Glide Ride is the leader in the personal watercraft (PWC) market. By positioning itself as the leader cognitively in the minds of the consumers it will sustain this position and grow. They currently own 31% of the market. Since the PWC market has grown from 5 manufacturers in 1990 to 25 in today’s market, this industry is highly competitive, and sustaining a high level of brand equity will go a long way in keeping GR at the top.
Increasing the market share from 31% to 37% among men who are married, between the ages of 25-44, and have an annual income of at least $35,000 is the target market for GR. Out of the survey of PWC owners and enthusiasts: 28% own a boat, 34% own a motorcycle, and 33% own an all-terrain vehicle. Increasing awareness of GR and specifically the GR1 to those owning one of these vehicles would be an effective advertising objective.
Since there are many competitors in today’s market, and 72% of owners and enthusiasts claim that PWC use has increased in the past year, the market is highly competitive. Although GR did not start targeting the mass markets until the 1980’s, and there were only 5 major manufacturers in 1990, the watercraft industry is a relatively mature market without much parity due to the fact the market now has 25 manufacturers. The brand equity of GR is still high because it is the leader in the market, and has been around since the 1960’s. Being one of the oldest brands in the industry, GR can position its brand as reliable and trustworthy. Consumers will trust a brand that has been around longer because they realize there is something GR has been doing correctly to last this long.
GR is known for having great customer service and being more operator-friendly. Associating GR with quality, consistency, and dependability will be good for its brand equity. Making sure that there is a congruency between the brand image GR is trying to project and the dealerships that carry GR watercrafts is important. GR wants the dealer of its brand to be just as reliable and dependable as they are.
To help better reach this objective, GR must offer sales promotions to those who already own a PWC. Nearly half of PWC owners also have a second, so offering an incentive such as buy-1-get-1-half-off would help increase foot-traffic, and convince buyers who are thinking about purchasing a PWC to buy 2 at a GR dealer. This will help get GR more in the minds of the consumer and get them closer to the point-of-purchase. With each promotion, GR needs to be a step closer to selling a PWC. Also offering giveaways such as a free gascard or PWC cover with the logo on it would be helpful. Everyone in the market owns a vehicle that consumes gas; so offering an incentive that everyone will benefit from will increase brand recognition. Since GR wants to market its GR1 model specifically, offering a free warranty with it will help the consumers’ peace of mind, and will help GR cover itself if something should go wrong.
The biggest problem in this industry is the consumer finding a place to ride the PWC. Finding reputable dealers, who have a man-made lake next to them, such as the Bass Pro Shop in Louisiana, will help solve this problem. Offering free ‘testdrives’ to potential consumers, and handing out information in the form of pamphlets and maps with lakes near by will also help solve this problem.
GR grossed $150 million in net sales in 2010, and allocated 10% of sales to their marketing budget with an extra million to sales promotions. This means that $16 million was used towards advertising. GR has increased sales by $18 million in the last 5 years averaging a $3.6 million increase per year. Also, GR increased net sales by $10 million from 2009 to 2010. That is a 7% increase from their 2009 figure of $140 million to their 2010 figure of $150 million. With only a 3% increase the previous year, and 2% increase the year before that, 7% is by far their highest increase in sales in the last 5 years.
By raising the advertising budget from $16 million to $17.35 million, GR would only need to increase sales by 3% to break even. This goal is very feasible considering last year’s increase, and would still allocate another $1.35 million to the budget. It is unlikely that GR will not be able to reach this goal considering sales increased by 3% from 2008 to 2009. Also, 72% of those surveyed reported PWC use has increased in the last year. It is important for GR to realize that owning the largest market share means that there is a limit. Having a larger budget where sales would have to increase by 7% like sales did the year before, just to break even would be unwise.
Using qualitative research will achieve the cognitive communication effect GR is looking for. Further increasing of brand recognition and awareness will be the best way to achieve the advertising objective of gaining 6% of the market. By using surveys, focus groups, and in-depth interviews, GR will better understand how to get inside its target market’s mind. Figuring out why consumers choose one brand over another, why one brand is always the first to pop into their head when thinking about PWCs, and what incentives and promotions are more likely to bring a consumer closer to the point-of- purchase is what this descriptive research will yield. The key insights conveyed through this non-statistical methodology is the best way to pursue a cognitive communication effect.
