Cholo Bike - Marketing plan PDF

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Marketing plan...

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Course Title: Principles of Marketing Course Code: ALD-2103

Prepared by: Name M Ahbabur Rahman Reeana Roshnee Naznin Jahan Shemul Yeaa Habiba

ID 18211018 10211048 18211066 18211084

Prepared for: Rezaul Karim Lecturer Accounting & Information Systems Bangladesh University of Professionals Date of Submission: 09th April, 2019.

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Letter of Transmittal 09.04.2019 Rezaul Karim Lecturer Department of Accounting & Information Systems, Bangladesh University of Professionals.

Subject: Submission of term paper

Dear Sir, Here is the term paper that I assigned on the topic as per your request. The assignment has been completed by the knowledge that I have gathered from this course. I am thankful to all those persons who provided me important information and gave me valuable advices. I would be happy if you read the report carefully and I will be trying to answer all the questions that you have about the assignment.

Thanking you. Yours obediently,

M Ahbabur Rahman 18211018 Department of Accounting and Information Systems

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Acknowledgement

First of all thank goes to almighty Allah who has created me and provided me with the wisdom required for the research. We are really thankful to Rezaul Karim, Lecturer. His guidance has been of extreme help to us. His guidelines for this paper made it mandatory for us to seek learning in the work environment, which proved to be very gratifying. We would like to express our gratitude towards our parents & members of our family for their kind co-operation and encouragement which help us in completion of this project.

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Contents Executive Summary.....................................................................................................................................2 Mission........................................................................................................................................................3 Vision........................................................................................................................................................... 3 Tagline.........................................................................................................................................................3 Objective.....................................................................................................................................................3 Marketing Concept......................................................................................................................................4 Production Concept.................................................................................................................................4 Marketing Strategy......................................................................................................................................4 Market Segmentation..............................................................................................................................4 Demographics......................................................................................................................................4 CUSTOMERS IN TERMS OF TARGET MARKET...........................................................................................7 Positioning...............................................................................................................................................8 Differentiation.........................................................................................................................................8 Coverage Area.............................................................................................................................................8 Marketing Mix.............................................................................................................................................9 Product strategy......................................................................................................................................9 Branding Strategy....................................................................................................................................9 Pricing strategy........................................................................................................................................9 Promoting strategy................................................................................................................................10 Customer Service...................................................................................................................................10 SWOT analysis............................................................................................................................................11 SMART Goals.........................................................................................................................................11 PESTLE Analysis of CholoBike.....................................................................................................................11 Porter’s 5 Force Analysis............................................................................................................................13 Financials...................................................................................................................................................14

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Executive Summary CholoBike is a transportation startup, which provides an App-Powered ondemand ridesharing service for smartphone users. In the world of increasing popularity of bicycle sharing services, CholoBike offers more options of bicycles for the different types of users with different needs and wants. Currently the only bike sharing system operating in Dhaka is a dock-less bike sharing service called ‘JoBike’ which only operates in two regions of Dhaka, namely Mirpur DOHS and Jagonnath University in Savar. CholoBike will be the premier on-demand transportation provider of exceptional convenient experiences, and seeks to make this experience more affordable and accessible for all riders. Ongoing efforts of trying to improve the quality of existing bike sharing systems and/or create new systems has led to CholoBike, which will be the only provider catering to all types of users starting from the daily commuters, families, and leisure cyclists. CholoBike will offer 3 types of cycles for the 3 types of users as defined above, the first cycle being a more sporty and versatile cycle for the daily commuters, a three seat bicycle for families with kids and the last being the normal generally seen cycle. CholoBike will initially start operations in Mirpur DOHS with 80 bicycles and 16 docking stations but by the end of the first year, the coverage area will expand to Banani DOHS, Mohakhali DOHS and Baridhara DOHS with the total number of bicycles reaching 250 and 46 docking stations. By the end of the 4th year, CholoBike expects to have 850 bicycles with 180 docking stations covering Gulshan Avenue, Niketan, Banani, Dhaka Cantonment, Mirpur Cantonment, Dhanmondi and Bashundhara R/A. This paper will hopefully provide details about various strategies and tools that will help CholoBike to maintain its among its competitor. Along with the implementation timetable, we will continuously check outcomes and monitor our KPI’s to ensure that our campaign is performing efficiently and we are getting highest ROI.

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Mission The objective of CholoBike is to ensure personal mobility, increase livability & economic competiveness and to maintain health and safety. It provides an affordable means of shared transportation for convenient short urban trips, while reducing congestion, and our city's carbon footprint. We want people to have more inexpensive, reliable, and convenient transportation. At the same time, our main purpose is to give our users the stress free leisure feeling of riding bicycles.

