SECTION 4.0 MARKETING PLAN

4.1 Services and Pricing

MotoTrend AutoSports will utilize pricing strategies that will allow for the opportunity to remain competitive and allow for the opportunity to gain work designed to build reputation and trust. The following price breakdown will be the client charge out rate; obviously it will depend on the nature of the work required:

Service Hourly Rate
Commercial Vehicle conversions including mining vehicles $65
Performance Parts sales & installation $95
Customization services & Installation $95
Wheel & tire repair & installation $29.99 per tire
Audio / Alarm sales & installation services $95
Auto Maintenance Plans $49.95-$149.95
Window tinting and Vinyl service $95
Detailing services for auto dealers Vehicle detailing service $95

Vehicle Detailing Packages

 
Standard Pack $109.99
Gold Pack $129.99
Platinum Pack $149.99

The pricing structure above is very conservative and considered entry level pricings. This pricing strategy is competitive compared to its mainstream competition.

The following table illustrates the average time needed to complete a job in each of MotoTrend AutoSports core services.

Average Time

Service Time Required for Job
Commercial Vehicle conversions including mining vehicles 10 hours per job: Estimated 4 jobs per month Billable hours = 40 hours per month on average

Performance Parts sales & installation/ Customization services & Installation

Major jobs: 8 – 12 hours per job 20 estimated jobs per month: Billable hours = 160 - 240 hours per month on average Minor jobs: 2 – 8 hours per jobs 100 – 140 estimated jobs per month: Billable hours = 200 – 1,120 hours per job

Wheel & tire repair & installation

45 minutes to 1 hour per job. Billable hours = 10 jobs per day

Audio / Alarm sales & installation services 1 – 6 hours per job: Estimated 1 – 3 customers per day.

Auto Maintenance Plans

45 minutes to 1 hour per job. Billable hours = 5 jobs per day

Window tinting and Vinyl service

1 – 8 hours per job (depends on job). Billable hours = 4 jobs per month

Detailing services (Standard Pack, Gold Pack, Platinum Pack)

2 – 6 hours per job (depends on job). Billable hours = 1 – 2 cars per day

 

4.2 Distribution Strategy

MotoTrend AutoSports will deliver all services on site. Services will be assessed on site and product fulfillment will take place in the shop.

The distribution strategies of the business are very time and cost effective and well within the industry norm.

4.3 Suppliers

MotoTrend AutoSports will benefit from the franchisor's supplier relationships, and will be bound by them for its inventory selection. The MotoTrend AutoSports Franchisor has established relationships with all leading automotive detailing, performance and add-on parts manufacturers and suppliers, with well over 10,000 part channels, supplying over 1 million individual parts through the franchisor's Canadian distribution network.

Products will be either stocked locally or available as “next day / quick delivery” ordered parts. This will provide MotoTrend AutoSports the flexibility to control its investment in inventory when starting, while at the same time offering a wide range of parts to its retail customers and wholesale mechanical shop clients.

4.4 Promotional Plan

In terms of promotion, the MotoTrend AutoSports needs to meet a certain level of activity and market reach given the geographical spread of its primary markets. The business' primary markets can be reached by using the local mediums to attain solid market reach. However, for the business' to effectively penetrate the established auto parts markets, other forms of advertising mediums will be needed to successfully reach full market exposure. The incremental and on-going promotional strategy of the MotoTrend AutoSports will accomplish the following goals and objectives:

• Ensure that the MotoTrend AutoSports has and maintains an image of professionalism and quality;

• Ensure that MotoTrend AutoSports markets are well educated of the entire service portfolio of the MotoTrend AutoSports. Also, the target markets will be provided with the required contact information to make enquires;

• Establish a strong and trusted brand among the target auto parts accessories market in Anytown and surrounding areas;

• Establish and maintain a streamlined marketing approach with respect to marketing and promotional material;

• Successfully position the business within the automotive parts, accessories and tire store industry;

• Assist in generating a consistent level of revenues for the business

Below are the incremental and on-going promotional activities that the MotoTrend AutoSports will implement upon opening the business.

