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0 -Introduction --Situational analysis --Target Market ---Market Needs -- Market Trends --SWOT Analysis --Marketing Position -- Key Product Offerings --Key Competitors --Competitive Edge - Marketing Objectives --Marketing Strategy --Implementation and Control --Sales Forecast -- Marketing Budget --Conclusion -Bibliography -Appendices
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1. Executive Summary
Page 1 of 12 | 5 January 2011
<Business Name> | Business Plan
Allegra's Project Vélo study reports that sales of cycles will touch four million units this year. The British cycling industry and in particularly Halford is in a unique position to take advantage of the trend. Cycling is considered to be an affective stress reliever and an excellent cardiovascular exercise. etc. Although Halfords already has the highest turnover in the car maintenance and enhancement market. A recent industry trade publication shows that 94. Page 2 of 12 | 5 January 2011 <Business Name> | Business Plan . competitive pricing(achieved through scale of purchasing power to compete with small independent stores. It also has its operations in UK’s retail cycling market. The managing consultants state that the 6% of adult bikes bought in last 1 year costs more than £1. An increase in the number of members in cycling clubs has also been noticed. It has also reported that there will be an increase by 15% for the same year. A good upturn has been experienced by the cycling industry due to the shift in the culture. Its national store portfolio. Situational Analysis In recent years. There is a tremendous growth in the sport as a large number of people are becoming aware of its health benefits. economic recession. 2. comprising of new cycles sales and sales of cycle accessories. the Labour government initiated The Cycle to Work Scheme. organised by Cycling England. Oscar & Maria . The retail industry has also benefited largely as people have become more aware about the positive effects related to a healthy lifestyle. which may threaten its market position.1bn in 2010.Halfords is UK’s leading seller in car maintenance and car development market.5% of people cycle for fitness. customer service offerings and strong brands distinguish Halfords from competition. the company has to deal with strong external influences – competition.2010). The interest has risen across strata.. In 1999. It allows the employees to purchase cycles tax-efficiently and has played a big role in getting people on their cycles. 2012 Olympic Games and programmes encouraged young people to take up cycling. wide product range.000 while the average cost of a cycle (excluding children’s cycle) is more than £300 in UK. An estimate was made that it will cross the £3bn mark by 2015. in Hull. This business strategy plan is aimed at positioning Halfords and its products as being competitive during June-September 2011. A 2010 Mintel report shows that 12% of adults in Britain cycle regularly whereas 6% cycle most days. Allegra Strategies reported that UK’s consumer value for cycles and cycling goods will increase by more than £2. the bicycle industry in Britain has experienced a remarkable change that has allowed them cash-in on the latest economic trends.
2. but also saves time and space in Hull. Using Bicycles as a means of transport is not only economical. According to Mintel. Halfords is a major promoter for cycle2work scheme. Target Market While Halfords hopes to cater to population in Hull. there are university students who comprise of Halfords target group. This governmental scheme was introduced to encourage the employees to cycle to work by providing them tax benefits like employees can make huge savings on a new cycle and its safety items. Drop off and pick up facilities convenience are vital when the cycle require maintenance servicing. the segment that is budget conscious and the cycling aficionados who want to keep abreast of with the most recent cycling trends. Employees require a stable as well as a comfortable cycle which comes with a full range of accessories. Apart from business employees. Their families ride bicycles as well.. The policy offers tax benefits for cycling to work. it aims to target 2 buying types. especially in the business district. 2010 Bicycle retailers have experience 50% rise in sales on account of this scheme. Shapiro notes. Hull’s Thursday Road Club also another major association.It should be noted that Hull has various bicycle associations such as. "grouping potential customers into fairly homogeneous segments enables you to do your marketing with a carefully targeted rifle rather than with a shotgun scattering pellets every which way”. White collar employees find it easier to cycle to work rather than use public transport.1. and they will patronise a shop that gives personal service University students Page 3 of 12 | 5 January 2011 <Business Name> | Business Plan . the City Road Club (Hull) which has approximately 200 serious trail riders who take the advantage of Hull’s miles of trails and Hull Cycle Speedway Club in Hessle which provides a huge range of fun activities like training and coaching sessions for regional and national competition in the sport of Cycle Speedway. Halfords customer profile can be categorized into 2 distinct markets: White collar employees UK government’s Cycle2Work Scheme has enjoyed huge popularity since 1999.
