Cholo Bike - Marketing Plan

Executive Summary CholoBike is a transportation startup, which provides an App-Powered ondemand ridesharing service for smartphone users. In the world of increasing popularity of bicycle sharing services, CholoBike offers more options of bicycles for the different types of users with different needs and wants. Currently the only bike sharing system operating in Dhaka is a dock-less bike sharing service called ‘JoBike’ which only operates in two regions of Dhaka, namely Mirpur DOHS and Jagonnath University in Savar. CholoBike will be the premier on-demand transportation provider of exceptional convenient experiences, and seeks to make this experience more affordable and accessible for all riders. Ongoing efforts of trying to improve the quality of existing bike sharing systems and/or create new systems has led to CholoBike, which will be the only provider catering to all types of users starting from the daily commuters, families, and leisure cyclists. CholoBike will offer 3 types of cycles for the 3 types of users as defined above, the first cycle being a more sporty and versatile cycle for the daily commuters, a three seat bicycle for families with kids and the last being the normal generally seen cycle. CholoBike will initially start operations in Mirpur DOHS with 80 bicycles and 16 docking stations but by the end of the first year, the coverage area will expand to Banani DOHS, Mohakhali DOHS and Baridhara DOHS with the total number of bicycles reaching 250 and 46 docking stations. By the end of the 4th year, CholoBike expects to have 850 bicycles with 180 docking stations covering Gulshan Avenue, Niketan, Banani, Dhaka Cantonment, Mirpur Cantonment, Dhanmondi and Bashundhara R/A. This paper will hopefully provide details about various strategies and tools that will help CholoBike to maintain its among its competitor. Along with the implementation timetable, we will continuously check outcomes and monitor our KPI’s to ensure that our campaign is performing efficiently and we are getting highest ROI. Mission The objective of CholoBike is to ensure personal mobility, increase livability & economic competiveness and to maintain health and safety. It provides an affordable means of shared transportation for convenient short urban trips, while reducing congestion, and our city's carbon footprint. We want people to have more inexpensive, reliable, and convenient transportation. At the same time, our main purpose is to give our users the stress free leisure feeling of riding bicycles. Vision CholoBike is envisioned around the notion of connecting users to the public transit networks. The stepping stone of this vision is to ensure a seamless transportation system in the urban areas and give the riders free or affordable access to bicycles for short-distance trips in an urban area as an alternative to motorized public transport or private vehicles. Tagline Think Globally, Ride Locally. Objective To utilizes numerous bike check-out stations, and operate much like public transit systems, catering to tourists and visitors as well as local residents. Our concept is to provide free or affordable access to bicycles for short-distance trips in an urban area as an alternative to motorized public transport or private vehicles, thereby reducing congestion, noise, and air pollution. It is also a way to solve the "last mile" problem and connect users to public transit networks. People can use CholoBike for various reasons. Some who would otherwise use their own bicycle have concerns about theft or vandalism, parking or storage, and maintenance. However, CholoBike providing dock systems, serving only stations, resemble public transit, and have therefore been criticized as less than a privately owned bicycle used door-to-door. Marketing Concept Production Concept The basic proposition of the production concept is that customers will choose products and service that are widely available and are of low cost. So business is mainly concerned with making the service as affordable as possible. By concentrating on increasing the cycle numbers and docking stations CholoBike aims to maximize profitability by exploiting economics of scale. We are trying to achieve higher number of customers with low cost and intensive distribution strategy. This seems a viable strategy in a developing market where market expansion is the survival strategy for the business. The main purpose of our company is to enlarge our coverage area and increase the availability of bikes. Marketing Strategy Market Segmentation The market segmentation can have a substantial impact on the performance of CholoBike. Proper market segmentation should have an impact on: Requirements: Since different segments (might) ask for different service levels. Business performance: Since it provides different segments of value/ revenue. Business development: Since it helps to focus on the development of (new) products & services targeted on the specific needs and demands of the various market segments. Public interest: Since not only the contribution to the business case differs per segment, but also the contribution to the public interest. CholoBike Market Segmentation: Demographics 1. Residents Involving the residents is important because of the required long term support for CholoBike. Ability to cycle and a positive attitude towards cycling in general are crucial, but can develop over time. The segment residents can push volume, because in general they represent a high volume of potential customers. These potential customers can be provoked to start using the CholoBike by various occasions throughout the year. Occasions can be related to shopping, events, work, free time, curiosity, weather conditions, congestion, stolen own bike, broken own bike, etc. The scheme should be able to convert these occasions into (first) rides and a first positive customer experience. 