MotoTrend AutoSports will use a streamlined approach to its marketing and promotional campaign. All material will use the same logos, tag lines, colours and look and feel in order to keep the companies brand and message consistent in order to avoid confusion.

MotoTrend AutoSports intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in the targeted market region in and around Anytown. The Franchisor supplies guidance and has a formal “MotoTrend AutoSports Operating Protocol” handbook that offers a proven method for marketing and developing new markets.

Based on the Canada Post study entitled “Marketing Research Group Fact Sheet: Automotive Industry and Aftermarket” (published December 2008), the following marketing tactics were most likely to initiate a response from the automotive parts, accessories and tire store market:

•  Direct mail addressed to the respondent: 17%

•  Newspaper or magazine ads: 14%

•  Flyers or brochures: 12%

•  TV or radio ads: 12%

•  Letters or newsletters: 9%

•  Cold calls: 7%

•  Unaddressed mail to occupant: 6%

•  Email ads: 5%

In addition;

•  The likelihood to respond to various promotional communications is also similar among respondents irrespective of age or income.

•  Interestingly, compared to respondents with older vehicles, those with vehicles less than one year old are somewhat more likely to respond to both addressed mail from a service centre (27% claimed likelihood to respond was “4 or 5 out of 5”), as well as newspaper or magazine advertisements (19%).

MotoTrend AutoSports will heavily invest into two main marketing strategies. The first strategy will be to establish a strong online presence through the use of an optimized mobile website. In addition, MotoTrend AutoSports will also invest in a strong social media presence.

Canadians are the heaviest users of the internet in the world, according to a report from the Canadian Internet Registration Authority (CIRA). According to the report, over 50% of all internet searches are done through a mobile device (smartphone, tablet, mobile). In addition;

•  The average Canadian spends 45 hours on the Internet each month

•  Smartphone penetration has reached 45 percent of the Canadian mobile market

According to a report done by the Google Corporation, the following trends reveal that:

•  55% of smartphone users search on their phone daily

•  77% of Canadian smartphone owners research products and services on their phones

•  51% have performed a mobile search after seeing an ad

•  80% use a smartphone while multi-tasking with other media (ie. TV, music, web surfing)

The fact remains that over half the Canadian population are using mobile devices to search the internet for information, products and services. The trend is expected to grow and according to Cisco Systems Visual Networking Index by 2017 the amount of mobile devices used by Canadians and the time spent on those devices is expected to multiply several times over.

http://www.itbusiness.ca/news/canadas-mobile-appetite-forecast-for-rapid-growth-to-2017/19716

The advantages of having a mobile optimized website are as follows:

•  Improved User Experience

•  Faster Download Speed

•  Engagement and Context

•  Improved Search/SEO performance

•  Brand Identity

•  Portability and Connectivity

•  Competitive Advantage

•  Integration with Offline Media

•  More Flexible and Cost-Effective Than App Development

•  New Advertising Opportunities

Considering that over half of Mr. Bernie Spotman's target market is using mobile devices to search for automotive parts and accessories, it makes for an opportune time to invest in an optimized mobile website. In addition, Mr. Bernie Spotman's direct competitors do not have an optimized mobile website (with the exception of No Problemo Auto Sports), which puts MotoTrend AutoSports in a unique position to capture additional market share.

In order to effectively position its optimized mobile website in the search engines, Mr. Bernie Spotman will invest in professional search optimization services. These services will help identify those keywords and phrases that Mr. Bernie Spotman's target market uses to find automotive parts and accessories in and around the Anytown area. In combination with a strong online social presence, Mr. Bernie Spotman will position its online brand in a unique and effective way to maximize its position and location.

MotoTrend AutoSports will actively pursue online promotional activities which will allow the company to grow and prosper online: Online promotional activities include (but not limited to):

- Google Adwords

- Banner ads

- Text ads

- Facebook promotional ads

Online paid promotional activities will be used until the website (and mobile website) is indexed in the more popular search engines such as Google and Bing.

