Mad Keen Motors

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Automotive Repair - Sales - Valet Business Plan

Market Analysis Summary

Mad Keen will target the following market segments with its website:

  1. New car owners
  2. Older luxury car owners
  3. Sports car owners
  4. Lifetime owners
  5. Buyers

4.1 Market Segmentation

Mad Keen Motors segments its customers by type of car ownership. We believe that the type of car that a person owns says volumes about their driving and therefore their garage requirements.

  1. New car owners: owners of newer cars are likely not to use the company's garage repair service. If they do have problems with their car, they will return to the dealer where they bought it. These owners, though, will take great pride in their cars and will bring them often to the wash and valet service. The goal with these customers is to promote regular use of the wash and valet service. Eventually, as their warranty runs out, the goal will be to sell them on the efficiency, excellent service and price competitiveness of Mad Keen Motors' repair services.

  2. Older luxury car owners: people who have either owned their high-end luxury cars for some years, or are unable to afford the expense of a brand new luxury car but want the feel of relaxed driving. Both of these groups want to keep their cars in the best shape possible. Those who have bought second-hand cars will often spend many hours in their cars and will place much importance on reliability. These owners will bring their cars in for regular services and occasional valets.

  3. Sports car owners: people who are younger, or middle-aged men, and will regard performance as important. They will also pride themselves on the look of their car and if involved in a minor scrape will have the body repaired very quickly, since looks are also important. These people will have regular service and tune-ups on their cars.

  4. Lifetime owners: many of these people have owned their cars for more than five or six years. They are more likely to be women. They are attached to their cars as friends and though it may be more sensible for them to purchase a new car, they will continue to have repairs done on their "old faithful."

  5. Buyers: the site will provide links to information on new and used car prices and include tips on what to look for when buying a car.
Market Analysis
2005 2006 2007 2008 2009
Potential Customers Growth CAGR
New Car Owners 2% 52,000 53,040 54,101 55,183 56,287 2.00%
Sports Car Owner 5% 25,000 26,250 27,563 28,941 30,388 5.00%
Older luxury car owner 10% 30,000 33,000 36,300 39,930 43,923 10.00%
Lifetime Owners 2% 80,000 81,600 83,232 84,897 86,595 2.00%
Used Car Buyers 12% 40,000 44,800 50,176 56,197 62,941 12.00%
Total 5.40% 227,000 238,690 251,372 265,148 280,134 5.40%

4.2 Target Market Segment Strategy

Aside from the washing and valet services, we are currently targeting owners of older cars or cars in need of much maintenance, since that will provide us the greatest revenue.

 

4.3 Service Business Analysis

The garage repair business as a whole is fragmented. There are a few major dealerships in each area, with a larger number of small garage repair shops, like Mad Keen Motors. Dealers target customers who buy new and used cars from them. Small garages rely on word of mouth and get most new customers because of emergency car care needs.

4.3.1 Competition and Buying Patterns

Word of mouth is important in the car repair business, since people are very wary of garages, due to their lack of knowledge of cars and engines. Mad Keen Motors leads the local competition in regards to word of mouth, having been in business for over three decades under the same ownership.

Competition from dealerships is becoming stiffer. Car design is becoming more and more specialized, as car manufacturers aim to encourage owners of their vehicles to have services carried out at their franchised dealerships. However, small garages like Mad Keen have a price advantage over dealership, usually charging 50-70% less per hour for repair work.