in need of parts and eventually the retailer would purchase their products. Each wholesaler has their own niche market to some degree. It is very well acknowledged that the cycle trade has small limits. fenders. and are enthusiastic about riding their bikes in mountain trails. and be assured that their bike will be ready for the ride home. The bicycle shops must always bank on accessories and service to produce earnings. students are the main market for leisure equipments They are health conscious and would ride to keep fit They are brand conscious yet look out for something that is affordable/economical they look out for expediency of sales and service 2. etc.University students use bicycles as an inexpensive alternative to public transport.4. Friendly and healthy bond linking cyclists and shop staff. Earnings are recaptured through elevated sales in accessories and service departments. SWOT Analysis for Halfords Page 4 of 12 | 5 January 2011 <Business Name> | Business Plan . Various styles of bicycles.2009).2. Convenience offerings where the cyclist can leave their cycle behind. but generally they have an equitably wide product range. Closeouts can expand retail traffic exponentially and considerably increase the store’s bottom line with decent limits. They are also attracted by athletic pursuits. available in every size A good collection of bicycle accessories such as locks. lights. A great deal of replacement components and service parts. Market Needs Our market niche has a number of specific needs that form the main focus of our strategy: Various cycles at different prices. Currently. the market trend has been on a low for bicycles sales. and 100% for garments (The Independent. 75% for gears. go for class or work. For local shops it is even more difficult to wrangle with the large mail order houses. to scheduled maintenance plans and support.3. Market Trends In the past six to nine years. 2. 10-15 different wholesalers serve the whole industry. A cycle retailer would contact a distributor. 2. 30% for the bikes. tires. Good customer and maintenance services from fixing flat tires to drop in repairs. seats.
3. 642 stores across Nation including 403 super stores. The company will take advantage of its competitive strengths to ensure the proper positioning in summer (june-september) 2011. instructions on proper use and repair and many more. Available within 20 minutes’ drive 0f 90% of the UK population Owners are experience in retail sales and bicycle industry Weaknesses Relatively higher price Opportunities Encouraging lifestyle the trend of is Threats active Online cycle selling as well as web catalogue selling and service. being Price pressure is generated wholesale/mass suppliers by Population growth experienced by the area. A huge range of cycle parts and accessories are also sold. training. An alternate means of transport due to increase in fuel price and less parking place.Strengths Cycling is an easy and low-impact means of exercising which can be Seasonal challenges of the business enjoyed by people of all ages. specials and other deals. Government support and funding Effect on the power of spending due through schemes like Cycle2Work to fluctuations in the economy. Market Positioning Halfords is in a cash cow position in the BCG growth share matrix as it receives high relative market share but a low market growth rate. Page 5 of 12 | 5 January 2011 <Business Name> | Business Plan . Excellent customer services are Access to Capital provided such as: bike fittings. safety tips. and by offering bigger margins. It wants to continue to position itself as the premier bicycle retailer that offers regular closeouts.
the range is thoughtfully chosen basis the target market. headlights. computer speedometers. Key Product Offerings Apart from its huge share in the car maintenance and car enhancement market. spokes. and sport/touring/racing road bikes a distant third. retro-cruiser is a close second. and cable housings are firmly maintenance. Customers will be able to find products at very nice margins. big parking areas and longer working hours – a business model that competitors have not yet been able to replicate(Annual Report 2010) Page 6 of 12 | 5 January 2011 <Business Name> | Business Plan . water bottles. panniers/back packs/messenger bags. bottom brackets. cargo racks. cables. bike storage racks. Key Competitors Halfords current local competition can be categorized into two major groups: Motorworld: Motor World is the only other national bicycle retailer that operates in the same product categories as Halfords. and auto roof rack systems all fall in this category. such as headsets. derailleurs or brakes. to offer unmatched product line and a full range of maintenance and convenience services to customers. fenders. 3. Parts: Cranksets.The company will continue to exploit its large portfolio of stores. helmets. social. It will try and cash in on the government’s tax relief policy and other economic. uncharacteristic of the bicycle industry. child seats and trailers. Accessories and Clothing: Locks.1. Others. The out-of-town locations allow Halfords to offer its customers large professional stores. comfortable seats.2. tires. While Motorworld has operations limited to high street locations. Halfords has stores located conveniently at out-of-town locations as well. are both vital parts and upgrading trimmings. chains. Since its is nearly impossible to carry all accessories. environmental and health benefits of cycling to promote its products and services in Hull. pedals. Halfords Cycles product range in the Bicycle market includes: Bicycles: Chiefly in the mountain bike style. 3. Latest published accounts have quoted Halford’s turnover as being as much as 12% larger than that of Motorworld.