In a mature market with little parity, a company can only gain so much SOV and can only categorically index so high before losses occur. Brand recall and brand image through associating GR with reliability should be at the top of its priorities. This company needs to focus on owning the largest market share and keeping it without overspending. Retaining consumers with cognitive communication affects such as brand recognition will keep GR on top and makinga profit. Promotions such as giveaways and coupons will help retain consumers, and targeting men shopping at ‘outdoors’ stores will help ensure a market share of 37%. Marketing the GR1 is vital to this company’s future, so featuring it on ads and promotions is necessary. This company has a strong corporate image, good brand equity, and great reputation, which are reasons why it will gain 6% of the market share, and turn a profit in 2012. GR wants its own unique image in the market, and when consumers recall this brand, they will think of great service, operator-friendly, and reliability.
BreakEven Analysis
Net Sales 150,000,000
Costs of Goods Sold 105,000,000
Gross Margin 45,000,000
Admin/Marketing 28,000,000 (Advertising-16,000,000)
Net Profit 17,000,000
New Admin/Marketing- 29,350,000
New Gross Margin- 29,350,000 +17,000,000= 46,350,000
New Net Sales- (46,350,000 x150,000,000)/ 45,000,000= 154,500,000
New Costs of Goods Sold-154,500,000/ 46,350,000= 108,150,000
Net Sales 154,500,000
Costs of Goods Sold 108,150,000
Gross Margin 46,350,000
Admin/Marketing 29,350,000 (Advertising-17,350,000)
Net Profit 17,000,000
Sales Increase Needed- 154,500,000-150,000,000= 4,500,000
Percentage Increase Needed-4,500,000/150,000,000= 0.03 or 3%
GR will need to increase sales by 3% to break even.
Increasing the market share from 31% to 37% among men who are married, between the ages of 25-44, and have an annual income of at least $35,000 is the target market for GR. Out of the survey of PWC owners and enthusiasts: 28% own a boat, 34% own a motorcycle, and 33% own an all-terrain vehicle. Increasing awareness of GR and specifically the GR1 to those owning one of these vehicles would be an effective advertising objective.
Increasing foot-traffic in dealerships that sell GR watercrafts will increase the frequency of those in the market who are potential buyers. Since men ride PWCs twice as much as women, targeting men is a good objective. Raising the market share from 31% to 37% is the main advertising objective, and it is feasible because GR is the leader in the market. By positioning itself as the industry leader and the sit-down PWC specialist, more consumers will go to it for sit-down watercraft. To meet GR’s objective of raising their market share, GR must have good brand recall and recognition. This means they must effectively communicate with the consumers on a cognitive level. When a consumer in the target market is thinking about purchasing a PWC, he needs to be thinking of GR and what GR has to offer. Increasing awareness in those who already own a PWC, boat, motorcycle, or all-terrain vehicle, is key to GR’s advertising objective.
Since there are many competitors in today’s market, and 72% of owners and enthusiasts claim that PWC use has increased in the past year, the market is highly competitive. Although GR did not start targeting the mass markets until the 1980’s, and there were only 5 major manufacturers in 1990, the watercraft industry is a relatively mature market without much parity due to the fact the market now has 25 manufacturers. The brand equity of GR is still high because it is the leader in the market, and has been around since the 1960’s. Being one of the oldest brands in the industry, GR can position its brand as reliable and trustworthy. Consumers will trust a brand that has been around longer because they realize there is something GR has been doing correctly to last this long.
GR is known for having great customer service and being more operator-friendly. Associating GR with quality, consistency, and dependability will be good for its brand equity. Making sure that there is a congruency between the brand image GR is trying to project and the dealerships that carry GR watercrafts is important. GR wants the dealer of its brand to be just as reliable and dependable as they are.
To help better reach this objective, GR must offer sales promotions to those who already own a PWC. Nearly half of PWC owners also have a second, so offering an incentive such as buy-1-get-1-half-off would help increase foot-traffic, and convince buyers who are thinking about purchasing a PWC to buy 2 at a GR dealer. This will help get GR more in the minds of the consumer and get them closer to the point-of-purchase. With each promotion, GR needs to be a step closer to selling a PWC. Also offering giveaways such as a free gascard or PWC cover with the logo on it would be helpful. Everyone in the market owns a vehicle that consumes gas; so offering an incentive that everyone will benefit from will increase brand recognition. Since GR wants to market its GR1 model specifically, offering a free warranty with it will help the consumers’ peace of mind, and will help GR cover itself if something should go wrong.
