Executive Summary
Topcars is an online shop that deals in the selling of car accessories and car designs, based in Cambridge, United Kingdom. This marketing plan highlights the company’s targeted market segments and the strategies that it will be making use of in order to attract customers and generate steady revenue. Topcars is not just another average online car business; its primary and unique focus of providing tailor-made solutions to its clientele seeking to advertise, sell, or buy car accessories certainly gives it an edge over competitors in the market.
This e-business will mainly target markets in the UK, Europe, and other global regions. With the current trends globally, the internet is arguably the largest global source of information, especially on products, business services, and advice; this is according to Mengham, author of an article titled ‘5 Advantages of Online Business vs. Offline Business’ (MengHan, 2007). The main reasons behind establishing Topcars as an online business are a provision for a worldwide presence, ability to conduct both cost-effective marketing and promotions, all of which translate to higher returns and better customer service.
The company’s services include the sale of various top-of-the-range car accessories, car designs (interior décor, panel beating, modification, amazing body kits, paint jobs, graphics car branding, in-car entertainment solutions, and sound system installations) (Auto Guide, 2010 – a web-based platform providing information about automobiles and their accessories). As a company, we will fund our services from online advertising, by our clientele, of new and used vehicles for sale. We also aim to seek advertisement sponsorship from major car accessories manufacturers who will market their products using both our shops and website; indeed, William M. Luther, the author of a book titled ‘Marketing Plan’ is on the view that selling online advertising space to other vendors can make the firm successful (Luther, 2001, p.27).
Within the first 3 years of operation, we expect to raise the sale of accessories and car design to generate most of our revenue stream. This is expected to come from increased market share resulting from successful advertisement campaigns. In addition, revenues are expected to rise due to the goodwill of manufacturers who will be advertising through us, given that customers will have confidence that we are partnering with the successful manufacturers. Moreover, as J. Nicholas DeBonis, Eric W. Balinski, and Phil Allen, authors of the book ‘Value-Based Marketing for Bottom-Line’ state, advertising to our target market with an indication that we value them and are looking forward to exceeding their expectations can significantly enhance market share (DeBonis Balinski and Allen, 2003, p.71)…
Vision
According to (Werther and Chandler, 2010), a vision statement usually gives direction on the future of an organization, as well as offering motivation and a reason for behavior change to employees. In the case of Topcars, the vision reads as, to be the premier company providing high-quality auto accessories to multiple market segments with minimal risks, through the use of modern technology (Werther and Chandler, 2010, p. 28).
Topcars leverages the prolific use of e-commerce to ensure that they reach a wider market and provide a broad range of products and services crafted to suit clienteles’ needs. The company aims to achieve this by employing a multi-pronged strategic approach, which entails social media, email marketing, and search engine optimization plans (Luther, 2001). This will see us gain access to a huge chunk of market share.
Objectives
- To increase sales to over ₤400,000 by the close of the first year of operation by increasing our exposure in the marketplace (Rashmi, et al, n.d).
- To increase market share by 20% in the next 3 years through focusing on the underutilized high-end target market, as well as through attending auto parts symposiums and placing advertisements in one of the industry publications (Rashmi, et al, n.d).
The Challenge
Topcars is an e-business that deals in the sale of car accessories and car design. The car accessories include both interior and exterior, among them being but not limited to Car Alarms, CD Changers, Car Stereos Audio & Visual /DVD/MiniDisc /USB, Door Accessories, Door Lock Knobs, Gear Shift Knobs, Head Rest, Humidifier, Interior Door Handles, Rear View Mirrors, Side View Mirrors, Sight Glass, Chrome Plates, Block Heaters, Car Clocks, Cargo Holders And Organizers, and Dashboard Gadgets (Auto Guide, 2010 – a web-based platform providing information about automobiles and their accessories).
These products are all fast-moving as attested to the number of businesses dealing in car accessories in Cambridge, UK. According to Touchlocal, a web-based directory providing local news and business reviews around the UK, there are at least 20 car accessories dealers in Cambridge, UK, with Discount Autoparts being the largest (Touchlocal, 2010). The most popular accessories are electronics as they are popular with a majority of motorists in the UK market.
The other car accessory businesses in Cambridge include the following: Halfords, Wilco Motor Spares, EMG Mitsubishi Cambridge, Discount Autoparts Ltd, Express Auto, and Bonnets (Cambridge Online, 2010). Being a new company in the market, Topcars will face stiff competition coming from already established companies such as Parco Autoparts, Halfords, Express Auto Electro, and Discount Autoparts, DAP Cambridge, and Wilco Motor spares among others (Cambridge Online, 2010 – a web-based Cambridge auto parts dealers listing).