3. market leadership position. creating an internal training and skills development program for staff To achieve additional sales growth and operational margins To extend its range and service advantage Maintain a financially healthy business and control costs To leverage the Halfords brand in multi-channel To take complete advantage of current and future market opportunities 4. giving Halfords an edge over independent cycle shops. a well built track record of earnings growth and cash generation. However these small operations stock no more than 30 bicycles and have limited selection of bicycle accessories.Independent cycle shops located in Hull: Independent bicycle shops located 15 miles surrounding Hull provide staunch competition as they find it easy to attract the local population. Marketing Objectives The objectives for Halfords are to: Maintain and expand our reputation for high quality service and sales. Based on Ansoff’s growth strategies. a nation-wide portfolio of superstores that will be hard to duplicate. Its competitive power comprises of: a good assortment of defensive strategies and expansion markets. Competitive Edge Halfords is positioned well to take advantage of current and future market opportunities. 3. Halfords marketing penetration strategies allow it to maintain leading position in the cycle retail market in Hull.1 Marketing Strategy Halfords marketing strategy is based on remaining the resource of choice for local bicycle users especially the working and the university student population in Hull region. the company will continue to experience profits. In Page 7 of 12 | 5 January 2011 <Business Name> | Business Plan . By maintaining its cash cow position. distinguished brands recognized nationally and with extensive mass appeal. powerful negotiating opportunity with supplier due to its market position and hold 4.
but the five types of bicycles will be offered within the following price range Mountain Road Hybrid Comfort Youth $200 to $1200 $200 to $1200 $150 to $1200 $150 to $600 $125 to $400 Halfords wants to be a popular choice not only for white collar professional and cycling enthusiasts. Additionally. The price range for maintenance will vary. For the working population. tools and lubricants. gloves. wheels. and repairs. we will offer bike deliver facilities free of cost within the Hull area.Kotler defined product as "anything that can be offered to a market to satisfy a need”. clothing. Place/Location Strategy. hybrid bikes for on and off road performance. lights. and no suspension mountain bikes. Pricing Strategy. as Page 8 of 12 | 5 January 2011 <Business Name> | Business Plan . tubes. Repairs and service will also be provided on location. and customer service (including repairs and tune-ups) would be the base of our marketing Our marketing mix will use advertising and promotions as key elements in promoting our products and services.Since Halfords enjoys a good position in the market. children of every age group and enthusiastic cyclist.addition. Halfords will focus on sales of five categories of quality and high performance cycles comprising front. pedals. tires. road bikes to facilitate office goers. individualized. hydration.For the months of June till September 2011. but also wants to appeal to the cost-conscious university students Thus the pricing orientation of our products will vary from being inexpensive ($200 to $599) to the expensive range ($600 to $1200). proper bike fittings. pumps. locks. comfort bikes focused towards recreational user. full suspension. Great performance in areas of product selection. it also enjoys a strong bargaining position with it suppliers. See Appendix 1 Product Strategy. In turn. Halfords will provide first-rate. product quality. Halfords will also focus on selling bike parts and accessories like helmets. matchless customer service… including. and youth bikes for kids above the age of 6 years. back seats. shoes. saddles. We will also promote our products and services through our business website that will allow users to contact the store and view our complete list of products and services. To add to this superior quality product range. our product range offers something for all types of bikers – The casual cyclist who cycles occasionaly for enjoyment.All our products will be distributed through our out-of-town super stores. instruction on safety and proper use. this allows the company to offer high value product and service pricing to its customers.