The second promotional strategy will involve more traditional marketing tactics based on market interests.

Based on the Canada Post study entitled “Marketing Research Group Fact Sheet: Automotive Industry and Aftermarket” (published December 2008), Mr. Bernie Spotman will concentrate its efforts on the following promotional activities:

•  Direct mail addressed to the respondent

•  Newspaper or magazine ads (related targeted media outlets)

•  TV or radio ads

The business will design and implement a direct marketing campaign. This will be done through general mail or through a targeted relationship with local media outlets including Autotrader or other related advertising mediums. Targeted direct mailings will be sent to MotoTrend AutoSports primary markets using outsourced addresses and lists.

Using professional sales copy, all direct mail campaigns will list specific services and benefits including a company portfolio and specific calls to action, including:

•  Opt in to Northside leads and contacts list;

•  Visit the company website (mobile website);

•  Call for additional services and other information;

•  Direct sale;

•  Provide educational materials on consumer products

For the first 4 months, MotoTrend AutoSports will invest heavily into Newspaper ads (and targeted media outlets) and radio ads. It will be imperative for MotoTrend AutoSports to get as much exposure from these outlets in order to generate initial interest from its targeted market. Mr. Bernie Spotman will specifically concentrate on using targeted media outlets such as related automotive newsletters and magazines such as Autotrader and other related newsprint.

Seasonal Promotions Plan:

MotoTrend AutoSports will engage in a four season marketing program as an individual outlet, but will also engage in any of the franchisors programs as is requested by them through the use of the marketing fund. We will participate in the National Marketing program and will initiate monthly localized marketing programs that will be reviewed and approved by head office.

Winter Season

•  High Impact Road Signage focusing on; winter tires, detailing, remote starters

•  Coupon distribution through local paper focusing on detailing package sales

•  Online classified listings, focusing on winter tires, remote starters and enthusiast gift ideas.

•  Social Media & apps online marketing program

Spring Season

•  Team cars, trucks and heavily modified vehicles will be positioned near the impact road signage with large banners and signage around them

•  MotoTrend AutoSports will actively distribute the NA (MotoTrend AutoSports) logo decals to enthusiasts with custom cars

•  Distribute advertising material at community events, cruise nights and car shows

•  Coupon distribution through local paper focusing on; detailing package sales

Summer Season:

•  Team cars, trucks and heavily modified vehicles will be positioned near the impact road signage with large banners and signage around them

•  Actively distribute the NA logo decals to enthusiasts with custom cars

•  Distribute advertising material at community events, cruise nights and car shows

•  Coupon distribution through local paper focusing on; detailing package sales

Fall Season:

•  Rent a kiosk desk in the Anytown Square for one week to sell over 100 prepaid detail packages during

•  Actively distribute coupons via the paper re: detailing

•  Focus largely on high impact road side signage for winter tires, in order to promote and build momentum into the winter season for this

These are short summaries only, and do not represent the entire quarterly network campaigns for any one season.

Location

Location is one success factor however the focus initially will be supplying existing industry contacts who have committed to using MotoTrend AutoSports's services. As a result, MotoTrend AutoSports will choose a location that is accessible via major traffic arteries, and represents a good balance between traffic and cost.

The proposed location will be as follows:

1801 Riverside Drive, Anytown, ON

Riverside Drive is high traffic vicinity which is anchored by retail outlets such as Canadian Tire, Wal-Mart and Home Depot. It also features Anytown largest shopping mall, Anytown Square.

In addition, the Wal-Mart Supercentre is located at 1870 Riverside Drive signifying a high traffic draw which will attract a high level of attention and interests from the target market. According to recent statistics, roughly 80% of local populations will visit or shop at Wal-Mart throughout the year ( www.walmart.ca ). The location of MotoTrend AutoSports will have a huge impact on its market visibility as well as a major competitive advantage.

