MARKETING

Marketing

Marketing

1. Use market research to provide a detailed explanation of the current market, including consumer trends, influences and market structure

Market Analysis

The U.S. bicycle industry was a 6$ billion industry in 2005 (this includes the retail value of bicycles, related parts, and accessories through all channels of distribution), selling approximately 19 million bicycles, according to the National Bicycle Dealers Association 2006 Industry Overview (NBDA; www.nbda.com). The industry has benefited greatly as Americans have become more aware of the positive affects associated with a healthy lifestyle. Bicycling is an excellent cardiovascular exercise and a great stress reliever. A recent industry trade publication showed that 94.5% of those who ride bicycles do so for recreation or fitness. The sport is continuing to grow as more and more people become aware of its health benefits. The Bicycle industry, and Saracen Bikes in particular, is positioned to cash in on this trend.

Saracen Bikes is a specialty bicycle retailer featuring high quality merchandise, and also offering additional customer services such as bike fitting, expert assembly, and repair. The approximately 4,800 specialty bicycle retailers in the U.S. commanded roughly 16% of the market in terms of unit sales in 2005, but accounted for 47% of the dollars, a dominant dollar share (NBDA; www.nbda.com).

The industry is a seasonal business that can be impacted by poor weather conditions, as well as changes in the economy. Fortunately, the economy in Abbotville is strong with an unemployment rate of 3.6% and a median family income of $42,047 (U.S. Census Bureau, www.census.gov). Additionally, high oil and gas prices have increased the demand for bicycles nation wide as people look for more affordable means of transportation. Approximately 5.2% of those who ride bicycles do so as a means of transportation.

It is also important to note that Abbotville has two bicycle associations, the Abbotville Saracen BikesBike Association (AMBA) and Citizens for a Healthy Lifestyle (CHL). The AMBA has about 200 members who are serious trail riders and take advantage of Abbotville's many miles of trails. In fact, Abbotville is home to Bear Saracen BikesState Park, which is known for having the best mountain biking trails in the state. The CHL has about 100 members who are more casual riders that do mostly intermediate trail riding.

2. Use theoretical models to analyse the market and Saracen's position.

Target Market

The profile of the Saracen Bikes customer consists of the following geographic, demographic, psychographic, and behavior factors:

Geographics

Our immediate geographic market is the Abbotville area, with a population of 31,473. However, we will include the 145,917 people that make up the major population surrounding Abbotville, ME (U.S. Department of Commerce- Bureau of Economic Analysis) as part of our overall target area.

Demographics

Our general target market is male and female age 6-65, but we have segmented our market into two smaller and more identifiable groups:

1. Families with children that have an average income of $35,000 or higher

2. The avid rider, male and female, age 21-44 with an average income of $45,000 or higher

Psychographics

· Health and fitness is a priority

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