we want to increase this share (Halfords Annual Report. Above all. promotions and events. • Page 9 of 12 | 5 January 2011 <Business Name> | Business Plan . • Inflation in gas prices will increasingly support substitute transportation means among local population. Visibility for Halfords cycles will be generated using a multi-channel advertising campaign. 2010). believes that the pre-requisites to promotion are knowing who one is aiming at and making sure that one's service really answers their needs. Halfords will also sponsor business community events and government environment protection schemes to raise awareness of cycling a healthy/environmentally friendly medium. Promotion Strategy. and spring specials. printed promotional materials. and promotional events will offer additional advantage. Implementation and Control The financial plan is being developed basis available marketing and sales data for previous years. Radio and TV advertisements will be aired regularly. Our website will be the most up-to-date source of product information and availability. In addition. Promotional flyers. Halfords jerseys etc will be used to promote the brand among Hull population. The student population will be lured through lucrative back to school discounts. Halfords will tie up with the two local biking clubs to host and sponsor the Mountain Bike Race held every August. Following assumptions are made in building the plan: The discretionary purchasing power of the Hull population will either remain stable or increase.1991. customers will be surprised at the level of customer service that they will receive at Halfords. radio. Newspaper advertisements will be placed in popular business papers for working population of Hull and also the local university’s paper.well as keep account of latest deals. Our business website. planned marketing and promotional activities. Television. and newspaper advertisements will be used to promote products amongst Halfords target audience.Chandler. and keeping in account the changing market trends. coupons. revenue and expenses. • The lack of parking area will continue to grow. 5. Currently 6% of Halfords sales are online and by integrating our business website with our store operations. All activity on the web and participation in trade shows will be highlighted on the business website making it a unique source of information. like using cycles for daily commuting.
People will also shop for the latest line of bicycle accessories and apparel. giving us a great opportunity to capitalize on this market. knowing that sales of bicycles nationwide increased by approximately 6% in 2008 Starting April 2011. which again is a service that is hard to find in Hull or the surrounding communities. including tune-ups. Hull also has a local university whose students will not only take advantage of the many recreational trails in the city. Sales Forecast The following information supports our belief that there is sufficient demand for a bicycle. Sales revenues will peak in the month of August. Hull is home to two bicycle associations. like accessories and maintenance services in Hull area: Halfords will be the only specialty bike retailer in this part of the state. Halfords superstores will see a large demand for repair and tuneup services as people take their bikes out of the garage and get them ready for the warm weather months. As the summer nears to a close in September sales start to slightly decrease and dramatically tail off October. 5. We will spend an additional £2. providing items that no other bicycle specialty store or mass market retailer in the state can match.2.000 to pay for the production and filming of our television commercial and pay for the air time on local cable television. and families are fairly large consumers of bicycles. Hull is a biker friendly city with many trails for all different skill levels that attract bicycle enthusiasts from all over the state. and finally the strong performance of the state and local economy was also considered when forecasting sales revenue. Forecasting sales from 2007 to 2008 and 2008 to 2009. 13th Edition). it also offer bicycle repair services. Marketing Expense Budget Expenditure on marketing is to be planned at just about 1. which is Page 10 of 12 | 5 January 2011 <Business Name> | Business Plan . Hull has a strong family presence.Government will continue to offer tax benefits to bicyclers with schemes such as cycle2work • The cycling industry will continue to grow • 5.1. Sales revenues will grow in June and July as our advertising campaign starts to take shape. but also use bicycles for transportation. we assumed a 5% increase in sales. Halfords provide a full line of bicycle parts and accessories.76% of total sales (Retail Sports Goods rate found in Financial Studies of Small Business. See Appendix 2.
Page 110-119 Retrieved 22 November 2010 http://www.bike-eu. Issue 1.com/news/4456/uk-survey-sales-4-million-bikes-but-halfords-reportsdecline. Bibliography Oscar González Benito.000 again.html. Conclusion The bottom line for Bicycle sales by detailed analysis of all possible marketing strategies and views will be reflected in the sales volume of Halfords during summers(June-September) 2011 in Hull. For the period of June –September 2011.approximately£ 2. Examining trends in market and market behaviour may at times result in a vaguely different depiction from the real outcome. The understanding of the circumstances that are possible through the study will assist in understanding the market positioning of Halfords Cycles during summers 2011. María Pilar (2010) ‘Retail pricing decision and product category competitive structure’ Decision Support Systems. our marketing expense budget returns to 1. £2. See Appendix 3 6. Volume 49.900 will also be spent as cost towards management of our business website. Retrieved 24 November 2010 Page 11 of 12 | 5 January 2011 <Business Name> | Business Plan .76% of sales.
