Topic: Design Product: Bamboo motion bicycle Brand: Reid cycles Australia

Group Charter Questions

1. Please describe the strategy your group will use to effectively manage group time, communicate to each other and stay organised during the course of the assignment.

Our group’s strategy to effectively manage our time was to create a brief timeline after receiving a general overview of the assessment guidelines, in order to complete the sections and tasks in time. In terms of communication one of the first decisions that we came up with as a consensus was to establish a Whatsapp group chat in order to keep each other up to date with the assignment otherwise we vote democratically before making dramatic decisions to ensure that we are giving everyone a chance. Furthermore, in order to stay organised throughout the course of the assessment and ensure that we were on task we also collectively agreed to create a google docs. This will make us aware of our groups progress and the future steps that need to be taken in order to meet the due dates.

2. Please describe the strategy your group will use to manage group conflicts, different personalities and differences of opinions.

Our groups plan to manage conflicts and difference in opinion is to frequently communicate our thoughts and ideas to each other and then, as a group, decide which direction we wish to go in. As a group we plan to clarify our positions early on and adapt every decision to each member. We understand that both communication and cooperation are going to be key elements in limiting and resolving any difference in opinion, and so in the event of group conflict we are aware that every member must be understanding in the resolving process.

3. Please describe the strategy your group will use to deal with lack of contribution from a member or group members withdrawing during the semester.

As a group, we will band together to communicate with the team member that we perceive as lacking in their contributions to the team effort, and communicate our concerns. If they continue to not put in the required effort that is being put in by all other team members then a meeting with our tutor shall be needed and further  action shall be taken. If a student is to withdraw during the semester we as a group will portion up the work that is left to be done and divide it amongst ourselves, so no one student is particularly disadvantaged with an extra workload.

Marketing Plan Proposal Questions

1. What is the original name of the product you have chosen from Kickstarter.com? If the original product name is not consumer friendly, please include the new product name you decided to use.

The product we have chosen from Kickstarter’s name is ‘BambooMotion’ which is a push bike.

2. Briefly describe what the product does

The product aims to raise awareness about environmental challenges and promote the use of eco materials in mobility. The product combines enjoyable exercise whilst promoting local environmental friendly materials.  (We believe that developing a marketing plan for ‘BambooMotion’ could be a great challenge for the group due to his innovative properties and the obstacles in entering the market field.)

3. What brand have you chosen to launch your product under?The brand we have chosen to launch our product under is ‘Reid Cycles Australia’

4. Why did you choose this brand?We chose ‘Reid Cycles Australia’ as a brand as it is an Australian bicycle company which sell various bicycle styles. The brand is known for providing high-quality products, the main feature of the ‘BambooMotion’ bike is its unusual Bamboo material, which is a very high quality and sustainable. Also,the brand is known for selling bikes suitable for different lifestyles. Especially the innovative and stylish look of the ‘BambooMotion’ bike fits perfectly into the brand’s image campaign. This specific type of bike, being an eco-friendly lifestyle bike, doesn’t have a large market in Australia, therefore leaving a gap for us to market to.

5. What is your proposed target market and why would this product be of value to them?

Our proposed target market are men, women and children (willing to help reduce waste and build a better and healthier environment.)Especially among young students the bike could be the new trend, because it is not only stylish and useful, it also sets a statement against environmental pollution and underlines an eco-friendly lifestyle. Especially for the social media generation buying a product is strongly attached to their lifestyle and social appreciation, on this account a ‘BambooMotion’ bike would add value to them.

Another great thing about the product is that it’s made of bamboo, which is a strong type of material, it’s rust-free (less maintenance) and it can be replaced if damaged.

Our proposed target market are young children, students and adolescents although the product is suitable for all ages. Especially among young students the bike could be the new trend due to its multifaceted purpose and stylish aesthetics; it encourages all people to adapt an eco-friendly lifestyle as it reduces pollution and reuses resources that are needed to construct the bike. Especially for the social media generation buying a product is strongly attached to their lifestyle and social appreciation, on this account a ‘BambooMotion’ bike would add value to them. In addition, the bike is mainly consists of the strong bamboo material and therefore has less maintenance, adding no extra pressure or stress on the owners

QUESTION: should we only choose one target market ? ( young families, students, … ?)  I think we should focus on like students and children as its a lifestyle sort of bike not a professional mountain bike but up to you guys, i don’t mind

COMPONENT DESCRIPTION RESPONSIBILITY Word Count

1) Overview A brief overview about the product, brand and company.