2. Commuters Commuters can provide a consistent and voluminous group of customers who use the bicycle every day or at least on a regular basis (during the week). Such a consistent demand is good for the business case, since it provides a consistent revenue stream. Performance on service levels is more important for commuters in a way. To become and stay a part of daily mobility routine, the service levels should be very high. Availability of sufficient bicycles and hubs are crucial. Customer service and customer communication should be outstanding. High service levels for commuters can be more difficult to meet, because of the peak demand during rush hour and a unilateral traffic to (in the mornings) or from (at the end of the day) the offices. 3. Students The segment students deserves attention. Although students tend to save on mobility costs, the opportunities are still good. Research shows that more than 30% students of the country think positively of this service and are willing to use it when Bike Share is available. The fact that younger people/ students tend to value sharing more than possession might have a positive impact on their attitude towards CholoBike. The fact that younger people/ students tend to value sustainability more might also have a positive impact on their positive attitude towards CholoBike. 4. Visitors (1 day) Short stay visitors can also provide an interesting volume potential for CholoBike. Most cities have insight into the numbers of short stay visitors and the main purposes of their stay, so that the potential and the requirements can be studied and set. Because of their higher number and their tendency to visit the city a few times every year this segment needs careful attention. The variety of the usage in this segment generally is wider, which puts lower constraints on the service level. In this segment business travellers could also be included, such as conference participants or regular business travellers (who came by plane/ train). 5. Tourists (+ 1 day) We make a distinction between visitors and tourists, because the dynamics of these segments differ. CholoBike can support City Marketing in general and - more specific - can open up new areas for visitors. Route applications and the availability of bike stations (in less well known parts of the city) might stimulate visits to these new areas. Since the popularity of Bike sharing service is increasing, the chance that tourists already had a bike share experience in another city or in their own city increases. Therefor they might be more used to the idea of using the CholoBike. New segmentation ... Someone is Paying for Me! ‘Someone is Paying for Me’ (SPFM) ... 4 sub-segments CholoBike introduces a new segmentation based on the segment ‘Someone is Paying for Me’ (sponsored rides). SPFM distinguishes 4 sub-segments: 1. Paid because I am a loyal (and valued) customer (Loyalty marketing) 2. Paid by redemption of loyalty points (Loyalty marketing/ value services) 3. Paid by my employer (Best employer and Sustainable Company) 4. Paid by my hotel (Sales incentive/ Value services and Sustainable hotel/ Green Key) 1. Loyalty marketing: Paid because I am a long term customer Companies might want to reward their (loyal) customers in order to increase appreciation and loyalty and strengthen their brand positioning (in general CholoBike provides an excellent opportunity to do this. Loyal customers can be rewarded with free rides. This loyalty reward could even be combined with specific events (perhaps also sponsored by the company). The company might only select a specific segment of his loyal customers to offer free rides. The specific advantage of this service is that the company and its customers value the offer (of a free ride), but only a relatively small part of these customers actually have the opportunity to use this offer and enjoy a free ride. So the company partly pays for an offer that is valued but not used by their customers. Free rides could also be a part of a specific marketing campaign aiming for new customers. 2. Loyalty marketing/ value services: Paid by redemption of loyalty points rides can be an interesting redemption option for existing loyalty schemes. Loyalty cardholders could redeem their points for a discount (Miles & Money) or a free ride (Miles only). This new redemption option contributes to the positioning of the loyalty scheme and has an impact on sales opportunities of that scheme. 