Retrieved 6 December 2010 Benson P. Shapiro. Weingand.hullcc.97821&_dad=portal&_schema=PORTAL Retrieved 29 November 2010 The Independent (2009) ‘Cycle market: Moving into the fast lane’ http://www.62. 13th Edition.124. Retrieved 4 December 2010 Philip Kotler in Darlene E. 29 November 2010 Page 12 of 12 | 5 January 2011 <Business Name> | Business Plan .independent. Halfords Annual Report. 51(5). Allegra Strategies Limited Project Vélo 2010 Report ‘UK Cycling Market Study’ 2010. p. "Marketing for Nonprofit Organizations". in Harvard Business Review. Retrieved 4 December 2010 Mintel (2010) ‘Social Media is becoming nations top passtime’ http://oxygen. Retrieved 29 November 2010 Mintel (2010) ‘Broader Market Environment’ http://oxygen.co.mintel. 1991.com/sinatra/oxygen/index/letter=1. Retrieved 4 December 2010 Retail Sports Goods rate found in Financial Studies of Small Business.html. Retrieved 22 November 2010 Mintel (2007) ‘Wireless cycle equipment launched’ .com/sinatra/oxygen/search_results/show&/display/id=479870/display/id= 227734. p. in Aslib Information. Karen Chandler. "Practical Promotional Strategies for Your Information Service". p.com. Why Cycle (2010).com/sinatra/oxygen/rps/#1_0_201012_1_0. www. http://www.uk/portal/page? _pageid=221.(1987) ‘Marketing-Planning Library Information Services’ Libraries Unlimited.mintel.48. http://oxygen.gov.uk/news/business/analysis-and-features/cycle-market-movinginto-the-fast-lane-1702191.halforscompany. 19(2). Retrieved 6 December 2010 Council RC.mintel. 1973. Retrieved 4 December 2010 Halford Group Plc (2010).
2 The Gaurdian 1. Great Britain Parliament. Sales promotion 4.3 MTV 1. Campaign research --During the whole term During the whole term 1 / week 4 1 full-page.2 BBC 1. Public Relations 2.2.2 BBC Radio 1 1.3. Retrieved 6 December 2010 Appendix 1 – Marketing Plan Roll Out (June-September 2011) 2011 Marketing Communication Tools 1 Advertising 1. .3 Cycling Weekly 1.1.1 British TV 1.1 Cycling News 1.2 Internet marketing 3. commercial 2 / day 2 / day 2 / day 15 sec.4.2 TV 1.1.1 Print: magazines 1. 4/c 1 / month 1 / month 1 / month 20 sec.1 Online advertising 3.1 Media relations: press release 3.4.1 E-mail marketing 3.1 Cash discounts 5.3 Choice FM 2. Transport (2009).220.127.116.11 Radio 1. commercial 1 / day 1 / day 1 / day Frequency June 4 11 18 25 July 1 8 15 22 29 August 6 7 13 20 September 3 10 17 24 Page 13 of 12 | 5 January 2011 <Business Name> | Business Plan . Direct marketing 3.2 Promotion on Facebook. ‘Cycle to work scheme implementation guidance’ London: Crown.1 Planet Rock 1. MySpace and Twitter 4.3.4.
627 51.496 466.Appendix 2 – Marketing Plan Roll Out (June-September 2011) Sales Bicycles Parts/Accessories Repair Total Sales June 193.747 159.569 152.025 385.220 September 220.875 144.376 404.844 425.971 August 213.258 53.330 Page 14 of 12 | 5 January 2011 <Business Name> | Business Plan .687 July 203.026 49.787 48.485 166.
900 2.Appendix 3 – Marketing Expense (June-September 2011) June .250 1.000 250 7.76% Page 15 of 12 | 5 January 2011 <Business Name> | Business Plan .Sep 2011 Television Ads Radio Newspaper Ads Web Marketing Promotional Events Printed Promotional Materials Total Sales and Marketing Expenses Percent of Sales 2000 1.000 2.500 1.
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