Group 200

2) Situational Analysis: Minimum Situational Analysis Components required for the Presentation listed below:

Evidence of exploration of the marketing environment is required. Groups may wish to expand upon the situational analysis, depending on time.

2a) Political, Economic, Sociocultural, Technological, Environmental and Legal forces (PESTEL)

Analyse the political, economic, sociocultural, technological, environmental and legal forces

Individual:PESTEL

250

2b) Competitor Analysis A comprehensive competitor analysis including indirect and direct competitive forces and/or substitute products.

Individual:COMPAN

200

2c) SWOT Analysis Strengths, weaknesses, opportunities and threats.

Group 200

3) Objectives The product offering’s marketing objectives are clearly stated and are structured. Objectives are demonstrated to be Specific, Measurable, Actionable, Reasonable and Timetabled.

Individual:OBJECT

200

4) Target Market The target market/s is/are identified and sound evidence for selection is presented.

Group 200

5) Marketing Mix: Positioning A positioning strategy is clearly stated which reflects where the good/service is to be positioned upon launch into the market.

Individual: POSITN

200

6) Marketing Mix Strategy: Minimum Marketing Mix Strategy components required for the Presentation listed below:

Consideration has been given to how the marketing mix of the product will be linked to the target market/s, with relevant use of feasible marketing strategies to explain, justify, and support recommendations. The minimum requirement for the Marketing Mix.

6a) Product and Price Discuss and link to target market as stated above.

Individual:PRDPRC

200

6b) Promotion and Place (Distribution) Discuss and link to target market as stated above.

Individual:PROPLA

200

7) Budget/Financials Some evidence is provided as to the costs and/or projected revenue for the product.

Individual:BUDFIN

200

8) Implementation/Evaluation Some evidence is provided of how the marketing strategies and objectives will be put into practice. Metrics to evaluate their success and any problems and issues that may be endemic to this product category have been identified and addressed.

Group 250

9) Conclusion/Recommendations A summary/conclusion, as well as future recommendations is provided.

Group 200

Overview

Situational Analysis

PESTEL Framework: James - Word Count: 256

Political: The nation wide laws on reducing harmful CO2 emissions might boost the greener modes of transport, therefore increasing market demand for the Bamboo Motion bicycle.

Economic: The fluctuation in the prices of raw materials such as alloy, carbon and titanium may lead to competitor’s prices changing more frequently than businesses using recyclable materials. However, Reid Cycles Australia may still need to consider these price changes as certain parts of the bike use these materials.  

Sociocultural: As society progresses, people are becoming more aware about reducing their carbon footprint and choosing to use renewable energy sources where they can. In today’s

growing and ageing population as traffic worsens and the rate of obesity rises, consumers are frequently making environmentally conscious decisions.

Technological: The major aspect of competition is the rate of technological advancement. A rising submarket could be electronic bikes. Reid cycles Australia may look to market their product in the underdeveloped regions of the country where the customer base is looking for a more reasonably priced product.  

Environmental: Factors such as traffic, cycling facilities, road design and weather are all going to dramatically affect the potential market share of this product. All of these factors have a direct link to road safety, which is often a big factor when purchasing a road bike.

Legal: In the current situation there has been numerous legislative changes concerning the carbon emissions on the environment. This might have an impact of the usage of cars therefore leading to a concentration on traveling more with the greener modes.

Competitor Analysis: Nivine El-Aawar, word count: 241

The most successful companies know their competitors and try to understand every aspect of their business strategy, like the marketing mix and sales trends. By analysing this part of the microenvironment, ‘BambooMotion’ can succeed by providing the market with greater value compared to the competitor’s offerings. In the Australian market there are competitors that are already implemented in the market, as the number of experts who are making bicycles out of renewable raw materials is growing. ‘Eco shift’, a Melbourne based company is specialized in bamboo bikes. They follow the same marketing strategy as ‘BambooMotion’ and are focused on connecting the sustainable bike to a trendy lifestyle. By trying to show personal stories about the company’s history they create trust and a community that connects their passion about the environment and social actions with economics. They focus strongly on individual customized bikes, with prizes from 1400- 2500 AUD,  where ‘BambooMotion’ could have an advantage, because they not only offer customized bikes, but also have a line of diverse and cheaper models. Another big competitor can be ‘OBikes’, because they are a cheap environmental friendly option for a large part of the population, with a rental price of 2 AUD per half hour. The innovative concept allows everyone to have access to the ‘OBikes’, because only an app on the smartphone is needed. The bikes are placed all over the cities and are an affordable way to be environmental friendly, for everyone.