In-car design, the range of services that we will be offering is all geared towards customizing and personalizing our clients’ cars. Emphasis will be laid on ensuring that our clients’ cars stand out from the crowd but still possess unmatched elegance, style, and a definite touch of class. This includes both the exterior and interior customization of cars.
As per Autoaccessories (2010), a firm that deals with car accessories in the UK, exterior customization entails the fitting of any of the following: alloy wheels (aftermarket versions), window tinting, bumper kits, side skirts, rear wings, Full body customized paint jobs, and Modification of doors. On the other hand, the car interior customization will entail the fitting of any of the following: stylish seats (sports seats, bucket seats), steering wheel (aftermarket versions), and pop-up entertainment system (DVD displays), and air conditioning and lighting systems (Auto Guide, 2010).
Market Analysis
According to Damien McLoughlin and David A. Aaker, authors of the book ‘Strategic Market Management’, market analysis simply builds on both customer and competitor analyses in order to come up with strategic opinions about a particular market (or submarket) and its associated dynamics (Aaker and McLoughlin, 2010). The main aim in carrying out this is to establish the attractiveness or viability of a market.
This is particularly useful as it facilitates a much elaborate perception of the need, challenges, and opportunities that exist within any given market. In addition, Robert E. Stevens, Philip K. Sherwood, J. Paul Dunn, authors of the book ‘Market Analysis: Assessing your Business Opportunities’ contend that market analysis involves “identifying the market, identifying market factors, estimating market potential, and estimating revenues anticipated” (Stevens, Sherwood, and Dunn, 1993, p. 33). Moreover, the ideas generated from the analysis, as Michael J. Croft, the author of the book ‘Market Segmentation’, notes will be useful to understand how products will be introduced into the new market given that there will be customers with different characteristics (Croft, 1994).
There are several dimensions of both the Cambridge and online markets that we shall be considering. These include distribution channels, market trends, key success factors, market size (current and future), market growth rate, market profitability, and industry cost structure (Aaker and McLoughlin, 2010).
Size of the market
This was accurately determined from existing literature concerning the present performance of existing similar firms. It is a tool for evaluating the potential of a market and its viability to sustain the profitability of yet another entry into the market (Aaker and McLoughlin, 2010). Some sources of information that were considered for evaluation of the market size include government data, financial data from major players, and trade associations (Aaker and McLoughlin, 2010).
The growth rate of the market
From the information collected, there is a sustained potential for growth within the online car and parts market (Aaker and McLoughlin, 2010). This is as a result of the robust increase in the adoption of e-commerce is not only in the UK and Europe as a continent but also globally with over usage and access to the internet becoming more popular worldwide (Aaker and McLoughlin, 2010).
The market profitability of car accessories and design businesses ranks among all time highest in Cambridge, UK, and even globally. The number of people who own cars globally is ever increasing especially given that people are purchasing both new and used vehicles (Porters, 2008). By comparing the number of other similar businesses in Cambridge, it is factual that the trading of car accessories and car design is a very promising and profitable venture.
According to Michael E. Porter (2008), author of the book ‘On Competition’, the time-tested means of evaluating the suitability and profitability of a market are; the barriers to entry, suppliers, buyers, substitute products’ threat and similar firms’ rivalry. This framework, known as Porter’s five forces, identifies five factors that influence the market profitability (Porter, 2008).
The industry cost structure is a fundamental factor in the success of any industry. We have employed Porter’s value chain model in the determination of where to add value and isolate unnecessary costs. This model also facilitated the development of competitive strategies (Porter, 2008).
Since we are an online business, our choice of distribution channels will be crucial in ensuring we deliver goods to our customers as efficiently as possible. The existing distribution channels were considered and the world’s leading logistic services provider, DHL was vouched to be our sole courier services provider. According to Deutsche Post AG, the official website for DHL, DHL is a member of the Deutsche Post DHL Group and it is one of the leading logistic firms in the provision of international mail services, air and ocean freight, road and rail transportation, and contract logistics (Deutsche Post AG, 2010).
Market trends
According to Auto accessories, a firm that deals with car accessories in the UK, there is an upsurge in the demand for interior accessories and especially electronics (sound, video, and lighting accessories) (Autoaccessories, 2010). This trend in the market greatly favors the growth of our business and enables us to focus on stocking the latest and popular accessories that the market has to offer.
Our key success factor is that, unlike a majority of our competitors in Cambridge, we are primarily an online business, which enables us to capture a much wider market.
We will also greatly benefit from the other advantages of doing business online, including having a global presence, fast, cost-effective, and efficient marketing tool, and most importantly, higher profits (Anon, 2007).
SWOT Analysis
Michael J. Mard, Robert R. Dunne, Edi Osborne, authors of the book ‘Driving your company’s value: strategic benchmarking for value’, state that, “SWOT analysis gets its name from the four concepts it attempts to analyze – the company’s strengths, weaknesses, opportunities, and threats” (Mard, Dunne and Osborne, 2004). In carrying out this analysis, we explored our business environment by considering all the internal as well as the external environmental factors.
