In the current business scenario, innovative business concepts are important to gain competitive advantages in the market. In addition, it should also be noted that current state of affairs are highly competitive in nature and thus providing convenience to the customers will be determining factor for the new businesses. This is due to the reason that customers will prefer the service where their convenience will be more (Casadesus-Masanell & Zhu, 2013). Gasman is one such proposed innovative business concept, which will provide holistic vehicle related services at the doorstep of the customers. This is proposed as an innovative solution due to the reason that as of now, there are number of vehicle maintenance services present in the market. However, most of these services are not providing added services such as towing and fueling services at the doorsteps of the customers (Pisanto, Pironti & Rieple, 2015). On the other hand, Gasman will provide one stop solutions for the customers related to their vehicles along with providing them loyalty benefits in the form of memberships.
This report will discuss about the business viability of the proposed business concept of Gasman. In doing so, this report will discuss about the revenue stream and key differentiating factors of them. In addition, in this report, the target market for them including the location, promotion and pricing analysis will also be done based on the budgetary considerations. Competitor analysis will be done to review the competitive scenario for Gasman.
The first revenue stream for Gasman is refueling services. Even though there are number of doorstep fuelling services available in the Canadian market but these services are only offering specific services and not any other added services (Banker, Mashruwala & Tripathy, 2014). In this case, the differentiating factor for Gasman will be the vehicle maintenance service provided to the customers. In addition, the minimal time to be taken in delivering the fuel to the customers will also be the key differentiating factor. Another major revenue stream for Gasman will be the membership facilities to the loyal customers. In this case, the customers will buy long term memberships for added services (Teeratansirikool et al., 2013). In this case, the key differentiating factor will be the facilities to be given to the customers. Services including tire changes, repair and complementary 5 point inspections will be provided to the customers. These bundled services are not being offered by any other providers in the Canadian market. The last revenue stream will be the towing service. Majority of the towing services are transporting the vehicle to the service center but Gasman will also offer emergency fuel checkups, tire repairs and changes as added services. These factors will differentiate their services over others (Farhana & Bimenyimana, 2015).
This venture will be viable due to the reason that in the Canadian market, holistic vehicle service providers at the doorsteps are not common and existing providers are only offering specific type of services. Thus, Gasman will have largely untapped market in Canada. It should also be noted that with the increase in the corporate professionals in the market, customers are having less time and they need doorstep services for the maintenance of their vehicles. Thus, Gasman will have high level of market potentiality in the Canadian market (Lechner & Gudmundsson, 2014). In the later stage, the venture can be increased in different other locations based on the rate of success in the current locations. It is estimated that the annual revenue for Gasman will be approximately US$ 130 million.
There are number of supply chain partners will be added in the supply chain system of Gasman. The major partner for them will be the service centers, with whom they will have agreements and will tow the vehicles for further servicing (Seuring, 2013). The spare parts manufacturers will be also considered as supplier as they will supply the parts to Gasman for servicing the vehicles of the customers (Appendix: 1). Fuel stations will also be termed as supply chain partners due to the reason that Gasman will transport their fuels to the customers.
|
Value |
Source |
|
|
Population |
305 million |
Canada Census |
|
Working Population |
50.5 % |
Dept of Labor |
|
Matures |
15 % |
Assumed |
|
Baby Boomers |
50 % |
Assumed |
|
Generation X |
20 % |
Assumed |
|
Generation Y |
30 % |
Assumed |
|
25 % |
Assumed |
|
|
Market size in Revenue |
$ 115.5 million |
The table above indicates the market size of Gasman in terms of estimated revenue and the number of consumers based on their characteristics. Moreover, as indicated the target consumer segments for Gasman for all its services such as matures, baby boomers, generation X, generation Y and Generation Z belonging to medium income group. These target consumers will be selected based on the fact that they prefer low price and value added goods (Tsai, Hu & Lu, 2015). The strategies set will be ideal for market penetration in comparison to its direct competitor. This will be through offering additional value added service offering convenience to these identified target consumers in case they do not have time to go out. They attain home delivery services that is time saving for them (Vidal et al., 2016).
The local residents will be the regulate target consumer base for Gasman. Targeting this consumer segment will facilitate in maintaining a healthy and consisted revenue base for success of its revenue streams or services. Moreover, the mature and baby boomer target consumer segment of Gasman will include the tow truck companies those desire for superior quality speedy service (Xu, Blankson & Prybutok, 2017). Targeting this consumer segment can ensure the company to attain an increased market share within selected location of Canada.
Figure 1: Canadian Population Demographics
(Source: Xu, Blankson & Prybutok, 2017)
From analyzing the graph above it is gathered that the Canadian consumers are segmented into matures baby boomers, generation X, generation Y and Generation Z. Moreover, figure 2 indicated below explain the demographics of target consumer spending in Canada over the years. It has been gathered that the purchasing power of the consumers is increasing which is advantageous for the business growth of Gasman (Wijaya et al., 2014).