SWOT Analysis

Objectives

Target Market - James, word count: 230

Our product offers numerous benefits for wide variety of people, which allows us to target multiple demographics. One of our key target markets will be individuals that are either located in or regularly travelling to and from the central business district. As this market is driven by high CBD traffic rates, parking, fuel and public transport costs, Our ‘BambooMotion’ bicycle offers a much more economical alternative. The lack of parking in the CBD and the convenience of bike mobility through highly populated areas will encourage these individuals to use our product. As university students are going to fill a big part of this target market, we are hoping the initiatives already taken on by universities such as bike storage areas will help us to promote the use of our product. As a big factor that

distinguishes us from other bicycles is the use of environmentally friendly materials in the production of our product, we plan to use this when targeting the younger demographic. Due to the social media generation, buying a product like ours offers a positive image to one’s reputation as it is setting a statement against pollution and underlining an eco-friendly lifestyle. We also plan to market our product towards low-income households, which perhaps can’t afford to have multiple cars in one household. Again, our reasonably priced product will offer this demographic a cheap alternative method of transport.

Marketing Mix - Positioning: Kevin, word count:

Marketing Mix Strategy

Product/Price: Monique,  word count: 222

The product being the Bamboo bike will be made out of recycled bamboo materials as well as extra pieces of metal in the needed areas. To be more specific the resources needed includes tubes of recycled bamboo, bamboo bicycle-capable holders, sets of stainless steel dropouts, aluminium and a cushioned seat, reinforced metal wire as well as transparent roll, which can be bought at a packaged deal of $239 (AUD) for each bike. Furthermore, as the pieces come separately a labourer will also need to be hired in order to assemble the bike together and in order to meet the Australian minimum wage will be paid $18/hr. It will take approximately 4 hours to put together one bike and thus will cost the business $72 (AUD) for each bike to be assembled. As a result, the materials totalled with the labour costs adds to the breakeven price of $311, and the market price of $400. The market price will be set at the beginning of the product lifecycle as it will still be able to generate profit that can overtime be put towards advertising, marketing, packaging or whatever is necessary to enhance its position within the market. Furthermore, the market price makes the bamboo bike competitive within the market and more affordable for the target market of young adults and families to purchase.

Promotion/Place: Nathan, word count 225

Promotion

The promotion methods of advertising and public relations will be most effective for ‘BambooMotion’. The use of advertising will allow for customers to become aware of the product as it is new to the market. The public relations method will generate a low-cost effective way of marketing the product by creating good customer relations and in turn resulting in the community gaining a positive perception on the business. As the target market for this product is young adults, the most successful use of advertising would be on social media and in Australian bicycle magazines such as ‘Bike Australia’. The use of social media advertising would be effective as majority of young adults use different forms of social media, thus meaning it would reach the specified target market.

Place (Distribution)

The use of exclusive distribution would best benefit ‘BambooMotion’ as it would mean that the products would be distributed through single intermediary for each specific region. This means that they would be distributed by a single intermediary to each ‘Reid Cycles Australia’ store. The distribution channel will involve the producer ‘BambooMotion’ selling to ‘Reid Cycles Australia’ who will then sell to consumers. The implementation of a trigger to reorder system would suit ‘BambooMotion’ as it would make sure there is always stock available for consumers due to order lead time, usage rate and safety stock.

Budget Financials: Giulia, word count 240

To maintain the product image as a cheap environmentally friendly bike it’s important to balance Variable costs and Fixed costs budgets with the expected revenue in order to reach the objective and meet the business’ profit expectations.

To be more specific, the total Fixed costs of the Bamboo bike will be 110.000$ divided in 50.000$ for a yearly warehouse rent, and approximately 60.000$ for a promotion budget divided in:

·        15.000$ to maintain social media sites

·        20.000$ for magazines advertisements and collaborative advertising through bike stores

·        10.000$ for a point of sale display (at ‘Reid Cycles Australia’ shops)

·        15.000$ for sponsorships such as promotional events or sport events

Additionally, to be recovered on the first year, roughly 2.000$ for ‘Research and Development’.

On the other hand, the total variable costs, as stated in the Marketing Mix Strategy above, will turn around 325$ per bike, divided in 311$ for manufacture and a sale commission of 3% of the revenue (14$).

Established these estimations, the break-even point, based on the price of 450$, would be 806 units, that are planned to be sold in 7 months in the worst scenario (such as selling only 4 bikes per day). However, our objective would be selling 5000 bikes in one year at a penetration price of 400$ from multiple ‘Reid Cycle Australia’ stores, which would lead to an expected profit of 273.000$.

Implementation/Evaluation

Conclusion