NOEL FERGUSSON TAFE ID 376640850

BSBMKG501B

MARKETING OPPORTUNITIES

Assessment 1

SUPER CYCLES

IDENTIFICATION OF MARKETING OPPORTUNITIES

23 July 2014

TASK 1

ANALYSIS OF THE AUSTRALIAN BICYCLE INDUSTRY

According to current data, bicycle retailing and repairing in Australia generates revenue of $812 million. 1,564 businesses employ 4,454 people. No one company enjoy a significant market share in this industry (Source: http://www.ibisworld.com.au/industry/bicycle-retailing-and-repair.html).

Bicycle Industries Australia Ltd has reported that:

2012/2013 imports totalled over 1.4 million bicycles – an increase of 16.6% on 2011/2012;
Imports for adult bikes increased 21%
Children’s bike imports decreased 7%
(Source: http://www.bikeoz.com.au/index.php/news/67-bicycle-sales-hits-new-high-as-children-get-left-behind)

A report released by the Prevention Research Collaboration of the University of Sydney has found:

Cycling in Australia is increasing gradually resulting in:
Cleaner cities
Less congested cities
Less stress on public transport systems
More active healthier population
Reduction in greenhouse gas emmisssions
Reduction in rate of obesity
Cycling offers commuters
Opportunity to say time and money
Chance to avoid stress of traffic jams, late trains, and crowded buses
Ability to incorporate physical activity into their daily routine
Cycling provides multiple health outcomes

Recognising these benefits, Australia’s National Cycling Strategy aims to double the number of Australian cyclists by 2016, and The City of Sydney Cycle Strategy and Action Plan 2007-2017 aims to increase the number of bicycle trips made in the City of Sydney, as a percentage of total trips, from less than two per cent in 2006 to five per cent by 2011, and to 10 per cent by 2016. (Source: http://sydney.edu.au/medicine/publichealth/preventioresearch/news/Cycling%20to%20work%20in%20Sydney%202001-2011%20-%20final%20for%20website%20(2).pdf)

Unfortunately, the data obtained from the Census doesn’t ask about use of a bicycle for recreation, sport or other utility journeys and therefore underestimates total bicycle use.

Evidence obtained from both the United States and British markets show that the recreational market commands the majority of bike and related product sales. The American National Bicycle Dealers Association reports that 73% of adult cyclists ride for recreation purposes. This trend would also be mirrored here in Australia.

NEW PRODUCT OPPORTUNITIES RESULTING FROM INDUSTRY ANALYSIS

Three factors were considered when looking at new product opportunities:

New-to-the-world products
New product lines
Additions to existing product lines.

Resulting from my research into the bicycle industry and product strategies, four potential product opportunities exist. These are:

1. The Electric Bicycle

Increasing our core product line of recreational bicycles through the entering the electric bicycle market has the potential to reshape the bicycle industry and motivate more people to take up cycling. Providing increased growth, revenue and profitability, it will add life to the product life cycle and will attract new bike riders to the market.

The market potential of e-bikes as predicted by Pike Research, is that global sales in 2018 will reach 47million units and US$11.9 billion revenue (Source: http://www.pikeresearch.com/newsroom/annual-sales-of-electric-bicycles-will-surpass-47-million-by-2018-2).

The electric bicycle (e-bike) is a normal bicycle with the addition of a battery pack and an electric motor battery pack that can be recharged at any time by plugging it into the mains. The motor is there to ease the burden of pedalling, making it easier to go uphill or cycle into headwind, and it will help you cycle further, with less effort, than you could on a regular bicycle.

Industry analysis of factors influencing entry to this new market shows that:
Sales of electric bikes in Australia have been exponential;