Figure 2: Canadian Consumer Spending Demographics
(Source: Xu, Blankson & Prybutok, 2017)
The major competitors for Gasman will be Canadian Tire, Element Fleet, Crown City Tire, Bowman fuels and Sure Fuel. Majority of these competitors are offering specific services and thus Gasman will compete with them at different service levels. For instance, Gasman will compete with Canadian Tire in offering the tire repairing services and with Sure Fuel in home delivery of fuel services (Bienkowski et al., 2014). Some of the indirect competitors for them will be the brick and mortar service centers. It is identified that in terms of tire servicing market, Canadian Tire is the market leader with being in the market for large number of times. On the other hand, Sure Fuel is the market leader in the fuel delivery services.
|
Name |
Quality |
Pricing |
Key competitive features |
Trends |
|
Canadian Tire |
4 |
4 |
3 |
3 |
|
Crown city Tire |
4 |
4 |
4 |
3 |
|
Element Fleet |
3 |
3 |
2 |
2 |
|
Bowman fuels |
3 |
2 |
2 |
1 |
|
Sure Fuel |
3 |
3 |
3 |
2 |
|
Gasman |
3 |
2 |
3 |
2 |
Thus, from the above competitive analysis, it is identified that Gasman will be well ahead of its competitors in terms of quality and price. This will enable them to offer their services with higher quality standards and lower price points. In the above chart, the ranking is being given out of 5 and it is shown that Gasman will be ahead of some competitors in terms of key competitive features also.
It is recommended that Toronto will be the ideal location for Gasman in Canada. This is due to the reason that direct competition will be low for them in Toronto and indirect competition will be more. It is identified that majority of the competitors for Gasman will be brick and mortar stores and mobile apps based services (Montaser & Moselhi, 2014). This market scenario will be beneficial for Gasman in gaining competitive advantages. In addition, it is also identified that Toronto is the largest city in Canada in terms of population. Thus, customer and vehicular traffic will be more and Gasman will also have larger market potentiality.
The pricing strategy that is considered to be suitable to set by the Gasman is competitive pricing strategy. This strategy can facilitate the new business to attain a huge consumer base through offering its services and products at an affordable rate in comparison to its major business rivals (Andrews & Shimp, 2017). The price of the services is deemed to be justified as it can provide tough competition to its direct competitor through manipulating consumer decision making. Moreover, the target consumers prefer attaining increased value for services at affordable prices (Bellini et al., 2017). In such situation setting low processes in the industry can attain competitive advantage for Gasman.
Figure 3: Price quality and market share grid of Gasman
(Source: Authors Creation)
Focused on price quality and market share grid developed above the estimated prices for all the revenue stream or services offered by Gasman are explained under that can analyze relative position of the company and justification of pricing strategy selected:
Promotional strategy of Gasman will be based on both traditional and newer mediums. In terms of the traditional mediums, Gasman will involve print and television media due to the reason that these are having the most market penetration. The promotional content will be more informative and will focus on communicating the advantages to be gained by the customers from them. In terms of the newer promotional mediums, social media marketing will be extensively used (Gangwas, Kumar & Rao, 2013). This will help in determining the needs and expectation of the customers and can offer the service accordingly. Among the social media platforms, Facebook will be extensively used due to the fact that it is one of the commonly used mediums in Canada. Thus the market penetration for Gasman will be higher. In addition, the Twitter will also be used to initiate the more personalized communication process.
|
Budget Categories |
Total Budget |
Year To Date Spend |
Budget Remaining |
% Remaining |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
|
Radio stations |
$85,000 |
$61,000 |
$24,000 |
28% |
$15,000 |
$15,000 |
$15,000 |
$15,000 |
||||
|
Public Relations |
$35,500 |
$20,820 |
$14,680 |
41% |
$500 |
$20,000 |
$100 |
$50 |
$20 |
$25 |
||
|
Advertising (print) |
$12,000 |
$1,140 |
$10,860 |
91% |
$300 |
$600 |
$200 |
$40 |
||||
|
Advertising (online) |
$60,000 |
$55,000 |
$5,000 |
8% |
$5,000 |
$5,000 |
$5,000 |
$5,000 |
$5,000 |
$5,000 |
$5,000 |
$5,000 |
|
Content Production |
$36,000 |
$34,000 |
$2,000 |
6% |
$500 |
$30,000 |
$500 |
$1,500 |
$1,000 |
|||
|
Events & Sponsorships |
$180,000 |
$61,500 |
$118,500 |
66% |
$20,000 |
$40,000 |
$1,000 |
|||||
|
|
$240,000 |
$240,000 |
$0 |
0% |
$20,000 |
$20,000 |
$20,000 |
$20,000 |
$20,000 |
$20,000 |
$20,000 |
$20,000 |
|
|
$36,000 |
$14,300 |
$21,700 |
60% |
$12,000 |
$2,000 |
$300 |
|||||
|
|
$15,000 |
$3,260 |
$11,740 |
78% |
$50 |
$340 |
$2,000 |
$400 |
$200 |
$50 |
$200 |
|
|
Reid Signs |
$25,000 |
$26,000 |
-$1,000 |
-4% |
$0 |
$10,000 |
$5,000 |
$1,000 |
$10,000 |
|||
|
Totals |
$724,500 |
$517,020 |
$207,480 |
29% |
$73,350 |
$140,340 |
$49,600 |
$42,200 |
$25,550 |
$26,570 |
$26,240 |
$36,025 |
|
Cumulative Spend |
$73,350 |
$213,690 |
$263,290 |
$305,490 |
$331,040 |
$357,610 |
$383,850 |
$419,875 |
The table above explained the estimated budget set for promoting the services offered by Gasman to all its identified target consumers. Through considering the marketing expenditure it is anticipated that the company will attain a steady growth in its profitability over the upcoming years of its business operation in Canada. In addition, the graph below explains the anticipated budgeted and actual speeding that can be incurred by Gasman for making all its revenue streams successful in the new market. The estimated budget has been prepared taking into consideration that these marketing expenses made by Gasman can generate steady cash flow for the company to support its business operations.
