Abstract
Saudi Arabia is a region characterized by pronounced economic developments. Due to the increasing economic developments, a considerable number of residents own vehicles and pose as potential consumers of car wash services. Therefore, we are planning to start a car wash with the main target population of the business being the residents of Riyadh and expect that our market share expands to other parts of Saudi Arabia.
Currently, conventional car wash businesses in Saudi Arabia conduct their activities in a basic form. In the basic form, the companies rent a small place in gas stations and hire cheap labor with basic materials to clean the cars. The basic process leads to wastage of water, time, and is not effective in cleaning the vehicles.
The basic form of washing vehicles using manual and cheap labor damages vehicles and the individuals hired are prone to accidents. By taking advantage of this opportunity, a great investment will be available because the services offered will be of high-quality technology, adds more value, and saves more time.
Introduction
The Saudi Arabian market has one of the largest landscapes in the region, with a population of approximately 29 million people and one of the highest growth rates in terms of increasing population. The GDP of the Saudi Arabian Kingdom is $31,275 per capita, which displays one of the best economies in the world. As a result, the number of automobiles on the Saudi Arabian market is approximately 9 million, a factor that facilitates the successful creation and development of car wash business in the region.
Recent studies show that there are about 7.4 people who live in Riyadh, which is the capital of Saudi Arabia, with 4% annual growth (Cordesman, 2003). Riyadh has 1.6 million cars, and thus, the development of a car wash is one of the successful ventures in the region. Therefore, the report analyses the feasibility of a car wash business in Saudi Arabia.
Environment Analysis
Legal and Economical
Some of the legal procedures laid by the state that facilitate growth of car wash business include stricter rules that restrict individuals from cleaning vehicles everywhere. The government and the municipalities are setting strict rules and regulations where no one can clean his car even in front of his house because of the wastage. The new regulation will promote the mobile car wash in the market. Additionally, any water wastage that gets into the street from conventional car wash shops will be against the new regulation.
According to Eccleston and March (2011), the government of Saudi Arabia champions for water conservation, and hence, facilitates growth of companies that advocate for wise use of water. As a result, the regulation will increase the number of consumers, who clean their vehicles in car wash companies.
The economy is stable and the expected GDP growth will be about 4.9% by 2015. Stable economy of the country is very crucial to success of car wash companies since it leads to high disposable income that enable people afford to wash their cars in wash shops.
Social, Technology, and Environmental Factors
Social aspects of the marketing environment comprise of issues like interest, purchasing power, buying behaviours, and pressure from peers and friends. Some of the individuals, who influence potential consumers to purchase certain products, include families, friends, and the media (Luck, 2010). Remarkably, population of Riyadh has a large number of cars that is approximately 1.6 million, which means one car per household, while about 600,000 cars belong to the government and institutions.
The Saudis also have a custom that they usually wash their cars in the shops, even before the introduction of any regulation. All our competitors use basic technology, which is biotechnology that eventually pollutes and harms the paint of the car. The improved technology that our mobile company will use outsmarts our competitors and gives us a high opinion among them. It is imperative to understand that modern consumers are increasingly associating themselves with services that are environment friendly.
Purpose of Our Product
Our products will aim to serve the business company through satisfying consumer necessity of having clean cars by going to their preferred places, an act that saves their time and privacy. In marketing of products, customers are the kings and queens as they determine the progress of a company (Eccleston & March 2011). As a car wash company, we understand the importance of our consumers, and therefore, we will take the product to their houses or places of choice.
As a result, our potential clients will enjoy our services at the comfort of their places of work or residence. The mobile delivery of service implies that customers only need to contact the company, place their request, and relax waiting for the service. Since our company advocates for wise use of water, it will attract the majority of customers, who love eco-friendly products.
Vision, Mission, and Objectives
Our company has a vision of becoming the leader of car wash franchise chain in the GCC area. The mission of our company focuses on revolutionizing the car wash industry concept by providing astonishing services using the technology of automated car wash. In addition, the mission promotes the act of going to our customer premises and providing them the services at their convenience, while saving their time in an efficient process and a manner that is environmentally friendly.
Our objective is to target the business and government institutions in Riyadh. We have the intention that by the end of first year, we will be responsible for at least of 25% of the automobiles of interior ministries.
For effective growth and development of our business, we will divide Riyadh into 5 zones that comprise northern, western, eastern, middle, and south. Furthermore, we expect that by the end of the first year we will cover more than 80 % of car rental services. The expected projection of our market share will facilitate our expansion to the other main city after 3 years of operation.
SWOT Analysis
Strengths and Weaknesses
Some of the strengths of our company include water preservation, use of high technology, high productivity, and mobility of our services. Since our company understands the significance of our consumers, we will take our services to the premises of the customers conveniently without the need to wait. Our customized car wash has no wastage of water because we use steam of water, and thus, save water and reduce pollution.
Moreover, our product employs high technology, uses special detergents and special towels that do not damage the car paint. The higher productivity of our services takes less time than conventional car wash. The mobile nature of our services implies that customers can choose the appropriate time and place for them. After deciding on the appropriate time and place for them, consumers then make an appointment using one of the best software of appointment scheduling.
