repair) Halford is estimated to have a 16% market share of the parts and accessories
market, and a 10% share of the bicycle repair market.
Furthermore, the bicycle industry has space for expansion. E-bikes represent a significant
growth potential. Since it is electric, this segment is rising steadily and is ideal for commuters
and older generations. In countries like the Netherlands, Germany, Denmark, Belgium, and
France, where cycling is common among the general public, consumers have long accepted
e-bikes. E-bikes, for example, account for nearly 30% of all new bicycles sold in Holland. So
far, e-bike sales in the United Kingdom have been relatively poor. They did, however,
increase their share of the UK bike market from 5% in 2015 to 12% in 2016.
Folding Bikes:
It is only a small segment in the bike market with a share of 4% of bikes sold. The market
leader is Brompton Bikes, they export mainly to Europe and other countries and manufacture
45,000 bikes per year but are facing emerging competition from rivals overseas such as
Tern and Dahon.
Brompton sales: £8.7m
The folding bikes market is constantly growing so there are healthy profits to be earned. This
is good for the Bicycle Shop because there is an incentive for them to move into this product
space and charge their bikes at a lower price than Brompton. This will increase competition
and entice customers to switch from Brompton to the Bike Shop.
, Bromptons competitors:
Traditional bike dealers- Work closely with the manufacturer and provide after sales service
and repairs COMPARE
Mass market- retailers such as Argos and Tesco- No after sales service-, low- and cut-price
bikes
Internet retailers such as Daudbikes- Extremely low prices from £69 and emerging market
Bromptons target market:
Folding bikes are targeted at consumers who are willing to pay for reliability and durability,
also for commuters and city dwellers to avoid the traffic.
TALK ABOUT WHY THIS DATA IS RELIABLE AND VALID
Justification, SWOT and PESTLE analysis:
When it comes to marketing campaigns, advertising via social media is the best way to
reach the target audience as everyone is on social media nowadays, it is also reasonably
cost effective in comparison to a big billboard that may not reach the Bike Shop’s audience.
The average Instagram ads cost per click is around £0.50- £1.00. Other bike shops use
social media to promote their marketing campaigns because they acknowledge that it is one
of the most effective methods of marketing. For example, Brompton introduced the Try
Brompton campaign, a video competition to win a month-long loan of a Brompton model,
they said it’s the perfect chance to try a bike to discover how a Brompton can change the
way you live in your city.
Furthermore, the impact of rising train fares is causing individuals to drive instead to where
they need to go, whether this is overall travel or to get to places such as work. Meaning that
there will be a decrease in bike users and companies such as Brompton will generates a
smaller quantity of sales revenue, therefore reaching lower profit margins. So, how could the
bicycle shop entice customers to purchase their bikes and use them? Cycle to work scheme
will save customers 25%-39% on bikes and accessories, this will entice customers as the
payments are taken tax efficiently from their salary, so they are not paying as much for the
bike.
However, there is growing competition from other forms of transport, such as cars. There is
lots of car availability and cheap second-hand cars, which is one thing that Bike companies
struggle with as they are constantly in competition with other forms of transport, not just
other bicycle businesses. This will be something that the Bicycle Shop will struggle to
compete against.
PESTLE:
Political: Local governments are extremely influential in the policymaking and
implementation process, as most legislation and regulations are enforced by local
governments, and compliance agencies typically report to local governments in their own
states on different laws.
Economical: Excess supply in the industry is adhered to by a rate which is lower than the
cost of the bike industry which has resulted in cash flow problems for manufacturers.
Furthermore, there is also stagnant wage growth meaning that consumers are not having an
increasing amount of disposable income to spend on bicycles, leading to a decrease in
Aims and Objectives:
For The Bicycle Shop to be the market leader in Folding bikes
3 SMART objectives (JUSTIFY EACH ONE):
Increase sales revenue by 15% within 3 weeks
7% increase of low-income (any type of customer) customers in the shop in the next 2
weeks
15% increase of folding bikes in the shop within the next month
Market data:
Bike market in the UK is estimated to be worth around £1.5 billion, and it has been growing
around 5% per year for the past few years and it is anticipated to grow even more.