3. Best employer: Paid by my employer, the employer could have a number of reasons to pay for CholoBike rides for his employees: It helps his employees to stay fit, which has a positive impact on performance and absenteeism. Depending on the local situation the availability of a CholoBike could help save time caused by congestion. Often cycling in the city center is faster than travelling by car. Also most of the time it is easier to make an estimation of travel time per bicycle than an estimation of travel time per car. CholoBike could also contribute in cutting costs of travel expenses (car, parking fees). Besides all these ‘functional’ advantages, it also contributes to the performance of sustainability of the company. This not only proves to be relevant for clients (brand positioning, transforming into business), but also for recruiting new young talent. 4. Sales incentive/ Value services: Paid by my hotel It is more common already that hotels offer rent-a-bike services to guests. We noticed that hotels in general have a positive attitude towards extending bicycle services and outsourcing this to the CholoBike. It can replace the individual rent-a-bike service. As the company’s product is designed for mobile application, their customer segmentation is determined to be technology oriented. In other words, CholoBike targets is young, urban, smartphone-owning individuals. CUSTOMERS IN TERMS OF TARGET MARKET When it comes to marketing, if you’re trying to target all the segments of the market, you’re going to have a difficult time reaching anybody. Which is why targeting in marketing is so important. For that CholoBike targets three groups of customers below: 1. STUDENTS: A survey shows that students are willing to use a bike more often (68%). They know the system, but only half of the students know how the system works. They are an important target group, on whom new marketing campaigns should focus. 2. RESIDENTS: Cycling is an opportunity, because the surveyed residents are positive about it and are of the opinion that it is healthy, important, fast and that it is good value for money. 3. TOURISTS: 65% of the surveyed tourists would like to use a bike more often during their visit. Only 52% of the tourists know the system and 67% has never used the system before. Hotels are interested in the CholoBike as well. The interviewed hotels already provide free bikes to their guests. Instead of buying and repairing hotels can combine rental for guests and employees, as they indicated to consider paying for the employees to be able to use the CholoBike. In combination with sponsoring this would be a chance. Positioning CholoBike will position themselves as the premier bicycle sharing system, specials and other deals, providing the customers with increased margins. CholoBike will leverage their competitive edge to ensure the proper positioning. Currently the existing bike sharing system in the market are not specializing their service lines. They tend to carry les range of bikes and stations. It is a clear advantage to be focused. By focusing on increasing docking stations and coverage area CholoBike can find services that offer very nice margins, uncharacteristic of the bicycle industry. The trend of the industry in general is of consolidation. By offering value-added services which provide the user with better than average margins, CholoBike can develop value that creates a steady flow of customers of their own. Differentiation The drive for improving and/or creating new bike sharing systems has led CholoBike to introduce three types of bicycles that has not yet been done by the competitor(s). CholoBike is also a docking-system enabled service which prevents any risk of vandalism or threat. Coverage Area When beginning to plan a system, identifying a coverage area (the physical area that the CholoBike system will cover) and saturating it with the appropriate number of stations are the most critical factors in creating a successful system with high ridership. The coverage area must be large enough to contain a significant set of users’ origins and destinations. If it is too small to connect meaningfully to other places, the system will have a lower chance of success because its convenience will be compromised. When defining the coverage area, the city will have to balance demand with costs. The identification of the appropriate coverage area is best carried out by qualified planning institutions through surveying and statistical data analysis. The coverage area must be determined in tandem with the system size to ensure that the system is both large and dense enough to encourage high ridership due to its convenience, reliability and ubiquity. Keeping all these terms in mind, CholoBike will cover the following: DHAKA 1.Residential areas in Dhaka. • Gulshan • Dhanmondi • Mohammadpur • Mohakhali (DOHS) • Mirpur (DOHS) • Banani (DOHS) • Baridhara (DOHS) 2.Cantonments • Dhaka cantonmoent • Mirpur cantonment 3.Dhaka University Marketing Mix Product strategy CholoBike is a bike sharing service that works by using Cholobike application. The objective of this service is to boost demand for paid bicycle rides, change transportation belief of people and to benefit our environment. Normally, the consumer of CholoBike service will pick up a cycle from the nearest docking station and ride to their destination and end the trip as shown in the features. The