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Snazz Bicycle - Selecting a Market Segment

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The objective is to Select the market segment you think is most likely to help Snazz meet its marketing objective of selling 10,000 units of a new bicycle model. We also need to explain the choice we made.

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Your Assignment
For this assignment, you will read a scenario and complete an activity in which you will select a target market for Snazz Bicycle Company. Then, in three or four sentences, you will answer the following two questions and post them to the discussion below.

This assignment will help you prepare for your next Caballero Coffee Company assignment, as you will need to consider the same concepts in choosing a target market for Caballero as you will for Snazz Bicycle Company.
- Which target market did you choose?
- Give two specific reasons which justify the segment you selected.
Tip: Keep in mind that there may be more than one appropriate choice as to which is the best target market for Snazz Bicycle Company.

Steps
1. Read the scenario and do the Which Segment? activity in Materials below.
2. Post your response to your work in the discussion below.

Materials
The following scenario and related materials will help you complete this assignment. Read them and then try the activity that follows.

Snazz Bicycle Company scenario
The marketing department at Snazz Bicycle Company has decided to focus its marketing plan on this objective: "Sell 10,000 units of a new bicycle model to a new market segment in the next calendar year." You, the marketing manager, have asked three members of your marketing team to select a market segment and create a marketing mix that would help Snazz achieve this goal. Here are Snazz's core competencies:

- Snazz's Core Competencies
- Snazz recently hired a new director of research and development.
- The Snazz sales force has historically enjoyed strong relationships with the independent bicycle dealers (IBDs) that serve as the primary outlet for Snazz products.
- Consumers associate the Snazz brand with quality and show a significant degree of brand loyalty.

Snazz's current target market consists of children, 7-17 years old, who use bicycles for leisure but are attracted by BMX (bicycle motocross) racing. Snazz has determined it has the financial and manufacturing capacity to target one additional segment at this time. The research and development (R&D) department is prepared to design a new product to suit the needs and preferences of the chosen market segment. Snazz hopes to leverage its strong relationships with independent bicycle dealers (IBD), who currently sell all of Snazz's bicycles, to obtain additional information on the preferences of bicycle riders. Read the following data that Snazz has collected on consumers to help you determine which segment Snazz should target with a new bicycle model.

Consumer data
? Children aged 7-17 show a declining interest in biking.
? A recent industry survey shows that children and teens have decreased their participation in bicycle riding.
? It appears that bicycling has changed from a childhood activity to an adult sport and adult leisure activity.
? Consumers over the age of 55 are the fastest-growing age segment in the country.
? Consumers in the 45-54 age group have the highest median income.
? Consumer spending on recreation increases with age.
? Recent market surveys indicate that aging consumers continue to pursue healthier and more active lifestyles. The same consumers are demanding higher-quality products.
Activity

Select the market segment you think is most likely to help Snazz meet its marketing objective of selling 10,000 units of a new bicycle model.
A: Cost-Conscious Adults/Economical BMX

Product: Low-end bikes that may have BMX and mountain bike features designed for adult leisure riding
Price: $250-$500
Promotion: Use of a sales force
Place: Mass merchandisers

B: Baby Boomers Who Want a Comfort Ride

Product: Component technology as in the BMX bicycles, light frame, ergonomic design
Price: $1,200-$2,000
Promotion: Publicity, glossy magazine ads in national publications
Place: Independent bicycle dealers (IBDs)

C: BMX Enthusiast/BMX Racer

Product: BMX bicycle enhanced with high-quality components and light frame.
Price: $2,000-$3,000
Promotion: Extreme sports sponsorships, advertisements in biking magazines, direct mail
Place: Mass merchandisers

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Solution Summary

This solution of 1,005 words conducts a market analysis for BMX bicycle products. It identifies the main target audience and suggest strategies to increase market segment. References used are included.

Solution Preview

Hello,

The goal is to sell 10,00 bikes to one new target market. I will start by process of elimination.

I do not believe that BMX enthusiasts / racers would be the proper target to sell to. The cost of the bike ranges from 2-3 K, which is a substantial amount of money. The economy is in a recession, and one of the first things that people cut out is luxury items, such as a $3000 bike. Granted, there will be people who are into the sport, and who will compete at a professional level, or who are very involved in the sport, but this will in no way amount to selling 10,000 units. As well, as people have less disposable income, they might also be prone to canceling magazine subscriptions. As well, I would think that the average age of the person who drives a BMX would be under 25 years old, and this is, unfortunately, the demographic that will be cutting down their spending.

Now, the cost-conscious adult may, in theory, be a wonderful segment to target. In today's economy, perhaps a person can't afford to maintain or buy a car, so they would consider purchasing a bike as their primary mode of transpiration. The price is also minimal compared to the maintenance and fuel costs associated with a car. As well, once you set out to pay the initial cost of the bike, maintenance costs are minimal, and you would be able to use the bike for recreational reasons as well.

The market research also shows that this age group has the highest medium income, but this does not ...

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