As with all businesses, once MotoTrend AutoSports has successfully attained and completed services for its market, will begin to receive word of mouth advertising and referrals. This form of advertising is the best form; however, the business will not rely solely on this form of advertising.

Marketing Costs

The total costs for the incremental and on-going promotional activities are as follows:

Digital Strategy (Mobile website design, website seo) $2,000

Direct Marketing Campaign $3,000

Online advertising $1,000

Newspaper or magazine ads $1,000

Radio / T.V ads $1,000

Signage $2,000

Total Costs $11,550

4.5 Risk Analysis and Survival Strategy

As with all businesses, there are certain inherit risks associated with each type of business. Franchises in particular have inherent risks that businesses must be aware of. MotoTrend AutoSports has identified the following risks and mitigation for each:

Franchise Fee

Mr. Bernie Spotman must pay a $50,000 franchise fee in order to operate. This is a one-time fee payable upon contract signing.

Risk : The investment can negatively affect cash reserves for the first 3 to 6 months of operations.

Mitigation : Mr. Bernie Spotman has requested contribution funds from ADPC (40%) to help offset this cost in order to help keep a healthy cash flow for the first 3 to 6 months.

Ongoing Franchise Fee

Mr. Bernie Spotman must pay an ongoing $1,000 royalty fee every month to the franchisor.

Risk : Regardless of Mr. Bernie Spotman's business situation, this royalty must be paid for the life of the business.

Mitigation : The main franchisor, MotoTrend AutoSports requires a set fee of $1,000 every month that is independent of sales. This type of fee structure is preferable because it encourages performance. As with most franchises that require a percentage of sales, MotoTrend AutoSports allows its franchises the freedom to operate without having to worry about a sliding franchise fee scale. In addition, the head franchise will NOT pro rate its fee on location as is the case with most franchises.

Material and Supply Costs

MotoTrend AutoSports main franchise has a list of 150 suppliers that the franchise must purchase from.

Risk : Regardless of the cost of the materials and supplies elsewhere, MotoTrend AutoSports must purchase from an approved suppliers list. This can have an impact on cash reserves, especially during the first 3 to 6 months of operations.

Mitigation : MotoTrend AutoSports has requested contribution funds from ADPC (40%) of the initial materials and supply costs to help offset the loss in cash for the first 3 to 6 months.

Franchise Competition

As with most franchises, the franchisor will try and saturate its demographic with as much product and services possible.

Risk : Diminishing returns as a result of market saturation

Mitigation : MotoTrend AutoSports will have an exclusive contract for distribution in the Anytown territory and surrounding areas. This will allow MotoTrend AutoSports the freedom to operate in its demographic without fear of market and/or service saturation of the brand name.

Location

Mr. Bernie Spotman's business location will play a huge part in its success. However, most head franchises will insist on its on locations for its franchises.

Risk : At the mercy of the head franchises location recommendations.

Mitigation : Fortunately, MotoTrend AutoSports head franchise is allowing Mr. Bernie Spotman to choose his ideal location with the assistance of the head franchise experts.

Franchise Failure

As with all businesses, there is always the possibility of failure due to direct and indirect factors. As a franchisee, MotoTrend AutoSports is directly dependant on the success or failure of the head franchise.

Risk : Dependant on the success or failure of the head franchise

Mitigation : If the head franchise were to shut its doors, MotoTrend AutoSports will not be affected as it will continue to operate under a new name using the same 150 suppliers. The business' infrastructure will be in place to continue operating with minimal time lost.

Disasters

Mr. Bernie Spotman will invest in business liability insurance in the event of disaster related damages such as fires and floods. In addition, Mr. Bernie Spotman will nurture positive relationships with surrounding automotive dealers to use/rent automotive infrastructure in case its service bays are non-operational due to damage. This will allow Mr. Bernie Spotman to retain services and cash reserves while the insurance pays for the repairs of its infrastructure.

SECTION 5.0 OPERATIONAL PLAN >>>




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