Thorr Motorcycles
Essay Preview: Thorr Motorcycles
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Background of Situation
Thorr Motorcycles is a company that manufactures 200,000 motorcycles a year. It also licenses T-shirts, shoes, leather goods, toys, and other consumer items. The company currently has a high-brand image manufacturing high-end motorcycles and owns approximately forty percent of market share.
The challenge for Thorr is that the industry is growing, but sales of its high-end product are decreasing. The reason for this loss of market share is that the target customers of its high end product is growing older, and younger people do not identify with the brand image of Thorr. In addition, Thorr is a high product and younger people do not have the large disposable income necessary to support the brand.
Recommended Solutions, Rationale, and Results
The first step in the simulation is to determine the market position of The Cruiser Thorr using a perceptual map. There are four parameters that must be selected in the simulation, and I chose Lifestyle Image, Product Design and Styling, Price, and Product Uniqueness. According to the simulation, “A large polygon depicts a large market share.” Apparently, the size of the polygon is irrelevant because the most accurate choices were lifestyle image, service offerings, quality engineering, and price. My logic is the larger the polygon the bigger the market share. The logic according to the simulation is that the service is a way to keep loyal customers happy, and quality engineering is a necessity for a motorcycle product.
The simulation apparently occurs in a vacuum for the first sequence. First, the “Price” is not a critical factor in a true oligopoly marketplace. In a true oligopoly, firms use non-price factors in order to generate larger revenues and larger market share. With a market penetration of over 40 percent, the firm has a strong brand presence and large market share already, and in theory non-price factors should be more important. Second, the simulation contradicts itself when it states that a large polygon means more market share. A larger polygon can be created by focusing on other factors than the recommended ones in the simulation.
The second step in the simulation is to elect either launching a new product line or repositioning the Thorr brand. I chose to launch an entirely new product line. With the new product line, the pricing I chose will be $13,000 to $15,000 to target the younger crowd. Promotion will take place through Hollywood Films to target the younger generation. Place will be both the internet and the dealer showrooms. The services lineup will include dealer training, customization options, and financial services. I chose this market plan through analyzing the SWOTT analysis, and my choices were dead on with the simulations optimal choices.
The third step in the simulation asked to interpret the data from the surveys in a perceptual plot. The interpretation of the data is a subjective measurement, and I did my best to analyze the data. My assumption is that if the company wanted to create a more accurate data plot that they would have customers actually give a one to ten rating on each of the factors outlined. For example, the company would have people number pricing on a scale of one to ten, which would be the same scale of the perceptual map. It is possible to use the survey information and create a subjective numbering system that corresponds to the strongly agree to the strongly disagree; however, I believe it would be simpler to have customers plot the perceptual map.
Relationship Between Differentiation and Positioning
Differentiation goes beyond segmentation and more into the other important factors of packaging, price, service,