Marketing Plan
Essay title: Marketing Plan
Marketing Plan
Marketing Strategy presented in Question and Answer Format
How can MLP be sure the CSOs will want the SRC ?
How can MLP make money with a SRC design ?
Why would an auto maker want to take a risk on producing the SRC ?
How can MLP demonstrate that a market exists ?
How big must the random sample of end users be ?
Where will the SRC be test marketed ?
What is a sufficient volume of SRC production to justify the cost of an auto plant?
If the SRC is feasible, why havent the auto companies done it already ?
How can MLP be sure the CSOs will want the SRC ?
Mobility For A Living Planet (MLP) will study the operating conditions and business practice of European CSOs. Top of the list is the parking situation. For example : what percentage of shared cars are parked curb side, open lot and parking garage ? If 90% are parked in groups of only 2 at curbside then perhaps the SRC needs to have a different body design. What is the typical width of a curbside space ? Could a short enough vehicle park perpendicular to the curb ? How expensive would it be to install a curbside electrical charging station ? If a large fraction park in parking garages then what is the ceiling height limitation ?
Other questions to consider are seating capacity, cargo capacity, and trip length. What is the distribution of trip lengths over a week ? If most days are spent making many short trips totalling only 30 miles, then a plugin hybrid with conventional batteries would be able to operate for most of the time in all electric mode. Although the average miles per day is 50 for some CSOs, the median day in a week might only be 30. It only takes one day of long trips, say 170 miles, to drive the weekly average up to 50.
MLP will seek to obtain information on all costs of operation for European CSOs. Then a cost model based on the SRC will be shown to be lower in cost than leased conventional cars.
How can MLP make money with a SRC design ?
MLP will persuade an auto maker to mass produce the SRC and pay royalties. By 2013 I expect some auto maker to be making 70,000 SRC a year and paying MLP $35 million in royalties. In 2020, auto makers will make 1.8 million cars and pay $ 542 million in royalties. Royalties per year are forecast in the section Royalty Revenue Forecast. The numbers of potential users, upon which the royalty revenue forecast is based is estimated in Projected Car Share Users.
The initial patent will expire in 2013. Follow on patents filed between 2005 and 2008 will not expire till 2025-2028. The car company will have a protected market for about 20 years. The car company could have a healthy profit per car because no other maker would be licensed to use the design and hence there would be no competition and no cut throat pricing.
When recruiting a car company, MLP will approach the majors, but also look at the smaller firms that can turn a profit on only 10 thousand cars per year. Given that there is no demonstrated, pre-existing market that absorbs 60,000 SRCs per year, it might be better to start with a small plant that makes only 10,000 per year. This small maker would have an exclusive license to make and sell in geographic area of 20 million or less. If they sell well, then it will be easier to convince a major, like Honda, to start making 60,000 a year.
Why would an auto maker want to take a risk on producing the SRC ?
There is no large existing market. Is the SRC just a niche market item ?
MLP will prove SRC demand exists with test marketing to end users and CSOs. By the end of the test market phase there will be hundreds of end-users, dozens of CSOs and dozens of parking providers that will