fare does not start until a new rider unlocks the bike with the code-generator. However, CholoBike service has another different concept. Exhibit 10.2 shows that the driver will pick up two riders with the same destination can share our two seated bicycles along the way. The service will help to reduce cost by splitting with two rider. The concept is to push a button on CholoBike application. Branding Strategy CholoBike brand communicates our complete commitments to serve riders an exceptional riding service that is reliable low-cost, convenient and environment friendly. The brand embodies the values that we believe in Green Transportation that does not use or rely on dwindling natural resources.Also, it gives affordable access to bicycles for short-distance trips in an urban area as an alternative to motorized public transport or private vehicles, thereby reducing congestion, noise, and air pollution. In addtion, CholoBike brand has few types of services to satisfy different rider’s expectation. Uber’s services include regular bikes, two-seater bikes, and delivery bikes, which is the latest service. CholoBike will not only continue to enhance quality of its services and offer new reliable service, but it will also promote strategy and online marketing to be more engaged with both current users and potential users. Pricing strategy The fair set is users will be charged Tk 3 for every five minutes, and the bicycles must be returned to the point where they were taken from. Based on user feedback the fare will be reviewed as well as other related issues before full-fledged operation is launched.. However, the riders can also get free rides according to loyality points , split fare charged with other rider helps the customers to pay less, someone is paying for me etc. The purpose of the company is to reduce transportation cost with a green solution. The pricing strategy will help the new service to spread widely and more quickly. The mindset of customers is fixed in a way that they are always seeking for some kind of deals to reduce their spending. As a result, the main goal of marketers when planning any marketing plan involves pricing strategies to attract more users. Same way, CholoBike is offering low price with its new service to gain market share. Promoting strategy Strategic Partnership CholoBike’s promotion will mainly revolve around user exposure. This gives the company to partner with organizations such as ‘BdCyclists’ which is a non-profit bicycle organization which encourages members to break the boundary of cycling to not just commute but as a way of life. ‘BdCyclists’ being an immense organization with more than 1500 members, CholoBike will give the members promotional discounts to increase exposure among avid cyclists. Events CholoBike will have volunteers and employees attend stat-up events which gives people mitigate if/any confusions they may have about public bike sharing systems. CholoBike will also host trade show events for promotion and demonstration of the bicycles and usage of the application. Hosting training sessions on riding bicycles and road safety. Timely Promotions CholoBike’s promotion strategy also involves giving discounts during special discounts during times like Eid-Ul-Fitr, Eid-Ul-Azha, Boshonto Utshob and Pohela Boishakh. Customer Service Consumers will be surprised at the level of customer service that they’ll receive. CholoBike business practices and customer training emphasize the importance of exceeding customer's expectations. If this is accomplished, profits are virtually guaranteed. Also a hotline service for 24 hours, so that consumers can learn more about the details of CholoBike. SWOT analysis Strength Mobile Platform- Not the first in the market but can fill the needs of the customers. Established payment methodPrepayment method (Recharge system with over-time comfort). GPS mapping technology. Zero waste, gas emitting and Weakness Reliable on technology. Cannot cover entire city. Safety. zero carbon-footprint. Healthy transport. Opportunities Increase in potential customers (Due to cheaper costs). Potential area coverage expansion. Potential to expand to overseas in the long run. Threat Back-lash with existing and new companies. Vandalism and theft. Dealing with wary government. Dangers of over-supply. SMART Goals S: Integrate bike share as an extension of Dhaka’s public transit network. M: 150 docking stations; 850 bicycles scattered throughout Dhaka’s residential areas. A: Conducting a situation analysis at the end of each month. R: Matches the company’s vision to build a seamless transportation system in the urban areas. T: By the end of 2021. PESTLE Analysis of CholoBike Political factors: CholoBike may face controversy. In its initial development, CholoBike didn’t have clear regulations. It was difficult to pinpoint insurance lie in — if there is an accident, is the rider at fault, or the company itself? Secondly, the installation and operation of CholoBike costs a certain amount of money and that has to be paid for. Within the current models, there are roughly three types of income: public money, advertising money and subscription fees. Governments can increase the avail-ability by direct subsidy and allowing advertisements, in