For our strengths and weaknesses, we considered all of the internal environmental attributes in our firm. Basically, a SWOT analysis will enable the firm to evaluate itself on how well it is internally endowed (including its successes), identify those areas that have become a challenge compared to what the competitors have, any available opportunities in the market that the company or its competitors have not tapped and major shortcomings or obstacles that the firm is likely to encounter in the future. All these elements will provide a clear indication as to whether the firm should diversify to new markets or not (Mard, Dunne, and Osborne, 2004).
Strengths
The goal of the company is to be an industry leader in the provision of quality, affordable and efficient products to on-line customers. Online presence and strong partnership with leading manufacturers of car accessories, and logistics service partner, DHL, has enhanced the firm’s distribution network (Mard, Dunne and Osborne, 2004). The major strength that the firm boasts of is cost-effectiveness due to efficient systems and a manageable workforce. In addition, our good relationship with some reputable manufacturers and suppliers has enabled us to have a good rapport with customers (Mard, Dunne and Osborne, 2004).
Weaknesses
There are competitors on the online market willing to offer similar services at even lower prices. In addition, there is the availability of cheap or counterfeit car accessories; however, this may not hinder the firm’s progress as the firm can counteract by providing enhanced and high-quality products, which are elegant and durable (Mard, Dunne and Osborne, 2004).
This is a new business, which would have to compete with already established firms; however, the company shall overcome this by implementing a strategic marketing plan to ensure that it makes a successful entry into the market (Mard, Dunne and Osborne, 2004). From there, the company shall then forge ahead to see to it that it exploits the market.
Opportunities
The rapidly growing use of the internet as a source of information will greatly benefit us in terms of marketing. As stated by Anonymous, the author of the article ‘Advantages and disadvantages of online business’, views that a twenty-four-hour global presence service is a great boost to any business (Anon, 2007).
The business will also reap from the other benefits linked to doing business online such as access to a wide and open market, low start-up costs for doing business, inexpensive and cost-effective means of reaching wide markets, very powerful and effective advertising tool (MengHan, 2007).
Threats
The possible challenges facing the company will be the acquisition of strategic and reliable partners (accessories manufacturers, financial institutions, and internet firms) as the company is new (Mard, Dunne, and Osborne, 2004). Competition from already established firms dealing in similar products and services and the availability of cheaper substitutes to our range of car accessories will also give us a challenge in the market.
Others include the demerits of doing business online such as the low barriers to entry, implying that it is very easy for a competitor to develop a similar online business concept. The challenge of imitation means that it is very easy for competitors to copy our business model. For example, YouTube an online video-sharing website, according to a study done by Abram Sauer, Author of the article titled ‘You Tube – Me WatchIs: the rapidly growing video hosting site in danger of being eclipsed by rapidly growing imitators? Is the rapidly growing video hosting site in danger of being eclipsed by rapidly growing imitators’, is faced with numerous competitors (Sauer, 2006).
This includes websites such as AOL.com (a web-based media house that provides a wide range of online services including news, entertainment, and advertisement among others), who are currently modifying their video based on You Tube’s success, and CNN who a re-introducing CNN Exchange (Sauer, 2006). Other sites include; Eefoof.com, Panjea.com, Revver and Blip TV, and Dabble.com (Sauer, 2006)…Another major problem is the issue of dealing with spam and malicious programs that pose a huge risk to the stability of the website (Sauer, 2006).
Market Segmentation
This refers simply to the establishment of strong and cordial relationships between a business and its customers, which is achieved through a thorough understanding of the needs that they have and fulfilling them. Art Weinstein, the author of the book ‘Handbook of market segmentation: strategic targeting for business and technology firms’, refers to segmentation as the process of classifying the potential customers in a given market into groups each having similar characteristics and needs (Weinstein, 2004). In addition, the entire process of market segmentation can effectively be divided into six basic steps, which include defining the market, finding the segments, narrowing down the choices, picking the winners, developing a planned attack, and staying ahead (Weinstein, 2004).
Since we have already identified our targeted market, it is worth noting that our segments would include the various global economic regions, which would influence the particular needs of customers found in them. We narrowed in and found out that in each region there were both the high-end and the low-end customers as dictated by their economic situations. Our target group is high-end customers. Having narrowed down to the specific market segment, we aim to attack it by delivering top-of-the-range products and services that befit their class and taste.
In a nutshell, it is worth noting that a business can succeed and stay ahead of the pack by always reinventing itself in terms of the quality of services and the range of products it offers (Weinstein, 2004). At Topcars, we intend to make our customers get value for money and we trust that this will get them coming back.
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