Vision CholoBike is envisioned around the notion of connecting users to the public transit networks. The stepping stone of this vision is to ensure a seamless transportation system in the urban areas and give the riders free or affordable access to bicycles for short-distance trips in an urban area as an alternative to motorized public transport or private vehicles.

Tagline Think Globally, Ride Locally.

Objective To utilizes numerous bike check-out stations, and operate much like public transit systems, catering to tourists and visitors as well as local residents. Our concept is to provide free or affordable access to bicycles for short-distance trips in an urban area as an alternative to motorized public transport or private vehicles, thereby reducing congestion, noise, and air pollution. It is also a way to solve the "last mile" problem and connect users to public transit networks.

People can use CholoBike for various reasons. Some who would otherwise use their own bicycle have concerns about theft or vandalism, parking or storage, and maintenance. However, CholoBike providing dock systems, serving only stations, resemble public transit, and have therefore been criticized as less than a privately owned bicycle used door-to-door.

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Marketing Concept Production Concept The basic proposition of the production concept is that customers will choose products and service that are widely available and are of low cost. So business is mainly concerned with making the service as affordable as possible. By concentrating on increasing the cycle numbers and docking stations CholoBike aims to maximize profitability by exploiting economics of scale.

We are trying to achieve higher number of customers with low cost and intensive distribution strategy. This seems a viable strategy in a developing market where market expansion is the survival strategy for the business. The main purpose of our company is to enlarge our coverage area and increase the availability of bikes.

Marketing Strategy Market Segmentation The market segmentation can have a substantial impact on the performance of CholoBike. Proper market segmentation should have an impact on:   

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Requirements: Since different segments (might) ask for different service levels. Business performance: Since it provides different segments of value/ revenue. Business development: Since it helps to focus on the development of (new) products & services targeted on the specific needs and demands of the various market segments. Public interest: Since not only the contribution to the business case differs per segment, but also the contribution to the public interest.

CholoBike Market Segmentation: Demographics 1. Residents Involving the residents is important because of the required long term support for CholoBike. 4|Page

Ability to cycle and a positive attitude towards cycling in general are crucial, but can develop over time. The segment residents can push volume, because in general they represent a high volume of potential customers. These potential customers can be provoked to start using the CholoBike by various occasions throughout the year. Occasions can be related to shopping, events, work, free time, curiosity, weather conditions, congestion, stolen own bike, broken own bike, etc. The scheme should be able to convert these occasions into (first) rides and a first positive customer experience.

2. Commuters 

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Commuters can provide a consistent and voluminous group of customers who use the bicycle every day or at least on a regular basis (during the week). Such a consistent demand is good for the business case, since it provides a consistent revenue stream. Performance on service levels is more important for commuters in a way. To become and stay a part of daily mobility routine, the service levels should be very high. Availability of sufficient bicycles and hubs are crucial. Customer service and customer communication should be outstanding. High service levels for commuters can be more difficult to meet, because of the peak demand during rush hour and a unilateral traffic to (in the mornings) or from (at the end of the day) the offices.

3. Students   

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The segment students deserves attention. Although students tend to save on mobility costs, the opportunities are still good. Research shows that more than 30% students of the country think positively of this service and are willing to use it when Bike Share is available. The fact that younger people/ students tend to value sharing more than possession might have a positive impact on their attitude towards CholoBike. The fact that younger people/ students tend to value sustainability more might also have a positive impact on their positive attitude towards CholoBike.

 4. Visitors (1 day) 

Short stay visitors can also provide an interesting volume potential for CholoBike. Most cities have insight into the numbers of short stay visitors and the main purposes of their stay, so that the potential and the requirements can be studied and set. 5|Page

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Because of their higher number and their tendency to visit the city a few times every year this segment needs careful attention. The variety of the usage in this segment generally is wider, which puts lower constraints on the service level. In this segment business travellers could also be included, such as conference participants or regular business travellers (who came by plane/ train).

 5. Tourists (+ 1 day)  

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We make a distinction between visitors and tourists, because the dynamics of these segments differ. CholoBike can support City Marketing in general and - more specific - can open up new areas for visitors. Route applications and the availability of bike stations (in less well known parts of the city) might stimulate visits to these new areas. Since the popularity of Bike sharing service is increasing, the chance that tourists already had a bike share experience in another city or in their own city increases. Therefor they might be more used to the idea of using the CholoBike.

