The Product – “SmartBike – Metro” The SmartBike Metro is a power-on-demand foldable electric bicycle that gives you the choice – pedal power or power on demand acceleration. The lightness and convenience of the SmartBike – Metro make it an ideal companion for urban commuting, where there’s scarce space and heavy traffic. It guarantees you arrive fresh on destination, and it provides you business-class performance in multi-ways, even as an indoor exercise bike! Stylish Outlook
The SmartBike Metro has a fashionable, stylish outlook that fits well with the status-quo of the affluent professionals. When folded, the bike can be carried as a stylish briefcase, in a environmentally-friendly tote, or in an athletic backpack. The SmartrBike can be conveniently carried onto a subway, or taken into office buildings as you walk through the envious crowd. Personalized customization is available through online ordering, and numerous accessories are also available to choose from. SmartConsole
The SmartBike Console is a touch screen tablet PC that not only entails travelling data, personal fitness of biker, but also ensures riding safety of the biker – it automatically detects riding speed and road condition, and it disables touch screen operations when the bike is in motion. Furthermore, the console is compatible with various applications that can be downloaded from internet. Dual Modes – Traveling/Exercising The SmartBike Metro can travel at a maximum road speed to 15mph and a distance of 40 km under electric power when fully charged.
Electric power assistance comes on demand as the bike automatically detects the road inclination. When standing on the charging station, SmartBike – Metro serves as an indoor exercising bike for personal fitness use. There are built-in fitness applications in the SmartConsole, and various other fitness, music, game applications available for downloading. Product Accessories Accessories from backpacks to biking gears as well as extra charging station are all available for purchase from the cooperate website. Branding The company intends institute a new manufacturer brand “SmartBike”, which ommunicates a stylish, green, and business-class image that creates a new leading perception of biking fashion to the world. The “SmartBike” brand carries a family of electric bike products that provide multi-functional benefits. The firm uses a combination of family brand name and individual brand name to distinguish the products. This specific individual brand “[SmartBike] -Metro” is an easy to recognize name that is chosen to suggest the profound benefit and qualities provided to metropolitan working professionals. Packaging
To advocate its environment-conscious concept, SmartBike – Metro, along with its charging station, is packaged in a box and comes with a canvas bag that are both made using recycled materials. Pricing Strategy A successful pricing strategy should balance the needs of company objectives, customers, channel members, competition and costs. Company Objectives Since SmartBike Metro is positioned as a high-end electric bike, the company objective is to concentrate on customer orientation, focusing on providing value for consumers.
Using valued-based pricing strategy, we set the prices to match our customer expectation of what the price should be given the type of product. From our target market analysis, our customers are energetic, environment-conscious, affluent professionals working in urban core areas such as downtown Toronto. They expect multi-function and convenience to accommodate their busy and health-conscious life styles. They expect high quality to come with high prices. Since we provide the functions they desire, we will also provide the price they expect.
Our higher-than-market price of $2999, employing the price skimming strategy, is designed to enhance our reputation and image in the mindset of consumers, strengthening our position. Customers The market for electric bikes is generally price insensitive, with a negative elasticity of demand (see market analysis). Hence our high price will not significantly affect demand as long as we maintain the product’s image of high functionality. We recognize that consumers are more sensitive to price increases than decreases, so our high prices also provide us with price reduction room in the future should market trends change.
Furthermore, our product’s bundled functions currently have a low substitution effect in the market, allowing for price skimming. Channel Members After distribution – matching the high prices – specialty stores Competition Currently our main competitions are other electric bicycles. Market analysis shows that our price is generally higher than competition. We employ the price skimming strategy because we are differentiated from our competitors on functionality and quality since few other electric bicycles has a display mode and none are integrated with stationary exercise bike functions.
We will maintain our prices at introduction and will not engage in competitive pricing wars, unless similar functions enter the market in the future. Cost Our base model manufacturing cost per unit is about $500, as we intend to outsource parts manufacturing to China and the current market price for electric bicycles in China is about $400. Here we include freight charges. Our added features, the LED display technology integrated with the exercise bike system should range about $500 per unit (including patent royalties) as it is manufactured in North America and would expect higher prices for more advanced technologies.
For more details on cost, see the financial section. Integrated Marketing Communications (IMC) Strategy To elicit consumer awareness, interest, and purchase behaviour, we have to develop an effective communications strategy using multiple mediums to send a consistent and clear message about our product and its benefits and position to our target consumers. We will use consumer pull strategy. IMC Tools Effective communication requires the right media to influence the right audience. First we will put ads in business magazines like Business Week and Forbes, as well as Men’s Health and Women’s Health magazines.
Both types of magazines have readership in the working environment and will attract professionals with busy schedule and health consciousness – which is our target market. The ads will be put in the months before the during the summer season, when outdoor exercise and transportation are the most popular. Also, we will also put ads in equivalent online magazines and news sources (such as the Globe and Mail) in order to tap into the technology savvy side of our target market who read online news articles regularly.
We will also partner with select corporations to help us advertise in their offices with posters and intranet with electronic ads (through email or corporate intranet sites). This will align our reach for the professional target market with the corporations’ strategic desire to provide their employees with alternative modes of transportation to enhance their lifestyles as well as to be environmentally sustainable. Lastly, our few store locations will act as trial and promotion stations for potential customers to understand and try our products, allowing for questions to be addressed in real time.
Our e-commerce website will also be an advertising mechanism, detailing specifications, FAQs, customer ratings, deals and other promotional implementations. Distribution Strategy A good distribution strategy will provide customers with the product at the right time and right place when and where they want it while also matching product positioning. The distribution system design requires a matching channel structure with channel intensity in order to allow for the successful flow of necessary information and merchandise to reach customers. Channel Structure
We wish to use direct distribution to accommodate product customization, customer flexibility, efficient inventory control (via semi just-in-time inventory system), instantaneous flow of information (particularly order information), and absolute control over distribution. The orders will mostly go through our online e-commerce website (which also has the benefit of supporting 24/7 access). We will set up a few distinct display stores (where the purpose is predominantly for promotion and product trials) in core customer base areas that can also take orders from customers.