Executive Summary
Creating an outline for a company to plan with and follow is essential for long-term growth. Having a plan in place that articulates the intended advances that a company is going to make allows for well thought out choices to be made. A marketing plan has been prepared for the company Gear Trek. In the next year of business Gear Trek will be focused on creating products that suit all consumer needs while also creating as much profit as possible to keep the company up and running, while also continually expanding. The company will carefully keep in mind the current consumers and competition. This will allow Gear Trek to understand how they need to develop new brands and advertising. Remembering the consumer this company has already reached while also considering new candidates will continue to bring in essential business and keep awareness of the competing brands. If the strengths and weaknesses are considered, Gear Trek will be able to divide and conquer new strategies while also accessing major problems. Keeping target markets in mind for following years, brands, pricing, advertising, and sales channels will all coincide with consumer needs. Increasing brand options over time will bring in new and old consumers, while pricing will remain at a steady pace of both staying the same and slowly increasing as seen fit when new features are added to products. As new store openings increase, advertising will be widely dispersed locally and regionally along with advancing distribution to specific intermediaries and indirect channels. Each quarter will follow the plan of opening new stores, increasing sales staff, and focus on furthering company growth. While marketing plans are not always made necessary, companies should create a marketing plan because it outlines the strategies a company should make, helps to anticipate mistakes or challenges, and gives direction.
Review of Financial and Market Performance During Previous Year
Gear Trek’s financial performance for 2020 included a growth in profit margin of 3%. However, in the last four quarters, the company did not reach its goals while the current financial performance has attained a 11.48 rating, which is slightly above average. The company’s branding and advertising efforts increased its market effectiveness rating, at 0.543, which is below the market average. As such, Gear Trek’s performance helped the firm to have a favorable rating for investments. In the third and fourth quarters, bike sales accounted for 48% of the gross sales revenue, accessories and parts were 34.1% while bike repairs and rental were 11.4% and 1.6%, respectively. The sale of fitness equipment was 4.9% of the total sales revenue.
Assessment of Current Situation and the Market
| Customers Gear Trek’s customers includes independent bike shops which include retailers and chain bicycle stores. The chain bicycle stores are in the large cities, which serve over one million customers while others serve communities as franchises. Gear Trek understands that customers want quality products that can withstand different terrains (Mari, 2021). Individuals who do not use their bikes for mountain terrains or rough roads do not require customized products. However, the company offers a 24/7 helpline for customers to learn about the new products and instructions on how to use the biking gear. |
| Competition Major competitors include Quality Bicycle Products, which is a manufacturer of high-end bicycle components. The company operates nationally, which gives it a wider market for its products compared to Gear Trek. However, the company has one franchise in Gear Trek’s locality, which reduces the competitiveness as Gear Trek is considered a community product. Another competitor, Riteway, operates nationally with an extensive catalog of decent and quality products. The variables that favor Gear Trek’s products include availability, price, available terms, and shipping time. Last year, Quality Bicycle Products and Riteway took 62% of the market share leaving Gear Trek with only 38%. |
| Strengths A broad selection of products.Strong relationships with manufacturers and distributors across the country, which helps in negotiating exclusive distribution deals.Gear Trek sells relationship, which makes customer its partners.The company has excellent staff composed of well-trained cyclist enthusiasts to assure clients of satisfaction. |
| Weaknesses The nature of the industry sector lacks a smooth and constant flow of specials and closeouts for consumers.The company’s advertising has been weak over the last year leading to confusion among customers regarding what the company offers.The company faces difficulties predicting what products will do better in the markets. |
| Problems The company has problems keeping return to its shareholders since the cost of producing items is rising. Gear Trek is facing problems getting a big and known distributor for products in some parts of the country. |
| Opportunities The company can spread fixed costs over different areas, such as sales increases and profit margins The youth population is growing, which presents the company with a ready market for its products, especially that more people are getting health conscious. |
Marketing Strategy for the Next Year in the Business
GearTrek is targeting products for people who seek adventure and want to enhance their quality of life. Customers are searching for bicycles because they are living in areas with high costs of living and few options for transportation. Our brand strategy objective is to introduce a product that resonates with the customers’ needs. GearTrek will be competitively priced in order to attract customers, this will give us an edge in the competitive market segment. The pricing of the products will be tight with a market of between 20% to 40% depending on brands and models, but continue to be the low price provider in the market.
Advertising is essential in order to target the relevant population for GearTrek’s products. The company will connect with customers via social media, the various platforms provide an avenue for the business to understand the likes and dislikes of current and potential customers. Besides social media, GearTrek will promote activities on the company’s website, this would help show a bigger overview of the products. Our primary sales channel of the business is stored in selected areas, the stores provide opportunity to get more personable with customers. This allows them to ask questions about concerns and introduce more personalized responses from the representatives. GearTrek will also utilize online channels for wider market reach, e-commerce has become a growing channel in business that we will look forward to utilizing. These sales channels will give the business a wider reach and increase the chances of success.
Tactical Plan
In Quarter 6, one new store will be opened in Amsterdam. The starting costs for that are $146,000 (See Appendix A). Around eight new sales and service employees were hired in speedbike, mountain bike, and service care. These employees were distributed between the three current stores in order to keep up with the demand of the brands.
Quarter 7 will reflect a new store opening in New York. The start up costs for this new opening are $330,000 (See Appendix A). Six new people will be hired this quarter for the store in Amsterdam. The brands prioritized in this quarter will be Trek01 and Aero. Amsterdam is a great location for these types of bikes. Opening a store in this location will create more competition with other companies, but GearTrek will be increasing their advertising efforts to $126,000 (See Appendix A). The new store opening will also mean an added $400 to the point of purchase display, to allow Trek01 and Aero to be displayed in the Amsterdam location. Rebates will increase in 16% increments for Q7 and Q8, to match previous rebates used.
Additionally, in Quarter 8, six more people will be hired to cover the store in New York, with a couple more hires for the Amsterdam location. Again, advertisement budgets will be increased to allow more entry into the market in New York. Point of purchase will again increase to reach a total of $2000, so that each store can have two point of purchase displays. New York will have Trek01 and Aero on display.
Quarter 5
- Invest in research and development on the latest biking gear.
- Redesign ads and improve their placement.
- Increase the number of sales people in each location.
Quarter 6
- Open three offices, Paris, London, and New York. Each office will staff five employees, one service and four sales personnel, with two sales staff for priority 1 and 2 target markets, at a determined cost.
- Increase advertising in areas that are traditionally controlled by competitors
- Target the young population with trendy products
Quarter 7
- Place ads on digital platforms
Quarter 8
- Inform customers about the value of Gear Trek’s products and services.
References
Mari, C. (2021). Twenty Years of Marketing in the Italian Bicycle Market: Cannondale 1998– 2017. In A Business History of the Bicycle Industry (pp. 103-131). Palgrave Pivot, Cham.
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