New segmentation ... Someone is Paying for Me! ‘Someone is Paying for Me’ (SPFM) ... 4 sub-segments CholoBike introduces a new segmentation based on the segment ‘Someone is Paying for Me’ (sponsored rides). SPFM distinguishes 4 sub-segments: 1. Paid because I am a loyal (and valued) customer (Loyalty marketing) 2. Paid by redemption of loyalty points (Loyalty marketing/ value services) 3. Paid by my employer (Best employer and Sustainable Company) 4. Paid by my hotel (Sales incentive/ Value services and Sustainable hotel/ Green Key)

1. Loyalty marketing: Paid because I am a long term customer Companies might want to reward their (loyal) customers in order to increase appreciation and loyalty and strengthen their brand positioning (in general CholoBike provides an excellent opportunity to do this. Loyal customers can be rewarded with free rides. This loyalty reward could even be combined with specific events (perhaps also sponsored by the company). The company might only select a specific segment of his loyal customers to offer free rides.

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The specific advantage of this service is that the company and its customers value the offer (of a free ride), but only a relatively small part of these customers actually have the opportunity to use this offer and enjoy a free ride. So the company partly pays for an offer that is valued but not used by their customers. Free rides could also be a part of a specific marketing campaign aiming for new customers. 2. Loyalty marketing/ value services: Paid by redemption of loyalty points rides can be an interesting redemption option for existing loyalty schemes. Loyalty cardholders could redeem their points for a discount (Miles & Money) or a free ride (Miles only). This new redemption option contributes to the positioning of the loyalty scheme and has an impact on sales opportunities of that scheme. 3. Best employer: Paid by my employer, the employer could have a number of reasons to pay for CholoBike rides for his employees:  

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It helps his employees to stay fit, which has a positive impact on performance and absenteeism. Depending on the local situation the availability of a CholoBike could help save time caused by congestion. Often cycling in the city center is faster than travelling by car. Also most of the time it is easier to make an estimation of travel time per bicycle than an estimation of travel time per car. CholoBike could also contribute in cutting costs of travel expenses (car, parking fees). Besides all these ‘functional’ advantages, it also contributes to the performance of sustainability of the company. This not only proves to be relevant for clients (brand positioning, transforming into business), but also for recruiting new young talent.

4. Sales incentive/ Value services: Paid by my hotel It is more common already that hotels offer rent-a-bike services to guests. We noticed that hotels in general have a positive attitude towards extending bicycle services and outsourcing this to the CholoBike. It can replace the individual rent-a-bike service. As the company’s product is designed for mobile application, their customer segmentation is determined to be technology oriented. In other words, CholoBike targets is young, urban, smartphone-owning individuals.

CUSTOMERS IN TERMS OF TARGET MARKET When it comes to marketing, if you’re trying to target all the segments of the market, you’re going to have a difficult time reaching anybody. Which is why targeting in marketing is so important. For that CholoBike targets three groups of customers below: 1. STUDENTS: A survey shows that students are willing to use a bike more often (68%). They know the system, but only half of the students know how the system works. They are an important target group, on whom new marketing campaigns should focus. 7|Page

2. RESIDENTS: Cycling is an opportunity, because the surveyed residents are positive about it and are of the opinion that it is healthy, important, fast and that it is good value for money.

3. TOURISTS: 65% of the surveyed tourists would like to use a bike more often during their visit. Only 52% of the tourists know the system and 67% has never used the system before. Hotels are interested in the CholoBike as well. The interviewed hotels already provide free bikes to their guests. Instead of buying and repairing hotels can combine rental for guests and employees, as they indicated to consider paying for the employees to be able to use the CholoBike. In combination with sponsoring this would be a chance.

Positioning CholoBike will position themselves as the premier bicycle sharing system, specials and other deals, providing the customers with increased margins. CholoBike will leverage their competitive edge to ensure the proper positioning. Currently the existing bike sharing system in the market are not specializing their service lines. They tend to carry les range of bikes and stations. It is a clear advantage to be focused. By focusing on increasing docking stations and coverage area CholoBike can find services that offer very nice margins, uncharacteristic of the bicycle industry. The trend of the industry in general is of consolidation. By offering value-added services which provide the user with better than average margins, CholoBike can develop value that creates a steady flow of customers of their own.

Differentiation The drive for improving and/or creating new bike sharing systems has led CholoBike to introduce three types of bicycles that has not yet been done by the competitor(s). CholoBike is also a docking-system enabled service which prevents any risk of vandalism or threat.

Coverage Area When beginning to plan a system, identifying a coverage area (the p...