Figure 5: Marketing Budget for Gasman
(Source: Authors Creation)
Conclusion
This report concludes that considering the market and business scenario of Gasman, it can be concluded that the proposed business venture will be viable. This report identified that Toronto will be the ideal location for business of Gasman. In addition, this report also identified the target market segments for Gasman along with the calculation of revenue from the targeted customers. It is also concluded that the promotional and pricing strategies discussed in this report will be beneficial for Gasman in enhancing their market potentiality.
Reference
Andrews, J. C., & Shimp, T. A. (2017). Advertising, promotion, and other aspects of integrated marketing communications. Nelson Education, 32(1), 65-76.
Bellini, E., Dell’Era, C., Frattini, F., & Verganti, R. (2017). Design?driven innovation in retailing: An empirical examination of new services in car dealership. Creativity and Innovation Management, 26(1), 91-107.
Bienkowski, M., Feldmann, A., Grassler, J., Schaffrath, G. and Schmid, S., 2014. The wide-area virtual service migration problem: A competitive analysis approach. IEEE/ACM Transactions on Networking (ToN), 22(1), pp.165-178.
Casadesus?Masanell, R., & Zhu, F. (2013). Business model innovation and competitive imitation: The case of sponsor?based business models. Strategic management journal, 34(4), 464-482.
Banker, R., Mashruwala, R., & Tripathy, A. (2014). Does a differentiation strategy lead to more sustainable financial performance than a cost leadership strategy?. Management Decision, 52(5), 872-896.
David, M. E., David, F. R., & David, F. R. (2017). The quantitative strategic planning matrix: a new marketing tool. Journal of Strategic Marketing, 25(4), 342-352.
Farhana, M., & Bimenyimana, E. (2015). Design driven innovation as a differentiation strategy: In the context of automotive industry. Journal of technology management & innovation, 10(2), 24-38.
Gangwar, M., Kumar, N., & Rao, R. C. (2013). Consumer stockpiling and competitive promotional strategies. Marketing Science, 33(1), 94-113.
Lechner, C., & Gudmundsson, S. V. (2014). Entrepreneurial orientation, firm strategy and small firm performance. International Small Business Journal, 32(1), 36-60.
Montaser, A., & Moselhi, O. (2014). RFID indoor location identification for construction projects. Automation in Construction, 39, 167-179.
Pisano, P., Pironti, M., & Rieple, A. (2015). Identify innovative business models: can innovative business models enable players to react to ongoing or unpredictable trends?. Entrepreneurship Research Journal, 5(3), 181-199.
Seuring, S. (2013). A review of modeling approaches for sustainable supply chain management. Decision support systems, 54(4), 1513-1520.
Steenkamp, J.B., 2017. Global Marketing Mix Decisions: Global Integration, Not Standardization. In Global Brand Strategy (pp. 75-109). Palgrave Macmillan, London.
Teeratansirikool, L., Siengthai, S., Badir, Y., & Charoenngam, C. (2013). Competitive strategies and firm performance: the mediating role of performance measurement. International Journal of Productivity and Performance Management, 62(2), 168-184.
Tsai, C. F., Hu, Y. H., & Lu, Y. H. (2015). Customer segmentation issues and strategies for an automobile dealership with two clustering techniques. Expert Systems, 32(1), 65-76.
Vidal, L., Antúnez, L., Giménez, A., Varela, P., Deliza, R., & Ares, G. (2016). Can consumer segmentation in projective mapping contribute to a better understanding of consumer perception?. Food quality and preference, 47, 64-72.
Wijaya, T. K., Ganu, T., Chakraborty, D., Aberer, K., & Seetharam, D. P. (2014, April). Consumer segmentation and knowledge extraction from smart meter and survey data. In Proceedings of the 2014 SIAM International Conference on Data Mining (pp. 226-234). Society for Industrial and Applied Mathematics, 32(1), 65-76.
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