Professional Documents
Culture Documents
Executive summary
1.0 -Introduction 2
6.0 --Conclusion 11
-Bibliography
-Appendices
1. Executive Summary
2. Situational Analysis
In recent years, the bicycle industry in Britain has experienced a remarkable
change that has allowed them cash-in on the latest economic trends. Allegra
Strategies reported that UK’s consumer value for cycles and cycling goods will
increase by more than £2.1bn in 2010. It has also reported that there will be an
increase by 15% for the same year. An estimate was made that it will cross the
£3bn mark by 2015. The managing consultants state that the 6% of adult bikes
bought in last 1 year costs more than £1,000 while the average cost of a cycle
(excluding children’s cycle) is more than £300 in UK. Allegra's Project Vélo
study reports that sales of cycles will touch four million units this year. A 2010
Mintel report shows that 12% of adults in Britain cycle regularly whereas 6%
cycle most days. An increase in the number of members in cycling clubs has also
been noticed.
A good upturn has been experienced by the cycling industry due to the shift in
the culture. The retail industry has also benefited largely as people have become
more aware about the positive effects related to a healthy lifestyle. Cycling is
considered to be an affective stress reliever and an excellent cardiovascular
exercise. A recent industry trade publication shows that 94.5% of people cycle
for fitness. There is a tremendous growth in the sport as a large number of people
are becoming aware of its health benefits. The British cycling industry and in
particularly Halford is in a unique position to take advantage of the trend.
The interest has risen across strata. 2012 Olympic Games and programmes
encouraged young people to take up cycling, organised by Cycling England. In
1999, the Labour government initiated The Cycle to Work Scheme. It allows the
employees to purchase cycles tax-efficiently and has played a big role in getting
people on their cycles.
University students
Our market niche has a number of specific needs that form the main focus of our
strategy:
Opportunities Threats
Encouraging the trend of active Online cycle selling as well as web
lifestyle catalogue selling and service.
Population growth is being Price pressure is generated by
experienced by the area. wholesale/mass suppliers
Government support and funding Effect on the power of spending due
through schemes like Cycle2Work to fluctuations in the economy.
An alternate means of transport due
to increase in fuel price and less
parking place.
3. Market Positioning
Halfords is in a cash cow position in the BCG growth share matrix as it receives
high relative market share but a low market growth rate. It wants to continue to
position itself as the premier bicycle retailer that offers regular closeouts,
specials and other deals, and by offering bigger margins. The company will take
advantage of its competitive strengths to ensure the proper positioning in
summer (june-september) 2011.
It will try and cash in on the government’s tax relief policy and other economic,
social, environmental and health benefits of cycling to promote its products and
services in Hull.
Apart from its huge share in the car maintenance and car enhancement market,
Halfords Cycles product range in the Bicycle market includes:
Halfords current local competition can be categorized into two major groups:
Motorworld: Motor World is the only other national bicycle retailer that operates
in the same product categories as Halfords. Latest published accounts have
quoted Halford’s turnover as being as much as 12% larger than that of
Motorworld. While Motorworld has operations limited to high street locations,
Halfords has stores located conveniently at out-of-town locations as well. The
out-of-town locations allow Halfords to offer its customers large professional
stores, big parking areas and longer working hours – a business model that
competitors have not yet been able to replicate(Annual Report 2010)
4. Marketing Objectives
Maintain and expand our reputation for high quality service and sales,
creating an internal training and skills development program for staff
To achieve additional sales growth and operational margins
To extend its range and service advantage
Maintain a financially healthy business and control costs
To leverage the Halfords brand in multi-channel
To take complete advantage of current and future market opportunities
Halfords marketing strategy is based on remaining the resource of choice for local
bicycle users especially the working and the university student population in Hull
region. Based on Ansoff’s growth strategies, Halfords marketing penetration
strategies allow it to maintain leading position in the cycle retail market in Hull. By
maintaining its cash cow position, the company will continue to experience profits. In
Product Strategy- Kotler defined product as "anything that can be offered to a market
to satisfy a need”.For the months of June till September 2011, Halfords will focus on
sales of five categories of quality and high performance cycles comprising front, full
suspension, and no suspension mountain bikes; road bikes to facilitate office goers;
comfort bikes focused towards recreational user; hybrid bikes for on and off road
performance; and youth bikes for kids above the age of 6 years.
Additionally, Halfords will also focus on selling bike parts and accessories like
helmets, back seats, locks, lights, clothing, shoes, tires, tubes, wheels, saddles, gloves,
hydration, pedals, pumps, tools and lubricants. To add to this superior quality product
range, Halfords will provide first-rate, individualized, matchless customer service…
including, proper bike fittings, instruction on safety and proper use, and repairs.
Pricing Strategy- Since Halfords enjoys a good position in the market, it also enjoys a
strong bargaining position with it suppliers. In turn, this allows the company to offer
high value product and service pricing to its customers. The price range for
maintenance will vary, but the five types of bicycles will be offered within the
following price range
Halfords wants to be a popular choice not only for white collar professional and
cycling enthusiasts, but also wants to appeal to the cost-conscious university students
Thus the pricing orientation of our products will vary from being inexpensive ($200
to $599) to the expensive range ($600 to $1200).
