Concrete Carbon Parts
Strategy and Implementation Summary
Concrete Carbon will be leveraging its competitive edge of customization of its product for different riders. This will offer differentiation between the competitors, something that will be emphasized in the marketing materials. The products will be marketed via the Internet for the individual customers and through trade shows for the distributors. The sales strategy will rely communication of the fact that Concrete Carbon’s products are lightweight, safe, high end bicycle seatposts. The sales campaign will also stress the ability of Concrete Carbon to replenish distributor’s stock of the seatposts quickly and as promised.
5.1 Competitive Edge
Concrete Carbon’s competitive edge is its product offering that is customized to the weight and aggressiveness of the rider. Every other manufacturer has only one carbon seatpost with the only variation on length. No body else offers distinct products for different riders. The competitors have only one product that generally has a weight limit.
Concrete Carbon’s three different posts are made for different weight groups. By increasing the amount of material in key areas, Concrete Carbon is able to make a posts for all weight riders with a huge safety margin. Concrete Carbon is keenly aware of the liability risks involved with a product liability suit. Having specific posts for specific riders is a competitive advantage because it provides the rider with the lightest weight post that they can ride safely. It also provides them with the most comfortable riding post. If a light weight rider is using a stout post it will feel quite stiff and all of the road vibrations will be transferred. Conversely, if a heavy rider is using a post that is too light for him, it will not be stiff enough, flexing like a noodle under stress.
5.2 Marketing Strategy
Concrete Carbon will use a different marketing strategy based on the two different market segments that it seeks to reach. Marketing for the individual consumers will be done primarily over the Internet. While Concrete Carbon will use some magazine advertisement space, the main effort will focus on promoting the website through good positioning on search engines as well as pay per click advertising. Pay per click advertising is a system of advertising that is done through search engines where payment is made to a search engine such as Google whenever the search engine refers a person to Concrete Carbon’s site based on the keyword that they entered into the search engine.
Participation in the industry trade shows will be the key marketing effort for the distributors. There are two main shows and 80% of industry business is transacted at the shows, for manufacturers, distributors, and retailers. No one who is seriously participating in the industry misses these shows. The shows provide Concrete Carbon with an opportunity to show off its product to the distributor as well as establish as relationship with them (especially important in light of the fact that most of the distributors are not in the same state as Concrete Carbon). Therefore, the shows will receive a lot of attention by Concrete Carbon based on the recognition that this is where the deals are made and relationships established.
5.3 Sales Strategy
The sales focus for this group will be the conversion of qualified leads through the emphasis of the products being customer designed for the specific customer, combining comfort, lightweight, and a wide safety margin. This will help differentiate Concrete Carbon’s products from the competition. Concerns about durability will be eliminated by the industry’s best warranty of five years.
The sales strategy for the distributors will be quite different. It will emphasize a close relationship between the distributor and Concrete Carbon. This is very important because it is of great concern to a distributor for them to carry and feature a manufacturer who has delivery or warranty problems. Distributors are sensitive to the issue of availability of the product from the company. Concrete Carbon will work hard on convincing distributors that it will be able to meet all of the needs of the distributor, that production can be scaled quickly if necessary, and that Concrete Carbon is quick to fill orders, allowing the distributor not to have to keep a large inventory of the product out of fear of not being able to fulfill orders from a bicycle retailer. Lastly, Concrete Carbon will work on impressing the distributors at the shows that they are making a high-quality product with a low failure rate and that if any warranty claims are made they will be addressed quickly and happily. This is in recognition that sales are made based on relationships, as much or more so relative to the actual products.
5.3.1 Sales Forecast
Sales have been fairly slow and steady for the last year. With the Bicycle Industry Trade show coming up in March, sales are forecasted to increase from the distributors that month or the following month. With more retailers carrying the seatposts, there will be greater visibility of the products and it is reasonable to believe that individual sales will also increase.
|Direct Cost of Sales||2003||2004||2005|
|Subtotal Direct Cost of Sales||$70,680||$173,581||$205,082|
Concrete Carbon has identified several milestones that need to be accomplished. The following chart will indicate the dates for which the work to achieve them will begin, when the milestone is likely to be achieved, and who is responsible for the milestone.
|Milestone||Start Date||End Date||Budget||Manager||Department|
|Business plan completion||1/1/2003||2/1/2003||$0||Josh||Strategic Op|
|First distributor sale||3/15/2003||4/15/2003||$0||Josh||Sales|
|Yearly sales >$250K||1/1/2002||12/30/2004||$0||Josh||Sales|