exchange for a lower subscription fee. But this is a political decision and it will firstly be competing with other political ambitions and secondly, be challenged by people who argue, to more or lesser extent, that this form of redistribution (public money comes from taxation) is wrong. Even if they do not oppose redistribution per se, they can claim that the freedom gained is not in proportion to the freedom lost by the extra tax paid. Also they might argue that public money towards (a preferred) system disturbs the market, leads to higher overall expenses and infringes the freedom of other entrepreneurs. The next political concept is that of equality. We have already seen that politics can influence the effective freedom to use bicycle sharing systems, but that alone does not ensure that people have equal access to it. We limit ourselves here to bicycle sharing systems that are deployed within only one city. This need to limitation already shows that on levels higher than municipalities people are not treated equally, but we now only want to be concerned with equality within the area in which a system aims to operate. Economic factors: The industry that CholoBike operates in is the sharing economy. It means that this economy is based on sharing physical or intellectual resources. In this case, CholoBike provides bikes to customers and help them to reach a near destination. It’s cheaper than rickshaw rides and easier to schedule an appointment. Although, CholoBike having an unfair competition against regular rickshaws. People in this industry face debate, but CholoBike’s fast development can lead them to be the focus point. Peopl are studying whether this type of economy brings new career opportunities or takes them away from existing positions. Or bringing in new opportunities but for lower pay. Social factors: Customers of CholoBike will enjoy it’s easy to access platform. Finding a bike in the nearest station is easy using the app on smartphones. It requires no communication rather than a few presses of a button. The cheaper price is enticing to many, which will lead to the explosion of its growth all over city. As consumers enjoyed their rides, they posted about their experience on social media sites. Word of mouth spread awareness quickly. But with the popularity increase, prices in major cities may rose too. Good for CholoBike, but not welcome by riders. The more accessibility CholoBike provides, the more people will use its services rather than rickshaws or even public transportation. Technological factors: CholoBike will spread like wildfire through social media. People explaining their riding experiences online can spread and share stories. It will encourage new users to do the same. Buyers are searching for cheaper transportation options and CholoBike fulfilled this need. Consumers make appointments through the app. An estimate for the ride cost can appear in the app — it depends on many factors like drop off location, traffic and weather. They can pay for the ride up front through the app too. The app is incredibly important to CholoBike. It can’t function if the app goes down or suffers difficulties. The company must ensure everything is working, reliable and ready to go. Legal factors: Legal factors were touched on under the political factor part of this analysis. CholoBike can face much criticism, bans and attempt bans in locations countrywide. The company must follow technical usage laws, copyright laws. Environmental factors: Despite these difficulties, CholoBike, on the whole, is a win for everyone. Rebranding something as conventional as urban cycling in a way that embraces the philosophy of shared resource economies and is well accepted by the public, is a timely investment for actively promoting sustainable transportation. Cities that come up with strong and coherent plans will find that recognizable bike sharing schemes can form a powerful and positive part of their image. Meanwhile, civilians of all stripes stand to benefit from clearer roads and cleaner air – whether they cycle or not. Porter’s 5 Force Analysis 1) THREAT OF NEW ENTRANTS Entry barriers are high. Huge investment Capital investment is very huge in two wheeler industry. The biggest challenge is setting up sales & service center, which is very hard for a new entrant. Well established players are already existing. Industry is consolidated. Threat of new entrance is very low. 2) THREAT OF SUBSTITUTE Faces direct competition from the automobile sector. Substitute products for two wheeler industries are: – Bus, Auto, Cars and other public transports. Reasons for choosing substitutes may: – Relative quality of substitutes is higher– Switching costs is lower. Threat of substitute is high. 3) RIVALRY AMONG COMPETITORS Price, Quality of the products plays an important role for rivalry among competitors. Methods adopted to attract customers - Discounts, availability of loans, low rate of interest and long-term warranties to attract customers. Each company in industry change the model ongoing basis to show differentiation in their competitors. Rivalry among sellers are high. 4) BARGAINING POWER OF SUPPLIERS The automobile supply business is quite fragmented. Bargaining power of suppliers are Low.