Estimated 2,500 bike shops in the UK. Independents represent the majority of the UK bike
market, other than a few small chain retailers and Halfords.
Number of small independent bike retailers is estimated to have fallen by around 10% during
the last 12 months.
Halfords dominates the UK bike market with the biggest market share of 26%. Because
there are two related markets in the bike market (the sale of bike part accessories and cycle
repair) Halford is estimated to have a 16% market share of the parts and accessories
market, and a 10% share of the bicycle repair market.
Furthermore, the bicycle industry has space for expansion. E-bikes represent a significant
growth potential. Since it is electric, this segment is rising steadily and is ideal for commuters
and older generations. In countries like the Netherlands, Germany, Denmark, Belgium, and
France, where cycling is common among the general public, consumers have long accepted
e-bikes. E-bikes, for example, account for nearly 30% of all new bicycles sold in Holland. So
far, e-bike sales in the United Kingdom have been relatively poor. They did, however,
increase their share of the UK bike market from 5% in 2015 to 12% in 2016.
Folding Bikes:
It is only a small segment in the bike market with a share of 4% of bikes sold. The market
leader is Brompton Bikes, they export mainly to Europe and other countries and manufacture
45,000 bikes per year but are facing emerging competition from rivals overseas such as
Tern and Dahon.
Brompton sales: £8.7m
The folding bikes market is constantly growing so there are healthy profits to be earned. This
is good for the Bicycle Shop because there is an incentive for them to move into this product
space and charge their bikes at a lower price than Brompton. This will increase competition
and entice customers to switch from Brompton to the Bike Shop.
, Bromptons competitors:
Traditional bike dealers- Work closely with the manufacturer and provide after sales service
and repairs COMPARE
Mass market- retailers such as Argos and Tesco- No after sales service-, low- and cut-price
bikes
Internet retailers such as Daudbikes- Extremely low prices from £69 and emerging market
Bromptons target market:
Folding bikes are targeted at consumers who are willing to pay for reliability and durability,
also for commuters and city dwellers to avoid the traffic.
TALK ABOUT WHY THIS DATA IS RELIABLE AND VALID
Justification, SWOT and PESTLE analysis:
When it comes to marketing campaigns, advertising via social media is the best way to
reach the target audience as everyone is on social media nowadays, it is also reasonably
cost effective in comparison to a big billboard that may not reach the Bike Shop’s audience.
The average Instagram ads cost per click is around £0.50- £1.00. Other bike shops use
social media to promote their marketing campaigns because they acknowledge that it is one
of the most effective methods of marketing. For example, Brompton introduced the Try
Brompton campaign, a video competition to win a month-long loan of a Brompton model,
they said it’s the perfect chance to try a bike to discover how a Brompton can change the
way you live in your city.
Furthermore, the impact of rising train fares is causing individuals to drive instead to where
they need to go, whether this is overall travel or to get to places such as work. Meaning that
there will be a decrease in bike users and companies such as Brompton will generates a
smaller quantity of sales revenue, therefore reaching lower profit margins. So, how could the
bicycle shop entice customers to purchase their bikes and use them? Cycle to work scheme
will save customers 25%-39% on bikes and accessories, this will entice customers as the
payments are taken tax efficiently from their salary, so they are not paying as much for the
bike.
However, there is growing competition from other forms of transport, such as cars. There is
lots of car availability and cheap second-hand cars, which is one thing that Bike companies
struggle with as they are constantly in competition with other forms of transport, not just
other bicycle businesses. This will be something that the Bicycle Shop will struggle to
compete against.
PESTLE:
Political: Local governments are extremely influential in the policymaking and
implementation process, as most legislation and regulations are enforced by local
governments, and compliance agencies typically report to local governments in their own
states on different laws.
Economical: Excess supply in the industry is adhered to by a rate which is lower than the
cost of the bike industry which has resulted in cash flow problems for manufacturers.
Furthermore, there is also stagnant wage growth meaning that consumers are not having an
increasing amount of disposable income to spend on bicycles, leading to a decrease in