Place/Location Strategy- All our products will be distributed through our out-of-town
super stores. Repairs and service will also be provided on location. For the working
population, we will offer bike deliver facilities free of cost within the Hull area. We
will also promote our products and services through our business website that will
allow users to contact the store and view our complete list of products and services, as
Radio and TV advertisements will be aired regularly. Visibility for Halfords cycles
will be generated using a multi-channel advertising campaign. Newspaper
advertisements will be placed in popular business papers for working population of
Hull and also the local university’s paper.
Our website will be the most up-to-date source of product information and
availability. All activity on the web and participation in trade shows will be
highlighted on the business website making it a unique source of information.
In addition, Halfords will tie up with the two local biking clubs to host and sponsor
the Mountain Bike Race held every August. Promotional flyers, Halfords jerseys etc
will be used to promote the brand among Hull population. Halfords will also sponsor
business community events and government environment protection schemes to raise
awareness of cycling a healthy/environmentally friendly medium. The student
population will be lured through lucrative back to school discounts, coupons, and
spring specials.
Above all, customers will be surprised at the level of customer service that they
will receive at Halfords.
The financial plan is being developed basis available marketing and sales data for
previous years, and keeping in account the changing market trends, planned marketing
and promotional activities, revenue and expenses. Following assumptions are made in
building the plan:
• The discretionary purchasing power of the Hull population will either remain
stable or increase.
• The lack of parking area will continue to grow.
• Inflation in gas prices will increasingly support substitute transportation means
among local population, like using cycles for daily commuting.
The following information supports our belief that there is sufficient demand for a
bicycle, like accessories and maintenance services in Hull area: Halfords will be the
only specialty bike retailer in this part of the state, giving us a great opportunity to
capitalize on this market; Hull has a strong family presence, and families are fairly
large consumers of bicycles; Hull also has a local university whose students will not
only take advantage of the many recreational trails in the city, but also use bicycles
for transportation; Hull is a biker friendly city with many trails for all different skill
levels that attract bicycle enthusiasts from all over the state; Halfords provide a full
line of bicycle parts and accessories, providing items that no other bicycle specialty
store or mass market retailer in the state can match; it also offer bicycle repair
services, including tune-ups, which again is a service that is hard to find in Hull or the
surrounding communities; Hull is home to two bicycle associations; and finally the
strong performance of the state and local economy was also considered when
forecasting sales revenue.
Forecasting sales from 2007 to 2008 and 2008 to 2009, we assumed a 5% increase in
sales, knowing that sales of bicycles nationwide increased by approximately 6% in
2008
Starting April 2011, Halfords superstores will see a large demand for repair and tune-
up services as people take their bikes out of the garage and get them ready for the
warm weather months. People will also shop for the latest line of bicycle accessories
and apparel. Sales revenues will grow in June and July as our advertising campaign
starts to take shape. Sales revenues will peak in the month of August. As the summer
nears to a close in September sales start to slightly decrease and dramatically tail off
October. See Appendix 2.
6. Conclusion
The bottom line for Bicycle sales by detailed analysis of all possible marketing
strategies and views will be reflected in the sales volume of Halfords during
summers(June-September) 2011 in Hull. Examining trends in market and market
behaviour may at times result in a vaguely different depiction from the real outcome.
The understanding of the circumstances that are possible through the study will assist
in understanding the market positioning of Halfords Cycles during summers 2011.
Bibliography
Oscar González Benito, María Pilar (2010) ‘Retail pricing decision and product category
competitive structure’ Decision Support Systems, Volume 49, Issue 1, Page 110-119
Retrieved 22 November 2010
http://www.bike-eu.com/news/4456/uk-survey-sales-4-million-bikes-but-halfords-reports-
decline.html. Retrieved 24 November 2010
Karen Chandler. 1991. "Practical Promotional Strategies for Your Information Service", in
Aslib Information, 19(2), p.48. Retrieved 4 December 2010
Retail Sports Goods rate found in Financial Studies of Small Business, 13th Edition. Retrieved
4 December 2010
The Independent (2009) ‘Cycle market: Moving into the fast lane’
http://www.independent.co.uk/news/business/analysis-and-features/cycle-market-moving-
into-the-fast-lane-1702191.html. 29 November 2010
2011
Marketing Communication Tools Frequency June July August September
4 11 18 25 1 8 15 22 29 6 7 13 20 3 10 17 24
1 Advertising
1.1 Print: magazines 1 full-page, 4/c
1.1.1 Cycling News 1 / month
1.1.2 The Gaurdian 1 / month
1.1.3 Cycling Weekly 1 / month
1.2 TV 20 sec. commercial
1.3.1 British TV 2 / day
1.3.2 BBC 2 / day
1.3.3 MTV 2 / day
1.3 Radio 15 sec. commercial
1.4.1 Planet Rock 1 / day
1.4.2 BBC Radio 1 1 / day
1.4.3 Choice FM 1 / day
2. Public Relations
2.1 Media relations: press release 4
3. Direct marketing
3.1 E-mail marketing 1 / week
3.2 Internet marketing
3.2.1 Online
advertising During the whole term
3.2.2 Promotion on
Facebook,
MySpace and
Twitter During the whole term
4. Sales promotion
4.1 Cash discounts ---
5. Campaign research