The major weaknesses associated with our company entails offering services at high prices because of the differentiated nature of our service. Since our business is capital intensive, our fixed cost is high as opposed to conventional car wash. As a result, most potential clients will be reluctant to purchase our services.
Opportunities and Threats
Provision of services that are eco-friendly and the power of consumers to make appointments with us so that we bring our services to them is one of our opportunities. Another opportunity associated with our company entails the act of providing additional services that complement our core service, which is a car wash. Some of the services offered alongside a car wash include fixing tyres, and changing oil and filters.
Notably, the fact that new entrants or competitors can imitate our new technology and processes of the business acts is one of the main threats that the company expects to face in future. Another threat related to the company is zero shifting costs, which can compel potential customers to switch to competitors even if they have to go there by themselves because of price reduction.
Competitor Analysis
High technology used by the car wash company, mobility of the company, and the eco-friendly nature of service is among the factors that increase the effectiveness of the company amongst its competitors. Although customers have an alternative, which is to take their cars to the conventional car wash, conventional car wash has a lot of time wastage and harm on the environment.
The fact that consumers have to travel to the location of the car wash by themselves surpasses the benefits such as low prices and the location that facilitates execution of services such as fuel or changing oil. In addition, the time spent waiting for other cars to leave is a factor that discourages a considerable number of individuals, especially businesspeople from using a conventional car wash.
Notably, some of the products used by conventional car wash are against environmental conservation because they use hoses, which cause a lot of water wastage and the detergents that harm the vehicles and pollute the environment.
Our Products
To market our products effectively, the company will customise the products to match customer needs. We will install all instruments used in the car wash. First, the water used is steamed and a tank installed on the upper part of the container. The tank helps the water that could go to waste return to the tank installed at the bottom. The act of using tanks at the upper and the bottom of the system is useful in the preservation and recycling of water.
By recycling water, our company complies with regulations of municipalities of having less water wastage in the street or public places (Cordesman, 2003). The second process is the environmentally friendly soap is sprayed all over the car. The third stage entails scrubs, which are vertical poles with cloth strips that move at high speed and lash against the car cleaning it in the process. In the fourth stage, the system uses water to remove any remaining stains and finally, the system sprays and dries the vehicle.
Target Market and Market Segments
Our target market is the kingdom of Saudi Arabia and we are focusing on Riyadh, which is the capital city where most government and private institutions are operational. At the beginning, we will enter Riyadh market, which has about 1.6 million moving cars. Moving cars refer to cars used by individuals or institutions and exclude cars in dealer shops. Therefore, our initial target market comprises of Riyadh, the capital city of Saudi Arabia, and thereafter, the whole country.
The market segments available in this market incorporate individuals, who are car owners and government institutions such as ministry of the interior, where each division uses several cars. Some of the departments that use several vehicles in the ministry of the interior are police stations and civil defence stations. Moreover, private institutions such as rental car services are also included in market segmentation.
Target Customers and product Positioning
Our target consumers incorporate government and private institutions since they are easier to reach and have several cars, and thus, facilitate execution of our services to more cars in a single place. Initially, we will not consider individual consumers since they are difficult to reach and have fewer cars so it would take time and decrease our productivity. However, in future, we might target individuals by putting our cars in places such as malls and streets like Tahlia, where potential clients gather.
Our company will position itself before customers by being the most efficient and productive car wash. Luck (2010) explains that a good positioning strategy incorporates provisions of convenient services to the customers that match their expectations.
We will provide our customers with more time to continue with their business without going to conventional car wash and waiting endlessly. In addition, by using our technology, we pay attention to small details that produce clean cars. Our detergents are environment friendly and have little harm, pollution, or damage to the client’s car.
Pricing Strategy and Location
Our pricing strategy will focus on the buying behaviours and purchasing powers of our target consumers. Since we understand the significance of our consumers, a good marketing research is vital so that our services meet consumer expectations in terms of quality and price. Remarkably, contemporary consumers are more concerned about product price as opposed to past consumers. The fact that we are targeting institutions and government vehicles implies that we need the maximum utility of our services.
The utility arises because the vehicles owned by the government and private institutions are more than individual vehicles (Cordesman, 2003). It is imperative to understand that our initial plan will emphasize on government and private institutions and later target individuals in social places such as malls and busy streets.
Essentially, our pricing strategy will focus on achieving consumer satisfaction, while maintaining the working budget of the company. Since we are mobile, we will only have a place to store our cars at the end of a working day. We will install an online booking system to schedule appointments for private businesses. Consequently, we will arrange our services to government organizations through contracts.
Conclusions
The kingdom of Saudi Arabia is fast developing economically, an element that has facilitated the purchase of several vehicles by individuals, the public, and the private sectors. Recently, the government introduced regulations that advocate for water conservation, which are instrumental in promotion of companies that practise the wise use of water. Since we are planning to develop a mobile car wash, the regulations are in our favour because we will practise water conservation and recycling.
References
Cordesman, A. (2003). Saudi Arabia Enters the Twenty-First Century: The Political, Foreign Policy, Economic, and Energy Dimensions. London: Greenwood Publishing Group.
Eccleston, C. & March, F. (2011). Global Environmental Policy: Concepts, Principles, and Practice. New York: CRC Press.
Luck, D. (2010). CIM Course Book 08/09 Assessing the Marketing Environment. New York: Routledge.