The biggest problem in this industry is the consumer finding a place to ride the PWC. Finding reputable dealers, who have a man-made lake next to them, such as the Bass Pro Shop in Louisiana, will help solve this problem. Offering free ‘testdrives’ to potential consumers, and handing out information in the form of pamphlets and maps with lakes near by will also help solve this problem.
Since owners tend to be adventurous and outdoors-oriented, giving promotional coupons and pamphlets at stores such as Academy or Woods and Water would better help reach the target market. Just getting in the minds of people who aremore likely to buy a PWC will help increase the GR’s reach and brand recall. Every time someone comes in contact with PWC they need to be a step closer to buying one, so targeting people at stores to which they already go, and offering them incentives to purchase a PWC will increase net sales.
GR grossed $150 million in net sales in 2010, and allocated 10% of sales to their marketing budget with an extra million to sales promotions. This means that $16 million was used towards advertising. GR has increased sales by $18 million in the last 5 years averaging a $3.6 million increase per year. Also, GR increased net sales by $10 million from 2009 to 2010. That is a 7% increase from their 2009 figure of $140 million to their 2010 figure of $150 million. With only a 3% increase the previous year, and 2% increase the year before that, 7% is by far their highest increase in sales in the last 5 years.
By raising the advertising budget from $16 million to $17.35 million, GR would only need to increase sales by 3% to break even. This goal is very feasible considering last year’s increase, and would still allocate another $1.35 million to the budget. It is unlikely that GR will not be able to reach this goal considering sales increased by 3% from 2008 to 2009. Also, 72% of those surveyed reported PWC use has increased in the last year. It is important for GR to realize that owning the largest market share means that there is a limit. Having a larger budget where sales would have to increase by 7% like sales did the year before, just to break even would be unwise.
Using qualitative research will achieve the cognitive communication effect GR is looking for. Further increasing of brand recognition and awareness will be the best way to achieve the advertising objective of gaining 6% of the market. By using surveys, focus groups, and in-depth interviews, GR will better understand how to get inside its target market’s mind. Figuring out why consumers choose one brand over another, why one brand is always the first to pop into their head when thinking about PWCs, and what incentives and promotions are more likely to bring a consumer closer to the point-of- purchase is what this descriptive research will yield. The key insights conveyed through this non-statistical methodology is the best way to pursue a cognitive communication effect.
In a mature market with little parity, a company can only gain so much SOV and can only categorically index so high before losses occur. Brand recall and brand image through associating GR with reliability should be at the top of its priorities. This company needs to focus on owning the largest market share and keeping it without overspending. Retaining consumers with cognitive communication affects such as brand recognition will keep GR on top and makinga profit. Promotions such as giveaways and coupons will help retain consumers, and targeting men shopping at ‘outdoors’ stores will help ensure a market share of 37%. Marketing the GR1 is vital to this company’s future, so featuring it on ads and promotions is necessary. This company has a strong corporate image, good brand equity, and great reputation, which are reasons why it will gain 6% of the market share, and turn a profit in 2012. GR wants its own unique image in the market, and when consumers recall this brand, they will think of great service, operator-friendly, and reliability.
BreakEven Analysis
Net Sales 150,000,000
Costs of Goods Sold 105,000,000
Gross Margin 45,000,000
Admin/Marketing 28,000,000 (Advertising-16,000,000)
Net Profit 17,000,000
New Admin/Marketing- 29,350,000
New Gross Margin- 29,350,000 +17,000,000= 46,350,000
New Net Sales- (46,350,000 x150,000,000)/ 45,000,000= 154,500,000
New Costs of Goods Sold-154,500,000/ 46,350,000= 108,150,000
Net Sales 154,500,000
Costs of Goods Sold 108,150,000
Gross Margin 46,350,000
Admin/Marketing 29,350,000 (Advertising-17,350,000)
Net Profit 17,000,000
Sales Increase Needed- 154,500,000-150,000,000= 4,500,000
Percentage Increase Needed-4,500,000/150,000,000= 0.03 or 3%
GR will need to increase sales by 3% to break even.
